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HomeMy WebLinkAboutRetirement Committee - Minutes - 03/07/1991FORT COLLINS GENERAL EMPLOYEES RETIREMENT COMMITTEE MARCH 7, 1991 MEETING MINUTES MEMBERS PRESENT: MEMBERS ABSENT: Dennis Sumner, Chairman Mollie Mercer Jerry Brown Angelina Powell Alan Krcmarik Sue Wilcox, Secretary Visitors were Don Mazanec of William M. Mercer, Inc., Pam Stultz of Employee Development Department, Stewart Ellenberg of Risk Management Department, and Bob Eichem of Treasury Division. CALL TO ORDER: Dennis Sumner called the meeting to order at 1:15 p.m. in the new Finance Conference Room of City Hall West. APPROVAL OF MINUTES: Jerry Brown moved that the minutes be approved as submitted. Angelina Powell seconded the motion, which passed unanimously. ITEMS OF NOTE: Dennis welcomed Don Mazanec, Pam Stultz, Stewart Ellenberg, and Bob Eichem. AGENDA REVIEW: It was agreed to consider the Fourth Quarter 1990 Investment Report immediately following Open Item #1 so as not to keep the visitors overlong. DISCUSSION TOPICS: Open Items 1. LONG-TERM DISABILITY VS WORKERS' COMP COVERAGE MAIN POINTS: This topic is a continuation of the issue originally raised in a letter from Mary Crumbaker-Smith dated 8/13/90. The language in the General Employees Retirement Plan gives retirement accrual benefits to employees who are disabled and receive long-term disability (LTD) coverage, (usually this means disabled by a -non -work- related injury). The Plan language does not give accrual benefits to disabled employees who are receiving Workers Compensation (disabled by a work -related injury). The January 1, 1985 booklet describing the GERP states both disabilities are covered with the same accrual benefits. The Problems are: 1. The formal plan and the booklet do not agree. 2. A decision needs to be made on which arrangement should apply. (Then the Plan and/or booklet need to be brought into agreement on this issue.) 3. There is a concern for equity. Should employees disabled for either LTD- or Workers' Comp -related occurrences be treated the same? 4. Any administrative issues related to this question needs to be identified and resolved. Stewart and Pam presented a memo dated March 6, 1991 that was offered to help address these issues. Don Mazanec expressed some concerns with the approach presented by Stewart and Pam. He asked to use their memo and prepare another recommendation for resolving this problem. CONCLUSIONS/DECISIONS: The Committee accepted Don's offer and asked Stewart and Pam to attend the next GERC meeting to ensure their concerns were properly addressed. NEXT STEPS: Don Mazanec will prepare the above -referenced draft. The draft will be distributed to the GERC, Stewart, Pam, and Mary Crumbaker- Smith for review in the first week of April. Further discussion will then take place at the next GERC meeting on April 19. 2. LUMP -SUM PAYMENT FOR VESTED TERMINATED PARTICIPANTS MAIN POINTS: Don Mazanec drafted a letter to be sent to vested terminated participants eligible for a monthly benefit of less than $100, offering them the option of a lump -sum payment. We also have information Don distributed earlier regarding the tax implications for those receiving a lump -sum payment. It is in the GERP's interests to grant lump -sum payments, as it will reduce the cost of maintaining these records and reduce the eventual cost to the program as it eliminates any future cost - of -living increases. It is proposed that this offer not be extended until one year after an individual terminates with the City, as the City does allow ex -employees to retain benefits if they return to City employment during that year. CONCLUSIONS/DECISIONS: The main points as noted above were agreed to and approved. Don noted that he has not completed consolidating data on terminated employees eligible for the lump -sum payment. He noted the need to discuss this further with Mollie and Sue to ensure all of their records matched. NEXT STEPS: Don, Mollie and Sue will meet to consolidate data on terminated employees. The information will be presented to the GERC at our next meeting. 3. RETIREMENT BENEFIT OPTION SELECTION FORM MAIN POINTS: Sue described the new 2-page Retirement Benefit Option Selection form and noted that there is a section to show that copies were made and distributed to the retiree. She thanked Judy Putnam, who did an excellent, speedy job of making the final form document. The two sheets will be printed back-to-back for the distribution copies, eliminating the possibility of losing one of the sheets. CONCLUSIONS/DECISIONS: Mollie moved that the new form be accepted. Alan seconded the motion and it passed unanimously. (See attached copy.) NEXT STEPS: The form will be used immediately for two employees who have requested retirement. 