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Laborers’ and Retirement Board Employees’
Annuity and Benefit Fund of Chicago
Minutes of Regular Board Meeting # 951
July 15, 2014
Suite 1300 ● 321 N Clark Street ● Chicago Illinois 60654-4739
(312) 236-2065 ● Fax (312) 236-0574
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LABORERS’ & RETIREMENT BOARD EMPLOYEES’
ANNUITY & BENEFIT FUND OF CHICAGO
Report of Meeting No. 951 held on July 15, 2014, at 1:00 p.m. in the office of the Pension Fund.
The following were present:
Victor Roa – Trustee – Vice-President, Union Appointed Member
Michael LoVerde – Trustee – Secretary, Elected Member
Lois Scott – Trustee – City Chief Financial Officer, Appointed Member
Erin Keane – Trustee – First Deputy Comptroller, Appointed Member
Carol Hamburger – Trustee – City Deputy Budget Director, Appointed Member
Joseph Rinella – Trustee – Elected Member
John Arvetis – Trustee – Annuitant Member
Gerald Alder – Chief of Staff, City Treasurer’s Office,
Proxy in the absence of City Treasurer Stephanie Neely
Graham Grady – Taft Stettinius & Hollister LLP, Fund’s Attorney
Cary Donham – Taft Stettinius & Hollister LLP, Fund’s Attorney
Dr. Terence Sullivan – Fund’s Physician
Michael Cairns – NEPC, LLC, Fund’s Investment Consultant
Kristin Finney-Cooke – NEPC, LLC, Fund’s Investment Consultant
Kristen Jackson – NEPC, LLC, Fund’s Investment Consultant
Aileen Pecora – Interim Director
Peggy Grabowski – Manager of Accounting/Investments
Joan Newman – Benefits Manager
Margie Grazevich – Benefits Payroll Manager
Kathy Schanding – Fund Actuary
John Carroll – Compliance Administrator
Observers – Jason Parks of Loop Capital, Sharon Piet of Podesta & Company.
Absent: Stephanie Neely – Trustee – President and Treasurer – City Treasurer, Ex Officio
Member
In the absence of Treasurer Neely, Vice President Roa determined that a quorum was present, and it was
moved by Trustee Rinella, seconded by Trustee Hamburger that the regular minutes of Meeting No. 950
be approved as submitted.
Roll-call:
For--Trustees Roa, LoVerde, Scott, Keane, Hamburger, Rinella, Arvetis and Proxy Alder.
Against-- None.
It was moved by Trustee Hamburger, seconded by Trustee LoVerde, that the minutes of executive
sessions 1, 2, and 3 of meeting No. 950 be approved as submitted.
Roll-call:
For--Trustees Roa, LoVerde, Scott, Keane, Hamburger, Rinella, Arvetis and Proxy Alder.
Against-- None.
ADMINISTRATIVE HEARING WRITTEN DECISIONS
The trustees were presented with the written decision of the Administrative Hearing: Matter of Susan
Acevedo. It was moved by Trustee LoVerde, seconded by Trustee Hamburger, to approve the written
decision as presented for Susan Acevedo.
Roll-call: For-- Trustees Roa, LoVerde, Scott, Keane, Hamburger, Rinella, Arvetis and Proxy Alder.
Against-- None.
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The trustees were presented with the written decision of the Administrative Hearing: Matter of Marcus
Patton. It was moved by Trustee Hamburger, seconded by Trustee LoVerde, to approve the written
decision as presented for Marcus Patton.
Roll-call: For-- Trustees Roa, LoVerde, Scott, Keane, Hamburger, Rinella, Arvetis and Proxy Alder.
Against-- None.
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Laborers’ and Retirement Board Employees’
Annuity and Benefit Fund of Chicago
Board Members:
I am transmitting herewith the minutes for the meeting of the Retirement Board which was held on July 15, 2014.
