MINUTES OF THE REGULAR MONTHLY MEETING
GENERAL EMPLOYEES RETIREMENT BOARD
TUESDAY, AUGUST 18, 2009
The Board of Trustees of the General Employees Retirement Fund convened in a regular session at 1:00 p.m. on this the 18th day of August, 2009, in the Fifth Floor Conference Room, Tampa Municipal Office Building, 306 E. Jackson Street, Tampa, Florida, with John Tapley, Chairman, presiding. Members present upon roll call were Ernest Cabrera, Bonnie Wise, Randy Goers, Steve Kenny, and John Tapley.
Alan Weiner and Jerry Winters were 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 John Lessl, AON Consulting; Jay Love, Mercer Investment Consulting; and Keith Reynolds, Mercer Investment Consulting.
APPROVAL OF MINUTES
Regular Monthly Meeting held on Tuesday, July 21, 2009:
Mr. Tapley asked if there were any corrections or changes to the minutes. None were noted.
Motion: (Wise-Goers) Ms. Wise made a motion to approve the Regular Monthly Meeting held on Tuesday, July 21, 2009. Motion carried.
STAFF REPORT
Investment Matters:
Approval of Overall Investment Policy: Ms. Hodo stated that the final Statement of Investment Policy was being presented for approval by the Board and filing with the State of Florida.
Ms. Wise commented that she had received two separate calls from persons who want the City to adopt a policy of not doing business with companies that invest in Iran and Sudan. She asked if this was something that the Board would like to examine, and whether the Special Act would have to be amended as a result. ACA Vaske indicated that he is familiar with the request, and that the Special Act would not have to be amended; rather, the Statement of Investment Policies would be updated. He also stated that this is a broad initiative that would not only include not doing investments with Iran and Sudan, but also with any countries that conduct business with them. Mr. Love, Mercer Investment Consulting stated that the Florida Retirement System has this provision in it’s investment policy, however, he cautioned that this is possible for the FRS because of their fund size, but could prove very disruptive to the Pension Plan’s investments. Ms. Wise indicated that she approves of the Investment Policy as it stands, but being that she had been approached with this situation, she wanted to share it with the Board. It is possible that one of the requestors will make a presentation to the Board. There was discussion among Board members.
Motion: (Kenny-Goers) Mr. Kenny made a motion to approve the Statement of Investment Policy and filing with the State of Florida. Motion carried.
Non-domestic equity manager’s invitation for September 15, 2009 Board Meeting: Ms. Herrera stated that the non-domestic equity managers: Mercator, Fisher, Victory, and Aberdeen, are scheduled to do their yearly presentations at the September regular board meeting. Mr. Love asked if the Board wanted to do individual presentations or wanted to use the panel format as is done with the equity managers. It was agreed that the presentations would be conducted in the panel format at the TPD building.
Updated distribution list to all money managers: Ms. Hodo stated that, upon Ms. Wise request, she had updated the money manager’s distribution list and it was attached for their information.
Update on motion regarding manager’s resolutions: Ms. Hodo indicated that all manager resolutions signed by Mr. Tapley at the July meeting had been processed. ACA Vaske stated that all agreements are now up to date.
Cash analysis report: Presented for information purposes only.
Money manager’s expense report: Presented for information purposes only. Mr. Tapley indicated that he would like to see a year end report on how much the Fund has paid to each manager and how much they have earned for the Fund. Ms. Herrera will provide.
Renewal of fiduciary insurance for the Board: Ms. Herrera indicated that Ms. Regina Lock, Risk Management Department, was processing the renewal of the trustee’s fiduciary insurance. Mr. Huffstutler stated that he had given Ms. Lock all the information she had requested, and Ms. Lock would present the different proposals at the next board meeting.
City of Tampa RFP for a physician for pre-employment and pension office disability applicants: Ms. Herrera indicated that the City had issued an RFP for a pre-employment physician. Ms. Wise stated that the Board was being informed as this physician also conducts the Fund’s disability examinations.
