HomeMy WebLinkAbout2012 Police Pension ELGIN POLICE PENSION FUND
151 Douglas Ave
Elgin, IL 60120
MEETING NOTICE
January 10, 2012
The ELGIN POLICE PENSION FUND, Board of Trustees will be holding a regular
quarterly meeting on Wednesday, January 18, 2012 at 1:30 p.m. The meeting will be
held at the Elgin Law Enforcement Facility at 151 Douglas Ave. Elgin, Illinois in the
North Lobby Community Room.
Agenda:
Call to Order:
Minutes of the October 19, 2011.
E Treasurer's Report:
a. 4th Quarter 2011 Executive Summary.
b. Bill Yocius of MVT presentation.
Expenses:
Deaths: (0)
Retirements: (0)
Disabilities: (1) Pete Almeida — Update on appeal to the Illinois Supreme Court status.
Resignations: (1) Susan R. Grimm # 285 resigned November 29, 2011.
Refunds: (1) Susan R. Grimm asked for a refund of contributions.
Terminations: (0)
New Hires: (0)
Portability:
Y� ((0)
IMRF Buy Back: (1) Ricky A. Demierre applied to transfer 3 years, 3 months from The
Illinois Municipal Retirement Fund to the Elgin Police Pension Fund. Presented a check for
$10,759.38.
Military Buy Back: (0)
Miscellaneous:
a. Yearly 3% Cost of Living Adjustments (COLA) for applicable retired members.
b. Fiduciary Liability Insurance Renewal—Ullico signed binder.
c. Investment Committee Meeting -- Minutes & Agenda for November 30, 2011.
d. Annual Disability Exams—Kaminski and bill for Dr. Harris.
e. 2012 Quarterly Meeting Dates.
f. Udelhoven's QILDRO ($50.00 fee).
g. Radmer's refund—letters from DOI and Cary's response.
h. Letter to the Board from Cary Collins.
i. Yearly affidavits and end of year letter.
j. Executives Meeting Minutes—release or not to release.
k. Miscellaneous correspondences.
1. Lauterbach and Amen monthly reports.
2. Kayne Anderson quarterly reports.
3. Marquette infrastructure position paper.
4. Mitchell, Vaught & Taylor portfolio Statement.
5. Tocqueville Asset Management monthly reports.
Executive Session:
a. Actuarial Report
Adjournment:
Sincerely,
Thomas J. Quigley
Clerk
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The Minutes of the Quarterly Meeting of the El.gi.n.Police Pension Fund,Board of Trustees,
rk January 18,2012. Present at the meeting was President James Lamkin, Vice President Robert
Christ, Trustee Robert O'Connor, Asst. Secretary James Roscher, Secretary Chris Troiola, Chief
Financial Officer Colleen Lavery, Attorney Cary Collins, Mike Piotrowski of Marquette
Associates and Clerk Thomas Quigley.
Absent: None
Guests: James Nowicki of MVT.
The meeting was call to order at 1:35 p.m. by President Lamkin.
Minutes of October 19,2011 meeting were approved on a motion by Christ, seconded by Troiola.
Motion approved.
Treasurer's Report:
(1) Mike Piotrowski presented the 4th Quarter 2011 Executive Summary. The Fund was
performing well at times this quarter and then also poorly at times this quarter, and will be
close to flat for the year. The European debt crisis as well and the upcoming Presidential
election will continue to be a drag on the economy. The Fund Managers are mixed in
performance. Dimensional Fund Advisors is still on alert due to performance issues but look
to be poised to improve in 2012. Over the past 3 years the Fund is up on average of 8.4%. By
far the fixed income parts of the investments have done well, up about 5% for 2011. However
for 2012, the Fund may have to look at reducing fixed income by 5%,moving it to equities
since equities should outperform fixed in 2012. Corporate Bonds will also start coming into
play this year since they should be outperforming fixed income. There is no need to re-balance
at this time and will wait for the next Investment Committee Meeting to do so if needed. A
motion to accept Treasurers Report was made by Christ, seconded by Troiola. Motion
approved.
(2) There was a motion to approve all trades and transactions of monies since last meeting up to
this meeting as reported.Motion made by Christ,seconded by Troiola. Motion approved by
roll call vote. This is subject to approval by City Treasurer Lavery.
(3) James Nowicki spoke of how the Fund was performing under Mitchell, Vaught and Taylor.
The Fund is doing very well. It is up about 5% for the year. MVT are looking to purchase
Corporate Bonds in the future but only if they look attractive to purchase, which they are very
close to doing. They are also looking at short maturity times.
Expenses: The following expenses were approved as submitted on a motion by Troiola, seconded
by Christ. Motion approved by roll call vote.
Cary Collins Inv # 5663 Admin Services—Oct 2011 $800.00
5671 Admin Services—Nov 2011 $800.00
5672 Scanning Files Oct-Nov 2011 $213.00
5687 Retainer January—March 2012 $1,250.00
5733 Admin Services—December 2011 $800.00
IPPAC 541 Roscher Fee Winter Seminar 2011 $25.00
JP Morgan 20110930-9174-A 3`d Qtr Fee 2011 $10,870.11
Kayne Anderson Rudnick Inv# 10151045 3rd Quarter Fee 2011 $12,206.00
Lauterhach &Amen Inv# 23227 Fees September 2011 $1,240.00
23674 Fees October 2011 $1,240.00
24086 Fees November 2011 $1,240.00
Marquette Associates Inv# 111218 Fees Dec. 1 2011-Feb. 29, 2012 $7,500.00
Mesirow Financial Inv# 750085 Nov 1,2011 —Nov. 1, 2012 $9,126.00
Mitchell,Vaught&Taylor 4th Qtr Fee $9,532.00
Tom Quigley Postage reimburse $41.24
Tocqueville Fees 3rd Quarter 2011 $8,595.00
The Board approved the monthly pension check payouts as noted in meeting notes.
Deaths: (0)
Retirements: (0)
Disabilities: (1)The Board has asked to be allowed to appeal the ruling of the 2nd District
Appellate Court to the Illinois Supreme Court. That ruling reversed the Ruling of the 16`h circuit
Court.
Resignations: (1) Susan R. Grimm #285 resigned on.November 29,2011.
Refunds: (1)The Board approved the written request of Susan R. Grimm in the amount of
$74,056.09. She was with the Fund from January 5, 2001 —November 29, 2011. Christ made the
motion to approve the refund request, seconded by Troiola. Motion approved.
Terminations: (0)
New Hires: (0)
Portability of Creditable Service: (0)
Public Act 096-1260--Military Buy Back: (0)
IMRF Buy Back: (1)Ricky A. Demierre applied to transfer 3 years and 3 months from the Illinois
municipal Retirement Fund to the Elgin Police Pension Fund. He presented the Fund with a check
in the amount of$10,759.38. During the check of the files for this it was found that when IMRF
initially sent his contribution history in May 2008 it showed 3 years 3 months of creditable service
totaling$20,246.70. Lauterbach did the true costs off this set of numbers. However, when IMRF
sent the check in October 2008,they had put another 2 months of creditable service on it along
with the additional corresponding amount of money. Lauterbach was instructed in January 2012 to
recalculate the true cost using the 3 years and 5 months. They calculated that an additional true
cost of$2,843.03 would be required from Ricky Demierre. Ricky Demierre was notified of the
change, and the Board will wait to see how he intends to proceed.
Miscellaneous:
a. The Board approved the yearly 3%cost of Living Adjustments (COLA) for applicable retired
members. Motion by Troiola, seconded by O'Connor. Motion approved.
b. The Fund received the signed copy of the Fiduciary Liability Insurance renewal from Ullico.
c. Board reviewed the minutes of the Investment Committee meeting from November 30, 2011.
d. The annual disability exam for Kaminski came back from Dr. Harris. He is still disabled.
Cary Collins will also talk to Dr. Harris about the charge for Kaminski missing an
appointment.
e. The 2012 Quarterly Meeting Dates were distributed as a reminder.
f. The Udelhoven's QILDRO was received by the Board and acknowledged. The$50.00
administrative fee was also received. A letter of acknowledgement will be sent to the attorney.
The Fund will have to follow the QILDRO and determine the amount to be sent to Ms.
Udelhoven per the order, at the time the QILDRO is started.
g. The Board reviewed and discussed the letters between DOI and Cary Collins reference
Radmer's refund.
h. Attorney Cary Collins sent a letter to the Board about the expansion of his office.
i. The yearly affidavits had gone out and all but 12 have been returned.
j. The Executive Meeting Minutes will not be released by the Board.
k. The Board reviewed the miscellaneous k. section of the agenda.
1. The 2011 Actuarial Report was review by CFO Lavery in the open meeting section of the
meeting instead of the Executive Session as noted on the Agenda. The assumption rate has
been change to 7.75%from 8%. Ms. Lavery believes that the assumption rate has to be more
realistic. This will raise the amount that the City contributes to the Fund so that is can start to
pay the unfunded liabilities that is still outstanding from the City contributions. $3,500,000.00
will come from the tax levy with the rest coming from the general fund. The Fund is currently
funded at 47.7%. The Board expressed their appreciation to Ms. Lavery about how she is
starting to take a realistic look at the assumption rate. Ms. Lavery is looking to drop the rate
even further in the coming years.
