regular meeting board of administration tacoma employes...

Regular Meeting Board of Administration

Tacoma Employes' Retirement System

1 :00 p.m., Thursda , April 10,2008 Tacoma Municipa I' Building North

Conference Room 16 733 Market Street

Tacoma, Washington 98402

Agenda

1. Call to Order

2. Roll Call

3. Citizen Comments

Page 3

Page 3

Page 3

Attachments

SUSPEND ORDER OF BUSINESS - Move to suspend order of business to go to New Business Item A- State Auditor Entrance Interview followed by and New Business Item B- Internal Audit presentation.

RESUME ORDER OF BUSINESS - Move to resume order of business.

4. Consent Agenda - Motion to accept the Consent Agenda, Page 4

A. Adoption of Minutes Page 4 -March 13,2008 Retirement Board Meeting Minutes

B. Retirement Transactions

C. Fund Activity and Reports

5. Old Business

None.

6. New Business

A. State Auditor-Entrance Interview -Joanne Klein

B. Internal Auditor - Presentation -Scottie Nix

Page 4

Page 4

5

Page 16

Page 16

Page 17

Attachments

L

7. Retirement Director's Report



733 Market Street Tacoma, Washington 98402

Agenda

Page 27

8. Good of the Order Page 40 -Investment Advisory Committee-Frank Underwood resigned March 31,2008. His term expired in June. RCW 35.39 requires three appointments. There are presently four members.

Would the Board like to take no action, appoint an individual or recruit,

9. Debriefing Page 41

Page 42 10. Adjourn

Public Meeting Notice



1 :00 p.m., Thursday, April 10,2008 Tacoma Municipa Buildin North


8 Tacoma, Washington 98402

Except for occasional closed executive sessions permitted by law, the meetings are open to the public. Meeting notices, agendas, and minutes are also published at the Retirement System website: ~w~.TacornaErn~loyesRetirement.com on the Internet and the Intranet. The toll free Retirement Number is 1-888-404-3787.



1.00 p.m., Thursday, April 10,2008 Tacoina Municipal Bullding North

Conference Rooin 16 733 Market Street

Tacoma, Washington 98402

Agenda

1. Call to Order

2. Roll Call

3. Citizen Comments

4. Consent Agenda

A. Adoption of Minutes

B. Retirement Transactions

C. Fund Activity and Reports

5. Old Business

6. New Business

A. State Auditor - Entrance Interview

B. Internal Auditor - Presentation


8. Good of the Order

9. Debriefing

10. Adjourn

Attachment

Page 3

Page 3

Page 3

Page 4

Page 4

Page 4

Page 4

Page 15

Page 16

Page 16

Page 17

Page 27

Page 40

Page 41

Page 42

Regular Meeting Board of Administration Tacoma Em loyes' Retirement System Yl 1 100 p.m., T ursday, April 10,2008

Agenda Item: 1. Call to Order

Agenda Item: 2. Roll Call

Mayor Bill Baarsma Rey Arellano Bob Biles Rodney Croston Dave Peterson Tim Ross Ken Turner Chris Webster Diane Wetzel

Agenda Item: 3. Citizen Comments

Y:\COR\RETBRD\BOARD PACKETS\2008\APRIL2008\APR1L2008AGENDA doc

3

Regular Meeting Board of Administration Tacoina Em loyes' Retirement S ystein 1 1 :00 p.m., T ursday, April 10, 2008

Agenda Item: 4. Consent Agenda

4A. Retirement Board Meeting Minutes

Background: Enclosed in the Retirement Board packet are the drafted minutes for the March 1 3, 2008 Retirement Board meeting for your review.

4B. Retirement Transactions

Background: Transactions for the Retirement Board's review and discussion.

4C. Fund Activity and Reports

Back~round: Attached ou will find the Asset Allocation Monitoring Report and the l inemoranduin froin Wils ire Associates.

Director's CommentslRecommendations: Board review and approval of fund activity and Consent Agenda.

Action Requested: Board approval of Consent Agenda.

4

Regular Meeting Board of Administratio11


1.00 p.m., Thursday, March 13, 2008 Tacoma Municipal Building


Tacoma, Washington 98402 DRAFT

Minutes

1. Call to Ordler

Mayor Baarsma, Chair, called the meeting to order on Thursday, March 13, 2008.

2. Roll Call

Members Present: Mayor Baarsma, Rey Arellano, Bob Biles, Rodney Croston, Steve Gross, Dave Peterson, Tim Ross, Ken Turner, Chris Webster, and Diane Wetzel

Others Present: Kelli Boettger, Maggie Coleman, Jim Curley, Joshua Davis, Bill Gaines, Mark Olleman, Patricia Pabst, and Melanie Panui

Absent: None

3. Citizen Comments

No comments.

Employee Representative Position

The Retirement Board welcomed Jim Curley who will serve a three year term as employee representative effective June 2, 2008.

Suspend Order of Business

Upon motion by Tim Ross, seconded by Diane Wetzel, the Retirement Board moved to suspend the Order of Business to consider New Business, Item A, Actuarial Presentation.

See page two of the minutes for the actuarial presentation.

Resume the Order of Business

Upon consensus, the Retirement Board resumed the Order of Business.

4. Consent Agenda

The Consent Agenda distributed to the Retirement Board consisted of the draft February 2 1, 2008 Quarterly Managers' Meeting minutes, February 2 1,2008 Retirement Board Meeting minutes; the March Retirement Transactions; and the Fund Activity Reports, noting no rebalancing was required for February in accordance with the memorandum from Wilshire Associates dated March 6, 2008.

Y.iCOR;RETBRD\BOARD PACKETS\~OO~\APRIL~~O~\MAR~OO~MI~ doc

5

Regular Meeting Board of Administration Tacoma Em loyes' Retirement System 1 :00 p.m., T ursday, March 13,2008 Page Two

1:

4. Consent Agenda (continued)

Upon motion by Bob Biles seconded by Chris Webster, the Retirement Board moved to approve the Consent Agenda.

In reviewing the meeting minutes from the February 2 1,2008 Retirement Board meeting, legal counsel clarified that the Alternate Board member may serve on the Disability Committee until the temporary Board vacancy has expired.

In further reviewing the meeting minutes from the February 2 1, 2008 Retirement Board and Quarterly Managers' meetings, Legal Counsel recommended that the Board may wish to clarify their policy on educational presentations. The Mayor clarified that educational presentations are indeed merely educational presentations.

5. Old Business

None.

6. New Business

6A. Actuarial Presentatioi~ - Mark Olleman

Mr. Mark Olleman presented to the Board a review of the cost of living increase and early warning letter.

Cost of Living

Provided in the Board packet, was a February 6,2008, Cost of Living Adjustments letter from Mark Olleman noting the July 2008 cost of living adjustment. Mr. Olleman introduced Mr. Joshua Davis to present the cost of living adjustment for 2008.

Mr. Davis noted the adjustments would be applied to member benefits in July 2008. The following chart was provided for summarization of the COLAS:

Date of Retiremei~t Percent of Original

COLA Purchasing Power*

On or before July 1, 1977 3.786% 50% July 2, 1977 through July 1, 1978 2.453% 50% July 2, 1978 through July 1,2007 2.125% 53.5% - 98.4% After July 1,2007 No COLA 100.0%

*Loss of purchasing power is not measured until a full year has passed since retirement.

