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HomeMy WebLinkAboutRetirement Committee - Minutes - 04/20/1998Adm&trative Services - Finance Administration City of Fort Collins FORT COLLINS GENERAL EMPLOYEES RETIREMENT COMMITTEE AUGUST 20,1998 MEETING MINUTES Approved as amended, October 15, 1998 COUNCIL LIAISON: Mayor Ann Azari COMMITTEE MEMBERS PRESENT: Jim Hume, 221-6776 Susan Lehman, 221-6813 Alan Krcmarik, 221-6788 Patti Teraoka, 221-6715 Kevin Westhuis, 221-6156 OTHERS PRESENT: Russ Proctor, Watson Wyatt Worldwide, the City's actuarial firm Jerry Wagner & Theresa Myers, ICMA Retirement Corporation Deb Weedman & Laurie Harvey, (Staff Support — Human Resources) Greg Tempel, (Staff Support — Legal) Bob Eichem & Julie Depperman, (Staff Support — Investments) Sue Wilcox, (Staff Support — Clerical) CALL TO ORDER: Chairperson Kevin Westhuis called the meeting to order at 1:20 p.m. ITEMS OF NOTE: Alan Krcmarik introduced Jerry Wagner and Theresa Myers of ICMA Retirement Corporation. Jerry is the West Territory Director and Theresa is a Senior Consulting Associate who will be working with the Committee and the City on the transfer of funds from the GERP if the GERC and City Council approve it. APPROVAL OF MINUTES: Alan distributed copies of the minutes for July 21, 1998. The Committee will consider approving the minutes at the regular meeting on September 3. ADDITIONS TO AGENDA/ITEMS FOR NEXT AGENDA: No changes. DISCUSSION TOPICS: 1. GERC PLAN MEMBER(S) COMMENTS/CITIZEN PARTICIPATION: There were no Plan member or citizen comments. 300 LaPorte Avenue • P.O. Box 580 • Fort Collins, CO 80522-0580 • (970) 221-6788 • FAX (970) 221-6782 GERCAkugust 20, 1998 Minutes Page 2 of 5 2. DB/DC CHOICE PROCESS MAIN POINTS: Russ Proctor reported that of the GER Plan members who voted, 55% voted to remain in the Plan and 45% wished to withdraw from the Plan. It had been pre- determined that the conversion could not happen if the financial status of the Plan for the remaining Plan Members was adversely affected. Russ determined that approximately $9 million would be transferred. The Plan would not have to increase the contribution rate to over 4.5%. Therefore, the conversion plan can go forward at this point based on the current Plan valuation. In general, it was the younger, shorter -service employees who elected to withdraw. Of the 846 members, all but 78 cast ballots. Deb Weedman had questions about whether to include election forms received after the deadline, either via interdepartmental mail or turned in at Human Resources. After some discussion it was decided that: 1. Ballots from terminated employees could not be accepted. Deb will notify those hired from July 1, 1997 through December 31, 1998 that they will have a special meeting after January 1, 1999 to determine their wishes. These members were not eligible to receive personal information statements because of the 6- month waiting period required before opening a 401(a) account. At a later time, Deb will provide the necessary information on these individuals to Russ, who will prepare the personal statements. Some individuals in this group may have received personal statements, attended sessions and completed election forms. This will be checked, as well as anyone who should have, but did not receive, an election form. However, there were still questions about some employees: • Two employees who terminated in '96 but were rehired in '98. • Two people wanted more information (from Kevin's final reminder), but could not be reached to provide them the information before the vote deadline. • Ten ballots were received after Monday, August 17, 1998. The largest group did not attend the presentations (and did not receive the personal information) or did attend, but did not submit an election form. These individuals will receive a phone call from a GERC member or staff support person confirming that Human Resources did not receive an election form from them and that they will be retained in the GER Plan. Greg Tempel will prepare a "script" that the callers can use in order to standardize the information requested and to have a record of the answers. Kevin will draft a message to go to all GERC members via email to tell them the results of the election and the probable next steps in the process. Sue Wilcox will ensure that copies of this notice are sent to the departments for posting and routing to those members who do not have access to email. CONCLUSION/NEXT STEPS: Russ will provide a letter verifying the results of the election to Greg Tempel and Kevin. Once Kevin receives the confirmation letter from OERC August 20,1998 Minutes Page 3 of 5 Russ Proctor, he will prepare a cover memo and send it to the City Manager and City Council members. He will also send a copy to Alan for distribution to the Finance Committee members, for consideration at their September meeting. Kevin moved (Patti Teraoka seconded) to allow anyone notified that their ballot was not accepted because it was received late, can come to the September 3, 1998 GERC meeting at 1:15 p.m. in the Council Information Center of City Hall West to present an appeal and any evidence pertaining to why their election form should be considered. The motion passed unanimously. The appeals presented at the meeting should be recorded and the Committee can decide if it wishes to have the member(s) be sworn in. The members will be notified as soon as possible. It was agreed that those members who did not receive the personal information but who did see the videotaped presentation may also present their appeal and evidence at the September 3 meeting. 