HomeMy WebLinkAboutRetirement Committee - Minutes - 05/11/2006City of Fort Collins
General Employees' Retirement Plan
GENERAL EMPLOYEES' RETIREMENT COMMITTEE
May 11, 2006 Meeting Minutes
TO BE CONSIDERED ON JUNE 8, 2006
COUNCIL LIAISON PRESENT: Councilman Ben Manvel
COMMITTEE MEMBERS PRESENT: Bill Switzer, Vice -Chair, 221-6713
Michele Hays -Johnson, 416-2158
Susan Lehman, 221-6813
Charles Seest, 221-6788
Dottie Nazarenus, 204-4429 (�_ O �
COMMITTEE MEMBERS ABSENT: Jim O'Neill, Chair, 221-6779 CC��
OTHERS PRESENT: Greg Tempel (City Attorney's Office)
Harold Hall & Rochelle Karus (Finance)
Debbie Weedman (Human Resources)
Joel Stewart (Actuary, Milliman)
CALL TO ORDER:
Bill Switzer called meeting to order at 1:20 p.m.
PUBLIC PARTICIPATION AND PLAN MEMBER COMMENTS: The Committee reserves this
place on the agenda to receive comments from Members of the Plan or the public. Bill
received a call from a member concerned that they were going to terminate GERP. He
reassured them that it is secure to date but the future is unknown.
APPROVAL OF MEETING MINUTES:
Rochelle distributed the draft April 13, 2006, minutes for review. Susan Lehman moved
to approve the minutes as corrected and Michele Hays -Johnson seconded the motion.
The motion carried unanimously 6 to 0.
PLAN PHILOSOPHY
There were no comments on Plan Philosophy.
MONTHLY INVESTMENT REPORT
Harold Hall distributed the final copy of the Actuarial Valuation from Milliman and the
monthly Investment Report for April, 2006. The total YTD return is 8.36%. The equity
is at 70% which is the maximum allocation that was set by the Committee in 1997. Greg
Tempel distributed a copy of the Investment Policy Statement to all of the members. The
implication for this is to move money out of the equities but will wait until May's
performance to make a decision.
Morning Star rating on one of the funds changed from last quarter; it decreased to a 2 star
rating. The fund is doing well but Harold will keep an eye on it since the rating is
decreasing.
215 North Mason Street • 2nd Floor • P.O. Box 580 • Fort Collins, CO 80522-0580 • (970) 221-6788 • FAX (970) 221-6782
General Employees' Retirement Committee
May 11, 2006, Meeting Minutes
Page 2
OTHER BUSINESS:
Chuck distributed a memo that was discussed at the April 28, 2006, Finance Council
Meeting. Pat Kahle from Milliman was invited to the meeting. She presented an
actuarial update on the GERP to the Finance Council Committee. They discussed the
options for addressing the projected shortfall for the Plan along with pros and cons for
each option. The six options are as follows:
1. Fund the Plan at an amount equal to the Annual Required Contribution
2. Fund the Plan with the phased in supplemental amount of $700,000
3. Change the funding method to an alternative that provides greater flexibility
4. Transfer the Active Members of GERP to the City's 401 (a) Money Purchase Plan
5. Reserves from other funds of the City ($10 million) could be loaned to the
pension fund (or invested according to the pension fund policy)
6. Other options including require active plan members to make contributions, freeze
the plan, etc.
A few copies of the PowerPoint that Pat presented to the Council Finance Committee
were distributed. It compared the GERP current funding method, aggregate cost method
to an alternative method, entry age method. Using the entry age method, any unfunded
liability could be amortized over a period as long as 30 years. Joel mentioned that the
entry age method is the most common for public systems. Joel will email the Power
Point presentation to the Committee so everyone will have a copy.
Bill Switzer had a question regarding the future liability for the plan. Is it shared between
retirees and active employees or is it resided solely on active employees? Joel will follow
up with Pat Kahle from Milliman. However, Chuck made the point that all Pension Plans
are based on the nexus of contributions coming from active employees and that retirees
are not expected to contribute post employment.
ADJOURNMENT:
Dottie moved that the meeting be adjourned and Susan seconded the motion. Motion
passed unanimously, 6-0, and the meeting adjourned at 2:45 p.m.
TOPICS FOR NEXT REGULARLY SCHEDULED MEETING:
The next meeting of the Committee will be held on June 8, 2006, beginning at 1:15 p.m.
at 215 N. Mason Street, Conference Room 2A on the second floor. The tentative agenda
includes:
Public Participation & Plan Member Comments
Approval of Minutes
Plan Philosophy
Other Business
GENERAL EMPLOYEES' RETIREMENT PLAN WEB PAGE: The Plan's web page can be
found at www.fegov.com/cityclerk/retirement.nhD. The Committee's 2004 Annual
Report, 2005 Work Plan, and monthly minutes are available at this site.
General Employees' Retirement Committee
May 11, 2006, Meeting Minutes
Page 3
2006 MEETING SCHEDULE:
The regular meeting time for the Committee is at 1:15 p.m. on the second Thursday of
each month. For the remainder of 2006, the Committee's meetings will be on:
June 8
July 13
August 10
September 14
October 12
November 9
December 14