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Home My WebLink About07.a.2) CCCERA Update7.0.2) Central Contra Costa Sanitary District July 1, 2011 TO: HONORABLE BOARD OF DIRECTORS VIA: JAMES M. KELLY, GENERAL MANAGER 9 lz� FROM: RANDALL M. MUSGRAVES, DIRECTOR OF ADMINISTRATION M� SUBJECT: CONTRA COSTA COUNTY EMPLOYEES' RETIREMENT ASSOCIATION (CCCERA) 6/15/2011 BOARD MEETING Attached is a copy of the June 15, 2011 CCCERA Board meeting agenda and the agenda material. The meeting focused on updates and review of CCCERA's investments. Of specific interest to the District is item #9 regarding the Market Stabilization Account. Also of interest, is #8 regarding the addition of one Retirement Counselor position. Item # 5 is a lengthy Asset Allocation report dealing with investment allocation and is available upon request. #8 Consider and take possible action on staff recommendation to create a Retirement Counselor position. CCCERA has two Retirement Counselors out on medical leave. One has already informed them that she will not be returning. Because of the increased workload from increased retirements, Marilyn Leedom requested the addition of one Retirement Counselor now with one returning from medical leave soon. The CCCERA Board approved the request in an effort to not delay retirement processing. #9 Consider and take possible action on Market Stabilization Account. The bottom line is that the CCCERA assets improved by $620,000,000 from June 30, 2010 to December 31, 2010. The Market Stabilization Account is designed to display the amount over or (under) the expected rate of return. The rate of return is used to determine the necessary funding by employers and employees to ensure full funding within twenty years (the maximum UAAL length of time). The amount of earnings less than expected are reported in red and the amount of earnings greater than expected are in black on the attached Market Stabilization Account documents. The June 30, 2010 accounting shows mostly red numbers with all five year totals in red. The five year total displays a $(948, 939,653) under the expected rate of return. On the December 31, 2010 accounting, only two years, 2011 and 2012, are red and the total has dropped to $(328,813,953). This is very good financial news for the retirement system and for the employers. Staff will be available to answer any questions the Board may have. Employees" 1355 willow way 925.52 1 RETIREMENT BOARD MEETING FIRST MONTHLY MEETING 9:00 a.m. June 15, 2011 tire m e nt Asso c is flo n suite 221 concord ca 94520 .3960 fax 925.646.5747 Retirement Board Conference Room The Willows Office Park 1355 Willow Way Suite 221 Concord, California THE RETIREMENT BOARD MAY DISCUSS AND TAKE ACTION ON THE FOLLOWING: Pledge of Allegiance 2. Accept comments from the public. Approve minutes from the June 1, 2011 meeting. 4. Routine items for June 15, 2011. a. Approve certifications of membership. b. Approve service and disability allowances. c. Accept disability applications and authorize subpoenas as required. d. Approve death benefits. Presentation from Milliman on Asset Allocation Study. 6. Consider and take possible action on Asset Allocation Study. 7. Update from Milliman on Small Cap Value search. 8. Consider and take possible action on staff recommendation to create a Retirement Counselor position. Consider and take possible action on Market Stabilization Account. 