Quarterly Investments Increases
Last Quarter of the Fiscal Year
NON-CERTIFICATED EMPLOYEES RETIREMENT PLAN
December 20, 2007 Volume 33
Clifton Gunderson’s
Annual Auditor’s Report
Brings Good News
Mr. Mike Hillary of Clifton Gunderson had
indicated the annual auditor’s report was
conducted in accordance with auditing
standards generally accepted in the
United States of America. In his opinion,
the financial statements were represented fairly, in all material respects, the financial status of the
Non-Certificated Employees Retirement Plan of the Junior
College District of St. Louis, St. Louis County, Missouri as of
June 30, 2007. Also, the changes in the Plan’s financial status for the year ended in conformity with accounting principles generally accepted in the United States of America.
A brief summary of the audits financial highlights are as follows; the net assets available for benefits at the beginning
of year, July 1, 2006, equaled $56,542,321, compared to the
net assets available as of June 30, 2007 totaled
$63,339,186, which represents an increase of nearly $6.8
million from the previous year. Total investment income was
$9,216,885, less the investment expenses of $134,647,
resulting in the total net investment income totaling
$9,082,238. Also, contributions made by the College and
participants were $887,712 each, totaling $1,775,424. Total
deductions including benefits paid to participants and administrative expenses add up to $4,060,797, and the net
increase during the auditing period was $6,796,865.
Plan enhancements that went into effect in July 2007 were
also evaluated by Mr. Hillary, and his parting comments at
the end of his presentation at the August 14, 2007 quarterly
committee meeting, were that the Plan had a good year and
is well funded.
Mr. Wilkinson, Senior Portfolio Strategist, Columbia Management,
began his quarterly report at the beginning of the November 14,
2007, NCERP quarterly committee meeting by stating the stock market, bond market, money markets and foreign markets have all been
impacted by the sub-prime mortgage situation. The Federal Reserve
has lowered rates twice and cut the discount rate by 50 percent. Due
to current conditions of the stock market, special attention has been
paid to value stocks in terms of performance in contrast with the performance of growth stocks. The conclusion is that growth stocks
have outperformed value stocks by 4.5 percent. The NCERP
Committee has determined that replacing value stocks with growth
stocks would be an excellent opportunity to increase the Plans overall growth, with minor risks. The NCERP committee unanimously
agreed to implement this change in the Plan’s portfolio.
Beginning market value of the portfolio as of July 1, 2007, was
$63,351,171. Net contributions and withdrawals were $222,522;
income earned was $446,956; and the change in market value is
$1,317,087, resulting in an ending market value as of September 30,
2007, of $64,892,693.
Report of the Annual Actuarial
Valuation as of June 30, 2007
Mr. Schisler began his report by summarizing the results of the
7/1/07 NCERP valuation. During the period July 1, 2006 – June 30,
2007, the Plan’s demographic experience was favorable. The valuation data showed actual salary/compensation increases lower than
expected, with an average of 4.10% versus the assumed 4.75%.
Also, the asset returned to the Plan was much better than anticipated with an actual 16.70% increase from investment gains versus the
assumed 7.75%. This is the best rate of investment return on Plan
assets since approximately 1999.
Continued favorable experience keeps the Plan in a positive
position for the future. The Plan remains in a surplus position in
2007, and there are no contribution shortfalls. Assets cover 92% of
benefits, and the Plan is in a strongly funded position. Mr. Schisler
suggests that this may be an opportunity to consider implementing
small to moderate Plan enhancements, but that the committee first consider updating the mortality table used in the actual valuation. The
Plan’s annual actuarial valuation was provided at the November 14,
NCERP quarterly committee meeting.
Latest News on the Voluntary
Separation Program (VSP)
Nineteen Plan participants are leaving the College under the provisions of the Voluntary Separation Program. Mr. Hayden has contacted each participant. One participant intends to take the 50/50
option, seven will take the monthly benefit, eight intend to take a
lump sum payment, and three have chosen to defer their retirement
benefit.
Special Note: Those retirees who will be retiring January 1,
2008 under VSP will incur an unavoidable delay in benefit payment due
largely to a minor delay in determining their salary for 2007. This important element is required in order to determine the amount of benefit payment and will not be determined until after January 18, 2008 according
the College’s payroll department. As soon as this information is available, the Retirement Committee will ensure payouts; both lump sums, as
well as annuity payments, will be processed as quickly thereafter as
possible. No payments are expected to be delayed beyond January 31,
2008. Thanks to all those affected NCERP participants for their patience
and please plan financial obligations accordingly.
The Quarterly Updates
Mr. Hayden reported that during the period of July 1, 2007 through
September 30, 2007, 14 new participants were added to the Plan.
During that same period, three Plan participants chose to retire effective August 1, 2007. One individual chose to receive monthly benefits whereas the other two selected the lump sum payment option.
The payout for the individuals requesting a cash settlement is
$166,601.17. No deaths were reported during the reporting period.
Also during this period, 12 employees separated from the College.
