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HomeMy WebLinkAboutRetirement Committee - Minutes - 08/12/1999City of Fort Collins GeneiEmployees Retirement Plan FORT COLLINS GENERAL EMPLOYEES RETIREMENT COMMITTEE August 12, 1999, MEETING MINUTES Approved, As Amended, September 2, 1999 COUNCIL LIAISON: Mayor Ray Martinez Present Arrived late COMMITTEE MEMBERS PRESENT: ABSENT: Jim Hume, 221-6776 Alan Krcmarik, 221-6788 Susan Lehman, 221-6813 Dottie Nazarenus, 484-7592 Terry Van Cleave, 221-6321 Kevin Westhuis, 224-6158 OTHERS PRESENT: Ken Jamison, Watson Wyatt Worldwide, the Plan's actuarial firm Deb Weedman, Vincent Pascale (Staff Support — Human Resources) Greg Tempel, (Staff Support —Legal) Julie Depperman, (Staff Support — Investments) Sue Wilcox, (Staff Support — Clerical) CALL TO ORDER: Chairperson Kevin Westhuis called the meeting to order at 1:55 p.m. ITEMS OF NOTE: Kevin advised the Committee that about 20 retirees came to the City Council meeting on August 10, to tell the new Council of their concerns about the need for a COLA for retirees. However, because it was a study session, they were not able to address the members. Fred Garth had written out what he planned to say and to that he attached a statement of retiree's concerns, which the retirees in attendance signed. They gave this to Kevin and asked that copies be distributed to the Mayor and Council members, which will be done. Jim Hume said he had recently updated the minutes and information on the GERP Web page and changed it to an Acrobat format. Alan Krcmarik noted that persons searching the web for retirement information will find the Plan's web page. Members of his family had learned all about the Fort Collins General Employees Retirement Plan through the detailed minutes of these meetings from the Web page. APPROVAL OF MINUTES: Alan Krcmarik distributed copies of the minutes for July 1, 1999. Alan advised that previous suggestions received from Julie Depperman and Greg Temple had already been incorporated. Kevin corrected his telephone number and requested a small wording change on page 2, first paragraph, fourth line. Kevin then moved that the minutes be adopted as revised and Jim Hume seconded the motion, which passed unanimously 6-0. 300 LaPorte Avenue • P.O. Box 580 • Fort Collins, CO 80522-0580 • (970) 221-6788 • FAX (970) 221-6782 GERP Meeting Minutes August 12, 1999 Page 2 of 6 ADDITIONS TO AGENDA AND ITEMS FOR NEXT AGENDA: The Committee agreed to consider the domestic relation order item first because Greg Tempel had to leave early. DISCUSSION TOPICS: 1. GERC PLAN MEMBER (S) COMMENTS AND CITIZEN PARTICIPATION: There were no Plan member or citizen comments. 2. DOMESTIC RELATIONS ORDER (DRO) FOR DAVID MEYER MAIN POINTS: Plan member David Meyer's attorney had submitted a domestic relations order (DRO) for the division of GERP benefits between David and his former spouse, Carolyn. Greg advised the group that the forth complied with the applicable GER Plan Resolutions and that Ken Jamison of Watson Wyatt had also reviewed it and found it to comply with State and Federal law. The two parties and their attorneys had been advised that the DRO would be reviewed by the GERC at this meeting if they wished to attend. Neither the parties nor their attorneys were present. Greg recommended the Committee approve the order and agreement as submitted. The Committee asked how the retirement benefits accruing to each person would be tracked. Human Resources will add Carolyn as a new beneficiary in the Plan, and her account would be credited with the agreed -upon portion of the retirement. She will also receive a Personal Retirement Plan Statement (PRPS), which is sent out annually each spring, showing her portion of the benefit. David's account will also be adjusted pursuant to the terms of the DRO so that there is no net impact to the GERP. Each party to the DRO is responsible for supplying a current address to the GERP administrator. Watson Wyatt will add Carolyn to its data base when the City's year-end computer data is transmitted to them. CONCLUSION AND NEXT STEPS: Alan Krcmarik moved that the Committee approve the documents as presented and Jim Hume seconded the motion. The motion passed unanimously (6-0). 