The minutes are comprised of the following:
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Approval of minutes from prior meeting
Acceptance of Written Decisions
Public Participation
Schedule A: Applications for Refunds:
1. Refund of Contributions Due to Separation from Service
2. Miscellaneous Refund
a. Refund to Heirs of Deceased Members
Schedule B: Payment of Administrative Expenses
Schedule C: Applications for Annuities
1. Employee Annuity Applications
2. Spouse and Child Annuity Applications
Schedule D: Adjustment Refunds to New Annuitants
Schedule E: Applications for Duty Disability Benefits
Schedule F: Applications for Ordinary Disability Benefits
Schedule G: Applications for Extension of Duty Disability Benefits
Schedule H: Applications for Extension of Ordinary Disability Benefits
Schedule I: Payment of Uncashed Checks of Deceased Members
Investment Report
Executive Session No. 1
Investment Report Continued
Administrative Report
Executive Session No. 2
Continuation of June 25, 2014 Executive Session
Administrative Report Continued
Legal Report
Executive Session No. 3
Executive Session No. 4
Adjournment
All the foregoing matters were checked upon receipt into the Office of the Retirement Board and were found to be
hereinafter set forth.
Sincerely,
Michael R. LoVerde
Retirement Board Secretary
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LABORERS’ & RETIREMENT BOARD EMPLOYEES’
ANNUITY & BENEFIT FUND OF CHICAGO
July 15, 2014
PUBLIC PARTICIPATION
There was no public participation.
SCHEDULE A – APPLICATIONS FOR REFUNDS
1. Refund of Contributions Due to Separation from Service
It was moved by Trustee LoVerde, seconded by Trustee Rinella, that Refunds of Contributions Due to
Separation be approved and ordered paid.
Roll-call:
For-- Trustees Roa, LoVerde, Scott, Keane, Hamburger, Rinella, Arvetis and Proxy Alder.
Against--None.
2. Miscellaneous Refunds
a. Refund to Heirs of Deceased Members
It was moved by Trustee Rinella, seconded by Trustee Hamburger, that Refunds to Heirs of Deceased
Members be approved and ordered paid.
Roll-call:
For-- Trustees Roa, LoVerde, Scott, Keane, Hamburger, Rinella, Arvetis, and Proxy Alder.
Against--None.
SCHEDULE B – ADMINISTRATIVE EXPENSES
1. Administrative Invoices
2. Investment Invoices
It was moved by Trustee LoVerde, seconded by Trustee Scott, that Invoices be approved and ordered
paid.
Roll-call:
For-- Trustees Roa, LoVerde, Scott, Keane, Hamburger, Rinella, Arvetis, and Proxy Alder.
Against--None.
SCHEDULE C – APPLICATIONS FOR ANNUITIES
1. Employee Annuities
None presented.
2. Spouse and Child Annuities
It was moved by Trustee LoVerde, seconded by Trustee Hamburger, that applications presented for
Spouse and Child Annuities be approved and ordered paid.
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LABORERS’ & RETIREMENT BOARD EMPLOYEES’
ANNUITY & BENEFIT FUND OF CHICAGO
July 15, 2014
Roll-call:
For-- Trustees Roa, LoVerde, Scott, Keane, Hamburger, Rinella, Arvetis, and Proxy Alder.
Against--None.
SCHEDULE D – ADJUSTMENT REFUNDS TO NEW ANNUITANTS
It was moved by Trustee Hamburger, seconded by Trustee LoVerde, that Adjustment Refunds be
approved and ordered paid.
Roll-call:
For-- Trustees Roa, LoVerde, Scott, Keane, Hamburger, Rinella, Arvetis, and Proxy Alder.
Against--None.
SCHEDULE E – DUTY DISABILITY BENEFITS
Trustee LoVerde made a motion, seconded by Trustee Arvetis, to approve the duty disability benefits for
Office #67345 using the rate of pay at the date of injury.
Roll-call:
For-- Trustees Roa, LoVerde, Rinella and Arvetis.
Against-- Trustees Scott, Keane, Hamburger and Proxy Alder.
The motion did not pass.
Trustee Scott made a motion, seconded by Trustee Hamburger, to approve the duty disability benefits for
Office #67345 using the seasonal calculation method.
Roll-call:
For-- Trustees Scott, Keane, Hamburger and Proxy Alder.
