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<br /> <br />MINUTES OF UNIVERSITY CITY COUNCIL <br />STUDY SESSION <br />December 7, 2009 <br /> <br /> <br />The Council Study Session, held on the Fifth Floor of the City Hall, on Monday, December <br />7, 2009, was called to order by Mayor Joseph Adams at 5:30 p.m. The following members <br />of the Council were present: <br /> Mr. Terry Crow <br /> Mr. Michael Glickert <br /> Mr. Arthur Sharpe, Jr. <br /> Mr. Robert Wagner <br /> Ms. Lynn Ricci <br /> Mr. Byron Price <br /> Mayor Joseph Adams <br />Also present were the City Manager Julie Feier, HR Director Yolanda Williams and Deputy <br />Director/Finance Director Janet Watson and City Attorney John Mulligan. <br /> <br />The study session was to give a presentation of the Pension Board’s Report. The City <br />Council had directed the Pension Board to research whether to convert a portion of the <br />Non-Uniform Pension Plan from a defined benefit plan to a defined contribution plan. <br />Specifically the Council asked the Board to <br /> <br /> propose a Defined Contribution Plan design <br /> <br /> recommend which employees would be a part of the new plan <br /> <br /> determine the method of transition of any current employees in the plan <br /> <br /> determine the impact of this change on the current Defined Benefit Plan, with <br />the assistance of the actuary. <br />The Board discussed the issue and report at six separate meetings and determined that an <br />outside expertise would be necessary from a defined contribution plan representative to <br />receive general information about similar plans in the Midwest and from an actuary to <br />assist with financial projections. The Board met with Roy Combs from the International <br />City Management Association-Retirement Corporation (ICMA-RC). The Board determined <br />that a 401A defined contribution plan would be the only option for the City. This plan has <br />characteristics of a 401K except the City and employee contributions are determined <br />upfront and cannot be changed. The main philosophical difference between defined <br />benefit plans and defined contribution plans is who bears the investment risk of the plan. <br />Mr. Combs stated the average municipal contribution rate for the plan in the Midwest <br />ranged from 6 to 10% for the employer contribution. He stated that 6% is less than the <br />current City average cost per employee in their current plan. Another aspect of the plan <br />was the vesting schedule. No more than 5 years for full vesting was the most typical. <br />They decided the simplest design would be to establish a new defined contribution plan <br />and start all newly hired employees into that plan. To encourage the ending of the old plan <br />liabilities sooner, the City could require, or allow by choice, all non-vested employees to <br />move to the new plan. Several options of this rollout would need to be considered but this <br />was beyond the scope of this report. There was a strong consensus that vested <br />employees should have no changes to their pension benefits. <br /> <br />The study showed that the City stopped contributions to the Non-Uniform Pension Plan in <br />1997 as the funding ratio increased substantially to over 150% of over-funded. The City <br />benefited from not contributing to the plan for many years as this allowed general fund <br /> <br />