CITY OF KNOXVILLE PENSION BOARD

MINUTES

Thursday – March 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 March 11, 2010.

 

Present were:  Ms. Barbara Pelot, Mr. Greg Coker, 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.

 

CALL TO ORDER:

 

            Ms. Pelot presided and called the meeting to order at 8:17 a.m.

 

APPROVAL OF REGULAR MEETING MINUTES FOR February 11, 2010:

 

Mr. York made a motion to approve the February 11, 2010, meeting minutes after a revision, under 4Q 2009 Performance Report section on page seven, was made.  Mr. Hutchens 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: 

 

            State Comptroller Letter – Exhibit 2

 

Mr. Cherry shared and discussed with the Board a letter he received from the State of Tennessee Comptroller regarding their review of the Pension System’s annual financial report.  Mr. Cherry informed the Board of his progress in addressing the recommendation by the Comptroller.

 

Pugh & Co. – June 30, 2010 Audit – Exhibit 3

 

Attorney Gilbert arrived at 8:23 a.m.

 

Mr. Cherry presented to the Board a fee proposal from Pugh & Co. for the annual audit for the year ending June 30, 20 10, and recommended the option for the $21,000 contract price where the Pension System agrees to pay the J.G. Gaston & Associates invoice for the BPS&M review up to a maximum fee of $5,000.

 

In addition to the above, the Board agreed to the maximum fee increase of approximately 5% proposed by Pugh & Co. for audit fees for the years ended June 30, 2011 and June 30, 2012.

 

Motion:  Mr. Hackney made a motion to authorize the Executive Director to enter into a contract on behalf of the Pension Board with Pugh & Co. for the audit of the Pension System’s financial statement for the year ending June 30, 2010, for an amount not to exceed the fee quote of $21,000 and a fee not to exceed $5,000 for the BPS&M review. In addition audits are authorized for the fiscal years beginning on July 1, 2010 and July 1, 2011 with fee increases of approximately 5%. Lastly, the motion authorized an option to extend the contract for two additional one year extensions. Mr. Hutchens seconded the motion.  The motion carried unanimously by the members present.

 

Ms. Shelton arrived at 8:25 a.m.

 

ADMINISTRATIVE MATTERS: None

 

EXECUTIVE DIRECTOR COMMENTS:

 

            Investment Committee Recommendation

 

Mr. Cherry informed the Board regarding a decision made by the Investment Committee at the March 2, 2010, Investment Committee meeting to authorize Summit Strategies to begin a money manager search.

 

Mr. Coker made a motion recommending the action of the Investment Committee to authorize Summit Strategies to begin the money manager search.  Mr. Hackney seconded the motion.  The motion carried unanimously by the members present.

 

ATTORNEY COMMENTS:

 

            Charter Amendment List Discussion – Exhibit 4

 

Attorney Gilbert distributed to and discussed with the Board a list of suggested charter amendments for the 2010 referendum.

 

Mr. Coker recommended deferring the review of Military Service Buyback (item 2 on list) to the 2012 referendum.

 

Following additional discussion of several critical dates that apply to various obligations of the Pension Board and Attorney Gilbert’s suggestion that he had desired for several years to create a master calendar for the Pension Board’s various duties and responsibilities, the following motion was made:

 

Motion:  Mr. Martin made a motion requesting Attorney Gilbert draft a Master Calendar for presentation to the Pension Board by the April meeting.  Mr. Hackney seconded the motion.  The motion carried unanimously by the members present.

 

Stone Energy Class Litigation

 

Attorney Gilbert informed the Board that the brief and motion for a final settlement had been filed with the court in the Stone Energy Class Litigation, with a decision to be expected within 30 days.

 

Glenda Fields Litigation

 

Attorney Gilbert informed the Board on the work being performed regarding the Glenda Fields’ litigation.

 

G1 Member Complaint

 

Attorney Gilbert advised the Board of the continued progress to date on the Plan G1 members’ complaint.

 

ENROLLMENTS:

 

The following General Government employee has filed an application to become a member of the Plan G1 pension system.

                       

                        Christopher E. Goforth

 

Motion:  Mr. Hutchens made a motion to approve this application for enrollment in the Plan G1 pension system.  Mr. Hackney 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.

 

Shona D. Hamlin, Fire Dept. - Plan C; vested

Joann Howard, General Govt. – Plan G1; vested

Kenneth J. Smith, General Govt. – Plan G1; non-vested

John W. Webb, General Govt. – Plan G1; vested

 

 

Motion:  Mr. Martin made a motion to approve these applications for withdrawal of employee contributions.  Mr. Hackney seconded the motion.  The motion carried unanimously by the members present.

