CITY OF KNOXVILLE PENSION BOARD
MINUTES
WEDNESDAY - September 13, 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 917E. 5th Avenue at 8:15 a.m. on September 13, 2006.
Present were: Mayor Bill Haslam, Mr. Greg Coker, Mr. Stephen King, Mr. Christopher Kinney, Ms. Barbara Pelot, Mr. Michael Cherry and Attorney Bud Gilbert.
CALL TO ORDER:
Mayor Haslam presided and called the meeting to order at 8:26 a.m.
APPROVAL OF REGULAR MEETING MINUTES FOR August 10, 2006
Ms. Pelot made a motion to approve the August 10, 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.
CONTRACTS: None
ADMINISTRATIVE MATTERS:
August Benefit Payments
Mr. Cherry advised the Board that the monthly benefit checks received by approximately 240 retired members, were late in August due to an error by the trustee, State Street. Mr. Cherry told the Board that he had been in contact with a State Street representative regarding this problem, and that State Street had identified the error and assured Mr. Cherry that measures would be taken to avoid future delays.
EXECUTIVE DIRECTOR COMMENTS:
August Asset Listing
Mr. Cherry reported to the Board that August was a good month resulting in a $7 million increase in assets.
Pension Protection Act of 2006
Mr. Cherry noted to the Board that with the passage of Pension Protection Act of 2006, all necessary changes to the pension plan will be completed in accordance with the effective dates contained within the act. If there are any changes necessary to the Supplemental Plan Provisions, legal counsel will advise and recommend the amendments.
Financial Statements
Mr. Cherry noted to the Board in the FYI file, a Balance Sheet and Income Statement for the Pension System, for the fiscal year ended June 30, 2006. Mr. Cherry advised the Board that he expected the auditors to begin the audit work soon.
ATTORNEY COMMENTS:
Global Crossing Bankruptcy Proceedings
Attorney Gilbert advised the Board that there was no additional information on the Global Bankruptcy Proceedings since last meeting.
Glenda Fields Litigation
Attorney Gilbert advised the Board that there were no further reports regarding this litigation since last meeting.
ENROLLMENTS:
The following General Government employees have filed applications to become members of the Plan G1 pension system.
Jonee’ Dorsett
Kessala Dorsey
Christine Mullan
Motion: Mr. Kinney 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.
Mr. King arrived at 8:32 a.m.
Harold L. Bell, General Government, Plan G1 - Vested
Aaron Bowman, Police Dept., Plan C – Vested
Jeffrey R. Bunch, General Government, Plan G1 – Non-vested
George B. King, General Government, Plan G2 – Vested
Timothy D. McCarter, Fire Dept., Plan C – Non-vested
Tami S. Taylor, Schools, Plan A – Non-vested
Motion: Ms. Pelot made a motion to approve these applications for withdrawal of employee contributions. Mr. Kinney seconded the motion. The motion carried unanimously by the members present.
RETIREMENTS:
APPLICATION FOR INJURY IN LINE OF DUTY: PLAN G1
CHARTER SECTION 1360.22
Anita M. Nitzberg, General Government Option B-12
15 Yr. Certain & Life
Date of birth, October 18, 1961: 44 years of age*
Total credited service: 7 years 9 months 6 days**
*Computed as if 62 years of age
**Computed as if worked until age 62 (25 years 3 months 20 days)
Average monthly salary for 2 highest 12 month periods, $2,612.38 x .0115 =
$30.04 x 25.30479 = $760.16. Ms. Nitzberg chose Option B-12 – 15 Yr. Certain & Life to Scott M. Nitzberg, spouse. $760.16 x .9879 =
$750.96 (defined benefit) pension effective April 1, 2005.
Ms. Nitzberg chose to receive a one time payment of the Supplemental Retirement Account applicable to Plan G1.
Motion: Motion: Mr. King made a motion to approve this application for a permanent injury in line of duty pension payable under Option B-12, based on Dr. William Johnson’s report and Mr. Cherry’s disability recommendation report. Mr. Kinney seconded the motion. The motion carried unanimously by the members present.