6

Regular Meeting Board of Administration Tacoma Em loyes' Retirement System 1.00 p.m., T ursday, March 13, 2008 Page Three

K

6A. Actuarial Presentation - Mark Olleman

Summary of CPI Increases

The Seattle CPI-W experienced a 3.79% increase from 600.90 in 2006 to 623.65 in 2007. Therefore all members who retired on or before July 1,2007 are eligible for the full 2.125% COLA.

Members with retirement dates on or before July 1, 1977 will be included in the 50% restoration for 2008 and will have their benefits increased by 3.786%. Members with retirement dates on or after July 2, 1977 and on or before July 1, 1978 will also be included in the 50% restoration for 2008 and will have their benefits increased by 2.453%. Their resulting purchasing power will be 50% of their original purchasing power after the increase.

Overview of COLAs

Annual COLAs for TERS are granted in July to all members who retired on or before July 1 of the preceding year. The COLAs are based on the Seattle Consumer Price Index for Urban Wage Earners and Clerical Workers (CPI-W) for the two years proceeding the year in which the COLA is granted. Therefore, a member retiring in June of 2007 will receive the first COLA in July of 2008, and it will be based on the increase in CPI-W from 2006 to 2007. A member retiring in August of 2007 will receive the first COLA in July of 2009, and it will be based on the increase in CPI-W from 2007 to 2008.

Upon motion by Diane Wetzel, seconded by Dave Peterson, the Board moved to approve Milliman's recommendation of the Cost of Living increases as per Milliman's February 6,2008 memorandum.

Early Warning Calculations

Milliman provided the following early warning report.

We estimate that the Systems Funded Ratio which is based on actuarial assets has improved from 1 14.0% at January 1,2007 to 1 18.8% at January 1,2008 due to recognition of past asset gains and salar increases at the beginning of 2008 which were less than expected. However, as s i own in Exhibit 1, the projected Funded Ratio has deteriorated due to a 2007 market value return of approximately 3.9%

A a

which is less than the 7.75% actuarial assumption.

The current contribution rate of 14.00% is 3.37% less than the Normal Cost Rate of 1 7.37%. The Board is currently monitoring this situation since the Board's Funding and Benefits Policy says the contribution rate should stay within 3.25% of the Normal Cost Rate. The Funding Reserve (assets in excess of the Actuarial Accrued Liability) is currently being used to fund the difference between contributions and Normal Costs.

7

Regular Meeting Board of Adininistration Tacoma Employes' Retireinent Systein 1.00 p.m., Thursday, March 13, 2008 Page Four

6A. Actuarial Presentation - Mark Olleman

Early Warning Calculations (continued)

Based on our estimate that the January 1 , 2008 Funding Ratio is 1 18.8%, and that the Funding Reserve is projected to grow instead of being amortized or used up, the Board's Funding and Benefits Policy labels this as a "no action" zone.

No action was required as per the funding policy.

Annual Proiects

Mark Olleinan presented the tiinelines for the annual projects for the year.

Plan Design

A request was made to provide background inforination on the present plan design and plan design considerations.

6B. Disability Retirement

As per the recommendations of the Disability Committee, upon inotion by Tiin Ross, seconded by Dave Peterson, the Retireinent Board to approve effective March 1, 2008, the application for Keri-Louise Heishinan as a perinanent and total disability in accordance with TMC Section 1.30.630, which provides that a ineinber inust be permanently and totally incapacitated either physically or inentally for the performance of duty.

6C. Board Election

The City Clerk's Office received a noinination petition for the Retirement Board election froin Jiin Curley. February 26, 2008 was the last day to file and February 29, 2008 was the last day to withdraw. As per TMC under Section 1.30.470 (C), no election is necessary.

As er the ordinance, the Board of Adininistration shall, at their next meeting, declare K suc candidate elected as a ineinber of the Board of Adininistration.

Jiin Curley's terin of office as an einployee representative would be froin June 2, 2008 to June 1,201 1.

Upon inotion by Rey Arellano, seconded by Chris Webster, the Retireinent Board declared Jim Curley einployee representative froin June 2, 2008 to June 1, 20 1 1.

8

Board of Administration Tacoina Employes' Retireinelit Systein 1 :00 p.m., Thursday, March 13, 2008 Page Five

6D. Seminars

NAPPA

The National Association of Public Pension Attorneys conference is being held in Boston, MA froin June 24-27, 2008.

We would like to request the Board's assistance in approving the attendance of Steve Gross, legal counsel, at the National Association of Public Pension Attorneys in June.

Upon inotion by Chris Webster, seconded by Rey Arellano, the Retireinent Board inoved to approve the attendance of Steve Gross at the National Association of Public Pension Attorneys conference being held in Boston, MA froin June 24-27, 2008.


The Mayor and Retirement Board expressed ap reciation to Kelli Boettger or her K assistance in serving the Board, wishing her in er new job.

8. Good of the Order

Strategic Thinking

The Retireinent Board confinned their interest in having the Strategic Thinking meeting on May 22, 2008 froin 10:OO a.m. to 12:OO noon followed by lunch.

It was suggested that after the Strategic Thinking presentation the Board inay have an interest in a workshop with speakers.

9. Debriefing

No discussion.

10. Adjourn

Upon inotion by Chris Webster, seconded by Dave Peterson, the Retireinent Board inoved to adjourn.

Patricia F. Pabst Retireinent Systein Director

Kelli Boettger Recording Secretary

Robert K. Biles Secretary to the Retireinent Board

9

Regular Meeting Board of Administration Tacoma Em loyes' Retirement System I: 1.00 p.m., T ursday, April 10,2008

A~enda Item: 5. Old Business

None.

15

Regular Meeting Board of Administration Tacoina Employes' Retirement S ystein 1 100 p.m., Thursday, April 10,2008

Agenda Item: 6. New Business

6A. State Auditors - Entrance Interview

Background: Joanne Klein froin the State Auditor's Office will be present to hold the entrance interview with the Retirement Board.

The projected hourly rate for the auditors is $78.50 and has not increased in several years. It is estimated that it will take thein 184 hours to complete the audit; therefore, the total projected costs for the audit are $14,444.

Director's Comments/Recommendations: Board discussion.

Action Requested: No Action.

16

Regular Meeting Board of Administration Tacoina Employes' Retireinent Systein 1.00 p.m., Thursday, April 10, 2008

Agenda Item: 6. New Business

6B. Internal Auditor - Presentation

Background: Scottie Nix, Internal Auditor for the City of Tacoma, will be providing an overview of the Internal Audit Function. In her role as Internal Auditor for the City of Tacoma, Scottie coordinates all the audits and is invited to the entrance and exit interviews.

In worlung with Scottie, we have developed a process for reporting investment manager coinpliance with SEC by asking that the investinent managers address the following two questions each month. The infonnation appears in the Executive Suininary which is presented to the Retireinent Board at the Quarterly Managers' meetings.

Questions:

-Is the firm currently in coinpliance with the SEC? If the SEC has issued any disciplinary actions against the firin during the time period stated above, please provide detailed explanation in Exhibit A.

-According to the f i n d s knowledge, have any holdings, whose securities are held by the portfolio referenced above, failed to timely file any reports to stay in coinpliance with the Sarbanes-Oxley Act? If the answer is yes, please provide the company naine and infonnation regarding the late-filing report in Exhibit B.

