VLCT Employment Resource and Benefits (VERB) Trust, Inc.
Board of Directors Meeting
October 21, 2021
Directors present: Bill Shepeluk, Charles Safford, Kathleen Ramsay, Carrie Johnson and Todd Odit
VLCT staff present: Joe Damiata, Jeremiah Breer and Kelley Avery
Others present: John Hanna (Liscord, Ward & Roy, Inc.)
The meeting was called to order at 10:01 a.m.
Upon motion (Johnson/Safford), duly adopted, the board voted unanimously to approve the agenda.
Upon motion (Safford/Ramsay), duly adopted, the board voted unanimously to approve the minutes of the September 3, 2021 meeting.
Joe Damiata provided a brief organizational update to the board. Overall, VLCT’s Town Fair was a great success. Both the hybrid annual meetings and the virtual sessions the following week were very well attended. Staff is starting to receive good feedback from the members. Mr. Damiata also noted Executive Director Ted Brady plans to visit at least two selectboards each month to increase member outreach.
Kelley Avery provided an update to the board regarding unemployment. Although September figures have not yet been reported, the third quarter is trending to be the lowest cost quarter of the year with substantially reduced claims, even with federal reimbursement ending as of the September 1st. Ms. Avery also noted a UI Study Committee has started monthly meetings in the legislature to discuss potential unemployment provisional changes such as changes to the UI tax structure, increasing unemployment benefits, employer liability for charges, state UI Trust Fund solvency, waiver of penalty weeks and their work includes drafting language on a potential bill to bring to the legislature for the next session. The committee is charged with presenting a report to select House and Senate committees by mid-December with their recommendations, and they will meet again next month. Staff is following the developments under this committee closely and will update the board at its December meeting.
Upon motion (Johnson/Ramsay), duly adopted, the board voted unanimously to accept the staff reports.
President Shepeluk presented the Report of the Joint Investment Committee. The committee met September 3rd, the same date of the last VERB Board meeting. The committee reviewed portfolio investment returns for the first half of the year and also discussed the outlook for national and global markets. Ted Brady also discussed his proposal with the committee to consider including Vermont-based investment options in the Trust portfolio, and Ted and staff will be presenting additional information regarding this proposal at a future committee meeting.
Upon motion (Ramsay/Johnson), duly adopted, the board voted unanimously to accept the Report of the Joint Investment Committee.
Joe Damiata briefly reviewed the VERB Draft Budget for 2022. Overall, the budget is relatively flat compared to costs for 2021. General and administrative costs are up slightly, about 1%, while revenues are also projected down about 1% due to anticipated member contribution decreases. No significant changes are anticipated between now and December when the final budget will be presented for approval.
John Hanna of Liscord, Ward & Roy presented the Actuarial Analysis Proposed Funding and Rating Plans Effective 1/1/2022. Due to the unprecedented increase in claims costs experienced in 2020 with the pandemic, and also due to the state’s decision to eliminate 2020 claims experience from its UI tax rate calculation, 2020 claims have been excluded from this analysis, as approved by the board at its last meeting. Based on continued uncertainty due to the pandemic and discontinued funding from the federal government to assist reimbursers, Mr. Hanna recommends an average rate decrease of 4.2% at the 90% confidence level. Mr. Hanna further recommends the Trust continue to retain all available net position in the event of a future downturn with the pandemic. VLCT staff and the board agreed to this recommendation.
Upon motion (Safford/Ramsay), duly adopted, the board voted unanimously to accept the Actuarial Analysis Proposed Funding and Rating Plan Effective 1/1/2022 as presented.
Upon motion (Safford/Ramsay), duly adopted, the board voted unanimously to approve the proposed 2022 rates at an overall average decrease of 4.2% at the 90% confidence level as presented.
Upon motion (Safford/Ramsay), duly adopted, the board voted unanimously to approve returning no contribution credits to members for the 2022 renewal.
The board and staff briefly discussed board membership. Joel Cope is not running for another term, and when his term expires at year-end, the board will have six directors with one open alternate position. Current bylaws stipulate the board must have between five and nine members, but since the board is now solely focused on unemployment, fewer directors may be needed. The original UI Trust board size was six directors. The board agreed the number may be changed to four to six rather than five to nine. Staff will research non-profit statutes to ensure there are no minimum board size requirements. Since bylaw changes will need to go before the membership next year with a potential Trust name change, it makes sense to make this adjustment at the same time.
In other business, Joe Damiata noted the PACIF Board has elected not to meet with the auditors in person at their upcoming meeting to discuss pre-planning for next year’s audit. Instead, the auditors will email this information to the PACIF Board. Mr. Damiata asked the board if they would like to proceed the same way for VERB’s audit pre-planning, and they agreed this would be preferable.
Upon motion (Johnson/Safford), duly adopted, the board voted unanimously to adjourn the meeting (10:59 a.m.).