October 18
2001
REPORT
OF THE PROCEEDINGS
OF
THE
Board of Trustees
OF
THE
Public School Teachers'
Pension and
Retirement Fund of
Chicago
__________
Special
Meeting - Official Report
Thursday,
October 18, 2001
__________
A
special meeting of the Board of Trustees of the Public School Teachers' Pension
and Retirement Fund of Chicago was held Thursday, October 18, 2001 at the
offices of Mercer Investment Consulting.
The
President, Ms. Mary Sharon Reilly, called the meeting to order at 9:30 a.m.
ROLL
CALL
Members
present: Ms. Anderson, Ms. Knazze,
Mr. Mayo, Mr. O'Brill, Ms. Reilly, Ms. Rodriguez, Mr. Saffold, Mr. Silver, Mr.
Ward--9.
Members
absent: Ms. Nolan, Mr. O’Farrell--2.
Also
in attendance were Mr. Michael J. Nehf (Executive
Director), Mr. Kevin Huber (Chief
Financial Officer), Mr. Joseph Burns of Jacobs, Burns, Orlove, Stanton and
Hernandez (Legal Counsel), Mr. Brad
Blalock and Mrs. Stephanie Braming of Mercer Investment Consulting, Inc. (Investment
Consultant), Ms. Kathy Stevenson of The Northern Trust (Custodian)
and various observers and staff members.
Roundtable
Briefing
Mr.
Brad Blalock and Mrs. Stephanie Braming of Mercer Investment Consulting, Inc.
briefed the Trustees on the domestic equity brokerage policy roundtable
discussion to be held at this meeting.
Aetna
Life Insurance Company Transfer to UBS Realty
Mr.
Michael Nehf presented a memorandum from Ms. Michele Dinn of the Townsend Group
which summarized materials originally provided at the September 11, 2001 Board
of Trustees meeting.
A
motion was made by Mr. Silver, seconded by Mr. O’Brill, and unanimously
passed, to accept the recommendation as presented in the September 26, 2001
memorandum by the Townsend Group to consent to Aetna Life Insurance Company’s
transfer to UBS Realty of the investment manager and fiduciary status with
respect to the management of the assets held in RESA, subject to legal review.
The Trustees acknowledged the retirement of Dr.
Walter E. Pilditch, Trustee from 1995 to 2001.
A motion was then made by Mr. Silver, seconded and unanimously passed by
the Board of Trustees, to record and print in the proceedings of this meeting
the Board of Trustees’ sincere thanks to Dr. Pilditch for his outstanding
dedication and service as Trustee of the Public School Teachers’ Pension and
Retirement Fund of Chicago.
The
following investment managers and brokers participated in a roundtable
discussion on domestic equity brokerage policy. Several managers and brokers joined in the discussion via
conference call.
Brinson
Partners, Harris Investment Management, Oppenheimer Capital, The Northern Trust,
Holland Capital, Fidelity Management Trust, Woodford Capital Management,
Zevenbergen Capital Management, Waddell & Reed Investment Management, New
Amsterdam Partners, Berean Capital, Loop Capital Markets, Benchmark Financial
Services, First Honolulu Securities, Melvin Securities.
Domestic Equity Brokerage Policy
Following
review, a motion was made by Mr. Silver, seconded by Mr. Saffold, and
unanimously passed, requiring the Fund’s large cap domestic equity money
managers direct a minimum of 30% of their brokerage business to Chicago based
women and minority business enterprises at a fixed per share cost not to exceed
4.5 cents. An additional 15% of our
brokerage business shall be directed to commission recapture brokers, and an
additional 5% will be directed to a minority commission recapture broker if one
chooses to participate in the program. In
no instance shall the amount directed by each manager to Chicago minority and
woman business enterprises be less than 35% of the total brokerage business.
Lynch Jones will be solicited to participate in the commission recapture
program as an additional alternative to Merrill Lynch Citation.
Finally, each manager may count brokerage in only one classification,
(i.e. recapture or direct). Further
discussion outside the motion indicated that non-compliance with the above
motion would result in potential penalties, the severity of which will be
determined at a later date.
