SONOMA COUNTY EMPLOYEES RETIREMENT ASSOCIATION BOARD MINUTES

Transcription

1 BOARD MINUTES Thursday, 8:33 A.M. Presiding: Present: Also Present: Absent: Chair Jerry Allen presided. Trustees Al Alys, Mike Chrystal, Rod Dole (arrived at 8:35 A.M.), Greg Jahn, (arrived at 8:34 A.M.), Kiergan Pegg, David Rabbitt (left at 11:55 A.M.), Sharon Stockham (left at 11:55 A.M) and Kimber Williams. Retirement Administrator Gary Bei; Assistant Retirement Administrator Kelly Jenkins; Accounting Manager Cathy Lanz, Retirement Benefits Coordinator Helen Olson, Investment Officer James Failor, Information Systems Manager Diane Ginn, Legal Counsel Neil Baker, Deputy County Counsel IV Jeff Berk; Deputy County Counsel Phyllis Gallagher, Administrative Aide Jennifer Howze, Associates John Lee and Shane Schurter of Hewitt Ennis Knupp, Senior Vice President Barry Palma of Cornish & Carey Commercial (arrived at 9:13 A.M. and left at 9:51 A.M.); President Ed Clites of Sonoma County Law Enforcement Association (SCLEA); Director-at-Large Carl Jackson of Sonoma County Association of Retired Employees (SCARE), Press Democrat Reporter Brett Wilkison. Dianne Edwards I. CONSENT CALENDAR A. Membership as of January 31, 2011: Active = 3,754 Deferred/Transfer = 536 Retirees = 3,792 New Members = 16 Withdrawals = 5 = $84, Funds on Deposit/Members with Less than 5 Years = 359 = $4,922, B. SERVICE RETIREMENTS: Name Effective Date Department Denise Blood 02/16/11 Deferred Sharon Chamberlin 02/08/11 Human Services Julie Ebersole 01/28/11 DCSS Lauren Full 01/31/11 Deferred Terry Hausman 01/25/11 Transportation & Public Works Jacqueline Johnson 01/08/11 Human Services 1

2 B. SERVICE RETIREMENTS, cont.: Name Effective Date Department Rita Knowlton 02/15/11 CDC Ralph Lopez 01/25/11 Public Defender Penny Reed 01/25/11 Human Services Maureen Rudin 01/25/11 Human Services Charlene Schwartz 12/29/10 Deferred Lynn Teichert 01/12/11 Retirement John Telford 02/08/11 Transportation & Public Works Luke Walsh 02/05/11 Deferred Constance Weichel 01/25/11 Superior Court Thomas Werner 01/14/11 Deferred Total = 16 C. DEFERRED/TRANSFER: Name Effective Date Department Susan Anton Tracy 11/23/10 DCSS Scott Bell 06/25/10 Transportation & Public Works Judith Brennan 11/23/10 DCSS Deborah Bridenstine 07/12/10 Permit & Resource Management Luis Mendez 11/30/10 Human Services Jill Ontiveros 11/23/10 DCSS Dana Wittek 11/30/10 Clerk/Assessor/Recorder Total = 7 D. ACTIVE/DEFERRED/TRANSFER DEATH: None. E. THIRTY YEARS SERVICE: None. Ayes 7 Noes 0 Abstain 0 Absent 2 II. MINUTES APPROVAL: Approval of January 20, 2011 Retirement Board Meeting Minutes. Ayes 8 Noes 0 Abstain 0 Absent 1 2