Executive Session: None
With no further business the meeting was adjourned by President Lamkin at 2:28 p.m. on motion
by Roscher,second by Troiola. Motion approved.
The next meeting will be held on April 18, 2012 tx, 1:30 p.m. The meeting location will
be The Elgin Police Law Enforcement Facility, 151 Douglas Avenue Elgin, IL 60120.
Sincere
Thom:s J. Quigley
Clerk
Board Member Approval: _4c=7)\-.
Signature Title
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ELGIN POLICE PENSION FUND
151 Douglas Ave
Elgin, IL 60120
INVESTMENT COMMITTEE MEETING NOTICE
February 21, 2012
The ELGIN POLICE PENSION FUND, Board of Trustees announces that
an Investment Committee will be holding a meeting on February 23, 2012 at
3 p.m. The meeting will be held at City Treasurer's Office 150 Dexter
Court Elgin, IL 60120
Agenda:
Tele-conference with Marquette Associates.
Discuss the Funds current financial status.
Discuss/recommend any changes to the Funds allocations and re-
balance if necessary.
Approve the minutes of the following meetings:
September 8, 2011
November 30, 2011
Set next meeting date.
Sincerely,
Thomas J. Quigley
Clerk
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ELGIN POLICE PENSION FUND
151 Douglas Ave
Elgin, IL 60120
MEETING NOTICE
April 4, 2012
The ELGIN POLICE PENSION FUND, Board of Trustees will be holding a regular
quarterly meeting on Wednesday, April 18, 2012 (&, 1:30 p.m. The meeting will be
held at the Elgin Law Enforcement Facility at 151 Douglas Ave. Elgin, Illinois in the
North Lobby Community Room.
Agenda:
Call to Order:
Minutes of the January 18, 2012.
Treasurer's Report:
a. 1st Quarter 2012 Executive Summary.
b. Fee adjustment
c. Bill Yocius of MVT presentation.
Expenses:
Deaths: (0)
Retirements: (3) Deputy Chief Robert M. Beeter #205 retired on February 3, 2012.
Sgt. William T. Linder #136 retired on February 7, 2012.
Sgt. Jose Morales Jr. #150 retired on March 23, 2012.
Disabilities: (1) Pete Almeida —Update, benefits, discussion and votes.
Resignations: (1) Benjamin M. Conway # 379 resigned on January 31, 2012.
Terminations: (1) Darren T. Monforti #276 was terminated on March 23, 2012.
Refunds: (1) Benjamin M. Conway asked for a refund of contributions totaling $3,586.02.
New Hires: (1) Chad Schuttrow #383 was hired on March 26, 2012.
Portability: (0)
IMRF Buy Back: (2) Raymond E. Bennett process completed buying 7 yrs & 11 months.
Ricky A. Demierre update
Military Buy Back: (1) Cecil E. Smith update.
Miscellaneous:
a. Lauterbach and Amen 3 year letter of Engagement.
b. IPPAC 17th Annual Spring Conference --May 30, 31, and June 1, 2012.
c. IPPAC letter reference amendment to Open Meetings Act.
d. IPPAC Ethics training for current members and new members.
e. Lauterbach and Amen letter reference PERRO (Public Employee Retirement Resources
Organization).
f. Letter to CFO Colleen Lavery reference Compliance with HB 5088.
g. Investment Committee Meeting -- Minutes & Agenda for February 23, 2012.
h. Investment Committee update and members.
i. Trustee Election Nomination for Chris Troiola two year term.
j. DOI Annual Report process has begun.
k. Annual Disability Examinations.
1. Letters to members' reference lost creditable service time.
m. Miscellaneous correspondences.
1. Marquette Associates firm update letter dated March 31, 2012.
2. Lauterbach and Amen monthly reports.
3. Kayne Anderson quarterly reports.
4. Mitchell, Vaught & Taylor portfolio Statement.
5. Tocqueville Asset Management monthly reports and Proxy votes for 2011.
Executive Session:
Adjournment:
Sincerely,
Thomas J. Quigley
Clerk
ELGIN POLICE PENSION FUND
151 Douglas Ave
Elgin, IL 60120
SPECIAL MEETING NOTICE
May 9, 2012
The ELGIN POLICE PENSION FUND, Board of Trustees will be holding a regular
quarterly meeting on Tuesday May 22, 2012 (a, 1:30 p.m. The meeting will be held at
the Elgin Law Enforcement Facility at 151 Douglas Ave. Elgin, Illinois in the North
Lobby Community Room.
Agenda:
Call to Order:
Review and Discuss 2010 Department Of Insurance Audit Findings.
Aw Review, Discuss and Approve Responses to the 2010 Audit Findings.
Executive Session:
Adjournment:
Sincerely,
Thomas J. Quigley
Clerk
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ELGIN POLICE PENSION FUND
151 Douglas Ave
Elgin, IL 60120
INVESTMENT COMMITTEE MEETING NOTICE
May 14, 2012
The ELGIN POLICE PENSION FUND, Board of Trustees announces that
an Investment Committee will be holding a meeting on May 23, 2012 at 3
p.m. The meeting will be held at City Treasurer's Office 150 Dexter Court
Elgin, IL 60120
Agenda:
Tele-conference with Marquette Associates.
Discuss the Funds current financial status.
Discuss/recommend any changes to the Funds allocations and re-
balance if necessary.
Approve the minutes of the following meetings:
September 8, 2011
November 30, 2011
February 23, 2012
Set next meeting date.
Sincerely,
Thomas J. Quigley
Clerk
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The Minutes of the Quarterly Meeting of the Elgin Police Pension Fund, Board of Trustees,July
18,2012. Present at the meeting was President James Lamkin, Vice President Robert Christ,
Trustee Robert O'Connor,Asst. Secretary James Roscher, Secretary Chris Troiola, Chief Financial
Officer Colleen Lavery, Attorney Cary Collins, Mike Piotrowski of Marquette Associates and
Clerk Thomas Quigley.
Absent: None
Guests: Bill Yocius and James Nowicki of MVT.
The meeting was call to order at 1:34 p.m. by President Lamkin.
Minutes of April 18, 2012 meeting were approved on a motion by Christ, seconded by
Troiola. Motion approved.
Treasurer's Report:
(1) Mike Piotrowski presented the 2nd Quarter 2012 Executive Summary. The Fund is
performing reasonably well in this market,up 4.5% through the 2nd Quarter. It was up higher
but went down due to downward pressure from the U. S. Economy, Europe debt problems and
slow global growth over-all. Corporate Bonds are starting to look attractive and will be
purchased in larger quantities as time goes on. Fixed income is still not a great place to be
right now due to interest rates hitting the all-time lows and there is little place to go but up
now. The Fund Managers are performing well except for 2 funds. Dimensional Fund
Advisors is still on alert due to performance issues and Marquette will be looking to possible
ro. bring in search information so the Board can decide if they want to terminate DFA.
Tocqueville Asset Management is also on alert due to under performance over the past year.
It appears that Tocqueville will be pulling out of the performance problem as time goes on,
however they will be monitored.
There is a change allowing the Fund to have 10%in mutual funds and reducing the amount of
fixed income to 45%. This again would be a good move since fixed income is not performing
like the U. S. Equity Market. Marquette moved $1,300,000.00 from cash.to Vanguard Mid
Cap Index Fund. $600,000.00 went from Cash to Fixed Income prorata. $900,000.00 went
from cash to Dodge and Cox. With the increased equity exposure,this will help to raise the
4.5%the Fund has increased this year to raise closer to the actuarial rate of 7.75%.
There is no need to re-balance at this time and will wait for the next Investment Committee to
see if there is a need then.
Marquette updated the Investment Policy Guidelines as of July 2012. A motion to approve the
July 2012 up dated Investment Policy Guidelines was made by Christ, seconded by Troiola.
Motion approved.
A motion to accept Treasurers Report was made by Christ, seconded by O'Connor. Motion
approved by a roll call vote 5 yes—0 no.
(2) There was a motion to approve all trades and transactions of monies since last meeting up to
C this meeting as reported. Motion made by Christ, seconded by Troiola. Motion approved by
roll call vote 5 yes—0 no. This is subject to approval by City Treasurer Lavery.
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(3) Bill Yocius and James Nowicki spoke of how the Fund was performing under Mitchell,
Vaught and Taylor. The Fund is doing very well. It is a very difficult environment to make
money due to the economic pressure in the fixed income sector. But they say MVT is still
making money for the Fund up 1.45%. They are keeping short maturity times on the bonds
they purchase to be able to provide the best returns possible in this climate since the yields are
so low on 10 year Treasury Bonds. The cumulative return is 100% over 10 years. The net
return over 10 years has been 5%with less risk.
