CITY OF KNOXVILLE PENSION BOARD REVISED AGENDA JANUARY 13, 2005 8:15 A

CITY OF KNOXVILLE PENSION BOARD

MINUTES

JANUARY 13, 20058:15 A.M.

917B E. 5^TH AVENUE

The regular meeting of the City of Knoxville Pension Board was held in the Pension Board Conference Room at 917 E. 5^th Avenue at 8:15 a.m. on January 13, 2005.

Present were: Mayor Bill Haslam, Mr. Kent Bates, Mr. Buddy Harrell, Mr. Stephen King, Mr. Christopher Kinney, Mr. Michael Cherry and Attorney C.C. “Bud” Gilbert.

Also present: Ms. Carol Mahler, Ms. Anita Cash, City Employee’s Association representative, Mr. Herman Beeler and Mrs. Debbie Beeler (Mrs. Beeler is an active General Government employee), and John Dreiser, Attorney representing Mrs. Beeler. Mr. Joe Walsh, Deputy Director - Community & Neighborhood Services.

CALL TO ORDER:

Mayor Haslam presided and called the meeting to order at 8:16 a.m.

WELCOME TO NEW MEMBER

Mayor Haslam welcomed new Pension Board member and General Government – Seat B, representative, Stephen King.

RECOGNITION OF MS. CAROL MAHLER’S SERVICE ON THE PENSION BOARD:

Mayor Haslam presented Ms. Mahler with a plaque in appreciation of her service on the Pension Board.

ELECTION OF OFFICERS - CHAIR, VICE-CHAIR & SECRETARY FOR 2005

Motion: Mr. Harrell made a motion to elect Mayor Bill Haslam for Chair. Mr. Bates seconded the motion. The motion carried. Mayor Haslam did not vote.

Motion: Mr. Harrell made a motion to elect Kent Bates for Vice-Chair. Mr. Kinney seconded the motion. The motion carried. Mr. Bates did not vote.

Motion: Mr. Bates made motion to elect Scott Calloway for Secretary. Mr. Kinney seconded the motion. The motion carried.

APPROVAL OF REGULAR MEETING MINUTES FOR December 9, 2004

Motion: Mr. Bates made a motion to approve the December 9, 2004, meeting minutes. Mr. Harrell seconded the motion. The motion carried unanimously by the members present.APPROVAL OF REVISED AGENDA: Exhibit 1

The Revised Agenda was approved without objection.

CONTRACTS: None

ADMINISTRATIVE MATTERS:

State Street Contract

Mr. Cherry advised the Board that the new contract with the trustee, State Street, was completed. Mayor Haslam thanked Summit Strategies/Mr. Cherry for their handling of the contract negotiations.

Post Retirement Benefit Summary

Mr. Cherry provided the board with a summary of the monthly benefit payments after the post retirement increases had been applied for 2005 and noted that monthly retiree benefit payments (not including Plan F) had now surpassed $2,000,000.

APPEALS:

Prior credited service reinstatement - Debbie Beeler, General Government – Plan G2 – Exhibit 2

Attorney John Dreiser with the law firm of Tony Farmer, represented Ms. Beeler in her appeal to the Board to reinstate prior credited service time, and distributed to the Board Ms. Beeler’s September 1, 1999, City of Knoxville Employee Benefits Statement. Mr. Dreiser indicated that Ms. Beeler was unaware of any lost time for based on the date of employment noted on the benefits statement. Mr. Joe Walsh, Deputy Director in the Community and Neighborhood Services Department, explained to the Board the contractual arrangements between the City of Knoxville and KCDC. Mr. Walsh also explained to the Board, how employee informational meetings were held, specifically in regard to the 1998 charter change allowing employees to buy back prior service time. It was determined that Ms. Beeler had transferred to the South Knoxville recreation center in December 1998 and was employed there during the “window” period of time for general government employees to buyback prior employment which was forfeited when an employee withdrew their employee contributions upon termination of the prior employment. Mr. Cherry noted that Ms. Beeler had signed an enrollment form in January 1979 showing the hire date of July 3, 1978.

After Mr. Dreiser’s appeal to the Board and questions to Ms. Beeler from the Board, Mr. Dreiser asked the Board to defer their decision to the February 10, 2005 Pension Board meeting in hopes that all member’s of the pension board could discuss the issue prior to a determination being made.

