Retirement Board Profile: Gloucester

MAY 2004
- Focus On Retirees Runs Deep - It is fair to say that the main focus of nearly all of the
Commonwealth's 106 retirement boards is bettering the lives of the
members of the retirement system, namely retirees. However, there are
some retirement boards, such as the City of Gloucester, which deserve
special recognition for their dedication to retirees.

As
one of the last true fishing communities on the East Coast,
Gloucester's working class roots continue to shine through. Made famous
by the Hollywood blockbuster "Perfect Storm", the city has a rich and
proud history.

Originally founded in
1623 by the British, fishing immediately became Gloucester's main
focus. Due to the naturally protected harbor and close proximity to the
Grand Banks, the port quickly grew to host the region's premier fishing
fleet.

Over the years, Gloucester's
rocky coastline and colorful history have attracted countless writers
and artists. Winslow Homer, T.S. Elliot, and Henry Wadsworth Longfellow
each were inspired by Gloucester's beauty and charm.

While
fishing has always been the main economic staple for the city,
Gloucester is now home to a variety of businesses. Ranging from textile
shops to electronics manufacturing, the city is home to a diverse
business community that makes Gloucester anything but a bedroom
community.

With a population of just
over 30,000 residents living within 26 square miles, Gloucester is in
the top one-fifth of the most populated communities in the state. The
city is governed by Mayor John Bell and a nine member council. It is
represented on Beacon Hill by Representative Tony Verga (D-Gloucester)
and Senator Bruce Tarr (R-Gloucester). Congressman John Tierney
represents the city in Washington.

Involved Board

The
one thing that makes the Gloucester Retirement Board stand out is how
active the board members are on behalf of retirees. Four of the
system's five board members are active or retired city employees. Each
member of the board, along with staff, are city residents.

Longtime
board Chairman Douglas MacArthur is an active firefighter. He was
reelected to an 8th term in 2002, serving a total of 25 years on the
board. MacArthur is very active within the community, both as a
firefighter advocate and working on behalf of retirees. He has been
retirement board chairman since 1991.

Serving
also as chairman of the Gloucester Insurance Advisory Committee (IAC),
MacArthur has played a critical role in how the city's health insurance
plans have been crafted and administered. He is known for his dogged
defense of retirees and active employees.

"I
look at my role on the retirement board and IAC as a chance to help the
retirees and employees in Gloucester. These days we are getting
squeezed from every angle and someone needs to be out there fighting
for what is right," said MacArthur. "We have a very good board here in
Gloucester. Everyone gets along and tries to do the best for the
members.

"Just taking care of the
little things like the COLA are a big deal to our retirees, many of
whom are living on very tight budgets. To me the retirement benefits
and health insurance go hand-in-hand. That is why it is important for
me to stay on top of both issues. Retirees must have a voice."

Serving
as the board's second elected member since 1996 is the Board's
Executive Director Linda Geary. First joining the Board in 1985 as the
assistant to then board director Janice Perry, Geary became the Board's
director in 1992.

Geary is respected
within the retirement community for her in-depth knowledge of Chapter
32 (retirement law). She also has the excellent reputation in
Gloucester city government for her commitment to serving the members of
the system. As a testament to hard work, Geary has twice been reelected
to the board.

The Board's ex officio
member is Joseph Pratt. Serving as the city auditor since 1985, he has
18 years worth of experience with the retirement system. Like most ex
officio board members around the state, Pratt is known to be
fair-minded and has a good understanding of the retirement law.

Representing
Mayor Bell is retired Police Lt. Ed Hardy. An Association member, Hardy
was appointed to the Board in 1998. What makes his appointment unusual
is that most mayors and town managers would not appoint a retiree of
the system to the board, instead opting for a member of their own
administration. The fact that the mayor has appointed Hardy speaks to
the city's commitment to the members of the system.

Rounding
out the Board is Cindy Brown, who was appointed by the first four
members as the Board's fifth member. As aregistered nurse who works in
the private sector, Brown meets the statutory requirement that the
board's fifth member not be a member of the retirement system.

Working
with Linda Geary, as the Board's assistant analyst, is Elaine
Tarantino. Tarantino, who like all Board members, lives in Gloucester,
began working for the board in 1992.

Markets Turn Around

After
three consecutive years of negative investment returns, in which
Gloucester went from being 62% fully funded to 47%, the financial
markets have finally turned around and are now producing positive
returns.

During calendar year 2003
(January-December), the $45 million Gloucester Retirement System
returned a positive 21.3%. At nearly 12.6% higher than the targeted
rate of return of 8.7%, 2003 proved to be a rebound year.

Gloucester's
investment strategy has remained consistent throughout the economic
downturn. As MacArthur puts it, "We simply picked good money managers
and rode out the storm. It made no sense to panic. We knew things would
turn around, it was just a matter of when."

The
investment companies managing pension funds for Gloucester retirees and
employees are as follows: Atlantic Asset Management, Freedom Capital,
IRT, Mellon, PIMCO, and Wellington. New England Pension Consultants is
the Board's consultant, advising Board members on the selection and
oversight of their managers.

Larry Stone, of Stone Consulting, is the system's actuary, while Thomas Gibson is the Board's legal counsel.

"Gloucester
is an example of a community that takes great pride in doing what is
right for people. This Board has always supported the COLA, and
Gloucester is known as a retiree friendly system," commented
Association President Ralph White.

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