Current Info

PUBLIC EMPLOYEES' RETIREMENT
EDUCATION SESSION AND MEETING MINUTES FOR
Wednesday, February 18 and Thursday, February 19, 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 3:05 p.m., February 18, 2004 and the Board meeting at 8:00 a.m. on February 19, 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.

INVESTMENTS

1. Staff discussed investment risk and analyzing risk adjusted performance.
ADMINISTRATION

1. Staff discussed the structure and responsibilities of the Member and Retiree Services Division.

QUESTION AND ANSWERS
RECESS
Chairman Silvestri recessed the meeting at 4:05 p.m.

INVESTMENTS
Joe Carieri and Carl Eichstaedt of Western Asset Management presented an overview of their organization, investment process, and an update on their active U.S. bond portfolio.
Paul Troup of Callan Associates, discussed the structure of Callan's organization and recent press accounts regarding conflicts of interest in the investment consulting industry.
Paul Troup of Callan Associates and Staff presented the quarterly performance review for PERS', Legislators', and Judicial funds.
Kevin Sullivan and Jeff Wardlow of Loomis, Sayles presented an update on their active U.S. value stock portfolio and addressed investment performance.
Staff recommended a search for an active U.S. growth stock manager to diversify management. On motion of Warren Wish, the Board voted unanimously of those present, to authorize staff to initiate a search for an active U.S. growth stock manager. David Kallas was not present for this vote.
Staff reviewed modifications to the Interim Investment Directives, for the PERS' fund. On motion of Mark Balen, the Board voted unanimously of those present, to approve the Interim Investment Directives for the PERS' fund as submitted. David Kallas was not present for this vote.
BOARD

1. On motion of George Stevens the Board voted unanimously of those present to approve the minutes of the Retirement Board meeting held January 21, 2004, as submitted. David Kallas was not present for this vote.

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

3. Staff requested a change in the April education curriculum calendar under administration from information technology to actuarial funding. On motion of Sue DeFrancesco, the Board voted unanimously of those present, to approve the change in the April education curriculum calendar to actuarial funding. David Kallas was not present for this vote.

ADMINISTRATION

1. On motion of Mark Balen and Purisimo Hernandez, respectively, the Board voted unanimously of those present to:

   1. Approve permanent and total disability retirement for: Alan Amdal, Coralyn Azeveda, Laura Banuelos-Haro, Taber Black, Roger Buckley, Phillip Diaz, William Feldman, Lynne Gillette, Judy Kassemos, Michael Kenney, Lili Lagan, Malasia Matthews, Patricia McGuire, Damon Morris, Rebecca Poirer, Egillespie Sinayoko, Geraldine Trice, and Mary Wolski.

   2. Approve reemployment requests for disability recipients: Peter English, Roy Espinda, Loris Feinstein, and Lester Morton.

2. Staff reviewed the internal audit department's findings from an audit completed on the Department of Business and Industry (formerly the Nevada Department of Commerce) on independent contractor vs. employee on behalf of Alice Molasky-Arman in 2000. During this time, PERS was in litigation with the State of Nevada Department Of Transportation for similar independent contractor vs. employee findings. Due to this the Molasky-Arman case was not brought before the Board until now. On January 30, 2004, the Supreme Court ruled in favor of PERS to bill NDOT for contributions and interest on behalf of independent contractor employees that should have been enrolled in PERS. Staff recommends the Board approve the audit department's findings that determined Alice Molasky-Arman should have been an employee from 1976 to 1985, and transmit an invoice to the Department of Business and Industry (formerly the Nevada Department of Commerce) Insurance Division for $88,668.16. Paula Cedar, from the Insurance Division, requested that the Board reduce the interest amount if possible. On motion of Mark Balen, the Board voted 5-yeas and 1-no, Purisimo Hernandez voted no, to:

   1. Approve PERS' audit division's findings to consider Ms. Molasky-Arman as an employee for purposes of membership eligibility in the System from April 6, 1976 through August 12, 1985.

   2. Direct staff to inform the Department of Business and Industry, (formerly the Nevada Department of Commerce) Insurance Division, of the Board's decision regarding the audit department's findings and to retroactively enroll Ms. Molasky-Arman into PERS effective April 6, 1976.

   3. Direct staff to submit an invoice to the Department of Business and Industry, (formerly the Nevada Department of Commerce) Insurance Division, for contributions and interest due on behalf of Ms. Molasky-Arman in the amount of $88,668.16, which consists of employee contributions of $16,089.18, employer contributions of $16,089.18 and interest due of $56,589.80. David Kallas was not present for this vote.

3. Staff reviewed the proposed changes to PERS' Official policies 6.6 and 11.23. On motion of Warren Wish, the Board voted unanimously of those present to authorize staff to proceed with the appropriate notices under the procedures for policy adoption pursuant to NRS 286.200. David Kallas was not present for this vote.

