OF THE. BOARD OF PENSION Cor~MISSIONERS MEETING OF NOVEMBER 15, 1984

Transcription

1 ~IINUTES OF THE BOARD OF PENSION Cor~MISSIONERS MEETING OF NOVEMBER 15, 1984 The Board of Pension Commissioners of the City of Los Angeles met in Room 155, City Hall South, on Thursday, November 15, COMMISSIONERS PRESENT: COMIUSSIONER ABSENT: DEPARTMENT OF PENSIONS: CITY ATTORNEY'S OFFICE: David Bow Woo, President Dave Velasquez, Vice President Dellene Arthur Bert Cohen Sam Diannitto Sherman L. Andelson Gary Mattingly, General Manager James J. McGuigan, Assistant General Manager Wm. S. Hutchison, Assistant General Manager Siegfried O. Hillmer, Assistant City Attorney President Woo called the meeting to order at 9:15 a.m. and referred to Item No. 2 on the Agenda. OLD BUSINESS Commissioner Cohen entered during the below discussion. The General Manager, Mr. Gary Mattingly, stated he did not have a printed Agenda for either Old or New Business. Mr. Mattingly distributed to the Board members a memorandum entitled "Nominees for Board of Pension Commissioners, Police Employee Member." Mr. Mattingly stated that the election will be held December 4 and reminded the Board that the election is being held to fill past-commissioner Moody's vacant position and that another election will have to be held in April for a full five-year term. President Woo made reference to a letter received from Stroock & Stroock & Lavan regarding the format i on of a Council of Institutional Investors. President Woo stated that a proposal has been developed outlining the purposes and operation of such a Council, and Articles of Incorporation and Bylaws have been drafted; and that since this is a worthwhile activity that the Board send a Commissioner to the meeting on the formation of a Council of Institutional Investors which will be held November 29, 1984 in Chicago, Illinois. RESOLUTION NO After discussion, Commissioner Diannitto made a motion that the Board authorize two people to attend the meeting to form a Council of Institutional Investors which will be held November 29, 1984 in Chicago, Illinois, which motion was seconded by Commissioner Arthur and adopted by the following vote: ayes, Commissioners Arthur, Cohen, Diannitto, Velasquez and President Woo - 5; noes,

2 none. This matter was brought up later in the meeting but for purposes of continuity the remainder of this discussion will be reported here. Commissioner Cohen stated he would like to attend the meeting in Chicago, November 29, and asked that if the Board is asked to help fund the formation of this Council, would i t be an appropriate expenditure. Mr. Mattingly said he will check with the City Attorney on this matter. NEW BUSINESS The General Manager stated he had no New Business. I NVESTMENTS The General Manager informed the Board that: Criterion Investment Management Company sent a letter transmitting their stocks purchased for the period ending November 9, 1984; Favia-Hill sent a letter transmitting their most recent investment review and transmittal of stocks purchased and sold for the period ending November 9, 1984; Loomis, Sayles & Company sent a letter transmitting their monthly appraisal for the period ending October 31, 1984; Wright Investors' Service sent a letter transmitting their stocks purchased and sold for the period ending November 13, 1984; SPIM sent a letter transmitting their stocks purchased and sold for the period ending November 9, 1984; and that a motion would be required for SPIM to add stocks to their Common Stock and Prudent Man Universes. STOCK PURCHASE RESOLUTION NO NEW SYSTEN GENERAL PENSION FUND After discussion by the Board it was moved by Commissioner Diannitto that the Board amend Resolution No by adding: to the Common Stock Universe, and; Consolidated Freightways Apollo Computer, Inc. Yellow Freight System, Inc. to the Prudent Man Universe, which motion was seconded by Commissioner Cohen and adopted by the following vote: ayes, Commissioners Arthur, Cohen, Diannitto, Velasquez and President \'/00-5; noes, none. The General Manager referred to a report from staff listing stocks more than 30 percent above or below cost, and data sheets from SPIM and Favia, Hill. The General Manager drew the Board's attention to his report entitled "Index

