CITY OF KNOXVILLE PENSION BOARD
MINUTES
Thursday – June 12, 2008
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 June 12, 2008.
Present were: Mayor Bill Haslam, Mr. Greg Coker, Mr. Joe Hackney, Mr. Buddy Harrell, Ms. Barbara Pelot, Ms. Robin Shelton, Mr. Jim York, Mr. Michael Cherry and Attorney Bud Gilbert.
Also present: Lt. Cheri Matlock, Knoxville Police Department
CALL TO ORDER:
Ms. Pelot presided and called the meeting to order at 8:18 a.m.
APPROVAL OF REGULAR MEETING MINUTES FOR May 8, 2008
Motion: Mr. York made a motion to approve the May 8, 2008, 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.
INVESTMENT MATTERS:
Mayor Haslam arrived at 8:22 a.m. and presided
Dan Holmes – Summit Strategies - Asset Liability Study – Exhibit 2
Investment consultant, Mr.Dan Holmes, with Summit Strategies gave a presentation to the Board via teleconference, on an Asset Liability Study. Copies of his presentation material are on file in the Pension office.
Motion: Ms. Pelot made a motion authorizing Mr. Holmes to:
1. Make educational presentations to the Board at the July 10, 2008, meeting on private investments and portable alpha.
2. Bring search booklets for emerging markets and international small cap in the publicly traded area.
Mr. Hackney seconded the motion. The motion carried unanimously by the members present.
CONTRACTS:
Pugh & Co. – June 30, 2008 Audit
Mr. Cherry advised the Board that he had received a proposal from Pugh & Co. for the 2007/2008 audit, for a fee in the range of $16,000 - $20,000.
Motion: Ms. Shelton 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, 2008 for an amount not to exceed the fee range quoted. Mr. Harrell seconded the motion. The motion carried unanimously by the members present.
ADMINISTRATIVE MATTERS:
3rd Quarter 2008 – Pension Board Meeting Dates
Thursday, July 10, 2008 – 8:15 a.m.
Thursday, August 14, 2008 – 8:15 a.m.
Thursday, September 11, 2008 – 8:15 a.m.
It was the consensus of the Board to accept the Pension Board meeting schedule for the third quarter 2008.
EXECUTIVE DIRECTOR COMMENTS:
Employee Compensation Study
Mr. Cherry discussed with the Board the impact of the recent compensation study on the positions in the Pension Board office.
ATTORNEY COMMENTS:
Glenda Field’s Litigation
Attorney Gilbert updated the Board on the status of the Glenda Field’s litigation.
Tax Reporting
Attorney Gilbert informed the Board on requests from a Plan C, injury in line of duty pension recipient, regarding the change in reporting the taxability of their pensions. Attorney Gilbert advised the Board that his firm would be doing research on the matter and report back to the Board.
Charter Amendment List
Attorney Gilbert advised the Board that this afternoon, at the close of the business day, was the deadline for any proposed pension charter amendments to be submitted to the Board for the November referendum and that he and Mr. Cherry did not expect to receive any by the end of the day. He also noted that today’s meeting was the date under the Pension Board’s rules that a list of any proposed charter amendments from members of the Pension Board was to be distributed to the full Board in preparation for a possible November referendum.
Attorney Gilbert noted that no new charter amendment proposals had been added to the list since its consideration by the Board for the August referendum, which resulted in no action by the Board. He also indicated that if any Board member desired, the August referendum list could be redistributed to the Board at its next meeting for additional consideration in connection with a November referendum.
ENROLLMENTS:
The following General Government employees have filed applications to become members of the Plan G1 pension system.
Dewayne E. Cole
Brian Evans
Dallas A. Hord
Alan R. Jacobik
John E. Martin
James R. Moore
Christopher R. Stapor
Jonathan A. Starnes
Perry L. Wilson
Motion: Mr. Harrell 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.
