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Plymouth Retirement Board

Plymouth Retirement Board Minutes October 29, 2009

Plymouth Retirement Board - Thursday, October 29, 20098:30 a.m. - Retirement Board Conference Room

Chairman Thomas Kelley called the meeting to order at 8:35 a.m. in the conference room of the Plymouth Retirement Office. Board members were present were Lynne Barrett, John Murphy & Shawn Duhamel. Richard Manfredi was absent. Debra Sullivan and Wendy Cherry of the Retirement Office were present, as was PREA President Marie Guidetti, PREA Vice-President Warren Ottino, Selectmen John Mahoney and Dale Webber of the Insurance Advisory Committee.

Section I: Regular Business – Regular Meeting

Minutes:

Minutes dated September 24, 2009: Regular Board Meeting

Motion to approve minutes made by Mr. Murphy; seconded by Ms. Barrett. Unanimously voted.

Warrant:

Warrant #8, dated August 31, 2009: $1,920,562.70 (Final – Trial Balance)

Warrant #9, dated September 30, 2009: $1,287,779.52 (Final – Trial Balance)

Warrant #10, dated October 31, 2009: $1,581,347.67 (Partial)

Warrant #11, dated November 30, 2009: $ 61,059.62 (Partial)

Motion to approve warrants made by Mr. Duhamel; seconded by Mr. Murphy. Unanimously voted.

Public Comment:

Marie Guidetti was present and introduced herself as the new President of PREA. Present with Ms. Guidetti was Warren Ottino, Vice-President of PREA. She told the Board that she looked forward to a continued relationship with the Retirement Board. Chairman Kelley welcomed Ms. Guidetti in her new role and thanked Claire Soares for her seven years service as former PREA President.

Section II: Solicitation & Correspondence:

Legal:

F. Steven Triffletti v. Town of Plymouth Retirement Board

DALA has sent the Notice of Receipt of Appeal for F. Steven Triffletti v. Town of Plymouth Retirement Board. At the Boards’ meeting of March 23, 2009, Mr. Triffletti was denied a buy back of prior Moderator service because he was not paid a salary for his position. Attorney Sacco told the Board that in his opinion, Mr. Triffletti’s appeal to DALA will not be successful, and in order to save the Board any future expense, he will ask for a summary ruling on this case.

Request for Records Regarding Employees Facing Criminal Charges:

Attorney Sacco told the Board that he has sent a second request to the Town Manager regarding information on terminated employees currently facing criminal charges. The Town’s counsel, Attorney David Jenkins, Kopelman & Paige, has contacted Attorney Sacco and has stated that he will promptly provide the necessary information/documents.

Ethics Test

Attorney Sacco told the Board that each Board & staff member is required to take an online ethics test, which will be recorded with the Town Clerk.

Pension Reform:

Mr. Duhamel told the Board that the Public Commission on Pension Reform was meeting and should have some decisions regarding the recent changes in the accidental disability law, due to the implementation of Chapter 21. He also said they will be voting on extending the current funding schedule by ten years, to 2040, along with a COLA extension. He did not expect any changes to the definition of regular compensation to come from this committee at this time.

PERAC Memos:

The Board took note of the following PERAC Memo’s:

PERAC Memo #36/2009: New Disability Pension Fraud Poster

PERAC Memo #37/2009: Withdrawal of Accumulated Total Deductions

PERAC Memo #38/2009: Appropriation Data Due October 31, 2009

PERAC Memo #39/2009: Tobacco Company List

PERAC Memo #40/2009: Investment Manager List

PERAC Memo #41/2009: Updated CD of PDF Fill-in Forms: Disability & General Membership

Investment Correspondence:

The Board received the following investment updates:

Capital Markets Lash Report – September 2009, from FIA

Templeton Quarterly Conference Call for 3^rd Quarter 2009

Wellington CIF Core Bond Series I portfolio update for September 2009

Westfield Capital 3^rd Quarter 2009 Large Cap Equity Investment Commentary

Internet Maintenance Proposal:

Clever Minds, Inc. has submitted a proposal for their services, which include internet connection troubleshooting, back-up strategies, individual PC examinations, and services are $3,840.00. Mrs. Sullivan told the Board that Clever Minds was recommended by Mr. Duhamel, whose organization also works with them. Mrs. Sullivan has been told by Clever Minds that they are contacting PERAC to assure that they are in compliance with new security regulations.

Motion to approve proposal by Clever Minds, Inc. made by Mr. Murphy; seconded by Mr. Duhamel. Unanimously approved.

Budget:

The Board reviewed calendar year 2010 Retirement System budget. Mrs. Sullivan told the Board that the only change to the budget they were given was a $5,000 addition into Service Contracts, if the Board votes to approve the Clever Minds proposal, which includes internet and software maintenance and recommendations. The Service Contract budget would be reduced, as Joseph Young, the current IT provider for the Retirement Office, would only be used on an as-needed basis.

