Chair Martushev asked for any changes to the minutes from the November 13, 2003, meeting as presented. Byeman moved to approve the minutes; Kammer seconded the motion; Chair Martushev moved to adopt the minutes as presented. Motion carried by unanimous voice vote.

1. Investment Report: Jon Springer provided the investment report, noting the fees on the Short-Term Fixed Option have been reduced from twenty-one to ten basis points. Springer then presented the INVESO report highlighting current changes. The T. Rowe Price pooled fund has been liquidated. Springer suggested we invite Kim McCarrel to our next Advisory Committee meeting to provide additional detail.
   
   
2. Service Contract Renewal: Marsha Bacon stated that we will renew for three years our OSGP contract for record keeping services with Citistreet. We are in the process of finalizing contract language for the existing statement of work and have extended the current contract through March. The additional time is needed due to the combination of the PERS and OSGP RFP processes.
   
   
3. Staffing Update: Bacon announced the new manager for OSGP is Gay Lynn Bath. She was the state of Idaho defined contribution plan manager. Bath will be arriving on March 1. Bacon noted it was a difficult decision as we had some very qualified candidates who interviewed for the position. Springer will work with Bath for a couple weeks to facilitate a smooth transition.
   
   
4. Program Goals: Springer highlighted 2003 accomplishments. Byeman asked staff to review the mission statement. Bacon responded that staff will present clarifying language to the Advisory Committee at the next quarterly meeting. Kathleen Beaufait suggested we replace the word “will” in the goals statement. Springer stated staff will report the status of these goals to the Advisory Committee at each meeting. Bacon explained options for rollovers with the new Individual Account Program (IAP), noting the importance of education in the member decision-making process. Bacon offered staff to provide a brief educational session for the Individual Account Program (IAP) and Oregon Public Service Retirement Plan (OPSRP) for the Advisory Committee at the next meeting.
   
   
5. Impact of Market Timing on the Plan: Bacon addressed the current excessive traders affecting OSGP, particularly in the International Option. Bacon explained to the Committee that staff monitors transactions in all options to assure compliance with the plan’s trading policies. Staff must insure that the plan also adheres to the trading policies of the managers of all underlying funds. Staff is reviewing industry issues, trends, and solutions while working with the Oregon Investment Council (OIC) as we review our current trading policy. Donohue stated that typically the industry looks to the Securities Education Commission (SEC) for guidance. Donohue also stated it would be up to the deferred compensation administration in Oregon to identify and deal with excessive traders even though their number may be small.

1. Performance Results: Springer shared the most recent results.
   
   
2. Asset Report: Springer addressed the highlights of the asset report noting that we have approximately 100 more participants and 135 million dollars more than last year. The OIC added the 91-day T-bill as the benchmark for the Stable Value Option. Robertson shared that he had members asking if there would ever be more choices or flexibility in the plan. Bacon said that staff can provide background information about this issue, and that it may be useful to invite investment officer Nordhill to an Advisory Committee meeting to provide information from the perspective of Treasury who helps set investment policy.
   
   
3. Service Review: Jon Springer introduced Greg Forte and Bob Donohue from CitiStreet who provided the quarterly Service Review. The rate of participation for eligible employees on the state payroll system is about 36 percent and slowly rising. Forte noted the overall average dollar amount deferred by OSGP participants is higher than what they generally see as an average 401(k) deferral. Martushev asked that we add a bullet in the service review that compares our contributions to other public sector plans. Forte shared that Citistreet keeps records for 10 public plans whose numbers can be provided. Springer addressed the MaxPlus and 50-Plus Catch-Ups, noting that an additional 91 people participated in these programs, helping boost our average contribution rate. Forte addressed call center performance.
   
   
4. Local Government Report: Jon Pippert shared the highlights of the local government report. In 2003 two hundred local government participants enrolled; Pippert noted this is lower than the predicted amount, but enrollments are currently on the rise. January 2004 set a record of 46 local government enrollments. Following the adoption of our plan by the city of Springfield, Pippert presented ten Wealth Builder presentations. Additionally, Metro has adopted OSGP and added nearly 30 participants in a six-week period. Overall in the fourth quarter there were six new employer adoptions. Pippert attended multiple conferences as a vendor in 2003 and gave a number of workshops to support employer and employee service needs. Pippert announced he would be leaving the OSGP in the next month. The board congratulated and thanked Pippert for his efforts and success with the program.
   
   
5. Newsletter: Springer shared the most recent quarterly newsletter asking the board for suggestions for future editions. Byeman suggested we show compounding graphs illustrating what a deferral increase of $100 monthly can mean in increased savings at retirement.
   
   
6. Review of 2003 Presentations: Jack Schafroth gave an overview of 2003 presentations. There were two hundred workshops completed last year with over 2,000 people attending, most of which are state employees. Schafroth invited the Advisory Committee members to inform people at their place of employment that he could come and present at their agency.

1. PERS Administrative Fee Review: Springer explained as a result of the semiannual administrative fee review that the current fees have been reduced by 11% to eight basis points. This fee was set at seventeen basis points beginning November 1996 and has been reduced twice before. The recent reduction was effective February 1.
   
   
2. OSGP TPA Services/Pricing/Fees: Bacon presented three options for pricing and services provided by CitiStreet. Two additional new services are available with no increase in TPA administrative fee, one additional service will be available with a fee reduction, and the current service level can be provided with additional fee reduction. Springer shared a short presentation on the new advice service that can be provided by CitiStreet, and Springer and Bacon clarified how a one-on-one counselor provided by CitiStreet could be used to benefit plan participants. Goulard made a motion to recommend selection by the PERS Board of option one, which would provide both additional new services with all existing services at the current fee level. Kammer seconded the motion. The motion was carried by unanimous voice vote.
   
   The board thanked Springer and Pippert for their excellent service to the OSGP and thanked Forte and Donohue for their participation in today’s meeting.

• Next meeting: Wednesday May 12, 2004, in Tigard
• OPSRP/IAP training-explanation
• Individual Account Program (IAP) information

There being no further business Chair Martushev adjourned the meeting.