These minutes are a draft subject to approval by the Retirement Board at their next regular meeting.

PUBLIC EMPLOYEES' RETIREMENT BOARD EDUCATION SESSION and REGULAR MONTHLY BOARD MEETING MINUTES
February 12 and February 13, 2002
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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 member Earl Greene at 3:00 p.m., February 12, 2002 in the PERS' Conference Room, 693 West Nye Lane, Carson City. Members present: Sue DeFrancesco, Earl Greene, Warren Wish, Andy Anderson, and Purisimo Hernandez.

I. ADMINISTRATION

1. Staff reviewed the fiduciary policies from the Retirement Board Duties, Policies and Procedures dated July 2001. The Code of Ethical Standards was discussed along with the ethics disclosure form adopted by the retirement board.
2. Staff presented background information on the 1986 study of the Police/Fire fund that helped establish the current criteria and process in place for determining coverage in the Police and Firemen's Retirement Fund.

II. QUESTIONS AND ANSWERS

III. Recess

The meeting was recessed at 4:50 p.m. by Earl Greene.

The regular monthly meeting of the Public Employees' Retirement Board was called to order at 8:00 a.m., February 13, 2002, in the PERS' Conference Room, 693 West Nye Lane, Carson City. Members present: Charles Silvestri, Marvin Leavitt, Earl Greene, Andy Anderson, Sue DeFrancesco, Purisimo Hernandez, and Warren Wish. Members absent: None.

I. INVESTMENTS

1. Paul Troup, Callan Associates, presented the quarterly performance review for the PERS, Legislators' and Judicial funds.


2. Paul Troup, Callan Associates, discussed the role and expectations of the PERS' domestic fixed income program. On motion of Andy Anderson, the Board voted unanimously of those present to:
   
   1. Amend section III, C, 2(a) of the PERS' Investment Objectives and Policies to include a 50% Lehman Aggregate Index and a 50% active core U.S. fixed income structure.
      
   2. Authorized staff to initiate a search for two Lehman Aggregate Index managers, including evaluation of qualified incumbents.
      
   Marvin Leavitt was absent for this vote.
3. On motion of Earl Greene, the Board voted unanimously of those present to amend the Interim Investment Directives, PERS' fund, number 16 and 17 to a target allocation of 50% of domestic fixed income assets to active core and a 50% target allocation to track the performance of the Lehman Aggregate Index. There were no recommended changes to the Interim Investment Directives for the Legislators' or the Judicial funds. Marvin Leavitt was absent for this vote.

II. BOARD

1. On motion of Purisimo Hernandez, the Board voted unanimously of those present, to approve the minutes of the Retirement Board meeting held January 16, 2002 as submitted. Marvin Leavitt was absent for this vote.

   On motion of Sue DeFrancesco, the Board voted unanimously to change the March 2002 meeting date to Monday, March 18th, 2002.

III. ADMINISTRATION

1. For the record, Sue DeFrancesco declared she knows Marcia Wickliffe. She did not feel this created any conflict. On motion of Purisimo Hernandez, the Board voted unanimously to:
   1. Approve total and permanent disability retirement for: Lori Bogan-Ponce, Patricia Clement, Susan Edwards, Patricia Jensen, Vivian Jones, Guiana McNeil, Bervin Oats, Richard Rauch, Steve Rongyocsik, Denise Smith, and Marcia Wicklife.
      
   2. Approve reemployment requests by disability recipients: Janice Herzog and Deborah Oats.
   
   
2. A C*A*R*S*O*N project summary was provided in the board packet. There were no questions regarding the summary.
   
   
3. Staff reviewed the minutes of the Police and Firemen's Retirement Fund Advisory Committee meeting held January 24, 2002. On motion of Earl Greene, the Board voted unanimously of those present, to approve promotional only coverage for the EMS Field Coordinator position for the City of Las Vegas as recommended in the minutes of the Police and Firemen's Retirement Fund Advisory Committee meeting held January 24, 2002. Marvin Leavitt was absent for this vote
   
   
4. Staff presented the national survey results from the police and fire criteria survey PERS distributed in October 2001 to other state pension funds. This survey seeks to identify how other plans determine eligibility in their police and fire pension plans. Thirty-eight responses were received with thirty-three of them covering police and fire employees. The survey results were shared at an informational meeting in January 2002 with interested parties and also with the Police and Fire Retirement Fund Advisory Committee on January 24, 2002. At each meeting staff sought input from attendees on other items they would like to see researched during this criteria review. The following list incorporates the suggested items from those meetings along with staff's planned next steps.
   
   
   • Meet with the director of P.O.S.T for review of that agency's duties and possible participation in position evaluations.
     
     
   • Meet with employer representatives.
     
     
   • Review Chapter 289 of the Nevada Revised Statutes, specifically the general definition of peace officer vs. the definition of those with restricted duties.
   • Review the criteria for possible changes in point assignment (from degrees of exposure to some other approach).
     
