How To Vote On A Pension Fund

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1 RECORD OF PROCEEDINGS of the RETIREMENT BOARD (the BOARD ) of the PARK EMPLOYEES ANNUITY and BENEFIT FUND (the FUND ) SCHEDULED REGULAR BOARD MEETING THURSDAY, APRIL 17, 2014 The 55 East Monroe Building 55 East Monroe Street, Suite 2720 Chicago, Illinois President MUNIZZI called the meeting to order at 9:30 A.M. ROLL CALL Trustees present: PAMELA A. MUNIZZI, President ROBERT GERAHTY, Vice President EDWARD L. AFFOLTER, Secretary MARIO GIANFORTUNE, Trustee FRANK C. HODOROWICZ, Trustee STEVEN J. LUX, Trustee JOSEPH M. FRATTO, Trustee Also Present: DEAN J. NIEDOSPIAL, Executive Director MICHAEL SPYCHALSKI & BRETT CHRISTENSON, Marquette Associates, Inc. (attended from the Report of the Executive Director to the end of the meeting) ANDRIY LEKHNYAK, Bansley & Kiener, L.L.P. (attended for the Benefit System Update, during the Report of the Executive Director, only) SANDOR GOLDSTEIN, Goldstein & Associates (attended from the beginning of the meeting through the Report of the Executive Director) MINUTES OF THE LAST MEETING A motion was made by Trustee HODOROWICZ to approve the minutes of the regular Board meeting held on Thursday, March 20, Trustee FRATTO seconded the motion. 1

2 READING OF COMMUNICATIONS The Executive Director commented on the following FOIA requests: On March 18, 2014, the Board received a FOIA request from the Better Government Association requesting the salaries of all PEABF staff as well as all statements and receipts concerning the Fund s American Express card. On March 6, 2014, the Board received a FOIA request from the Better Government Association requesting the names, years of service and total contributions paid for all those vested in the Fund. A motion was made by Trustee GIANFORTUNE to accept the Reading of Communications. Trustee HODOROWICZ seconded the motion. REPORT OF THE COMMITTEES NONE REPORT OF THE EXECUTIVE DIRECTOR Regular Interest Credited to Employees Accounts/Interest Rate Charged for Repayment of Service Mr. Sandor Goldstein of Goldstein & Associates distributed a letter regarding the Interest Rate Prescribed by the Board for Repayment of Refunds and Pre-Entry Service and for Crediting to Employee Accounts for Money Purchase Annuities, which previously had been ed to the Trustees. A lengthy discussion between Mr. Goldstein and the Trustees about the letter and the Fund s regular interest rate followed. It was noted that the reduction in costs to the Fund from reducing the interest rate credited to employee accounts for the money purchase annuity would more than offset any reduction in revenue to the Fund from reducing the interest rate charged on refund repayments. A motion was made by Trustee HODOROWICZ to change the Fund s regular interest rate to 3%. Trustee GIANFORTUNE seconded the motion. 2

3 2014 Trustee Election YEAS: AFFOLTER, GERAGHTY, GIANFORTUNE ABSTAIN: FRATTO The Executive Director distributed a copy of the approved schedule for the Trustees Annual Election on Friday, June 27, He also distributed a red-lined copy of the Fund s Election Policy which indicated changes recommended by Fund Counsel, the Election Monitor, the Election Coordinator and the Executive Director. The Executive Director and the Trustees discussed the recommended changes. A motion was made by Trustee LUX to adopt the changes to the Fund s Election Policy as recommended by Fund Counsel, the Election Monitor, the Election Coordinator and the Executive Director. Trustee FRATTO seconded the motion. Principal Provisions/94 th Annual Report of the President The Executive Director distributed final copies of the Fund s Principal Provisions and the 94 th Annual Report of the President for the Trustees review, noting that they will be mailed to the members before the next Board meeting. Benefit System Update The Executive Director distributed a Consulting and Development Proposal from Advanced Business Systems Consulting Group, Inc. The proposal was reviewed and discussed with the Trustees noting that this project would provide an assessment of the current benefit system including identifying areas that could be improved and enhanced. It was also noted that the work performed during the project would be necessary to any development effort going forward. Andriy Lekhnyak of Bansley & Kiener, L.L.P. participated in the discussion. A motion was made by Trustee FRATTO to approve the Advanced Business Systems Consulting Group, Inc. Consulting and Development Proposal as presented at a cost not to exceed $4,000. Trustee HODOROWICZ seconded the motion. 3

4 Other Claude Walton Memorial Service The Executive Director reminded the Trustees that there would be a memorial Service for former Trustee and long time Chicago Park District employee Claude Walton on Saturday, April 26 th at 1:00 PM. Chicago Park District Tax Levy - The Executive Director informed the Trustees that the Fund was paid the entire amount of its share of the 2013 tax levy, approximately $10.5 million, on April 7, Statement of Economic Interest The Executive Director reminded the Trustees that their Statements of Economic Interest are due May 1, 2014 and must be filed on-line. Conferences The Executive Director distributed an updated 2014 Conference Schedule to the Trustees and highlighted upcoming local conferences and events. A motion was made by Trustee HODOROWICZ to accept the Report of the Executive Director. Secretary AFFOLTER seconded the motion. REPORT OF THE INVESTMENT CONSULTANT Mr. Brett Christenson and Mr. Michael Spychalski of Marquette Associates, Inc. distributed the Preliminary Monthly Update report as of March 31, 2014, featuring investment performance, market environment analysis, asset allocation and individual investment manager performance. The Trustees reviewed and discussed the report. Mr. Christensen reported that the agreements with IFM and Ullico, the Fund s infrastructure managers, have been finalized and will be executed soon. The Marquette representatives and the Trustees discussed portfolio rebalancing options in anticipation of funding the infrastructure managers, as well as the Fund s risk parity manager. A motion was made by Trustee LUX to withdraw $5.5 million from the UBS Trumbull Property Fund, $5.5 million from the UBS Trumbull Income Fund and $12.5 million from K2 Advisors for funding of the new mandates. Secretary AFFOLTER seconded the motion. 4

5 A motion was made by Trustee GIANFORTUNE to accept the Report of the Investment Consultant. Trustee FRATTO seconded the motion. ADJOURNMENT There being no further business, Trustee HODOROWICZ moved to adjourn the meeting. Vice President GERAGHTY seconded the motion. Motion prevailed unanimously and the meeting was adjourned. The next regular meeting of the Retirement Board will be on May 15, 2014 at 9:30 A.M. in the Judith A. Flaherty Conference Room on the 27 th floor of the 55 East Monroe Street Building, Suite 2720, Chicago, Illinois, Respectfully submitted, EDWARD L. AFFOLTER Secretary 5