Transcript

AGENDA

MEETING OF THE
STATE BOARD OF ADMINISTRATION
(Contact Person: Dorothy Westwood - (850) 488-4406)
212 KNOTT BUILDING
October 16, 2001

1. APPROVAL OF MINUTES OF MEETING HELD SEPTEMBER 11, 2001. (Att. #1)

2. APPROVAL OF FISCAL DETERMINATION OF AMOUNTS NOT EXCEEDING $12,780,000 TAX EXEMPT AND $2,667,238 TAXABLE FLORIDA HOUSING FINANCE CORPORATION HOUSING REVENUE BONDS, 2001 SERIES (SERIES TO BE DESIGNATED) (WESTMINSTER APARTMENTS):

The Florida Housing Finance Corporation has submitted for approval as to fiscal determination a proposal to issue amounts Not Exceeding $12,780,000 Tax Exempt and $2,667,238 Taxable Florida Housing Finance Corporation Housing Revenue Bonds, 2001 Series (series to be designated) (the Bonds) for the purpose of financing the construction and equipping of a multifamily residential rental development located in Pinellas County, Florida (Westminster Apartments).

The Bonds shall not constitute an obligation, either general or special, of the State or of any local government thereof; neither the State nor any local government thereof shall be liable thereon. Neither the full faith, revenue, credit nor taxing power of the State of Florida, or any local governments thereof shall be pledged to the payment of the principal of, premium (if any), or interest on the Bonds. The Bonds shall be payable as to principal, premium (if any), and interest solely out of revenues and other amounts pledged therefor.

RECOMMENDATION: A study of this proposal and of estimates of revenue and other available moneys expected to accrue indicate that the issue meets the requirements for the fiscal determination required by Section 420.509, Florida Statutes, as stated in Article VII, Subsection 16(c) of the revised Constitution of 1968, and the Executive Director recommends that the State Board of Administration of Florida (the Board) approve the fiscal determination thereof. It is further recommended that, pursuant to the fiscal determination requirements of Subsection 16(c) of Article VII of the revised Constitution of 1968, the Board find and determine that in no State fiscal year will the debt service requirements of the Bonds proposed to be issued and all other bonds secured by the same pledged revenues exceed the pledged revenues available for

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AGENDA
October 16, 2001
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payment of such debt service requirements. The Board has relied upon information from others but has not independently verified the accuracy or completeness of such information. The Board does not assume any responsibility for, and makes no warranty (express or implied) with respect to any other aspect of this bond issue except for fiscal determination. (Att. #2)

3. APPROVAL OF FISCAL DETERMINATION OF AMOUNTS NOT EXCEEDING $15,524,098 TAX EXEMPT AND $3,179,902 TAXABLE FLORIDA HOUSING FINANCE CORPORATION HOUSING REVENUE BONDS, 2001 SERIES (SERIES TO BE DESIGNATED) (WALDEN PARK APARTMENTS):

The Florida Housing Finance Corporation has submitted for approval as to fiscal determination a proposal to issue amounts Not Exceeding $15,524,098 Tax Exempt and $3,179,902 Taxable Florida Housing Finance Corporation Housing Revenue Bonds, 2001 Series (series to be designated) (the Bonds) for the purpose of financing the construction and equipping of a multifamily residential rental development located in Osceola County, Florida (Walden Park Apartments).

The Bonds shall not constitute an obligation, either general or special, of the State or of any local government thereof; neither the State nor any local government thereof shall be liable thereon. Neither the full faith, revenue, credit nor taxing power of the State of Florida, or any local governments thereof shall be pledged to the payment of the principal of, premium (if any), or interest on the Bonds. The Bonds shall be payable as to principal, premium (if any), and interest solely out of revenues and other amounts pledged therefor.

RECOMMENDATION: A study of this proposal and of estimates of revenue and other available moneys expected to accrue indicate that the issue meets the requirements for the fiscal determination required by Section 420.509, Florida Statutes, as stated in Article VII, Subsection 16(c) of the revised Constitution of 1968, and the Executive Director recommends that the State Board of Administration of Florida (the Board) approve the fiscal determination thereof. It is further recommended that, pursuant to the fiscal determination requirements of Subsection 16(c) of Article VII of the revised Constitution of 1968, the Board find and determine that in no State fiscal year will the debt service requirements of the Bonds proposed to be issued and all other bonds secured by the same pledged revenues exceed the pledged revenues available for payment of such debt service requirements. The Board has relied upon information from others but has not independently verified the accuracy or completeness of such information. The Board does not assume any responsibility for, and makes no warranty (express or

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implied) with respect to any other aspect of this bond issue except for fiscal determination. (Att. #3)

4. APPROVAL OF FISCAL DETERMINATION OF AMOUNTS NOT EXCEEDING $10,370,000 TAX EXEMPT AND $6,583,400 TAXABLE FLORIDA HOUSING FINANCE CORPORATION HOUSING REVENUE BONDS, 2001 SERIES (SERIES TO BE DESIGNATED) (NOAH'S LANDING APARTMENTS):

The Florida Housing Finance Corporation has submitted for approval as to fiscal determination a proposal to issue amounts Not Exceeding $10,370,000 Tax Exempt and $6,583,400 Taxable Florida Housing Finance Corporation Housing Revenue Bonds, 2001 Series (series to be designated) (the Bonds) for the purpose of financing the construction and equipping of a multifamily residential rental development located in Collier County, Florida (Noah's Landing Apartments).

