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HomeMy WebLinkAboutMinutes - 10/13/2020 - Police Pension Board M V Police Pension Board of Trustees MC Regular Meeting Minutes October 13, 2020 Call to Order The regular meeting of the City of McHenry Police Pension Board of Trustees was called to order at 2:30 p.m. at the McHenry City Council Chambers and as an online Zoom meeting due to the COVID-19 pandemic. Roll call: Members present: President Jeffery Foerster, Cheryl Kranz, Marc Fisher, Sergeant Nick Clesen. Members absent: Ann Buss. Others present: Monte Johnson, Carolyn Lynch, Gary Karshna, James Schmidt, James Ritchie. Public Input: No members of the public were present to offer comments. Approve the July 21, 2020, meeting minutes. A motion was made by Cheryl Kranz and seconded by Mark Fisher to approve the July 21, 2020, meeting minutes as presented. Roll Call Vote: 4-ayes, 0-nays, 0-abstained. Motion carried. Semi-annual review of the Police Pension Board Fund Investment Policy There were questions or suggestions for changes to the policy. Presentation of Actuarial Valuation Report and recommendation to forward Police Pension Fund Tax Levy Request to McHenry City Council James Ritchie of Lauterbach &Amen was present to give a presentation on the yearly actuarial reporting. Mr. Ritchie explained the current year contribution recommendation, which was $2,576,006. This shows a current year funded percentage of 53.08%. He also explained the expected benefit payments, risk management, changes in contributions, demographic changes, assumption changes, plan changes, and the change in the market value of assets. A motion was made by Sergeant Clesen and seconded by Officer Fisher to accept the Actuarial Funding Report as of May 1, 2020. Roll Call Vote: 4- ayes, 0-nays, 0-abstained. Motion carried. A motion was made by Officer Fisher and seconded by Cheryl Kranz to forward the Pension Fund Tax Levy request of$2,576,006 to the McHenry City Council. Roll Call Vote:4-ayes, 0-nays, 0-abstained. Motion carried. Capital Gains, Inc. Fixed Assets Report Investment Manager Gary Karshna explained that we still have low yields as rates are kept down. Despite hits to the restaurants, airlines, and travel industries,the stock market is still doing well.There is a lot of money out there ready to invest, and people are saving more than ever.The 5 month rate of return sits at 1.54%,with a 5% rate of return over the last 12 months. LPL Financial Equities Report Investment Advisor James Schmidt reported a year to date yield of 8.85%, but the focus should be on the money coming in from the pension bonds. He reviewed the asset allocation report, where 24%of the investment sits in the AMCAP fund,which is up 14%. He also explained that he would like to invest a larger percentage of money in the MFS Growth Fund. Through September,that fund is up 22%. He reviewed his handout showing a proposed investment strategy where he would use a dollar cost average over six months. When the pension bond money comes in, he would immediately invest$5 million into LPL.The extra cash would be given to Mr. Karshna to roll off a little at a time, and transfer money back to invest at the intervals shown on the handout. The one change he might suggest is if there is a large correction in the market, such as 10%, he would recommend investing the whole amount all at one time. The investment strategy was discussed amongst Mr. Schmidt, Mr. Karshna, and all of the trustees. Treasurer Lynch explained that the bonds should sell in the next couple of weeks with a closing date of December 1. The timing of when we receive the cash will be critical to the investment strategy, especially with the Presidential election approaching. Approve the investment of funds from the Taxable General Obligation Bonds,Series 2020B Because of the uncertainty of the election, and what the market will look like when the money comes in from the bonds, Sergeant Clesen suggested to wait and hold a special meeting to approve the investments. Everybody will have a better idea of what the market will look like and we will be able to make a more informed decision if we make the decision right before the money arrives. It was agreed up on that a special meeting will be held on November 30th to approve the investments. That date could change if the closing date of the bonds changes. Approval of the 2021 Police Pension Board Schedule President Foerster suggested moving the July 131h date to July 6th.The dates for 2021 will be January 12, April 13,July 6, and October 12.A motion was made by Officer Fisher and seconded by Sergeant Clesen to approve the amended 2021 Police Pension Board Schedule. Roll Call Vote: 4-ayes, 0-nays, 0- abstained. Motion carried. Approve portability of time for Joseph Lazicki A motion was made by Officer Fisher and seconded by Sergeant Clesen to approve the portability request for Joseph Lazicki.The total amount transferred is $234,629.26. Roll Call Vote:4-ayes, 0-nays, 0- abstained. Motion carried. Approve portability of time for Sue Ellis A motion was made by Cheryl Kranz and seconded by Officer Fisher to approve the portability request of Sue Ellis as presented. Her new start date is May 20, 2002, with an amount of$435,024.58. Roll Call Vote:4-ayes, 0-nays, 0-abstained. Motion carried. Approve the investment of funds in the amount of$435,024.58 from the Susan Ellis portability A motion was made by Cheryl Kranz and seconded by Officer Fisher to allocate the investments based on the 65-35% rule, and to invest the 65%of equity into the MSF fund allocation as presented by James Schmidt. Roll Call Vote:4-ayes, 0-nays, 0-abstained. Motion carried. Payment of Bills A motion as made by Officer Fisher and seconded ty Cheryl Kranz to approve the payment of bills as submitted. Roll Call Vote: 4-ayes, 0-nays,0-abstained. Motion carried. Motion to Adjourn A motion was made by Sergeant Clesen and seconded by Cheryl Kranz to adjourn the meeting at 3:42 p.m. Roll Call Vote:4-ayes, 0-nays, 0-abstained. Motion carried.