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HomeMy WebLinkAboutRetirement Committee - Minutes - 02/04/1993a r FORT COLLINS GENERAL EMPLOYEES RETIREMENT COMMITTEE FEBRUARY 4, 1993 MEETING MINUTES COUNCIL LIAISON: Loren Maxey MEMBERS PRESENT: MEMBERS ABSENT: Jerry P. Brown Mollie Mercer Dennis Sumner Dave Meyer Alan Krcmarik (Member & Staff Support) OTHERS PRESENT: Angelina Powell, former member and education program presenter Sue Wilcox (Staff Support - Secretary) Don Mazanec and Amy Coffern of William M. Mercer, Inc., the City's actuarial firm. CALL TO ORDER: Chairperson Dennis Sumner called the meeting to order at 1:25 p.m. in the Finance Conference Room on February 4, 1993.' APPROVAL OF MINUTES: Dave Meyer moved and Alan Krcmarik seconded a motion to approve the January 7th minutes as distributed. The motion carried unanimously. ITEMS OF NOTE: Dennis reported that Mary Crumbaker had a personnel hearing which conflicted with this meeting and so would not be present. The item entitled "Retirement benefit questions related to employees injured during city employment" will be moved to the next meeting. Angelina advised that she would have to leave at 2:00 p.m. The investment report was moved to item #4 on the agenda. Also the draft comments from Don Mazanec and Alan responding to the 1991 Auditor's management letter are not available yet, so that will be moved to the next meeting. REVIEW OF DISCUSSION TOPICS: The agenda was approved as revised above. DISCUSSION TOPICS: 1. PENSION EDUCATION PROGRAM A. Training Classes MAIN POINTS: The education presentations are going very well, with most well attended and many questions. Each person's style of presentation is different and likewise the reactions of the attendees is different at each session, although the general reaction was appreciation that the information was being made available. The Committee members thanked Amy and Don for the background information and training which made them comfortable as presenters and able to answer most of the questions. The presentations usually last 45 minutes to an hour, with more time for questions. The presenters are keeping track of questions that come up frequently. Some subjects with a high level of interest are: 1) no survivor benefits before age 55 years, 2) the rule of 80, 3) equity with other City pension plans, -1- 4) the "penalty" for early retirement, and 5) changing to a defined contribution plan. There were a number of questions relating to specific situations or sets of conditions, which were discussed and clarified for future presentations or personal feedback to individuals. The question of how reliable Social Security is comes up frequently. Don believes Social Security is fairly certain, but Medicare costs are of real concern. He will provide some information on Social Security that may help answer questions. Sue reported that the 10 presentations so far drew 150 participants from 11 departments or divisions out of approximately 600 active members. The members hope that the present rate of participation will continue. Amy felt that if we reached half of the Plan members, we would be doing very well. Each participant is asked to sign an attendance sheet and Sue is comparing the names with a list of Plan members. When the presentations are over, she will send out handbooks to all those who did not receive a copy at the presentation. There was discussion on the desirability of taping a presentation for those who missed seeing one of the presentations, new employees, those approaching retirement, or to take home for a spouse to view. CONCLUSIONS/DECISIONS: Dennis agreed to make a presentation of basic information without an audience present, which could be taped. The availability of the tape should be announced in Fort Notes also. NEXT STEPS: Sue will arrange for the taping when it fits into Dennis's schedule. Alan also requested that the "backup" presenters, Angelina and Jerry, fill in for his presentations on Tuesday, February 9th at 281 N. College, as he will not be available. Both agreed to do so. Brochure & Handbook MAIN POINTS: Many favorable comments were received on the publications, especially the "Game of Life" brochure. Sue reported that the cost of the "Game of Life" brochure was $971.54 and the "Planning Your Retirement" handbook was $687.95 (1000 copies of each). The posters printed with the schedule were $93.70. The total printing costs were $1753.19. This was significantly less than the $2,500 budgeted. There should be extra copies available for -future use also. Several employees whose positions were changed from classified to unclassified attended the presentations. Although the Plan is no longer receiving contributions in their names, they are deferred vested Plan members. They should receive copies of the brochure and handbook. The fees paid to William M. Mercer, Inc. (which includes preparation of several drafts of the brochure, several drafts of the handbook, and preparation of the training session for Committee members and the associated audio visual and informational materials) total $9,785 out -2- * a of $17,500 encumbered for the education process. It was noted that significant costs remain for presenting the training class, developing the survey, evaluating the survey results, and preparing a final report of survey findings. CONCLUSIONS/DECISIONS: The Committee members felt that the cost for this education program is money well spent, especially in light of the fact that no such education effort had been undertaken by the Pension Committee since the Plan was implemented back in the 1970's. NEXT STEPS: Continue with the presentations and distribution of the booklets. Sue and Mollie will review the deferred vested members list and distribute the brochure and handbook as needed. C. FortNotes Articles MAIN POINTS: The members discussed creating more FortNotes articles based on the questions the members have been noting at the education sessions, including the Social Security concerns. Due to other commitments, Angelina had left the meeting, but it was suggested that she might again coordinate this effort as she did for the earlier articles. The Committee would like to begin with the March issue and include a notice that the survey will be coming out soon. CONCLUSIONS/DECISIONS: Beginning with the March issue, the Committee would like to have a series of articles appear in Fort Notes discussing the questions and concerns raised in the education