North Adams Council Asks Retirement Board to Poll Members on Stipend
Retirement System Administrator Beth Matson explains the reasoning for adopting a state law allowing stipends for Retirement Board members.
City Councilor Marie T. Harpin raised the issue in a communique to the council on behalf of the board, which cannot vote to enact any benefits upon itself.
The board, through its Administrator Beth A. Matson, is asking that the council adopt Massachusetts General Law Chapter 32 that sets a stipend of no less than $3,000 and no more than $4,500 annually. The stipend would be paid out of the investment revenue under the board's control and not from city coffers.
"Last year, our system ranked 20.83 percent in investment income, which amounted to over $10 million," Matson told the council. "That ranked us second in the state compared to the 104 systems in Massachusetts. I think those numbers speak to the value of experience held on this board."
The five-member board consists of two members appointed by the mayor, two elected by the membership of the retirement system, and one member selected by those four board members. The board represents 88 years of service, including two members who have served for more than 20 years each.
"While we agree with the concept of volunteer boards, we feel that it is prudent to pay a stipend in order to find and retain quality members for this very important Board," Matson wrote in an explanation to Harpin, who is the liaison to the Retirement Board.
The board oversees some $65 million in funds that are paid out to city retirees and has averaged a more than 9 percent return over 33 years. Matson said the fund could pay out 75 percent of its full obligations at this point.
"Our goal is to hit 7.25 [percent] and we did 20.83," she told the council. "You're talking $15,000 compared to $65 million, it's negligible."
Matson said only North Adams and Montague do not offer a stipend to retirement board members out of the 16 boards in Western Massachusetts. Since pension reform in 2012, board members are required to attain 18 education credits a term (at least 3 a year), mainly through attending three-day conferences held twice a year. The Retirement Board is also the only board that requires its members to file financial disclosures.
"It's my belief that it shouldn't cost money to serve on a volunteer board," Matson said, noting that some board members are self-employed and that attending conferences take away from their ability to earn income. "I just also want to reiterate the board is a legal and distinct entity from the city and money spent on the stipend would come from the retirement system."
The council seemed generally supportive but did question membership support for stipends, the process for voting and the fidelity of the board.
Matson explained that 80 percent of the state's boards had used this legislative process to enact stipends but the board itself could not vote in any way, according to the opinion received from its counsel and the state Ethics Commission. Stipends had been raised during a meeting in September 2017 and she believed that a majority were in favor. The board members' attendance was "excellent" and, when not in the city, are able to call into the monthly meetings. She said she was often in contact with at least two or three members during the week.
While the fund is in the hands of a financial manager, the board regularly oversees the selection of that management. Matson said she is preparing requests for proposals that are expected to attract up to 30 applications that the board will then have to review and choose from.
"This is a big commitment for a volunteer board," said Harpin. "I know we have a lot of boards here but these guys actually have a responsibility to have some education on a regular basis and a responsibility for their personal financial statements, which we don't even do as councilors. For me, that's a risk."
The board had not polled its members, however, to see if there was backing for a stipend.
"I have no problem, it's not costing the city any money they do a lot of really hard, good work and probably deserve but again, I don't think your ducks are in a row," Councilor Wayne Wilkinson said. "I think you should withdraw without prejudice until you have your membership behind you."
Several other councilors agreed with that assessment and Harpin recommended the board poll its member based on the other councilors' statements they would be in favor if members were. Matson said estimated two months to get feedback from the retirees. The council voted to postpone until that time.
Tags: retirees, retirement board, stipend,
