MINUTES
SPECIAL JOINT MEETING OF THE BRD. OF TRUSTEES OF THE CITY EMPLOYEES RETIREMENT FUND & THE BRD. OF TRUSTEES OF THE POLICE & FIREMEN PENSION FUND
March 2, 2011
A SPECIAL JOINT MEETING of the Board of Trustees of the Police & Firemen Pension Fund and the Board of Trustees of the City Employees Retirement Fund was held on Wednesday, March 2, 2011, in the City Hall Auditorium.
Those in attendance included Mayor Ryan J. Bingham, Treasurer Arthur Mattiello, Comptroller Alice Proulx, members of the Board of Trustees of the City Employees Retirement Fund Gregg Cogswell, Elinor Carbone, Gerald Zordan, Delisse Locher, Gail Gillette, members of the Board of Trustees of the Police & Firemen Pension Fund James Potter, Christopher Cook, Angelo LaMonica, Douglas Benedetto, Richard Zaharek, Darlene Battle, Officer Robert Shopey, Lt. Michael Emanuel and Lt. Kevin Hayes.
Also present were Gregory Stump of EFI Actuaries and Anthony Tranghese of Fiduciary Investment Advisors, LLC.
Members Paul Samele, Marie Soliani, Drake Waldron, Nancy Michna, Raymond Drew, David Prahm, Mark Kugler, David Kissko, Angelo Alduini, and Fire Fighter Edward Delisle were absent.
Mayor Bingham called the meeting to order at 6:30 p.m.
Presentation:
Mr. Stump reviewed the actuarial report, saying EFI has a two year evaluation cycle, collecting data on everyone in the plan, as well as an annual asset evaluation so they can know how the funds’ investments have performed.
In the City Employee’s Retirement plan, between 2008 and 2010, an increase was seen in cost due to investment experience. He said the total actuarial accrued liability is looked at, which represents the present value you expect to be paid based on the service that’s already been rendered.
Officer Shopey asked about the Fire Fighters lack of contributions in the future, while the Police Officers will continue to contribute. Mr. Stump said the benefits are calculated for members’ entire life, and the employer portion of the cost is spread it out evenly over time.
He said an evaluation should be done to identify the risk associated with an increased number of retirees.
In the near future an increase of cost can be expected, he said and pointed out the unfunded portion of the plan’s liability which needs asset smoothing to keep contributions from going up and down drastically.
Mr. Stump contrasted the two plans saying the Police & Firemen’s assets are farther away from where they should be at 65 million on July 1, 2010. He noted the rest of the report including plan provisions, who the people are who collect benefits, actuarial assumptions, the asset section, historical information on returns and inflations, details of the calculations and the required disclosures.
Mr. Tranghese said the assumed rate of return is 8% and consistent with many other municipalities. As fire fighters roll out of the plan, the asset allocations will be reviewed.
Lt. Hayes asked for a more detailed report on the next two or three years’ projections. Mr. Stump said it would be good to understand how a near term gain or loss might affect the funding. He said it would be very rare to see that 8% and the current best practice is to use a discount rate.
Lt. Emanuel asked the Board to consider giving FIA some autonomy to deal with volatile situations if they need to act, so they don’t need to wait for the Board to meet to make those decisions. He asked if the portfolio is diversified enough to accept the hits and the gains. Mr. Tranghese said the portfolio is diversified and they do have the ability to reach out to the Board when necessary. He added that there are advantages and disadvantages that need to be weighed like missing an upturn or exaggerating a downturn.
Mr. Mattiello offered to work with members to develop some guidelines and policies for the Pension Boards.
ADJOURNMENT
On a motion by Councilor Zordan, seconded by Commissioner Benedetto, the Boards voted unanimously to adjourn at 6:59 p.m.
ATTEST: Joseph L. Quartiero, CMC
City Clerk
Respectfully Submitted,
Carol L. Anderson, CCTC
Asst. City Clerk
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