September 2011 Monthly Board Report

OP&F MOURNS LOSS OF TRUSTEE WILLIAM GALLAGHER
The Board of Trustees and staff of the Ohio Police & Fire Pension Fund mourn the passing of longtime OP&F trustee William D. Gallagher, who passed away Sunday, Sept. 4. Gallagher was serving as Vice Chairman and was the most experienced member of OP&F’s Board of Trustees, having been first elected in 1993. He had served continuously since 2000 and was serving the final year of a term representing retired police officers. Prior to retirement, Gallagher served 30 years with the Cleveland Police Department, retiring as a detective. He was also a U.S. Navy veteran (Korea) and President Emeritus of the Fraternal Order of Police Lodge No. 8.

BOARD BEGINS SEARCH FOR RETIRED POLICE TRUSTEE
At its September meeting, the OP&F Board of Trustees formed a subcommittee to lead the search to fill the vacant retired police trustee position. Retired police members of OP&F or survivors of retired police members may apply for the vacant trustee position by sending a resume to OP&F, to the attention of Executive Director William J. Estabrook.

Applications must be received by 4 p.m., Monday, Oct. 31, 2011. The Board’s subcommittee will review all applications and anticipate interviewing candidates at the Nov. 16, 2011 Board meeting in Columbus. The new trustee could be appointed as early as the Dec. 13-14, 2011 Board meetings. The newly appointed trustee will fulfill the unexpired term of William Gallagher, who passed away Sept, 4. The term expires in June 2012. An election for a new four-year term will be conducted in the spring of 2012.

PORTFOLIO UPDATE

OP&F’s investment portfolio value:

• Current value (9/27):             $11.2 billion
• End of August value:              $11.6 billion
• End of July value:                   $12.2 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 discussed the mailing of the Annual Earnings Statements and several other topics related to the disability evaluation process. Among topics requiring further discussion is addressing applicants’ impairments which existed prior to OP&F membership, reducing the post-employment eligibility period to file a disability benefits application and analyzing mental health data for the appropriate period in 2012.
• INVESTMENT:  In addition to the monthly portfolio update, the Committee/Board discussed a report from Wilshire Associates on 2nd quarter 2011 investment performance. Other reports supplied to the Board for review included the Manager Compliance Review, the Semi-Annual Securities Lending Report, the Semi-Annual Contribution Report, and the Private Markets Report.
• HEALTH CARE:  The Health Care Committee/Board reviewed the 2nd Quarter Health Care Stabilization Fund Report and received an update on the non-AARP Medicare group with a disability benefit. The UnitedHealthcare update included reports on the 2012 Annual Change Period, the OP&F/UnitedHealthcare Wellness Online Program and the Diabetes Health Plan. UnitedHealthcare also discussed with the Board the upcoming merger of Medco and Express Scripts in 2012, and plans for UnitedHealthcare to bring the prescription drug processing in-house.
• BENEFITS:  The Benefits Committee reviewed and discussed the cash flow from Deferred Retirement Option Plan (DROP) accruals and data showing OP&F members who are eligible for DROP, but not enrolled.

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

• The Board heard presentations from the four finalists and selected ­­­Penn Capital and MacKay Shields for high yield investment mandates. Motion passed by unanimous vote. (Investment Committee).
• Following a presentation by Summit Partners and analysis by staff, the Board approved the staff’s recommendation to invest $25 million in Summit Partners VII. Motion passed by unanimous vote.
• Following a presentation by Jamestown and analysis from Townsend, the Board approved Townsend’s recommendation to invest $75 million in Jamestown Premier Property Fund. Motion passed by unanimous vote.
• Following a presentation by DivcoWest and analysis from Townsend, the Board approved Townsend’s recommendation to invest $35 million in DivcoWest Fund III. Motion passed by unanimous vote.
• Approved the manager ratings recommended by staff for AQR, Bridgewater Global Macro and Mellon. Motion passed unanimously. (Investment Committee).
• Approved the ratings recommended by Townsend for the real estate managers. Motion passed unanimously. (Investment Committee).
• Approved the Committee recommendations for the initial determination of disability for the 38 members as identified in the initial determination hearings list presented to the Board on Sept. 28, 2011 (Disability Committee).
• Approved the determination for reconsiderations for the members identified (Disability Committee).
• Approved the recommendations for the appeal hearings for the 10 members as identified in the appeals list presented to the Board on Sept. 28, 2011 (Disability Committee).
• Approved the determination for Death Fund benefits for the members identified (Disability Committee).
• Approved the determination for death fund reconsiderations 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 Sept. 28, 2011 (Disability Committee).
• Approved the Administrative Rules as outlined in staff’s memorandum dated Sept. 27, 2011, and authorizes the required filing of the rules with the proper agencies (Benefit Committee).

 Next Board of Trustees Meetings:October 25-26, 2011