MIN UTE S OF THE BOARD OF PENSION COMMISSIONERS MEETING OF FEBRUARY 11, 1982 The Board of Pension Commissioners of the City of Los Angeles met in Room 155, City Hall South, on Thursday, February 11, 1982, at 9:45 a.m. COMMISSIONERS: Arthur Burdorf, President Pro Tern Sam Diannitto Ronald S. W. Lew Olga Marcus Garo Minassian Karl L. Moody DEPARTMENT OF PENSIONS: Wm. S. Hutchison, Acting Manager-Secretary James J. McGuigan, Asst. Manager-Fiscal Jerry Bardwell, Investment Officer CITY ATTORNEY: Siegfried O. Hillmer, Assistant City Attorney PRESENTATION OF MINUTES OF THE MEETINGS OF JANUARY 29, 1981; FEBRUARY 5, 1981; FEBRUARY 12, 1981; FEBRUARY 19, 1981; FEBRUARY 26, 1981; MARCH 5, 1981 AND MARCH 12, 1981 Approved. Motion by Commissioner Lew, seconded by Commissioner Diannitto and adopted by the following vote: ayes, Commissioners Diannitto, Lew, Marcus, Moody, and President Pro Tern Burdorf - 5; noes, none. INVESTMENTS President Pro Tern Burdorf referred to Item No. 2 and asked if any of the investment advisors were at today's meeting. Mr. Jack Wood of Wright Investors' Service came forward for presentation and submitted his stock purchase list for approval of the Board. STOCK PURCHASE RESOLUTION NO. 82125 2525 NEW SYSTEM GENERAL PENSION FUND After discussion by the Board it was moved by Commissioner Diannitto that upon the advice of investment counsel, the Manager-Secretary and/or Wright Investors' Service be authorized to purchase up to $3,560,000 of capital stock in each of the following companies at the market price, plus commission and charges: ARA Services Bausch & Lomb Abbott Laboratories Beatrice Foods Alco Standard Beckman Instruments American Brands Becton Dickinson American Broadcasting Belco Petroleum American Cyanamid Bendix Corporation American Home Products Big Three Industries American Hospital Supply Black & Decker American Standard Blue Bell Incorporated American Telephone & Telegraph Borden Incorporated Ametek Incorporated Briggs & Stratton AMP, Incorporated Bristol-Myers Amsted Industries Bucyrus-Erie Archer Daniels Burndy Arkansas-Louisiana Gas r CBS Incorporated ARK LA CPC International Atlantic Richfield Campbell Soup Auto Data Processing Campbell Taggart Avnet Incorporated Capital Cities Comm. Avon Products Carlisle Corporation Baker International Carnation Company Bandag Incorporated Carpenter Technology Bank of New York Caterpillar Tract Bank of America Central & South West Bard (C.R.) Incorporated Central Tel & Utilities Barry Wright Cessna Aircraft Baxter Trav. Laboratories Chesebrough-Pond's ~~------------------------------------------------------------ 835 Cleveland-Cliffs Johnson & Johnson Clorox Company Jostens Incorporated Coca-Cola Company Joy Manufacturing Colgate-Palmolive K Mart Corporation Colt Industries Kellogg Company Columbia Gas Kennametal Incorporated Combustion Engines Kerr-McGee Corporation Cone Mills Kimberly-Clark Consolidated Foods Knight-Ridder Consolidated Freightways Lenox Incorporated Continental Group Lilly (Eli) & Company Continental Illinois Loctite Corporation Cooper Industries Longs Drug Stores Dana Corporation Lubrizol Corporation Dayton Hudson Lucky Stores Deere & Company MCA Corporation Delta Airlines Macy (R.H.) Company Deluxe Check Printers Malone & Hyde Dennison Manufacturing Manufacturing Hanover Dexter Corporation Masco Corporation Disney Products May tag Company Dr. Pepper McGraw-Hill Donnelley & Sons Melville Corporation Dover Corporation Mercantile Texas Corporation Dresser Industries Merck & Company Dun & Bradstreet Midcon Corporation E. G. & G. Incorporated Midland-Ross Eastman Kodak Milton Bradley Eaton Corporation Minnesota Mining Eckerd (Jack) Mobil Corporation Edison Brothers Stores Morgan (J.P.) Company Emerson Electric Motorola Emery Air Freight NBD Bancorp Emhart Corporation Nalco Chemicals Enserch Corporation National Medical Care Equitable Gas National Service Industries Ethyl Corporation Northwest Bancorp Ex-Cell-O Norton Company Exxon Corporation Norton Simon FMC Corporation Nucor Corporation Fed. Dept. Stores ONEOK, Incorporated First City Bank of Texas Pacific Lumber Florida Power & Light Panhandle Eastern Florida Power Corporation Parker-Hannifin Fort Howard Paper Peoples Energy Foxboro Company Pepsico, Incorporated Gannett Company Perkin Elmer General Electric Petro lane Incorporated General Foods Pfizer Incorporated General Instrument Phillips Petroleum General Mills Pioneer Corporation General Signal Pitney Bowes Genuine Parts Proctor & Gamble Gerber Products Public Service of Indiana Grainger (W.W.) Quaker Oats Great Northern Nekoosa Ralston Purina Halliburton Company Raytheon Company Harsco Corporation Republic of Texas Corporation Heinz (H.J.) Company Revco D.S. Incorporated Helmerich & Payne Revlon Incorporated Heublein