Amended

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


December 17, 2015


TRUSTEES PRESENT
Peter Adomeit, Chairman
Michael Carey
Charles Casella
Richard Cosgrove
Steven Greatorex
Ronald McLellan
Claude Poulin
Angel Quiros
Sal Luciano
Lisa Grasso-Egan
Laila Mandour
Sandra Fae Brown- Brewton
Robert Coffey

TRUSTEES ABSENT
Paul Fortier

EX OFFICIO MEMBERS
Martha Carlson, Deputy State Comptroller
Deborah Spalding, CIO, Office of the State Treasurer

MUNICIPAL LIAISON
Thomas Landry

OTHERS PRESENT
Brenda Halpin, Director, Retirement Services Division
Michael Rose, General Counsel to the Retirement Commission
Natalie Braswell, General Counsel to the State Comptroller
Colin Newman, Office of the State Comptroller
Genevieve Ballinger, Office of the State Comptroller
David Dalpe, SERS Retiree
Eric Neuendorf, SERS Retiree

CALL TO ORDER
Chairman Adomeit called the meeting to order at 9:10 a.m.

CHAIRMAN'S REPORT
Chairman Adomeit reported that he has appointed new members to some of the committees. Ms. Grasso-Egan and Mr. Quiros are appointed to the Hazardous Duty committee. Ms. Brown-Brewton is appointed to the Purchasing and Other Related Matters committee. Mr. Fortier and Mr. Luciano are still members of the Hazardous Duty committee.

DIVISION DIRECTOR'S ADMINISTRATIVE REPORT
For the December retirement payroll we had 81 new retirees (71 normal, 6 disabilities, 2 Voluntary Pending and 2 Hybrid). There were 9 disabilities and 103 normal retirements finalized for the month. The current backlog of audits is 2,178 Disabilities and 12,470 regular retirements.

On the ARP to Hybrid transfers there are 317 retirees, 1,527 transfers, 9 waivers and 4 prospective for a total of 1,857. We were able to process 4 transfers this month and the outstanding number to be audited and processed is 670.

Pending Disability Applications as of November 30, 2015

Pending Applications:    269
Applications preliminarily reviewed   (106)
Applications waiting for documentation   (163)
Applications scheduled:    39
Total Pending:    308

FOR THE MONTH OF NOVEMBER

Number of Applications Received    8
Number of Applications on Agenda    15
Number of Applications Approved    8

The next available meetings for scheduling are January and February 2016.

Regarding the customer service center, as of yesterday we have scanned in 4,754 case documents, forms, and correspondence. On average we are scanning in 128 images a day. We are continuing to meet on a regular basis with the supervisors of each unit to discuss the changes to our processes with the implementation of the Customer Service Center.

As an update to the 2015 MERS Re-employment Survey after sending out 395 Final Notices we have received back 211 as of December 4th. The responses are due back on December 18th and we will then assess the number of outstanding responses for our next steps.

The Division is in the process of converting the Judges' retirement payroll to the Core-CT retirement payroll effective January 2016. This involves 147 judges. We migrated the entire SERS payroll seamlessly, so we are hoping that this goes just as well.

I want to thank Attorney Barth for his insight and guidance at our internal meeting regarding the Internal Revenue Code Section 415. We are currently in the process of designing and developing the Pension Module and his assistance was appreciated.

Deputy Comptroller Martha Carlson gave an update on the pension system implementation:

The pension implementation remains on track for go live in May and UCONN payroll in July. The pension calc engine will be built by February, at which time the Core-CT and Retirement teams will begin testing the backlog and adjust the design of the calc engine to accommodate any nuances. Also in February, all new enrollments into the pension system will be entered into Core-CT.

When asked by Mr. Casella to define the calc engine, Deputy Comptroller Carlson explained that it is the piece of software that actually calculates the benefit, pulling in all of the relevant data. Starting in May, all new retirement will come through the new system for calculation of benefits. Although the work flow will be automated, staff will oversee each step in the process. Mr. Casella asked if they will hear about how the conversion goes. Deputy Comptroller Carlson said that all data from the old system will be converted into the new system in February, and for a few months past go-live in May, the old system will still be operational for reference purposes.

