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City of Fort Collins FORT COLLINS GENERAL EMPLOYEES' RETIREMENT COMMITTEE
DECEMBER 7, 2000, MEETING MINUTES
COUNCIL LIAISON: Mayor Ray Martinez
COMMITTEE MEMBERS PRESENT:
Terry Van Cleave, 221-6321
Dottie Nazarenus, 204-4429
Alan Krcmarik, 221-6788
OTHERS PRESENT:
Approved, as amended, on January 11, 2001
Bill Switzer, 221-6713
Susan Lehman, 221-6813
Michele Hays -Johnson, 416-2158
Julie Depperman (Finance Staff) Sue Wilcox (Finance Staff)
Deb Weedman (Human Resources) Greg Tempel (Legal Staff)
Nancy Wagner & Gary Heaston, Milliman & Robertson (the Plan's actuary)
CALL TO ORDER: Chair Susan Lehman called the meeting to order at 1:25 PM.
ITEMS OF NOTE: None.
PLAN MEMBER COMMENTS: Terry Van Cleave invited Plan members interested in early
retirement to attend this meeting, but none were present. Under "Other Business" Deb
Weedman passed out information from the last City early retirement program.
APPROVAL OF MINUTES: Alan Krcmarik distributed the draft minutes of the November 2,
2000, meeting. Dottie Nazarenus moved to approve the minutes. Bill Switzer seconded the
motion. The Committee approved the minutes unanimously (6-0).
DISCUSSION TOPICS:
1. WORK PLAN REVISIONS - MEETING DATE CONFLICTS WITH 2O01 HOLIDAYS
MAIN POINTS: The Committee reviewed the 2001 Work Plan meeting dates for possible
conflicts with City holidays. Alan moved to change the July 5 meeting to July 12 to avoid
Independence Day vacation conflicts. Terry seconded the motion. The Committee approved
the motion (6-0). After the Finance and Human Resource Departments move to the new office
building located at 215 N. Mason St. in July, the Committee may consider changing the location
of future meetings.
CONCLUSION AND NEXT STEPS: Sue Wilcox will send the 2001 Work Plan to the City
Clerk's office, reserve the Council Information Room for the meetings, and post the meeting
dates on the public meeting notice board in City Hall.
2. RETIREMENT PHILOSOPHY DISCUSSION
MAIN POINTS: The members and staff discussed revisions to the Retirement Philosophy,
which was prepared with the help of Watson Wyatt, the previous actuarial consultant, in 1996.
Filename: GMIN12072000F.doc
300 LaPorte Avenue • P.O. Box 380 • Fort Collins, CO 80522-0580 • (970) 221-6788 • FAX (970) 221-6782
General Emplc 's Retirement Committee
december 7, 2000, Minutes
Page 2 of 4
Susan and Alan will arrange for the summary report of the focus groups to be made available to
the Committee and Plan members.
Since the Retirement Philosophy was written, the composition of the Plan participants has
changed significantly. The focus group comments may no longer reflect the concerns of the
remaining members. New conditions and desires may impact the goals for the Committee and
future Plan enhancements. The consensus of the Committee members was to maintain this
topic on future agendas. The topic will help to educate members by collecting feedback and
ideas from the actuary as well as Committee and Plan members.
CONCLUSION AND NEXT STEPS: The Committee will retain the philosophy discussion on the
agenda. The Committee identified the following issues for future discussion:
Use of data base statistics to run "what if' scenarios (when completed)
Possible Plan surplus
Possible Plan enhancements
Adjust 1.5% factor in benefit calculation formula
Rule of 80 (or 85)
Cost of living adjustments
Retiree health care benefits
Early retirement program
Cost benefit analysis from previous early retirement programs
Possible relationship between older employees and injuries
Part-time — Full-time equity (currently being considered)
3. ACTUARIAL VALUATION METHODS
MAIN POINTS: Nancy Wagner, Plan Actuary, was not yet prepared to discuss this item. She
asked to defer the item to the January meeting.
She asked for the data in the last year's Personal Retirement Planning Statements to help them
to prepare the 2001 statements. Nancy requested that the year-end data for the valuation
report be sent early in January.
