CITY OF KNOXVILLE PENSION BOARD
MINUTES
Thursday – November 11, 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 November 11, 2010.
Present were: Ms. Barbara Pelot, Mr. Joe Hackney, Mr. Jim Hutchens, Mr. Larry Martin, Ms. Robin Shelton, Mr. Jim York, Mr. Michael Cherry and Attorney Bud Gilbert. Mr. Martin attended as Mayor Haslam’s designated representative as authorized by T.C.A. § 6-54-112 and the mayor’s letter of designation dated March 5, 2010.
Also present: General Government employees, Mr. Pat Armstrong, Ms. Anita Cash, Ms. Ginger Huskey and Mr. Donald Jenkins; Lt. Cheri Matlock, Police Department Uniformed employee; Mr. Dan Holmes, Summit Strategies
CALL TO ORDER:
Ms. Pelot presided and called the meeting to order at 8:19 a.m.
APPROVAL OF REGULAR MEETING MINUTES FOR October 14, 2010:
Mr. Martin made a motion to approve the October 14, 2010, meeting minutes. Mr. Hackney seconded the motion. The motion carried unanimously by the members present.
APPROVAL OF REVISED AGENDA: - Exhibit 1
The Revised Agenda was approved without objection.
ADMINISTRATIVE MATTERS:
Post Retirement Benefit Adjustment Resolution – Exhibit 2
Mr. Hutchens arrived at 8:20 a.m.
Mr. Cherry reviewed with the Board the cost of living adjustments effective January 1, 2011.
Motion: Mr. Hackney made a motion to approve the Post Retirement Benefit Adjustment Resolution as presented by the Executive Director. Ms. Shelton seconded the motion. The motion carried unanimously by the members present.
Schedule Pension Board Meetings for First Quarter 2011
Thursday, January 13, 2011 – 8:15 a.m.
Thursday, February 10, 2011 – 8:15 a.m.
Thursday, March 10, 2011 – 8:15 a.m.
The Pension Board meeting schedule was noted.
EXECUTIVE DIRECTOR COMMENTS:
Elections – Exhibit 3
Mr. Cherry informed the Board that three nominations had been received and certified in the Fire Department Seat B representative election. The nominees are Mr. Jack Banks, Mr. Steven Fowler and Mr. Joe Hackney.
In the General Government section, Mr. Cherry advised the Board of four nominations received, Mr. Pat Armstrong, Ms. Ginger Huskey, Mr. Donald Jenkins and Mr. Stephen King. Mr. Cherry advised the Board that he had certified the nominations of Mr. Armstrong, Ms. Huskey and Mr. Jenkins, but sought direction from the Board and Attorney Gilbert on the certification of Mr. King’s nomination, pending clarification regarding Mr. King’s department designation.
After a discussion of the Pension Board election rules and the City departmental structure the following motion was made:
Motion: Mr. Hutchens made a motion to adopt a policy to consider chartered departments as guidelines for election and also Civil Service status as a guideline as to what department an employee is in. The motion was later withdrawn by Mr. Hutchens before receiving a second and the following motion was then made:
Motion: Mr. Hutchens made a motion that the Board declare Mr. King eligible to run for election to the board as a member of the Engineering Department and to certify his nomination as a candidate in the upcoming board election to be held on December 3, 2010, its determination being based on (i) the department for which the nominee’s salary is budgeted and (ii) the Board’s conclusion that supervisory oversight over personnel in another department by a nominee in another department who is otherwise qualified to run does not negate the Board’s interpretation of the requirements in Charter Section 13249A) that “General Government Seat A and General Government Seat B shall not be occupied by representatives employed within the same city department” nor pose a conflict that should render such a nominee ineligible. Mr. Hackney seconded the motion. The motion passed 5-0. Ms. Shelton recused herself from voting on this matter because she had previously submitted a nomination petition for the same election but wanted to avoid the appearance of any impropriety on the matter.
ATTORNEY COMMENTS:
G1 Discussion
Attorney Gilbert updated the Board on the pending G1 employees’ litigation.
Glenda Fields’ Litigation – Exhibit 4
Attorney Gilbert updated the Board on the settlement negotiations in the Glenda Field’s litigation.
Anniversary
Attorney Gilbert noted to the Board that as of this November he had served as the Pension Board’s general counsel for 20 years and thanked the Board on behalf of his firm for the opportunity to be of service to the Board, its staff and the pension system during that tenure. He also advised the Board that he was two months behind in submitting invoices for legal services rendered to the pension system by his firm but would be caught up with all billing before the Board’s December meeting.
OTHER:
Mr. Hutchens advised the Board of his pending surgery schedule in January 2011 and said he may have to miss several meetings at the first of the year until he is able to return.
CONTRACTS: None
ENROLLMENTS:
The following General Government employees have filed applications to become members of the Plan G1 pension system.
Donna L. Lund
Christen McDonald
Motion: Mr. Hackney made a motion to approve these applications for enrollment in the Plan G1 pension system. Mr. Martin seconded the motion. The motion carried unanimously by the members present.
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.
Melissa Berry, General Govt. – Plan G2, Vested
John S. Carr, Jr., General Govt. – Plan G1 Vested
William LeQuire, General Govt. – Plan G1, Non-vested
Rachel Warren, Police Dept., Plan C – Non-vested
Motion: Mr. Hutchens 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.
APPLICATION FOR INJURY IN LINE OF DUTY: PLAN C
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
Average monthly salary for 2 highest – 12 month periods, $3,457.61 x 50% =
$1,728.81 pension effective December 1, 2010.
Motion: Mr. Martin made a motion to defer this application for Injury In Line of Duty retirement to the December meeting in order to obtain additional information and ensure that Police Department’s Uniformed Body representative, Mr. Greg Coker, be in attendance. Mr. Hutchens seconded the motion.
