Current Info

PUBLIC EMPLOYEES' RETIREMENT
EDUCATION SESSION AND MEETING MINUTES FOR
Tuesday, April 20 and Wednesday, April 21, 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 3:00 p.m., April 20, 2004, in the PERS' Board Room, 5820 S. 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.

INVESTMENTS

1. Staff discussed the REIT index management search and reviewed candidate evaluation material.
ADMINISTRATION

1. Leslie Thompson of The Segal Company reviewed and discussed amortization periods and funding policies in the public pension sector. Leslie will present more information at the May meeting for the Board to consider.

QUESTION AND ANSWERS
RECESS
Chairman Silvestri recessed the meeting at 4:30 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., April 21, 2004, in the PERS' Board Room, 5820 S. Eastern Avenue, Suite 220, Las Vegas. Members present: Charles Silvestri, Sue DeFrancesco, Mark Balen, Purisimo Hernandez, David Kallas, George Stevens, and Warren Wish. Members absent: None.

INVESTMENTS
Joe Pratt and Steven Wilde of UBS Global Asset Management presented an update on their active and index international bond portfolios.
Tom Dugan of Dodge and Cox presented an update on their active U.S. bond portfolio.
AllianceBernstein, Barclays Global Investors, and Invesco Realty Advisors interviewed for a Wilshire REIT Index mandate. On motion of Purisimo Hernandez, the Board voted unanimously to retain AllianceBernstein, Barclays Global Investors, and Invesco Realty Advisors to manage Wilshire REIT index portfolios for the Public Employees' Retirement System, as soon as possible.
Staff recommended the Interim Investment Directives, PERS' fund be amended to include AllianceBernstein, Barclays, and Invesco as Wilshire REIT Index managers. On motion of Warren Wish, the Board voted unanimously to approve the amended Interim Investment Directives, PERS' fund.
BOARD

1. On motion of Mark Balen the Board voted unanimously to approve the minutes of the Retirement Board education session and meeting held March 16 and 17, 2004, as submitted.

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

3. There were no recommended changes to the Retirement Board education curriculum calendar.

ACCOUNTING

1. Staff reviewed the RFP process for selecting an accounting firm to provide annual financial audits for the PERS', Legislators', and Judicial funds for fiscal years 2004 through 2008. PERS mailed the notice to all CPA firms registered with the Nevada State Board of Accountancy. Six firms requested the RFP package with five firms submitting their proposal. One proposal was disqualified and each of the remaining four proposals was independently evaluated and scored by nine staff members using a standard financial audit proposal evaluation form. Staff recommended that PricewaterhouseCoopers be retained as they scored the highest in all categories. On motion of Mark Balen, the Board voted unanimously to authorize staff to enter into a contract with PricewaterhouseCoopers to perform a financial audit of the Public Employees', Legislators', and Judicial Retirement Systems for the fiscal years ending 2004, 2005, 2006, 2007, and 2008, for a total fee not to exceed $541,600.00, with the Board reserving the right to review the contract annually and re-appoint the firm or request an RFP, whichever is in the System's best interest.

2. Staff reviewed the budget summaries for fiscal years 2004 and 2005. The base budget for fiscal years 2006 and 2007 will be the 2004 budget. The timeline for the budget process includes information to be presented at the May Retirement Board education session and a draft budget presented at the June meeting. The final budget will be presented at the July meeting to allow staff to meet the September 1, 2004 deadline to the Department of Administration and the Legislature.
ADMINISTRATION

1. On motion of Purisimo Hernandez, the Board voted unanimously to:

   1. Approve permanent and total disability retirement for: Robert Arechiga, Steven Generaux, Ernest Hatle, Robert Houston, Lora Jane Keairnes, Kathleen Lee, James Magness, Juel Myree, Robert Nuffer, Joan Schilling, Tonilyn Strassburg, and Sandra Weir.

   2. Approve reemployment requests for disability recipients: Pamela Maloncon and Richard Peklo.

2. Staff presented a summary of the Defined Benefit Administration Benchmarking Analysis prepared by Cost Effectiveness Measurement (CEM). The purpose of this analysis is to help PERS understand how our total administration costs and service levels compare to our peers. Staff completed an electronic survey of 238 questions covering all aspects of PERS' costs and services. Overall PERS is very satisfied with the results. PERS will participate again next year and staff will attend the annual CEM conference in May 2004 where they will be able to network and exchange ideas with the participants. There is also an electronic network available to all members of the peer group. On motion of Warren Wish, the Board voted unanimously to accept the Defined Benefit Administration Benchmarking Analysis prepared by CEM as presented by staff.
LEGISLATION

1. Staff recently met with members of the Supreme Court regarding modifications to the Senior Judge Program. Staff is requesting authorization from the Board to review this modification with the System's actuary for Internal Revenue Code compliance and any possible cost impact to the System. On motion of David Kallas, the Board voted unanimously to authorize staff to review the proposed judicial retirement act modifications with the System's actuary for Internal Revenue Code compliance and for cost impact.

