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HomeMy WebLinkAboutRetirement Committee - Minutes - 07/06/1992I FORT COLLINS GENERAL EMPLOYEES RETIREMENT COMMITTEE • JULY 6, 1992 MEETING MINUTES MEMBERS PRESENT: MEMBERS ABSENT: Jerry P. Brown Mollie Mercer Dennis Sumner Dave Meyer Alan Krcmarik (Member & Staff Support) OTHERS PRESENT: Angelina Powell, retiring member Sue Wilcox (Staff Support - Secretary) Mary Crumbaker (Staff Support - Legal) COUNCIL LIAISON: Loren Maxey Don Mazanec and Amy Coffern of William M.Mercer, Inc., the City's actuarial consultant to the General Employees Retirement Plan, attended the meeting also. CALL TO ORDER: Chairperson Dennis Sumner called the meeting to order at 1:15 p.m. in the Finance Conference Room. APPROVAL OF MINUTES: On page 3, the second sentence should begin "One idea being...." and the "9" at the end of the title of Item 3 should be deleted. Alan moved and Mollie seconded a motion to approve the June 11, 1992 minutes • as corrected. The motion carried. ITEMS OF NOTE: Dennis noted that Dave Meyer was officially approved by City Council to replace Angelina Powell. On behalf of the members, Dennis praised Angelina for her more than nine years of service and many contributions to the Committee and the Plan. Because of her commitment to the GER Education Program, Angelina will continue to work with the Committee on this project. (The standing rules will apply and she may not vote.) Ann Turnquist of the Staff Committee on Pension Activities had requested time to address the Committee, but a scheduling conflict has moved this to the August 6th meeting. REVIEW OF DISCUSSION TOPICS: The agenda was approved. DISCUSSION TOPICS: 1. PENSION EDUCATION PROGRAM MAIN POINTS: The members of the Committee had received copies of the draft outline of a brochure Amy Coffern had prepared which uses the "Game Of Life" to elicit interest in the GER retirement plan. There is also a comparison of the GER Plan benefits with those of the ICMA 457 Plan. The members reviewed the information, making comments, suggesting changes, and clarifying wording. Mary will review the section on disability since she was involved in the clarification of disability benefits in the newest plan revision. Don Mazanec also • offered changes and suggestions. CONCLUSIONS/DECISIONS: The members liked the format and content of the information, but asked that the distinction between a retirement plan and a deferred compensation plan be made more clear. They also requested that the income for the two computation examples be increased and that an example showing ICMA calculations be given also. Employee Development's phone number will be used and that department can act as the contact point for questions. Amy was asked to make the suggested revisions and send copies of the revised text to Sue for distribution and discussion at the August 6th meeting. NEXT STEPS: Sue will send Kathleen Tracy a copy of the preliminary draft so that she can begin working on the format and graphics. She will also distribute the revised drafts from Amy to the members, Mary, and Angelina. 2. PLAN HANDBOOK REVISION MAIN POINTS: The Plan handbook is now out of print and needs to be revised in light of changes approved by City Council in recent years. Amy had distributed copies of the revised handbook, but Don would like • to take a more in-depth look at it and to make some of the changes suggested in the discussion of the brochure's contents. The members also would like to take an in-depth look at the material, as it is expected that the handbooks will be used for a number of years. CONCLUSIONS/DECISIONS: The members agreed that the handbook material could be revised, reviewed and still allow time for typesetting and printing by the September 15th target date. NEXT STEPS: Amy and Don will revise the handbook's contents and have copies to the members in time for consideration at the August 6th meeting. 3. FORTNOTES ARTICLES MAIN POINTS: Mollie Mercer wrote the first of the FortNotes articles and discussed the Focus Groups and the findings of the report on the members' concerns. This should be distributed on Friday, July 10th. Angelina Powell created a list of possible topics for future writers of the FortNotes articles. Mollie's next article will talk about the change in the plan which allows employees who previously had a one- to five-year break in service to now include those years in their years of service and benefits calculations. CONCLUSIONS/DECISIONS: It was agreed to not publish the names of those people we know had breaks in service, but to request that anyone -2- t knowing of such an dohas been included. articles. individual to contact Mollie to ensure that person Dave Meyer has volunteered to write the next two NEXT STEPS: Mollie will write the next article. She will also collect any questions that the first article generates and forward them to Dave for inclusion in the following articles. 4. CONTACTING EMPLOYEES WITH PRIOR SERVICE AND LESS THAN 5 YEAR SEPARATIONS MAIN POINTS: Mollie sent letters to each person who is known to have prior City employment, with a break of five years or less, informing them that the previous service will count towards their retirement benefits. She received several replies and all expressed appreciation for this action. CONCLUSIONS/DECISIONS: The members thanked Mollie for completing this activity, which was the result of recent changes approved by City Council. NEXT STEPS: As noted above, the next Fort Notes column will solicit the names of other individuals who may have had prior service. 5. RETIREMENT BENEFIT QUESTIONS RELATED TO INJURED EMPLOYEES MAIN POINTS: The cases of several employees who sustained injuries • while employed by the City have situations which do not fall neatly into the guidelines of the Retirement Plan. Mary has analyzed the information available on the first of these, Jack Sehestedt, and presented a draft of a confidential memo for the members to review and discuss. Mary stated that the Committee's decision in this particular circumstance should make decisions on other similar cases easier. CONCLUSIONS/DECISIONS: The members would prefer to review this information at length before discussing it as a group. NEXT STEPS: The item was deferred to the next meeting, August 6. ITEMS FOR FUTURE DISCUSSION It was decided to remove Item #1 below from this list, as all members and staff are aware of this need and will keep it in mind. 1. Pension Investment Seminar/Public Benefit Plans Workshop 2. Plan Improvements A. 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.) B. Possible involvement of GER Plan in the 401(a) deferred compensation plan. • -3- s C. Rule of 80 3. GERP / Workers Comp / Disability Proposal to E-Team AGENDA h SCHEDULE FOR NEXT MEETING The next meeting will be August 6, 1992 at 1:15 p.m. in the. Finance Conference Room. Jerry P. Brown noted that he will be unable to attend that meeting due the wedding of his daughter. The agenda will include: 1. Pension Education Program A. Final approval - brochure B. Review of Benefits Handbook Material 2. Discussion with Staff Committee on Pension Activities. 3. Quarterly Report 4. Valuation Report from actuary. 