10. Consider authorizing the attendance of Board and /or staff: a. Fall meeting, Council of Institutional Investors, September 25 — 27, 2011, Boston, MA. b. Administrator's Institute, CALAPRS, September 28 —30, 2011, Huntington Beach, CA. 11. Miscellaneous a. Staff Report b. Outside Professionals' Report c. Trustees' comments The Retirement Board will provide reasonable accommodations for persons with disabilities planning to attend Board meetings who contact the Retirement Office at least 24 hours before a meeting CONTRA COSTA COUNTY EMPLOYEES' RETIREMENT ASSOCIATION c DATE 6/15/,1 A4GENDA rTEa BOARDOF RETIREMENT # Page 1 June 15, 2011 Items requiring Board Action — It was M /S /C to approve the following: 2274MUMET07. n.=- Effective Option Name dumber Date Type Group oup Selected Alonzo, Socorro 53989 03131/11 SR II Unmod Alonzo, Socorro 53989 03/31/11 SR III Unmod Arbulu, Miguel 55276 03/31/11 SR I Unmod Azari, Pirayeh 49469 03/31/11 SR III Unmod Bagno, Susanne 22535 03131/11 SR I Unmod Banks; Deborah 45977 03/31/11 SR II Unmod Banks, Deborah 45977 03/31/11 SR III Unmod Barber, Wanda 46025 03/31/11 SR II Unmod Barber, Wanda 46025 03/31/11 SR III Unmod Bardin, Claude 39179 03/31/11 SR III Unmod Bar -Lev, Beryl 45219 03/31/11 SR III Unmod Belche, Joseph 28457 03/31/11 SR I Option 2 Belche, Joseph 28457 03/31/11 SR III Option 2 Berry, Steve 50590 03/15/11 SR II Unmod Berry, Steve 50590 03/15/11 SR III Unmod Bidwell, Antonetta 37741 03/31/11 SR II Unmod Bidwell, Antonetta 37741 03/31/11 SR III Unmod Black, Linda 31469 03/31/11 SR I Unmod Black, Linda 31469 03/31/11 SR II Unmod Slack, Linda 31469 03/31/11 SR III Unmod Boney, Teresa 38148 03/31/11 SR II Unmod Boney, Teresa 38148 03/31/11 SR III Unmod Breasher, Jeffrey D7830 03/31/11 SR S Unmod Broderick, Dennis 63921 03/31/11 SR II Option 1 Broderick, Dennis 63921 03/31/11 SR III Option 1 Brooks, Grace 62355 03/31/11 SR II Unmod Brooks, Grace 62355 03/31/11 SR III Unmod Brown, Stephanie 47782 03/31/11 SR S Unmod Card, Deborah 33940 03/31/11 SR I Option 1 Cariaso, Petronilo 44254 03/31/11 SR III Unmod Carino, Leonora 41819 03/31/08 SR Ii Unmod Carino, Leonora 41819 03/31/08 SR III Unmod KEY: Group Option Type I = Tier I * = County Advance SR = Service Retirement II = Tier II Selected w /option (LSD = Non- Service Disability III = Ter III SCD = Service Disability S = Safety NSP = Non - Specified CONTRA COSTA COUNTY EMPLOYEES' RETIREMENT ASSOCIATION Page 2 Castillo, Alicia Castillo, Alicia Chachere, Claire Chachere, Claire Chandler, Linda Clancy, Rhonda Clancy, Rhonda Cleveland, Victoria Cleveland, Victoria Coleman, Jayona Coleman, Jayona Commins, Karen Compton, Sharon Consiglio, Kenneth Contestable, Carla Contestable, Carla Contreras, Connie Contreras, Connie Cronin, Yolanda Dawes, Vickie Dea, Winston Dea, Winston Dinning, Steven Devlin, Eileen Dumford, Kevin Dumford, Kevin Duncan, Susan Duncan, Susan Edmonds, Paula Edmonds, Paula Elias, Angelina England, Rebecca Fagundes, Jeffrey Flakoll, Marsha Flakoll, Marsha Flanagan, Albert Fleischmann, Joseph Forsey, Linda Frisk, Ann Garcia, Deborah Garcia, Joan Garcia, Joan KEY: Group I = Tier I II = Ter II III = Tier III S = Safety BOARD OF RETIREMENT June 15, 2011 43753 01/15/11 SR II Unmod 43753 01/15/11 SR III Unmod 46311 03/31/11 SR II Unmod 46311 03/31/11 SR III Unmod 43989 03/31/11 SR III Unmod 41901 02/25/11 SR II Unmod 41901 02/25/11 SR III Unmod 37954 03/31/11 SR II Unmod 37954 