A
motion was made by Mr. O’Brill, seconded by Mr. Silver, and unanimously
passed, to require money managers to comply on an annual basis and to submit a
status report of compliance semi-annually that includes total directed brokerage
to minority businesses, and the portion of this amount that was stepped out.
2001-02
Legislative Priorities for the Fall and Spring Session
Mr. Nehf and Mr. Henry P. Anselmo of Henry P. Anselmo and Associates reviewed the 2001-02 legislative program with the Trustees. The Trustees confirmed the legislative priorities for the upcoming year.
Generally, the rationale for establishing priorities is as follows:
1. Proposals that have little or no cost to employer (A)
2. Proposals that encourage longer teaching careers (B)
3. Proposals that improve benefits equal to those received by TRS retirees (C)
4. Proposals for an ad-hoc increase for pensioners (D)
Specifically, our proposals for the year will include:
1. Begin automatic annual increase accrual one year following retirement (C)
2. Amend provision for contributions for leaves of absence up to 3 years (C)
3. Provide guarantee of funding by State of Illinois (A)
4. Provide ad-hoc increase for pensioners (D)
5. Eliminate marriage restrictions for survivor benefits (A)
6. Provide for all income to be pensionable (B)
7. Increase maximum pension percentage to 80% (B)
8. Provide for refunds of excess contributions to survivors of deceased
pensioners (A)
9. Provide for a service retirement pension for members with 10 or more years and
minimum of age 60 (C)
10. Extend deadline to pay for 2.2 upgrade costs by pension check deductions
beyond current deadline of 6/30/03 (A)
11. Forgive deceased teacher and pensioner remaining upgrade costs if member dies before completion of payments (A)
12. Provide for minimum survivor benefits payable upon death of teacher or pensioner which occurred prior to 12/31/86 (A)
13. Allow payment for creditable service through tax deferred employer payroll deductions (A)
14. Remove retirement teaching restrictions (A, B)
EXECUTIVE
SESSION
A motion was made by Ms. Rodriguez, seconded by Mr. Silver, and unanimously passed, to enter in an executive session for the consideration of executive compensation. The executive session lasted from 3:00 p.m. to 3:12 p.m.
(Messrs. Mayo and Saffold were not present at the time the vote was
taken.)
Following executive session, a motion was made by Ms. Anderson, seconded by Ms. Rodriguez, and unanimously passed, to resume the regular order of business.
(Messrs. Mayo and Saffold were not present at the time the vote was
taken.)
EXECUTIVE
SALARY INCREASE APPROVED
A motion was made by Ms. Anderson, seconded by Ms. Rodriguez, and unanimously passed, to approve a 6.6% increase for the Executive Director.
(Messrs. Mayo, Saffold, and Ward were not present at the time the vote
was taken.)
ADJOURNMENT
On
a motion by Mr. Silver, seconded by Ms. Rodriguez, and by unanimous vote, the
meeting was adjourned at 3:15 p.m.
Respectfully submitted,
SIG
Maria J. Rodriguez
Recording Secretary
October 18
2001
REPORT
OF THE PROCEEDINGS
OF
THE
Board
of Trustees
OF
THE
Public
School Teachers’ Pension and
Retirement
Fund of Chicago
_______
Executive
Session - Official Report
Thursday,
October 18, 2001
_______
An
executive session of the Board of Trustees of the Public School Teachers’
Pension and Retirement Fund of Chicago was held Thursday, October 18, 2001, for
the purpose of discussing personnel matters.
The President, Mary Sharon Reilly, called the meeting to order at 3:00 p.m. with the following members present: Ms. Anderson, Ms. Knazze, Mr. O’Brill, Ms. Reilly, Ms. Rodriguez, Mr. Silver, Mr. Ward--7.
Members
absent: Mr. Mayo, Ms. Nolan, Mr.
O’Farrell, Mr. Saffold--4.
Personnel
matters were discussed. No action
was taken.
The
executive session was adjourned at 3:12 p.m.
Respectfully submitted,
SIG
Maria J. Rodriguez
Recording Secretary