Laborers and Retirement Board Employees Annuity and Benefit Fund of Chicago Minutes of Regular Board Meeting # 943 November 19, 2013

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1 Laborers and Retirement Board Employees Annuity and Benefit Fund of Chicago Minutes of Regular Board Meeting # 943 Suite N Clark Street Chicago Illinois (312) Fax (312)

2 Report of Meeting No. 943 held on November19, 2013, at 1:00 p.m. in the office of the Pension Fund. The following were present: Stephanie Neely Trustee President and Treasurer City Treasurer, Ex Officio Member Will Irving Trustee Vice President, Union Appointed Member Michael LoVerde Trustee Secretary, Elected Member Lois Scott Trustee City Chief Financial Officer, Appointed Member Erin Keane Trustee Acting City Comptroller, Ex Officio Member (left at 5:40 p.m.) Carol Hamburger Trustee City Deputy Budget Director, Appointed Member Joseph Rinella Trustee Elected Member John Arvetis Trustee Annuitant Member Gerald Alder Chief of Staff, City Treasurer s Office, Proxy in the absence of City Treasurer Stephanie Neely Graham Grady Shefsky & Froelich, Fund s Attorney Cary Donham Shefsky & Froelich, Fund s Attorney Terence Sullivan Fund s Physician Michael Cairns NEPC, LLC, Fund s Investment Consultant Kristin Finney-Cooke NEPC, LLC, Fund s Investment Consultant Maura Murrihy Executive Director Aileen Pecora Comptroller Joan Newman Benefits Manager Margie Grazevich Benefits Payroll Manager Kathy Schanding Fund Actuary Peggy Grabowski Manager of Accounting/Investments Kimberly Brown Benefits Payroll Specialist John Carroll Compliance Administrator Jeff Yarmo Chief Technology Officer Eric Engebretson Systems Administrator Geralyn Gordon PohlmanUSA Court Reporting, Court Reporter Susan Acevedo LABF Member Joseph Acevedo Spouse of Susan Acevedo Ms. Acevedo s Representative Al Naimoli of Local 76 Observer Jason Parks of Loop Capital Observer Sharon Piet of Podesta Observer Heather L. Arison of J.P. Morgan Investments Observer Rich Galuzzi of Local 76 Observer Ron Robinson of Local 1001 Observer Joe Healy of Local 1092 Observer Mathew Cleveland of Hogan Marren, Ltd. A quorum being present, it was moved by Trustee Scott, seconded by Trustee Irving that the regular minutes of Meeting No. 942 be approved as submitted. It was moved by Trustee LoVerde, seconded by Trustee Hamburger, that the minutes of executive sessions 1, 2, 3, 4, 5, 6, 7, 8, 9, and 10 of Meeting No. 942 be approved as submitted. 2

Laborers and Retirement Board Employees Annuity and Benefit Fund of Chicago Board Members: I am transmitting herewith the minutes for the meeting of the Retirement Board which was held on.

3 Laborers and Retirement Board Employees Annuity and Benefit Fund of Chicago Board Members: I am transmitting herewith the minutes for the meeting of the Retirement Board which was held on. The minutes are comprised of the following: Presentation of Resolution Public Participation Schedule A: Applications for Refunds: 1. Refund of Contributions Due to Separation from Service 2. Miscellaneous a. Refund to Heirs of Deceased Members b. Refund of Contributions in Lieu of Annuity c. Refund to MEAB Errors in Deductions Schedule B: Payment of Administrative Expenses Schedule C: Applications for Annuities 1. Employee Annuity Applications 2. Spouse and Child Annuity Applications Schedule D: Adjustment Refunds to New Annuitants Schedule E: Applications for Duty Disability Benefits Executive Session No. 1 Schedule E: Applications for Duty Disability Benefits Continued Schedule F: Applications for Ordinary Disability Benefits Schedule G: Applications for Extension of Duty Disability Benefits Schedule H: Applications for Extension Ordinary Disability Benefits Schedule I: Payment of Uncashed Checks of Deceased Members Administrative Hearing Investments Report Executive Session No. 2 Investments Report Continued Executive Session No. 3 Schedule E: Applications for Duty Disability Benefits Continued Investments Report Continued Administrative Report Legal Report Executive Session No. 4 Executive Session No. 5 Executive Session No. 6 Executive Session No. 7 Executive Session No. 8 3

4 Legal Report Continued Adjournment All the foregoing matters were checked upon receipt into the Office of the Retirement Board and were found to be hereinafter set forth. Sincerely, Michael R. LoVerde Retirement Board Secretary 4

