agenda board of fire and police pension...

An opportunity for the public to address the Board or Committee about any item on today’s agenda for which there has been no previous opportunity for public comment will be provided before or during consideration of the item. Members of the public who wish to speak on any item on today’s agenda are requested to complete a speaker card for each item they wish to address, and present the completed card(s) to the commission executive assistant. Speaker cards are available at the commission executive assistant’s desk.

In compliance with Government Code Section 54957.5, non-exempt writings that are distributed to a majority or all of the Board or applicable Committee of the Board in advance of their meetings may be viewed at the office of the Los Angeles Fire and Police Pension System (LAFPP), located at 360 East 2nd Street, 4th Floor, Los Angeles, California 90012, or by clicking on LAFPP’s website at www.lafpp.com, or at the scheduled meeting. Non-exempt writings that are distributed to the Board or Committee at a scheduled meeting may be viewed at that meeting. In addition, if you would like a copy of any record related to an item on the agenda, please contact the commission executive assistant, at (213) 978-4555 or by e-mail at [email protected].

Sign language interpreters, communication access real-time transcription, assistive listening devices, or other auxiliary aids and/or services may be provided upon request. To ensure availability, you are advised to make your request at least 72 hours prior to the meeting you wish to attend. Due to difficulties in securing sign language interpreters, five or more business days notice is strongly recommended. For additional information, please contact the Department of Fire and Police Pensions, (213) 978-4545 voice or (213) 978-4455 TDD.

A. ITEMS FOR BOARD ACTION

1. PER CITY CHARTER SECTION 503(a), ELECTION OF BOARD OFFICERS: OFFICE OF PRESIDENT AND OFFICE OF VICE PRESIDENT

2. INVESTMENT CONSULTANT EVALUATION AND POSSIBLE BOARD ACTION

3. HEADQUARTER FACILITY PROJECT – STATUS REPORT AND POSSIBLE BOARD ACTION

4. APPROVAL TO AMEND CONTRACT WITH NOSSAMAN, LLP FOR INVESTMENT AND REAL ESTATE LEGAL SERVICES AND POSSIBLE BOARD ACTION

AGENDA

BOARD OF FIRE AND POLICE PENSION COMMISSIONERS

JULY 16, 2015 8:35 a.m. or immediately following the Audit Committee

Los Angeles Times Building 202 W. First Street, Suite 500

Los Angeles, CA 90012

Commissioner Diannitto will participate telephonically from 4612 El Reposo Drive, Los Angeles, CA 90065

http://www.lafpp.com/

mailto:[email protected]

5. DISCUSSION OF BOARD-APPROVED PROCEDURES FOR TIER TRANSFER REQUESTS AND POSSIBLE BOARD ACTION

THE BOARD MAY RECESS INTO CLOSED SESSION PURSUANT TOGOVERNMENT CODE SECTION 54956.9(b)(1) TO CONFER WITH LEGALCOUNSEL REGARDING SIGNIFICANT EXPOSURE TO LITIGATION

6. CHIEF INVESTMENT OFFICER’S QUARTERLY REPORT OF ASSET ALLOCATION STATUS AND POSSIBLE BOARD ACTION

7. REAL ESTATE STRATEGIC AND IMPLEMENTATION PLAN RECOMMENDATIONSBY THE TOWNSEND GROUP AND POSSIBLE BOARD ACTION

B. REPORTS TO THE BOARD

1. QUARTERLY PORTFOLIO PERFORMANCE REPORT BY RVK

2. QUARTERLY TRAVEL REPORT FOR COMMISSIONERS AND STAFF

3. Miscellaneous correspondence from money managers, consultants, etc. – Receivedand Filed.

4. General Manager’s Report

a. Monthly Report

b. Marketing Cessation Information

c. Benefits Actions approved by General Manager on July 2, 2015

d. Other business relating to Department operations

C. COMMITTEE CALENDAR

1. Audit Committee – Last met: 04/16/15; next meeting: 07/16/15

2. Benefits Committee – Last met: 04/02/15; next meeting: 08/20/15

3. Governance Committee – Last met: 05/21/15; next meeting: 08/06/15

4. Ad Hoc Emerging Investment Managers – Last met: 11/06/14; next meeting: TBD

D. CONSENT ITEMS

1. Approval of Minutes

a. Minutes of the Regular Board meeting of March 5, 2015 and March 19, 2015

July 16, 2015 2

b. Minutes of the Special Board Meeting of February 19, 2015, March 5, 2015, and March 19, 2015

E. CONSIDERATION OF FUTURE AGENDA ITEMS

F. GENERAL PUBLIC COMMENT ON MATTERS WITHIN THE BOARD’S JURISDICTION

G. DISABILITY CASES

Alternative 1

Police Officer II+2 Michael J. Almasy. Officer Almasy will be represented by Thomas J. Wicke, Esq. of Lewis, Marenstein, Wicke, Sherwin and Lee.

H. CLOSED SESSION ITEMS FOR POSSIBLE BOARD ACTION

1. CLOSED SESSION PURSUANT TO GOVERNMENT CODE SECTION 54956.8 TOCONFER WITH REAL PROPERTY NEGOTIATOR; Properties: 315 S. Hewitt Streetand 713 E. 3rd Street; Negotiators: David Weiner, Martin Cawley, Ray Ciranna,Negotiating parties: Sentinel Real Estate Corporation and LAFPP; Under negotiation:Instruction to negotiator will concern price

July 16, 2015 3

DEPARTMENT OF FIRE AND POLICE PENSIONS 360 East Second Street, Suite 400

Los Angeles, CA 90012 (213) 978-4545

REPORT TO THE BOARD OF FIRE AND POLICE PENSION COMMISSIONERS

DATE: JULY 16, 2015 ITEM: A.1

FROM: RAYMOND P. CIRANNA, GENERAL MANAGER

SUBJECT: PER CITY CHARTER SECTION 503(a), ELECTION OF BOARD OFFICERS: OFFICE OF PRESIDENT AND OFFICE OF VICE PRESIDENT

RECOMMENDATION

That the Board elect an elected commissioner to fill the office of the President and an appointed commissioner as Vice President of the Board.

DISCUSSION

In compliance with the City Charter, an election should be conducted to elect officers of the Board as defined in Section 503, Article V.

Sec. 503. Organization of the Board.

(a) Officers. Each of the boards created in the Charter shall elect one of its members President and one Vice-President. Officers shall hold office for one year and until their successors are elected, unless their membership on the board expires sooner. Elections shall be held during its last meeting in July of each year, but the board may fill the unexpired term of any vacancy occurring in the office of President or Vice-President at any meeting.

Additionally, Sections 7.1 and 8.1 of the Board Governance Policies state that the members of the Board of Fire and Police Pension Commissioners shall not serve more than one term consecutively as President and Vice President, and that the positions of the President and Vice President shall be rotated each year between appointed and elected commissioners. For the Fiscal Year 2015-16 the Board President should be an elected commissioner and Vice President should be an appointed commissioner to ensure that the Board Officers are equally represented.

It should also be noted that the practice of the Board for the past several years has been that the Vice President is nominated to the office of President.

BUDGET

There is no impact to the budget.

Board Report Page 2 July 16, 2015

POLICY

There is no policy change associated with this report.

This report was prepared by:

Barbara H. Nobregas Commission Executive Assistant

RPC:WSR:BHN


Los Angeles, CA 90012 (213) 978-4545




SUBJECT: INVESTMENT CONSULTANT EVALUATION AND POSSIBLE BOARD ACTION

RECOMMENDATION

That the Board:

1. Amend the current Board Governance Policy, Section 20.0, Investment ConsultantEvaluation Policy, and survey instrument to adjust the rating scale: and,

2. Direct the General Manager to distribute the new survey instrument to the Board andrequest that the Board return the survey to the General Manager by August 6, 2015.

BACKGROUND

The Board approved an Investment Consultant Evaluation Policy (Policy) at the meeting of November 1, 2012. The Staff report from that meeting is provided (Attachment I). The Policy is now incorporated as Section 20.0 of the Board Governance Policy (Attachment II). The Policy’s purpose is to provide a structured process by which Board members can discuss – among themselves and with the Investment Consultant – their satisfaction with the services being received from the Investment Consultant. As part of the process each Board member, General Manager, Chief Investment Officer and all Investment Officers II and III are expected to complete the Investment Consultant Evaluation Form. The policy also stipulates that the evaluation will be conducted approximately 18 months after the initial start date of the contract and again approximately six months prior to the expiration of the contract.

DISCUSSION

RVK was hired as the Board’s Investment Consultant effective March 1, 2010. Its contract was renewed in 2013; the current contract will expire February 29, 2016. Pursuant to the Policy, staff is initiating the evaluation process for the Board and selected staff to evaluate RVK.

Per the Policy, the General Manger is responsible for distributing the survey instrument to the Board and selected investment staff. To be consistent with recently modified evaluation surveys for the General Manager and the City Attorney, staff is recommending the Investment Consultant Evaluation Form be revised from a 4-score rating scale to a 5-score rating scale (Attachment III). No other changes were made to the Evaluation Form. The Evaluation Form will be distributed


electronically to the Board and others via Survey Monkey. A hard copy will also be available upon request. The completed evaluations will be compiled by the General Manager or designee and will be presented to the Board for review and discussion in September 2015. This report was prepared by: Rick Rogers Investment Officer RPC:TL:RR Attachment I – Board Report dated November 1, 2012 – Investment Consultant Evaluation Policy Attachment II – Governance Policy Section 20.0 – Investment Consultant Evaluation Policy Attachment III – Investment Consultant Evaluation Form


Los Angeles, CA 90012 (213) 978-4545


November 1, 2012 ITEM: A.1

FROM: William S. Raggio, Interim General Manager

SUBJECT: INVESTMENT CONSULTANT EVALUATION POLICY AND POSSIBLE BOARD ACTION

RECOMMENDATION

That the Board approve adoption of the proposed Investment Consultant Evaluation Policy.

BACKGROUND

The Board hired its first General Investment Consultant on October 1, 2006. In October 2007 the Board received the results of the Pension System Management Audit that had been conducted for the Mayor, the Council and the Controller by Independent Fiduciary Services, Inc. (IFS) in accordance with City Charter Section 1112. One of the IFS audit recommendations suggested that the Board implement a formal process for periodically reviewing and evaluating the performance of the Investment Consultant.

On May 7, 2009 Staff presented a report to the Board asking for direction on a General Consultant search, as the incumbent Consultant’s contract was expiring on September 30, 2009. In the same report Staff presented a proposed Consultant Evaluation Form, in response to the IFS audit recommendation. The report was referred to the Governance Committee, which at that time was next scheduled to meet June 18, 2009. The Governance Committee meeting was later rescheduled to July 9, 2009. Staff returned to the Board on June 18, 2009 requesting that it be authorized to begin a General Consultant search, to prevent further delay in the search process, while the Board continued to develop a formal process for evaluating the Consultant. The Board approved the search.

The Governance Committee met July 9, 2009, reviewed the proposed Consultant Evaluation Form and recommend changes to the Form. The Governance Committee reported to the Board on September 3, 2009 recommending that the Board adopt the Evaluation Form, use the Form to evaluate the incumbent Consultant and return the completed forms to the General Manager by September 17, 2009. The Board directed a change to the proposed Evaluation Form, and approved Staff’s recommendations. However, only two Commissioners filled out and returned the Form. The evaluation of the Consultant was not completed at that time and a formal policy was not adopted.

Attachment I, Page 1

Board Report Page 2 November 1, 2012

The General Consultant search continued with presentations to the Board by five firms (including the incumbent) on December 9, 2009. The Board heard presentations by two finalist firms at the February 4, 2010 meeting and selected RV Kuhns as the new General Consultant. DISCUSSION Staff is today presenting an Investment Consultant Evaluation Policy (Attachment I) for the Board’s consideration. The proposed policy is similar to the City Attorney Evaluation Policy (Board Governance Policies Section 17.0), and if approved would become Section 20.0 of the Governance Policies. The Investment Consultant Evaluation Form (Attachment II), previously approved by the Board, provides the instrument with which to conduct a Consultant Evaluation and is incorporated as part of the Policy. The Board sees the Investment Consultant at meetings throughout the year, and has frequent opportunity to informally evaluate the Consultant’s performance, as well as to request changes in the Consultant’s approach or work product. The proposed Policy would provide a formal, structured process to address the Board’s satisfaction with the Consultant’s performance on a periodic basis throughout the term of the contract. The periodic reviews would then contribute to the Board’s evaluation of the Consultant’s performance at the end of the three-year contract cycle. The Board may believe that as the Investment Consultant is on a three-year contract, and thus receives a thorough performance review no less than every three years, an Evaluation Policy for the Investment Consultant is not necessary. Staff would suggest that such a Policy is useful and could serve to further enhance communications, understanding and expectations between the Consultant and the Board.

BUDGET

This item has no budgetary impact. This report was prepared by: Rick Rogers Investment Officer Attachments (2) WSR:TL:RR


Los Angeles Fire & Police Pension System

20.0 – INVESTMENT CONSULTANT EVALUATION POLICY

INTRODUCTION 20.1 The purpose of the Investment Consultant Evaluation Policy is to enhance the value

of investment consulting services received by the Board and the Department, through a process of periodic evaluations of the Investment Consultant’s performance, coupled with feedback to the consultant.provide a formal process by which the Pension Board can regularly review the performance of its Investment Consultant.

This Policy does not confer any rights to any consultant or prospective consultant. The Board has established the Evaluation Policy to ensure that the Investment Consultant receives useful and objective performance feedback from the Board on a periodic basis. ROLES AND RESPONSIBILITIES 20.2 Periodic evaluation of the performance of the Investment Consultant is a primary responsibility of the Board, General Manager, CIO and the Senior Investment Staff and therefore should include the participation of all. EVALUATION CRITERIA 20.3 The Board will ensure that the criteria used to evaluate the Investment Consultant: A. Are defined and clearly communicated to the Consultant in advance; BA. Are objective in nature and, to the extent possible, measurable; and CB. Pertain only to outcomes over which the Investment Consultant has a reasonable degree of control. 20.4 At a minimum, evaluation criteria will include Board satisfaction with the Consultant’s ability to: A. Accurately analyze investment issues; B. Provide clear, relevant recommendations concerning policies and guidelines; C. Identify issues of strategic importance and bring them to the Board’s attention; D. Provide impartial advice pertaining to the Board’s investment advisors; E. Produce high quality, comprehensive and clear reports to the Board; F. Provide reports that are accurate, effort free and delivered on time; G. Attend Board meetings regularly. EVALUATION PROCESS

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ATTACHMENT I

20.5 The Investment Consultant will be evaluated twice during the three-year contract period. An evaluation will be conducted approximately 18 months after the initial start date of the contract and again approximately six months prior to the expiration of the contract. The General Manager will distribute an Evaluation Package to each member of the Board, the General Manager, the CIO and Investment Officers II and III. The Evaluation Package will include: A. A copy of this Policy; B. An evaluation form; and C. Any supporting information that the Investment Consultant believes may assist in the completion of the Evaluation. 20.6 Completed evaluation forms will be returned to the General Manager, or designee, within a predetermined time period. The General Manager or designee will insure that all evaluation forms are tabulated and summarized. 20.7 The evaluation results will be presented to the Board for review, discussion and possible action. The Investment Consultant will be present at the meeting and may participate in the discussion. HISTORY 20.8 Adopted: November 1, 2012 REVIEW 20.9 This Policy will be reviewed and amended by the Board as needed.


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ATTACHMENT I

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Attachment II

Investment Consultant Evaluation Policy

INVESTMENT CONSULTANT EVALUATION Unacceptable

1

Needs Improvement

2

Meets Expectations

3

Exceeds Expectations

4

Observations/Comments

Strategic Analysis and Recommendations

1. Demonstrates the ability to accurately analyze issues. 1 2 3 4

2. Makes clear, relevant recommendations concerning policies and guidelines. 1 2 3 4

3. Identifies issues of strategic importance and brings them to the Board’s attention. 1 2 3 4

4. Provides impartial advice pertaining to the Board’s investment advisors. 1 2 3 4

Reporting and Attendance

5. Demonstrates the ability to produce high quality, comprehensive and clear reports to the Board.

1 2 3 4

6. Reports are accurate, error free and delivered on time. 1 2 3 4

7. Regularly attends Board meetings. 1 2 3 4

Overall Performance

8. The Consultant is providing value to the Fund.

1 2 3 4

Completed by: __________________________ on (date) ______________________


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Los Angeles Fire & Police Pension System

20.0 – INVESTMENT CONSULTANT EVALUATION POLICY

INTRODUCTION

20.1 The purpose of the Investment Consultant Evaluation Policy is to enhance the value of investment consulting services received by the Board and the Department, through a process of periodic evaluations of the Investment Consultant’s performance, coupled with feedback to the consultant.

This Policy does not confer any rights to any consultant or prospective consultant.

ROLES AND RESPONSIBILITIES

20.2 Periodic evaluation of the performance of the Investment Consultant is a primary responsibility of the Board, General Manager, CIO and the Senior Investment Staff and therefore should include the participation of all.

EVALUATION CRITERIA

20.3 The Board will ensure that the criteria used to evaluate the Investment Consultant:

A. Are objective in nature and, to the extent possible, measurable; and B. Pertain only to outcomes over which the Investment Consultant has a

reasonable degree of control.

20.4 At a minimum, evaluation criteria will include Board satisfaction with the Consultant’s ability to:

A. Accurately analyze investment issues; B. Provide clear, relevant recommendations concerning policies and guidelines; C. Identify issues of strategic importance and bring them to the Board’s

attention; D. Provide impartial advice pertaining to the Board’s investment advisors; E. Produce high quality, comprehensive and clear reports to the Board; F. Provide reports that are accurate, error free and delivered on time; G. Attend Board meetings regularly.

EVALUATION PROCESS

20.5 The Investment Consultant will be evaluated twice during the three-year contract period. An evaluation will be conducted approximately 18 months after the initial start date of the contract and again approximately six months prior to the expiration of the contract. The General Manager will distribute an Evaluation

Attachment II, Page 1

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Package to each member of the Board, the General Manager, the CIO and Investment Officers II and III. The Evaluation Package will include:

A. A copy of this Policy; B. An evaluation form; and C. Any supporting information that the Investment Consultant believes may

assist in the completion of the Evaluation. 20.6 Completed evaluation forms will be returned to the General Manager, or

designee, within a predetermined time period. The General Manager or designee will insure that all evaluation forms are tabulated and summarized.

20.7 The evaluation results will be presented to the Board for review, discussion and

possible action. The Investment Consultant will be present at the meeting and may participate in the discussion.

HISTORY 20.8 Adopted: November 1, 2012 REVIEW 20.9 This Policy will be reviewed and amended by the Board as needed.



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1

Needs Improvement

2

Meets Expectations

3


4

Observations/Comments


1. Demonstrates the ability to accurately analyze issues. 1 2 3 4

2. Makes clear, relevant recommendations concerning policies and guidelines. 1 2 3 4

3. Identifies issues of strategic importance and brings them to the Board’s attention. 1 2 3 4

4. Provides impartial advice pertaining to the Board’s investment advisors. 1 2 3 4


5. Demonstrates the ability to produce high quality, comprehensive and clear reports to the Board.

1 2 3 4

6. Reports are accurate, error free and delivered on time. 1 2 3 4

7. Regularly attends Board meetings. 1 2 3 4

Overall Performance

8. The Consultant is providing value to the Fund.

1 2 3 4



Attachment III

Investment Consultant Evaluation Form


1

Needs Improvement

2

Meets Expectations

3


4

Outstanding

5 Observations/Comments


1. Demonstrates the ability to accurately analyzeissues. 1 2 3 4 5

2. Makes clear, relevant recommendationsconcerning policies and guidelines. 1 2 3 4 5

3. Identifies issues of strategic importance andbrings them to the Board’s attention. 1 2 3 4 5

4. Provides impartial advice pertaining to theBoard’s investment advisors. 1 2 3 4 5


5. Demonstrates the ability to produce highquality, comprehensive and clear reports tothe Board.

1 2 3 4 5

6. Reports are accurate, error free and deliveredon time. 1 2 3 4 5

7. Regularly attends Board meetings. 1 2 3 4 5

Overall Performance

8. The Consultant is providing value to the Fund. 1 2 3 4 5


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Los Angeles, CA 90012 (213) 978-4545




SUBJECT: HEADQUARTER FACILITY PROJECT – STATUS REPORT AND POSSIBLE BOARD ACTION

RECOMMENDATION

That the Board:

1) Approve the revised Headquarter Facility Project budget of $21,479,901 (excluding additionalparking needs) as reflected in Attachment I;

2) Appropriate a total of $1,272,000 to the Departmental budgetary accounts as reflected inAttachment II;

3) Authorize the President of the Board, on behalf of the Board, to join Purchase Agreement No.4400003402 with Haworth, Inc., under the U.S. Communities Government Purchasing AllianceContract, for an amount not to exceed $1,000,000, for one-year, with two one-year extensions,subject to approval of the City Attorney as to form; and,

4) Authorize staff to move funding between line items as needed.

BACKGROUND

In December 2012, the Board authorized Sentinel Real Estate Corporation (one of the Board’s two separate account real estate managers) to enter into a contract to purchase the headquarter facility building (aka “The Neptune Building”). The Board subsequently approved the purchase to be finalized for $12.8 million in April 2013. The acquisition closed escrow on July 24, 2013 at a final purchase price of $12,730,000. The purchase concluded a search for a headquarter building that spanned several years.

The Neptune Building is a 54,000 square foot four-story office building, constructed in 1924, located at 701 East 3rd Street (on the Northeast corner of East 3rd Street and Alameda Street). The building purchase included a non-adjacent parking lot with 20 spaces that is located on East 3rd Street, approximately 60 feet east of the building. Staff will occupy floors 2 - 4 and will continue leasing the 1st floor to generate a future revenue stream. Such 1st floor space could also be made available to accommodate any future LAFPP office needs.

On July 17, 2014, the Board authorized a total project budget of $19,179,086 and also authorized an additional $352,000 for Technology Upgrades that had been planned, but were deferred by


management to coincide with the relocation. Attachment I includes the details of the cost categories as they were approved by the Board in July 2014. These costs categories are also summarized below for your reference.

Cost Category Approved Amount Building Purchase $ 12,800,000 Base Building Capital Requirements $ 1,500,000 Tenant Improvements (Floors 2 – 4) $ 4,879,086 INITIAL PROJECT TOTAL – APPROVED BY BOARD IN JULY 2014 $ 19,179,086 Technology Upgrades $ 352,000

The Base Building Requirements included those items identified in the due diligence process as being necessary for the long term viability of the property and included such items as a new roof, elevator upgrades, HVAC upgrades and other items detailed in Section A of Attachment I.

When the Board approved the total project budget in July 2014, the construction costs were estimated since the project scope had not been completed and bids had not been received by contractors. Based on this, the Board directed staff to report back when final bids were received. This report provides the requested update to the Board and is seeking budgetary approval to proceed with the project.

The lack of parking was a known limitation at the time the building was purchased. In order to secure additional parking, the Board discussed the issue in Closed Session and authorized additional funding for this purpose. Although staff has not found a suitable additional parking facility to purchase, staff has arranged to lease space in the surrounding area that will meet our needs. Additional discussion on this item is scheduled today as a Closed Session item.

Finally, in October 2013, the Board dedicated the future Board Room at the headquarters building to Commissioner Sam Diannitto in recognition of over 58 years of service to the residents of Los Angeles and to the System; having served on the Fire Department for 43 years, and serving on the Board for a total of 40 years: 25 years as the active Fire Department representative and 15 years as the retired Fire Department representative.

DISCUSSION

Construction - Schedule

Since the Board last approved the funding and project scope in July 2014, staff has provided project updates in the Quarterly Strategic Plan Update reports. Through these Quarterly reports, staff has kept the Board apprised of the delays with the project. Most notably, staff has reported that the project has been delayed significantly due to the initial seismic reinforcement engineering design. The initial design would have had a significant cost impact as well as significantly impacting the business operations of the existing tenants on the ground floor. To mitigate the impact, a peer review was conducted and a new engineering firm was engaged to design a less costly and invasive approach to seismic reinforcement construction. The revised design has been completed and plan check was approved in May 2015. Subsequently, seismic reinforcement construction started on the upper floors in June 2015.


Despite the revised seismic plan, one of the existing tenants indicated that this work would be too disruptive to their daily operations. As such, they elected to relocate and on June 25, 2015, staff approved an incentive package for the tenant relocation and released them from their existing lease, which was set to expire in October 2016. With the space scheduled to be vacated, the new floor plan will relocate the restrooms and the elevator equipment room to allow the space to eventually be divided and possibly leased to two tenants in the future, to maximize future revenue streams.

Currently, all construction is scheduled to be completed in mid-December and relocation should occur in late December 2015 or early January 2016. Staff will keep the Board apprised on the status of the project as construction progresses.

Construction – Scope of Work

While the scope of work in some areas are based on Mayoral Directive (LEED Silver Certification), building code requirements (Title 24 energy efficiency) and a responsibility to strengthen the building (Seismic reinforcement), others are based on the Board and staff’s desire to have a headquarters facility that will meet our needs for the foreseeable future (Ergonomic furniture, Board Room Audio Visual, etc.). The notable scope of work items include:

• Leadership in Energy and Environmental Design (LEED) Silver Certification – The buildingwill meet the U.S. Green Building Council’s LEED Silver Certification requirements pursuantto Mayor Garcetti’s Sustainable City pLAn. This will help reduce operating costs in the futureand benefit the environment.

