CITY OF KNOXVILLE PENSION BOARD
MINUTES
Thursday – May 14, 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 May 14, 2009.
Present were: 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. Matthew Hollingshead-Cook - Police Department, Uniformed employee; Mr. Dan Holmes, Summit Strategies.
CALL TO ORDER:
Ms. Pelot presided and called the meeting to order at 8:24 a.m.
APPROVAL OF REGULAR MEETING MINUTES FOR April 9, 2009.
Mr. York made a motion to approve the April 9, 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.
DISABILITY
APPLICATION FOR INJURY IN LINE OF DUTY: PLAN C – Exhibit 2
CHARTER SECTION 1390.11
Matthew Hollingshead-Cook, Police Dept. – Uniformed Option A-9
100% with reinstatement
Date of birth, January 6, 1979: 30 years of age
Total credited service: 7 years 9 months 9 days
$1,651.51 pension effective June 1, 2009.
Mr. Hutchens arrived at 8:35 a.m.
Disability In Line of Duty applicant, Mr. Matthew Hollingshead-Cook, was in attendance and spoke to the Board on his behalf to request an Injury In Line of Duty retirement benefit for an injury incurred in the line of duty on June 14, 2008, as a Police Officer. Mr. Hollingshead-Cook wanted the Board to be aware that he was taking the prescribed drug, Hydrocodone, which he felt enhanced his functional capacity evaluation performed by East Tennessee Spine and Sport on March 10, 2009. Mr. Hollingshead-Cook informed the Board that in a meeting between himself and Police Chief Owen, he was advised that he could not perform his duties as a Police Officer while taking the medication Hydrocodone, which Mr. Hollingshead-Cook proclaims he has been taking about 3-4 months and will need to continue taking indefinitely.
Attorney Gilbert recommended that more documentation on the permanency of Mr. Hollingshead-Cook’s injury and restrictions be addressed, as well as the physician’s plan for medication.
Motion: Mr. Hackney made a motion to defer this application to the June 11, 2009, meeting, pending documentation on medications and the permanency of Mr. Hollingshead-Cook’s physical restrictions.
Mr. Hackney later withdrew his motion and the following motion was made:
Motion: Mr. Hutchens made a motion to grant this application for an Injury In Line of Duty retirement benefit subject to a final review of the executive director and legal counsel and their concurrence. The motion was approved by a vote of 5-1. Ms. Pelot voted no.
CONTRACTS: None
ADMINISTRATIVE MATTERS:
Adams Street Partners 1st Capital Call
Mr. Cherry informed the Board that he had directed funds of $63,000 to Adams Street Partners, an initial payment per the Board’s commitment to the private equity, diversified funds manager, the Board hired in October 2008.
EXECUTIVE DIRECTOR COMMENTS: None
ATTORNEY COMMENTS:
Glenda Fields’ Litigation
Attorney Gilbert advised the Board that he was still awaiting a decision from Chancellor Weaver on the Glenda Fields’ litigation.
Plan G1 Members’ Transfer Update – Exhibit 3
Attorney Gilbert informed the Board about a conference call that had occurred between himself, General Government representatives, Stephen King and Valerie Coleman, and Attorney Al Holifield, regarding a potential claim of 31 city employees in Pension Plan G Option 1, which the Board discussed in April.
Investment Committee Policy – Exhibit 4
Attorney Gilbert distributed to the Board and articulated changes made to a three page draft of the Investment Committee Charter after which the Board decided to make four additional changes as follows:
1) Name Mr. Cherry as Chair by virtue of his office as Executive Director.
2) Use throughout in text where the word trustee is used – trustee/custodian
3) Require minutes of meetings
4) Insure that telephonic meetings may be held
Motion: Mr. Hackney made a motion to adopt the Investment Committee Charter presented today with the above amendments. Mr. Hutchens seconded the motion. The motion carried unanimously by the members present.
Committee Member Appointments
Motion: Mr. Coker made a motion to appoint Ms. Robin Shelton as Investment Committee member. Mr. Hutchens seconded the motion. The motion carried unanimously by the members present.
Motion: Mr. Hackney made a motion to appoint Ms. Barbara Pelot as Investment Committee member. Ms. Shelton seconded the motion. The motion carried unanimously by the members present.
Hiring Process Guidelines – Exhibit 5
Attorney Gilbert discussed with the Board the minimal changes made to the hiring process guidelines for Assistant Executive Director, which the Board originally discussed in April. The Board then decided to have Mr. Cherry draft a job description and convene a personnel committee meeting.
Gillis Barbee Appeal
Attorney Gilbert informed the Board that he would be ready to discuss Mr. Barbee’s appeal, to have service time reinstated, at June’s meeting.
Stone Energy Corporation Litigation – Exhibit 6, 7 & 8
Attorney Gilbert distributed to the Board an engagement letter and side letter (Exhibit 6) with the Board’s securities firm, Barroway Topaz Kessler Meltzer & Check, LLP, naming the Pension Board as lead plaintiff in the Stone Energy Corporation securities litigation, per the Board’s authorization at the April meeting. Mr. Gilbert also distributed a suggested motion (Exhibit 7), designating Mr. Cherry, Executive Director, to serve as the City of Knoxville Employee’s Pension System’s litigation and client representative and authorizing him to sign any necessary documents and certificates in support of the Pension System’s motion for appointment as lead plaintiff (Exhibit 8).
