HomeMy WebLinkAboutPacket - 01/08/2019 - Police Pension Board ,Q_ McHenry Police Pension Board of Trustees
'"•� McHenry Municipal Center
+ 333 Green Street
McHenry, Illinois 60050
Phone: (815) 363-2108
Fax: (815) 363-2119
McHenry www.ci.mchenry.il.us
POLICE PENSION BOARD OF TRUSTEES
Tuesday,January 8,2019
2:30 PM
Municipal Center-333 South Green Street
City Council Chambers
AGENDA
1. Call to Order
2. Roll Call
3. Public Input(5 minutes)
4. Motion to approve the October 16,2018 meeting minutes.
5. Semi-annual review of Executive Session Minutes.
6. Investment Reports:
a) Presentation and Motion to approve Treasurer's Report
b) LPL Financial Equities Report
c) Capitals Gains, Inc. Fixed Assets Report
7. New Business:
a) Retiree Death Monitoring Service
b) Status of Police Pension Fund Disability Application of Sean Klechak
c) Motion to approve annual pension increases
d) Status of appointments to the Police Pension Board
e) Approve Laura Goodloe as our FOIA Officer
8. Unfinished Business:
a) Motion to approve payment of bills as presented
b) Public Pension Trustee Training Update
9. Adjournment
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Police Pen oard f Trustees
O ber 16 18
Call to Order
A meeting of the City of McHenry Police Pension Board of Trustees was called to order at 2:35 pm in the
McHenry City Council Chamber, 333 S. Green Street, McHenry, IL.
Roll call:
Members present: Jeffery Foerster, Nick Clesen, Jon Meyer, and Ormel Prust. 1-absent: Marc Fisher.
Others present:Jim Schmidt, LPL Financial; Gary Karshna, Capital Gains, Inc. and Finance Director Lynch.
There was a quorum present.
Public Input
None.
Meeting Minutes:
Motion to approve the July 10,2018 meeting minutes.
President Foerster asked if any of the members had any comments or questions with respect to the July
10, 2018 meeting minutes.The Members offered no comments. A Motion was made by Member Prust
and seconded by Member Clesen to approve the July 10,2018 meeting minutes as presented. Roll call:
Vote:4-ayes by unanimous voice vote.0-nays,0-abstained. Motion carried.
Presentation of Actuarial Valuation Report as of May 1, 2018 and recommendation to forward the
Pension Fund Tax Levy request to the full McHenry City Council
President Foerster initiated a conference called between the Police Pension Board Members and
Lauterbach and &Amen LLP representative Ms.Jessica Fain to discuss the Actuarial Valuation as of May
1, 2018. Ms. Fain discussed the contribution recommendation. She noted that the contribution
recommendation has increased by$62,718 from the previous year. Ms. Fain continued on to report that
the funded percentage has increased by 1.43% on an actuarial value of assets basis and the current
valuation is 53.40%funded.
Ms. Jessica discussed the actuarial contribution recommendation. Actuarial liability is expected to
increase each year for both interest for the year and as active employees earn additional service years
toward retirement. Similarly, actuarial liability is expected to decrease when the fund pays benefits to
inactive employees. She reported that contributions are expected to increase as expected pay increases
under the funding policy for the Fund. Taking into consideration the expected changes the contribution
recommendation dollar amount is $60,591 and the initial expected current valuation amount is
$2,080,294.
Ms. Fain discussed other increases and decreases in actuarial liability. She reported that salary increase
was greater than expected and contribution recommendation is$13,781.
In addition, Demographic Data demonstrates a change in gains and losses which occurred over the one-
year period as follows:
New Hires: The fund added 1 new active member with a higher than average entry age. When a new
member is admitted to the pension fund, the employer contribution will increase to reflect the new
member. The increase in the recommend contribution in the current year for the new fund member is
approximately$8,000.
Retirement: There was 1 member of the fund who retired this year. When a fund member retires, the
normal cost will decrease.The increase in the recommended contribution in the current year due to the
retirement experience is approximately$2,000.
Termination:There was 1 non-vested member of the fund who terminated employment during the year.
The member did not take a refund.The fund is no longer obligated to pay a benefit to the member in the
future.The decrease in the recommended contribution in the current year due to termination experience
is approximately$6,000.
