Amended Minutes

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

June 18, 2009

TRUSTEES PRESENT

Peter R. Blum, Chairman
Bob Baus
Steve Caliendo
Charles Casella
Robert Coffey
Richard Cosgrove
Thomas Culley
Mary Marcial
Ronald McLellan
Claude Poulin
Linda Yelmini
Paul Fortier

ABSENT

Sal Luciano
Steve Greatorex
Jeffrey Smith, Municipal Liaison

OTHERS PRESENT

Mark Ojakian, Deputy State Comptroller & Director, Retirement Services
Helen Kemp, Asst. Director, Counsel for Retirement Services
Colin Newman, Asst. Director, Retirement Services
Jeanne Kopek, Asst. Director, Retirement Services
Karen Buff kin, Counsel for the State Comptroller
Dr. Thomas Woodruff, Director Benefit Services
Margaret Hearing, Asst. Director, Benefit Services
Peggy Gray, Executive Asst., Retirement Services

CALL TO ORDER:

The Chairman called the meeting to order at 9:15.

CHAIRMAN'S REPORT:

The Chairman started the meeting by recognizing Mary Marcial, who is retiring during the RIP, for all her years of service on the Commission. Mary will be missed. Mary thanked the Chair for the refreshments he provided, stated that in the six years she has been a Commission Trustee it has been her favorite body to serve on. She welcomed the camaraderie and really felt part of something that can make a difference in someone's life.

The Chairman also reported that the case before them in District Court had been dismissed.

DIVISION DIRECTOR'S ADMINISTRATIVE AND SUBCOMMITTEE REPORTS

Administrative

The Director reported that the current backlog of unfinalized retirement records is approximately 7,198. The Division processed 630 new retirees (616 normal, 14 disabilities) to the payroll. Finalizations for the month were 20. The total number of files completed for the month totaled 650. The total number of retirement applications effective July 1, 2009 received so far is 1328. The Director also told the Commission that additional staff from other areas in the Comptroller's are assisting with the RIP. Bob Coffey asked how many more applications were to be expected. At a state-wide managers meeting a number of 3500 was given out as a total. The Director stated that he could only report on the numbers that have come in at this time. We are aware that some people are holding applications until the last minute, but could not guess what the final number would be.

There are also a couple of memos for the Commission to look over, the GASB Invitation to Comment, a memo on Accrued Vacation usage and Subcommittee Reports that are in the packet.

1. REQUEST COMMISSION APPROVAL OF THE MAY 21, 2009 MINUTES
Bob Baus moved, seconded by Claude Poulin to approve the May 21, 2009 minutes.
All voted in favor

Unanimous Decision
2. REQUEST COMMISSION APPROVAL OF THE STATE EMPLOYEES
RETIREMENT COMMISSION CHAIRMAN'S PER DIEM EXPENSES
REIMBURSEMENT Bob Baus moved, seconded by Claude Poulin to approve the Retirement Commission
Chairman's per diem expenses reimbursement.
All voted in favor

Unanimous Decision
3. REQUEST COMMISSION APPROVAL OF THE STATE EMPLOYEES RETIREMENT SYSTEM SERVICE RETIREMENTS FOR THE MONTH OF MAY 2009. Bob Baus moved, seconded by Claude Poulin to approve the Retirement System
Retirements for the month of May, 2009
All voted in favor

Unanimous Decision
4. REQUEST COMMISSION APPROVAL OF THE STATE EMPLOYEES RETIREMENT SYSTEM VOLUNTARY PENDING DISABILITY RETIREMENTS FOR THE MONTH OF MAY 2009. Bob Baus moved, seconded by Claude Poulin to approved the Retirement System Voluntary Pending Disability Retirements for the month of May, 2009
All voted in favor

Unanimous Decision

5. REQUEST COMMISSION REVIEW OF THE STATE EMPLOYEES RETIREMENT
SYSTEM DISABILITY RETIREMENTS FOR THE MONTH OF MAY 2009
APPROVED BY THE MEDICAL EXAMINING BOARD AS OF APRIL 30, 2009
Bob Baus moved, seconded by Claude Poulin to accept the Retirement System
Disability Retirements for the month of May 2009.
All voted in favor

Unanimous Decision
6. REQUEST COMMISSION APPROVAL OF THE CONNECTICUT STATE
EMPLOYEES RETIREMENT SYSTEM RETROACTIVE RETIREMENTS
FOR THE MONTH OF MAY 2009. Bob Baus moved, seconded by Claude
Poulin to accept the Retirement System Retroactive Retirements for the month
of May 2009.
All voted in favor

Unanimous Decision

7. REQUEST COMMISSION APPROVAL OF THE CONNECTICUT PROBATE
JUDGES AND EMPLOYEES RETIREMENT SYSTEM RETIREMENTS.
Bob Baus moved, seconded by Claude Poulin to accept the Connecticut Probate
Judges and employees Retirement system retirements.
All voted in Favor

