CITY OF KNOXVILLE PENSION BOARD
MINUTES
Thursday – January 13, 2011
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 13, 2011.
Present were: Ms. Barbara Pelot, Mr. Jack Banks, Mr. Greg Coker, Mr. Jim Hutchens, Mr. Stephen King, Mr. Larry Martin, Mr. Jim York, Mr. Michael Cherry and Attorney Bud Gilbert. Mr. Martin attended as Mayor Brown’s designated representative as authorized by T.C.A. § 6-54-112 and the mayor’s letter of designation dated January 12, 2011.
Also present: Former Board Member and Fire Department employee - Mr. Joe Hackney; Former Board Member and General Government employee – Ms. Robin Shelton; Mr. Brent Johnson, General Government employee.
CALL TO ORDER:
Ms. Pelot presided and called the meeting to order at 8:15 a.m.
ELECTION OF OFFICERS – CHAIR, VICE-CHAIR & SECRETARY FOR 2011
Motion: Mr. King nominated Ms. Pelot as Chair of the Pension Board and then moved that nominations cease and she be elected by acclamation. Mr. Martin seconded the motion. The motion carried unanimously with Ms. Pelot abstaining on the vote.
Motion: Mr. York nominated Mr. Coker as Vice-Chair of the Pension Board and then moved that nominations cease and he be elected by acclamation. Mr. Hutchens seconded the motion. The motion carried unanimously with Mr. Coker abstaining on the vote.
Motion: Mr. Martin nominated Mr. York as Secretary of the Pension Board and then moved that nominations cease and he be elected by acclamation. Mr. Hutchens seconded the motion. The motion carried unanimously with Mr. York abstaining on the vote.
APPROVAL OF REGULAR MEETING MINUTES FOR December 9, 2010:
Mr. Hutchens made a motion to approve the December 9, 2010, meeting minutes. Mr. Martin seconded the motion. The motion carried unanimously by the members present.
APPROVAL OF REVISED AGENDA: - Exhibit 1
The Revised Agenda was approved without objection.
OTHER:
RECOGNITION OF MR. JOE HACKNEY AND MS. ROBIN SHELTON FOR THEIR SERVICE ON THE PENSION BOARD:
Ms. Pelot presented Mr. Hackney and Ms. Shelton with plaques in appreciation of their service on the Pension Board.
Mr. Coker left the meeting at 8:46 a.m.
EXECUTIVE DIRECTOR COMMENTS:
General Government Seat B Election
Mr. Cherry advised the Board that Mr. Stephen King had been certified as elected, for the General Government – Seat B representative for the three year term beginning January 1, 2011 through December 31, 2013.
CONTRACTS:
Mr. Cherry informed the Board that the contract with Real Assets Manager, Aether Investment Partners, had been completed as well as the first funding requirement.
In addition, Mr. Cherry advised that there had already been a distribution with a follow-up call for that same amount.
ADMINISTRATIVE MATTERS:
Scheduling Conflict – Stephen King
Motion: Mr. King made a motion to reschedule the February and May Pension Board meetings from Thursday, February 10, 2011 to Friday, February 11, 2011 – 8:15 a.m. and from Thursday, May 12, 2011 to Friday, May 13, 2011 – 8:15 a.m. Mr. Hutchens seconded the motion. The motion carried unanimously by the members present.
ATTORNEY COMMENTS:
2012 Suggested Charter Amendments – Exhibit 2
Attorney Gilbert distributed to and discussed with the Board a 2012 Suggested Charter Amendment listing for the 2012 referendum.
Mayor Elect Brown
Motion: Mr. Hutchens made a motion to congratulate newly elected Mayor, Daniel T. Brown, and invite him to the Pension Board meetings. Mr. King seconded the motion. The motion carried unanimously by the members present.
Pension Study Task Force
Mr. Martin updated the Board about the Pension Study Task Force, to be formed, which was initially discussed at the December 2010 Pension Board meeting. Mr. Martin advised the need for the Board to elect a Pension Board member to serve on the Task Force. Mr. York requested the election of a representative to the Task Force be deferred to the February meeting so that Mr. Coker could be in attendance.
Litigation Matters
Glenda Fields
Attorney Gilbert noted to the Board the agenda item regarding the Glenda Fields’ settled disability award and advised that no further action was required by the Board.
