Friday, October 22, 2010 8:30 a.m.
Retirement Board Conference Room
Chairman Thomas Kelley called the meeting to order at 8:30 a.m. in the conference room of the Plymouth Retirement Office. Present Board members were Thomas Kelley, Lynne Barrett and Shawn Duhamel. Richard Manfredi and David Malaguti were absent. Also present were Debra Sullivan, Wendy Cherry, and Atty. Michael Sacco. There was no audience.
Section I: Regular Business – Regular Meeting
Minutes:
Minutes of September 24, 2010: Regular Board Meeting
Minutes of September 24, 2010: Executive Session
Motion to approve meeting minutes made by Ms. Barrett; seconded by Mr. Kelley. Unanimously voted.
Note: Because Mr. Duhamel was not present at the Board's September 24, 2010 meeting, he was not able to vote to approve the minutes. Mr. Kelley temporarily stepped down as Chairman to second the vote to approve the minutes.
Warrants:
Warrant dated August 31, 2010 & Trial Balance: $5,107,191.35 (Final)
Warrant dated September 30, 2010: $9,681,663.88 (Partial)
Warrant dated October 31, 2010: $ 142,481.48 (Partial)
Warrant dated November 1, 2010: $ 3,545.76 (Partial)
Motion to approve warrants made by Ms. Barrett; seconded by Mr. Duhamel. Unanimously voted.
Public Comment: None
Section II: Solicitation & Correspondence:
PERAC Memo's:
The Board received the following PERAC Memo's:
PERAC MEMO #35/2010: Appropriation Data Due October 31, 2010
PERAC MEMO #36/2010: Proposed Amendment to Internal Revenue Code Compliance Provisions
Budget – Calendar Year 2011:
Calendar year 2011 Budget for final review and approval.
Motion to approve calendar year 2011 budget made by Ms. Barrett; seconded by Mr. Duhamel. Unanimously voted.
Investment Correspondence:
The Board received the following investment correspondence:
• State Street Global Advisors: Performance Analysis for September 30, 2010
• PERAC Financial Bulletin: Third Quarter 2010
• Westfield Capital: Financial Statements for September 30, 2010
• Westfield Capital: Investment Commentary for September 2010
• Wellington Trust CIF Research Equity Fund – Performance for 3rd Qtr 2010
• Welling Trust CIF II Core Bond – Performance for 3rd Qtr 2010
• State Street Global Advisors - Performance for 3rd Qtr 2010 & Forecast
Third Party Monitoring:
The Board received the Robbins, Geller, Rudman & Dowd: December 31, 2010 Class Action Settlements Report.
Section III: Membership:
New Hires:
School:
9% Ares-Hanson, Monica, Group 1, Planetarium Instructor
Perm. Full-time, $1,204.55 bi-weekly
Start Date: 9/13/2010
9% Pinto, Tyler J., Group 1, Second Shift Custodian
Perm. Full-time, $1,332.58 bi-weekly
Start Date: 9/27/10
9% Ferland, Alex F., Group 1, Custodian
Perm. Full-time, $1,332.58 bi-weekly
Start Date: 9/27/10
Motion to approve new hires made by Ms. Barrett; seconded by Mr. Duhamel. Unanimously voted.
Rollovers:
Town:
Eufrazio, Jean M., Group1, Procurement Admin. Asst. 4 years, 7 months creditable service (8/10/04-5/28/08)
Rollover Amount: $13,585.33
Motion to approve rollover made by Ms. Barrett; seconded by Mr. Duhamel. Unanimously voted.
Retirements:
Town:
Wall, Allan C, Group 4, Fire Fighter
33 years, 4 month service (6/30/77 – 11/1/10)
Superannution retirement, option c
Retirement Date: November 1, 2010
Motion to approve retirement made by Mr. Duhamel; seconded by Ms. Barrett. Unanimously voted.
Section IV: Executive Session:
Pursuant to Chapter 30A, Section 21B, Board to enter into executive session to hold a Section 15 evidentiary hearing.
