June 2015 Monthly Board Report

OP&F AGAIN RECEIVES CLEAN FINANCIAL AUDIT

An independent audit firm has reviewed OP&F’s most recent financial statements and confirmed that they accurately represent the financial positions of the system for the fiscal years ending on Dec. 31, 2014 and 2013. The opinion also confirms that OP&F’s financial reports are in accordance with generally accepted accounting principles including new rules requiring a net pension liability and new disclosures to be included within the financial statements. The independent audit opinion from McGladrey is included in OP&F’s Comprehensive Annual Financial Report, which is available online at op-f.org.

DESMOND TAKES OVER AS OP&F BOARD CHAIR

Daniel Desmond (active fire, Toledo) became chair of the OP&F Board of Trustees at its June meeting and will serve in that capacity through May 2016. Desmond ran unopposed in the spring 2015 elections and is beginning his first full four-year term as a trustee. Desmond has been with the Toledo Fire and Rescue Department since 1989 and previously served with the Sylvania Township Fire Department.

PORTFOLIO UPDATE
OP&F's investment portfolio value:

Board of Trustees Committee Notes
(Motions approved by the Board are listed separately)

• DISABILITY: In addition to the regularly scheduled hearings and appeals, the Disability Committee was informed of the Annual Earnings Statement mailing that occurred in June and received the Disability Committee Schedule for 2015-16.
• HEALTH CARE: The Board received the Health Care Committee schedule for 2015-16 and reviewed a tentative strategy timeline for health care planning for the next four years. The Committee also reviewed the Ohio Retirement Study Council Health Care Report for 2014. UnitedHealthcare representatives provided updates to the Board on prescription drug list changes, pharmacy data relating to OP&F’s plan performance, and the Annual Change Period seminar schedule. The Board also received a presentation from UnitedHealthcare and AARP on its health care exchange options.
• BENEFITS: The schedule for the Benefits Committee was reviewed for 2015-16 and the schedule, dates and locations for the pre-retirement seminars were announced to the Committee.
• INVESTMENT: In addition to the monthly portfolio update, the Committee/Board received several reports covering the first quarter of 2015: the Real Estate Performance Review, the Manager Compliance Review and the Private Markets and Timberland Reports. The Investment Committee calendar for 2015-16 was also presented.

• Approved Townsend’s recommendation to adopt the Mid-Year Update to the 2015 Real Estate Investment Plan. Motion passed by unanimous vote (Investment Committee).
• Approved Townsend’s recommendation to make no changes to OP&F’s Strategic Real Estate Portfolio at this time. Motion passed by unanimous vote (Investment Committee).
• Adopted the U.S. Equity structure described as “Portfolio C” on Page 9 of Wilshire Associates’ U.S. Equity Structure Analysis presentation dated June 24, 2015. Motion passed by unanimous vote (Investment Committee).
• Approved Wilshire’s and Investment Staff’s recommendation to terminate Columbia Threadneedle Investments, AQR Capital Management and Investcorp Investment Advisers in keeping with the adoption of a new U.S. Equity portfolio structure. Motion passed by unanimous vote (Investment Committee).
• Approved the manager rating for AQR, as presented by staff. Motion passed by unanimous vote (Investment Committee).
• Approved staff’s and TorreyCove’s recommendation to commit $40 million to RRJ Capital Master Fund III. Motion passed by unanimous vote (Investment Committee).
• The Board approved a revision to the Investment Committee Charter, which outlines the Committee’s purpose and responsibilities. Motion passed by unanimous vote (Investment Committee).
• Approved the Committee recommendations for the initial determination of disability for the 10 members as identified in the initial determination hearings list presented to the Board on June 24, 2015. Motion passed by unanimous vote (Disability Committee).
• Approved the Committee recommendation for reconsideration for the members identified. Motion passed by unanimous vote (Disability Committee).
• Approved the recommendation for the appeal hearing for the member identified in the appeals list presented to the Board on June 24, 2015. Motion passed by unanimous vote (Disability Committee).
• Approved the Committee recommendation for Death Fund benefits for the members identified. Motion passed by unanimous vote (Disability Committee).
• Waived the mandatory medical evaluation and filing of annual earnings statements for future years for the members identified in the disability reporting waivers list presented to the Board on June 24, 2015. Motion passed by unanimous vote (Disability Committee).
• Approved the Disability Committee Charter as presented at the June 23, 2015 Disability Committee Meeting. Motion passed by unanimous vote (Disability Committee).
• Approved the Finance Committee Charter as presented at the June 23, 2015 Finance Committee Meeting. Motion passed by unanimous vote (Finance Committee).
• Approved the Health Care Committee Charter as presented at the June 23, 2015 Health Care Committee Meeting. Motion passed by unanimous vote (Health Care Committee).
• Approved the Ohio Retirement Study Council Health Care Report for 2014 in the form presented on June 23, 2015. Motion passed by unanimous vote (Health Care Committee).
• Approved Option 2 of the 2016 Health Care Rates as presented by Buck Consultants on June 23, 2015. Motion passed by a vote for five for and one abstention (Health Care Committee).
• Approved the Benefits Committee Charter as presented at the June 23, 2015 Benefits Committee Meeting. Motion passed by unanimous vote (Benefits Committee).
  

Next Board of Trustees Meetings: August 25-26, 2015