HomeMy WebLinkAboutRetirement Committee - Minutes - 10/11/1993FORT COLLINS GENERAL EMPLOYEES RETIREMENT COMMITTEE
OCTOBER 11, 1993 MEETING MINUTES
COUNCIL LIAISON: Ann Azari, Mayor
COMMITTEE MEMBERS PRESENT: ABSENT:
Jerry P. Brown Jackie Davis
Dennis Sumner Dave Meyer
Alan Krcmarik (Member & Staff Support)
OTHERS PRESENT:
Mary Crumbaker (Staff Support - Legal Advisor)
Dave Agee, Staff Committee on Pensions
Sue Wilcox (Staff Support - Secretary)
Don Mazahec of William M. Mercer, Inc. the City's actuarial firm.
Laurie Harvey and Ann Turnquist, Employee Development
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 October 11, 1993.
APPROVAL OF MINUTES: The following amendments to the September meeting
minutes were offered: Page 2 under item 2, Opal Dick's title is Senior
Buyer. In the last complete paragraph on that page, the first sentence
should read: "Opal pointed out that by using the request for proposal (RFP)
process, the Committee can increase...." On Page 3, the last paragraph
should begin "Dave Agee is working with...." Page 5 in the top paragraph,
the last sentence should read "Thirty-five people left last year.", with the
rest of the sentence deleted. Jerry Brown moved that the minutes be approved
as amended. Dave Meyer seconded the motion, which passed unanimously.
Corrected minutes will be distributed electronically.
ITEMS OF NOTE: Dennis noted that Bob Winokur had been invited to join Mayor
Azari when she met with Alan and Dennis last month. Mr. Winokur did not
attend, but apologized later and expressed his interest in the GERC's
efforts.
REVIEW OF DISCUSSION TOPICS: No changes.
DISCUSSION TOPICS:
1. MEMBER COMMENTS: There were no member comments.
2. JAD COMMITTEE REPORT
MAIN POINTS: The JAD Committee (a subcommittee of the Pension Oversight
Committee and GERC, composed of Jerry Brown, Ann Turnquist, and pave Agee)
was formed to determine and address differences and possible inequities among
the various pension plans that the City operates (other than for police
officers and firefighters). Dave Agee advised the GERC that the JAD
Committee had asked Don Mazanec of William M Mercer, Inc. to provide a fee
quote to the JAD Committee for assistance in drafting a Request for Proposal
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(RFP) for consultant to address this issue. William M. Mercer, Inc. will
not bid. Don provided a draft letter outlining the scope of services Mercer
could provide to the JAD Committee, the time frame for the work to be
accomplished, and the cost for his firm's services.
The JAD proposed a 6-month process, including open house -type events to allow
various interested groups (including GERP members) to review and comment on
the process. Mercer's fees, as well as those of the consultant, would be
paid from the GERP, the Benefits Fund, Administrative Services' budget and
contingency funds.
The process of outlining various alternatives is expected to be completed in
April, 1994. Analysis of the alternatives, along with Council/management
action, would happen during the rest of 1994. Changes to the City's pension
plans are expected to be implemented in January, 1995.
CONCLUSIONS/NEXT STEPS: It was noted that this is an ambitious schedule.
Ann Turnquist said this was a high priority for Employee Development and they
could meet the time table.
3. REPORT ON 401 LEGAL ISSUES
MAIN POINTS: The GERC asked Don Mazanec to do legal research on IRS laws
related to possible changes in retirement plan options offered to GERP
members. Specifically, the following questions asked were: (1) Could the
City offer employees the option of ,participating in a qualified blended
retirement plan consisting of both the current defined benefit plan (GERP)
and a defined contribution plan, and (2) could the City offer employees the
option to annually switch back and forth between participating in the current
plan and the blended plan described in (1) above?
CONCLUSION/NEXT STEPS: Don advised that his staff reviewed this question and
offered the following as their legal opinion on these questions:
Item 1: Yes, the City could legally offer employees the one-time option to
remain in the current plan (GERP) or convert to a blended retirement plan of
the current defined benefit plan and a defined contribution plan.
Item 2: No, the City cannot offer employees the option to periodically
switch back and forth between two different qualified plans. IRS laws do not
permit this flexibility.
