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05-15-1995't. ?. ?E; .fem. ? :!. •'t ?. „ ?'S, .. .j'r., t I ? , 'r'? ,'i? .j,,; 'lt•s:.,, r.' rti: r :r , ;l?.,. ,?.; ??4l." °f. „5:. ;:o.'i?`?S `, .i :2' •t•. ' i'?, a`. .u- r`.,,, a t ?'?'? }.?? 3 :z? r• rt:', ? ,t - ?P ??' rr t: ? . Y?F ?'t' .A ! •r°.?;i'?flky?`i't, 6 ri"•., .. t.,, '¢fI'' ''8 ?.t!`•'.'` !. '•?J ?. -'ir)'.r, - ` p;?.r.? ,t'j.. . !', ••F'.: l.F?., y r , i •, C ''°, '•y 'd ''f ? !•'?,.`?.F :.i'N 'ire aS el i??f ..aS.i 7`? p• :{' .S?r `r' 'f. .! f' Ss •t?.r. ;.?iY.; .,z- n :rte •r" °'i: .''. d; ` '.t,. ..1 t' f f'• 1 0 da/P gen, ensio n . ! l 5 15?9'5 5 i I .. " ' .'t•' ?{r.'r7•i:,;. .'?Ej;:: r,r?•?11•i i,'tl'R'j': •• ` ,". .};` t. i '+ ° E ? t .5, :.-s x•;.r:1.? t,.ip•. .1???;,.,,•.!t: ?s1,. ;x¢'•31' :'! t" ?!N I t 1 t ' ` ' } .fi'..;E•t. .t .,s , t , ' ??' `I .11' 1 ?i ..t C . . ta•.i, "', : 1 .. , :l - ??(> i o , ?? .!. t .T .511. • . e .• .. ACTION' AGENDA ' Board of Trustees of the Employees' Pension Fund May 15, 1995 1. Call to order' 1. 10:58 a.m. SE' . 2.' Approval of Minutes 2. Approved as submitted.' of 51'1195 ` 3. Request for,acceptance ; 3. . 'Approved.' Into'' 'embership: ' a) Lyle Adams b) Carolyn'Sanders C) Daniel Carpenter. d) Peter. D. Bach e) Louis Farquhar f).Jeffrey Daines 9) John Tierney 4. .,Regular Pension to be granted: 4. Granted. Forrest Saylor, Jr. 5. Other Business: 5. a) Authorized a budget,not to exceed $40,000 to provide a) Establish Budget for writing funding for rewriting the Plan, ..Pension Plan changes as bargained having it reviewed by labor & tax with unions attorneys, and conducting an actuarial review of the Plan to bring a proposed plan to the point of administering a referendum on the changes. b) Request funds to pay for prior b) Continued to 5130/95, services of Union Pension Attorney Lee Dehner 6. Adjournment: 6. 11:09 a.m. \ri ?:' 1 ,. tl ''I? ? ?' 4•,k ?.fr.'?1 !g. '.t? ,.i I. `' r - ?( a I„y ?:,(?F.?'ti!`3'I?:Iy,F"',s''sll'•.r{',?''F' -';4;3 :a°?,t: ,.. `'(::•.:iwi?` ;?.,,.' J ,j , , Y+'F'=i? s.ylq?,J?f!'I ? I?.??Itr!' .1 f. ?:?k4 r.r:...iFES" +? j" tt? FIB `i'a: ?')'""?. '?! li`. ?'f+' ?n14. is 5(:??1' .F•, As: 's ;r ?$.={i'?1 5. :.5 •°' .e. I'+?':'t:...?C. •?!''?1 •t'',:?•1r?. .$'S?• .I. 9. i?. ?? '._ '?,r'''X``' i. f. ".C',': is?^?:r Yi •,,i ??:3t ? .r?. •T'F.« . °f .,? e; '.: ,; .r• .,I'Pi• :v' f.. .?: ?'" ?{ .=S`r, r,• . f !A(;?: ?': , s 3., 'r '- . z.' ?'^i': 'P•:'' , t . -,e°:.. ?. ....1;, - . ?t> F ',f ems'. i1?F. ... ... ..f s-.?. :i:?r .?4''?.1., :- .)' .F? •`IIS f ., ?. s.. .? .: I' ,.i. i .. •'_'' •V1? s .?f ?.:: i.f . I :3? AGENDA .. Board of Trustees of the, Employees' Pension Fund . . May 15, 1995. 1. all to order ; 2.. Approval of Minutes of 511195 3. Request for..acceptance' into membership; a1 Lyle Adams' b) Carolyn.Sanders , . c) Daniel Carpenter ' d) Peter D. Bach e) Louis Farquhar f) Jeffrey Daines 9) John Tierney , 4. Regular Pension to be granted; " Forrest Saylor, Jr. 5.. Other Business: ' a) Establish Budget for writing Pension Plan changes as bargained with unions b) Request funds, to pay for prior es-,,Or e services of Union Pension Attorney ?p s ? 3nrq? Lee Dahner '6. Adjournment: pia ? a . •k, . ?- 3 TRUSTEES OF THE EMPLOYEES' PENSION FUND Item # Meeting Date: 5 / 1 5. / 8 5 Agenda Cover Memorandum Subject: Membership in Employees' Pension Plan . Recommendation/Motion: Employee(s) listed below be accepted into the Employees' Pension Plan as recommended by the Pension Advisory Committee. ? and that the appropriate officials be authorized to execute same. BACKGROUND: Name-and-Jo Class pent./Div. Lyle . Adams, , Senior Electrician Parks & Rec. Carolyn Sanders, TV Prod. Spec. Info. Mgmt. Daniel Carpenter, Accountant Finance Peter D. Bach, Senior Electrician Public Works Louis Farquhar, Gas Marketing Eng. Gas Jeffrey Daines, Hsg. Rehab.' Con. Spec. Econ. Dev. John Tierney, Mechanic II Gen. Services Seniority pate 413195 4124195 4/241955 5/l/95 4/ 17195 5/1195 5115/95 Pension fective D 413195 4124/95 4/24/95, 5/1195 4/17/95 5/1/95 5115195 Reviewed by: