* This transcript was created by voice-to-text technology. The transcript has not been edited for errors or omissions, it is for reference only and is not the official minutes of the meeting. [1. Call to Order.] [00:00:06] I HAD LIKE TO CALL THE EDMOND CITY COUNCIL MEETING ON EMPLOYEE PENSION PLAN, UPDATE WORKSHOP TO ORDER. AND MR. VANDERHAM, WOULD YOU LIKE TO CALL YOUR BOARD IN THEIR MEETING TO ORDER? YES, I WOULD LIKE TO, SINCE WE HAVE MAJORITY OF THE PENSION BOARD HERE, I'M CALLING THAT MEETING AS A SPECIAL MEETING TO ORDER AS WELL. THANK YOU. [2. Presentation and Discussion of the Current City Employee Pension Plan and Suggested Changes to the Plan.] ITEM NUMBER TWO, PRESENTATION AND DISCUSSION OF THE CURRENT CITY EMPLOYEE PENSION PLAN AND SUGGESTED CHANGES TO THE PLAN. NOW, WOULD YOU LIKE TO PROCEED? I WOULD LOVE TO. AND WOULD YOU DO ME A FAVOR AND PULL THAT MICROPHONE CLOSER TO YOU? YOU REALLY WANT THIS? YES, I REALLY DO. YES, I, I KNOW WHAT YOU MEAN. WELL, GOOD AFTERNOON. UM, ROSS VANDERHAM, THE CITY TREASURER AND CHAIRMAN OF OUR PENSION EMPLOYEE RETIREMENT PLAN, OUR PENSION BOARD. UM, TODAY I'M GOING TO GIVE YOU AN AWFUL LOT OF INFORMATION ABOUT OUR PENSION PLAN, SOME OF THE BACKGROUND, SOME OF OUR CURRENT FINANCIAL STATUS, AND POTENTIALLY SOME OF THE THINGS THAT WE MAY BE COMING TO YOU SUGGESTING SOME CHANGES TO THE PENSION ORDINANCE. AND SO THAT'S MY GOAL IS TO DO THOSE THREE THINGS. AND SO HOPEFULLY IF YOU HAVE ANY QUESTIONS ANYTIME, PLEASE HOLLER AT ME. AND, AND I, I, I'LL TRY, IF I CAN'T ANSWER IT, THERE ARE SEVERAL PEOPLE BACK HERE THAT I KNOW CAN, SO, SO LET'S BEGIN. UM, I WANNA START WITH THE PENSION BOARD MEMBERS. THIS IS THE CURRENT SLATE OF MEMBERS. UM, THE ORDINANCE CALLS FOR SIX POSITIONS IN THE CITY BY POSITION, NOT BY PERSON, BUT BY POSITION TO BE ON THIS, UH, BOARD. UH, THE CITY TREASURER, THE CITY MANAGER, THE FINANCE DIRECTOR, THE DIRECTOR OF HUMAN RESOURCES, THE CITY ATTORNEY AND THE CITY CLERK. THOSE SIX ARE REQUIRED BY ORDINANCE. THE THEN THE ORDINANCE ALSO SAYS THERE NEEDS TO BE FIVE EMPLOYEES THAT ARE, UM, A PART OF THEIR FULL-TIME EMPLOYEES. THEY'RE A PART OF THE PLAN. AND THEN ONE, CURRENTLY, ONE CITIZEN THAT IS APPOINTED AND ONE RETIREE. AND YOU CAN SEE AT THE END, RUSTY HALE IS OUR CITIZEN. UH, HE'S A GREAT MEMBER, CPA, UH, THE VACANT POSITION. CHARLIE BRIDGET, OUR FORMER ELECTRIC DISTRIBUTION DIRECTOR, UM, HE RESIGNED, WHAT, TWO MONTHS AGO, THREE MONTHS AGO, SOMETHING LIKE THAT. UM, AND SO THAT POSITION IS CURRENTLY VACANT, BUT HE WAS ON THERE FOR QUITE A LONG TIME. I HAVE TWO OTHER CRITICAL PEOPLE. THEY'RE NOT ON THE BOARD, BUT THEY ASSIST THE BOARD. UM, AMY, UM, BUTLER AND, UH, NATHAN WATSON FROM HR, THEY ACTUALLY DO THE DAY-TO-DAY STUFF. THEY, THEY ANSWER ALL THE QUESTIONS FROM EMPLOYEES. THEY HELP THEM, UH, FIGURE OUT THEIR OPTIONS AND THEIR TIMING AND ALL OF THE STUFF. AND THEY THEN ARE CRITICAL CONNECTION FROM THE EMPLOYEES TO THE BOARD. AND SO I, I WANT TO THANK THEM, UH, FOR DOING SUCH A GOOD JOB. BUT BEFORE I GO ON, I DO HAVE TO SAY THIS BOARD FOR ME, AND I KNOW I'M BIASED, BUT THIS BOARD IS PROBABLY THE HARDEST WORKING BOARD I'VE EVER BEEN A PART OF, FROM THE PERSPECTIVE OF THEY UNDERSTAND THEIR FIDUCIARY RESPONSIBILITY, THEY TAKE IT VERY SERIOUSLY. THEY ALSO REPRESENT, THEY KNOW, THEY REPRESENT A LOT OF THESE CITY EMPLOYEES THAT HAVE A LITERALLY VESTED INTEREST. UM, AND SO I WANT TO THANK THEM FOR THAT, BUT I ALSO, UM, HAVE TO POINT OUT THEY DON'T ALWAYS AGREE, UM, WHICH IS I KIND OF LOT NICE. YOU KNOW, WE HAVE A LOT OF GREAT DISCUSSION, UM, SO THAT EVERYBODY CAN FULLY UNDERSTAND WHERE WE'RE GOING, WHY WE'RE GOING, UH, WHERE WE ARE, AND, AND IT REALLY WORKS. AND SO SOMETIMES OUR MEETINGS GET A LITTLE LONG BECAUSE WE HAVE GREAT DISCUSSION, BUT I APPRECIATE THAT, AND THE BOARD DOES A REALLY, REALLY GOOD JOB. HEY, ROSS? YES. COULD YOU JUST HAVE THEM RAISE THEIR HAND SO WE KNOW WHO'S WHO OUT HERE? BOARD MEMBERS? I MEAN, LIKE BY NAME, 1, 2, 3, 4, 5 ROSS BY NAME. SAY WHO'S WHO? OH. OH, IT'S ON THE SLIDE RIGHT HERE. OKAY. I WANT, YOU KNOW, RANDY. OKAY. UM, CAROLINE'S BACK THERE. CAROLINE PIERCE? YES, WE ARE HER MADELINE'S BACK THERE. UM, BRAD, JOEL IS RIGHT THERE. KENNY STEVENS. ANTHONY MORRISON'S NOT HERE. KOBE RIGHT THERE. AND THEN BEN CURRY RIGHT THERE. YEP. AND THEN COREY IS OF COURSE OVER THERE. OKAY. OKAY, THANKS. ALRIGHT, [00:05:02] SO I'M GONNA GO THROUGH, UH, THE GENERAL PLAN COMPONENTS, PART OF, YOU KNOW, SOME OF THE MAIN THINGS THAT OUR PLAN DOES AND DOES NOT DO. UM, THIS IS ACTUALLY, UH, A PIECE OF, UH, FROM THE EMPLOYEE'S RETIREMENT PLAN SUMMARY, AND IT WAS REVISED IN JULY OF 24, SO WE'LL PROBABLY BE UPDATING IT AGAIN. UM, BUT THIS GIVES THE EMPLOYEES, IT'S ACTUALLY ON THE CITY'S WEBSITE, UH, INTERNAL WEBSITE THAT AN EMPLOYEE CAN GO TO TO FIND ANSWERS TO THE PENSION QUESTIONS THAT THEY MAY HAVE. FIRST OF ALL, OUR PLAN IS A DEFINED BENEFIT PLAN, NOT A DEFINED CONTRIBUTION PLAN. AND IT WAS LITERALLY STARTED IN JANUARY OF 1966. SO IT'S BEEN AROUND FOR A LONG, LONG TIME. THE EMPLOYEES THAT ARE COVERED BY THE PLAN ARE ALL REGULAR FULL-TIME EMPLOYEES, EXCLUDING UNIFORMED EMPLOYEES IN POLICE AND FIRE, AS WELL AS THERE ARE TWO POSITIONS LISTED IN THE ORDINANCE THAT ARE ELIGIBLE BUT AREN'T REQUIRED. IF YOU'RE A FULL-TIME EMPLOYEE OF THE CITY, YOU ARE REQUIRED TO BE A PART OF THE PLAN, BUT THE CITY MANAGER'S POSITION IS NOT REQUIRED THAT IT, THEY CAN ELECT TO BE A PART OF THAT PLAN. BUT IN THE LAST 25 YEARS, LARRY STEVENS AND SCOTT RIGBY, THOSE PLANS, THEY WEREN'T A PART OF THE PLAN. THEY GOT, UH, THEY WERE, THEY ACCEPTED THE ICMA, UM, DEFINED CONTRIBUTION PLAN THAT THEY WANTED TO BE A PART OF, WHICH WAS FINE. AND, AND SO I'M ASSUMING THAT WILL, THAT OPTION IS ALSO AVAILABLE FOR THE NEXT CITY MANAGER. SO, BUT THE CITY TREASURER, I, IT'S NOT AVAILABLE BECAUSE I'M NOT FULL-TIME. IT'S A PART-TIME POSITION. AND STEVEN CHAO FOR 30 YEARS WAS PART-TIME. AND SO IT, IT'S NOT ALLOWED FOR THE CITY TREASURER TO BE, UH, A PART OF THE PLAN. UH, BUT NO, UM, PART-TIME PEOPLE ARE ON THE PLAN. NO SEASONAL PEOPLE ARE ON THE PLAN. THAT'S ALL REGULAR FULL-TIME EMPLOYEES, WHICH IS AROUND FIVE HUNDRED AND EIGHTY, EIGHTY ONE, UH, AT THIS POINT IN TIME. OKAY. ONE OF THE QUESTIONS THAT WE ALWAYS ASK OR ASKED IS VESTING. AND