5 PRESENTATION OF RESOLUTION On behalf of the trustees, President Neely presented a Resolution to Honor William Irving for His Service to the LABF. A copy of the resolution is attached and incorporated for the record. PUBLIC PARTICIPATION Joe Healy of Local 1092 and Ron Robinson of Local 1001 thanked Trustee Irving for his service to LABF. SCHEDULE A APPLICATIONS FOR REFUNDS 1. Refund of Contributions Due to Separation from Service It was moved by Trustee LoVerde, seconded by Trustee Scott, that the Refunds of Contributions Due to Separation be approved and ordered paid. 2. Miscellaneous Refunds a. Refund to Heirs of Deceased Members b. Refund of Contributions in Lieu of Annuity c. Refund to MEAB A/C Errors in Deductions It was moved by Trustee LoVerde, seconded by Trustee Irving that the Miscellaneous Refunds be approved and ordered paid. 1. Administrative Invoices 2. Investment Invoices SCHEDULE B ADMINISTRATIVE EXPENSES It was moved by Trustee Scott, seconded by Trustee LoVerde, that the Invoices be approved and ordered paid. 5

6 1. Employee Annuities LABORERS & RETIREMENT BOARD EMPLOYEES SCHEDULE C APPLICATIONS FOR ANNUITIES It was moved by Trustee Irving, seconded by Trustee Rinella, that the applications presented for Employee Annuities be approved and ordered paid. 2. Spouse and Child Annuities It was moved by Trustee LoVerde, seconded by Trustee Hamburger, that the applications presented for Spouse and Child Annuities be approved and ordered paid. SCHEDULE D ADJUSTMENT REFUNDS TO NEW ANNUITANTS It was moved by Trustee Scott, seconded by Trustee Arvetis, that the Adjustment Refunds be approved and ordered paid. SCHEDULE E DUTY DISABILITY BENEFITS The Trustees removed the applications for duty disability benefits by Laborers Office #69435 and #69434 from the remaining applications at this time. It was moved by Trustee LoVerde, seconded by Trustee Arvetis, that the applications for duty disability benefits by Laborers Office #69435 and #69434 be approved and ordered paid based on the full time salary received on the day of the injury.. For-- Trustees Irving, LoVerde, Rinella, and Arvetis. Against-- Trustees Neely, Scott, Keane, and Hamburger. The motion did not pass. 6

7 SCHEDULE E CONTINUED It was moved by Trustee Scott, seconded by Trustee Hamburger, that the applications for duty disability benefits by Laborers Office #69435 and #69434 be approved and ordered paid based on a Seasonal Calculation. For-- Trustees Neely, Scott, Keane, and Hamburger. Against--Trustees Irving, LoVerde, Rinella, and Arvetis. The motion did not pass. EXECUTIVE SESSION NO. 1 Trustee Scott requested executive session under 5 ILCS 120/2(c)(11) to discuss potential or current litigation of the Fund. Trustee Hamburger seconded the motion. Trustee Rinella made a motion, seconded by Trustee Hamburger, that the executive session be adjourned and that the Board return to open session. For-- Trustees Neely, Irving. LoVerde, Scott, Keane, Hamburger, Rinella, and Arvetis. SCHEDULE E DUTY DISABILITY BENEFITS CONTINUED It was moved by Trustee LoVerde, seconded by Trustee Rinella, that the remaining applications for Duty Disability Benefits other than #69435 and #69434 be approved and ordered paid. SCHEDULE F ORDINARY DISABILITY BENEFITS It was moved by Trustee LoVerde, seconded by Trustee Hamburger, that the applications for Ordinary Disability Benefits be approved and ordered paid. For --Trustees Neely, Irving, LoVerde, Scott, Keane, Hamburger, Rinella, and Arvetis. 7

8 SCHEDULE G EXTENSION OF DUTY DISABILITY BENEFITS It was moved by Trustee LoVerde, seconded by Trustee Irving, that the applications for Extension of Duty Disability Benefits be approved and ordered paid. SCHEDULE H EXTENSION OF ORDINARY DISABILITY BENEFITS It was moved by Trustee Rinella, seconded by Trustee Keane, that the applications for Extension of Ordinary Disability Benefits be approved and ordered paid. SCHEDULE I PAYMENT OF UNCASHED CHECK OF DECEASED MEMBERS None. ADMINISTRATIVE HEARING The Matter of Susan Acevedo (Duty Disability Calculation) Susan Acevedo, Fund member, requested a hearing in order to review a previous decision of the Board to calculate her duty disability benefit using a Seasonal Calculation. Ms. Acevedo and her spouse attended the hearing. The hearing was transcribed by a court reporter. Ms. Acevedo was not represented by outside counsel and was reminded of her right to legal representation three times. The trustees unanimously directed Mr. Graham Grady of Shefsky & Froelich to conduct the hearing. Mr. Grady introduced evidence into the record. Ms. Acevedo requested that the Board calculate her disability benefit the same as it was always made in the past and according to the plain language of the Code. It was moved by Trustee LoVerde, seconded by Trustee Arvetis, to recalculate Susan Acevedo s duty disability benefit at the rate paid at the date of the injury. For-- Trustees Irving, LoVerde, Rinella, and Arvetis. Against-- Trustees Neely, Scott, Keane, and Hamburger. The motion did not pass. The Board s prior decision of September 17, 2013 regarding the calculation of Ms. Acevedo s duty disability stands. 8

