HomeMy WebLinkAboutMINUTES Firemen's Pension Board 2007-09-18RECORD OF PROCEEDINGS
Town of Estes Park, Larimer County, Colorado, September 18, 2007
Minutes of a Regular meeting of the FIREMEN'S PENSION BOARD of the
Town of Estes Park, Larimer County, Colorado. Meeting held in the
Municipal Building in said Town of Estes Park on the 18th day of September
2007.
Committee:
Attending:
Absent:
Mayor Baudek, Fire Chief
McFarland, EPVFD Member
Williamson
Mayor Baudek, Fire Chief
McFarland, EPVFD Member
Williamson
Will Birchfield
Dorman, Finance Officer
• Landkamer, Town Clerk
Dorman, Finance Officer
Landkamer, Town Clerk
Chief Dorman called the meeting to order at 8:35 a.m.
INCREASED MONTHLY RETIREMENT BENEFITS.
Finance Officer McFarland reviewed the Benefit Increase Study performed by Milliman.
The results of the study have confirmed the fund could absorb an increase in pension of
$400 as long as the annual required contribution increases, thereby paying down the
unfounded actuarial liability. This would assure the fund is moving towards being a
100% funded.
It was moved and seconded (Baudek/Landkamer) to increase the fire pension from
$350 per month to $400 per month effective January 1, 2008.
There being no further business, Chief Dorman adjourned the meeting at 8:40 a.m.
s 0 0 c -.
Jackie Williamson, Town Clerk
A MILLIMAN GLOBAL FIRM
Milliman
Consultants and Actuaries
September 11, 2007
Mr. Steve McFarland
Finance Officer
Town of Estes Park
P.O. Box 1200
Estes Park, Colorado 80517
RE: Town of Estes Park Fire Protection District Volunteer Pension Fund
Benefit Increase Study
Dear Steve:
1099 Eighteenth Street, Suite 3100
Denver, CO 80202-1931
Tel +1 303 299.9400
Fax +1 303 299.9018
www.milliman.com
As requested, we performed a study of the affect of potential benefit increases on the plan. The
results of our study are shown on the attached exhibit. The studies assume the plan changes
were effective January 1, 2007. The data, assumptions, methods, and other plan provisions are
the same as those used in the January 1, 2007 Actuarial Valuation.
The enclosed exhibit displays the results of our studies. We have shown results at the current
$350 level, increases to $400 and $500 maximum benefits, and the increase per $50 of benefit
increase. You can use the "Change per $50 Increase" column to estimate other potential
benefit levels. For example a $550 benefit level would result in a $152,582 Annual Required
Contribution (ARC) ($131,937 at $500 level + $20,645 increase for the additional $50).
Please review line 9, the Funded Ratio. We are concemed that the current plan is currently
funded at a 74.3% level. A funded ratio of 100% means that the benefits earned through
January 1, 2007 are fully funded and that future contributions are simply the annual benefits
earned. Currently you are paying for benefits earned through January 1, 2007 plus a portion of
benefits previously earned (unfunded actuarial liability or UAL). In our actuarial method, we use
a decreasing period to pay down UAL (described on page 13 of the actuarial valuation). The
amortization period for 2007 was 30 years. In 2009 the period will be 28 years and in 2011 it
will decline to 26 years and so forth. As long as you contribute more than the ARC, (line 8), you
will make progress in paying down the UAL.
Please give me a call so that we can review the impact of the changes further. Also, let me
know if you have any other questions or need any additional information.
Sincerely,
Patricia Ann Ka le, F.S.A.
Principal and Consulting Actuary
PAK:fm
Enclosure
cc: Debbie Parrack
J:docs:tep:071301 Study.doc
OFFICES IN PRINCIPAL CITIES WORLDWIDE
TOWN OF ESTES PARK FIRE PROTECTION DISTRICT VOLUNTEER PENSION FUND
AFFECT OF POSSIBLE PLAN CHANGES ON JANUARY 1, 2007
Change per
$50 Increase
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j:docs:tep:071301 Study.doc