Originating Dept: Costs: Commission Action: Human Resources Total NA Legal ? Approved ? di d l i ? Budget NA ons w con t Approve Purchasing NA User Dept.: Current FY ? Denied Risk Mgmt. NA , ? Continued to: CIS _ NA Funding Source ACM Advertised: ? Capt. Imp. Other NA Date: ? Operating It ?N Paper: ? Other Attachments: ? Not required Submitted by: Affected parties Appropriation Code: Letter(s) ? Notified ? Not required ? None City Mananer EMPLOYEES' PENSION PLAN PENSION ADVISORY. COMMITTEE TO: Pension Trustees . FROM, Pension Advisory Committee SUBJECT: Recommendation for Acceptan into Pension Plan DATE: April 25, 1995 As Trustees' of the City of Clearwater Employees' Pension Fund, you are hereby notified that the employee(s) listed below have been duly examined by. a local physician and each has been designated as a , "first class risk". These employees are eligible for pension membership as noted in the Pension Eligibility. Date column below," and it is the recommendation of the Pension Advisory Committee that they be accepted into membership. Pension Elig. 'v. BirtlL Rate Hi(C DatC D:ztc Lyle Adams, SS#263-69-4655 Sr. Electrician,' Parks & Recreation 10/21161 413195 413195 Carolyn Sanders, SS#590-07-5430 12/20/65 4124195 4124195 TV Production Specialist, Info. Mngmt. Daniel Carpenter, SS#295-52-2825 519168 4124195 4124195 Accountant, Finance Dept. Peter D. Bach, SS#328-50-2761 Sr. Electrician, Public Works Dept. 9129156 511195 511195 Louis . Farquhar,. SS#264.08-9596 Gas Marketing Engineer, Gas System 1218155 4117195 4117195 Jeffrey Daines, SS#395-62-2364 Housing Rehab. Const. Sp., Economic Dev, 611 515 4 51 119 5 511 / 9 5 John Tierney, SS#154-40-7284 Mechanic II, General Services Dept. 6112149 5115195 5115195 $ TRUSTEES OF THE EMPLOYEES' PENSION FUND Agenda Cover Memorandum Item # Meeting Dale: Subject: Pension to be Granted. Recommendation/Motion: Forrest Saylor, Jr., Solid Waste Department, be granted a regular pension under Section(s) 2.396 of the Employees' Pension Plan as-recommended by the Pension Advisory Committee. ? and that the appropriate officials be authorized to execute same. BACKGROUND: Forrest Saylor, Jr., Solid Waste Equipment Operator, Solid Waste Department, was employed by the City on November 22, 1963, and began participating in the Pension Plan on that date. His retirement will be effective on May 13, 1995, at the beginning of the day. Mr. Saylor's pension was approved by the Pension Advisory Committee at its meeting of April 25, 1995. . Based on an average salary of approximately $27,546 over the past five years and t h e formula for computing regular pensions, this pension will approximate $21,486 annually. Charts from Finance which take into consideration mortality rates and age reflect the "present value cost of financing" this pension will be approximately $266,438. The estimated pension cost (cash payout over the life of the pensioner and his/her spouse) is $580,110. Reviewod by: Originating Dept: Costs: $2,Q6.428 Commission Action: Human Resources Total Legal NA _ ? Approved ? Budget NA---- Approved w/conditions Purchasing NA User Dept.: Current FY ? Denied Risk Mgmt. NA___ ? Continued to: .Cis NA Funding Source: ACM Advertised: ? Capt. Imp. ___NA_ Other Date: ? Operating _ Paper: ? Other Pension_ Attachments: ? Not required Submitted by: Affected parties Appropriation Code: Letter(s) ? Notified ? Not required 546-07410-514100-5$? ? None City Manager i ' Illl???f.ilrkr? ,A'', «l l3: C I T Y +D F C L E A R WA T E R Q? POST OFFICE SOX 4748 CLEARWATER, FLORIDA 34819.4748 All. Human Resources Departmdol 0131462-W70 TQ Honorable 'Mayor and Members of the City Commission 'as Trustees of the Employees'' Pension Plan FROM: Pension Advisory Committee COPIES: Debbie Bailey, . Payroll Services Manager Employee's File SUBJECT: Regular Pension---Forrest Saylor, Jr. DATE: April 25, 1995 The Pension Advisory Committee received an application for regular pension from Forrest Saylor, Jr., on April 20, 1995. Mr. Saylor was employed by the City on November 22, 1963, and has