JOINT GENERAL EMPLOYEE PENSION PLAN BOARD OF TRUSTEES, POLICE PENSION PLAN - RETIREMENT COMMITTEE, AND OTHER POST-EMPLOYMENT BENEFITS (OPEB) BOARD A Joint Meeting of the General Employee Pension Plan Board of Trustees, Police Pension Plan Retirement Committee, and Other Post-Employment Benefits (OPEB) Board was held on November 10, 2016, at 9:00 a.m. with Mr. Koenig, Chair of the OPEB Board, presiding. Members present were Mr. Hosfelt (departed at 9:52 a.m.), Mr. Lewis, Mr. Gedney, Mrs. Mullaney, Mrs. Tieman, Mr. Mullaney (departed at 9:32 a.m.), Mr. Stallings (departed at 9:32 a.m.), Chief Bernat (departed at 9:32 a.m.), Mrs. Mitchell, and Mrs. Hawkins. Mr. Anderson, Mr. Cole, and Mr. Sigler were absent. AGENDA ADDITIONS/DELETIONS Mr. Mullaney moved for approval of the agenda as presented, seconded by Mr. Hosfelt and unanimously carried. ADOPTION OF MINUTES - JOINT CIVILIAN/POLICE PENSION AND OPEB BOARDS MEETING - AUGUST 11, 2016 Mr. Mullaney moved for adoption of the minutes of the Joint Civilian/Police Pension and OPEB Boards Meeting of August 11, 2016. The motion was seconded by Mrs. Tieman and unanimously carried. Quarterly Performance Reviews (Quarter Ending September 30, 2016) (Milliman, Inc.) Mr. Jeff Marzinsky, Principal and Employee Benefits Consultant, Milliman, Inc., reviewed the market conditions related to the investments held in the General Employee Pension Plan, Police Pension Plan, and Other Post-Employment Benefits (OPEB) Plan. Mr. Marzinsky stated that he would address three (3) things: 1) stock market and economic update, 2) individual reviews for each of the plans, and 3) a recommended change in the high-yield bond manager in each of the plans. He reminded members that he had advised them during the last couple of meetings that Milliman had been watching this fund and stated that Milliman would like to go forward with a change this morning. Referring to Page 3, Market Indices - 3rd Quarter 2016, of the Quarterly Investment Monitor Summary Report for the Quarter Ending June 30, 2016 included in each of the reports for General Employee Pension, Police Pension, and OPEB Plans, Mr. Marzinsky explained that the Barclay indexes are bond indexes; the Dow Jones Industrial Average, Standard and Poore (S & P), and the Russell are U.S. equity indexes, and the MSCI are international indexes. He noted that the three-month column reflected returns for the indexes through September 30, 2016. Mr. Marzinsky advised that equity markets were mostly positive from July through September. He noted that the year-to-date column reflected positive index returns in the double digits. Mr. Marzinsky stated that continuing into October and November, there was a little volatility and a pullback before the Presidential election. He stated that the markets went down for seven (7) or eight (8) days, yet returns in all of these indexes remained positive for the year to date. Mr. Marzinsky explained that there were some positive factors, such as declining interest rates, which drove a lot of bonds positive for the year to date, and there was positive economic news from the Federal Reserve. He stated that the Fed continued to indicate that unemployment was looking
JOINT GENERAL EMPLOYEE PENSION PLAN BOARD OF TRUSTEES, POLICE PENSION PLAN - RETIREMENT COMMITTEE, AND OTHER POST-EMPLOYMENT BENEFITS (OPEB) BOARD MEETING OF NOVEMBER 10, 2016
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better, people were back to work, and growth was seen in other areas of the markets. Mr. Marzinsky advised that there was potential for the Fed to raise interest rates this year, as they had last year at the end of the year, which would be a detractor in bond returns, and there may be a pullback from what had been seen year to date in bonds. He stated that Milliman had been watching international issues, noting that the Brexit vote had been a shock and there were a lot of concerns on June 23rd and 24th when this vote went through; however, a bounceback had been seen. Mr. Marzinsky explained that the Europe, Asia, Far East (EAFE) index was positive for the year to date and had a good quarter. He commented that it had pulled back slightly, especially earlier in the week with the uncertainty of the Presidential election; however, the EAFE return was approximately 1.8% for the year to date. Mr. Marzinsky advised that emerging markets were now one (1) of the strongest performers, noting that there had been concerns with emerging markets in 2015 and this had been one (1) of the underperforming areas. He advised that emerging markets were affected by: 1) commodity prices, which were down, and 2) indications from China that they were not seeing the double-digit growth rates that they had seen for the last decade, and that single-digit growth rates would be seen. Mr. Marzinsky noted that there had been a big concern that this would stagnate global activity; however, there were thoughts that sustained slower growth would be better than the rapid growth that had been seen. He explained that when such an announcement comes out, there is a big shock, a drop in the market, and a sell-off due to those who feel that they must invest in gold or only cash; however, after they start to think about it, there is a bounceback. Mr. Marzinsky noted that this was seen with the effect of China on emerging markets, with Brexit, and with the Presidential election; therefore, those who look at investing over a long period of time would be better off than those who make short jumps in and out of markets. He advised that having a diversified portfolio is also a good idea. General Employee Pension Plan Referring to Page 1 of the Board Meeting Notes for the General Employee Pension Plan, Mr. Marzinsky stated that contributions totaled approximately $700,000 for the quarter, and withdrawals had been made for benefit payments to retirees and trust company fees. He indicated that there was a good gain during the quarter, reiterating that there were positive equity markets coming out of the June Brexit volatility. Mr. Marzinsky advised that the plan’s returns were close to 4% for the quarter and almost 13% for one (1) year, which were pretty good economic returns, due to strong equity markets and declining interest rates that pushed bonds positive. Referring to Item #1c - current target allocation for the plan, Mr. Marzinsky reminded members that no changes were made to the allocation during the August 11, 2016 meeting. He noted that if interest rates started to increase, this would affect bond allocations, and they may be scaled back a bit. Mr. Marzinsky explained that the Columbia Strategic Income fund is a non-traditional bond category included in the General Employee Pension Plan, Police Pension Plan, and OPEB Plan portfolios that works to counteract some interest rate movements. He noted that the bonds pay out over a period of time, which is called duration, and duration affects the value of the portfolios. Mr. Marzinsky explained that the longer an investment’s duration, the more the investment will be impacted by interest rate movement. He stated, for example, that if a bond portfolio has a duration of nine (9)
JOINT GENERAL EMPLOYEE PENSION PLAN BOARD OF TRUSTEES, POLICE PENSION PLAN - RETIREMENT COMMITTEE, AND OTHER POST-EMPLOYMENT BENEFITS (OPEB) BOARD MEETING OF NOVEMBER 10, 2016
