HomeMy WebLinkAboutRetirement Committee - Minutes - 05/06/2004City of Fort Collins
General Employees' Retirement Plan
GENERAL EMPLOYEES' RETIREMENT COMMITTEE
May 6, 2004, MEETING MINUTES
COUNCIL LIAISON: Mayor Ray Martinez
COMMITTEE
MEMBERS
PRESENT:
OTHERS
PRESENT:
Approved, as amended, on June 3, 2004
Dottie Nazarenus, 204-4429
Bill Switzer, 221-6713
Alan Krcmarik, 221-6788
Pat Kahle (Actuary, Milliman USA)��
Greg Tempel (City Attorney's Office)
Debbie Weedman (Human Resources)
Julie Depperman & Ann Wardle (Finance)
Susan Lehman, Chair, 221-6813
Jim O'Neill, Vice Chair, 221-6779
Michele Hays -Johnson, 416-2158
CALL TO ORDER: Susan Lehman called the meeting to order at 1:53 p.m.
PLAN MEMBER COMMENTS: The Committee reserves this place on the agenda to
receive comments from Members of the Plan or the public. There were no comments.
APPROVAL OF MINUTES: Minutes of the April 1, 2004, meeting were distributed.
Jim O'Neill moved approval of the minutes and Dottie Nazarenus seconded the motion.
The Committee approved the minutes unanimously (6-0).
DISCUSSION TOPICS
1. Plan Philosophy: There were no comments on the Plan philosophy.
2. Approval of Actuarial Valuation Report: Alan Krcmarik commented on the
draft Actuarial Valuation Report. Alan noted that the cover letter states, "In preparing
this report, we relied, without audit, on information supplied by the Plan's staff." Pat
Kahle explained that this only means that Milliman does not conduct an actual audit of
the numbers but that they do compare the numbers to the prior year's data for
reasonableness. Although this wording has been used in the past, Alan asked if it
diminishes the report's value. It was agreed to change the wording of this sentence
to read, "In preparing this report, Milliman USA relied on information provided by the
employees of the City of Fort Collins that provide administrative support for the Plan."
The Committee discussed the increase in the Plan's required contribution from 5.69%
for 2003 to 6.35% for 2004. Pat suggested referring readers to page 4 of the report
for details of this change. Alan and Julie Depperman asked Pat to give them a
breakdown of how much of the increase in the contribution requirement was a result
215 North Mason Street • 2nd Floor • P.O. Box 580 • Fort Collins, CO 80522-0580 • (970) 221-6788 • FAX (970) 221-6782
General Employee's Retirement Committee
May 6, 2004, Meeting Minutes
Page 2 of 3
of the change in the inflation assumption and how much was a result of using the
updated Group Annuity Mortality (GAM) table.
Alan asked about the third bullet on page 4 that reads, "...actuarial value of assets
covered 81.9% of the present value of future benefits and the market value of assets
covered 77.1% of the present value of future benefits." Pat said the ratios are not
bad, because the present value of future benefits covers all benefits earned to date
and expected to be earned in the future and compares them to current assets. There
is not an unfunded liability because of use of the Actuarial Cost Method. Pat said
these are figures that have been in previous actuarial reports that may have had more
meaning in the past, and that they are not numbers she normally would present. The
Committee agreed that these ratios could be deleted from the report.
Alan referred to the Asset Gain/(Loss) Table on page 18 and noted that the $838,760
market value gain from 1999 will be dropped from this table next year due to the
smoothing method and said they would have to have about a 12.5% rate of return
this year to maintain the same actuarial value of assets. Alan simply wanted to clarify
the fact that the Plan would need a great year for return on investments for this chart
to not turn more negative than it is now.
The Committee discussed several more wording and formatting changes which Pat
agreed to make. Pat will send an electronic copy of the revised changes to the
Committee before the final version is distributed. (Michele Hays -Johnson left the
meeting at 3:01.) Greg Tempel reminded the Committee that the assumption
changes were approved at the last meeting. Alan moved that the actuarial report be
approved as it was amended today, and Bill Switzer seconded the motion. The motion
passed unanimously (5-0).
3. Update on Summary Plan Description: In light of the fact that the review of
the Summary Plan Description is likely to be time consuming, Alan moved to table this
item until the next meeting, and Dottie seconded the motion. The motion passed
unanimously (5-0).
4. Investment Report & Mutual Fund Compliance Report: Julie distributed the
Investment Report for the Quarter Ended March 31, 2004. As of March 31, 2004, the
market value of the Plan was $34.8 million, an increase of 2.06% or $700,000 from
year-end. The fixed income portfolio yielded 2.19%. The Plan's domestic mutual
funds outperformed their benchmark, the Standard & Poor's 500 Index, gaining
3.39%. The Plan's international mutual funds outperformed the benchmarks as well
and ended with a market value of $5.1 million. The net cash inflow to the Plan for the
quarter was $67,000. Alan reported he and Julie are updating the City's investment
policy and they intend to update the Plan's investment policy as well.
Julie distributed and reviewed a handout of the Quarterly Mutual Fund Compliance
Report. Julie said all of the funds grew in asset value. The Julius Baer and American
Funds are doing well and are rated five star funds by Morningstar. Julie attached a
copy of a printout of the Plan from Morningstar and noted that our portfolio carries an
extremely strong 3.8 star composite rating, with five stars being the highest.
Filename: 2004 GMIN 05 06
General Employee's Retirement Committee
May 6, 2004, Meeting Minutes
Page 3 of 3
Other Business: Deb Weedman reported there was a terminally ill active Member
who needed assistance in understanding the distribution options available to him and
his beneficiary. Greg and Pat helped define the options based on the Plan document.
In order to receive single sum distribution, the Member needed to terminate
employment with the City and sign the retirement benefit form prior to his death. If
the Member died prior to either of these events occurring, his beneficiary would have
received the Plan's death benefit which amounts to approximately 47% of the
actuarial equivalent.
Adjournment: The Committee adjourned at 3:48 p.m.
TOPICS FOR NEXT REGULAR MEETING
The next regular meeting of the Committee will be on June 3, 2004, at 1:45 p.m. in
the Council Information Center of City Hall. The tentative agenda includes:
Plan Member Comments
Approval of Minutes
Plan Philosophy
Update on Summary Plan Description
Monthly Investment Report
Other Business
GENERAL EMPLOYEES' RETIREMENT PLAN WEB PAGE: The General Employees'
web page can be found at www.fcgov.com/cityclerk/retirement.php. The Committee's
2003 Annual Report, 2004 Work Plan, and monthly minutes are available at this site.
2004 Meeting Schedule:
The regular meeting time for the Committee is at 1:45 p.m. on the first Thursday of
each month. The regular location is the Council Information Center at City Hall. For
2004, the Committee has scheduled the meetings as shown below:
3a► uaFy 8 April
FebruaFy3 May 6
PAafeh 4 June 3
July 1 October 7
August 5 November 4
September 2 December 2
Filename: 2004 GMIN 05 06