HomeMy WebLinkAbout2010-11-22-RB-minMINUTES OF THE NOVEMBER 22, 2010 RETIREMENT MEETING
Present: Robert Cunha, Rob Addelson Alan Fields, Joe Foley, Marguerite Oliva
Absent: Michael McNabb
Bob Cunha called the meeting to order at 8:00.
The Board accepted and signed the 113010 warrant and the November payroll. The
October minutes were reviewed and signed.
New Members: (6) Gregory Ortolani, Alfredo Sousa, Custodians; Catherine Mahoney,
Finance Manager; Rosemary Mezynski, SSP; Karen DeCaprio, Overmax Aide; Amy
Horning, Library Technician
Retirements: Wayne Brooks, DPW Operations Manager, 1 /7 /11; Anne Gorman,
Instructional Assistant, 1/14/11
Deceased: George Murray, School Custodian, Accidental Disabilty, Opt. C, 10/29110;
Ruth White, Opt. D Survivor of Irene O'Malley, 1114/10; Ann Whiteney, LHA Director,
Opt. B, 11/6/10
Fran Peters and Henry Jaung from Meketa presented the quarterly update. The market
value of the portfolio on 9/30/10 was $104.2. The third quarter for world markets
indicated that international stocks were the top performing asset class with emerging
markets leading the way. Growth stocks outpaced value stocks across the capitalization
spectrum. Investment grade bonds and TIPS lagged riskier asset classes in the third
quarter.
Unemployment increased slightly over the third quarter to 9.6% partly reflecting a
reduction in temporary 2010 census workers.
The portfolio has a fairly significant overweight in emerging markets with almost 50% of
the emerging market portfolio centered in Asia. The International Equity Assets have a
small to mid -cap bias. The weighting for the International Equity market shows there is
an underweight in Europe/North America, a slight underweight in Pacific Rim/Asia, an
overweight in Asia, underweight in Latin America and a slight underweight in Europe/
MidEast/Africa compared to the MSCI ACWI index.
Acadian had 62% invested in large cap when Lexington Retirement first invested. Large
cap is now at 50% with a significant increase in small cap. The Acadian portfolio has
done well on the upside but the Board is concerned how it will perform on the downside.
The Board asked Meketa to look for a possible replacement and Epoch was mentioned.
The PIMCO review was presented by Ignacio Galaz and Alan Isenberg. The PIMCO
portfolio makes up 30% of the total fund. The total combined PIMCO funds are
$31,224,900 with $17,250,577 invested in PIMCO All Asset Fund and $13,974,389
invested in the Global Multi -Asset Fund. The All Asset Fund outperformed TIPS as well
as other single asset classes. It delivered a modest level of total volatility and provided
significant real returns.
The Global Multi -Asset Fund has increased 10.6% this past year. The focus is on income
versus capital appreciation given the outlook of slow nominal growth.
Alan Leventhal and Dane Rasmussen presented the Beacon Capital review. Beacon is
seeing a slow recovery and with the benefit of time feel there will be significant recovery.
The thought is that within four to six years rents will reach or exceed the 2007 levels.
They are seeing a move out of manufacturing to more office jobs but note that companies
are being more cautious when seeking space.
Whereas the Washington, D.C. portfolio has held up well, it has been difficult in Seattle
and Belleview, WA and will take longer to recover. There was a default on a loan from
Beacon IV in Seattle. Beacon is currently extending loans on other holdings. Valuations
have to be done every quarter and Alan Leventhal feels that the bottom was hit last year.
He is seeing a slow increase and sees the market stabilizing.
Beacon is purchasing three properties in Washington, D.C. at an attractive price. They see
continued gains in the D.C. market. They feel real estate is a good hedge against
inflation. The Board will consider more exposure to real estate.
There was a general discussion of Pension Obligation Bonds which would issue debt to
finance the Town's pension obligation. It was noted that there would have to be special
legislation. The Board decided to ask Cinder McNerney, the Managing Director of First
Southwest to attend a meeting before the next Board meeting on Dec. 22" to discuss her
experience with other retirement systems that have used this option. It was mentioned
that any Pension Obligation Bonds for retirement systems may have to be invested with
the PRIT fund.
The requirement to increase membership hours to 20 /week was put on hold until the
December meeting.
At the December votes are to be taken on two issues for the Town Warrant. The first
would increase s.101 survivors' pensions from $6,000 to $9,000 annually. Lexington has
five retirees receiving benefits under Ch. 32, s.101.
The other would allow the Board to increase the COLA base from $12,000 in increments
of $1,000.
There was a general discussion of Atty. Sacco's response to a letter regarding Mark
Culleton .received from Lichten & Liss - Riordan, P.C. The letter referred to Mark being
put on an unpaid leave for two months and asked if the Board will recognize and credit
this two month period if and when the arbitrator orders the Town of Lexington to pay him
for the two months. Mike's response was that the Board would be obligated to grant him
the additional two months of service and recalculate his retirement allowance, retroactive
to his date of retirement.
Artio Investments requested a new signature guarantee form be completed.
There still no been no response from PERAC on the 2008 overearnings of Anthony
Previte.
The medical panel for Tamzin Ladd has been set for December 3, 2010. All medical
records on file have been forwarded to the three physicians.
Melanson Heath & Co. has submitted the invoice of $6,000 for the portion of the Town
audit that is paid by the Lexington Retirement Board. Since payment was made in May
2010 for the last audit, this payment will be held until February 2011.
It was noted that there will be a shortfall for the month of December. It was decided that
money would be drawn from the Hartford Capital Appreciation Fund to cover the
shortfall. Looking forward, it was noted that there will probably be a shortfall every
quarter.
A motion was made, seconded and approved unanimously to adjourn the meeting at
11:00 AM.
The next meeting will be held December 22, 2010 at Cary Memorial Library in the
Learning Center.
Absent
Robert W. Cunha, Chairman
Robert Addelson, Ex Officio Member
Michael McNabb, Appointed Member
Joseph Foley, Elected Member
Alan Fields, Appointed Member