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January 24, 2006 – Board Agenda

 

CLOSED SESSION – The board may meet in closed session prior to adjournment.

C1

Consideration of items removed from the Consent Agenda.

 

PUBLIC SESSION – The Board will meet in Public Session at 1 p.m.

1.

Call to Order

2.

Roll Call

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  

 

5.1

Adoption of Consent Agenda

 

5.2

Consideration of Items Removed from Consent Agenda

 

5.3

Approval of Actuarial Contract

6.

Investment Services (The Investment Committee will meet on January 24 at 10 a.m.)

 

6.1

Monthly Portfolio Performance Report

 

6.2

Annual Investment Manager Review – Goldman Sachs Asset Management

 

6.3

Review of SamCERA’s Security Lending Policy

 

6.4

Review of SamCERA’s Investment Management Agreement (IMA)

7.

Board & Management Support Services

 

7.1

Monthly Financial Report

 

7.2

Quarterly Budget Report

 

7.3

Approval of Office Space Proposal

 

7.4

Annual Review & Revision of SamCERA’s Code of Fiduciary Conduct

 

7.5

Annual Review & Revision of SamCERA’s Conflict of Interest Code

 

7.6

Annual Review & Revision of SamCERA’s Education Policy

 

7.7

Introduction to SamCERA’s Travel Policy

 

7.8

Approval of extension to SamCERA’s Audit Services Contract with Brown Armstrong

8.

Management Reports

 

8.1

Chief Executive Officer's Report

 

8.2

Investment & Finance Manager’s Report

 

8.3

County Counsel's Report

9.

Adjournment

   
   

January 24, 2006 – Board Minutes

 

0601.1

Call to Order:  Mr. Lewis, chair, called the Public Session of the Board of Retirement to order at 1:01 p.m., January 24, 2006, in SamCERA’s Board Room, Suite 125, 100 Marine Parkway, Redwood Shores.

   

0601.2

Roll Call:  Mr. Bryan, Ms. Arnott for Mr. Buffington, Ms. Colson, Mr. Hackleman, Mr. Lewis, Ms. Salas, Ms. Stuart & Ms. Tashman.  Excused:  Mr. Hooley.  Staff:  Mr. Bailey, Mr. Clifton, Ms. Dames & Ms. Lamica.  Consultants:  Ms. Carlson, Dr. Fracchia & Ms. Jadallah.  Retirees: 1, County: 0.

   

0601.3

Approval of the Minutes:  Ms. Arnott submitted the following correction to the November board meeting minutes:  0511.6.5:  “State Street’s main competition has shrunk to Mellon Bank and, Northern Trust and The Bank of New York.”  Ms. Stuart submitted the following correction to the November board meeting minutes:  0511.4.2:  “Ted Kai, representing SCORPA, introduced himself to the board.”  Motion by Salas, second by Stuart, carried unanimously to approve the board meeting minutes of November 22, 2005, as amended.

Motion by Bryan, second by Arnott, carried unanimously to approve the board meeting minutes of December 16, 2005, as submitted.

   

0601.4.1

Oral Communications From the Board:  None.

   

0601.4.2

Oral Communications From the Public:  John Murphy, representing SCORPA, reported that Dennis Cosgrove, former trustee, had passed away in November and should be recognized for his services to the Board of Retirement.  Mr. Murphy also expressed his disappointment regarding the lower funding ratio in the revised version of SamCERA’s Comprehensive Annual Financial Report for the fiscal period ending June 30, 2005.

   
   

0601.5

Benefit & Actuarial Services

   

0601.5.1

Adoption of Consent Calendar:  Mr. Lewis removed the disability applications of Barbara Bairfield (Mr. Bryan) and Pamela Thompson (Ms. Salas) from the day’s Consent Calendar to be considered under agenda item 5.2.  Motion by Arnott, second by Bryan, carried unanimously to adopt the Consent Calendar, as amended, as follows:

   
 

This Consent Agenda also contains a recommendation from Dr. Charles Fracchia for an alternate physician to advise the board regarding a case from which he is recusing himself.:

   
 

To the chairman and members of the Retirement Board:

Marilyn Davis has applied for a service-connected retirement benefit. The case will soon come up for review. The applicant and I had a close professional relationship for some time. I believe that this would make it difficult for me to formulate an objective opinion in this case. Dr Marvin Richards has volunteered to review this case and give his recommendation. Dr Richards has worked for me in the Department of Primary Care for many years, and I am confident in his ability to handle this assignment. Thank you for the consideration in this matter.

