HomeMy WebLinkAboutPension & Audit Committee January 16, 2018
PENSION & AUDIT COMMITTEE COMMISSION CHAMBER
January 16, 2018
PRESENT: Hons. Hardie Davis, Jr., Mayor; Mary Davis, Mayor Pro Tem; Sean Frantom,
Finance Committee Chairman; Janice Jackson, Administrator; Donna Williams, Finance
Department Director; Sammie Sias, Ben Hasan, D. Williams, Commissioners; Lena Bonner, Clerk
of Commission.
The Mayor called the meeting to order.
1. Receive as information the December 31, 2017 investment reports for the 1945 and
1949 pension plans.
Ms. Heather Zeigler from Morgan Stanley made a presentation regarding the
performance of the above two plans for 2017.
Ms. Williams: I motion to receive as information.
Mr. Frantom: Second.
Motion carries unanimously.
2. Receive as information the amount of COLA for the 1945 and 1949 plan according to
plan document in the amount published by the Bureau of Labor and Statistics increase
will be effective on March 1, 2018 benefit checks.
Ms. Williams: The plan document for the 1945 and 1949 plan dictates that the annual
COLA which is effective on March 1 is to mirror the amount published by the Bureau of Labor
and Statistics for the South Region as of December of each year. Those numbers were published
last Friday and that amount is 1.8% so that will be the increase to the level of benefits on those
two plans that will be effective March 1.
Ms. Davis: So move to receive as information.
Mr. Frantom: Second.
Motion carries unanimously.
3. Discuss formalizing financial policy statement for pension plan and other post-
employment benefits.
Mr. Frantom: Any time we receive things up here and try to move forward on it I have
heartburn and concerns about. I hope these documents however we go that we look to possibly
coming back with another meeting either through Pension or Finance to implement these because
all of the colleagues aren’t here as well and that we could move toward that way once we’ve
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discussed the documents. Can you also give me the history of these documents, who put them
together and who is involved with them?
Mr. Mayor: I think we started the discussion back in quarter three about having a series of
financial policies that allow us to put the City on a stronger footing in terms of having these
documents that allow us to guide how we make decisions. We will review it today and then have
more discussion moving forward.
Ms. Williams: These documents are a formalization of what Augusta has been doing in
these two areas related to the funding for the three pension plans that are currently two closed and
one open, which is the GMEBS plan, and other post-employment benefits which is mainly the
medical insurance for your retirees. On the pension funding policy Augusta has always made the
actuarily computed annual required contribution each year and that is what is stated in this policy.
In years where there is not a significant difference between those two amounts and the GMEBS
plan, in the GMEBS plan document we make an amount that is more than the required annual
contribution and in the other two plans that is pretty much upon funding availability for excess
contributions to the plan. This policy states that Augusta will always make the required
contribution that is actuarily computed and will strive to exceed that amount by whatever funding
levels are available to Augusta during that budget year. For the OPEB policy we will continue to
use a funding mechanism which about 85 to 90% of your governments are using that is called pay
as you go which means that each year Augusta makes the required amount of payment to fund that
current year’s obligations for those liabilities.
Mr. Sias: Is it the intention of the pension committee to approve these today?
Mr. Mayor: No, sir, absolutely not. This is our first look at them and our goal is to start
the discussion around this and item number four will probably ultimately be included in this.
Mr. Sias: I appreciate that. It is always good to have policy but it’s always better and
greater if we’ve had some in-depth analysis and understanding and discussion on that.
Ms. Davis: I move we receive this as information.
Mr. Frantom: Second.
Mr. Mayor: Without objection, Ms. Bonner.
Mr. Sias: Before we get started with Mr. Joyner’s presentation I would hope it is the intent
of the Pension Committee and the Commission as a whole that we move in a very safe and
expeditious manner to really examine and see the issues that are facing our employees, the value
of these plans and how it will best benefit those who have invested in our plans. In the past I
believe it has taken way too long to make any adjustments and changes and I would like to see this
commission along with the Pension Committee make some in-depth analysis of these issues and
come up with a decision.
4. Presentation by Mr. Rocky Joyner concerning GMEBS plan benefit options.
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Ms. Jackson: Per recent discussions about benefit levels and possible adjustments to
those primarily at the request of our public safety agencies we asked Mr. Joyner to work with us
to develop some options for presentation. He is presenting several options for consideration. We
view this as a starting point for our discussion knowing that there are a lot of factors and variables
that would have to be considered in order to make the most prudent decision. He will lay the
options out today and we will have further discussion at our next meeting.
