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Home My WebLink AboutCOMM - Meeting Minutes - 270 - 5-17-2018 - RETIREMENT39 MINUTE BOOK RETIREMENT BOARD WASHINGTON COUNTY, PENNSYLANIA IMR I IMITFn FiRn7Q9Q1 n Minute No. 270 May 17, 2018 The quarterly meeting of the Washington County Retirement Board was held at approximately 10:30 a.m. on Thursday, May 17, 2018, in the Public Meeting Room with the following members being present: Commissioners Diana Irey Vaughan and Harlan Shober, Controller Michael Namie, and Treasurer Francis L. King. Also present: Chief Clerk Cindy Griffin, Secretary Paula Jansante, Solicitor Lynn DeHaven, Director of Finance Joshua Hatfield, concerned citizen Tom Lonich, Barbara Miller representing the Observer Reporter, and Lee Martin, Ph.D. representing Marquette Associates. Commissioner Larry Maggi was absent. Approval of Minutes Mrs. Vaughan entertained a motion to approve Minute No. 267 dated February 15, 2018. The motion was moved by Mr. Namie and seconded by Mr. Shober that the above mentioned minutes be approved as written. No discussion followed. Roll call vote taken: Mr. Namie — yes; Mr. King — yes; Mr. Shober — yes; Mrs. Vaughan — yes. Motion passed unanimously. Mrs. Vaughan entertained a motion to approve Minute No. 268 SP dated March 6, 2018. The motion was moved by Mr. Namie and seconded by Mr. King that the above mentioned minutes be approved as written. No discussion followed. Roll call vote taken: Mr. Namie — yes; Mr. King — yes; Mr. Shober — yes; Mrs. Vaughan — yes. Motion passed unanimously. Public Comment None. Treasurer's Report Mr. King stated that the Retirement Allowance Account was reconciled to zero for the months of January, February, and March 2018. It was moved by Mr. King and seconded by Mr. Namie that the report be approved. No discussion followed. Roll call vote taken: Mr. Namie — yes; Mr. King — yes; Mr. Shober — yes; Mrs. Vaughan — yes. Motion passed unanimously. ON RETIREMENT BOARD IMR I IMITFII FiRn79991 n Retirement Allowance Report MINUTE BOOK WASHINGTON COUNTY, PENNSYLANIA Bank Balance as of January 1, 2018 Add: Deposits to Checking Account Add: Transfers In Add: ACH Credit Add: Other Credits Less: Cancelled Checks Less: Other Debits Less: ACH Debits Bank Balance as of January 31, 2018 Less: Outstanding Checks Less: Retirement Check Run Reconciled Balance as of January 31, 2018 Bank Balance as of February 1, 2018 Add: Deposits to Checking Account Add: ACH Credit Less: Cancelled Checks Less: ACH Debits Less: Funds Transfers Out Bank Balance as of February 28, 2018 Less: Outstanding Checks Less: Retirement Check Run Reconciled Balance as of February 28, 2018 Bank Balance as of March 1, 2018 Add: ACH Credit Add: Other Credits Less: Cancelled Checks Less: ACH Debits Bank Balance as of March 31, 2018 Less: Outstanding Checks Less: Retirement Check Run Reconciled Balance as of March 31, 2018 Requisitions $ 375,358.90 1,336.01 1,000,000.00 234,145.87 580,289.44 (266,025.30) (870,434.16) (705,559.86) $ 349,110.90 (310,991.04) (38,119.86) $ -0- $ 349,110.90 801,379.09 219,163.57 (317,979.50) (79,531.30) (720,340.38) $ 251,802.38 (208,615.33) (43,187.05) $ -0- $ 251,802.38 232,420.02 664,659.69 (192,529.52) (720,305.36) $ 236,047.21 (197,551.76) (38,495.45) $ -0- Mr. Namie stated that requisitions for the months of February, March, and April 2018 totaled $2,694,493.63. L 1 41 MINUTE RETIREMENT BOARD IMR I IMITFII F160799QI n BOOK WASHINGTON COUNTY, PENNSYLANIA It was moved by Mr. Namie and seconded by Mr. Shober that the requisitions be approved. No discussion followed: Roll call vote taken: Mr. Namie — yes; Mr. King — yes; Mr. Shober — yes; Mrs. Vaughan — yes. Motion passed unanimously. Distributions February 2018 Check Payee Amount 1668 Christopher Bury $ 79.53 1669 Shelley R. Knight 79.52 1670 Charles Schwab & Co. as trustee of Michael Aulagne 24,358.56 1671 Wells Fargo as trustee of IRA of Kathleen M. Bali 21,972.48 1672 Amanda Cerciello 2,307.48 1673 Tina Crissman 2,330.54 1674 Gloria Cumer 30,991.89 1675 Tammy Jackson 1,667.50 1676 GCU as trustee of IRA of Misti Kolovich 17,728.57 1677 First National Bank of PA as trustee of IRS of Lauren 4,170.41 Mathews 1678 Constance E. Ringer 5,012.23 1679 Charles Schwab as trustee of IRA of Patrick Aaron 14,498.68 Sisul 1680 Joshua Roberts 4,152.19 1681 Salvatore Vivio 1,275.20 1682 David Zigmond 725.57 1683 Washington County Regular Payroll Escrow Account 21,565.50 1684 Washington County Cash Disbursement Account 48,450.00 Transfer PNC Bank 55,632.97 Transfer Washington County Retirement Account 684,012.54 Total February 