Book 1 Page 18 11/16/17 10:00 A.M. MINUTES OF THE EMPLOYEE RETIREMENT ACCOUNT COMMITTEE (ERAC) REGULAR QUARTERLY MEETING OF NOVEMBER 16, 2017 Present: Chair Bonita Wagner, Secretary Pamela Nadalini, Treasurer Kelly Strickland, and Members Duncan Miller and Gary Dornbush Others: Pension Plans Administrator Cynthia Akersloot, Senior Pension Analyst Anthony Ferrer, Senior Pension Accountant Aaron Brooks and Pension Specialist Lois Belle Absent: None 1. CALL THE MEETING TO ORDER: Chair Wagner called the meeting to order at 10:01 a.m. 2. PLEDGE OF CIVILITY: Chair Wagner read into the record a memorandum from Mayor Willie Charles Shaw, dated February 13, 2015, entitled "City Commission and Advisory Boards Meeting Protocols and Pledge of Civility." 3. PUBLIC INPUT: None 4. APPROVAL OF MINUTES: 4.1. Approval Re: Minutes of the Employee Retirement Account Committee Regular Quarterly Meeting of May 18, 2017 A motion was made by Vice Chair Dornbush and seconded by Member Miller to approve the Minutes of the Employee Retirement Account Committee Regular Quarterly Meeting of May 18, 2017. Motion carried unanimously (5-0). 5. QUARTERLY INVESTMENT REPORTS: 5.1.F Presentation and Discussion Re: VALIC ERAC Report for Quarter Ending September 30, 2017 Presenter(s): Carolyn Garvey, Financial Advisor, VALIC Ms. Carolyn Garvey, Financial Advisor, VALIC, came before the Committee to present the VALIC Employee Retirement Account Committee Report for the quarter ending September 30, 2017. Ms. Garvey provided an overview of quarterly activity and her role with participants; that she continues to meet with new employees and visit City locations for follow up appointments (Police Station, Public Works and City Hall); that 23 new employees were enrolled last quarter. Ms. Garvey discussed the various seminars she has held for employees; that VALIC continues to send emails to employees each month addressing market changes and/or providing educational investment material; that there has been positive feedback from employees regarding the new VALIC website "Future Fit". In response to a question by Secretary Nadalini asking about the 2018 upcoming training seminars sent by Human Resources, Ms. Garvey stated she would follow up with Human Resources to clarify her role in the 2018 training schedule. The Committee thanked Ms. Garvey for her time. 5.2. Presentation and Discussion Re: Quarterly Investment Analysis Review Ending September 30, 2017 Presenter(s): Howard Daher, Principal, Daher Capital Group Mr. Howard Daher, Principal, Daher Capital Group, came before the Committee to present the quarterly investment analysis review for the quarter ending September 30, 2017. Mr. Daher presented a brief overview of the market and stated that Gross Domestic Product (GEP) is 2.6%; that market continues to do well. In response to a question from Chair Wagner asking how natural disasters affect insurance companies, Mr. Daher stated insurance stocks will decrease and home services will increase; that we need to be mindful because market is very high right now; that international markets are rebounding as well; that this allows participants to diversify portfolios more. Discussion ensued around market volatility and current conditions. Mr. Daher discussed the investments being monitored on the watch list and discussed the analysis performed; that there are only six (6) funds on watchlist and may be on the watchlist even though the fund is performing well based on risk; that his recommendation is to keep Ariel on watchlist. In response to a question from the Committee asking ift the portfolio has the right number of funds, Mr. Daher stated that from a fiduciary standpoint the portfolio offers at least one option in each of the core categories; that his recommendation is to keep the current selection of funds but that the data also shows participants prefer a target date option. Secretary Nadalini requested Ms. Garvey share watchlist with new employees. Mr. Daher stated he will perform a full year review at year end on the top two VALIC funds and Wellington. Secretary Nadalini requested Mr. Daher provide information regarding target date funds. The Board thanked Mr. Daher for his presentation. 6. NEW BUSINESS: 6.1. 2018 Proposed Meeting Schedule Presenter(s): Secretary Nadalini Secretary Nadalini presented the 2018 Proposed Quarterly Meeting Schedule. AI motion was made by' Vice Chair Dornbush, and seconded by Chair Wagner, to approve the 2018 Quarterly Meeting Schedule. Motion carried unanimously (5-0). Book 1 Page 19 11/16/17 10:00 A.M. Book 1 Page 20 11/16/17 10:00 A.M. 7. OTHER MATTERS: Member Miller is moving out of the City and is resigning his position with the Employees Retirement Account Committee effective immediately. In response to a question from Chair Wagner requesting Mr. Daher review fee structure, Secretary Nadalini stated that she has met with City Attorney Fournier to extend the VALIC contract but is considering creating a Request for Proposal (RFP) for the Defined Contribution Plan business. Pension Plans Administrator Akersloot introduced Senior Pension Accountant Brooks to the Committee. 8. ADJOURN. Chair Wagner adjourned the Employee Retirement Account Committee (ERAC) Regular Quarterly Meeting at 11:37 a.m. AV Chair Bonita Wagner Secretary Pamela Nadalini