Expenses: The following expenses were approved as submitted on a motion by Roscher,
seconded by Christ. Motion approved by roll call vote 5 yes–0 no.
Robert Christ Reimbursement for IPPAC Seminar $304.11
Cary Collins Inv 5805 Admin Services—April 2012 $800.00
5806 Scanning Files—March 2012 $123.00
5810 Admin Services—May 2012 $800.00
5827 Retainer July- September 2012 $1,250.00
IPPAC 597 Fees for Seminar(Christ) $250.00
657 Membership July 2012–June 2013 $500.00
State of Illinois F49437 Compliance Fee 2012 $8,000.00
JP Morgan 20120331-9174-A 1st Qtr Fee 2012 $10,154.07
Kayne Anderson Rudnick Inv# 10151047 1st Quarter Fee 2012 $13,862.00
Lauterbach &Amen Inv#26041 Fees March 2012 $1,275.00
26448 Fees April 2012 $1,275.00
26626 DOI Annual Report 2012 $1,850.00
Marquette Associates Inv# 120619 Fees June 1 —August 31, 2012 $7,500.00
Mitchell,Vaught &Taylor 2nd Q 2012 Fee $9,151.00
Tom Quigley Postage reimburse $83.30
Tocqueville Fees 1st Quarter 2012 $11,137.00
The Board approved the monthly pension check payouts as noted in meeting notes.
Deaths: (0)
Retirements: (3)
Lt. Thomas F. O'Herron#159 was appointed to the Elgin Police Department on November 13,
1982. He retired on June 2, 2012. This includes his IMRF transfer time of 7 yrs and 1 month. His
current rank is Lieutenant. He has creditable time of 29 years for a pension to be computed at
72.5%of his salary of the last day of employment. At the time of retirement his total pensionable
salary is $115,368.08. The pension benefit amount is $83,641.92 annually, or$6,970.16 monthly
benefit. The check for June 2012 will be prorated for 28 days in the amount of$6,505.48. Yearly
COLA increases will increase per State Pension Code Statutes. Motion made by Christ to pay the
pension benefit to Thomas O'Herron, seconded by O'Connor. Motion Approved.
Sgt. Joanne E. Demmin# 141 was appointed to the Elgin Police Department on April 26, 1983.
She retired on May 12,2012. This includes her IMRF transfer time of 3 years and 9 months, Her
current rank is Sgt. She has creditable service time of 29 years for a pension to be computed at
72.5%of her salary for the last day of employment. At the time of her retirement,her total
pensionable salary is $104,641.35. The pension benefit amount is $75,864.96 annually or
$6,322.08 monthly benefit. The check for May 2012 will be prorated for 10 days in the amount of
$2,039.38. Yearly COLA increases will occur per State Pension Code Statutes. Motion made by
Roscher to pay the pension benefit to Joanne Demmin, seconded by Christ. Motion approved.
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Sgt. Thomas E. Olson#129 was appointed to the Elgin Police Department on March 22, 1982. He
retired on August 4,2012. His current rank is Sgt. He has creditable service time of 30 years and
4 months for a pension to be computed at 75%of his salary on the last day of employment. At the
time of his retirement his total pensionable salary is $104,641.58. The pension benefit amount is
$78,481.20 annually,or$6,540.10 monthly benefit. The check for August 2012 will be prorated
for 27 days in the amount of$5,696.22. Yearly COLA increases will occur per State Pension
Code Statutes. Motion made by Christ to pay the pension benefit to Thomas Olson, seconded by
Troiola. Motion approved.
Disabilities: (0)
Resignations: (0)
Terminations: (0)
Refunds: (0)
New Hires: (8)
1. Matthew Carr#380 was hired as a Probationary Police Officer on March 26, 2012. He has
made application to be admitted into the Pension Fund. Christ made a motion to approve
Carr's application into the Fund, seconded by Troiola. Motion approved.
2. Justin Brown #381 was hired as a Probationary Police Officer on March 26, 2012. He has
made application to be admitted into the Pension Fund. Christ made a motion to approve
Brown's application into the Fund, seconded by Troiola. Motion approved.
rik 3. Erik Ruiz#382 was hired as a Probationary Police Officer on March 26, 2012. He has made
application to be admitted into the Pension Fund. Christ made a motion to approve Ruiz's
application into the Fund, seconded by Troiola. Motion approved.
4. Andrew Houghton#383 was hired as a Probationary Police Officer on April 9,2012. He has
made application to be admitted into the Pension Fund. Christ made a motion to approve
Houghton's application into the Fund, seconded by Troiola. Motion approved.
5. James Olsen#384 was hired as a Probationary Police Officer on May 14, 2012. He has
made application to be admitted into the Pension Fund. Christ made a motion to approve
Olsen's application into the Fund, seconded by Troiola. Motion approved.
6. Gregory Lynch#385 was hired as a Probationary Police Officer on July 5, 2012. He has
made application to be admitted into the Pension Fund. Christ made a motion to approve
Lynch's application into the Fund, seconded by Troiola. Motion approved.
7. Mark Root#386 was hired as a Probationary Police Officer on July 5, 2012. He has made
application to be admitted into the Pension Fund. Christ made a motion to approve Root's
application into the Fund, seconded by Troiola. Motion approved.
8. Ryan Nelis#387 was hired as a Probationary Police Officer on July 5, 2012. He has made
application to be admitted into the Pension Fund. Christ made a motion to approve Nelis's
application into the Fund, seconded by Troiola. Motion approved.
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Portability of Creditable Service: (0)
IMRF Buy Back: (0)
Public Act 096-1260--Military Buy Back: (0)
Miscellaneous:
a. Robert O'Connor was reappointed by Mayor Kaptain to serve a 2 year term from May 1, 2012
—May 1,2014.
b. The Board accepted Pete Almeida's QILDRO but cannot send the money to his wife's account;
Illinois Pension Code does not allow this to happen as long as he is on disability. Cary
Collins's office will send a letter explaining this to Mr. Almeida. The $50.00 processing fee
was also received. Motion to accept the QILDRO made by Christ, seconded by Troiala.
Motion approved.
e. The Board accepted Robert Jacks's QILDRO and the$50.00 fee has been received. Motion to
accept the QILDRO was made by Christ, seconded by Troiola. Motion approved.
d. During the 2010 Audit done by the DOI, the Fund found several over payments and under
payments of benefits to the following members;
1. Everett Bell was not given a retro calculation of benefits once the new PB PA
Patrolman contract was settled. He will be paid the amount he is due by the Fund
on the August 2012 payout. Motion by Christ to recalculate his benefit and pay
Officer Bell his amount due and, seconded by Troiola. Motion approved by roll
call vote 5-yes, 0-no.
2. Elizabeth Copher was not given the appropriate credit for her longevity pay. This
will be recalculated and she will be paid the amount due by the Fund on August
2012 payout. Motion by Christ to recalculate her benefit and pay Officer Copher
her amount due, seconded by Troiola. Motion approved by a roll call vote 5-yes,
0-no.
3. Gene Fowler was over-paid by the Fund due to the hourly rate of holiday pay also
included Longevity pay. This has been recalculated and he owes the Fund $245.58,
He will be given 4 months to pay the Fund back. Motion by Christ to have his
benefit recalculated and to have him repay his amount owed, seconded by Troiola.
Motion approved on a roll call vote 5-yes, 0-no.
4. Richard Frey was not given the full amount owed him due to transposition error.
He will be reimbursed the correct amount by the Fund on the August 2012 payout.
Motion by Christ to recalculate his benefit and to pay Officer Frey the amount due
to him, seconded by Troiola. Motion approved on a roll call vote 5-yes, 0-no.
5. Daniel Keen was over-paid by the Fund due to the hourly rate of holiday pay also
included longevity pay. This has been recalculated and he owes the Fund $141.76.
He will be given 4 months to pay the Fund back. Motions by Christ to recalculate
his benefit and to have Officer Keen repay his over payment, seconded by Troiola.
Motion approved by a roll call vote 5-yes, 0-no.
6. Thomas Quigley was over-paid by the Fund due to the hourly rate of holiday pay
also included longevity pay. This has been recalculated and he owes $193.61. He
will be given up 4 months to pay the Fund Back. Motion by Christ to recalculate
his benefit and for Officer Quigley to repay is over payment, seconded by Troiola.
Motion approved by a roll call vote 5-yes, 0-no.
e. The Board opened a new account at Harris Bank and will close the current one. This will
allow for online viewing and the members updated the signature signers for the checking
account.
Page 4
1. The Board accepted Tocqueville Powerwave Class Action Settlement check in the amount of
$230.73.
g. Lorenz Burkert repaid the Fund,the amount he owed for his creditable service time for the
dates of January 4,2011 —March 3, 2011. He paid 9 payments in the amount of$141.65 and
the final payment in the amount of$141.67. The total amount owed/paid is $1,416.52. This
time will now be accepted as creditable service time.
h. The FY2011 DOI Annual Report was completed and the certificate foiin was signed and
notarized and sent off.
i. The Board reviewed the upcoming training opportunities from 1PPAC, Marquette Associates.
j. The Board reviewed the proposed workshop for Retired/Active Members from Lauterbach and
Amen. The Board will not be participating in these events.
k. The Board reviewed the Minutes of the May 23,2012 Investment Committee Meeting.