In addition, we been workin with Scottie for ways to provide the Board opportunities to assess their risk aversion an f their coinpliance. We have modified, for the Board's review, a Board self-assessment questionnaire that the Board has previously utilized.

We are not anticipating that the Board inay have time to discuss this document in detail at the April Retireinent Board meeting; however, we would like feedback froin the Board on whether or not they would find this type of tool helpful.

Director's Comments/Recommendations: Retireinent Board discussion.

Action Requested: Retireinent Board discussioii.

17

Tacoma Employes' Retirement System 2008 Board Self-Assessment

TERS Board Self-Assessment Questionnaire

Board Self-Assessment Objectives:

To learn from the experiences of this year's work To identify specific actions that will strengthen Board work methods and results

VISION

The vision of the Tacoma Employes' Retirement System focuses on the preferred future for the plan participants and communication to the plan participants and our partners where we are headed and why.

Retirement Board Mission

To provide quality benefits by prudent management of financial assets

and pmfessional plan adntinstration

The Board of Trustees will achieve this mission by:

1. Administering the trust solely in the interest of the plan members

2. Assuring accurate information to the beneficiaries as to the nature and amount of the trust and the plan members' rights therein

3. Exercising reasonable care and skill in the administration of the trust, including the investment of the trust estate and realizing any claims owing to the trust

4. Dealing impartially with the plan members

18

TERS Board Member Questionnaire

Dimension 1 - Work Mission and Values The Board consistently looks to its shared mission and values as a guide for its decisions. It adapts to distinctive characteristics and the culture of the City of Tacoma and its Retirement System. I t exemplifies and reinforces the organization's core values.

1. I n discussing key issues, it is not unusual for someone on the Board to talk about what this organization stands for as it relates to the topic at hand.

Strongly Disagree

0

Strongly Agree Agree Disagree

3 2 1

2. The organization's values are often discussed at Board meetings.

Strongly Agree Agree Disagree Strongly Disagree

I. I n my experience, the Board's key decisions are consistent with the mission of this organization.

Strongly Agree

3

Agree

2

Disagree Strongly Disagree

0

4. As a Board member, I have a good understanding of the Retirement System's mission.


5. Upon joining the Board as a Board member, I was provided an orientation which included information on the Retirement System's systems Vision and Mission.

Strongly Agree

3

Agree

2


0

6. I believe in the Retirement System's system Vision and Mission.


7. Each person on the Board's actions reflects a good understanding of the standards of the professions working in and on behalf of the Retirement System.

Disagree

1

Strongly Disagree

0

Strongly Agree

3

Agree

2

19

Dimension 2 - Work Approach The Board is aware that it often confronts issues that have subtle and complex aspects, so it draws upon a variety of perspectives and viewpoints as it searches for best-available actions and solutions. The Board approaches problems from a broad outlook and examines all aspects of the issues before acting.

Mark 7&Wmt Relleds Ywrr &&aw mis Past Y i r on 7 h Baed-

1. When issues come before the Board, they are framed in a way that helps all Board members see the connections between each issue and TERS' overall strategy.

Strongly Agree

3

Agree

2

Disagree

1

Strongly Disagree

0

2. The Board takes consistent steps to keep informed about important trends in the larger environment that might affect the organization.


3. me basic issues the Board deals with are well understood by all our Board members.


3 2 1 0

4. And the complexity of the issues the Board deals with is well understood by all our Board members.


3 2 1 0

5. Recommendations from the Retirement System's management include good healthy dialogue with the Board.

Strongly Agree

3

Agree Disagree Strongly Disagree

0

6. The Board explicitly examines the possible pitfalls of any important decision.


3 2 1 0

20

Dimension 3 - Work Strategy The Board keeps its time and attention focused on those issues and priorities vital to the best interests and future of the City of Tacoma plan members it serves. The Board cultivates and concentrates on processes that sharpen its work priorities. The Board directs its attention to those priorities. The Board anticipates potential problems and takes action before issues become urgent.

Mark me m a s t Year on me &muis

1. Within the past year, the Board has reviewed the Retirement System's strategies for attaining its long-term goals.

Strongly Agree

3

Agree

2

Disagree

1

2. The Board sets clear strategic priorities for the year ahead.

Strongly Agree

3

Agree

2

Disagree

1

Strongly Disagree

0

Strongly Disagree

0

3. The Board discusses events and trends in the environment that may assist the Board with strategic planning goals.

Strongly Agree Agree Disagree

4. The Board strives to discuss issues before they become urgent or critical.

Strongly Agree

3

Agree

2

Disagree

1

Strongly Disagree

Strongly Disagree

0

5. TERS Board meetings are proactive focusing more on preparing for the future than on current concerns.

Strongly Agree Agree

2


0

6. The Board accepts responsibility for the actions made by the Retirement Board.


7. The Board explicitly uses long-range priorities as a guide in dealing with current issues.

Strongly Agree

3


0

21

Dimension 4 - Board Learning The Board takes necessary steps to make sure that Board members are well informed about their purpose, role, work and responsibilities. The Board intentionally creates opportunities for education and growth of its members, individually, and the Board as a whole. The Board regularly seeks feedback about its own performance. It pauses periodically to reflect on its strengths, limitations and even its mistakes.

That && Re/lect% Your &a&#u@ mis Part Year on 77m Bosrd.

1. I have participated in discussions with new members of the Board about the roles and responsibilities of Board membership.

Strongly Agree

3

Agree

2

Disagree

1

Strongly Disagree

0

I. I have received helpful feedback on my performance as a member of the Board.


3. The Board has conducted an explicit examination of roles and responsibilities.

Strongly Agree

3

Agree

2


0

4. I have participated in Board discussions about improvements that can be made in the future.


5. The Board allocates funds for the purpose of Board education and development.


22

Dimension 5 - Board Collaboration The Board nurtures the development of its members as a group and attends to the Board's collective welfare. The Board fosters a sense of cohesiveness - the ability to function as a strong and cohesive team - understanding that cohesiveness is an essential quality of effective governance.

ThatSastMectr Ywr&#&acg ZhisPast Yaaron nteBw!d.

1. The Board has a good relationship.


0

2. Differences of opinion usually resolved through good respectFul communication


3. The Board encourages good respectful Board dialogue.

Strongly Agree

3

Agree

2


0

4. At our Board meetings most of the Board dialogue is about policy issues rather than administration.


5. The Board is as attentive to HOWit reaches conclusions as it is to WHATis decided to ensure due diligence.

Strongly Agree

3

Agree

2


0

6. The Board deliberately cultivates future leaders for the Board, rather than just relying on the natural emergence of leaders.


2


0

7. Board members have the same information on all issues particularly important issues.


23

Dimension 6 - Risk Aversion The Board believes that public pension systems face a large number of risks on the administrative and benefit side of business as well as on the investment side of business. Some inherent risks do not change much over time. The Board is aware of those risks and makes policies accordingly.

1. The Board feels informed of the audit processes performed on the Retirement System (i.e. financial audit by the State Auditors, actuarial audit, custodial audit, audit of investment transactions, quarterly audit of the investment manager's performance, review of actuarial assumptions, review of contribution rates, review of investment return assumptions and audit of legal compliance).


2

Disagree

I

Strongly Disagree

0

2. The Board's Annual calendar informs the Board of their required Board activities for the year (i.e. review of investment return, review of actuarial assumptions, and review of asset allocation assumptions).