03/31/11 SR III Unmod 61821 03/31/11 SR II Unmod 61821 03/31/11 SR III Unmod 44172 03/31111 SR III Unmod 56057 03/31/11 SR III Unmod D7274 03/31/11 SR S Unmod 41939 03/16/11 SR II Unmod 41939 03/16/11 SR III Unmod 37254 03/31/11 SR II Option 1 37254 03/31/11 SR III Option 1 45822 03/31/11 SR I Unmod 34296 03/31/11 SR I Unmod 32684 03/31/11 SR I Unmod 32684 03/31/11 SR III Unmod 51373 03/31/11 SR III Unmod 36355 03/31/11 SR I Unmod 43249 03/26/11 SR II Unmod 43249 03/26/11 SR III Unmod 47820 03/31/11 SR II Unmod 47820 03/31/11 SR III Unmod 42543 03/31/11 SR II Unmod 42543 03/31/11 SR III Unmod 40260 03/31/11 SR III Unmod 34777 03/31/11 SR I Unmod D7830 03/31/11 SR S Unmod 41680 03/31/11 SR II Unmod 41680 03/31/11 SR III Unmod 41471 03/31/11 SR III Unmod 47467 05/01/11 SR I Unmod 32523 03/04/11 SR I Unmod 47713 03/31/11 SR III Unmod 29951 03/31/11 SR I Unmod 43023 03/31/11 SR II Unmod 43023 03/31/11 SR III Unmod Option Type * = County Advance SR = Service Retirement Selected w /option NSD = Non - Service Disability SCD = Service Disability NSP = Non - Specified CONTRA COSTA COUNTY EMPLOYEES' RETIREMENT ASSOCIATION BOARD OF RETIREMENT Page 3 Gregory, Justin 42216 03/31/11 Gillan, Daniel 34657 03/31/11 Gillan, Daniel 34657 03/31/11 Gillan, Daniel 34657 03/31/11 Guyse, Mary 28539 03/29/11 Haskell, Jean 38306 02/28/11 Haskell, Jean 38306 02/28/11 Hinkson, Robert D3406 03/31/11 Jaramillo, Olga 55046 03/31/11 Jensen- Jordan, Carolyn 48701 12/01/10 Kaufmann, Tina 36325 03/31/11 Knodell, Deborah 41414 03/31/11 Knodell, Deborah 41414 03/31/11 Koch, Lori 36786 03/31/11 Koch, Lori 36786 03/31/11 Koch, Timothy 35638 03/31/11 Laparan, Josefina 34648 03/30/11 Lawrence, Claudia 33681 03/01/11 Lawrence, Claudia 33681 03/01/11 Lee, Thomas 39774 03/31/11 Lee, Thomas 39774 03/31/11 Lerman, Edward 37674 03/31/11 Lerman, Edward 37674 03/31/11 LeTellier, Laura 38176AP 02/18/11 Lunt, Stanley 48866 03/31/11 Lunt, Stanley 48866 03/31/11 Lynch, James 31665 03/31/11 Lynch, James 31665 03/31/11 Major, Teri 60790 02/23/11 Martin, Martha 51901 03/29/11 Martin, Martha 51901 03/29/11 Martin, Ronald 48304 03/31/11 Marzette, Yolanda D9500 04/05/11 Marzioli, Rhea 45300 03/31/11 Marzioli, Rhea 45300 03/31/11 McCarthy, Kevin 34809 03/30/11 McClanahan, Debra 52779 03/31/11 Merritt, Nikki 61749 03/31/11 Merritt, Nikki 61749 03/31/11 Mesa, Maria 34870 03/31/11 Mikovich, Mark 40610 03/31/11 Mitchell, Joslyn 44256 03/31/11 KEY: Group Option I = Tier I * = County Advance II = Tier II Selected w /option III = Tier III S = Safety June 15, 2011 SR S Unmod SR I Unmod SR II Unmod SR III Unmod SR I Unmod SR II Unmod SR III Unmod SR I Unmod SR III Unmod SR III Unmod SR I Unmod SR II Unmod SR III Unmod SR I Unmod SR II Unmod SR S Unmod SR I Unmod SR II Unmod SR III Unmod SR II Option 1 SR III Option 1 SR II Unmod SR III Unmod SR I Unmod SR II Unmod SR III Unmod SR I Unmod SR III Unmod SCD S Unmod SR II Unmod SR III Unmod SR S Unmod SR I Unmod SR II Unmod SR III Unmod SR S Unmod SR III Option 1 SR II Unmod SR III Unmod SR III Unmod SR S Unmod SR III Unmod TVDe SR = Service Retirement NSD = Non - Service Disability SCD = Service Disability NSP = Non - Specified CONTRA COSTA COUNTY EMPLOYEES' RETIREMENT ASSOCIATION BOARD OF RETIREMENT Page 4 June 15, 2011 Moore, Brenda 45914 03/15/11 SR II Unmod Moore, Brenda 45914 03/15/11 SR III Unmod Morley, Timothy D7830 03/30/11 SR S Unmod Mowbray, Robert 33410 03/31/11 SR I Unmod