OLD SAYBROOK PENSION BENEFITS BOARD
Thursday, November 29, 2012
Town Hall Conference Room at 7:00 p.m.
Present: Suzanne Taylor, Gary Lehrman, Ray Muratori and Stephen Sheehan
Carol Voight arrived at 7:15 p.m.
Absent: Eileen Torrenti, Sharon Migliaccio and First Selectman, Carl Fortuna.
Also Present: Tom Forma, Merrill Lynch and Stella Beaudoin, Recording Clerk.
The meeting of the Old Saybrook Pension and Benefits Board was called to order at 7:04 pm by the Chair, Suzanne Taylor.
The Minutes of the October 25, 2012 meeting were reviewed and the following changes were noted:
• Page 1, under Chair’s Report; “Several informational documents were distributed”. The attachment “List of Articles to be presented on October 24, 2012 at Pension and Benefits Board Meeting, which was not included in the October 25, 2012 Minutes will be made a part of the record.
• Page 2, Old Business; A reference is made to the ICMA report. The ICMA report will be made a part of the record to the October 25, 2012 Minutes.
Motion made by Gary Lehrman to approve the Minutes of the October 25, 2012 meeting, as amended. Motion seconded by Ray Muratori and passed unanimously 5/0/0.
Chair’s Report
1) The CPPF Fall Conference was postponed due to Storm Sandy. A pre-payment has been made for this conference and members agreed that the credit will be utilized for the upcoming Spring 2013 CPPF Conference.
Motion by Ray Muratori to use the pre-paid credit toward the CPPF Spring 2013 Conference. Motion seconded by Gary Lehrman and passed unanimously 5/0/0.
2) Other
Dr. Taylor reported on various Social Security changes noting, among others, recipients will receive a 1.7 wage increase in 2013.
Correspondence:
• Fire Chief JT Dunn noted that Tony Cronin has actually served an additional year and asked that this correction be made for our records and with the actuary. He also reported that disabled fire fighter, Guy Wells mobility is progressing with the use of his prosthetic legs making this possible.
• Discussion re changes to the Pension Board as specified in the Charter were held and much comment was made of the possibility of adding additional members. The matter will be reviewed further with a soon to be held meeting of the Pension Board’s Charter Review sub Committee.
Investment Reports
1) Tom Forma, Merrill Lynch, presented the monthly investment report which was reviewed by the committee. A new issue concerning the inability of the brokerage firm of Bank of America to continue to be used as a checking account or to manage cash accounts only. Therefore it is necessary for our town to utilize an independent bank. And after the end of December 2012 all monies used for retirees payroll will need to be with someone other that Merrill Lynch.
2) In the case of the approximately $395,000.00 that has been managed as a separate cash account but resulting from the profits of the Blue Cross Blue Shield reserve account this too can no longer be under Merrill Lynch as an investment account. Discussion regarding investment of this cash reserve ensued.
Motion made by Steve Sheehan and seconded by Ray Muratori to request these funds be held in the health care reserve fund thus improving the significant underfunding of our OPEB Liabilities. Motion passed unanimously 5/0/0. Steve Sheehan agreed to discuss this issue further with first selectman Carl Fortuna.
3) Sub Committee on Investments
Mr. Forma commented on the selection of replacement for Invesco International Value Management. Mr. Forma reported that the Sub Committee discussed a 28-page report which he authored, comparing 5 candidates for the International Portfolio Management Service to replace the current international equity manager, Invesco International Value. The portfolio management candidate that exhibits the most consistently superior performance, the best down-market capture ratio, the best in one of two down years (2011), the best 3 year and 5-year performance, second in one year performance, was Invesco International Growth. Mr. Forma stated that Invesco has grown as a company by acquiring other mutual fund companies. The Invesco Growth Team is in Texas and was with AIM Mutual funds before they were acquired. Mr. Forma commented on
the up and down market capture ratios and noted that these are simply percentages of what has occurred in the market at certain periods. It was reported that the committee decided that Invesco Growth reflected a consistent, positive performance and recommended Invesco International Growth to replace Invesco International Value. There is no relationship between the two groups.
Motion to follow the Sub Committee’s advice to hire Invesco International Growth was made by Gary Lehrman and seconded by Ray Muratori, passed unanimously 5/0/0.
Old Business
1) ICMA Updates
Mr. Lehrman reported that he spoke with Mark Lasyone who is willing to do the marketing for the 457 Plan for employees in the second week of December, with a follow up marketing in January 2013. Mr. Lasyone will explain the Plan and the benefits. Mr. Lehrman stated that the police department would also benefit from a presentation. Members discussed various ways to disseminate this information to employees. Mr. Lehrman will contact First Selectman Fortuna to discuss the 457 marketing strategy.
2) Health Insurance Updates
Dr. Taylor noted that as per Brown and Brown Insurance, employers are obligated to provide a summary of benefits on the first day of each enrollment period. As such, a summary of benefits and coverage should soon be available to town employees.
3) Charter Revision and status of Sub Committee Work
Dr. Taylor reported that she, Ms. Voight and Mr. Muratori will work on the Charter Revision sometime in December with a date yet to be determined. Mr. Sheehan will also assist where needed.
4) Actuarial Matters
Dr. Taylor reported that there has been an indication of a refund of contribution due to a cessation of employment.
5) Status of Reversal of Joint and Survivor Option
A letter was received regarding Robert Kelly, a retiree in the Town of Old Saybrook’s Pension Plan whose spouse died in 2006. Under the “pop up’ feature, adopted in the plan changes of 2008, if the retiree’s spouse predeceases the retiree, the monthly benefit increases to the amount that would have been payable under the Life Annuity option. Further discussion of the nature of the problem ensued and a letter from the actuary with a recommendation was also considered.
Motion made by Ray Murartori to follow the advice of Steve A. Lemanski, FSA, which is, that it would not be unreasonable to provide the additional “pop up’ benefit to Mr. Kelly, retroactive to January 1, 2008 for a total cumulative, payable, retroactive benefit equaling $1,824.60. Motion seconded by Steve Sheehan and passed unanimously 5/0/0.
6) Result of Board of Finance Meeting
7)Other
• No report on the job description of the Pension Board Administrator.
• The questions of there being a payable pension for the recent retiree from the library, Ann Adams, was brought up. No answer was available and further research will be undertaken.
New Business
The next regularly scheduled meeting is set for January 24, 2013.
Motion made by Steve Sheehan to adjourn the November 29, 2012 Pension Benefits Board Meeting at 8:50p.m. Motion seconded by Gary Lehrman and passed unanimously 5/0/0.
Respectfully submitted,
Stella Beaudoin
Recording Clerk
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