MINUTES OF THE REGULAR MEETING OF THE CHARTER TOWNSHIP OF
SHELBY FIRE & POLICE PENSION AND RETIREMENT BOARD HELD ON MONDAY,
JANUARY 20, 2014 AT FIRE STATION #1, 6345 23 MILE ROAD, SHELBY
TOWNSHIP, MICHIGAN.
The meeting was called to order at 5:04 p.m. by Secretary Mark Semaan.
Members Present:
Michael Flynn, Jerry Moffitt, Mark Semaan
Members Absent:
David Diegel, Matt Stachowicz
Also Present:
Lewis Thumm, Pension Board Attorney
Mike Holycross, Graystone Consulting
Thomas Wilhelm, McMorgan Infrastructure Fund
John McCoy, President, Firefighters Local 1338
Terry Elsey, Shelby Township Fire Department
APPROVAL OF MINUTES
MOTION by Moffitt, supported by Flynn, to approve the minutes of the regular meeting
of the Charter Township of Shelby Fire & Police Pension and Retirement Board held on
Monday, December 16, 2013, as presented, and waive the reading.
Motion carried.
PRESENTATIONS
Tom Wilhelm, McMorgan Infrastructure Fund, was in attendance. He began his
presentation by providing background regarding his company and advised the members
that the program being presented is designed to generate cash in pensions with a
yearly return and not seven years down the road.
Mr. Wilhelm pointed out that pension liabilities continue to stretch out into infinity.
Investments that bounce up and down with the market are not a great match for that
Fire & Police Pension & Retirement Board
January 20, 2014
type of liability.
Investments that are not built around delivering cash are also not a
great match for long-term pension liabilities.
Mr. Wilhelm explained pertinent sections of his submittal together with graphs
comparing performance from 2008 through 2012 which supported his reasons why he
feels this plan would be suitable for investment of our pension funds.
They are able to offer this program at 100 basis points with 1% charged only on
invested capital.
Everything gets invested into assets that throw off cash when you
need it. It is not something where they will invest in funds where we will hope to get
money back three, four or five years later.
Mr. Wilhelm explained the strategies used, the type of assets that they invest in and
their investment objectives.
Questions of the Pension Board members were addressed by both Mr. Wilhelm and Mr.
Holycross.
Mr. Holycross recommended investing up to 5% of the Pension Board assets in this
fund.
Mr. Semaan clarified that the most we can invest would be between $3 million
and $3.5 million.
A decision will be made at the next Pension meeting when we have a full Board in
attendance.
Authorization would have to be made by March 31 to finalize the
paperwork.
Graystone Consulting – Review – Asset Allocation Distribution 12-31-2013
Mr. Holycross reviewed the Asset Allocation Distribution as of 12/31/2013.
The portfolio reflects a market value of $68.4 million at the end of the year. They are
still going through communication with Merrill Lynch to get as much of the Pension
Board’s performance data as possible so they don’t have to use 1/1/2014 as the
inception date.
Mr. Flynn advised that he received an e-mail from Financial Management indicating that
there are many accounts that have balances reflected on the transferred accounts. Mr.
Semaan indicated that everything has been transferred to Comerica.
Mr. Holycross
explained there may be settlement fees that have been rebated, dividends that were
paid, etc.
It may take 6 months for all of the transactions to be completed.
Graystone will make sure that these accounts have a zero balance and nothing is left
behind.
As soon as Graystone gets all of the performance data from Merrill Lynch,
they will begin building a performance report for the Pension Board.
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Fire & Police Pension & Retirement Board
January 20, 2014
OLD BUSINESS
Review of Policies and Procedures with Pension Board Attorney and Investment
Consultant
Mr. Thumm provided a list of guidelines of the topics that will be discussed this evening
citing different Acts that support the information presented.
Mr. Thumm reviewed the documents presented to the Board in detail, which included
Policy Resolution, Exhibit A to Policy Resolution, Itemized Budget for Projected 2014
Expenditures of the Retirement System, Service Provider Fee Policy, Policy and Budget
for Retirement Board Members Annual Education, Training and Travel, and Records
Keeping Policy. Input was provided by the Pension Board members. It was agreed
that these documents would be placed on the February agenda to be adopted by a full
board.
NEW BUSINESS
Mr. Flynn informed the Pension Board of a request from HR with regard to actuarial
calculations.
During the negotiation process, both the union and Township Board
require these calculations.
Mrs. Suida is asking for a Resolution from the Pension
Board saying it is okay to provide this information upon request.
MOTION by Flynn, supported by Moffitt, to authorize calculations for the actuarial
evaluations outlined in an e-mail sent to Michael Flynn on Tuesday, January 14, 2014
(copy attached) and any future requests for supplemental actuarial evaluations provided
that they are paid for by the requesting party, e.g. the Township or the Union. A copy
of the actuarial study should be sent to the Pension Board as well.
Motion carried.
Discussion – Proposed 2014 Pension Board Budget
This item will be discussed at the February Pension Board Meeting.
Mr. John McCoy, President of Firefighters Local 1338, and Mr. Terry Elsey, Firefighter,
had questions regarding pensions that come up in negotiations, and they were present
tonight to receive input from the Pension Board. The questions concerned deferred
compensation and deferred benefits.
Mr. Thumm provided his opinion to
representatives from the Fire Department which was followed by discussion among the
Pension Board members, Mr. McCoy and Mr. Elsey. Mr. McCoy’s concern was why
have communities who operated under the DB plan, switched to the DC plan, and then
changed back to the DB plan.
He questioned if it was for financial reasons.
Communities such as Wayne County, Washtenaw County and the City of Utica were
part of this switch. Since they worked under both plans, why would they go back to the
original plan? There has to be a good reason.
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Fire & Police Pension & Retirement Board
January 20, 2014
APPROVAL OF BILL
$3,460.00
-
Gabriel, Roeder, Smith & Company
Quarterly Fee – 10-1-2013-12-31-2013
Actuarial Services
MOTION by Moffitt, supported by Flynn, to pay the bill.
Motion carried.
It was decided that the next Pension Board meeting will be held on Monday, February
24, 2014.
MOTION by Flynn, supported by Moffitt, to adjourn.
Motion carried.
The meeting adjourned at 6:25 p.m.
___________________________________
Mark C. Semaan, Secretary
ds
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