07-21-2006 - Special Nov
GENERAL EMPLOYEES PENSION BOARD
SPECIAL MEETING
July 21, 2006
City Hall Conference Room
Minutes
CALL TO ORDER:
The General Employees Pension Board meeting was called to order by Harriet Rhodes at
11:00 a.m. in the City Hall Conference Room.
ROLL CALL:
Members present were Councilwoman; Harriet Rhodes, Brenda Johnson, Christi Moeller,
Tyna Hilton, and Rob DeLoach . Robert Polizzi was absent. Also present were Jon
Williams; Interim City Manager, Deborah Sigler; Personnel Director, Donna Looney;
Personnel Benefits Administrator, Joe Bogdahn Mike Welker and Dave West of Bogdahn
Consulting, Councilwoman Rogers, Joel Addington; Observer, Jack Corder, Jack
DeRosier and Kathy Miller; Recording Secretary.
APPROVAL OF MINUTES: Minutes from April 12, 2006
Christi Moeller made a motion to accept the minutes from the April 12, 2006 Special
Meeting and seconded by Brenda Johnson. Motion Carried 6 -0.
NEW BUSINESS: Report by Bogdahn Consultants
Harriet Rhodes turned the meeting over to Joe Bogdahn, David West and Mike Welker.
Mr. Bogdahn distributed performance evaluation handbooks to the Board members and
reviewed the investment performance over the past five years, comparing the investment
performance with other pier groups — we are in the top 3r .
Mr. Bogdahn's first recommendation was to un- bundled the program. He said there is
some tweaking that needs to be done in the investment program, but he didn't see
anything that was necessarily broken. We need to set the investment piece aside and
assume that we're going to retain The Principal for the investment side. It is imperative
that the Board un- bundled the administrative function. Mr. Bogdahn said he thinks that
Foster & Foster did a good job of explaining that, based on your plan document, cost to
the plan should be somewhere between 4 and 10 %. Mr. Bogdahn said it really comes
into how you formulate that funding method.
Mr. Bogdahn said that The Principal is the investment only vehicle and the board needs
to separate out the administration. To get that done the Board needs to hire an actuary to
actually do an evaluation. If the Board moves fairly quickly on engaging someone they
could have the budget number for next year before October 1 Principal would be the
investment administrator only and Foster and Foster would be the actuary — using the
projection method to determine contributions to fund the plan.
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Mr. Williams requested Mr. Bogdahn describe the difference in being able to have the
budget number, October 1 as opposed to what the methodologies that Principal uses now
and the challenges that Bogdahn has encountered in dealing with Principal in the
projections for budget year.
Mr. Bogdahn explained that the actuary is trying to make sure how much money we
need today so that we would have enough money tomorrow to pay the benefits. Mr.
Bogdahn said he is not an actuary so he doesn't understand how their calculators work.
Mr. Bogdahn indicated that we are going to have about the same money at the end, but
we pay it all up front, and that if anybody did the analysis they're going to determine that
the defined benefit plan is going to benefit the long term employees of the City much
better than the defined contribution plan could.
Mr. Williams told the Board that Mike, Joe, David and himself met prior to this meeting
to discuss some of the approaches and which is the best approach to take. He recognized
sensitivity of the issue as it relates to everybody's personal retirement. He explained that
from the City's prospective we want to achieve the savings that we believe we can
achieve out of this, and keep the Plan intact as it is. He recommended the Board
authorize Bogdahn to issue RFQ's for an attorney and an actuary and get that evaluation
done and then the Board can act on the motion that was taken during the April 12
meeting. Hopefully we can have information back to council prior to the adoption of the
budget. Just to put anybody's fears to rest, the intention here is to keep the Plan intact
and providing the benefits that are being provided today but lower the cost to the City.
MOTION: Christi Moeller made a motion to have Bogdahn Consulting ask for
some RFQ's from attorney's and actuary's concerning our plan, unbundlin
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seconded the motion. Motion Carried 6 -0.
A meeting was also requested to be scheduled for August 2, 2006 @ 10:30 a.m. Jon
Williams said they would be looking for the Board to make a recommendation of the
RFQ to the Council. This will be placed on the City Council's agenda for August 7,
2006.
Ms. Johnson requested that if there is any detailed information the Board needs to review
in order to make a motion, that the Board receives it ahead of time. Mr. Bogdahn advised
they would receive it next week, a week prior to the meeting.
ADJOURNMENT:
With no further business to discuss Brenda Johnson made a motion to adjourn the
meeting and it was seconded by Tyna Hilton. The meeting was adjourned at 11:50
a.m.
Minutes submitted by: Personnel Department
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