3 Funds." Mr. Mattingly explained to the Board what an index fund is, its advantages and its disadvantages and recommended that the Board: 1. Defer the decision on the use of an index fund at this time; 2. Proceed with the development of a long range asset allocation policy; and 3. Instruct staff to analyze the allocation of the January tax revenues to fixed income. Discussion evolved around the unfunded liability, and Mr. Mattingly indicated that the City has an obligation to pay it off in 53 years. Mr. Mattingly said that if inflation does not exceed 6 percent, and that if the Fund continues to make 8 percent on its investments, then the unfunded liability will be paid off over the next 53 years. Mr. Bill Budd, Favia Hill & Associates, present in the Board room, pointed out to the Board that if they invested in the highest risk category without any restraint, they could payoff the unfunded liability by the year 2,003. President Woo reminded the Board members that Bill Budd will be covering items such as this later in the day in his presentation, and that the Board needs to now handle the peripheral parts of the General Manager's report so that staff will have a response to the General Manager's recommendations. Discussion evolved around the hiring of a new bond manager, and President Woo indicated that the hiring of a new bond manager should be a high priority matter. President Woo asked if any action was required on the three recommendations made by the General Manager regarding index funds, and the General Manager stated no, just a consensus of the Board that this is the way to proceed. COMMUNICATIONS TO THE BOARD Commissioner Cohen drew the Board's attention to the NCPERS' Word from Washington newsletter entitled "First Legislation to Repeal Tax Exclusion for Employer-Paid Benefits Introduced in Both Houses of Congress," and asked Commissioner Diannitto, who is President of NCPERS, about the status of this issue. Commissioner Diannitto replied that NCPERS is involved in this matter and that they expect it to become a larger issue after the first of the year. Commissioner Cohen stated that the Board has a moral responsibility as officers of the City to become involved in this matter. President Woo referred this matter to the Board's Legislative Committee for specific recommendations as to what the Board should do. At this point in the proceedings, President Woo called for a recess which lasted for five minutes. The meeting resumed at 10:10 a.m. CLAIl1 OF BETTY PLET FOR WIDOW'S PENSION BENEFITS The General Manager informed the Board that Betty Plet, widow of deceased Article XVII disability pensioner, Gene P. Plet, has filed a claim for widow's pension benefits on July 17, Firefighter II Gene P. Plet retired February 19, 1981, on a service-connected disability pension, pursuant to provisions of Section 182, Article XVII, of the Charter. He and Betty married on June 15, Retired Firefighter Plet died on June 11, Section 183, of the City Charter, provides that:

4 ".. no widow of a unless she shall pensioner at least retirement;. " pensioner have been one year shall be entitled to a pension married to such deceased prior to the date of his Mrs. Plet since she retired. clearly does not qualify for a widow's pension under this Section was married to her late husband for only eight months before he This matter was heard before the Board on August 16, At that time, on the advice of the City Attorney, this matter was deferred and returned to staff to determine if Mrs. Plet qualified under the very special provisions of the Goins Case. The City Attorney has recommended that Mrs. Plet's application be referred to the Board for decision. The General Manager recommended that the Board deny the claim of Betty widow's pension benefits under the provisions of Section 183, Article that the Board determine that Mr. Plet's death was service-connected Betty Plet, his widow, is also not eligible for widow's pension pursuant to the provisions of the-court decision of the Goins Case and Board deny Betty Plet's claim for widow's pension. Plet for XVII and and that benefits that the Mrs. Plet was present with her representative, Mr. Ken Buzzell Firefighters of Los Angeles City. After discussion, President Woo case be referred back to Dr. Appleton, an original pension doctor, to him the transcript from today's hearing. of the United directed this and to submit PRESENTATION BY MR. BILL BUDD CONCERNING LONG RANGE ASSET ALLOCATION MODEL Mr. Bill Budd of Favia, Hill & Associates came forward for his presentation to the Board concerning long range asset allocation. President Woo recessed the meeting for five minutes. The meeting resumed at 11 :50 a.m. DISABILITY CASE - NEW - ARTICLE XVIII - 1 Detective I Beverly J. Nelson Service-connected disability pension granted, effective November 15, 1984, in the monthly amount of $1, or 50% of $3, Motion made by Commissioner Cohen and seconded by Commissioner Diannitto; ayes, Commissioners Arthur, Cohen, Diannitto, and Velasquez - 4; noes, President Woo - 1. Detective III Jerry Lee Anslow, Auto Theft Supervisor, Southwest Division, Police Department, and Lieutenant Edmond Gagnon, Medical Liaison, Police Department, testified regarding Ms. Nelson. Ms. Nelson was present and was represented by Fred Tredy, Police Protective League.

