MINUTES OF MEETING
STATE EMPLOYEES RETIREMENT COMMISSION
OFFICE OF THE STATE COMPTROLLER
55 ELM STREET
HARTFORD, CONNECTICUT 06106

January 12, 2012

TRUSTEES PRESENT
Peter R. Blum
Bob Baus
Charles Casella
Thomas Culley
Michael Carey
Claude Poulin
Sal Luciano
Steve Greatorex
Sandra Fae Brown-Brewton
James Dzurenda
Robert Coffey
Richard Cosgrove
Ronald McLellan
Linda Yelmini

TRUSTEES ABSENT
Paul Fortier

EX OFFICIO MEMBERS
Deputy Comptroller Martha Carlson, Designee for State Comptroller Kevin Lembo
Lee Ann Palladino, CIO, Designee for State Treasurer Denise Nappier

MUNICIPAL LIAISON
Thomas Landry

OTHERS PRESENT
Brenda Halpin, Director, Retirement Services Division
Attorney Helen Kemp, Asst. Dir. and Division Counsel, Retirement Services Division
Jeanne Kopek, Assistant Director, Retirement Services Division
Colin Newman, Assistant Director, Retirement Services Division
Peggy Gray, Executive Secretary, Retirement Services Division

GUESTS
Holly Williams - OFA
Thomas Cavanaugh, Cavanaugh Macdonald, Consulting, LLC
Ed Koebel, Cavanaugh Macdonald, Consulting, LLC
John Garrett, Cavanaugh Macdonald, Consulting, LLC
Jason Powell

CALL TO ORDER

The Chairman called the meeting to order at 9:09 am

DIVISION DIRECTOR'S ADMINISTRATIVE AND SUBCOMMITTEE REPORTS

Clarification to Agenda Item #21 from the month of December 2011
The figure that Commission Member Steve Greatorex was concerned about that appeared on the SERS Balance Sheet under Liabilities, $97,803,474.79, is not the amount of interest payable to retirees at the time of their finalizations. The $97 million dollars is the amount of retirees' interest payable earned on their employee contributions currently on file in the Retirement Payroll equity system. The total amount of interest payable at finalization paid out in FY 2011 was $860,203.79 and is part of the Interest Awarded shown in Agenda Item #20 - Disbursements on the SERS Statement of Operations for FY 2011.

The January 2012 retirement payroll will not be closed until January 17th, however we have received approximately 90 applications. The current backlog of retirement records that have not been finalized is still 13,143 as reported last month. I would like to present additional information when we discuss Agenda Item #15 pertaining to this matter.

Pending Disability Applications as of December 31, 2011

For the month of December

The next available meeting for scheduling is May 2012.

I have a matter in the MERS Unit that I would like to bring to your attention. A member of the system was receiving a disability retirement. In November he was sworn in as the Mayor of East Haven. At that time we provided him with a letter advising him that it was necessary to terminate his disability retirement benefit effective November 30, 2011 related to two provisions for MERS. First, under the rehired retiree provisions and second under the disability retirement provisions that to be eligible for a disability retirement you must continue to remain disabled. The member is appealing the decision to terminate his disability retirement benefits.

I have an administrative matter with regard to the index tabs within the Agenda packets each month. We have hundreds of half used index tab sets that I would like to use. So beginning next month when you receive the Agenda packets the index tabs will not start with the number one through the agenda items. The tabs may start at #18 or something similar. This effort will reduce waste and save on our division budget.

Final item to mention - we have received approval to rehire three retirees, one to assist with the audit finalization backlog, one to assist with the mapping of our processes and one in the MERS Unit, they will be on site within a month. Also we are currently reviewing applications for four new Retirement & Benefits Officers. We expect to begin interviewing next week and hopefully have them hired by the first pay check in February.