Mr. Joyner: Page two has a summary of the most recent actuarial valuations for the
Augusta retirement system. The contribution rate is 4.63% of pay. At 4.63% of pay for a city plan
that’s relatively low. The average GMEBS contribution is around 12.5% so your contribution rate
is lower than the average and that is because your funding percentage is almost 92%. You have a
well-funded pension plan. You have done exceedingly well over the last ten years and the plan
continues to perform well and move forward. On page three you see a history of the plan. After
the economic crash of 2008 the contribution rate got up to almost as high as 7% and it’s come
down gradually since then to the 4.63. All the numbers and indicators are very strong. We’ve had
a very strong stock market recently and the investment market has been very kind to us. Most
people are anticipating some sort of correction sometime in the near future and in the GMEBS
funding policy we do not take advantage of all of the gains up front. We keep a reserve so that
when the market does correct we have a way to mitigate the balance and keep it going forward
without a large disruption to the contribution rate or the funding position. All of the safeguards
are in place and we think we are in very good shape. I’m here today to consider plan design
changes and discuss those possible changes. In Augusta you have both defined benefit and defined
contribution plans. The GMEBS is a defined benefit plan and you offer a 457 plan which is a
defined contribution plan which is paid for by the employees. These work well together to give
the employees a pretty good retirement at age 65. The purpose of looking at plan design is to
figure out where you want to head, what are the problems in your current plan, what are the
structural defects that are preventing what you’d like to see happen on the retirement side, are there
cost issues, are these personnel and management objectives that might be better served with a plan
design change. All these are part of the discussion in making plan design changes. Then you must
balance taxpayer concerns, employer concerns and employee concerns. Defined benefit plans are
broadly concerned with providing security of benefit to the employee through their retirement
years. Defined contribution plans are concerned with building wealth accumulation through the
working years so the employee will have a pool of money to draw from after they retire. The
employer carries most of the risk in a defined benefit plan in the fact that people have their benefit
until they pass away and their spouse passes away. If they live longer than expected, the City
picks up the cost. Risk includes wage inflation and the City is on the hook for the increasing
contribution. If the investment returns are good then that goes to the City’s good because the
contribution rate comes down. When the investment return is poor, then the City is on the hook
for making up the difference over the long term and making sure the employee is safeguarded in
their benefit structure. Defined contribution plans are the flipside. They are like a savings account
so when the market goes up or down it hits directly to the account right on the backs of the
particular employee. Defined benefit plans are sort of like an insurance policy for retirement
benefits that are collectively managed and hold together collectively or holistically as opposed to
a defined contribution plan which are individually managed for each person and the risk is much
greater for an individual person.
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Mr. Hasan: What constitutes us being in good shape?
Mr. Joyner: There are two elements of being in good shape and they have to work together.
One is what’s your raw funded ratio at a point in time. Your funded ratio right now is about 92%.
The average around the country is about 76% so when you compare yourself to your peers around
the country, you’re much better funded than the average plan around the country. Even in GMEBS
the average funded ratio is about 86 to 87% so you’re a little better than your GMEBS compatriots
and GMEBS is one of the better funded systems in the whole nation. Secondly and perhaps more
important than the raw funded ratio, is the fact that this City has a policy of making its
contributions. You are committed to funding this plan appropriately and periodically to make sure
the money is there in the plan so that when people retire they can have safeguards. I’ll give you
an example. I’m meeting tomorrow with a plan that unfortunately for the last 30 years have
decided to underfund their plan intentionally. They’re going to be out of money in about three
years. I don’t know what they’re going to do. I’m meeting with their representatives in Congress
tomorrow to see what might come up with it but that is a situation you never want to be in. You’re
well funded on an absolute and relative basis and have policies in place to make sure those funding
positions stay there.
Mr. Sias: In terms of market corrections and downturns, does the employee’s contribution
change at all?
Mr. Joyner: In your plan the way it’s structured the contribution will not change.
Mr. Sias: In the last 20 years have there been greater disruptions than 10 to 15%?
