HomeMy WebLinkAboutRetirement Committee - Minutes - 01/08/199810 Gene* Employees Retirement Plan ,
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City of Fort Collins
FORT COLLINS GENERAL EMPLOYEES RETIREMENT COMMITTEE
JANUARY 8, 1998 MEETING MINUTES
COUNCIL LIAISON: Mayor Ann Azari
COMMITTEE MEMBERS PRESENT:
Jim Hume, 221-6776
Dave Agee, 221-6770
Alan Krcmarik, 221-6788
Kevin Westhuis, 224-6156
Patti Teraoka, 221-6715
OTHERS PRESENT:
Russ Proctor, Watson Wyatt Worldwide, the City's actuarial firm
Deb Weedman for Laurie Harvey (Staff Support - Human Resources)
Greg Tempel (Staff Support - Legal)
Bob Eichem (Staff Support - Investments)
Sue Wilcox (Staff Support - Secretary)
CALL TO ORDER: Chairperson Kevin Westhuis called the meeting to order at 1: 25 p.m. in
the Council Information Center of City Hall West.
ITEMS OF NOTE: One item on the original agenda is postponed until next month when Jaime
Mares can have a summary of several views of funding a cost of living adjustment (COLA) for the
Committee to review. Jim Hume will be going to Orlando to attend the conference on Defined
Benefit and Defined Contribution Plans.
APPROVAL OF MINUTES: The minutes of the December 4, 1998 meeting were distributed.
Alan moved that they be approved as presented. Patti Teraoka seconded the motion, which
passed unanimously.
DISCUSSION TOPICS:
1. GER PLAN MEMBER(S) COMMENTS/CITIZEN PARTICIPATION: There were no
member or citizen comments. -
2. ANNUAL REPORT FOR 1997 - DRAFT
MAIN POINTS: Kevin had distributed an initial draft of the 1997 Annual Report electronically.
Several additions were suggested, as well as some wording changes. Dave Agee moved that the
Annual Report be approved and adopted as amended and Alan seconded the motion.
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3uu LaPorte Avenue • P.O. Box 580 • Fort Collins, CO 80522-0580 • (970) 221-6788 • FAX (970) 221-6782
GERC Minutes - January 8, 799 4
CONCLUSIONS/NEXT STEPS: Kevin will ensure the amendments and revisions are made in
the wording and send the report to City Clerk before January 30.
3. PERSONAL RETIREMENT PLANNING STATEMENTS (PRPS), BENEFIT
CALCULATIONS, & EDUCATION FOR MEMBERS
MAIN POINTS: Following the December meeting, Alan and Russ Proctor met to discuss
calculation of roll-over benefit amounts to be used in conjunction with education for members on
the Defined Benefit (DB) and Defined Contribution (DC) types of plans. More recently they met
with Jerry Huggins, who is the ICMA Retirement Corporation representative, and Mark Sanford,
Actuarial Analyst for Watson Wyatt Worldwide, to review the assumptions to be used in these
calculations. After some discussion, it was agreed that the assumptions to be used should be the
same as used in the defined benefit plan. The contribution rate will be 4.5% of base salary. The
interest rate will be 7.5%. The salary scale rate will be 4.5%. ICMA RC will use its conversion
model to perform the calculations for the GERC. The transfer balances will be calculated
assuming a defined contribution plan had always been in effect and will be based on 1997 salary
(not a five-year salary history).
It was stressed that the individual calculations will be for educational purposes only and are not
intended to be official offers at this time. They are to be used to gauge the amount of interest
there might be in transferring from the GERP to a defined contribution plan, if one were offered.
If a DC plan is offered, it will involve a long lead time, outside legal help, more education
sessions, and probably one-on-one sessions with employees. Alan provided some information on
how the police and fire personnel went through the process of choosing between DC and DB
plans, a system of informed choice.
CONCLUSION/NEXT STEPS: To avoid confusion, the annual Personal Retirement Planning
Statements (PRPS), showing members' current and projected GERP benefits, will be issued at the
end of March by W W W. Tapes of 1997 salary information will be forwarded to Russ at W W W
and the ICMA RC representative, who can create some graphics for the estimates. The
Education Program will begin with educational presentations by Jeff Kraft of Watson Wyatt
Worldwide for all GERP members. Those who attend the educational presentations will receive
an individual projection of their GERP benefit if it were transferred to a Defined Contribution
(DC) type of plan.
4. REGULAR INVESTMENT REVIEW
MAIN POINTS: Alan and Bob Eichem briefly summarized the year-end investment results for
the GERP assets. For the year, the equity portion was up about 12% and the bond and cash
portion up 6.9a/o. For the total fund, this equates to a return of about 9.5%. Fifty-three percent
of the Plan's assets are in equities and 47% are in fixed income and cash.
The Nicholas Fund showed the best return in 1997, up 35.6%. Among the equity funds, the
worst performer was the new Asia Fund, which dropped 39% and has now been capped at its
current level. In 1997, the GERP acquired $4.5 million in mutual funds, of which $675,000 was
in foreign funds.
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GERC Mimutee - January 8, 799
CONCLUSION/NEXT STEPS: Alan and staff will try to have the quarterly/year-end
investment report by the February meeting.
5. OTHER BUSINESS
MAIN POINTS: The question has been raised whether the GER Committee could also act as
an oversight committee for the ICMA RC Money Purchase Plan. Greg Tempel, Laurie Harvey,
and Alan Krcmarik have discussed this possibility. Alan noted that Poudre Fire Authority has
three different pension plans with each having its own board. Although the boards meet at the
same time and discuss similar issues, all votes for changes to the plans are conducted separately.
CONCLUSION/NEXT STEPS: This issue can be added to the agenda for February.
AGENDA & SCHEDULE FOR NEXT MEETING
The next meeting will be Thursday, February 5th at 1:15 pm in the Council Information Center
(CIC) of City Hall West. The agenda will include:
1. Plan Member Comments/Citizen Participation
2. Jaime Mares' Report on COLA Pros & Cons
3. Discussion of Member Education and Lump -Sum Calculations
4. Jim Hume's Report on Defined Benefit -Defined Contribution Conference.
5. Resolution Appointing Financial Officer as Funding Agent
6. GERC Acting as 401(a) Board
7. Regular Investment Review
8. Other Business
ADJOURNMENT
The meeting was adjourned at 3:21 p.m.
FUTURE MEETING SCHEDULE:
The General Employees Retirement Committee normally meets at 1:15 p.m. on the 1st Thursday
of each month in the Council Information Center, City Hall West.
THURSDAY, FEBRUARY 5, 1998
THURSDAY, MARCH 5, 1998
THURSDAY, APRIL 2, 1998
THURSDAY, MAY 7, 1998
THURSDAY, JUNE 4, 1998
THURSDAY, JULY 9, 1998**
THURSDAY, AUGUST 5, 1998
THURSDAY, SEPTEMBER 3, 1998
THURSDAY, OCTOBER 12, 1998
THURSDAY, NOVEMBER 5, 1998
THURSDAY, DECEMBER 3, 1998
**Because the July meeting falls so close to the
observance of Independence Day (on July
3rd), it was moved to the next Thursday,
July 9th, 1998.
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