CITY OF KNOXVILLE PENSION BOARD

MINUTES

OCTOBER 14, 2004

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, 917 E. 5th Avenue at 8:15 a.m. on October 14, 2004.

 

Present were:  Mayor Haslam, Mr. Scott Calloway, Ms. Brenda Hankins, Mr. Buddy Harrell, Mr. Christopher Kinney, Ms. Carol Mahler, Ms. Barbara Pelot, Attorney C.C. “Bud” Gilbert and Mr. Michael Cherry.

 

Also present:  Mr. Dan Holmes, Summit Strategies; Mr. Alan Pennington & Ms. Mandy Lee Bratten, Bryan, Pendleton, Swats & McAllister; Mr.  Scott Becker, Calamos Asset Management; Mr. John Power, Oechsle International Advisors.

 

CALL TO ORDER:

            Ms. Mahler presided and called the meeting to order at 8:20 a.m.

 

APPROVAL OF REGULAR MEETING MINUTES FOR September 9, 2004

            Motion:  Mr. Calloway made a motion to approve the September 9, 2004, meeting     

minutes.  Ms. Hankins seconded the motion.  The motion carried unanimously by the members present.

 

 

APPROVAL OF REVISED AGENDA:   Exhibit 1

 

            The Revised Agenda was adopted without objection.

 

CONTRACTS:  None

 

ADMINISTRATIVE MATTERS:

 

            Pension Board Representative Elections 

 

                        General Government – Seat B

 

For purposes of determining who would be eligible to hold Pension Board Representative, Seat B – General Government, which is up for re-election, Mr. Cherry asked for clarification from the Board as how to define departments, due to the reorganization of the City of Knoxville departments. The Pension Board instructed Mr. Gilbert to revise and to incorporate into their election rules language to indicate the departments were the nine major groupings as listed on the City of Knoxville Organization chart, which will attached to the rules. Since Buddy Harrell, an employee in the Community & Neighborhood Services Department, is the General Government -Seat A representative, the nominees for Seat B could not be employed in the Community & Neighborhood Services Department.

 

                        Education seat

 

Mr. Cherry reminded the Board that the current Education representative seat will expire December 31, 2004, since the number of active Board of Education employees is less than 250, per Section 1324 of the City Charter. Mr. Cherry also indicated the charter provisions provide for the remaining members to be represented by and eligible to vote for the General Government representative seats. The Pension Board instructed Mr. Gilbert to add language to the their election rules establishing the “Education Department” for purposes of the these elections. This would ensure that should an education employee be nominated and elected to one of the general government seats, a member of this “department” could not be nominated while the education employee occupies the other General Government seat. 

 

Fire Department Uniformed – Seat B  -   Exhibit 2

 

Mr. Cherry informed the Board that the nomination process was underway for the Fire Department Uniformed – Seat B, Pension Board representative seat for the three year term beginning January 1, 2005, and that the deadline to accept nominations was Thursday, October 21, 2004.

 

            A final Election Rules document will be presented to the Pension Board at their

           December meeting. A copy of the rules is on file at the pension office.

 

            COLA Costs for Education employees   -  Exhibit 3

 

Mr. Cherry presented to the Board, for their review, a cost analysis prepared by Alan Pennington, on the Simple versus Compounded Cost of Living Adjustment (COLA) for the Education employees, requested by the Board at the September 9, 2004 Board Meeting.  Per the charter provision, the present calculation for the COLAs would expire on January 15, 2007, unless the expiration language is removed from the charter. .

 

Mayor Haslam arrived at 8:37 a.m. and presided.

           

Plan G transfer to Plan C – Policy Recommendations  - Exhibit 4

 

Attorney Gilbert distributed to the Board an amended policy statement for employee transfers from General Government to Fire/Police Plan C.  Mr. Cherry reviewed with the Board, the details of the policy statement. A final draft of the policy will be presented to the Board at their December meeting. A copy of the final policy is on file in the pension office.

 

Motion:  Ms. Pelot made a motion to adopt the amended Policy Statement for transfers from General Government to Fire/Police Plan C.  Mr. Kinney seconded the motion.  The motion carried unanimously by the members present.

 

            Annual Financial Allocation Report  - Exhibit 5

 

            Mr. Cherry presented to the Board a financial report showing the allocation of revenue

           and expenses for the three sections of the pension system. He also provided to the

           Board the unaudited basic financial statements for fiscal year 2003-2004.

 

EXECUTIVE DIRECTOR COMMENTS: None

 

ATTORNEY COMMENTS:  None

 

ENROLLMENTS:

 

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

 

Miguel Bourne

Scott L. Brenneman

                        Lisa Foutz

Phillip Moore

Tony Spoon

Charles D. Ward      

 

Motion:  Ms. Mahler made a motion to approve these applications for enrollment in the Plan G1 pension system.  Mr. Calloway 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.