Charles Fracchia, MD

   
 

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

   
 

Service Retirements:

 

Sage, Joanne

October 26, 2005

District Attorney’s Office

 

Price, Deanne

November 18, 2005
(from deferred)

Superior Court

 

Valera, Alexander

December 1, 2005

San Mateo County Medical Center

 

Botti, Lou

December 3, 2005

Human Services Agency

 

Piasentin, Linda

December 3, 2005

Probation Department

 

Wuest, Laura

December 6, 2005

Sheriff’s Department

 

Johnson, Angela

December 14, 2005
(from deferred)

Tax Collector’s Office

 

McRae, Carole

December 17, 2005

Library

 

Villanueva, Russel

December 27, 2005

Sheriff’s Department

 

Bautista, Adelina

December 31, 2005

Human Services Agency

 

Blazer, Lani

December 31, 2005

Office of Aging and Adult Services

 

Fisk, Pamela

December 31, 2005

Southern Municipal Court Division

 

Showes, Joyce

December 31, 2005

San Mateo County Medical Center

 

Elzey, Nancy

January 4, 2006

Assessor’s Office

 

Sandoval, Julian

January 5, 2006

Probation Department

 

Barton, James

January 27, 2006

Sheriff’s Department

 

Bushee, Jean

January 27, 2006

Human Services Agency

 

Dorsey, Delores

January 27, 2006

Sheriff’s Department

 

Nakayama, Cheryl

January 28, 2006

Human Services Agency

 

Clarke, Gregg

January 29, 2006

Sheriff’s Department

 

Johnston, Gary

January 29, 2006

Sheriff’s Department

 

Brown, Charlotte

January 31, 2006

Human Services Agency

     
 

Continuance of Benefits:

 

McQuilkin, Beatrice

Beneficiary of Roy

 

Morehouse, Lester

Beneficiary of Rosemary

   
 

Deferred Retirements:

 

Pollock, Martha

G3 Vested

 

Raffaelli, Elizabeth

G2 Vested

 

Shortz, Claudia

G4 Vested

 

Simmons, Elaine

G4 Vested

 

Turpin, Carol A.

G4 Vested

 

Venzor-Dunn, Maria

G4Vested

 

Hall, Sherry L.

G2/G3 Vested

Reciprocity

 

Jones, Melinka

G4Vested

Reciprocity

 

Manion, Yolanda

G4 non vested

Reciprocity

 

Rapues, James M.

G3 non Vested

Reciprocity

 

Warren, Mary A.

G4 non Vested

Reciprocity

   
 
 

Extended Purchase:

 

None

 
   
 
 

Refunds For December 2005:

 

Alusa, Mele

G4 non vested

 
 

Alvarez, Prinscella

G4 non vested

 
 

Aranico, Dolores

G4 non vested

 
 

Clark, Gloria

G4 non vested

 
 

Metz, Marilyn

G4 non vested

 
 

Piazza Danielle

G4 non vested

 
   
 
   
 
 

Rollovers for December 2005:

 

None

 
   
 
 

Refunds for January 2006:

 

None

 
   
 
 

Rollovers for January 2006:

 

None

 
   

0601.5.2

Consideration of Items Removed from Consent Agenda:  The board went into closed session for this agenda item.

Report on Actions taken in Closed Session:  Ms. Carlson reported that Mr. Lewis convened the board in closed session at 1:13 p.m. with all trustees present for roll call in attendance. 

The board finds that Barbara Bairfield is disabledfrom performing her usual and customary duties as a Medical Services Assistant and GRANTSher application for a service-connected disability.

The board referred Pamela Thompson’s disability applicationto a hearing officer.

There being no further business, Mr. Lewis adjourned the Closed Session at 1:25 p.m.

