HomeMy WebLinkAboutRetirement Committee - Minutes - 05/04/19950
FORT COLLINS GENERAL EMPLOYEES RETIREMENT COMMITTEE
MAY 4, 1995 MEETING MINUTES
COUNCIL LIAISON: Ann Azari, Mayor
COMMITTEE MEMBERS PRESENT: ABSENT:
Jerry P. Brown Jacci Peterson
Dennis Sumner Dave Meyer
Alan Krcmarik (Member & Staff Support)
OTHERS PRESENT:
Sue Wilcox (Staff Support - Secretary)
Dave Agee (Staff Support - Controller)
Laurie Harvey (Staff Support - Benefits Administrator)
Russ Proctor of The Watson Wyatt Company, the GERP's actuarial firm
CALL TO ORDER: Chairperson Jerry P. Brown called the meeting to order at
1:20 p.m. in the 2nd Floor Conference Room of City Hall West.
APPROVAL OF MINUTES: Russ Proctor wished to clarify that the "reduced
projected benefit for Social Security" described in Item #4 of the April 13th
minutes is a logical result of changing the normal retirement age from 65 to
67 years. This will affect workers who were born after 1960. Dennis Sumner
moved and Jacci Peterson seconded the motion to approve the April 13, 1995
meeting minutes with this clarification. The motion passed unanimously.
ITEMS OF NOTE: Dave Meyer was unable to attend due to another meeting; and
Mayor Azari has been reappointed as City Council liaison to the GER Committee
for another 2-year term.
Laurie Harvey said that Human Resources offered Retirement Planning Classes
to those who received "Early Out" letters. The cost was reduced to $36 for
the 6-week sessions. Two individuals expressed an interest in a class. It
was suggested that a flyer about the classes be sent along with the Personal
Retirement Benefit Report forms.
DISCUSSION TOPICS:
PLAN MEMBER/CITIZEN COMMENTS: There were no member or citizen comments.
2. REVIEW OF VALUATION REPORT DRAFT
Russ Proctor presented a draft of the 1995 Valuation Report and pointed out
that a number of changes in the Plan in recent years have resulted in the
need to address an underfunding situation. The underfunding situation has a
number of sources: extending the death benefit to employees under age 55,
allowing vesting after 2 years of service, inclusion of employees who were
-1-
inadvertently not represented in the valuation report several years ago,
changes in world economic conditions which reduced the income from
investments, and proposed changes in several of the assumptions used in
calculating benefits.
Several methods of addressing this were discussed in the context of Total
Compensation and included possible changes in the current budget year and
future years. In previous years some more favorable conditions resulted in
contributions to the Plan which have a current value of 5.1%, but which kept
the cost of the plan at or below the budgeted 3.553%. We are now
experiencing a "down" part of the normal up and down of any Plan, but the
Committee asserted that they are "in this for the long haul" and reiterated
that more favorable conditions will probably return. Staff and the actuary
were asked to look at gathering some additional data to help the Committee
decide on future assumptions that will more nearly reflect the GER Plan's
condition.
CONCLUSIONS/NEXT STEPS: Staff will begin a responsible analysis of the
variables that determine the percent of contribution to the GERC. Dave Agee
will analyze statistics on inflation and merit pay increases and Laurie
Harvey will review statistics on employee turnover and age at termination
using computer records since 1991. Bob Eichem will be asked to review and
evaluate where we should be moving in regard to long-term equities and also
about interest rate assumptions for investments. Staff will review the
policy on the percent of contribution to the GER Plan in relation to the
other Total Compensation components.
The target is the June meeting so that if changes are necessary for the 1996
budget process, there will still be time. Alan will work with the Budget
Committee if change is required. Jerry will also talk with Mayor Azari to
apprise her of the underfunding situation and review with her the steps being
considered to rectify it.
INVESTMENT REPORT - FIRST QUARTER, 1995 DRAFT
MAIN POINTS: Because considerable time was spent discussing the Valuation
Report draft, it was agreed to distribute the draft of the first quarter
investment report now and to discuss the final version at the next meeting.
CONCLUSION/NEXT STEPS: Full discussion of the First Quarter 1995 Investment
Report will be next month.
4. DEATH BENEFIT INTERPRETATION
MAIN POINTS: When the death benefit was extended to employees regardless of
age, there was a great deal of concern expressed about equity between married
and unmarried employees. To address this, Resolution 94-79 was passed and an
interpretation written to guide GERC members in how calculations would be
made to take variables in personal circumstances into account. When this
interpretation was presented to Russ Proctor of Watson Wyatt, he brought to
the Committee members a concern that the wording reflects the Plan provision
as written, but not the intent of the Committee as expressed to him.
-2-
CONCLUSION/NEXT STEPS• Sue will provide a copy of the agenda item summary
for Resolution 94-79 and Jerry will meet with Bobbi Burnette to review the
intent of the change, the actual wording of the resolution, and whether this
needs to be re -written and approved by Council.
5. TOP END LIMIT FOR INTERNATIONAL EQUITIES
MAIN POINTS: It was decided to defer this item to the next meeting, but Russ
Proctor did suggest that Committee members would be interested in the
"Wilshire Association Report", which surveys various pension plans yearly.
It shows that 38% of governmental pension plans similar to the GER Plan have
about 38% invested in US equities and 6% in international equities.
CONCLUSIONS/NEXT STEPS• This item is deferred to the June meeting.
6. REQUEST TO RE -JOIN THE GER PLAN
MAIN POINTS: Laurie Harvey has received a request from an employee who had
been a Plan member, left the Plan to accept a contractual position with the
City, and then returned to a City classified position after a period of five
years and seven months. The employee now wished to return to the Plan.
However, the members felt that the Plan document was quite clear that five
years was the maximum time allowed for such a return.
CONCLUSIONS/NEXT STEPS• Laurie would advise the employee of the Committee's
conclusion.
AGENDA 6 SCHEDULE FOR NEXT MEETING
The next meeting will be June 1st at 1:15 p.m. in the 2nd Floor Conference
Room of City Hall West. The agenda will include:
I. Plan Member/Citizen Comments
2. "Early -Out" Update
3. Investment Report, First Quarter, 1995
4. Top End Limit for International Investments
5. Follow-up - Death Benefit Interpretation
6. Review Valuation Report Assumptions/Revisions
7. Dennis Sumner's Last Meeting/Introduce New Member
ADJOURNMENT
The meeting was adjourned at 4:14 p.m.
-3-
FUTURE MEETING SCHEDULE:
The General Employees Retirement
1st Thursday of each month in th
THURSDAY, JUNE 1, 1995
THURSDAY, JULY 6, 1995
THURSDAY, SEPTEMBER 7, 1995
THURSDAY, NOVEMBER 2, 1995
e
Committee normally meets at 1:15 p.m. on the
2nd Floor Conference Room, City Hall West.
-4-
THURSDAY, AUGUST 3, 1995
THURSDAY, OCTOBER 5, 1995
THURSDAY, DECEMBER 7, 1995