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HomeMy WebLinkAboutCOUNCIL - AGENDA ITEM - 06/17/2003 - RESOLUTION 2003-078 ADOPTING THE THIRD AMENDMENT T AGENDA ITEM SUMMARY ITEM NUMBER: 15 FORT COLLINS CITY COUNCIL DATE: June 17, 2003 STAFF: Alan Krcmarik SUBJECT: Resolution 2003-078 Adopting the Third Amendment to the City of Fort Collins General Employees'Retirement Plan as Amended and Restated Effective December 31, 2001. RECOMMENDATION: The General Employees' Retirement Committee recommends adoption of the Resolution. FINANCIAL IMPACT: Based on a thorough review by the Plan's consulting actuary, it has been determined that the proposed change will have no measurable financial impact. The proposed change allows the Plan to more equitably match service credits earned by part-time employees with the contributions made by the City into the Plan on their behalf. EXECUTIVE SUMMARY: The City has operated the General Employees' Retirement Plan since 1971. For many years, this Plan served the majority of City employees. As of January 1, 2003, there are 362 active members, 116 terminated members with vested benefits, and 123 retirees or beneficiaries in the Plan. Under the current Plan, employees with part-time service that convert to full-time service can receive a benefit that is proportionately greater than full-time employees. The General Employees' Retirement Committee, with assistance from its actuary, Milliman USA, and internal and external legal counsel, has studied this problem for the last four years. The Committee has developed a Plan change that more equitably matches the retirement benefit to actual service and the contributions made in to the Plan. The proposed change does not increase the cost of the Plan. ACKGROUND: As background for this proposed change, staff has attached the Proposed Plan Change white paper that was prepared for discussion with Plan members. RESOLUTION 2003-078 OF THE COUNCIL OF THE CITY OF FORT COLLINS ADOPTING THE THIRD AMENDMENT TO THE CITY OF FORT COLLINS GENERAL EMPLOYEES' RETIREMENT PLAN AS AMENDED AND RESTATED EFFECTIVE DECEMBER 31, 2001 WHEREAS,the City Council adopted,effective January 1, 1971,a qualified defined benefit pension plan known as the City of Fort Collins General Employees' Retirement Plan (the "1971 Plan"), for the purpose of providing retirement benefits for certain of its employees; and WHEREAS,the City Council has amended the 1971 Plan from time to time and restated the 1971 Plan to incorporate all prior amendments and other changes required by law, effective December 31, 2001 (the "2001 Restated Plan"), via Section 1 of Resolution 2001-157; and WHEREAS, the City Council adopted the first amendment to the 2001 Restated Plan effective January 1, 2002, via the adoption of Section 2 of Resolution 2001-157; and WHEREAS, the City Council adopted the second amendment to the 2001 Restated Plan effective January 1, 2002, via the adoption of Resolution 2002-103; and WHEREAS,the Retirement Committee("the Committee")has recommend to City Council a third amendment to the 2001 Restated Plan to provide for the more equitable payment of benefits to employee Members based upon the number of hours an employee works; and WHEREAS,the City Council wishes to adopt the recommendation of the Committee; and WHEREAS, Article XV, Modification or Termination of Plan, Section 2 of the 2001 Restated Plan, authorizes the City Council to amend the terms of the 2001 Restated Plan. NOW, THEREFORE, BE IT RESOLVED BY THE COUNCIL OF THE CITY OF FORT COLLINS, COLORADO as follows: Section 1. That effective July 1,2003,Subsection n. of Section 2 of Article II of the City of Fort Collins General Employees' Retirement Plan is amended to read as follows: n. "Final Average Monthly Compensation" means 1/60th of a Member's total Compensation during the 60 consecutive full calendar months of Credited Service out of the last 120 calendar months of Credited Service, which will produce the highest average monthly compensation. If a Member has less than 60 consecutive full calendar months of Credited Service, the Final Average Monthly Compensation shall be the average of the total Compensation during all full calendar months of Credited Service. In 'the 1 event that a Member has been employed on apart-time basis (less than an annualized 2080 hours)during any portion of the period used to calculate the Final Average Monthly