HomeMy WebLinkAboutItem 12 An Ordinance Amending City of Ocoee Police Officers’ and Firefighters’ Retirement Trust Fund
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AGENDA ITEM COVER SHEET
Meeting Date: April I", 200i
Item # -1Z
Contact Name:
Contact Number:
Robert Frank
Reviewed By:
Department Director:
City Manager:
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Subject: Amendment to the Police/Firefighter Pension Plan Ordinance
Background Summary:
Florida Statutes provide for state contributions to local police and fire pension plans for the express purpose
of providing improved or new benefits, These state funds must be expended by the city to fund benefit
improvements or placed in reserve until the implementation of such pension plan improvements require
additional funding. The pension board is recommending a $200 per month benefit increase to all police and
fire employees retiring after October 1, 2004.
Issue:
Amendment to police and fire pension plan ordinance to increase retirement benefits by $200 per month.
Recommendations
Approve Ordinance amendment on first reading.
Attachments:
Letter and actuarial analysis from Foster and Foster dated March 18, 2005
Letter from Christiansen and Dehner, pension plan attorneys dated March 17, 2005
Ordinance
Financial Impact:
Increased costs associated with the benefit improvement will be covered by the State's yearly contribution.
No additional costs will be incurred by the City.
Type of Item:
o Public Hearing
~ Ordinance First Reading
o Ordinance First Reading
o Resolution
o Commission Approval
o Discussion & Direction
For Clerk's Deaf Use:
o Consent Agenda
o Public Hearing
o Regular Agenda
o Original Document/Contract Attached for Execution by City Clerk
D Original Document/Contract Held by Department for Execution
Reviewed by City Attorney ~ OS- V." PAX.
Reviewed by Finance Dept.
Reviewed by ( )
ON/A
ON/A
ON/A
FOSTER & FOSTER, INC.
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TELEPHONE
(239) 433-5500
6290 CORPORATE COURT, C-201
FORT MYERS, FLORIDA 33919
FACSIMILE
(239) 481 - 0634
March 18, 2005
Mr. Robert D. Frank, City Manager
City of Ocoee
150 N. Lakeshore Drive
Ocoee, FL 34761
Re: Police Officers' and Firefighters' Retirement Trust Fund
Dear Mr. Frank:
In response to the discussion at our meeting on March 16 regarding the proposed
benefit improvements to the referenced retirement program (providing a $200 per
month benefit supplement to current and future retirees), we are writing to advise that,
on the basis of the current level of State contributions, the improvements will not impact
the City's funding requirements to the Fund.
The sources of funding the additional liability are the excess State contributions that
have been accumulating in the Excess State Monies Reserve (see attached Exhibit A)
as required by the provisions of Chapter 175 and 185, Florida Statutes, as amended,
along with an increased level of annual State contributions in future plan years.
As regards the accumulated excess State contributions, Exhibit A indicates that since
1998, $242,1_88.43 has accumulated in the Reserve. This amount, which has been
segregated from Hie Fund assets to be used for the sole purpose of funding benefit
improvements, will be applied to fund the increased liabilities when the improvement is
adopted. In addition, the amount of State money received annually that can be used by
the City to determine its minimum required contribution will be increased from $1 Q5,650
to $238,045 (see attached Actuarial Impact Statement dated November 8,2004). As
can be seen, the adjustment in the State contribution amount results in no impact on
the City's funding requirements to the program resulting from the improvement.
If you have any questions, please don't hesitate to contact us,
Sincerely,
tJwj ~
Ward V. Foster, Jr.
