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HomeMy WebLinkAboutPension & Audit Committee September 19, 2017 PENSION & AUDIT COMMITTEE ROOM – September 19, 2017 COMMITTEE 1:00 P. M. PRESENT: Hons. Hardie Davis, Jr., Mayor; Mary Davis, Mayor Pro Tem; Commissioner Sean Frantom, Finance Committee Chairman; Janice Jackson, Administrator; Donna Williams, Finance Director; Andrew MacKenzie, General Counsel; Hasan, Sias, M. Williams, Commissioners; Lena Bonner, Clerk of Commission. Mr. Mayor: We are here for the Pension and Audit Committee Meeting and I have the members of this committee to my left to your right. We have Mayor Pro Tem Mary Davis, Commissioner Sean Frantom, Director Donna Williams and Administrator Jackson. Those are the members of the said committee. We have an agenda, Madam Clerk, there are extra copies of the agenda that are out there right there on the end of the dais there. And so we’re going to move expeditiously with our agenda and we’ll begin calling this meeting to order. All right, the Chair recognizes the Director of Finance, Ms. Williams. Ms. Williams: Item number one is some information from GMA regarding their administration of the GMEBS Plan. And also incorporated into this item are some housekeeping procedures for this body to adopt some various statements regarding the plan that keep us in compliance with the IRS. That information was disseminated earlier to the committee and I’ll let, if there are any questions I’ll refer those to GMA and to our attorney Mr. MacKenzie who is handling those for Ms. Smitherman who is unable to attend today. Mr. Mayor: Okay, all right, let’s do this, would the representatives from GMA would you please come forward and if you’ll take your places around the podium and/or on the first row as well. Mr. Logan: Thank you, good afternoon, Mr. Mayor, members of the committee. My name is Randy Logan. I’m employed with Georgia Municipal Association. My primary responsibilities are in the retirement area. I also have Randy Briskin with me. He’s handling out some information to you all. He is a field representative for GMA. Mayor Marinetty Bienvenu is the Director of Retirement Administration for GMA and we also have the Plan Actuary Rocky Joyner here for you. We have two presentations for you. The first one that I’d like to review is merely just an overview of what GMA does for this for you for your retirement plan. And the second is Rocky will give, it gets a little more in-depth, he’ll review some of the results of your most recent actuarial valuation and talk about the funding of the plan and get more into that. If you have any questions, please feel free to stop us. You know this generally works better if it’s a little bit more interactive. I can typically be pretty boring but I’ll try to not bore you too much. Thank you all for letting GMA be the administrator of the Augusta-Richmond County Retirement Plan. GMA has been providing a service for our members since 1967 under an authority of the Act of the General Legislature. We do this for about 285 different local governments around the state and 245 of them are municipalities. We do some boards and commissions and authorities but we’re the administrator. That being said each one of these plans is its own retirement plan. You all own your retirement plan. The Mayor and the Commission are the governing authority of this retirement plan and all of the benefits that are spelled out in the plan, the benefits your employees get, dispense get, what they have to do to earn those benefits is spelled out in this Retirement Plan 1 Adoption Agreement which is a city ordinance so what we at GMA do is we administer the plan for you. And then there’s a list I’ll go through a little bit further back in the presentation about some of the things that we do for you. But first I’d like to point you to Page 2. It’s just kind of an overview of GMA our Retirement Risk Management Employee Benefits area department, is a key department of GMA. We’re involved in retirement plans, insurance plans, we have a total fund assets of about $2.5 billion dollars. And the direction and oversight of this is by Board of Trustees of 15 elected and appointed officials, folks just like you from around the state. Our Chairman of this Board of Trustees is Mayor Boyd Austin the Mayor of Dallas, Georgia who many of you know. Our Vice-Chairman is Mayor Ken Usury from the City of Thompson just right down the road. There are ten elected officials on the board and five appointed officials on the board. Our defined Benefit Program, they do the oversight for that and they do a number of other things for it as well. Total fund assets in this all the pooled assets which the assets in your plan are in a retirement trust for Augusta-Richmond County. They’re your assets, they don’t pay for anything but the participants of your particular plan and you fund that. We do pool those assets for investment purposes though so which is a total of about $2.1 billion dollars. That is good for you because with $2.1 billion dollars we’re able to get the better returns for a smaller administrative cost than you would be able to get on your own. Turning on to Page 4 talking a little more about the role of the Trustee, they establish the asset allocation which is one of the big jobs. Another big job is they establish the investment policy and guidelines for that. They hire and fire investment managers, they establish actuarial methods and approve all of our service providers in this. Mr. Mayor: Rocky, can you just suspend for just a moment. Mr. Logan: Randy. Mr. Mayor: Randy, okay then Rocky is coming up next, sorry. To the members of the committee do you have any questions? I know we’ve been, this information was disseminated by Jody, do you have any questions that you’d like to ask specifically with regards to this. Okay, if not particularly with regards to the first presentation which is this handout here, I’d like to entertain a motion to receive as information. Ms. Davis: So moved. Mr. Frantom: Second. Mr. Mayor: Okay, all those in favor, Donna, you can. Ms. Williams: Associated with this item number one are the compliance measures --- Mr. Logan: Amendments to the plan, yes. Ms. Williams: --- amendments to the plan