HomeMy WebLinkAboutRetirement Committee - Minutes - 04/01/1999Generalonployees Retirement Plan •
riAmgw-
Citv of Fort Collins
FORT COLLINS GENERAL EMPLOYEES RETIREMENT COMMITTEE
April 1,1999, MEETING MINUTES
COUNCIL LIAISON: Mayor Ann Azari
COMMITTEE MEMBERS PRESENT:
Jim Hume, 221-6776
Alan Krcmarik, 221-6788
Terry Van Cleave, 221-6321
Kevin Westhuis, 221-6156
OTHERS PRESENT:
Approved, As Amended, May 6, 1999
ABSENT:
Susan Lehman, 221-6813
Russ Proctor & 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)
Fred Garth, GERP Retiree
Steven M. Ross, GERP Member, Utilities
Molly Nortier, GERP Member, Utilities
Jerry Wagner, ICMA Retirement Corporation West Territory Director
CALL TO ORDER: Chairperson Kevin Westhuis called the meeting to order at 1:18 p.m. in the
Training Room of the Utilities Service Center.
ITEMS OF NOTE:
A. Kevin noted that Susan Lehman would not be able to attend the meeting today.
B. Ken Jamison attended with Russ Proctor. Ken will be the Watson Wyatt contact for the GER
Committee. Russ indicated that he plans to leave his present position in the next five months.
C. Kevin also had a copy of a letter from Watson Wyatt to the Committee stating that the firm's
computers are all Y2K compliant. The benefit calculation program, used by Mark Sanford
and Deb Weedman, is also compliant.
300 LaPorte Avenue • P.O. Box 580 • Fort Collins, CO 80522-0580 • (970) 221-6788 • FAX (970) 221-6782
GERC Meeting Minutes
April 1, 1999
Page 2
APPROVAL OF MINUTES: Alan Krcmarik distributed copies of the minutes for March 4,
1999. After a brief review, Alan moved that the minutes be approved as presented. Jim Hume
seconded the motion, which passed unanimously (4-0).
DISCUSSION TOPICS:
1. GER PLAN MEMBER COMMENTS AND CITIZEN PARTICIPATION:
Kevin had received a message from Linda Brown indicating that she set the 1999 contribution
rate for GER Plan members to 4.5%.
2. UPDATE ON DEFINED BENEFIT TO DEFINED CONTRIBUTION
CONVERSION FOR 1998 HIRES
MAIN POINTS: Russ provided samples of the materials to be given out at the education
presentations to the 72 people who are eligible to convert from the General Employees
Retirement Plan to the defined contribution plan (ICMA Retirement Corporation money
purchase plan). The Committee will not activate the HotLine phone number for this conversion
because the number of people involved is much smaller than last time. Persons with questions
can direct them to Debbie Weedman at extension 6562. The Committee decided that only one
sign -in sheet would be necessary at each education session. Kevin, Julie Depperman, Debbie
Weedman, and Sue Wilcox will be available to assist with the sign -in at the education sessions
on May 4 at 10:00 a.m. and May 6 at 2:00 p.m. in City Council Chambers.
Watson Wyatt will print the information materials and bring the packets when they come for the
presentations. They will include the article on choosing a financial advisor. Watson Wyatt will
send the individual calculation sheets to Sue ahead of time for inserting in envelopes. Currently,
there are 72 people eligible for the conversion with a total amount of approximately $150,000..
Russ stated an amount of this size should not have adverse results on the Plan.
Jerry Wagner, the ICMA Retirement Corporation representative, clarified that he and Candace
Merrill -Williams will be at the presentations to answer questions on May 4 and 6. They reserved
May 10 for individual interviews. He will not make a presentation. He has also reserved May
11 as a backup date for interviews.
CONCLUSION AND NEXT STEPS: If the Committee members or support staff have any
changes to the conversion materials, they should send them to Ken or Mark by April 8. Watson
Wyatt will provide Julie with the list of individuals eligible for the conversion and their
corresponding transfer amounts.
3. STATUS OF COMMITTEE MEMBERSHIP CHANGE &
UPDATE ON COLA FOR RETIREES
MAIN POINTS: Alan reported on March 16 City Council approved the first reading of the
Ordinance that would add a retiree as the sixth member to the General Employees Retirement
Committee. Because of Council's schedule and the City Council elections, second reading will
• GERC Meeting Minutes
April I, 1999
Page 3
not occur until April 20 when the new Council members are seated. If it passes second reading,
it will take effect at the end of April and staff will send notices to all retirees requesting
applicants for the new position.
Alan and Kevin also reported that about 20 retirees attended the City Council meeting. They
listened and showed their support when Fred Garth spoke to Council members about supporting
the Cost of Living Adjustment (COLA) for current retirees in the 2000-2001 budget process. In
addition to the showing at the meeting, about twelve retirees sent letters to the Council
supporting consideration of the COLA. Council members Bill Bertschy and Will Smith
requested a memo of background information for Council review. The next step will be to
present the information to the Council Finance Committee.
CONCLUSION AND NEXT STEPS: Alan has prepared the memo requested by Council. He
will schedule the item for the Finance Committee.
4. REVISION OF DOMESTIC RELATIONS ORDER (DRO) PROCESS & FORMS
MAIN POINTS: Greg Tempel explained that Russ Proctor and he had found some confusion in
the model forms adopted by the GERC for Domestic Relations Orders (formerly called Qualified
Domestic Relations Orders or QDROs). Therefore, they have revised the model forms to make
them easier to use. He provided copies of the new forms and explained the changes to Exhibit 2
of the original resolution.
