CITY OF KNOXVILLE PENSION BOARD
MINUTES
May 11, 2006
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 May 11, 2006.
Present were: Mr. Scott Calloway, Mr. Greg Coker, Mr. Buddy Harrell, Mr. Stephen King, Mr. Christopher Kinney, Ms. Barbara Pelot, Mr. Michael Cherry and Attorney Bud Gilbert.
Also present: Ron Mills, Attorney representing the City of Knoxville; Edward Daniels, Attorney representing Police Department – Plan C disability applicant, Lisa Green; Mr. Dan Holmes, Summit Strategies; Mr. Billy Williams, STW Fixed Income Management; Ms. Jennifer Perkins, Principal Global Investors.
CALL TO ORDER:
Mr. Calloway presided and called the meeting to order at 8:22 a.m.
APPROVAL OF REGULAR MEETING MINUTES FOR April 13, 2006
Mr. Harrell made a motion to approve the April 13, 2006, 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 adopted without objection.
INVESTMENT MATTERS:
STW Money Manager Review
Mr. Billy Williams of STW Fixed Income Management made a presentation to the Board. A copy of the report is on file in the Pension Office.
DISABILITIES
APPLICATION FOR INJURY IN LINE OF DUTY RETIREMENT: PLAN C – Exhibit 2
CHARTER SECTION: 1390.11
Lisa D. Green, Police Dept. – Uniformed Option A-4
50% without reinstatement
Date of birth, September 17, 1969: 36 years of age
Total credited service: 12 years 2 months 7 days
Average monthly salary for 2 highest – 12 month periods, $3,420.20 x 50% =
$1,710.10. Ms. Green chose Option A-4 – 50% without reinstatement to Ronald K. Green, Jr., spouse. There is no reduction in Plan C for Option A-4.
$1,710.10 pension effective October 1, 2005.
Edward Daniels, attorney representing Ms. Linda Green, spoke on her behalf requesting that she be awarded an Injury In Line of Duty retirement. After a discussion with Mr. Cherry, Attorneys Gilbert and Daniels, and a review of Mr. Cherry’s disability recommendation report, the following motion was made:
Motion: Mr. Coker made a motion to approve this application for Injury in Line of Duty retirement based on Mr. Cherry’s disability recommendation report, subject to a review in two years, i.e. May 2008. Ms. Pelot seconded the motion. Mr. Kinney, Mr. Harrell and Mr. King voted no. The motion failed to pass.
Motion: Mr. Kinney made a motion to approve this application for Injury In Line of Duty retirement subject to a completion of the physician’s exam as recommended by Dr. Jeffrey Uzzle. Mr. King seconded the motion. Mr. Coker and Mr. Harrell voted no for a vote of three for and two against the motion. Mr. Calloway then voted yes. The motion then passed by a vote of 4 to 2.
It was discussed by the Board and requested that Mr. Cherry ask Dr. Jeffrey Uzzle to render an opinion on Ms. Green without the completion of a Functional Capacity Evaluation.
Attorney Gilbert advised Attorney Daniels of his right to ask the Board to reconsider action on any of the motions or ask for a contested case hearing under the Pension Board’s rules.
Principal Global Investors Money Manager Review
Ms. Jennifer Perkins of Principal Global Investors made a presentation to the Board. A copy of the report is on file in the Pension Office.
ADMINISTRATIVE MATTERS:
Mr. Cherry advised the Board that the preliminary report on the market value of fund assets was $512M, which is a $5M increase for the month of April.
CONTRACTS:
State Street Custodial Contract
Mr. Cherry informed the Board that the State Street custodial contract expires January 1, 2007. Mr. Cherry advised the Board that based on his discussion of the matter with Mr. Dan Holmes of Summit Strategies, he would recommend that Summit Strategies prepare a limited RFI, request for information, and bring a report back to the Board for review. Mr. Cherry advised the Board that he was satisfied with the services State Street was providing, and would not recommend a change unless there was an unexpected fee increase from State Street.
EXECUTIVE DIRECTOR COMMENTS:
City Council Meeting
Mr. Cherry advised the Board that the Pension Charter Amendments had been postponed until the May 23, 2006, City Council Meeting. Attorney Gilbert advised the Board that the proposed amendments would now be scheduled for the November 2006 ballot.
Mr. Kinney advised the Board that a discussion item regarding the proposed charter amendments had been added to the legislative budget hearing which was scheduled for Wednesday, May 24 at 11:15 a.m.
ATTORNEY COMMENTS:
Global Crossing Bankruptcy Proceedings
Attorney Gilbert informed the Board that the attorneys were in the process of filing a motion to dismiss the bankruptcy proceedings.
Glenda Fields Litigation
Attorney Gilbert advised the Board that he had informed Ms. Field’s Attorney, Mr. Tony Farmer, of the Boards’ rejection of their settlement offer and that Attorney Farmer had not yet filed a responsive pleading on the matter. Attorney Gilbert advised the Board that when this was completed, a hearing would be scheduled.
