MINUTES OF THE REGULAR MONTHLY MEETING
GENERAL EMPLOYEES RETIREMENT BOARD
TUESDAY, MAY 19, 2009
The Board of Trustees of the General Employees Retirement Fund convened in a regular session at 1:00 p.m. on this the 19th day of May, 2009, in the Fifth Floor Conference Room, Tampa Police Department Building, 411 North Franklin Street, Tampa, Florida, with John Tapley, Chairman, presiding. Members present upon roll call were Ernest Cabrera, Alan Weiner, Bonnie Wise, Steve Kenny, Jerry Winters, and John Tapley.
Randy Goers was absent.
City Staff in attendance were Justin Vaske, Assistant City Attorney (ACA) and Board Attorney; Maria Rivera, Recording Secretary; Marlene Herrera, Payroll & Pension Supervisor; Deborah Hodo, Plan Investment Coordinator; and Lee Huffstutler, Chief Accountant.
Others in attendance were Jay Love, Mercer Investment Consulting; Keith Reynolds, Mercer Investment Consulting; John Lessl, AON Consulting; Kevin Johnson, Dodge & Cox; Mark Cooper, Wells Capital-Benson; Amy Scupham, Wadell & Reed; Phil Sanders, Wadell & Reed; Greg Johnsen, Wellington Management Company, LLP; Sharon Skrimshire, Retiree; and Thomas Sanchez, City of Tampa Internal Audit Department.
PRESENTATIONS
Presentation by Stacey Nutt, CIO and Portfolio Manager, Clarivest Asset Mgmt.
Presentation by Kevin D. Johnson, Analyst, Dodge & Cox
Presentation by Amy Scupham, Waddell & Reed Asset Mgmt. Group, Inc.
Presentation by Phil Sanders, Waddell & Reed Asset Mgmt. Group, Inc.
Presentation by Greg Johnsen, Investment Director, Wellington Mgmt. Company, LLP
Presentation by Mark Cooper, Senior Portfolio Manager, Wells Capital-Benson
Mr. Tapley called for introductions of all present. The annual Domestic Equity Managers Panel Discussion was then conducted with the above managers presenting. The managers made a brief statement of their respective company’s performance to date followed by a question and answer period on topics such as the market outlook (domestic equity returns expectations, view of the financial sectors, view on domestic versus international equity, impact of government stimulus, etc.), investment styles, and their preference on future asset class investments and stock selections. Mr. Jay Love, Mercer Investment Consulting acted as moderator.
A paper and recorded copy of the manager’s presentations are available in the Pension Office for review.
There was a 12 minute break after the presentations. The meeting resumed at 3:12 p.m. with all, excluding the domestic equity managers, present.
PRESENTATIONS CONT’D.
Presentation by Jay Love and Keith Reynolds, Mercer Investment Consulting – Investment Performance for period ending March 31, 2009:
Mr. Reynolds indicated that investors started the year fearful due to the continued weak economic news such as rising unemployment (8.5%) and failing industrial production and uncertain as to what actions the government and government agencies were going to take next to combat the global recession. Despite negative news the market seemed to make a dramatic turn upward at the beginning of March and has continued the upward climb. Investors began to seek out riskier investments, seeing value in investments that were dramatically oversold and becoming more comfortable with the programs outlined by the Treasury, Fed and Congress to increase cash flow in the economy and help stabilize the banking industry. Moves by both the US and global governments seemed to calm investors’ fears and encourage them back into the assets that had been perceived as too risky over the last 12 to 18 months,. In the US the Financial Stability Plan was unveiled by the Treasury and the administration passed the American Recovery and reinvestment Act. Further clarity was then provided on the Public-Private Investment Program (PPIP) and the Term Asset Loan Facility (TALF). Despite a strong rally in March, the returns from the equity market both domestically and internationally ended the quarter negative.
In this market environment, Total Fund assets decreased by $36.8 million during the quarter from $433.3 million as of December 31, 2008 to $396.5 million on March 31, 2009. This decrease was due to approximately $31.1 million in net investment losses and $5.7 million in net cash outflows. The Total Fund’s asset allocation on March 31, 2009, was 58.3% equity, 34.7% fixed income and cash, and 7.0% real estate. The Fund remained within its policy range at quarter end.
The Total Fund returned -7.3% for the first quarter, which led the Composite Index return of -7.9% but ranked in the 88th percentile of the Russell Mellon Total Plans < $1 Billion Public Funds Universe, which is comprised of 20 plans. The highlights of the quarter were the strong relative results from the fund’s domestic equity managers with the exception of ClariVest in small cap growth. Results were also aided by outperformance from Fisher in international equity and UBS in real estate.
