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

PUBLIC EMPLOYEES' RETIREMENT BOARD EDUCATION SESSION and MEETING MINUTES
Tuesday, August 13, 2002 and
Wednesday, August 14, 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 Board meeting of the Public Employees' Retirement Board was called to order by Board Chairman Charles Silvestri at 1:35p.m., August 13, 2002 in the PERS' Board Room, 693 West Nye Lane, Carson City. Members present: Charles Silvestri, Warren Wish, Andy Anderson, Sue DeFrancesco and Purisimo Hernandez. Members absent: Marvin Leavitt and Earl Greene.

I. BOARD

1. On motion of Purisimo Hernandez, the Board voted unanimously of those present to go into a closed executive session pursuant to NRS 241.030(1) for an Executive Officer professional performance review.
2. On motion of Purisimo Hernandez, the Board voted unanimously, of those present, to go into open session at 3:00 p.m. On motion of Andy Anderson the Board voted unanimously of those present, to approve the Executive Officer performance evaluation rankings as follows:
   • Leadership - Exceeds
   • Strategic Planning - Exceeds
   • Budget - Exceeds
   • Policy - Exceeds
   • Operations - Exceeds
   • Investment Program - Exceeds
   • Legislative Program Management - Exceeds
   • Actuarial Management - Meets
   • Public Relations - Exceeds
   • Board Relations - Exceeds

   for fiscal year 2002. Board comments that were made during the performance review will be shared with the Executive Officer in a meeting with the Retirement Board Chairman and Vice Chairman.

II. EDUCATION SESSION

1. Staff and Paul Troup of Callan Associates, discussed the asset allocation decision making process.
2. Senior Deputy Attorney General, Tina Leiss, reviewed the purpose of the Nevada Open Meeting Law, the compliance checklist, and shared examples of possible open meeting law violations with the Board.

III. QUESTIONS AND ANSWERS

IV. RECESS

The Board meeting was recessed at 4:50 p.m. by Chairman Charles Silvestri.

The Board meeting of the Public Employees' Retirement Board was called to order by Board Chairman Charles Silvestri at 8:00 a.m. August 14, 2002, in the PERS' Board Room, 693 West Nye Lane, Carson City. Members present: Charles Silvestri, Warren Wish, Andy Anderson, Sue DeFrancesco and Purisimo Hernandez, Marvin Leavitt and Earl Greene. Members absent: None.

I. INVESTMENTS

1. Kathy Kasper and Amy Swanson of State Street Research & Management, reviewed their active core domestic fixed income portfolio performance, organization, investment management process and philosophy.



2. Jim Chambliss and Karen Jakobi of Pathway Capital Management, presented an annual Alternative Investment portfolio review which addressed performance, the organization, and investment process.



3. On motion of Andy Anderson, the Board voted unanimously to approve the Alternative Investment Reporting Guidelines as submitted.



4. Paul Troup of Callan Associates, presented the fiscal year end performance review for the PERS', Legislators', and Judicial funds.



5. On motion of Marvin Leavitt, the Board voted unanimously to approve the Interim Investment Directives for the PERS' fund, as submitted.

II. BOARD

1. On motion of Earl Greene, the Board voted unanimously to approve the minutes of the Retirement Board meeting held July 16, 2002, as submitted.
   
   
2. Staff presented the proposed amendments to the Executive Officer Performance Expectations Agreement. On motion of Sue DeFrancesco, the Board voted unanimously to approve the Performance Expectations Agreement between the Executive Officer and the Retirement Board, as submitted.



3. There were no recommended changes to the Retirement Board meeting dates.

III. ADMINISTRATION

1. Earl Greene stated for the record that Marston Perkins was a Clark County Firefighter but was not known to him. On motion of Warren Wish the Board voted unanimously to:
   
   
   1. Approve total and permanent disability retirement for: D. Gary Anderson, Sallie Bice, Rosemary Cunha, Rita Foulkrod, Lilia Garcia, Sandra Krey, James Mason, William Mason, Roger Murphy, Susan Richardson, Michael Ross, Jeannine Scott, Eduardo Urioste, Patricia Walker-Cooperman, and Sharon Wilson.
      
      
   2. Approve reemployment requests by disability recipients: Lona Domenici-Reese, Linda Evarts, Marston Perkins, Diane Raucher, and Darrell Wilson.
      
      
   3. Defer the reemployment request by disability recipient Betty Ann Hofstad.
   
   
   
2. Staff reviewed the 2002-2007 Strategic Plan process and the background, key concepts, strategies, goals, and objectives of the plan. On motion of Earl Greene, the Board voted unanimously to approve the revised 2002-2007 Strategic Plan, as submitted.
   
   
3. Staff highlighted the nomination process and candidate for the Police and Firemen's Retirement Fund Advisory Committee. On motion of Andy Anderson the Board voted unanimously of those present, to appoint Raymond "Rusty" McAllister to the Police and Firemen's Retirement Fund Advisory Committee for a three-year term effective July 1, 2002. Earl Greene was absent for this vote.
   
   
4. The Deputy Attorney General reported that on July 30, 2002, a lawsuit was filed against PERS and other entities, by a probation officer. PERS has until September 13, 2002, to file an answer.
   
   
5. Individual statements and/or requests by the members, retired employees, and/or the public.
   
   
   1. Mr. Orlando D'Alessio requested the Board reconsider his staff denial regarding the date he was first eligible to retire as determined by the benefits division for purposes of the Social Security Windfall Elimination Provision.
   