OUR PLAN HAS HAD SEVEN YEARS AS A VESTING PERIOD FOR QUITE A LONG TIME. UM, THERE ARE PLANS THAT YOU MAY BE AWARE OF THAT DO FIVE YEARS, SOME THAT DO 10 YEARS. IN FACT, UM, WE'VE DISCUSSED THIS AT LENGTH AND, UH, STILL FEEL LIKE SEVEN YEARS IS PROBABLY A LEGITIMATE AMOUNT OF TIME FOR VESTING. AND SO AT THE CURRENT TIME, THAT'S WHAT WE DO. NORMAL RETIREMENT FOR ANY OF THE FULL-TIME EMPLOYEES OCCURS WHEN THEY TURN 65 AND THEY'RE VESTED. WE DON'T HAVE A POINT SYSTEM. WE DON'T HAVE 80 POINTS OF YEARS OF EXPERIENCE AND AGE OR 90 OR WHATEVER. WE'VE NEVER HAD A POINT SYSTEM. IT'S BEEN, WHEN YOU TURN 65, YOU ARE ELIGIBLE TO RETIRE AS LONG AS YOU'RE VESTED. WE DO HAVE AN EARLY RETIREMENT OPTION. SO WHEN YOU TURN 55, UM, YOU CAN RETIRE, YOU WILL RETIRE AT A REDUCED RATE, AND THERE'S CALCULATIONS THAT WILL DETERMINE WHAT THAT IS. AND I'LL GIVE YOU A PERFECT EXAMPLE. I RETIRED FROM THE CITY OF EDMOND WHEN I WAS 63, AND SO I TOOK A REDUCED RATE. UM, AND THEN FROM THAT PERSPECTIVE, UM, THE CALCULATION IS DONE BY HR. UH, GENERALLY SPEAKING, WE NOW HAVE THIS NEW SOFTWARE AND, AND IT SHOULD BE CORRECT AS WELL, SHOULD BE CORRECT. WE HAVEN'T RUN INTO ANY PROBLEMS THAT WE KNOW OF THAT WOULD SHOW OTHERWISE, BUT EARLY RETIREMENT IS, UM, SIMPLY WHEN YOU TURN 55, YOU ARE ELIGIBLE AGAIN, AS LONG AS YOU'RE VESTED. SO HOW DO WE DETERMINE, UH, WHAT YOUR BENEFITS GOING TO BE, UM, AFTER YOU RETIRE? THE FINAL AVERAGE EARNINGS ACTUALLY TAKES THE AVERAGE MONTHLY EARNINGS OF THE PARTICIPANT FOR THE HIGHEST 30 CONSECUTIVE MONTHS OF THE LAST FIVE YEARS. AND THE REASON FOR THAT IS THERE ARE EMPLOYEES THAT AS THEY GET INTO THEIR, I'M GONNA SAY OLDER YEARS, YOU KNOW, THEY MAY DO LESS, THEY MAY TAKE A LESS, UM, PAYING JOB, STAY WITH THE CITY. AND SO WE LOOK AT THEIR LAST FIVE YEARS AND THEN TAKE THE HIGHEST 30 MONTHS. THERE'S ALL SORTS OF WAYS OF CALCULATING IT. AND EVERY BENEFIT, ANY, UH, PENSION PLAN THAT YOU'VE LOOKED AT, THEY, THEY TRY TO FIGURE OUT WHAT IN THE WORLD ARE WE, HOW ARE WE GONNA DO, HOW [00:10:01] ARE WE GONNA DETERMINE THAT? AND THIS IS HOW WE DO IT. NOW, WHAT'S INCLUDED WHEN WE LOOK AT WHAT YOUR CREDITED SERVICE IS, BASIC SALARY, OVERTIME, SKILL-BASED PAY, COMP, BANK PAYOUT, PAYOUT, BONUS PAY, COMMUTER MILEAGE, CERTIFICATION, PAY, CAR ALLOWANCE, LONGEVITY, HOLIDAY PAY, STANDBY PAY, GOLF LESSONS, AND COMMISSIONS AND TIPS. SO THOSE ARE, THAT'S WHAT WE USE TO ACTUALLY DETERMINE WHAT YOUR FINAL HIGHEST 30 CONSECUTIVE MONTHS OF THE LAST FIVE YEARS, THAT'S WHAT YOUR FINAL AVERAGE EARNINGS IS. WHO MANAGES THE RETIREMENT PLAN? YES. RUSS, BEFORE YOU GO FOR JUST KIND OF, I DON'T KNOW WHY THIS DIDN'T HIT ME WHEN WE WERE TALKING, AND I, I DON'T KNOW, MAYBE ACTUARILY, THIS DOESN'T HAVE MUCH TO DO WITH IT, BUT WHEN YOU LOOK AT VESTING, AND WE, WE, I'M GUESSING WE PROBABLY DON'T HAVE A LOT OF TURNOVER BETWEEN THAT SEVEN AND 10 YEAR PERIOD, BUT, BUT HAVE WE EVER THOUGHT ABOUT WORKING IN A GRADUATED BETWEEN THAT SEVEN AND 10, MAKE FULLY 10 AND BUT NOT FULLY SEVEN? DOES THAT, I DON'T KNOW HOW MUCH, HOW MUCH WE WOULD SEE AND HOW MUCH HELP THAT WOULD BE TO THE PLAN, BUT IT'S AN INCENTIVE TOO, RIGHT? IT'S AN INCENTIVE TO STAY ON. CORRECT. WE'VE NOT LOOKED AT THAT SPECIFICALLY. HOWEVER, EVERY YEAR WHEN THE ACTUARIAL DOES THE VALUATION, THE, THE CENSUS IS THERE BY P AGE AND HOW MANY, AND SO IT WOULD BE FAIRLY SIMPLE TO MAYBE CALCULATE THAT. YEAH, THEY'VE GOT YOUR DATA. I JUST, YEAH, YEAH, YEAH. OKAY. THAT, THAT WOULD BE SOMETHING THAT I THINK WE COULD PURSUE IN TERMS OF GIVING THE INCENTIVE, BUT ALSO BENEFITING THE PLAN, A WIN-WIN. OKAY. SO WHO DOES MANAGE THE PLAN? WELL, YOU'VE MET THEM. UH, IT'S THE ADMINISTRATIVE COMMITTEE, ALSO KNOWN AS THE PENSION BOARD. AND WE ARE REQUIRED TO MEET EVERY TWO MONTHS. UM, THIS LAST TWO YEARS, IT'S BEEN LIKE EVERY MONTH FOR A WHILE BECAUSE WE HAD SO MUCH TO TALK ABOUT. BUT BASICALLY WE WERE REQUIRED TO MEET EVERY TWO MONTHS. AND THIS GROUP BEHIND ME, THEY ESTABLISH AN ENFORCED NECESSARY RULES, PROCEDURES, DECIDES ALL QUESTIONS CONCERNING ELIGIBILITY, DETERMINES THE PERSON OR PERSONS TO WHOM BENEFITS SHALL BE PAID. AND THAT'S CRITICAL. IT COMPUTES THE AMOUNT OF BENEFITS, AND THAT'S SOMETHING NOW THAT OUR, UM, THAT WE VERIFY. BUT ALSO OUR NEW SOFTWARE WILL PROVIDE AND AUTHORIZE THE PAYMENT OF BENEFITS. AND SO, UM, CURRENTLY WE ACTUALLY HAVE ABOUT 250 EMPLOYEE RETIREES AND BENEFICIARIES RECEIVING MONTHLY PAYMENTS, AND THAT'S AUTH AUTHORIZED THROUGH HR TO BANK OF OKLAHOMA. AND THEN THEY SEND OUT THE CHECK EVERY MONTH, AND THAT'S HOW IT'S DONE. WE ALSO HAVE, UM, INVESTMENTS OF THE PLANS, FUNDS. UH, THAT'S A, A HUGE RESPONSIBILITY FOR THIS GROUP AND, AND REALLY DOES, I'M GOING INTO SOME DETAIL ABOUT THAT, BUT IS A REALLY CRITICAL PART OF THE, THE ADMINISTRATIVE COMMITTEE'S RESPONSIBILITIES. WE DO HAVE AN INVESTMENT CONSULTANT, DUCI, AND THEY'VE BEEN OUR INVESTMENT CONSULTANT FOR QUITE A LONG TIME. UM, WE DID GO OUT FOR AN RFP EARLIER THIS YEAR, AND WE'LL BE COMING TO YOU, UH, ONCE CONTRACTS ARE, UH, FIGURED OUT AND, AND, UH, CORRECT AND, UM, GIVE YOU THAT RECOMMENDATION. WE HAD THREE RESPONSES AND, UH, ONE OF THEM WAS REALLY, REALLY HIGH, AND ONE OF 'EM WAS TWO GUYS THAT DECIDED THEY WANTED TO START A FIRM ON MANAGING PLANS AND OUT OF UTAH. AND, AND THEN FIDUCIA WAS THE MIDDLE ONE, AND WE ARE GONNA RECOMMEND FIDUCIA AGAIN, BUT FIDUCIA DOES A LOT OF, OF, UH, DATA ANALYSIS ON OUR FINANCIAL, EVERY ONE OF OUR ASSETS IN, IN OUR PORTFOLIO, AND THEY DO A GREAT JOB. WE ALSO MEET QUARTERLY WITH THEM. UM, OUR INVESTMENT CONSULTANT IS STEVEN SPENCER. UM, HE'S BEEN OUR CONSULTANT FOR QUITE A LONG TIME AS WELL. HE KNOWS OUR HISTORY. HE KNOWS HOW THINGS HAVE DEVELOPED AND GROWN IN OUR PLAN, AND HE UNDERSTANDS OUR, UM, UM, CONSERVATIVE APPROACH TO INVESTMENTS. I THINK THAT WOULD BE THE BEST WAY OF SAYING IT. THE CITY ORDINANCE ALSO PROVIDES THAT EVERY TWO YEARS WE ARE REQUIRED TO DO AN INDEPENDENT ACTUARIAL. UM, WE ACTUALLY DO ONE NOW EVERY YEAR. IF I WENT BACK TO 2000, 2001, [00:15:01] 2002, THEY, WE WERE LITERALLY DOING ONE EVERY TWO YEARS. WE WEREN'T DOING AN ANNUAL, UH, ACTUARIAL EVALUATION. AND IN ABOUT 2005 OR OH SIX, WE CHANGED THAT. SO THAT WE DO ONE EVERY YEAR. AND I AM REALLY, I'D BE UNCOMFORTABLE DOING ONE EVERY TWO YEARS. THINGS CHANGE TOO MUCH WITH