Colorado Public Employees Retirement Association Board Meeting Minutes

Transcription

1 Colorado Public Employees Retirement Association Board Meeting Minutes Raymond Doc Heath Memorial Boardroom 1301 Pennsylvania Street Denver, Colorado January 20, :00 a.m. Trustees Present: Trustees Absent: Staff Present: Timothy M. O Brien, Chairman, Karl Fisch, Vice Chairman, Will Bain, Guillermo Barriga, Jon Forbes, Amy Grant, David Hall, Roger Johnson, Robert Lamb, Susan Murphy, Bill Parker, Marcus Pennell, Walker Stapleton, Carole Wright Carolyn Jonas-Morrison, Lynn Turner Ron Baker, Donna Baros, Adam Franklin, Karl Greve, Katie Kaufmanis, David Mather, Tara May, Brenda Meidl, Lawrence Mundy, Karl Paulson, Jennifer Paquette, Gregory W. Smith Timothy M. O Brien, Chairman, called the meeting to order at 9:01 a.m. Approval of the Consent Agenda A motion was made by Carole Wright and seconded by Karl Fisch that, the Board approve the Consent Agenda as published with the following items: a. Approval of Agenda b. Approval of November 18, 2016, Board Meeting Minutes (Tab A) c. Resolution for Signature Authorization (Tab C) d. Iran-Related Investment Policy Report (Tab D) e. Board of Trustee Vacancy (Tab E), f. Committee Assignments (Tab F) g. Board Service Provider Report (Tab G) h. Governance Manual (Tab H1)(Tab H2). The motion was approved. Suzanne Kubec was present at the meeting, as reflected in Tab E, Ms. Kubec will assume office at the March 2017 meeting. A motion was made by Will Bain and seconded by Bill Parker that, the December 20, 2016, Board Meeting Minutes be approved as amended, to include the corrected language for going into a Closed Executive Session. The motion was approved. Public Comment There was no public comment.

2 Page 2 of 7 Proclamation Maryann Motza Timothy M. O Brien, Chairman, read the following Proclamation Concerning Maryann Motza: Whereas, Maryann Motza served as a Trustee on the Board of the Colorado Public Employees Retirement Association (PERA) from July 2005 until December 2016, and represented the members of the State Division; and Whereas, during her 11 years on the Board, Maryann served as the Chair and Vice Chair of the Board, as well as the Chair of the Investment, Shareholder Responsibility, and Executive Committees, and also served as a member of the Audit, Compensation and Budget, and Evaluation Committees; and Whereas, Maryann brought her unique perspective as the State s Social Security Administrator, as well as her passion for ensuring the retirement security of the membership during her time on the Board; and Whereas, Maryann participated in all PERA meetings and will be remembered for her desire to conduct inclusive discussions on issues before the Board, thereby earning respect from staff and her colleagues; and Whereas, Maryann drew upon her academic background in public policy and her expansive career in State government to benefit Board deliberations; and Whereas, Maryann embodied the highest qualities of a Trustee and served as a role model for others to emulate; and Whereas, through her effective leadership, Maryann earned the admiration and esteem of the PERA Board members and staff; and Whereas, Maryann resigned her position on the Board of Trustees of PERA in December 2016, now therefore, be it Resolved, that with the highest level of appreciation, the Board of Trustees of PERA formally recognize and thank Maryann Motza for her service to the membership of PERA during her time as a member of the Board of Trustees, and wish her well as she enters a well-deserved retirement; and Resolved, that a copy of this Resolution be placed in the official minutes of the January 20, 2017, PERA Board of Trustees meeting. A motion was made by Susan Murphy and seconded by Marcus Pennell that, the Board approve the foregoing proclamation. The motion was approved.