2018 Distributions $ 941.011.36 March 2018 Check Payee Amount 1685 Community Bank as trustee of IRA of Marilyn V. Ferito $ 57,203.04 1686 April Hayden 3,454.41 1687 Brigitte Quarture 1,330.17 1688 Trustee of Wells Fargo FBO Derek Scholar 5,658.51 1689 Lisa Scibelli 1,598.25 1690 Cynthia Teaderman 2,882.18 1691 Trustee of Rostraver West Newton ES FBO Brittany Weaver 30,533.22 1692 Jeannie Bruce 4,102.43 42 RETIREMENT BOARD IMR_UM]TFII Fi Rn7Q9QI n MINUTE BOOK WASHINGTON COUNTY, PENNSYLANIA 1693 Washington County Payroll Account 21,619.74 1694 Washington County Cash Disbursement Account 23,800.74 Transfer PNC Bank 47,721.05 Transfer Washington County Retirement Account 697,084.20 Total March 2018 Distributions $ 896.987.94 April 2018 Check Payee Amount 1695 Earl L. Pirt Jr. $ 2,578.32 1696 Joshua Edenhofer 1,736.13 1697 Key Bank as trustee of IRA of Tamie Henry 24,833.33 1698 Fidelity as trustee of IRA of Joshua Kelly 3,613.57 1699 Kala R. Pollagi 3,471.97 1700 John Lindblom 1,846.31 1701 Bridget Lydon 1,235.77 1702 AllanzLife as trustee of IRA of Donna Ruberto 9,467.90 1703 Washington County Regular Payroll Escrow Account 21,267.13 1704 Washington County Cash Disbursement Account 38,501.23 Transfer PNC Bank 47,094.94 Transfer Washington County Retirement Account 700,847.73 Total April 2018 Distributions $ 856.494.33 Treasurer's Report Mr. King noted that the Retirement Allowance Account had also been reconciled for April 2018 but was not included in his original motion. It was moved by Mr. Namie and seconded by Mr. Shober that the Treasurer's Report be amended to include the months of January, February, March, and April 2018. No discussion followed. Roll call vote taken: Mr. Namie — yes; Mr. King — yes; Mr. Shober — yes; Mrs. Vaughan — yes. Motion passed unanimously. Bank Balance as of April 1, 2018 $ 236,047.21 Add: Deposits to Checking Account 2,142.17 Add: ACH Credit 221,614.37 Add: Other Credits 1,632,737.79 Less: Cancelled Checks (250,550.76) Less: ACH Debits (722,889.77) Less: Funds Transfers Out (1,003,469.12) Bank Balance as of April 3.0, 2018 $ 115,631.89 Less: Outstanding Checks (79,191.66) Less: Retirement Check Run (36,440.23) Reconciled Balance as of April 30, 2018 $ Q 43 MINUTE BOOK RETIREMENT BOARD WASHINGTON COUNTY, PENNSYLANIA IMR I IMITFn FiRn7Q9Q1 n Old Business None. New Business Mrs. Vaughan entertained a motion for the ratification of a MOU dated April 2, 2018, for the approval of a request by John Secrist for a disability pension. Mr. Secrist has been approved by the Social Security Administration for disability benefits. His last date of employment was May 7, 2018. The motion to approve was made by Mr. Namie and seconded by Mr. Shober. No discussion followed. Roll call vote taken: Mr. Namie — yes; Mr. King — yes; Mr. Shober — yes; Mrs. Vaughan — yes. Motion passed unanimously. Mrs. Vaughan entertained a motion for the approval of a request by Patricia Maxon to purchase service credit for unpaid workers compensation time from June 14, 2017, to July 31, 2017, in the amount of $1,469.93. The motion to approve was made by Mr. Shober and seconded by Mr. Namie. No discussion followed. Roll call vote taken: Mr. Namie — yes; Mr. King — yes; Mr. Shober — yes; Mrs. Vaughan — yes. Motion passed unanimously. Mrs. Vaughan entertained a motion for the approval of a request by Dianna Shymchyk to purchase service credit for unpaid leave of absence time from June 24, 2016, to August 7, 2016, and August 15, 2016, to September 11, 2016, in the amount of $1,100.17. The motion to approve was made by Mr. Namie and seconded by Mr. King. No discussion followed. Roll call vote taken: Mr. Namie — yes; Mr. King — yes; Mr. Shober — yes; Mrs. Vaughan — yes. Motion passed unanimously. Mrs. Vaughan entertained a motion for the approval of a request by William Scrip to purchase service credit for part-time employment from June 15, 2009, to December 17, 2011, in the amount of $3,961.37. The motion to approve was made by Mr. Namie and seconded by Mr. Shober. No discussion followed. Roll call vote taken: Mr. Namie — yes; Mr. King — yes; Mr. Shober — yes; Mrs. Vaughan — yes. Motion passed unanimously. Mrs. Vaughan entertained a motion for the approval of a request by Darla Mayton to purchase service credit for part-time employment from March 26, 2001, to January 12, 2002, in the amount of $983.03. The motion to approve was made by Mr. King and seconded by Mr. Namie. RETIREMENT BOARD IMR_UNITFn F16070901 n MINUTE BOOK WASHINGTON COUNTY, PENNSYLANIA No discussion followed. Roll call vote taken: Mr. Namie — yes; Mr. King — yes; Mr. Shober — yes; Mrs. Vaughan — yes. Motion passed unanimously. Presentation Marquette Associates — Lee Martin, Ph.D. Mr. Martin began with a brief overview of the market environment stating that although GDP fell slightly in the first quarter of 2018, it is still on an upward trend when looking over the past two years. Corporate earnings are up, with expectations coming in at 3%, the best since 2005. However, the potential exists for a perfect storm in the U.S. with regards to inflation. Unemployment is low, income growth is up and accelerating, yields are continuing to rise, the potential for tariffs is increasing, the U.S. dollar is sliding, and the deficit is growing. Globally, growth in the first quarter was at 3.9%, 100 basis points higher than in the U.S. With the exception of Brazil, everywhere overseas is in expansion mode. The strong returns of the last quarter of 2017 continued through January. When the wage growth and inflation numbers came in at the end of January, however, the market reacted and volatility became a factor that continued through the end of the first quarter. U.S. equities fell 0.6% and international equities fell 2%. The only positive equity performance came from emerging markets. Due to rising interest rates, fixed income also fell, finishing the quarter down 1.5%. Growth, led by big tech, outperformed value once again for the quarter. The County's portfolio ended the quarter at $165.5 million, a loss of a little over $1 million. The largest detractor was the value tilt of the portfolio. Over the past five years, the portfolio has gained $62 million, a return of 8.3% per year. Twin Capital struggled in the quarter but is on benchmark since inception. Vanguard did well with its big tech holdings. Wellington came in at benchmark for the quarter but lagged a bit for the year. On the global side, American Funds continued to do well, adding 260 basis points every year since inception. Due to rising interest rates, Acadian was slightly below benchmark. Dodge & Cox, right on benchmark for the quarter, has added 600 basis points a year since inception. On the real estate side, J.P. Morgan was up 2% for the quarter and up 7.5% for the year. MFS added 40 basis points for the quarter and 100 basis points for the year. As expected, fixed income came in right on benchmark. Looking ahead, the Board's move into timberland and farmland will help hedge against inflation. Mr. Martin discussed the educational material and presentations made at the special meeting of the Retirement Board on May 16, 2018, regarding the hiring of a defensive equity manager and a private infrastructure manager. A motion was made by Mr. Namie to hire Parametric as a defensive equity manager and J.P. Morgan Asset Management as a private infrastructure manager with funding of the asset classes and rebalancing of the portfolio to take place administratively in coordination with Marquette Associates. The motion was seconded by Mr. Shober. 45 J L] u MINUTE BOOK RETIREMENT BOARD WASHINGTON COUNTY, PENNSYLANIA IMR I IMITFn F1607g9g1 n No discussion followed. Roll call vote taken: Mr. Namie — yes; Mr. King — yes; Mr. Shober — yes; Mrs. Vaughan — yes. Motion passed unanimously. With this move, Mr. Martin noted that 11% of the County's portfolio (5% private real estate, 3% timberland/farmland, and 3% private infrastructure) will be held in private real assets which tend to do well at this part of the economic cycle and will also further help to hedge against inflation and provide more diversification to the portfolio. Mr. Martin congratulated the Board for taking the steps necessary to diversify the portfolio, stating that Washington County is well ahead of the rest of the Commonwealth. The Board has taken the time, both inside and outside of the regular quarterly meetings, to do its due diligence with understanding the different managers and strategies, making prudent decisions based upon the data presented, and putting the fund in a better place moving forward. The Board thanked Mr. Martin for his comments. Mr. Martin concluded his presentation with a brief discussion of the OPEB portfolio stating that the fund balance is at about $17.3 million, with performance slightly negative for the quarter. Looking ahead, the Board might want to consider the addition of defensive equity and GTAA for diversification. Mr. Martin stated that he would bring an asset allocation study for the OPEB fund to the next meeting. Mrs. Vaughan adjourned the meeting at 11:11 a.m. THE FOREGOING MINUTES SUBMITTED FOR APPROVAL: A�/tz -/ !r r /fa , 2018 - ATTEST.. c