5 TRAVEL EXPENSE Approval is requested of travel expenses for President David Bow Woo, Commissioner Sam Diannitto and the General Manager Gary Mattingly in attending the Advanced Money Management Workshop at the Wharton School in Philadelphia, Pennsylvania, October 23-26, 1984 in the amounts of $1,279.13, $1,245.38, and $1,268.06, respectively. Refunds of $441.87, $ and $452.94, respectively, have been submitted. Approved. I~otion made by Commiss ioner Arthur, seconded by Commissioner Velasquez and adopted by the following vote: ayes, Commissioners Arthur, Cohen, DISCONTINUED PENSIONS - ARTICLE XVII - 6 Leslie R. Drown Police Service Retired Died Clarence L. Eads Police Disability Retired Died Cecil McDougall Police Disability Retired Died Helen M. Chase Police Widow Retired Died Flora B. Moug Police Widow Retired Died Nelba Cain Police Widow Retired Remarried Approved. Motion made by Commissioner Velasquez, and adopted by the following vote: ayes, Diannitto, Velasquez and President Woo - 5; noes, seconded by Commissioner Cohen Commissioners Arthur, Cohen, none. DISCONTINUE PENSION - ARTICLE XVIII - 1 H. W. Brittingham Police Service Retired Died Approved. Motion made by Commissioner Cohen, seconded by Commissioner Diannitto and adopted by the following vote: ayes, Commissioners Arthur, Cohen, SERVICE PENSIONS - ARTICLE XVIII - 2 POLICE Detective II Richard T. Doran Appt'd Eff: Years, 344 Days NPB: $3, % $1, Captain Thomas G. Hays Appt'd Eff: Years, 274 Days NPB: $5, % $3, Approved. Arthur and Diannitto, Motion made by Commissioner Diannitto, seconded by Commissioner adopted by the following vote: ayes, Commissioners Arthur, Cohen, Velasquez and President Woo - 5; noes, none.

6 WIDOW'S OR \VIDOvIER'S PENSION - ARTICLE XVII - 1 Name Member's Class Monthly Salary Rate Effective Monthly % Date Amount Donna L. McDougall (Cecil L. McDougall) Police $3, Disability 40% $1, Approved. Motion made Velasquez and adopted by Diannitto, Velasquez and by Commissioner Arthur, seconded by Commissioner the following vote: ayes, Commissioners Arthur, Cohen, President Woo - 5; noes, none. ELIGIBLE SURVIVING SPOUSE'S PENSIONS - ARTICLE XVIII - 2 Member's Class Normal Pen. Base Rate _%_ Effective Date Monthly Amount Phyllis E. Brittingham (H. W. Brittingham) Police Service $ % 10-t6-84 l1ember 's CIL Total $ $1, Mary E. Cleary (Lawrence A. Cleary) Fire Service $1, % Member's CIL Total Approved. Motion made by Commissioner Velasquez, seconded by and adopted by the following vote: ayes, Commissioners CONSERVATORSHIP - ARTICLE XVII - 1 $ , $1, Commissioner Cohen Arthur, Cohen, A certified copy of the Letters of Conservatorship, issued in the Superior Court of the State of California, County of Sacramento, Case Number 96656, appointing June Wiklund, Conservator of the Person and Estate of Roy C. Wiklund on August 14, 1984, has been filed in this office. Pension payments in the amount of $ to be paid to June Wiklund. Approved. Motion made by Commissioner Cohen, seconded by Commissioner Diannitto and adopted by the following vote: ayes, Commissioners Arthur, Cohen, CONSERVATORSHIP - ARTICLE XVIII - 1 A certified copy of the Letters of Conservatorship, issued in the Superior Court of the State of California, County of Orange, Case Number A , appointing Kenneth M. Cleary, Conservator of the Person and Estate of Mary E. Cleary on August 14," 1984, has been filed in this office. Pension payments in the amount of $1, to be paid to Kenneth M. Cleary. Approved. Mot ion made by Commissioner Arthur and adopted by the following vote: Diannitto, Velasquez and President Woo - 5; Diannitto, seconded by Commissioner ayes, Commissioners Arthur, Cohen, noes, none.

