MINUTES
HULL CONTRIBUTORY RETIREMENT BOARD MEETING
September 24, 2003
The regular meeting of the Hull Contributory Retirement Board, duly posted to be held in the Selectmen's Meeting Room Meeting Room, Town Hall, Hull, MA on the above date was called to order at 9:02 a.m. Present were Maurice Murphy, Chairman, Members Leonard Colten, Ann MacNaughton, and James Yacobucci, and Retirement Administrator Marcia Bohinc.
The Board read and attested to the minutes of the August 27, 2003 board meeting without correction.
The Chairman recognized Chris McCabe in attendance at 9:14 for a full Board.
The Board signed all bill warrants for September 2003.
G.L. c. 32 §91A
Two retirees identified by the Public Employee Retirement Administration Commission (PERAC) as having failed to submit the required annual report of earnings, thereby facing suspension of retirement allowances, were invited to attend the meeting to be heard by the Retirement Board.
PERAC gave notice that one of the retirees is now in compliance; the other did not appear.
Retirement allowances are being held for three retirees for failing to submit the Annual Statement of Earned Income pursuant to G.L. c. 32 §91A.
Two retirees identified by PERAC as having exceeded the earnings limitations permitted by G.L. c. 32 §91A, thereby facing suspension of retirement allowances, were invited to attend the meeting to be heard by the Retirement Board.
The first retiree requested recalculation of the estimated compensation that he would have earned had he remained in his position. Upon recalculation, it was determined that all the permitted components had not been included. When these were included, the allowable earnings amount exceeded the reported earned gross income. The Board accepted the new calculation; therefore no refund is due.
The second retiree was originally not given the $5,000 additional allowance provided for in §91A. PERAC amended their Statement of Refund due to include this additional amount. The estimated compensation that he would have earned had he remained in his position was also recalculated. Upon review of all the information, the retiree and the Board agreed on a refund amount and a repayment schedule.
Notices will be sent to both retirees and to PERAC.
The Board received an Asset Allocation Study presentation from Kelly Shea and Tim Muffley of OFI Institutional Asset Management. Three main points were made clear to the Board:
The System needs an Investment Policy (a policy is required by 840 CMR 18.00)
The current asset mix is well diversified and fairly "efficient".
The System's underfunded status and assumed long-term rate of return warrant a more aggressive risk/return profile
The Board agreed with findings in the presentation and will pursue putting an Investment Policy in place, along with more periodic and thorough reviews of the assets.
The Board is unclear on the types and amounts of insurance required by the regulations. They are still waiting on information from the outcome of the MACRS meeting regarding fiduciary insurance. M. Bohinc has been in contact with John Murphy at MACRS and will provide an update at the next meeting after the October MACRS conference.
Application for Disability Retirement - David Leary:
The Board discussed all of the materials submitted by and on behalf of police officer David S. Leary regarding his Application for Disability Retirement. Because of conflicting medical information and a strong Employer's Statement Pertaining to a Member's Application for Disability Retirement, the Board deferred to their counsel's opinion on when it is appropriate to either continue or deny proceeding with an application.
On a motion by Chris McCabe and seconded by Jim Yacobucci, the Board to voted to convene a Medical Panel and proceed with David S. Leary's Application for Disability Retirement. Voted unanimously.
Investments:
The following investment materials were provided to the Board:
Fund Performance through August 31, 2003
SSgA and PRIT performance updates
The Board reviewed without discussion the year-to-date trial balance and cash accounts' reconciliation.
In a follow-up to the September 24, 2003 meeting, the Retirement Board requested and received an updated legal opinion regarding Police Chief Donald Brooker's contract of March 2000 with the Board of Selectmen. They specifically asked that although G.L. c. 41 §108O states a contract may provide for supplemental retirement benefits, under G.L. c. 32, can the Retirement Board accept the provision that replaces sick leave buy-back with regular compensation, thereby making it pensionable. Although the written opinion did not specifically reference c. 41 §108O, counsel did verbally state that while §108O may provide for supplemental retirement benefits, it does not supersede the definitions and requirements of G.L. c. 32. Counsel also strongly reiterated the original opinion regarding what was
to be considered regular compensation as defined in 840 CMR 15.03.
After intense discussion, a motion was made by Maurice Murphy and seconded by J. Yacobucci to rescind the vote made in the June 2002 Retirement Board meeting to accept the Police Chief's contract with the Board of Selectmen. The motion was clarified to state that based on legal opinion, the Board does not accept the sick leave buy back as pensionable, and any retirement deductions collected by the Retirement System based on the previous vote be returned to the Chief.
C. McCabe made a substitute motion, seconded by Lenny Colten, that before the Board acts on the current motion, the Board have Town Counsel review the issue and render an opinion. In discussion, it was noted that the Retirement Board does not depend on Town Counsel for opinions in any retirement matters. Voted: yes - L. Colten, C. McCabe; voted no - Ann MacNaughton, M. Murphy and J. Yacobucci.
C. McCabe amended the original motion, seconded by J. Yacobucci, that counsel put in writing the statement that c. 41 §108O does not supersede the definitions and requirements of G.L. c. 32. The original motion as amended was voted: yes - C. McCabe, A. MacNaughton, M. Murphy, J. Yacobucci, no - L. Colten.
PERAC stated that a Contributory Retirement Appeal Board (CRAB) decision regarding regular compensation for motor vehicle usage was imminent, therefore discussion on this topic was deferred until the next meeting or the publication of the CRAB decision.
The Board voted on attendance to the MACRS 2003 Annual Fall Conference (Springfield, MA). Yes - L. Colten, A. MacNaughton, M. Murphy, J. Yacobucci, No - C. McCabe. In attendance will be M. Murphy, J. Yacobucci and M. Bohinc.
The Board read all informational mail:
PERAC Memo #28/2003 - New Investment Forms
PERAC Memo #29/2003 - $300 Benefit for Veterans Selecting Option C
PERAC Memo #30/2003 - Cost of Living Increase for Supplemental Dependent Allowance Paid to Accidental Disability Retirees
Memo from Ralph White - Re: Option C Veterans
Memo from Ralph White - Re: Local Government ERIMemo from Ralph White - Re: Local ERI Update
Memo from Ralph White - Re: DALA Ruling on Spousal Benefit Repeal
Memo from Ralph White - Re: Spousal Benefit Update
Various news items from Pensions & Investments - September 1
The Babson Staff Letter - August 22, 2003
The Babson Staff Letter - September 5, 2003
Segal Survey - Summer 2003
Segal Public Sector Letter - September 2003
Boston Partners' Quarterly Review
Opus Investment Management - Results
Alliance Bernstein - Emerging Markets information
The next regular Board Meeting is scheduled for Wednesday, October 29, 2003 at 9:00 a.m. in the Selectmen's Meeting Room.
The Hull Contributory Retirement Board meeting adjourned at 11:37 a.m.
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