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MINUTES OF MEETING
STATE EMPLOYEES RETIREMENT COMMISSION
OFFICE OF THE STATE COMPTROLLER
55 ELM STREET
HARTFORD, CONNECTICUT 06106
November 19, 2009
TRUSTEES PRESENT
Peter R. R. Blum, Chair
Bob Baus
Steve Caliendo
Charles Casella
Robert Coffey
Richard Cosgrove
Thomas Culley
Steve Greatorex
Ronald McLellan
Claude Poulin
Linda Yelmini
Sandra Fae Brown-Brewton
ABSENT
Sal Luciano
Paul Fortier
OTHERS PRESENT
Mark Ojakian, Deputy Comptroller and Division Director
Karen Buffkin, Counsel for the State Comptroller
Jeanne Kopek, Asst. Director, Retirement Services
Helen Kemp, Esq., Asst. Director, Retirement Services
Colin Newman, Asst. Director, Retirement Services
Peggy Gray, Executive Assistant, Retirement Services
GUESTS
George Spurlock, CEUI
CALL TO ORDER
The Chairman called the meeting to order at 9:05 AM
CHAIRMAN' S REPORT
The RFP for the 3rd Party administrator for the 457, 403 (b), and 401 (a) Defined Contribution Plans, Stable Value Manager, Custom Target Date Manager, Individualized Advice/investment Research Services Provider, went out this week. This contract is more involved than previous ones. Interest has already been shown, and inquires have been made. A meeting of the subcommittee will be planned soon.
Linda Yelmini was recognized by the Chair. She is concerned about the
amount of time Trustees are now spending on meetings for work that Division
Staff can provide. Mr. Caliendo, Ms. Fae Brown-Brewton, Mr. Baus and Mr.
Cosgrove expressed similar concerns. Mr. Greatorex felt that the Division
staff could develop a matrix to summarize
parties interested in the RFP and give that information to Trustees and cut down
on the number of meetings now being held.
Mr. Ojakian will speak with Dr. Woodruff about creating a matrix and getting
the staff analysis to Trustee members. The Chair was in agreement.
DIVISION DIRECTOR' S ADMINISTRATIVE AND SUBCOMMITTEE REPORT
As of October 31, 2009, the Pending Disability Applications are as follows:
Applications pending review, 84. For the month of October the number of applications received was 25. There were 28 applications on the agenda and of that number 20 were approved.
At the present time, we are reviewing October 2009 cases. Reviews are being done in chronological order and as such either the cases are being scheduled for the Medical Examining Board' s review or medical documentation is being requested. We receive requested medical documentation on a daily basis which allows the scheduling of the pending cases. The next available meeting for scheduling is February 2010.
Following the close of the November 2009 retirement payroll, the current backlog of unfinalized retirement records is approximately 10,508. The Division processed 84 new retirees to the payroll. 63 were normal and 21 were disabilities. Finalizations for the month were 72.
There are three new employees in the audit unit. They are in the process of being trained. We are projecting 7-8 years before all retirements will be finalized.
Longley has started with the November 2001 retirees. They were not done for this payroll cycle, it will start with the December payroll.
Just a reminder, Division employees who took the RIP will be leaving July 1, 2010. We have requested refills of the positions. If they are not approved, finalization is projected to take 9-10 years.
There were a couple of new appointments to the Medical Examining Board. We hope with the additional folks the process will be smoother.
And last, but not least, you have a copy of the new Benefits Statement. I will be happy to entertain any questions on that.
Mr. Chairman, hearing no questions can I have a motion for the Commission to approve the minutes for the October meeting.
NEW MATTERS
1. REQUEST COMMISSION APPROVAL OF THE OCTOBER 15, 2009
MINUTES.
Mr. Casella moved, seconded by Mr. Poulin to approve the minutes of October 15,
2009.
All voted in favor.
Unanimous Decision
2. REQUEST COMMISSION APPROVAL OF THE STATE EMPLOYEES RETIREMENT COMMISSION CHAIRMAN' S PER DIEM EXPENSE REIMBURSEMENTS. Mr. Casella moved, seconded by Mr. Greatorex to approve the State Employees Retirement Commission Chairman' s Per Diem Expense Reimbursements. All voted in favor.
