CITY OF KNOXVILLE PENSION BOARD
MINUTES
Thursday – January 14, 2010
8:15 A.M.
917B E. 5TH AVENUE
The regular meeting of the City of Knoxville Pension Board was held in the Pension board conference room at 917 E. 5th Avenue at 8:15 a.m. on January 14, 2010.
Present were: Ms. Barbara Pelot, Mr. Greg Coker, Mr. Joe Hackney, Mr. Jim Hutchens, Ms. Robin Shelton, Mr. Jim York, Mr. Michael Cherry and Attorney Bud Gilbert.
CALL TO ORDER:
Ms. Pelot presided and called the meeting to order at 8:21 a.m.
ELECTION OF OFFICERS - CHAIR, VICE-CHAIR & SECRETARY FOR 2010
Motion: Mr. Hackney made a motion to elect Mayor Haslam as Chair. Mr. Coker seconded the motion. The motion carried.
Motion: Mr. Hutchens made a motion to elect Ms. Pelot as Vice-Chair. Mr. Coker seconded the motion. The motion carried.
Motion: Mr. Hutchens made a motion to elect Ms. Shelton as Secretary. Mr. Coker seconded the motion. The motion carried.
APPROVAL OF REGULAR MEETING MINUTES FOR December 10, 2009.
Mr. Hackney made a motion to approve the December 10, 2009, meeting minutes. Mr. Coker 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:
Acadian Asset Management
Mr. Cherry advised the Board that the Acadian Asset Management contract and initial funding in December had been completed. Mr. Cherry advised that funding of the $29,000,000 investment in Acadian would progress with $5,000,000 monthly withdrawals from Silchester.
ADMINISTRATIVE MATTERS:
Investment Committee Meeting
Mr. Cherry advised the Board that the Investment Committee met on Tuesday, January 5, 2010, and that the meeting minutes were included in their agenda packet.
Ms. Shelton arrived at 8:28 a.m.
Mr. Cherry informed the Board that the fund’s performance had been good since July 2009. He further advised the Board that the auditors would make a presentation to the Board in February.
Attorney Gilbert advised the Board that even with the market rally, the fund still has a long-term deficit that the coming valuations might not clearly explain since the valuations were reported based on a ten-year smoothing feature. Attorney Gilbert advised the Board that it might consider increased communications with City Council and the city administration to make sure the legislative body and other appropriate city officials are aware of the effects of such long-term deficit. Mr. York acknowledged that the city administration is aware of the issue and will help to keep city council informed of the same.
Mr. Cherry reminded the Board of actuary, Alan Pennington’s special presentation to the Board scheduled for Thursday, January 21, 2010 at 8:15 a.m. in the board conference room.
Mr. Cherry informed the Board that the agreements with CastleArk - Large Growth Manager and, Income Research & Management (IRM) -Tips Manager, were being reviewed and that Investment Consultant, Dan Holmes, had been negotiating fees with each of these two managers.
Mr. Cherry advised the Board that the cost of living adjustments had been processed for all applicable retirees and that the total adjustment amounted to a monthly payment increase of approximately $78,000 or $936,000 per year.
Mr. Hutchens advised the Board that due to a scheduled surgery, he would not be able to attend the April, May and June board meetings. Ms. Pelot urged the other board members to make every effort to attend those meetings Mr. Hutchens will be absent so as to avoid any meeting quorum issues.
EXECUTIVE DIRECTOR COMMENTS: None
ATTORNEY COMMENTS:
Glenda Fields Litigation – Exhibit 2
Attorney Gilbert distributed to the Board and reviewed a recent order by Chancellor Weaver in the Glenda Fields litigation. Attorney Gilbert will recommend to the Board in February the next action to be taken.
G1 Member Complaint
Attorney Gilbert advised the Board of the progress to date on the Plan G1 members’ complaint (which although drafted and presented to him for review, has not been filed by the group) and what still remained to accomplish before he could give a recommendation to the Board, which he hoped to be able to provide in February.
Assignment List
Attorney Gilbert advised the Board that he had provided Mr. Cherry an updated list of his pending legal assignments for the Board.
Pension Board Seat – City Council Representative
Attorney Gilbert informed the Board about a phone call from a member of the Knoxville City Council asking whether the City Council’s Pension Board seat currently held by Ms. Pelot was required to be filled by a sitting member of the city council. Attorney Gilbert advised the caller that it was his opinion that the seat did not have to be filled by a member of council but instead could be any person who was a resident of the city. Attorney Gilbert also informed the caller that he had briefed City Council’s attorney, Charles Swanson, on the matter late last year. Ms. Pelot advised the Board that she does not plan to resign her seat on the Board since her current term does not end until December 31, 2011.
