November 25, 2003 – Board Agenda

Closed Session: Conference with Counsel on (1) Anticipated Litigation – Significant exposure to litigation pursuant to subdivision (c) of Government Code §54956.9: number of Cases – 1 and (2) Teamsters Local 856 vs. Board of Retirement (Coordinated Proceedings JCCP4049)

Public Session

Call to Order

Board Business

2.1

Roll Call

2.2

Acceptance of Certification

2.3

Swearing-in of Trustee

Approval of the Minutes

Oral Communications

4.1

Oral Communications From the Board

4.2

Oral Communications From the Public

Benefit & Actuarial Services

5.1

Adoption of Consent Calendar

5.2

Consideration of items removed from Consent Calendar

5.3

Authorization to Issue an Actuarial Services Request for Proposal

5.4

Acceptance of Status Report from the Ad Hoc Medicare Part-B Premium Reimbursement Program Review Committee

Investment Services

6.1

Acceptance of Monthly Portfolio Performance Report

6.2

Acceptance of Quarterly Investment Performance Analysis for periods ending September 30^th

6.3

Annual Investment Manager Review – Bank of Ireland Asset Management

6.4

SamCERA’s Investment Manager Structure – International Equity & Fixed Income

6.5

Approval of Domestic Equity Manager Structure Implementation

6.6

Approval of Renewal of Investment Management and Custody Agreement with Barclays Global Investors, N.A.

6.7

Approval of Report on Summary of Terms for INVESCO’s Core Real Estate Fund.

*The Committee will briefly discuss this topic. The Agenda Item in its entirety will be heard by the Board.

Board & Management Support Services

7.1

Acceptance of Monthly Financial Reports

7.2

Approval for Document Management System Analysis

7.3

Rescission of Current and Adoption of New Regulations of the Board of Retirement

7.4

Adoption of Compensation Earnable Resolution

7.5

Presentation of Popular Annual Financial Report

Approval or Acceptance of Reports

8.1

Chief Executive Officer's Report

8.2

County Counsel's Report

8.3

Investment & Finance Manager’s Report

8.4

Assistant Executive Officers’ Report

8.5

Report on Actions taken in Closed Session

Adjournment

November 25, 2003 – Board Minutes, as corrected

0311.1

Call to Order: Ms. Colson, Chair, called the Public Session of the Board of Retirement to order at 1:00 p.m., November 25, 2003 in SamCERA’s Board Room, Suite 125, 100 Marine Parkway, Redwood Shores.

0311.2.1

Roll Call: Mr. Bryan, Ms. Colson, Mr. Hooley, Mr. Lewis, Mr. McMahon (1:03), Ms. Salas & Ms. Stuart. Ms. Arnott for Mr. Buffington. Staff: Mr. McCausland, Mr. Hood, Mr. Clifton & Ms. Lamica. Counsel: Ms. Carlson & Mr. Swope. Consultants: Dr. Fracchia & Ms. Jadallah. Retirees: 1, Actives: 2, County: 2, Public: 1. Mr. McCausland noted that Ms. Tonsfeldt’s term had expired.

0311.2.2

Acceptance of Certification: Mr. McCausland reported that the Board of Supervisors had forwarded certification of its appointment of Emily Tashman to the Fourth Member trustee position on the Board for a term ending June 30, 2006. Ms. Tashman replaces Ms. Tonsfeldt. He reported that Ms. Tashman will not be able to join the Board until January 27^th due to prior commitments.

0311.2.3

Swearing-in of Trustee: Over to January 27, 2004

0311.3

Approval of the Minutes: Ms. Arnott & Mr. McCausland submitted the following corrections to the Minutes: 0310.1 L2: “…October 28 ~~September 23~~, 2003…”; 0310.5.1 conform all names to last-name first format; 0310.7.2: “Mr. Clifton reported that, with ~~Mr. Lewis reported that the Audit Committee had reviewed and accepted the fourth quarter budget report. With~~…”; 0310.7.3 L4: “(b) Auditor’s ~~Audito’s~~…”. Motion by Stuart, second by Bryan, carried unanimously, at approve the Minutes of October 28, 2003 as corrected.

0311.4.1

Oral Communications From the Board: Ms. Stuart reported that the SACRS Fall Conference included excellent presentations on alpha and risk as well as the new “air time” legislation. She noted that former trustee Lauryn Agnew Bierdeman has rejoined SACRS and that former trustee Don Helbush recently celebrated his 80^th birthday. Mr. McMahon reported that he attended an IMM forum in Half Moon Bay on the impact of globalization on diversification strategies.

0311.4.2

Oral Communications From the Public: John Murphy reported that SCORPA is very concerned about the future of the Medicare Part-B Premium Reimbursement Program and encourages the Board to cooperate with SCORPA in urging the Board of Supervisors to continue the program. Lesley Nettles with Progress Investment Management encouraged the Board to attend an institutional investment community event in San Francisco.

0311.5

Benefit & Actuarial Services

0311.5.1

Adoption of Consent Calendar: Without objection, Ms. Colson removed the applications of David Ferree (Stuart) and Carole de Gery (McMahon) from the Consent Calendar for consideration under Agenda Item 5.2. Motion by Salas, second by Stuart, carried unanimously, to adopt the Consent Calendar as amended, as follows:

Disability Retirements:

The Board finds that Colleen Dragich is unable to perform her duties as an Information Technology Analyst and GRANTS her a Nonservice-connected Disability Retirement.

The Board finds that Michael McCormick is unable to perform his duties as a Road Maintenance Worker I, finds that his disability is Service connected and GRANTS him a Service connected Disability Retirement.

Routine Actions: The Board ratifies the following actions taken by staff pursuant to the Board's Delegation of Authority and the Regulations of the Board of Retirement

Service Retirements:

Schweizer, Marc

October 4, 2003

Sheriff’s Department

Vigo, Christine

October 8, 2003

Library Department

Hayselden, Diane

October 9, 2003

Court Services Department

Ames, Joann

October 25, 2003

San Mateo Medical Center

Finlayson, Craig

October 28, 2003

Sheriff’s Department

Green, Dudley

October 28, 2003

Probation Department

Macias, Joseph

November 1, 2003

Sheriff’s Department

Harrington, John

November 4, 2003

Coroner’s Department

LaMotte, Marilyn

November 6, 2003

Information Services Department

McWhite, Madelyn

November 22, 2003

Department of Health & Human Services

Hoffman, Julie

November 29, 2003

Department of Health Services

Hollenbeck, Luzviminda

November 29, 2003

Department of Public Health

Bautista, Celia

November 30, 2003

Controllers’ Office

Deferred Retirements:

Brodie, Helen

G4 vested

Pulido, Minerva

G2 vested

Brewer, Miroo

G4 non vested

Reciprocity

Gallego, Ernest

G2 vested

Reciprocity

Shehee, Terry

G4 non vested

Reciprocity

Warburton, Alfred III

G4 non vested

Reciprocity

Berlanga, Leah

G2 vested

Per Section 31700

Harper, Steven

3/G2 vested

Per Section 31700

Hebert, Michelle

3/G2 vested

Per Section 31700

Miller, Francene

G2 vested

Per Section 31700

Valdez, Robert

G2 vested

Per Section 31700

Wertis, Gregory

G2 vested

Per Section 31700

Refunds for November 2003:

Anderson, Sierra

G4 non vested

$7,759.15

Craig , Carl

G4 non vested

$1,619.15

Fouchia, Brenda

G4 non vested

$3,366.70

Henderson, Cynthia

G4 non vested

$1,911.24

Moevao, David

G4 non vested

$1,371.68

Total Refunds for November 2003

$16,027.92

Rollovers for November 2003

Cornuelle, Kristin

G4 non vested

$10,971.94

Montanez, Raymond

G4 non vested

$1,473.33

Total Rollovers for November 2003

$12,445.27

0311.5.2

Consideration of items removed from Consent Calendar:

Mr. McCausland noted that Ms. de Gery appealed the Board’s August denial of her application for a service-connected disability. While preparing the Board’s case for a hearing on the appeal, the Board’s counsel concluded that Ms. de Gery would likely sustain her burden of proof. Consequently, Counsel recommends that the Board rescind its August denial and grant the application. In response to a question from Mr. McMahon, Mr. McCausland noted that County Counsel represents the Board in all matters that go before a hearing officer. Mr. McMahon identified numerous issues of concern to him and then moved to uphold the Board’s previous decision. Mr. McMahon’s motion died for lack of a second. In response to a question from Mr. Bryan, Raymond Swope, Deputy County Counsel, reviewed the case in detail for the Board. Mr. McMahon challenged the credibility of the applicant, but Ms. Carlson and Mr. Swope noted that the Board has no evidence to prove that the accident did not occur as alleged. Ms. Carlson noted that the trainers’ inability to recall the incident was not proof that the incident did not occur. Ms. de Gery summarized the history of her disability for the Board. Motion by Salas, second by Bryan, carried seven ayes (Arnott, Bryan, Colson, Hooley, Lewis, Salas & Stuart) to one no (McMahon), (1) to RESCIND the Board’s August 26^th decision granting a Nonservice-connected Disability and (2) to GRANT Carole de Gery a Service Connected Disability Retirement.

Mr. McCausland indicated his belief that Mr. Ferree may be eligible for a Safety cancer presumption service connected disability retirement. Dr. Fracchia noted that the cancer presumption is rebuttable and that he found nothing in the medical record to support Mr. Ferree’s claim that his cancer was caused by his job. In fact, medical reports indicate that his cancer is consistent with the type of cancer that results from smoking. The medical history indicates he smoked one to two packs of cigarettes per day for forty years. Ms. Carlson reviewed the legal standards for rebutting the claim. Motion by Arnott, second by Bryan, carried unanimously, to refer the application of David Ferree to a hearing officer for the preparation of findings and a recommended decision.

0311.5.3

Authorization to Issue an Actuarial Services Request for Proposal: Mr. Hood presented the draft request for proposal. Ms. Colson recommended that a Letter of Intent step be added to assist staff in anticipating how many proposals will need to be evaluated. Trustees and Ms. Carlson recommended changes to the draft. Motion by Bryan, second by Stuart, carried unanimously, to adopt Resolution 03-04-04, as follows:

Whereas, Article XVI, §17 (e) of the Constitution of the State of California vests the Board with “The sole and exclusive power to provide for actuarial services in order to assure the competency of the assets of the...system”; and

Whereas, Government Code §31453 requires periodic valuations of SamCERA’s actuarial soundness and §31596.1(a) provides for the payment of “the costs, as approved by the Board, of actuarial valuations and services rendered pursuant to §31453"; and

Whereas, SamCERA has been with the same Actuary for 10 years and is not familiar with the current pricing and service levels offered in the industry; and

Whereas, the current contract for actuarial services expires June 30^th, 2004. Now, therefore, be it

Resolved, that the Board hereby instructs staff to distribute a Request for Proposal – Actuarial Services which includes statements of interest, qualifications, proposed services and fees. Be it further

Resolved, that the staff is hereby charged with reviewing the Request for Proposal response(s) and selecting the top three respondents. Be it further

Resolved, that the Board will interview the three finalists and select a successful candidate for Actuarial Services.

0311.5.4

Acceptance of Status Report from the Ad Hoc Medicare Part-B Premium Reimbursement Program Review Committee: Mr. McCausland reported that the Board has authorized County Counsel to initiate an analysis of SamCERA’s Interest Crediting Policy

0311.6

Investment Services

0311.6.1

Acceptance of Monthly Portfolio Performance Report: Mr. Clifton reported on periods ending October 31^st. He provided a brief overview of the markets. He noted that October was the first month in a long time when all asset>

Asset Class

Market Value

1-Month

1-year TTWRR

5-year TTWRR

Domestic Equity

$712,289,876

6.40%

26.14%

2.24%

International Equity

198,487,802

4.90%

16.95%

1.55%

Total Equity

$910,777,677

6.07%

23.99%

1.82%

Fixed Income

374,604,055

-0.84%

5.14%

6.32%

Real Estate Aggregate

58,063,037

0.33%

13.28%

9.66%

Cash Equivalents

15,632,564

0.12%

2.13%

Total Fund

$1,359,077,334

3.78%

17.67%

4.33%

Benchmark

3.89%

19.55%

3.50%

Without objection, Ms. Colson accepted the report.

0311.6.2

Acceptance of Quarterly Investment Performance Analysis for periods ending September 30^th: Ms. Jadallah presented Strategic Investment Solutions analysis of performance. She reviewed the many factors that worked against Bank of Ireland Asset Management’s strategy during the quarter, including their large cap bias, their Euro stock bias, and their high quality bias. She noted that Deutsche Asset Management did well for the quarter due primarily to their weighting of asset-backed securities. INVESCO’s portfolio is now being positioned for their new fund. In response to questions regarding relative performance from Mr. Hooley, Ms. Jadallah and the trustees reviewed the shift to passive management in 2000 and its impact during the subsequent bear market when active management was the key to top quartile performance.

Asset Class

1-Quarter

1-year TTWRR

5-year TTWRR

Large Cap Equity

3.00%

25.14%

1.57%

Small Cap Equity

9.10%

35.95%

International Equity

4.42%

19.27%

2.17%

Total Equity

4.24%

25.35%

1.76%

Passive Fixed Income

-0.16%

5.56%

6.72%

Active Fixed Income

-0.01%

5.06%

6.96%

Total Fixed Income

-0.15%

5.27%

6.52%

Real Estate w/ REITS

1.16%

13.60%

9.59%

Cash Equivalents

0.64%

2.18%

Total Fund

2.79%

18.06%

4.22%

Benchmark

3.50%

20.04%

3.69%

Without objection, Ms. Colson accepted the report.

0311.6.3

Annual Investment Manager Review – Bank of Ireland Asset Management: Dan Anderson, Client Services, and Richard Kelly, Portfolio Manager, were present for the review. Mr. Anderson reminded the Board of BIAM’s investment discipline, noting that everything boils down to the selection of individual stocks, with a focus on value and fundamentals. Mr. Kelly noted that common attributes of BIAM-held securities are sustainable business models, strong balance sheets, good earnings track records, strong cash flows and paying dividends – attributes that have not been in favor over the past year and a half. He reported that the weakening dollar and the rise in the Japanese stock markets have also contributed to BIAM’s underperformance. Thru September 30^th Small Cap outperformed Large Cap; for example in the U.K. large cap returned 3.8% while mid/small cap returned 26.4%, while in the U.S. large cap returned 13.2% and mid/small returned 27.1%. Mr. Kelly reported that International Forward Price/Earnings are 17.55 for Mid Cap and 15.46 for Large Cap – a relationship not seen in over a decade, leading BIAM to assume that Large Cap will recover in the period ahead. Mr. Anderson noted that BIAM’s P/E is usually lower than the market’s because of BIAM’s bias to quality. Mr. Kelly noted that the market is currently paying a P/E of 31.6 for the poorest quality companies vs. 16.1 for the highest quality companies – again a relationship not seen in over a decade, leading BIAM to assume that Quality will be rewarded in the period ahead. He then reviewed a few of the securities in the portfolio. He noted that the companies are able to adjust their business plans as currency and other market factors undergo changes. He noted that BIAM will remain underweight Japan due to high relative P/E’s. He reported that BIAM is liquidating its holdings in Ahold, while Unilever will remain in the portfolio as BIAM monitors its recovery.

In response to a question from Ms. Colson regarding whether it is harder to buy a stock or sell one, Mr. Kelly noted that BIAM prefers long-term holds and emphasizes the purchase decision. He noted that there is usually deference to the recommendation of a portfolio manager or regional team that wants to buy or sell a security – investment team consensus is typically straightforward. Mr. Kelly stated that BIAM does not have a mathematical sell discipline; in fact a significant change in the fundamentals must be apparent before a stock will be sold. By way of example, Mr. Kelly reviewed BIAM’s recent assessment of Unilever. Mr. Kelly compared BIAM’s 1994 performance to the current situation. He noted that the investment strategy has not changed since 1994 and he anticipates that the market will once again reward BIAM’s discipline. Mr. Bryan noted that the Board has been waiting for eighteen months for BIAM’s performance to get back on track.

