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HomeMy WebLinkAbout10/25/2011 FPFB MinutesMinutes of the Regular Meeting of the Mount Prospect Firefighters Pension Fund Meeting October 25, 2011 I. CALL TO ORDER — ROLL CALL President John Malcolm called the meeting to order at 8:36 a.m. Present upon roll call: John Malcolm — President David Erb — Treasurer Sam Baas — Retired Firefighter Joe Knoll — Secretary/Firefighter Jeff Ricker — FOIA/OMA Officer /Firefighter Also present was Rick Potter & Jeremy Seeman of Becker, Burke Associates & Carry Collins the Pension Fund Attorney. II. APPROVE AGENDA Motion by Joe Knoll, seconded by Jeff Ricker to approve the Agenda as submitted. Motion was approved. III. CITIZENS TO BE HEARD None. IV. APPROVE MINUTES Regular Meeting, July 26, 2011 Motion by Sam Baas, seconded by Jeff Ricker to approve the Minutes as submitted. Motion was approved. V. TREASURER'S REPORT A. Approve Treasure's Report David Erb handed out a copy of the Mount Prospect Firefighters Pension Fund Financial report for the period July 1, 2011 and ending September 30, 2011. Mr. Erb outlined the information in the report. Statement of Assets As of September 30, 2011 the Fund had net assets with a market value totaling $41.4 million. Of this amount, $9.4 million was under management by Galliard and $13.2 million was under management by Segall Bryant. As of September 30, 2011 there was an unrealized gain in the Fund's portfolio totaling $297,268. This is down from the $628,660 in unrealized gains reported last quarter. Income Statement The Fund's net assets decreased $3,538,127 for the third quarter. Total revenues for this quarter were a negative $2,627,508 caused by an unrealized loss in equities of $3,571,725. Contributions of $174,794 were made up of property and replacement taxes totaling $41,939 and pension contributions of $132,855. Gains from the fixed income portion of the portfolio totaled $768,932 while the value of equities fell $3,571,725. Expenditures for pension benefits accounted for $886,993 of the total during the third quarter. Other operating expenses including investment advisors fees, legal bank charges, insurance and other expenses totaled $23,626. Motion by Sam Baas, seconded by Joe Knoll to accept the Treasure's Report as presented. Motion was approved. B. Approve Disbursements Motion by Jeff Ricker, seconded by Sam Baas to accept the list as presented. Motion was approved. C. Quarterly Financial Report Mr. Erb asked Rick Potter from Becker, Burke Associates to provide the Quarterly Financial Report. Mr. Potter went through the entire document highlighting pertinent facts, charts and graphs .Motion by Dave Erb, seconded by John Malcolm to transfer $450.000 out of Segal Bryant & Hamill and invest $225,000 to T. Rowe Price and $225.000 to American Funds .Growth. Motion was approved. Motion by Dave Erb, seconded by Sam Baas to accept the Quarterly Financial Report as presented. Motion was approved. VI. COMMITTEE REPORTS A. Medical Committee Nothing to report. B. Legal Committee Attorney Collins advised the Board that as of January 1, 2012 all trustees will have to take the Open Meetings Act and Freedom Of Information Act test on the Internet for 3 hours of training credit. VII. OLD BUSINESS A. Rules & Regulations updates will be discussed at the next meeting. VIII. NEW BUSINESS A. Request for Benefits /Refunds. Nothing to report B. Trustee Training Requirements 5/1/11 — 4/30/12 Dave Erb — 0 hours Jeff Ricker — 3 hours Joe Knoll — 0 hours Sam Baas — 0 hours John Malcolm — 16 hours C. Actuarial Report — Dave Erb presented the Actuarial Study Report, completed by Timothy W. Sharpe. The report is for calendar year 2011 and is based upon data as of January 1, 2011. The valuation includes two calculations using provisions pre- and post -PA 096 -1495, the public act that modified the pension status for downstate police and fire pension plans Results of the valuation using pre -PA 096 -1495 provisions returned an accrued pension liability of $75,131,534. As of that same date the Fund had assets totaling $44,540,310, resulting in a funding level of 59.3 %, a decrease of 130 basis points from the prior year. The decrease in funding level was due to changes in the assumed rates for interest earnings. The assumption for investment returns used to determine the ARC was decreased from 8.0% TO 7.5 %. Absent this change the funding level would have seen an increase. The tax levy requirement using this method is $2,484,859. Following the provisions of PA 096 -1495, the valuation returned an accrued pension liability of $73,951,660. Fund assets total $44,540,310, resulting in a fund level of 60.2 %. The tax levy requirement using this method is $1,998,285. The different results between the two valuations are due to different actuarial cost methods (projected unit credit vs. entry age normal), extended amortization period (30 vs. 23 years) and target amortization level (90% vs. 100 %). Mr. Sharpe recommends using pre- 096 -1495 provisions (except for amortization period) to calculate the ARC amount. The more conservative approach under this scenario provides for a larger annual required contribution while complying with GASB reporting requirements. It is also anticipated that certain provisions in PA 096- 1495 will be returned to where they were before changes to state statutes took effect. This approach will also prevent the spiking that will occur if the statute is amended. Motion by John Malcolm, seconded by Sam Baas to accept the Actuarial Study as presented. Motion was approved. D. Next Pension Board Meeting January 24, 2012 IX. OTHER NEW BUSINESS None X. ADJOURNMENT Jeff Ricker, seconded by Sam Baas moved to adjourn the meeting at 10:08 a.m. Motion was approved. Respectfully Submitted Joe Knoll Secretary Minutes approved at the January 24, 2012 meeting.