WVF/nck
Cc: Tony Wilson, Chairman
H. Lee Dehner, Board Attorney
Exhibit A
Excess State Monies Reserve
Police Distribution Fire Distribution
Actual Applicable Excess Actual Applicable Excess
State "Frozen" State Monies State "Frozen" State Monies
Contribution Amount Reserve Contribution Amount Reserve
1998 77,593.84 77,593.84 0.00 34,009.73 34,009.73 0.00
1999 73,225.34 77,593.84 0.00 40,617.73 34,009.73 6,608.00
2000 112,398.92 77,593.84 34,805.08 44,845.46 34,009.73 10,835.73
2001 116,740.00 116,740.00 0.00 53,402.93 48,909.57 4,493.36
2002 124,488.52 116,740.00 7,748.52 65,579.14 48,909.57 16,669.57
2003 166,419.40 116,740.00 49,679.40 69,538.24 48,909.57 20,628.67
2004 172,215.42 116,740.00 55,475.42 84,154.25 48,909.57 35,244.68
147,708.42 94,480.01
Accumulated Police Excess
Accumulated Fire Excess
Total State Monies Reserve
147,708.42
94,480.01
242,188.43
CITY OF OCOEE MUNICIPAL POLICE OFFICERS'
AND FIREFIGHTERS' RETIREMENT TRUST FUND
ACTUARIAL IMPACT STATEMENT
November 8, 2004
Attached hereto is a comparison of the impact on the Total Required Contribution (per
Chapter 112, Florida Statutes), and the Required City Contributions, resulting from the
implementation of the following change:
1.) Provide current and future service retirees and the beneficiaries of deceased
service retirees with a $200 monthly benefit supplement payable for life.
The cost impact, determined as of October 1 , 2004, is as follows:
Current
Total Required Contribution $1,582,788
% of Total Annual Payroll 30.1 %
Expected Member Contributions 399,048
Applicable State Contribution * 165,650
Balance From City 1,018,090
% of Total Annual Payroll 19.4%
* "Frozen" per Chapters 175 and 185, Florida Statutes.
Proposed
$1,655,183
31.5%
399,048
238,045
1,018,090
19.4%
The changes presented herein are in compliance with Part VII, Chapter 112, Florida
Statutes and Section 14, Article X of the State Constitution.
w!~~tt!ir. 11/ 4 ZOO i
Enrolled Actuary #02-2808
STATEMENT OF PLAN ADMINISTRATOR
The prepared information presented herein reflects the estimated cost of the
proposed improvement.
---<;;~~
Chairman, Board of Trustees
Comparative Summary of Principal Valuation Results
Total
Before After
10/1/04 10/1/04
108 108
9 9
4 4
0 0
8 8
1 1
130 130
$4,953,418 $4,953,418
4,953,418 4,953,418
A. Participant Data
Actives
Service Retirees
DROP Retirees
Beneficiaries
Terminated Vested
Disability Retirees
Total Annual Payroll
Payroll Under Assumed Ret. Age
Annual Rate of Payments to:
Service Retirees
DROP Retirees
Beneficiaries
Terminated Vested
Disability Retirees
257,928
121,005
o
66,132
17,253
257,928
121,005
o
66,132
17,253
B, Assets
Actuarial Value
Market Value
13,056,567
13,084,614
13,056,567
13,084,614
C. Liabilities
Present Value of Benefits
Active Members
Retirement Benefits
Disability Benefits
Death Benefits
Vested Benefits
Refund of Contributions
Service Retirees
DROP Retirees *
Beneficiaries
Terminated Vested
Disability Retirees
Excess State Monies Reserve
14,756,667
1,106,370
169,411
2,021,439
510,990
2,873,096
1,218,090
o
341,971
205,913
242,188
15,399,974
1,106,370
169,411
2,021,439
510,990
3,113,308
1,318,694
o
341,971
205,913
o
Total
23,446,134
24,188,069
* Liabilities shown represent present value of future payments. Assets in item B.,
above, do not include accumulated DROP account balances.
