CITY OF KNOXVILLE PENSION BOARD

MINUTES

Thursday – July 10, 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 July 10, 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:  Mr. Dan Holmes, Summit Strategies.

 

CALL TO ORDER:

 

            Ms. Pelot presided and called the meeting to order at 8:16 a.m.

 

APPROVAL OF REGULAR MEETING MINUTES FOR June 12, 2008.

 

Motion:  Ms. Shelton made a motion to approve the June 12, 2008, 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.

 

INVESTMENT MATTERS:

 

            Securities Lending

 

Mr. Cherry advised the Board that revenues from securities lending, administered through State Street, had yielded a return of $394,000 through May. Mr. Cherry also advised the Board that State Street had requested the investment policy restriction of 30% to the market value of the fund’s assets be removed to enhance the fund’s potential earnings from this program.

 

Mr. Holmes then gave an information session to the Board on securities lending and then recommended that the Board lift the restriction of 30% for securities lending.  The Board requested further information of Mr. Cherry, Mr. Gilbert and Mr. Holmes prior to taking any action on the request

 

Mayor Haslam arrived at 8:40 a.m. and presided.

 

Mr. Cherry advised the Board that he would obtain some additional information from State Street and Attorney Gilbert would also conduct research on the security lending limitation of other plans such as the State Consolidated Retirement System.

CONTRACTS:  None

 

ADMINISTRATIVE MATTERS:

 

            Financial Plan 2008 – 2009 – Exhibit 2

 

Mr. Cherry presented to the Board and discussed with them the financial plan for the fiscal year beginning July 1, 2008.

 

Motion:  Mr. Harrell made a motion to approve the financial plan for the current fiscal year beginning July 1, 2008, as presented by Mr. Cherry.  Mr. Coker seconded the motion.  The motion carried unanimously by the members present.

 

EXECUTIVE DIRECTOR COMMENTS:  None

 

ATTORNEY COMMENTS:

 

            Glenda Field’s Litigation

 

Attorney Gilbert informed the Board that the Glenda Field’s litigation was scheduled to be heard before a judge on November 25, 2008.

 

ENROLLMENTS:

 

The following General Government employees have filed applications to become members of the Plan G1 pension system.

                       

                        Jeannine Hager

                        Dustin Hinshaw

                        David D. Massey

                        Samuel M. Richmond

                        Calvin R. Whitaker

           

Motion:  Ms. Pelot made a motion to approve these applications for enrollment in the Plan G1 pension system.  Ms. Shelton seconded the motion.  The motion carried unanimously by the members present.

 

The following Fire Department employees have filed applications to become members of the Plan C pension system.

 

            Malcom W. Allen

            Erica L. Behning

            Robert L. Cheatham

            Terra E. Clotfelter

            Adam W. Edger

            Eric J. Gass

            Michael J. Hill

            Shannon R. Johnson

            Joshua O. Jordan

            Amanda Lindwall

            Thomas M. Manning

            Robert C. Masker

            John W. Miller

            Rosemary Nichols

            Morgan E. Parrott

            Brandon P. Phillips

            Timothy A. Pittman

            Jemina M. Plante

            Ryan S. Reid

            Don F. Richardson II

            Gregory K. Sauceman

            Andrew L. Smith

            Matthew P. Speights

            Michael R. Stair

            John A. Stoehr (transferring from General Government)

            Cory L. Ward

            Tyler L. Werts

            Timothy A. Woods (transferring from General Government)

           

Motion:  Mr. Hackney made a motion to approve these applications for enrollment in the Plan C 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.

                       

Lauren S. Geddings, General Government, G1 – Non-vested

 

Motion:  Mr. Harrell made a motion to approve this application for withdrawal of employee contributions.  Ms. Pelot seconded the motion.  The motion carried unanimously by the members present.

 

DISABILITY

 

APPLICATION FOR INJURY IN LINE OF DUTY:  PLAN G1 – (ORANGE TAB)

CHARTER SECTION 1360.22

 

Terry D. Gilland, General Government                                Option C – Cash Refund

            Date of birth, October 8, 1964:  43 years of age*

            Total credited service:  23 years 11 months 13 days**

            *Computed as of 62 years of age

            **Computed as if worked until age 62

$555.60 pension effective January 1, 2008 (includes supplemental retirement account)

 

Motion:  Ms. Pelot made a motion to defer this disability to the August meeting pending further evaluation by Dr. Jeffrey Uzzle with Tennessee Orthopaedic.  Mr. Hackney seconded the motion.  The motion carried unanimously by the members present.

