CITY OF KNOXVILLE PENSION BOARD
MINUTES
Thursday – November 8, 2007
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 November 8, 2007.
Present were: Mayor Bill Haslam, Mr. Scott Calloway, Mr. Buddy Harrell, Mr. Stephen King, Mr. Larry Martin, Ms. Barbara Pelot, Mr. Michael Cherry and Attorney Bud Gilbert.
Also present: Mr. Alan Pennington and Ms. Mandy Lee Bratton with Bryan, Pendleton, Swats & McAllister; Mr. Dan Holmes, Summit Strategies; Mr. Mike Lammers and Mr. Tom Digeman with UBS Global Asset Management; Mr. Chip George and Mr. Tim Brosnan with RREEF.
CALL TO ORDER:
Scott Calloway presided and called the meeting to order at 8:25 a.m.
APPROVAL OF REGULAR MEETING MINUTES FOR October 11, 2007:
Mr. Martin made a motion to approve the October 11, 2007, meeting minutes. Mr. King 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:
Elections – Exhibit 2
Mr. Cherry informed the Board about the elections underway for Pension Board, Seat B representatives, in both the General Government and Fire Uniformed body divisions. Mr. Cherry advised the Board that both Stephen King’s (General Government) and Scott Calloway’s (Fire – Uniformed) terms would end December 31, 2007.
Mr. Cherry advised the Board that two nominations, Mr. Scott Calloway and Mr. Joe Hackney, from the Fire Department had been received and certified by the staff, and ballots had been mailed to all active employees in the Fire Department.
In the General Government section, Mr. Cherry advised the Board of three nominations received, Mr. Barry Austin, Mr. Stephen King and Ms. Robin Shelton. Mr. Cherry sought direction from the Board and Attorney Gilbert regarding the certification of Mr. King’s nomination, since due to a reorganization of city departments, Mr. King and Mr. Harrell are now in the same department, but different divisions, which may not be allowable under City Charter Section 1324.
Mayor Haslam arrived at 9:03 a.m. and presided.
Attorney Gilbert distributed to the Board a copy of the Pension Board rules for election of board members. The Board asked Attorney Gilbert to research the matter and called a recess at the end of the meeting. The continued meeting was scheduled for Tuesday, November 13, 2007 at 8:15 a.m. Attorney Gilbert advised Mr. Cherry to notify the other two nominees and invite them to the November 13th meeting.
Actuary Presentation
Alan Pennington – Bryan, Pendleton, Swats & McAllister presented the actuarial valuation as of July 1, 2007. Mr. Pennington asked the Board for direction on making three changes in the methodology for the annual valuation: 1) the actuarial method used, 2) a one time recognition of liability losses that occurred for the year ending June 30, 2007, and 3) a change in the asset smoothing period from 5 years to 10 years, effective 7/1/2008. These changes are expected to result in less volatility from year to year for the required employer contributions. The Board directed Mr. Pennington to incorporate the use of the entry age normal actuarial method and the one-time recognition of the 2006-2007 liability losses into a revised actuarial valuation for the Board’s consideration at the December meeting. Mr. Pennington agreed to come back and give a report to the Board in December. A copy of the report is on file in the Pension Office.
Schedule Pension Board Meetings for First Quarter 2008
Thursday, January 10, 2008 – 8:15 a.m.
Thursday, February 14, 2008 – 8:15 a.m.
Thursday, March 13, 2008 – 8:15 a.m.
Then Pension Board meeting schedule was accepted without objection.
EXECUTIVE DIRECTOR COMMENTS:
Financial Statements
Mr. Cherry noted to the Board in the FYI file, a Balance Sheet and Income Statement for the Pension System, for the fiscal year ended June 30, 2007. Mr. Cherry advised the Board that he expected the auditors to begin the audit work soon.
ATTORNEY COMMENTS:
Glenda Field’s Litigation
Attorney Gilbert advised the Board that his firm had entered an agreed order with Ms. Field’s attorney, Tony Farmer and the matter would probably be reheard by the Pension Board in January.
ENROLLMENTS:
The following General Government employees have filed applications to become members of the Plan G1 pension system.
Kristopher M. Bostic
Randall S. Clowers
Tiffiny L. Copley
Cynthia Ellison
Robert A. Finley
Lauren Geddings
Larry Graham
Melissa Johnson
Sean R. Kerr
Frankie L. Rush
Gwendolyn R. Winfrey
Motion: Ms. Pelot 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 employee(s) have filed applications to withdraw employee pension contributions plus 4% interest and the supplemental retirement account as applicable in Plan G Option 1.
