09-20-2006 - Special GENERAL EMPLOYEES PENSION BOARD
SPECIAL MEETING
SEPTEMBER 20, 2006
10:30 A.M.
CITY HALL CONFERENCE ROOM
MINUTES
CALL TO ORDER:
Chairwoman Rhodes called the Special Meeting to order at 10:30 a.m. in the City Hall
Conference Room.
ROLL CALL:
Members present were Harriet Rhodes, Brenda Johnson, Robert Polizzi, Christi Moeller,
Tyna Hilton, Rob DeLoach, and Brett Tanner. Also present were Jon Williams, Interim
City Manager; Deborah Sigler, Personnel Director; Donna Looney, Personnel Benefits
Administrator; Jack Ascherl, Agent of Record.
APPROVAL OF MINUTES:
None
NEW BUSINESS:
None
OLD BUSINESS:
Mr. Ascherl gave a detailed overview of the plan's history and activity for the history of
the plan including the past four years to current (see attached document). He reviewed
the Actuarial Assumptions and Methods used for this plan also (see attached.)
Chairwoman Rhodes questioned whether the inflated salaries due to the hurricanes
should not have been sent to Principal, since they used those figures for future
calculations. She suggested if something like this occurs in the future, we should try to
prevent this from happening again. Mr. Ascherl explained that once the City called this
to the attention of the actuary, she did change the assumptions and as a result the costs
have come back down.
The Board members and Interim City Manager Williams went over the calculations on
Mr. Ascherl's paperwork.
The actuarial process was discussed and Interim City Manager Williams explained the
previous years annual required contribution is used to prepare the budget each year.
Something needs to be worked out with Principal concerning when the salaries can be
sent to them so they can get the required contribution amount back to the City for budget
preparation.
Chairwoman Rhodes asked Mr. Ascherl for direction and guidance. She questioned
whether the employees who have retired and continue to work should be moved to the
Defined Contribution Plan. Mr. Ascherl explained the process that took place when the
City closed this plan and opened the Defined Contribution Plan. He reviewed pages from
the plan describing the option allowing employees to collect their accrued benefit upon
eligibility and continuing to work. He explained that new hires or anyone rehired with
the City would now go into the Defined Contribution Plan, but since there is no age
requirement as to when someone must retire, there is no time limitation on drawing
benefits.
Mrs. Moeller asked about the 2% that is being added to those benefits each year, referring
to the chart in the handout. Mr. Ascherl explained the chart shows the estimated
increased benefit for each year an employee works past their normal retirement date.
Chairwoman Rhodes restated that the board is looking to Mr. Ascherl for some direction
as to how the cost of funding this plan can be decreased. Should this plan be opened
back up, should those people drawing their benefits be moved over into the Defined
Contribution Plan? Mr. Ascherl answered that opening the plan back up would be giving
all the employees a guaranteed pension benefit but would not necessary save money for
the City. There are other factors as to whether the City would want to move all those in
the Defined Contribution Plan over into the Defined Benefit Plan. He stated that moving
those employees who are working and drawing their benefit would not save the City
money, because the cost for those employees drawing their benefits is very insignificant.
Moving them into the Defined Contribution Plan would accomplish an exact percentage
of salary that the City would be able to budget rather than them continuing to accrue in
the Defined Benefit Plan. Mr. Ascherl said he would get Principal to give the Board
calculations so they can actually see the difference. He said he would request any
information the Board wants.
Interim City Manager Williams spoke to the Board explaining that Principal has been
requested to prepare scenarios and options for the City to choose from. Foster & Foster
is also preparing the same scenarios for the Board. He expressed his concern for the
moral of the employees and stressed that it is not the intent to take any benefits away
from employees, but the feasibility of continuing to fund this plan has to be taken into
consideration and a solution found.
Chairwoman Rhodes also stated that she does not want to see anything taken away from
the employees. She is concerned about the costs for the taxpayers and wants a solution
that will be best for all.
2
\rrr vat/
NEW BUSINESS
Chairwoman Rhodes requested a motion be made to name a Vice Chairman to take care
of the meetings in her absence.
Ms. Hilton made a motion to make Brenda Johnson Vice Chairwoman, second by
Mr. DeLoach.
MOTION CARRIED 6 -0
Interim City Manager Williams advised he wanted the Board to see the legal services
signed agreement. Ms. Johnson confirmed that the services are on as needed basis.
City Manager Williams informed the Board that his contract as City Manager is going to
the City Council and before that happens, he wants it understood that he is separating
from the defined benefit plan in order to avoid any conflict of interest perceptions. He
does not want it misinterpreted that he will not continue to have an interest in this.
ADJOURNMENT:
With no further business to discuss the meeting was adjourned at 12:55 p.m.
Minutes submitted by: Personnel Department
3