Pension Sub Committee Regular Meeting DRAFT
TOWN OF SIMSBURY
PENSION SUBCOMMITTEE
Draft
Minutes of Regular Meeting
Thursday, November 15, 2012
7:30 a.m. in the Board of Education Conference Room
I. Call to Order
In attendance were: Thomas Cooke, Director of Administrative Services; Mary Ann Harris, Finance Director; and Burke LaClair, Board of Education Business Manager. Present for the Subcommittee were Nick Mason and Paul Henault from the Board of Finance; Mike Goman from the Board of Education; Moira Wertheimer and Lisa Heavner from the Board of Selectmen; and Paul McAlenney, member-at-large. Christopher Kachmar of Fiduciary Investment Advisors (FIA) was also present.
Mr. Cooke opened the meeting at 7:35 a.m.
All subcommittee members were given an information packet from Mr. Kachmar
which included a FIA report titled Town of Simsbury Defined Benefit Pension Plans:
Executive Summary for the Third Quarter of 2012.
• Tabs 1 and 2—the first 52 pages—are devoted to the details of this summary.
• Tab 3—Pages 53 to 55—discusses the implementation timeline of the new retirement
income portfolios for the town, the BOE, and the Police Dept.
• Tab 4—comprised of 7 pages—includes the July 2012 DRAFT of the Town of Simsbury
Defined Benefit Pension Plans Investment Policy Statement.
II. Acceptance of Minutes
Mr. Cooke asked for a motion to approve the draft minutes of the June 8, 2012 Pension Subcommittee meeting. Mr. Mason made the motion and Mr. Goman seconded the motion. All were in favor, and the motion was passed unanimously.
III. FIA Presentation
Mr. Kachmar reported that the performance of capital markets through the end of September was strong and reviewed some of the economic factors that lead to the positive market performance.
The town’s pension funds are well diversified, well managed, and with the move to open architecture, a strategy is in place.
The management agreement that the town had with Frank Russell was terminated effective the end of October. The funds were moved to new managers in accordance with the plan previously adopted by the Committee and approved by the Board of Selectmen. Pension payments were unaffected by the transition. The real estate portion of the town’s portfolio, currently with the Russell Real Estate Equity Fund, will be moved at a later date.
IV. July 2012 DRAFT of the Town of Simsbury Defined Benefit Pension Plans
Investment Policy Statement
Mr. Kachmar presented the July 2012 DRAFT of the town’s Defined Benefit Pension Plans Investment Policy Statement. He stated that the draft was designed to avoid undue legal exposure to the Town and, at the same time, to provide clear direction with respect to the Town’s investment strategy. He noted that Appendix A: Target Asset Allocation Table—page 7—would serve as the blueprint for the how the town’s pension plan funds will be distributed. The town is currently working under an older investment policy which does not necessarily recognize investment products that have become available in recent years.
Motion #1:
Mr. Mason made a motion to approve the July 2012 DRAFT of the Town of Simsbury Defined Benefit Pension Plans Investment Policy Statement until the next meeting of the Pension Subcommittee—and pending determination of the authority ultimately responsible for the investment policy—with the addition of the following proposed paragraph:
The Investment Consultant is additionally tasked with regular oversight of the roster of
investment managers deployed on the Plans’ behalf. The motivation for this effort is to ensure that the managers continue to administer their portfolios in a manner consistent with the overall approaches and qualifications that appealed to the Committee initially and that anomalies and deviations from these approaches and qualifications are identified and addressed. When deemed necessary, the Investment Consultant will provide other manager candidates for the Committee’s consideration.
Ms. Heavner seconded the motion and it was passed unanimously.
Motion #2:
Mr. McAlenney made a motion to change the word “may” on page 3 of the July 2012 DRAFT of the Town of Simsbury Defined Benefit Pension Plans Investment Policy Statement, in the paragraph titled “Investment Consultant” to the word “will,” so that it shall read, “Investment Consultant – The Committee will engage the services of an Investment Consultant.” Mr. Mason seconded the motion and it was passed unanimously.
V. Adjourn
Mr. Mason made a motion to adjourn the meeting. Mr. Henault seconded the motion. All were in favor. The motion was passed unanimously. The meeting was adjourned at 9:50 a.m.
Respectfully submitted,
Lorrie McElligott
Commission Clerk