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years and interest rates increase by 1%, the value of that portfolio will decrease by 9%, since this is an inverse relationship. He indicated that this movement is monitored, and a diversified bond portfolio is included in each of the plans. Mr. Marzinsky advised that interest rates had spiked for the last two (2) days because people thought that the new government administration moving in would pull back a lot of the regulations in place, which would spur business activity and impact debt and bond portfolios. He stated that Milliman would monitor this for all of the plans and if continued upward movement in interest rates was seen, they may make an interim adjustment at the next meeting. Referring to the Quarterly Investment Monitor Summary Report for the Quarter Ending September 30, 2016, General Employee Pension Plan, Page 9 - Asset Allocation, Mr. Marzinsky pointed out the assets in each of the investments, noting that they are rebalanced at least once per quarter or whenever large contributions go into the plan, noting the value of going back to the targets. Mr. Marzinsky explained that, when building a portfolio, Milliman looks at the expected levels of risk and return. He indicated that, with the market run-up experienced during the last quarter, Milliman sold off some of the equity gains and reallocated them back into fixed income, and rebalancing the portfolio is very important from a risk perspective as well as a return prospective. In reference to Page 10 - Investment Policy Review - Active Management, Mr. Marzinsky stated that a portion of the report reflected the fund’s scorecard, and the quantitative measures reflected underperformance in the Ivy High Income I Fund, which was trailing its peer group. He reminded members that the scale goes from zero (0) to 99, with zero (0) being the best and 99 the worst, and the Ivy Fund was underperforming other high-yield bond funds. Mr. Marzinsky explained that the Excess Return Columns compared performance of the fund to its index, noting that the fund was underperforming. He advised that the Relative Standard Deviation was a measure of volatility and the fluctuation of the portfolio around an average return, which affects the alpha and Sharpe Rank. Mr. Marzinsky explained that alpha and Sharpe are measures of the manager’s effectiveness in managing the risk and generating a positive return for the portfolio, with a ranking from zero (0) to 99. He noted that the Ivy High Income I Fund was starting to decline and there was a downward trend in the performance of this portfolio. Mr. Marzinsky informed members that Milliman was recommending a change regarding this fund; however, everything else ranked very well, the majority of the active investments were beating their indexes, and no other changes were recommended at this time. Mr. Marzinsky explained that the portfolio has both active managers to generate positive returns and manage some of the risk of the portfolio, and index investments that provide broad-based market exposure. Referring to Page 11, Investment Policy Review - Passive Management, he stated that a beta measure of 1.00 or very close to that is desired, as is a low number for tracking error. Mr. Marzinsky advised that small abnormalities are sometimes seen, such as in the Vanguard Emerging Markets Stock Index I fund. He noted that this fund’s tracking error was a little high because it had changed its underlying index a couple of years ago. Mr. Marzinsky advised that there were no other issues. He stated that Milliman tries to attain the lowest possible expense ratio, based on the value of assets in the fund. Mr. Marzinsky pointed out that some of the funds were invested
JOINT GENERAL EMPLOYEE PENSION PLAN BOARD OF TRUSTEES, POLICE PENSION PLAN - RETIREMENT COMMITTEE, AND OTHER POST-EMPLOYMENT BENEFITS (OPEB) BOARD MEETING OF NOVEMBER 10, 2016
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in institutional share classes, and the Vanguard funds were in the admiral share class, which is a little more expensive than the institutional class. Based on the total assets of all three (3) of the City of Dover’s plans, he stated that Milliman had reached out to Vanguard and asked if the City had the ability to move into the institutional share class. In reference to page 12, Investment Option Return Summary, Mr. Marzinsky advised that the plan had a return of almost 4% for the quarter, which outpaced the index of approximately 3.7%, and 9.5% for the year to date, which outpaced the index of 9.2%. He pointed out that over a one-year period, the return was almost 13%, which he stated was a pretty good return for the portfolio, and over a three-year period, it was approximately 7%, also outpacing the index. Mr. Marzinsky stated that since Milliman had taken over the portfolio and changed some of the investments, the returns had been good and outpaced the indexes. Police Pension Plan Referring to Page 1 of the Board Meeting Notes for the City of Dover Police Pension Plan, Mr. Marzinsky stated that contributions for the quarter totaled close to $800,000. He noted that the plan makes monthly benefit payments of approximately of $126,000, and payments for the quarter totaled close to $400,000. Mr. Marzinsky advised that there had been a positive gain of nearly 4% based on market movements. He noted that Milliman rebalances the funds to the target allocations in the investment policy statement. Mrs. Donna Mitchell, Controller/Treasurer, informed members that approximately $171,000 of the September contribution of approximately $280,000 should not have been included in the fund. She explained that the payment for the State pension plan had been wired to the wrong bank and was pulled out in October. Mr. Marzinsky stated that this would be accounted for. Responding to Mr. Mullaney’s request for clarification, Mrs. Mitchell explained that the contribution amount should be lower by $171,000. She stated that a contribution for officers in the current State pension plan was wired to Wells Fargo instead of to the State’s bank, noting that the payment included contributions from the officers as well as from the City. Mr. Koenig noted that this would reduce the gain by $171,000. Mr. Marzinsky stated that this should not affect the overall performance of the portfolio or the return. Referring to the Quarterly Investment Monitor Report for the Quarter Ending September 30, 2016 Police Pension Plan, Page 9 - Asset Allocation, Mr. Marzinsky stated that the allocation is reviewed at least once per quarter and rebalanced so that it is in line with the plan’s target election. In reference to Page 10, Investment Policy Review - Active Management, Mr. Marzinsky advised that these investments were similar to those in the General Employee Pension Plan. He noted underperformance in the Ivy High Income I fund, and stated that Page 11 - Investment Policy Review - Passive Management, reflected the index plans. Mr. Marzinsky stated that there were no major issues with any of the active managers or indexes of the plan. He indicated that Page 12, Investment Option Return Summary, reflected the underlying returns of the plan, which had close to a 4% return for the quarter compared to the index of approximately 3.74%, so the plan outpaced the index.