to keep them in compliance with the IRS. So, incorporated into that motion it would be perhaps appropriate to not only receive it as information, this item as information but to accept those amendments. Mr. Mayor: All right, do we have said documents for signature at this time? Okay. 2 Ms. Williams: The Law Department has those --- Mr. Mayor: Okay. Ms. Williams: --- they were attached to the --- The Clerk: Yes, --- Ms. Williams: --- the email yesterday. The Clerk: --- these were the documents that we attached to the email. Mr. Speaker: Yes, from our legal counsel, yes. Mr. Mayor: Okay. The Clerk: You have those, you have them. See if that’s what he’s --- Mr. Mayor: All right, okay. Ms. Williams: He would just briefly mention each one of the changes that needs to be incorporated. Mr. Logan: Okay, certainly and again as Donna stated these are some amendments to your plan to keep your plan in compliance with the state and federal law. We restate the plan in order to keep you in compliance which is one of the responsibilities of us. And would you like me to go through all of those? Mr. Mayor: What we’d like for you to do for us, Randy, is highlight the changes --- Mr. Logan: Okay. Mr. Mayor: --- if you’ll state what those are. All right, I guess the proper question would also be that is it not true that this is an annual review. We do this every year --- Mr. Logan: Yes, sir. Mr. Mayor: --- okay I just to make, so if you’ll articulate that as well that certainly helps provide a level of comfort with --- Mr. Logan: Okay, so what I have here is a cover letter for those amendments. It’s a Draft Adoption Agreement for the plan for Retirement Plan One. The amendments incorporate terms of the seller agreement between entered into between Augusta and Mrs. Linda Goodman. The amendment also confirms that forms submitted to Augusta, Georgia or prior administration of retirement plans sponsored by Augusta, Georgia or Richmond County Georgia prior to January 1, 3 2008 designating a participant’s preretirement beneficiary for retirement plan purposes or applicable forms under the GMEBS Plan One for the purpose of determining the participant’s primary and secondary preretirement beneficiaries as long as those designations have not been and are not superseded by subsequent designations. The Clerk: (Inaudible). Mr. Logan: Yes, ma’am, okay well, that’s it right there. The Clerk: Okay. Mr. Logan: Additionally the amendment makes participation in the plan mandatory for all classes of eligible employees including but not limited to elected officials, staff attorney, administrators and department directors. Effective October 1, 2017 all eligible employees initially employed or taking office on or after such date will automatically participate in the plan. Prior to that there was a form you had to fill out. Mr. Mayor: All right, I want to pause here for a moment. Mr. Logan: Yes, sir. Mr. Mayor: That’s a very important point I think for those non-members of this body as well as the members of the body. It is mandatory that everyone participate in the GMEBS Program. Mr. Logan: If you’re in a qualified class, yes, sir. Mr. Mayor: If you’re in a qualified class and so that becomes germane even as it relates to the conversation with regards to Public Safety moving forward, okay, everybody be aware of that. Mr. Logan: Okay --- Mr. Mayor: Continue. Mr. Logan: --- the amendments also take the opportunity to update the plan with respect to criteria use to determine disability benefits for consistency with the Master Plan and federal law. We’ve also updated provisions concerning payment of terminated vested death benefits to participants in Classes 2, 4 and 6 end payment of in-service death benefits to Class 6 for consistency with the Master Plan and GMEBS Plan Administration. We’ve also revised Paragraph 15A4 of the General Addendum to provide that death benefits that are currently applicable to Class 6 participants who terminate prior who terminate employment due to job related death will be applicable to the current plan. And additionally they’ve also added a subsection to the General Addendum affirming that GMEBS is entitled to rely on information provided by Augusta and by prior Plan Administrators to administer the plan and will not be liable for relying on such information. Finally, we revised the Service Purchase Addendum to clarify that the rate of interest 4 on a refund of contributions made to purchase service credit will be the same as the rate of interest applied to a refund of mandatory employee contributions. That concludes the amendments. rd Mr. Mayor: All right, the Chair recognizes the Commissioner from the 3 Mayor Pro Tem. Ms. Davis: Mr. Mayor, I’ll amend my motion to accept the amendments that were proposed, to approve the amendments that were just proposed in this presentation. Mr. Frantom: Second. Mr. Mayor: All right all those in favor will, all right, thank you. Motion carries unanimously. The Clerk: It’s unanimous. Mr. Mayor: Okay, all right. Mr. Logan: Are there any further questions for me? Mr. Mayor: No. Mr. Logan: Then I’d like to turn it over to Rocky Joyner to review the plan. Ms. Davis: Thank you. Mr. Joyner: Is this number two? Mr. Mayor: Number two. Mr. Joyner: Good afternoon. In front of you, you have a brief presentation from Seagal and GMA regarding the most recent actuarial evaluation for the system which is as of January 1, 2017. The January 1, 2017 evaluation is used to establish the contribution requirements for the fiscal year beginning July 1, 2017. If you’ll turn to Page 2 I’ll point out, one big thing I’ll point out right in the middle of the page is this Funding Percentage at 99.94 that places the Augusta Plan as one of the best funded plans in the State of Georgia as well as the nation for a city (inaudible). The average nationwide for main public sector plans is about 78/79%. You guys are significantly higher than that which gives you lots of flexibility if the market should have a backpedal a little bit at some point. You have the flexibility to move forward. The other thing on this page is your required contribution. It’s based on a ten-year Amortization Period. The ten years is a very conservative period. It also gives you a lot of flexibility