5. Retirement Benefits Questions related to employees injured during employment with the City. ADJOURNMENT • The meeting was adjourned at 3:23 p.m. 1992 MEETING SCHEDULE (Generally held in the Finance Conference Room, City Hall West at 1:15 p.m.): THURSDAY, AUGUST 6, 1992 THURSDAY, OCTOBER 1, 1992 THURSDAY, DECEMBER 3, 1992 16 -4- THURSDAY, SEPTEMBER 3, 1992 THURSDAY, NOVEMBER 5, 1992 r 0 FORT COLLINS GENERAL EMPLOYEES RETIREMENT COMMITTEE JUNE 11, 1992 MEETING MINUTES MEMBERS PRESENT: MEMBERS ABSENT: Jerry Brown Mollie Mercer Dennis Sumner Angelina Powell Alan Krcmarik (Member & Staff Support) Sue Wilcox (Staff Support - Secretary) COUNCIL LIAISON: Loren Maxey Dave Meyer, who is the non -voting, member -elect to the GERC, was in attendance. Also, Amy Coffern of William M. Mercer, Inc. attended to assist with discussion of the education program. CALL TO ORDER: Chairperson Dennis Sumner called the meeting to order at 1:20 p.m. in the North Conference Room of Finance on June 11, 1992. APPROVAL OF MINUTES: Jerry Brown moved that the minutes be approved as distributed. Mollie Mercer seconded the motion, which passed. ITEMS OF NOTE: Sue distributed copies of the letter she had sent to the Focus Group participants, outlining the key issues from Amy's report on the Focus Group meetings. She also mentioned that she had written to Don Mazanec at William M. Mercer, Inc. to have the people with prior City employment and a break in service of five years or less included in the actuarial report, and also to have both periods of employment included on their 1992 personal benefit report forms. There was discussion of the planned series of Question/Answer columns in FortNotes. Mollie agreed to write the first two and Dave will compose the second two. Angelina Powell will act as coordinator of the project and will prepare a list of possible topics to be used for the first few articles (until questions are generated by the employees), as there is essential background and general information that the Committee wishes to make available to the employees. REVIEW OF DISCUSSION TOPICS: Added to the agenda as item #5 was discussion of Mollie's draft letter to those employees having a break in service of 5 years or fewer. DISCUSSION TOPICS: PENSION EDUCATION PROGRAM MAIN POINTS: The Focus Group meetings conducted by Amy Coffern in May revealed the general lack of knowledge of and appreciation for the General Employees Retirement Plan. The Committee discussed the various informational needs expressed by employees at the Focus Group meetings and reviewed the many diverse ways that information could be presented -1- to the employees. Some of the goals include: Providing information on the total retirement package (i.e. GERP, Social Security, and ICMA benefits) so that employees could better appreciate and estimate their total retirement benefit; providing opportunities for employees to ask questions; providing on -going training/information for employees and for new employees; providing user-friendly information at a fair cost. CONCLUSIONS/DECISIONS: The following activities and materials, estimated costs, and time schedule were agreed upon for 1992: GERP PAYS MERCER'S ITEM/ACTIVITY DIRECTLY ESTIMATE TIME FRAME 1. Personal GERP Retirement Benefit Reports *2. Handout (simple, overall outline of Plan) *3. Plan Booklet (re -write of existing Plan booklet re- quired by many Plan changes) 4. Training Sessions (Train GERC members to conduct information meetings) 5. Follow-up Survey & Analysis --- Already In 1992 Budget $1,000 printing $1,500 printing $4,000 re -write $2,000 re -write August 1 (or sooner) Sept. 1 September 15 $3,500-script October 1 $1,000-visuals $7,000 November 1 *Amy will draft or revise these items and the Committee will review them at the next meeting. The schedule is ambitious, but do -able. Besides information on the GERP benefits, the handout will include information on projecting retirement financial needs and formulas to calculate estimated income from ICMA and Social Security. The information in the Plan handbook was written in 1985 and is now out of date and out of print. The rewrite will include changes in the Plan enacted in 1990 and 1992 and enough copies will be printed for all current employees plus some for future employees. It will be more cost-effective to have Amy train Committee members and former members (including a practice training session) to conduct the information meetings, than to have Mercer personnel conduct them. it is planned that one of the information meetings can be taped by ICS personnel (at a cost of less than $20/hour) and used for those unable to attend a scheduled session or for training new employees. It may also be possible for City personnel to create some of the visuals at a lower cost. The Committee suggested that the follow-up survey be one page and self-addressed so it can be folded, stapled, and sent through inter -office mail, thus saving envelope and postage costs. The quote also includes the analysis and report of the survey results. -2- In order to continue this Education Program next year, The Committee will make a budget request for 1993 funds. On idea being considered is to create a Pension/ICMA benefit "wheel" (like a circular slide rule) that can be used to calculate benefits. This wheel would allow benefit comparisons at ages 55, 60, and 65 years. Also under consideration for 1993 is an information video to be used for new employees or current employees wanting direction on how to go about calculating retirement needs and benefits. NEXT STEPS: Amy will draft the handout and revise the booklet for the Committee to review at its next meeting. Alan will prepare an appropriation for the cost of this work, so it can be presented to City Council on July 21st. Sue will contact Opal in Purchasing about the requirements for using "sole source" for the work that Mercer has outlined, rather than having the work bid. 2. REVISION OF PERSONAL RETIREMENT BENEFIT REPORT FORMS MAIN POINTS: Each year in conjunction with the Actuarial Report, William M. Mercer, Inc. prepares a one -page Personal Retirement Benefit Report for each employee. Some time ago, in discussions about the Pension Education Program, consideration was given to revising the form currently used and including information on calculating and estimating Social Security and ICMA benefits. CONCLUSIONS/DECISIONS: It was decided that because the handout being created for the Pension Education Program would contain this information, and revising the form would delay issuing the benefit reports for this year, that no revisions would be made to the form at this time. Consideration will be given to revising the form for next year. The Committee members want to be sure that employees who had a previous City employment period with a break in service of 5 years or fewer, will now have both periods of service included on their benefit report form. NEXT STEPS: Amy can inform the people who are preparing the Personal Retirement Benefit Reports to proceed, using the existing form to complete their work. She can also reiterate the Committee's wish to include the new employees with breaks in service in the actuarial report and the personal benefit report forms. 3. NEED FOR INTERIM VICE CHAIRPERSON9 MAIN POINTS: According to the Standing Rules, officers will be re- elected in September, but since Angelina Powell's appointment expires in July, the Committee will be without a vice chairperson. Dennis solicited volunteers and Jerry Brown agreed to fill the interim position until September. CONCLUSIONS/DECISIONS: Alan moved that Jerry Brown be appointed the interim vice chairperson. Mollie seconded the motion, which passed unanimously. -3- NEXT STEPS: Jerry agreed to be vice -chairperson until September. 4. RESCHEDULE NEXT MEETING & ARRANGE LUNCHEON FOR ANGELINA MAIN POINTS: Because the next meeting would fall the day before the observance of the 4th of July, the members agreed to move the meeting to Monday, July 6th at 1:15 p.m. in the Finance Conference Room. In appreciation for the nine and a half years of service Angelina has given the General Employees Retirement Committee, the Plan members, and the City of Fort Collins, the members of the Committee will host lunchecn for her on Monday, July 6th at 11:30 a.m. Also to be invited are Loren Maxey, Mary Crumbaker, Bob Eichem, and past committee members wha served with Angelina. CONCLUSIONS/DECISIONS: The luncheon for Angelina Powell will be Monday, July 6th at 11:30 a.m. at Suehiro's Restaurant, 223 Linden Street to be followed by the re -scheduled regular meeting at 1:15 p.m. in the Finance Conference Room. NEXT STEPS: Sue will make reservations and contact the individuals who were not at this meeting. She will see that the necessary notices of the time change are issued. 