HomeMy WebLinkAboutItem #11 Approval of Early Retirement Option
AGENDA ITEM COVER SHEET
Meeting Date: 03/21/06
Item # / I
Contact Name:
Contact Number:
James Carnicella
1032
Reviewed By: ~.
D~partment Director; ___-?:.!~
City Manager:
Background Summary:
The Pension Board for the City of Ocoee Municipal General Employees' Retirement Trust Fund is governed
by ordinance.
Issue:
Amendment to the General Employees' Pension Ordinance to allow an Early Retirement Option window for
employees with more than 30 years of service. These employees will be entitled to a normal retirement
amount based on their years of service at the present 2.5% multiplier. These employees would not be subject
to the age penalty provision for retiring before age 60.
Recommendations
Staff recommends the Commission direct staff to amend the General Employees' Retirement Trust Fund
ordinance to allow for a one-time early retirement option for current employees with 30+ years of service.
Attachments:
Actuarial Analysis.
Financial Impact:
Foster & Foster, the General Employees' Pension Actuary has stated it will cost $37,291 to fund this early
retirement option window. The anticipated savings from replacing the employees, by hiring replacements at
the minimum of their respective pay grades is $59,782. Therefore, the savings to the City after payment
($37,291) is made for the cost of the early retirement option window will be $22,491.
Type of Item:
D Public Hearing
D Ordinance First Reading
D Ordinance First Reading
D Resolution
D Commission Approval
~ Discussion & Direction
For Clerk's DeDf Use:
D Consent Agenda
D Public Hearing
D Regular Agenda
D Original DocumenUContract Attached for Execution by City Clerk
D Original DocumenUContract Held by Department for Ex~cution
Reviewed by City Attorney
Reviewed by Finance Dept.
Reviewed by ( )
o N/A
o N/A
o N/A
FOSTER & FOSTER, INC.
~rmd~~~~~~
TELEPHONE
(239) 433-5500
6290 CORPORATE COURT, C-201
FORT MYERS, FLORIDA 33919
FACSIMILE
(239) 481-0634
March 2, 2006
Via Mail & E-mail
Mr. Jim Carnicella
City of Ocoee
General Employees' Pension Board
150 N. Lakeshore Avenue
Ocoee, FL 34761
Re: City of Ocoee
Municipal General Employees' Retirement Trust Fund
Dear Jim:
As requested, we have performed a special actuarial analysis to determine the' costs associated
with providing an Early Retirement Incentive Program for those active memberswith 30 or more
years of Credited Service as of October 1, 2005. The analysis considers benefits accrued at
either 2.5% or 3.0% of Average Final Compensation for each year of Credited Service for those
eligible members. '
The impacts on the funding requirements, determined as of October 1, 2005, and applicable to
the fiscal year ended September 30,2007, are as follows:
Current 30 & Out 30 & Out
2.50% BR 2.50% BR 3.00% BR
Total Required Contribution $1,176,453 $1,198,767 $1,222,878
% of Projected Annual Payroll 18.3% 19.2% 19;6%,
Expected Member Contributions 476,648 461,671 461 :671
Balance From City 699,805 737,096 761,207
% of Projected Annual Payroll 10.9% 11.8% 12.2%
City Increase 37,291 61 ,402
% of Projected Annual Payroll 0.6% 1.0%
If you have any questions regarding this analysis, please let me know.
DHL/nck
Cc: H. Lee Dehner