HomeMy WebLinkAboutRetirement Committee - Minutes - 09/13/19890
GENERAL EMPLOYEE RETIREMENT COMMITTEE
MEETING MINUTES
SEPTEMBER 13, 1989 9:00 A.M.
MEMBERS PRESENT: MEMBERS ABSENT:
Mollie Mercer Jerry Brown
Alan Krcmarik Angelina Powell
Dennis Sumner Sue Wilcox, Secretary
Guest: Don Mazanec of Mercer Meidinger Hansen actuaries.
CALL TO ORDER:
Chairperson Dennis Sumner called the meeting to order at 9:00 a.m.
APPROVAL OF MINUTES:
Minutes of the August 3, 1989 meeting were reviewed and approved
ITEMS OF NOTE:
Dennis noted that the "Open Items" category had been added to the minutes so
that these topics did not "fall through the cracks".
AGENDA REVIEW:
The agenda was adjusted to allow for members who would arrive later.
DISCUSSION TOPICS: OPEN ITEMS
1. Medical Benefits for Retirees/Disabled Employees
MAIN POINTS: Mollie Mercer reported that the meeting was moved to
September 21st. Jaime Mares and Pam Stultz are reviewing the information
that is to go to the E-Team about the subject.
DECISIONS/CONCLUSIONS: None
NEXT STEPS: Mollie will also bring this report to the 21st meeting for
review.
2. Conversion to Money -Purchase Plan
MAIN POINTS: Dennis briefly outlined for Don that the Committee has been
discussing the potential of a defined contribution (money -purchase)
retirement plan. The Committee wishes to further explore this concept to
determine if it would be a useful service for the employees and the City.
DECISIONS/CONCLUSIONS: Don's report on this topic is discussed later in
these minutes.
NEXT STEPS_ Further study.
DISCUSSION TOPICS: NEW ITEMS
1. Confirm accuracy of Sue's notes from 7/11/89 meeting with Don Mazanec.
mortality table based on 75 GAM, 50% male, 50% female; and (5) present
value of benefits based on a interest rate of 7.5%.
Don noted the defined contribution plan accumulates more value earlier and
then crosses with the defined benefit at some point in the future.
Although these comparisons show certain cross -over points and dollar
accumulations, they are all very sensitive to the assumptions used to
develop the tables.
Don expressed concern about offering two types of plans. Although he noted
other organizations do this successfully, it does add complications to the
administration of the retirement plan.
NEXT STEPS: The GERC will meet with City staff personnel 9/14/89 to
discuss this further.
5. Actuarial Valuation Report for 1988
MAIN POINTS: This report essentially tells us that if we had to terminate
everyone in the plan, we do have enough money in the fund to do that. Don
pointed out that the report reflects a 3.5% contribution rate. He noted
changes in two assumptions: salaries are now increasing at a lower rate
than previous assumed, and people are living longer. The rate of return on
our invested funds was greater than the 7-1/2% projected. The costs to the
fund for last year were reduced.
Don suggested some changes:
A. Add language to include employees of Poudre Fire Authority who are
covered by the city plan (secretaries and sprinkler technician).
B. The early retirement benefit presently cuts the benefit rate in half if
an employee retires before age 65. Don suggested adopting a "Rule of
80" which allows credit for years of service plus age of retiree to
equal 80 (or other prescribed number). The benefit is tied to a
percentage of of increase for each additional year earned.
C. Death Benefit. The spouse presently receives a 50% benefit for life,
but this could be expanded to a 50% benefit for other dependents for a
given length of time, i.e. 48 months. He estimated the cost would be
minimal to the fund.
D. He suggested we consider "cashing out" anyone presently in the plan (or
anyone who is vested but leaves before retirement) whose benefit is
less than $100 per month. They would be paid a lump sum or an annuity.
This would reduce the administrative burden of carrying these people in
the plan.
DECISIONS/CONCLUSIONS: Dennis moved that the next time we make changes in
the plan, we add a provision to "buy out" anyone whose benefit would be
less than $100/month. It would be optional for 77 current retirees, but
mandatory for new people retiring and people who are vested who leave the
City. This could only take. affect after it was approved by Council. Angie
0
CITY OF FORT COLLINS RETIREMENT PLAN
DEFINED CONTRIBUTION
DEFINED
BENEFIT
Annual
Accum
Accrued Monthly
Lump Sum
BOY
Monthly
Employer
Cont
Cont
Average
Benefit
Benefit at Later of
Value of
Age
Salary
Cont
u/Int
u/Int
Salary
Service
Attained Age or 55
Accrued Benefit
25
$2,000
S60
$744
$744
$2,000
1
S15
$234
26
2,090
63
778
1,578
2,045
2
31
514
27
2,184
66
813
2,509
2,091
3
47
849
28
2,282
68
850
3,547
2,139
4
64
1,245
29
2,385
72
888
4,701
2,188
5
82
1,712
30
2,492
75
928
5,981
2,287
6
103
2,309
31
2,605
78
969
7,399
2,390
7
125
3,028
32
2,722
82
1,013
8,967
2,497
8
150
3,891
33
2,844
85
1,059
10,699
2,610
9
176
4,921
34
2,972
89
1,106
12,607
2,727
10
205
6,147
35
3,106
93
1,156
14,709
2,850
11
235
7,603
36
3,246
97
1,208
17,020
2,978
12
268
9,326
37
3,392
102
1,262
.- 19,559
3,112
13
303
11,360
38
3,544
106
1,319
22,345
3,252
14
341
13,758
39
3,704
111
1,379
25,400
3,398
15
382
16,579
40
3,871
116
1,441
28,746
3,551
16
426
19,890
41
4,045
121
1,505
32,407
3,711
17
473
23,773
42
4,227
127
1,573
36,411
3,878
18
524
28,319
43
4,417
133
1,644
40,786
4,053
19
577
33,636
44
4,616
138
1,718
45,562
4,235
20
635
39,849
45
4,823
145
1,795
50,775
4,426
21
697
47,102
46
5,040
151
1,876
56,459
4,625
22
763
55,563
47
5,267
158
1,961
62,654
4,833
23
834
65,426
48
5,504
165
2,049
69,402
5,050
24
909
76,918
49
5,752
173
2,141
76,748
5,278
25
990
90,301
50
6,011
180
2,237
84,742
5,515
26
1,075
105,880
51
6,281
188
2,338
93,435
5,763
27
1,167
124,009
52
6,564
197
2,443
102,886
6,023
28
1,265
145,099
53
6,859
206
2,553
113,156
6,294
29
1,369
169,632
54
7,168
215
2,668
124,310
6,577
30
1,480
198,165
55
7,491
225
2,788
136,422
6,873
31
1,704
225,496
56
7,828
235
2,914
149,567
7,182
32
1,953
255,185
57
8,180
245
3,045
163,829
7,505
33
2,229
287,344
58
8,548
256
3,182
179,298
7,843
34
2,533
322,081
59
8,933
268
3,325
196,070
8,196
35
2,869
359,522
60
9,335
280
3,474
214,250
8,565
36
3,392
418,822
61
9,755
293
3,631
233,950
8;950
37
3,974
483,281
62
10,194
306
3,794
255,290
9,353
38
4,620
553,158
63
10,652
320
3,965
278,402
9,774
39
5,336
628,723
64
11,132
334
4,143
303,425
10,213
40
6,128
710,280
Assuoptions
Salary Scale: VSLuation Assumptions
Contribution Rate: >4% 3%,
Interest on Contributions: 7X
Present Value of Benefits:
- Mortality: 75 GAM, 50% male 50% female
- Interest: 7.5%