As your newly-elected President of the LACERS Board of Administration, I would like to share with you some of our goals and thoughts for 2010 and welcome our newest members to the Board. They are: Jerry Bardwell (Appointed); Elizabeth Greenwood (Active-Elected); and Jeffrey Penichet (Appointed). Rick Rogers, Vice-President (Active- Elected); Ken Spiker (Retired-Elected); and Steven Uranga (Retired-Appointed) complete our Board of Administration. See Board Update on page 2 of this newsletter to learn more about us.

These are challenging times for public pension boards. Recently, there have been pay-to-play scandals, breaches of ethics, and general mistrust of boards. Rest assured that your Board has already instituted safeguards to prevent similar situations at LACERS. We want you to feel confident that we are upholding our fiduciary duties and doing right by you and all of our Members. Along with staff, the LACERS Board of Administration and General Manager Sally Choi have implemented best practices in transparency, ethics training, and third party placement agents.

In 2010, Board Governance will continue to be a top priority for us. We have already started with a comprehensive review and revision of the Board Governance Policies, including education and travel policies and conflicts of interest policies. These policies have the greatest impact on ensuring the accountability and transparency of our system and we will continue to strengthen these areas.

We also have reinforced our commitment to ethics training for Board members. While the City Ethics Ordinance requires City Officials to undergo ethics training once every two years, LACERS Trustees participate in the training as soon as they are appointed to the Board. As part of LACERS ongoing Education Policy, ethics education has always been a requirement of the trustee orientation program.

Equally important is the work that we have done regarding third party placement agents. Third party placement agents are defined as any person or company hired, engaged or retained by, or acting on behalf of, an external investment manager, or on behalf of another placement agent, as a finder, solicitor, marketer, consultant, broker, or other intermediary to raise money or to gain an investment from a public retirement system. Placement agents receive compensation from the investment manager if a contract is secured with the pension fund. LACERS was at the forefront of adopting a policy regulating the use of third party placement agents for investments that come before the Board. In April 2009, the Board adopted the Third Party Marketing and Referrals Disclosure Policy, requiring firms submitting investment proposals for consideration by LACERS to disclose the identity of all third-party marketers and/or individuals by whom the firm has been referred to LACERS, and further indicate those so identified that stand to receive fees or other considerations in the event that a contract between the firm and LACERS is secured. Several months later, the State of California enacted Assembly Bill 1584 requiring that public pension boards implement a policy regarding third party placement agents. This legislation further imposes penalties and other limitations for appointed officials on pension boards.

In 2010, we will build on these policies to enhance our standards and best practices. As your president, I intend to serve you well. Please attend one of our Board meetings this year. We meet at 10 a.m. every 2nd and 4th Tuesday at LACERS Headquarters.

Sincerely,
Roberta Conroy, President
LACERS Board of Administration