Current Info

PUBLIC EMPLOYEES' RETIREMENT BOARD
EDUCATION SESSION AND MEETING MINUTES FOR
Wednesday, April 20 and Thursday, April 21, 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., April 20, 2005, in the PERS' Board Room, 693 West Nye Lane, Carson City. Members present: Mark Balen, Purisimo Hernandez, David Kallas, Charles Silvestri, George Stevens, and Warren Wish. Members absent: Susan DeFrancesco.

1. INVESTMENTS

1. Staff discussed the essence of portfolio monitoring from hiring the manager through performance and compliance reports.

2. ADMINISTRATION

1. Staff reviewed the process and function of PERS' internal audit division.

3. PUBLIC COMMENT
4. RECESS
Chairman Balen recessed the meeting at 4:10 p.m.

The Board meeting of the Public Employees' Retirement Board was called to order by Chairman Balen at 8:00 a.m., April 21, 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. On motion of David Kallas, the Board voted unanimously to:

   1. Approve permanent and total disability retirement for: Dale Anderson, Cheryl Brady, Kathleen Briganti, Kathleen Camp, Colleen Courtney, Sherl Doyle, Kenneth Drefs, Russell Eckardt, Lorel Ehrlich-Nemiroff, Manual Floyd, Susan Fox, Bernadette Franklin, Linda Hack, Dean Hofmann, Linda Kelly, John Koval, Raymond Liu, Barbara Montogmery, Howard Palmer, Rebecca Poirier, Terry Rasner, Ernesto Suraez, and Julie Villani.

   2. Approve reemployment requests by disability recipients: Raymond Hummell, Michael Joseph, John McCreary, Lawrence McDowell, Michael Novotny, Terry Rasner, and Sharyn Wetzel.

INVESTMENTS

1. Brett Cambern of Banc One Investment Advisors presented an update on their active U.S. bond portfolio and an update on Banc One's merger with JP Morgan Asset Management.

2. Robert Prusiewicz and Robert Windsor of BNY Asset Management presented an update on their international stock index account and an overview of their firm.

3. There were no recommended changes to the Interim Investment Directives for the PERS', Legislators', or Judicial funds.

BOARD

1. On behalf of the Board, Chairman Balen presented and read to the staff a letter of commendation recognizing the achievements and dedication of PERS' staff to the members, beneficiaries, and public employers of the System. PERS' employee recognition week is planned for May 2-8, 2005. The Executive staff has approved casual dress for the entire week and will choose one day during the week to bake and serve desserts to the staff. On motion of Warren Wish, the Board voted unanimously to adopt the Letter of Commendation which will be presented to the staff during PERS' employee recognition week.

2. Staff discussed the status of the search process for an assistant investment officer. Staff has received and reviewed eighty-three applications which have been narrowed down to five finalists for interviews. Staff has completed the interview process and is speaking with one individual at this time. Staff is not requesting any action be taken at this time.

3. On motion of Charles Silvestri, the Board voted unanimously to approve the minutes of the Retirement Board education session and meeting held March 15 and 16, 2005, as submitted.

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

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

LEGISLATION

1. Legislative matters.

   1. Assembly Bill 110 (BDR 34-376) - AB 110 revises provisions governing incentives for teachers for teaching in certain subject areas and certain at risk schools. Since the publication of the agenda, this bill has been amended to include the 1/5th of a year purchase of retirement service credit for certain licensed school employees that are working at a designated "at risk" school or a $2,500.00 stipend instead of the retirement service credit purchase. Staff is recommending a neutral position on this bill as long as the number of 1/5th of year retirement service credit purchases does not exceed 4,000. On motion of Dave Kallas, the Board voted unanimously to adopt a neutral position on AB 110.

   2. Assembly Bill 270 (BDR 58-59) - AB 270 revises provisions governing the Transportation Services Authority and the Taxicab Authority. This bill places employees of the Transportation Services Authority and the Taxicab Authority in the Police and Firefighters' Retirement Fund. At the time of publication of the agenda, staff recommended the Board adopt a position in opposition to this bill. Since then, AB 270 did not meet the April 15, 2005 deadline of the legislature so pursuant to Joint Standing Rule 14.3.1, no further action is allowed on this bill. On motion of Charles Silvestri, the Board voted unanimously of those present to oppose AB 270. Dave Kallas was not present for this vote.