• New Ergonomic Furniture – New furniture is being purchased for the entire building, with theexception of office furniture for Executive staff and some conference rooms. This will replaceexisting workstations that are greater than 25 years old, and will provide staff with ergonomic,sit/stand work stations to help promote a healthy work environment.

• Roof deck assembly area – The elevators extend to the roof of the building, so a desire wasexpressed by the Board from the beginning of the project to utilize the roof area. As such, thecurrent design includes a roof deck assembly area. This will be used primarily by staff duringbreaks and during their lunch hour, but will also be used for occasional department-widefunctions.

• Building Security – Building Security has been a concern in the existing building for severalyears, and was noted as a risk in the Management Audits. As such, measures are beingtaken to ensure the building is secure, with key card access being used in all staff areas,similar to other City buildings. Staff is also researching the necessity of having a securityguard desk in the ground floor lobby.

• Board Room Audio Visual – The new Board Room will include upgraded technology that willoffer the Board, staff and the public several benefits. The benefits include: larger monitors toallow for better viewing angles of presentations, ability to stream audio/video of Boardmeetings to departmental staff, ability to archive Board meetings for on-demand viewing bystaff and the public, improved audio system and speakers, and improved conference callfunctionality.


Construction – Budget

As noted above, at the time the Board approved the project budget in July 2014, the project scope was being refined and construction bids had not been received. Since then, the scope has been finalized and bids have been received.

As reported on July 2, 2015 in the 2014-15 Business Plan Close-Out Report, the capital budget for the seismic reinforcement and tenant improvements has increased from $6.4 million to $8.7 million (Attachment I). The increases are primarily due to the general increase in construction costs over the past year and refined scope of work in some areas. The cost increases by major cost categories is reflected below:

Cost Category Board

Approved Adjustments Revised Amount

Base Building Capital Requirements $ 1,500,000 $ 587,327 $ 2,087,327 Tenant Improvements (Occupancy Refit) (Floors 2 – 4) $ 4,879,086 $ 1,713,488 $6,592,574 CAPITAL BUDGET TOTAL $ 6,379,086 $ 2,300,815 $ 8,679,901

The construction areas with the largest cost increases includes the following:

Major Cost Increases (Amounts Rounded) Seismic upgrades $ 769,600 Mandated Title 24 (energy efficiency standards) requirements $ 270,000 Roof deck assembly area $ 328,500 Building Entrance (Storefront) and Lobby Enhancements $ 150,000 Building Security $ 95,000 Board Room Audio Visual $ 100,000 Second Floor Air - Conditioning Upgrades $ 200,000 Misc. Line Items/Cost Increases $ 387,800 TOTAL OVER-BUDGET $2,300,900

While staff and our construction manager, CM Partners Group, will continue to scrub construction costs to find savings, staff is requesting the Board to approve the cost increases, which will allow staff to authorize the construction crews to begin construction on the tenant improvements. Also, with the Board approval today, staff and the project team will begin finalizing plans to relocate staff by early January 2016.

Additional Moving Costs and Transfers to Budgetary Accounts

In addition to the capital and technology upgrades previously approved by the Board, staff is anticipating $70,000 for staff overtime, printing services (i.e., new business cards, DROP literature, etc.), and moving costs. These amounts were identified during the development of the 2015-16 Budget, but rather than including these costs at that time, we indicated we would provide a comprehensive headquarters report and budget at a later date. As such, staff will identify savings within existing accounts to fund these costs.


While some costs will be covered within existing funds, some funding must be programmed to the Departmental budgetary accounts in order for the Controller’s Office to approve the expenditure of funds (Attachment II). This is due to the fact that these items will be procured through a City contract (i.e., furniture, IT equipment, moving costs) and must be programmed properly for us to pay the bills.

Attachment II also reflects if the funds were previously approved by the Board and whether they were approved through the capital budget or through the Technology Upgrade budget.

U.S. Communities Government Purchasing Alliance Contract

Staff is requesting the Board to authorize the Board President, on behalf of the Board, to join the U.S. Communities Government Purchasing Alliance Contract (U.S. Communities), Purchase Agreement No. 4400003402 with Haworth, Inc. to purchase office furniture and ancillary services for a cost not to exceed $1,000,000 for a period of July 1, 2015 through June 30, 2018. While the City has an existing contract with Haworth through U.S. Communities, establishing a direct relationship with Haworth, Inc. through U.S. Communities would ensure that staff has efficient access to the whole range of services available through the agreement, which would help facilitate our access to various services during the relocation process and subsequent “settling in” period after the move. This direct relationship is consistent with the contractual relationship established by other proprietary departments within the City.

BUDGET

As recommended, staff is requesting an additional $2,300,815 in capital expenditure needs for the headquarters project. If approved, the revised capital budget for the project would total $21,479,901. Staff will include annual operating expenses and capital budget amounts for the building in subsequent fiscal year Budget requests.

POLICY

As recommended, there are no policy changes.


William S. Raggio, Executive Officer Administrative Operations Division

RPC:WSR

Attachment I – Revised Headquarter Building Budget – Requested July 2015 Attachment II – Transfers to Departmental Budgetary Accounts


Los Angeles, CA 90012 (213) 978-4545




SUBJECT: APPROVAL TO AMEND CONTRACT WITH NOSSAMAN, LLP FOR INVESTMENT AND REAL ESTATE LEGAL SERVICES AND POSSIBLE BOARD ACTION

RECOMMENDATION

That the Board:

1. Authorize the General Manager to amend Contract No. 123047 with Nossaman, LLP(Nossaman) to decrease the annual expenditure limit by $50,000 to $135,000 for Year 1(June 16, 2013 to June 15, 2014), and to increase the annual expenditure limit by $100,000to $285,000 for Year 3 of the contract (June 16, 2015 to June 15, 2016).

2. Increase the total contract amount by $50,000 for a new total amount of $605,000.

3. Authorize the President of the Board, on behalf of the Board, to execute and approvethe necessary contract amendment, subject to City Attorney approval as to form.

BACKGROUND

At the June 4, 2015 meeting, the Board raised some questions regarding staff’s recommendation (Attachment I) to amend the contract with Nossaman, LLP for real estate and investment counsel services. Specifically, the Board requested additional information regarding Nossaman hourly rates including any discounts, the process to utilize and monitor the contract and review invoices, the type of matters assigned to Nossaman, and the actual services provided under this contract.

All of outside counsel contracts are negotiated and held by the City Attorney’s Office and are utilized by each of the City’s pension systems, including Los Angeles Fire and Police Pension (LAFPP), with the respective Board’s approval. The contacts are all non-exclusive, as-needed service contracts with not-to-exceed amounts negotiated by the City Attorney’s Office – Retirement Benefit Division (RBD). At RBD’s discretion, and with the concurrence of LAFPP, the City Attorney may augment their legal services with other outside counsel or select to terminate outside counsel services. Nossaman’s hourly rates are within acceptable ranges consistent with other outside counsel contracts held by LAFPP and the City Attorney’s Office. The Nossaman contract also includes a ‘Most Favored Nations’ clause confirming that their rates are at least as favorable to LAFPP as those provided to any other comparable public pension fund investment counsel clients.


To utilize the Nossaman contract, the City Attorney’s Office and LAFPP work together to determine how a particular legal matter will be addressed. If both offices agree that outside counsel services are required, the City Attorney’s Office – RBD solicits an estimate of fees from Nossaman per contract requirements. Work commences after the estimate is reviewed and approved by the City Attorney’s Office – RBD and LAFPP. On a monthly basis, Nossaman submits detailed itemized invoices for all services rendered per matter. Prior to processing payment, Nossaman invoices are reviewed and analyzed by the City Attorney’s outside counsel managing office and RBD. Once the City Attorney’s Office approves the invoices, they are forwarded to LAFPP senior staff for review, and the LAFPP Accounting Section to verify services and ensure conformance with contract terms and conditions.

DISCUSSION

The City Attorney’s Office - RBD has advised LAFPP to utilize the services of Nossaman instead of Portfolio Advisors’ (Private Equity Consultant) legal counsel where feasible and for the specialized private equity program, which has resulted in increased activity and legal expenses from Nossaman. It should be noted that discounts have been realized more recently after the Los Angeles Employees’ Retirement System (LACERS) hired LAFPP’s private equity consultant (Portfolio Advisors) and real estate consultant (The Townsend Group) because any Nossaman legal expenses for shared investments can now be split amongst the two Systems.

A listing of Nossaman real estate and investment legal fees since contract inception is attached along with a description of actual services provided per matter (Attachment II). Since June 2013, out of the $347,526 expended to date, $29,394 is for general matters, $206,273 is for real estate matters, and $111,859 is for private equity matters. Staff performed a sampling of the five most expensive Nossaman matters and 75% of the hours were performed by partners, 19% by associates and 6% by paralegals. A substantial portion of the Nossaman legal expenses (about $100,000) was due to two large real estate projects: 1) The Neptune Building acquisition, LAFPP’s new headquarters facility ($28,000) which included tenants vacating the building and conversion of property ownership to a public entity; and 2) The Sea Isle Apartments ($73,000), a newly constructed $58 million apartment complex in Orlando, Florida consisting of 356 units and 100% owned by LAFPP.

For Year 1 of the contract (June, 2013 – 2014), LAFPP payments to Nossaman totaled about $123,000, $62,000 less than the annual contract ceiling amount of $185,000. Due to a recent increase in real estate and private equity activity which is expected to continue into Year 3 (June, 2015 – 2016), staff is requesting that the annual contract ceiling for Year 3 be increased by $100,000 for a new Year 3 total amount of $285,000. The additional $100,000 for Year 3 will cover about $40,000 in expenses from Year 2, to be paid in Year 3. However, staff is only requesting a net contract increase of $50,000 due to savings incurred in Year 1 of the contract.

In general, expenses for all LAFPP outside counsel contracts normally fall below not-to-exceed contract amounts. For example, for the previous investment counsel Nossaman contract (Contract No. 117635, August 29, 2009 to August 28, 2012), the total not-to-exceed amount was $300,000 and was extended to June 30, 2013 for an additional $135,000. The total amount expended for this contract was $181,553 out of $435,000.


BUDGET

Funding is available in Fiscal Year 2015-16 Account 3040 Contractual Services for this purpose.

POLICY

No policy changes are being recommended.


Cecilia de los Angeles, Principal Accountant I Accounting Section

RPC:WSR:SHC:YH:CD

Attachment I – June 4, 2015 Board Report, Item B Attachment II – Listing of Nossaman Expenses to Date (Contract 123047)


Los Angeles, CA 90012 (213) 978-4545


DATE: JUNE 4, 2015 ITEM: B.2


SUBJECT: APPROVAL TO AMEND CONTRACT WITH NOSSAMAN, LLP FOR INVESTMENT AND REAL ESTATE LEGAL SERVICES AND POSSIBLE BOARD ACTION

RECOMMENDATION

That the Board:

1. Authorize the General Manager to amend Contract No. 123047 with Nossaman, LLP(Nossaman) to increase the annual expenditure limit to $235,000 for Years Two (June 16,2014 to June 15, 2015) and Three (June 16, 2015 to June 15, 2016), and increase the totalcontract amount by $50,000 for a new total of $605,000; and,

2. Authorize the President of the Board, on behalf of the Board, to execute and approve thenecessary contract amendment, subject to City Attorney approval as to form.

DISCUSSION

Pursuant to City Charter Section 275, the City Attorney’s Office has utilized specialized outside counsel for many years to assist in providing expert legal advice to the Los Angeles Fire and Police Pensions (LAFPP). Expenditures for these legal services are considered an appropriate and prudent cost of administering LAFPP and are critically needed in order for the City Attorney’s Office to provide legal counsel to the Plan, and to assist staff and Board to fulfill their fiduciary obligations. Per the City Attorney’s Office, nearly all retirement plans use outside lawyers for specialized legal expertise.

On July 18, 2013, the Board approved a three-year contract with Nossaman for outside investment and real estate counsel and authorized an annual expenditure of up to $185,000 for a total contract amount of $555,000 (Contract No. 123047). The term of the contract commenced on June 16, 2013 and continues through June 15, 2016. Per Contract Section V) Compensation, outside counsel’s work pursuant to this Agreement shall not exceed an amount of $185,000 per year without the prior written approval of the City Attorney and the Board.

In Year One (June 16, 2013 through June 15, 2014) of the contract, LAFPP expended approximately $122,000 out of the $185,000 annual contract expense limit. In Year Two (June 16, 2014 to present), Nossaman legal expenses have reached almost $185,000 as of January 2015 due to the substantial amount of investment matters referred to Nossaman, including the


Board Report Page 2 June 4, 2015

purchases of several real estate investments and transactions relating to the Department headquarters. (Invoices after January 2015 have not yet been received by LAFPP for processing.)

Staff recommends that the contract with Nossaman be amended to increase the annual contract ceiling for Years Two and Three by $50,000 for a new annual contract expense amount of $235,000. Amending the contract will help mitigate the risk of exceeding the yearly cap and the need to frequently request City Attorney and Board approval. Staff also recommends increasing the total contract ceiling limit by $50,000 for a new total of $605,000.

It should be noted that it is not necessary to increase the total contract amount by $100,000 ($50,000 for each year) because there is sufficient contractual funding capacity remaining from Year One, when expenses were below the annual expense limit.

BUDGET

Funding is available in Fiscal Years 2014-15 and 2015-16 Account 3040 Contractual Services for this purpose.

POLICY

No policy changes are being recommended.


Cecilia de los Angeles, Principal Accountant I Accounting Section Administrative Operations Division

RPC:WSR:SHC:YH:CD



Los Angeles, CA 90012 (213) 978-4545




SUBJECT: DISCUSSION OF BOARD-APPROVED PROCEDURES FOR TIER TRANSFER REQUESTS AND POSSIBLE BOARD ACTION

RECOMMENDATION

That the Board uphold the current procedures for processing late tier transfer requests.

BACKGROUND

Pursuant to City Charter §1222, the City Council established a new pension Tier 5 in 2001 as codified in the Los Angeles Administrative Code at §4.2000 et.seq, for members hired on or after January 1, 2002. Tier 5 offers members a higher retirement benefit of 90% of the member’s final average salary but requires a member to accumulate 20 years of service credit and attain age 50 in order to qualify for a service pension.

Administrative Code §4.2000(c)(1) afforded members of Tiers 2, 3, and 4 the opportunity to transfer to Tier 5 during a specified election period of January 2, 2002 through December 31, 2002. The applicable statutory authority provided existing LAFPP members an election to transfer to the new tier during the specified one-year period, it did not provide members with a right to appeal nor vest the Board with the authority to accept late applications. Following the close of Tier 5 transfer period, the Department has from time to time received requests from members to transfer to Tier 5 for a variety of reasons. On October 4, 2012, the Board adopted Resolution 13041, which outlines the procedure for processing “late” tier transfer requests (i.e., a request submitted after the official December 31, 2002 transfer deadline had passed).

DISCUSSION

On June 18, 2015, the Board requested a review of the procedures previously adopted at the Board meeting of October 4, 2012, concerning the processing of late tier transfer requests (Attachment 1). Prior to the adoption of the procedures, seven requests to transfer to Tier 5 were presented to the Board and all were approved (Attachment 2). In accordance with the tier transfer procedures adopted in 2012, staff has since approved ten (10) transfer requests and has denied four (4). The majority of the approved requests were from members who were on extensive military leave during the Tier 5 election period. Due to payroll system coding issues during 2001 and 2002, these members were not provided an additional 90-day transfer election period upon their return from military duty, as provided by Los Angeles Administrative Code Section 4.2000(c)(2). As of this writing, staff and the City Attorney’s office are reviewing ten (10) additional Tier 5 transfer requests.


Staff recommends that the Board uphold the current procedures for processing tier transfer requests. These procedures have been in place since October 2012 and have been effective in providing members with an objective and impartial method for reviewing each request. Upon receipt of a member’s request to transfer, staff currently takes the following actions:

1. Staff contacts the member to determine the reason he/she did not transfer during theelection period provided in the Administrative Code.

2. Staff determines if the member received communications about the tier transferopportunity. In the case of a Tier 5 transfer request, staff confirms whether the memberreceived the Tier 5 information packet that was sent to all active members in October2001, and the October 2002 reminder letter that was mailed to all who had not transferred.

3. Upon receipt of the member’s written response, staff confers with the City Attorney todetermine whether a legal basis exists to grant the tier transfer request.

A legal basis would be a member’s inability to make an informed decision to transfer dueto insufficient mental capacity, breach or mistake by the Plan to properly process themember information regarding the member’s right to transfer, or a failure by the Plan inprocessing the member’s transfer election.

If both staff and the City Attorney determine that there is no legal basis, staff denies themember’s request to transfer. The four denials by staff were dispensed based on themembers’ acknowledgement of not transferring either due to a fear of being terminated orhaving a potentially career-ending injury at the time. In these cases, the members wereaware of the transfer period and made a conscious decision to not transfer. (During thetransfer period staff conducted an extensive campaign to disseminate information to alleligible members, including over 250 outreach events at fire and police stations, GraceSimons Lodge, Frank Hotchkin Training Center, LAPD Harbor Pistol Range, Van NuysService Center, and LAFPP Headquarters; distribution of personalized informationpackets, flyers, newsletter articles and reminder letters. This campaign was initiated inSeptember 2001 and extended through December 2002. The initial Tier 5 transferinformation package was mailed in October 2001 and the reminder letter was sent inOctober 2002.)

If a legal basis exists and staff obtains sufficient supporting documentation from themember, meaning a factual finding to support the legal basis is unnecessary, the tiertransfer request is approved. An example of this would be the members who were onextensive military leave during the election period as discussed above, who provided staffwith copies of call-up and discharge orders covering the appropriate time periods.

If a legal basis exists and it requires a factual finding, the matter will be presented to theBoard. One example where the Board would need to make a factual finding is when aPlan member claims that he/she didn’t transfer in 2002 because an LAFPP staff member(identity unknown) misinformed the Plan member that he/she could not transfer during theelection period. Because this claim relies on a member statement that staff cannotindependently verify, unlike in cases concerning military service or a disabling medicalcondition, the current procedures call for the Board to determine whether it is more


probable than not that the member in question was actually misinformed, thereby creating a legal basis for granting the tier transfer request.

The City Attorney’s legal analysis of prior tier transfer requests discussed by the Board is included in a confidential memorandum as Attachment 3. BUDGET There is no budget impact associated with this report. POLICY No policy changes as recommended. This report was prepared by: Greg Mack, Manager Communications & Active Member Services Section RPC:JS:GM

Attachment 1 – October 4, 2012 Board Report Attachment 2 – Late Tier 5 Transfer Requests Attachment 3 – Confidential Correspondence from City Attorney dated June 5, 2015


Los Angeles, CA 90012 (213) 978-4545


OCTOBER 4, 2012 ITEM: A.4

FROM: William S. Raggio, Interim General Manager

SUBJECT: PROCEDURE FOR THE PROCESSING OF TIER TRANSFER REQUESTS AND POSSIBLE BOARD ACTION

RECOMMENDATION

That the Board adopt the procedure as outlined below for the processing of tier transfer requests.

DISCUSSION

In light of recent tier transfer requests that have been presented to the Board, staff is recommending that future requests submitted to the Department be processed as outlined below. Consistent with the City Attorney’s advice, the Board would only consider tier transfer requests that offer a legal basis for Board action, as determined by staff and the City Attorney. This will allow staff to administer the System in an efficient manner, and pursuant with the plan documents, consistent with how staff administers member benefits in all other areas of the Department.

If approved, staff will process post-deadline transfer requests as follows:

1) The Department receives a written request from a member requesting a tier transfer andproviding an explanation as to why his/her prior election or waiver was invalid.

2) Staff will consult the City Attorney’s Office as to whether a legal basis exists for remedialaction. If both staff and the City Attorney agree that a legal basis does not exist, staff willperform the ministerial duty of denying the request. If both staff and the City Attorney agree alegal basis exists, or if staff and the City Attorney cannot agree on whether a legal basis exists,the matter will proceed to the next step.

3) If both staff and the City Attorney agree that a legal basis exists, LAFPP staff will consult withthe City Attorney’s Office to determine whether a factual finding is necessary to support thelegal basis. If the legal basis does not require a factual finding, relief will be grantedadministratively and the request will be approved. If the legal basis does require factualfinding(s), or if both staff and City Attorney cannot agree on whether a legal basis exists, thematter will be referred to the Board.

4) For all requests referred to the Board, staff will provide the Board with an analysis and thefactual findings that must be made in order to approve the transfer request.

Attachment 1

Note that in the past, at Step 2 of the process, staff informed members that its decision denying a transfer request could be appealed to the Board. Based on the advice of the City Attorney, however, the applicable Administrative Code sections regarding tier transfers do not afford members an appeal right. Further, the Board lacks the authority to grant relief in the absence of a legal basis. As such, staff will no longer advise members of a right to appeal to the Board. However, with the adoption of this procedure, members may continue to seek injunctive relief through the courts after either staff denial in Step 2 or Board denial in Step 4.

BUDGET

This policy will have no budgetary impact. The budget is impacted only upon approval of late tier transfer requests.

POLICY

There is currently no existing procedure for the processing of late tier transfer requests.


Thomas Puchalski, Manager Active Member Services Section

WSR:JS:RLW:TP

Attachment 1


Los Angeles, CA 90012 (213) 978-4545




SUBJECT: CHIEF INVESTMENT OFFICER’S QUARTERLY REPORT OF ASSET ALLOCATION STATUS AND POSSIBLE BOARD ACTION

RECOMMENDATION

That the Board approve the actual asset allocation of the Fund and Staff’s plans for bringing asset classes currently outside of their target allocation ranges back within their allocation ranges.

BACKGROUND

The Rebalancing Policy (Board Policies Sec 1.7) specifies that the Board will review and affirmatively approve any allocations of Fund assets outside of their target ranges. It states:

Staff will monitor the portfolio’s asset allocation relative to the target allocations. If the actual allocations fall within the defined ranges, no rebalancing will be required. If actual allocations fall outside the predetermined range, Staff will implement a rebalancing back to the mid-point between the end of the range that was exceeded and the target allocation.

Staff will report all rebalancing activities to the Board on a quarterly basis at a minimum. In circumstances where it is impractical to rebalance the portfolio for any market or portfolio-specific reason, Staff shall assess the rebalancing options, notify the Board of the out of balance situation, and report its recommendations to the Board. Staff shall seek approval from the Board to implement rebalancing according to Staff’s recommended rebalancing plan in situations that involve leaving the portfolio, or some portion of the portfolio out of balance for an extended period of time.

On October 17, 2013, the Board approved the current asset allocation:

Target Upper Lower Asset Class Allocation Range Range Dom. Large Cap Equity 23.0% 25.8% 20.2% Small Cap Equity 6.0% 7.3% 4.7% Int'l Equity 16.0% 18.4% 13.6% Int'l Emerging Markets 5.0% 6.4% 3.6% Core Bonds 14.0% 14.8% 13.2%


(cont’d from previous page)

Target Upper Lower

Asset Class Allocation Range Range TIPS 5.0% 5.3% 4.7% High Yield Bonds 3.0% 3.4% 2.6% Unconstrained Fixed Income 2.0% 2.2% 1.8% Real Estate 7.0% 8.0% 6.0% REITS 3.0% 3.5% 2.5% Commodities-Energy 5.0% 6.2% 3.8% Private Equity 10.0% 12.5% 7.5% Cash Equivalents 1.0% 4.0% 1.0%

Together with the General Consultant RVK and Staff, rebalancing range limits were established. DISCUSSION Portfolio Status As of June 30, 2015, the Fund was within the target ranges for Small Cap Domestic Equity, International Equity, International Emerging Markets, Unconstrained Fixed Income, Real Estate (including REITS), Private Equity and Cash (Attachment I). Core Bonds (including TIPS) and High Yield Bonds continued to be under allocated due to the denominator effect driven mainly by high valuations of the domestic equity markets. The Commodity allocation continues to move closer to its lower target range and is expected to reach its target within six months when the implementation of the futures based strategy is completed. Domestic Core Equity, although over allocated, may meet its upper target range in 2015 as it’s the main funding source for the Commodities program as well as the Fund’s commitments to real estate and private equity funds. Attachment II illustrates the portfolio and allocation status of each asset class as of June 30, 2015. Rebalancing To address the asset allocation imbalance, several rebalancing transactions were performed. In March, $100 million were removed from Domestic Equity ($50 million Small Cap and $50 million Core) and the funds were reallocated to Core Bonds. In April, $190 million were liquidated from Domestic Core Equity of which $90 million were allocated to fund the last portion of the passive public equity commodity accounts. The balance was designated for operational needs as well as funding for the futures based commodity accounts.


CASH FLOW The actual cash flows (in millions) for 2Q2015 and the projected cash flow for 3Q2015 are summarized as below.

April 1 - June 30, 2015

July 1 - Sept 30, 2015

Actual

Projected

City Contributions (Net)1

$ -

$ 624.0 Member Contributions

$ 34.1

$ 31.8

Securities Lending

$ 1.9

$ 1.9 Investment Income

$ 91.7

$ 79.0

Earnings on Cash/Misc

$ 0.3

$ 0.2 Real Estate

$ 40.7

$ 28.6

Private Equity

$ 12.6

$ 30.2 DROP

$ (35.1)

$ (27.1)

Benefits & Administrative Expense

$ (274.7)

$ (268.4)

Net Cash Flow (est.)

