ABOUT LACERA

INSURANCE, BENEFITS & LEGISLATIVE COMMITTEE MINUTES 6-11-09

PRESENT

• Simon S. Russin, Vice Chair
• Edward L. Blecksmith
• Ed C. Morris
• James P. Harris, Alternate

ABSENT

• William de la Garza, Chair

ALSO ATTENDING:

BOARD MEMBERS AT LARGE

• Sadonya Antebi
• Yves Chery
• Les Robbins

STAFF, ADVISORS, PARTICIPANTS

• Lita Payne
• Gregg Rademacher
• Beulah Canevari
• Cynthia Lau
• Mercer Human Resource Consulting
• Clay Levister
• Laurie Silva

The meeting was called to order by Chairman Russin at 11:45 a.m.

1. APPOINTMENT OF VOTING MEMBER(S) IN THE EVENT ONE OR MORE REGULAR COMMITTEE MEMBERS ARE ABSENT

   The Chair appointed Mr. Harris a voting member of the Committee.

2. APPROVAL OF THE MINUTES OF THE REGULAR MEETING OF MAY 7, 2009

   A motion was made by Mr. Morris, seconded by Mr. Blecksmith, to approve the minutes of the regular meeting of May 7, 2009.

   The motion passed unanimously.

3. ACTION ITEMS
   1. Recommend the Board of Retirement continue its “Watch” position on AB 155 relating to municipal bankruptcy. (Memorandum dated June 2, 2009, from Cynthia Lau, Legislative Affairs Officer)

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

      The motion passed unanimously.

   2. Recommend the Board of Retirement adopt a “Support” position on AB 609, which would increase the administrative cost cap. (Memorandum dated June 3, 2009, from Cynthia Lau, Legislative Affairs Officer)

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

      The motion passed unanimously.

   3. Recommend the Board of Retirement adopt a “Support” position on AB 1584 relating to conflict of interest. (Memorandum dated June 1, 2009, from Cynthia Lau, Legislative Affairs Officer)

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

      The motion passed unanimously.

4. FOR INFORMATION
   1. Improved Accounting Practice – Retiree Health Care

      Staff has undertaken several measures to improve the transparency of the Retiree Health Care (RHC) Budget process. These include recording the health consultant fee payments as administrative expenses, improving the cost allocation of indirect staff overhead for Legal, Internal Audit, and Investment Office support, and including the components of RHC’s overhead expense in the formal budget.

      Other financial related concerns include compliance with the 1937 Act provisions, as well as the IRS’s interest in public pension systems. Our existing financial process ensures that all RHC operating costs are eventually paid from RHC income, not from pension assets. However, Financial and Accounting Services and RHC are beginning a new process in fiscal year 2009-2010 to ensure that the flow of funds in LACERA’s accounts is structured in a way that allows a clear understanding of the funding of the RHC program, and that there is no unintentional, inappropriate use of LACERA’s retirement trust assets. Staff continues to work to ensure that LACERA pension trust fund assets are not inadvertently used to pay RHC expenses, and that the RHC program is administered in a transparent manner.

   2. Staff Activities Report for May, 2009

      The staff activities report was discussed

   3. CIGNA & Anthem Blue Cross Claims Experience The CIGNA & Anthem Blue Cross Claims Experience reports through April, 2009 were discussed.

   4. Summary of Delivery System Reform Policy Options
   5. Summary of Coverage Policy Options.
   6. Summary of Financing Policy Options

      Three news releases from the Senate Committee on Finance discussed different aspects of health care reform. Though nothing has been finalized at this time, these policy option papers are a good summary of some of the issues, such as:

      • Reducing costs and improving quality in the health care delivery system
      • Expanding health care coverage to the uninsured
      • Financing reform of America’s health care system

   7. Patients’ Choice Act Submitted for information only.

   8. Federal Legislation
      • Weekly Highlights – May 26, 2009
      • Weekly Highlights – May 18, 2009
      • Weekly Highlights – May 11, 2009
      • Weekly Highlights – May 4, 2009

      Submitted for information only.

5. MISCELLANEOUS
6. PUBLIC COMMENT
7. GOOD OF THE ORDER (For discussion purposes only)
8. 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.

7/9/09