HomeMy WebLinkAboutRetirement Committee - Minutes - 01/12/19950 •
FORT COLLINS GENERAL EMPLOYEES RETIREMENT COMMITTEE
JANUARY 12, 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)
Laurie Harvey (Staff Support - Benefits Administrator)
Russ Proctor of The Wyatt Company, the City's actuarial firm
Jaime Mares, Director of Human Resources Department
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 on January 12,
1995.
APPROVAL OF MINUTES: Russ Proctor noted that on page 3 of the December 8,
1994 minutes the section of the Plan document that is inconsistent and needs
changed should be Article 5, Section 2 "Early Retirement". Russ provided a
letter outlining the suggested change for review by Bobbie Burnette and
copies for future reference. This change will be included with future Plan
changes.
Russ also noted that the seminar the Wyatt Company is sponsoring in Denver
was changed to February 7th. Russ will present a shorter version of the
seminar to City of Fort Collins employees on February 2nd. Dennis Sumner
moved that the minutes be approved as corrected and Alan Krcmarik seconded
the motion. The motion passed unanimously.
ITEMS OF NOTE: Jerry met with Mayor Azari, thanked her for Council's
assistance during 1994, and advised her of the minor Plan change. He also
assured her that the GERC had raised many of the same concerns she voiced
about the Orange County, California investment losses and reassured her that
the GER Plan fund investments are not leveraged and are very diversified, the
two major errors in Orange County. Mayor Azari advised Jerry that she was
available to the Committee whenever needed.
Jerry also noted that all boards and commissions were asked to inform its
members about the City Dialogue effort to design the Fort Collins of the
future. He urged anyone interested to attend the City Dialogue sessions.
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DISCUSSION TOPICS:
1. PLAN MEMBER/CITIZEN COMMENTS: There were no member or citizen comments.
2. STATUS REPORT ON WORK PLAN ITEMS
Jaime Mares, Director of Human Resources, was present to speak on a number of
GERC Work Plan items.
A. Workers Compensation / Disability / Medical Insurance / GER Plan
MAIN POINTS: Jaime said that as part of the Early Out Program, that
task force had looked at a possible correlation between those employees
who might be eligible for the Early Out Program and a corresponding
incidence of injuries in older workers, but none was found.
Dennis felt that the GERC's question actually headed in a different
direction: Because there is a significant reduction in benefits for
employees who retire before age 65, workers stay on the job longer. If
these workers incur more injuries, resulting in more (and more
expensive) disability or Workers Comp claims, the economic impact may
be much greater than if retirement benefits were enhanced for early
retirees.
Jaime said that the City is not currently looking at that question and
asked to see a copy of the memo that Dennis sent to the Executive Lead
Team (EL Team) about two years ago. Russ suggested that the rate of
disability nationwide be researched for any such correlation.
CONCLUSIONS/NEXT STEPS: Sue will supply Jaime with a copy of Dennis's
memo.
B. Early -out Program
MAIN POINTS: Dennis and Jaime are part of a Task Force which has
developed a proposal to allow workers with 20 years of service to
retire early. The proposal has been revised and will be presented to
the EL Team on January 18th. If the EL Team approves the proposal, it
will then be presented to the Council Finance Committee (no date set
for that meeting). If approved by the Finance Committee, it could then
be offered to City employees with 20 years of service who are at least
50 years old. As presently configured, it would allow those opting to
retire early an opportunity to buy into the City's health insurance
plan at 130% of the active employee premium, a cost based on the
demographics of the group. Jaime did state that the proposal must
provide an economic advantage to the City ---or at least provide a
break-even situation ---or the offer would not go forward. NOTE: SEE
POST NOTE BEFORE "ADJOURNMENT".
Russ stated that even if a large number of those eligible should choose
this Early Out option and begin drawing on their GERP Plan benefits, it
would only have a small negative impact on the GER Fund. He did a test
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sample of employees age 55 with 25 years of service and found that the
program might even have a positive impact on the fund.
CONCLUSION/NEXT STEPS: Jaime and Dennis will keep the Committee
informed of the progress of this proposal and send a copy of any final
proposal to GERC members via future minutes.
C. Options for Medical Insurance Coverage for Retirees
MAIN POINTS: One point that surfaced in the GERC education program was
that employees sometimes defer retirement because they could not afford
medical coverage as retirees. The previous benefits advisor for Human
Resources advised that the City not consider a medical insurance
program for retirees as it was too expensive. However, the new medical
advisor (Don R. Heilman of the Segal Co.) is willing to look at the
issue. Jaime advised the Committee to make a formal request Human
Resources to research medical coverage for retirees and it could be
included on their work plan. It was pointed out that at age 63-1/2,
COBRA (Consolidate Omnibus Budget Reconciliation Act) provides medical
coverage for retirees, but that is currently the earliest practical
retirement age that carries medical coverage.
Russ reported that under the 401(h) section of the Internal Revenue
Code (IRC), employees can elect to set aside pre-tax funds for medical
care at retirement.