Against-- Trustees Roa, LoVerde, Rinella and Arvetis.
The motion did not pass.
It was moved by Trustee LoVerde, seconded by Trustee Rinella that the remaining applications for Duty
Disability Benefits be approved and ordered paid.
Roll-call:
For-- Trustees Roa, LoVerde, Scott, Keane, Hamburger, Rinella, Arvetis and Proxy Alder.
Against-- None.
SCHEDULE F – ORDINARY DISABILITY BENEFITS
It was moved by Trustee Hamburger, seconded by Trustee LoVerde, that applications for Ordinary
Disability Benefits be approved and ordered paid.
Roll-call:
For-- Trustees Roa, LoVerde, Scott, Keane, Hamburger, Rinella, Arvetis and Proxy Alder.
Against-- None.
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LABORERS’ & RETIREMENT BOARD EMPLOYEES’
ANNUITY & BENEFIT FUND OF CHICAGO
July 15, 2014
SCHEDULE G – DUTY DISABILITY EXTENSIONS
It was moved by Trustee Hamburger, seconded by Trustee Keane, that the application for Extension of
Duty Disability Benefits for Office #69434 be approved and ordered paid.
Roll-call:
For-- Trustees Scott, Keane, Hamburger and Proxy Alder.
Against--Trustees Roa, LoVerde, Rinella and Arvetis.
The motion did not pass.
It was moved by Trustee LoVerde, seconded by Trustee Scott, that remaining applications for Extension
of Duty Disability Benefits be approved and ordered paid.
Roll-call:
For-- Trustees Roa, LoVerde, Scott, Keane, Hamburger, Rinella, Arvetis and Proxy Alder.
Against-- None.
SCHEDULE H – EXTENSION OF ORDINARY DISABILITY BENEFITS
It was moved by Trustee LoVerde, seconded by Trustee Rinella, that the applications for Extension of
Ordinary Disability Benefits be approved and ordered paid.
Roll-call:
For-- Trustees Roa, LoVerde, Scott, Keane, Hamburger, Rinella, Arvetis and Proxy Alder.
Against-- None.
SCHEDULE I – PAYMENT OF UNCASHED CHECKS OF DECEASED MEMBERS
It was moved by Trustee Scott, seconded by Trustee Keane, that the Payment of Uncashed Checks of
Deceased Members be approved and ordered paid.
Roll-call:
For-- Trustees Roa, LoVerde, Scott, Keane, Hamburger, Rinella, Arvetis and Proxy Alder.
Against-- None.
INVESTMENTS REPORT
Market Update and Performance Flash
Michael Cairns and Kristin Finney-Cooke of NEPC, LLC gave trustees an update on the markets and
presented trustees with the preliminary Performance Flash Report of June 2014. The trustees reviewed
the Fund’s portfolio compared to various benchmarks for different time periods.
Watch List
The trustees reviewed the Watch List. Mr. Cairns suggested making no changes to the Watch List at this
time.
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LABORERS’ & RETIREMENT BOARD EMPLOYEES’
ANNUITY & BENEFIT FUND OF CHICAGO
July 15, 2014
Columbia Partners Analysis
Mr. Cairns reviewed a memo prepared by NEPC, LLC regarding the Fund’s investment in Columbia
Partners SMID Growth Portfolio. Mr. Cairns reviewed the strategy, objectives and performance of the
portfolio.
MWDBE Discussion
The trustees reviewed the LABF’s current holdings with MWDBE investment managers. The trustees
asked Mr. Cairns to make recommendations for increasing the Fund’s allocations to Alternative
Investments with MWDBE investment managers.
Liquidity Study and Asset Liability Study
Due to the passage of PA 98-0641, these items were postponed until a future meeting so financial
projections may be updated.
EXCUTIVE SESSION NO. 1
Trustee Scott requested an executive session under 5 ILCS 120/2(c)(7) to discuss the sale or purchase of
securities, investments or investment contracts. Proxy Alder seconded the motion.
Roll-call:
For-- Trustees Roa, LoVerde, Scott, Keane, Hamburger, Rinella, Arvetis and Proxy Alder.
