HomeMy WebLinkAbout2007 - Retirement Committee - Annual ReportGeneral Employees' Retirement Committee
2007 Annual Report
The General Employees' Retirement Plan (GERP) is managed and administered by the General
Employees' Retirement Committee (GERC) in accordance with the terms of the Plan. The 2007 actuarial
report prepared by Milliman Inc. indicates that as of January 1, 2007, there were 541 members in GERP of
whom 274 were active members who continue to accrue benefits under the Plan, 127 retirees and 16
beneficiaries currently receiving benefits; and 124 vested terminated employees.
One way to look at the adequacy of Plan funding is to compare the value of benefits under the Plan terms
to the value of Plan assets as of the valuation date January 1, 2007. By this measure, the Plan is fairly well
funded, since the actuarial value of plan assets covers 77.9% of the present value of future benefits, and the
market value of plan assets covers 94.3% of the Present Value of Future Benefits. The Present Value of
Future Benefits is $50,187,981, and the Market Value of Assets is $43,322,185. The Present Value of
Future Benefits includes benefits earned to date plus the value of benefits anticipated to be earned for all
expected future service by current participants. The market value of plan assets exceeds the present value
of accumulated Plan Benefits by 11 % as of January 1, 2007.
According to the actuarial report and other information from Milliman, the Plan's funded status is
improving. The period of additional contributions has been reduced by five years from the prior report. The
City of Fort Collins Finance Committee and Millman studied the under funding and recommended the
following funding strategy. The 2008-09 Budget contains a phased -in approach for the General
Employees' Retirement Plan to fund predicted shortfalls including $400,000 in additional contributions
2008 and 2009 and $700,000 in 2010-2017.
In 2006, the Committee was composed of Jim O'Neill, Chair, Purchasing and Risk Management, Bill
Switzer, Vice -Chair, Utilities, Financial Operations; Michele Hays -Johnson, Utilities, Water Production;
Dottie Nazarenus, a retired Plan member; Jim Lathrop, a citizen and, Chuck Seest, Finance Director.
Staff support for the Committee included Heather Shepheard, Finance Secretary; Janie Appleton, Human
Resources, Greg Tempel, Assistant City Attorney. Tracy Hoffman and Harold Hall, Finance Department
provided staff support for investments.
COMMITTEE HIGHLIGHTS FOR 2007:
PERSONAL RETIREMENT PLANNING STATEMENTS (PRPS)
The GERC had the PRPS prepared by the actuary, Milliman, and distributed them to individual members in
the April of 2007.
General Employees' Retirement Plan 5a' Amendment — Council passed resolution 2007-29 for the
purpose of shortening the length of time between an employees retirement date and the initial
benefit payment.
General Employees' Retirement Committee
2006 Annual Report
January 11, 2007
Page 2 of 2
RETIREMENT PHILOSOPHY
The Committee continues to monitor investment returns and to have discussions with Milliman regarding
our retirement philosophy.
MEMBER EDUCATION
Over 80 Plan members attended GERC information seminars put on by HR.
INVESTMENT RESULTS
The Annual Rate of Investment Return was 13.63 % as of December 31, 2007 compared to 14.37% as of
December 31, 2006. The Total Market Value of Assets was $45,599,451 as of January 1, 2008, compared
to $43,322,185 as of January 1, 2007; an increase of $2,277,266. 1
' Final results are subject to adjustment of investment balances reconciled to the general ledger which occurs in the
first quarter of each year.