SDCERS October 20 Board Meeting

Retirement Board Meeting - October 20, 2006 Reported by Joe Flynn As I started to write up my summary, I noted that, in addition to the "faithful few" retirees, that Evan McLaughlin, reporter for the Voice of San Diego was also in attendance. So, under the heading of "work smarter not harder," I have copied for you, the link to Evan's article of the morning meeting. He does a good job of making complex subjects understandable and readable. Since some of the article, however, deals with the Corbett Settlement and the 13th Check, I will add a note here in anticipation of your questions. The Retirement Board has an action item on it's November 17 agenda to authorize the payment of Corbett Settlement and the 13th Check. I had been checking on this because I thought we did it earlier last year, but I was wrong. We acted on these items in November, but that is in time to make the payment that goes out at the end of November. The earnings for these payments have been available for some time, it is now a matter of meeting all the technical requirements, and we plan to do that next month. Click here for the link to Evan's article. The suggested change to include both Corbett and the 13th check in pension plan liabilities has been underway for some time. The Pension Reform Committee (PRC) had first made that suggestion in 2004. One of the members of the PRC, Bill Sheffler is also a member of the Board and brings continuity and a deeper understanding of that issue to the Board. I took the opportunity to illuminate the impact of Corbett and the 13th check on retirees, especially those 500 retirees who's monthly pension is less than $500. For many of these pre-1980 retirees, these payments go a long way of paying for basic necessities. I recognize that I may try the Board's patience with these explanations, but since my last review, we had two new Board members, our new General Counsel, Chris Waddell, Jay Goldstone, the City's Chief Financial Officer, some counsel aides and a newspaper reporter were in the audience. The 13th check has a lot of history and is a difficult concept at best, so given the opportunity I will share that history. But I do look forward to the time when Corbett and the 13th checks have been made a regular part of the pension payment process. And I really look forward to the elimination of the "Waterfall Concept." In years past, one could walk in when the Retirement Board was discussing this subject and think you had wandered into a meeting of the County Water Authority by mistake. The Court cases are beginning to thin out. SDCERS has been successful in establishing that it is an independent agency with a right to have it's own legal counsel. More recently, Judge Barton ruled that SDCERS was correct in paying the benefits enacted by the City Council, and should continue to do so unless and until the City Council changed those ordinances. The case remaining is the legality of the benefits themselves. The City Attorney has challenged those benefits and their adoption process. The unions and others are contesting that claim which will be moving into the trial phase next week. The Board also appointed a new Compliance Officer, Roxanne Story Parks. She has been a staff attorney at SDCERS for the past 10 months served as interim General Counsel. I am sure many of you knew Roxanne's father, George Story who was for many years Director of Citizen's Assistance. George would have been very proud of her; I know I am, and you can be too. We are fortunate to have an attorney with her education, experience, and drive as Compliance Officer to ensure that SDCERS operations maintain the highest ethical and legal standards. In that role she will report to the Board through the Business and Governance Committee. The disability re-examination process is continuing. The Board today approved two informational documents for placement on the SDCERS Website. These documents pertain to SDMC Section 24.0509 and 24.0510. They should appear soon. The Board continues to press forward on a full schedule. An Audit Committee has been added to the list and follows the Executive Committee, the Disability Committee, the Investment Committee, and the Business and Governance Committee. The level of effort remains high, but the difference between early 2005 and now is that currently the effort is on the central tasks of conducting the management and investment responsibilities of SDCERS trust fund for the benefit of members, active and retired. The first six to eight months, if you recall, were spent fighting fires and legal battles and explaining what we were doing and how it was different from the previous Board. By now, the Board and SDCERS have developed an open responsive management and administration style that has disarmed many previous critics. The Board hired a dynamic new administrator, David Wescoe who is reorganizing and transforming SDCERS administration. And along the way, staff has taken up the new challenge and morale is up. Our new General Counsel Chris Waddell, comes on board next month, and as I said earlier, we have a new Compliance Officer. And, in Doug McCalla and Dawne Clark, we continue to have a top performing investment team. So together we have made much progress, and now we have momentum. And we will continue to succeed, because by now SDCERS, Board and staff alike, are similar to those described by Virgil in the AEneid, when he wrote, "Posunt, Quia Posse Videntur." They do it because they believe they can. Joe Flynn, Retiree Rep. to the Board
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Retirement Board Meeting - October 20, 2006
Reported by Joe Flynn

As I started to write up my summary, I noted that, in addition to the "faithful few" retirees, that Evan McLaughlin, reporter for the Voice of San Diego was also in attendance. So, under the heading of "work smarter not harder," I have copied for you, the link to Evan's article of the morning meeting. He does a good job of making complex subjects understandable and readable.

