Click HERE to view the VIDEO of this meeting.
City of Pawtucket Pensions and OPEB Obligations Ad Hoc Committee
Minutes
Meeting 03/29/12
NEXT MEETING: THURSDAY, April 05, 2012, 10:00 AM
· The meeting began at 10:15 AM.
· Members in Attendance: Ernest Almonte, Ronald Wunschel, David Moran, Mark Boisclair, Peder Schaefer, Gary Sasse, Ronald Wunschel and Rosalie DaRosa
· Advising Members in Attendance: Susanne Greschner, Joanna L’Heureux, Finance Director, and Melissa Malone
· Mr. Almonte asked for approval of the previous minutes. Mr. Boisclair made a motion to approve and Mr. Moran seconded the motion. All were in favor.
· Mr. Almonte noted that Caitlyn Nangle from the City of Providence will go over what Providence prepared for OPEB and talk about obstacles, achievement, and suggestions at the next meeting.
· Mr. Almonte said next week will be the last meeting and is also the last date which he will be accepting any new suggestions. From these suggestions he will prepare a draft to the committee to discuss at a meeting to be called at a later date. Mr. Almonte emphasized that the committee is an advisory committee only to prepare suggestions for the Pension and OPEB Plans and the committee’s role ends with the suggestions as it has no authority.
· Ms. Susanne Greschner, Chief of State Municipal Finance Division was asked to review questions and answers to the State Survey. Mr. Almonte asked that she reference where Pawtucket stood (satisfactory or unsatisfactory) on each of the questions. Ms. Greschner noted that the survey was developed at the State Pension Reform Committee made up of 14 members. Before Ms. Greschner started she wanted to emphasize the cooperation and the timely reporting on the survey by all Cities and Town.
· Before the review Mr. Moran asked what the recommendation would be on intervals of making pension actuaries perform a report. Ms. Greschner responded with at least every two years. Mr. Wunschel noted that he was more comfortable with annually completions as it assures up-to-date reporting and needs. Mr. Almonte agreed.
· Mr. Almonte asked if there was an approved listing prepared by the State of actuaries. Ms. Greschner responded that there was not an approved list at this time.
· Ms. Greschner began her review;
Ø Pension Survey:
1) Date of most recent experience study? Many responded with last two to three years. Pawtucket responded not in last 15 years and was one of 8 that did not know, declared never, or was a long time since last report.
2) Are you in the process of hiring an actuary? Most said yes and Pawtucket had hired its actuary to prepare an experience study by April 1st.
3) Date of most recent Actuarial study? Pawtucket 7/1/2010, received on 12/15/2011.
4) How often is actuarial study’s performed? Pawtucket-Annually this puts Pawtucket within GASB Standards.
5) Have you hired an actuary to provide actuarial study by April 1st? Pawtucket – We were told that the 7/1/10 Actuarial Report was acceptable. We will receive a 7/1/11 report after 6/30/12.
6) Who have you hired to perform actuarial studies? Pawtucket – Stone Consulting
7) How was the Governance structure established for Benefit Administration and Investment Assets? Benefit Administration is performed by the Personal Director and created by CBA. Investments by Pension Board created by Ordinance.
8) How were benefit provisions enacted? Pawtucket by contract. A common answer.
9) Where are your plan documents? Within contracts and ordinances held by the Personnel Department.
10) Who has fiduciary responsibility over decisions? Pawtucket – Pension Board on investments. Mayor, Personnel Director and Finance Director on Administration.
11) Who has day to day administration of plan? Pawtucket, Same as #10.
12) Updates on investments? Pawtucket – Monthly
13) Fiduciary Training? Pawtucket – Guided by Morgan Stanley Smith Barney, however no training is currently offered.
14) Custodian of plan Funds? Pawtucket – State Street Bank
15) Pension Asset/Liability Study? None, accept as offered by Morgan Stanley Smith Barney and State Street combined.
· Ms. Greschner continued her review:
Ø OBEB Survey:
1) Date of most recent valuation? 07/01/09
2) Compliance with GASB? Pawtucket – yes
3) Actuarial Firm? Pawtucket – Stone Consulting
4) How are Benefit Provisions enacted? Pawtucket – CBA
5) Plan Documents located? Personnel Department
6) Fiduciary Responsibility for Benefit Administration? Mayor, Personnel Director and Finance Director.
7) Has on OPEB Trust been established? No
Items 8 through 14 were not applicable to Pawtucket because an OPEB Trust has not yet been opened.
· Discussion continued after Ms. Greschner’s presentation.
o Peder Schaefer noted that Stone Consulting is on the approved list of actuaries in Massachusetts.
o Susanne Greschner noted that it was critical for municipalities to make their “annual required contribution”.
o Mr. Almonte noted that if the Police and Fire were ERISA qualified the $140 million unfunded portion of the plan would be required to be funded immediately.
o Mr. O’Connor expressed that Fiduciaries should have training and rules to follow. Mr. Almonte agreed that training should be a pre-requisite to serve on a Board.
o Ms. Malone stated that although the Plan does not come under ERISA, it doesn’t mean you don’t need fiduciary standards.
o Mr. Kelley and Mr. O’Connor expressed that there should be penalties for those who don’t follow rules.
o Ms. Greschner noted that the “experience studies” are due April 1st.
· Mr. Almonte asked Mr. Wunschel what the $2.6 million savings of COLA’s represented. Mr. Wunschel stated he believed it was a high amount because of the compounded savings over a period of years. He noted that he has called the actuary in the last hour for an explanation of the computation and will report the answer at next meeting.
· Mr. Almonte asked Deb McDole to send out the Auditor General’s recent report on pensions within all municipalities to be discussed at the next meeting.
· Ms. Malone stated that it was a good idea for centralization for administration, however each plan of municipalities differ widely, and many require more staff than we would expect. She noted that MERS benefit calculations are prepared by two separate individuals and compared after completion to assure they are applied correctly.
· Retired Fire Captain Noiseux explained that after 33 years he applied for SSN and was reduced 50% for benefits. He noted is he 71 years of age and continues to work to make ends meet. He expressed share sacrifice and fairness must be on top of the committee’s agenda in making any recommendations.
· Retired Police Officer O’Connor seconded Mr. Noiseux comments and continued to express that everyone on police and fire kept their part of their agreement and the City should do as well.
· Mr. Almonte expressed his thanks to the Committee and those in attendance for expressing their views.
· Mr. Almonte asked for a motion to adjourn. Mr. Boisclair made a motion to adjourn and Mr. Moran seconded the motion. All were in favor. The meeting adjourned at 11:50 AM.
Respectfully submitted,
Ronald L. Wunschel Debra McDole
Finance Department Finance Secretary