HomeMy WebLinkAbout2002 Resolution No. 055•
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RESO LUT ION N0.-6£"
SER[ES OF 2002
A RESOLUTlON IN WHICH THE CITY COUNCIL OF THE C.:TY OF ENGLEWOOD ,
COLORADO HEREBY CASTS [TS EMPI,OYE R'S VOTE [N FAVO R OF THE FIBE AND
POLlGE PENSlON ASSOCL<\TlON 'S (F .l'.P.A.'S) PROPOSED AMENDMENTS NO. 1 and
NO . ,,, AND AGAI NST F.P .P .A.'S PROP OSED AJ';[ENDMENTS NO. 2 AND NO. 3.
1'vHEREAS, pursuant to the a uthority granted in C.R.S . 31 -31-408, the Board of
Di"ector s of the Fire and Police Pension Association (F .P .P .A .) ("Bo ard") have proposed
c,rtain plan amendments to the pensio n benefits set forth in Part 4, Article 31, Title 31
C R.S ., •n d as amended, with r es pect to members of the Statewide Defined Benefit Plan
C'Li1e Plan") said proposed plan a mendme n ts including four separate amendments to the
S tatewide De fined Benefit Plan; and
WHEREAS , the p ro pose d modifica tions to the Plan is set forth in the FPPA's Resol ution
No. 200 2-2, ado ptad by the Board on Fe bruary 27, 2002; and
WHEREAS , F.P.P .A. Board of Director s , as determined i n its Resolution 2002-3, ado pted
on Febru ary 27, 200 2, h as certified that the proposed pl an amendments will maintain or
enhance the actuarial soun dness of the plan, do not require an increase in the e mploye r a nd
memb er co ntribu tion rates , do not adversely affect the Plan's sta tus as a qualified plan, do
not adverse ly affect the pe nsio n benefits of retired members, and do not reduce the Pl an's
normal retireme nt age below what is permitted by law ; and
WHEREAS, F.P .P .A.'s proposed Amendment 1 -"COLA Calcul ation ." retirees and
be ne ficiaries may receive o Cost-of-Living Adju stment (C OLA) to their pension be nefits of an
amount up to 3% n year to be de termined by the FPPA Board; a nd
WHEREAS , F .P.P .A .'s proposed Amendmeut 2 -"S elf-direction of SRA ," members will
se lf direct the SRA monies in their acco unts in any investment optio n offered by FPPA, once
the members have retired (N°rmal , Early or Ves ted Retirement) or entered DROP; and
WHEREAS , F .P.P .A.'s proposed Amendment 3 -"Self-direction of DROP," members will
self direct the Deferred Retirement Option Plan (D ROP) monie s in their accounts in any
investment option offe red by FPPA, once t he members have enter ed the DROP; anc\
WHEREAS , F.P.P .A.'s proposed Amendment 4 -"DROP-early and vested r etirement,"
allows members who meet the re quirements for Early Retirement (age 50 OR 30 years of
service) and memb ers who meet the req uirements for a Vested Retireme nt (at leas t 10 -24
years of service and age 55 ) to participate in the Deferred Retirement Option Plan (DR OP);
and
WHEREAS , the Englewoo d members ofF.P .P.A. held an election and ha,e voted in favor
of F .P .P .A.'s proposed Amendments No. l 'ld No . 4 a nd against F .P .P.A.'s proposed
Am endmen ts No. 2 and No . 3; five (5) mem bers did not vote and thos e votes are co unted as
"No" vo tes;
NOW , T HEREFORE , BE IT RESOLVED BY THE CITY COUNCI L OF THE CITY OF
ENGLEWOOD , COLORADO , THAT:
Sl:w.an..l , The City Council of the City of Englewood , Colorado hereby casta ita
employer's vote in fa vor of F.P .P.A.'s propose d Amendmenta No . 1 and No. 4, and against
F .P .P .A.'s proposed Am endments No . 2 and No. 3.
ADOPTED AN D APPROVE D this 20th of May 2002 .
I , Loucrishia A. Ellis, Ci ty Clerk for ili,e City of Englewood , Co lorado, hereby certify the
above is a true copy of Resolution Na.52, Series of 2002 .
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COUNCIL COMMUNICATION
Date Agenda Item Sub ject
May 20, 20 02 10 ci Resolut io n castin g th e City of
Engl ewood's vo te as emplo yer regard ing
Fire and Poli ce PP,1sion Asso ciation
(FPPA ) pr opo~c d amendm ents
In itiate d By I Slaff Source
City of Engle woo d, r-inance and Adm inist rat ive Frank Gry gl ew icz, Direc tor
Serv ices Deoarlm enl
COUNCIL GOAL AN D PREVIOUS COUNCIL ACTION
Th e Ci ty Council ha s not ac ted on this iss ue in th e past
RECOMMENDED ACTION
Staff recommends City Coun ci l ca st its vo te regardin g the proposed amendm ent 10 th e Statewi de Defin ed
Be nefit Pl an as outlin ed be low. The vo le must be ce rt ifi ed to FPPA by Jun e 10, 20 02 .
