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
Philip Y. Brown, Esq., Chairman
Auditor Suzanne M. Bump | Kathleen M. Fallon | Kate Fitzpatrick | James M. Machado | Robert B. McCarthy | Jennifer F. Sullivan
Joseph E. Connarton, Executive Director
October 26, 2016
REFERENCE: Report of the Examination of the Quincy Retirement Board for the three-year period from January 1, 2011 through December 31, 2013.
Dear Chairman McCray:
The Public Employee Retirement Administration Commission has completed a follow-up review of the findings and recommendations contained in its audit report of the Quincy Retirement Board 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 there were many pay codes either coded as qualified for retirement or excluded from retirement that did not conform to the definition referenced in 840 CMR 15.03.
Follow-up Result: PERAC reviewed the correspondence between the Board’s Executive Director and Quincy’s Director of Human Resources instructing the City as to the types of compensation that should be included or excluded from pensionable wages. We reviewed all current pay codes and, with the exception of one pay code for the 8% contributors all corrections appear to have been implemented. Subsequent to the on-site visit, the Board also provided evidence that the one incorrect pay code has been fixed. This finding is resolved.
2. The Audit Report cited a finding that several management fees were directly withdrawn from the principal value of the invested funds. These fees were not disclosed for authorization by the Board and not included in the general ledger category nor were they reported on Schedule 7 of the Annual Statement.
Follow-up Result: PERAC reviewed the 2015 management fees and traced them back to both the general ledger and Schedule 7 of the Annual Statement along with related warrants. All investment managers are now detailed on Schedule 7, reflecting the appropriate costs associated with the investments of the system. This finding is resolved.
The Commission wishes to acknowledge the effort demonstrated by the staff of the Quincy Retirement Board to correct the deficiencies cited in the most recent examination of the system.
Thank you for your continued cooperation in this important matter.
Joseph E. Connarton