DANVERS — The Essex Regional Retirement Board, beset by local officials for months, finally did yesterday morning what those officials have asked it to do since last summer:
On a 3-1 vote, the board agreed to transfer control of its investments to the state's Pension Reserves Investment Trust.
It made the move, as Middleton Town Administrator Ira Singer observed, "kicking and screaming all the way."
The Retirement Board, one of the last remnants of county government, has been managing the retirement benefits of local municipal employees and retirees since its inception. Like all public retirement boards in the state, it is required to meet several criteria, including its return on investments and progress toward being fully funded within the next 20 years.
When the board's investments took a 33 percent loss in 2008 — the worst performance of any retirement board in the state — it brought to a head a litany of complaints from local officials. Distilled, the common thread is that the board frequently acts without regard for taxpayers, who must help cover the costs of pensioners.
While Timothy Bassett, the board's executive director, spent most of yesterday's meeting talking about how well the board's investments are performing so far this year, local officials reiterated they aren't complaining about a single year.
"The 10-year history shows (the board) lost $40 to $70 million dollars," compared to the state fund, Singer said after yesterday's meeting. "That's not made up in a single year."
Retirement Board member — and Rockport Town Treasurer — Roberta Josephson, who cast the sole vote against the change, made an emotional case that while the board has heard plenty from town officials, it hasn't asked present and future retirees how they feel about the move.
"I've had a number of them ask me, 'You're not moving the money, are you?'" Josephson said. She also questioned whether any of the members — the towns, school districts and other governmental bodies in the system — had asked their employees how they felt about the change. The towns of Rockport, Essex and Manchester had all been among those whose boards who called for making the change. Officials from several towns noted after the meeting, however, that employees' benefits are protected by statute, no matter who invests the pension funds. If they suffer a loss, taxpayers are required to make up the difference.
"It's the taxpayers who are at risk," Singer said. "It's always been the taxpayers. Why on earth would we poll the employees? That's absurd."
The board originally scheduled a vote on this decision for September, but Josephson made a non-debatable motion at that meeting to table the issue before discussion began. Her motion carried then, but yesterday she was the only board member holding out for the status quo.
Member Katherine O'Leary followed the meeting via a telephone conference call, but did not cast a vote.
Several times, Bassett made a case that one of the dictums the board was given by member communities was to keep costs low, and people had lost sight of that.
"What hurt our feelings most was that all the efforts we made to keep costs low were ignored in this discussion," he said.
In a written statement handed out by Bassett mere minutes after the vote, the board pledged to transfer control of 80 percent of its funds to the state system by January of next year.
Steve Landwehr can be reached at slandwehr@gloucestertimes.com
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