ABOUT

BOARD OF RETIREMENT MINUTES 9-10-09

PRESENT

• Simon S. Russin, Vice Chair
• Yves Chery, Secretary
• Sadonya Antebi
• Edward L. Blecksmith
• James P. Harris (Alternate Member)
• Ed C. Morris (Alternate Retired)
• Les Robbins
• Mark J. Saladino

ABSENT

• William de la Garza, Chair
• William R. Pryor

STAFF ADVISORS AND PARTICIPANTS

• Gregg Rademacher, Chief Executive Officer
• Robert Hill, Assistant Executive Officer
• Janice Golden, Assistant Executive Officer
• Robb Van Der Volgen, Chief Counsel
• Fern M. Billingy, Senior Staff Counsel
• Cynthia Lau, Legislative Affairs Officer
• Robert Whitten, Manager, Administrative Services

1. CALL TO ORDER

   Vice Chair Russin, presiding in the absence of Chair de la Garza, called the meeting to order at 9:00 a.m., in the Board Room of Gateway Plaza.

2. PLEDGE OF ALLEGIANCE

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

3. BOARD MEMBER ANNOUNCEMENTS (For Information Only)
4. APPROVAL OF THE MINUTES OF THE REGULAR MEETING OF AUGUST 13, 2009

   A motion was made by Mr. Morris, seconded by Mr. Chery, to approve the minutes of the regular meeting of August 13, 2009.

   The motion passed unanimously.

5. OTHER COMMUNICATIONS

   1. For Information
      1. August 2009 All Stars

         Mr. Hill announced the eight winners for the month of August, (Katie Hancock, Koreana Wong, Inga Tadevosyan, Stephanie Kawai, Yo Fujiki, Elda Villarroel, Jay Lee, and Michelle Masters) of the Employee Recognition Program. Alvina Heard was the winner of LACERA’s Web Watcher Award. Clarence Malone, Elda Villarroel, Eilene Morken, and Flora Zhu were the winners of LACERA’s RideShare Program.

      2. Chief Executive Officer’s Report (Memo dated September 3, 2009)

         Mr. Rademacher announced that the City of Pasadena recognized LACERA as Model Employer of the Year.

         Mr. Rademacher reported that LACERA was presented the 2008 Charitable Giving Campaigns’ Top Payroll Deduction Award at the Board of Supervisors Meeting. Julia Ray also received an award for her hard work as LACERA’s charitable giving campaign coordinator.

         Mr. Rademacher also reported on his trip to Sacramento to walk the hill with Joe Ackler, LACERA’s Legislative Advocate. Additionally, both he and Christine Roseland had an opportunity to speak with the Civil Grand Jury to provide information as to LACERA’s duties and functions in regards to benefits and investments.

         Milliman, Inc., LACERA’s Actuary, has reported that no LACERA retirees or beneficiaries are eligible for additional STAR payments for the upcoming year. This based on the CPI percentage increasing by only 0.1%.

         LACERA’s Financial & Accounting Services will provide the Board with an informational memo at its next Administrative Board Meeting.

         The Board of Investments, at its meeting of September 9, 2009, took action to divest from those companies that are liable to U.S. Government sanctions by virtue of their investments in the Iranian energy sector. Investment staff will be working on amending LACERA’s Investment Policy to incorporate this action.

6. CONSENT AGENDA

   The following agenda items were 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 2009 Public Safety Employees Pension & Benefits Conference to be held in Palm Springs, California, from October 11-14, 2009; and approve reimbursement of all travel costs incurred in accordance with LACERA’s Education and Travel Policy. (Memo dated August 25, 2009.) (Placed on the agenda at the request of James P. Harris.)
   2. 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 5th Annual Public Sector Roundtable Healthcare Conference to be held in Alexandria, Virginia, from September 23-25, 2009; and approve reimbursement of all travel costs incurred in accordance with LACERA’s Education and Travel Policy. (Memo dated August 31, 2009.)
7. NON-CONSENT AGENDA
   1. Recommendation as submitted by Fred Whiting, Manager, Retirement Systems Division:

      Approve attendance of Board Members and staff, as designated by the Chief Executive Officer, at the Annual IBM Information on Demand 2009 Conference and Exposition to be held in Las Vegas, Nevada from October 25-29, 2009; and approve reimbursement of all travel costs incurred in accordance with LACERA’s Education and Travel Policy. (Memo dated September 1, 2009.)

      A motion was made by Mr. Robbins, seconded by Mr. Morris, to approve the recommendation.

      The motion passed unanimously.

