MINUTES OF THE REGULAR MEETING OF THE GENERAL EMPLOYEES PENSION BOARD, DECEMBER 13, 2010 Present: Chair Mike Taylor, Vice-chair Cheri Potts (arrived at 8:36), Secretary Pamela Nadalini (arrived at 9:20), Treasurer Christopher Lyons, and Trustees Barry Keeler and Susan Kosko Absent: Trustee Gretchen Schneider Others Present: Attorney Scott Christiansen, Mr. Steve Palmquist, Gabriel Roeder & Smith, Mr. Charlie Mulfinger, Graystone Consulting, Pension Plans Administrator Benita Saldutti, Pension Analyst Gail Loeffler and Staff Member Janice Docking CALL TO ORDER Chair Taylor called the meeting to order at 8:32 a.m. APPROVAL OF THE MINUTES OF NOVEMBER 15, 2010 By consensus of the Board, the minutes of November 15, 2010, were approved. APPROVAL OF RETIREMENT REQUEST OF CARY CLARK, EARLY RETIREMENT REQUEST OF PAUL MICHAUD AND VESTED TERMINATION REQUESTOF LYNN LYNCH Ms. Saldutti stated that Cary Clark, 70 years, 11 months of age, with 18 years of service is requesting normal retirement with the lifetime option, effective December 1, 2010. Ms. Saldutti stated that Paul Michaud, 61 years, 10 months of age, with 13 years, 4 months of service is requesting early retirement with the 75% pop-up option, effective January 1, 2011. Ms. Saldutti stated that Lynn Lynch's position was eliminated effective August 11, 2010, that she is eligible for a vested termination benefit and has selected the lump sum option. On a motion of Treasurer Lyons and a second of Trustee Kosko, it was moved to approve the normal retirement request of Cary Clark, the early retirement request of Paul Michaud and the vested termination request to Lynn Lynch. Motion passed unanimously. ACTUARIAL VALUATION- - GABRIEL, ROEDER & SMITH Mr. Palmquist reviewed the Actuarial Valuation report ending September 30, 2010, highlighting areas of importance to the Board: City's required contribution 21.18% of payroll VS. 15.24% last year Funded ratio of Plan is 80.4% Experience loss of $7.25 million mainly due to investments December 13, 2010 1 The three main reasons of increased cost to the City for this year was the reduction of the assumed rate of return from 8.5% to 8.3%, lower payroll and investment loss. On a motion by Treasurer Lyons and a second of Trustee Kosko, it was moved to accept the Actuarial Valuation report. Motion passed unanimously. DISCUSSION RE: ASSUMED RATE OF RETURN Mr. Palmquist distributed information regarding other public plans that have either lowered their assumed rate of return or are anticipating doing SO. He continued that twelve to fifteen of his clients have determined to reduce their assumed rate of return over time rather than abruptly. Mr. Mulfinger suggested that the Board look at the assumed rate of return every year and make their decision each year, allowing for flexibility. The consensus of the Board is to wait until next month's meeting for an in-depth discussion on this subject with Mr. Mulfinger before making a decision on changing the assumed rate of return. Trustee Kosko stated the Board should also review the percentages in asset allocation and consider alternative investments, such as real estate and other types of investments rather than 75% invested in equities. Trustee Keeler stated that in listening to the employees in his area, they would not be opposed to an increase in employee contributions to provide additional percentage funding to the Plan. Secretary Nadalini stated that the Teamsters' are currently in negotiations and this would be something that the union would have to negotiate with the City. The consensus of the Board was for Mr. Mulfinger to educate the Board on both the assumed rate of return and asset allocation at the Board meeting in January before any decision was made. PUBLIC INPUT None OTHER MATTERS INVESCO Attorney Christiansen requested Mr. Mulfinger give an update on Morgan Stanley's sale of INVESCO at the next meeting. Date for January Meeting Ms. Saldutti reported that the meeting for January had been scheduled on January 21, in conjunction with the Police Officers' Pension Board meeting, but because of the Actuarial Valuation report at this meeting, a new date will be selected after checking with all involved. December 13, 2010 2 FPPTA Certification Ms. Saldutti stated the Pension Office would answer to FPPTA regarding certification for Chair Taylor and Vice-chair Potts. Apology from Secretary Nadalini Secretary Nadalini apologized for being late to this meeting. She explained that she had a conflict. Next Meeting The next regular meeting will be determined at a later date. ADJOURN The meeting was adjourned at 10:04 a.m. - - M auak Nadas 1 Michael Taylor, Pamela p Chair Nadalini, Secretary December 13, 2010 3