Loading...
HomeMy WebLinkAbout2004-03-31 NEERB MINUTESI , .. NONEMERGENCY RETIREMENT SPECIAL BOARD MEETING March 31, 2004 Chairperson Brandon Williams called the special meeting of the Englewood NonEmergency Retirement Board to order at 4:05 p.m . in the Public Works Conference Room of the Civic Center, 1000 Englewood Parkway, Englewood, Colorado . Members Present: Members Absent: Others Present: A quorum was present. Brandon Williams, Chairperson Gary Bowman , Council Appointee LeRoy Davault, Council Appointee Frank Gryglewicz, Director of Finance and Administrative Services Bradley Hagan, Employee Representative John Moore, Council Member (by phone) Mahendra Patel, Employee Representative None Dan Brotzman, City Attorney Frank Dobbins * * * * * Frank Dobbins request to discuss retirement benefits Frank Dobbins explained his employment history with the City of Englewood and the terms of his departure from the City. He stated he was provided a verbal agreement which extended his employment by the period of annual leave that he received as a lump sum payment on his final paycheck. Mr. Dobbins presented the Board with a copy of his 2001 conversion option letter indicating the estimated benefit amount as $351.00. Mr. Gryglewicz explained the Board's fiduciary responsibility to protect the Plan assets. He outlined the limitation of the Plan and the definition of "compensation." He referred to copies of the Plan document (1984) that define Compensation. He stated that Ms. Freeman appears to have misinterpreted her duties or the Plan document. He agreed that Mr. Dobbins may have had the agreement, but felt the issue is, if the Board can grant him a benefit when the Plan document specifically excluded a portion of the compensation used for the calculation. The Board discussed the break-down of the benefit calculation and the possibility that the calculation Ms. Freeman prepared permits modifying the disbursement to comply with the agreement. Mr. Brotzman stated that Mr. Dobbins' agreement does not modify the Board's duties. He said, assuming Ms. Freeman miscalculated the numbers, there are two parts to the action, one being does the agreement modify the Board's duties ... and the answer he said is , no. He said the Board determines the numbers based upon what the Plan states. Mr. Patel said that the Plan rules were set previously and if someone makes a mistake in calculating, the rules should not be changed at that point. Mr. Brotzman continued that it appears that Ms . Freeman was looking at a different set of numbers. She may have taken in to account the bonus, and that is what the Board needs to look at, should the bonus be taken into account when establishing what the retirement is based upon. The agreement itself does not matter, but the Board needs to determine what is the right calculation to be made. Mr. Brotzman's understandin g is that the only difference between the numbers is the bonus. Mr. Dobbins stated there is a disagreement in the numbers from 1984 between $7,215 .89 and the $8,000 number. Mr. Brotzman said that the Board needs to determine which are the correct numbers. Mr. Bowman asked if there was information on the calculation prepared by Ms . Freeman. Mr. Gryglewicz said the information was in the packet. He said that she included annual leave payout paid to Mr. Dobbins when he left that raised his 36 month average compensation. Mr. Dobbins said that there was a verbal agreement between Rich Lorig, Gary Higbee, and himself when he terminated that his vacation pay would not go against him. He said that he would extend his time with the City, instead of quitting on April 15 , he would quit on July 15 to utilize his vacation in his wages. Mr. Gryglewicz said that we would like to get back to the facts as known, the duties of the Board and what was deemed compensation in the Plan document at time and if any of the mentioned people could alter the Plan to include the vacation monies to increase the benefit. Mr. Gryglewicz asked Mr. Brotzman if anyone could alter the Plan. Mr. Brotzman said they could not alter the Plan, but the discussion is what was Mr. Dobbins compensation for those years. Mr. Dobbins said it was Ms. Freeman's calculation. He said that the City's calculation is incorrect because the numbers indicate it is $8,332 and the calculation is based on $7,215 . Mr. Gryglewicz said that possibly is an issue, but the other issue is that there is a copy of the pay sheet listing longevity (that is not in question, that is included) and what is in question in the payout of the annual leave being included. He referred back to the Plan document at the time of termination specifically excludes that. He further explain ed the real conflict is the 1989 calculation and Mr. Dobbins reliance on that letter and the Board's duties to protect the assets of the Plan. Mr. Dobbins said the he thinks it is an honesty and integrity issue too . Mr. Moore stated that the Board is bound by the terms of Plan . He said that the terms of the Plan do not pennit the Board to support Ms. Freeman's calculation directly. It seems that factually the bonus should not have been included in the calculation . He proposed two items for consideration , one, this is a small issue and