BACKGROUND, ANALYSIS, AND ALTE RNATIVES IDENTIFIED
Th e FPPA has sub mit:ed lo ils ac tive plan memb ers fo ur proposed am endments to th e Sta te wid e Defin ed
Benefit Pl an. An elect io n has been held lo determin e if th e pro posed amendm ents should be ad o pt ed.
Any am endment must be app rove d by an affirm ati ve vo le of 65% of th e ac ti ve pl an members, and mue
than 50% of thei r empl oyers lo be ado pt ed. Memb ers who do not vol e are co un ted as a "no " vote.
Th e amend me nt and resu lt s of th e empl oyee vot e is as fo il ows:
Amendment 1: Retirees and beneficia ri es may receh•e a Cost-of-Livi ng Adjustment (COLA ) to thei r
pen sion benefits ot an amou nt up to 3% a yea r to be determined by the f PPA Bo ard.
Curren tl y -Re tirees and benefic:a ri es may receive a Cos t of Li vin g Adjuslm enl (C OLA) lo th eir
pensio n benefi ts of an amount no more th an the less er of th e Co nsum er Pri ce Ind ex (CP I) or 3% a
yea r 10 be determ ined by th e FPP A Boa rd .
Empl oyee vo le : In favo r: 40 Aga in st: 4 Eligibl e memb ers whn did not vo te: 5
Cos t of amendm ent as pe rcent (%) of payro ll :0%
Ame ndm ent 2: Members will self direct the SkA mon ies in their accoun ts in any inves tment option
offered by FPP A, once the memb ers have retired (Norma l, Early, or Ves ted Retirement ) or en tered
DROP .
Curren tly -SRA monies are commingled fo r investm en t purposes in the Fire & Poli ce Members'
Be:iefil Fund and earn inves tm en t ret urn based on th e performance of that fund.
Emp loyee vo te: In favor : 20 Against: 24 Eligible members who did not vo te: 5
Cos t of ame ndment as perce nt(%) of payroll: 0%
Amendment 3: Members will self d irect the Deferred Retirement Option Plan (DROP) monies in their
accounts in any investment option offered by FPPA, once the members have entered the DROP .
Cu m,ntly -DROP monies are cor:imingled for investment purposes in th e Fi re & Police Members'
Beneri 1 Fund and earn inve stm en t re tu rn based o n th e performance of th at fund.
Emp lo,ee vote: In favor· 22 Against: 22 Eligib le members w ho did not vote: 5
Cos , J ' :menclment as percen t (%) of payroll : 0%
Am endment 4: Allow members who meet the requirements for Early Retirement (age 50 OR 30 years of
sen•ice) and members who meet the requirements for a Ve sted Retirement (al least 10 -24 years of
service and age 55) to participate in the Deferred Retirement Option Plan (DROP).
Currently -Members w ho meet th e requ irem ents fo r Norm al Retiremen t (age 55 w ith 25 years of
serv ice) can participa te in th e DROP.
Employee vole: In favor : 41 Aga inst: 3 Eligible membe rs w ho did not vo te: 5
Cost o! amendment as percent (%) of payroll: 0%
Th e City Co unci l has the option to vo te the sa me as th e empl oyees, or vote in favor or agai nst any of the
proposed amendm en ts .
FINANCIAL IMPACT
Th is action does not directly impact the City's financial conditio n because there is no additional cost for the
ame ndments .
LIST OF ATTACHMENTS
Proposed reso lution
Fire and Police Pension Associat ion Plain Language Summary of 2002 Proposed Amendments
Fire and Police Pension A,;ociation Boa rd of Directors Reso lu tion No. 2002-2
Fire and Po lice Pension Association Boa rd of Directors Resolution No. 2002-3
FPPA -A Compariso n of th e Investment O pti o ns and Services for Proposed Ame ndments Two & Th ree
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FPPA
S I.A.II VVll>I
Define d Benefit Plan Plain Language Summary
2002
Proposed
Amendments
Introduction
FPPA is submittin g 10 e'llpl oyers and active plan members fou r proposed ame ndm ents 10 th e
Statewide Defi ned Be,. •Ji 1 Plan. An election is being held 10 determine whether the proposed
ame ndm ents will be adopted . In order 10 beco me effective , each amend ment mu st be app roved
by an affi rmativ e vo te of at least 6;% of the active pion members and more than 50% of their
emp loyers.
