MINUTES

The Board of Trustees of the Municipal Police Employees’ Retirement System held a Regular Meeting on Wednesday, June 20, 2018, at 7722 Office Park Boulevard, Baton Rouge, .

The meeting was called to order by Chairman G. Scott Ford at 9:03 a.m.

Pledge of Allegiance Ms. Amy Mathews led the pledge of allegiance.

Members Present Chief Scott Ford, Chairman Sgt. Chad King, Vice-Chairman Maj. Raymond Burkart, Jr. Sgt. Michael Calloway Chief Michael Glaser Capt. (Retired) Willie Joe Greene Mayor Gerard Landry Mr. Rick McGimsey, Div. of Administration Designee Ms. Amy Mathews, State Treasurer Designee Senator Barrow Peacock Sgt. (Retired) Larry Reech Mr. , State Treasurer Chief Michael Suchanek Mayor Donald Villere

Members Absent Rep. Tony Bacala Chief Dwayne Munch

Others Present Mr. Benjamin A. Huxen II, Executive Director & General Counsel Ms. Daphne Rusk, MPERS, Office Administrator Ms. Melissa Rayburn, MPERS, Benefits Administrator Ms. Taylor Camp, MPERS, CFO Mr. David Barnes, NEPC Ms. Sheri Morris, Attorney, Daigle Fisse & Kessenich Ms. Margaret Corley, Attorney, Senate Retirement Committee Mr. Jean Beckemeyer, NOPD, Retired Mr. Wallace Lore, NOPD, Retired Ms. Kristen Jackson, Dimensional Fund Advisors Mr. Horacio Carias, Dimensional Fund Advisors Mr. Jim Klapman, Acadian Asset Management Mr. Scott Brymer, Acadian Asset Management Mr. John Shearburn, Warburg Pincus Mr. Nate Bishop, HarbourVest Mr. Ian Lane, HarbourVest Mr. Christopher Ahner, NOPD, Retired Mr. Paul Brown, Monroe PD, Retired Ms. Meg Gatto, WVUE-TV Ms. Kristen Taconi, Jefferson Parish Sheriffs’ Office

Public Comment

Chairman Ford called for public comment. There was no comment from the public.

REGULAR BUSINESS

Approval of Minutes

June 20, 2018 Page 2 of 6 Minutes

Motion by Mr. Greene seconded by Mr. Burkart to approve the minutes of the meeting held May 16, 2018. Without objection, the motion carried.

Approval of Retirement Applications

Motion by Mr. Reech seconded by Mr. King to approve the applications for Retirement. Without objection, the motion carried.

Applications for DROP EFF. YEARS OF NAME CITY/TOWN DATE SERVICE PLAN

Gary Barnes New Orleans 04/07/18 20.38 Max Winston Harbin, Jr. New Orleans 04/16/18 20.59 02 Gerald Jenkins Ruston 05/01/18 26.12 2a Jeffery Miller Ponchatoula 04/26/18 20.08 2a Brenda Poullard Lafayette 04/16/18 30.05 Max Robert Schilling Baton Rouge 04/17/18 25.07 3a

Applications for DROP to Regular Retirement EFF. YEARS OF NAME CITY/TOWN DATE SERVICE PLAN

Carolyn Dalton New Orleans 06/08/18 20.11 Max Levy Firmin Lafayette 06/06/18 29.39 02 Kim Preston New Orleans 06/14/18 23.72 Max Richard Vercher Alexandria 06/17/18 26.02 2a George Wilhite Winnsboro 07/01/18 24.15 2a

Applications for Regular Retirement EFF. YEARS OF NAME CITY/TOWN DATE SERVICE PLAN

Gregory Brown Baker 05/30/18 21.67 2a Gregg Glaudi Mandeville 06/01/18 20.65 3a Treavor Hannum Zachary 05/07/18 27.00 2a Robert Huff, Jr. Westwego 04/30/18 15.58 2a Rodney Johnson III Shreveport 06/17/18 22.04 3a Scott Monaco New Orleans 06/20/18 21.47 Max Stephen Plunkett Shreveport 04/09/18 26.92 3a Eric Stahl Gretna 06/01/18 25.01 02

NEW BUSINESS

Investment Consultant’s Report

Mr. David Barnes represented NEPC and presented the Investment Market Update for the system. The total market value as of May 31, 2018 was $2,102,640,767 and performance was down 0.1% for the month and up 8.1% for the fiscal year to date.

