INVESTMENT SUBCOMMITTEE MEETING MINUTES

Comptroller's Office
Thomas Woodruff, Division Director
Healthcare Policy & Benefit Services
Margaret Haering, Assistant Director
Healthcare Policy & Benefit Services
Mark Ojakian, Division Director
Deputy Comptroller

Matters Discussed:
Tom Woodruff explained ING's proposal for investment of the general account assets that will be deposited into the Stable Value Fund on 7/06/2009. The proposal would be to keep 25% of the total Stable Value Fund assets in a separate portfolio benchmarked to the Barclays Intermediate Aggregate Index. That portfolio would be used to fund all withdrawals and liquidations and would receive all new contributions. According to an administrative letter, portfolios would be monitored so as to maintain an allocation of 75% to the Core Plus Strategy and 25 % to the Intermediate Aggregate Strategy. If the assets in the Core Plus Strategy exceed 80% or dip below 70% of the total stable value fund, ING will execute a rebalancing trade to maintain the target allocation.

The purpose of adopting this supplemental investment strategy is to protect the integrity of the entire fund, manage cash flow in the anticipation of projected retirements, and to protect the assets in the Core Plus strategy from forced liquidations if the markets rebound and participants redirect large amounts of money from Stable Value into equities.

Peter Blum mentioned the need to extend the underlying third party administration contract with ING for a final year, in anticipation of issuance of an RFP for July 1, 2010 and suggested that the committee meet during the summer to start work on the RFP document.

Materials Reviewed:
Administrative Letter Agreement
Draft Separate Account Agreement

Decisions voted upon:

Sal Luciano (seconded by Charles Casella) moved to recommend that the Retirement Commission on behalf of the 401(a) Plan approve the implementation of a separate account, measured by the Barclay's Intermediate Aggregate Index within the Stable Value Fund to maintain a target allocation of up to 25% of the total fund assets. All parties voted in favor of the motion.

Charles Casella (seconded by Sal Luciano) moved to recommend that the Retirement Commission execute an agreement to extend ING's contract for third party administration services on behalf of the 401(a) plan until July 1, 2010. All parties voted in favor of the motion.

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