OLD SAYBROOK PENSION BENEFITS BOARD
Thursday, September 27, 2012
Town Hall Conference Room at 7:00 p.m.
Present: Suzanne Taylor, Eileen Torrenti, Raymond Muratori
Also Present: Sharon Migliaccio, Tom Forma and Kevin Nichols – Merrill Lynch, Kevin Dunphy – Lord Abbott, and Linda McCall
The meeting of the Old Saybrook Pension and Benefits Board was called to order at 7:00 p.m. by the Chair, Suzanne Taylor.
The Minutes of the corrected June meeting and the July meeting were reviewed and accepted.
Chair’s Report:
• Suzanne reported that she has presented the report for the 2011-2012 Annual Report for the Pension Benefits Board to Janet for printing. She read parts of the report to those present.
• The Board of Finance has invited the Board to attend one of their meetings. Suzanne has tried to contact the chairman of the Finance Board to ask why they want this meeting but has not gotten an answer. They did say that the Board could attend the October 16th meeting or the November 20th meeting. After some discussion Suzanne, Gary, Eileen, and Ray will attend the November 20th meeting of the Board of Finance.
• The next CPPF meeting will be November 2nd at Waters Edge in Westbrook. Suzanne distributed “Save the Date” notices. Suzanne mentioned she had invited Lisa Carver, the Finance Director for the Town, to attend.
Investment Reports – Lord Abbett
Tom Forma introduced Kevin Dunphy of Lord Abbett which manages the bond portion of the Health Care Fund. Kevin talked about interest rates and their effect on the economy. He said that when the interest rates go down the economy goes up and when the interest rates go up the economy goes down. He also said that Europe is the reason interest has stayed lower.
He spoke about the Town’s portfolio and how they invest 60 percent in mortgages and the rest in treasury bonds. There was some discussion about the Board taking more risks to earn more money for the fund. This will be discussed further when we meet again. The Board thanked Kevin Dunphy for his presentation.
Tom Forma of Merrill Lynch distributed copies of the Town’s Portfolio to those present. There is $16,754,898 in the Town’s plan and $898,116 in the Health Care plan as of September 24, 2012.
Tom told the Board we have 63 percent in stocks, 32 percent in fixed income, and 4 percent in cash. Year to Date the performance is at 11.86 percent. For the Fiscal Year the performance is at 6.63 percent. He went on to talk about the performance of our managers.
Alliance has a year to date of 19.30 percent and a fiscal year of 10.59 percent.
Neuberger Berman has a YTD of 4.02 percent and a FY of 1.63 percent.
Invesco Int’l has a YTD of 8.17 percent and a FY of 8.45 percent.
Eaton Vance has a YTD of 16.52 percent and a FY of 8.36 percent
Tom went on to report that stocks in Europe and Asia are making a comeback. Tom had the Board examine pie charts of asset allocation. The long term Bonds in fixed income are mostly mortgages at 25.03 percent. The rest of the pie is divided between short term bonds at 42.15 percent and Int. term bonds at 32.83 percent. Some discussion ensued Tom also explained the correlation matrix. He gave out two pages, one showing return correlations between various asset classes over the past three months and over two years. More discussion followed. The Board thanked Tom and Kevin for their presentation.
Consideration of Additional Money Managers – Tom will bring his thoughts on other managers to the next meeting.
Old Business
• Status of Retirement Application for Sergeant Mercer – There in no longer a problem with Sgt Mercers retirement. He has decided to retire as of December 7, 2012.
• Status of the Board of Education participation in the Pension Plan – The Board of Education has not informed the Board of any action they’ve taken. Sharon said that five Board of Education employees have been contributing to the fund. There is no way to tell if any have bought back their service. After some discussion Sharon will call Mary at the Board of Education and find out.
• Status of the Current Health Insurance Plan – Suzanne gave out packets with information on the difference groups covered by ConnectiCare. The Board discussed some of the information. Also discussed, the 125 IRS section regarding pre tax contributions to insurance being addressed by Brown and Brown. Suzanne will explore this further.
• Other - A flier was given to the employees notifying them of a visit with Steve Feigelis of ICMA, theTown’s 457 plan. Steve will be here Monday, October 1st 8:30 a.m. to 2:00 p.m. Reservations can be
made by calling the Accounting office. Suzanne and Gary will meet with him at 1:00 p.m. to strategize how to get new members.
• Jonathan Gruber Book – Suzanne talked about the book she had bought called Health – Care Reform by Jonathan Gruber, an MIT Professor of Economic and a past advisor to both the Massachusetts plan and the current Affordable Health Care Act. She has found it very educational and interesting and encouraged the other Board members to read it.
New Business
• Response from Actuary regarding Auditors Request for GASB information for the Town and Fire Department Pension Plans was received as well as the bill which Carl Fortuna said should be charged to the
Board of Finance. The invoice from Milliman totaled $6,155. Part of the invoice was for work done on the GASB 25/27 for FYE June 30, 2012 for the Town and the Fire Department. The amount is $790 for
each totaling $1,580. The remainder is for Benefit Assistant for five employees and actuarial advice on DB and DC plans totaling $4,575. Suzanne and Carl met last week and discussed this invoice among
other things and Carl told her to pay the GASB amount out of the Board of Finance Budget. The rest will come from the Pension Benefits Board Budget. Sharon will pay the invoice.
• New Retirement Requests – There are two employees who have requested to retire. Eugene Heiney III who worked for the Police Department for over 35 years plans to retire as of January 2013. Also planning to retire is John Porter who worked for the Public Works for 31 years. He is planning to retire as of January 2013. Sharon will send them congratulation letters.
• Letter from Linda McCall regarding definition of base salary used for Pension Benefits was received by Suzanne regarding a problem with the term base salary in the definition section of the Town’s Pension
Plan. Linda explained that some employees who are not full time employee may work more then their regular hours and not get overtime rate. She feels that since they are not actually receiving an overtime rate they should get credit for those extra hours. Also the full-time who work 35 should get credit for the extra 5 hours at base rate to their pension. Suzanne tried to explain that in the definition of base salary it clearly excludes overtime pay and anything over that base salary is considered overtime regardless of straight time or time and a half. There was more discussion and Linda thanked the Board for listening. The Board agreed that the problem is in the determination
of the definition of base pay and should be resolved by the Selectmen and Director of Finance. There is nothing more the Pension Board can do to
clarify the problem.
• Visit from Colonial Insurance regarding various insurance plans – A representative from Colonial Insurance came to the Town to give the employees the opportunity to sign up for their insurance. Suzanne felt the Board should be notified when any company comes to sell an insurance benefit..
• Charter Commission - Suzanne read a letter from William Childress, Chairman of the Charter Revision Commission regarding a preliminary public hearing on October 10th. Ray Muratori volunteered to
represent the Board at this hearing.
• Other – There will be a Health and Wellness Fair at the Old Saybrook Town Hall on September 28th in the lower level conference room from 11 a.m. to 1 p.m. Flu shots will be available from noon to 1 p.m.
• The Town has received a check from CIGNA for the medical loss ratio for calendar year 2011. This amount is to offset a portion of the health care premium contributions for the employees. Refunds are going out the week of October 1st.
The next meeting will be October 25, 2012 at 7:00 p.m. A motion was made to adjourn by Eileen Torrenti and seconded by Ray Muratori. The meeting adjourned at 9:30 p.m...
Respectfully Submitted,
Sharon E. Migliaccio
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