CITY OF FRESNO RETIREMENT SYSTEMS REGULAR JOINT MEETING OF THE RETIREMENT BOARDS MINUTES

Transcription

1 CITY OF FRESNO RETIREMENT SYSTEMS REGULAR JOINT MEETING OF THE RETIREMENT BOARDS MINUTES May 24, 2016 The Employees and Fire and Police Retirement Boards met in a joint session in Retirement Office, 2828 Fresno St., 2nd Fl., Board Chamber, Room 202, Fresno, California at the hour of 10:30 AM on the day above written. ROLL CALL AT 10:30 AM Members Present for the EMPLOYEES RETIREMENT BOARD Marvell French, Phillip Hardcastle, TJ Miller, David Cain, Renena Smith (arrived 1:00 pm) Members Absent: Members present for the FIRE AND POLICE RETIREMENT BOARD Oscar Williams, David Newton, Michael Reid, Jonathan Lusk, Ted Semonious Members absent: Also Present: Russ Richeda, Legal Counsel, Robert Theller, Retirement Administrator, Kathleen Riley Brown, Assistant Retirement Administrator, Pattie Laygo, Executive Assistant APPROVE MINUTES Approve minutes of May 11, 2016, Regular Joint Meeting of the Retirement Boards. ON MOTION by Member Cain seconded by Member Miller to approve the minutes of May 11, 2016, Regular Joint Meeting of the Retirement Boards, DULY CARRIED RESOLVED by the following vote: AYES: French, Hardcastle, Miller, Cain NOES: ABSTAIN: ABSENT: Smith ON MOTION by Member Newton seconded by Member Lusk to approve the minutes of May 11, 2016, Regular Joint Meeting of the Retirement Boards, DULY CARRIED RESOLVED by the following vote: AYES: Williams, Newton, Reid, Lusk, Semonious NOES: ABSTAIN: ABSENT: APPROVE AGENDA Approve agenda of May 24, 2016, Regular Joint Meeting of the Retirement Boards. ON MOTION by Member Hardcastle seconded by Member Miller to approve the agenda of May 24, 2016, Regular Joint Meeting of the Retirement Boards, DULY CARRIED RESOLVED by the following vote: AYES: French, Hardcastle, Miller, Cain NOES: 6091

2 ABSTAIN: ABSENT: Smith MINUTES of May 24, 2016 ON MOTION by Member Newton seconded by Member Lusk to approve the agenda of May 24, 2016, Regular Joint Meeting of the Retirement Boards, DULY CARRIED RESOLVED by the following vote: AYES: Williams, Newton, Reid, Lusk, Semonius NOES: ABSTAIN: ABSENT: TIMED SCHEDULED HEARINGS AND MATTERS 1:00 PM Presentation by The Segal Company and acceptance of Actuarial Experience Study and Economic Actuarial Assumptions for both Systems. Paul Angelo and Andy Yeung of The Segal Company introduced and briefly outlined the analysis of the Economic Assumption report and an Experience Study for each System. Discussion follows with clarification by Mr. Angelo and Mr. Yeung of the adjustment to the rate of return. ON MOTION by Member Hardcastle seconded by Member Cain to accept review of the Systems Economic Actuarial Assumptions for the June 30, 2016 Actuarial Valuation and the Actuarial Experience Study and Analysis of Actuarial Experience during the period of July 1, 2012 through June 30, 2015, approving the Actuarial recommendations as presented: 1) Reduction of current inflation assumption from 3.25 to 3.00 for the Employees System; 2) Maintain the current COLA assumption of 3.25% for the Employees System; 3) Reduce the current investment return assumption from 7.50 percent to 7.25 percent per annum; 4) Reduce the current inflationary salary increase assumption from 3.25 percent to 3.00 percent per annum. DULY CARRIED RESOLVED by the following vote: AYES: French, Hardcastle, Miller, Cain, Smith NOES: ABSTAIN: ABSENT: ON MOTION by Member Newton seconded by Member Lusk to accept review of the Systems Economic Actuarial Assumptions for the June 30, 2016 Actuarial Valuation and the Actuarial Experience Study and Analysis of Actuarial Experience during the period of July 1, 2012 through June 30, 2015, approving the Actuarial recommendations as presented: 1) Reduction of current inflation assumption from 3.75% to 3.50% for the Fire and Police Tier 1 and maintain the current 3.00% for the Fire and Police Tier 2; 2) Maintain the current COLA assumption of 3.75% for the Fire and Police Tier1 members and 3.00% COLA assumption for the Fire and Police Tier 2 members; 3) Reduce the current investment return assumption from 7.50 percent to 7.25 percent per annum; 4) Reduce the current inflationary salary increase assumption from 3.25 percent to 3.00 percent per annum. DULY CARRIED RESOLVED by the following vote: AYES: Williams, Newton, Lusk, Semonious 6092