For the trailing twelve months, the Total Fund returned -27.9% which slightly lagged the Composite Index return of -27.8% and ranked in the 61st percentile of its peer group universe. For the longer five-year period, the Total Fund led the index and ranked in the top half of the universe.
Mr. Carrera asked that the Pension Staff be more expeditious in processing Mercer’s investment recommendations that have been approved by the Board, namely, the State Street Global change from the Aggregate Index Fund to the Intermediate Credit Index Fund as to not miss returns on investments. Mr. Love stated these recommendations are handled jointly by Mercer and the Pension Office Staff; Mercer taking care of contacting the manager to inform them of the decision and upcoming transaction. Ms. Hodo and Ms. Herrera explained that when these transactions occur, factors like contract signatures and fund transfers need to be coordinated and may, on occasions, delay the process. They noted that all requests are resolved as fast as their specific process allows. ACA Vaske also noted that now that the agreements and contracts do not need to go to City Council, things will take less time to process; he also stated that the April meeting had been canceled, delaying any actions that had to be taken.
Mr. Love gave a brief summary of the Performance Review Process that was discussed in detail at the Investment Committee Meeting which preceded the Regular Board Meeting that morning (a copy of the presentation is available at the Pension Office). He discussed the evaluation process used in selecting an investment manager, performance monitoring, and the criteria used in deciding to put them on a “watch list” if there are continued periods of under performance. There was discussion of the process amongst Board members.
DISCUSSION AGENDA CONT’D
Approval of DROP Rate of Return for quarter ending March 31, 2009:
Ms. Herrera indicated that the DROP Rate of Return for the quarter ending March 31, 2009 was a -19.51%. Mr. Love, Mercer Investment Consulting agreed with this return.
Mr. Tapley asked if notice of this DROP Rate of Return had been posted. Ms. Herrera stated she had to wait for the Board’s approval of the rate to do so.
Motion: (Wise-Kenny) Ms. Wise made a motion to accept the DROP Rate of Return of -19.51% for the quarter ending March 31, 2009 as reported by Ms. Herrera and confirmed by Mercer Investment Consulting. Motion carried.
Minutes of the Regular Board Meeting held on March 17, 2009:
Mr. Tapley asked if there were any corrections to the Regular Board Meeting held on March 17, 2009 minutes. None were noted.
Motion: (Kenny-Wise) Mr. Kenny made a motion to approve the Minutes of the Regular Board Meeting held on March 17, 2009. Motion carried.
Staff Report:
Ms. Davis’ Letter – Board Request:
Mr. Tapley stated that, as per the request of the Board at the last Regular Board Meeting, enclosed for their review was a letter addressed to Ms. Davis informing her of the Board’s denial of her request for surviving spouse benefits and her right to appeal the Board’s decision.
Ms. Terp’s Letter – As per March 09’s Motion:
Mr. Tapley stated that in each trustee’s package there was a copy of the letter sent to Ms. Terp informing her of the Board’s denial of her request to have her monthly pension reinstated.
Investment Matters:
Investment Manager communications were received as follows:
Fidelity Real Estate Group requested the Board’s approval for Fidelity Real Estate Growth Fund, L.P. to extend the scheduled termination date from May 31, 2009 to December 31, 2010 to facilitate the orderly liquidation of the remaining investment of the Grand Regency at City Walk. If the Board agreed to the amendment, no action needed to be taken. There was agreement by the Board to grant this extension. ACA Vaske indicated that he had drafted an amendment to reflect this change in dates.
UBS Global Asset Management’s communication regarding Client-to-Client Transfers. This letter is for informational purposes only.
Waddell & Reed’s communication regarding their market outlook and their performance for the City of Tampa GE Pension.
Taplin’s communication informing the Board of the upcoming change to the Lehman’s fixed income indices. They are planning to add a US Hybrid Adjustable Rate Mortgage to the Lehman Brothers Aggregate Bond Index.
Waddell & Reed’s communication regarding a change in personnel.
Wellington Management’s communication regarding changes in personnel.
CONSENT AGENDA
Approval of invoices due for payment for April and May 2009.
Approval of Travel Reimbursement for Jerry Winters.
Comserv’s Report for April 7, 2009 and May 7, 2009.
