MINUTES OF MEETING
STATE EMPLOYEES RETIREMENT COMMISSION
OFFICE OF THE STATE COMPTROLLER
55 ELM STREET
HARTFORD, CONNECTICUT 06106

August 20, 2009

TRUSTEES PRESENT
Peter R. Blum, Chairman
Bob Baus
Steve Caliendo
Charles Casella
Richard Cosgrove
Thomas Culley
Steve Greatorex
Sal Luciano
Ronald McLellan
Claude Poulin
Linda Yelmini
Sandra Brown-Brewton

ABSENT
Paul Fortier
Robert Coffey
Helen Kemp
Deputy Comptroller Mark Ojakian
Jeffrey Smith, Municipal Liaison

OTHERS PRESENT
Nancy Wyman Comptroller, State of Connecticut
Jeanne Kopec, Asst. Director Retirement Services
Collin Newman, Asst. Director Retirement Services
Peggy Gray, Executive Assistant, Retirement Services Division
Karen Buffkin, Counsel for the State Comptroller


GUESTS
George Spurlock

CALL TO ORDER

The Chairman called the meeting to order at 9:10 AM

CHAIRMAN'S REPORT

There is a matter in Federal Court that is waiting for a motion for reconsideration pending. The Judge
has been asked to rule on the reconsideration and an Administrative Declaration has also been filed with the Retirement Services Division.

DIVISION DIRECTOR'S ADMINISTRATIVE AND SUBCOMMITTEE REPORT

Administrative

The Comptroller reported that the current backlog of unfinalized State Employees Retirement System (SERS) accounts is approximately 10,424 with 1465 new retirees for July and 1761 for the month of August including 17 disability retirements; 0 applications were finalized for the month. There are 573 pending disability applications of which, 62 are pending review, 351 require more information and 160 have been denied, for the month of July there were 21 new applications, 29 cases were on the agenda and 16 were approved. The next available meeting for scheduling cases with the Medical Examining Board is November.

The Comptroller praised the efforts of the staff in the Retirement Division. She wanted to convey to the Commission the hard work that was involved by all members of the staff and how proud she was of their efforts.

Commission Trustee Linda Yelmini praised the efforts of the Retirement Division staff for all of their hard work to get everyone on the payroll. Trustee Fae Brown-Brewton echoed the sentiment, and volunteered to draft a letter to the Retirement Division staff on behalf of the Retirement Commission.

Subcommittee Reports

OLD MATTERS:
REQUEST COMMISSION APPROVAL OF AMENDED MINUTES FOR JUNE 18, 2009

Bob Baus moved, seconded by Sal Luciano to move the minutes of June 18, 2009 off the table.
Charles Casella moved, seconded by Bob Baus to accept the minutes as amended.

All voted in favor
Unanimous Decision

1. REQUEST COMMISSION APPROVAL OF THE JANUARY 8, 2009 MINUTES

Mr. Luciano moved, seconded by Ms. Yelmini to approve the July 16, 2009 minutes as amended. All voted in favor.

Unanimous Decision

2. REQUEST COMMISSION APPROVAL OF THE STATE EMPLOYEES RETIREMENT
COMMISSION CHAIRMAN'S PER DIEM AND TRAVEL EXPENSE REIMBURSEMENT

Mr. Luciano moved, seconded by Mr. Cosgrove to approve the State Employees Retirement Commission Chairman's per diem and travel expenses reimbursements. All voted in favor.

Unanimous Decision

3. REQUEST COMMISSION APPROVAL OF THE STATE EMPLOYEES
RETIREMENT SYSTEM SERVICE RETIREMENTS FOR THE MONTH OF
JULY 2009

Mr. Luciano moved, seconded by Mr. Poulin to approve the State Employees Retirement System Service Retirement. All voted in favor.

Unanimous Decision

4. REQUEST COMMISSION APPROVAL OF THE STATE EMPLOYEES RETIREMENT SYSTEM VOLUNTARY PENDING DISABILITY RETIREMENTS FOR THE MONTH OF JULY 2009

Mr. Luciano moved, seconded by Mr. Poulin to approve the State Employees Retirement System Service Retirements. All voted in favor.

