MUNICIPAL PENSION BOARD MINUTES
TUESDAY, OCTOBER 14, 2008
The monthly meeting of the Municipal Pension Board was called to order at 5:16 p.m. by Chairman, John Ivers.
Present were John Ivers, Gerard Adelman, Brian Kogut, Caroline Beitman, Brian Daniels, Corinne Eisenstein, Martin Lilienthal, and Michael Lupkas.
Also present: Patrick Sheehan and Gerald Glass, Vice Presidents Investments, A.G. Edwards & Sons, Inc.
The Board reviewed the Minutes of the September 9, 2008 meeting and a motion to accept the Minutes as submitted was made by Caroline Beitman, seconded by Brian Kogut. Motion unanimous. Mike Lupkas and Brian Daniels abstained as they were not present at the September Board meeting.
The Board members reviewed the Minutes of the October 7, 2008 Special Meeting. A motion to table the Minutes was made by Martin Lilienthal, seconded by Brian Daniels. Motion unanimous.
Board members reviewed the September Financial Reports for City, Police and Fire. Michael Lupkas, Finance Director, presented the Board with information regarding the reports. A motion to accept the financial reports as submitted was made by Caroline Beitman, seconded by Brian Daniels. Motion unanimous.
The Board questioned the expenditure for the Pension Assistant Ad concerned that it may have been a duplicate billing from the previous month. *
Rose Kevorkian presented the following applications for retirement:
Ø Laura Moran, vested Memorial Hospital employee, early retirement, normal form, effective November 1, 2008, monthly benefit $611.00. A motion to accept Mrs. Moran’s application as submitted was made by Caroline Beitman, seconded by Brian Daniels. Motion unanimous.
Ø Charles Baribeault, Board of Education, Custodian, normal retirement, normal form, effective date October 4, 2008, monthly benefit $941.43. A motion to accept Mr. Baribeault’s application as submitted was made by Gerard Adelman, Seconded by Caroline Beitman. Motion unanimous.
Ø Robert Mercaldi, Assistant Director WPCF, normal retirement, normal form, effective date November 1, 2008, monthly benefit $5347.36. A motion to accept Mr. Mercaldi’s application as submitted was made by Gerard Adelman, seconded by Caroline Beitman. David Lohman, Director of Public Utilities, addressed the Board and thanked Bob for his many years of service and dedication to the City and the department and wished him well in his retirement. Motion unanimous.
Ø Firefighter EMT Michael Majeski, Disability retirement, effective October 15, 2008, monthly benefit $3,781.67. A motion to move to executive session at 5:30 p.m. was made by Gerard Adelman, seconded by Caroline Beitman. Motion unanimous. A motion to move out of executive session at 5:47 p.m. was made by Gerard Adelman, seconded by Brian Daniels. Motion unanimous. A motion to table Firefighter EMT Majeski’s , Disability retirement was made by Gerard Adelman, seconded by Martin Lilienthal
The Board reviewed the invoice from the Hospital of St. Raphael’s for two IME exams. They approved payment for one IME and will make payment for the other exam once the final report is received.
The Board reviewed the legal opinion from City Attorney Moore on IME exams for disability retirements and agreed that they would continue sending individuals who retire under a disability pension for IME’s every 3 years. A motion to schedule IME’s for the 8 retirees who are due for exams was made by Gerard Adelman, seconded by Corinne Eisenstein. Motion unanimous.
The new actuaries, Elizabeth J. Churney and Richard S. Sych, from Hooker & Holcombe introduced themselves to the Board and presented an overview of the pension and postretirement services they provide to the City. Also present was Thomas Messer, PHD from Solucia, a health care actuarial and consulting firm that Hooker & Holcombe contracts with.
Patrick Sheehan presented the Board with an overview of Meriden’s Retirement Funds and reported that pension accounts have suffered substantial losses since the start of the fiscal year, accelerating over the past month. The energy, infrastructure and commodity holdings that had provided excessive gains earlier in the year have sharply reversed. International holdings that provided growth through July also have plunged. And even our year-long defensive strategy of buying US Treasury issues has been challenged, as millions of investors also seeking safety rushed into these AAA securities, driving yields to historic lows. During FY09Q1, the composite funds lost $34.4 million. In October, values have fallen an additional $23.8 million. Fiscal year to date, the composite pension
fund is down 22.9%, standing at $193.7 million as of last Friday’s close.
Corinne Eisenstein made the following motion, seconded by Caroline Beitman:
Resolved, that the Meriden Retirement Board authorizes the following reallocations of investment assets among its portfolio managers, and directs its managers and advisors to raise the appropriate capital for transfer and reinvestment.
