MINUTES OF THE REGULAR MONTHLY MEETING
GENERAL EMPLOYEES RETIREMENT BOARD
TUESDAY, FEBRUARY 17, 2009
The Board of Trustees of the General Employees Retirement Fund convened in a regular session at 2:05 p.m. on this the 17th day of February, 2009, in the fifth floor Conference Room, Tampa Municipal Office Building, 306 East Jackson Street, Tampa, Florida, with John Tapley, Chairman, presiding. Members present upon roll call were Mark Carron, Ernest Carrera, Bonnie Wise, Steve Kenny, Jerry Winters, Randy Goers, and John Tapley.
City staff in attendance were Lee Huffstutler, Chief Accountant; Justin Vaske, Assistant City Attorney (ACA) and Board Attorney; Sal Territo, Chief Assistant City Attorney; Maria Rivera, Recording Secretary; Marlene Herrera, Payroll & Pension Supervisor; Deborah Hodo, Plan Investment Coordinator; and Paul Broughton, Plan Coordinator.
Others in attendance were John Lessl, AON Consulting; Mr. Richard McIntyre, Esq., McIntyre, Panzarella, Thanasides, Eleff & Hoffman, P.L., and Mr. Erick Slootsky, McIntyre, Panzarella, Thanasides, Eleff & Hoffman, P.L., representing Ms. Beverly L. Terp Harris by conference call; Mr. Jay Love, Mercer Investment Consulting; and Mr. Keith Reynolds, Mercer Investment Consulting.
CONSENT AGENDA
ABERDEEN ASSET MANAGEMENT’S $28,109.74 BILLING FOR THE QUARTER ENDING DECEMBER 31, 2008; CLARIVEST ASSET MANAGEMENT’S $18,961.97 BILLING FOR THE QUARTER ENDING DECEMBER 31, 2008; COMSERV’S $55.00 BILLING FOR ITS REPORT FOR JANUARY 2009; DODGE & COX’S $58,014.00 BILLING FOR THE QUARTER ENDING DECEMBER 31, 2008; FISHER INVESTMENTS’ $66,251.06 BILLING FOR THE QUARTER ENDING DECEMBER 31, 2008; JPMORGAN’S $42,218.10 BILLING FOR THE QUARTER ENDING DECEMBER 31, 2008; MERCER INVESTMENT CONSULTING’S $9,166.00 BILLING FOR THE MONTH OF DECEMBER 2008; TAPLIN, CANIDA & HABACHT’S $39,878.53 BILLING FOR THE QUARTER ENDING DECEMBER 31, 2008; VICTORY CAPITAL MANAGEMENT’S $29,215.40 BILLING FOR THE QUARTER ENDING DECEMBER 31, 2008; WADDELL & REED’S $75,706.16 BILLING FOR THE QUARTER ENDING DECEMBER 31, 2008; WELLINGTON MANAGEMENT COMPANY’S $16,807.74 BILLING FOR THE QUARTER ENDING DECEMBER 31, 2008; WELLS CAPITAL MANAGEMENT’S $25,837.39 BILLING FOR THE QUARTER ENDING DECEMBER 31, 2008; LISTING OF CONFERENCES; DEFERRED RETIREMENTS AND SURVIVING SPOUSE’S PENSION BENEFITS.
Mr. Tapley asked Mr. Broughton if all the items on the Consent Agenda were in order. Mr. Broughton stated that they were.
Motion: (Wise-Kenny) Ms. Wise made a motion to approve all the Consent Agenda items. Motion carried.
DISCUSSION AGENDA
Ms. Beverly Terp’s request to have her monthly pension reinstated:
Mr. Broughton set up a conference call meeting with Mr. Richard McIntyre, Esq.’s, office by conference call; Mr. Erick Slootsky responded. Mr. Tapley asked if he wanted to make a statement before he was informed of the Board’s decision on Ms. Terp’s request. Mr. Slootsky indicated that he would rather transfer the call to Mr. McIntyre. Mr. McIntyre answered indicating that he was not going to make a statement at this time, as doing so would be redundant. He reiterated his position that the statute was clear in that Ms. Terp was entitled to have her surviving spouse’s benefits reinstated from June 2001 going forward.
ACA Vaske indicated that that City’s position was to the contrary. Mr. Sal Territo, Chief Assistant City Attorney, stated that the position of the City Attorney’s Office is clear on that Ms. Terp terminated her surviving spouse’s benefits when she remarried.
Motion: (Kenny-Goers) Mr. Kenny made a motion to deny Ms. Terp’s request to have her monthly pension reinstated, having taken into consideration the arguments previously presented by Mr. McIntyre and the City’s Legal Department recommendation. Motion carried.
Mr. Tapley informed Mr. McIntyre that Ms. Terp’s request was denied. Mr. McIntyre thanked the Board for their time and consideration to Ms. Terp’s request.
Staff Report:
Board Resolution listing certain individuals authorized to provide certain instructions to JPMorgan Chase Bank, N.A., on behalf of the Board:
Mr. Broughton presented the Board a document that the City’s Legal department created, namely, the Resolution of the Board of Trustees for the City of Tampa General Employees authorizing certain individuals to provide certain banking instructions to JPMorgan Chase Bank N.A. on behalf of the Board and the table containing the listing of individuals, contact information, and specimen signatures of the individuals authorized to provide banking instructions to the custodian on behalf of the Board.
Motion: (Carron-Kenny) Mr. Carron made a motion to approve the Resolution and Banking instructions to be sent to JPMorgan Chase Bank N.A. Motion carried.