Unanimous Decision

5. REQUEST COMMISSION REVIEW OF THE STATE EMPLOYEES RETIREMENT SYSTEM DISABILITY RETIREMENTS FOR THE MONTH OF JULY 2009 APPROVED BY THE MEDICAL EXAMINING BOARD AS OF JUNE 30, 2009

Mr. Luciano moved, seconded by Mr. Casella to review the State Employees Retirement System Disability Retirements for the month of July 2009. All voted in favor.

Unanimous Decision

6. REQUEST COMMISSION APPROVAL OF THE CONNECTICUT STATE EMPLOYEES RETIREMENT SYSTEM RETROACTIVE RETIREMENTS FOR THE MONTH JULY 2009

Mr. Luciano moved, seconded by Mr. Cosgrove to approve the State Employees Retirement System retroactive retirements. All voted in favor.

Unanimous Decision

7. REQUEST COMMISSION APPROVAL OF THE STATE EMPLOYEES RETIREMENT SYSTEM PRE RETIREMENT DEATH BENEFIT RETIREMENTS FOR THE MONTH OF JULY 2009.

Mr. Luciano moved, seconded by Ms Brown- Brewton to approve the Probate Judges and Employee
Retirement System Retirements. All voted in Favor

Unanimous Decision

8. REQUEST COMMISSION APPROVAL OF CONNECTICUT PROBATE JUDGES AND
EMPLOYEES RETIREMENT SYSTEM RETIREMENTS

Mr. Luciano moved, seconded by Mr. Poulin to approve the Probate Judges and Employees Retirement Systems Retirements for the Month of July 2009. All voted in Favor

Unanimous Decision

9. REQUEST COMMISSION APPROVAL OF THE JUDGES, FAMILY SUPPORT
MAGISTRATES AND COMPENSATION COMMISSIONERS RETIREMENT
SYSTEM RETIREMENTS

Mr. Luciano moved, seconded by Ms. Brown-Brewton to approve the Judges, Family Support Magistrates and Compensation Commissioners retirements for July 2009. All voted in Favor

Unanimous Decision

10. REQUEST COMMISSION APPROVAL OF THE STATE'S ATTORNEY'S
RETIREMENT FUND RETIREMENTS

Mr. Luciano moved, seconded by Ms. Brown-Brewton to approve the State's Attorney's
Retirement fund retirements for July 2009. All voted in Favor

Unanimous Decision

11. REQUEST COMMISSION APPROVAL OF THE MUNICAL RETIREMENT
SYSTEM RETIREMENTS FOR JULY 2009

Mr. Luciano moved, seconded by Mr. Caliendo to approve the Municipal Retirements System
Retirements for July 2009. All voted in Favor.

Unanimous Decision

12. REQUEST COMMISSION ACCEPTANCE OF THE RECOMMENDATIONS OF THE
MEDICAL EXAMINING BOARD FROM ITS MEETINGS OF JULY 31, 2009
TO APPLICATIONS FOR DISABILITY RETIREMENTS RECEIVED FROM THE
MUNICAL EMPLOYEES RETIREMENT SYSTEM

Mr. Luciano moved, seconded by Ms. Brown-Brewton to accept the recommendations of the Medical Examining Board from it's meeting of July 31, 2009. All voted in Favor

Unanimous Decision

13. REQUEST COMMISSION APPROVAL OF THE STATE EMPLOYEES RETIREMENT
COMMISSION MANAGEMENT TRUSTEES PER DIEM AND TRAVEL EXPENSES
REIMBURSEMENTS.

Mr. Luciano moved, seconded by Mr. Cosgrove to approve the State Employees Retirement Commission Management Trustees Per Diem and Travel Expenses reimbursements. All voted in Favor. Mr. Baus abstained.

Majority Decision

14. REQUEST COMMISSION APPROVAL OF THE STATE EMPLOYEES
RETIREMENT COMMISSION UNION TRUSTEES PER DIEM AND
TRAVEL EXPENSES FOR THE MONTH OF JULY 2009

Mr. Luciano moved , seconded by Ms. Brown-Brewton to approve the Retirement Commission Union Trustees Per Diem and Travel Expenses reimbursements. All voted in Favor
Mr. Poulin abstained.

