Representative Town Meeting Annual Budget Meeting Materials - Day 4 (linked)

TOWN
OF
WATERFORD
10116
RETIREMENT
COMMISSION
Tyee Toe ee 2021/2022 oe Bs :
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2021/2022
2019/2020
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Increase}
%
Increaxe
167,292
181,100
89,338)
181,448
181,448
131,448
181,448
181,448
348
0.2%
3,812,390]
4,305,701
2,350,602
4,348,776
4,348,776
4,348,776
4.348.776
4,348,776
43,075
1.0%
355,708
396,177
168,065
402.682
402.682
402,682
402,682
402,682
6,505
1.6%)
762,713
1,100,000:
1,101,967!
1,000,000.
1,000,000
750,000
750,000
750,000
(350.000):
31.8%
SUBT
5,098,103|
'5,982:978.
0
3,709,972
5,932,906
5:932,906
5,682,906
|
5,682,906
9
5,682,906.
(300,072)
£5.0%
$5,098,103:|
95,982,978
0
3,709,972
$932,906
5,932,906
5,682,906
5,682,906
a
5,682,906
(300,072)
35.0%,


RETIREMENT
COMMISSION
L YEAR 2022 BUDGET
Town of Waterford
BUDGET FUNCTION
..@ Retirement Commission is charged with the management of the retirement program for
the Town, This budget represents the Commission's estimate of the employer cost required to
fund our retirement plans on an actuarially sound basis.
The Retirement Commission voted to appoint an Investment Manager in April 2016 for
both the pension trust and the OPEB trust fund.The trust was set up and funded in
February 2017,

Retirement Commission
Fiscal Year 2022
Town of Waterford
FY2022 BUDGET SUMMARY
The proposed FY22 budget of $5,682,906 is 5.02% lower than FY21. The decrease in the OPEB
Contribution is the main drivers for the Budget decrease in Fiscal Year 2022.
51930 HEART/HPYERTENSION BENEFITS
The Town is currently paying benefits to two individuals one widow of a former police officer, one
widow of a former firefighter in accordance with judgments of the worker's compensation commission
based upon Connecticut State Statute. In addition, the Town pays for treatment medications for several
active police officers. A cost of living adjustment is provided annually in October based on information
provided by our H & H administrator. The increase is due to the COLA increase.
51940 PENSION CONTRIBUTIONS
Overall Budget down 0.64%. All general employees, police, and firefighters are covered by
MERF B, a State administered plan. Employees who retired prior to the Town joining the
MERF system are covered by the Town administered plan under which there are twelve
retirees presently receiving benefits and one terminated vested employee.
The employer contribution rates for MERF B for fiscal year 2022 have not been released to
date, Rates used are based on expected rates for FY22 received from the State of Connecticut
Retirement Division. Payroll has been estimated based on 2019-2020 projected payroll using
staffing levels as of November 2020. The employee contribution rate for fiscal year 2020-
2021 is 2.25% of payroll and is provided for informational purposes only.
Past service accrued liability exists for all groups except fire and is being amortized over 30
years. The total liability is $427,796.76. The Police department's portion is $417,247.68.
The proposed budget includes an administrative assessment fees for all active and retired
employees of $130.00 per member. The 2020-2021 administrative fee of $81,380 is based on
342 active participants and 284 retirees.
The Public Employees Retirement System Fund (PERS) currently has 10 active participants.
Effective fiscal year 2004, the RTM approved a change in benefit allowing for a minimum pension
of $6,000 annually and offered a one- time $5,000 bonus. An annual increase linked to the CPI-U
was approved with a cap of five (5%) percent per year. The June 30,2020 Actuarial Valuation
Report performed by Hooker & Holcombe, Inc. indicated that based upon the current population
and the approved changes to the plan, the fund will carry an unfunded liability of $570,606 and
required an annual municipal contribution in the amount of $83,000.