JOINT GENERAL EMPLOYEE PENSION PLAN BOARD OF TRUSTEES, POLICE PENSION PLAN - RETIREMENT COMMITTEE, AND OTHER POST-EMPLOYMENT BENEFITS (OPEB) BOARD MEETING OF NOVEMBER 10, 2016
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Mr. Marzinsky advised that the year-to-date return was 9.5%, versus the index of 9.12%. There was almost a 13% return over a one-year period, versus the index of 12.5%, and over three (3) years, the return was almost 7%, versus the index of approximately 6.3%. He stated that performance was pretty good over the last couple of years due to declining interest rates, which had driven positive returns in bonds, and good equity markets. Mr. Marzinsky noted that a lot of the plan’s equity investments were performing well, and no major changes were recommended, other than the change with the Ivy High Income Fund I that was mentioned during the General Employee Pension Plan review. OPEB Plan Referring to Page 1 of the Board Meeting Notes for the City of Dover OPEB Plan, Mr. Marzinsky stated that contributions of approximately $700,000 were made during the quarter and that no payouts were coming from the plan at this point. He advised that there was a gain of approximately $900,000 and a return very close to 4% for the quarter. Mr. Marzinsky stated that the allocations for the General Employee Pension Plan, Police Pension Plan, and the OPEB Plan were slightly different since each of the plans has a different benefit structure. He indicated that since benefit payments for each plan are different, the asset allocation on the fixed income side of the portfolios is different. Mr. Marzinsky noted that plans consisted generally of moderate growth portfolios rather than full growth which, would be full equity, since it was not desired to have a lot of volatility affecting the funded status of the plans. Referring to the Quarterly Investment Monitor Summary Report for the Quarter Ending September 30, 2010, Other Post-Employment Benefit (OPEB) Plan, Page 10 - Investment Policy Review Active Management, Mr. Marzinsky noted underperformance of the Ivy High Income I fund. He stated that other funds in the plan ranked very well compared to their indexes. Mr. Marzinsky stated that there were no major issues on a risk-adjusted alpha and Sharpe bases and there were no issues with any funds, other than the Ivy High Income Fund. He advised that Milliman had been watching the Prudential QMA Small-Cap Value Z Fund for the last couple of quarters, as mentioned in Page 2 of the Board Meeting Notes for General Employee Pension Plan, Police Pension Plan, and the OPEB Plan. Mr. Marzinsky advised that improvements in performance had been seen, noting that he had mentioned during prior meetings that there had been a management change within this fund, which was previous called the Target Small Cap Fund. He indicated that there had been small changes in its portfolio, but performance had been good. Mr. Marzinsky advised that the Prudential team came to Milliman’s office to discuss their value strategies, and Milliman felt confident that the team in place was doing a very good job. He anticipated that this fund would probably be taken off Milliman’s watch list. Mr. Marzinsky advised members that the only issue in any of the plans was the Ivy High Income Fund I. Referring to Page 1 of the Competitor Analysis Report - High Yield Bond, he explained that when Milliman sees underperformance within a plan, they conduct a due diligence review and prepare a report. Mr. Marzinsky estimated that there are approximately 1,300 high-yield bond funds, and Milliman uses a quantitative system to screen their portfolios and review the one-, three-, fiveand ten-year returns. He stated that Milliman looks at risk, standard deviation, alpha, and Sharpe measures. Mr. Marzinsky advised that, being also an actuarial firm, Milliman looks at things like
JOINT GENERAL EMPLOYEE PENSION PLAN BOARD OF TRUSTEES, POLICE PENSION PLAN - RETIREMENT COMMITTEE, AND OTHER POST-EMPLOYMENT BENEFITS (OPEB) BOARD MEETING OF NOVEMBER 10, 2016
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skewness and kurtosis, which help them to analyze the consistency of returns of the portfolio. He advised that they do a screened, system-driven quantitative review and also look at the management team of each of the funds to become comfortable with the way the managers do what they do. In reference to Page 1 of the Competitor Analysis Report, Mr. Marzinsky pointed that the Ivy Fund showed underperformance. He noted that the fund had manager changes in 2013 and 2014, and it was felt that they did not have the ability to do what they had been doing in the past to generate positive returns going forward. Mr. Marzinsky advised that some of the funds that screened very well were Eaton Vance High Income Opportunities; Voya High Yield Bond I, which was formerly known as ING Services; Prudential High-Yield Z; and Loomis Sayles High Income Y. He explained that these funds had better returns than the Ivy fund over just about every time period. Mr. Marzinsky informed members that Milliman was looking at replacing the Ivy High Yield fund with the Prudential High-Yield Z Fund, whose trailing peer group performance reflected good, consistent returns over nearly every time period and also pretty good calendar year returns. Mr. Marzinsky pointed out that this fund would not always be a high flyer in up years; however, slow and steady consistency was desired. In reference to Page 2, Mr. Marzinsky explained that alpha and Sharpe are measures of manager effectiveness and a positive alpha is generally desired. He noted that a negative alpha was being seen for the Ivy High Income and Loomis Sayles High Income Y funds, there was a negative return for Loomis Sayles, Milliman was starting to pull out of some of those funds, and there were reasons not to have them in the portfolio. Referring to Page 3, Mr. Marzinsky advised that this information reflected some of the underlying portfolio characteristics. He advised that high-yield funds are put in a plan for a couple of reasons. Mr. Marzinsky explained that in the current low interest rate environment, high-yield funds invest in bonds that are a little below investment grade. In reference to Holdings Statistics, he pointed out that the average credit quality of the funds listed was “B” or “BB”. Mr. Marzinsky informed members that investment grade investments are in either government or corporations, which do not have the potential to go into default; however, investments in lower investment grade bonds will pay a slightly higher yield because there is some level of business risk. He stated that these types of investments are put in an overall portfolio to generate yield. Mr. Marzinsky advised that the other funds in the City’s plans are all higher-rated investment grade, and the inclusion of lower or below investment grade investments would give a little bit of yield and be part of a diversified fixed income portfolio. He noted that there are short-term, intermediate, long-term, inflation-protected, and non-traditional bonds, and there are some high-yield bonds, stating that the fixed income portfolio is very diversified to try to stem off issues in certain areas or aspects of fixed income. In reference to Page 3, Mr. Marzinsky stated that the asset allocation, credit quality, and maturity breakdown were also examined, noting that changes in interest rates affect the value of the underlying bonds in the portfolio. Referring to Page 4, he stated that other aspects are also looked at. Mr. Marzinsky noted that Milliman has its own quantitative ranking system and does not necessarily look at Morningstar ratings, but Morningstar now rated the Ivy fund at three (3) stars, and the other funds reviewed were rated higher.
