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HomeMy WebLinkAboutRetirement Committee - Minutes - 10/11/2001Citv of Fort Collins AdmiWative Services - Finance Administration GENERAL EMPLOYEES' RETIREMENT COMMITTEE OCTOBER 11, 2001, MEETING MINUTES Approved November 1, 2001 COUNCIL LIAISON: Mayor Ray Martinez COMMITTEE Terry Van Cleave, 221-6321 Susan Lehman, 221-6813 MEMBERS Michele Hays -Johnson, 416-2158 Dottie Nazarenus, 204-4429 PRESENT: Bill Switzer, 221-6713 Alan Krcmarik, 221-6788 OTHERS Julie Depperman (Finance) Greg Tempel (City Attorney's Office) PRESENT: Debbie Weedman (Human Resources) Nancy Wagner (Actuary, Milliman USA) CALL TO ORDER: Chair Susan Lehman called the meeting to order at 1:17 p.m. PLAN MEMBER COMMENTS: No comments at this meeting. APPROVAL OF MINUTES: Alan Krcmarik distributed the September 6, 2001, meeting minutes. Terry Van Cleave moved to approve the minutes, Susan seconded the motion, The Committee approved the minutes unanimously, 6-0. DISCUSSION TOPICS 1. Plan Restatement: The Committee is in the process of updating the Plan to comply with federal laws and regulations. Stephen (Steve) Weinstein (Special Legal Counsel) provided an updated draft of the Plan based on the discussion and comments received at the last meeting. The Committee reviewed the changes to the Plan page by page. Many of the comments and edits were minor and those are not included in the discussion below. The items below include only those topics that the Committee discussed in depth. Article Il, definition I.: The Committee added all of the previous restatements of the Plan under the definition of "Effective Date of this Plan." Article II, definition w.: The Committee decided to strike subsection (2) which prohibited a one- year Break in Service at the time a member entered Qualified Military Service. Under this section, federal regulations provide guidance to all qualified plans. Greg Tempel is to review this section with Steve. Article II, definition x: The Committee and staff discussed the significance of the April 1 reference. This is part of the federal law. Nancy Wagner provided some additional background as to what the federal government was trying to do with this wording. The legal counsel and actuary will review recent legislation to determine if the Plan still needs to have this section. Filename: GMINOct2001F 215 North Mason Street • 2nd Floor • P.O. Box 580 • Fort Collins, CO 80522-0580 • (970) 221-6788 • FAX (970) 221-6782 General Emplovees' Retirement Committee Octol 11, 2001, Meeting Minutes Page 2 Article VI, Credited Service: Greg presented a revised Section 2 of Article VI, relating to Breaks in Service. He had discussed the new section with Tom Rogers before the meeting. The purpose is to make it clear that once a Member has left the Plan, re-entry into the Plan is not allowed. Nancy suggested some wording to the section to prevent Members that have already lost credited service from getting the service reinstated. Article VI I, Section 3: The Committee and staff discussed this section as the wording did not seem to be clear. Tom Rodgers was to re -draft this section. Article VIII, Section 4: The Committee and staff reviewed the timing of benefits to be paid under the Plan. Monthly benefit payments begin the month after the Member elects this option. The Committee and staff also would like to be able to make single sum payments to Terminated Member if the value of the Accrued Benefit is not over $5,000. The Committee decided it would like more information from the Special Legal Counsel prior to making this a requirement. Article X, Section 1: Nancy questioned the wording of the last part of the section. She thought it would be sufficient to refer to Section 401(a)(9) of the Internal Revenue Code. This section regulates the amount of benefit that may be paid to beneficiaries. It covers situations when the beneficiary is much younger than the Member. The Committee will check with the Special Legal Counsel on this item. Next Steps: Weinstein and Rodgers are to provide the next draft of the restated Plan in time for the Committee to read and review prior to a special Committee meeting. The Committee discussed possible meeting times. Alan moved to schedule the special meeting on Friday, October 19, 2001, at 9:00 a.m. Susan seconded the motion. The Committee approved the motion unanimously. The meeting will be held in the conference rooms on the second floor of the office building at 215 N. Mason Street. 2. Possible Change in Calculating Retirement Benefit. At its September meeting, the Committee decided to ask the Special Legal Counsel for advice on the proposed change in the method of calculating benefits to solve the part-time/full-time equity issue. Mr. Weinstein's analysis indicates that the Plan is not subject to the anti -cutback provisions of the Internal Revenue Code or the Employee Retirement Income Security Act. This means that the proposed changes would not cause the Plan to become a non -qualified plan. Greg drafted two amendments to the Plan. The first amendment would implement the proposed changes to the method of calculating the pension benefit. Nancy suggested that the Special Legal Counsel make a specific review of the provisions of the Economic Growth and Tax Relief Reconciliation Act relating to reducing future accruals of benefits and notice requirements. The Committee suggested that Nancy call Weinstein on this matter. Based on the Committee's discussion, Greg will make revisions to the Plan Amendment. The second amendment that Greg drafted would allow the roll over of pension benefits to a 457 deferred compensation plan. 2. Retirement Philosophy: The Committee reserves time on each agenda to consider the philosophy of the retirement Plan. Due to the extensive review of the restated Plan, the Committee did not discuss retirement philosophy at this meeting. 0 General Employees' Retirement Committee ber 11, 2001, Meeting Minutes Page 3 3. Monthly Investment Update: The assets of the Plan are managed by the City's financial officer. Each quarter the Committee receives an update of the investment activity for the quarter and the year to date. Julie Depperman distributed the quarterly investment report. In the third quarter, the markets were especially weak. The domestic mutual funds lost 13.8% of their value; the year-to-date decline was 17.6%. The international mutual fund declined 19.1 % during the third quarter and year-to-date was 31.1 %. The yield on the fixed income component of the portfolio was 5.76% for the third quarter and 6.06% for the year-to-date. To take advantage of the lower stock prices, staff invested $600,000 in three new mutual funds. This will help accomplish the target allocation. 4. Actuary Performance: Each year, the Committee performs a review of the services provided by the Actuary. The Committee decided to carry this item over to the special meeting scheduled for October 19 at 9 a.m. 5. Other Business: If the Committee members have other topics to discuss, they do so under other business. At this meeting, there were no other business items to discuss. ADJOURNMENT The Committee adjourned at 3:58 p.m. SCHEDULE FOR NEXT REGULAR MEETING The next regular meeting of the Committee will be November 1, 2001, at 1:15 p.m. in the Council Information Center of City Hall. The tentative agenda includes: Plan Member Comments Approval of the October Meeting Minutes Retirement Philosophy Plan Restatement Possible Change in Calculating Retirement Benefit Monthly Investment Update Other Business GENERAL EMPLOYEES' RETIREMENT PLAN WEB PAGE: The web page is "under construction." FUTURE 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 in City Hall. For 2001, the Committee has scheduled the meetings as shown below. General Emplovees' Retirement Committee Octo 11, 2001, Meeting Minutes Page 4 THURSDAY, November 1, 2001 THURSDAY, December 6, 2001