4. COUNCIL WORK SESSION: TIMING/CHANGES FOR CONSIDERATION
MAIN POINTS: Two general topics were discussed. The first concerned
possible enhancements in the General Employee Retirement Plan. The second
concerned a combination of issues, including additional retirement options
for GERP members, concerns related to maintaining the numerous retirement
options provided by the City to employees (classified and non -classified),
and concerns for equity among the various City retirement plans. (These
equity concerns are of significance to the City Council and the IRS.)
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CONCLUSION/NEXT STEPS: A motion was made and approved to submit for City
Council consideration two improvements in the GERP. The first is to expand
the death benefit in the retirement plan to provide death benefits for
employees who die before age 55. The second is to decrease the amount of
time required for a member to obtain full vesting in the GERP, specifically
40% vesting at the end of two years, 60% at three years, 80% at four years,
and 100% at the end of five years of classified employment. The cost for.
these improvements would be approximately 0.25%, which the GERC felt could be
covered by existing funding of the GERP. It was concluded that this
suggestion should first be presented to the Finance Committee for their
review and comment and then to City Council for consideration.
With respect to the many issues concerning provision of additional retirement
options and related equity concerns, it was concluded that additional study
is needed. The GERC agreed with the plan as prepared by the JAD Committee.
The target of this effort will be to do needed research, communications, and
outreach to employees so that changes may be implemented in January, 1995.
5. EXECUTIVE LEAD TEAM CONSIDERATION OF WORKERS COMPENSATION/DISABILITY/
EARLY RETIREMENT STUDY
MAIN POINTS: A question had been raised about the possibility of cost
savings that could result from providing improved early retirement options.
The thought is that workers compensation and disability costs may be reduced
if employees were given more attractive options for early retirement. It was
noted that a staff group was researching this question.
CONCLUSIONS/NEXT STEPS: The GERC was pleased to hear this study is being
done. The Committee will wait to hear the findings from this study.
CONTRACTUAL h PART-TIME HOURLY EMPLOYEES
MAIN POINTS: Jerry Brown was asked by two employees to bring before the
Committee the question of whether a long-time contractual or part-time hourly
employee could "buy -in" to the GER Plan. It was explained that the GER plan
is completely funded by the City. The plan is not structured to permit
employee contributions. Likewise, the City does not contribute funds to the
Plan for non -classified employees and the plan does not contain provisions
for the City to "buy -in" for an employee's previous years of service when
they were not a member of the Plan. In short, even if there was no issue
with respect to identifying needed "buy -in" funds, the Plan, as structured,
does not have any provision to facilitate this.
CONCLUSIONS/NEXT STEPS: Jerry will relay to the employees the information
that at the time they were hired, their conditions of employment as
contractual or part-time employees provided no retirement benefits. He will
also explain that there is no mechanism in the GER Plan to make retroactive
changes related to employees' credited years of service.
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7. MEETING TIME CHANGE
MAIN POINTS: Because of schedule conflicts, the December meeting can't be
held on its regular date.
CONCLUSIONS/NEXT STEPS: The December meeting will be moved to Thursday,
December 9th at 1:15 p.m. in the 2nd Floor Conference Room of City Hall West.
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. Settlements with retired employees with low monthly benefit
payments.
4. Monitor progress by staff Pension Oversight Committee
AGENDA & SCHEDULE FOR NEXT MEETING
The next meeting will be Thursday, November 4, 1993 at 1:15 p.m. in the
Second Floor Conference Room, City Hall West. The agenda will include:
1. Plan member comments
2. JAD Update
3. Dave Meyer's report on pension seminar
4. Finance Committee Presentation
ADJOURNMENT
The meeting was adjourned at 3:45 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. Any change from that will be noted.
THURSDAY, NOVEMBER 4, 1993
THURSDAY, JANUARY 6, 1994
THURSDAY, MARCH 3, 1994
THURSDAY, MAY 5, 1994
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THURSDAY, DECEMBER 9, 1993
THURSDAY, FEBRUARY 3, 1994
THURSDAY, APRIL 7, 1994
THURSDAY, JUNE 2, 1994