3 III. REGULAR CALENDAR: A. COMMITTEE MEMBERSHIP REVIEW: Review of the committee membership recommendation of the Ad-Hoc Nominating Committee of the Retirement Board for the following committees: Administrative/Benefits Committee: Mike Chrystal/ Dianne Edwards, Kiergan Pegg, David Rabbitt, Sharon Stockham, Kimber Williams. Audit Committee: Al Alys, Mike Chrystal/ Dianne Edwards, Rod Dole, Greg Jahn, Kimber Williams. Disability Committee: Jerry Allen, Mike Chrystal/ Dianne Edwards, David Rabbitt, Sharon Stockham, Kimber Williams. Investment Committee: Jerry Allen, Al Alys, Rod Dole, Greg Jahn, Kiergan Pegg. Each Committee Chair will be elected at the next meeting of the committee. Motion to approve the committee membership as noted. Ayes 9 Noes 0 Abstain 0 Absent 0 B. PRESENTATION(S): 1. Quarterly Investment Performance Report - John Lee and Shane Schurter of Hewitt EnnisKnupp presented the 4 th quarter performance report for SCERA. Mr. Lee began by commenting on the new format of the quarterly performance report and stating that plan assets have grown to approximately $1.8 billion. He went on to review of the economy and market index returns. He noted that GDP growth has been positive since the third quarter of 2009, that unemployment is not shrinking but appears to have leveled-off, and that home prices have recovered slightly from their lowest levels. The equity markets delivered strong double-digit returns in the fourth quarter and for the year. Over 2010 the US outperformed the developed non-us markets and over one and five years the emerging markets have led both the US and all other major regions of the world. Overall, Mr. Lee felt the economic outlook was improving. Mr. Schurter then provided an update on SCERA s portfolio explaining that small and mid cap stocks outperformed large cap stocks for the quarter and the year. Materials and industrials led for the year while health care and utilities trailed. Across the quality spectrum in the US market lower quality stocks led for the year. The fund s fixed income assets were rewarded with higher equity-like returns due to the overweight to non- Treasury sectors by SCERA s managers. The geographic allocation of the global equity market was also discussed, noting the growing share in emerging markets and the declining share in the US. 3

4 B. PRESENTATION(S), cont.: 1. Quarterly Investment Performance Report, cont. Mr. Schurter stated that the Fund as a whole returned 7.2% for the quarter, outperforming the benchmark by 50 basis points, and 12.6% for the year, outperforming the benchmark by 60 basis points. The 30 year return on the fund is a strong annualized 9.7%. The main driver of benchmark-relative outperformance for the quarter and the year was US Equity. Fixed income also outperformed its benchmark while non-us & Global equity as well as Real Estate all underperformed their benchmarks for the year. Mr. Schurter went on to discuss the highlights of manager performance within each asset class. In discussing real estate it was noted that commercial real estate has begun its recovery, that the higher leverage which hurt the BlackRock Granite Fund during the downturn should be accretive through the recovery. In referring to annual returns over the past decade Administrator Bei noted that the Fund has performed very well vs. the universe of return data during periods of economic growth and up market cycles but lagged in down market periods. He noted that the allocation to new strategies such as farmland and the Plan s additional core real estate and core plus fixed income managers should add to diversification and provide some greater downside protection during any future bear market periods. In conclusion, Mr. Lee complemented the strong absolute and benchmarkrelative returns over the fourth quarter and the year. 2. County of Sonoma preliminary notice of intent to terminate the lease agreement at 433 Aviation Boulevard, Suite Barry Palma of Cornish & Carey Commercial and Administrator Bei reviewed the item. Administrator Bei said a letter has been received from the County requesting a lease termination calculation as they are considering terminating the lease and consolidating the Audit Division into available space in the County complex. This is a potential cost reduction option being evaluated. The County has just over one and one half years left on the seven year lease agreement which has a three year extension option. Given the County is nearing the end of the lease period and it appears the major objective in terminating the lease is to save money, another option being proposed is to offer a five year extension at current market lease rates which is below the rate currently being paid based on the lease agreement. The calculated lease termination fee and five year lease extension proposals were reviewed. Mr. Palma developed a lease extension proposal in line with the current market. Mr. Palma gave a current assessment of the commercial real estate market in the Airport Business Park area. The board discussed this matter and felt renewing the lease at a lower rate would be a win-win situation, and encouraged moving forward with the proposal. Any final agreement on a lease extension would come back to the Retirement Board for final approval. Note: Trustee Rod Dole abstained from this item and left the room during the discussion. 4