APPLICATION FOR RETIREMENT: PLAN A
CHARTER SECTION 1360.12
Cicero I. Looney, Schools Non-Certified Option A-6
100% without reinstatement
Date of birth, July 30,1944: 62 years of age
Total credited service: 35 years 11 months (combined City & County)
Average base earnings for 3 years, $400.00 x .75% = $3.00
Average excess earnings for 3 years, $3,089.23 x 1.50% = $46.34
making a total benefit of $49.34 benefit per year of service. $49.34 x 35.91667 =
$1,772.13 Total benefit
1,004.77 minus County benefit
767.36 Mr. Looney Chose Option A-6 - 100% Joint & Survivor without
reinstatement to Norma Yvonne Looney, spouse. $767.36 x .8210 =
$ 630.00 City pension effective September 1, 2006.
Motion: Ms. Pelot made a motion to approve this application for retirement payable under Option A-6. Mr. Coker seconded the motion. The motion carried unanimously by the members present.
APPLICATION FOR EARLY RETIREMENT: PLAN A
CHARTER SECTION 1360.17
Ronnie D. Smith, General Government No Option
Date of birth, September 3, 1954: 52 years of age
Total credited service: 30 years 2 months 7 days
Average base monthly salary for 2 years, $400.00 x .75% = $3.00
Average excess monthly earnings for 2 years, $1,942.10 x 1.50% = $29.13
Making a total of 32.13 benefit per year of service. $32.13 x 30.18736 =
$969.92 x ER factor .4059 =
$393.69 pension effective September 1, 2006.
Motion: Ms. Pelot made a motion to approve this application for early retirement subject to all applicable requirements of T.C.A. Section 8-35-124. Mr. Coker seconded the motion. The motion carried unanimously by the members present.
APPLICATION FOR RETIREMENT: PLAN G2 – RULE OF 80
CHARTER SECTION 1371.4
John R. Bailey, General Government Option A-6
100% without reinstatement
Date of birth, April 3, 1954: 52 years of age
Total credited service: 32 years 2 months
Average monthly salary for 2 highest – 12 month periods, $3,471.93 x 2.1% =
$72.91 x 32.16667 = $2,345.27. Mr. Bailey chose Option A-6 – 100% Joint & Survivor without reinstatement to Zelma F. Bailey, spouse. $2,345.27 x .8854 =
$2,076.50 pension effective September 1, 2006.
Motion: Ms. Pelot made a motion to approve this application for Retirement payable under Option A-6 subject to all applicable requirements of T.C.A. Section 8-35-124. Mr. Coker seconded the motion. The motion carried unanimously by the members present.
Gary K. Houston, General Government No Option
Date of birth, December 14, 1949: 56 years of age
Total credited service: 23 years 4 months 24 days
Average monthly salary for 2 highest – 12 month periods, $3,269.50 x 2.1% =
$68.66 x 23.39909 =
$1,606.58 pension effective September 1, 2006.
Motion: Ms. Pelot made a motion to approve this application for Retirement. Mr. Coker seconded the motion. The motion carried unanimously by the members present.
APPLICATION FOR EARLY RETIREMENT: PLAN G2
CHARTER SECTION 1360.17
Douglas L. Pinner, General Government No Option
Date of birth, January 11, 1955: 51 years of age
Total credited service: 26 years 4 months 30 days
Average monthly salary for 2 highest – 12 month periods, $2,065.24 x 2.1% =
$43.37 x 26.41553 = $1,145.64 x ER Factor .6875 =
$787.63 pension effective September 1, 2006.
Motion: Ms. Pelot made a motion to approve this application for Early Retirement subject to all applicable requirements of T.C.A. Section 8-35-124. Mr. Coker seconded the motion. The motion carried unanimously by the members present.
ATTORNEY COMMENTS – continued
Pension Benefits – John R. Bailey, Douglas L. Pinner and Ronnie D. Smith
Attorney Gilbert informed the Board that there was a pending criminal investigation involving the general government retirees listed above, John R. Bailey, Douglas L. Pinner and Ronnie D. Smith, relating to their actions while employees in the Solid Waste Division. He indicated that while future criminal charges were possible (pending the outcome of that investigation) that could trigger pension benefit forfeitures under T.C. A. Section 8-35-124 upon conviction of certain qualified crimes, the applicants should be presumed innocent at this time. Attorney Gilbert also advised the Pension Board that each application approval was subject to the requirements of T.C.A. Section 8-35-124 and the applicants should be so notified in their pension award letters.