,\Jon g with the fo llowi ng plain lan guage summary of tlte proposed omendw u us, th e cost of each
amendm ent is :tlso given . Th e cost is sbown as a perce nl:lge of payroll tn othe r words , th e cost
shown is calcula ted based on the per ce nl:lge of the memb ers ' '.••Y that will be nt ede d on an
ongoing basis 10 fun d the benefi t offered by each amendme nt
Th ere :1re no costs anribul:lb le 10 the ado 9tlon of any of 1t .eSe amendments . Therefore, there will be
no reductions in flm1B :tllocations 10 each member's • ap:ir:i:e Retiremen t Account (S RA). As you
n:ay know, 8% of each member 's pay Is con tributed toward the Sl:ltewide Defined Benefit Plan , and
each emp loyer makes a m:ttching 8% co ntributi on. Contri bu tions not requi red 10 fund the actu:ui-
:tll y determined cost of the Sl:l tewi de Defi ned Benefit Plan :1re placed in the members ' SRAs . SRA
:tllocations are calculated annu:tlly, based on eac h ye:1r's actuarial stu dy of the pion , an d are
rounded up [o the nearest ½%. Fo r your inform :illo n, the am ount of the emp loyer contri butions
being placed in to each member 's SRA in 2002 is 1.;%, and in the past has ran ged from 4.5% 10
8.0%. If the amendments pass , current SRA acco un t balan ces will not be allected .
For proposed amendments 2 & 3, eJclt member will re ceive a comp:lrison of investment optio ns
and services ol':lilab le 10 assist them in deciding which pion meets th ei r needs .
This plain lan guage summa ry is accompanied by the FPPA Board Resolution No . 2002-2 wh ich
s1:11es the lull and e.<act lang uage of each proposed amendment For additional del:lils, please refer
10 that Resolu tio n.
Plain language Summaries of Amendments
Retirees and beneficiaries may rec eive a Cos t-of-Living Adjustment (COIA) to their
Amendment pensio n benefits of an amount up to 3% a year to be determined by the FPPA
Board.
Current◊• -Retirees and benefic iaries may receive • Cost-o f-Living Adju stment (COLA) 10 thei r
pe nsio n benefits of an amount no t more than the lesser of the Cons u'l!er Price tnde., (CPI) or 3%
• year 10 be determined by the FPPA Board .
Cos t of umendment as % of puyroll : 0%
FIRE & POLICE PEN SIO N ASSOCIATION
3031770•J772 • 800 /3 32 -3772 • 5290 OTC Partway, Suite 100, Greenwood Vijla9e . CO 80 111 • www.tppaco .org
Amendmentl
Amendment t
Plain Language Summaries of Amendments . conlintted
Members will self direct the SRA monies in th eir accr.u.1ts in any investment.
option offered by FPPA, once the members have retired (Nonna!, Early, or Vested
Retireme nt) or entered DROP.
Currently -SRA mon ies ar e commingled for inves tm ent purposes in 1he Fir e & Poli ce
Members ' Benefit Fund and e:irn inves tm ent rerurn based on th e performance of tl1at fund .
Cost of amendment as % of payroll : 0%
Members will self direct 1he Deferred Retirement Option r an (DROP) monies
in their accou nts in any investment option offered by FPPA , once the members
have en1ered the DROP.
C1mently -DROP moni es are commingled fo r investment purp oses in the Fire & Police Members '
Benefit Fund and e:irn investment rerurn based on the performance of tha1 fund .
Cost of amendment as r. of payroll : or. . f Allow members who meet the requirements for Ear ly Retirement (age 50 OR 30
Amendment years of service) and memb ers who meet the requirements for a Vested Retire -
ment (al least 10 -24 years of service and age 55) to participate in the Deferred
Retirem ent Option Plan (DROP ). •
Cu rrently -Members who mee l the requiremenlS for No rmal Retirement (age 55 wi th 25 years of
sernce) = participate in the DROP.
Cost of amendment as r. of payroll: or.
Effective Date of Amendments
If approved, the etrecti';e date of all omendments wil 1 be October I , 2002 .
-------------------FIRE & POLICE PENSION ASSOCIATION
303/770-Jm • 800IJ J2 -lm , 5290 OTC Parkway, Suite 100, Greenwooa Village. co 80111 • www !ppaco .o,g
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• FIRE AND POLICT i'ENSION ASSOCIATION
BOARD OF DIRECTORS
RESOLUTION NO. 2002-2
WHEREAS , Section 31 -3 1-408 , C.R.S., as amended , authorizes the Boar d of Direc tors of
the Fire and Pol ice Pension Association ("the Board '') to mod ify the pension benefits and the ag e
and ser.rice requirements for pension benefits set fonh in Pan 4, Anic le 31 , Title 31 , Colorado
Revised Statute s, as amended , wi th respe ct to the members of the Statewide Defined Benefit Plan
("the Plan "); and
WHEREAS , Section 3 1-3 1-408 , C.R.S ., as amended , sets fonh cenain co nditions whic h
must be met before the Boa rd may adopt any modification to the Plan , includ ing approval by at
least si,cty-fi ve percent of 1he ac tive members of the Plan and more than fifty percent of the
employers having ac ti ve memb ers co ve red by the Plan ; and
WHEREAS , pursuant to the authority granted in Section 31-31-408, C.R.S., as amended,
the Board has adopted Rule s establi shing the procedure which 1he Board will follow with respect
to i1s adoption of any modificat io n of 1he Plan ; and
WHEREAS , FPPA Rule 70 4.0 1 requ ires that the Board provide a co py of the language of
each proposed plan mod ific ati on 10 emplo ye rs for distribution 10 ea ch member of the Plan ; and
WHEREAS , if adopted, the propo sed amendment s will onl y affe ct the Statewide Defined
Benefit Plan ;
NOW , THEREFORE , BE IT RESOLVED , that the Board hereby proposes the following
modifi cation s to the Plan which shall be submittd for appro val to Plan employers and Plan
members pursuant to the provisions of Section ·3 l-3 l -40 8, C.R .S., as amended , and FPPA Rule
704 .
