A meeting of the Governing Board of the Colorado Retirement Association was held on September 17, 2021, at 9:00 a.m.
The following were present at the meeting:
- Chris Felton, Board Chairman
- Paul Danley, Vice Chairman – Participated by Zoom
- Darius Allen, Board Member – Participated by Zoom
- Tobe Allumbaugh, Board Member – Participated by Zoom
- Jerry DiTullio, Board Member – Participated by Zoom
- Adam Ford, Board Member
- Terri Schafer, Board Member
- Tim Mullen, Executive Director
- Ed Krisor, Legal Counsel
- Mike Whalen, Retirement Plan Services Director
- Doug Farmen, Chief Financial Officer
- Matt Evans, Retirement Services Coordinator
- Lois Kruse, Office Administrator
- Marilyn Collister, Senior Director, Regulatory Affairs, Government Market, Empower – Participated by Zoom
- Trish McGinity, Head of Cybersecurity Communications, Empower – Participated by Zoom
Chris Felton, Board Chairman, called the meeting to order at 9:03 a.m.
Mr. Felton asked members of the Board if they reviewed the minutes from the August 20, 2021 meeting and if there were any comments. There being none, a motion was made by Tobe Allumbaugh to approve the minutes as presented. Darius Allen seconded the motion. All Board members voted aye and the motion passed.
Mr. Felton announced two additions to the meeting’s agenda. First, a CRA Activities Update to follow Empower’s Fiduciary Training and Legislative Update. Second, an action item to discuss and vote on authorizing an administrative fee waiver for the month of October.
CRA staff joined the meeting, both in-person and via Zoom, for the Cyber Security Presentation, Fiduciary Training, and Legislative Update, presented by Empower, CRA’s recordkeeper.
Empower Cybersecurity Presentation:
Trish McGinity, Head of Cybersecurity Communications at Empower Retirement, began her presentation with an overview of the importance of cybersecurity diligence in the financial and retirement industries. Ms. McGinity discussed features that make Empower unique and a leader in data protection methods and strategies. A proprietary single-system recordkeeping platform, redundant server models, hybrid cloud services through Amazon Web Services, Empower’s size and economies of scale are just some of the beneficial features.
Ms. McGinity reviewed how Empower meets or exceeds the Department of Labor’s cybersecurity guidelines. Empower participates in the Spark Institute’s cybersecurity meetings and performs frequent internal and external security testing in an effort to remain at the forefront of cybersecurity technology.
Ms. McGinity also discussed Empower’s cybersecurity guarantee, tips for selecting a service provider with strong cybersecurity practices, security recommendations published by the Department of Labor and Empower’s own cybersecurity guidelines. The presentation concluded with various questions from the CRA Board and Staff. Tim Mullen thanked Ms. McGinity for her presentation and she left the meeting.
Fiduciary Training and Legislative Update:
Marilyn Collister, Senior Director of Regulatory Affairs for Government Markets at Empower, opened her presentation with a review of CRA’s fiduciary responsibilities, including an explanation of the duties of loyalty and prudence. Ms. Collister also discussed how companies mitigate fiduciary risk. Some examples included having written policies and procedures and to administer the plans in compliance with those requirements.
Ms. Collister moved on to the legislative update portion of her presentation by discussing the re-introduction of the “Secure a Strong Retirement Act of 2020” (SSRA) expected to be passed with bipartisan support by the House of Representatives and the bi-partisan re-introduction of the “Retirement Security and Savings Act” (RSSA) in the Senate. She reviewed the similarities and differences between these Bills, provided insight into the provisions of each Bill, and discussed various implications if these Bills are combined and passed.
Ms. Collister ended her presentation by mentioning two Bills aimed at changing or eliminating the Windfall Elimination Provision (WEP). First, Marilyn discussed the “Public Servants Protection and Fairness Act of 2021” which proposes replacing WEP with a new formula to pay future Social Security benefits. Next Ms. Collister explained the “Social Security Fairness Act” which would fully repeal WEP. Doubt was expressed that either Bill would pass without increasing amounts that higher wage earners contribute to Social Security.