Retirement Commission
Fiscal Year 2022
Town of Waterford
51945 RETIREE HEALTH BENEFITS
Overall Budget is up 8.11%. The main driver is an increase in actual monthly cost to the Town. The Town
currently has eighteen (18) retirees who receive post-retirement healthcare benefits. In addition, there are
another 32 employees in the Over 65 classification that receive post-employment healthcare benefits.
The current GGA contract allows for a buy-out of accrued sick time hours in excess of 1,400 per year for
deposit into a Health Retirement Account to be used by the employee for medical costs incurred following
retirement.
The cost of the third party administration of the HRA has been included in the line item. The annual cost
of this excess, sick time accrual is included in the respective employee's department budget.
OTHER POST EMPLOYMENT BENEFITS (OPEB)
On December 1, 2014, the RTM approved the establishment of a trust fund to account for the OPEB
contributions. The Retirement Commission is responsible for the oversight and recommended funding of
the OPEB Trust. The Retirement Commission voted to appoint an Investment Manager in April 2016 for
both the pension trust and the OPEB trust fund.The trust was set up and funded in February 2017.
The Governmental Accounting Standards Board (GASB) issued a Statement 45 requiring the cost of Other
Post-Employment Benefits (OPEB) to be recognized in the year earned (when the employee is working)
rather than when paid (when the employee retires). In addition, the Statement also requires the recording
of a liability (implicit rate subsidy) for those retirees that remain on the Town's plan at their own cost.
Since the cost of similar benefits for these employees would be greater if the retiree was not part of the
group, the statement requires the recording of the liability for the difference. The effective date of
Statement 45 was July 1, 2006.
Proposed Budget for Fiscal Year 2022 contains a decrease of 10%.
As of the July 1, 2020 actuarial valuation, the Town's Unfunded Actuarial Accrued Liability is $17,291,575.
The annual required contribution (ARC) for FY2022 is $2,127,089. The FY20 budget included an
appropriation of $758,613 for funding the trust while FY21 was increased to $1,100,000 based ona
significant increase within the Pension Contribution Fund due to the State Retirement Commission Board
approving an increase in the Employer percentage share. For Fiscal Year 2022, we are requesting $750,000.

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HEALTH
RETIREES
C
-
HRA
OVER
P/Y
RETIREE
HEALTH
BENEFITS
-SUMMARY
SHEET
2021-2022
PROPOSED
BUDGET
MONTHLY
COST
1
Budget
calculation
based
on
October
2020
monthly
cost
to
Town.
?
Budget
calculation
based
on
October
2020
rates.
3
In
2019-20,
18
retirees
were
reimbursed
for
Non-BCBS
supplement.
The
total
reimbursement
was
$35,986.62.
The
retiree
must
submit
copies
of
paid
invoices
to
receive
the
TOWN
OF
WATERFORD
NO.
OF
MONTHS
ANNUAL
COST
12
12
12
12
12
reimbursement.
4
$68,492.04
$35,986.32
396,177
1.64%
prospective
retiree
using
the
2-person
rate
an & @Nn
There
are
currently
10
employees
that
are
eligible
to
retire
under
the
plan,
budget
includes
3
5
Third
party
fee
for
the
administration
of
the
HRA
accounts
alowed
for
in
the
current
GGA
contract.
Third
party
vendor
is
Flores
&
Associates.
51945-RETIREE
HEALTH
BENEFITS

