Employee Benefit Trust Minutes - 06/18/2007 C
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CITY OF WICHITA FALLS
EMPLOYEE BENEFITS TRUST BOARD MEETING
June 18,2007
Present: Bill Sullivan, Chair
Darron Leiker, City Manager
Jim Dockery,Finance Director
David Winney, Human Resources Director
Gail Garmon, Employee Benefits Coordinator
Mayor Lanham Lyne
Councilor Jim Ginnings
Councilor Ray Gonzalez
Jim Newton, Gabriel Roeder Smith& Company
The meeting was called to order at 9:00 a.m.
Agenda Items:
Approval of Minutes
Darron Leiker made a motion to accept the minutes of the June 4, 2007 meeting. Jim
Dockery seconded the motion. Motion carried.
GASB 45 Report and Discussions
Previously, the Board had hired the services of Gabriel Roder Smith&Company
actuarial firm to study the past history of the retiree costs to the city's health plan and to
suggest alternative methods of funding the city's future liability in order to comply with
the GASB 45 requirements. Jim Newton was present to report on some of what his
company had determined would help the city in lessening its future liability in terms of
benefits offered to retirees.
One suggestion was for the City of Wichita Falls to establish a trust fund to maximize
investment earnings. He reported that the city could determine its annual required
contribution, invest any amount over what the claims were for any given year, and after a
period of several years,the account should have earned sufficient monies to greatly
reduce the amount needed annually to fund the account.
Another suggestion was to transfer all Medicare eligible retirees to a fully funded plan
that would be completely separate from the City's self funded plan which currently
insures all employees, dependents and retirees. In doing this,the more than two million
dollars spent yearly on the Medicare recipients coverage,would shift to a private
company. Councilor Ginnings and councilor Gonzalez both stressed the desire to limit as
much as possible,the financial impact on the retiree. Jim Dockery and Mayor Lyne
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suggested that perhaps the City might explore the possibility of subsidizing a portion of
the premium to accomplish this.
A third suggestion was to a establish a"Rule of 75"(or 80)policy that future retirees
might be required to satisfy in order to have access to the City's health coverage after
retirement. It was noted that the City's retirement requirements are currently 25
years/any age, 10 years/age 60.
By adopting programs such as were suggested, it is hoped that the City could reduce it's
eighty-four million dollar retiree liability to around fifty-three million.
After much discussion it was decided that the possible shifting of Medicare eligible
retirees to a separate plan and establishing a trust to earn sufficient interest to help fund
the liability would be the first options to be explored.
It was decided that Cassie Stennett,broker,would be directed to begin taking bids for the
private insurance and present those bids at a later meeting. Also, Jim Dockery requested
that ICMA be contacted to present information regarding their trust fund that the City
might use for this purpose, also to be presented to the Board at the later meeting. Other
suggestions would also be studied at a later date.
The meeting was adjourned at 11:00 a.m.
Respectfully submitted,
Gail Garmon
Employee Benefits Coordinator