Nunes, Lawrence 33776 03/31/11 SR S Unmod Owings, Rowena 60805 03/01/11 SR III Unmod Pananganan, Celia 47968 03/05/11 SR II Unmod Pananganan, Celia 47968 03/05/11 SR III Unmod Payton, Olivia 25146 01/31/11 SR I Unmod Payton, Olivia 25146 01/31/11 SR III Unmod Peyrucain, Nadine 28520 03131/11 SR I Unmod Peyrucain, Nadine 28520 03/31/11 SR III Unmod Peyrucain, Yvette 54550 03/31/11 SR III Unmod Pollock, Zoe D3406 04/02/11 SR I Unmod Poplin, Danny 41885 03/31/11 SR S Unmod Powell, Richard D3406 03/18/11 SR I Unmod Pratt, Karen 33072 03/31/11 SR I Unmod Pulley, Ronald 56504 03/31/11 SR III Option 2 Rathbone, Steven 64826 03/31/11 SR I Unmod Robinson, Deborah 37287 03/31/11 SR III Unmod Rollins, Debbie 27021 03/31/11 SR I Unmod Ryan, James 60457 03/31/11 SR I Unmod Sambrailo, John D7830 03/31/11 SR S Unmod Scudero, Frank 42762 03/31/11 SR II Unmod Scudero, Frank 42762 03/31/11 SR III Unmod Seawell, Elaine 36986 03/25/11 SR II Unmod Seawell, Elaine 36986 03/25/11 SR III Unmod Seliga, Lawrence 47421 03/31/11 SR S Unmod Shaw, David 34092 03/31/11 SR I Unmod Shaw, David 34092 03/31/11 SR II Unmod Shaw, David 34092 03/31/11 SR III Unmod Silva, Carlos 37928 03/31/11 SR II Unmod Silva, Carlos 37928 03/31/11 SR III Unmod Slusher, Gloria 33437 03/31/11 SR I Unmod Slusher, Gloria 33437 03/31/11 SR II Unmod Slusher, Gloria 33437 03/31/11 SR III Unmod Slusher, Randall 28301 03/31/11 SR I Unmod Slusher, Randall 28301 03/31/11 SR II Unmod Slusher, Randall 28301 03/31/11 SR III Unmod Stanley, Robert 46823 02/26/11 SR II Unmod Stanley, Robert 46823 02/26/11 SR III Unmod KEY: Group Option Type I =Tier I * = County Advance SR = Service Retirement II = Tier II Selected w /option NSD = Non- Service Disability III = Tier III SCD = Service Disability S = Safety NSP = Non - Specified CONTRA COSTA COUNTY EMPLOYEES' RETIREMENT ASSOCIATION BOARD OF RETIREMENT Page 5 Number Filed Type June 15, 2011 Tarango, Sarah 52552 03/31/11 SR II Unmod Tarango, Sarah 52552 03/31/11 SR III Unmod Turner, Susan 60511 03/31/11 SR III Unmod Vargas, Elizabeth 41042 03/31/11 SR III Unmod Weikel, Mark 40935 03/31/11 SR S Unmod Wharton, Patricia 63706 03/23/11 SR III Unmod Whitchurch, Michael D7274 03/31/11 SR S Unmod Wigand, Donna 54106 03/31/11 SR I Unmod Wixson, Lauren 41836 03/31/11 SR II Option 2 Wixson, Lauren 41836 03/31/11 SR III Option 2 Wright, Joy 50179 03/31/11 SR III Unmod Wristen, Elena 38050 03/31/11 SR II Unmod Wristen, Elena 38050 03/31/11 SR III Unmod Young, Patricia 43733 12/22/09 SR II Unmod Young, Patricia 43733 12/22/09 SR III Unmod C. Disability Retirement Applications: The Board's Hearing Officer is hereby authorized to issue subpoenas in the following cases involving disability applications: Name Number Filed Type West, Henry 34160 05/02/11 SCD Hudson, Tracy 44629 05/05/11 NSD Bean, Katheryn 42787 05/16/11 NSD Walker, Felicia 47518 05/20/11 NSD Rodgers, Stephen D7274 05/25/11 SCD Garrison, Jolene 37393 05/26/11 SCD D. Death Benefits: Name None KEY. Group I = Tier I II =Tier II III = Tier III S = Safety Number Date of Death Option * = County Advance Selected w /option Paid To Tvne SR = Service Retirement NSD = Non - Service Disability SCD = Service Disability NSP = Non - Specified WITM I i-# It Alin- UNDER REVIEW; GSAM - Organization, Board Action 09)01/10 Invesco MEF - Performance, Board Action 04W0 Rothschild - Terminated, Board Action 0 3A Progress - Terminated, Board Action 07423)q1 Adelante - Performance, Board Action 02/25/09 Emerald Advisors - Performance, Board Action 05/21}/08 PIMCO (Stodcs Plus) - Performanco, Board Action 05/28/08 Nogales Investors- Performance, Board Action VV28108 A S 0 D C-13 D-A %.f ?"get Target A.