Unanimous Decision
8. REQUEST COMMISSION APPROVAL OF THE CONNECTICUT PROBATE
JUDGES AND EMPLOYEES RETIREMENT FUND PERSONAL EXPENSES
FOR THE MONTH OF MAY 2009
Bob Baus moved, seconded by Claude Poulin to approve the Connecticut Probate
Judges and Employees Retirement Fund Personal Expenses for the month of May 2009
All voted in Favor

Unanimous Decision
9. REQUEST COMMISSION APPROVAL OF THE MUNICIPAL RETIREMENT
SYSTEM RETIREMENTS
Bob Baus moved, seconded by Claude Poulin to approve the Municipal Retirement
System Retirements
All voted in Favor

Unanimous Decision
10. REQUEST COMMISSION ACCEPTANCE OF RECOMMENDATIONS OF THE
MEDICAL EXAMINING BOARD FROM ITS MEETING ON MAY 8 2009
RELATIVE TO APPLICATIONS FOR DISABILITY RETIREMENTS
RECEIVED FROM THE MUNICIPAL EMPLOYEES RETIREMENT SYSTEM
Bob Baus moved, seconded by Claude Poulin to accept the recommendations of the
Medical Examining Board from it's meeting on May 8, 2009.
All voted in Favor

Unanimous Decision

11. REQUEST COMMISSION APPROVAL OF THE STATE EMPLOYEES
RETIREMENT COMMISSION MANAGEMENT TRUSTEE'S PER DIEM
AND TRAVEL EXPENSES REIMBURSEMENTS.
Linda Yelmini moved, seconded by Charles Casella to approve the Management
Trustee's per diem and travel expenses reimbursements.
All voted in Favor
Robert Baus abstained

Majority Decision

12. REQUEST COMMISSION APPROVAL OF THE STATE EMPLOYEES
RETIREMENT COMMISSION UNION TRUSTEE'S PER DIEM AND
TRAVEL EXPENSES REIMBURSEMENTS.
Linda Yelmini moved, seconded by Charles Casella to approve the Union Trustee's
Per diem and travel expenses reimbursements.
All voted in Favor
Claude Poulin abstained

Majority Decision
13. REQUEST COMMISSION APPROVAL OF THE PARKING EXPENSES
INCURRED BY CHARLES CASELLA FOR COMMISSION MEETINGS
BETWEEN MARCH 18, 2009 AND JUNE 9, 2009.
Sandra Fae Brown-Brewton moved, seconded by Robert Coffey to approve the parking
Expenses incurred by Charles Casella for Commission meetings.
All voted in Favor
Charles Casella abstained

Majority Decision
14. DISCUSSION OF DRAFT LETTER FROM MILLIMAN TO LEGISLATIVE
LEADERSHIP CONCERNING CONNECTICUT PROBATE JUDGES AND
EMPLOYEE RETIREMENT SYSTEM IMPACT OF COURT
CONSOLIDATION.
Charles Casella moved, seconded by Linda Yelmini to have Becky Seilman go over . Agenda Item # 17 as means of explanation.
All Voted in Favor

Unanimous Decision
17. REQUEST COMMISSION ACCEPTANCE OF THE ACTUARIAL
VALUATION OF THE PROBATE JUDGES AND EMPLOYEES
RETIREMENT SYSTEM FOR CALENDAR YEAR ENDING DECEMBER
31, 2008.
Per Rebecca Seilman: Due to general market conditions, the actual return on Market
Value basis was -21.92% compared to 7.18% for the prior year. The Market Value
of Assets as of December 31, 2008 was $65,177,241 compared to $86,591,319 as
of December 31, 2007. The rate of return on this basis was -6.33% compared to
8.59% for the prior year. This represents a loss compared to the assumed rate of
return of 8.50% for that period. The Actuarial Value currently is less than the Market
Value by $13.0 million. This figure represents market losses that will be gradually
recognized over the coming years. This process well exert upward pressure on the
State's contribution, unless there are offsetting market gains. More information is
available in the report prepared by Milliman.
Robert Baus moved, seconded by Thomas Culley to accept the Actuarial Valuation
and to transmit a letter to the Governor and Legislative leaders informing them of the
Valuation and the impact of PA 2009-114.
All voted in Favor

Unanimous Decision
15. REQUEST COMMISSION APPROVAL OF THE INVESTMENT
SUBCOMMITTEE'S RECOMMENDATION, ON BEHALF OF THE
401 (a) PLAN, TO ADOPT ING'S PROPOSAL FOR INVESTMENT OF
THE GENERAL ACCOUNT ASSETS COMING INTO THE STABLE VALUE
FUND ON JULY 6, 2009. UNDER THE PROPOSAL UP TO 25% OF THE
STABLE VALUE PLAN'S TOTAL ASSETS WILL BE INVESTED IN A
SEPARATE ACCOUNT, MEASURED BY THE BARCLAY'S
INTERMEDIATE AGGREGATE INDEX.

