Current Info

PUBLIC EMPLOYEES' RETIREMENT
EDUCATION SESSION AND MEETING MINUTES FOR
Tuesday, March 16 and Wednesday, March 17, 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., March 16, 2004, in the PERS' Board Room, 693 West Nye Lane, Carson City. Members present: Charles Silvestri, Mark Balen, Purisimo Hernandez, David Kallas (via telephone), and Warren Wish. Members absent: Sue DeFrancesco and George Stevens.

INVESTMENTS

1. Staff discussed policy compliance reports that are prepared monthly by the Bank of New York and staff. These reports assist staff in their portfolio monitoring by comparing investments to PERS' Investment Objectives and Policies and Interim Investment Directives.

2. Staff reviewed the U.S. growth stock manager search process and status.
ADMINISTRATION

1. Staff discussed the structure and responsibilities of the Employer and Production Services Division.

QUESTION AND ANSWERS
RECESS
Chairman Silvestri recessed the meeting at 4:25 p.m.

The Board meeting of the Public Employees' Retirement Board was called to order by Board Chairman Charles Silvestri at 8:00 a.m., March 17, 2004, in the PERS' Board Room, 693 West Nye Lane, Carson City. Members present: Charles Silvestri, Mark Balen, Purisimo Hernandez, David Kallas (via telephone), George Stevens, and Warren Wish. Members absent: Sue DeFrancesco.

INVESTMENTS
Gary Madich and Lisa Wesolek of Banc One Investment Advisors presented an overview of their organization, pending merger, investment process, and an update on the performance of their active U.S. bond portfolio.
Edward Dove and Gerry Levy of Julius Baer Investments, presented an overview of their organization, investment process, and addressed performance of their active international bond portfolio.
Staff presented recommended interview candidates for the Wilshire REIT Index management search. On motion of Warren Wish, the Board voted unanimously of those present to invite Alliance Capital Management, Barclays Global Investors and Invesco Realty Advisors to the Board's April 21, 2004 meeting to interview for a Wilshire REIT Index mandate.
Andy Johnson of Lincoln Capital Management presented an overview of the Lincoln organization, a change in the firm's CEO, investment process, and performance of their U.S. bond index portfolio.
Bob Prusiewicz and Bob Windsor of BNY Asset Management presented an overview of their organization, investment process, and performance of their international stock index portfolio.
There were no recommended changes to the Interim Investment Directives.
BOARD

1. On motion of Mark Balen the Board voted unanimously to approve the minutes of the Retirement Board meeting held February 18 and 19, 2004, as submitted.

2. On motion of Mark Balen the Board voted unanimously to change the May 2004 meeting from May 18 and 19 to May 11 and 12, 2004.

3. Staff requested a change in the April education curriculum calendar under investments from cash flow and funding procedures to REIT index management. On motion of Mark Balen, the Board voted unanimously to amend the education curriculum calendar for April 2004 to include REIT index management.

ADMINISTRATION

1. For the record, Mark Balen disclosed that he knows Edward Kendrick and David Kallas disclosed that he knows Kenneth O'Rourke. Warren Wish disclosed that Shanna Reed worked for him for many years and excused himself from voting on her disability request. On motion of Mark Balen, the Board voted unanimously to:

   1. Approve permanent and total disability retirement for: Terry Crawford, Linda Fletcher, Dennis Gazso, Eric Gochenouer, Regina Harrison, Carlos Henderson, Kathleen Hill, Edward Kendrick, Kerry Mathews, Robert Moore, Roger Oliver, and Kenneth O'Rourke.

      In a separate motion by George Stevens, the Board voted 5 yeas to approve permanent and total disability retirement for Shanna Reed. Warren Wish did not participate in this vote.

   2. On motion of Warren Wish the Board voted unanimously to approve reemployment requests for disability recipients: Wesley Anderson, Mary Guebara, Irma Hernandez and John Villalobos.

   3. On motion of George Stevens the Board voted unanimously to approve survivor benefit coverage to Anthony D. Johnston, under the provisions of NRS 286.673(4).

2. Staff reviewed the Judicial Retirement System's actuarial findings as of January 1, 2004, as prepared by The Segal Company. On motion of Purisimo Hernandez, the Board voted unanimously to:

   1. Accept the Actuarial Valuation for the Judicial Retirement System as of January 1, 2004.

   2. Adopt the 1994 mortality tables with a one-year set back to sync up the Judicial Retirement System with the regular fund.

3. Staff discussed inviting Cortex Applied Research, Inc. to review and possibly make recommendations to the Board on the Board's Duties, Policies and Procedures that was last reviewed by the Board in July 2001. Cortex has worked with over 75 retirement plans on a variety of governance assignments, including preparation of Board governance policies. Staff has funds budgeted for this biennium to accommodate their fees. On motion of Mark Balen, the Board voted unanimously to authorize staff to initiate discussions with Cortex Applied Research, Inc. relating to review and recommendations to the Retirement Board's adopted Policies, Duties, and Procedures.

