PENSION COMMITTEE

SPECIAL MEETING

MAY 5, 2005

TOWN HALL 9:00 A.M.

CALL TO ORDER: The meeting was called to order by chairman Bill Kirkpatrick at 9:00 AM.

MEMBERS PRESENT: Bill Kirkpatrick, Chair; Members George Warner and Ham Wilson; also attending were Tom Forma of Merrill Lynch and Ed Sullivan, Town Treasurer.

APPROVAL OF MINUTES: The minutes of 1/29/05 special meeting were approved as amended and minutes of 11/4/04 were approved as amended.

FUNDED RATIO AND COMMUNICATION WITH MICHALSKI: Ed Sullivan spoke with Robert Michalski, Administrator of the Town Plan. No specific funded ratio level represents a problem to the town as long as Somers regularly meets it funding obligations. The auditors review the pension plan and to date have noted no problems. Regarding long-term prospects, the town might wish to consider changes such as changing the lump sum settlement option or the adoption of a defined contribution plan. Either of these options would be instituted with new hires. Bill will speak to David Pinney regarding the committee’s concerns.

INVESTMENT REVIEW: Tom Forma reviewed individually the Marsico, Levin, and Bond accounts in light of market conditions in both the stock and fixed income areas. Many specific issues were covered. The Fire Department Plan’s assets and investment performance were then reviewed.

INVESTMENT DECISIONS: For the Town Plan, since 55-60% of assts are now in equities, a motion was made, seconded, and unanimously passed to cease the monthly transfer of assets into the Marsico and Levin accounts. For the Fire Department Plan, since its target allocation has been reached, a motion was made, seconded, and unanimously passed to cease the quarterly transfer of assets into Vanguard’s S&P 500 Fund. A motion was also made, seconded, and unanimously passed to transfer all assets from Vanguard’s Short Term Bond Fund into its Money Market Fund.

ADJOURMENT: The meeting was adjourned at 10:30 A.M., following the comment that the next regular committee meeting is scheduled for August 4.

Respectfully submitted,

Hamline C. Wilson, Clerk