Mr. Joyner: There have been two significant investment events that have occurred. One
was in 2001 with the tech bubble collapse where the market lost double-digit returns and the other
was in 2008 when the housing market collapsed and lost almost 30%. Over the last 30 years the
average return with GMEBS has been about 9% per year. The overall performance has been quite
strong over the long period. Your current plan is the plan that covers most of your employees in
the City. The multipliers are 1.65% of pay. What that means is that every year a person works
they earn 1.65%. It accumulates over their working career and at retirement it gets multiplied by
their average salary at retirement to create a monthly benefit that they get for the rest of their life.
The normal retirement age is 65, however, for longer service employees that have worked 25 years
or more, for public safety they can retire as early as 55 and general employees can retire as early
as 62 without a further reduction in their benefits. The employees do pay 4% of pay into the plan.
This is on a pre-tax basis so they get some tax advantage from paying the 4%. The 4% is fixed.
The market would not affect the 4%. The only thing that can affect the 4% is whether or not the
Board of Commissioners adopt a change in the contribution rate for the employees. You do have
a cost of living allowance in the plan which is 1 ½% per year. Vesting is after five years so if a
person comes in and works for the City of Augusta and works for five years and they quit, they
are guaranteed a benefit at retirement when they turn 65 of some amount. We did an average for
a 30-year guy. This is somebody who is hired at 35 and works to 65. That person would get about
46% of pay from this plan at retirement. From Social Security at 65 that person because of the
weighed structure of the City is expected to get about 36% of pay. If you add them together you
get 82% of pay. That is a very solid benefit for people once they hit 65 when they are retiring
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because they are also covered by Medicare so much of their health insurance is covered and goes
forward in that fashion. Some of the older plans were not tied in to Social Security and so their
benefits are all over the map from there. You now have things in your plan that allow for instance
in public safety retirement at age 55 if they have 25 years. The plan allows that but it does not
encourage that. It does not give additional means for people to retire at 55 because if they retire
at 55 with the service you’re going to end up getting say 46% of pay. They will get that until they
turn 65 at which time Social Security will kick in and bump them up. But the question is how do
they make it from 55 to 65 on the lower benefit amount. For today we have a couple of options
that we’ve put together just for discussion purposes as requested from the City in discussion with
the City Administrator. They are increasing the benefit level to 2%, going from 1.65 to 2%, and
doing this only for service earned after the effective date of the change in benefit. What this does
it does not change any of your unfunded liability from 92%. What it does change is all future
accruals would go up to a higher level and this would cost about $1.1 million dollars in additional
contributions to the plan. At this point I’m telling you a total contribution amount, I’m not telling
you where the contributions come from. If for example the City said we could come up with a
certain amount of money but the employees would have to come up with another piece of it to
make it work, then you could split the cost between employees and the City. I’m not here to tell
you how to split the cost or what to do. I’m just giving you the raw numbers of what the cost of
the plan would do. The second way of doing it would be to increase it to a 2% multiplier for all
service ever earned under the plan. This is much more costly because you’re giving prior service
for everything that happened prior to the date of the change. Here your unfunded liability will go
from 92% down to around 82% but it does lower the unfunded significantly. That one would cost
about $2.3 million dollars or about 3.25% of pay. That’s a total cost. It doesn’t say who is going
to pay for that cost or where it comes from. A third option on this particular page I will tell you
that this particular option has issues. It is from a plan standpoint it is cost neutral because what
you’re doing is you give the employee the option to increase their benefit prior to 65 and it would
be decreased when Social Security kicks in so their whole benefit over their whole retirement
career is about level. This is called a Social Security level income option. It is not well received
by employees. It is not well understood by employees. It is more difficult to administer, it has
more chances for error. It is used in some plans that have very, very robust administrative facilities
and very strong educational requirements for their employees. But it is here to show you the range
of options from zero cost up to 3.2% of pay that are there leaving the basic structure of the plan in
place and adding an extra piece. Page 10 summarizes the two options. You can see that the
funding percentage does not change when we only do future benefits. It does lower it to almost
82% if we do any retro. The cost would go from 4.63% of pay to either 5.79 or 7.88. To assure
some of the commissioners and for yourselves and us, we also did some projections if these things
were in place. What happens is the increase in the unfunded is paid for over time. It’s paid for an
amortization period of 20 years so that as you walk through the life of the plan you would then
approach 100% funding again in about 20 years’ time. The cost itself stays fairly level and we’re
anticipating it to go forward.
