CITY OF KNOXVILLE PENSION BOARD
MINUTES
Thursday – December 10, 2009
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 December 10, 2009.
Present were: Mayor Bill Haslam Ms. Barbara Pelot, Mr. Greg Coker, Mr. Joe Hackney, Mr. Jim Hutchens, Ms. Robin Shelton, Mr. Jim York, Mr. Michael Cherry and Attorney Bud Gilbert.
Also present: Mr. James Flanagan - Fire Department Retiree; Lt. Cheri Matlock - Knoxville Police Department; Mr. Stuart Leaf and Mr. Jack Estes – Cadogan Management.
CALL TO ORDER:
Mayor Haslam presided and called the meeting to order at 8:20 a.m.
APPROVAL OF REGULAR MEETING MINUTES FOR November 12, 2009.
Mr. Coker made a motion to approve the November 12, 2009, 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.
CONTRACTS: None
ADMINISTRATIVE MATTERS:
Election of Pension Board Officers
Mayor Haslam reminded the Pension Board members that officers for the 2010 calendar year would need to be elected at the January 14, 2010, Pension Board meeting.
EXECUTIVE DIRECTOR COMMENTS:
Acadian Asset Management
Mr. Cherry informed the Board that the Acadian Asset Management contract had been signed and sent to the new Emerging Markets Equity Manager hired by the Board in May 2009, with the initial funding expected to be executed on Friday, December 11, 2009.
ATTORNEY COMMENTS:
Stone Energy Securities Litigation Settlement – Exhibit 2
Mr. Hutchens arrived at 8:22 a.m.
Attorney Gilbert distributed to, and discussed with the Board, the terms of settlement relative to the Stone Energy Securities Litigation. In his discussion with the Board, Attorney Gilbert suggested that the Board may have the authority to designate recipients of any excess funds from the claim.
Motion: Mr. Hackney made a motion based on the recommendations of the Pension Board’s securities litigation counsel, Barroway Topaz Kessler Metzler & Check, LLP, and the Pension Board’s General Counsel, that the terms of settlement contained in that “ Confidential Term Sheet to Settle Class Action” dated November 23, 2009 for the class action securities litigation against Stone Energy Corporation pending in the United States District Court (Western District for Louisiana, Docket No. 05-CV-2088) be accepted and approved by the Pension Board and that the Executive Director and General Counsel be authorized to take all further action they deem necessary or convenient to release the defendants in the litigation, consummate the settlement of the litigation in accordance with such terms of settlement, and apply for and obtain any and all relief to which the City of Knoxville Employees Pension System is entitled under such terms of the settlement. Mr. Coker seconded the motion. The motion passed unanimously by the members present.
Personnel Committee Report
Attorney Gilbert advised the Board that he had not yet prepared an opinion memorandum relative to pay and classification issues but that he had finished his review of that matter and was ready to discuss his conclusions with the Personnel Committee at the members’ convenience.
Harold Owenby Retirement Benefit
Mr. Cherry noted to the Board that Mr. Harold Owenby’s Plan A – Uniformed retirement benefit payment, listed on this agenda, has a retroactive start date and payment. Attorney Gilbert advised the Board that even though questions were raised in a letter received by the Pension system from Mrs. Catherine Owenby, that the benefit should be approved and payment be commenced as scheduled on the agenda.
ENROLLMENTS:
The following General Government employees have filed applications to become members of the Plan G1 pension system.
Matthew Bradburn
Rebecca R. Clabough
Andrea M. Jones
Kirk Thomas
Shirley Whiteaker
Motion: Mr. York made a motion to approve these applications for enrollment in the Plan G1 pension system. Ms. Shelton 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.
Roy L. Chance, General Govt., G-1 – Vested
Dorothy J. Perry, Schools, Plan A – Non-vested
Motion: Ms. Pelot made a motion to approve these applications for withdrawal of employee contributions. Mr. Hutchens seconded the motion. The motion carried unanimously by the members present.
APPLICATION FOR DEFERRED RETIREMENT: PLAN A
CHARTER SECTION 1360.28
Linda I. Menasco, Schools Certified Option A-7
50% with reinstatement
Date of birth, November 2, 1947: 62 years of age
Total City credited service: 15 yrs. 8 months
Total County credited service: 16 years 6 months
Total credited service: 32 years 2 months
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, $1,447.82 x 1.50% = $21.72
making a total of $24.72 benefit per year of service. $24.72 x 15.6667 =
$387.28. Ms. Menasco chose Option A-7 – 50% with reinstatement to Leia Suzanne Bell, daughter. $387.28 x .8272 =
$320.36 pension effective December 1, 2009
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 & County benefit is $2,160.86.
Motion: Ms. Pelot made a motion to approve this application for a Deferred Retirement payable under Option A-7. Mr. Coker seconded the motion. The motion carried unanimously by the members present.
APPLICATION FOR RETIREMENT: PLAN A - NORMAL
CHARTER SECTION 1360.12
Merry S. Brown, Schools Non-Certified No Option
Date of birth, November 22, 1947: 62 years of age
Total credited service: 30 years 5 months
Average base earnings for 3 years, $400.00 x .75% = $3.00
Average excess earnings for 3 years, $1,406.72 x 1.50% = $21.10
making a total of $24.10 benefit per year of service. $24.10 x 30.4167 =
$733.04 Total benefit
576.16 minus County benefit
$156.88 pension effective December 1, 2009.
Motion: Mr. Hutchens made a motion to approve this application for retirement. Mr. Hackney seconded the motion. The motion carried unanimously by the members present.