Compensation"and therefore has received less than full-time Credited Service during that period, the-Member's;part-time Compensation for that period of time shall be converted to its full time equivalent for the purposes of calculating the Final`:Average'.Monthly Compensation. Section 2. That effective July 1, 2003, Section 1 of Article VI of the City of Fort Collins General Employees' Retirement Plan is amended to read as follows: Section 1. Credited Service. A Member's Credited Service shall be used to determine their Accrued Benefit and eligibility for benefits under the Plan. a. A Member's Credited Service is the elapsed time period from their date of employment with the City, as an Employee, to their date of termination of such employment, except as limited within this Section. A Member shall receive one year of Credited Service for each full.year the Member receives Compensation for 2080 hours of Covered Employment. A Member who receives Compensation for less than 2080 hours of Covered Employment in'a year stall accrue Credited Service on a pro rata basis based on the number ofhours for which Compensation is paid: For example, aMember..who was a part-time Employee and worked 520 hours for six months(half-time) and 1040 hours for six months(full-time)in a year would receive,.75 year of Credited Service for that year. b. A Member shall also accrue Credited Service under the Plan for any period of time during which the Member meets all of the following: s(1) is qualified for either: (aj a total Disability as defined in Article II, Section 2., Subsection j.,Paragraphs 1, 2, or 3; or {2)(b) a temporary total disability in the judgment of the City's designated worker's compensation physician; b-. (2) is receiving Disability Benefits; and c-(3 is not receiving any payment from this Plan. C. A Member may also accrue Credited Service under the Plan for any 2 period of time up to a maximum accrual of two (2) years during which the Member meets all of the following: a (1) is qualified for a permanent partial disability in the judgment of the City's designated worker's compensation physician, administrative law judge or,if appealed, the court issuing the final judgment; b-(2) is not working as an Employee in Covered Employment; e-(3) is receiving Disability Benefits; and d-(4) is not receiving any payment from this Plan. d. A Member who accrues Credited Service„because,of_a.Disability pursuant to Subsections b.oz c ,above,shall accFue Credited Service at the pro rasa rate based ;upon the`number`Qf h"' _for which Compensation was paid as of the date of disablement. e. In the event a Member receives a lump sum disability benefit payment in lieu of ongoing payments, the period of accrual of Credited Service shall be the period of entitlement which provided the basis for calculation of the lump sum amount. Section 3. That effective July 1, 2003, Section 4 of Article VI of the City of Fort Collins General Employees' Retirement Plan is amended to read as follows: Section 4. Miscellaneous. No period of Credited Service shall be deemed to be increased or extended by overtime. anniveLSMY date theteafte. in determining all ezedited Service,service for fraction-I years shall be aliotved on the basis of W12th yew for each faif nionth of einpioyInent as all Ennploget Section 4. That effective July 1,2003, Section 3 of Article VIII of the City of Fort Collins General Employees' Retirement Plan is amended to read as follows: Section 3. Disability Retirement. The Disability Retirement benefit of a Member eligible therefore shall be their Accrued Benefit on the date their Benefit commences,based on theirannual rate of Compensation on their date of disablement, and the Credited Service as defined in Article VI, Section 1, unless the Member s disability ceases prior to age 65 (see Article VII Section 4). I7tlie event that a Member was employed on a-part, basis(less than an annualized 2080 ours)at the date;of.disablement and therefore has reegtyed`less thanfull, Lime Credited 3 Service during that period,the Member's part time Compensation shall be converted to its full time equivalent for the purposes of,calculating''the annual rate of Compensation at the time of disablement. Section 5. That effective July 1, 2003, Section 6 of Article VIII of the City of Fort Collins General Employees' Retirement Plan is amended to read as follows: Section 6. Accrued