CITY OF KNOXVILLE PENSION BOARD
MINUTES
Thursday - February 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 February 8, 2007.
Present were: Mayor Bill Haslam, Mr. Scott Calloway, Mr. Greg Coker, Mr. Buddy Harrell, Mr. Stephen King, Mr. Larry Martin, Ms. Barbara Pelot, Mr. Michael Cherry and Attorney Bud Gilbert.
Also present: Mr. Dan Holmes, Summit Strategies; Mr. William Lissenden with Aberdeen Asset Management.
CALL TO ORDER:
Mayor Haslam presided and called the meeting to order at 8:19 a.m.
APPROVAL OF REGULAR MEETING MINUTES FOR January 11, 2007:
Mr. Martin made a motion to approve the January 11, 2007, meeting minutes. Mr. Coker seconded the motion. The motion carried unanimously by the members present.
APPROVAL OF REVISED AGENDA: Exhibit 1
The Revised Agenda was approved without objection.
Mr. Harrell arrived at 8:20 a.m.
CONTRACTS: None
ADMINISTRATIVE MATTERS:
Glenda Fields Litigation
Attorney Gilbert advised the Board that a new trial date had been set in Chancery Court on the Glenda Fields litigation, for June 6, 2007.
EXECUTIVE DIRECTOR COMMENTS:
Mr. Calloway arrived at 8:23 a.m.
ATTORNEY COMMENTS:
Salary Review and Bonus Policy – Exhibit 2
Motion: Mr. Harrell made a motion to accept a revised Pension Board Salary Review and Bonus Policy that was originally presented to the Board by Attorney Gilbert at the January 11, 2007, board meeting and revised by Attorney Gilbert to reflect several changes recommended by the Pension Board. Mr. Coker seconded the motion. The motion carried unanimously by the members present.
ENROLLMENTS:
The following General Government employees have filed applications to become members of the Plan G1 pension system.
Rebecca M. Allender
Douglas E. Cole
Charles E. Davis
Daniel Dyer
Jo M. Ferguson
Gail E. Frank
Cody Gentry
Peter F. Gerlach
Charles Hicks
Autumn Little
Clifford E. Mann
Maynard C. McRae, Jr.
Willie P. Ownby
Reynold N.Vargas
Madeleine Weil
Curtis Williams
Motion: Mr. King made a motion to approve these applications for enrollment in the Plan G1 pension system. Ms. Pelot 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.
Valerie S. Embry, General Government, G1 – Non-vested
Jennifer L. Mathiak, Police Department, Plan C – Non-vested
Nicholas Yarnell, General Government, G1 – Non-vested
Motion: Mr. Harrell made a motion to approve these applications for withdrawal of employee contributions. Ms. Pelot seconded the motion. The motion carried unanimously by the members present.
APPLICATION FOR BUYBACK OF PRIOR MILITARY SERVICE: (Charter Section 1350.9(E) – Exhibit 3
William D. Provine, General Government – Plan G1
Buyback of four years for the amount of $8,488.41
Motion: Mr. Coker made a motion to approve this application to buyback four years of prior military service for the amount of $8,488.41. Mr. Harrell seconded the motion. The motion carried unanimously by the members present.
APPLICATION FOR EARLY RETIREMENT: PLAN A
CHARTER SECTION 1360.17
John A. Black, Schools Certified No Option
Date of birth, May 22, 1949: 57 years of age
Total City credited service: 12 years
Total County credited service: 19 years 6 months
Total credited service: 31 years 6 months
$154.77 pension effective February 1, 2007.
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 $1,181.89.
25 years required for Early retirement. Supreme Court ruling entitles retiree to combine City & County credited service.
Motion: Mr. Martin made a motion to approve this application for early retirement. Mr. King seconded the motion. The motion carried unanimously by the members present.
APPROVAL OF INVOICES FOR PROFESSIONAL SERVICES:
Bryan, Pendleton, Swats & McAllister – Actuary (December 2006) $10,063.00
Kennerly, Montgomery & Finley – Attorney (General – Dec. 06) 3,088.50
State Street – Custodial (November 2006) 14,166.67
State Street – Custodial (December 2006) 14,166.67
Calamos – Money Manager (4th Qtr – 2006) 44,390.00
STW – Money Manager (4th Qtr – 2006) 28,623.58
INTECH – money manager (4th Qtr – 2006) 89,383.91
TCW Asset Management – Money Manger (4th Qtr 2006) 95,598.92
Aberdeen Asset Management – Money Manager (4th Qtr 2006) 40,470.58
Cortina Asset Management – Money Manager (1st Qtr 2007) 80,623.19
UBS Asset Management – Money Management (4th Qtr 2006) 25,733.39
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:
Cortina Discussion
Mr. Holmes informed the Board that Cortina Asset Management’s main principal, Mr. Joe Frohna, had been served with a Wells notice and was being investigated by the SEC. Mr. Holmes told the Board that he had learned that Cortina employees had asked Mr. Frohna to resign and planned to purchase Mr. Frohna’s shares in the company. Mr. Holmes advised the Board that due to this development, there was uncertainty as to the investment style on a going forward basis.
Mr. Holmes informed the Board that Mr. Cherry had sent a letter to Cortina suspending their authorization to trade on our account and to forward a certified listing of securities held in the account to our custodian. Summit Strategies recommended the contract with Cortina be terminated and on a temporary basis State Street Global Advisors (SSGA) be appointed as the replacement investment manager. The assets of the Cortina account would be transferred to SSGA’s small cap index fund, Russell 2000 Growth Index Securities Lending Fund. Mr. Holmes advised the Board that his firm had already begun a small cap growth fund manager search to recommend a permanent replacement. The search booklet should be ready no later than the Board’s April meeting.
Motion: Ms. Pelot made a motion to accept the recommendation from Dan Holmes of Summit Strategies to terminate the contract with Cortina Asset Management and to ratify and affirm the letter sent to Cortina suspending its authority to trade in the Pension Board’s account. The motion further authorized Mr. Cherry to complete and sign a contract with State Street Global Advisors as the transition manager for the Cortina funds and to sign an amendment to the current SSGA contract naming this company as an investment manager for these funds to be invested in its Russell 2000 Growth Index Securities Lending fund. Mr. Martin seconded the motion. The motion carried unanimously by the members present.
Money Manager Review
William T. Lissenden – Aberdeen Asset Management
William T. Lissenden with Aberdeen Asset Management made a presentation and distributed a written report. A copy is on file in the Pension Office.
Dan Holmes – Summit Strategies
Mr. Dan Holmes made a presentation of the 4th Quarter 2006, Performance Report. A copy of his report is on file in the Pension Office.
OTHER:
Mayor Haslam congratulated Mr. Coker on his recent promotion with the Knoxville Police Department.
PUBLIC COMMENTS: None
ADJOURNMENT:
There being no further business before the Board, Mayor Haslam adjourned the meeting at 9.38 a.m.
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