   

0601.5.3

Approval of Actuarial Contract:  Following the board’s selection of Milliman for actuarial services at the December 16th special board meeting, Mr. Bailey and Ms. Carlson commenced contract negotiations with Milliman’s staff and attorneys.  Several additions to the contract have slightly delayed the start of the actuarial valuation review, however, Mr. Bailey stated that data has already been transferred to Milliman and the delay should not be of a concern. 

Mr. Bailey then performed a brief overview of the key points to the Milliman contract:

  • A retainer clause that addresses contract termination/cooperation with a successor actuary, retaining 10% of the charge of the Valuation and Experience Analysis until the end of the Milliman contract or transfer of data to any successor actuary. 
  • A requirement that insurance company AM Best ratings be noted in the contract as well as notification regarding any changes.
  • Special language regarding certification of each actuarial valuation, adding legal protection for SamCERA.
  • Notification to the board should Milliman lose a contract.
  • Fixed costs for the term of the contract except for hourly rates for special projects.  Hourly rates will be fixed for the first year, with an increase with the CPI thereafter.
  • SamCERA’s inclusion of a legend on all Milliman’s work products warning against parties other than SamCERA relying on their work.
  • The addition of a clause regarding the limits on liability and applicable law.  The contract includes an agreement of a liability limit of $10 million.  Ms. Carlson stated that she disagreed with Milliman’s initial request that any disputes regarding the limits of liability be decided under the contract laws of the State of New York.  Milliman then asked to add a clause regarding the enforceability of the limit under California law.  Ms. Carlson advises that this clause is acceptable.
  • An alternative dispute resolution clause, agreeing that all disputes will go to binding arbitration conducted through the JAMS Resolution Center located in San Francisco.

In response to a question by trustees, Mr. Bailey indicated that Milliman said they can perform the review of the June 30, 2005, Actuarial Valuation in six weeks.  He estimates Milliman’s report by mid-March which will be presented at the March board meeting. 

Motion by Bryan, second by Stuart, carried unanimously to approve the Milliman contract, as submitted.

   
   

0601.6

Investment Services

   

0601.6.1

Monthly Portfolio Performance Report:  Mr. Clifton presented the Preliminary Monthly Performance Report for the period ending December 31, 2005.  He stated that SamCERA’s 1.10% Total Fund Return for December 2005 underperformed the Total Plan Policy return of 1.27%.  The Fund’s Fiscal Year to Date return, 6.04%, is 224 basis points above the Actuarial Discount Rate, 3.80%, and one basis point behind SamCERA’s Total Plan Policy Benchmark of 6.05%

   
 

Asset Class

Market Value

1-Month

1-year TTWRR*

5-year TTWRR*

 
  Domestic Equity

$894,484,561

0.02%

6.73%

2.86%

 
 

International Equity

      298,295,907

4.29%

16.04%

3.66%

 
 

Total Equity

$1,192,780,468

1.06%

8.89%

3.05%

 
 

Fixed Income

315,808,188

1.03%

3.32%

6.35%

 
 

Real Estate Aggregate

65,291,540

2.68%

20.98%

13.08%

 
 

Cash Equivalents

169,173,172

0.14%

3.51%

3.01%

 
 

Total Fund

$1,743,053,368

1.10%

7.56%

5.30%

 
 

Benchmark

1.27%

7.43%

5.00%

 
 

* Total Time-Weighted Rate of Return

   

0601.6.2

Annual Investment Manager Review – Goldman Sachs Asset Management:   Mr. Clifton introduced Tom Dempsey, Managing Director Global Quantitative Equity, Michael Ray, Vice President Client Services, and Michael Keough, Vice President Client Services, of Goldman Sachs Asset Management. Mr. Clifton reported that members of the Investment Committee extensively discussed several issues regarding Goldman Sachs Asset Management.  The committee brought up several concerns regarding a 200+ basis point dispersion between SamCERA’s separate account 12-month gross rate of return (4.45%) than that of  GSAM’s structured US small cap composite return (6.79%).  They also expressed a concern regarding the assessment of increased capacity, from $6 billion at SamCERA’s initial funding to $30 billion to date.   

