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HomeMy WebLinkAboutRetirement Committee - Minutes - 04/05/2001City of Fort Collins Generaonployees Retirement Plan • FORT COLLINS GENERAL EMPLOYEES' RETIREMENT COMMITTEE APRIL 5, 2001, MEETING MINUTES Approved May 3, 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 & Sue Wilcox (Finance) Greg Tempel (City Attorney's Office) PRESENT: Deb Weedman & Vincent Pascale (Human Resources) Nancy Wagner & Joel Stewart, Milliman & Robertson (actuary) CALL TO ORDER: Chair Susan Lehman called the meeting to order at 1:20 PM. ITEMS OF NOTE: Nancy Wagner introduced Joel Stewart, who has been working on the Personal Retirement Planning Statements and the Valuation Report. PLAN MEMBER COMMENTS: None. APPROVAL OF MINUTES: Alan Krcmarik distributed the March 1, 2001, draft meeting minutes. Terry Van Cleave moved approval of the minutes and Michele Hays -Johnson seconded the motion. The Committee approved unanimously (6-0). DISCUSSION TOPICS 1. DISCUSSION OF RETIREMENT PHILOSOPHY MAIN POINTS: The Committee did not have any items to discuss related to this topic. CONCLUSION AND NEXT STEPS: The Committee agreed to retain this item on the agenda. 2. DOMESTIC RELATIONS ORDER MAIN POINTS: Greg Tempel provided copies of a Domestic Relations Order for David Blakey, a current Plan member. Human Resources, Greg, and the actuary reviewed the Order and found it to comply with the format and process the Committee has approved. Human Resources advised the member and the alternate payee the Committee would be considering the Order at this meeting and invited them to the meeting, but they did not attend. Both parties had signed the agreement. Greg informed the Committee that staff and the actuary had discussed simplifying the administration of the Domestic Relations Order review process. He suggested the Committee further discuss the topic under "Other Business'. Filename: GminAPR2001R 300 LaPorte Avenue • P.O. Box 580 • Fort Collins, CO 80522-0580 • (970) 221-6788 • FAX (970) 221-6782 General Er ]]yees' Retirement Committee April 5, 2001, Meeting Minutes Page 2 of 4 CONCLUSION AND NEXT STEPS: Finding the Order complied with the review process and because both parties had agreed to the terms, Alan moved that the Committee approve the Order. Dottie Nazarenus seconded the motion. The Committee approved unanimously (6-0). The Committee added discussion of the process to "Other Business" on the agenda. 3. DISCUSSION OF PERSONAL RETIREMENT PLANNING STATEMENTS MAIN POINTS: Each year, the actuary prepares Personal Retirement Planning Statements for active members. The statements include projections of the Plan benefit, Social Security benefit, money purchase (401(a)) plans, and deferred compensation (457) plans. Nancy advised that the Statements are ready to print, but there was not enough time to print before today's meeting. CONCLUSION AND NEXT STEPS: Nancy will have the Statements printed and sent to the Finance Department. Staff will distribute them to the members via interoffice mail. (NOTE: This was completed on April 10, 2001.) 4. ACTUARIAL VALUATION REPORT PROGRESS MAIN POINTS: Nancy and Joel summarized the annual Valuation Report. The analysis used the Aggregate Cost Method, which the Committee has used in past years. She showed the actuarial assumptions for the report. She reviewed the highlights of the 2001 Valuation Report with graphs to illustrate different aspects of the report. The Committee discussed changes that the Committee can anticipate over time because new employees may not join the Plan. Nancy noted that as members live longer, payments from the Plan would extend longer. Contributions to the Plan will decrease as members leave City employment or retire. The report shows the Plan is in very good condition, with no unfunded liability, and a strong financial base. The actuary uses a five-year "smoothing" technique so 1999's greater -than -anticipated investment earnings and 2000's weak performance will be spread over five years. CONCLUSION AND NEXT STEPS: The Committee recommended that the contribution rate remain at 4.5%. Next year the Committee would like the actuary to add a section to the valuation report to assess the result of members leaving the Plan. Nancy and Joel will make some final changes to the Valuation Report, print it, and send copies to the Finance Department for distribution to the Committee. The Committee will review the report at the next meeting. 