Commission Meeting Minutes: November 8, 2017

November 8, 2017

Chairman Brown called the meeting (held at the PERAC Office, 5 Middlesex Avenue, Somerville, Massachusetts) to order at 11:07 AM. He then stated that the Commission meeting is being tape recorded and will be so noted in the minutes.

Chairman Brown acknowledged the other Commissioners present: Commissioners Timothy Dooling, Kathleen Fallon, Kate Fitzpatrick, James Machado, and Robert McCarthy. Commissioner Jennifer Sullivan arrived at 11:15 AM.

PERAC Staff Present: Executive Director Joseph Connarton, Deputy Executive Director Joseph Martin, General Counsel and Deputy Director John Parsons, Deputy General Counsel and Managing Attorney Judith Corrigan, Director of Strategic Planning Mike DeVito, Compliance Officer Tom O’Donnell, Compliance Counsel Derek Moitoso, Associate General Counsel Patrick Charles, Director of Administrative Services Caroline Carcia, Chief Auditor Caryn Shea, Compliance Analyst Cheryl Johnson, and Senior Executive Assistant Kim Boisvert.

Ms. Boisvert announced the following guests in attendance: Tom Gibson representing the Middlesex and Belmont Retirement Systems, and Sean Neilon representing the Massachusetts Teachers’ Retirement System.

Commissioner McCarthy made a motion to adopt the October 11, 2017 Commission meeting minutes. Commissioner Fitzpatrick seconded the motion and the minutes were adopted.

Administrative Sub-Committee Meeting Update

Chairman Brown reported that the Administrative Sub-Committee met earlier in the morning on November 8, 2017 and discussed the Executive Director’s Annual Review, Policy Number 97-006: the Selection of the Seventh Member, and Policy Number 95-001: Commission Travel. He continued that the Sub-Committee will be meeting again on Wednesday, December 13, 2017 to finalize the Executive Director’s Annual Review, discuss salary, and make a few small changes to Policies 97-006 and 95-001. He then stated that the Commission Meeting time will be changed to 2:00 PM on Wednesday, December 13, 2017 and the change will be noted on the website.

Commissioner McCarthy made a motion to accept the Chairman’s update pertaining to the Administrative Sub-Committee meeting. Commissioner Fitzpatrick seconded the motion and the report was adopted.

Legal Update

Ms. Corrigan recapped the Vernava case which she argued at the Supreme Judicial Court (SJC) on November 6, 2017.

Mr. Connarton stated that PERAC personnel had the opportunity to watch the argument in the training room as it happened and he thanked Ms. Corrigan for doing such a great job representing the Commission. He then stated that Attorney Sacco, representing the Swampscott Retirement Board in the case, implored the SJC to decide the hierarchy between PERAC v. CRAB.

Ms. Corrigan stated that Attorney Sacco stated in his opening remarks that he was representing Mr. Vernava, Swampscott Retirement Board, and CRAB. By the time she was back in the office from Court she had received a copy of an email the Attorney General sent to Attorney Sacco in regards to correcting his misstatement that he was representing CRAB. Ms. Corrigan noted that this was done.

The Commission gave Ms. Corrigan many compliments for her diligent work on the case and noted what a great opportunity it is to argue at the SJC.

Mr. Parsons reported that the Attorney General quietly made changes to the Open Meeting Law, which take effect immediately. He stated that he will have to have a conference call with the Attorney General’s office for some clarifications regarding the retirement boards being a state agency or a municipality, as well as meeting minutes. He continued that most retirement boards do not have their own website and post their meeting agendas on the municipality website. He then reported that there is ambiguity in the new rules about the time in which to approve minutes.

There was some discussion regarding our situation and the approval of some of our meeting minutes.

Mr. Parsons stated that he would get clarification from the Attorney General’s office about the matters above.

Legislative Update

Mr. DeVito reported that Senator Paul Feeney has been named Senate Chair of the Joint Committee on Public Service. Senator Cindy Friedman has been named Chair of the Joint Committee on Mental Health, Substance Use and Recovery and will continue on the Joint Committee on Public Service as the Vice Chair. He then reported that the Public Service Committee has recently heard bills regarding group classification changes, assorted veterans and civil service bills, and the firefighter and police smoking cessation bills. Mr. DeVito then reported that the Legislature will suspend their formal sessions on November 15, 2017 and will resume formal sessions again in January 2018. The only bills that will be discussed within that time frame will be non-controversial bills which may be deliberated in informal session.

Commissioner McCarthy inquired if there are any updates on the Pension Forfeiture Report.