Unanimous Decision
3. REQUEST COMMISSION APPROVAL OF THE STATE EMPLOYEES
RETIREMENT SYSTEM SERVICE RETIREMENTS FOR THE MONTH OF OCTOBER 2009. Mr.
Poulin moved, seconded by Mr. Baus to approve the State Employees Retirement
System Service Retirements for the month of October 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 OCTOBER 2009. Mr. Poulin moved, seconded by Mr. Baus to approve the State Employees Retirement System Voluntary Pending Disability Retirements for the month of October 2009. All voted in favor.
Unanimous Decision
5. REQUEST COMMISSION REVIEW OF THE STATE EMPLOYEES RETIREMENT SYSTEM DISABILITY RETIREMENTS FOR THE MONTH OF OCTOBER 2009 APPROVED BY THE MEDICAL EXAMINING BOARD AS OF SEPTEMBER 30, 2009.
RETIREMENT DISABILITIES REVIEWED
6. REQUEST COMMISSION APPROVAL OF THE CONNECTICUT STATE EMPLOYEES RETIREMENT SYSTEM RETROACTIVE RETIREMENTS FOR THE MONTH OF OCTOBER 2009.
Mr. Poulin moved, seconded by Mr. Baus to approve the Connecticut State Employees Retirement System Retroactive Retirements for the month of October 2009. All voted in favor.
Unanimous Decision
7. REQUEST COMMISSION APPROVAL OF THE CONNECTICUT STATE EMPLOYEES RETIREMENT SYSTEM PRE RETIREMENT DEATH BENEFIT RETIREMENTS FOR THE MONTH OF OCTOBER 2009. Mr. Poulin moved, seconded by Mr. Baus to approve the Connecticut State Employees Retirement System Pre Retirement Death Benefit Retirements for the month of October 2009. All voted in favor.
Unanimous Decision
8. REQUEST RETIREMENT COMMISSION APPROVAL OF THE MUNICIPAL RETIREMENT SYSTEM RETIREMENTS FOR OCTOBER 2009. Mr. Poulin moved, seconded by Mr. Baus to approve the Municipal Retirement System Retirements for October 2009. All voted in favor.
Unanimous Decision
9. REQUEST COMMISSION APPROVAL OF THE CONNECTICUT PROBATE JUDGES AND EMPLOYEES RETIREMENT SYSTEMS RETIREMENTS FOR THE MONTH OF OCTOBER 2009. Mr. Poulin moved, seconded by Mr. Baus to approve the Connecticut Probate Judges and Employees Retirement Systems Retirements for the month of October 2009. All voted in favor.
Unanimous Decision
10. REQUEST COMMISSION APPROVAL OF THE CONNECTICUT PROBATE JUDGES AND EMPLOYEES RETIREMENT FUND PERSONAL EXPENSES FOR THE MONTH OF OCTOBER 2009. Mr. Poulin moved, seconded by Mr. Baus to approve the Connecticut Probate Judges and Employees Retirement Fund Personal Expenses for the month of October 2009. All voted in favor
Unanimous Decision
11. REQUEST COMMISSION APPROVAL OF THE STATE EMPLOYEES RETIREMENT COMMISSION MANAGEMENT TRUSTEES PER DIEM AND TRAVEL EXPENSES REIMBURSEMENTS. Ms. Brown-Brewton moved, seconded by Mr. Greatorex to approve the State Employees Retirement Commission Management Trustees Per Diem and Travel Expenses Reimbursements. All voted in favor. Mr. Baus abstained.
Majority Decision
12. REQUEST COMMISSIONAL APPROVAL OF THE STATE EMPLOYEES RETIREMENT COMMISSION UNION TRUSTEES PER DIEM AND TRAVEL EXPENSES REIMBURSEMENTS. Mr.Greatorex moved, seconded by Mr. Caliendo to approve the State Employees Retirement Commission Union Trustees Per Diem and Travel Expenses Reimbursements. All voted in favor. Mr. Poulin abstained.
Majority Decision
13. REQUEST COMMISSION APPROVAL OF THE STATE EMPLOYEES RETIREMENT COMMISSION CALENDAR FOR 2010. Mr. Culley moved, seconded by Ms. Brown-Brewton to approve the State Employees Retirement Commission Calendar for 2010. All voted in favor.
Unanimous Decision
14. REQUEST COMMISSION APPROVAL OF THE CONNECTICUT MUNICAL EMPLOYEES RETIREMENT FUND B STATEMENT OF OPERATIONS FOR THE FISCAL YEAR ENDING JUNE 30, 2009. No approval is necessary, informational purposes only.