5. NOTIFICATION OF MEMBERS WITH PRIOR CITY EMPLOYMENT AND BREAKS IN SERVICE MAIN POINTS: Mollie provided copies of a draft letter to those City employees who had a prior period of City service, followed by a break in service and subsequent City re-employment, to let them know of the change in the Plan that allows both periods of employment to be included in retirement calculations. Some changes were suggested. There was also discussion of how best to find any other individuals who may have experienced breaks in service of less than 5 years, but who are not on the list. CONCLUSIONS/DECISIONS: The letter was approved for distribution. Mollie will also include information about this change in the Q/A columns she writes to make sure everyone impacted by this change has been identified, and she will also send an electronic message about it to department and division heads. NEXT STEPS: Mollie will prepare the letters for Dennis's signature and will see that they are sent. ITEMS FOR FUTURE DISCUSSION 1. Pension Investment Seminar/Public Benefit Plans Workshop 2. 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- 3. Possible involvement of GER Plan in the 401(a) deferred compensation plan. 4. Plan improvements A. Review in June. See November 1, 1990 minutes and October 29, 1990 letter from Don Mazanec for costs. B. Rule of 80 5. GERP / Workers Comp / Disability Proposal 6. Monitor progress by staff committee on pension activities. AGENDA & SCHEDULE FOR NEXT MEETING The next meeting will be Monday, July 6, 1992 at 1:15 p.m. in the Finance Conference Room. The agenda will include: 1. Pension Education Program A. Review of Draft of Handout Brochure B. Review of Revised Benefits Handbook 2. Discussion with Staff Committee on Pension Activities (45 minutes) 3. Resolve retirement benefit questions related to employees injured injured during employment with the City, i.e. Sehestedt and Hattan. 4. Confirming and Informing those eligible for reinstatement following break in service of less than 5 years. ADJOURNMENT The meeting was adjourned at 3:40 p.m. FUTURE MEETINGS SCHEDULE (meetings are normally at 1:15 p.m. in the Finance Conference Room): ***MONDAY, JULY 6, 1992*** This is a new date due to 4th of July holiday. THURSDAY, AUGUST 6, 1992 THURSDAY, OCTOBER 1, 1992 THURSDAY, DECEMBER 3, 1992 -5- THURSDAY, SEPTEMBER 3, 1992 THURSDAY, NOVEMBER 5, 1992 FORT COLLINS GENERAL EMPLOYEES RETIREMENT COMMITTEE MAY 28, 1992 MEETING MINUTES MEMBERS PRESENT: MEMBERS ABSENT: Jerry Brown Mollie Mercer Dennis Sumner Angelina Powell (excused) Alan Krcmarik (Member & Staff Support) Sue Wilcox (Staff Support - Secretary) Mary Crumbaker (Staff Support - Legal) COUNCIL LIAISON: Loren Maxey Amy Coffern of William M.Mercer, Inc. attended to present the report on the Focus Group meetings. CALL TO ORDER: Chairperson Dennis Sumner called the meeting to order at 8:15 a.m. in the Finance Conference Room on May 28, 1992. APPROVAL OF MINUTES: It was suggested that events occurring subsequent to the meeting, but which have a direct bearing on items in the minutes, be included as a post script at the end of the minutes. Mollie Mercer moved that the minutes be approved as distributed. Alan Krcmarik seconded the motion, which passed. ITEMS OF NOTE: Angelina Powell was ill and unable to attend. Dennis welcomed Dave Meyer, who is the Industrial Pre -Treatment Supervisor for the Water Quality Lab. Dave has been recommended to City Council to replace Angelina Powell when her term expires in July. He was invited to attend to hear the presentation on the Focus Group meetings, since the follow-up to this report will be the major effort of the Committee this year. He is not currently a voting member of the Retirement Committee. REVIEW OF DISCUSSION TOPICS: The agenda was approved. DISCUSSION TOPICS: 1. REPORT ON FOCUS GROUP MEETINGS MAIN POINTS: Amy Coffern reported that the Focus Group meetings held on May 7 were well attended and the response was very enthusiastic. She noted that several key issues came out of the focus groups regarding employees' knowledge of and satisfaction with their retirement package: * Employees are not well educated about the GER Plan and have little appreciation for the GER plan benefits and the City's cost of funding the plan. * Many employees are concerned about whether the GER plan benefits will meet their financial needs after retirement. * Employees want the plan to include retiree medical coverage and -1- unreduced, or slightly reduced, early retirement benefits for long - service City employees. A few participants said they would be willing to contribute to the GER plan for improved retirement benefits. * Employees want the option to take the vested portion of their GER plan benefit when they leave employment with the City and "roll over" that money into a new employer's plan or an IRA. Because the GER plan benefits are part of their total compensation, many employees believe they should have access to that money if they leave the City. * Employees want the GER plan to provide a death benefit for an employee who dies before age 55, especially if the employee is fully vested. * Almost all employees understand that "total compensation" is their salary and benefits combined, but many have differing attitudes about total compensation. Some view total compensation positively, while others believe it is a tool used for budgeting purposes only. * Employees are divided on two issues: (1) whether the City should allow employees to deride which plan the City's 3.553% retirement contributions go into, and (2) whether employees should have some input into how the City's 3.553% contribution is invested. * Most participants feel the retirement committee is not visible enough and that many employees are not aware of the Committee's mission, meeting times or members. A number of observations were made by the Committee. In the course of informal discussion it was noted that the past process of releasing salary information at a separate time from the benefit year may have contributed to some confusion. It was also noted that annual retirement benefit statements might be more useful if they contained retirement benefits at ages 55, 60, and 65 and included information on the individual's Social Security benefits, as well as information on the individual's ICMA benefits. CONCLUSIONS/DECISIONS: It was agreed that there is a need for an aggressive educational effort to give members more information on the retirement plan. It as concluded that participants in the focus groups should be sent summaries of the focus group findings. It was also agreed that an on -going effort to communicate information about the GERP to members should be developed. NEXT STEPS: Sue will send a summary of focus, group findings to participants. Mollie will check with Becky O'Donnnell, Fort Notes editor, to see if a retirement question/answer column can be initiated. The Committee will meet with Amy again on June 11th at 1:15 P.M. in the Hallway Conference Room, lower level of City. Hall West, to further develop a plan and budget for an educational effort later this year. 2. UPDATE - LOCATING TERMINATED VESTED MEMBERS MAIN POINTS: Sue reported that she is continuing to confirm the addresses for eight people, but she has few leads for the other four -2- 0 whose whereabouts are unknown. CONCLUSIONS/DECISIONS: Sue needs to follow up on the leads she has and will report progress made from time to time. NEXT STEPS: Sue will continue to research the location of these people. 