The contributions and credited interest of those individuals totaled
$119,937.49 and has been successfully paid to each of the terminated employees.
NCERP’S Accounting System
Fiscal year budget report as of September 30, 2007, includes the following:
• The total budget for 2006-2007 fiscal year: $371,531.00
• Total charges that have been paid: $65,895.15
• Encumbered charges: $17,598.550
• Balance as of September 30, 2007: $288,037.35
Administrative expenses for the retirement plan are currently budgeted at $371,531.00. Less than the industry standard of 1% of the
total value of assets managed.
Retirement Interview Schedule
If employees would like an estimate of their retirement benefits,
please attend any of the campus visits made by James Hayden, plan
coordinator. Please call at least a week before the scheduled visit to
ensure the retirement assessment is complete. Every participant is
encouraged to contact the Plan Coordinator at any time to obtain a
retirement benefit assessment.
Date
January 10, 2008
January 17, 2008
January 24, 2008
February 7, 2008
February 14, 2008
February 21, 2008
February 28, 2008
March 6, 2008
March 13, 2008
March 20, 2008
April 3, 2008
April 10, 2008
April 17, 2008
April 24, 208
May 1, 2008
May 8, 2008
May 15, 2008
June 5, 2008
June 12, 2008
June 19, 2008
June 26, 2008
Location
Forest Park
Florissant
Meramec
Forest Park
Florissant
Meramec
Cosand Center
Forest Park
Florissant Valley
Meramec
Forest Park
Florissant Valley
Meramec
Cosand Center
Forest Park
Florissant Valley
Meramec
Forest Park
Florissant Valley
Meramec
Cosand Center
NCERP Committee
Meeting Schedule
Time
12 Noon
2 p.m.
2 p.m.
12 Noon
2 p.m.
2 p.m.
2 p m.
12 Noon
2 p.m.
2 p.m.
12 Noon
2 p.m.
2 p.m.
2 p.m.
12 Noon
2 p.m.
2 p.m.
12 Noon
2 p.m.
2 p.m.
2 p.m.
S
M
T
W
T
F
S
Locations are:
Meramec, BA-105; Florissant Valley, Training Center, TC-109;
Forest Park, Executive Dean’s Conference Room; and
Cosand Center, Room 208.
Points of contact: The NCERP committee representatives are
listed on the back panel of this brochure:
Plan participants are encouraged to attend the committee’s quarterly meetings at the Forest Park campus, Room L-007. The tentative time and dates are listed below:
February 13, 2008, Cosand Center 9:15 a.m.
May 14, 2008, Forest Park
9:15 a.m.
August 13, 2008, Florissant Valley 9:15 a.m.
November 12, 2008, Meramec
9:15 a.m.
Beneficiary Accuracy
Please make sure beneficiary information on file for NCERP retirement contributions is accurate. Failure to do so could result in
retirement contributions being paid to the employee’s estate versus
having the contributions going to loved ones. If there are questions
or concerns, contact James Hayden, plan coordinator at ext. 5217.
Unofficial.…
Which Money to Touch First in Retirement?
Retirees typically have their money in various accounts including taxdeferred savings such as IRAs, 401(k) plans, or annuities and taxable investment accounts such as CDs bonds, or other securities. You’ve got social
security earnings coming your way and if you’re lucky, perhaps a pension
plan. To get the most from your savings, after taxes, you need to know
which accounts to tap first and which to leave until last.
“Individual situations, and tax consequences, can lead to different ‘best’
paths for different retirees,” says Peg Downey, a Maryland financial Planner,
“but there are some standard guidelines to follow.”
Taxable Accounts. Most people should draw on money from taxable
assets before dipping into tax-protected accounts such as traditional IRAs,
401(k)s, and other qualified plans, says financial advisor and attorney Gary
Schatsky, president of ObjectiveAdvice.com. “This way your money can continue to grow and compound tax-deferred until 70?, when you must take some
of the money,” he says.
Savvy investors in lower tax brackets, such as the 15% tax bracket, may
elect to take distribution prior to 70?, which adds to their gross income for
that year putting them at the top of the tax bracket. Thus, they pay tax now,
but at what may be a lower rate than they would pay in the future. They
also preserve some of their taxable portfolio.
•
Interest from bank CDs, bonds and money market funds is taxed at
ordinary income rates. Long-term capital gains on profits from the
sale of assets you’ve held from at least a year are taxed generally
at 15% or 5% for those in the lowest two tax brackets. Most stock
dividends also are taxed at 15%. Keep in mind that for any dividends, interest, or capital-gains payouts, taxes are due on the tax
returns prepared for the year you receive them.
•
U. S. Government bonds are free from state taxes. Municipal
bonds are free from federal tax and state taxes too, if you live in a
state that issued them.
•
Pension and annuity payment from qualified retirements are fully
taxable. Some states exempt certain types of pensions from state
income taxes such as military or government pensions. Others
allow a portion of any type of pension income to escape state
income taxes. Check with your tax advisor.