3 Page 3 of 7 Mr. O Brien announced that for the 31st consecutive year, the Colorado Public Employees Retirement Association had been awarded the Certificate of Achievement for Excellence in Financial Reporting by the Government Finance Officers Association (GFOA) of the United States and Canada. The GFOA established this Certificate in 1945 to encourage and assist state and local governments to go beyond the minimum requirements of generally accepted accounting principles, to prepare a Comprehensive Annual Financial Report (CAFR) that evidences the spirit of transparency and full disclosure, and to recognize individual governments that succeed in achieving that goal. PERA also received the GFOA award for Outstanding Achievement in Popular Annual Financial Reporting for the 14th consecutive year for the Popular Annual Financial Report (PAFR). The PAFR is a summary of the CAFR that is mailed to PERA members and benefit recipients. The GFOA established this award in 1991 to encourage and assist state and local governments to extract information from their CAFR to produce a high quality PAFR specifically designated to be readily accessible and understandable to the general public and other interested parties. The CAFR and the PAFR represent the output of the entire PERA operation and staff. Mr. O Brien recognized Karl Greve, PERA Chief Financial Officer, Madalyn Knudsen, PERA Director of Creative Services, and their staffs for their roles in leading the PERA accountability effort. In addition, Mr. O Brien noted that today s meeting will be the last Board Meeting for PERA s Chief Investment Officer Jennifer Paquette and PERA s Chief Financial Officer Karl Greve, who are retiring after long and distinguished careers at PERA. The Board recognized Ms. Paquette and Mr. Greve for their dedicated service to the Board and to the membership of Colorado PERA and extended congratulations to them on their welldeserved retirements by acclamation. Committee Reports Executive Committee Karl Fisch, Vice Chairman, reported that the Committee met on December 15, 2016, and discussed the November Board meeting and the December 15, 2016, Evaluation Committee meeting and the December 20, 2016, Special Board meeting. In addition, the Executive Committee met on Tuesday, January 17, 2017, and approved the November 15, 2016, and the December 15, 2016, Executive Committee minutes, reviewed the October 31, 2016, and November 30, 2016, Unaudited Financial Statements, reviewed the November 30, 2016, and December 31, 2016, Budget Reports. The Committee also reviewed the Board Meeting Agenda for today s meeting.

4 Page 4 of 7 Investment Committee Susan Murphy, Chair, Investment Committee, provided information regarding the amendments approved by the Investments Committee. Trustees approve the amended Statement of Investment Policy, which includes the Investment Philosophy, as described and amended in Tab B of the Investment Committee Agenda, dated November 17, The motion was approved. In addition, Ms. Murphy, provided information regarding the following motions, which were approved at the Committee meeting in November: Trustees approve that the benchmark for the CRG Partners III investment, effective the first day of the calendar quarter following the first capital call, be the Credit Suisse Leveraged Loan Index plus 250 basis points annually. The motion was approved. Trustees approve that the benchmark for all Multi-Strategy Hedge Fund investments be the Credit Suisse Multi-Strategy Index. The motion was approved. Trustees approve that the benchmark for all Global Macro Hedge Fund investments be the HFRI Macro Total Index Asset Weighted. The motion was approved. Strategic Planning: Risk Management Report Karl Paulson, PERA Director of Planning, Policy, and Budget, Ron Baker, PERA Chief Administrative Officer, and David Mather, PERA Director of Internal Audit, reviewed the Strategic Planning: Risk Management Report. The presentation was transmitted to the Trustees as Tab J on January 11, Legislative Update Gregory W. Smith, PERA Executive Director, provided a presentation that updated the Board on the legislative activities related to Colorado PERA. Mr. Smith responded to questions. In addition, Mr. Smith provided an update on Federal legislation related to public pension funds. Mr. Smith responded to questions. Strategic Priority 1: Sustainability Gregory W. Smith, PERA Executive Director, reviewed the process to date regarding the Strategic Priority 1. Mr. Smith introduced Ed Koebel, Pat Beckman, and Eric Gary of Cavanaugh Macdonald Consulting. The team reviewed the presentation, which was transmitted to the Trustees as Tab K on January 13, 2017.

