UNAPPROVED BY BOARD
TOWN OF EAST HARTFORD
PENSION AND RETIREE BENEFIT BOARD
MINUTES
REGULAR MEETING
WEDNESDAY, JANUARY 21, 2009
The meeting was called to order by Joseph Carlson, Chairman at 5:50 P.M. in the Town Council Majority Room, East Hartford Town Hall. In addition to Mr. Carlson there were
PRESENT: Barbara-Ann Rossi, Member
Kurt Christensen, Member
Frank Vignati, Member
Rick Morrison, Member
ABSENT: None
ALSO PRESENT: Michael Walsh, Finance Director
Wayne Connors, 3D Asset Management
John O’Connor, 3D Asset Management
Christopher Kachmar, Fiduciary Investment Advisors, LLC
Thomas Dawidowicz, The Segal Company
Robert Miller, Retiree
PUBLIC PARTICIPATION: None
ACCEPTANCE OF MINUTES
a. Acceptance of Minutes of Regular Meeting of December 17, 2008:
Motion by Mr. Vignati, seconded by Ms. Rossi to approve as presented the Minutes of the Regular Meeting of December 17, 2008.
The Motion was voted; Motion was approved, with Mr. Morrison abstaining.
COMMUNICATIONS:
a. Budget Deficit/Projection Information sheet dated 1/13/09
Mr. Walsh distributed the 2008/09 Budget Deficit Snapshot projection sheet that was released to Town Council on January 20, 2008, with the 2009/2010 Budget Projections. Brief discussion followed on the Mayor’s announcement on January 20, 2008 to eliminate 19 positions from the budget, including the jobs of eight employees who face immediate layoffs. This is a result of the emerging revenue deficit and the need to take immediate action to try to balance the budget. A brief discussion followed.
4. REPORTS:
a. Summary of Portfolio Asset – December, 2008
b. Summary of Expenses – December, 2008
This was accepted as information for the Board members.
c. Fiduciary Investment Advisors, LLC – Fixed Income “Flash” Report Fourth Quarter 2008.
Mr. Kachmar reviewed the Fixed Income reallocation that took place on December 19, 2008. He advised the Board that the fund gained $250,000 since reallocation. The Fixed Income is $41,000,000 as of January 20, 2008. A brief discussion followed.
d. 3 D Asset Management – Town of East Hartford Employee Retirement Plan Monthly Review December 2008.
Mr. O’Connor distributed the Equity Component Monthly Review December 2008. The Portfolio Performance 12/01/2008 – 12/31/2008 funds were reviewed and discussion on the current market. The starting balance was $79,595,010.14 and after transfer of Fixed Income Allocation, Capital Appreciation, Income of $4,534,785.84 the ending balance was $84,129,795.84. The Period Return was 5.70% and the Total Account Value of $85,509,057.06 after benefit payments to retirees of $1,379,261.08.
Mr. Connors advised the Board that they were recommending diversification across asset classes. Mr. Connors reviewed the Asset Classes and discussed their recommendation. They recommend acting on this at the February meeting.
5. OLD BUSINESS: _
a.. Other Post-Employment Benefits (OPEB)
1. Ordinance Change
2. Trust
3. Valuation (under separate cover)
4. GASB 45 information packet
Mr. Walsh discussed the Governmental Accounting Standards Board (GASB) 45 as medical, dental, vision, hearing and life insurance for the retirees. OPEB benefits are considered to be part of the compensation for services rendered and the need to set up a separate trust to fund this benefit. This will separate the liability for retirees and active employees. Due to the present economic conditions this will not be funded as yet. This discussion is to clarify for the Board the Ordinance change, setting up a trust and the GASB 45 issue.
b. Segal Company July 1, 2008 Valuation Report Draft & Segal Company 12/5/08 letter.
Discussion was held on the December 5, 2008 letter from Mr. Dawidowicz regarding the current 8.5% annual interest rate for the Actuarial Valuation. Mr. Walsh is recommending, due to the severe economic downturn, to freeze the discount rate at 8.5% for the 2008 valuation and move to 8.25% for 2009 valuation and 8% for 2010 valuation. Discussion was held and the following motion was made:
Motion by Mr. Vignati, seconded by Mr. Christensen to keep the 8.5% interest rate for the July 1, 2008 Actuarial Valuation and will consider future discount rate changes next year .
Motion was voted; Motion was unanimously approved.
Mr. Dawidowicz distributed the July 1, 2008 Actuarial Valuation Report for the Board to review and this will be on the February agenda. He also discussed the upcoming Budget session in February and distributed what he would be advising the Town Council.
6. NEW BUSINESS:
a. Retirements and Final Calculations:
1. Ida Jean Royer, BOE, Normal Retirement eff. 12/23/08
b. Withdrawal of Contributions:
1. Aubrie Amelang, BOE Para., resigned 7/29/08
2. Robert Ricks, BOE Para, eff. 5/1/08
Motion by Mr. Morrison, seconded by Mr. Christensen to approve as presented the retirement and final calculations for Ida Jean Royer and the Withdrawal of Contributions with interest for Aubrie Amelang and Robert Ricks.
A brief discussion was held on the Paraprofessional’s vesting requirements and Mr. Walsh informed them that vesting at 65 years of age with 5 years of service applies to Paraprofessionals.
Motion was voted; Motion was unanimously approved.
c. Fiduciary Role of Board Members
Mr. Walsh advised the Board of their fiduciary responsibility and getting the education from FIA and 3 D Asset Management to help in their decision making. This will be addressed in upcoming meetings.
Motion by Mr. Christensen, seconded by Mr. Morrison to Add item #7c. The Segal Company Inv. #106632 $7,675.00 to the agenda.
Motion was voted; Motion was unanimously approved.
7. APPROVAL OF DISBURSEMENTS:
a. Clerk for Pension & Ret. Benefit Board/January 21, 2009 meeting $ 100.00
b. Fiduciary Investment Advisors Inv.#3520804 (11/1 -12/31/08) 5,833.00
c. The Segal Company, Inv. #106632 7,675.00
Motion by Mr. Vignati, seconded by Mr. Christensen to approve as presented for payment items
# 7a., b. & c.
The motion was voted; Motion was unanimously approved.
8. ADJOURNMENT:
There being no further business,
Motion by Mr. Vignati, seconded by Mr. Morrison to adjourn the special meeting at 7:17 P.M.
The motion was voted; Motion was unanimously approved.
Respectfully submitted,
Janet Penney, Clerk
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