Amendment One : Removal of co nsumer-price index limitatio n on statewide defined
benefit plan :
Sectio n 3 1-3 1-407(2) and (3) C.R.S. to be amended as follo ws :
2) {a) S11&jee1 te the limitati eRs ee RtaiRed iR s11eseetieR (3) ef trus seetieR , aRd e:Eeept fer tetal
disaeiliey eeeelits p~aele p11Fs11ae1 te seetiees 3 ! 3 ! 893 (!) aed 3 ! 3 ! 896 .5, (T)he
redetermination of benefits :Jaya ble under subsectio n (I) of this section shall be computed as
follows : The amount of the l!enefit on the effective date of the benefit shall be increased by a
perc enta ge to be detenni ned by the board but no more than three percent for each full year
contained in the period commencing with the effective date of the benefit and ending with the
effective date of the redetermination . Be gi nning in 2002, the amount of the benefit on the
effective date of the benefi t shall be increased by a percentage to be determined by the
board but not more than three percer I or the prior yea r 's benef,;. In no event s ha ll the •
benefit be de creased.
(3) (a) l11 11e e, e11t shall !he rede!ermi11ed amou m pro,;ided for i11 S11eseetie11 (2) ef !llis seetio11
Ile;
(I) bess !hEIII !he Elff!OU11t ef1he be11elit 011 !he e!fee!i•,e da!e of the ee11efi 1; er
(H) More thEl!I !he amou11t of the ee11efi! ee the e!feeti,•e date ef !he eeRefi! multiplied 8) a
6'aeEion, !he 11ume rate r efu•l¼ieh shal l Ile !he a,•e r~e of!he eoes umer priee indei£ for th e twel•,•e
moRtl!s ie the ealeedar )ear immediate!) pre eedieg the e!feeEi•,e date eftl!e redetermi11a1io11 aRd
t-l!c de11omi11a1or ef .,·hieh shal l Ile !he a.·e rage of1he eeASumer priee iede .c for the !welYe moetbs •
ie the eale11dar year immediately preeedi11g !he e!feeti,•e date of!he be11e!l!. IR 110 e,eRI shall !he
eum era!o r of!he !Fae1i,i11 Ile le ss !P.Elll !he deeomi11a!or.
(e) I'd used i11 paragraph (a) efthis suese etioe (3), !he !erm 'eo 11sumer priee iedei c' meEl!ls the
eaEioeal eo11sumer priee iede .c for ureEl!I • age eareers El!ld eleri eal werlcers prepared b) the Uei!ed
Srotes departmefl! oflaeor. Sueh ce 11sumer pri ee i11de1c shal l be deemed !e ha,e sueh base peried
as is ie e!fee! JEl!IU&F) I , 1969 .
Amendment Two : Self Direction ,or SRA monies for ret ired and DROP member,;,_
A new Section 3 1-31-406 .5 to be adopted as fo ll ows :
31-31-406.5 Self Direction or separate retiremen t account. Ir a retired member
elects to receive payment of the member's separate retirement accocnt funds in periodic
installments or elects to defer re, eipt of funds , the unpaid balance in the member's separate
· retirement account will continue to accrue actual earnings based on the member's direction
for the investment of the separate retirement account. The separate retirement account
assets shall be held for investment purposes as part of the fire and police members' self-
directed investments fund , subject to such rules as may be adopted for the administration
of the member se lf-directed investments. The Board shall be authorized to charge each
account a fee for the administration of the separate retirement account. The Board shall
direct the investment of the member's separate retirement account until the member
provides direction on the in ves tment of the acc ount.
A new Section J 1-31-405(4.5) to be adopted as iollows:
(4 .5) For purposes of this Section 31-31-~05 C.R.S., members of the deferred
retirement option plan shall be deem ed to have terminated se rvice.
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Section 3 1-3-4 09.5(8 ), as adopted as pan of Amendment 5, Fire and Police Pensio n
Associatio n, Boa rd of Directors Reso luti on No . 98 -2, dated Febru ary 23, 199 8, to be
amended as fo ll ow s:
(8) Upon co mm ·nce ment of the member's pan ici pati on in the DROP , the memb er shal l
remai n an ac ti ve member. Neve rthele ss, the member shall earn no add iti onal se rvice credi t or
additional benefit s under the Statewide Defined Benefit Plan . For purposes of Section 31-31-
405 C.R.S .. a member participating in the DROP shall be deemed to have terminated
service.