NEW MATTERS

1. REQUEST COMMISSION APPROVAL OF THE DECEMBER 15, 2011 MINUTES Mr. Luciano moved, seconded by Mr. Greatorex to approve the minutes of the December 15, 2011 meeting. All voted in favor

Unanimous Decision

2. REQUEST COMMISSION APPROVAL OF THE STATE EMPLOYEES RETIREMENT COMMISSION CHAIRMAN'S PER DIEM EXPENSES REIMBURSEMENT Mr. Luciano moved, seconded by Mr. Greatorex to approve the State Employees Retirement Commission Chairman's Per Diem expenses reimbursements. All voted in favor

Unanimous Decision

3. REQUEST COMMISSION APPROVAL OF THE STATE EMPLOYEES RETIREMENT SYSTEM SERVICE RETIREMENTS FOR THE MONTH OF DECEMBER 2011 Mr. Luciano moved, seconded by Mr. Poulin to approve the State Employees Retirement System Service Retirements for the month of December 2011. All voted in favor.

Unanimous Decision

4. REQUEST COMMISSION APPROVAL OF THE STATE EMPLOYEES RETIREMENT SYSTEM VOLUNTARY PENDING DISABILITY RETIREMENTS FOR THE MONTH OF DECEMBER 2011 Mr. Luciano moved, seconded by Mr. Poulin to approve the State Employees Retirement System Voluntary Pending Disability Retirements for the month of December 2011. All voted in favor

Unanimous Decision

5. REQUEST COMMISSION APPROVAL OF THE STATE EMPLOYEES RETIREMENT SYSTEM DISABILITY RETIREMENTS FOR THE MONTH OF DECEMBER 2011 Mr. Luciano moved, seconded by Mr. Poulin to approve the State Employees Retirement System Disability Retirements for the month of December 2011. All voted in favor

Unanimous Decision

6. REQUEST COMMISSION APPROVAL OF THE STATE EMPLOYEES RETIREMENT SYSTEM RETROACTIVE RETIREMENTS FOR THE MONTH OF DECEMBER 2011 Mr. Luciano moved, seconded by Mr. Poulin to approve the State Employees Retirement System Retroactive Retirements for the month of December 2011. All voted in favor

Unanimous Decision

7. REQUEST COMMISSION APPROVAL OF THE JUDGES, FAMILY SUPPORT MAGISTRATES AND COMPENSATION COMMISSIONERS RETIREMENT SYSTEM RETIREMENTS FOR THE MONTH OF DECEMBER 2011 Mr. Luciano moved, seconded by Mr. Poulin to approve the Judges, Family Support Magistrates and Compensation Commissioners Retirement System Retirements for the month of December 2011. All voted in favor

Unanimous Decision

8. REQUEST COMMISSION APPROVAL OF THE CONNECTICUT PROBATE JUDGES AND EMPLOYEES RETIREMENT FUND PERSONAL EXPENSES FOR THE MONTH OF DECEMBER 2011 Mr. Luciano moved, seconded by Mr. Poulin to approve the Connecticut Probate Judges and Employees Retirement Fund Personal Expenses for the month of December 2011. All voted in favor

Unanimous Decision

9. REQUEST COMMISSION APPROVAL OF THE MUNICIPAL EMPLOYEE RETIREMENT SYSTEM RETIREMENTS Mr. Luciano moved, seconded by Mr. Poulin to approve the Municipal Employee Retirement System Retirements. All voted in favor

Unanimous Decision

10. REQUEST COMMISSION ACCEPTANCE OF THE RECOMMENDATIONS OF THE MEDICAL EXAMINING BOARD FROM ITS MEETING ON DECEMBER 16, 2011 RELATIVE TO APPLICATIONS FOR DISABILITY RETIREMENTS RECEIVED FROM THE MUNICIPAL EMPLOYEES RETIREMENT SYSTEM Mr. Luciano moved, seconded by Mr. Poulin to accept the recommendations of the Medical Examining Board from its meeting on December 16, 2011 relative to applications for Disability Retirements received from the Municipal Employees Retirement System. All voted in favor

Unanimous Decision

11. REQUEST COMMISSION APPROVAL OF THE STATE EMPLOYEES RETIREMENT COMMISSION MANAGEMENT TRUSTEE'S PER DIEM AND TRAVEL EXPENSES REIMBURSEMENTS FOR THE MONTH OF DECEMBER 2011 Mr. Luciano moved, seconded by Mr. Greatorex to approve the State Employees Retirement Commission Management Trustee's Per Diem and Travel Expenses reimbursements for the month of December 2011. All voted in favor, Mr. Baus abstained

