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Home My WebLink About2013-05-14 NEERB MINUTES( ' • • • NONEMERGENCY EM PLOY EES RET IREMENT BOARD MEET ING May 14 , 2013 Chairp erso n Ha ga n ca lled th e reg ul ar meeting of the Englewoo d NonEmergency Empl oyees Retirem ent Pl an Board to or der at 3:0 1 p.m. in th e Publi c Works Co nfer enc e Room of th e C ivic Ce nt er, 1000 Englewood Parkway, Eng lewoo d. Co lorado . Members Present: Membe rs Absent : Othe rs Present: A quorum was present. Approva l of Minutes Frank Gryglewicz, Director of Finance and Administrative Services Bradley Haga n, Chairperso n, Emplo yee Repre se ntative John Moore , Counci l Appointee Mahendra Patel, Sec retary, Empl oyee Repre sen tativ e Jim Woodward, Cou ncil Member James Jordon , Council Appointee (No Notice) Jerry Hu gg in s, Inn oves t Port fo li o Solutions Wendy Dominguez, lnnov est Portfoli o Solutions (left at 4:30) Diane Hunt, Ga bri el Roede r Smith an d Co mp any (GRS) Joe Herm , Gab ri el Roeder Smi th and Company (arrived at 3: I 0) * * * * * MR. PATEL MOVED TO AP PROV E THE MINUTES OF THE FEBRUARY 26 , 20 13 REGULAR MEET ING. MR. MOORE SECO OED. Ayes: Nays: Absent: The motion carried . Gryglewicz, Hagan, Moore , Patel, Woodward None Jord an Inn oves t Portfolio So lut ions . LLC Ms. Dominguez rev iewed th e Long -Term Out look for the Economy and Cap it a l Markets; she highlighted event s that impacted the markets and overa ll economic condition s. Ms. Dom in guez rev iewed th e Asse t All ocat ion Study. She reviewed the reaso nin g behind the need for the various funds. The study illu strates other asset mixes that might impro ve the return on the in ve stm en ts. The cu rr ent return is 6.49%. Thi s is less than the actuar ial ass umption of 7.5 %. The potential asset mi xes presented co uld potentially provide an improved return , but increa se the leve l of ri sk. The Board di sc ussed allocation options and determin ed that it would not be ap propri ate to base inve stm ent all oca ti on decisions solely on meeting th e ac tu arial rate of return ass umpti on. Discussion ens ued rega rdin g the ne ed to brin g the act uar ial ass umption more in-line wi th rea li stic projected return s. The Board ag reed to eva lu ate act uarial assumptions with review of the actuaria l report later in th e meeting. The Board determined not to change th e asse t allocat ion mi x beca use of th e potential of in creas in g th e risk leve l. Mr. Hu gg in s presented the first quarter port fo lio review and the anal ys is of eac h fund in th e Pl an. Th e lnnov es t report, page 16 has a new peer group for th e compari so n cons istin g of plans of le ss th an $I 00 million and less th an a 50% equity alloc at ion . The past reports used a peer group of less than $I 00 milli on but did not have the asset allocation of less than 50% equity. The pri or peer group for co mp ar iso n was not the bes t choice because the plan was compared aga in st hi gher ri sk and hi gher equity al locations. Mr. Huggins revi ewed th e Manager Report Card not in g th at lnnov est has concerns with th e Janu s Perkins Mid Cap Value Strategy in the areas of Style Co ns iste nc y, Asset Base , Performance and Overall categories. ine of th e top ten holdings are large cap stoc ks and are not performin g as a Mid Cap in ves tm ent. The JP Morga n 1-li ghbrid ge Dynamic Commod itie s Stra te gy has a signific an t underperformance which is a co nce rn . The Board agreed th at lnn oves t do a searc h and provide candidates at th e next meeting to consider as replacement for Janus Perkins Mid Cap Value Strategy an d the JP Morgan