3. ICMA — ROLLOVER COORDINATION MAIN POINTS: Jerry Wagner, West Territory Director for ICMA introduced Theresa Myers, who will be ICMA's Senior Consulting Associate to the City. If City Council approves the provision to allow conversion, Theresa will be handling the coordination. There was discussion of changes that may be needed to the City's contract with ICMA. Jerry noted that rollovers can only be to 401(a) plans and not to 457 plans. If an individual currently has only a 457 plan, a 401(a) plan will be provided automatically in order to roll over GERP funds. The possibility exists that these individuals who opted to stay in the 457 plan when given this option several years ago, might be given an opportunity to move to a 401(a) at this point. A "transition team" will have to be created to oversee administrative issues and will probably include Alan, Kevin, and Deb working with Theresa. A list of administrative issues will be prepared and a new adoption agreement may be necessary. Among topics to be discussed is the loan provision, since these would be City contributions that are transferred. Jerry suggested scheduling ICMA's certified financial planner to provide some educational seminars on the loan provisions. The Committee and staff reviewed the proposed wording for a resolution to go to City Council (possibly in October) and suggested changes. Alan will prepare the Agenda Item Summary. There was discussion about the possibility that fluctuations in the stock market might affect this anticipated move. It is anticipated that the 4.5% contribution outlined in the proposal would remain the same for both the GERP and those who move to the MPP plan. If conditions determine that the GERP contribution rate should change, then changes can be requested from City Council for both plans. GERC August 20,1998 Minutes Page 4 of 5 CONCLUSION/NEXT STEPS: Jerry advised that funds would be moved as soon after January 1, 1999 as is practical, given that it falls on a Friday, making January 4`h the first business day. As soon as ICMA receives the computer tape from the City, the funds will be credited to the individual accounts, with confirmations going to City employees of the amounts transferred. 4. ELIGIBILITY OF DISABLED VESTED MEMBERS FOR BENEFITS MAIN POINTS: Requests have been received from deferred vested disabled members asking for lump -sum benefits, which are not allowed under the current Plan. The policy is that an individual receiving disability benefits from Workers Compensation, long term disability (LTD), or Social Security should not receive retirement benefits, as this could provide more compensation than if the individual were working, thus there would be less incentive to return to work. A Plan member who has been receiving disability benefits from the city's insurance carver, has inquired as to what benefits he would be entitled to if the payments stopped. He advised staff support that he is no longer receiving disability payments. He has been advised that he needs to provide the GERC with a letter from the agency providing the disability payments stating that they have been discontinued. The GERC will then consider the matter. Russ Proctor noted that if those individuals currently receiving disability payments were allowed to receive their retirement benefit as a lump -sum, there would not be an adverse affect on the plan. It was suggested that the city's long-term disability (LTD) carrier might reduce the amount of its payment to offset for any retirement benefits paid to disabled individuals. Also because there is a difference between permanent and temporary disabilities, this could undermine the LTD plan if lump -sum benefits were allowed. Laurie Harvey or someone from Human Resources could contact Sun Life about this. It is possible that individuals apply for and receive Social Security disability payments after their contact with the City is severed, and the City may not be aware of this. CONCLUSION/NEXT STEPS: This topic will be discussed at future meetings. AGENDA AND SCHEDULE FOR NEXT MEETINGS The next meeting will be Thursday, September 3, 1998 at 1:15 p.m. in the Council Information Center (CIC) of City Hall West. The agenda will include: 1. Consider approving the July 21, 1998 minutes 2. 1998 Actuarial Report OERC August 20,1998 Minutes Page 5 of 5 3. Election of Officers 4. Update of DB/DC Choice Process 5. Eligibility of Disabled Vested Members for Lump -sum Distributions. 6. Regular Investment Review ADJOURNMENT The meeting was adjourned at 4:00 p.m. GERC/GERP WEB PAGE ADDRESS: www.ci.fort-collins.co.us/CITY HALLBOARDS COMMISSIONS/RETIREMENT/index.htm FUTURE MEETING SCHEDULE: The General Employees Retirement Committee normally meets at 1:15 p.m. on the ls` Thursday of each month in the Council Information Center, City Hall West. THURSDAY, SEPTEMBER 3, 1998 THURSDAY, OCTOBER 15, 1998 THURSDAY, NOVEMBER 5, 1998 THURSDAY, DECEMBER 3, 1998 THURSDAY, JANUARY 7, 1999 THURSDAY, FEBRUARY 4, 1999 THURSDAY, MARCH 4, 1999