The regular meeting of the Andover Contributory Retirement Board was called to order by Chairman Cuticchia on Thursday, April 27, 2017 at 8:00 a.m. in the Board of Selectmen’s Conference Room located in the Town Offices. Present were: The Chairman, Jim Cuticchia, Elena Kothman, Tom Hartwell, Tony Stankiewicz, and Hayley Green. Also present were Administrative Assistant, Helen Armano and Board Counsel, Michael Sacco.
Mr. Cuticchia announced the Board would move into Executive Session for the purpose of discussing an involuntary disability application pursuant to MGL, c30A, §21(a)(1) at 8:02 a.m. with the intent to return to open session. It was moved by Mr. Hartwell, seconded by Mr. Stankiewicz and voted 5-0 to move into Executive Session. Roll call vote: Mr. Cuticchia, yes, Ms. Kothman, yes, Mr. Hartwell, yes, Mr. Stankiewicz, yes, and Ms. Green, yes.
The Board reconvened in open session at 8:35 a.m.
At this time, Mr. Cuticchia announced Hayley Green has been appointed to the position of Town Accountant/Assistant Finance Director, which makes her Ex-Officio of the Retirement Board,
effective 04/18/2017. The Board welcomed Ms. Green. Ms. Green provided the Board with a brief overview of her background which included her employment as Assistant Town Accountant/Auditor over the past two years and prior employment with Powers and Sullivan for a period of five years. It was noted Ms. Green is a CPA.
Dahab Associates
Mr. McNeillie presented the results of a recent asset allocation analysis of the Andover Contributory Retirement System for the purposes of analyzing how reallocating a portion of the portfolio would affect its overall risk and return characteristics. The study used a Monte Carlo simulation to estimate the chance of earning the Plan’s actuarial assumption given various asset allocations in multiple return scenarios. Dahab used the actuarial report dated 01/01/2016 to project the next 20 years of cash flow. Mr. McNeillie noted the Board is currently 100% invested in the PRIT fund and commented that while there are areas of the PRIT fund that are doing well, there are areas that are not doing well, such as hedge funds. Mr. McNeillie informed the Board there are a number of larger public funding systems that are exiting hedge funds because they are not getting the returns they were promised. Mr. McNeillie noted the returns on hedge funds over the past 10 years have been around 4 ½%. Next, Mr. McNeillie briefly discussed the projected cash flows over the next 20 years and summary of statistics for the 3 selected mixes compared to the target allocations of the PRIT fund. Mr. McNeillie informed the Board each of the selected mixes took 50% out of the PRIT core fund to show how reallocating that portion would affect the return. A lengthy discussion ensued regarding the 3 alternative mixes, specifically focusing on the 20-year special scenarios. Mr. McNeillie noted the 20-year special scenarios are more conservative. Mr. Hartwell commented that PRIT’s consultant, NEPC, have reported numbers very similar to Dahab’s 20-year special scenarios.
Mr. McNeillie informed the Board the 3 alternative mixes were selected based upon two of his clients, Shrewsbury and Franklin Regional. Mr. McNeillie reviewed the 10-year returns as of December 31, 2016 for Andover, PRIT CORE, Shrewsbury (Mix 2) and Franklin Regional (Mix 3), noting Mix 2 and Mix 3 showed a higher return.
The Board asked for clarification on the process for moving out of the PRIT fund into the various mixes and whether or not there would be a fee. Mr. McNeillie explained the process for Mix 2 should be quick and seamless, explaining the Board would notify PRIT to move 50% out of PRIT Core and reallocate into sleeves, and there would be no fee, however, should the Board decide to move into a separate manager account, then there would be a fee. Mr. McNeillie stated there would be a more gradual move going from Mix 2 into Mix 3.
Mr. Hartwell stated he was concerned with the recent change in the market and wasn’t sure if it was the right time to make a change and commented if the Board moved out of PRIT Core, then there would be a loss in Private Equity.
At this time, Mr. McNeillie concluded his presentation and Mr. Cuttichia stated the Board will continue to review the analysis and will plan to invite Mr. McNeillie to a future meeting for further discussion on the matter. Mr. McNeillie left the meeting at this time.
Report from the Executive Director – Other Business: a. PERAC - 16 &17/2017 Memos
RB Members’ SFI due in to PERAC by 05/01/2017 – Mr. Cuticchia asked Ms. Kothman to send Ms. Walsh an email reminding her to submit her SFI by 05/01/2017
b. NCPERS – The Monitor April 2017, PERSist Spring 2017
2017 Annual Conference & Exhibition (ACE) May 20-21, Hollywood FL – Mr. Cuticchia asked board members to hold off on attending the conference due to lack of funds budgeted for travel.
c. Mass Retirees – email re FY18 COLA
d. MACRS – 2017 Annual Conference, June 4-7, Hyannis MA – Mr. Cuticchia stated he plans to register for the conference, however, there is a possibility he may need to cancel.
