Horizon News INSIDE THIS EDITION: ERS 2014 CAFR Summary Report. Refund of Non-Vested Contributions. HEALTH 101: Cancer Screening

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1 Volume 15 Spring 2015 Horizon News A Newsletter for Active and Retired Members of the City of Baltimore Employees Retirement System INSIDE THIS EDITION: ERS 2014 CAFR Summary Report Refund of Non-Vested Contributions HEALTH 101: Cancer Screening Annual Members Benefits Statement MISSION STATEMENT The System is committed to protecting and prudently investing member assets and providing accurate and timely retirement benefits with quality service to members and beneficiaries.

2 HORIZON NEWS Volume 15 Spring 2015 Executive Director s Letter Dear Active and Retired Members, I am happy to report another successful year for ERS investments. The fund achieved high double digit returns in fiscal year This marks the third consecutive year that ERS has out-performed its policy benchmark. A strong U.S. domestic economy, out-performance in the alternative classes and in equities contributed to the high returns. A summary of the ERS Comprehensive Annual Financial Report for the fiscal year 2014 is herein provided. Also, I am proud to announce that the long awaited ERS Members Self Service (MSS) web portal is now available to all members. By now most of you should have received an with sign-up instructions on how to obtain your personal membership information; including acess to your annual membership statement, 1099-Rs, and instructons to calculate benefit estimates. Please refer to our previous newsletter for more details on the MSS or call our office for assistance. Good health is important to everyone, and as we all know, a healthy workforce leads to strong productivity. In the Health 101 section, you ll find information about the City Cancer Screening Program, and why you should take advantage of this benefit. Thank you for reading the Horizon and learning more about your ERS benefits. If you have any questions about the plan or if there is anything you d like to see us cover in a future issue, please call the ERS office or us. Sincerely, Roselyn H. Spencer Summary annual report ERS Sees an upturn in results for 2014 In fiscal year June 30, 2014, the Employees Retirement System (ERS) saw excellent financial performance: The Plan saw gains of 16.2% more than double the 7.75% actuarial rate of assumption for the plan, and an increase from 13.2% in As a result of this out-performance, the total net assets of the Plan increased by 13.2% to $1.5 billion. This amount represents the net position held in trust to pay pension benefits. Investment income grew to $209 million; an increase over 2013 s results of $148 million. These positive outcomes are the result of strong performance in all asset classes but most notably, private equity grew 18.5% and equities increased 25%. Fund manager skills and a strong U.S. economy also contributed to a great financial year. Members Contributions increased by $3.4 million due to the Pension Reform Ordinance that was implemented on October 1, Total deductions for the year increased by 4.0%, primarily due to retirement allowances. Once again, a Certificate of Achievement was awarded to ERS for its CAFR for the fiscal year ending June 30, 2013, making it the 31 st year that the System has received this prestigious award. This award is valid for a period of one year. (continued on pages 3-5) Table of Contents ERS 2014 CAFR summary report Happy retirement - Germaine Hughes...6 Refund of non-vested contributions...6 Health 101: Let s talk cancer screening...7 Annual members benefits statement...7 Election announcement for an active member trustee...8 2