I. The Board reviewed the letter sent by President Lamkin to the Retired and Active Members.
m. The Board reviewed the letter from the IRS and the response from the Fund which Lauterbach
had written. The Board will be waiting for the reply from the IRS.
n. The Board of Trustees put forth a slate for the Officers of the Board. The slate consisted of
keeping all current Trustees in their current Offices for the next I year term. The slate was
President-Lamkin; Vice President-Christ; Secretary-Troiola;Assistant Secretary-Roscher and
Trustee-O'Connor. A motion was made by Roscher to approve the slate as the Officers of the
Board, seconded by O'Connor. Motion approved.
o. The Board reviewed the additional documents in section o. of the Agenda.
Executive Session: None
With no further business the meeting was adjourned by President Lamkin at 2:17 p.m. on motion
by Roscher, second by Christ. Motion approved.
The next meeting will be held on October 17, 2012 (a, 1:30 p.II. The meeting location
will be The Elgin Police Law Enforcement Facility, 151 Douglas Avenue Elgin, IL 60120.
Sincerely,
Thomas S. Quigley
Clerk
Board Member Approval: . '?� C'a '` -' S 1
Signature Title
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ELGIN POLICE PENSION FUND
151 Douglas Ave
Elgin, IL 60120
INVESTMENT COMMITTEE MEETING NOTICE
September 1, 2012
The ELGIN POLICE PENSION FUND, Board of Trustees announces that
an Investment Committee will be holding a meeting on. September 6, 2012 at
2:30 p.m. The meeting will be held at City Treasurer's Office 150 Dexter
Court Elgin, IL 60120
Agenda:
Tele-conference with Marquette Associates.
Discuss the Funds current financial status.
Discuss/recommend any changes to the Funds allocations and re-
balance if necessary.
Set next meeting date.
Sincerely,
Thomas J. Quigley
Clerk
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Elgin Police Pension Fund
151 Douglas Avenue
Elgin, IL 60120
Minutes of the monthly meeting of the Elgin Police Pension Fund, Investment Committee, held
on September 6, 2012. The meeting was cancelled due to a death in Vice President Christ's
family.
Absent: Vice President Robert Christ, Clerk Thomas Quigley, Mike Piotrowski of Marquette
Associates and Chief Financial Officer Colleen Lavery
Guests: None.
Treasurers Report: No business was done due to the meeting was cancelled and will be
rescheduled if necessary.
Sincer
Thom.s J. Qui ey
Clerk
Board Member Approval: 1
Signature Date
ELGIN POLICE PENSION FUND
151 Douglas Ave
Elgin, IL 60120
INVESTMENT COMMITTEE MEETING NOTICE
September 24, 2012
The ELGIN POLICE PENSION FUND, Board of Trustees announces that
an Investment Committee will be holding a meeting on September 27, 2012
at 3:00 p.m. The meeting will be held at City Treasurer's Office 150 Dexter
Court Elgin, IL 60120
Agenda:
Tele-conference with Marquette Associates.
Discuss the Funds current financial status.
Discuss/recommend any changes to the Funds allocations and re-
balance if necessary.
Set next meeting date.
Sincerely,
T omas.r. Quigle
Clerk
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ELGIN POLICE PENSION FUND
151 Douglas Ave
Elgin, IL 60120
MEETING NOTICE
October 9, 2012
The ELGIN POLICE PENSION FUND, Board of Trustees will be holding a regular
quarterly meeting on Wednesday, October 17, 2012 A 1:30 p.m. The meeting will be
held at the Elgin Law Enforcement Facility at 151 Douglas Ave. Elgin, Illinois in the
North Lobby Community Room.
Agenda:
Call to Order:
Minutes of the July 18, 2012.
Treasurer's Report:
A. 3rd Quarter 2012 Executive Summary.
B. International Small Cap Search.
C. Bill Yocius of MVT presentation.
Expenses:
Deaths: (2) A. Raymond E. Welch passed away August 24, 2012.
1. Widow's Application from Vera Welch.
B. Edward K. Christ #12 passed away on September 6, 2012.
Retirements: (1) Officer Clenest Gant #158 retired July 15, 2012.
Disabilities: (0)
Resignations: (0)
Terminations: (0)
Refunds: (0)
New Hires: (1) Joshua S. Miller #389 was hired on September 24, 2012 as a Probationary
Police Officer.
Portability: (1) Andrew Houghton was in the Park Ridge Police Pension Fund. Total time
being transferred is 4 years and 3 months. Total Funds transferred $63,592.16.
i •
IMRF Buy Back: (1) Ricky Demierre paid final payment $3,878.72 (Total Payment
$25,438.10). He is transferring from IMRF 3 years and 5 months.
Miscellaneous:
a. IRS notice dated August 6, 2012 & Fund's Response and follow-up letters.
b. DOI The Siren Bulletin on New Actuarial Services.
c. Letter from Collins & Radja about new file retention policy.
d. Letters from BMO Harris Bank for signatures.
e. Informational request from Mr. Cziryak of the Financial Investment News for the
Meeting Minutes from January 1, 2012 — July 1, 2012.
f. FOIA from Center for Tax and Budget Accountability (CTBA), Ms. Amanda Kass.
g. Investment Committee Minutes for September 6, 2012 and Sept 27, 2012.
h. Clerk's Pay Increase Request.
i. Training Information for IPPAC Holiday Seminar December 7, 2012.
j. Letter to active members about making sure their contributions are up to date.
k. Ullico letter reference change in carrier, nonrenewal of policy and new application
regarding Fiduciary Liability coverage for the Board.
1. Officer Elizabeth Copher and Officer Thomas Quigley Annual Exams.
m. 2013 Quarterly Meeting Dates.
n. Should any Executive Session Minutes be released?
o. Miscellaneous correspondences.
1. Lauterbach and Amen monthly reports (May 2012 —August 2012).
2. Kayne Anderson quarterly reports.
3. Mitchell, Vaught & Taylor Insights and Outlook.
4. Tocqueville Asset Management monthly reports.
Executive Session:
A. Dependent's Classification.
B. Almeida Annual Exam.
Adjournment:
Sincerely,
Thomas J. Quigley
Clerk
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The Minutes of the Quarterly Meeting of the Elgin Police Pension Fund,Board of Trustees,
rk October 17, 2012. Present at the meeting was President James Lamkin,Vice President Robert
Christ, Trustee Robert O'Connor,Asst. Secretary James Roscher, Chief Financial Officer Colleen
Lavery,Attorney Cary Collins, Mike Piotrowski of Marquette Associates and Clerk Thomas
Quigley.
Absent: Secretary Chris Troiola
Guests: Bill Yocius &James Nowicki of MVT and Tom Salemy of Marquette Associates,
The meeting was call to order at 1:37 p.m. by Vice President Christ.
Minutes of July 18, 2012 meeting were approved on a motion by Roscher, seconded by
O'Connor. Motion approved.
Treasurer's Report:
(1) Mike Piotrowski presented the 3rd Quarter 2012 Executive Summary. The Fund is
performing well, as of Sept 30, 2012 the Fund value is$63.9 million. The Fund is up 7.7%
YTD and 7.4%for a ten year average. The Equity exposure is good, and Corporate Bonds are
starting to take hold. JP Morgan Chase is at the max of 10%, while MVT is around 5.5%.
As the time goes on the ability for the Fund to make money will get harder. Mike wants to
bring to the Board some options as to how to improve the rate of returns on investments in
the future. There is a 10%area that the Fund can invest in as 2013 comes in. This means
moving some assets to an increased investment risk portfolio. Mike will present the options
at future meetings.
(2) Tom Salemy went over the search for a new International Small-Cap Fund Manager. He
provided the Board with a copy of the search in Exhibit II of the Executive Summary. He
said this search came about due to the poor performance of DFA Int'l SCV. He has 5 Fund
Managers listed. There Fund Managers are as follows.
a. Columbia Wanger
b. DFA lnt'l SCC
c. Franklin
d. Templeton
e. T. Rowe Price
Marquette Associates are recommending that the Board hold off on making a decision right
now. It appears that DFA Int'l SCV is turning around. It has outperformed the benchmark
the last quarter and has potential to move higher. However, Marquette is also saying that the
Board may want to review the two Funds that they are recommending just in case the need
to terminate DFA, Int'l SCV arises. Marquette is recommending that the Board consider the
two companies of Columbia Wanger and Templeton. The other on the list also perform well
as these two,however these two have a lower fee compared to the other 3 funds. Both
Columbia Wanger and Templeton have about 20%in emerging markets exposure which
DFA Int'l SCV does not. Both Columbia Wanger and Templeton do a good job of
protecting the assets when the market goes down compared to DFA Int'l SCV.
