ABOUT LACERA

OPERATIONS & OVERSIGHT COMMITTEE MINUTES 6-11-09

PRESENT

• Yves Chery, Chair
• Ed C. Morris, Vice Chair
• Edward L. Blecksmith
• James P. Harris
• Sadonya Antebi, Alternate

BOARD MEMBERS AT LARGE

• Simon S. Russin

STAFF, ADVISORS, PARTICIPANTS

• Robert Hill
• Janice Golden
• Barry Lew
• JJ Popowich

The meeting was called to order by Chairman Chery at 12:15 a.m.

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

   All regular members of the Committee were present.

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

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

   The motion passed unanimously.

3. FOR INFORMATION
   1. Internal Revenue Code Section 415(b) Compliance (oral presentation) - Barry Lew/JJ Popowich

      Barry Lew and JJ Popowich discussed the benefits limit mandated by Internal Revenue Code Section 415(b). LACERA must comply with certain Internal Revenue Code requirements to maintain a tax qualified status. Section 415 imposes a limit for defined benefit plans as to the amount of retirement benefits which can be paid out. The 2009 benefits limit is $195,000, which only applies to the employer provided portion of a retirement benefit. The limit is also adjusted for age, the $195,000 being for a member who retires at age 65. Members who retire at a younger age have a lower benefits limit. Therefore, members at risk of exceeding the benefits limit are those who are highly compensated, and those who retire early.

      LACERA needs to identify those members at risk, which will then be forwarded to our actuary to determine the employer-provided and employee-provided portion of the retirement benefit. LACERA cannot pay the employer-provided portion of the benefit that exceeds the benefits limit. The Internal Revenue Code also provides for a Replacement Benefit Plan (RBP), established separate from the LACERA qualified trust, for the sole purpose to pay that portion of the employer-provided benefit which exceeds the benefits limit. The RBP will make the member whole in terms of the benefit he has earned. The member would receive two monthly payments, one from LACERA and one from the RBP.

      LACERA staff has put together a plan to educate and counsel those members who might be impacted by 415(b). This will be a low key approach, with the objective of informing and reassuring members. Currently, we have no members that are affected by the benefits limit.

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