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

September 17, 2009

TRUSTEES PRESENT
Peter R. Blum, Chairman
Bob Baus
Steve Caliendo
Charles Casella
Robert Coffey
Richard Cosgrove
Thomas Culley
Steve Greatorex
Ronald McLennan
Claude Poulin
Linda Yelmini
Sandra Fae Brown-Brewton

ABSENT
Paul Fortier
Sal Luciano

OTHERS PRESENT
Mark Ojakian, Deputy Comptroller and Division Director
Jeanne Kopek, Assist. Director, Retirement Services
Helen Kemp, Assist. Director, Retirement Services
Colin Newman, Assist. Director, Retirement Services
Peggy Gray, Executive Assistant, Retirement Services
Marilyn Rodriguez, Secretary II, Retirement Services
Karen Buffkin, Counsel for the State Comptroller

GUESTS
George Spurlock, CEUI

PRESENT AT THE HEARINGS
Attorney Robert Krzys
Attorney Charles Fresher
Michael Cozzolino
Attorney Gregory Bass
Adlaberto Rodriguez

CALL TO ORDER

The Chairman called the meeting to order at 9:05 AM

CHAIRMAN'S REPORT

The matter that was before us in the Federal Court is no longer before the Court. An Administrative Declaration has been filed with the Division but to date nothing further has transpired.
The Annual Chairman's Luncheon will be directly after today's meeting.

DIVISION DIRECTOR'S ADMINISTRATIVE AND SUBCOMMITTEE REPORT

The Deputy Comptroller reported that the Pending Disability Applications as of August 31, 2009 are as follows. Applications pending review are 45, those reviewed and waiting for further information are 355. 162 Applications were denied. For the month of August, 9 applications were received, 29 were on the agenda and 20 applications were approved. The next available meeting for scheduling is December 2009.

Following the close of the September 2009 retirement payroll, the current backlog of unfinalized records is approximately 10, 468. The Division processed 97 new retirees to the September payroll (77 normal, 20 disabilities) Finalizations for the month were 53.

The final numbers for the RIP are as follows. June 2009 there were 557 RIP, and 59 Non-RIP. July 2009 there were 3097 RIP and 111 Non-RIP, for a total of 3824 retirees.

Because of the backlog we have received permission to add some additional needed staff to the Retirement Division we are working with OPM to make this happen as soon as possible.

Now that the big push for putting folks on payroll has ended, resources are now reallocated to projects that were put on hold for the RIP. I would ask once again that if Commission members need something done that they work through me to facilitate and coordinate Division tasks.

OLD MATTERS:
None

1. REQUEST COMMISSION APPROVAL OF THE MINUTES FOR AUGUST 20, 2009

Mr. Cosgrove moved, seconded by Mr. Greatorex to approve the minutes of August 20, 2009. All voted in favor

Unanimous Decision

2. REQUEST COMMISSION APPROVAL OF THE STATE EMPLOYEES RETIREMENT COMMISSION CHAIRMAN'S PER DIEM REIMBURSEMENT.

Mr. Cosgrove moved, seconded by Mr. Greatorex to approve the State Employees retirement Commission Chairman's per diem reimbursements. All voted in favor

Unanimous Decision

3. REQUEST COMMISSION APPROVAL OF THE STATE EMPLOYEES RETIREMENT SYSTEM SERVICE RETIREMENTS FOR THE MONTH OF AUGUST 2009.

Mr. Culley moved, seconded by Mr. Poulin to approve the State Employees Retirement System Service Retirements for the month of August 2009. All voted in favor

Unanimous Decision

4. REQUEST COMMISSION APPROVAL OF THE STATE EMPLOYEES RETIREMENT SYSTEM VOLUNTARY PENDING DISABILITY RETIREMENTS FOR THE MONTH OF AUGUST 2009.