Mr. Bryan reported that the Investment Committee has concluded that BIAM should be placed on the Watch List. Ms. Colson noted that BIAM’s sell strategy does not seem to acknowledge the volatility that is now typical with the globalization of the security markets. Motion by Bryan, second by Lewis, carried unanimously, to place Bank of Ireland Asset Management on the Watch List per §9.4 of SamCERA’s Investment Plan

0311.6.4

SamCERA’s Investment Manager Structure – International Equity & Fixed Income: Mr. Bryan reported that the Investment Committee had provided Ms. Jadallah with instructions for further analysis of the Board’s International Equity alternatives. Mr. Bryan reported that the Investment Committee reviewed five Fixed Income allocation alternatives with Ms. Jadallah and recommended that the Board adopt a 1/3 passive, 1/3 active core, 1/3 active core plus fixed income allocation. Motion by Bryan, second by Stuart, carried unanimously to amend SamCERA’s Asset Allocation as follows: (1) 1/3 of the allocation to fixed income is to remain in passive index funds, (2) 1/3 of the allocation to fixed income is to remain in active core fixed income strategies and (3) 1/3 of the allocation to fixed income is to be invested in active “core plus” fixed income strategies.

0311.6.5

Approval of Domestic Equity Manager Structure Implementation: Mr. Clifton reported that the Investment Committee had concluded that a manager search should precede entry into any new equity funds. Mr. Clifton reviewed the process that SIS will employ for manager searches. Motion by Bryan, second by Colson, carried unanimously, to authorize Strategic Investment Solutions to initiate searches for firms uniquely qualified to manage the Board’s Asset Allocation to Domestic Equity.

0311.6.6

Approval of Renewal of Investment Management and Custody Agreement with Barclays Global Investors, N.A.: Mr. Clifton reviewed the fundamentals of the BGI contract, noting that it also incorporates a custody agreement. Mr. Bryan noted that the Investment Committee recommends that the Board approve the renewal of the investment management and custody agreement with BGI. Ms. Carlson recommended amending the indemnification language inserted by BGI’s counsel. Motion by Bryan, second by Lewis, to adopt Resolution 03-04-05, approving Renewal of Investment Management and Custody Agreement with Barclays Global Investors, N.A., as follows:

Whereas, Article XVI, §17 of the Constitution of the State of California vests the Board with "plenary authority and fiduciary responsibility for the investment of moneys and the administration of the system"; and

Whereas, Government Code §31595 vests in the Board “ . . . exclusive control of the investment of the employees retirement fund.” and

Whereas, Government Code §31596.1 (d) authorizes the Board to retain investment managers “ . . . in connection with administration of the Board's investment program . . . "; and

Whereas, Board Resolution 00-01-02 approved the previous contract between the Board and BGI for a term of three-years, effective January 31, 2001; and

Whereas, the provisions of SamCERA’s Investment Plan, BGI’s Collective Investment Fund Guidelines and Investment Management Fees, including any amendment(s) thereto are incorporated into the Agreement as Exhibit A, Exhibit B and Exhibit C respectively; and

Whereas, County Counsel has approved the contract as to form and the Investment and Finance Manager has recommended approval of the contract. Therefore, be it

Resolved that the Board hereby approves a contract, which the Board may terminate on thirty days notice, with Barclays Global Investors for a term of three years. Be it further

Resolved that the Board hereby delegates full discretionary authority to Barclays Global Investors to manage the assets of the Retirement Fund as allocated by the Board in accordance with the terms of the contract, the Investment Plan, and applicable law governing the conduct of fiduciaries entrusted with the management of public employees' retirement funds. Be it further

Resolved that the Board hereby approves the fees as specified in the contract and authorizes the disbursement of funds as provided for in GC §31596.1 in accordance with SamCERA's internal controls. Be it further

Resolved that the Board hereby authorizes the Chair to execute the contract on behalf of the Board upon a certification by County Counsel that the contract is in satisfactory form. Be it further

Resolved that the Board hereby designates the Chief Executive Officer as its designee to perform those functions so identified in the contract and hereby authorizes the Chief Executive Officer to take all actions necessary to initiate, implement and monitor assignments, approve payments and provide the Board with timely reports regarding the progress and satisfactory completion of the assignments authorized pursuant to the contract.

0311.6.7

Approval of Report on Summary of Terms for INVESCO’s Core Real Estate Fund: Mr. Clifton reviewed the points raised by the Investment Committee during its November 25^th meeting that staff is to discuss with INVESCO. Ms. Colson asked for Ms. Carlson’s review of the summary of terms. Ms. Carlson asked Ms. Jadallah for copies of documentation for one or more similar funds. Without objection, Ms. Colson accepted the report.

Ms. Arnott left the meeting.

0311.7

Board & Management Support Services

0311.7.1

Acceptance of Monthly Financial Reports: Mr. Clifton reported that portfolio appreciation increased $48.8 million during October, the largest increase for the fiscal year to date.

From July 1 through October 31, additions to the Fund totaled $143.1 million, as follows: Investments contributed $85.3 million, Employer Contributions totaled $ 50.1 million and Member Contributions totaled $7.7 million. Over the same period, deductions from the Fund totaled $25.8 million, as follows: Benefit Payments totaled $23.8 million, Refunds totaled $856 thousand, Professional fees totaled $739 thousand and Administrative expenses totaled $528 thousand. The net increase in the Fund fiscal-year-to-date totaled $117.1 million. Without objection, Ms. Colson accepted the report.

0311.7.2

Approval for Document Management System Analysis: Mr. Hood reported that he is continuing to discuss scope and fee with the proposed contractor. Without objection, Ms. Colson accepted the report.

0311.7.3

Rescission of Current and Adoption of New Regulations of the Board of Retirement: Mr. Hood and Ms. Carlson reported that the Regulations were ready for adoption, noting that the draft regulations had been distributed to the County and all employee unions and had been the subject of two public hearings, with no comments having been received on the drafts. Motion by Bryan, second by Lewis, carried unanimously, to adopt Resolution 03-04-06, as follows:

Whereas, Government Code §31525 provides that this Board may make regulations not inconsistent with the California Employees' Retirement Law of 1937; and

Whereas, Government Code §31526 stipulates which provisions must be included in these regulations; and

Whereas, Government Code §31527 stipulates which provisions are permissible in these regulations. Therefore be it

Resolved that pursuant to Government Code §31525, § 31526 and §31527 the Board hereby rescinds the current Regulations of the Board of Retirement.

Resolved that pursuant to Government Code §31525, § 31526 and §31527 the Board hereby adopts the following Regulations of the Board of Retirement:

REGULATIONS OF THE BOARD OF RETIREMENT

ARTICLE I. BOARD OFFICERS AND CHIEF EXECUTIVE OFFICER

1.1. Election Of Chair: At the first regular meeting in July, the Board of Retirement shall elect one of its members chair for a term of one year or until his or her successor is duly elected and qualified. The Chair shall preside at all meetings of the Board, shall appoint all committees and shall perform all duties incidental to that office.

1.2. Election Of Vice Chair: At the first regular meeting in July, the Board of Retirement shall elect one of its members vice chair for a term of one year or until his or her successor is duly elected and qualified. In the Chair's absence or inability to act, the Vice Chair shall take the place and perform the duties of that office.

1.3. Election Of Secretary: At the first regular meeting in July, the Board of Retirement shall elect one of its members secretary for a term of one year or until his or her successor is duly elected and qualified. The Secretary shall attest to Resolutions and other such documents for the Board. In the Chair's and Vice Chair's absence or inability to act, the Secretary shall take the place and perform the duties of the Chair.

1.4. Filling Of Vacancy In Office: In the event of a vacancy in the office of chair, vice chair or secretary, the Board of Retirement shall, at its next regular meeting, elect one of its members to fill such vacancy for the remainder of the term.