9 INVESTMENTS REPORT Ratifications Trustee Scott made a motion, seconded by Trustee LoVerde, to terminate Robeco Investments as an investment manager due to performance. Trustee Hamburger made a motion, seconded by Trustee LoVerde, to terminate Barings Asset Management as an investment manager due to performance. Northern Trust Preliminary Flash Report and Watch List Michael Cairns and Kristin Finney-Cooke of NEPC, LLC presented the trustees with the Northern Trust Preliminary Flash Report and reviewed the Watch List. The Trustees also reviewed a preliminary Flash Report prepared by NEPC, LLC. Trustee Scott made a motion, seconded by Trustee Irving, to add Thomas White International, Ltd. to the Watch List due to performance. Investment Performance Reports Mr. Cairns and Ms. Finney-Cooke presented the trustees with the Third Quarter 2013 Investment Returns. Real Estate and Private Equity Reports Mr. Cairns and Ms. Finney-Cooke presented the trustees with the Second Quarter 2013 Real Estate and Private Equity Reports. Real Estate Debt RFP The trustees discussed the illiquid nature of real estate investments. The trustees decided to postpone a decision regarding the Request for Proposal (RFP) for Real Estate Debt investment management services at this time. The quiet period remains in effect. 9

10 EXECUTIVE SESSION NO. 2 Trustee Scott requested executive session under 5 ILCS 120/2(c)(7) to discuss the sale or purchase of securities, investments or investment contracts. Trustee LoVerde seconded the motion. Trustee Hamburger made a motion, seconded by Trustee LoVerde, that the executive session be adjourned and that the Board return to open session. INVESTMENTS REPORT CONTINUED RFP for Global Equity Investment Management Services Trustee Hamburger made a motion, seconded by Trustee Arvetis, to invest $35 million with Fiera Capital Corporation and $35 million with Hexavest Inc. EXECUTIVE SESSION NO. 3 Trustee Hamburger requested executive session under 5 ILCS 120/2(c)(11) to discuss potential or current litigation of the Fund. Trustee Scott seconded the motion. Trustee LoVerde made a motion, seconded by Trustee Hamburger, that the executive session be adjourned and that the Board return to open session. 10

11 SCHEDULE E DUTY DISABILITY BENEFITS CONTINUED It was moved by Trustee Hamburger, seconded by Trustee Scott, that the applications for duty disability benefits by Laborers Office #69435 and #69434 be approved and ordered paid based on a Seasonal Calculation. For-- Trustees Neely, Scott, Keane, and Hamburger. Against-- Trustees Irving, Rinella, and Arvetis. Absent-- Trustee LoVerde. INVESTMENTS REPORT CONTINUED Manager of Emerging Managers Program RFP Trustee Scott made a motion, seconded by Trustee LoVerde, to approve the RFP for Manager of Emerging Managers Program services. Notice of the RFP will be published in an upcoming publication of Pensions & Investments. For-- Trustees Neely, Irving, LoVerde, Scott, Hamburger, Rinella, and Arvetis. Emerging Markets Brokerage Goals The trustees discussed the Board s current brokerage goals regarding minority-owned, female-owned, and disabled-owned businesses. Trustee Hamburger made a motion, seconded by Trustee Irving, to place Vontobel Asset Management on the Watch List due to noncompliance with Board policy. For-- Trustees Neely, Irving, LoVerde, Scott, Hamburger, Rinella, and Arvetis. Trustee LoVerde made a motion, seconded by Trustee Hamburger, to revise the LABF s Brokerage Policy by decreasing the emerging market equity brokerage goal from 20% to 10%. For-- Trustees Neely, Irving, LoVerde, Scott, Hamburger, Rinella, and Arvetis. ADMINISTRATIVE REPORT Midwest Mezzanine Fund IV LP Capital Call Midwest Mezzanine Fund IV requested a capital call on October 15, 2013 in the amount of $2,008. Midwest Mezzanine Fund IV LP Distribution Midwest Mezzanine Fund IV LP made a distribution on October 15, 2013 in the amount of $99,390. Capri Capital Advisors Apt. Fund III Distribution Capri Capital Advisors Apt. Fund III made a distribution on October 24, 2013 and on in the amount of $1,125,247 and $105,000 respectively. 11