2. Staff provided an update on Senate Bill 345 of the 2003 legislative session that requires PERS conduct a review of alternative methods allowed under federal law for reporting disability retirement allowances to the Internal Revenue Service.
   Staff is working with The Segal Company to develop the research required under this section of the bill. A draft report will be presented to the Board at the May meeting. The final report will be recommended for adoption at the June meeting in order to meet the required filing date of July 1, 2004 with the Legislative Commission.
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 out-of-state travel for the appropriate staff members to attend the SANSFIRE 2004 conference and training in Monterey, California July 5, 2004 through July 13, 2004.

4. Approve out-of-state travel for the Operations Officer to attend the National Association of Public Pension Attorneys Legal Education Conference in St. Louis, Missouri June 23-25, 2004.

5. Approve out-of-state travel for the appropriate staff to attend the APPFA Professional Development Conference May 2-5, 2004.

6. Approve the Final Benefit Audit Report for April 2003.

7. Approve the Final Benefit Audit Report for May 2003.

8. Approve the Airport Authority of Washoe County's request for a penalty waiver in the amount of $121.77.

9. Approve the City of Yerington's request for a penalty waiver in the amount of $331.66.

10. Approve an extension to the existing independent contract with Employees Company of Nevada, Inc. in the amount of $3,700.00.

11. Terminate the Investment Management Agreement with UBS Global Trust Company and approve the Investment Performance Guidelines and amended Fee Exhibit with UBS Global Asset Management (Americas) Inc.
DENIALS
REPORTS
COMMENTS

1. Public Comment

   1. Ms. Ruby Arceneaux requested the Board review her staff denial regarding changing her disability retirement from option 1 to option 3. Ms. Arceneaux claims there were extenuating circumstances when she completed her paperwork due to illness and the medication she was taking at the time. Ms. Arceneaux thanked the Board for their time

   2. Brenda Burt, Manager of the Las Vegas PERS' office, thanked the Board for their letter of commendation and appreciated the Board's comments.

2. Bob Auer, Senior Deputy Attorney General thanked the Board and staff for their hospitality on welcoming him as PERS' new Senior Deputy Attorney General.

3. Administrative report by Staff.

   Operations Officer:

   1. Staff reported that PERS has received checks from NDOT and the Division of Insurance for back contributions and interest.

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

   1. Warren Wish requested that Ms. Ruby Arceneaux's staff denial be placed on a future agenda to be heard as an official appeal.

   2. Chairman Silvestri read a letter of commendation to the PERS' staff of the Las Vegas office in appreciation for their hard work and dedication. The Board is very proud of the staff and the way they take care of the members and beneficiaries of the System.

   3. Chairman Silvestri mentioned that the presentation Dana Bilyeu, Executive Officer, made to the Clark County Commission was very well received.

   4. Chairman Silvestri reported that the Interim Retirement and Benefits Committee meeting went very well.

   5. Warren Wish asked if there were any lessons to be learned from the financial situation with Oregon PERS. Staff responded that the Oregon system has become fractionalized due to so many different benefits being granted to different groups. This could possibly be a result of chipping away from a uniform benefit structure. The lesson we could learn is to maintain a uniform approach to benefit enhancements and maintain a single tier benefit structure to avoid those problems.

   6. Mark Balen asked if staff has been in contact with CalPERS regarding their financial situation. Staff has not spoken with any staff of CalPERS but understands that a bill has been introduced in their legislature to revert CalPERS benefits back to where they were in 1991 at the request of Governor Schwarzenegger.

   7. Warren Wish commented on how many calls the Las Vegas office handles and complimented them on a job well done.

   8. Chairman Silvestri complimented PERS on its quality operation.
The following is the time schedule for the meeting:
On April 20, 2004, the Education Session was called to order at 3:00 p.m. by Chairman Silvestri and recessed at 4:30 p.m. The April 21, 2004, Board meeting was called to order at 8:00 a.m. A break was taken at 9:07 a.m. for approximately 10 minutes. The meeting was recessed at 11:55 a.m. for lunch and reconvened at 1:00 p.m. On motion of Mark Balen the meeting was closed for consideration of disability retirements at 8:00 a.m. and opened at 8:05 a.m. on motion of David Kallas. The meeting adjourned at 2:20 p.m.