been a participant in the Pension Plan since that date. The amount of Mr. Saylor's pension will be computed by the Finance Department at such time as his last five years of service and salary can be calculated. By motion made and duly carried at its meeting of April 25, 1995, the Pension Advisory Committee approved/recommended a regular pension based on years of service for Forrest Saylor, Jr., in accordance with Section 2.396 of the City Code. This pension will be effective on May 13, 1995, at the beginning of the day. I hereby certify that the Pension. Advisory Committee has approved the granting of a regular retirement pension for Forrest Saylor, Jr., and the above dates are correct. Chai an, Pension "Advisory Committee "Equal Employment and Affirmative Action Employer" ' PENSkON REQUEST FORNI I, Forrest Saylor, Jr. do hereby apply for retirement from the City of. Clearwater General Employees' Pension Plan. My benefits date is November 22' 1963 (Entry date into pension- plan) My date of hire i5 November 22, 1963 My birthday is June 11, 1936 My job classification is Solid Waste Equipment operator and I, work in the Solid Waste Department,r_ Division. My resignation date is May 12, 1995 The type of pension for which I am applying is (check only one): x Regular Pension based on years of service Job-connected Disability Pension Non-job-connected Disability Pension My spouse's name is: Ellen Mae Saylor 2/15/34 Dependent children under the age of 13 and -residing in my-household are: (Print Child's Full Name) W-' (Child's Date or Birth) I hereby certify all of "the above to be true and correc April 20, 1995 (Si re) (Date) STATE OF FLORIDA T?i are ing tru en w ac nowledged before me this COUNTY OF PINELLAS by wha is personail kno n to me or who has produce Z as, id ntif ati n and hh. Public (Signature) Commission No. (Name of nted) jZMAR SEAL • _ CYN? tLA M ANDEAN NOTARY PUBUC STATE OF Ft.OR1DA COMMISSION NO. CC397649 ' - l?tl' CDMM1551aU FxP. SFI'i' 24, i?Xir. 0 ` CITY OF CLEARWATER GENERAL EMPLOYEES$ PENSION PLAN OPTIONS - GENERAL' EMPLOYEES ¦• . -OPTION #L: Employees can . receive a lump sum payment for vacation and holiday pay and 1/2 ' of accrued sick leave at the time of separation from the City, There will be no' 6% deduction for pension from this lump sum paymeni . nor will this amount c o u n t as earnings in . the calculation of the -pension. The last day of work will be the termination date and pension benefits will begin the following day. OPTION #2: Employee can extend termination date by the time due for vacation, holiday pay,, and 1l2 of accrued sick leave. Termination date will be the final day of extended time. Pension benefits will begin 'the following day, Only available to employees hired prior to 1011190.) I? Forrest Saylor, Jr. an employee of the City of Clearwater; hereby apply for pension benefits under the City's Employees' Pension Plan. I hereby certify that I fully understand the two options offered to me. I choose to retire using Option 1 and, wish my benefits to be calculated under, this option.' I understand that once this form is signed, my decision is irrevocable. • E?Q'I.4YEE'S SIGNATUM: C?'i/t vl SOCIAL SECURITY r,4r: 258-52-5398 SSES: DRESS: 1630 North Madison Avenue Clearwater, FL 34615-2639 PIP . ?\Allllm\ oA?l Z__Z?_? TE: April 20, 1995 t Item # cck a Meeting Date: Agenda'. Cover Memorandum s•isg5 Subject: Pension Plan Administrative Budget Recommendation/Motion: Authorize a budget not to exceed $40,000 to provide funding for rewriting the Employees' Pension Plan, having it reviewed by labor and tax attorneys, and conducting an actuarial review of the Plan to bring a proposed plan to the point of administering a referendum on the changes. ® and that the appropriate officials be authorized to execute same. BACKGROUND: The City and the four employee unions have been meeting over recent months to negotiate collective bargaining agreements. A major issue In the bargaining process has been proposed revisions to the Employees' Pension Plan. Tentative agreement