MINUTES
HULL CONTRIBUTORY RETIREMENT BOARD MEETING
February 25, 2004
The regular meeting of the Hull Contributory Retirement Board, duly posted to be held in the Selectmen's Meeting Room, Town Hall, Hull, MA on the above date was called to order at 9:00 a.m. Present were Leonard Colten, Chairperson, Members Chris McCabe, Ann MacNaughton and James Yacobucci, and Retirement Administrator Marcia Bohinc.
The Board acknowledged the resignation of Board Member Maurice Murphy. Lenny Colten made a motion, seconded by Chris McCabe to send a letter of thanks to Mr. Murphy for his long service to the Board. Voted: L. Colten, C. McCabe, Ann MacNaughton, yes, Jim Yacobucci, no.
Due to Mr. Murphy's resignation, the Board discussed the need for a special election, reviewing excepts from the PERAC Guide How to Run an Election and 840 CMR 7.00 - Standard Rules for Election, including timeframes for the election. No vote was taken regarding the appointing of an Election Officer or a decision whether the length of the term will be the remaining unexpired or a full three-year term.
The Board received the 2003 Annual Investment Review presentation from Michael Reardon from the Pension Reserves Investment Management Board (PRIM). The presentation included:
PRIM Overview and Personnel
PRIT Fund Asset Allocations
PRIT Fund Performance
Overall and by Portfolio
Fees
Regarding the use of consultants, Mr. Reardon explained the role of consultants at PRIM, including staff analysts and outside consultants. He stated that PRIM has contracts with five external advisors for various portfolios, however PRIM is increasing their own staff to take over some of the responsibilities performed by the consultants, using some of the models and databases they developed. This will make PRIM more self-sufficient and cost effective. In either case, whether by the outside consultants or by PRIM's analysts, by the Hull System being a part of PRIM, they are benefiting from the consultants' insight and expertise.
Asset allocation was discussed in detail, specifically relating to the investment of the Hull Retirement System assets. Mr. Reardon included all of Hull's assets in his presentation to assist the board in understanding strategies and the possible use of consultants. Also, to aid the Board in the possible search for an investment consultant, using the asset allocation, he reviewed the PRIM fee structure comparing it with the other current investment provider fees.
Mr. Readon offered his assistance to the Board with their analysis of assets and fees if and when they take the next step in hiring a consultant. He also provided some insight to the methods consultants use to choose asset allocations for the retirement systems. Additionally, a request was made for Mr. Reardon to help analyze the underlying assets of the three portfolios to determine if there are overlapping assets and if so, what they are.
The Board read and attested to the minutes of the January 17, 2004 board meeting with one correction.
The Board signed all bill warrants for February 2004.
The Board signed the contributory payroll for January 2004.
On a motion from J. Yacobucci, seconded by C. McCabe, the Board reviewed and unanimously approved the disability retirement for Police Officer David S. Leary, effective April 16, 2003 with an Option B as follows:
Annuity Annuity $1,262.88
Annual Pension 30,479.52
Total $31,742.40
It was noted that the amount of the final twelve-month compensation is in dispute by Mr. Leary, therefore a retirement allowance recalculation may be required.
The Board reviewed the complete year-to-date trial balance and cash accounts' reconciliation without question.
Investments
The following investment materials were provided to the Board:
Investors Fund Performance - Updated through December 2003
Investors Fund Performance - Updated through January 2004
PRIM Board Update - December 2003
PRIM Board Quarterly Letter - Fourth Quarter 2003
PRIM Board Update - January 2004
PRIT - Summary of Plan Performance - December 31, 2003
PRIT - Hull Profile as of 12/31/2003
PRIT - Summary of Plan Performance - January 31, 2004
SSgA - Fourth Quarter 2003 performance, executive summary and cover letter with analysis
SSgA - Total Return through January 2004
Freedom Capital Year-end 2003 Client Update
Freedom Capital Portfolio Summary as of December 31, 2003
Freedom Capital - Performance Summary - January 31, 2004
PERAC Financial Bulletin - January 2004
Consultant Process
The following materials regarding a possible consultant search were provided to the Board:
840 CMR 26.00 - Consultants
Competitive Process Notification
Application for Consultants
Pension & Investments - January 12, 2004: Consultants under the gun with SEC Probe
Jeff Fabrizio from Wainwright Investment Counsel, LLC contacted the Board to schedule a background presentation on the use and effectiveness of consultants. C. McCabe requested this information be furnished in writing at this point, leaving the presentations to later in the process, provided that the Board elects to continue with a search.
Due to a scheduling conflict, C. McCabe departed the meeting at 10:30. Because there were only three remaining board members, the Board agreed that the discussion and approval of the annual salary increase for Marcia Bohinc would be postponed until the March meeting.
Old Business:
Insurance Update
William J. Cray of Cray-Dowd Insurance reported that with the current funding level, Travelers has declined fiduciary insurance coverage for the Hull Retirement System. To satisfy the PERAC requirement, the Board will be covered by a one million dollar fidelity policy.
New Business:
The Board discussed PERAC's Memo #12/2004 - Investment Manager Reviews, specifically the requirement to report to PERAC any meeting in which annual investment reviews are given. To be compliant, it was agreed that the specific portion of the minutes would be forwarded to PERAC. To complete the reviews for 2003, Freedom Capital will be invited to the March meeting.
The Board read all informational mail:
Mike Reardon - Recap of First 2004 PRIM Board Meeting
PRIM Board Memo - February 20, 2001, RE: Appointment of New Executive Director
SSgA - Update on Market Timing and Other Trading Issues
PERAC Memo #10/2004 - Buy-back and Make-up Repayment Worksheets
PERAC Memo #11/2004 - 2004 limits under Chapter 46 of the Acts of 2002
PERAC Memo #12/2004 - Investment Manager Reviews
Retired State, County and Municipal Employees Association of Massachusetts - Governor's Budget Pension Highlights, January 2004
Retired State, County and Municipal Employees Association of Massachusetts - Memo Governor's Budget Proposals
The Babson Staff Letter - January 23, 2004
The Babson Staff Letter - February 13, 2004
Segal Bulletin - January 2004
Segal Bulletin - February 2004
Retired State, County and Municipal Employees Association of Massachusetts - Newsletter - March 2004
Pension & Investments - January 26, 2004: Asset Allocation
Middlesex Retirement System 10th Annual Mid-Sized Pension Management Conference
The next regular Board Meeting is scheduled for Wednesday, March 24, 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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