3 NOES: ABSTAIN: ABSENT: Reid MINUTES of May 24, :00 PM Presentation by PIMCO on Income Fund, COF and BRAVO funds A. CONSENT CALENDAR 1. Approve date and time of the next Regular Joint Meeting of the Retirement Boards scheduled at 1:00 pm on Wednesday, June 8, ON MOTION by Member Hardcastle seconded by Member Cain to approve the consent calendar, DULY CARRIED RESOLVED by the following vote: AYES: French, Hardcastle, Miller, Cain, Smith NOES: ABSTAIN: ABSENT: ON MOTION by Member Newton seconded by Member Lusk to approve the consent calendar, DULY CARRIED RESOLVED by the following vote: AYES: Williams, Newton, Reid, Lusk, Semonious NOES: ABSTAIN: ABSENT: B. EMPLOYEE PERSONNEL ISSUES C. STAFF INITIATED ITEMS D. BOARD INITIATED ITEMS 1. Review and accept the Quarterly Investment Performance Analysis Report from NEPC for the period ending March 31, 2016 and Manager Review Watch Status Update. The Boards received summary of Performance Report submitted by Don Stracke, Investment consultant and accepted update as presented. 2. Review, discuss and consider next steps with PIMCO and alternatives to the Absolute Return Strategy. The Boards reviewed and discussed alternatives with Administrator Theller and Don Stracke, 6093

4 MINUTES of May 24, 2016 Investment Consultant and directed staff as a next step to proceed with the due diligence legal review of investment related documents for COF II and BRAVO III funds with Legal Counsel Thomas Hickey of Foley & Lardner following receipt of a NTE quote for the legal review. 3. Review, discuss and consider the Liquidity Study provided by Don Stracke of NEPC. ACTION: Accepted The Boards received liquidity review by Investment Consultant and accepted conclusion as presented. 4. Status update on the Due Diligence On-Site Visitation Sub-Committee s evaluation of finalists in the Value Add Opportunistic Real Estate manager(s) search and consider next steps for legal review of investment related agreements and other legal documents by Mr. Thomas Hickey of Foley & Lardner. The Boards received a verbal status update from members of the due diligence on-site visitation Committee pending formal review at the next meeting, the Boards directed staff to commence with the legal review of investment related documents for PCCP and Oaktree based on the NTE quote received from Mr. Thomas Hickey of Foley & Lardner. 5. Review, discuss and consider fee proposal amendment from BlackRock. The Boards received overview by staff, accepted report as presented and approved amendment to the Investment Management Agreement between the Boards and Blackrock changing the fee schedule as outlined. ON MOTION by Member Hardcastle seconded by Member Miller to approve the amendment to Addendum A of the Investment Management Agreement between the Retirement Boards and Blackrock to change the fee schedule, DULY CARRIED RESOLVED by the following vote: AYES: French, Hardcastle, Miller, Cain NOES: ABSTAIN: ABSENT: Smith ON MOTION by Member Newton seconded by Member Lusk to approve the amendment to Addendum A of the Investment Management Agreement between the Retirement Boards and Blackrock to change the fee schedule, DULY CARRIED RESOLVED by the following vote: AYES: Williams, Newton, Reid, Lusk, Semonious NOES: ABSTAIN: ABSENT: 6. Review actual Asset Allocation as of April 30, 2016, update on May 2016 drawback and direction on funding of Operating and Payroll Expenses for June

5 MINUTES of May 24, 2016 The Boards received overview by staff and accepted recommendation as presented. ON MOTION by Member Hardcastle seconded by Member Cain authorizing a drawback from BlackRock S&P 500 Equity or Russell 1000 Index funds in the amount up to $5.7 million to fund benefit and oeprating expenses for the month of June 2016, DULY CARRIED RESOLVED by the following vote: AYES: French, Hardcastle, Miller, Cain NOES: ABSTAIN: ABSENT: Smith ON MOTION by Member Newton seconded by Member Lusk authorizing a drawback from BlackRock S&P 500 Equity or Russell 1000 Index funds in the amount up to $5.7 million to fund benefit and oeprating expenses for the month of June 2016, DULY CARRIED RESOLVED by the following vote: AYES: Williams, Newton, Reid, Lusk, Semonious NOES: ABSTAIN: ABSENT: 7. Preliminary review, discussion and direction on the draft Proposed Budgets for Fiscal Year ACTION: Accepted The Boards reviewed, discussed and accepted the proposed FY 2017 budgets for the Retirement Systems Trust Fund Budgets, the Retirement Administrative Operating Budget, and the Deferred Compensation Contract Services Budget with the City of Fresno. E. GENERAL DISCUSSION F. INFORMATION ONLY ITEMS 1. Northern Trust Monthly Portfolio Performance Reports as of April 30, Northern Trust Monthly Asset Allocation Overview April 30, Monthly Fixed Income Analysis Report April 30, Investment Manager Monitoring and Evaluation Report April 30,

