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BOARD OF RETIREMENT
FRESNO COUNTY EMPLOYEES’ RETIREMENT ASSOCIATION
“Our mission is to administer the retirement benefits for the members and beneficiaries in a prudent, accurate, timely and cost-effective manner, while administering fund assets in a manner that achieves investment and funding objectives within prudent levels of risk”
November 5, 2014
REGULAR MEETING AGENDA MINUTES
Trustees Present:
Marion Austin Laura P. Basua Judith Case McNairy
Dr. Rod Coburn, III Robert Dowell Eulalio Gomez
Steven Jolly
Trustees Absent:
Vicki Crow
Staff and Services Providers Present:
Jeffrey MacLean, Wurts & Associates
Harvey Leiderman, Reed Smith – via tele-conference
Dean Stuckenschmidt, County Counsel
Donald Kendig, Retirement Administrator
Becky Van Wyk, Assistant Retirement Administrator
Elizabeth Avalos, Administrative Services Assistant
Members of the Public that Addressed the Board:
Robert Skowronski, FCERA Member
Barigye McCoy, FCERA Member
Jon Endara, FCERA Member
Henry Lopez, FCERA Member
Ginger Rainey, FCERA Member
David Wyatt, FCERA Member
Carolyn Harvey, FCERA Member
Ron Madsen, FCERA Member
Julie Hornback, REFCO
Bob Solis, FCERA Member
Kathy Cleaver, FCERA Member
Joy Clark, FCERA Member
John Souza, FCERA Member
Les Jorgensen, FCERA Member
1. Call to Order
Chair Coburn called the meeting to order at 8:38 AM.
2. Pledge of Allegiance
Recited.
3. Public Presentations
None.
Consent Agenda/Opportunity for Public Comment
A motion was made by Trustee Gomez, seconded by Trustee Basua, to approve Consent Items 4-17 as presented. VOTE: Unanimous (Absent – Crow)
*4. October 1, 2014 Retirement Board Regular Meeting Minutes
RECEIVED AND FILED; APPROVED
*5. October 15, 2014 Retirement Board Special Meeting Minutes
RECEIVED AND FILED; APPROVED
*6. October 15-16, 2014 Retirement Board Off-Site Educational Meeting Minutes
RECEIVED AND FILED; APPROVED
*7. Retirements
RECEIVED AND FILED; APPROVED
Name / Department / Yrs of SvsMario Alvarado / Library / 23.83
Mary L. Anaya / CA Superior Courts, Deferred / 6.89
James W. Backlund / Behavioral Health / 14.16
Cynthia S. Calvert / Public Defender, Deferred / 11.32
Adelaida G. Carrizales / Department of Social Services / 16.55
Paul L. Connor / Library / 10.00
Janet L. Dailey / Public Works and Planning / 12.89
Saundra DiNuzzo / CA Superior Courts / 10.87
David Warren Evans / County Counsel, Deferred / 5.90
Dawn L. Evans / Behavorial Health / 18.00
Rosemary Garcia / Behavioral Helath / 19.66
Karen Garren / Community Health, Deferred / 6.26
Sally A. Godfrey / Public Works & Planning / 35.20
Jeffrey Hamilton / CA Superior Courts, Deferred / 10.00
Janie Hernandez / Child Support Services / 13.34
Joseph E. Jules / Behavorial Health, Deferred / 23.63
Georgia M. Kawamoto / Sheriff, Deferred / 7.91
Retirements (Continued)
Melissa A. Kubiak / Internal Services / 15.49
Bryan Lock / Public Works and Planning / 19.14
Patrice Mack / Sheriff / 23.90
Donna Miller / Public Defender / 18.08
Maria G. Morales / Department of Social Services / 25.37
Russell L. Pandukht / District Attorney / 25.37
Aleatha Parks / Department of Social Services / 27.24
Karen Rea / Dept of Social Services, Deferred / 12.38
Teri K. Roland / CA Superior Courts, Deferred / 8.58
Carmen Romero / Public Defender / 25.18
Arrie Smith / Behavioral Health / 13.40
Phyllis J Stewart / Community Health / 20.49
Jesus A. Torres / Department of Social Services / 25.83
Noutoua Vang / Department of Social Services / 26.07
Kathy Wagner / Department of Social Services / 15.67
Janice G. Wells / FCERA, Deferred / 2.99
Hector Yanez / California Superior Courts / 16.55
*8. Public Records Requests and/or Retirement Related Correspondence from Ron Madsen, FCERA Member; Les Jorgensen, REFCO; and Hank Retford
RECEIVED AND FILED
*9. Opening Appellate Brief ~ Gary Johnson
RECEIVED AND FILED
*10. SACRS Business Meeting Agenda
RECEIVED AND FILED
*11. Budget Status for the Quarter ended September 30, 2014
RECEIVED AND FILED
*12. FCERA Cash Flow position as of September 2014
RECEIVED AND FILED
*13. Most recent investment returns, performance summaries and general investment information from investment managers
RECEIVED AND FILED
*14. Press Release: The Rockefeller Group to Acquire Majority Interest in TA Realty
RECEIVED AND FILED
*15. Request of Retirement Office Closure for December 2014 Holiday
RECEIVED AND FILED; APPROVED
*16. Securities Lending Schedule of Borrowers
RECEIVED AND FILED; APPROVED
*17. Invesco Core Real Estate ~ Ratification of Advisory Committee Members
RECEIVED AND FILED; APPROVED
18. Discussion and appropriate action on Retirement Administrator Employment Agreement with Donald Kendig
The Board discussed the mutual agreements, covenants and conditions contained in the employment agreement.