$ (128.5)

$ 500.2

1The Net City Contribution = (the Total General Fund Contribution – the retirement contribution payment from LAFPP to LACERS for LAFPP staff) + the Special Fund (Harbor) contribution. The Excess Benefit Plan contribution is not included in the calculation.

CURRENT EVENTS Active Commodity Manager Search On March 5, 2015, the Board interviewed five finalists for the enhanced index/active constrained commodity search. Both Goldman Sachs Asset Management (enhanced index) and Gresham Investment Management (active constrained) were selected. Manager of Emerging Managers Search The Board interviewed five firms to manage the emerging fixed income manager mandate. On June 18th, GIA Partners, LLC (GIA) and Semper Capital Management, L.P. were selected. On June 26th, the Board interviewed five emerging managers to manage the small cap and/or micro cap domestic equities for the Fund with the intent of hiring two firms. Following the presentations, the Board selected three firms, Channing Capital Management, LLC (small cap), Granite Investment Partners (micro cap), and PHOCAS Financial (small cap). Finally, on July 2nd, the Board interviewed five finalists in the large cap domestic equity emerging manager search. OakBrook Investment, LLC (large cap core) and Redwood Investments, LLC (large cap core) were selected. In addition at the July 2nd meeting, the Board voted to liquidate the Attucks account to provide $100 million funding for the new small cap stock manager accounts.


Asset Liability Study On April 2nd, the Board approved the expenditure of funds for the upcoming Asset/Liability study to be conducted by RVK. The study will allow the Board to assess the current asset allocation against contemporary conditions and provide a basis for making adjustments to the allocation if appropriate. This report was prepared by: Tom Lopez Chief Investment Officer RPC:TL:DN:MS Attachment I – Portfolio Allocation Chart as of June 30, 2015 Attachment II – Total Portfolio as of June 30, 2015

Portfolio Allocation as of June 30, 2015

26.9

7%

6.9

8%

17.1

8%

3.9

8%

17.3

0%

2.5

4%

2.0

0%

1.7

7%

10.1

0%

8.3

9%

2.7

9%

0.00%

5.00%

10.00%

15.00%

20.00%

25.00%

30.00%

35.00%

Core Equity (23%) Small Cap. Equity

(6%)

Int'l Equity (16%) Int'l Emerg. Mkts

(5.0%)

Core Bonds

Iincluding TIPS)

(19.0%)

High Yield Bonds

(3%)

Unconstrained

Fixed Income

(2.0%)

Cash (1.0%) Total RE (Including

REITS) (10.0%)

Private Equity

(10.0%)

Commodities

Energy (5.0%)

Actual Allocation, Target Allocation in parenthesis

Over-allocated (Blue), Under-allocated (Red)

6.2

3.8

*Board approved ranges on 10/17/13

1.8

7.3

4.7

3.6

6.4

20.2

17.9

2.6

1.0

4.0

8.5

11.5

7.5

12.5

25.8

3.4

20.2

18.4

13.6

2.2

292628

Typewritten Text

Attachment I

A

EQUITIES STOCKS BONDS CASH TOTAL ALLOC. PRIVATE EQUITY BONDS CASH TOTAL ALLOC.

Alliance Capital (S&P 500 Index) 2,217.1 - 8.2 2,225.3 Abbott Capital 77.9 - - 77.9

Alliance Capital (Russell 1000 Value Index) 129.0 - 0.6 129.7 Hamilton Lane 24.1 - - 24.1

Alliance Capital (Russell 1000 Growth Index) 947.4 - 2.1 949.6 PCA 69.8 - - 69.8

Chicago Equity (Enh. Index-Core) 311.7 - 3.3 315.0 Portfolio Advisors 929.6 - - 929.6

LA Capital (Enh. Index-Growth) 242.7 - 0.3 243.0 Aldus Equity 305.6 - - 305.6

Research Affiliates (Enh. Index-Value) 496.5 - 3.6 500.1 Stepstone Group 155.6 - - 155.6

Robeco (Value) 561.1 - 3.6 564.7 TOTAL PRIVATE EQUITY MGRS (10%) 1,562.7 - - 1,562.7 8.39%

FIS (Mgr of Emerging Mgrs) Domestic 89.4 - 2.7 92.1 Target Differential (1.61)% (298.8)

Core Equity Managers (23%) 4,994.9 - 24.5 5,019.5 26.97%

Target Differential 3.97% 738.1 REAL ESTATEAlliance Capital Global REIT 105.6 - 0.4 106.0

Frontier Capital Mgt (Growth) 654.8 - 6.4 661.2 Principal Global REIT 164.3 - 0.1 164.4

Daruma (Value) 493.7 - 32.5 526.2 Principal U.S. REIT 297.4 - 1.8 299.2

Attucks (Mgr of Emerging Mgrs) 108.9 - 3.1 112.0 Terminated REIT Managers 0.0 - 0.4 0.4

Small Cap. Equity Mgrs (6%) 1,257.4 - 41.9 1,299.3 6.98% REIT Managers (3.0%) 567.3 - 2.7 570.0 3.06%

Target Differential 0.98% 182.4 Target Differential 0.06% 11.6

REAL ESTATE COMMINGLED FUNDS SUMMARY

Brandes (Value) 901.5 - 94.1 995.6 Total Pooled Funds 829.1 - - 829.1 4.45%

Fisher (Core) 453.4 - 5.6 459.0 REAL ESTATE SEPARATE ACCT. SUMMARY BY MANAGER

Blackrock (Core Passive) 718.6 - 3.2 721.9 Heitman 223.3 - - 223.3

Baille Gifford (Growth) 543.8 - 9.6 553.4 Sentinel 257.3 - - 257.3

Boston Common (ESG) 28.8 - 0.4 29.3 Real Estate Equity Mgrs 480.5 - - 480.5 2.58%

Northern Trust (Int'l Small Cap Index) 337.0 - 3.8 340.7 TOTAL REAL ESTATE (10%) 1,876.9 - 2.7 1,879.6 10.10%FIS (Mgr of Emerging Mgrs) International 96.3 - 2.2 98.5 Target Differential 0.10% 18.2

Terminated Int'l Equity Managers 0.0 - 0.0 0.0

Int'l Equity Mgrs (16%) 3,079.4 - 119.0 3,198.4 17.18% COMMODITIESTarget Differential 1.18% 220.1 Alliance (Commodities, Public Equity) 308.9 - 0.8 309.7

Harding Loevner 314.4 4.2 318.6 Kleinwort Benson (Commodities, Public Equity) 96.1 - 1.1 97.2

Dimensional Fund Advisors 418.3 0.0 3.8 422.1 Mellon Capital (Commodities, Public Equity) 80.8 - 2.4 83.2

Terminated Int'l Emerg. Mkts. Mgrs. 0.0 - 0.4 0.4 PA (Commodities, Private Equity) 29.8 - - 29.8

Int'l Emerg. Mkts Mgrs (5.0%) 732.6 0.0 8.4 741.1 3.98% (Commodities, Futures) -

Target Differential (1.02)% (189.7) TOTAL COMMODITIES (5.0%) 515.6 - 4.3 519.9 2.79%

TOTAL EQUITIES MGRS (50.0%) 10,064.4 0.0 193.9 10,258.3 55.11% Target Differential (2.21)% (415.1)

Int'l Tax Reclaims - - 0.3 0.3

FIXED INCOME CASHNorthern Trust (Fixed Income Index) - 669.4 1.5 670.9 HOUSE ACCOUNTS

Reams Asset Mgmt. (Opportunistic) - 619.5 57.7 677.2 Tier 1 (Article 17) - - 1.1 1.1

LM Capital (Opportunistic) - 330.0 5.7 335.8 Tier 2 (Article 18) - - 227.9 227.9

Loomis Sayles (Long Duration) - 595.3 18.3 613.6 Tier 3 (Article 35) - - 28.9 28.9

CA Comm. Mort. Fund - 1.7 - 1.7 Tier 4 (New) - - 5.6 5.6

Bridgewater (TIPS) - 339.3 - 339.3 Tier 5 (New) - - 62.4 62.4

Reams Asset Mgmt. (Passive TIPS) - 511.7 0.2 512.0 Tier 6 (New) - - 2.8 2.8

Bridgewater Pure Alpha - 70.1 - 70.1 CASH SUMMARY

Core Bond Mgrs (19.0%) - 3,137.0 83.5 3,220.5 17.30% Unallocated Cash Reserve (1%) - - 328.8 328.8 1.77%

Target Differential (1.70)% (316.3) Target Differential 0.77% 142.7

MacKay Shields 1.9 448.4 22.3 472.6 472.6 Transition - - 0.0 0.0

High Yield Bond Mgrs (3.0%) 1.9 448.4 22.3 472.6 2.54%

Target Differential (0.46)% (85.8)

Reams Asset Mgmt. (Unconstrained) - 165.6 19.1 184.7 PRIVATE REAL

Payden & Rygel (Unconstrained) 185.4 1.9 187.3 EQUITY STOCKS BONDS ESTATE CASH TOTAL

Unconstrained Fixed Income (2.0%) 351.0 21.0 372.0 2.00% ACTUAL ASSET MIX

Target Differential (0.00)% (0.3) Current Month 515.6 1,562.7 10,066.3 3,936.4 1,876.9 656.8 18,614.8

2.77% 8.39% 54.08% 21.15% 10.08% 3.53% 100.00%

TOTAL FIXED INCOME MGRS (24.0%) 1.9 3,936.4 126.8 4,065.1 21.84% Last Month 544.4 1,520.2 10,237.2 4,093.2 1,914.9 631.1 18,941.0

Subtotals & totals may not sum up exactly due to rounding. % Change -5.29% 2.79% -1.67% -3.83% -1.98% 4.08% -1.72%

Data is unaudited.

Dollars expressed in Millions.

COMMODITIES

Portfolio as of June 30, 2015

TOTAL FUND

STOCKS / EQUITY / RE

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Los Angeles, CA 90012 (213) 978-4545


DATE: JULY 16, 2015 ITEM: B.2


SUBJECT: QUARTERLY TRAVEL REPORT FOR COMMISSIONERS AND STAFF

THIS REPORT IS PROVIDED TO THE BOARD FOR INFORMATIONAL PURPOSES.

DISCUSSION

The following attachments are provided for your information:

1) Summary of expense statements received for Commissioners and Staff travel for the fourthquarter ending June 30, 2015; and,

2) Cumulative year to date travel for Commissioners and Staff for Fiscal Year 2014-15.


Evangelina Masud

Executive Administrative Assistant Administrative Operations Division

RPC:WSR:EM

Attachment 1. Quarterly Travel Report for Commissioners and Staff Attachment 2. Summary for Fiscal Year 2014-15

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Name LocationEstimated Expenses

Estimated */ Actual

Expenses

Date Submitted to Accounting

Date Approved by Accounting

in FMS

# of Business

Processing Days Event/Organization** Remarks

Navarro, Ruben New Orleans, LA 05/03/15 05/06/15 2,580$ 2,555$ 6/4/2015 6/5/2015 1 NCPERS 2015 Annual Conference and Exhibition Paid

Navarro, Ruben Chicago, IL 06/07/15 06/10/15 2,278$ 2,278$ * Opal Financial Group Emerging Managers Summit PES not submitted.

TOTAL COMMISSIONERS TRAVEL EXPENDITURES 4,833$

1* PES not yet submitted, amount used is estimate.**Event/Organization Acronym GuideNCPERS

DEPARTMENT OF FIRE AND POLICE PENSIONS

COMMISSIONERS TRAVEL REPORT

QUARTER ENDING JUNE 30, 2015

(Total includes estimates for trips where Personal Expense Statements are not yet submitted)

Travel Dates

AVERAGE NO. OF PROCESSING DAYS (BUSINESS DAYS) FROM DATE ACCOUNTING RECEIVES TO FMS APPROVAL DATE

NATIONAL CONFERENCE ON PUBLIC EMPLOYEE RETIREMENT SYSTEMS

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I:\Executive\Board REPORTS\REGULAR Board Meetings\2015 Calendar Year\07-16-15\07-16-15 B2-Quarterly Travel Ending 06-15 (Attachs)

Name Location Est.

Expenses

Estimated */ Actual

Expenses


Date Approved by

Accounting in FMS

# of Business Processing

Days Event/Organization** Remarks

Chao, Annie Chicago, IL 06/08/15 06/12/15 2,115$ 2,115$ * Heitman investor meetings and site visit. PES not submitted

Chao, Annie New York, NY 06/14/15 06/16/15 1,846$ 1,846$ * IMN R.E. Opportunity Private Fund Investing Forum PES not submitted

Clements, Stephanie Philadelphia, PA 05/29/15 06/03/15 1,952$ 1,182$ A 6/17/2015 6/18/2015 1 GFOA 109th Annual Conference Paid

Delos Angeles, Cecilia Philadelphia, PA 05/29/15 06/03/15 1,230$ 792$ A 6/17/2015 6/18/2015 1 GFOA 109th Annual ConferencePaid (Shared room with Y. Huang)

Domagat, Alfredo Denver, CO 04/19/15 04/22/15 1,668$ 1,605$ 5/27/2015 5/28/2015 1 PRISM 2015 Conference Paid

Huang, Yolanda Philadelphia, PA 05/29/15 06/03/15 2,011$ 1,278$ A/B 6/17/2015 6/18/2015 1 GFOA 109th Annual Conference Paid

Kenney, Erin San Diego, CA 05/01/15 05/05/15 740$ 716$ 6/1/2015 6/3/2015 2 ALGA's 27th Annual Conference Paid

Palmer, Paul Boston, MA 04/07/15 04/10/15 1,698$ 1,592$ 4/30/2015 5/4/2015 2 AEW Client Conference & Annual Fund Meetings, site visit. Paid

Palmer, PaulSan Louis, MO & Minneapolis, MN 05/04/15 05/06/15 1,312$ 1,012$ 5/26/2015 5/27/2015 1 Real estate due diligence site visit. Paid

Palmer, Paul New York, NY 05/11/15 05/14/15 1,863$ 1,613$ 5/26/2015 5/27/2015 1 Institutional Investors Forum Emerging Markets Paid

Perlstein, DarenSan Louis, MO & Minneapolis, MN 05/04/15 05/06/15 1,325$ 942$ 5/26/2015 5/27/2015 1 Real estate due diligence site visit. Paid

Robinson, Erika Temecula, CA 05/19/15 05/20/15 337$ 336$ 5/27/2015 5/28/2015 1 2015 LA Firemen's Relief Ass. Reunion Paid

Rogers, Richard San Francisco, CA 04/06/15 04/08/15 1,105$ 1,069$ 5/5/2015 5/5/2015 0 Pension Bridge Conference Paid

Rogers, Richard New York, NY 06/08/15 06/11/15 2,300$ 2,300$ * REITWeek 2015 Conference PES not submitted.

Rogers, Richard Chicago, IL 06/14/15 06/17/15 2,021$ 2,021$ * NASP 2015 Annual Conference PES not submitted.

Shaler, Marion Philadelphia, PA 04/26/15 04/30/15 6,430$ 4,675$ C 6/12/2015 6/15/2015 1 IFEBP-Portfolio Concepts and Management Paid

Yan, Bob Denver, CO 04/19/15 04/22/15 1,728$ 1,752$ 6/2/2015 6/3/2015 1 PRISM 2015 Conference Paid

TOTAL STAFF TRAVEL EXPENDITURES 26,846$

1* PES not yet submitted, amount used is estimate.**Event/Organization Acronym Guide

ALGA ASSOCIATION OF LOCAL GOVERNMENT AUDITORSIFEBPIMNNASP NATIONAL ASSOCIATION OF SECURITIES PROFESSIONALSGFOAPRISMA. To avail of the group discount, Y. Huang paid the registration fees for S. Clements ($481.50) & C. de los Angeles ($342) using her personal credit card. These expenses are included in Y. Huang's travel expenses.B. Y. Huang's total expenses including registration fees paid for S. Clements & C. de los Angeles is $2,775. $1,496.93 of which is being claimed through MOU 36.C. Registration fees paid for G. Aliano applied to M. Shaler (Philadelphia).

PUBLIC RETIREMENT INFORMATION SYSTEMS MANAGEMENTGOVERNMENT FINANCE OFFICERS ASSOCIATION

INFORMATION MANAGEMENT NETWORK

DEPARTMENT OF FIRE AND POLICE PENSIONS

STAFF TRAVEL REPORT

QUARTER ENDING JUNE 30, 2015

Travel Dates

AVERAGE NO. OF PROCESSING DAYS (BUSINESS DAYS) FROM DATE ACCOUNTING RECEIVES TO FMS APPROVAL DATE


INTERNATIONAL FOUNDATION OF EMPLOYEE BENEFIT PLANS

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Name Location Est.

Expenses

Estimated */ Actual

Expenses



in FMS

# of Business


STAFF

Ciranna, Raymond San Jose, CA 01/23/15 01/23/15 491$ 479$ 2/5/2015 2/5/2015 0 CALAPRS Administrators' Roundtable Paid

Chao, Annie Monterey, CA 11/11/14 11/14/14 1,323$ 1,269$ 11/24/2014 12/5/2014 7 SACRS 2014 Fall Conference Paid

Chao, Annie San Diego, CA 03/16/15 03/16/15 128$ 128$ 3/19/2015 3/20/2015 1 Site visit -Gerrity Group Office Paid

Chao, Annie Washington, DC 03/25/15 03/27/15 1,534$ 1,241$ 5/8/2015 5/8/2015 0 PREA 2015 Spring Conference Paid

Chao, Annie Chicago, IL 06/08/15 06/12/15 2,115$ 2,115$ * Heitman investor meetings and site visit. PES not submitted

Chao, Annie New York, NY 06/14/15 06/16/15 1,846$ 1,846$ * IMN R.E. Opportunity Private Fund Investing Forum PES not submitted

Clements, Stephanie Philadelphia, PA 05/29/15 06/03/15 1,952$ 1,182$ A 6/17/2015 6/18/2015 1 GFOA 109th Annual Conference Paid

Delos Angeles, Cecilia Philadelphia, PA 05/29/15 06/03/15 1,230$ 792$ A 6/17/2015 6/18/2015 1 GFOA 109th Annual ConferencePaid (Shared room with Y. Huang)

Domagat, Alfredo Denver, CO 04/19/15 04/22/15 1,668$ 1,605$ 5/27/2015 5/28/2015 1 PRISM 2015 Conference Paid

Huang, Yolanda Philadelphia, PA 05/29/15 06/03/15 2,011$ 1,278$ A/B 6/17/2015 6/18/2015 1 GFOA 109th Annual Conference Paid

Kenney, Erin San Diego, CA 05/01/15 05/05/15 740$ 716$ 6/1/2015 6/3/2015 2 ALGA's 27th Annual Conference Paid

Liem, Susan Chicago, IL 07/15/14 07/22/14 3,825$ 3,714$ 8/15/2014 8/20/2014 4ILPA Institute Level 2 Mod 4&5 Pension Bridge Conference Paid

Liem, Susan Phoenix, AZ 10/20/14 10/23/14 500$ 448$ 10/20/2014 10/23/2014 3Site visits - Texas Pacific Group LP Conf 2 Real Estate

Paid (Shared room with Erika Tiedge)

Liem, Susan Half Moon Bay, CA 03/10/15 03/13/15 459$ 402$ 3/27/2015 4/1/2015 2Site visits - Women's Private Equity Summit & General Partner

Paid (Shared room with Erika Tiedge)

Lopez, Thomas Carlsbad, CA 10/29/14 10/29/14 386$ 386$ 1/2/2015 1/7/2015 3 Nat'l Assoc of Investment Companies Annual Meeting

Magno, Narciso Jr. Burlingame, CA 10/23/14 10/24/14 635$ 607$ 10/31/2014 11/17/2014 10 CALAPRS Accountants RoundtablePaid, GM approved on 11/14/14.

Niu, Derek Chicago, IL 07/20/14 07/24/14 4,475$ 4,262$ 8/4/2014 8/5/2014 2 CFA Institute Paid

Palmer, Paul Orlando, FL 07/28/14 07/30/14 1,160$ 1,146$ 8/11/2014 8/15/2014 5 Due diligence - Site visit Heitman separate property. Paid

Palmer, Paul San Francisco, CA 09/25/14 09/25/14 267$ 265$ 10/3/2014 10/7/2014 2 Townsend Separate Acct Manager Annual Meeting Paid

Palmer, Paul Dallas, TX 10/06/14 10/09/14 1,386$ 1,472$ 10/21/2014 10/28/2014 5 Site visit - Baillie Gifford Client Forum & due diligence. Paid

Palmer, Paul San Diego, CA 03/16/15 03/16/15 46$ 46$ 3/19/2015 3/20/2015 1 Site visit - Gerrity Group Office Paid

Palmer, Paul Boston, MA 04/07/15 04/10/15 1,698$ 1,592$ 4/30/2015 5/4/2015 2AEW Client Conference & Annual Fund Meetings, site visit. Paid

Palmer, PaulSan Louis, MO & Minneapolis, MN 05/04/15 05/06/15 1,312$ 1,012$ 5/26/2015 5/27/2015 1 Real estate due diligence site visit. Paid

Palmer, Paul New York, NY 05/11/15 05/14/15 1,863$ 1,613$ 5/26/2015 5/27/2015 1 Institutional Investors Forum Emerging Markets Paid

Perlstein, DarenSan Louis, MO & Minneapolis, MN 05/04/15 05/06/15 1,325$ 942$ 5/26/2015 5/27/2015 1 Real estate due diligence site visit. Paid

Raggio, William Monterey, CA 03/08/15 03/10/15 1,062$ 1,045$ 3/20/2015 3/20/2015 0 CALAPRS 2015 General Assembly Paid

DEPARTMENT OF FIRE AND POLICE PENSIONSSTAFF & COMMISSIONERS TRAVEL REPORT

SUMMARY FOR THE PERIOD OF JULY 1, 2014 TO JUNE 30, 2015

Travel Dates

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Name Location Est.

Expenses

Estimated */ Actual

Expenses



in FMS

# of Business




Travel Dates

Robinson, Erika San Jose, CA 07/13/14 07/15/14 1,996$ 1,716$ 7/28/2014 7/31/2014 4IFEBP Benefit Communication and Technology Institute Paid

Robinson, Erika Palm Springs, CA 09/18/14 09/20/14 588$ 524$ 10/7/2014 10/9/2014 2 LAPPL Conference Paid

Robinson, Erika Washington, DC 01/25/15 01/27/15 1,597$ 1,547$ 2/4/2015 2/5/2015 1 NCPERS 2015 Legislative Conference Paid

Robinson, Erika Temecula, CA 05/19/15 05/20/15 337$ 336$ 5/27/2015 5/28/2015 1 2015 LA Firemen's Relief Ass. Reunion Paid

Rogers, Richard Santa Barbara, CA 09/08/14 09/10/14 928$ 839$ 9/18/2014 9/23/2014 4 Opal Financial Group Investment Trends Summit Paid

Rogers, Richard Austin, TX 11/05/14 11/07/14 1,157$ 1,124$ 11/18/2014 11/21/2014 3 Opal Financial Group's Emerging Mgrs Summit South Paid

Rogers, Richard Austin, TX 01/21/15 01/22/15 883$ 883$ 2/4/2015 2/6/2015 2 TRS of Texas 2015 Emerging Mgr Conference Paid

Rogers, Richard San Francisco, CA 04/06/15 04/08/15 1,105$ 1,069$ 5/5/2015 5/5/2015 0 Pension Bridge Conference Paid

Rogers, Richard New York, NY 06/08/15 06/11/15 2,300$ 2,300$ * REITWeek 2015 Conference PES not submitted.

Rogers, Richard Chicago, IL 06/14/15 06/17/15 2,021$ 2,021$ * NASP 2015 Annual Conference PES not submitted.

Shaler, Marion Monterey, CA 11/11/14 11/14/14 1,353$ -$ SACRS 2014 Fall ConferenceTrip canceled due to personal reason.

Shaler, Marion Philadelphia, PA 04/26/15 04/30/15 6,430$ 4,675$ C 6/12/2015 6/15/2015 1 IFEBP-Portfolio Concepts and Management Paid

Tavares, Carol Palm Springs, CA 09/18/14 09/20/14 589$ 537$ 10/7/2014 10/9/2014 2 LAPPL Conference Paid

Tiedge, Erika Chicago, IL 07/15/14 07/22/14 3,869$ 3,717$ 8/15/2014 8/20/2014 4ILPA Institute Level 2 Mod 4&5 Pension Bridge Conference Paid

Tiedge, Erika Phoenix, AZ 10/20/14 10/23/14 1,271$ 1,463$ 12/8/2014 12/15/2014 5 Site visits -Texas Pacific Group LP Conf 2 Real Estate Paid (Shared room with S. Liem)

Tiedge, Erika Half Moon Bay, CA 03/10/15 03/13/15 960$ 882$ 3/27/2015 4/1/2015 2Women's Private Equity Summit & General Partner site visits.