CRA Activity Updates:
Tim Mullen noted that CRA client service manager meetings for individuals and employers are occurring both in-person and virtually. In response to some areas experiencing surges in COVID cases due to the Delta variant, certain in-person employer benefit fairs this fall have been cancelled or reorganized as virtual.
Mr. Mullen updated the Board regarding the Town of Frederick. CRA will receive 457(b) contributions from the town beginning in October, following four New Employee Orientation meetings held in September. CRA expects to roll out the Town of Frederick’s 401(a) plan January 1st. CRA also met with administration and employees from the Town of Johnstown to present the CRA plans and answer questions about becoming participants, investments, and the expected transition. Johnstown is expected to begin making 457(b) contributions in November. CRA expects to roll out the Town of Johnstown’s 401(a) plan January 1st. CRA is working with the Town of Severance for a possible 457(b) plan rollout late this year or early next year.
Tim Mullen and Adam Ford discussed CRA’s meeting with Garfield County Sheriff’s Department which detailed available plan features and how CRA’s plans can be customized to meet their needs. CRA will also be meeting with the Fremont County Board of County Commissioners in October to discuss current plan design and the availability of alternate plan features and flexibility.
Mr. Mullen detailed CRA’s attendance and participation at the Colorado Public Plan Coalition Annual Conference and the Special Districts Association Annual Conference as well as CRA’s upcoming attendance at and sponsorship of the Colorado Municipal League’s Annual Conference.
CRA employers are showing increasing interest in more automation with data transfers and paperless enrollments. New hire Client Service Managers have completed their onboard training and have been assigned their employer territories. CRA’s annual audit will begin next Monday September 20th. CRA expects to present the audit report at the next Board meeting for Board approval.
Complimenting Empower’s cybersecurity presentation, Mr. Mullen informed the Board about CRA’s recent cybersecurity updates. Tim also discussed CRA’s full turnkey document and plan approach, significantly reducing employer’s fiduciary duties as it relates to retirement plan management.
Chris Felton called for a short break, and the meeting resumed at 10:41 a.m.
Doug Farmen, CRA’s new Chief Financial Officer, noted the August 31, 2021 year-to-date blended rate of return for both the 401(a) and the 457(b) plans is 10.74%. CRA’s plan loan rate remains at 4.25%. Loans balances are up 3.0% from this time last year. The average loan balances have increased as well, up 8.0% in the 401(a) plan and 7.0% in 457(b) plan. Also as of August 31st, year-to-date distributions from the plans exceed contributions into the plans.
Doug Farmen and Tim Mullen presented the Plan and Association financial statements for the fiscal year-ended June 30, 2021. This discussion reviewed the balance sheets, income statements, fiscal year-end budget versus actual, and the Association’s general ledger.
Chris Felton introduced a discussion proposing an Administrative Expense Fee Waiver for participants for the month of October. Tim Mullen explained that based on the financial update presented, current cash reserves, and the anticipated cost of the fee waiver, CRA should be able to remain net income positive for the fiscal-year-endingJune 30, 2022. The timing of the proposed fee waiver coincides with October being National Retirement Security Month. CRA discussed offering another fee waiver in the Spring of 2022. Adam Ford moved to approve the October 2021 Fee Waiver. Terri Schafer seconded the motion. All Board members voted aye and the motion passed.
Chris Felton asked the members of the Board if there were any questions or concerns regarding the expense reports. There being none, the reports were accepted as presented.
At 11:09 a.m. Chris Felton made a motion to go into Executive Session pursuant to 24-6-402(4)(f) C.R.S. for the purpose of discussion of staff personnel matters. Darius Allen seconded the motion and it passed unanimously.
The Executive Session ended at 11:52 a.m.
The public session of the CRA Board of Directors meeting resumed at 11:52 a.m. Adam Ford moved to accept the recommendations discussed in the Executive Session. Darius Allen seconded the motion and it passed unanimously.
The next meeting of the CRA Board of Directors will be held on Friday, October 22, 2021.
There being no further business to come before the board, Mr. Felton adjourned the meeting at 11:53 a.m.