September 2009 Monthly Board Report

FUNDING RECOMMENDATIONS DELIVERED, OP&F
OP&F was the first of the five Ohio public retirement systems to present long-term funding recommendations to the Ohio Retirement Study Council (ORSC) on September 9, spelling out its Board-approved plan to meet the state’s 30-year funding standard. Many significant portions of OP&F’s plan require legislative action before they can be implemented. OP&F continues to communicate with members of the ORSC and the Ohio General Assembly on specifics of the recommendations.

ANNUAL CHANGE PERIOD FOR HEALTH CARE BEGINS OCT.1
UnitedHealthcare hosted the first of 11 Annual Change Period open houses on October 1 in Toledo. The open houses are designed to assist members by answering questions related to the health care plan sponsored by OP&F and assist members in completing the Annual Change Period form. Representatives from UnitedHealthcare, AARP along with a representative from OP&F will attend each of the open houses. Information for 2010 was mailed by UnitedHealthcare in September to OP&F members either eligible or enrolled in the plan. The 2010 Annual Change Period ends Oct. 31.

Board of Trustee Committee Notes
(Actions approved by the Board are listed separately)

• ADMINISTRATION/AUDIT: The Committee received the Information Services update on ongoing OP&F projects and also discussed the 2010 Trustee elections and voting options. The Internal Audit update included a discussion of the transition of duties from the former to the current Internal Auditor and the ongoing CODA financial systems upgrade project. The Committee also discussed and reviewed how other Ohio retirement systems rules on public comment by members at Board of Trustees meetings.

• DISABILITY: In addition to the scheduled disability hearings and reviews, the Committee discussed the Designation of Agent form and recommended revisions to the form. The Committee received an update on the Annual Earnings Statement mailings and responses and reviewed a list of pending and future assignments for the Committee.

• HEALTH CARE: The Committee/Board of Trustees reviewed and discussed information that projected the impact of DROP members retiring in 2011 on the Health Care Stabilization Fund. Staff also confirmed to the Committee that letters are sent to members in DROP who are approaching the eight year maximum for participation. The letters are sent six months, three months and one month prior to the maximum participation date. The Committee also discussed information on the year-to-year roll-over of unused dental benefits and asked that this information be available to members at the UnitedHealthcare open houses in October.

•  BENEFITS: The Benefits Committee discussed the effects of lay-offs to the Deferred Retirement Option Plan (DROP) and the effect of a member’s last day on active payroll on a member’s DROP account. Staff will provide an updated lay-off list and determine how many DROP participants withdraw money in a one-time lump sum and how many take a series of distributions.

• INVESTMENT: In addition to the monthly portfolio update, the Committee/Board reviewed the 2nd Quarter Real Estate Performance report, the 2nd Quarter Net of Fees Performance report and the Semi-Annual Proxy Voting Report.

Motions Approved
At its September 2009 meeting, the OP&F Board of Trustees passed the following motions:

• Accepted the recommendation of Wilshire Associates, to revise the Total Fund Policy Benchmark as discussed with the Board on September 28, 2009 (Investment Committee).
• Accepted the rating recommendations of staff for Mellon Capital and Neuberger-Berman, as outlined in Investment staff’s memos to the Board dated September 28, 2009 (Investment Committee).
• Accepted the proposed modifications to the Investment Policy regarding allowable Cash Equivalents investments as outlined in staff’s memo dated September 28, 2009 (Investment Committee).
• Hired Russell Implementation Services Inc. to provide derivative overlay investment management services for OP&F, upon such terms favorable or protective to OP&F, as determined by the Executive Director (Investment Committee).
• Approved the awards for the initial determination of disability for the 22 members as identified in the IDH list presented to the Board on September 28, 2009 (Disability Committee).
• Approved the awards for the appeal hearings for the seven members identified in the disability appeals list presented to the Board on September 29, 2009 (Disability Committee).
• Approved the determination for reconsideration hearings for the members identified (Disability Committee).
• Announced the determinations for the Death Fund Benefit for applicants 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 September 28, 2009, in accordance with policy on Waiver of Earnings Statement and Medical Evaluations (Disability Committee).
• Affirmed its previous decision on the termination of disability benefits for the member identified in staff’s memorandum dated September 29, 2009 (Disability Committee).
• Approved the Administrative Rules outlined in staffs’ memorandum dated September 28, 2009, with no changes being made for the reason outlined in such memorandum, and authorizes the required filing of the rules with the proper agencies (Benefits Committee).
• Authorized the General Counsel to institute the legal actions described in Executive Session on September 29, 2009 (Benefits Committee).
• Authorized OP&F staff to begin negations for the renewal of the Administrative Service Agreement with United Health Care to provide third party administrative services for the OP&F retiree and staff health care plans (Health Care Committee).
• Approved the Administration/Audit Committee’s travel recommendations as presented and discussed on Tuesday, September 29, 2009 (Administration/Audit Committee).
• Authorized General Counsel to negotiate an agreement with the Board’s independent election firm, the American Arbitration Association, which includes only paper ballots for voting as part of the 2010 Election (Administration/Audit Committee).
• Approved the Finance Committees’ travel recommendations as presented and discussed on Tuesday, August 25, 2009 (Finance Committee).
• Approved the Administration/Audit, Disability, Benefit, Health Care, Finance and the Investment Committee Charters as presented to the Board of Trustees on July 21, 2009.
• Adopted the 2009 30 Year Funding Plan to be submitted to the Ohio Retirement Study Council (“ORSC”) in the form presented to the Board by its actuary on August 25, 2009. The 30 Year Funding Plan will be submitted as a package to the ORSC, and the Board will only enact the discretionary elements of the Plan if all the statutory changes contained in the Plan are enacted into law by the Ohio General Assembly (Board of Trustees).

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