Allen D. Foust, General Government, G1 – Non-vested
Kelly S. Harbin, General Government, G1 – Non-vested
Michael Hinricher, General Government, G1 – Non-vested
Aaron McPeters, Police Dept., Plan C – Non-vested
Vincent E. Turner, General Government, G1 – Non-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.
DISABILITY - Exhibit 3
APPLICATION FOR INJURY IN LINE OF DUTY RETIREMENT: PLAN C - (WHITE TAB)
CHARTER SECTION 1390.11
Robert T. Perdue, Police Department – Uniformed Option A-9
100 % with reinstatement
Date of birth, August 5, 1973: 34 years of age
Total credited service: 9 years 2 months 4 days
Average monthly salary for 2 highest – 12 month periods, $3,223.08 x 50% =
$1,611.54. Mr. Perdue chose Option A-9 – 100% with reinstatement to Kimberly Shea Perdue, spouse. $1,611.54 x .9712 =
$1,565.13 pension effective March 1, 2008.
Motion: Ms. Pelot made a motion to approve this application for injury in line of duty pension, based on Dr. Jerry Embry’s medical report and Mr. Cherry’s Disability Recommendation Report. Mr. Coker seconded the motion. The motion carried unanimously by the members present.
APPLICATION FOR RETIREMENT: PLAN A
CHARTER SECTION 1360.12
Linda A. Hackney, Schools Non-Certified No Option
Date of birth, May 25, 1943: 65 years of age
Total credited service: 31 years 8 months
Average base earnings for 3 years, $400.00 x 88% = $3.52
Average excess earnings for 3 years, $847.01 x 1.76 = $14.91
making a total of $18.43 benefit per year of service. $18.43 x 31.6667
$583.62 Total benefit
421.30 minus County benefit
$162.32 City pension effective June 1, 2008.
Motion: Mr. Harrell made a motion to approve this application for normal retirement. Mr. Coker seconded the motion. The motion carried unanimously by the members present.
APPLICATION FOR EARLY RETIREMENT: PLAN A
CHARTER SECTION 1360.17
Delene K. Cooper, Schools Certified No Option
Date of birth, March 26, 1953: 55 years of age
Total City credited service: 11 years 8 months
Total County credited service: 21 years
Total credited service: 32 years 8 months
Last date of employment with City: June 1987
Last date of employment with County: May 2008
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 11.6667 =
$219.57 x ER Factor .5245 =
$115.16 pension effective June 1, 2008.
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 $994.43.
25 years required for Early retirement. Supreme Court ruling entitles retiree to combine City & County credited service.
Motion: Ms. Pelot made a motion to approve this application for Early Retirement. Mr. Harrell seconded the motion. The motion carried unanimously by the members present.
Anjel Griffey, Schools Certified No Option
Date of birth, June 14, 1952: 55 years of age
Total City credited service: 11 years 8 months
Total County credited service: 21 years
Total credited service: 32 years 8 months
Last date of employment with City: June 1987
Last date of employment with County: May 2008
Average base earnings for 4 years, $400.00 x 75% = $3.00
Average excess earnings for 4 years, $1,052.52 x 1.50% = $15.79
making a total of $18.79 benefit per year of service. $18.79 x 11.6667 =
$219.22 x ER Factor .5726 =
$125.53 pension effective June 1, 2008.
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 $1,043.74.
25 years required for Early retirement. Supreme Court ruling entitles retiree to combine City & County credited service.
Motion: Ms. Pelot made a motion to approve this application for Early Retirement. Mr. Harrell seconded the motion. The motion carried unanimously by the members present.
Mary B. Humphrey, Schools Certified No Option
Date of birth, July 23, 1947: 60 years of age
Total City credited service: 16 years 5 months
Total County credited service: 21 years
Total credited service: 37 years 5 months
Last date of employment with City: June 1987
Last date of employment with County: May 2008
Average base earnings for 4 years, $400.00 x 75% = $3.00
Average excess earnings for 4 years, $1,246.95 x 1.50% = $18.70
making a total of $21.70 benefit per year of service. $21.70 x 16.4167 =
$356.24 x ER Factor .9075 =
$323.29 pension effective June 1, 2008.