5 B. PRESENTATION(S), cont.: 2. County of Sonoma preliminary notice of intent to terminate the lease agreement at 433 Aviation Boulevard, Suite 120, cont: Motion to endorse moving forward with the lease extension proposal and giving staff the authority to respond to the County as outlined. Ayes 8 Noes 0 Abstain 1 Absent 0 C. INVESTMENT COMMITTEE REPORT: Committee Chair Jerry Allen and Retirement Investment Officer Jim Failor reported on the Investment Committee meeting held on February 16, Presentation: BlackRock Realty Managing Director and Senior Portfolio Manager of the Granite Fund Jay Alexander and Managing Director Ted Koros presented an update on the organization, portfolio positioning and performance, as well as the firm s market outlook. Chairman Allen summarized the presentation stating that BlackRock had a rough performance period through the real estate downturn but that BlackRock was working to turn this around and performance was starting to improve. The manager continues to be on watch. Chairman Allen noted that the Granite Fund has historically been under-leased compared to the market but they have focused on leasing-up and are now 90% leased versus the peer average of around 88%. Leverage, which increased dramatically due to the downturn and the impact of forward commitments, has been brought down to 37% and the firm overall has a positive outlook on its position. The Granite Fund delivered strong absolute and benchmark relative returns in 2011 after commercial property values started recovering following the first quarter. Mr. Failor noted that the two major problems for the Granite Fund in 2008 and 2009 were its higher leverage and underperforming forward commitments. The negative impact of both of these should be behind us and the reduced but still higher-thanaverage leverage should be accretive to returns as valuations continue to recover. 2. Investment Consultant & Staff: a. BlackRock Granite Fund Withdrawal Queue- update and discussion. After the manager left the meeting there was a discussion regarding the withdrawal queue and whether SCERA should consider entering that queue. The Investment Committee will continue to study this question but is currently electing not to enter the queue given the improving portfolio positioning and the state of the recovery in the commercial real estate market. 5

6 C. INVESTMENT COMMITTEE REPORT, cont.: 2. Investment Consultant & Staff, cont.: b. Investment Project Plans for discussion. There is a hefty list of projects for the coming year, including an education session on inflation/ deflation. No searches are planned at this time. c. PIMCO Implementation Discussion- investment guidelines and funding allocation. Mr. Failor stated that the Investment Committee was recommending some relaxed investment guidelines for PIMCO given that they have been able to manage within these wider guidelines while adding value and maintaining a level of portfolio risk equal-to or lesser-than peers. These more relaxed guidelines include a wider range for duration management, a modestly lower minimum credit quality rating and somewhat greater use of currency management. PIMCO has also requested the use of commingled funds to gain efficient and well diversified exposure to certain sectors of the market. This is acceptable in principal but SCERA will retain the right to review and approve each commingled sector fund individually. Specific commingled funds requested by PIMCO will be reviewed at the Investment Committee s March meeting. Hewitt EnnisKnupp also studied the optimal division of the fixed income portfolio among the Plan s three managers (Western, Reams and PIMCO) and concluded that an equal division (1/3-1/3-1/3) was most appropriate. Including PIMCO in the Fund s fixed income manager line-up should add diversification and reduce the overall risk of the fixed income portfolio. Based on historical analysis weighting any one manager more heavily would not provide any significant benefit to the Fund. d. Equity Benchmark Discussion- continuation of discussion from prior Committee meeting and further analysis. HEK and staff recommended using a broader benchmark for global and non-us equities that includes small cap stocks. Changes have been made to the draft Investment Policy Statement to reflect these new benchmarks. The broader benchmarks will also be implemented for most of the Plan s non-us and global equity managers. Chairman Allen stated that adopting these new benchmarks will communicate to these managers that they should invest in the whole universe of the market and not limit their portfolios to large and mid cap stocks. Mr. Failor noted that the Plan s non-us and global equity managers will move to these new benchmarks with the exception of the Templeton non-us and global equity portfolios. 6