Mr. Broughton indicated that the Board had received a notice from Waddell & Reed announcing the addition of Mr. Matthew Hekman to its Domestic Large Cap Growth Equity Team.
Mr. Broughton presented the Board with an updated listing of the General Employees Retirement Fund’s Board of Trustees, Support Personnel, and Administrative Office Location that includes Mr. Ernest Carrera, the new appointed Trustee.
Minutes of the Regular Monthly Meeting held on Tuesday, January 20, 2009:
Mr. Tapley asked if there were any additions or corrections to the minutes. A correction was noted to the third paragraph of page 3 after, “… Mr. Vaske suggested that the statute clearly…..”, as the sentence was not complete.
Motion: (Kenny-Goers) Mr. Kenny made a motion to approve the Minutes of the Regular Monthly Meeting held on Tuesday, January 20, 2009, with the noted correction. Motion carried.
Overpayment on behalf of Ms. Rita M. Wilson, formerly Mrs. Rita M. Cranford:
Mr. Broughton indicated that Ms. Wilson had failed to repay the monies owed the Pension Fund because of her failure to inform the Pension Office of her remarriage.
ACA Vaske recommended that the matter be handled by the Legal Department.
Motion: (Winters-Kenny) Mr. Winters made a motion to refer the matter of the overpayment on behalf of Ms. Rita M. Wilson, formerly Mrs. Rita M. Cranford, to the City’s Legal department. Motion carried.
Presentation by Mr. Jay Love and Mr. Keith Raynolds, Mercer Investment Consulting:
Before Mr. Love and Mr. Reynolds started their presentation, Mr. Carron asked that some of the Board’s concerns be voiced. Mr. Kenny indicated that it was the Board’s sentiment that, in the past, the Board had had to bring to Mercer’s attention matters that were either pending or that had to be taken. He stated that the Board feels that, going forward, Mercer should be more diligent. Ms. Wise also commented that it was brought to the Board’s attention that some of the guidelines of the Statement of Investment Policy are not being followed and asked that Mercer made sure that this is addressed.
Mr. Love acknowledged the Board’s concerns and expressed their determination to improve their performance in the future.
Mr. Love then proceeded with his presentation. He gave a summary and an overview of the state of the economy and stated that, in this market environment, total Fund assets decreased by $70.9 million during the quarter from $504.2 million as of September 30, 2008, to $433.3 million on December 31, 2008. He pointed out that this decrease was due to approximately $64.8 million in net investment losses and $6.1 million in net cash outflows. He state that the Total Fund’s asset allocation on December 31, 2008, was 59.8% equity, 33.1% fixed income and cash, and 7.1% real estate and that the Fund remained within its policy ranges at year end.
The total Fund returned a negative 12.9% for the quarter ended December 31, 2008, which led the Composite index return of a negative13.8% and ranked in the 49th percentile of the Russell Mellon Total Plans (a $1 Billion Public Funds Universe, which is comprised of 24 plans). It was pointed out that the highlights of the quarter were the strong relative results from Waddell & Reed in large-cap growth stocks, ClariVest in small-cap growth stocks, Mercator in international equity, Victory Capital in international small-cap equity, Aberdeen in emerging markets, Taplin in fixed income, and UBS in real estate.
For the trailing twelve months, the Total Fund returned a negative 27.2%, which lagged the Composite Index return of a negative 25.8% and ranked in the 67th percentile of its peer group universe. It was also pointed out that, for the longer five-year period, the total Fund led the index and ranked in the top third of the universe.
Mr. Reynolds reported on each manager’s performance.
A copy of Mercer’s presentation is available in the Pension Office for review.
Mr. Love discussed the elevation in corporate bond yields and the simultaneous decline in Treasury bond yields. Mercer discussed making an opportunistic shift from the SSGA Aggregate Index Fund to the SSGA Intermediate Credit Index Fund in order to lower the US Treasury bond holdings and increase the corporate bond holdings. The Board decided to discuss the matter again at the March meeting.
Motion: (Carron-Wise) Mr. Carron made a motion to approve ING as the Global REIT’s Investment Manager. Motion carried.
Mr. Love read the proposed investment guidelines for the ING portfolio, and the Board approved them. Mercer indicated it would discuss the funding of the ING portfolio at the March meeting.
Approval of DROP Rate of Return for the first quarter of 2009:
Mr. Broughton stated that he had calculated the DROP Rate of Return for the first quarter of 2009 at -13.01%. Mercer Investment Consulting agreed with the figure.
Motion: (Carron-Kenny) Mr. Carron made a motion to approve the DROP Rate of Return for the first quarter of 2009 at -13.01%. Motion carried.
Request for Legal Opinion:
Mr. Broughton stated that Mr. Gerald D. Davis, a Division B participant, retired from the City on May 14, 2004, and was at the time married to Ms. Victoria Davis. Mr. and Mrs. Davis’ marriage was dissolved on November 20, 2006. Mr. Broughton requested a legal opinion on whether or not Ms. Victoria Davis is entitled to a monthly pension benefit, since Mr. Davis died on October 29, 2008.
ACA Vaske indicated that he would present a legal opinion at the next Board meeting.
Status on Disability application submitted by Mr. William Newhouse:
Mr. Broughton informed the Board that Mr. Newhouse had changed his application for retirement from a disability to a deferred retirement.
ADJOURNMENT
There being no further business to come before the General Employees Pension Board at this time, Chairman Tapley adjourned said meeting at 4:05 p.m. on this 17th day of February 2009.
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Chairman
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Recording Secretary Plan Coordinator
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