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 $2,158.22.
25 years required for Early retirement. Supreme Court ruling entitles retiree to combine City & County credited service.
Motion: Ms. Pelot made a motion to approve this application for Early Retirement. Mr. Harrell seconded the motion. The motion carried unanimously by the members present.
Beverley Kuhlman, Schools Certified No Option
Date of birth, March 9, 1953: 55 years of age
Total City credited service: 9 years 4 months
Total County credited service: 21 years
Total credited service: 30 years 4 months
Last date of employment with City: June 1987
Last date of employment with County: May 2008
Average base earnings for 4 years, $400.00 x 75% = $3.00
Average excess earnings for 4 years, $981.30 x 1.50% = $14.72
making a total of $17.72 benefit per year of service. $17.72 x 9.3333 =
$165.39 x ER Factor .5245 =
$86.75 pension effective June 1, 2008.
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 $986.09.
25 years required for Early retirement. Supreme Court ruling entitles retiree to combine City & County credited service.
Motion: Ms. Pelot made a motion to approve this application for Early Retirement. Mr. Harrell seconded the motion. The motion carried unanimously by the members present.
Martha Ann Masterson, Schools Certified No Option
Date of birth, September 30, 1948: 59 years of age
Total City credited service: 12 years 7 months
Total County credited service: 21 years
Total credited service: 33 years 7 months
Last date of employment with City: June 1987
Last date of employment with County: May 2008
Average base earnings for 4 years, $400.00 x 75% = $3.00
Average excess earnings for 4 years, $1,172.76 x 1.50% = $17.59
making a total of $20.59 benefit per year of service. $20.59 x 12.5833 =
$259.09 x ER Factor .8250 =
$213.75 pension effective June 1, 2008.
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 $1,808.66.
25 years required for Early retirement. Supreme Court ruling entitles retiree to combine City & County credited service.
Motion: Ms. Pelot made a motion to approve this application for Early Retirement. Mr. Harrell seconded the motion. The motion carried unanimously by the members present.
Sandra Mynatt, Schools Certified Option A-7
50% with reinstatement
Date of birth, May 17, 1951: 57 years of age
Total City credited service: 11 years 8 months
Total County credited service: 21 years
Total credited service: 32 years 8 months
Last date of employment with City: June 1987
Last date of employment with County: May 2008
Average base earnings for 4 years, $400.00 x 75% = $3.00
Average excess earnings for 4 years, $1,085.47x 1.50% = $16.28
making a total of $19.28 benefit per year of service. $19.28 x 11.6667 =
$224.93 x ER Factor .6260 = $140.81. Ms. Mynatt chose Option A-7 – 50% with reinstatement to James R. Mynatt, Jr., spouse. $140.81 x .9209 =
$129.67 pension effective June 1, 2008.
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 $1,140.87.
25 years required for Early retirement. Supreme Court ruling entitles retiree to combine City & County credited service.
Motion: Ms. Pelot 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.
John E. Ross, Schools Certified No Option
Date of birth, August 9, 1952: 55 years of age
Total City credited service: 12 years
Total County credited service: 21 years
Total credited service: 33 years
Last date of employment with City: June 1987
Last date of employment with County: May 2008
Average base earnings for 4 years, $400.00 x 75% = $3.00
Average excess earnings for 4 years, $1,054.60x 1.50% = $15.82
making a total of $18.82 benefit per year of service. $18.82 x 12 =
$225.84 x ER Factor .5726 =
$129.32 pension effective June 1, 2008.
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 $1,052.31.
25 years required for Early retirement. Supreme Court ruling entitles retiree to combine City & County credited service.
Motion: Ms. Pelot made a motion to approve this application for Early Retirement. Mr. Harrell seconded the motion. The motion carried unanimously by the members present.
