Retirement Board

Amended CITY OF MIDDLETOWN MINUTES OF THE RETIREMENT BOARD Regular Meeting Monday, February 14, 2022 at 9:00 am via WebEx Board Members Present: Carl Erlacher, Steve Gomes, Sandy Pasculano, Vinny Loffredo, Linda Salafia, John Milardo Board Members Absent: Mayor Florsheim, Joe Serra City Employees/Public/Others Present: Diana Doyle, Michael Lepore (GYL), Gerald Goldberg (GYL), Robert Lessard (H&H), Steve Lemanski (H&H), Michael Carta (Public), Kevin Balaod (Journalist from With.Intelligence)  Meeting Called to Order at approximately 9:20 am  No Public Comments on the Agenda  Approval of Minutes o November 15, 2021 Regular Meeting  Vinny motioned to approve the minutes and was seconded by Linda  All in favor  H&H Actuarial Review o Vinny Loffredo requested copies of the H&H Report be emailed to all Council members o Steve Lemanski provided an overview of the City’s Pension valuation. o As of July 1st, 2021 funded ratio is 107.9%, up from prior year; assets fully cover the benefits. The ADEC contribution for FY 22/23 is $4.21 mm vs $4.30 mm for FY 21/22. o Investment returns on a market value were above the 7.00% baseline assumption. o The plan experienced a liability loss, mainly due to unfavorable retirement patterns and salary increases that were greater than expected. o 60.7% of total plan liability is due to members in pay status. o Recommendations for the upcoming valuation: Consider performing an Experience Study to analyze actual plan experience over several years vs. current assumptions. o Rob Lessard gave an overview of the OPEB Valuation; the funded ratio for the City Plan is 10.8% as of July 1st vs 8.1% in prior valuation. He also stated that the BOE currently doesn’t have a trust so they don’t need to have an ADEC in place. o Under the GASB rules, the city cannot currently use 7% as the discount rate assumption in the GASB 74/75 disclosure. Plans that are projected to not have a sufficient fiduciary net position are required to use a lower, blended single equivalent discount rate.  o Diana asked what the ballpark figure should be and stated that $2 mm was proposed for this year. o Rob recommended $13.6 mm for the current fiscal year. o Recommendation made to consider performing an Experience Study to analyze actual plan experience over past several years vs current assumptions. o Steve Gomes motioned to approve these studies as outlined in current report, the second was made by Vinny Loffedo.  GYL Review o Gerry Goldberg opened with a few words on the Capital Market. He discussed the use of their acronym, “BIDEEN”. B – Bonds I – Inflation D – Disney E – Economy E – Employment N – Nuance o Michael Lepore reviewed the specifics of the portfolio stating that the performance of the market and economy continue to move in a positive direction o The Pension Fund value at the end of the 4th quarter was $555,017,866 o Michael discussed the change in asset allocation. o Steve Gomes motioned to accept the Pension Assets adjustment to replace the Fidelity Large Cap Index with the Vanguard Direct Index and Large Cap Growth Quality; and the second part of the motion to split the Fidelity Extended market index and provide 50% to the Vanguard Direct Small and Mid-Cap Quality Index, second by Vinny. o Steve motioned to accept the OPEB Assets adjustment allocating 50% of the balance from the Large Cap, Mid Cap and Small Cap funds to fund Vanguard All Cap Direct Index with a Quality basis, second made by Sandy. o Year to date the portfolio returned 3.74% gross and 3.74% net fees for the 4th quarter, in comparison to the custom benchmark which returned 3.98% for the same period. o The OBEB Trust value at the end of the 4th quarter was $28,169,760.  Reports: (informational) o Treasurer’s Report o Pension Management Fee Report  Applications for Membership Start Date Department/Union  Shanna Barillari 12/6/21 Library/Library  Nicole Boucher 1/19/22 Police/Police  Charles Hackett 1/21/22 Police Officer  Cayla Jones 11/22/21 City/466  Gary Middleton 1/3/22 City/UPSEU  Lawrence Noland 1/10/22 City/466  Ran Ranney 1/11/22 Police/Police   Jaquell Wilson 1/10/22 Library/Library  Requests to Retire/Collect/Vest Yrs of Svc Age Department/Union Sebastian Alessi 29 yrs 51 City/466 Christopher Augeri 25 yrs 48 Fire/Fire Nancy Bailey 34 yrs 66 Library/Library Joan Marchese-Haake 29 yrs 69 Library/Library Michael Inglis 29 yrs 57 Police/Police James Johnson 20 yrs 66 BOE/466 Maria Morello 24 yrs 68 City/466 Rosa Perichi 33 yrs 66 City/466 Susan Morris-Rebstock 18 yrs 71 BOE/466 Joyce Rossi 24 yrs 65 BOE/466 William Russo 37 yrs 62 PW Director/Non-Barg Kevin White 34 yrs 58 Police/Police Frederick Woitowitz 25 yrs 53 Fire/Fire Ronald Baia (refund) City/UPSEU James Dellacamera (refund) City/466 Randy McKiver (refund) BOE/City Deceased Pensioners  Adjournment of Meeting o Carl motioned to adjourn, second by Sandy o All in favor Respectfully submitted: Carl Erlacher tv