SUBJECT TO APPROVAL AT THE NEXT BOARD MEETING
TOWN OF EAST HARTFORD
PENSION AND RETIREE BENEFITS BOARD
MINUTES
REGULAR MEETING
Wednesday, January 23, 2013
The meeting was called to order by Joseph Carlson, Chairman at 5:45 P.M. in the Second Floor Conference Room B, East Hartford Town Hall. ~In addition to Mr. Carlson there were:
PRESENT: Esther Clarke, Member
Scott Thompson, Member
Frank Vignati, Member
Eileen Powers, Member ~
ABSENT:~ None
ALSO PRESENT:~~~ Michael Walsh, Finance Director
~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~ John O’Connell, 3D Asset Management
Chris Kachmar, Fiduciary Investments Advisors
Thomas Dawidowicz, The Segal Company
Bill Connelly, The Segal Company
~~~~~~~~~~~~~~~~~~~~~~~~~~~
- PUBLIC PARTICIPATION: ~None
2. ACCEPTANCE OF MINUTES:
a. ~~Acceptance of Minutes of Regular Meeting of December 19, 2012
Motion by Mrs. Clarke, seconded by Ms. Powers to approve as amended (item #8 “motion made by Mrs. Clarke…….”) the minutes of the Regular Meeting of December 19, 2012.
Motion was voted; Motion was unanimously approved.
3. COMMUNICATIONS:
Mr. Walsh advised the Board members on the following:
- The recent CSEAU contract settlement includes important changes to how the town funds retiree medical care. The new contract requires employees who are not grandfathered to pay up to 50% of the cost of their retiree medical benefits moving forward. Also, supplemental insurance will no longer be provided at the town’s expense. Both changes will reduce the town’s unfunded OPEB liability as produced by Milliman.
- The Segal Company 1% cost of living (COLA) calculation for Town and Board of Education employees who retired in 1999 that was discussed and approved by the Board at the December 2011 meeting, but was not implemented by the Town Council, will once again go to the Town Council at their February meeting. This group of retirees is not at present part of any group to receive a COLA.
- Mr. Walsh advised the Board of the office visit to Fiduciary Investment Advisors which enabled the town to better understand how FIA monitors town investments.
- Mr. Walsh advised the Board members that Betty Turi has filed a grievance and a Municipal Prohibitive Practice (MPP) based on the Board’s denial of her pension request. The town will address the issue with the State Labor Department.
- Mr. Walsh advised the Board members that Mr. Thompson has received a schedule of payroll posting for the purpose of employees planning their retirement.
4. ~OLD BUSINESS:
a. Attorney Percy review of consistent policy for all Retirement Plans – No Action Taken
Mr. Walsh advised the Board members that Attorney Percy was not able to attend the meeting tonight, but would be at the February meeting to discuss the policy and if members had any questions to forward them to him and he would forward to Attorney Percy.
b. July 1, 2012 Actuarial Valuation – The Segal Company
Mr. Dawidowicz and Mr. Connelly, The Segal Company reviewed with the Board members the 12/18/12 letter regarding the July 1, 2012 Actuarial Valuation. An in-depth discussion followed on the recommendation to change the assumed discount rate from 8.25% to an 8% rate. The Annual Required Contribution (ARC) was discussed and Board members asked questions on Mortality Tables and its effect on the Pension Plan. Mr. Dawidowicz distributed copies of the presentation to the Town Council on the budget for 2013/14. Discussion was held on the current funded status of the Pension Plan. Mr. Walsh advised the members that their recommendation would be to the Mayor and the Mayor will decide on the recommendation to the Town Council.
After further discussion the following motion was made:
Motion by Mr. Vignati, seconded by Ms. Powers to recommend to the Mayor an 8% assumed discount rate for the July 1, 2013 -June 30, 2014 fiscal year based on the recommendation from The Segal Company.
Motion was voted; Motion was approved 3 – 1, with Mrs. Clarke abstaining.
c. Revised 2013 Meeting Calendar
The Board members were advised that there was a change in the December 18, 2013 from the 2nd floor Conference Room to the Town Council Majority Room.
Motion by Mr. Thompson, seconded by Mr. Vignati to approve as presented the Revised 2013 Calendar.
Motion was voted; Motion was unanimously approved.
