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HomeMy WebLinkAbout07-22-1996 Minutes JOINT MEETING GENERAL EMPLOYEES'/POLICE OFFICERS'/FIREFIGHTERS' PENSION BOARDS July 22, 1996 Chairman Miller called the General Employees' Pension Board, and Chairman Reed called the Police Officers'/Firefighters' Pension Board to order at 6:09 p.m. in the Commission Chambers Conference Room of City Hall, and a quorum was declared present. PRESENT: General Employees Board: Chairman Miller, Members Dabbs, Grafton, Oliver, and Waldrop. Police Officers'/ Firefighters' Board: Chairman Reed, Members Gledich, and Williams. Also present were Attorney Dehner, Member Ernie Kovacs, and Clerk Stenographer Lewis. ABSENT: Members Strosnider and Wilson (of the Police/Fire Board). DISCUSSION OF BENEFIT IMPROVEMENT TO THE PLANS Chairman Reed said that he and Attorney Denner had met in May with the City to request improvements in the Police/Fire (P/F) benefits. Research of other plans revealed that their (by current multiplier was the minimum, and was not the norm. He said that their Plan had stabilized their investments, had very good returns and the longer that the City put off making improvements the more it would cost the City. There had been a long discussion and the City Manager had not said "no" at that time but had suggested since the General Employees' Board had also approached the City about the same issue a year ago, that both Boards join together and return with a recommended benefit improvements for both Plans to take before the City Commission for mid-year of 1997. Attorney Dehner suggested that they write a letter to accompany the ordinances on behalf of each Fund stating what benefit improvements the Boards would be recommending and propose those to the City for adoption in time to get it in next year's budget which means moving forward early in December '96 or January '97. The City Manager had been very constructive and helpful in his comments and had believed that it would be appropriate if they came forward together. Each Plan would have a better chance to derive benefit improvements. Chairman Reed left the meeting at 6:18 p.m. Attorney Dehner said that the Police/Fire Plan knew what improvements they were wanting and the General Plan had made recommendation a year ago, and he would like confirmation on what they want set forth in their letter with respect to benefits that will accompany this edition on the compliance item. Lengthy discussion ensued about various improvements to each Plan. Member Waldrop Joint Meeting ,. General Employees'/Police Officers'/Firefighters' Pension Boards - July 22, 1996 explained that he had talked with many employees who had wanted to increase the multiplier and to also include medical insurance to the retiree (at the City's rate). Attorney Dehner said that as far as Board action and why they were in the meeting tonight was the result from the May 31st meeting with City officials. With respect to the Police/Fire Board, it was to determine whether or not they were going to remove the benefit improvement proposal from their recommendation to the City. That was specific action they needed to look at because their recommendation now stood to include the benefit improvements at this time. In going through the process in the meetings, the recommendation of the City Manager was to hold those out, move through with all of the technical or compliance changes now, accompany it with a letter identifying the benefit improvements they were going to be continuing through the process of the '97 budget year which took Board action to change that. Attorney Dehner said that, on the General Plan, there were some compliance items based on changes that they were moving forward with and included some technical items which were now in the current documents before the Board. There had been been five new ordinances amending the Plan and the last one would consolidate these into one document for the ease of everyone dealing with Plan members, Board, City officials, etc. The General Plan also needed to determine a benefit improvement recommendation to include in the cover letter accompanying the proposed ordinance to the City. Mr. Kovacs said that the employees that he talked with did not understand the differences of the multiplier between the Plans since the State money did not affect the multiplier, and Attorney Dehner said that the State money helped fund a high multiplier from the early retirement age for Fire employees. Although everyone did not agree with this method, he said that if they had equivalent Plans, that we would not receive State money for the Police/Fire. It would be withheld from the City. Chairman Reed said that he did not perceive the multiplier ever being the same for the Plans due to 1) the State monies, and 2) the hazardous duty of the Police/Fire, plus all of the qualifications, schools, training, etc. Chairman Reed returned to the meeting at 6:30 p.m. Member Grafton seconded b Member Miller, moved to chan'e the General Employees' Retirement Trust Fund multiplier to 2.5% effective October 1, 1997. Motion carried 5-0. Member Dabbs, seconded by Member Oliver, moved to include in the General Emplo ees' Retirement Trust letter the Board's recommendation in support of the City's Plan for the em•lo ee lost retirement health insurance as I ro I osed b administration. Motion carried 5-0. Attorney Dehner said that Foster & Foster could do a cost estimate based upon the October 1, 2 Joint Meeting General Employees'/Police Officers'/Firefighters' Pension Boards - July 22, 1996 1996 valuation. He recommended that the Boards ask the actuary to provide the cost estimate and come to the Plans with both at the same time. Also, he