The Bonds shall not constitute an obligation, either general or special, of the State or of any local government thereof; neither the State nor any local government thereof shall be liable thereon. Neither the full faith, revenue, credit nor taxing power of the State of Florida, or any local governments thereof shall be pledged to the payment of the principal of, premium (if any), or interest on the Bonds. The Bonds shall be payable as to principal, premium (if any), and interest solely out of revenues and other amounts pledged therefor.

RECOMMENDATION: A study of this proposal and of estimates of revenue and other available moneys expected to accrue indicate that the issue meets the requirements for the fiscal determination required by Section 420.509, Florida Statutes, as stated in Article VII, Subsection 16(c) of the revised Constitution of 1968, and the Executive Director recommends that the State Board of Administration of Florida (the Board) approve the fiscal determination thereof. It is further recommended that, pursuant to the fiscal determination requirements of Subsection 16(c) of Article VII of the revised Constitution of 1968, the Board find and determine that in no State fiscal year will the debt service requirements of the Bonds proposed to be issued and all other bonds secured by the same pledged revenues exceed the pledged revenues available for payment of such debt service requirements. The Board has relied upon information from others but has not independently verified the accuracy or completeness of such information. The Board does not assume any responsibility for, and makes no warranty (express or implied) with respect to any other aspect of this bond issue except for fiscal determination. (Att. #4)

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5. REPORT ON THE NEGOTIATION PHASE OF THE BUNDLED PROVIDER SELECTION PROCESS:

At the August 14th meeting of the Trustees, staff was directed to solicit resubmissions by the Bundled Providers. These resubmissions were subject to the conditions outlined in Staff's August 22nd memo. William M. Mercer, Inc. has completed their analysis of the resubmissions and prepared the attached materials. This information was presented to the joint meeting of the IAC/PEORPAC on October 9th in an effort to solicit their recommendations on who should be on a short list of finalists.

Staff has reviewed the Mercer material and recommends that no more than the top three proposals in each service category be selected for further consideration. There are a number of policy issues that warrant discussion by the Advisory Councils, which could influence the staff recommendation. There may very well be a reduction in the number of firms recommended by staff based on the Council discussion, but that cannot be determined at the time of this writing. This recommendation was transmitted to the Advisory Councils, and in order to expedite the calendar, staff has begun the necessary site visits.

The Advisory Councils met and, after full and careful deliberation, forwarded the following recommendations. (The recommendations will be provided following the meeting).

6. REPORT ON THE SELECTION OF TIER V ANNUITY PRODUCTS:

Pursuant to the Investment Policy Statement and the Work Plan adopted for the PEORP, staff has been working diligently through the process of selecting vendor(s) for possible Tier V annuity products. These products will be made available to the PEORP members upon retirement and could be used to annuitize all or a portion of their Defined Contribution assets.

The Retiree Annuity/Payout Implementation Group (RAPIG) has met several times, and through the RFI solicitation process, concluded that both a fixed and a fluctuating annuity product should be offered. The working group also recommends that Hartford Life be selected as the sole provider for these products. The RAPIG group also recommends that no participating annuity product be selected at this time.

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If the Trustees were to approve these selections, then final contract negotiations would be undertaken.

The IAC/PEORPAC members reviewed these recommendations at their October 9, 2001 meeting. (The recommendations will be provided following the IAC/PEORPAC meeting).

7. THE STATE BOARD OF ADMINISTRATION REQUESTS THE APPROVAL OF THE FOLLOWING RULES:

The staff of the State Board of Administration requests that the Trustees approve filing Rules 19-12.001 through 19-12.006 for adoption. These rules implement requirements of the federal Internal Revenue Service regarding implementation of the Public Employee Optional Retirement Program. Rule 19-12.001 provides definitions. Rule 19-12.002 briefly describes the purpose of the rules. Rule 19-12.003 provides IRS requirements regarding limitations on contributions. Rule 19-12.004 provides IRS requirements regarding any annual additions in excess of federal limitations. Rule 19-12.005 sets out the exclusive benefit rule within the Internal Revenue Code and provides requirements for forfeitures. Rule 19-12.006 provides requirements regarding distributions of benefits. A rule development workshop was scheduled for August 20, 2001, but was not held because it was not requested. The Trustees gave permission to file for notice at their meeting on August 28, 2001. The rule hearing was scheduled for October 1, 2001, but was not held because it was not requested. The Joint Administrative Procedures Committee had no comments or suggestions. If permission to file for adoption is granted, the rules will be adopted on October 30, 2001. (Att. #7)

8. 2002 LEGISLATIVE PROPOSALS AS A DISCUSSION ITEM:

As we mentioned at the September 11th Trustees' meeting, there are several Legislative proposals relating to PEORP under consideration. Many of these were highlighted at the last meeting; however, there are two additional issues we wish to call to your attention. They are:

• Asset transfer procedures to accommodate unforeseen financial market disruptions; and
• Employer penalty for untimely contributions to the Third Party Administrator (TPA).

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Additionally, we are speaking with the Division of Retirement regarding their proposed PEORP Clearing Trust Fund legislation. As the PEORP administrator, we will work with the Division on clarification language to differentiate between the role of the Division and the TPA, pursuant to our interagency agreement with the Division regarding their scope of services for employer payroll. Also, State Community College System Optional Retirement Program (SCCSORP) and State University System Optional Retirement Program (SUSORP) representatives have indicated their preference to be included in PEORP. They will communicate their position in writing to the Trustees.

Staff recommends that the Trustees endorse these items in addition to those from the September 11th meeting. (Att. #8)

9. DC IMPLEMENTATION STATUS REPORT #12: (Att. #9)

10. REPORT BY THE EXECUTIVE DIRECTOR:

Submitted for information and review is the fund activity analysis for the month of July 2001. (Att. #10)