minutes - los angeles fire and police pensions · minutes of the board of fire and police pension...

MINUTES

OF THE

BOARD OF FIRE AND POLICE PENSION COMMISSIONERS

MEETING OF JANUARY 20, 2011

The Board of Fire and Police Pension Commissioners ofthe City ofLos Angeles met in Room 800, 360 East Second Street, on Thursday, January 20,2011.

COMMlSSIONERS PRESENT: Dean Hansell, President Robert von Voigt, Vice President George Aliano Sam Diannitto Brenda Maull Wayne Moore Ruben Navarro Rmil Perez Adlai Wertman

DEPARTMENT OF FIRE AND Michael A. Perez, General Manager POLICE PENSIONS: Laura Guglielmo, Assistant General Manager

William Raggio, Assistant General Manager Tom Lopez, Chief Investment Officer Barbara Nobregas, Commission Executive Assistant

CITY ATTORNEY'S OFFICE: Alan Manning, Assistant City Attorney James Napier, Deputy City Attorney

COURT REPORTER: Diane L. Panicca, U.S. Legal Support

President Hansell called the regular meeting to order at 9: 11 a.m. All of the above-listed Commissioners were present at the start of the meeting.

A. ITEMS FOR BOARD ACTION

1. MODIFICATION OF THE BRIDGEWATER TIPS PORTFOLIO AND POSSIBLE BOARD ACTION

Mr. Tom Lopez, ChiefInvesttnent Officer (CIO), Investments Division presented the three options for the Board to consider in regards to the Fund's fixed income/portable alpha portfolio. He stated that

Minutes of the Board of Fire and Police Pension Commissioners January 20, 2011

Bridgewater is retuming capital to its clients and recommended a small portion ofthe money be placed in a new Bridgewater hedge fund named Pure Alpha Major Markets.

RESOLUTION 11059

Commissioner NavalTo moved that the Board:

1. Approve the use of Pure Alpha Major Markets as part ofthe Bridgewater TIPS Portfolio;

2. Authorize the General Manager and President of the Board, on behalf of the Board to execute the necessary contract modifications, which was seconded by Commissioner Diannitto and approved by the following vote: ayes, Commissioners Aliano, Diannitto, Maull, Moore, Navarro, Perez, von Voigt, Wertman and President Hansell- 9; nays, none.

2. REAL ESTATE PERFORMANCE MEASUREMENT REPORT SECOND QUARTER 2010 BY THE TOWNSEND GROUP

Ms. Jennifer Young, Consultant, and Mr. Nick Rittenhouse, from the Townsend Group presented the quarterly repOli and answered the Board's questions. The board report was received and filed.

Presentation to Commissioners Diannitto and Aliano

President Hansell made a special presentation awarding the "Distinguished Service Medal" to Commissioners Diannitto and Aliano for their years of service and commitment to the Board. President Hansell stated the "Distinguished Service Medal" award policy will be placed on the next board agenda.

3. PRESENTATION BY RV KUHNS ON SOCIALLY RESPONSIBLE INVESTING

Ms. Rebecca A. Gratsinger, Chief Executive Officer, Senior Consultant and Mr. Michael Ford, , Senior Consultant from RV Kuhns presented the report and answered the Board's questions. Mr. Torn Lopez gave the Board information on the Board's proxy policy. President Hansell requested as a future item, the review ofthe proxy policy. Commissioner Wertman suggested that an Ad Hoc Committee be formed to review the data and how the Board is responding to social investment goals. President Hansell concurred with Commissioner Wertman.

4. APPROVAL OF PROPOSED ANNUAL AUDIT PLAN AND FORECAST

The board repOlt was approved as submitted.

RESOLUTION 11060

Minutes of the Board of Fire and Police Pension Commissioners January 20,2011

Commissioner Navarro moved that the Board approve the proposed 2011 Annual Audit Plan and Forecast, which was seconded by Commissioner Maull and approved by the following vote: ayes, Commissioners Aliano, Diannitto, Maull, Moore, Navarro, Perez, von Voigt, Wertman and President Hansell- 9; nays, none.

