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HomeMy WebLinkAboutPension & Audit Committee February 23, 2015 PENSION & AUDIT COMMITTEE ROOM – February 23, 2015 COMMITTEE 11:45 A. M. PRESENT: Hons. Hardie Davis, Jr., Mayor; Grady Smith, Mayor Pro Tem; Wayne Guilfoyle, Finance Committee Chairman; Janice Jackson, Administrator; Donna Williams, Finance Director; Lena Bonner, Clerk of Commission. 1.Receive as information the status of the year and investment activity for the 1945 and 1949 Pension Plan results by Charles May from Morgan Stanley. Mr. May made a presentation regarding the status of the 1945 and 1949 Pension Plans. Mr. Guilfoyle: I make a motion that we receive this as information. Ms. Williams: Second. Motion carries unanimously. 2.Receive as information the amount of 2015 COLA increase effective March 1 as provided in the 1945 and 1949 Pension Plans. Ms. Williams: The methodology to provide for the cost of living increases as adopted in this plan mirrors the increase in the Consumer Price Index for the south region as published for the end of the previous year. The document I passed around reflects that it was published with an increase of .6% for 2014 and these increases will be included on the March 1 check for this year. All this requires is being received as information as it is the methodology as prescribed within the plan documents. Mr. Guilfoyle: Receive as information. Ms. Williams: Second. Motion carries unanimously. 3.Attorney Steve Sanders on behalf of Lester Newsome regarding increased benefits requested by the 1945 Pension Plan retirees. The Clerk: I received a communication from Mr. Sanders who says Mr. Newsome would be speaking relative to this request. Mr. Newsome: About ten years ago we had requested that we be given a $250 increase and you can see that no action has been taken. Since we have not been successful we respectfully request that you explore the possibility along with our legal authorities of dissolving the act and dividing up the proceeds to the remaining 17 retirees and four spouses. This would be verified and save a sufficient amount of money which we (inaudible). The county now kicks in $380,000 a year – 1 Ms. Williams: A little over $380,000, yes, sir. Mr. Newsome: As you can see, our original request for $500 a month increase and make it retroactive to February, 2014. The increase would cost I figure $65,000 and would be a savings of $3,713 a year due to the death of one of the retirees last year. Mr. Mayor: Initially you indicated there was a request ten years ago of $250 per month and in your last statement you said $500 a month. Mr. Newsome: Well, it’s been $250 and I think the first part of April of this year in the Metro section of the Augusta Chronicle (inaudible) seeking a raise in benefits of $250. But nothing has happened since then and after these many delays we’re entitled to. I don’t want to get involved with this ’49 plan. We stand alone on the ’45 plan. Either give us the money or dissolve the plan. Ms. Williams: I’ll provide a little background on that. Mr. Newsome did make the request for the $500 per month but in the pension meeting the request for the motion that moved forward out of this was to have the actuary complete the cost estimates on $250 per month and that was done and has been presented. The actuary has been back here on at least two separate occasions to make us aware of the increased cost related to the possibility of taking the action for an additional $250 per month. For $250 per month for the 1945 plan for the current retirees the additional cost was $55,769. For the 1949 plan it was $628,294 on an annual basis. Mr. Mayor: I think it’s appropriate to receive this as information and for those of us here give us an opportunity to understand these issues and then at our next meeting, I think we need at least 45 days to get our arms around this and get an opportunity to understand all of this. Mr. Guilfoyle: Mr. Mays, you’re familiar with these plans. Can you dissolve a plan? Mr. Mays: I’ll have to defer to Ms. Smitherman. Ms. Smitherman: You can dissolve a plan. I’m not sure that you can dissolve a plan when you have active participants and retirees. That would be a question I would have to research further and I can bring that back to this committee. Mr. Guilfoyle: We look at the investments that the participants had put into it. We also look at the investments the city put into it. Just to dissolve a plan that’s a little over $6 million dollars, that’s not all pension, I think the city puts in over $300,000 a year. You have to justify one, is it feasible to shut the system down and two, to justify putting more money into the pensioners. Now any time that you put more money into the recipients, the pension plan, we are responsible. I would fight if Augusta Richmond County wanted to use some of this money to balance our budget. I would fight for ya’ll tooth and nail. But I’ve also got to fight tooth and nail to keep this plan. No other city has given $250 or $500 increases into a pension. I even asked your attorney to bring that forth. We are actually one of the few cities that gives a cost of living raise. I’m the protector of this plan. I’m the one that would go to jail if something goes 2 wrong. And I have to