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Home My WebLink About2010-062-10/05/2010-ADOPTING THE EIGHTH AMENDMENT TO THE CITY OF FORT COLLINS GENERAL EMPLOYEES' RETIREMENT PLAN AS AMEN RESOLUTION 2010-062 OF THE COUNCIL OF THE CITY OF FORT COLLINS ADOPTING THE EIGHTH AMENDMENT TO THE CITY OF FORT COLLINS GENERAL EMPLOYEES' RETIREMENT PLAN AS AMENDED AND RESTATED DECEMBER 31, 2001, ALLOWING ACTIVE MEMBERS TO CONTINUE MEMBERSHIP IN THE PLAN OR TO CEASE MEMBERSHIP IN THE PLAN AND PARTICIPATE EXCLUSIVELY IN OTHER CITY RETIREMENT PLANS WHEREAS,the City adopted,effective January 1, 1971,a qualified defined benefit pension plan known as the City of Fort Collins Employees' Retirement Plan(the"Plan"),for the purpose of providing retirement benefits for certain of its employees; and WHEREAS, the City has amended the Plan from time to time, restated the Plan to incorporate all prior amendments and other changes required by law effective December 31, 2001, and adopted seven amendments to the Plan since its restatement in 2001; and WHEREAS,recent actuarial studies have established that,due primarily to financial market conditions over the past several years,the GERP is significantly underfunded and will be unable to meet its long-tern financial obligations under current funding levels and reasonably anticipated financial market conditions; and WHEREAS,the City believes,based on the actuarial studies,that it is necessary for the City to modify the Plan's design or to increase funding of the Plan in order to ensure the long-term viability of the Plan to provide retirement benefits to Members; and WHEREAS,the General Employees' Retirement Committee(`'Retirement Committee"),its actuary, and the City's Finance Director have extensively studied and considered Plan design and funding alternatives that would strengthen and improve the long-term financial condition of the Plan, and have consulted with active Plan Members to seek input into such Plan design and funding alternatives; and WHEREAS,the City believes that the best alternative to improve the Plan's funding is to re- direct to the Plan, on a uniform percentage basis, employer contributions currently made on behalf of active Plan Members to other City retirement plans(401(a)money purchase plan and 457 deferred compensation plan), effective as of January 1, 2011; and WHEREAS, the City also intends to make additional employer contributions to the Plan, effective January 1, 2011,with such contributions based on a percentage of compensation of active Plan Members, and with an initial targeted contribution rate of three percent (3%) of Member Compensation, dependent on inclusion in subsequent budget and appropriation ordinances; and WHEREAS, the Retirement Committee has recognized the need for additional funding of the Plan and supports the above described funding alternative provided that active Plan Members are each given a one-time option to either: (1)terminate active Membership in the Plan,freezing the Member's Plan benefit, and participate exclusively in other retirement plans offered by the City, or (2)cease Membership in the Plan and participate exclusively in other retirement plans offered by the City, rolling over the actuarially-determined value of the Member's Plan benefit to one such other City retirement plan,; and WHEREAS, the City Council believes and determines that the funding improvement measures described above are necessary based upon actuarial studies and that offering the options requested by the Retirement Committee provides Plan Members with retirement plan options that will not adversely affect the Plan. NOW, THEREFORE, BE IT RESOLVED BY THE COUNCIL OF THE CITY OF FORT COLLINS, COLORADO, as follows: Section 1. That Sections 3 and 4 of Article III of the City of Fort Collins General Employees' Retirement Plan are amended in their entirety to read as follows: Section 3. Termination. Membership of any Member shall terminate (except as a Vested Member) if and when he or she ceases to be in Covered Employment for any reason, except as provided in Article VI, Section 2 and in Article XIV. Section 4. Withdrawal. Except as provided in Article XIV or as provided otherwise herein, once an Employee has become a Member of the Plan, such Employee may not withdraw from Membership in the Plan unless he or she ceases to be an Employee. Section 2. That Article XIV of the City of Fort Collins General Employees' Retirement Plan is amended in its entirety to read as follows: ARTICLE XIV 2010 Plan Member Election Options Section 1. Options. Each Member who remains in Covered Employment as of January 1, 2011, who files with the City by November 19, 2010, a retirement plan election form approved by the City(for purposes of this Article XIV,the"Member Election Form") setting forth his or her election under either Section 2 or Section 3 of this Article shall have his or her election implemented effective January 1, 2011. A Member who fails to submit a completed Member Election Form by the above date shall not thereafter be eligible for the options set forth herein and shall continue to participate in the Plan pursuant to its provisions. -2- Section 2. Terminated Vested Option. Each Member who remains in Covered Employment as of January 1, 2011, who files with the City by November 19, 2010, a Member Election Form stating his or her decision to cease his or her Membership in the Plan and become a Vested Member of the Plan shall become a Vested Member of the Plan as of midnight on December 31, 2010. As of January 1, 2011, the Vested Member shall cease Membership in the Plan, shall no longer be eligible to accrue additional Credited Service, and shall have his or her Final Average Monthly Compensation be calculated based only on his or her Compensation paid prior to January 1,2011. The Vested Member may elect to receive his or her Accrued Benefit at such time and in such manner as is permitted under the Plan for Vested Members. Section 3. Transfer Option. a. Transfer of Transition Account Balance. Each Member who remains in Covered Employment as of January 1, 2011, who files with the City by November 19, 2010, a Member Election Form stating his or her decision to cease Membership in the Plan and transfer the actuarially- determined value of the Member's Accrued Benefit to a retirement plan shall have the amount of his or her Transition Account Balance in the Plan as of December 31, 2010, transferred to an account in the Member's name in the retirement.plan designated by the City. Such transfer shall occur on January 1, 2011, or as soon thereafter as reasonably practicable. At the time of transfer, each transferring Member shall be 100% vested in the Transition Account Balance. After the transfer, the transferring Member shall not be entitled to any further or future benefits of any kind from the Plan. b. Transition Account Balance Defined. For purposes of this Section 3 of Article XIV, the Transition Account Balance transferred from the Plan to a Member's account in the Employer retirement plan shall be equal to the lump sum Actuarial Equivalent value of the Member's Accrued Benefit as of December 31, 2010. For this purpose, the lump sum Actuarial Equivalent value shall be determined based on the assumptions described in Article II, Section 2b, Subsection (2)(b) and Section 2b, Subsection (3) of the Plan. Section 4. Extension of Member Election Deadline. The Retirement Committee is empowered to extend the filing deadlines described in Sections 1, 2, and 3 above for any Member who was, through no fault of the Member,unable to file the Member Election Form by the applicable deadline set by the City. The burden shall be upon such Member to establish by clear and convincing evidence that the failure to file the Member Election Form by the deadline was not the result of the Member's neglect, carelessness, delay, procrastination, forgetfulness, or otherwise the fault of the Member. -3- Section 5. Contingency. The above Sections of this Article notwithstanding, if either the Retirement Committee or the Director of Finance determines prior to January 1, 2011, based upon actuarial evidence, that either or both of the options described in this Article would have an adverse effect upon the funding needs or actuarial soundness of the Plan for those Members who remain in the Plan, or that the Plan will be unable to meet its future benefit obligations as a result of providing the options to Members set forth in this Article, then such option or options.shall not be implemented. Section I All other terms and provisions of the Plan shall remain unchanged and in full force and effect. Section 4. The funding intentions set forth in this Resolution are contingent upon the appropriation of funds for future fiscal years. Passed and adopted at a regular meeting of the Council of the City of Fort Collins this 5th day of October A.D. 2010. May r ATTEST: City Clerk 4