Mr. Dobbins has relied on the prior calculation and as a Board member, would like to honor the calculation. He asked if the Board can do a one time amendment to the Plan specifically addressing this situation. Mr. Brotzman clarified that was not possible because of th e impact of all other employees that may have received a similar bonus . Mr. Moore said that it is possible to do amendments by name, a one-time amendment specifically adjusting his benefit stating that the Board is relying on a calculation previously provided. Mr. Brotzman understood Mr. Moore's position, but commented that in fairness to the other employees he would not recommend that as a solution. Mr. Moore stated that the issue for him was that there has been a definitive benefit provided to Mr. Dobbins that he has relied upon. Discussion ensued relating to the frequency of similar situations . Mr. Moore commented that a cleaner method would be by Plan amendment to handle this one-off situation that would not be discriminatory, costly and allow the Board to process this fairly . A possibility wou ld be to settle this outside the Plan and provide a fair acknowledgement of what was provided to Mr. Dobbins with Council's approval as another option. Mr. Gryglewicz stated that it would seem cleaner to provide a settlement outside of the Plan rather than doing a Plan amendment with an approval of the process from Mr. Dobbins. Mr. Dobbins commented that he would like to see this resolved without the Board changing the Plan. Ms. Wescoat explained the circumstances that led to the discovery of the incorrect information. When the information was sent to the actuaries for final calculation, the actuaries questioned the three-and-a-half months earnings that were equal to one- half of the prior year's earnings. Ms. Wescoat researched the data and found that Ms. Freeman had included the lump-sum annual leave as pensionable earnings. She stated that if the Mr . Dobbins' agreement was that his employment was to be extended for the period of time of the annual leave, the personnel records did not reflect the additional service. Mr . Dobbins ' date of termination was April 15 , 1984. Mr. Dobbins stated that was his verbal agreement and that was why he requested Ms. Freeman provide the documentation. Ms. Wescoat further explained the method used by the actuaries to determine the different amount for 1984 used in their calculation. The actuaries use a formula for determining the full months of service since the Plan provides for calendar months . Mr. Hagan clarified that the difference in payment is a result of the annual leave payout and his understanding is that annual le ave is regular salary. Mr. Gryglewicz explained that annual leave is regular salary when taken in the normal course of employment and when taken as a lump sum cash-out at termination , it is considered in the calculation for an employee 's final compensation. Mr. Gryglewicz suggested an agreement to provide Mr. Dobbins a lump-sum for the difference of the payments calculated over his lifetime expectancy. This would be paid outside the Plan. Mr. Dobbins said he does not want a lump sum because he has planned on specific payment at retirement. Mr. Gryglewicz referred to the prior discussion of one issue being outside the Plan and that would be to pay the settlement from General Fund dollars and the other would require an amendment to the Plan. Mr. Hagan said he believes the mistake was made outs ide the Plan and that is where the settlement should come from and that Plan sho uld stay intact. Mr. Patel agreed with the suggestion. Mr. Moore's reasoning for providing the payment from the Plan is that one, the City will not provide a $14 per month payment to an individual outside the Plan for the City to administer Non-Emerg e nc y Pens ion Board Meeting 2 of 3 .. . ' I ," • because it would be cost prohibitive . He maintains that the 1989 calc ulati on was presented on behalf of the Plan and feels the obligation is within the Plan. Chairperson Williams questioned any flexibility within the Plan to make the payment. Mr. Gryglewicz said there is no flexibility. The Board either denies the request because of the Plan rules at the time or the Board proceeds with the Plan amendment. Mr. Brotzman clarified that the options are Plan amendment or grant the calc ulati on under the Plan and recommend to Council a lump-sum settlement outside the Plan. Mr. Moore clarified Mr. Brotzman 's resistance to the one-off amendment, and inquired if he were more comfortable after further discussion. Mr . Brotzman said it is possible ; however, his recommendation would be the other alternative of granting the calculated benefit and recommending Council approve a settlement from the General Fund. "MR. MOORE MOVED TO RECOMMEND TO CITY COUNCIL A PLAN AMENDMENT TO HONOR TIIE 1989 CALCULATION AT ITS STATED AMOUNT ($245.36) IS LIMITED TO THIS CASE FOR FRANK DOBBINS AND TO PAY ACCORDINGLY AND DOES NOT SET A PRECEDENT WITH RESPECT TO FUTURE BENEFITS. MR . GRYGLEWICZSECONDED. Ayes: Nays: Absent: The motion carried. Williams , Bowman, DaVault, Gryglewicz, Patel , Moore Hagan None Mr. Dobbins left at 4:35 p.m . MEMBER CHOICE Consideration of Lump Sum Distribution for Beneficiary of Eleanor