Colorado Public Employees’ Retirement Association
Board Meeting Minutes
Cheyenne Mountain Resort
3225 Broadmoor Valley Road
Colorado Springs, Colorado
September 23, 2016
8:00 a.m.
Trustees Present:
Maryann Motza, Chair, Carolyn Jonas-Morrison, Vice Chair,
Will Bain, Karl Fisch, Joh Forbes, Amy Grant, Roger Johnson,
Bob Lamb, Susan Murphy, Timothy M. O’Brien, Bill Parker,
Marcus Pennell, Lynn Turner, Carole Wright
Trustees Absent:
David Hall, Scott Noller
Staff Present:
Ron Baker, Adam Franklin, Kevin Gallaway, Karl Greve, Katie
Kaufmanis, David Mather, Tara May, Brenda Meidl, Jennifer
Paquette
Maryann Motza, Chair, Board of Trustees, called the meeting to order at 8:03 a.m.
Approval of the Consent Agenda
A motion was made by Carole Wright and seconded by Karl Fisch that, “the Board
approve the Consent Agenda as published with the following items:
a. Approval of Agenda
b. Approval of Approval of June 14, 2016, Special Board Meeting Minutes
c. Approval of June 21, 2016, Board Meeting Minutes
d. Sudan Report.”
The motion was approved.
Public Comment
There was no public comment.
Board Vacancy
Maryann Motza, Chair, Board of Trustees, and Adam Franklin, PERA General Counsel,
provided information regarding the Board Vacancy due to Trustee Scott Noller’s
resignation. The material was transmitted to Trustees as Tabs D1 and D2 on
September 8, 2016.
A motion was made by Carole Wright and seconded by Susan Murphy that, “pursuant to
C.R.S. 24-51-203, Guillermo Barriga be appointed to serve as a Trustee in the School
Division until the next election of the Trustees.” The motion was approved. Mr. Barriga
was in attendance at the meeting.
Record of Proceedings
September 23, 2016, Board Meeting
Page 2 of 8
Committee Assignments
A motion was made by Karl Fisch and seconded by Marcus Pennell that, “the Board
adopt the Standing Committee Assignments that was transmitted to Trustees on
Wednesday, September 7, 2016, and is included as Tab E in the meeting materials.”
The motion was approved.
Proclamation—Amy Nichols
Carolyn Jonas-Morrison, Vice Chair, Board of Trustees, read the following Proclamation
Concerning Amy Nichols:
Whereas, Amy L. Nichols served as a Trustee on the Board of the Public Employees’
Retirement Association of Colorado (PERA) from July 2000 through June 2016, and
represented the members of the School Division; and
Whereas, during her 16 years on the Board, Amy served as the Chair of both the
Benefits and Stakeholder Relations Committees, and served as a member of the
Investment, Shareholder Responsibility, and Evaluation Committees; and
Whereas, Amy had a strong connection with the PERA membership and her passion for
and knowledge of the teaching profession in Colorado was evident to all who worked
with her; and
Whereas, Amy participated in all PERA meetings and will be remembered for her ability
to ask thoughtful questions and for her thorough knowledge of the challenges and
opportunities facing public retirement systems thereby earning respect from her
colleagues; and
Whereas, Amy embodied the highest qualities of a Trustee and served as a role model
for others to emulate; and
Whereas, through her effective leadership, Amy earned the admiration and esteem of
the PERA Board members and staff; and
Whereas, Amy’s term on the Board of Trustees of PERA ended in June 2016, now
therefore, be it
Resolved, that with the highest level of appreciation and congratulations, the Board of
Trustees of PERA formally recognize and thank Amy L. Nichols for her service to the
membership of PERA during her time as a member of the Board of Trustees, and wish
her well as she leaves the PERA Board; and
Resolved, that a copy of this Resolution be placed in the official minutes of the
September 23, 2016, PERA Board of Trustees meeting.
Record of Proceedings
September 23, 2016, Board Meeting
Page 3 of 8
A motion was made by Marcus Pennell and seconded by Karl Fisch that, “the Board
approve the foregoing proclamation.” The motion was approved.