5. PROCESS FOR BOARD TO SUBMIT 2011-12 STRATEGIC PLAN PROJECTS

Mr. William Raggio, Assistant General Manager, Pensions Division asked the Board to submit ideas for propose projects for the next strategic plan by February 3, 2011 to General Manger Perez or himself. Commissioner Diannitto requested the number of staffrecommendations that the Board has approved in regards to managers underperforming.

6. CONSIDERATION OF REQUEST FOR PHASE-IN OF PLAN ACTUARIAL ASSUMPTIONS AND POSSIBLE BOARD ACTION

Ms. Robyn Wilder, Senior Management Analyst, Communications stated that the City Administrative Officer's (CAO) Office submitted a letter dated Dec. 21,2010 requesting the Board consider phasing in the impact ofthe actuarial assumptions, specifically the medical trend rate assumption that the Board set in November 2010 and the change from 8% to 7.75%. She also discussed having the actuary look at the impact of all the assumptions due to all the changes. She introduced Mr. Thomas Simonovski, Senior Labor Relations Specialist, CAO's Office to answer the Board's questions. Ms. Wilder also answered the Board's questions. General Manager Perez clarified that Commissioner Diannitto requested staffto obtain the funded status and the impact on the funded status infOlmation by the past actions the Board took, where the Board widened the market value corridor and increased asset smoothing to seven years. In addition, Commissioner Diannitto wanted to obtain the impact to the funded status associated with the proposals made today. Ms. Corina Lee, Vice President, Los Angeles Police Protective League agreed with Commissioner Diannitto opposing the phase in. Mr. Lee Kebler, Director, Retired Fire & Police Association, Inc. made a public comment opposing the idea and discussed the previous funding status and the impact on his Association members. The Board further discussed the issue and gave their respective views on the matter.

RESOLUTION 11061

Commissioner Diannitto moved that the Board not approve the City Administrative Officer's request to phase-in funding of the changes in the actuarial assumption affecting the City contribution to retiree "pension" benefits, which was seconded by Commissioner Aliano and approved by the following vote: ayes, Commissioners Aliano, Diannitto, Maull, Moore, Navarro, Perez, von Voigt, Wertman and President Hansell- 9; nays, none.


RESOLUTION 11062

Commissioner Diannitto moved that the Board not approve ofthe City Administrative Officer's request to phase-in funding of the changes in the actuarial assumption affecting the City contribution to retiree "health" benefits, which was seconded by Commissioner Aliano and approved by the following vote: ayes, Commissioners Aliano, Diannitto, Maull, Moore, Navarro, Perez, von Voigt and Wertman - 8; nays, President Hansell - 1.

7. CONSIDERATION OF SUSAN 1. TORRES' REQUEST TO TRANSFER FROM TIER 3 TO TIER 5 AND POSSIBLE BOARD ACTION

This Item was continued at the request of the applicant.

Vice President von Voigt recused himselffrom Item A. 8.

8. COMMISSIONER ALIANO'S REQUEST TO REOPEN THE DISABILITY CASE OF DANIEL ENRIQUEZ AND POSSIBLE BOARD ACTION

President Hansell stated that Commissioner von Voigt will recuse himself and secondly, that the Board detelmine whether to reopen the case or not, and not on the merits of the case at this time. Commissioner Aliano stated his cause to rehear the case again was because he acted in error on the facts of the claim. Commissioner Perez stated the information Commissioner Aliano was unclear about was presented to the Board at the initial hearing and the decision was based solely on the facts and evidence presented when the motion was adopted.

RESOLUTION 11063

Commissioner Wertman moved that the Board consider Commissioner Aliano's request to reopen the disability case of Daniel Enriquez, which was seconded by Commissioner Diannitto and approved by the following vote: ayes, Commissioners Aliano, Diannitto, Maull, Moore, Navarro, Wertman and President Hansell - 7; nays, Commissioner Perez - 1.