Mr. Greatorex asked about the calc engine itself. He asked if someone's retirement document scanned in, will there be a way to correct errors if something is flagged? Deputy Comptroller Carlson said if all the data does not follow perfectly all of the rules, then the application will cause an RV flag, which will trigger the application to be sent to the appropriate unit for review. Mr. McLellan asked a question about the minimum amount of service credit and whether it is necessary information if it takes a lot of investigation? Deputy Comptroller Carlson said that the system has been configured to reflect all current labor contracts, but it is capable of being modified as contracts are negotiated.

DIVISION DIRECTOR'S SUBCOMMITTEE REPORTS

The Regulations and Overpayment subcommittee meeting will be held on Monday, December 21st.

Chairman Adomeit stated that Attorney Barth said he would be here at 9:30am to discuss item 16 on the agenda. We will call it out of order at the end.

NEW MATTERS

1. REQUEST COMMISSION APPROVAL OF NOVEMBER 19, 2015 MINUTES Mr. Luciano moved, seconded by Mr. Greatorex to approve the November 19, 2015 minutes. All voted in favor.

Unanimous Decision

2. REQUEST COMMISSION APPROVAL OF THE STATE EMPLOYEES RETIREMENT COMMISSION CHAIRMAN'S PER DIEM EXPENSES Mr. Luciano moved, seconded by Mr. Greatorex to approve the Retirement Commission Chairman's Per Diem Expenses. All voted in favor.

Unanimous Decision

3. REQUEST COMMISSION APPROVAL OF THE STATE EMPLOYEES RETIREMENT COMMISSION UNION TRUSTEE'S PER DIEM AND TRAVEL EXPENSES REIMBURSEMENTS Mr. Luciano moved, seconded by Mr. Greatorex to approve the Retirement Commission Union Trustee's Per Diem and Travel Expenses Reimbursements. All voted in favor. Mr. Poulin abstained.

Unanimous Decision

4. REQUEST COMMISSION REVIEW OF THE NOVEMBER 2015 BILLING FROM ROSE KALLOR Mr. Luciano moved, seconded by Mr. Greatorex to review the November 2015 billing from Rose Kallor. All voted in favor.

Unanimous Decision

5. REQUEST COMMISSION REVIEW OF THE NOVEMBER 2015 BILLING FROM ROBINSON & COLE Mr. Luciano moved, seconded by Mr. Greatorex to review the November 2015 billing from Robinson & Cole. All voted in favor.

Unanimous Decision

6. REQUEST COMMISSION APPROVAL OF THE CONNECTICUT STATE EMPLOYEES RETIREMENT SYSTEM SERVICE RETIREMENTS FOR THE MONTH OF NOVEMBER 2015 Mr. Luciano moved, seconded by Mr. Greatorex to approve the service requirements for the month of November 2015. All voted in favor.

Unanimous Decision

7. REQUEST COMMISSION APPROVAL OF THE CONNECTICUT STATE EMPLOYEES SYSTEM DISABILITY RETIREMENTS FOR THE MONTH OF NOVEMBER 2015 Mr. Luciano moved, seconded by Mr. Greatorex to approve the disability retirements for the month of November 2015. All voted in favor.

Unanimous Decision

8. REQUEST COMMISSION APPROVAL OF THE CONNECTICUT STATE EMPLOYEES SYSTEM VOLUNTARY PENDING RETIREMENTS FOR THE MONTH OF NOVEMBER 2015 Mr. Luciano moved, seconded by Mr. Greatorex to approve the voluntary pending retirements for the month of November 2015. All voted in favor.

Unanimous Decision

9. REQUEST COMMISSION APPROVAL OF THE MUNICIPAL RETIREMENT SYSTEM RETIREMENTS Mr. Luciano moved, seconded by Mr. Greatorex to approve the municipal retirement system retirements. All voted in favor.