7 C. INVESTMENT COMMITTEE REPORT, cont.: 2. Investment Consultant & Staff, cont.: e. Investment Policy Statement- potential guideline changes for PIMCO core plus fixed income portfolio and equity benchmarks. Hewitt EnnisKnupp (HEK) and staff drafted an amended Investment Policy Statement which reflected the change in non-us and global equity benchmarks and provided for the more relaxed investment guidelines which are intended to be granted to PIMCO. Motion to approve the draft Investment Policy Statement, as presented and with the changes identified during the meeting, to reflect the adjustments to the fixed income guidelines and the shift in the equity benchmarks as recommended by HEK and staff. Ayes 9 Noes 0 Abstain 0 Absent 0 f. Hewitt EnnisKnupp Memorandum on Securities Lending- discussion. Chairman Allen provided a brief update saying SCERA is still participating in securities lending and that the collateral from the separate account lending program is invested conservatively in State Street s Navigator Prime Fund. Mr. Failor noted that SCERA is also participating in securities lending through the State Street commingled index funds in which we invest. The collateral pools for the securities lending operations for these commingled funds experienced liquidity problems as a result of the Credit Crisis. However, this should not be a problem going forward as the collateral pools are now managed more conservatively and like the Navigator Prime Fund we use in our separate account securities lending program. g. State Street Global Markets (SSGM) Managed Transition to New Non-US and Global Equity Managers. 1. Interim Management by SSGM review. SSGM successfully managed these two portfolios to within +/- 150 basis points over the interim management period. Both portfolios outperformed their respective benchmarks for the period. 2. Post Trade Analysis on Transitions- review. The cost of the transitions was much less than expected in the case of Arrowstreet, and in the case of the Calamos transition it actually made money. Both portfolios are now being managed by the new managers and are fully invested. 7

8 C. INVESTMENT COMMITTEE REPORT, cont.: 2. Investment Consultant & Staff, cont.: h. Managers on Watch December 2010 updates. 1. BlackRock Granite Fund review. 2. RREEF America III Fund review. The sale of condominiums and the leasing of apartments in the New York City Riverside South project continue to go well. Construction on the two building project should be completed over the next few weeks. i. State Street Custody and Securities Lending Contracts- update. Mr. Failor provided an update stating that the custody contract was signed in January and the securities lending contract should be finished soon. j. State Street Alameda Office Move to Sacramento- discussion. The State Street Alameda office is being closed and all of the operations from that office are being consolidated into the firm s larger Sacramento office. There should be no impact on SCERA as there should be little or no impact on the client-facing State Street staff we work with and State Street will continue to dedicate the same number of total staff working on the SCERA account. 3. Communications: a. Investment Benchmark Summary January b. On-Site Due Diligence Calendar for Draft. c. UBS AgriVest Farmland Fund Annual Shareholder Meeting, April 14, 2011 Preliminary Agenda. d. PIMCO Investment Outlook, Devil s Bargain, February e. ai-cio.com, Consultant Corner Mercer abandons public pension plans, December, f. The Fiscal Times, Companies Starting to Hire Back after Mass Layoffs, January 27,

9 D. ADMINISTRATIVE-BENEFITS COMMITTEE REPORT: As the next meeting of the Administrative Benefits Committee is on May 16, 2011, no report will be given. E. AUDIT COMMITTEE REPORT: As the next meeting of the Audit Committee is on May 18, 2011 no report was given. F. DISABILITY COMMITTEE: 1. General Discussion Opportunity to advise the Disability Committee of new matters and for Committee members to ask questions for clarification, provide information to staff, request staff to report back on a matter, or to direct staff to place a matter on a subsequent agenda. 2. Communications Gary Bei Disability Process Statistics, dated December 21, G. FINANCIAL STATEMENTS & SUMMARY: 1. Investment Performance Summary for January Mr. Failor started by commenting that the S&P 500 Index was up 2.4% in January, supported by strong corporate earnings in the US which have beat expectations for the last seven quarters and are on a glide path to do so for the most recent quarter. Importantly, growth is being generated by increases in revenue and not simply through cost cutting. The market is projecting double digit earnings growth for There were concerns regarding future inflation although inflation should continue to remain tame over the near term. Fourth quarter GDP growth is estimated at 3.2% and unemployment decreased from 9.8% to 9.4%. Large cap outperformed small cap in January and energy, information technology and industrials lead while telecommunications, consumer staples and consumer discretionary trailed. Outside the US there were concerns regarding unrest in the Middle East and the stability of oil supplies as well as monetary tightening in China. In fixed income the Treasury yield curve rose at the long end of the curve and yield-spreads on all other sectors tightened relative to Treasuries. High yield was the best performing sector with spreads to Treasuries tightening 35 basis points. 9

