CITY OF FRESNO RETIREMENT SYSTEMS REGULAR JOINT MEETING OF THE RETIREMENT BOARDS MINUTES

Transcription

1 CITY OF FRESNO RETIREMENT SYSTEMS REGULAR JOINT MEETING OF THE RETIREMENT BOARDS MINUTES December 15, 2009 The Employees and Fire and Police Retirement Boards met in a joint session in Retirement Office, 2828 Fresno St., 2nd Fl., Board Chamber, Room 202, Fresno, California at the hour of 2:05 PM on the day above written. ROLL CALL AT 2:06 PM Members Present for the EMPLOYEES RETIREMENT BOARD Ken Nerland, Marvell French, Carla Lombardi, Danny Aguirre Members Absent: Jeff Beatty Members present for the FIRE AND POLICE BOARD Brian Burry, Paul Cliby, Carla Lombardi, Ken Nerland, Oscar Williams Members absent: Also Present: Stanley McDivitt-Retirement Administrator and Russ Richeda, Legal Counsel, Kathleen Riley, Asst Retirement Administrator, Yvonne Arellano, Retirement Benefits Manager, Pattie Laygo, Executive Assistant APPROVE MINUTES Approve minutes of November 16, 2009, Regular Meeting of the Joint Retirement Boards. ON MOTION by Member Lombardi seconded by Member French to approve the minutes of November 16, 2009, Regular Meeting of the Joint Retirement Boards, DULY CARRIED RESOLVED ON MOTION by Member Cliby seconded by Member Williams to approve the minutes of November 16, 2009, Regular Meeting of the Joint Retirement Boards, DULY CARRIED RESOLVED APPROVE AGENDA Approve agenda of December 15, 2009, Regular Meeting of the Joint Retirement Boards. ON MOTION by Member French seconded by Member Lombardi to approve the agenda of December 15, 2009, Regular Meeting of the Joint Retirement Boards, DULY CARRIED RESOLVED ON MOTION by Member Cliby seconded by Member Williams to approve the agenda of December 15, 2009, Regular Meeting of the Joint Retirement Boards, DULY CARRIED RESOLVED 485

2 TIMED SCHEDULED HEARINGS AND MATTERS 2:05 PM Consider and accept the Comprehensive Annual Financial Reports ( CAFR ) for the Fire and Police Retirement System and the Employees Retirement System for the fiscal years ended June 30, 2009 and 2008, review agreed upon conditions reports with Rosalva Flores of Brown Armstrong Accountancy Corporation, and authorize distribution. The Board received report of agreed upon conditions by Rosalva Flores of Brown Armstrong Accouncy Corporation and accepted the Comprehensive Annual Financial Reports for both Systems and authorized distribution. ON MOTION by Member French seconded by Member Aguirre to accept and authorize distribution of the Comprehensive Annual Financial Reports for Both Systems, DULY CARRIED RESOLVED ON MOTION by Member Cliby seconded by Member Lombardi to accept and authorize distribution of the Comprehensive Annual Financial Reports for Both Systems, DULY CARRIED RESOLVED 2:15 PM 1. Consider updated Surplus Projection Reports as prepared by The Segal Company, the Boards Actuary as recommended by the Administrative Committee. The Board reviewed the revised surplus projection reports for Both Systems as provided by The Segal Company. Mr. Andy Yeung was available for questions by telephone conference and briefly commented. The Boards discussed and considered three new alternative market investment return scenarios of 16%, 20% and 8.25% under the assumed, optimistic and pessimistic scenarios, and an alternative approach of using a seven-year smoothing period (instead of the current five-year period) in developing the actuarial value of assets, extending the projection for two more years from June 30, 2014 to the June 30, 2016 valuation, and adjusting the amoritization period for unfunded actuarial accrued liabilities from the 15-year period to a 10-year period with surplus continuing amorization over 15 years. The Administrator reported that revised reports will be submitted to the Mayor and City Council. ON MOTION by Member French seconded by Member Lombardi to accept revised surplus projection reports for both systems, DULY CARRIED RESOLVED 486

3 2:15 PM ON MOTION by Member Nerland seconded by Member Cliby to accept revised surplus projection reports for both systems, DULY CARRIED RESOLVED Consider Legal Opinion as to Calculation Matters Concerning the Employer Contribution Offsets For Both Systems and the Member Contribution Offset for the Employees Retirement System. ACTION: Accepted The Board considered and reviewed the legal opinion as presented by Russ Richeda and concluded the Board possesses the discretion to determine the factors to be used by the actuaries in determining the contribution offsets, including the factor used in projecting the rate of return on the actuarial surplus for the following year, and recommended that the actuary use the projected actuarial rate of return, beginning with the June 30, 2010, actuarial valuation. ON MOTION by Member French seconded by Member Aguirre to accept opinion and recommend that the actuary use the projected actuarial rate of return, beginning with the June 30, 2010, actuarial valuation, DULY CARRIED RESOLVED ON MOTION by Member Nerland seconded by Member Lombardi to accept opinion and recommend that the actuary use the projected actuarial rate of return, beginning with the June 30, 2010, actuarial valuation, DULY CARRIED RESOLVED A. CONSENT CALENDAR 1. Confirm date for the next Regular Meeting of the Joint Retirement Boards scheduled on January 13, ON MOTION by Member French seconded by Member Lombardi to approve the consent calendar, DULY CARRIED RESOLVED ON MOTION by Member Cliby seconded by Member Nerland to approve the consent calendar, DULY CARRIED RESOLVED AYES: NOES: Burry, Cliby, Lombardi, Nerland, Williams 487