Paid (Shared room with S. Liem)

Torres, Anthony San Diego, CA 03/08/15 03/11/15 2,093$ 2,037$ 3/25/2015 3/25/2015 0 UCS Mid-Sized Retirement & Healthcare Plan Mgmt Paid

Wilder, Robyn New Orleans, LA 10/26/14 10/29/14 2,091$ 1,951$ 12/2/2014 12/3/2014 1NCPERS Public Safety Employees Pension & Benefits Conference Paid

Willhite, Lindi San Francisco, CA 08/20/14 08/23/14 1,724$ 1,671$ 10/29/2014 10/29/2014 0NELI Public Sector EEO - Employment Law Conference Paid

Yan, Bob Denver, CO 04/19/15 04/22/15 1,728$ 1,752$ 6/2/2015 6/3/2015 1 PRISM 2015 Conference PaidTOTAL STAFF TRAVEL EXPENDITURES 62,647$

COMMISSIONERS

Aliano, George Rancho Mirage, CA 03/08/15 03/11/15 2,567$ 1,315$ C IFEBP Investments Institute

Trip canceled. Registration applied to M. Shaler's trip to Philadelphia.

Cade, Carl Boston, MA 10/10/14 10/15/14 5,380$ 4,769$ 11/20/2014 11/24/2014 2 IFEBP 60th Annual Conference Paid

Cade, Carl Washington, DC 01/24/15 01/26/15 1,679$ 1,299$ 3/12/2015 3/16/2015 2 NCPERS Healthcare Symposium Paid

Cade, Carl Washington, DC 03/24/15 03/27/15 1,789$ 1,669$ 5/12/2015 5/14/2015 2 PREA 2015 CEO Leadership Forum & Conference Paid

(Total includes estimates for trips where Personal Expense Statements have not yet submitted)

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Name Location Est.

Expenses

Estimated */ Actual

Expenses



in FMS

# of Business




Travel Dates

Cade, Carl Miami Beach, FL 03/29/15 04/01/15 2,400$ 2,307$ 5/12/2015 5/14/2015 2 Opal Financial Group Real Estate Investors Summit Paid

Navarro, Ruben Boston, MA 10/10/14 10/15/14 4,831$ 4,821$ 2/10/2015 2/18/2015 5 IFEBP 60th Annual Conference Paid

Navarro, Ruben New Orleans, LA 10/26/14 10/29/14 2,185$ 1,977$ 2/9/2015 2/13/2015 4NCPERS Public Safety Employees Pension & Benefits Conference Paid

Navarro, Ruben New Orleans, LA 05/03/15 05/06/15 2,580$ 2,555$ 6/4/2015 6/5/2015 1 NCPERS 2015 Annual Conference and Exhibition Paid

Navarro, Ruben Chicago, IL 06/07/15 06/10/15 2,278$ 2,278$ * Opal Financial Group Emerging Managers Summit PES not submitted.

Salimpour, Pedram Stanford, CA 08/05/14 08/08/14 3,079$ 2,906$ 11/6/2014 11/10/2014 2 CALAPRS Principle of Pension Mgmt for Trustees Paid

TOTAL COMMISSIONER TRAVEL EXPENDITURES 25,896$ TOTAL TRAVEL EXPENDITURES 88,543$

AVERAGE NO. OF PROCESSING DAYS (BUSINESS DAYS) FROM DATE ACCOUNTING RECEIVES TO FMS APPROVAL DATE 2* PES not yet submitted, amount used is estimate.**Event/Organization Acronym GuideALGA ASSOCIATION OF LOCAL GOVERNMENT AUDITORSCALAPRSGFOAIFEBPILPALAPPLNASP NATIONAL ASSOCIATION OF SECURITIES PROFESSIONALSNCPERSNELIPREAPRISMSACRSTRSA. To avail of the group discount, Y. Huang paid the registration fees for S. Clements ($481.50) & C. de los Angeles ($342) using her credit card. These expenses are included in Y. Huang's travel expenses.B. Y. Huang's total expenses including registration fees paid for S. Clements & C. de los Angeles is $2,775. $1,496.93 of which is being claimed through MOU 36.C. Registration fees paid for G. Aliano applied to M. Shaler (Philadelphia).

NATIONAL EMPLOYMENT LAW INSTITUTEPENSION REAL ESTATE ASSOCIATION

TEACHER RETIREMENT SYSTEM


CALIFORNIA ASSOCIATION OF PUBLIC RETIREMENT SYSTEMS

NATIONAL CONFERENCE ON PUBLIC EMPLOYEE RETIREMENT SYSTEMS

STATE ASSOCIATION OF COUNTY RETIREMENT SYSTEMS

INTERNATIONAL FOUNDATION OF EMPLOYEE BENEFIT PLANSINSTITUTIONAL LIMITED PARTNERS ASSOCIATIONLOS ANGELES POLICE PROTECTIVE LEAGUE

GOVERNMENT FINANCE OFFICERS ASSOCIATION

PUBLIC RETIREMENT INFORMATION SYSTEMS MANAGEMENT


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Attachment 2


Los Angeles, CA 90012 (213) 978-4545


DATE: JULY 16, 2015 ITEM: B.4.a


SUBJECT: JUNE 2015 MONTHLY REPORT AND UPDATE

THIS REPORT IS PROVIDED FOR INFORMATIONAL PURPOSES

DISCUSSION

The June 2015 Monthly Report includes the following notable items:

1) Emerging Manager Program - The Board engaged in a series of interviews and selectedmanagers for the Fixed Income (June 18th), Small Cap and Micro Cap Domestic Equity (June25th), and Large Cap Domestic Equity (July 2nd) Emerging Manager Searches. Staff will nowbe working to negotiate terms and execute contracts with each selected manager.

2) Member System Conversion Project - The pension administration system contract with XeroxState and Local Solutions, Inc., has now been executed. The contract amendment to LRWL,Inc. to provide Oversight Project Management services has also been executed. As such, theproject will commence on schedule on July 1, 2015.

3) Document Imaging - As of June 30th, staff had completed QA testing on all but two boxes.Complete QA testing is now scheduled for July. Staff is working to correct the scanning errorsidentified in the paper documents. It is anticipated all errors will be completed by the end ofSeptember, thus completing the backfile conversion of onsite documents.

4) Private Equity - The following private equity investments have closed since the last meetingannouncement:

On May 7, 2015, the Board, in closed session pursuant to Government Code Section54956.81, approved a commitment of up to $25 million in the following alternative investment:Clearlake Capital Partners IV, L.P. The general partner reduced LAFPP's commitment to $7.5million due to oversubscription, and the investment closed on June 22, 2015.

On June 4, 2015, the Board, in closed session pursuant to Government Code Section54956.81, approved a commitment of up to $5 million in the following alternative investment:New Water Capital Partners, L.P. and the investment closed on June 30, 2015.


5) The following searches and firms are within the (new) Marketing Cessation Period Policy*:

Vendor / Contract Contract Start Date

Contract Expiration

Date

Market Cessation Start

Date Search - Emerging Investment Manager – Large Cap Domestic Equity (Direct Hire) TBD TBD 11/20/14 Search – Enhanced Index Commodity Manager - Selected Firms: • Goldman Sachs Asset Management;• Gresham Investment Management; 07/01/15 TBD 08/21/14 Search – Emerging Investment Managers – Domestic Fixed Income (Direct Hire) – Selected Firms: • GIA Partners, LLC• Semper Capital Management, LP TBD TBD 06/05/14 Search – Emerging Investment Managers – Small Cap and Micro-Cap (Direct Hire) – Selected Firms: • Channing Capital Management• Granite Investment Partners• PHOCAS Financial Corporation TBD TBD 06/05/14 LM Capital Group LLC (Fixed Income)

09/01/12 08/31/15 06/01/15 Boston Common Asset Management, LLC (International Equity Emerging Manger) 10/01/12 09/30/15 07/01/15 Loomis, Sayles & Co. LP (Fixed Income) 10/01/12 09/30/15 07/01/15

*Marketing Cessation: In accordance with Section 9.0 of the Investment Policy, from the time the search begins with the Board’sapproval of the minimum criteria for the search until the search ends with the selection of the firm(s) to receive contract(s), all direct marketing contact with firms that meet the search criteria will be limited to meetings with the Consultant, information sent to the Consultant or Department, questions about the search directed to the Staff or Consultant, one meeting at the Department’s office with Staff and any site visits. The Board members, Department Staff or Consultant will accept no entertainment or gifts of any kind from any firm qualifying for the search. This policy does not prohibit contact with potential interview candidates at group social events, educational seminars, conferences, or charitable events so long as there is no direct marketing.

During the three months prior to the renewal of a contract with a firm currently under contract, the Board Members, Department Staff and Consultant will accept no entertainment or gifts from that firm until the contract has been renewed or terminated by the Board. Firms who currently have contracts with LAFPP are allowed to continue contact related to the existing contract with Staff and the Consultant.

Attachment

Item: B.4.a

MONTHLY REPORT

JUNE 2015

STATUS REPORT OF BOARD ASSIGNMENTS TO STAFF

07/16/15

I:Executive/Board Assignments/Board Assign to Staff 07/16/15

MEETING DATE ASSIGNMENT STAFF

PERSON DATE DUE

TO THE BOARD

STATUS

03/5/15 Summary of Social Security Benefits Windfall Elimination Provision

Robyn Wilder August 2015 Board Report pending.

05/07/15 Evaluation of General Investment Consultant

Tom Lopez September 2015

Board Report to board for July 16, 2015 meeting and evaluation results scheduled for September 2015.

1

BOARD COMMITTEE ASSIGNMENTS

07-16-15

I:Executive/Board Committee/Brd Cmte Assignments 07-16-15.doc

DATE ASSIGNED AUDIT COMMITTEE STAFF

PERSON DUE DATE

TO COMMITTEE

STATUS

04/03/14 HEK Audit recommendations: 4 recommendations assigned to the Audit Committee.

Erin Kenney (1)

October 2015

The Board approved the status of the four recommendations on June 19, 2014 as follows: No Action – 1 Completed – 2 In Progress – 1

The remaining active recommendation marked “In Progress” regarding a comprehensive security plan for the new building will be presented to the Committee once the plan is more fully developed.

DATE ASSIGNED BENEFITS COMMITTEE STAFF

PERSON DUE DATE

TO COMMITTEE

STATUS

04/03/14

HEK Audit recommendations: 10 recommendations assigned to the Benefits Committee.

Joe Salazar (3) William Raggio (1)

October 2, 2014

The Board approved the status of the ten recommendations on October 16, 2014 as follows: No Action – 1 Completed – 5 In Progress – 4

Three (disability-related) recommendations marked “In Progress” were discussed by the Committee on December 18, 2014, and the proposed dispositions were approved by the Board on January 15, 2015.

One remaining recommendation (related to health subsidy payment verification) is expected to be presented at the next Committee meeting.

DATE ASSIGNED

AD HOC EMERGING INVESTMENT

MANAGERS COMMITTEE

STAFF PERSON

DUE DATE TO

COMMITTEE STATUS

None.

2

BOARD COMMITTEE ASSIGNMENTS

07-16-15

I:Executive/Board Committee/Brd Cmte Assignments 07-16-15.doc

DATE

ASSIGNED

GOVERNANCE

COMMITTEE

STAFF

PERSON

DUE DATE

TO COMMITTEE

STATUS

04/03/14

HEK Audit recommendations: 2 recommendations assigned to the Governance Committee.

William Raggio (1)

August 6, 2015

The Board approved the status of the two recommendations on October 2, 2014 as follows: Completed – 1 In Progress – 1 The one remaining active recommendation marked “In Progress” will be presented to the Committee on August 6, 2015.

3

A

EQUITIES STOCKS BONDS CASH TOTAL ALLOC. PRIVATE EQUITY BONDS CASH TOTAL ALLOC.

Alliance Capital (S&P 500 Index) 2,217.1 - 8.2 2,225.3 Abbott Capital 77.9 - - 77.9

Alliance Capital (Russell 1000 Value Index) 129.0 - 0.6 129.7 Hamilton Lane 24.1 - - 24.1

Alliance Capital (Russell 1000 Growth Index) 947.4 - 2.1 949.6 PCA 69.8 - - 69.8

Chicago Equity (Enh. Index-Core) 311.7 - 3.3 315.0 Portfolio Advisors 929.6 - - 929.6

LA Capital (Enh. Index-Growth) 242.7 - 0.3 243.0 Aldus Equity 305.6 - - 305.6

Research Affiliates (Enh. Index-Value) 496.5 - 3.6 500.1 Stepstone Group 155.6 - - 155.6

Robeco (Value) 561.1 - 3.6 564.7 TOTAL PRIVATE EQUITY MGRS (10%) 1,562.7 - - 1,562.7 8.39%

FIS (Mgr of Emerging Mgrs) Domestic 89.4 - 2.7 92.1 Target Differential (1.61)% (298.8)

Core Equity Managers (23%) 4,994.9 - 24.5 5,019.5 26.97%

Target Differential 3.97% 738.1 REAL ESTATEAlliance Capital Global REIT 105.6 - 0.4 106.0

Frontier Capital Mgt (Growth) 654.8 - 6.4 661.2 Principal Global REIT 164.3 - 0.1 164.4

Daruma (Value) 493.7 - 32.5 526.2 Principal U.S. REIT 297.4 - 1.8 299.2

Attucks (Mgr of Emerging Mgrs) 108.9 - 3.1 112.0 Terminated REIT Managers 0.0 - 0.4 0.4

Small Cap. Equity Mgrs (6%) 1,257.4 - 41.9 1,299.3 6.98% REIT Managers (3.0%) 567.3 - 2.7 570.0 3.06%

Target Differential 0.98% 182.4 Target Differential 0.06% 11.6

REAL ESTATE COMMINGLED FUNDS SUMMARY

Brandes (Value) 901.5 - 94.1 995.6 Total Pooled Funds 829.1 - - 829.1 4.45%

Fisher (Core) 453.4 - 5.6 459.0 REAL ESTATE SEPARATE ACCT. SUMMARY BY MANAGER

Blackrock (Core Passive) 718.6 - 3.2 721.9 Heitman 223.3 - - 223.3

Baille Gifford (Growth) 543.8 - 9.6 553.4 Sentinel 257.3 - - 257.3

Boston Common (ESG) 28.8 - 0.4 29.3 Real Estate Equity Mgrs 480.5 - - 480.5 2.58%

Northern Trust (Int'l Small Cap Index) 337.0 - 3.8 340.7 TOTAL REAL ESTATE (10%) 1,876.9 - 2.7 1,879.6 10.10%FIS (Mgr of Emerging Mgrs) International 96.3 - 2.2 98.5 Target Differential 0.10% 18.2

Terminated Int'l Equity Managers 0.0 - 0.0 0.0

Int'l Equity Mgrs (16%) 3,079.4 - 119.0 3,198.4 17.18% COMMODITIESTarget Differential 1.18% 220.1 Alliance (Commodities, Public Equity) 308.9 - 0.8 309.7

Harding Loevner 314.4 4.2 318.6 Kleinwort Benson (Commodities, Public Equity) 96.1 - 1.1 97.2

Dimensional Fund Advisors 418.3 0.0 3.8 422.1 Mellon Capital (Commodities, Public Equity) 80.8 - 2.4 83.2

Terminated Int'l Emerg. Mkts. Mgrs. 0.0 - 0.4 0.4 PA (Commodities, Private Equity) 29.8 - - 29.8

Int'l Emerg. Mkts Mgrs (5.0%) 732.6 0.0 8.4 741.1 3.98% (Commodities, Futures) -

Target Differential (1.02)% (189.7) TOTAL COMMODITIES (5.0%) 515.6 - 4.3 519.9 2.79%

TOTAL EQUITIES MGRS (50.0%) 10,064.4 0.0 193.9 10,258.3 55.11% Target Differential (2.21)% (415.1)

Int'l Tax Reclaims - - 0.3 0.3

FIXED INCOME CASHNorthern Trust (Fixed Income Index) - 669.4 1.5 670.9 HOUSE ACCOUNTS

Reams Asset Mgmt. (Opportunistic) - 619.5 57.7 677.2 Tier 1 (Article 17) - - 1.1 1.1

LM Capital (Opportunistic) - 330.0 5.7 335.8 Tier 2 (Article 18) - - 227.9 227.9

Loomis Sayles (Long Duration) - 595.3 18.3 613.6 Tier 3 (Article 35) - - 28.9 28.9

CA Comm. Mort. Fund - 1.7 - 1.7 Tier 4 (New) - - 5.6 5.6

Bridgewater (TIPS) - 339.3 - 339.3 Tier 5 (New) - - 62.4 62.4

Reams Asset Mgmt. (Passive TIPS) - 511.7 0.2 512.0 Tier 6 (New) - - 2.8 2.8

Bridgewater Pure Alpha - 70.1 - 70.1 CASH SUMMARY

Core Bond Mgrs (19.0%) - 3,137.0 83.5 3,220.5 17.30% Unallocated Cash Reserve (1%) - - 328.8 328.8 1.77%

Target Differential (1.70)% (316.3) Target Differential 0.77% 142.7

MacKay Shields 1.9 448.4 22.3 472.6 472.6 Transition - - 0.0 0.0

High Yield Bond Mgrs (3.0%) 1.9 448.4 22.3 472.6 2.54%

Target Differential (0.46)% (85.8)

Reams Asset Mgmt. (Unconstrained) - 165.6 19.1 184.7 PRIVATE REAL

Payden & Rygel (Unconstrained) 185.4 1.9 187.3 EQUITY STOCKS BONDS ESTATE CASH TOTAL

Unconstrained Fixed Income (2.0%) 351.0 21.0 372.0 2.00% ACTUAL ASSET MIX

Target Differential (0.00)% (0.3) Current Month 515.6 1,562.7 10,066.3 3,936.4 1,876.9 656.8 18,614.8

2.77% 8.39% 54.08% 21.15% 10.08% 3.53% 100.00%

TOTAL FIXED INCOME MGRS (24.0%) 1.9 3,936.4 126.8 4,065.1 21.84% Last Month 544.4 1,520.2 10,237.2 4,093.2 1,914.9 631.1 18,941.0

Subtotals & totals may not sum up exactly due to rounding. % Change -5.29% 2.79% -1.67% -3.83% -1.98% 4.08% -1.72%

Data is unaudited.

Dollars expressed in Millions.

COMMODITIES

Portfolio as of June 30, 2015

TOTAL FUND

STOCKS / EQUITY / RE

4

Venture Capital Buy-out Special Situations Percentage

Total $745,612 22.18% $1,765,064 52.52% $850,328 25.30% 100.00%

Commitment Total $3,361,004

Total Commitment Contributions Remaining Commitment Percent Funded

Abbott $406,948,000 $392,361,000 $14,587,000 96.42%

Hamilton Lane $323,656,000 $311,216,000 $12,440,000 96.16%

Portfolio Advisors Legacy $265,710,000 $252,221,000 $13,489,000 94.92%

Portfolio Advisors Current $1,460,761,000 $607,844,000 $852,917,000 41.61%

PCA $194,203,000 $180,821,000 $13,382,000 93.11%

Stepstone Group $197,451,000 $163,566,000 $33,885,000 82.84%

Aldus Equity $512,274,000 $455,850,000 $56,424,000 88.99%

Total $3,361,003,000 $2,363,879,000 $997,124,000 70.33%

Unfunded Commitment $997,124,000

Source: BOARD OF FIRE AND POLICE PENSION COMMISSIONERS

Data as of Dec 31, 2014

Private Equity Commitment Summary

Private Equity Funding Summary

Total Fund Portfolio Allocation

26.9

7%

6.9

8%

17.1

8%

3.9

8%

17.3

0%

2.5

4%

2.0

0%

1.7

7%

10.1

0%

8.3

9%

2.7

9%

0.00%

5.00%

10.00%

15.00%

20.00%

25.00%

30.00%

35.00%

Core Equity (23%) Small Cap. Equity (6%) Int'l Equity (16%) Int'l Emerg. Mkts (5.0%) Core Bonds Iincluding

TIPS) (19.0%)

High Yield Bonds (3%) Unconstrained Fixed

Income (2.0%)

Cash (1.0%) Total RE (Including REITS)

(10.0%)

Private Equity (10.0%) Commodities Energy

(5.0%)

Actual Allocation, Target Allocation in parenthesis Over-allocated (Blue), Under-allocated (Red)

6.2

3.8

*Board approved ranges on 10/17/13

1.8

7.3

4.7

3.6

6.4

20.2

17.9

2.6

1.0

4.0

8.5

11.5

7.5

12.5

25.8

3.4

20.2

18.4

13.6

2.2

5

COMMINGLED FUNDS EQUITY POOLED CASH TOTAL ALLOC.

ABR Chesapeake Fund III NA 16.5 - 16.5

AEW Core NA 67.2 - 67.2

AEW Partners V NA 3.4 - 3.4

AEW Value Investors II NA 4.7 - 4.7

Almanac Securities Realty VII NA 3.0 - 3.0

BlackRock Retail Opportunity NA 0.0 - 0.0

Buchanan Fund IV NA 13.9 - 13.9

Calif Smart Growth IV NA 12.4 - 12.4

Capri Urban Investors NA 19.4 - 19.4

CIM Real Estate Fund III NA 43.9 - 43.9

CIM Urban REIT, LLC NA 36.4 - 36.4

CityView LA Urban Land Fund NA 11.6 - 11.6

Clarion Lion NA 75.3 - 75.3

Colony VIII NA 7.6 - 7.6

CPI Capital Europe (A NA 4.4 - 4.4

Forum Asian Realty II NA 6.1 - 6.1

Genesis Workforce Fund II NA 8.5 - 8.5

Guggenheim RE III NA 0.0 - 0.0

Hampshire Partners VI NA 1.3 - 1.3

Heitman Value Partners II NA 17.2 - 17.2

Heitman American Realty Trust (HART) NA 62.4 - 62.4

Jamestown Premier NA 71.9 - 71.9

Kennedy Wilson II NA 5.3 - 5.3

LaSalle Asia Opp. II NA 0.1 - 0.1

Legg Mason Chesapeake RE NA 0.4 - 0.4

Legg Mason II NA 12.5 - 12.5

Metlife Core Property NA 72.2 - 72.2

Noble Hospitality NA 23.7 - 23.7

Oaktree Capital A&B NA 0.0 - 0.0

Oaktree Capital RE Opp. II NA 0.0 - 0.0

Oaktree Capital RE Opp. III NA 3.0 - 3.0

Praedium Fund VII NA 1.6 - 1.6

Principal Green I NA 13.2 - 13.2

Prudential PRISA NA 70.7 - 70.7

Prudential PRISA II NA 9.9 - 9.9

Prudential PRISA III NA 12.6 - 12.6

Prudential RE Fund II NA 1.2 - 1.2

Rothschild Five Arrows Realty V (Almanac) NA 17.3 - 17.3

Savanna Real Estate Fund III NA 19.7 - 19.7

Starwood Distressed Opp IX NA 22.4 - 22.4

Standard Life Investments NA 14.0 - 14.0

Unico Partners I NA 25.5 - 25.5

Urdang Value-Added Fund (CenterSquare) NA 0.0 - 0.0

Urdang Value-Added Fund II (CenterSquare) NA 8.6 - 8.6

Value Enhancement IV (Ares) NA 0.0 - 0.0

Value Enhancement V (Ares) NA 8.0 - 8.0

Total 829.1 - 829.1 4.45%

SEPARATE ACCOUNT PROPERTIES EQUITY POOLED CASH TOTAL ALLOC.

Heitman - Galleria Palms Apts. 29.9 NA - 29.9

Heitman - 121 W. Chestnut 59.8 NA - 59.8

Heitman - Palm Valley Pavilions 53.8 NA - 53.8

Heitman - Woodland Plaza 23.4 NA - 23.4

Heitman - Twin Creeks Village 24.5 NA - 24.5

Heitman - Sea Isle, Inc. 31.9 NA - 31.9

Sentinel - Corridor Park Pointe 5.6 NA - 5.6

Sentinel - Riverplace 32.0 NA - 32.0

Sentinel - Windward Place Apts. 24.6 NA - 24.6

Sentinel - Jefferson Town Center Apts 34.0 NA - 34.0

Sentinel - Shoppes @ Broad Street 0.3 NA - 0.3

Sentinel - St. Louis Industrial 48.3 NA - 48.3

Sentinel - NorthPointe Exec. Park 23.7 NA - 23.7

Sentinel - Aerial Center Exec. Park 27.2 NA - 27.2

Sentinel (Urdang) - Cobalt Office Building 0.0 NA - 0.0

Sentinel (Urdang) - Shadeland Station 36.6 NA - 36.6

Sentinel (Urdang) - Exelon Building 24.9 NA - 24.9

Real Estate Managers Total Committed

Heitman 223.3

Sentinel 195.7

Sentinel (Urdang) 61.5

Total 480.5 2.58%

Real Estate Summary

6

Manager 1-month 3-month 1-year 3-years 5-years FYTD

Total Fund -1.37 % 0.25 % 3.56 % 11.32 % 11.40 % 3.56 %S & P 500 Index -1.94 % 0.28 % 7.42 % 17.31 % 17.34 % 7.42 %

Total Equity -1.60 % 0.70 % 3.74 % 15.52 % 14.40 % 3.74 %S & P 500 Index -1.94 % 0.28 % 7.42 % 17.31 % 17.34 % 7.42 %

Total Domestic Equity -1.25 % 0.19 % 7.28 % 18.10 % 17.53 % 7.28 %Russell 3000 Index -1.67 % 0.14 % 7.29 % 17.73 % 17.54 % 7.29 %

Total Large Cap Equity -1.99 % 0.17 % 7.51 % 17.83 % 17.58 % 7.51 %S & P 500 Index -1.94 % 0.28 % 7.42 % 17.31 % 17.34 % 7.42 %

Total Small Cap 1.69 % 0.21 % 5.99 % 19.30 % 17.22 % 5.99 %Russell 2000 Index 0.75 % 0.42 % 6.49 % 17.81 % 17.08 % 6.49 %

Total International Equity -2.15 % 1.57 % -2.06 % 11.23 % 8.78 % -2.06 %MSCI ACWI ex-US -2.75 % 0.72 % -4.85 % 9.92 % 8.23 % -4.85 %

Total International Developed Markets -2.14 % 1.79 % -1.42 % 13.03 % 9.84 % -1.42 %MSCI ACWI ex-US -2.75 % 0.72 % -4.85 % 9.92 % 8.23 % -4.85 %

Total International Emerging Markets -2.15 % 0.71 % -4.81 % 4.40 % 4.29 % -4.81 %MSCI Emerging Markets Index -2.52 % 0.82 % -4.77 % 4.08 % 4.03 % -4.77 %

Total Fixed Income -1.34 % -1.70 % 1.27 % 2.71 % 5.44 % 1.27 %Barclays Universal -1.12 % -1.40 % 1.61 % 2.33 % 3.81 % 1.61 %

Total Core Fixed Income -1.68 % -2.94 % 2.01 % 2.89 % 5.35 % 2.01 %Barclays Aggregate -1.09 % -1.68 % 1.86 % 1.83 % 3.35 % 1.86 %

Total High Yield -0.78 % 2.08 % 2.27 % 7.27 % 8.82 % 2.27 %LAFPP HY Benchmark1 -1.52 % -0.05 % -0.54 % 6.80 % 8.49 % -0.54 %

Total REITs -4.02 % -8.23 % 4.28 % 8.36 % 14.12 % 4.28 %LAFPP REIT Benchmark2 -4.15 % -8.34 % 2.88 % 6.94 % 13.27 % 2.88 %

Footnote:1 LAFPP HY Benchmark: CS HY Index thru 12/31/11 & BofA ML US HY Master II Cnst Index thereafter.

