IOI~~:::-:=:. !::SamCERA Notice of Public Meeting SAN t1<\TEO COUNT( EMf'lO'l'EES' P,CTlP,EMENT A$SOCIATION The Board of Retirement of the San Mateo County Employees' Retirement Association will meet on Tuesday, December 16, 2014, at 10:00 'A.M. PUBLIC SESSION - The Board will meet in Public Session at 10:00 a.m. 1. Call to Order, Roll Call and Miscellaneous Business 2. Oral Communications 2.1 Oral Communications from the Board 2.2 Oral Communications from the Public 3. Approval of the Minutes 3.1 Acceptance of Audit Committee Meeting Minutes, from October 28, 2014 3.2 Approval of Regular Board Meeting Minutes from October 28, 2014 4. Approval of the Consent Agenda* 4.1 Disability Retirements 4.3 Continuances • Carmen Bernal 4.4 Deferred Retirements • Darlene Carr 4.5 Member Account Refunds • Lydia Goff 4.6 Member Account Rollovers • William Jacobs 4.7 Approval/of Annual Review Questionnaire for • Abby Osborn- SIS Parker 4.8 Authorization to Sign Letter to Delaware 4.2 Service Retirements Legislature Regarding By-laws that Shift Litigation Expenses S. Benefit & Actuarial Services 5.1 Consideration of Agenda Items, if any, Removed from the Consent Agenda 6. Investment Services 6.1 Preliminary Monthly Portfolio Performance Report for the Period Ending October 31,2014 . 6.2 Quarterly Investment Performance Report for the Period Ending September 30,2014 6.3 Presentation of Private Equity Semi-Annual Performance Report as of June 30, 2014 6.4 Presentation on SamCERA's Securities Lending Program 6.5 Report on Risk Parity, Commodity, Hedge Fund, and Real Estate Annual Manager Reviews 6.6 Approval of Opportunistic Credit Manager Shortlist Selection Process 6.7 Approval of purchase of Alternative Investment (Confidential Under Gov. Code §6254.26, to be heard in Closed Session, C2) 7. Board & Management Support 7.1 Preliminary Quarterly Financial Report for the Period Ending September 30,2014 7.2 Report from the Ad Hoc Committee Regarding the Evaluation of SamCERA's Medical Advisor 7.3 Approval of Resolution Amending Interest Crediting Policy 7.4 Approval of Board of Retirement Meeting Schedule for 2015 7.5 Discussion of Board / Staff Retreat Topics 7.6 Update on Progress of SamCERA's Information Technology Projects Page 1 0/3 - Posted 12/10/2014 Notice of Public Meeting Page 2 of 2 8. Management Reports 8.1 Chief Executive Officer's Report 8.2 Assistant Executive Officer's Report 8.3 Chief Investment Officer's Report 8.4 Chief Legal Counsel's Report CLOSED SESSION - The Board may meet in closed session prior to adjournment Cl Consideration of Disability Items, if any, Removed from the Consent Agenda C2 Approval of Purchase of Alternative Investment (Confidential Under Gov. Code §6254.26) 9. Report on Actions Taken in Closed Session 10. Adjournment in Memory of the Following Deceased Members: Colvert, Catherine October 12, 2014 Social Services Williams, Louis October 13, 2014 Human Services Agency Thomas, Andree October 19, 2014 Public Health Florence, Elizabeth October 18, 2014 Social Services Teglia, Albert October 26, 2014 BOS Alexander, Lester October 23, 2014 Health Services Lindsey, Janet October 23, 2014 Public Health Haseleu, Joan November 5, 2014 Human Services Steier, Belle November 19, 2014 Library Finch, Dolores November 18, 2014 Probation Enright, Carmel November 14, 2014 Sheriff Oross, Gloria November 18, 2014 Dietary Mares, Milton November 18, 2014 County Counsel Leff, Eileen November 14, 2014 Mental Health Kerr, Raymond November 23, 2014 Public Works Hughes, Marilouise November 23, 2014 Assessor Amberg, Barbara November 25, 2014 Library Thurman, Jane November 28, 2014 Sheriff Malfatti, Walter November 22, 2014 Engineering Patterson, John November 15, 2014 Employee & Public Services Hooper, Elsa November 19, 2014 Library Fritz, Jeanne November 19, 2014 Transportation Officer Social Services ~L~ecember 2, 2014 Posted: December 10, 2014 (* ALL ITEMS ON THE CONSENT AGENDA ARE APPROVED BY ONE ROLL CALL MOTION UNLESS A REQUEST IS MADE BY A BOARD MEMBER THAT AN ITEM BE WITHDRAWN OR TRANSFERRED TO THE REGULAR AGENDA. ANY ITEM ON THE REGULAR AGENDA MAY BE TRANSFERRED TO THE CONSENT AGENDA. ANY 4.1 ITEMS REMOVED FROM THE CONSENT AGENDA WILL BE TAKEN UP UNDER CLOSED SESSION; ALL OTHER ITEMS REMOVED FROM THE CONSENT AGENDA WILL BE TAKEN UP UNDER ITEM 5.1.) THE BOARD MEETS AT 100 MARINE PARKWAY, SUITE iGO, WHICH IS LOCATED ON THE SE CORNER OF TWIN DOLPHIN & MARINE PARKWAY IN REDWOOD CITY. Detailed directions are available on the "Contact Us" page of the website www.samcera.org. Free Parking is available in all lots in the vicinity of the building. A copy of the Board of Retirement's open session agenda packet is available for review at the SamCERA offices and on our website unless the writings are privileged or otherwise exempt from disclosure under the provisions of the California Public Records Act. Office hours are Monday through Thursday 7 a.m. - 6 