CONCLUSION AND NEXT STEPS: Alan Krcmarik moved that Resolution 99-02 of the
GERC be adopted to change the forms used in the DRO process and Terry Van Cleave seconded
his motion. The vote was unanimous (4-0) in favor of the motion.
5. ADOPTION OF ACTUARIAL ASSUMPTIONS
MAIN POINTS: Russ Proctor provided an overview of the actuarial assumptions used to
prepare the Valuation Report. He suggested that the current assumptions be adopted for 1999
and be reevaluated in 2000. The current assumptions, as set forth in the actuarial valuation report
dated December 17, 1998, include a 7.5% return on investments and a 3.5% rate of inflation.
Ken Jamison also explained that because the Plan will not accept new members, the active
population will shrink over time and it will eventually become a Plan of retirees. In the future,
the Committee may evaluate if it should purchase annuities to cover the benefits owed to future
retirees. Current interest rates for annuities are not favorable. This is not a decision the
Committee has to address at this time.
CONCLUSION AND NEXT STEPS: Alan moved to adopt the assumptions presented by
Watson Wyatt and Jim Hume seconded his motion. The motion passed unanimously (4-0).
Kevin will add this item to the 2000 Work Plan for the GERC.
GERC Meeting Minutes
April 1, 1999
Page 4
6. REVIEW OF PERSONAL RETIREMENT PLANNING STATEMENTS (PRPS)
DISTRIBUTION
MAIN POINTS: Watson Wyatt prepared Personal Retirement Planning Statements for the 478
members remaining in the GER Plan and distributed with the March 26 paychecks. In addition to
details about the member's GERP benefits at retirement, the statements included balances in
ICMA 401(a) and 457 plan accounts, and estimates of the individual's Social Security benefit.
Benefits Administrator Vincent Pascale reported that he had received a request for projections at
age 60 and a suggestion that the envelopes containing the PRPS be sealed. Another plan member
suggested that personal sources of retirement income be included on the statement. The
Committee found the additional sources to be cost prohibitive and not the responsibility of the
Committee. Member's personal sources are more the domain of a personal financial planner.
CONCLUSION AND NEXT STEPS: Russ Proctor indicated that Watson Wyatt could revise
the statements to include the projections at age 60 at no extra cost. Sue Wilcox agreed to change
the envelope preparation process.
7. POSSIBLE PLAN ENHANCEMENTS
MAIN POINTS: Since the recent conversion and the proposed conversion are such major Plan
changes, Alan suggested that other enhancements be deferred for consideration in the 2000 Work
Plan. That way the Committee could see and evaluate effects of these two changes.
CONCLUSION AND NEXT STEPS: Kevin will include plan enhancements in a review of
the total GER Plan as part of the 2000 Work Plan.
8. REGULAR INVESTMENT REVIEW
MAIN POINTS: Julie Depperman reported that because the quarter just closed the day before
the meeting, she will present the full Quarterly Report at the May meeting. She noted that some
of the foreign mutual funds had positive returns for the first time this year. The equity portion of
the portfolio is up 2% year-to-date. She also noted that the Dow Jones Industrial Average closed
at over 10,000 for the first time in history.
CONCLUSION AND NEXT STEPS: Alan and Julie will present the full First Quarter Report
for 1999 at the May meeting.
9. ICMA CHANGES FEE STRUCTURE
MAIN POINTS: Jerry Wagner, ICMA Retirement Corporation West Territory Director,
explained recent changes ICMA Retirement Corporation has made to its fee structure and the
conditions which qualify the City sponsored accounts for even lower fees. The City's total
ICMA Retirement Corporation fund assets (including police and fire departments) determine the
fee rate charged. When the City's total reaches $125 million (it currently exceeds $117 million),
the Retirement Corporation will reduce the fees. ICMA Retirement Corporation will look at the
total fund assets twice a year to determine if adjustments are necessary. The Retirement
. • GERC Meeting Minutes
Aptil 1, 1999
Page 5
Corporation charges retirees who are in the plans at the same rates as employees. Candace
Merrill -Williams will be providing regular investment education for members. Jerry commented
that the City of Longmont requires all employees who receive an investment match from that city
to complete a 2-hour educational program before they are authorized to designate where the city
funds will be invested.
CONCLUSION AND NEXT STEPS: Jerry also mentioned the new no -fee IRA and said they
will be holding two educational meetings about it.
SCHEDULE FOR NEXT REGULAR MEETING: The next regular meeting will be
Thursday, May 6, 1999, at 1:15 p.m. in the Council Information Center (CIC) of City Hall West.
The agenda will include:
1. Citizen Participation / Plan Member Comments
2. Consider approving the April 1, 1999, minutes
3. Update on Conversion for 1998 Hires
4. Update on COLA for Retirees
5. GER Committee Membership Update
6. Quarterly Investment Report
7. Other Business
ADJOURNMENT
Kevin adjourned the meeting at 3:10 p.m.
GERC/GERP WEB PAGE ADDRESS:
www.ci.fort-collins.co.us/CITY HALUBOARDS COMMISSIONS/RETIREMENT/index.htm
FUTURE MEETING SCHEDULE:
The General Employees Retirement Committee normally meets at 1:15 p.m. on the 1" Thursday
of each month in the Council Information Center, City Hall West.
THURSDAY, MAY 6, 1999
THURSDAY, JUNE 3, 1999
THURSDAY, JULY 1, 1999
THURSDAY, AUGUST 5, 1999
THURSDAY, SEPTEMBER 2, 1999
THURSDAY, OCTOBER 7, 1999
THURSDAY, NOVEMBER 4, 1999
THURSDAY, DECEM 3ER 2, 1999