Credits and Vested Benefits Under the Previous Plan Preserved. a. The restatement of the previous Plan by this Plan shall not operate to exclude, diminish, limit or restrict the payment or continuation of the payment of benefits accrued prior to the Effective Date of this Plan. The amount and payment of any such previous Plan benefits, shall be continued by the Funding Agent under the Funding Agreement forming a part of this Plan, in the same manner, undiminished, preserved, and fully vested under this Plan,except as provided in this Article VIII,Sections 6c,7,8,9,and 10. b. The eligibility for, and amount of, any benefit of any kind, payable under this Plan to or for any person who was a Member of the previous Plan and who became a Member of the January 1, 1992 restated Plan,as amended, and as it is amended and restated December 31, 2001, and as it may be amended and restated in the future,shall be determined under the provisions of this Plan. C. The methods of calculating Credited Service,Final Average Monthly Compensation, and annual rate of Compensation for Disability Retirement, as amended effective July 1, 2003, shall be applied retroactively in order to better align benefits with the contributions to the Plan based on the Member's actual Compensation. However,thisietroactive application shall not result in a Member's benefitunder the Plan`being'less than thdberiefit the Member would have been eligible to receive 41f the Member had A&rminated Employment on June 30 2003,muneeteiins,of t}ie Plan kthen,m effect; Passed and adopted at a regular meeting of the Council of the City of Fort Collins held this 17th day of June,A.D. 2003. Mayor ATTEST: City Clerk 4 General Employee's Retirement Committee March 6, 2003, Meeting Minutes Page 2 of 4 that Greg be provided direction to make modifications as discussed and to respond . I directly to the two Members and to append the answers to the minutes. Bill Switzer seconded the motion, and the motion passed unanimously (6-0). There were no other Plan Member comments. APPROVAL OF MINUTES: Alan distributed minutes of the February 6, 2003, meeting. The minutes will reflect that Susan Lehman was elected Chair and Bill Switzer was elected Vice-Chair of the Committee. A few minor grammatical corrections were made; Jim O'Neill moved approval of the minutes as corrected, and Michele Hays-Johnson seconded the motion. The Committee approved the minutes as unanimously (6-0). DISCUSSION TOPICS Alan noted that the monthly investment update was removed from the agenda, and a brief update will be given at the next meeting. 1. Plan Philosophy: There were no comments on the Plan philosophy. 2. Status on Proposed Part-Time Plan Change: Julie Depperman distributed the final memo that was sent on February 24 to 52 Plan Members whose benefit may be frozen for a while due to the proposed Plan change. She attached a generic sample printout that showed the information these Members received. On • � February 25, staff distributed the memo describing the Plan change to the active Plan Members. The memo also provided the details regarding the open houses. Bill said he believes this change is the right thing to do, but he is concerned that this is the first time the Committee has made a Plan change that will negatively impact some of its Members. Alan reminded the Committee that, under the current Plan, these Members would actually receive benefits that exceed the amounts contributed to the Plan on their behalf and that this is why he is comfortable in going forward with the proposed change. Susan said that if the Committee does not proceed with the change, that the rest of the Plan Members are, in fact, hurt from the inequities that presently exist. Alan said the Committee has reviewed this issue for years with two actuarial firms, they have gone through the spreadsheets and models, and that no one has come up with anything different that could be done to correct the inequities in the current Plan. This Plan change is scheduled to go to the City Council in May or June in the form of a Resolution. The Committee will decide on the date of submission to Council after the next open house. The Board reviewed the letter from Milliman USA regarding the financial impact of the proposed Plan changes. Pat Kahle expects gains for the Plan in the short term; she said it may cost a little bit in the long term, but she believes it is