12/02/1996
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PENSION
(TRUSTEES) ..
Board of Trustees of the Employees'
Pension Fund
Minutes
Date
09./
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~ ACTION AGENDA
Board of Trustees of the Employees I Pension Fund
December 2, 1996
1. Call to order 1. 1 :10 p.m.
2. Approval of Minutes - 11/4/96 2. Approved as submitted.
3. Request for acceptance 3. Approved.
into membership:
a) John Schodtler
b) Yvonne Reyniers
c) James E. McBride
d) Dave Shenk
e) Michael Duff
f) Larry K. Jacoby
g) Rodger Gaston
h) Dan Dede
i) Mark Murray
j) Claudette Pascoe
k) Jack DeShazo
I) Deborah Jensen
m) Patrick Davis
n) Rory A. Brodil
0 0) Rose Castilla
p) Travis Booker
q) Cameron Hill
. r) Jeanette Terry
s) Mahshid Arasteh
t) David Dalton
u) Lynette Counts
4. Ratify $6,040 expenditure paid 4. Ratified & Approved.
from 8/95 through present and
approve additional $3,900 for
Coopers & Lybrand to assist City
with administration of Employees'
Pension Plan until effective date of
an Administration Services
contract
5. Approve hiring Coopers & Lybrand 5. Approved.
to act as City's Third Party
. Administrator for Pension Services
at an est. $29,000; approve est. .
$1,000 for related internal printing
costs
6. Other Business: 6. None.
7. Adjournment: 7. 1 :23 p.m.
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Elizabeth M. Deptula
Pamela K. Akin
Cynthia E. Goudeau
City Manager
City Attorney
City Clerk
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TRUSTEES OF THE EMPLOYEES' PENSION FUND MEETING
December 2, 1996
The City Commission, meeting as the Board of Trustees of the Employees' Pension
Fund, met in regular session at City Hall, Monday, December 2, 1996 at 1 :10 P.M., with
the following members present:
Rita Garvey
J. B. Johnson
Robert Clark
Ed Hooper
Karen Seel
Chairperson
Trustee
Trustee
Trustee
Trustee
Also Present were:
ITEM #2 - Minutes:
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Trustee Hooper moved to approve the minutes of the November 4, 1996, meeting.
The motion was duly seconded and carried unanimously.
'ITEM #3 ~ Request for Acceptance into Membership:
The City Manager presented the recommendation of the Pension Advisory
Committee to approve membership for the employee Is) listed below:
a) John Schodtler
b) Yvonne Reyniers
c) James E. McBride
d) Dave Shenk
e) Michael Duff
f) Larry K. Jacoby
g} Rodger Gaston
h} Dan Deide
j) Mark Murray
j) Claudette Pascoe
k) Jack DeShazo
I) Deborah Jensen
m) Patrick Davis
n) Rory A. Brodil
0) Rose Castilla
p) Travis Booker
q} Cameron Hill
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mPF12.96
1
12/02/96
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r} Jeanette Terry
s} Mahshid Arasteh
t) David Dalton
u) Lynette Counts
Trustee Johnson moved to accept the recommendation of the Pension Advisory
Committee. The motion was duly seconded and carried unanimously.
ITEM #4 - Ratify $6.040 expenditure paid from 8/95 through present and approve
additional $3.900 for Coopers & Lybrand to assist City with administration of Employees'
Pension Plan until effective date of an Administration Services contract
The changes to the Employees' Pension Plan that went into effect January 1, 1 996
changed the plan to an IRS qualified plan which can be quite complicated to administer.
Staff determined the service of a Third Party Administrator was required.
An RFP was issued to bring an administrator on board by January 1, 1996,
however, the bids received were not determined to be adequate and staff decided to
administer the plan until a new RFP could be issued and an administrator hired.
Coopers and Lybrand is the actuary for the Plan and has been providing additional
consultant work related to the negotiations and implementation of pension plan changes.
The fees for this work were approved by the Trustees.