6 5. MINUTES of May 24, 2016 Fresno City Employees Health & Welfare Trust Agenda for the Regular Board Meeting held on May 11, 2016 and Minutes of April 13, 2016, Regular Board Meeting. 6. RV Kuhns & Associates, City of Fresno Retirement Systems Public Fund Universe Analysis for the period ending December 31, April 27, 2016, Kennedy Capital announcement of key personnel change, departure of Steve Mace, Kennedy s Chief Operating Officer. 8. May 2, 2016, Loomis Sayles announcement of the promotion of John Gidman to Chief Operating Officer effective May 1, May 4, 2016, CIO article Tell Your Board to Get Real, Managers Warn. 10. May 6, 2016, FUNDFire articles, Even with Stellar Returns, Pensions Fall Far Short of Goals G. PROPOSED AGENDA ITEMS FOR NEXT BOARD MEETING H. UNSCHEDULED ORAL COMMUNICATIONS I. PUBLIC COMMENTS J. ADJOURNMENT 4:12 pm 6096

7 MINUTES of May 24, 2016 Employees Retirement Board Fire and Police Retirement Board 6097

8 CITY OF FRESNO RETIREMENT SYSTEMS SPECIAL JOINT MEETING OF THE RETIREMENT BOARDS MINUTES May 24, 2016 The Employees and Fire and Police Retirement Boards met in a special joint session in Retirement Office, 2828 Fresno St., 2nd Fl., Board Chamber, Room 202, Fresno, California at the hour of 1:00 PM on the day above written. ROLL CALL AT 1:00 PM Members Present for the EMPLOYEES RETIREMENT BOARD Marvell French, Phillip Hardcastle, TJ Miller, David Cain, Renena Smith Members Absent: Members present for the FIRE AND POLICE RETIREMENT BOARD Oscar Williams, David Newton, Michael Reid, Jonathan Lusk, Ted Semonious Members absent: Also Present: Russ Richeda, Legal Counsel, Robert Theller, Retirement Administrator, Kathleen Riley Brown, Assistant Retirement Administrator, Pattie Laygo, Executive Assistant APPROVE MINUTES APPROVE AGENDA Approve Emergency Agenda for the Joint Meeting of the Retirement Boards scheduled at 10:30 am on Tuesday, May 24, ON MOTION by Member Hardcastle seconded by Member Smith to approve the Emergency Agenda for the Joint Meeting of the Retirement Boards scheduled on Tuesday, May 24, 2016, DULY CARRIED RESOLVED by the following vote: AYES: French, Hardcastle, Miller, Cain, Smith NOES: ABSTAIN: ABSENT: ON MOTION by Member Newton seconded by Member Lusk to approve the Emergency Agenda for the Joint Meeting of the Retirement Boards scheduled on Tuesday, May 24, 2016, DULY CARRIED RESOLVED by the following vote: AYES: Williams, Newton, Reid, Lusk, Semonious NOES: ABSTAIN: ABSENT: TIMED SCHEDULED HEARINGS AND MATTERS 1:00 PM Discussion regarding preserving distribution of Post Retirement Supplemental Benefit (PRSB). Staff received summary review of limited options by Segal. There was no action or direction 6098

9 given by the Boards. MINUTES of May 25, 2016 A. CONSENT CALENDAR B. EMPLOYEE PERSONNEL ISSUES C. STAFF INITIATED ITEMS 1. Consider support for a "Friend of the Court" brief concerning the time frame for investors to assert individual claims for recovery of damages under Federal Securities laws. The Boards considered and approved recommendation to support "Friend of the Court" amicus brief in the North Sound case pending staff and counsel review. D. BOARD INITIATED ITEMS E. GENERAL DISCUSSION F. INFORMATION ONLY ITEMS G. PROPOSED AGENDA ITEMS FOR NEXT BOARD MEETING H. UNSCHEDULED ORAL COMMUNICATIONS I. PUBLIC COMMENTS J. ADJOURNMENT 4:15 pm 6099

10 MINUTES of May 25, 2016 Employees Retirement Board Fire and Police Retirement Board 6100