Proclamation—Richard Delk
Carolyn Jonas-Morrison, Vice Chair, Board of Trustees, read the following Proclamation
Concerning Richard Delk:
Whereas, Richard Delk served as a Trustee on the Board of the Public Employees’
Retirement Association of Colorado (PERA) from July 2008 through June 2016, and
represented the members of the State Division; and
Whereas, during his eight years on the Board, Rich served for seven years as the Chair
of the Compensation and Budget Committee, and also as a member of the Benefits,
Audit, Shareholder Responsibility, and Evaluation Committees; and
Whereas, Rich brought broad experience from the private and public sectors along with
his expertise as a C.P.A. and J.D. during his time on the Board; and
Whereas, Rich participated in all PERA meetings and will be remembered for his ability
to ask thoughtful questions as well as for his sense of humor thereby earning respect
from his colleagues; and
Whereas, Rich embodied the highest qualities of a Trustee and served as a role model
for others to emulate; and
Whereas, through his effective leadership, Rich earned the admiration and esteem of
the PERA Board members and staff; and
Whereas, Rich’s term on the Board of Trustees of PERA ended in June 2016, now
therefore, be it
Resolved, that with the highest level of appreciation and congratulations, the Board of
Trustees of PERA formally recognize and thank Richard Delk for his service to the
membership of PERA during his time as a member of the Board of Trustees, and wish
him well as he leaves the PERA Board; and
Resolved, that a copy of this Resolution be placed in the official minutes of the
September 23, 2016, PERA Board of Trustees meeting.
A motion was made by Karl Fisch and seconded by Marcus Pennell that, “the Board
approve the foregoing proclamation.” The motion was approved.
Record of Proceedings
September 23, 2016, Board Meeting
Page 4 of 8
Proclamation—Brian Campbell
Carolyn Jonas-Morrison, Vice Chair, Board of Trustees, read the following Proclamation
Honorable Brian Campbell:
Whereas, The Honorable Brian T. Campbell served as a Trustee on the Board of the
Public Employees’ Retirement Association of Colorado (PERA) from July 2015 through
June 2016, and represented the members of the Judicial Division; and
Whereas, during his time on the Board, Brian served as a member of the Benefits,
Compensation and Budget, and Stakeholder Relations Committees; and
Whereas, Brian participated in all PERA meetings and will be remembered for his focus
on member service issues ensuring that the rights of all members were protected; and
Whereas, Brian embodied the highest qualities of a Trustee and served as a role model
for others to emulate; and
Whereas, through his effective leadership, Brian earned the admiration and esteem of
the PERA Board members and staff; and
Whereas, Brian’s term on the Board of Trustees of PERA ended in June 2016, now
therefore, be it
Resolved, that with the highest level of appreciation and congratulations, the Board of
Trustees of PERA formally recognize and thank Brian T. Campbell for his service to the
membership of PERA during his time as a member of the Board of Trustees, and wish
him well as he leaves the PERA Board; and
Resolved, that a copy of this Resolution be placed in the official minutes of the
September 23, 2016, PERA Board of Trustees meeting.
A motion was made by Marcus Pennell and seconded by Karl Fisch that, “the Board
approved the foregoing proclamation.” The motion was approved.
Executive Committee Report
Carolyn Jonas-Morrison, Vice Chair, reported the Executive Committee met on July 8,
2016, and discussed the September Board Planning Session. In addition, the Executive
Committee met on September 20, 2016, and approved the Executive Director
Evaluation Timeline; the memorandum was transmitted as Tab I on September 7, 2016.
They also reviewed the July 8, 2016, Executive Committee minutes, the May 31, 2016,
June 30, 2016, and July 31, 2016, Unaudited Financial Statements, and the June 30,
2016, July 31, 2016, and August 31, 2016, Budget Reports. Lastly, they reviewed the
September 23, 2016, Board Meeting Agenda.
Record of Proceedings
September 23, 2016, Board Meeting
Page 5 of 8
Investment Committee Report
Susan Murphy, Committee Chair, provided information regarding the following motions.
Susan Murphy moved that the Investment Committee recommends that, “the Board of
Trustees approve that the benchmark for the Ares Indicus Credit Opportunity Fund
(ICOF) III investment, effective the first day of the calendar quarter following the first
capital call, be as follows:
50% Barclays ABS Index
50% Credit Suisse Leveraged Loan Index
Plus 250 basis points.”
The motion was approved.
Susan Murphy moved that the Investment Committee recommends that, “the Board of
Trustees approve that the benchmark for the TSSP Adjacent Opportunities Partners
(TAO) 3.0 investment, effective the first day of the calendar quarter following the first
capital call, be as follows:
1/3 PERA Private Equity Custom Benchmark
1/3 Barclays Corporate High Yield Index
1/3 Credit Suisse Leveraged Loan Index”.
The motion was approved.
Susan Murphy moved that the Investment Committee recommends that, “the Board of
Trustees approve that the benchmark for the Hayfin Special Opportunities Fund (SOF)
II investment, effective the first day of the calendar quarter following the first capital call,
be the Credit Suisse Western European Leveraged Loan Index (Hedged to USD) + 250
basis points.” The motion was approved.
Discussion ensued and John Kim, AON Hewitt, and Jennifer Paquette, PERA Chief
Investment Officer, responded to questions.
