ABOUT

BOARD OF RETIREMENT MINUTES 3-5-09

PRESENT

• William de la Garza, Chair
• Simon S. Russin, Vice Chair
• Yves Chery, Secretary
• Edward L. Blecksmith
• Si Frumkin
• James P. Harris (Alternate Member)
• Ed C. Morris (Alternate Retired)
• William R. Pryor
• Les Robbins
• Mark J. Saladino

ABSENT

• Sadonya Antebi

STAFF ADVISORS AND PARTICIPANTS

• Gregg Rademacher, Chief Executive Officer
• Robert Hill, Assistant Executive Officer
• Janice Golden, Assistant Executive Officer
• David L. Muir, Chief Counsel
• Johanna M. Fontenot, Senior Staff Counsel
• Cynthia Lau, Legislative Affairs Officer

1. CALL TO ORDER

   The meeting was called to order by Chair de la Garza at 9:00 a.m., in the Board Room of Gateway Plaza.

2. PLEDGE OF ALLEGIANCE

   Mr. Morris led the Board Members and staff in reciting the Pledge of Allegiance.

3. BOARD MEMBER ANNOUNCEMENTS

   (For Information Only)
   Nothing to report.

4. APPROVAL OF THE MINUTES OF THE REGULAR MEETING OF FEBRUARY 12, 2009

   A motion was made by Mr. Morris, seconded by Mr. Chery, to approve the minutes of the regular meeting of February 12, 2009. The motion passed unanimously.

5. OTHER COMMUNICATIONS
   1. For Information
      1. February 2009 All Stars

         Mr. Hill announced the eight winners for the month of February, (Van Bonifacio, Alex Yin, Eddie Paz, Tina Young, Roberta VanNortrick, Rey Sare, Irwin Devries, and Francisco Jaranilla) of the Employee Recognition Program. Cynthia Lau was the winner of LACERA’s Web Watcher Award. Penny Rodriguez, Dana Jones, Angela Ward, and Liza Gotangco were the winners of LACERA’s RideShare Program.

      2. Chief Executive Officer’s Report (Memo dated February 26, 2009)

         Mr. Rademacher provided a brief overview of his Chief Executive Officer’s Report with emphasis on LACERA’s Budget. Based on last year’s projection, it was estimated there would be $83 million available to fund LACERA’s operating expenses in the current year (Fiscal Year ended June 30, 2009). Due to losses in the investment portfolio, the amount available to fund operating expenses is now projected to be much lower. The Executive Office and division managers have been meeting to discuss reducing their services and supplies budget by 10% from current fiscal year expenditure projections while still achieving its goals and objectives. The search for replacing LACERA’s Chief Legal Counsel is underway and interviews are scheduled for March 12, 2009. Mr. Muir has postponed his retirement until early July, 2009. LACERA, in its continued efforts to provide comprehensive training for its Member Service’s staff, will begin referring its veteran members, to participate in the formal training program offered to new hires. There are some “veteran” staff who were hired and on board before the training program was developed.

6. CONSENT AGENDA

   The following agenda item was placed on the consent agenda and unanimously approved on a motion by Mr. Saladino, seconded by Mr. Morris.

   1. Recommendation as submitted by Gregg Rademacher, Chief Executive Officer: Approve attendance of Board Members and staff, as designated by the Chief Executive Officer, at the State and Local Government Benefits Association National Conference to be held April 26-29, 2009 in Denver, Colorado; and approve reimbursement of all travel costs incurred in accordance with LACERA’s Education and Travel Policy. (Memo dated February 25, 2009.)
7. NON-CONSENT AGENDA
   1. Recommendation as submitted by David L. Muir, Chief Counsel: That the Board approve the ballot insert entitled “POWERS AND DUTIES OF RETIREMENT BOARD MEMBERS” to be included with the ballot materials for the election of the Third Member of the Board of Retirement. (Memo dated February 24, 2009.)

