HomeMy WebLinkAbout2005 - Retirement Committee - Annual ReportCity of Fort Collins
General Employees' Retirement Plan
General Employees' Retirement Committee
2005 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 2005 actuarial
report, prepared by Milliman USA, Actuaries and Consultants indicates that as of January 1, 2005, there
were 569 members in GERP of whom 324 were active members who continue to accrue benefits under the
Plan, including 3 partially vested and 321 fully vested employees; 132 retirees and beneficiaries currently
receiving benefits; and 113 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, 2005). By this measure, the Plan is fairly
well funded, since the actuarial value of plan assets covers 78.9% of the present value of future benefits,
and the market value of plan assets covers 79.0% of the Present Value of Future Benefits. The Present
Value of Future Benefits is $46,404,475 and the Market Value of Assets is $36,661,730. 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 7.5%, as of January 1, 2005.
According to a special study by Milliman, the Plan will be under -funded by a projected $8.9 million in
2023. The City Manager asked the Finance Director to request the additional contributions through the
Budgeting For Outcomes process. The 2007-2007 Budget contains a phased -in approach for the General
Employees' Retirement Plan to fund predicted shortfalls of $700,000 over a four-year time frame with a
$200,000 increase in fiscal years 2006 — 2008 and a $100,000 increase in 2009.
In 2005, the Committee was composed of Susan Lehman, Chair, Advance Planning; Jim O'Neill, Vice -
Chair, Purchasing and Risk Management; Michele Hays -Johnson, Utilities, Water Production; Bill Switzer,
Utilities, Financial Operations; Dottie Nazarenus, a retired Plan member; and, Chuck Scest, Finance
Director.
Staff support for the Committee included Ann Wardle, Finance, Secretary; Debbie Weedman, Human
Resources; Greg Tempel, Assistant City Attorney; and Julie Depperman and Harold Hall, Finance, as staff
support for investments.
COMMITTEE HIGHLIGHTS FOR 2005:
STANDING RULES
Standing Rules for the GERC were reviewed and revised as of March 3, 2005. The only change is monthly
meetings for the Committee will be held on the second Thursday of each month.
215 North Mason Street • 2nd Floor • PO. Box 580 • Fort Collins, CO 80522-0580 • (970) 221-6788 • FAX (970) 221-6782
General Employees' Retirement Committee
2005 Annual Report
January 26, 2005
Page 2 of 2
PERSONAL RETIREMENT PLANNING STATEMENTS (PRPS)
The GERC had the PRPS prepared by the actuary, Milliman USA, and distributed them to individual
members in the Spring of 2005.
General Employees' Retirement Plan Summary — Update to Reflect Plan Amendments
The Committee completed the update of the General Employees' Retirement Plan Summary to incorporate
all Plan amendments and restatements. The revised Plan Summary was adopted in December 2004 and
was posted to the web site in the spring of 2005.
RETIREMENT PHILOSOPHY
The Committee continues to monitor investment returns and to have discussions with Milliman USA
regarding our retirement philosophy. Thus far we have not determined changes that may be necessary
considering the state of investment returns.
INVESTMENT RESULTS
The Annual Rate of Investment Return was 9.5% as of December 31, 2004 compared to 18.88% as of
December 31, 2003. The Total Market Value of Assets was $36,661,730 as of January 1, 2005, compared
to $34,107,332 as of January 1, 2004; an increase of $2,554,398.