Mr. Barnes referenced a memo dated June 11, 2018 in which NEPC provided to the Trustees regarding Standard Life GARS Performance-Based Fee Option. MPERS has approximately $107.1 million invested in Standard Life Global Absolute Return (GARS) strategy, representing 5.1% of the portfolio. MPERS currently pays 0.75% in management expenses for the GARS strategy.

Because of underperformance of the fund and a recent merger with Aberdeen, NEPC has negotiated a new fee schedule with the fund. A summary of the fee schedule is: • Base fee of 45 bps plus 10% of the Fund’s excess return over cash plus hurdle of 200 bps

June 20, 2018 Page 3 of 6 Minutes • Annual maximum cap of 85 bps • Calculated annually based on rolling three-year performance • Then applied prospectively (as a flat fee) for the next 12 months • This option is only available to NEPC clients

Motion by Ms. Mathews seconded by Mr. Reech to accept the new fee option as recommended by NEPC and have NEPC provide a review of Standard Life’s performance quarterly. Without objection, the motion carried.

Mr. Barnes reviewed the private equity strategy and MPERS’ targets and allocations. NEPC recommends that MPERS should consider a $65 million commitment allocation for 2018 and 2019 vintage year funds. HarbourVest and Warburg Pincus are two private equity firms in which MPERS currently has funds committed and has performed well for the retirement system.

Presentations were given by both managers:

HarbourVest Nate Bishop, Investor Relations Ian Lane, Direct Investments

Warburg Pincus John Shearburn, Managing Director

Motion by Ms. Mathews seconded by Mr. Greene to approve a $20 million commitment to HarbourVest Partners Co-Investment Fund V and a $20 million commitment to Warburg Pincus Global Growth Fund. With no objections and Senator Peacock abstaining, the motion carried.

Acadian Asset Management

Mr. Jim Klapman and Mr. Scott Brymer represented Acadian Asset Management and presented their annual report to the board. The market value as of May 31, 2018 was $123,383,762.

Dimensional Fund Advisors

Ms. Kristen Jackson and Mr. Horacio Carias represented Dimensional Fund Advisors and presented their annual report to the board. The market value as of May 31, 2018 was $83,303,048.

Consideration of adoption of revision to disability retirement policies

Mr. Huxen highlighted the updates to the disability retirement policy.

Motion by Mr. Reech seconded by Mr. Greene to defer any action on the updated disability policies until the July 18, 2018 board meeting. Without objection, the motion carried.

Consideration of approval of the FY 2019 operating and capital budgets

Mr. Huxen presented the proposed operating budget and proposed capital budget. Motion by Mr. Reech seconded by Mr. King to approve the 2019 operating and capital budgets. Without objection, the motion carried.

Executive Director and General Counsel Comments

Mr. Huxen provided the board with a list of invoices paid by the retirement system during the prior month for their review. The board had no questions regarding any payments issued.

June 20, 2018 Page 4 of 6 Minutes

Mr. Huxen reported that MPERS is still working on Baton Rouge overtime issues and meeting weekly with the City of Baton Rouge attorney and Baton Rouge Police Union attorney. He hopes to have a Memorandum of Understanding (MOU) at the next board meeting. MPERS’ auditors are still receiving salary information from the City of Baton Rouge in order to recalculate benefits and provide such information to the actuary so that he can determine costs associated and determine how to proceed.

Mr. Huxen provided an update on the pension administration system. He stated that we are currently 6% ahead of schedule and on track to go live with the imaging system in early August 2018.

Mr. Huxen gave an update on direct deposit efforts, stating that we have been receiving many enrollments and only a small amount of push back.

Mr. Huxen announced that all of our 2018 legislation has been signed by Governor Edwards and thanked Senator Peacock for all his involvement.

Mr. Huxen mentioned that member outreach is ongoing with staff members having attended the Regional Training Academy in Shreveport, City of Hammond Retirement Seminar and the Magnolia Peace Officers’ Conference in Alexandria.