Regarding the board’s concern over capacity, Mr. Dempsey noted that GSAM is operating at transaction costs of nearly zero, thereby allowing them to trade more efficiently and frequently with less impact on the dollar.  He also indicated that the increase in market volatility has also permitted the increase in capacity.  He added that, with every quarter, GSAM improves its forecasting capabilities, resulting in better estimates on all financial and economic impacts.  He indicated that they are several years off from reaching total capacity.

Regarding the dispersion between SamCERA’s portfolio and that of the composite’s, Mr. Dempsey stated that, per AMR compliant reporting, the composite consists of clients with a wide disparate range of tracking errors, which can contribute to the appearance of dispersion.  He stated that he can provide SamCERA with a composite return of portfolios for clients within a closer range to SamCERA’s 3.5 tracking error. 

Mr. Dempsey then gave a brief organizational update and portfolio review.

   

0601.6.3

Review of SamCERA’s Security Lending Policy:  Mr. Clifton reported that the Investment Committee briefly discussed security lending.  Members on the committee directed staff to schedule an educational workshop regarding security lending on the Investment Committee agenda in April.  The workshop will educate trustees on the pros and cons and various risks associated with a security lending policy.  With the information attained, the committee will forward an appropriate recommendation to the full board.

   

0601.6.4

Review of SamCERA’s Investment Management Agreement (IMA):  Mr. Clifton stated that the Investment Committee conducted an overview of the boilerplate Investment Management Agreement (IMA).  The committee also discussed LACERA’s IMA.  Trustees indicated that the current IMA contains complicated legal terminology and would prefer an IMA that would be easier to read.  Staff was directed to bring back an updated version to the investment committee in May.  The new Investment Management Agreement will be used for any new investment managers going forward.  The Investment Committee should be able to make recommendations to the board at the May or June board meeting.

   
   

0601.7

Board & Management Support Services

   

0601.7.1

Monthly Financial Reports:  Mr. Clifton submitted the preliminary monthly financial report for the period ending December 31, 2005.  SamCERA’s Net Assets Held in Trust for Pension Benefits totaled $1,787,576,077.  Net assets increased by approximately $61 million in December due primarily to the appreciation of portfolio assets.  Barclays Global Investors’ US Debt Index was converted to cash on December 31, 2005.  The monies were transferred to Fidelity Management Trust Company on January 3rd, funding SamCERA’s fixed income enhanced index mandate.  Orders were also given to SamCERA’s other investment managers to raise various amounts of cash for portfolio rebalancing.  Western Asset Management and INVESCO’s Core Fund were provided monies in the rebalancing. 

   

0601.7.2

Quarterly Budget Report:  Mr. Clifton submitted the preliminary Second Quarter Budget Report.  As of the end of the second quarter of fiscal year 2005-2006, SamCERA had expended 38.4% of administrative appropriations.   All major categories are under budget.

   
 

SamCERA’s Administrative Budget

 
 

Adopted Budget

YTD Actual

Salaries & Benefits

$   1,530,300

$   591,513

Services & Supplies

$      942,900

$   364,554

Fixed Assets

$        15,000

$              0

Total

$   2,488,200

$   956,067

   
 

In regards to professional fees, expenditures are on target with budget appropriations.  Milliman and Fidelity have been added to professional services fees.  As of December 31, 2005, the aggregate professional services fee is approximately 30.8 basis points. 

   

0601.7.3

Approval of Office Space Proposal:  Mr. Bailey discussed current and future issues regarding SamCERA office space.  The need for an office for the Assistant Executive Officer upon his return from Iraq, American Disability Act compliance issues, amongst other current concerns were addressed.  Mr. Bailey then stated that Milliman is working on a report illustrating the baby boomer issue.  With the increased wave in members who are eligible to retire, an increase in staff workload is expected.  He then discussed the various options regarding acquiring the necessary office space.