was reached on the collective bargaining agreements with each respective union on Friday, April 28, 1995. A component of the tentative agreement in each case includes a number of proposed changes to the Employees' Pension Plan. Those changes were agreed to In concept with the actual language of the Plan to be developed, subsequently approved by the City Commission, and then to be submitted for referendum to the voters, Several specific steps will be required to bring the conceptual changes to final approved status. First, the Plan has to be revised to Incorporate the proposed conceptual changes. It is proposed that a pension attorney be engaged to develop the language for the initial revisions. The second step would involve review of the proposed revisions by the City's labor attorney which would also Include a review by a separate pension and tax expert (attorney). An additional step, as required by the State of Florida, is that an actuarial review be done to project the funding Impact and actuarial soundness. A final step will Involve the administration of a referendum so that citizens can vote whether to approve or disapprove the proposed Plan. Revisions in the Employees' Pension Plan are based on City/Union consensual agreement for changes to the Plan and to take the revised Plan to referendum. These revisions have been agreed to in concept and specific language will be written. The revisions include: Reviewed by: Legal _ NA Budget Purchasing -!A"6 Risk Mgmt. _ 6 CIS NA ACM Other NA , Submitted by: r Originating Dept: City/ Man ger , / lam' ' , user Dept.: Advertised: Date: Paper: ? Not required Affected parties ? Notified ? Not required Costs: $40.000.00 Commission Action: Total ? Approved ? Approved w/conditions Current FY ? Denied ? Continued to: Funding Source: ? Capt. Imp, ? Operating ? Other Pension Appropriation Code: Attachments: ? None -s 1 i. Agenda Item-Pension Plan Administrative Budget Page 2 May 18, 1995 a. Reduction of the minimum disability benefit from 75% to 66 213%. b. Elimination of the 15% dependent benefit for disability pensioners. c. No disability entitlement for. an employee if a reassignment can be made to a job for which the employee is qualified; reassignment is to be with no loss of base pay. Specific restrictions. to be used far police and fire bargaining unit employee reassignment; first reassignment option to own bargaining unit; next within Police or Fire Department; lastly, within City. , d. Annual recall 'and reexamination provisions for disability pensioners (i.e. a pensioner shall be subject to recall and return to active employee status if a job for which the individual Is qualified becomes available). e. Pensioner returning to work upon recall to receive no credited service for the period he/she received disability payments. f. Fraud provisions to provide that a pension shall be denied or withdrawn If an employee has been .determined to have misrepresented eligibility or continuing eligibility for pension. g. Pre-existing condition waiver for disability eligibility (i.e. If at the time of hire an individual has a pre-existing condition, such as aback Injury, that Individual shall be precluded from subsequently obtaining ' a disability pension for reasons associated with that pre-existing situation, Le. the bad back). h. Increasing the Pension Advisory Committee (PAC) to seven members: three (3) to be elected by members (employees) of the Pension Plan, three (3) to be appointed by the City Commissioners (could be Commissioners), and one (1) to be appointed by the other six (6) (must be 'a City resident). 1. Payment of 5% simple interest on all contributions by an employee who terminates and withdraws his/her money when leaving City employment. j . Investment authority to be the responsibility of the City Commission acting as the Pension Trustees. k. Duties and responsibilities of the Pension Advisory Committee are to be specifically related In the pension ordinance. 1. Plan is to be established so that it will be IRS qualified to allow pre-tax contribution by employees. 