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

October 15, 2009

TRUSTEES PRESENT
Peter R. Blum, Chair
Bob Baus
Steve Caliendo
Charles Casella
Robert Coffey
Richard Cosgrove
Thomas Culley
Steve Greatorex
Ronald McLellan
Claude Poulin
Linda Yelmini

ABSENT
Sal Luciano
Sandra Fae Brown-Brewton

OTHERS PRESENT
Mark Ojakian, Deputy Comptroller and Division Director
Karen Buffkin, Counsel for the State Comptroller
Jeanne Kopek, Assist. Director, Retirement Services
Colin Newman, Assist. Director, Retirement Services
Peggy Gray, Executive Assistant, Retirement Services

GUESTS
George Spurlock, CEUI

CALL TO ORDER

The Chairman called the meeting to order at 9:07 AM

CHAIRMAN'S REPORT

To clarify information from my report last month, a motion to reopen has been filed in the Federal Court. The attorney has also petitioned the Division, which was denied. There has been no further correspondence from the attorney at this time.

Also, the Investment Subcommittee met yesterday to begin discussions on an RFP.

DIVISION DIRECTOR'S ADMINISTRATIVE AND SUBCOMMITTEE REPORT

Pending Disability Applications are as follows. 51 applications are pending review. We have 350 applications that we are waiting for further information. There are 168 denied applications for a total of 569. For the month of September as of the 30th, 23 applications were reviewed. 26 applications were put on the agenda. 16 applications were approved. We are now scheduling for the month of January 2010.

Ms. Yelmini asked if we ever close out the cases that are waiting for further information or do we just carry them on the books forever. Mr. Casella asked if there was a way to send out letters to the folks who have files pending to see if they are still interested in pursuing the matter, or if they have retired or passed away. This might clear up some of the backlog of old files. Jeanne Kopek said it was certainly something the division could consider.

For the backlog of unfinalized retirement records as of the close of the October 2009 payroll, the current backlog is approximately 10, 496. The division processed 88 new retirees to the payroll (72 normal, 16 disabilities) Finalizations for the month were 60.

1. REQUEST COMMISSION APPROVAL OF THE SEPTEMBER 17, 2009 MINUTES.

Mr. Baus moved, seconded by Mr. Poulin to approve the minutes of September 17, 2009.
Mr. McLellan pointed out that his name spelled incorrectly. Also noted, in Item 14, concerning Mr. Rodriguez, instead of just stating the motion was 9 to 2, it should be noted that Ms. Brown-Brewton and Mr. Coffey voted against the motion. Mr. Baus, Mr. Caliendo, Mr. Casella, Mr. Cosgrove, Mr. Culley, Mr. Greatorex, Mr. McLellan, Mr. Poulin and Ms. Yelmini voted in favor of the motion. After discussion all voted in favor of the minutes for September 17, 2009.

Unanimous Decision

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

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

Unanimous Decision

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

Mr. Baus moved, seconded by Mr. Cosgrove to approve the State Employees Retirement System Service Retirements for the month of September 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 SEPTEMBER 2009.

Mr. Baus moved, seconded by Mr. Cosgrove to approve the State Employees Retirement System Voluntary Pending Disability Retirements for the month of September 2009. All voted in favor.

Unanimous Decision

5. REQUEST COMMISSION REVIEW OF THE STATE EMPLOYEES RETIREMENTS SYSTEM DISABILITY RETIREMENTS FOR THE MONTH OF SEPTEMBER 2009 APPROVED BY THE MEDICAL EXAMINING BOARD AS OF AUGUST 31, 2009.

The Commission Trustees reviewed.

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

Mr. Baus moved, seconded by Mr. Cosgrove to approve the Connecticut State Employees Retirements System Retroactive Retirements for the month of September 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 SEPTEMBER 2009.