Longevity Retirements, Deferred Retirements, Deferred Retirement Option Plan (DROP) Applications, Surviving Spouses’ Benefits, and Estate Payments for May 2009:
Mr. Tapley asked Ms. Herrera if all the items on the Consent Agenda were in order. Ms. Herrera stated that they were.
Motion: (Wise-Kenny) Ms. Wise made a motion to approve the Consent Agenda. Motion carried.
DISCUSSION AGENDA CONT’D
Discussion on Pension Benefits regarding Ms. Thompson, A.K.A. Anderson, Application for Common-Law Spousal Benefits:
ACA Vaske indicated that there was a request by Ms. Thompson for common-law spousal benefits. He stated that common law was only recognized by the state until December 31, 1967. Ms. Thompson has stated that Herschell Anderson, who was a City of Tampa General Employees Pension retiree, and her had a common-law marriage prior to 1967 and has submitted evidence to that effect. The Pension Office will include all evidence presented by Ms. Thompson in next month’s Regular Board Meeting Agenda so the Board may review the same and render their determination on whether Ms. Thompson is entitled to common-law spousal benefits. Ms. Thompson will be contacted to inform her that the Board will hear and decide her request at the next Board meeting and of her right to be present and address the Board.
Motion: (Winters-Kenny) Mr. Winters made a motion for the Board to hear Ms. Thompson’s request at the next Regular Board meeting. Motion carried.
Discussion on Pension Benefits regarding Deferred and Early Retirement:
ACA Vaske stated that some questions had been raised on whether an employee could change to an Early Retirement after being in a Deferred Retirement status. He indicated that Section Ten (10) of the Plan states that the person has to be vested, a City employee, and fifty five years or older to be eligible for an Early Retirement. If an employee, being vested, retirees at an age younger than fifty five, he could only apply for a Deferred Retirement and, upon reaching the age of fifty five, he would not be eligible to receive an Early Retirement as he was no longer an active City employee, which is one of the requirements for Early Retirement.
Furthermore, if an employee is laid off before reaching age fifty five and is placed on the Human Resources waiting list; i.e. does not officially separate from the City at the time laid off, and turns fifty five before separating, would he be able to elect an Early Retirement at the time of separation? ACA Vaske stated that he would not be able to choose the Early Retirement option as he would not meet the definition for Continuos Service (he directed the Board to page 5 of the Pension Plan) as the employee would have had to be reinstated from their lay-off status. Even though a lay-off falls within the “involuntary severance from service through no fault of the Employee” description of continuos service the employee would have had to have been reinstated so that, upon reaching the age of fifty five, he would be an active City employee and hence meet the requirement for Early Retirement which, as previously mentioned, states that you have to be a “City Employee” to be able to apply for Early Retirement. If you are not reinstated, your time of separation dates back to the time you were placed on lay off status, and this time does not accrue any pensionable time.
Motion: (Wise-Carreras) Ms. Wise made a motion to accept ACA Vaske’s recommendations on the interpretation of the Deferred Retirement and Early Retirement provisions of the Pension Plan.
Discussion on Pension Benefits inquiry from Alegcy Salgado:
Mr. Tapley indicated that they had received a letter from Ms. Alegcy Salgado requesting that the City of Tampa General Employees’ Pension Board start her pension before she reaches the required age of sixty two. Ms. Salgado is in a Deferred Retirement status and is not eligible for and Early Retirement for the reasons already discussed above.
Motion: (Wise-Kenny) Ms. Wise made a motion to deny Ms. Salgado’s request to start her pension before reaching the required age of sixty two, as this does not fall within the parameters of the Pension Plan as just discussed by ACA Vaske.
Mr. Kenny emphasized that a letter needs to be sent to Ms. Salgado informing her of the Board’s decision, as required by the Plan’s Policies and Procedures.
Motion carried.
Discussion concerning non-payment of overpayment from Andrea Palmore:
Mr. Tapley stated that Ms. Andrea Palmore signed a promissory note to repay an overpayment in the sum of $1,544.24 and, after making 3 payments of $128.68 each, had not made any further payments thus having an unpaid balance of $1,158.20 of which $514.72 are in arreas ($128.68 X 4 months).
Motion: (Kenny-Winters) Mr. Kenny made a motion for the Legal department to take any necessary action to collect the amount owed to the Pension Plan. Motion carried.