Tax deferred accounts. Ideally, you want to benefit from tax deferral for
as long as possible. Once you reach age 70 ?, however, there is a minimum
withdrawal schedule, based on your life expectancy, from traditional IRAs
and 401(k) or 403(b) plans. This schedule is designed to ensure that you
make a concerted effort to drain the account so the government can collect
taxes on the money before you die.
To figure how much you need to take out, check the tables on the IRS
Web site www.irs.gov/pub/irs-pdf/p590.pdf or consult a tax advisor. You’re
taxed at ordinary income tax rates on the amount you withdraw. If you don’t
withdraw the required amount each year, the IRS will assess you with a 50%
penalty of the minimum withdrawal due. Missing required minimum distribution is perhaps the single biggest mistake for IRA owners.
Once you determine your required minimum distribution, you can take the
money from any traditional IRA accounts you own. You can take the full
required amount from one IRA to satisfy the calculated requirement for each
of your IRAs. But you still have to take additional required minimum distributions from qualified plans such as a 401(k). In other works, an IRA distribution can’t be increased to satisfy the required distribution of a 401(k) or other
tax-deferred plan. If you roll your existing 401(k) into an IRA, however, you
can avoid taking two distributions; taking one from the IRA will suffice.
Bottom line: The rollover helps you keep more of your money.
When you request your required minimum distribution, you might want to
consider having it automatically invested in shares of stock or mutual funds,
instead of cash. Although you will still pay taxes, you can keep it invested and,
hopefully, it will appreciate over time, explains financial planner Mary Malgoire.
Annuities. If you have an annuity and want to draw on it to cover living expenses,
plan to take to payout as a continual stream of regular payments throughout retirement. Though you’ll be offered the options of withdrawing the payout in lump sum or
in a series of unscheduled withdrawals, you’d have to pay ordinary income tax immediately on all of the earnings. Receiving a lump sum could result in a large tax bill,
so consider it carefully. In many situations, it’s better to pay taxes in stages, leaving
the rest of your money in your account to potentially grow tax-deferred.
Roth IRAs and Roth IRA 401(k) plans. The IRS already taxed the contributions
you made to these accounts. So once you retire and decide to withdraw these
funds, you won’t owe taxes on the earnings – provided you’re at least 59 ? years
and have held the account for at least five years. You don’t have to take any minimum distributions from these, even after age 70 ?. “Let ‘em ride,” Mr. Schatsky
counsels. “This should be the last account you tap. You want to keep that tax-free
growth working.”
Points of Contact:
Board of Trustees Appointment
CALLA WHITE
6688 Chesapeake Drive
Apartment C
Florissant, Missouri 63033
Phone: (314) 355-9112
Term expires: BOT’s pleasure
Board of Trustees Appointment
RUTH LEWIS
10455 Litzsinger Road
St. Louis, MO 63131
Telephone: (314) 567-7098
Term Expires: BOT’s pleasure
Non-Unit Representative
TIM O’NEILL, vice chairman
MC - Printing
Telephone: (314) 984-7709
e-mail: toneill@stlcc.edu
Term expires: June 30, 2008
Unit Representative
KEVIN WHITE
CC – TESS Systems Operations Office
Phone: (314) 539-5058
E-mail: kwhite@stlcc.edu
Term expires: June 30, 2010
Physical Plant
Mike Wibbenmeyer
MC – Utilities/HVAC
Phone: (314) 984-7749
E-mail: mwibbenmeyer@stlcc.edu
Term expires: June 30, 2009
Any suggestions for improvements, questions, comments or other
concerns about the retirement plan
may be directed to any of the NCERP
committee representatives.
Any proposed agenda items may
be sent to James Hayden or the
employee representative 10 days
prior to the meeting date.
Individuals with speech or hearing impairments may
call via Relay Missouri by dialing 711.
St. Louis
Community
College
FLORISSANT VALLEY FOREST PARK MERAMEC WILDWOOD
ACCOMMODATIONS STATEMENT
St. Louis Community College makes every reasonable effort to accommodate individuals with
disabilities. If you have accommodation needs, please contact the Access office at the campus where you are registering at least six weeks before the beginning of the class. Event or
other public service accommodation requests should be made with the event coordinator or
applicable location non-discrimination officer at least two working days prior to the event or
public service.
NON-DISCRIMINATION STATEMENT
St. Louis Community College is committed to non-discrimination and equal opportunities in its
admissions, educational programs, activities and employment regardless of race, color, creed,
religion, sex, sexual orientation, national origin, ancestry, age, disability or status as a disabled or Vietnam-era veteran and shall take action necessary to ensure non-discrimination.
This newsletter is designed to summarize and explain basic changes in the Non-Certificated Employees
Retirement Plan and provides updates on other related matters. Since it is only a summary, this newsletter
does not cover the Plan's provisions in detail. Therefore, if there is any conflict between this newsletter
and the Plan document itself, the Plan document will always govern. An official copy of the Plan is
available for inspection in the Human Resources Department at the Joseph P. Cosand Community College
Center, 300 South Broadway, St. Louis, MO and in each campus’ library during regular business hours.
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