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HomeMy WebLinkAboutRetirement Committee - Minutes - 02/06/1992• FORT COLLINS GENERAL EMPLOYEES RETIREMENT COMMITTEE FEBRUARY 6, 1992 MEETING MINUTES MEMBERS PRESENT: MEMBERS ABSENT: Jerry Brown Mollie Mercer None Angelina Powell Dennis Sumner Alan Krcmarik (Member & Staff Support) COUNCIL LIAISON: Sue Wilcox, Staff support secretary Loren Maxey Mary Crumbaker, Staff support - legal Bob Eichem, Staff support - investment Visitors included Don Mazanec of William M. Mercer, Inc., who brought with him a Mercer associate, Amy Coffern. Pete Dallow, head of Administrative Services was also joined us for part of the meeting. CALL TO ORDER: Chairperson Dennis Sumner called the meeting to order at 1:15 p.m. APPROVAL OF MINUTES: Angelina Powell provided some alternative wording for Item 1, Amendment 3 of the January 9, 1992 minutes, to make it clearer. Dennis suggested that since the present wording of this item is correct, that the clearer wording be inserted in this meeting's minutes instead. This was agreeable and Mollie Mercer moved that the January 9th minutes be approved as distributed. Jerry Brown seconded the motion and the motion carried. • ITEMS OF NOTE: Dennis noted that he and two other GERC members (representing other boards and commissions) were present at the Mayor's breakfast. Suggestions were solicited on how to improve communication between the Council and the boards and commissions. REVIEW OF DISCUSSION TOPICS: Dennis recommended an agenda order that maximized staff support and visitors' time with the Committee. DISCUSSION TOPICS: Open Items 1. REVIEW OF PROPOSED ADMINISTRATIVE AMENDMENTS: General Information MAIN POINTS: The schedule for implementation of the proposed administrative amendments was revised as shown below. With revisions to the Plan, Mollie would like to schedule a re -write of new employee retirement plan booklets. C_O_NCLUSIONS/DECISIONS• Before March 5th meeting - Don will have changes to the GERC members. March 5th - GERC will make final changes and approve amendments • to be sent to Council. -1- E • February 27th - Final draft for agenda process and for Dennis and Alan to discuss with Loren Maxey. March 17 - Council to consider changes on first reading. NEXT STEPS: Don will have the complete draft of Plan amendments with all the new changes highlighted for the next meeting. With approval by Council in a March -April timeframe, employee booklets could be re -written and printed by May. Amendment 1. LONG-TERM DISABILITY VS WORKERS COMPENSATION QUESTIONS MAIN POINTS: (No change from December 19th minutes.) This defines temporary total disability and partial permanent disability. How does the Plan handle service credit for these disability types? CONCLUSIONS/DECISIONS: In the current Plan, the question of service credit for Worker's Comp disability is not defined. For parity, the question is being addressed and recommendations will be made for restating the Plan. NEXT STEPS: Mary will move the definitions to various sections. In the area of credited service, she will remove the "under age 65" on pages 2 and 3. Don will review Article 9, Section 1 on Severance Benefits and apply them to disability. Amendment 2. CLARIFICATION OF MEMBERSHIP EXCEPTIONS • MAIN POINTS: (No change from December 19th minutes.) Several years ago a number of employees were moved to "unclassified" positions, but elected to remain in the GER Plan. That group of employees needs to be considered in the language when amending the Plan. CONCLUSION/DECISIONS: They need to be referenced in the plan. NEXT STEPS: Mary will draft wording to include the 18 (+ or -) employees who elected to remain in the GER Plan despite their move to "unclassified" positions. She will need a list of the individuals and Mollie Mercer in Employee Development will provide it. Mary may move this reference to another part of the plan. Amendment 3 CHANGE IN BREAK IN SERVICE MAIN POINTS: The Committee is considering whether to recommend a change in the Plan to give current employees, with breaks in service greater than one and less than five years of service, credit for the earlier employment period. Mollie has revised her list of employees with breaks in service of less than five years to 29 people. Don presented the financial impact of granting vesting to those 29 people, which was .064% or $12,000. CONCLUSIONS/DECISIONS: The Committee agreed, given financial impact, that they would recommend a change in the Plan giving service credit to • returning employees with breaks in service of less than five years. -2- • NEXT STEPS: Include this change (allowing vesting for former employees who have a break in service of less than five years) with the other changes to be recommended to Council. Amendment 4 PAYMENT DATE FOR MONTHLY BENEFIT MAIN POINTS: No change from October 21, 1991 minutes. CONCLUSIONS/DECISIONS: NEXT STEPS: Amendment 5 SPOUSAL CONSENT REQUIREMENT MAIN POINTS: No change from October 21, 1991 minutes. CONCLUSIONS/DECISIONS: NEXT STEPS: Amendment 6 ONE-YEAR DELAY FOR LUMP -SUM PAYOFFS MAIN POINTS: No change from October 21, 1991 minutes. CONCLUSIONS/DECISIONS: • NEXT STEPS: Amendment 7 ELIMINATE AUTHORITY TO ACCEPT QDRO MAIN POINTS: No change from October 21, 1991 minutes. CONCLUSIONS/DECISIONS: NEXT STEPS: Amendment 8 STATEMENT OF GOVERNMENT PLAN MAIN POINTS: No change from January 9, 1992 minutes. The Plan does not specify that it is a government plan. This omission may create difficulties. CONCLUSIONS/DECISIONS: The fact that this is a government plan needs to be specifically stated. NEXT STEPS: Mary will include this statement. 