Fresno County Board of Retirement s2

BOARD OF RETIREMENT FRESNO COUNTY EMPLOYEES’ RETIREMENT ASSOCIATION

Wednesday July 20, 2011 – 8:30 AM

Trustees Present:

Alan Cade, Jr. Michael Cardenas Franz Criego Vicki Crow Eulalio Gomez Steve Jolly Phil Larson John Souza

Trustees Absent:

Nick Cornacchia

Others Present:

Regina Wheeler, Alternate Trustee Stephen James, James Evans & Associates Jim Evans, James Evans & Associates Sheree Johnson, James Evans & Associates Jeff Adair, Tegrit Technologies Mike Spickard, Tegrit Technologies Akio Tagawa, Linea Solutions Jeff Kaufmann, Linea Solutions Kelly Prinz, Retirement Benefits Manager Thanaphat “Pat” Srisukwatana, Systems & Procedures Analyst Attorney Jeffrey Rieger, Reed Smith via tele-conference Kevin Smith, SEIU Susan Coberly, Senior Deputy County Counsel Roberto L. Peña, Retirement Administrator Becky Van Wyk, Assistant Retirement Administrator Elizabeth Avalos, Administrative Secretary

1. Call to Order

Chair Cade called the meeting to order at 8:35 AM.

2. Pledge of Allegiance

Recited.

3. Public Presentations

Consent Agenda/Opportunity for Public Comment

A motion was made by Trustee Crow, seconded by Trustee Souza, to Approve Consent Agenda Items 4-16. VOTE: Unanimous (Absent – Cardenas, Cornacchia, Criego)

*4. Approve the June 22, 2011 Special Meeting Minutes

07/20/11 Regular Meeting 2 RECEIVED AND FILED; APPROVED

*5. Retirements

RECEIVED AND FILED; APPROVED

Esperanza Ache Social Services, Deferred 7.81 Darling Burch Sheriff 17.18 Marcia A. Cory VMC, Deferred 4.60 Freddie D. Elston, III Probation 17.21 Roger D. Gaskin Social Services 14.00 Robert F. Gottselig District Attorney 18.97 Mary Esther Gutierrez Superior Court 21.41 Mary J. Helton Social Services 31.40 Sharon D. Hovespian Social Services, Deferred 10.32 Catherine A. Huerta Social Services 35.58 Philip M. Jay County Counsel, Deferred 9.98 Karen G. Kitchen Public Heath, Deferred 6.61 Bertram I. Lee Public Works & Planning 11.46 Bradley Manning Public Works & Plan, Deferred 13.49 Josie M. Mendietta Social Services 17.90 Stephen A. Mendyk District Attorney, Deferred 10.24 Anne E. Neal Library 29.13 Sandra K. Palmer Superior Court 28.29 Fred Ricardo General Services 17.75 Beatrice C. Rodriquez VMC, Deferred 16.34 Valana E. Schomer Behavioral Health, Deferred 0.80 Patricia E. Scovill Library 8.45 Sam Teragouchi Sheriff 20.17 Linda D. Valencourt Social Services 17.28 Debra Verdugo Social Services 24.92 Daniel Vlaminck ITSD 18.70 Nancy Whorton Probation 24.78

*6. Disability Retirements

James L. Greenwood Sheriff 2.47

*7. Deferred Retirements

Camille A. Boone Child Support Services 12.95 Nicholas A. Heryford Superior Court 2.12 Kenneth G. Loders Library 7.97 Victoria Ramirez Child Support Services 15.71 Gregory E. Strickland District Attorney 16.28 07/20/11 Regular Meeting 3

*8. Public Records Requests and/or Retirement Related Correspondence from Debbie Rinaldi, MedRe Partners, Julie Bowler, FCERA Member; Manuel Nieto, FCERA Member; Eric Starr, CapXPartners; Elizabeth Grassetti, EBMUD Retirement; JJ Popowich, LACERA; Gladys Smith, SamCERA; Kirti Mistry, Preqin; and Catherine E. Walker, ACERA

RECEIVED AND FILED

*9. Summary of monthly statistics from the Retirement Association Office on service credit purchases, retirement benefit estimates, public service, age adjustments, final compensation calculations, and disability retirement applications for June 2011