Request for approval for City staff to attend the FPPTA Trustee School in October 2009: Ms. Herrera indicated that they were requesting approval for Mr. Huffstutler, Ms. Hodo, and herself to attend the FPPTA October Trustee School in Florida. Mr. Tapley, Mr. Goers, Mr. Kenny, and ACA Vaske are attending and are approved to do so by the Board’s policies and procedures. Ms. Wise stated that since a period of time may lapse before a plan coordinator is in place, she thought it would be prudent for Ms. Herrera to attend and earn a CPPT certification. There was discussion amongst Board members.
Motion: (Kenny-Goers) Mr. Kenny made a motion to approve Ms. Herrera to attend the October FPPTA Trustee School in Florida and obtain her CPPT certification. Motion carried.
CONSENT AGENDA
ABERDEEN ASSET MANAGEMENT INC. $36,505.64 BILLING FOR QUARTER ENDING JUNE 2009; AON CONSULTING $27,600.00 BILLING FOR JANUARY 1, 2009 (FY2010) ACTUARIAL VALUATION; CITY OF TAMPA REIMBURSEMENT OF $11,706.00 FOR THE MONTH OF JULY 2009; CLARIVEST INVESTMENTS $18,442.31 BILLING FOR THE QUARTER ENDING JUNE 2009; COMSERV’S $55.00 BILLING AND COMSERV REPORT FOR JULY 2009; FISHER INVESTMENTS $74,358.77 BILLING FOR THE QUARTER ENDING JUNE 2009; LISTING OF CONFERENCES AND SEMINARS AS OF AUGUST 2009; MERCER INVESTMENT CONSULTING’S $9,166.00 BILLING FOR THE MONTH OF JANUARY 2009; MERCER INVESTMENT CONSULTING’S $15,418.00 BILLING FOR JUNE 2009; TAPLIN, CANIDA, HABACHT, LLC $41,955.29 BILLING FOR THE QUARTER ENDING JUNE 2009; WADDELL & REED $77,356.18 BILLING FOR THE QUARTER ENDING JUNE 209; WELLS FARGO $27,204.61 BILLING FOR THE QUARTER ENDING JUNE 2009; LONGEVITY RETIREMENTS, DEFERRED RETIREMENTS, DEFERRED RETIREMENT OPTION PLAN (DROP) APPLICATIONS, AND SURVIVING SPOUSES’ BENEFITS FOR AUGUST 2009.
Mr. Tapley asked Ms. Herrera if all Consent Agenda items were in order. Ms. Herrera stated that they were.
Motion: (Kenny-Wise) Mr. Kenny made a motion to approve the Consent Agenda. Motion carried.
NEW BUSINESS
Presentation by Jay Love and Keith Reynolds, Mercer Investment Consulting: Investment Performance for period ending 6/30/2009:
Mr. Love gave an overview of the economy. He stated that economic signs showed not that things were getting better but that things were not getting bad as fast as they previously had been. There was some improvement in unemployment rates, the housing market, and consumption decreases began to stabilize. The total fund assets increased by $47.3 million during the quarter from $396.5 million as of March 31, 2009, to $443.8 million on June 30, 2009. The total fund’s asset allocation on June 30, 2009, was 61.8% equity, 29.1% fixed income and cash, and 9.1% real estate.
Mr. Love continued to discuss the market conditions in detail. Mr. Keith Reynolds then reported the manager’s performance for the quarter ending June 30, 2009.
A copy of Mercer’s presentation is available in the Pension Office for review.
Mr. Love stated that Mercers recommendation to shift from SSGA’s Aggregate Index Fund to the SSGA Intermediate Credit Index Fund in order to lower the U.S. Treasury Bond holdings and increase the Corporate Bond holdings had proven advantageous. He is now recommending closing out the corporate position and move the funds to the Aggregate Index Fund Non-Securities Lending. He stated that a portion of the SSGA investment are in the Securities Lending Fund portion of the aggregate fund, so the recommendation is to move the funds back from corporate to aggregate and also for them to move monies every month from the securities to the non-securities lending account. He indicated that SSGA would have an opening at the end of the month and that they would attempt to make the change by that date.
