MINUTES
HULL CONTRIBUTORY RETIREMENT BOARD MEETING
December 17, 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 Chairman recognized Chris McCabe in attendance at 9:10 for a full Board.
The Board read and attested to the minutes of the regular November 19, 2003 board meeting without correction.
The Board signed all bill warrants for December 2003.
The Board signed the contributory payroll for November 2003.
Application for Disability Retirement:
In preparation for the decision regarding the application for disability retirement submitted by police officer David S. Leary, the board reviewed the application to date.
Member's Application for Disability Retirement - Received July 1, 2003
Employer's Statement Pertaining to Member's Application for Disability Retirement - Received August 19, 2003
Physician's Statement Pertaining to Member's Application for Disability Retirement - Received August 24, 2003
PERAC issued the first Review of Medical Panel Certificate on October 31, 2003 after examination by Philip I. Salib, M.D. The second Review of Medical Panel Certificate was issued on November 17, 2003 after examination by John Groves, M.D. The third Medical Panel was not received by this meeting.
The two reporting Panels made the following findings:
1. Is the member mentally or physically incapable of performing the essential duties of his or her job as described in the current job description? - YES
2. Is the said incapacity likely to be permanent? - YES
3. Is said incapacity such as might be the natural and proximate result of the personal injury sustained or hazard undergone on account of which retirement is claimed? - YES
Both physicians signed the Majority Opinion.
Upon review of the panels, the Board requested clarification of "reasonable medical treatment" under 840 CMR 10.04 2(b), specifically if refusal of a doctor recommended surgery is a basis for denial of a disability retirement. Also questioned was, given the member's stated disability, if any observation of the member's activities can provide the board a basis for denial. The board directed M. Bohinc to forward the Medical Panel Certificates to counsel for opinion.
Lenny Colten made a motion, seconded by Jim Yacobucci, to approve Donald Brooker's Superannuation Retirement, Option B, from the police department with a retirement date of December 1, 2003.
In discussion, J. Yacobucci questioned that as part of the Board's fiduciary responsibility, should all the background information regarding Mr. Brooker's retirement be forwarded PERAC for review and approval. It was agreed that if this was the procedure for Mr. Brooker's retirement, then it must become a standard practice.
Based on this discussion, a substitute motion was made by Maurice Murphy that all itemized figures be provided to PERAC for review and ruling. A clarification was sought as far as what he meant as "figures" - that weekly payroll numbers for three years would not produce the review by PERAC that he intended. For a meaningful review, all background information must be provided, including meeting minutes, board votes and supporting materials. There was no second to the motion.
L. Colten added to his original motion for approval by including that the submittal to PERAC will be the standard Calculation Sheet and Annuity Savings Record as presented and as has been the practice, without any further background information. Voted: L. Colten, yes; Chris McCabe, yes; Ann MacNaughton, yes; J. Yacobucci, yes; M. Murphy, no.
The Board reviewed and discussed the year-to-date trial balance and cash accounts' reconciliation, specifically how the assets have increased year-to-date - the portfolio year to date net return through October is 16.86%, weighted for each investment company.
Investment Returns through October:
YTD Return
Manager Asset Allocation (October) Net Return
SSgA Fixed Income 8.21% 3.00% 0.25%
SSgA Equities 13.75% 21.62% 2.97%
SSgA Cash 0.17% 1.18% 0.00%
Freedom Fixed Income 12.77% 3.74% 0.48%
Freedom Large Cap 12.27% 22.09% 2.71%
PRIT 52.83% 19.79% 10.45%
Total 100.00% 16.86%
Investments
The following investment materials were provided to the Board:
Investors Fund Performance - Updated through October 2003
PRIM Board Quarterly Letter - Third Quarter 2003
SSgA - Total Return through November 2003
L. Colten presented a review of the historical investment return for Hull and other selected systems supporting his statement that Hull needs a more aggressive investment strategy to make up the severe funding shortfall. There was an ensuing discussion regarding the need for an investment advisor and what any advisor can do for Hull. It was agreed that over the next three months, the current investment managers will be invited to provide investment reviews, insight and advice. C. McCabe also directed M. Bohinc to contact other boards regarding how they engaged investment advisors and for possible copies of requests for proposals.
SSgA is scheduled to present a 2003 Investment Review in the January Board Meeting. Freedom Capital will be invited to present a 2003 Investment Review in the February Board Meeting and PRIT will be invited for March. It was agreed that the Board will ask the same questions of each manager regarding services, investment advice and the future outlook for the assets of the Hull Retirement System.
Old Business:
Insurance Update:
The Board has not received any correspondence from William J. Cray of Cray-Dowd Insurance regarding the renewal of the fidelity and fiduciary liability insurance. M. Murphy directed M. Bohinc to follow up.
M. Murphy stated again that if fiduciary liability insurance is not available to the Hull system, 100% participation in PRIT might be the only answer. J. Yacobucci reminded him of Mr. Cray's opinion that 100% participation in PRIT does not relieve the Board of their fiduciary responsibilities therefore their need for fiduciary insurance. M. Murphy requested M. Bohinc to research is any of the 100% participating PRIT members currently have fiduciary insurance.
The Board read all informational mail:
Mail:
Freedom Capital letter - dated November 19, 2003, re trading practices
Freedom Capital letter - dated December 4, 2003, re upcoming changes
Appropriation for Fiscal Year 2005 Memo - Dated December 1, 2003
Marblehead Retirement Board - Request for legislative support
Middlesex Retirement Board - Request for support
Middlesex Retirement System News
Retired State, County and municipal Employees Association of Massachusetts Newsletter - January 2004
Various articles from Pensions & Investments - December 8, 2003
The Babson Staff Letter - October 31, 2003
The Babson Staff Letter - November, 14, 2003
The Babson Staff Letter - November 26, 2003
Boston Partners' Quarterly Review - Third Quarter 2003
Meridian Investment Management Update
Additional investment materials:
Alternate Investment/Private Equity participation (Letter from Mike Reardon)
Wellesley investment advisor quarterly report
David L. Babson, Investment Advisor Overview
Contravisory Investment Manager Overview
The next two regular Board Meetings are scheduled for Wednesday, January 21, 2004 and Wednesday, February 25, 2004 at 9:00 a.m. in the Selectmen's Meeting Room.
The Hull Contributory Retirement Board meeting adjourned at 10:45 a.m.
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