(~, Unfortunately, the administration of the plan required expertise from a consultant
and Coopers and Lybrand was asked to perform some tasks related to calculations of
retirement options, buy-back calculations, withholding and tax reporting requirements, early
retirement issues, etc. Staff now believes the administration work performed by Coopers
and Lybrand is outside the scope of the previous Trustee approval, and additional Trustee
approval must be received. Payments have already been made to Coopers and Lybrand in
the amount of $6,040 and an invoice is awaiting payment totaling $1,390 for work
performed through October 15, 1996.
Additional invoices can be anticipated for an amount not to exceed $2,510 until a
contract for administrator goes into effect..
Funding is available in the Employees' Pension Fund.
Trustee Johnson moved to ratify the $6,040 expenditure paid from 8/95 through
present and approve an additional $3,900 for Coopers & Lybrand to assist the City with
administration of the Employees' Pension Plan until the effective date of an Administration
Services contract. The motion was duly seconded and carried unanimously.
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mPF12.96
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12/02/96
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Funding is available in the Pension Fund for these costs.
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ITEM #5 - Approve hiring Coopers & Lybrand to act as City's Third Party Administrator for
Pension Services at an est. $ 29.000: approve est. $1.000 for related internal printing costs
Effective 1/1/96, the Employees' Pension Plan was changed to a qualified pension
plan. The plan was also changed to allow retiring employees to choose one of six optional
manners of receiving pension payments and to designate their beneficiaries. Due to these
modifications and the on-going changes in federal law regarding pensions and taxes, staff
is requesting the services of Coopers & Lybrand be approved to provide options-counseling
for retiring pension plan participants and to provide pension/tax law advice for city staff.
Coopers & Lybrand proposes to do the following: develop a customized pre-
retirement planning workbook for a one-time cost of $5,000; prepare a Summary Plan
Description (SPD) for a one-time cost of $2,000; provide individual pension plan benefit
statements for an annual cost of $1,000; calculate pension benefit estimates for $150 per
estimate (for eligible employees); conduct pre-retirement seminars at a cost of $240 per
hour; provide options counseling for up to 1 hour per retiring employee at $100 per hour;
calculate actual pension benefit amount for $1 50 per calculation; and provide pension and
related tax law advice to city staff at the rate of $240 per hour.
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The total estimated cost for the first year would be approximately $30,000:
$7,000 for workbooks and SPD - a one-time cost; $1,000 for individual statements;
$4,000 for seminars - estimated at 4 seminars, approximately 4 hours each; $14,000 for
employee calculations and counseling - estimated at 35 retiring employees (35 x as much
as $400) ($400 - $1 50/estimate + $1 50/final calculation + $100 for 1 hour's counseling);
$3,000 for staff advice - estimated at 12.5 hours @ $240 per/hour; and $1,000 for
printing documents - costs incurred by City not payable to Coopers.
Discussion ensued regarding the services to be provided and the rates being
charged. In response to questions, it was indicated a determination will be made regarding
whether outsourcing these services is cost effective. Concerns were expressed regarding
tax advise being given. It was indicated this will be opinions regarding tax law given to
staff by a qualified attorney.
A concern was expressed that the pension fund should not pay for advise regarding
social security and medicare. Ms. Rice indicated this will be an effort to encapsulate all
information in one place, not day to day advise.
In response to a concern that this not be considered "an open telephone line to run
up a bill", it was indicated Coopers & Lybrand is aware they are responsible for any excess
charges. It was emphasized this is a one year agreement.
In response to a question, it was reported, annual benefit statements are not
currently provided. A responsibility of the third party administrator will be to provide this
for an estimated $1,000 per year.
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12/02/96
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Trustee Seel moved to approve hiring Coopers & Lybrand to act as the City's Third
Party Administrator for Pension Services at an estimated $29,000 and to approve an
estimated $1,000 for related internal printing costs. The motion was duly seconded and
carried unanimously.
ITEM #6 - Other Business: - None.
ITEM #7 - Adjournment:
The meeting adjourned at 1 :23 p.m.
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mPF12.96
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