HomeMy WebLinkAboutRetirement Committee - Minutes - 05/21/1998City of Fort Collins
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FORT COLLINS GENERAL EMPLOYEES RETIREMENT COMMITTEE
MAY 21, 1998 MEETING MINUTES
COUNCIL LIAISON: Mayor Ann Azari
COMMITTEE MEMBERS PRESENT:
Jim Hume, 221-6776
Dave Agee, 221-6681
Alan Krcmarik 221-6788
Kevin Westhuis, 224-6156
Patti Teraoka, 221-6715
OTHERS PRESENT:
Russ Proctor, Jeff Kraft, Evonne Dunn, Watson Wyatt Worldwide,
the City's actuarial firm
Laurie Harvey (Staff Support - Human Resources)
Greg Tempel (Staff Support - Legal)
Bob Eichem (Staff Support - Investments)
Judi Pino (Staff Support - Visiting Secretary)
CALL TO ORDER: Chairperson Kevin Westhuis called the meeting to order at 1:20 p.m. in the Council
Information Center of City Hall West.
APPROVAL OF MINUTES: Because this was not a regular meeting, the minutes from the May 7th
meeting are not available for approval. They will be presented at the June 4th meeting.
DISCUSSION TOPICS:
GER PLAN MEMBER(S) COMMENTS/CITIZEN PARTICIPATION:
Dave Agee said there is concern over the June educational sessions and June election date because people
may not be able to make the meetings during this busy time of year. The end of July for the election
would be ideal. He suggested that as we get to the end of June and the number of people who have not
made the educational sessions is determined, we could have another session.
Kevin Westhuis announced that City Council approved the Lump Sum proposal recommended by the
GERC. The Executive Lead Team (ELT) asked a lot of questions and were supportive overall. Diane
Jones qualified that the ELT's comments were made as opinions and should not be construed by the
GERC as directives.
300 LaPorte Avenue • P.O. Box 580 • Fort Collins, CO 80522-0580 • (970) 221-6788 • FAX (970) 221-6782
GERC Minutes - May 21, 1998
Kevin had received inquiries regarding the GER Committee member opening (Dave Agee's position
expires June 30). Alan Krcmarik said he knows the Clerk's Office is setting up interviews with the
Council members for the applicants, but does not know the selection schedule.
"To GERP or Not to GERP" informational flyers were sent with paychecks advising employees of the
upcoming educational sessions. Kevin will do posters and voicemail to employees in an effort to make all
employees aware of the upcoming educational sessions and subsequent selection process.
2. FINALIZING PRESENTATION INFORMATION FOR EDUCATION SESSIONS
Russ Proctor handed out information as a guideline for discussion of the following points:
A. SALARY
MAIN POINTS: There was concern with using 4.5% as the annual salary increase rates most people are
receiving closer to 3%. Russ said historically, the 4.5% increase is more accurate over the course of a
career. Kevin asked if a worksheet would be available for figuring out future amounts. Russ said he
could but ICMA RC should do that.
CONCLUSIONS/NEXT STEPS: It was the consensus to address 3% issue right at the beginning and
explain why 4.5% is being used. Individuals will then have the opportunity to review their individual
figures.
B. FINAL AVERAGE PAY (FAP)
MAIN POINTS: This figure shows $98,000 by the year 2028, which was based on $30,000
compounding at a 4.5% increase per year through 2028. There was much concern that this figure would
not look realistic to a lot of employees and it might be more feasible to show 10 years service based on
the $30,000 annual salary. Tim Hume feels that people with 15 plus years of service will stay in the
GERP anyway. Russ reminded that those attending will have a handout with their personal projections.
C. ROLES OF ELT AND GERC
MAIN POINTS: Russ asked what role the ELT has and the members were reminded of Diane Jones'
point that ELT is there to offer opinions only, not recommendations. The ELT's assistance in
encouraging employees to attend the information session would be helpful. The GERC will make a
recommendation to City Council, which then will make the decision as stated in the City Code.
D. REPLACEMENT MPP
MAINPOINTS: There was concern that the new MPP would be confused with the current 401(a) MPP
available to employees. The term "replacement MPP" was used only in the beginning of the document to
distinguish between the two, but there is wording that indicates use of MPP throughout the document
refers to Replacement MPP. It was agreed to leave it as "MPP".
GERC Minutes - May 21, 1448 •
E. SPOUSAL APPROVAL
Greg Tempel confirmed no spousal approval is required on the election form.
F. MPP--ANNUITY PURCHASE
If an individual elects to move to the MPP, when they retire, could they then purchase an annuity and
does ICMA RC provide annuities? Laurie Harvey said ICMA RC will make installment payments if
someone requests that. It cannot, however, be called an annuity.
G. FREQUENTLY ASKED QUESTIONS (FAQs)
MAIN POINTS: In calculating the lump sum, when does interest accrual begin? Russ said that would be
the date of hire.
Can non -active (deferred vested) GERP members roll into MPP? Russ said they can get a lump sum for a
vested term but cannot roll it over. They are not a "covered employee" at the time this change is made.
They should be able to roll it over into their current 401 if ICMA RC allows that.
Laurie asked if employees roll money into the new 401(a), will that money be available to borrow
against? Jerry Huggins of ICMA RC could probably answer whether that is feasible, but Greg advised
that the Committee not commit to this even if ICMA RC permits it. The wording should say "may be
able to borrow if the Plan allows."