Motion: (Carrera-Kenny) Mr. Carrera made a motion to accept Mercer’s recommendation to liquidate the funds on the SSGA’s Intermediate Credit Index Fund and place them on the SSGA’s Aggregate Index Non-Security Fund and to request that SSGA move the funds from the Securities Lending Aggregate position to the Non-Securities Aggregate position and to authorize the Chairman, Mr. Tapley, to sign any required documents to do so. Motion carried.
Mr. Love stated that the scheduled private equity education session will be moved to the October Board meeting as the non-domestic equity manager’s presentations at the September meeting would take most of the time.
Approval of DROP rate of return for the quarter ending June 2009:
Ms. Herrera stated that the DROP rate of return for the nine months period ending June 30, 2009 was -8.84%, -11.79% annualized. Mercer Investment Consulting concurs with this rate.
Motion: (Carrera-Goers) Mr. Carrera made a motion to approve the -8.84% rate of return for the period ending June 30, 2009. Motion carried.
Approval of Actuarial Report for January 1, 2009, for contribution fiscal year 9/30/2010:
Ms. Herrera stated that approval was being requested for the Actuarial Report presented by Mr. Lessl, AON Consulting, at the July board meeting. Mr. Tapley asked if the trustees had reviewed the document. Everyone indicated that they had.
Motion: (Goers-Wise) Mr. Goers made a motion to approve the Actuarial Report for January 1, 2009 for contribution fiscal year 9/30/2010. Motion carried.
Approval of promissory note to Deloris Lewis for June 2009 overpayment:
Ms. Herrera indicated that, due to a data entry error in the pension office, Deloris Lewis had received two direct deposits for the month of June 2009; one which was rightfully hers, and one that belonged to another person. This other person has already been made whole. When Ms. Lewis was contacted she stated that she was unable to return the monies. Upon the Pension Office’s request, the Legal Department then sent a letter to Ms. Lewis demanding that an immediate repayment of $657.03 be sent to the Pension Office. Ms. Lewis is in receipt of this letter and has requested that we allow her to pay back the overpayment in a period of twelve to eighteen months. Approval is being requested for the promissory note from the Legal Department, with the agreed payment plan, to be sent to Ms. Lewis.
Mr. Tapley asked how many promissory notes were outstanding. Ms. Herrera stated that there were three. Mr. Tapley discussed the fact that some of these promissory notes were in default. There was discussion amongst Board members as to how to assure that these payments were fulfilled. Ms. Wise made a suggestion that the agreed amounts be deducted from the pensioner’s monthly checks until full payment is made. ACA Vaske will review if this is permissible. Ms. Wise also suggested that the pensioner could agree to set up an ACH account, as is done for utility payments, and that the amount be deducted from their checking account.
Ms. Herrera stated that up to now, Ms. Baker’s daily transactions were not being verified. She has put a procedure in place where all transactions done by Ms. Baker, and any other pension office staff, will be verified by a third party for accuracy. She believes this will prevent any future errors.
Motion: (Wise-Goers) Ms. Wise made a motion to approve for the Legal Department to send a promissory note to Ms. Lewis for repayment of the $657.03 sent to her in error and to deduct these payments from her monthly pension check if she fails to do so, provided ACA Vaske finds this action is permissible. Motion carried.
Forfeiture issue of Gregg Hoffman:
Ms. Herrera stated that on June 4, 2009, Mr. Gregg Hoffman was dismissed due to a theft issue. Mr. Hoffman admitted to this theft at the time of his hearing. Ms. Herrera indicated that all forfeiture issues are handled by outside counsel, namely Ford & Harrison. She asked if the Board wished to refer the matter to them. ACA Vaske stated that Ford & Harrison was already handling another forfeiture case and that he could add this one to the contract.
Motion: (Wise-Kenny) Ms. Wise made a motion for Ford & Harrison to handle Mr. Gregg Hoffman’s forfeiture case and for ACA Vaske to add it to the current contract. Motion carried.
