01-25-2016 - Special CITY OF EDGEWATER
GENERAL EMPLOYEES' PENSION BOARD
SPECIAL MEETING MINUTES
City Hall Council Chambers
Monday, January 25, 2016, at 11:OOAM
TRUSTEES PRESENT: Tyna Hilton
Brenda Dewees
John McKinney
Tim Sopko
Chris Mathewson
TRUSTEES ABSENT: None
OTHERS PRESENT: H. Lee Dehner, Christiansen & Dehner (via phone)
Ferrell Jenne, Foster& Foster
Doug Lozen, Foster & Foster (via phone)
Donna Looney, HR Director
Tracey Barlow, City Manager
Julie Christine, City of Edgewater
Donna Nichols, City of Edgewater
1. Call to Order Brenda Dewees called the meeting to order at 11:03AM.
2. Roll Call -As reflected above.
3. Public Comments— None.
4. New Business
a. Discussion of actuarial studies for Donna Nichols and Julie Christine.
i. The Board asked Doug Lozen to review the revised studies.
ii. Doug Lozen stated he revised the studies to show two scenarios.
1. Scenario (A) - Calculation of the City's funding obligation if each
Member entered the Plan with an entry date equal to the date of
hire. A rollover of the current Defined Contribution Account
Balances and contributions that would have been made to the
Defined Benefit Plan are included in this scenario.
2. Scenario (B) — Calculation of a Plan entry date resulting in little
to no change in the unfunded liability. This scenario also
includes a rollover of the Defined Contribution Account Balance
and contributions that would have been made to the Defined
Benefit Plan.
3. Doug commented if this goes forward and the City agrees to one
of the scenarios, not only would the defined contribution
balances need to be rolled over, but the member contributions
each member would have made during that time would need to
be deposited into the trust fund.
Note: Tracey Barlow left the meeting at 10:05am.
iii. Doug discussed Julie Christine's study with the board.
1. Scenario (A) — Doug stated this scenario goes back to the date
of hire (April 28, 1995), providing Ms. Christine with a Normal
Retirement Date of May 1, 2020. The change in normal cost
would be $12,080 per year, payable until Ms. Christine
terminates or retires. The annual increase in payment for the
UAAL would be $9,925 per year, payable as a level amount for
twenty years.
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2. Scenario (B) — Doug stated in order to keep the UAAL from
changing, Ms. Christine's entry date into the plan would be
October 1, 2000. The increase in the normal cost would be
$10,269 per year, payable until termination or retirement. There
would be a small increase in the annual payment for the UAAL of
$151 per year for twenty years. Doug commented this was as
close as they could come actuarially to the UAAL having little to
no impact.
iv. Doug discussed Donna Nichols' study with the board.
1. Scenario (A) — Doug stated this scenario goes back to the date
of hire (June 26, 1996), providing Ms. Nichols with a Normal
Retirement Date of March 1, 2017. The change in normal cost
would be $7,137 per year, payable until Ms. Nichols terminates
or retires. The annual increase in payment for the UAAL would
be $2,808 per year, payable as a level amount for twenty years.
2. Scenario (B) — Doug stated in order to keep the UAAL from
changing, Ms. Nichols entry date into the plan would be May 20,
1999. The increase in the normal cost would be $7,327 per year,
payable until termination or retirement. There would be a small
increase in the annual payment for the UAAL of$49 per year for
twenty years.
v. Tyna Hilton asked Lee Dehner if he consulted to any pension plans that
had made this option available to members retroactively. Lee described
equitable estoppel would be the basis for allowing the restatement and it
would be a case-by-case basis.
vi. John McKinney commented this would have a huge financial impact on
the City with an increase of approximately $15,000 for Julie Christine and
$5,000 for Donna Nichols if scenario (A) were allowed. Scenario (B)
wouldn't have as much of an impact, especially regarding the UAAL.
vii. Brenda DeWees asked for clarification on the cost of both studies. Doug
Lozen confirmed that the estimated annual increase in the City's
contribution to the Defined Benefit Plan would be $29,000 under
Scenario (A), and $13,800 under Scenario (B). These were the
combined costs for both Ms. Christine and Ms. Nichols.
viii. Tim Sopko asked Lee Dehner if the board was just an advisor in this
situation. Lee commented that an Ordinance amendment would need to
be done if reinstatement is allowed, which would have to go before City
Council for adoption.
ix. Tyna Hilton asked if the prior financial director had been contacted and
asked for his side of the story.
x. Chris Mathewson asked if the members had to sign documents when
they enrolled in the defined contribution plan. Neither member recalled
signing documents and Donna Looney stated she would check to see if
documents were executed.
Note: Tracey Barlow returned to the meeting at 11:30am.
xi. Brenda DeWees stated when the new defined contribution plan was
formed, there was a small timeframe that required members to make a
choice regarding enrollment in either the defined contribution plan or the
defined benefit plan.
xii. Tim Sopko asked if the board could be held responsible legally for
employees that had already left the City, and will these prior employees
have the option of coming back and saying they would have gone with
the old plan. Lee Dehner confirmed that prior employees would have the
opportunity to file an equitable estoppel. Lee stated each claim would
have to stand on its own. John McKinney stated this is why the board
carries fiduciary liability insurance.
xiii. John McKinney commented the board's only responsibility was to give a
recommendation to Council. Lee Dehner stated that no tax or financial
advice should be given to members from unqualified individuals.
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xiv. John McKinney stated he felt the board had been provided with enough
information to make an informed decision.
The board voted to select scenario (B) of the revised actuarial study, upon motion by John
McKinney and second by Tim Sopko, motion carried 3-2 with Tim Sopko, Brenda DeWees,
and John McKinney voting in favor; Chris Mathewson and Tyna Hilton voting against.
xv. Lee Dehner stated he would prepare a document reflecting the board's
decision and will present it to Council through Tracey Barlow.
xvi. John McKinney asked Ms. Christine and Ms. Nichols if they were able to
pay for prior contributions now owed. Donna Nichols stated she could not
pay today.
xvii. Tracy Barlow asked John McKinney if they could work together with the
actuary to determine when the study would expire.
The board voted to allow the actuary to work with the City regarding an expiration date for
the revised study, upon motion by Tim Sopko and second by Chris Mathewson, motion
carried 5-0.
xviii. Lee Dehner was in agreement with Tracey Barlow's suggestion and
would wait for the expiration date before preparing any documentation.
5. Adjournment The meeting adjourned at 11:53am.
6. Next Meeting March 14, 2016, at 11:00am.
ectfull subTitted by: Approved by:
la rrell Jenne Name: ecym�i fW
Title: Plan Administrator Title: 1�i1� �XG`WG
Date Approved By the Pension Board: il 'li..1 r
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