protect the interest of you, the rest of the pensioners, the ’49 plan, the GMEBS plan and that’s what I’m going to do. Mr. Newsome: I would like to see the Mayor appoint a committee to discuss dissolving the plan along with some of our legal authority. It could be done. I’ve got to have some legal authority to say it can’t. Mr. Mayor: Here is the message I think we want to send to our city employees. We care about you and this is extremely important, both of these pension plans but also how you are a beneficiary of that. We want to receive this as information today. No action is being taken but we’re just receiving it as information. We need sufficient enough time to be able to understand what’s being done and I can concur with Attorney Smitherman that state law does not allow you to essentially dissolve the plan when you’ve got active participants. So we’re going to receive it as information and at the appropriate time we’ll have a meeting here internally and then we’ll come back and bring everybody together. Mr. Newsome: It seems like everybody in the county is receiving increases over and above their salaries. Mr. Mayor: We do have one more item on the agenda that we need to take up. Mr. Smith: I move that we receive this item as information. Mr. Guilfoyle: Second. Motion carries unanimously. The Clerk: Is this item going to be an add on? Okay. Ms. Smitherman: This item has come up at the last several pension committees. We finally were able to get the amendment from GMA with regard to the GMEBS plan, GMEBS I, which the majority of your employees are in. There are various amendments to the plan. The first amendment is to clarify the provision regarding to crediting unused sick leave to the 24-hour workers. We have a situation where employees are allowed to convert unused sick leave into credited service under the plan and the calculation was such that if you had 20 days, 20 7.5 hour days that equates to one month of credited service under the plan. We ran into a situation that with your 24-hour workers, that equation didn’t work for them because they didn’t have 20 7.5 hour days, they had 24 hour days and so in order to make that fair and equitable to them, the calculation was clarified to show that for 24-hour shift workers they only needed nine days to equate to one month which makes them equal with the 7.5 hour workers. We were already using that calculation but to make it clear and simple for the GMEBS employees, we have amended the plan to make it clear that they only need nine days to equate to one month of credited service upon going into retirement. The next revision is to revise the definition of public safety personnel. The definition that was in public safety personnel prior to this referred to firefighters and police officers. The consolidated government doesn’t have police officers and Sheriff’s deputies and Marshal’s deputies were being counted as police officers and we wanted to clarify 3 that language and make sure that public safety personnel meant Sheriff’s deputies and Marshal’s deputies and also included 911 personnel in that definition of public safety. There was an actuarial study done to determine what if any cost would occur as a result of including the 911 employees in the definition of public safety and that actuarial study came back to say that there was no cost difference to Augusta, Georgia at all to include those employees in that definition. So that is the change to clarify public safety personnel. The third revision is a situation that arose, the previous Chief Appraiser of the Tax Assessors office had a contract in which he was guaranteed ten years of credited service under the applicable plan. That contract was approved by the Commission but the plan was never amended to incorporate that change. He has now looked into retirement and we have now realized that that amendment was never made and so we’re revising the plan to reflect what was in that contract and that is to give him the ten years accredited services that was guaranteed him under that contract. The fourth amendment is merely a technical correction to just clarify for the GMA staff we already made our SES level employees immediately vested. Some of their staff that were (inaudible) to the plan had some question about the language and so to make it crystal clear GMA came back and said let’s just revise it to make it very clear that SES level employees are immediately vested. There’s no other change than that. The fifth change is one to permit the Clerk of Commission who is the Pension Committee secretary to authorize a designee to act on her behalf to sign the pre-retirement beneficiary forms and the (inaudible) contribution forms. As you may be aware at the end of last year, Human Resources in order to clean this plan up had asked every single employee that we have to execute a new pre-retirement beneficiary form. When this plan was developed several other plans came into this plan and then we have a bunch of new hires. We were running into issues where some of the employees who were on the other plans (inaudible) have pre-retirement beneficiary designation forms and we’re just trying to clear records up. That has put the Clerk of Commission under extreme stress with getting 2300 pre-retirement