A new Sect ion 31 -31-409 .6 to be adopted as foll ows :
31-31-409 .6 Fire :ind police members ' self-directed in vestments fund -creation
-manage ment. (I) (a) fhere is hereb y cre ated the fi re and police memb ers' self-directed
in ves tment s fund that sha1 1 co nsi st of the asse ts of member se lf-direct ed fund s administered and
managed by the board pu rs uant to sections 3 1-3 1-406 .5 and 3 1-3 1-40 .5(10), as adopted as part
of Amendment s 2 and 3, Fire and Police Pen sio n Association , Board of Directors Resolution Ne .
02 -~ dated ------~ 2002 . The board shall keep an acc urate acc ount of each such
indivi dual fund . In add ition , th e board shall keep an acc urate account of each member's se p:irate
account in any suc h indi vidual fund . The board may allo w a mem be r to exercise cont1ol of the
investment of part or all of the member's accrued benetit und er the member's plan . ln al low ing a
me mber to exercise such co ntrol, the board shall :
(I) Se lect at least three inves tment al ternati ves, eac h of which is di versified in itself, thal
al low the memb er a broa d ran ge of investments and a meaningful choi ce between risk and return
in the investme nt of the memb er's accrued benefit ;
(II ) Nlow the memb er to chan ge investment s at lea st once each calendar quarter; and
(Ill) Prov ide the member with information describing the invest ment alternative s, the
. nature , investment · pe rfor man ce, fees , and expenses of investment alternatives , and other
information to enable a member to make informed investment decisions .
(b) The board shall adop t rules gove rning the calculati on and allocation of earnings and
lo ss es under the various inves tment alternati ves that it may offer, the transfer of assets between
fund s und er each alternati ve, the allocation of a member's account between investment
alternati ves . and such other matt ers as ma y be nece ssary to its administratio n and management of
the fund created pursuant to this section .
(2) The boa rd shall be the tru stee of th e fire and police members' se lf di recte d investments
fund subject to the member s' all oca tion of moneys in th ei r accounts to the alternatives offered by
the board . A memb er who exe rcises co ntrol ove r the plan assets in the member's acco unt shall
not be deemed 10 be a fiduciary by re aso n of such exercise of co ntrol , and the board shall not be
liable for an v loss th at res ults from such exercise Jf co ntrol.
(3) The board shall designate one or more fin ancial insti tuti ons as custodians of the fund .
N I moneys paid or tra nsmitted 10 th e cus todi an shall be credited to appropriate accou nt s in the
fund , and the custodi an shall maint ai n a cu rr ent in ve nt ory of all investme nts of the fund .
(4) Disbursements from the fund shall be mad e, subject to the approval of the board, only
for payment of the expenses of the association in connection with the administration of the fund, •
refunds to the me mbers , benefits , and investment purposes .
(5) Reserved .
(6) Reserved .
(7) The board shall submit an annual audit of the fund to the gene ral assem bly and to each
emp loyer that has active or retired members with balances in the fund . Eac h employer shall male ~
the audit and stud y available for review by its members .
Amendment Three : Me,nber Self Direction of Deferred Retirement Option Plan ffiROP)
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Secti on 31-31-4 09.5 (JO), as adopted as part of Amendment 5, Fire and Police
Pensi on Association, Board of Directo rs Resolut ion No . 98-2 , dated February 23 ,
1998 , 10 be amended as follows :
(10) The DROP assets shall be held in trust for investment purposes as part of
the fire and police members' self-directed investments fund , subject to such rules as
may be adopted for the administration of the trust. eenti1111e te be eemmi ngleEI fer
in,estmeet p11rpeses as paR efthe lire ooEI peliee members' beeefit filnEI ooEI shall be ereEiit eEI
wit-h net in •·estment eafllings ooEI lesses at the same rate as ether assets in the files . The
Board shall be authori zed to charge each account . fee for the administration of the DROP .
A new Sectio n 3 1-31-409 .6 to be adopted as follow s:
31-31-~09 .6 Fire and police members ' self-directed investments fund -creation
-management. (I) (a) Ther e is hereby created the fire and polic" members' self-directed
investments fund that shal l consist of the assets of member self-directe.i funds administered and
managed by the board pursuant 10 sec tions 31-3 1-406 .5 and 31 -3 1-409 .5( 10), as adopted as part
of Amendments 2 and 3, Fire and Poli ce Pension Association , Board of Directors Resolution No.
02-___, dated ______ _, 2002 . The board sh all keep an acc ura :e account of each suc h
individual fund . In addition , the board shall keep an accurate acco unt of each member's sep arate
account in any such individual fund . The board may allow a member to exercise control of the
investment of part or all of the member's accrued benefit under the member's plan . In allowing a
member to exercise such con trol , the board shall :
(I) Select at least three investment alternatives , each of which is diversified in itself, that
allow the member a broad range of investments and a meaningful choice between risk and return
in the investment of the member's acc rued benefit ;
(II) Allow the member to change investments at least once e~.h cale ndar quarter; and
(111) Provi de the member with information describing the investment alternatives, the
nature. in vestment performance , fees , and e><penses of investment alternatives , and other
information to enat.e a memb er to make info rmed investment decisions . •
• (b) The board sha ll adop t rule s go vern ing the calculati on and allocation of earnings and
los ses •mder the various investment alternati ves that it may offer, the transfer of assets between
funds Jnder each al ternative , the al location of a mem ber's account between investment
alterna tives, and such ot her matters as may be neces sary to its admini stra tio n and manageme nt of
the fund c:ea ted pursuan t to thi s sectio n.