1.5. Administrator’s/Chief Executive Officer’s Authority: The Board shall adopt, and may amend from time to time, a formal Delegation of Authority which sets forth the specific powers and duties assigned to the Administrator who shall have the title of Chief Executive Officer. The Chief Executive Officer shall adhere to the terms and conditions of the Delegation of Authority in all matters.

ARTICLE II. MEETINGS

2.1. Public Meetings: All business of the Board shall be conducted in conformance with the requirements of California's public meeting law, known as the Ralph M. Brown Act, commencing at GC§54950.

2.2. Quorum: Five trustees of the Board constitute a quorum.

2.3. Motions: Motions approved by affirmative votes of less than five trustees shall have no force and effect. The Chair should vote on all motions.

2.4. Regular Meetings: Regular meetings of the Board shall be held on the Fourth Tuesday of each month. Meetings shall begin at 1:00 p.m. Meetings shall be held in SamCERA’s offices. The Board may cancel and or approve a change in the date, time and/or location of meetings within the County, if the proposed change is included on the agenda of a regular meeting.

2.5. Special Meetings: Special meetings of the Board of Retirement may be called in the manner provided by Section 54956 of the Government Code.

2.6. Order Business: The Board shall conduct its business in accordance with the provisions of the Government Code and these regulations.

2.7. Preparation of Agenda: The Chief Executive Officer shall be responsible for the preparation of the Board’s agenda.

2.8. Communications to the Board: Whenever possible, communications and requests to the Board should be made in writing. Oral communications and requests will be accepted during Board meetings.

The substance of such requests and the actions of the Board thereon shall be recorded in the minutes.

2.9. Meeting Minutes: The minutes of the Board’s meetings shall reflect the time and place of each meeting of the Board, the names of trustees present, all official acts of the Board, the votes cast by trustees when by roll call vote, a trustee's dissent or approval and reasons when requested. The minutes will be presented for approval at the next regular meeting. When called upon by the Chair, the Chief Executive Officer shall take a formal roll call vote in alphabetical order, with the Chair voting last. The minutes as approved, signed by the Chair, shall form part of the permanent records of the Board.

ARTICLE III. ELECTION OF TRUSTEES

3.1. Regular Elections: Regular Elections shall be held on the second Monday in June of the years in which the terms of elected Trustees expire. The Elections Officer for the County of San Mateo or his or her designee, herein after referred to in this Article as “Elections Officer” shall be responsible for the conduct of the election and shall report directly to the Board in all matters pertaining to the election of trustees.

3.2. List of Eligible Candidates and Nominators and the List of Eligible Voters: The Chief Executive Officer shall provide to the Elections Officer a copy of the Nominating Petition, the "List of Eligible Candidates and Nominators", and the "List of Eligible Voters" and other necessary election materials. The "List of Eligible Candidates and Nominators" shall include those names of members who are eligible to sign Nomination papers and/or run for office as set forth in sections3.4 and 3.5, and shall be provided no later than the Friday prior to the third Monday in April of the election year. The "List of Eligible Voters" shall include those names of members who are eligible to vote in the election as set forth in section 3.13, and shall be provided no later than the Thursday prior to the first day ballots may be mailed to those voters.

3.3. Notice of Election: The Chief Executive Officer shall distribute a Notice of Election on or before the first Monday in April of election years. The Notice shall include, but not be limited to, the Qualification of Candidates, the process for obtaining copies of the Nominating petition and Election Regulations, the Date of the Election, and the name and address of the Elections Officer.

3.4. Qualifications of Candidates: A candidate for Second or Third Trustee shall be a General Member of SamCERA. A candidate for Seventh Trustee shall be a Safety Member of SamCERA. A candidate for Eighth Trustee shall be a Retired Member of SamCERA. To be eligible, a candidate shall be a member of his or her respective group at the close of the pay period immediately preceding the beginning of the Nomination/Declaration of Candidacy period. The Elections Officer shall compare the names of candidates with the "List of Eligible Candidates and Nominators." If the Elections Officer finds that the candidate does not meet the qualifications set forth in this Section and Section 3.5, the Elections Officer shall disqualify the candidate.

3.5. Nominating Petitions/Declaration of Candidacy: On and after the third Monday in April, qualified candidates may obtain a Nominating Petition or Declaration of Candidacy, a copy of the Code of Fair Campaign Practices as it appears in the California Elections Code, and a copy of these Election Regulations from the Elections Officer. Candidates for Second, Third and Seventh Trustee shall be nominated by a petition signed by not less than ten SamCERA Members eligible to sign the candidate's petition. SamCERA's General Members are eligible to sign a petition for a candidate for Second or Third Trustee. SamCERA's Safety Members are eligible to sign a petition for a candidate for Seventh Trustee. SamCERA's Retired Members are eligible to nominate themselves as a candidate for Eighth Trustee by filing a Declaration of Candidacy with the Elections Officer. To be eligible to sign petitions, or nomination papers, a member’s name shall be included on the "List of Eligible Candidates and Nominators." No member shall sign more than one Nominating Petition for each election. Signed Nominating Petitions and Declarations of Candidacy must be filed with the Elections Officer no later than 5:00 P.M. of the first Monday in May. Candidates who file Nominating Petitions after the deadline will be disqualified. Prospective candidates shall appear in person to receive candidate papers from and to deliver candidate papers to the Elections Officer. If a prospective candidate is unable to appear in person, they shall designate in writing an agent to receive and/or deliver the candidate’s Nomination Papers or Declaration of Candidacy on their behalf.

3. 6. Withdrawal: Candidates may withdraw from the election no later than 5:00 P.M. of the first Monday in May by filing a written statement of withdrawal with the Elections Officer.

3.7. Qualification of Candidates and Nominators: The Elections Officer shall compare the names on Nominating Petitions and Declarations of Candidacy with the "List of Eligible Candidates and Nominators." If the Elections Officer finds that less than the number of qualified signatures specified inSection 3.5 have been submitted, the Elections Officer shall disqualify the candidate.

3.8. Less than Two Qualified Candidates: If the Elections Officer determines that there is one qualified candidate, the Elections Officer shall cancel the election and certify the single candidate elected. If there are no qualified candidates, the Elections Officer shall notify the Board who shall reschedule the election. The Chief Executive Officer shall re-notice the Election. Any election that has been re-noticed shall be held in accordance with the provision for Special Elections.

3.9. Candidate Statements. The Elections Officer shall accept, reproduce and include with the ballot, a Candidate Statement listing the name of the candidate and no more than 300 words. Candidate Statements shall be limited to a recitation of the candidate's own personal background and qualifications and shall not make any reference to other candidates or to another candidate's qualifications. Statements that do not meet these requirements shall not be accepted, but may be resubmitted up to the filing deadline. The counting of words will be in accordance with the California Elections Code. If the Elections Officer determines that an acceptable Candidate Statement is not submitted by the deadline, the candidate will not have one included with the ballot. Candidate Statements must be filed with the Elections Officer no later than 5:00 P.M. of the first Monday in May. Statements shall be printed as submitted. No candidate, for any reason, may withdraw or change his or her Candidate’s Statement after this deadline. Statements filed pursuant to this section shall remain confidential until the expiration of the filing deadline.

3.10. Challenges to Statements: No later than 5:00 P.M. on the first Thursday in May following the first Monday in May, a candidate may challenge by writ of mandate or injunction filed with the Superior Court of San Mateo County, which requests that the decision of the Elections Officer to accept or reject a candidate’s statement be reversed and/or that the statement in question is false, misleading, or inconsistent with the requirements of Section 3.9. The peremptory writ of mandate or injunction shall be issued only upon clear and convincing proof and a finding that an order would not substantially interfere with the printing or distribution of official election materials.