Roll call vote to enter into executive session at 9:00 a.m.:
Mr. Kelley yes
Ms. Barrett yes
Mr. Duhamel yes
Board will re-enter into the regular meeting following executive session.
Motion made to adjourn executive session and re-enter into the regular meeting at 9:50 a.m. by
roll-call vote:
Mr. Kelley yes
Mr. Duhamel yes
Ms. Barrett yes
Section V: Board Policy & Office Issues
Survivor Allowance Increase:
Board to discuss the increase of survivor allowances, as stated under Sections 27 & 28 of Chapter 131 of the Acts of 2010. Mr. Duhamel told the Board that prior to November 1986, Accidental Disability retirees were not allowed to take option c, and therefore, if they died of something other than what they retired under a disability for, the spouse received a lifetime survivor benefit of $6,000 per year. This local option, if approved by Town Meeting, would bring up the annual survivor allowance to $9,000 per year. Ms. Barrett told the Board that this article should be submitted to the Town before December 2010, in order to be placed on the April 2011 Town Meeting Warrant.
Motion to adopt survivor increase and place on the April Town Meeting Warrant for approval, made by Mr. Duhamel; seconded by Ms. Barrett. Unanimously voted.
Board Policy on Regular Compensation:
At the meeting of September 24, 2010, the Board began discussions on defining base pay. Atty. Sacco suggested that contracts that have been settled be given to him, so that he may review each and determine which stipends/payments should be considered base pay and subject to retirement deductions. He did state that it is clear that uniform allowance should be excluded from base pay. Ms. Barrett told the Board that she knows of three (3) contracts that have been settled, but she has not been given any documents yet. Atty. Sacco said that PERAC has issued new regulations, to which he would like to compare the contracts and draft a policy for the Board.
Ms. Barrett told the Board that she will obtain copies of the settled contracts from the Human Resource Office. Atty. Sacco told Ms. Barrett that for any unions that have settled their contracts, or for employees working without a contract under the Town By-Laws, to not take deductions for uniform allowance.
Staff Benefits & Working Conditions:
Board to review and discuss proposed revision to first paragraph in Schedule of Benefits and Working Conditions, Section III: Compensation/Longevity Pay for Plymouth Retirement Board Staff. Mrs. Sullivan asked the Board to consider revising the current Longevity Pay schedule so that longevity will now be part of the base pay, and therefore, included in the total of what overtime and cost of living increases are based upon.
First paragraph to now read:
Continuous employees who have completed the number of years of service set forth below shall receive a longevity payment in accordance with the calendar year 1/1 to 12/31 in which the employee attains the correct years of service. This payment will be rolled into the employee's current salary, effective with the November 2009 payment. All cost of living payments will be applied to the total earnings.
Ms. Barrett asked that longevity payments be broken down in a separate spreadsheet when the totals are changed for the budget.
Motion to approve the revision of Longevity Pay, so that it is now part of "base pay", made by Mr. Duhamel; seconded by Ms. Barrett. Unanimously voted.
Staff Recognition Letters:
Chairman Kelley told the Board that he had prepared letters of recognition for the Retirement Office staff and thanked them for their service to the active and retired members of the system.
Section VI: Annual Investment Manager Reviews:
Boston Trust:
Mark Cushing was present from Boston Trust for their annual investment performance interview.
He told the Board that Boston Trust is an employee owned, Boston-based company with 21 investment professional and 54 total staff members. Current assets under management are $4.7 billion.
For period ended September 30, 2010, the fund under-performed the Russell 2000 Index benchmark with 8.0% vs. 11.3%. The year-to-date results were exactly in-line with 9.1% for each.
Mr. Cushing told the Board that there is allow gross domestic product growth environment right now and that Boston Trust can only forecast out twelve to eighteen months. He forecasts no rapid economic growth ahead and only 2% - 2.5 % gdp growth. On a positive note, he forecasts good news for stock prices and returns, as he thinks stocks will pay around 7.5%, as opposed to bonds that will pay about 2.5%.
Pension Reserve Investment Trust Fund:
Paul Todisco of PRIM was present for their annual investment performance interview. The PRIT Fund currently holds $45.9 billion in assets under management.