Unanimous Decision

10. REQUEST COMMISSION APPROVAL OF THE JUDGES, FAMILY SUPPORT MAGISTRATES AND COMPENSATION COMMISSIONERS RETIREMENT SYSTEM RETIREMENTS DECEMBER 2015 Mr. Luciano moved, seconded by Mr. Greatorex to approve the judges, family support magistrates, and compensation commissioners retirement system retirements for the month of December 2015. All voted in favor.

Unanimous Decision

11. REQUEST COMMISSION APPROVAL OF THE PROBATE JUDGES AND EMPLOYEES RETIREMENT SYSTEM RETIREMENTS FOR DECEMBER 2015 Mr. Luciano moved, seconded by Mr. Greatorex to approve the probate judges and employees retirement system retirements for the month of December 2015. All voted in favor.

Unanimous Decision

12. REQUEST COMMISSION APPROVAL OF THE PROBATE JUDGES AND EMPLOYEES RETIREMENT FUND PERSONNEL EXPENSES FOR THE PAY PERIOD OCTOBER 16, 2015 THROUGH NOVEMBER 15, 2015 Mr. Luciano moved, seconded by Mr. Greatorex to approve the probate judges and employees retirement fund personnel expenses for the pay period October 16, 2015 through November 15, 2015. All voted in favor.

Unanimous Decision

13. REQUEST COMMISSION REVIEW AND ACCEPTANCE OF THE ROLL FORWARD ACTUARIAL VALUATION REPORT PREPARED AS OF JUNE 30, 2015 Mr. Luciano moved, seconded by Mr. Greatorex to review and accept the roll forward actuarial valuation report prepared as of June 30, 2015. All voted in favor.

Unanimous Decision

14. REQUEST COMMISSION REVIEW AND ACCEPTANCE OF THE SCHEDULES OF EMPLOYER ALLOCATIONS, SCHEDULES OF PENSION AMOUNTS BY EMPLOYER AND SCHEDULES OF SENSITIVITY ANALYSIS AND DEFERRED INFLOW AMOUNTS BY EMPLOYER REPORT PREPARED AS OF JUNE 30, 2014 WITH INDEPENDENT AUDITOR'S REPORT THEREON Mr. Luciano moved, seconded by Mr. Greatorex to review and accept the schedules of employer allocations, schedules of pension amounts by employer and schedules of sensitivity analysis and deferred inflow amounts by employer report prepared as of June 30, 2014 with independent auditor's report thereon. Mr. Greatorex asked why it did not say anything about MERS. He asked that the agenda be amended to include a specific reference to MERS. All voted in favor with the amendment.

Unanimous Decision

15. REQUEST COMMISSION APPROVAL OF PARTICIPATION OF THE CITY OF NEW LONDON FIRE CHIEF IN THE CONNECTICUT MUNICIPAL EMPLOYEES RETIREMENT SYSTEM (CMERS) EFFECTIVE FEBRUARY 1, 2016 Mr. Luciano moved, seconded by Mr. Greatorex to approve participation of the City of New London Fire Chief in CMERS effective February 1, 2016. All voted in favor.

Unanimous Decision

16. REQUEST COMMISSION REVIEW AND APPROVAL OF THE CHANGES TO THE ALTERNATE RETIREMENT PLAN (ARP) DOCUMENT Mr. Luciano moved, seconded by Mr. Greatorex to table Item 16 to allow the Legal subcommittee to review and approve the changes to the ARP document. All voted in favor.

Unanimous Decision

17. REQUEST COMMISSION REVIEW AND APPROVAL OF WEBSITE FREQUENTLY ASKED QUESTION REGARDING DISABILITY RETIREMENT Mr. Luciano moved, seconded by Mr. Greatorex to review and approve the website of Frequently Asked Questions regarding disability retirements. Mr. Casella asked if we are only approving one question here. Mr. Greatorex said that is all the supporting documentation shows. Mr. Casella asked if there is an earnings offset with regard to disability retirement for state employees. Is there any disability a state employee can get where it would be limited by outside earnings. Colin Newman said it is possible because it is a combination of outside earnings and disability income, with a maximum limit. Mr. Casella indicated this answer does not reflect that. Attorney Rose will take a look at this with Mr. Newman and rewrite the answer to this question. Mr. Casella moved, seconded by Ms. Mandour to table Item 17. All voted in favor.

