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HomeMy WebLinkAboutRetirement Committee - Minutes - 03/02/1995IL FORT COLLINS GENERAL EMPLOYEES RETIREMENT COMMITTEE MARCH 2, 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) Bobbie Burnette, (Staff Support - Asst. City Attorney) Dave Agee (Staff Support - Controller) Russ Proctor of The Wyatt Company, the City's actuarial firm Jaime Mares, Director, Human Resources Department CALL TO ORDER: Chairperson Jerry P. Brown called the meeting to order at 1:19 pm in the 2nd Floor Conference Room of City Hall West on March 2, 1995. APPROVAL OF MINUTES: Jacci Peterson moved and Alan Krcmarik seconded a motion to approve the February 2, 1995 meeting minutes as distributed. The motion passed unanimously. DISCUSSION TOPICS: PLAN MEMBER/CITIZEN COMMENTS: There were no member or citizen comments. 2. HOW REQUESTS FOR RETIREMENT BENEFIT CALCULATIONS ARE HANDLED MAIN POINTS: Requests from divorcing employees for calculation of retirement benefits were discussed at the February meeting. Recently a request for a benefit calculation was received from an employee who would be eligible for early retirement in a few years. Jerry asked Jaime and Russ to explain how such requests are normally addressed. Jaime explained that the former actuary was not comfortable with having a City employee do preliminary calculations of this sort for individuals, as he felt that the City could then be liable for those figures. However, Human Resources does have a simple computer program which they use to make preliminary calculations. These are then sent to the actuary to be verified. The GER Plan normally pays for the cost of the calculations, which is about $100 each. Employees also request calculations for determining property settlements in divorce proceedings. Qualified Domestic Relations Orders (QDRO's) are not recognized by the City 401(a) plans, except QDRO's for certain child support obligations. Russ estimated the cost to complete a QDRO is $800-$1000, as they are much more work than a benefits calculation. Russ Proctor advised that the Wyatt Company has a computer program which uses Access and Word Perfect in a Windows format to do calculations and print -1- them. The actuarial tables, formula for the City's Plan, and formulas for the various benefit options would all be included. Russ said that they routinely provide this type of program to their clients for just such purposes. The cost would be about $3,000, plus the cost of the Access software. (Access would facilitate pulling payroll and longevity information from the City's records to use in the calculations.) The Wyatt program can be altered to incorporate any Plan changes. Russ offered to demonstrate the program at the next meeting. He estimated that the cost for the actuary to provide these calculations would be about $100 per request. CONCLUSION/NEXT STEPS: It was agreed that Russ will demonstrate the computer program for making benefit calculations at the next meeting. Jaime will invite Laurie Harvey of Human Resources to observe the demonstration, as she receives many of the requests for this service. If the decision is made to purchase this program, the source of funds will be determined later. 3. PRE -RETIREMENT PLANNING SEMINAR MAIN POINTS: Jaime advised the group that Suzanne Jarboe -Simpson, whose office has moved to 405 Canyon St, is organizing a seminar for employees to plan for retirement. It will begin April 19 and run for 6 weeks. The seminar is open to employees (who do NOT need to be 50 years old) and their partners and a fee will be charged. Another session will be planned for fall of '95 also. CONCLUSION/NEXT STEPS: Details will be published in the next FortNotes and advertized in other ways. 4. VALUATION REPORT AND PERSONAL BENEFIT REPORT FORMS MAIN POINTS: The schedule for the preparation of the valuation report calls for Russ to meet with various staff members to go over a rough draft at the end of April and present the draft to the Committee in May. Also discussed was the Employee Personal Benefit Report form. In the past the form has reported the employee's estimated GER Plan benefit at retirement, provided information about obtaining Social Security benefit information, and a worksheet for calculating retirement