Current Info

PUBLIC EMPLOYEES' RETIREMENT BOARD
EDUCATION SESSION AND MEETING MINUTES FOR
Tuesday, February 15 and Wednesday, February 16, 2005

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 Chairman Balen at 3:00 p.m., February 15, 2005, in the PERS' Board Room, 693 West Nye Lane, Carson City. Members present: Mark Balen, Sue Defrancesco, Purisimo Hernandez, David Kallas, Charles Silvestri, George Stevens, and Warren Wish. Members absent: None.

1. INVESTMENTS

1. Staff discussed directed brokerage/commission recapture programs and PERS' current brokerage policy.

2. ADMINISTRATION

1. Staff reviewed the Nevada Ethics in Government law from NRS Chapter 281, voting standards, and the Retirement Board fiduciary policy.

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

The Board meeting of the Public Employees' Retirement Board was called to order by Board Chairman Mark Balen at 8:00 a.m., February 16, 2005, in the PERS' Board Room, 693 West Nye Lane, Carson City. Members present: Mark Balen, Sue DeFrancesco, Purisimo Hernandez, David Kallas, Charles Silvestri, George Stevens, and Warren Wish. Members absent: None.

DISABILITIES

1. For the record, David Kallas disclosed he knows Lawrence Montero. On motion of David Kallas, the Board voted unanimously to:

   1. Approve permanent and total disability retirement for: Dianne Brannigan, Jeffery Buckingham, Glenn Bunch, Ronald Bushey, Gwendolyn Caliendo, Cassandra Cochennet, Virginia Donosso, Tracy Jackson, Gilbert Lopez, Carolyn Mojado, Lawrence Montero, Richard Murphy, Michael Novotny, Carlos Ortiz, Gloria Shelby, and Steven Ward.

   2. Approve reemployment requests by disability recipients: Vicki Dunagan, Regina Harrison, Larry Hickman, Beverly Perby, James Rughterford, Everlean Sampson, and Donald White.

INVESTMENTS

1. Robert Blanding, Warren Koontz, and Kevin Sullivan of Loomis Sayles presented an organizational overview and a performance update on their active U.S. stock portfolio. On motion of David Kallas the Board voted unanimously to change the monthly performance reporting requirements to quarterly performance reports for Loomis, Sayles active U.S. stock portfolio.

2. Ruthann Moomy of Callan Associates and staff presented the quarterly performance review for the PERS', Legislators', and Judicial funds for the period ending December 31, 2004.

3. After discussion, on motion of David Kallas, the Board voted unanimously to maintain PERS' current brokerage policy.

4. Staff presented the recommended changes to the Interim Investment Directives for the PERS', Legislators', and Judicial funds. On motion of Purisimo Hernandez, the Board voted unanimously to approve the Interim Investment Directives for the PERS' fund, as submitted. On motion of George Stevens, the Board voted unanimously to approve the Interim Investment Directives for the Legislators' and Judicial funds, as submitted.

BOARD

1. Staff reviewed the request for proposal process and the proposals received for custody and commercial banking services. For custody banking services, five proposals were received and evaluated: the Bank of New York, JP Morgan, Mellon, Northern Trust, and State Street. Staff recommended the Bank of New York be appointed custodial bank for the PERS', Legislators', and Judicial funds. On motion of Warren Wish, the Board voted unanimously to appoint the Bank of New York custody bank for the PERS', Legislators', and Judicial funds for the period July 1, 2005 through June 30, 2010.

   For commercial banking services, staff received and evaluated three commercial banking services' proposals; Bank of America, Citibank, and Wells Fargo. Staff recommended Wells Fargo Bank be retained to provide commercial banking services to the PERS', Legislators', and Judicial funds. On motion of Purisimo Hernandez, the Board voted unanimously to authorize staff to enter into a contract with Wells Fargo Bank to provide commercial banking services for the period July 1, 2005 through June 30, 2010 not to exceed the following fees: FY06 - $85,000, FY07 - $89,250, FY08 - $93,713, FY09 - $98,399, FY10 - $103,319.

2. Susan Stoops and Mary Pistoresi, PERS' internal audit staff, discussed the results of their compliance audit report for fiscal year ending June 30, 2004. On motion of Warren Wish, the Board voted unanimously to accept the compliance audit report for fiscal year ending June 30, 2004, as submitted.

3. On motion of Susan DeFrancesco, the Board voted unanimously to approve the minutes of the Retirement Board education session and meeting held January 18 and 19, 2005, as submitted.

4. On motion of Charles Silvestri, the Board voted unanimously to change the May Retirement Board meeting dates to May 24 and 25, 2005.

5. The Retirement Board requested that enhanced indexing and hedge funds be added to the education curriculum calendar. Staff will review the calendar and bring suggestions for inclusion to the Board at a later date.

ADMINISTRATION

1. Staff presented the findings of the Cost Effectiveness Measurement (CEM) benchmarking analysis for the Public Employees' Retirement System for fiscal year 2004. PERS was compared to fifteen other public pension systems that are similar in size. In summary, this benchmarking analysis confirms that PERS provides a competitive level of service at a relatively low cost and gives PERS a benchmark to measure performance. On motion of David Kallas, the Board voted unanimously to accept the Defined Benefit Administration Benchmarking Analysis prepared by CEM as presented by staff.

