HomeMy WebLinkAboutRetirement Committee - Minutes - 03/04/1999Retirement Plan • ��
City of Fort Collins
FORT COLLINS GENERAL EMPLOYEES RETIREMENT COMMITTEE
MARCH 4, 1999, MEETING MINUTES
Approved Apri11, 1999
COUNCIL LIAISON: Mayor Ann Azari
COMMITTEE MEMBERS PRESENT: ABSENT:
Jim Hume, 221-6776
Alan Krcmarik, 221-6788
Susan Lehman, 221-6813
Terry Van Cleave, 221-6321
Kevin Westhuis, 221-6156
OTHERS PRESENT:
Russ Proctor, Watson Wyatt Worldwide, the Plan's actuarial firm
Deb Weedman, (Staff Support, Human Resources)
Vincent Pascale (Benefits Administrator, Human Resources)
Greg Tempel, (Staff Support, Legal)
Julie Depperman, (Staff Support, Investments)
Sue Wilcox, (Staff Support, Clerical)
Fred Garth, GERP Retiree
Tom McMillen, GERP Retiree
CALL TO ORDER: Chairperson Kevin Westhuis called the meeting to order at 1:20 PM.
ITEMS OF NOTE: Kevin introduced new GERC member Terry Van Cleave of the Utilities
Department. He fills the vacancy created when Patti Teraoka resigned after converting to the
money purchase plan. Deb Weedman introduced Vincent Pascale, who is the Benefits
Administrator from Human Resources. Retirees Fred Garth and Tom McMillen, former Light and
Power employees, also attended the meeting.
APPROVAL OF MINUTES: Alan Krcmarik distributed copies of the minutes for February 4,
1999. Kevin Westhuis moved that the February 4 minutes be approved as distributed. Jim Hume
seconded the motion, which passed 4-0. (Terry Van Cleave did not vote as he was not a GERC
member at that time.)
ADDITIONS TO AGENDA OR ITEMS FOR NEXT AGENDA: No changes.
Filename: GERC0304.doc
300 LaPorte Avenue • P.O. Box 580 • Fort Collins, CO 80522-0580 • (970) 221-6788 • FAX (970) 221-6782
General D ,yees Retirement Committee
March 4, 1999, Meeting Minutes
Page 2 of 6
DISCUSSION TOPICS:
GERC PLAN MEMBER(S) COMMENTS AND CITIZEN PARTICIPATION:
Fred Garth had taken the news of the Committee's proposed cost of living adjustment to the
other retirees with whom he meets. They responded favorably with regard to the action. Fred
also met with Mayor Ann Azari (GERC liaison to City Council) and explained that the high
cost of health insurance hits retirees very hard and reduces their standard of living. Fred
reported that the Mayor was understanding and supportive of the retirees' situation. The
retirees plan to address City Council at the March 16 regular meeting. Fred asked for help
from City staff in reaching the other retirees. The Finance staff will be able to assist him in
mailing a notice to the other retirees.
2. QUALIFIED DOMESTIC RELATIONS ORDERS (QDROs)
MAIN POINTS: Greg Tempel worked with Deb Weedman and Russ Proctor in preparing a
resolution to adopt procedures to deal with requests for division of property in divorce cases.
Until two years ago there was no provision in the Plan for division of the retirement benefit, but a
State law passed at that time made it mandatory. Greg had advised the GERC would be wise to
create a process and the necessary forms to do this in an orderly way.
Greg reviewed the provisions of the resolution, which include using the standard forms the GERC
would provide, bringing a preliminary draft of the employee's request to Human Resources for
review before it goes to court, and providing a certified copy of the Court's decision to Human
Resources, the actuary, and the assistant City Attorney. Human Resources could provide the
employee with information about the options available. Greg also noted that a current employee
used the draft form and submitted a completed form, which Russ and Greg reviewed and returned
to the employee's attorney. The employee felt it was a good process and the forms were
understandable.