THE MARKET AND WITH OUR WHOLE ENVIRONMENT THAT I WOULD WANT TO STAY ON TOP OF THAT. AND SO WE HAVE DECIDED TO DO ONE EVERY YEAR, AND IT WILL DETERMINE THE LEVEL AT WHICH CONTRIBUTIONS MUST BE MADE TO CONTINUE TO MEET THE PLAN'S LIABILITIES. NOW, I UNDERLINED THAT BECAUSE THAT'S REALLY CRITICAL FOR ME. UM, WHEN THE ACTUARIAL PROVIDES THE DATA, THEY SAY, OKAY, HERE'S WHAT THE RATE NEEDS TO BE. THE TOTAL RATE NEEDS TO BE TO FUND YOUR FULLY FUND YOUR PLAN. NOW GRANTED, THERE'S A WHOLE LOT OF ASSUMPTIONS GOING OUT, AND THERE'S POTENTIAL FOR, FOR UNDERESTIMATING OR OVERESTIMATING, BUT THAT'S WHY WE PAY THE ACTUARIAL . BUT IT IS CRITICAL THAT WE THEN TAKE A LOOK AS A BOARD, AND THEN WE MAKE A RECOMMENDATION TO YOU AS TO WHAT THAT, IF WE'RE GOING TO FUND IT ACCORDING TO THE ACTUARIAL AMOUNT, OR IF WE'RE GOING TO DO LESS OR EVEN MORE. AND I'LL TALK ABOUT THAT IN A LITTLE BIT. WE DO HAVE AN INVESTMENT POLICY STATEMENT, AND, UH, FIDUCIA ACTUALLY HELPS US WORD THIS SO THAT THE MONEY MANAGERS THAT ARE INVOLVED WITH OUR PORTFOLIO ACTUALLY UNDERSTAND THAT JARGON. THE LAST ONE WE DID UPDATED WAS A SEPTEMBER OF 23. WE DO AN UPDATE ABOUT EVERY TWO OR THREE YEARS. SO WE'RE IN THAT TIMEFRAME WHERE WE'RE GONNA BE NEEDING TO UPDATE AGAIN, BUT YOU HAVE A COPY OF THAT, UH, JUST WHEN YOU HAVE NOTHING BETTER TO DO. YOU CAN READ THAT AND, AND LOOK INTO IT, BUT IT IS A VERY CRITICAL PART OF IDENTIFYING NOT ONLY TO, TO YOU AND TO THE PUBLIC, BUT TO POTENTIAL INVESTORS, WHAT OUR REQUIREMENTS ARE. AND THEY KNOW THEY HAVE TO STAY WITHIN THOSE. AND IF THEY DON'T, DUCI RECOMMENDS THAT THEY GET BOOTED, AND THAT'S THEIR JOB. DUCI DOES A QUARTERLY, UM, REPORT THAT I GAVE YOU EARLIER AND IS A PART OF THIS PACKET. UM, IT HAS A LOT OF INFORMATION AS TO NOT JUST OUR OWN PLAN AND OUR ABILITY TO LOOK AT DIFFERENT ASSET CLASSES AND SEE WHICH ONES ARE WORKING, WHICH ONES ARE, ARE NOT DOING VERY WELL, BUT ALSO TAKES A STEP BACK AND SAYS, HERE'S WHAT THEY SEE ECONOMY WISE. WHAT'S THE, WHAT'S THE UNITED STATES LOOKING LIKE NOW? AND WHAT DOES THAT, HOW'S THAT POTENTIALLY GOING TO AFFECT US? I HOPE YOU HAD TIME TO LOOK AT SOME OF THAT DETAIL, BECAUSE IT REALLY DOES HELP DRIVE SOME OF THE DISCUSSION THAT OUR BOARD HAS IN TERMS OF TRYING TO DECIDE IF OUR ASSET ALLOCATIONS CORRECT. DO WE NEED A DIFFERENT BALANCE? ARE WE MISSING AN OPPORTUNITY? UH, CONSIDERING WE'RE VERY CONSERVATIVE IN OUR, UH, INVESTMENT STRATEGY, UM, WE STILL WANT MONEY MANAGERS THAT PERFORM ABOVE THE AVERAGE. AND SO THAT'S SOMETHING THAT WE LOOK AT. THAT'S SOMETHING THAT FIDUCIARY IS MONITORING ON A REGULAR BASIS. ONE OF THE THINGS I DID WHEN I STARTED AS CITY TREASURER SEVERAL YEARS AGO WAS, AND I WAS BACK ON THE BOARD, WAS I WAS CONCERNED ABOUT WHAT OUR PLAN OR MARKET VALUE REALLY WAS, AND HOW HAS IT CHANGED AND IS IT GROWING THE WAY I THINK IT IS OR WHAT'S HAPPENING? SO I WENT BACK TO JUNE 30TH OF 21 AND THE MARKET VALUE COLUMN IN THAT YELLOW SHOWS, IT WAS, AT THAT TIME IT WAS 103, ALMOST $104 MILLION WAS OUR MARKET VALUE. SIX MONTHS LATER IT GREW TO 107 MILLION. OKAY? YAY. AND SEPTEMBER 30TH HIT, COVID HIT, AND WE DROPPED $20 MILLION. SO WE WENT FROM 106 MILLION, NOT 107 MILLION, DOWN TO 83 MILLION IN A VERY SHORT, ABOUT NINE MONTHS. AND IT WAS ALL COVID RELATED, OBVIOUSLY. IT WAS, I WONDERED IF, IF YOU HAD HEAVIER THAN NORMAL RETIREMENT WITHIN THAT PERIOD OF TIME, OR IF IT WAS . NO, IT WAS REALLY MORE INVESTMENT LOSS. IT REALLY WAS. THE, THE NUMBER OF RETIREMENTS PROBABLY HAD SOME IMPACT, BUT MORE ON AN OUTGOING BASIS, NOT A DIRECT VALUE BASIS. SO THEN, UM, AFTER SEPTEMBER 30TH, 2022, THREE YEARS, LITERALLY THREE YEARS FROM THERE, UH, A FEW WEEKS AGO, SEPTEMBER 30TH OF 25, OUR MARKET VALUE WAS UP TO [00:20:01] 127 MILLION. SO YOU CAN SEE HOW WE'VE RECAPTURED, UH, THE LOSS AND HAVE GROWN, UH, FAIRLY WELL. UM, I CAN TELL YOU THAT WHEN YOU'RE GOING THROUGH THE DUCI, UH, QUARTERLY REPORT, UM, IF YOU'RE NOT, WE HAVE ABOUT 25% OF OUR PORTFOLIO INVESTED IN INTERNATIONAL MARKETS, EMERGING MARKETS. THEY'RE IN THE, THEY'VE BEEN IN THE LAST 6, 7, 8, 9 MONTHS. OH, 30%. IT'S BEEN CRAZY. OUR OTHER INVESTMENTS THAT WE TYPICALLY SEE SOME GOOD RETURN ON IN TERMS OF OUR LARGE CAP, THEY'RE STILL GROWING, BUT NOT NEARLY TO THAT EXTENT. THEY JUST, THEY'RE, THEY'RE DOING OKAY, BUT NOTHING LIKE, UH, THE EMERGING MARKETS OR INTERNATIONAL, UH, FUNDS THAT WE HAVE INVESTED IN. THE, THE INTERNATIONAL'S BEEN THE DRIVER. AND I, I THINK IT'S GOOD THAT YOU'RE THERE. WHEN INTERNATIONAL THOUGH, HAS A LITTLE BIT MORE VOLATILITY TO IT, THEN IT'S FIDUCIARY, HOPEFULLY WILL MAKE A CALL. I'M NOT SAYING AT THE VERY TOP, BUT, BUT CLOSE TO, YOU KNOW, AND THEN THAT'S ALSO ON PAGE 56, WHY WHATEVER WE CALL THE, I, I CALL IT THE RISK MM-HMM . ANALYSIS WITH THE PLOTS. YES. THAT'S WHY WE'RE A LITTLE BIT RIGHT OF CENTER ON THE RISK, WHICH IS FINE IF THAT'S WHERE THE BOARD'S COMFORTABLE WITH, BUT, BUT, BUT IT HAS TO BE THAT INTERNATIONAL THAT'S PROBABLY PUSHING IT JUST A AHEAD. IT IT IS. AND THAT'S ALWAYS A DISCUSSION WHEN WE LOOK AT THAT DETAIL. WHICH SECTOR ARE WE MAKING MONEY AND WHICH SECTOR ARE WE JUST DOING? OKAY? AND THAT IS VERY FLUID, AS YOU KNOW, AND IT'S SOMETHING THAT WE HAVE TO TAKE SERIOUSLY. AND IF WE WANT TO ADJUST THOSE ALLOCATIONS, ALL WE HAVE TO DO IS TAKE A LOOK AT IT AND DIRECT FIDUCIARY TO DO SO. AND DO THEY GIVE YOU DECENT FEEDBACK ON WHAT I CALL, WHAT I THINK IT'S PAGE 52, THE EFFICIENT FRONTIER, WHERE THEY DO, THEY, THEY REALLY DO GIVE US, AND THEY, THE, THE GOOD THING ABOUT WHAT STEVE SPENCER DOES AND WHAT FIDUCIA DOES IS THEY ALSO GIVE US OPTIONS. THEY DO SOME ANALYSIS AND THEY SAY, OH, THIS ONE, YOU BETTER WATCH OUT. AND WE'LL LITERALLY PUT 'EM ON WATCH. BUT THEN IF THEY MAKE A RECOMMENDATION TO CHANGE, THEY GIVE US OPTIONS AND TELL US WHY, AND THEN ALL THE CALCULATIONS AND WE SIT DOWN TOGETHER AND, AND DECIDE, OKAY, LET'S, LET'S EITHER MAKE A CHANGE OR NOT MAKE A CHANGE. AND SO IT'S SOMETHING THAT WE LOOK AT QUARTERLY, AT LEAST QUARTERLY, YEAH. ROSS. YES. SO YOU'RE SHOWING 11.45% ANNUAL CHANGE. THAT'S JUST THE FIRST THREE QUARTERS OF THIS CALENDAR YEAR? YES. YES. DO YOU KNOW WHAT THE CHANGE IS OVER THE LAST TWO QUARTERS? IT'S ABOUT 28%. I'M SORRY, SAY THAT AGAIN. 28%. 28. 