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HomeMy WebLinkAboutItem #08 First Reading of Ordinance - Approval of Ordinance Change to the Ocoee Municipal Police Officers' and Firefighters' Pension AGENDA ITEM COVER SHEET Meeting Date: 01/20/09 Item # ~ Contact Name: Contact Number: James Carnicella 1032 Reviewed By: ~ Department Director: '~~ City Manager: Subjec TrustFun Background Summary: The Pension Board for the City of Ocoee Municipal Police Officers' and Firefighters' Retirement Trust Fund is governed by ordinance. Issue: Amendment to the Police Officers' and Firefighters' Pension Ordinance to change the multiplier from 3.0% to 3.5% and to discontinue the $200 per month supplemental benefit (stipend) effective October 1, 2008. This issue was approved by the Police Officers' and Firefighters' Pension Board and agreed to by the Police & Fire unions. Recommendations Staff respectfully recommends the Commission adopt the changes as amended in the attached ordinance for the City of Ocoee Municipal Police Officers' and Firefighters' Retirement Trust Fund. Attachments: Attached is the Ordinance amendment drafted by legal counsel for the Police Officers' and Firefighters' Pension Board and the Actuarial report from Foster & Foster. Financial Impact: The impact to the City will be $100,492. However, the attached Actuarial Impact Statements indicate the City's contribution to this fund will be reduced from 18.3% to 11.3% of payroll, or approximately a $380,000 savings. This reduction was as a result of the re-evaluation of the assumptions to this Pension Fund. Type of Item: D Public Hearing l'8J Ordinance First Reading D Ordinance First Reading D Resolution D Commission Approval D Discussion & Direction For Clerk's Deaf Use: D Consent Agenda D Public Hearing D Regular Agenda o Original Document/Contract Attached for Execution by City Clerk o Original Document/Contract Held by Department for Execution Reviewed by City Attorney Reviewed by Finance Dept. Reviewed by ( ) o N/A o N/A o N/A ORDINANCE NO. AN ORDINANCE OF THE CITY OF OCOEE, FLORIDA, RELA TING TO THE CITY OF OCOEE MUNICIPAL POLICE OFFICERS' AND FIREFIGHTERS' RETIREMENT TRUST FUND; AMENDING ORDINANCE NUMBER 96-20, AS SUBSEQUENTL Y AMENDED; AMENDING SECTION 6, BENEFIT AMOUNTS AND ELIGIBILITY; AMENDING SECTION 8, DISABILITY; PROVIDING FOR SEVERABILITY OF PROVISIONS; REPEALING ALL ORDINANCES IN CONFLICT HEREWITH AND PROVIDING AN EFFECTIVE DATE. SECTION 1: Authority. The City Commission of the City ofOcoee has the authority to adopt this ordinance pursuant to Article VIII of the Constitution of the State of Florida and Chapter 166, Florida Statutes. SECTION 2: That Ordinance No. 96-20, adopting the amended and restated City ofOcoee Municipal Police Officers' and Firefighters' Retirement Trust Fund, as subsequently amended, is hereby further amended by amending Section 6, Benefit Amounts and Eligibility, subsection 2., Normal Retirement Benefit and subsection 5., Supplemental Benefit, to read as follows: 2. Normal Retirement Benefit. A Member retiring hereunder on or after his or her normal retirement date shall receive a monthly benefit which shall commence on the first day of the month coincident with or next following his or her Retirement and be continued thereafter during Member's lifetime, ceasing upon death, but with one hundred twenty (120) monthly payments guaranteed in any event. The monthly retirement benefit shall equal thlee percent (J.O%) three and one-half percent (3.5%) of Average Final Compensation, for each year of Credited Service. 5. Supplemental Benefit Effective October 1, 2004, all current and future retirees and effective October 1, 2008 only those who retired prior to October 1, 2008, retired under the early or normal retirement provision, their joint pensioners or beneficiaries, shall receive a supplemental benefit in the amount of two hundred dollars ($200) per month reduced as for early retirement if applicable. Disability retirees and vested terminated persons shall not receive this supplement. SECTION 3: That Ordinance No. 96-20, adopting the amended and restated City of Ocoee Municipal Police Officers' and Firefighters' Retirement Trust Fund, as subsequently amended, is hereby further amended by amending Section 8, Disability, subsection 1., Disability Benefits In-Line of Duty, and subsection 3., Disability Benefits Not-In-Line of Duty, to read as follows: 1. Disability Benefits In-Line of Duty. Any Member who shall become totally and permanently disabled to the extent that he or she is unable, by reason of a medically determinable physical or mental impairment, to render useful and efficient service as a Police Officer or Firefighter, which disability was directly caused 1 by the performance of his or her duty as a Police Officer or Firefighter, shall, upon establishing the same to the satisfaction of the Board, be entitled to a monthly pension equal to tIUG' pCI'ClIt (J.O%) three and one-half percent (3.5%) of his or her Average Final Compensation multiplied by the total years of Credited Service, but in any event the minimum amount paid to the Member shall be forty- two percent (42%) of the Average Final Compensation of the Member. Terminated persons, either vested or non-vested, are not eligible for disability benefits, except that those terminated by the City for medical reasons may apply for a disability within thirty (30) days after termination. 