Justin Vaske to discuss the legal aspects – new Pension Plan Supervisor position:
Ms. Wise stated that, in lieu of an email sent to the trustees and other City personnel by a retiree contesting the language on the posting of the General Employees Pension Plan Coordinator Position, she had asked ACA Vaske and Chief Assistant City Attorney Sal Territo to render an opinion to the argument. ACA Vaske read Section 6 of the Plan were it states that the Pension staff is “…..engaged by the City for the Board of Trustees…..”. He stated that there are several instances were this is evident; the Director of Finance, who is a trustee, is engaged by the City, and the City Attorney, who is as well engaged by the City, is the Board’s legal advisor. He indicated that he does not see any legal implications on the posting of the Pension Plan Coordinator position.
Presentation of the General Employee Education Program – Agenda and PowerPoint Presentations:
Ms. Herrera stated that, as the Board had been previously informed, the pilot session of the General Employees Retirement Education Plan was conducted on August 4, 2009. The audience was comprised of Human Resources staff, Payroll Assistants, Fiscal Managers, and supervisors. Presentations for the Pension Plan, Human Resources, Deferred Compensation, and Social Security were conducted. The pension office received positive feedback from the attendees and as a result of a program evaluation form they completed, some changes were incorporated. The City wide presentation of the program is scheduled for September, 2009.
OLD BUSINESS
Gaetano Dalfino’s Deferred Retirement Option Program Payment:
ACA Vaske stated that Mr. Dalfino’s counsel had verbally indicated that they were accepting the City’s proposed settlement but he has not received the documents to this effect.
$20,450.80 Loss on Conversion of 4,000 shares of Global Acquisition Corporation:
ACA Vaske stated that there was nothing to report at this time.
MISCELLANEOUS MATTERS
Mr. Huffstutler stated that he had some updates and communications for the Board:
Plan Coordinator Position: Mr. Huffstutler stated that the deadline to apply had been Friday, August 14. The Employee Services Department is reviewing the applications for qualifications; they will then forward the applications of those who meet the required qualifications to the Administration for review and interviews.
Pension Bill Language: ACA Vaske is still drafting the bill.
Audit of GE Pension Fund: the auditors have begun the audit. Mr. Huffstutler will have an update at the next board meeting.
Ms. Sharon Skrimshire’s inquiries: Ms. Skrimshire had raised a question on the Plan’s refund of expenses to the City. The matter was reviewed and all refunds were found to be up to date. Ms. Skrimshire was notified.
Request from John Lessl, AON Consulting: Mr. Lessl had requested permission to use the City’s Actuarial Report presentation as an example of their work for a business solicitation they are conducting. The Board members agreed to the request.
Trustee Elections: Mr. Huffstutler informed the Board that Randy Goers’ term as a trustee was expiring. Mr. Goers was completing a term left vacant by Mr. Coleman. Election procedures to fill the position will be conducted. If more than one candidate is running, an election will be conducted in September.
Transmit of Positive Pay Record: Mr. Huffstutler indicated that the Payroll Department transmits every month a list of checks issued to pensioners to Bank of America. The bank uses this list to honor checks presented for payment. Due to an error on the bank’s database, a pensioner was refused the funds. Ms. Herrera confirmed with the City’s T & I Department that the record was transmitted properly. The T & I Department identified that the error was on the bank’s side and the bank addressed and corrected it.
Request for Pension records: Mr. Huffstutler indicated that the pension office had received a request for a list of pensioner’s who receive a pension of over $100,000. There are none that do; the response has been sent.
Mr. Carrera indicated that he believed the Education Program would benefit from a presentation by a financial planner. Ms. Herrera stated that we cannot endorse one financial planner, several would have to present; this may be something that could be incorporated in the future.
ADJOURNMENT
There being no further business to come before the General Employees Pension Board at this time, Chairman Tapley adjourned said meeting at 2:51 p.m. on this 18th day of August, 2009.
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CHAIRMAN
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RECORDING SECRETARY
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PLAN COORDINATOR
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