Mr. Culley moved, seconded by Mr. Poulin to approve the State Employees Retirement System Voluntary Pending Disability Retirements for the month of August 2009. All voted in favor

Unanimous Decision

5. REQUEST COMMISSION REVIEW OF THE STATE EMPLOYEES RETIREMENT SYSTEM DISABILITY RETIREMENTS FOR THE MONTH OF AUGUST 2009. Commission trustees reviewed.

6. REQUEST COMMISSION APPROVAL OF THE CONNECTICUT STATE EMPLOYEES RETIREMENT SYSTEM RETROACTIVE RETIREMENTS FOR THE MONTH OF AUGUST 2009.

Mr. Culley moved, seconded by Mr. Poulin to approve the State Employee Retirement system Disability Retirements for the month of August 2009. All voted in favor

Unanimous Decision

7. REQUEST COMMISSION APPROVAL OF THE STATE EMPLOYEES RETIREMENT SYSTEM PRE RETIREMENT DEATH BENEFIT RETIREMENTS FOR THE MONTH OF AUGUST 2009.

Mr. Culley moved, seconded by Mr. Poulin to approve the State Employee Retirement System Pre Retirement Death Benefit Retirements for the month of August. All voted in favor.

Unanimous Decision

8. REQUEST COMMISSION APPROVAL OF CONNECTICUT PROBATE JUDGES AND EMPLOYEES RETIREMENT SYSTEM RETIREMENTS.

Mr. Culley moved, seconded by Mr. Poulin to approve the Connecticut Probate Judges and Employees Retirement System Retirements. All voted in favor.

Unanimous Decision

9. REQUEST COMMISSION APPROVAL OF THE MUNICIPAL RETIREMENT SYSTEM RETIREMENTS

Mr. Culley moved, seconded by Mr. Poulin to approve the Municipal Retirement System Retirements. All voted in favor.

Unanimous Decision

10. REQUEST COMMISSION ACCEPTANCE OF RECOMMENDATIONS OF THE MEDICAL EXAMINING BOARD FROM ITS MEETING OF AUGUST 28, 2009 RELATIVE TO APPLICATIONS FOR DISIBILITY RETIREMENTS RECEIVED FROM THE MUNICIPAL EMPLOYEES RETIREMENT SYSTEM

Mr. Culley moved, seconded by Mr. Poulin to accept the recommendations of the Medical Examining Board from its meeting of August 28, 2009 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 CONNECTICUT PROBATE JUDGES AND EMPLOYEES RETIREMENT FUND PERSONAL EXPENSES FOR THE MONTH OF AUGUST 2009.

Mr. Culley moved, seconded by Mr. Poulin to approve the Connecticut Probate Judges and Employees Retirement Fund Personal Expenses for the month of August 2009
All voted in favor.

Unanimous Decision

12. REQUEST COMMISSION APPROVAL OF THE STATE EMPLOYEES RETIREMENT COMMISSION MANAGEMENT TRUSTEES PER DIEM AND TRAVEL EXPENSES REIMBURSEMENTS.

Mr. Cosgrove moved, seconded by Mr. Greatorex to approve the State Employees Retirement Commission Management Trustee's Per Diem and Travel Expenses Reimbursements. All voted in favor. Mr. Baus abstained.

Majority Decision

13. REQUEST COMMISSION APPROVAL OF THE STATE EMPLOYEES RETIREMENT COMMISSION UNION TRUSTEES PER DIEM AND TRAVEL EXPENSES REIMBURSEMENTS.

Mr. Culley moved, seconded by Mr. Greatorex to approve the State Employees Retirement Commission Union Trustee's Per Diem and Travel Expenses. All voted in favor. Mr. Poulin abstained.

Majority Decision

14. REQUEST FOR RECONSIDERATION OF THE COMMISSION'S DECISION ON THE FOLLOWING REQUESTS FOR WAIVERS OF REPAYMENT OF OVERPAYMENTS.