15. STATE EMPLOYEES RETIREMENT SYSTEM STATEMENT OF OPERATIONS AND BALANCE SHEET FOR FISCAL YEAR ENDING JUNE 30, 2009. No approval necessary, informational purposes only. Chairman Blum would like to have staff come to the next Commission meeting and explain the information in detail to the Trustees.
16. REQUEST COMMISSION CONSIDERATION OF THE OCTOBER 22, 2009 RECOMMENDATIONS RECEIVED FROM ITS SUBCOMMITTEE ON HAZARDOUS DUTY SERVICE CREDIT. Ms. Yelmini moved, seconded by Mr. Casella to approve the recommendations received from the Subcommittee on Hazardous Duty Service Credit. All voted in favor.
Unanimous Decision
17. REQUEST COMMISSION CONSIDERATION ON TABLED ITEMS AND ON THE RECOMMENDATIONS RECEIVED FROM ITS SUBCOMMITTEE ON REGULATION AND OVERPAYMENT ON OCTOBER 6, 2009.
A. Michael Cozzolino
Mr. Cozzolino, through his Attorney Charles Fresher, requested a hearing on his
request for reconsideration of the Commission'
s July 16, 2009 decision on his
request for a waiver of the repayment of the overpayment of $203,639.52. A
hearing was held on September 17, 2009. Mr. Cozzolino requested the
Commission to waive the overpayment, or, in the alternative to limit it to a
lesser amount - such as $2,828.33 for 72 months. At the hearing, Mr. Cozzolino'
s
attorney also requested that the Commission "offset" attorney fees spent by Mr.
Cozzolino to receive Sec. 5-142a benefits. The Commission deferred action on
this request until it received additional information with regard the amount of
attorney fees paid to date with regard to Section 5-142a.
Action: Linda Yelmini moved and Sandra Fae Brown-Brewton seconded to deny Mr. Cozzolino' s request for reconsideration finding there was no information in the documentation submitted to date that indicates that any of the Commission' s July 16, 2009 findings were wrong or erroneous at the time they were made. The Commission declined to change the rate of repayment and, based upon Division Counsel' s analysis of the attorney fees offset (for Section 5-142(a) benefits) declined to allow this offset. Unanimous decision.
B. Priscilla Dickman
Ms. Dickman requested a hearing on her request for reconsideration of the Commission' s July 16, 2009 decision on her request for a waiver of the repayment of the overpayment of $25,865.09. A hearing was held on September 17, 2009. Ms. Dickman was represented at the hearing by Attorney Robert Krzys. Ms. Dickman did not attend the hearing. At that meeting, Attorney Krzys stated that they were no longer disputing the fact that attorney fees had been correctly applied. He noted Ms. Dickman was withdrawing her claims that the legal fees paid to her social security attorney and workers compensation attorney(s) were not deducted from her offsets: that they were deducted (social security) and are being deducted (workers compensation).
The Commission considered modifying Ms. Dickman' s monthly repayment from $1500 per month to $538.00 not for reasons of financial hardship but rather to resolve all issues regarding the overpayment. The Commission needed formal agreement by Ms. Dickman that if this modification occurred it would completely resolve any and all issues, claims and disputes that may exist between Ms. Dickman, the Commission and the Retirement Division with regard to this overpayment and the waiver process. The Commission asked Division Counsel to negotiate and secure an agreement with Ms. Dickman (through her attorney) in accordance with the Commission' s position. Division Counsel reported to the Commission at the November 19, 2009 meeting that while she had been in contact with Ms. Dickman' s attorney concerning such an understanding, Ms. Dickman has yet to enter into any formal agreement. Division Counsel also reported her understanding that Ms. Dickman has terminated Attorney Krzys' representation of her in this matter.
Action: Linda Yelmini moved and Sandra Fae Brown-Brewton seconded to deny Ms. Dickman' s request for reconsideration finding there was no information in the documentation submitted to date that indicates that any of the Commission' s July 16, 2009 findings were wrong or erroneous at the time they were made. The Commission declined to change the rate of repayment and also directed Division Counsel to file a lien with the workers compensation commission pursuant to CGS Section 5-170.with regard to the remaining overpayment in the case of a full and final Stipulated Agreement. Unanimous decision.