3.11. Ballots: The Elections Officer shall certify for inclusion on the ballot the names of qualified candidates who submitted Nominating Petitions containing the number of qualified signatures specified in section 3.5. The Elections Officer shall determine by lot the order in which candidates shall appear on the ballot. There is no provision for write-in candidates. The Elections Officer shall provide for the preparation of a number of ballots sufficient to supply one to each SamCERA Member eligible to vote in each election. The Elections Officer shall provide for the mailing of ballots to the member's home address. Ballots shall be mailed no earlier than the third Friday in May and no later that the fourth Friday in May. Ballots mailed shall include a return envelope bearing prepaid postage. The Elections Officer shall make available a replacement ballot upon request by any eligible member who lost or did not receive his or her ballot. Requests may be made in person, in writing, by e-mail, fax or by telephone. A replacement ballot will not be provided to any one other than the member who requested the replacement ballot. Candidates are specifically prohibited from handling ballots, whether voted or unvoted, sealed or unsealed, other than their own. Voted ballots must be received by the Elections Officer on or before Election Day. Any voted ballot that is U.S. Postmarked on or before Election Day and received by the Elections Officer on or before 5:00 P.M. on the Friday following the Election Day shall also be counted.

3.12. Ballot Designation: There shall be no ballot designations on the ballot.

3.13. Qualification of Voters: The Elections Officer shall confirm the name on the outer ballot envelope with the "List of Eligible Voters." SamCERA's General Members are qualified to elect the Second and Third Trustees. SamCERA's Safety members are qualified to elect the Seventh

Trustee. SamCERA's Retired Members are qualified to elect the Eighth Trustee. To be eligible to vote, a member shall be a part of his or her respective group at the close of the pay period immediately preceding the first day that ballots may be mailed per these bylaws.

3.14. Counting of Ballots: The Elections Officer shall supervise the counting of ballots. A candidate certified as the winner must receive the highest number of votes cast. In the event of a tie vote, the Elections Officer shall determine the winning candidate by lot.

3.15. Voided Ballots: The Elections Officer shall void all of the following ballots: duplicate ballot cast; all ballots which bear the signature or initials of the voter on the ballot itself; ballots which do not bear the signature of the voter on the outside of the envelope or where it is not possible to determine who submitted the ballot; envelopes containing more than one ballot; and ballots where the Elections Officer cannot determine the voter’s intent. Any names written in on a ballot, other than the name of a qualified candidate, will not be counted or reported in the Certification of the Election Results.

3.16. Certification of Election Results: The Elections Officer shall canvass and certify the results of the election no later than the Friday following the election.

3.17. Receipt & Safekeeping of Ballots Cast: The Elections Officer shall accept and provide for the safekeeping of all ballots cast. Ballots must be retained for 180 days after Election Day, and, in the absence of litigation, may be discarded thereafter.

3.18. Recount: Upon written application to the Elections Officer, and within five (5) calendar days of the Elections Officer's Certification of Election Results, any candidate may order a recount of all votes cast. Prior to a recount, the candidate requesting a recount must agree to pay for the actual cost of the recount. The Elections Officer shall determine an estimated cost for a recount and the candidate requesting the recount must deposit with the Elections Officer payment for the estimated cost. The candidate will be under no obligation to pay for the recount if the recount shows a change in the outcome of the election. The recount shall be conducted in the same manner as the original count.

3.19. Contests: Election results may be contested by a candidate upon filing a verified petition with the Superior Court of the County of San Mateo within 15 calendar days of the issuance of the Certified Election Results by the Elections Officer. Candidates may contest the election on the following grounds: a) that the person who has been declared elected to an office was not, at the time of the election, eligible for that office; b) that the candidate or his or her agent has given to a member a bribe or reward or offered any bribe or reward for the purpose of procuring his or her election; c) that a sufficient number of votes were illegal, fraudulent, forged, or otherwise improper, and that had those votes not been counted, the person having been declared elected would not have received more votes than the contestant; and/or d) that the Elections Officer in conducting the election or in canvassing the returns, made errors sufficient to change the result of the election as to any person who has been elected. The acceptance or rejection of a candidate's statement of qualifications by the Elections Officer shall not constitute grounds for a new election. A hearing on the contest shall be set by the Court. The Court’s decision shall be based upon clear and convincing proof of the allegations. If the Board orders a new election based upon the Court’s decision, it shall be held in accordance with the provisions for Special Elections.

3.20. Oath of Office: Newly elected Trustees shall be sworn-in during the Board's first meeting in July.

3.21. Special Elections: The Chief Executive Officer shall advise the Board when a vacancy occurs and shall recommend a date for a Special Election to fill the vacancy. If the vacancy occurs within nine months of the end of the term of the seat that has been vacated, there shall be no Special Election. If the vacancy occurs more than nine months prior to the end of the term, the Board shall call a Special Election, which shall be held not less than 90 nor more than 120 days from the date the seat was vacated. Special Elections shall be conducted in conformance with the provisions of this Article for Regular Elections, except that the schedule shall be adjusted by the Elections Officer to comply with the date of the Special Election set by the Board.

3.22. Reimbursement for Services: The SamCERA Board of Retirement will reimburse the Elections Officer for the election services provided.

3.23. Public Information: During the ninety days preceding Election Day, no newsletter or other one-time publication intended for the use of SamCERA's members will be distributed by SamCERA which includes the name of any incumbent candidate for an election conducted pursuant to these regulations. This moratorium shall not apply to standard publications such as member booklets, annual reports and other documents of a similar nature.

ARTICLE IV. MEMBERSHIP DUTIES & RIGHTS

4.1. Membership: An individual entering full or permanent part time employment with the County of San Mateo or the Mosquito Abatement District prior to July 1, 1996, shall become a member of SamCERA on the first day of the first pay period commencing after the date of employment. An individual entering such employment on or after July 1, 1996, shall become a member of SamCERA on the first day of employment.

4.2. Exclusions: All employees whose service falls in the following categories shall be excluded from membership in SamCERA: extra help, members of appointed Boards and Commissions, and Judges of the Superior Court.

4.3. Entering Service Application: Upon entering service, the member shall immediately execute and file statement in the manner and form prescribed by the Chief Executive Officer.

4.4. Terminating Employment: A member terminating employment shall file either a completed application for retirement, or a completed form directing disposition of retirement contributions, in the manner and form prescribed by the Chief Executive Officer.

4.5. Required Documents for Retirement: Prior to the effective date of retirement, in addition to the fully executed and completed application for retirement, each member shall provide to the retirement system the following documents:

(a) Proof of birth of the member and any named beneficiary must be filed in one of the following manners:(i)original birth certificate,(ii) certified copy of a birth certificate or (iii)original passport.

(b) Fully executed option agreement in the manner and form prescribed by the Chief Executive Officer.

(c) Documentation setting forth arrangement for the auto deposit of benefit payments. The Board may approve payment by check in cases where the Board's paying agent is unable to provide payment by auto deposit and in cases where the member has specifically requested payment by check.

(d) For those members of SamCERA who were married for all or a portion of their SamCERA service time and subsequently divorced, copies of Court dissolution orders setting forth the division of the SamCERA service time between the member and the non-member must be submitted. If applicable, a fully executed waiver by the non-member of community share of SamCERA covered service in the manner and form approved by the Chief Executive Officer can be submitted.

4.6. Approval of Service Retirement: All applications for service retirement shall be subject to review and approval by the Board. The Chief Executive Officer shall place such applications on the Consent Calendar for the Board's ratification of staff's actions.

4.7. Effective Date of Retirement: The effective date of retirement shall be the later of the day following the member’s last day on the County payroll or the day the member filed the retirement application with the Administrator.

4.8. Service Credit: For members in Plan 1, Plan 2 or Plan 4 credit shall be given for all County service rendered for compensation for which contributions are made by or for the member. For members in Plan 3 credit shall be given for all County service rendered for compensation after the effective date of employment.

4.9. Prior Service Credit: Credit shall be given for all County service rendered for compensation prior to July 1, 1944.

4.10. Computation of Service Credit: Service credit shall be calculated as follows: 2,080 hours of service shall equal one year of service credit.

4.11. Suspension of Benefits: If the Chief Executive Officer is made aware of circumstances in which, in the opinion of the Chief Executive Officer, the member may not be receiving his or her benefit, the Chief Executive Officer may temporarily suspend the benefit payments in order to determine whether the benefit payment should be directed in a different manner.

4.12. Rates of Interest in Nonvested Terminated Members: Accounts of nonvested members who terminate employment but keep their funds on deposit will not be credited with any interest after their termination date.

