MINUTES OF MEETING
STATE EMPLOYEE RETIREMENT COMMISSION
55 ELM STREET
HARTFORD, CONNECTICUT 06106

July 19, 2012

TRUSTEES PRESENT
Peter R. Blum
Bob Baus
Charles Casella
Claude Poulin
Steve Greatorex
James Dzurenda
Robert Coffey
Richard Cosgrove
Ronald McLellan
Linda Yelmini
Thomas Culley
Sandra Fae Brown-Brewton
Sal Luciano
Michael Carey

TRUSTEES ABSENT
Paul Fortier

EX OFFICIO MEMBERS
State Comptroller Kevin Lembo
Lee Ann Palladino, CIO, Designee for State Treasurer Denise Nappier

MUNICIPAL LIAISON
Thomas Landry

OTHERS PRESENT
Martha Carlson, Deputy Comptroller
Brenda K. Halpin, Director, Retirement Services Division
Colin Newman, Asst. Director, Retirement Services Division
Kishore Solanki, Asst. Director, Retirement Services Division
Bonnie Price, Asst. Director, Retirement Services Division
Natalie Braswell, Assistant State Comptroller
Peggy Gray, Executive Secretary, Retirement Services Division

GUESTS
George Spurlock, CEIU
Mayor Joseph Maturo
Attorney Larry Sgrignari

CALL TO ORDER

The Chairman called the meeting to order at 9:06 a.m.

The Chairman attended the pre trial on the Bouchard matter. There was some question on the statute of limitation. No brief had been submitted.

Attorney Rose filled a motion to dismiss/ strike to dismiss the class action before the court. The opposing attorney wants to add thousands of other employees. The potential employees have not been through the same process as Bouchard and the two others.

The Retirement Division has sent out the letters on the 415 IRS issue.

DIVISION DIRECTOR'S ADMINISTRATIVE AND SUBCOMMITTEE REPORTS

At last months Commission meeting a question was asked about a Judges, Family Support Magistrates and Compensation Commissioners Retirement System (JFSMCCRS) "Spouse Retirement" report that was an item on the agenda. More specifically the question was asked if it was a pre-retirement death benefit. Jeanne indicated that she assumed that it would be and advised that she would confirm that which she did. However in discussing this with Jim, the unit supervisor it came to her attention that Jim has always provided a report to the Commission whenever a spouse of a deceased judge begins receiving a benefit even if the judge had already retired and his benefit had been previously reported.

As you know, JFSMCCRS is different than SERS. A judge's benefit is based on his salary and service and is payable for the lifetime of the judge. A judge does not have the ability to choose a payment option and there is no actuarial reduction of a judges benefit in connection with payment of a benefit for a surviving spouse or children under the age of eighteen. Pursuant to statute, a surviving spouse of a retired judge is entitled to half of what the judge was receiving at the time of his death. Similarly the surviving spouse of a deceased active judge receives one third of the judges active salary at the time of death. Should the judge be survived only by children under the age of eighteen or should the surviving spouse die before all children are eighteen, the benefit will continue to be payable to the guardian of the child or children for their support.

I believe that the long standing policy to provide all JFSMCCRS surviving spouse benefits to the Commission for approval is due to the fact that these benefits are statutorily driven rather than the result of an election by the retirement system member. Consequently I believe this practice should be continued.

Backlog Articles
When I arrived at the Division there were three major activities happening the 2011 SEBAC Agreement, the Section 415 and the backlog. We have been working through the 2011 SEBAC Agreement and the Section 415 issues. However as you know the retirement backlog has been an issue for many years, and has largely been caused by the influx of applications during early retirement incentives and this latest SEBAC agreement.

Since August of 2011, I have examined the procedures we used to calculate the retirement benefits and have streamlined the process by dedicating 7 staff members to finalizations only.

This change, coupled with the Commissions permission to alter the sequence of finalizations from chronological to expedience, has resulted in our ability to finalize retirement calculations at double the previous rate.

Although the new procedures are a significant improvement, it will still take many years to clear the backlog with the resources we have.

We have established a small workgroup consisting of those staff with the most expertise in this area with the intention of presenting a plan to the commission we feel will address the backlog quickly. I expect to have a proposal for you in the early fall.

Included in our discussions are:

• The possibility of a temporary workforce dedicated to clearing the backlog. This method was used successfully in the early 1990's.
• A review of the criteria for each calculation. We are examining the differences between the pre-audit and finalization audit. Several years ago, Milliman helped the Division automate some of the front-end procedures, which provided some relief.
• The concept of determining a ?common denominator' in the backlog that may allow us to adjust thousands of estimates by a certain percentage, and clearing them all through. A preliminary drill-down has produced significant swings in many finalizations due to purchases, etc.
• Finally, prospectively, we are moving along with the process to implement the pension module in Peoplesoft. During the fit/gap analysis, we will be requesting your guidance on any changes we would like to make to either business processes or the criteria for calculating the pension.