2. STANDING RULES MAIN POINTS: Angelina Powell presented a first draft of Standing Rules for the GERC. Members suggested various changes and additions. Pete is Dallow attended to discuss the roles that various support staff personnel -3- • play. Administrative staff support the various retirement boards. With the variety of retirement boards and their needs, an effort is being made to identify roles and responsibilities of administrative staff, standardize issues where feasible, and offer consistency where feasible. With completion of that effort, a change may be made to the staff support offered GERC. Pete also introduced the idea that perhaps the Committee could be using the Quality Improvement Program to facilitate the work of the committee, including consideration of the Defined Contribution plan for the GER Plan. CONCLUSIONS/DECISIONS: Pete felt that the staff support positions provided valuable assistance to the work of the Committee and should be included in the Standing Rules. Details connected with the election of officers and a mechanism to allow past members to participate on a voluntary basis will be included. NEXT STEPS: Pete will review the proposal and bring some suggestions to the Committee. Angelina will revise the rules per the suggestions of the members and distribute them for further comment. 3. PARTICIPATION IN THE 457 PLAN MAIN POINTS: Consideration of this item was postponed till the March 5th meeting. • CONCLUSIONS/DECISIONS: No action at this time. NEXT STEPS: This item will be deferred to the March meeting. DISCUSSION TOPICS: New Items 1. FOURTH QUARTER & YEAR-END INVESTMENT REPORT MAIN POINTS: Bob Eichem explained the differences between realized gains and losses and unrealized gains and losses for asset valuation purposes at 12/31/91. His report showed that the GERP's rate of return for the fourth quarter was 9.55% and the year-end rate of return was 9.59%, despite an extremely volatile year due to the Gulf War, the breakup of the Soviet Union and the recession. Bob again asked the Committee for a half hour of its time to address the possibility of investing in stocks as well as bonds to capitalize on an even greater rate of return. He asked if they would be interested in observing a demonstration of the computer programs he uses for investments. CONCLUSIONS/DECISIONS: The members were very pleased with the earnings and commended Bob for a job well done. They agreed to add the topic of stock investments to March's agenda and proposed scheduling a later meeting at Bob's office so that he can demonstrate the computer programs. 0 -4- • NEXT STEPS: Discussion of stock investments was added to the March 5th agenda. A demonstration of the investment programs was added to Items for Future Discussion, possibly at the April meeting. 2. EMPLOYEE COMMUNICATION & EDUCATION MAIN POINTS: Educating employees about the current plan was considered essential before any attempt was made to discuss such things as defined contribution. Amy Coffern discussed in depth the pros and cons of various options the Committee might consider including in such a program. She strongly suggested that the Committee create an Education Timeline which would list the various activities and tentative dates. The education program would include information on calculating the amount of money a retiree would need and the benefits available from the GERP, as well as Social Security and other sources. Incentives and conditions to encourage participation were discussed, as well as the kinds of services that could be provided in-house (graphics, video, etc.) or through competitive bids. Dennis proposed a slogan and some poster ideas. CONCLUSIONS/DECISIONS: Amy was asked to provide estimates of time and costs for a number of items for the next meeting. Presentation may be made to E-Team before going to employees, and E-Team's support will be sought for making presentations to employees. • NEXT STEPS: Amy will bring to the next meeting details and costs for a video script, a brochure or pamphlet, personalized worksheets, and a type of "projector slide rule". The Committee will need to put together an education program timeline to include 20 meetings with employees (spouses welcome), two spouse meetings, focus groups and possibly a survey. 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. 41 -5- Cl • 6. Rule of 80 7. Bob Eichem demonstrate computer system used for investments (April?). AGENDA & SCHEDULE FOR NEXT MEETING The next meeting will be March 5th at 1:15 p.m. in the Finance Conference Room. The agenda will include: 1. Final Draft of Administrative Changes 2. Employee Education Program 3. Standing Rules Draft 4. Discussion of request to allow investment in stocks. 5. Rate of Participation in 457 Plan (ICMA). ADJOURNMENT The meeting was adjourned at 2:55 p.m. 10