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HomeMy WebLinkAboutRetirement Committee - Minutes - 06/01/2000Genera ployees Retirement Plan . City of Fort Collins FORT COLLINS GENERAL EMPLOYEES RETIREMENT COMMITTEE JUNE 1, 2000 MEETING MINUTES COUNCIL LIAISON: Mayor Ray Martinez COMMITTEE MEMBERS ALL PRESENT: Michele Hays -Johnson, 416-2158 Alan Krcmarik, 221-6788 Susan Lehman, 221-6813 Approved July 13, 2000 Dottie Nazarenus, 204-4429 Bill Switzer, 221-6713 Terry Van Cleave, 221-6321 OTHERS PRESENT: - Vincent Pascale, Deb Weedman (Staff Support — Human Resources) Greg Tempel, (Staff Support — Legal) Julie Depperman, (Staff Support — Investments) Sue Wilcox, (Staff Support — Clerical) CALL TO ORDER: Chairperson Susan Lehman called the meeting to order at 1:35 PM. ITEMS OF NOTE: Susan welcomed new member Michele Hays -Johnson of the Utilities Department. She fills the position held by Jim Hume, former Committee chairperson from Purchasing, whose term had expired. Jim will to continue to place Committee and Plan information on the Plan's Web page. APPROVAL OF MINUTES: Alan Krcmarik distributed the draft minutes for the May 4, 2000, meeting. Under Item 2 in paragraph 2, the Committee decided to further summarize how hours are recorded on time sheets. Bill Switzer moved that the minutes be approved as amended and Alan seconded the motion. The Committee approved the minutes unanimously (6-0). DISCUSSION TOPICS: 1. PLAN MEMBER(S) COMMENTS: No comments. 2. RETIREMENT PHILOSOPHY MAIN POINTS: At the May meeting, Alan had distributed copies of the Committee Retirement Philosophy contained in a January 8, 1997, letter from Watson Wyatt to former Committee chairperson Jerry P. Brown. Alan noted none of the Council -appointed members serving on the Committee at that time are still on the Committee. Alan briefly reviewed the history of the Retirement Philosophy. He noted the enhancements and changes that the Committee was working on at that time and which have now been implemented. Since the current members are all relatively new, he suggested they may want to discuss the philosophy statement. 300 LaPorte 1venue • P.O. Box 580 • Fort Collins, CO 80522-0580 • (970) 221-6788 • FAX (970) 221-6782 GERC Meeting Minutes June 1, 2000 Page 2 of 4 The Committee discussed the current contribution rate and its changes over time. Michele asked if there has been follow up to the "Next Steps" part of the philosophy letter. In response to Item 3 "Understanding" [the Plan], Alan related some of the education programs the Committee has provided in the past. He noted that the Plan's lump -sum option [Item 6, "Payout Options"] evolved because some Plan members viewed the original Plan as paternalistic. Vincent Pascale commented that in general City employees already do well in response to Item 1 "Encourage employees to save" [for retirement]. According to an ICMA Retirement Corporation representative, City employees have a higher than average participation rate in the Retirement Corporation programs, indicating they are inclined to save for retirement. Alan suggested since the Plan will have a new actuarial consultant soon, some of the "Next Steps" questions would be a good starting point for discussions. He mentioned that in a meeting with the representatives of the new actuarial firm, they suggested that the Plan change from an aggregate actuarial cost method to the "entry age" normal cost method. The Committee may want to review other assumptions used in the current valuation report. CONCLUSION AND NEXT STEPS: The members indicated they would like to continue discussing the philosophy as they learn more about the Plan and the other issues on the work plan. Alan indicated that the actuary contract may be worked and the agreement signed in time for the new firm to participate in the August meeting. Watson Wyatt will continue on a month -to -month basis until the agreement is in place and they can transfer Plan data to the new actuary. 3. EDUCATION PLAN FOR EQUITY BETWEEN FULL-TIME — PART-TIME EMPLOYEES MAIN POINTS: Alan distributed copies of the revised Issues Letter, which addresses why the Committee is recommending a change in the calculation of service credit. The Committee discussed how and when to distribute this information to all the Plan members. Greg Tempel suggested that the Committee might want to discuss this issue with the new actuary. It was also suggested that if the proposed change is recommended by the Committee to City Council for adoption, the implementation date be set for January 1, 2001 to provide for a smooth transition. CONCLUSION AND NEXT STEPS: The Committee agreed that because this issue affects so few people, that it would be more effective to send the Issue Letter to all Plan members, solicit feedback, and then provide education sessions as needed. Susan will draft a cover letter to go with the Issue Letter, as well as a form for members to provide feedback about the issue or to complete if they have questions or concerns. Susan will send a copy of the draft to the Committee for review. Watson Wyatt