June 30, 2005 – Board Agenda

Closed Session:  None

Public Session

1.

Call to Order

2.

Board Business

2.1

Roll Call

2.2

Acceptance of Certification of Election Results for the Second General Member Seat

2.3

Swearing-in of Trustee and Welcome

2.4

Report from Ad Hoc Nominating Committee

3.

Approval of the Minutes

4.

Oral Communications

4.1

Oral Communications From the Board

4.2

Oral Communications From the Public

5.

Benefit & Actuarial Services

5.0

Adoption of May Consent Agenda

5.1

Adoption of Consent Agenda

5.2

Consideration of items removed from Consent Agenda

5.3

Introduction to SamCERA’s Undistributed Earnings Policy

6.

Investment Services

6.1

Monthly Portfolio Performance Report

6.2

Annual Review: Strategic Investment Solutions

6.3

Approval of topics for Investment Manager Review – INVESCO Realty Advisors

6.4

Adoption of Part Three & Part Four of SamCERA's Investment Plan

6.5

Acceptance of Amendments to Appendix A-E and Glossary of SamCERA's Investment Plan

7.

Board & Management Support Services

7.1

Monthly Financial Reports

8.

Approval or Acceptance of Reports

8.1

Chief Executive Officer's Report

8.2

Investment & Finance Manager’s Report

8.3

County Counsel's Report

9.

Adjournment

June 30, 2005 – Board Minutes

0506.1

Call to Order:  Ms. Salas, Chair, called the Public Session of the Board of Retirement to order at 1:01 p.m., June 30, 2005, in SamCERA’s Board Room, Suite 125, 100 Marine Parkway, Redwood Shores.

0506.2.1

Roll Call:  Ms. Salas, Mr. Bryan, Ms. Stuart, Mr. Hooley, Ms. Colson, Mr. Lewis and Ms. Tashman (1:26 p.m.).  Excused: Mr. Buffington.  Board Alternate:  None.   Staff:  Mr. Bailey, Mr. Clifton & Ms. Dames.  Counsel:  Ms. Motley.  Consultants:  Dr. Fracchia, Ms. Jadallah, Mr. Thomas & Mr. Summer.  Retirees: 1, County: 0.

0506.2.2

Acceptance of Certification of Election Results for the Second General Member Seat:  Mr. Bailey reported that, pursuant to Regulation 3.16, Warren Slocum, County Elections Officer, certified and declared on June 17^th Paul Hackleman the winner in the special election for the Second Member position on the Board of Retirement.  Motion by Bryan, second by Stuart, carried unanimously to accept the County Elections Officer’s certification of election results.

0506.2.3

Swearing-in of Trustee and Welcome:  Mr. Hackleman swore to serve as a faithful fiduciary for all members, retirees and beneficiaries; to serve as a prudent administrator of the County’s Retirement System; and to support, defend and bear true faith and allegiance to the Constitutions of the United States of America and the State of California in accordance with Regulation 3.20.

Mr. Hackleman said a few words regarding his election to the Board.  He indicated that he has conveyed to the county that he will no longer be able to serve his customary role as a representative on their behalf.  The trustees welcomed Mr. Hackleman to the board.

0506.2.4

Report from Ad Hoc Nominating Committee:  Mr. Hooley, Chair of the Ad Hoc Nominating Committee, reported that the committee will nominate Ms. Tashman for Secretary, Mr. Bryan for Vice Chair and Mr. Lewis for Chair of the Board of Retirement.  The committee will place these names in nomination for the three positions at the July board meeting.

0506.3

Approval of the Minutes:  Motion by Stuart, second by Colson, carried unanimously to approve the Minutes of the May 24, 2005, Board Meeting.

0506.4.1

Oral Communications From the Board:  None.

0506.4.2

Oral Communications From the Public:  John Murphy, representing SCORPA, extended his congratulations to Mr. Hackleman on his election to the board.  Mr. Murphy also thanked Mr. Hackleman and Mr. Bailey for the support they provide to SCORPA.

0506.5

Benefit & Actuarial Services

0506.5.0

Adoption of May Consent Agenda:  Motion by Bryan, second by Lewis, carried unanimously to adopt the May Consent Agenda, as amended, as follows.

