By ILSA MINOR

Daily Press

ESCANABA — The city of Escanaba approved resolutions Thursday to exit the Michigan Municipal Employees Retirement System, commonly known as MERS, and self-manage the investments that support the program.

At the start of Thursday’s meeting, Tara Langham addressed the council during public comment to present a letter from MERS CEO Kerrie Vanden Bosch. Langham did not read the letter, but shared responses to some of the concerns raised by the council the last time MERS presented to the council on Oct. 5.

Specifically, Langham said MERS provided a list of the private investments backing the defined benefit pensions in February. She also said that, despite concerns the valuation from MERS could not be independently justified, the programs investments are calculated by a custodial bank that is regularly audited, and MERS itself provides regular financial reports.

“I provide you this information tonight just to highlight that we do have a deep commitment to the city and and a track record of transparency to our members,” said Langham.

However, City Manager Jim McNeil, who had been sent the letter prior to the meeting, took issue with some of MERS responses to the city’s concern.

“There were a couple of things in the letter that I thought were misleading,” he told the council.

According to McNeil, the city requested more detailed information about MERS investment holdings than was provided. He said the city was provided with a list of investment managers, but was not given enough information for the city to know what the actual investments were.

“It wasn’t the level of transparency that we had asked,” said McNeil.

He said it was also not a Freedom of Information request, as stated in the letter.

While McNeil did not argue that the assets were valued by a third party, he said the way the assets were valued was not shared with the city.

“There are a variety of ways for valuation. We’re familiar with what they are, and it would have been nice to at least have a peek and make sure that we’re comfortable with the assumptions used,” he said.

There were also concerns from the city about MERS’ actuarial smoothing policy, which was changed after the 2008 financial crisis. MERS pointed to the new methods used, but McNeil was more concerned with the program’s track record.

“Our point was that there’s a track record of poor policy, and it’s been repeated time and time again,” he said.

The council voted in a 4-1 split vote to pass a resolution terminating the agreement with MERS. They then voted in a second 4-1 split vote to approve a resolution adopting its own plans and policies, pending minor typographical corrections by an attorney.

Voting against both resolutions was Council Member Todd Flath. He did not provide a reason for the vote.