Mr. Cozzolino, through his Attorney Charles Fresher, requested a hearing on his request for reconsideration of the Commission's July 16, 2009 decision on his request for a waiver of the repayment of the overpayment of $203,639.52.

Mr. Cozzolino attended the hearing and was represented at the hearing by Attorney Charles Fresher. Both Mr. Cozzolino and Attorney Fresher spoke with regard to the approval of Mr. Cozzolino's request for waiver.

Both Mr. Cozzolino and his attorney acknowledged that Mr. Cozzolino's overpayment was due to the receipt of Sec. 5-142(a) disability compensation payments and that Mr. Cozzolino was informed via two letters he received in 2003 that the concurrent receipt of voluntary, normal or hazardous duty retirement income and disability compensation pursuant to Section 5-142(a) is specifically barred by statute. The parties acknowledged that the letter dated May 6, 2003 informed him that if he should receive 5-142(a) payments in the future he was to immediately notify the Division as receipt of such payments would terminate his SERS disability benefit.

Mr. Cozzolino stated that waiver was appropriate because:

(1) Hisfailure to notify the Division was not intentional. He had forgotten about receiving the two letters from the Division. He had surgery and was in pain and on medication causing memory problems.

(2) That either one or both GAB Robbins (the WC TPA for the State of CT) or the AAG's office were agents of the State, knew he was collecting Sec. 5-142a monies, knew he was collecting a retirement benefit and therefore assumed that the amount was proper since he was not informed otherwise by either of these two parties.

(3) That he is seeking through the Workers Compensation Commission to have the benefits re-designated as Sec. 31-307 benefits. The Retirement Division has been unable to tell him at this time if he managed to succeed in this re-designation what would the effect be on his offset.

(4) At the very least, his monthly repayment should be reduced and the attorney fees he paid (approximately $40,000) to secure such benefits be an "offset" against the overpayment.

Mr. Cozzolino said he was sorry and apologized for the oversight. It was noted that at the present time he is not collecting Sec. 5-142a benefits or any workers compensation monies. Because his entire SERS retirement benefit is being taken, he cannot afford to pay his mortgage or bills.

Under questioning, Attorney Fresher acknowledged that the type of payment (Sec. 5-142a) was noted on every workers compensation hearing notice and that Mr. Cozzolino was presented by counsel at all these hearings. Attorney Fresher also acknowledged that prior to August 2009, Retirement Division personnel were not notified of, or present at, any hearings on this benefit.

Action: The Commission deferred action on this request until it received additional information with regard to some of the issues raised by Attorney Fresher. The Commission also requested Attorney Fresher send them information and documentation with regard to legal representation and the amount of attorney fees paid to date with regard to Section 5-142a.

Ms. Dickman requested a hearing on her request for reconsideration of the Commission's July 16, 2009 decision on her request for a waiver of the repayment of the overpayment of $25,865.09.

Ms. Dickman was represented at the hearing by Attorney Robert Krzys. Ms. Dickman did not attend the hearing. Attorney Krzys stated that he and his client did not challenge the amount or appropriateness of the overpayment. Attorney Krzys stated that his client also withdrew her claims that legal fees paid to her social security attorney and workers compensation attorney(s) were not deducted from her offsets: that she now agreed that they were and are being deducted.

Attorney Krzys stated that the purpose of the hearing and the request for reconsideration was to seek a reduction of the repayment of the overpayment from $1,500 per month to $518.00 per month. He explained why the current rate of $1,500 was a financial hardship to his client and noted that his client had initially been offered a repayment of $518.00 per month and thus was not asking for a new amount.

After review of all the material presented to the Commission and after Attorney Krzys' argument in support of his client's position, the Commission favored granting the request for a modification - going forward - of Ms. Dickman's monthly repayment of the overpayment (from $1500 per month to $538.00 for a period of 39 months and then for one month at $383.69). However, before doing so, as Ms. Dickman was not in attendance at the hearing, the Commission needed formal agreement by Ms. Dickman that if this modification occurred that it would completely resolve any and all issues, claims and disputes that may exist between Ms. Dickman, the Commission and the Retirement Division with regard to this overpayment and the waiver process. The Commission also wanted acknowledgement that this repayment would be "first in line" should any creditors appear seeking repayment of any other debts.