(3) The Fund Managers are performing well except for 2 funds. Dimensional Fund Advisors
Int'l SCV is still on alert due to performance issues but look to be poised to improve in late
2012. Tocqueville Asset Management is also on alert due to under performance over the past
year and will be monitored.
Page 1
•
(4) Mike Piotrowski is asking to re-balance the Fund as follows. He wants to take$700,000.00
from Cash and take another $800,000.00 from Kayne Anderson Rudnick for a total of
$1,500,000.00. This will then be distributed between the 2 fixed managers MVT and JP
Morgan. A motion was made by Christ to authorize the above transaction, seconded by
Roscher. Motion approved by roll call vote 4 yeas 0 no.
(5) Bill Yocius spoke of how the Fund was performing under Mitchell,Vaught and Taylor. The
Fund is doing well. It is still a very difficult environment to make money due to the
economic pressure in the fixed income sector. But he says MVT is still making a profitable
return for the Fund. They are keeping short maturity times on the bonds they purchase to be
able to provide the best returns possible in this climate. MVT is about 5.5%invested in
Corporate Bonds. If the chances appear to go up to 10% then they will reach that level.
(6) A motion to accept Treasurers Report was made by Christ, seconded by Roscher. Motion
approved.
(7) There was a motion to approve all trades and transactions of monies since last meeting up to
this meeting as reported. Motion made by Christ, seconded by Roscher. Motion approved by
roll call vote 4 yes–0 no. This is subject to approval by City Treasurer Lavery.
Expenses: The following expenses were approved as submitted on a motion by Christ, seconded
by Roscher. Motion approved by roll call vote.
Buffalo Grove Orthopaedic Assoc Copher Annual Exam $850.00
Cary Collins Inv# 5866 Admin Services—June 2012 $800.00
5872 Admin Services—July 2012 $800.00
5875 Admin Services—August 2012 $800.00
5892 Retainer October–December 2012 $1,250.00
5930 Admin Services—September 2012 $800.00
5931 Scanning Services—September 2012 $120.00
IPPAC 706 Sept 4-5 2012 Training Sessions $1,125.00
JP Morgan 20120630-9174-A 2nd Qtr Fee 2012 $10,094.14
Kayne Anderson Rudnick Inv# 10151048 2nd Quarter Fee 2012 $13,862.00
Lauterbach &Amen Inv#26920 Fees May 2012 $1,275.00
27315 Fees June 2012 $1,275.00
27746 Fees July 2012 $1,275.00
28305 Fees August 2012 $1,275.00
Marquette Associates Inv# 120916 Fees Sept 1 –Nov 30, 2012 $8,750.00
120917 Fees Fiduciary Services Sept 1-Nov 30,2012 $2,500.00
Mitchell,Vaught &Taylor 3rd Q 2012 Fee $9,107.00
Tom Quigley Postage reimburse $76.76
Tocqueville Fees 2nd Quarter 2012 $10,301.00
The Board approved the monthly pension check payouts as noted in meeting notes.
Deaths: (2)Raymond E. Welch passed away on August 24, 2012. He is survived by his wife Vera
Welch. She made application to the Fund for Survivor Benefits. The monthly benefit for Ms.
Vera Welch will be$16,610.88 per year or$1,384.24 a month. The Board approved her
application on a motion by Christ, seconded by Roscher. Motion approved.
Edward K. Christ# 12 passed away on September 6, 2012. There is no surviving dependent so the
pension benefit terminates per Illinois Pension Code.
Retirements: (1) Officer C J Gant#158 retired on August 24,2012. The effective date of
retirement will be July 15, 2012 since he had not been paid since that date. The Board after a
discussion approved his request to be able to re-pay 18 days worth of creditable service time so he
would have 23 total years of creditable service. The Board allowed this after the Board's attorney
Cary Collins said that this was written into the State Statute that if time was lost due to an injury
then the Board could allow Officer Gant to re-pay for those days that he was out due to an injury.
Lauterbach and Amen had figured the amount of money needed to be repaid for those days at
$460.98. Officer Gant tendered a check in that amount the day before he retired. The Board has
authorized that his pension benefit be calculated at 23 years of creditable service. This will be
done at the next meeting. Motion made by Roscher to approve the 23 years of creditable service to
Officer Gant, seconded by Christ. Motion approved.
Disabilities: (0)
Resignations: (0)
Terminations: (0)
Refunds: (0)
New Hires: (1)Joshua S. Miller#389 was hired on September 24, 2012 as a probationary Police
Officer. He has made application to be admitted into the Pension Fund as a TIER IL Christ made
a motion to approve Miller's application into the Fund,seconded by Roscher. Motion approved.
Portability of Creditable Service: (1)Andrew J.Houghton#384 applied for Portability from
Park Ridge Police Pension Fund. He served a total of 4 years and 3 months (Jan. 7,2008 —April'
7, 2012) in Park Ridge. The Park Ridge Police Pension Fund transferred$63,592.16 which
included Houghton's contributions and Park Ridge contributions and 6%interest on the total
contributions. The Actuary for the Elgin Police Pension Fund calculated the true cost of
Houghton's Portability. Christ made a motion to accept the Portability transfer of 4 years and 3
months which was seconded by Roscher. Motion approved 4 yeas—0 no.
IMRF Buy Back: (1)Ricky A. Demierre applied to transfer 3 years and 5 months from the Illinois
Municipal Retirement Fund to the Elgin Police Pension Fund. He presented the Fund with a final
pay off amount of$3,878.72. Over the course of paying for his IMRF Buy Back Bennett has paid
the Fund a total of$25,438.10. This includes $21,940.98 in principle payments and another
$3,332.75 in interest from when he first started the process 4 years ago. The amount transferred
from IMRF was$21,909.58. The combined total amount of the transfer is $47,347.68. Christ
made a motion to approve the transfer of 3 years and 5 months of creditable service time from
IMRF to the Elgin Police Pension Fund, seconded by Roscher. Motion approved 4 yeas—0 no.
Public Act 096-1260--Military Buy Back: (0)
Miscellaneous:
a. The Board reviewed the letter sent by the IRS dated August 6,2012 and the Fund's response as
well as follow-up letters. The Board believes the IRS has made an error and combined another
945 Form with the Funds. The IRS is still looking into the matter. The Fund will be waiting
for their reply before taking any further action.
b. The Board reviewed the Siren as to how the DOI will be implementing the New Actuarial
Services.
Page 3
c. The Board reviewed the letter from Collins and Radja pertaining to their new file retention
policy.
d. The Board will have the Secretary Troiola and Asst. Secretary Roscher sign the BMO Harris
Bank new account forms. The Board addressed again that the only two authorized to open
and/or close accounts would be the President Jim Lamkin or the CFO Colleen Lavery.
Lauterbach and Amen stated that they would implement internal controls to ensure that this
would occur.
e. The Board reviewed the request and response to Mr. Cziryak from the Financial Investment
News.
f. The Board reviewed the FOIA request and response to Ms. Kass from the Center for Tax and
Budget Accountability(CTBA).
g. The Board review the minutes from the Investment Committee meets on September 6,2012
and September 27,2012.
h. The Board reviewed the request to increase the Clerk's pay. The Board had a discussion about
the amount of increase and the reasons for the increase. This was based on the original pay
scale the Board was looking at back in 2008. Back in 2008 when the Board discussed this they
were allotting$25.00 $35.00 an hour. Lauterbach and Amen was asked how much they
would charge per hour to perform the clerk duties and stated that they would charge$50.00 an
hour. The rate authorized for 2012 is approximately$35.00 an hour based on the average
hours worked by the Clerk over the last 4 %2 years.After the discussion the Board authorized a
payment of$1,260.00 per month for the Clerk's position. Christ made a motion to pay the
Clerk$1,260.00 a month, seconded by Roscher. Motion approved 4 yeas—0 no.
i. The Board reviewed the IPPAC Holiday Seminar on December 7, 2012. President Lamkin
expressed that the Board should take the opportunities to go to these events to keep up to date
on any changes in the Law or any changes that may help the Board serve the members of the
Fund.
j. The Board reviewed the letter sent out to active members stressing the importance to stay
current with their contributions.
k. Ullico Casualty Company contacted the Fund to say that they were not renewing the Fiduciary
Liability Insurance. They went over how Ullico had split,basically there was still Ullico and
then Hudson had formed Euclid. Cary Collins had asked that the amount of assets be checked
before the Board signed with any company. The Fund needs to know if Euclid/Hudson took
any assets with them when they left. Mesirow Financial recommended that the Board stay
with Ullico. CFO Lavery will contact Tim Bowen of Mesirow to get the information on the
funding level of Ullico. If the funding level is acceptable/adequate then the Board will
continue with Ullico as the insurance carrier. This decision was based impart on the coverage
exclusions by Euclid/Hudson and Ullico but also the price. Euclid/Hudson price is $11,445.00
for a year of coverage,while Ullico is$9,049.00 for a year of coverage. The Board approved
the contract with Ullico pending the approval of CFO Lavery findings of the funding level and
the review by Cary Collins. Christ made a motion to approve Ullico as the Fiduciary Insurance
Carrier, seconded by Roscher. Motion approved.