Motion: With the concurrence of Mr. Hutchens, Mr. Martin withdrew the previous motion and made a substitute motion to award a Not In Line of Duty retirement benefit to Ms. Spitzer pursuant to Charter Sections 1350.2(M) and 1390.12 with a review to be performed in two years, and to defer the In Line of Duty application to the December board meeting pending additional advice from Attorney Gilbert and the Police Department on the matter. Mr. Hutchens seconded the motion. The motion carried unanimously by the members present.
APPLICATION FOR SURVIVOR’S BENEFIT: PLAN G2
CHARTER SECTION 1360.24
Michael G. Farley, active General Government employee died in service September 30, 2010. Mr. Farley’s statistics:
Date of birth, August 15, 1950: 60 years of age
Credited service: 34 years 7 months 14 days
Average monthly salary for 2 highest 12 month periods, $4,078.49 x .021 =
$85.65 x 34.62169 = $2,965.35. Mr. Farley chose Option A-6 – 100% Joint and Survivor to Steven Isbill. $2,965.35 x .8127 =
$2,409.94 Steven E. Isbill’s monthly benefit beginning October 1, 2010.
Motion: Mr. Hackney made a motion to approve this application for a survivor’s benefit payable under Option A-6. Mr. Martin seconded the motion. The motion carried unanimously by the members present.
APPLICATION FOR EARLY RETIREMENT: PLAN A
CHARTER SECTION 1360.17
Glenda R. Rogers, Schools Certified No Option
Date of birth, September 24, 1949: 61 years of age
Total City credited service: 15 years 7 months
Total County credited service: 23 years 3 months
Total credited service: 38 years 10 months
Last date of employment with City: June 1987
Last date of employment with County: October 2010
Average base earnings for 4 years, $400.00 x 75% = $3.00
Average excess earnings for 4 years, $1,359.78 x 1.50% = $20.40
making a total of $23.40 benefit per year of service. $23.40 x 15.58333 =
$364.65 x ER factor .9075 =
$330.92 pension effective November 1, 2010.
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 $2,187.43.
25 years required for Early retirement. Supreme Court ruling entitles retiree to combine City and County credited service.
Motion: Mr. York made a motion to approve this application for 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.
John A. Gentry, General Government – Plan G2 Option A-7 – 50%
Joint & Survivor with reinstatement
Date of birth, September 12, 1955: 55 years of age
Total credited service: 25 years 15 days
Average monthly salary for 2 highest – 12 month periods, $2,119.63 x .021 =
$44.51 x 25.04110 = $1,114.58. Mr. Gentry chose Option A-7 – 50% with reinstatement to Linda Roach, daughter. $1,114.58 x .8826 =
$983.73 pension effective November 1, 2010.
DROP complete October 31, 2012.
Motion: Mr. Hackney made a motion to approve this application for DROP retirement payable under Option A-7. Mr. Hutchens seconded the motion. The motion carried unanimously by the members present.
APPROVAL OF INVOICES FOR PROFESSIONAL SERVICES:
Bryan, Pendleton, Swats & McAllister – Actuary (Sept 2010) $12,929.00
Kennerly, Montgomery & Finley – Attorney
State Street – Trustee (Sept – 2010) 3,452.74 Aberdeen – Money Manager (3rd Qtr – 2010) 25,974.02
Acadian – Money Manager (3rd Qtr – 2010) 51,774.00
AQR – Money Manager (3rd Qtr – 2010) 55,966.00
CastleArk – Money Manger (3rd Qtr – 2010) 13,721.96
Eagle Capital – Money Manger (3rd Qtr – 2010) 23,773.44
IRM – Money Manager (3rd Qtr -2010) 1,401.37
Pinnacle – Money Manager (3rd Qtr – 2010) 50,609.00
STW - Money Manager (3rd Qtr – 2010) 36,839.84
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 these invoices. Mr. York seconded the motion. The motion carried unanimously by the members present.
INVESTMENT MATTERS:
Investment Committee
Mr. York informed the full Board that the Investment Committee had decided to interview four Core Fixed Income managers in December and invited the full Board to attend when those interview dates are confirmed.
Minutes
Mr. Cherry advised that there were no action items from this month’s Investment Committee meeting.
Dan Holmes – Summit Strategies
3Q 2010 Performance Report
Dan Holmes made a presentation of the 3rd Quarter 2010, Performance Report and distributed an education booklet on Private Energy and Private Real Estate Fund-of Funds. Copies of his reports are on file in the Pension Office.
Aether Real Assets Fund Recommendation
Mr. Holmes disclosed to the Board that a member of Summit Strategies sat on an advisory panel for Aether Real Assets. In response to questions from some of the Board members, Mr. Holmes indicated that such participation by investment consultants was not unusual in the industry, was in keeping with all of his firm’s ethical requirements, and could in some instances be of value to the clients his firm serves. He also indicated that other members of his firm may have served in similar capacities for other investment consultants that were monitored by his firm. The Board requested that Mr. Holmes draft a letter acknowledging and documenting all advisory panels on which Summit Strategies members or employees serve and that the following questions be answered in such letter:
1) Does Summit Strategies or any of its members or employees get paid from the panel or for their services related to the panel?
2) Does Summit Strategies or any of its members or employees serving on such a panel get benefits such as trips, etc. from their services related to such panels?
PUBLIC COMMENTS: None
ADJOURNMENT:
There being no further business, the following motion was made:
Motion: Mr. Hackney made a motion to adjourn the meeting at 10:35.m. Mr. Hutchens seconded the motion. The motion carried unanimously by the members present.
Chair
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