A motion was made by Trustee Jolly, seconded by Trustee Austin, to approve the Retirement Administrator Employment Agreement with Donald Kendig as presented.
The Board heard from and engaged in discussion with FCERA Members Robert Skowronski, Jon Endara, and Barigye McCoy as well as Donald Kendig, Retirement Administrator candidate.
The question was called. Moved by Trustee Gomez and Seconded by Chair Coburn. VOTE: Unanimous (Absent – Crow)
The motion was restated as follows:
To approve the Retirement Administrator Employment Agreement with Donald Kendig as presented. ROLL CALL VOTE: Yes – Austin, Basua, Case McNairy, Coburn, Jolly. No – Dowell, Gomez. (Absent – Crow)
RECEIVED AND FILED; APPROVED
19. Discussion and appropriate action on Donald Kendig, Retirement Administrator, Employment Start Date
A motion was made by Trustee Austin, seconded by Trustee Dowell, to approve the Retirement Administrator start date of November 5, 2014 [effective immediately]. VOTE: Unanimous (Absent – Crow)
RECEIVED AND FILED; APPROVED
Donald C. Kendig was sworn-in as the Retirement Administrator by Elizabeth Avalos, Administrative Services Assistant, and took his place at the dais.
20. Discussion and appropriate action on the designation of Agent to execute contracts and administrative documents on behalf of the Board
The Board heard from and engaged in discussion with Staff with direction to include “subject to the provisions of the Board of Retirement Charter” to Section one of the Resolution. Staff agreed.
A motion was made by Trustee Gomez, seconded by Trustee Dowell, to adopt the Resolution, as modified, authoring Donald Kendig Agent of the Board of Retirement and of the Fresno County Employees’ Retirement Association. VOTE: Unanimous (Absent – Crow)
RECEIVED AND FILED; APPROVED
21. Discussion and appropriate action on Non-Vested Health Benefit – Service Retirement Pending Disability Determination
Prior to the discussion and on the advice of County Counsel, Trustee Case McNairy recused herself from the Non-Vested Health Benefit discussion.
After hearing from FCERA Members Jon Endara, Henry Lopez, and Ginger Rainey, and at the direction of the Board’s legal counsel, the Trustees moved to Closed Session for further discussion.
Closed Session:
· Conference with Legal Counsel – Significant exposure to litigation – pursuant to G.C. 54956.9(d)(2) – Conference with Legal Counsel – Significant exposure to litigation (one case)
Report from Closed Session:
No reportable action.
The Board heard from and engaged in discussion with Staff, Board Counsel, and FCERA Members; David Wyatt, Carolyn Harvey, Robert Skowronski, Ron Madsen, Julie Hornback, Bob Solis, Kathy Cleaver, Joy Clark, John Souza, and Les Jorgensen.
a.) A motion was made by Trustee Jolly, seconded by Trustee Gomez, to suspend paying non-vested Health Benefit 2 as of November 1, 2014. VOTE: Yes – Austin, Basua, Coburn, Dowell, Gomez, Jolly. Recuse – Case McNairy. (Absent – Crow)
b.) A motion was made by Trustee Jolly, seconded by Trustee Austin, to suspend the non-vested Health Benefit 2 for new Retirees entering payroll for the time after October 31, 2014, regardless of date of retirement. VOTE: Yes – Austin, Basua, Coburn, Dowell, Gomez, Jolly. Recuse – Case McNairy. (Absent – Crow)
c.) A motion was made by Trustee Jolly, seconded by Trustee Gomez, to, in accordance with FCERA’s Overpayment of Benefits Policy, not seek recovery of the overpayments from individual retirees, based on the system error that occurred in 2004 and was not discovered until this year. VOTE: Yes – Austin, Basua, Coburn, Dowell, Gomez, Jolly. Recuse – Case McNairy. (Absent – Crow)
d.) A motion was made by Trustee Jolly, seconded by Trustee Gomez, to carry the deficit in the Health Benefit 2 account forward so that if, in the future, there are excess earnings to credit to the account it will go first to restoring the deficit. VOTE: Yes – Austin, Basua, Coburn, Dowell, Gomez, Jolly. Recuse – Case McNairy. (Absent – Crow)
e.) A motion was made by Trustee Jolly, seconded by Trustee Basua, to apply FCERA’s Interest Crediting Policy to the error correction, and report the correction as of July 1, 2013 (FY 2014) for financial and actuarial reporting purposes. VOTE: Yes – Austin, Basua, Coburn, Dowell, Gomez, Jolly. Recuse – Case McNairy. (Absent – Crow)
The Board directed Staff to review the Interest Crediting Policy and to return with any recommended changes. In addition, the Board directed Staff to have Brown Armstrong audit the reserve balances back to 2004. Staff agreed.
