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Home My WebLink AboutRetirement Committee - Minutes - 03/08/2018iytLotuns General Employees Retiremenl Committee 215 N. Mason 2nd Floor PO Box 580 Fort Collins, CO 80522 970.22',t.6744 970 .221 .6782 - lax fcgov.com GENERAL EMpLoyEES' RetrReuerur Courrr,rrrree M INUTES Mnncn 8, 2018 215 N. MASoN - CoNFERENCE RooM 2D - Secono Fr-oon Committee Members Present: John Voss, Chairman Bill Switzer, Vice Chairman Delbert Bernhardt James Lathrop John Lindsay Clark Mapes Others Present: Blaine Dunn Joel Stewart, Milliman Katie Antoline (Milliman) Carolyn Koontz Meeting called to order at 1 :1 5 pm. Citizen Participation and Plan Member Comments None made or noted. 2. Consider Approving the Minutes from the meeting of February 8th, 2018 James Lathrop moved to approve the minutes of the February 8, 2018 GERC meeting. Bill Switzer seconded the motion. The minutes were approved unanimously. 3. Review Draft January 1, 2018 Actuarial Valuation Report (Joel Stewart) 16.40/o relurn tor 2017 - unf unded decreased f rom $1 4tr/ to $1 1 .2M - 81 % f unded - 14 years to fully funded (was22 yearstofullyfunded in2017) this includesthe drop f rom 6.5% to 6.25%. The slide below illustrates how the unfunded liability went lrom $14M - $11M. 1 c c Iins Overview - GASB 67168 Disclosure lnformation Discount Rate for Liability 8. Total Pension Liability (TPL) 9. Fiduciary Net Position (FNP) 10. Net Pension Liability (NPL) 11. FNP as a o/o of TPL 12t31t2016 6.50% $ 58,377,767 $ 43,869,306 $ 14,508,461 75.15o/o - Total Pension Liability is calculated using a discount rate of 6.250lo, the Plan's long-term expected rate of return assumption - The use of the long-term expected rate of retum assumption is based on Plan's Depletion Date Projection, which takes into account the current Fiduciary Net Position, projected net cash flow, and reliance on the adopted policy of supplemental contributions. lf the Plan were projected to run out of money the Total Pension Liability would be calculated using a blended discount rate incorporating the current rates of 20- year tax-exempt municipal bonds. The 29-year Muni Bond rate was 3.44o/o al 12t31t2017. The Depletion Date Projection is reviewed annually based on factors such as the Fid Net Position and future anticipated level of contributions Th6ffi pdcl m3 Fe.d ebrybpEyae reseb h CqdrdcoBs & Gud, Empb@ R.t,MC@@e !m4 d & @6r. b ohs 4@ M{mo @s d hEd b b.h ad -sum6 m &/ r 6w to osd Fd tr E6ye &r d 'Milliman Gain/Loss 1. Actual UAL, 11112017 2. Expected changes during 2017 3. Expected UAL, 11112018 Changes: 4. Asset (gain)/loss 5. Salary change different than assumed 6. Pensioner Mortality Experience 7. Retirement and other terminations 8. Other demographic 9. lnvestment Return Assumption Change 10. Total 1 1. Actual UAL, 1 1112018 $ 14,508,461 (401,349) $ 14,107,112 $ (4,248,199) (249,594\ 158,360 64,593 48,010 1 7,286 $ (2,889,544) $ 1 1 ,217,568 Line 5 above; Salary increases during 2017 were lower than expected. Joel suggested we may want to review this assumptlon in more detail ahead of the next annuaL evaluation cycle 2 12t31t2017 6.25o/o $ 60,025,297 -F8ifborrins \=/a^ Committee to consider motion to approve the report. James Lathrop made a motion to accept the report as presented. Clark Mapes seconded the motion and the report was approved unanimously. Joel passed out a draft sample of the annual statements. Joel shared that Janie Appleton said that the fix that was made 2-3 years ago helped with the member's understanding. The format looks good. 4. Annual Acknowledgement of GERC Member's Fiduciary Responsibilities - Signed by Members - Acknowledgement forms were collected after being reviewed and signed by GERC members. Originals are on file with CAO. Copies retained by staff . 5. Monthly lnvestment and Other Reports (Blaine Dunn) G.nsal Emplo}ras' Rotirammt Plan Frbruary 28. 2018 hd Ft&!*, 6.4us?rD db. M d * 1.650a : 584 {as r 6J r 5.806.52 32-0.. @ldffi: ffi#A'lEA FffrEqtutu F*r,HqU ffirTdkrG frryv&hq tuAOFqS lsMro.& VtSdSErh Vqdhetu Vry6Ec+Erh rercFld !oil t^ {5tt {x* IG .2m {ffi 3St ?3il r 3tt a7!r 0.6 1 17o' Its {2tt t2il --n tr - ljolr rehtl'1,dSU LiFbFCrffi SP6ECt fs {.6 -t_3lt -r.B t.! tt 4G r_s r.5 7_14 !.s Composition of Assets Fund Cateoorv Allocation cit ins Strategic Assel Arlocition Lower Limit Torgel Upper Limit Market V.l[E kesory % v3 Totnl Po(trolio Dort"llic Fund Cateqav ( 20% litax) iroderab Alhcatirr t orge Vsl(E Lorge Blend Large Glptfltr Medium Blend Medium Value Medium Grorvtl SnEI Bl€fld Sutsbtd DooEslic lntemalio.lol Fuld Citegory $ $ s $ s $ $ 2428.ir55.84 1.369,:10.47 6_50r ,4{X.25 5.734,f/3.98 4.831,455.49 2.835,443.77 2. r7t,748.29 2428,455.84 4.8% 2.? 