12-14-2015CITY OF EDGEWATER
FIREFIGHTERS' PENSION BOARD
QUARTERLY MEETING MINUTES
City Hall Council Chambers
Monday December 14, 2015, at 5:OOPM
TRUSTEES PRESENT: Dominick Fede
Justin Nickels
Scott Hopkins
Gary Butt
TRUSTEES ABSENT: None
OTHERS PRESENT: Ferrell Jenne, Foster & Foster
Ken Harrison, Sugarman & Susskind
John Thinnes, The Bogdahn Group
Mark Rhein, Salem Trust
Brian Bizzell, Salem Trust
Mindy Johnson, Salem Trust
David Kelly, Bowen Hanes
Call to Order Dominick Fede called the meeting to order at 5:OOPM.
2. Roll Call As reflected above.
Public Comments None.
4. Approval of Minutes
The minutes from the September 14 2015 quarterly meeting were approved upon motion
by Justin Nickels and second by Scott Hopkins motion carried 4-0.
5. New Business
a. Actual plan expenses as of September 30, 2015.
i. Ferrell Jenne briefly reviewed Senate Bill 172 and commented that the
September 30, 2015 actual expenses will need to be sent to the City for
informational purposes and made available to members.
The board voted to approve the actual plan expenses as of September 30, 2015 as
presented upon motion by Scott Hopkins and second by Justin Nickels, motion carried 4-
0.
b. FPPTA 2016 membership.
i. Ferrell Jenne informed the board of the fees. $600 for annual board
membership, and $450 per trustee for each school or conference.
The board voted to renew the FPPTA 2016 board membership upon motion by Justin
Nickels and second by Gary Butt motion carried 4-0.
6. Old Business
a. Update on IRS determination letter.
i. Ken Harrison stated the IRS determination letter had been filed and they
have not received any correspondence from the IRS to date.
b. Discussion of financial option for purchase of prior fire service/military time.
i. Dominick Fede stated he sent out an email to the membership regarding
financial options to buyback prior service. Ken Harrison stated members
could finance the purchase up until they retire. Ken stated the actuary
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would need to comment on the impact to the plan if financing were
stretched out.
ii. Ken Harrison recommended against allowing members to stop making
payments if they got too expensive and therefore only purchasing a
fractional amount of time.
iii. Dominick Fede stated if a member were making payments and decided
to retire early, they would have to pay the balance in full before they
began collecting benefits.
iv. Ken Harrison stated he would draft up language which would allow for
the purchase of prior service up to 5 years, with interest equal to the
expected rate of return, to be paid off before termination/retirement.
v. Ken reiterated his concerns and commented the decision should be
deferred to the actuary so an impact on the plan could be determined
before any definitive provisions were put in place.
7. Reports
a. Salem Trust, Mark Rhein, Brian Bizzell, Mindy Johnson, Custodian.
L Mark Rhein briefly reviewed the conversion process their firm went
through and stated they had received an unmodified audit opinion on the
SSAE 16 report which is the highest opinion given.
ii. Mark Rhein discussed GlobeTax and explained the process to reclaim
taxes which had been improperly assessed on investments done in
foreign countries. Mark Rhein stated the plan would not be charged
reclamation fees since it was one of the first plans to enroll. Mark stated
all paperwork would be submitted in December 2016 to get the plan
enrolled.
iii. Mark Rhein introduced Mindy Johnson and briefly reviewed her work
experience. Mark asked the board's permission to change the
relationship manager from Brian Bizzell to Mindy Johnson.
The board agreed by consensus to change the Salem Trust relationship manager.
Bowen, Hanes & Company, David Kelly, Investment Manager.
i. Quarterly report as of September 30, 2015, and update as of December
10, 2015.
1. David Kelly discussed the factors that effected the plan during the
third quarter as well as stock performance.
2. Market value of the fund at the end of the quarter was $9,697,867,
and by December 10, 2015 it was to $10,290,646.
3. Fiscal year to date, the total portfolio earnings were -4.6% (time -
weighted return).
4. David Kelly reviewed trailing returns for 1 year, 3 year, and 5 year
time periods, stating he beat 92%of the peer group at the 1 year
mark, 91 % at the 3 year mark, and 94% at the 5 year mark.
5. David Kelly reviewed a plan survey from his firm as of June 30,
2015, showing return information for various plans and investment
managers.
6. David Kelly stated that he was neutral and would do whatever the
board wanted, but felt like has a strong history of producing good
returns.
7. Justin Nickels commented that he appreciated the information and
that the conversations from the last meeting were for educational
purposes.
8. Scott Hopkins asked David Kelly if he could attend every quarterly
meeting. David stated that would not be a problem.
9. The board had no further questions.
c. The Bogdahn Group, John Thinnes, Investment Consultant.
i. Quarterly report as of September 30, 2015.
1. John Thinnes presented a handout showing how the plan was
performing relative to its peers.
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2. John Thinnes presented trailing returns and briefly compared the
three Edgewater pension plans' associated returns. John stated the
general and police plans had multi -manager approaches.
3. John Thinnes commented the board needed to understand they
were invested differently and there was more risk in the portfolio
since they were heavily invested in equities.
4. John Thinnes recommended making no changes and asked the
board if they had any questions on the investment plan. The board
had no questions.
5. John Thinnes gave a review of the market environment during the
quarter.
6. Market value of the fund as of June 30, 2015 was $10,629,651, and
by September 30, 2015 was $9,754,374.
7. Net earnings for the quarter were -9.96%, underperforming the
policy benchmark of -4.31% by -5.65%. Fiscal year-to-date net
earnings were -5.02%, underperforming the benchmark of -0.16%
by -4.86%. Since inception (12/1/01) net earnings were 4.47%,
underperforming the benchmark of 6.00% by -1.53%.
8. John Thinnes reviewed the compliance checklist stating the
September 30, 2015, quarterly returns from Bowen Hanes effected
the checklist, especially in total fund compliance. John stated he
believed the board would be totally compliant by the end of the
fourth quarter.
Sugarman & Susskind, Ken Harrison, Attorney.
i. Legislative update.
1. Ken Harrison commented the State session would be early,
happening in January 2016 instead of in the spring.
2. Ken stated all pre -filed bills were for FRS and nothing for Local Law
plans.
8. Consent Agenda
The board voted to approve the consent agenda items as presented upon motion by Scott
Hopkins and second by Justin Nickels motion carried 4-0.
Staff Reports Discussion and Action
a. New plan administration phone line.
i. Ferrell Jenne informed the board a dedicated TPA phone line had been
established.
b. Payment of invoices in-between meetings.
i. Ferrell Jenne asked the board to consider allowing her to pay contractual
vendor invoices in-between quarterly meetings so they don't fall past
due. Ken Harrison commented that this was common practice and
everything would be ratified at the subsequent quarterly board meeting.
The board voted to allow the payment of contractual vendor invoices in between meetings
upon motion by Justin Nickels and second by Scott Hopkins motion carried 4-0.
c. Number of benefit calculations the plan will pay for.
i. Ferrell Jenne asked how many benefit calculations the board will cover
for members. Three calculations will be covered by the plan.
10. Adjournment The meeting adjourned at 6:30PM.
11. Next Meetinq Monday, March 14, 2016, at 5:00PM.
Respectful) su fitted by: Approved by:
er II Jenne, l
Administrator ominick Fede, Chairman
Date Approved By the Pension Board: I I I Cyr, c I � , D 1 L-