if you have either budgeting issues or problems with the economy. The State of Georgia allows up to 30 years amortization period. In GMEBS we recommend our members stay way below the 30 because if you’re moving towards the 30 and something goes wrong you’ve got no place to go so this gives you some options there and keeps the plan on a level footing. You have about 2200/2300 hundred employees in the plan and the contribution rate needed from the city’s 4.63% of pay. If you have a question or say 5 something that doesn’t quite resonate, ask me to stop and we’ll look at it then. On Page 3 just a quick summary of your Plan of Benefits. This plan was a merger of multiple older plans about 2007. City employees participate in social security. You have a 1.65% multiplier. This multiplier is about right in the middle of the pack for GMA cities around the state. You have a retirement at 65. General employees can retire as early as 62 if they have 25 years and police officer and firefighters can retire as early as twenty-five if they have 25 years of service. Employees do contribute, they contribute 4% of pay. Some of the older plans have other rates in place. One other feature that’s very important for your plan which is not unique but is not widespread either is a Cost of Living Benefit after retirement. Anyone who retires from the plan annually gets a 1.5% increase in their benefit each and every year that they remain drawing benefits under the plan. Vesting is at 5 years and it’s a, it’s a good plan. It’s not a Cadillac but it’s a good solid plan in place. You have older plans, a combination of different things that are being phased in but currently of your 2293 active employees all but about sixteen will actually have their benefit calculated on the 1.65% multiplier. Some of the old multipliers are going by the wayside as the plan ages and gets in there. Page 4 just to show you where you came from, yes, sir? Mr. Mayor: All right, the Chair recognizes the Commissioner from Finance Committee Chair. Mr. Frantom: Thank you, Mr. Mayor. On Page 3 the Employee Contributions required at 4%, what would be the impact or how do we get that information, what would be the impact if we up that percentage to 6%? Mr. Joyner: The immediate impact of it if you only increase that from four to six and did nothing else as far as plan changes the city’s contribution rate would go from 4.63 to about 2.63. Those numbers are not exact because there’s a little bit of movement there because the employees get a refund of money if they actually quit but it’s pretty close to a 2% drop, almost one for one drop on that. Mr. Frantom: Thank you, Mr. Mayor. Mr. Joyner: If I may add to that, it will not change your current funding percentage or anything. It just gives you, it just tells you in the future money’s coming out of a different pocket than it was going before. Mr. Mayor: Ok continue, very good. Mr. Joyner: All right, on Page 4 just to indicate where we come from. Right after the crash when all the dust settled in 2008 you’re at about a 72% funded ratio and from 2010 until now it’s climbed from 72% to over 91%. Strong funding plan, the city, you guys are taking care of business and not try to shortchange contributions or anything along the way and done what you’re supposed to do. I work with plans all across the country. We have some plans we work with that worry me, they might keep me up at night. We spent two years with a plan out in Texas trying to pick up the pieces from a prior administration that did not what they were supposed to do. It took two years to come up with a solution. We think we’re there now. Your plan is not one that keeps me up at night at all. This is very solidly funded plan. Starting on Page 6 we do some projections for you 6 just to show you where we’re headed. Over time as your approach a 100% funding your contribution rate will drift down from 4.63% down to 3% and your funding ratio will get closer and closer to 100%. Please note on Page 7 as a dollar amount your contributions are expected to go up over time. This is strictly because your benefit is associated with salary and your contributions are associated as a percentage of pay so as you give pay raises your actual dollar amount cost is expected to go up but we think your budget will probably be expected to do the same thing because of inflationary aspects of tax revenues and things. That completes my formal presentation. If there are any questions regarding the plan, any issues anything that you would like to bring to our attention, we’re here to try to answer any questions we can. Mr. Mayor: All right, any questions? Probably a couple. All right, Finance Chair. Mr. Frantom: Thank you, Mr. Mayor --- Mr. Mayor: Yes, sir. Mr. Frantom: --- I’m going to go back to my question again the contributions of the employees going up to 6%. I was just told that’s a $1.5 million-dollar savings on our end. What are your thoughts on that recommendation? I mean kind of give me some thoughts on that if we were to do something like that. Mr. Joyner: Currently employees are putting in 4.63; it’s not exactly 50/50. Most plans around the country the city it’s a rough average. The city would put in like 3 to 2, 4 to 2 to a ratio to that so your 4.63 to 4 is pretty in my opinion a pretty decent balance between employees and the city making contributions. If you increase the city the employee contributions to six, then you have a plan that’s almost predominantly paid for by the employees and that puts the balance back on the burden of the employees which is not in my opinion the norm around the country in these types of plans. There are plans that have done these types of things mainly because there’s very strong budget constraints and issues where the economy in the area is either tanking or the city is landlocked and there is no room for expansion. They’ve had to take more drastic measures. In your situation absent that balance there I would, my gut feeling right now I don’t see a strong advantage for doing that for you. What you might want to do, just a thought, and I look at your plan and notice that you have a 62, you have a COLA. I also looked at your retiree medical benefits. You offer some retiree medical they’re pretty good for your employees. I’m not an expert on that area, I don’t have all the details in your plan. We don’t work on that plan, I’ve just seen a copy of your Evaluation Report. You are offering police and fire the opportunity to leave at 55 or 25 years of service but you’re not offering any incentives for them to leave, it’s strictly their choice. Some plans for police orders and public safety if they’re getting them to go out earlier they might offer them a higher benefit payable from say 55 to 65 or things of that sort but that’s not what you have here. Mr. Mayor: Are you saying that across the State of Georgia, Rocky? Mr. Joyner: No, sir, I’m not saying it’s normal. I’m just saying you see it on occasion. What you often see more often is police and firefighters will not be on social security so they’ll put all of their big eggs in the basket of the city plan and they’ll have a higher multiplier, 2.2, 2.3. 