Mr. Mayor: Go back to Slide 10 and can you articulate that again for the audience.
Mr. Joyner: The current recommended contribution is about $4.5 million dollars. It’s
4.63% of pay and your funding level is 91.9%. If you change the 1.65% multiplier to 2% and do
it only going forward, only for service earned after a date then the contribution will increase from
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4.5 to $5.7 million dollars. The percent of pay will go from 4.63 to 5.79 but your funding
percentage does not change. That’s because you did not affect anything of the accrued benefits.
It only affected future benefits and they are paid as they are earned in the system. That’s where
all of the costs of that one comes from is in the future. There’s nothing that affects the past. If
however you’re to give the 2% retroactively back to the beginning of time on all service, the cost
would go an additional $2 million dollars up to $7.7 million dollars which is 7.88% of pay and a
funding ratio would drop to about 82%. It drops temporarily because we are aware on the right
hand column this is a 20-year amortization of the additional piece of the unfunded, you’re paying
it off over time so over that 20-year period your funding ratio will go back up to 90 plus percent
over time and eventually approach 100%.
Mr. Mayor: And actuarily have you identified where that mid-point would be so assuming
we adopted that 20 years out over that amortization schedule does it happen in year 12, 17? When
does that happen?
Mr. Joyner: Oh, to get back to 90%?
Mr. Mayor: That’s correct.
Mr. Joyner: It takes the 20 years to get back. I will tell you that at 82% funded and the
commitment the City has to pay its contributions, I would still say to you this is still a very well-
funded program mainly because you have the full faith and resources and backing of the City to
fund the plan and the City has shown historically you will take care of business as opposed to other
entities around the county who have chosen not to take care of business and find themselves in big
trouble. It’s still better than the average 76% around the country.
Mr. Hasan: When he was talking about public safety and retiring at age 55, did he address
the issue about how we could shore up that period between 55 and 65 if we wanted to take on
public safety and give them a little more security between that time?
Mr. Mayor: I don’t think he said what we should do to address that. That’s still not
answered at this point. We’ll have to work on that.
Mr. Joyner: In addition to those options I have another way of attacking this that I think
directly impacts your question about that 55 to 65 period. Let’s move to page 15.
Mr. Sias: Before we move to that, let’s go back to page eight and nine. You clearly
identified the issues we’re concerned with. I applaud the simplicity of that part of the presentation
and moving over to page nine, as a former military member the military had for years a plan of
2.5% for each year served and at 20 years you earn 50% of your base salary. About 15 years ago
they dropped it to 35% based on cost. When we’re talking about future service to all service, many
financial plans including the military survivor benefit plan had a buy-in if you wanted to come
back and retain that service. In these options that are available, can you get some buy-in numbers
for us as well on that or have you already beaten us to the punch on that?
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Mr. Joyner: We haven’t beaten you to the punch on it but we did discuss it. Between one
and two there are a multitude of options you could go through. One would be like you just
described offering, the City would pick up the future service and if you want to buy your past
service the employee would have to pay for the past service. We’d have to work up some numbers
for that and that would be very doable. The other option would be to say something as follows.
Instead of buying all past service, maybe we buy ten years, 20 years, whatever number fits the
budget we’re trying to accomplish in trying to get to the cost of, you could do something like that.
Mr. Sias: And if you consider that buy back then would the number of years have to be
the same for all employees or could employees have different options?
Mr. Joyner: The answer would be that it would be an individual choice. So if you had
someone working for you for five years, he wants to buy five years of service, he could do it. If
someone was working 20 years, he wouldn’t want to buy the whole 20 because it would be too
expensive, maybe he could buy ten. So you do have some flexibility there as to how you structure
that. That would take some legal work and some extra stuff but the concept is very doable.
Mr. Sias: Back on page eight where you said 100% investing at five years, do you think
that should be higher or is that a good point to say you are fully vested?
Mr. Joyner: Statewide for GMEBS it is about half and half. Half about 5 years and half
about 10 years. The private sector is at five years by ERISA by law so part of it is where are you
competing to get your employees from. If it is important to take your employees from the private
sector, you might want to keep the five. If you’re not competing with the private sector, maybe
the ten is okay. For public safety five or ten makes very, very little difference as far as cost goes.