('.!) The board shall be th e trustee of the fire and police membe rs' se lf directed invest ments
fund subject to the members' all ocatio n of moneys in th ei r accounts to the alternati ves offered by
the board . A member who exercises control over the plan assets in 1he member's acco unt shall
not be deem ed to be a fiduciary by re aso n of such exe rcise of co ntrol , and the board shall not be
li able for any lo ss that re sult s fr om such ex erci se of control.
(3) The board shall designate one or more financial ins tituti ons as custod ians of the fund .
All moneys paid or tran smitted to the cus tod ian shall be credited to appro priat e acco unt s in the
fund , and the cus todian shall mai ntain a current inventory of a.I in vestments of the fund .
( 4) Di sbur sement s from the fund shal l be made , su bject to the appro val of the board, only
for payment of the exp enses of the as sociation in conne ct ion wi th 1he administratio n of 1he fund ,
refund s to the members, benefits, and investment purposes .
(5) Res erved .
(6) Reserve d.
(7) The board shall submit an annual audit of the fund to the general
ass embl y and to eac h empl oyer that bas active or retired members with balance s in
the fund . Each employer shal l make the audit an d stud y availabl e for revie w by i1s
member s.
Amendment Fo ur : DROP for ea rly and ves te d retire ment s.
Section 31-3 1-409 .5(2), as adopted as part of Amendment 5, Fire and
Police Pension Associatio n, Board of Directors Reso lut ion No . 98 -2, dated
Febru ary 23, 1998 , to be amended as fo ll ows :
(2) The provis ions of chis section are applicable wi th respect to th ose 01hei,;,i se eligible
members of the Statewide Defined Bene fit Plan whose electio n 10 partic ipate in the De ferred
Retire ment Op1ion Plan occu rs on or aft er the effective date of 1his sec ti on. An "eligi ble member "
is any member who is el igi bl e for norm ~! retirement in ac cordance wi th section 31-3 1-403 C.R.S.,
who has reached retirement age but bas not reached the required service, who is eligible for
a vested retirement in accordance with section 31-31-~04(2) C.R.S., or who is eligible for an
early ret irement in acrordance with section 31 -31-403(4)C.R.S.
Section 3 1-31-409.5(9), as adopted as part of Amendmeat 5, Fire and
Police Pension Association , Board of Directors Resol uti on No. 98 -2. dated
Februl!l)' 23, 1998, to be amend ed as fo ll ows :
(9) Upo n com men ,ement of1 he member's participatio n in the DROP , the R9fff!a!
reti rem ent benefits provided in this part 4 and 1he member contributions pro vi ded in this part 4
shall be paid into the member's Deferred Retirement Option Plan account ln no case s:1all the
employer co ntribution be used to fund the DROP . •
Upon approval by the members and the employers , these amendments shall
become effective October I 2002 .
IN WlTNESS WHEREOF , I ha ve hereunto set my hand on this n1h day of
Febr Ja,y,2002 .
STATE OF COLORADO )
) ss.
County of Arapahoe )
FIRE AND POLICE PENSION ASSOCIATION ,
a political subdivision of the St ate of Colorad o
~~~ai~-
Board of Directors
The foregoing Re so lution was acknL-wledged before me this 27"' day of February, 2002 ,
by Ron Lappi ., Chairman of the Board of Oirectors , Fire and Police Pension Association, a
political subdivision of the State of Co lorado .
Witne ss my hand and official seal. My commission expires : _________ _
Notary Public
(Seal)
•
•
•
FIRE . .\ND POLICE PENSION ASSOCIATION
BOARD OF DIRECTORS
RESOLUT ION NO. 2002-3
WHEREAS . pursuant to the authorit y gra nt ed in Section 3 1-3 1-408, Colorado Re vised
St atutes . as amended. the Board of Direc tors of the Fire and Poli ce Pension Association ("the
Board'") has proposed ce nain modificati ons to the pe nsion be netits set fonh in Pan 4, Article 31 ,
Title 31. Colorado Revised Statutes. as ame nde d, with respect to the members of the Statewide
Defined Benefit Plan ("t he Pl an"); and
WHEREAS. the proposed modifications to the Pl an are set fon h in the Board 's
Reso lutio n No . 2001-1 , adop ted by the Board on Feb rui.r y 27 , 1001; and
WHEREAS, FPPA Rule 704 .02(b) re quires that prior to an electio n by employers and
mem ber s on any proposed modification to the Plan . the Board shall provide emplo ye rs wi th a
cen ificati on tha t th e proposed modifica ti ons co mply wi th the req uire ments set fonh in Section
31-J 1--l0S. Colorado Revis ed Statutes. as amende d:
NO W, THERE FO RE , BE IT RESOL VED , tha t the Board hereb y cenifies that the
proposeJ modifi ca tio ns to the Plan set fonh in Board Re solu tion No . 1001-1 comply with the
re qui rem ents set fo nh in Se ctio n J 1-3 1-408 . Th e Board finds an d det ermin es the fo ll owing :
I The prop ose d mod ifica tio ns will maintain or enhance the ac tu ari al so undness, as
specitieJ in Se ct ion 3 1-3 1-102 (I). of the Pla n.
c. Th e propose d modificati ons du not require an increase in the employer and member
contributi on rates established as of January I. 1980. pursuant to Section J 1-3 l--l 02 .