2 LAFPP REIT Benchmark: Dow Jones US Select RE Securities Index thru 12/31/13, 50% FTSE EPRA/NAREIT Global RE Index & 50% Dow Jones US Select RE Securities Index thereafter.

Preliminary Return Information as of June 30, 2015

7

PENSIONS DIVISION

(Data through June 30, 2015)

DISABILITY PENSIONS

*Claims filed include the following: Disability, Active Member Death, Dependent Child.

50 50 26

8

PENSIONS DIVISION

* Claims include new applications and reviews.

9

PENSIONS DIVISION

*Claims include the following: Disability, Active Member Death, Dependent Child.

*Claims include the following: Disability, Active Member Death, Dependent Child. Months with zero (0) indicate no claims presented to the Board that month.

36 35 13

10

PENSIONS DIVISION

DROP ENTRIES/EXITS

DROP PARTICIPATION

11

PENSIONS DIVISION

SERVICE PENSIONS Current

Month Fiscal Year

To Date 12 Month

Moving Avg. Service Pensions by Effective Date 6 77 6

SURVIVORSHIP PENSIONS Current

Month Fiscal Year

To Date 12 Month

Moving Avg. Surviving Spouse/Domestic Partner Pension Applications Processed 15 176* 15 Survivor Benefit Purchase Program 0 4 1 Total Surviving Spouse/DP Applications Processed and Survivor Benefit Purchase Program Granted 15 180

*Includes three applications not captured in the previous month’s total. ACTIVE MEMBER SERVICES Refund of Contributions (Number Leaving Without Vesting)

Current Month

Fiscal Year To Date

12 Month Moving Avg.

Fire 0 7 1 Police 2 70 6 Harbor 0 3 0 Completed Basic Training Purchases Fire 12 99 8 Police 50 434 36 Harbor 0 0 0 Pension Contribution Adjustments (Due to Conversion of SK to IOD Time)

0

142

12

Public Service Purchases (PSP) Completed Purchases

0

12

1

Avg. Years of Service (YOS) Purchased N/A 2.6 2.6 Avg. Cost per YOS Purchased N/A $54,306 $54,306 OPS Service Purchases Purchases Initiated 6 17 6 Completed Purchases 9 13 4

OUTREACH ACTIVITIES Date Type of Outreach Number of

Participants Tier

June 3, 2015 Information Table: LARFPA Annual BBQ – Grace Simons Lodge 25 multiple

June 24, 2015 Financial Planning Education Seminar: Late-Career – Grace Simons Lodge

44 plus guests 3 & 4

Upcoming Events

July 6, 2015 New Recruit Talk: LAPD Graduates – Westchester ARTC TBD 6

July 8, 2015 Financial Planning Education Seminar: Late-Career – Grace Simons Lodge TBD 5

12

PENSIONS DIVISION

Outreach Activity Totals Current Month Fiscal Year to Date

Members Reached 69 1,905 -# of Recruit Talks 0 11 -# of Financial Planning Education Seminars 1 11 -# of Other Outreach Events 1 28

Note: The number of participants for “Information Table” events is an estimate. Staff is available to answer questions, check personal information and collect forms at these events. MEDICAL & DENTAL TRANSACTIONS June 2015 (PPE June 30, 2015) Current Month* Fiscal YTD* Last 12 Mos* Total Subsidies Paid $8,913,552 $101,732,282 $101,732,282 Total Medicare Part B Reimbursements Paid $773,008 $9,504,448 $9,504,448 *Includes Quarterly HIPR Payment(s)

LEGISLATION TRACKING

Bill No. / Initiative (Version)

Author Summary Status

State Legislation SJR-1 (1/12/15 - amended)

Beall and Pavley

Senate Joint Resolution No. 1 – Relative to Social Security. This measure would request the President and the Congress of the United States to pass legislation repealing the Windfall Elimination Provision (WEP) and the Government Pension Offset (GPO) of the Social Security Act. For details on WEP and GPO, please see the summary provided under “Federal Legislation” on H.R. 973 and H.R. 711.

SJR-1: 6/24/15 – Ordered to third reading, possibly for 7/1/15.

AB 241 (4/29/15)

Gordon Bankruptcy: retired employees: disclosure of names and mailing addresses. AB 241 would require a local public entity to provide the names and mailing addresses of its retired employees and beneficiaries receiving a retirement benefit to an organization representing those retired employees in certain instances leading up to and/or when the local public entity files for bankruptcy. Upon written request of a retiree or beneficiary, the local public entity shall not disclose said information. While names and addresses of public employees are exempted under the California Public Records Act, AB 241 would require the disclosure of such information to a specified organization only in the narrow instance of a local public entity’s bankruptcy proceedings. If an organization used this information for any other purpose, it would be assessed a civil penalty of $25,000.

AB 241: 5/20/15 – Hearing postponed by Com. on Appropriations.

13

PENSIONS DIVISION



State Legislation (cont’d) AG 15-0033 6/4/15

Chuck Reed Carl DeMaio Stephanie Gomes Bill Kampe Pat Morris Tom Tait

Voter Empowerment Act of 2016 On June 4, 2015, the California Coalition, a bi-partisan group of current and former local government officials, filed a pension reform initiative with the Office of the Attorney General. The “Voter Empowerment Act of 2016” would change how California state and local government employee compensation and retirement benefits are determined. The key provisions are as follows: All government employees: • Enhancements to compensation and retirement

benefits for government employees will require voter approval.*

• Government agencies and retirement boards must fully and faithfully implement voter-approved initiatives concerning government employee compensation and retirement benefits. − Impediments, delays and challenges of said

initiatives will be prohibited. • Successor labor agreements, renewals or extensions

entered into after the effective date of this Act will require voter approval.*

• Disability and death benefits will not be modified or limited by this Act.

*Further analysis is required to determine the applicability of these provisions. New government employees hired on and after January 1, 2019: • Automatic enrollment in a Defined Contribution

retirement plan; membership in a Defined Benefit retirement plan will require voter approval.

• Employer contribution shall not be more than 50 percent of the total cost of employee retirement benefits; more than 50 percent will require voter approval.

Current government retirees and beneficiaries: No impact; however, any new benefits or enhancements will require voter approval.

AG 15-0033: 6/4/15 – The initiative was submitted to the Office of the Attorney General of California, where it awaits an official ballot title and summary. It is anticipated that on August 11, 2015, the proponents will be given the approval to begin the 180-day process of collecting the 585,407 signatures required to qualify the initiative for the November 8, 2016 ballot.

14

PENSIONS DIVISION



Federal Legislation – 114th Congress (2015-2016) H.R. 824 (2/10/15) S. 435 (2/10/15)

Weber Cruz

State Marriage Defense Act of 2015 The “State Marriage Defense Act of 2015” seeks to ensure respect for State regulation of marriage. This legislation was proposed as a result of the Supreme Court’s June 2013 decision to overturn section 3 of the Defense of Marriage Act and more recently, the Court’s January 2015 decision to hear a case to determine whether the U.S. Constitution guarantees all Americans the right to enter into same-sex marriage. Specifically, H.R. 824 / S. 435 would prohibit the federal government from applying its own definition of marriage onto states and allow states to adopt their own definitions of marriage.

H.R. 824: 3/16/15 – Referred to the Subcom. on the Constitution and Civil Justice. S. 435: 2/10/15 – Referred to the Com. on the Judiciary. These bills are re-introductions of prior legislation.

H.R. 1404 (3/17/15) S. 753 (3/17/15)

Kind Murray

Social Security and Marriage Equality Act The “Social Security and Marriage Equality Act” was proposed as a result of the Supreme Court’s June 2013 decision to overturn section 3 of the Defense of Marriage Act. H.R. 1404 / S. 753 would amend the Social Security Act to ensure that all married individuals, regardless of their state of residency or where they were validly married, receive equal treatment under the Social Security program when they apply for spousal or survivor benefits. The amendments would apply to all final determinations of family status made after June 26, 2013.

H.R. 1404: 3/17/15 – Referred to the Com. on Ways and Means. S. 753: 3/17/15 – Referred to the Com. on Finance. These bills are re-introductions of prior legislation.

15

PENSIONS DIVISION



Federal Legislation (cont’d) H.R. 973 (2/13/15) H.R. 711 (2/4/15)

Davis Brady

Social Security Fairness Act of 2015 – H.R. 973 Equal Treatment of Public Servants Act of 2015 – H.R. 711 The “Social Security Fairness Act of 2015” and the “Equal Treatment of Public Servants Act of 2015” address the Windfall Elimination Provision (WEP) and the Government Pension Offset (GPO). WEP and GPO impact a government worker who is entitled to pension benefits from employment not covered by Social Security. Specifically, WEP reduces the Social Security benefit earned by the worker, while GPO reduces the benefit the worker would receive as a spouse. H.R. 973 seeks to repeal WEP and GPO and would apply to monthly insurance benefits payable after December 2015. H.R. 711 seeks to replace WEP with a new formula that would base the government worker’s Social Security benefit on his/her actual contributions and work history. The proposed formula would apply to monthly insurance benefits payable after December 2016.

H.R. 973: 2/13/15 – Referred to the Com. on Ways and Means. H.R. 711: 2/4/15 – Referred to the Com. on Ways and Means. These bills are re-introductions of prior legislation.

H.R. 606 (1/28/15) S. 322 (1/29/15)

Paulsen Ayotte

Don’t Tax Our Fallen Public Safety Heroes Act Although federal survivor benefits are exempt from federal income tax, the law is ambiguous concerning the taxation of similar state-based survivor benefits. The “Don’t Tax Our Fallen Public Safety Heroes Act” seeks to clarify that federal and state death benefits should be treated the same and are exempt from federal income tax. Specifically, these bills would amend the Internal Revenue Code to exclude the following compensation from the gross income of public safety officers and their dependents: (1) amounts paid under the Public Safety Officers’ Death Benefits program and (2) amounts paid under any state program providing compensation to surviving dependents of a public safety officer whose death is the direct and proximate result of a personal injury sustained in the line of duty.

H.R. 606: 5/22/15 – Signed by the President and became Public Law No: 114-04. S. 322: 5/22/15 – On 1/29/15, it was referred to the Com. on Finance – for further action, see H.R. 606. These bills are re-introductions of prior legislation.

16

PENSIONS DIVISION



Federal Legislation (cont’d) H.R. 879 (2/11/15)

Guinta Ax the Tax on Middle Class Americans’ Health Plans Act Effective for taxable years beginning after 2017, H.R. 879 would repeal the excise tax on the excess benefit portion of high-cost employer-sponsored health care plans. In addition, the reporting requirement for such plans would be repealed for calendar years beginning after 2014. This excise tax is one of the last Affordable Care Act provisions to be implemented and is scheduled to take effect in 2018. It is commonly referred to as the “Cadillac Tax” because it will assess a 40% tax on benefit-rich health plans that exceed an established annual cost. The threshold amounts for 2018 are set at $10,200 for individual coverage and $27,500 for self and spouse or family coverage. For retirees not entitled to Medicare benefits and to employees engaged in high-risk professions (i.e., law enforcement officers, employees in fire protection activities, paramedics and first-responders), the limits increase by $1,650 and $3,450, respectively. The high-risk profession exception would also apply to anyone who retires from such a profession, having satisfied the requirements for at least 20 years of his/her employment. The thresholds will be adjusted annually for inflation.

H.R. 879: 2/11/15 – Referred to the Com. on Ways and Means.

H.R. 2146 (6/18/15)

Reichert Defending Public Safety Employees’ Retirement Act Among other things, H.R. 2146 would allow retired federal law enforcement officers and firefighters age 50 and older with at least 20 years of service to withdraw money from their retirement funds without any tax penalty. Typically there is a 10 percent tax penalty on retirement funds withdrawn before the age of 59 ½. In addition to placing federal public safety officers on par with their state and local counterparts, this legislation would also expand the exemption to distributions from defined contribution plans and other types of governmental plans – not just distributions from defined benefit plans. Therefore, this exemption would apply to LAFPP members who exit the DROP program at the age of 50 and who elect to roll over all or a portion of their DROP account balance to the City’s Deferred Compensation (457) Plan. As a result, the member would not have to pay the 10 percent tax penalty on the DROP money subsequently withdrawn from the 457 Plan before age 59 ½. This bill would apply to distributions made after December 31, 2015.

H.R. 2146: 6/29/15 – This bill was signed by the President and became Public Law No: 114-26.

17

PENSIONS DIVISION



Federal Legislation (cont’d) H.R. 1476 (3/19/15)

Babin

No Taxpayer Bailouts for Unsustainable State and Local Pensions Act H.R. 1476 would prohibit the Secretary of the Treasury and the Board of Governors of the Federal Reserve System from providing bailouts or other financial assistance to a state or local government pension system.

H.R. 1476: 3/19/15 – Referred to the Com. on Education & the Workforce, Com. on Financial Services.

UPDATED PROJECTS

IRC OPERATIONAL COMPLIANCE AUDIT Staff began working with The Segal Company, our IRC operational compliance auditor, in late January/early February. Staff provided a large number of documents to Segal in early February, including Summary Plan Descriptions for the various tiers, desk manuals, policies and procedures, and pertinent Charter/Administrative Code sections. Segal conducted onsite interviews with key staff members on March 23 and 24. The final audit report is expected to be presented to the Board in July.

[UPDATE: The draft report was received from Segal on June 12. The final audit report is expected to be presented to the Board in September.] DOCUMENT IMAGING SYSTEM As part of the Strategic Plan, the Department has been working with its vendor, ViaTRON, to scan onsite historical files (“backfile documents”) into our document imaging system, Documentum. A total of 581 boxes were sent to ViaTRON for backfile conversion. This project was not completed by June 30, 2014 as originally planned due to difficulties encountered in scanning LAFPP’s microfiche, as well as issues with the quality of ViaTRON’s work. Staff now estimates the scanning of onsite backfile documents should be completed by June 30, 2015. On September 23, 2014, the first batch of reprocessed data was received from ViaTRON. Due to various errors found during Quality Assurance (QA) testing, it was determined that all records and images would need to go through an intensive Quality Assurance testing by LAFPP. ViaTRON will also create a duplicate scan, at no additional cost to LAFPP, of each box which will be retained on LAFPP’s server in the event staff finds an error or missed pages in any of the original scans. In order for the project to be completed by June 30, 2015, five (5) additional temporary staff (Relief Retirement Workers) were authorized to assist with the intensive QA testing. All 5 temporary staff were hired as of January 2015.

18

PENSIONS DIVISION

As QA progressed, staff continued to find roughly two documents per box that had either unscanned pages or images that were cut off or distorted. Staff decided to correct these minor errors in-house after the batches are imported into the production server. This approach will be less labor-intensive for staff and may pose less of a risk to the project’s timeline. Staff is keeping track of pages corrected and will deduct them from any future invoices submitted by ViaTRON. Major errors will still be sent back to ViaTRON for correction. ViaTRON completed processing the microfilm documents and delivered the data to LAFPP in May. This completes the data delivery for all documents scanned as part of the onsite backfile conversion. Staff began QA testing on microfiche documents scanned by ViaTRON in January and found microfiche with unscanned pages and image quality issues. Staff analyzed the issues regarding LAFPP’s microfiche documents and determined it will not have ViaTRON reprocess the microfiche documents. Instead, staff will maintain one set of original microfiche as a backup. Staff will also purchase a new microfilm and microfiche scanner to replace LAFPP’s old microfiche and microfilm viewers. The new scanner will be able to plug into LAFPP’s network, allowing staff to make corrections to improperly scanned microfiche as needed. [UPDATE: By June 30th, Staff had completed QA testing on all but two boxes. These boxes were at ViaTRON’s facility undergoing the duplicate scan ViaTRON is performing on all of LAFPP’s paper documents. These boxes are due to be returned by mid-July, with QA testing occurring shortly thereafter. This will complete the QA testing portion of the project. Staff is working to correct the scanning errors identified in the paper documents. It is anticipated all errors will be corrected by the end of September, thus completing the backfile conversion of onsite documents.]

19

PENSIONS DIVISION

WEBSITE ENHANCEMENTS Staff has been working with the consultant, The Cherry Hill Company, to enhance our website with a responsive design. The current design does not adjust to smaller screen sizes when viewing the site on various mobile devices. A responsive design will ensure that all of the pages within LAFPP.com will look great to the user no matter the size device they are using – desktop computer, tablet, or smart phone. This added flexibility gives way to easy reading and navigation with minimal resizing, panning and scrolling, ultimately providing an optimal viewing experience for all. There are also internal enhancements to the site that allow staff to make quicker and easier updates. [UPDATE: The enhanced LAFPP.com was launched on June 4, 2015. Staff will continue to review and make improvements as necessary.] PENSION PERSPECTIVES – ACTIVE/DROP MEMBERS Staff began drafting the newsletter for Active and DROP members. This issue will include articles on the 2015 COLA, Beneficiary Designation and Survivor Benefits, Board Member Elections, and more. The target distribution date is May 2015. [UPDATE: The newsletter was emailed to all Active and DROP members on June 12, 2015.]

UNCHANGED PROJECTS

PENSION PERSPECTIVES – RETIRED/DROP MEMBERS Staff began drafting the newsletter for Retired and DROP members. This issue will include articles on the 2015 COLA, Health Subsidy Information, BPP Web Passport and more. The target distribution date is August 2015.

20

ADMINISTRATIVE OPERATIONS DIVISION

UPDATED PROJECTS MEMBER SYSTEM CONVERSION ASSESSMENT & LIFECYCLE REVIEW Meetings with impacted section managers and subject matter experts were held to gather and confirm the detailed requirements for a new Pension Administration System (PAS). These requirements were included in the Request for Proposal (RFP) for a replacement PAS. The RFP was released as scheduled and five vendor proposals were received by the due date. The top three proposers were identified during the initial evaluation process and after scoring the reference checks, product demonstrations, and cost proposals, the two top finalists were requested to submit a Best and Final Offer. [UPDATE: Contract negotiations with Xerox State and Local Solutions, Inc. have concluded. The Board signed the contract on 6/18/2015. This project has been completed.] BUSINESS CONTINUITY PLANNING/DISASTER RECOVERY Due to the build-out schedule of the new headquarters, the Business Continuity Planning/Disaster Recovery project has been divided into three separate implementations; production storage system upgrade, network upgrade, and virtualized disaster recovery. The production storage system upgrade has been completed. The network upgrade will be part of the headquarters build-out. The virtualized disaster recovery is currently being implemented and is expected to be completed by June 30, 2015. [UPDATE: Internet bandwidth upgrade has been completed. Ongoing data synchronization is currently meeting expectation. Data validation and testing is scheduled for July 15, 2015. The project is expected to be completed by August 2015 due to the bandwidth upgrade delay.]

UNCHANGED PROJECTS

OPEN DATA

On December 18, 2013, Mayor Garcetti issued Executive Directive No. 3, directing City departments to make data freely available for use by the public. Separately, the Controller’s Office created its own open data portal (ControlPanelLA) in October 2013. As such, staff have been working with both the Mayor’s Office and Controller’s Office to provide data for these respective open data initiatives. The Mayor’s Office is focused on publishing data commonly requested through public records requests and produced through our operations, while the Controller’s Office is focused on the monthly financial reporting. While still being developed, the Mayor’s Open Data may include monthly, quarterly and annual updates such as: a summary of the investment portfolio, the investment allocation, disability

21

ADMINISTRATIVE OPERATIONS DIVISION

application processing times, and the total pension roll and number of retired members. STRATEGIC PLANNING The Board and Staff have completed the Fiscal Year (FY) 2015-18 triennial strategic planning process which included Strategic Planning sessions to review our Mission, Goals, and develop LAFPP Vision and Values. On February 5, 2015, the Board approved a new 2015-18 Three Year Strategic Plan. On March 19, 2015, the Board approved the FY 2015-16 Proposed Annual Business Plan which includes twelve specific projects, including five ongoing projects and seven new projects, in support of the Strategic Plan. On June 18, 2015, staff will present the FY 2015-16 Final Budget for Board approval along with the FY 2015-16 Final Business Plan, which will include very minimal changes to more accurately reflect current project status. PERFORMANCE METRICS As part of the Mayor’s “Back to Basics” philosophy, the Mayor has directed departments to submit performance metrics that will measure the effectiveness of the departments in key areas. Monthly, staff submits performance metrics to Mayoral staff including data in following areas: payment of pension payments; disability applications; customer satisfaction; contractor disclosure; and investment benchmarks. Staff has also developed additional internal performance metrics for 2015-16 which will be used in house to track and monitor productivity, performance and error rates, and make changes where necessary. LAFPP has been consistently providing the Mayor’s Office with monthly performance metrics and business plan project updates, which will continue in FY 2015-16. In addition, the General Manager is expanding the use of performance metrics to better measure and track performance and assist management decision making, taking into consideration resource requirements needed to compile and analyze the data.

22

DEPARTMENT OF FIRE AND POLICE PENSIONSBUDGET TO ACTUAL - RECEIPTS AND EXPENSESAs of June 30, 2015 (100% of year)

VARIANCEACTUAL DIFFERENCE %

YEAR YEAR END (UNDER)/OVER (UNDER)/OVER

BUDGET TO DATE PROJECTIONS PROJECTED PROJECTED

RECEIPTS General Fund 624,423,315$ 624,423,315$ 624,423,315$ -$ 0%Special Fund (Harbor) 4,385,448 4,385,448 4,385,448 -$ 0%Excess Benefit Plan (1) 1,138,990 1,138,990 1,138,990 -$ 0%Member Contributions 133,123,121 126,178,221 130,000,000 3,123,121$ 2%Earnings on Investments 343,559,000 393,232,211 400,000,000 (56,441,000)$ -16%Miscellaneous (2) 1,000,000 4,109,157 4,109,157 (3,109,157)$ -311% Total Receipts 1,107,629,874$ 1,153,467,342$ 1,164,056,909$ (56,427,036)$ -5.1%

EXPENSESService Pensions 565,000,000$ 553,831,641$ 553,831,641$ 11,168,359$ 2%Service Pensions - DROP payout 135,050,000 125,112,013 125,112,013 9,937,987$ 7%Disability Pensions 120,000,000 114,450,822 114,450,822 5,549,178$ 5%Surviving Spouse Pensions 120,000,000 116,830,510 116,830,510 3,169,490$ 3%Minor/Dependent Pensions 2,600,000 2,238,010 2,238,010 361,990$ 14%Refund of Contributions 3,650,000 3,309,020 3,309,020 340,980$ 9%Health Insurance Subsidy 102,000,000 96,895,554 96,895,554 5,104,446$ 5%Dental Insurance Subsidy 4,000,000 3,742,561 3,742,561 257,439$ 6%Medicare Reimbursement 10,500,000 9,477,016 9,477,016 1,022,984$ 10%Health Insurance Reimbursement 1,300,000 987,409 987,409 312,591$ 24%Investment Management Expense (3) 84,242,390 23,877,511 80,822,900$ 3,419,490$ 4%Administrative Expense (4) 20,642,159 19,569,727 19,569,727$ 1,072,432$ 5%

Total Expenses 1,168,984,549$ 1,070,321,794$ 1,127,267,183$ 41,717,366$ 4%

RECEIPTS OVER EXPENSES (61,354,675)$ 83,145,548$

YTDCURRENT MOVING

MONTH AVERAGE

PENSION PAYROLL 84,351,588$ 85,345,876$

(1) Represents the City of Los Angeles General Fund earmarked to pay excess benefits incldng associated administrative costs in compliance with IRC Section 415.

In FY 2015-16, funds totaling $587,990 were re-appropriated from prior-years' available funds in addition to original budget of $551,000 for Excess Benefits Plan.

(2) Represents receipts from purchase of prior years' lost service time and recovery of prior years' pension overpayment.