RECEIVED AND FILED

*10. Update of Board of Retirement directives to FCERA Administration

RECEIVED AND FILED

*11. Educational Reading Material

RECEIVED AND FILED

 June 1, 2011 PlanSponsor article – NN Judge Allows for Cutback of Pension COLAs  June 14, 2011 Asset International article – The End of the 3 and 30  June 14, 2011 Asset International article – Pension Quandary: Valuing Liabilities  June 16, 2011 PlanSponsor article – Invesco Introduces First Fundamental Pure Style ETFs  June 22, 2011 CNBC article – Tax hikes needed for pension funding: study  June 27, 2011 Pensions & Investments article – Holdout NEPC entering discretionary consulting arena  June 28, 2011 PlanSponsor article – Pension Risk Transfer: A Means to an “End”?  June 29, 2011 PlanSponsor article – Study Indentifies Common Element of Well- Funded Public Plans  June 30, 2011 PlanSponsor article – Court Supports Lowering COLAs for COPERA Members  June 30, 2011 PlanSponsor article – Public Pension McCarthyism  July 5, 2011 Asset International article – Bank of America’s $8.5 Billion Settlement Hit With Legal Challenge  July 6, 2011 Pensions & Investments article – CalPERS rehires State Street despite lawsuit  July 8, 2011 Pensions & Investments article – GASB unveils public pension plan accounting proposals  July 8, 2011 The New York Times article – A Proposal for Drawing a Clearer Picture of Public Pension Finances  July 10, 2011 Asset International article – US Public Pensions Subject to Accounting Changes Under GASB Proposals  July 11, 2011 Pensions & Investments article – Rising prices dampen PE return targets  July 12, 2011 PlanSponsor article – NIRS Tells HELP Committee Pensions Are Good for the Economy 07/20/11 Regular Meeting 4  June 2011 Public Retirement Journal Newsletter  Summer 2011 SACRS Magazine

*12. Quarterly Trustee Travel Report and Anticipated Trustee Travel for the quarter ended June 30, 2011

RECEIVED AND FILED

*13. FCERA Cash Flow position as of May 2011

RECEIVED AND FILED

*14. Most recent investment returns, performance summaries and general investment information from investment managers

RECEIVED AND FILED

*15. Active Management Environment Report by Eric J. Petroff, Wurts & Associates

RECEIVED AND FILED

*16. NCPERS Research Series January 2011 The Top 10 Advantages of Maintaining Defined Benefit Pension Plans and Origins of the Financial Markets Meltdown, The Need for Financial Reform, and the Dodd-Frank Bill Response

RECEIVED AND FILED

Trustees Cardenas and Criego joined the Board at 8:39 AM.

17. Discussion and appropriate action on selection of vendor for the Pension Administration System and Electronic Data Management System

The Board heard presentations from representatives of James Evans and Associates Ltd. (JEA) and Tegrit Technologies which were selected by the FCERA Project Team for the implementation of the Pension Administration System and Electronic Data Management System.

The Board reviewed and discussed, in detail, each firm’s qualifications, project timelines and cost proposals. In addition, the Board heard comments and recommendations from the FCERA Project Team (Roberto L. Peña, Becky Van Wyk, Kelly Prinz, Conor Hinds, and Pat Srisukwatana) and Akio Tagawa and Jeff Kaufmann of Linea Solutions.

A motion was made by Trustee Jolly, seconded by Vice Chair Gomez, to Direct Administration to begin contract negotiations with Tegrit Technologies. ROLL CALL VOTE: Yes – Cardenas, Criego, Crow, Gomez, Jolly, Larson. No – Cade, Souza. Absent – Cornacchia. MOTION PASSED.

07/20/11 Regular Meeting 5 Trustee Cardenas departed at 10:50 AM.

18. Discussion and appropriate action on FCERA Board’s authority over the employment terms of FCERA’s non-represented staff members

The Board reviewed and discussed an analysis prepared by Attorney Jeffrey Rieger, Reed Smith, regarding the FCERA Board’s authority over the employment terms of FCERA’s non- represented staff members.

Attorney Rieger, via tele-conference, noted that Reed Smith believes that the Board is the governing body for the non-represented individuals who work at FCERA, with the authority to establish the terms and conditions of their employment, including their salaries, independently from the County. Further, the Board must honor its existing contractual commitments to its Administrator. However, the Board must comply with any laws or constitutional provisions that limit the amount of compensation that it can pay to FCERA’s personnel.

Detailed discussions ensued regarding the general landscape of the Board’s authority over the FCERA staff and its options should the Board wish to pursue further legal analysis and/or independence from the County.

Trustee Larson departed at 11:20 AM.

A motion was made by Vice Chair Gomez, seconded by Trustee Souza, to Direct Administration to work with Counsel to prepare specific recommendations for asserting its independence in regard to non-represented FCERA staff. ROLL CALL VOTE: Yes – Criego, Gomez, Souza. No – Crow, Jolly, Cade. (Absent – Cardenas, Cornacchia, Larson) MOTION FAILED.

19. Discussion and appropriate action on Earn Code Modifications for County of Fresno

Becky Van Wyk, Assistant Retirement Administrator, opened discussions by stating that the County of Fresno recently negotiated reductions in the amounts of certain earn codes as a result of negotiations with employee bargaining representatives. Because other bargaining units will still use the existing earn codes at the higher rates, new earn codes were generated for the reduced payments.

Ms. Van Wyk noted that the new (lower) earn codes should bear the same classification (pensionable/non-pensionable) as the old (higher) earn codes since they are merely different pay levels for the same work.