3. PARTICIPATION IN THE 457 PLAN MAIN POINTS: Alan outlined the following breakdown of costs and participants in the 457 (ICMA) plan. # of Employees 691 151' 21 Participation Level Full 3% participation Do not participate Less than 3% (Average is about 2%) City's Cost Average Salary $ 620,000 1112W -0-** $ 28,500 $ 18,900* $ 24,000 *If these 151 employees participated at 3%, it would cost $91,200. **If these 21 employees participated at 3%, it would cost $5,400. CONCLUSIONS/DECISIONS: It was noted that funds are typically not budgeted to cover full participation at the 3% level; the actual cost is approximately 2%. It was also noted that total compensation calculations assume full participation at the 3% level. NEXT STEPS: The Committee concluded it should encourage all employees to make full use of the 3% available to them. This will be included in educational efforts. 4. RETIREMENT BENEFIT QUESTIONS RELATED TO EMPLOYEES INJURED DURING EMPLOYMENT. MAIN POINTS: There are two individuals who were injured while employed by the City and who have received disability payments. The question the Committee must consider revolves around the amount of credited service they are eligible for. There are some complicating factors which must be reviewed as well. Mollie has briefed Mary Crumbaker briefly, but Mary suggested that this item needs study. She would like to bring an analysis to the Committee at the July meeting. CONCLUSIONS/DECISIONS: This item was deferred to the July meeting. 'Average salaries and City cost figures are from separate accounting sources. Numbers are given for comparative purposes only. 2Non-participants include a number of classified, part-time employees. -3- NEXT STEP: Mary will prepare an analysis of these two situations for the July meeting. 5. FOLLOW-UP ON REINSTATEMENT OF MEMBERS FOLLOWING BREAK IN SERVICE MAIN POINTS: Mollie prepared a list of individuals currently employed by the City, who had prior service with the City and separations of less than 5 years. CONCLUSIONS/DECISIONS: These individuals need to be notified that they are now eligible for this additional benefit. Don Mazanec needs a copy of this list. The Committee would lake these increased terms of service included in the 1991 actuarial valuation report and they would also like the terms of service included in the benefit calculations created for individual employees. NEXT STEPS: Mollie will draft a letter to be sent to the employees on the list. Sue will draft a letter to accompany the list to Don Mazanec, asking that these additional terms of service be included in the actuarial valuation report due out this summer, and that their benefits be included in the benefit calculations for these individuals. 6. REVISION & RE -PRINTING OF BENEFITS BOOK MAIN POINTS: As part of the education program, the Committee will need a revised benefits book showing the current benefits and provisions of the Plan. The Committee felt the current book is readable and easy to understand. The actuary made the last revision and arranged for printing. The number of copies to be ordered was discussed. CONCLUSIONS/DECISIONS: The Committee would like William M. Mercer, Inc. to make the revisions and the members want to review the draft. The Committee also would like to make the handbook more colorful) with City personnel creating the graphics) and to have about 2,000 copies printed. An appropriation will be necessary; this can be included with the appropriation for the education program. NEXT STEPS: Mollie will contact City Graphics Designer Kathleen Tracy about the design. Sue will include the request for the revised wording in her letter to Don Mazanec. STAFF COMMITTEE ON PENSION ACTIVITIES MAIN POINTS: Mary discussed the administrative staff committee on pension (Dave Agee, Finance; Mary, legal; Ann Turnquist, Employee Development) which was formed to coordinate pension activities. Previously, all three areas were handling parts of the pension activities, but no one had responsibility for coordination. It is hoped that eventually a pension administrator can be hired to do this. As the police and fire pension plans have been converted to defined contribution plans, it has generated more questions. This committee wants to see that answers are consistent and that there is -4- communication among the various departments involved in pensions. CONCLUSIONS/DECISIONS: No decisions are necessary, but either Ann or Dave may be attending from time to time to keep in touch and to exchange information. NEXT STEPS: None required. ITEMS FOR FUTURE DISCUSSION 1. Pension Investment Seminar/Public Benefit Plans Workshop 2. 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.) 3. Possible involvement of GER Plan in the 401(a) deferred compensation plan. 4. Plan improvements A. Review in June. See November 1, 1990 minutes and October 29, 1990 letter from Don Mazanec for costs. B. Rule of 80 5. GERP / Workers Comp / Disability Proposal AGENDA & SCHEDULE FOR NEXT MEETING The next meeting will be Thursday, June 11 at 1:15 p.m. in the Hallway Conference Room, City Hall West, lower level. The agenda will include: 1. Pension Education Program 2. Revision of Benefits Handbook 3. Discussion of officers - Interim vice chairperson 4. Luncheon for Angelina & July meeting date ADJOURNMENT The meeting was adjourned at 3:40 p.m. MEETING SCHEDULE: THURSDAY, JUNE 11, 1992 THURSDAY, AUGUST 6, 1992 THURSDAY, OCTOBER 1, 1992 THURSDAY, DECEMBER 3, 1992 -5- THURSDAY, JULY 2, 1992 THURSDAY, SEPTEMBER 3, 1992 THURSDAY, NOVEMBER 5, 1992 C, J FORT COLLINS GENERAL EMPLOYEES RETIREMENT COMMITTEE MAY 7, 1992 MEETING MINUTES MEMBERS PRESENT: MEMBERS ABSENT: Jerry Brown Mollie Mercer Dennis Sumner Angelina Powell Alan Krcmarik (Member & Staff Support) Bob Eichem (Staff Support - Treasury Administrator) Sue Wilcox (Staff Support - Secretary) COUNCIL LIAISON: Loren Maxey Visitors included Pam Stultz and Laurie Harvey of Employee Development, who were present representing the Interim Pension Committee. CALL TO ORDER: Chairperson Dennis Sumner called the meeting to order at 1:23 p.m. in the Light and Power Conference Room on May 7, '992. APPROVAL OF MINUTES: Jerry Brown moved that the minutes of the April 23, 1992 minutes be approved as distributed. Alan Krcmarik seconded the motion and it was approved. ITEMS OF NOTE: Dennis noted that Mollie Mercer was participating in the Poudre Fire Authority firefighter testing process and could not attend the meeting today. He also stated that the Focus Group Meetings are going well and that he had met with Amy Coffern and Deidre Fisher at lunch and he felt he could re -cap their conclusions from the first three meetings. This would eliminate the need to meet with Amy at 4:00 p.m. REVIEW OF DISCUSSION TOPICS: Items (Resolve Retirement Benefit Questions the agenda were deferred till the seasonal/hourly work and rescheduling agenda. DISCUSSION TOPICS: 2 (Participation in the 457 plan) and 4 Related to .... Sehestedt and Hattan) of next meeting. Retirement credit for of next meeting time was added to this 1. GENERAL DISCUSSION OF RETIREMENT CREDIT FOR SEASONAL/HOURLY WORK MAIN POINTS: Jerry Brown commented that because of all the Focus Group and GERC meeting publicity, a great deal of interest has been generated in the General Employees Retirement Plan. Several individuals have asked him if it is possible for employees who had worked as seasonal or hourly employees for several years and who are now permanent City employees to add those seasonal/hourly years to their retirement benefits, if they contributed the funds necessary. CONCLUSIONS/DECISIONS: There was some discussion and the conclusions were that this option was not a part of the Retirement Plan as currently structured and it was not a part of the terms of employment -1- at the time the individual(s) were hired as seasonal or hourly employees. Further, given the current work plan to educate employees on the GERP and then to solicit comments and suggestions, it was concluded that this concern should be considered in the broader context. If it is identified as an area to be addressed through this process, it will then be explored. NEXT STEPS: None required. 