Action: A motion was made by Ms. Yelmini and seconded by Mr. Poulin to have Division Counsel negotiate and secure a formal agreement with Ms. Dickman in accordance with the Commission's position. Unanimous decision.

Mr. Rodriguez requested a hearing on his request for reconsideration of the Commission's July 16, 2009 decision on his request for a waiver of the repayment of the overpayment of $ 67,625.35.

Mr. Rodriguez was represented at the hearing by Attorney Greg Bass (Greater Hartford Legal Aid). Mr. Rodriguez attended the hearing as well as a staff member from GHLA to translate for Mr. Rodriguez and Attorney Bass.

The CMERS system has a built-in social security reduction. Conn. Gen. Stat. Section 7-437 requires the CMERS retirement benefit be reduced when the retiree is eligible for social security (age 62) or earlier if the retiree receives a Social Security disability benefit. Mr. Rodriguez is a former employee of the City of Hartford. When he retired on July 15, 1997, he was advised that his benefit would be reduced at age 62 or upon receipt of a social security disability award. In a January 16, 1998 letter he was also advised that if he received a social security disability award, he needed to furnish CMERS with a copy of the award notice.

He received social security disability payments beginning in October 1997 - very close to the time he had received the MERS notice telling him he must report this income. He did not tell MERS he was receiving this money in January 1998 upon receipt of his letter. He received additional SSDI monies beginning in October 1998. He did not notify MERS that he was receiving these monies at that time.

The parties did not contest the amount of the overpayment or the fact that Mr. Rodriguez received the social security payments as indicated. A summary of the arguments, testimony and documents asserted at the hearing are as follows:

(1) Mr.Rodriguez was ill at the time that he received his social security disability award and his MERS pension.

(2) Mr.Rodriguez has no recollection of ever receiving the January 16, 1998 letter from the Commission. He had difficulties with receiving mail at his address (at that time in 1997 and 1998) and even reported lost retirement checks. He was therefore unaware of this obligation.

(3) Mr.Rodriguez is a limited English-proficient individual whose primary language is Spanish. He has a 9th grade educational level. He has great difficultly in communicating in English so even if received it he might not have understood its implications. The only one he had helping him translate documents was his 10 year old granddaughter so even if he had gotten it and she read it to him, the implications might have been lost.

(4) Thesubcommittee/commission erred in their determination of his income and monthly expenses (determining they were less than they were) - however - even using the Subcommittee's determination his monthly expenses exceed his current monthly income. Hardship will result if he had to repay $563.54 per month. He is already behind several months in his mortgage payments and other bills.

(5) Hiswife had had several strokes and was ill requiring care and was unable to work.

(6) It appears that the Commission utilized the social security overpayment criteria in developing its criteria. Using Social Security regulations as analogous guidance in determining a waiver, SSA guidelines include considering the individual's age, intelligence and educational or linguistic limitations. The Commission should also utilize these regulations as a guide in considering the reconsideration request

(7) No one - including the City and his own union - advised him of this requirement. He had an illness at the time of his retirement and because of it people did not want to associate or work with him or communicate with him. The City basically gave papers to him to sign and that was all.
The Commission did not believe that one or two arguments by themselves were persuasive even if true but rather when believed and combined, all of the arguments together (lack of English proficiency, trouble with mail delivery, interpretation by 10 year old grandchild, no counseling from the City due to reluctance to meet with Mr. Rodriguez because of the nature of his illness) indicated that Mr. Rodriguez met the first two prongs of the three prong criteria. The Commission found Mr. Rodriguez credible and when all of the arguments were combined, found he met the first two prongs.

