Regular Meeting - Tacoma



Regular Meeting

Board of Administration

Tacoma Employes’ Retirement System

1:00 p.m., Thursday, December 11, 2008

Tacoma Public Utilities

Administration Building North

Conference Room 308A (LT1)

3628 S 35th Street

Tacoma, Washington 98409

Minutes

Call to Order

Mayor Baarsma, Chairman of the Retirement Board, called the meeting to order on Thursday, December 11, 2008.

ROLL CALL

Members Present: Mayor Baarsma, Rey Arellano, Bob Biles, Rodney Croston,

Jim Curley, Tim Ross, Ken Turner, Chris Webster and Diane Wetzel

Absent: Dave Peterson

Others Present: Maggie Coleman, Patricia Pabst, and Kathleen Mason

Consultants: Andrew Junkin, Wilshire Consulting

Citizen Comments

NO COMMENTS.

Consent Agenda

Upon motion by Jim Curley, seconded by Rey Arellano, the Retirement Board moved to adopt the Consent Agenda consisting of the drafted minutes for the November 21, 2008 Quarterly Managers’ and Retirement Board meetings, the December 4, 2008 Special Retirement Board meeting amended minutes, the Retirement Transactions; and the Fund Activity Reports, noting no rebalancing was required in accordance with the memorandum Wilshire Consulting dated December 5, 2008.

It was noted that the December 4, 2008 Special Retirement Board meeting amended minutes would be revised to reflect administrative corrections.

Old Business

Retirement Board Meeting Location

By consensus, the Retirement Board indicated that they would like to hold future Retirement Board meetings at the Tacoma Public Utilities administration building.

The Retirement Office will reserve conference room ABN-308A (LT1) for the 2009 Retirement Board meetings.

Regular Meeting

Board of Administration

Tacoma Employes’ Retirement System

1:00 p.m., Thursday, December 11, 2008

Page Two

NEW BUSINESS

PRIVATE EQUITY FUND MANAGEMENT

THE RETIREMENT BOARD INTERVIEWED HAMILTON LANE, HARBOURVEST PARTNERS, LLC, PANTHEON VENTURES INC., AND POMONA CAPITAL FOR PRIVATE EQUITY MANAGERS ON DECEMBER 11, 2008 FROM 8:00 A.M. TO 1:00 P.M.

Based upon the recommendation from Wilshire Associates, a motion by the Chair, Mayor Baarsma, seconded by Chris Webster, the Retirement Board recommended City Council approval for Tacoma Employes’ Retirement System to enter into an agreement with Pantheon Ventures Inc. and HarbourVest Partners, LLC as private equity managers to manage approximately $20,000,000 for an estimated annual management fee of 1% estimated to be $200,000 annually each for the life of the partnerships.

The Retirement Board asked that a one page summary on private equity be prepared for distribution with the City Council resolution.

The Chair, Mayor Baarsma, indicated that he would provide a briefing to the City Council at the study session on January 6, 2009 and that the Retirement Director should attend.

Index Funds Manager

AT THE NOVEMBER 21, 2008 RETIREMENT BOARD MEETING, THE RETIREMENT BOARD MOVED TO RECOMMEND CITY COUNCIL APPROVAL FOR TACOMA EMPLOYES’ RETIREMENT SYSTEM TO ENTER INTO AN AGREEMENT WITH THE NORTHERN TRUST COMPANY AS THE INDEX FUNDS MANAGER.

BASED UPON WILSHIRE’S RECOMMENDATION, A MOTION BY REY ARELLANO, SECONDED BY CHRIS WEBSTER, THE RETIREMENT BOARD RECOMMENDED CITY COUNCIL THAT THE NORTHERN TRUST COMPANY BE HIRED AS INDEX FUNDS MANAGER FOR THE PERIOD OF JANUARY 1, 2009 THROUGH DECEMBER 31, 2011 FOR THE RUSSELL 1000 GROWTH INDEX FUND AT AN ESTIMATED ANNUAL AMOUNT OF $12,500, FOR THE MSCI EAFE INDEX FUND AT AN ESTIMATED ANNUAL AMOUNT OF $58,500 AND THE EMERGING MARKETS INDEX FUND AT AN ESTIMATED ANNUAL AMOUNT OF $52,500 FOR A TOTAL ESTIMATED ANNUAL AMOUNT OF $123,500 AND A THREE-YEAR ESTIMATED TOTAL OF

$370,500.

