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HomeMy WebLinkAboutRetirement Committee - Minutes - 03/12/2015General Employees Retirement Committee 215 N. Mason 2nd Floor PO Box 580 Fort Collins, CO 80522 970.221.6788 970.221.6782 - fax fcgov.com GENERAL EMPLOYEES’ RETIREMENT COMMITTEE MINUTES MARCH 12, 2015 1:15 TO 2:30 P.M. 215 N. MASON—ROOM 2A COMMITTEE MEMBERS PRESENT: Angelina Sanchez-Sprague, Chair John Voss, Vice Chair John Lindsay Rodney Albers Bill Switzer COMMITTEE MEMBERS ABSENT: David Cox (unexcused) OTHERS PRESENT: Harold Hall Jenny Lopez Filkins Joel Stewart, Milliman Katie Antoline, Milliman Claire Turney Meeting called to order at 1:15 p.m. Citizen Participation and Plan member Comments None Approval of Minutes from February 12, 2015 Jim Lindsay moved to approve the minutes. Rodney Albers seconded the motion. Minutes approved unanimously. Draft of the January 1, 2015 Actuarial Valuation Joel Stewart and Katie Antoline presented a summary of the January 1, 2015 Actuarial Valuation Draft. The purposes of the valuation are to review demographic and financial experience, to determine the funded status of the plan and to provide financial reporting information pursuant to accounting standards. Highlights of the Report:  The Market Value of Assets is $45,722,416 for 2015, which is an increase from 44,692,556 in 2014.  The Actuarial Value of Assets is $43,191,478 for 2015, which is an increase from $41,530,376 for 2014.  The Funded Percentage from an Actuarial basis is up from 73.9% in 2014 to 74.7% in 2015. 2  The Funded Percentage from the Market Value of Assets basis is down from 79.5% in 2014 to 79.1% in 2015. As of January 1, 2015, there are a total of 431 plan members, a decrease from the 439 active members in 2014. Because this is a closed group, the numbers will steadily decrease. Joel presented the new Life Expectancy table, which detailed the difference between the old Static table and the new Generational table. The new Generational table will better predict the life expectancy of those in the plan. At age 65, the life expectancy increased from 19.3 years to 19.6 years under the new table. Angelina Sanchez-Sprague asked about the roughly 20% unfunded percentage shown in the report. This unfunded amount will need to come from the supplemental contribution given by the City of Fort Collins. Joel calculated that it will take 14 years (through 2028) with a contribution of $1.1 Million per year to fully fund the plan. This time calculation is down from 28 years (through 2042), due to market gains, so the supplemental funding need was decreased by 14 Million. Angelina asked about an AARP article that referenced a reduction in benefits when funding becomes scarce in a retirement plan. Joel said that this article was likely in reference to a new law impacting multiemployer plans. When a multiemployer plan runs out of money, the Pension Benefit Guarantee Corporation (PBGC), a quasi-governmental organization that insures private sector pension plans, steps in and pays out a certain percentage of the participant’s benefits. This law does not affect Government sponsored plans, who are self-insured. Bill Switzer asked about the lump sum payments reported and whether they are within the expected values. Angelina said that per the Actuarial Assumptions presented on Feb 12, 2015, our actual lump sums (of 23%) are under the assumed expected (of 30%). So, we are ok on the assumption. Joel presented the Actuarial versus Market value that shows the removal of the “smoothing” that was allowed in the old accounting method (GASB 27). The new accounting rules require reporting on a market value basis instead of spreading gains/losses over a 5 year period. With the old standard, the liability reported on the City’s balance sheet is $3.7 Mil. Whereas with the new standard (GASB 67/68), the liability that will be reported is $12 Mil. However, the projected cash flow has not changed. Bill asked about the retirement probability table on page 33 (over 65 is at 40%, and 69 & over is at 100%). He wanted to make sure that we are using the correct assumptions. Joel said that the table is based on actual GERP experience data, and is reviewed annually. Bill Switzer made a motion to accept the January 1, 2015 Actuarial Valuation as presented. Rodney Albers seconded the motion. Motion carried unanimously. Monthly Investments and Other Reports (Harold Hall) Harold Hall reported that the total YTD return is 2.70%, and total market value of cash and investments for the Plan is $46,272,078.67. There were no sales or purchases in February and Harold doesn’t anticipate any changes in March.