3 Volume 15 Spring 2015 HORIZON NEWS for fiscal year ending June 30, 2014 PLAN NET POSITION PLAN FUNDING Funding for the ERS comes from three sources: investment income of $209.5 million, which increased by 29.4% over the previous year, employer contribution of $94.9 million and, members contributions of $3.6 million. MILLIONS $1,600 $1,400 $1,200 $1,000 $800 $600 $400 $1,085 $1,242 $1,216 $1,325 $1,499 $200 $ FIDUCIARY PLAN NET POSITION The Statement of Plan Fiduciary Net Position presents the Plan s assets, liabilities and the total net assets available for paying future retirement benefits and operating expenses. Assets includes plan investments, cash and other receivables. CHANGES IN FIDUCIARY PLAN NET POSITION The Statement of Changes in Fiduciary Net Position summarizes the financial activities for the year. It provides tallies of the additions and deductions that equaled a net increase of $174 million. This represents an increase of $66 million from Fiduciary Plan Net Fiscal Year Fiscal Year Increase/ Percentage Position (Decrease) Change Investments at Fair Value $ 1,510,322,809 $ 1,371,358,107 $ 138,358, % Other Assets $ 123,141,343 $ 89,921,690 $ 33,219, % Total Assets 1,633,464,152 1,461,279, ,184, % Total Liabilities 134,227, ,545,983 (2,318,222) (1.7)% Total Net Position $ 1,499,236,391 $1,324,733,814 $ 174,502, % Changes in Fiduciary Fiscal Year Fiscal Year Increase/ Plan Net Position (Decrease) Additions Employer Contribution $ 94,917,886 $ 88,300,214 $ 6,617,672 Members Contributions 3,623, ,720 3,399,747 Net Investment Income 209,473, ,926,517 61,546,587 Net Securities Lending Income 174, ,184 (78,119) Total Additions 308,188, ,702,635 71,485,887 Deductions Retirement Allowances $ 129,205,776 $ 124,152,899 $ 5,052,877 Administrative Expenses 3,711,975 3,554, ,033 Death Benefits 699, , ,025 Lump Sum Cash Payments 63, ,079 (116,100) Refund of Members Contribution 4,224 6,381 (2,157) Total Deductions 133,685, ,467,267 5,218,678 Net Increase (Decrease) $ 174,502,577 $ 108,235,368 $ 66,267,209 3

4 HORIZON NEWS Volume 15 Spring 2015 Summary annual report for PLAN FUNDING INCREASES The Plan s investment return ranked in the 41 st percentile of the Public Fund Universe, outpacing the policy benchmark by 90 basis points. Strong out-performance of all asset classes added value to these results. The Public Fund Universe provides a comprehensive analysis of US public pension and permanent funds, comparing asset allocation, performance, fees, and actuarial comparative data. Real Estate 10% ACTUAL ASSET ALLOCATION Hedge Funds 5% Private Equity 6% US Equity 37% As of June 30, 2014, the ERS funded ratio improved slightly, from 68.1% in 2013 to 69.7%. The goal is to reach a funding ratio of 100%. The Board is confident that the Plan is sustainable and able to meet all retirement needs when they are due, given that our members will retire at different times gradually over the years. International Equity 15% US Fixed Income 27% OUR INVESTMENT STRATEGY As fiduciary of the Plan, the Board is responsible for investing the assets of the funds to meet long-term benefit Plan obligations. One primary objective of the Board is to invest the assets of the Plan in a prudent manner; to preserve and grow the assets of the funds. The Board adheres to a diversified asset allocation plan with low correlation to capture gains while minimizing risk. The Board exercises the appropriate due diligence when monitoring the investment manager s performance and takes appropriate action when necessary. MEMBERSHIP SNAPSHOT Hedge Funds 5% Real Estate 9% International Equity 14% TARGET ASSET ALLOCATION Private Equity 10% US Fixed Income 26% US Equity 36% At the end of fiscal year 2014 the ERS had 18,840 members, including: 8,904 active members. 8,893 retired members and beneficiaries. 1,043 terminated vested members (entitled to but not yet receiving benefits). For the first time, the number of active members surpasses retired members qualifying ERS as a matured fund. 4

5 fiscal year ending June 30, 2014 Volume 15 Spring 2015 HORIZON NEWS ACTIVE MEMBERS AVERAGE ANNUAL SALARY PENSION REFORM OVERVIEW On October 1, 2013, the City implemented the Pension Reform Ordinance, which requires C members to make employee contributions. The contribution began at 1% of pay and will reach its cap of 5% of pay in fiscal year SALARY On May 7, 2014, the City established the City Retirement Savings Plan(RSP), a defined contribution plan for new and rehired civilian employees and certain non-teacher members of the Baltimore City School System. The ordinance also closed Plan C to new members. Within five months of hire, an employee will have to select between the RSP hybrid or RSP non-hybrid plan. Hybrid Plan D members contribute 5% of pay and the City makes contributions equal to 3% of pay into the RSP on their behalf. RETIREES & BENEFICIARIES AVERAGE ANNUAL BENEFIT KEEP INFORMED Get information about your personal benefits on the ERS - Members Self Services at: Visit the City of Baltimore Employees and Elected Officials Retirement Systems web portal at the link above to: view certain member information get retirement benefit estimates view and download an annual membership statement BENEFITS GET ERS PLAN DETAILS This newsletter provides an overview of the ERS s financial position. All information shared here is believed to be accurate in all material aspects and is intended to be fairly presented. If you would like the full and complete details, please visit our website ( to download a copy of the 2014 Comprehensive Annual Financial Report. You can also visit our website for updates, contact information, and access to forms. Talk To Us! While the ERS/EOS web portal provides you instant access to most of the retirement benefit information you need, you are always welcome to call or visit us at and 7 East Redwood St. - 13th Floor, Baltimore, MD