0 DISCUSSION TOPICS: New Items FOURTH QUARTER 1990 INVESTMENT REPORT MAIN POINTS: Bob Eichem reported that the stock market continued to be very volatile, but that the rate of return for retirement funds in 1990 was 9.15%, which is significant when compared to other entities: ICMA BOND FUND 6.85% ICMA GUARANTEED FUND 8.04% LEHMAN BROS GOVT CORP INDEX 8.30% LARIMER CO SECURED INVESTMENTS 8.79% FIDELITY INTEREST BONDS 7.40% OVERALL CITY INVESTMENTS 8.63% Bob cautioned that we should not expect the same rate of return each quarter, but that investment of our pension funds has a greater level of flexibility than other City money (the General Employees Retirement funds can be held in the investment longer) and therefore has been able to produce a better return. CONCLUSIONS/DECISIONS: The members expressed their pleasure at the profitability of the fund and thanked Bob for his efforts. NEXT STEPS: Bob noted that they will be installing a Bloomberg system for handling investments, which will reduce the amount of manual work currently being done. This project has a high priority for his office. 2. ROSE CEFKIN'S RETIREMENT SETTLEMENT MAIN POINTS: As a result of incorrect information, Rose Cefkin had declined to take retirement benefits at age 65, which resulted in an actual decline in the amount of her benefit payment. When this was discovered, Don Mazanec prepared information which included payment of benefits beginning with Rose's 65th birth date, interest from that time to the present, and the amount of a lump -sum payment of future benefits, as her monthly payment would have been less than $100/month. The total is $4,392.53 as of April 1, 1991. CONCLUSIONS/DECISIONS: Jerry moved and Angelina seconded a motion that Rose be offered this settlement. The motion passed unanimously. NEXT STEPS: . Sue will prepare a letter for Dennis's signature stating this information and the amount of the monthly benefit and send it to Rose, along with the information prepared on tax considerations. 3. 1990 ANNUAL REPORT/1991 WORK PLAN FOR CITY COUNCIL MAIN POINTS: Dennis advised that he received a late request from Rita Knoll for the GERC 1990 Annual Report and 1991 Work Plan for Council. CONCLUSIONS/DECISIONS• A draft will be prepared and distributed to Committee members for review and comment. 4. NEXT STEPS: Dennis will prepare the two draft reports and distribute them to Committee members. 1992 CITY BUDGET PREPARATION MAIN POINTS: Mayor Susan Kirkpatrick sent a memo to all Boards and Commissions asking them to identify any key budget issues which should be considered for 1992. There was discussion about the budget -related issues associated with the GERC studies on competitiveness of the retirement plan and the defined contribution study. CONCLUSIONS/DECISIONS: It was concluded that City Council is expecting the GERC to operate within the guidelines of the Total Compensation concept. This means the GERC should not plan on any change in the budgeted funding or dollars in the GERP for the near future. NEXT STEPS: Since the Committee will be operating within the current budget and funds in the General Employees Retirement Plan, no action was needed. 5. APPRECIATION TO COUNCIL LIAISON MAIN POINTS: Jerry noted that Councilman Mabry, our current Council liaison, will not be running for re-election in April. It was noted that our contacts with him had been very productive and his support of the Committee's proposals to Council had made for a smooth enactment process. CONCLUSIONS/DECISIONS: It was suggested that a card and note be sent to him thanking him for his help and asking him if he would enjoy a lunch with the GERC, giving Committee members a chance to personally thank him for his leadership. NEXT STEPS: Sue will be responsible for sending the card and finding if Councilman Mabry would care for a luncheon. 6. GOVERNMENT FINANCE OFFICERS ASSN. CONFERENCE MAIN POINTS: Alan announced that the GFOA National Conference is being held in Denver from June 2-5 and pointed out that they usually have about five informative sessions on pension benefits. The cost of registration is about $265 for non-members and travel and meal costs would be minimal. Alan noted he may be able to get some GERC members in pension sessions on a complimentary basis. CONCLUSIONS/DECISIONS: Mollie moved and Jerry seconded a motion to register one committee member to attend sessions related to pension work. The motion passed unanimously. It was agreed that Dennis's name would be registered. NEXT STEPS: Sue was directed to prepare one travel form for Dennis. ITEMS FOR FUTURE DISCUSSION 1. Pension Investment Seminar/Public Benefit Plans Workshop 0 2. Evaluation of competitiveness of the GER Plan, based on Total Comp Study. 3. Defined contribution study. (Refer to 10/26/89 meeting minutes.) Delayed until changes to the current plan have been studied and resolved. (Refer to 1/25/90 minutes.) 4. Possible involvement of GER Plan in the 401(a) deferred compensation plan. 5. Plan improvements to be considered. (Review in June. See October 29th letter from Don Mazanec for costs.) 6. Resolve retirement benefit questions related to employees injured during employment with the City, i.e. Sehestedt and Hattan. AGENDA & SCHEDULE FOR NEXT MEETING The next meeting will be Friday, April 19th at 1:15 p.m. in the Finance Conference Room. The agenda will include: I. Workers Comp VS LTD - Jaime Mares & Pam Stultz 2. Information/Process on lump -sum payments and letter. 