Mr. Huxen reminded the Board of the July 10, 2018 meeting with MERS, MPERS, FRS and the Louisiana Legislative Auditor at the Louisiana Municipal Association building located at 700 North 10th Street, Room 2, Baton Rouge, LA 70802.

Discussion regarding possible settlement of recovery of certain overpayments of benefits paid to Kevin Thomas due to a mistake of law

Jeff M. Bailes vs. MPERS, 19th JDC, No. 644,057 Sec. 26: Consideration of proposed settlement

Motion by Ms. Mathews seconded by Mr. Burkart to enter into executive session at 11:35 a.m. for agenda items (h) and (i), matters concerning Mr. Kevin Thomas and Mr. Jeff Bailes. Without objection, the motion carried.

Motion by Mr. Suchanek seconded by Mr. Calloway to enter back into regular session at 12:01 p.m. Without objection, the motion carried.

Motion by Ms. Mathews second by Mr. Burkart to accept signed settlement agreements from Mr. Kevin Thomas and Mr. Jeff Bailes. Without objection, the motion carried.

Evaluation of Christopher L. Ahner’s continuing eligibility for disability benefits under R.S. 11:220 and R.S. 11:2223(E) and consideration of modification of his benefits under R.S. 11:192 and R.S. 11:221

Chairman Ford asked if Mr. Ahner would prefer to have his evaluation held in executive session. Mr. Ahner elected to have his evaluation held in open session.

Ms. Sheri Morris, Attorney for MPERS, provided background information regarding Mr. Ahner’s case, stating that this is a disability case and it is undisputed that on February 12, 2000, Mr. Ahner was severely injured in a motor vehicle accident, in the line of duty, including broken legs, hips and vertebra. In 2006, Mr. Ahner was awarded a disability benefit of 100% of his average final compensation. Benefits of 100% of average compensation are limited by statutes to two categories of beneficiaries. Under R.S. 11:2223(E)(2) there is a limitation for injuries that occurred on or after July 1, 2003. Because Mr. Ahner was injured prior to July 1, 2003, he does not fall within that enhanced benefit provision. Under R.S. 11:2223(E)(1), there are also enhanced benefits for beneficiaries who are in a coma or paraplegic. It is undisputed that Mr. Ahner does not fall in that category either. Therefore, the benefit entitlement which is applicable to Mr. Ahner upon certification of total and permanent disability is 40% of average final compensation.

June 20, 2018 Page 5 of 6 Minutes

Mr. Ahner has been requested to send income verification, because disability benefits are reduced by income for gainful employment. As of this moment, he has not provided that information but stated that he will provide it to the board today.

With respect to his gainful employment, there is an income reduction unless you fall within a statute that gives you an exemption. It is undisputed that Mr. Ahner does not fall in any of those categories except for possibly one, and that is a factual determination that has to be made. That is the one that applies to certain bilateral knee injuries.

Ms. Morris stated that at a previous board meeting, she asked the board for an opportunity to meet with Mr. Ahner to come up with a resolution to this matter. In the interim, Mr. & Mrs. Ahner has had several discussions and communications by email with Ms. Morris who was hopeful to have and recommend a settlement to the board. However, Mr. Ahner communicated a counteroffer and is here today to present that offer.

Mr. Ahner attended that board meeting to provide further information regarding his evaluation. He brought enlarged, current x-rays, binders of medical records, and memorabilia from his accident, along with WVUE-TV.

Mr. Ahner stated that he was directed by Mr. Burkart and Mayor Villere that the best resolution to this matter would be to contact his legislators but before he could do so, Mr. Huxen had already reached out stating that pension systems as a whole are not designed to fund a luxurious lifestyle. He believes that was an attempt to muddy the waters to influence the senators. He believes he has followed every rule and guidance for the last ten years while receiving his benefits. He stated that he brought his display again for the benefit of Senator Peacock who is attending the meeting.

He was led to believe to that the reduction in his benefit was based on the fact that he had applied for disability under the parameters of PTSD. Although he has been diagnosed with PTSD and suffers from the symptoms, he has copies of the original disability application that has nothing to do with PTSD. He feels like MPERS has been less than respectful to him in a sense that he has followed every guideline presented to him. He has documentation from Virginia Eckert, MPERS’s director in 2006, stating that he had no income restrictions.