ENROLLMENTS:
The following General Government employees have filed applications to become members of the Plan G1 pension system.
Jennifer E. Ball
Erin Burns
Roger Kelley
Nicholas A. Spine, III
Lori Urso
Motion: Mr. Hutchens made a motion to approve these applications for enrollment in the Plan G1 pension system. Mr. Hackney seconded the motion. The motion carried unanimously by the members present.
WITHDRAWALS:
The following employee has filed an application to withdraw his employee pension contributions plus 4% interest and the supplemental retirement account as applicable in Plan G Option 1.
Brian Claflin, Police Dept., Plan C – Non-vested
Motion: Mr. Coker made a motion to approve this application for withdrawal of employee contributions. Mr. Hackney seconded the motion. The motion carried unanimously by the members present.
Correction of benefit payment
Mr. Cherry advised the Board that due to a calculation error (the inclusion of sick leave service) in the service calculation of Mr. Kenneth B. Sutherland’s benefit that was approved by the Board in December 2009, the correct benefit amount should be $1,117.34 instead of $1,147.25.
Motion: Mr. York made a motion to reconsider the Board’s previous action in December of 2009 approving a pension for Mr. Kenneth B. Sutherland in the amount of $1,147.25. Mr. Hackney seconded the motion. The motion carried unanimously by the members present, whereupon the reconsidered motion was withdrawn without objection.
Motion: Mr. York made a motion that the Pension Board find that an error had been made in the initial calculation of Mr. Sutherland’s benefit award approved in December of 2009 in accordance with the Board’s authority and duty under City Charter § 1352.2, that the corrected benefit amount of $1,117.34 be approved for Mr. Kenneth B. Sutherland, and that any required adjustments be made accordingly. Mr. Hutchens 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 employees have 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.
Norman G. Hoskins, Police Dept. - Uniformed No Option
Date of birth, November 18, 1959: 50 years of age
Total credited service: 28 years 9 months 16 days
Average monthly salary for 2 highest 12 month periods, $4,998.16 x .025 =
$124.95 x 28.79384 =
$3,597.79 pension effective January 1, 2010.
DROP complete December 31, 2011.
Motion: Mr. Coker made a motion to approve this application for DROP retirement. Mr. Hackney seconded the motion. The motion carried unanimously by the members present.
Terry L. Loveday, Fire Dept. - Uniformed No Option
Date of birth, June 4, 1947: 62 years of age
Total credited service: 37 years 4 months 11 days
Average monthly salary for 2 highest 12 month periods, $5,132.83 x .025 =
$128.32 x 30 =
$3,849.60 pension effective January 1, 2010.
DROP complete December 31, 2011.
Motion: Mr. Coker made a motion to approve this application for DROP retirement. Mr. Hackney 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 G.
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.
Jean W. Davis-James, General Government – Plan G2 No Option
Date of birth, September 27, 1939: 70 years of age
Total credited service: 13 years 5 months
Average monthly salary for 2 highest 12 month periods, $2,960.84 x .021 =
$62.18 x 13.41667 =
$834.25 pension effective January 1, 2010.
DROP complete December 31, 2011.
Motion: Mr. Hutchens made a motion to approve this application for DROP retirement. Ms. Shelton seconded the motion. The motion carried unanimously by the members present.
APPROVAL OF INVOICES FOR PROFESSIONAL SERVICES: - Invoice copies in folder
Bryan, Pendleton, Swats & McAllister – Actuary (November 2009) $10,292.00
Kennerly,Montgomery & Finley – Attorney (General – Dec. 2009) 4,025.05
Kennerly,Montgomery & Finley – Attorney (G. Fields – Dec. 2009) 162.50
State Street – Trustee (Nov. 2009) 3,352.83
State Street – Custodial (Nov. 2009) 8,421.09
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 system’s financial plan.
Motion: Ms. Shelton made a motion to pay these invoices. Mr. Hackney seconded the motion. The motion carried unanimously by the members present.
INVESTMENT MATTERS: None
OTHER:
Personnel Committee Report – Exhibit 3
Mr. Coker reported to the Board on the Personnel Committee’s meetings in conjunction with Attorney Gilbert’s research regarding the Board’s salary and bonus policy for the staff employees.
Motion: Ms. Shelton made a motion to accept and approve a recommendation made to the Board by Mr. Cherry for a 5% increase in Nancy Curnutt’s salary retroactive to July 1, 2009. Mr. Hackney seconded the motion. The motion carried unanimously by the members present.
PUBLIC COMMENTS: None
ADJOURNMENT:
Motion: Mr. Hutchens made a motion to adjourn the meeting at 9:51 a.m. Ms. Shelton seconded the motion. The motion carried unanimously by the members present.
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Chair
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Date
M:\Board\minutes\2010\january.doc