BOARD OF RETIREMENT FRESNO COUNTY EMPLOYEES RETIREMENT ASSOCIATION. December 21, 2011

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1 Trustees Present: BOARD OF RETIREMENT FRESNO COUNTY EMPLOYEES RETIREMENT ASSOCIATION December 21, 2011 Michael Cardenas Nick Cornacchia Franz Criego Vicki Crow Eulalio Gomez Phil Larson Regina Wheeler for John Souza Trustees Absent: Steven Jolly John Souza Others Present: Connie Perez, Brown Armstrong Eric Berman, Brown Armstrong Brooke DeCuir-Baird, Brown Armstrong Harvey Leiderman, Reed Smith via tele-conference Steve Toll, Cohen Milstein via tele-conference Conor Hinds, Supervising Accountant Pamela Fine, Senior Accountant Kaying Vang, Accountant Loretta Morales, Account Clerk Mary Maggard, Account Clerk Kelly Prinz, Retirement Benefits Manager Marta Gonzales, Supervising Account Clerk Art Wille, Deputy County Counsel Becky Van Wyk, Assistant Retirement Administrator Elizabeth Avalos, Administrative Secretary 1. Call to Order Chair Criego called the meeting to order at 8:34 AM. 2. Pledge of Allegiance Recited. 3. Public Presentations None. Consent Agenda/Opportunity for Public Comment Becky Van Wyk, Assistant Retirement Administrator, pulled Consent Item 8 for discussion. A motion was made by Trustee Crow, seconded by Vice Chair Gomez, to Approve Consent Items 4-7 and VOTE: Unanimous (Absent Jolly)

2 *4. Approve the December 7, 2011 Retirement Board Regular Meeting Minutes *5. Summary of monthly statistics from the Retirement Association Office on buybacks, retirement benefit estimates, public service, age adjustments, final compensation calculations, and disability retirement applications for November 2011 *6. Update of Board of Retirement directives to FCERA Administration *7. Final decision in the case of Marsha Stillman v. Board of Retirement of the Fresno County Employees Retirement Association *8. Popular Annual Financial Report (PAFR) of the Fresno County Employees Retirement Association for the year ended June 30, Becky Van Wyk, Assistant Retirement Administrator, advised the Board that the PAFR will be submitted to the Government Finance Officers Association (GFOA) as part of a competition similar to the current CAFR practice. A motion was made by Vice Chair Gomez, seconded by Trustee Crow, to Accept Item 8 as presented. VOTE: Unanimous (Absent Jolly) *9. Travel Request from Vice Chair Gomez to attend the Fifth Annual Pension Trustee Roundup February 27-28, 2012 in Los Angeles, CA ($ registration fee) and to receive an advance in the amount of $ for hotel accommodations *10. Approve Classification of County Earn Codes *11. Adopt Board Decision/Agreement regarding Gary Johnson s request to have certain CalWIN payments included in his final compensation At the request of Becky Van Wyk, Assistant Retirement Administrator, Item 13 was heard at this time.

3 3 12. Discussion and appropriate action on FCERA s Audited Financial Statements and Comprehensive Annual Financial Report (CAFR) for the fiscal year ended June 30, 2011 presented by Connie Perez, CPA Audit Partner Brown Armstrong Please see discussion following Item Discussion and appropriate action on County s action to terminate the purchase of Public Service Credit and to discontinue the waiver practice A motion was made by Vice Chair Gomez and seconded by Trustee Crow to acknowledge and implement the County s resolution according to its terms and to direct staff to discontinue the waiver practice for anyone who does not have a waiver request on file as of the date of the Board s action [12/21/11] and that no new window period be opened before the Board s actions become final. VOTE: Unanimous (Absent Jolly) 14. Discussion and appropriate action on Professional Services Agreement with Alliance Resource Consulting for Executive Search Services A motion was made by Trustee Crow, seconded by Trustee Cardenas, to Approve the Professional Services Agreement with Alliance Resource Consulting as presented. VOTE: Unanimous (Absent Jolly) 12. Discussion and appropriate action on FCERA s Audited Financial Statements and Comprehensive Annual Financial Report (CAFR) for the fiscal year ended June 30, 2011 presented by Connie Perez, CPA Audit Partner Brown Armstrong Connie Perez, Audit Partner, Brown Armstrong, summarized the purpose of the audit and gave a brief overview of the audit process and responsibilities noting that audit tests are designed to identify high risk areas such as investments and employer and employee contributions that have potential for material errors, irregularities, and fraud. Brooke DeCuir-Baird, CPA Brown Armstrong, stated that FCERA s financial statements are fairly presented in accordance with generally accepted accounting principles and earned an unqualified ( clean ) opinion. She noted that the opinion is the highest opinion that an independent audit firm can issue and congratulated the FCERA team. Ms. Perez stated that two recommendations were made to help FCERA make improvements and achieve operational efficiencies. It was noted that findings and recommendations are intended to improve the internal control structure or result in other efficiencies. The Brown Armstrong team thanked the FCERA staff for their diligence in collecting and supplying information timely when requested. Eric Berman, Brown Armstrong, reported on upcoming GASB standards that may have an impact on FCERA. Discussions ensued.