He believes there has been some miscommunication in how much fulltime employment he has had. He stated that one year or so after Hurricane Katrina, he did work for the Louisiana National Guard. Although they were called military police, they were not law enforcement, they were a security force to augment the New Orleans Police Department.

He requested for the board to re-review the documentation that he provided regarding how he applied for disability benefits. Under no circumstances did he apply under the parameters of PTSD even though he suffers from the symptoms. He explained that he came to the meeting today in his shorts so that everyone could see the miracles in his legs.

Mr. Ahner stated that he joined the National Guard at 17 ½ years old. After he was injured and it was determined by Chief Warren Riley and the police doctor that if was unsafe for him to patrol the City of New Orleans, he retired based on their recommendation.

The Louisiana National Guard continued and still continues today to keep him in an employment position. Mr. Ahner explained that he has been employed by the National Guard fulltime as a quality assurance inspector for just over four years. His current enlistment ends on August 18, 2018. He has been in discussions with his current commanders. They are not sure, based on the non-ability for them to continue to hide him within the system, that he will be extended again after thirty-three years of service. He requested the board put common sense in what they are doing.

June 20, 2018 Page 6 of 6 Minutes Mr. Ahner asked the board if they had any questions, he would be happy to answer them today in open session. He stated that he has nothing to hide. He wanted Senator Peacock to know that he received a letter stating that he would receive his benefit for life. Then twelve years later he received a letter stating that the previous board has made a mistake and MPERS is holding him responsible. Mr. Ahner referred to the pension system losing significant money on golf courses and doesn’t think the retirement system should try to recoup those loses off the backs of seriously injured police officers, because that is the perception.

Mr. Ahner stated that he is tired of coming to the board to try to explain his point. He said he was prepared to talk about a counteroffer, because the board has cornered him with nowhere to go.

Discussion was held regarding whether or not Mr. Ahner was required to repay over $259,000 that MPERS says was overpaid to Mr. Ahner. Ms. Morris stated that in the settlement offer to Mr. Ahner, there is an option to forgive the $259,000 in lieu of benefits reduced to 40% and no further legal action. Mr. Ahner has not agreed to this settlement offer. Mr. Ahner explained that he does not believe a settlement is in order.

Mr. Ahner asked the board again to voice any questions they might have. Senator Peacock asked Mr. Ahner if he believed that disability cases should be reviewed periodically. Senator Peacock stated that he felt MPERS’s board has done its fiduciary duty to review these cases. He stated that when the news story was aired on TV, legislators did make inquiries of the case and the main issue was Mr. Ahner’s ability to work. Senator Peacock praised the work of all law enforcement and said he appreciates all their work. He believes the board is applying the law and he stands by the board and supports them. He advised Mr. Ahner to work with legal counsel to resolve the issue whether thru legal action or a settlement.

Mr. Ahner reiterated the fact that he was advised to communicate with legislators to resolve his issue of his disability benefit being reduced. Senator Peacock advised that the news story did not report that Mr. Ahner had the ability to work. Mr. Ahner stated that he was advised that he was allowed to work and still earn 100% of his benefit. Mr. Ahner asked that the board apply common sense.

Mr. Reech suggested that Mr. Ahner meet with legal counsel to have further communications regarding a settlement.

Mr. Ahner provided information from his 2017 W-2 from the Louisiana National Guard, which stated his earnings were $62,010.00. He stated that this was the first year that he has been asked to provide such information.

Mr. Burkart asked Ms. Morris if MPERS had received a written counteroffer from Mr. Ahner. Ms. Morris stated she has written email exchanges regarding counteroffers but nothing signed by Mr. Ahner. Mr. Burkart asked Mr. Ahner when he would be able to provide a firm written counteroffer from Mr. Ahner. Mr. Ahner’s reply was “within 6 days, 4 hours and 27 seconds.”

Motion by Mr. Suchanek seconded by Mr. Burkart to table any action on Mr. Ahner’s case until the July 18, 2018 board meeting with a clear written settlement agreement for the board to review.

Motion by Mr. Burkart seconded by Mr. King to adjourn the meeting at 12:35 p.m. Without objection, the motion carried.

To the best of my knowledge, the foregoing minutes accurately represent the actions taken at the meeting held June 20, 2018.

______G. Scott Ford, Chairman Ben Huxen, Executive Director & General Counsel