CONCLUSION AND NEXT STEPS: After some discussion, the Committee recommended
that a glossary of terms used in the process be provided along with the forms. Staff could change
such a glossary as needed without requiring formal action of the GERC. Kevin Westhuis moved
that Resolution 99-1 of the GERC be adopted along with a glossary of terns and the necessary
forms. Alan Krcmarik seconded the motion, which passed unanimously 5-0.
3. GENERAL EMPLOYEES RETIREMENT PLAN CONTRIBUTION
MAIN POINTS: Each year the GERC considers the percentage of pay that needs to be
contributed to the Plan on behalf of employee members in order to keep the GER Plan actuarially
sound. This year the percentage of pay recommended is 4.5%. This rate will be slightly higher
than the normal cost required to keep the GER Plan fully funded, but it does match the
contribution rate currently being made to the 401(a) Money Purchase Plan for former GERP
members.
. Gene ployees Retirement Committee
arch 4, 1999, Meeting Minutes
Page 3 of 6
CONCLUSION AND NEXT STEPS: Alan will check with Payroll personnel and make sure
that the rate being used in 1999 is 4.5%.
4. CONVERSION OPITON FOR EMPLOYEES HIRED IN 1998
MAIN POINTS: Deb Weedman and Russ Proctor have been working on reconciling two lists of
employees hired in 1998 and thought to be eligible for conversion to the money purchase plan.
They found a number of hourly or contractual employees who had converted to classified
employment in 1998. The final list includes 72 employees.
Russ also presented a cost estimate for the work being done by Watson Wyatt for this education
and conversion process.
Jim Hume voiced a concern he heard during the previous conversion. Employees need to be
assured that they can attend the education sessions during work time, and that this information be
given to their supervisors as well. This may be a special problem for shift personnel.
CONCLUSION AND NEXT STEPS: Russ will calculate the amount of the transfer balance
for eligible employees and will have the statements at the April meeting. He will also prepare the
information booklets and other educational materials. Deb and Julie Depperman are working on
coordinating the mailing and handout materials with Russ and Theresa Myers, the ICMA
Retirement Corporation representative. Staff will ask Theresa to make the group presentations,
with the assistance of Candace Merrill -Williams.
The Committee members agreed to have Jeff Kraft of Watson Wyatt provide two live
presentations on two different dates and locations. The Committee will ask City Cable services to
videotape and copy a presentation for those unable to attend.
Regarding the need for supervisors to release employees to attend, Human Resources will talk to
the City Manager's Office about how best to do this.
5. GENERAL EMPLOYEES RETIREMENT COMMITTEE MEMBERSHIP MAKE-UP
CHANGE
MAIN POINTS: The GER Plan is now a "closed" plan (that is, admitting no new members) and
the current members will eventually retire. In light of this development, the GER Committee
considered revising the Plan document to allow a retiree to serve as a sixth member of the
Committee. Greg prepared an ordinance to send to City Council requesting that the City Code
and the GER Plan document be amended to allow this change.
CONCLUSION AND NEXT STEPS: Alan Krcmarik moved that the Ordinance creating a sixth
Committee position to be filled by a retiree, be recommended to City Council for approval at the
March 16 meeting. Jim Hume seconded the motion and the vote was unanimous (5-0) in favor.
Although the item will be on the consent agenda, Kevin will attend the March 16 City Council
meeting in case there are questions.
General Er yces Retirement Committee
M=h 4, 1999, Meeting Minutes
Page 4 of 6
6. PERSONAL RETIREMENT PLANNING STATEMENTS
MAIN POINTS: Every year each GER Plan member receives a Personal Retirement Planning
Statement (PRPS). The statement provides a summary of their GERP benefits, information on
individual ICMA Retirement Corporation retirement plans, and an estimate of Social Security
benefits. The Committee reviewed the statement format and provided the following direction:
A. Only those employees who opted to stay in the GER Plan will receive the PRPS this
year;
B. The "Data as of:" line will use January 1, 1999;
C. Because of major job reclassifications made early in 1999, conversion amounts will be
based on the rate in place on February 1, 1999. There will be a notation under the box
or as a footnote to clarify this; and
D. On page 3 the limitations on 401(a) and 457 contributions need to be updated.
CONCLUSION/NEXT STEPS: Watson Wyatt will ship the statements to Finance where they
will be distributed with the paychecks on March 26.
