HomeMy WebLinkAboutRetirement Committee - Minutes - 01/11/2001City of Fort Collins
Generawployees Retirement Plan 0.
FORT COLLINS GENERAL EMPLOYEES' RETIREMENT COMMITTEE
JANUARY 11, 2001, MEETING MINUTES
Approved on February 1, 2001
COUNCIL LIAISON: Mayor Ray Martinez
COMMITTEE MEMBERS
PRESENT: Terry Van Cleave, 2210-6321 ABSENT: Susan Lehman, 221-6813
Bill Switzer, 221-6713 Michele Hays -Johnson, 416-2158
Dottie Nazarenus, 204-4429
Alan Krcmarik, 221-6788
OTHERS PRESENT: Nancy Wagner, Milliman & Robertson (the Plan's actuary)
Julie Depperman (Finance) Sue Wilcox (Finance)
Vincent Pascale (Human Resources) Greg Tempel (Legal)
Deb Weedman (Human Resources)
CALL TO ORDER: Terry Van Cleave, Committee Vice -chair, called the meeting (rescheduled
from January 4) to order at 1:50 PM.
ITEMS OF NOTE: None.
PLAN MEMBER COMMENTS: None.
APPROVAL OF MINUTES: Alan Krcmarik distributed the December 7, 2000, draft meeting
minutes. Deb Weedman suggested a minor change in the wording of Item 6-C. Alan moved the
minutes be approved as revised and Dottie Nazarenus seconded the motion. The Committee
approved the minutes unanimously (4-0).
DISCUSSION TOPICS:
1. 2000 ANNUAL REPORT
MAIN POINTS: Before the meeting, Susan Lehman provided a draft of the Annual Report to Alan.
Alan made revisions and forwarded the revised draft to the members for comments. Terry noted
that Mayor Martinez, the City Council liaison, had commented favorably on the report. Terry asked
the Committee if there were any additional comments. There were none.
CONCLUSION AND NEXT STEPS: Alan moved approval of the 2000 Annual Report as submitted
and Bill Switzer seconded the motion. The Committee approved the motion unanimously (4-0).
Alan will deliver the report to the City Clerk's Office before the January 31 deadline. The
Committee will also send the report to Plan members.
GMINJAN2001R.doe
NO LaPorte Avenue • P.O. Box 580 • Fort Collins, CO 80322-0580 • (970) 221-6788 • FAX (970) 221-6782
GERC Meeting Minutes
January 11, 2001
Page 2 of 4
2. DISCUSSION OF RETIREMENT PHILOSOPHY
MAIN POINTS: None.
CONCLUSION AND NEXT STEPS: The Committee consensus was to defer discussion to a future
meeting.
3. COMPARISON OF ACTUARIAL VALUATION METHODS
MAIN POINTS: Nancy Wagner, actuary from Milliman & Robertson (Milliman), gave a Powerpoint
presentation comparing the Aggregate Cost Method currently used by the Plan with the Entry Age -
Normal method, which Milliman suggested the Committee consider. Both are methods of valuing
the assets and liabilities of the Plan.
Nancy indicated the current method would spread the costs over the future salaries of the current
members. With the Plan closed, the salaries and contributions will drop off as members retire or
leave the Plan. Contributions will not be as high as if the Plan continued to add new, younger
members. Nancy's charts showed the value of invested assets increasing until 2016. At that time,
it is anticipated that more members will begin retiring as they reach age 55 (when first eligible for
Plan benefits) and at age 62 (when participants are eligible for Social Security benefits).
Nancy distributed a report containing "Projections of Assets, Liabilities and Costs" using varying
rates of return scenarios. After adjusting the model to include the Plan's current contribution rate of
4.5%, there was not a large variance between the two methods.
Discussion moved to the information Nancy needs to prepare the 1-1-2001 valuation report. Deb
has sent her the payroll data for the year ending December 31, 2000, and when the January 26
payroll is complete, Deb will send her the data on the new pay levels. Julie Depperman is working
on the required investment information. Staff will provide information on the deferred vested
members and membership activity during the year. Nancy hopes to present some preliminary
figures at the March meeting.
