HomeMy WebLinkAboutRetirement Committee - Minutes - 08/04/1994FORT COLLINS GENERAL EMPLOYEES RETIREMENT COMMITTEE
AUGUST 4, 1994 MEETING MINUTES
COUNCIL LIAISON: Ann Azari, Mayor
COMMITTEE MEMBERS PRESENT: ABSENT:
Jerry P. Brown Jacci Peterson
Dennis Sumner Dave Meyer (arriving about 3:30 pm)
Alan Krcmarik (Member & Staff Support)
OTHERS PRESENT:
Sue Wilcox (Staff Support - Secretary)
Laurie Harvey, Employee Development
Don Mazanec of William M. Mercer, Inc. the City's actuarial firm.
CALL TO ORDER: Chairperson Dennis Sumner called the meeting to order at 1:15
p.m. in the 2nd Floor Conference Room of City Hall West on August 4, 1994.
APPROVAL OF MINUTES: Jerry P. Brown moved and Alan Krcmarik seconded a
motion to approve the July meeting minutes as distributed. The minutes were
approved unanimously.
ITEMS OF NOTE: Dennis welcomed newly -appointed member Jacci Peterson, who is
a Credit and Collection Representative in the Customer Information Service
section of the Finance Department. Jacci fills the position formerly held by
Jackie Davis. Dennis also advised that Dave Meyer had a meeting conflict at
his office and would arrive at today's meeting later.
Also, It was noted that Mary Crumbaker, who resigned from the City, expressed
her thanks for the going -away gift from the GER Committee.
REVIEW OF DISCUSSION TOPICS: Because Dave Meyer was unable to attend the
first part of the meeting, the review of the Actuarial Report will be placed
last on the agenda. Bob Eichem asked to be added to the agenda with an item
related to equity investments.
DISCUSSION TOPICS:
1. MEMBER COMMENTS:
Jerry P. Brown passed on to the Committee a request from two Plan members
that the Committee not forget to add the Rule of 80 to the Plan. Members
recalled that this provision would add approximately 2% of payroll to the
cost of the Plan, which would be a significant increase to the current 3.553%
cost of the Plan. Also, unless all employees are involved in the Rule of 80,
the cost goes up, and it might be very difficult to get consensus for this
change.
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2. JAD CONMITTEE REPORT
Jerry reported that there had been no meeting of the JAD (Jerry, Ann
Turnquist, Dave Agee) Committee since the Wyatt Report was issued in April.
Committee members expressed their continued concern that action be taken to
implement the recommendation referred to in the Wyatt report as "457 Plan
Versus MPP Choice".
Laurie Harvey reported that the feeling in Employee Development was that
implementing the change recommended by the Wyatt Report could be delayed, as
there was no urgency for action. She noted further that Ann Turnquist had
advised her that Purchasing may want to go through a Request for Proposal to
determine if ICMA should be maintained as the City's 401/457 funds
administrator.
Members of the GERC expressed concern at Employee Development's view on
proceeding with Wyatt's recommendation. Members advised Laurie that the GERC
had high expectations of timely action on offering the Wyatt recommendation
to GERC members. Employees have expressed a high level of interest in this
option, the GERC has expressed a high level of interest in the option, and it
has been
beendansitemhange through of significanthe Wyatt discussionoinss. the GERC rs for a lso
forthe
last year and the GERC had the impression Employee Development understood and
supported timely action on this change.
CONCLUSIONS/NEXT STEPS: With respect to the timing questions, Laurie
offered to follow up with Ann Turnquist in Employee Development on the
concerns expressed by the GERC.
With respect to the Purchasing RFP questions, members offered the thought
that these were really two separate issues (offering the 0457 Plan Versus MPP
Choice" and conducting an RFP process for fund administrator). The Committee
felt that combining them at this point would only serve to confuse people and
unnecessarily delay offering the 401 to GERP members. Alan agreed to follow
up with Jim O'Neill to get clarification on Purchasing's advice on the this
issue.
3. BENEFICIARY DESIGNATION FORMS
%am
NTS: It was agreed that all employees in the GERPlan should
a beneficiary designation form to be kept on fileat Employee
ent. The death benefit is 50% of what the employee would be eligible
ve at age 55. The spouse is the automatic recipient. The signature
ary is required only if the married employee names someone other than
and the spouse agrees. Unmarried employees may name abeneficiary.
uggested that we not institute this initial beneficiarydesignation
ame time as the Cafeteria Benefits sign-up period, as it could add
complication to the cafeteria process.