   
   
6. Administrative Report by Staff:

   Executive Officer:
   
   

   1. Executive Officer, George Pyne, thanked the Board for the positive performance evaluation scores and stated receiving such good performance rankings in all categories was a reflection of the great staff he has working for him at PERS.
      
      
   2. The Executive Officer attended the National Association of State Retirement Administrators (NASRA) in Rhode Island earlier this month. It was an excellent conference with outstanding speakers.
      
      
   3. He also mentioned there was discussion at the NASRA conference on possible new federal regulations that would restrict COLA amounts to a retiree. Staff will continue to monitor the progress of this regulation.
      
      
   4. Staff will provide a copy of the 1990 study on retiree group insurance to Assemblywoman Giunchigliani at her request.
      
      

   Operations Officer:
   
   

   1. Dana Bilyeu stated that the Las Vegas office construction is underway and is hopeful to hold the October 2002 Retirement Board meeting at the new location. Staff will secure another meeting site location just in case the construction is not completed in time.
      
      
   2. She reviewed the Carson-Tahoe Hospital (C-TH) privatization process and the leasing of approximately 45 employees to another rural hospital to allow them to remain in PERS. C-TH was awaiting a ruling by the IRS on the appropriateness of leasing employees through another entity and were recently notified by the IRS that they are refusing to provide such a ruling. As a result, C-TH will seek an opinion from a Washington, D.C. law firm that has expertise in this field.
      
      
   
   
   
7. Questions and/or comments by members of the Retirement Board.
   
   
   1. Warren Wish requested that Mr. D'Alessio's staff denial be heard as an official appeal at the next month's Retirement Board meeting.
      
      
   2. Warren Wish and Purisimo Hernandez also attended the NASRA conference earlier this month and thanked the Board for the opportunity. They found the conference very educational and discussed current topics and events with other state pension system trustees.
      
      
   3. Marvin Leavitt questioned whether PERS' staff is responsible for interpretation of federal laws such as the Social Security Windfall Elimination Provision. The Operations Officer explained that when members or retirees have questions on this provision, PERS' staff has been directed to inform them to contact Social Security Administration directly.
      
      
   4. Charles Silvestri requested that a brokerage report be provided at the October 2002 meeting.
      
      

IV. LEGISLATION

1. There were no legislative items that developed after the publication of the agenda.
   
   

V. RATIFICATION AGENDA

On motion of Andy Anderson, the Board voted unanimously of those present, to approve the Ratification Agenda as follows:

1. Approve Administrative Fund disbursements.
2. Approve personnel action taken since the last report.
3. Approved retroactive approval of the Investment Management Agreement and Investment Performance Guidelines with Banc One Investment Advisors, effective July 16, 2002.
4. Approved the Administrative Fees for fiscal year 2003.
5. Approved retroactive approval of Mariposa Academy of Language & Learning's request for membership in PERS, effective July 1, 2002.
6. Approved the out-of-state travel request for one internal auditor to attend the MIS course "How to Perform a General Controls Review" in San Francisco, California, September 18-20, 2002.
7. Approved October and November 2000 final benefit audit reports.

VI. APPEALS

Staff presented background information on Mr. John Lockwood's request to be designated as Single Survivor Beneficiary to receive benefits from the PERS' account of his deceased mother Lavella Lockwood even though no single survivor beneficiary designation form was received by PERS prior to his mother's death on February 2, 2002. Mr. Lockwood alleges his mother had signed the Beneficiary Designation form and had it with her PERS' newsletter to be submitted to the Payroll Department at Mt. Grant General Hospital. He also indicated that due to her untimely death in a car accident, she was unable to turn in the form as she had planned. Pursuant to NRS 286.6767, staff has denied Mr. Lockwood's request for benefits, as there was no Beneficiary Designation form on file at PERS prior to Lavella Lockwood's death.

Mr. Lockwood addressed the Board and stated that his mother had completed the paperwork naming him as her single survivor beneficiary prior to her death. The form was found in Lavella Lockwood's vehicle on the date of her fatal car accident, February 2, 2002. The form also shows a completion date of January 25, 2002. Mr. Lockwood requested the Board accept the form and designate him as Lavella Lockwood's single survivor beneficiary.

Chairman Silvestri told Mr. Lockwood that the Board would take this matter under consideration and he would be notified by staff of the Board's decision.

The Deputy Attorney General mentioned that the law simply states that a form approved by the Executive Officer be completed by a single member before the date of his death. The Board needs to determine factually if this form was indeed completed by Lavella Lockwood, and is the appropriate form approved by the executive officer. If this determination is made, the Deputy Attorney General felt benefits could be allowed.

On motion of Earl Greene, the Board voted unanimously to continue Mr. Lockwood's appeal until such time he can provide additional information on the authenticity of Lavella Lockwood's signature on the Beneficiary Designation form found in her vehicle at the time of her death.

VII. DENIALS

VIII. REPORTS

The following is the time schedule for the meeting:

August 13, 2002, the board meeting was called to order at 1:35 p.m. and on motion of Purisimo Hernandez went into a closed executive officer performance evaluation session. At 2:50 p.m. a break was taken for approximately 10 minutes. On motion of Purisimo Hernandez the meeting was opened at 3:00 p.m. and then recessed by Chairman Silvestri at 4:50 p.m. The August 14, 2002, meeting was called to order at 8:00 a.m. At 9:40 a.m. a break was taken for approximately 5 minutes. The meeting was recessed at 11:45 a.m. until 1:10 p.m. at which time the meeting was called to order. On motion of Sue DeFrancesco the meeting was closed for consideration of disability matters at 1:10 p.m. and opened at 1:20 p.m. by motion of Andy Anderson. The meeting adjourned at 2:30 p.m.