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Essex Regional Replaces Segal Consultant Contracts

Due to impending contract expirations, the Essex Regional Retirement System (ERRS) decided earlier this week to bring in new external talent to assist with its investment and actuarial consulting duties.

On Friday, Charles Kostro, the plan’s executive director, disclosed the ERRS Board awarded Dahab Associates its investment consultant opportunity at the Oct. 29 meeting. He said three proposals had been received for the three-year contract.

Previously, in mid-September, the nearly $268.4 million plan issued its search for investment consulting services. In August, Kostro first disclosed the search release to IMMP, where he noted that the search was being pursued to deal with Segal Rogerscasey’s expiring contract.

Kostro noted in a Nov. 2 email that “the selection committee rated Dahab slightly higher than Segal Rogerscasey and their price proposals were identical.”

“The recommendation, therefore, was to award to Dahab pending a negotiation of the price,” Kostro stated.

The Executive Director highlighted that Dahab had submitted a yearly price of $39,500; negotiations are contingent on agreement of a final price, however.

“No contract will be signed until a final price is agreed upon,” Kostro said Friday.

Additionally, the Danvers, Mass.-based plan previously issued a new search for actuarial services earlier in the August. Kostro listed that the "actuarial RFP is being issued because the contract with our current actuary is expiring at the end of the year."

The Public Employee Retirement Administration Commission (PERAC) 2011 Annual Report listed that ERRS utilized The Segal Company in its past valuation, which was recorded in January 2011. At the time, the more than 3,600-member fund was roughly 51.9% funded and posted a .53% investment return for the year. 

Today, Kostro noted that Medfield, Mass.-based Stone Consulting, Inc. was picked for the three-year agreement, with two one-year options for extensions. The ERRS will pay about $39,750 per year, and commence its relationship on Jan.1, 2013.

 Mary Feldman, director of public affairs at The Segal Company, did not immediately respond to inquiries.

As of June 30, the ERRS had about 43.3% committed to domestic equity, 21.7% to fixed-income, 13.3% to real estate, and 21.5% to alternatives. The plan’s portfolio collectively beat out its policy benchmarks for the quarter, year-to-date and one-year period that ended in June, a report from the consultant stated.

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