Zimmerman. Eleanor Zimmerman died prior to retirement during December 1999. Her husband , Larry Zimmerman began receiving benefits January 2000 . Mr. Zimmerman passed away March 19, 2004. He had received 50 monthly payments of the 120 month certain. "MR. GRYGLEWICZ MOVED TO PROVIDE A LUMP SUM PAYMENT OF $54,045 .98 TO THE ESTA TE OF LARRY ZIMMERMAN ON APRIL 30, 2004 . MR. DAVAULT SECONDED. Ayes: Nays: Absent: The motion carried . Williams, Bowman, Davault, Gryglewicz, Hagan, Patel, Moo re None None Chairperson Williams adjourned th e meeting at 4:40 p.m. Carol Wescoat Recording Secretary 3 of 3 Non-Emergency Pension Board Meeting NONEMERGENCY EMPLOYEES RETIREMENT BOARD MEETING May 11, 2004 Chairperson Brandon Williams called the regular meeting of the Englewood NonEmergency Employees Retirement Board to order at 4:00 p.m. in the Public Works Conference Room of the Civic Center, 1000 Englewood Parkway, Englewood, Colorado. Members Present: Members Absent: Others Present: A quorum was present. Approval of Minutes Brandon Williams, Chairperson Gary Bowman, Council Appointee LeRoy DaVault, Council Appointee Bradley Hagan, Employee Representative John Moore, Council Member Mahendra Patel, Employee Representative (arrived at 4 :05 p.m.) Frank Gryglewicz, Director of Finance and Administrative Services (notice) Dale Connors, Watershed Investment Consultants Diane Hunt, Mellon Consultants * * * * * MR. MOORE MOVED TO APPROVE TIIE MINUTES OF THE FEBRUARY 10, 2004 REGULAR MEETING AND TIIE MARCH 31, 2004 SPECIAL MEETING. MR. HAGAN SECONDED. Ayes: Nays: Absent: The motion carried. OLD BUSINESS Williams, Bowman , DaVault, Hagan, Moore, None Gryglewicz, Patel Discussion of Frank Dobbins Ms. Wescoat explained that Mr. Dobbins indicated after the March 31, 2004 meeting that he had misunderstood the lump sum settlement offer. He had understood the offer to be the entire monthly benefit amount and not only for the $14 difference. City Council proposed offering a lump sum settlement to Mr. Dobbins which he accepted and payment was made from City's funds. MR. MOORE MOVED TO APPROVE THE MONTHLY BENEFIT OF $231.08 PAY ABLE FOR HIS LIFETIME AND TEN YEARS CERTAIN FOR FRANK DOBBINS AS OF MARCH 1, 2004. MR. BOWMAN SECONDED. Ayes: Nays: Absent: The motion carried . Williams , Bowman , DaVault, Hagan, Moore, None Gryglewicz, Patel Mr. Patel arrived at 4 :05 p.m . NEW BUSINESS Watershed Investment Consultants Mr. Connors reviewed the fund performance reports for the first quarter of 2004. Mr. Connors presented the Asset Allocation Discussion. He presented a proposal to include a form of real estate investment to potentially provide increased earnings to possibly meet the 7 \/2 % annual earnings used as the actuarial assumption. He will bring additional information on possible funds to the next Board meeting. Mr. Connors presented a letter to the Board requesting approval of a fee increase. The Board will discuss this item later during the meeting. Mellon Consultants January 2004 Actuarial Report. Ms. Hunt presented a summary of the 2004 actuarial valuation results. The report indicated that the 2005 contributions will be 8.4 % of salaries. Ms. Hunt presented the five year forecast of funding requirements . The forecast indicated improvement from the prior year's study because of increased earnings. The Board discussed various factors impacting funding requirements. Mr. Connors left at 5:00 p .m. Mr. Moore asked Ms. Hunt if she was comfortable leaving the earning assumption at 7 Y2 %. Ms. Hunt referred to Average Annual Rates of Return page of the report which indicates a Cumulative Market Value return of 7 .6%. She said that the 7 \/2 % assumption was not out of line. Mr. Moore inquired about other plans assumptions . Ms . Wescoat said that the Fire and Police Pension Association uses an 8% assumption for their actuarial reports. Notification of John "Red" Hudson's Death The Board was notified that John "Red" Hudson died on February 2 , 2004. Mr. Hudson retired in January 2004, electing a benefit payable for his lifetime only . No further benefits are due . Notification of Paul H. Partridge's Death The Board was notified that Paul H. Partridge died on January 14, 2004. Mr. Partridge retired in 1985, electing a benefit payable for his lifetime and ten years certain. No further benefits are due . Ms . Hunt left at 5:05 p.m. MEMBER CHOICE The Board discussed the fee increase request from Watershed Investment Consultants (Watershed.) The Board agreed to offer Watershed a partial increase to $31,000 on June 30, 2004 and $35,000 on June 30, 2005 with only the consumer price index adjustment thereafter. The Board further agreed that it will schedule a formal request for proposals to coincide with the renewal of the Watershed agreement. Non-Emergen cy Pens ion Board Meeting 2 of 3 Chairperson Williams expressed concerns with proposed real estate investments. Further discussion clarified that Watershed will only be discussing potential investments, not presentations by fund managers at the next meeting. The Board 's next the meeting will be on Tuesday, August 10 , 2004 at 4:00 p.m. Chairperson Williams adjourned the meeting at 5:30 p.m. Carol Wescoat Recording Secretary 3 of 3 Non-Emergency Pen sion Board Meetin g