RBOA (Retirement Board of Authority) Report

summarized by Ron Levesque

At the Membership Meeting of December 7, 2023 Patrick Butler gave an update on behalf of Jessica Breheny and David Yancey, who serve with him on RBOA. Patrick has been seeking to fully understand how the funds that this board oversees are accounted for. There has been no clear full accounting for a fund created in 2008 through the sale of bonds to support the retirement medical benefits guaranteed to faculty hired before September 1983. These benefits are also extended to classified staff and managers and administrators. Earlier this year, Patrick filed a “public records request” asking the District for detailed information about the compensation of RBOA managers, payments for medical care and supplements to Medicare, and more.

Patrick learned that the fund managers are a team of three groups, Keenan Associates, Morgan Stanley, and Futuris. These “employees” of the fund are paid an estimate of about $15,800 monthly, $6800 to Keenan, $4000 to Morgan Stanley, and $5000 to Futuris. Also, $1,800,000 yearly flows to the District Office from this fund. Where does it all go? At the RBOA meeting on October 18, in response to Patrick’s request, the managers revealed that $119 a month is the cost to process the fund. Yet, Patrick had obtained and studied actuarial records for 2022-2023 and found quotes of $256,183 for “Service Cost”. And “Trust Administrative Expenses” were listed as $232,202, not including about $200,000 in compensation for the managerial team. No one in attendance could explain these costs. After the meeting, the Vice Chancellor approached Patrick and suggested a meeting with him and the auditor. Patrick agreed but asked to be accompanied by the AFT and suggested RBOA Vice President Jessica Breheny. Then others wanted the fund managers to be included, and then the vice chancellor left for a four-week vacation. So no follow-up meeting has yet been scheduled.

And Patrick and Jessica have tried to meet with the broker who handles all health benefits for retirees hired before September 1983, but their outreach has been ignored. Patrick wants to know why this group of retirees has to pay so much more. For example, in comparison, medical coverage for current teachers costs the district $1800 a month for full benefits. Yet for this pre-1983-hired retiree group, the district pays $830 a month as a supplement to Medicare, while a retired person close to Patrick has the AARP supplement for $250 a month for similar benefits to Patrick’s. Patrick sees a “reluctance to respond” by the District Office. He is considering making another Public Records Request, and vows that in time he will get the answers he seeks. He wants to activate the “authority” component of Retirement Board of Authority. This board must have clear working knowledge of the funding they are providing to better inform the Board of Trustees about actions the trustees approve.

In conclusion, Patrick has come to believe that the fund managing team has little incentive to spend the funds if their compensation is increased when their fund balance, now over $10, 000,000, remains as great as possible.

Patrick hopes that the recently newly elected trustee will help the Board to direct the RBOA retirees to be compensated for their loss in benefits over the past 40 years.

Patrick thanked the AFT 6157R Board for its financial support for a legal review in 2022, which completely supported the role of the RBOA to make recommendations to the Board of Trustees. Patrick said this action raised the importance of the issue and led to serious discussion about the neglected status of this group of retirees. He is optimistic about a positive resolution in 2024.