4 4 Becky Van Wyk, Assistant Retirement Administrator, expressed her appreciation for the knowledge gained through the audit process and thanked the Brown Armstrong firm and congratulated the FCERA accounting staff for their efforts. A motion was made by Trustee Crow, seconded by Vice Chair Gomez, to Accept FCERA s Audited Financial Statements and Comprehensive Annual Financial Report (CAFR) for the fiscal year ended June 30, 2011 as presented. VOTE: Unanimous (Absent Jolly) 15. Discussion and appropriate action on the designation of Agent to execute contracts and administrative documents on behalf of the Board A motion was made by Vice Chair Gomez, seconded by Trustee Cornacchia, to Approve a resolution designating Becky Van Wyk, Assistant Retirement Administrator, as agent to execute contracts and administrative documents on behalf of the Board. VOTE: Unanimous (Absent Jolly) 16. Discussion and appropriate action on agreement between FCERA and Superior Courts of California, Fresno for the Administration of Retirement Benefits Becky Van Wyk, Assistant Retirement Administrator, opened discussions with a brief overview of the proposed agreement noting her concerns with Item 4 of the terms. She noted that direct access to the employment records was requested as an efficient method of obtaining information required to calculate service and retirement benefits. The alternative is to request the information from Court employees. Ms. Van Wyk recommended that the Board approve the agreement as presented with the caveat that Administration would return to the Board before incurring costs to obtain the information. A motion was made by Trustee Crow, seconded by Vice Chair Gomez, to Approve the agreement as presented. VOTE: Unanimous (Absent Jolly) Becky Van Wyk, Assistant Retirement Administrator, pulled Closed Session Items 17.A.1., 17.A.2., and 17.D.1. as there was nothing to discuss. 17. Closed Session: A. Conference with Legal Counsel Actual Litigation - pursuant to G.C (a) 1. Fresno County Employees Retirement Association v. Countrywide Financial Corporation, et al., United States District Court Central District of California Case No. CV PA-SHX 2. Stephanie Mallen, Individually, and et al. v. Alphatec Holdings Inc., et al., United States District Court Southern District of California Case No. 3:10-CV-1673-BEN- JMA

5 5 B. Conference with Legal Counsel Potential Litigation pursuant to G.C (c) (one case) C. Disability Retirement Applications Personnel Exception (G.C ): 1. Laura DaSilva 2. Darlene Ford 3. Susan A. Valenzuela D. Personnel (G.C ) 1. Public Employment Title: Retirement Administrator 18. Report from Closed Session 17.A A B. 17.C C C D.1. Pulled. Pulled. Decision Approve recommendation to seek status as co-lead plantiff for securities fraud litigation regarding Central European Distributor Corp. M Crow. S Criego. VOTE: Unanimous (Absent Jolly) DaSilva Decision To direct Administration to notify the applicant that the service connected disability application will be denied unless the applicant requests a hearing in accordance with the Policy Re Administrative Proceedings and Appeals to the Board. M Gomez. S Crow. VOTE: Unanimous (Absent Jolly) Ford Decision - To direct Administration to notify the applicant that the service connected disability application will be denied unless the applicant requests a hearing in accordance with the Policy Re Administrative Proceedings and Appeals to the Board. The Board has agreed to Approve a non-service disability retirement benefit should the applicant choose to pursue the option. M Gomez. S Crow. VOTE: Unanimous (Absent Larson, Jolly) Nothing to Report. Pulled. 19. Report from FCERA Administration Administration reported on the following: 1. Executed a side-letter agreement with Common Sense Investment Management regarding new investment terms and obligations that favor FCERA. 2. The deadline to confirm attendance at the CALAPRS 2012 General Assembly is January 20, Nominations for the Special Election close December 28, 2011 at 5:00 PM. 20. Report from County Counsel Nothing to report.

6 21. Board Member Announcements or Reports 6 Trustee Crow commented on the December 8, 2011 meeting regarding the Retirement Administrator position. The Board requested that Administration agendize the issue for discussion at an upcoming Regular meeting. There being no further business the meeting adjourned at 10:07 AM. Franz Criego Chair to the Board