June 2011 Monthly Board Report

REPORT SHOWS STRONG INVESTMENT RETURNS FOR OP&F
A report from Evaluation Associates conducted for the Ohio Retirement Study Council (ORSC) highlights the strong performance of the Ohio Police & Fire Pension Fund’s (OP&F) investment portfolio. The report, presented to the ORSC on June 30, is a semi-annual study of investment performance at Ohio’s five public retirement systems examining periods ending Dec. 31, 2010.

The report indicates that OP&F was the top performer among Ohio retirement systems for the six-month, one-year, three-year, five-year and ten-year periods. Also, in all but the six-month period, OP&F outperformed its benchmark return by a wider margin than did all the other Ohio pension funds.

The Evaluation Associates report also indicates:

• For the six-month period ending Dec. 31, 2010, OP&F was the best absolute performer, with a return of 18.66 percent over the previous two quarters and outpaced its benchmark by 211 basis points.
•  OP&F’s one-year total fund investment return for 2010 was 15.83 percent, which beat its benchmark by 322 basis points and placed OP&F in the top 9 percent of its peer group universe.

OP&F FINANCIAL PRACTICES GIVEN CLEAN AUDIT
The independent firm Clark Schaefer Hackett again audited OP&F its report to the Board of Trustees in June declared that all practices and statements were in order and appropriate in 2010. The letter declaring this “clean” audit is included in the 2010 Comprehensive Annual Financial Report, which is available online at www.op-f.org.

PORTFOLIO UPDATE

OP&F’s investment portfolio value:

• Current value (6/29):             $12.11 billion
• End of May value:                 $12.43 billion
• End of April value:                 $12.59 billion

Board of Trustees Committee Notes
(Motions approved by the Board are listed separately)

• DISABILITY: The Committee reviewed disability cases in addition to the regularly scheduled hearings and appeals. Additionally, the Committee reviewed updated flowcharts on the Annual Earnings Statement and Annual Medical Evaluation processes.
• INVESTMENT:  In addition to the monthly portfolio update, the Committee/Board discussed the 1st Quarter Real Estate Performance Review and was presented with the 1st Quarter Net of Fees Performance Report.
• HEALTH CARE:  The Health Care Committee/Board discussed the member impact of the July 1, 2011 Prescription Drug List changes and were updated on the status of scheduling the Annual Change Period seminar dates and locations. The Committee/Board also reviewed the 2010 Health Care Report which will be submitted to the Ohio Retirement Study Council.
• FINANCE:  The Finance Committee discussed the 1st Quarter 2011 Budget-to-Actual Report, 1st Quarter 2011 Travel Expenses and reviewed the status of past due employers.

Motions Approved
At its June 2011 meeting, the OP&F Board of Trustees passed the following motions:

• Approved Townsend’s recommendation to invest $35 million in Greystar Equity Partners VII. Motion passed 7-1 (Investment Committee).
• Approved the dental and vision rates for 2012 as described in UnitedHealthcare’s memo dated June 10, 2011 (no change in rates from 2011). Motion passed with 7 for and one abstention (Health Care Committee).
• Approved the Discount Program and Poverty Level Guidelines for 2012 as described in Staff’s memo dated June 29, 2011. Motion passed by unanimous vote (Health Care Committee).
• Approved the medical and prescription drug rates for 2012 as described as “Scenario 2” in Buck Consultant’s presentation to the Board on June 29, 2011. Motion passed 6-2 (Health Care Committee).
• Voted to elect Mr. Montgomery as Chair Elect of the Board for 2011-12. Motion passed 7-1 (Health Care Committee)
• Voted to elect Mr. Gallagher as Vice Chair of the Board for 2011-12. Motion passed 7-1 (Health Care Committee)
• Approved the Committee recommendations for the initial determination of disability for the 27 members as identified in the initial determination hearings list presented to the Board on June 28, 2011 (Disability Committee).
• Approved the determination for reconsiderations for the members identified (Disability Committee).
• Approved the recommendations for the appeal hearings for the nine members as identified in the appeals list presented to the Board on June 28, 2011 (Disability Committee).
• Approved the determination for Death Fund benefits for the members identified (Disability Committee).
• Waived the mandatory medical evaluation and filing of annual earnings statements for future years for the members identified in the disability reporting waivers list presented to the Board on June 28, 2011 (Disability Committee).

Next Board of Trustees Meetings: July 26-27, 2011