Highbridge Dynamic Com moditi es Strategy at th e nex t meet in g. Gabriel Roeder Smith and Co mp any - Janu ary I, 2013 Actuarial Report Ms. Hunt revi ewe d the draft of the Janu ary I , 2013 Actuarial Report. The stud y indicates a tot al required contribution of21.7% of pay beginnin g 2014. The employ ee 's portion is three percent and the City will contribute 18.7%. Ms. Hunt ex plained this is the las t year of the five year s moothing th at include s the capital lo sses from 2008. Thi s should ha ve a pos itive imp act on th e actuarial value s for the January 2014 report. She also commented that contributions have been le ss th an ex pected bec ause ofa large number of unexpected DROP and other retirements creating fewer active participants as well as lower sa lary increa ses and retiree s living lon ger. The amortization period has now been ra tch ete d down to ten years. She also commented that with members entering the DROP their po s ition s are not filled with new participant s until the DROP employee terminates employment. After the participant 's three year DROP , what typically occ ur s is po s ition s are rep lac ed wi th new emplo yees and contributions which will aid with funding as well as a lower sa lary for benefit acc ru al. Ms . Hunt explained the variance between actuarial and market values. The ac crued liabiliti es increased by more than ex pec ted becau se of the hi gher numb er of member s entering the DROP and retirin g. She sa id th at the percent of pay contribution requirement from 16.3 % to 21.7% may see m hi gher because there are fewer act ive particip ant s. The Ci ty req uired dollar contribution is fairly close to the C ity's prior year's requir ement. Ms. Hunt pre se nted the contribution projection study included with th e act uari a l report . Di sc uss ion ensued related to th e need to update the mortality tables , considering a low er the ass umed rate of return and adju stin g the inflation rate for sa lary increases. Ms. Hunt said that the plan is too small to use as a basis for determining an updated mortality table and a large r metropolitan population should be used . GRS prepares ac tu ar ial reports for th e Denve r metropolitan area and those report s will be completed within a month. These reports are a better basis for determinin g which yea r·s mortality table is a better fit for the Pl an. The Bo ard di sc usse d pas t efforts to improve the Plan 's fund ed position by shorten ing the amo rti za tion period . not takin g on too much risk , adju stin g infl ation factors to an ass umpti on closer to act ual and ye t is not increasing the funding level s to a impro ved po s ition. The Board agreed to have GRS perform studies of reducin g the inve stment return ass umption from 7 .5% to 7 perc ent , lowerin g the sa lary infl ation rate to 2.5% and updating the mortality table s. The Study will layer eac h ass umption re s pectively. MR. MOORE MOV ED TO APPROVE THE JA NUARY I, 2013 ACTUARIAL REP ORT WITH THE PROVISIO N THAT A SENS ITIVITY ANALYSIS B E CO MPLETED PRIOR TO THE NEXT VALUATION. MR. GRYGLEWICZ SECONDED. Ayes: ays: Absent: The motion carried. Gryglewicz, Hag an, Moor e, Patel, Woo dw ar d None Jordan Ms. Domingue z left at 4:30 p.m . Di sc uss ion Regarding Retiree Mortality Table Corrections Ms. Hunt explained the handout and the circumstances related to using an incorrect mortality tabl e for the benefit calculations prepared s ince Januaiy I, 2012. The Bo ard chan ged the Mortality Ta ble s from 1983 to 1994 . The Pl an 's le ga l counsel indicated th at the benefits be corrected by providing notice to th e effected particip ant