1 I ,t !: Agenda Item-Pension Plan Administrative Budget Page 3 May 18, 1995 Certain conditions are required for IRS qualification, Including that there must. be' a provision that a pensioner cannot receive more. than 100% ' of hislher salary. Thus, with a 2.75%. rate for each year. of service as proposed in the pension formula, slightly over 36 years of service Is the maximum number of years to be used In the formula. m. Plan to. Include clear language as to what the Plan pays for, such as for a third-party administration and payment of certain claims against the Plan (i.e. , such as discrimination claims because of the Plan provisions), n. "Buy-back" provisions to be clearly stated (i.e. employees who leave City employment and subsequently return can buy back their' previously earned pension service credit based on an actuarially determined funding.) o. No referendum Is to be required for changes that are required by law (i.e. It laws that relate to, the pension, such as in the workers compensation field, are changed, necessary changes to the Pension Plan to have the Plan remain consistent with the state of the law can be made without a voter referendum). p. Language,in the Plan is to provide that at age 65 employees become vested for the number of years of service. In Plan, but with actuarially reduced benefits. This provision is consistent with an agreement that was a part of the settlement of the AARP lawsuit against the Pension Plan. q. Clearly define what makes up "salary" (i.e. what is subject to pension deduction and is included in fIva-year. average salary). r . Increase the benefit formula from 2.5% for each year of pension service credit to 2.75% to be funded by an employee contribution of 8%, with a City contribution of 7% or whatever is actuarially required; however, the City retains the right to adjust Its contribution payment f o r the first year (to accommodate the manner and timing of payment). The benefit formula of the current Plan is 2.5% times years of service times average salary for the last five years. The formula is proposed to become 2.75% times years of service times average salary for last five years. The Employees' Pension Plan does allow for the Plan to fund certain costs associated with the administration of the Plan. A budget is required for the, services outlined above, and the projected budget request for this purpose Is $40,000 ($20,000 for pension the attorney to write the plan consistent with agreed upon changes; $10,000 for review and analysis by labor and tax attorneys; and 610,000 for actuarial studies). t E 13 : 4A >ao.011 !a . 1~:OOPERS & LYBRAND ID :813-228-'0639 MAY 12' 95 1 © Coop+rs L LybrRnd L.1-P. 101 Eall KCrvwdy OWevard Iawphoe" (013) 220-022i4 t Coo ?r r JC a prate %S* ul *Orv+ws firm Sulk 7500 randw Tampa, FJO00a 33602-6184 Ifcwvrrll. (t113) 2284tg Human Fkavowba Adrlsory z 441 May 12, 1995 ? J ?fJ Ms. Margaret L. Simmons, CPA Finance Dlrcctor City of Clearwater 112 S. Osceola Avenue Clearwater, FL 34618-4748 Dear Margie: As you requested, this letter wi1L review our recent discussions regardi)lg the results elfthe 1995 actuarial valuation of the City's pension plan. You indicated that them. is significant concern at the City over the incre=c in the contribution requirements, especially in light of the proposed increases in benefits. The City's contribution requirements increased in 1995 compared to I994 Primarily because the plan's expwitnee for the year was less favorable than expracd. We are still revicwuig the valuation results and will provide additional detail us soon as ponsiblc, but the main causes of the adverse expcrieucc are the investment results, increased rates of disability and decreased rates of employee tumovcr. The City's required contribution under Florida Statutes (exc)uding the credit .balance) increased from 6.6%.of payroll to 9.0%. This results in a 51,000,000 increase in tilt contribution amount for 1995. The approximate rate of return on assets for the 1994 plan year was 0.9% on n market value