Majority Decision

15. REQUEST COMMISSION APPROVAL OF THE CONNECTICUT PROBATE JUDGES
AND EMPLOYEES RETIREMENT FUND PERSONAL EXPENSES FROM IT'S
AUGUST 4, 2009 MEETING.

Mr. Luciano moved, seconded by Mr. Cosgrove to approve the Connecticut Probate Judges and Employees retirement fund personal expenses for the month of July, 2009. All voted in Favor

Unanimous Decision

16. REQUEST COMMISSION CONSIDERATION OF THE RECOMMENDATIONS FROM
IT'S SUBCOMMITTEE ON REGULATIONS AND OVERPAYMENT FROM ITS
August 4, 2009 MEETING

Upon motion by Mr. Luciano and upon second by Mr. Baus , the Commission adopted the recommendations of the Regulation and Overpayment Subcommittee with regard to the following individuals and their requests for a waiver of the repayment of overpayment and made the following determinations:

1 Hector Figueroa Overpayment = $78,733.09
Case Summary: The CMERS system has a built-in social security reduction. Conn. Gen. Stat. Section 7-437 requires the CMERS retirement benefit be reduced when the retiree is eligible for social security (age 62) or earlier if the retiree receives a Social Security disability benefit. Mr. Figueroa is a former employee of the Norwalk Second taxing District. When he retired on June 1, 2001, he was advised via letter dated June 20, 2001 that his benefit would be reduced at age 62 or upon receipt of a social security disability award. In this letter he was also advised that if he received a social security disability award, he needed to furnish CMERS with a copy of the award notice. He received his Social Security disability award in November 2001 - approximately five months after he received his June 20, 2001 letter. He did not notify CMERS of the award.

In his request for waiver, Mr. Figueroa stated that he was not aware of this social security offset requirement and believed in good faith that the amounts paid to him by MERS and social security were the correct amounts. He stated that repayment would be an extreme financial hardship and that he has medical conditions including diabetes and severely damaged knees which render him unable to work. He submitted some medical records with regard to his claims of physical impairment.

Financial summary Hector Figueroa (MERS)

CMERS monthly benefit (current) $ 1,773.95
Social Security monthly benefits (current) $ 1,878.00
Monthly Income (Total) $ 3,651.95
Annual Income (2008) return $ 62,315.00
(includes rental income)
Bank statement $ 13,060.00
Monthly Expenses: $ 953.00
Assists: Home equity $ 76,000.00

Action: The Commission accepted the recommendations of the subcommittee and denied Mr. Figueroa's request for waiver. The Commission found that (1) Mr. Figueroa was at fault for the error as he did not notify MERS of his SSD award as he had been instructed to do (June 20, 2001 letter) and (2) Mr. Figueroa could have reasonably known of the overpayment as he knew that an SSD Award was an offset to his MERS benefit. Because the Commission found Mr. Figueroa at fault and could have reasonably known that of the overpayment, it did not need to reach the third step of the waiver process that is to determine whether the repayment of the $ 78,733.09 was a hardship. The Commission found that an appropriate repayment rate for Mr. Figueroa be sent at a deduction of $ 1,773.00 (his entire MERS benefit) until such time repayment has been made.

2 Robert L. Nichols Overpayment = $20,125.69
Case Summary: The CMERS system has a built-in social security reduction. Conn. Gen. Stat. Section 7-437 requires the CMERS retirement benefit be reduced when the retiree is eligible for social security (age 62) or earlier if the retiree receives a Social Security disability benefit. Mr. Nichols is a former employee of the City of Hartford. He retired effective June 1, 2002. He was advised via letter August 23, 2002 that his benefit would be reduced at age 62 or upon receipt of a social security disability award. In this letter he was also advised that if he received a social security disability award, he needed to furnish CMERS with a copy of the award notice. Mr. Nichols received his Social Security disability award retroactive to December 2000 - indicating that he had applied for his disability award prior to his retirement. He did not notify CMERS of the award. The lack of information MERS had in his retirement documents indicates that he did not put CMERS on notice that he had applied for - or intended to apply for - a social security disability benefit at the time of his retirement application.

