HomeMy WebLinkAboutRetirement Committee - Minutes - 04/13/1995FORT COLLINS GENERAL EMPLOYEES RETIREMENT COMMITTEE
APRIL 13, 1995 MEETING MINUTES
COUNCIL LIAISON: Ann Azari, Mayor
COMMITTEE MEMBERS PRESENT:
Jerry P. Brown Jacci Peterson
Dennis Sumner Dave Meyer
ABSENT:
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 City's actuarial firm -
CALL TO ORDER: Chairperson Jerry P. Brown called the meeting to order at
1:24 pm in the 2nd Floor Conference Room of City Hall West.
APPROVAL OF MINUTES: Dave Meyer moved and Jacci Peterson seconded the motion
to approve the March 2, 1995 GERC meeting minutes as distributed. The motion
passed unanimously.
ITEMS OF NOTE: ##Jerry advised that Alan Krcmarik is unable to be present
because of work on industry incentives required for City Council.
##Jerry was approached by a retiree asking when the GER Committee will
consider a cost -of -living increase in benefits for current retirees. Since
the current cost of the Plan exceeds the funding level, it is unlikely the
Committee will pursue this soon. A group of retirees may petition City
Council for an increase.
##Sue Wilcox noted that Russ Proctor's name was removed from the HPDesk
system for the time being because of modem incompatibility problems.
##Laurie Harvey said that no one had signed up for the spring retirement
planning class, perhaps because there was a charge for it. She said the cost
has since been reduced for another retirement planning class in June. It was
suggested that a flyer about the class be sent along with the Personal
Retirement Benefit Report forms.
##Russ Proctor advised that his company has a new affiliation and their name
is changed to the Watson Wyatt Company.
DISCUSSION TOPICS:
1. PLAN MEMBER/CITIZEN COMMENTS: There were no member or citizen comments.
2. DEMONSTRATION OF PROGRAM TO DO BENEFIT CALCULATIONS
Russ Proctor demonstrated a computer program which will do the actuarial
calculation of retirement benefits. He explained that Human Resources could
use it to do benefit payment estimates for potential retirees, as well as the
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preliminary calculations for those leaving the Plan or terminating
employment. The advantage is that it would be programmed with the previous
years' salary records, saving the benefits administrator quite a bit of time
and system soo the data would abe updatedlso be seach epay period, rather than oto tie ito the City,s computer
once ayear.
It now costs about $100 for the actuary to do the calculations for an
individual. If the City did these preliminary calculations, it would cut the
cost to $ does
program aq require
Access software, as previously
thought. Russ priced the
rnurii�SIONS/NEXT STEPS:_ The Committee asked Russ to provide a means to
insure the security of the information and also a list of other entities
which use this program so references could be checked. Eric Bergersen, of
the Watson WyattCC Company about howwill
be he twoasked
systems consult
couldwith
be interfaced. of. the
Dennis Sumner moved and Dave Meyer seconded the motion to authorize
the
payment of one-half the $3,000 cost of this program, providing
evaluations unanimously.show that it Human Resourceslhasrve the agreed to pay foreds. The the other halfn passed
3. GERP ESTIMATE OF CONTRIBUTION PERCENTAGE FOR BUDGET PURPOSES
MAIN POINTS: The actuary's estimate of the Required Employer Contribution
percentage shows that it likely is 3.7%, which exceeds the present Actual
Employer Contribution Rate of 3.553%. The omission of 12 employees from the
valuation report a couple of years ago probably caused the Required Employer.
Contribution Rate for the following year to be underestimated. In 1994 the
Actual Employer Contribution was less than the Required Employer Contribution
for the first time. As a result, the 3.553% in the current budget probably
will be inadequate for 1996. The estimated rate of 3.7% would more closely
reflect the actual cost of the Plan.
Since the cost of the GERP contribution is a part of employees' Total
Compensation, an increase in the GERP contribution must be considered along
with other benefits costs and could mean a smaller salary increase. All
costs of benefits are estimates in the budget process, with final
reconciliation occurring later. An increase in the cost of the Plan does not
mean that there is a increase in the Plan's value.
