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OLD SAYBROOK PENSION BENEFITS BOARD
Thursday, April 25, 2013
Town Hall Conference Room at 7:00 p.m.
Present: Suzanne Taylor, Steve Sheehan, Gary Lehrman, Carol Voigt
Also Present: Sharon Migliaccio, Tom Forma– Merrill Lynch, J. T. Dunn, Joseph Johnson – OS Fire Department, Paul Cidarell – John Hancock, Chris Quinson – Invesco, and Kathleen Marshall – Town employee
The meeting of the Old Saybrook Pension and Benefits Board was called to order at 7:00 p.m. by the Chair, Suzanne Taylor She welcomed the Board and all present to the Board meeting.
The Minutes of the March meeting were reviewed and after some discussion the minutes were accepted as presented.
Chair’s Report:
- Connecticut Public Pension Forum – There will be a meeting of the CPPF on May 15, 2013 in Cromwell. Some Board members are already registered due to the October meeting being cancelled. Suzanne, Carol, Gary, Ray, and Sharon will attend.
- Actuarial Invoice – An invoice was received from Milliman for $15,555.00 for the Actuarial Valuation and Benefit Statements. The Fire Department and Selectmen have agreed to pay Milliman $3,287.50 for cost impact of proposed benefit increase for a retired firefighter and possible plan changes. An invoice had been received earlier for the total amount of $18,842.50. A motion was made by Carol Voigt and seconded by Gary Lehrman to pay the $15,555 to Milliman. After some discussion the motion was unanimously accepted.
Suzanne recommended that the board members read Alicia H. Munnell’s State and Local Pensions: What Now?, as it is an unbiased statistical analysis of today’s pension problems and suggests solutions.
Gary said he would borrow the board’s copy of the book.
Investment Reports
- Invesco – Chris Quinson, Regional Vice President of the National Wirehouse Division of Invesco gave an overview of the Town’s funds with Invesco. He talked of emerging markets and the impact to the market; Invesco’s strategy in purchasing stocks; and volatility. There was some discussion after which the board thanked Mr. Quinson for his presentation.
- John Hancock – Paul Citarell, Senior Managing Director of John Hancock Asset Management gave an overview of John Hancock. He talked about their portfolio management team, philosophy, and explained the cash flow flywheel which gives the ability to generate sustainable cash flow. Paul continued explaining the seven steps in the investment process: Competitive Advantage Validation; Growth Drivers; Internal Industry Analysis; Financial Statement Analysis; Management Team Assessment; Range of Value Analysis; and Stock Specific Risk Considerations. These seven steps are used in the selection of stocks John Hancock invests in. There were some questions and discussion after which the board thanked Paul for his presentation.
- Merrill Lynch - Tom Forma of Merrill Lynch reported on the status of the Town’s pension portfolio. There is $17,027,318 in the Town’s plan and $942,664 in the Health Care plan as of April 25, 2013. Tom told the Board we have 68 percent in Equities, 28 percent in Fixed Income and 4 percent in Cash. There is 46% in Large Cap Growth, 28% in Large Cap Value, 11% in SMID and 17 percent in International. Year to Date the performance is at 4.26 percent. For the Fiscal Year the performance is at 11.91 percent. He went on to talk about the performance of our managers.
Alliance has a year to date of 4.18 percent and a fiscal year of 16.14 percent.
Neuberger Berman has YTD of .23 percent and a FY of 2.28 percent. Invesco Int’l has an YTD of 2.02 percent and a FY of 16.50 percent. Eaton Vance has YTD of 10.80 percent and a FY of 18.87 percent. There was some discussion about the market and several questions.
Tom is still concerned with the performance of the bond market. After some discussion the Board thanked Tom for his presentation.
- Consideration of Additional Money Manager: John Hancock was selected for consideration as the additional money manager. The board listened to Paul Citerell of John Hancock and felt it was a sound company. After some discussion a motion was made by Steve Sheehan and seconded by Gary Lehrman to select John Hancock as the Town’s additional manager and take the holdings with Eaton Vance and Alliance and divide it equally among the three managers. After some discussion the motion was unanimously accepted.
Old Business
- Cost of Living Adjustment and Increase to Years of Service – Suzanne read an email from Steve Lemanski explaining the cost of implementing the COLA. JT Dunn explained the various graphic options on what increasing years of service and the benefit per year would cost per year. Currently they are at 25 years, $215 per year with a cost of 74,213. It has been over ten year since the Fire Company has received a COLA increase. The option to increase years of service to 30 at a per year credit of $270 would cost an additional $20,500 annually. After reviewing all the options Steve Sheehan made a motion to recommend to the Board of Selectmen to increase the allowable number of years of service for credit from the current 25 years to 30 years and to also increase the amount of credit per year to $270
from the current $215 per year effective July 1, 2014. The motion was seconded by Gary Lehrman and after more discussion the motion was unanimously accepted.
Other – The Fire Department Plan Document needs to be revised, not only for these new changes but for several other corrections that need remedying. JT will work on it with Suzanne’s help and submit it to the Board at the next meeting.
- Police Department Matters
- Suzanne Taylor, Ray Muratori, Steve Sheehan, Sharon Migliaccio, and Carl Fortuna met April 18th to discuss the matter of hiring a police retiree as the SRO. Chief Spera, unable to attend tonight’s meeting and at the request of the First Selectman, explained the situation in detail to Suzanne and the summary of their conversation, which was presented to the Board, is attached. The Board still needs the language of the Pension Document to be analyzed by Attorney McHale. That matter is still pending and under review by Attorney McHale. Some discussion ensued, but no action was taken at this time..
- The status of Health Insurance Coverage – Very little is happening for change at this time, even though the Police contract is due to expire June 30, 2013, while other contracts continue until future years, except for the dispatchers..
- ICMA update – The representative from ICMA, Laura Hancock, recently met with several employees and two new employees have enrolled. The board feels she should have notified them prior to solidifying the meeting dates. It would seem she know that Gary Lehrman is the Board contact. He will contact her for further input.
New Business
Sharon announced that two employees of the Board of Education have applied for retirement.
The next meeting will be May 23, 2013 at 7:00 p.m. A motion was made to adjourn by Steven Sheehan. The meeting adjourned at 9:40 p.m.
Respectfully Submitted, Sharon E. Migliaccio
Attachment to the April 25, 2013 Pension Board minutes
Summary of Data regarding definition of full time employment for SRO (School Resource Officers)
Currently there are 2 full time police officers and one part-time officer:
At High School is Patrolman Ryan Walsh.
At the Elementary School is Patrolman Jim Kiako.
At the Middle School is retired officer Tim McDonald who only works there when school is in session.
He is paid on step 3 of the 5 steps for patrolmen, $27 an hour and if he work’s more than 40 hours in a week state law requires he be paid overtime. No additional fringe benefits are granted to him and he does not pay into the pension fund. If there is an emergency then he would be called into duty for that.
Next fall it is planned to have there be just one full-time SRO, probably Jim Kiako and 2 part-time SROs.
The steps for police pay are 5 steps as a patrolman,
3 steps for Sgt
3 steps for Lt
And so on for Chief.
Regular pay for a Lt is $39.01
The only reason for overtime was the necessity of additional training in the first week for McDonald.
One additional benefit is that sick time is allowed after working 580 hours in one year due to state and federal law.
So the standard work week as a part-time SRO is 35 hours.
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