basis and 6,6% tin an actumrial basis, This shortfall in the investment return on an actuarial basis is responsible for approximately 5200,000 of the increased cost, llor the 1994 plan year actual disabilities wcrc more than double the expected rate, wluch increased the costs and actual employee turnover or withdrawal was about one-third the expected rate. We will continue to review the valuation results mid will providC' additional information rcgarding the factors that affected the cost and their financial impact as soon a% possible. Thcre are a number of comments that we feel should be c:onsidercd in evaluating this situation: The 1995 results would "m much worse if we had not adopted the asset avcraging method in the 1994 valuation. Without this change, the 1995 contribution, would have been approximately 51,000,000 greater than tht c44 Tent amount, Cooporl: b Lybrsond L,L.P.. o mLi;orrrd 1Eerlled 116t>1111y Danriership, S a uEkniber luny at Cm"tr 4 1 ynrancs tniumblionul. ?PERS & LYBRRND. IDtS13-228-0639 MAY '120.95 . 13 1144 No.011 P.0,3 Ms. Marge ret L. Siminons, CPA May 12, 1995 Page Two ' The contribution atnourits discussed in this letlcr do not take into account the City's credit balance of $5,304,094. Including the. credit balance, the City's required contribution for 1995 under Florida Statutes is $0. The oldest amortization bass of the Unfunded Actuarial Ac er ed. Liability will be completely paid ofrin 2003. At that time, the City's contribution requirement will decrease by over $800,000 per year. The negative impact of 1994 investnncnt returns niny be largely nxitiguto'd by 1995. returns. Based on our experience with other clients, year=to-date 1995 investment returns are excellent. -In short, the City may have Oready muck up much of the loss from 2994. While it is too early to count on 1995 returns, our point is that 1994's experience was unusual and future years are expected to be signifiewnly better. While the 1995 valuation results are disturbing, the City has several factors in its favor that need to be rci nembered: First, we advised the City not to plea on using the entire credit balance: to fund benefit improvements. As a result, the City still has the credit balance available ' to otrset the cost increases resulting From the 1995 valuation. Second, we advised the City not to fund the benefit improvetncrnts by changing the actuarial assumptions. We agreed with the unions' contention. that the assumptions being used are at least %wnewhat. conservative. It Was ou.r recommendation that the City strongly consider leaving the assumptions ill n edriservative position. We understand the concern o>>cr the increase in costs in the 1995 valuation in light of the benefit improvements being considered. However, we feel it is important to note that between the credit balance, the amortization base that will be paid ofd'; the cwly 1995 investment returns and the conservativeness of the assumptions, the City has several very strong factors in its favor. ?i'• .t ?'.I' ' 1. .F t't , ::'Mr$•?,rN''4f{4Sk'R;ya,VCJs; i'itt'::rJri,.41 .A_.,.,, it .,,'<,•... :. r.. .,; t .:? F CboPtkS t~YBRRND, I D : 813-228-0639 ' MAY 12 "95 13:,4 5 No *'011 P.04 Ms. Wrgaret L. Simmons, CPA May i?, 1995 t ". Page Thrcc You,indicutcd that-there is some question as to why the negotiations with employecs were no('. delayed until the 1995 valuation report was completed. It is our understanding ilittt :legotiatioiis ' on pension benefits began on an informal h3sis around 2 years dgo, the forinal'negollations began in April 1994, and that in February of 1995 impssa was being discus .i:cl. Given the ea(endcd period of these negotiations neither the City nor the unions was coizlfortaable dclayint; Lmy longer than absolutely necessary. The 1995 valuation results were first nvailub)e on May 8, after the negotiations were completed, once you have had ?a chance to review this information, please let us know if you 6vc Any+. questions of comments. Vary truly yours, Steplie M. Mete . , ; Principal SMMllmb - , ' ' . .