PUBLIC EMPLOYEES' RETIREMENT
EDUCATION SESSION AND MEETING MINUTES FOR
Tuesday, May 11 and Wednesday, May 12, 2004
The agenda for this meeting was mailed to every public employer, the news media, and other groups and individuals as requested.
The Education Session of the Public Employees' Retirement Board was called to order by Board Chairman Charles Silvestri at 3:00 p.m., May 11, 2004, in the PERS' Board Room, 693 West Nye Lane, Carson City. Members present: Charles Silvestri, Sue DeFrancesco, Mark Balen, Purisimo Hernandez, David Kallas, and Warren Wish. Members absent: George Stevens.
BOARD EDUCATION SESSION
Staff discussed the structure and management of PERS' stock portfolio. Staff also discussed the performance of active vs. index management.
Staff reviewed the preparation, process, and timeline for preparing PERS' biennial budget.
- QUESTION AND ANSWERS
- PUBLIC COMMENT
David Kallas reported that he attended the NCPERS conference recently. During the conference he participated in a group asset allocation exercise. His group achieved the best asset allocation award. He presented the award to staff and thanked them for the past 18 months of Board education.
Chairman Silvestri recessed the meeting at 4:12 p.m.
The Board meeting of the Public Employees' Retirement Board was called to order by Board Chairman Charles Silvestri at 8:00 a.m., May 12, 2004, in the PERS' Board Room, 693 West Nye Lane, Carson City. Members present: Charles Silvestri, Sue DeFrancesco, Mark Balen, Purisimo Hernandez, David Kallas, George Stevens, and Warren Wish. Members absent: None.
Mark Balen disclosed that he knows Mr. Curt Wilson. On motion of Warren Wish, the Board voted unanimously to:
Approve permanent and total disability retirement for: Carol Allen, JoAnn Almquist, Julie Anderson, Joyce Brunner, Stephan Burke, Twilla Caudron, Susan Gerhardt, James Harris, Moureen Kiriaze, Diane Marrero, Wynette McAllister-Wright, Daniel McQueen, Karen Milligan, Janis Ness, Ramona O'Neil, Trenna Smith-Montes, Ellen Stephens, and Anita Teague.
Approve reemployment requests by disability recipients: Vicki Dunagan, Girard Hermann, Gail Heyer, Clay McCormick, James Quinby, Harold Rozinski, Mark Salopek, and Curt Wilson.
Susan Ellison and Dick Forster, of Mellon Capital, presented an update on their international stock index accounts for the PERS', Legislators', and Judicial funds as well as their S&P 500 Index account for the PERS' fund.
Ruthann Moomy and Paul Troup of Callan Associates, Inc. and staff presented the quarterly performance review for the PERS', Legislators', and Judicial funds for the quarter ending March 31, 2004.
Staff provided an update regarding the current U.S. growth stock manager search.
Staff presented the recommended asset allocation changes for the Legislators' and Judicial Retirement funds to include a 15% allocation to international bonds, with a corresponding reduction to the U.S. bond allocation. On motion of Mark Balen, the Board voted unanimously to:
Approve the Investment Objectives and Policies for the Legislators' fund, as submitted.
Approve the Investment Objectives and Policies for the Judicial fund, as submitted.
Expand Payden & Rygel's mandate to include international bond portfolios for the Legislators' and Judicial Retirement Systems.
Staff reviewed amendments to the Interim Investment Directives, Legislators' and Judicial funds to establish an international bond allocation and expand Payden & Rygel's mandate to include international bond portfolios for the Legislators' and Judicial Retirement Systems. On motion of George Stevens, the Board voted unanimously to approve the Interim Investment Directives for the Legislators' and Judicial funds, as submitted.
On motion of David Kallas, the Retirement Board voted unanimously to approve the minutes of the Retirement Board education session and meeting held April 20 and 21, 2004, as submitted.
David Kallas announced that he would not be available for the June 15 education session but would be available via telephone for the June 16th Board meeting. Sue DeFrancesco mentioned that she has a conflict with the October 20th Board meeting date and would like the rest of the Board to check their calendars for the 21st and 22nd to possibly change the meeting date. At this time, there were no recommended changes to the Retirement Board meeting dates.
There were no recommended changes to the Retirement Board education curriculum calendar.
Leslie Thompson of The Segal Company and staff, discussed and presented funding models and amortization periods for the PERS' fund that are utilized in the public pension sector and are GASB compliant. Demographics from the PERS' 2003 valuation were used to build the models presented. Ms. Thompson discussed the differences between open and closed amortization periods. Currently, the System has a closed 40-year amortization period, which was established in 1984. On motion of David Kallas, the Board voted unanimously to direct staff and the actuary to develop a funding/amortization policy designed to provide additional rate stability for future funding periods, incorporating amortization boundaries for rate increases and for consideration of benefit modifications. At the request of David Kallas, staff will also evaluate the feasibility of an open 30-year amortization schedule and at the request of Sue DeFrancesco, staff will also evaluate incorporating triggers into the proposed funding policy. Staff will present this information at the June 16, 2004 meeting.
