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HomeMy WebLinkAboutRetirement Committee - Minutes - 02/12/2015General 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 FEBRUARY 12, 2015 1:15 TO 2:32 P.M. 215 N. MASON—ROOM 2A COMMITTEE MEMBERS PRESENT: Angelina Sanchez-Sprague, Chair John Voss, Vice Chair John Lindsay Rodney Albers David Cox COMMITTEE MEMBERS ABSENT: Bill Switzer (excused) OTHERS PRESENT: Janie Appleton Harold Hall Chris Donegon Joel Stewart, Milliman Katie Antoline, Milliman Claire Turney Meeting called to order at 1:15 p.m. Citizen Participation and Plan member Comments David Cox said that an employee at the Wastewater Plant is decreasing to part-time and wondering how that would affect their plan. Response: the plan will be adjusted by decreasing the credits to match actual hours worked. Janie Appleton said that the employee can call her with any questions. Approval of Minutes from January 8, 2015 John Lindsay moved to approve the minutes. John Voss seconded. Minutes approved unanimously. Election of Officers Rodney Albers moved to keep Angelina Sanchez-Sprague as Chair and John Voss as Vice Chair. Angelina asked for any additional nominations, no suggestions were made. So, Angelina asked that the motion by Rodney be voted on. John Voss seconded the motion. The motion carried unanimously. 2 Angelina Sanchez-Sprague stated that this would be the last year due to her approaching her term limit. She said she is willing to serve another year, but that someone else should step forward in 2016 to serve as Chair. Review Actuarial Assumptions for January 1, 2015 Valuation (Joel Stewart) Joel Stewart presented the Actuarial Assumptions for January 1, 2015. Addressing the Demographic Assumptions: He noted that the plan has been using RP-2000 tables with a static projection to 2021. There was a new table released in 2014, but it excluded all public plan data. So, Joel stated this table may not accurately reflect the mortality rates that the plan actually experiences. In addition, since the plan is closed, the new table is not very effective since it predicts mortality for the addition of new younger members. Joel recommended continuing to use the RP-2000 tables, but to add a “generational table” which builds in the projection scale on a participant by participant basis. The estimated increase to liability is approximately 0.5% to 2.0%. The Committee decided to agree with Joel’s suggestion, but would wait to vote on all of the assumptions at once at the end of the presentation. Addressing the Withdrawal (Termination) Assumptions: in the past 5 years, this assumption has been reasonably accurate. He recommends no change. The Board took no action to change either the Withdrawal (Termination) Assumption. Addressing the Retirement Assumptions: Joel recommended no change to the Retirement Assumptions which were updated in 2012 and have been reasonably accurate since. The Board took no action to change the Retirement Assumption. Addressing the Form of Payment (Lump Sum Election): Joel said that we currently assume 30% of retirees will elect a lump sum, an assumption that is supported by the last 5 years’ average. Joel recommended no change. The Committee decided to make no change at this time. Addressing the Disability: Joel said that the plan experiences significantly fewer disablements versus retirement and withdrawal, so he recommended no change. The Board took no action to change the Disability assumption. Addressing the Inflation Assumption: the plan has a current assumption of 2.5%. In the 2014 Trustees Report, the Social Security Administration stated a 2.7% increase and the most recent Milliman CMO has a long-term inflation assumption of 2.3% beginning in 2019. So, Joel recommended no change to the assumption. The Board took no action to change the Inflation assumption. Addressing the Investment Return Assumption: the assumption is currently at 6.5% per annum. Joel recommended no change to the assumption since it is in between the Target fixed income allocation at 6.42% and the Current fixed income allocation at 6.61%. The Board took no action to change the Investment Return assumption. Addressing the Salary Increase Assumption: Since the plan is closed, the majority of the participants are age 55 or older, with expected merit increases less than 0.5%. Joel recommended no change to the assumption. The Board took no action to change the Salary Increase assumption.