Item #13 Approval of Change to the City of Ocoee Municipal General Employees Retirement Trust Fund
AGENDA ITEM COVER SHEET
Meeting Date: 1/16/07
Item # ~2>
Contact Name:
Contact Number:
James Carnicella
1032
Reviewed By: 1\ ~
~~~~::~~~ireclor:i1iA ~~
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 change the multiplier from 2.5% to 3%. This
issue was approved by the General Employees' Pension Board and the Employee Committee. Furthermore,
the issue was discussed at the budget workshops and staff was directed to return with a recommendation.
Recommendations
Staff recommends the Commission adopt the Pension Board changes as amended in the attached ordinance
for the City of Ocoee General Employees' Retirement Trust Fund first reading.
Attachments:
Attached is the Ordinance pertaining to the recommended change.
Financial Impact:
An Actuarial Impact Statement dated 1/2/07 prepared for the Pension Board by Foster & Foster, the General
Employees' Pension Actuary, is attached. The current Actuarial Impact Statement is based upon a 3%
pension multiplier and 81 % maximum benefit after 27 years of service. Though there is no financial impact
for FY 07, the City's contribution to fund this change will be approximately 12.5% of payroll in FY 09. The
City's contribution rate for FY 07 is 9.4%
Type of Item:
IZI Public Hearing
D Ordinance First Reading
D Ordinance First Reading
D Resolution
D Commission Approval
D Discussion & Direction
For Clerk's Deoi 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. 20-
AN ORDINANCE OF THE CITY OF OCOEE, FLORIDA,
RELATING TO THE CITY OF OCOEE MUNICIPAL
GENERAL EMPLOYEES' RETIREMENT TRUST FUND,
ADOPTED AND RESTATED IN FULL BY ORDINANCE
NUMBER 96-19; 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 of Ocoee has the authority
to adopt this ordinance pursuant to Article VIII ofthe Constitution ofthe State of Florida and
Chapter 166, Florida Statutes.
SECTION 2: That Ordinance No. 96-19, adopting the amended and restated City of
Ocoee Municipal General Employees' Retirement Trust Fund, is hereby amended by
amending Section 6, Benefit Amounts and Eligibility, subsection 2, Normal Retirement 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 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 tw 0 and one-half P"I ""ut (2.5%) three percent (3 %) of Average
Final Compensation, for each year of Credited Service.
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 on October 1. 2006.
PASSED AND ADOPTED this _ day of
, 2006.
ATTEST:
APPROVED:
CITY OF OCOEE, FLORIDA
Beth Eikenberry, City Clerk
By:
S. Scott Vandergrift, Mayor
(SEAL)
ADVERTISED ,2006
READ FIRST TIME , 2006
READ SECOND TIME AND ADOPTED
,2006
FOR USE AND RELIANCE ONLY BY
THE CITY OF OCOEE, FLORIDA
APPROVED AS TO FORM AND LEGALITY
TillS _ day of ,2006.
CHRISTIANSEN & DEHNER, P.A.
Special Counsel
By:
noc\ocoee\gcn\OS-19-06.ord
Page 2
APPROVED BY THE OCOEE CITY
COMMISSION AT A MEETING HELD
ON , 2006 UNDER AGENDA
ITEM NO.
-------
CITY OF OCOEE
MUNICIPAL GENERAL EMPLOYEES'
RETIREMENT TRUST FUND
ACTUARIAL IMPACT STATEMENT
January 2, 2007
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.) Increase the Benefit Accrual Rate from 2.50% to 3.00% of Average Final
Compensation for each year of Credited Service for all future retirees. The
maximum benefit shall be capped at 81% of Average Final Compensation.
The cost impact, determined as of October 1, 2006, as applicable to the plan/fiscal year
ending September 30,2008, is as follows:
Current Proposed
Total Required Contribution $1,205,231 $1,433,637
% of Total Annual Payroll 16.8% 19.9%
Expected Member Cont. 532,295 532,295
Balance From City 672,936 901,342
% of Total Annual Payroll 9.4% 12.5%
The changes presented herein are in compliance with Part VII, Chapter 112, Florida
Statutes and Section 1 Article X of the State Constitution.
Bradle inrichs, FSA, M.A.A.A.
Enrolled Actuary #05-6901
STATEMENT OF PLAN ADMINISTRATOR
The prepared information presented herein reflects the estimated cost of the
proposed improvement.