3. PLAN DESIGN
A. WHAT HAPPENS TO NEW HIRES AFTER 1/1/99?
MAIN POINTS: If the replacement plan is offered, new employees hired after 1/1/99 will automatically
be enrolled in the Money Purchase Plan (MPP) after six months of employment. Reasons: The City's
philosophy is changing and the MPP fits the Total Compensation plan better. It meets the employee's
needs and administratively it makes more sense to only have one plan.
B. WHAT HAPPENS TO NEW HIRES DURING 1998?
MAIN POINTS: New employees hired in 1998 will not receive a personalized statement because no data
is available now. They may attend the sessions and it may be necessary to have another round of
information/selection in 1999 for these employees.
CONCLUSION/NEXT STEPS: The Committee will send another communication that addresses this,
so that employees hired after 7/1/98 will not be excluded or surprised. The Committee will discuss this
in future meetings so that employees with 1998 hire dates will not fall through the cracks.
C. VESTING
GERC Minutes - May 21, 1998
MAIN POINTS: The GER Plan has graded vesting over five years, but the MPP is based on immediate
vesting (after the first six months of employment). What about those who are partially vested now who
transfer to the MPP?
CONCLUSION/NEXT STEPS: There would be immediate vesting upon transfer to the MPP, and the six
month waiting period would not apply. Jeff said that if you transfer the entire GERP amount (not just the
percentage the employee was vested at the time of transfer), it would be easier to keep all the GERP
funds together. It would be an incentive to someone in GERP to go to the MPP and be fully vested.
If plan members forfeit their contributions, what happens under the replacement plan? Are they used to
reduce contributions or reallocated? The forfeitures would go wherever the MVP says it goes.
D. REPLACEMENT MVP CAN BE SEPARATE OR COMBINED PLAN
MAINPOINTS: The issue is whether to use the present 401(a) plan as the new MPP or whether to
have a new, separate MPP just for GERP rollovers. Laurie feels many employees would prefer a
combined plan, as it is less confusing and eliminates additional paperwork.
CONCLUSIONINEXT STEPS: Jerry Huggins of ICMA RC is researching the feasibility of combining
the plans and whether there would be additional fees if a new MPP was created. Greg advised that no
definite answer should be given until all the questions are answered.
4. LOGISTICS
A. PERSONALIZED STATEMENTS
MAINPOINTS: The statements must be accurate and timely. Russ' understanding is that ICMA RC
will provide the data for the personalized statements and the City will print the statements. Evonne Dunn
suggested that there be a disclaimer on them indicating the information provided by ICMA RC is accurate
to the best of our knowledge and has been provided to assist with decision making only.
The statements can be stuffed in #10 window envelopes and the packets could be in 9" x 12" envelopes.
Russ also suggested a cover sheet explaining what the sessions are about, the choices, and when to
attend. This could serve as a summary to the guide.
B. DISTRBIUTION OF FAQ INFORMATION, GERP HOTLINE QUESTIONS, AND HUMAN
RESOURCES
MAIN POINTS: Ideas were exchanged on how best to answer frequently asked questions, voicemail
questions, and calls to Human Resources. Responses should be at least every two weeks. Laurie will
check into getting the GERP set up in email as an option.
GERC Minutes - May 21, 1498 •
C. _ PRESENTATION/GUIDEBOOK
MAIN POINTS: Watson Wyatt will finalize the draft on Tuesday and have it printed and bound into a
booklet. These will be shipped to the Lincoln Center office.
D. DISTRIBUTION
MAINPOINTS: The Committee discussed methods to track those who attend the presentations and
receive their information packets. Sign -in sheets were suggested, as well as initialing a printout of all
GER Plan members. Follow-up will involve matching selection forms with the list of those attending. It
was suggested that all selection forms be returned, whether the employee elects to change or not.
Follow-up with non -responders would also be helpful.
AGENDA & SCHEDULE FOR NEXT MEETING
The next regular meeting will be Thursday, June 4th at 1:15 pm in the Council Information Center (CIC)
of City Hall West. The agenda will include:
1. Plan Member Comments/Citizen Participation
2. Benefit Commencement Question from Former Employee on Disability
3. Information Letter to Deferred Vested Employees
4. Feedback from Presentations & Mechanics of Follow-up on FAQ, Hotline Questions.
5. Joyce Clifton Rollover Response
6. W W W Contract Discussion
7. Use of Year-end Pay Rates on PRPS
8. Moving Future Meeting Sites
9. Regular Investment Review
10. Other Business
ADJOURNMENT: As Kevin had to leave at 3:50 p.m. for a prior commitment, Tim Hume adjourned the
meeting at 3:55 pm.
GERC/GERP WEB PAGE ADDRESS:
www.ci.fort-coflins.co.us/CITY HALIJBOARDS_CON MISSIONS/RETIREMENT/index.htm
GERC Minutes - May 21, 1998
FUTURE MEETING SCHEDULE:
The General Employees Retirement Committee normally meets at 1:15 p.m. on the 1st Thursday of each
month in the Council Information Center, City Hall West.
THURSDAY, JULY 9, 1998*
THURSDAY, AUGUST 6, 1998
THURSDAY, SEPTEMBER 3, 1998
THURSDAY, OCTOBER 1, 1998
THURSDAY, NOVEMBER 5, 1998
THURSDAY, DECEMBER 3, 1998
*Because the July meeting falls so close to the observance of Independence Day (on July 3rd), it was
moved to the next Thursday, July 9 th, 1998
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