 

APPLICATION FOR EARLY RETIREMENT:  PLAN A

CHARTER SECTION 1360.17

 

            Rose Mary Thompson, Schools Certified                                                  No Option

            Date of birth, August 18, 1950:  57 years of age

            Total City credited service:  14 years 4 months

            Total County credited service:  21 years

            Total credited service:  35 years 4 months

            Last date of employment with City:  June 1987

            Last date of employment with County:  June 2008

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

            Average excess earnings for 4 years, $1,165.35 x 1.50% = $17.48

            making a total of $20.48 benefit per year of service.  $20.48 x 14.3333 =

            $293.55 x ER Factor .6853 =

            $201.17 pension effective July 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 $1,584.80.

 

25 years required for Early retirement.  Supreme Court ruling entitles retiree to combine City & County credited service.

 

Motion:  Ms. Shelton 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 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.

 

            Robert L. Evans, General Government – Plan G2            Option A-6

                                                                                                            100% without reinstatement

            Date of birth, May 9, 1944:  64 years of age

            Total credited service:  34 years 8 months 24 days

            Average monthly salary for 2 highest 12 month periods, $2,344.51 x .021 =

$49.23 x 34.73242 = $1,709.88.  Mr. Evans chose Option A-6 – 100% without reinstatement to Timothy W. Hickey.  $1,709.88 x .7218 =

            $1,234.19 pension effective July 1, 2008.

            DROP complete June 30, 2010.

 

Motion:  Mr. Harrell made a motion to approve this application for DROP retirement payable under Option A-6.  Ms. Pelot seconded the motion.  The motion carried unanimously by the members present.

 

APPROVAL OF INVOICES FOR PROFESSIONAL SERVICES:    

           

Bryan, Pendleton, Swats & McAllister – Actuary (May 2008)        $   9,488.00

Kennerly,Montgomery & Finley – Attorney (General – May 08)         3,727.00

Kennerly,Montgomery & Finley – Attorney (G. Fields – May 08)           540.00

State Street – Custodial (May 2008)                                                          8,433.30                     UBS Global – Money Manager (1st Qtr. 2008)                                     24,103.68

                                                                                       

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:  Ms. Pelot made a motion to approve payment for these bills.  Mr. Coker seconded the motion.  The motion carried unanimously by the members present.

 

Dan Holmes – Summit Strategies

 

2Q 2008 Performance Report

 

Mr. Holmes made a presentation of the 2nd Quarter, 2008 Performance Report.  Copies of his report are on file in the Pension Office.

           

Portable Alpha

 

Mayor Haslam left the meeting at 10:02 a.m.

 

Mr. Holmes made a presentation on Portable Alpha portfolio managers. 

 

Motion:  Ms. Shelton, upon the recommendation of Mr. Dan Holmes, made a motion to retain Union Bancaire Privee and Common Sense to manage portable alpha portfolios subject to the review and recommendation of an investment management contract by Mr. Gilbert.  Mr. Cherry was authorized 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. Hackney seconded the motion.  The motion carried unanimously by the members present.

 

International Small Cap Equities

 

Mr. Holmes made a presentation on International Small Cap Equities.

 

Motion:  Mr. Coker, upon the recommendation of Mr. Dan Holmes, made a motion to retain William Blair as the fund’s international small cap manager subject to the review and recommendation of an investment management contract by Mr. Gilbert. Mr. Cherry was authorized 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. Hackney seconded the motion.  The motion carried unanimously by the members present.

 

International Emerging Markets

 

Mr. Holmes made a presentation on International Emerging Markets

 

Motion:  Ms. Shelton, upon the recommendation of Mr. Dan Holmes, made a motion to retain Batterymarch as the fund’s international emerging markets manager subject to the review and recommendation of an investment management contract by Mr. Gilbert. Mr. Cherry was authorized 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. Hackney seconded the motion.  The motion carried unanimously by the members present.

 

 

OTHER:       

 

            August meeting

 

Mr. Cherry reminded the Board that two manager presentations were scheduled for August and to plan for a long meeting.

 

 

PUBLIC COMMENTS:  None

 

 

ADJOURNMENT:

 

            There being no further business, the following motion was made:

 

Mr. Coker made a motion to adjourn the meeting at 11:05 a.m.  Mr. Harrell seconded the motion.  The motion carried unanimously by the members present.

 

 

                                                            __________________________

                                                                        Chair

 

                                                                        __________________________

                                                                        Date

 

 

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