CONCLUSION/NEXT STEPS: The GERC will make a formal request that Human
Resources consider this issue. Jaime will review various retiree
medical options with the benefits advisor.
D. Total Compensation
MAIN POINTS: City Council approved the total compensation package at
the 70% percentile this year (including benefits), with the stipulation
that ways be developed to measure productivity as part of the budget
process. Jerry reported feedback from employees who feel that the
secretarial/clerical group consistently receives the lowest percentage
of salary increase (2.44% in 195). Jaime acknowledged this feeling and
stated that it reflects the prevailing labor market in northern
Colorado.
CONCLUSIONS/NEXT STEPS: Jaime felt that the focus for salaries needs
to shift to the Fort Collins market.
Policies and Procedures
MAIN POINTS: Human Resources will revise the City's Policies and
Procedures this year.
CONCLUSIONS/NEXT STEPS: Drafts will be sent to employees for review
and comments before final policies and procedures are approved.
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F. Human Resources Changes
MAIN POINTS: Along with changing the name of Employee Development to
Human Resources, the department has reorganized to accommodate
increased emphasis on benefits and assistance to departments and
divisions for hiring, etc. Sharon Roulier has filled Colleen Ahern's
position and Susanne Jarboe -Simpson is now a full-time employee.
CONCLUSIONS/NEXT STEPS• Efforts are continuing to expand the training
program beyond a half-time position.
3. FINAL REPORT ON THE MONEY PURCHASE PLAN SELECTION/IMPLEMENTATION
MAIN POINTS: There were 777 employees (including some unclassified
management personnel) eligible to elect to participate in the 401(a) Money
Purchase Plan (MPP). It appears that 82% of those chose to make the change,
which was implemented January 2nd. All new employees will automatically be
in a new, separate 401(a) money purchase plan, which will meet IRC
regulations.
CONCLUSIONS/NEXT STEPS• Russ will be looking at all of the City's retirement
plans to insure compliance with the IRC regulations as presently outlined,
when they are implemented on 1/1/96. There must be a minimum of 50 people in
each plan, although contribution amounts may differ within a plan. All the
GER Committee members thanked Human Resources, Accounting Staff, and the
Wyatt Company for a great job in educating the members, completing the
selection process, and implementing the changes.
ANNUAL REPORT - 1994
MAIN POINTS: Dennis Sumner had distributed a draft of the 1994 Annual Report
which is due January 31st. There was discussion of how much of the detailed
information about plan members who retired, received lump -sum payments,
passed away, etc. should be included.
CONCLUSIONS/NEXT STEPS• A summary of the Plan member activity will be
included in the Annual Report, which receives wide distribution. A copy of
the detailed information will be available to GERC members and placed in the
permanent GER Plan file in the City Clerk's Office. Sue will finalize the
Annual Report, distribute the final draft to members, and send to the City
Clerk by January 31st.
TRANSITION UPDATE - MERCER TO WYATT COMPANY
MAIN POINTS: Russ provided a letter requesting additional information from
William M. Mercer, Inc. in order to perform another test case to duplicate
Mercer's calculations.
CONCLUSIONS/NEXT STEPS• Dave will work with Mercer to determine the cost of
providing this information and Jerry will authorize the work if the cost is
reasonable.
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6. SEMINAR FOR GER PLAN MEMBERS
MAIN POINTS: Russ Proctor of the Wyatt Company will present a seminar called
"The Sleeping Giant Awakens" about the changes that are taking place in
retirement plans due to an aging workforce.
CONCLUSIONS/NEXT STEPS: The seminar will be Thursday, February 2, 1995 from
1 - 2 PM in City Council Chambers. GER Plan members and other interested
employees are invited to attend. The regular GERC meeting will follow the
seminar. Fliers will be distributed with paychecks on January 20th.
AGENDA & SCHEDULE FOR NEXT MEETING
The next meeting will be February 2th at 2:00 p.m. in City Council Chambers,
City Hall West immediately following the seminar presented by the Wyatt
Company. The agenda will include:
1. Plan Member/Citizen Comments
2. Investment Report - 4th Quarter and Year -End, 1994
3. Early Out Proposal Update
4. Transition Update - Mercer to Wyatt Company
POST NOTE: The EL Team approved the Early Out Proposal and referred it to
the Finance Committee, which is tentatively scheduled to meet the week of
January 30th.
ADJOURNMENT
The meeting was adjourned at 4:05 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. The February 2nd meeting is in City Council Chambers at 2:00 p.m.
THURSDAY,
FEBRUARY 2, 1995
THURSDAY,
MARCH 2, 1995
THURSDAY,
APRIL 6, 1995
THURSDAY,
MAY 4, 1995
THURSDAY,
JUNE 1, 1995
THURSDAY,
JULY 6, 1995
THURSDAY,
AUGUST 3, 1995
THURSDAY,
SEPTEMBER 7, 1995
THURSDAY,
OCTOBER 5, 1995
THURSDAY,
NOVEMBER 2, 1995
THURSDAY,
DECEMBER 7, 1995
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