Deferred Annuitants:There was 1 vested member of the fund who terminated employment during the
year. The fund may be obligated to pay a benefit to the member in the future. The decrease in the
recommended contribution in the current year due to the termination experience is approximately
$42,000.
Mortality:There is 1 surviving spouse who passed away during the year.When a surviving spouse passes
away the fund liability decreases,as the pension fund no longer will make future payments to the surviving
spouse. The net decrease in the recommended contribution in the current year due to the mortality
experience is approximately$14,000.
Ms. Fain continued on to report on the actuarial assumption utilized with respect to the return on
investments which is estimated to be at 7% net of administrative expenses and the CPI-U is at a rate of
2.50% and the total pay increase assumption is at 3.00 %. The individual pay increases assumption is
assumed at a rate between 4.00%-10.2%. Member Meyer commented on the total pay increase rate
assumption. He recalled that last year the Pension Board recommended the individual pay assumption
rate be assumed at a rate of 3.5%. A lengthy discussed ensued and at the conclusion of the conversation
the Pension Board Member concurred that the individual pay increase assumption remain at 3.00%. A
Motion was made by Member Meyer and seconded by Member Clesen to approve the individual pay
assumption rate at 3.00%. Roll call:Vote:4-ayes: Members: Prust, Meyer,Clesen and Foerster.0-nays,0-
abstained. Motion carried.
The Pension Board approved the final Actuarial Valuation Report as May 1,2018.A Motion was made by
Member Clesen and seconded by Member Meyer to forward the report and the Pension Board
recommendation for the Police Pension Fund Tax Levy request to the full City Council. Roll call:Vote:4-
ayes: Members: Clesen, Meyer, Prust and Foerster. 0-nays, 0-abstained. Motion carried. President
Foerster reported that he will draft a letter to send to the Mayor with the Police Pension Board's
recommendation and levy request.
New Business:
Motion to approve the purchase of service-time for unpaid leave for Officer Jill Foley
President Foerster discussed a request the Police Pension Board had received from Officer Jill Foley to
purchase 33 days of unpaid sick leave in the amount of$1,154.57.
President Foerster reported that this type of request had been approved in the past.In addition,the terms
will be set by the Actuarial including interest.The Police Pension Board Members were in favor of granting
the request as long as the term did not exceed one year. A Motion was made by Member Clesen and
seconded by Member Meyer to approve the purchase of service-time for unpaid leave for Officer Jill
Foley. However, the term of repayment shall not exceed one year from the onset of the payroll
deduction. Roll call:Vote:4-ayes: Member Clesen, Member Meyer, Member Prust and Member Foerster.
0-nays,0-abstained. Motion carried.
Motion to accept the annual Independent Medical Examination for Police Disability Pensioner Justin
DeBolt.
President Foerster reported that he had received the independent medical examination report and
recommends approval of accepting the report as presented. A Motion was made by Member Prust and
seconded by Member Clesen to approve and accept the annual Independent Medical Examination for
Police Disability Pensioner Justin DeBolt as presented. Roll call: Vote: 4-ayes: Member Prust, Member
Clesen, Member Meyer and Member Foerster.0-nays,0-abstained. Motion carried.
Motion to approve a request from former Officer Peter Nester for a refund of all pension fund
contributions in the amount of$46,432.40. President Forrester reported that the refund of all pension
fund contributions for Peter Nester is only the contributions he personally contributed to the fund. A
Motion was made by Member Meyer and seconded by Member Prust to approve the request from
former Officer Peter Nester for a refund of all pension fund contributions in the amount of$46,432.40.
Roll call:Vote: 4-ayes: Member Meyer, Member Prust, Member Clesen and Member Foerster. 0-nays,0-
abstained Motion carried.
Motion to approve Officer Megan Carey-Kiessel Application for Participation in the Police Pension Fund
President Foerster recommends approval of Officer Megan Carey-Kiessel application for participation in
the Police Pension Fund. A Motion was made by Member Clesen and seconded by Member Prust to
approve Megan Carey-Kiessel application for participating in the Police Pension Fund. Roll call:Vote:4-
ayes: Member Clesen,Member Prust,Member Meyer and Member Foerster.0-nays,0-abstained.Motion
carried.
