Retirement Commission Special Meeting Materials (linked)

Retirement Commission Wednesday, February 16, 2022
Meeting Minutes 5:30pm
Zoom Meeting
Present: Chair Susan Driscoll, Richard Muckle, Linda Finnegan, Chris Gamble
Absent: Kevin Petchark, Craig Merriman, Robert Brule, First Selectman
Staff: Kimberly Allen, Director of Finance, and Maryellen McConnell, Secretary S
1. Meeting called to order at 5:35 pm. . os
: a)
2. Public Comment: There was no public comment. om
3. Approval of minutes from the meeting of December 15,2021. “a OD
Motion by Richard Muckle and seconded by Linda Finnegan to approve the
minutes as presented.
Vote: 3-0-1 Abstain: Chris Gamble Motion: Passed
4. Consideration of 4Q21 Quarterly Investment Review: Devon Francis of Fiducient
Advisors presented the main take-aways from the very detailed report, fielded
members’ questions, and discussed the past and forecasted impacts of record-
breaking volatility in the stock market on our pension and OPEB investment
portfolios’ performance.
She began by noting that Fiducient Advisors had been working closely with
Principal Trust Company, which recently purchased Wells Fargo. Full conversion
to the new service provider (e.g., for online account management, benefit
payments, and money transfers) is to begin February 18. She anticipated that
the conversion should not trigger any practical changes for the town.
Ms. Francis reported that last year’s strategy, approved by the Commission, to
slightly alter the allocation of assets in our two portfolios to better our position
in the pandemic-driven volatility of the stock market was successful. Hooker &
Holcome, our actuaries, had set rate-of-return targets of 6.25% for our pension
portfolio and 6.5% for our OPEB portfolio. The performance summary data for
2021 shows that both targets were met and that overall return rates since each
plan’s inception (in 2016 and 2017, exceed the targets.

Retirement Commission Meeting
Page 2, February 16, 2022
The QIR includes 20-year forecasts for the pension and OPEB plans, with three
options for portfolio asset allocations geared toward meeting return targets.
Ms. Francis noted that given the current environment, her firm is assuming
lower returns for the 10-year full market cycle. She offered frank comments
about ongoing challenges, including rising inflation, spiking oil costs, supply chain
issues, and indications that the Fed plans to hike interest rates. But she added
that there has been late-breaking good news, including positive changes in the
government’s reports on jobs and household debt. Based on all the indicators,
her firm is cautiously optimistic that inflation will gradually moderate to just
north of 3% by the end of 2022. As before, she will continue to monitor and
assess and will contact us immediately if a change in asset allocation strategy is
warranted to meet our return targets. ,
5. Review of the revised Retirement Commission FY23 budget - The revised budget
submitted to and approved intact by-the Board of Selectmen incorporated all of
the changes requested by the Commission at the December 15, 2021, meeting.
Finance Director Allen also utilized more recent actual expenses to recalculate-
and reduce-our Pension Contributions (Line 51940) request in the budget.
6. Review of Pension and OPEB Funds — Wells Fargo 4Q21: For the benefit of new
members, Finance Director Allen explained that these reports are best
considered in conjunction with the Quarterly Investment Reviews; the QIRs show
performance of our invested funds, while the Wells Fargo reports focus on cash
flow, including pension benefits paid and administrative/investment fees. She
noted that Town Treasurer Abbas Danesh had reviewed the reports and had
found no red flags. She added that, at present, there are no changes in our
contacts or fees resulting from the recent acquisition of Wells Fargo by Principal,
but she will keep us posted.
7. Consideration of tentative meeting schedule: The next meeting is tentatively
scheduled for April 20, 2022 at 5:30pm, pending availability of data for review.

Retirement Commission Meeting
Page 3, February 16, 2022
8. Adjournment:
Motion by Richard Muckle and seconded by Chris Gamble to adjourn at 6:28
p.m.
Vote: 4-0-0 Motion: Passed
Respectfully submitted,
Maryellen/McConnell, Secrétary