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HomeMy WebLinkAbout1993-01-12 NEERB MINUTES(' I NON-EMERGENCY PENSION BOARD MEETING January 12, 1993 A regular meeting of the Englewood Non-Emergency Pension Board was called to order by Chairperson Richard Kahm, at 4 : 14 p. m. in the Conference Room A of the Englewood City Hall, 3400 South Elati Street, Englewood, Colorado Members Present: Members Absent: Others Present: Richard Kahm , Chairperson Susan Van Dyke, Council Member (arrived at 4:30 p.m .) Jill Mees, Council Appointee LeRoy Da Vault, Council Appointee Lorraine Hayes, Director of Financial Services Betty Goosman , Employee Representative Gary Bowman, Council Appointee Donald Mazanec, William M. Mercer Inc. Carol Wescoat, Administrative Assistant II A quorum was present. * * * * * Approval ofMinutes MS . HA YES MOVED, AND MS . MEES SECONDED, TO APPROVE THE MINUTES OF THE REGULAR MEETING OF OCTOBER 20 , 1992 AND THE JOINT MEETING OF OCTOBER 27 , 1992 . Ayes : Nays : Absent: The motion carried . OLD BUSINESS Kahm, Van Dyke, Mees, Da Vault, Hayes None Betty Goosman, Gary Bowman * * * * * Change in City Contributions to Pension Plan Ms . Hayes reviewed a copy of the Admin News article clarifying that there is no increase in the Non-Emergency pension benefits. 19 92 Final Actuarial Report Ms. Hayes mentioned that she had contacted Rob Johnson regarding the questions that had been raised about the draft of the report discussed at the last meeting. All questions were addressed in the final report. Consider COLA Mr. Kahm commented that it had been two years since the last cost o f living increase for the retirees . Mr. Mazanec reviewed his hand-out estimating the cost impact of granting a three percent (3%) cost of living increase . A three percent increase would actually extend the unfunded liability by three (3) years. Basically, the unfunded liability would be extended by one year for each percent of increase. He suggested the increase not be based on the years of retirement to avoid establishing a pattern that the IRS could determine as part of the plan , automatic, or a guaranteed increase. The increase should be effective either January 1st or July 1st. Ms. Mees was concerned that a COLA for the Non-Emergency would affect the other retirement plans . Ms . Hayes explained each plan has a separate board and its administration is intrusted with making sound decisions for their plan. The other two defined benefit plans are not in the same situation as the Non-Emergency Plan since their benefits begin at 2 .5% of salary and increase up to 65% of final pay based on years of service. The Non-Emergency plan is supplemented by social security and many of the others are not. Ms . Mees questioned the basis for a three percent (3%) increase and Mr. Mazanec explained the average cost ofliving increase according to the Consumer Price Index, and the social security increase as well , for the last two years was close to three percent per year. The proposed timing of an increase was not definite, so he had prepared 3% to allow some options as to how much of an increase is to be approved . Mr. Mazanec did not want to tie the increase into anything in particular . He felt if there has been no COLA for two years there is justification for a five percent (5 %) increase . Mr. Kahm did not feel a need existed for a six percent (6%) increase . He also stated that the last increase was making up for eight or nine years at three percent (3%) per year, but this was not compounded . Receiving an increase more frequently is to the retiree's advantage. Mr. Mazanec reiterated the necessity to make it clear, that the increase contains no guarantee of future increases . Each increase must be based on the exp e rience of the fund . Mr. Kahm pointed out the increase at this point does not extend the payment for the unfunded liability beyond the original 20 years projected , but should there be an increase in unfunded liability in two years there will also need to be an increase in the contribution . '\ \ Ms . Hayes did not want to extend the payment beyond twenty years , so a five percent (5%) increase is the most she would recommend . Mr. Mazanec stat ed that the figures in the projection actually decrease for the time that the increase has been deferred . If the COLA is effective for all participants who have retired prior to a specified date, the pattern of increase has been changed . M s. Mees expressed concern with the effect on the required contribution with the increase . She felt City Council could take that under consideration before approval. Mr. Mazanec's calculations showed that the City's contribution rate would increase from 4 .997% to 5.179% in order to inst itute the COLA Both rates however, are lower than the rate of 5.363% contained in the City's budget. Ms. Hayes stated that the response from the retirees after the last COLA had been positive . Mr. Mazanec indicated the increase should be for all retirees as of a specified date . This would eliminate an increase to any retirees who have recently retired . Some inequities might be created and these are the type of questions that City Council may be asking. Ms . Hayes explained th at emplo yees received a 3 .75% pay increase on January 1, 1993 . Ms. Mees stated that if the specified date ofretirement would be prior to January 1, 1993 , all retirees after that date would have received the pay increase. Mr. Mazanec suggested July 1, 1993 for the effective date of the increase, with the increase being for all retirees as of January 1, 1993 . This would allow time to implement the COLA without any retroactive increases . MS . MEES MOVED, AND MS . VAN DYKE SECONDED, TO RECOMMEND TO CITY COUNCIL A COST OF LIVING INCREASE OF FIVE PERCENT (5%) EFFECTIVE JULY 1, 19 93 FOR ALL RETIREMENT RECIPIENTS AND BENEFICIARIES WHOSE PAYMENTS COMMENCED PRIOR TO DECEMBER 31 , 1992 . Ayes : Nays : Absent: The motion carried . NEW BUSINESS Kahm, Van Dyke, Mees , Da Vault, Hayes None Betty Goosman, Gary Bowman Manual Alcantar Retirement Ms . Hayes said that Manual Alcantar had requested retirement as of the end of February. Jim Haselgren Bridging Service Ms . Hayes reviewed the memorandum pertaining to the bridging of service for Jim Haselgren . She interpreted the Englewood Municipal Code to allow his monthly retirement amount to be calculated by the usual formula (1.5% X Years of Credited Service X Final Average Compensation) and then reduced by the actuarial equivalent of any distribution of pension contributions he received upon his earlier termination that were not repaid at re-employment. Ms . Hayes read the portions of Code that clarified the bridging for breaks in services . She specified the importance of the board members concurring with her interpretation of the Code because of the substantial difference in benefit for Mr. Haselgren . Mr. Mazanec explained the actuarial methods used to determine the amount of the reduction from the monthly benefit. MS. VAN DYKE MOVED, AND MS. HA YES SECONDED, TO ACCEPT THE CALCULATIONS ACCORDING TO CODE TO ADruST JIM HASELGREN'S RETIREMENT BENEFIT BY BRIDGING HIS PRIOR SERVICE. Ayes : Nays : Absent: The motion carried . MEMBERS CHOICE Kahm, Van Dyke, Mees, Da Vault, Hayes None Betty Goosman, Gary Bowman Certificates of Appreciation Lorraine Hayes presented to Mr . DaVault, Ms . Mees, Ms. Hayes , and Mr. Kahm , Certificates of Appreciation and City of Englewood pens from the City in acknowledgment of the board members' service in 1992 . MR. KAHM ADJOURNED THE MEETING AT 5 :08 p.m. /}, l --ft/[ (J.-f ! l )t-'\J~ ~J_ Carol Wescoat Recording Secretary