5 Page 5 of 7 Mr. Smith, the Cavanaugh MacDonald Consulting team, and Adam Franklin, PERA General Counsel, responded to questions. Stakeholder Outreach Agenda Gregory W. Smith, PERA Executive Director, and Tara May, PERA Chief Communications Officer, provided information regarding the upcoming Stakeholder Outreach agenda. The timeline was transmitted to the Trustees as Tab L on January 13, 2017, and the presentation was included in the meeting materials as a hard copy. Staff Reports Executive Director Report Gregory W. Smith, PERA Executive Director, reviewed the Executive Director Report and recent activities. The information was transmitted to Trustees as Tab M on January 6, The Board recessed at 11:51 a.m. and reconvened at 12:51 p.m. Market & Portfolio Update Jennifer Paquette, PERA Chief Investment Officer, provided a market and portfolio update presentation. The Investment Performance Report and presentation were transmitted to Trustees as Tab N1 and Tab N2 on January 6, Rules Hearing Kevin Gallaway, PERA Staff Attorney and Megan Peitzmeier, PERA Staff Attorney, reviewed the proposed changes to PERA Rules, which was transmitted as Tab K to Trustees on November 7, A motion was made by Carole Wright and seconded by Marcus Pennell that, the Board approve and adopt the proposed amendment to Rule 2.90.C to reflect the revised actuarial investment assumption rate of 7.25 percent, along with the Statement of Basis and Purpose, as distributed to the Board on January 6, 2017, as Tab O, with an effective date of April 1, The motion was approved. Staff Reports (Continued) Chief Administrative Officer Update Ron Baker, PERA Chief Administrative Officer, provided a presentation of the Chief Administrative Officer Update, which was transmitted as Tab P to Trustees on January 9, Mr. Baker responded to questions.

6 Page 6 of 7 General Counsel Update Adam L. Franklin, PERA General Counsel, provided information from the General Counsel Report. Mr. Franklin requested that the Board go into Closed Executive Session. The issues to be discussed involved pending or imminent litigation and specific legal questions addressed to the General Counsel regarding the following: Settlements Trustees of the Mineworkers Pension Scheme Limited, et al. v. The Royal Bank of Scotland Group, PLC Volkswagen Foreign Litigation Petrobras Arbitration Janet Walcott v. PERA, Gregory W. Smith, and Brian Pippin Elham Salemi v. PERA, Tim Moore, and Angela Setter McDivitt v. PERA, et al. Cornish v. PERA Mirich v. PERA Timothy M. O Brien, Chairman, Board of Trustees, polled the Trustees in attendance and received consent to go into Closed Executive Session at 1:23 p.m. In addition to the Trustees, the Executive Director and the General Counsel, all the Chief Officers, the Director of Planning, Policy, and Budget, the Public Information Officer, the Accounting Reporting Manager, and the Manager of the Executive Director s Office, participated in the Closed Executive Session. The Closed Executive Session concluded at 1:30 p.m. By my signature below, I certify that the only issues discussed by the members of the Board during the Closed Executive Session were regarding pending and imminent litigation and legal advice related to specific questions involving PERA constituting attorney client communication. Timothy M. O Brien, Chairman, Board of Trustees Benefits Committee Carole Wright, Chair, Benefits Committee, provided information regarding the motions that were approved at the November Committee meeting and offered today for the Board s consideration. A motion was made by Ms. Wright that the Benefits Committee recommends that, the Board of Trustees approve the increase to retiree life insurance premiums as recommended by Unum shown in Tab C of Benefits Committee materials dated November 17, 2016, to be effective April 1, The motion was approved.

7 Page 7 of 7 A motion was made by Ms. Wright that the Benefits Committee recommends that, the Board of Trustees approve the revisions to PERA s 401(k) and Defined Contribution Plan and Trust Document as published in the Committee meeting materials. The motion was approved. Proposed Board Meeting Date A motion was made by David Hall and seconded by Guillermo Barriga that, the following 2017 Board Planning Session Date be approved: September 20 22, The motion was approved. Other Business A motion was made by Marcus Pennell and seconded by Guillermo Barriga that, the meeting be adjourned. The motion passed. With no further business to discuss, Mr. O Brien adjourned the meeting at 1:37 p.m. Timothy M. O Brien, Chairman, Board of Trustees Respectfully submitted by Brenda E. Meidl Manager of the Executive Director s Office Gregory W. Smith, Executive Director Approval Date: March 17, 2017