Motion: Mr. Coker made a motion that Michael A. Cherry, in his capacity as the Executive Director of the City of Knoxville Pension Board, be designated and appointed by this Board as the City of Knoxville Employees’ Pension System’s litigation and client representative in connection with the Stone Energy Corporation securities litigation authorized by this Board on April 9, 2009, and that as such officer and representative, the Executive Director be authorized to sign and deliver all pleadings, certifications and other documents determined by him to be necessary or convenient to initiate and prosecute such litigation on behalf of this Board and the City of Knoxville Employees’ Pension System, including without limitation the initial certification executed by the Executive Director on April 9, 2009 and the Supplemental Certification presented to this Board this date and recommended by the Pension Board’s general counsel, both of which shall be attached as exhibits to the minutes of today’s meeting today. Provided, however, the Executive Director shall refer to this Board for its consideration and approval any settlement offers for the subject litigation together with his recommendations on the same. The Executive Director may also consult with this Board’s general counsel as he determines necessary in discharging such duties and shall keep this Board informed of the status of the subject litigation and his actions relative thereto on a regular basis. Mr. Hackney 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.
Richard T. Bruno
Everette Lynn Butler
Justin E. Davis
James R. King
Joey Leonard
Eric McDowell
Paul F. Martelloni
Jeremy Mitchell
Nicholas W. Ogle
Kent J. Peterson
Jenny Ann Stuart
Michael C. Weth
Motion: Mr. Hackney made a motion to approve this application 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.
Jack R. Clowers, General Govt., Plan G2 – Vested
Taylor Davis, Police Dept., Plan C – Non-vested
Lynette K. Grissom, Police Dept., Plan C – Non-vested
Adam W. Smith, Police Dept., Plan C – Non-vested
Jonathan A. Starnes, General Govt., Plan G1 – Non-vested
Motion: Mr. Hutchens 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 RETIREMENT: PLAN G1 - NORMAL
CHARTER SECTION 1360.12
David W. Jones, General Government No Option
Date of birth, December 22, 1946: 62 years of age
Total credited service: 3 years 3 months 5 days
$64.16 (defined benefit) pension effective May 1, 2009.
One time payment of Supplemental Retirement Account.
Motion: Ms. Shelton made a motion to approve this application for Normal retirement. Mr. Hackney seconded the motion. The motion carried unanimously by the members present.
APPLICATION FOR RETIREMENT: PLAN G2 - NORMAL
CHARTER SECTION 1360.12
Llew Ellen Luttrell, General Government No Option
Date of birth, July 21, 1946: 62 years of age
Total credited service: 19 years 6 months 28 days
$549.71 pension effective May 1, 2009.
Motion: Mr. Hutchens made a motion to approve this application for Normal retirement. Mr. Coker seconded the motion. The motion carried unanimously by the members present.
APPROVAL OF INVOICES FOR PROFESSIONAL SERVICES:
State Street – Trustee (March 2009) $ 3,359.40
State Street – Custodial (March 2009) 8,443.58
AQR – Money Manger (1st Qtr – 2009) 43,735.00
Aberdeen Asset Man – (1st Qtr – 2009) 30,830.01
Calamos – Money Manager – (1st Qtr – 2009) 25,715.00
INTECH – Money Manager (1st Qtr – 2009) 4,883.57
Pinnacle Assoc. – Money Manager (1st Qtr – 2009) 31,974.00
STW – Money Manager (1st Qtr – 2009) 27,514.64
UBS – Money Manager (1st Qtr – 2009) 10,282.84
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. Coker made a motion to pay these invoices. Mr. Hackney seconded the motion. The motion carried unanimously by the members present.
INVESTMENT MATTERS:
Dan Holmes – Summit Strategies
Emerging Markets
Mr. Holmes gave a presentation to the Board on Summit Strategies Group, Emerging Markets Equity Manager Search. A copy of his report is on file in the Pension Office.
Mr. Hackney, upon the recommendation of Mr. Dan Holmes, made a motion to retain Acadian Asset Management, as the emerging markets fund manager subject to the review and recommendation of an investment management contract by Mr. Gilbert, and to authorize Mr. Cherry to sign such contract and proceed with all necessary administrative procedures to put into effect this investment manager agreement upon advice and consultation with Dan Holmes of Summit Strategies. Mr. Hutchens seconded the motion. The motion passed by a vote of 5-1. Mr. Coker voted no.
Investment Policy Index Revisions
Mr. Holmes informed the Board that the Policy Index shown in the addendum to the investment policy was incorrect. He reported Index Policy returns were misstated in the quarterly investment reports for 2007, 2008 and 1st Qtr. 2009. Mr. Holmes told the Board that he would prepare a letter regarding the necessary changes to be made. Attorney Gilbert advised the Board that he would review the letter as well.
Asset Liability Study
Motion: Mr. Hutchens made a motion calling for an initial meeting of the Investment Committee for the purpose of reviewing the Investment Policy and make changes to the target asset allocation plan. Mr. Hackney seconded the motion. The motion carried unanimously by the members present.
Performance Review Questionnaire – Exhibit 9
The Board had a discussion with Investment Consultant, Mr. Dan Holmes, regarding the questions the Board had asked relative to the performance of Summit Strategies over the last few years. Copies of the questions and Mr. Holmes’ response for Summit Strategies are on file in the Pension Office
1st Qtr 2009 Performance Report
Mr. Dan Holmes made a presentation of the 1st Quarter 2009, Performance Report. Copies of the reports are on file in the Pension Office.
OTHER: None
PUBLIC COMMENTS: None
ADJOURNMENT:
Motion: Mr. Hackney made a motion to adjourn the meeting at 12:23 p.m. Ms. Shelton seconded the motion. The motion carried unanimously by the member present.
__________________________
Chair
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Date
M:\Board\minutes\2009\may.doc