Two of the three appointed members of the OP&F Board of Trustees have completed their four-year terms and the third will finish his term in December. In addition to the six elected members of the Board, three “investment expert” members are appointed as trustees: one by the Governor, one by the Treasurer of State and one as a joint appointment by the Ohio House of Representatives and Ohio Senate.

The term for the Governor’s representative, Robert Baker (Cleveland), expired in September. The term for the General Assembly’s representative, Gerald Williams (Columbus), expired following OP&F’s October Board meetings and the term of the Treasurer of State’s representative, David Gelbaugh (Columbus), will expire in December. New appointees have yet to be named.

NOVEMBER BOARD MEETING SCHEDULED FOR NOVEMBER 25

The November 2008 Board of Trustees meeting will be held on Tuesday, November 25. The meeting (usually held on Wednesday mornings) will now take place following the disability appeals hearings at approximately 3 p.m. Committee meetings of the Board of Trustees will take place as scheduled on Monday, November 24.

BLUE LIGHT CEREMONY HELD IN MEMORIAL PARK NOVEMBER 8

OP&F’s Memorial Park will again be the site of the annual Blue Light Remembrance ceremony on Saturday, November 8. The event will begin at approximately 7:45 p.m. and is organized by Concerns of Police Survivors (COPS). The Blue Light ceremony honors police officers who have died in the line of duty.

1/1/2008 ACTUARIAL VALUATION SHOWS IMPROVEMENT IN FUNDING RATIO

OP&F’s actuarial consultant presented the annual Actuarial Valuation to the Board of Trustees at their meeting on October 28. The study revealed that OP&F’s funded ratio improved to 81.7 percent from 78.2 percent the previous year. The valuation was based on OP&F’s assets and liabilities as of January 1, 2008.

BOARD OF TRUSTEE COMMITTEE NOTES
(Actions approved by the Board are listed separately)

ADMINISTRATION/AUDIT: The Information Services update included reports on Pre-Retirement Seminar attendance, the direct deposit enrollment campaign and RFP updates. The Internal Auditor updated the Committee on the all staff ethics training, the upcoming business continuity testing and an audit of the investment reporting management system. The Committee was presented the 2009 Communications Plan, the 2009 Salary and Wages Budget Plan and the 2009 Employee Health care Budget Plan for approval. The Committee also received a presentation on the 2009 budgets for the Administration, Information Services and Trustee departments. Also discussed was the status of filling a vacant trustee position that is to be appointed by the Governor.
DISABILITY: In addition to the scheduled disability hearings and reviews, the Disability Committee reviewed the 3rd Quarter Disability Experience Report and received an update that two disability benefit recipients plan to continue employment in positions that appear to be in conflict with a revised rule that lists prohibited positions.
HEALTH CARE: The Committee/Board of Trustees discussed the Annual Change Period meetings, noting that attendance was less than a year ago and that most questions regarded contribution amounts and if there were going to be additional changes in 2009. The Committee/Board also discussed the aging-in process for those members who become Medicare-eligible throughout the year. Also discussed was the recent announcement by Medical Mutual of Ohio that information of approximately 500 members was lost, apparently in the U.S. Postal system.
BENEFITS: The Committee reviewed the 2009 Member Services Department budget and had discussions concerning compensation time cash outs, a pending IRS rule prohibiting receiving retirement benefits prior to age 55 and were informed that the “in service” distribution provision of the Pension Protection Act is not an issue with Deferred Retirement Option Plan participants.
INVESTMENT: In addition to the monthly portfolio update, the Committee/Board of Trustees reviewed the Private Markets Report, discussed a report by Wilshire Consulting on the current credit crisis and equity market sell-off and discussed with Townsend Group representatives the outlook for the real estate market and OP&F’s real estate investments.
FINANCE: The Committee reviewed the 2009 Finance Department budget and the 2009 OP&F Capital Budget.

MOTIONS APPROVED
At its October 29, 2008 meeting, the OP&F Board of Trustees passed the following motions:

Accepted the rating recommendations of staff for Chicago Equity, as outlined in Investment Staff’s memo to the Board dated October 28, 2008 (Investment Committee).
Approved the awards for the Initial Determination Hearings (IDH) for 24 members as identified in the IDH list presented to the Board on October 27, 2008. Members #15 and #16 are postponed for re-examination, and disability benefits are denied for members #3 and #17 (Disability Committee).
Approved the awards for the appeal hearings for the three members identified in the disability appeals list presented to the Board on October 28, 2008, changed to a presumptive maximum partial award for the member identified as member #3, no change is made in the grant for members #2 and #7, and member #6 is postponed for additional information. The Board reinstates disability benefits effective April 23, 2008, for the member identified as member #1 in the disability appeals of termination list presented to the Board on October 28, 2008 (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 those members identified in the disability reporting waivers list presented to the Board on October 27, 2008, in accordance with the Policy of Waiver of Earnings Statement and Medical Evaluations (Disability Committee).
Approved the changes to Administrative Rule 742-3-05, Disability Benefits Procedure, in the form presented to the Board on October 28, 2008 and authorizes the required filing of the Rule with the proper agencies (Disability Committee).
Approved Administrative Rule 742-4-01, General DROP Definitions, as outlined in staff’s memorandum dated October 27, 2008, with no change being made for the reason outlined in such memorandum, and approves the change to Administrative Rule 742-4-01, Definition of Service Credit, as outlined in staff’s memorandum dated October 27, 2008, and authorizes the required filing of the Rule with the proper agencies (Disability Committee).
Adopted the rules outlined in staff’s memorandum dated October 27, 2008, with no changes for the reason outlined in such memorandum (Health Care Committee)
Approved the changes to Administrative Rule 742-9-16, as outlined in Exhibit A of staff’s memorandum dated October 28, 2008, and authorizes the required filing of the Rule with the proper agencies (Disability Committee).
Approved the submission of OP&F’s Actuarial Pension Valuation and the Health Care Valuation (GASB 43) as of January 1, 2008, to the Ohio Retirement Study Council as presented by Buck Consultants on October 28, 2008 (Finance Committee).
Approved the Administration/Audit Committee’s travel recommendation, as presented and discussed on October 28, 2008 (Administration/Audit Committee).

Attachments

Comments from Chief Investment Officer