HomeMy WebLinkAboutItem #11 First Reading of Ordinance - Amending General Employees' Retirement Ordinance No. 2009-020norida
AGENDA ITEM COVER SHEET
Meeting Date: October 7, 2014
Item # 11
Reviewed By:
Contact Name: Russ Wagner, Chair. - GERB Department Director:
Contact Number: Ext 1016 City Manager:
Subject: Ordinance Amending Retirement Ordinance No. 2009 -020
Background Summary:
At a Special Meeting held on August 19, 2014, the General Employees' Retirement Board adopted an amended
Annual Actuarial Report dated 8/13/2014 which was based upon the results of an Actuarial Experience Study
performed by Foster & Foster, Inc. The purpose of this study was to evaluate the assumptions and methods
used to determine funding levels for the General Employees' Trust Fund to ensure financial soundness going
forward.
After careful review of all of the parameters affecting required contributions rates needed to adequately fund the
retirement program, the Board accepted several actuarial assumption changes that are incorporated in the
amended Annual Actuarial Report. These modifications resulted in a significant reduction to the required City
contribution rate from 20.5% to 13.14°/x, for an annual monetary savings to the City of almost one -half million
dollars.
Issue:
Should the Mayor and City Commissioners adopt an Ordinance amending Section 1, Definitions, of Ordinance
No. 2009 -020 pertaining to "Actuarial Equivalent ".
Recommendations
In order to further reduce risk to the City going forward, the Board also determined that a slight reduction to the
Actuarial Equivalent or Assumed Annual Rate of Return on investments from 8.0% to 7.75% would be prudent
and further strengthen the financial integrity of the Fund. As a result, the Retirement Board formally requests
that the attached Ordinance be adopted by the City Commission to effectuate this change.
Attachments:
Ordinance Amending Ordinance No. 2009 -020
Foster & Foster Impact Letter dated 9/11/14
Financial Impact:
None, as pointed out in the attached letter from Douglas Lozen of Foster & Foster, the change will have
no measurable impact on the Plan's funding requirement.
Type of Item: (please mark with an 'Y)
Public Hearing For Clerk's Dept Use:
X Ordinance First Reading Consent Agenda
Ordinance Second Reading Public Hearing
Resolution Regular Agenda
Commission Approval
Discussion & Direction
Original Document/Contract Attached for Execution by City Clerk
Original Document/Contract Held by Department for Execution
Reviewed by City Attorney
Reviewed by Finance Dept.
Reviewed by Q
N/A
N/A
N/A
2
FOSTER & FOSTER
September 11, 2014
VIA EMAIL
Ferrell Jerrie, Plan Administrator
City of Ocoee
Municipal General Employees' Trust Fund
13420 Parker Commons Blvd
Fort Myers, FL 33914
Re: City of Ocoee
Municipal General Employees' Retirement Trust Fund
Ferrell:
In response to the letter from Lee Definer dated September 4, 2014, we have reviewed the
proposed Ordinance (identified on page 2 as kshlocoeelgen107- 31- 14.ord) providing for a change
in the interest rate assumption utilized for the definition of Actuarial Equivalence. While
adoption of this assumption may result in a de minimis impact (either positive or negative) over
the life of the Plan, it is not currently measureable and therefore does not result in an immediate
change to the Plan's funding requirernents.
Because the changes do not result in a change in the valuation results, it is our opinion that a
formal Actuarial impact Statement is not required in support of its adoption. However, since the
Division of Retirement must be aware of the current provisions of all public pension programs, it
is recommended that you send a copy of this letter and a copy of the fully executed Ordinance to
the following office:
1`,lir. Keith Brinkman
Bureau of Local Retirement Systems
Division of Retirement
P. O. Box 9000
Tallahassee, FL 32315 -9000
If you have any questions, please let me know.
Sincerely,
Dou as H. ze EA, MAAA
DHL /Ike
cc via emal: Lee Definer, Plan Attorney
13420 Parker Commons Blvd., Suite 104 Fort Myers, Fl- 33912 • (239) 433 -5500 • Fax (239) 481 -0634 • www.foster- foster.com
ORDINANCE NO.
AN ORDINANCE OF THE CITY OF OCOEE, FLORIDA,
RELATING TO THE CITY OF OCOEE MUNICIPAL
GENERAL EMPLOYEES' RETIREMENT TRUST FUND,
ADOPTED BY ORDINANCE NUMBER 2009 -020; AS
SUBSEQUENTLY AMENDED; AMENDING SECTION 1,
DEFINITIONS BY AMENDING THE DEFINITION OF
"ACTUARIAL EQUIVALENT "; PROVIDING FOR
SEVERABILITY OF PROVISIONS; REPEALING ALL
ORDINANCES IN CONFLICT HEREWITH AND PROVIDING
AN EFFECTIVE DATE.
SECTION 1 . Authori . The City Commission of the City of Ocoee 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 the City of Ocoee Municipal General Employees' Retirement Trust Fund
adopted by Ordinance No. 2009 -020, as subsequently amended, is hereby further amended by
amending Section 1, Definitions, by amending the definition of "Actuarial Equivalent ", to read as
follows:
Actuarial Equivalent means a benefit or amount of equal value, based upon the RP 2000
Combined Healthy Mortality Table and an interest rate of seven and three
quarters percent (7.75 %) per annum This definition may only be amended by the City pursuant to
the recommendation of the Board using assumptions adopted by the Board with the advice of the
plan's actuary, such that actuarial assumptions are not subject to City discretion.
SECTION 3 . Severab In the event any section, subsection, paragraph, sentence, clause,
phrase or word of this ordinance shall be held invalid by a court of competent jurisdiction, then such
invalidity shall not affect the remaining portions hereof.
SECTION 4 . Repeal of Ordi All ordinances or parts of ordinances in conflict
herewith are hereby repealed.
SECTION 5 . Effective Date This ordinance shall be effective on the date of adoption.
PASSED AND ADOPTED this
ATTEST:
day of , 2014
APPROVED:
CITY OF OCOEE, FLORIDA
Beth Eikenberry, City Clerk
(SEAL)
By:
S. Scott Vandergrift, Mayor
Page 1
ADVERTISED 1 2014
READ FIRST TIME 1 2014
READ SECOND TIME AND ADOPTED
.2014
FOR USE AND RELIANCE ONLY BY
THE CITY OF OCOEE, FLORIDA
APPROVED AS TO FORM AND LEGALITY
THIS day of , 2014
CHRISTIANSEN & DEHNER, P.A.
Special Counsel
IN
APPROVED BY THE OCOEE CITY
COMMISSION AT A MEETING HELD ON
, 2014 UNDER AGENDA
ITEM NO.
ksh \ocoeeAgen \07- 31- 14.ord
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