Why? Because in the public safety arena police officers and firefighters, once they’re hired on
and last a couple of three years, it’s a career to them and they stay on the job for a long time so the
five and ten makes very little difference.
Mr. Mayor: We are in fact competing against the private sector and there are so many
options out there.
Mr. Guilfoyle: We have to figure out how to right size the ship to where it is fair and
equitable for all.
Mr. Joyner: If you did what we talked about earlier and increased the multiplier from 1.65
to 2%, that 2% is payable for life. When they reach 65 they get a bump up in benefits. What a
significant number of entities have done is instead of making a benefit for life of an increase they
do a bridge benefit. This benefit is payable particularly for public safety from normal retirement
until Social Security kicks in. When that kicks in the supplemental benefit goes away and it drops
back to their base benefit plus Social Security. There are lots of ways to do this formula. For your
situation here I could be wrong but I’m under the impression that you’re more concerned with
keeping the benefit more level over the retirement career than just giving them an extra stipend to
buy health insurance. So from age 55 to 65 the multiplier would be 2.65% of pay instead of 1.65%
of pay and at 65 it would drop back down to 1.65% of pay. The idea being for that ten year period
when they’re shortchanged and can’t retire they get an extra bump up that gets paid and when
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Social Security kicks in at 65, it drops back down to the regular benefit which we’ve shown earlier
is actually a pretty good benefit when you combine Social Security with it.
Mr. Mayor: Can you repeat that?
Mr. Joyner: The structure of the benefit would be if a police officer or firefighter retires at
55, you calculate their base benefit of 1.65 and in addition to that you calculate 1% times their
service times their salary and add that as a supplemental benefit that’s payable from 55 until they
turn 65 and Social Security kicks in. When Social Security kicks in the supplemental benefit goes
away because Social Security will have started.
Mr. Hasan: What if we went up to the future service 2% or the all service 2%, what happens
then?
Mr. Joyner: If you did that, let’s take a person who’s got 30 years of service. He would
get 2% times 30 years, roughly 60% of pay. He would be paid 60% of pay his whole career. When
65 kicks in he gets an additional 36% of the Social Security as his benefit for (inaudible) 60 to
96% of pay and he’d be getting a windfall after Social Security.
Mr. Hasan: I was really talking about the law enforcement personnel. Once they’re doing
2% whether we were doing future service or full service and we went to the 2% and you just
mentioned that you would go to 2.65 so I’m asking about that, that window there, so at that point
are we just going to .65?
Mr. Joyner: We could. At that point, my point is whatever the base is, 1.75, 1.65, 2,
whatever the base is, if you’re then trying to give a supplemental piece to kick it extra to Social
Security, then you’d make that work. In the calculations we did, go from 1.65 to 2.65 for this first
period, it’s not, it doesn’t get you up to 80% of pay but it gets you a whole lot higher than what
you are now. So you have some people that will be able to retire and some people that won’t.
Now if you increase the base from 1.75 up to 2 and then maybe go from 2 to 2.65 for that extra
piece then what will happen is your base cost will be more but your supplemental will be less. So
at this point it becomes an algebra problem trying to mix and match to get the cost what you want
it to be. Our quick and dirty estimate on the bridge benefit is that it would cost about a million
dollars a year extra, about 1.1% of pay, and it pays 2.65 for the ten-year period instead of 1.65 for
the ten-year period. If you then tacked on the extra 2% for that same period, the $1 million for the
bridge would go down but you’d have that extra $1, $2 or $3 million dollars from going to the 2%
you’d have to add it to the cost somewhere.
Mr. Mayor: Our goal today is to communicate/host the December conversation about how
we have a series of options to try to address this issue. We don’t have enough data to vote on
anything today. What we will do with all of the math that’s being discussed we’re going to ask
Rocky and his team to put together a series of models that we will then get back to us of what the
cost to you is, what the cost to the City would be based on a series of models. We think that’s the
just thing to do. We’ll move expeditiously to put those models together and then we’ll come back
on short order. We want to make sure that the plan and process that we have remains solvent for
future generations of Augustans. Number two, that we address the concerns that you have raised
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with regards to having an appropriate benefit for retirement that does not diminish your overall
quality of living as it relates to healthcare as well. That’s where we want to be and those are the
things that we will use as our guiding principles moving forward.