   2. Recommendation as submitted by Yves Chery, Chair, Operations Oversight Committee: 1) Instruct the Chief Executive Officer to execute an agreement with National Business Systems, Inc. (“NBS”) for conversion of member data in microfiche format to electronic images, at a cost not to exceed $775,000 to be funded from Contingency; and 2) Recommend the Board of Investments approve funding from Contingency. (Memo dated September 2, 2009.)

      A motion was made by Mr. Chery, seconded by Mr. Harris, to approve the recommendation.

      Mr. Whitten addressed the Board noting the importance of retaining and converting LACERA’s microfiche inventory to electronic images. This would allow easy access for staff to view from their computer workstations.

      LACERA’s microfiche inventory represents the only copy containing pertinent member information throughout the entire County.

      After a brief discussion among the Board Members and staff the motion was voted on.

      The motion passed unanimously.

   3. Recommendation as submitted by Insurance, Benefits and Legislative Committee: That the Board adopt a “watch” position on SB 54 relating to treatment of same-sex marriages outside of California. (Memo dated September 1, 2009.)

      SB 54

      Senate Bill 54 is sponsored by Equality California and addresses how out-of-state marriages will be recognized in California following the passage of Proposition 8 (the voter-approved gay marriage ban) on November 5, 2008, and the subsequent California Supreme Court decision upholding it.

      On May 26, 2009 the California Supreme Court upheld the passage of Proposition 8. The Court also declared that the estimated 18,000 same-sex marriages conducted last summer, prior to the passage of the proposition, would remain legal and recognized because Proposition 8 did not include language specifically saying it was retroactive. The validity of marriages entered into outside of California before passage of Proposition 8 was not addressed by the Court.

      SB 54 would provide that same-sex couples who validly married outside of California be recognized in this state. Specifically, the bill would provide that:
      1. All valid same-sex marriages entered outside of California before passage of Proposition 8 will be legally recognized as such in California; and
      2. Couples in all such marriages entered into after passage of Proposition 8 will have all of the same rights, responsibilities and obligations as married couples, with the sole exception of using the legal designation of “marriage”.

      A motion was made by Mr. Chery, seconded by Mr. Robbins, to take a “watch” position on SB 54.

      The motion passed unanimously.

   4. Recommendation as submitted by Cynthia Lau, Legislative Affairs Officer: That the Board adopt a “watch” position on SB 752, as amended, authorizing a hybrid retirement plan for Orange County. (Memo dated September 1, 2009.)

      SB 752

      The bill is urgency legislation which would authorize a hybrid retirement plan for Orange County.

      The bill was subsequently amended on August 24, 2009 to:
      1. Allow the county to require employees electing the reduced 1.62% at age 65 formula (which applies to future service only) to make “reverse pickup” contributions. The requirement to make these contributions would apply to both new and existing employees. In a previous MOU negotiated with the Orange County Employees Association, the County agreed to enhance benefits by providing a 2.75% at age 55 formula. The MOU required employees to pay the full cost of implementing the new formula, that cost being the UAAL resulting from applying the enhanced formula to previous service. That obligation is satisfied by assessing an additional employee contribution in an amount necessary to pay off the UAAL over a 30 year amortization period. This additional contribution is known in Orange County as a “reverse pickup.”
      2. Specify that “reverse pickup” contributions will not result in an additional benefit to the member, but do become part of the accumulated contributions of the member.
      3. Specify that the date of membership for new hires making an election between the two specified pension calculations will be retroactive to the date of hire.

      A motion was made by Mr. Robbins, seconded by Mr. Harris, to take a “watch” position on SB 752, as amended.

      The motion passed unanimously.

   5. Recommendation as submitted by Fern M. Billingy, Senior Staff Counsel: Adopt the proposed Waiver of Interest Policy.

      Ms. Billingy addressed the Board requesting that the proposed policy on “Waiver of Interest” be approved. The policy mirrors, in part, the Board’s policy for the “Recovery of Overpayments”.

      Mr. Saladino asked that staff periodically provide a report to the Board noting amounts of interest waived. Ms. Billingy agreed that staff will provide such reports to the Board.

      A motion was made by Mr. Chery, seconded by Mr. Harris, to adopt the proposed Waiver of Interest Policy.

      The motion passed unanimously.

8. PUBLIC COMMENT
9. GOOD OF THE ORDER (For discussion purposes only.)

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

   1. LACERA Legislative Report –Bills Amending CERL. (Dated September 8, 2009)
   2. LACERA Legislative Report – Other.(Dated September 8, 2009)
   3. LACERA Legislative Report – PERS/STRS Bills. (Dated September 8, 2009)
   4. Memo from Robert Palmer, SACRS Interim Executive Director regarding: County Retirement Board Trustees. (Memo dated September 1, 2009.)
10. 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.

10/19/09