Against-- None.
Trustee LoVerde made a motion, seconded by Trustee Scott, that the executive session be adjourned and
that the Board return to open session.
Roll-call:
For-- Trustees Roa, LoVerde, Scott, Keane, Hamburger, Rinella, Arvetis and Proxy Alder.
Against-- None.
INVESTMENTS REPORT CONTINUED
Trustee Scott made a motion, seconded by Trustee Arvetis, instructing staff and Fund Counsel to initiate
contract negotiations with Progress Investment Management Company.
Roll-call:
For-- Trustees Roa, LoVerde, Scott, Keane, Hamburger, Rinella, Arvetis and Proxy Alder.
Against-- None.
Trustee Scott made a motion, seconded by Trustee Hamburger, to solicit bids from the Fund’s transition
managers in anticipation of future asset transfers.
Roll-call:
For-- Trustees Roa, LoVerde, Scott, Keane, Hamburger, Rinella, Arvetis and Proxy Alder.
Against-- None.
Hopewell Ventures L.P.
Mr. Cairns and Ms. Grabowski reviewed with the trustees the Fund’s investment in Hopewell Ventures
L.P., one of the Fund’s private equity investments.
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LABORERS’ & RETIREMENT BOARD EMPLOYEES’
ANNUITY & BENEFIT FUND OF CHICAGO
July 15, 2014
Wasatch International Small Cap Growth Portfolio
Mr. Cairns reviewed a guideline change requested by Wasatch Advisors, Inc. related to the maximum
benchmark weighting used within the strategy. Trustees Scott made a motion, seconded by Proxy Alder,
to approve the change in benchmark weighting requested by Wasatch Advisors, Inc.
Roll-call:
For-- Trustees Roa, LoVerde, Scott, Keane, Hamburger, Rinella, Arvetis and Proxy Alder.
Against-- None.
Investment Manager Reviews
The trustees requested that NEPC, LLC set up investment manager review meetings with several of the
Fund’s investment managers on September 4, 2014.
ADMINISTRATIVE REPORT
Midwest Mezzanine Fund IV Capital Call
Midwest Mezzanine Fund IV requested a capital call on July 10, 2014 in the amount of $7,031.67.
Mesirow Fund II Distribution
Mesirow Fund II made a distribution on June 30, 2014 in the amount of $175,000.00.
Capri Capital Apartment Fund III
Capri Capital Apartment Fund III made a distribution on June 30, 2014 in the amount of $79,401.00.
Midwest Mezzanine Fund IV Distribution
Midwest Mezzanine Fund IV Fund made a distribution on July 10, 2014 in the amount of $248,475.26.
Securities Lending
Ms. Pecora reviewed with trustees the year-to-date results of the Fund’s securities lending program. The
trustees requested that staff follow up with Deutsche Bank to confirm that the program is progressing as
expected.
Administrative Hearing Rules
Ms. Pecora presented to trustees some updates to the LABF’s Procedural Rules Governing Hearings
document. The trustees requested Fund Counsel make some minor adjustments to the document.
EXECUTIVE SESSION NO. 2
Trustee Scott requested an executive session under 5 ILCS 120/2(c)(1) to discuss personnel matters.
Trustee Hamburger seconded the motion.
Roll-call:
For--Trustees Roa, LoVerde, Scott, Keane, Hamburger, Rinella, Arvetis and Proxy Alder.
Against --None.
Trustee Hamburger made a motion, seconded by Trustee LoVerde, that the executive session be
adjourned and that the Board return to open session.
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LABORERS’ & RETIREMENT BOARD EMPLOYEES’
ANNUITY & BENEFIT FUND OF CHICAGO
July 15, 2014
Roll-call:
For-- Trustees Roa, LoVerde, Scott, Keane, Hamburger, Rinella, Arvetis and Proxy Alder.
Against-- None.
The trustees took no action.
CONTINUATION OF JUNE 25, 2014 EXECUTIVE SESSION
The trustees unanimously approved the continuation of the June 25, 2014 executive session that was
previously closed under 5 ILCS 120/2(c)(1) to discuss personnel matters.