-t. market Wirt. Atal Aw"ta over funder) Over Under Ram 5.5% 5-5% 3.5% 0.4% 3.4010 2.40/. 3.5% 3.8% 295,414,900 295,414,900 187,991,300 21,484,720 182,620,120 128,908,320 187,991,300 204,104,840 309,030,000 309,478,000 209,964,000 25,226,000 191,163,000 191,133,000 196,724,000 204,293,000 5.75% 5.76% 3.91% 0.47% 3.56% 3.56% 3.66% 3,80% 13,615,100 14,063,100 21,972,700 8,542,880 62,224,680 8,732,700 188,160 0.260/. 0.26% 0.41% 0.07% 0.16% 116% 0.16°, /0 0.00% 2&0% 1,503,930,400 1,637,011,000 30.48% 133,080,600 148%. 5:2% 5.2% 279,301,360 279,301,360 277,594,000 277,594,000 5.17% 5.17% (1,707,360) (1,707,360) (0,03%) (9,03010) 10.4% 558,602,720. 555,188,000 10.34% (31414,720) (0.06%1 4.80/6 2.4% 2.40/6 257,816,640 128,908,320 128,908,320 263,131,000 129,486,000 125,58110w 4.90% 2,41% 2,34% 5,314,360 577,680 (3,327,320) 0.100/0 0,01% (0.06%)l 9.6% 515,633,280 518,198,000 9,65% 2,564,720 0.05% 48.00% 2,578,168 ,400 2,710,397,000 50.46% 132,230,600 2.460/a 44% TO 540% 3.4% 6.9% 0.00/0 54% 5.4% 0,9% 1.70/0 182,620,120 370,611,420 0 290,043,720 290,043,720 48,340,620 91,310,060 173,782,000 356,878,000 22,624,000 270,843,000 270,962,000 52,361,000 70,445,000 3.24% 6,644% 0.42% 5,04% &04% 0,97% 1.31% (8,838,120) (13,733,420) 22,624,000 (19,200,720) (19,081,720) 4,020,380 1 (M865,060) (0,160%) (0.260%) 0.42% (0.36%) (036%) 0.07% (0,39%) 23.7% 1,272,969,660 1,217,895,000 22.67% (55,074,660) (1,03%) 4.0% 214,847,200 214,910,000 4,00% 62,800 0.00% 27.7% 1,487,816,860 1,432,805,000 26.68% (55,011,860) (1.02%) 24% TO 340/. 31W/0 161,135,400 157,324,000 2;93% (3,811,400) (0.07%) 3.0% 161,135,400 157,324,000 2.93% (3,811,400) (0.070/0) 1% TO 50/6 11.50/0 617,685,700 653,568,000 12,17%. 35,882,300 0.67*/6 8% TO 14% 7.0% 375,982,600 302,193,000 5.63% (73,789,600) J1,371/6) 5% TO 956 1,437,000 22.102,000 0.03% 0.41% 0.5% 26,855,900 23,539,000 0.44% (3,316,900) (0.06%) 01/0 TO 1% 1.4% 0.9% 75,196,520 - 1 48,340,620 69,493,000 21,861000 1,29% 0.41% (5.703,520) (26,479,620) (0.114/0) (0.490fo ) 2.3% 123,537,140 91,354,000 1.70% (32,183,140) (0.60%) OOA TO 5% _ 100.000% 6,371,120,000 5,371,180,000 100% 0 1 Real Estate & Alternative Investments As of April 30, 2011 REAL ESTATE INVESTMENTS Inception Date Target Termination Funding Commitment Market Value % of Total Asset utstan ing Commitment DLJ Real Estate Capital Partners, L.P. II 04/00/99 7/14/2009 40,000,000 3,849,000 0.07% , 5,343,000 DLJ Real Estate Capital Partners, L.P. 111 06101/05 1/1/2014 75,000,000 43,094,000 0.80% 18,958,000 DLJ Real Estate Capital Partners, L.P. IV 12126/07 1/1/2016 100,000,000 46,223,000 0.86 % 52,157,000 Hearthstone Partners 1 06115/95 12/31/2003 3,750.000 71,0110 0.001,�-111 t) Hearthstone Partners tI 06117/98 12/3112009 E�,250,000 26,000 0:00'11) 0 Blackrock (SSR) Apartment Value Fund 111 11/02/04 12/31/2013 25,000,000 6,348,000 0.12% 0 Invesco IREF I 10/22/03 4130/2011 50,000,000 25,690,000 0.48 % 6,106,000 Invesco IREF IT 05/30/07 12/31/2015 85,000,000 32,811,000 0.61% 32,554,000 Fidelity FREG II 02/26/04 2/26/2012 50,000,000 14,682,000 0.27% 90,000 Fidelity FREG III 03131/07 3/31/2015 75,000,000 29,672,000 0.55% 31,130,000 Adelante Capital Management (REIT) 2129/09 12/31/2017 0 385,306,000 7.17% 7,205,000 INVESCO International REIT 11/30/07 12/31/2017 0 57,796,000 1.08% 11,589,000 Willows Office: $10,774,100 *** 1 01/31/08 1/31/2016 0 8,000,000 0.15% 11,173,000 * ** Purchase price $10,600,000 plus acquisition cost and fees $174,100. 