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HomeMy WebLinkAbout2003 - Retirement Committee - Annual ReportCity of Fort Collins General Employees' Retirement Committee General Employees' Retirement Committee 2003 Annual Report The General Employees' Retirement Plan (GERP) is managed and administered by the General Employees' Retirement Committee (GERC) in accordance with the terms of the Plan. The 2003 actuarial report, prepared by Milliman USA (formerly Milliman & Robertson Actuaries & Consultants) indicates that as of January 1, 2003, the GERP had 362 active members, 116 terminated vested members, and 123 retired members for a total of 601 members, as compared to 613 in 2002. One way to look at the adequacy of plan funding is to compare the value of benefits under the plan terms to the value of plan assets as of the valuation date (January 1, 2003). By this measure, the Plan is fairly well funded, since the actuarial value of the Plan's assets covers 81.6% of the present value of future benefits, and the market value of plan assets covers 68.0% of the present value of future benefits. The Present Value of Future Benefits is $42,783,608 and the Market Value of Assets is $29,082,465. The Present Value of Future Benefits includes benefits earned to date plus the value of benefits anticipated to be earned for all expected future service by current participants. The market value of Plan assets exceeds the present value of accumulated Plan benefits by 3%, as of January 1, 2003. Due to three years of bear market conditions, the Plan is under funded and additional contributions to the Plan have been requested. The Committee is working with the Actuary to determine the best course of action. In 2003, the Committee was composed of Susan Lehman, Chair, Advance Planning; Bill Switzer, Vice -chair, Utilities, Financial Operations; Michele Hays -Johnson, Utilities, Water Production; Jim O'Neill, Purchasing Director; Dottie Nazarenus, a retired Plan Member; and Alan Krcmarik, Financial Officer. Staff support for the Committee included Ann Wardle, Secretary; Debbie Weedman and Vincent Pascale, Human Resources; Greg Tempel, Assistant City Attorney; and Julie Depperman, Finance as staff support for investments. Committee Highlights for 2003: Personal Retirement Planning Statements (PRPS) The GERC had the PRPS prepared by the actuary, Milliman USA, and distributed them to individual Members. Plan Amendment In 2003 there was one Resolution adopting the Third Amendment to the City of Fort Collins General Employees' Retirement Plan as Amended and Restated Effective December 31, 2001; amending the Plan to more equitably match the retirement benefit to actual service and the contributions made to the Plan. The Committee recommended Resolution 2003-078, which was adopted by City Council on June 17, 2003. Credit for Part Time/Full Time Service The Committee, with assistance from its actuary, Milliman USA, and internal and external legal counsel, has studied this problem for the last four years. The Committee developed a Plan change that more equitably matches the retirement benefit to actual service and the contributions made into the Plan. Retirement Philosophy The Committee continues discussions with the actuary, Milliman USA and has not determined what changes may be necessary in this philosophy considering the state of investment returns. Investment Results The total market value of cash and investments for the Plan as of December 31, 2003, was $33,778,454. During 2003, the market value of assets increased by $4.7 million or 16.15%.