 

James D. Arwood, General Government, G1 - Vested

Jason Chadwell, General Government, G1 – Vested

Bobby Corby, General Government, G1 – Non-vested

Alan Dunlap, General Government, G1 – Non-vested

                        Peter M. Hammer, Police Department, Plan C – Non-vested

                        Dexter Brian Henderson, Police Department, Plan C - Vested

Travis Kincaid, Fire Department, Plan C – Vested

Phillip R. McClain, Police Department, Plan C – Vested

Tony R. Ogle, General Government, G2 - Vested

Shane Powell, General Government, G1 – Non-vested

Steven M. Simpson, General Government, G1 – Vested

 

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

 

APPEALS:

 

RETIREMENTS:

 

APPLICATION FOR DISABILITY NOT IN LINE OF DUTY RETIREMENT:  PLAN A 

CHARTER SECTION 1360.20  

 

          Nancy R. Pressley, Schools – Certified                             No Option

            Date of birth, January 29, 1953:  51 years of age*

            *(computed as if 62 years of age)

            Total City credited service:  11 years 6 months

            Total County credited service:  16 years 6 months

            Total credited service:  28 years

            Last date of employment with City:  June 1987

            Last date of employment with County:  December 2003

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

            Average excess earnings for 4 years, $1,054.60 x 1.50% = $15.82

            Making a total of $18.82 x 11.5000 =

            $216.43 pension effective October 1, 2004.

 

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 $1,401.68.

 

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

 

Motion:  Mr. Kinney made a motion to approve this application for Disability Not in Line of Duty retirement based on the recommendation of Dr. Michael Pool.  Ms. Hankins seconded the motion.  The motion carried unanimously by the members present.

 

APPLICATION FOR INJURY IN LINE OF DUTY:  PLAN C   

CHARTER SECTION 1390.11

 

            David M. McCoig, Police Department – Uniformed         No Option

Date of birth, August 8, 1958:  46 years of age

            Total credited service:  17 years 11 months

            Average monthly salary fro 2 highest – 12 month periods, $3,669.76 x 50% =

            $1,834.88 pension effective November 1, 2004.

 

Motion:  Mr. Calloway made a motion to approve this application for an Injury In Line of Duty Retirement, to be reviewed in two years, based on the medical evidence presented.  Ms. Pelot seconded the motion.  The motion carried unanimously by the members present.

 

APPLICATIONS FOR EARLY RETIREMENT:  PLAN A

CHARTER SECTION 1360.17

 

            Jerry A. Bush, Schools Certified                                         No Option

            Date of birth, September 26, 1949:  55 years of age

            Total City credited service:  15 years 6 months

            Total County credited service:  17 years 3 months

            Total credited service:  32 years 9 months

            Last date of employment with City:  June 1987

            Last date of employment with County:  September 2004

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

            Average excess earnings for 4 years, $1,617.29 x 1.50% = $24.26

            making a total of $27.26 benefit per year of service.  $27.26 x 15.50000 =

            $422.53 x ER factor.5245 =

            $221.62 pension effective October 1, 2004.

 

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 $1,474.34.

 

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

 

Motion:  Ms. Hankins made a motion to approve this application for Early retirement for the City portion.  Mr. Kinney seconded the motion.  The motion carried unanimously by the members present.

 

Clyde Layman, Schools Certified                                       A-8

                                                                                                75% with reinstatement

            Date of birth, December 7, 1942:  61 years of age

            Total City credited service:  20 years

            Total County credited service:  17 years

            Total credited service:  37 years

            Last date of employment with City:  June 1987

            Last date of employment with County:  September 2004

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

            Average excess earnings for 4 years, $1,378.12 x 1.50% = $20.67

            making a total of $23.67 benefit per year of service.  $23.67 x 20 =

$473.40.  Mr. Layman chose Option A-8 – 75% with reinstatement to Juretta Sue Layman, spouse.  $473.40 x .8445 =

            $399.79 pension effective October 1, 2004.

 

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 $1,766.36.

 

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

 

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

 

Sara P. Shanklin, Schools Certified                                               No Option

            Date of birth, March 19, 1943:  61 years of age

            Total City credited service:  10 years 3 months

            Total County credited service:  17 years

            Total credited service:  27 years 3 months

            Last date of employment with City:  June 1987

            Last date of employment with County:  May 2004

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

            Average excess earnings for 4 years, $515.08 x 1.50% = $7.73

            making a total of $10.73 benefit per year of service.  $10.73 x 10.2500 =

            $109.98 pension effective October 1, 2004.

 

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 $1,349.42.

 

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

 

Motion:  Ms. Hankins made a motion to approve this application for Early retirement for the City portion.  Mr. Kinney seconded the motion.  The motion carried unanimously by the members present.

 

APPLICATION FOR PARTICIPATION IN THE DELALYED 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.