3. ICMA RETIREMENT CORPORATION RETIREMENT ITEMS MAIN POINTS: Deb Weedman announced that Human Resources has arranged a seminar on Retirement Income Planning to be presented by Gordon Tiffany, an ICMA Retirement Corporation representative. Mr. Tiffany will present the seminar twice on Tuesday. September 21: from 9 -11 AM at Light and Power and from 1 - 3 PM in the CIC Room at City Hall West. Human Resources will provide flyers and other announcements later. Mr. Tiffany has presented other seminars at the City and is considered a good instructor by those who have attended. Debbie also advised the Committee that in the future ICMA Retirement Corporation contributions to the 457 plan will all be calculated as a percent of pay. Spec dollar amount contributions will no longer be allowed and all current dollar amount contributions have been changed to a percent of pay. One consequence is that when an increase in pay is received, the 457 contribution will automatically increase, proportionate to the salary • • GERP Meeting Minutes August 12, 1999 Page 3 of 8 increase. Human Resources will distribute a memo to notify participants, and an E-mail message will go out tomorrow to all members. Julie Deppernan announced that Teresa Myers, who had been an ICMA Retirement Corporation representative for the last 10 years, is moving to a new company. Jerry Wagner will continue to be the City's main contact at ICMA-RC. Alan updated the Committee about the plan to eliminate the administrative fees for all City and Poudre Fire Authority ICMA Retirement Corporation accounts when the value of the total contributions exceeds $125 million. That goal was reached at the end of June. Girard Miller, President and CEO of the ICMA Retirement Corporation, agreed the administrative fee reduction would begin October 1, 1999. The percentage administrative fees will decrease by 0.30%. The annual administration fee will be $18 per account, which will be reduced to $12 on 1/1/2000 and eliminated entirely on 1/1/2001. CONCLUSION AND NEXT STEPS: No actions are necessary on these items at this time. 4. ELECTION OF GERC OFFICERS MAIN POINTS: The Standing Rules for the GER Committee state that officers will be elected at the August meeting. The Chairperson and Vice Chairperson are each elected for one-year terns. CONCLUSION AND NEXT STEPS: Jim Hume nominated Kevin Westhuis to continue as Chairperson and Alan seconded the motion. There were no other nominations. The motion passed unanimously 6-0. Kevin Westhuis nominated Jim Hume to continue as Vice Chairperson and Susan Lehman seconded the motion. There were no other nominations. The motion passed unanimously. Sue Wilcox will notify the City Clerk's Office: S. FAIRNESS ISSUES RELATED TO FULL-TIME AND PART-TIME EMPLOYMENT RETIREMENT BENEFITS MAIN POINTS: Several years ago a former Committee member brought to the Committee's attention an equity question related to employees who move from full-time positions to part-time positions and those who make the opposite move. The GERP benefit is calculated using the highest 60 months of the last 10 years of employment. If an individual worked 10 years as a full-time employee and then moved to a part-time position, the retirement benefit would begin to erode as their part-time employment exceeded five years. Conversely, a part-time employee who had worked for five years and moved to a full-time position, would have a retirement benefit that more heavily reflected the full-time work. Alternative ways to calculate the retirement benefit are possible, and would more accurately reflect the employee's earned benefit: Use the number of hours worked each year in the calculation; calculate the dollars earned as though they were full-time workers; or use the highest -paid five years out the employee's entire City employment. The Committee asked Deb Weedman to determine how many current GERP members may have moved from part-time to full-time positions (or vice versa) in their career with the 3ERP Meeting Minutes August 12, 1999 Page 4 of 6 City in order to determine the extent that GERP members might be affected. Deb reported that of the current 431 members, there were 43 part-time and 398 full-time GERP employees during 1998. However, to get an employment history of each GERP member would require going through microfiche for each pay period. She had asked Ken at Watson Wyatt if their data would provide the needed information, and Ken said It could give an indication that an employee made such a move, but further research would still be necessary. He estimated that the cost to provide such a list would be about $500 and a full history would be $100041500. CONCLUSION AND NEXT STEPS: Kevin moved that Watson Wyatt provide a list of GERP members who may have moved from part-time to full-time City employment at some time during their career for a fee not to exceed $500. Susan Lehman seconded the motion, which passed unanimously 6-0. 