      Chair de la Garza offered the following two (2) amendments to the proposed ballot inserts:

      1) The first sentence in the second paragraph reads: “The overall responsibility of the Board of Retirement is to administer the retirement system and the retiree health care program.” Chair de la Garza suggested that the word “administer” be replaced with “oversee the administration of”.

      2) The last sentence in the second paragraph reads: “In addition to the time required to attend meetings, considerable time is required to review materials and otherwise prepare.”

      Chair de la Garza suggested that the highlighted words be replaced with “review applicable materials developed by staff and management”.

      A motion was made by Mr. Pryor, seconded by Mr. Morris, to approve the recommendation, as amended. The motion passed unanimously.

   2. Recommendation as submitted by Johanna M. Fontenot, Senior Staff Counsel: Approve procedures covering the collection of arrears contributions applicable to flexible benefit plan contributions for former Covina and El Monte City Firefighters. (Memo dated February 24, 2009.)

      Ms. Fontenot addressed the Board stating that the cities of Covina and El Monte elected to transfer fire protection services from their local city administration to the County via annexation. On February 24, 1998, 102 firefighters from Covina and El Monte became Los Angeles County employees. More recently, the County determined eligibility for benefits for these employees should be based on the employee’s date of hire with the annexed city. Currently, the County is using the hire date with the County for purposes of determining eligibility to benefits. A change in the hire date would make the employee’s flexible benefit contributions subject to pensionable treatment.

      Therefore, staff is recommending that the Board of Retirement adopt proposed procedures for collection of retirement contributions associated with County contributions to flex benefit plan accounts of those firefighters who transferred to the County under the Covina and El Monte annexation agreements.

      A motion was made by Mr. Morris, seconded by Mr. Chery, to approve the recommendation. The motion passed unanimously.

   3. Recommendation as submitted by William de la Garza, Chair, Insurance, Benefits and Legislative Committee: That the Board adopt a “watch” position on AB 137 relating to the Brown Act. (Memo dated February 23, 2009.)

      AB 137

      The Ralph M. Brown Act requires that all meetings of a legislative body of a local agency be open and public and all persons be permitted to attend unless a closed session is authorized. In defining a legislative body for this purpose, the act excludes ad hoc advisory committees composed solely of the members of the legislative body that are less than a quorum of the legislative body. AB 137 amends Government Code Section 54952 to require that ad hoc advisory committees that are less than a quorum hold their meetings in public if the committee has been established for more than two years.

      LACERA has occasionally appointed ad hoc committees to review specific issues in closed session. It is not anticipated that such committees would last longer than two years. However, if an advisory or ad hoc committee does last longer than two years, this bill would require the meetings be conducted in open session after the two-year mark.

      A motion was made by Mr. Saladino, seconded by Mr. Morris, to take a “watch” position on AB 137. The motion passed unanimously. Mr. Robbins was not present for the vote.

   4. Recommendation as submitted by William de la Garza, Chair, Insurance, Benefits and Legislative Committee: That the Board adopt a “support” position on AB 104 which would conform California tax law to provisions of the federal Pension Protection Act of 2006. (Memo dated February 23, 2009.)

      AB 104

      Federal tax law was amended by the Pension Protection Act of 2006 in the following respects: 1. Provides that the 10% “early withdrawal penalty” applicable to public safety officers does not apply to individuals who separate from service after age 50.

      2. Excludes from taxable income certain pension distributions from an eligible retirement plan used to pay for qualified health insurance and long-term care insurance premiums. This tax exclusion applies to public safety officers only.

      AB 104 would conform California tax law to federal tax law by incorporating the above. This bill is identical to AB 1561, as amended on April 10, 2007, from the prior legislative session. LACERA’s Board of Retirement adopted a “Support” position on AB 1561 on June 14, 2007. The bill was subsequently amended a number of times and was placed in the inactive file of the Senate Appropriations Committee on motion by the author.