will need to revise the charts to go out with the Issue Letter. Inquiries and questions will be returned to Susan, although other Committee members or staff may provide the responses. A set of labels for Plan members will be requested and an individual letter will be distributed with the Plan member's paycheck. For reference, minutes of past meetings can be made available upon request. GERC Meeting Minutes June 1, 2000 Page 3 of 4 4. BENEFIT CALCULATIONS AFTER JANUARY PAY ADJUSTMENTS MAIN POINTS: Deb Weedman and Julie Depperman are continuing to gather data for the proposed benefit calculation method. They are also creating a data base to be used by both the City support staff and the new actuary for the current Plan benefit calculation. Deb noted that in order to capture all of the data, a great deal of research of old pay records needs to be done, including obtaining files currently held in permanent storage off -site. The firm storing the records will retrieve them and deliver them to the City and return them to storage afterwards, but there is a fee. In addition, an individual needs to devote a significant amount of time to complete this records review process. Deb suggested that a temporary clerk or intern be used for the job. Both providing the off -site records and a temporary worker will mean expenses and Deb asked if these could be charged to the Plan? Greg stated that the "Prohibited Transactions" provisions of ERISA may prevent the Committee from paying the City for services rendered in administering the Plan. Greg recommended that legal advice from an attorney specializing in pension law be obtained if the Committee wanted to further explore this option. The legal issues surrounding this option are complicated and involve an analysis of the applicability of ERISA and the law of fiduciary obligations. Greg offered to arrange to obtain the legal advice if the Committee so desired. Alan indicated he thought the tasks could be accomplished by City staff in a timely manner. CONCLUSION AND NEXT STEPS: Staff from the Finance Department and Human Resources will complete the research. No additional expenses are expected to be incurred by the Plan. 5. UPDATE ON BENEFIT FOR DECEASED DEFERRED VESTED EMPLOYEE MAIN POINTS: Greg reported that he had contacted the attorney for the parents of a deceased employee who had a deferred vested retirement benefit, in order to determine the status of a trust agreement being established for the deceased employee's son. The attorney reported that everyone had signed the agreement except the bank which will handle the trust. The attorney will check with the bank and then be in touch with Greg. CONCLUSION AND NEXT STEPS: There has been no distribution of the benefit yet and Greg expects to ask the Committee to determine this death benefit at the next meeting. 6. KRATZ DOMESTIC RELATIONS ORDER MAIN POINTS: Greg reported after the May meeting, Vincent provided Bob Kratz and his former spouse with the Committee's decision which ruled that the Kratz Domestic Relations Order did not meet the requirements of the Plan. Greg and Vincent then met with the former spouse and at the same time conducted a conference call with Mr. Kratz and Mark Sanford of Watson Wyatt. Mark walked everyone through the correct process and forms. Both parties expressed agreement with the proposed forms and Greg completed them for the couple. Both parties have been sent the forms for their signatures. CONCLUSION AND NEXT STEPS: Staff and the Committee have no further action to take unless and until another domestic relations order is submitted to it for consideration. GERC Meeting Minutes June 1, 2000 Page 4 of 4 7. JULY MEETING DATE CHANGED MAIN POINTS: Several people had conflicts on July 6 due to the July 4 holiday. Alan moved to change the meeting date to July 13 and Bill Switzer seconded the motion. The motion passed unanimously (6-0). CONCLUSION AND NEXT STEPS: The Committee will convene on July 13 at 1:15 PM. This meeting will be held in Conference Room A at 281 N. College Avenue. The tentative agenda included the following: 1. Citizen Participation and Plan Member Comments 2. Consider approving the June 1, 2000, minutes 3. Discussion of Retirement Philosophy 4. Full-time — Part-time Issue Education Program 5. Benefit Calculations After January Pay Adjustments 6. Action on Beneficiary Designation for Deceased Member 7. Status of Kratz Domestic Relations Order 8. Monthly Investment Report ADJOURNMENT: Susan adjourned the meeting at 3:05 PM. GERC AND GERP WEB PAGE ADDRESS: httl)7//www.ci.fort-collins.co.us/CITY HALLIBOARDS COMMISSIONS/RETIREMENT/index.htm FUTURE MEETING SCHEDULE: The Committee normally meets at 1:15 p.m. on the first Thursday of each month in the Council Information Center, City Hall West. The next scheduled meeting will be Thursday, July 13th, 2000, at 1:15 PM. The Committee will hold remaining meetings for 2000 as shown below: THURSDAY, JULY 13, 2000 THURSDAY, AUGUST 3, 2000 THURSDAY, SEPTEMBER 7, 2000 THURSDAY, OCTOBER 5, 2000 THURSDAY, NOVEMBER 2, 2000 THURSDAY, DECEMBER 7, 2000