3. First Quarter 1991 Investment Report (if available). 4. GFOA National Conference in Denver. FUTURE REVISIONS TO THE RETIREMENT PLAN 1. Amend the Plan to make the date of the first retirement benefit payment the last working day of the month. (See minutes of 11-1-91 meeting.) 2. Amend the Plan to include a "default" option of 50% Joint and Survivor Benefit. (Refer to minutes of 12-6-90 meeting.) 3. Amend Plan to require spouse's approval on the selection of any retirement option other than joint benefit with spouse. ADJOURNMENT The meeting was -adjourned at 3:30 p.m. GENERAL APLOYEES RETIREMEN-OLAN CIZd Fa Clffl- EMPLOYEE: DATE OF BIRTH: LAST DAY WORKED: RETIREMENT BENEFIT OPTIONS SELECTION FORM SS # DATE OF EMPLOYMENT: ACTUAL RETIREMENT DATE: RETIREMENT BENEFITS PAYABLE AT NORMAL RETIREMENT DATE ( Option 1 - Normal Retirement S The participant is entitled to receive a retirement benefit payable at the Normal Retirement Date in the amount Of $ per month, payable throughout retiree's life, and ceasing with the last monthly payment prior to retiree's death. RETIREMENT BENEFITS PAYABLE AT EARLY RETIREMENT DATE ( Option 2 - Early Retirement The participant is entitled to receive a retirement benefit payable at the Early Retirement Date in the amount of $ per month, payable throughout retiree's life, and ceasing with the last monthly payment prior to retiree's death. OPTIONAL FORMS OF BENEFIT PAYMENT Option 3 -120 Months Certain and Life Benefit In lieu of the Early/Normal Retirement Benefit, the participant may elect to receive a benefit of $ per month, payable through retiree's life, with the provision that if at the time of retiree's death a total of 120 monthly payment have not been made, the monthly payments will continue to retiree's beneficiary until a total of 120 monthly payments have been made to the participant and retiree's beneficiary combined. Option 4 - 50% Joint and Survivor Benefit In lieu of the Early/Normal Retirement Benefit, the participant may elect to receive a benefit of $ per month, payable throughout retiree's life, with the provision that upon death, a benefit of $_ per month shall be continued during the lifetime of the beneficiary. Option 5 -100% Joint and Survivor Benefit S In lieu of the Early/Normal Retirement Benefit, the participant may elect to receive a benefit of $ per month, payable throughout retiree's life, with the provision that upon death, a benefit of $ per month shall be continued during the lifetime of the beneficiary. ELECTION: I understand that I may change my designated beneficiary or my election of an option at any time prior to 90 days before the first monthly retirement benefit payment is due. I have read and reviewed the foregoing retirement benefit options. The first monthly payment is due on . I hereby elect Option and designate as my beneficiary: NAME SIX RELATIONSHIP If you are married and selectan optiol, at has no survivor benefits or if you nar�_pmeone other than your spouse as beneficiary, this form must be signed by your spouse, and your spouse's signature must either be witnessed by a plan representative or notarized, indicating that your spouse agrees to this beneficiary election and/or form of pay- ment (See NOTE below.) Member Date Spouse (if applicable) Date Notary/Witness (if applicable) Date STATE OF COLORADO) ) ss COUNTY OF LARIMER) Subscribed and sworn to before me this My Commission Expires: (Notary Seal) day of , 19_ Notary Public NOTE: The designated beneficiary for optional benefits may be the spouse of the member or vested member, if living at the time the optional retirement benefit is elected. If a married member wishes to designate someone other than the spouse to be beneficiary, such designation will not be effective unless the spouse (if spouse can be located) consents in writing to such designation, such consent acknowledges the effect of such designation and such consent and acknowledgement is witnessed by a Plan representative or notary public If the member does not designate a beneficiary or the designated beneficiary dies prior to the due date of the first payment of retirement benefits under the Plan and no new beneficiary or no alternate or secondary beneficiary has been designated, the Retirement Committee is empowered to designate a beneficiary for the member from the following list, in the order listed: (a) retiree's spouse, or if none; (b) retiree's children and children of deceased children, by right of representation, or if none, (c) retiree's parents, or if none; (d) retiree's brothers and sisters and nephews and nieces who are children of deceased brothers and sisters, by right of representation, or if none; (e) retiree's estate. If a retired member dies while receiving benefits, the death benefit will be determined according to the form of retirement benefit being paid to such members. Further, provisions relating to the method of designating a beneficiary in paragraph 1 above shall apply.