Stone Energy
Attorney Gilbert updated the Board about the Stone Energy Litigation, a class action suit regarding securities malfeasance that is now in the claims filing stage.
G1 Discussion
Attorney Gilbert updated the Board on the pending G1 employees’ litigation and noted that the City Law Department had withdrawn from the representation of the City of Knoxville’s interests on the case and had been replaced by Attorney Robert Watson.
WITHDRAWALS:
The following employees have filed an application to withdraw employee pension contributions plus 4% interest and the supplemental retirement account as applicable in Plan G Option 1.
James H. Boyd, III, Fire Dept. – Plan C, Non-vested
James K. Ray, General Govt. – Plan G2, Vested
Eric Roddy, Fire Dept. – Plan C, Non-vested
Motion: Mr. Hutchens made a motion to approve these applications for withdrawal of employee contributions. Mr. King seconded the motion. The motion carried unanimously by the members present.
APPLICATION FOR NORMAL RETIREMENT: PLAN G1
CHARTER SECTION 1360.12
Mickey P. Mallonee, General Govt. Option C
Cash Refund
Date of birth, February 8, 1942: 68 years of age
Total credited service: 10 years 11 months 29 days
Average monthly salary for 2 highest 12 month periods, $6,845.01 x .0135 =
$92.41 x 10.99612 = $1,016.15. Ms. Mallonee chose Option C – Cash Refund to Lisa Marie Foley and Mason Wade Foley. $1,016.15 x .9027 =
$917.28 pension (defined benefit) effective January 1, 2011.
Ms. Mallonee chose to receive a one time lump sum payment of the supplemental retirement account applicable in Plan G1.
Motion: Mr. King made a motion to approve this application for Normal retirement payable under Option C. Mr. York seconded the motion. The motion carried unanimously by the members present.
APPLICATION FOR NORMAL RETIREMENT: PLAN A
CHARTER SECTION 1360.12
Rebecca Cordell, Schools Certified No Option
Date of birth, October 5, 1948: 62 years of age
Total City credited service: 9 years 6 months
Total County credited service: 23 years 6 months
Total credited service: 33 years
Last date of employment with City: June 1987
Last date of employment with County: December 2010
Average base earnings for 4 years, $400.00 x 75% = $3.00
Average excess earnings for 4 years, $1,203.90 x 1.50% = $18.06
making a total of $21.06 benefit per year of service. $21.06 x 9.50 =
$200.07 pension effective January 1, 2011
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 $1,968.78.
Motion: Mr. York made a motion to approve this application for Normal retirement. Mr. King seconded the motion. The motion carried unanimously by the members present.
APPLICATION FOR EARLY RETIREMENT: PLAN A
CHARTER SECTION 1360.17
Allan Jones, Schools Certified Option A-6
100% without reinstatement
Date of birth, October 1, 1950: 60 years of age
Total City credited service: 15 years
Total County credited service: 23 years 6 months
Total credited service: 38 years 6 months
Last date of employment with City: June 1987
Last date of employment with County: December 2010
Average base earnings for 4 years, $400.00 x 75% = $3.00
Average excess earnings for 4 years, $1,654.95 x 1.50% = $24.82
making a total of $27.82 benefit per year of service. $27.82 x 15 =
$417.30 x ER Factor .8250 = $344.27. Mr. Jones chose Option A-6 – 100% without reinstatement to Sherry V. Jones, spouse. $344.27 x .8573 =
$295.14 pension effective January 1, 2011
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 $2,648.39.
25 years required for Early retirement. Supreme Court ruling entitles retiree to combine City and County credited service.
Motion: Mr. Martin made a motion to approve this application for Early retirement payable under Option A-6. Mr. Hutchens seconded the motion. The motion carried unanimously by the members present.
APPLICATION FOR INJURY IN LINE OF DUTY: PLAN C – See Folder
CHARTER SECTION 1390.11
Chyrl M. Spitzer, Police Dept. – Uniformed No Option
Date of birth, December 14, 1974: 35 years of age
Total credited service: 10 years 4 months 19 days
$1,728.81 pension effective (to be determined).