7 They’re not on social security. That way their benefit when they retire they can go out and don’t have to worry about when social security kicks in. Mr. Hasan: Mr. Mayor? Mr. Mayor: Okay, hold on just a second Commissioner. All right and what would be the impact of a higher multiplier? Mr. Joyner: A higher multiplier would cost you more money and it would depend on how you handle the higher multiplier and how you did it. There are multiple ways. If you made the higher multiplier you said you’re at 1.65 through 10-1-17 and after 10-1-17 you get say 2% just for argument’s sake then that, the cost of that is relatively minor today but it gets higher as you go forward if you have to increase contributions in the future. The other way to do it would be to say if you want to go backwards in time and increase the multiplier to something higher then you would create some funded liability. Your 91% would go down to whatever it happens to get to and you’ll be required by Georgia law to fund it in a fashion that gets you back up to 90% over a period of time. Under GMEBS that’s a 20-year period to fund those new benefits. Other if you had a, I’ll continue talking until you stop me --- Mr. Mayor: So I think it probably would be prudent for us to have you do the actuarial analysis of what that would like if we phase that in over time starting from 10-1-17 moving forward --- Mr. Joyner: Sure. Mr. Mayor: --- and give that data back to us, I think that would be helpful --- Mr. Joyner: Okay. Mr. Mayor: --- again going from again 1.65 to a 1.75 whatever that number is today to a 2.2. Mr. Joyner: The other thing that we’ve had some cities in the state do is they’ve either kept their defined business plan where it is or like you suggested increase the employee contribution a little bit but then add an employer match on the 457 side. That encourages greater savings across the board by the employees to get the full benefit of the city’s contribution. Now again none of these are recommendations because I’ve not talked to any of your staff or any of your union groups about or your employee groups, not union, employee groups about what your goals and objectives are. What we want to do is probably have a conversation with you to see what you’re trying to accomplish. th Mr. Mayor: Okay. All right, the Chair recognizes the Commissioner from the 6 for a question. 8 Mr. Hasan: Thank you, Mr. Mayor. He may have answered that, Mr. Mayor, but I’m going to ask again just for clarity’s sake. We are talking about just Public Safety at this time, is that the case? Mr. Mayor: No, what we’re talking about is employees across the entire organization. Now this last caveat was specific to Public Safety yes, the last caveat but today’s conversation is across the entire organization. Mr. Hasan: Yeah, but I wanted to go back to the Public Safety, that’s why I wanted to go back to that. And if you just number one I was trying to figure out how do you just identify them and does, how much additional investment on both parties then would that potentially take. I know we’re talking not off the cuff but we’re talking without any research at this time. But wouldn’t that take additional investments on both parties and how, what is it going to take us to bring it up to speed. Mr. Joyner: Again --- Mr. Hasan: With in mind excuse me, with in mind giving them an opportunity to retire an incentive as you made mention of. Mr. Joyner: --- right. Right now if they retired at 55 they have a 1.65 multiplier just like everybody else in the plan, talking only Public Safety, right? Mr. Hasan: Yes. Mr. Joyner: They’re the only ones that can retire at 55. Everybody has to wait until 60 or 65. So right now your retirement at 55 is an option for the Public Safety folks but it’s not anything that the city has encouraged them to do. If you wanted to say, if the city wanted to encourage Public Safety to go out earlier you might look at things like a bridge benefit for 55 to 62, you might look at increasing the multiplier, you might look at a match on the 457 Plan. There are a lot of options you can do. But to answer your question when go this route depending on who pays for it with employee contributions go up or city contributions go up how you handle it is your decision. If the city says it’s in our best interest okay, pardon the expression here, it’s in our best interest to make these people go home earlier, right, then the city might want to pay for more of it. If it’s a combination of it’s a good thing for the employees maybe split it half and half. If it’s something that’s driven all 100% by the employees, then you make the employees pay for all of it. I mean standing here today I don’t know the answer for you because I haven’t talked to anybody yet but that’s the way we’ve handled it around the country depending on what’s the impetus for making the change, does that help? Mr. Hasan: Yes, sir, thank you, sir. Thank you, Mr. Mayor. Mr. Mayor: Okay, Rocky, I’m going to ask you another question particularly with regards to our options here. Currently again the city input 4.63, employee contribution is 4%. What if the option existed, and again coming from a private sector standpoint employee contributions up to 9% the employer’s only going to match up to 6, could we not have a dynamic just like that here? 9 Mr. Joyner: You could do that. The problem is under Georgia law the employer contribution can’t be a set fixed rate under the way we do this plan. There are plans that have fixed rates but they have to be careful to not run afoul of Georgia Funding Laws. Now having said that you could do something similar to that in rates and balances there to go forward if you wanted to go in that fashion. Also remember your employees are in social security so they’re already putting 6.3% towards retirement from the social security side. So in my opinion since they are in social security you’ve got them right now putting 10.3% of pay towards retirement. So just be careful, make sure you look at the impact on the employees as well as the funding of the plan. Mr. M. Williams: Question, Mr. Mayor. th Mr. Mayor: All right, the Chair recognizes the Commissioner from the 9 for a question. Mr. M. Williams: Thank you, sir. I’m just listening trying to get my head around this. Has there been any conversation about a standing retirement time with anybody whether it be Public Safety or not, have there been anybody requested to say no we need to retire later than earlier? I guess my question is why is this conversation even being talked about if there hadn’t been a request for, one way or the other I guess is my question. Mr. Mayor: So annually we have a conversation about changes to GMEBS. That’s why we’re here today and that’s the genesis behind Presentation One and now Presentation Two. The other conversation is one that as a result of a series of previous discussions that’s continuing to come up. Rocky. Mr. Joyner: If I may just to tag on what you’re saying, Mr. Mayor, this plan has been in place for 10 years with very little, not a lot of changes to it in the 10-year period. Periodically it is a very good idea for a public entity like the City of Augusta to take a look at your plans and ask some questions. Say is the plan working the way we thought it was going to work, are we really benefitting the people we want, are we hiring and retaining the people we want to come work for the city. Those are fair questions and in doing that you just take a review of your plan. It doesn’t mean you have to make changes but it’s good to know where you’ve been and where you’re going. Mr. Mayor: All right, the Chair will entertain a motion. All right, we have some more questions. Mr. Frantom: Well (unintelligible) a motion that we --- Mr. Mayor: Okay. Mr. Frantom: --- I’d like to entertain a motion that we look at this plan, we haven’t looked at I guess in 10 years and come back. I don’t know how long it will take him to do that but I think that we’re definitely at a point where we need to review this plan and see what we can do anything for it. Mr. Mayor: Yeah, okay all right, it’s a motion? 10 Mr. Frantom: It’s a motion. Ms. Davis: Mr. Mayor? Mr. Mayor: Yes. Ms. Davis: What’s the best way though for that to be brought back to us because you were saying you need to meet with the appropriate parties. So, I guess --- Mr. Mayor: Okay, Mayor Pro Tem, before you do that I’ve got a motion and I don’t want it to die without a second. Ms. Davis: I’ll second the motion. I just want to make sure that we have a full motion to where it comes back and we know what we are trying to get to, where we’re trying, our goals and objectives. So, Ms. Williams, I don’t know if you’re the best answer to that or both of you all. Ms. Williams: Some of the scenarios that we’ve talked about and some of the things that Mr. Joyner perceived as standard in the industry I think that he could incorporate it into a proposal to bring back to us to allow us kind of a menu selection as to, so that our plan will continue to be funded because I think that’s in the best interest of everybody concerned but yet to possibly offer some enhanced or some changes to bring us more into the norm of what is seen across the state. Mr. Joyner: If I may suggest the following. I like that idea; we can clearly do that internally here at Augusta. If you’ve got department heads or somebody that say you know it would be really nice if I had this benefit, pass that on to Ms. Williams, get it to me and what I can then do is put, I’ll call it for lack of a better word a shopping list of potential changes and give you some pricing as to how much it costs to do those studies then you tell me which ones you want to do which ones you want to cross off the list. Mr. Mayor: Okay so let’s do this I think what I just heard you say is that if the City of Augusta, if we had the Administrator conduct and the H.R. team conduct a employee survey of desired benefits and that we do that in the next 45 to 60 days and then we provide you with that data you could then take that process and get back to us with a list of, you know, recommendations about how to proceed. That’s what I just heard. Mr. Joyner: Absolutely --- Mr. Mayor: Okay. Mr. Joyner: --- and the issues you bring to my attention if I see something that you requested that I think are particularly problematic, I’ll point that out to you. Mr. Mayor: Okay. All right, so here’s what the Chair would like to do I’m going to ask the Finance Chair and the Mayor Pro Tem if they would modify their motions to incorporate again having the Administrator and H.R. conduct an employee survey of --- 11 Mr. Speaker: (Inaudible). Mr. Mayor: --- I’m coming back to you, request that benefits and that be a part of your motion. All right and then I’m going to recognize the --- Mr. Sias: Can you do that before you do that motion? Mr. Mayor: --- okay. All right --- Mr. Speaker: Is he going to be able to speak first? Mr. Mayor: --- yeah he wants to, all right, the Chair recognizes the Commissioner from th the 4. Mr. Sias: Thank you my point was to be that seeing is that a very few of us up here are long term employees that we actually conduct a professional survey of our employees for the benefits. I’m not saying that our folks are not but we need someone in the retirement business to put that survey together which can have some options and things in there rather than just off the cuff of what we think. That was going to be my point about the survey before you mentioned it but we definitely need to have a good articulate survey by a retirement firm