HomeMy WebLinkAboutRetirement Committee - Minutes - 03/02/2000Gener*mployees Retirement Plan • „_
City of Fort Collins
FORT COLLINS GENERAL EMPLOYEES RETIREMENT COMMITTEE
MARCH 2, 2000 MEETING MINUTES
Approved, as amended, April 6, 2000
COUNCIL LIAISON: Mayor Ray Martinez
COMMITTEE MEMBERS PRESENT: ABSENT:
Terry Van Cleave, 221-6321 Jim Hume, 221-6776
Alan Krcmarik, 221-6788
Susan Lehman, 221-6813 One Committee position vacant due
Dottie Nazarenus, 484-7592 to Kevin Westhuis' resignation
OTHERS PRESENT:
Mark Sanford, Watson Wyatt Worldwide, the Plan's actuarial firm
Vincent Pascale, Deb Weedman (Staff Support — Human Resources)
Greg Tempel, (Staff Support — Legal)
Julie Depperman, (Staff Support — Investments)
Sue Wilcox, (Staff Support — Clerical)
Michele Hays -Johnson, Plan Member
CALL TO ORDER: Terry Van Cleave chaired the meeting due to the absence of Chairperson
Jim Hume. Terry called the meeting to order at 1:20 PM.
ITEMS OF NOTE: With four members attending the meeting, a quorum was present. Terry
noted two Plan members applied for the vacant Committee position: Michele Hays -Johnson
and Bill Switzer. To fill the vacancy, Mayor Martinez and another Council member will interview
the applicants in March. They will recommend one for Council to appoint in April. Should
anyone wish to comment on the applicants, they can send a letter to the City Clerk's office for
inclusion in the application review process.
APPROVAL OF MINUTES: Alan Krcmarik distributed the revised draft of the minutes for the
February 3, 2000, meeting. Alan stated in the future he would only note if Council Liaison
Martinez attended the meeting. Alan reviewed a few minor comments suggested by Committee
Members or staff. Terry Van Cleave moved that the February 3, 2000, minutes be approved
as presented and Alan seconded the motion, which passed unanimously 4-0.
DISCUSSION TOPICS:
1. GER PLAN MEMBER (S) COMMENTS: No comments.
2. PERSONAL RETIREMENT PLANNING STATEMENTS
MAIN POINTS: Mark Sanford said he called ICMA-RC to get updated information for page 4 of
the Personal Retirement Planning Statements (PRPS), but had not received an answer.
Members suggested changes to clarify wording on page 3 under Employer -Provided Benefits:
300 LaPorte Avenue • P.O. Box 580 • Fort Collins, CO 80522-0580 • (970) 221-6788 • FAX (970) 221-6782
GERC Meeting Minutes
March 2, 2000
Page 2 of 4
• A change in Paragraph A would quote the definition of Final Average Monthly Pay as
outlined in the most recent GERP Summary Book: "60 consecutive, highest -paid
calendar months in your last 10 years of eligible employment with the City."
• A suggestion to add wording in Paragraph B to Explain taking benefits from the
ICMA-RC 457 Plan before age 59-1/2 without penalty was not supported because
the Committee thought this was covered in the member's contacts with Human
Resources as the member approaches retirement.
• Paragraph C would add that both City and employee contributions are a fixed
percentage of salary. The first page shows the percentages in the box titled "ICMA-
RC Distribution."
• Any reference to ICMA should always be followed by RC (ICMA-RC), as it is the
Retirement Corporation that provides these plans.
• Also, the notice should describe QDRO as Qualified Domestic Relations Order.
CONCLUSION AND NEXT STEPS: Mark will incorporate these changes in the PRPS. He
plans to have the individual statements to Finance Administration by March 21 so Finance can
distribute them with the March 24 paychecks. Mark also mentioned that he should have a draft
valuation report for the April GERC meeting.
3. COST OF LIVING ADJUSTMENT FINAL REPORT
MAIN POINTS: Alan reported he needs to correct a few inconsistencies in the pension
payments before he can provide a final report on the Cost of Living Adjustment for pension
recipients.
CONCLUSION AND NEXT STEPS: The Committee deferred this topic until the April meeting.
4. EDUCATION PLAN FOR EQUITY BETWEEN FULL-TIME — PART-TIME EMPLOYEES
MAIN POINTS: The Committee discussed the location for the various educational sessions for
GER Plan members. Deb Weedman can provide a list of members sorted by location code
(where Finance sends the employee's check). This list will show where the most convenient
session locations would be for members. If the Committee decides to have a Watson Wyatt
staff person at the sessions, Mark said Jeff Kraft would probably be the person. Susan
suggested varying the sessions as to days of the week and times, so that employees who work
shifts can attend. The Committee defined the purpose for the meetings as:
• to educate members on the Committee's proposal to amend the Plan to make it
more equitable for all members,
• to address any concerns the members may have, and
• to solicit feedback from the members about the proposed amendments.
The Committee will recommend Plan changes to City Council for their action.