JOINT GENERAL EMPLOYEE PENSION PLAN BOARD OF TRUSTEES, POLICE PENSION PLAN - RETIREMENT COMMITTEE, AND OTHER POST-EMPLOYMENT BENEFITS (OPEB) BOARD MEETING OF NOVEMBER 10, 2016
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In reference to Page 4, Mr. Marzinsky noted that these funds are actively managed and managers are paid to manage the portfolios. He advised that the Ivy Fund had an expense ratio of 0.7 and using the recommended Prudential fund would cut that expense ratio slightly, so this would be a positive aspect. Mr. Marzinsky noted that cash flows have a real effect on a manager’s ability to invest the portfolio, and Milliman had seen negative cash flows from the Ivy Fund, which hampered this ability. He stated that the evidence showed that it would be a good time to replace the Ivy Fund and, based on some of the quantitative measures within the report and the qualitative review that Milliman had done, their recommendation would be to replace the Ivy fund with the Prudential High Yield Z Fund in the General Employees Pension Plan, Police Pension Plan, and the OPEB Plan. Mr. Marzinsky noted that Milliman had confirmed with Wells Fargo that the Prudential fund was available on the platform. Mr. Koenig advised that Prudential’s parent company is an insurance agency and Voya was formerly ING, which is in banking. He stated that both of those sectors would likely be under a lot of pressure due to the new administration. Mr. Koenig noted that his experience with the insurance side of Prudential had not been “fantastic” for investments and he was uncertain about the banking sector. He asked how these companies are related to their parent companies. Responding, Mr. Marzinsky explained that a lot of financial service companies are part of large conglomerates, and that he had not seen this impact the investment management side much. Mr. Marzinsky advised that sometimes things like mergers, acquisitions, and spin-offs occur, which becomes a red flag regarding management of the fund. He stated that Milliman feels that if a company buys an investment arm, it will take time for them to assimilate it into their policies and procedures. Mr. Marzinsky stated that Milliman considers whether the company will run the investment team as its own entity or try to just wash it into the way that they do business, which creates a bit of turmoil. He advised that he was unable to predict what would happen with regulations on financial services companies; however, he noted that all of these organizations were financial services organizations and that Loomis is part of Natixis, which is a global financial services company. Mr. Marzinsky explained that the question must be asked if the investment team would be isolated from other regulatory issues, and they probably would be due to the separation of duties within an organization. Mr. Marzinsky stated that this may impact the insurance side more than the investment management side of any of these firms. Mr. Koenig noted that the financial advisory had recommended making a change from the Ivy High Income fund to the Prudential High Yield Fund. Mrs. Tieman moved to make a change from the Ivy High Income fund to the Prudential High Yield fund for the General Employee Pension Plan, seconded by Mrs. Mullaney and unanimously carried. Mr. Mullaney moved to make a change from the Ivy High Income fund to the Prudential High Yield fund for the Police Pension Plan, seconded by Chief Bernat and unanimously carried. Mrs. Mitchell moved to make a change from the Ivy High Income fund to the Prudential High Yield fund for the OPEB Plan, seconded by Mrs. Hawkins and unanimously carried.
JOINT GENERAL EMPLOYEE PENSION PLAN BOARD OF TRUSTEES, POLICE PENSION PLAN - RETIREMENT COMMITTEE, AND OTHER POST-EMPLOYMENT BENEFITS (OPEB) BOARD MEETING OF NOVEMBER 10, 2016
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Mrs. Tieman moved to accept the Quarterly Investment Monitor Summary Report for the General Employee Pension Plan as presented, seconded by Mrs. Mullaney and unanimously carried. Mr. Mullaney moved to accept the Quarterly Investment Monitor Summary Report for the Police Pension Plan as presented, seconded by Chief Bernat and unanimously carried. Mrs. Hawkins moved to accept the Quarterly Investment Monitor Summary Report for the OPEB Plan as presented, seconded by Mrs. Mitchell and unanimously carried. Review - General Employee Pension Plan Portion of the Comprehensive Annual Report (CAFR) During the Joint General Employee Plan Board of Trustees, Police Pension Plan - Retirement Committee, and OPEB Board meeting of November 10, 2016, members of the General Employee Pension Plan Board of Trustees considered a Civilian (General Employee) Pension Fund Annual Report/Ten-Year Financial History for the Civilian (General Employee) Pension Fund. Members agreed to review the Civilian (General Employee) Pension Plan portion of the Comprehensive Annual Financial Report (CAFR) and ten-year financial history of the Civilian (General Employee) Pension Fund at the end of their next meeting. Mrs. Donna Mitchell, Controller/Treasurer, referred members to excerpts from the 2015 Comprehensive Annual Financial Report (CAFR) for the City of Dover. Referring to Page ii Table of Contents, she noted that the sections of the CAFR that refer to the pension plans, as well as the notes regarding the plans were highlighted. In reference to Page 51 - Statement of Changes in Net Position, Fiduciary Funds, Mrs. Mitchell explained that this sheet showed additions and deductions to the pension and OPEB trust funds, noting that these audited financial statements are reviewed by the auditor in the front section of the CAFR and the auditor issues their opinion around this group of statements. Mrs. Mitchell advised that in the CAFR, along with statements regarding the General, Water/Wastewater, and Electric Funds, there is a statement that refers to the pension funds and the OPEB trust fund. She advised that the Pension Trust Funds column provides a combined statement for the civilian and employee pension funds added together; however, the numbers for the individual funds are split out in the notes of the financial statements in the back section of the CAFR. Mrs. Mitchell indicated that the Statement of Changes in Net Position reflects the net investment income, City contributions that are a percentage of payroll, and the City’s lump sum contributions, such as a lump sum appropriation and the payroll benefit, if put into the budget. She noted that these funds are reflected as a transfer to the pension plan on the budget report. Mrs. Mitchell advised that there are also employee contributions. She explained that State grant money for the Police Pension Fund that pays for Cost of Living Adjustment (COLA) contributions, money from traffic tickets, and a percentage of insurance premiums go into the pension fund each year. She advised that the “Other” category includes such things as the sale of miscellaneous police items that may have been confiscated, noting that the pension ordinance for the police plan states that the sale of any police items goes into the pension plans.