David Kallas requested the minutes be amended to show Roman Numeral IV. as the Public Comments section on the April 29th Police and Firefighter's Retirement Fund Advisory Committee meeting. On motion of David Kallas, the Retirement Board voted unanimously to approve the minutes and recommendations from the Police and Firefighter's Retirement Fund Advisory Committee meeting held April 29, 2004, as amended.
Staff presented a draft report on PERS' Disability Program review required by Senate Bill 345 of the 2003 Legislature. Five possible disability program models were presented. Currently, PERS' actuary is preparing projected costs for each of the models. At the June meeting, staff will review the costs associated with the models, conclusions of the program review, and recommendations on proposed legislation relating to the disability program, if any.
- RATIFICATION AGENDA
Approve the Administrative Fund disbursements.
Approve the personnel action taken since the last report.
Approve out-of-state travel for investment staff to attend Callan's Regional Breakfast Workshop and conduct on-site visits at Callan's and Mellon Capital's San Francisco offices.
Retroactively approve the amended Fee Exhibit and Investment Performance Guidelines with Alliance Capital - REIT index portfolio.
Approve out-of-state travel for investment staff to conduct on-site visits at Alliance Capital and BNY Asset Management's New York offices, and SSR Realty Advisors' New Jersey office.
Approve Investment Management Agreement and Investment Performance Guidelines with Payden & Rygel - Legislators' and Judicial international bond index portfolios.
Approve in-state travel for Charles Silvestri to moderate a panel discussion at the annual Fire and Police Pension Fund Summit on June 28th at the Hyatt Incline Village, Lake Tahoe, at no cost to the System.
Approve Survivor Benefit reinstatements for Elexia Casteel and Trent Wertz.
Approve the Final Benefit Audit Report for June 2003.
Approve the Benefit Payment Audit Report for the quarter ending March 31, 2004.
There were no individual statements and/or requests by the members, retired employees and/or the public.
The Deputy Attorney General had nothing to report.
Administrative Report by Staff:
Staff reported that HR 743 regarding Social Security Reform, will require all public employers to have new hires sign a written statement disclosing how the employment may affect an individual's Social Security benefit upon retirement. The U.S. Department of Labor has prepared a draft statement. NASRA and NCTR are working with the Department of Labor on the language of the statement. Employers will be required to provide this statement in 2005.
Staff announced that the NCTR conference will be held in Portland, Oregon on October 10-14th. On-line registration has just become available. Please inform Karen if you are planning to attend.
Staff mentioned that PERS' 1st Annual Liaison Conference is scheduled for May 25th at the Atlantis Hotel in Reno with 167 liaison officers registered.
Staff will be meeting with the State Department of Personnel's Work Taskforce at their request regarding possible legislation to reduce and/or eliminate some of PERS' reemployment restrictions. Staff will keep the Board informed of this request.
At the June meeting staff will present a cost estimate from Cortex Consulting regarding review of PERS' Retirement Board policies and governance education. Staff will plan a meeting for the Board with Cortex staff probably in October 2004.
Staff announced that Jenny Kastens, Administrative Analyst, and Ken Lambert, Assistant Investment Officer were both accepted into the MBA Program at the University of Nevada, Reno.
Questions and/or comments by members of the Retirement Board.
Chairman Silvestri thanked Dana Bilyeu for her great service and care given to one of PERS' members that had sent a letter to him thanking her.
Chairman Silvestri presented a 20-year award to Lynette Jones in appreciation for her continued dedication to the members and beneficiaries of the System.
Chairman Silvestri presented a Letter of Commendation to the Carson City PERS' staff acknowledging their hard work and dedication to he members and beneficiaries of the System. A similar Letter of Commendation was presented to the Las Vegas PERS' staff in April. Copies of the letter will be placed in each individual's personnel file.
Mr. Kallas thanked the staff for their extra work on the survivor benefit reinstatements that they have completed.
On motion of Mark Balen, the Board voted unanimously to:
On motion of George Stevens, the Board voted unanimously to approve the Ratification Agenda as follows:
The following is the time schedule for the meeting:
On May 11, 2004, the Education Session was called to order at 3:00 p.m. by Chairman Charles Silvestri and recessed at 4:12 p.m. The May 12, 2004, Board meeting was called to order at 8:00 a.m. On motion of Purisimo Hernandez, the meeting was closed for consideration of disability retirements at 8:00 a.m. and opened at 8:05 a.m. on motion of George Stevens. Two breaks were taken at 9:35 and 10:45 for approximately 10 minutes each. The meeting was recessed at 11:35 a.m. for lunch and reconvened at 1:00 p.m. The meeting was adjourned at 1:20 p.m.