Once we clear the backlog and implement the pension module, we should have a very different environment in the division due to most of the employee history being readily available in Core-CT.

An update on the RFI for the PeopleSoft Pension Module we received six responses last week. We will be scheduling oral presentations beginning the last week of July and in August. We will provide you with the schedule and if you are interested in attending please join us.

The forms for the ARP to Hybrid transfer are complete and are on the website, the letters to all active ARP members have been mailed and the Statewide memorandum to the agencies has been distributed.

Following the close of the July 2012 retirement payroll, the current backlog of unfinalized retirement records is approximately 12,945. The Division processed 185 new retirees (158 normal including 2 ARP to SERS Hybrid transfers, 27 disabilities) to payroll for June. Finalizations for the month were 95.

Pending Disability Applications as of June 30, 2012

FOR THE MONTH OF JUNE

The next available meeting for scheduling is October 2012.

There is a selection committee for Helen's position with two members from the Commission - Mike Carey and Charlie Casella. The position is currently posted on the Comptroller's website with a closing date of Monday, July 30th at 5:00 p.m.

The letters to retirees regarding the Section 415 have been mailed to the individuals that retired in calendar year 2011 and the remainder of the letters will be mailed tomorrow.

NEW MATTERS

1.REQUEST COMMISSION APPROVAL OF THE JUNE 21, 2012
MINUTES- Mr. Luciano moved, seconded by Mr. Poulin to approve the June 21, 2012 Minutes. All voted in favor

Unanimous Decision

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

Unanimous Decision

3.REQUEST COMMISSION APPROVAL OF THE STATE EMPLOYEES RETIREMENT SYSTEM SERVICE RETIREMENTS FOR THE MONTH OF JUNE 2012 - Mr. Luciano moved, seconded by Mr. Poulin to approve the State Employees Retirement System Service retirements for the month of June 2012.
All voted in favor.

Unanimous Decision

4.REQUEST COMMISSION APPROVAL OF THE STATE EMPLOYEES RETIREMENT SYSTEM VOLUNTARY PENDING DISABILITY RETIREMENTS FOR THE MONTH OF JUNE 2012 - Mr. Luciano moved, seconded by Mr. Poulin to approve the State Employees Retirement System Voluntary Pending Disability retirements for the month of June 2012. All voted in favor

Unanimous Decision

5.REQUEST COMMISSION APPROVAL OF THE STATE EMPLOYEES RETIREMENT SYSTEM DISABILITY RETIREMENTS FOR THE MONTH OF JUNE 2012 - Mr. Luciano moved, seconded by Mr. Poulin to approve the State Employees Retirement System Disability retirements for the month of June 2012. All voted in favor

Unanimous Decision

6. REQUEST COMMISSION APPROVAL OF THE STATE EMPLOYEES PRE RETIREMENT DEATH BENEFIT RETIREMENTS FOR THE MONTH OF JUNE 2012 - Mr. Luciano moved, seconded by Mr. Poulin to approve the State Employees Pre-Retirement Death Benefit retirements for the month of June 2012. All voted in favor

Unanimous Decision

7.REQUEST COMMISSION APPROVAL OF THE STATE EMPLOYEES RETIREMENT SYSTEM RETROACTIVE RETIREMENTS FOR THE MONTH OF JUNE 2012 - Mr. Luciano moved, seconded by Mr. Poulin to approve the State Employees Retirement System Retroactive retirements for the month of June 2012. All voted in favor

Unanimous Decision

8.REQUEST COMMISSION APPROVAL OF THE MUNICIPAL EMPLOYEE RETIREMENT SYSTEM RETIREMENTS - Mr. Luciano moved, seconded by Mr. Poulin to approve the Municipal Employee Retirement System retirements. All voted in favor

Unanimous Decision

9.REQUEST COMMISSION APPROVAL OF THE STATE EMPLOYEES RETIREMENT COMMISSION MANAGEMENT TRUSTEE'S PER DIEM AND TRAVEL EXPENSES REIMBURSEMENTS FOR THE MONTH OF JUNE 2012 - Mr. Luciano moved, seconded by Mr. Greatorex to approve the State Employees Retirement Commission Management Trustee's Per Diem and Travel expenses reimbursements for the month of June 2012. All voted in favor Mr. Baus abstained