beneficiary forms at one time so this allows her to designate somebody in her staff to sign those forms so it won’t take up so much of her time on administrative tasks. Mr. M. Williams: I want to go back to one of those amendments about the 911 employees coming under the same rules as the Fire Department and the Sheriff. This is something we’re putting together for GMA, that they recommended to us? Ms. Smitherman: GMA put this amendment together for us. Mr. M. Williams: At our request? Ms. Smitherman: Some of the amendments were at our request. Some of the amendments were at their request. Mr. M. Williams: I guess I need to know who requested that. I understand the part of their job but I think we’re going to be easing over into another lane to bring the 911 Directors to the same standards of a police officer or a fireman. To me that’s going to be totally different. We need to really look at that. Once you make that move, you’ll open up another door. I understand that’s part of their job. 4 Ms. Smitherman: This was a matter that was brought to the Pension Committee back in November and the direction of the Pension Committee at that time was to have an actuary (inaudible) done to see the cost associated with that and we’re not talking all 911 employees. It’s the same type of requirement that is for law enforcement that have to be POST certified. So what it does is it’s all law enforcement personnel who are POST certified and for all firefighters who are certified by the, I’m sorry I don’t know their acronym. Underneath that it would just say the public safety departments are Marshal, Sheriff, Fire Department and 911 so they have to be POST certified to fit with that definition. Ms. Jackson: I have a question regarding the RCCI employees if they are in there. Mr. Mayor: I think the broad category is all public safety personnel are being categorized in this. Ms. Jackson: Those who are certified under the different agencies. (Ms. Smitherman reads the paragraph from the document) Ms. Smitherman: This includes 911 as a public safety department and includes the language “and whose most recent employment with Augusta, Georgia was with a public safety department.” That language apparently isn’t in there and so you have a situation where somebody could have been with the Fire Department or the Marshal’s Office or the Sheriff’s Office for a very short period of time, got certified, gone to another department and still retired at 55 so we’ve kind of gotten rid of that loophole that somebody could get into as well. Mr. Mayor: Is it the intent to provide this as information for us or is there an expectation for us to take action on this? Ms. Smitherman: The GMEBS plan is an ordinance so if it’s accepted by the Pension Committee it would go to the full Commission next Tuesday for a first reading and two weeks thereafter for a second reading. Mr. Mayor: This is a very important document and I would think you would want to look at it in some level of detail so perhaps what we would want to do is receive this as information and -- Ms. Williams: Do we need to pull, separate Mr. Hicks from this because I’ve been privy to the emails that this has been worked on for a long time and the Board of Assessors is a little impatient. The contract was approved, the gentleman worked under the terms of that contract and unfortunately it was not known by the Pension Committee that those were the terms of his contract and that it would require an amendment to the plan. So we essentially obligated ourselves to that action. Mr. Mayor: I think we could just receive it as information and there are mechanisms that between now and next week we could take action and move it forward. 5 Mr. Sias: Can we get input from the attorney and Finance as to the speed that this needs to happen? Mr. Lockett: I wanted to comment on Calvin Hicks. I served with him on the Board of Assessors when he was Chief Appraiser and my question to Donna is does he intend to retire in the short, short term future or do you know? Ms. Williams: I have not had that confirmed but I can infer from the fact that GMEBS has contacted us regarding calculations that he has explored that opportunity. Mr. Lockett: I would think that this and this alone really should be expedited because this guy served Augusta Richmond County well during those years he was here and we don’t want to put a bitter taste in his mouth because we’re dragging our feet on something that happened that’s of no fault to him. So I would hope that we could expedite this. Mr. Mayor: Some of the items of changes to the document are, I’ll use the word cosmetic, the most substantial one is item number three, is that a true statement? Can we take action on this? Ms. Smitherman: I can just say as to this matter Mr. Hicks is definitely the most time pressed matter on this. Ms. Williams: It is my sense that there is an urgency on this and the others are clarifications or technical changes. Mr. Guilfoyle: I’ll make a motion that we approve these documents as there is something that is pressing with Mr. Hicks to be on the forefront . We could do it after legal. Mr. Smith: Second. Motion carries unanimously. ADJOURNMENT: There being no further business, the meeting was adjourned. Lena J. Bonner Clerk of Commission 6