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WINFIELD POLICE PENSION FUND Village of Winfield 27w465 Jewell Rd Winfield, Illinois 60190 Minutes of the Pension Fund Meeting Monday October 28, 2013 Board Members Present Roy Grosbeck, President Bill Rizer, Vice President Jeff Hunger, Secretary Gerry McIntyre, Asst. Secretary Gary Karshna Financial Advisor Dennis Orsey, Attorney (Via Telephone) Carl Sorgatz, Treasurer Curt Barrett Village Manager Absent Thomas Szafranski Meeting was called to order at 7:05pm. Gerry made a motion to approve the July 22, 2013 meeting minutes, Jeff second, All in favor. Correspondence: None Bills: Dennis Orsey for legal services in the amount of $1350.00 for the 4th Quarter (NovemberJanuary), Also for additional legal services in the amount of $1661.25. For the IPPFA fall conference in Lake Geneva, WI for Bill Rizer ($554.81), Jeff Hunger ($617.73) and Gerry McIntyre ($592.75). IPPFA annual dues ($775.00) and Dr. Harris ($2520.00) Gerry motion to approve, Bill second. All in favor. Treasurer’s Report: None Investment Report: Gary stated that the stock and bond prices move sharply lower in May and June when the Federal Reserve “hinted” that it may curtail its stimulus program. The Fed quickly retracted their statement and reassured the financial markets by stating that they would continue their stimulus program, in full force (no tapering) until March of 2014, at the earliest. The stock and bond markets rallied back on that news! The stock market is performing much better than the bond market in the current investment environment, where Federal Reserve “Intervention” dictates the direction of the financial markets! The yield on the 10 year bond is at 2.60% and it will most likely remain near that level until January of 2014, when the politicians in Washington DC begin budget discussions and rekindle the debate on raising the debt ceiling! The Winfield Police Pension Fund had a 2.11% rate of return over the past twelve months. Gold is gradually coming back and the European equity markets are also starting to come back. Gary stated that with the US and European economies strengthening, emerging markets should also move higher and give the Winfield equity portfolio a “boost.” Bonds yields are still at historic low yield levels and if interest rates rise, bond prices will produce yields in the 1% to 2% range for the foreseeable future. Carl Sorgatz questioned the loss of money due to gold being lower in the last few months. Gary explained that gold is in our portfolio as a “catastrophic insurance policy.” As a “non-correlating asset”, gold typically moves lower when most other financial investment assets are moving higher and gold moves significantly higher when most other financial investment assets are moving lower. This smooth’s out rates of return and stabilizes the tax levy. We will discuss the fate of the gold mutual fund in the investment portfolio, as well as other topics, at the next Investment Committee meeting. Old Business: IDOI interrogatories are due on October 31, 2013. The board went over the answers to the questions on the form required by the IDOI, and fixed some areas where data was wrong on the form. The Village of Winfield hired Art Tefper to do the actuarial report for the pension fund. Art used 7.25% as a rate of return. Jeff stated he would like to see the village paperwork regarding this number. Last year the IDOI uses a rate of return of 6.50% for funds under 10 million dollars. Both Village Manager Curt Barrett and Village Treasurer Sorgatz stated they did not propose the 7.25%. Jeff stated he would contact Lauderbauch and Amen and have them make the changes the board fixed. Jeff made a motion to approve the amended IDOI interrogatories sheet. Bill second. All in favor. Discussed the next steps in the James Hanus disability application. Dennis informed the board that he has received all the IME medical reports from the three doctors. Dennis sent an email to all three attorneys to inquire if they would stipulate to the facts of the medical reports. If all attorneys stipulate to the reports, they will be introduced as evidence. Dennis also contacted the Village of Winfield attorney and James Hanus attorney for possible dates for the administrative hearing. Dennis will work on putting together exhibit books for the pension board and attorneys involved. Dennis stated that a court reporter would also have to be hired for the administrative hearing. Dennis also explained the disability hearing process from here on out. Thomas Szafranski notified Village Manager Barrett that he will be moving out of the state in the next month. Manager Barrett informed the board that Village President Spande had a person in mind to fill Thomas Szafranski’s spot on the board and they should have Village Board approval on Thursday November 7th, 2013 at their next board meeting. Jeff, Bill and Gerry all satisfied their training requirement by attending the fall conference in Lake Geneva, WI. Roy also satisfied his training by attending classes. New BusinessCOLA for retirees. Finance Director Lynn does this, and Jeff will talk to Lynn regarding this. Schedule for next years meetings. Definite January 27, 2014, Preliminary Dates April 28, 2014, July 28, 2014 and October 27, 2014. Regarding paperwork for new employees and Tier 2 pension. Jeff made a motion to accept a new form for Application of membership as to if they are a Tier 1 or a Tier 2 member. Application for new memberWinfield Police Department hired 2 new police officers on September 23, 2013, who both are Tier 2 members of the pension fund. A motion was made by Gerry to accept Michael J Mendyk and Patrick W. Vogt into the Winfield Pension Fund as Tier 2 applicants. Jeff second. All in favor. Next meeting will be Monday January 27, 2014 at 7:00pm Bill motioned to adjourn the meeting at 8:30pm, Jeff second. All in favor.