4. Staff presented a survivor benefit report regarding reinstatement of student survivor benefits. Staff has completed an initial review of the System's database for the period May 1995 through April 2002, which identified approximately 170 individuals. The next step will be to review the imaged records of these individuals to determine if they were sent the reinstatement notice and request verification for any period of full-time student status during which time the benefit was stopped. Staff has also received a request for reinstatement of benefits from Mr. Tyson James Pulsipher. On motion of Mark Balen, the Board voted unanimously of those present to approve the request of Tyson James Pulsipher that PERS reinstate his student survivor benefit. David Kallas was not present for this vote.

5. Staff reviewed the minutes and recommendations of the Police and Firefighters' Retirement Fund Advisory Committee meeting held February 5, 2004. On motion of Warren Wish, the Board voted unanimously of those present to approve the staff and committee recommendations as set forth in the minutes of the February 5, 2004, Police and Firefighters' Retirement Fund Advisory Committee meeting. David Kallas was not present for this vote.
RATIFICATION AGENDA

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

1. Approve the Administrative Fund disbursements.

2. Approve the personnel action taken since the last report.

3. Retroactive approval of the Investment Management Agreement with Mellon Capital Management.

4. Approve out-of-state travel for the Assistant Investment Officer and Administrative Analyst to attend the National Association of State Investment Professionals conference in Austin, Texas, April 4-7, 2004.

5. Approve the Internal Audit Division's Compliance Audit Report for the Fiscal Year ending June 30, 2003.

6. Approve the Final Benefit Audit report for January 2003.

7. Approve the Benefit Payment Audit for the quarter ending December 31, 2003.

8. Approve out-of-state travel for one internal auditor to attend the MIS course, "Fundamentals of Internal Auditing", April 21-23, 2004, in Los Angeles, California. David Kallas was not present for this vote.
DENIALS
REPORTS
COMMENTS

1. Keith Marcher, Deputy Attorney General reported the internal announcement for Tina Leiss' former position (PERS' Deputy Attorney General), has been completed and a number of individuals have expressed an interest. A decision to fill the position should be completed shortly.

2. Roger Maillard, representing the AFSCME/Retiree Chapter of the State of Nevada Employees Association, addressed the Board and stated they were very happy with the Board's choice of appointing Dana Bilyeu as PERS' Executive Officer. He expressed their support of the Retirement System and the new Executive Officer. Mr. Maillard also complimented PERS' reception staff stating they always welcome customers with a smile.

3. Administrative report by Staff.

   Executive Officer:

   1. Staff reported that the NASRA director's conference in Washington, D.C. went very well. Staff met with both Senators Ensign and Reid and met with staff of the three Nevada Congressional Representatives as the representatives were called to a hearing with Secretary of State Colin Powell.

   2. PERS has received the Supreme Court's decision in the NDOT case. There has been no rehearing requested. Therefore, PERS will prepare an invoice for contributions and interest on behalf of NDOT independent contractors that should have been enrolled in PERS.

   3. Staff mentioned there has been a personnel change in the Denver office of The Segal Company. John Garrett who was PERS' consulting actuary has left the firm and Leslie Thompson will take his place. Leslie has worked with PERS before and is scheduled to meet with PERS' staff on March 10th.

   4. The NCPERS annual conference is scheduled for May 2-6, in Anaheim, California. Please let Karen know if you are interested in attending.

   5. The NASRA annual conference is scheduled for August 6-11, in Asheville, N.C. Please let Karen know if you are interested in attending.

   6. Dave Berns, of the Las Vegas Review Journal has contacted staff to do an interview for an article they are preparing on PERS.

   7. The Interim Retirement and Benefits Committee has scheduled a meeting for April 7th, at 2:00 p.m. The items scheduled for the agenda are: salary approval, funded status of the Judicial fund, actuarial valuation as of June 30, 2003, investment report, Assembly Bill 555 update, and Senate Bill 345 update. Please let Karen know if you are interested in attending.

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

   1. Chairman Silvestri requested an update on the growth manager search for the March education agenda.
The following is the time schedule for the meeting:
On February 18, 2004, the Education Session was called to order at 3:05 p.m. by Chairman Silvestri and recessed at 4:05 p.m. The February 19, 2004, Board meeting was called to order at 8:00 a.m. A break was taken at 9:25 a.m. for approximately 15 minutes. The meeting was recessed at 11:45 a.m. for lunch and reconvened at 1:05 p.m. On motion of Mark Balen the meeting was closed for consideration of disability retirements at 1:07 p.m. and opened at 1:10 p.m. on motion of Mark Balen. The meeting adjourned at 2:05 p.m.