1. The Board reviewed the Physician's Certificates of Disability for Elizabeth Copher and
Thomas Quigley. Both have been found still disabled by the Board's doctors.
m. The Board's regular quarterly meeting dates for 2013 are as follows: January 16, 2013; April
17,2013; July 17,2013 and October 16, 2013. The time is 1:30pm at the North Lobby
Conference Room at the Elgin Police Department on a motion by Christ, seconded by Roscher.
Motion approved.
n. The Board went over the Executive Session Minutes and determined at this time none should
be released on a motion by Christ, seconded by Roscher. Motion approved.
o. The Board reviewed the correspondences in this section.
Page 4
Executive Session:The Board went into Executive Session at 2:45pm for Personnel
Reasons/Potential Litigation on a motion by Christ, seconded by Roscher. Motion approved by a
roll call vote 4 yeas—0 no. The Board came out of Executive Session at 2:56pm on a motion by
Christ, seconded by Roscher. Motion Approved. No formal/final actions were taken during the
Executive Session.
With no further business the meeting was adjourned by President Lamkin at 2:59 p.m. on motion
by Christ, second by Roscher. Motion approved.
The next meeting will be held on January 16, 2013 (U7, 1:30 p.m. The meeting location
will be The Elgin Police Law Enforcement Facility, 151 Douglas Avenue Elgin, IL 60120.
Sincere
Thomas J. Quigley
Clerk
Board Member Approval: I -------- 5(5 t4AJ
ignature Title
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Page 5
ELGIN POLICE PENSION FUND
151 Douglas Ave
Elgin, IL 60120
INVESTMENT COMMITTEE MEETING NOTICE
November 20, 2012
The ELGIN POLICE PENSION FUND, Board of Trustees announces that
an Investment Committee will be holding a meeting on November 28, 2012
at 3 p.m. The meeting will be held at City Treasurer's Office 150 Dexter
Court Elgin, IL 60120
Agenda:
Tele-conference with Marquette Associates.
Discuss the Funds current financial status.
Discuss/recommend any changes to the Funds allocations and re-
balance if necessary.
Set next meeting date.
Sincerely,
("Tie 4 0
ho' as J. I uigley
CIerk
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Elgin Police Pension Fund
151 Douglas Avenue
Elgin, IL 60120
Minutes of the monthly meeting of the Elgin Police Pension Fund, Investment Committee,held
on November 28, 2012. Present at the meeting(tele-conference) were Vice President Robert
Christ, Clerk Thomas Quigley and Mike Piotrowski of Marquette Associates.
Absent: Chief Financial Officer Colleen Lavery
Guests: None.
The meeting was call to order at 3:00 p.m.by Vice President Christ.
Treasurers Report: Mike Piotrowski went over the October 31, 2012 Flash Report. A copy of
this report is attached to the minutes.
The Fund is still doing well for the year. The Fund is up approximately 7%for the year. The
domestic investments for October 2012 were done 1.8%and pretty flat for November 2012. The
bonds were up around .03% and the International Funds were up .08%. Over all for October and
November the Fund was down just .07%. The Fund has performed well over the last 4 years at
9%and over 10 years the Fund is up over 7%.
JP Morgan is performing better then Mitchell,Vaught and Taylor(MVT). This is due to JP
Morgan having more exposure to Corporate Bonds. The difference is about 5%between the two
firms. Mike may ask the Board at the next meeting to allow JP Morgan to increase the Corporate
Bond limit to the deficit that MVT has not used up to a total of 10%in Corporate Bonds.
Dodge& Cox and EuroPacific are performing satisfactorily. DFA is starting to improve, but is
still being monitored for performance. In Domestic Small-Caps, the problem is with
Tocqueville. Marquette met with Tocqueville in late September. 2012 to discuss their
performance issues. Just recently Marquette learned that Tocqueville has lost a$400 million
account,this will impact the future performance. Mike will come to the Board in January 2013
to determine if the Fund may have to part with Tocqueville. The Fund has been with them many
years now but they do have problems and it is affecting their performance. The money in
Tocqueville could be easily shifted to Kayne Anderson Rudnick or another Small-Cap Fund.
Mike will provide a presentation to the Board at the in January 16, 2013 meeting,this will cover
the need to increase exposure to Corporate Bonds to increase returns in this environment. The
Board may want to look into Alternative Asset Classes(real estate is one example),up to 10%
more than the current 55%it has in equities. Cary Collins would have to give his opinion to the
Board as to the benefit and any legal issues in making this decision.
r
At this time the"Fiscal Cliff'is still an unknown and Marquette is moving conservatively as far
as investments. Until it becomes more clear as to which way the President and Congress may
decide to go Marquette will prepared for both out comes. Since the Fund does have the
Fiduciary Services Clause established with Marquette, this should assist in making moves as this
situation unfolds as January 1, 2013 approaches.
The next meeting date will be set after the regular quarterly meeting set for January 16,2013 at
1:30 p.m. (unless a Special Meeting is needed and called by President Larnkin).
With no further business to discuss,the meeting was adjourned by Vice President Christ at
3:21 pm.
Si�ly,
Thomas J. Quigley
Clerk
Board Member Approval: / /& ,
Signature Date
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I,'MarquetteAssociates
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x #211
Elgin Police Pension Fund
Elgin Police
Pension Fund
r Flash Report
October 31,2012
flik Total Fund Composite Market Values
Market Value:$63.5 Million and 100.0%of Fund
Ending October 31,2012
Asset Class Market Value 1 Mo Net %of Policy,o Policy Difference
($) Cash Flows($) Portfolio ($)
Total Fund Composite 63,470,771 .18,880; 100,0 100.9. `.. 0
Fled Income Coinpoaite 29,320,883 1,309,688` 461 45.0 759,036
Mitchell,Vaught&Taylor Int.Fixed Income 15,011,151 404,030 23.7 22.5 730,228
JPMorgan Int,Fixed Income 14,309,732 905,657 22.5 22.5 28,809
U.S.Equi,—Composite 24,994,498 -801,847 39.4 40.0 .393,812
Vanguard Insd.Index Fund Large-Cap Core 9,596,632 0 15.1 15.0 76,015
Vanguard Mid Cap Index Fund Mid-Cap Core 6,600,994 0 10.4 10.0 253,917
Tocqueville Asset Management Small-Cap Value 3,999,819 -4,204 6.3 7.5 -760,489
Kayne Anderson Rudnick Small-Cap Core 4,797,053 -804,974 7.6 7.5 36,745
Non-U.S,Equity Composite 8,634,083 0 13,6 15.0 •886,533
Non-U.S.Large-Cap
Dodge&Cox Fund Value 3,270,652 0 5.2 5.0 97,114
EuroPacific Growth Fund Nan-U.S.Large-Cap 3,105,721 0 4.9 5,0 -67,818
Growth
DFA Int.SCV Fund Non-U.S.Small-Cap 2,257,710 0 3.6 5.0 -915,828
Value
Cash Equivalents Composite 521,308 •519,390 0.8 0,0 521,308
r Cash Account Cash&Equivalents 51,960 -570 0.1 0.0 51,960
Checking Account Checking 469,330 -518,820 0.7 0.0 469,330
Money Market Account Cash&Equivalents 18 0 0.0 0.0 18
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{ViarquetteAssociates Marquette Associates,Inc. 1
Total Fund Composite Annualized Performance(Gross of Fees)
Market Value:$63.5 Million and 100.0%of Fund
Ending October 31,2012
1 Mo YTD 1 Yr 2 Yrs 3 Yrs 4 Yrs 5 Yrs 7 Yrs 10 Yrs
Total Fund Composite -0.7 7.0 6.4 4.9 7.4 9.0 3.6 5.8 7.1
Policy Benchmark -0.6 7,3 6.8 5.1 7.5 8.7 11 5.3 6,9
Actuarial Rate of Return 0.6 6.4 7.8 7.9 7.9 7.9 8,0 8.0 8.1
Fixed Income Composite : -0.1 2:2 3.0 3.0 4.2 5.1 s 5.2 5.2 [ 4.3
Barclays lnt Govt. -0.2 1.5 2.4 2.8 4.0 4.5 5.0 5.1 4.2
U.S.Equity Composite -1.9 11.4 10.6 9.8 14.0 14.2 2.1 5.9 9,7
Dow Jones U.S.Total Stock Market -1.8 14.1 14.7 11.3 13.8 13.0 0.8 4.8 7.8
Non-U.S.Equity Composite 0.8 13.0 6.9 -0.1 4.1 11.8 -3.7 3.5 9.4
MSC!ACM ex USA Gross 0.4 11.3 4.5 0.0 4.2 11.1 -4.6 4.4 9.8
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2 Marquette Associates,Inc. PMarquetteAssociates
•
Investment Manager Annualized Performance (Gross of Fees)
Market Value:$63.5 Million and 100.0%of Fund
Ending October 31,2012
1 Mo YTD 1 Yr 2 Yrs 3 Yrs 4 Yrs 5 Yrs 7 Yrs 10 Yrs
t p
Policy Benchmark -0.6 7.3 6.8 5.1 7.5 8.7 3.1 5.3 6.9
Actuarial Rate of Return 0.6 6,4 7.8 7.9 7.9 7.9 8.0 8.0 8.1
',c ''t,1 °iA{j°e`}'t�f. ,. .✓" '.