2. FIRST QUARTER INVESTMENT REPORT & EQUITY INVESTMENT UPDATE MAIN POINTS: The rate of return on investments for last quarter was 8.89%, compared to a benchmark of 6.58%. Bob Eichem said that he does not expect returns to stay that high because of general economic conditions. He reported that during the last quarter he had moved some funds from short-term to longer -term investments, as this is a safer return. He stated that he attends the meetings of Colorado Diversified Trust (where some City funds are invested) to keep up with their activities. Bob noted that following a presentation he made at Light and Power, Bob Kost suggested that Bob Eichem might also find "Mutual Fund Forecaster" to be a worthwhile publication to assist in investment management. Bob reported that Light and Power purchased a subscription to this journal for him and he finds it a very useful companion to "Morningstar". The Treasury Administrator addressed the Committee about two specific issues concerning mutual fund investments. One issue concerned a potential conflict of interest related to his possible purchase, on behalf of the City, of a given mutual fund which he has also purchased with his personal funds. He told the GERC that the City Attorney's Office advised him this would not be considered a conflict of interest. It would only be a conflict of interest if Bob served as an active manager of the individual mutual fund. (NOTE: Bob has since learned that the particular fund under consideration contains foreign investments and cannot be used for City investments, so the issue of conflict of interest is a moot point.) The second issue concerns the purchase of Janus Twenty Mutual Fund. It does not meet the criteria of ten-year minimum existence. However, based on the strength of other Janus Funds and the performance of this fund over its eight -year life, Bob asked for GERC approval for exception from the ten-year criteria to include this mutual fund in the investment portfolio. CONCLUSIONS DECISIONS: Jerry Brown moved that the First Quarter Investment Report be accepted and Angelina Powell seconded the motion. The motion passed. Jerry Brown moved that the Committee approve the purchase of Janus Twenty, recognizing that the 8-year history is an exception for this fund. Alan Krcmarik seconded the motion and it was approved. -2- NEXT STEPS: Bob will proceed with mutual fund purchases as approved by the GERC. 3. UPDATE ON CONTACTS WITH TERMINATED VESTED GERP MEMBERS MAIN POINTS: Sue outlined her efforts to reach the 94 people on the list of vested employees, many of whom are terminated, to determine current addresses. She has been successful in obtaining addresses for all but 6 and she is still working on those. Of the 88 contacted, the addresses for 12 still need to be verified directly with the individuals. The names of the "lost" people was read and members offered possible contacts. CONCLUSIONS/DECISIONS: Sue will continue to work to verify addresses for all individuals. NEXT STEPS: Letters will be sent to the 12 who need to be contacted. Sue will follow up on leads given her by the members. 4. CURRENT EMPLOYEES WITH PRIOR SERVICE AND LESS THAN 5 YEAR SEPARATIONS MAIN POINTS: The members believe Mollie prepared a list of individuals currently employed by the City, who had prior service with the City and separations of 5 years or less. These individuals will need to be contacted and notified that they are now eligible for this additional benefit. Don Mazanec also will need this list, along with the individual's original hire date, termination date, any subsequent hire and termination dates, and whether any pension funds were paid to them as a lump -sum. CONCLUSIONS/DECISIONS: Since much of this activity involves information that Mollie is thought to have, it was felt that members and staff will need direction from her as to how to proceed. NEXT STEPS: Sue will contact Mollie, ask for direction, and assist if possible. 5. REVISION & RE -PRINTING OF BENEFITS BOOK MAIN POINTS: In order to proceed with the education program, the Committee will need a revised benefits book showing what current benefits are. Also, if changes in the Plan are to be evaluated by members, it will be necessary to have an updated plan for side -by -side comparisons. The revision is also an activity which involves Mollie Mercer's experience and expertise for information and direction. CONCLUSIONS/DECISIONS: Mollie must be contacted for direction. NEXT STEPS: Sue will contact Mollie for direction and to assist if possible. -3- 6 7 CHANGE OF MEETING TIMES MAIN POINTS: Because of schedule conflicts, Amy Coffern will not be able to present her report on the Focus Group meetings on the regularly -scheduled June meeting date. In addition, because Committee members are anxious to begin the education program, it was suggested that an additional meeting be held to begin discussion of that program. CONCLUSIONS/DECISIONS: Optional dates for the regular meeting are Thursday, May 28th at 8:00 a.m. (first choice) and Friday, May 29th any time in the morning (second choice). Dennis will check with Amy and Don, and Sue will check with Mollie to see if either date will work. They will also check to see if June 11th at 1:15 p.m. will work to begin planning the Education Program. NEXT STEPS: Notices of the new meeting times will be sent to Committee members and general announcements will be made available to Plan members. FOCUS GROUP PRELIMINARY FINDINGS MAIN POINTS: Dennis reported the following as preliminary generalizations from the first three focus group meetings held that morning: 1. The employees want information about retirement benefits and are really interested in this subject. 2. Employees understand the concept of Total Compensation. 3. They are very interested in medical coverage after retirement. 4. Most employees did not know the General Employees Retirement Committee existed or anything about its charge. 5. Employees are interested in exploring a variety of changes and enhancements in the GERP. Based on the preliminary nature of these comments, the Committee elected to hold off on extensive dialogue until the findings are presented. A formal report on the findings of the Focus Groups will be presented at the next GERC meeting. CONCLUSIONS/DECISIONS: The results are interesting and not entirely unexpected. NEXT STEPS: The Committee is anxious to receive and review the formal summary of meeting results. ITEMS FOR FUTURE DISCUSSION 1. Pension Investment Seminar/Public Benefit Plans Workshop -4- 0 • 2. 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.) 3. Possible involvement of GER Plan in the 401(a) deferred compensation plan. 4. Plan improvements A. Review in June. See November 1, 1990 minutes and October 29, 1990 letter from Don Mazanec for costs. B. Rule of 80 5. GERP / Workers Comp / Disability Proposal AGENDA & SCHEDULE FOR NEXT MEETING The next meeting will be Thursday, May 28th at 8:00 a.m. in the Finance conference Room. The agenda will include: 1. Pension Education Program 2. Update on contacting vested former employees. 