Report of Investments and Accounts:
Presentation and Motion to approve the Treasurer's Report
A Motion was made by Member Meyer and seconded by Member Prust to approve the Treasurer's
Report as presented. Roll call: Vote: 4-ayes: Members Meyer, Member Prust, Member Clesen and
Member Foerster.0-nays,0-abstained. Motion carried.
LPL Financial Equities Report
Mr. Karshna provided the Police Pension Board Members with the Financial Equities Report as of
September 30,2018.He reported that the short duration bond strategy is working as planned with respect
to the current fiscal year and over the past twelve months. He will continue to monitor both the
international and domestic economic events and the impact they may have on the financial markets and
adjust the fixed income portfolio accordingly.
Capital Gains, Inc.Fixed Assets Report
Mr. Schmidt provided the Police Pension Board Members with an update on the Fixed Assets valuation
thru the period of December 29, 2017-October 15, 2018. Mr. Schmidt reported in the short-term the
various investments did not perform well over the course of this year. However, the loss is a paper loss
and he will continue to monitor the markets.
Semi-annual review of Police Pension Fund Investment Policy
The Pension Board Member reviewed the current investment policy and recommended no changes at this
time.
Unfinished Business
Motion to approve the payment of bills as follows:
• Capital Gains—Invoice dated 7/10/2018 $4,999.00
• Bankcard-Foerster-Invoice dated 8/10/2018 $375.00
• Capital Gains-Invoice dated 9/24/2018 $5,039.00
• Marsh bond-Invoice dated 9/24/2018 $50.00
• March bond-Invoice dated 9/28/2018 $270.00
• Foerster Conference Lunch 10/15/2018 $43.23
• IPPFA Dues-Invoice dated 10/01/2018 $795.00
A Motion was made by Member Meyer and seconded by Member Clesen to approve the payment of
bills as presented. Roll call: Vote: 4-ayes: Member Meyer, Member Clesen, Member Prust and Member
Foerster.0-nays,0-abstained. Motion carried.
Public Pension Trustee Training Updates
The Pension Board Members successful completed their annual training.Their Certificates of Completion
will be mailed and filed.
Additional Items for Discussion
There were no additional items discussed.
Motion to Adjourn
There being no further business to discuss, a Motion was made by Member Prust and seconded by
Member Meyer to adjourn from the public meeting at 4:05 p.m. Roll call: Vote: 4-ayes by unanimous
voice vote.0-nays,0-abstained. Motion carried.
Respectfully submitted,
Debra Meadows
Program Advantages
By connecting to a technology-based death monitoring service,police and fire pension funds
can receive almost immediate information when a death is reported. This permits a quick
termination or suspension of the monthly benefit. There is very little effort needed on the
part of the pension fund; once a record is in the file at LifeStatus360 it is continually included
in all death searches.
Please note that this program does not replace other efforts utilized by the pension fund to
ensure payments are made to only living pensioners nor does it replace the ongoing vigilance
that is always necessary for Trustees to properly execute their fiduciary duties.
Accessing the Program
L&A will be contacting its clients to initiate the service with pension funds interested in
participating in this program. Additionally, Illinois Article 3/4 police and fire funds who are
not L&A clients can participate by providing pensioner data to L&A for inclusion in the file
that is uploaded to LifeStatus360. This may involve transmittal to L&A of the pension funds'
annual filing with the Illinois Department of Insurance. A pension fund does not have to
be a member of IPPFA or a client of any pension administration company in order to
access this complimentary program.
Interested parties may contact:
Steve Earnhardt, Prindpal
LAUTERBACH &AMEN, LLP
Certified Public Accountants
668 N. River Road
Naperville, Illinois 60563
Phone: 630.393.1483 1 Fax: 630.393.2516
SEarnhardtklauterbachamen.com
IPPFA, October 2018
2
Debra Meadows
From: IPPFA <special-events@ippfa.org>
Sent: Wednesday, November 28, 2018 2:13 PM
To: Debra Meadows
Subject: POLICE/FIRE RETIREE AND BENEFICIARY DEATH AUDITING SERVICE
IPPFAi
PREPARE PROTECT EDUCATE INFORM
POLICE/FIRE RETIREE AND BENEFICIARY
DEATH AUDITING SERVICE
I IPPFA is pleased to announce a new program designed to help Article 3/4 police and fire pension
funds reduce the risk of payment of a pension to a deceased retiree or survivor. IPPFA is
especially pleased to announce that this program is offered to your pension fund at no cost because
you are an IPPFA member!
