HomeMy WebLinkAboutRetirement Committee - Minutes - 09/08/1993C O R R E C T E D
FORT COLLINS GENERAL EMPLOYEES RETIREMENT COMMITTEE
SEPTEMBER 8, 1993 MEETING MINUTES
COUNCIL LIAISON: Ann Azari, Mayor
COMMITTEE MEMBERS PRESENT: ABSENT:
Jerry P. Brown Jackie Davis
Dennis Sumner Dave Meyer
Alan Krcmarik (Member & Staff Support)
OTHERS PRESENT:
Mary Crumbaker (Staff Support- Legal Advisor)
Sue Wilcox (Staff Support - Secretary)
Don Mazanec of William M. Mercer, Inc. the City's actuarial firm.
Dave Agee, Staff Committee on Pensions
Opal Dick, Purchasing Division
Pete Dallow, Administrative Services
Janet Meisel, Planning Angelina Powell, ICS
CALL TO ORDER: Chairperson Dennis Sumner called the meeting to order at 9:00
a.m. in the 2nd Floor Conference Room of City Hall West on September 8, 1993.
APPROVAL OF MINUTES: Jerry Brown suggested changing the wording on page 4,
Section 5-B, first paragraph, second sentence of the August 19th minutes to
read: "...defined contribution plan will take some time and could be a
significant expense and therefore should not be undertaken without specific
direction and goals." Jerry moved that the minutes be changed as outlined
above and approved as corrected. Dave Meyer seconded the motion, which
passed unanimously.
ITEMS OF NOTE: Dennis noted that Council Liaison Ann Azari could not be at
this meeting because of a concurrent meeting, but that Alan Krcmarik and he
met with Mayor Azari last week and discussed her views on the work the
Committee has undertaken. She is supportive of the Committee's work and
encourages the Committee to present new and creative ideas to City Council.
Specific points she noted were:
Equity between classified and non -classified employees as related to
retirement options and timeliness of vesting. Differences in
percentage of City contributions are NOT an issue for Mayor Azari,
since this will be addressed through total comp.
Ann emphasized her desire to offer employees options. She emphasized
her support for City employees and desire to encourage systems that
promote and encourage low employee turnover.
The GERC should think in terms of creative options ---let Council
determine if and where limitations exist.
She suggested scheduling a work session with Council in the near future
to explore options for change.
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Dennis also noted that some Committee members are feeling frustrated with the
desire to allow open discussion involving Plan members who attend the
meetings, and the need for the Committee to proceed with the work of the GERP
in a timely manner. Dennis suggested that in an effort to reconcile the two
needs, the GERC adopt a system similar to City Council, where Plan members'
comments will be heard, but limited on time, with no interaction between
speakers and Committee members. He suggested that only Committee members and
staff support personnel be seated at the table, and extra chairs provided for
visitors and Plan members around the table.
REVIEW OF DISCUSSION TOPICS: It was agreed to move item 3 to #2, since this
item was carried over from the last meeting; and to add as item #3 the new
information on the valuation report and the cost of suggested Plan changes.
DISCUSSION TOPICS:
1. MEMBER COMMENTS: Angelina Powell stressed the need to address the needs
of employees who stay less than 10 years and suggested that any options
submitted to City Council be "compartmentalized" with prices attached. Janet
Meisel commented that she would like to see the meeting organized so that
those items of interest to members come first, otherwise it is difficult to
estimate when in a meeting a certain item will be discussed, making it
difficult for employees to attend and participate.
PURCHASING CONCERNS ON SELECTION OF GERP ACTUARY
MAIN POINTS: Dennis explained that Opal Dick (senior buyer), Jim O'Neill,
Purchasing Division Head, Alan Krcmarik, and he met to discuss the purchasing
process. It has been a number of years since a formal bid process or request
for proposal has been undertaken for actuarial services and there have been
questions about how the firm of William M. Mercer, Inc. was chosen.
Don Mazanec of'William M. Mercer outlined the history of actuarial services
for Fort Collins, noting that he originally worked for A.S. Hansen, which was
chosen for the City's actuarial firm. That company was then combined to form
Mercer Meidinger Hansen, which was eventually bought out by William M.
Mercer, Inc. Don also said that the process his firm follows with other
entities is for the entity to prepare a list of the activities it plans to
undertake during the next year and asks Mercer for an estimate of the costs
of services it will need, (much like the estimate we received for the
Education Program) which is then used for the billing of services during the
year. It was noted the numerous changes and ideas considered over the last
few years did not fit this model.
Opal pointed out that by using the request for proposal (RFP) process, the
Committee can increase its knowledge of services available and present
services can be evaluated and validated. This would involve setting the
scope of services, setting standards and deciding on hourly rates. It also
involves evaluating the qualifications of the firm and the individual contact
person.
Opal outlined the process: the Committee determines the services it
anticipates needing in the next year, proposals are solicited, the Committee
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evaluates the proposals and makes a recommendation to the Purchasing
Department, which in turn makes the final choice. All Committee members
could participate in the process or a few members could represent the
Committee. Another option would be for the Committee to choose to stay with
William M. Mercer. In this case, the GERC must offer a statement of the
firm's capability and justify the Committee's need for their services. This
must then be approved by the City manager's office.
Members agreed with the desirability of going through the purchasing/bid
process. There was extensive discussion on the timing of the effort, with
some feeling it would be "changing horses in the middle of the stream" to do
it now and others expressing the feeling that there "never is a 'right'
time". Mary Crumbaker could offer a legal opinion on what is required of the
Committee.
