Vice Chair Kammer asked for any changes to the minutes from the May 12, 2004, meeting as presented. Kathleen Beaufait stated that the age based statistics she had requested were not on the agenda and asked that they be provided at the next meeting. Beaufait then moved to adopt the minutes as presented. Byeman seconded the motion, and it carried unanimously.
Vice Chair Kammer asked that we move the Lifecycle Fund presentation to the top of the agenda for the convenience of Barclays Global Investors.

Lifestyle Fund Presentation: Jim Keagy, Client Relationship Officer and Tim Kohn, Defined Contribution Specialist, from Barclays Global Investors gave a presentation on “The Role of Lifecycle Funds in DC Plans.” Some of the areas highlighted by Keagy included challenges facing DC plan investors, chasing performances, fees, proper diversification, behavioral financial obstacles, and basic understanding of Lifecycle funds.

Status of Policy Changes: Bath gave an update on policy changes in the plan. Administrative rules should be approved at the November PERS Board meeting, and become effective December 1, 2004. These policies include allowing participation in the 50-plus catch up program at any time during the year, and allowing participants to take distributions from the Stable Value Option rather than pro-rata across the fund.

1. Performance Results: Before Kevin Nordhill’s presentation, there was a discussion on the following topics:
   • Citistreet was asked to research any possible liability using lifecycle funds.
   • Oregon Investment Council’s interest in OSGP having prudent investments.
   • Vice chair Kammer asked Citistreet for a report showing how many participants have not reallocated their money in the plan. Greg Forte will provide that information. Beaufait suggested this information be included in the Plan Update. D
   • Donohue asked if we could get BGI to provide comparison used for Cingular Wireless research.
   • Goulard suggested that Jack and Justin continue to educate and communicate to our participants as part of plan’s fiduciary responsibility.
     
     
   Nordhill then gave the most recent performance results and explained there has been slow growth in the stock market since the elections but noted the international market has done reasonably well. Bacon asked what to expect for the coming year, and Nordhill stated he had not heard anyone forecasting any huge jumps.
   
   
2. Asset Report: Bath shared the asset report; in 2003, assets were at $606 million as of 9/30/03, as of 9/30/04 they had grown to $722 million. The amount of new Local Government (LG) participants has increased by 400, and state participants have increased by 800. The plan continues to grow.
   
   
3. Service Review: Bob Donohue and Greg Forte from Citistreet presented the quarterly service review. Forte and Donohue noted that Hawaii and Arkansas had recently added Lifecycle Funds, and offered to monitor and track how they are doing and then report back to the Committee. Donohue highlighted on marketing tactics for 2005. Forte reported the 48 percent of the participants have activated their account from the website. Donohue presented call center statistics. Donohue shared that Citistreet had recently completed the plan sponsor survey. They are currently tallying the responses, and he will bring the survey to the next meeting in February so the Committee for feedback, ideas or questions.
   
   
4. Local Government Report: Jack Schafroth summarized the LG report and noted there had been steady progress in the plan’s growth. Schafroth noted there are 400 new LG participants this year, and more than 30,000 who are eligible to join. One of Schafroth’s goals is to meet with all participating LG employers. He has visited with 16 employers so far this year, and attended two vendor fairs. The three new LG agencies for this quarter are the City of Madras, Deschutes Valley Water, and Talent Urban Renewal. These new employers bring the number of total LG participating to 123.
   
   
5. Plan Update: Bath explained next issue of the Plan Update would contain mostly informational articles about the plan. Future articles will highlight rollovers, the benefits of keeping your money in the plan, address/name change procedure, and trading restrictions. Bath stated we had an excellent response from participants when rollover-in forms were included with the Plan Update. Bath reminded the Committee that they could email her with any ideas for articles for the next Plan Update.
   
   

1. Lifecycle Fund Presentation. Discussed earlier in minutes.
   
   
2. Trading Restriction Recommendation: Kevin Nordhill explained that OSGP has taken steps to curb market timing in the plan. Treasury is recommending identifying the participants that are trading excessively, as well as continuing to monitor trading practices in the plan. Bath and Bacon explained these trading restrictions are going to be policy; there will be no administrative rule because the plan needs the flexibility to change the restrictions based on the trading activity of the members, requests from underlying fund managers, and any changes to SEC rules and regulations. Beaufait requested a copy of the DOJ opinion written for OSGP regarding implementation of trading restrictions. Donohue shared that other plans are putting redemption fees into place, indicating that OSGP is taking a proactive approach. Donohue then explained how redemption fees work. Bath shared that the monitoring of trading activity is a manual process at this time. The Committee wanted clarification of the current trading restrictions. It was discussed and determined that participants will be flagged if they make more than “an average” of two (2) trades per month in a three-month consecutive calendar period in the International Stock (IS) Option. Once flagged, they will be indefinitely restricted to only one redemption per month in the IS Option. Vice Chair Kammer proposed a motion to accept the changes that were recommended. Byeman moved to adopt the changes and Robertson seconded the motion; Vice Chair Kammer asked for a vote; it carried by unanimous vote of those who voted. Beaufait abstained from voting. Her abstention was based on the form in which investment limit is expressed -- rule or otherwise.
   
   
3. Introduce Educational Representative: Bath introduced the new Educational Representative, Justin Naegle. Naegle has a degree in finance, and has previously worked in sales, training and with 403(b) plans. Naegle stated that he is looking forward to taking part in helping communicate and empower participants to save for their retirement.
   
   

• Bob Donohue will get age-based statistics requested at the last meeting for Beaufait
• Citistreet will provide information on Lifecycle Funds based on the experience with Hawaii and Arkansas
• Citistreet will provide a report on participants who have not reallocated their funds in the last 2 years for Kammer.