Mr. Baus moved, seconded by Mr. Cosgrove to approve the Connecticut State Employees Retirement System Pre Retirement Death Benefit Retirements for the month of September 2009. All voted in favor

Unanimous Decision

8. REQUEST RETIREMENT COMMISSION APPROVAL OF THE MUNICIPAL RETIREMENT SYSTEM RETIREMENTS.

Mr. Baus moved, seconded by Mr. Cosgrove to approve the Municipal Retirement System Retirements. All voted in favor

Unanimous Decision

9. REQUEST COMMISSION APPROVAL OF THE CONNECTICUT PROBATE JUDGES AND EMPLOYEES RETIREMENT SYSTEMS RETIREMENTS FOR THE MONTH OF SEPTEMBER 2009.

Mr. Baus moved, seconded by Mr. Cosgrove to approve the Connecticut Probate Judges and Employees Retirement Systems Retirements for the month of September 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 SEPTEMBER 2009.

Mr. Baus moved, seconded by Mr. Cosgrove to approve the Connecticut Probate Judges and Employees Retirement Fund Personal Expenses for the month of September 2009. All voted in favor

Unanimous Decision

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

Mr. Caliendo 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

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

Mr. Caliendo moved, seconded by Mr. Greatorex 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. GENERAL ASSEMBLY PENSION FUND BALANCE SHEET AND STATEMENT OF OPERATIONS FOR THE FISCAL YEAR ENDING JUNE 30, 2009.

State Employee Retirement Commission Trustees reviewed the Pension Fund Balance Sheet and Statement of Operations for the fiscal year ending June 30, 2009

14. PUBLIC DEFENDERS RETIREMENT FUND BALANCE SHEET AND STATEMENT OF OPERATIONS FOR FISCAL YEAR ENDING JUNE 30, 2009

State Employee Retirement Commission Trustees reviewed the Statement of Operations and Balance Sheet for the Public Defenders Retirement Fund ending June 30, 2009

15. REQUEST COMMISSION ACCEPTANCE OF RECOMMENDATIONS OF THE MEDICAL EXAMINING BOARD FROM ITS MEETING ON SEPTEMBER 25, 2009 RELATIVE TO APPLICATIONS FOR DISABILITY RETIREMENTS RECEIVED FROM THE MUNICIPAL EMPLOYEES RETIREMENT SYSTEM.

Mr. Baus moved, seconded by Mr. Casella to accept the recommendations of the Medical Examining Board from it's meeting on September 25, 2009 relative to applications for disability retirements received from the Municipal Employees Retirement System. All voted in favor

Unanimous Decision

16. REQUEST COMMISSION CONSIDERATION OF THE RECOMMENDATIONS RECEIVED FROM ITS SUBCOMMITTEE ON REGULATION AND OVERPAYMENT ON OCTOBER 6, 2009

Ms. Yelmini moved, seconded by Mr. Culley to accept the recommendations of the Subcommittee on Regulation and Overpayment for purposes of discussion on the following items:

1. Procedural Recommendation: This item was referred back to the subcommittee for additional review and information.

2. Barry Beecher (MERS) Overpayment = $ 3,565.87 : this was referred back to the subcommittee for clarification as who received the social security disability award.

3. George Brey (SERS) Overpayment = $41,604.28: Mr. Brey's overpayment is due to the receipt of Sec. 5-142(a) payments which he received at the same time he was receiving a hazardous duty retirement benefit. Mr. Brey, through his attorney, had requested Sec. 5-142 benefits from workers compensation in 2007 which was approved. The concurrent receipt of voluntary, normal or hazardous duty retirement income and disability compensation pursuant to Section 5-142(a) is specifically barred by statute. The Division discovered the receipt of this benefit in March 2009. Mr. Brey's SERS retirement benefit was stopped as he continues to receive the Sec. 5-142 benefit. Mr. Brey received a SERS retirement benefit from October 9, 2007 to April 23, 2009 that he was not entitled to receive due to the receipt of Section 5-142 monies. Mr. Brey received an overpayment of $41,604.28 in his SERS benefit from October 9, 2007 through August 31, 2009.

The financial information provided by Mr. Brey indicated the following:

SERS monthly benefit (Oct. 2009) $- 0 -
Workers' Compensation (current) $4,196.00
Annual Income (2008) return $71,124.00
Bank statement $4.947.00
Monthly Expenses: $3,272.00

The information submitted by Mr. Brey indicated discretionary income in the amount of $1500 per month.