Marion R. Smith, Schools Certified Option A-9
100% with reinstatement
Date of birth, June 8, 1947: 61 years of age
Total City credited service: 13 years
Total County credited service: 21 years
Total credited service: 34 years
Last date of employment with City: June 1987
Last date of employment with County: May 2008
Average base earnings for 4 years, $400.00 x 75% = $3.00
Average excess earnings for 4 years, $1,486.27x 1.50% = $22.29
making a total of $25.29 benefit per year of service. $25.29 x 13 =
$328.77 x ER Factor .9075 = $298.36. Mr. Smith chose Option A-9 – 100% with reinstatement to Grace B. Smith, spouse. $298.36 x .7966 =
$237.67 pension effective June 1, 2008.
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 $1,693.25.
25 years required for Early retirement. Supreme Court ruling entitles retiree to combine City & County credited service.
Motion: Ms. Pelot made a motion to approve this application for Early Retirement payable under Option A-9. Mr. Harrell seconded the motion. The motion carried unanimously by the members present.
Leonard E. Wallace, Schools Certified No Option
Date of birth, August 27, 1947: 60 years of age
Total City credited service: 18 years
Total County credited service: 21 years
Total credited service: 39 years
Last date of employment with City: June 1987
Last date of employment with County: May 2008
Average base earnings for 4 years, $400.00 x 75% = $3.00
Average excess earnings for 4 years, $1,288.03 x 1.50% = $19.32
making a total of $22.32 benefit per year of service. $22.32 x 18 =
$401.76 x ER Factor .9075 =
$364.60 pension effective June 1, 2008.
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 $2,113.64.
25 years required for Early retirement. Supreme Court ruling entitles retiree to combine City & County credited service.
Motion: Ms. Pelot made a motion to approve this application for Early Retirement. Mr. Harrell seconded the motion. The motion carried unanimously by the members present.
APPLICATION FOR RETIREMENT: PLAN G1 – NORMAL
CHARTER SECTION 1360.12
Raymond B. Snyder, General Government Option C
Cash Refund
Date of birth, July 21, 1938: 69 years of age
Total credited service: 5 years 8 months 20 days
Average monthly salary for 2 highest 12 month periods, $3,829.85 x .0135 =
$51.70 x 5.72146 = $295.80. Mr. Snyder chose Option C – Cash Refund to Ann B. Snyder, spouse. $295.80 x .896 = $265.04. Mr. Snyder chose to have the supplemental retirement account applicable in Plan G1 converted to an additional lifetime monthly annuity. Mr. Snyder’s account of balance of $10,121.45 converted to an additional annuity of $99.56 per month. $265.04 (defined benefit) + $99.56 =
$364.60 pension effective June 1, 2008.
Motion: Mr. York made a motion to approve this application for Normal Retirement payable under the Cash Refund Option. Mr. Harrell seconded the motion. The motion carried unanimously by the members present.
APPLICATION FOR DEFERRED RETIREMENT: PLAN G1
CHARTER SECTION 1360.28
Joseph L. Vann, General Government No Option
Date of birth, May 28, 1946: 62 years of age
Total credited service: 6 years 8 months
Plan A benefit: Average base salary for 2 highest 12 month periods, $400.00 x .0081 = $3.24 x 1.50 = $4.86 plus average excess salary for 2 highest 12 month periods, $1,239.06 x .0162 = $20.07 x 1.50 = $30.10. Total A benefit =
$34.96
Plan G1 benefit: Average monthly salary for 2 highest 12 month periods, $1,639.06 x
.0115 = $18.85 x 5.166667 = $97.39
Total defined benefit: $132.35
Mr. Vann chose to have the supplemental retirement account applicable in Plan G1 converted to an additional lifetime monthly annuity. Mr. Vann’s account of balance of $7,862.48 converted to an additional annuity of $63.99 per month. $132.35 (defined benefit) + $63.99 =
$196.34 pension effective June 1, 2008.
Motion: Ms. Pelot 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 PARTICIPATION IN THE DELAYED RETIREMENT OPTION PROGRAM (DROP): PURSUANT TO CHARTER SECTION 1390.22 – PLAN C.