Strongly Agree

3

Agree

2


0

3. The Retirement Office's Annual calendar informs the Board of the required activities for the Retirement Office for the year (i.e. preparation of the pension roll, statement of accounts, 1099R's, and Annual Report).


2


0

4. The Board feels that they participate in strategic thinking exercises discussing the impact of social, political, technological and economic changes on the future of pension systems directly or indirectly.


2


0

5. The Retirement Board feels informed about benefit administration issues and communication with plan members (i.e. retirement booklet, retirement ordinances, statement of accounts etc.).


6. The Board feels informed about the checks and balances being performed in the Retirement Office (i.e. all calculations, reconciliations and correspondence have two audits, benefit estimates are also audited by the actuary)


2


0

24

Dimension 6 - Risk Aversion (continued) The Board believes that public pension systems face a large number of risks on the administrative and benefit side of business as well as on the investment side of business. Some inherent risks do not change much over time. The Board is aware of those risks and makes policies accordingly.

7. The Board feels informed about the process for monitoring investment managers and their transactions (i.e. investment return, compliance with Investment policy, compliance with individual investment manager guidelines, compliance with SEC and Sarbanes Oxley etc.)


8. The Board feels informed about compliance with IRS regulations and other compliance issues.

Strongly Agree

3


0

9. The Board has created an approach to acceptable levels of risk and sticks to it (i.e. annually completing the Board Self-Assessment Questionnaire).

Strongly Agree

3

Agree

2

Disagree

I

Strongly Disagree

0

25

Dimension 7 - Board Governance The Board understands the conduct of the Board as fiduciaries.

1. The Board annually reviews the City of Tacoma Code of Ethics and adheres to it.

Strongly Agree Disagree Strongly Disagree

. The Board annually reviews the Open Public Meeting A d and adheres to it.


3 The Board annually reviews their Bylaws and Policy on Agenda Procedures and adheres to them.


. The Board annually invites the Legal Department to do a presentation on Fiduciary Responsibility to orient new Board members as well as serve as a refresher.


3 2 1 0

5. The Board annually reviews its Vision and Mission Statement and engages in strategic thinking.


3 2 I 0

6. The Board discloses conflicts of interest.


0

7. The Board annually reviews its composition and education requirements.


3 2 1 0

26

Regular Meeting Board of Administration Tacoma Em loyes' Retirement System 1 :00 p.m., T 1 ursday, April 10,2008

Agenda Item: 7. Retirement Director's Report

Addendum

The Retirement Director's Report serves as an addendum to the Retirement Board Meeting minutes.

27

Tacoma Employes' Retirement System Retirement Director's Report

April 10,2008

NASRA Newsclips

A hard copy of the NASRA Newsclips has been enclosed for you.

Retirelnent Office Relocation

At the Retirement Board at the October 2007 Retirement Board meeting moved to approve the proposal to relocate the Retirement Office to the Department of Public Utilities after reviewing a cost benefit analysis.

Attached is a drafted floor lan providing approximately 3,000 square feet, increasing the area for the workstations, ? iling systems, a retirement counseling room, production room and space for two vacant positions.

As discussed at the October 2007 Retirement Board meeting, in serving the increased number of customers it may be necessary to budget for another office assistant position which would be presented to the Board in the form of a budget recommendation.

The fees for the estimated square footage is $30.00 a square foot for 2008.

The space is located on the ground floor of the main building at the Department of Public Utilities. This space will rovide for a handicap accessible entrance as well as parking for our customers. In ad 2 ition there will be easy access to the cafeteria.

We are in the processing of beginning the budget for 2009-2010. We are being asked to provide budgeted position information to the Budget Office by April 14,2008.

With that understanding we would like to provide the Budget Office with two new positions for the p oses of continuing dialogue with the Board as we progress through the budget process ?' or the 2009/20 10 biennium. The positions are as follows:

Office Assistant - Additional Position -We would like to budget for an additional Office Assistant position should we find it necessary to recommend to the Board of Administration that an additional Office Assistant is needed after our move to the Tacoma Public Utilities admin building as we will be providing service to more walk-in customers.

Senior Financial Analyst -Up-grade -We would like to budget for a Senior Financial Anal st to provide promotional o portunities withln the department in order to retain Lowledgeable and qualifie 8 individuals should we want to recommend to the Board of Adrnimstrative a de artmental promotion from the position of Financial Analyst to Senior Financia Y Analyst.

Having the De artment be able to consider a departmental promotion from the position of Financial Ana f' yst to Senior Financial Analyst would allow the Assistant Retirement Director to delegate some current duties such as the preparation of the Annual Report and more com letely hlfill the duties of Assistant Retirement Director by fully assuming .p responsibi ity for the day to day operation of the Retirement Office.

28

Tacoma Employes' Retire~nent Bystem Retirement Director's Report

April 10,2008

City Collncil --Marc11 18,2008

The City Council at the March 18,2008 meeting a proved the contracts for Barclays

d C Global Investors and Janis Capital Mana ement, L C as per the recommendation of the Retirement Board at the February 2 1,20 8 Retirement Board meeting.

Caleudar Reminders

The May 22,2008 Strategic Thinking - Special Retirement Board meeting is planned from 10:OO a.m. to 12:OO p.m. in the Tacoma Municipal Building - North - Room #16.

The June 12,2008 Retirement Board meeting was rescheduled from June 12,2008 to June 13,2008 for the actuarial presentation on the experience study. A plan history and a history of previous plan design considerations will also be provided.

Retirement Office received approximately 230 applications for our administrative secretary position. We will be interviewing 8 individuals for finalists. We would anticipate having someone in the position early in May.

A special thanks to Rodney Croston for his assistance.

Web Site

Just a reminder the meeting notices, agendas, minutes, Annual Report, Summary Annual Report, forms and ension calculator are on our Internet and Intranet web site at www.TacomaEm~ P oves'Retirement.com.

29

PBS Special, Retirement Revolution, will air first segment next Monday, March 3 1 Page 1 of 10

Pabst, Patricia . _. . .. _. . ..__

From: The NASRA Newsclips List [[email protected]] on behalf of Keith Brainard [[email protected]]

Sent:

To:

Thursday, March 27, 2008 8:03 AM

Subject: NASRA News Clips

NASRA News Clips March 27,2008

National Association of State Retirement Administrators

PlanSponsor Magazine names Plan Sponsors of the Year ' Public .PJanSPonsorof the .Year: ..M~is.soCur5.Statte~eeF..r_r?p!oyyeee~SSSRet5_remment

System

Finalistfor Public Plan Sponsor of the Year: MERS af Michigan

PBS documentary, Retiv_eementRevoIutii c!.,~_z.~.. w11! ...a ii~..~rst.seg~e_nttn_e_xt..M.oond~ - .. .. - - .

M-anh.3l-brnanma.rkets

N.e.w~.&!e~as.e.:~.U ... S~.~B.u_~ea.u...of ..L.abe .sc... Sttatiisti.cc~..~.e!.eassessssup-d.~teddde.c3it.i,oonnnno.fl.E~pC~yee Benefit3 in State and Local Government

U.~..Cee~~ssBuureauuurepPoorttsssscoont~.nnu~ddddmoo~emmeenttt.of ..tbbe..n.ati.o.n.'.s..p.opu~.ation..t~..S.o_uth and West -.-

PlanSponsor Magazine names Plan Sponsors of the Year

Public Plan Sponsor of the Year: Missouri State Employees' Retirement System

March 2008

In late January, as the markets roiled, Steve Holrnes and other Summit Strategies Group consultants had a five- hour meeting with investment staffers at their client, the Missouri State Employees' Retirement System (MOSERS). Were the folks from the $8.2 billion public fund focused on retrenching or defensive moves? Hardly.