Chairman, Board of Trustees
7"
Comparative Summary of Principal Valuation Results
After
10/1/2006
A. Participant Data
Number Included
Actives
Service Retirees
Beneficiaries
Terminated Vested
Disability Retirees
DROP Retirees
Total
Before
10/1/2006
176 176
34 34
4 4
40 40
0 0
0 0
254 254
$6,685,539 $6,685,539
6,685,539 6,685,539
Total Annual Payroll
Payroll Under Assumed Ret. Age
Annual Rate of Payments to:
Service Retirees
Beneficiaries
Terminated Vested
Disability Retirees
DROP Retirees
500,936
18,790
327,989
o
o
B. Assets
Actuarial Value
Market Value
13,421,299
13,457,649
C. Liabilities
Present Value of Benefits
Active Members
Retirement Benefits
Disability Benefits
Death Benefits
Vested Benefits
Refund of Contributions
Service Retirees
Beneficiaries
Terminated Vested
Disability Retirees
DROP Retirees
Total
16,658,756
o
383,686
935,118
358,882
4,800,739
136,628
1,399,068
o
o
24,672,878
500,936
18,790
327,989
o
o
13,421,299
13,457,649
14,673,963
o
321,748
741,469
404,753
4,800,739
136.628
1,399,068
o
o
22,478,369
/T
After Before
Valuation Date 10/1/2006 10/1/2006
Applicable to Fiscal Year Ending 9/30/2008 9/29/2008
E. Pension Cost
Normal Cost (with interest) $1,140,883 $974,393
% of Total Annual Payroll* 15.9 13.5
Expected Adminstrative Expense 33,907 33,907
% of Total Annual Payroll* 0.5 0.5
Payment Required to Amortize
Unfunded Actuarial Accrued
Liability over 30 years
(as of 10/1/06) 258,847 196,932
% of Total Annual Payroll* 3.6 2.7
Total Required Contribution 1,433,637 1,205,231
% of Total Annual Payroll* 19.9 16.8
Expected Member Contributions 532,295 532,295
% of Total Annual Payroll* 7.4 7.4
Expected City Contrib. 901,342 672,936
% of Total Annual Payroll* 12.5 9.4
* Contributions developed as of 10/1/06 are expressed as a percentage of projected
percentage of projected annual payroll at 04/1/08 of $7,193,169.
7
After Before
10/1/2006 10/1/2006
C. Liabilities - (Continued)
Present Value of Future Salaries 51,146,804 51,146,804
Present Value of Future
Member Contributions 3,784,864 3,784,864
Normal Cost (Entry Age Normal) 1,044,765 892,301
Present Value of Future
Normal Costs (Entry Age Normal) 7,140,208 6,110,185
Actuarial Accrued Liability 17,532,669 16,368,183
Unfunded Actuarial Accrued 4,111,370 2,946,884
Liability (UAAL)
D. Actuarial Present Value of Accrued Benefits
Vested Accrued Benefits
Inactives
Actives
Member Contributions
$6,336,436 $6,336,436
3,476,517 2,627,549
2,346,531 2,346,531
$12,159,484 $11,310,516
248,804 174,404
$12,408,288 $11,484,919
Total
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
Total:
923,369
o
o
o
o
o
923,369
AGENDA ITEM COVER SHEET
Meeting Date: 11/21/06
Item #
,5
~~~d~ ~~
D~partment Director: _ ry7~ ~
CIty Manager: ___
Contact Name:
Contact Number:
James Carnicella
1032
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 change the multiplier from 2.5% to 3%. This
issue was approved by the General Employees' Pension Board and the Employee Committee. Furthermore,
the issue was discussed at the budget workshops and staff was directed to return with a recommendation.
Recommendations
Staff recommends the Commission adopt the Pension Board changes as amended in the attached ordinance
for the City of Ocoee General Employees' Retirement Trust Fund first reading.
Attachm~nts:
Attached is the Ordinance pertaining to the recommended change.
Financial Impact:
The Actuarial Impact Statement prepared for the Pension Board by Foster & Foster, the General Employees'
Pension Actuary, is attached. Though there is no financial impact for FY 07, the City's contribution to fund
this change will be approximately 15% of payroll in FY 09. The City's contribution rate for FY 07 is 1 I .0%
Type of Item:
18I Public Hearing
o Ordinance First Reading
o Ordinance First Reading
o Resolution
o Commission Approval
o Discussion & Direction
For Clerlc's DeDt Use:
o Consent Agenda
o Public Hearing
o 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
CITY OF OCOEE
MUNICIPAL GENERAL EMPLOYEES'
RETIREMENT TRUST FUND
ACTUARIAL IMPACT STATEMENT - TWO
BENEFIT RATE INCREASE
August 28, 2006
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) Increase the benefit accrual rate for all years of Credited Service for Members
terminating employment on or after the effective date from 2.50% to 3.00%. The
rate increase does not apply to Members who elect to retire under the proposed
Early Retirement Incentive program.