JOINT GENERAL EMPLOYEE PENSION PLAN BOARD OF TRUSTEES, POLICE PENSION PLAN - RETIREMENT COMMITTEE, AND OTHER POST-EMPLOYMENT BENEFITS (OPEB) BOARD MEETING OF NOVEMBER 10, 2016
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Mrs. Mitchell reviewed the deductions from the funds, including benefit payments and general administration, which is the cost of investment advisory services. She advised that the change in net position reflects the additions less the deductions. Mrs. Mitchell stated that the beginning net position is the balance of any cash accounts and investments at cost, rather than at market value. The ending net position is a calculation of that change plus the beginning balance. Responding to Mrs. Hawkins, Mrs. Mitchell explained that the benefit payments from the OPEB fund were the retirees’ health insurance premiums. Referring to Page 50 - Statement of Net Position, Mrs. Mitchell advised that this was a balance sheet that showed the cash and cash equivalents, investments at fair value rather than their cost, and any outstanding payables or monies due to anyone else. She noted that the City did not have any funds due to anyone else and that she believed that the payable amount listed was a Wells Fargo fee that was accrued for June 30th. Mrs. Mitchell advised that the figure at the bottom of the chart showed the net position, which balanced the assets. Regarding the funds due to agencies, Mr. Koenig questioned what agencies were referred to and if these were City funds. Responding, Mrs. Mitchell explained that they were not; however, the City acts as an agent for other agencies, such as the Downtown Dover Partnership (DDP), whose bills the City pays, and the Dover Fourth of July Celebration Committee. She stated that they are separate tax identities and the City handles their books as an agent. In response to Mr. Koenig, Mrs. Mitchell confirmed that these funds would amount to zero (0) and information would go away if the City was not doing the books for these agencies. Referring to Page 54 - Financial Statements Notes Continued, Mrs. Mitchell advised that this information related to the notes that back up the items on the audited financial statements and included details behind what is in those numbers. She noted that #18. Retirement Plans, referred to the Defined Contribution and Defined Benefit Plans. Referring to Page 90 - B. Defined Benefit Plans, Mrs. Mitchell pointed out that the Police Pension and General Funds were broken out in the chart on this page, noting that she had just reviewed the combined numbers on the audited statements. She advised that the notes for the Defined Benefit Plans included the provisions of the plans, when they were started, and a summary of plan information, including a summary of the investment policies and the structure of the pension boards. In reference to Page 91, Mrs. Mitchell pointed out the asset allocation targets. She informed members that the combining statement of changes listed plan additions and deductions, just as they were reflected previously, but now listed separately for each of the individual plans. She noted that information was also provided about how contributions are recognized, the accounting basis the City is using, how refunds are done, and how the City pays investment and consultant fees and actuary costs. Mrs. Mitchell explained that the investment advisory fees are charged to the plans and the actuary costs are charged to her budget. She stated that this is done purposely because the City is responsible for the liability; therefore, this is not taken out of the plan cost.
JOINT GENERAL EMPLOYEE PENSION PLAN BOARD OF TRUSTEES, POLICE PENSION PLAN - RETIREMENT COMMITTEE, AND OTHER POST-EMPLOYMENT BENEFITS (OPEB) BOARD MEETING OF NOVEMBER 10, 2016
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In reference to the section beginning on Page 96 - ii. City of Dover Pension Plan, Mrs. Mitchell explained that this section of the CAFR provides a more detailed discussion about each plan and includes a separate note for each pension plan within this overall note. She stated that the number of plan participants was listed, including retirees, active vested employees, non-vested employees, and deferred vested employees. Mrs. Mitchell pointed out that there was information regarding the history of the plan and any changes made to it, including the fact that the plan was closed in 2009 and that a deferred compensation plan was opened. In reference to Page 98, Mrs. Mitchell noted that information was included about plan administration, funding policy, and what the City was doing to fund the unfunded liability. She stated that it describes how the City uses the actuarial numbers to determine the actuarial determined contributions that need to be deposited each year in the plan to help pay down the liability. Mrs. Mitchell advised that new Government Accounting Standards Board (GASB) standards, #67 and #68 were implemented this year and the report discussed their effects. Mrs. Mitchell pointed out there was a separate note for net pension liability and the actuarial methods and significant assumptions being used for the plan. She indicated that the City’s assumption for return had been 7.5% for several years when she first started with the City; however, because the market had come down, this was lowered to 7%, and last year it went down to 6.5%. Mrs. Mitchell noted that when this percentage goes down for expected earnings, the liabilities go up because the projected return is lower. She estimated that the assumed rate of return had been reduced twice in the last six (6) years due to market conditions. Referring to Page 99 - Changes in Actuarial Assumptions or Methods, Mrs. Tieman questioned the basis for the inflation assumption. Mrs. Mitchell explained that the inflation rate is based on what is seen historically for projected pay increases. She noted that the actuarial changes included a reduction in the assumed rate of return from 7.0% to 6.5% and decreases in salary rates from 4.0% to 3.0% and the inflation rate from 2.75% to 2.5%. Mrs. Mitchell advised that this section discusses the method used for the actuarial evaluation, noting that there are different methods that are all complicated and technical. In reference to the General Employee Pension Plan Long-Term Expected Rate of Return, Mrs. Mitchell explained that Milliman, Inc. provides this information for this chart and that the discount rate of return for calculating the plan’s liability reflected on Page 100 was also 6.5%. She stated that the Changes in Net Pension Liability chart reflected the plan’s unfunded liability. Mrs. Mitchell advised that the liability was listed in Column (a); the net position, which is the assets, in Column (b); and the net pension liability, which was Column (a) minus Column (b). Mrs. Mitchell explained that the report showed what had changed during the year to create the net change in the liability. She stated that the service cost is the cost that the City would be paying if the plan was fully funded. Mrs. Mitchell indicated that the interest owed on the pension liability must also be calculated, the effect of economic/demographic gains and losses, and the effect of assumption changes or input. She stated that one (1) of those assumption changes was the interest rate and that she believed that mortality was included in this. Mrs. Mitchell advised that benefit payments, employer contributions, member contributions, net investment income, and administrative expenses were also listed and how
JOINT GENERAL EMPLOYEE PENSION PLAN BOARD OF TRUSTEES, POLICE PENSION PLAN - RETIREMENT COMMITTEE, AND OTHER POST-EMPLOYMENT BENEFITS (OPEB) BOARD MEETING OF NOVEMBER 10, 2016
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the liability changed based on those factors. She informed members that the newest GASB standards required that the City include a sensitivity analysis to show what would happen if the discount rate changed. Mrs. Mitchell advised that this new disclosure required that the City calculate its net pension liability using a discount rate that is one (1) percentage point higher and one (1) percentage point lower than the current rate of 6.5%. Referring to the Pension Expense Deferred Outflows/Inflows of Resources Related to Pensions beginning on Page 100, Mrs. Mitchell reviewed the General Employee Pension Plan Expense, which showed how pension expenses are calculated to be reported in the CAFR. In reference to Page 101, she stated that the Deferred Outflows and Inflows of Resources in the middle of Page 101 may affect the calculations of the Pension Expense at the top of the page under Recognition of Deferred Inflows/Outflows of Resources. Mrs. Mitchell advised that the difference between the assumptions made regarding inflows and outflows for contributions, retirement payments, number of retirees, and mortality, versus what actually occurred in this regard, is deferred. She stated that these funds cannot be reported all in one (1) year but must be amortized over a certain period of time and are reported as deferred inflows and outflows. Mrs. Mitchell indicated that the pension expense is adjusted for the amortization of the deferred outflows and inflows. Mr. Hosfelt asked if the service cost was the total cost of each individual employee. Responding, Mrs. Mitchell indicated that this was the aggregate cost of each individual employee and was the amount that the City would be paying each year if the plan was fully funded. Mr. Marzinsky explained that this figure was a projected value of the annual benefit payment. He stated that this brings what is projected out for the future back into today’s terms. Mr. Hosfelt asked if this was only for the employees who are in this plan, and Mrs. Mitchell stated that it was. Mr. Koenig stated his understanding that, according to this statement from the General Employee Pension Plan from June 30, 2015,in broad terms and with the new GASB standards, the estimated pension liability was $23.38M; however, the envelope of liability was $17.3M to $30M. Mrs. Tieman noted that this was based on the sensitivity analysis. Referring to Page 115 - Schedule of Changes in Net Pension Liability, Related Ratios (in Thousands), Mrs. Mitchell explained that this chart showed a comparison of the numbers that she had just reviewed for the prior and current years. She pointed out the covered payroll, the percentage of the pension liability that is funded, and the net pension liability as a percentage of covered payroll. Mrs. Mitchell advised that the liability is 398.73% of covered payroll and is much higher than the covered payroll. In reference to Page 116, Mrs. Mitchell pointed out the Schedule of Employer Contributions for 10 years. She indicated that GASB had changed the accounting standards for this, noting that 10 years was required previously, it was lowered to three (3) years, and it was now 10 years again.