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"Nobody was panicking," says Holmes, President of the St. Louis-based Summit. "It was, 'Do you think we are too early for the bargain-hunting?"' So they brainstormed ideas about how to move into areas such as subprime mortgages. "It does not get any better than that for an investment professional," he says.

The Missouri system-which celebrated its 50th anniversary in 2007 and has about 100,500 participants-has an innovative and very flexible organizational structure that lets it take advantage of opportunities, Holmes says. "It has allowed MOSERS to be more nimble than any public fund I have ever seen," he says.

Not that MOSERS is contrarian for contrarian's sake. "I do not think that they want to be different for the sake of being different," Holmes adds. "I think they want to be different for the sake of making money."

Nominations for the Missouri fund as Plan Sponsor of the Year cited discussions with officials from large state funds about how to emulate "the MOSERS way." That does not surprise Keith Brainard, Austin, Texas-based Research Director for the National Association of State Retirement Administrators (NASRA). "I think they are best known for creating an environment of excellence in governance and management that is worth considering emulating," he says. "Many people in the public-pension community look to [Executive Director] Gary Findlay and MOSERS for ideas and examples on public-pension administration and management."

Todd Smith recalls going to a public-fund conference as a new MOSERS board member in 2003 and being surprised by the fund's reputation nationally. "It is just phenomenal that we are a relatively small fund, but people look to us," says Smith, who stepped down as board chairman in January but who remains on the board. "I think that is because of our track record. Our goal is to be the absolute best in investments and in our service to our customers."

Historically, Findlay says, boards play a very active role in setting and implementing policy, but MOSERS changed its governance setup fundamentally in 1999. At a NASRA meeting, Findlay and the board's then- chairman saw a presentation by governance consultant John Carver. MOSERS did not face any governance crisis at the time, Findlay says, adding that, "It was really just a different look at a business model that appealed for a number of reasons. "

At a subsequent two-day workshop for MOSERS board members, Carver talked about problems that boards often have. They include focusing on implementation minutiae, acting based on the views of an individual rather than the group, and allowing staff to control the board's agenda. "The model enables the board to focus on the larger issues; to delegate with clarity; to control management's job without meddling; to rigorously evaluate the accomplishment of the organization; to truly lead its organization," according to a description of Carver's approach on his Web site, www.PolicyGovernance.com. "In contrast to the approaches typically used by boards, Policy Governance separates issues of organizational purpose (ENDS) from all other organizational issues (MEANS), placing primary importance on those Ends. Policy Governance boards demand accomplishment of purpose, and only limit the staffs available means to those that do not violate the board's pre-stated standards of prudence and ethics."

Following that workshop, Findlay says, the board established a governance committee that developed MOSERS' governance document over about six months. Almost a decade later, the document "is still pretty much intact," he adds, except for minor tweaks to adjust to new developments such as law changes. However, the governance setup would not work without the underlying statutory framework, he hastens to add. State law gives the MOSERS board the power to control its own destiny, he says, including determining the system's budget and staff-pay levels, purchasing processes, and contractual arrangements.

"In our case, the board is very involved in the development and review of policy, and then they essentially become an oversight board," Findlay says. "So, they do not get involved in the details of implementation, but they do pay a lot of attention to monitoring how well we implement the policy that they established." That setup does not happen a lot outside mega-size funds, Brainard says, since they have the in-house expertise to merit that kind of independence. That structure gives the operations staff more leeway to make changes quickly when they get results of customer- satisfaction surveys (see "Customer Service, the MOSERS Way," page 52). In addition, it gives Rick Dahl,

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PBS Special, Retirement Revolution, will air first segment next Monday, March 3 1 Page3 of 10

MOSERS' Deputy Executive Director and Chief Investment Officer, the ability to hire or fire managers without board approval. Dahl also can make some shifts in the asset allocation without a board OK. "The way our investment policy is structured, we have a target, and within that there is a range. The target is X%, and we can invest within a range of Y% to Z%," Findlay says. "They make that call, so, if there appears to be an opportunity, they can do it immediately." Says board member Smith, "Our philosophy is, 'This is what we hired you to do. Go do it."'

For manager changes or investment shifts, Findlay, Dahl, and Holmes all have to agree. "In our implementation process, the investment consultant is one of the key players," Findlay says. When the board changed the governance structure in the 1990s, Holmes says, it wanted a system of checks and balances. "There is no question that I work for the board, and I work with Rick," he explains. In his work with the investment staff, he adds, rather than immersing himself in day-to-day details, "I deal far more with strategic issues, as a sounding board and a reasonableness check." The setup allows Dahl to be patient, to be nimble, and to be innovative, Holmes says. "I think I have got a lot of freedom to do my job," Dahl says. The best part of that? "From my standpoint, it is being able to come in every morning and assess whether there is an opportunity we want to take advantage of, and if we find something that makes sense, we are in a position to move on it very, very quickly," he says. "It puts us in control of our results.

"If you have to go to a board for approval and educate them on the opportunity, sometimes, by the time you do that, the opportunity passes," Dahl continues. "So, at the end of the day, investment results at many public funds are not necessarily a reflection of what was possible to do. They are a combination of what was possible to do and the timing of board meetings."

The Missouri system's entrepreneurial atmosphere "absolutely" suits Findlay best, Smith says. "I think that is probably the only reason that he and some of the other employees are still here, because we give them that freedom," he says. "I know for a fact that many of them have had offers to move to another job and double their salary, and they have said no. They enjoy the environment we have here." Findlay notes that good governance setups also work well in attracting high-quality replacements for those who leave organizations.

That flexibility has paid off for MOSERS' investment portfolio several times in the past few years. Dahl and his colleagues traded out of both small-cap equities and REITs before their 2007 declines and, when they foresaw trouble in early 2007 for high-yield debt, which MOSERS held via a BlackRock separate account, they figured out how to get away from the exposure without getting rid of the manager. "We were able to short high-yield CDX contracts (credit default swaps that are contracts for insurance on bonds) on top of these bonds," he explains. "Essentially, what that is doing is eliminating the high-yield risk, but not giving up the alpha we expected from B lackRock." By September, MOSERS had totally eliminated its high-yield bond exposure.

"It is possible that these decisions could have been implemented within a more-traditional governance approach," Dahl says. "However, the amount of time spent educating lay trustees as to the merits of these decisions, and then getting 1 1--or however many happened to make up the boardlcommittee-independent risk tolerances incorporated into the decisions lowers the probability that the decisions get implemented."

Overall, MOSERS had a one-year return of 13.2% as of year-end 2007, and a five-year return of 15.1 %. "We have consistently been in the top quartile across time periods and, in many instances, in the top 15%," Dahl says of its ranking among public funds. "While universe results are still sketchy at this time, I think our 2007 results will be near the top of the public-fund universe."

The fund reviews the model annually and does an in-depth reexamination every five years. The last in-depth review, in summer 2007, led to the current allocation targets of 45% for public equity, 30% for public debt, and 25% for alternatives, which includes 15% for real assets including real estate and natural-resource-based opportunities, and 10% for private debt and equity investments.