Mr. Nichols's position is that he was never told or received anything about reducing his benefit at age 62 or upon a social security disability award. He stated that he could not afford repayment because his MERS benefit was reduced to reflect his receipt of a social security benefit and he is undergoing a foreclosure (although he did not submit any documentation to a foreclosure). He stated he has experienced a loss of toes and leg although he did not submit any medical documentation.

Financial summary Robert L. Nichols (MERS)

CMERS monthly benefit (July 2009) $ 780.73
Social Security monthly benefits (current) $ 1,853.00
Monthly Income (Total) $ 2,633.73
Annual Income (2008) return $ 12,019.00
Bank statement $ 3,094.00
Monthly Expenses: $ 1,035.00

Action: The Commission denied Mr. Nichols' request for waiver. The Commission found that: (1) Mr. Nichols was at fault for the error as he did not notify MERS of his SSD award as he had been instructed to do (August 23, 2002 letter) and (2) Mr. Nichols could have reasonably known of the overpayment as he knew that an SSD Award was an offset to his MERS benefit. Because the Commission found Mr. Nichols at fault and could have reasonably known that of the overpayment, it did not need to reach the third step of the waiver process that is to determine whether the repayment of the $ 20,125.69 was a hardship. Upon review of his financial information, the Commission found that the appropriate repayment rate for Mr. Nichols is a five (5) year recovery rate: that is his benefit be reduced for 59 months by $335.43 for 59 months and one month by $335.32.

3 Eleanor Miller Overpayment = $ 1,105.83
Case Summary: The CMERS system has a built-in social security reduction. Conn. Gen. Stat. Section 7-437 requires the CMERS retirement benefit be reduced when the retiree is eligible for social security (age 62) or earlier if the retiree receives a Social Security disability benefit. Ms. Miller is the surviving spouse of a CMERS employee Richard W. Miller. When he retired effective July 19, 1998, he was advised via letter November 23, 1998 that his benefit would be reduced at age 62 or upon receipt of a social security disability award. In this letter he was also advised that if he received a social security disability award, he needed to furnish CMERS with a copy of the award notice. Mr. Miller began receiving Social Security disability in April 2002 - he did not notify CMERS of the award.

This overpayment waiver request involved the spouse of a member who did had not informed MERS that he had received a SSDI award. Mrs. Miller stated that her husband had been ill and perhaps missed the letter stating he had to notify MERS of the award. Mrs. Miller further stated that she did not know of this requirement. She also stated that she had certain medical conditions such as lung cancer which does not permit her to work or earn a reasonable income. She submitted medical records indicating this diagnosis. With regard to securing repayment of an overpayment from the spouse of a member when it was possible that the spouse did not know of the requirement, it was determined that CGS Sec. 7-439h indicates that the overpayment to the member may be collected through the beneficiary's monthly benefit.

Financial summary: Eleanor W. Miller (MERS)

CMERS monthly benefit (current) $ 205.87
Social Security monthly benefits (as of 5/2009) $ 1,384.40
Monthly Income (Total) $ 1,590.27
Annual Income (2008) return $ 9,173.00
Bank statement $ 2,452.68
Monthly Expenses: $ N/A

Assets: Home with an assessed total value of $268,100 and no apparent mortgage. Mrs. Miller did not provide a financial affidavit as required and the bank statements provided were for one month of two different banks and not the required six months.

Action: The Commission denied Mrs. Miller's request for waiver. The Commission found that Mr. Miller was at fault for the error as he did not notify MERS of his SSDI award as he had been instructed to do (November 23, 1998 letter): Mrs. Miller did not submit any evidence that her husband was too ill in 1998 to understand the letter. Mr. Miller received social security payments beginning in April 2002 and died in October 2004 - he had two years to report the income to MERS; (2) Mr. Miller could have reasonably known of the overpayment as he knew that an SSDI Award was an offset to his MERS benefit. Because the Commission found Mr. Miller at fault and could have reasonably known that an overpayment would occur it did not need to reach the third step of the waiver process that is to determine whether the repayment of the $1,105.83 was a hardship. Upon review of his financial information, the Commission found that the appropriate repayment rate for Mrs. Millers is a two (2) year recovery rate: that is her benefit be reduced for 23 months at $46.08 and one month at $45.99.