To provide additional data for this discussion, Dave Agee, one of the members
of the Pension Oversight Committee, presented a memo on Pension Issues dated
September 7th, where he reviews the need to address some pension issues
related to IRS requirements. He anticipates going through a Request for
Proposal (RFP) bid process to solicit the services of a consultant. He
suggested that the GERC might solicit services jointly with the POC.
It might be possible to begin the bid process while working to formulate and
propose the currently contemplated plan changes. The plan changes could be
in place by March, 1994, with review of the RFP proposals taking place during
the summer, and a decision in the fall, allowing it to fit into the 1994
budget process for implementation of the new contract in January, 1995.
CONCLUSIONS/NEXT STEPS: Jerry Brown proposed that the 1994 workplan include
targeting the selection of an actuary through an RFP for actuarial services
in January, 1995. Jackie Davis seconded the motion. The vote was 4-0, with
Alan Krcmarik absent from the meeting at this time. Jackie Davis offered to
begin working with Opal on an outline and timeline for this activity.
3. ADDITIONAL INFORMATION ON ACTUARIAL VALUATION REPORT
MAIN POINTS: In an earlier meeting the GERC had asked Don for a revised
"Comparative Summary of Funding Requirements" sheet showing the various
proposed changes the Committee is contemplating, but showing the increase in
cost as a percentage over the present 3.553% contribution. In response to a
question about the error found through the 1993 actuarial report, Don
provided information on the individuals who were inadvertently dropped from
the Plan and who have been reinstated. These employees went from classified
to unclassified positions, but opted to stay in the GER Plan, continue to
receive 3.553% contributions towards retirement, and continue to earn service
credits. They were dropped from the GERP member list provided by the City to
Mercer; this caused the error.
CONCLUSION/NEXT STEPS: Dave Agee is working with Edna Hoernicke, Sue Wilcox,
and Laurie Harvey in Employee Development on procedures to prevent this lapse
from happening again.
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4. PLAN CHANGES
MAIN POINTS: Dave Agee and Ann Turnquist, who are a sub -group of the Pension
Oversight Committee are working on the IRS equity in pensions requirement.
Their aim is to outline the issues at stake and hire a consultant to help
them work out a plan of changes. Dave proposed that a GERC member be a part
of that sub -group in order to insure that GERP interests are represented.
Jerry P. Brown offered to work with Ann Turnquist and Dave Agee. For
convenience this group is being referred to by the initials of the members---
JAD.
There was discussion of how to proceed and in what order to begin to make
changes in the Plan. Some of the changes contemplated involve a very small
amount of funds and others are significantly more costly. This JAD group
would look at all the pension and deferred compensation plans, how they
interact, and the possibilities for changes.
There was discussion on the possibility of proposing immediate changes for
Council consideration. The idea being considered is to propose immediate
improvements in the death before age 55 and the vesting schedule aspects of
the GER Plan and an option for classified employees to participate in the GER
plan and contribute to a defined contribution 401 plan.
CONCLUSIONS/NEXT STEPS: At the next meeting the GERC will discuss a
presentation at a City Council work session. The Committee will decide at
the next meeting what, if any, suggestions for implementation on 1/1/94 will
be presented to Council and the JAD workplan for presentation to Council.
Related to the issue of improved vesting, Dave Meyer will check with Employee
Development to get statistics on turnover rates for new employees. The goal
is to determine a proposal that reduces the time of vesting, while minimizing
the increased accounting costs for "short term" classified employees.
5. ELECTION OF OFFICERS
MAIN POINTS: There was discussion about the succession to the GERC
chairpersonship and the timing of terms of office.
CONCLUSIONS/NEXT STEPS: Jerry nominated Dennis Sumner to continue in the
position of Chairperson and Jackie Davis seconded the nomination. The motion
was unanimously approved. Jackie Davis nominated Jerry Brown to be vice -
chairperson and Alan seconded the motion. The motion passed unanimously.
6. EMPLOYEE TURNOVER
MAIN POINTS: Dave Meyer asked if there was an impact on the fund because
City employees are tending to stay employed by the City of Fort Collins
longer, due to the recent economic and employment conditions. Don Mazanec
explained that he is watching the trends, but that there is no immediate
problem.. If it should continue for some time, it might be significant. He
is seeing this trend consistent among his other clients also. The average
age of City employees is 40.8 years. Thirty-five people left last year.
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CONCLUSIONS/NEXT STEPS: Don will continue to monitor the trends.
ITEMS FOR FUTURE DISCUSSION
1. Possible seminars or workshops to increase GER Committee members'
knowledge of their roles and responsibilities.
2. GERP / Workers Comp / Disability Proposal
3. Settlements with retired employees with low monthly benefit
payments.
4. Monitor progress by staff Pension Oversight Committee.
5. Investment class for members/Public benefit plans workshops.
AGENDA & SCHEDULE FOR NEXT MEETING
Because of schedule conflicts, the next meeting will be moved to Monday.
October 11 at 1.15 p.m. in the 2nd Floor Conference Room. The agenda will
include:
1. Plan Member Comments
2. Exploration of Plan Changes.
3. Pension Oversight Committee Report
4. Report on E.L. Team consideration of GERP/Workers Comp/Disability
proposal.
ADJOURNMENT
The meeting was adjourned at 12:20 p.m.
MEETING SCHEDULE:
The General Employees Retirement Committee meetings are normally held at 1:15
p.m. on the 1st Thursday of each month in the Finance Conference Room. Any
change from that will be noted.
THURSDAY, NOVEMBER 4, 1993 THURSDAY, DECEMBER 2, 1993
THURSDAY, JANUARY 6, 1994 THURSDAY, FEBRUARY 3, 1994
THURSDAY, MARCH 3, 1994 THURSDAY, APRIL 7, 1994
THURSDAY, MAY 5, 1994 THURSDAY, JUNE 2, 1994
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