HomeMy WebLinkAboutRetirement Committee - Minutes - 02/06/1997•
City of Fort Collins
Retirement Plan
FORT COLLINS GENERAL EMPLOYEES RETIREMENT COM]N TI'EE
FEBRUARY 6,1997 MEETING MINUTES
COUNCIL LIAISON: Mayor Ann Azari
CO1vUWME MEMBERS PRESENT:
Jerry P. Brown, 221-6350(w), 226-0800(h)
Jim Hume, 221-6776
Dave Agee, 221-6770
Alan Krcmarik, Member/Staff Support
Kevin Westhuis, 221-6156
ABSENT:
OTHERS PRESENT:
Sue Wilcox (Staff Support - Secretary)
Russ Proctor - Watson Wyatt Worldwide, the City's actuarial firm
Greg Tempel (Staff Support - Assistant City Attorney)
Laurie Harvey (Staff Support - Human Resources)
Bob Eichem (Staff Support - Treasury Administration)
CALL TO ORDER Chairperson Jerry P. Brown called the regular meeting to order at 12:30 p.m.
in the Council Information Center of City Hall West.
ITEMS OF NOTE: Jerry reported on the meeting with Mayor (and GERC Liaison) Ann Azari, City
Manager John Fischbach, and GERC member Dave Agee. (Council member Chuck Wanner was
unable to attend). The major topic was the appointment of non-GER Plan members to the GER
Committee, but issues related to previous applicants and the timing of comments about proposed
GERC appointments were also included. At this time, current members will serve out their terms and
the GERC will include discussion of these issues on future agendas. If a proposed City Charter
amendment concerning appointments to all City boards and commissions is approved, it may result
in review and revision of the whole appointment process.
Jerry had posed a question to Greg Tempel about how another proposed City Charter Amendment
will affect those City Light and Power employees who are members of the GER Plan and what the
consequences will be for the Plan? Greg's reply indicated that if Council approves the separation of
the Light and Power Department, their board of directors could wrestle with the question of benefits
(including the GER Plan) for these employees. At this point, Greg's counsel is to wait for the
passage or failure of the Charter amendment in April; and if it passes, wait for City Council to act,
and then consider the options available. This item will be deferred to the April meeting.
APPROVAL OF MINUTES: Alan Krcrnan'k moved that the January 9, 1997 minutes be approved
as distributed and Dave Agee seconded the motion. The minutes were approved unanimously.
300 LaPorte Avenue • P.O. Box 580 • Fort Collins, CO 80522-0580 • (970) 221-6788 • FAX (970) 221-6782
GERC Minutes - February 6, 1997
DISCUSSION TOPICS:
1. GER PLAN MEMBER COMMENTS/CTTIZEN PARTICIPATION: There were no member
or citizen comments.
2. 1996 FOURTH QUARTER AND YEAR-END INVESTMENT REPORT
MAIN POINTS: Alan reported that the information for this report is not yet available.
CONCLUSIONS/NEXT STEPS: This item is deferred to the March meeting.
3. GER COM[hM`TEE RETIREMENT PHILOSOPHY
MAIN POINTS: The GERC retirement philosophy has been evolving for many months,which
included a hiatus when there were only three GERC members. Jerry reviewed the GER Plan
document and noted that the GERC is responsible to the following groups: City Council, City
management, the employee -members, the retirees, and the deferred vested members with future
benefits. He noted that these five groups may have very different ideas about what constitutes a
"best plan" and that even within the employee -member group, there is a great difference of opinion.
Dave Agee commented that the GERC needs to take a long-term view of the Plan and must consider
the diverse needs. Russ Proctor asked what the GERC wants to accomplish with this Plan? He
pointed out that the Committee's consensus so far is that an "adequate" or "reasonable" retirement
income after 30 years of service would provide 800/a of pre -retirement income and that this 80%
would include Social Security, the 457 deferred compensation plan, and the money purchase plan
(MPP), in addition to the GERP benefit. It would also include such things as home equity, pension
benefits from other employers, personal investments, real estate, etc., all of which are unknown to
the GERC. Laurie Harvey outlined a sample scenario for those wishing to take early retirement and
still receive their full GERC benefit: Between ages 55 and 59-1/2, exhaust 457 account. At age 59-
1/2, begin withdrawing funds from MPP and exhaust by age 65. At age 62 beginning drawing Social
Security (or wait until age 65). At age 65 begin receiving full GERC benefits.
The GERC historically has viewed the GER Plan as providing a "floor" of security to which the other
benefits can be added. More recently the GERC has promoted educating employee -members about
the GER Plan and what it provides, along with information about current retirement trends, and
retirement income options available to them outside the GER Plan. There was lengthy discussion of
opposing views, such as should the GERC continue to provide this dependable benefit, allowing no
member access to the benefits prior to age 55; or should there be a change to a "self-determination"
system which provides employees with a set amount that they could control?
