MINUTES OF MEETING
STATE EMPLOYEE RETIREMENT COMMISSION
DECEMBER 4, 2012
Absent - Linda Yelmini, Trustee
Brenda Halpin, Director, Retirement Services Division
Kishore Solanki, Assistant Director, Retirement Services Division
Katie Balut, Supervisor, CMERS Unit, Retirement Services Division
Jean Reid, Division Accountant, Retirement Services Division
Philip Bonanno, Buck Consultants
Janet Cranna, Buck Consultants
Andrew Zmich, Buck Consultants
Sean Smith, Buck Consultants
The meeting began at approximately 9.30 a.m.
1. MERS Valuation
Mr. Bonanno began by presenting the highlights of the Executive Summary of the Biennial Actuarial Valuation of the Connecticut Municipal Employees Retirement System (CMERS) as of July 1, 2012. He gave an overview of its findings and conclusions. He noted that this was a full valuation year and was based on membership data and financial information as of June 30, 2012. Also, the same benefit provisions, actuarial assumptions and methods were used as the previous valuation.
Concerning the CMERS fund assets, Mr. Bonanno stated that with smoothing of gains and losses, the asset return was approximately 6.16%. At the request of Mr. Baus, there was discussion about changing the asset methodology.
Following a lengthy and detailed discussion concerning contributions and asset valuation methods, a motion was made by Mr. Baus to accept results predicated by dropping economic assumptions (salary, COLA & rate of interest) by ¼% and changing the asset methodology if within 20 basis points of current report. Mr. Poulin seconded. Unanimous decision.
2. CMERS & PFSBF Administration Fee
Jean Reid presented an estimated 2014 Expense Report detailing costs associated
with CMERS & PFSBF. She also explained various options for the per capita charge
for CMERS & PFSBF. After discussion, Mr. Poulin motioned to accept the $130 per
capita charge for active & retired CMERS members & $60 per capita charge for
active PFSBF members. Mr. Baus seconded. Unanimous decision.
3. PFSBF Valuation
Andrew Zmich next presented the highlights of the Biennial Actuarial Valuation of the Police and Fire Survivor Benefit's Fund (PFSBF). Due to the exhaustion of the surplus from the original 8 municipalities, all municipalities will now be required to make an employer contribution. Mr. Baus motioned to have the PFSBF reflect the same economic assumptions & asset methodology as CMERS. Seconded by Mr. Poulin. Unanimous decision.
4. Proposed GASB Changes
Ms. Cranna then discussed with the subcommittee the proposed GASB changes (the exposure drafts) and how the changes would impact the CMERS multi-employer system. Ms. Cranna explained how the proposed GASB separates accounting from funding, mandates individual entry age normal cost method, level percent of pay where CMERS currently uses entry age normal cost method (level dollar) and reduces the amortization periods. The changes will require more disclosures and schedules & will be effective July 1, 2013 for CMERS. The subcommittee had numerous questions for Buck on the status of the exposure drafts and the affect on CMERS including the additional expense relating to the additional work to be done by Buck. Mr. Baus requested that a meeting be planned in January to discuss the GASB changes in more detail.
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