not a measurable amount. I Filename: GMIN0303 General Employee's Retirement Committee April 3, 2003, Meeting Minutes Page 2 of 4 Debbie asked Greg Tempel a question regarding the distribution of benefits once a Member dies leaving two beneficiaries, Greg will need to research this question before providing a response. Debbie also asked Greg if a Member's will overrides a beneficiary form; Greg said that the Plan is required to follow the instructions on the beneficiary form. APPROVAL OF MINUTES: Alan Krcmarik distributed the draft minutes of the March 6, 2003, meeting. Minor wording changes were suggested. Jim moved approval of the minutes as corrected, and Alan seconded the motion. The Committee approved the minutes unanimously (5-0). DISCUSSION TOPICS 1. Plan Philosophy: There were no comments on the Plan philosophy. - 2. Status on Proposed Part-Time Plan Change: Alan said the Committee would be ready to present the Plan change to City Council at the May meeting if everyone's questions have been answered. The change would be a Council agenda item with an attached resolution and would normally go on the consent agenda. Bill Switzer said he wants to document that this is equitable, cost effective, and that we are aware of the detrimental impacts of this change to some members. Alan will circulate what will be presented to Council for the Committee to review. Jim moved that the proposed change be presented to Council on May 6, and Susan seconded the motion. The motion passed unanimously (5-0). 3. Review of Actuarial Report: Pat Kahle distributed copies of her Power Point presentation and a preliminary draft of the Actuarial Valuation as of January 1, 2003. Pat introduced Joel Stewart, also of Milliman USA. Pat reviewed a chart depicting the membership of the Plan: wherein there were 385 active Members on January 1, 2002, the number dropped to 362 as of January 1, .2003; the Plan started with 109 terminated, vested Members and ended with 116 as of January 1, 2003. Julie Depperman asked for suggestions on how to track Members who have been gone for a long time. Social Security has a,-web site that might. be of assistance, and Pension Benefit Information (PBI) will do a search of confirmed addresses for a fee; Joel will get this information to Julie. Julie said she is considering mailing letters to retired. Members and requiring that Members have their signatures notarized on a return form to ensure that a Member has not died and someone else has been depositing their checks. Pat will remove Plan Member names from Table 6 of her Actuarial Valuation draft. Pat will keep the information in her Valuation Report but will, instead of using Member names, put the Table in the order of retirement dates. Pat will provide Julie with this information. Pat said they used conservative assumption tables because the Plan is closed and the group is limited in the number of Members. Filename: GMIN 2003 4APRIL Final General Employees Retirement Plan City of Fort Collins Proposed Plan Change Background The City Council created the General Employees' Retirement Plan ("Plan") in the early 1970s. Reflecting the times, the Plan was very basic and included few retirement options. Over the years, many factors have changed. City employees have more options. They can choose to participate in deferred compensation plans and money purchase pension plans. Such plans can be independent or in addition to the Plan. In recent years, Council improved the death benefit and added a cash sum payment. In 1999, Council approved a cost of living adjustment for retirees and beneficiaries. The Retirement Committee ("Committee") directs the investment of the Plan's assets in a mix of stock funds and bonds. Employee career patterns have also changed. At various times, many employees choose to work part-time. The Council did not anticipate these work force changes when they created the Plan. For some employees, the City may have paid more into the Plan than it has for other similarly situated employees. In other cases, employees may earn a benefit proportionately higher than the contribution made by the City into the Plan on behalf of the employees. When the Plan was open to all new City employees, these cases did not cause a problem. In 1999, the Council closed the Plan to new employees. The Committee believes it needs to make the Plan as fair as possible. The proposed changes avoid the possibility of unfair payments. Possible Service Credit Inequity Years of credited service and final average monthly compensation are the basis for the benefit calculation. The Plan provides one year of service credit for each year of City employment, regardless of the number of regular hours worked during the year. Final Average Compensation is the highest average pay over 60 consecutive months during the last ten years of employment. This may create two unfair scenarios. 