Mr. Sias: If we’re looking at a model that also has public safety with a mandatory
retirement at 55 and the benefit to carry that whether it’s a 2.5 or whatever but absolutely a
minimum of 2.5. 55 is about that age and that’s also was the military age. Let’s put in one of
those models as an option a mandatory retirement at 55 for public safety only. That’s extremely
important to us and to public safety also.
Mr. Guilfoyle: It should be amount of years served, not just the end time. One of the
questions, Rocky, that you’re going to have to be considerate of is that I was on the Pension
Committee for the last two, four years to be truthful and we had a ’45 plan and we never anticipated
when that plan originally came out in the 60s, 70s that we have some of the people that’s still on
that pension, receiving pension, living 70, 80 years old. Their life expectancy is not that good.
You have to take that into consideration. You also have to realize that they are willing to contribute
now while they’re actively employed to try to help build up their retirement. So I didn’t know if
you was aware of those items and we’ll see where it goes and I’ll look forward to your next
presentation.
Mr. Joyner: We did not take into account in this presentation today additional employee
contributions other than 4%. We know they can exist. That’s why we gave total numbers instead
of individual numbers so you could take, for example, if you did the 2%, the 3 and a quarter percent
increase in cost and you wanted to split it one and a half city and 1.75 employee or one employee
and two and a quarter city, whatever you want to split, you could do that. You have the total
numbers and you have to figure out how you want to do it. The second thing is when we do the
mortality expectations we study GMEBS as a whole, we look at public safety separately, we do
this every five years. There is a major study that has been promised out in 2018 from actuaries
that would include public safety which would give us a newer and better more current handle on
public safety mortality. We are hoping this will be out this summer. We haven’t seen it yet.
Mr. Guilfoyle: I’m going to respond to Rocky as far as the employees’ contribution. That’s
always been there in the beginning of the conversations. They are willing to contribute. They
realize that; they don’t want to put the burden on the back of the taxpayers but they want to make
sure that they’re protected once they finish serving the City. Thank you, Mr. Mayor.
Mr. Mayor: Rocky, I think you have three more slides or are we done?
Mr. Joyner: We talked about some additional models. What I would like to do before I
leave here today if I could, let me ask the question this way. Do you want me to come up with
three or four additional models or I heard some input over here that no less than a 2 1/2% multiplier
for the period before Social Security kicks in, that’s what I heard.
Mr. Sias: That was for public safety, yes, and 2% for the other employees.
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Mr. Joyner: I’m more than happy to go back to the office and put together a shopping list
of four or five models, send it back over to you guys and take a look at it and see what you think
and then we could try cranking on that and then perhaps be ready for, how often do you meet?
Mr. Mayor: Our posture right now is the following. We do want to have this information
and be able to properly vet it here in the Pension Committee. What I’d like to see happen if we
can get concurrence for this is that if you’ll put together a series of models and today being January
16 if you’ll communicate the same to Ms. Jackson by January 26 -- let’s just do this, we’ll suspend
for just a moment, Rocky, and I want to hear from a representative or two from our public safety
folks.
Mr. Michael Tomaszewski: My name is Michael Tomaszewski and I work for the Fire
Department in Augusta.
Mr. Mayor: And we also have –
Mr. Probus: Bill Probus, Colonel with the Marshal’s Office.
Mr. Tomaszewski: First we would like to thank the Commission, thank Rocky for taking
the time to do this presentation to address this issue. We and our families appreciate it. We’ve
heard a lot about public safety and I’m concerned for myself and for public safety. We want to
see this change made for all employees. One of the things we talked about as a group is to hire the
best, retain the best and retire the best. On page nine talking about getting back to the 90%
solvency on the plan and I believe, correct me if I’m wrong, that assumes a 7% gain, is that correct?
Mr. Joyner: Two and three quarters.
Mr. Tomaszewski: Okay and I recall at the beginning you said we have since the inception
of this plan the gain has been at 9%, is that, so we’ve been blessed. The plan has prospered greater
than the percentage that was used in that calculation. I’m very pleased to hear the specific tasking
and a date that moves this only a short term into the future. I believe that we’re primarily interested
in Option 2 and we are conscious of the additional expense. I haven’t heard a single person say
anything against bearing or sharing, coming to some agreement on additional expense affecting
employees. Obviously if we’re asking for more we need to be willing to put in more.