650,000,000 1 1 590,000,000 1 653,568,000 1 12.17% 1 146,338,000 Outstanding Commitments 146,338,000 Total 799,906,000 ALTERNATIVE INVESTMENTS Inception Date Target Termination Funding Commitment Market Value % of Total Asset Outstanding Commitment Adams Street Partners 12/22/95 INDEFINITE 180,000,000 80,176,000 1.49 % 62,672,000 Adams Street Secondary I1 12/31/08 12/31/2012 30,000,000 10,584,000 0.20% 22,590,000 Pathway 11/09/98 11/9/2013 125,000,000 69,795,000 1.30% 34,047,000 Pathway 2008 07/31109 12/31/2016 30,000,000 2,475,000 0.00% 27,436,000 EIF USPF I 11/26/03 6/30/2011 30,000,000 7,279,000 0.14% 0 EIF USPF 11 07/13/05 6/30/2015 50,000,000 44,737,000 0.83% 0 EIF USPF III 05/30107 3/31/2017 65,000,000 35,664,000 0.66% 663,000 EIF USPF IV 08/31/10 9/1/2020 50,000,000 0 0.00% 50,000,000 Nogales Investment 02/15/04 2/15/2014 15,000,000 2,764,000 0.05% 1,651,000 Bay Area Equity Fund 06/14/04 12/31/2012 10,000,000 13,217,000 0.25 % 0 Bay Area Equity Fund I1 2129/09 12/31/2017 10,000,000 2,568,000 0.05% 7,205,000 Paladin 111 11/30/07 12/31/2017 25,000,000 11,196,000 0.21% 11,589,000 Carpenter Community BancFund 1 01/31/08 1/31/2016 30,000,000 1 21,738,000 1 0.40% 11,173,000 650,000,000 1 302,193,000 1 5.58% 229,026,000 Outstanding Commitments 229,026,000 Total 531,219,000 Market value column is the latest ending quarter plus any additional capital calls after the ending quarter. The Target Termination column is the beginning of liquidation of the fund, however, some funds may be extended for an additional two or three years. (Please contact Elaine Boehme if you wish to obtain a copy of the entire report.) Search Overview MEETING DATE MMUM1111 At the February 23, 2011 meeting of the Board, CCCERA made the decision to terminate both Progress Asset Management and Rothschild Asset Management due to poor performance. The assets were temporarily transferred to a small-cap value index fund managed by State Street. Milliman was tasked with finding a permanent small-cap value replacement manager for assets formerly in the Progress and Rothschild Funds. Manager Search Process In our memo dated March 29, 2011, we outlined the initial stages of our search process. Our search began by screening the universe of fund in eVestment for the following factors: • Product classified as small cap value equity; • Product open to new investors; • A portfolio management team that had been together for at least three years, • Asset base of at least $500 million as of December 31, 2010; • At least $300 million of institutional assets in the product; • Returns above those of the Russell 2000 Value Index and an Information Ratio over the three year period ending December 31, 2010 that was above median in a small cap value peer group. (The infian-nation ratio is a measure of how efficiently a manager takes non-benchmark risks in order to achieve excess returns.) This gave us a preliminary universe of 29 firms and 31 products. , We then looked at the performance patterns of each product and eliminated the products that had less-than-consistent performance. We specifically looked at the ability of the products to consistently