4 Angel Otero Overpayment = $ 8,248.27
Case Summary: The CMERS system has a built-in social security reduction. Conn. Gen. Stat. Section 7-437 requires the CMERS retirement benefit be reduced when the retiree is eligible for social security (age 62) or earlier if the retiree receives a Social Security disability benefit. Mr. Otero is a former employee of the Hartford Housing Authority. When he retired effective November 29, 2004, he was advised via letter dated December 20, 2004 that his benefit would be reduced at age 62 or upon receipt of a social security disability award. In this letter he was also advised that if he received a social security disability award, he needed to furnish CMERS with a copy of the award notice. Mr. Otero received his Social Security disability award in February 2005 - a few months after he received his letter. He did not notify CMERS of the award.

Mr. Otero stated that he did not know that this was a requirement and that he has a lot of expenses and needs so he cannot afford to repay the amount.

Financial summary: Angel Otero (MERS) $ 8, 248.27
CMERS monthly benefit (current) $ 501.10
Social Security monthly benefits (current) $ 1,105.40
Monthly Income (Total) $ 1,606.50
Annual Income (2007) return $ 7,670.46
Bank statement $ N/A
Monthly Expenses: $ 1,327.00
Assets: Owns home/property with $40,000 equity.


Mr. Otero did not provide six months worth of bank statements. On his financial affidavit, Mr. Otero states he has a weekly income of $1,773.00 and weekly expenses of $1,793.00 which did not match the other information provided.

Action: The Commission denied Mr. Otero's request for waiver. The Commission found that: (1) Mr. Otero was at fault for the error as he did not notify MERS of his SSDI award as he had been instructed to do (letter of December 20, 2004) and (2) Mr. Otero could have reasonably known of the overpayment as he knew that an SSDI Award was an offset to his MERS benefit. Because the Commission found Mr. Otero at fault and could have reasonably known that an overpayment would occur it did not need to reach the third step of the waiver process that is to determine whether the repayment of the $ 8,248.27 was a hardship. The Commission found that an appropriate repayment rate for Mr. Otero a three (3) year recovery rate: that is his benefit be reduced for 35 months by $ 229.12 for 35 months and one month by $ 229.07.

Chairman Peter Blum stated that the process is a three-legged one. If someone fails the first or second part of the test the third part, financial hardship is not looked at.

DISCUSSION ITEM:

The Comptroller, after discussion with Mr. Bob Rinker and Mr. Stephen Greatorex, asked that a letter go out through the Comptroller's office, instead of SEBAC, to all those who retired in June and July if they chose Option D and were married to provide a one-time, irrevocable opportunity to change their payment option election from straight life annuity to an option that provides a lifetime benefit to their surviving spouse in the even the retiree predeceases their spouse. The window of opportunity will end September 30, 2009.

A motion was made by Mr. Luciano, seconded by Mr. Greatorex to approve the Comptroller's request to provide a one-time, irrevocable opportunity to change their payment option if they chose option D and were married for at least one year prior to retirement. All voted in Favor

Unanimous Decision

EXECUTIVE SESSION:

At 9:25 on a motion by Mr. Casella, seconded by Mr. Baus the Commission Trustees went into Executive Session to discuss ongoing contract negotiations with Karen Buffkin, Counsel to the State Comptroller.

At 9:45 Mr. Casella, seconded by Mr. Luciano moved to return from Executive Session.

Mr. Casella moved, seconded by Mr. Luciano to have the Commission enter into a contract with Custom Communications at the negotiated rate for four years and the first year would be a four page benefit statement. All voted in Favor

Unanimous Decision

At 9:55 Mr. Luciano made a motion to adjourn, seconded by Ms. Brown-Brewton. All voted in favor.

ADJOURNMENT at 9:55 AM

______________________________
Peter R. Blum. Chairman
State Employees Retirement Commission

_________________________________
Mark E. Ojakian
Deputy Comptroller and Director of Retirement Servi

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