Majority Decision

10.REQUEST COMMISSION APPROVAL OF THE STATE EMPLOYEES RETIREMENT COMMISSION UNION TRUSTEE'S PER DIEM AND TRAVEL EXPENSES REIMBURSEMENTS FOR THE MONTH OF JUNE 2012 - Mr. Luciano moved, seconded by Mr. Greatorex to approve the State Employees Retirement Commission Union Trustee's Per Diem and Travel expenses reimbursements for the month of June 2012. All voted in favorMr. Poulin abstained

Majority Decision

11. REQUEST APPROVAL OF THREE MATTERS CONSIDERED AT THE APRIL 11, 2012 MEETING OF THE SUBCOMMITTEE ON REGULATIONS AND OVERPAYMENTS

Victoria Demartino (SERS) - (member) - Overpayment due to agency error

Shirlene Lewis (SERS) - (member) - Overpayment due to agency error

Lorraine Montesi (SERS) - (member) - Overpayment due to receiving a social security disability benefit.

Mr. Luciano moved, seconded by Mr. Poulin to accept the recommendations as submitted from the April 11, 2012 meeting of the Subcommittee on Regulations and Overpayment which was to deny Ms. Martino's request for waiver of repayment as she did not meet all the statutory and regulatory requirements required for approval and to table the requests of Ms. Lewis and Ms. Montesi pending further review by the Subcommittee. Ms. Yelmini abstained. All voted in favor

Majority Decision

12.REQUEST DISCUSSION OF ONE MATTER CONSIDERED AT THE APRIL 11, 2012 MEETING OF THE SUBCOMMITTEE ON REGULATIONS AND OVERPAYMENT Partial Waivers - The Subcommittee is seeking direction on whether the overpayment statute or regulation, permit it to recommend partial waivers to the Commission. Mr. Coffey began the discussion on the parameters for repayment. Is it consistent with the Commission voting Yea or Nah on a repayment and does the consensus to allow a partial waiver interfere with what the Division staff is doing? Ms. Brown-Brewton, stated that the regulations went through the Legislature with language that says "any" meaningful partial payment is acceptable. Mr. Coffey, then stated that the Subcommittee on Regulations and Overpayment should be able to recommend to the Commission partial or whole overpayment. Mr. Casella moved, seconded by Mr. Lucian to accept the recommendations of the Regulation and Overpayment Subcommittee of partial or whole repayment on a case by case basis. All voted in favor

Unanimous Decision

AT 9:30 THE RETIREMENT TRUSTEES WENT INTO EXECUTIVE SESSION TO DISCUSS PERSONNEL ISSUES. The Chairman did not need to update the Trustees on the Bouchard matter in Executive Session

AT 10:15 Mr. Luciano moved, seconded by Ms. Brown-Brewton to come out of Executive Session

Ms. Brown-Brewton moved, seconded by Mr. Greatorex to adopt the suggestions on staff performance as discussed in Executive Session. All voted in favor, Ms. Yelmini abstained

Majority Decision

13.REQUEST COMMISSION CONSIDERATION OF THE June 7, 2012 RECOMMENDTATIONS RECEIVED FROM ITS SUBCOMMITTEE ON PURCHASE OF SERVICE AND RELATED MATTERS - Ms. Yelmini moved, seconded by Mr. Greatorex to approve items 1-4 of the recommendations received from its subcommittee on Purchase of Service and Related Matters. Item #5 is tabled for further investigation and discussion. All voted in favor

Unanimous Decision

14.DISCUSSION WITH REGARD TO A SURVEY OF THE MUNICIPAL EMPLOYEES RETREMENT SYSTEM DISABILITY RETIREES. There was discussion among the Trustees with regard to the language used in MERS to define continuation of disability for members. A broader look was requested for moving forward. Mr. Casella asked what the purpose of the disability payment is. Is it income replacement or is it something else. Ms. Yelmini advised the Trustees that the definition in MERS is different than SERS. MERS is closer in line with Social Security Disability and means total and permanent disability. Mr. Luciano also stated that past practice also needs to be taken into consideration. The Trustees agreed that the Legal and Personnel Subcommittee will submit a request to the Attorney General's office for an opinion to determine if the language is adequate, needs clarification, or needs to be changed legislatively to ensure that the correct standard is used for all. Ms. Brown-Brewton moved, seconded by Mr. Greatorex to submit the request to the Attorney Generals office through the Legal and Personnel Subcommittee. All voted in favor

Unanimous Decision

ADJOURNMENT

At 10:47 Mr. Poulin moved, seconded by Mr. Greatorex to adjourn. All voted in favor.

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