Book 1 Page 12 2/16/17 10:00 A.M. MINUTES OF THE EMPLOYEE RETIREMENT ACCOUNT COMMITTEE (ERAC) REGULAR QUARTERLY MEETING OF FEBRUARY 16, 2017 Present: Chair Bonita Wagner, Secretary Pamela Nadalini (arrived at 10:03 a.m.), Treasurer Kelly Strickland, and Member Duncan Miller Others: Pension Plans Administrator Harry Ramphal, Senior Pension Analyst Anthony Ferrer, and Pension Specialist Lois Belle Absent: None 1. CALL THE MEETING TO ORDER: Chair Wagner called the meeting to order at 10:02 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 November 17, 2016 A motion was made by Treasurer Strickland, seconded by Member Miller to approve the Minutes of the November 17, 2016, Employee Retirement Account Committee (ERAC) Regular Quarterly Meeting. Motion carried unanimously (3-0). Secretary Nadalini arrived at 10:03 a.m. 5. BOARD APPOINTMENTS: 5.1. Appointment Re: Employee Retirement Account Committee Secretary Nadalini presented a Board application from Gary Dornbush. In response to a question from Trustee Miller asking if the applicant would have an issue with attending summer meetings, Mr. Dornbush stated he would not have an issue attending summer meetings. Pension Plans Administrator Ramphal discussed the City's Advisory Board Application vacancy process. Chair Wagner noted Board consensus to accept nomination of Mr. Dornbush; Secretary Nadalini stated her office would reach out to Mr. Dornbush to administer the Oath. 6. QUARTERLY REPORTS: 6.1. Presentation and Discussion Re: VALIC ERAC Report for Quarter Ending December 31, 2016 Carolyn Garvey, Financial Advisor, VALIC Financial Advisors and Gregg Hudak, Manager, VALIC Financial Advisors, came before the Committee to present the VALIC Employee Retirement Account Committee Report for the quarter ending December 31, 2016. Ms. Garvey stated that new hire enrollment for the quarter was up 30% with 29 new hires in the 4th quarter; that she did not get much of a response from the questionnaires she sent out and that she would like to reach out to participants directly. Ms. Garvey stated that February 27 through March 4 is America Saves Week and she would like to kick off that week with a series of seminars; that she will work with Staff regarding details. Mr. Hudak provided the Board with administrative background details for an employee that received a full distribution but was not vested; that the City was made whole by VALIC and that VALIC is working through the overpayment recovery process directly with the employee. In response to a question by Secretary Nadalini asking what are VALIC's checks to ensure this does not happen again, Mr. Hudak stated that Ms. Garvey will be the first point of contact to review any distribution forms to ensure accuracy. Secretary Nadalini stated that the Pension Department will not alter a VALIC form; that VALIC needs to ensure accuracy. Mr. Hudak stated that VALIC would like to discuss the new pricing platform. Secretary Nadalini stated that the Board should not hear the new pricing platform from VALIC; that a Request For Proposals (RFP) may be forthcoming and it is premature to discuss pricing at this time. VALIC representatives left the meeting. Discussion ensued around the RFP process. Secretary Nadalini stated that the RFP process starts with the City Auditor and Clerk's office, the City Attorney and the Purchasing Manager; that the RFP will be open and transparent; that the Board's role as a fiduciary is to ensure that the right questions are being asked and the right information is being reviewed. Secretary Nadalini stated that she will share information as received. 6.2. Presentation and Discussion Re: Quarterly Investment Analysis Review Ending December 31, 2016 Howard Daher, Principal, Daher Capital Group, came before the Committee to present the quarterly investment analysis review for the quarter ending December 31, 2016. Mr. Daher presented a brief overview of the market and discussed the growth in the economy; and stated that the market shows a great deal of optimism right now; that while the overseas market does not show much growth, the U.S. dollar continues to be strong. In response to a question from Secretary Nadalini asking if there are any Target Date Funds, Mr. Daher stated that no there are currently no Target Date Funds available. Discussion ensued around different Target Date Fund strategies. Book 1 Page 13 2/16/17 10:00 A.M. Book 1 Page 14 2/16/17 10:00 A.M. Mr. Daher discussed the nine funds being monitored on the watch list and stated that those funds represent $1.1M or 17% of the total assets; that year-to-date only 4 of the current funds are below peer groups; that over 80% are currently beating benchmark; that the overall portfolio is well- balanced and historically looks good but there is a need to watch the one-to-three year period. The Board thanked Mr. Daher for his presentation. 7. NEW BUSINESS: None 8. OTHER MATTERS: None. 9. ADJOURN. Chair Wagner adjourned the Employee Retirement Account Committee (ERAC) Regular Quarterly Meeting at 11:44 a.m. - à - L à Bbukl A Chair Bonita Wagner Secretary Pamela Nadalini