Current Info

PUBLIC EMPLOYEES' RETIREMENT BOARD
EDUCATION SESSION AND MEETING MINUTES FOR
Tuesday, December 14 and Wednesday, December 15, 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 Mark Balen at 3:00 p.m., December 14, 2004, in the PERS' Board Room, 693 West Nye Lane, Carson City. Members present: Mark Balen, Sue DeFrancesco, Purisimo Hernandez, Charles Silvestri, George Stevens, and Warren Wish. Members absent: David Kallas.

1. INVESTMENTS

1. Staff reviewed PERS' U.S. Bond Strategy.

2. ADMINISTRATION

1. Staff reviewed Information Technology Structure.

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

The regular Board meeting of the Public Employees' Retirement Board was called to order by Board Chairman Mark Balen at 8:00 a.m., December 15, 2004, in the PERS' Board Room, 693 W. Nye Lane, Carson City. Members present: Mark Balen, Sue DeFrancesco, Purisimo Hernandez, Charles Silvestri, George Stevens, and Warren Wish. Members absent: David Kallas.

DISABILITIES

1. On motion of Warren Wish, the Board voted unanimously of those present to approve permanent and total disability retirement for: Amelia Bradshaw, William Coddington, Thomas Daniel, Jerry Heinrich, Erick Lauritzen, John Mathison, Michael Norton, Carolyn Polish, Mark Prichard, Robert Shoup, Roxanne Teel, Betty Turner, Ruth Walden.

   Sue DeFrancesco abstained from voting on the disability retirement of Roxanne Teel.

   On motion of George Stevens, the Board voted unanimously of those present to approve reemployment requests by disability recipients: Roger Buckley, Richard Gollobit, Linda Kieper, Richard Peklo, Kenneth Rader, Margaret Ries, Donald White.

INVESTMENTS

1. Steve Rogers and Corin Frost of Barclays Global Investors provided status reports on the U.S. Stock, U.S. Bond and REIT portfolios.

2. Liz Smith and Jack Koltes of Alliance Capital provided a review of the Active Growth Stock account performance and introduced Dutch Handke. Dutch Handke will be managing PERS' Active Growth Stock account. Mr. Handke presented a review of the current and future portfolio strategy by Alliance Capital.

3. Directed Brokerage/Commission Recapture Review was deferred to the January 19, 2005, Board meeting.

4. There were no changes to the Interim Investment Directives, PERS', Legislators', and Judicial Funds.

BOARD

1. On motion of Sue DeFrancesco, the Board voted unanimously of those present to approve the Minutes of the Retirement Board meeting held November 16 and 17, 2004, as submitted.

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

3. On motion of Warren Wish, the Board voted unanimously of those present to approve the Retirement Board education curriculum calendar for 2005.

4. Staff presented the Fiscal Year 2005 Internal Audit Plan. On motion of George Stevens, the Board voted unanimously of those present to approve the Fiscal Year 2005 Internal Audit Plan as submitted.

5. Staff presented the first seven Governance Policies. On motion of Sue DeFrancesco the Board voted unanimously of those present to direct staff to begin the drafting process on the policies described. A Sub-Committee of Sue DeFrancesco and George Stevens was established to work with staff in the drafting process.

ACCOUNTING

1. Mick Friend and Terry Klas with PricewaterhouseCoopers presented a review of the Fiscal Year 2004 financial audit. On motion of Sue DeFrancesco, the Board voted unanimously of those present to approve the Fiscal Year 2004 audited financial statements, management letter and staff responses for the Public Employees' Retirement System, Legislators' Retirement System, and Judicial Retirement System.

ADMINISTRATION

1. Staff presented an overview of Police/Fire fund policy and position certification process. Michael Nevelle, a Washoe County District Attorney Investigator presented arguments for inclusion in the Police/Fire fund. Ron Dreer of the Police Officer Research Organization (PORAN) also commented to the Board in support of the Washoe County District Attorney Investigators' inclusion in the Police/Fire fund. On motion of Charles Silvestri, the Board voted unanimously of those present to approve the minutes and recommendations of the Police and Firefighter's Retirement Fund Advisory Committee meeting held November 18, 2004.