Routine Actions taken by staff pursuant to the board's Delegation of Authority and the Regulations of the Board of Retirement:

Service Retirements:

Butt, Adela

May 5, 2005

District Attorney’s Office

Boeschow, Catherine

May 7, 2005 (from deferred)

Department of Public Health

Andermahr, Kimberlie

May 8, 2005

Sheriff’s Office

Iorio, Michael

May 21, 2005

Sheriff’s Office

Continuance of Benefits:

Barbara, Karen

Beneficiary of Philip

Deferred Retirements:

Austin, Ronald

G4 non vested

Reciprocity

Grandsaert,  John

G2 vested

Reciprocity

Refunds For May 2005:

Cabalsa, Darwin

G4  non vested

$155.50

Charan, Asha

G4  non vested

$795.18

Consunto, Elizabeth

G4  non vested

$80.57

Jimenez, Belinda

G4  non vested

$691.78

Jimeno, Vilma

G4  non vested

$1,054.08

Karan, Chandra

G4  non vested

$1,479.46

Knotts, Nicole

G4  non vested

$8,541.14

Nedaskowsky, Christine

G4  non vested

$8,480.46

Ruelas, Noemi

G4  vested

       $17,327.93

Total Refunds May 2005

$38,606.10

Rollovers for May 2005

Baca, Mari

G4  non vested

$7,917.59

Cottrell, Sarah

G4  non vested

$14,738.02

Ducoff, Laura

G4  non vested

$5,008.39

Gwiazda, Scott

G4  non vested

$8,844.48

Hsu, Dora

G4  non vested

$2,754.98

Hurtado, Gina

G4  non vested

        $3,941.72

Total Rollovers May 2005

$43,205.18

0506.5.1

Adoption of Consent Calendar:  Ms. Salas removed the disability application of Brenda Snell (Mr. Bryan) from the Consent Calendar for consideration under agenda item 5.2.  Motion by Lewis, second by Bryan, carried unanimously to adopt the consent calendar, as amended, as follows:

Disability Retirements:

The Board (1) finds that Gloria Prater is unable to perform her duties as a Hospital Unit Coordinator, (2) accepts the finding of Dr. M. Dorinson, independent medical evaluator, that he could not find any orthopedic reason for Ms. Prater to be considered permanently incapacitated from performing the substantial duties of a Hospital Unit Coordinator, (3) concurs with Dr. Fracchia’s findings that Ms. Prater is permanently disabled from performing the substantial duties of a Hospital Unit Coordinator due to psychological reasons, and (4) continue to grant Ms. Prater a non-service-connected disability retirement.

Routine Actions taken by staff pursuant to the board's Delegation of Authority and the Regulations of the Board of Retirement:

Service Retirements:

Arguello, Juan

June 1, 2005

San Mateo Medical Center

Brown, JoAnn

June 1, 2005

Aging and Adult Services

Montemagni, Arnold

June 1, 2005

Department of Environmental Health

Hildebrand, Ralph

June 10, 2005

Sheriff’s Office

Daricek, Richard

June 11, 2005

Department of Public Works

Kass, Miriam

June 16, 2005

Department of Mental Health

Nocon, Barbara

June 14, 2005

Probation Department

Wong, Lucie

June 23, 2005

San Mateo Medical Center

Brandenburg, Hyungsoon

June 25, 2005

San Mateo Medical Center

Conlan, Gerlinde

June 29, 2005

Department of Environmental Health

Amador, Myra

June 30, 2005

Department of Human Services Agency

Andrews, Verta

June 30, 2005

Department of Environmental Health

Ciamarro, Kathryn

June 30, 2005

Department of Human Services Agency

Moreno, Lilia

June 30, 2005

Department of Human Services Agency

Postello-Roberg, Dorothy

June 30, 2005

Department of Human Services Agency

Schneider, Carol

June 30, 2005

Department of Human Services Agency

Stark, Marilyn

June 30, 2005

Department of Human Services Agency

Continuance of Benefits:

Lowry, Charles

Beneficiary of Pearl

Phillips, Edward

Beneficiary of Sandra

Deferred Retirements:

Calderon, Cesar M.

G4 vested

Castillo, Alma

G2 vested

Escalona, Alma C.

G2 vested

Lamore, Kristy S.

G2 vested

O'Shea, Molly

G4 vested

Verbelli, Sylvia R.

G2 vested

Brunamonte, Natalie A.