expenses. Russ provided a different form which could be used to provide this information plus estimates of benefits from City 401(a) and 457 plans. The cost to create this form could be higher than in the past, but might also be shared by the GER Plan, Human Resources, and the 401(a) and 457 plans. Russ also provided copies of the report which was prepared in conjunction with the presentation "The Sleeping Giant Awakens". Anyone who missed that presentation can borrow a copy of the report by contacting the Human Resources library, Committee members, or Sue Wilcox (-6788). CONCLUSIONS/NEXT STEPS: Russ will provide a cost estimate for the expanded personal benefit report forms and also what data he will need. Jaime can arrange to provide the additional data. Russ is verifying and correcting data for the valuation report. He will discuss it with staff at the end of April and provide the valuation report to the GERC at the May meeting. -2- 0 5. EARLY -OUT PROGRAM MAIN POINTS: Dennis reported that the Early -Out proposal was presented to the Finance Committee of City Council. The Committee seemed receptive to making formal offers to eligible employees. When the employees indicate their interest, calculations can then be prepared. If the resulting figures show a dollar savings to the City, the plan will go forward. CONCLUSIONS/NEXT STEPS: The Early Out Committee expects to have details worked out by the end of March, with the offers going out at that time. Dennis will update the GERC next month. 6. INVESTMENT REPORT - FINAL 4TH QUARTER AND YEAR-END, 1994 At the last meeting Alan distributed copies of the preliminary statistics for the Fourth Quarter/1994 Year -End Investment Report. Alan now provided the complete report to the members, which showed that the annual yield for 1994 was 7.0% Although this exceeded the investment target for 5-year treasury securities (6.71%) in what Barron's financial newspaper labeled "the worst 12 months for U.S. Bonds since record -keeping began in 1927", it was short of the Plan's assumed rate of return (7.5%). This is the first time in over ten years that earnings have fallen short of the actuarial assumption, but it was felt that allowing a year of not reaching the 7.5% assumption was preferable to making riskier investments. Because the Plan's asset -to -liability ratio is about 1.3 to 1, the Plan remains adequately funded. The report explained the long-term strategy of investments in mutual fund stocks and went into detail about the performance of the Plan's mutual fund investments. Also in the report are three proposed investment strategies for 1995: Swap low -yielding securities for those that exceed the 7.5% actuarial yield assumption. Begin investing in domestic mutual funds at $25,000/month. If there is a 10% correction in the stock market, increase the amount to $50,000/month. Set a top limit for the international mutual fund contributions until they become more stable. CONCLUSIONS/NEXT STEPS: Dave Meyer moved that the Investment Report for 1994 be accepted. Dennis Sumner seconded the motion, which passed unanimously. Copies of the investment reports are always available by contacting Sue in Finance Administration (-6788). 7. CHANGE IN APRIL MEETING DATE Due to schedule conflicts, it was agreed to move the April meeting to the 2nd Thursday, April 13th at 1:15 p.m. in the 2nd Floor Conference Room of City Hall West. -3- AGENDA & SCHEDULE FOR NEXT MEETING The next meeting will be April 13th at 1:15 p.m. in the 2nd Floor Conference Room of City Hall West. The agenda will include: 1. Demonstration of software for preliminary benefit calculations 2. Report on status of Social Security benefits 3. Draft of personal retirement benefits form 4. Early -Out Program Update ADJOURNMENT The meeting was adjourned at 2:50 p.m. FUTURE MEETING SCHEDULE: The General Employees Retirement Committee meetings are normally held at 1:15 p.m. on the 1st Thursday of each month in the 2nd Floor Conference Room, City Hall West. PLEASE NOTE DATE CHANGE FOR APRIL, 1995. THE TIME REMAINS 1:15 P.M. THURSDAY, APRIL 13, 1995 THURSDAY, JUNE 1, 1995 THURSDAY, AUGUST 3, 1995 THURSDAY, OCTOBER 5, 1995 THURSDAY, DECEMBER 7, 1995 -4- THURSDAY, MAY 4, 1995 THURSDAY, JULY 6, 1995 THURSDAY, SEPTEMBER 7, 1995 THURSDAY, NOVEMBER 2, 1995