Barclays lnt Govt. -0.2 1.5 2.4 2.8 4.0 4.5 5.0 5.1 4.2
Mitchell,Vaught 1$Taylor ;-0,1 2.0 2.9 2.9 4.3 5,3 5.2' 5.1 4.2
Barclays Int Govt. -0.2 1.5 2.4 2.8 4.0 4.5 5.0 5.1 4.2
JP.Morgan
0:0 2.5 ' 3.2 12 4,2 5.0 5.3 53 ; 4,4
Barclays trrt Govt. -0.2 1.5 2.4 2.8 4.0 4.5 5.0 5.1 4.2
Dow Jones U.S.Total Stock Market -1.8 14.1 14.7 11.3 13 8 13.0 0.8 4.8 7.8
Vanguard Intl.Index Fund -1,9 14.3 15.2 11.6 13.2 12.4 0.4 4.5
S&P 500 -1.8 14.3 15.2 11.6 13.2 12.3 0.4 4.5 6,9
Vanguard Mid Cap Index Fund -1.2 11.5 ; 10.5 9.2 15.2 16.4 1,3 -
Russell MidCap -1.0 12.8 12.1 10.0 15.6 16.4 1.7 5.7 10.5
MSCI US Mid Cap 450 Gross -1.1 11.5 10.5 9.3 15 3 16.5 1.3 5.4 10.3
Tocqueville Asset Management -4,6 5,3 1,7 -1.5 6.0 7.9 -1:4 4,0 10:0
Russell2000 Value -1.3 12.9 14.5 8.9 13.8 10.7 0.9 19 9.4
KayneAnderson'Rudnick .0,5 10.7 10,8 15,5 19,1 18.7 6.1" 8.3 11;9'
Russell 2000 -2.2 11.8 12.1 9.4 14.8 12.7 1.2 4.8 9.6
MSCI ACWI ex USA Gross 0.4 11.3 4.5 0.0 4.2 11.1 4.6 4.4 9.8
Dodge&Cox Fund 1,5 127 63 -1.1 4.3 1t7 =4.1 - -
MSC!ACW1 ex USA Gross 0.4 11.3 4.5 0.0 4.2 11.1 -4.6 4.4 9.8
EuroPacific Growth Fund 0,0 12,9' 7,4 1 4.1 10.7 -3.3 5.0 97
MSCI ACWI ex USA Gross 0.4 11.3 4.5 0.0 4.2 11.1 -4.6 4.4 9.8
DFAInt.SCVFund 0,9 13,5 6.9 1.1 4.0 12.3 -4.3 - -
MSCI EAFE Small Cap Gross 0.9 14.5 6.3 2.0 6.0 15.5 -3.6 3 3 11.9
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IPMarquetteAssociates l Marquette Associates,Inc. 3
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Market Environment
October 2012
Table of Contents
Section
U.S.Economy 1
Fixed Income 2
U.S.Equity 3
Non-U.S.Equity 4
Hedge Fund... 5
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U.S.Economy
The unemployment rate rose by 0.1% in October to 7.9%. The primary source of this increase was from 578K
individuals entering the labor force. Both the labor force participation rate and employment-population ratio
increased in October by 0.2% and 0.1%, respectively. The average duration of unemployment lasted for 40.2
weeks and broad unemployment(U6)fell by 0.1%to 14.6%. The non-farm payroll, the net number of non-farm
jobs added or subtracted per month, increased by 171K in October. Year-to-date, employment growth has
averaged 153K per month. Employment gains during October were largest in professional and business services
(51K), retail trade (36K), health care (31K), and leisure and hospitality (28K). Non-farm payroll employment for
August and September were revised upward for an increase of 84K jobs.
The Consumer Price Index (CPI-U) increased 0.6% in September. Within the CPI-U,food increased by 0.1%and
energy increased by 4.5%. A 7.0%increase in the gasoline index accounted for most of the increase in the all items
index. In the last twelve months,the CPI-U increased by 2.0%with food increasing by 1.6%and energy increasing
by 2.3%. Core CPI increased by 0.1%in September and has a year-over-year increase of 2.0%. The Producer Price
Index(PPI) increased by 1.1%in September while Core PPI was unchanged. Within PPI, finished consumer foods
increased by 0.2%and finished energy increased by 4.7%. The gasoline index was the main driver of September's
PPI increase. As of September,PPI had a year-over-year increase of 2.1%.
Unemployment Data:Monthly Non-Farm Payroll Change and Unemployment Rate
350 - 9.1%
300 8.9%
250 8.7% m
3
f
50 I I is 7.9%
0 7.7%
Oct-11 Dec-11 Feb-12 Apr-12 Jun-12 Aug-12 Oct-12
Monthly Non-Farm Payroll Change mamma,Un employment Rate
U.S.Inflation Data:Consumer Price Index&Producer Price Index(Year over Year)
12%
10%
g, a%
b%
frea4 4114 010.44'
4% .
2%
a 0%
-4%
-6%
-8%
Sep-05 Sep-06 Sep-07 Sep-08 Sep-09 Sep-10 Sep-11 Sep-12
Consumer Price Index(Seasonally Adjusted) Producer Price Index:Finished Goods
Source:Bureau of Economic Analysis,Bureau of Labor Statistics
1 I Market Environment October, 2012 MarquetteAssociates
Fixed Income
Interest rates inched upwards in October,closing the month up 9 bps at 1.74%. Breakeven inflation rates also rose
for the month, helping the performance of TIPS (+0.9%) vs. other government securities (-0.2%). The ten-year
breakeven inflation rate was 2.5%at the end of October. Investment grade credit(+1.1%), high yield(+0.9%),and
CMBS (+0.6%)benefited from spread tightening in October. Spreads compressed 16 bps, 8 bps, and 32 bps for
investment grade credit, high yield bonds, and CMBS, respectively. Spreads in all three sectors are now below
historical averages.
Benchmark Annualized Performance:Select Fixed Income Indices
Month Qtr. YTD 1 Year 3 Year 5 Year 10 Year
Broad Market Indices
BarCap Aggregate 0.2% 0.4% 4.2% 5.3% 6.1% 6.4% 5.4%
BarCap Gov./Credit 0.4% 0.5% 4.8% 5.9% 6.5% 6.5% 5.5%
BarCap Long Gov./Credit 1.2% -0.1% 9.6% 13.1% 13.2% 10.8% 8.5%
Intermediate Indices
BarCap Int,Gov./Credit 0.1% 0.6% 3.7% 4.2% 5.1% 5.6% 4.8%
Government Only Indices
BarCap Long Gov. -0.1% -3.1% 4.2% 10.4% 12.5% 10.8% 8.0%
BarCap Government -0.2% -0.5% 1.9% 3.5% 5.1% 5.8% 4.8%
BarCap Int.Government -0.2% -0.1% 1.5% 2.4% 4.0% 5.0% 4.2%
BarCap 1-3 Year Gov. -0.1% 0.0% 0.4% 0.5% 1.4% 2.8% 2.9%
91 Day T-Bill 0.0% 0.0% 0.1% 0.1% 0.2% 0.8% 1.9%
BarCap U.S.TIPS 0.9% 1.1% 7.2% 8.0% 9.2% 7.9% 7.0%
Corporate Bond Indices
BarCap U.S.Credit 1.1% 1.9% 9.5% 9.7% 8.9% 7.9% 6.7%
BarCap High Yield 0.9% 3.5% 13.1% 13.6% 12.6% 9.4% 11.2%
CSFB Leveraged Loan Index 0.4% 2.5% 8.2% 8.3% 7,7% 4.4% 5.8%
Securitized Bond Indices
BarCap Mortgage -0.2% 0.2% 2.6% 3.5% 4.7% 6.1% 5.2%
ABS 0,0% 0.5% 3.4% 3.8% 4.9% 4.4% 4.0%
CMBS 0.6% 2.7% 8.9% 10.7% 11.9% 7.7% 5.9%
Yield Curve:Change Over Time
4%
3°% M►Oct-12
`
2% Oct-11
immowSep-12
1%
0°%
0.0 0.5 2.0 3.0 5.0 10.0 30.0
Years
Source.Barclays
II
IV MarguetteAssociates Market Environment October, 2012 1 2
U.S. Equity
In October, stocks retreated from highs after an extended rally. The S&P 500 lost 1.8%in the month, but retained
its double digit positive return year-to-date (+14.3%). The pullback appeared most closely attributable to weak
earnings guidance. While earnings of those companies reporting early in the cycle remained strong, many
expressed concern that future revenues would be increasingly impacted by the deteriorating economic picture in
Europe. Additionally, by October, the initial stock market exuberance generated by the announcement of the
Fed's 0E3 began to fade. Many portfolio managers and economists continued to call into question the efficacy of
the program, questioning its influence on long-term interest rates and ability to stimulate economic growth. Still,
expectations that 0E3 would increase net profits for banks in the near-term helped push Financials (+1.9%)to the
best monthly return of all S&P 500 sectors. Most sectors were negative, however, with Information Technology(-
6.7%) taking the brunt of the pullback. On average, growth companies underperformed value in October as
investors pared back on risky assets.