7 FINDINGS OF FACT - ARTICLE XVIII - 4 FIRE A. Gerald R. Foust B. Thomas P. Lewis POLICE C. Larry R. Holdridge D. Daniel M. Samaniego Approved. Motion made by Commissioner Arthur, seconded by Commissioner Velasquez and adopted by the following vote: ayes, Commissioners Arthur, Cohen, President Woo asked the General Manager to send a Favia Hill thanking him for his presentation today. General Manager to also send a letter to Mellon Bank made before the Board, November 8, letter to Mr. Bill Budd of President Woo asked the for the presentation they At this point in the proceedings, President Woo recessed the meeting for lunch. The meeting resumed at 1:55 p.m. President Woo said he has received a recommendation from the Board's Investment Committee to take action in respect to Favia Hill & Associates and that the recommendation is to allocate Favia's fund to Loomis, Sayles & Company. Commissioner Cohen made a motion to accept the recommendation of the Board's Investment Committee, which motion was seconded by Commissioner Diannitto and adopted by the following vote: ayes, Commissioners Arthur, Cohen, Diananitto, Velasquez and President Woo - 5; noes, none. President Woo asked the General Manager to contact Mr. Jim Favia to coordinate the transfer of assets. Commissioner Diannitto asked to put them on notification performance. staff to track SPIM's performance more closely and that the Board is looking at their relative Commissioner Cohen asked Ms. Valerie Fields, Mayor's Office, present in the Board room, if President Pat Russell, City Council, has made her appointment to the Expert Real Estate Committee. Ms. Fields said she will let the Board know. The General Manager, Mr. Gary Mattingly, left the Board room for the day. Mr. James J. McGuigan assumed the position of Acting General Manager. PRESENTATION ON TARP PROGRAM Lt. Edmond Gagnon came forward for his presentation on the Police Department's Temporarily Assigned Rehabilitating Personnel Program (TARP). Lt. Gagnon introduced to the Board, Captain Larry Bivens, Chairman of the Committee, and Dr. Martin Reiser, Director of Behaviorial Sciences at the Police Department. Lt. Edmond Gagnon explained to the Board that the TARP program was created for police officers under stress to be rehabilitated to go back to work. Dr. Reiser came forward and stated to the Board that the number one objective of his people, their primary role and commitment, is to assist the disabled employee in returning to the Department in a productive role. At the disability hearings, Lt. Gagnon is queried by the Board members on whether or not the Police

8 .. Department has a job available for a disability applicant, and if so for the position description. Sometimes, when Lt. Gagnon is queried by the Board he recommends that the disability applicant would be a good candidate for the TARP program. Because of this, the Board had wanted a better understanding of the TARP program. President Woo thanked Lt. Gagnon for his presentation today, stating that the Board now has a better understanding of the program and that they are impressed by its success. At this point in the proceedings, President Woo called for adjournment. The meeting adjourned at 3:10 p.m. MagerecretrY