. The cost impact, determined as of October 1, 2005, as applicable to the planlfiscalyear
ending September 30, 2007, is as follows:
Cu rrent Proposed
Total Required Contribution $1,089,641 $1,396,831
% of Total Annual Payroll 17.5% 22.4 %
Expected Member Cont. 461,671 461,671
Balance From City 627,970 935,160
% of Total Annual Payroll 10.1% 15.0%
,. .
The changes presented herein are in compliance with Part VII, Chapter 112, Florida
Statutes and Section , Article X of he State Constitution.
STATEMENT OF PLAN ADMINISTRATOR
The prepared information presented herein reflects the estimated cost of the
proposed improvement.
Chairman, Board of Trustees
II ..02I~fO ~
Comparative Summary of Principal Valuation Results
Before After
10/1/05 10/1/05
A. Participant Data
Actives 157 157
Service Retirees 29 29
Beneficiaries 4 4
Terminated Vested 27 27
Disability Retirees 0 0
Total 217 217
Total Annual Payroll $5,885,653 $5,885,653
Payroll Under Assumed Ret. Age 5,885,653 5,885,653
Annual Rate of Payments to:
Service Retirees 452,547 452,547
Beneficiaries 18,790 18,790
Terminated Vested 256,658 256,658
Disability Retirees 0 0
B. Assets
Actuarial Value 11,741,104 11,741,104
Market Value 12,032,055 12,032,055
C. Liabilities
Present Value of Benefits
Active Members
Retirement Benefits 13,956,437 16,423,078
Disability Benefits 0 0
Death Benefits 300,525 355,595
Vested Benefits 711,431 890,954
Refund of Contributions 417,465 384,171
Service Retirees 4,307,252 4,307,252
Beneficiaries 142,954 142,954
Terminated Vested 1,007,976 1,007,976
Disability Retirees 0 0
Excess State Monies Reserve 0 0
-------------- --------------
Total 20,844,040 23,511,980
It-?l-O~ ~~
Before After
10/1/05 10/1/05
C. Liabilities - (Continued)
Liabilities Due and Unpaid $0 $0
Present Value Fut Salaries (AA) 46,361,400 46,361,400
Present Value Fut Salaries (EA) 48,206,200 48,206,200
Present Value of Future
Member Contributions 3,430,744 3,430,744
Present Value of Future
Normal Costs (Entry Age) 5,350,751 6,435,024
Actuarial Accrued Liability 15,493,289 17,076,956
Unfunded Actuarial Accrued 3,752,185 5,335,852
Liability (UAAL)
D. Actuarial Present Value of Accrued Benefits
Vested Accrued Benefits
Inactives
Actives
Member Contributions
5,458,182
2,438,680
2,191,683
5,458,182
3,140,261
2,191,683
Total
10,088,545
113,749
10,790,126
259,373
Non-vested Accrued Benefits
Total Present Value Accrued
Benefits
10,202,294
11,049,499
Increase (Decrease) in Present Value of
Accrued Benefits Attributable to:
Plan Amendments
Assumption Changes
New Accrued Benefits
Benefits Paid
Interest
Other
$847,205
o
o
o
o
o
$847,205
J J-;<I-Oft, ~
Before After.
10/1/05 10/1/05
E. Pension Cost
Normal Cost (with interest) $855,142 $1,077,327
% of Total Annual Payroll* 13.7 17.3
Payment Required to Amortize
Unfunded Actuarial Accrued
Liability over 30 years
(as of 10/1/05) 234,499 319,504
% of Total Annual Payroll* 3.8 5.1
Total Required Contribution 1,089,641 1,396,831
% of Total Annual Payroll* 17.5 22.4
Expected Member Contributions 461,671 461,671
% of Total Annual Payroll* 7.4 7.4
Expected City Contribution 627,970 935,160
% of Total Annual Payroll* 10.1 15.0
* Contributions developed as of 10/1/2005 are expressed as a percentage of projected
payroll at 10/1/2006 of: $6,238,792