Motion to approve calendar year 2010 budget as presented, plus and additional $5,000 for internet services to be provided by Clever Minds, Inc., made by Mr. Duhamel; seconded by Mr. Murphy. Unanimously voted.

Insurance Advisory Committee Request:

Dale Webber, Chairman of the Insurance Advisory Committee, was present and made a request to the Board for use of the Retirement Office Board room for the monthly IAC meetings. Meetings are held once per month, and will be scheduled for his normally scheduled day off as DPW Heavy Equipment Operator, which are Fridays. He also requested Susan Turner’s assistance with preparing the minutes of these monthly meetings. Ms. Turner is already scheduled to work in the Retirement Office on Fridays.

Motion #1 made by Ms. Barrett, to approve the use of the Retirement Office Board Room for monthly Insurance Advisory Committee meetings; seconded by Ms. Murphy. Unanimously approved.

Ms. Barrett expressed concern about Ms. Turner sitting in on the IAC meetings while she was scheduled to work in the Retirement Office. Attorney Sacco told the Board that due to ethics laws, he would recommend that the Board hold off on voting to approve Ms. Turner’s attendance at the IAC meetings. This could be considered a conflict of interest, as these meetings are not a primary responsibility of the Retirement Board, and therefore could create a conflict of interest if Ms. Turner attends these meetings while being paid by the Retirement Office. At that point, Mr. Webber asked the Board to re-consider more discussion on this matter at their November 30, 2009 meeting when more information is available.

Motion #2 made by Ms. Barrett stated if Ms. Turner was willing to do the IAC meeting minutes without pay, approval is granted; seconded by Mr. Murphy. Unanimously voted.

Portfolio Monitoring Services:

Berman DeValerio is a Boston-based portfolio monitoring firm that would like to present a proposal for services to the Board. They will be present at the Boards’ November 30, 2009 meeting.

Total Fund Investment Performance: 3^rd Quarter 2009:

Chris Kachmar, Senior Consultant & Chief Investment Officer of FIA, was present in place of Tony Tranghese to review the 3^rd quarter investment performance with the Board. Mr. Kachmar told the Board that the total fund increased from $84.3 million at the start to 3^rd quarter 2009, and finished at $100.2 million, an increase if 12.3%. Year-to-date, the fund is up by $18.5%.

As of September 30, 2009, fund asset allocations were as follows: short term cash .3.49%, Fixed Income 22.03%, Domestic Small-Mid & Large Cap Equity 40.01%, Foreign Equity 20.79%, Real Estate 6.97%, Private Equity 1.54%, and Alternative Investments 5.17%.

Fund asset allocations were as follows: Wellington CIF II Core Bond 16.24%, MacKay Shields 5.73%, S&P 500 Flagship Fund 4.81%, Wellington CIF Research Fund 7.63%, Boston Advisors 6.94%, Eaton Vance Large Cap Value 5.06%, Westfield Large Cap Growth 5.06%, Boston Trust 10.60%, Templeton Foreign Equity Series 20.79%, PRIT Core Real Estate 5.39%, Intercontinental Real Estate 1.57%, PRIM Alternative Investment Vintage Year 2006, .99%, PRIM Alternative Investment Vintage Year 2007 .42%, PRIM Alternative Investment Vintage Year 2008 .13%, PRIT Absolute Return Hedge Fund 5.17%. Cash 3.49%.

Wellington CIF Core Bond Series: (Fixed Income)

Mr. Kachmar told the Board that although Wellington has been on watch status, they have participated in recovery and have stayed in-line with the benchmark. This fund was valued at $16.2 million and represents 16.24% of assets. The quarter’s portfolio’s return of 7.2% out-performed Barclays Aggregate Index of 3.7%, as with the year-to-date return of 16.0% vs. 8.9. The 1-year return of 13.4% also out-performed Barclays Index of 10.6%.

MacKay Shields High Yield: (Domestic Fixed Income)

Valued at $5.7 million and represents 5.73% of assets. The portfolio’s 3^rd quarter return of 11.1% slightly under-performed Credit Suisse High Yield Index return of 14.1%, the year-to-date with 36.0% vs. 45.2%, and also under-performed the 1- year return with 11.6% vs. 17.9%.

State Street Global Advisory Flagship S&P 500 Index: (Domestic Equity)

Valued at $3.4 million and represents 3.48% of assets. The portfolio’s 3^rd quarter return of 15.6% was in line with the S&P 500 Index’s return of 15.6%, as was the year-to-date return of 19.3% vs. 19.3%. The 1-year return also stayed in line with the benchmark with –6.8% vs. –6.9%.