4. Staff presented some statistical information on the PERS' fund and the Police/Fire fund for the Board as they prepare for the upcoming legislative session which included:

   • Number of active members

   • Average entry age into the System

   • Average annual salary

   • Current contribution rates

   • Beneficiaries

   • Average benefit

   • Average age at retirement; and

   • Average years of service.
LEGISLATION

1. Staff recently received a memorandum from the Department of Administration and the Legislative Counsel Bureau (LCB) directing all agencies to submit legislative bill draft requests (BDR) to the Department by May 1, 2004. Staff recommended the following modifications for technical legislation:

   2005 Non-Fiscal Bill Request

   Modifications to Chapter 286 (Public Employees' Retirement Act)

   1. 286.6703(3)(a) - remove the requirement that the Social Security number be contained within the certified qualified domestic relations order.

   2. 286.673(3) - potential correction to child benefits to allow for reinstatement of benefits for full-time students if the student status is interrupted between ages 18 and 23.
   Modifications to Chapter 1A (The Judicial Retirement Act)

   1. Modify 1A.270 and 1A.280 - to harmonize the election provisions contained in NRS 1A.270(2)(b) and 1A.280(1).

   2. 1A.520(3)(a) - remove the requirement that the Social Security number be contained within the certified qualified domestic relations order.

   3. 1A.580(3) - potential correction to child benefits to allow for reinstatement of benefits for full-time students if the student status is interrupted between ages 18 and 23.

   Staff also recommended that due to an experience study that PERS must perform regarding critical labor shortage usage and the limited number of BDR's available to public agencies, that PERS request a second BDR to provide the Retirement Board with flexibility should any such fiscal issues arise. On motion of Purisimo Hernandez, the Board voted unanimously of those present to direct staff to submit two bill draft requests to the Department of Administration by May 1, 2004, to include the legislative changes mentioned above, as submitted. Warren Wish was not present for this vote.

RATIFICATION AGENDA

On motion of George Stevens, 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. Approve out-of-state travel for the Director of Member & Retiree Services and the Director of Employer & Production Services to attend the Cost Effective Measurement (CEM) Benefit Administration Peer Conference in Austin, Texas, May 11-13, 2004.

4. Approve out-of-state travel for appropriate staff members to attend training on Unified Development Server (UDS) which will be held in San Jose, California, May 10-14, 2004.

5. Approve out-of-state travel for the Manager of information Technology to attend the Public Retirement Information Systems Management (PRISM) conference in Memphis, Tennessee, May 1-5, 2004.

6. Approve the Final Benefit Audit report for March 2003. Warren Wish was not present for this vote.
DENIALS
REPORTS
COMMENTS

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

2. Keith Marcher, Deputy Attorney General reported that the interviews for PERS' Deputy Attorney General position have been completed and that a decision by the Attorney General is expected shortly.

3. Administrative report by Staff.

   Executive Officer:

   1. The Executive Officer attended and gave a speech to the Sparks RPEN group earlier this month. Staff discussed the CPI cap and defined contribution plans versus defined benefit plans. The discussions went very well.

   2. Leslie Thompson the System's actuary from The Segal Company, met with staff and discussed funding issues, the current disability study, as well as other pending matters.

   3. The Legislative Counsel Bureau has contacted staff to arrange a meeting to introduce Mindy Braun, the new fiscal analyst for PERS. Mark Stevens and Gary Giggheri will also attend the meeting.

   4. Dave Berns, of the Las Vegas Review Journal, has interviewed both the Executive Officer and the Investment Officer for an article he is working on. Staff expects the article to be published either the end of March or in early April.

   Operations Officer:

   1. Staff reported that the financial disclosure law was changed in 2003 requiring annual statements only if public officials earned $6,000.00 or more. With this language change, Retirement Board members are no longer required to complete an annual financial disclosure statement for the Commission on Ethics, as they do not meet the salary requirement.

   2. Staff has completed their first group counseling session in Las Vegas at the Clark County School District. The session was a big success with 39 attendees. A second group counseling session has been scheduled for March 23rd, 2004.

   3. Staff reported that NDOT has been billed for back contributions and interest in the amount of $473,381.70 on behalf of NDOT employees. Staff expects payment by the end of the week.

   4. Staff announced that PERS has received a safety award from the System's Workers Compensation Carrier.

   5. Staff reported that the Department of Insurance has been billed for back contributions and interest on behalf of Ms. Molasky-Arman as determined by PERS' internal audit of membership eligibility for the period April 6, 1976 through August 12, 1985.

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

   1. Chairman Silvestri requested a letter be prepared on behalf of the Board to PERS' staff that acknowledges the Board's appreciation and to thank the staff for all their hard work. PERS' staff is doing a great job.

   2. George Stevens announced that he invited the Executive Officer to the April 20th County Commissioners' meeting to give a presentation on PERS.

   3. George Stevens asked if the time certain consideration of disabilities could be changed to first thing in the morning. Staff will discuss with Dr. Nickles.
The following is the time schedule for the meeting:
On March 16, 2004, the Education Session was called to order at 3:00 p.m. by Chairman Silvestri and recessed at 4:25 p.m. The March 17, 2004, Board meeting was called to order at 8:00 a.m. A break was taken at 9:20 a.m. for approximately 10 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 1:05 p.m. and opened at 1:10 p.m. on motion of Warren Wish. The meeting adjourned at 1:15 p.m.