Trustee LoVerde made a motion, seconded by Proxy Alder, that the executive session started on June 25,
2014 and continued at this meeting number 951 be adjourned and that the Board return to open session.
Roll-call:
For-- Trustees Roa, LoVerde, Scott, Keane, Hamburger, Rinella, Arvetis and Proxy Alder.
Against-- None.
The trustees took no action.
Miscelllaneous
Ms. Pecora reviewed with trustees updated projections prepared by the Fund’s actuary, Gabriel Roeder
Smith & Company which takes into account various changes under Public Act 98-0641.
Ms. Pecora and Mr. Carroll updated trustees about a recent inquiry that the Fund received from the Public
Access Counselor related to the Fund’s response to a FOIA in June 2014.
LEGAL REPORT
LABF Bylaws
Mr. Grady and Ms. Pecora reviewed the final version of the LABF Bylaws with trustees. After a final
review of the bylaws, Trustee Arvetis made a motion, seconded by Trustee LoVerde to approve the
restated LABF Bylaws as presented in the meeting.
Roll-call:
For-- Trustees Roa, LoVerde, Scott, Keane, Hamburger, Rinella, Arvetis and Proxy Alder.
Against-- None.
See attached document.
IRS Determination Letter Filing
Mr. Grady and Mr. Donham reviewed a proposed policy resolution with the trustees related to the IRS
Determination Letter filing under consideration. The trustees requested additional information from Fund
Counsel on this matter.
Annuitant Trustee Election Rules
Ms. Pecora and Mr. Donham reviewed with the trustees some changes they are recommending to the
Annuitant Trustee Election Rules. The trustees requested some additional changes be made to the
election rules and they unanimously appointed Trustees Roa and Hamburger to serve on the LABF
Election Committee.
10
LABORERS’ & RETIREMENT BOARD EMPLOYEES’
ANNUITY & BENEFIT FUND OF CHICAGO
July 15, 2014
Lovemore Matter
Ms. Pecora and Mr. Donham updated the trustees on a communication that was received by the Fund
from Briggitte Lovemore.
Independent Contractor
Mr. Donham presented a memo to trustees related to an employee of the Firemen’s Annuity and Benefit
Fund of Chicago (FABF). The trustees accepted the memo and its recommendation to treat the member
as an independent contractor.
EXCUTIVE SESSION NO. 3
Proxy Alder requested an executive session under 5 ILCS 120/2(c)(11) to discuss potential or current
litigation of the Fund. Trustee Rinella seconded the motion.
Roll-call:
For-- Trustees Roa, LoVerde, Scott, Keane, Hamburger, Rinella, Arvetis and Proxy Alder.
Against-- None.
Trustee LoVerde made a motion, seconded by Trustee Arvetis, that the executive session be adjourned
and that the Board return to open session.
Roll-call:
For-- Trustees Roa, LoVerde, Scott, Keane, Hamburger, Rinella, Arvetis and Proxy Alder.
Against-- None.
The trustees took no action.
EXCUTIVE SESSION NO. 4
Trustee Hamburger requested an executive session under 5 ILCS 120/2(c)(11) to discuss potential or
current litigation of the Fund. Proxy Alder seconded the motion.
Roll-call:
For-- Trustees Scott, Keane, Hamburger, Rinella, Arvetis and Proxy Alder.
Against-- None.
Abstained-- Trustees Roa and LoVerde.
Trustee Keane made a motion, seconded by Trustee Hamburger, that the executive session be adjourned
and that the Board return to open session.
Roll-call:
For-- Trustees Roa, LoVerde, Scott, Keane, Hamburger, Rinella, Arvetis and Proxy Alder.
Against-- None.
Absent--Trustees Roa and LoVerde.
The trustees took no action.
ADJOURNMENT
With no further business, Trustee Rinella made a motion to adjourn. Trustee Scott seconded the motion.
Roll-call:
For-- Trustees Roa, LoVerde, Scott, Keane, Hamburger, Rinella, Arvetis and Proxy Alder.
Against-- None.
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