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HomeMy WebLinkAbout2010-12-22-RB-minMINUTES OF THE DECEMBER 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 123110 warrant and the December payroll. The November minutes were reviewed and signed. New Members: (7) Kelly Suber, Kristen Arsenault, Vivian Marcano, Special class Instructional Assistant; Joshua Dickerson, Custodian; Jacqueline Davis, Student Support Instructor; Sharlene Popplewell- Johnson, Metco SSP, William Edmonds, Firefighter Retirements: Connie Rawson, Library Director, 1/28/11; Joseph Sveistys, School Custodian, 12/17/10 (also applying for Accidental and Ordinary Disability); Sandra Alexander, Recreation Administration Asst., 2/4111 Deceased: Laura Burna, School Lunch, Opt. B depleted, 11 /27 /10; John Lichtenberg, School Custodian, Opt. C, 11/25/10 Fran Peters and Henry Jaung from Meketa presented the quarterly update. The market value of the portfolio on 11/30/10 was $106.2 mm, a decrease of about 1% from 10 /31 /10. The aggregate assets year -to -date performance as of 11/30/10 is up 9.5% with all assets except Artio International Equity outperforming the benchmarks. November was a difficult month for both equity and fixed income due to some concern on the European side. December year to date for the system is up about 2.4 %. PRIT's y -t -d was 8.2 %. Lexington has outperformed this year, 1 year and 3 year. There was a discussion of the 5% target allocation to real estate with Beacon Capital being the lone investment. The system is invested in Beacon Capital V with a commitment of $7 million; to date $5.2 million has been called. Based on Beacon's current value of $1.9 million plus uncalled capital, the System has 3.5% allocation to real estate. Beacon has been able to work through loan modification and has been able to extend from 2012 to 2017 with no injection of capital. Fran presented real estate strategy comparisons of REITS, Core Real Estate and Non - Core Real Estate. Meketa leans toward private real estate such as core or non -core rather then REITS. Alan mentioned that 47% of the portfolio was held by the two PIMCO funds and Wellington.. Conventionally this is a big bet that three managers hold almost 1 /2 of the portfolio. The funds have done well due to the flexibility that these managers have. Meketa presented a Global Equity Manager comparison of Epoch Global, Tradewinds and First Eagle. Each would be a commingled fund or mutual fund and would have a unique portfolio not concerned about the benchmark. Alan mentioned Neuberger as a possibility. Funds from domestic equity could be used to fund a new global equity manager. It was decided to eliminate the pocket for hedge funds and move forward for a global equity manager search for 2011. Meketa will issue RFP request in Janaury. Rob sent an e -mail to Bob Harris, School HR director to see if he heard back from labor counsel regarding changing the membership threshold. Mike Sacco notified the Board that it is a Board's decision to set requirements and not part of labor negotiations. It was decided that Pat Goddard, Rob and Maggie will have to meet to discuss the disability process. There was a general discussion of Pension Obligation Bonds which would issue debt to finance the Town's pension obligation. The acceptance would require special legislation starting with Town Meeting approval. Alan mentioned if you have two options, one to extend the schedule or to borrow money, don't borrow money. Because the interest rates have increased, the funds would not be tax exempt and they would have to be held by PRIT, the Board decided to not move forward at this time. The Board reviewed the lower assumption reports sent by Buck which would greatly increase the Town's appropriation. Alan wants to meet with Sen. Donnelly, Rep. Kaufman and Peter Diamond. The time may be right to ask for assumption rates to be lowered. The Board will try to set up something for January or February. There was a discussion of increasing the five S. 101 survivors from $6,000 to $9,000 as proposed under Ch. 131 of the Acts of 2010. Alan made a motion to accept the proposed increase; it was seconded and approved unanimously by the other Board members. (Mike absent) This will be placed on the warrant for Town Meeting. The 3% COLA increase on $12,000 was discussed. Rob opposed the increase citing the fact that Social Security recipients received -0- and the Town employees are receiving 1% of their base pay. Rob proposed a 1% increase. Bob mentioned the 1% received by the Town employees was not capped at $12,000 and also mentioned that the increase in health care is usually more then the retirees' 3% increase. It was also noted that many retirees' pensions are less then $12,000 annually and therefore they do not receive the maximum increase. Alan made a motion to adopt the 3% COLA increase for FY' 11. Bob and Joe both voted yes and Rob voted no. The motion was passed three to one. There was no discussion of increasing the base. Tamzin Ladd had her medical panel review on December 3 Nothing received from PERAC as of this date. Because of ongoing problems with Laura Creedon, Joe Haynes' attorney, Galen Gilbert, asked Mike Sacco if the Board would want to get involved in filing a case against Laura. The Board declined. The Fidelity representative will be asked to attend the January 27 meeting for the Contrafimd review. Norman Brute's Workers' Comp claim has been settled. The Lexington Retirement System will receive $5,500 from the settlement. Jim Weston's reevaluation was completed by PERAC. He still is unable to perform the essential duties of his job. PERAC still has not responded to the Board regarding the 2008 over earnings for Anthony Previte. A motion was made, seconded and approved unanimously to adjourn the meeting at 10:00 AM. The next meeting will be held January 27, 2010 at Cary Memorial Library in the Learning Center. Absent Robert W. Cunha, Chairman Michael McNabb, Appointed Member Robert Addelson, Ex Officio Member Joseph Foley, Elected Member Alan Fields, Appointed Member