Current Info

PUBLIC EMPLOYEES' RETIREMENT
EDUCATION SESSION AND MEETING MINUTES FOR
Tuesday and Wednesday, October 28-29, 2003

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 1:00 p.m., October 28, 2003 and at 8:00 a.m. on October 29, 2003, in the PERS' Board Room, 5820 South Eastern, Suite 220, Las Vegas. Members present: Charles Silvestri, Sue DeFrancesco, Mark Balen, Purisimo Hernandez, David Kallas, George Stevens, and Warren Wish. Members absent: None.

OCTOBER 28-29, 2003

BOARD

1. Larry Grissom, Laura Wallace, and Dana Bilyeu were interviewed by the Board for the position of Executive Officer. On motion of David Kallas, the Board voted unanimously to appoint Dana Bilyeu, Executive Officer of PERS. On motion of Mark Balen the Board voted unanimously to place Dana Bilyeu in Step 5 of the Employer Paid Fiscal Year 2004-05 salary schedule for an annual salary of $110,599.

2. On motion of Warren Wish, the Board voted unanimously to approve the minutes of the Retirement Board Subcommittee meeting held September 9, 2003, as submitted.

3. On motion of David Kallas, the Board voted unanimously to approve the minutes of the Retirement Board meeting held September 25, 2003, as submitted.

4. There were no changes to the Retirement Board meeting dates.
INVESTMENTS

1. Jack Koltes and Liz Smith of Alliance Capital Management presented an update on their U.S. growth stock portfolio and discussed recent mutual fund trading issues.

2. Staff discussed alleged improprieties regarding mutual fund trading at a variety of firms. At the time PERS' agenda and packet was published there were still outstanding questions with Banc One Investment Advisors. The issues were resolved prior to the Board meeting. Staff requested out-of-state travel to visit Banc One's office to continue communication. On motion of Mark Balen the Board voted unanimously to approve out-of-state travel for appropriate investment staff to visit Banc One's office.

3. Staff recommended deferral of action regarding L&B Realty Advisors. The issue will be incorporated in PERS' private market allocation review. No action was taken on this item.

4. Staff reviewed recommended policy changes for the PERS' fund. On motion of David Kallas, the Board voted unanimously to approve the Investment Objectives and Policies, PERS' fund, as submitted.

5. Staff presented Fiscal Year 2004 Investment Plans for the PERS' fund. On motion of George Stevens, the Board voted unanimously to approve the Fiscal Year 2004 Investment Plans for the PERS' fund, as submitted.

6. Staff reviewed recommended policy changes for the Legislators' and Judicial funds. On motion of Mark Balen, the Board voted unanimously to approve the Investment Objectives and Policies for the Legislators' and Judicial funds, as submitted.

7. Staff presented Fiscal Year 2004 Investment Plan for the Legislators' fund. On motion of Mark Balen, the Board voted unanimously to approve the Fiscal Year 2004 Investment Plan for the Legislators' fund, as submitted.

8. Staff presented Fiscal Year 2004 Investment Plan for the Judicial fund. On motion of Mark Balen, the Board voted unanimously to approve the Fiscal Year 2004 Investment Plan for the Judicial fund, as submitted.

9. Staff recommended that Barclays Global Investors be invited to the Board's November meeting to update their proposal to manage U.S. bond index assets. On motion of David Kallas, the Board voted unanimously to invite Barclays Global Investors to the Board's November meeting to update their proposal for management of U.S. bond index assets.

10. Staff requested a search be initiated for a third S&P 500 U.S. stock index manager for diversification and presented criteria for the management search. On motion of George Stevens, the Board voted unanimously to authorize staff to initiate a search for an S&P 500 U.S. stock index manager and approved the S&P 500 stock index manager search criteria, as submitted.

11. Staff reviewed the amended changes to the Interim Investment Directives for the PERS' fund which included prohibiting Putnam Investments from further trading in their portfolio and stopped new distributions until mutual fund trading allegations can be discussed further with the firm. Staff also presented the recommended changes to the Interim Investment Directives for the Legislators' and Judicial funds. On motion of Mark Balen, the Board voted unanimously to:

Approve the Interim Investment Directives for the PERS' fund, as amended.

Approve the Interim Investment Directives for the Legislators', and Judicial funds, as submitted.