Kenneth B. Sutherland, General Govt. Option A-7
50% with reinstatement
Date of birth, October 1, 1947: 62 years of age
Total credited service: 32 years 27 days
Average base monthly salary for 2 highest years, $400.00 x .75% = $3.00
Average excess earnings for 2 years, $2,623.22 x 1.50% = $39.35
making a total of $42.35 benefit per year of service. $42.35 x 32.07397 =
$1,358.33. Mr. Sutherland chose Option A-7 – 50% with reinstatement to Christine Marie Sutherland, daughter. $1,358.33 x .8446 =
$1,147.25 pension effective December 1, 2009
Motion: Mr. Hutchens made a motion to approve this application for retirement payable under Option A-7. Mr. Hackney seconded the motion. The motion carried unanimously by the members present.
APPLICATION FOR RETIREMENT: PLAN G1 - NORMAL
CHARTER SECTION 1360.12
Eddie L. Hicks, General Government Option A-6
100% without reinstatement
Date of birth, May 7, 1946: 63 years of age
Total credited service: 5 years 3 months 4 days
Average monthly salary for 2 highest 12 month periods, $1,848.28 x .0121% =
$22.36 x 5.26096 = $117.64. Mr. Hicks chose Option A-6 – 100% without reinstatement to Kathleen R. Hicks, spouse. $117.64 x .8072 = $94.96. Mr. Hicks elected to convert the supplemental retirement account applicable in Plan G1 into an additional monthly annuity. Mr. Hicks benefit consists of $94.96 (defined benefit) plus $30.75 (supplemental portion). $94.96 + $30.75 =
$125.71 pension effective December 1, 2009.
Motion: Ms. Pelot made a motion to approve this application for retirement payable under Option A-6. Mr. York 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.
Gary R. Moyers, Police Dept. - Uniformed Option A-6
100% without reinstatement
Date of birth, June 17, 1952: 57 years of age
Total credited service: 35 years 20 days
Average monthly salary for 2 highest – 12 month periods, $4,930.00 x .2.5% =
$123.25 x 30 = $3,697.50. Mr. Moyers chose Option A-6 – 100% without reinstatement to June C. Moyers, spouse. $3,697.50 x .9128 = $
$3,375.08 pension effective December 1, 2009.
DROP complete November 30, 2011.
Motion: Mr. Coker made a motion to approve this application for Drop retirement payable under Option A-6. Ms. Pelot 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.
Carlene L. Loop, General Government – Plan G2 No Option
Date of birth, March 5, 1951: 58 years of age
Total credited service: 40 years 6 months
Average monthly salary for 2 highest – 12 month periods, $4,742.87 x 2.1% =
$99.60 x 40.50 =
$4,033.80 pension effective December 1, 2009.
DROP complete November 30, 2011.
Motion: Ms. Pelot made a motion to approve this application for Drop retirement. Mr. Hackney seconded the motion. The motion carried unanimously by the members present.
APPLICATION FOR RETIREMENT: PLAN A - NORMAL
CHARTER SECTION 1360.12
Harold E. Owenby, Fire Dept. - Uniformed Option A-4
50% without reinstatement
Date of birth, October 17, 1939: 70 years of age
Total credited service: 43 years 3 months 3 days
Average base monthly salary for 2 years, $400.00 x .88% = $3.52
Average excess monthly earnings for 2 years, $3,588.82 x 1.76% = $63.16
making a total of $66.68 benefit per year of service. $66.68 x 43.2582 =
$2,884.46. Mr. Owenby chose Option A-4 – 50% without reinstatement to Mary Catherine Owenby, spouse. $2,884.46 x .8558 =
$2,468.52 pension effective August 1, 2006.*
*Total retro payment of $101,548.91 (August 2006 through November 2009)
Motion: Mr. Hackney made a motion to approve this application for retirement payable under Option A-4. Mr. Coker seconded the motion. The motion carried unanimously by the members present.
APPROVAL OF INVOICES FOR PROFESSIONAL SERVICES:
Bryan, Pendleton, Swats & McAllister – Actuary (October 2009) $28,818.00
Kennerly, Montgomery & Finley – Attorney (November 2009) 10,616.84
O’Connor, Petty, Child & Piper – Attorney (July 2009) 584.00
State Street – Trustee (Oct. 2009) 3,413.34
State Street – Custodial (Oct. 2009) 8,403.56
Summit Strategies – Investment Consultant (4th Qtr – 2009) 31,250.00
UBS – Money Manager (3rd Qtr – 2009) 15,077.21
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. Coker seconded the motion. The motion carried unanimously by the members present.
INVESTMENT MATTERS:
Cadogan Management – Exhibit 3
Mr. Stuart Leaf and Mr. Jack Estes of Cadogan Management made a presentation to the Board. A copy of the report is on file in the Pension Office.
Investment Committee
The Investment Committee met Tuesday, December 1, 2009, and makes a recommendation to the full board to rescind the redemption request with Cadogan Management.
Motion: Mr. Hutchens made a motion to rescind the redemption request with Cadogan Management based on the recommendation of the Investment Committee and the presentation by the Cadogan officials. Mr. Hackney seconded the motion. The motion carried unanimously by the members present.
OTHER:
G1 Member Complaint
Ms. Pelot asked Attorney Gilbert the status of the opinion on the Plan G1 member complaint that he had been reviewing with Mr. Cherry. Attorney Gilbert advised Ms. Pelot that he planned to make a recommendation to the Board on the matter in January.
PUBLIC COMMENTS: None
ADJOURNMENT:
With no further business before the Board, Mayor Haslam adjourned the meeting at 9:26 a.m.
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Chair
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Date