27%. OKAY. YEAH. YEAH. OKAY. BUT I, I DO LIKE TO KEEP TRACK OF THAT BECAUSE THIS IS, COMPARATIVE ANALYSIS IS HELPFUL FOR ME. UM, WITHOUT 127 MILLION DOESN'T MEAN ANYTHING. IF I DIDN'T KNOW IN SEPTEMBER OF 22, IT WAS 83 MILLION. SO THAT'S, I THINK THAT'S HELPFUL. SO HOW DO WE FUND OUR PLAN OTHER THAN OUR INVESTMENTS OF 127 MILLION? UH, OBVIOUSLY THE ACTUARIAL TAKES A LOOK AT OUR, ALL OF OUR ASSETS AND ALL OF OUR LIABILITIES, AND THEY DO THEIR THING GOING WAY OUT 30 YEARS OR WHEREVER, AND THEN THEY MAKE A, A DETERMINATION AS TO WHAT OUR FUNDING RATE IS. THEY DON'T CARE IF THE, IF THE FUNDING RATE IS SPLIT 50 50 OR IF THE CITY PAYS A HUNDRED PERCENT, THEY DON'T CARE. DOESN'T MATTER TO THEM. THEY JUST SAY TO FULLY FUND YOUR PLAN FOR THIS NEXT YEAR, YOU SHOULD BE AT THIS RATE. WELL, CURRENTLY OUR COMBINED RATE IS 17.94. THE CITY PART OF THAT IS 11.94, AND THE EMPLOYEE'S RATE IS 6%. AND THAT'S WHAT IT'S BEEN SINCE FISCAL YEAR 2021. PRIOR TO THAT, IT WAS FIVE AND A QUARTER PERCENT, AND I'LL GO INTO THAT A LITTLE BIT MORE LATER. SO THAT'S HOW WE SPLIT. IT'S ALMOST A TWO-THIRDS, ONE-THIRD SPLIT. THE LAST TIME THE CITY RATE AND THE EMPLOYEE RATE WERE EQUAL WAS IN 2004, AND BOTH THE CITY PUT IN FIVE AND A QUARTER, AND THE EMPLOYEE PUT IN FIVE AND A QUARTER AFTER THAT. IT STARTED BEING THE CITY, UH, ABSORBING THE ENTIRE INCREASE UNTIL 2021 WHEN WE DECIDED THAT THE CITY'S RATE JUST COULDN'T KEEP GOING UP AND ABSORBING A HUNDRED PERCENT OF THE INCREASE. AND THAT'S WHEN THEY WENT FROM FIVE AND A QUARTER FOR AN EMPLOYEE TO SIX. AND IT HASN'T CHANGED SINCE THEN. [00:25:04] HOWEVER, AT OUR JULY MEETING, THE PENSION BOARD, UNANIMOUS UNANIMOUSLY APPROVED RECOMMENDING TO YOU TO FUND THE 25 26 PENSION PLAN AT THE TOTAL COMBINED RATE OF 18.43%. THAT'S WHAT THE ACTUARIAL, UH, RECOMMENDATION IS, WHICH IS ALMOST A HALF A PERCENT UP FROM THE 17 9 4. THE CITY'S RATE WOULD, UH, INCREASE TO FROM 11 9 4 TO 12.29, WHICH IS TWO THIRDS OF THAT HALF A PERCENT, THE EMPLOYEE'S RATE WOULD REC INCREASE FROM 6% TO 6.14%, WHICH IS THE OTHER THIRD. BUT, UM, IT WOULD NOT START UNTIL THE FIRST PAYROLL IN 26. SO IN HALF A YEAR, UH, COMING UP JANUARY. AND OBVIOUSLY THEN MY QUESTION WAS, WELL, WHAT'S THAT GONNA COST THE CITY? 'CAUSE ALL THE DEPARTMENTS HAVE TO PUT MONEY INTO THAT, AND THEY HAVE TO PAY THAT. AND THERE'S, I HAVE A BREAKDOWN OF EXACTLY WHERE THE MONEY'S GONNA COME FROM. IT'S ABOUT AN $80,000 INCREASE, UH, FROM WHAT CURRENTLY IS BUDGETED. UM, AND I THINK I GAVE YOU A BREAKDOWN OF THAT. DID I NOT, DID I GIVE YOU A SPREADSHEET ON, ON THE DEPARTMENTS THAT WOULD PAY THAT? IT'S NOT IN THIS PACKET, BUT I THOUGHT I HAD GIVEN IT TO YOU GUYS EARLIER. IF NOT, I WILL MAKE SURE YOU, YOU SEE THAT TO KNOW WHERE THE MONEY'S ACTUALLY DIDN'T COME FROM. IS IT COMING, UH, WHICH DEPARTMENT'S PAYING THE MOST, WHICH DEPARTMENT'S PAYING THE LEASE? BUT EVERY DEPARTMENT HAS BEEN, UM, ALLOCATED THIS 78,886. ONE OF THE QUESTIONS THAT THIS BOARD OBVIOUSLY SPENDS A LOT OF TIME DISCUSSING. UM, AND SO I DID SOME ANALYSIS AND SOME RESEARCH TO TRY, TRY TO FIGURE OUT HOW WE COMPARE TO OTHER CITIES IN OKLAHOMA. WE HAVE A TOTAL RATE OF 17.94, AND THEN WHAT OUR CURRENT SPLIT IS. BUT HOW DO WE COMPARE TO OTHER OKLAHOMA CITIES? UM, 17.94 SOUNDS LIKE A LOT TO ME. UM, IT SOUNDS HIGH. I CAN'T SAY THAT IT IS UNTIL I DID THE, THE RESEARCH THAT SHOWED THIS. WHAT I FIRST DID WAS I WENT TO, OKAY, MRF, WHICH IS OKLAHOMA MUNICIPAL RETIREMENT FUND. IT'S AN OKLAHOMA GROUP THAT WHERE THERE'S 145 CITIES THAT JOINED THAT GROUP. THEY DON'T WANT TO ADMINISTER THEIR OWN PLAN. THEY DON'T HAVE THE EXPERTISE, THEY DON'T HAVE THE TIME, THEY DON'T HAVE THEIR PERSONNEL, WHATEVER THE REASON IS, THEY PAY O-K-M-R-F TO ACTUALLY DO THEIR PLAN, AND THEY ACTUALLY OFFER SIX DIFFERENT PLANS, AN EXPENSIVE PLAN, AND A VERY CHEAP PLAN AND EVERYTHING IN BETWEEN. BUT HERE'S WHAT SOME OF THEM, AND I, I THINK I GAVE YOU THE FULL LIST, BUT I JUST PULLED OUT SOME OF THE CITIES THAT KIND OF MADE SENSE TO ME. UM, FIRST OF ALL, THE, THE WEIGHTED AVERAGE OF ALL 145 CITIES IS HAVING A CITY RATE OF 12.61 AND AN EMPLOYEE RATE OF 4.68. SO THE AVERAGE WAS ABOUT 17.29. THAT KIND OF MADE ME FEEL A LITTLE BIT BETTER ABOUT OUR 1794 THAT WE WEREN'T, YOU KNOW, 10% ABOVE EVERYBODY ELSE. BUT THEN YOU GO DOWN THE LIST AND YOU CAN SEE THE CITY RATE, UM, STARTING AT 10.46 FOR EL RENO, GUTHRIE, 10.89, ET CETERA, ET CETERA, GOING ON DOWN UNTIL YOU GET TO NICHOLS HILLS AT 17.24. UM, I DON'T KNOW WHAT'S GOING ON IN BRA, BUT 30.3% IS A LOT . WOW. UM, ESPECIALLY WHEN THE EMPLOYEES ARE PAYING SIX. BUT THEN YOU LOOK AT NICHOLS HILLS AT 17.24 FOR THE CITY AND 11% FOR THE EMPLOYEES. SO THEY'RE ALL OVER THE BOARD, BUT THE GENERAL AMOUNTS OR SPLITS ARE FAIRLY CONSISTENT. OBVIOUSLY THESE ARE SMALLER CITIES. THEY'RE NOT EDMOND SIZE. SO I CONTACTED STILLWATER, OKLAHOMA CITY, NORMAN, TULSA, AND SEVERAL OTHERS THAT DIDN'T RESPOND. AND SO WHAT I'D LIKE TO SHOW YOU, STILLWATER DOES NOT HAVE A DEFINED BENEFIT PLAN. THEY HAVE A DEFINED CONTRIBUTION PLAN, AND THEY, THE CITY PUTS IN 6%, THE EMPLOYEES PUT IN THREE, STILL TWO TO ONE, BUT IT'S 9% TOTAL. UH, HALF OF WHAT OURS IS. OKLAHOMA CITY ACTUALLY OFFERS BOTH. WHEN YOU GO INTO AND, AND ARE HIRED BY THE CITY OF OKLAHOMA CITY, YOU GET TO CHOOSE BETWEEN A DEFINED BENEFIT [00:30:01] PLAN OR A DEFINED CONTRIBUTION PLAN. YOU DON'T GET BOTH. YOU HAVE TO CHOOSE ONE, BUT THE RATES ARE RELATIVELY SIMPLE OR BASIC. IT'S 50 50 ALMOST. IT'S JUST PRETTY, PRETTY COMMON. NORMAN HAS A DEFINED CONTRIBUTION PLAN. THE CITY PUTS IN EIGHT, THE EMPLOYEE PUTS IN SIX, AND THEN THERE'S TULSA. TULSA HAS A DEFINED BENEFIT PLAN. THE CITY'S PUTTING IN 17% AND THE EMPLOYEES ARE PUTTING IN 8%. SO THEIR TOTAL IS 25%. AND I CALLED THEM UP AND BECAUSE I FOUND THAT, AND I WENT, NO, I'M, I'M SOMETHING'S WRONG. SO I CALLED HIM AND I SAID, OKAY, YOU NEED TO EXPLAIN TO ME WHY IN THE WORLD YOU ARE SO HIGH, 17% FOR THE CITY, 8%, THAT'S A 25%. WELL, THE STORY IS THAT IN 2016, THEY HAD AN ACTUARIAL THAT SAID, WHOA, YOU ARE WAY UNDERFUNDED. YOU HAVEN'T, THEY HADN'T BEEN FUNDING IT ACCORDING TO THE ACTUARIAL RECOMMENDED RATE. AND NOW IT CAUGHT UP AND SOMEBODY NOTICED THAT IT WAS WAY UNDER, SO IT, THE RECOMMENDED, UH, RATE WAS 17 AND EIGHT. WELL, THEY ALSO THEN DECIDED AND HAS A, THEY HAVE A POLICY THAT SAYS THEY WILL NOT CHANGE THE 17% OR THE 8% UNTIL