CONCLUSION AND NEXT STEPS: Alan noted that both the current and the proposed cost
methods appear to produce very similar results. He also pointed out that over the past couple of
years, there have been a number of significant changes in the Plan. These changes include the
actuarial consultants, a very volatile stock market, the conversion of over $9 million from the Plan to
the money purchase plan, and the closure of the Plan to new members. Alan would prefer to make
no change in valuation methods now, and recommended the Committee wait a year or two for
conditions to stabilize and then review the situation again. The Committee members concurred.
In order to keep Susan and Michele informed of today's presentation, Nancy will provide them with
copies of the graphics which support the pages of projections she distributed.
4. POSSIBLE PLAN CHANGE FOR PART-TIME SERVICE CREDIT AND BENEFIT
CALCULATION
MAIN POINTS: Alan distributed draft copies of a memo and survey to send to current Plan
members regarding their years of service with the City. The memo states that the Plan change the
Committee had thought would correct the full-time — part-time inequity in the Plan, would not work
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January 11, 2001
Page 3 of 4
in all situations. The memo also asks the members to complete a short survey to help determine
the extent of the problem and to aid in background research. The Committee suggested a few
changes to the memo and survey.
CONCLUSION AND NEXT STEPS: Alan moved to incorporate the suggested changes into the
memo and survey and to distribute them to Plan members by January 16. Bill seconded the
motion, which passed unanimously (4-0).
5. PREVIEW YEAR-END INVESTMENT REPORT
MAIN POINTS: Julie noted that it was not a stellar year for the stock market, with the Standard &
Poor's index down over 10% for the year. The NASDAQ, which focuses on technology stocks, was
down close to 40% for the year. This compares to the GERP portfolio which only declined by 2%.
She said that the international funds suffered the most. The fixed income portfolio yielded 6.46%
for the year, off -setting some of the mutual fund losses of—7.78%. The final report will include the
Plan investment returns for the last five years.
CONCLUSION AND NEXT STEPS: The final 2000 year-end investment report will be available for
the next meeting.
6. OTHER BUSINESS
A. Dottie asked that there be further discussion of the spread sheets provided at the December
meeting regarding the calculation of part-time and full-time member benefits. Alan reported he
had spent some time working on different calculation methods, but has not finalized a
recommendation yet. He will prepare some additional information on alternative calculations for
the February meeting.
B. Training Opportunities: Alan distributed copies of a brochure from the Clerk's Office regarding
a training class for boards and commissions members they will present in January. Committee
Members may attend by contacting the Clerk's Office. The Committee briefly discussed other
pension training opportunities.
7. SCHEDULE FOR NEXT REGULAR MEETING
The next regular meeting will be February, 1, 2001, at 1:15 PM in the Council Information Center
(CIC) of City Hall West. The tentative agenda includes:
1. Citizen Participation and Plan Member Comments
2. Consideration of the January 11, 2001, Minutes
3. Discussion of Retirement Philosophy
4. Progress on Valuation Report & Personal Retirement Planning Statements
5. Feedback on Memo and Survey of Part-time Service
6. Discussion of Alternative Methods of Calculating Retirement Benefit
7. 2000 Year-end Investment Report
8. Other Business
ADJOURNMENT: Terry adjourned the meeting at 3:20 PM.
GERC Meeting Minutes
January 11, 2001
Page 4 of 4
GERC AND GERP WEB PAGE ADDRESS:
http://www.ci.fort-collins.co.us/CITY HALL/BOARDS COMMISSIONS/RETIREMENT/index.htm
FUTURE MEETING SCHEDULE:
The Committee regularly meets at 1:15 p.m. on the first Thursday of each month in the Council
Information Center, City Hall West. The next scheduled meeting will be Thursday, February 1,
2001, at 1:15 PM. The Committee has scheduled meetings for 2001 as shown below:
2001 CALENDAR
THURSDAY, FEBRUARY 1, 2001
THURSDAY, MARCH 1, 2001
THURSDAY, APRIL 5, 2001
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