G4 non vested

Reciprocity

Refunds For May 2005:

Johnson, Josephine

G4 non vested

$5,518.86

McQuigg, Mary Rose

G2 vested

$3,746.53

Shiller, Leslie

G4 non vested

          $8,617.72

Total Refunds May 2005:

$17,883.11

Rollovers for May 2005:

McQuigg, Mary Rose

G2 vested

$12,517.04

Osborne, Ashley

G4 non vested

$5,393.86

Osborn, China

G4 non vested

          $7,578.39

Total Rollovers May 2005:

$25,489.29

0506.5.2

Consideration of items removed from Consent Calendar: Mr. Bryan inquired on the feasibility of surgery to the improvement of Ms. Snell’s injury.  Mr. Hooley asked whether or not that information can have a bearing on the Board’s re-evaluation of Ms. Snell’s disability application.  Ms. Motley said she would report back to the board regarding the effects that elective or recommended surgeries may have on disability decisions.  Dr. Fracchia , indicated that Ms. Snell’s disability is due to ligament injury in which not much more can be done to help improve the condition.  

Motion by Bryan, second by Lewis, carried unanimously to (1) find that Brenda Lee Snell is unable to perform her duties as a Medical Services Assistant II, (2) accept the finding of Dr. Victoria Barber, independent medical evaluator that she is still permanently disabled, and (3) continue to grant her application for service-connected disability retirement.

0506.5.3

Introduction to SamCERA’s Undistributed Earnings Policy:  Ira Summer of Public Pension Professionals was present to review and discuss a draft Undistributed Earnings Policy.  He requested that trustees communicate any suggested changes to the policy.  The board then provided direction for next month’s presentation.

0506.6

Investment Services

0506.6.1

Monthly Portfolio Performance Report:  Mr. Clifton presented the Preliminary Monthly Financial Report for the period ending May 31, 2005.  He reported that SamCERA’s Total Fund Return of 2.75% in May 2005 outperformed the Total Plan Policy Benchmark return of 2.48%.  The Fund’s Fiscal year to Date return of 8.91% is 160 basis points ahead of the Actuarial Discount Rate of 7.31% and 47 basis points ahead of SamCERA’s Total Plan Policy Benchmark of 8.44%.

Asset Class

Market Value

1-Month

1-year TTWRR

5-year TTWRR

$807,654,102

4.52%

11.04%

0.41%

International Equity

      254,110,462

1.05%

14.00%

-0.49%

Total Equity

1,061,764,564

3.67%

11.70%

0.16%

Fixed Income

467,967,697

1.08%

7.40%

8.16%

Real Estate Aggregate

57,079,121

0.00%

19.74%

11.51%

Cash Equivalents

-796,469

0.24%

2.95%

3.24%

Total Fund

$1,586,014,912

2.75%

10.72%

3.92%

Benchmark

2.48%

10.41%

3.46%

0506.6.2

Annual Review: Strategic Investment Solutions:  Mr. Clifton gave a brief overview of the consultant performance evaluation.  He noted that SIS received a higher ranking in all categories when compared to last year’s evaluation.  He then presented Margaret Jadallah, Director of Manager Research & Vice President, and Patrick Thomas, Vice President, of Strategic Investment Solutions.  Ms. Jadallah performed a brief organizational update including information regarding their repurchasing of SIS shares previously acquired by Frank Russell.  Mr. Thomas then said that SIS ideally strives to provide education to the board at each meeting, however SIS is open to provide more discreet educational sessions for trustees.   The board indicated that a refresher on terminology utilized in performance reports as well as information on what to look for in an investment manager would be useful.

0506.6.3

Approval of topics for Investment Manager Review – INVESCO Realty Advisors:  Mr. Clifton presented the investment manager questionnaire for INVESCO Realty Advisors’ annual review to the board.  The review will take place during the August 2005 board meeting.

0506.6.4

Adoption of Part Three & Part Four of SamCERA's Investment Plan:  Mr. Clifton presented the final version of Parts Three & Part Four of SamCERA’s Investment Plan.  Ms. Jadallah noted that 10.3.c.5 and 10.3.c.6 of the Investment Plan contradicted one another.  It was decided that 10.3.c.5 be replaced by 10.3.c.6 including the addition of the word “only.”   

Motion by Lewis, second by Bryan, carried unanimously to adopt Part Three & Part Four of SamCERA’s Investment Plan, as amended.