said that this would have to go to the General Employees at some point in the process because we wanted to be able to represent to the City as they had for the Police and Fire, that the vast majority of the General Employees supported their recommendation, and if not, what would the employees want as a backup, would the employees be willing to making the additional contribution or would it falling back on the accrural rate increase. The General Board could take this survey after the October 1 valuation. Chairman Reed said that timing had a lot to do with it and was the reason for the joint board meeting. In response to Mr. Kovacs, Chairman Reed explained that it was very hard to get both Boards together. Also, it cost a lot of money to have these meetings and being prudent with the employee's money it would behoove them to go ahead and discuss those at that time. This would take months to do and could not be done in 30 to 60 days. Timing was sometimes missed in trying to get the two (2) Boards together. Attorney Dehner explained that the Police/Fire Board had already made their recommendation and would only need a motion on whether to pull the benefit portion out of the current proposed ordinance at this time and do it by letter. The General Employees' Board needed, either now or at their next meeting, to instruct the Actuary whether they wanted cost estimates on "30 and out" or "55 and 10." Also, what the costs would be in going to a 2.25% multiplier. In December when they do the valuation report, they would have the figures to take to the membership, and be ready to move forward in the January time frame to the City. Member Gledich, seconded by Member Williams, moved to withdraw the portion that incorporates benefit improvements, and to put the City on notice by a cover letter with the ordinance that by recommendation of the Board that it will be coming back for benefit improvements for the 1998 fiscal year. Motion carried 3-0. Member Dabbs, seconded by Member Oliver, moved for the General Employees' Retirement Trust Board to reconsider the motion which passed increasing the multiplier from 2.0% to 2.5%. Motion carried 5-0. Member Dabbs, seconded by Member Oliver, said that a question had been called on the original motion. Motion was opposed 5-0. Member Dabbs, seconded by Member Oliver, moved as part of the cover letter that will •o to the City Commission through the City Manager that we include a statement that we will be comin• to them in time for the November 1997 bud.et which is the 1998 bud•et with benefit improvements to the General Employees Pension Plan. Motion carried 5-0. 3 Joint Meeting General Employees'/Police Officers'/Firefighters' Pension Boards - July 22, 1996 Member Gledich, seconded by Member Williams, moved that in the Police Officers'/Firefighters' cover letter to the City that we support administrative post retirement health insurance to the Plan. Motion carried 3-0. In response to Attorney Dehner, Member Gledich said that it was not their (P/F) Board's recommendation for a specific proposal set. The Board must discuss in the future about the actuary doing additional cost estimates on additional benefits based on the October 1, 1996 valuation. Member Gledich requested that Attorney Dehner do a comparative study on other City's with regard to benefit improvement for same size cities, length of time in the Plan, and comparable investments Cities where investments tend to look alike, what they have in regard to benefits, perhaps benefits such as the age, etc. Attorney Dehner said that each Board should decide at the August meeting what they want them to cost out. Each Board unanimously supported everything being included in one document. INQUIRES ABOUT THE GENERAL EMPLOYEES' PROPOSED ORDINANCE Discussion or questions regarding the General Employees' Plan ensued about changes to the proposed ordinance as follows: Section I - Should Florida Statute 112 be quoted as well as Chapter 166 because that it had to do with retirement programs in the State. Attorney Dehner said that the reason they quoted 166 was because of "home rule." Page 5 - Correction that reads "...reported" rather than "...reportable." Under Salary Definition, as listing exempted people had included the Administrative Services Director position which no longer existed but the City still had the job description which was not funded. Also, we have an Assistant Utilities Director. Attorney Dehner said that the City Manager could review these areas when it was submitted for approval. Page 9 - Each place that read "held a rating" had been inserted with" or ranking" and one place had been overlooked. Page 10 - Inquired about why E was being deleted, and Attorney Dehner said so that anyone, such as a manager, could not hide behind that. Page 11 - City contributions - last sentence in #2, we're changing from 40 to a 30 year period. Attorney Dehner said that the Actuary was changing that now. 4 Joint Meeting General Employees'/Police Officers'/Firefighters' Pension Boards - July 22, 1996 Page 13 - A Member expressed unfairness in giving the beneficiary the option in lieu of taking the payments not mandated but they have the option for whatever reason they would want to take it receiving back the contribution of the member. Page 14 - Under last sentence, "...his or her spouse, present value payments to the retiree shall not be less than 50% of the total ..." Attorney Dehner said that it was now Federal law. Page 16 - A Member expressed unfairness in Item D. Page 17 - There was discussion about the removal of the Claims procedure out of the ordinance, and adopting them in just the Rules. Page 26 - Liquidation of Fund's assets - Attorney Dehner said that they