3. ADMINISTRATION

For the record David Kallas stated he had a professional relationship with Shannon Greguras and Kenneth Bradshaw which would not preclude him from voting. On motion of Mark Balen, the Board voted unanimously to:
Approve permanent and total disability retirement for: Diane Abrao, Ruby Arceneaux, Abbas Bafghi, Sandra Bandy, Dolores Bishop, Antonio Boluna, Pamela Collins, Jorge Cordova, Karen Dodge, Vera Graham, Shannon Greguras, Cynthia Griffin-Vaught, James Harpster, Carole Howard, Chere Iverson, Russell Jones, Starr Lane, Lorina LeFevre, Vera McIntosh, Kathleen Morani, Tammy Noble, James Quinby, Catherine Rutherford, Billie Simmons, William Slobody, and Vicki Tatum.
Approve reemployment requests for disability recipients: Kenneth Bradshaw, Ronald Campbell, Vicki Dunagan, Marc Fowler, Sherry Freer, William Kellas, James Lee, William Maniaci, Garnet Nekuda, Judith Penman, Jane Richardson, Margaret Ries, Kathy Sadovich, Maryde Scherf, and Patricia Walker-Cooperman.
Staff reviewed the proposed contract with TruSecure Corporation which would include testing PERS' technology systems on the internet to insure the sites are secure. On motion of Warren Wish the Board voted unanimously to approve the Master Services Agreement for Security Service with TruSecure Corporation at a cost not to exceed $152,138.70 for the period from November 1, 2003 through October 31, 2005, subject to successful contract negotiations.
Staff discussed Pershing General Hospital's outstanding payment of contributions and penalties owing PERS. On motion of Purisimo Hernandez, the Board voted unanimously to approve lump sum payment of all contributions and assessed penalties by Pershing General Hospital by December 31, 2003 and instructed staff to seek the assistance of the Department of Taxation if a lump sum payment of all contributions and assessed penalties is not received by December 31, 2003.
Staff researched the Consumer Price Index (CPI) and its effect on the granting of statutory post retirement increases requested by a Board member at our September meeting. Staff has developed a "White Paper" that traces the post retirement increase formula's inception in 1983 and modifications or additions made to it since that time. Staff further stated that due to the low inflationary environment today, retirees are beginning to see the CPI cap discussed in NRS 286.5756 applied to their benefits.
The Deputy Attorney General reported that there is one active litigation case pending against PERS. A second litigation case has been dismissed by the courts and will be presented to the Board in the form of an official appeal at a future meeting.
Administrative Report by Staff:

Executive Officer:

Staff has received an e-mail from the Public Pension Coordinating Council administrator, Alan Winkle, discussing their new process for applying for their pension award on-line. Staff will begin the application process, which needs to be completed by December 31, 2003.

The Federal Government has introduced a bill on Social Security regarding changing the 1-day rule to 60-months.

The Executive Officer will attend the NASRA Federal Conference in Washington, D.C. February 8-9, 2004.

The Operations Officer search will go forward with a statewide announcement.
Staff is working to obtain a voting system for the Retirement Board in the Las Vegas office.
RATIFICATION AGENDA

On motion of Sue DeFrancesco, the Board voted unanimously to approve the Ratification Agenda as follows:

1. Approve the Administrative Fund disbursements.

2. Approve the personnel action taken since the last report

3. Approve Pathway Capital Management's Investment Performance Guidelines.

4. Approve Payden & Rygel's Investment Management Fee Exhibit.

5. Approve Callan Associates, Inc. Performance Expectations.

6. Approve out-of-state travel for one auditor to attend the Association of Public Pension Fund Auditors (APPFA) professional development conference November 2 through November 5, 2003 in San Antonio, TX.

7. Approve an Independent Contract with Intraform, Incorporated for various image printing and mailing jobs for the period January 1, 2004 through December 31, 2004.

8. Approve Final Benefit Audit Reports for July 2002 and August 2002.

DENIALS
REPORTS
COMMENTS

1. There were no individual statements and/or requests by the members, retired employees and/or the public.

2. Questions and/or comments by members of the Retirement Board.

   1. Charles Silvestri suggested during PERS' search for a new Operations Officer that we keep in mind any qualified in-house candidates to promote from within if possible.

   2. Mark Balen requested that Benny Scott's staff denial be placed on a future agenda as an official appeal.

   3. David Kallas thanked the Retirement Board Subcommittee for their hard work and dedication in reviewing and selecting the three finalists from the 115 applications they received for the PERS' Executive Officer position. All the Board members appreciate their time and effort.

   The following is the time schedule for the meeting:

   On October 28, 2003, the Board meeting was called to order at 1:00 p.m. by Chairman Charles Silvestri and recessed at 3:50 p.m. The October 29, 2003, Board meeting was called to order at 8:00 a.m. A break was taken at 9:10 a.m. for approximately 8 minutes. The meeting was recessed at 11:10 a.m. for lunch and reconvened at 1:00 p.m. On motion of Purisimo Hernandez the meeting was closed for consideration of disability retirements and opened at 1:02 p.m. on motion of George Stevens. The meeting adjourned at 1:05 p.m.