OLD SAYBROOK PENSION BENEFITS BOARD
Thursday, October 25, 2012
Town Hall Conference Room at 7:00 p.m.
Present: Suzanne Taylor, Eileen Torrenti, Raymond Muratori, Gary Lehrman, Stephen Sheehan, Carl Fortuna, Carol Voigt via speaker phone
Also Present: Sharon Migliaccio, Tom Forma– Merrill Lynch, George Stanevich-Neuberger Berman
The meeting of the Old Saybrook Pension and Benefits Board was called to order at 7:11 p.m. by the Chair, Suzanne Taylor.
The Board went into Executive Session at 7:17 pm for the purpose of discussing personnel matters. The Board came out of Executive Session at 7:40 pm. It was agreed that the job description of the Pension Board Administrator would be reviewed further by the First Selectman with a report due back for the next meeting in November.
The Minutes of the September meeting were reviewed and accepted by a unanimous motion.
Chair’s Report:
• CPPF meeting: On November 2nd there will be a CPPF meeting at the Waters Edge in Westbrook. Suzanne Taylor, Gary Lehrman, Raymond Muratori, Eileen Torrenti, and Sharon Migliaccio will be attending.
• Suzanne Taylor informed the Board of the materials they would be receiving for review.
• Suzanne presented a list of possible meetings for 2013. The Board agreed to meet once a month on the 4th Thursday except for November when due to Thanksgiving that will be on the third Thursday. As
usual there will be no regular scheduled meeting in July, August, or December.
• Several Informational documents were distributed for Board Review.
Investment Reports – Neuberger Berman
• Tom Forma introduced George Stanevich of Neuberber Berman which manages the fixed asset portion of the Pension Plan. George distributed copies of his presentation to the Board and explained the history
of Neuberger Berman. He also talked about the managers who work there. He stated that all their managers are experienced and professional. Neuberger Berman invests mostly in Treasury Bonds,
Corporate Bonds, and Mortgages. There was some discussion and the Board thanked George Stanevich for his presentation.
• Tom Forma of Merrill Lynch distributed copies of the Town’s Portfolio to those present. There is $16,566,267.80 in the Town’s plan and $892,351.31 in the Health Care plan as of October 22, 2012.
Tom told the Board we have 63 percent in stocks, 43 Large Cap Growth, in Large Cap Value 25 percent, SMID has 12 percent and 20 percent in International. Year to Date the performance is at 10.96 percent
For the Fiscal Year the performance is at 5.76 percent. He went on to talk about the performance of our managers.
Alliance has a year to date of 16.75 percent and a fiscal year of 8.27 percent.
Neuberger Berman has YTD of 4.14 percent and a FY of 1.75 percent.
Invesco Int’l has a YTD of 8.02 percent and a FY of 8.30 percent.
Eaton Vance has a YTD of 15.77 percent and a FY of 7.66 percent
Tom went on to talk about the Average Coupon which is the rate of what a bond pays. He said that all the bonds are investment grade but we are not making much on the bonds. Rates are low. He hopes
that the equities make more.
• Tom explained that due to significant management changes in the Invesco International Fund it will be necessary to find an alternative manager to increase the overall diversity of the pension investments. It
was decided that a sub-committee of three confer with Tom Forma on the prospect of additional managers. Gary Lehrman and Eileen Torrenti volunteered to serve on the sub-committee along with Suzanne.
A meeting date was set for November 12th at 2 p.m., place to be determined.
Old Business
• Status of the Board of Education Retirement Issues: Sharon spoke to Mary and was told that those who elected to buy back their service have started to do so.
• Status of ICMA: Gary Lehrman read a report he had prepared for the Board. In his report he states on July 18, 2012, the sum of $994,570.74 was rolled over to the ICMA plan from ING. Five participants have
elected not to participate and one new member was added and one retired. The balance as of 10/19/12 equaled $861,221.93. (Report Attached.)
• Regarding the Sec. 125 Premium Pay Plan: It applies when the town pays a partial amount of the health insurance premium. It was determined that participation in this is required by the IRS and will be
effected by our insurance broker. Copies of the full document have been printed out and are available in the Accounting Office.
• Report and Other Issues Related to Charter Revision Commission: Ray Muratori attended the meeting of the Charter Revision Commission and reported back to the Board. In Article VIII it deals with the
Pension and Employee Benefits Board. It explains the Membership, Duties and Responsibilities, Adoption of Retirement Plan, and Duties and Responsibilities relating to the Fire Fighters. Carl Fortuna
pointed out that in the wording of the first paragraph it says “The Pension and Employee Benefits Board shall be appointed by the Board of Selectmen of the Town of Old Saybrook and shall consist of at least
five, but not more than seven members.” In 8-35 A. it says “The Board shall act as the Retirement Board with the duties and responsibilities established for it under the provisions of the Town of Old Saybrook
Retirement Plan…..” But in 8-35 B. it says “The Board shall be concerned with all matters relating to the benefit and welfare of employees……” Carl and Ray suggested that this wording should be amended
in some way. After extensive discussion a sub committee to review this matter was established and includes Suzanne, Ray Muratori and Carol Voigt. No actual meeting date for the committee to meet was
established, as Carl felt that there was considerable time for further deliberation and no changes would be made prior to the spring.
• Actuarial Matters-Two former employees have requested the return of their Pension contributions: One is Anne Adams who worked for the Acton Public Library and the other, Joseph Mackin who was a Police
Officer for the Town of Old Saybrook. Both will receive their contributions plus interest.
• It has come to the attention of the Pension Board that one of the retirees who chose a reduced pension benefit under the Joint and Survivor clause has lost his wife and so according to the 2008 changes in the
pension plan when that occurs the benefit for the member can be resolved without a reduction. The pension plan states that if this occurs the contingent may request in writing to use the pop-up option. It
further states that this request must be made within 24 months of the spouse’s death. The Pension Board felt that the 24 months was too short for a grieving person to respond and after some discussion
made a motion to amend the Plan from 24 months to 60 months (5 years) to apply for the pop-up option. This motion was made by Stephen Sheehan and seconded by Ray Muratori. The motion passed
unanimously. Sharon will notify the retiree of his option.
• Board of Finance Meeting: The Pension Board will be meeting with the Board of Finance on November 20th. Eileen Torrenti, Gary Lehrman, Tom Forma, Ray Muratori, and Suzanne Taylor will be attending.
Carl encouraged the Board to give an overview of the function of the Board including what they do and the funding of the Pension Fund. There was some discussion on the contributions that the Town makes
to the Pension Fund. The contribution which had been at 6% for many years was raised to 6.25 % this fiscal year and will raise it to 6.5 % in FY 2013-14. Extensive discussion followed. Stephen Sheehan
suggested that the Board find other ways to invest money such as in local bond projects. More discussion followed.
New Business
The next meeting will be November 29, 2012 at 7:00 p.m. A motion was made to adjourn by Stephan Sheehan and seconded by Gary Lehrman. The meeting adjourned at 9:15 p.m.
Respectfully Submitted,
Sharon E. Migliaccio
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