ARTICLE V. DISABILITY RETIREMENT

5.1. Application Process: The application process for service connected and non-service connected disabilities shall be as follows:

(a) Either the County or the member can apply for a disability retirement for the member by filing a completed application for disability retirement form provided by the Chief Executive Officer.

(b) The applicant for disability retirement shall provide the Chief Executive Officer with a signed medical information release form and all available medical reports diagnosing the applicant's condition.

(c) If at any point in the process the Chief Executive Officer determines that additional information is necessary, the Chief Executive Officer may ask the applicant or the County to submit the additional information.

(d) The Chief Executive Officer is authorized and directed to secure such medical, investigatory and other service and advice in connection with applications for disability retirement as the Board may require in order to make its decision.

(e) When the applicant has submitted all requested information, the Chief Executive Officer shall forward the complete record to the Board's medical consultant for his or her evaluation of the applicant's condition.

(f) When the medical consultant's evaluation is completed and filed with the Chief Executive Officer, the Chief Executive Officer shall set the application for the Board's consideration.

5.2. Death of Member prior to Completion of Application: When a member who has not filed an application or completed the application process for either service or disability retirement dies while employed by the County, the Chief Executive Officer shall file an application and or complete the application process on behalf of the member, if requested to do so by the deceased member’s eligible spouse, eligible children, or other named beneficiary, in order to establish eligibility for the Optional Settlement 2 provided by GC§31672. The Chief Executive Officer shall present such application for service or disability retirement to the Board for approval.

5.3. Submission of Application to the Board: All applications for service retirement shall be subject to review and consideration of approval by the Board. The Board consideration process shall be as follows:

(a) Notification of Hearing: The applicant shall be notified in writing when the application will be submitted to the Board for its consideration. The notice shall advise the applicant that the applicant has a choice of an informal or a formal hearing as set forth below. The notice shall further provide the staff’s recommended action to Board.

(b) Hearing is Limited to the Disability Set Forth in the Application: The both the informal and formal hearing shall be limited to the disability described in the application for disability retirement. If the applicant wishes to introduce additional disabling conditions, then the matter shall remanded the matter back to the Chief Executive Officer for the filing of an amended application for disability retirement.

(c) Informal Hearing: With the consent of the applicant, the initial hearing before the Board on an application for disability retirement may be informal in nature. While the applicant is encouraged to appear before the Board, the appearance is not mandatory. The matter will be placed on the Board’s consent agenda with recommend action by staff. Any member of the Board can request that the matter by taken off of the consent agenda and to be discussed and considered during the meeting of the Board. The applicant and the County shall be notified in writing of the Board's action on the application.

(d) Appeal of the decision of the Board based on an informal hearing: If the applicant or County is dissatisfied with the Board's action, the applicant or County may request a formal hearing. The request for formal hearing must be made in writing, and filed with the Chief Executive Officer, if by the member, within 60 days of the date of the Board's action; if by the County, within 30 days of the date of the Board's action. If no request for a formal hearing is filed within the applicable period, the Board's action shall be deemed final and binding.

(e) Formal Hearing Process: Upon the filing of a written request for a hearing, the matter shall be referred to County Counsel who will contact the applicant regarding the selection of the hearing officer. The hearing officer shall schedule the time and place of the hearing with the consent of the parties. The hearing shall be recorded by a qualified court reporter. The hearing officer shall prepare, and submit a proposed finding of fact and recommended decision based upon the evidence considered. The hearing officer’s decision shall be placed on the Board’s agenda as soon as administratively possible. The applicant and the County shall be notified of the time and place of the meeting. The Board may accept, amend or reject the recommended decision of the hearing officer. The applicant and the County shall be notified in writing of the Board's action.

(f) Appeal of the action of the Board following the formal hearing: If the applicant or the County is dissatisfied with the Board's action relating to the hearing officer’s recommended decision, the applicant may obtain judicial review by filing a petition for a writ of mandate in accordance with the Code of Civil Procedure within 90 days of the date of the written notice of the Board's action. If a petition for writ of mandate is not timely filed, the Board's action shall be deemed final and binding.

5. 4. Effective Date: If the Board approves the application for disability retirement, the effective date of retirement shall be the later of the day following the member’s last day on the County payroll or the day the member filed the retirement application with the Chief Executive Officer.

5.5. Required Documents for Disbursement of Disability Payment: The first disability retirement benefit payment shall not be disbursed until the member has filed the required documents set forth in Article IV Section 5.

5.6. Grounds Termination of an Application for Disability Retirement: An application for disability retirement may be terminated and considered null and void by the Board one year after the date of its filing for one or more of the following reasons:

(a) Failure of the applicant to submit to a medical examination at the request of the Board pursuant; or

(b) Any failure to cooperate by the applicant or any other act or omission by the applicant or applicant's representative which prevents the Board from hearing and adjudicating the application for disability retirement within one year of its filing.

5.7. Process to Terminate an Application for Disability Retirement: Before the Board determines whether to void and null a disability application, the applicant shall be given at least 15 days written notice of the proposed action and the date and time of the Board meeting. The applicant shall be granted the opportunity to appear and address the Board regarding the proposed action. The Board may exercise broad discretion in extending the time for the processing of the application. Nothing in this section shall prohibit an applicant from filing a new application, if applicant is eligible to do so.

5.8 Cancellation of Disability benefits After Medical Examination: If the Board requires beneficiary under 55 to undergo a medical examination and on the basis of such examination determines that it should review whether the disability retiree is still physically or mentally incapacitated for service in the position held when retired for disability, the matter will be placed on the Board’s agenda for hearing. The applicant will be given written notice of the hearing and be advised that if the Board decides that he or she is no longer incapacitated, and if the County or district reinstates the retiree, the disability retirement allowance will be canceled. The notice shall also advise the recipient of his or her right to be represented by counsel, to present evidence in his or her own behalf and to cross-examine any witness produced in support of canceling the disability retirement allowance. If the beneficiary is dissatisfied with the Board's action, the beneficiary may obtain judicial review by filing a petition for a writ of mandate in accordance with the Code of Civil Procedure within 90 days of the date of the written notice of the Board's action. If a petition for writ of mandate is not timely filed, the Board's action shall be deemed final and binding.

5.9. Modified Work Program Pending Determination of Disability: If the Board has not made a determination of eligibility for a disability benefit prior to a member’s entry into a Modified Work position designed by the County to accommodate the member’s work restrictions, then at the time of the member’s retirement, the Board’s determination of eligibility for a disability benefit shall be based upon the normal and customary duties of the member’s position prior to entering the Modified Work position, unless the member requests that the Board base its decision on the duties of a subsequent position held by the member.

5.10. Modified Work Program - Request For Retirement: If the Board has authorized modified work benefits, then upon the member’s subsequent request to retire, the Chief Executive Officer may retire the member with a disability benefit and record the member’s name on the Consent Calendar for Board ratification. However, if the Chief Executive Officer has reason to believe that the member’s condition has improved to the point where the member may be capable of performing the normal and customary duties of the position from which the member was previously disabled, then the Chief Executive Officer shall submit the matter to the Board for its independent review and determination.

ARTICLE VI. PURCHASE OF CREDIT FOR PUBLIC SERVICE

6.1. Extra Help Time/ Leave Without Pay: An active eligible member may purchase service credit for the following time:

(a) extra help hours worked before becoming a member or

(b) leave of absence without pay for employee's own illness or disability, not to exceed credit for twelve consecutive months.

6.2. Members who Entered County Employment Prior to January 1, 1970: Any member who is a County employee and was a member prior to January 1,1970 may purchase credit for Public Service performed for military or federal, state, and other public agencies credited in California that do not qualify for reciprocity. Eligibility is also extended to deferred members hired before January 1, 1970 and retired members hired before January 1, 1970 who retired following the granting of a deferred retirement. Such public service may be purchased pursuant to the terms of GC§§31641.1 & 31641.2.

