CITY OF KNOXVILLE PENSION BOARD
MINUTES
THURSDAY – October 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 October 13, 2011.
Present were: Ms. Barbara Pelot, Mr. Jack Banks, 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: Mr. John Craig; Mr. Donald Sams - City of Knoxville Police Officer.
CALL TO ORDER:
Ms. Pelot presided and called the meeting to order at 8:17 a.m.
APPROVAL OF REGULAR MEETING MINUTES FOR September 8, 2011:
Mr. Martin made a motion to approve the September 8, 2011 meeting minutes. Mr. Hutchens seconded the motion. The motion carried unanimously by the members present.
APPROVAL OF REVISED AGENDA: - Exhibit 1
The Revised Agenda was accepted by the Pension Board without objection.
EXECUTIVE DIRECTOR COMMENTS:
Pension Board Representatives for the term 2012 -2014 – Exhibit 2
Mr. Cherry informed the Board about the upcoming election schedule for Pension Board, Seat A representatives, in both the General Government and Police Uniformed body divisions. Mr. Cherry advised the Board that both Jim Hutchens’ (General Government) and Greg Coker’s (Police – Uniformed) terms would end December 31, 2011.
Mr. Hutchens thanked the Board members for their service to the Board and employee members and for his opportunity to serve with the Board, and advised the Board that he did not intend to run for re-election of General Government - Seat A representative.
Mr. King arrived at 8:19 a.m.
Actuarial Summary – Exhibit 3
Mr. Cherry distributed to the Board an actuarial summary sheet prepared by the Board’s actuary, Alan Pennington, and reported that both Mr. Pennington and investment consultant, Mr. Dan Holmes planned to present to the Board a process for de-risking at the November 10, 2011 board meeting.
ADMINISTRATIVE MATTERS:
Donald Sams – request to establish prior service as creditable service
Attorney Gilbert advised Officer Sams and the Board that he was close to issuing an opinion on Officer Sams’ request and planned to discuss his findings and opinion at the November meeting.
ATTORNEY COMMENTS:
Wall Street Journal Article – Exhibit 4
Attorney Gilbert distributed to the Board, for their review, a Wall Street Journal article dated October 20, 2011 concerning Pension Fund actuarial assumption rates across the nation.
Derrell Frye Litigation – Exhibit 5
Attorney Gilbert updated the Board on the Derrell Frye litigation and noted that it appeared that the Board’s fiduciary insurance policy would provide a defense on the case and the insurance company is expected to confirm this in a coverage letter expected to be issued in the very near future.
G1 Discussion
Attorney Gilbert advised the Board that the ruling on the G1 Litigation from Chancellor Fansler was still pending with the court.
CONTRACTS:
State Street Contract
Mr. Cherry advised the Board that he would request a one year extension on the present contract with State Street.
ENROLLMENTS:
The following General Government employee has filed an application to become a member of the Plan G1 pension system.
Jonathan T. Westall
Motion: Mr. Martin made a motion to approve this application for enrollment in the Plan G1 pension system. Mr. King seconded the motion. The motion carried unanimously by the members present.
WITHDRAWALS:
The following employees have filed an application to withdraw employee pension contributions.
Christopher Lewis, General Govt. – Plan G1, non-vested
Aaron W. Mayes, General Govt. – Plan G1, non-vested
Emily Patterson, General Govt. – Plan G1, non-vested
Motion: Mr. King made a motion to approve these applications for withdrawal of employee contributions. Mr. Martin seconded the motion. The motion carried unanimously by the members present.
APPLICATION FOR EARLY RETIREMENT: PLAN A
CHARTER SECTION 1360.17
Brenda Summers, Schools Non-Certified Option A-7
50% with reinstatement
Date of birth, January 31, 1953: 58 years of age
Total credited service: 36 years (combined City and County)
Average base earnings for 3 years, $400.00 x .75% = $3.00
Average excess earnings for 3 years, $2,664.96 x 1.50% = $39.97
making a total of $42.97 benefit per year of service. $42.97 x 36 =
$1,546.92 x ER factor .6853 =
$1,060.10 Total benefit
755.40 minus County benefit = $304.70. Ms. Summers chose Option A-7 – 50% with reinstatement to Kenneth C. Summers, spouse. $304.70 x .9282 =
$282.82 pension effective August 1, 2010.