Program Description
For this important effort, IPPFA has partnered with the accounting and pension administration firm
of Lauterbach&Amen,LLP(L&A). A contract for service was entered into between L&A and a
technology company, LifeStatus360. LifeStatus360 is a well-regarded firm in the area of pensioner
locating and death auditing and is used by many large Illinois pension plans such as IMRF and
Chicago Police and Fire.
i
After receiving pension fund approval to participate in this program, L&A will provide
LifeStatus360 with a secure file of information on pensioners for any participating pension fund.
LifeStatus360 then continually runs that file through public death records and published
obituaries, seeking to identify Illinois police and fire pension payees who have been reported as
deceased.When a record of a possible death is found, LifeStatus360 notifies L&A of the reported
or suspected death. L&A will then take the necessary steps to make the pension fund aware of this
I notice so that any necessary action can be taken.
LifeStatus360's systems are highly secured and have extensive systems in place to protect the
{ information of its clients. Additionally, Lifestatus360 is on the US Department of Commerce NTIS
DMF list as certified to receive limited access to the Death Master File and also maintains the
AltiusIT Comprehensive Security Certification. These features and LifeStatus360's client list
allow
the IPPFA and L&A to feel confident that your data is safe!
Program Advantages
E
1
WIPPFA
PREPARE PROTECT EDUCATE INFORM
POLICE/FIRE RETIREE AND BENEFICIARY
DEATH AUDITING SERVICE
IPPFA is pleased to announce a new program which is designed to assist Article 3/4 police
and fire pension funds to reduce the risk of payment of a pension to a deceased retiree or
survivor. IPPFA is especially pleased to announce that this program is offered to your
pension fund at no cost!
Program Description
For this important effort, IPPFA has partnered with the accounting and pension
administration firm of Lauterbach &Amen, LLP (L&A). A contract for service was entered
into between L&A and a technology company,LifeStatus360. LifeStatus360 is a well-regarded
firm in the area of pensioner locating and death auditing and is used by many large Illinois
pension plans such as IMRF and Chicago Police and Fire.
Subsequent to receiving pension fund approval to participate in this program, L&A will
provide LifeStatus360 with a secure file of information on pensioners for any participating
pension fund. LifeStatus360 then continually runs that file through public death records and
published obituaries, seeking to identify Illinois police and fire pension payees who have been
reported as deceased. When a record of a possible death is found,LifeStatus360 notifies L&A
of the reported or suspected death. L&A will then take the necessary steps to make the
pension fund aware of this notice so that any necessary action can be taken.
LifeStatus360's systems are highly secured and have extensive systems in place to protect the
information of its clients. Additionally,Lifestatus360 is on the US Department of Commerce
NTIS DMF list as certified to receive limited access to the Death Master File and also
maintains the AldusIT Comprehensive Security Certification. These features and
LifeStatus360's client list allow the IPPFA and L&A to feel confident that your data is safe!
1
668 N.RIVER ROAD • NAPERVILLE,ILLINOIS 60563
Lauterbach & Amen, LLP
PHONE 630.393.1482 - FAX 630.393.2516
,;7RTIPIFp PUR1.1C KCi OLJNTANTS v.vrw.Lauternachaneen.e0ri
DEATH AUDIT SERVICE AUTHORIZATION
Pension Fund Name:
Lauterbach&Amen,LLP("L&A")is pleased to announce our new complimentary service which is designed to help
prevent the payment of benefits to a deceased member. Through a partnership with IPPFA, L&A has engaged the
technology company LifeStatus360 ("LS360") which specializes in analyzing participant databases against deaths
reported to various government bodies and regular obituary announcements. LS360 will provide daily death
notifications to L&A which will enable a timely termination of benefits in the event that the Fund was not already made
aware of the death. L&A and the IPPFA are confident in the safety of your data within LS360's system as it maintains
the highest level of certifications for database security,in addition to its Class A rated security building.