Mr. Connarton stated that there is no update. He continued that former Senate Chair of the Joint Committee on Public Service, Senator Friedman, intended to move the report along, however, it is being held in the House. He further stated he was working with the Speaker’s office to arrange a meeting.

Audit Update

Ms. Shea updated the Commission that the auditors are currently auditing the Blue Hills, Gardner, Mass Port, Medford, and Webster Retirement Systems. Brookline and Concord Retirement System’s audit reports were posted on the PERAC Web Page since the last Commission meeting and Ms. Shea reported on the findings. She then reported that there have not been any six-month follow-up audit reports since the last Commission meeting.

Compliance Update

Mr. O’Donnell reported that staff has been reviewing all the board member’s accumulated educational credits making sure that all of the credits have been appropriately posted.

Mr. Martin reported that the third Schedule 7 Fee Report for each retirement board has been finalized. The Commission has not audited or reviewed the data submitted by the retirement boards for accuracy. He explained that the report will enable the retirement boards to make a comparison of fees. Mr. Martin stated that the Report shows the substantial differences between gross and net fees. All boards are ranked by net performance and by cost in the front of the Report which has been disseminated electronically.

There was a brief discussion about how the PRIT Systems record their Schedule 7 Fees.

The Commissioners voiced their appreciation for the Report. They understand the difficulty of getting all of this information together.

Executive Director’s Report

Mr. Connarton made note of staff activities that have occurred since the last Commission meeting. He specifically spoke about the meeting held on October 27, 2017 with the Inspectors General’s Office pertaining to the Fraud Prevention program and further discussed the process, posters, and the recoupment of $42 million dollars from excess earners.

Mr. Connarton reported that the last “Administrators” road show to be held this year will be in Danvers at the Double Tree by Hilton on November 14, 2017. This training session was originally scheduled to be held in the Danvers Town Hall but because of the number of interested individuals the Town Hall conference space could not accommodate them. He stated that 71 individuals have registered. He stated that the administrators who attend will receive a certificate and board members will receive 3 credits. Mr. Connarton stated that he would like to hold more of these trainings again in the Spring due to the interest shown by the attendees.

Mr. Connarton reported on 840 CMR 10:10(3) and 10:15(4) regarding the Annual Review of Medical Fees and at this time he does not recommend an increase, and believes that the fees should be kept at $100.00.

Commissioner Machado moved to continue the previous schedule of $100 for the Medical Fees. The motion was seconded by Commissioner Fitzpatrick and the motion was adopted.

Mr. Connarton reported that the Fraud Prevention posters have been distributed to many interested parties across the Commonwealth and the posters are being displayed in conspicuous locations.

Mr. Connarton updated the Commission about the lease negotiation at 5 Middlesex Avenue. The negotiations remain with DCAM which is in the final stages for the Commissioner of DCAM to review. He stated that at the end of a new 5-year contract our cost would be $32.00 per square foot which is an excellent price in this area.

Commission Travel

Mr. Connarton notified the Commission about the upcoming 2018 NCPERS Legislative Conference being held January 28 through 30, 2018 in Washington, DC should there be any interest in attending.

Commissioner Machado made a motion to grant permission for any interested Commissioners and staff to attend the above conference. Commissioner Dooling seconded the motion and it was adopted.

Other Business

The Commission discussed the meetings being held on Wednesday, December 13, 2017 which includes the Administrative Sub-Committee meeting at 12:00 PM, the Granicus training at 1:00 PM, and the Commission meeting at 2:00 PM.

Mr. Connarton reminded the Commission that the holiday gathering will be held thereafter at Tiki Island in Medford.

Commissioner Machado made a motion to adjourn the meeting. Commissioner Fitzpatrick seconded the motion and the motion was adopted. The meeting adjourned at 11:50 AM.

Commission Meeting Documents

Commission Agenda for the meeting of November 8, 2017

Commission Minutes from October 11, 2017

Legislative Update

Monthly Legislative Agenda and bullet points outlining legislation

Audit Update

Recent PERAC Audits

Executive Director’s Report

Updated Staff Activities Memo

Memo to the Commissioners regarding 840 CMR 10:10(3) and 10:15(4) regarding the Annual Review of Medical Fees

PERAC Memo # 33/2017 to All Retirement Boards regarding the 2017 Fraud Prevention Poster with attachments

Commission Travel

2018 NCPERS Legislative Conference Agenda

Documents Distributed at Meeting

2016 Schedule 7 Fee Report

Approved:

Philip Y. Brown, Chairman

Public Employee Retirement

Administration Commission