SDCERS Board Meeting - July 21, 2006
Reported by Joe Flynn

Retirees: 

     I think we set a new record; we finished the meeting today by 2:00 PM. There were 11 members present but the Committee's are doing a lot of the detail work.  They report back to the full Board and answer any questions.  It works quite well because five or six Board members have spent from two to four hours on the subject so they have a handle on it.  I still go to most of the Committee meetings, especially if they have a training session.  Although I am not a member of Disability and Investment committee I still have the opportunity to ask questions or use my three minutes of comment time. 

    Thomas Hebrank, is the Board member who chairs the Investment committee.   He is a CPA with investment and management background and he is very thorough.  You are in good hands when he is at the helm. Other members are Peter Q. Davis, Steve Meyer, George Murray, Bill Sheffler, Richard Kipperman, and Peter Preovolos.

    Some good news at the Investment Committee.  The City of San Diego deposited $100 million in SDCERS bank account on June 21, 2006.  The funds are bond proceeds from San Diego's securitized  Tobacco settlement revenues. 

    And on July 3, 2006 the three plan sponsors deposited $172 million in SDCERS account.  Of this, $162 million was from San Diego, $8.3 million from the Unified Port District, and $2.7 million from the Airport Authority.  SDCERS Investment Staff had been anticipating these deposits and were able to invest these funds the following day.  They did their homework using the detailed investment guidelines approved by the Board.

    SDCERS staff don't miss much. For example, each of you have probably received notices in the mail, advising you of some class action litigation for some stock you own or something you purchased.  It's fine print, tedious reading, and they use periods like they were rationed.  But if you wade through it, and send the forms in, you probably have gotten your share of the class action settlement.  At SDCERS, they have a young lady named Robin Olesko in the investment group, who is very good at this.  Really good at this.  So far this year, she has collected for SDCERS, your fund and mine, $645,628.14  I told you she was good at it. And I made sure I showed the 14 cents on the end because she has collected settlements ranging from $104,111.70 all the way down to $1.22 and she would notice if it was missing.  The thing is, you never know the amount of the settlement, and if fewer people send in their forms, those who do get a bigger return.  It all adds up.     

    I share this information with you so you can share it with your friends, because all we ever read about is the $1.4 billion pension fund deficit.  If I had a quarter for every time that number appeared in print, I could probably pay off most of the deficit.  And secondly, I wanted you to know that the Mayor and Council are  contributing additional funds to the retirement system, over and above the required contribution.

    While we are still in the Investments mode, in the eleven month period ending May 30, 2006, the fund has earned $390.7 million.  The threshold for paying the Corbett settlement and the 13th Check is $112.6 million, and that has been in the rear view mirror since the end of October 2005.  There are still some formal steps to go  through before the checks can be authorized, (the earnings still must be verified by the City Auditor), but the money is there. 

    Before you ask, yes it is a fair question to ask if these contributions and earnings made a dent in the deficit.  I'll check on it and let you know. 

    Doug McCalla, Chief Investment Officer, uses a little analogy to explain the funding for the pension system. He talks about a three legged stool; one leg is the city's contribution, the second leg is the employee's contribution, and the third leg is made up of investment earnings.  It may be an odd looking stool though, because investment earnings make up 70% (seventy percent) of the pension fund.  You can also share that with your friends and neighbors, because I don't recall seeing it explained quite like that in the local media.  If you have, let me know who wrote the article and I will send that reporter a letter of appreciation.

    One of the items in the Board Reports includes the number of the Public Records Requests received last month.  This item lists what information had been requested.  In this case detailed information was requested on retirees, date of retirement, last known address, etc.  My question was, is this information public, and do we provide it???  The answer from Roxanne Story Parks, General Counsel, "No, SDCERS does not provide all of this information.  Only the information that is printed in the Board docket when someone retires, i.e., name, department, job title, years of creditable service, and date of retirement.  No other information is provided under a public records request. 

    Discontinuance of Corbett payments to non-service eligible disability retirees, will affect 125 retirees.  This is down from the earlier estimate of 180.  These payments were to be discontinued due to lack of resolutions and or city ordinances authorizing that payment.  SDCERS has sent a letter advising the Mayor and Council of the oversight in the Corbett settlement agreement, but the Board cannot seek benefits for retirees.  However, both retiree organizations, the City of San Diego Retired Employee's Association and the Retired Fire and Police Association are writing letters to the Mayor and Council pointing out that it was an oversight and seeking reinstatement of payments to these individuals. I have asked SDCERS staff for a total dollar amount of the discontinued payments so everyone will know how much money is involved.

    An update on the questionnaires sent to disability retirees, and some of the re-examinations that have been requested will be the subject of a report at the next Board meeting.  At that meeting, I will also pursue the issue of the extent of medical history needed to verify the disability claim.  This does not affect all disability retirees; only those who have not yet reached their service eligible age.

    Now, I would like some feedback from you.    

    1. SDCERS installed a new system for televising the Board meetings.

    a.  If you watch the proceedings on Channel 24, have you noticed  an improvement?  Can you follow the meetings better?  How is the audio?  Can you hear the speaker's OK?  And do the new cameras make me look any younger?  They promised me they would.

    2.  Do you have any difficulty determining the schedule for the live broadcast, and or re-runs?  If so let me know, because some of the retirees have cracked the code and we can share that info.

    So, see what happens?  We finish a Board meeting early, and you get a longer report -- I think it's that law that says a project will expand to fill the time allotted to it, not sure which one it is, but maybe one of the Wolverines can give me a cite on that one.

    Next meeting is August 25 , yes August 25starting at 8:30 AM.  It is one week later than usual.  So come on down.