1. Plan Members Changing from Part-time to Full-time Plan members who work part-time for many years and then convert to full-time for the last 60 months of their careers would receive exactly the same payment as members who worked full-time their entire careers. This assumes they would have the same pay for the last five years. This creates a funding shortfall between the amount the City has paid into the Plan and the amount of benefit the part-time employee is eligible to receive. Because the changes in 1998 and 1999 closed the Plan, the mismatch would have a detrimental effect on the Plan. The Committee is responsible to protect the financial position of the Plan from this situation. 2. Plan Members Changing from Full-time to Part-time Near the end of their careers, full-time employees may desire to convert to part-time. If they are part-time for several years, they begin to lose retirement benefits because of the way the Plan sets the monthly benefit. Part-time salaries will usually be much less than the full-time. At the least, the employee would lose out to the effects of inflation. If the part-time service were very long, the employee would see a large reduction in the benefit. The Committee found this unfair. Employees that switch back and forth from part- to full- time multiple times may also distort the equity of the benefits paid. 215 North Mason Street • 2nd Floor • P.O. Box 580 " Fort Collins, CO 80522-0580 • (970) 221-6788 • FAX (970) 221-6782 Proposed Changes The Committee has a responsibility for the long-term financial stability of the Plan. The Committee also does not want employees who might work part-time to experience diminished retirement benefits. The Committee proposes the following changes. ♦ The Plan should credit service as one year for each year the employee works at least 2080 regular hours. The Plan excludes overtime, compensation time, and other non-regular hours. ♦ For employees who work less than 2080 regular hours, the Plan will identify them as part-time employees. They will earn service credit in proportion to the regular hours they work. A half- time employee would work 1040 of 2080 hours and earn a 0.50-year of service credit. ♦ The Plan should calculate Compensation on an annualized basis. If the part-time employee were making $12.50 an hour, the annualized salary would be $26,000, a full-time equivalent salary. ♦ For each active Member, the Plan should recalculate the corresponding benefit based on the criteria above starting with the first day the Member was eligible to participate in the Plan. Why the Committee Recommends the Changes The proposed changes will not reduce benefits already earned under the Plan. The Committee will establish and document service credit for all members of the Plan. Once Council makes the change, the Committee will recalculate service credits for all Members. The new system will be more equitable. The Plan will avoid having to pay higher benefits than the amount the City has contributed to the Plan. Plan members, who may switch their status to part- time, will not see their benefit erode due to inflation and reduced final monthly pay. After the Change Part-time members will earn exactly the same benefits as before while they continue to work on a part-time basis. The difference will be evident should they begin full-time employment. They will begin earning increases to their retirement benefits due to faster growth of service credits. Employees who wish to finish their City career by working part-time for an extended period of time will do so without adversely impacting their retirement benefits. Employees who work part-time during their City career will earn lower service credits for that period of time. This is more equitable to full-time employees and will not disproportionately raise the'costs to the Plan. We have attached information to show our rationale and provide examples about the