Before Aliter
10/1/04 10/1/04
C. Liabilities - (Continued)
Liabilities Due and Unpaid $0 $0
Present Value Fut Salaries (AA) 34,195,500 34,195,500
Present Value Fut Salaries (EA) 25,038,400 25,038,400
Present Value of Future
Member Contributions 2,598,858 2,598,858
Present Value of Future
Normal Costs (Entry Age) 2,784,864 2,929,575
Actuarial Accrued Liability 14,399,584 1,858,866
Unfunded Actuarial Accrued 1,343,017 1,841,613
Liability (UAAL)
D. Actuarial Present Value of Accrued Benefits
Vested Accrued Benefits
Inactives
Actives
Member Contributions
Total
4,639,070 4,979,886
4,640,595 4,939,396
2,213,532 2,213,532
------------- ----------
11,493,197 12,132,814
45,367 47,345
-------------- ----------
11,538,564 12,180,159
Non-vested Accrued Benefits
Total Present Value Accrued
Benefits
Increase (Decrease) in Present Value of
Accrued Benefits Attributable to:
Plan Amendments
Assumption Changes
New Accrued Benefits
Benefits Paid
Interest
Other
$0
o
(1,227,147)
(422,674)
1,008,227
o
($641,595)
G. Net Actuarial Gain (Loss)
N/A
* Contributions developed as of 10/1/2004 are expressed as a percentage of projected
payroll at 10/1/2005 of: $5,250,623
ACTUARIAL ASSUMPTIONS AND FUNDING METHODS
Mortality Rate
I nterest Rate
Retirement Aqe
Disability Rate
Termination Rate
Salary Increases
Payroll Growth
Administrative Expenses
Aqe
20
30
40
50
% Becoming Disabled
Durinq the Year
0.14%
0.18%
0,30%
1,00%
Assumptions
1983 Group Annuity Mortality Table.
8% per year compounded annually,
net of investment related expenses.
Earlier of age 55 and 10 years of service
or 25 years of service, regardless of age.
Also, any member who has reached
Normal Retirement is assumed to
continue employment for one additional
year.
See table below (1205).
See table below (T-3).
6.0% per year until the assumed
retirement age; see table below.
Projected salary at retirement is
increased 20% to account for
non-regular compensation.
3.0% per year.
$21,200 annually.
% Terminating
Durinq the Year
Current Salary
as a % of Salary
at AQe 55
50.0%
34.9%
3,8%
1,5%
13.0%
23.3%
41.7%
74.7%
Fundinq Methods
Frozen Entry Age Actuarial Cost Method.
SUMMARY OF PLAN PROVISIONS
Eliqibility
Full-time employees who are classified as
Police Officers ,or Firefighters participate as a
condition of employment.
Credited Service
Total years and fractional parts of years of
employment with the City as a Police Officer or
Firefighter,
Salary
W-2 Compensation, plus tax-deferred and tax-
sheltered income.
Averaqe Final Compensation
Average Salary for the 5 best
years of the 10 years immediately
preceding retirement or termination,
Member Contributions
7.6% of Salary.
City and State Contributions
Remaining amount required
in order to pay current costs and
amortize unfunded past service
cost, if any, as provided in Part VII, Chapter
112, F.S.
Normal Retirement
Date
Earlier of Age 55 and 10 years of Credited
Service, or 25 years of Credited Service,
regardless of age.
Benefit
3.0% of Average Final Compensation
times
Credited Service
Form of Benefit
Ten Year Certain and Life Annuity
(options available).
Early Retirement
Eligibility
Age 45 and 5 Years of Credited
Service.
Benefit
Accrued benefit, reduced 3% per year to age
50 and actuarially reduced from age 50 to age
45.
Vestinq
Schedule
100% after 5 years of Credited
Service.
Benefit Amount
Member will receive the vested
portion of his (her) accrued bene
fit payable at the otherwise EarlY'
or Normal Retirement Date.
Disabilitv
Eligibility
Service Incurred
Covered from Date of Employmemt.
Non-Service Incurred
10 years of Credited Service,
Exclusions
Disability resulting from use of
drugs, illegal participation in
riots, service in military, etc.
Benefit
Benefit accrued to date of disab~
ity but not less than 42% of Aver
age Final Compensation (Service
Incurred).
Duration
Payable for life (with 120 paymefris
guaranteed) or until recovery (as determined
by the Board). Optional forms of payment are
available.