CONCLUSION/NEXT STEPS: The consensus of the Committee members was that the
most accurate figure should be used in estimating the cost of the Plan. It
was proposed that completing the Valuation Report earlier in the year would
produce a more accurate estimate to be used in the Budget process.
The actuary and the Committee agreed to pursue earlier Valuation report
preparation next year.
4. REPORT ON PRESENTATIONATUS OF & PERSONALIAL RETIREMENTYBENEFITTREPORTPOTENTIAL EDUCATIONAL
FORMS
MAIN POINTS: When Russ presented the Sleeping Giant program, he alerted
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those attending to the concern that future Social Security benefits may be
less than those currently received. The Committee is concerned that
employees, especially younger employees, are not aware of this possibility
and thus are not taking steps to compensate for the projected difference
between current and anticipated future Social Security benefits. Various
methods of providing this information to employees (and the cost of each)
were discussed.
CONCLUSION/NEXT STEPS: Russ Proctor will draft an article describing the
situation for a Benefits Newsletter to be published May 12, or for a future
FortNotes. The GERC will distribute the 1994 Personal Retirement Benefit
Report forms in the current format, but with several small changes, and they
will include the reduced projected benefit for Social Security. Human
Resources will consider distributing flyers for the retirement planning
workshops along with the 1995 Personal Benefit Report forms.
During the summer, the Committee will begin working on a new format for the
Personal Benefit Report form, which in 1996 could provide employees with
information on GERP benefits, Social Security benefits, and ICMA benefits.
It might also show a comparison between the total of these benefits and the
estimated income the employee will need at retirement.
5. EARLY -OUT RETIREMENT OPTION UPDATE
MAIN POINTS: Those employees with 20 years or more of service with the City
were sent a memo outlining an Early Retirement Option. These individuals
have until May 16th to indicate an interest in this option, which includes
payment of .45 months' salary and benefits per year of service (up to a
maximum of 13.5 months' salary and benefits) and access to medical insurance.
Staff will review the costs for those who are interested and determine if it
is "a good business decision for the City".
CONCLUSIONS/NEXT STEPS: The process will continue as outlined above.
6. REVISIONS TO BENEFIT ELECTION & LUMP -SUM PAYMENT FORMS
MAIN POINTS: Sue presented near -final drafts of forms Plan Participants
complete to elect their retirement benefit or lump -sum payment. She and Russ
Proctor had reviewed the forms used by The Watson Wyatt Company, made some
format and wording changes, and forwarded them to Asst. City Attorney Bobbie
Burnette. Ms Burnette's comments have been incorporated, and Sue asked for
the Committee's review and comments.
CONCLUSIONS/NEXT STEPS: The Committee members reviewed the forms and
directed Sue to complete the proposed changes and begin using the new forms.
AGENDA & SCHEDULE FOR NEXT MEETING
The next meeting will be May 4th at 1:15 p.m. in the 2nd Floor Conference
Room of City Hall West. The agenda will include:
1. Plan Member/Citizen Comments
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2. Death Benefit Interpretation
3. Investment Report, First Quarter, 1995
4. Top -End Limit for International Investments
5. Valuation Report Draft
6. Other Business
ADJOURNMENT
The meeting was adjourned at 4:05 p.m.
FUTURE MEETING SCHEDULE:
The General Employees Retirement Committee normally meets at 1:15 p.m. on the
1st Thursday of each month in the 2nd Floor Conference Room, City Hall West.
THURSDAY, MAY 4, 1995
THURSDAY, JULY 6, 1995
THURSDAY, SEPTEMBER 7, 1995
THURSDAY, NOVEMBER 2, 1995
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THURSDAY, JUNE 1, 1995
THURSDAY, AUGUST 3, 1995
THURSDAY, OCTOBER 5, 1995
THURSDAY, DECEMBER 7, 1995