that does that to put those options and questions to our employees. So I would rather not see us an in-house made up survey but a survey coming from a professional organization such as GMEBS. That was my point. Mr. Mayor: Well, you know what, you must be a sage. That’s a stellar idea. And giving that we’re still waiting on the Archer report. They are doing a Compensation Study of the City of Augusta. I can’t imagine why they wouldn’t be qualified to be able to conduct that at the same time. Compensation is not just base salary but it is all of those benefits included when you look at compensation. So, to your point maybe what can happen is the Administrator can engage them in conducting that survey while they’re finishing up the Compensation Study that we’re going to have a workshop on here in the next couple of weeks. Mr. Joyner: If we may if we could get a copy of that conversations too that would help us to formulate these things too. Mr. Mayor: You can’t get it before we get it. Mr. Joyner: I understand. After you’ve gotten it, after you’ve gotten it. Mr. Frantom: I’d like to make a motion that we review the benefits plan. It hadn’t been reviewed in 10 years as well as conduct a professional survey with the employees. Ms. Davis: Second. Mr. Mayor: Utilizing the Archer firm if they’re --- 12 Mr. Frantom: Utilizing the Archer firm. Mr. Mayor: --- (unintelligible) to do it. Okay all right, we’ve got a motion and a second. All right, those in favor. Motion carries unanimously. Mr. Mayor: Okay all right, thank you, Commissioner Sias. Rocky, thank you. Mr. Joyner: Thank you, I appreciate it. Mr. Mayor: Okay all right, we’ve got enough time to address one more matter. I think it’s prudent for us to do it. Often times we have these Pension and Audit Committee meetings and we have stakeholders who attend them. They have a series of questions that come up as a result of the presentations but then they don’t necessarily get an opportunity to speak. So, today we’re going to have an item on the agenda or added to the agenda that we need to give certainly appropriate time to discuss. I’d like for the GMEBS folks to stay to be able to hear this. All right, if the representative from the Fire Department would come forward, I don’t see him, okay, there he is right there. Okay, very good. All right, Michael Tomaszewski, all right, if you’ll approach we’re going to hear a presentation --- Mr. Speaker: Mr. Coleman, could you please distribute the, okay. Mr. Mayor: Okay, Mr. Chairman, Chairman Frantom, you want to hear a presentation. Mayor Pro Tem, you want to hear the presentation first and then we’ll go from there. Mr. Frantom: Absolutely, thank you. Mr. Mayor: Okay, all right, I think everybody has a copy I think. Mr. Tomaszewski: I apologize if there’s not enough copies. There were copies made for each of the committee members but anyone who didn’t get a copy I’ll be more than happy to provide you any and all of the information in the packet. Mr. Mayor: Okay, so you gentlemen actually have a copy for the committee members. Ms. Davis: I’ll get it later. Mr. Mayor: Okay, all right, Ms. Jackson, would you like to have a copy of this? Ms. Jackson: Yes (inaudible). Mr. Mayor: I think that would be appropriate. Okay all right, I’ve got 1:54 --- Mr. Tomaszewki: Yes, sir. 13 Mr. Mayor: --- and we’re going to go to 204, okay? Mr. Tomaszewski: Yes, sir. Mr. Mayor: All right, so that means questions and your presentation. Ms. Bonner, I don’t know if we had an opportunity, do you have a thumb drive by some chance? Mr. Tomaszewski: I turned it in, sir, I was told that it would be put up on the screen. The Clerk: I was trying to get, it’s over here. Mr. Tomaszewski: Okay. Mr. Mayor: All right, so whenever you’re in the chamber, Mr. Tomaszewski, you always follow Ms. Bonner’s lead, always. Mr. Tomaszewski: All right, so thank you very much first of all, Mayor and Commissioners, for allowing me to present today I believe perspective is key when evaluating any issue. I would like to acquaint you with some issues, concerns, intrinsic to public safety that greatly affect our perspective. I will pause for just a moment. So fire service and law enforcement we’ve been working shift work since the time of the Roman Empire. Shift work is key to us providing a blanket of protection to the community 24-hours a day 7-days a week that we do provide. We work ranging from 8 to 48-hours with overtime and other public servants working nights, weekends being on call. We have broad portfolio of responsibilities. We share an even broader portfolio when we combine the services many of which require specialized certification, training, licensing. Just to name a few we have Code Enforcement Inspection, evictions, warrants, fire suppression, SWAT, water rescue. Our training and equipment are expensive. As a community we invest $30-$50,000-dollars in each recruit in testing, training and equipment before ever they serve a day in the line of duty. Retention pays dividends to citizens both in money and service through experience and higher education. Nights, weekends and holidays but the problems we face don’t take those so we don’t either. Coupled with our shift work schedule this simply means time away from home, birthdays missed, festivities missed, Christmas missed, it’s simply part of the parcel of the badge that we wear. Many of our schedules are over 56 hours every week. We serve at a cost. We take pride in the service we provide but we do so at a financial expense not only to the community but a physical and mental cost to ourselves. In 2008 the US Bureau of Labor and Statistics began collecting and creating statistics on government employees. Since including fire and police protection within their statistics by industry, we have not left the bureau’s to ten list of highest rate of illness and injury. Our on the job rate of illness and injury is three to four times that of the combined average for all other workers. Even with the latest training standards and equipment, we perish on the job at a rate of three to more than five times that of the average worker. According the US Bureau of Labor and Statistics the rate of terminal on the job injury rises with age as you can see after 65 it more than