The following employees have 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 L. Key, Sr., Fire Department Uniformed Option A-4
50% without reinstatement
Date of birth, March 2, 1948: 60 years of age
Total credited service: 32 years 7 months 5 days
Average monthly salary for 2 highest 12 month periods, $8,413.59 x.025 =
$210.34 x 30 = $6,310.20. Chief Key chose Option A-4 – 50% without reinstatement to Evelyn June Key, spouse. There is no reduction for A-4 – 50% Joint & Survivor option to a spouse in Plan C.
$6,310.20 pension effective June 1, 2008.
DROP complete May 31, 2010.
Motion: Mr. Hackney made a motion to approve this application for DROP retirement payable under Option A-4. Ms. Pelot seconded the motion. The motion carried unanimously by the members present.
APPLICATION FOR PARTICIPATION IN THE DELAYED RETIREMENT OPTION PROGRAM (DROP): PURSUANT TO CHARTER SECTION 1371.8 – PLAN G.
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.
Sue Ellen Ballard, General Government – Plan G2 No Option
Date of birth, May 31, 1943: 65 years of age
Total credited service: 16 years 3 months 27 days
Average monthly salary for 2 highest 12 month periods, $2,083.11 x .021 =
$43.75 x 16.32397 =
$714.17 pension effective June 1, 2008.
DROP complete May 31, 2010.
Motion: Mr. Harrell made a motion to approve this application for DROP retirement. Ms. Pelot seconded the motion. The motion carried unanimously by the members present.
APPROVAL OF INVOICES FOR PROFESSIONAL SERVICES:
Bryan, Pendleton, Swats & McAllister – Actuary (April 2008) $ 8,445.00
Kennerly,Montgomery & Finley – Attorney (General – April 08) 1,831.50
Kennerly,Montgomery & Finley – Attorney (G. Fields – April 08) 100.00 State Street – Custodial (April 2008) 8,441.69
AQR – Money Manager (1st Qtr. 2008) 101,305.00
State Street Global – Money Manager (1st Qtr. 2008) 1,420.88
Summit Strategies – Investment Consultant (2nd Qtr. 2008) 31,250.00
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. Harrell made a motion to approve payment for these bills. Mr. Hackney seconded the motion. The motion carried unanimously by the members present.
OTHER:
Personnel Committee
Mr. Coker gave a report to the Board on the personnel committee meeting regarding bonuses for Pension Board staff and the executive director’s salary. The Personnel Committee noted that Mr. Cherry’s recommended that both Pension Board staff employees receive a merit bonus in line with that proposed for employees of the City’s Finance Department and that both employees receive the highest (Step 3) merit bonus. Mr. Cherry and the Personnel Committee also recommended that the City’s Civil Service Department be asked to reevaluate the salary of the Pension Supervision position since they did not believe if properly reflected the duties and responsibilities of that position.
Mr. Coker made a motion to accept the Personnel Committee’s report and recommendation and to approve Mr. Cherry’s recommendation for staff bonuses. Ms. Pelot seconded the motion. The motion carried unanimously by the members present.
The Personnel Committee then advised the Pension Board on its review of the Executive Director’s salary and noted information gleaned from two recent salary surveys. The Personnel Committee recommended a six percent (6%) increase to the Executive Director’s salary effective July 1, 2008.
Mr. Coker made a motion to accept the Personnel Committee’s recommendation relative to the Executive Director’s annual salary. Ms. Pelot seconded the motion. The motion carried unanimously by the members present.
Mayor Haslam left the meeting at 9:35 a.m.
PUBLIC COMMENTS: None
ADJOURNMENT:
There being no further business, the following motion was made:
Ms. Shelton made a motion to adjourn the meeting at 9:45 a.m. Mr. Coker seconded the motion. The motion carried unanimously by the members present.
_______________________
Chair
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Date
M:\Board\minutes\2008\june.doc