3. Participation in the 457 Plan 4. Resolve retirement benefit questions related to employees injured during employment with the City, i.e. Sehestedt and Hattan. 5. Follow up on reinstatement for members following a break in service of 5 years or less. 6. Revision of Benefits Handbook ADJOURNMENT The meeting was adjourned at 3:40 p.m. MEETING SCHEDULE: THURSDAY, MAY 28, 1992 THURSDAY, JULY 2, 1992 THURSDAY, AUGUST 6, 1992 THURSDAY, OCTOBER 1, 1992 THURSDAY, DECEMBER 3, 1992 -5- THURSDAY, JUNE 11, 1992 THURSDAY, SEPTEMBER 3, 1992 THURSDAY, NOVEMBER 5, 1992 FORT COLLINS GENERAL EMPLOYEES RETIREMENT COMMITTEE APRIL 23, 1992 SPECIAL MEETING MINUTES MEMBERS PRESENT: MEMBERS ABSENT: Jerry Brown Mollie Mercer None Dennis Sumner Angelina Powell Alan Krcmarik (Member & Staff Support) Sue Wilcox (Staff Support - Secretary) Bob Eichem (Staff Support - Investments) COUNCIL LIAISON: Loren Maxey Visitors included Amy Coffern of William M. Mercer, Inc., actuary; David Meyer and Patty Schneeberger, City employees who are interested in serving on the GERC; and Jaime Mares, head of Employee Development. CALL TO ORDER: The meeting was preceded by Bob Eichem's demonstration of the Bloomberg Financial Market System, which he uses extensively when investing the City's and GERP's funds. Chairperson Dennis Sumner called the meeting to order at 2:30 p.m. in the Treasury Division Conference Room, 330 S. College on April 23, 1992. APPROVAL OF MINUTES: Jerry Brown noted that in the minutes of the April 2, 1992 meeting, page 3, item #6 "Participation in the 457 Plan" that the "12" was transposed and should actually be a "21". Jerry moved that the minutes of the April 2nd minutes be approved as corrected. Angelina Powell seconded the motion and it was approved. ITEMS OF NOTE: Dennis welcomed David, Patty and Jaime. REVIEW OF DISCUSSION TOPICS: The agenda was accepted. 1. PRESENTATION OF EDUCATION PROGRAM TO E-TEAM MAIN POINTS: Dennis had sent an electronic message describing his visit with E-Team members about the Education Program. The members agreed to make time available for the employees chosen to attend the Focus Group meetings and also time for the training and education which is anticipated to follow later. Steve Burkett asked that the GERC provide him with a brief update on how this effort is proceeding as the project unfolds. Diane Jones asked that a copy of the anticipated training schedule be made available to E-Team members when it is developed so they might be able to attend. Dennis responded for the GERC that we would be pleased to fulfill both of these requests. There was discussion of the structure and formation of the GER Committee and whether the City Manager's position has a responsibility or role in its operation. It was noted that there is a Task Force composed of many staff personnel (Alan, Mary Crumbaker, Jaime Mares, Ann Turnquist, Rita -1- DeCourcey, Pete Dallow, Dave Agee, and Pam Stultz) which is wrestling with coordinating the administration of all of the City's many retirement plans (the 457 plan, Dept -Div Head's 401 plan, the City Manager's 401 plan, and all of the police and fire plans, as well as the GERP). Several Committee members expressed concern that somehow General Employee Retirement funds are part of employees' total comp package and a structure is needed to ensure these funds are not used for other purposes. CONCLUSIONS/DECISIONS: The members reaffirmed their satisfaction with the current structure of the GERC. It was noted that the General Employees retirement Committee was appointed by City Council to act in an advisory capacity, that the position of Director of Finance acts as the representative of the City's management team, and that there is provision for appointment of one member of the public to the Committee. NEXT STEPS: It was concluded that no formal action on this topic was needed. 2. FOCUS GROUP MEETINGS MAIN POINTS: There was lengthy discussion of modifications to Amy Coffern's draft letter to the Focus Group participants, timely delivery of the letters, the method to be used and the wording of a message to notify department and division heads and the immediate supervisors of participants, and how to follow up with individuals to assure attendance. CONCLUSIONS/DECISIONS: Sue will revise Amy's participant letter, send it electronically to the members for comments and aim for their distribution through inter -office mail on Monday, April 27th. An electronic message will be sent to department and division heads advising them of the process and attaching a list of participants and the times of the meetings. Copies of both messages will be sent to GERC members and Amy. Members will help deliver letters to participants, if necessary; will assist with the follow-up calls on May 4 and 5; and will attend the meetings to introduce Amy and her associate and explain what the GERC is trying to accomplish. The members reviewed the list of participants and divided them into 5 groups. (See list attached.) Dennis and Sue will tabulate responses from those who cannot attend and follow up with any adjustments that are necessary. Dennis will arrange for refreshments at the Focus Group meetings, with bills handled by Sue. Sue will provide "tent" cards and marking pens. NEXT STEPS: The individuals detailed above will initiate the duties agreed upon. 3. MERCER CONTRACT MAIN POINTS: Sue advised the members that because the cost of -2- 0 0 conducting the Focus Group meetings is potentially part of a larger cost item (conducting the education program), that it may be necessary to go to bid for the larger scope of work, or the group has the option of requesting a sole source contract. CONCLUSIONS DECISIONS: Dennis and Sue will coordinate this part of the program and bring any decisions to the Committee. NEXT STEPS: To be determined by outcome of the Focus Group Meetings. ITEMS FOR FUTURE DISCUSSION I. Pension Investment Seminar/Public Benefit Plans Workshop 2. 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.) 3. Possible involvement of GER Plan in the 401(a) deferred compensation plan. 4. Plan improvements A. Review in June. See November 1, 1990 minutes and October 29, 1990 letter from Don Mazanec for costs. B. Rule of 80 5. 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 Thursday, May 7th at 1:15 p.m. in the Light and Power Conference Room, 700 Wood Street. The agenda will be: I. First Quarter Investment Report 2. Review Levels of Participation in 457 (3q matching) Plan. 3. Update on contacts with vested former employees. 4. Follow-up on 5-Year Vesting. Deferred 5. Resolve retirement benefit questions related to employees till June injured during employment, i.e. Sehestedt and Hattan. 