12 ADMINISTRATIVE REPORT CONTINUED LABORERS & RETIREMENT BOARD EMPLOYEES Trustee Appointment Ms. Murrihy notified the trustees that Local 1001, as authorized under the Illinois Pension Code, appointed Mr. Victor Roa to serve as a trustee on the LABF Board of Trustees. Mr. Roa s term will commence December 2, 2013 and end December 1, Technology Updates Ms. Murrihy updated the trustees on the use of ipads, the status of the office phone system, and the participation with the Reciprocal System Data Exchange. Freedom of Information Act Ms. Murrihy updated the trustees on current requests for information made pursuant to the Illinois Freedom of Information Act. Trustee Education Requirements The trustees were reminded of their 2013 training requirements and informed about an upcoming ethics seminar Administrative Budget Ms. Murrihy discussed the renewal of the existing health care contract with the trustees. This contract expires on November 30, The 2014 Administrative Budget will be presented at the next regular board meeting. LEGAL REPORT Conflict of Interest Waiver The Trustees directed the Executive Director to execute a concurrent conflict of interest waiver with Shefsky & Froelich for a securities lending agreement with Deutsche Bank. EXECUTIVE SESSION NO. 4 Trustee Arvetis requested executive session under 5 ILCS 120/2(c)(11) to discuss potential or current litigation of the Fund. Trustee Hamburger seconded the motion. For-- Trustees Neely, Irving, LoVerde, Scott, Hamburger, Rinella and Arvetis. Trustee LoVerde made a motion, seconded by Trustee Hamburger, that the executive session be adjourned and the Board return to open session. For-- Trustees Neely, LoVerde, Irving, Scott, Hamburger, Rinella and Arvetis. 12

13 EXECUTIVE SESSION NO. 5 Trustee Irving requested executive session under 5 ILCS 120/2(c)(11) to discuss potential or current litigation of the Fund. Trustee Rinella seconded the motion. For-- Trustees Neely, Irving, LoVerde, Scott, Hamburger, Rinella and Arvetis. Trustee Hamburger made a motion, seconded by Trustee LoVerde, that the executive session be adjourned and that the Board return to open session. For-- Trustees Neely, Irving, LoVerde, Scott, Hamburger, Rinella and Arvetis. EXECUTIVE SESSION NO. 6 Trustee Irving requested executive session under 5 ILCS 120/2(c)(11) to discuss potential or current litigation of the Fund.. Trustee Arvetis seconded the motion. For-- Trustees Neely, Irving, LoVerde, Scott, Hamburger, Rinella and Arvetis. Trustee Hamburger made a motion, seconded by Trustee Rinella, that the executive session be adjourned and that the Board return to open session. For-- Trustees Neely, Irving, LoVerde, Scott, Hamburger, Rinella and Arvetis. EXECUTIVE SESSION NO. 7 Trustee LoVerde requested executive session under 5 ILCS 120/2(c)(11) to discuss potential or current litigation of the Fund. Trustee Rinella seconded the motion. For-- Trustees Neely, Irving, LoVerde, Scott, Hamburger, Rinella and Arvetis. Trustee Arvetis made a motion, seconded by Trustee Scott, that the executive session be adjourned and that the Board return to open session. LABORERS & RETIREMENT BOARD EMPLOYEES 13

14 EXECUTIVE SESSION NO. 7 Continued For-- Trustees Neely, Irving, LoVerde, Scott, Hamburger, Rinella and Arvetis. EXECUTIVE SESSION NO. 8 Trustee LoVerde requested executive session under 5 ILCS 120/2(c)(11) to discuss potential or current litigation of the Fund. Trustee Hamburger seconded the motion. For-- Trustees Neely, LoVerde, Scott, Hamburger, Rinella and Arvetis. Against --None. Abstained-- Trustee Irving. Trustee Hamburger made a motion, seconded by Trustee LoVerde, that the executive session be adjourned and that the Board return to open session. For-- Trustees Neely, LoVerde, Scott, Hamburger, Rinella and Arvetis. LEGAL REPORT CONTINUED Shefsky & Froelich Ltd. Mr. Grady informed the trustees that Shefsky & Froelich Ltd. will merge with Taft, Stettinius & Hollister, LLP, a Cincinnati based law firm, effective January 2, Voting This matter was taken out of order. Mr. Grady advised the trustees that a tie vote by the Board will act as a denial of the application, motion, or request on which the Board was voting. ADJOURNMENT With no further business, Trustee Irving made a motion to adjourn. Trustee Scott seconded the motion. For--Trustees Neely, Irving, LoVerde, Scott, Hamburger, Rinella, and Arvetis. 14

Suite N Clark Street Chicago Illinois (312) Fax (312)

Suite N Clark Street Chicago Illinois (312) Fax (312) Laborers and Retirement Board Employees Annuity and Benefit Fund of Chicago Minutes of Regular Board Meeting No. 1005 Suite 1300 321 N Clark Street Chicago Illinois 60654-4739 (312) 236-2065 Fax (312)