Motion: Mr. York made a motion to defer this application for Injury In Line of Duty retirement to the February meeting in order to obtain additional information. Mr. King seconded the motion. The motion carried unanimously by the members present.
No Action Required – Approved in December 2010 Glenda Fields, Police Dept. – Uniformed No Option
Date of birth, November 10, 1952: 58 years of age
Total credited service: 21 years 1 month
$1,733.11 pension effective February 1, 2005
Originally approved as Not In Line - $1,455.81.
APPLICATION FOR INJURY IN LINE OF DUTY: PLAN G1 – See Folder
CHARTER SECTION 1360.22
Kimberly S. Price, General Govt. No Option
Date of birth, May 4, 1975: 35 years of age*
Total credited service: 2 years 10 months 30 days actual service**
*computed as if 62 years of age
**computed as if worked until age 62 (30 years 11 months 28 days)
$871.41 pension effective December 1, 2010.
(includes supplemental retirement account applicable in Plan G1, as an additional monthly annuity)
Motion: Mr. York made a motion to defer this application for Injury In Line of Duty retirement to the February meeting in order to obtain additional information. Mr. Martin 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.
William F. Baty, Fire Dept. - Uniformed Option A-9
100% with reinstatement
Date of birth, February 3, 1949: 61 years of age
Total credited service: 37 years 2 months 24 days
Average monthly salary for 2 highest 12 month periods, $4,935.37 x .025 =
$123.38 x 30 = $3,701.40. Mr. Baty chose Option A-9 – 100% with reinstatement to Jaymi Lynn Wingeier Baty, spouse. $3,701.40 x .8602 =
$3,183.94 pension effective January 1, 2011.
DROP complete December 31, 2012.
Motion: Mr. Martin made a motion to approve this application for DROP retirement payable under Option A-9. Mr. Hutchens seconded the motion. The motion carried unanimously by the members present.
Stephen E. Clabough, Fire Dept. - Uniformed Option A-4
50% without reinstatement
Date of birth, November 24, 1950: 60 years of age
Total credited service: 38 years 4 months 11 days
Average monthly salary for 2 highest 12 month periods, $5,189.80 x .025 =
$129.75 x 30 = $3,892.50. Mr. Clabough chose Option A-4 – 50% without reinstatement to Connie N. Clabough, spouse. There is no reduction for A-4 – 50% Joint & Survivor option to a spouse in Plan C.
$3,892.50 pension effective January 1, 2011.
DROP complete December 31, 2012.
Motion: Mr. Martin made a motion to approve this application for DROP retirement payable under Option A-4. Mr. Hutchens seconded the motion. The motion carried unanimously by the members present.
Larry E. Davis, Fire Dept. - Uniformed Option A-6
100% without reinstatement
Date of birth, November 5, 1946: 64 years of age
Total credited service: 38 years 9 months 26 days
Average monthly salary for 2 highest 12 month periods, $4,355.61 x .025 =
$108.89 x 30 = $3,266.70. Mr. Davis chose Option A-6 – 100% without reinstatement to Rena S. Davis, spouse. $3,266.70 x .8884 =
$2,902.14 pension effective January 1, 2011.
DROP complete December 31, 2012.
Motion: Mr. Martin made a motion to approve this application for DROP retirement payable under Option A-6. Mr. Hutchens seconded the motion. The motion carried unanimously by the members present.
John A. Nicely, Fire Dept. - Uniformed Option A-4
50% without reinstatement
Date of birth, January 7, 1943: 67 years of age
Total credited service: 44 years
Average monthly salary for 2 highest 12 month periods, $5,588.67 x .025 =
$139.72 x 30 = $4,191.60. Mr. Nicely chose Option A-4 – 50% without reinstatement to Susie S. Nicely, spouse. There is no reduction for A-4 – 50% Joint & Survivor option to a spouse in Plan C.
$4,191.60 pension effective January 1, 2011.
DROP complete December 31, 2012.
Motion: Mr. Martin made a motion to approve this application for DROP retirement payable under Option A-4. Mr. Hutchens seconded the motion. The motion carried unanimously by the members present.