With that, the alternatives target went up 5% and the public equity target went down a corresponding 5%. The move, Findlay says, was motivated by "a belief that the public markets are not going to provide us with the return we need to fund the liabilities we have in place. This also gives us an opportunity to mitigate risk somewhat, because we get exposure to areas that are totally uncorrelated to the public markets."

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Doubling Down

What investments are Dahl and his colleagues thinking about now? Whether to pull back from emerging markets, for one. "We have made a ton of money by being overweight, and it gets to the point where the odds go down," Dahl says. With current valuations about equal to the U.S. markets, he questions whether that can continue, given the historical discount valuations. "You have got to buy the argument that something fundamental has changed for the valuations to be sustainable," he says. Not likely, he believes.

Where might MOSERS put some of that money? "Obviously, the subprime meltdown has created some great opportunities," Dahl says. "We are spending a lot of time thinking about how best to enter that space and take advantage of a situation that we think will provide mid-teens returns going forward."

As Dahl points out, not every MOSERS investment gamble works. "Japan has been a very sore spot in the portfolio," he says. "We initiated an overweight in Japanese equity about a year and a half ago and, to do that, we underweighted in Euro equities. That trade has not worked out." The investor sentiment toward Japanese equities is currently very negative, he thinks. MOSERS' response? "Two months ago, we doubled down on our bet." Dahl explains, "That is the way we operate. "We make decisions. If we believe they are .the right decisions and the market goes away from us, normally, we will put more money in."

The contrarian investment philosophy has always been part of MOSERS, Dahl says. When most people run in the other direction, MOSERS often invests and, when most flock to an investment, MOSERS frequently walks away. "The pack, by definition, tends to be very average, "he says. "You have to step away from the pack to add value."

MOSERS measures just about everything it does in its customer service for participants and retirees. So, the fund's staffers know that people who call in with questions wait an average of 48 seconds (including automated attendant time) to talk to someone, and that 77% of new retirees found the information in their retirement packets easy to understand.

Its focus on customer service has led the fund to rank first nationwide in a peer group of about a dozen similar size public funds in an analysis by Toronto-based CEM Benchmarking Inc. MOSERS' cost per member and annuitant totals $70 per year, compared with an $84 average among its peer group and $1 03 for the CEM universe, says Karen Stohlgren, MOSERS ' Deputy Executive Director and Chief Operations Officer. "We are looking to offer the highest service we can at the lowest cost we can," she says.

"[Measuring customer satisfaction] is a growing trend, and it is based on the recognition that all public funds are in the customer-service business," says Keith Brainard of the National Association of State Retirement Administrators. "They have realized, 'We are not here to manage money, and we are not here to build databases. We are here to help customers."'

MOSERS actually signed on with CEM a decade ago to benchmark customer satisfaction. Every August, Stohlgren gets the annual survey, and she and her colleagues must gather the information about the system, which CEM then uses to do the benchmarking analysis. The wide-ranging survey has about 250 questions, and some of those have subquestions. "It is a lot of work gathering the data for the survey," she says.

"We feel that the data-gathering is well worth the effort," Stohlgren continues. "We use the data to develop performance standards and to check how we are doing compared to other top-notch systems in the public-pension industry-and we always find things we can do just a little bit better."

Finalist for Public Plan Sponsor of the Year: MERS of Michigan

Plansponsor Magazine March 2008

The Municipal Employees' Retirement System (MERS) of Michigan likes to make moves proactively. So, the

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system-which has a $6 billion defined benefit (DB) plan with 37,900 active participants and 22,800 annuitants, as well as a $230 million-plus defined contribution (DC) plan with 7,300 participants--has come up with new employer offerings in both the retirement and health-care arenas that it hopes pay off in the future.

MERS, a voluntary statewide plan, functions as a trust for the member municipalities that choose to participate, so that they can pool their assets and get better returns and more cost-effective services.

In 2006, MERS started offering a hybrid retirement program that includes both a DB portion and a DC account balance, in addition to a DB plan and a DC plan. The hybrid program's two portions are separate and have separate eligibility requirements and vesting schedules, but are earned together.

MERS got the idea for its hybrid after evaluating its membership's needs and the impact of the trend toward DC plans (other public plans with hybrids include Louisiana, Ohio, Oregon, and Washington, MERS says).

Good Reaction

Union and employee reaction has been positive thus far, MERS says, especially where the current benefit is a DC plan. Each municipality has its own collective bargaining arrangement, so they and their unions agree on which option to use. Because of bargaining cycles, it takes a while for a new idea to take hold.

MERS CEO Anne Wagner, who sees a new wave of local governments starting to think about ending their traditional pension plans for new hires, hopes that the hybrid plan draws many of them going forward. "We believe it is a much better option than defined contribution as a stand-alone retirement plan," she says.

Giving participants full responsibility for their retirement income does not work well, she thinks. "We have had members with a defined contribution plan who retire and call saying, 'Where is my check?'" she says. "We did lots of education, but it did not seem to get through to them that they are on their own."

The hybrid combines employer-cost predictability with the guaranteed ability of retirees to get an income stream for life, Wagner says. "In the hybrid plan, you [the employer and union] select the multiplier, and that does not go back to the bargaining table in the future," she says.

Unions can, however, seek to renegotiate the terms of the DC plan, she says. That includes contribution requirements of the employer and/or employee as well as issues such as vesting and loans. Currently, one county road commission has moved to the hybrid plan, she says, and about 30 other municipal sponsors are considering the shift.

Health Care Costs

MERS also came up with a four-pronged approach to help municipalities deal with rising health-care costs. First, a group-buying program that started in 2004 allows them to pool together to buy life, accidental death and dismemberment, and short-term and long-term disability insurance.

Second, in 2005, the system developed MERS Premier Health, a municipal risk pool for employee health benefits. Plans had seen rate increases of up to 25% before it started, Wagner says, and, with competition and the greater purchasing power of a group, that dropped down to single digits within the first two years.

Third, MERS started the Health Care Savings Program, which lets employers and employees set aside money for the workers' post-employment health care within an IRS-approved medical trust. Employers can make tax-free contributions to an employee's individual account and, after leaving employment, a person can use his or her account balance for tax-free reimbursement of medical expenses.

Fourth, in response to new Governmental Accounting Standards Board (GASB) regulations on accounting for other post-employment benefits (OPEBs), MERS set up the Retiree Health Funding Vehicle, which lets municipalities put aside money within the same trust to offset future OPEB liabilities.

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"It really addresses the needs of our smaller and mid-size communities," Wagner says of the four-pronged approach. "They were out there on their own, sledding on very, very difficult terrain."

457 Plan Sponsor of the Year: Hawaii

Plansponsor Magazine March 2008

Participation in the State of Hawaii Deferred Compensation Plan stands at about 35%. That far exceeds the average 2 1.6% participation rate among state 457 plans, according to data from the National Association of Government Defined Contribution Administrators, Inc. (NAGDCA). Plan officials point to a major education push and a culture that highly values saving as explanations.

However, they want more of the approximately 57,000 eligible state and Hawaii County, Maui County, and Kauai County employees to join the plan. (The City and County of Honolulu do not participate.)

"We would like to see that participation rate increase, so that employees can take advantage of the benefits," says Cynthia Akiyoshi, a Personnel Management Specialist at the State of Hawaii Department of Human Resources Development. "Their deduction can lower their tax bracket and, knowing that employees are living longer, this can help them to be able to have enough supplemental retirement savings."