7. WORK PLAN PRIORITIES
MAIN POINTS: Kevin reviewed the items on the 1999 Work Plan. The following shows the
status of each:
A. 1998 Annual Report
B. Plan enhancements
C. Credit for part-time service
D. COLA for retirees
E. Complete QDROs
F. Conversion for 1998 hires
G. Quarterly Investment Reports
H. Education opportunities
I. Legislative Issues
J. Revise actuarial assumptions
K.
Distribute PRPS forms
L.
Review standing rules
M.
Annual review of actuary
N.
Work Plan for year 2000
O.
Restatement of GER Plan
Completed
Review in April
Deferred to October/November because
of implementation of financial system
In process
In process
In process
Ongoing
As needed
As needed
Scheduled in April for the
valuation report in May
In process
September
October
November
To be scheduled
CONCLUSION AND NEXT STEPS: Deb Weedman suggested that revision of the Plan
Summary booklet be added to the Work Plan, perhaps following the restatement of the Plan
document. The Plan Summary booklet is distributed to GER Plan members and explains the
Plan's provisions and the calculation of benefits.
Geneimployees Retirement Committee
March 4, 1999, Meeting Minutes
Page 5 of 6
8. CALCULATION OPTIONS FOR THE COST OF LIVING ADJUSTMENT (COLA)
MAIN POINTS: The Committee members reviewed and compared the costs of various methods
of calculating the cost of living adjustment (COLA) for retirees:
CPI times 1/2 $ 619,217
CPI less 1.0% $ 754,670
CPI less 1.5% $ 496,663
Full CPI $1,296,485
The Committee is considering using less than the CPI for the COLA because Russ has indicated
there are articles that argue the CPI overstates the cost of living for retirees. The Committee also
discussed the argument that the CPI understates the cost of living for retirees due to larger
medical expenses. Given the high level of competition for funding in the budget process, using
less than the full CPI may also have a higher probability of receiving funding. The Committee
believes that the cost of the increase should be home by the various funds of the City and not
from higher payroll deductions from active members of the Plan.
CONCLUSION AND NEXT STEPS: Around April 1, Kevin will receive a message as part of
the budget preparation process asking for any funding requests from the GERC. At this point
Kevin will make a request of the City Manager for the COLA for the retirees.
MAIN POINTS: Julie Depperman presented the review of investments in February, noting that
bond investments were outperforming the 5-year Treasury notes by 1.5% and domestic equity
investments were up almost 1%. However, international equities were off 1.54%, bringing the
mutual fund gain down to .32%. The market value total for the GERP portfolio was $29,785,833
at the end of February, which is about where it was at year-end for 1998.
CONCLUSION AND NEXT STEPS: No action necessary.
SCHEDULE FOR NEXT REGULAR MEETING: The next regular meeting will be
Thursday, April 1, 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 March 4, 1999, minutes
3. Conversion to Money Purchase Plan Update
4. Status of Committee Membership Change
General Et yees Retirement Committee
Mach 4, 1999, Meeting Minutes
Page 6 of 6
5. Update on COLA for Retirees
6. Review Actuarial Assumptions
7. Review Personal Retirement Planning Statement process
8. Discuss Possible Plan Enhancements
9. Regular Investment Review
10. Other Business
ADJOURNMENT
Kevin adjourned the meeting at 2:50 p.m.
GERC/GERP WEB PAGE ADDRESS:
www.ci.fort-collins.co.us/CITY HALLBOARDS CONMSSIONS/RETIRENMNT/index.htm
FUTURE MEETING SCHEDULE:
The General Employees Retirement Committee normally meets at 1:15 p.m. on the I't Thursday
of each month in the Council Information Center, City Hall West.
THURSDAY, APRIL 1, 1999
THURSDAY, MAY 6, 1999
THURSDAY, JUNE 3, 1999
THURSDAY, JULY 1, 1999
THURSDAY, AUGUST 5, 1999
THURSDAY, SEPTEMBER 2, 1999