To the Board-Directed Account (City Employees Fund “M”)
$4.4 million from Neuberger Berman’s equity portfolio (City Fund “B”)
$910,000 from Templeton Advisors (City Fund “E”)
$260,000 from Armstrong Shaw (City Fund “US”)
$2.5 million from Navellier & Associates (City Fund “NV”)
To the Board Directed Account (Police/Fire Fund “H”)
$500,000 from Neuberger Berman’s equity portfolio (Police/Fire Fund “A”)
$775,000 from Templeton Advisors (Police/Fire Fund “E”)
$400,000 from Armstrong Shaw (Police/Fire Fund “M”)
$130,000 from Navellier & Associates (Police/Fire Fund “NV”)
Further resolved, that the Board notify Nuveen/NWQ/Tradewinds that we are ending our management relationship with them and consolidating their currently assigned assets into the Board-directed fund. The Board extends its thanks to NWQ for its past service.
Motion unanimous.
Corinne Eisenstein made the following motion, seconded by Gerard Adelman:
Resolved, that the Meriden Retirement Board allocates the following assets from its Board-Directed accounts to the following portfolio managers:
From the City Employees Fund M:
$6.3 million to Orrell Capital Management (City Fund “S”)
$850,000 to Anchor Capital Mid-Cap (City Fund “AC”)
$1.1 million to Roxbury Capital Management (City Fund “RX”)
$1.2 million to Wentworth Hauser (City Employees Fund “D”)
From the Police/Fire Fund H:
$4.3 million to Orrell Capital Management (Police/Fire Fund “S”)
$925,000 to Anchor Capital Mid-Cap (Police/Fire Fund “AC”)
$280,000 to Roxbury Capital Management (Police/Fire Fund “RX”)
$1.1 million to Wentworth Hauser (Police/Fire Fund “D”)
Motion unanimous.
Corinne Eisenstein made the following motion, seconded by Gerard Adelman:
Resolved, that the Meriden Retirement Board directs the additional contribution of $1,000,000 to each of its existing accounts at AIS Managed Futures, and that the Board authorizes its chairman (or vice-chairman) to execute the appropriate documents required for these follow-on deposits. Funds for the purchase of additional AIS shares (on behalf of the City Employees Retirement Fund M and the Police/Fire Pension Fund H) shall be provided from the cash balances in those Board-managed accounts.
Motion unanimous.
Corinne Eisenstein made the following motion, seconded by Gerard Adelman:
Resolved, that the Meriden Retirement Board direct the transfer of $1.6 million in funds from its Board-Directed account (City Fund M) to the fixed income “Select Advisor” account, managed by Madison Investment Advisors.
Motion unanimous.
The following resolution was presented by Pat Sheehan.
Whereas, the Meriden Retirement Board has completed a year-long review of the fees, charges and costs of custodial, advisory, and management services for its investment accounts;
And whereas, the Board wishes to retain the services of its current managers and consulting team, but to reduce the pension fund’s overall administrative and investment expenses;
Be it hereby Resolved, that the Retirement Board agrees to extend its investment management and advisory relationship with Gerald Glass and Patrick Sheehan of A.G. Edwards for the period October 1, 2008, to September 30, 2011.
Be it further resolved that the Board wishes to replace its existing custodial, monitoring, and Private Advisor management contracts with the A.G. Edwards Select Advisor program, for the following External portfolio managers: Neuberger Berman, Templeton
Advisors, Anchor Capital Advisors, NWQ Tradewinds, Roxbury Capital, Louis Navellier and Company, Lehman Fixed Income, and Wentworth-Hauser-Violich. The Board understands that Select Advisor provides a Unified fee of 75 basis points for all management, custodial, and advisory services.
The Board acknowledges that any external portfolio managers that are not included on the A.G Edwards’ Reference List may require a separate management contract, and desires to retain the services of both Orrell Capital Management and Armstrong-Shaw Associates on terms no less favorable than the advisors engaged through the Select Advisor program. Further, the Board acknowledges that no asset-based fees will be charged to two specially designated accounts (City Employees M, and Police/Fire H) which will remain as Board-Directed accounts, paying separate fees or commissions on transaction activity.
The Board voted to move to executive session at 6:45p.m. regarding negotiation of the investment advisor contract. A motion to come out of executive session at 7:15 p.m. was made by Brian Daniels, seconded by Gerard Adelman. Motion unanimous.
The meeting adjourned at 7:15 p.m.
The next meeting of the Municipal Pension Board will be held on November18, 2008 (due to Veteran’s Day) at 5:15 p.m. in the City Manager’s Conference Room.
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Caroline Beitman, Secretary
Municipal Pension Plan
* Mike Lupkas researched the expense and clarified that there were two ads placed; one in the Hartford Courant and one in the Record Journal. The September expense was for the Record Journal.
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