doubles. Recent studies have shed light into our increased cancer rates, years of potential life lost. Rate of PTSD which unfortunately rivals the military. Perhaps saddest of all nationwide more than twice as many public safety personnel commit suicide each year as die in the line of duty. Our industry clearly has challenges. As part of a recent Administrative Services committee meeting Director Loeser reported that the 14 Augusta Georgia Stop Loss Policy with Blue Cross of Georgia does not cover retirees at or over the age of 65. Director Loeser further reported that many retirees were transitioned to Augusta’s Medicare Advantage Plan but there’s no mention of a Part B or prescription coverage. GMEBS Plan 1 covers nearly all of Public Safety including many directors and elected officials. The majority of the Public Safety can retire at age 55 with 25 years of service. Those without 25 years of service typically stay on past 55. Many stay on past 55 because they simply can’t afford to retire on the current benefit amount. Within GMEBS Plan 1 our benefit is based upon years of service multiplied by a stipulated percentage. We currently have four different percentages within Plan 1 with the bulk of Public Safety being within the classes that we’ll receive 1.65% at 55 years of age with at least 25 years of service. GMEBS Plan 2 covers a very select group of people from the Augusta Richmond County Planning Commission. According to GMEBS Plan 2 Section 6 the participants themselves did not pay into social security. That means that they may not receive any social security benefit, however, they have had 6.2% higher take home pay than those non- optionally pay into social security. As you can see from looking at the chart there are many groups of people whom can retire at different ages with different years of service. The bulk of Public Safety has the highest years of service requirement at 25 years. Within GMEBS 1 most of us contribute 4% of our salary towards our retirement benefit of 1.65%. Members of GMEBS 2 contribute the same 4% but have an additional benefit of 2.5% multiplied by years of service. As the city’s most at risk employees we have several overall concerns. Parity of the GMEBS Plans and Classes putting an equal percentage into GMEBS and getting an equivalent benefit. Parity of Years of Service required to attain full early retirement, continuing to pay for it and receive commensurate medical benefits during retirement from 55-65 and 65 plus the livability of our retirement at its current benefit amount. We’re asking for two things: that in-depth look be taken by this committee at the concerns I have expressed and number two, that you allow a panel of us within Public Safety to participate in coming up with solutions to these concerns. The remaining slides give reference to the sources sited within this presentation. Within your binder you have a flash drive which contains everything that’s in your binder as well as all of the listed sources and numerous research studies on the topics that I presented today. Thank you very much for your time. I’d be happy to answer any questions that you have. Mr. Mayor: All right, fantastic. I think a couple of things one, with the motion that was just taken by the Pension and Audit Committee it will incorporate many of the things you just talked about so I think we’ve already got a good path forward but I’ll entertain questions. The Chair recognizes the Finance Chairman. Mr. Frantom: Thank you, Mr. Mayor. Tom, thank you for the great presentation and thank you all at Public Safety for what you do for our community. My question is can you explain you all have opportunities that, I found out just a little bit ago ya’ll have opportunities that others don’t have through the PO AB Plan and the Georgia Firefighters Plan. Can you kind of explain, I see that this is a benefit, there’s 57 police and 198 firefighters, can you explain --- Mr. Tomaszewski: You’re talking about the entirely separate state-run plans --- Mr. Frantom: --- right. 15 Mr. Tomaszewski: --- that we contribute separate money from our own pocket to is that - -- Mr. Frantom: That’s correct. Mr. Tomaszewski: --- what you’re referring to? That is entirely independent and entirely paid by us. Mr. Frantom: But that is opportunities that you have that others --- Mr. Tomaszewski: Yes, sir, that is an opportunity yes, sir. Mr. Frantom: --- okay. Mr. Tomaszewski: Like I said, sir, it’s funded entirely by us. Mr. Mayor: Hold on, hold on. Mr. Frantom: I’m just trying to understand it. I was just information. I’m just trying to understand it. My second question is more for the H.R. team. Mr. Mayor: All right, Commissioner, Mr. Chairman, suspend for just a moment. Mr. Perry, would you approach, you’re it now? Okay all right, Mr. Chairman, go ahead. Mr. Frantom: Thank you, Mr. Mayor. My question is there’s a lot of, you know, information about the different multipliers going around. Can you explain so that all these people can understand the multiplier from the old city versus the OAGMEBS dynamic breakpoint kind of so that everybody understands it because I think there’s a lot of people, maybe Donna, I’m just, I think we all need to be on the same page so people understand why they were set up the way they are and where they are currently. Mr. Mayor: I think I see Madam Administrator. Ms. Jackson: I was about to give Kenneth a little bit of an out. He was not around at the time that was passed. Are you well versed in those issues, sir? Mr. Perry: I didn’t bring anything with me. Ms. Jackson: Okay. Mr. Mayor: All right. Ms. Jackson: The Pension Plan representative I think may be able to address that question if we could ask Rocky to please to come on up and address that question he probably would be the best source for that information. Whoever else is required from GMEBS to address it. 16 Mr. Mayor: Okay. Mr. Joyner: You have --- Mr. Mayor: Rocky, can you hold --- Mr. Joyner: --- sorry. Mr. Mayor: --- can you hold for just a moment. Donna, are you able to speak to this issue I mean in full? Ms. Williams: I can speak to the fact that these multipliers arose from various plans that were open and closed at different times during the courses of the previous two governments