MINUTES
HULL CONTRIBUTORY RETIREMENT BOARD MEETING
June 30, 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 Donald Brooker, Chris McCabe, Ann MacNaughton and James Yacobucci, and Retirement Administrator Marcia Bohinc.
On behalf of the board, Chairperson Lenny Colten extended a welcome and congratulations to Donald F. Brooker on his election to the Retirement Board for the unexpired term of elected member. The term Mr. Brooker will serve June 29, 2004 through December 30, 2005. The board also commended Marcia Bohinc on the preparation all election materials and thanked her for conducting the election.
The election results were:
Votes Percent
John J. King 76 34.5%
Francis Yannizzi 21 9.5%
Donald F. Brooker 123 55.9%
Total 220 100.0%
Voted No Vote Total Percent
Retirees 107 21 128 83.6%
Members 113 47 160 70.6%
Total 220 68 288 76.4%
Invalid Ballots 3
The Board read and attested to the minutes of the May 26, 2004 regular board meeting without correction.
Update to May 2004 minutes: Regarding the holding of retirement allowances for failing to report annual income under G.L. c32, §91A, there was previously no time limit on how long allowances were to be held. However, enacted in the FY05 budget is an amendment to §91A that, after due notice, failure to report income will result in a termination of allowance. For this new amendment, the board is to take no action until advised by PERAC.
A Hull Retirement System retiree currently under the §91A suspension is also facing termination due to failure to comply with G.L. c. 32, §8. PERAC was originally contacted for guidance regarding the difference between suspension and termination. The board will continue to hold the retirement allowance (not terminate) until further notice from PERAC.
The Board signed the contributory payroll for June 2004.
Jim Yacobucci made a motion, seconded by D. Brooker, to approve Gary Fleck's Superannuation Retirement, Option C, with a retirement date of May 21, 2004. Mr. Fleck retired after 38 years, 4 months of service in the Fire Department with the Town of Hull. Voted unanimously.
Retirement Allowance Adjustments
Under G.L. c32, §20(5)(c)(3), the board reviewed a request for waiver of reimbursement to the system from five retirees identified as being overpaid for errors that originated several years ago. The deadline for the request for waiver from reimbursement by the board was June 25, 2004. All five made the written request by that date.
J. Yacobucci made a motion to request repayment to the system of 50% of what is owed from each of the five retirees, however with an individual review of each retiree. D. Brooker seconded the motion for discussion.
C. McCabe spoke in favor of a repayment schedule from each of the retirees, stating that some sort of repayment schedule could work for each retiree in recognition the debt. Remarking that because the retirees received money from the system that they were not entitled, and they should be required to pay it back as an obligation to the system. Citing fiduciary responsibility, J. Yacobucci agreed with a repayment schedule, however emphasized reviewing each situation.
L. Colten spoke against requiring repayment from all the retirees, maintaining that all the retirees complied with the regulations and trusted that their allowances were correct. He stated that because the monthly overage amounts were so small, the retirees could not be aware of the overage, and over time the total amount added up to some substantial amounts. He argued that the board should not hold the retirees responsible for board's mistakes. After again pointing out fiduciary responsibility, and noting that that sometimes fiduciary responsibility is not one of being sympathetic, J. Yacobucci withdrew his motion.
Agreeing with J. Yacobucci on needing repayment, C. McCabe made a motion that a repayment schedule be established for all retirees that is flexible and reasonable, so that the debit is recognized, and the system recovers at least a portion of the money. Any remaining debt would be forgiven at the retiree's death. M. Bohinc is to work with each of the retirees to determine what the schedule will be agreeable to all. Seconding the motion, J. Yacobucci strongly agreed to some sort of repayment due to the fiduciary responsibility of the board, but remained adamant that each retiree be reviewed individually for an ability to pay. In general, there was a question of who and how to make the determination to pay. After prolonged discussion on the same basic points, a vote on the current motion was
requested.
Voted: C. McCabe, yes, J. Yacobucci, yes, D Brooker, no, L. Colten, no, Ann MacNaughton, no. Motion defeated.