Majority Decision

12. REQUEST COMMISSION APPROVAL OF THE STATE EMPLOYEES RETIREMENT COMMISSION UNION TRUSTEE'S PER DIEM AND TRAVEL EXPENSES REIMBURSEMENTS FOR THE MONTH OF DECEMBER 2011 Mr. Luciano moved, seconded by Mr. Greatorex to approve the State Employees Retirement Commission Union Trustee's Per Diem and Travel Expenses reimbursements for the month of December 2011. All voted in favor, Mr. Poulin abstained

Majority Decision

13. REQUEST COMMISSION CONSIDERATION OF THE DECEMBER 15, 2011 RECOMMENDATIONS RECEIVED FROM ITS SUBCOMMITTEE ON PURCHASE OF SERVICE AND RELATED MATTERS Mr. Luciano moved, seconded by Ms. Brown-Brewton to accept the recommendations received from it's Subcommittee on Purchase of Service and Related Matters:

On items #1-4: Mr. Casella moved, seconded by Mr. Greatorex to approve the recommendations received from its subcommittee on Purchase of Service and Related Matters. All voted in favor

Unanimous Decision

On item # 5: Mr. Luciano moved, seconded by Ms. Yelmini to remand the claim back to the subcommittee on Purchase of Service and Related Matters. All voted in favor

Unanimous Decision

On item # 6: Mr. Casella moved, seconded by Ms. Yelmini to table until the February 16, 2012 meeting. All voted in favor

Unanimous Decision
On item #7: Mr. Luciano moved, seconded by Mr. Greatorex to accept the recommendation to table this item but not necessarily to the February 16th meeting. All voted in favor

Unanimous Decision

On item # 8: Mr. Luciano moved, seconded by Mr. Greatorex to accept the recommendation to table this item but not necessarily to the February 16th meeting. All voted in favor

Unanimous Decision

Mr. Greatorex also cautioned the Commission that there are many cases where hires come from a teaching background and have been in the Teachers Retirement System and they may not have been counseled that they have an option to stay in the Teachers Retirement System. Assistant Division Director, Jeanne Kopek let the Commission know that the information is very clear in the new documents.

14. REQUEST COMMISSION ACCEPTANCE OF THE STATE EMPLOYEES RETIREMENT SYSTEM INTERIM ACTUARIAL VALUATION AS OF JUNE 30, 2011 Ms. Yelmini moved, seconded by Mr. Luciano to table discussion/acceptance of the Actuarial Valuation report to the February 16, 2012 meeting and for the Actuarial Subcommittee to receive the report prior to the Commission Meeting.

15. DISCUSSION WITH REGARD TO THE RETIREMENT DIVISION FINALIZATION OF AUDITS BACKLOG. After lengthy discussion Ms. Yelmini moved, seconded by Mr. Baus to allow the working group within the Retirement Division and the Audit Unit to move forward with their planning process to tackle the backlog, and to approve the prioritization of applications. There will be periodic updates on the progress to the Retirement Commission. All voted in favor

Unanimous Decision

ADDENDUM ITEM TO THE AGENDA

16. REQUEST COMMISSION APPROVAL OF THE RECOMMENDATION OF THE INVESTMENT SUBCOMMITTEE REGARDING RESETTING THE CREDITING RATE FOR THE STABLE VALUE FUND EFFECTIVE FEBRUARY 1, 2012. Mr. Baus moved, seconded by Mr. Greatorex to reduce the rate from 3.5% to 3.15%. There is a guaranteed rate of 3% with the plan so it will not be changed until it starts moving upward. All voted in favor

Unanimous Decision

OTHER MATTERS:

Mr. Luciano asked for updates to be available on Ice-Miller. Helen Kemp reported that the contract was at OPM to be signed off.

He would also like to know what updates/educational materials are being handed out pertaining to the Hybrid Plan. Jeanne Kopek reported that the Plan document was on the OSC website, and the comparison chart of all four plans is available.

ADJOURNMENT

Ms. Brown-Brewton moved, seconded by Mr. McLellan to adjourn the meeting at 10:13am. All voted in favor.

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