Columbus, Georgia

MINUTES

BOARD OF TRUSTEES

EMPLOYEES' PENSION PLAN

April 2, 2003





A meeting of the Board of Trustees for the Columbus Georgia Employees= Pension

Plan was held April 2, 2003 at 2:00 P.M. in the Mayor=s Conference Room.



PRESIDING: Mayor Robert S. Poydasheff, Chairman



PRESENT: Carmen Cavezza, Kay G. Love, Morton Harris, Jack Nowell, Mary

Strozier-Weaver, Alan Rothschild, Saundra Hunter, Michael Majure and Capt. John

Starkey



ABSENT: M. Daniel Gray



GUESTS: Henry Swift, Vice President (Salomon Smith Barney) and Denise Baxter,

Investment Officer (Revenue), Tom Barron, Director (Human Resources) and Angela

Cole, Assistant Finance Director



Mayor Robert S. Poydasheff, Chairman called the meeting to order. Julia Rasch,

Recording Secretary, gave the attendance.





MINUTES OF THE PREVIOUS MEETING:



The motion was made by Mr. Harris and seconded by Ms. Weaver that the minutes

from the February 5, 2003 meeting be accepted as submitted. The vote was

unanimous.





INVESTMENT UPDATE:



Mr. Swift reviewed our current asset reallocation and our program to bring our

allocation back in line with our Investment Policy Statement. He reminded the

Board that on their instructions we were proceeding, over a four month time

period, to get our equity percentage more toward the 55% range. This

rebalancing was being accompanied by the raising of $1,700,000 for benefit

payments by June 30, 2003.



Mr. Harris pointed out that we did a rebalancing in January, February and March

and will do one more in April if necessary.





Next he gave a brief synopsis of developments with the stock and bond markets

since our last meeting on February 4, 2003. Since that date the S&P 500 went

from 848.20 on 2/4/03 to 858.48 and the 30 year Treasury Bonds went from a

yield of 4.79% to a yield of 4.91%.





The valuation report presented the balances in the portfolio following the

asset reallocations for the months of February and March 2003.



A copy of the evaluation report and the other reports are maintained by the

Board Secretary in the Finance Director=s Office and is available for review

upon request.





PRESENTATION:



Mr. Stan Samples and Mr. Rick Ford from William M. Mercer presented the annual

actuarial report. This report is presented each year to summarize the actuarial

valuations for the pension fund.



& Employee Census Data



This gives the total number of participants in the pension fund; whether they

are active or inactive and in the General Government or Public Safety plans.

The projection indicates that the number of employees in the general government

and public safety funds will remain relatively the same over the next five

years.



The age/service distribution graph gives the average age and number of years of

service in both the General Government fund and the in Public Safety fund.



The active payroll chart shows the total payroll for the valuation and the

average pay for each of the groups and how it=s projected to grow. This takes

into account historically, both changes in pay rates and changes in population

prospectively.



The reconciliation graph breaks out the participant data for this year compared

to last year to ensure that no one was dropped, showing the active, and the

inactive status of all employees, both General Government and Public Safety.



& Pension Plan Provisions



This section is a summary of the plan provision. For both plans many of the

provisions are the same and where there are differences those are identified

separately. There were no changes to this section this year.



& Actuarial Assumptions



This is a summarization of the assumptions that are used to complete the

valuation of the pension plan. The assumptions are arrived at using

information from the census population, salary, asset information, and using

that as a base, the actuarial assumptions are applied to project when people

will retire, how much their benefit will be, how long they will live and how

much money the fund is going to earn. For example, it is assumed that the

plan, long term will earn 8% interest, that employees on average will have a

pay increase of 4.5% per year until they retire and that people will retire

with various percentages at the ages between 55 and 60 forward depending on

whether they are General Government or Public Safety employees.





Every year Mercer does a detailed analysis of investment classes, equities,

fixed income, mortgages, bonds, government bonds and tries to estimate or

project what is the real underlying rate of return for each asset class. This

formula is then applied to each of the client=s investment mix to make sure

that the interest rate can be supported. For several years the 8% has been

easily justified, but every year the investment expectation of all these

classes has been lowering slightly to the point that the 8% is still justified

but with much less margin and if this trend continues the interest rate

assumption should be seriously considered as to whether it could be supported.

It was recommended that a close evaluation be completed to decide whether to

lower the assumption rate to 7.5%.



& Benefits Payments



These two charts are designed to show the benefits payments for the current and

future retirees, both for general government and public safety using the

current assumption.



& Asset Growth



This graph indicates the growth of the pension plan starting in 1997 and coming

forward. The value of the pension plan at the close of the 2002 fiscal year

was $174 million and is projected to reach $231 million by the end of the

fiscal year for 2006 using an assumption rate of 7.5%.



& Benefit Security



The benefit security is measured by taking the ratio of what is called current

liability to the assets. The current liability is the measure of accrued

benefits in the plan to date compared with the market value of assets. The

fund?s assets have continued to drop over the past year continuing to tighten

the margin between the assets and accrued benefits.



& Funding Progress



This section shows the comparison of the assets to the present value of all

benefits including those which have not yet been earned for each person in the

plan, projecting them all the way out to retirement.







& Minimum Contribution



The minimum contribution for FY-04 for the General Government plan is

$3,845,028 and for the Public Safety plan it will be $6,023,826. For the

Disability plan, the contribution requirement will be $72,110 and the Death

benefit is $72,205. Putting the totals together, the total minimum requirement

for FY-03 will be $10,013,169 and next year it is projected to go to

$11,880,891, using an assumption rate of 7.5%.



This concluded the actuarial report and Mr. Samples and Mr. Ford were thanked

for a well presented report and were then dismissed.





OLD BUSINESS:



a. Policy sub-committee report and recommendations.



Mr. Swift presented a brief synopsis of the sub-committee?s meeting that was

held on March 5, 2003 with each of the following managers; Victory Capital

Management, Synovus Securities, and National Asset Management. A copy of this

report will be kept with the minutes in the Finance Department Office.





NEW BUSINESS:



a. None



With no further business for discussion, the meeting was adjourned. The next

meeting is scheduled for May 7, 2003 at 2:00 p.m. in the Mayor=s Conference

Room. The guest speaker will be from Lazard International.









_____________________________

Julia A. Rasch

Recording Secretary