10 G. FINANCIAL STATEMENTS & SUMMARY, cont.: 1. Investment Performance Summary for January 2011, cont.: SCERA s return for the month was 1.6% which modestly trailed its Target Policy. The one-year return through January is 17.7% and the returns over 10 and 15 years are 4.1% and 6.9%, respectively. Mr. Failor noted that the market value of the trust exceeded $1.82 billion as of January 31 st and an estimated $1.85 billion as of mid-february. Regarding asset allocation he stated that an additional $35 million was invested in the JPMorgan Strategic Property Fund in early February and that, as a result, we are now very close to our 13% real estate target. We are temporarily overweight core real estate and underweight farmland. This will be corrected as we complete the funding of farmland and trim our core real estate exposure over time. Mr. Failor went on to comment on individual investment managers, noting that Calamos and Arrowstreet were both funded in late January. Managers trailing their benchmarks in January included Turner, Artio, INTECH, and GMO while managers leading their benchmarks included Templeton, Dodge & Cox, Jacobs Levy, Reams and Western. Highlights of benchmark relative performance were also discussed. Last, it was explained that a rebalancing was being implemented due to the strong performance of equities over recent months. Approximately $51 million is being moved from stocks to bonds and cash. 2. Monthly Financial Statement(s). There were no financial statements available for review this month. H. ADMINISTRATOR S REPORT: Administrator Bei provided the Board with the letter written by Supervisor Zane to the Board of Retirement, dated February 15, 2011, which was received on that date, after the agenda had been posted. Motion to add the topic to the agenda because there is a need to take immediate action and the need for action came to the attention of the Board subsequent to the agenda being posted. Ayes 9 Noes 0 Abstain 0 Absent 0 Trustee Jahn noted the primacy of the Board s fiduciary duties in the administration of the plan. Trustee Chrystal agreed that the key issue was the plan terms contained in the statutes. Chair Allen informed the Board that he had been contacted by the Press Democrat about Supervisor Zane s letter and had discussed with them the prohibition of release of individual member records in the County Employees Retirement Law of 1937 (CERL) and the pending court appeal. He thought the resulting Press Democrat article reasonably mentioned those points. Chair Allen 10

11 H. ADMINISTRATOR S REPORT, cont.: asked if the Board wanted to respond to Supervisor Zane s letter. Several Board members expressed the position that an explanatory response would be appropriate. Legal Counsel Neil Baker provided a summary of the case status, noting that the Board is far along in the process of obtaining judicial clarification of the CERL language. In addition, appeals court cases out of San Diego and Sacramento concerning this issue have been accepted for review. He noted that this issue is a matter of first impression for the courts, an issue on which the Board is reasonably seeking a definitive ruling, with which the Board will comply. Administrator Bei also noted that the Board is fulfilling its proper function and the Board s policy and rationale have been openly discussed, except as to limited litigation matters discussed in closed session. Trustee Dole requested that a response to Supervisor Zane also note the transparency of the Board of Retirement and the substantial information that has been and continues to be provided. A consensus was reached that a response should be sent to Supervisor Zane from Chair Allen discussing the points raised in this meeting. 1. Trustee Rod Dole s Announced Planned Retirement on May 31, Administrator Bei extended his congratulations to Trustee Dole and expressed great gratitude for Mr. Dole s years of service on the SCERA board. After the Board of Supervisors approves an interim Auditor Controller Treasurer Tax Collector, that new individual will fill the Ex- Officio role on the Retirement Board. 2. Certificate of Achievement for Excellence in Financial Reporting for the SCERA Comprehensive Annual Financial Report (CAFR) and Popular Annual Financial Report (PAFR) for the year ended December 31, Administrator Bei noted that this reward reflects the very high quality document produced by SCERA s accounting staff and recommendations on the document are always very minor. Trustee Dole commented that this is the highest form of recognition for a CAFR and PAFR. 3. County of Sonoma Voluntary Separation Incentive Program (VSIP)- review. The proposed VSIP plan, if implemented, would have a high impact on the workload for the benefits unit in the coming months. A large number of members will be making decisions about separation or retirement, and staff will be busy counseling individuals and processing retirements. The exact number of incentives that will be available is unknown at this time. 11