6. Employee Communication Program - brief summary of preliminary observations from Focus Groups. Mollie Mercer advised the Committee that she had a hiring -related conflict that would prevent her from attending the May 7th meeting. ADJOURNMENT Angelina Powell moved and Jerry Brown seconded a motion to adjourn at 4:03 p.m. -3- #1 11 am -noon Intro: Dennis Call: Angie Andy Pineda Wendy Williams Chuck Inghram John Lindsay Judy Putnam Butch Bailey Ray Fisher Janet Robinson Steve Troy Bob Loeven Mike Gebo FOCUS GROUP SCHEDULE THURSDAY, MAY 7, 1992 #2 8-9 a.m. Intro: Mollie Call: Mollie #3 9:30-10:30 Intro: Angie Call: Sue Keith Hancock Don Chavez Anita Bueno Daniel George Janie Long Darrell Blagg Bruce Vogel Mark Abrames Dick Williams Grant Russel Jacci Peterson Larry Enquist Agnes Dix Bob Burkhardt Louise Benke Karen McWms. Syl Mireles Sue Preston Joanne Sizemore Jan Lind Janet Meisel Matt Baker -4- # 4 1- 2 pm Intro: Dennis Call: Sue Diana Royval Merle Spence Stan Suppres Lloyd Masters Elma Stull Bev Gast Steve Comfort Julie Meyers Suzi Murr Kris Bonham Fred Jones #5 2:30-3:30 pm Intro: Jerry Call: Jerry Shannon Murphy Kelly Roth Gail Rodriguez Steph Henaman Kim Fain Diane Limaye Paul Brauer Marc Bodig Steve Engemoen Don Witman Sandy Meek 0 E FORT COLLINS GENERAL EMPLOYEES RETIREMENT COMMITTEE APRIL 2, 1992 MEETING MINUTES MEMBERS PRESENT: MEMBERS ABSENT: Jerry Brown Mollie Mercer None Dennis Sumner Angelina Powell Alan Krcmarik (Member & Staff Support) Sue Wilcox (Staff Support - Secretary) Mary Crumbaker (Staff Support - Legal Counsel) Bob Eichem (Staff Support - Investments) COUNCIL LIAISON: Loren Maxey Visitors included Don Mazanec, actuary, from William M. Mercer, Inc., and Pete Dallow, Director of Administration Services. CALL TO ORDER: Chairperson Dennis Sumner called the meeting to order at 1:15 p.m. in the West Finance Conference Room on April 2, 1992. APPROVAL OF MINUTES: Jerry Brown requested that the word "item" in Item #3 on page 4 be changed to "items". He also suggested that the Council Liaison be listed separately rather than under "Members Absent", since the liaison is not normally expected to attend. Angelina Powell moved that the minutes of the March 5th minutes be approved as corrected. Mollie Mercer seconded the motion and the motion passed. ITEMS OF NOTE: Dennis welcomed Pete Dallow, Director of Administration Services. REVIEW OF DISCUSSION TOPICS: The agenda was accepted. DISCUSSION TOPICS: EQUITY INVESTMENTS MAIN POINTS: Jerry Brown missed that portion of the last meeting when Bob Eichem discussed equity investments, but Jerry and Bob covered the same material in a phone call since then. Bob offered a quick review: the bulk of retirements will occur in 12-20 years, which offers a long "window of opportunity" for realizing return on investments; and pension investments need to be made to realize long-term growth, rather than to maximuize current income. In recapping his discussion from the last meeting, Bob noted that: (1) investments in equities would be in mutual funds and based on conservative evaluations of them; (2) he proposed time -averaging investments by purchasing $100,000 per month to a maximum of $2,000,000; and (3) if there were particularly good buys, two months' investments would be made at one time. Alan noted this proposal was consistent with the financial policies City Council has adopted. Also he noted that he reviewed this proposal with Council Liaison Loren Maxey and Mr. Maxey was comfortable with it. -1- 2. 3. CONCLUSIONS/DECISIONS: Jerry Brown moved that Bob be authorized to invest up to an average of $100,000 each month in mutual funds, with a ceiling of $2,000,000. Alan seconded the motion. The motion passed. The Committee thanked Bob for his work on this issue. NEXT STEPS: Bob will begin investing in mutual funds. °SHOW AND TELL" AT TREASURY DIVISION MAIN POINTS: Bob suggested that the Committee meet at his office to observe the computer equipment and programs he uses for investing and for further explanation of how the City's investments are made. CONCLUSIONS/DECISIONS: The Committee agreed to meet at Treasury Division, 330 S. College on Thursday, April 23rd at 1:15 p.m. for a 30-45 minute demonstration and question session. NEXT STEPS: Sue will send reminder notices for the meeting. REVIEW OF PROPOSED CHANGES TO THE PLAN MAIN POINTS: Don Mazanec had sent copies of the final draft of the proposed changes to the Plan as they will be presented on the Council's Consent Agenda at their meeting on April 7th. Loren Maxey has been briefed on the proposed changes and was comfortable with them. CONCLUSIONS/DECISIONS: Alan and several Committee members plan to be present in case there are questions or comments. It was also suggested that a memorandum be sent from Alan Krcmarik explaining to all affected employees what changes are being recommended. Jerry Brown moved and Angelina Powell seconded the motion to approve the proposed changes. The motion passed. NEXT STEPS: Committee members will attend the Council meeting. Sue Wilcox will draft a memo to go out with paychecks tomorrow to explain the changes. 4. EMPLOYEE COMMUNICATION PROGRAM MAIN POINTS: The members expressed their appreciation to Angelina for the electronic list they received which outlined the demographics of the employees chosen to serve as the Focus Groups. At Ami Coffern's (of William M. Mercer, Inc.) suggestion, every 12th employee was chosen from a list showing GERP members by department. This population was then broken down into years of service, age, gender, and marital status and compared with the demographics of all City general retirement employees. This random sample came close to the city-wide figures. Angelina will consult with Amy on how to make further adjustments to get an even better representative match. CONCLUSIONS/DECISIONS: With Amy's assistance, we will draft a letter to those who were chosen and also to their supervisors, explaining the -2- 5. 6. program and asking for their cooperation. Pete will arrange for Dennis to address E-Team on April 8th to explain the program and solicit their cooperation. We will also need a contract with Mercer for this work, assuming that Council approves the appropriation. Dennis and Sue will work with Purchasing on how to do this. NEXT STEPS: Dennis will contact Purchasing for direction on the contract. Angelina will work with Amy to adjust the focus group members to more closely match the overall employee makeup. Pete will arrange with Julia Novak for time with E-Team. GERP/WORKERS COMP/DISABILITY QI PROPOSAL MAIN POINTS: Pete commented that he thought the proposal addressed in Dennis Sumner's memo (to investigate a possible link between on-the-job injuries and costs to older employees and the negative incentive to take early retirement) had merit, but he explained that City staff is currently involved in two major benefit projects: the Employee Benefits Advisory Committee is currently working to get clarification from City Council on the Total Compensation program and the GERC is beginning the Pension Education Program. Both require a lot of staff support time and Pete suggested that taking on a third major benefits program right now might spread our human resources too thin. He pointed out, too, that after the election in April, 1993, there may be as many as five new Council members, whose priorities may be different than the present members. Also, by then the other two projects might be nearing completion, allowing the Employees Benefit Advisory Committee and the GERC to address this question jointly. Pete said he would bring the subject up to the Quality Council. CONCLUSIONS/DECISIONS: It was concluded that the topic is beyond the scope of the Committee and really a management issue at this time. It will be kept as an item of interest and concern of the Committee. NEXT STEPS: Add this topic to Items for Future Discussion. PARTICIPATION IN THE 457 PLAN MAIN POINTS: The group reviewed figures Alan presented showing 691 employees in the GER Plan, and of these 151 (21.9%) do not participate in the ICMA 457 deferred comp plan. Of the 540 who do participate, 12 participate at a percentage rate lower than the 3% maximum matching level available. In other words, 172 or 31.9% of eligible employees do not benefit from the full 3% ICMA matching funds available from the City. CONCLUSIONS/DECISIONS: It was concluded it would be useful to know the dollar equivalent of employee participation in the 3% matching. This could be done by taking the actual matching contributions by the City for the 691 members and comparing it with the total 3% of these employees' salaries, which is the amount which would be contributed at 100% participation. -3- NEXT STEPS: Alan will try to obtain this information using the payroll computer system. MAIN POINTS: Dennis had sent copies (electronically) of the 1991 Annual Report and asked for changes or corrections. CONCLUSIONS/DECISION: There were a number of small changes suggested, but the overall response was that it was quite complete. Jerry Brown moved and Angelina Powell seconded the motion to approve the annual report with suggested changes. The motion passed. NEXT STEPS: Dennis will revise the Annual Report and distribute it to she members and City Clerk's Office. (Copy attached to these minutes.) AGENDA 8 SCHEDULE FOR NEXT MEETING A special meeting will be held with Bob Eichem at Finance Treasury Division, 330 S. College on Thursday, April 23rd at 1:15 p.m. to observe the computer equipment and programs used for investing. A message from Chairman Dennis Sumner on April 6th stated that immediately following Bob's demonstration, the members would meet with Amy Coffern of William M. Mercer, Inc. to comment on her draft outline of topics/questions to be covered in the focus group meetings. It is expected that this part of the meeting will be from 2:15 to 3:45 p.m. The next regular meeting will be Thursday, May 7th at 1:15 p.m. in the Finance Conference Room. The agenda will include: 1. Pension Education Program 2. Contacting vested former employees (update) 3. First Quarter 1992 Investment Report 4. Participation in the 457 Plan 5. Resolve retirement benefit questions related to employees injured during employment with the City, i.e. Sehestedt and Hattan. 6. Project to contact/reinstate 29 employees who had less than 5-year breaks in service. 7. Update from E-Team presentation and any response to GERP/Workers Comp study proposal. ITEMS FOR FUTURE DISCUSSION 1. Pension Investment Seminar/Public Benefit Plans Workshop 2. Defined contribution study. (Refer to 10/26/89 meeting minutes.) -4- Delayed until changes to the current plan have been studied and resolved. (Refer to 1/25/90 minutes.) 3. Possible involvement of GER Plan in the 401(a) deferred compensation plan. 4. Plan improvements A. Review in June. See November 1, 1990 minutes and October 29, 1990 letter from Don Mazanec for costs. B. Rule of 80 5. Resolve retirement benefit questions related to employees injured during employment with the City, i.e. Sehestedt and Hattan. 6. Bob Eichem demonstrates computer system used for investments. ADJOURNMENT It was moved and seconded that the meeting be adjourned at 3:11 p.m. -5- GENERAL EMPLOYEES RETIREMENT COMMITTEE Annual Report - 1991 This report highlights areas of activity for the General Employees Retirement Committee in 1991. These areas are: Actuarial Report for 1991, retirements in 1991, settlements of lump sum payments, and investments performance. Actuarial Report, January 1, 1991: The most notable change in the 1991 report was the disability mortality rate. Use of 1965 standard was replaced with the currently -used 1983 standard. This change increased the present value of projected benefits by $628,328 (i.e. 2.6% of the 1991 present value of projected benefits or liabilities to the Plan). This change results in a normal cost rate as a percent of payroll of 3.607% , compared with the City's current contribution rate of 3.553%. The 0.054% shortfall was not identified as an area of concern by the actuary. Retirements for 1991: Four members of the Retirement Plan began receiving retirement benefits on 1991: YEARS BENEFIT NAME DEPT. SERVED CHOSEN AMOUNT Clarice Manning Engineering 16 Stanley Elliott Finance 20 Blair Stevenson Water 11.5 Early Retirement $ 431.84/mo. Early Retirement $ 138.53/mo. 100. Joint & Surv.$ 383.57/mo. Rose Cefkin ICS 7.6 Lump Sum $4,392.53 Settlements for Lump Sum Payments: In 1990 City Council amended the Retirement Plan to authorize the lump sum distribution of pension benefits to any vested member who is separated from City employment and whose benefits do not exceed $100 per month. This revision was done at no cost to the Plan and served the purpose of reducing liabilities and the accounting effort required of the Plan. In 1991 the 59 Plan members identified as meeting these criteria were offered the option of accepting the present value equivalent of their earned retirement benefit. The results of this offer were: 5 Deceased - no benefit available to estate 1 could not be located 4 elected to remain in the Plan 49 elected to receive lump sum payments totalling $65,970.18. Settlements ranged from $297.97 to $6,296.29. The average was $1,346.33. Investments Performance in 1991: The 1991 annualized rate of return (ROR) on the retirement fund investments was 9.59%. The comparable rate of return for the Treasury Security of the closest average maturity was 6.55%. The actuarial assumption for average annual investment growth during this period was 7.5%. The Retirement Committee has been pleased with the performance of our investments and the returns realized by the City Treasury Administrator, Bob Eichem. Closing: The General Employees Retirement Committee feels it served its mission effectively and diligently in 1991. This successful year was made possible by the support the Committee has enjoyed from City Staff and Fort Collins City Council. GENERAL EMPLOYEES RETIREMENT COMMITTEE Jerry Brown, Member & Vice Chair Alan Krcmarik, Member & Staff Liaison Mollie Mercer, Member Angelina Powell, Member Dennis Sumner, Member & Chair Loren Maxey, Council Liaison Sue Wilcox, Staff Support Secretary -7- What changes do employees want in the present package? Who do employees see as responsible for their retirement planning (i.e. Social Security, City, self, etc.)? This will give us some information on how much control employees want and are willing to assume for their retirement. 3. Representation in Focus Groups should be comparable to the make-up of GERP participants. Factors such as age, years of service, representation of the various departments, sex, race/ethnic origin, job/pay line category, and education .were noted as potentially important by the GERC. Based on a favorable outcome of Dennis' discussion with Amy, Alan was - asked to add an appropriation ordinance for the focus group work to the package of Pension Plan changes being submitted to City Council for consideration on April 7. The appropriation will be for $4,500 for Mercer to conduct the focus group work. Requests for appropriations to do the employee presentations and follow-up will be submitted when the scope of work is determined. This will be based on the findings from the focus groups. Alan was asked to review the plans described above with Pete Dallow to get Pete's advice and assistance in informing the E-Team of the GERC's plans. The GERC would like the E-Team's approval and support for making employees available for the focus groups, presentations, and employee feedback (this is expected to be a survey). 2. DETAILS ABOUT 457 PLAN PARTICIPANTS MAIN POINTS: Alan informed the members that there are 691 classified City employees, of which 21.9% do not participate in the 457 (ICMA) Plan. This is 2 out of each 9 employees. Of those who do participate, some are not participating at the full 3% they are eligible for. CONCLUSIONS/DECISIONS• Perhaps education about the ICMA program can be included in employee presentations. NEXT STEPS: Alan will find out the dollar level of participation by employees, compared with what it would be if everyone chose to participate at the full 3% level. 3. VESTED FORMER CITY EMPLOYEES MAIN POINTS: Sue informed the group that she and Mollie have begun to research current addresses for vested former City employees. Out of 94 people, all but 13 have been located, and work is continuing on those 13. CONCLUSIONS/DEC ISIONS: Sue and Molli,& were t J@ed fa*4heir.progression. this. NEXT STEPS: Efforts to locate these individuals will continue. -3-