11-18-1999 - Special
Agenda/Pension
11-18-99
0/(?Z/
ACTION AGENDA - SPECIAL MEETING
Board of Trustees of the Employees' Pension Fund
November 18, 1999
1. Call to Order - 6:28 p.m.
2. Approve changes to City of Clearwater Employees' Pension Plan; authorize staff to
proceed with ordinance revision and referendum - Approved. Authorized.
3. Adjourn - 7:01 p.m.
SUBJECT/RECOMMENDATION:
Trustees of the
Employees' Pension Plan
Agenda Cover Memorandum
Agenda Item #
Meeting Date:
Approve changes to the City of Cl arwater Employees' Pension Plan and authorize staff to proceed with ordinance
revision and referendum.
? and that the appropriate officials be authorized to execute same.
SUMMARY:
Recommended Plan Changes:
1. Add an ad hoc Cost of Living Adjustment (COLA) of 1.5% for active employees and retirees.
2. Change Average Monthly Co pensation from final five years of service to high five years of service.
3. Change plan so that vested a ployees retiring at age 65 with less than 20 years of service would get a
"normal" retirement instead o Tan actuarial equivalent or "reduced" benefit.
Reviewed by: Originating Dept: Costs
Legal NA Info Tech NA Human Resources
Budget NA Public Works NA User Dept. Funding Source:
Purchasing NA DCM/ACM W Captiallmprovement
Risk Mgmt NA Other NA Attachments Operating
Other
Appropriation Code:
Submitted by: ? None
Total
Current Fiscal Year
Printed on recycled paper Rev. 2/48
City of Clearwater
Human Resod=es
PRO
PENSION PLAN
CNANGES
PENSION CHANGE
ASSUMP°IONS
¦ City Contributions
<= 7% of Payroll
¦ New Benefits Paid Out of
Pension Credit Balance
e Actuarial Assumptions
Met
2
Pension Options
Ad Floc
Cost of
Laving Adjustment
(COLA)
1
OPTION 1:
Active Employees
2% COLA
¦ Minimum Req. $3.2M or 6.5%
¦ Increase Req. $5.5M or 11 %
¦ Min + Inc Req. $8.7M or 17.5%
¦ Current Req. $7.4M or 15%
¦ Additional $1.3M or 2.5% to be
funded from Credit Balance.
OPTION 1:
Active Employees
2% COLA
¦ Unfunded Liability + $39M
¦ Credit Balance Stabilized
$8M in 2006
OPTION 2:
Active Employees/Retirees
1 1/2% COLA
¦ Minimum Req. $3.2M or 6.5%
¦ Increase Req. $5.3M or 10.7%
¦ Min + Inc Req. $8.5M or 17.2%
¦ Current Req. $7.4M or 15%
¦ Additional $1.1 M or 2.2% to be
funded from Credit Balance.
2
OPTION 2:
Active Employees/Retirees
1 1/2% COLA
¦ Unfunded Liability + $44.2M
¦ Credit Balance Stabilized
$9.3M in 2006
OPTION 3:
Active Employees/Retirees
2% COLA
¦ Minimum Req. $3.2M or 6.5%
° Increase Req. $7.1M or 14.3%
¦ Min + Inc Req. $10.3M or 20.8%
¦ Current Req. $7.4M or 15%
° Additional $2.9M or 5.8%
funded from Credit Balance &
Increase Contribution
OPTION 3:
Active Employees/Retirees
2% COLA
¦ Unfunded Liability + $59M
¦ Credit Balance Depleted by
2004; Increase Contribution
Required
9
3
Pension Options
Change Average
Monthly
Compensation
10
OPTION 4
¦ From Final 5 Years of
Service to Highest 3
Years
¦ Annual Funding +
$1.2M from Credit
Balance
OPTION 5
¦ From Final 5 Years of
Service to Highest 5
Years
¦ No Additional Increase
in Annual Funding
4
Pension Options
Change Annuity for
Vested Employees
Retiring at Age 66
w/ < 20 Years of
Service
1)
OPTION 6
¦ Change Actuarial Equivalent
or "Reduced" to "Normal"
Benefit
¦ Annual Funding + $177K
from Credit Balance
14
Age 65 -1® Y'rs of
Service - $32K Salary
¦Actuarially Reduced
Monthly Benefit: $263
¦ Normal Monthly
Benefit: $733
¦ Difference: + $470
IS
5
RECOMMENDED PLAN
CHANGES
¦ 1.5% AB HOC COLA For
Employees & Retirees
¦ Highest 5 Years Average
Compensation
¦ 65/10 "Normal"
Retirement Benefit
16
CSI ®i cieamter
Home Resources
Cleamater
PROPOSED
PENSION PUIN CHANGES
17
6