HomeMy WebLinkAboutRetirement Committee - Minutes - 09/03/1998Admetrative Services •
Finance Administration
City of Fort Collins
FORT COLLINS GENERAL EMPLOYEES RETIREMENT COMMITTEE
SEPTEMBER 3, 1998 MEETING MINUTES
Approved November S, 1998
COUNCIL LIAISON: Mayor Ann Azari
COMMITTEE MEMBERS PRESENT: ABSENT:
Jim Hume, 221-6776
Susan Lehman, 221-6813
Alan Krcmarik, 221-6788
Patti Teraoka, 221-6715
Kevin Westhuis, 221-6156
OTHERS PRESENT:
Russ Proctor & Mark Sanford, Watson Wyatt Worldwide, City's actuarial firm
Deb Weedman, (Staff Support — Human Resources)
Greg Tempel, (Staff Support — Legal)
Bob Eichem & Julie Depperman, (Staff Support — Investments)
Sue Wilcox, (Staff Support — Clerical)
Bruce Michael, former Light & Power employee
Gary Lopez, member from Building and Zoning
Gary Ellis, former Light & Power employee
Mary Jo Upham, member from Utilities
Georgianna Deines, member from Current Planning
Robert Wilkinson, member from Current Planning
Jeff Hill, member from Utilities/W & WW
Butch Bailey, member from Utilities
CALL TO ORDER: Chairperson Kevin Westhuis called the meeting to order at 1:29 p.m.
ADDITIONS TO AGENDA/ITEMS FOR NEXT AGENDA: No changes.
DISCUSSION TOPICS:
1. GERC PLAN MEMBER(S) COMMENTS/CITIZEN PARTICIPATION:
There were no Plan member or citizen comments.
2. APPEALS RELATED TO DB/DC SELECTION PROCESS
MAIN POINTS: Chairperson Kevin Westhuis read the Appeal Hearing Introduction which set forth
the process that would be followed and to outline the circumstances or conditions that would permit the
extension of the DB/DC selection deadline for the individuals who wished to have their selection
accepted. The basic criteria was that through no fault of the employee, the selection form was not filed
300 LaPorte Avenue • P.O. Box 580 • Fort Collins, CO 80522-0580 • (970) 221-6788 • FAX (970) 221-6782
September 3, 1998 GERC Minutes
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in Human Resources by the deadline, August 14, 1998 at 5:00 pm. The appeals were audio taped. The
following members were sworn in and their appeals heard:
A. Gary Lopez, Building & Zoning Department: Gary stated that due to a combination of the
deadline extension granted by the GERC, the uncertainty in the stock market in August, an
extremely heavy workload in early August, and his two -week vacation, his selection form
requesting separation from the GERP was not filed until he returned from vacation a week after the
deadline (August 26, 1998) and then after he was asked about his form by a GERC member.
CONCLUSION/NEXT STEPS: Alan moved that there were no extenuating circumstances and an
extension should not be granted. Jim Hume seconded the motion. The vote was 5-0 in favor of the
motion. Extension denied.
B. Jeff Hill, Utilities/W & W W: Jeff noted that the wording of the deadline on the form "submit to
Human Resources by ..:: ' was not clear. The wording should have stated: " ...received in Human
Resources by ...: ' Jeff put his form in the interoffice mail addressed to HR on August 14, 1998,
and HR received it on Monday, August 17, 1998.
CONCLUSION/NEXT STEPS: Patti Teraoka moved that the circumstances were beyond Jeff's
control and the deadline should be extended to include Jeff s selection form. Alan seconded the motion.
The vote was 5-0 to approve the motion. Extension granted.
C. Georgianna Deines, Current Planning: Georgianna experienced a medical emergency in her
family during the week before the deadline and was away from her office part of that week.
Immediately upon return from the emergency, she filed the form with HR (August 20, 1998).
CONCLUSION/NEXT STEPS: Alan moved that the circumstances were beyond Georgianna's
control and the deadline should be extended to include her selection form. Susan Lehman seconded the
motion. The vote was 5-0 to approve the motion. Extension granted.
D. Mary Jo Upham, Utilities: Mary Jo works away from an office and did not understand the DB/DC
process. Jim Hume visited with her about the appeals process, but did not know the conditions for
the appeals to be considered. Mary Jo forgot to turn in her form and didn't turn it in until the time
of this meeting (September 3, 1998).
CONCLUSION/NEXT STEPS: Jim Hume moved that since there were no extenuating circumstances
which prevented Mary Jo from meeting the deadline, that an extension be denied. Susan seconded the
motion. The vote was 5-0 to approve the motion. Extension denied.
E. Rob Wilkinson, Current Planning: Rob was considering leaving city employment, and had
consulted with City staff about questions related to the timing of his possible departure in relation to
the DB/DC choice. He was referred to Russ Proctor of Watson Wyatt, who was out of town. Rob
did not receive an answer until August 25`", at which time he turned in his selection form.