Discussion concerning non-payment of overpayment from Barbara Williams:
Mr. Tapley stated that Ms. Barbara Williams signed a promissory note to repay an overpayment in the sum of $3,056.16 by making weekly payments of $50.00 commencing November 2004 until repaying the total amount owed. As of July 19, 2005, there have been no further payments to the General Employees’ Pension Office. The unpaid balance of the promissory note is currently $2,431.16. The Pension Office had not been able to locate Ms. Williams, however, using a software specific to the Legal Department (“Westlaw”), they have succeeded in locating Ms. Williams and are therefore now able to take action.
Motion: (Kenny-Wise) Mr. Kenny made a motion for the Legal department to take any necessary action to collect the amount owed to the Pension Plan. Motion carried.
Board’s Approval on contract amendments to ClariVest, Taplin, Wells, and Dodge & Cox:
ACA Vaske stated that there had been changes to the Statement of Investment Policy and he had prepared four resolutions to amend the above named managers’ contracts to reflect these changes. He then presented them to the Board for approval.
ACA Vaske indicated that, as discussed earlier in the meeting, a fifth resolution was also being presented to amend Fidelity Real Estate’s contract to reflect their request to extend the scheduled termination date of their investment.
Motion: (Wise-Kenny) Ms. Wise made a motion to approve the resolutions to amend the contracts with ClariVest, Taplin, Wells, Dodge & Cox, and Fidelity Real Estate. Motion carried.
Board’s Approval on New Contract ING:
ACA Vaske stated that there was a resolution before them to approve the contract for the new Global Real Estate Manager, ING.
Motion: (Kenny-Weiner) Mr. Kenny made a motion to approve the resolution for the ING contract.
MISCELLANEOUS DISCUSSION
Mr. Tapley asked for the Agenda pages to be numbered to facilitate locating the documents at the meetings.
Mr. Tapley indicated that all trustees had been given a memo that Ms. Sharon Skrimshire, a City of Tampa General Employees Pension Fund retiree, had handed him at the beginning of the Board meeting. The memo addressed several concerns she had with the City of Tampa General Employees Pension Fund. She was requesting the Board to address and respond to these concerns. Due to the length of the meeting, Ms. Skrimshire had to leave before her request could be addressed. Mr. Tapley informed her that her request would be addressed at the next Regular Board Meeting. Mr. Tapley asked the Trustees to review Ms. Skrimshire’s communication as to be able to provide their input at the next Board Meeting.
Mr. Kenny indicated that due to Mr. Carron’s resignation from the Board of Trustees, a Vice-Chairman had to be elected being that Mr. Carron held that position. He stated that this should have been an agenda item. The election of a new Board of Trustees Vice-Chairman will be on the next Regular Board Meeting agenda.
Mr. Kenny stated that the Board should have been notified of the change in the Pension staff, namely the retirement of Paul Broughton, the Plan Coordinator, Mr. Carron’s resignation, and the appointment of a new trustee, at the time the events transcended. Ms. Herrera explained that Mr. Tapley had been informed of Mr. Broughton’s retirement and that she had not been instructed at that time by Mr. Tapley, or her supervisor, to inform the remainder of the Board. She had intended to inform everyone at the April Board Meeting however, with the cancellation of that meeting, the news had been postponed to this meeting.
Mr. Huffstutler apologized for the lack of communication and stated that he strongly supports open communication between the Pension Office, the Administration, and the Board of Trustees and will ensure that it is provided in the future.
Mr. Huffstutler informed the Board that a General Employees Retirement Education Plan (GEREP) is being created to educate employees on the Pension Plan, 457 Plan, Social Security, and Human Resources separation benefits. At present, they are working on the communication plan and the scheduling. The first session will be presented to the administration with the employees to follow. Mr. Tapley, as Chairman, will be asked to be part of the Agenda, and all Board members will be invited to attend. Details will be communicated as they develop.
Old Business:
$20,450.80 Loss on conversion of 4,000 shares of Global Acquisition Corporation:
ACA Vaske indicated that the Legal Department’s litigators are still working on this matter.
Gaetano Dalfino’s Deferred Retirement Option Program Payment:
ACA Vaske indicated that a proposal had been presented to Mr. Dalfino and the Legal Department should be able to present a settlement agreement to the Board by next month.
Overpayment on behalf of Mrs. Rita M. Wilson, formerly Mrs. Rita M. Crawford:
ACA Vaske indicated that the Legal Department’s litigators are still working on this matter.
ADJOURNMENT
There being no further business to come before the General Employees Pension Board at this time, Chairman Tapley adjourned said meeting at 4:35 p.m. on this 19th day of May, 2009.
__________________________________
CHAIRMAN
________________________________
RECORDING SECRETARY
___________________________________
PLAN COORDINATOR
|