p.m. Page 2 of 3 - Posted 12/10/2014 IN COMPLIANCE WITH THE CALIFORNIA GOVERNMENT CODE AND THE AMERICANS WITH DISABILITIES ACT: Sam CERA's facilities and board and committee meetings are accessible to individuals with disabilities. Contact samCERA at (650) 599-1234 at least three business days prior to the meeting if (1) you need special assistance or a disability-related modification or accommodation, including auxiliary aids or services, in order to participate in this meeting; or (2) you have a disability and wish to receive the agenda, meeting notice, agenda packet or other writings that may be distributed at the meeting in an alternative format. Notification in advance of the meeting will enable SamCERA to make reasonable arrangements to ensure full accessibility to this meeting and the materials related to it. San Mateo County Employees' Retirement Association Minutes of the Audit Committee Meeting of the Board of Retirement December 16, 2014 Agenda Item 3.1 October 28, 2014 – Audit Committee Agenda PUBLIC SESSION – The Committee will meet in Public Session at 9:00 a.m. A Call to Order and Roll Call B Oral Communications Oral Communications From the Committee Oral Communications From the Public C Review and Discussion of the Following Board of Retirement Agenda Items (from the Regular Meeting, Tuesday, October 28, 2014, at 10:00 a.m.) 5.2 Acceptance of Milliman, Inc. Report on GASB 67 and 68 Disclosures For FY 2013-14 7.2 Acceptance of Financial Audit Management Reports and Findings 7.3 Approval of SamCERA’s 2014 Comprehensive Annual Financial Report 7.4 Annual Review of Independent Auditor, Brown Armstrong D Finance Officer’s Report E Adjournment October 28, 2014 – Audit Committee Meeting Minutes A. Call to Order: Chair Eric Tashman called the meeting of the Audit Committee to order at 9:12 a.m. Roll Call: Present: Natalie Kwan Lloyd, Paul Hackleman and Eric Tashman. Excused: Sandie Arnott Staff: David Bailey, Scott Hood, Brenda Carlson, Mabel Wong and Kristina Perez. Consultants: Nick Collier, Milliman; Andy Paulden, Brown Armstrong B. Oral Communications: Ted Kai noted that SamCERA’s offices are hard to find and that the conference meeting room is hard to find as well. The receptionist did not know about the meeting location. [Staff responded that there will be better signage for those Committee meetings not held in the Boardroom and that this was the first week of work for SamCERA’s new part-time receptionist.] Mr. Kai also wanted staff’s opinion regarding Milliman’s actuarial work. [Staff responded that Milliman is excellent and that Milliman’s work is independently audited by the Segal firm.] C. Review and Discussion of the Following Board of Retirement Agenda Items: 5.2 Acceptance of Milliman, Inc. Report on GASB 67 and 68 Disclosure: Mr. Collier presented the GASB 67 and 68 Disclosure report. There was discussion on the discount rates. SamCERA had adopted a long-term expected rate of return net of investment and administrative expenses at 7.25% earlier in June. GASB 67/68 use a discount rate net of investment expense and gross of administration expense. Administrative expense is estimated at 20 basis points, resulting in a 7.45% long-term expected rate of return for GASB purposes. Having two rates of return is confusing. However, to have a single rate of return, the administrative expense would need to be added in the normal cost. Mr. Tashman wants to consider using explicit discount rate in 2015 and to include administration expense in normal cost. Mr. Hackleman wants to know what other plans are doing about the additional cost and how it is distributed, and for staff to bring this October 28, 2014 DRAFT Audit Committee Meeting Minutes Page 1 of 2 San Mateo County Employees' Retirement Association Minutes of the Audit Committee Meeting of the Board of Retirement information to the Board. Action: Mr. Hackleman moved to recommend Board acceptance of the Milliman, Inc. Report on GASB 67 and 68 Disclosure; the motion was seconded by Ms. Kwan Lloyd and carried 3-0, with Tashman, Hackleman and Kwan Lloyd in favor and none opposed (Arnott excused). 7.2 Acceptance of Financial Audit Management Reports and Findings: Mr. Paulden from the Brown Armstrong accounting firm presented an overview of the audit process and the four annual audit reports. SamCERA received a clean audit report. There were two agreed-upon conditions on IT procedures with recommendations that have already been implemented. Action: Mr. Hackleman moved to recommend Board acceptance of the Financial Audit Report; the motion was seconded by Ms. Kwan Lloyd and carried 3-0, with Tashman, Hackleman and Kwan Lloyd in favor and none opposed (Arnott excused). 7.3 Approval of SamCERA’s 2014 Comprehensive Annual Financial Report: Ms. Wong commented that GASB 67 is implemented in the 2014 CAFR; schedules required by GASB 67 and also 68 are included in the Financial section of the CAFR.