Confirmed telephone problems at Watson Wyatt contributed to Rob's inability to receive additional
information.
CONCLUSION/NEXT STEPS: Susan moved that the circumstances were beyond Rob's control and
the deadline should be extended to include his selection form. Patti seconded the motion. The vote was
5-0 to approve the motion. Extension granted.
• *September 3, 1998 GERC Minutes
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Alan clarified that Rob would have to work through January 1, 1999, City Council would have to
approve the creation of the defined contribution plan, and the DC plan would have to be implemented in
order for Rob to be able to exercise this choice.
F. Other Potential Hearings. Deb Weedman noted that Crystal Strouse, Robert Christianson, Nina
Lopez, and James Cooper had expressed interest in the appeals process but did not attend today's
meeting. Also, some bus drivers and meter readers had not been contacted because of their work
schedules and they may want to appeal.
CONCLUSIONINEXT STEPS: Patti moved to allow other members to bring their appeals for
extension of the selection deadline to the next meeting on Thursday, September 17, 1998 at 1:15 p.m. in
the CIC. Susan Lehman seconded the motion, which passed unanimously, 5-0.
Gary Lopez asked if he could appeal the GERC's decision to City Council. Greg replied that unless
City Council changed the provisions of the GER Plan, no appeal could be made to City Council. The
appeals process was concluded at 2:30 pm.
3. APPROVAL OF MINUTES: The minutes of the July 21, 1998 meeting will be considered at the
next meeting.
4. ELIGIBILITY OF DISABLED VESTED MEMBERS FOR LUMP -SUM DISTRIBUTIONS
MAIN POINTS: There is still concern that if the GER Plan were changed to allow disabled vested
members to receive single -sum or monthly benefit distributions before age 65, disability benefits would
be offset (reduced) by the amount of the distribution. Sun Life is the current carrier for the City's long-
term disability (LTD) coverage. DebWeedman will provide copies of their contract with the City. This
could significantly impact two individuals who have approached the Committee seeking their retirement
benefits.
Gary Ellis advised the Committee that he left city employment in August, 1996 and was granted long-
term disability benefits, which have been paid by UNUM. However, on 6/l/98 he was informed that he
would no longer receive LTD benefits from UNUM after August 1, 1998. In a letter dated August 19,
1998, they provided Gary a settlement offer, with a September 23 deadline for a decision.
Gary says UNUM no longer considers him disabled. They provided him a survey of jobs suitable for a
person with Gary's physical restrictions at 60% of his former physical effort. Unfortunately, the job
descriptions given are more suited to positions in the Eastern US and there are few or no such jobs in
this area. Educationally, Gary is not prepared for some of the positions and it would require 6 semesters
and 2-1/2 to 3 years of education to be prepared. With the LTD company refusing to pay additional
benefits and no income coming in, Gary turned to student loans, only to find out that the student loan
process takes about a year.
Gary's questions were: 1. If he is no longer eligible for disability benefits, would he be able to take a
lump -sum or rollover of retirement benefits? 2. If he takes the UNUM lump -sum offer, must he wait
out the credited service equivalent in order to take a GERP lump -sum?
Deb Weedman reported that Laurie Harvey had contacted Sun Life with the questions about offsets, but
Sun Life had not found the answers. A representative of Sun Life is to call Greg. In reference to Bruce
Michael's case, if the GERC (assuming Council approval) allowed either a single -sum or monthly
retirement benefit payment to disabled vested members, how would Social Security benefits be
affected? This is something Mr. Michael would have to research.
September 3, 1998 GERC Minutes
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CONCLUSION/NEXT STEPS: Jim Hume moved that the resolution entitled "Amending the City of
Fort Collins' General Employees Retirement Plan to Provide Early Retirement and Single -sum Benefits
for Disabled Vested Members" be recommended by the GERC for approval by City Council at its
October 6 ° meeting. Kevin Westhuis seconded the motion, with a friendly amendment added to make it
effective upon Council approval. Jim Hume accepted the friendly amendment. The vote was 5-0 to
approve the resolution.
5. 1998 ACTUARIAL REPORT
MAIN POINTS: Mark Sanford of Watson Wyatt briefly reviewed the draft of the Actuarial Report for
1998, noting that GASB (Government Accounting Standards Bulletin) #25 and #27 requirements have
been included and the GER Plan is well -funded. The Executive Summary and projections were written
before the DB/DC choice vote of the Plan members.
CONCLUSION/NEXT STEPS: The GERC members will review the material and bring any
comments or questions to the October 15th meeting. At that meeting, the GERC will consider adopting
the Actuarial Report.
6. ELECTION OF OFFICERS
MAIN POINTS: Because both Patti Teraoka and Kevin Westhuis voted to withdraw from the GERP
should City Council provide that option, theoretically, two members of the GER Committee would be
non -Plan members, which is contrary to the Plan provisions. The Plan states that only one GERC
member (besides the finance director, who is an ex-officio member) can be a non -Plan member.