2. Staff presented the minutes and recommendations of the Police and Firefighter's Retirement Fund Advisory Committee meeting held January 20, 2005. On motion of Purisimo Hernandez, the Board voted unanimously to approve the staff and committee recommendations as set forth in the minutes of the January 20, 2005, Police and Firefighter's Retirement Fund Advisory Committee meeting, as submitted.

LEGISLATION

1. Staff reported that meetings have been held with Keith Munro (Governor's Office), Andrew List (NACO), Assemblywoman Giunchigliani, Assemblyman Denis, Assemblywoman Koivisto, and Assemblyman Arberry to discuss the Retirement Board's changes to the funding policy, as well as, our budget, technical bill, and contribution rates. A meeting has been scheduled with Senator Raggio for February 22, 2005. Additional meetings will be scheduled with the other members of the Senate Finance Committee and the members of the Assembly Ways and Means Committee. Staff also presented an overview of PERS to the Assembly Government Affairs Committee on February 15, 2005, that was very well received.

2. Staff updated the Board on the current bill draft request list for the 2005 Legislative Session along with the additional BDR's that were posted after the publication of the board packet materials.

3. Senate Bill 46 has been introduced by Senator McGinness that would raise the salary limit for volunteer firefighters from $750 to $2,000. This bill would be cost neutral to PERS according to the actuary's estimates. On motion of Charles Silvestri, the Board voted unanimously to take a neutral position on Senate Bill 46.

RATIFICATION AGENDA

On motion of Charles Silvestri, the Board voted unanimously of those present to approve the Ratification Agenda, as submitted. David Kallas was not present for this vote.

1. Approved the Administrative Fund disbursements

2. Approved all personnel action since the last report.

3. Approved the Performance Expectations for Callan Associates, Inc.

4. Approved the amended international bond index Investment Performance Guidelines with Payden & Rygel for the Legislators' and Judicial funds.

5. Approved the penalty waiver request for Elko County School District in the amount of $182.06.

6. Retroactively approved the PERS' membership request by Carson Montessori Charter School, effective June 1, 2004.

7. Approved the Benefit Payment Audit Report for the quarter ending December 31, 2004.

DENIALS
REPORTS
COMMENTS

1. Public Comment

   1. Mr. Craig Lowe requested the Board review his staff denial letter as an official appeal. He is asking PERS to reinstate his 7-years and 7-months of service that was canceled when he took a refund. His decision to take a refund was based on information he received from PERS' staff and he did not believe he was canceling his retirement service credit by taking a refund.

   2. Dana Bilyeu thanked the Board for her 10-years of service plaque.

   3. Laura Wallace recognized Ken Lambert's service to PERS and thanked him for the huge contribution he has made to PERS. She wished Ken the very best in his new endeavor.

   4. Ken Lambert thanked the Board and staff and expressed his appreciation for his tenure at PERS.

   5. President-elect, Roger Maillard complimented staff on the professional presentation made to the Assembly Committee on Government Affairs. Mr. Maillard was very impressed with PERS' senior staff and offers his organization's support and RPEN's support during this legislative session. Mr. Maillard also mentioned that he is worried about BDR 998 which requires a study be performed on PERS.

2. The Deputy Attorney General told Ken Lambert that he will be missed.

3. Administrative Report by Staff:

   Executive Officer:

   1. The Executive Officer mentioned that after PERS' recent computer-upgrade some of the data included in our monthly statistical reports was archived but not populated into the current year reports. We are currently building the data back into the system for inclusion in the current fiscal year and will add to that going forward.

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

   Mark Balen

   1. On behalf of the Board, staff, and members of the system, Mr. Balen thanked Dana Bilyeu for her dedication to PERS during her past tenure and looked forward to the next 10-years. He also presented her with a 10-year plaque.

   2. On behalf of the Board, Mr. Balen thanked Ken Lambert for his dedicated service to PERS and appreciated his assistance over the past years. Ken will be leaving PERS in March for a position in California. We wish Ken well.

   Charles Silvestri

   1. Mr. Silvestri thanked Ken Lambert for his help over the years and mentioned he is sorry to see Ken leave. Mr. Silvestri also wished Ken good luck.

   Sue DeFrancesco

   1. Ms. DeFrancesco thanked Ken Lambert for his generosity over the years and stated that he has been an asset to the PERS organization. We wish Ken well in his new position.

   Warren Wish

   1. Mr. Wish requested Mr. Craig Lowe's staff denial letter be placed on the next board meeting agenda to be heard as an official appeal.

   2. Mr. Wish stated that Ken Lambert made an outstanding teammate with Laura Wallace, PERS' Investment Officer and that it will be hard to replace him. Mr. Wish wished Ken good luck in his new endeavor.

The following is the time schedule for the meeting:

On February 15, 2005, the Education Session was called to order at 3:00 p.m. by Chairman Balen and recessed at 4:25 p.m. The February 16, 2005, Board meeting was called to order at 8:00 a.m. One break was taken at 9:40 for approximately 10 minutes and a second break was taken at 10:40 a.m. for approximately 20 minutes. The meeting was recessed at 11:30 a.m. for lunch and was called back to order at approximately 1:00 p.m. The meeting was adjourned at 1:20 p.m.