Other questions discussed were: What does the GERC want to encourage --long-term employees?
Retirement at 50? 55? 60? 65? Does the City lose potential employees because its retirement
benefits do not measure up to those of the private sector or other governmental agencies? Is there
a correlation between long-term employees and higher rates of job boredom and "bum -out" or on-
the-job injuries? Because the trend is for employees to retire earlier and live longer, and retirement
benefits must be paid over a longer period of time, should the size of the retirement fund be
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GERC Minutes - February 6, 1997
increased? How can a cost -of -living adjustment (COLA) that benefits only those who contributed
to it, be included in the GER Plan? What changes can be made that would make the Plan more
equitable to current retirees? Those soon to retire? Those in mid-life? Younger employees? Short-
term employees? Who should be responsible for investment risk-- investment professionals or the
employees themselves, with education provided by the GERC? Could a reduced lump -sum benefit
be provided to retirees? Is there a way for employees to "pre -pay" from their own income, to provide
for early retirement or COLAs, which would be equitable for those in lower -paid positions?
CONCLUSION/NEXT STEPS: Alan will discuss with Greg Tempel some steps that Metro
Wastewater District has taken in relation to COLAs and lump -sum payments. Russ will calculate a
scale showing the current 4.1% GERP contribution over a 10 to 35 year period in both defined
benefit and defined contribution plans. Russ will also calculate the cost of a 2% COLA if
implemented for existing retirees only (not including a catch-up provision). He will also calculate the
cost of a reasonable COLA (between 1 and 1.4% based on the current CPI) for future retirees, which
Alan could take to the Council Finance Committee for discussion. Laurie will provide the members
with an outline of her suggestion above on one way to utilize 457 funds, MPP funds, and GERC and
Social Security benefits to phase in various kinds of income and benefits beginning at age 55. Jerry
asked Tun Hume to work with Dave Agee and Kevin Westhuis to review and revise his draft of the
philosophy. This discussion will be continued at the March meeting.
4. OTHER BUSINESS
A. Personal Retirement Planning Statements
MAIN POINTS: Any changes to the "Personal Retirement Planning Statement" (PRPS) forms, must
be approved at the next meeting to meet the distribution target date. Tun Hume has reviewed the
comments from last year's questionnaires.
CONCLUSION/NEXT STEPS: Jim will bring suggested changes to the next meeting.
B. COMMITrIITY SERVICE OFFICERS PROPOSAL
MAIN POINTS: Laurie advised the Committee that the Community Service Officers (CSOs) of the
Police Department are discussing the possibility to "opt out" of the GERC and move to the police
officers plan.
CONCLUSIONS/NEXT STEPS: The CSOs are working with J. R. Duncan in Human Resources
and will likely come to the GERC with a proposal.
C. GERC REPLACEMENT MEMBER
MAIN POINTS: Jerry will complete his GERC term in June and City Council will need to appoint
a new member. It was noted that if a non-member had not already been appointed (Dave Agee), that
retirees and vested terminated members could be advised that they would be eligible to apply.
CONCLUSION/NEXT STEPS: Jerry will work with the City Clerk's office on a flyer to advertise
this GERC vacancy among City employees.
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GERC Minutes - February 6, 1997
AGENDA & SCHEDULE FOR NEXT MEETING
The next meeting will be Thursday, March 6th at 1:15 pm in the Council Information Center
(CIC) of City Hall West. The agenda will include:
1. Plan Member Comments/Citizen Participation
2. Investment Report for 4th Quarter and Year -End, 1996
3. Preliminary COLA Costs for 1998 Budget
4. Policy Statement for Lump-sum/Rollover Payments (for monthly benefits of less than $100
only).
5. Final Input on Format for 1997 PRPS Forms
6. Discussion on Annual Valuation Report Assumptions
7. Credit for Part-time Service: Administrative Process for Annualizing Pay & Pro -Rating
Service (Laurie, Russ & Linda Brown)
8. Philosophy Discussions (lump -sums, COLA, structuring of DB and DC Plan, wording
from Tim Hume & group)
9. Overview of January Conference & ICMA Profile Analysis Update - Alan
ADJOURNMENT
The meeting was adjourned at 3:43 p.m.
FUTURE MEETING SCHEDULE:
The General Employees Retirement Committee normally meets at 1:15 p.m. on the 1 st Thursday of
each month in the Council information Center, City Hall West.
THURSDAY, MARCH 6, 1997
THURSDAY, APRIL 3, 1997
THURSDAY, MAY 1, 1997
THURSDAY, JUNE 5, 1997
THURSDAY, JULY 10,1997"Date changed because of holiday*
THURSDAY, AUGUST 7, 1997
THURSDAY, SEPTEMBER 4, 1997
THURSDAY, OCTOBER 2, 1997
THURSDAY, NOVEMBER 6, 1997
THURSDAY, DECEMBER, 4, 1997
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