6 HORIZON NEWS Volume 15 Spring 2015 Germaine Hughes Retires After 35 Years of Service Hard work and dedication can bring many rewards in life and what greater reward is there than retirement? After 35 years of service, Germaine Hughes, said goodbye to the Employee s Retirement System and hello to retirement. While at ERS, Germaine climbed the ladder of success. She began as a Principal Clerk and retired as Retirement Benefits Manager. With all of her years of experience, Germaine was a great asset to the ERS. She was very knowledgeable and therefore could effectively train, manage and guide the Benefits Analyst Team. Germaine s calm, friendly and comforting personality, left a positive impact on everyone she came in contact with. Nichelle Lashley, ERS Benefits Analyst Supervisor says, Germaine understands that providing exceptional service to our ERS members is very important. As a result, she consistently went out of her way to make every interaction with each member a positive one. Roselyn Spencer, Executive Director and CIO of the ERS also says that employees and elected officials had only positive things to say about Germaine. They would often say they felt good after their visit with her because she demonstrated care and concern, and she really took her time to help them with their request. Germaine s dedication and commitment to excellence in servicing the city employees and elected officials is above and beyond the call of duty. Due to Germaine s work excellence, she was nominated for the 2015 Lidinsky award and featured in a Shout Out article in the ERS s Fall 2011 newsletter. The Lindinsky Award recognizes Baltimore City employees for their public service. Germaine will not only be missed for her dedication to ERS, but also for being a great friend. Adrian Brown, ERS Benefits Analyst II expressed her thoughts about Germaine s friendship. I really miss Germaine and the talks we used to have about anything/everything and all her motherly advice. On behalf of the Board of Trustees and all of us at ERS, We wish Germaine a happy retirement! Refund of Non-Vested Contributions City Employees who separate employment prior to earning 10 years of ERS membership years of service are considered non-vested members. To be a non-vested member you have to first be an ERS member (employed with the City for at least one year) and have less than 10 years of membership service credit. Class C members who terminate employment prior to vesting, will receive a refund of their employee contributions plus 3% interest in a lump-sum payable to the member or to a roll over financial institution. If you are separated after vesting, your employee contributions will not be refunded, but will be used towards payment of future benefits when you become eligible for retirement. Process for refund of contributions: 1. After terminating City employment, it could take up to six weeks or at least two pay periods for the payroll department to process leave payments and issue a termination report to the ERS. 2. Thereafter, ERS will forward you a letter providing your membership service credit information and requesting missing documents such as: birth certificate for you, your spouse or children, an original marriage license (if applicable), social security card and recent legal photo ID. Also enclosed in the letter will be an Accumulated Contribution Refund application form for completion, information about rollover options and a self-addressed return envelope. 3. Once your completed application and required documents are received, we will begin the refund process. Refund checks are only generated on the first business days of every month. As a result, you should expect to receive your refund within 45 to 60 days after your completed application is received. Please make sure you complete the application correctly, sign and date all forms. You may return the forms in the enclosed self-addressed envelope, or stop by the ERS between 9:00 a.m. and 4:00 p.m. to drop them off. As always, if you have any questions feel free to contact the ERS office. 6