5. PLAN RESTATEMENT TASKS AND SCHEDULE MAIN POINTS: Greg reminded the Committee that restating the Plan is part of the 2001 Work Plan. Greg had previously prepared and distributed a draft of the revised Plan, which incorporated all the changes approved by City Council since the 1992 restatement. The first step is to hire a consultant to review the Plan document and make recommendations for changes. The required implementation date is January 1, 2002. CONCLUSION AND NEXT STEPS: Alan and Greg will prepare a simple Request for Proposals for the services of an attorney who specializes in retirement plans. The attorney's fee would be an expense of the Plan. Nancy will provide a checklist of plan provisions that may need updating. Greg committed to send out the request before the next meeting. The Committee can review the proposals at the next meeting. Genemployees' Retirement Committee April 5, 2001, Meeting Minutes Page 3 of 4 6. DISCUSSION OF ALTERNATIVE METHODS OF CALCULATING RETIREMENT BENEFIT (FULL-TIME - PART-TIME EQUITY ISSUE) MAIN POINTS: The Committee has been searching for a simple method to produce an equitable benefit for members who move from a full-time position to a part-time position or vice versa. Currently, a person who works part-time and then moves to a full-time position for five years would receive the same benefit as an employee who worked full-time for their full City employment. Based on a survey of all members, over 30% may have special circumstances that would require a detailed check of the paper records in their personnel files. The Committee discussed ways to accomplish this task. Bill Switzer moved that support staff research a sampling of six files of employees who had major shifts in their employment to estimate potential impact on the Plan and the individual benefit. Dottie Nazarenus seconded the motion, which was approved 5-1, with Michele Hays -Johnson voting no. CONCLUSION AND NEXT STEPS: Staff will have this information for the June meeting. 7. MARCH, 2001, INVESTMENT PREVIEW MAIN POINTS: Julie Depperman reported that during the March quarter, the NASDAQ index dropped 25% and Standard & Poor's index was down 12% last month as the stock market continued to decline. The equities in the portfolio echoed the stock market to a lesser degree, with domestic stocks dropping 10.5% and international funds dropping 15% for the quarter. The bond portion of the portfolio rose 6.29%, which helped bring the whole fund status to—3.92%. Julie and Alan attended an investment seminar given by ICMA-Retirement Corporation. Girard Miller, CEO of ICMA-Retirement Corporation, and John Tobey, the RC investment manager, discussed their views of the equity markets. They felt the stock market would continue to decline over the next 3-6 months before it would turn around. They felt that European investments were stronger than those in Japan. They felt that the reduction in interest rates will result in more homes being built and more purchases to furnish those homes, which will stimulate the economy. They also explained they use three fund managers for the Vantagepoint funds. This technique has produced returns that out -performed the benchmark for each group for most of the funds. CONCLUSION AND NEXT STEPS: Members may contact the Finance Department to obtain a copy of the monthly investment update. 8. OTHER BUSINESS A. ALTERATIONS TO THE DOMESTIC RELATIONS ORDER PROCESS MAIN POINTS: The Committee has approved two Domestic Relations Orders since adopting the review process. In reviewing the Order presented earlier in the meeting, the staff and actuary found the process and forms could be simplified. The alternate payee can only receive a benefit when the participant reaches age 55, even though the participant may have already left City employment and taken a single -sum distribution of the agreed -upon portion. The alternate payee is only eligible for a Straight Life or 120 month Certain and Life monthly retirement benefit. Greg suggested that a group should review the process and forms to identify needed changes. General E oyees' Retirement Committee April 5, 2001, Meeting Minutes Page 4 of 4 CONCLUSION AND NEXT STEPS: Julie, Deb, Nancy (via conference call), Alan, Greg, and Susan agreed to participate in the review and bring recommendations to the May meeting. Greg will draft some suggested changes for the group to review. B. COMMITTEE MEMBER TRAINING OPPORTUNITIES MAIN POINTS: Nancy provided a brochure on a pension conference. Deb also had flyers on other educational opportunities. In addition, Nancy said her firm is following federal legislation that could affect the portability of 457 and 401(a) plans. CONCLUSION AND NEXT STEPS: Staff will distribute copies of the conference flyer to the members. Nancy will bring other information about educational opportunities and legislative proposals Congress is considering. 9. SCHEDULE FOR NEXT REGULAR MEETING The next regular meeting will be May 3, 2001, at 1:15 PM in the Council Information Center (CIC) of City Hall. The tentative agenda includes: ♦ Citizen Participation and Plan Member Comments ♦ Consider approving the April 5, 2001, Minutes ♦ Discussion of Retirement Philosophy ♦ Review Valuation Report ♦ Report on Plan Restatement Activities ♦ Discussion of Modifications to Domestic Relations Order Process ♦ First Quarter, 2001 Investment Report and Monthly Investment Update ♦ Other Business ADJOURNMENT: Susan adjourned the meeting at 2:36 PM. GENERAL EMPLOYEES' RETIREMENT PLAN AND COMMITTEE WEB PAGE ADDRESS: Since the switch to FCGOV.com, our 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, City Hall. The next scheduled meeting will be Thursday, May 3, 2001, at 1:15 PM. The Committee has scheduled meetings for 2001 as shown below: 2001 CALENDAR .. ----------- THURSDAY, APRIL G O001 THURSDAY, MAY 3, 2001 THURSDAY, JUNE 7, 2001 THURSDAY, JULY 12, 2001 THURSDAY, AUGUST 2, 2001 THURSDAY, SEPTEMBER 6, 2001 THURSDAY, OCTOBER 4, 2001 THURSDAY, NOVEMBER 1, 2001 THURSDAY, DECEMBER 6, 2001