CONCLUSION/NEXT STEPS It was agreed to distribute the new formts , along with
an ich
Payroll now has. Don Mazanecory memot with hwill esend a copyrsonal of the final iform to Sueorms and
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she will distribute a draft of the accompanying memo to all members and
Laurie for final review. The distribution will go out with the paychecks on
August 19th. Questions will be routed to Employee Development.
4. RFP FOR ACTUARIAL SERVICES
MAIN POINTS: The bids for actuarial services are due on August 19th. The
Selection Committee (Opal Dick, Edna Hoernicke, Dave Agee, Dave Meyer, and
Laurie Harvey) will review the applications, conduct the interviews; and make
a recommendation to Jim O'Neill, who will make the final decision per the
normal purchasing process.
CONCLUSIONS/NEXT STEPS: The GER Committee will meet the selected firm at its
next meeting on Thursday, September 8th at 1:15 p.m.
5. EQUITY INVESTMENTS
MAIN POINTS: Combined contributions and investment earnings increased the
value of the GER Plan by $1.8 million per year in each of the past four
years. Efforts continue to diversify the portfolio by moving some
investments from fixed income investments (bonds) to equities and the GERP
portfolio is approaching the 25% limit on equity purchases set by the
Committee. Bob Eichem, Treasury Administrator, asked the Committee if it
would consider adjusting this target. Don Mazanec noted that most public
funds contain 40-50% invested in equities and that the PERA (State of
Colorado) fund actually has 65%. It was suggested that a range of 25-35% of
total GERP investments be composed of equities, both domestic and
international. The Investment Officer would be given flexibility within that
range, and this target can be revisited later if the 35% limit is approached.
CONCLUSIONS/NEXT STEPS: Jerry P. Brown moved that 25-35% of the par value of
the total fund be targeted for mutual fund equities, including the
international funds. Alan seconded the motion, which passed unanimously.
6. INTERPRETATION OF CHANGE IN DEATH BENEFIT
MAIN POINTS: A draft of the interpretation of the change in the death
benefit was discussed. Dennis pointed out that because the benefit for an
unmarried employee is based on the employee's age, there is no variation.
However, the examples for married employeed reflects how the age of the
spouse affects the benefit. He emphasized that the interpretation is
actually for internal use by the Committee.
CONCLUSIONS/NEXT STEPS: The consensus was to accept the last draft. Sue
will distribute copies to the members and to Laurie Harvey and Don Mazanec
also.
7. ACTUARIAL REPORT - JANUARY 1, 1994
MAIN POINTS: Don Mazanec presented the Actuarial Report detailing the
condition and makeup of the General Employees Retirement Plan as of January
1, 1994. He noted that the Plan on that date contained 938 members, an
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increase of 4.6% and the actuarial value of the assets grew by $2,147,247, an
increase of 9.8%. He pointed out that the number of employees leaving City
employment last year was very small (2.5%). The average age of employees is
relatively high at 41.3 years, reflecting the small employee turnover in
1993. Expenses for the Plan are kept at a very low level due to the internal
investment of Plan funds.
CONCLUSIONS/NEXT STEPS: Jerry P. Brown moved and Dave Meyer seconded the
motion to accept the actuarial report as distributed. The motion passed
unanimously. Copies of the Actuarial Report are available for anyone who
would like to review it. Contact Sue Wilcox at -6788 or a Committee member
to see a copy.
ITEMS FOR FUTURE DISCUSSION
1. Possible seminars or workshops to increase GER Committee members'
knowledge of their roles and responsibilities.
2. GERP / Workers Comp / Disability Proposal to E-Team
3. Method to Report Blended Yields (Bonds & Equities) on Investments
AGENDA & SCHEDULE FOR NEXT NEETING
The next meeting will be September 8th at 1:15 p.m. in the 2nd Floor
Conference Room of City Hall West. The agenda will include:
1. Plan Member comments
2. Investment Report - 2nd Quarter, 1994
3. Meeting with recommended firm for actuarial services
4. JAD Report
5. Review of beneficiary designation process.
6. Election of officers and review of Standing Rules
The meeting was adjourned at 4:25 p.m.
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 SEPTEMBER. THE TIME REMAINS 1:15 P.M.
THURSDAY, SEPTEMBER 8, 1994
THURSDAY, NOVEMBER 3, 1994
s=
THURSDAY, OCTOBER 6, 1994
THURSDAY, DECEMBER 1, 1994