(3) Total 'Year to Date' Investment Expense not finalized until after fiscal year end closing.

(4) Reflects 'Year to Date' commitments (encumbrances & expenses).

23

DEPARTMENT OF FIRE AND POLICE PENSIONSBUDGET TO ACTUAL - ADMINISTRATIVE AND INVESTMENT MANAGEMENT EXPENSESAs of June 30, 2015 (100% of year)

ADMINISTRATIVE EXPENSE (A) (B) (C) (D) (E) (F) (G) (H)(A + B = C) (C - D = E) (C - F = G) (G / C = H)

YR END DIFFERENCEADOPTED BUDGET ADJUSTED YTD TOTAL REMAINING PROJECTED (UNDER)/OVER VARIANCE

ACCOUNT TITLE BUDGET CHANGES BUDGET COMMITTED (3) BALANCE EXP PROJECTED % (4)

Salaries-General (1) 10,500,000 (50,000) 10,450,000 10,253,228 196,772 10,253,228 196,772 2%

Salaries-As-Needed (1) 70,000 65,000 135,000 98,522 36,478 98,522 36,478 27%

Overtime (1) 53,400 50,000 103,400 99,530 3,870 99,530 3,870 4%

Printing & Binding 60,100 60,100 59,253 847 59,253 847 1%

Travel 159,255 159,255 85,208 74,047 85,208 74,047 46%

Transportation (1) 6,000 6,000 6,000 - 6,000 - 0%

Contractual Services 4,070,086 40,000 4,110,086 3,984,638 125,448 3,984,638 125,448 3%

Medical Services 200,000 200,000 200,000 - 200,000 - 0%

Health Insurance 1,200,000 1,200,000 1,100,199 99,801 1,100,199 99,801 8%

Dental Insurance 55,000 55,000 48,045 6,955 48,045 6,955 13%

Other Employee Benefits 35,000 35,000 35,000 (0) 35,000 - 0%

Retirement Contribution 2,787,000 2,787,000 2,783,865 3,135 2,783,865 3,135 0%

Medicare Contribution 130,000 130,000 130,000 - 130,000 - 0%

Office & Administrative 644,318 644,318 574,108 70,210 574,108 70,210 11%

Tuition Reimbursement 20,000 20,000 2,137 17,863 2,137 17,863 89%

Election 35,000 35,000 29,833 5,167 29,833 5,167 15%

Furniture, Office & Tech 270,000 270,000 80,161 189,839 80,161 189,839 70%

Unappropriated Balance 347,000 (105,000) 242,000 - 242,000 242,000 n/a

TOTAL ADMINISTRATIVE EXPENSE 20,642,159$ -$ 20,642,159$ 19,569,727$ 1,072,432$ 19,569,727$ 1,072,432$ 5%

TOTAL INVESTMENT MANAGEMENT EXPENSE (2) 84,242,390$ -$ 84,242,390$ 23,877,511$ $60,364,879 80,822,900$ 3,419,490$ 4%

(1) Up to Pay Period 26/26A ending June 30th.

(2) Total 'Year to Date' Investment Expense not finalized until after fiscal year end closing.

(3) Reflects 'Year to Date' commitments (encumbrances & expenses). (4) Percentage difference between projected expenditures and the adusted budget.

24

DEPARTMENT OF FIRE AND POLICE PENSIONS Active, Expired, and Upcoming Contracts

June 30, 2015

Start Date Expiration Date

New Search Date

Vendor/ Candidate

Finalist Date

Contract Award / Renewal

Date

SEARCHEmerging Investment Manager - Large Cap Domestic Equity (Direct Hire) tbd tbd 11/20/14 11/20/14 07/02/15

Finalist firms approved by Board to hire two firms: Affinity I.A., OakBrook Investments, Inc., Poplar Forest Capital LLC, Redwood Investments, LLC, and TWIN Capital Management, Inc.

SEARCH Enhanced Index Commodity Manager 07/01/15 tbd 08/21/14 08/21/14 03/05/15

Firms approved by Board: Goldman Sachs Asset Management - Enhanced Index Manager and Gresham Investment Management - Active Constrained Manager. Contract currently under negotiation/review.

SEARCHEmerging Investment Managers - Domestic Fixed Income (Direct Hire) tbd tbd 06/05/14 06/05/14 06/18/15 tbd

Firms approved by Board: GIA Partners, LLC and Semper Capital Management, L.P.

SEARCHEmerging Investment Managers - Small Cap and Micro-Cap (Direct Hire) tbd tbd 06/05/14 06/05/14 06/25/15

Firms approved by Board: Channing Capital Management (SCV), Granite Investment Partners (MC), and PHOCAS Financial Corporation (SCV).

553PENFrontier Capital Management Company, LLC (Domestic Equity) 07/01/12 06/30/15

New Contract No. 624PEN, effective 07/01/15.

556PEN LM Capital Group, LLC (Fixed Income) 09/01/12 08/31/15 06/01/15

Due diligence response received 05/15/15. Staff recommendation to Board approved on 07/02/15. New contract pending negotiation and execution.

558PENBoston Common Asset Management, LLC (International Equity Emerging Manager) 10/01/12 09/30/15 07/01/15

Due diligence response received 06/19/15. Staff recommendation to Board scheduled for 08/06/15.

559PEN Loomis, Sayles & Co. LP (Fixed Income) 10/01/12 09/30/15 07/01/15 Due diligence response due 07/17/15.

562PEN Northern Trust Investments, Inc. (Fixed Income) 12/01/12 11/30/15

563PENScout Investments, Inc. - Reams Asset Management Division (Fixed Income) 12/01/12 11/30/15

566PEN Glass, Lewis, & Co., LLC (Proxy Voting Services) 01/01/13 12/31/15Staff recommendation to Board scheduled for 11/05/15.

567PENHeitman Capital Management, LLC (Real Estate Separate Account) 01/01/13 12/31/15

Staff recommendation to Board scheduled for 11/05/15.

565PENNorthern Trust Investments, Inc. (International Equity) 01/01/13 12/31/15


568PENSentinel Trust Company (Real Estate Separate Account) 01/01/13 12/31/15


569PEN R.V. Kuhns & Associates, Inc. (General Consultant) 03/18/13 02/28/16

584PEN Portfolio Advisors, LLC (Private Equity - Specialized) 04/01/13 03/31/16

570PEN Portfolio Advisors, LLC (Private Equity) 04/01/13 03/31/16

578PENBrandes Investment Partners, LP (International Equity) 08/01/13 07/31/16

576PEN Daruma Asset Management, Inc. (Domestic Equity) 08/01/13 07/31/16

577PEN Fisher Asset Management, LLC (International Equity) 08/01/13 07/31/16

583PENScout Investments, Inc. - Reams Asset Management Division (Fixed Income - TIPS) 09/01/13 08/31/16

582PEN AllianceBernstein, LP (Commodities) 10/01/13 09/30/16

580PEN Northern Trust Company (Custodian Bank) 10/01/13 09/30/16

586PENRobeco Investment Management, Inc. (Boston Partners) (Domestic Equity) 11/01/13 10/31/16

589PENPrincipal Global Investors, LLC (Global REIT Manager) 12/01/13 11/30/16

587PEN Principal Global Investors, LLC (U.S. REIT Manager) 12/01/13 11/30/16

590PEN AllianceBernstein, LP (Domestic Equity) 01/01/14 12/31/16

585PEN Harding Loevner (International Emerging Markets) 02/01/14 01/31/17

Market

Cessation Start Date1

Board Authorization Date

Comments

INVESTMENTS

Contract Vendor / Services

Contract Term

25


June 30, 2015


New Search Date

Vendor/ Candidate

Finalist Date


Date

Market



CommentsContract Vendor / Services

Contract Term

535PEN The Townsend Group (Real Estate Consultant) 02/01/14 01/31/17

595PENFIS Group, Inc. (International Manager of Emerging Managers) 07/01/14 06/30/17

596PENMacKay Shields, LLC (Fixed Income - High Yield Bond) 07/01/14 06/30/17

594PENAttucks Asset Management (Domestic Equity - Manager of Emerging Managers - Small Cap) 08/01/14 07/31/17

598PEN Chicago Equity Partners LLC (Domestic Equity) 08/01/14 07/31/17

599PENLos Angeles Capital Management and Equity Research, Inc. (Domestic Equity) 08/01/14 07/31/17

602PENPayden & Rygel (Unconstrained Fixed Income Manager) 08/01/14 07/31/17

600PEN Research Affiliates LLC (Domestic Equity) 08/01/14 07/31/17

601PENScout Investments, Inc. - Reams Asset Management Division (Unconstrained Fixed Income Manager) 08/01/14 07/31/17

604PENKleinwort Benson Investors (Commodities Active Equity Manager) 09/01/14 08/31/17

605PEN Mellon Capital (Commodities Active Equity Manager) 09/01/14 08/31/17

613PENDimensional Fund Advisors LP (International Emerging Markets) 01/01/15 12/31/17

641PENBlackRock Institutional Trust Company (International Equity) 02/01/15 01/31/18

615PEN Baillie Gifford Overseas Limited (International Equity) 03/01/15 02/28/18 01/15/15

608PENIron Mountain Secure Shredding, Inc. (Secure Document Shredding) 07/01/14 06/30/15 Contract pending execution.

65515 ACP Second Street, LLC (Building Lease) 12/15/86 04/14/17

RFPFinancial Planning Education and Counseling Services 06/04/15

606PEN Something Special (Catering) 07/11/14 07/10/15

Staff recommendation to Board approved on 07/02/15. New contract pending execution.

560PENCambridge Financial Partners (Financial Planning Education Consultant) 11/15/12 11/14/15

571PEN FiftyX, Inc. (Graphic Design) 03/15/13 03/14/16

607PEN The Cherry Hill (Website Design and Support) 10/01/14 09/30/17

RFP Investigative Services Consultant 03/05/15 RFP released on 05/15/15.

597PEN U.S. Legal Support (Court Reporting) 07/01/14 06/30/15New contract No. 623PEN, effective 07/01/15.

593PEN R.V. Kuhns & Associates, Inc. (Fee Recalculation) 04/01/14 06/30/1501/15/15

555PEN Brown Armstrong Accountancy Corporation 07/19/12 07/18/16 05/07/15

NEW Steptoe & Johnson LLP (Tax Services) 06/18/15 Contract currently under negotiation.

-Berstein Liebhard (Securities Litigation/Monitoring Services) 03/15/08 03/14/11

C-113252Kaplan Fox & Kilsheimer, LLP (Securities Litigation/Monitoring Services) 03/15/08 03/14/11

-Kessler Topaz Meltzer & Check (Securities Litigation/Monitoring Services) 03/15/08 03/14/11

-Robbins Geller Rudman & Dowd (Securities Litigation/Monitoring Services) 03/15/08 03/14/11

C-122059 Ice Miller, LLP (Tax Services) 06/16/12 06/15/15 06/18/15 Contract currently under negotiation.

C-123109 Foster Pepper, PLLC (Investment Services) 06/16/13 06/15/16

C-123047 Nossaman, LLP (Investment Services) 08/01/13 07/31/16

COMMUNICATIONS AND SPECIAL PROJECTS

DISABILITY PENSION

INTERNAL AUDIT

LEGAL SERVICES

ADMINISTRATIVE SERVICES

26


June 30, 2015


New Search Date

Vendor/ Candidate

Finalist Date


Date

Market



CommentsContract Vendor / Services

Contract Term

C-123757 Reed Smith, LLP (Fiduciary Services) 10/01/13 09/30/16

C-125199 Nossaman, LLP (Fiduciary Services) 11/10/14 11/09/17

C-123569 Nossaman, LLP (Legal Representation) 09/15/13until

completion

C-121678 Reed Smith, LLP (Legal Representation) 08/02/12until

completion

Los Angeles City Employee Retirement System (Health and Dental Plan Subgroups) 08/22/11 07/31/14 Contract currently under negotiation.

United Firefighters of Los Angeles City (Medical and Dental Insurance Administration) 09/01/11 08/31/14 Contract currently under negotiation.

Los Angeles Firemen's Relief Association (Medical Insurance Administration) 07/01/14 06/30/17 04/16/15

Los Angeles Police Relief Association (Medical and Dental Insurance Administration) 07/01/14 06/30/17 03/19/15

Los Angeles Police Protective League (Dental Insurance Administration) 08/01/14 07/31/17

574PEN Keenan & Associates, Inc. (Health Consulting Services) 03/01/13 02/29/16

573PEN ViaTRON Systems, Inc. 03/07/13 03/06/16

564PENThe Segal Company (Western States), Inc. (Actuarial Consulting Services) 07/01/12 06/30/15 03/19/15

New contract No. 625PEN, effective 07/01/15.

609PENSegal Consulting (Internal Revenue Operational Compliance Audit) 01/01/15 12/31/15

521PEN Northern Trust Company (Benefit Payment System) 05/20/13 05/19/16

603PENCenter for Internet Security, Inc. (Network Security Monitoring) 03/01/14 02/28/17

610PEN EMC Corporation (Documentum) 10/01/14 09/30/17

611PEN Verizon Terremark (Disaster Recovery Services) 12/04/14 12/03/17

552PEN Buck Consultants, LLC (OnPoint Software) 05/01/12 04/30/18 04/02/15

616PEN AT&T (CALNET3 Phone) 11/15/13 06/30/18

617PEN AT&T (CALNET3 Data) 11/15/13 06/30/18

619PEN Verizon (CALNET3 Phone) 11/15/13 06/30/18

620PEN Verizon (CALNET3 Data) 03/26/14 06/30/18

575PENLRWL, Inc. (Pension Administration System Consulting Services) 06/01/13 12/31/18 05/21/15

626PENXerox State and Local Solutions, Inc. (Pension Administration System) 07/02/15 07/01/23 05/21/15

Subscription Agreements Bridgewater Associates, Inc. (TIPS and Pure Alpha) 07/31/08 n/a on-going

HEDGE FUND OF FUNDS PARTNERSHIP AGREEMENTS2

MEDICAL AND DENTAL BENEFITS

N/A

PENSIONS DIVISION (EXECUTIVE)

SYSTEMS

1 Marketing Cessation: The purpose of this policy is to prevent, and avoid the appearance of, undue influence on the Board or any of its members in the award of all contracts. In accordance with Section 9.0 of the Investment Policy, from the time the search begins with the Board’s approval of the minimum criteria for the search until the search ends with the selection of the firm(s) to receive the contract(s), all direct marketing contact with firms that meet the search criteria will be limited to meetings with the Consultant, information sent to the Consultant or Department, questions about the search directed to the Staff or Consultant, one meeting at the Department’s office with Staff and any site visits. The Board members, Department Staff or Consultant will accept no entertainment or gifts of any kind from any firm qualifying for the search. This policy does not prohibit contact with potential interview candidates at group social events, educational seminars, conferences, or charitable events so long as there is no direct marketing. During the three months prior to the renewal of a contract with a firm currently under contract, the Board Members, Department Staff and Consultant will accept no entertainment or gifts from that firm until the contract has been renewed or terminated by the Board. Firms who currently have contracts with the Los Angeles Fire and Police Pension System are allowed to continue contact related to the existing contract with Staff and Consultant. 2 Hedge Fund of Funds do not have contracts like our other managers. They have limited partnership agreements that do not have a fixed expiration date. They are on this list to include them in our regular three-year manager review process. *Expired contracts are listed in red. Expired Investment contracts will remain on the list if the market cessation period is active and until a new contract is awarded.

27

M I N U T E S

OF THE


BOARD MEETING OF MARCH 5, 2015

The Board of Fire and Police Pension Commissioners of the City of Los Angeles met at the LACERS Board Room, located at the Los Angeles Times Building, 202 W. First Street, Suite 500, Los Angeles 90012 on Thursday, March 5, 2015.

COMMISSIONERS PRESENT: Belinda Vega, President Robert von Voigt, Vice President George Aliano Carl Cade Cielo Castro Sam Diannitto (participated telephonically) Ruben Navarro Pedram Salimpour

COMMISSIONER ABSENT: Corinne Tapia

DEPARTMENT OF FIRE AND POLICE PENSIONS: Raymond P. Ciranna

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

CITY ATTORNEY’S OFFICE: Alan Manning, Assistant City Attorney James Napier, Deputy City Attorney Marie McTeague, Deputy City Attorney

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

President Vega called the meeting to order at 8:35 a.m. All of the above-listed Commissioners were present at the start of the meeting with the exception of Commissioner Tapia who arrived at 8:45 a.m.

A portion of Item G was taken out of order.

G. DISABILITY CASES

DISABILITY CLAIM – REVIEW REQUESTED BY PENSIONER – TIER 5 - 1

20272

Typewritten Text

20272

Typewritten Text

ITEM: D.1.a

Minutes of the Board of Fire and Police Pension Commissioners Meeting of March 5, 2015 Page 2

Maximiliano Ross (P) Detective I (Retired) Prior Board Action of January 18, 2007 granting a service-connected disability pension at 55.7452% is adjusted to 65% with no foreseeable purpose for review. Motion made by Commissioner Navarro, seconded by Commissioner Aliano and adopted by the following vote: ayes, Commissioners Aliano, Cade, Castro, Diannitto, Navarro, Salimpour, von Voigt and President Vega – 8; nays, none. Mr. Ross was not present but was represented by his attorney, Thomas J. Wicke.


1. AUTHORIZATION TO BEGIN SEARCH FOR INVESTIGATIVE SERVICES CONSULTANT Ms. Tina Zipper and Ms. Loanne Truong, both Senior Management Analyst I’s, from the Disability Pension Section stated that it was brought to staff’s attention that LACERS has an existing contract with an investigative services firm, and the City Attorney Office, Workers’ Compensation Division recently closed a Request For Proposal (RFP) for the same type of investigative services. Ms. Zipper stated that it may not be necessary to initiate an RFP. LAFPP may be able to utilize the contract with LACERS or the City Attorney’s Office. General Manager Ciranna suggested the Board amend the recommendation to release an RFP or utilize an existing contract with another governmental agency. Commissioners Navarro and von Voigt agreed as the maker and seconder of the motion.

RESOLUTION 15083

Commissioner Navarro moved as amended that the Board authorize the General Manager to issue a Request for Proposal (RFP) for investigative services, or utilize an existing contract for investigative services with another governmental agency, which was seconded by Commissioner von Voigt and approved by the following vote: ayes, Commissioners Aliano, Cade, Castro, Diannitto, Navarro, Salimpour, von Voigt, and President Vega - 8; nays, none.

2. CONSIDERATION OF INTEREST RATE TO BE CREDITED TO ACTIVE MEMBER ACCOUNTS AS OF DECEMBER 31, 2014 AND POSSIBLE BOARD ACTION The board report was approved. Ms. Elsa Moy gave a public comment.

RESOLUTION 15084

Commissioner Aliano moved that the Board, in accordance with Board Operating Policies and Procedures Section 5.1, direct the General Manager to credit the interest rate of 1.18% to active


member accounts as of December 31, 2014, which was seconded by Commissioner Cade and approved by the following vote: ayes, Commissioners Aliano, Cade, Castro, Diannitto, Navarro, Salimpour, von Voigt, and President Vega - 8; nays, none.

3. TRANSFER OF FUNDS FOR OVERTIME AND POSSIBLE BOARD ACTION

Mr. Mark Shin, Senior Management Analyst II, Administrative Services Section and Ms. Barbara Nobregas, Commission Executive Assistant came before the Board. Ms. Nobregas requested the Board’s approval to transfer $50,000 from the General Salaries account to the Overtime account. The need for additional overtime was caused by staff vacancies, project deadlines that were moved up, and an increased workload to staff. There is a $300,000 surplus to cover the transfer.

RESOLUTION 15085

Commissioner von Voigt moved that the Board authorize a transfer of $50,000 from General Salaries (Account 1010) to Overtime (Account 1090) to pay for overtime expenses primarily generated by staff vacancies, accelerating current projects and adding new projects, which was seconded by Commissioner Navarro and approved by the following vote: ayes, Commissioners Aliano, Cade, Castro, Diannitto, Navarro, Salimpour, von Voigt, and President Vega - 8; nays, none.

Item A.4 was moved to the latter portion of the meeting. B. REPORTS TO THE BOARD

1. REVIEW OF 2015 PRIVATE EQUITY AND COMMODITIES INVESTMENT ACTIVITY BY PORTFOLIO ADVISORS, LLC Mr. Todd Hughes, Managing Director from Portfolio Advisors provided an update of the Private Equity and Commodities portfolio. He answered questions from the Board. The board report was received and filed.

2. STATUS OF THE DIRECT HIRE EMERGING MANAGER SEARCHES Messrs. Rick Rogers, Investment Officer III; and Mr. Ryan Sullivan, Associate from RVK were before the Board. Mr. Rogers provided an update of the three direct hire emerging searches, for small cap, micro cap, and fixed income. He provided further the information on the quantitative screening process of the firms that passed the minimum qualifications. Qualitative screen comes next and he anticipates returning to the Board in May 2015. Mr. Rogers asked the Board for direction on how many firms to hire. The Board discussed the numbers of managers to hire and how much to allocate to the managers.


Mr. Sullivan suggested as a consideration for the Board to interview managers for each asset class, select the managers, and then determine the allocation. General Manager Ciranna stated staff will return to the Board with a list and at that time have an estimate of the managers’ fees. The Board discussed allocating approximately $125M to the emerging manager program but may wish to consider allocating a larger amount. Mr. Sullivan stated that he will continue with the evaluation process.

President Vega thanked staff for the report and the Board will consider options. The board report was received and filed.

3. CONTRACTOR DISCLOSURE POLICY - QUARTERLY REPORT Ms. Caroline Dinu, Senior Management Analyst II, Internal Audit Section (IAS) stated that IAS received 176 out of 177 expected disclosures. Staff received new disclosures related to the enhanced index search after the board report was prepared. Staff will continue to work with investment staff for the remaining outstanding disclosure. The board report was received and filed.

4. President Vega asked if any Board Member made any expenditure to influence State legislative or administrative action to which their reply was negative.

5. Miscellaneous correspondence from money managers, consultants, etc. – Received and Filed. 6. General Manager’s Report

a. Benefits Actions approved by General Manager on February 5, 2015 and February 19, 2015

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 February 5, 2015.

DISCONTINUED PENSIONS – TIER 1 – 2 Ronald W. Furtak Police Service Retired: 02-18-81 Died: 11-24-14 Jim J. Meek Police Disability Retired: 08-01-66 Died: 12-25-14

DISCONTINUED PENSIONS – TIER 2 – 19 George C. Fuller Fire Service Retired: 11-25-73 Died: 01-06-15 Harvey E. Hixson Fire Service Retired: 05-08-73 Died: 11-24-14 Clarke R. Merrill Fire Service Retired: 04-20-81 Died: 12-28-14


Joe F. Owens Fire Service Retired: 02-26-78 Died: 12-20-14 Jack W. Hosford Police Service Retired: 03-19-95 Died: 11-15-14 Robert R. Hunter Police Service Retired: 11-01-68 Died: 01-01-15 Robert C. Hyde Police Service Retired: 03-24-96 Died: 12-02-14 Earle C. Prescott Police Service Retired: 08-18-85 Died: 12-03-14 W. A. Stephenson Police Service Retired: 02-20-83 Died: 12-14-14 Chester N. Wright Police Disability Retired: 06-19-75 Died: 10-29-14 Eileen M. Conwell Fire Widow Retired: 11-29-94 Died: 12-07-14 Thelma S. Dreher Fire Widow Retired: 03-15-12 Died: 09-09-14 Maureen E. Taylor Fire Widow Retired: 07-26-98 Died: 12-11-14 Sibyl L. Alexander Police Widow Retired: 12-10-10 Died: 11-28-14 Joyce Bernard Police Widow Retired: 04-14-90 Died: 10-30-14 Virginia M. Farmer Police Widow Retired: 05-21-95 Died: 12-01-14 Angelina C. Gay Police Widow Retired: 07-16-13 Died: 01-06-15 Mary L. Holmes Police Widow Retired: 04-28-80 Died: 12-11-14 Dolores F. Sorensen Police Widow Retired: 03-24-12 Died: 11-01-14

DISCONTINUED PENSIONS – TIER 3 – 1 Gordon G. Robb Fire Service Retired: 07-16-00 Died: 12-27-14

DISCONTINUED PENSIONS FORMER SPOUSE – TIER 1 – 1 Nina J. Brooks Police Service Retired: 11-01-89 Member Died: 11-24-14

DISCONTINUED PENSIONS FORMER SPOUSE – TIER 2 – 1 Margie Bernard Police Service Retired: 04-14-90 Widow Died: 10-30-14

ELIGIBLE SURVIVING SPOUSE’S PENSION – TIER 2 – 6 Name Deceased Member Member’s Class Effective Date Margaret W. Fuller George C. Fuller Fire Service 01-07-15 Emily M. Owens Joe F. Owens Fire Service 12-21-14 Jacqueleen A. Hyde Robert C. Hyde Police Service 12-03-14 Ann L. Prescott Earle C. Prescott Police Service 12-04-14 Dorothy B. Matich Matthew T. Matich Fire Disability 12-23-14 Rose N. Wright Chester N. Wright Police Disability 10-30-14 ELIGIBLE SURVIVING SPOUSE’S PENSION – TIER 3 – 1 Name Deceased Member Member’s Class Effective Date Judy G. Robb Gordon G. Robb Fire Service 12-28-14

SURVIVING CHILD’S PENSION – TIER 5 – 1


Surviving child benefits are now payable to Michael D. Torres, surviving child of deceased Police Officer II, Carlos T. Torres, effective February 17, 2015, due to the attainment of age 18 and the continuation of full-time student status.

