Current Info

PUBLIC EMPLOYEES' RETIREMENT
EDUCATION SESSION AND MEETING MINUTES FOR
Tuesday and Wednesday, November 18-19, 2003

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., November 18, 2003 and the Board meeting at 8:00 a.m. on November 19, 2003, 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.

I. INVESTMENTS

1. Staff discussed the various processes in place for safekeeping PERS' assets.
ADMINISTRATION

1. Staff and John Garrett from The Segal Company discussed terminology and the process for completing PERS' actuarial valuation.

QUESTION AND ANSWERS
RECESS
Chairman Silvestri recessed the meeting at 4:10 p.m.

INVESTMENTS
Staff and Ruthann Moomy from Callan Associates presented the quarterly performance report for the PERS', Legislators', and Judicial funds.
Jack Boyce, Sandra Dzinski, Mike Solecki, and Judy Studer of GE Asset Management addressed the Board regarding their inception to date underperformance. Staff recommended PERS' relationship with GE be terminated. On motion of Purisimo Hernandez, the Board voted unanimously to terminate the System's relationship with GE Asset Management as soon as possible. On motion of Sue DeFrancesco, the Board voted unanimously to transfer GE's assets to BNY Asset Management and Mellon Capital as soon as possible.
Neil Eigen and Alan Puklin of J&W Seligman presented an organizational review, discussed their investment philosophy and process and gave a performance update on their active value stock portfolio managed for PERS.
Andy Gabel, Steve Rogers, and Matt Tucker of Barclays Global Investors, presented their proposal for a U.S. bond index management mandate. On motion of Mark Balen the Board voted unanimously to expand Barclays Global Investors' mandate to manage a Lehman Aggregate Index portfolio for the PERS' fund, as soon as possible. On motion of David Kallas the Board voted unanimously to transfer Legislators' U.S. bond index assets from WestAM to Barclays Global Investors for management in a Lehman Aggregate Index portfolio, as soon as possible. On motion of Mark Balen, the Board voted unanimously to transfer Judicial U.S. bond index assets from WestAM to Barclays Global Investors for management in a Lehman Aggregate Index portfolio, as soon as possible.
Staff recommended that Mellon Capital, Merrill Lynch Investment Managers, and State Street Global Advisors be invited to the December Board meeting to interview for an S&P 500 index mandate. On motion of Purisimo Hernandez, the Board voted unanimously to invite Mellon Capital, Merrill Lynch Investment Managers, and State Street Global Advisors to the Retirement Board's December 17, 2003 meeting to interview for an S&P 500 U.S. Stock Index management mandate.
Staff presented the proposed modifications to the PERS' Investment Objectives and Policies. On motion of George Stevens, the Board voted unanimously to approve the Investment Objectives and Policies for the PERS' fund, as submitted.
Staff reviewed the amended international stock investment plan. On motion of Mark Balen the Board voted unanimously to approve the amended international stock investment plan, as submitted.
Staff highlighted changes to the Interim Investment Directives for the PERS', Legislators', and Judicial funds. On motion of Mark Balen, the Board voted unanimously to:
Approve the Interim Investment Directives, PERS' fund, as submitted
Approve the Interim Investment Directives, Legislators' and Judicial funds, as submitted.
II. BOARD

1. Staff presented the proposed Retirement Board education session curriculum for calendar year 2004. Staff recommended delaying the education session from the January 2004 meeting and delaying the calendar for one month due to hotel availability in Las Vegas for January. On motion of Sue DeFrancesco, the Board voted unanimously to adopt the Board education curriculum for calendar year 2004, as amended.

2. On motion of George Stevens, the Board voted unanimously to approve the minutes of the Retirement Board meeting held October 28-29, 2003, as submitted.

3. On motion of Mark Balen, the Board voted unanimously to approve the Retirement Board meeting dates for July 2004 through December 2004, as submitted.