   3. Assembly Bill 319 (BDR 36-352) - AB 319 provides certain rights and other benefits to persons who perform service in the military services. This bill has been amended since the publication of the agenda and has removed PERS from the bill. Staff recommended the Board adopt a neutral position on AB 319. On motion of Warren Wish, the Board voted unanimously of those present to adopt a neutral position on AB 319. Dave Kallas was not present for this vote.

   4. Assembly Bill 412 (BDR S-1009) - AB 412 requests an appropriation for the Judicial Retirement Fund to pay the unfunded accrued liability for members of Judicial Retirement System. As written, this bill would meet the unfunded accrued liability of the Judicial Retirement System as of January 1, 2005, as determined by the System's actuary. Staff recommends the Board support AB 412 as originally drafted. On motion of Charles Silvestri, the Board voted unanimously of those present to support AB 412 as originally drafted and reserves the right to review and comment on any amendments made to AB 412. Dave Kallas was not present for this vote.

   5. Assembly Bill 529 (BDR 23-1372) - AB 529 creates a DROP and a Benefit Actuarially Calculated DROP program within PERS. At the time of publication of the agenda, staff recommended the Board adopt a position in opposition to this bill. Since then, AB 529 did not meet the April 15, 2005 deadline of the legislature so pursuant to Joint Standing Rule 14.3.1, no further action is allowed on this bill. On motion of Susan DeFrancesco, the Board voted unanimously of those present to oppose Assembly Bill 529. Dave Kallas was not present for this vote.

   6. Assembly Concurrent Resolution 8 (BDR R-998) - ACR 8 creates an interim study regarding the long-term financial stability of the Public Employees Retirement System. This bill directs the Legislature to conduct a long-term study of PERS. Currently, the Interim Retirement and Benefits Committee of the Nevada Legislature meets with PERS during the interims and reviews PERS' actuarial cost studies associated with the program as well as other issues regarding the System. This bill creates a different and separate study committee. In addition to the oversight of the Interim Retirement and Benefits Committee, the PERS Board has policies in place that provide yearly valuations, a second opinion actuarial valuation review every ten years, internal control audits every five years, actuarial experience studies every three to five years, yearly fiscal audits and periodic benefit structure reviews. Due to the existence of the standing legislative committee who is charged with the oversight of the System, as well as the numerous other studies required by the Retirement Board, staff recommends opposition to ACR 8 as unnecessary and duplicative. On motion of Warren Wish the Board voted 5-yeas and 1-nay of those present to oppose ACR 8. George Stevens voted no and Dave Kallas was not present for this vote.

   7. Assembly Concurrent Resolution 14 (BDR R-1354) - ACR 14 creates an interim study regarding enhanced compensation to attract and retain teachers and regarding expediency of test results on high school proficiency exams. This bill directs the Legislative Commission to appoint a study committee to review the effectiveness of financial incentives including signing bonuses and purchase of service retirement credit. Staff recommends the Board adopt a neutral position. On motion of Charles Silvestri, the Board voted unanimously of those present to adopt a neutral position on ACR 14. Dave Kallas was not present for this vote.

   8. Senate Bill 328 (BDR 23-82) - SB 328 makes various changes to the Public Employees' Retirement System. This bill is the Retirement System's requested technical changes to the Retirement Act. On motion of George Stevens, the Board voted unanimously of those present to support Senate Bill 328. Dave Kallas was not present for this vote.

   9. Senate Bill 346 (BDR 17-970) - SB 346 revises provisions relating to the Legislators' Retirement System. This bill allows legislators to opt not to participate in the Legislators' Retirement System. There is no fiscal impact to the Legislators' Retirement System. Staff recommended the Board adopt a neutral position on SB 346. On motion of Purisimo Hernandez, the Board voted unanimously of those present to adopt a neutral position on SB 346. Dave Kallas was not present for this vote.

   10. Senate Bill 369 (BDR 1-525) - SB 369 revises the provisions governing the retirement benefits of retired justices of the Supreme Court and district judges. This bill limits the number of senior judges that may participate in the senior judge program to 20 judges. The cost of the benefit is included in the contribution rate of the Judicial Retirement System. Staff recommends a neutral position on SB 369. On motion of Susan DeFrancesco, the Board voted unanimously of those present to adopt a neutral position on SB 369. Dave Kallas was not present for this vote.