s and adjusting one month 's benefit with future benefits being the correct amount. Discussion ensued relatin g to the various increase s or decre ases in benefit. Mr. Moore inquired , since adjustments are not sub stantial , per haps a correction could be made that do es not require recoupin g overpayments from the retiree s. The Board di sc usse d various adju st ment options th at may be considered to correct th ese ca lcul ati on. MR. MOORE MOVED TO APPROV E A CONDITIONAL MOTIO N WITH APPROVAL BY THE C ITY ATTORNEY ALLOWING FOR THE RET IR EES TO HAV E PAYMENTS C HANG ED TO THE CO RRE CT BENEFIT AND RET ROA CT IV E ADJUSTME TS TO THOS E WITH IN CREASES AND NO REDUCTION OF BENEFITS FOR THOSE WITH DECREASES , OR IF NOT APPROVED BY THE C ITY ATTORNEY, THE ADJUSTMENTS WILL BE AS OUTLINED ON THE HA N DO UT. MR . GRYGLEWICZ SECONDED. Ayes: Gryglewicz, Moore , Patel , Woodw ard No nEmerge ncy Emp loyee s Re tiremen t Board Meet in g 2 of 4 • • • • • • Nays: Ab sent : Abstention: The motion carr ied. one Jordan Hagan Review of Forms fo r Board Approva l a. Irrev ocable Elect ion to Transfer Out of and Waive Claim s Under the City of Englewood Non Emergency Emp loyees Retirement Plan b. Notification of Option to Tran sfer Out of the NonEmer gency Employees Retirement Plan Mr. Gr yglewic z noted the forms were approved by the Board 's pen sion attorney and are necessary for the Plan. The form s were di scu ss ed at a previou s meeting. MR. MOORE MOVED TO APPROVE THE BOTH FORMS . MR. GRYGLEWICZ SECONDED. Ayes: Nays: Ab sent: The motion carried. Gryglewicz, Hagan, Moore, Patel , Woodward None Jordan Retirement Approva ls and Not ific at ion s: a. Con sideration of Retirement Benefit for James Hall b. Con sideration of DROP Benefit for John Bock c. Con sideration of Retirement Benefit for Barry Jerome d. Con sideration of Retirement Benefit for Marie Dymek e. Notification of DROP Application from Randy Pierce f. Notification of the Death of Joseph Pershin , Retiree g. Notification of the Death of Mary Hitchcock, Retiree 's Beneficiary Ms. Wescoat noted there is one change to the spreadsheet. Mr. Stowe has not completed the paperwork, so hi s benefit will be approved at the next Board meeting after the paperwork is completed. MR . GRYGLEW ICZ MOVED TO APPROVE THE ITEMS LISTED ON THE BENEFIT APPROVALS AND NOT IFICATIONS WITH THE CORRECTION CHANGING MR. STOWE 'S IT EM TO A BENEFIT OT IFICAT ION. MR. PATEL SECONDED . Ayes: Nays: Ab sent: Abstention: The motion carried . Gryglewicz, Moore , Patel , Woodward one Jordan Hagan Colorado Public Plan Coalition Annual Conference August 2 I-2 3, 2013 The Co lorado Public Plan Coal ition Annual Conference will be in Co lorad o Springs. Ms. Wescoat need s notification not later than July 15 , 20 13 , for anyone wishing to attend. MR. GRYGLEW ICZ MOVED TO APPROVE THE EXPENSES OF ANY BOARD MEMBER ATTEND ! G THE COLORADO PUBLIC PLAN COALITION ANNUAL CONFERENCE IF NOTIFICATION JS PROVIDED TO MS. WESCO AT PRIOR TO JULY I 5, 20 I 3. MR. MOORE SECONDED . Aye s: Nays: Absent: Gryglewicz, Hagan , Moore, Patel , Woodward None Jordan 3 of 4 No nEmerge nc y Emplo yees Retirement Boa rd Meetin g The motion carried. Boards and Commissions Appreciation June 24. 20 I 3 at 6:30 p.m . The Board s and Commissions Appreciation night has changed venues. The appreciation night will be at Civic Center. The Board members should notify either Ms . Wescoat or Sue Carlton-Smith in the City Manager's office if they plan to attend. Member Choice No items were discussed. The Board adjourned at 4:50 p.m. Carol Wescoat Recording Secretary NonEmergency Employees Retirement Board Meeting 4 of 4 • • •