22. Discussion and appropriate action on FCERA Policy Regarding Placement Agent Disclosure
Jeffrey MacLean, Wurts & Associates, opened discussions with a brief summary of the proposed changes to the language contained in the policy. The changes are intended to clarify and streamline the process going forward. It was noted that the revised policy was reviewed by FCERA Administration as well as external counsel to ensure that the revisions are in compliance with all applicable legislation.
A motion was made by Trustee Gomez, seconded by Trustee Case McNairy, to approve the FCERA Policy Regarding Placement Agent Disclosure as presented. VOTE: Unanimous (Absent – Crow)
RECEIVED AND FILED; APPROVED
23. Discussion and appropriate action on Securities Lending Vehicle Recommendation
Jeffrey MacLean, Wurts & Associates, opened discussions by reminding the Board that, in August of 2014, Northern Trust notified its clients that the securities lending cash collateral pool “CoreUSA,” which FCERA participates in, will be terminated in early 2015. Wurts is recommending the Board select the NILAP Fund as the new collateral investment vehicle. Following appropriate discussion:
A motion was made by Trustee Austin, seconded by Trustee Dowell, to approve Securities Lending Vehicle recommendation as presented. VOTE: Unanimous (Absent – Crow)
RECEIVED AND FILED; APPROVED
24. Discussion and appropriate action on Brandywine Global Investment Management Contracts
Jeffrey MacLean, Wurts & Associates, opened discussions by reminding the Board that, at the August 7, 2014 meeting, it approved the contract discussions with Brandywine for management of the Plan’s 7% allocation to global sovereign bonds. In addition, at the September 3, 2014 meeting, the Board approved moving forward with a separate account structure utilizing a performance-based fee.
As a result, Mr. MacLean recommended that the Board approve the Investment Management Agreement, investment guidelines, and the agreed-upon performance-based fee schedule as presented.
Donald Kendig, Retirement Administrator, confirmed that the separate account has a more attractive fee than the commingled account, but does increase staff workload considerably, possibly requiring additional accounting resources in the future.
A motion was made by Trustee Jolly, seconded by Trustee Austin, to approve the Investment Management Agreement, investment guidelines, and the agreed-upon performance-based fee schedule as presented and to authorize the Chair to execute. VOTE: Unanimous (Absent – Crow)
RECEIVED AND FILED; APPROVED
25. Discussion and appropriate action/update on City of Stockton Chapter 9 Plan of Adjustment
At the Board’s request, Harvey Leiderman, Reed Smith, gave a brief update on the City of Stockton Chapter 9 Plan of Adjustment.
RECEIVED AND FILED
26. Discussion and appropriate action on CALAPRS Election of Members to the Board of Directors
A motion was made by Trustee Dowell, seconded by Trustee Case McNairy, to approve/vote the slate of candidates submitted on the CALAPRS Election of Directors official ballot. VOTE: Unanimous
RECEIVED AND FILED; APPROVED
27. Closed Session:
A. Personnel G.C. §54957 – PULLED.
Public Employment Title: Retirement Administrator
B. Conference with Legal Counsel – Significant exposure to litigation – pursuant to G.C. 54956.9(d)(2) – Conference with Legal Counsel – Significant exposure to litigation (one case) – MOVED TO DISCUSSION ITEM 21
C. Disability Retirement Applications – Personnel Exception – pursuant to G.C. §54957:
1. Joshua Hamilton
2. Abel Flores
28. Report from Closed Session
27.C.1. Hamilton – Decision – To grant the Applicant service connected disability benefits based on the Finding of Fact and Decision. M – Gomez. S – Jolly. ROLL CALL VOTE: Yes – Austin, Case McNairy, Dowell, Gomez. No – Basua, Coburn, Jolly. (Absent – Crow) MOTION PASSED.
27.C.2. Flores – Decision – To grant the Applicant service connected disability benefits based on the Finding of Fact and Decision. M – Jolly. S – Basua. VOTE: Unanimous (Absent – Crow)
29. Report from FCERA Administration
Administration had nothing to report.
30. Report from County Counsel
Dean Stuckenschmidt, Deputy County Counsel, thanked the Board for allowing him to participate in the Annual Off-site Educational meeting.
31. Board/Committee Member Announcements or Reports
Trustee Jolly expressed interest in attending the upcoming PIMCO Educational Seminar in Newport Beach, CA on November 18-20, 2014 noting that the due to the absence of a second Board meeting in November, the Board would not meet again in time to discuss and approve his request. Therefore, he requested approval in advance of the Regular meeting in December.
The Board approved Trustees Jolly’s request and directed Administration to agendize the travel request on the December 3, 2014 Regular meeting agenda. Staff agreed.
Chair Coburn and the Board welcomed Donald Kendig to FCERA.
There being no further business, the meeting adjourned at 12:45 PM.
Donald C. Kendig, CPA
Secretary to the Board
11/05/14 Regular Meeting Minutes