programs, with some information on the next steps involved, i.e. the survey and how survey results will be utilized. Following are the deadlines and publication dates for FortNotes: DEADLINE PUBLICATION Feb. 16 March 5 March 16 April 2 April 19 May 14 May 17 June 11 June 21 July 9 (1ST PAY CHECK OF MONTH) NEXT STEPS: Mollie will contact Angelina and see if she is willing to coordinate this. (See Post Note.) D. Surveys MAIN POINTS: Amy had distributed the draft of the survey prior to the meeting, so the members had time to review and note questions and comments. The draft was reviewed page -by -page. Concern was expressed that the survey not be too long or too difficult to read. There was also concern that it not be over -simplified. CONCLUSIONS/DECISIONS• The survey will be printed on 11 X 17" paper, preferably in lavender to keep with the color theme. This will then be folded in half so it will be read like a book. It will be pre-printed -3- with the internal mailing address so they can be returned via the interoffice mail. All Plan members will receive a survey, whether they attend an education session or not. After completing the survey, Plan members will be asked to remove their name label and staple and return the form to Sue. She will then batch and send them to Amy as they are received. Amy will take them to a data entry firm. In the meantime she will discuss with the Committee members how they wish to have the data sorted and the categories of information they hope to derive from the data. She will later prepare a summary of the information. Dennis requested that the raw data also be transmitted to the Committee, as there are people within the City who work with this kind of data and who could be helpful. It was also suggested that when the members review the next draft, they ask someone to read the survey to find out if there are ambiguous questions, awkward phrasing, etc. The following schedule was created for the survey's preparation, completion and tabulation: Wed. Feb 17 Final Text reviewed by Committee members at regular meeting & sample survey completion. Wed. Feb. 24 Typeset Final Draft sent via FAX to Dave and Sue for final proofreading. Thurs. Feb. 25 Comments & final changes to Amy Monday, March 1 Final copy taken to printer in Fort Collins Monday, March 8 Sue will send out labeled copies Wed. March 24 Surveys due to GERC (Sue) Monday, March 29 Last of surveys to Amy Friday, April 16 Report to GERC from Amy TAX WITHHOLDING FROM LUMP SUM PAYMENTS MAIN POINTS: Recent Plan changes included a provision to make lump -sum payments of benefits to Plan members, if their monthly benefit at retirement would be less than $100. Another change provided that these payments be made one year after a person terminates City employment. In 1993 the IRS instituted a requirement that the Plan withhold 20% of the lump -sum payment for taxes UNLESS the funds are rolled over directly into an IRA account or another employer's eligible retirement plan that accepts rollovers. CONCLUSIONS/DECISIONS: It was agreed that the staff members handling these lump sums should use the option selection form provided by Don Mazanec to solicit the decision of the Plan member before the checks are issued. There is also an easy -to -read summary of the IRS directive and the full text from the IRS which will be given to the Plan member to facilitate their decision. NEXT STEPS: Sue will begin implementing this new directive this month, as there is a lump -sum payment due at the end of March. -4- • a 3. FOURTH QUARTER & 1992 YEAR-END INVESTMENT REPORT MAIN POINTS: City Treasury Administrator Bob Eichem was unable to attend the meeting, so Alan reviewed the report, pointing out that the annual rate of return for the GERP for 1992 was 8.34%. The target yield for the pension fund per City investment policies is the yield of the Treasury Security with a comparable 5-year maturity (6.17% in 1992). The GER Plan exceeded the target by 217 Basis Points (BP). The actuarial report assumes an investment rate of return of 7.5%, which was exceeded by 84 BP. At this time, one BP equals $2,185.00. It was noted that the Plan does not pay a direct administration fee for managing funds, as contrasted with ICMA and typical defined contribution plans. Plan members benefit from having funds managed in- house. CONCLUSIONS/DECISIONS: The members expressed appreciation for Bob's efforts and his results which have benefitted the fund and the Plan members. NEXT STEPS: No further action required. 4. CHANGED DATES FOR FUTURE MEETINGS MAIN POINTS: Because of schedule conflicts, the Committee members agreed to make some changes in the meeting schedule for the next few months. CONCLUSIONS/DECISIONS: Following is the new schedule: March 4th meeting is rescheduled for February 17th at 11:30 a.m. in the Finance Conference Room April 1 As scheduled May 6th meeting is rescheduled for April 29th at 1.15 p.m. in the Finance Conference Room NEXT STEPS: Notices of the new meeting times will be sent to Committee members and to Plan members. ITEMS FOR FUTURE DISCUSSION 1. Possible seminars or workshops to increase GER Committee members' knowledge of their roles and responsibilities. 2. Possible involvement of GER Plan in the 457 deferred compensation plan. 3. Plan improvements -5- A. Defined contribution study. (Refer to 10/26/89 meeting minutes.) Delayed until changes to the current plan have been studied and resolved. (Refer to 1/25/90 minutes.) B. Possible conversion of GER Plan to a 401 defined contribution plan. C. Rule of 80 4. GERP / Workers Comp / Disability Proposal 5. Legal update on retirement issues. 6. Monitor progress by staff Pension Review Group AGENDA & SCHEDULE FOR NEXT MEETING The next meeting will be Wednesday, February 17, 1993 in the Finance Conference Room. The agenda will include: 1. Pension Education Program 2. GERP Member Survey 3. Comments on Auditor's 1991 Management Letter 4. Retirement Benefit Questions Related to Employees Injured During Employment with the City. POST NOTE: Angelina agreed to coordinate the writing of the FortNotes articles. ADJOURNMENT The meeting was adjourned at 3:40 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, MARCH 4, 1993 is rescheduled for WEDNESDAY, FEBRUARY 17, 1993 AT 11:30 A.M. in the Finance Conference Room. THURSDAY, APRIL 1, 1993 as scheduled. THURSDAY, MAY 6, 1993 is rescheduled for THURSDAY, APRIL 29 AT 1:15 P.M. in the Finance Conference Room. THURSDAY, JUNE 3, 1993 as scheduled.