THEIR ASSET LIABILITY RATIO IS 120%. THEY'RE NOT THERE YET. EVEN THOUGH SINCE 2016 THEY'VE BEEN PUTTING IN 25%, THEY'RE STILL NOT WHERE THEY WANT TO BE. AND SO UNTIL THEY GET THAT RATIO WHERE THEY WANT IT, THAT'S NOT GONNA GO DOWN. THAT CITY, UH, RATE OF 17 WILL PROBABLY STAY THERE FOR QUITE A WHILE. THAT'S THE PROBLEM WITH NOT FULLY FUNDING YOUR PLAN. UM, BUT OF COURSE, THEY OBVIOUSLY HAD TO HAVE REASONS, AND IT WASN'T ONE YEAR AT A TIME. I MEAN, I MEAN, LITERALLY IT WAS ONE YEAR AT A TIME. IT WASN'T JUST ONE YEAR THAT THEY DIDN'T, IT WAS AN CUMULATIVE EFFECT OF NOT ADEQUATELY FUNDING THE PLAN, AND THEN THEY HAD TO PAY, PLAY CATCH UP IS WHAT THEY'RE DOING. I WANTED TO SHOW THIS, UM, TO TRY TO GIVE YOU A, JUST A SENSE AS TO AT LEAST IN THE LAST NINE YEARS, UM, HOW WE'VE MOVED, UH, GOING BACK TO 1718, AT THE BOTTOM, YOU KNOW, THE CITY'S RATE WAS 9.45, AND THE EMPLOYEE RATE WAS FIVE AND A QUARTER. IT WAS STILL ABOUT A TWO THIRDS, ONE THIRD, BUT OUR TOTAL RATE WAS 14 SEVEN IN 2021. WHEN WE CHANGED THE EMPLOYEE RATE FROM FIVE AND A QUARTER TO SIX, YOU CAN SEE THAT THE CITY RATE WAS 9.82 AND THEN JUMPED TO 11. THAT WAS A, THAT HUGE INCREASE FROM 15.07 TO 17%. THAT 2%, THAT WAS A LARGE INCREASE. WE HAD NOT SEEN THAT TYPE OF INCREASE FOR QUITE A WHILE. UM, FORTUNATELY IT MAINTAINED ITSELF FOR, UH, FOR A WHILE UNTIL LAST YEAR, UH, FISCAL YEAR 24, 25, THE TOTAL RATE WAS 17 9 4. AND THE, THE REAL DRIVER OF THAT, THERE WERE TWO THINGS THAT HAPPENED. UM, THE EMPLOYEE'S, UH, PAY SCHEDULE WAS COLLAPSED. AND INSTEAD OF HAVING FOUR AND A HALF PERCENT, I THINK FOUR AND A HALF PERCENT BETWEEN STEPS, IT WENT UP TO, OH, WENT TWO, WENT TO FOUR. OKAY. SO THEY, THEY REDUCED THE STEPS, BUT INCREASED THE, THE RATE. AND THAT HAD A SIGNIFICANT IMPACT ON THE TOTAL PAYROLL, OBVIOUSLY. UM, THEY ALSO, WE ALSO LAST YEAR RECEIVED THE, THE RETIREES RECEIVED A COLA, UM, THE COLA THAT WAS A COLA THAT HADN'T BEEN GIVEN SINCE 2014. AND SO THERE WAS, UH, FINALLY A COLA GIVEN LAST YEAR THAT THAT ALSO COST, UH, BECAUSE NOW 250, UH, RE UH, BENEFICIARIES AND RETIREES ARE GETTING MORE MONEY AND THEY'RE GONNA GET MORE MONEY FOREVER, RIGHT? SO THOSE TWO REALLY PROBABLY INCREASED AND HAD AN IMPACT MORE THAN ANYTHING ELSE. UM, I WANTED TO SHOW WHAT IS, YOU KNOW, WE COULD TALK ABOUT THE RATES, BUT WHAT DOES THAT MEAN IN DOLLARS, RIGHT? WHAT, WHAT ARE WE TALKING ABOUT AS FAR AS HOW MUCH MONEY THAT IS? WELL, LOOKING BACK AT THE BOTTOM AGAIN, FIFTH FISCAL YEAR, 1718, THE CITY'S RATE IN THE GREEN COLUMN, THE SECOND COLUMN THERE AT 9 4 5, THE CONTRIBUTIONS OF THE CITY AT THAT TIME WAS $2.6 MILLION INTO THE PLAN. THE EMPLOYEE RATE OF FIVE AND A QUARTER, THE EMPLOYEES PUT IN $1.5 MILLION. [00:35:02] SO WE PUT IN BASICALLY $4 MILLION INTO THE PLAN. SO THAT FUNDED, UM, WHATEVER THE ACTUARIAL SAID WE NEEDED TO FUND, PLUS OUR INVESTMENT EARNINGS. AND YOU CAN SEE HOW THAT CHANGED GOING EVEN TO FISCAL YEAR 23, 24. NOW WE WERE, THE CITY PUT IN 4.3 MILLION, AND THE EMPLOYEES NOW AT 6% PUT IN 2.3 MILLION. SO IT WAS A $6.6 MILLION CONTRIBUTION, TOTAL CONTRIBUTION LAST YEAR. THE CITY'S, UH, CONTRIBUTION WAS 4.8 MILLION. THE EMPLOYEES WERE 2.4 MILLION, SO WE WERE AT 7.2 MILLION. YOU CAN SEE HOW THAT TOTAL CONTRIBUTION HAS NOT ONLY INFECTED THE CITY, BUT ALSO THE EMPLOYEES. TWO YEARS AGO. IT'S HARD TO BELIEVE IT'S BEEN TWO YEARS, HUH? YEAH. TWO YEARS AGO WE HAD A RETREAT AND WE SIMPLY ASKED THE QUESTION OF THIS WONDERFUL 46 PAGE ORDINANCE, WHAT WORKS, WHAT IS STILL ACCURATE IN HERE? WHAT DOESN'T SEEM TO WORK ANYMORE? WHAT NEEDS TO BE CLEANED UP? WHAT CHANGES WOULD WE LIKE TO RECOMMEND TO THE PLAN? AND WE SPENT THE ENTIRE DAY AT KICKING BIRD DISCUSSING POSSIBLE CHANGES TO THE ORDINANCE THAT WE WOULD MAKE RECOMMENDATIONS TO YOU. UM, WE ACTUALLY LOOKED THROUGH, UH, SECTIONS AND ITEMS DISCUSSED THROUGHOUT THE TWO YEAR PROCESS INCLUDE, FOR EXAMPLE, WE TALKED ABOUT THE FORMAL FINAL AVERAGE EARNINGS. DO WE WANT TO CHANGE HOW WE CALCULATE THE AVERAGE EARNINGS? AND AT THIS POINT IN TIME, THE BOARD FELT LIKE THERE WASN'T ANY NEED TO MAKE A CHANGE, RECOMMEND THE CHANGE. WE DID HAVE, WHOOPS, 1, 2, 5. WE DID HAVE THE, UH, WE ALWAYS HAVE ANNUAL CREDITED INTEREST. UM, THAT INTEREST IS ALWAYS GIVEN ON THE EMPLOYEE'S PORTION OF THE CONTRIBUTION. SO IF AN EMPLOYEE THROUGHOUT THE YEAR ENDS UP GIVING, PUTTING INTO THE PLAN $500, THEY GET INTEREST ON THAT, AND THERE'S THIS LONG ONE PAGE CALCULATION THAT DETERMINES HOW MUCH INTEREST THEY CAN GET. WELL, THEY'RE GUARANTEED 5%, BUT THEY POTENTIALLY, BASED ON THIS CALCULATION, COULD GET MORE. AND IF IT ACTUALLY IS LESS, THEN WE CARRY OVER AND WE HAVE THIS REALLY CONVOLUTED AMOUNT OF PROCESS THAT EVENTUALLY YOU COULD END UP WITH 20%. IT DEPENDS ON TIMING AND FROM YEAR TO YEAR'S GROWTH, WE'VE TALKED ABOUT THAT. WE ARE NOT READY TO MAKE A RECOMMENDATION ON THAT. 5% SEEMS LIKE A GOOD RATE. UM, IT'S A FAIR RATE. UM, YOU KNOW, FROM AN INVESTMENT PERSPECTIVE, THE LAST, UM, LAST YEAR, THE CITY'S INVESTMENT EARNINGS OVER ON TREASURIES AND, AND CD CEDARS BASICALLY WERE, WAS AT THE 5% LEVEL. SO IT SEEMED TO MAKE SENSE, HOWEVER, TWO YEARS AGO OR THREE YEARS AGO, IT WAS AT TWO AND A HALF, MAYBE THREE. SO 5% WAS REALLY GOOD. UM, SO THIS IS SOMETHING THAT WE NEED TO SPEND SOME TIME ON AS A BOARD TO TRY TO FIGURE OUT IS THIS STILL FAIR TO THE EMPLOYEES AND FAIR TO THE CITY? SO WE'RE NOT READY TO MAKE A RECOMMENDATION. WE TALKED ABOUT EARLY RETIREMENT, NOT FROM THE STANDPOINT OF CHANGING THE 55 YEAR AGE, BUT WE HAD SOME DISCUSSION ABOUT POTENTIAL EMPLOYEES THAT HAVE REALLY PHYSICALLY CHALLENGING JOBS EVERY DAY. AND, AND, AND A PERFECT EXAMPLE WAS AN ELECTRICAL LINEMAN. I DON'T THINK THE CITY WANTS A 55, 60-YEAR-OLD PERSON CLIMBING AN ELECTRIC POLE, JUST FROM A LIABILITY STANDPOINT. THEY MAY BE ABLE TO DO IT, BUT IT'S PROBABLY NOT A GOOD IDEA. SO WHEN THAT TYPE OF THING OCCURS, MAYBE IT'S BEST FOR THE CITY TO, TO GIVE THEM ADDITIONAL RESPONSIBILITIES, BUT NOT SUCH PHYSICALLY CHALLENGING POSITIONS. WE TALKED AT LENGTH ABOUT THAT. THE PROBLEM IS WHERE DO YOU DRAW THE LINE? THERE ARE A LOT OF PHYSICALLY CHALLENGING POSITIONS IN THE CITY, AND WE WEREN'T COMFORTABLE WITH IDENTIFYING WHO'S MORE CHALLENGING THAN THE OTHERS . AND SO WE'RE NOT GONNA RECOMMEND A CHANGE IN THAT. UM, THOUGH THERE COULD BE