In January 2019, this office provided you with a projection of future employer contribution rates for that
period. Those projected employer contribution rates will need to be adjusted to reflect any change in the
required employee contribution rates.
Revised Forecast of Future Contribution Rates for Participating Entities: On June 5, 2019, the General
Assembly passed Amendment B to P.A. 19-124, entitled “An Act Concerning Municipal Arbitration and the
Municipal Employees’ Retirement System.” The new statute amends Conn. Gen. Stat. § 7-440, to provide for
increases in employee contributions to MERS in each of the next six fiscal years.? Assuming P.A. [9-124
becomes law, the effect of the increases would be to reduce the required employer contribution rates,
It is expected that the Governor will sign Public Act No. 19-124, but that he will do so sometime after July 1,
2019. Subject to the Governor’s allowing the bill to become law, the employer contribution rates for MERS
will be revised as indicated below.
Impact of Public Act No, 19-124 on Employer Contribution Rates to Be Effective July 1, 2019
The following chart accounts for the P.A. 19-124 amendments and provides the revised MERS employer
contribution rates, effective July 1, 2019, assuming P.A. 19-124 becomes law:
General with SS d42ay 13.73%
General without SS AA F2% 14.23%
Police and Fire with SS 49,959 19.45%
Police and Fire without SS 2OFA% 20.24%
Impact of Public Act No. 19-124 on Projected 5-Year Phase in of Employer Contribution Rate Increases
Consistent with the Retirement Commission’s decision to use direct rate smoothing to phase in rate increases
over the next five years, and assuming the 2018 Normal Cost Rates remain stable, the implementation of the
PA, 19-124 amendments will adjust the future employer contribution rates for MERS participating entities as
follows:
General with $$ 13.73% 15.24% 16.75% 18.26% 19.34% 18.85%
General without SS 14.23% 16.25% 18.25% 20.26% 22.33% 21.84%
Police and Fire with SS 19.45% 20.95% 22.45% 22.90% 22.40% 21,90%
Police and Fire without $$ 20,24% 21.84% 23.44% 25,04% - 26.34% 25.84%
? The text of the amendment is available on the website of the General Assembly, at
ittps://www.cga.ct.zov/20 19/ACT/pa/pd f/201 9PA-00[24-R00SB-00882-PA.pdf.

Implementing Revised Rates
If it becomes law, the new legislation will increase the rate of members’ contributions to MERS—to 5.5% of
salary from which contributions may not be deducted under Conn. Gen. Stat, §7-453, and 2.75% of salary
from which such contributions may be deducted—effective July 1, 2019. (Employee contribution rates will
continue to increase for each of the five following fiscal years.) Any decrease in the employer contribution
rates for MERS participating entities will be effective as of the same date. We will notify you immediately if
and when the legislation goes into effect.
We recognize that these important changes will be difficult to implement within so short an amount of time.
The Retirement Services Division is prepared to provide any assistance we can to facilitate participants’
transition. If you have any questions concerning this matter, please contact the undersigned, at (860) 702-
3443.
Sincerely,
STATE EMPLOYEES RETIREMENT COMMISSION
KEVIN LEMBO, SECRETARY EX OFFICIO
. Wh Ie
John W. Herrington, Director
Retirement Services Division

STATE EMPLOYEES
RETIREMENT COMMISSION
STATE OF CONNECTICUT
OFLRICE ofiie STATE COMPTROLLER
55 Elm Street
MEDICAL EXAMINING BOARD Hareford, CT 06106
for DISABILITY RETIREMENT
Jane 25, 2019
RE: New Legislation (S.B, 882) and Revised Forecast of CMERS Contribution Rates
lam writing to entities that participate in the Connecticut Municipal Employees Retirement System (“MERS”)
to inform you about a new legislative development that is likely to reduce your required contribution rates,
effective July 1, 2019.
As this office advised you in January, the MERS Plan Actuary has recommended a decrease in the assumed
rate of return that is used for the annual, actuarial valuation of the plan. The Connecticut State Employees
Retirement Commission accepted this recommendation, necessitating a significant increase in the required
contribution rates to be paid by MERS participating entities, beginning in Fiscal Year 2019-2020.
On June 5, 2019, the General Assembly passed Public Act No. 19-124 (“P.A, 19-124”), which includes an
increase in employee contributions to MERS in each of the next six fiscal years. If this bill becomes law,
it would have the effect of reducing the required employer contribution rates. The Commission anticipates
that Governor Lamont will sign P.A. 19-124 within the next few weeks, The Commission has calculated new
tates for employer contributions, which differ from the forecasted rates you received in January, and which are
provided below. These new rates will go into effect, if and when the Governor signs P.A. 19-124.
Please note: If the new employee contribution rates do become law, they will take effect as of July 1, 2019.
It is important, therefore, that MERS participating entities prepare for these potential changes as quickly as
possible,
Reducing the Assumed Rate of Return: In the most recent Experience Investigation, the Plan Actuary
recommended that the assumed investment rate of return be reduced, from 8.00% to 7.00%,' Jn accepting this
recommendation, the Retirement Commission decided to use direct rate smoothing, to phase in the resulting
increases to the MERS employer contribution rates over the next five years.
' The most recent MERS Experience Investigation covered the five-year period from July 1, 2012, through June 30, 2017. The
Plan Actuary’s report on this investigation is available on the website of the Office of the State Comptroller, at:
hetps:/Ayww.osc.ct. cow thsd/reports/ 11 1420 [8%20CMERS%20Experience%20Jnvestigation%020ReportTM%202017.pdi. The
recommendation concerning the investment rate of return appears on pages 11-14 of the report.
RETIREMENT SERVICES DIVISION
PHONE: (860) 702-3480 | FAX: (860) 702-3489