APPLICATION FOR PARTICIPATION IN THE DELALYED 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.
Charles E. Davis, General Government – Plan G2 No Option
Date of birth, May 30, 1957: 49 years of age
Total credited service: 30 years 11 months 28 days
Average monthly salary for 2 highest – 12 month periods, $2,598.83.
$2,598.83 x .021 = $54.58 x 30.99338 =
$1,691.62 pension effective September 1, 2006.
DROP complete August 31, 2008.
Motion: Mr. King made a motion to approve this application for DROP retirement. Mr. Coker seconded the motion. The motion carried unanimously by the members present.
Sandra D. French, General Government – Plan G2 No Option
Date of birth, August 24, 1950: 56 years of age
Total credited service: 29 years 7 months 6 days
Average monthly salary for 2 highest – 12 month periods, $2,687.73.
$2,687.73 x.021 = $56.44 x 29.59977 =
$1,670.61 pension effective September 1, 2006.
DROP complete August 31, 2008.
Motion: Mr. King made a motion to approve this application for DROP retirement. Mr. Coker seconded the motion. The motion carried unanimously by the members present.
Gary D. Murr, General Government – Plan G2 No Option
Date of birth, October 27, 1948: 57 years of age
Total credited service: 30 years 6 months 2 days
Average monthly salary for 2 highest – 12 month periods, $4,707.47 =
$4,707.47 x .021= $98.86 x 30.50548
$3,015.77 pension effective September 1, 2006.
DROP complete August 31, 2008.
Motion: Mr. King made a motion to approve this application for DROP retirement. Mr. Coker seconded the motion. The motion carried unanimously by the members present.
APPROVAL OF INVOICES FOR PROFESSIONAL SERVICES: (GREEN TAB)
Bryan, Pendleton, Swats & McAllister – Actuary (July 2006) $ 4,555.00
Kennerly, Montgomery & Finley – Global Crossing – July 06) 42.96
State Street – Custodial (June 2006) 14,166.67
State Street – Custodial (July 2006) 14,166.67
State Street Global – Money Manager (2nd Qtr.- 2006) 4,143.60
INTECH – Money Manager (2nd Qtr.-2006) 96,800.69
Summit Strategies Group (3rd. Qtr. – 2006) 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: Ms. Pelot made a motion to approve payment for these bills. Mr. Kinney seconded the motion. The motion carried unanimously by the members present.
OTHER:
CUSTODIAL CONTRACT
Mr. Cherry advised the Board that he was working with Summit Strategies on the request for proposals for the custodial contract which expires at the end of this calendar year. Proposals should be evaluated and recommendation will be made at the October meeting.
RECOGNITION OF MR. CHRISTOPHER KINNEY’S SERVICE ON THE PENSION BOARD:
Mayor Haslam presented Mr. Kinney with a plaque in appreciation of his service on the Pension Board. Mr. Kinney had previously announced his planned termination of service with the City of Knoxville as of the end of September and will be automatically succeeded on the Pension Board by his successor.
Mayor Haslam called a recess at 8:52 a.m. and called the meeting back to order at 9:00 a.m.
INVESTMENT MATTERS:
Small Cap Value Manager Search
The Board, in a phone conference with Chris Tocco of Summit Strategies, decided to interview two firms, AQR and First Quadrant on October 12, 2006, after reviewing the Small Cap Value Manager Search material provided by Summit Strategies Group.
The presentation material is on file in the Pension Board Office.
Mayor Haslam left the meeting at 9:42 a.m.
PUBLIC COMMENTS: None
ADJOURNMENT:
There being no further business, the following motion was made:
Ms. Pelot made a motion to adjourn the meeting at 9:53 a.m. Mr. Coker seconded the motion. The motion carried unanimously by the members present.
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Chair
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Date