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HomeMy WebLinkAboutRetirement Committee - Minutes - 07/21/1987• 0 GENERAL Board Members Present Also Present: MINUTES EMPLOYEES JULY 21, 1987 MEETING Debra McClurkin Angie Powel Mollie Mercer Alan Krcmarik Dennis Sumner Don Mazanec Mike Powers Pete Dallow Pam Stultz Donna Groves December 31, 1987 Actuarial Report PENSION Mr. Mazanec, Consulting Principal of Mercer-Meidinger-Hansen was available to address concerns and questions regarding the Actuarial Report. Exhibit 1 is a window comparison of the plan reflecting the January 1, 1986 and January 1, 1987 status. The change of status is basically due to the number of employees who opted to take advantage of the early retirement offered during 1986. The unfunded liability went from zero to $146,547, the normal costs increased from $486,401 per year to $537,423. There are some corrections that should be noted on this exhibit. The projected City contribution should be based only on the payroll percentage of 3.560%. The $227,000 contribution has not been made to the plan since 1985. This will not have any adverse effect on the unfunded liability. The pension fund vas also debited $81,000 which should have come from the general fund. After the correction has been made the unfunded liability will be reduced by that amount. Exhibit 2 shows how the normal cost rate of 3.560% was determined. Exhibit 3 is a new format included in this year's report as required by the Governmental Accounting Standards Board. It is a disclosure measure of the benefit obligation. Exhibit 4 reflects the distributions of employees through the plan based on age, years of service and salary. Exhibit 5 is statistics of active members as well as retired and vested terminated members. Exhibit 6 summarizes the assets as of December 31, 1986. Exhibit 7 shows the asset changes comparing the January 1, 1985 value to the December 31, 1986 value. It includes the transfer of the $81,074 to ICMA which occurred when the department heads were removed from the plan. The $81,074 was supposed to be taken from the general fund and not the pension fund. This correction will be made as mentioned earlier. Exhibit 8 determines the value of assets as of December 31, 1986. It takes into account the contributions and the interest income and we have an appreciation amount of $38,482 which will also have a lessening effect on the unfunded liability. Molly Mercer asked if government were to move to a five year vesting program what effect would it have on the City of Fort Collins. Mr. Mazanec replied that it would have very little effect. It could result in a larger number of benefit calculations to come back at around $50.00 per month just because of the obvious increase in termination with vested rights. Angie Powel asked for clarification regarding five year vesting. Mr. Mazanec answered that Congress passed legislation requiring five year vesting for some plans beginning after 1988; however, it does not include governmental. In the future, governmentals may vent to convert their plans. Next year Mercer-Meidinger-Hansen will run the five year vesting so it can be compared to the current 10 year vesting the City now uses. Deb McClurkin asked if the five year vesting breaks down into percentages. Mr. Mazanec said it did not, that it is five years, 100%. The City may want to look at changing the plan and raising the lump sum limit from $50.00 per month to $100.00. Mr. Mazanec also noted that in the actuarial figures, five employees were included that should not have been. The plan also picked up four employees with prior employment which increased the unfunded liability. These were transfers from Fire and Police. Pam Stultz added that Mercer-Meidinger-Hansen was picking up the actual hire date rather than the transfer date. Molly said several employees are included that have previous service with the City. Draft of Employee Booklet Total base pay as described on page 3 will be clarified as far as %hat is included and what is excluded. It was suggested that several non -board members should read the draft and make comments. Another draft will be prepared reflecting the changes and corrections and will be forwarded to the City. At that time another meeting will be scheduled to discuss the draft. General Discussion Molly Mercer asked if the year end clean up could be submitted to Mercer-Meidinger-Hansen around October 1 rather than waiting until the end of December. Mr. Mazanec responded that it would be a good time of year and there be no problem. If the calculations come back and some are around $50.00 per month, these should be held until the time that retirement benefits are requested by the employee and at that time request a lump sum benefit. Everyone except board members were excused at this time. ----------------------------------------------------------------------- Deb McClurkin welcomed Dennis to the committee and was given a brief description of the process when an employee requests retirement benefits. Scheduled Meetings During the past couple of years, particularly since office automation, the General Employees Retirement board has not met quarterly as required. Deb asked if there would be objections to setting scheduled meetings. Everyone felt it would be worthwhile, that it would give the board more momentum and that small details could be taken care of correctly. Appreciation Luncheon Angie recently sent electronic messages to board members asking if they would be interested in taking Don to lunch as a token of appreciation for his participation as a board member for two years. Everyone agreed they would like to do this. Angie will contact Don for convenient date and inform the rest of the board. Chairperson Deb McClurkin asked to turn the chair over to another board member. She has served for approximately a year and a half and the position should be rotated each year. It was moved to offer the chair to Angie Powel. She accepted and will assume the responsibility immediately. General Discussion Molly Mercer asked Alan if he thought we should be looking at other pension plans. Alan responded that he felt we should constantly be reviewing the current plan and keep track of any possible changes. Perhaps some of the board members should attend some of the GFOA pension conferences. It was agreed that information that Alan receives will be circulated to the board members for their review. Next Meeting Next scheduled meeting will be August 13 at 10:30 am in the Finance conference room. The quarterly investment report will be discussed and Gwyn Strand will be invited to give a short presentation regarding the investment of the pension funds. If further items need to be discussed, please send them to Donna Groves and she will include them on the agenda. The meeting was adjourned at 12:40 pm.