SOME LEGITIMATE ARGUMENTS ABOUT THAT. UH, WE JUST DIDN'T FEEL LIKE WE NEEDED TO GET INTO THAT BECAUSE I'M NOT SURE THERE'S A GOOD ANSWER. VESTING PERIOD. AS I SAID EARLIER, UM, WE TALKED ABOUT THE FIVE YEAR, UM, TALKED ABOUT THE TENURE YEAR [00:40:01] AND FELT LIKE SEVEN WAS LITERALLY IN THE MIDDLE FOR A GOOD REASON, THOUGH. I THINK, UH, A COUNCIL MEMBER FRAME WILL PURSUE THAT IN TERMS OF TRYING TO SEE WHAT TYPE OF INCENTIVE. IF WE GO TO 10, WHAT WOULD THAT LOOK LIKE? ESPECIALLY RETIREMENT. WE WERE TALKING ABOUT POSSIBLE REDUCTION IN RETIREMENT OPTIONS. UM, WE HAVE 10, 12, 12 OR 13 OPTIONS TO RETIRE FROM. AND THERE, THERE ARE WAY TOO MANY OPTIONS. THERE'S ABOUT THREE OR FOUR OF 'EM THAT HAVE NEVER BEEN USED. SO WE'RE GONNA RECOMMEND THAT WE GET 'EM OFF THE ORDINANCE, GET 'EM OUTTA THERE, DELETE 'EM. UM, AND THAT'LL BE JUST AN ORDINANCE CHANGE. UM, WE'RE NOT ASKING TO CHANGE ANY OF THOSE. WE'RE PROBABLY JUST REDUCING OR ELIMINATING SOME OF THOSE OPTIONS THAT ARE NOT NECESSARY. UM, WE ALSO LOOKED AT LUMP SUM BENEFIT. SEVERAL OF OUR OPTIONS ALLOW A RETIREE TO TAKE A LUMP SUM INSTEAD INSTEAD OF ANNUITY. THAT'S FINE. WE'VE SEEN IN THE LAST THREE YEARS A SIGNIFICANT NUMBER OF RETIREES TAKING FULL LUMP SUM, WHICH IS FINE. IT'S THEIR OPTION. THEY CAN DO THAT. THE PROBLEM IS, IT'S, IT'S ON THE SHORT SIDE, SHORT END. IT'S A CASHFLOW ISSUE FOR US, RIGHT? WE, WE WE'RE GONNA HAVE TO PAY THAT. WE'RE GONNA HAVE TO LIQUIDATE SOME OF THOSE INVESTMENT EARNINGS AND GET THAT CASH OUT THERE. UM, AND IT'S ENTIRELY UP TO THE EMPLOYEE, UH, HOW THEY WANNA DO THAT. AND IF THEY WANNA DO THAT, WE DO KNOW THAT THERE ARE SOME PLANS, DEFINED BENEFIT PLANS THAT ACTUALLY ALLOW A LUMP SUM BENEFIT, BUT THEY RESTRICT MAYBE 50% SOME PERCENTAGE THAT YOU CAN TAKE. BUT YOU CAN'T TAKE A HUNDRED PERCENT. WE HAVE NO RESTRICTION AT THIS POINT IN TIME. WE'RE NOT MAKING ANY RECOMMENDATION TO CHANGE THAT, THOUGH. IT IS SOMETHING THAT WE HAVE TO WATCH BECAUSE IT IS A CASH FLOW ISSUE. RETIREMENT INCOME, UM, SPECIFICALLY WITH MINIMUM SURVIVING SPOUSE ISSUES, BENEFICIARIES THAT ARE AT LEAST 18 YEARS OLD. OUR ORDINANCE DOESN'T CLARIFY SOME OF THIS STUFF. AND TALKING TO LEGAL, UM, AND JOHN PEPPERONIS AS WELL. UM, THERE'S SOME CLARITY THAT WE NEED TO PUT IN THE ORDINANCE SPECIFICALLY ON THIS ISSUE. AND SO THAT'LL BE COMING TO YOU AS WELL. ADMINISTRATION. UM, WE, WE HAVE EXPENSES THAT, UH, WHEN JOHN PEPPERONIS, UM, DOES A REVIEW FOR, FOR TAYLOR, HE'S GONNA CHARGE US. THAT'S AN ADMINISTRATIVE EXPENSE. WE HAVE, UM, OUR ACTUARIAL, THAT'S AN ADMINISTRATIVE EXPENSE. WE HAVE, UM, OPTIONS TO GO TO TRAINING FOR THE BOARD MEMBERS. THAT'S ADMINISTRATIVE EXPENSE, THOUGH. OUR ORDINANCE DOESN'T REALLY CLARIFY THAT. AND THERE IS A STATE LAW THAT WAS CONCERNING AT STATE STATUTE 48 DASH 1 0 3 B THAT SAID YOU CAN'T PAY EXPENSES FROM PEOPLE'S BENEFIT MONEY, BASICALLY. SO WE ASKED JOHN PEPPERONIS TO MAKE SURE WE WERE OKAY, AND HE FEELS LIKE WE ARE, BUT HE WANTS US TO CLARIFY WHAT ARE WE TALKING ABOUT SPECIFICALLY ABOUT EXPENSES SO THAT IT JUST CAN'T BE WHATEVER WE DECIDE. IT'S, IT'S GOTTA BE LISTED IN THE ORDINANCE AND IT'S CURRENTLY NOT. UM, ANOTHER THING THAT WE DO, EVERY MEETING AMY PUTS IN FRONT OF US A PAPER, THE, THE LITERALLY THE APPLICATION TO RETIRE AND ALL THE CALCULATIONS FOR THAT PARTICULAR EMPLOYEE. AND IT MIGHT BE THREE OF THEM, FIVE OF THEM, 10 OF THEM. AND IT'S GOT ALL THIS INFORMATION ABOUT THEM AND WHAT THEY'VE SELECTED AND WHAT THE COST IS. AND WE LOOK AT THAT AND WE SAY, ANY PROBLEM WITH ANY OF THESE? AND THERE'S NEVER BEEN A PROBLEM. SO THEN WE HAVE TO LITERALLY HAND THEM BACK, GET RID OF THE PAPER. 'CAUSE WE DON'T WANNA KEEP THAT PERSON INFORMATION. WELL, THE BOARD'S DISCUSSED, TRYING TO AVOID HAVING TO HAVE THE BOARD DO THAT AND HAVE IT DONE ADMINISTRATIVELY. IF THEY QUALIFY, THEN IF AN EMPLOYEE MEETS ALL OF THE QUALIFICATIONS, ALL I THINK WE NEED TO SEE IS WHO'S RETIRING WHEN AND GET THAT LIST AND WE CAN APPROVE THE LIST. I DON'T THINK I WANNA SEE THE DETAIL. IT'S NOT, IT'S NOT MY INFORMATION, RIGHT? I CAN SEE THE TOTAL COST OF EVERYBODY, BUT I FEEL LIKE WE COULD DO A BETTER JOB OF, OF DEALING WITH THE ADMINISTRATIVE ASPECT OF THOSE APPLICATIONS [00:45:01] THAN WE'RE DOING CURRENTLY. THE ONLY EXCEPTION IS WHEN WE HAVE A DISABILITY APPLICATION, THERE'S SOME VERY SPECIFIC REQUIREMENTS FOR DISABILITY RETIREES THAT THE BOARD HAS TO BE INVOLVED IN. JUST THERE'S NO WAY AROUND IT. WE ARE REQUIRED TO DO IT. FIDUCIARILY. UH, THEN THE MAKEUP OF THE PENSION BOARD, AS YOU NOTICE AT THE VERY FIRST SLIDE, UM, THERE ARE SIX POSITIONS. UM, THERE ARE FIVE EMPLOYEES. WE FEEL LIKE WE WOULD BENEFIT FROM HAVING ANOTHER CITIZEN ON THE BOARD, SO IT WOULD BE TWO CITIZENS. WE ALSO FEEL LIKE IT'D BE BENEFICIAL TO HAVE ANOTHER RETIREE ON THE BOARD. SO WE WOULD HAVE TWO RETIREES, AND THEN WE WOULD TAKE THE CITY CLERK'S POSITION OUT AS FAR AS REQUIRED. IT'S NOT THAT COREY COULDN'T BE ON THE BOARD, BUT HE COULD BE ON THE BOARD AS AN EMPLOYEE, NOT AS A POSITION OF THE CITY. AND SO SOME OF THOSE CHANGES WE'RE GONNA ALSO, UH, MAKE A RECOMMENDATION TO YOU IN THE ORDINANCE. AND THEN THERE IS A TON OF CLARIFYING A CONSISTENCY LANGUAGE THROUGHOUT THAT. TAYLOR AND COREY BOTH LOOKED, AND I'M GLAD YOU GUYS LIKE THAT STUFF BECAUSE IT DRIVES ME CRAZY. THAT'S NOT NUMBERS. IF YOU CAN, YOU KNOW, 46 PAGES OF NUMBERS AND I'M OKAY WITH THAT , YOU KNOW. SO THOSE ARE THE CHANGES THAT, UM, WE ARE GOING TO BE MAKING A RECOMMENDATION TO, UH, IN THE NEXT FEW, A COUPLE MONTHS ANYWAY, I'D LIKE TO DO IT BEFORE THE END OF THE YEAR. WE ALSO WILL BRING TO YOU, UM, A FIDUCIARY CONTRACT, UM, NOW THAT WE'VE GOT THE FINAL CONTRACT WORDING FOR, UM, DONE, UH, ACCORDING TO, UH, TAYLOR'S REQUEST AND THEY AGREED TO THAT. SO IT'S, IT'S BEEN SENT IN LAST WEEK AND THEN ALSO A SEPARATE ITEM ON ACTUARILY RECOMMENDED FUNDING RATE AND SPLIT THAT WE TALKED ABOUT EARLIER. SO THAT'S ABOUT IT. AND I AM MORE THAN WILLING TO TRY TO ANSWER QUESTIONS OR GIVE YOU INFORMATION THAT, UM, I, I FAILED TO GIVE YOU EARLIER. UM, BUT IF YOU HAVE ANY QUESTIONS OR ISSUES, I FELT LIKE IT WAS REALLY IMPORTANT AND THE BOARD AGREED THAT BECAUSE WE HAVE SO MANY NEW MEMBERS THAT YOU ALL CAN SEE THE BIGGER PICTURE OF HOW THIS ALL WORKS BEFORE WE ASK YOU TO CHANGE IT. SO, WELL, I JU I'D