Motion: Mr. Bates made a motion to defer Ms. Beeler’s appeal to reinstate prior credited service time to the February 10, 2005, Pension Board Meeting. Mr. King seconded the motion. The motion carried unanimously by the members present.

Mayor Haslam left the meeting at 8:58 a.m. and Mr. Bates presided.

EXECUTIVE DIRECTOR COMMENTS:

Mr. Cherry informed the Board that at the end of December 2004, fund assets were $480.8 million.

ATTORNEY COMMENTS:

Pension Charter Amendments – proposed guidelines – Exhibit 3

Attorney Gilbert distributed to the Board and reviewed with the Board, a proposal for restricting and safeguarding the amendatory process for city charter pension provisions, which had been previously discussed at the December 9, 2004, Pension Board meeting.

Motion: Mr. Kinney made a motion to defer action on the proposed guidelines for pension charter amendments, to the February 10, 2005, Pension Board meeting. Mr. Harrell seconded the motion. The motion carried unanimously by the members present.

Pension Board Rules for Election of Board Members – Exhibit 4

Attorney Gilbert distributed to the Board an updated and revised copy of the Pension Board’s Election Rules which were reviewed at the December 9, 2004, Pension Board meeting. Attorney Gilbert discussed with the Board the changes to the draft copy distributed to the Board in December.

Ms. Anita Cash, a representitive from the City Employees’ League, suggested that the voting should be conducted “in-person” as had been done in the past.

Motion: Mr. Kinney made a motion to approve the Pension Board rules for election of Board Members. Mr. Harrell seconded the motion. The motion carried unanimously by the members present.

ENROLLMENTS:

The following Fire Department Uniformed employee has filed an application to become a member of the Plan C pension system.

Carlos E. Perez

Motion: Mr. Kinney made a motion to approve this application for enrollment in the Plan C pension system. Mr. Harrell seconded the motion. The motion carried unanimously by the members present.

The following General Government employees have filed applications to become members of the Plan G1 pension system.

Alicia Catlett

Robert M. Corum

James Gordon

David M. Hill

George R. Jensen

Eric D. Merritt

Michael A. Pope

Motion: Mr. Kinney made a motion to approve these applications for enrollment in the Plan G1 pension system. Mr. Harrell seconded the motion. The motion carried unanimously by the members present.

WITHDRAWALS:

The following employees have filed applications to withdraw employee pension contributions plus 4% interest and the supplemental retirement account as applicable in Plan G Option 1.

Raymond Britton, General Government, Plan G-1 – Non-vested

Gregory H. Clark, Jr. General Government, Plan G-2 – Vested

Lyndon Gregory, Fire Department, Plan C - Vested

James Hudson, III – Beneficiary of Carolyn Hudson, Schools Plan A – Vested, who died in service

Wendy Rainey – Beneficiary of Carolyn Hudson, Schools Plan A – Vested, who died in service

Michael D. McCool, Police Department, Plan C – Vested

Chris Meyers, General Government, Plan G-1 – Non-vested

Motion: Mr. Harrell made a motion to approve these applications for withdrawal of employee contributions. Mr. Kinney seconded the motion. The motion carried unanimously by the members present.

RETIREMENTS:

APPLICATION FOR RETIREMENT: PLAN A

CHARTER SECTION 1360.12

Volena L. Askew, Schools Certified Option C

Cash Refund

Date of birth, June 22, 1941: 63 years of age

Total City credited service: 11 years

Total County credited service: 17 years 6 months

Total credited service: 28 years 6 months

Last date of employment with City: June 1987

Last date of employment with County: December 2004

Average base earnings for 4 years, $400.00 x 78% = $3.12

Average excess earnings for 4 years, $869.02 x 1.58% = $13.73

making a total of $16.85 benefit per year of service. $16.85 x 11 =

$185.35. Ms. Askew chose Option C – Cash Refund to Wallace Askew, spouse. $185.35 x .9315 =

$172.65 pension effective January 1, 2005.

The City benefit payment is determined using City only salaries and City service time.

The City benefit does not include any County service.

The total amount of the combined City and County benefit is $1,049.97.

Motion: Mr. Harrell made a motion to approve this application for retirement payable under the Cash Refund Option. Mr. King seconded the motion. The motion carried unanimously by the members present.