 

            Curtis Glenn Romines, Fire Department                            Option A-6

                                                                                                            100% without reinstatement

            Date of birth, September 6, 1954:  50 years of age

            Total credited service:  31 years 7 months

            Average monthly salary for 2 highest 12 month periods, $3,452.65 x 2,5% =

$86.32 x 30 = $2,589.60.  Mr. Romines chose Option A-6 – 100% without reinstatement to Kimberly Loveday Romines, spouse.  $2,589.60 x .9298 =

            $2,407.81 pension effective October 1, 2004.

            DROP complete September 30, 2006.

 

Motion:  Ms. Mahler made a motion to approve this application for DROP retirement payable Under Option A-6.  Mr. Calloway seconded the motion.  The motion carried unanimously by the members present.

 

 

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

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 M. Flynn, General Government                             Option A-4

                                                                                                            50% without reinstatement

            Date of birth, April 13, 1937:  67 years of age

            Total credited service:  29 years 4 months

            Average monthly salary for 2 highest 12 month periods, $4,375.57 x 2.1% =

$91.89 x 29.33333 = $2,695.44.  Mr. Flynn chose Option A-4 – 50% without reinstatement to Pauline J. Flynn, spouse.  $2,695.44 x .8901 =

            $2,399.21 pension effective October 1, 2004.

            DROP complete September 30, 2006.

 

Motion:  Mr. Mahler made a motion to approve this application for DROP retirement payable Under Option A-4.  Ms. Pelot seconded the motion.  The motion carried unanimously by the members present.

 

            David C. Perry, General Government                                 Option A-4

                                                                                                            50% without reinstatement

            Date of birth, August 1, 1951:  53 years of age

            Total credited service:  34 years

            Average monthly salary for 2 highest 12 month periods, $3,214.78 x 2.1% =

$67.51 x 34 = $2,295.34.  Mr. Perry chose Option A-4 – 50% without reinstatement to Wanda S. Perry, spouse.  $2,295.34 x .9407 =

            $2,159.23 pension effective October 1, 2004.

            DROP complete September 30, 2006.

 

Motion:  Ms. Mahler made a motion to approve this application for DROP retirement payable Under Option A-4.  Ms. Pelot seconded the motion.  The motion carried unanimously by the members present.

 

            Jewel J. Taylor, General Government                                 No Option                                           Date of birth, December 17, 1945:   58 years of age

            Total credited service:  22 years 8 months

            Average monthly salary for 2 highest 12 month periods, $2,840.44 x 2.1% =

            $59.65 x 22.66667 =

            $1,352.07 pension effective October 1, 2004.

            DROP complete September 30, 2006

 

Motion:  Ms. Mahler made a motion to approve this application for DROP retirement.  Ms. Pelot seconded the motion.  The motion carried unanimously by the members present.

 

APPLICATION FOR LEAVE OF ABSENCE FOR MILITARY SERVICE:  CHARTER SECTION 1390.20(B)     

 

          George B. King, General Government:      August 28, 2004 – February 2, 2006

Victor Rodgers, Fire Department – Uniformed:  October 20, 2004 – May 8, 2006

 

Motion:  Mr. Harrell made a motion to approve these applications for leave of absence for military service.  Mr. Calloway seconded the motion.  The motion carried unanimously by the members present.

 

APPROVAL OF INVOICES FOR PROFESSIONAL SERVICES:    

           

Bryan, Pendleton, Swats & McAllister – Actuary (August)           15,053.00                              Kennerly, Montgomery & Finley – Attorney (August)                1,095.00

Kennerly, Montgomery & Finley – Attorney (September)   1,440.00

State Street – Trustee (August 2004)                                               3,520.02                              

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:

 

            Dan Holmes – Summit Strategies

 

Mr. Holmes made a presentation to the Board and gave a preliminary performance report on the quarter ended September 30, 2004.  Copies of Mr. Holmes report are on file in the Pension Office.

 

After a brief recess, the following presentations were made:

 

Mayor Haslam left the meeting at 10:05 a.m. and Ms. Mahler presided.

 

Oechsle International Advisors 

           

Mr. John Power of Oechsle International Advisors made a presentation and distributed a written report.  A copy of the report is on file in the Pension Office.

                       

            Calamos Asset Management

 

Mr.  Scott Becker of Calamos Asset Management made a presentation and distributed a written report.  A copy of the report is on file in the Pension Office.

 

OTHER:

 

            Actuary Presentation

 

Alan Pennington – Bryan, Pendleton, Swats &McAllister presented the actuarial valuation as of July 1, 2004.  A copy of the presentation and the actuarial report is on file in the pension office.

 

PUBLIC COMMENTS:  None

 

ADJOURNMENT:

 

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

 

Motion:  Ms. Hankins made a motion to adjourn the meeting at 11:50 a.m.  Mr. Calloway seconded the motion.  The motion carried unanimously by the members present.

 

 

 

 

 

                                                                                    ____________________________

                                                                                    Chair

 

 

                                                                                    ____________________________

                                                                                    Date

 

 

M:\Board\minutes\2004\october.doc