MINUTES OF THE CITY OF SARASOTA GENERAL EMPLOYEES' PENSION PLAN BOARD OF TRUSTEES SPECIAL MEETING OF JUNE 23, 2022 Present: Chair Ryan Chapdelain, Vice Chair Mark Nicholas, Treasurer Kelly Strickland, Trustee Barry Keeler, and Trustee Jan Thomnburg. Others: Attorney Scott Christiansen appeared telephonically. Pension Plans Administrator Debra Martin and Pension Specialist Peter Gottlieb appeared in person. Absent: Secretary Shayla Griggs and Trustee Robert Reardon. 1. CALL MEETING TO ORDER: Chair Chapdelain called the General Employees Pension Plan (Plan) Board of Trustees Special meeting to order at 10:30 a.m. 2. PLEDGE OF ALLEGIANCE: Presenter(s): Chair Chapdelain. Chair Chapdelain led the Board and meeting attendees in the Pledge of Allegiance. 3. PLEDGE OF CIVILITY: Chair Chapdelain stated for the record, "We may disagree, but we will always be respectful to one another. We will direct all comments to issues, and we will not engage in personal attacks.' 4. ROLL CALL: Pension Plans Administrator Martin called roll. Secretary Griggs and Trustee Reardon were absent. 5. PUBLIC INPUT: None. 6. APPROVAL OF MINUTES: None 7. INVESTMENT PERFORMANCE REVIEW: None. 8. UNFINISHED BUSINESS: None. 9. NEW BUSINESS: 10. ATTORNEY MATTERS: Book 1 Page 326 06-23-2022 10:30 a.m. Book 1 Page 327 06-23-2022 10:30 a.m. 10.1. Presentation and Discussion Re: AllianzGI and Voya Financial Transfer of Assets. Presenter(s): Andy Mcllvaine, Institutional Consultant, Graystone Consulting. Andy Mcllvaine of Graystone Consulting appeared telephonically before the Board and introduced himself. Also appearing telephonically from Allianz Global Investors were Portfolio Manager Mark Phanitsiri, Portfolio Manager Moritz Dufner, US General Counsel John Viggiano, Senior Counsel Addison Kim, Head of Business Management US Markus Wolff, Head of North America Institutional Aiden Redmond, and Institutional Client Team Director Michael Moran. Mr. Mclivaine explained the item before the Board is regarding the transition of assets from Allianz to Voya; he noted that Allianz has managed a small cap growth fund for the Plan since 1994 and, as of March 31, 2022, had approximately $8.5 million in Plan assets under management. Allianz has performed well with positive alpha of 1.86% and positive returns in every time period. The transition is due to 3 portfolio managers in Allianz's Structured Alpha Strategy, which is unrelated to the Plan's Small Cap Growth Strategy, who misstated risk to investors, and as such, Allianz must turn over its operations to Voya. Mr. MclIvaine explained that the operations at Allianz are being shifted to Voya, and therefore it will be the same staff and strategy under a new management. Mr. Mcllvaine added that Morgan Stanley is very familiar with Voya, which manages approximately $200 billion in assets, and has a strong reputation. Graystone Consulting, a subsidiary of Morgan Stanley, is comfortable with Voya and has no reservations regarding the transition as it will be the same strategy, personnel, and processes as under Allianz. Attorney Christiansen appeared before the Board telephonically and introduced himself. He asked for an explanation of the proposed contractual arrangement. Mr. Mcllvaine explained that the letter provided is a consent to assignment of the Plan's contract with Allianz to Voya. Attorney Christiansen noted this is an old contract and if the Board approves the assignment, it may wish to also, at some point in the near future, draw up a new contract with Voya for the purpose of clarity. Mr. MclIIvaine noted that Allianz requests the signed consent to assignment be returned to Allianz by July 8, 2022 to ensure a smooth transition of assets and management to Voya. Attorney Christiansen asked if the document is a release of assets or an assignment of the agreement. John Viggiano, US General Counsel for Allianz appeared before the Board telephonically and introduced himself. He stated that the letter is intended to allow Allianz to share information with Voya sO that discussions between the Plan and Voya could begin; assets would transition at a later date. Addison Kim, Senior Counsel in Institutional Legal at Allianz appeared before the Board telephonically and introduced himself. He explained that Allianz requests consent to share information; Allianz then requests, by July 8, 2022, the Plan's consent to transfer the investment management account to Voya sO that the transfer will be completed by July 25, 2022. At Attorney Christiansen's request, Attorney Kim confirmed that, if approved by the Board, the contract between the Plan and Allianz would be assigned to Voya. Attorney Christiansen advised that he had no reservations with this request because the Board's contract allows it to sever the relationship with the fund manager at the Board's discretion at any time. Trustee Thornburg asked what other actions the Board could take if it did not approve the transition from Allianz to Voya. Attorney Christiansen and Mr. Mclivaine advised that the Plan could transfer the assets currently at Allianz to a comparable index fund until Graystone presented a fund manager search, and the Board selected a replacement small cap growth manager. Trustee Thornburg asked how long Graystone would need to complete and present a fund manager search to the Board; Mr. MclIvaine advised he could have one prepared within 2 to 3 business days and present it at a special meeting as soon as next week. Attorney Christiansen noted that the Board could decide at today's meeting to move the assets at Allianz to an index fund-; the