6. COST OF LIVING ADJUSTMENT UPDATE MAIN POINTS: The Council Finance Committee had considered the issue of the cost of living adjustment ("COLA) and asked Finance Department staff to explore ways to phase in a COLA or to divide the cost among the departments where the retirees used to work. After providing this information at the July Finance Committee meeting, the Finance Committee members supported a COLA with the stipulation that it would be the last time any COLA is given. They also asked for a profile of those retirees who retired before 1985 when the GERP was the only retirement benefit (before a deferred compensation plan was introduced). Alan said that the Preliminary Budget was being prepared and the COLA item was not included. Budget study sessions are in September and the first reading of the ordinance will be in November. There is time for the Finance Committee to indicate its recommendation to City Council, along with background information. CONCLUSION AND NEXT STEPS: Alan will prepare a memo for approval by the Finance Committee recommending that City Council add a COLA for current retirees to the 2000- 2001 budget. 7. GERP VALUATION REPORT MAIN POINTS: Committee members raised a number of questions about the valuation report which was distributed before this meeting. At the meeting Ken Jamison provided a revised report and reviewed the items that had changed. There was discussion of the expense load that was used and Ken noted that the revised pages show a more accurate projection and explained why the large expense load for one year is reflected in more than one year's projection. It was noted that the 4.8% contribution rate recommended by the Committee for the next two years is not included in the City Manager's proposed budget document. CONCLUSION AND NEXT STEPS: In order to include the revised information in the Valuation Reports, Ken collected them, will replace the incorrect pages, and will return them for redistribution. Alan moved to approve the Valuation Report as revised August 12, • GERP Meeting Minutes August 12, 1999 Page 5 of a 1999. Jim Hume seconded the motion, which passed unanimously. The final revised copies will be provided before the next meeting. 8. REVISION OF PLAN DOCUMENT MAIN POINTS: Greg Tempel had provided a draft of the restated Plan document for Committee and staff review. However, since Greg was unable to attend this part of the meeting, it was agreed to defer this topic until the next meeting. CONCLUSION AND NEXT STEPS: This item will be added to the September agenda. 9. SECOND QUARTER, 1999 INVESTMENT REPORT MAIN POINTS: Julie Depperman distributed the GERP investments report for the quarter which ended June 30, 1999. The annualized yield on the fixed income component of the portfolio was 6.01 % for the year. Domestic mutual funds outperformed the Standard & Poor's 500 Index, with a year-to-date return of 12.6% compared to 11.7% for the S&P 500. The portfolio's intemational mutual funds have also performed very well this year, returning 12.2%. The report provides information on the overall condition of the bond and stock markets for the second quarter and describes analysts' expectations for the upcoming quarter. Julie noted that GERP administrative expenses were exceptionally high for the second quarter due to the second GERP / MPP conversion. The third quarter is expected to include additional conversion costs, as well as outflows of $87,243 to the MPP for the second GERP transfer. CONCLUSION AND NEXT STEPS: No action is necessary. 10. OTHER BUSINESS -MAIN POINTS: A. Sue reported that she had sent a short memo along with the flyers for the Health Fair to all the retirees to introduce them to the Health Fair activities and the blood tests available to them this year. B. Alan noted that an article in Pension & Benefits Update newsletter summarized five bills in Congress which deal with revisions to the rules governing 457 and 401 accounts. The most comprehensive bill is House Resolution 1102. CONCLUSION AND NEXT STEPS: Copies of the article will be sent to Committee members. Plan members who would like to review it can contact a Committee member at the phone numbers listed at the beginning of the minutes. SCHEDULE FOR NEXT REGULAR MEETING: The next regular meeting will be Thursday, September 2, 1999 at 1:15 p.m. in the Council Information Center (CIC) of City Hall West. The agenda will include: 1. Citizen Participation and Plan Member Comments GERP Meeting Minutes August 12, ION Page 8 of 8 2. Consider approving the August 12, 1999, minutes 3. Review of Restated Plan Document 4. Discussion of Full-time — Part-time Issue 5, Contribution Rate - Budget Followup 6. COLA / Budget Update 7. Regular Investment Review S. Other Business ADJOURNMENT The meeting was adjourned at 3:20 p.m. GERC AND GERP WEB PAGE ADDRESS: www,ci.fort-collins.co.us/CITY HALUBOARDS COMMISSIONS/RETIREMENTrindex.htm FUTURE MEETING SCHEDULE: The General Employees Retirement Committee normally meets at 1:15 p.m. on the first Thursday of each month in the Council Information Center, City Hall West. THURSDAY, SEPTEMBER 2, 1999 THURSDAY, OCTOBER 7, 1999 THURSDAY, NOVEMBER 4, 1999 THURSDAY, DECEMBER 2, 1999