APPLICATION FOR EARLY RETIREMENT: PLAN A

CHARTER SECTION 1360.17

Sheryl J. Sallie, Schools Certified Option B-12

15 Year Certain & Life

Date of birth, October 14, 1948: 56 years of age

Total City credited service: 17 years

Total County credited service: 17 years 6 months

Total credited service: 34 years 6 months

Last date of employment with City: June 1987

Last date of employment with County: December 2004

Average base earnings for 4 years, $400.00 x 75% = $3.00

Average excess earnings for 4 years, 1,384.68 x 1.50% = $20.77

making a total of $23.77 benefit per year of service. $23.77x 17 =

$404.09 x ER Factor .5726 =

$231.38. Ms. Sallie chose Option B-12 – 15 Yr. Certain & Life to Reginald Sallie and Donna G. Hill. $231.38 x .9541 =

$220.76 pension effective January 1, 2005.

The City benefit payment is determined using City only salaries and City service time.

The City benefit does not include any County service.

The total amount of the combined City and County benefit is $1,056.81.

25 years required for Early retirement. Supreme Court ruling entitles retiree to combine City & County credited service.

Motion: Mr. Harrell made a motion to approve this application for Early retirement for the City portion payable under Option B-12. Mr. King seconded the motion. The motion carried unanimously by the members present.

APPLICATION FOR RETIREMENT: PLAN G2

CHARTER SECTION 1360.12

Maureen A. Tipton, General Government No Option

Date of birth, November 27, 1942: 62 years of age

Total credited service: 38 years 1 month 24 days

Average monthly salary for 2 highest 12 month periods, $2,930.98 x 2.1% =

$61.55 x 38.14909 =

$2,348.08 pension effective January 1, 2005.

Motion: Mr. Harrell made a motion to approve this application for retirement. Mr. King seconded the motion. The motion carried unanimously by the members present.

APPLICATION FOR PARTICIPATION IN THE DELAYED RETIREMENT OPTION PROGRAM (DROP): PURSUANT TO CHARTER SECTION 1390.22 – PLAN C.

The following employee has chosen a Delayed Retirement Option and will receive a one-time payment of the accumulated monthly benefits on termination of employment with the City of Knoxville.

Kenneth R. Burnette, Fire Department Uniformed No Option Date of birth, June 18, 1946: 58 years of age

Total credited service: 31 years 2 months 9 days

Average monthly salary for 2 highest 12 month periods, $3,891.28 x 2.5% =

$97.28 x 30 =

$2,918.40 pension effective January 1, 2005.

DROP complete December 31, 2006.

Motion: Mr. King made a motion to approve this application for DROP retirement. Mr. Harrell seconded the motion. The motion carried unanimously by the members present.

James E. Cummings, Fire Department Uniformed Option A-4 – 50%

without reinstatement

Date of birth, May 3, 1948: 56 years of age

Total credited service: 32 years 10 months 10 days

Average monthly salary for 2 highest 12 month periods, $3,460.39 x 2.5% =

$86.51 x 30 = $2,595.30. Mr. Cummings chose Option A-4 – 50% without reinstatement to Diana N. Cummings, spouse. There is no reduction in Plan C for Option A-4.

$2,595.30 pension effective January 1, 2005.

DROP complete December 31, 2006.

Motion: Mr. King made a motion to approve this application for DROP retirement payable under Option A-4. Mr. Harrell seconded the motion. The motion carried unanimously by the members present.

Gracie L. Jones, Police Department Uniformed No Option

Date of birth, June 15, 1954: 50 years of age

Total credited service: 25 years 1 month 19 days

Average monthly salary for 2 highest 12 month periods, $4,271.56 x 2.5% =

$106.79 x 25.13539 =

$2,684.21 pension effective January 1, 2005.

DROP complete December 31, 2006.

Motion: Mr. King made a motion to approve this application for DROP retirement. Mr. Harrell seconded the motion. The motion carried unanimously by the members present.

John A. Kimberlin, Fire Department Uniformed Option A-4 – 50%

without reinstatement

Date of birth, May 18, 1945: 59 years of age

Total credited service: 31 years 2 months 23 days

Average monthly salary for 2 highest 12 month periods, $3,700.79 x 2.5% =

$92.52 x 30 = $2,775.60. Mr. Kimberlin chose Option A-4 – 50% without reinstatement to Vickie L. Kimberlin, spouse. There is no reduction in Plan C for Option A-4.

$2,775.60 pension effective January 1, 2005.

DROP complete December 31, 2006.

Motion: Mr. King made a motion to approve this application for DROP retirement payable under Option A-4. Mr. Harrell seconded the motion. The motion carried unanimously by the members present.