Boston Advisors: (Domestic Equity)

Valued at $6.9 million and represents 6.94% of assets. During the 3rd^d quarter of 2009, the portfolio’s return of 13.4% under-performed the S&P 500 Index’s return of 15.6%, as did the year-to-date return of 15.9% vs. 19.3. The 1-year return under-performed with –8.6% vs. -6.9%.

Wellington CIF Research Equity: (Domestic Equity)

This fund was valued at $7.6million and represents 7.63% of assets. The portfolio’s 3^rd quarter return of 16.0% slightly out-performed S&P 500 Index Fund of 15.6%. The year-to-date return significantly out-performed with 26.0% vs. 19.3%, along with the 1-year return of –3.5% vs.

–6.9%.

Eaton Vance Large Cap Value Fund: (Domestic Equity)

Valued at $5 million and represents 5.06% of assets. The portfolio’s 3^rd quarter return of 15.2% under-performed the Russell 1000 Value Index’s return of 18.2%, and also the year-to-date return of 10.1% vs. 14.8%. No 1-year return information since the inception date for this fund is November 1, 2008.

Westfield Large Cap Growth Fund: (Domestic Equity)

Valued at $5 million and represents 5.06% of assets. The portfolio’s 3^rd quarter return of 13.7% under-performed Russell 1000 Growth Index’s return of 14.0%, as did the year-to-date return with 25.9% vs. 27.1%. No 1-year return information since the inception date for this fund is November 1, 2008.

Boston Trust Small Cap Core Equity Fund: (Small-Mid Equity)

Valued at $10.6 million and represents 10.6% of total assets. Boston Trust’s Small Cape Core Equity portfolio returned 16.3% in the 3^rd quarter of 2009 and under-performed the Russell 2000 Index of 22.8%, and also trailed in the year-to-date return with 22.5% vs. 36.0%.

Templeton Foreign Equity Series: (Foreign Equity)

Valued at $20.8 million and represents 20.79% of total assets. The portfolio’s return of 21.3% out-performed the MSCI EAFE Net return of 19.5% during the 3rd quarter of 2009, and also out-performed the year-to-date return with 31.8% vs. 29.0%. The 1-year return out-performed with 5.2% vs. 3.2%.

Intercontinental Real Estate: (Real Estate)

Valued at $1.5 million and represents 1.57% of assets. In the 3^rd quarter of 2009, the fund return of -0.6% out-performed the NCREIF Property Index of -3.3%, but out-performed the year-to-date return with –4.1% vs. –15.1%.

PRIT Core Real Estate Fund: (Real Estate)

Valued at $5.4 million and represents 5.39% of assets. This fund had a return of 3.1% vs. the NCREIF Property Index return of –0.2%, and also out-performed the year-to-date with

-5.6% vs. –10.6%.

PRIT Absolute Return: (Hedge Funds)

Valued at $5.1 million and represents 5.17% of assets. The portfolio’s 3rd quarter 2009 return out-performed the benchmark 90-day T Bill + 5% return with 4.4% vs. 1.3%, and also the year-to-date with 9.9% vs. 3.9%, but under-performed in 1-year return with –0.5% vs. 5.4%.

PRIT Vintage 2006: (Private Equity)

Valued at $992 thousand and represents .99% of assets. This portfolio under-performed the S&P 500 + 5% with 1.8% vs. 17.0% and also the year-to-date with –20.4% vs. –2.3%.

PRIT Vintage 2007: (Private Equity)

Valued at $420 thousand and represents 0.42% of assets. The portfolio’s return of –2.4% under-performed the Index benchmark of 17.0%, and also under-performed the year-to-date with –12.0% vs. 23.7%.

PRIT Vintage 2008: (Private Equity)

Valued at $132 thousand and represents 0.13% of assets. The portfolio’s return of 3.1% under-performed benchmark of 17.0% and also the year-to-date return with –22.7% vs. 23.7%.

Annual Manager Reviews:

Wellington Trust Company:

Jerry Crean, Michael Elwood & Thomas Coleman were present from Wellington Management to present to the Board investment performance through September 30, 2009.

Mr. Crean told the Board that Wellington is a private partnership, fully owned and managed by 107 partners, with $506 billion firm-wide assets under management.

Total market value for the CIF Research Equity Fund & CIF II Core Bond Fund is $23.9 million. Mr. Crean told the Board that the PPIP performance will be included with the 4^th quarter 2009 investment review. To-date, Wellington has called 20% of the commitment for this fund.

CIF II Core Bond Fund Review:

Thomas Coleman told the Board that the Core Bond Fund, as of September 30, 2009, was significantly leading the LB Aggregate benchmark with 16.04% vs. 5.72. The 1-year also out-performed with 13.42% vs. 10.56%.

