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HomeMy WebLinkAboutPension & Audit Committee March 6, 2018 PENSION & AUDIT COMMISSION CHAMBER COMMITTEE March 6, 2018 1:00 P.M. PRESENT: Hons. Hardie Davis, Jr., Mayor; Sean Frantom, Finance Committee Chairman; Janice Jackson, Administrator; Donna Williams, Finance Department Director, members; Smith, Hasan, D. Williams, Fennoy, M. Williams, Sias, Guilfoyle and Jefferson, Commissioners; Jody Smitherman, Sr. Staff Attorney; Lena Bonner, Clerk of Commission. ABSENT: Hon. Mary Davis, Mayor Pro Tem. Mr. Mayor: Good afternoon. We’re going to convene the pension meeting, call the meeting to order at this time. The Chair recognizes Madam Administrator. Ms. Jackson: On the screen you’ve got decision points for the plan amendments to the plan, GMEBS 2008 Plan. Per our last meeting as part of the presentation, Rocky Joyner gave us some timetables that we would have to meet in order to effect the changes. What we have listed on the screen is a list of decisions that have to be made first by the Pension Committee and ratified by the Commission. We have an item on the agenda today, a (inaudible) item that would allow us to discuss that during the regular meeting today if it’s the desire of the board. To go through those lists of changes, number one, we have to change our multiplier from the current 1.65 to 2% as proposed, you see in the second column. As of last meeting, you all agreed to pursue this and asked us to look at options so that’s decision point number one. Decision point number two addressing a target date for the amendment. During the last meeting we discussed making the date effective July 1 which is to say anybody retiring after that time would qualify for the new multiplier, the new increased multiplier and that item three would be related to how much contributions we would have to make, how much of an increase in contributions we as the organization as well as the employee would have to make in order to make the change in the multiplier work financially for us. We’ve got some data here as part of our packet. I call your attention to it now and we can discuss at any level of detail that you want but if you go into the package you have, go to page four of that. There is a spread sheet which shows how we would distribute the cost among the various funds if we were to implement this. Looking at options, either a 50/50 split between our employees and the employer which is the column represented by the 1.63 employee, 1.63 employer. That’s the first column. We’ve got a few other options in there and then we’ve got the last column which is what our survey was based upon, having the employee contribute a 2.25% increase in their premiums as well as the employer contributing 1% additional. If you look at that last column you’ll see how that breaks down under that recommended option. Jody is placing that up on the screen right now. Mr. Mayor: I hope that was not March in red and black. I hope. Ms. Jackson: In that last column if we were to assume that the employee contributes an additional 2.25% and the employer contributes an additional 1%, the total, those first three are, have to be supported through our regular budget as opposed to any of the special funds. That $605,000 basically would be our annual cost to do that and you see General Fund breaks down at $310,000, Probation Services only $7,000, Law Enforcement Fund $288,000. The rest of these 1 funds are either enterprise or self-supportive or special revenue funds. You see the cost by fund that second column identifies exactly what those are. Bottom line they are the cost for general fund, excuse me, the first group which is supported by the General Fund is $605,000. The next group a total if you add it all together it’s $986,000 or almost a million dollars for the total cost to the organization of implementing these upgraded multiplier changes. So I wanted you to see those numbers as you make the decision about what the split is going to be between employer and employee. Fourth, pick an effective date, go back to the first page of your handout, picking an effective date of the new employee contributions, picking an effective date of the new multiplier and the final question is are any prospective retirees required to contribute to the plan for any minimum amount of time at the new rate in order to retire at the new rate? And so our recommendation there is no. So in summary that first page tries to capture all of the decisions that we’ll need to make as we move forward. Mr. Mayor: All right, Ms. Jackson, that’s fantastic. So to our committee members and Commissioner Davis is not with us today but we do have a quorum of our Pension Committee. All right, Chair recognizes our Finance Committee Chairman. Mr. Frantom: Thank you, Mr. Mayor. Can you tell me what the staff recommendation is? Ms. Jackson: Yes. What you see in the proposed column is essentially our recommendations. Mr. Frantom: Is there one that you’re recommending? Oh, I’m sorry. The one on the far right? Ms. Jackson: The proposed column in the middle actually. Mr. Mayor: All right, so if we go back to this primary sheet, the proposal is here and there were some extra copies that were given out, what you see from a proposal standpoint to our Chairman