David L. Arnold, General Government, G1 – Non-vested
Christopher Caserto, Police Dept. – Plan C – Non-vested
Scott M. Pugliese, Police Dept. – Plan C – Non-vested
Motion: Ms. Pelot made a motion to approve these applications for withdrawal of employee contributions. Mr. Harrell seconded the motion. The motion carried unanimously by the members present.
PLAN B - DEPENDENT CHILD BENEFIT – Exhibit 3
CHARTER SECTION 1333
John Richard Breeden, dependent child of deceased, former General Government –Plan B, employee, James R. Conard.
Employee name: James R. Conard
Date of retirement: November 1, 1991
Date of death: October 30, 1999
Years of service: 25
$75.00 per month effective November 1, 1999.
Motion: Mr. Harrell made a motion to approve the Plan B, dependent child benefit. Mr. Calloway seconded the motion. The motion carried unanimously by the members present.
DISABILITIES
APPLICATION FOR INJURY IN LINE OF DUTY: PLAN G2 – Exhibit 4
CHARTER SECTION 1360.22
Michael R. Glover, General Government Option A-9
100% with reinstatement
Date of birth, March 28, 1963: 44 years of age*
Total credited service: 20 years 7 months 7 days**
*Computed as if 62 years of age
**Computed as if worked until 62 (38 years 5 months 9 days)
Average monthly salary for 2 highest 12 month periods, $2,788.21 x .021 =
$58.55 x 38.44132 = $2,250.74. Mr. Glover chose Option A-9 – 100% with reinstatement to Alyson Walker Glover, spouse. $2,250.74 x .9257 =
$2,083.51 pension effective June 1, 2007.
Motion: Mr. Harrell made a motion to approve this application for an In Line of Duty Disability based on Dr. Embry’s medical report and Mr. Cherry’s Disability Recommendation Report, to be reviewed in two years. Mr. Calloway seconded the motion. The motion carried unanimously by the members present.
APPLICATION FOR INJURY NOT IN LINE OF DUTY: PLAN G2 – Exhibit 5
CHARTER SECTION 1360.20
France L. Looney, General Government No Option
Date of birth, September 27, 1954: 53 years of age*
*Computed as if 62 years of age
Total credited service: 15 years 2 months 22 days
Average monthly salary for 2 highest 12 month periods, $2,011.08 x .021 =
$42.23 x 15.22694 =
$643.03 pension effective November 1, 2007.
Motion: Mr. Harrell made a motion to approve this application for a Not In Line of Duty Disability based on Dr. Pool’s medical report and Mr. Cherry’s Disability Recommendation Report (with no future review). Ms. Pelot seconded the motion. The motion carried unanimously by the members present.
APPLICATION FOR NORMAL RETIREMENT: PLAN C
CHARTER SECTION 1390.6
John O. Pickens, Fire Department Uniformed Option A-4
50% without reinstatement
Date of birth, September 16, 1947: 60 years of age
Total credited service: 30 years 2 months 24 days
Average monthly salary for 2 highest 12 month periods, $3,872.46 x 2.5% =
$96.81 x 30 = $2,904.30. Mr. Pickens chose Option A -4 – 50% without reinstatement to Deborah A. Pickens.
$2,904.30 pension effective November 1, 2007.
(No reduction for 50% option when spouse is beneficiary in Plan C)
Motion: Mr. Calloway made a motion to approve this application for Normal retirement. Ms. Pelot seconded the motion. The motion carried unanimously by the members present.
APPLICATION FOR RETIREMENT: PLAN G1 – NORMAL
CHARTER SECTION 1360.12
Carol A. Scott, General Government No Option
Date of birth, June 22,1943: 64 years of age
Total credited service: 9 years 5 months 19 days
Average monthly salary for 2 highest 12 month periods, $4,333.64 x .0127 =
$55.04 x 9.46872 =
*$521.16 pension effective November 1, 2007.
*Defined benefit portion only – supplemental retirement account will be converted to a monthly, lifetime annuity; amount to be determined later.
Motion: Mr. Harrell made a motion to approve this application for a Normal retirement. Ms. Pelot seconded the motion. The motion carried unanimously by the members present.
APPLICATION FOR RETIREMENT: PLAN G2 – RULE OF 80
CHARTER SECTION 1371.4
Charlotte K. Bounds, General Government No Option
Date of birth, May 25, 1948: 59 years of age
Total credited service: 20 years 9 months 29 days
Average monthly salary for 2 highest 12 month periods, $2,550.26 x .021 =
$53.56 x 20.82945 =
$1,115.63 pension effective November 1, 2007.