Charles R. Kitts, Fire Department Uniformed Option A-4 – 50%

without reinstatement

Date of birth, October 28, 1946: 58 years of age

Total credited service: 29 years 5 months 6 days

Average monthly salary for 2 highest 12 month periods, $3,867.37 x 2.5% =

$96.68 x 29.43311 = $2,845.59. Mr. Kitts chose Option A-4 – 50% without reinstatement to Diana Lynn Kitts, spouse. There is no reduction in Plan C for Option A-4.

$2,845.59 pension effective January 1, 2005.

DROP complete December 31, 2006.

Motion: Mr. King made a motion to approve this application for DROP retirement payable under Option A-4. Mr. Harrell seconded the motion. The motion carried unanimously by the members present.

APPLICATION FOR PARTICIPATION IN THE DELAYED RETIREMENT OPTION PROGRAM (DROP): PURSUANT TO CHARTER SECTION 1371.8 – PLAN G2

The following employees have chosen a Delayed Retirement Option and will receive a one-time payment of accumulated benefits on termination of employment with the City of Knoxville.

Luther R. Perry, General Government Option A-8 – 75%

with reinstatement

Date of birth, January 7, 1945: 59 years of age

Total credited service: 29 years 6 months 2 days

Average monthly salary for 2 highest 12 month periods, $3,342.76 x 2.1% =

$70.20 x 29.50548 = $2,071.28. Mr. Perry chose Option A-8 – 75% with reinstatement to Judy Carol Perry, spouse. $2,071.28 x .8654 =

$1,792.49 pension effective January 1, 2005. (Full benefit pursuant to Rule of 80)

DROP complete December 31, 2006.

Motion: Mr. King made a motion to approve this application for DROP retirement payable under Option A-8. Mr. Kinney seconded the motion. The motion carried unanimously by the members present.

Clarence H. Smith, Jr., General Government No Option

Date of birth, February 15, 1949: 55 years of age

Total credited service: 37 years, 6 months 25 days

Average monthly salary for 2 highest 12 month periods, $2,962.83 x 2.1% =

$62.22 x 37.56849 =

$2,337.51 pension effective January 1, 2005. (Full benefit pursuant to Rule of 80)

DROP complete December 31, 2006.

Motion: Mr. King made a motion to approve this application for DROP retirement. Mr. Kinney seconded the motion. The motion carried unanimously by the members present.

James F. Workman, General Government No Option

Date of birth, June 22, 1945: 59 years of age

Total credited service: 31 years, 10 months

Average monthly salary for 2 highest 12 month periods, $4,556.93 x 2.1% =

$95.70 x 31.83333 =

$3,046.45 pension effective January 1, 2005. (Full benefit pursuant to Rule of 80)

DROP complete December 31, 2006.

Motion: Mr. King made a motion to approve this application for DROP retirement. Mr. Kinney seconded the motion. The motion carried unanimously by the members present.

APPROVAL OF INVOICES FOR PROFESSIONAL SERVICES:

Bryan, Pendleton, Swats & McAllister – Actuary (November) 9,139.00 Bryan, Pendleton, Swats & McAllister – Actuary (December) 7,729.00

State Street – Custodial (October 2004) 19,450.53

State Street – Trustee (November 2004) 3,518.13

Mr. Cherry, Executive Director, has reviewed the bills and certifies that they are consistent with the services provided and are within the budgeted figures of the FY 2005 financial plan.

Motion: Mr. Kinney made a motion to pay these invoices. Mr. Harrell seconded the motion. The motion carried unanimously by the members present.

INVESTMENT MATTERS:

Oechsle International

Mr. Cherry advised the Board that Dan Holmes, the Board’s investment consultant, had expressed concerns about the recent personnel changes at Oechsle International Advisors. Mr. Cherry advised the Board that Mr. Holmes may recommend and invite potential international growth managers to make presentations for the Board at the February meeting.

OTHER:

Principal Life Insurance Contract

Mr. Cherry informed the Board that Principal Life Insurance Contract was very close to being finalized. He would discuss the amount and source of funding with Summit Strategies and advise the Board of funds to be transferred to the real estate allocation.

PUBLIC COMMENTS: None

ADJOURNMENT:

There being no further business, the following motion was made:

Motion: Mr. King made a motion to adjourn the meeting at 9:34 a.m. Mr. Harrell seconded the motion. The motion carried unanimously by the members present.

______________________

Chair

_______________________

Date