Current Info

PUBLIC EMPLOYEES' RETIREMENT BOARD
EDUCATION SESSION AND MEETING MINUTES FOR
Tuesday, October 18 and Wednesday, October 19, 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., October 18, 2005, in the PERS' Board Room, 693 West Nye Lane, Carson City. Members present: Mark Balen, Purisimo Hernandez, and Warren Wish. Members absent: Susan DeFrancesco, David Kallas, Charles Silvestri and George Stevens.

1. INVESTMENTS

1. Staff discussed what international equities are and how they work to reduce risk in the PERS', Legislators', and Judicial portfolios.

2. ADMINISTRATION

1. A. Staff gave a demonstration of PERS' new retiree web access program and how to review your retiree account information.

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 Board Chairman Mark Balen at 8:00 a.m., October 19, 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: Wanda Barnes, Keith Beverly, Anthony Blum, Geraldine Cameron, Marilyn Carson, Diane Crandall, Ernest Eblen, Jimmy Faulkner, Alisha Gatlin, Carol Gaydos, Quida Hedgecock, Kimberly Heggeseth, Mitchell Jones, Melissa Knight, Herbert Markle, Creeta Mouton, Pamela O'Neil, Mary Paquette, Susan Purcell, Robert Thomas, Jacob Valles, Janice Webb, and Michael Williams.

   2. Approve reemployment requests by disability recipients: Joy Crane, Steven Huggins, David Leavitt, Lula Lewis, Kathleen McManus, Troy Newville, Patrick O'Donnell, Pamela Penrose, Beverly Perby, Kristen Powell, Cynthia Ranson, Renee Snyder, Risa Stearns, Steven Ward, and Lucinda Zoccole.

INVESTMENTS

1. David Handke, Geoffrey Hauk, and Liz Smith of Allaince Capital presented a U.S. growth equity performance review for the PERS' fund.

2. Brian Matthews and Joan Payden of Payden & Rygel provided a performance update on U.S. and Non-U.S. bond portfolios for the PERS', Legislators', and Judicial funds. They also provided a global economic review and outlook for the bond markets.

3. Staff and Callan evaluated approximately thirty value managers which were listed in a memorandum provided to the Board at their September 22, 2005, meeting. This list has since been reduced to eight firms. Over the next couple of weeks staff will interview key individuals from each firm. At the November 2005 meeting, staff will discuss the firms and their findings from the interviews with the Board in order to select finalists to interview.

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

5. Staff provided an update on the status of the Request for Proposal for the 2nd Opinion Review of the Investment Program. Staff distributed invitation letters to approximately forty firms on September 23, 2005 with an October 21, 2005 deadline to respond. Staff hopes to recommend a consultant to the Board at their November 2005 meeting.

6. Staff presented Callan's review of the investment policies and guidelines related to the oversight of the Alternative Investment allocation. Callan has made some suggestions for change and staff is currently reviewing them and will prepare revisions and recommendations for the Board's review at the November meeting.

BOARD

1. On motion of David Kallas, the Retirement Board voted unanimously to approve the minutes of the Retirement Board's Investment Planning Seminar and meeting held September 21, and 22, 2005, as submitted.

2. There were no changes to the Retirement Board meeting dates. David Kallas reminded the Board that he would not be available for the November meeting due to a conflict.

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

4. Staff presented the Internal Audit Division Plan for fiscal year 2006. On motion of Charles Silvestri, the Retirement Board voted unanimously to approve the Internal Audit Division Plan for Fiscal Year 2006, as submitted.

5. Staff provided background information on the current Final Benefit Audit process utilized by the Internal Audit Division. Staff recommends reducing the percentage of final benefit audits conducted by the Internal Audit Division from 20% to 10% in order to focus on other high risk processes. On motion of Warren Wish, the Retirement Board voted unanimously to approve the proposed changes to the Benefit Audit Procedures, as submitted.

ACCOUNTING

1. Staff reviewed the Notice of Request for Proposal and the Request for Proposal itself for an examination of management's assertion about the effectiveness of the System's internal controls over financial reporting. Per Appendix 1, item 27 of the System's Monitoring and Reporting Policy, this review is required every 5 years. The last review was conducted on the period ending June 30, 2001. On motion of George Stevens, the Retirement Board voted unanimously to approve the release of the Notice of Request for Proposal and the Request for Proposal itself, for an examination of management's assertion about the effectiveness of the System's internal controls over financial reporting.

ADMINISTRATION

1. Staff highlighted the updated Statement of Services list to the Master Services Agreement with Cybertrust, Inc. (formerly known as TruSecure Corporation). On motion of Purisimo Hernandez, the Board voted unanimously to approve the updated Statement of Services to be added to the Master Services Agreement for Security Services with Cybertrust, Inc. (formerly known as TruSecure Corporation) at a cost not to exceed $152,138.70, for the period from December 1, 2005 to November 30, 2007.

2. Staff presented an explanation and sample calculation of the CPI cap formula set forth in NRS 286.5756 and how it affects some of PERS' retirees. This item was presented as information only; no action is required.

RATIFICATION AGENDA

On motion of Susan DeFrancesco, the Retirement Board voted unanimously to:

1. Approved the Administrative Fund disbursements.

2. Approved all personnel action since the last report.

3. Approve the reinstatement of Survivor Benefits for Justin Whipple.

4. Approve out-of-state travel for Board member Mark Balen to attend the Plan Sponsor Pension Fund Consultant Circle conference in Half Moon Bay, California on October 24-25, 2005, at no cost to the System.

5. Approve the Final Benefit Audit Report for September 2004.

DENIALS
REPORTS
PUBLIC COMMENTS

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

2. The Deputy Attorney General had no report.

3. Administrative report by Staff:

   Executive Officer:

   1. The Executive Officer thanked the Board for the opportunity to attend the National Conference on Teacher Retirement's annual conference held in Tampa, Florida after being moved from New Orleans. The conference was extremely organized and all speakers originally scheduled attended in the new location.

   2. The Executive Officer announced that PERS has received the PPCC award for fiscal year 2005. This award will be included in our 2005 CAFR.

   3. The Executive Officer asked for restaurant suggestions to hold the Retirement Board's annual Christmas dinner. Duke's Steak House and Carson Station Grill were offered. Staff will make arrangements.

   4. The Executive Officer reminded the Board that PERS' 2nd Annual Liaison Officer Conference will be held on Tuesday, November 15th at the Golden Nugget in Las Vegas. There are approximately 179 attendees.

   Operations Officer:

   1. The Operations Officer introduced her daughter, Samantha Leiss, who was born on September 22, 2005.

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

   Charles Silvestri:

   1. Mr. Silvestri thanked the Board for the opportunity to attend the NCTR conference. The topics and speakers were excellent and he received compliments on the PERS' staff and the organization from a number of attendees.

   Susan DeFrancesco:

   1. Mrs. DeFrancesco mentioned a new actuarial model that was presented at the NCTR conference.

   Warren Wish:

   1. Mr. Wish distributed information he received from the National Education Association (NEA) regarding proposed Federal pension reforms that may hurt defined benefit plan systems.

10. ADJOURNMENT

The meeting was adjourned at 11:10 a.m. by Chairman Balen.

The following is the time schedule for the meeting:

On October 18, 2005, the Education Session was called to order at 3:00 p.m. by Chairman Balen and recessed at 4:00 p.m. The October 19, 2005, Board meeting was called to order at 8:00 a.m. Two breaks were taken at 9:05 and 10:25 a.m. for approximately ten minutes each. The meeting was adjourned at 11:10 a.m.