Death Benefits
Pre-Retirement
Vested
Monthly accrued benefit payable fD
designated beneficiary for 10
years.
Non-Vested
Refund of accumulated contributions
without interest.
Post-Retirement
Benefits payable to beneficiary in
accordance with option selected at
retirement.
Board of Trustees
a. Two Commission appointees,
b. One Member from each Department
elected by the membership, and
c. Fifth Member elected by other 4
and appointed by Commission.
Deferred Retirement Option Plan
Eligibility
Within 12 months following satisfaction of
Normal Retirement.
Participation
Not more than 60 months.
Rate of Return
At election of member (may change once
during DROP period) either: 1) actual net rate
of investment return (total return net of broker-
age commissions, transaction costs, and
management fees), or 2) 6.5%. Earnings are
credited each fiscal quarter.
Form of Distribution
Cash lump sum (options available) payable at
termination of employment.
LAW OFFICES
CHRISTIANSEN & DEHNER, P.A.
SCOTT R. CHRISTIANSEN
H. LEE DEHNER
63 SARASOTA CENTER BLVD,
SUITE 107
SARASOTA,FLORlDA34240
PHONE: (941) 377-2200
FAX: (941) 377-4848
March 17, 2005
Mr. Robert Frank
City Manager
City of Ocoee
150 N. Lakeshore Drive
Ocoee, FL 34761
Re: City ofOcoee Police Officers' and Firefighters' Retirement Trust Fund
Dear Rob:
Pursuant to our meeting of yesterday, I am forwarding the proposed ordinance providing a
supplemental benefit for the designated pension plan. It is my understanding that you will set this
document for reading by the City Commission. If you require Ward Foster's or my attendance at
either the first or second reading, please call my office at your earliest convenience for scheduling
purposes. Please note that the $200,00 supplement is reduced for early retirement.
By copy ofthis letter to the Board's Actuary, Foster & Foster, Inc., I am requesting them to
provide the letter we discussed yesterday to you.
If you have any questions or comments, please do not hesitate to contact me,
Yours very truly,
A"
~-- ^~
H. Lee Dehner
HLD\noc
Enclosure
cc: Tony Wilson, with enclosure
ORDINANCE NO.
AN ORDINANCE OF THE CITY OF OCOEE, FLORIDA,
RELATING TO THE CITY OFOCOEE MUNICIPAL POLICE
OFFICERS' AND FIREFIGHTERS' RETIREMENT TRUST
FUND; AMENDING ORDINANCE NUMBER 96-20, AS
SUBSEQUENTLY AMENDED; AMENDING SECTION 6,
BENEFIT AMOUNTS AND ELIGIBILITY; 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 of
Ocoee Municipal Police Officers' and Firefighters' Retirement Trust Fund, as subsequently
amended, is hereby further amended by amending Section 6, Benefit Amounts and Eligibility,
to read as follows:
SECTION 6. BENEFIT AMOUNTS AND ELIGmILITY.
1. Normal Retirement Date.
A Member's normal retirement date shall be the first day of the month
coincident with, or next following the earlier of the completion of twenty-five (25) years of
Credited Service regardless of age, or the attainment of age fifty- five (55) and the completion
often (10) years of Credited Service. A Member may retire on his or her normal retirement
date or on the first day of any month thereafter, and each Member shall become 100% vested
in his or her accrued benefit on the Member's normal retirement date. Normal retirement
under the System is Retirement from employment with the City on or after the normal
retirement date.
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 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 three percent (3.0%) of Average Final Compensation,
for each year of Credited Service.
3. Early Retirement Date.
A Member may retire on his or her early retirement date which shall be the first
day of any month coincident with or next following the attainment of age forty-five (45) and
the completion of five (5) years of 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.