B. REPORTS TO THE BOARD

1. Miscellaneous correspondence from money managers, consultants, etc. - Received and Filed

2. MontWy Report

3. Quarterly Summary of Private Equity Commitments


Commissioner Wertman commended staff for adding more information on the report as he requested.

4. Communication to Board - Letter from Los Angeles Police Relief Association re: Out-of-State Members in HMO Dental Plans

Commissioner Aliano stated the Association is commenting on the positive issues ofthe new dental plan they have implemented for members but they should notifY the Board of new plans. General Manager Perez stated at a previous meeting the Board concurred that they should notified of new health plans.

5. Communication to Board - Letter from Los Angeles Police ReliefAssociation and Los Angeles Firemen's Relief Association re: proposed Memorandum ofUnderstanding with LAFPP

General Manager Perez stated the issue will be heard in February and staff will prepare a full report.

6. General Manager's Report

a. Benefits Actions approved by General Manager on January 6, 2011

Pursuant to Resolution 04008, adopted by the Board of Fire & Police Pension Commissioners on August 7, 2003, the following benefit actions have been approved by the General Manager on January 6, 2011.

DISCONTINUED PENSIONS - TIER 1 - 1

Ruby Schmitt Police Widow Retired: 08-04-05 Died: 12-13-10


RayC. Kent Fire Service Retired: 04-02-72 Died: 12-10-10 Evelyn L. Kirk Fire Service Retired: 05-12-78 Died: 11-17-10 William H. Latham Fire Service Retired: 12-05-79 Died: 12-05-10 Richard P. Stuart Fire Service Retired: 06-30-79 Died: 12-14-10 Donald T. Wagner Fire Service Retired: 02-08-81 Died: 11-06-10 Billy D. Alexander Police Service Retired: 01-10-82 Died: 12-09-10 Donald J. Foster Police Service Retired: 07-05-98 Died: 11-25-10 Norman A. Comeau Police Service Retired: 08-01-77 Died: 10-17-10 Robert F. Mc Guire Police Service Retired: 08-05-78 Died: 12-07-10 James L. Segars, J1'. Police Service Retired: 10-09-88 Died: 12-07-10 Henry A. Skeggs Police Service Retired: 05-08-76 Died: 12-03-10 Elizabeth M. Seward Fire Widow Retired: 02-02-02 Died: 12-08-10 La Reu S. Judd Police Widow Retired: 02-27-08 Died: 06-13-10


Anne Reese Police Widow Retired: 10-22-97 Died: 12-08-10 Bryce J. Carroll Dependent Child Retired: 11-23-94 Died: 12-03-10


Gary M. Stameisen Fire Service Retired: 06-30-02 Died: 12-04-10

DISCONTINUED FORMER SPOUSE - TIER 2 - 1

Joan M. Comeau Police Service Retired 07-01-88 Member 10-17-10 Died:

DISCONTINUED FORMER SPOUSE - TIER 5 - 1

Vicki Medina Fire Service Retired: 06-30-07 Member 12-04-10 Died:

SERVICE PENSIONIDROP - TIER 5 - 4

Fire Robert C. Reyes Firefighter III Eff: 11-29-10 26 Years 190 Days

Police Ronald J. Sanchez Police Officer III Eff: 10-13-10 29 Years 53 Days Tammy L. Thomas Detective I Eff: 12-02-10 25 Years 182 Days Timothy F. Wunderlich Police Officer III +1 Eff: 11-27-10 27 Years 185 Days SERVICE PENSIONIDROP - TIER 5 - 1 CORRECTION

Police Charles W. Block Police Officer III Eff: 10-01-10 27 Years 6 Days To correct member's rank from Police Officer II to Police Officer III.

DISCONTINUE DROP - TIER 5 - 1

Police Steven K. Zipperman Retired: 07-09-06 Exit Close of: 01-01-11

b. Other business relating to Department operations

General Manager Perez gave the following updates:

1. He introduced staff to the Board, Mr. James Yeung, Internal Auditor III, who is working with Ms. Erin Kenny in the Internal Audit Section. Mr. Yeung is an experienced Auditor with many years at LAPD. Mr. Joseph Salazar recently promoted to Chief Management Analyst, Pensions


Division. Mr. Salazar has been instlumental in getting the retired member service payroll converted.