6.3. Employment Through CETA: Any active member (1) who served in an agency of the County or Mosquito Abatement District while compensated pursuant to the provisions of the Comprehensive Employment Training Act and (2) who subsequently became a permanent employee of the County or District, is eligible to purchase credit for the Public Service performed for the County or District while a CETA participant. Applications for the purchase of such public service must include a detailed accounting of the period of service and compensation therefore with documentation acceptable to the Chief Executive Officer. Such public service may be purchased pursuant to the terms of GC§31641.5.

6.4. Prior Military Service: Eligible active members can purchase prior military service in accordance with the provisions of GC§31641.97.

(a) Notice: Eligible persons will have given written notice when they file with the Retirement Office a signed Purchase of Military Service Credit Application form as prescribed by the Chief Executive Officer.

(b) Certification: The Application must include verification of military service (DD214 or its equivalent) and an affidavit that the applicant is not eligible to receive credit for this service under any other retirement plan.

(c) Calculation of Cost to the Member: GC§31641.97 requires that the full cost, including interest, of the employee and county liability for the additional credit under this section shall be determined by the board of retirement on actuarial advice, and shall be the actuarial equivalent of the difference between the retirement benefits the person will receive with and without the credit for military service.

(d) Actuarial Assumptions: The actuarial factors used shall be those used for the actuarial valuation of the Retirement Fund at the time of the calculation, except that the member shall select the age of retirement.

(e) Method Used to Determine the Cost: The cost shall be the Actuarial Equivalent of the Difference between the benefit the member will receive with and without the credit for military service.

(f) Lump Sum Purchase: Eligible persons may purchase credit for their Military service at any time prior to the effective date of their retirement by lump-sum payment of an amount equal to the full cost, including interest, of the employee and county liability for the additional credit, as determined by the Chief Executive Officer within 180 days prior to receipt of the lump-sum payment.

(g) Installment Purchase: Eligible persons may purchase credit for their military service at any time prior to the effective date of their retirement by authorizing biweekly payroll deductions over a period not to exceed five years in equal payments which will accumulate the full cost, including interest, of the employee and county liability for the additional credit, as determined by the Chief Executive Officer within 180 days prior to commencement of the deductions.

(h) Purchase of Partial Credit: Eligible persons may purchase less than the full credit for which they are eligible, so long as the payment, or payments, accumulate the full cost, including interest, of the employee and county liability for the additional credit, as determined by the Chief Executive Officer. Additional credit may be purchased at any time prior to the effective date of retirement, so long as the payment or payments are based on the full cost as determined by the Chief Executive Officer within 180 days prior to receipt of the lump-sum payment or commencement of biweekly payroll deductions.

(i) Safe keeping of Members' Assets & Crediting of Interest: All funds deposited into the Retirement Fund pursuant to this regulation shall be recorded in individual Military Service Credit Reserve accounts established in the name of the member. Funds on deposit shall be credited on the same terms and at the same rate of interest as the County's accounts in the Retirement Fund, regardless of the subsequent status of the member. On the effective date of retirement, all principal and interest in the Reserve will be transferred to the member's regular account in the Retirement Fund.

(j) Calculation of Benefit Payable at Time of Retirement: When the member files an application for retirement, the Chief Executive Officer shall recalculate the Military Service Benefit and Member Service Credit Reserve as set forth in Step 2 and Step 3 of subsection (e), using the information then available and the assumptions in effect at the time of recalculation.

(k) Surplus: If the calculations performed pursuant to subsection (j) indicate that the principal and interest in the Military Service Credit Reserve exceeds the amount required, the surplus balance will be refunded to the member, subject to applicable tax laws

(l) Deficiency: If the calculations performed pursuant to subsection (j) indicate that the principal and interest in the Military Service Credit Reserve is not sufficient to fund the full Military Service Benefit, the Chief Executive Officer shall allow the member to make one of the following two elections: (1) Lump Sum Purchase: The member may immediately purchase the unfunded military service credit and receive the full Military Service Benefit; or (2) Pro Rata Credit: The member may elect to not purchase the unfunded military service credit and receive a reduced Military Service Benefit.

(m) Payment of Military Service Benefit: On the effective date of retirement, the years-of-military-service for which payment-in-full has been received shall be added to the member's years-of-County-service in the computation of the retirement allowance and will, thereafter, be an integral part of the base allowance for the purpose of calculating cost-of-living increases and survivor benefits.

(n) Disability: The member may elect either (1) a refund of all principal and interest in the account maintained pursuant to subsection (i), or (2) an annuity based upon the years-of-military-service for which payment-in-full has been received. If the member elects an annuity, all principal and interest in the account on the effective date of the Disability Retirement shall be converted to an annuity which will be based on the Board's Actuarial Assumptions, including Disability Retirement Life Expectancy Factors, in effect at that time. Subject to applicable tax laws, the annuity shall be payable for life in equal monthly installments, plus annual cost-of-living adjustments equal to those granted to retirees in the member's Plan. An eligible surviving spouse shall receive the applicable survivor allowance. The Chief Executive Officer shall determine the amount of the annuity on the effective date of the Disability Retirement.

(o) Death Before Retirement: If the member was not eligible to retire, all principal and interest in the account maintained pursuant to subsection (i) will go the member's beneficiary. If the member was eligible to retire, the surviving eligible spouse may elect to receive (1) a refund of all principal and interest in the account maintained pursuant to subsection (i), or (2) a monthly allowance which includes military service credit based on the provisions of subsections (j) and (l). The surviving eligible spouse may elect to receive any surplus, make a lump-sum payment for any deficiency, or accept pro-rata credit, as provided for in subsection (j).

(p) Death After Retirement With a Surviving Spouse: The Military Service Credit Reserve has been merged with the member's regular account. Therefore, the surviving eligible spouse will receive a monthly allowance based on the same survivor option formula elected by the member at the time of retirement.

(q) Death After Retirement Without a Surviving Spouse: The Military Service Credit Reserve has been merged with the members' regular account and, therefore, the balance, if any, goes to the beneficiary.

(r) Termination of Employment: Upon termination of employment, a member may elect to withdraw the funds; or, if eligible, may elect a deferred retirement, in which case the funds will remain on deposit and will continue to be subject to the provisions of subsection (i) until the effective date of retirement.

(s) Election to Discontinue Installment Purchase Plan: The decision to purchase military service credit is irrevocable. However, unless otherwise prohibited by law, any member may discontinue the installment purchase plan at any time. All funds on deposit will continue to be subject to the provisions of subsection (i). Unless otherwise prohibited by law, the member may elect to reinstate the purchase plan at any time prior to the effective date of retirement, but shall be subject to recomputation of the balance due as calculated pursuant to subsections (c)(f)(g)(h). At the time of retirement, the member will receive proportional military service credit, as provided for in subsection (j) and (m).

(t) Dissolution of Marriage: If the final decree does not specifically identify the member's Military Service Credit Reserve, the Chief Executive Officer shall administer the assets in the account in the same manner as stipulated in the final decree for the disposition of the member's retirement benefits.

ARTICLE VII. CERTIFICATES

7.1. Prior to the approval by the Board of an application for service retirement, the member shall be furnished with a statement indicating the amount of his or her retirement allowance calculated in accordance with the unmodified and various optional modes of settlement. Such statement shall be in duplicate and provide a place for the signature of the member and the member's spouse, if married, indicating the choice as to the type of retirement allowance selected. The completed statement shall constitute the annuity certificate provided for in Section 31526 of the Government Code.

7.2. When a member leaves the County service and applies for and is granted deferred retirement, such member shall be furnished with a statement as indicating deferred retirement has been granted and setting forth the years of service credited to said member.

ARTICLE VIII. AMENDMENTS

8.1 These regulations may be amended from time to time at any regular meeting of the Board by an affirmative vote of at least five (5) members of the Board, and shall be submitted to the San Mateo County Board of Supervisors for ratification.

Be it further

Resolved that the Chief Executive Officer is hereby authorized under Government Code §31525 to transmit these regulations to the Board of Supervisors and to take all actions necessary to provide for their implementation upon approval by the Board of Supervisors.