12.8% 11.4% 9.5% 5.5% 4.3% 48% Large Blend LargE G.owtr PacifdAsia - Lq G.oxlh Sutrbtal lntanatixEl Total Equity Fort olb lJi8,412.37 3.r34,e7.65 3.527,47.60 t 25 -q31,992.!0 51.1 ( 7.5.n XaD TMTB_ $ s llrA s s cit Iins Clark Mapes asked if Blaine has the authority to make that change / to sell. John Voss; This is a good conversation to have in a more organized way - to consider giving Blaine the authority to make a change or if the committee prefers lor him to bring recommendation to the GERC for a vole regarding an action. Blaine Dunn; One month of underperformance is not a red flag to move funds. He will watch closely and will come back with a recommendation. We are beating the benchmark YTD and are well within policy. Sectors; Technology 22.5% - 25% is maximum. All funds hold a certain amount of cash and we would not want any of the sectors to be over 25o/o. Our practice is to get back in line wilh parameter by the end of a quarter. The will be a full quarterly report next month. 7. Election of Officers - Chairman, Vice Chair Floor was opened for nominations; Bill Switzer nominated Clark Mapes for Chairman. Bill mentioned that Clark is connected to what is going on and as an active employee would not be away all summer. Ballots were distributed and collected. Clark Mapes was unanimously elected the new Chairman of the GERC. Bill Switzer nominated John Voss as Vice Chairman. Ballots were distributed and collected. John Voss was unanimously elected as Vice Chairman of the GERC. 8. Execute the GERP Plan Document Last Approved by City Council This item was moved to the April 12th GERC meeting agenda. The document will be brought to meeting for GERC member's signatures. 9. Other Business Blaine Dunn to find and review some other plan examples to see if GERP is in line with others. Committee discussed possibility of having outside consultant come in to look at the GERP Pension lnvestment Policy. John Voss mentioned that the fixed income portlolio is doing poorly and that one of lhe consultants had said he had some ideas regarding how to help with that. The GERP currently holds one long term bond while the remaining fixed income is sitting in cash which could be better utilized to bring in more return. James Lathrop will not able to attend the April 12rh GEBC meeting adj ap tr 32 pm Carolyn Koontz, Stafl Liaison 6. Review and Approve 2017 GERC Annual Report (Blaine Dunn) Copy attached (Attachment 1). John Lindsay made a motion to approve the 2017 Annual Report. James Lathrop seconded the motion. fhe 2017 GERC Annual Report was approved unanimously. (o 5 $ 3.8* 6.2% 7.W" $ ,3 56r.17? El 34.5'r4, 169.72 16.215,806.52 16.96 5% Fixed lncofiE Eood Mutud Funds Tctal Podo[o 3A.Ora s 50 7:3.976.24 lm 0.0.0% ,6 Eouitv Sector Weiohtinos Sector ci; vs Equity Portfolio I25.qlM ) Is t 5 ts $t 5 5 6 1-224,!n.y 4.7 48,743.37 5.788,887.8? 1t6-/,471.46 915,&{9.6 r 1_597,Ttz.7 3.S85,880.60 7.762,SO5.42 2.614,r29.39 3.956,(x6.52 838,564.50 3.6% 13.8% r6.8% 3.4% 2.1 4A% ,11.23* 5% 7.ffi 1r.5% 2.4% 169.7: 1m.0"i we ended month up again. Fidelity Value is underperforming the benchmarkby 2o/o and has dropped from a 3 star to a 2 star rating. Blaine will keep an eye on this and report back. 4 GERP lnvestment Policy Analysis February 28,2O18 Bcic tlaEriats Corc.rIE Cyclicd Financd SerYiceg Real E8taE Cormuicalixls Serriceg E Ergy lrdJstials Techndogy Con3rrrEr DeGnsive Pi"allhcare udilies Total Equity Po.lrolb Market ValrE 3.Xr -1_W $P5Or& wfir& MlmBr $P0rie liFt4.C?ffi #6ECt e91 ffiIqFE MWda g 4.16 {Er* 2.1* o 1at IB t8A o.s lSt 0* dffi .m rEt 0la 0.3r* o.5rr 2m ,ffi OG {.s r.B.5t6.I 2.21,&.9 uw.4 zt7L74.n l,lass zs.4u !.il:r0.{7 1.5rr.E.et r.B.*.x 1mr.s.D ziaao.I xtars.s !6 a& 18 2gt 5S 2.& :6 3ff 7g {s !6 5 3 l : 3 : 3 3 -l rex ru mx FIGX ffi m 'm ffi lm ug \frlsx mrx ffi Lryk LT.9d 3 a 2 ! 2 ?1 14f, BE __L x l 4e 3 3 30 33 Itffi3*&r 25.932.992.10 51.J.. 3W !ril !H 8.5E1,1U.62 16.9.. 9.5t4.169.72 68,0.. 4.05.. I 00., I 5 I c 3 h$afadbcm r.9l8,a!2 37 3.rx.9.6 3.r.87.O 50.729,9752{ $ 48,807,729 $ 1 1 ,217,568 81 .31o/o l3