2. The value of the Fund is over the $14 billion mark. The Fund was at $16.7 billion in October of 2007. We are not caught up but we have added $4 billion in market value. For the six-month period July to December 2010, the performance gain has been 15 percent. The Board commended the Investment staff.

3. He has initiated a process to reduce paper by as seen on the travel board reports by inserting his electronic signature. He thanked staff, Ms. Evange Masud, Executive Administrative Assistant and Ms. Barbara Nobregas, Administrative Operations Division for their work.

c. Marketing Cessation Information

C. COMMITTEE REPORTS

1. Benefits Committee

Chair Aliano had no updates to report.

2. Governance Committee

Chair Diannitto stated the Committee met earlier that morning. The issue related to the billing ofthe City Attorney and MOU with LACERS and Department ofWater and Power Retirement Plan will be discussed at a later date. The matter of travel reimbursement from the Fund has been dropped.

3. Audit Committee

Chair Navarro had no updates to report.

4. Ad Hoc Space Planning Committee

Chair Wertman had no updates to report.

D. CONSENT ITEMS

1. Approval of Travel

a. APPROVAL OF TRAVEL AUTHORITY - INTERNATIONAL FOUNDATION OF EMPLOYEE BENEFIT PLANS, 57TH ANNUAL EMPLOYEE BENEFITS CONFERENCE, OCTOBER 28-NOVEMBER 2,2011, NEW ORLEANS, LA


b. APPROVAL OF TRAVEL AUTHORITY - INTERNATIONAL FOUNDATION OF EMPLOYEE BENEFIT PLANS, TRUSTEES AND ADMINISTRATORS INSTITUTES, FEBRUARY 5-9,2011, LAKE BUENA VISTA, FL

2. Approval of Minutes

a. Minutes ofthe Regular Board meeting of October 21, 2010, November 4,2010 b. Minutes of the Governance Committee of September 16,2010 and October 21, 2010 c. Minutes of the Special Meeting ofNovember 4, 2010 and November 18,2010

3. Findings of Fact - Tier 5 - 4

a. Claude Graham b. Teri L. Mika c. Pedro Torres

d. Jeanne D. Urquiza


a. Anthony P. Vilardo


a. Karen L. Klobuchar

Commissioner von Voigt moved that the Board approve the consent items, which was seconded by Commissioner Aliano and approved by the following vote: ayes, Commissioners Aliano, Diannitto, Maull, Moore, NavalTo, Perez, von Voigt, Wertman and President Hansell- 9; nays, none.

E. CONSIDERATION OF FUTURE AGENDA ITEMS

There were no items were referred.

F. PUBLIC COMMENTS

Ms. Elsa Moy made a public comment regarding the monthly report totals.

President Hansell stated he had another commitment and left the board meeting. He passed the gavel to Vice President von Voigt.

Deputy City Attorney James Napier took the City Attorney chair at this time.


G. DISABILITY CASES

DISABILITY CLAIM - NEW - TIER 3 - 1

John 1. Flowers (P) Police Officer III

Service-connected disability pension is granted at 53% with no foreseeable purpose for review. Motion made by Commissioner Navarro, seconded by Commissioner Diannitto and adopted by the following vote: ayes, Commissioners Aliano, Diannitto, Maull, Navarro, Wertman and Vice President von Voigt - 6; nays, Commissioners Moore and Perez - 2. (Original motion to grant a service-connected disability pension at 45% with no foreseeable purpose for review made by Commissioner Moore, seconded by Commissioner Perez, failed by the following vote: ayes, Commissioner Moore, Perez and Wertman - 3; nays, Commissioners Aliano, Diannitto, Maull, Navarro and Vice President von Voigt - 5.) Sergeant Mary Culpepper, Medical Liaison Section, Los Angeles Police Department testified regarding Officer Flowers. Officer Flowers was present and represented by his attomey Thomas J. Wicke.

Meeting adjoumed at 12:44 p.m.

I

President

Secre ary ~

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