DECREASE SURVIVING SPOUSE’S PENSION – TIER 5 – 1 Decrease the pension payable to Deana Torres, surviving spouse of deceased Police Officer II, Carlos T. Torres, due to the attainment of age 18 and full-time student status by Michael D. Torres, effective February 17, 2015.

DESIGNATED PARTIAL PAYMENT OF PENSION – TIER 2 – 1 In accordance with the City Attorney’s advice, a designated proportion of the community property interest of the pension payable to William R. Mills, Police Service Pensioner, which was paid to his deceased former spouse, Rebecca J. Dow, has been designated to her beneficiary, Robert B. Mills, effective March 28, 2014. Mr. Mills will receive cost of living adjustments.

SERVICE PENSION – TIER 3 – 3 Police Julie R. McInnis Sergeant I Eff: 01-11-15 19 Years 195 Days Alicia P. Ramirez Detective III Eff: 12-28-14 25 Years 24 Days Richard B. Zimmerman Police Officer III Eff: 01-11-15 17 Years 48 Days

SERVICE PENSION – TIER 5 – 1 Police Philip K. Stine Police Officer III Eff: 01-05-15 20 Years 115 Days

SERVICE PENSION/DROP – TIER 3 – 1 Police Efrain Flores Police Officer II Eff: 12-01-14 26 Years 354 Days

SERVICE PENSION/DROP – TIER 4 – 1 Police Theresa A. Gordon Detective III Eff: 10-09-14 25 Years 0 Days

SERVICE PENSION/DROP – TIER 5 – 10 Fire James L. Hunt Firefighter III Eff: 09-03-14 26 Years 333 Days Oscar Martinez Inspector I Eff: 10-01-14 25 Years 305 Days Lance S. Messner Helicopter Pilot IV Eff: 10-01-14 34 Years 42 Days Jorge G. Perez Captain I Eff: 08-11-14 26 Years 11 Days Police Madolyn J. Candelaria Detective II Eff: 12-01-14 25 Years 248 Days


Deborah J. Gauff Police Officer II Eff: 10-01-14 27 Years 81 Days Martin J. Guerrero Sergeant I Eff: 10-01-14 25 Years 146 Days Duane T. Hayakawa Captain II Eff: 11-03-14 30 Years 69 Days Ronald P. Moody Detective I Eff: 11-06-14 25 Years 0 Days Susan E. Willis Lieutenant II Eff: 01-01-15 27 Years 62 Days

NON-SERVICE CONNECTED DISABILITY PENSION – TIER 5 – 1 Name Member’s Rank Percentage Effective Date Board Date Revlyn A. Henderson Sergeant I 50% 01-15-15 01-15-15

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 February 19, 2015.

DISCONTINUED PENSIONS – TIER 1 – 1 Marjorie B. Clarke Police Service Retired: 08-01-65 Died: 01-05-15

DISCONTINUED PENSIONS – TIER 2 – 12 Jerrol K. Mueller Fire Service Retired: 02-14-91 Died: 12-16-14 Norman P. Minadeo Police Service Retired: 06-27-93 Died: 01-14-15 Pierce C. Weir Police Service Retired: 03-01-80 Died: 12-31-14 Matthew T. Matich Fire Disability Retired: 06-29-82 Died: 12-22-14 Marcella E. Atkins Fire Widow Retired: 08-11-07 Died: 01-01-15 Barbara L. Awerkamp Fire Widow Retired: 11-01-70 Died: 11-20-14 Caron M. Bartlett Fire Widow Retired: 08-21-93 Died: 01-16-15 Mary L. Hansen Fire Widow Retired: 04-23-02 Died: 01-09-15 Mary B. Nance Fire Widow Retired: 01-22-90 Died: 12-29-14 Dorothy E. Gormley Police Widow Retired: 01-11-11 Died: 12-19-14 Ruth L. Hutchcroft Police Widow Retired: 10-31-97 Died: 01-21-15 Betsy Sullivan Police Widow Retired: 10-09-13 Died: 01-15-15

DISCONTINUED PENSIONS – TIER 5 – 2 David M. Graff, Sr. Police Service Retired: 01-21-07 Died: 01-14-15 Sarah Allen Police Dependent

Parent Retired: 05-10-14 Died: 11-26-14

ELIGIBLE SURVIVING SPOUSE’S PENSION – TIER 2 – 2 Name Deceased Member Member’s Class Effective Date Joanne Mueller Jerrol K. Mueller Fire Service 12-17-14 Mary Ann W. Minadeo Norman P. Minadeo Police Service 01-15-15

ELIGIBLE SURVIVING SPOUSE’S PENSION – TIER 5 – 1


Name Deceased Member Member’s Class Effective Date Christina M. Graff David M. Graff, Sr. Police Service 01-15-15

MINOR CHILD’S PENSION - GUARDIANSHIP – TIER 4 – 1 Pension benefits are payable for the benefit of Tyler J. Cruz, minor child of deceased Police Officer II, Mario S. Cruz, effective July 6, 2014. The Letters of Guardianship, issued December 11, 2014 in the Los Angeles Superior Court, Case Number BP156169, appointing Debra E. Dawson, Guardian of the Estate of Tyler J. Cruz, minor child of Mario S. Cruz, has been filed with this office. Pension payments will be paid to Debra E. Dawson for the benefit of Tyler J. Cruz, effective July 6, 2014.

PARTIAL PAYMENT OF PENSION – TIER 5 – 5 In accordance with the City Attorney’s advice, a designated proportion of the community property interest of the pension payable to Russell E. Bell, Fire Service Pensioner, is to be paid to his former spouse, Julie L. Bell, effective March 1, 2015. Ms. Bell will receive cost of living adjustments. In accordance with the City Attorney’s advice, a designated proportion of the community property interest of the pension payable to Maurice W. Graham, Police Service Pensioner, is to be withheld for his former spouse, Shirley L. Haley-Graham, effective February 7, 2015. Ms. Haley-Graham will receive cost of living adjustments. In accordance with the City Attorney’s advice, a designated proportion of the community property interest of the pension payable to Ernest A. Rodriguez, Police Service Pensioner, is to be paid to his former spouse, Rosana L. Rodriguez, effective March 1, 2015. Ms. Rodriguez will receive cost of living adjustments. In accordance with the City Attorney’s advice, a designated proportion of the community property interest of the pension payable to Thomas D. Ward, Police Service Pensioner, is to be paid to his former spouse, Catherine M. Ward, effective March 1, 2015. Ms. Ward will receive cost of living adjustments. In accordance with the City Attorney’s advice, a designated proportion of the community property interest of the pension payable to Keith R. Young, Fire Service Pensioner, is to be withheld for his former spouse, Chelsa T. Young, effective February 1, 2015. Ms. Young will receive cost of living adjustments.

PARTIAL PAYMENT OF MINOR CHILD’S PENSION – TIER 4 – 1 In accordance with the City Attorney’s advice, a designated proportion of the community property interest of the Minor Child’s Pension payable to Tyler J. Cruz, minor child of Police Officer II, Mario S. Cruz, is to be paid to Mr. Cruz’s former spouse, Debra E. Cruz, effective July 6, 2014. Ms. Cruz will receive cost of living adjustments.

DEFERRED SERVICE PENSION – TIER 5 – 1 Police Danny A. Martinez Police Officer III Eff: 02-03-15 20 Years 94 Days


DEFERRED SERVICE PENSION – TIER 3 – 1 Police Lisa J. Caraveo Police Officer III Eff: 02-21-15 13 Years 195 Days

SERVICE PENSION – TIER 5 – 5 Police Andrea J. Balter Sergeant II Eff: 01-11-15 25 Years 28 Days Juan C. Camacho Detective II Eff: 01-11-15 25 Years 0 Days Tonya J. Dummar Sergeant I Eff: 01-12-15 24 Years 66 Days Robert M. Saito Police Officer III Eff: 01-11-15 21 Years 257 Days Jayme E. Vermaat Detective III Eff: 02-08-15 26 Years 101 Days

SERVICE PENSION/DROP – TIER 5 – 5 Fire Dawn L. Dove Inspector I Eff: 03-24-14 25 Years 0 Days Raymond R. Hoffman Firefighter III Eff: 10-02-14 30 Years 66 Days Police Dean A. Gizzi Detective III Eff: 11-07-14 25 Years 0 Days Thomas W. Holzer Sergeant I Eff: 10-01-14 27 Years 340 Days Sylvia T. Ruize Detective III Eff: 01-02-15 26 Years 11 Days

DISCONTINUE DROP – TIER 2 – 4 Fire Sean K. Conway Retired: 03-01-10 Exit Close of: 02-28-15 Patrick S. McOsker Retired: 02-10-10 Exit Close of: 02-09-15 Armando A. Valencia Retired: 02-27-10 Exit Close of: 02-26-15 Police Joel R. Price Retired: 03-01-10 Exit Close of: 02-28-15

DISCONTINUE DROP – TIER 3 – 1

Police Randall M. McCain Retired: 06-01-10 Exit Close of: 02-28-15 DISCONTINUE DROP – TIER 4 – 3 Police Joseph S. Anzallo Retired: 03-01-10 Exit Close of: 02-28-15 Donald D. Razzano Retired: 03-01-10 Exit Close of: 02-28-15 Michael B. Soper Retired: 04-06-10 Exit Close of: 02-28-15


DISCONTINUE DROP – TIER 5 – 44 Fire Randy W. Beaty Retired: 03-01-10 Exit Close of: 02-28-15 Russell E. Bell Retired: 02-28-10 Exit Close of: 02-27-15 James R. Carson Retired: 02-27-10 Exit Close of: 02-26-15 James T. De Luca Retired: 02-24-10 Exit Close of: 02-23-15 David D. Dumler Retired: 03-01-10 Exit Close of: 02-28-15 Steven W. Hansen Retired: 03-16-10 Exit Close of: 02-28-15 Paul M. Hilleary Retired: 03-01-10 Exit Close of: 02-28-15 Richard J. Koehler Retired: 03-02-10 Exit Close of: 02-28-15 Kendal B. Koneval Retired: 02-27-10 Exit Close of: 02-26-15 Jeffery K. Moir Retired: 02-27-10 Exit Close of: 02-26-15 Ronald E. Myers Retired: 02-20-10 Exit Close of: 02-19-15 Russell N. Nakamura Retired: 02-14-10 Exit Close of: 02-13-15 Gregory E. Newland Retired: 02-28-10 Exit Close of: 02-27-15 Carlos A. Ortega Retired: 02-25-10 Exit Close of: 02-24-15 Arthur A. Perez Retired: 03-02-10 Exit Close of: 02-28-15 Darrayle B. Prosser Retired: 06-30-10 Exit Close of: 02-28-15 Douglas S. Reyes Retired: 02-27-10 Exit Close of: 02-26-15 Bernard S. Salazar Retired: 03-01-10 Exit Close of: 02-28-15 Marc H. Segal Retired: 02-27-10 Exit Close of: 02-26-15 Wendell F. Smith Retired: 03-01-10 Exit Close of: 02-28-15 Chad E. Spargo Retired: 02-05-10 Exit Close of: 02-04-15 James W. Vels Retired: 02-28-10 Exit Close of: 02-27-15 Police Cindy A. Benes Retired: 12-01-10 Exit Close of: 02-28-15 Ricardo T. Cruell Retired: 03-01-10 Exit Close of: 02-28-15 Cynthia A. French Retired: 03-01-10 Exit Close of: 02-28-15 Maurice W. Graham Retired: 03-01-10 Exit Close of: 02-07-15 Steven D. Harer Retired: 03-01-10 Exit Close of: 02-28-15 James R. Hays, Jr. Retired: 03-01-10 Exit Close of: 02-28-15 Tyler E. Izen Retired: 03-01-10 Exit Close of: 02-28-15 Brent L. Jones Retired: 03-01-10 Exit Close of: 02-28-15 Michael L. Kammert Retired: 03-01-10 Exit Close of: 02-28-15 David A. Lindsay Retired: 01-13-14 Exit Close of: 02-28-15 Matthew V. Mahoney Retired: 03-01-10 Exit Close of: 02-28-15 Josephine Mapson Retired: 03-01-10 Exit Close of: 02-28-15 Joseph A. Martinez Retired: 02-04-14 Exit Close of: 02-28-15 Michael J. McGilvray Retired: 01-02-13 Exit Close of: 02-28-15 Ivan G. Minsal Retired: 04-01-10 Exit Close of: 02-28-15 Steve Morales Retired: 03-01-10 Exit Close of: 02-28-15 Lisa M. Phillips Retired: 07-01-14 Exit Close of: 02-21-15


Laurence W. Poehls Retired: 03-01-10 Exit Close of: 02-28-15 Kathryn L. Redd-Henderson Retired: 03-03-10 Exit Close of: 02-28-15 Thomas W. Thornton Retired: 03-01-10 Exit Close of: 02-28-15 Sonya D. Tiefenbacher Retired: 05-27-14 Exit Close of: 02-28-15 Thomas D. Ward Retired: 03-01-10 Exit Close of: 02-28-15

PARTIAL PAYMENT OF DROP FUNDS – TIER 5 – 6 In accordance with the City Attorney’s advice, a designated proportion of the community property interest of the DROP funds payable to Russell E. Bell, Fire Service Pensioner, is to be paid to his former spouse, Julie L. Bell, effective February 28, 2015.

In accordance with the City Attorney’s advice, a designated proportion of the community property interest of the DROP funds payable to Maurice W. Graham, Police Service Pensioner, is to be withheld for his former spouse, Shirley L. Haley-Graham, effective February 7, 2015. In accordance with the City Attorney’s advice, a designated proportion of the community property interest of the DROP funds payable to Matthew V. Mahoney, Police Service Pensioner, is to be paid to his former spouse, Victoria Mahoney, effective February 28, 2015. In accordance with the City Attorney’s advice, a designated proportion of the community property interest of the DROP funds payable to Arthur A. Perez, Fire Service Pensioner, is to be paid to his former spouse, Donna Schrader Perez, effective February 28, 2015. In accordance with the City Attorney’s advice, a designated proportion of the community property interest of the DROP funds payable to Ernest A. Rodriguez, Police Service Pensioner, is to be paid to his former spouse, Rosana L. Rodriguez, effective February 28, 2015. In accordance with the City Attorney’s advice, a designated proportion of the community property interest of the DROP funds payable to Thomas D. Ward, Police Service Pensioner, is to be paid to his former spouse, Catherine M. Ward, effective February 28, 2015.

b. Other business relating to Department operations

General Manager Ciranna gave the following report: 1. LAFPP is currently in the process of holding an election for the retired firefighter board

member. The ballots are expected to be mailed to members on March 11, 2015 and due on March 31, 2015. The ballot counting will begin on April 5, 2015. There are two candidates on the ballot.

2. The change since February 2014 in the Consumer Price Index (CPI) that was briefly

discussed earlier is currently -0.6%, with a month remaining for the final COLA calculation. Staff is preparing a communication strategy if the final calculation for the COLA is negative, as it will be the first time to have a negative COLA for LAFPP pensioners. If so, staff will send out letters and email blasts to the members. He attended


the Los Angeles Retired Fire & Police Association meeting yesterday with Commissioner Aliano to inform the organization of the issue.

C. COMMITTEE CALENDAR

1. Audit Committee – Last met: 01/15/15; next meeting: 04/16/15 2. Benefits Committee – Last met: 12/18/14; next meeting: 03/05/15 3. Governance Committee – Last met: 09/18/14; next meeting: 04/02/15 4. Ad Hoc Emerging Investment Managers – Last met: 02/05/15; next meeting: TBD

President Vega stated that the discussion of emerging managers may be held at the Ad Hoc Committee level and gave the discretion to the Chair and Board members.

D. CONSENT ITEMS

1. APPROVAL OF TRAVEL AUTHORITY (NAVARRO) – NCPERS, 2015 ANNUAL CONFERENCE AND EXHIBITION

The board report was approved as submitted.

MOTION

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, Cade, Castro, Diannitto, Navarro, Salimpour, von Voigt, and President Vega – 8; nays, none.

E. CONSIDERATION OF FUTURE AGENDA ITEMS

Commissioner Navarro requested that staff provide a complete report on the issue of the medical insurance situation, specifically related to portability and options for members if they retire between age 55 - 65; and options when they retire over the age of 65. He asked that the report include a break down for all the members represented by LAFPP. Commissioner Cade stated that there was discussion at the Board Educational Offsite meeting on how geo-political risk impacts our investments and political risk in specific foreign markets. He requested that staff present how our team and managers think about this issue when investing internationally. How do political items potentially impact our investments and fiduciary responsibility?

F. GENERAL PUBLIC COMMENT ON MATTERS WITHIN THE BOARD’S JURISDICTION

There were no additional public comments at this time.


Deputy City Attorney James Napier took the city attorney chair. G. DISABILITY CASES (continued) Commissioner Cade stepped out of the board room at 9:44 a.m.

DISABILITY CLAIM – DEPENDENT CHILD – TIER 2 - 1 Janet A. Neal (F) Firefighter II (Deceased) Dependent Child of Nathan W. Neal Prior Board Action of November 7, 2013 denying Dependent Child status is rescinded and Dependent Child status and benefits are granted. Motion made by Commissioner Aliano, seconded by Commissioner von Voigt and adopted by the following vote: ayes, Commissioners Aliano, Diannitto, Navarro, Salimpour, and von Voigt – 5; nays, Commissioners Castro and President Vega – 2. (Original motion to deny was made by President Vega, seconded by Commissioner Navarro and failed by the following vote: ayes, Commissioners Castro, Navarro, Salimpour, and President Vega – 4; nays, Commissioners Aliano, Diannitto, and von Voigt – 3.) Dr. Howard Aaron Arronow, Neurologist, USC Keck School of Medicine testified regarding Ms. Neal. Ms. Neal was present and was represented by her attorneys, James Holmes and Kevin Gilliland.

Commissioner Castro left the board room for the remainder of the meeting at 10:56 a.m. Commissioner Diannitto ended his telephonic participation at 10:56 a.m. Assistant City Attorney Alan Manning took the city attorney chair. H. CLOSED SESSION ITEMS FOR POSSIBLE BOARD ACTION

1. CLOSED SESSION PURSUANT TO GOVERNMENT CODE SECTION 54956.9(c) TO CONFER WITH, OR RECEIVE ADVICE FROM, LEGAL COUNSEL WITH REGARD TO POTENTIAL LEAD PLAINTIFF STATUS IN A CLASS ACTION

This item was continued.

2. CLOSED SESSION PURSUANT TO GOVERNMENT CODE SECTION 54956.81 TO CONSIDER THE PURCHASE OF TWO (2) PARTICULAR, SPECIFIC INVESTMENTS AND POSSIBLE BOARD ACTION The Board met in closed session. Upon reconvening in open session, President Vega stated there was no public report.

Commissioner Cade returned to the board room at 11:29 a.m.



4. PRESENTATIONS BY ENHANCED INDEX/ACTIVE CONSTRAINED COMMODITY

MANAGERS AND POSSIBLE BOARD ACTION

Erin J. Kenney, Departmental Audit Manager, provided contractor disclosure information to the Board pursuant to the Contractor Disclosure Policy. The following individuals came before the Board to give presentations on their firms for the enhanced index/active constrained commodity manager position:

CoreCommodity Management Enriquez Lopez-Balboa, Co-Founder and Managing Director; Adam De Chiara, Co-Founder, Portfolio Manager Credit Suisse Asset Management Stephen Murphy, Managing Director, Head of Americas Distribution; and Nelson Louie, Managing Director, Global Head of Commodities Goldman Sachs Asset Management

Stephanie Ivy Sanford, Managing Director, Senior Relationship Manager; John Calvaruso, Vice President, Commodities Portfolio Management; Matei Mihalca, Vice President, Commodities Portfolio Management

Deputy City Attorney Marie McTeague was at the city attorney chair at 12:54 p.m.

Gresham Investment Management Jonathan Berland, Senior Managing Director

PIMCO Mihir P. Worah, CIO Real Return and Asset Allocation, and Managing Director; Kevin Gray, Senior Vice President and Account Manager; Stephanie L. King, Executive Vice President, Co-head of the U.S. Public Client Practice and Account Manager

Assistant City Attorney Alan Manning was at the city attorney chair at 1:55 p.m.

DISCUSSION/SELECTION Mr. Tom Lopez and Ms. Rebecca Gratsinger, RVK came before the Board as requested by Commissioner Cade. Mr. Lopez discussed the similarities and differences among the managers. Ms. Gratsinger and Mr. Lopez answered questions from the Board. Commissioner Navarro stated his perspective on staff hiring managers versus the Board.


RESOLUTION 15088

Commissioner Aliano moved as amended that the Board select as one of the two commodity managers, Goldman Sachs Asset Management as the enhanced index manager for half of the total mandate amount, which was seconded by Commissioner von Voigt and approved by the following vote: ayes, Commissioners Aliano, Cade, Navarro, von Voigt, and President Vega - 5; nays, Commissioner Salimpour - 1. The Board discussed their respective choice for the active constrained of manager.

RESOLUTION 15089

Commissioner Salimpour moved that the Board select as one of the two commodity managers, Gresham Investment Management as the active constrained manager for half of the mandated amount, which was seconded by Commissioner Cade and approved by the following vote: ayes, Commissioners Aliano, Cade, Navarro, Salimpour, von Voigt, and President Vega – 6; nays, none.

The meeting adjourned at 2:32 p.m.

President Secretary

M I N U T E S

OF THE


BOARD MEETING OF MARCH 19, 2015 The Board of Fire and Police Pension Commissioners of the City of Los Angeles met at the LACERS Board Room, located at the Los Angeles Times Building, 202 W. First Street, Suite 500, Los Angeles 90012 on Thursday, March 19, 2015. COMMISSIONERS PRESENT: Belinda Vega, President

Robert von Voigt, Vice President George Aliano Carl Cade Cielo Castro Pedram Salimpour Corinne Tapia

COMMISSIONER ABSENT: Sam Diannitto Ruben Navarro

DEPARTMENT OF FIRE AND POLICE PENSIONS: Raymond P. Ciranna, General Manager

William Raggio, Executive Officer Tom Lopez, Chief Investment Officer Joseph Salazar, Assistant General Manager

Barbara Nobregas, Commission Executive Assistant CITY ATTORNEY’S OFFICE: Alan Manning, Assistant City Attorney President Vega called the meeting to order at 8:34 a.m. All of the above-listed Commissioners were present at the start of the meeting with the exception of Commissioners Salimpour and Tapia, who arrived at 8:53 a.m. and 8:48 a.m. respectively. A. COMMITTEE REPORTS

1. OPERATIONS AGREEMENT WITH LOS ANGELES POLICE RELIEF ASSOCIATION AND

POSSIBLE BOARD ACTION Mr. Anthony Torres, Senior Management Analyst II, Medical and Dental Benefits Section, Pensions Division presented the Los Angeles Police Relief Association Operations Agreement and stated that the changes are outlined in the report.

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Typewritten Text

ITEM: D.1.a


RESOLUTION 15090

Commissioner Aliano moved that the Board authorize the Board President to execute an Operations Agreement with the Los Angeles Police Relief Association (LAPRA), which was seconded by Commissioner von Voigt and approved by the following vote: ayes, Commissioners Aliano, Cade, Castro, von Voigt, and President Vega – 5; nays, none.

B. ITEMS FOR BOARD ACTION

1. APPROVAL OF CONTRACT WITH THE SEGAL COMPANY (WESTERN STATES) INC.

FOR ACTUARIAL SERVICES Ms. Robyn Wilder, Chief Benefits Analyst, Pensions Division stated that staff is seeking the Board’s approval to negotiate a contract with The Segal Company for actuarial services for a three-year term from 2015-2018. Staff received a fee estimate from The Segal Company with a slight increase in cost to the current contract. Ms. Wilder stated that Cherion, Inc. was hired to conduct an audit of Segal’s work in 2013 because there is a provision in the Board Governance Policies that the System have an actuarial audit if the same actuary is retained after a certain period.

RESOLUTION 15091

Commissioner von Voigt moved that the Board:

1) Determine that conducting a new search for actuarial services at this time would not be

productive, practicable or advantageous to the Plan; and, 2) Authorize the General Manager to negotiate and execute the terms and conditions of a new

three-year contract with The Segal Company (Western States), Inc.; and 3) Authorize the President of the Board, on its behalf, to execute the contract, subject to the

approval of the City Attorney as to form, which was seconded by Commissioner Aliano and approved by the following vote: ayes, Commissioners Aliano, Cade, Castro, von Voigt, and President Vega – 5; nays, none.

2. FISCAL YEAR 2015-16 BUSINESS PLAN AND POSSIBLE BOARD ACTION Ms. Stephanie Clements, Chief Management Analyst, Administrative Operations Division stated that the Board approved the 2015-18 Three-Year Strategic Plan on February 5, 2015. The Strategic Plan serves as the road map for the Annual Business Plan. The Strategic Plan will remain unchanged for the next three years, but the Board will adopt the Annual Business Plan in March of each year, which includes specific projects in support of the Strategic Plan. Ms. Clements provided a brief overview of the 12 projects that staff is proposing. She addressed the


Board’s questions specifically regarding the implementation of the Strategic Plan. General Manager Ciranna explained that through the budget process, the Sections within the Department are allocated staffing and Sections make requests for certain contractual items and other administration expenses. A budget is developed with each Section and then compiled department-wide. He is reviewing a three-year implementation of performance based budgeting and cost accounting. A significant amount of time was spent by Staff to develop a new budget system to track costs. The Sections will provide performance metrics next year to track results.