PRIT Hedge Funds
PRIT Hedge Fund was valued at $5.4 million at September 30, 2010, and represented 5.2% of the total fund. PRIT Hedge Funds out-performed the 90-Day Treasury Bill + 5% with 2.8% vs. 1.3%, and also the 1-year with 5.5% vs. 5.1%.
PRIT Core Real Estate Fund
At September 30, 2010, the fund was valued at $4.9 million and represented 4.7% of the total fund. This fund slightly out-performed the PRIM Custom Total RE Benchmark with 6.7% vs. 6.6%. The 1-year significantly out-performed its benchmark with 5.9% vs. 2.0%.
Private Equity Vintage Year 2006
Valued at $1.3 million and represented 1.3% of the portfolio at September 30, 2010. This fund under-performed the S&P 500 Index + 5% benchmark with 3.5% vs. 12.7%, but out-performed the 1-year with 17.6% vs. 15.7%
Private Equity Vintage Year 2007
Valued at $783 thousand and represents 0.7% of the portfolio. This fund under-performed the S&P 500 Index + 5% with 6.3% vs. 12.7%, but out-performed the 1-year with 21.7% vs. 15.7%.
Private Equity Vintage Year 2008
Valued at $358 thousand and represented 0.3% of the portfolio at September 30, 2010. This fund under-performed the S&P 500 Index + 5% with 5.9% vs. 12.7%, and also the 1-year with 9.1% vs. 15.7%.
Private Equity Vintage Year 2009
Valued at $34 thousand and represented 0.0% of the portfolio at September 30, 2010. Mr. Todisco told the Board that this fund is in the preliminary funding stage, and therefore, there will be no performance to be measured against the benchmark.
Private Equity Vintage Year 2010
Valued at $12 thousand and representing 0.0% of the portfolio. As with Vintage Year 2009, this fund is in the funding stage and performance cannot be measured against the benchmark.
Mr. Todisco told the Board that, in general, the Private Equity Vintage Year portfolios have no liquidity, and they typically are considered ten year investments that will show no returns until after year three.
Section VII: Actuarial Valuation:
Larry Stone of Stone Consulting was present to discuss the January 1, 2010 actuarial valuation with the Board. In addition, Mark Wietzel from FIA was present in place of Tony Tranghese.
Mr. Stone told the Board that the January 1, 2010 preliminary results used starting fiscal 2012, with a COLA base adjustment from $12,000 to $13,000. The assumptions used in this report were 8.25% interest rate, 4% salary increase assumption, an actuarial value of assets, and a portfolio with 71% of equities and 29% fixed income form 2009 data. He explained that the 4% salary increase is projected for only current employees and includes promotions and longevity payments. Mr. Stone prepared a chart with different scenarios of funding length and amortization percentages. The old assumption used a length of 19 more years, going to year 2030, but the new length, with the adoption of Chapter 32, Section 22F, can be extended out another 10 years, to year 2040.
Mr. Stone suggested that the Board look at an interest rate of 8% and said that if the Board elects to extend to year 2040, the maximum amortization rate is 4%. After discussion, the Board asked Mr. Stone to prepare another report using the following assumptions:
Interest assumption rate of 8%
Length of schedule to year 2040
Lowest amortization rate
Max of 6% increase from 2011 – 2012 on Town appropriation
COLA increase of $1,000 & $2,000
Asset smoothing with gains & losses, recognized over a 4 year period and using a 10% corridor, which is a swing of 90% - 110% of market value
Motion made by Ms. Barrett for Mr. Stone to prepare the valuation using the above criteria; seconded by Mr. Duhamel. Unanimously voted.
Section VIII: Adjournment:
Motion to adjourn meeting at 12:10 pm. made by Ms. Barrett; seconded by Mr. Duhamel. Unanimously voted.
Next Meeting: Monday, November 15, 2010, 8:30 a.m.
The Town of Plymouth Retirement Board unanimously voted to approve these minutes at their meeting on Monday, November 15, 2010. Original, signed minutes are available at the Retirement Office, 10 Cordage Park Circle, Suite 240, Plymouth, MA.
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