3. The pro posed mod ifi cat ions do not ad verselv affect the Pl an 's status as a qualified
plan pursuant to the "Internal Reve nee Code of 1986 ." as amended .
-l . The proposed mod ifications do not adversely affect the pension be nefits of retired
members
The proposed i,1oditications do not reduce the Plan· s normal reti rement age below that
Resolutio n 2000 -3 Pa ge 2
permitte d bv Section 31 -3 1-403 (I) (b).
rN WITNE SS WHEREO F. I have hereu nt o set my ha nd on thi s 27th da y of February ,
20 02 .
ST ATE OF COLORADO )
) ss .
County of Arapahoe )
FIRE A.ND POLI CE PE NS ION ASSOCIATION ,
a po litic al su bd ivis ion of the State of Co lora do
By:~~-
Ron Lappi , Chau
Boa rd of Dire cto rs
The fo regoing Re sol ut io n w~:; dCknowled ged before me th is 27 th day ofFeb, u,1ry, 2002 ,
•
by Ron Lappi . Chair of the Board of Directors , Fire and Police Pension Associat ior., d po litical •
sub di vision of the State of Co lorad o.
Witnes s my hand and official seal. My comm iss ion exp ires : _________ _
Notary Pub lic
(Seal)
•
•
•
•
.FPPA A Comparison of the
Investment Options and Services for
Defined Benefit Plan Proposed Amendments 1\vo & Three
S IAII VVll>I
2002
Proposed
Amendments
Amendmentl
-
This ye:ir, Sllllewidc Defined Benefil Pl an members will be voting on four :unendmems . 1\vo
or !he four proposed :unendmenlS will req uire members 10 se lf-direcl moni es in 1heir SRA
an d DROP accounis . In order to p:JSS , 6;% of !he active members and; I% or the employers
must vole 10 p:JSS the :un endmenis . To assist members in deciding which plan meets their
needs, we have provided the proposed :unendmenlS below along wilh a comparison benvee n
the current plan and the proposed changes to !he plan on !he next two pages .
Members will self-direct the SRA monies in their accounts in any investment option offered
by fPPA, once the members have retired (No rmal, Early, or Vested Retirement or entered
DROP).
In the current plan . SRA monies are commingled for investment purposes in the fire &
Police Members ' Ben efi t fund and e-Jrn inves tment rerurn based on the performance or the
fund .
Amendment~ '!J Members will self-direct the Deferred Retirement Option Plan (DROP) monies in their accounis
in any inves tmem option offered by f PPA, once the members have emered !he DROP.
In the current plan , DROP monies are commingled for inve,;tment purposes in 1he fire &
Police Members' Benefit fun d and earn investment rerurn based on the performance of that
fund .
F I R E AND POLICE PENSION ASSOCIATION OF COLOR ADO
Cum ntPlan
Fire & Potice Members ' Benefit Fund
I. Tho SR\ :ind DROP monies are commingled m the Fire & PoUc e
Members' B~nefi 1 Fund for inves tment purposes :ind e:trn an
invest ment return b:tSed on the performance of the fund .
~-The FPPA Board develo ps the aUoca ti on of funds strategy :ind
has the fo U01ving curre nt ta rge t aUoc1tions : 35% in Domesti c
Eq11i tit.'S , 13 % in lni emali onal Equ ities, 2i% in Dome:n!c Bo nds ,
6% in Re:tl Es tate, 8% in Private Equi ty1 nd I% in Cash . Memb ers
cann ot se lf-direc t fun ds . Th e Board re tnin s profes sio nal
investmen t manag ers to manage .1 moun ts :tll oc:ited to e:ich :tSSet
cl ass . The enti re prog r.im is monitored by FPPA stnff and outS lde
consult:i ncs .
3. Monthl y V:tlu atio n -th e :issets in your acco unt wlU be V"J!ued
Jt the dose or every month , en:1b lin g yo u to ge t upJated baJ ances
monthly.
4. Upo n reti remclll , memb ers may s1ay in [he fu nd or with draw
thei r accou 111 b:tlonces . Once members 1vi1h on SRA begi n to
c:ike distrib ution o£their :tcco unt, 1h ey must irrevoc:i bly design ate
on inveslment rJte. Th ev con choo se ei ther the FPPA .\ctuari :tl
Rote (currently8 .1l%) or' the FPPA Totol Fund Rate (th e 101ol ra te
re:tlized bv FPP.\ investm entS). DROP me mb ers receive the FPPA
Tot:tl Fu nd Rote.