Russell Gene Sasscer, Police Dept. - Uniformed Option A-6
100% without reinstatement
Date of birth, July 28, 1955: 55 years of age
Total credited service: 31 years 1 month 19 days
Average monthly salary for 2 highest 12 month periods, $5,815.32 x .025 =
$145.38 x 30 = $4,361.40. Mr. Sasscer chose Option A-6 – 100% without reinstatement to Debra Ann Sasscer, spouse. $4,361.40 x .9222 =
$4,022.08 pension effective January 1, 2011.
DROP complete December 31, 2012.
Motion: Mr. Martin made a motion to approve this application for DROP retirement payable under Option A-6. Mr. Hutchens seconded the motion. The motion carried unanimously by the members present.
Robert E. Stallings, Fire Dept. - Uniformed Option A-5
75% without reinstatement
Date of birth, February 15, 1951: 59 years of age
Total credited service: 37 years 2 months 14 days
Average monthly salary for 2 highest 12 month periods, $4,878.50 x .025 =
$121.96 x 30 = $3,658.80. Mr. Stallings chose Option A-5 – 75% without reinstatement to Susan R. Stallings, spouse. $3,658.80 x .9405 =
$3,441.10 pension effective January 1, 2011.
DROP complete December 31, 2012.
Motion: Mr. Martin made a motion to approve this application for DROP retirement payable under Option A-5. 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 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.
Doris J. Martin, General Government – Plan G2 No Option
Date of birth, March 16, 1945: 65 years of age
Total credited service: 20 years 5 months 2 days
Average monthly salary for 2 highest 12 month periods, $5,786.05 x .021 =
$121.51 x 20.42215 =
$2,481.50 pension effective January 1, 2011.
DROP complete December 31, 2012.
Motion: Mr. Martin made a motion to approve this application for DROP retirement. Mr. King seconded the motion. The motion carried unanimously by the members present.
Correction of Benefit
No Action Required – Drop Application Approved in December 2010 Robert H. Polk, General Govt.
Total credited service: 13 years 5 months 1 day (approved in December)
Should be: 13 years 8 months 1 day (additional 3 months service for sick
leave)
$1,743.22 pension approved in December
$1,776.06 corrected pension amount with sick leave service
APPROVAL OF INVOICES FOR PROFESSIONAL SERVICES:
Bryan, Pendleton, Swats & McAllister – Actuary (Nov 2010) $10,472.00
Kennerly, Montgomery & Finley – Attorney (Stone Energy - Dec 2010) 740.00
Summit Strategies – Investment Consultant (4th Qtr – 2010) 31,250.00
State Street – Trustee (Nov – 2010) 3,426.96
State Street – Custodial (September – 2010) 8,662.84
State Street – Custodial (October – 2010) 8,398.32
State Street – Custodial (November – 2010) 8,544.33
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: Mr. Martin made a motion to pay these invoices. Mr. Hutchens seconded the motion. The motion carried unanimously by the members present.
INVESTMENT MATTERS:
Investment Committee Minutes
Mr. Cherry informed the full Board of the four Fixed Income Manager presentations given to the Investment Committee yesterday.
Motion: Mr. Hutchens made a motion based upon the recommendation of the Investment Committee and Summit Strategies, to retain J.P. Morgan Asset Management to manage the Core Fixed Income portfolio for the pension system
subject to the review and recommendation of an investment management contract by Mr. Gilbert, and to authorize Mr. Cherry to sign such contract and proceed with all action necessary or convenient to properly effect this investment manager appointment and implement the investment management agreement, including without limitation the funding of the account upon advice and consultation with Dan Holmes of Summit Strategies. Mr. King seconded the motion. The motion passed unanimously by the members present.
Elect Investment Committee Member
Motion: Mr. Hutchens made a motion to elect Mr. King as a replacement for Ms. Shelton, to the Investment Committee. Mr. Martin seconded the motion. The motion carried unanimously by the members present.
4th Qtr 2010 Preliminary Flash Report
Mr. Holmes gave to the Board a report of the 4th Qtr 2010 Preliminary Flash Report.
Copies of his report are on file in the Pension Office.
OTHER: None
PUBLIC COMMENTS: None
ADJOURNMENT:
Motion: Mr. Martin made a motion to adjourn the meeting at 10:24 a.m. Mr. York seconded the motion. The motion carried unanimously by the members present.
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Chair
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Date
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