0311.7.4

Adoption of Compensation Earnable Resolution: Mr. Hood reported that the new Regulations do not include the Compensation Earnable determinations, per Counsel’s recommendation, but that a resolution is required to memorialize the Board’s determinations. In response to questions from Mr. Lewis and Mr. Bryan, Mr. McCausland attested to the fact that all pay codes currently incorporated in compensation earnable are set forth in the resolution. He reported that he had double checked Mr. Hood’s and Ms. Carlson’s work and that he had sought the County’s Employee Relations Manager’s review of questionable codes. Mr. McCausland noted that the only new pay code added was 104, which applies only to long-term care workers. Mr. McCausland reported that the only other changes are the deletion of 038 family sick leave and 012 shift differential bonus, which are no longer in use. In response to a question from Ms. Salas, Mr. McCausland reported that 077, bilingual overtime pay, is no longer in use and was never included in compensation earnable. Motion by Bryan, second by Lewis, carried unanimously, to adopt Resolution 03-04-07, defining Compensation Earnable, as follows:

Whereas, Government Code §31461 provides that this Board determine which items of remuneration earned by members shall constitute “compensation earnable”; and

Whereas, the Board has reviewed the current pay items and has determined which of those items are to be included in “compensation earnable” and which items are not to be included; and

Whereas, it will be necessary for this Board from time to time to amend its determinations of compensation due to changes made by the County in its compensation schedule. Therefore be it

Resolved that pursuant to Government Code §31461, the Board hereby makes the following determinations as what is in included in “compensation earnable and items of remuneration are not included:

1. Compensation earnable shall include:

A. All base pay (001) and 001 replacement pay which the Board defines as compensation paid to employees when they are off work and paid for those hours under County leave programs for which the County provides compensation, including sick leave with pay (035), vacation pay (041), holiday regular pay (043), holiday hours used (048), compensatory time used(052), administrative leave (054), jury duty (055), military leave (056),educational leave with pay (057), other leave with pay (058), disability leave with pay (059), management overtime (064), employee incentives(084) voluntary time off (090), and annual in-service management administrative leave cash-outs (102).

B. Pay for special duties or as an incentive paid as an addition to base pay for all hours worked or as a percentage of base pay, including experience pay(008), night/evening shift differential (013), special night shift differential (014), special duty hours (015), charge nurse shift differential (019), split shift (020), bilingual pay (021), staffing differential (022), weekend pay (023), on-call hours (027), bomb squad [flight/observer/pilot] (033), holiday hours worked at time and one-half (044) as part of the employee's normally required schedule mandated by the County, holiday hours worked at straight time (045) as part of the employee's normally required schedule mandated by the County, bi-weekly special pay (087), miscellaneous compensation (088) and long term care pass through(104).

C. Payments made as reimbursements for expenses related to employment where such payments are made without reference to the actual expense incurred and are paid automatically to designated employees, including uniform/tool allowance (080) and transportation allowance (081).

D. Compensation for overtime hours above forty hours per week where such overtime was the employee's normally required schedule mandated by the County for the Sheriff's Office deputies, sergeants and correctional officers and compensated as straight time (006).

2. Compensation earnable, at a minimum, shall not include:

A. Other over-time, including call back pay (025), part-time double shift differential (026) & (029), overtime training hours (065), time and one-half (066), overtime special duty desk officer (069), overtime special duty (070), overtime special duty night shift (073), overtime night shift premium hours (075), rest period differential (076), bilingual overtime pay (077) special shift differential (079), special overtime rate (089).

B. Refunds or compensation paid on a one time basis upon termination of employment, including layoff sick leave (037), terminal vacation (040), terminal holiday pay (049), terminal compensatory pay (050), terminal MOT pay (063), terminal VTO pay (091) and miscellaneous terminal pay (097).

C. Payments associated with the provision of insurance benefits, or other third party payments such as professional membership dues, that are not received in cash by a member.

D. Payments by the County of member-required contributions to the retirement system under Government Code sections 31581.1, 31630, 31639.85 or under a memorandum of understanding (MOU) between members (or their representatives) and the County.

0311.7.5

Presentation of Popular Annual Financial Report: Mr. Clifton introduced Mabel Wong, Management Analyst. He reviewed the format of the reports used prior to 1995 and indicated that staff will be preparing a new format for distribution to all members. John Murphy suggested that the popular report include descriptive summaries that can be easily understood by the members. Staff was instructed not to update the report with post-June 30^th changes. Without objection, Ms. Colson accepted the report.

0311.8

Approval or Acceptance of Reports

0311.8.1

Chief Executive Officer's Report: Mr. McCausland reported that CalPERS had informed him that there is no financial advantage for him to return to PERS-covered service; consequently, he is no longer seeking PERS-covered employment. He reported that he has been elected to the Half Moon Bay City Council and he pledged to use accrued leave if he needs to be away from work from time to time.

Ms. Carlson and Mr. McCausland advised the Board that they believe that his Delegation of Authority extends to him the ability to redirect a retiree’s check to a paying agent (a rep payee) used by Social Security in order to protect the retiree from elder abuse, when SamCERA is unable to obtain a conservatorship for the retiree.

Without objection, Ms. Colson accepted the report.

0311.8.2

County Counsel's Report: None

0311.8.3

Investment & Finance Manager’s Report: Mr. Clifton distributed reports from Deutsche Asset Management, Bank of Ireland Asset Management, INVESCO Realty Advisors and Strategic Investment Solutions. He noted that it is time to register for the CALAPRS General Assembly. Without objection, Ms. Colson accepted the report.

0311.8.4

Assistant Executive Officers’ Report: Mr. Hood reviewed a staffing comparison performed by Sonoma CERA and SamCERA that points out that SamCERA has 3,114 members per Benefits Staff Member, which compares to 1,923 for Fresno, 1,378 for Sonoma, 1,227 for Ventura, 1,050 for Kern, 861 for Santa Barbara and 605 for Contra Costa. The study was based on SACRS systems with between $1 billion and $3 billion in assets. He indicated that he would provide the Board with additional information in future meetings. Mr. Hood distributed the SACRS Disability Retirement Law Resource Disk to each trustee.

Mr. Hood provided the Board with a copy of a letter from Dr. Schnitgen commending Ms. LeBlanc for her compassionate assistance when he lost his partner.

Ms. Colson recessed the Public Session at 3:52 p.m. and reconvened it at 3:56 p.m.

0311.8.5

Report on Actions taken in Closed Session: Mr. McCausland reported that Ms. Colson had convened the Board in Closed Session at 3:52 p.m. with all trustees present for roll call in attendance, with the exception of Ms. Arnott who had left the meeting. The Board conferred with Counsel on (1) Anticipated Litigation – Significant exposure to litigation pursuant to subdivision (c) of Government Code §54956.9: number of Cases – 1 and (2) Teamsters Local 856 vs. Board of Retirement (Coordinated Proceedings JCCP4049). No action was taken. There being no further business, Ms. Colson adjourned the Closed Session at 3:56 p.m.

0311.9

Adjournment in Memory of the following Deceased Members: There being no further business, Ms. Colson adjourned the meeting at 3:56 p.m. in memory of the following deceased members:

Dennis, Robert

October 2, 2003

Crystal Springs Rehabilitation Ctr.

Clague, Jeanne

October 4, 2003

Chope Hospital

Middleton, Charles

October 17, 2003

General Services Department

Pearson, Gladys

October 18, 2003

Department of Health & Welfare

Skupien, Catherine

October 22, 2003

Crystal Springs Rehabilitation Ctr.

Nerli, Barbara

November 11, 2003

Department of Public Works

Donna Wills Colson, Chair

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The information in SamCERA's web site is general in nature and is not considered a legally binding interpretation, enlargement or amendment of the provisions contained in the County Employee's Retirement Law of 1937 or by-laws of the Board of Retirement. Although considered accurate, information within the site is limited and, should there be an inconsistency between the web site and the governing law, the law will govern.

E-Mail:samcera@samcera.org - Tel:(650)599-1234 - Fax:(650)591-1488 - Hours:M-TH 7am-6pm
Address: 100 Marine Parkway, Suite 125, Redwood Shores, CA 94065-5208 - InterOffice Pony: RET141