JUST LIKE TO SAY TO THE BOARD, I GUESS I THANK YOU THERE. TO ME, THERE'S NOTHING HARDER THAN MANAGING SOMEBODY ELSE'S MONEY. I MEAN, IT'S ONE THING TO MANAGE YOUR OWN, YOU KNOW, THE RISK REWARD THERE, BUT TO TRY TO MAXIMIZE EVERYBODY'S, AND THERE'S, THIS IS A LARGE NUMBER OF PEOPLE TO MAXIMIZE EVERYBODY'S RETURNS SO THAT THEIR CONTRIBUTION STAYS AS LOW AS POSSIBLE AND TO, TO ALSO PROTECT IT AS A FIDUCIARY. SO THAT'S, THAT'S A REALLY, REALLY DIFFICULT THING. THE OTHER THING I HOPE I'M SURE WE ARE DOING, CAROLINE PROBABLY FALLS ON YOU, BUT IN, IN, HOW DO I SAY THIS? UM, MAKING, MAKING ALL OF OUR EMPLOYEES, ESPECIALLY THE YOUNGER ONES, AWARE OF WHAT A TREMENDOUS BENEFIT THIS IS AND HOW, HOW MUCH MORE RARE THIS DEFINED BENEFIT PLAN BECOMES EVERY DAY. MM-HMM . SO, I MEAN, I THINK, I THINK IT'S, UH, IT, IT IT'S A GREAT, GREAT BENEFIT, A GREAT ASSET AND I KNOW YOU GUYS PUT IN A LOT OF TIME WITH IT, SO THANKS. UM, I'LL ECHO THE THANKS TO YOU ALL WHO DIG INTO THE DETAILS HERE. APPRECIATE IT. I THINK IT'S NEAT. YOU GUYS DID A RETREAT TO KIND OF DEEP DIVE THIS. THAT'S A GOOD IDEA AND PROBABLY SOMETHING WE SHOULD DO MORE OFTEN ON OUR POLICIES AND ORDINANCES JUST TO GIVE 'EM A FRESH SCRUB WHEN WE HAVE TIME TO PAUSE OUR BRAINS AND THINK ABOUT STUFF. UM, YOU DIDN'T MENTION ROSS, THE, UH, PERFORMER. YOU KNOW, I THINK YOU AND I TALKED ABOUT THAT ON THE SIDE, BUT ONE OF THE DATA POINTS IN MY HEAD ON THE PENSION IS THE PERFORMER FEEDBACK EVERY YEAR, WHICH IS OUR ANNUAL KIND OF INDEPENDENT ASSESSMENT OF CITY'S FINANCIALS THAT EVERY YEAR SAYS THAT WE ARE UNDERFUNDING MM-HMM . OUR PENSION PLAN. UM, YOUR TULSA COMMENT MADE ME, REMINDED ME OF THAT. SO I LOOK BACK AT IT ON MY SCREEN HERE, BUT CAN YOU JUST COMMENT ON THAT AND HOW YOU SEE THAT IN THIS CONTEXT? WELL, ONE OF THE THINGS, UM, AN ACTUARIAL HAS TO DO IS MAKE A, A WHOLE BUNCH OF ASSUMPTIONS, USE CERTAIN DEATH STUDIES, IF YOU WILL, AND LITERALLY LOOK AT EVERY EMPLOYEE AT TODAY AT THIS POINT IN TIME AND MAKE SOME ASSUMPTIONS AS TO WHEN THEY'RE GOING TO RETIRE AND IF THEY CONTINUE IN THE JOB THEY'RE [00:50:01] DOING, WHAT THEY POSSIBLY COULD MAKE AND THEN WHAT'S THAT LIABILITY GONNA LOOK LIKE, LIKE DOWN THE ROAD. SO THERE'S, IT'S A WHOLE LIST OF ASSUMPTIONS TO COME UP WITH THAT RATE. WHAT FRANK CRAWFORD DOES IS HE DOESN'T HAVE TO WORRY ABOUT WHAT'S MAKING ANY ASSUMPTIONS. HE GETS TO LOOK AT THE DATA, HE LOOKS BACKWARDS, RIGHT? AND HE GOES, OH, THIS PERSON RETIRED. WELL, THE ACTUARIAL MAY HAVE NOT KNOWN THAT THAT PERSON WAS GONNA RETIRE AND ACTUALLY PUT 'EM OUT HERE. MM-HMM . SO HE'S LOOKING AT REAL DATA AND IT'S ACCURATE AND IT IS SOMETHING THAT I WANNA LOOK AT BECAUSE I WANNA MAKE SURE THAT IF WE ARE UNDERFUNDED AT THE END OF THE YEAR, THAT OUR ACTUARIALS TAKES THAT INTO ACCOUNT FOR THE NEXT RATE INCREASE OR CHANGE. I THINK THE THING THAT STANDS OUT TO ME IS IT'S, IT'S LIKE A 10 YEAR TREND OF US BEING PROBABLY ON AVERAGE 75% FUNDED. YEP. AND, YOU KNOW, IMMEDIATELY, AS LONG AS THE CASH FLOWS, I GUESS THAT'S OKAY, BUT EVENTUALLY THAT WE'LL BITE US. RIGHT. AND IF A FLOOD OF PEOPLE RETIRE AND TAKE THE LUMP SUM LIKE YOU SAID, THEN WE MAY BE IN TROUBLE THERE. RIGHT? EXACTLY. EXACTLY. I THINK ONE OF THE THINGS THAT, UM, THIS BOARD, UM, CHUCK DEAN COMES IN ONCE A YEAR FROM DALLAS AND HE SPENDS A LOT OF TIME GOING THROUGH OUR ASSUMPTIONS. AND I'LL GIVE YOU AN EXAMPLE. OKAY. LET'S, LET'S SAY WE WANT SEVEN AND A HALF PERCENT GROWTH. WELL, DID WE, IS THAT STILL A GOOD NUMBER? MM-HMM . IS THE ECONOMY SUCH WHERE IT NOW MAYBE SHOULD BE FIVE, UH, WHICH WOULD HURT THE PLAN OR, YOU KNOW, HE HAS TO LOOK AT ALL THOSE AND HE TALKS ABOUT TO US WHAT OUR OPTIONS ARE FOR HIM TO APPLY THOSE NEW CRITERIA. AND PERHAPS THAT'S ONE OF THOSE THINGS BECAUSE IT'S BEEN A 10 YEAR TREND THAT MAYBE WE NEED TO TIGHTEN THAT DOWN. UM, AND UNDER, I DO KNOW THAT THE, I CALL IT A DEATH STUDY, BUT THERE'S THIS, THIS STANDARD THAT'S UPDATED EVERY SO OFTEN. I THINK EVERY 10 YEARS THEY UPDATE A DEATH STUDY. SO ACTUARIALS CAN USE THAT FOR THAT PURPOSE. THAT MAY BE SOMETHING THAT WE ARE USING NOW THAT NEEDS TO BE UPDATED TO BE MORE ACCURATE. WELL, ONE OF THE THINGS WE WOULD HAVE TO KNOW, ONE OF THE THINGS IN THE LAST COUPLE YEARS THAT'S MADE US UNDER HAS TO BE THE IMPACT OF THE, WHAT I'LL CALL MANIPULATED FINANCIAL MARKET, WHICH HAS DEPRESSED INVESTMENT INCOME DRASTICALLY. NOW, IF THAT'S GONNA, IF THAT WOULD BE A CONTINUED THING, WE'D NEED TO, WE NEED TO READJUST THE O THE OTHER THING IS, I THINK I, I DON'T KNOW IF YOU'VE EVER HAD A QUANTITATIVE ANALYSIS DONE ON FREEZING AND FLIPPING, BUT, BUT THERE, THERE ARE TO SAY TREMENDOUS COST IN THE FIRST FEW YEARS OF DOING THAT. RIGHT. AND I THINK THAT'S WHAT UN UNLESS YOU'VE SEEN THOSE NUMBERS, PEOPLE THINK IT LOOKS GREAT TO FLIP THIS TO A DEFINED CONTRIBUTION PLAN, FREEZE IT, THOSE WHO ARE IN IT, IT LOCKED IN AND WHERE THEY ARE AND THEN THEY IT, BUT IT, BUT THERE'S THERE, IT'S NOT A PANACEA IN OTHER WORDS. SO THERE'S A WHOLE LOT THAT GOES INTO IT. YEAH. THERE WOULD BE MY BRIEF UNDERSTANDING AND, AND I DID MENTION THIS TO, UH, CHUCK DEAN, UH, BECAUSE I KNOW HE'S EXPERIENCED THOSE CHANGES WITH SOME OF HIS CLIENTS, THAT THEY'VE ACTUALLY MADE THOSE CHANGES. SO HE HAS SOME REAL LIFE EXPERIENCES AND SOME DATA THAT WOULD WORK. I WAS MORE INTERESTED IN, OKAY, IF WE DID THAT AND WE FROZE AND WE STARTED TO DO FINAL CONTRIBUTION, WHEN, WHEN DO WE START SEEING THIS, YOU KNOW, WE'RE GONNA SEE THIS, BUT THEN WHEN DO WE START? IS IT FIVE YEARS FROM NOW, 10 YEAR, 10 YEARS FROM NOW? YOU KNOW, SO THAT'S THE TYPE OF, UH, ANALYSIS HE'D BE ABLE TO DO AND, AND HAS THAT EXPERIENCE WITH, I I WAS GONNA ASK ABOUT THAT. 