Commonwealth of Massachusetts | Public Employee Retirement Administration Commission
Five Middlesex Avenue, Suite 304, Somerville, MA 02145
Ph 617 666 4446 | Fax 617 628 4002 | TTY 617 591 8917 | www.mass.gov/perac
Domenic J. F. Russo, Chairman | A. Joseph DeNucci, Vice Chairman
Mary Ann Bradley | Paul V. Doane | Kenneth J. Donnelly | James M. Machado | Donald R. Marquis
Joseph E. Connarton, Executive Director
February 21, 2008
John F. Lane, Jr, Chairman
Beverly Contributory Retirement System
City Hall
191 Cabot Street
Beverly, MA 01915
REFERENCE: Report of the Examination of the Beverly Contributory Retirement System for the two-year period from January 1, 2004 through December 31, 2005
Dear Mr. Lane, Jr:
The Public Employee Retirement Administration Commission has completed a follow-up review of the findings and recommendations contained in its audit report of the Beverly Contributory Retirement System for the most recent period referenced above. We conduct these visits as a regular part of the oversight process. They are designed to ensure the timely implementation of corrective action for the recommendations cited in that report. The results are as follows:
1. The Audit Report cited a finding that members were not contributing the additional 2% deduction for longevity allowances, several school cafeteria workers were contributing more than required due to the reduced pay periods covered by their employment and a library employee had not been properly enrolled as a member of the retirement system.
Follow-up Result: The City payroll has developed a process that will enable them to comply with the additional 2% deductions for longevity allowances as they occur during all future contract periods. The school department payroll person has been informed of the rules regarding annualizing the 2% deduction over a reduced number of pay periods. The cafeteria workers will be refunded the deductions taken in error. The library employee has enrolled as a contributing member of the system and has purchased the creditable service accrued during the period she was not properly enrolled in the system. These membership issues have been resolved.
2. The Audit Report noted that Board member attendance was below the minimum considered reasonable for the audit period. This reflected negatively on the obligation for fiduciary oversight and management of the retirement systems assets.
Follow-up Result: The Board initiated attendance guidelines that result in forfeiting stipends for repeatedly missing meetings. An appointed member has been replaced by a member with regular attendance and active participation. As a result, the attendance issues have been resolved.
The Commission wishes to acknowledge the significant effort demonstrated by the staff of the Beverly Contributory Retirement System to correct the deficiencies cited in the most recent examination of the system.
Thank you for your continued cooperation in this important matter.
Sincerely,
Joseph E. Connarton
Executive Director