Mr. Bryan said that several vacant office spaces were abundant in years past.  However, he opined that the real estate market is tightening and finding appropriate office spaces is quickly becoming more challenging  He stated that as rent costs continue to rise, opportunities to acquire smaller office spaces will lessen.  Ms. Salas felt that SamCERA is indeed a growing organization.  Mr. Hackleman recommended that staff look into the larger space on the 5th floor of its current building.   Pending Milliman’s report on future resource needs, a larger space seems appropriate for the organization.  Mr. Lewis preferred that staff negotiate a long-term lease with options. 

   

0601.7.4

Annual Review & Revision of SamCERA’s Code of Fiduciary Conduct:  Motion by Hackleman, second by Bryan, carried unanimously to reaffirm Resolution 96-97-02, as amended July 27, 2004, setting forth SamCERA’s Code of Fiduciary Conduct.

   

0601.7.5

Annual Review & Revision of SamCERA’s Conflict of Interest Code:  Motion by Hackleman, second by Bryan, carried unanimously to adopt Resolution 98-99-15, as amended, as follows:

   
 

“Whereas, the board has adopted a Code of Fiduciary Conduct which requires among other things, that  Trustees, the Chief Executive Officer, Consultants, Investment Managers and other professionals retained by the board and SamCERA staff shall comply with the provisions of the California Constitution; the Political Reform Act of 1974, as amended...and all other laws pertinent to the conduct of public pension fund fiduciaries; and 

“Whereas, Government Code §87300 mandates the adoption of a Conflict of Interest Code by independent public agencies;and 

“Whereas, the board, by Resolution 96-97-03, adopted the Conflict of Interest Code provisions of California Fair Political Practices Commission (FPPC) Regulation 18730; and 

“Whereas, Government Code §87306.5 mandates that the board review its designation of employees and disclosure categories from time to time.  Therefore, be it

“Resolved that the board hereby redefines SamCERA's List of Designated Individuals and Disclosure Categories per FPPC Regulation 18730, to read as follows:

        “List of Designated Individuals and Applicable Disclosure Categories

Each individual holding a Designated Position must file FPPC Form 700--Statement of Economic Interests disclosing the applicable financial interests indicated for the position in accordance with Government Code §87200, et seq.

        “Designated Positions                                                                                                                                                                                                                                                                                                                          Applicable Disclosure Categories

            Trustees & Designated Alternate Trustees                                                           1, 2, 3, 4

            Chief Executive Officer                                                                                     1, 2, 3, 4

Assistant Executive Officer                                                                                        1, 2, 3, 4

Investment and Finance Manager                                                                    1, 2, 3, 4

            Consultants specifically identified to file by the Board of Retirement             1, 3, 4

            Real Estate Consultants specifically identified to file by the Board of Retirement   1, 2, 3, 4

“Be it further

“Resolved that the board hereby adopts the following

“Description of Financial Disclosure Categories

Category 1:  Investments that may be materially affected by any decision made or participated in by the designated individual must be disclosed on Schedules A-1 &/or A-2 of Form 700.

Category 2:  Interests in Real Property that may be materially affected by any decision made or participated in by the designated individual must be disclosed on Schedules B &/or C of Form 700.  If the designated individual is a trustee, designated alternate trustee, or SamCERA staff member, disclosure is only required on real property located in the County of San Mateo.

Category 3:  Income that may be materially affected by any decision made or participated in by the designated individual must be disclosed on Schedules C, D, E, &/or F of Form 700.

Category 4:  A Business Entity in which the designated individual is a director, officer, partner, trustee, or holds any position of management that may be materially affected by any decision made or participated in by the designated individual must be disclosed on Schedule C of FPPC Form 700.  Be it further

“Resolved that the board, in concert with the opinion of the FPPC, defines as consultants specifically identified to file by the Board of Retirement “employees and principals who provide services to the board, with influence over the investment decisions pertaining to the retirement fund and in positions that involve the making or participation in the making of decisions which may foreseeably have a material effect on any reportable financial interest”.  Be it further

“Resolved that the board hereby authorizes the Chief Executive Officer to instruct the following firms to identify employees and principals who meet the definition of consultant set forth above: Barclays Global Investors, Brandes Investment Partners, Chartwell Investment Partners, Deutsche Asset Management, Fidelity Management Trust Company, Goldman Sachs Asset Management,  INVESCO Realty Advisors, Julius Baer Investment Management, Mondrian Investment Partners, Strategic Investment Solutions, and Western Asset Management.   Be it further