Various options were discussed.
CONCLUSION/NEXT STEPS: Patti stated that, assuming City Council votes to approve the DB/DC
change, she would resign as a GERC Committee member. This would allow Kevin to continue to serve
as a non -Plan member on the Committee. Patti moved that Kevin be re-elected as chairperson of the
GERC for 1998 and 1999 and that Jim Hume serve as the vice chairperson. Alan seconded the motion,
which passed unanimously, 5-0.
7. UPDATE ON DB/DC CHOICE
MAIN POINTS: A. Russ asked for assistance in reconciling the number of names provided to Watson
Wyatt for preparing the MPP beginning balance statements, and number of ballots received. There are
questions about employees hired late in 1997 and during the first 6 months of 1998, and their eligibility
to vote. (An individual must be employed for six months before they are eligible to open an MPP
account and receive the City's 3% matching benefit currently in effect.) Consensus was reached on
those receiving ballots and voting.
B. Kevin will draft a letter confirming the results of the selection process and the anticipated next steps
in the process. This will be sent as email to all employees (hard copy where necessary). Concern
was expressed that the recent drop in the stock market would adversely affect the DB/DC process.
Alan noted that although the stock market dropped about 20% overall, City investments dropped
only 10%. Russ agreed to review the asset value and the benefit payments on a monthly basis to
determine that the conversion to defined contribution process could go forward.
*September 3, 1998 GERC Minutes
Page 5 of 6
C. Stephen Weinstein, the attomey who was hired to review the proposed DB/DC change, advised that
a valuation provided about December 15, 1998 is sufficient to allow the administrative process to go
forward. A special meeting may be called at that time to consider the conversion value and to
sanction the transfer process.
Employees hired in 1998 will still have an education program and the opportunity to move to the DC
Plan without having an adverse affect on the process or the Plan's valuation. Anyone leaving City
employment before 1/1/99 will remain in the Plan and is not eligible to receive the MPP opening
balance. However, they are still eligible for the GERP lump-sum/rollover which was approved June 1,
1998. Russ will need a list of those who left the Plan since 1/l/98, who are eligible for lump -sum or
retirement benefits.
The steps necessary for the conversion to take place were discussed. In a telephone conversation prior
to the meeting, Theresa Meyer of ICMA Retirement Corporation advised that a team needs to be set up
to work out these details. It is anticipated that Theresa, Alan, Deb Weedman from HR, and
representatives from Accounting and Payroll should be involved. Alan will begin to collect the
documentation of the decisions and actions that have occurred to date.
CONCLUSION/NEXT STEPS: Alan Krcmarik moved to accept both resolutions Greg Tempel had
drafted to make the necessary changes to the GER Plan and the MPP Plan. Kevin Westhuis seconded
the motion, which passed unanimously 5-0 to approve. Alan will prepare the agenda item summary for
the October 6 ° Council meeting and Alan, Greg, Kevin, and possibly Russ Proctor will plan to attend
that meeting.
8. CHANGE OF OCTOBER MEETING DATE
Because of scheduling conflicts, Kevin moved to defer the regular October meeting to Thursday,
October 15 at 1:15 pm in the CIC. Susan Lehman seconded the motion, which passed unanimously 5-0.
9. INVESTMENTS
Alan noted that even though there have been large losses in the stock market, the overall percentage of
loss was quite low ---approximately 1%. The US economy continues to be strong, despite difficulties in
the economies of the Far East, Russia, and some parts of South America.
AGENDA AND SCHEDULE FOR NEXT MEETINGS
The next meeting will be Thursday, September 17, 1998 at 1:15 p.m. in the Council Information Center
(CIC) of City Hall West. The agenda will include:
1. Selection Form Appeals
2. Consider approving the July 21, 1998 minutes
3. 1998 Actuarial Report
4. Election of Officers
5. Update of DB/DC Choice Process
6. Eligibility of Disabled Vested Members for Lump -sum Distributions.
Septc... oer 3, 1998 GERC Minutes
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7. Regular Investment Review
ADJOURNMENT
The meeting was adjourned at 4:00 p.m.
GERC/GERP WEB PAGE ADDRESS:
www.ci.fort-collins.co.us/CITY HALL/BOARDS COMMISSIONS/RETIREMENT/index.htm
FUTURE MEETING SCHEDULE:
The General Employees Retirement Committee normally meets at 1:15 p.m. on the 1" Thursday of each
month in the Council Information Center, City Hall West.
**THURSDAY, OCTOBER 15, 1998**
THURSDAY, NOVEMBER 5, 1998
THURSDAY, DECEMBER 3, 1998
THURSDAY, JANUARY 7, 1999
THURSDAY, FEBRUARY 4, 1999
THURSDAY, MARCH 4, 1999