LEGISLATION

1. Staff presented the Critical Labor Shortage Experience Review detailing the effects of the critical labor shortage exemption on the System and the effect of extending the exemption. On motion of Purisimo Hernandez, the Board voted unanimously of those present to direct staff to transmit the experience review of the critical labor shortage exemption to the Interim Retirement and Benefits Committee without recommendation for legislation.

2. Staff presented an update on the bill draft requests for the 2005 Legislative session that PERS is tracking.

3. There were no legislative matters that developed after publication of the agenda.

RATIFICATION AGENDA

On motion of Sue DeFrancesco, the Board voted unanimously of those present to:

1. Approve the Administrative Fund disbursements.

2. Approve the personnel action.

3. Approve out-of-state travel for the Executive Officer to attend the 2005 NASRA Winter Administrators meeting February 7th through 11th, 2005.

4. Retroactively approve the Nevada State High School's request for membership in PERS, effective December 1, 2004.

5. Retroactively approve the Investment Management Agreement and Investment Performance Guidelines with Capital Guardian Trust Company.

6. Retroactively approve the amendments to the Investment Management Agreements with Barclays Global Investors, Legislators and Judicial Funds.

7. Approve the contracts with Intraforms, Inc. for the printing and mailing of variable image forms for calendar year 2005.

DENIALS
APPEALS

1. Staff presented background information on the appeal of Ronnie Booth for an adjustment to the calculation of his monthly average compensation to reflect initial employer reporting. Mr. Booth stated to the Board that he felt he had done everything he could to prepare for retirement. He indicated that he was not notified of a possible change in policy, or that a new policy was enacted until he received notice of his benefit adjustment. Had he known of the policy change, he would have planned his retirement accordingly. On motion of Charles Silvestri, the Board voted unanimously to grant Mr. Booth's request for an adjustment to the calculation of monthly average compensation to reflect initial employer reporting.

2. Staff presented background information on the appeal of Charles Sperle for an adjustment to the calculation of his monthly average compensation to reflect initial employer reporting. He indicated that he was not notified of a possible change in policy, or that a new policy was enacted until he received notice during a meeting with staff prior to his retirement. Mr. Sperle stated that the first benefit estimate he received was inaccurate and impacted his ability to properly plan for his retirement. On motion of Warren Wish, the Board voted 5-yeas and 1-no to deny the request by Charles Sperle for an adjustment to the calculation of monthly average compensation to reflect initial employer reporting. Mark Balen voted no. David Kallas was not present for this vote.

REPORTS
COMMENTS

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

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

3. Administrative report by Staff.

   Executive Officer:

   1. The Executive Officer informed the Board that the Interim Retirement and Benefit Committee will be on January 13, 2005 at 9:30 a.m. and encouraged Board participation.

   2. On behalf of all PERS' staff, the Executive Officer wished the Board a very Happy Holiday.

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

   Sue DeFrancesco

   1. Ms. DeFrancesco asked if PERS' staff was reviewing employer contribution reports to avoid the average compensation problems seen with this month's appeals. Staff responded that the contribution reporting program identifies abnormalities in the reports and that staff is identifying any problems.

   2. Ms. DeFrancesco, on behalf of all the Board members, wished all PERS' staff a Happy Holiday.

   George Stevens

   1. Mr. Stevens expressed concerns regarding statutes that hold PERS liable for employer's error. Mr. Stevens would like to hold employers responsible for reporting errors. Staff responded that PERS is not held liable for employer errors and will review PERS' policy on penalties for employer errors.

The following is the time schedule for the meeting:

On December 14, 2004, the Education Session was called to order at 3:00 p.m. by Chairman Mark Balen and recessed at 4:25 p.m. The December 15, 2004, Board meeting was called to order at 8:00 a.m. Breaks were taken at 9:15 a.m. and 11:00 a.m. for approximately 10 minutes and 25 minutes respectively. The meeting was adjourned at 12:55 p.m.