Unanimous Decision

18. REQUEST COMMISSION REVIEW DISCUSSION OF DIVISION REQUEST REGARDING DAWN HEMINGWAY Mr. Luciano moved, seconded by Mr. Greatorex to review and discuss the division request regarding Dawn Hemingway. All voted in favor. Deputy Comptroller Carlson asked for clarification on what the division is directed to do here. Chairman Adomeit responded that this only asks the Commission to review it. This issue went before the subcommittee and Ms. Halpin does not know what to do with it. Chairman Adomeit said if it makes sense, the Commission's General Counsel can meet with the attorneys for the division. Chairman Adomeit just wants the Commission to know this is happening. Mr. Casella asked what is the last day of work for those on disability? The last day that they actually worked or the last day that they received worker's compensation? It would be inappropriate to retire them before that stream ran out. That clock should not start running until the worker's compensation is final. Mr. Luciano said this is not the first time this has happened, where you don't know if they are coming back to work after an injury, but then they didn't file within a year. It was impossible for us to know if we assume they are coming back to work. The division has allowed the one year limit to not apply. Deputy Comptroller Carlson said that case was in MERS, but we have determined that they are still an employee while receiving worker's compensation. Mr. Newman has the facts on this particular case. Attorney Braswell suggested Mr. Newman and Attorney Rose look into this matter further.

Mr. Newman said that the facts of this case are that this individual's last day of actual work was in July 2013. She received worker's compensation, but then she received a vacation payout in September of 2014 when the agency officially terminated her. Our question was whether the two year clock starts from her last day in 2013 or after her vacation payout in 2014 when she was terminated? Mr. Poulin asked how this was treated in the past. Mr. Newman said prior to the change in regulations in 2012, the statute of limitations changed. Regardless of the last day of employment, individuals used to be allowed to apply for disability retirement even if it was 3 or 4 years later. We have only had 1 or 2 cases since the change. Ms. Grasso-Egan asked if there is a questionable situation here. What about employees that cannot step foot on the premises, or are on light duty status for two years? There are a lot of shades of grey. Ms. Grasso-Egan asked for more advice from legal counsel. Attorney Braswell said that they discussed with Mr. Newman and decided they needed a full analysis and passed to Chairman Adomeit and Attorney Rose. This should be passed on to subcommittee to see if legal counsel should give a full legal analysis.

Mr. Carey asked if they could conclude for this situation, that they can indeed apply because they technically were employed until the agency terminated her in 2014. He asked if we could say yes to this situation but continue to analyze for future cases. Mr. Casella asked if under that scenario they could still get worker's compensation. Attorney Rose said yes, they can get temporary disability and MMI after being separated. Mr. Casella said suppose they retire and they are still on worker's compensation, and they come to the conclusion that they can file again. Will you get an improvement in your benefits because the worker's compensation would be credited? But that would move their retirement date. Generally, no one would retire until the worker's compensation is finished. Attorney Rose said the person also came to his office, and that he already told her to apply if she wants to. Ms. Grasso-Egan said they have another case, but the question there is must she apply. Ms. Mandour said for this particular case we could decide, but then allow the legal counsel to look at this for future cases. Ms. Brown-Brewton said she is uncomfortable with this unless we get the legal counsel advice first. Mr. Poulin said that the consensus is that the answer to the question is yes. There is the actual calculation of the disability benefit, so the worker's compensation affects this. Mr. Luciano said he's not sure if this is a legal question. He said a reasonable person could assume that paid employment is what happened in September of 2014. Ms. Mandour agreed that for this case, there isn't a legal question. Mr. Casella said that no action at all can be brought under this, so he thinks that all of this regulation should be reviewed. Attorney Braswell said she is already in the process of doing this. Mr. McLellan asked if Attorney Rose's statement to her to not wait to file was in writing. Attorney Rose said yes. Mr. Carey said if she's been advised to proceed, then as Ms. Brown-Brewton indicated, the matter should be reviewed. Chairman asked if we are asking for an attorney's opinion. No motion needed.

