HomeMy WebLinkAboutMinutes - 06/07/2011 - Police Pension BoardMcHenry Police Officers Pension Board
Meeting of 6/7/2011
Attendees: Jeff Foerster, Brian Aalto, Bob Roske, Mel Prust, Jon Meyer, Carolyn Lynch, Joan
Lunsmann.
J. Foerster called the meeting to order at 3:03 PM, 6/7/2011. Purpose of the meeting is to decide
what to do with the CD that came due on 6/2/2011 for $1,000,000. C. Lynch solicited bids from
banks for interest rates on the CD. Two banks responded. One year CD - .61 %, two year, 1 %,
three year, 1.21 %. Jeff spoke to both Gary Karshna and Jim Schmidt who recommended going
to the bond market for a possible 2% interest rate. Lynch estimated cash flow needed for the
next year and predicted a possible shortage by May. However, another CD comes due in
December. No borrowing was required last year.
Foerster advised that Jim Schmidt, will have a new program to present to the board in July with
built-in insurance against large loss.
The question remains, should the matured CD be rolled over into a new CD or split between
American Funds and the bond market. Discussion centered on the percentage of the split as the
CD option seemed less than necessary based on interest rates offered. Jon Meyer asked about
the board's investment strategy. He was given a policy dated 1999. Foerster said updating the
policy will be discussed at a future meeting. Historically, CD's were the best investment choice
due to rates and ability to invest locally. Some investment is governed by statute.
Currently equities are at approximately 45%. Total fund is currently at approx $16 mil, with
45% in equities.
Both Jon Meyer and Mel Prust felt the board should invest with a mutual fund as opposed to a
CD.
Motion by Mel Prust to approve rolling over the expired CD and reinvest with a 50%/50% split
between equities and the bond market. Jon Meyer seconded. No further discussion. All ayes,
motion carried.
Jeff passed out brochures on the Midwest Pension Conference to be held Oct 4-7 in Lake Geneva
that would provide 16 hours of training for board members. More discussion to be held at next
meeting.
Mel Prust moved to adjourn the meeting, seconded by Brian Aalto.
The meeting adjourned at 3:20 PM.
Next meeting July 19, 2011