The Commission also directed the Division to notify attorneys and other legal representatives that in the future, the client (retiree or claimant) must accompany the attorney or representative to the hearing or the hearing will not go forward.
C. Blanka King (SERS)
Beginning in 2002, Mrs. King (an optionee) was informed that as a result of
an error made in 1989 when her husband retired, she was overpaid the amount of
$31,234.03. Her husband had chosen a 50% option but there had been an
error in the calculation and as a result Mrs. King had been overpaid for
approximately 12 years. Mrs. King did not dispute the amount of the
overpayment. She requested a waiver. Her file indicates that her appeal
was heard on several occasions by the Commission and the Overpayment
Subcommittee from 2003 through 2006. On several occasions she was asked to
submit tax returns, bank statements and a financial affidavit.
At its October 15, 2009 meeting, the Commission found that (1) Ms. King was not
at fault as fault is defined in the waiver of overpayment regulations and (2)
Ms. King could not have reasonably known of this error. Because Mrs. King
reached the first two prongs, she therefore reached the prong of whether there
was financial hardship and whether equity required waiver in this case. A motion
was made to deny Mrs. King's request for waiver and to establish a repayment
rate of $249.24 for 125 deductions and one final deduction of $79.03 - said
repayment to be taken from Mrs. King'
s monthly retirement benefit. The vote at
this meeting was a tie vote and as it was a tie vote, it went to the Chair to
case the deciding vote. The Chair tabled his decision until the
Commission'
s November 19, 2009 meeting.
Action: At the Commission'
s November 19, 2009 meeting the Chair
voted to deny Mrs. King's request for waiver and to establish a repayment rate
of $ 249.24 for 125 deductions and one final deduction of $79.03. While
the Chair acknowledged the length of time that had evolved, he noted that Mrs.
King had been informed in 2002 of the overpayment and for the past seven (7)
years knew both the amount of the overpayment and the fact the Commission was
seeking to secure repayment of this amount. He noted that with knowledge that
this overpayment existed, she sold her Connecticut home and her business and
then took the monies from these sales to purchase her home in New Jersey - which
by her own financial affidavit indicated over $321,000 in equity. Based
upon these facts he could not find that financial hardship existed or that
repayment was inequitable. Therefore, effective with the next retirement payroll
check, Mrs. King is to repay this amount with a repayment rate of $ 249.24 for
125 deductions and one final deduction of $79.03.
D. Marie Laterza (SERS)
Division records show that Ms. Laterza applied for a service-connected
disability retirement effective September 1, 1993 from Southern Connecticut
State University was approved by the Medical Examining Board at its meeting of
January 27, 1995. She was informed in several letters that receipt of a
disability retirement income was offset by social security benefits, workers
compensation payments and future outside earnings. She was receiving
workers compensation payments at the time of her retirement although the nature
and amount of the payments changed over the years.
The Commission took note that workers compensation payments and social security
disability benefits are not always "dollar for dollar" offsets to a SERS
retirement benefit but rather are just one factor in a statutory formula.
Therefore, a disability retirement may start with one monthly benefit amount and
then be reduced if and when the members receives social security disability or
workers compensation benefits and increase (or further decrease) due to changes
in those benefits. Workers compensation benefits alone may not reduce a
benefit but when coupled with SSDI payments may severely reduce - or even
eliminate in its entirety - a SERS disability retirement monthly benefit amount.
With regard to Ms. Laterza, records indicated that she applied for and ultimately received Social Security Disability benefits effective April 2002 with a base rate of $660.00. Division records show that Ms. Laterza' s base workers compensation rate was $980.80 which increased over the years to $1,668.34 bi-weekly as of November 10, 2006. The combination of these amounts caused an overpayment. Beginning in March 2002, Ms. Laterza was being paid a SERS benefit when she was not entitled to any SERS benefit due to the combination of social security and workers' compensation income she received. The difference between the amount she should have been paid and actually were paid from March 2002 to July 2009 is $ 217,359.99. Thus she has been overpaid in the amount of $217,359.99. It is important to note that at the present time she is not entitled to a SERS benefit due to this offset.