Following the vote, L. Colten made a motion to accept the waiver from all five retirees. Seconded by D. Brooker. Without further discussion, the motion was voted: D Brooker, yes, L. Colten, yes, A. MacNaughton, yes, C. McCabe, no, J. Yacobucci, no. Motion approved. Waiver of reimbursement to the board for money owed was granted to retirees: James Greer, John Lisenby, John Papasodero, Joseph Quirk and Georgia Trapp. Eleanor Murphy, on the original list of overpaid retirees, repaid the system the small amount she owed in June.
Membership Items
The board reviewed the request from Fire Department Captain William Souza to make-up contributions for the period from his date of hire of May 5, 1980 until the date of his membership of February 21, 1981. He was hired as a full time employee; therefore was required to be a member of the system from date of hire. On a motion by C. McCabe, seconded by J. Yacobucci, the board voted unanimously to approve a make up contribution of 11 months.
The board reviewed the request from the Quincy Retirement Board to accept liability for former employee Joseph Prondak. Mr. Prondak was appointed the full time Assistant Building Inspector effective November 16, 1987, at a rate of $22,391.67 per year. His employment ended on September 2, 1988; therefore Quincy is requesting Hull to accept nine months liability. Although he was never a member of the system, because he was a full time permanent employee, membership was required. On a motion by C. McCabe, seconded by D. Brooker, the board voted unanimously to accept liability for nine months.
These two items renewed the discussion of the need to verify membership for all employees that are required to be in the system, and to notify all members previously identified who have the opportunity to make up time because of delayed membership. Specifically, there is concern regarding certain school department employees who were denied membership. The board directed M. Bohinc to review all payroll records for employees who should be in the system and are not, and to make any necessary corrections. They also asked that notices be sent to all members eligible to make up contributions. To complete the process, they requested a review of the Supplemental Regulations on the membership requirements, draft guidelines for accepting and denying requests for make up contributions and liability from other
systems, and the requirements regarding elected officials as members in the system.
Hull Housing Authority
The board was updated on the status of the negotiations for the receipt of the outstanding appropriations from the Hull Housing Authority (HHA), including a review of the latest correspondence and contact between the HHA and the Retirement Board. This included a letter from Larry Stone, Stone Consulting, Inc. dated June 2, 2004 in response to HHA's request for actuarial calculation methods, a letter from M. Bohinc to P. Daley dated June 3, 2004 and two meetings between M. Bohinc and P. Daley on June 3, 2004 and June 23, 2004. Mr. Daley was not totally satisfied with the information from Stone Consulting regarding the method of appropriation to governmental units, however Mr. Stone affirmed that the appropriation method used based on his actuarial calculation is the only method outlined in Chapter 32. M.
Bohinc requested supporting materials from another system to give to Mr. Daley. Upon receipt, M. Bohinc will meet again with Mr. Daley.
However, following a recent Housing Authority Board meeting, Mr. Daley did promise some payment in the near future. At this time, the retirement board is still agreeable to have M. Bohinc deal directly with Mr. Daley for resolution. The board is not planning additional legal action at this point.
The Board reviewed the current 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 May 2004
PRIM Board Quarterly Letter - First Quarter 2004
Hull Profile - 11/30/00 through 03/31/04
PRIM Board Update - May 31, 2004
PRIT - Summary of Plan Performance - May 31, 2004
SSgA - Total Return through May 2004
It was noted in the review of the investment performance that SSgA was not meeting the benchmarks, and has not met them for a period of time. J. Yacobucci directed that SSgA be requested to attend a board meeting to review their performance and their expectations for future performance. This meeting will be scheduled in the next quarter.
The board was also given the final Appropriation Allocation as of July 1, 2004 to review prior to investing the fiscal year 2005 appropriation. There was no further discussion on this point, therefore the appropriation will be invested 25% in SSgA, 25% in Freedom Capital, and 50% in PRIT, without rebalancing as voted in the May 26, 2004 board meeting. Some of the appropriation will be held in cash to meet July liabilities.
