CITY OF KNOXVILLE PENSION BOARD
MINUTES
Thursday – June 14, 2007
10:15 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 10:15 a.m. on June 14, 2007.
Present were: Mayor Bill Haslam, 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. Peter Maron and Mr. Ken Sobolewski with Pinnacle Associates; Mr. Jan Parsons and Mr. Ross Hawkins with Pier Capital; Mr. Christopher Lane and Mr. Rhys Williams with Columbia Partners Investment Management.
CALL TO ORDER:
Mayor Haslam presided and called the meeting to order at 10:21 a.m.
APPROVAL OF REGULAR MEETING MINUTES FOR May 10, 2007:
Mr. Martin made a motion to approve the May 10, 2007, meeting minutes. Mr. Harrell 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:
HG & A Associates – June 30, 2007 Audit
Mr. Cherry advised the Board that he had received a proposal from HG&A Associates for the 2006/2007 audit, for a fee of $8,600.00.
Motion: Mr. Martin made a motion to accept the contract with HG&A Associates for the audit of the Pension System’s financial statement for the year ending June 30, 2007, for a fee of $8,600.00. Mr. Harrell seconded the motion. The motion carried unanimously by the members present.
Mr. King arrived at 10:22 a.m.
ADMINISTRATIVE MATTERS:
Financial Plan for 2007-2008- Exhibit 2
Mr. Cherry presented to the Board and discussed with them the financial plan for the fiscal year beginning July 1, 2007.
Motion: Mr. King made a motion to approve the financial plan for the current fiscal year beginning July 1, 2007, as presented by Mr. Cherry. Mr. Coker seconded the motion. The motion carried unanimously by the members present.
Knox County Valuation – Exhibit 3
Mr. Cherry presented the Board a copy of Knox County’s annual Valuation Summary as of January 1, 2007, which the Board reviewed. Mr. Cherry advised the Board that the county portion of the city Plan A benefits for certified teachers was being properly funded.
EXECUTIVE DIRECTOR COMMENTS: None
ATTORNEY COMMENTS:
Ethics Policy
Attorney Gilbert advised the Board that the Tennessee General Assembly passed a comprehensive governmental ethics law in 2006 that applied to all cities and their related boards and which required each city to adopt an ethics policy before June 30, 2007. Attorney Gilbert briefly described the effect of the City of Knoxville’s ethics policy and recommended that the Board also adopt that policy to signify their understanding of the same and to remove any doubt over whether the Board falls under the city’s policy or is able to adopt its own. It was also noted that each of the Pension Board members is also currently subject to the city’s ethics policy so its adoption by the Board imposed no additional requirements on the Pension Board members
Motion: Mr. Martin made a motion to adopt the City’s policy on ethics. Mr. King 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.
Carolyn Beech, General Government, G1 – Non-vested
Rhonda L. Bender, General Government, G1 – Vested
Douglas E. Berry, General Government, G1 – Vested
Maurice Dragg, General Government, G1 – Non-vested
Charles A. Ellis, Police Dept., Plan C – Non-vested
Cynthia T. Lawson, General Government, G1 – Vested
Jerry Ledbetter, General Government, G1 – Non-vested
Heather Leinbach, General Government, G1 – Non-vested
Michael F. Matise, Police Department, Plan C – Non-vested
Caroline E. McGaha, General Government, G1 – Non-vested
Jack E. Reed, General Government, G1 - Vested
Michael C. Weth, General Government, G1 – Non-vested
Motion: Mr. Coker 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.
DISABILITY
APPLICATION FOR INJURY IN LINE OF DUTY RETIREMENT: PLAN C
CHARTER SECTION: 1390.11
William C. Hamilton, Police Department – Uniformed No Option
Date of birth, September 19, 1974: 32 years of age
Total credited service: 6 years 10 months 18 days
Average monthly salary for 2 highest – 12 month periods, 2,780.89 x 50% =
$1,390.45 pension effective July 1, 2007.
Motion: Mr. Coker made a motion to approve this application for injury in line of duty pension, based on Dr. Michael Pool’s medical report and Mr. Cherry’s Disability Recommendation Report. Mr. Harrell seconded the motion. The motion carried unanimously by the members present.
APPLICATION FOR SURVIVOR’S BENEFIT: PLAN A
CHARTER SECTION 1360.24
Sue M. Cox, active General Government employee died in service May 28, 2007.
Ms. Cox’s statistics:
Date of birth, April 17, 1933: 74 years of age
Credited service: 12 years 9 months 13 days
Average base monthly salary for 2 years, $400.00 x 88% = $3.52
Average excess monthly earnings for 2 years, $1,722.50 x 1.76% = $30.32
making a total of $33.84 benefit per year of service. $33.84 x 12.78562 =
$432.67. Ms. Cox chose Option A-6 – 100% without reinstatement to Laura C. Weiss, daughter. $432.67 x .5724 =
$247.66 pension effective June 1, 2007, to Laura C. Weiss.
Motion: Mr. Martin made a motion to approve this application for a survivor’s benefit. Mr. Harrell seconded the motion. The motion carried unanimously by the members present.