Mr. Coleman told the Board that Wellington’s believes that the US economy is recovering and the interest policy rate low.

CIF Research Equity Fund:

Mike Elwood told the Board that the Research Equity Fund, as of September 30, 2009, was leading the S&P 500 benchmark with 26.0% vs. 19.3%. The 1-year also out-performed with -3.5% vs. –6.9%.

Mr. Elwood told the Board that the Energy sector has been the biggest performer in 2009, but ironically the worst performer during 2008. Also leading performers in 2009 were the Health Care and Financial sectors. The three worst performing sectors for 2009 have been Information Technology, Utilities and Industrials.

McKay Shields Performance Review:

James Wolf and Jennifer Beatty were present from McKay Shields to discuss performance through September 30, 2009. Ms. Beatty told the Board that McKay Shields currently has 57 professionals & 137 employees, and has also added a municipal analyst team during 2009.

Mr. Wolf reviewed 2009 performance with the Board. For the month of September 2009, the fund under-performed the Credit Suisse High Yield Index benchmark with 3.8% vs. 5.6%. Year- to-date as of September 30, 2009 also under-performed with 36.0% vs. 45.2%, and also the 1-year with 11.6% vs. 17.9%.

Mr. Wolf told the Board that the risk model is evaluated daily for changes. He also told the Board that he does not see any significant improvement in the economy for 2010.

Section III: Membership

New Hires

Town:

9% Roberts, Michelle, Group 1, Health Director

Perm. Full-time, $1,264.12 weekly

Start Date: 10/01/2009

School:

9% Tamulionis, Penelope, Group 1, Room Coordinator

Perm. Full-time, $1,491.91 bi-weekly

Start Date: 09/14/2009

9% Murphy, Michael, Group 1, Special Needs Aide

Perm. Full-time, $784.64 bi-weekly

Start Date: 09/28/2009

Motion to approve new hires made by Mr. Murphy; seconded by Mr. Duhamel. Unanimously approved.

Buy Backs:

School:

Linda Bacci, former Group 1, part-time School Dept Aide & Noon Supervisor, is now a member of Plymouth County Retirement Association, and has requested a buy back of service prior to membership for the period of January 6, 1986 through September 24, 1987. Will the Board vote to approve nine (9) months liability for Ms. Bacci?

Susan Smith, School Department Secretary, worked at Plymouth North High School as the Data Processing Secretary prior to becoming a member of the Plymouth Retirement System. Ms. Smith has requested to buy back this service for the period of 2/22/2007 through 9/9/2007. Based on the Board’s Supplemental Regulation re: Creditable Service dated 8/22/2002, Ms. Smith would be entitled to buy back 4.852 months of creditable service. Will the Board vote to approve five (5) months of liability for Ms. Smith.

Nancy Tripp, Group 1 Secretary, currently employed by the Town of Plymouth School Department, has requested a buy back of service prior to membership of eleven (11) months for the period of October 1981 through December 1986 (part-time, pro-rated service). She has requested a lump sum repayment of these deductions. Will the Board vote to approve this buy back?

Motion to approve buy backs made by Mr. Duhamel; seconded by Mr. Murphy. Unanimously approved.

Refunds:

School:

Hillman, Susan, Group 1, Paraprofessional

4 years, 9 months service (9/16/03 – 6/18/08)

Total distribution, including FWT: $4,416.79

Motion to approve refunds made by Mr. Duhamel; seconded by Mr. Murphy. Unanimously approved.

Retirements:

Town:

Dupuis, Arthur, Group 1, Heavy Equipment Operator

23 years, 1 month service (9/30/86 – 11/06/09)

Superannuation retirement, option c

Retirement date: November 6, 2009

Motion to approve retirement made by Mr. Duhamel; seconded by Ms. Barrett. Unanimously approved.

Transfers:

Town:

Massard, Valerie, Group 1, Town Planner

7 years, 6 months service (3/1/02 – 9/2/09)

Total transfer: $44,141.02

Transferring to: State Board of Retirement

School:

Merrick, Judith, Group 1, Special Needs Aide

4 years, 8 months service (10/31/94 – 6/30/99)

Total transfer: $2,704.58

Transferring to: Massachusetts Teachers’ Retirement Board

Motion to approve transfers made by Mr. Duhamel; seconded by Ms. Barrett. Unanimously approved.

Next Meeting: Monday, November 30, 2009 at 8:30 a.m.

Motion to adjourn made by Mr. Murphy at 11:17 a.m.; seconded by Mr. Duhamel. Unanimously approved.

Respectfully Submitted,

Wendy Cherry

The Town of Plymouth Retirement Board unanimously voted to approve these minutes at their meeting held on Monday, November 30, 2009. Original signed minutes are available at the Retirement Office, 10 Cordage Park Circle, Suite 240, Plymouth MA.