JOINT GENERAL EMPLOYEE PENSION PLAN BOARD OF TRUSTEES, POLICE PENSION PLAN - RETIREMENT COMMITTEE, AND OTHER POST-EMPLOYMENT BENEFITS (OPEB) BOARD MEETING OF NOVEMBER 10, 2016
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Mrs. Mitchell advised that this showed the actuarial determined contribution, the actual employer contribution, and the contribution deficiency or excess. She stated that the City had been making lump sum contributions when there were extra carry forward amounts related to personnel, etc., and this was the reason that a negative was reflected. Mrs. Mitchell informed members that the City had been putting extra budget balances in the pension plans to help pay down that liability. She indicated that the covered payroll was coming down as well, because this was a closed plan. Mrs. Mitchell commented that the City had a lot of retirees also, the newer salaries were less than the salaries of those who retired, and there were fewer people in the plan. Mrs. Tieman stated that this was what Mrs. Mitchell had anticipated when the plan was closed, and Mrs. Mitchell concurred. Review - Ten-year Financial History of the General Employee Pension Fund During the Joint General Employee Plan Board of Trustees, Police Pension Plan - Retirement Committee, and OPEB Board meeting of November 10, 2016, the members of the General Employee Pension Plan Board of Trustees considered a Civilian (General Employee) Pension Fund Annual Report/Ten-Year Financial History for the Civilian (General Employee) Pension Fund. Members agreed to review the Civilian (General Employee) Pension Plan portion of the Comprehensive Annual Financial Report (CAFR) and a ten-year financial history of the Civilian (General Employee) Pension Fund at the end of their next meeting. Referring to the Schedule of Changes in Pension Trust Fund Net Assets, Mrs. Donna Mitchell, Controller/Treasurer, advised that this ten-year schedule had been requested to show the additions, deductions, and balance of the General Employee Pension Plan each year. She stated that was the same information that had just been reviewed during the previous agenda item but showed ten-year trends. Mrs. Mitchell explained that these statements are in the CAFR, the CAFR is posted on the City’s website, and anyone with questions was free to call or visit the Finance Office. Mrs. Tieman thanked Mrs. Mitchell and her staff for putting this information together and asked if Mr. Blakeman had gotten the information he was seeking. Mr. Lester Blakeman, 209 Falmouth Way, advised members that he was no longer serving on the General Employee Pension Board of Trustees and noted that the Finance Department, Human Resources Department, and City Manager’s Office had been extremely cooperative with him. He referred to the excerpts from the 2015 Comprehensive Annual Financial Report (CAFR) for the City of Dover that were reviewed during consideration of the previous agenda item. Mr. Blakeman noted that Mrs. Mitchell had picked out the important pages in the CAFR relating to the pension plan. He provided members with a List of All Pages from the CAFR that Mentioned the Pension Plan (Attachment #1). Mr. Blakeman stated that he had pulled these pages back to 2001. He explained that the auditors look only at pages 50 and 51 under the current CAFR audit. Mr. Blakeman stated that the auditors do a cursory review of all the other pages, and make no statement as to their accuracy or reliability.. He indicated that the auditors will talk about this information if questions are asked, but they will not make any statement as to the validity of those pages, which are for information purposes only as far as the auditors are concerned.
JOINT GENERAL EMPLOYEE PENSION PLAN BOARD OF TRUSTEES, POLICE PENSION PLAN - RETIREMENT COMMITTEE, AND OTHER POST-EMPLOYMENT BENEFITS (OPEB) BOARD MEETING OF NOVEMBER 10, 2016
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Mr. Blakeman provided to members a Pension Membership Count (Attachment #2), stating that this was an ongoing record of the membership of the General Employees Pension Plan. He advised that membership had continually declined starting in 2009. Mr. Blakeman pointed out that membership in 2009 was 391 and in 2010 was 334. Mr. Blakeman provided a spreadsheet illustrating the effect of a 2% automatic annual Cost of Living Adjustment (COLA) for the Police Department and the lack thereof for individuals in the General Employee Pension Plan (Attachment #3). He explained that the first row showed a police officer retiree and a General Employee Pension Plan retiree starting with a pension of $12,000. Mr. Blakeman advised that a 2% COLA was included for the police officer over 20 years, and that he had used an inflation rate of 3%. He stated that this statement showed the net impact of the COLA increase and inflation on the pensions, noting that the police pension increased over time from $12,000 to $13,921. Mr Blakeman advised that the loss to the pensioners in the General Employee Pension Plan increased every year, and the sample retiree from this pension plan in the spreadsheet ended up with a pension payment of $2,958 per year. Mr. Blakeman stated that he thought there was a need for a full-fledged, detailed audit of the General Employee Pension Plan, stating that he did not think this had ever been done. He indicated that there was $34M or $35M million in the plan currently and that not having a detailed, specific audit was negligence of members’ fiduciary responsibilities. Mr. Blakeman indicated that he had been extremely happy to serve on the Board and thought it was a great board that got great information. He expressed his belief that everybody was doing their very best to make it work and the only question he had was in regard to the audit. Mr. Blakeman expressed his hope that members would consider doing a specific audit in the future by a firm that is familiar with doing pension plan audits to put everybody's minds at ease. He indicated that he had no doubts about problems and thought everything was great; however, at least one (1) audit of the pension plan should be done to verify what was being done. Responding to Mrs. Tieman regarding the type of audit he was requesting, Mr. Blakeman stated that the whole plan, from top to bottom, should be audited. He advised that a normal audit for a pension plan would look at what the pension plan says, how it is carried out internally, the rules for retirement, etc., and would look at how investments and payments are being handled. Mr. Blakeman advised that he had no questions about honesty in this regard; however, he explained that typically in most municipalities if there is embezzlement, it would be in the pension plan. He expressed the need to pay attention to this and to know there was not embezzlement, stating that this is what a full-fledged audit would do. Mr. Blakeman noted that this number was not audited in the annual CAFR, and the actuarial report stated clearly that the auditors were not auditing any of those numbers. Referring to the List of All Pages from the CAFR that Mentioned the Pension Plan, Mrs. Mitchell stated that the notes in the CAFR are part of the financial statements and the auditors go through them. She explained that there are both Supplementary Information and Required Supplementary Information sections, and the auditors go through the Required Supplementary section and make sure that it is all tied together; however, it is not audited. Responding, Mr. Blakeman stated that the