APPLICATION FOR RETIREMENT: PLAN A
CHARTER SECTION 1360.12
Jacky L. Langston, Schools Non-Certified No Option
Date of birth, November 8, 1941: 65 years of age
Total credited service: 34 years 6 months (combined City & County)
Average base earnings for 3 years, $400.00 x 88% = $3.52
Average excess earnings for 3 years, $2,985.01 x 1.76% = $52.54
making a total of $56.06 benefit per year of service. $56.06 x 34.5000 =
$1,934.07 Total benefit
1,298.55 minus County benefit
$ 635.52 City pension effective May 1, 2007.
Motion: Mr. Martin made a motion to approve this application for retirement. Mr. Harrell seconded the motion. The motion carried unanimously by the members present.
APPLICATIONS FOR EARLY RETIREMENT: PLAN A
CHARTER SECTION 1360.17
Cynthia Corum, Schools Certified Option A-7
50% with reinstatement
Date of birth, October 15, 1951: 55 years of age
Total City credited service: 14 years
Total County credited service: 20 years
Total credited service: 34 years
Last date of employment with City: June 1987
Last date of employment with County: May 2007
Average base earnings for 4 years, $400.00 x 75% = $3.00
Average excess earnings for 4 years, $1,221.25 x 1.50% = $18.32
making a total of $21.32 benefit per year of service. $21.32 x 14 =
$298.48 x ER Factor .5726 = $170.91. Ms. Corum chose Option A-7 – 50% without reinstatement to Donald E. Corum, spouse. $170.91 x .9201 =
$157.25 pension effective June 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 $1,044.32.
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 payable under Option A-7. Mr. Harrell seconded the motion. The motion carried unanimously by the members present.
Larry W. Holt, Schools Certified No Option
Date of birth, April 24, 1952: 55 years of age
Total City credited service: 12 years
Total County credited service: 20 years
Total credited service: 32 years
Last date of employment with City: June 1987
Last date of employment with County: May 2007
Average base earnings for 4 years, $400.00 x .75% = $3.00
Average excess earnings for 4 years, $1,168.45 x 1.50% = $17.53
making a total of $20.53 benefit per year of service. $20.53 x 12 =
$246.36 x ER Factor .5245 =
$129.22 pension effective June 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 $1,007.38.
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. Harrell seconded the motion. The motion carried unanimously by the members present.
Jennie J. McCook, Schools Certified Option A-6
100% without reinstatement
Date of birth, October 31, 1947: 59 years of age
Total City credited service: 17 years 5 months
Total County credited service: 20 years
Total credited service: 37 years 5 months
Last date of employment with City: June 1987
Last date of employment with County: May 2007
Average base earnings for 4 years, $400.00 x 75% = $3.00
Average excess earnings for 4 years, $1,618.67 x 1.50% = $24.28
making a total of $27.28 benefit per year of service. $27.28 x 17.41667 =
$475.13 x ER Factor .8250 = $391.98. Ms. McCook chose Option A-6 – 100% without reinstatement to John E. McCook, spouse. $391.98 x .8573 =
$336.04 pension effective June 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 $1,725.17.
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 payable under Option A-6. Mr. Harrell seconded the motion. The motion carried unanimously by the members present.
Carolyn L. Rogers, Schools Certified No Option
Date of birth, January 28, 1951: 56 years of age
Total City credited service: 10 years 8 months
Total County credited service: 20 years
Total credited service: 30 years 8 months
Last date of employment with City: June 1987
Last date of employment with County: May 2007
Average base earnings for 4 years, $400.00 x .75% = $3.00
Average excess earnings for 4 years, $1,189.25 x 1.50% = $17.84
making a total of $20.84 benefit per year of service. $20.84 x 10.66667 =
$222.29 x ER Factor .5726 =
$127.28 pension effective June 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 $1,092.74.
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. Harrell seconded the motion. The motion carried unanimously by the members present.
Shirley G. Selby, Schools Certified No Option
Date of birth, November 3, 1951: 55 years of age
Total City credited service: 11 years 6 months
Total County credited service: 20 years
Total credited service: 31 years 6 months
Last date of employment with City: June 1987
Last date of employment with County: May 2007
Average base earnings for 4 years, $400.00 x .75% = $3.00
Average excess earnings for 4 years, $902.24 x 1.50% = $13.53
making a total of $16.53 benefit per year of service. $16.53 x 11.500 =
$190.10 x ER Factor .5726 =
$108.85 pension effective June 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 $988.42.
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. Harrell seconded the motion. The motion carried unanimously by the members present.
Jimmy D. Slone, Schools Certified Option A-6
100% without reinstatement
Date of birth, September 10, 1947: 59 years of age
Total City credited service: 16 years
Total County credited service: 20 years
Total credited service: 36 years
Last date of employment with City: June 1987
Last date of employment with County: May 2007
Average base earnings for 4 years, $400.00 x 75% = $3.00
Average excess earnings for 4 years, $1,502.09 x 1.50% = $22.53
making a total of $25.53 benefit per year of service. $25.53 x 16 =
$408.48 x ER Factor .8250 = $337.00. Mr. Slone chose Option A-6 – 100% without reinstatement to Norma E. Slone, spouse. $337.00 x .8400 =
$283.08 pension effective June 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 $1,512.60.