So, a bill recently introduced in the Hawaii State Legislature would automatically enroll employees into what they call the "Island $avings Plan." According to Senate Bill No. 3066, "Relating to the State of Hawaii Deferred Compensation Plan," all new state and participating county employees hired on or after July 1, 2009, would be required to join the plan and have 1 % of their gross monthly wages deducted and deposited into a default investment option selected by the plan's board. They could opt out of the plan within 90 calendar days.

"If it goes through, it will really help prepare our employees for retirement by enhancing the growth potential of their retirement savings and help us with enrollment," says Marie Laderta, the chairperson of the plan's board and Director of the Department of Human Resources Development. At press time, a hearing had not been scheduled on the legislation; the legislative session lasts until May.

Cost of Living

Hawaii's high cost of living helps explain why the minority of employees participates now, Laderta says, along with inertia. (The plan does not have an employer match.) Inertia also likely plays a role in the reality that only 2.5% of participant assets have shifted to lifecycle funds since their 2004 introduction in the plan, with nearly half of total assets remaining in stable value.

"The board has been grappling with promoting lifecycle funds and increasing participation, and they are looking at different ways to do that," says Kim Alger, Boston-based business leader for the public sector at CitiStreet, the plan's third-party administrator (TPA).

Having automatic enrollment and using lifecycle funds as the default would help a lot. "They also are looking at simplifying the enrollment form, so that employees do not have to walk through all of the 10 core funds to find lifecycle funds," she says.

Doing automatic enrollment in a 457 plan is a fairly new concept, Alger says, but some states now are following corporations in moving toward it in the wake of the Pension Protection Act. Texas is implementing it, she says, and a number of other states have legislation pending that would allow automatic enrollment in a state deferred compensation plan.

All state and participating county employees eligible for the state's primary retirement vehicle, the State of Hawaii Employees' Retirement System (ERS), can participate in the 457 plan. As of July 2006, new hires automatically participate in a new ERS contributory plan to which they contribute 6% of their pay.

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Existing employees could stay in the noncontributory plan or switch, and approximately 55% (which includes the City and County of Honolulu employees) remain in the noncontributory plan.

A Three-Legged Stool

Unlike many private-sector employees, most Hawaii state workers still have a three-legged stool to fund their retirement years. Effective July 1, the statutory employer contribution rates for general employees and policeifire employees in the ERS system will be 19.7% and 15%, respectively.

Employees retire with varying percentages of pre-retirement income from the ERS, based on the plan, length of service, and average compensation. Assuming a 30-year career noncontributory employee, the retirement benefit will be up to 37.5%, and less if a survivor option is selected.

Assuming a 30-year career contributory employee, the retirement benefit will be up to 60%, again less if a survivor option is selected. Except for police and firefighters, the eligible state and county employees also are covered under Social Security.

"The deferred compensation plan is designed to supplement that plan," Laderta says of ERS. "The state wanted to encourage employees to put away more money for their retirement years. Because of the cost of living here, we do need more money."

Automatic enrollment would continue a proactive mindset at the Hawaii plan that has, among other things, resulted in an average deferral rate of 13.07%, or a $21 3 average dollar deferral rate, as of January. The $5,112 annual average deferral far surpasses the national average of $3,486 pegged by NAGDCA, a professional organization for deferred compensation and defined contribution plan administrators from all 50 states and more than 100 local governments and entities, as well as providers.

(The organization bases its findings on 40 state plans that responded to a biennial survey based on year-end 2005 totals, and it currently is putting together results based on year-end 2007 statistics.)

"What has been unique about that board is that they really have a paternalistic approach concerning their participants," says Troy Saharic, Seattle-based West Zone Business Leader at Mercer Investment Consulting, the plan's investment adviser. '"lley put a lot of energy into understanding how participants accumulate assets prior to retirement, and the longevity risks post-retirement."

PBS documentary, Retirement Revolution, will air first segment next Monday, March 31 in many markets

Many PBS channels next Monday will air the first of a two-part program, Retirement Revolution. Check local programming listings for scheduled dates and times.

The documentary's website features a video preview and beginning next Monday will present additional information, including interactive features. The following text is excerpted from the site, which is accessible here:

RETIREMENT REVOLUTION, hosted by broadcast journalist Paula Zahn, is a two-part documentary that explores the challenges and opportunities of the 78 million Baby Boomers who are heading into retirement. As the first wave turns 65 next year, they're changing America's ideas about what it means to grow old and what it means to retire. Sixty-five is the new "middle age." Retirement may mean a new career instead of the golf course.

RETIREMENT RE VOL UTION offers practical considerations that can help ensure a retirement on one's own

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terms, even in a risky world where Medicare and private pensions are facing real problems. With everyday stories placed in context of experts' perspectives, RETIREMENT REVOLUTION alleviates anxieties, inspires confidence, and creates change where the ways of the past simply won't be enough.

Among revolutionary discoveries: how even late starters can save enough to supplement their Social Security income; how to turn home equity into old-age income; how to ensure a secure old age with new retirement investment products like annuities that begin at age 85; the joys of encore careers begun after age 50; how Social Security can be secured for another 50 years; and the remarkable compassion and help that the new "old people" are providing to the rest of society.

The RETIREMENTREVOLUTION web site will launch on March 3 1, 2008, and will contain video clips from the program; exclusive interview outtakes; in-depth interview portions with our experts; and links to tools and resources that will help you revolutionize your retirement.

News Release: U.S. Bureau of Labor Statistics releases updated edition of Employee Benefits in State and Local Government

Employee Benefits in State and Local Government

Technical Contact: USDL: 08-0408 (202) 69 1-61 99 [email protected]

Media Contact: FOR RELEASE: 10:OO AM EDT (202) 69 1 -5902 TUESDAY, MARCH 25,2008

Internet address: www.bls.gov/ebs

EMPLOYEE BENEFITS IN STATE AND LOCAL GOVERNMENT-SEPTEMBER 2007

Eighty-nine percent of workers in State and local government had access to employer-sponsored retirement benefii Nearly all workers (96 percent) who had access to a defined benefit retirement plan chose to participate in it, when

These findings are from the Summary, "National Compensation Survey: Employee Benefits in State and local govl

These data are from the National Compensation Survey (NCS), which provides comprehensive measures of occup;

Major findings

State and local government employees enjoyed broad access to a wide variety of benefits at their workplace, i:

The greatest factor affecting the availability of benefits in State and local government was full- vs. part-time s

A variety of other benefits were offered to workers in State and local government. Work-related educational a

The release and Summary Report are available by e-mail request, by telephone (202) 69 1 -6 199, or on the BLS Intc h 13: i!\\ \v~i..bls.go\:!l?l s,:reg11~011.Il t m , also are available to answer any of your questions.

US Census Bureau reports continued movement of the nation's population to South and West

U.S. Census: More people heading west, south DALLAS, Texas (AP) -- Four Texas metropolitan areas were among the biggest population gainers as Americans continued

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their trend of moving to the Sun Belt in 2006 and 2007, according to U.S. Census Bureau estimates to be released Thursday.

Dallas-Fort Worth added more than 162,000 residents between July 2006 and July 2007, more than any other metro area. Three other Texas areas -- Houston, Austin and San Antonio -- also cracked the top 10.