     
   • Seek formal employee association input so that conflicting positions may be identified and harmonized, if possible. This should also include a formal request for the associations to provide suggested modifications.
     
     
   • Review correctional positions in light of their unique experiences.

   The next meeting is yet to be determined.

5. Holly Zimmerman, PERS' Management Analyst, reviewed the Communication Initiative developed in the System's Operational Yearly Plan approved in August 2001. This initiative strives to improve current programs offered by PERS and suggests a review and enhancement of PERS' current internal and external publications. Improving public interaction with PERS' web site will also be reviewed. The Board viewed the newly developed part-time employee video produced by Holly Zimmerman and David Morgan Productions, for PERS' members.
   
   
6. Staff highlighted the proposal from Covansys, PERS' technology vendor, to provide internet opportunities that were not available or possible when the original C*A*R*S*O*N project contract began. This proposal is a phased approach with the first phase being funded by current contract savings. Some of the items this proposal offers are electronic enrollments, terminations, web estimates, employer update of healthcare deductions, on line review of member account information, optional service credit estimates, on line wage and contribution editing, member demographic updates, address changes, and optional service credit payoff information. On motion of Sue DeFrancesco, the Board voted unanimously to approve the phased approach to implementing E*C*A*R*S*O*N, subject to successful negotiations and approval by the Interim Finance Committee of the Nevada Legislature for budget augmentation.
   
   
7. Staff introduced Marty Bibb, President of the Retired Public Employees of Nevada (RPEN) who was seated in the audience. Staff then reviewed statistical and actuarial data on PERS' current retirees as background information for possible legislative enhancements in 2003. The discussion included poverty level threshold, average benefit, and average length of service of retirees.
   
   
8. The Senior Deputy Attorney General had nothing to report at this time.
   
   
9. There were no individual statements and/or requests by the members, retired employees and/or the public.
   
   
10. Administrative Report by Staff:

    Operations Officer:
    
    

    1. Staff informed the Board that PERS has received approximately 60,000 completed single survivor beneficiary forms. PERS has also received some criticism by married members on having to choose one beneficiary and not be able to name a trust. We are reviewing this matter.
       
       

    Exective Officer:
    
    

    1. The Executive Officer attended the Governor's Cabinet meeting where state budget constraints were discussed.
       
       
    2. On behalf of all the executive staff, the Executive Officer thanked Charles Silvestri, Board Chairman, for attending and testifying at the Interim Retirement and Benefits Committee meeting on February 6th, 2002. Five items were discussed at the meeting including an update on the interim study of lump sum optional benefit plans (AB 431), an update on retiree reemployment, executive staff pay raises, a review of the June 30, 2001 actuarial valuation and an investment report.
       
       

11. On behalf of the Board and PERS' staff, Charles Silvestri thanked RSVP volunteers, Betty Gardner and Ann Horn for their unwavering service to PERS over the past ten plus years. Ann has volunteered since 1985 and Betty since 1988 and PERS appreciates their dedicated service and availability to assist PERS. George Pyne and Holly Zimmerman also thanked Betty and Ann for their years of volunteer service and all their hard work.

    Charles Silvestri asked the status of the Las Vegas office space location. Staff has received two bids and has responded to them. Staff hopes to have a proposal for the Board to review at the March 2002 meeting.

    Charles Silvestri questioned whether our investment staff could fire a manager in a timely manner. Staff is comfortable with the current process; it has worked well.

IV. RATIFICATION AGENDA

On motion of Andy Anderson, the Board voted unanimously of those present to:

1. Approve Administrative Fund disbursements.
2. Approve personnel action taken since the last meeting.
3. Approve retroactive approval of Investment Performance Guidelines for Criterion Investment Management's Lehman Aggregate Index mandate effective December 12, 2001.
4. Approve retroactive approval of Amended Fee Exhibit A for Criterion Investment Management's Lehman Aggregate Index mandate effective December 12, 2001.
5. Approve out-of-state travel for appropriate staff to attend the national GFOA conference in Denver, Colorado scheduled for June 16th through June 19th, 2002.
6. Approve out-of-state travel for appropriate staff to attend the CODA User Group Conference in St. Louis, Missouri scheduled for June 19th through June 21st, 2002.
7. Approve the Amendment to Pricewaterhouse Coppers' Financial Audit contract to provide an annual audit and preparation of an annual financial report for the Judicial Retirement System for fiscal years 2002 and 2003.

V. DENIALS

VIII. REPORTS

The following is the time schedule for the meeting:

February 12, 2002, the education session was called to order at 3:00 p.m. and recessed at 4:50 p.m. February 13, 2002, the board meeting was called to order at 8:00 a.m. At 10:05 a.m. a break was taken for approximately 10 minutes. The meeting was recessed at 11:40 a.m. until 1:00 p.m. at which time the meeting was called to order. On motion of Marvin Leavitt the meeting was closed for consideration of disability matters and opened at 1:12 p.m. by motion of Andy Anderson. The meeting adjourned at 3:15 p.m.