1
4. Early Retirement Benefit.
A Member retiring hereunder on his or her early retirement date may receive
either a deferred or an immediate monthly retirement benefit payable for life as follows:
A. A deferred monthly retirement benefit which shall commence on what
would have been his or her normal retirement date determined based
upon his or her actual years of Credited Service and shall be continued
on the first day of each month thereafter. The amount of each such
deferred monthly retirement benefit shall be determined in the same
manner as for retirement on his or her normal retirement date except
that Credited Service and Average Final Compensation shall be
determined as of his or her early retirement date, determined based
upon his or her actual years of Credited Service; or
B. An immediate monthly retirement benefit which shall commence on his
or her early retirement date and shall be continued on the first day of
each month thereafter. The benefit payable shall be as determined in
paragraph A above, reduced by three percent (3%) for each year to age
50 and actuarially reduced from age 50 to age 45, by which the
commencement of benefits precedes the date which would have been
the Member's normal retirement date determined based upon his actual
years of credited service had he eOlltinned emplo, mOllt as a Police
Officer or firefighter.
2.. Supplemental Benefit
Effective October 1.2004. all current and future retirees. 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. Repeal of Ordinances. All ordinances or parts of ordinances in conflict
herewith are hereby repealed.
SECTION 4. Effective Date. This ordinance shall take effect upon second reading
and adoption.
PASSED AND ADOPTED this _ day of
, 2005.
ATTEST:
APPROVED:
CITY OF OCOEE, FLORIDA
Beth Eikenberry, City Clerk
By:
S. Scott Vandergrift, Mayor
2
(SEAL)
ADVERTISED
READ FIRST TIME
READ SECOND TIME AND ADOPTED
FOR USE AND RELIANCE ONLY BY
THE CITY OF OCOEE, FLORIDA
APPROVED AS TO FORM AND LEGALITY
THIS day of , 2005.
CHRISTIANSEN & DEHNER, P.A.
Special Counsel
By:
noc\ocoee\pf\03-16-05.ord
APPROVED BY THE OCOEE CITY
COMMISSION AT A MEETING HELD
ON ,2005, UNDER
AGENDA ITEM NO.
3
Copy of Public Hearing Advertisement
Orlando Sentinel
C. \Ct S S"\-h ed
Date Published
SeC-r.Ol' ~y ,'11 'Zf5D S
Pt\9C G 1
"
Advertisement
CITY OF OCOEE
LEGAl NOTICE
A Public H,"in, before the
Oco.. City Commll.io.. wi II be
held Tu.....y, April 19. 2005. 7:15
P.M. or as soon thereafter os
may be heard, in the Com.
mission Choll'lbers of C)-II'-
Hall at 150 North Lakeshore
Drive, Ocoee. Florida. to
consider the following:
AN ORDINANCE OF
THE CITY OF OCOEE,
FLORIDA. RELATING
TO THE CITY OF OCO.
EE MUNICIPAL POLI-
CE OFFICERS' AND
FIREFIGHTERS' RE-
TIREMENT TRUST
FUND; AMENDING
ORDINANCE NUM-
BER 96.20, AS SUBSE'
QUENTLY AMEN.
OED; AMENDING
SECTION 6, BENEFIT
AMOUNTS AND ELi-
GIBILITY; REPEA-
LING ALL ORDINAN-
CES IN CONFLICT
HEREWITH AND PRO-
VIDING AN EFFECTI-
VE DATE.
I f a person decides to appe.
al any decision mode bY the
above City Commission wit~
respect to any matter consI-
dered at such hearing, they
will need a record of the
proceedings, and for such
purpose they may need to
ensure that a verbati m reo
cord of the proceedings is
made, which record incl~-
des the testimony and eVI-
dence upon which the appe.
al is to be based.
All interested parties are in.
vited to attend and be heard
with respect to the above. In
accordance with the Amerl.
cans with Disabilities Act,
persons needing a special
accommodation or an inter.
preter to participate in this
proceeding should contact
the City Clerk's office at
954.561.6231 at least two
days prior to the date of he.
aring,
Beth Eikenberry
City Clerk
COR6127561 APR.9,2005
O:\Office Procedures\Copy of Public Hearing Advertisement.doc