 

 

 

APPLICATION FOR DEFERRED RETIREMENT:  PLAN A

CHARTER SECTION 1360.28

 

Brenda Monaghan, Schools Non-Certified                                    No Option

            Date of birth, August 27, 1948:  62 years of age

            Total credited service:  35 years 2 months (combined City & County)

            Average base earnings for 3 years, $400.00 x .75% = $3.00

            Average excess earnings for 3 years, $1,721.76 x 1.50% = $25.83

            making a total of $28.83 benefit per year of service.  $28.83 x 35.1667 =

$1,013.86  Total benefit

                727.26  minus County benefit

$   286.60 pension effective March 1, 2010.

 

Motion:  Mr. York made a motion to approve this application for a deferred retirement.  Mr. Hutchens seconded the motion.  The motion carried unanimously by the members present.

 

            Ina L. Robertson, Schools Certified                                                Option B-10

                                                                                                                        5 Yr. Certain & Life

            Date of birth, February 8, 1948:  62 years of age

            Total City credited service:  13 years 5 months

            Total County credited service:  11years 9 months

            Total credited service:  25 years 2 months

            Last date of employment with City:  June 1987

            Last date of employment with County:  January 2000

            Average base earnings for 4 years, $400.00 x .75% = $3.00

            Average excess earnings for 4 years, $1,050.97 x 1.50% = $15.76

            making a total of $18.76 benefit per year of service.  $18.76 x 13.4167 =

$251.70.  Ms. Robertson chose Option B-10 – 5 Yr. Certain & Life to Samantha B. Robertson, daughter.  $251.70 x .9884 =

           $248.78 pension effective September 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 $1,042.00.

 

Motion:  Mr. York made a motion to approve this application for a deferred retirement payable under Option B-10.  Mr. Hutchens seconded the motion.  The motion carried unanimously by the members present.

 

Terry L. Rozelle, Schools Certified                                     Option A-6

                                                                                                                        100% Joint & Survivor

            Date of birth, April 27, 1948:  62 years of age

            Total City credited service:  16 years

            Total County credited service:  16 years

            Total credited service:  32 years

            Last date of employment with City:  June 1987

            Last date of employment with County:  June 2003

            Average base earnings for 4 years, $400.00 x .75% = $3.00

            Average excess earnings for 4 years, $1,363.53 x 1.50% = $20.45

            making a total of $23.45 benefit per year of service.  $23.45 x 16 =

$375.20.  Mr. Rozelle chose Option A-6 – 100% Joint & Survivor to Patricia H. Rozelle, spouse.  $375.20 x .8401 =

           $315.21 pension effective November 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 $1,514.60.

 

Motion:  Mr. York made a motion to approve this application for a deferred retirement payable under Option A-6.  Mr. Hutchens seconded the motion.  The motion carried unanimously by the members present.

 

APPLICATION FOR REINSTATEMENT OF PRIOR SERVICE: - Exhibit 4

CHARTER SECTION 1350.9

 

            Michael Chad Weth, General Government – Plan G1

            October 11, 2004 – April 20, 2007

            $6,255.15

           

Motion:  Mr. Hutchens made a motion to approve this application for reinstatement of the prior service period of October 11, 2004 – April 20, 2007, for the amount of $6,255.15.  Ms. Shelton seconded the motion.  The motion carried unanimously by the members present.

 

APPROVAL OF INVOICES FOR PROFESSIONAL SERVICES: 

           

Bryan, Pendleton, Swats & McAllister – Actuary (January 2010)            $  8,476.00

Kennerly, Montgomery & Finley – Attorney (January 2010)                   4,679.60                       Kennerly, Montgomery & Finley – Attorney (Global Crossing)                  139.83

State Street - Custodial (December – 2009)                                                8,390.10

            State Street - Custodial (January - 2010)                                                     8,421.82

            State Street – Trustee (January – 2010)                                                        3,451.36

            Acadian Asset Man. – Money Manager (4th Qtr – 2009)                         4,205.00

            Summit Strategies – Money Manager (1st Qtr – 2010)                               31,250.00

            UBS – Money Manager (4th Qtr – 2009)                                               17,750.19

           

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. Hackney made a motion to pay these invoices.  Mr. Hutchens seconded the motion.  The motion carried unanimously by the members present.

 

INVESTMENT MATTERS:

 

            Principal Global Investors

 

Mr. Cherry informed the Board of the decision to decline the redemption from Principal Global Investors, but remain in the queue, per Summit Strategies’ recommendation.

 

OTHER:

 

Mr. Hackney inquired of the Investment Committee as to the status of the meeting with City Council regarding discussion of the Pension System and was advised that the meeting had not yet been scheduled based on advice from the city administration.

 

PUBLIC COMMENTS:  None

 

ADJOURNMENT:

 

Motion:  Mr. Hackney made a motion to adjourn the meeting at 9:28 a.m.  Mr. Coker seconded the motion.  The motion carried unanimously by the members present.

 

 

 

                                                                                    __________________________

                                                                                    Chair

 

 

                                                                                    ___________________________

                                                                                    Date

 

 

 

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