Gary Heaston supplied Julie Depperman with the factors needed to calculate benefit options
(120 Month Certain and Life, 50% Joint.and Survivor, and 100% Joint and Survivor) for Plan
members considering retirement. Julie will provide this information to the Information
Technology staff for integration into the Access database to enable staff to prepare individual
calculations.
CONCLUSION AND NEXT STEPS: The actuarial cost method for valuation discussion will be
delayed to the January agenda. Deb Weedman said that Human Resources will provide two
payroll files in January. The first will include 2000 payroll data. The second will have the 2001
pay plan information.
4. PLAN CHANGE FOR PART-TIME SERVICE CREDIT AND BENEFIT CALCULATION
MAIN POINTS: Julie and Alan briefly reviewed the calculations changes recommended by
Watson Wyatt to correct the part-time — fulltime inequity issue. After applying the recommended
changes using various full time — part-time scenarios, staff found members who have changed
from full-time to part-time within the last 10 years receive an unexpected windfall. The actuary's
. General F�oyee's Retirement Committee
December 7, 2000, Minutes
Page 3 of 4
recommendation works well for future full-time to part-time status changes but creates an
inequity for members who have made a prior FTE status change. Julie provided the Committee
with a report that illustrated the inequity caused by the recommended Plan change.
After lengthy discussion, the Committee decided it needed more data about the members of the
Plan. The Committee would like to know the number of members that 1) have always been full
time, 2) have always been part-time, 3) have switched from full-time to part-time, 4) have
switched from part-time to full-time, or 5) have experienced a break in service while in the Plan.
Rather than conduct time-consuming research in the files, the Committee decided to do a short
survey of the members.
CONCLUSION AND NEXT STEPS: Alan and his staff will draft a short survey for members to
complete. He will circulate the draft to the GERC members. Alan also will draft a notice to the
Plan members informing them that a part-time — fulltime change to the Plan requires further
analysis and will not be initiated on January 1, 2001.
5. MONTHLY INVESTMENT UPDATE
MAIN POINTS: Julie distributed an update on the investment portfolio. She noted the
November stock market downturn. In most cases, the amount of the decline in the Plan's
mutual funds is less than their benchmarks. Julie commented that some of those funds showed
significant gains last year. If the two years are averaged, the Plan still had a return exceeding
the 7.5% benchmark.
CONCLUSION AND NEXT STEPS: Staff reminded the members that pension plan
investments are for the long-term. Stock market fluctuations are normal and to be expected.
6. OTHER BUSINESS
A. Alan mentioned that the deadline for filing the Annual Report with the City Clerk is January
31, 2001. Susan will circulate a draft of the Annual Report. She will add it to the January
agenda.
B. A Plan member asked if the minutes can be available sooner, so Plan members can attend
or comment on the discussion topics.
Currently, staff drafts the minutes following the meeting and routes them for review by
Committee members, support staff, and the actuary before a final draft is presented for
approval at the next meeting. After the Committee approves the minutes they are
distributed to the Plan members. This ensures the minutes are complete and correct. Plan
members may not be able to respond to an item until the second meeting after the initial
discussion. The Committee believes this procedure to be prudent.
C. Deb distributed packets of information pertaining to the last early retirement program that
was offered.
7. SCHEDULE FOR NEXT REGULAR MEETING
The next regular meeting will be Thursday, January 4, 2001, at 1:15 PM in the Council
Information Center (CIC) of City Hall West. The tentative agenda includes:
General Emplc s Retirement Committee
.:ecember 7, 2000, Minutes
Page 4 of 4
1. Citizen Participation and Plan Member Comments
2. Consider Approving the December 7, 2000, Minutes
3. Consider Approving Draft of 2000 Annual Report
4. Discussion of Retirement Philosophy
5. Discussion of Valuation Method
6. Discussion of Possible Plan change in Calculating Part-time Service
Credit
7. Monthly Investment Update
8. Other Business
ADJOURNMENT: Susan adjourned the meeting at 3:50 PM.
GERC AND GERP WEB PAGE ADDRESS:
hftp://www.ci.fort-collins.co.us/CITY HALL/BOARDS COMMISSIONS/RETIREMENT/index.htm
FUTURE MEETING SCHEDULE:
The Committee normally 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, January 4,
2001, at 1:15 PM. The Committee has scheduled meetings for 2001 as shown below.
2001 CALENDAR
THURSDAY, JANUARY 4, 2001
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