Margaret Haering explained that the Investment subcommittee met on June 9, 2009
and recommended the changes. It would be marginally safer. Less subject to
market fluctuation and it is built into the contract to make changes to the 25/75
ratio if desired in the future.
Charles Casella moved, seconded by Fae Brown-Brewton to accept the
recommendation of the Investment Subcommittee.
All voted in Favor
Unanimous Decision
16. APPROVE THE INVESTMENT SUBCOMMITTEE'S RECOMMENDATION
THAT THE RETIREMENT COMMISSION EXECUTE AN AGREEMENT
WITH ING TO EXTEND THE CONTRACT FOR THIRD PARTY
ADMINISTRATIVE SERVICES ON BEHALF OF THE 401(a) PLAN
UNTIL JULY 1, 2010.
Margaret Haering explained that extension of the contract would be for one year
with the intention to rebid the contract to take affect next July.
Charles Casella moved, seconded by Stephen Caliendo to extend the contract for third
party administration to ING for one year.
All voted in Favor
Unanimous Decision

DISCUSSION

THE APPLICATION OF ACCRUED VACATION AT TERMINATION TO MEET THE MINIMUM SERVICE REQUIEREMENTS FOR ELIGIBILITY PURPOSES.
Discussion was whether accrued vacation time is actual state service time for purposes of determining eligibility for retirement. There is past practice dating back to at least 1969. Actual years of service vs. use of accrued time to meet minimum requirements threshold. There are agreements in place that if you don't qualify without accrued vacation and sick time then you are not eligible. Linda Yelminie moved, seconded by Fae Brown-Brewton that until this issue is resolved the accrual of vacation and sick time is not accepted to meet minimum requirements of the threshold.
10:35 AM - Commission Trustees move to Caucus.
10:50 AM - Commission Trustees reconvene.
Fae Brown- Brewton asked to be recognized by the Chair. As the person who seconded the motion, she believes it is the fiduciary responsibility of the Commission to address this issue.

Chair Calls for a vote on the motion.
5 Aye, members Linda Yelmini, Fae Brown-Brewton, Richard Cosgrove, Stephen Caliendo and Bob Baus.
5 Nay, members Thomas Culley, Ronald McLellan, Charles Casella, Claude Poulin and Paul Fortier.
2 Abstentions, Mary Marcial, Robert Coffey
With a tie vote the Chair casts his vote to leave in place the current practice of using accrued vacation to meet retirement eligibility threshold.

Motion Passes

EXECUTIVE SESSION

Motion made by Thomas Culley, seconded by Stephen Caliendo to go into Executive Session
For purposes of discussing the contracts for Actuarial services. 11:20 AM
11:40 AM - Commission Trustees end Executive Session
Stephen Caliendo moved, seconded by Charles Casella to:
ACCEPT COMMISSION APPROVAL OF RECOMMENDATION OF THE ACTUARIAL
SUBCOMMITTEE FOR ENTERING INTO CONTRACTS WITH BUCK FOR MERS AND CAVANAUGH MCDONALD FOR SERS FOR ACTUARIAL SERVICES ON A BIENNIAL BASIS FOR FOUR YEARS (2009-2013)

Charles Casella stated that the choice was cost driven to save the State some money. Robert Coffey asked if it was the same Cavanaugh that the Commission had in the past and was happy with their services.
Majority voted Aye
Richard Cosgrove voted Nay
Majority Decision
Richard Cosgrove moved, seconded by Stephen Caliendo to accept both contracts for MERS and SERS on a biennial basis and:
APPROVAL FOR THE STATE COMPTROLLER TO NEGOTIATE AND THEREAFTER ENTER INTO CONTRACTS ON BEHALF OF THE RETIREMENT COMMISSION, AFTER FINAL APPROVAL OF THE CONTRACTS ARE GIVEN BY THE RETIREMENT COMMISSION TRUSTEES, FOR MERS WITH BUCK AND SERS WITH CAVANAUGH MCDONALD ACTUARIAL SERVICES ON A BIENNIAL BASIS FOR 2009-2013.

All voted in Favor
Unanimous Decision
Motion made by Stephen Caliendo, seconded by Richard Cosgrove to adjourn. The meeting adjourned at 11:45.
All voted in Favor
Unanimous Decision

_________________________________
Peter R. Blum, Chairman
State Employees Retirement Commission

______________________________________
Mark E. Ojakian
Deputy Comptroller and Director of Retirement Services

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