09-03-1991 '►
GENERAL EMPLOYEES PENSION BOARD
REGULAR MEETING
Community Center
Tuesday, September 3, 1991
3:00 P.M.
CALL TO ORDER:
Mayor Wessler called the General Employees Pension Board meeting
to order at 3:10 P.M., Tuesday, September 3, 1991 in the
Edgewater Community Center.
ROLL CALL:
Mayor Tanya Wessler Present
City Clerk Susan Wadsworth Present
Mrs. Mary Lou McDonald Present
Mr. Robert DeLoach Present
Mr. Charles Chamberlin Absent
Rev. Harvey Hardin Present
Also present were: Mr. Jack Ascherl, Consulting Agent of Record
Mrs. Debbie Sigler, Recording Secretary
Mr. Ascherl reviewed the revised report. He explained that the
City has 50/50 U.S.Stock/ Stock Index and that the City made
additional $101,930.50 contribution into each of these accounts
in June 1991. The investments matured and were re- invested.
Mr. Ascherl went over the Actuarial Review of Proposed Pension
Plan Changes:
Proposal 1: Add a 2% annual cost of living increase for future
retirees. This increase would be completely funded by the City.
Proposal 2: Add a 2/. annual cost of living increase for future
retirees. Employees to contribute 1% of compensation. Employee
contributions would receive no interest.
Proposal 3: Add 2% annual cost of living increase for future
retirees. Employees to contribute 1% of compensation. Employee
contributions would receive 7'/. interest.
Mr. Ascherl went over the cost of each of these proposals. It
was agreed by the board members that these ideas should be
discussed among the employees before any decision is made by the
board.
*
Mr. Ascherl asked for confirmation regarding the investment part
of the plan. He went over the Bond and Mortgage section of the
Briefly.
There was discussion about the City making the lump sum
contribution when it has been the practice of making quarterly
contributions. It was agreed that quarterly contributions should
be made in the future.
Mr. Ascherl assured the hoard the investments look good and there
is minimum risk involved, however the board may want to earmark
any roll over monies to the General Account.
Mr. DeLoach moved to have any roll over monies go in the General
Account. Mrs. McDonald seconded the motion. Motion CARRIED 5 -0.
There being no further business, Mrs. Wadsworth moved to adjourn.
Mrs. McDonald seconded the motion. Motion CARRIED. Meeting
adjourned 3:40 P.M.
Minutes submitted by:
Debbie Sigler
2
General Employees Pension
Board Regular Meeting
September 3, 1991
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PRIN FIN GP- PENSION TEL No.1- 515 -248 -3194 May 13,91 8 :44 No.003 P.02
loI✓ w
Actuarial Review
of Proposed
Pension Plan
Changes
PREPARED FOR:
City of Edgewater General Employees'
Retirement Plan
GA 59450
PREPARED:
May 10, 1991
•
Prancipal Mutual
the' rincipa Life Insurance Company
Dee Moines. Iowa 50392
Financial
Group
FIRM FIN GP- PENSION TEL No.1 -515- 248 -3194 May 13,91 8 :44 No.003 P.03
*qme Noe
INTRODUCTION •
This report has been prepared in response to your request for cost information
on the follow:
2X Cost of Living for Future Retirees
CURRENT DATA AND ASSUMPTIONS
Data Date:
October 1, 1990.
Interest: 8.0% per annum, compounded annually.
Salary Scale: 7.5% increases each year to retirement.
Turnover: Based on Table 11 of the (Actuary's Pension Handbook.
Assets: The value of assets as of October 1, 1990, is
$956,712.52.
Retirement Age: Attained age 60 with five years of service or attained
30 years of service.
Vesting Percentage: 100% subsequent to five years of plan participation.
Benefit Formula: 2X of Average Compensation multiplied by years of
service.
The estimates in this report are based upon the above Actuarial Assumptions.
If, between now and the next valuation date, these assumptions are not
realized, costs may vary from these estimates.
The above information was prepared in the home office by your valuation
analyst. If you have questions concerning the review, please feel free to use
the home office toll free number (1- 800 -543 -4015) and ask for Gayle Huck, ext.
4648. You may call Gayle directly au (515) 248 -4648.
1
Principal Mutual
the • rincipa ult :uranpp can,
Dtc Mums:;, Inwa 50:M.0010
Financial
PRIN FIN GP- PENSION TEL No.1- 515 -248 -3194 May 13.91 8:44 No.003 P.04
*toe Nwe
PROPOSED CHANCES
1. Add a 2% Annual Cost of Living increase (no maximum) for future retirees.
This increase would be completely funded by the employer.
2. Same Cost of Living increase as Proposed Change 1, except employees would
contribute 1% of compensation. Employee contributions would receive OX
interest.
3. Same provisions as Proposed Change 2, except employee contributions would
receive 7% interest.
•
COMMENTS
The following display illustrates costs for the October 1, 1990 Actuarial
Valuation and estimated costs for the three Proposed Changes.
2
Vrinuittel Mutunl
the • rincipa Insurance Company
Ns Wins, Iuwa 50397 tt
financial
PIN FIN GP- PENSION TEL No.1- 515 - 248 -3194 May 13,91 8 :44 No.003 P.05
DISPLAY OF ESTIMATED COSTS FOR
City of Edgewater General Employees'
Retirement. Plan
GA 59450
10 -01 -90
Actuarial Proposed Proposed Proposed
Valuation Change 1 Change 2 Change 3
Total Normal
Cost $ 155,388
$ 173,800 $ 172,800 $ 173,400
Employer Normal
Cost 155,388 173,800 153,700
154,300
Employee Normal
Cost N/A N/A 19,100
19,100
Total Normal
Cost as a
Percentage of
Compensation 8.1X 9.1% 9,0%
9.1%
Annual
Compensation 1,910,062 1,910,062 1,910,062 1,910,062
Minimum Deposit
(Reflects
Credit Balance
of $2,709) 203,807 246,500 230,400 231,200
20 Year Funding 196,867 258,600 243,400 244,200
Unfunded Frozen
Initial
Liability 427,696 684,500 748,200 749,200
Frozen Initial
Liability 440,859 697,700 761,400 762,400
b t.7
■
.3/
4
SAY
3
Piincios' Mutual
the ' rincipa Lite Insurance Company
Den Moines. lows 50391 -UblU
financial