proposed changes. The Committee has scheduled information "open houses" on March 6 and April 3 from 11:30 a.m. to 1.30 p.m. at the Council Information Center at City Hall. Please try to attend if you have questions. By this Issue Letter, the Committee intends to provide an overview to Plan members of the proposed changes that Committee may recommend City Council. Only City Council can change the provisions of the Plan. Considering Plan member input and further review by the Committee, any recommended changes to the City Council may vary from those we have described in this Issue Letter. We encourage Plan members to stay informed and involved in this process. Thank you. 2 • Attachment 1: Background Explanations Explains the Current Plan formula and the Alternative Plan formula. Attachment 2: The Current Plan 1. The Full Time Employee section, on the right of the page, shows what an employee working 25 years would be eligible to receive. 2. The center section shows a part-time employee who converts to full-time for the last five years. An employee in this situation would receive exactly the same benefit as the full-time employee even though contribution on behalf of the employee would be about 55% of the amount the City contributed for the full-time employee. 3. The right section of the page shows the full-time employee who coverts to part-time for the last 10 years of their work career. Even though the service credit for this employee is the same as the other two, this employee would receive only 50% of the monthly benefit of the other two. Attachment 3: Proposed Changes 1. Service credit earned is recalculated to reflect actual hours worked. • 2. The left section of lower part of the page shows how full-time employee would fare after the change. A full-time employee would not experience any change in the calculation of the benefit. 3. An employee who worked half time for 20 years and finished with full-time for the last five years (center section)would earn 60% of the full-time employee. 4. An employee who worked full-time for 15 years and finished with 10 part-time years would receive 80% of the full-time employee sum. Attachment 4: Chart—General Employees' Retirement Plan Members with Part-time Service Attachment 5: Chart— Impact on Benefit Using Proposed Method Attachment 6: Chart—Contributions vs. Single Sum Distributions 3 City of Fort Collins Attachment 1: Background General Employees' Retirement Plan Current Plan Formula Plan Benefit: 1.5% of Final Average Compensation times Years of Credited Service. Where Final Average Compensation: The highest 60 full calendar months out of the last 120 calendar months of Credited Service. Year of Credited Service: Twelve months of employment. Alternative Plan Formula (Proposed) Plan Benefit: 1.5% of Final Average Compensation times Years of Credited Service. Where Final Average Compensation: The highest annualized 60 full calendar months out of the last 120 calendar months of Credited Service. Annualized compensation is regular compensation times the ratio of 2080 to regular hours earned in the year(but not allowed to reduce the regular compensation). Year of Credited Service: A calendar year in which the employee works at least 2080 regular hours with a partial year credited for less than 2080. regular hours. Regular Hours: See definition of"compensation" in the Plan document for listing of eligible hours. (Note: At the time of implementation, the Committee will calculate each Member's benefit using the current Plan formula. No member shall receive less than the calculated benefit.) 4 City of Fort Collins Attachment 2: Current Plan General Employees' Retirement Plan Current Plan Full Time Employee Part Time to Full Time Full Time to Part Time Year Pay Hours Service PaY Hours Service Pay Hours Service 1991 $26,043 2080 1.0 $13,022 1040 1.0 $26,043 2080 1.0 1992 $26,824 2080 1.0 $13,412 1040 1.0 $26,824 2080 . 