Members Present:

John Hammond, Howard Brown, William Brown, Jay Cuccia, Andrea Fulton, Frank Marzucco, M. Kathleen Sulick, Dennis Callahan, Doug Willis, and Jay Middleton

Members Excused:

Hunter Calloway, Jennifer Gilbert-Duran and LeRoy Wilkison

Staff Present:

Judi Lohn, Joanna Winchester

The meeting of the Board of Trustees of The Anne Arundel County Retirement and Pension System (Board) was called to order at 12:22 p.m. by Chairman John Hammond.

• William Brown moved to approve the minutes for the April 12, 2007 Board of Trustee meetings.  The motion was seconded by Douglas Willis and approved unanimously.

• Rhett Humphries of New England Pension Consultants (NEPC) distributed and discussed the First Quarter 2007 Executive Performance Report, which included the Preliminary Flash Report for period ending 4/30/2007. 

Mr. Hammond noted that the investment policy needed to be updated regarding new managers and adopted by the Board Members.

• Brian Marvin and Terry Mason of Marvin & Palmer Associates, Inc. were in attendance to discuss their firm and the performance of the Emerging Market Portfolio.
• Thomas J. Rosalanko and Thomas G. Smith of GMO were in attendance to discuss their firm and the performance of the International Small Capt. Portfolio. 
• Mr. Hammond distributed the minutes from the April 12, 2007 and May 3, 2007 Investment Committee meetings to the board members.     

• Judi Lohn of the Office of Personnel distributed an updated retirement chart with additional information regarding seminars, number of projections that the analyst had processed and the number of terminations processed.
• A draft copy of the Pension Points newsletter was previously mailed to the Board members.  Ms. Lohn asked that the Board members submit any changes to her or Tina Johnson by May 18, 2007.
• Ms. Lohn also noted that the Pension Benefit Statements have been sent to the printer and that they would be mailed to the employees in June.
• Clifton Gunderson has completed their audit and has noted a weakness.  The Pension Fund is benefiting from abandoned property.  Ms. Lohn noted that the Office of Personnel was aware of the issue and was in the process of transferring funds from 1996 to 2004 to the State unclaimed property department.

William Brown noted that this was the only item in the audit management letter and it is not significant.  The audit is complete and they are currently in the process of getting the audit report printed and sent to the government financial officers association for certificate of excellence in financial reporting.

• Ms. Lohn noted that the Income Verification responses were coming back in and COLA statements would be going out soon.
• Mr. Brown wanted to bring to the board’s attention that he received a report from Aetna regarding the annuity separate account summary.  The report indicates that as of March 31 there is 5.2 million dollars available for withdrawal.  Mr. Brown noted that this money is used to pay retirees who are still with Aetna.

Mr. Hammond noted that this was something that comes up every year.  The policy has been to leave these funds as is and that they are receiving a market rate of return in the annuity account.  The future plan is to eventually see this account go to zero. 

• Dennis Callahan expressed concerns regarding a possible down slide in the market and whether the board should be preparing employees for such a turn in the market. 

Mr. Hammond noted that the fund had 60 million dollars in capital gains, from an actuarial stand point, and that if the market did deteriorate, those capital gains would stabilize any deduction in the actuarial value, which drives the amount of money that the county has to contribute to the funds.

• Kathy Sulick expressed concerns on educating the employees on Asset Allocation with regards to T. Rowe Price accounts.

Ms. Lohn commented that educating the employees regarding savings was a priority and that as more retirement information seminars were scheduled that point would be stressed to the employees.  Ms. Lohn also noted that as part of an enhancement to the deferred compensation plan, which T. Rowe Price was awarded, they would be offering several different types of seminars to educate both beginners and savvy employees, on allocating their funds.   

• The meeting adjourned at 2:00 pm.  The next meeting is scheduled for June 14, 2007 @ 12:00 pm