   11. Senate Bill 438 (BDR 1-217) - SB 438 authorizes justices of the peace and municipal judges to participate in the Judicial Retirement Plan under certain circumstances. This bill enables local governments to allow justices of the peace or municipal court judges to move from the regular PERS fund to the Judicial Retirement System. The cost is the difference in the contribution rates that would be incurred by the local governments. Staff recommends a neutral position on SB 438 as there is no impact to the System. On motion of Purisimo Hernandez, the Board voted unanimously to adopt a neutral position on SB 438. Dave Kallas was not present for this vote.

   12. Senate Bill 454 (BDR S-106) - SB 454 provides that investigators employed by the Attorney General are eligible to enroll in the Police and Firefighters' Retirement Fund. This bill would place AG investigators into the Police and Firefighters Retirement Fund without evaluation or review by the Police and Firefighters' Retirement Fund Advisory Committee and/or the approval of the Retirement Board. Staff recommends a position of opposition to SB 454 as the Board has adopted an evaluation process for approval in the Police and Firefighters Retirement Fund. On motion of Susan DeFrancesco, the Board voted unanimously of those present to oppose SB 454. Dave Kallas was not present for this vote.

   13. Senate Bill 464 (BDR 31-580) - SB 464 revises certain provisions relating to state financial administration. This bill would include PERS in the State collateral pool. PERS offered an amendment to exempt PERS from inclusion in the collateral pool which was accepted by the sponsor of the bill. Staff recommends a neutral position as long as the amendment is adopted by the Senate. On motion of Warren Wish, the Board voted unanimously of those present to adopt a neutral position on Senate Bill 464 with the Senate's adoption of PERS' proposed amendment relating to this bill. Dave Kallas was not present for this vote.

   14. Senate Bill 485 (BDR S-1107) - SB 485 repeals the prospective expiration of provisions governing allowances paid to certain retired employees who fill positions for which a critical labor shortage exists. This bill would remove the sunset of the critical labor shortage and trigger a raise in the contribution rates due to the cost of the benefit. Staff recommends the Board adopt a position in opposition to this bill solely based on the costs. On motion of Purisimo Hernandez, the Board voted unanimously of those present to oppose Senate Bill 485 solely based on the costs of the benefit. Dave Kallas was not present for this vote.

   15. Senate Concurrent Resolution 12 (BDR R-626) - SCR 12 directs the Legislative Commission to conduct an interim study on the feasibility of including persons employed as peace officers by an Indian Tribe in the Public Employees' Retirement System and granting them the powers of peace officer. Staff recommends a neutral position on SCR 12. On motion of Susan DeFrancesco, the Board voted unanimously of those present to adopt a neutral position on Senate Concurrent Resolution 12. Dave Kallas was not present for this vote.

2. Staff provided a status update on the following bills:

   1. Assembly Bill 60 - AB 60 has been amended and no longer contains the 1/5th of a year retirement service credit purchase for certain school employees. This provision has been placed into Assembly Bill 110. Staff is no longer tracking AB 60.

   2. Assembly Bill 113 - AB 113 was amended and do passed as amended on April 13th by the Assembly Committee on Government Affairs. The Board has adopted a neutral position on AB 113.

   3. Assembly Joint Resolution 1 - AJR 1 is still pending in the Senate Committee on Government Affairs.

   4. Senate Bill 122 - SB 122 was passed by the Senate on April 15th with 21 yeas and transmitted to the Assembly. On April 18th the bill was referred to the Assembly Committee on Government Affairs. The bill was heard on April 20th with no action taken.

   5. Senate Bill 145 - SB 145 was heard in the Senate Committee on Finance on April 4th with no action taken. Since the hearing the sponsor of the bill has suggested different language to try and remove the fiscal note attached to this benefit modification. Staff is not comfortable reducing or removing the fiscal note due to the possible increased usage of this disability benefit.

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

RATIFICATION AGENDA

1. Approved the Administrative Fund disbursements.

2. Approved all personnel action since the last report.

3. Approved out-of-state travel for investment staff to attend the breakfast workshop offered by Callan Associates, Inc. in San Francisco on June 23, 2005.

4. Retroactively approved the non-U.S. bond index Investment Performance Guidelines with Payden & Rygel and UBS for the PERS' fund, effective March 8, 2005.

5. Approved out-of-state travel for the Director of Employer and Production Services, the Director of Member and Retiree Services, the Manager of the Las Vegas office and the Manager of Production Services to attend the Cost Effective Management (CEM) conference in Boise, Idaho on May 17-19, 2005.