deliver three-year rolling results in excess of the Russell 2000 Value Index. Additionally, we want this manager to reasonably resemble the Russell 200 Value Index, so we eliminated any products that had a large beta relative the index or that were defined as "deep" value strategies and that as a result would be likely to vary greatly from the index. Finally, we reviewed the investment process and other portfolio characteristics of each remaining candidate. Three firms and three products were eliminated during this review, leaving us with a universe of 13 candidates (shown on the following page). _ml M i I I i m a n Parallel to our screening, we were contacted by large number of managers who wished to participate in the search, several of whom were already included in the final group of candidates. We reviewed our rationale for eliminating each manager that was not brought forward and in most cases we confirmed that the manager was eliminated for valid reasons. Milliman allowed Security Global Investors (SG1) to provide a response for the search. SGI has a long, successful track record managing small /mid ( "smid ") assets and has launched a small cap product that will have three years of history as of June 30, 2011. Firm Questionnaire Recipients Product 1 Brandywine Global Institutional Small Cap Value Equity 2 Ceredex Small Cap Value Equity Strategy 3 Chartwell Small Cap Value 4 Cramer Rosenthal McGlynn Small Cap Value 5 Federated Investors Clover Small Cap Value 6 GAMCO Small Cap Value 7 Lee Munder Capital Group Small Cap Value 8 Opus Capital Management Small Cap Value 9 Perkins Investment Management Small Cap Value 10 1 Robeco Investment Management Robeco Boston Partners Small Cap Value 11 Security Global Investors Small Cap Value 12 Sterling Capital Management Small Cap Value 13 Wellington Management Company Small Cap Value 14 William Blair and Company Small Cap Value Team We distributed questionnaires to the group of 14 candidates on March 25, 2011. Responses were received by April 29, 2011. All but two of the candidates provided responses. Neither Goldman Sachs nor Cramer Rosenthal were able to accommodate a new account of $150 million, and did not respond to the RFP. Milliman is in the advanced stage of reviewing the responses, and will conduct additional due diligence over the next several weeks in order to narrow the field down to a semi- finalist list for review by the Board at the July 13, 2011 Board meeting. 2 MEMO I MEETING DATE From: Marilyn Leedom, Retirement Chief Executive Officer Subject: Retirement Counselors Recommendation: Approve one additional Retirement Counselor position CCCERA's current budget included an allocation of funds for eight full time and I part time counselor positions in the Benefits Department. In mid 2008, one of the incumbent Retirement Counselors went out on medical leave and has applied for a disability retirement. The process has been extended due to delays in the hearing process. Because of the County Human Resource rules, we are unable to fill this position since it is still considered occupied by the person out on medical leave. To date, this position has been unfilled for a total of 36 months. In addition, another Retirement Counselor recently had an emergency, resulting in a leave of absence for an undetermined period of time. We are currently in the process of recruiting for a Benefits Manager, a Benefits Coordinator