Consultant Process
Regarding the investment consultant search process, the board was presented with the following materials:
Draft Request for Proposal (RFP)
Departed Client Telephone Questionnaire - Standish Mellon Asset Management (Newburyport Retirement System)
System Performance Rankings (Source - PRIM)
- 2003
- 5 Years Ending 2003
- Since Inception
- Alphabetical
Upon review, J. Yacobucci commended M. Bohinc on a fine job in writing the RFP. After a brief discussion, C. McCabe made a motion, seconded by J. Yacobucci to accept the RFP as drafted by M. Bohinc and to send the RFP to a selected group of possible respondents. C. McCabe recommended limiting the distribution of the RFP to a manageable group, however being careful to have sufficient respondents to make a reasonable selection. As noted in the latest Pensions & Investments, the Cambridge Retirement System is also undertaking a search for an investment consultant. M. Bohinc will contact them to get information on how they distributed their RFP, the response rate from P&I, and any other information their experience my provide. PERAC must also be notified.
New Business
Following requests for estimated retirement allowances, M. Bohinc requested an opinion and ruling from the board regarding a clause in the Agreement - Hull School Committee and Hull School Secretaries Association…, July 1, 2004 - June 30, 2007 and in the Agreement - Town of Hull and the International Brotherhood of Police Officers, July 1, 2002 - June 30, 2005. The specific clauses provide for an increase in compensation in the final three years and one year of employment respectively. The question to the board was what portion of the additional compensation, if any can be considered "regular compensation". In their discussion, the board reviewed an opinion from attorney Michael Sacco, regarding the Police Longevity Clause, and 840 CMR 15.03 Regular Compensation.
After a lengthy discussion, on a motion by J. Yacobucci, seconded by D. Brooker, the board voted unanimously that the referenced clause in Hull School Secretaries Association contract is not regular compensation. The additional amount in the longevity clause of the International Brotherhood of Police Officers contract is regular compensation only to the extent that it is for the period of time worked. The amount of regular compensation is to be determined prorata as the time worked in the year - any additional compensation amount for the final year for the period not worked is not regular compensation.
Changes in the veteran's benefits were reviewed, both regarding the definition of veteran and the retroactive benefit for disabled veterans. The board will await further information from PERAC regarding the expanded definition of veteran relative to already retired members to whom this would apply. M. Bohinc will define the group of disability retirees who are veteran's for an allowance modification.
A brief overview of the MACRS 2004 Annual Meeting on June 6 through June 9, 2004 in Hyannis, MA was given to the board, including
MACRS Update
President's Message
Group 1 Study
Legislative Update - Spring 2004
J. Yacobucci requested a more detailed summary of the conference in the July board meeting.
A clarification on the bill warrants for June 2004, the invoice for legal services included an amount for preparation and meeting regarding litigation relative to John Clasby. This amount was not included in the payments, pending questioning of these charges by the board. M. Bohinc will follow up and report back to the board.
Regarding office space, C. McCabe will inquire about space availability in other Town buildings for possible relocation of the Retirement Office.
The Board read all informational mail:
Retired State, County and Municipal Employees Association of Massachusetts - Conference Releases Final FY05 Budget
PERAC Memo #21/2004 - Change to the Definition of Veteran
Senate Bill No. 822, Chapter 116 - Signed
MACRS Memo - New Definition of Veteran (2)
PERAC Press Release - June 13, 2003
Article - The Patriot Ledger, June 7, 2004
The Babson Staff Letter - May 28, 2004
The Babson Staff Letter - June 11, 2004
Newsletter - Retired State, County and Municipal Employees Association of Massachusetts, July 2004
Public Employee Retirement Administration Commission - Annual Report 2003
The next regular Board Meeting is scheduled for Wednesday, July 28, at 9:00 a.m. in the Selectmen's Meeting Room.
The Hull Contributory Retirement Board meeting adjourned at 10:51 a.m.
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