Unanimous Decision

19. REQUEST COMMISSION REVIEW OF LETTER FROM SENATOR DOYLE REGARDING DR. RONALD JOHNSON Mr. Luciano moved, seconded by Mr. Greatorex to review letter from Senator Doyle regarding Dr. Ronald Johnson. All voted in favor. Chairman Adomeit wants the Commission to know that we get letters like this. He will write Dr. Johnson again that they have a process and if he has an issue before the Commission, he needs to follow the process. He will cc Senator Doyle as well. He wanted to alert the Commission first. They have already voted on this issue, but simply informing the Commission.

Unanimous Decision

NEW AGENDA ITEM

Mr. Luciano asked about a point of personal privilege. Two corrections officers were caught between thinking they were going to get x amount of money, but because of the IRC 415 issue, they got less than they thought they were going to get. Some have been able to fix it by staying employed longer. But 415b penalizes those for retiring too early. They had included corrections under the police, fire, and ambulance exemption. The IRS ruled that it depends on what the mission is and since corrections is the main mission, they are not exempt. These individuals were not allowed to return back to work because they had already retired, and they contact Mr. Luciano on a monthly basis. Five years is a long time, and since we have Attorney Barth here, maybe we can discuss this item. Mr. Luciano thinks the status was that they were going to change the status of the PLRs. Can Attorney Barth summarize where we are?

Mr. Luciano moved, seconded by Ms. Mandour to add this item to the agenda. All voted in favor. Attorney Rose said the Commission cannot go into executive session because the case is pending litigation. Attorney Barth said the 415 issue is one we continue to work on, and there is a lot we have to do to be able to go to the IRS. Attorney Barth said this is all he can really say. They have not brought the case to the IRS yet. Things need to be done before they can come to the Commission to get approved. Mr. Quiros asked if anyone retires and the calculation not affected by 415b, collected for 7 years, at the end there could be an adjustment. What about overpayment? Attorney Barth said no decisions have been made at this time. Attorney Rose said he suggests the gentlemen come to the Legal subcommittee meeting because they have very specific questions that may be addressed better there. Maybe they could work on a more micro level. Their problem sounds compelling, maybe there is a solution. We will put on the agenda of the Legal subcommittee. In response to a question about the QEBA, Mr. Casella said he doesn't know how we can help, it isn't in our ballpark, it is likely a legislative issue. Ms. Grasso-Egan asked if he had heard of any cases nationally where the IRS ruled there is a safe haven or anything of that nature if overpayments happened. Attorney Barth said the IRS has been flexible at times. The IRS did threaten to shut down a Rhode Island plan because it exceeded 415b limits, but when they agreed to change their process, they let it go.

Unanimous Decision

EXECUTIVE SESSION ITEMS FOR DISCUSSION AND POSSIBLE ACTION

Mr. Luciano moved, seconded by Mr. Greatorex to enter executive session. Ms. Halpin, Attorney Braswell and Mr. Newman remained in the room. All voted in favor.

Unanimous Decision

1. Whitman Matter. Written Legal Opinion
2. Sullivan/MEB Petition. Written Legal Opinion.
3. Maturo Administrative Appeal. Pending Litigation
4. Brown Update. Pending Litigation
5. Thompson UPSEU Update. Pending Litigation

Out of Executive Session - Action Taken

On the Whitman matter it was determined that the Retirement Commission minutes of the October 2015 meeting be amended to reflect that a Petition for Appeal was requested. Mr. Luciano moved to amend the Retirement Commission minutes of the October 2015 meeting as stated, Mr. Coffey seconded the motion. All voted in favor.

Unanimous Decision

 

ADJOURNMENT

With no further business before the Commission, Mr. Luciano moved, seconded by Mr. Greatorex to adjourn at 10:37 a.m.

All voted in favor

 

_________________________ _______________________
Brenda K. Halpin, Director Peter Adomeit, Chairman
Retirement Services Division  

Return to Meetings, Agendas and Minutes Home Page
Return to Comptroller's Home Page