12 H. ADMINISTRATOR S REPORT, cont.: 4. SCERA Organization Update and Staffing Plan for Administrator Bei reviewed the overall staffing plan for SCERA which includes a flat staffing plan of 15. The staffing level of 15 compares favorably to other similar size retirement systems where the average staff is 19. The current staffing level is 13 and SCERA is going into a very busy period. The upcoming job reductions for the County could be in the range of and will create a record level of counseling demands and retirement volume in the next several months. Retirement Benefits Specialist Juanita Pena is retiring, and her last day was yesterday. Staff is working to organize the upcoming workflow around this change. It will likely take until May/ June to get a replacement hire in place. Extra-help will be used to help cover some of the support roles, but retirement counseling and processing requires a high level of experience and knowledge of retirement benefit policies. Staff members from all areas will be utilized to get through the extremely busy period. In addition, the new pension system s ability to more efficiently process retirements will be very useful during this transition. Accountant Lynn Teichert retired in January and the proposal for her position is to bring on an Investment Analyst rather than fill the Accountant position. SCERA does not have any positions on the VSIP list for the reasons noted. 5. Request for Human Resources Support to Establish an Investment Job Series. A proposal for the Investment Job Series has been sent to HR to establish Senior Investment Officer & Investment Analyst positions in order to successfully manage the growing workload in the investments area. The investment project results in the document outline the significant benefits of projects completed over the past several years. Adding staff in the investments area can actually lower costs of the retirement system through investment project results. The next step will be to meet with HR to review the proposal and get their assistance in moving the job series forward. If the SCERA project was added to the list of outstanding job series work in HR it might take one year to complete. A consultant may need to be hired as HR does not have the staff resources available to take on a project at this time. Sophia Selivanoff s work at SCERA has pulled together a large portion of the background material and analysis for the new job series which will provide a good start for HR. 12

13 H. ADMINISTRATOR S REPORT, cont.: 6. Revenue Service (IRS) Tax Determination Letter and Voluntary Compliance Program Filing. The TDL has been submitted and there is a short list of follow-up items. Staff will bring forward the SCERA follow-up items in future Retirement Board meeting agendas over the next several months. In addition, a meeting was held with the County to discuss the issues which require combined work of SCERA and the County or where the County is in the lead role. The County s work has started on reviewing these areas. 7. Resolution #101- Normal Retirement Age Amended Resolution. Mr. Jenkins explained this resolution has been drafted to make slight changes which were recommended by Hanson Bridget. The changes clarify that reaching retirement age alone is not enough; the member must also be vested. It also adds language stating reaching age 70 automatically vests a member regardless of years of service. Motion to approve Resolution #101 as written. Alys X Chrystal X Dole X Edwards (see Chrystal vote) Jahn X Pegg X Rabbitt X Stockham X Williams X Allen X Ayes 9 Noes 0 Abstain 0 Absent 0 8. SCERA Community Presentations- update. Administrator Bei reviewed the recent information presentations done by SCERA to educated community members of the retirement system. These presentations have been well received and include a variety of audiences like the Sonoma County Taxpayers Association and Community Forum presentations. 9. Annual Member Benefit Statements- update. Mr. Jenkins said that member statements have been sent out for all active members, which met staff s goal of having them out in February. Statements will be sent to inactive & deferred members in the coming months. 10. Pension Legislation- update. A pension spiking bill for PERS was reintroduced to the legislature. At this point, the County systems companion bill has not been reintroduced. Board Chair Allen will be participating in the SACRS Legislative Committee and Staff will keep apprised of any developments in the area of new legislation. 11. Annual Board and Committee Meeting Calendar- update. The calendar was updated to reflect the change of date for the May Admin-Benefits and Disability meetings, as well as the addition of Audit and Admin-Benefits meetings later in the year. 13

14 H. ADMINISTRATOR S REPORT, cont.: 12. Form 700 Reporting Requirements reporting is due to Jennifer Howze by March 25, 2010 for filing with the County Clerk s Office prior to the April 1, 2010 deadline. 13. Trustee/ Staff Training & Conferences a. CALAPRS Trustees Round Table Trustees who attended the Round Table on January 28, 2011 in San Jose will report out. b. Trustee Roundup- to be held February 28- March 1, 2011 at the Gateway Sheraton Hotel in Los Angeles, CA. c. CALAPRS General Assembly- to be held March 5-8, 2011 at the Monterey Marriot in Monterey, CA. Estimated cost of attendance is $1,000/ person. Please notify Admin Aide Jennifer Howze if you wish to attend. d. SACRS Spring Conference to be held May 10-13, 2011 at the Doubletree Resort in Santa Barbara, CA. e. National Conference on Public Employee Retirement Systems (NCPERS) 2010 Trustee Educational Seminar held from May 21-22, 2011 and the Annual Conference held from May 22-26, 2011 at the Fontainebleau Hotel in Miami, FL. Trustee Kimber Williams has expressed interest in attending this conference. Motion to approve Trustee Kimber Williams to attend the NCPERS conference in Miami, Fl. Ayes 9 Noes 0 Abstain 0 Absent 0 f. The Pension Bridge Annual to be held from April 12-14, 2011 at the Four Seasons Hotel in San Francisco, CA. 14