Action: Mr. Baus moved; seconded by Mr. Poulin to deny Mr. Brey's request for waiver. The Commission accepted the subcommittee's recommendations and found that: (1) Mr. Brey was not at fault as fault is defined in the Waiver of Overpayment regulations; (2) Mr. Brey (through his attorney) should have reasonably known that his SERS retirement benefit would be completely offset by his receipt of Section 5-142 monies as this is clearly stated in the statute. Because Mr. Brey did not show he could not have reasonably known of this requirement that he did not reach the prong of whether there was financial hardship. Based upon the financial information presented, the Commission found that the appropriate repayment rate for Mr. Brey was the amount of $1,155.83 for 35 months and one payment of $1,155.67 for one month. As he has no SERS retirement benefit, the Commission instructed Division Counsel to attempt to secure this repayment from his workers compensation payment pursuant to CGS Section 5-170.

Unanimous decision.

4. Blanka King (SERS) - Overpayment = $31,234.03: 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. With regard to fault and knowledge, she has argued (in essence and effect) a statute of limitations argument saying that: (1) the error was not her fault; (2) that it took the Division 12 years to catch the error and thus the amount overpaid grew through no fault of hers; and (3) the Commission has taken seven (7) years to decide on Mrs. King's waiver request.

Documents provided by the retiree indicate the following financial information:

SERS monthly benefit (current) $603.38
Social Security monthly benefits (current) $1,769.00
Monthly Income (Total) $2,372.38
Annual Income (2008) return $(52,669)
Bank statement $2,754.00
Monthly Expenses $947.09

The Commission noted that Mrs. King's financial situation is somewhat difficult as Mrs. King has been involved in business ventures and real property sales in the recent past and her 2008 tax return reflects these activities.

Action: Mr. Cosgrove moved; seconded by Mr. Caliendo 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. The Commission found that the: (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. Decision: As it was a tie vote, it went to the Chair to cast the deciding vote. At this point, the Chair decided to table his decision until the next Commission meeting.

5. Norma Olivio (MERS) Overpayment = $ 2,471.44: 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. Olivio retired effective February 5, 2006. She was advised via letter dated March 23, 2006 that her benefit would be reduced at age 62 or upon receipt of a social security disability award. In this letter she was also advised that if she received a social security disability award, she needed to furnish CMERS with a copy of the award notice. Ms. Olivio has been receiving Social Security disability benefits since November 2008. She did not notify CMERS of the award. Although Ms. Olivio submitted financial information, she did not provide a letter or a narrative as to why she was not at fault or could not have reasonably known of this obligation

Documents provided by the retiree indicate the following financial information:

MERS monthly benefit (July 2009) $1,164.00
Social Security monthly benefits (current) $1,550.00
Monthly Income (Total) $2,714.00
Annual Income (2008) return $16,410.00
Bank statement $850.00
Monthly Expenses: $3,272.00

The Commission noted that although her income tax return submitted for 2008 is $16,410.00 her monthly income (with social security added) adds up to approximately $32,000.

Action: Mr.Caliendo moved; seconded by Mr.Baus to accept the recommendations of the subcommittee and to deny Ms. Olivio's request for waiver. The Commission found that (1) Ms. Olivio was not at fault as fault is defined in the regulations; (2) Ms. Olivio could have reasonably known that she had an obligation to notify MERS upon receipt of a social security award as she had been informed of this obligation. Because Ms. Olivio did not meet the second prong of the criteria she could not reach the third prong of whether there was financial hardship. The Commission found the appropriate repayment rate for Ms. Olivio was the amount of $ 102.98 for 23 months and $ 102.90 for one month.

Unanimous decision.

ADJOURNMENT

Mr. Cosgrove moved to adjourn, seconded by Mr. McLellan. All voted in favor.

Meeting adjourned at 10:42 by the Chairman.

______________________________
Peter R. Blum. Chairman
State Employees Retirement Commission

_________________________________
Mark E. Ojakian
Deputy Comptroller and Division Director

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