Retirement Board Criticize Selectmen for Not Reappointing Member
Selectmen select pension reform expert; Board says they are losing investment pro.
For the second time in two months, the removal of a member of a prominent town committee by the Board of Selectmen is being questioned.
At its Monday, Aug. 15, meeting, the Selectmen appointed Jim Sloman of Tradewins Capital to replace Peter Palandjian on the town's Retirement Board.
While appointing and replacing members of the myriad of unelected town boards and committees is part of the Board's purview – in fact, the Selectmen made appointments to several groups Monday – Palandjian's non-reappointment came as a surprise to his colleagues.
"Why the Board of Selectman failed to reappoint (Palandjian) to the Retirement Board is a complete mystery, and a considerable loss to citizens of Belmont and the members of the retirement system," said Roy Sacco, chairman of the Belmont Retirement Board.
But according to the Selectmen, they and the Warrant Committee – which advised the board on selecting Sloman as Palandjian's replacement – choose to bring into the four-member board a person with pension reform experience.
"We recognize that the Retirement Board does not agree with the Selectmen on the need for reform," said Ralph Jones, chairman of the Board of Selectmen.
It is the second time that a Board's selection has been criticized. On June 8, the board replaced two well-known Planning Board members, Jennifer Fallon and Karl Haglund, a move that was criticized by several members of the public.
While Fallon and Haglund decided not to express their opinion of the move, Sacco is voicing the board complaint to the public.
For the Retirement Board – which invests funds of the town's retirement system and administers the benefits – losing Palandjian breaks up a strong financial team that has shown stellar monetary returns on the investments under its control.
Sacco said that while the state’s Pension Reserves Investment Trust Fund (PRIT) posted an annual investment return of 22.5 percent as of June 30, Belmont's Retirement System return on investment was 22.9 percent.
Over ten years, Belmont return of 7.5 percent trumps the PRIT's 6.6 percent.
And Palandjian's advice will be sorely missed in the coming months as “the remainder of the calendar year will be challenging ... as the markets continue to be volatile in response to the economy and the unsettled situation in Washington," said Sacco.
A Need for Pension Reform
But for the Selectmen, the need for change reflects the board's and others commitment to pension reform.
While thanking Palandjian – a lifelong Belmont resident and President of Intercontinental Real Estate Corporation – for eight years of service, Sloman's appointment "should not be a 'mystery'," said Jones.
Pension reform is an issue of widespread concern in Belmont, said Jones, as retirement and retiree health care costs consume an increasing share of the town’s revenues and fewer resources to provide services.
" ... Sloman has served as a member of an informal working group organized by State Rep. Will Brownsberger to develop a proposal for pension reform," that was voted as the winning entry in the Pioneer Institute’s Better Government Competition in 2011, said Jones.
And it was not just the Board of Selectmen who wanted to see a change on the Retirement Board.
"The Warrant Committee, whose Chair(woman Elizabeth Allison) endorsed the selection of Mr. Sloman," said Jones.
"We believe that there should be a voice for reform on the Retirement Board, and the Selectmen’s appointment reflects that belief," said Jones, speaking for Allison.
Yet Sacco noted that "[w]hile pension reform is a topic of worthy discussion, this is an issue for the Legislature, not the (town's) retirement board."
Sacco noted that pension reform is simply not an issue for his board since no retirement board in the state has any role in deciding what the law is.
"The 'mystery' is not in the appointment of Mr. Sloman but rather the lack of reappointment of Palandjian, who served the retirement board with distinction and played a significant role in the investment process," he said.
"As the saying goes, 'if it ain't broke, don't fix it'," said Sacco.