0506.6.5

Acceptance of Amendments to Appendix A-E and Glossary of SamCERA's Investment Plan:  Mr. Clifton indicated that this was the second hearing of Appendix A-E and Glossary of SamCERA’s Investment Plan.  Mr. Clifton noted that he added new events that occurred in 2003 and 2004 to the Investment Plan.  He also mentioned changes to the document that were recommended by county counsel.  These changes will be discussed at the next board meeting.

0506.7

Board & Management Support Services

0506.7.1

Monthly Financial Reports:  Mr. Clifton presented the preliminary monthly financial report for the period ending May 31, 2005.  He reported that SamCERA’s Net Assets totaled $1,583,962,056.

0506.8

Approval or Acceptance of Reports

0506.8.1

Chief Executive Officer's Report:  Mr. Bailey introduced Anne Palu, SamCERA’s new Retirement Benefits Manager.  Ms. Palu has experience as a corporate human resources manager with knowledge pertaining to benefits issues including that of retirement.  

Mr. Bailey then reported on the progress of SamCERA’s Strategic Planning effort.  He said that he has been pleased with the process.  Staff has identified the various strengths and weaknesses that can be worked upon and will begin strategizing priorities amongst the issues brought forth.  He anticipates a more formal report summarizing the results of the Strategic Planning process in the fall.

With the election of a new trustee, Mr. Bailey said that it would be beneficial for Mr. Hackleman to undergo a special trustee orientation.  He indicated that Ms. Carlson will provide an educational session on the 1937 Act, Mr. Summer on actuarial principles and Mr. Clifton and SIS on SamCERA’s Investment Plan.  Mr. Bailey invited board members to attend these educational sessions should they wish to do so.  Trustees must inform Mr. Bailey of their attendance in advance to ensure that no more than four trustees are present.  Mr. Lewis then indicated that a brief handbook for trustees containing basic information regarding critical issues to the Fund would be helpful for board members sometime in the future.

Mr. Bailey also reported that the CEO Evaluation Committee has completed their evaluation and will report to the board at next month’s board meeting.

Mr. Bailey also mentioned that he had presented SamCERA’s budget for fiscal year 2005/2006 to the Board of Supervisors on June 29^th.  He commented on SamCERA’s Investment Plan along with projected trends and actuarial estimates.  Supervisor Mark Church made mention of funding some of SamCERA’s UAAL with a portion of the county surplus.  Mr. Bailey will report back with any significant developments. 

Lastly, Mr. Bailey noted that SACRS is inviting trustees to submit their photos for the SACRS Photo Roster Directory.

0506.8.2

Investment & Finance Manager’s Report:   Mr. Cliftonreported that SIS had forwarded their responses to the 10 questions from the SEC and that they are available for trustees to review.  He mentioned that Julius Baer has made the news regarding data stolen by one of their employees.  Julius Baer ensured, however, that the incident had nothing to do with the integrity of institutional investment information. Mr. Clifton reported that Western Asset Management’s owner, Legg Mason had executed a deal with Citi to exchange brokerage for assets.  Mr. Thomas indicated that the influx of assets, over $200 billion, may prove to be a concern.  He also mentioned that personnel considerations should also be addressed.  Mr. Clifton then said that Chris Gagnier of Deutsche Asset Management will be going on holiday for the next week and that Tim Vile will contact SamCERA should any developments occur regarding the potential sale of their London business.  Mr. Clifton then noted that he is in receipt of a letter from the County Controller requesting that SamCERA’s financial statements be submitted by September 15, 2005 so that the county may include the information in its Comprehensive Annual Financial Report (CAFR).  In response to a question from Ms. Tashman, Mr. Clifton indicated that the county will be transferring its employer pre-contributions on July 8^th.

0506.8.3

County Counsel's Report:  None.    

0506.9

Adjournment in Memory of the following Deceased Members:  Ms. Salas adjourned the meeting at 2:48 p.m. in memory of the following deceased members:

Rosales, Lawrence

May 17, 1005

Sheriff’s Department

Patrick, Ruby Edith

May 19, 2005

Chope Hospital/Beneficiary Of Booker

Rohlin, Lois

May 19, 2005

Probation Department

Lamport, Eleanor

May 21, 2005

Beneficiary Of A. Lincoln

Morales, Mabel

May 25, 2005

Probation Department

E-Mail:samcera@co.sanmateo.ca.us - 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