JOINT GENERAL EMPLOYEE PENSION PLAN BOARD OF TRUSTEES, POLICE PENSION PLAN - RETIREMENT COMMITTEE, AND OTHER POST-EMPLOYMENT BENEFITS (OPEB) BOARD MEETING OF NOVEMBER 10, 2016
PAGE 14
auditors make this very clear. Referring to Attachment #1, Mr. Blakeman advised that everything below Pages 50 and 51 - Basic Financial Statement Part C consisted of notes and supplemental information that the auditors review but do not audit. Mrs. Mitchell explained that the notes are part of the audit. Mr. Blakeman stated that the auditors would not make any statements about the accuracy or authenticity of any of those pages. Mr. Lewis asked if Mr. Blakeman was basically looking for footnotes. Responding, Mr. Blakeman reiterated that a basic audit would go through what the pension plans says to how it is carried out and make sure that the procedures are appropriate. Mr. Koenig asked if it would be necessary to audit from the first year of the pension plan to the current year to audit the entire plan. Responding, Mrs. Mitchell explained that it would not, noting and that an engagement could be done for any period of time that is wanted. Mr. Koenig commented that an audit could be done of the last five (5) years. He asked what would be involved, and if they would have to go through all the financial statements for a five-year period and have all the documentation regarding the plan. Mrs. Mitchell asked if anything would have to be done with the mutual funds to validate those balances. Responding, Mr. Marzinsky stated that there were probably different scopes or levels of review. He noted that one level would be to look at the financial statements that the City prepares and compare them to the trust statements to say that contributions and gains and losses tied together. Mr. Marzinsky stated that there are also operational aspects which look at whether benefit payments were made, if they were paid in a timely fashion, and whether they tied back to what was booked on the trust statements. In addition, he stated that another part of operational review would be to look at the plan document and what is actually happening. Mr. Koenig noted that the General Employee Pension Plan was a closed plan, and he assumed that the plan document would never change again because it is closed. He asked how involved and expensive a five-year audit would be and, if done, whether it would clear up any questions. Responding, Mr. Blakeman indicated that he would be happy with a one-year audit to provide a one-shot window of everything that goes on inside the pension plan. Mrs. Hawkins stated that they would also have to look at the Human Resources Department’s files, because they process the pensions. Mrs. Mitchell stated that she did not think that one (1) year would satisfy Mr. Blakeman’s request because there may be retirees during one (1) year and none in another; therefore, there may not be certain types of activity in one (1) year that would occur over a five-year horizon. Mrs. Tieman asked if Mr. Blakeman was more concerned with an audit of the finances or the operational end of the plan. She stated that it sounded to her as though Mr. Blakeman was concerned with the operational aspect and making sure that the City was carrying out the plan based on what the plan document says. Mr. Blakeman concurred.
JOINT GENERAL EMPLOYEE PENSION PLAN BOARD OF TRUSTEES, POLICE PENSION PLAN - RETIREMENT COMMITTEE, AND OTHER POST-EMPLOYMENT BENEFITS (OPEB) BOARD MEETING OF NOVEMBER 10, 2016
PAGE 15
Mrs. Mitchell advised that staff reconciles the investment reports to the ledger every month to make sure that everything is in agreement; therefore, they would see that the City was tying back to Milliman as to what went into and came out of the fund. In addition, she stated that there is a bank statement reconciliation for the cash account every month, and the auditors see that. Mrs. Mitchell asked if Mr. Blakeman just wanted to see plan compliance with the ordinance. Mr. Blakeman answered yes, and that someone also needed to look at both the company that invests the money and Wells Fargo, who handles the money. Mrs. Mitchell stated that when an audit is done, staff obtains Wells Fargo’s internal control report that shows that Wells Fargo is compliant with their internal control procedures and this is provided to the auditors. Mr. Blakeman noted that this was not in the CAFR, and Mrs. Mitchell concurred, stating that this was something separate that the City gets for the audit. She explained that an auditor would ask for that, just as the City’s current auditor asks for it. Mr. Blakeman noted that news had broken about shenanigans that was going on at Wells Fargo, who was handling all of the plan’s money. Responding, Mrs. Mitchell stated that this related to the retail side, and she did not think it would impact the other side of Wells Fargo’s business. She noted that staff had discussed this matter with Mr. Marzinsky, who had also brought it up. Mrs. Mitchell advised that Wells Fargo would probably come to the next meeting to talk about these issues to give everyone comfort. Mrs. Hawkins asked if the information in the List of All Pages in the CAFR that Mentioned the Pension Plan was from the CAFR. Responding, Mr. Blakeman explained that it was and that he has copies of these pages from the CAFR back to 2001, and highlights them and puts them into a spreadsheet. Mrs. Mitchell advised that she had concerns about the pension plan; however, she noted that this was nothing that was being done intentionally. She explained that the plan stated that pension applications are to be approved by the Board. Mrs. Mitchell noted that it been agreed that the Human Resources (HR) Director would approve retirements because there was difficulty getting board members to meet whenever the plan had a retiree; however, this had not been changed in the ordinance and so there was not compliance. Mrs. Mitchell stated the need to change the ordinance, which included other Board approvals. She advised members that she and Mrs. Traci McDowell, City Clerk, had been recently reviewing the ordinance and there were issues that Mrs. Mitchell thought needed to be straightened out. Mr. Blakeman advised members that Human Resources provides members a list of retirees every six (6) months. Mrs. Tieman noted that members receive emails from the Clerk’s Office each time someone retires. Mr. Blakeman stated that retirees are advised by Human Resources that if they do not agree with their retirement determination, or have a question, they can come to the Board to raise these issues.