Equity Returns:Select Index Performance
Month Qtr. YTD 1 Year 3 Year 5 Year 10 Year
Broad Market Indices
Dow Jones(13,096.46) -2.4% 1.3% 9.5% 12.6% 13.5% 1.6% 7.2%
Wilshire 5000 -1.8% 3.2% 13.9% 14.6% 13,5% 0.6% 7.7%
Russell3000 -1.7% 3.4% 14.1% 14.7% 13.6% 0.6% 7.5%
Large-Cap Market Indices
S&P 500(1,412.16) -1.8% 3.0% 14.3% 15.2% 13.2% 0.4% 6.9%
Russell 1000 -1.7% 3.3% 143% 15.0% 13.5% 0.5% 7.3%
Russell 1000 Value -0.5% 4.9% 15.2% 16.9% 12.8% -1.0% 7.3%
Russell 1000 Growth -2-9% 1.6% 13.4% 13.0% 14,1% 1.9% 7.1%
Mid-Cap Market Indices
Russell MidCap -1.0% 4.3% 12.8% 12.1% 15.6% 1.7% 10.5%
Russell MidCap Value 0.1% 5.3% 14.2% 15.0% 15.8% 1.7% 10.6%
Russell MidCap Growth -2.3% 3.1% 11.3% 9.1% 15.4% 1.6% 10.0%
Small-Cap Market Indices
Russell 2000 -2.2% 4.4% 11.8% 12.1% 14.8% 1.2% 9.6%
Russell 2000 Value -1.3% 5.4% 12.9% 14,5% 13.8% 0.9% 9.4%
Russell 2000 Growth -3.1% 3.4% 10.5% 9.7% 15.7% 1.4% 9.7%
Operating Earnings Ratio,S&P 500
40
35
30
25
20 ,
LU 15
a.
10
5
0 �
Dec-89 Dec-92 Dec-95 Dec-98 Dec-01 Dec-04 Dec-07 Dec-10 Dec-13
Price-to-Operating Earnings ..."1"Estimated P/E Ratio svass••23+Yr.Avg.
Source:Encorr,Standard&Poors
3 Market Environment October, 2012 TMarquetteAssociates
Non-U.S. Equity
October was a positive month for the majority of international equity markets as the MSCI ACWI ex.U.S.IMI index
returned 0.4%, bringing the year-to-date return to 11.6%. There was very little news surrounding Europe this
month, leading investors to focus on programs (i.e. Outright Monetary Transactions Program) enacted to help
curtail the European debt crisis. International value stocks(1.3%) outperformed growth stocks (0.4%)for the third
month in a row.At the regional level, Pacific ex.Japan was the best performer(1.8%),due to the region's proximity
to China and speculation that China's economy appears to be rebounding.The Japanese market depreciated the
most(-1.9%)as investors were concerned that the government has yet to get the economy back on track since the
devastating earthquake in March of 2011.
Non-U.S.Equity Performance:Select Indices
Month Qtr. YTD 1 Year 3 Year 5 Year 10 Year
MSCI ACWI ex U.S.IMI 0.4% 6.6% 11.6% 4.6% 4.5% -4.4% 10.2%
MSCI ACWI ex U.S. 0.4% 6.4% 11.3% 4.5% 4.2% -4.6% 9.8%
MSCI EAFE(U.S.dollar) 0.8% 6.7% 11.5% 5.1% 3.3% -5.3% 8.2%
MSG EAFE(Local) 1,2% 4.4% 10.9% 8.7% 2.9% -6.0% 4.9%
MSCI EAFE Value 1.3% 8.3% 11.6% 5.1% 1.7% -6.2% 8.7%
MSCI EAFE Growth 0.4% 5.0% 11.3% 5.0% 4.8% -4.6% 7.6%
S&P Global ex U.S.Small Cap 0.3% 8.1% 14.1% 5.5% 6.7% -3.6% 12.9%
S&P Developed ex U.S.Small Cap 0.4% 8.0% 13.1% 5.1% 6.7% -4.1% 11.9%
MSCI Emerging Markets -0.6% 5.1% 11.7% 3.0% 5.7% -3.2% 16.6%
MSCI Frontier Markets -0.7% 5.6% 5.3% 1,0% -0.2% -10.6% 9.0%
Regional Performance:Equity Market Performance by Region
25%
20%
15%
ce
E
5%
0%
-5% � =
-10%
Mth. 1 Year 5Year 10 Year
11 Europe 'Japan R Pacific ex.Japan it EM Latin America EM Europe &ME 111 EM Asia
Source.Encorr
MarquetteAssociates Market Environment October, 2012 ( 4
Hedge Fund
Most hedge fund strategies generated modest gains in October. Positive performance from international equity
markets and corporate credit helped to offset a modest pullback in the U.S. equity market. Distressed managers
had a good month as the workout from the Lehman bankruptcy continues to create opportunities. Asset backed
securities had another good month driving returns in the relative value strategy. While some managers have begun
to reduce their exposure to credit sensitive RMBS(one of the best performing trades of 2012)this continues to be a
very popular investment for many hedge funds. Global macro managers struggled as commodity prices
experienced a significant pullback and the U.S.dollar rallied against the world's other major currencies.
Hedge Fund Performance:HER strategy index returns
Month Qtr. YTD 1 Year 3 Year 5 Year 10 Year
HFRX Global -0.5% 0.4% 2.2% 0.8% 0.0% -3.7% 1.7%
HFRX Hedged Equity 0.4% 2.1% 3.8% 1.6% -2.0% -5.8% 0.8%
HFRI Composite -0.5% 1.7% 4.4% 2.5% 3.9% 0.8% 6.7%
HFRI Fund of Funds -0.5% 1.2% 3.0% 1.4% 1.4% -2.3% 3.7%
HFRI Convertible Arbitrage -0.6% 1.1% 6.0% 5.1% 5.8% 3.6% 4.9%
HFRI Equity Hedge 0.2% 3.4% 5.7% 2.6% 3.5% -0.9% 5.8%
HFRI Event-Driven 0.2% 2.7% 5.5% 4.0% 5,8% 1.6% 8.3%
HFRI Macro -2.2% -2.4% -1.3% -2.2% 1.0% 2.3% 6.5%
HFRI Merger Arbitrage -0.5% 0.1% 1.2% 1.5% 3.0% 2.2% 5.3%
HFRI Relative Value 0.6% 2.9% 8.6% 8.3% 7.6% 4.6% 6.7%
Ten Year Risk Return:Hedge Fund Returns vs. Public Markets
9%
8% • Event-Driven p MSCI EAFE
7 Relative Value Global Macro • S&P 500
■
6% • Equity Hedge
5%
ergerArb •A BarCap Agg
4% A FoF
3%
2%
HFRX Global
1%
0%
0% 5% 10% 15% 20% 25%
Standard Deviation
Source:HFR,Bloomberg
RI
5 Market Environment October, 2012 I,MarquetteAssociates
r
PREPARED BY MARQUETTE ASSOCIATES
180 North LaSalle St,Ste 3500,Chicago,Illinois 60601 PHONE 312-527-5500 wee marquetteassociates.com
The sources of information used in this report are believed to be reliable. Marquette has not independently
verified all of the information and its accuracy cannot be guaranteed. Opinions, estimates, projections and
comments on financial market trends constitute our judgment and are subject to change without notice.
References to specific securities are for illustrative purposes only and do not constitute recommendations. Past
performance does not guarantee future results.
About Marquette Associates
Marquette Associates is an independent investment consulting firm that helps institutions guide investment
programs with a focused three-point approach and carefully researched advice. For over 25 years Marquette has
served this mission in close collaboration with clients — enabling institutions to be more effective investment
stewards.Marquette is a completely independent and 100%employee-owned consultancy founded with the sole
purpose of advising institutions. For more information,please visit www.marquetteassociates.com.
r
MarquetteAssociates Market Environment October, 2012 6
ELGIN POLICE PENSION FUND
151 Douglas Ave
Elgin, IL 60120
November 1, 2012
The following are the 2013 quarterly meeting dates and times of the
Elgin Police Pension Fund. The meetings will be held at the Elgin Law
Enforcement Facility, 151 Douglas Avenue, Elgin, IL 60120 @ 1:30 p.m.
in the North Lobby Community Room.
r January 16, 2013
April 17, 2013
July 17, 2013
October 16, 2013
Contact Person: Thomas J. Quigley
Clerk
847-289-2744 office
847-812-7399 cell
Email: quigley_t @cityofelgin.org
elk