Pension 'Custodian' Picked; 'Consultant' Pending

At its meeting on August 15, the Johnston Retirement Board directed Town Solicitor William Conley to draft a contract with for so-called custodial services for the town's $42 million pension funds.

The committee also heard two presentations by firms seeking to serve as investment consultants.

Board Chairman Joseph DiCarlo explained the difference between the roles that TD Bank and the as-yet undecided investment consultant would serve.

"The custodian will hold all the funds, and the consultant will recommend where the funds should be disbursed," DiCarlo said during an interview prior to the meeting. "The consultant would manage it day-to-day [and] make sure they have a short-term plan for people who may be retiring and need that money."

Immediately following the presentation by TD Bank representatives, board members took no action. Just prior to adjournment at 8 p.m., they voted 5-0 to authorize Conley to negotiate a contract that he would then bring back to the board for approval at its next scheduled meeting on August 30.

DiCarlo said he felt TD Bank made a strong presentation.

"First and foremost, they came with five representatives," DiCarlo explained. "That told me that they were really serious, and that they wanted this contract."

The board chairman — by Mayor Joseph Polisena to the first-ever retirement board for the town — also noted the offer made by Caren Chabora, TD Bank's vice president of Private Client Services, to lower the bank's annual fee from $55,000 to $50,000 to serve as custodian.

"They came across very well, you can tell they put their homework in — I think they did a great job selling their capital as well as involvement in the local community," DiCarlo said. "This board was set up specifically for Johnston and the pensions [here], and to have a branch in Johnston and — from listening to them — doing well, it seems to me that TD Bank wants to bring business into Rhode Island and specifically into Johnston."

Also during their presentation, TD Bank representatives said they would be willing to bid on future Requests for Proposals (RFPs) for consultant services, or help the board draft the outlines for RFPs that other firms would pursue.

DiCarlo said that at this point, in the early stages of the retirement board's work, having two firms working on the pension issue seems to be the best arrangement.

"I think right now — and I don't know how this is going to play out — having two different enterprises will probably be in our best interest," DiCarlo explained. "What the board wants, ultimately, is the best thing for the taxpayer and for the pension system."

Representatives of Dahab Associates and Segal Advisors also appeared before the board on their bids to serve as investment consultants for the town.

Two more interviews are scheduled the board's next meeting, scheduled for August 30 at 6 p.m.