Jim Hume intended to redraft the issue paper, but had not distributed it to the Committee. Alan
plans to verify the capabilities of the new financial system to make the suggested changes. The
Committee discussed if information should also include other plan benefit formula options
considered to achieve equity and the reasons they were rejected. This could be included in the
background material, along with how the inequity surfaced. The examples that Mark had
presented in January would also be helpful to illustrate the way the number of hours worked in
. GERC Meeting Minutes
March 2, 2000
Page 3 of 4
a year can affect the benefits earned. Deb recommended that 2,080 hours be used as the
number of hours worked by a full-time employee in a year.
CONCLUSION AND NEXT STEPS: The Committee will discuss information to be presented
and the dates and places for the sessions at the April meeting.
5. RETIREE BENEFIT CALCULATIONS AFTER JANUARY PAY ADJUSTMENTS
MAIN POINTS: Deb Weedman reported the current system of calculating benefits does not
include mid -year pay changes. Only the new pay rates implemented each year in January are
used for calculating the benefits. Mark confirmed he based the calculations on the computer
tapes of Plan member information received at the end of each year and after HR enters the
new pay rates in the system in January. If Human Resources provides any mid -year changes,
Watson Wyatt can use that information in their calculations. The Committee reviewed the
Plan's definition for compensation that is the basis for calculating the benefit.
Deb and Alan will determine how the new financial system will track the pay types and amounts
used to calculate the GERP benefit. They will also review the data history available. Mark said
he would be able to put mid -year pay changes in the software for calculating the benefit.
CONCLUSION AND NEXT STEPS: The Committee will put this topic on next month's agenda
6. FEBRUARY, 2000, INVESTMENT REPORT
MAIN POINTS: Julie Depperman distributed the GERP investment report for February, noting
that the stock market in general has experienced some significant losses during the last two
months. The Standard and Poor's benchmark showed a 7% decrease in YTD return and the
Dow Jones Industrial Average was down almost 12%. Despite that, the GERP portfolio has
shown an annualized return for the year of 7.29%. This is due primarily to the substantial
returns of the Brandywine domestic fund, the Janus Overseas fund, and the fixed income
portfolio, which showed an annualized yield of 6.41 %.
To balance the funds according to the investment policy, Julie also noted they continued to sell
the under -performing Nicholas and IAI Regional funds, as well as some of the Janus Overseas
fund.
CONCLUSION AND NEXT STEPS: Alan and Julie will continue to monitor the performance of
the funds and to sell funds as needed to achieve the balance of funds required by the policy.
7. OTHER BUSINESS
A. UPDATE ON BENEFIT FOR DECEASED DEFERRED VESTED EMPLOYEE
Greg Tempel reported that negotiations are continuing on the lump -sum benefit for a disabled
former City employee who died recently. His parents had provided the City with written notice
that they were filing a claim as contingent beneficiaries for the death benefit, which the Plan
would otherwise pay to a former spouse who is the designated beneficiary. Attorneys for the
two parties are attempting to set up a trust fund for the deceased employee's son to receive the
death benefit. Greg provided a summary of Colorado Revised Statute 15-11-804, which is the
basis for the claim. There has been no distribution of the benefit.
GERC Meeting Minutes
March 2, 2000
Page 4 of 4
CONCLUSION AND NEXT STEPS: Greg advised the parties may ask the Committee to make
a decision on this benefit at the next meeting.
B. RFP FOR ACTUARIAL CONSULTANT
Alan and Julie have been working with Purchasing to develop the Request For Proposal (RFP)
for actuarial services. They updated the RFP document used six years ago and included some
changes in services, performance elements, timeliness of responses, and billing practices. The
RFP document should go out in two weeks.
CONCLUSION AND NEXT STEPS: Alan will inform the Committee as the process continues.
Proposals are due in April.
C. EFFECT OF PHASE II OF PAY PLAN ON GERP
Deb Weedman asked if the implementation of the pay increases in January as Phase II of the
New Pay Plan would have an unexpected impact on the GERP. Alan replied Watson Wyatt
estimated this cost increase last year. The actual cost will be in the next Valuation Report.
SCHEDULE FOR NEXT REGULAR MEETING: The next regular meeting will be Thursday,
April 6, 2000, at 1:15 PM in the Council Information Center (CIC) of City Hall West. The
agenda will include:
1. Citizen Participation and Plan Member Comments
2. Consider approving the March 2, 2000, minutes
3. Review draft Valuation Report
4. Finalize Plan of Action for Full-time — Part-time Education Sessions
5. Benefit Calculations After January Pay Adjustments
6. Final COLA Implementation Report
7. Update on Beneficiary Designation for Deceased Member
8. Other Business
ADJOURNMENT: Terry adjourned the meeting at 3:15 PM.
GERC AND GERP WEB PAGE ADDRESS:
htti)://www.ei.fort-collins.co.us/CITY HALL/BOARDS 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, April 6,
2000, at 1:15 PM. The Committee will hold remaining meetings for 2000 as shown below:
THURSDAY, jAPIWARY 6, 2999 THURSDAY, JULY 6, 2000
THURSDAY, FEBRUARY 3, 2000 THURSDAY, AUGUST 3, 2000
THURSDAY, SEPTEMBER 7, 2000
THURSDAY, APRIL 6, 2000 THURSDAY, OCTOBER 5, 2000
THURSDAY, MAY 4, 2000 THURSDAY, NOVEMBER 2, 2000
THURSDAY, JUNE 1, 2000 THURSDAY, DECEMBER 7, 2000