'CAUSE MY COMPANY PROBABLY, LIKE A LOT OF FOLKS, THEY WENT AWAY FROM DEFINED BENEFIT PLANS MANY YEARS AGO AND FROZE IT. AND, UM, THERE'S A REASON COMPANIES ARE DOING THAT BECAUSE IT'S, YOU KNOW, THESE PLANS DON'T STAY FINANCIALLY VIABLE UNLESS WE'RE SORT OF LUCKY AND RIGHT. CAREFUL ABOUT IT. UM, DID YOU ALL TALK ABOUT HAVING, ADDING A DEFINED OR A, WE, WE DID NOT DIFFERENT TYPE. UM, OUR, OUR, OUR RETREAT WAS SPECIFICALLY TO LOOK AT ORDINANCE CHANGES, OUR CURRENT PLAN. OKAY. WE DIDN'T TALK ABOUT HOW WOULD IT, WHAT WOULD IT LOOK LIKE IF WE CHANGED FROM A DEFINED CONTRIBU OR DEFINED BENEFIT PLAN TO A DEFINED CONTRIBUTION PLAN. NOW OBVIOUSLY WE DO HAVE A 4 57 PLAN NOW THAT AN EMPLOYEE CAN PAY INTO AND, BUT IT'S A HUNDRED PERCENT THEM. WE'RE NOT PARTICIPATING AS A CITY. MM-HMM . UM, BUT WE HAVE NOT TALKED ABOUT THAT. IT'S NOT BEEN ANY PART OF OUR DISCUSSION, NOT NECESSARILY FLIPPING IT, [00:55:01] BUT HAVING, ADDING THE OPTION, UM, LIKE OKLAHOMA CITY. YEAH. GIVING YOU THE OPTION. I DID WANT TO, IF I CAN PUT CAROLYN ON THE SPOT FOR A MINUTE. OKAY. CAN I, I'M CURIOUS HOW YOU ALL VIEW THIS FROM A, FROM AN HR AND JUST A CITY EMPLOYEE PERSPECTIVE, IS HOW MUCH OF AN INCENTIVE IS THE PENSION PLAN, UH, VERSUS HAVING THE REQUIREMENT TO PUT INTO THE PENSION PLAN A DISINCENTIVE? IS THERE A TRADE OFF THERE OR HOW DO YOU, HOW DO YOU ALL SEE THE PENSION PLAN AS AN INCENTIVE? THAT'S A REALLY GOOD QUESTION. AND I WOULD SAY IT'S PROBABLY VIEWED BOTH WAYS. YOUR YOUNGER EMPLOYEES WILL ASK THINGS LIKE, CAN I OPT OUT OF THAT? BECAUSE I WOULD RATHER HAVE THAT MONEY IN MY POCKET. MM-HMM . UM, BUT I THINK ONCE THEY BECOME AWARE OF THE BENEFIT AND THEY SEE, HEY, THIS IS FOR YOUR FUTURE, AND THEY, AND THEY BUY INTO THAT MM-HMM . THEN THEY UNDERSTAND IT. I HAVE ONE OF MY STAFF MEMBERS HERE, I'M GONNA CALL 'EM DESTINY. SO DESTINY IS A NEWER STAFF MEMBER. SHE'S NOT AS YOUNG AS SOME OF MY STAFF MEMBERS, BUT SHE'S STILL YOUNG. UM, BUT I SAY THAT WAS, NO, I JUST SAID NOT AS YOUNG. UM, WOULD YOU VIEW IT AS A BENEFIT THAT IS AN INCENTIVE TO STAY? YES. YEAH. ESPECIALLY AFTER OF BEING VESTED AT SEVEN YEARS THAT I CAN STAY IN THE PLAN, EVEN IF FOR SOME REASON I LEAVE THE CITY, BECAUSE I THINK THAT'S A REALLY GOOD OPTION. I ALSO LIKE THAT IT'S A STABLE RETIREMENT VERSUS 4 57. I ALSO CO TO THAT, THAT'S I PREVIOUS RETIREMENT, UM, THAT'S NOT ALWAYS AS STABLE. I LOOK AT IT ALMOST EVERY DAY AND IT'S CONSTANTLY UP AND DOWN. SO I REALLY ENJOY HAVING THE PENSION. OKAY. CAROLINE, I THINK IT'D BE HELPFUL. YOU MAY HAVE SOME OF THOSE, BUT WHAT, WHAT ARE WE AT 6% EMPLOYEE CONTRIBUTION? YES. LET'S SHOW 6% AT 20 YEARS AND THEN SHOW THE FULL WHAT THE CITY'S PUTTING IN AND THE, AND THE, THE COMPOUND EFFECT OF THAT. IT'S LIKE IF WE OFFER I'D, I'D BE VERY INTERESTED TO SEE OKLAHOMA CITY'S DATA ON THE NUMBER OF PEOPLE THAT PICK A DEFINED CONTRIBUTION PLAN OVER A DEFINED BENEFIT PLAN AT THE SAME EXACT RATE. I MEAN, MAYBE I'D THINK TWICE ABOUT EMPLOYING THAT PERSON, BUT, YOU KNOW, I, I MEAN THAT LOGIC ESCAPES ME. SO, BUT, BUT ANYWAY, I, I THINK YOU CAN HAVE JUST THREE OR FOUR SCENARIOS OF HOW THAT GROWS AND TO SHOW THEM, OKAY, HERE'S YOUR 6%, GO DO SOMETHING ELSE WITH IT VERSUS PUTTING IT HERE COMBINED WITH THE CITY'S CONTRIBUTION AND YOU GET WHY AT 20 YEARS, 30 YEARS. SO JUST AN IDEA. YEAH, I WANNA LET OTHER PEOPLE TALK TOO. I JUST WANTED TO GET YOUR THOUGHTS ON THAT. THANK YOU. I THINK FROM MY PERSPECTIVE, JUST BIG PICTURE WHAT, YOU KNOW, WE'RE ALL TRYING TO MAKE THE SAME BALANCE HERE, WHICH IS WE WANT TO GIVE EMPLOYEES A PEN, A, UH, AN INCENTIVE. WE WANT TO GIVE THEM SECURITY FROM ON THE CITY SIDE. WE ALSO NEED TO BALANCE THAT WITH, UM, VIABILITY AND FINANCIAL RESPONSIBILITY. SO THAT'S HOW I'M LOOKING AT IT, JUST TRYING TO BALANCE ALL THE DIFFERENT FACTORS HERE AND DOING, PUTTING OUR CITY ON A, A PATH WHERE 20 YEARS FROM NOW OR WHENEVER THAT WAVE WERE TO HIT, IF WE WERE TO MAKE SOME CHANGE, THAT WE'RE IN A BETTER OFF POSITION, YOU KNOW, FOR EVERY, FOR ALL PARTIES INVOLVED. SO THAT'S, I CAN REMEMBER BEFORE I RETIRED, I WAS ON THE PENSION BOARD AND THE RATES, AS YOU SAW, WERE GOING UP AND UP AND UP AND, AND, AND WE HAD NOTHING IN OUR POLICY TO EVEN ADDRESS THE CITY EMPLOYEE RATE CHANGE. SO WE DISCUSSED AND, AND I MADE A MOTION THAT SAID, WHEN THE CITY'S RATE BECOMES 10, WE'VE GOTTA TALK ABOUT THE EMPLOYEE RATE. NOT THAT, DIDN'T SAY WE HAD TO RAISE IT, WE HAD TO AT LEAST TALK ABOUT IT AND GET IT IN THE MINUTES THAT WE WERE TRYING TO UNDERSTAND THE IMPACT. IT WAS SHORTLY AFTER THAT OBVIOUSLY, THAT THEN THEY SAW THAT THEY HAD TO RAISE IT BECAUSE IT WAS JUST GETTING OUT OF HAND. AND I, I THINK THAT'S PART OF THIS GROUP'S, UM, VIEW AS TO MAYBE THE BALANCE OF TWO THIRDS, ONE THIRD IS MAYBE SKEWED, UM, A LITTLE BIT, BUT THE BENEFIT OF THE DEFINED EVENT PLAN IS STILL VERY, VERY STRONG. MR. MOORE, MS. MURDOCH, NICHOLS, ANY QUESTIONS, COMMENTS YOU WANNA ADD TO IT? NO, YOU'RE GOOD. I'VE GOT ONE THING I'D LIKE, I'D LIKE FOR YOU [01:00:01] TO DO, UM, BEFORE YOU START THROWING CHANGES AT US HERE IN A COUPLE OF MONTHS. OKAY. WOULD YOU GO BACK, YOU DON'T HAVE TO PULL IT BACK UP, BUT ON SLIDE NINE OR 10 YOU HAD THE RETIREMENT CONTRIBUTION, UM, RATE BACK THE COMPARISON FOR THOSE CITIES. I WOULD LIKE TO SEE BROKEN ARROW, LOTTON, MOORE, AND ENID, WHICH ARE REALLY ROUND OUT THE TOP 10 CITIES POPULATION WISE IN OKLAHOMA. YOU, YOU, YOU DID PICK THE ONES THAT I CONTACTED AND DIDN'T, DIDN'T RESPOND, BUT I WILL TRY AGAIN. . OKAY. WELL AND IF, IF YOU NEED A LITTLE ASSISTANCE, I KNOW SEVERAL OF THOSE MAYORS SO WE CAN POKE 'EM A LITTLE BIT. SO YOU SAID BROKEN ARROW, BROKEN ARROW, ENID, ENID, MOORE, MOORE AND LAWTON. YES. MIGHT CHECK WITH RAYMOND TOO. WHAT ARE THEY DOING UP THERE? ? WELL, THEY MAY ONLY HAVE FIVE EMPLOYEES AND THEY'RE SET FOR RETIREMENT. . YEAH. BUT I'LL BE GLAD TO, TO TRY TO CONTACT THE RIGHT. THANK YOU. APPRECIATE IT. IT WAS CURIOUS TO ME, THOSE CITIES SPECIFICALLY. YEAH, AND IT SHOULD BE FAIRLY EASY TO GET FROM, I EVEN TRIED, I WENT ONLINE AND TRIED TO GO ON THE WEBSITE TO FIND THEIR ORDINANCE AND I COULDN'T FIND THEM. SO, OKAY. I MAYBE IT WASN'T LOOKING IN THE RIGHT PLACE. OKAY. I, I DO APPRECIATE ALL OUR WORK THAT YOU HAVE DONE AND THAT THE BOARD HAS DONE TO GET US TO THIS POINT. SO I THINK WE'RE ALL LOOKING FORWARD TO THE RECOMMENDATIONS YOU BRING TO US. ANY OTHER COMMENTS WITH THAT? UH, MR. VANDERHAM, WOULD YOU LIKE TO ADJOURN YOUR MEETING? UM, I THINK THE PENSION BOARD MEETING IS NOW ADJOURNED. ALL THOSE IN FAVOR? RAISE YOUR HAND. THANK YOU, . AND NOW I WOULD ENTERTAIN A MOTION FOR US TO ADJOURN. I HAVE A MOTION. DID I GET A SECOND FROM ANYBODY? SECOND. OKAY. CAST YOUR VOTE. MOTION PASSES. FIVE ZERO. WE ARE ADJOURNED. THANK YOU SO MUCH. * This transcript was created by voice-to-text technology. The transcript has not been edited for errors or omissions, it is for reference only and is not the official minutes of the meeting.