Motion: Mr. Calloway made a motion to approve this application for a Rule of 80 retirement. Ms. Pelot 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.
Charles T. Stuart, Fire Department Uniformed No Option
Date of birth, October 11, 1947: 60 years of age
Total credited service: 35 years 2 months 11 days
Average monthly salary for 2 highest 12 month periods, $4,461.46 x 2.5% =
$111.54 x 30 =
$3,346.20 pension effective November 1, 2007.
DROP complete October 31, 2009.
Motion: Mr. Calloway made a motion to approve this application for DROP retirement. Mr. King 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 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.
Buddy D. Runions, General Government – Plan G1 Option A-6
100% without reinstatement
Date of birth, April 16, 1931 76 years of age
Total credited service: 10 years 2 months 28 days
Average monthly salary for 2 highest 12 month periods, $1,891.09 x .0135 =
$25.53 x 10.24338 = $261.51. Mr. Runions chose Option A-6 – 100% without reinstatement to Peggy Ruth Runions, spouse. $261.51 x .625 =
*$163.44 pension effective October 1, 2007.
*Defined benefit portion only – supplemental retirement account will be converted to a monthly, lifetime annuity; amount to be determined later.
DROP complete September 30, 2009.
Motion: Mr. Calloway made a motion to approve this application for DROP retirement. Ms. Pelot seconded the motion. The motion carried unanimously by the members present.
APPROVAL OF INVOICES FOR PROFESSIONAL SERVICES: (GREEN TAB)
Bryan, Pendleton, Swats & McAllister – Actuary (September 2007) $ 17,526.00
Kennerly, Montgomery & Finley – Attorney (General – Sept. 2007) 3,001.78
Kennerly, Montgomery & Finley – Attorney (G. Fields – Sept. 2007) 2,625.00
State Street – Trustee (September 2007) 3,370.88 AQR Capital Management – Money Manager (3rd Qtr. 2007) 122,205.00
INTECH (Money Manager (3rd Qtr. 2007) 10,077.79
Pinnacle Associates – Money Manger (3rd Qtr. 2007) 23,291.00
STW – Money Manager (3rd Qtr. 2007) 29,641.18
UBS – Money Manager (3rd Qtr. 2007) 21,682.80
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. Pelot 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. Dan Holmes made a presentation of the 3rd Quarter 2007, Performance Report and distributed an education booklet on private equity investments. Copies of his reports are on file in the Pension Office.
Money Manager Reviews
UBS Money Manager Review
Mr. Mike Lammers and Mr. Tom Digeman with UBS Global Asset Management made a presentation and distributed a written report. A copy is on file in the Pension Office.
Mayor Haslam left the meeting at 10:19 a.m.
Mr. Calloway left the meeting at 10:20 a.m.
RREEF – DB Real Estate Money Manager Review
Mr. Chip George and Mr. Tim Brosnan with RREEF made a presentation and distributed a written report. A copy is on file in the Pension Office.
OTHER: None
PUBLIC COMMENTS: None
RECESS:
Mr. Martin made a motion at 11:00 a.m. to recess the meeting until Tuesday, November 13, 2007, at 8:15 a.m. Ms. Pelot seconded the motion.
CITY OF KNOXVILLE PENSION BOARD
MINUTES
Tuesday – November 13, 2007
8:15 A.M.
917B E. 5TH AVENUE
The reconvened meeting from Thursday, November 8, 2007, 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 November 8, 2007.
Present were: Mayor Bill Haslam, Mr. Buddy Harrell, Mr. Stephen King, Mr. Larry Martin, Ms. Barbara Pelot, Mr. Michael Cherry and Attorney Bud Gilbert.
Also present: Ms. Anita Cash, City Employees’ League and Ms. Robin Shelton, General Government employee and nominee for Pension Board, General Government Representative – Seat B.
CALL TO ORDER:
Mayor Haslam presided and called the meeting to order at 8:23 a.m.
GENERAL GOVERNMENT ELECTION
Attorney Gilbert discussed with the Board the research he had conducted regarding whether or not two employees from the same department could serve as representatives on the Pension Board. After a discussion of Mr. Gilbert’s research, the City Charter and Pension Board Rules, Mr. King withdrew his nomination to run for General Government Pension Board representative – Seat B, resulting in two nominations being certified, Barry Austin and Robin Shelton.
ADJOURNMENT:
There being no further business before the Board, Mayor Haslam adjourned the meeting at 8:59 a.m.
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Chair
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Date