Committee Minutes

PENSION AND INSURANCE COMMITTEE
Tuesday, November 1, 2005 (with attachment)
A101



The meeting was called to order at 2:07 p.m.


Committee Members Present: Mike Flannery, Gerald Hamerlik, Curt Kreun, Maureen
Storstad.
Committee Members Absent: Mayor Brown.


Hamerlik announced that if anyone wishes to speak to any issue to please do so
before the vote is taken on that item by asking to be recognized by the chair,
coming to the front podium, and giving their name and address for the record.

Matter of Approval of Minutes from September 27, 2005 meeting.

Motion by Kreun, Second by Flannery to approve the minutes as submitted. Aye:
All. Motion Carried.

Matter of Discussion on Deloitte & Touche Correspondence.

This correspondence reported the results of comparing our actual retirements to
the elected retirement ages and also included a discussion on effects of
changing from the 1983 Group Annuity Mortality Tables for Males and Females to
an updated table, such as the RP-2000.

Hamerlik stated that in reviewing the historical data on actual retirements, he
found it interesting how many opted for an retirement age, but are not retiring
until later than that age. He commented that it would be interesting to see
how our data compares to that of other cities, business, etc. Flannery
commented that in the early years of the plan many worked longer to increase
the amount of benefit they would receive. The group discussed that those that
are working beyond their elected age are helping the plan in that they are
continuing to put money in at a time when they should be drawing it out.
Burger added that there are still a handful of employees working that elected
initially not to participate in the pension plan and as such have no coverage.
Kreun commented that many may also be delaying retirement due to the cost of
health insurance and may be working until they get to an age where they can get
onto Medicare. Hovland added that the City has added some benefit programs to
assist with this concern and that these programs will really help those
employees that are younger now, as by the time they reach retirement age they
could have a significant balance to be used to offset health related costs.

Consensus was that they would like to hold action on this item until such time
as John Schmisek and/or a representative from Deloitte were available to offer
recommendations on the options listed.
Motion by Kreun, Second by Storstad, to table until such time as staff were
present to advise the committee. Aye: All. Motion Carried.


Matter of Investment Policy.


The group reviewed the policy as revised by Howard Swanson, City Attorney.
They discussed some of the wording changes made since the last draft, one of
which was to include a specific date by which the annual review would take
place.

Mark Hall, plan trustee with Alerus Financial, was contacted by phone to
confirm that he did not have any problems with any of the changes made to the
original document. He declared by phone that he did not and was comfortable
with the document as revised.

Motion to approve the Investment Policy by Storstad, second by Flannery. Aye:
All. Motion carried.


Matter of Defined Contribution Plan Contribution Rate.


The group discussed that this item was back on the agenda at the request of
some employees reps that would like consideration given to increasing the
contribution rate from the current 4%. The group reviewed a copy of a
comparative study that was done by Deloitte & Touche in December of 2003 when
this request was last made. The group discussed that this matter was brought
up at that time as some felt that participants in the plan were not getting a
comparable contribution as compared to those in the Defined Benefit Plan.

Storstad stated that based on the comparison that was done it appears that the
two pension plans are already comparable and that without a basis that shows a
disparity between the plans it would be difficult to recommend an increase to
the Council. Hamerlik stated that he concurs that based on the study that was
done both plans seem to be getting a comparable contribution.

Motion to receive and file this matter by Storstad, Second by Kreun. Hamerlik
requested that a copy of the study be attached to the minutes in the file for
future reference. Upon call for the question, Aye: All. Motion Carried.


Other.


The group discussed the schedule for the subcommittee interview day and
adjustments to the schedule that will be needed, due to other meeting conflicts
for some subcommittee members. Lundmark will distribute a revised schedule to
the group once it is finalized.

The next pension committee meeting will be on Monday, November 21 at 2:00 p.m.
in Room A101. The agenda will include the item of final recommendation from
the Subcommittee on a new money manager. Action will need to be taken at this
meeting on the manager selection in order for the new manager to be in place by
the beginning of the year.

Meeting adjourned at 2:40 p.m.

Respectfully submitted,


John M. Schmisek, CPA
Director of Finance and Administrative Services

SLL


1