Atlanta saw the second-largest population jump with just over 151,000 new residents. Phoenix, Arizona, was third with more than 132,000, and was followed by Houston, Texas; Riverside, California; Charlotte, North Carolina; Chicago, Illinois; Austin, Texas; Las Vegas, Nevada and San Antonio, Texas.

Of the 50 fastest-growing metro areas, 27 were in the South and 20 were in the West. Two were in the Midwest, one -- Fayetteville, Arkansas -- straddles the South and Midwest and none was in the Northeast.

Detroit, Michigan, lost more than three times as many people as any other metro area -- its population declined more than 27,300. Other areas losing more than 5,000 people were Pittsburgh, Pennsylvania; Cleveland, Ohio; Columbus, Georgia; Youngstown, Ohio, and Buffalo, New York.

Experts credit much of the growth in the South to relatively strong local economies and housing prices that are among the most affordable in the United States.

"People are running away from unaffordable housing, from the economic slowdown," said Karl Eschbach, a state demographer in Texas. "I would expect Texas to stay at the top of a slowing game."

According to figures compiled by Eschbach, 16 percent of Americans who moved to other states between July 2006 and July 2007 came to Texas, which led the nation for the second straight year in that category.

Home prices continue to be a big factor. A report earlier this month by Global Insight found that housing prices in the Dallas area were undervalued by as much as 30 percent.

Ann Sekesan, a pharmacy technician, moved her family from Pennsylvania to suburban Fort Worth last June after seeing spacious homes in Texas for under $200,000 on a television show.

"After we saw that on TV, my husband and I looked at each other and said, 'Have you ever been to Texas?" Sekesan said. "It's amazing the size of a home you can get down here. It's just incredible."

Among other Census Bureau findings:

On a percentage basis, the Palm Coast, Florida, area was the fastest-growing in the nation. Population there jumped by 7.2 percent to more than 536,000. The next areas experiencing the biggest surge in growth were St. George, Utah; Raleigh, North Carolina; Gainesville, Georgia; and Austin.

The New Orleans, Louisiana, area, recovering from Hurricane Katrina, grew by 4 percent or nearly 40,000 people, putting it 16th in terms of raw numbers but eighth for percentage growth. During the same survey last year, the population of New Orleans dropped by nearly 290,000 people.

News Release: Maryland State Retirement Agency names new CIO Board selects Mansco Perry I11 as Chief Investment Officer

BALTIMORE, MD (Tuesday, March 18,2008) - The Board of Trustees for the Maryland State Retirement and Pension System has announced its selection of Mansco Perry 111 as Chief Investment Officer. "The Board and I are extremely pleased at the selection of Mansco Perry as the System's new CIO" Chairman of the Board and State Treasurer Nancy Kopp said. "Mr. Perry clearly possesses the breadth of knowledge, analytical and management skill, and experience across all asset classes to guide our System's investment program suc~cessfully. The more than 350,000 members and beneficiaries of the System, as well as the Governor and members of the General Assembly can be confident that we have selected a person for this critically important position who will serve their interests and the interests of the State extremely well." Vice Chairman and Comptroller Peter Franchot said, "Maryland is very fortunate to have attracted someone of Mansco Perry's caliber. This is a man with an outstanding record of successful and prudent investment management. It is with great pleasure and confidence that the Board names him Chief Investment Officer. All of us on the Board look forward to working with him."

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The appointment of Perry is the culmination of a national search conducted by the Board to replace Steven Huber, who accepted a position with T. Rowe Price Associates. Mr. Perry has most recently held .the position of Assistant Executive Director and Deputy Chief Investment Officer for the Minnesota State Board of Investment, the 1 gth largest public pension fund in the United States. His previous experience included the Minnesota Department of Revenue, the Federal Reserve Bank of Minneapolis, the Dayton Hudson Corporation, and Cargill, Incorporated. Mr. Perry holds a bachelor's degree from Carleton College, an M.B.A. from the University of Chicago, and a law degree from William Mitchell College of Law. Mr. Perry has also been awarded the Chartered Financial Analyst designation.

# # #

The State Retirement and Pension System of Maryland is charged with the fiduciary responsibility for properly administering the retirement and pension allowances of more than 159,000 retirees, beneficiaries, and former vested members, as well as the future benefits for over 191,000 active members. These groups include state government employees, teachers, law enforcement personnel, legislators, judges and local government employees and fire fighters whose employers have elected to participate in the system.

For more information about the State Retirement and Pension System of Maryland, visit our website at ~v~v~v.~r;i.statc.~ncl.us.

CONTACT: R. Dean Kenderdine, 4 10-625-5600

National Association of State Retirement Administrators ~ . ~ a s n " a n . . o n " g

Executive Office-P. 0 . Box 14117, Baton Rouge LA 70898, (225) 757-9558 Federal Relations Ofice-444 North Capitol Street, NW, Suite 234, Washington, D C 20001,

(202) 624-1417 Research Office-PO. Box 980, Georgetown, TX 78627-0980, (512) 868-2774

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Regular Meeting Board of Admii~istration Tacoma Em loyes' Retirement System K 1 100 p.m., T ursday, April 10, 2008

Agenda Item: 8. Good of the Order

Investment Advisory Committee

Frank Underwood submitted his resignation from the Investment Advisory Committee to Mayor Baarsma effective March 3 1,2008. Frank served on the Illvestment Advisory Committee since 1 983.

We will prepare a plaque for Frank to recognize his over 25 years of service with Tacoma Employes' Retirement System.

RCW 35.39.080 requires an a pointment of at least three members who are considered experienced and qualified in t R e filed of Investments. The Investment Advisory Committee members are: Alva Butcher, Joe Cook, Lynda Livingston and Alan Undem.

As there are presently four Investment Advisory Committee members, the Board may wish to take no action.

Should the Board wish to take an action, the Board has in the past filled positions on the Investment Advisory Committee by appointment and by recruitment for applications.

Web Pension Calculator

We have been working with Ron Yaden to develop a retirement calculator in u programming language. The calculator will not only be easier to up-date, it wi rdated 1 also be web based. The web based pension calculator will more closely mirror the actual retirement calculation provided by the Retirement Office rather the present pension calculator which provides a rough estimate.

We will need Milliman's assistance in auditing the up-dated pension calculator. As this will be outside Milliman fixed fee contract, we will receiving an estimate of fees and requesting Board approval.

Y:\COR\RETBRD\BOARD PACKETS\2008L4PRIL2008\APRIL2008AGENDA doc

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Regular Meeting Board of Administration Tacoma Em loyes' Retirement System K 1.00 p.m., T ursday, April 10, 2008

~ g e n d a Item: 9. Debriefing

Background: In order to continue to strive towards a Retirement Board driven agenda, we a preciate the Retirement Board's assistance in providing the Retirement Office feed k) ack as well as recommending any additional questions to be raised to obtain feedback.

How did the meeting go?

What policy items are placed on the next month's agenda?

What issues (topics, questions, requests for status reports etc.) would you have liked to discuss that ou did not have time for? Would you like these issues placed on next mont

In reviewing the meeting, as a Retirement Board, where did we spend most of our time and do we believe that the issues we spent our time on were Retirement Board issues?

Retirement Director's Comments/Recommendations: Retirement Board discussion.

Action Requested: Retirement Board discussion.

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Regular Meeting Board of Administration Tacoma Em lo yes' Retirement System 1: 1 :00 p.m., T ursday, April 10, 2008

Agenda Item: 10. Adjourn

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regular meeting board of administration tacoma employes...

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