Old Saybrook Pension and Benefits Board February 27, 2014 Meeting: Minutes
Members Present: Suzanne Taylor, Ray Muratori, Gary Lehrman, Carl Fortuna and Carol Voigt
Absent: Eileen Torrenti and Steven Sheehan
Others: Kevin Nichols of Merrill Lynch, Paul Citarell of John Hancock, Sharon Migliaccio and Maureen Reilley
The meeting was called to order at 7:03 p.m. introductions were made around the room and guests welcomed.
Chair’s Report
Suzanne gave a brief synopsis of the Congressional Proposal on Universal Pension. She also read from some articles regarding a proposal by Senator Harkin and another regarding Rhode Islands’ mediated pension settlement.
Suzanne notified the Secretary that any vote that is taken at the Pension and Benefits Board Meeting where a motion was made must be recorded within 48 hours. Suzanne also noted that we were able to change the meeting date for the June meeting with the Town Clerk. The meeting will be held on June 26, 2014.
Gary Lehrman moved to accept the minutes of the November 21, 2013 meeting, seconded by Ray Muratori and unanimously approved. Ray Muratori moved to accept the minutes of the January 23, 2014 meeting, seconded by Gary Lehrman and unanimously approved.
Recent Retirements: Suzanne stated that Vicky Duffy’s application was signed and Sgt.Donald Hall’s retirement was set for April 1, 2014. Sharon Migliaccio will send cards congratulating both of them on their Retirement. Also, a retired member of the Fire Department is entitled to begin receiving his original full pension back to June 1st, due to the death of his spouse.
An invitation was extended to board members by Kevin Nichols to attend a special seminar and dinner given by John Hancock’s portfolio manager in Mystic. Details were given to Suzanne and she shared them with the board noting that should anyone choose to attend, they must pay for their own meal to be totally ethical.
Financial Reports
Paul Citarell of John Hancock handed out an evaluation of John Hancock by Merrill Lynch. In 2013 they were up 33.5%. For the year, they surpassed the Market and for the 7th year in a row they outpaced the benchmark, S&P 500. Suzanne requested that a copy of the handout be mailed to Carol who was present via speakerphone. Paul reviewed the Top 10 holdings as of yearend 2013. Noted was that McDonald’s Corporation was just added to the Equity holdings. Suzanne pointed out since the end of June, the board has hired 3 new Investment Managers for a total of 6. John Hancock’s fiscal year ending (through February 21, 2014) is up 18.05%. The board asked John Hancock to come back in a year.
Merrill Lynch Report: Kevin Nichols presented the board with an overview of all our investments. Beginning with Health Care, as of February 21, 2014 there is $1,007,672 in the fund with a cumulative growth of $326,669. Year to date as of January 31, 2014 is -1.11% with the fiscal year up 5.42%. Stocks are doing a lot better than the bonds. Moving on to the Pension funds, as of February 21, 2014 there is $18,867,593 in the Pension fund with a cumulative growth of $8,535,987.
Suzanne asked about the London Company. Kevin reported they are up 15.63% for the fiscal year. Ray asked Suzanne if it was the rationale of the holdings that was of concern which led to a discussion around the Top Ten holdings. Ray asked Kevin what percent we have allocated to London Company. Kevin responded that it is 9.64%. Carl asked if the Top Ten holdings in the Pension fund are all in which Kevin answered yes. Kevin pointed out that cash allocation is $592,904.
Carl asked Kevin if Bank of America is getting out of the pension business as a colleague in another town mentioned receiving a letter to that effect. Kevin assured the board that this was a different arm of BOA and that the Merrill Lynch part that existed prior to the BOA takeover is still independent and in business. Suzanne asked Kevin to look into it and follow up with the board.
Suzanne noted that Neuberger will be coming to the meeting in March.
Old Business
A discussion of the budget ensued and the amount for the Board in the budget has been reduced slightly and should not seriously affect our performance. She inquired if there would be enough money in the budget for next year to do the study for an alternative pension proposal. Carl stated that he just couldn’t budget it for this year but would be able to look at it again in 6 months. In addition, Suzanne will sit down with Lisa or Carl to go over the budget.
Suzanne reported on the progress of updating the Fire Department Pension Plan. She gave special kudos to Chief Dunn for all his help. She noted that they hope to have the updated fire plan revisions completed by next month for further discussion by the board.
The 457 Plan
Gary revisited his ICMA report from the January meeting as he was asked to provide another copy of the list of Companies from the fund performance of 2013. Gary provided the board with a new copy listing all the Companies. Suzanne asked him if he is comfortable with it. Gary responded that he did perform an analysis and yes, he is very happy with it. In addition, he mentioned that he called Laura with ICMA to see if she can meet with the plan members to discuss the 457 plan. She apparently is booked through March. Suzanne also inquired about the Police meeting. Carl will email both Laura and Chief Spera to have a couple meetings scheduled in 15 minute segments. A copy of the list of Companies from the 2013 fund performance is attached.
Ray Muratori gave his report on the Freedom of Information Act Workshop he attended on January 30, 2014. Suzanne had a prior question to Ray about Executive Sessions which Ray noted was addressed on the second page of his handout. He listed 5 reasons to call an Executive Session. It was noted that there is nothing requiring the board to place an item on the Agenda ahead of time. The requirements were addressed in the handout Ray presented. Suzanne thanked Ray for attending the Workshop. A copy of the handout he provided is attached.
There being no further business Gary Lehrman made a motion to adjourn, which was seconded by Ray Muratori, all approved. The meeting ended at 8:35p.m.
Minutes submitted by Maureen Reilley
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