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HomeMy WebLinkAbout2012-02-14 NEERB MINUTES• • • NONEMERGENCY EMPLOYEES RETIREMENT BOARD MEETING February 14 , 2012 Member Hagan called the regular meeting of the Englewood NonEmergency Employees Retirement Plan Board to order at 3:00 p.m. in the Public Works Conference Room of the Civic Center, 1000 Englewood Parkway, Englewood, Colorado . Members Present: Members Absent: Others Present: Frank Gryglewicz, Director of Finance and Administrative Services Bradley Hagan , Chairperson , Employee Representative James Jordon , Council Appointee John Moore, Council Appointee Mahendra Patel , Secretary, Employee Representative Jim Woodward, Council Member Bobbi Oxford, Council Appointee (with notice) Jerry Huggins, Innovest Portfolio Solutions (left at 3:55 p.m.) Gordon Tewell, Innovest Portfolio Solutions (left at 3 :55 p.m.) Diane Hunt, Gabriel Roeder Smith and Company Joe Herm, Gabriel Roeder Smith and Company Mary Brauer, Reinhart Boener Van Deuren Norris & Reiselbach, PC (arrived at 3:56 p .m .) Sue Eaton , Director of Human Resources (arrived at 3:56 p.m .) A quorum was present. * * * * * Seating of Reelected EmRloyee, Mahendra Patel and Bobbi Oxford, Citizen City Council Appointee The Board congratulated Mr. Patel. Ms. Oxford was unable to attend the Board meeting. Election of President/Chairperson and Secretary MR. GRYGLEWICZ NOMINATED BRAD HAGAN AS PRESIDENT/CHAIRPERSON. MR. MOORE SECONDED Ayes: Nays: Absent: Gryglewicz, Jordan , Moore, Patel , Woodward None Oxford Abstention : Hagan The motion carried. MR. GRYGLEWICZ NOMINATED MAHENDRA PATEL AS SECRETARY. MR. MOORE SECONDED. Ayes: Nays: Absent: Gryglewicz, Hagan, Jordan , Moore, Woodward None Oxford Abstention: Patel The motion carried. Approval of Minutes MR. GRYGLEWICZ MOVED TO APPROVE THE MINUTES OF THE NOVEMBER 15, 2011 REGULAR MEETING . MR. PATEL SECONDED. Ayes : Nays: Gryglewicz, Hagan , Jordan , Moore, Patel, Woodward None Absent: Oxford The motion carried. lnnovest Portfolio Solutions, LLC Mr. Huggins outlined the issues involved with changing custodial services to Schwab . The transition to Schwab could provide a substantial cost reduction of the Plan fees. Schwab is based in the State of California and operates under the laws of that state . The Schwab attorneys were not willing to change the agreement to comply with requirements that govern Colorado public sector contracts. The Plan cannot use Schwab's services . Mr. Moore inquired about other companies that may provide the opportunity to reduce fees . Mr. Huggins stated that Innovest has been working with Wells Fargo on some other issues and there may be an opportunity to create a relationship pricing with the Innovest defined benefit clients . Wells Fargo is the Plan's current custodial bank. lnnovest will keep the Board informed of any possible opportunities. Mr. Huggins reviewed the 2011 market; he highlighted events that affected the market. Mr. Woodward asked about the negative $8 ,301 cash amount listed on page one . Mr. Tewell will check on it. Mr. Tewell covered the fourth quarter portfolio review and analys is of each fund in the Plan . He indicated that a couple of the funds are of minor concern and will be monitored closely. Allianz is a minor concern and will be addressed after the end of current quarter if a change is needed . The Board agreed to take the agenda items out of order to allow additional time for Ms. Brauer to arrive. Discussion of Studies to include with January l, 2012 Actuarial Report Ms . Hunt asked the Board ifthere are studies to be included with the current actuarial report . The Board agreed that no studies need be included with the report. Ms. Hunt reminded the Board that they will review any changes to the mortality tables . Retirement Approvals and Notifications : a. Consideration of Retirement Benefit for Michael Norris b . Consideration of Retirement Benefit for Dario Toledo c . Consideration of Retirement Benefit for Delmer Thompson d. Notification of Benefit Request for Aladino Archuleta e . Notification of Retiree Paul Kapaun 's Death f. Notification of Benefit Amount for Beneficiary of Connie Janney MR. GRYGLEWICZ MOVED TO APPROVE THE ITEMS LISTED ON THE BENEFIT APPROVALS AND NOTIFICATIONS. MR. PATEL SECONDED MR. PATEL SECONDED. Ayes: Nays: Gryglewicz, Hagan, Jordan , Moore , Patel, Woodward None Non Eme rgenc y Employees Retireme nt Board Meeting 2 of 4 • • • Absent: Oxford • The motion carried. • • Mr. Tewell and Mr. Huggins left at 3:55 p.m. The Board took a brief recess from 3 :55 -3 :58 p.m. Sue Eaton and Mary Brauer arrived. Discussion of Proposed Plan Document Amendments: Mandatory Employee Three Percent Con tribution Issu es Ms. Brauer began addressing each item outlined in her January 27 , 2012 memo . The first item is to determine the Board's choice on long-term disability (LTD) service credits . The Board discussed at length the details of the current benefit and the options to be considered because of the 2013 required employee contribution . The current Plan provides additional years of service credits for all years the Member receives benefits from the City's long-term disability plan. The City's LTD typically terminates at age 65 which coincides with the Plan's Normal Retirement Age. The NERP begins payment to the retired Member the first of the month following Normal Retirement Age. The benefit calculation is based on the Final Average Compensation during the Member's employment multiplied by one and one-half percent and then multiplied by the years of service credit. If the City's LTD terminates prior to Normal Retirement, the Service Credits stop accruing. The Board recognizes there is no way to insure the City can to collect the three percent contribution from a disabled Member because LTD benefits are paid by a vendor. The Board discussed three scenarios related to the Member on LTD accruing Service Credits: 1) Continue the benefit as currently accrued with the City bearing the cost of the disabled Member. 2) Providing a prorated Service Credit accrual during the LTD period. For example , rather than the 1.5% annual accrual the LTD Member would accrue one-half of the 1.5% since the Member is no longer paying the employee portion of the contribution. 3) As of the beginning of2013 when mandatory employee contributions are required , no additional benefit accrual as of the date of termination since no contributions can be collected. This will provide a retirement benefit for service during active employment only. The Board discussed the equity between NERP and other City retirement plans . The other City plans do not provide any additional accrual during the LTD period . Mr. Moore brought forth the thought that the Board had not been given direction to make changes to the benefits, but only to implement the employee contribution requirement. The Board continued discussion on the options including the possible costs to the Plan to provide the continued Service Credit accrual for LTD Members. The Board agreed to make no change to the LTD Service Credit accruals. MR . MOORE MOVED TO APPROVE TO CONTINUE TO ALLOW DISABLED MEMBERS TO ACCRUE ONE AND ONE-HALF PERCENT PER YEAR OF SERVICE CREDITS FOR DURING THE PERIOD OF TIME THE MEMBER RECEIVES BENEFITS FROM THE CITY'S LONG-TERM DISABILITY PROVIDER WITH NO CONTRIBUTION FROM THE MEMBER. MR. JORDAN SECONDED. Ayes: Gryglewicz, Hagan, Jordan , Moore, Patel, Woodward Nays: None Absent: Oxford The motion carried . Ms. Brauer reviewed the next item relating to continuing employee contribution for the Deferred Retirement Option Plan (DROP). NonEme rgency Emp lo yees Retirement Board Me etin g 3 of 4 The Board agreed to require DROP participants to make the three percent contribution on a pre-tax basis . The contributions will be made by all DROP participants , including employees that enter the DROP prior to 2013. The three percent contribution will be made to the Member's personal DROP account. Mr. Woodward and Mr . Moore both stated they needed to leave at 5:00 p.m. The Board agreed to continue discussion on the remaining issues at a special Board meeting to be held as soon as possible. Member Choice No items were discussed. The next regular Board meeting is scheduled for May 8, 2012 . The Board adjourned at 5:00 p.m . Non Emerge ncy Emplo yees Retir ement Bo ard Mee tin g 4 of 4 • • •