BOARD OF PENSION TRUSTEES FOR THE CITY OF JACKSONVILLE RETIREMENT SYSTEM December 21, 2017 MINUTES

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1 Members Present Jeff Bernardo, Chair Shari Shuman Sam Mousa Mike Weinstein David Kilcrease Diane Moser Terry Wood Bill Messick BOARD OF PENSION TRUSTEES FOR THE CITY OF JACKSONVILLE RETIREMENT SYSTEM December 21, 2017 MINUTES Staff Paul Barrett, Investment Officer Joey Greive, Treasurer Ray Ferngren, Pension Administrator Jaime Sawczyn, Pension Assistant John Sawyer, OGC Guests Dan Holmes by phone, Summit Strategies ( full recording of the meeting available in the Pension Office) City Hall - St. James Building, Conference Room 3C/3 rd Floor 2:00 P.M. 1. CALL TO ORDER The Chair began the meeting at 2:00pm 2. PUBLIC COMMENT None 3. MINUTES Copy of November 16th, 2017 Board of Trustees Minutes o RECOMMENDED ACTION: APPROVAL Mr. Kilcrease motioned to approve the Minutes and Mr. Tyson seconded. Discussion was nil and the Chair took a vote. The Minutes passed unanimously. 1

2 4. NEW BUSINESS A. CONSENT AGENDA Copy of Consent Agenda for Recommended Benefits for General Employees dated December 21st, Copy of Consent Agenda for Recommended Benefits for Corrections Officers dated December 21st, RECOMMENDED ACTION: APPROVAL Mr. Greive asked Mr. Ferngren if there were any anomalies? Mr. Ferngren noted only the PAC Consent was available in the booklet today because the COPAC did not meet this month, but will cover theirs next month. Ms. Shuman motioned to approve the Consent Agenda and Mr. Kilcrease seconded. There was no further discussion and the Chair took a vote. The Consent Agenda passed unanimously. 2 B. City Council Ordinance Board of Trustees Review a. RECOMMENDED ACTION: Review and provide any comments to council. No actuarial impact. Mr. Kilcrease began the discussion with an edit of the job title inmate work crew supervisor. Mr. Messick also pointed out that an all retiree workforce crew was not the intention of supervising inmates. The conversation settled with these two Correction representatives will write their comment on what they think the new ordinance should read. Mr. Tyson pointed out that the PAC review pointed out that since some of these employees will be reaching full time status while also on a pension, what will the benefits be for those that are full time while in retirement? The PAC thought that should be spelled out. Mr. Kilcrease offered a reply that the intent was this is a privilege to work full time while keeping a pension and no benefits would be offered. From here Ms. Shuman motioned for the Board to move the comments that the Corrections representatives will add and Mr. Wood seconded. The Chair took a vote which passed unanimously. 5. INVESTMENT AND FINANCIAL MATTERS - Greive/Barrett Investment Review, Flash Report Mr. Holmes from Summit Strategies was introduced by Mr. Greive for their view of the recent portfolio activity. Mr. Holmes began with general comments and how his review will lead to a recommendation. Mr. Holmes began saying the same market trends are in place and those included an accommodative central bank, rising global growth, low unemployment, a recent GDP revision to 3.3% and a flattening yield curve where longer Treasury maturities were