and a Member Services Technician. Each recruitment takes an extended period of time due to delays in the process at the County Human Resources Department. The time period for the recruitment of these positions is unknown. In the meantime, it is imperative that we continue to provide timely service for our participants. As noted above, we have continued this service in a lean staffing environment. However, due to cross-training needs and timing involved with the training curve for new Retirement Counselors, we find it necessary to fill the vacant position. Because we recently filled two other vacant Retirement Counselor positions, we have a current recruitment list and would be able to interview immediately for this position should it be determined necessary, increasing the depth of the Benefits staff. Recommendation: I respectfully request the Board approve the creation of one additional Retirement Counselor position- MARKET STABILIZATION ACCOUNT (DEFERRED RETURN) as of December 31, 2010 MEETING DATE 06/15/2011 AGENDA ITEM #9 I. Deferred amounts Amount to be applied to: From Period: Remaining Amount 2011 2012 2013 2014 2015 Dec -06 $ 26,222,749 26,222,749 Jun -07 $ 13,457,996 13,457,996 Dec -07 $ (50,517,944) (33,678,629) (16,839,315) Jun -08 $ (221,523,215) (110,761,608) (110,761,607) Dec -08 $ (659,100,022) (263,640,009) (263,640,009) (131,820,004) Jun -09 (23,708,208) (7,902,736) (7,902,736) (7,902,736) Dec -09 $ 334,981,201 95,708,915 95,708,915 95,708,915 47,854,456 Jun -10 $ (214,668,615) (53,667,154) (53,667.154) (53,667,154) (5:1,667,153) Dec -10 $ 466,042,105 103,564,912 103,564,912 103,564,912 103,564,912 51,782,457 $ (230,695,564) $ (ZP>a,- 06,99") $ 5,883,933 $ 97,752,215 $ 51,782,457 Current Contingency Balances Statutory Contingency Designation (1 %) $ - Additional Designated (1 %) per Board policy $ - Presented to Board 6 -15 -11 1% would be: $58,556,953 Add'I 1% would be: 58,556,953 Total $117,113,906 CONTRA TRACKING ACCOUNT (CTA) BALANCE IS accounting /financial statement related /market stabilization bal 06 -30 -2010 & 12 -31 -2010 for Board.xlsll2 -10 FINAL 617!2011 8:07 AM MARKET STABILIZATION ACCOUNT (DEFERRED RETURN) as of June 30, 2010 T. Deferred amounts Amount to be applied to: MEETING DATE 12/08/2010 AGENDA ITEM f ir,JAL- # 14 Remaining Amount 2010 2011 2012 2013 2014 Jun -06 (64,732) Dec -06 $ 52,445,499 Jun -07 $ 20,186,994 Dec -07 $ (67,357,258) Jun -08 $ (276,904,019) Dec -08 $ (790,920,027) Jun -09 $ (27,659,576) Dec -09 $ 382,835,658 Jun -10 $ (241,502,192) $ (154,083,594) $ $ (948,939,653) (64,732) 26,222,749 26,222,750 6,728,998 13,457,996 (16,839,314) (33,678,630) (16,839,314) (55,380,803) (110,761,608) (110,761,608) (131,820,005) (263,640,009) (263,640,009) (3,951,368) (7,902,736) (7,902,736) 47,854,457 95,708,915 95,708,915 (26,833,576) (53,667,154) (53,667,154) $ (154,083,594) $ (334,260,476) $ (357,101,906) Current Contingency Balances Statutory Contingency Designation (1 %) $ - 1% would be: $50,274,064 Additional Designated (1 %) per Board policy $ - Add' 11% would be: 50,274,064 $ - Total $100,548,127 Presented to Board 12 -8 -10 (131,820,004) (7,902,736) 95,708,915 47,854,456 (53,667,154) (53,667,154) $ (97,680,979) $ (5,812,698) CONTRA TRACKING ACCOUNT (CTA) BALANCE IS accounting/financial statement related /market stabilization bal 06 -30 -2010 & 12 -31 -2010 for Board.xls /06 -10 FINAL $ (844,030,11 4J4 6/7/2011 8:07 AM