2011-06-17-RB-min - Laserfiche WebLink

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LEXINGTON RETIREMENT BOARD AGENDA CARY MEMORIAL LIBRARY, LEARNING CENTER JUNE 17, 2011 Meeting to discuss pension issues Sen. Ken Donnelly, Rep. Jay Kaufman and Peter Diamond MINUTES OF THE JUNE 17, 2011 RETIREMENT MEETING Present: Robert Cunha, Joseph Foley, Michael McNabb, Alan Fields, Marguerite Olive Absent: Rob Addelson Bob Cunha called the meeting to order at 8:30. Bob began the meeting speaking of the funding aspects and the problems faced by retirement systems. He mentioned the meeting was requested to bounce ideas back and forth. Lexington Retirement is approximately 90% funded, far ahead of other systems. The Town of Lexington had the foresight to put in money early on which has helped the system. The concern of how to maintain an 8% assumption was discussed. Is it still achievable? Mike mentioned that even with the confines imposed on the retirement systems, Lexington ha done very well. Sen. Donnelly spoke about pension reform and mentioned that the proposals of increasing the 3 year average calculation to a S year average plus increasing the age for retirement should save the systems 10 %. Peter Diamond asked if there was anything included in the proposals what would allow deduction rates to be changed. Actuarial studies for Lexington Retirement were done with and without smoothing and the one accepted by the Board and Jim Lamenzo at PERAC incorporated the smoothing method which softened the impact of the losses in 2008. The Board also asked Buck to do studies using lower assumption rates. After reviewing the studies, the Board realized that lowering the assumption to 7% would impact the amount the Town would need to appropriate for the retirement system too greatly. Peter mentioned the deficit should be made up slowly so not to impact the Town's tax revenue and Town expenses. He felt there is a role for smoothing and not overreacting. Accepting a range of assumption values should be OK The Board should determine the percentage of earnings with which they would be comfortable and drop the idea that 8% will be the goal. Ask the actuary to present a range of 4% - 8% to Town Meeting and look at adjusting the normal costs.