7 Health 101: Cancer Screenings Nothing is more important than your health! Have you had a cancer screening? Did you know that as a City employee you are granted the use of 4 hours of paid leave per calendar year for cancer screenings? Employees are strongly encouraged to undergo cancer screening. According to the American Cancer Society, more than 1 million people in the United States get cancer each year. It is important to take care of your health and the City has programs to help you. I think it is important that we get screened for cancer; prevention is the best cure, said Beverley Mootoo- Balram, HR Generalist II at ERS. The City grants 4 hours permission leave yearly, so there really is no excuse for not getting it done. It is important that people make sure their health is taken care of. In 2001, the Baltimore City Cancer Program was created as an outreach program for the University of Maryland Medical Center, to provide education, treatment, diagnosis, as well as early detection to help eliminate unnecessary deaths. The City Cancer Program is free and available to qualified Baltimore City residents only. Recent data shows that the program has completed over 31,000 screenings to Baltimore City residents for clinical breast exams, mammograms, cervical cancer, and/or colonoscopies. To be eligible for a free screening with the Baltimore City Cancer Program, you must be: a Baltimore City resident that is uninsured or underinsured. Volume 15 Spring 2015 HORIZON NEWS between ages years old for breast exams, mammograms and cervical cancer screenings. (If a woman is under 40 and has breast problems or wants to get a cervical cancer screening, she will be referred by the program to an appropriate place to have her screening done). at least 50 years old for a colonoscopy or as young as 18 years of age if you are showing symptoms such as, rectal bleeding and sudden unexplained weight loss. If you are interested in the Baltimore City Cancer Program, call for information on enrollment and scheduling. In order to enroll, you are required to have a copy of your Social Security Card and a valid drivers license with your current address or a current State of Maryland ID card with your current address on it. Whether you meet the eligibility requirements for the City s Cancer Program, or you choose to go to your own doctor, remember that as an employee you are allowed the leave time regardless of your residence. If you are a retired member and not a city resident, you are still encouraged to get screened. Active Members Receive First Annual Statement By now, all active members should have received their Annual Member Benefits Statement(AMBS) in the mail. The purpose of the AMBS is to present you with information about your retirement benefits. This document will contain a summary of your: personal and retirement system information contributions and interest account balance maximum benefit option estimate at the end of the fiscal year general plan overview information and a page with detailed instructions on how to read it. Please review your benefit statement carefully. If you disagree with the information, send your written inquiry along with a copy of your statement to the Baltimore City Employees Retirement System office. 7

8 HORIZON NEWS 7 East Redwood Street,13th Floor Baltimore, MD PRSRT STD U.S POSTAGE PAID BALTIMORE, MD PERMIT NO OFFICE HOURS: Monday through Friday 8:30 a.m. to 4:30 p.m. PHONE: or (Outside Baltimore) FAX: WEBSITE: horizon@bcers.org ADMINISTRATION Roselyn H. Spencer Executive Director & CIO Bernita James Deputy Director THE ERS BOARD OF TRUSTEES Joan M. Pratt, CPA Chair Ex-officio member City of Baltimore Comptroller Deborah F. Moore-Carter Vice Chair City of Baltimore Labor Commissioner Elected by Active Members Term expires 12/31/2015 Rosemary H. Atkinson Retired City of Baltimore HOPE VI Community Builder Elected by Retired Members Term expires 12/31/2015 Dorothy L. Bryant Phlebotomist City of Baltimore Health Department Elected by Active Members Term expires 12/31/2015 Doris Y. Brightful Retired Community Heath Nurse City of Baltimore Health Department Term expires 12/31/16 Jerome L. Sanders President LVI Power, LLC. Appointed by the Mayor Term expires 12/31/16 CITY RETIREMENT SYSTEM ANNOUNCES ELECTION FOR AN ACTIVE MEMBER TRUSTEE Effective April 20, 2015, The Board of Trustees of the Employees Retirement System of the City of Baltimore ( ERS ) announces that an election will be held for one (1) Active Member Representative Trustee on Tuesday, September 15, 2015 for the term specified below. This is a non-paid position. All active employees who are members of the ERS on or before May 1, 2015 are eligible to vote and/or become a candidate for the election which will be conducted by paper ballot mailed to each member s home address on file with the ERS. (Please notify your agency s Human Resources Representative of any address changes or updates.) TERMS OF OFFICE: To serve the remainder of a four-year term expiring December 31, Petitions are available for pick up at the ERS office, now until July 2, For detailed information on the responsibilities and duties, election procedures and becoming a candidate, please refer to the official Announcement on the ERS website at or call our office at In Memoriam The ERS is saddened to announce the passing of our beloved former Benefits Manager, Bessie Mozella Chase on April 22, Mozie served the Retirement Systems for nearly 40 years until her retirement in Mozie was knowledgeable, well respected, and generous. Her loving spirit, sound advise and guidance is her legacy left here in the ERS. She touched so many lives and will truly be missed.