In order to administer this service:
• L&A will upload the Pension Fund's beneficiary information using LS360's secure web-based SaaS
platform. This data will include names, birth dates, social security numbers and any other information
requested by LS360 for the singular purpose of utilizing their Death Audit Services.
o For the pension funds for whom L&A does not maintain pensioner records,this information will need
to be provided to L&A by the Pension Board (for example, if L&A does not file the IDOI Annual
Statement or provide Benefit Services or provide Actuarial Services).
o All data submitted to L&A,including regular updates,must be in Excel format.
o All external data provided to L&A will be deleted immediately upon completion of the upload of the
information to LS360.
• If L&A is notified of the death of one of your pensioners, L&A will communicate this information to the
designated Pension Fund representative as soon as possible.
• This service will be in effect until the Board of Trustees provides L&A written direction to terminate the
inclusion of the Pension Fund's records in the Death Audit Services,or until L&A terminates its engagement
with LS360.
The Board of Trustees would like to participate in this complimentary service.
The Board of Trustees does not wish to use this complimentary service. (Please provide a Board
member's initials as a reference of who provided this response.)
By signing below,the Board of Trustees understands how L&A will use its information and agrees to the services
as described above.L&A requires three(3)signatures in order to initiate services.
Trustee Signature: Title: Date:
I
Trustee Signature: Title: Date:
Trustee Signature: Title: Date:
*** Designated Pension Fund representative authorized to communicate with L&A regarding this service***
Name: Title: Email:
The following Pensioners will receive an increase in their monthly pension payment in January, 2019:
1/1/18 1/1/19
monthly monthly monthly New Annual
pension increase pension Pension
Thomas Beyer 7,352.64 220.58 7,573.22 90,878.64
William Brogan 8,078.67 242.36 8,321.03 99,852.36
George Erkenswick 5,151.00 154.53 5,305.53 63,666.36
Jeffery Foerster 7,275.07 218.25 7,493.32 89,919.84
Ramon Gregorio 3,995.63 74.92 4,070.55 48,846.60
Todd Intravartolo 5,197.71 155.93 5,353.64 64,243.68
Thomas Jenkins 7,320.78 219.62 7,540.40 90,484.80
Patrick Joyce 8,197.63 245.93 8,443.56 101,322.72
Doyle Kearns 5,030.25 116.08 5,146.33 61,755.96
Daniel Kinnerk 6,141.19 184.24 6,325.43 75,905.16
Patricia Laycock 3,640.89 75.33 3,716.22 44,594.64
Kathleen Leonard 4240.15 127.20 4,367.35 52,408.20
Richard Meier 4:585.97 137.58 4,723.55 56,682.60
Anthony Militano 4,057.04 121.71 4,178.75 50,145.00
James Molnar 4,933.95 148.02 5,081.97 60,983.64
Edward O'Donnell 4,015.85 120.48 4,136.33 49,635.96
Michael Oliver 4,038.26 77.16 4,115.42 49,385.04
Thomas O'Meara 8,636.95 259.11 8,896.06 106,752.72
Roger Pechous 8,009.69 240.29 8,249.98 98,999.76
Gary Wigman 8,199.47 245.98 8,445.45 101,345.40
Roland Wood 5,788.40 173.65 5,962.05 71,544.60
those highlighted in green do not receive the
3% increase per year-disability pensions
The following Pensioners will receive an increase in their monthly pension payment in March, 2019:
1/1/18 3/1/19
monthly monthly monthly New Annual
pension increase pension Pension
Daniel Kreassig 5,557.11 430.68 5,987.79 70,992.12
The following Pensioners will receive an increase in their monthly pension payment in April,2019:
1/1/18 4/1/19
monthly monthly monthly New Annual
pension increase pension Pension
David Porter 3,758.27 544.95 4,303.22 50,003.79
Debra Meadows
From: Jeffery S. Foerster
Sent: Wednesday, November 28, 2018 2:34 PM
To: Debra Meadows
Subject: FW: McHenry Police Pension Meeting Follow-up
Attachments: Retiree Death Monitoring Service.pdf, Master- LifeStatus360 Service.pdf
Debbie,
Pls include this under new business for our January Pension Meeting.
