HomeMy WebLinkAboutRetirement Committee - Minutes - 06/05/2003City of Fort Collins
Genera, .:mployees Retirement Plan
GENERAL EMPLOYEES' RETIREMENT COMMITTEE
June 5, 2003, MEETING MINUTES
COUNCIL LIAISON: Mayor Ray Martinez
COMMITTEE Susan Lehman, Chair, 221-6813
MEMBERS Jim O'Neill, 221-6779
PRESENT: Bill Switzer, Vice Chair, 221-6713
MEMBERS Michele Hays -Johnson, 416-2158
ABSENT:
Approved July 10, 2003
Dottie Nazarenus, 204-4429
Alan Krcmarik, 221-6788
OTHERS Julie Depperman & Ann Wardle (Finance)
PRESENT: Pat Kahle (Actuary, Milliman USA)
Debbie Weedman & Vincent Pascale (Human Resources)
CALL TO ORDER: Susan Lehman called the meeting to order at 1:23 p.m. Five
members of the Committee were present, constituting a quorum.
PLAN MEMBER COMMENTS: The Committee reserves this place on the agenda to
receive comments from Members of the Plan or the public. There were no Plan
Member comments.
APPROVAL OF MINUTES: Minutes of the May 1, 2003, meeting were distributed.
Jim O'Neill moved the minutes be adopted, and Dottie Nazarenus seconded the
motion. The Committee approved the minutes unanimously (5-0).
DISCUSSION TOPICS
1. Plan Philosophy: There were no comments on the Plan Philosophy.
2. Status on Proposed Part -Time Plan Change: Alan Krcmarik reported that the
proposed Plan change is scheduled to be on the City Council's consent agenda for June
17, 2003. A special meeting of this Committee will be posted. Susan is not certain
she will be able to attend; Bill Switzer agreed to attend as Vice Chair. Alan also will
attend. The Committee agreed that extensive outreach was done, no major
objections were received, and that the Committee has attempted to keep people
informed throughout the consideration process. If the Council approves the Plan
change, Julie Depperman will work with the Information Technology department to
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^ General E�''oyees' Retirement Committee
June 5, 2003, Meeting Minutes
Page 2 of 3
change the access database used for calculating retirement benefits for Plan Members.
Julie will also provide Milliman USA with the new benefit figures. The driving force
behind this change has always been a matter of equity, as those who worked part-
time were receiving credit for full-time service.
3. Monthly Investment Update: Julie distributed a handout depicting the Plan's
investment portfolio as of May 31, 2003. For the year-to-date, the total portfolio is up
5.03%, with a market value of $30.3 million. Julie mentioned that the stock market
has improved which has helped the mutual fund portion of the portfolio, but that the
low market interest rates are making it difficult to find fixed income securities with
decent yields.
4. Other Business: At the last Committee meeting, a Committee member
suggested a piece of City real estate that was for sale might be a valuable addition to
the Plan's investment portfolio. Alan reported that Julie and he did some research on
the property for sale at Prospect and I-25 and based on the Plan's investment policy,
it would not meet the standards of diversification. Susan said that one mitigating
factor of developing that corner is that the I-25 interchange could be very expensive.
Alan said the parcel was about 25 acres. The site will require a new overpass, exit
ramp, and entrance ramp, which might reduce the land area in addition to driving up
the development costs. The Committee agreed that the land purchase would not be
pursued any further.
Pat Kahle provided handouts and gave a presentation of a sample projection model.
She explained that Milliman USA's projection models look at assets and liabilities and
see how the two interplay. She demonstrated the flexibility of the model by changing
various key assumptions and depicting the results in graph form. Variables which can
be changed include rate of return, rate of inflation, contribution rates, payroll
assumptions, etc. If the Committee chose to purchase such a model, they would
agree on baseline assumptions then shock the assumptions and compare the results
to the baseline.
Pat said she would want to make the model very flexible if the Committee decided to
have one made so that it can be adjusted for future Plan and assumption changes.
She would use the clean data from the recent valuation report and update it when the
data for the next report becomes available. She said it would cost between $3,000
and $5,000 to build a model for the Committee. Pat will check into whether this
model is something that the Plan would own and be able to operate in-house or if it is
something Milliman USA would keep and run based on Committee requests. She
demonstrated both deterministic and stochastic models. The stochastic model runs
information many times with random variables and gives a median as well as a range
of possible outcomes.
Pat will email a list of variables she suggests be modeled, approximate costs, and
whether or not the model could be retained in-house. Pat said the model would be
tailor made for this Plan and that there are possibly some financial reporting
(Government Accounting Standards Board statements) issues to look at. The
Committee agreed to defer the determination of what would be wanted in the model
Filename: GMIN 2003 6June05 Final
General Er ogees' Retirement Committee
June 5, 2003, Meeting Minutes
Page 3 of 3
to Alan and Julie. Pat will send information prior to the next meeting and will also
provide a time estimate of how quickly this would be available.
Adjournment: With no further business, the Committee adjourned at 2:53 p.m.
TOPICS FOR NEXT REGULAR MEETING
The next regular meeting of the Committee will be on July 10, 2003, at 1:30 p.m. in
the Council Information Center of City Hall. There will be a 15-minute variance from
the normal meeting time of 1:15. The tentative agenda includes:
Plan Member Comments
Approval of Minutes
Plan Philosophy
Status on Proposed Part -Time Plan Change
Asset/Liability Modeling
Quarterly Investment Update
Other Business
GENERAL EMPLOYEES' RETIREMENT PLAN WEB PAGE: The General Employees'
Retirement Plan web page can be found at www.fcgov.com/cityclerk/retirement.php.
The Committee's 2002 Annual Report, 2003 Work Plan, and monthly minutes are
available at this site.
2003 Meeting Schedule:
The regular meeting time for the Committee is at 1:15 p.m. on the first Thursday of
each month. The regular location is the Council Information Center at City Hall. For
2003, the Committee has scheduled the meetings as shown below:
July 10 October 2
August 7 November 6
September 4 December 4
Filename: GMIN 2003 6June05 Final