ADMINISTRATION

1. For the record David Kallas stated he had a professional relationship with Shannon Yada, which would not preclude him from voting. On motion of Mark Balen, the Board voted unanimously to:

   1. Approve permanent and total disability retirement for: James Arnold, Judy Bradley, Patricia Brown, Kathryn Fowler, Daniel Hackett, Anniva Jamerson, Cheryl Knee, Vlademar Kristiansen, Becki Lopez, James Mason, Ruth Morgan, Janet Rowan, Andrew Steen, Judy Welch, Mildred White, Ruby Winston, Mary Wollnick, and Shannon Yada.

   2. Approve reemployment requests for disability recipients: Karen Albrethsen, Lori Bogan-Ponce, Richard Carson, Rodney Corbit, Midred Edwards, Donald Fentiman, Kurt Fristed, Dawn Pellegrino, Gary Sterrett, Donald White, and Terry Zach.

2. John Garrett of The Segal Company presented the Actuarial Valuation Report for fiscal year ending June 30, 2003. On motion of Warren Wish, the Board voted unanimously to accept the June 30, 2003 Actuarial Valuation Report as prepared by The Segal Company.

3. Chairman Silvestri opened the hearing on the proposed revisions to PERS' Official Policies. Staff reviewed the recommended changes. Mike Neville, representing the Washoe County District Attorney Investigators' Association and PORAN, went on record to state their concerns with the proposed changes to policies 11.35, 11.37(a)(1), 11.37(a)(4), 11.37(b), 11.37(c), 11.37(d), 11.40, and 11.41. Staff agreed to add a suggested list of "supporting materials" to address Mr. Neville's concerns with policy 11.35. The other recommended changes to the policies are in line with the recent review of the police/fire application process study that took place earlier this year. The policy changes were also reviewed by the Police/Fire Retirement Fund Advisory Committee prior to being presented to the Retirement Board. The Advisory Committee was comfortable with the recommended policy revisions. On motion of Mark Balen, the Board voted 6-yeas and 1-no, with David Kallas voting no, to approve all the recommended policy changes except policy 11.35, which will be reviewed again at the December 17, 2003, Retirement Board meeting.

4. Staff reviewed the proposed lease with C&A Investments LLC, for PERS' disaster recovery facility for the period of December 1, 2003 through December 31, 2008. On motion of David Kallas, the Board voted unanimously to approve the lease with C&A Investments LLC, for the period of December 1, 2003 through December 31, 2008, with the monthly rent of $1,338.75 for years 1 and 2, $1,386.00 per month for years 3 and 4, and $1,433.25 per month for year 5.
RATIFICATION AGENDA

On motion of Mark Balen, 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 an independent contract with Panda, Inc. to print the Comprehensive Annual Financial Report (CAFR) for fiscal year 2003 for an amount not to exceed $7,500.00.

4. Approve the City of Carson's request for a penalty waiver in the amount of $750.59.

5. Approve the Final Benefit Audit Report for September 2002.

6. Approve the Benefit Payment Audit Report for the quarter ending September 30, 2003.
DENIALS
VI. REPORTS

Staff reviewed the new Member, Employer, & Retiree Relations Report that includes the number of phone calls, counseling appointments, walk-ins, and informational programs that were provided by PERS' staff in the previous month by both the Carson City office and the Las Vegas office.

COMMENTS

1. There was nothing to report by the Deputy Attorney General.

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

3. Administrative report by Staff.

   Investment Officer:

   1. Staff announced that Ken Lambert had been elected chairman of the Board of the Pension Fund Data Exchange.

   Executive Officer:

   1. Staff reported that the annual Retirement Board Christmas Dinner will be held on Tuesday, December 16th, at the Station Grill & Rotisserie.

   2. Staff informed the Board that the November 15th, deadline for participating in this year's CEM benchmarking was met thanks to the hard work of PERS' directors.

   3. The winter newsletter for PERS has been divided into two newsletters; one for retirees and one for active members. These newsletters are currently at the printer and we are hoping to distribute them the first week in December.

   4. The announcement for a new Operations Officer will be placed next week or the beginning of December with applications to be received by the middle of December. Interviews will then be conducted in January.

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

   1. Chairman Silvestri thanked GE Asset for their presentation and relationship with the System.

   2. On behalf of all the Board, Chairman Silvestri wished all PERS' staff a wonderful holiday.
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.