“Resolved that the board hereby instructs the Chief Executive Officer to provide for annual disclosure by all individuals in the Designated Positions.  Each individual holding a Designated Position must file  the original Form 700 with the Chief Executive Officer who must make and retain a copy and forward the original to the County Clerk who must make and retain a copy and forward the original to the FPPC.  Form 700 must be filed at the times and on the forms prescribed by law.  Failure to file statements on time may result in penalties, including but not limited to late fines.  Be it further

“Resolved that the board hereby instructs the Chief Executive Officer to implement a program to provide reasonable assurance that foreseeable potential conflict of interest situations will be disclosed and prevented and to provide each affected person with a clear and specific statement of his or her duties under the Conflict of Interest Code.  Be it further

“Resolved that the board hereby instructs the Chief Executive Officer to supply the necessary forms and manuals, to monitor timely and complete filing compliance, to take action regarding late filings and to report apparent violations of the Conflict of Interest Code to the Board.”

   

0601.7.6

Annual Review & Revision of SamCERA’s Education Policy:   Following a comment made by Mr. Murphy, there was discussion regarding oral reports made by trustees following the attendance at educational seminars.  Mr. Hackleman opined that should any outstanding compelling issues arise from a seminar, trustees should be inclined to report to the board regarding the issues.  However, he did not feel it necessary to report on a seminar if no topic discussed proved germane.  Trustees felt comfortable with the current language in the policy.  Mr. Bryan opined that materials from conferences should be added to the library for reference. 

Motion by Tashman, second by Hackleman, carried unanimously to reaffirm Resolution 98-99-12, as amended on February 22, 2005, setting forth SamCERA’s Education Policy. 

   

0601.7.7

Introduction to SamCERA’s Travel Policy:  Mr. Clifton reported that at the most recent audit, Brown Armstrong discovered that SamCERA does not currently have a travel policy.  Brown Armstrong stated that most of SamCERA’s peers are developing or already are in possession of a travel policy.  Mr. Clifton presented a draft policy to the board.  Following discussion regarding meal allowances and other accommodations, staff and counsel stated that they will integrate trustee comments and the county’s travel policy and come back to the board with a revised version at a future board meeting.

   

0601.7.8

Approval of extension to SamCERA’s Audit Services Contract with Brown Armstrong:  Mr. Clifton stated that SamCERA’s audit services contract with Brown Armstrong Paulden McCown Starbuck & Keeter Accountancy Group will expire this year.  He submitted an audit services agreement which extends the contract through January 31, 2009.  He indicated that there is an annualized increase of approximately 1.5%.  Mr. Clifton stated that staff is satisfied with the quality of work that Brown Armstrong provides and recommended that the board approve the contract.  In response to a question from Mr. Hackleman, Mr. Clifton stated that Brown Armstrong came in as the lowest bid amongst audit services candidates when they were selected in 2003. 

Motion by Bryan, second by Stuart, carried unanimously to approve the audit services contract, extending the current services agreement between the board and Brown Armstrong through January 31, 2009.

Trustees opined that a Request for Proposal process be performed for audit services in three years, near the expiration of Brown Armstrong’s renewed contract.

   
   

0601.8

Management Reports

   

0601.8.1

Chief Executive Officer's Report:  Mr. Bailey reported that staff will be holding their annual staff retreat in which staff will discuss their current strategic plan.  Information from the retreat will feed into next year’s budget.  Mr. Bailey also reported that Elizabeth LeNguyen, SamCERA’s Office Specialist, has left employment with SamCERA.  He submitted additional disability statistics to the board.  The statistics provide the number of approvals versus denials for non-service and service-connected disabilities.  Mr. Bryan opined that it would be beneficial to learn the fiscal impact of granting disabilities.  Mr. Bailey said that the actuary can look into the cost of granting disabilities.