Cortina Asset Management Agreement – Exhibit 3
Attorney Gilbert distributed to the Board a Cortina Asset Management agreement for their review, and discussed with the Board the suggested changes and or additions to the contract.
Motion: Mr. Kinney made a motion to (1) approve the Cortina Asset Management Agreement including the changes as discussed with Attorney Gilbert and (2) authorize Mr. Cherry to proceed with all necessary administrative steps with the assistance of Summit Strategies to transfer the assets currently managed by Sterling Johnston to Cortina Asset Management including the use of a transition manager if recommended by Summit Strategies. Mr. Harrell 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.
Nelson W. Breeden
Ricky Dills
Amos Massengile, Jr.
Robert A. Reagan
Donald W. Sienkiewiez
Kenneth J. Smith
Motion: Ms. Pelot made a motion to approve these applications for enrollment in the Plan G1 pension system. Mr. Coker 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.
Sara Post, General Government, G-1 – Non-vested
Tammy Wilson, Police Department, Plan C – 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.
RETIREMENTS:
APPLICATION FOR EARLY RETIREMENT: PLAN A
CHARTER SECTION 1360.17
Brendalyn Harris, Schools Certified No Option
Date of birth, November 24, 1948: 57 years of age
Total City credited service: 12 years
Total County credited service: 18 years 11 months
Total credited service: 30 years 11 months
Last date of employment with City: June 1987
Last date of employment with County: April 2006
Average base earnings for 4 years, $400.00 x 75% = $3.00
Average excess earnings for 4 years, $1,054.60 x 1.50% = $15.82
making a total of $18.82 benefit per year of service. $18.82 x 12 =
$225.84 x ER factor .6260
$141.38 pension effective May 1, 2006.
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 $1,021.69.
25 years required for Early retirement. Supreme Court ruling entitles retiree to combine City & County credited service.
Motion: Mr. Harrell made a motion to approve this application for Early 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
Vance R. Shown, General Government Option A-6
100% without reinstatement
Date of birth, July 6, 1952: 53 years of age
Total credited service: 29 years 2 months 2 days
Average monthly salary for 2 highest – 12 month periods, $4,221.75 x 2.1% =
$88.66 x 29.17215 = $2,586.40. Mr. Shown chose Option A-6 – 100% without reinstatement to Linda Gale Shown, spouse. $2,586.40 x .8552 =
$2,211.89 pension effective May 1, 2006.
Motion: Mr. King made a motion to approve this application for Rule of 80 Retirement payable under Option A-6. Mr. Coker 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.
Robert G. Williams, Police Department Uniformed Option A-9
100% with reinstatement Date of birth, April 16, 1956: 50 years of age
Total credited service: 29 years 9 months 10 days
Average monthly salary for 2 highest – 12 month periods, $3,695.12 x 2.5% =
$92.38 x 29.77740 = $2,750.84. Mr. Williams chose Option A-9 – 100% with reinstatement to Terena S. Williams, spouse. $2,750.84 x .9168 =
$2,521.97 pension effective May 1, 2006.
DROP complete April 30, 2008.
Motion: Mr. Coker made a motion to approve this application for DROP Retirement payable under Option A-9. Mr. Harrell seconded the motion. The motion carried unanimously by the members present.
APPROVAL OF INVOICES FOR PROFESSIONAL SERVICES:
Bryan, Pendleton, Swats & McAllister – Actuary (March 2006) $2,055.00
State Street – Custodial (March 2006) 14,166.67
Calamos – money manager (1st Qtr. – 2006) 40,215.00
INTECH – money manager (1st Qtr. – 2006) 96,494.03
Sterling Johnston – money manager (1st Qtr. – 2006) 80,847.48
STW – money manager (1st Qtr. – 2006) 32,374.83
TCW – money manager (1st Qtr. – 2006) 98,241.26
UBS – money manager (1st Qtr. – 2006) 30,471.83
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. Kinney made a motion to pay these invoices. Mr. Harrell seconded the motion. The motion carried unanimously by the members present.
OTHER:
INVESTMENT MATTERS – cont’d:
Dan Holmes – Summit Strategies
Mr. Holmes made a presentation of the 1st Quarter, 2006 Performance Report. Copies of his report are on file in the Pension Office.
Hedge Fund Search
A discussion was held with Dan Holmes on the Hedge Fund Search. After the discussion with Mr. Holmes, the following motion was made:
Motion: Ms. Pelot made a motion to interview Aetos Capital, Cadogan
Management LLC and Union Bancaire Privee Asset Management. Mr. Coker seconded the motion. The motion carried unanimously by the members present.
Mr. Holmes advised the Board that he would schedule the interviews either on June 7 or June 9.
Non-Core Real Estate Manager Review
Mr. Holmes distributed to the Board a booklet on the Non-Core Real Estate Manager for their review and discussion at a later time.
PUBLIC COMMENTS: None
ADJOURNMENT:
There being no further business, the following motion was made:
Motion: Mr. Harrell made a motion to adjourn the meeting at 11:19 a.m. Mr. Coker seconded the motion. The motion carried unanimously by the members present.
_________________________
Chair
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Date
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