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 | James M. Machado | Donald R. Marquis | Robert B. McCarthy
Joseph E. Connarton, Executive Director
May 11, 2009
Mr. Thomas F. Gibson , Chairman
Middlesex Retirement Board
25 Linnell Circle
PO Box 160
Billerica , MA 01865
REFERENCE: Report of the Examination of the Middlesex Retirement Board for the three-year period from January 1, 2005 through December 31, 2007
Dear Mr. Gibson:
The Public Employee Retirement Administration Commission has completed a follow-up review of the findings and recommendations contained in its audit report of the Middlesex 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 examination addressed three specific findings and recommendations included in the audit report for the period referenced above. The results are as follows:
1. The Audit Report cited a finding that:
A. The sampling of member deductions showed a 15% error rate for withholding the correct amount of 2% additional contributions for members earning over $30,000.
B. Fourteen percent of the governmental units sampled had questionable pay codes classified as regular compensation.
Follow-up Result:
A. The Board monitors contributions and when errors are found the units are notified and corrections are made. They also provided on going training for the units to ensure proper coding. However, the Board is only involved “after the fact” so this issue can never be totally resolved. This finding is considered unresolved.
B. The Board reviewed the pay codes and contracts (when available) for all the units and ensured they were classified properly. This finding has been resolved
2. The Audit Report cited a finding that buyback agreements were not being monitored properly to ensure members were actively making appropriate payments and that interest calculations were accurate.
Follow-up Result:
The Board has reviewed all buyback agreements and identified all those that are inactive and/or do not conform to the agreement. This is monitored on a regular basis and appropriate action taken. This finding has been resolved.
3. The Audit Report cited a finding that there were approximately 250 checks outstanding for more than six months.
Follow-up Result:
The Board has resolved approximately 20-25% of the outstanding checks. However, because of time constraints they have been unable to resolve all outstanding checks. They are continuing to work on the issue when time permits. This finding has not been resolved
The Commission wishes to acknowledge the effort demonstrated by the staff of the Middlesex Retirement Board to correct the deficiencies cited in the most recent examination of the system. PERAC auditors may conduct an additional follow-up visit to ensure appropriate progress is being made in those areas that have not been corrected adequately at this time.
We anticipate your continued cooperation in resolving this important matter.
Sincerely,
Joseph E. Connarton
Executive Director