Retirement Commission Wednesday, November 18, 2020
Meeting Minutes 5:00pm
Zoom Meeting
Present:
Absent:
Others:
Staff:
Chair Susan Driscoll, Kevin Petchark, Richard Muckle, Mark Gelinas, - ro o
Marcia Benvenuti, Bruce Miller (5:16pm) ;
Robert J, Brule, First Selectman
yep
Devon Francis of Di Meo Schneider formerly of FIA
: kom)
Abbas Danesh, Treasurer, Kimberly Allen, Director of Finance, and vd Matyellee
McConnell, Secretary .
Establishment of a quorum and call to order:
A quorum was established and a call to order was established at 5:06 pm,
November 18, 2020. ;
Approval and acceptance of minutes.
Motion by Richard Muckle and seconded by Marcia Benvenuti to approve the
August 12, 2020, hearing minutes.
Vote: 5-0 Motion: Passed
Review of 3020 performance of Waterford Pension and OPEB Plans July-Oct
2020; presentation by Devon Francis FIA/Di Meo Schneider.
Discussion ensued regarding the pension portfolios that is handled by De Meo
Schneider. Questions followed from the commission.
Review Status of Pension Fund and OPEB Fund ~ Wells Fargo 3 Quarter (7/1/20
— 9/30/20).
Discussion ensued regarding the Wells Fargo Pension and OPEB Funds.
Questions followed from the commission.

Retirement Commission
Zoom Meeting -
11/18/2020, Page 2
5.
Consider and act upon proposed Retirement Commission FY21-22 budget
Discussion ensued with Susan Driscoll and Kimberly Allen regarding raising the
contribution rates. The Town has not received numbers yet from the state so we
originally went with an across the board increase, Baséd on 5-year rate
projections provided by the state in February, the committee discussed
increasing the rate for town salaries from 16.24% to 16.75% and police/fire
salaries from 21.95% to 22.45%, for a new total for the FY21-22 Contribution
Rate of $4,348,776. With this change, it brings us to a reduction of .36%.
Motion by Marcia Benvenuit and seconded by Richard Muckle to approve the
budget as amended with the increased contribution rates to 16.75% and 22.45%
for the FY21-22 budget.
Vote: 6-0 Motion: Passed
Update on Retirement Commission Annual Report for FY19-20 to be included in
Board of Finance’s Annual Report for Town of Waterford.
Susan Driscoll and Kimberly Allen are updating the report, which will be
distributed to the committee.
Establishment of 2021 Meeting Schedule
The following quarterly schedule for 2021 was presented, all meeting times are
at 5:00 pm: ; ;
January 20, 2024
April 21, 2024
July 24, 2021
November 17, 2021
Motion by Marcia Benvenuti and seconded by Mark Gelinas to approve the 2021
Meeting Schedute-
Vote: 6-0 - Motion: Passed

- Retirement Commission
Zoom Meeting
11/18/2020, Page 3
8, New Business:
According to the ordinances’, there will be new appointments from the Board of
Selectmen, Fire Services, Police Commission and the Board of Education are
scheduled to appoint a member to serve on the Retirement Commission in -
December.
9. Adjournment:
Motion by Marcia Benvenuti and seconded by Richard Muckle to adjourn the
Meeting of the Retirement Commission at 6:11 p.m.
Vote: 6-0 Motion: Passed
Respectfully submitted,
Maryelien wt cConnell, Secretary