is consistent with as Ms. Jackson indicated if you then go to the spread sheet, it is the last column in the spread sheet. Okay? That will be the service plan changes. Mr. Frantom: I’d like to make a motion that we move forward on staff recommendation as well as that the mandatory that HR benefits are briefed which is currently being done. Mr. Mayor: All right. Second. We’ve got a motion and a second. Okay. All right, very th good. The Chair recognizes the commissioner from the 6. Mr. Guilfoyle: Which district? th Mr. Mayor: I’m sorry, I’m sorry, the commissioner from the 4. Mr. Sias: Thank you, Mr. Mayor. I just want to clarify something. Could we put the slide up on the screen that says “Current proposal”? Not the one that’s there now but the other one. Page two. Thank you, Attorney Smitherman. 2 Mr. Mayor: You mean the one that says “Plan Benefits”? Mr. Sias: Yes, sir, but I want to go down there where it says “Current Proposal”. One thing I think is very important that we make clear in the proposal this is for all years of service. That wasn’t clear on the slide prior to this one as far as the proposal. But this proposal is for all employees from the date of employment to now if they’re still employed, this covers all of their with the 2% multiplier. I just want to make sure that’s clear to our folks that we have in the audience and employees thereby and this being a defined benefit plan, they do not ever lose their benefits or they go down with the market. I just wanted to make that clear. Thank you. Mr. Mayor: All right, thank you and let’s further clarify that. That is, at the date of participation in the plan. That’s extremely important for everyone to understand that today, the date of participation in the plan and then moving forward for years of service. This is something that we believe is the right thing for us to do at this time in our local government. It is a consistent process. We started with the compensation study and then implementation of that. As you’ve heard last year as we roll that out with Administrator Jackson and the team, we said we were going to invest in the people that make Augusta what she is from a day-to-day perspective, get the job done, and this is a continuation of that so again, I want to thank everybody who has worked on this to our Pension Committee and the members of the Commission. We have a motion and a proper second. I want to take action on that and then we’ll have some more discussion. All right, at this point we’re prepared to vote. Ms. Davis out. Motion carries 4-0. Mr. Mayor: It’s item #20 on the Commission agenda. Madam Administrator, any other comments? Ms. Jackson: I don’t have any. th Mr. Mayor: The Chair recognizes the commissioner from the 6. Mr. Hasan: Thank you, Mr. Mayor. Mr. Mayor, just for clarity or a reminder I would say, you know last time when Mr. Joyner was here, we also asked the question we have some of our employees who will be retiring and in the process of retiring. At what point in time do they stay beyond July that they would receive the multiplier or does it become effective immediately? How much time do they stay after that? Mr. Mayor: July 1, right? So let’s go back to the original slide that we had. As we pick the effective date of the new multiplier, it is July 1, 2018. Mr. Hasan: Okay. th Mr. Mayor: July 1, 2018. The Chair recognizes the commissioner from the 8. 3 Mr. Guilfoyle: This is a question that actually had came up to me numerous times and I’d like the Finance Director to explain this. We actually contribute 5% to the GMEBS plan but they’re only receiving 4.63% so the .37, Donna, would you explain that to everybody where the .37 is actually is utilized or goes for? th Mr. Mayor: To the commissioner from the 8 can you provide more clarity to your question for the rest of the body? Mr. Guilfoyle: Let me see if I could do this correctly. Mr. Frantom: It’s on their pay stub what we’re talking about. Mr. Guilfoyle: Right. Employees in the GMEBS paycheck shows that the City is matching 5%. GMEBS fund is only receiving 4.63. Ms. Williams: The amount that Augusta contributes is equal to or higher than the actuarial computation. Every penny that shows that is being matched on the employee’s paycheck is being sent to GMEBS. We are currently using the former actuarial amount of 5.1% as our matching whereas the actuarial computation only uses, came back with 4.63. There is always a time lag in between our budgeting process and the date that the actuarial study is done so those amounts typically don’t exactly coincide for some period of time but we’re actually, Augusta is actually paying in a slightly higher amount than the current actuarial computation came back with. That’s where the 5.1% that is shown on your pay stub is coming from. Mr. Guilfoyle: Can I respond, Mr. Mayor? Mr. Mayor: Absolutely. Mr. Guilfoyle: I didn’t know if that was an administrative fee or what from GMEBS or the actuary. Ms. Williams: It’s just a time lag. Mr. Guilfoyle: Thank you. Thank you, Mr. Mayor. Mr. Mayor: All right, okay. Madam Clerk, is there any other business before us? The Clerk: No, sir. Mr. Mayor: All right. This meeting is adjourned. ADJOURNMENT: There being no further business, the meeting was adjourned. Lena J. Bonner Clerk of Commission 4