Remembering Senator Ken Donnelly (retired Lexington Fire) e. Misc -
Letter to Town Mgr Andrew Flanagan regarding Retirement advice – Mr. Cuticchia informed the Board he sent Mr. Flanagan a letter requesting all inquiries from members concerning
retirement benefits be directed to the Board and its staff to ensure the information being received is accurate.
Powers & Sullivan – Audit of Specific Elements, Accounts & Items of Financial Statements for the year ended 12/31/2015
Retirement Office Staff:
Ms. Kothman informed the Board she is working on posting a minutes taker position and hopes to have it posted within the next couple of weeks. Ms. Kothman reminded Board members she will be attending the 2017 Directors/Administrators Conference being held on May 15-16, 2017, in
Edgartown, MA, and noted the Retirement Office will close at 2:00 p.m. Office hours to be posted on the website.
Minutes
The Board reviewed the minutes for Executive Session and Regular Session held on March 23, 2017. It was moved by Mr. Stankiewicz, seconded by Mr. Hartwell and voted 4-0-1 to approve the minutes of the Executive and Regular Session meetings held on March 23, 2017 (Ms. Green abstained). Monthly Payroll, Salaries, Stipends
It was moved by Mr. Stankiewicz, seconded by Mr. Hartwell and voted 5-0 to approve the monthly retirement payroll for April 2017 as follows:
Annuity 189,269.65
Pension 917,919.59
Total 1,107,189.24
It was moved by Mr. Stankiewicz, seconded by Mr. Hartwell and voted 4-0-1 to approve the monthly salaries for April paid as follows (Ms. Kothman abstained):
Elena Kothman (April 2017, 5 wks) 8,837.55
Helen Armano 5,320.15
It was moved by Mr. Stankiewicz, seconded by Mr. Hartwell and voted 4-0-1 to approve the monthly stipends paid as follows (Ms. Green abstained):
Hayley S Green 04/18-04/30/17 108.34
David J Reilly 04/30 250.00
Donna M Walsh 04/01-04/17/17 141.66
Total 500.00
Expenses
It was moved by Mr. Stankiewicz, seconded by Mr. Hartwell and voted 4-0-1 to approve the following expenses for the month (Ms. Kothman abstained):
Helen Armano, mileage reimbursement, training session in Somerville, MA 22.90
Dahab Associates, Inc, 1st qtr 2017 7,500.00
Elena Kothman, reimbursement for ET digital access (March 2017) 19.99 Powers & Sullivan, invoice for GASB 67 work for 12/31/2015 3,000.00
Ricoh, monthly copy machine invoice 99.89
Ricoh, toner cartridges (3 black) 209.13
The Law Offices of Michael Sacco, March 2017 2,232.00
WB Mason, misc office supplies 33.85
Total: 13,117.76
3(8)(c) payments:
It was moved by Mr. Stankiewicz, seconded by Mr. Hartwell and voted 5-0 to approve the following 3(8)(c) payments:
Essex Regional Retirement 20,330.81
Total: 20,330.81
Receipts:
The Board was informed of the following receipts: Employee Contributions – March 2017:
Town 248,325.51 School 133,334.57 AHA 3,956.75 Total 385,616.83 3(8)(c) Receipts: Boston 9,379.22 Refunds:
It was moved by Mr. Stankiewicz, seconded by Mr. Hartwell and voted 5-0 to approve the following refund:
Kurt Chiarenza, Town, Cr Serv = 1y, 2m, 6d 02/02/15-04/08/16 Transfers
It was moved by Mr. Stankiewicz, seconded by Mr. Hartwell and voted 5-0 to approve the following transfers:
Transfer In:
It was moved by Mr. Stankiewicz, seconded by Mr. Hartwell and voted 5-0 to approve the following transfers:
Transfers Out:
Kathleen A Fraser, School, to MTRS Cr Serv = 2.5000 y, 09/01/2011-03/03/2014 Stephenie M Gover, School, to MTRS Cr Serv = 3.0000 y, 08/26/2013-09/01/2016
Mariah A Hyslip, School, to MTRS Cr Serv = 0.5000 y, 02/15-09/01/2016
Michael C Kelly, Town, to Middlesex County Retirement, Total Cr Serv = 9.5000 y
Andover Retirement = 06/13/2016-07/11/2016 = 0.0000 y State Retirement = 08/18/2014-06/10/2016 = 1.7500 y
Middlesex County Retirement = 07/08/2002-03/15/2013 = 7.7500 y
Karen M Kim, School, to MTRS Cr Serv = 8.000 y, 09/01/2007-09/10/2015 Alicia R Murray, School, to MTRS Cr Serv = 0.3333 y, 09/30/2011-02/23/2012 Sarah E Tully, School, to MTRS Cr Serv = 6.000 y, 08/30/2010-08/31/2016 Makeup Request:
It was moved by Mr. Stankiewicz, seconded by Mr. Hartwell and voted 5-0 to approve the following makeup request:
Cheryl Grieve, School cafeteria, request to buy back previous time worked for the Town/School prior to joining the municipal retirement system on 03/05/2012 Cred serv = 1y, 1m 10/23/2008-03/04/2012
Intent to Retire
It was moved by Mr. Stankiewicz, seconded by Mr. Hartwell and voted 5-0 to approvethe following intent to retire forms submitted:
Linda L Cleary, Town Conservation, DOR 04/02/2017, Cred Serv = 21y, 8m, Superannuation Wayne R Merola, Town Fire Rescue, DOR 04/16/2017, Cred Serv = 31y, 10m, Superannuation David A Plummer, Town DPW Highway, DOR 05/07/2017, Cred Serv = 20y, Superannuation John N Pathiakis, Town Police, DOR 05/14/2017, Cred Serv =41y, 10m, Superannuation
The Board was informed of the following death:
Death
Sydelle S Cohen, DOD 03/20/2017, DOR 09/30/1996
Retirement Allowance Calculations (Not approved by PERAC yet):
Debra Roda, School, DOR 03/26/2017, Cred Serv = 10y, 4m, Superannuation Monthly Allowance: $363.09 Annual Allowance: $4,357.08
Linda Cleary, Town, DOR 04/02/2017, Cred Serv = 21y, 8m, Superannuation Monthly Allowance: $3,067.48 Annual Allowance: $36,809.76
PRIT
It was moved by Mr. Stankiewicz, seconded by Mr. Hartwell and voted 5-0 to note receipt of the PRIT statement for the period ending 03/31/2017.
It was moved by Mr. Stankiewicz, seconded by Mr. Hartwell and voted 5-0 to confirm transfer of $825,000 for March operating expenses.
It was moved by Mr. Stankiewicz, seconded by Mr. Hartwell and voted 5-0 to confirm transfer of $830,000 for April operating expenses.
It was moved by Mr. Stankiewicz, seconded by Mr. Hartwell and voted 5-0 to approve transfer of up to $1,200,000 for May operating expenses.
PRIM Investor Conference, 11/19/17 at Holy Cross in Worcester – Ms. Kothman informed Board members they will receive 3 credits for attending the conference. It was noted all Board members are interested in attending.
Biennial Notarized Letters:
Ms. Kothman discussed the Biennial Notarized Letters and informed the Board any retirees that have not responded by 04/30/2017 will receive a second letter requesting an immediate response.
Cash books:
December 2016 (2nd reading)
It was moved by Mr. Stankiewicz, seconded by Mr. Hartwell and voted 5-0 to approve the trial
balance, cash receipts, cash disbursements, adjusting journal entries, and bank reconciliation for the month of December 2016.
January 2017 (1st reading)
The Board conducted a first reading of the January 2017 cash books and vote to be taken at the May meeting.
February 2017 (1st reading)
The Board conducted a first reading of the February 2017 cash books and vote to be taken at the May meeting.
COLA for Fiscal Year 2018 – Public Hearing required:
It was moved by Mr. Stankiewicz, seconded by Mr. Hartwell and voted 5-0 to confirm a COLA Public Hearing will be held on Thursday, May 25, 2017 at 8:00 a.m. Ms. Kothman will send out a newsletter to retirees informing them of the upcoming COLA Public Hearing and the appointment of the new Town Accountant and Ex-Officio of the Retirement Board, Hayley S. Green.
Cash balance
It was moved by Mr. Stankiewicz, seconded by Mr. Hartwell and voted 5-0 to approve the cash balance as of April 27, 2017 as follows: Bank of America - $5,562.78
Next, Ms. Kothman informed the Board that she and Ms. Armano attended PERAC’s training session for the newly released PROSPER application system. Ms. Kothman stated PERAC is encouraging administrators and board members to set up an account. Ms. Kothman will forward board members email addresses to PERAC, who will then send each board member a registration link.
Next meeting
It was moved by Mr. Stankiewicz, seconded by Mr. Hartwell and voted 5-0 to confirm the next Retirement Board meeting will be held on Thursday, May 25, 2017 at 8:00 a.m.
Adjourn
It was moved by Mr. Stankiewicz, seconded by Mr. Hartwell and voted 5-0 to adjourn the meeting at 9:45 a.m.
James A. Cuticchia Elena M. Kothman
Hayley S. Green Anthony K. Stankiewicz, Esq.