4 B. EMPLOYEE PERSONNEL ISSUES C. STAFF INITIATED ITEMS 1. Discussion and consideration regarding closure of the Retirement Office during the last week in December and furlough of staff. The Board reviewed City Charter and Board discretion with Administrator and legal counsel and extensively discussed and considered City budget, workload, member and retiree services, and employee labor MOU provisions. Mr. Jacky Parks, President of FPOA, reported that the City of Fresno and various labor groups are actively working with the City of Fresno to consider the implementation of an Early Retirement Incentive, which could increase Retirement Staff workload. ON MOTION BY Member Aguirre seconded by Member French that there be no furlough of Retirement Staff and the Retirement Administrator to coordinate with the City of Fresno and Bargaining Groups, MOTION FAILS BY THE FOLLOWING VOTE: AYES: NOES: ABSTAIN: ABSENT: Aguirre, French Lombardi, Nerland Beatty ON MOTION BY Member Lombardi seconded by Member French that the Retirement Office remain open during December 24, and December 28-31, 2009, the Retirement Administrator to coordinate a 40-hour furlough to staff by June 30, 2010, and the Retirement Administrator to coordinate with the employee labor organizations to consider a side letter agreement that excludes the Retirement Office staff from furlough, DULY CARRIED RESOLVED BY THE FOLLOWING VOTE: AYES: Nerland, French, Lombardi NOES: Aguirre ON MOTION BY Member Williams seconded by Member Cliby that there be no furlough of Retirement Staff and the Retirement Administrator to coordinate with the City of Fresno and Bargaining Groups, AYES: Burry, Cliby, Williams NOES: Nerland, Lombardi D. BOARD INITIATED ITEMS 1. Consider status under the Fresno Municipal Code regarding applications to convert service retirements to disability retirements. The Boards reviewed background of the issue, accepted memorandum and concluded that when an application to convert a service retirement to a disability retirement is filed 488

5 concurrently with or subsequently to the application for service retirement, application may continue to be processed and adjudicated after the applicant's service retirement. ON MOTION by Member French seconded by Member Lombardi to accept memorandum by legal counsel that concludes when an application to convert a service retirement to a disability retirement is filed concurrently with or subsequently to the application for service retirement, application may continue to be processed and adjudicated after the applicant's service retirement, DULY CARRIED RESOLVED ON MOTION by Member Cliby seconded by Member Lombardi to accept memorandum by legal counsel that concludes when an application to convert a service retirement to a disability retirement is filed concurrently with or subsequently to the application for service retirement, application may continue to be processed and adjudicated after the applicant's service retirement, DULY CARRIED RESOLVED Consider recommendation from the Investment Committee to terminate Aberdeen Asset Management and transition the holdings to the Prudential Enhanced Fixed Income Portfolio Utilizing Prudential Investment Management Transition Services. The Boards reviewed and discussed the staff report and recommendation of the Investment Committee. ON MOTION by Member Aguirre seconded by Member French to approve the termination of Aberdeen Asset management Inc effective December 18, 2009, and appoint Producential Investment Mangement to transition the assets into the Prudential Enhanced Fixed Income portfolio, DULY CARRIED RESOLVED ON MOTION by Member Cliby seconded by Member Lombardi to approve the termination of Aberdeen Asset management Inc effective December 18, 2009, and appoint Producential Investment Mangement to transition the assets into the Prudential Enhanced Fixed Income portfolio, DULY CARRIED RESOLVED E. GENERAL DISCUSSION 1. Report by the Retirement Administrator of ongoing projects and Committee actions. The Board received report and update from the Administrator regarding completion of the audit, CAFRs, CFRS projects, disability procedures, RFI Consult Info Technology, early retirement 489

6 incentive experience studies, due diligence to Benchmark. Report by Legal Counsel of pending legal actions and updates, The Board received updates to contract for outside tax counsel, disability retirement, and 415 requirement. F. INFORMATION ONLY ITEMS 1. December 9, 2009, Media Release, Fresno City Manager Souza Announces Resignation December 6, 2009, Governor to give CalPERS more funds than it asked for. (SacBee,com) 3. December 4, 2009, Newspaper Company Revises Pension Loss from Trading Scandal. (PlanSponsor.com) G. UNSCHEDULED ORAL COMMUNICATIONS H. PROPOSED AGENDA ITEMS FOR NEXT BOARD MEETING I. PUBLIC COMMENTS J. ADJOURNMENT 3:30 p.m. Ken Nerland Employees Retirement Board Brian Burry Fire and Police Retirement Board 490