STATE EMPLOYEES RETIREMENT COMMISSION
INVESTMENT SUBCOMMITTEE MEETING MINUTES

Date: September 18, 2009 Time: 10:30 a.m.

X Regularly Scheduled Special

Attendees: Was a quorum present? Yes
Kathleen Carey-Reid (ING)
Anthony Camp (ING)
Lisa Gilarde (ING)
Bud Hancock (ING)(by telephone)
Commission
Peter Blum
Charlie Casella
Steven Greatorex
Robert Baas (by telephone)

Comptroller's Office
Thomas Woodruff, Division Director
Healthcare Policy & Benefit Services

Mark Ojakian, Retirement Division Director
Deputy Comptroller

Margaret Haering, Assistant Director
Healthcare Policy & Benefit Services

Araceli Alvarez, Supervisor
Healthcare Policy & Benefit Services

Matters Discussed:

Lisa Gilarde reviewed with the Committee ING's methodology for evaluating the performance of the variable investment options in the ARP's investment line-up. ING's scoring methodology did not indicate a need to replace any of the funds in the line-up.
She then reviewed the style grid and commented on the fact that while the line-up did have exposure to large-cap international equities we may want to consider addition of small-cap international or emerging market equities at some point in the future. Lisa also commented on the performance of selected mutual funds. There had been questions about the Hartford Capital Appreciation fund's performance earlier in the year; however, the fund's recent performance had been exceptional. Lisa believes that the fund manager made some early bets on stocks that are now being realized.

The plans' share class in Growth Fund of America and the Euro Pacific Fund have switched from R-5 to R-6, which results in lower fees.

Tony Camp reviewed the performance of the Stable Value Fund and the rate calculation for the 4th quarter of 2009. The crediting rate will remain at 3.52%. The fund's overall market to book ratio is now over 98 percent and there is an expectation that the improvement in market to book should continue.

Bud Hancock spoke about the portions of the portfolio that had contributed to the overall returns. The portfolio has been overweight corporates and MBS and those investments have fared well during the past six months. The Core Plus strategy has yielded 6.34% YTD; the Intermediate Agg. Portfolio has returned 1.43% since inception (July 2009).

Kay Carey-Reid reviewed ING's most recent financial strength ratings. Members asked about the Dutch government's infusion of capital into ING's corporate parent. Kay responded that Dutch government's investments was prompted by an increase in capital requirements with respect to ING's banking business. One committee member asked about whether ING had laid off any employees in CT. Kay responded that ING continues to employ roughly 1900 people in Windsor and that there had been no layoffs here.

Charles Casella questioned how the discontinued TIAA-CREF annuity funds had performed in recent months. Peter Blum suggested that plan participants be made aware of comparative performance and expenses between the TIAA-CREF variable annuities and investments in the plan's current investment options.

Materials Reviewed:
Stable Value Portfolio Review
ING Performance Summary
Stable Value Rate Calculation
Stable Value Performance Review
Investment Expense Matrix
ING Scoring Metrics
ING Financial Ratings Review

Decisions voted upon: None

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