Commissioner Tapia arrived to the meeting at 8:48 a.m.

RESOLUTION 15092

Commissioner von Voigt moved that the Board approve the 2015-16 Proposed Business Plan, which was seconded by Commissioner Aliano and approved by the following vote: ayes, Commissioners Aliano, Cade, Castro, Tapia, von Voigt, and President Vega – 6; nays, none.

3. FISCAL YEAR 2015-16 PROPOSED BUDGET AND POSSIBLE BOARD ACTION Mr. Mark Shin, Senior Management Analyst II and Ms. Diana Pointer, Senior Management Analyst I from Administrative Services Section presented the proposed budget and answered the Board’s questions. Ms. Pointer stated that performance based budgeting and internal performance metrics were included in the budget. She highlighted the changes to the receipts and expenditures. The Headquarters and Pension Administration System (PAS), both capital projects, were not included in the proposed budget but will be submitted separately to the Board. General Manager Ciranna stated that the costs for the Headquarters Project and PAS will be refined and brought to the Board at a later date.

RESOLUTION 15093

Commissioner Castro moved that the Board approve the Fiscal Year (FY) 2015-16 Proposed Budget and instruct staff to submit it to the City Administrative Officer (CAO) and the Mayor’s Office for inclusion in the Mayor’s FY 2015-16 Proposed Budget, which was seconded by Commissioner Aliano and approved by the following vote: ayes, Commissioners Aliano, Cade, Castro, Salimpour, Tapia, von Voigt, and President Vega – 7; nays, none.

Items G and C.1 were taken out of order. G. GENERAL PUBLIC COMMENT ON MATTERS WITHIN THE BOARD’S JURISDICTION

Mr. Michael Pencchi from UNITE HERE, the hospitality and hotel workers union, gave a public comment regarding an AEW real estate investment in a hotel. The hotel is part of a joint venture project with AEW and another investor. Ms. Juana Melara and Francisco Abdul Estin, hotel


employees gave public comments regarding labor issues at the hotel. President Vega thanked them for their comments.

Presentation – President Vega presented former Commissioner Emanuel Pleitez a plaque on behalf of the Board of the Fire and Police Pension Commissioners for his service and contributions as a former Board Member. Mr. Pleitez thanked the Board and staff.

C. REPORTS TO THE BOARD

1. LAPD RETIREMENT COUNSELOR - ESSENTIAL FUNCTIONS

Ms. Diana Anderson, Senior Management Analyst II, DROP/Service Pensions Section presented the report and introduced Sergeant Medardo Carranza, Retirement Counselor, LAPD Retirement Counselor’s Office. Sergeant Carranza presented an overview of the LAPD Retirement Counselor’s duties as requested by the Board. General Manager Ciranna stated that communication is key with members and LAPD. A team approach between LAPD, LAFPP and the members is needed. In the Business Plan and Budget there is an additional communications position to expand our outreach. Staff is reviewing new options to communicate with members to prompt questions. Staff is establishing quarterly meetings with LAPD and will reach out to LAFD and the Harbor Department to get involved to move forward providing information, and getting members engaged. The board report was received and filed.

B. ITEMS FOR BOARD ACTION (continued)

4. CHIEF INVESTMENT OFFICER’S QUARTERLY REPORT OF ASSET ALLOCATION

STATUS AND POSSIBLE BOARD ACTION Mr. Tom Lopez, Chief Investment Officer stated that most of Fund’s asset classes are within their ranges. He provided an overview of monies shifting among the asset classes. Ms. Elsa Moy provided a public comment.

RESOLUTION 15094

Commissioner von Voigt moved that the Board approve the actual asset allocation of the Fund and Staff’s plans for bringing asset classes currently outside of their target allocation ranges back within their allocation ranges, which was seconded by Commissioner Aliano and approved by the following vote: ayes, Commissioners Aliano, Cade, Castro, Tapia, von Voigt, and President Vega – 6; nays, none.


Commissioner Salimpour stepped out of the board room during the vote.

C. REPORTS TO THE BOARD

2. QUARTERLY PORTFOLIO PERFORMANCE REPORT BY RV KUHNS

Messrs. Jim Voytko, Chief Operating Officer and Ryan Sullivan, Associate Consultant from RV Kuhns presented the Fund’s quarterly performance report. Mr. Sullivan stated that the overall performance for the one-year period in 2014 was good. The one, three, and five year performances were strong, with the exception of the seven and 10-year performance. The driver of the performance for the year was domestic equity. Details of the Fund were further provided in addition to highlights of key managers and managers on the watch list. Mr. Voytko provided an overview of risk and answered the Board’s questions. The board report was received and filed.

3. REVIEW OF 2015 PRIVATE EQUITY AND COMMODITIES INVESTMENT ACTIVITY BY PORTFOLIO ADVISORS, LLC Mr. Todd Hughes, Managing Director from Portfolio Advisors provided an update of the private equity portfolio. He stated that there is $145M of commitments for this year in private equity, with a target of $300 to $350M. For the specialized manager area, he is currently reviewing approximately five managers, and in the commodities area, he is reviewing two funds. He will bring recommendations to a future board meeting.

Commissioner Salimpour left for the remainder of the meeting at 10:56 a.m. 4. Miscellaneous correspondence from money managers, consultants, etc. – Received and

Filed. 5. General Manager’s Report

a. Monthly Report

b. Marketing Cessation Information

c. Benefits Actions approved by General Manager on March 5, 2015 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.

DISCONTINUED PENSIONS – TIER 1 – 2 Lynne R. Burns Police Widow Retired: 10-25-09 Died: 12-30-14


Ethel J. Pierson Police Widow Retired: 05-20-11 Died: 01-27-15

DISCONTINUED PENSIONS – TIER 2 – 23 Carter S. Ames Fire Service Retired: 07-06-83 Died: 01-26-15 William D. Saunders Fire Service Retired: 04-14-79 Died: 11-21-14 Roger E. Shouse Fire Service Retired: 06-27-93 Died: 01-28-15 Ross J. Stevens Fire Service Retired: 07-08-84 Died: 02-07-15 John A. Beeson Police Service Retired: 02-05-95 Died: 01-12-15 Laurence T. Frazier Police Service Retired: 03-02-79 Died: 01-10-15 Marcus M. Hissong Police Service Retired: 06-01-80 Died: 10-19-14 James E. Newman Police Service Retired: 11-01-79 Died: 01-09-15 James P. Osman Police Service Retired: 02-27-00 Died: 01-20-15 Anthony M. Ostoich Police Service Retired: 04-24-77 Died: 01-10-15 Frank J. Patchett Police Service Retired: 06-30-90 Died: 02-03-15 Robert C. Prytz Police Service Retired: 07-05-98 Died: 01-27-15 Donald D. Shaidell Police Service Retired: 06-01-79 Died: 01-09-15 James W. Clark Fire Disability Retired: 02-23-89 Died: 01-23-15 Louis Mouton, Jr. Fire Disability Retired: 08-01-79 Died: 01-11-15 Harold Ward Fire Disability Retired: 02-27-97 Died: 01-21-15 Robert W. Diton Police Disability Retired: 12-08-83 Died: 01-30-15 Anna D. Bates Fire Widow Retired: 09-25-93 Died: 11-16-14 Ann M. Nix Fire Widow Retired: 01-11-96 Died: 01-16-15 Joan Dierks Police Widow Retired: 03-28-95 Died: 02-07-15 Sally L. O Day Police Widow Retired: 06-01-72 Died: 01-07-15 Jacqueline Reed Police Widow Retired: 09-06-99 Died: 11-23-14 Dorothy J. Wall Police Widow Retired: 10-24-89 Died: 01-08-15

DISCONTINUED PENSIONS – TIER 5 – 3 Ronald A. Weber Fire Service Retired: 07-27-03 Died: 01-06-15 John H. Lafko Police Service Retired: 07-06-02 Died: 02-03-15 Michael W. Oliver Police Service Retired: 11-02-03 Died: 02-02-15

ELIGIBLE SURVIVING SPOUSE’S PENSION – TIER 2 – 11 Name Deceased Member Member’s Class Effective Date Susan H. Ames Carter S. Ames Fire Service 01-27-15 Arlene Shouse Roger E. Shouse Fire Service 01-29-15 Gail E. Stevens Ross J. Stevens Fire Service 02-08-15 Diane B. Beeson John A. Beeson Police Service 01-13-15 Carla J. Newman James E. Newman Police Service 01-10-15 Elizabeth H. Hiramoto James P. Osman Police Service 01-21-15 Helen G. Ostoich Anthony M. Ostoich Police Service 01-11-15


Jerri M. Patchett Frank J. Patchett Police Service 02-04-15 Janice E. Prytz Robert C. Prytz Police Service 01-28-15 Janice E. Clark James W. Clark Fire Disability 01-24-15 Paula J. Ward Harold Ward Fire Disability 01-22-15

ELIGIBLE SURVIVING SPOUSE’S PENSION – TIER 5 – 3 Name Deceased Member Member’s Class Effective Date Judy L. Weber Ronald A. Weber Fire Service 01-07-15 Carin R. Lafko John H. Lafko Police Service 02-04-15 Vickie L. Oliver Michael W. Oliver Police Service 02-03-15

SURVIVOR BENEFIT PURCHASE PROGRAM VESTED MEMBERS – TIER 2 – 1 Name Member’s Class Effective Date Vested Date Survivor Benefit % William R. Malin, II Police Service 03-01-14 03-01-15 60%

SERVICE PENSION – TIER 5 – 3 Fire David P. Moede Firefighter III Eff: 02-22-15 24 Years 254 Days Police Ronald A. Behnke Detective I Eff: 02-08-15 24 Years 113 Days Yamay Christle Detective I Eff: 01-28-15 24 Years 70 Days

SERVICE PENSION/DROP – TIER 5 – 5 Police Andrew E. Kleinick Detective III Eff: 02-01-15 28 Years 19 Days Esther H. Kunz Detective II Eff: 02-01-15 27 Years 40 Days Jose A. Leyba Police Officer III Eff: 01-05-15 28 Years 103 Days Brad L. Lovitt Sergeant II Eff: 02-02-15 25 Years 264 Days Celestino Villatoro Police Officer III Eff: 02-01-15 27 Years 166 Days

DISCONTINUE DROP – TIER 5 – 1 Police Scott D. Smith Retired: 02-01-13 Exit Close of: 02-28-15

SERVICE-CONNECTED DISABILITY PENSION – TIER 5 – 1 Name Member’s Rank Percentage Effective Date Board Date Cale A. Semf Police Officer II 55% 09-08-13 02-05-15

d. Other business relating to Department operations

General Manager gave the following updates:


1. He provided an update of the two Board elections for the retired fire member and active

police member. The ballots were mailed on March 11, 2015 for the retired fire member. There are two candidates. The ballots will be counted on April 2, 2015 and staff may get preliminary results that day. The active police member election will be held on April 28, 2015. There is only one candidate on the ballot. The ballot counting will be held on April 30, 2015.

2. The final Consumer Price Index (CPI) number will be issued on March 24, 2015. Staff is working on a communication strategy such as notifying elected officials, the relief associations, newsletters, email blast, website highlights and Frequently Asked Questions list.

3. Mr. Chuck Reed is launching another ballot initiative possibly targeting CALPERS. We have not seen the details of the initiative as of yet. Due to the low turnout in the last City election, Mr. Reed must collect approximately 585,000 signatures for the ballot to qualify.

4. The Statement of Economic Interest Forms are due on April 1, 2015. 5. In the Board’s mail packet is a letter from the City Controller. In the spirit of open and

transparent data, they are requesting the Department’s pension data, similar to what was provided to Transparent California. The Controller’s request for information will become part of the City’s Open Data portal. He proposed that staff retrieve the information and present it on the LAFPP website. The release of the information will cause concern for our members but if the Fund presents the information, staff will be able to better manage how the data is presented. As an example, the data published by Transparent California, does not separate the DROP payout numbers from the pension data.

Board members stated their opinions on the issue. Commissioner von Voigt suggested providing the members an explanation as to why the information has to be posted. General Manager Ciranna agreed to prepare a communication to members on the issue.

6. He commended staff for their contributions in preparing the Annual Report and providing an early release of the report.

D. COMMITTEE CALENDAR

1. Audit Committee – Last met: 01/15/15; next meeting: 04/16/15 2. Benefits Committee – Last met: 03/05/15; next meeting: 03/19/15 3. Governance Committee – Last met: 09/18/14; next meeting: 04/02/15 4. Ad Hoc Emerging Investment Managers – Last met: 02/05/15; next meeting: 05/07/15 President Vega stated all committees are scheduled for future dates.

E. CONSENT ITEMS


1. APPROVAL OF TRAVEL AUTHORITY (CADE) – GFOA, 109TH ANNUAL CONFERENCE 2. Approval of Minutes a. Minutes of the Regular Board meeting of July 24, 2008, November 6, 2014 b. Minutes of the Benefits Committee of November 20, 2014

c. Minutes of the Special Board Meeting of September 18, 2014, November 6, 2014

MOTION

Commissioner von Voigt moved to approved the consent items, seconded by Commissioner Aliano and approved by Commissioners Aliano, Cade, Castro, Tapia, von Voigt, and President Vega – 6; nays, none.

F. CONSIDERATION OF FUTURE AGENDA ITEMS

President Vega requested discussion regarding the public comment received today relating to the labor dispute at a Long Beach hotel. Does LAFPP have an investment in the hotel and to determine whether or not to send a letter to the investment manager. Commissioner Cade requested a follow up discussion regarding the Stockbridge issue as the public commenter mentioned that they are now considered a responsible investor.

General Manager Ciranna stated that staff will follow up on the issue.

G. GENERAL PUBLIC COMMENT ON MATTERS WITHIN THE BOARD’S JURISDICTION

Ms. Elsa Moy gave a public comment.

President Vega recessed the regular Board meeting at 11:14 a.m. to convene the Special Board meeting. The regular meeting reconvened at 11:23 a.m. Item H.2. was taken out of order. H. CLOSED SESSION ITEMS FOR POSSIBLE BOARD ACTION

2. CLOSED SESSION PURSUANT TO GOVERNMENT CODE SECTION 54956.81 TO CONSIDER THE PURCHASE OF TWO (2) PARTICULAR, SPECIFIC INVESTMENTS AND POSSIBLE BOARD ACTION The Board met in closed session.

1. CLOSED SESSION PURSUANT TO SUBDIVISIONS (a) and (d)(1) of GOVERNMENT

CODE SECTION 54956.9 TO CONFER WITH LEGAL COUNSEL REGARDING PENDING


LITIGATION, IN THE CITY OF LOS ANGELES, ACTING THROUGH ITS FIRE AND POLICE PENSION SYSTEM, ACTING BY ORDER OF AND THROUGH ITS BOARD OF FIRE AND POLICE PENSION COMMISSIONERS, INDIVIDUALLY AND ON BEHALF OF ALL OTHERS SIMILARLY SITUATED V. BANKRATE, INC., ET AL. (UNITED STATES DISTRICT COURT, SOUTHERN DISTRICT OF FLORIDA, CASE NO. 9:14-CV-81323-DMM) The Board met in closed session.

Upon reconvening in open session, President Vega stated there was no public report.

F. CONSIDERATION OF FUTURE AGENDA ITEMS (continued) The Board requested knowledge of investments in Los Angeles. The Board further discussed diversity specifically the principals in private equity, and requested a future discussion on how to incorporate the issue to meet the goals in the LAFPP Business Plan. General Manager Ciranna agreed to have Portfolio Advisors and The Townsend Group come before the Board to discuss their process in relation to diversity.


President Secretary

M I N U T E S

OF THE


SPECIAL EDUCATIONAL OFFSITE MEETING OF FEBRUARY 19, 2015

The Board of Fire and Police Pension Commissioners of the City of Los Angeles met at the California Endowment, Yosemite Room, 1000 N. Alameda Street, Los Angeles 90012 on Thursday, February 19, 2015.

COMMISSIONERS PRESENT: Belinda Vega, President George Aliano Carl Cade Cielo Castro Ruben Navarro Pedram Salimpour Corinne Tapia

COMMISSIONER ABSENT: Sam Diannitto Robert von Voigt, Vice President



CITY ATTORNEY’S OFFICE: Alan Manning, Assistant City Attorney

President Vega called the meeting to order at 8:10 a.m. All of the above-listed Commissioners were present at the start of the meeting with the exception of Commissioner Salimpour who arrived at 8:22 a.m. President Vega welcomed everyone to the Offsite Educational meeting and looked forward to the dialogue and communication today. She thanked staff for coordinating the meeting.

A. GENERAL MANAGER’S REPORT

1. Business relating to Department operations

General Manager Ciranna welcomed everyone to the 7th Annual Offsite Educational meeting. Heacknowledged Ms. Barbara Nobregas, Commission Executive Assistant, Ms. Evange Masud,Executive Administrative Assistant, and staff for their efforts in coordinating the meeting. He

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Minutes of the Board of Fire and Police Pension Commissioners Special Meeting of February 19, 2015 Page 2

thanked the representatives from other City departments, the various relief and retirement Associations, and stakeholders for their participation. He introduced Mr. William Raggio, Executive Officer as the facilitator of the meeting. Mr. Raggio has been a valuable leader to the LAFPP team, and acknowledged his contributions to today’s meeting.

B. GENERAL PUBLIC COMMENT ON MATTERS WITHIN THE BOARD’S JURISDICTION

Mr. William Raggio thanked President Vega and General Manager Ciranna, who has been a great leader to the department. He recognized Mr. Joseph Salazar, Assistant General Manager, Pensions Division for his contributions to the department. He thanked staff for the efforts to coordinate the meeting. Mr. Raggio clarified that public comment did not apply to the members of the various Associations, City personnel and stakeholders. He thanked the California Endowment for hosting the event. He provided an overview of the meeting and encouraged the audience to complete the evaluation survey. Mr. Raggio asked for public comment which there was none.

Update on Healthcare Marketplace Mr. Raggio introduced Mr. Steve Gedestad from Keenan & Associates.

Mr. Gedestad presented an update on the healthcare marketplace, the Covered California public exchange, and healthcare savings accounts/health reimbursement accounts, and answered questions from the Board and the audience. Update on UFLAC’s Health Plans Mr. Raggio introduced Ms. Jennifer Lincicum, President at Fickewirth Benefits Advisors. Ms. Lincicum introduced her associate, Ms. Kiana Verhoeven, Account Manager. They presented an overview of UFLAC’s plans, specifically their current medical plans, and the new health savings account that will be implemented for active Fire Department employees on January 1, 2016. Ms. Lincicum and Ms. Verhoeven answered questions from the Board and audience.

The Board recessed for break at 9:50 a.m. and reconvened at 10:14 a.m.

Asset/Liability Studies 101

Mr. Raggio introduced Messrs. Jim Voytko, Chief Operating Officer and Ryan Sullivan, Associate Consultant from RVK. Messrs. Voytko and Sullivan provided an overview of asset liability studies and explained the difference between an asset liability study and an asset allocation study. Capital Market Assumptions Education

Minutes of the Board of Fire and Police Pension Commissioners Special Meeting of February 19, 2015 Page 3

Messrs. Jim Voytko and Ryan Sullivan presented an overview of what capital market assumptions are used for and answered the Board’s questions.

Fixed Income Mr. Raggio introduced Messrs. John Hyll, Vice President and Portfolio Manager, Loomis, Sayles & Company and Luis Maizel, Co-Founder and Senior Managing Director, LM Capital Group, LLC.

Mr. Maizel provided the Board an overview of fixed income, and discussed equities and current market conditions relative to fixed income. He explained the portfolio strategy that his firm uses to get better returns for the fixed income portfolio. Mr. Hyll discussed reasons to invest in long duration bonds, and interest rate concepts. He answered questions from the audience.

The meeting recessed for lunch at 12:21 pm and reconvened at 1:10 p.m.

Smart Beta Mr. Raggio introduced the next speaker, Mr. Jason Hsu, Vice Chairman of Research Affiliates. Mr. Hsu provided an overview of Smart Beta, discussing the history and theory. He answered questions from the audience.

Future Agenda Items

Commissioner Salimpour requested to see Mr. Luis Maizel’s country analysis on Turkey and the reasons they stopped investing there. Commissioner Navarro stated that the Board has not yet discussed the medical insurance issue in depth. He requested a discussion of the medical insurance issue, including the Affordable Care Act as it is currently written, and to possibly have other plans speak on the issue.


President Secretary

M I N U T E S

OF THE


SPECIAL BOARD MEETING OF MARCH 5, 2015

The Benefits Committee and members of the Board of Fire and Police Pension Commissioners of the City of Los Angeles met at the LACERS Board Room, located at the Los Angeles Times Building, 202 W. First Street, Suite 500, Los Angeles 90012 on Thursday, March 5, 2015.

COMMITTEE MEMBERS PRESENT: George Aliano, Chair

Pedram Salimpour, Vice Chair Carl Cade Sam Diannitto (participated telephonically)

OTHER MEMBERS PRESENT: Cielo Castro Ruben Navarro Belinda Vega Robert von Voigt

BENEFITS COMMITTEE SUPPORT STAFF: Joseph Salazar, Assistant General Manager

DEPARTMENT OF FIRE AND POLICE PENSIONS: Raymond Ciranna, General Manager

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

CITY ATTORNEY’S OFFICE: Alan Manning, Assistant City Attorney

Chair Aliano called the meeting to order at 8:33 a.m. The Benefits Committee meeting will be noted as a Special Board meeting since a quorum of the Board was present. All of the above Commissioners were present at the start of the meeting with the exception of Commissioners Castro and Vega, who arrived at 8:39 a.m. and 8:40 a.m. respectively.

1. OPERATIONS AGREEMENT WITH LOS ANGELES POLICE RELIEF ASSOCIATIONAND POSSIBLE COMMITTEE ACTION

Mr. Anthony Torres, Senior Management Analyst II, stated that the changes to theOperations Agreement are listed in the board report and most of the changes generallyfall in the category of improving the flow of information between LAFPP and theLos Angeles Police Relief Association (LAPRA).

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Chair Aliano stated that Mr. Kevin McCarthy, President and Ms. Cindy King, Executive Director of LAPRA had no issues with the Operations Agreement.

General Manager Ciranna thanked LAPRA for working with staff on the Operations Agreement.

MOTION

Commissioner Salimpour moved that the Benefits Committee recommend to the Board the approval of the Operations Agreement with the Los Angeles Police Relief Association (LAPRA), seconded by Commissioner Cade and approved by the following vote: ayes, Commissioner Cade, Diannitto, Salimpour, and Chair Aliano – 4; nays, none.

2. LAFPP AND LACERS AGREEMENT CONCERNING HEALTH AND DENTAL PLANSUBGROUPS AND POSSIBLE COMMITTEE ACTION

General Manager Ciranna stated LAFPP reached a tentative agreement with LACERSregarding health insurance coverage for a subgroup of approximately 66 members.LACERS recently shared their concerns of carrying these members on their plans. Staffintends to meet with LACERS on the issue. If a resolution is not reached, the Boardmay wish to explore other benefit options for the subgroup members.

Commissioner Navarro stated his concern regarding future retiree members who will notbe covered by LAFPP’s plans.

General Manager Ciranna stated that this brings up the issue of the Port Police whojoined the Plan in 2006. Staff needs to determine what actually was negotiated with theCity of Los Angeles in regards to their retiree health benefits.

Commissioner Navarro stated that the Benefits Committee should review the portabilityissue (e.g., member enrolled in Kaiser who retires in California and then moves toanother state will no longer be able to have Kaiser coverage) for new and potentialmembers. We have to review the issue and discuss it with the associations who providethe health plans for police and fire members.

General Manager Ciranna stated that staff will report back on the issue of the LACERSagreement.

3. GENERAL PUBLIC COMMENT ON MATTERS WITHIN THE COMMITTEE’SJURISDICTION

There was no public comment.


The meeting was adjourned at 8:41 a.m.

Chair

Secretary

M I N U T E S

OF THE


SPECIAL BOARD MEETING OF MARCH 19, 2015

The Board of Fire and Police Pension Commissioners of the City of Los Angeles met at the LACERS Board Room, located at the Los Angeles Times Building, 202 W. First Street, Suite 500, Los Angeles 90012 on Thursday, March 19, 2015.

COMMISSIONERS PRESENT: Belinda Vega, President Robert von Voigt, Vice President George Aliano Carl Cade Cielo Castro Corinne Tapia

COMMISSIONERS ABSENT: Sam Diannitto Ruben Navarro Pedram Salimpour



President Vega called the meeting to order at 11:14 a.m. All of the above-listed Commissioners were present at the start of the meeting.

1. CLOSED SESSION PURSUANT TO SUBDIVISIONS (a) and (d) OF GOVERNMENT CODESECTION 54956 TO CONFER WITH LEGAL COUNSEL REGARDING PENDINGLITIGATION AND POSSIBLE ACTION, IN JACK FRY V. CITY OF LOS ANGELES (COURTOF APPEAL, CASE NO. B259791)

The Board met in closed session.

2. GENERAL PUBLIC COMMENT ON MATTERS WITHIN THE BOARD’S JURISDICTION

There was no public comment.

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ITEM: D.1.b


The meeting adjourned at 11:22 a.m.

President

Secretary

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