      A motion was made by Mr. Pryor, seconded by Mr. Saladino, to take a “support” position on AB 104. The motion passed unanimously.

   5. Recommendation as submitted by William de la Garza, Chair, Insurance, Benefits and Legislative Committee: That the Board adopt a “watch” position on AB 128 which would amend the cancer presumption in worker’s compensation cases. (Memo dated February 23, 2009.)

      AB 128

      Existing workers’ compensation law extends a rebuttable cancer presumption to specified members following termination of service for a period of three (3) calendar months for each full year of the requisite service, but not to exceed 60 months in any circumstance, commencing with the last date actually worked in the specified capacity.

      Assembly Bill 128, sponsored by the California Professional Firefighters, amends Labor Code Section 3212.1 to extend the presumption following termination of service for a period of one year for each full year of the requisite service, and deletes the cap of 60 months.

      Proponents of this bill explain that research has shown that latency periods for some industrially caused cancers can be 10 years or as long as 30 years or more. Therefore, cancers diagnosed today are being associated with genetic changes that occurred in the cells due to cancer-causing exposures several years, if not decades, prior to the diagnosis.

      The current version of this bill does not amend the cancer presumption in CERL relating to disability retirements. As it is possible that amendments may occur during the legislative session, staff recommends that we continue to monitor this bill.

      A motion was made by Mr. Pryor, seconded by Mr. Chery, to take a “watch” position on AB 128. The motion passed unanimously.

   6. Recommendation as submitted by Gregg Rademacher, Chief Executive Officer: That the Board adopt an Employer Reimbursement Policy for Elected Active Members. (Memo dated February 26, 2009.)

      Pulled from agenda at the request of staff.

8. PUBLIC COMMENT
9. GOOD OF THE ORDER

   (For discussion purposes only.)

10. EXECUTIVE SESSION
    1. CONFERENCE WITH LEGAL COUNSEL–EXISTING LITIGATION (Subdivision (a) of California Government Code Section 54956.9)
       1. David J. Rash et al. v County of Los Angeles et al. Los Angeles Superior Court Case No. BC 403539

          The Board met in Executive Session to discuss the above existing litigation with its legal counsel. The Board reconvened in open session, at which time Ms. Fontenot made the following statement for the record:

          In the matter of David J. Rash et al. v County of Los Angeles et al.there was nothing to report out.

       Green Folder Information

       (Information distributed in each Board Member’ Green Folder at the beginning of the meeting.)

       1. LACERA Legislative Report –Bills Amending CERL (Dated March 2, 2009)
       2. LACERA Legislative Report – Other.(Dated March 2, 2009)
       3. LACERA Legislative Report – PERS/STRS Bills.(Dated March 2, 2009)
       4. Memo to SACRS’ 1937 Act Retirement System Trustees and Administrators from Shawn Terris, Chair, SACRS Nominating Committee regarding: 2009-10 SACRS Board of Directors’ Election Update. (Memo dated February 20, 2009)
       5. Orange County Register news article regarding: O.C. Pension Plan’s Dirty Little Secret. (Article dated March 4, 2009)

XI. ADJOURNMENT

Documents subject to public disclosure that relate to an agenda item for an open session of the Board of Investments that are distributed to members of the Board of Investments less than 72 hours prior to the meeting will be available for public inspection at the time they are distributed to a majority of the Board of Investments Members at LACERA’s offices at 300 N. Lake Avenue, Suite 820, Pasadena, CA 91101, during normal business hours of 9:00 a.m. to 5:00 p.m. Monday through Friday.

Listening Devices are available at days notice before the meeting date. Persons requiring an alternative format of this public notice pursuant to Section 202 of the Americans with Disabilities Act of 1990 may request one by contacting Cynthia Guider at (626) 564-6000, x3327 from 8:30 a.m. to 5:00 p.m. Monday through Friday, but no later than 48 hours prior to the time the meeting is to commence.

5/4/09