Once Mr. Rodriguez met those prongs, the Commission was able to look at his financial condition to determine if "hardship' existed to justify waiver. Mr. Rodriguez testified that his wife had several strokes and was currently unable to work. They had been taking care of some grandchildren for whom they had received income but the grandchildren had gotten older and income ceased. Although hardship did exist, the Commission discussed whether the amount should be waived or reduced, or, should the amount remain the same but the monthly repayment be changed. After reviewing the tax returns and the financial documentation provided including information indicating that he had missed mortgage payments and after questioning Mr. Rodriguez with regard to some of these financials, and noting that this was a unique and unusual case, the Commission determined that extreme financial hardship did exist.

Action: Upon motion made by Mr. Greatorex and seconded by Mr. Baus it was moved that that the Commission granted Mr. Rodriguez' request for reconsideration specifically holding that:

(a) Theentire amount of overpayment. ($ 67,625.35) be waived. That is, Mr. Rodriguez is granted a waiver from repaying this amount.

(b) That the amount Mr. Rodriguez has repaid to date ($563.54 for August 1, 2009 and $563.54 for September 1, 2009) be refunded (reimbursed) to him.

Voting in favor of the motion: 9; voting against the Motion: 2
Motion carried.

Mr. Hardell requested reconsideration of the Commission's May 21, 2009 decision on his request for a waiver of the repayment of the overpayment of $ 3,592.38. Mr. Hardell requested a record review of the decision and submitted a handwritten letter in support of his position.

As a Tier I, Plan B member, Mr. Harrell's retirement benefit is subject to adjustment upon attaining age 65 or earlier for receipt of a Social Security disability award. Mr. Hardell retired effective January 1, 1990. He was sent two letters, one dated December 21, 1989 and one dated February 1, 1994 which informed him that if he should be awarded a Social Security Disability Benefit before he reached the age of 65, he needed to inform the Division of such award. Mr. Hardell received a Social Security disability award effective April 1, 2004. He did not inform the Division. The Division discovered the award in October 29, 2008.

It was determined that he had been overpaid the amount of $3,592.38. Mr. Hardell's current SERS monthly benefit is $1,585.35 plus he receives $1,578.40 as a Social Security monthly benefit. The Commission decided that upon review of, and based upon his financial information, an appropriate repayment rate for him was the rate of one hundred dollars per month ($100) to be paid until the overpayment has been repaid in full.

Mr. Hardell's appeal stated that he had medical problems and difficulties but he did not submit any medical documentation in support of his claim. He also did not produce any additional information to show why the repayment, especially at $100 per month, was a financial hardship. The information he submitted in support of his request for reconsideration was the same as he had initially submitted for his waiver request.

Action: Mr. Caliendo moved and Mr. Baus seconded to deny Mr. Hardell's request for reconsideration. Unanimous decision.

ADJOURNMENT

Mr. Casella moved, seconded by Ms. Brown-Brewton to amend the agenda. All voted in favor.

Mr. Casella moved, seconded by Mr. Poulin to take up the contracts for the actuarial work for SERS and MERS. All voted in favor.

Mr. Cosgrove moved, seconded by Mr. Casella to accept the recommendation of the Actuarial Subcommittee that authorizes Karen Buffkin on our behalf to submit the contracts to Buck Associates for MERS and Cavanaugh McDonald for SERS for their consideration. If they sign the contracts we will be authorizing the Comptroller to sign the contracts on our behalf. If they come back with changes then we would have to review those changes and the Comptroller would not be authorized to sign on our behalf.
All voted in favor

Unanimous Decision

Mr. Greatorex moved to adjourn, seconded by Mr. McLellan. All voted in favor.

Meeting adjourned at 11:52 AM

______________________________
Peter R. Blum. Chairman
State Employees Retirement Commission

_________________________________
Mark E. Ojakian
Deputy Comptroller and Director of Retirement Servi

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