Mr. Probus: I do want to echo my colleague’s comments and I want to thank all of you on
the Pension Committee, on the Finance Committee. You’ve been here for us, we’ve met with you
individually, we’ve met with you collectively and I just want to commend you for everything
you’ve done. We are primarily interested in the Option 2 but we want it for all employees. Even
back in September you mentioned incentivizing, incentivizing us to leave, to retire our service by
sometime in that 55 to 65 gap just for those types of reasons. Just as a point too, that person that
goes out at 2% with 30 years, I know that’s 60% and I know at 65 it becomes another 36% from
Social Security but I have to say in a very non-smart way so 96%. Bottom line, those folks
primarily public safety that sat here that gave you and have given me the best years of their life.
So why not get as much as they can get. Why not attain as much benefit as you can possibly give
them. You already know we live less because of the lives that we’ve chosen to live for you in
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public safety. I appreciate the ability to dialogue and all the folks in our committee very much
appreciate this open dialogue and we hope that it does continue to a safe and very expeditious end.
Mr. Mayor: I do want to share with you that our goal from day one in having this
conversation has been predicated on all employees, not just public safety, so we share that
sentiment as well. I think we want to look at how we can provide the best value for all of our
employees who do an outstanding job. It’s because of the great work that you do that allows us to
what we do and you are to be commended for that.
Mr. Hasan: I want to make sure on Option 2 was that the future service one that you were
speaking about when you were recommending it? I’m not saying that’s what we’re going with but
I want to make sure I understood you correctly.
Mr. Probus: Option 2 would be proactive.
Mr. Tomaszewski: For all service.
Mr. Hasan: We definitely appreciate you all standing on the forefront. It is a blessing to
this organization as a whole when you stand before us and not only just thinking about yourself
you think about all the employees and so that’s great and good to know. You’ve always expressed
that from day one and so I look forward to Mr. Rocky bringing all the information back so we can
an informed decision. For me I think in bringing back one of those models, those models does not
include the 1.65 because we definitely want to go above that. We definitely appreciate your work
and having the courage to look us in the face and saying we need to do some things and as you can
see, this government is taking it very seriously. Thank you very much.
Mr. Mayor: We’ll take the comments we heard from our employees and the
commissioners, sanitize that and put a single list together and then we’ll send that to you, Rocky,
to give direction. I do want to take a moment to recognize Randy Briskin from GMA who is their
retirement services rep. Do you want to make any comments about what you’ve heard today?
Mr. Briskin: (inaudible) we’ll do whatever (inaudible).
Mr. Mayor: Let’s go back to our timeline that we’re tracking from a modeling standpoint
which will include the things that you’ve heard but we’ll put it in a single document and transmit
it. We’ll transmit that document to Rocky on tomorrow and then from that time the clock will
start with an expectation that you’ll respond back to us by January 30. And that is to the Pension
Committee. We will be getting back the model of what it would potentially cost for both employer
and employee. Obviously there will be more conversation and discussion with regards to that.
Mr. Sias: I would request, Mr. Mayor, that when those models come back, not that we’re
on the Pension Committee and not that we’re going to interfere with the Pension Committee, but
I’d just love to also get a copy of that at that time.
Mr. Mayor: We’ll invite you to the meeting.
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Mr. Frantom: Is there a timeframe of when we get the models back when we’re going to
meet after that I guess is my question?
Mr. Mayor: I think it would appropriate to take a few days to review that and vet that.
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Mr. Frantom: We’ve got commission on February 20. How about then?
Mr. Mayor: All right. That would be fine.
Mr. Frantom: Is that enough time for Rocky, Mayor?
Mr. Joyner: (inaudible).
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Mr. Mayor: So it will be on the transmittal on tomorrow. The 30 for modeling
information and data sent back to us and February 20 for our next scheduled meeting.
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Mr. Joyner: That’s when we have the 20 scheduled for us already.
Mr. Frantom: Do I need to make a motion to that effect?
Mr. Mayor: That’s fine.
Mr. Frantom: I’d like to make a motion that we send the email models to Rocky to be back
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by January 30 and our next Pension Committee meeting is February 20.
Ms. Williams: Second.
Ms. Davis out.
Motion carries 4-0.
ADJOURNMENT: There being no further business, the meeting was adjourned.
Lena J. Bonner
Clerk of Commission
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