January 2013 Monthly Board Report

OP&F AGAIN RECEIVES AWARD FOR COMPREHENSIVE FINANCIAL REPORTING
The Government Finance Officers Association has informed OP&F that the 2011 edition of its Comprehensive Annual Financial Report (CAFR) has again been awarded the Certificate of Achievement for Excellence in Financial Reporting. OP&F has received the recognition in 22 of the past 23 years. The CAFR is a detailed report and review of OP&F's financial statements and investments for each fiscal year. The 2012 CAFR will be published in June.

ACTUARIES REVIEW DROP, PROGRAM FOUND TO BE "COST NEUTRAL"
Buck Consultants, OP&F's independent actuary, has reviewed the Deferred Retirement Option Plan (DROP) and found it to be cost neutral. The Ohio Revised Code requires OP&F to conduct an actuarial review of DROP to find if the program is operating as intended and is cost neutral. Cost neutral means that offering DROP to eligible OP&F members will not be an additional cost to the retirement system and not have an adverse impact on OP&F's ability to pay pension benefits. Past DROP reviews in 2008 and prior to the implementation of the program also found it to be cost neutral. DROP was implemented in 2003 and is designed to allow members who are eligible for a normal service retirement to continue working and serving their communities while accruing a lump-sum of money for retirement.

PORTFOLIO UPDATE
OP&F's investment portfolio value:

Board of Trustees Committee Notes
(Motions approved by the Board are listed separately)

• DISABILITY: The Committee/Board reviewed disability cases in addition to the regularly scheduled hearings and appeals. The Committee/Board reviewed the 4th Quarter 2012 Disability Experience Report and the Annual Mandatory Disability Experience Report by Employer. The Committee/Board also requested data on off-duty disability benefit recipients that can be reviewed during the February meetings.

• BENEFITS: The Committee reviewed and discussed the Deferred Retirement Option Plan (DROP) Quarterly Update presented by staff, along with additional DROP statistics that were provided.

• ADMINISTRATION/AUDIT:  The Committee listened to the Information Services Update and also received an update on current Internal Audit projects. The Committee also discussed the Annual Compensation and Paid Leave Buyback program.

• HEALTH CARE: The Committee/Board discussed fees associated with the Federal Affordable Care Act for which OP&F will be responsible.

• INVESTMENT: In addition to the monthly portfolio update, the Committee/Board heard a presentation on the 3rd Quarter Real Estate Performance Review and the Private Markets Review.

• Approved the manager ratings for EARNEST Partners, MacKay Shields, Mellon Capital and FX Concepts as presented by staff. Motion passed by unanimous vote (Investment Committee).
• Approved the 2013 Private Markets Investment Plan, which calls for committing $330 million to the private markets asset class for the period of Jan. 31, 2013 through Dec. 31, 2013, subject to market conditions. Motion passed by unanimous vote (Investment Committee).
• Approved the Committee recommendations for the initial determination of disability for the 28 members as identified in the initial determination hearings list presented to the Board on Jan. 30, 2013. Motion passed by unanimous vote, except for four "no" votes for the member identified as #12 and one "no" vote for the member identified as #10. (Disability Committee).
• Approved the determination for reconsiderations for the members identified. Motion passed by unanimous vote (Disability Committee).
• Approved the recommendations for the appeal hearings for six of the seven members identified in the appeals list presented to the Board on Jan. 30, 2013. Motion passed by unanimous vote for five members and by a 5-3 vote for the member identified as #4. The appeal for member #3 was not approved by a vote of 4-4 (Disability Committee).
• Approved the recommendations for Death Fund benefits for the members identified. 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 Jan. 30, 2013. Motion passed by unanimous vote (Disability Committee).
• Approved the 2012 Employer Disability Experience Report, in the form presented to the Board on Jan. 29, 2013, and authorizes staff to forward the report to the appropriate public officials, in accordance with Section 742.381 of the Ohio Revised Code. Motion passed by unanimous vote (Disability Committee).
• Rescinded the Administrative Rule as outlined in staff's memorandum dated Jan. 29, 2013, and authorizes the required filing with the proper agencies. Motion passed by unanimous vote (Benefits Committee)..
• Approved the Administration/Audit Committee's travel recommendation as amended and discussed on January 29, 2013. Motion passed by unanimous vote (Administration/Audit Committee).
  

Next Board of Trustees Meetings: February 25-27, 2013.