had consolidated that section with the now section 17. Page 29 - Any over payments or under payments shall be corrected and paid or re-paid in a reasonable manner to be determined by the Board, and it had been defined in an earlier section. Attorney Dehner said that under Powers of the Board, if mistakes are found that you will do it in a prudent manner. This area dealt more with fraud or illegalities. On page 10, the powers deal specifically with over- payment and under-payments, and that was very specific over-payment and under- payments based on the calculation or computation of the benefit. Adoption of the ordinance should be placed on the next agenda for August 13, and Member Grafton said that the First Reading of the Ordinance could be in September. As timing was critical, Member Grafton asked if another joint board meeting should be scheduled to firm up what the Plans were going to do or if the Boards could handle this separately. Chairman Reed supported another joint meeting in October but it was decided that the Boards would discuss this during the November meetings. QUESTIONS/COMMENTS FROM AUDIENCE None ADJOURNMENT FOR THE GENERAL EMPLOYEES' PENSION BOARD Chairman Miller adjourned the General Employees' Pension Board at 7:40 p.m. INQUIRIES ABOUT THE POLICE OFFICERS'/FIREFIGHTERS PROPOSED ORDINANCE 5 Joint Meeting General Employees'/Police Officers'/Firefighters' Pension Boards - July 22, 1996 The Police Officers'/Firefighters' Board discussed the proposed ordinance, as follows: Page 11 - Section 6 - No. 1, second sentence - Twenty-five years of credited service or age 55 and the completion of 10 years of credited service. Section 6 - No. 3, says early retirement date ... may retire on his or her early retirement date which shall be the first day of any month concident with or next following the attainment of age 45 and the completion of 5 years credited service. Early retirement under the system is retirement from employment with the City on or after the early retirement date and prior to the normal retirement date (which is 25 years of service or age 52 or age 55 and 10 years of service, question against Page 18 - under vesting, #2 - If the member has 5 or more years of credited service upon termination the member shall be entitled to the monthly retirement benefit. Chairman Reed asked if we have early retirement age 45 and 5 years or if a person has 5 years which he has vested in the Plan, why at age 55 does he have 10 years. Attorney Dehner said that was for normal retirement. There was not a correlation between when you are vested and what your normal retirement is going to be for your early retirement age, they were two different things and could all be different. There were 3 different status: 1) Normal retirement status, 2) Early retirement status, and 3) Vested/Terminated status. Page 29 - Section 16 - Maximum Pension - 1-B: One-hundred percent (100%) of the members average aggregate compensation for the 3 consecutive calendar years during the Police Officer/Firefighter was an active member and had his or her highest compensation. Is this law? Attorney Dehner said that it was Section 415 of the Internal Revenue Code. Page 31 - Number 6 - Define Member In Contribution Plan - inquiry in the case where a member under this Plan was also a member in a Defined Contribution Plan as defined in 414, some of the members were in the Great Western Plan, if that, and he believed that it was similar to a 401K(deferred comp). Attorney Dehner said that he believed that it was a 457 Deferred Comp that was a non-qualified Plan. The contribution plan was in 401A but he did not think they had that. If they did, these limits again, are Federally imposed. Numbe 8 - Cost of Living Adjustments - Chairman Reed asked if we had a COLA? Attorney Dehner said that this referred to the Cost of Living Adjustment made by the Secretary of the Treasury to the 415 limits. Page 37 - Forfeiture of Pension - Chairman Reed said that we do have some Police 6 Joint Meeting General Employees'/Police Officers'/Firefighters' Pension Boards - July 22, 1996 Officers that have been released under questionable circumstances and he thought that they had resigned, and asked what obligation (if the City recognized their resignation from the Police Department without any further prosecution or anything) did the Board have as far as their contributions? Attorney Dehner said that it was a situation, and this section essentially states what forfeiture provision in Chapter 112 was, and this was part of our Plan by the mandated Chapter 112. The provision was that if anyone commits one of those six specified offenses in A-F, and if they admit to having committed one of those offenses or aide or abet in the commission of one of them and are terminated as a result, then the Board has to determine whether or not there should be a forfeiture. He said that there should be a forfeiture and all the person will get back is their contribution. Or alternatively if one of these six specified offenses has been committed and there was an ommission of determination as a result but there was a conviction in Court, then there would be a termination. That is what this provides. Any time there is a suspicious situation, it should come to the Board to make a determination whether or not there was probable cause here to determine whether we need to go further. COMMENTS FROM THE ATTORNEY There were no additional comments from the Attorney. ADJOURNMENT FOR THE POLICE OFFICERS'/FIREFIGHTERS' PENSION BOARD Member Williams, seconded by Member Gledich, moved to adjourn the meeting at 7:56 p.m. Motion carried 3-0. Respectfully submitted, 4 / 1L Je Lewis, erk Stenographer a:\wp60\wpdocs\J0INT722.96\jfl 7