and then the consolidated government. So, that is the history behind each one of these multipliers is they were associated with a separate plan that existed at that period in time. Those plans are all closed. There is no current plan open except the current GMEBS 1 Plan which is a compilation of the administration of all those different existing plans. The Planning and Zoning Plan, what is called GMEBS 2, was a completely separate plan that the completely separate legal entity which was the Planning and Zoning Board had for their very small pool of employees. They did not pay into social security; that plan was plan was closed in 2006. There are still a handful of active participants in that plan but that plan is simply being administered by GMEBS, by GMA because it now belongs to Augusta. You could not abolish that plan; you have to fulfil your obligations to the people that contributed to that plan during the course of their work history. So that’s the history behind the different classes and the different plans. Mr. Mayor: Okay all right, thank you. Rocky, you want to add anything to that? Mr. Joyner: Just one thing the most confusing plan you have is the split plan with the breakpoint in the middle and that’s not always easy to follow. Mr. Mayor: So in layman’s terms --- Mr. Joyner: In layman’s terms --- Mr. Mayor: --- we’ve got GMEBS 1 or GMEBS 2. Mr. Joyner: --- it’s part of GMEBS 1. It’s one of the old grandfathered pieces of GMEBS 1. You currently only have five people remaining that that formula will apply to. The reason it doesn’t apply to any of the other folks even if they have a maximum in it is because for that breakpoint to end up being larger than your 1.65% plan, you have to have a salary of $166,000 dollars a year because the breakpoint essentially is it says any dollars over $77,000 a year get the 2% dollars. Under $77,000 get 1.25 so it’s effectively for almost all of your employees it’s a 1.25% formula which is why the 1.65 is better. Just a little history on that one, Mr. Mayor, around the state many cities had this in place. They’re trying to move away from it because it really is unwieldy and doesn’t work very well. 17 Mr. Mayor: All right. Mr. Chairman, any other questions? Mr. Frantom: Not related to this. I have one more (unintelligible) to close. Mr. Mayor: All right. I’m ready to close. All right Mr. Tomaszewski --- Mr. Tomaszewski: Yes, sir. Mr. Mayor: --- given what you’ve just heard and your requests do you have any final comments? Mr. Tomaszewski: Pertaining to what the gentleman from GMA just said, sir? Mr. Mayor: Well not only that but our action that we’re going to be taking to address the issues --- Mr. Tomaszewski: I think it’s a very encouraging action, it sounds like you already plan on doing exactly what we asked. We would still like to have a group of (inaudible) stakeholders within Public Safety hopefully meet and begin a dialog on this. We’re not asking specifically for the city to be the only person with the burden on this. We are open to increasing our contributions we’re open to all ideas. We started work on this approximately a year ago with all of the Public Safety stakeholders and came up with a list of what ultimately were the concerns that came into being in this presentation and we’re just looking forward to working with you on a resolution to the concerns. Mr. Mayor: Okay, very good. Mr. Frantom: Motion to receive as information. Ms. Davis: Second. Mr. Mayor: We’ve got a motion and a second to receive as information. All right, the Chair recognizes Administrator Jackson. Ms. Jackson: No, I was just voting. Mr. Mayor: Oh, okay. Motion carries unanimously. Mr. Mayor: All right, the Chair recognizes the Chairman of Finance. Mr. Frantom: Thank you, Mr. Mayor. Last time we talked about or last two, well, I guess it’s two times, we asked about a financial policy template. Could we request to have that at our next meeting or can we kind of start that dialogue to try to get that accomplished? 18 Mr. Mayor: I think pursuant to the last Pension and Audit Committee meeting I think Director Williams will remember this, the actuarial who was there presenting at the time talked about a template particularly with regards to how we should move forward in having a financial policy for the city. I think it’s time for us to go ahead and get that moving. That was the action item and so in the next 45 to 60 days let’s make sure we get that and in our November meeting let’s be prepared to talk about that. Mr. Frantom: Do we need a motion for that? Mr. Mayor: Yeah, I do. Mr. Frantom: Motion to discuss the financial policy template at the next Pension Committee meeting. Mr. Mayor: Okay. Ms. Davis: Second. Mr. Mayor: All right, all those in favor. All right, very good. Motion carries unanimously. th Mr. Mayor: The Chair recognizes the Commissioner from the 4. Mr. Sias: Yes, thank you, sir. Maybe this question is for Ms. Jackson but also the committee as a whole. We’ve kind of put the steps in place to start for, to examine this and to do the employee survey. But I’m not sure maybe I missed it did we put, do we have a timeline on this because one of the things that disturbs me is we have things that just hang and hang and hang so I really want us to put a timeline on this piece and get with these other folks. I will be disturbed if we still are looking for that and it’s Valentine’s Day. Mr. Mayor: We said 60 days. Mr. Sias: Sixty, are you sure? Mr. Mayor: Yeah. Mr. Sias: Okay. Mr. Mayor: We indicated 60 days. Administrator Jackson, is that sufficient enough time to work with the group? Ms. Jackson: I believe so. th Mr. Mayor: Okay, the Chair recognizes the Commissioner from the 6. 19 Mr. Hasan: Thank you, Mr. Mayor. I just wanted to make some, not making any but just make sure to Madam Administrator that even though you asked about the Archer group and you said they’re going to do things simultaneously that that does not push back the Compensation Study back 60 days that’s talking about the study here for this pension plan. Ms. Jackson: Absolutely the case, sir. Mr. Hasan: All right, thank you. Mr. Mayor: All right, there be no further business, this meeting is adjourned. \[MEETING ADJOURNED\] Lena Bonner Clerk of Commission 20