Christine Williams, Schools Certified No Option
Date of birth, January 9, 1952: 59 years of age
Total City credited service: 12 years
Total County credited service: 24 years 2 months
Total credited service: 36 years 2 months
Last date of employment with City: June 1987
Last date of employment with County: September 2011
Average excess earnings for 4 years, $400.00 x .75% = $3.00
Average excess earnings for 4 years, $1,286.72 x 1.50% = $19.30
making a total of $22.30 benefit per year of service. $22.30 x 12 =
$267.60 x ER factor .8250 =
$220.77 pension effective October 1, 2011.
Motion: Mr. Martin made a motion to approve this application for Early retirement payable. Mr. King seconded the motion. The motion passed unanimously by the members present.
APPLICATION FOR DEFERRED RETIREMENT: PLAN A
CHARTER SECTION 1360.28
Judith Arnold, Schools Certified No Option
Date of birth, September 15, 1949: 62 years of age
Total credited service: 14 years (city service only; last employed August 1986)
Average base earnings for 3 years, $400.00 x .75% = $3.00
Average excess earnings for 3 years, $1,143.22 x 1.50% = $17.15
making a total of $20.15 benefit per year of service. $20.15 x 14 =
$282.10 pension effective October 1, 2011
Motion: Mr. King made a motion to approve this application for Deferred retirement. Mr. Martin seconded the motion. The motion passed 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.
Jerry H. Campbell, General Government – Plan G2 No Option
Date of birth, October 13, 1947: 63 years of age
Total credited service: 39 years 3 months 3 days
Average monthly salary for 2 highest 12 month periods, $4,993.77 x .021 =
$104.87 x 39.25822 =
$4,117.01 pension effective October 1, 2011.
DROP complete September 30, 2013.
Motion: Mr. Martin made a motion to approve this application for Drop retirement. Mr. Hutchens seconded the motion. The motion passed unanimously by the members present.
John C. Ford, General Government – Plan G2 Option B-11
10 Yr. Certain & Life
Date of birth, September 27, 1956: 55 years of age
Total credited service: 33 years 7 months 21 days
Average monthly salary for 2 highest 12 month periods, $4,078.99 x .021 =
$85.66 x 33.64087 = $2,881.68. Mr. Ford chose Option B-11 – 10 Yr. Certain and Life to John C. Ford, III, Christian Anderson Ford and Megan Elizabeth Ford.
$2,881.68 x .98
$2,824.05 pension effective October 1, 2011.
DROP complete September 30, 2013.
Motion: Mr. Martin made a motion to approve this application for Drop retirement payable under Option B-11 – 10 Yr. Certain and Life. Mr. Hutchens seconded the motion. The motion passed unanimously by the members present.
Adrienne C. Walker, General Government – Plan G2 No Option
Date of birth, October 9, 1947: 63 years of age
Total credited service: 15 years 3 months 3 days
Average monthly salary for 2 highest 12 month periods, $3,757.22 x .021 =
$78.90 x 15.25822
$1,203.87 pension effective October 1, 2011.
DROP complete September 30, 2013.
Motion: Mr. Martin made a motion to approve this application for Drop retirement. Mr. Hutchens seconded the motion. The motion passed unanimously by the members present.
APPROVAL OF INVOICES FOR PROFESSIONAL SERVICES:
Bryan, Pendleton, Swats & McAllister – Actuary (August 2011) $ 18,612.00
Wimberly Lawson Wright Daves & Jones – Attorney (8/5/11) 423.00
State Street – Custodial (August 2011) 8,450.61
State Street – Trustee (August 2011) 3,403.99
Aberdeen – Money Manager (2nd Qtr. 2011) 13,258.01
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. Hutchens made a motion to pay the invoices as presented. Mr. Martin seconded the motion. The motion carried unanimously by the members present.
INVESTMENT MATTERS:
Neuberger Berman Crossroads 2010 Special Situations Fund
Mr. Cherry reviewed with the full Board its request to further confirm that Mr. Gilbert was comfortable with all legal aspects of the Subscription documents and with Mr. Holmes regarding this investment in the context of de-risking the portfolio. Mr. Gilbert indicated to the investment committee that he was comfortable with the Plan documents. Mr. Holmes indicated this investment was consistent with the investment policy adopted in December 2009 and, although not a part of de-risking the portfolio, would not in any way affect or delay the ability to de-risk the overall portfolio should the Board decide to do so. The investment subscription was completed by the September 30, 2011 deadline.
OTHER:
PUBLIC COMMENTS: None
ADJOURNMENT:
There being no further business, the following motion was made:
Motion: Mr. Martin made a motion to adjourn the meeting at 9:23 a.m. Mr. King seconded the motion. The motion carried unanimously by the members present.
Chair
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