The following Investment Committee motion was tabled and will be considered during
the November Board meeting:
The Investment Committee recommends and I move that the Board of Trustees
approve staff discretion for Opportunity Fund investments that employ shorting. Staff will
explore periodic reporting methodologies for such activities to the Investment
Committee. All other staff discretion criteria shall remain in effect.
Economic Outlook
Tapan Datta, Partner, Partner, Aon Hewitt, provided his perspective of the market and
economic outlook. The presentation was transmitted to Trustees as Tab J on
September 7, 2016. Mr. Datta responded to questions.
Record of Proceedings
September 23, 2016, Board Meeting
Page 6 of 8
Rules Discussion
Kevin Gallaway, PERA Staff Attorney, reviewed proposed changes to the Rulesthat
were transmitted to Trustees as Tab K on September 7, 2016.
Lynn Turner left the meeting at 10:10 a.m. and did not return.
A motion was made by Timothy M. O’Brien and seconded by Karl Fisch that, “the Board
direct staff to proceed with the statutorily required rulemaking process regarding the
definition of salary relating to accrued leave payments as discussed today and attached
as Tab K in the meeting materials.”
The Board recessed at 10:25 a.m. and reconvened at 10:40 a.m.
2015 CEM Report
Karl Paulson, PERA Director of Planning, Policy, & Budget introduced Tom Scheibelhut,
Managing Principal, CEM Benchmarking. Mr. Scheibelhut reviewed the 2015 CEM
Report presentation and respond to questions. The presentation was transmitted to
Trustees as Tab L on September 7, 2016.
Executive Director Performance Report
The Executive Director Performance Report on Operations Management was
transmitted to Trustees as Tab M on September 7, 2016. Dr. Motza asked the Board to
review the materials that were transmitted and to provide any questions regarding the
report to the Executive Director during the November Board meeting.
Staff Reports
Executive Director Report
The Executive Director Report was transmitted to Trustees as Tab N on September 7,
2016. Dr. Motza asked the Board to review the materials that were transmitted and to
provide any questions regarding the report to the Executive Director during the
November Board meeting.
Market & Portfolio Update
Jennifer Paquette, PERA Chief Investment Officer, provided a market and portfolio
update presentation. The Investment Performance Report and presentation were
transmitted to Trustees, respectively, as Tab O2 on September 7, 2016, and Tab O2 on
September 19, 2016.
Actuarial Assumption Workshop Discussion
Maryann Motza, Board Chair, reminded the Board of the upcoming October 28, 2016,
Actuarial Assumption Workshop discussion.
Record of Proceedings
September 23, 2016, Board Meeting
Page 7 of 8
Staff Reports
General Counsel Update
Adam Franklin, PERA General Counsel, provided information regarding the General
Counsel report which was transmitted to Trustees as Tab P on September 15, 2016.
Mr. Franklin requested that the Board go into Closed Executive Session. The issues to
be discussed involved pending or imminent litigation and specific legal questions
addressed to the General Counsel regarding the following:
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Settlements
Colorado PERA and trust funds et al. v. BP, PLC et al.
Trustees of the Mineworkers’ Pension Scheme Limited, et al.
v. The Royal Bank of Scotland Group, PLC
Volkswagen Foreign Litigation
Petrobras Arbitration
Janet Walcott v. PERA, Gregory W. Smith, and Brian Pippin
Elham Salemi v. PERA, Tim Moore, and Angela Setter
McDivitt v. PERA et al.
Cornish v. PERA
Maryann Motza, Chair, Board of Trustees, polled the Trustees in attendance and
received consent to go into Closed Executive Session at 11:31 a.m. The issues to be
discussed involved pending or imminent litigation and specific legal questions
addressed to legal counsel. In addition to the Trustees, the General Counsel, the senior
staff attorney, all the present Chief Officers, the Public Information Officer, the Director
of Planning, Policy, and Budget, and the Manager of the Executive Director’s Office,
participated in the Closed Executive Session. The Closed Executive Session concluded
at 11:42 a.m.
By my signature below, I certify that the only issues discussed by the members of the
Board during the Closed Executive Session were regarding pending and imminent
litigation and legal advice related to specific questions involving PERA constituting
attorney client communication.
_________________________________
Maryann Motza, Chair, Board of Trustees
Record of Proceedings
September 23, 2016, Board Meeting
Page 8 of 8
Other Business
With no further business to discuss, Maryann Motza, Chair, Board of Trustees,
adjourned the meeting at 11:45 a.m.
Board Meeting Dates
– October 28, 2016, Actuarial Assumptions Workshop
– November (17) 18, 2016
Respectfully submitted by
Brenda E. Meidl
Manager of the Executive Director’s Office
________________________________
Maryann Motza, Chair, Board of Trustees
________________________________
Gregory W. Smith, Executive Director
Approval Date: November 18, 2016