Transition Fund Manager

AT THE NOVEMBER 21, 2008 RETIREMENT BOARD MEETING, THE RETIREMENT BOARD MOVED TO RECOMMEND CITY COUNCIL APPROVAL FOR TACOMA EMPLOYES’ RETIREMENT SYSTEM TO ENTER INTO AN AGREEMENT WITH A TRANSITION FUND MANAGER. THE BOARD MOVED TO OBTAIN UPDATED BIDS FOR TRANSITION MANAGEMENT SERVICES FROM BLACKROCK, GLOBAL TRANSITIONS, BNY CONVERGEX, AND BGI WITH CURRENT DOLLAR AMOUNTS AND HOLDS.

Regular Meeting

Board of Administration

Tacoma Employes’ Retirement System

1:00 p.m., Thursday, December 11, 2008

Page Three

TRANSITION FUND MANAGER (CONTINUED)

BASED UPON WILSHIRE’S RECOMMENDATION, A MOTION BY CHRIS WEBSTER, SECONDED BY JIM CURLEY, THE RETIREMENT BOARD RECOMMENDED CITY COUNCIL THAT BARCLAYS GLOBAL INVESTORS (BGI) BE HIRED AS TRANSITION FUND MANAGER FOR A TRANSITION EXPECTED TO OCCUR IN JANUARY 2009 FOR AN ESTIMATED AMOUNT OF $155,000 TO TRANSITION FUNDS FROM THE DOW JONES WILSHIRE REIT INDEX AND S&P 400 GROWTH INDEX TO THE MSCI EAFE INDEX, MSCI EMERGING MARKETS INDEX AND RUSSELL 1000 GROWTH INDEX TO IMPLEMENT THE ADOPTED REVISED ASSET ALLOCATION PLAN.

The Retirement Board expressed appreciation to Andrew Junkin, Wilshire Consulting, for all his efforts in assisting the Retirement Board with the request for proposals and asset allocation implementation.

Retirement Directors Report

2007 GFOA Certificate of Achievement for Excellence in Financial Reporting

The Retirement Director congratulated Maggie Coleman, Assistant Retirement Director, for receiving the GFOA Certificate of Achievement for Excellence in Financial Reporting for the Tacoma Employes' Retirement System 2007 Comprehensive Annual Financial Report (CAFR).

Tacoma Employes’ Retirement System has received this award for the last 25 years!

Good of the Order

Retirement Board Elections

The following information on the Retirement Board election was provided.

The City Clerk’s Office will be posting written notice in February 2009 for the expiring three-year Employee Representative position held at this time by Rodney Croston and the expiring three-year Retiree representative position held at this time by Dave Peterson as per the Tacoma Municipal code under section 1.30.470. The new terms of office for the Board positions will be June 4, 2009 through May 31, 2012.

The election timelines are as follows:

|February 10, 2009 |City Clerk posts written notices for annual election of City employee member |

|February 24, 2009 |Last date for filing |

|February 27, 2009 |Last date to withdraw |

|March 10, 2009 |Official nominee list posted |

|March 24, 2009 |Ballots and envelopes distributed or mailed |

|April 14, 2009 |No envelopes postmarked later than midnight or received later than shall be opened by the|

| |City Clerk |

|April 17, 2009 |City Clerk to notify candidates |

Regular Meeting

Board of Administration

Tacoma Employes’ Retirement System

1:00 p.m., Thursday, December 11, 2008

Page Four

GOOD OF THE ORDER

Retirement Board Elections (continued)

Section 1.30.470 of the TMC states: If, after the expiration of the date for filing petitions of nomination, it appears that only one qualified candidate has been nominated for the position to be filled, it shall not be necessary to hold an election, and the Board of Administration shall, at their next meeting, declare such candidate elected as a member of the Board of Administration.

Metropolitan West

The Retirement Director informed the Retirement Board that Metropolitan West had requested on November 26, 2008 an exception to their Investment Guidelines to participate in a debt exchange offered by GMAC which essentially exchanges existing debt for a combination of cash, new debt, and preferred equity. Metropolitan West holds $1,365,000 in GMAC bonds.

Authorization to participate was needed by Monday, December l, 2008. Based upon a recommendation from Wilshire Consulting, the Retirement Director authorized the exception to the guidelines due to the immediate deadline. Normally this request would come before the Retirement Board or Mayor.

By-Laws

The Retirement Director confirmed the discussion of the By-laws would be an agenda item for the January Retirement Board meeting.

Adjourn

Upon motion by Rey Arellano, seconded by Jim Curley, the Retirement Board moved to adjourn.

Patricia F. Pabst Robert K. Biles

RETIREMENT SYSTEM DIRECTOR SECRETARY TO THE RETIREMENT BOARD

KATHLEEN MASON

RECORDING SECRETARY

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