Thanks in advance,
McHenry City Police Department
Jeffery S. Foerster
rr Specialist 333 S. Crew Street
A&Herxv,,Affh ors 60050
Phone: (815)3635014
Fax:(815)363-2149
email:jfoerster$bcLmchenryil.us
From:Jessica A Fain<jfain@lauterbachamen.com>
Sent:Tuesday,October 23, 2018 3:14 AM
To:Jeffery S. Foerster<JFoerster@ci.mchenry.il.us>
Cc: Robert Rietz<rrietz@lauterbachamen.com>
Subject: McHenry Police Pension Meeting Follow-up
Good morning Jeff,
I apologize for missing your call yesterday! I was out of the office,so I did come in early today to make sure your
concerns were addressed.
Part of the services you were needing are something we as your actuaries can provide and part are something a benefit
specialist would need to provide.We do have a Benefits Department within our firm, so I did reach out to the Director,
Allison Barrett,to address your questions.
#1—Officer Foley
• This request is a non-actuarial request and would be handled by the Benefits Department at a cost of$350.
• The only additional data needed to complete this calculation would be direction from the Board on if you want
to assess interest. It is up to the Board's discretion (A) if you want to charge interest and (B)the rate you want to
charge.
o Sometimes your Board's rules and regulations document will provide details on the Board's stance
regarding charging interest. If your rules and regulations do not provide details on this, perhaps your
Board attorney can help provide some more guidance on how to handle this(limitations,what other
Boards typically do,etc.)to help you make the decision.
1
#2—Future Portability Calculations
• Portability cases can involves up to three steps and calculations.
o Two of them are non-actuarial and would be handled by the Benefits Department at a cost of
$300/person:
■ #1—If the member took a refund from the prior fund, the refund must be paid back with
interest.
■ #2—Once the prior fund has been made whole,there is a calculation of how much will be
transferred from the prior fund to the current fund.This calculation is based upon member
contributions, interest,and a fund match.
o One of them is actuarial and is something we can provide:
■ #3—Determine the actuarial impact of the additional service on the fund.
• We had discussed how we might provide a break in fees to acknowledge that we were unable to attend the
most recent meeting in person. I discussed with our department director,Todd,and we will provide the
actuarial piece of the calculation for free.
#3—Benefits Department Calculations
• If you feel that you would be interested in seeing an annual quote to provide Benefit Services for the fund,
please let me know! I would be more than happy to direct you to Allison to discuss this service. Depending on
your fund's need and how many portability calculations you are anticipating,there could be much more cost
savings to a set annual fee versus a per member basis.
#4—Retiree Monitoring Service
• As promised, I have attached the flyer detailing the service that was discussed at IPPFA.
• If you would like to sign up for this free service, I've also attached the agreement form.
I am out of the office at client meetings for most of today, but please feel free to reach out via e-mail if there's any
additional help I can provide!
Best,
Jessica A Fain
LAUTERBACH&AMEN, LLP
Certified Public Accountants
668 N. River Road
Naperville,Illinois 60563
Phone: 630.393.1483 x251
Fax: 630.393.2516
www.lauterbachamen.com
20 YEA RS
t
2
By connecting to a technology-based death monitoring service,police and fire pension funds can
receive almost immediate information when a death is reported. This permits a quick termination
or suspension of the monthly benefit. There is very little effort needed on the part of the pension
fund; once a record is in the file at LifeStatus360 it is continually included in all death
searches.
I Please note that this program does not necessarily replace other efforts utilized by the pension
fund to ensure payments are made to only living pensioners nor does it replace the ongoing
vigilance that is always necessary for Trustees to properly execute their fiduciary duties.
Accessing the Program
Lauterbach&Amen clients should contact their account representative about this service and place
this issue on their next meeting agenda. IPPFA member funds who are not L&A clients can
participate by providing pensioner data to L&A for inclusion in the file that is uploaded to
LifeStatus360. This may involve transmittal to L&A of the pension funds' annual filing with the
Illinois Department of Insurance
Interested IPPFA member funds may contact:
Steve Earnhardt,Principal
LAUTERBACH&AMEN,LLP
Certified Public Accountants 668 N.River Road Naperville,Illinois 60563
Phone: 630.393.1483 1 Fax: 630.393.2516
SEamhardt@lauterbachamen.com
I
IPPFA,November,2018
IPPFA 1 2587 Millennium Drive, Unit C, Elgin, IL 60124
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