MINUTES
HULL CONTRIBUTORY RETIREMENT BOARD MEETING
January 21, 2004
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 9:00 a.m. Present were Maurice Murphy, Chairperson, Members Chris McCabe, Leonard Colten, Ann MacNaughton and James Yacobucci, and Retirement Administrator Marcia Bohinc.
Jim Yacobucci made a motion to nominate Leonard Colten as chairperson of the Hull Contributory Retirement Board. Seconded by Maurice Murphy. After a brief discussion, the motion was voted unanimously.
Mr. Colten thanked the Board for their support and thanked Mr. Murphy for his service as chairperson in a "hectic 2003".
M. Murphy nominated J. Yacobucci as vice chairperson. Voted unanimously.
The Board read and attested to the minutes of the December 17, 2003 board meeting without correction.
The Board signed all bill warrants for January 2004.
The Board signed the contributory payroll for December 2003.
Application for Disability Retirement:
In attendance: David S. Leary, Disability Retirement Applicant, and Terrace Coles, attorney for David S. Leary.
Mr. Coles made a brief statement of the facts of Police Officer David S. Leary's application for disability retirement, stating that the medical evidence from the Medical Panel and accompanying narratives were quite clear regarding his injury and subsequent disability.
The Board continued their review from the December 17, 2003 meeting, including examining the third Medical Panel Certificate, issued by PERAC on December 31, 2003. They also considered an opinion from their counsel who had reviewed the Medical Panels. The police department Personnel Orders and the Employer's Statement were carefully taken into account, along with the unanimous findings of the Medical Panel Certificate.
The Panel answered all three questions in the affirmative indicating that the applicant is incapable of performing the essential duties of his job, that the said incapacity is likely to be permanent, and that the said incapacity might be the natural and proximate result of the personal injury sustained on account of which retirement is claimed.
The Board questioned whether there was any additional investigative information that they should consider. None was presented. After reviewing the findings of facts, M. Murphy made a motion to accept the findings of the Medical Panel and approve an Accidental Disability for David S. Leary. Seconded by J. Yacobucci. Voted unanimously. The Board members signed the Disability Transmittal to the Commission, and the Transmittal and all required documents will be sent to PERAC.
M. Murphy made a motion, seconded by J. Yacobucci, to approve Phyllis Kitson's Superannuation Retirement, Option A, from the Treasurer/Collector's office with a retirement date of January 1, 2004. Voted unanimously.
The Board reviewed and discussed the year-to-date trial balance and cash accounts' reconciliation, specifically how the assets have increased year-to-date and net year to date returns. Questions continue regarding understanding the contents of the trial balance.
Investments
The following investment materials were provided to the Board:
Investors Fund Performance - Updated through November 2003
PRIT - Summary of Plan Performance - November 30, 2003
PRIM Board Update - November 2003
SSgA - Total Return through December 2003
The Board received the 2003 Annual Investment Review presentation from Mark Bergin and Michael O. Martel of State Street Global Advisors (SSgA). The presentation included:
SSgA Overview
Account Summary and Performance History
Asset Changes
Asset Allocation
2003 Performance Analysis and Understanding Benchmarks
Economic and Market View
The ensuing discussion centered on the state of funding for the Hull Retirement System and what changes could/should be made, and the steps required in making those changes. SSgA recommended the following:
- A study of the effects of further asset class diversification. SSgA offered to review the current SSgA portfolio and provide a baseline of expectations, vary the asset mix to include more risk, and propose an asset mix based on what SSgA believes the market conditions will be and the needs of the Hull Retirement System.
- The Board should study the underlying assets to determine if there is duplication of investments with the three providers. Currently, all three managers are providing balanced portfolios, which may not be the most efficient method of investing.
- If there is investment duplication, determine if this is the correct/optimum strategy. If not, determine which managers are producing highest returns for each asset class and make the changes accordingly.
- An overall strategy for entire system - the SSgA study and proposal will give a framework for entire portfolio.
- A current investment objective.
- More regularly communication with investment managers.
The board questioned whether the small size of Hull's portfolio was a disadvantage regarding performance or attention from SSgA. SSgA stated that Hull was one of 33 accounts in the Massachusetts public funds group. All accounts receive equal treatment on the service side. For investments, each account is assigned a manager who reviews the investments at least monthly. The reviews result in investment decisions based on objectives and strategies, not system size.
The use of an investment consultant was again discussed, with the board seeking the opinion of SSgA. SSgA opined that the investment strategy would most likely be different with the use of a consultant, using a less balanced portfolio approach, instead choosing managers for individual assets within a strategy. The issue of cost was also raised, both for the consultant and for the investments. Chris McCabe made a motion to direct Marcia Bohinc to begin the process of contacting other retirement boards for the purpose of gathering preliminary insight on what investment advisors are being used and to what success. He requested that this item be kept on the board meeting agenda each month. Seconded by J. Yacobucci. Voted unanimously.
Old Business:
Donald Brooker
Ann MacNaughton stated she misinterpreted the facts regarding former Police Chief Donald Brooker's contract of March 2002 with the Board of Selectmen and wanted to discuss her vote of November 4, 2003. J. Yacobucci made a motion for the Board to revisit the decision to award Chief Donald Brooker the additional compensation as pensionable as stated in paragraph 2 of the contract. A. MacNaughton seconded the motion.
Upon extended discussion of the history of the many previous discussions, along with a review of the three previous votes (June 25, 2002, September 24, 2003, November 4, 2003), the board remained conflicted with the issue and the decision. L. Colten strongly urged that, since the issue has been thoroughly reviewed, voted, and in the past, it should remain in the past. J. Yacobucci stated his goal with the motion was to finish with this issue for good, and withdrew his motion and the discussion ended.
Insurance Update
William J. Cray of Cray-Dowd Insurance stated the insurance issue was in the hands of the underwriters and had no further information on coverage for Hull. Responding to a request by M. Murphy regarding systems fully invested in PRIT, 17 participating and 2 of 2 100% purchasing systems are covered by fiduciary insurance.
The Board read all informational mail:
PRIM Fiscal 2003 Annual Report
PERAC Memo #39/2003 - New/Revised General Membership & Disability Forms
PERAC Memo #40/2003 - Calendar Year 2003 Annual Statements
PERAC Memo #41/2003 - Military Pay Act (Section 1 of Chapter 137 of the Acts of 2003)
PERAC Memo #42/2003 - Mutual Fund Allegations
PERAC Memo #1/2004 - Local Government Early Retirement Incentive Program
PERAC Memo #2/2004 - COLA Notice
PERAC Memo #3/2004 - Post-Retirement Earnings Limitations in G.L. c. 32 §91
PERAC Memo #4/2004 - Electronic Versions of Actuarial Reports
PERAC Memo #5/2004 - Investment Manager List
PERAC Memo #6/2004 - Tobacco Company List
The Babson Staff Letter - December 12, 2003
The Babson Staff Letter - January 9, 2004
10th Annual Mid-Sized Pension Management Conference
The Hull Contributory Retirement Board meeting adjourned at 11:45 a.m.
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