Board could then review a fund manager search at its next regular meeting. Chair Chapdelain asked if the fee structure, staff, or strategy would change in the transition from Allianz to Voya. Attorney Christiansen noted that the fee, at 65 basis points, will not change in an assignment of contract. Michael Moran of Allianz's Institutional Client Team appeared before the Board telephonically and introduced himself. Mr. Moran explained that Allianz's investment team will transition to Voya, and that Portfolio Managers Moritz Duffner and Mark Phanitsiri were in telephonic attendance at this meeting. Mr. Phanitsiri confirmed the strategy will not change. Trustee Keeler expressed support for conducting a fund manager search. He noted that some of Allianz's staff have left the firm and will not transition to Voya;i in that context, he stated that performing a fund manager search would be appropriate due diligence. Vice Chair Nicholas asked how an index fund would work. Mr. Mcllvaine explained that an index fund is passively managed. Chair Chapdelain, Trustee Keeler, and Mr. MclIvaine discussed the process and timeline of transitioning funds to a new fund manager. They agreed it could take at least 30 days. Chair Chapdelain noted that, as explained by Attorney Christiansen, the Plan's contract with Allianz allows the Board to terminate the agreement at any time, and therefore it could reasonably proceed with transitioning to Voya while also conducting a fund manager search. Attorney Christiansen and Mr. MclIvaine concurred. To Chair Chapdelain's request, Mr. MclIvaine stated that a fund manager search would include Voya as well as 3 or 4 additional small cap growth fund managers. Trustee Thornburg and Attorney Christiansen asked when the actual transfer of assets and investment management authority would occur, and ifit would be possible to begin the process of transitioning from Allianz to Voya while conducting a manager search. Mr. Moran explained that the transition is a 2-step process. First, Allianz requires a trustee or plan representative to give e-mailed consent to Allianz to share Plan information with Voya; this would allow the Board to conduct its due diligence on Voya. Second, Allianz requires an executed consent to assignment of its contract with the Plan to Voya which would begin the transition of funds and investment authority; Allianz requires a copy of the executed consent to assignment by July 8, 2022 sO that the transition of funds and investment authority can be completed by Friday, July 22, 2022 which will be Allianz's last day of operations. Chair Chapdelain noted that the next Regular Board meeting is scheduled for Tuesday, July 19, 2022, and asked Mr. MclIvaine if Graystone will attend; Mr. Mcllvaine confirmed and advised Graystone could present a fund manager search at that meeting. At Chair Chapdelain's request, Mr. MclIvaine provided Allianz's 1-, 3-, 5- - 7-, 10-, and since inception performance, as stated in Graystone's Quarterly Performance Summary As of March 31, 2022 which was presented at the Board's May 9, 2022 Regular Meeting, and advised that Allianz has averaged a positive alpha of 1.86% every year since 1994. Chair Chapdelain noted that, if Allianz's s investment team is transitioning to Voya, he is supportive of continuing with Voya, although he would also support conducting a fund manager search provided that Voya is included in the search. Vice Chair Nicholas asked if the Board could make a decision to transition to Voya or a different fund manager at the July 19, 2022 meeting. Attorney Viggiano advised that a decision on July 19, 2022 would not give Allianz sufficient time to complete any transition by July 22, 2022, which will be when Allianz closes its operations. Book 1 Page 328 06-23-2022 10:30 a.m. Book 1 Page 329 06-23-2022 10:30 a.m. Attorney Kim confirmed that Allianz requires a response by July 8, 2022 to allow 2 weeks for Allianz to perform any needed operation before it closes. To Attorney Christiansen's question, Attorney Viggiano stated that Allianz and Voya will share all cost related to transition assets from Allianz to Voya. Attorney Christiansen and Mr. Mcllvaine discussed transitioning from Allianz to an index fund and agreed the Allianz account would need to be liquidated to cash, and then shares of the appropriate index would need to be purchased, which would incur fees to the Plan. Chair Chapdelain noted that it seems more efficient to conduct a manager search and simultaneously approve the transition to Voya with the understanding that the Board may decide to transition from Voya to a new manager in the future. Trustee Thornburg noted that she has concerns with moving forward with transitioning to Voya without also conducting a manager search, and therefore Chair Chapdelain 's suggestion seems appropriate. Trustee Thornburg made a motion to approve the assignment of its contract with Allianz to Voya and simultaneously direct Graystone Consulting to present a small cap growth manager search at the Board's July 19, 2022 Regular Meeting. Vice Chair Nicholas seconded the motion. Mr. MclIvaine agreed Graystone will present a small cap growth manager search at the July 19, 2022 Regular Meeting; Attorney Christiansen confirmed the motion was sufficient. The motion carried unanimously (5-0). Attorney Christiansen noted that Chair Chapdelain was authorized to execute the consent to assignment from Allianz to Voya. 11. OTHER MATTERS: None. 12. ADJOURN. Chair Chapdelain adjourned the meeting at 11:02 a.m. 8165 Chair Ryan Chapdelain Secrétary Shayla Griggs