5. ~NEW BUSINESS:
a. ~~~~~Retirements and Final Calculations: None
b. ~~~~Withdrawals of Contributions - None
c. Pension Payroll Review Requests from individual board members
Discussion was held on Mr. Thompson’s request to the Asst. Finance Director for a running 4 year printout of weekly payroll figures for 15 retirees. Mr. Carlson advised the Board members that after he became aware of this request from a Board member, he felt this should be discussed by the entire Board. An in-depth discussion was held with Board members and Mr. Vignati stated that this was discussed at the December meeting and the Board approves retirements based on the calculations from the Benefits Administrator and the approval from The Segal Company. Mr. Vignati said that based on the Human Resources Department and the Assistant Corporation Counsel’s opinion at that meeting, that all calculations are calculated correctly. Ms. Powers agreed with Mr. Vignati and felt this
was not an appropriate forum to continue the discussion. Mr. Walsh advised the Board that when a request is made under Freedom of Information (FOI) the charge is $.50 a page for the report created. After further discussion the following motion was made:
Motion by Mr. Vignati, seconded by Mrs. Clarke to honor Mr. Thompson’s request for payroll information and that he assumes the cost to produce the report.
Mrs. Clarke commented that she seconded this motion to show no conflict from the Board.
Motion was voted; Motion was approved 3 – 1, with Ms. Powers opposing.
6. ~~REPORTS: ~
a. ~~~~~Pensions:
~~~~~~~1. ~ Summary of Portfolio Asset – December, 2012
2. Summary of Expenses – December, 2012
~~~
This was accepted as information for the Board members.
3. ~3 D Asset Management Report
Mr. O’Connell, 3D Asset Management distributed the East Hartford Pension Report as of December 31, 2012 for the Equity portion of the investments. The ending market value was at $119,464,542, the return was 2.15% for the month to date. The return is 7.23% since 7/1/12 and the fund has a 15.81% return since inception (11/3/08). Mr. O’Connell advised the Board that December was a relatively good month. A brief discussion was held on the asset classes.
4. ~Fiduciary Investment Advisors, LLC Report ~~
Mr. Kachmar distributed the East Hartford Fixed Income Report as of December 31, 2012 and the Economic Review. A brief discussion followed on the Economic Review. The Fixed Income Assets had a return of 0.4% for the month and has a market value of $65,878,209 and this was a gain of 1.3% for the quarter and a 9.0% for the year to date. The return since inception of 1/1/09 is 7.6%. A brief discussion followed.
b. ~~~~~OPEB Trust:
~~~~~~~1. ~ Summary of Portfolio Asset – December, 2012
- Summary of Expenses – December, 2012
This was accepted as information for the Board members.
- 3 D Asset Management Report as of December 31, 2012
Mr. O’Connell advised the Board that the OPEB Trust has a Market Value at $1,807,643 with a 17.19% return since inception of 6/22/09. The fund had a return of 8.90% for the fiscal year to date and a 2.27% for the quarter to date. Mr. O’Connor advised the Board that 3D Asset Management had issued a check to the Town for health benefits in December. A brief discussion followed.
- Fiduciary Investment Advisors, LLC Report ~as of December 31, 2012
According to the monthly flash report the OPEB Trust had good returns and the report indicated the Market Value at $1,209,430 with a 9.7% gain for the year to date and an 8.9% return since inception of 7/01/09. A brief discussion followed.
7. ~APPROVAL OF DISBURSEMENTS:
a. ~~~~Clerk for Pension & Ret. Benefit Board – January 23, 2013 ~~~~~~ ~~~~~~$ ~100.00
b. Robert Percy, Esq. #27622 invoice dated 12/26/12 682.50
c. The Segal Company, inv. #200298 ¼’ly (10/1/12 - 12/31/12) 7,675.00
Motion by Ms. Powers, seconded by Mr. Thompson to approve as presented for payment items # 7. a., b. & c.
Motion was voted; Motion was unanimously approved.
8. ~~~~~Adjournment: ~
There being no further business,
Motion by Ms. Powers, seconded by Mr. Thompson to adjourn the meeting at 7:40 PM.
Motion was voted; Motion was unanimously approved.
~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~Respectfully submitted,
Janet Penney, Clerk
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