   

0601.8.2

Investment & Finance Manager’s Report:   Mr. Clifton stated that the Comprehensive Annual Financial Report and Popular Annual Financial Report are available at SamCERA website (www.samcera.org).  The PAFR was also mailed out to SamCERA members.  Mr. Clifton reported that 1099R’s have been prepared and were ready to be mailed out.  He also submitted a chart to the board, illustrating the rebalancing activities that occurred in the month.  One of Goldman Sach’s Vice Presidents, Robert Kaplan, is resigning.  Mr. Clifton stated that this has no impact on SamCERA.  BGI’s global equity team is also undergoing staff changes, but this will have little impact on SamCERA.  He also reported that Legg Mason has completed its deal with Citicorp.  Assets from the deal will be transitioning into Western Asset Management.  Aberdeen published a press release indicating an increase in staff in its London office.  No changes to the Philadelphia office were reported.  Mr. Clifton also submitted an INVESCO report, reviewing the quarterly performance of the fund.  $40 million had been called in early January and SamCERA is now at its full real estate allocation.  An additional $100 million was added to the INVESCO Core Fund from four other investors. 

   

0601.8.3

County Counsel's Report:   Ms. Carlson discussed a newly filed lawsuit against the County of San Diego Employees’ Retirement Association.  It was filed by Mr. Conger, on behalf of a resident against the retirement board.  The County of San Diego uses a 20-year amortization period and Mr. Conger alleges that this may possibly violate a section in the 1937 Act. 

She also mentioned that the state court criminal action against the City of San Diego retirement board will be proceeding to trial to determine whether or not the board violated Government Code Section 1090 in decisions that were made. 

She also submitted information regarding a new federal indictment against the former administrator, legal counsel and trustees of the San Diego City Employees’ Retirement System.  Allegations concern a quid pro quo agreement between the retirement board and the plan sponsor in which retirement benefit enhancements were approved in exchange for the ability to defer payment of county contributions.  This resulted in a dramatic decrease in the system’s funded percentage.  Ms. Carlson stated that information was not fully disclosed to the board.  This federal indictment is based on what was exchanged in e-mails between board trustees.  The allegation of mail fraud derives from the mailing of the board packet since full disclosure of information was not included.

0601.9

Adjournment in Memory of the following Deceased Members:  There being no further business, Mr. Lewis adjourned the meeting at 4:16 p.m., in memory of Dennis Cosgrove, former trustee, and the following deceased members:

       
 

Morales, Philip

September 27, 2005

Library

 

Peacock, Donald

October 8, 2005

Beneficiary Of Ruth

 

Burks, Freddie

November 3, 2005

Probation Department

 

James, Barbara

November 7, 2005

Probation Department

 

Johnson, Phillip

November 23, 2005

Planning Department

 

Brehm, Ruth

November 23, 2005

Department Of Social Services

 

Stoddard, Mary

November 23, 2005

Department Of Social Services

 

Cosgrove, Dennis

November 24, 2005

Probation Department

 

Yamada, Tomeki

November 30, 2005

Beneficiary Of Alice

 

Pichler, Howard

December 3, 2005

Sheriffs’ Department

 

Keegan, Joseph

December 14, 2005

Coroner’s Office

 

Lew, Gloria

December 15, 2005

Department Of Public Health

 

Mcquilkin, Roy

December 15, 2005

Dept. Of Buildings And Grounds

 

Shaver, George

December 19, 2005

Department Of Transportation

 

Gay, Rommel

December 23, 2005

San Mateo County Medical Center

 

Cowgill, Emma

December 26, 2005

Beneficiary Of John

 

Morris, Doris

December 26, 2005

Crystal Springs Rehab. Center

 

Vansickel, Lloyd

December 27, 2005

Department Of Public Works

 

Morehouse, Rosemary

December 27, 2005

Department Of Public Works

 

Cochrane, Colin

December 28, 2005

Tax Collector’s Office

 

Weir, Patricia

December 28, 2005

Beneficiary Of Thomas

 

Frank, Justine

January 1, 2006

Tax Collector’s Office

 

Baughman, Jeanne

January 7, 2006

Municipal Court Division

Kenneth A. Lewis, Chair

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