Since some of the article, however, deals with the Corbett Settlement and the 13th Check, I will add a note here in anticipation of your questions. The Retirement Board has an action item on it's November 17 agenda to authorize the payment of Corbett Settlement and the 13th Check. I had been checking on this because I thought we did it earlier last year, but I was wrong. We acted on these items in November, but that is in time to make the payment that goes out at the end of November. The earnings for these payments have been available for some time, it is now a matter of meeting all the technical requirements, and we plan to do that next month.

Click here for the link to Evan's article.

The suggested change to include both Corbett and the 13th check in pension plan liabilities has been underway for some time. The Pension Reform Committee (PRC) had first made that suggestion in 2004. One of the members of the PRC, Bill Sheffler is also a member of the Board and brings continuity and a deeper understanding of that issue to the Board. I took the opportunity to illuminate the impact of Corbett and the 13th check on retirees, especially those 500 retirees who's monthly pension is less than $500. For many of these pre-1980 retirees, these payments go a long way of paying for basic necessities. I recognize that I may try the Board's patience with these explanations, but since my last review, we had two new Board members, our new General Counsel, Chris Waddell, Jay Goldstone, the City's Chief Financial Officer, some counsel aides and a newspaper reporter were in the audience. The 13th check has a lot of history and is a difficult concept at best, so given the opportunity I will share that history.

But I do look forward to the time when Corbett and the 13th checks have been made a regular part of the pension payment process. And I really look forward to the elimination of the "Waterfall Concept." In years past, one could walk in when the Retirement Board was discussing this subject and think you had wandered into a meeting of the County Water Authority by mistake.

The Court cases are beginning to thin out. SDCERS has been successful in establishing that it is an independent agency with a right to have it's own legal counsel. More recently, Judge Barton ruled that SDCERS was correct in paying the benefits enacted by the City Council, and should continue to do so unless and until the City Council changed those ordinances.

The case remaining is the legality of the benefits themselves. The City Attorney has challenged those benefits and their adoption process. The unions and others are contesting that claim which will be moving into the trial phase next week.

The Board also appointed a new Compliance Officer, Roxanne Story Parks. She has been a staff attorney at SDCERS for the past 10 months served as interim General Counsel. I am sure many of you knew Roxanne's father, George Story who was for many years Director of Citizen's Assistance. George would have been very proud of her; I know I am, and you can be too. We are fortunate to have an attorney with her education, experience, and drive as Compliance Officer to ensure that SDCERS operations maintain the highest ethical and legal standards. In that role she will report to the Board through the Business and Governance Committee.

The disability re-examination process is continuing. The Board today approved two informational documents for placement on the SDCERS Website. These documents pertain to SDMC Section 24.0509 and 24.0510. They should appear soon.

The Board continues to press forward on a full schedule. An Audit Committee has been added to the list and follows the Executive Committee, the Disability Committee, the Investment Committee, and the Business and Governance Committee. The level of effort remains high, but the difference between early 2005 and now is that currently the effort is on the central tasks of conducting the management and investment responsibilities of SDCERS trust fund for the benefit of members, active and retired. The first six to eight months, if you recall, were spent fighting fires and legal battles and explaining what we were doing and how it was different from the previous Board. By now, the Board and SDCERS have developed an open responsive management and administration style that has disarmed many previous critics. The Board hired a dynamic new administrator, David Wescoe who is reorganizing and transforming SDCERS administration. And along the way, staff has taken up the new challenge and morale is up. Our new General Counsel Chris Waddell, comes on board next month, and as I said earlier, we have a new Compliance Officer. And, in Doug McCalla and Dawne Clark, we continue to have a top performing investment team.

So together we have made much progress, and now we have momentum. And we will continue to succeed, because by now SDCERS, Board and staff alike, are similar to those described by Virgil in the AEneid, when he wrote,

"Posunt, Quia Posse Videntur." They do it because they believe they can.

Joe Flynn, Retiree Rep. to the Board