A motion was made by Trustee Crow, seconded by Vice Chair Gomez, to Approve Item 19 as presented. VOTE: Unanimous (Absent – Cardenas, Cornacchia, Larson)

07/20/11 Regular Meeting 6 Trustee Crow departed at 11:23 AM.

20. Discussion and Appropriate action on Public Records Act (PRA) Policy and the request by the Los Angeles Times for information on retirees

Roberto L. Peña, Retirement Administrator, reviewed a request under the Public Records Act (PRA) for retiree information received from the Los Angeles Times noting that the information requested is very similar to prior requests received wherein information was requested on all retirees. In addition, Mr. Peña noted that the Board requested that similar PRA requests received in the future should be brought back to the Board for direction on processing.

Mr. Peña reminded the Board that the Public Records Act Policy adopted by the Board requires written notification to all members covered by the request before complying with the request. The written notification is to include a copy of the request, the information that will be provided, and a copy of the policy. However, this approach is a costly endeavor when a large number of members are impacted by the request and for this particular instance Administration estimates the cost in the $15,000 range.

Mr. Peña requested that the Board amend the Public Records Act Policy by eliminating the requirement to provide a copy of the policy along with the information that will be provided to all members, at the discretion of the Retirement Administrator, when the cost of adhering to the policy outweighs the “spirit/intention” of the policy, for example when a large number of members are impacted by the request.

Instead, Mr. Peña recommended that a letter be sent to each affected member with a copy of the request and a description of the data that will be provided. Administration believes that this approach still meets the “spirit” of the policy but at a more reasonable cost of approximately $5,000. The members will still have ten days to obtain a court order preventing release of the data before the information is forwarded to the requestor, in this case the Los Angeles Times.

In the event the Board does not wish to amend the Policy as recommended, Mr. Peña suggested that the requirement to provide a copy of the Policy be waived for this Public Records Act Request.

A motion was made by Trustee Criego, seconded by Trustee Jolly, to Amend the Public Records Act Policy as recommended. VOTE: Unanimous (Absent – Cardenas, Cornacchia, Crow, Larson)

21. Discussion and appropriate action on request by Paul Dictos, FCERA Member, for the Board to accept alternate supplementary documents to process his request to purchase Prior Public Service

The Board reviewed and discussed in detail documents submitted by Mr. Paul Dictos, FCERA Member, to consider as alternate supplementary documents to process his request to purchase Prior Public Service.

07/20/11 Regular Meeting 7 Ms. Van Wyk noted that, based on the documents submitted, it is with the Board’s discretion to grant service credit. FCERA’s recommendation is 3 years 5 months and 7 days as calculated using the information provided on the W-2s.

The Board engaged in detailed discussion regarding the accuracy of the submitted documents noting that additional information is needed prior to making a decision.

A motion was made by Vice Chair Gomez, seconded by Trustee Souza, to Deny Mr. Dictos’ request to purchase Prior Public Service unless additional qualifying information is submitted. ROLL CALL VOTE: Yes – Gomez, Jolly, Souza, Cade. Abstain – Criego. (Absent – Cardenas, Cornacchia, Crow, Larson)

Roberto L. Peña, Retirement Administrator, pulled Closed Session Agenda Items 22.A.1., 22.A.2., and 22.A.3., as there was nothing to discuss.

22. Closed Session:

A. Conference with Legal Counsel – Actual Litigation - pursuant to G.C. §54956.9(a)

1. Geraldine Chisom, et al. v. Board of Retirement, etc., et al., Fresno County Superior Court Case No. 10 CECG 02372

2. Fresno County Employees’ Retirement Association v. Countrywide Financial Corporation, et al., United States District Court Central District of California Case No. CV11-0811-PA-SHX

3. Stephanie Mallen, Individually, and et al. v. Alphatec Holdings Inc., et al., United States District Court Southern District of California Case No. 3:10-CV-1673-BEN- JMA

4. David Moore v. Board of Retirement of the Fresno County Employees’ Retirement Association, et al.; Fresno County Superior Court Case No. 10 CE CG 03861

B. Disability Retirement Applications – Personnel Exception (G.C. §54957):

1. Richard Gallegos 2. Rudolph Gutierrez

23. Report from Closed Session

22.A.1. Pulled. 22.A.2. Pulled. 22.A.3. Pulled. 22.A.4. Pulled. (During Closed Session it was determined that there was nothing to discuss.) 22.B.1. Continued. 07/20/11 Regular Meeting 8 22.B.2. Continued.

24. Report from FCERA Administration

Roberto L. Peña, Retirement Administrator, reported on the following:

1. A Personnel Committee meeting will be scheduled in the near future to begin discussions of the Retirement Administrator’s annual performance evaluation. 2. The Superior Courts has started the process of separating from the County. 3. Reconfiguration of the FCERA office cubicles will be completed July 22, 2011. 4. FCERA Administration will begin charging the Personnel Department for administrative services. 5. Mr. Peña will be on vacation from July 25, 2011 through August 8, 2011.