1.0 1993 $27,629 2080 1.0 $13,815 1040 1.0 $27,629 2080 1.0 1994 $28,458 2080 1.0 $14,229 1040 1.0 $28,458 2080 1.0 1995 $29,312 2080 1.0 $14,656 1040 1.0 $29,312 2080 1.0 1996 $30,191 2080 1.0 $15,096 1040 1.0 $30,191 2080 1.0 1997 $31,097 2080 1.0 $15,549 1040 1.0 $31,097 2080 1.0 1998 $32,030 2080 1.0 $16,015 1040 1.0 $32,030 2080 1.0 1999 $32,991 2080 1.0 $16,496 1040 1.0 $32,991 2080 1.0 2000 $33,981 2080 1.0 $16,991 1040 1.0 $33,981 2080 1.0 2001 $35,000 2080 1.0 $17,500 1040 1.0 $35,000 2080 1.0 2002 $36,050 2080 1.0 $18,025 1040 1.0 $36,050 2080 1.0 2003 $37,132 2080 1.0 $18,566 1040 1.0 $37,132 2080 1.0 2004 $38,246 2080 1.0 $19,123 1040 1.0 $38,246 2080 1.0 2005 $39,393 2080 1.0 $19,697 1040 1.0 $39,393 2080 1.0 2006 $40,575 2080 1.0 $20,288 1040 1.0 $20,288 1040 1.0 2007 $41,792 2080 1.0 $20,896 1040 1.0 $20,896 1040 1.0 2008 $43,046 2080 1.0 $21,523 1040 1.0 $21,523 1040 1.0 2009 $44,337 2080 1.0 $22,169 1040 1.0 $22,169 1040 1.0 2010 $45,667 2080 1.0 $22,834 1040 1.0 $22,834 1040 1.0 2011 $47,037 2080 1.0 $47,037 2080 1.0 $23,519 1040 1.0 2012 $48,448 2080 1.0 $48,448 2080 1.0 $24,224 1040 1.0 2013 $49,901 2080 1.0 $49,901 2080 1.0 $24,951 1040 1.0 2014 $51,398 2080 1.0 $51,398 2080 1.0 $25,699 1040 1.0 2015 $52,940 2080 1.0 $52,940 . 2080 1.0 1 $26,470 1040 1.0 Credited Service 25.0 25.0 25.0 Final Ave. Compensation $49,945 $49,945 $24,972 Accrued Annual Benefit $18,729 $18,729 $9,365 As Percent of Full Time Employee 100% 50% Service equals one year if employed for 12 months, regardless of hours. Final Average Compensation uses actual earnings during last ten years. u:\gerp\excel\lumpsum\part-full.xls 5 2/24/03 11:01 AM City of Fort Collins Attachment 3: Proposed Changes General Employees' Retirement Plan Alternative Plan: Benefit Calculation after the Proposed Changes Full Time Emolovee Part Time to Full Time Full Time to Part Time Year Pay Hours Service Pay Hours Service Pay Hours Service 1991 $26,043 2080 1.0 $13,022 1040 0.5 $26,043 2080 1.0 1992 $26,824 2080 1.0 $13,412 1040 0.5 $26,824 2080 1.0 1993 $27,629 2080 1.0 $13,815 1040 0.5 $27,629 2080 1.0 1994 $28,458 2080 1.0 $14,229 1040 0.5 $28,458 2080 1.0 1995 $29,312 2080 1.0 $14,656 1040 0.5 $29,312 2080 1.0 1996 $30,191 2080 1.0 $15,096 1040 0.5 $30,191 2080 1.0 1997 $31,097 2080 1.0 $15,549 1040 0.5 $31,097 2080 1.0 1998 $32,030 2080 1.0 $16,015 1040 0.5 $32,030 2080 1.0 } 1999 $32,991 2080 1.0 $16,496 1040 0.5 $32,991 2080 1.0 2000 $33,981 2080 1.0 $16,991 1040 0.5 $33,981 2080 1.0 2001 $35,000 2080 1.0 $17,500 1040 0.5 $35,000 2080 1.0 2002 $36,050 2080 1.0 $18,025 1040 0.5 $36,050 2080 1.0 2003 $37,132 2080 1.0 $18,566 1040 0.5 $37,132 2080 1.0 2004 $38,246 2080 1.0 $19,123 _ 1040 0.5 $38,246 2080 1.0 2005 $39,393 2080 1.0 $19,697 1040 0.5 $39,393 2080 1.0 2006 $40,575 2080 1.0 $20,288 1040 0.5 $20,288 1040 0.5 2007 $41,792 2080 1.0 $20,896 1040 0.5 $20,896 1040 0.5 2008 $43,046 2080 1.0 $21,523 1040 0.5 $21,523 1040 0.5 2009 $44,337 2080 1.0 $22,169 1040 0.5 $22,169 1040 0.5 2010 $45,667 2080 1.0 $22,834 1040 0.5 $22,834 1040 0.5 2011 $47,037 2080 1.0 $47,037 2080 1.0 $23,519 1040 0.5 2012 $48,448 2080 1.0 $48,448 2080 1.0 $24,224 1040 0.5 2013 $49,901 2080 1.0 $49,901 2080 1.0 $24,951 1040 0.5 2014 $51,398 2080 1.0 $51,398 2080 1.0 $25,699 1040 0.5 2015 $52,940 2080 1.0 $52,940 2080 1.0 $26,470 1040 0.5 1 0 Credited Service 25.0 15.0 20.0 Final Ave. Compensation $49,945 $49,945 $49,945 t i Accrued Annual Benefit $18,729 $11,238 $14,983 As Percent of Full Time Employee 60% 80% f i Service equals one year if work 2080 hours reduced prorata for less than 2080 hours. Final Average Compensation uses annualized earnings during last ten years. i i u:\gerp\excel\lumpsum\part-full.xls 6 2124/03 11:03 AM Attachment 4 GERP Members with Part-time Service 66 , 18% 294 , 82% El Total number of Members with no part-time service M Total number of Members with part-time service Of the 360 GERP Members, 66 Members(18%)have had some part-time service. g:lfinancetgerp%pt graphs 7 2124/03 10:51 AM Attachment 5 Impact on Benefit Using the Proposed Method i 5, 8% 9, 14% u��2: W 52, 78% to Number of Members whose benefits are increased using proposed method 0 Number of Members whose future benefits may be reduced using proposed method El Number of Members whose benefits are unchanged using proposed 2/24/0 33 AM g:\finx optpt graphs Attachment 6 re o Single Sum Distributions �j O,k0,ilQ0 $2,057,969 i 00,'000 $2; 50,000 _ t• $Z, 00,000 $1,950,000 $1,900,000 $1,850,000 f $1,800,000 $1,750,000 $1,700,000 $1,650,000 Current Method Pi$ ■Total Contributions $1,835„925 s © Total Single Sum Distributions $2,144,�37 The proposed method corrects some of the mismatch between the amount contibuted into the Plan on behalf of the Members and the amount paid out to the Members. Shortfall using current method=$308,211. Shortfall using proposed method=$22Z044. 9 2/25/03 7:27 AM