15 I. EXECUTIVE SESSION: (11:39 A.M. 12:12 A.M.) 1. DISABILITY COMMITTEE REPORT- Closed Session Items a. Board Action/Proposed Decisions: 1. DAVID RUST, filed 07/19/10 for a service connected disability. Motion is to deny a service connected disability. Ayes 9 Noes 0 Abstain 0 Absent 2. ARAMINTA BABCOCK, filed 08/25/10 for a non-service connected disability. Motion is to grant a non-service connected disability. Ayes 9 Noes 0 Abstain 0 Absent 3. JOHN CUMMINGS, filed 09/24/10 for a service connected disability. This case is being returned to staff for additional information. 4. JILL RAVITCH, general member who retired effective 09/08/08 with a regular service retirement. On December 17, 2010 we received a letter from Ms. Ravitch requesting that her retirement be rescinded and that she be reinstated per Code Section She is currently working as the District Attorney. Motion is that Ms. Ravitch is eligible to become an active member of the Retirement Association per Code Section b. Discussion: Ayes 9 Noes 0 Abstain 0 Absent Reviewed the February 2011 Disability Report

16 I. EXECUTIVE SESSION, cont.: (11:39 A.M. 12:12 A.M.) 2. LITIGATION: a. Pending Litigation - The Press Democrat v. Sonoma County Employees Retirement Association. b. Possible exposure to litigation pursuant to Government Code Section (b)(3)(c) Claim of Goodrich. J. REPORT OUT OF EXECUTIVE SESSION: 1. DISABILITY COMMITTEE REPORT Report was given on the cases/decisions for David Rust, Araminta Babock, John Cummings, and Jill Ravitch. The Board approved the Committee recommendations as noted. 2. LITIGATION: a. Report was given on the Press Democrat case. No action was taken. b. Report was give on the Claim of Goodrich, and direction was given to counsel regarding fiduciary insurance interactions and retention of counsel. K. COMMUNICATION(S): 1. Press Democrat Editorial: New Era on Sunday, January 9, L. GENERAL DISCUSSION MATTERS: None. 16

17 IV. NEXT MEETINGS ADMINISTRATIVE/BENEFITS COMMITTEE: Thursday, May 16, 2011 at approximately 9:30 A.M. (immediately following the Disability Committee meeting) in the SCERA Board Room located at 433 Aviation Boulevard, Suite 100 in Santa Rosa, CA. AUDIT COMMITTEE: Wednesday, May 18, 2011 at approximately 11:30 A.M. (immediately following the Investment Committee meeting) in the SCERA Board Room located at 433 Aviation Boulevard, Suite 100, Santa Rosa, CA. DISABILITY COMMITTEE: INVESTMENT COMMITTEE: RETIREMENT BOARD: Thursday, March 10, 2011 at 8:30 A.M. in the SCERA Board Room located at 433 Aviation Boulevard, Suite 100 in Santa Rosa, CA. Wednesday, March 9, 2011 at 8:30 A.M. in the SCERA Board Room located at 433 Aviation Boulevard, Suite 100, Santa Rosa, CA. The presentations scheduled for this meeting include presentations by Reams Asset Management. Regular Board Meeting: Scheduled for Thursday, March 17, 2011 at 8:30 A.M. in the SCERA Board Room located at 433 Aviation Boulevard, Suite 100, in Santa Rosa, CA. V. ADJOURNMENT The meeting was adjourned at 12:14 P.M. to the next Retirement Board meeting on Thursday, March 17, 2011 at 8:30 A.M. in the SCERA Board Room located at 433 Aviation Boulevard, Suite 100, Santa Rosa, CA. JERRY ALLEN, CHAIR Respectfully Submitted, GARY BEI SECRETARY/RETIREMENT ADMINISTRATOR By Jennifer Howze 17