JOINT GENERAL EMPLOYEE PENSION PLAN BOARD OF TRUSTEES, POLICE PENSION PLAN - RETIREMENT COMMITTEE, AND OTHER POST-EMPLOYMENT BENEFITS (OPEB) BOARD MEETING OF NOVEMBER 10, 2016
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Mrs. Mitchell noted that the ordinance includes information on appeals and reiterated the need to review the ordinance. Mr. Lewis moved for adjournment, seconded by Mrs. Tieman unanimously carried. Meeting adjourned at 10:06 a.m. Scott D. Koenig Chair, OPEB Board SDK/JS/dk S:\AGENDAS-MINUTES-PACKETS-PRESENTATIONS-ATT&EXH\Misc-Minutes\PENSION AND OPEB\2016\11-10-2016 Joint Civilian-Police Pension and OPEB Boards.wpd
Attachments Attachment #1 - Handout provided by Mr. Blakeman - List of All Pages from the CAFR that Mentioned the Pension Plan Attachment #2 - Handout provided by Mr. Blakeman - Pension Membership Count Attachment #3 - Handout provided by Mr. Blakeman - Effect of a 2% Automatic Annual Cost of Living Adjustment (COLA)
Sheet1 1 2 3page 4 ii 5 6 iii 7 iv 8 18 9 19 10 20 11 50 12 51 13 54 14 57 15 58 16 59 67 17 18 83 19 84 20 85 21 86 22 87 23 88 24 89 25 90 26 91 27 92 28 96 29 97 30 98 31 99 32 100 33 101 34 110 35 111 36 114 37 115 38 116 39 135 40 137 41 NA
LB
x x x x x x x x
x x x x x x x x x x x x x x x x x x x x
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ATTACHMENT #1 Joint General Employee Pension Plan Board of Trustees, Police Pension Plan Retirement Committee, and OPEB Board Meeting of 11/10/2016
Hand Out
x
x x x
x x x x x x
x x
x x x
Front Page Table of Contents Table of Contents Table of Contents
Basic Financial Statement Part C Basic Financial Statement Part C Index Notes to Financial statement Notes to Financial statement Notes to Financial statement Notes to Financial statement Notes to Financial statement Notes to Financial statement Notes to Financial statement Notes to Financial statement Notes to Financial statement Notes to Financial statement Notes to Financial statement Notes to Financial statement Notes to Financial statement Notes to Financial statement Notes to Financial statement Notes to Financial statement Notes to Financial statement Notes to Financial statement Notes to Financial statement Notes to Financial statement Required Supplementary Information Part D Required Supplementary Information Part D Req uired Supplementary Information Part D Required Supplementary Information Part D Required Supplementary Information Part D Supplementary Information PartE Supplementary Information PartE Wells Fargo Pension - changes in Trust fund
CAFR Cover page index index index SBC cover letter page 1 SBC cover letter page 2 SBC cover letter page 3 Statement of Net Position Change in Net Position Index Fiduciary Funds New Pronouncements New Pronouncements Investments - Benefits & Pensions Other Post Employment Benefits Employee Benefits and Contributions Principal Plan Provisions Principal Plan Provisions Principal Plan Provisions Principal Plan Provisions Defined Contributi on Plan Defined Contribution Plan *>Defined Contribution Plan Defined Contribution Plan General Employee Pension Plan General Employee Pension Plan General Employee Pension Plan General Employee Pension Plan General Employee Pension Plan General Employee Pension Plan Appropriation to General Pension Fund Governmental Budgets Actuarial Methods and Assumptions Changes in Net Pension Liability Schedule of Employee Contributions Water/Wastewater Fund Electric Fund
Page 1
Principal Plan Provisions
This document was provided by Mr. Lester Blakeman, and the information included has not been verified by City staff.
ATTACHMENT #2 Joint General Employee Pension Plan Board of Trustees, Police Pension Plan Retirement Committee, and OPEB Board Meeting of 11/10/2016
Sheet1 Pension Membership Count June 301h
Retired and beneficiaries currently receiving benefits
Active employees - Fully Vested
Active employees - Non-Vested
Deferred vested
2007
2008
2009
2010
2011
2012
2013
2014
2015
Change 2009(P) to 2015
167
168 1
178 10
187 9
168 -19
194 26
207 13
205 -2
205 0
27
89 -9
89 0
82 -7
94 12
81 -13
73 -8
80 7
83 3
-6
11 0 26
11 1 1
99 -12
83 -16
68 -15
50 -18
40 -10
31 -9
-80
13 1
13 0
13 0
14 1
14 0
16 2
15 -1
15 0
2
380 19
391 11
381 -10
359 -22
357 -2
346 -11
340 -6
334 -6
98
84
12
TOTAL
361
Page 1
Change -57
This document was provided by Mr. Lester Blakeman, and the information included has not been verified by City staff.
ATTACHMENT #3 ( Joint General Employee Pension Plan Board of Trustees, Police Pension Plan Retirement Committee, and OPEB Board Meeting of 11/10/2016
(
Sheet1 Police year COLA 2.0}Yo 1 2 3 41 5 6 7 8 9 10 11 121 13 141 15 16 17 181 19 20
General llnflation 3%
$12,000 $12,240 $12,485 $12,734 $12,989 $13,2491 $13,5141 $13,784 $14,060 $14,341 $14,628 $14,920 $15,219 $15,523 $15,834 $16, 150 $16,473 $16,803 $17, 139 $17,482
$12,000 $12,360 $12,731 $13,113 $13,506 $13,911 $14,329 $14,758 $15,201 $15,657 $16, 127 $16,611 $17,109 $17,622 $18,151 $18,696 $19,256 $19,834 $20,429 $21,042
loss to pension
-$1201 -$246 -$378 -$517 -$662 -$815 -$974 -$1 , 141 -$1,316 -$1,499 -$1,690 -$1,890 -$2 ,099 -$2 ,317 -$2,545 -$2,783 -$3,031 -$3,290 -$3,560
actual Pension
year ICOLA 0% 1 21 31 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20
$12,120 $12,239 $12,356 $12,472 $12,587 $12,699 $12,810 $12,919 $13,025 $13,129 $13,230 $13,329 $13,424 $13,516 $13,605 $13,690 $13,772 $13,849 $13,921
Page 1
$12,000 $12,000 $12,000 $12,000 $12,000 $12,000 $12,000 $12,000 $12,000 $12,000 $12,000 $12,000 $12,000 $12,000 $12,000 $12,000 $12,000 $12,000 $12,000 $12,000
Inflation 3% $12,000 $12,360 $12,731 $13,113 $13,506 $13,911 $14,329 $14,758 $15,201 $15,657 $16,127 $16,611 $17, 109 $17,622 $18, 151 $18,696 $19,256 $19,834 $20,429 $21,042
loss to pension
-$360 -$731 -$1 ,113 -$1,506 -$1,911 -$2,329 -$2,758 -$3,201 -$3,657 -$4, 127 -$4 ,611 -$5, 109 -$5,622 -$6, 151 -$6,696 -$7 ,256 -$7,834 -$8,429 -$9,042
actual Pension
$11 ,640 $11 ,269 $10,887 $10,494 $10,089 $9,671 $9,242 $8,799 $8,343 $7,873 $7,389 $6,891 $6,378 $5,849 $5,304 $4,744 $4,166 $3,571 $2,958
This document was provided by Mr. Lester Blakeman, and the information included has not been verified by City staff.