6. Approved the Phase-In Agreement between Western Nevada Community College and James S. Pawluk, effective July 1, 2005.

7. Approved the Survivor Benefit reinstatement for Edward Phillip Shelton.

8. Approved accounts receivable write-offs for overpaid benefits to Donna Swanson in the amount of $1,079.03 and Bobby Walton in the amount of $1,203.44.

9. Approved the penalty waiver request for the City of Las Vegas in the amount of $1,672.05.

10. Approved the Final Benefit Audit Report for December 2003.

11. Approved the Final Benefit Audit Report for February 2004.

12. Approved the Benefit Payment Audit Report for Fiscal Year 2004.

13. Approved the POS EGTRRA Rollover Audit Report.

14. Approved out-of-state travel for one internal audit staff member to attend the APPFA conference in Phoenix, Arizona, May 1-4, 2005.

15. Approved contract with Facta Vera to provide check writing software, first year of maintenance, installation, and training for an amount not to exceed $35,000.00.

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

DENIALS
REPORTS
PUBLIC COMMENTS

1. Ron Dreher, of PORAN and representing the professional peace officers of the State, addressed the Board regarding a legislative request he is trying to put forth to appropriate approximately $20 million from the general fund for the Police and Firefighters' Retirement Fund to offset the contribution rate increase scheduled for July 1, 2005. Mr. Dreher spoke with Assemblyman Hettrick to possibly put an amendment on Assembly Bill 412 which requests an appropriation of approximately $24 million to pay the unfunded accrued liability of the Judicial Retirement System. Mr. Dreher will be lobbying the Assembly Ways and Means committee to assist in this matter. Mr. Dreher asked that the Board take this matter under consideration and adopt a neutral or position of support for his one-time appropriation request for the Police and Firefighters' Retirement Fund.

2. The Deputy Attorney General had nothing to report.

3. Administrative Report by Staff:

   Executive Officer:

   1. The Executive Officer reported that PERS budget has been heard by the Assembly Committee on Ways and Means and the Senate Committee on Finance. The Assembly committee has partially passed the budget but the Senate committee has not. The Senate committee asked questions regarding PERS' funding policy, contribution rates scheduled for July 1, 2005 and critical labor shortage which Tina Leiss, Operations Officer superbly answered.

   2. The Executive Officer stated that Mary Pistoresi, Internal Audit Supervisor, has accepted another position at the Public Utilities Commission and will be leaving PERS next week. The Executive Officer thanked Mary for her service to PERS and wished her well in her new position.

   Investment Officer:

   1. The Investment Officer mentioned that approximately 60 applications have been received for the Administrative Analyst position. Staff has scheduled approximately six individuals for interviews. Staff hopes to have a confirmation for the Board at the May meeting.

   Operations Officer:

   1. The Operations Officer informed the Board that Patti Keyes, Director of Employer and Production Services, has developed a plan to streamline the process for preparing a 1/5th of the year retirement service credit purchase. Staff will review the new procedures and determine if they meet PERS' policies.

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

   Mark Balen

   1. Chairman Balen asked staff to share and explain the Board's position in opposition to Senate Bill 485 with the legislature that it is due to the cost that all employers and employees would incur to continue the "critical labor shortage" designation past its sunset date.

   2. Mr. Balen on behalf of the Board stated that the Board appreciates all PERS' staff in Carson City and Las Vegas for all they do for our members and beneficiaries. Our thanks to all the staff for the excellent job they do.

   Charles Silvestri

   Member Silvestri complimented the Executive staff on the great job they are doing at the legislature during this session.

   Sue DeFrancesco

   Vice-chairman DeFrancesco requested information on Phase-In Agreements be placed in the next newsletter and shared with the Department of Education and all the school districts.

   Warren Wish

   Warren mentioned that he attended a conference this past weekend and a couple of questions came up from some of the retirees in the audience.

   1. Is it possible for PERS to send retiree checks twice a month instead of once a month?

   2. Is there a way to send the monthly checks out on the same day of every month instead of the 4th day before the last day of every month?

   Staff will research the questions and report back to the Board at a future meeting.

The following is the time schedule for the meeting:

On April 20, 2005, the Education Session was called to order at 3:00 p.m. by Chairman, Mark Balen and recessed at 4:10 p.m. The April 21, 2005, Board meeting was called to order at 8:00 a.m. Two breaks were taken at 8:55 and 10:35 for approximately 10 minutes each. The meeting was adjourned at 11:20 a.m.