Incorporated Reynolds (R.J.) Industries Hewlett-Packard Rite Aid Corporation Hoover Universal Rochester Tel Houston National Gas Rockwell International Hughes Tool Company Rollins Incorporated Illinois Tool Works Rorer Group Ingersoll-Rand Rubbermaid Interco Incorporated Schering-Plough International Business Machines Schlumberger Limited Interfirst Scott & Fetzer International Flavors & Fragrances Internorth, Incorporated Signode Corporation Thiokol Corporation Smith International Thomas & Betts SmithKline Corporation Time Incorporated Snap-On Tools Times Mirror Sonat Incorporated Timken Company Southe rn Un ion Transway International South Western Public Services Tucson Elec. Power Company Sperry Corporation Union Camp Corporation Square D Company Union Oil of California Squibb Corporation Union Pacific Standard Brands Paint U. S. Gypsum Standard Oil of California U.S. Shoe Corporation Standard Oil of Indiana U.S. Tobacco Stanley Works United Technologies Stauffer Chemical United Telecomms Sterling Drug Universal Leaf Tobacco Stone & Webster Upjohn Company Sundstrand Corporation VF Corporation Super Value Stores Vulcan Materials TRW Incorporated Texas Commerce Warner Communications Texas Gas Trans Waste Management Texas Instruments Weyerhaeuser Texas Oil & Gas Winn-Dixie Stores Texas Utilities Witco Chemical Textron Incorporated Xerox THE APPROVED WRIGHT INVESTMENT LIST STOCKS FOR PURCHASE UNDER THE NEW CHARTER REVISION PART II CBI Industries Medtronic Incorporated Central Louisiana Energy Nabisco Brands Crown Cork & Seal Nicor Incorporated Dart & Kraft Incorporated Phibro Corporation Digital Equipment Purex Industries Engelhard Corporation Richardson-Vicks Incorporated First Interstate Bancorp SFN Companies Houston Industries TECO Energy Louisiana Land & Expl. Tektronix Incorporated Texas Eastern Corporation This authorization for stock purchase is to remain in effect for 90 days after this date. The motion was seconded by Commissioner Moody and adopted by the following vote: ayes, Commissioners Diannitto, Lew, Marcus, Moody and President Pro Tem Burdorf - 5; noes, none. REPORT ON ACTUARIAL VALUATION AS OF JUNE 30, 1981, PRESENTED BY MARTIN E. SEGAL COMPANY Mr. James Laws of Martin E. Segal Company came forward. Discussion ensued regarding the Actuarial Valuation Report as of June 30, 1981. The Board agreed that more information is needed, and Jim Laws stated he will get this information to the Board by next week's Board meeting. CONSIDERATION OF MANAGER'S PROPOSED BUDGET FOR FISCAL YEAR 1982-83. President Pro Tem Burdorf deferred this item for two weeks. NATIONAL CONFERENCE ON PUBLIC EMPLOYEE RETIREMENT SYSTEMS, 41ST ANNUAL CONVENTION, APRIL 4-8, 1982, WASHINGTON, D.C. The Acting Manager-Secretary stated that the National Conference on Public Employee Retirement Systems' 41st Annual Convention will be held April 4-8, 1982, at Washington, D. C. After discussion by the Board, it was moved by Commissioner Diannitto that two commissioners and one staff member be authorized to attend the National Conference on Public Employee Retirement Systems' 41st Annual Convention to be held April 4-8, 1982, at Washington, D. C., and that an appropriation not to exceed $1800 per person be authorized to covar the cost of travel and incidental expenses for each person attending, which motion was seconded by Commissioner Moody and adopted by the following vote: ayes, Commissioners Diannitto, Lew, Marcus, Moody and President Pro Tem Burdorf - 5; noes, none. 837 CONSIDERATION OF CURRENT DEPARTMENT OF PENSIONS PROCEDURES AND LEGAL REQUIREMENTS RELATED TO OFFSET OF WORKERS COMPENSATION AWARDS FROM DISABILITY PENSION BENEFITS A memorandum regarding this issue was submitted to the Board members by Deputy City Attorney Mary Jo Curwen in which she commented that the Board is duty bound by the City Charter to offset the payments, and that a Charter change is needed to remedy this problem. After discussion, the Board concluded that the Charter change language should read the same as in Article XXXV, the New Safety Members Pension Plan. The Board directed staff to initiate a Charter change in regard to the Workers Compensation offset procedure. Commissioner Minassian entered the Board room toward the end of the above discussion. INVESTMENT POLICY CHANGES - MINOR PROVISIONS TO THREE SECTIONS President Pro Tern Burdorf referred to Item No 3 and asked the Assistant Manager-Fiscal, Mr. James J. McGuigan, if all the input from the employee groups and the investment advisors has been received. Mr. McGuigan stated the revised Investment Policy reflects these suggestions. After discussion, Commissioner Moody moved to implement the changes as so stated, which motion was seconded by Commissioner Diannitto and adopted by the following vote: ayes, Commissioners