5. Me mbt:rs am.I reti rees receive quarte rly s1:i1eme nts.
6. Fees are :tSset -based . Histo ric:tlly, fees have been less thon
oue-h a~ of one pe rce nt of yo ur , ·t:tl acco unt b:tl once . In 200 I,
£ees we re 0.33 %. Fee s :ire sub jec t 10 change.
/. Distribmio n no rm:illyoc~urs as soo n :1s 60 d:iy::; fo llowing FPPA
Board .tpproval of yo ur retirement applic:.uio n.
co11 ti 1tttet!
Pro pose d Plan
Investmen t Op tions Offered by FPPA
I. Fidelity Investments is FPPA's pion ser1lce provider fo r th e •
SWMP and the 45 7 Defe rred Co mpensation Plan . If memb ers an d
employers approve ,~e nvo amendmen ts lbted above , FideU tyw iU
beg in 10 provide record keepin g and investm en t option s for SR\
{o nc e the members h'.!.;-e retired un der No rm:1I. E:trl v. or Vt'sted
Reti rement or emered DROP) and DROP acc ou111s· (one• the
members have ent ered the DROP). FPPA's Bo:i rd retains th e rig ht
to ch111ge fu nds wi thin Fide Lity, chan ge pro vid ers f· -,, Fidelity 10
on other outside pro,;der. or bring the se rvi ces b:icK m-house. In
th e event of a change , eoc h p:irtlclp:mt wo uld have th e oppo rnmi ~•
10 decide how fu nds sho uld be reaU ocated 10 any new investment
opti ons.
2. Members choose from o Listi ng of investm ent optio ns se lected
by FPPA . The fun ds are arranged on • sca le by invest ment
objective, fr om copit:l! preserv:ttio n to agg ressive growth. All
im·es tmen t options ore mu ru:tl fu nds, exce pt the Managed In co me
Portfo Uo. o Sl:l bl e sJ!u e fund seeki ng to prese rve yo ur prin cip:tl
investmen t whil e e:.irn ing interes t income. Memb ers may self-
direc t invest ments d:tliy. Th ere m curr ently 16 differe nt nmds
offered.
3. D-J!ly V:tl uation -th e :issets In your occ ount will be v:tl ued 31
th e close of every busi ness day, enobLin g yo u 10 get updated
b:tlan ces doily.
4. Up on reti emen t, memb ers may stay in the Fide Uty fun ds or
wit hdrow thei r acco unt bolonc es . If mcmb e,J sl:ly in th e fund s.
they co ntinu e to self-di rec t their investme nt optio ns. (Red rces
who ore olrc-Jdy ta ki ng di.s tributi on of th ei r SRA oc coun tS wiU be
abl e to make o one-tim e irrevocob le election to stov with tltei r
origi n:tl inves lm ent r:ue or tr:i nsfe r thei r acco unt bal:inces to
Fi deUty.)
5. Memb ers :md red rees receive quarterly statements .
6 . .\nnuol administrati ve fee is $20. Each fund :tlso h:t:i on annu al
fu nd operating expense . In 200 I. expenses ra nge d fr om 0.19%
10 1.29 %. Expenses are sub jec t 10 chonge .
7. Dis tributio n no rmoll y occurs with in J -7 da)> fo Uowi ng FPPA
Board :ipp rO\'"Jl of yo l':' retirem tni :,~plic:uion .
co nti,metl
FIRE AND P O LI C E PENS IO N ~SSO CI AT IO N OF COLORAD O
Current Plan
Fire & Police Jl,Je mbers ' Benefit Fund
S ,PPA st:iff ls primary comm fo r inquiries ob out vo ur occ ount,
,1, ndoy th rough Friday, 8:00 a.m. to ;:OO p.m.
o r ~\ r,p resent:1til'es are 01 yo urworkploce throughout the yeor
to cu r,Uuct educ:Uional mee tings :tnd 10 me et with members one •
on-o ne.
10. FPPA co ntinues 10 occo unt fo r contributions and tr:rn snti t to
pr01ide r.
Propo se d Plan
Investment Options Offered by FPPA
8. For info rm atio n abo ut you r account, Fidelity offers Int ernet
occ ount occess; ou tomated ph one se rvices 24 hours a doy, seven
days a week: and Retirement Services Specialists 31-:,.ilnble Monday
through Friday, 6:00 :t.m . to 10:00 p.m. MT.
9. lnresunent educotion is offe red through the Internet or throu gh
th e Fidelity Reti rement Services Speci .Usts . FPPA representoti ves
ore olso 01 yo ur workp lace throughout the ye or 10 co ndu ct
ed uc otio nal meetings :ind to mee t wi th members one-o n-o ne.
10. FPPA co ntinu es to account fo r contributi ons ond tra nsntit 10
provi der.
F l R E A t i D P O L l C E ? E N S I O N A S S O C l A T l O N O F C O L O A A D 0
5290 OTC P•rkway. Suite 100. Greenwood Village, CO 80111 • (303) 770-377 2 • (800) 332-3772 • www.fppaco.org