Ms. Laterza does not dispute that she received these benefits but rather that she, as was her obligation, informed the Division on several occasions since 2002 that she was collecting workers compensation and social security benefits (although not the amount) and the Division did not take any action as to further investigation or recovery at those times. Accordingly, she asserts, it is inequitable for the Division to seek the full amount at this time - seven (7) years later. The Division admits that Ms. Laterza did notify it that she was collecting workers compensation and social security on several occasions from 2002 to 2008 but that Division staff was unable to investigate whether the receipt or the amounts of these monies caused an overpayment.
Utilizing Ms. Laterza' s financial affidavit that she submitted to the Commission, the Commission found that she had a monthly income of approximately $6,200.00 (does not include any SERS benefit) and monthly expenses of $4,380. Ms. Laterza has a Mortgage with Citimortgage and $128,101.00 of equity in her home (condo).
Action: Linda Yelmini moved; seconded by Charles Casella to deny
Ms. Laterza'
s request for waiver. The Commission found that Ms. Laterza
was not a fault as fault is defined in the Waiver Regulations; (2) Ms. Laterza
knew that a workers'
compensation and SSDI benefits were offsets to her SERS and
she did notify the Division of the receipt of these benefits. Although Ms.
Laterza reached the third prong of whether there was financial hardship, the
Commission found that Ms. Laterza did not show that repayment of the amount was
a hardship and that the appropriate repayment rate for Ms. Laterza was the
amount of $1,500 for 145 months. As she has no SERS retirement benefit,
the Commission instructed Division Counsel to attempt to secure this repayment
from her workers compensation payment pursuant to CGS Section 5-170 or in the
alternative to talk to Ms. Laterza'
s counsel to work out an alternative
repayment arrangement acceptable to the Commission. The Commission also directed
Division staff in the future to completely eliminate any retirement benefit
being given to retirees who have had their benefit "zeroed" out by offsets.
Unanimous decision.
E. Ann Stupak (MERS)(Optionee)
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. Mrs. Stupak is the surviving spouse of
a CMERS employee Joseph Stupak. Under the authority of CGS Sec. 7-439h,
the Commission previously determined that it may seek or secure repayment from
the spouse of a member: that is, the overpayment to the member may be
collected from spouse'
s monthly benefit if the spouse is contingent annuitant of
the member and receiving a MERS benefit.
When Mr. Stupak retired via a non-service connected disability retirement
effective October 1, 1999, he was advised via letter October 29, 1999 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. Stupak began receiving the SSDI benefits in February
2003. He did not notify CMERS of the award. The amount of overpayment
since February 2003 to the time it was discovered totaled $65,239.36.
Mrs. Stupak has asserted that she was not aware of this requirement. Her
position is that her late husband experienced medical problems (from the time he
applied for benefits until the time he died) which caused him to forget his
obligation to report this award to MERS. Medical Affidavits were submitted from
former caretakers and physicians of Mr. Stupak. A finding from the Medical
Examining Board (made at the time Mr. Stupak'
s application was approved) appears
to support the position of Mrs. Stupak that her husband experienced medical
problems which caused him to forget his obligation to report this award to MERS.
The Commission determined from Mrs. Stupak'
s Affidavit and the other financial
information provided that she worked both full and part time as a nurse and had
a monthly income of $6,917. Monthly expenses were harder to ascertain due
to some inconsistencies in the financial material provided to the Commission:
accordingly Mrs. Stupak'
s monthly expenses were determined to be $3,050.00.
Assets include Banking accounts of $46,121.00 and 401 K $84,000.00 and Home
Equity of $181,900.00.
Action: Linda Yelmini moved; seconded by Sandra Fae Brown-Brewton to deny Mrs. Stupak' s request for waiver. The Commission found that: (1) Mrs. Stupak was not at fault as fault is defined in the current regulations; (2) Mrs. Stupak could not have reasonably known that her husband had an obligation to notify MERS upon receipt of a social security disability award. As Mrs. Stupak met the first two prongs of the criteria she reached the third prong of whether there was financial hardship. The Commission found that based upon the information provided, Mrs. Stupak' s did not show that repayment of the amount was a hardship. The Commission found that the appropriate repayment rate for Mrs. Stupak is the amount of $1,087.32 from her monthly benefit for 60 months. Unanimous decision.
ADJOURNMENT
Mr. Greatorex moved to adjourn, seconded by Mr. McLellan. All voted in favor.
Meeting adjourned at 10:40 AM.
______________________________
Peter R. Blum. Chairman
State Employees Retirement Commission
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