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 payable under Option A-6. Mr. Harrell seconded the motion. The motion carried unanimously by the members present.
Margaret M. Stewart, Schools Certified No Option
Date of birth, October 29, 1949: 57 years of age
Total City credited service: 15 years
Total County credited service: 20 years
Total credited service: 35 years
Last date of employment with City: June 1987
Last date of employment with County: May 2007
Average base earnings for 4 years, $400.00 x .75% = $3.00
Average excess earnings for 4 years, $1,203.90 x 1.50% = $18.06
making a total of $21.06 benefit per year of service. $21.06 x 15 =
$315.90 x ER Factor .6853 =
$216.49 pension effective June 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 $1,316.09.
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. Harrell seconded the motion. The motion carried unanimously by the members present.
Gail Winter, Schools Certified Option A-6
100% without reinstatement
Date of birth, June 19, 1951: 55 years of age
Total City credited service: 10 years 2 months
Total County credited service: 20 years
Total credited service: 30 years 2 months
Last date of employment with City: June 1987
Last date of employment with County: May 2007
Average base earnings for 4 years, $400.00 x 75% = $3.00
Average excess earnings for 4 years, $1,013.10 x 1.50% = $15.20
making a total of $18.20 benefit per year of service. $18.20 x 10.16667 =
$185.03 x ER Factor .5726 = $105.95. Ms. Winter chose Option A-6 – 100% without reinstatement to Robert J. Winter, spouse. $105.95 x .8874 =
$94.02 pension effective June 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 $875.41.
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 payable under Option A-6. Mr. Harrell seconded the motion. The motion carried unanimously by the members present.
APPLICATION FOR REINSTATEMENT OF PRIOR SERVICE:
Robin Bryant, General Government – Plan G1
May 23, 2005 – December 16, 2005
$1,647.18
Motion: Mr. Coker made a motion to approve this application for reinstatement of the prior service period of May 23, 2005 – December 16, 2005, for the amount of $1,647.18. Mr. Martin seconded the motion. The motion carried unanimously by the members present.
APPROVAL OF INVOICES FOR PROFESSIONAL SERVICES:
Bryan, Pendleton, Swats & McAllister – Actuary (April 2007) $ 1,819.00
Kennerly,Montgomery & Finley – Attorney (General –April 07) 1,675.00
Kennerly,Montgomery & Finley – Attorney (General –May 07) 999.50
Kennerly,Montgomery & Finley – Attorney (G. Fields Lit. – May 07) 414.00
Kennerly, Montgomery & Finley – Attorney (Global Crossing Lit.) 7.16
State Street – Trustee (February 2007) 3,215.70
State Street Global – money manager (1st Qtr. 2007) 2,933.00
Summit Strategies – Investment consultant (2nd Qtr. 2007) 31,250.00
Aberdeen Asset Man. – money manager (1st Qtr. 2007) 40,614.74
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. Martin made a motion to pay these invoices. Mr. Harrell seconded the motion. The motion carried unanimously by the members present.
Ms. Pelot arrived at 10:37 a.m.
INVESTMENT MATTERS:
Small Cap Growth Equity Manager Interviews
Peter Maron and Ken Sobolewski with Pinnacle Associates made a presentation to the Pension Board regarding their firm’s small cap value equity management capability and performance. A copy of their presentation material is on file at the Pension Office.
Mayor Haslam left the meeting at 11:30 a.m.
Jan Parsons & Ross Hawkins with Pier Capital made a presentation to the Pension Board regarding their firm’s small cap value equity management capability and performance. A copy of their presentation material is on file at the Pension Office.
Christopher Lane & Rhys Williams with Columbia Partners Investment Management made a presentation to the Pension Board regarding their firm’s small cap value equity management capability and performance. A copy of their presentation material is on file at the Pension Office.
The Pension Board in consultation with Dan Holmes of Summit Strategies discussed the three firms’ presentations and capabilities.
Motion: Mr. Martin made a motion to engage, upon the recommendation of Summit Strategies, Pinnacle Associates, LTD, as a new small cap value equity manager. The engagement is subject to an investment management contract being reviewed and recommended by the Board’s attorney, Mr. Bud Gilbert. The Executive Director, with the assistance of Mr. Holmes and Mr. Gilbert, is also authorized and directed to sign the contract on behalf of the Pension Board with funding to be determined later by rebalancing the portfolio. Ms. Pelot seconded the motion. The motion carried unanimously by the members present.
OTHER: None
PUBLIC COMMENTS: None
ADJOURNMENT:
There being no further business, the following motion was made:
Mr. Harrell made a motion to adjourn the meeting at 2:10 p.m. Mr. Coker seconded the motion. The motion carried unanimously by the members present.
______________________
Chair
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Date
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