3. Disability Benefits Not-in-Line of Duty. Any Member with ten (10) years or more Credited Service who shall become totally and permanently disabled to the extent that he or she is unable, by reason of a medically deter- minable physical or mental impairment, to render useful and efficient service as a Police Officer or Firefighter, which disability is not directly caused by the performance of his or her duties as a Police Officer or Firefighter shall, upon establishing the same to the satisfaction of the Board, be entitled to a monthly pension equal to thrcc PClcwt (J.O%) three and one-half percent (3.5%) of his or her Average Final Compensation multiplied by the total years of Credited Service. Terminated persons, either vested or non-vested, are not eligible for disability benefits, except that those terminated by the City for medical reasons may apply for a disability within thirty (30) days after termination. SECTION 4. Repeal of Ordinances. All ordinances or parts of ordinances in conflict herewith are hereby repealed. SECTION 5. Severability. In the event any section, subsection, paragraph, sentence, clause, phrase or word ofthis ordinance shall be held invalid by a court of competent jurisdiction, then such invalidity shall not affect the remaining portions hereof. SECTION 6. Effective Date. This ordinance shall take effect upon second reading and adoption. PASSED AND ADOPTED this _ day of ,2009. ATTEST: APPROVED: CITY OF OCOEE, FLORIDA Beth Eikenberry, City Clerk By: S. Scott Vandergrift, Mayor (SEAL) ADVERTISED READ FIRST TIME READ SECOND TIME AND ADOPTED 2 FOR USE AND RELIANCE ONLY BY THE CITY OF OCOEE, FLORIDA APPROVED AS TO FORM AND LEGALITY THIS _ day of , 2009. CHRISTIANSEN & DEHNER, P.A. Special Counsel By: noc\ocoee\pf\O 1-06-09 .ord APPROVED BY THE OCOEE CITY COMMISSION AT A MEETING HELD ON ,2009 UNDER AGENDA-iTEMNd":--- 3 Foster&FosterINc. Actuarial Consultants for Public Pension Plans August 5, 2008 VIA MAIL AND EMAIL Deputy Chief Charlie Brown, Board Chairman Ocoee Police Patrol 175 North Bluford Avenue Ocoee FL 34761 Re: City of Ocoee Municipal Police Officers' and Firefighters' Retirement Trust Fund Benefit Rate Increase Dear Charlie: As requested, we have performed a special actuarial analysis to determine the costs associated with increasing the benefit accrual rate from 3.00% to either 3.25% or 3.50% for each year of Credited Service. Option (a) provides for a 3.25% benefit accrual rate, combined with removal of the $200 supplement, and an increase in the vesting requirement from 5 years to 10 years. Option (b) provides for a 3.50% benefit accrual rate, combined with removal of the $200 supplement, and an increase in the vesting requirement from 5 years to 10 years. The impact of the changes on the funding requirements, determined as of October 1, 2007, as applicable to the plan/fiscal year ending September 30,2009, are as follows: Proposed Proposed Current 3.25% 3.50% Total Required Contribution $1,306,364 $1,372,087 $1,523,058 % of Total Annual Payroll 21.1% 22.2% 24.7% Member Contributions 469,465 469,465 469,465 State Contribution 238,045 303,768 354,247 Balance From City 598,854 598,854 699,346 % of Total Annual Payroll 9.7% 9.7% 11.3% Increase to City 0 1 00,492 % of Total Annual Payroll 0.0% 1.6% 13420 Parker Commons Blvd.. Suite 104 . Fort Myers. Florida 33912 . 239-433-5500 . Fax 239-481-0634 . www.foster-foster.com Mr. Charlie Brown August 5,2008 Page 2 Please note that the $180,048 excess state reserve has been utilized for partial funding of the described benefit improvements, in addition to increasing the annual state contribution to the amount received during the fiscal year ending September 30, 2007. Any use of additional state monies requires membership approval. If you have any questions regarding this analysis, please let us know. DHL/kob Sincerely, fiJi 009" cc: H. Lee Dehner, Board Attorney I I I I I I I I I I I I I I I I I I I SUMMARY OF REPORT 1 The regular annual actuarial valuation of the City of Ocoee Municipal Police Officers' and Firefighters' Retirement Trust Fund, performed as of October 1, 2007, has been completed, and the results are presented in this Report. The contribution amounts developed in this valuation are applicable to the City's fiscal year ended September 30, 2009. The contribution requirements, compared with amounts developed in the January 30, 2008, Actuarial Impact Statement (determined as of October 1, 2006), are as follows: Valuation Date 10/1/2006 Applicable Fiscal Year 9/30/2008 Total Required Contribution $1,765,726 % of Total Annual Payroll 29.9% Expected Member Contributions 448,293 Applicable State Contribution * 238,045 Balance From City 1,079,388 % of Total Annual Payroll 18.3% * "Frozen" per Chapters 175 and 185, Florida Statutes. 10/1/2007 9/30/2009 $1,306,364 21.1% 469,465 238,045 598,854 9.7% Plan experience during the last 12 months has been more favorable than expected, relative to the actuarial assumptions. The primary components of favorable experience included a 9.3% investment return (Actuarial Asset basis) that exceeded the 8.0% assumption, and higher than expected turnover. These gains were partially offset by average increases in pensionable compensation that exceeded the assumed rate and an increase in the average entry age of Plan participants.