May 2012 Monthly Board Report

PENSION FUNDING UPDATE: SENATE PASSES SB 340
The OP&F pension funding recommendations contained in SB 340 cleared the first hurdle for legislative approval when the Senate voted 31-3 in favor of the bill. SB 340 was introduced by Senate President Tom Niehaus and Senate Minority Leader Eric Kearney on May 8, and referred to the Senate Insurance, Commerce and Labor Committee where it received hearings before being approved. The Ohio House of Representatives will now consider the bill, but it is not clear when it will receive consideration. An independent review commissioned by the Ohio Retirement Study Council is scheduled to be completed in July. OP&F remains hopeful that the House can complete its work on the legislation this summer. The legislation, as it currently stands, would make several changes to OP&F, including increasing the amount active members pay into the pension fund, increase the retirement age for new members, alter how cost of living adjustments are provided for retirees, and make various changes to the Deferred Retirement Option Plan. For a full list of proposed changes, go to www.op-f.org.

PORTFOLIO UPDATE

OP&F’s investment portfolio value:

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.
• HEALTH CARE: The Committee/Board reviewed and then discussed the 1st Quarter Health Care Stabilization Fund Report. The Committee/Board also received an update from UnitedHealthcare which included the transition of the prescription drug services from Medco to UnitedHealthcare; the Premium Provider designation; mail order prescription refills during a tier change; and the 2012 Annual Change Period.
• INVESTMENT: In addition to the monthly portfolio update, the Committee/Board was presented the 1st Quarter 2012 Performance Review by Wilshire. The Committee/Board also discussed tactical timberland manager evaluations and had a significant discussion with its real estate consultant, Townsend, on their due diligence practices. Also available for review and discussion were the 1st Quarter 2012 Manager Compliance Report, the 2011 Manager Fee Report and the Private Markets Report.

Motions Approved
At its May 2012 meeting, the OP&F Board of Trustees passed the following motions:

• Accepted staff’s investment manager rating recommendation for Investcorp as outlined in staff’s memo to the Board dated May 30, 2012. Motion passed unanimously (Investment Committee).
• Approved the Committee recommendations for the initial determination of disability for the 19 members as identified in the initial determination hearings list presented to the Board on May 30, 2012. Motion passed unanimously (Disability Committee).
• Approved the determination for reconsiderations for the members identified. Motion passed unanimously (Disability Committee).
• Approved the recommendations for the appeal hearings for the six members as identified in the appeals list presented to the Board on May 30, 2012. Motion passed unanimously (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 May 30, 2012. Motion passed unanimously (Disability Committee).

NEXT BOARD OF TRUSTEES MEETINGS: June 26-27, 2012