3 recently decreased slightly. The only change noted is that International equity, which had been outpacing all investments, has recently seen US equity outperform it. A comment from the Chair about how the International benchmarks, one being recently updated, are used in relation to the 3 specific managers in the portfolio was reviewed. Mr. Holmes said in 2018, these benchmarks will continue to be reviewed in relation to how each International portfolio manager is compared. Mr. Holmes continued with comments on Fixed income and the Real Estate portions of the portfolio. Mr. Holmes indicated a reversion to the mean in Real Estate, meaning expectations of total return from these investments will mainly come from the income side and not the growth side of these managers. Westwood Manager Review A specific page write up was supplied for this manager for this meeting. These has been recent lagging of benchmark performance with Westwood and the Board was supplied a clarification on this manager by Mr. Holmes. In summary, Summit Strategies recommended to continue to hold Westwood as the performance has only been slightly lagging and this manager is known for lagging a hard charging growth market environment that we ve been in. The value of this manager will be seen in regular and down markets, but continued monitoring will be needed. Along with Mr. Holmes, staff provided a short summary handout of a recoemmendation to sell $20mm from manager Pinnacle and with the proceeds, a resulting buy of the same amount in William Blair. Rationale for the trade was provided which included balancing out the growth and value sides of the Small-Mid cap portions of the portfolio. More details were provided about each manager and the full recording is available in the pension office. Ms. Shuman motioned to agree with the recommendations to retain Westwood and agree with the recommended trade of Pinnacle to William Blair. Mr. Mousa seconded. The Chair took a vote which passed unanimously. Segal Contract Review o RECOMMENDED ACTION: Approve Contract Mr. Greive provided a summary handout of the agreed Actuary renewal terms with Segal, the Plan s Actuary. The summary sheet noted costs for the coming years with Mr. Greive noting a savings in the coming experience study for the Plan, which he and staff worked out with Segal. Mr. Mousa noted the RFP should be attached to the contract when signing and Mr. Greive agreed this would be done. Ms. Shuman motioned to approve the contract terms and Mr. Weinstein seconded. The Chair took a vote which passed unanimously. 6. ADMINISTRATIVE Mr. Ferngren explained that a recent review by Council Auditors showed a request to the update the Request for information form. The specific request by the Auditor was to insure and enlarge visibility for the spouse on the form. Mr. Ferngren noted this was an easy fix on the form. 7. OLD BUSINESS 3

4 Final Order- Disapproved Disability Application Sabina Pryce-Jones Mr. Ferngren started the discussion indicating that all due process is now finished in the appeal of the disapproved disability application of Ms. Jones. The final order presented today is the summary of all findings they and the PAC have already reviewed. Mr. Sawyer reminded the group this is the summary of evidentiary hearings where statements and reviews of facts have been presented and came to this disapproved conclusion. Mr. Mousa motioned to approve this final order and Mr. Wood seconded. The Chair took a vote which passed unanimously. 8. INFORMATION Mr. Greive brought up the renewal of the FPPTA by the Pension Plan and the resulting $600 cost. He explained that the 2 PAC members who have already completed their certification requested the City pay this fee. Mr. Greive opined the Plan should continue to enlist as a member Short discussion here which resulted in a motion by Mr. Mousa to pay the fee and Mr. Messick seconded. There was a reminder by the Chair that this would seem fine for Board members and their continuing education but he questioned the value received from Committee members in his opinion. The Chair then took a vote which passed unanimously. a. NEXT BOARD OF TRUSTEES MEETINGS The next regular BOT meeting will be Thursday, January 25 th, 2018 at 2:00pm. 9. PRIVILEGE OF THE FLOOR Mr. Wood brought up the topic of disability retirement for DC participants. He asked Mr. Greive if all details had been considered when a DC participant would apply for disability and how this is handled and what is the Board s responsibility here, Mr. Greive and Mr. Weinstein commented that such an application is permissible and since member were paying contributions for both a DC and a small amount for Disability, each benefit is available, Mr, Wood asked would the disability contribution be raised because his rationale was a comparison to DB participants losing their contributions when they apply and qualify for a Disability retirement. MR. Wood didn t think the contribution should be the same. Mr. Weinstein commented that a DC balance, viewed essentially as a savings account could not be taken away if such a participant qualified for a Disability. Mr. Sawyer commented that on the DB side, it is clear that a Disability Retirement is the alternative if one qualifies in lieu of their DB contributions. It is not as clearly stated on the DC side. Some ore discussion ensued with no recommendations or motions. 10. ADJOURNMENT No further business and the Chair adjourned at 3:05pm 4

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