08/28/1975
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Proceedings of Pension Advisory Committee meeting with Tom Bustin, City Attorney
at City Hall on August 28, 1975 at 9:30 A.M.
Present: Detty Ward
Ray Kaminokas
Wesley Brettel
Mike Laursen, Personnel Director
The purpose of this meeting was to discuss, in general terms, the Pension Law and
to submit some specific questions about various sections of the law to the
Attorney.
The Co~ttee advised Mr. Bustin of the problem which exists with respect to the
initial six months employment of employees who ultimately come under the Plan. As
a result of a court involvement and stipulation, employees hired by the City prior
to the court action have been given the option of making the equivalent contribution
to the Pension Plan that they would have paid in (plus interest) during their first
six months. However, employees hired after the date of the stipulation are not
contributing to the Pension Plan during their initial six months service. Thus the
City Pension Plan has two different approaches - some employees are contributing
for their first six months employment and receiving credit for same toward retirement
and other employees cannot contribute their first six months. Either legislative
action or referendum appear necessary to correct this problem.
Another general topic of discussion concerned investment counseling. Ray Kaminskas
noted that Section 4 (Administration) of the Pension Law provides that the Trustees
are authorized to seek and engage independent, professional investment counsel.
He asked whether the Trustees have considered this option. It was also noted that
the Pension Law requires an Annual Report by the Treasurer to the Trustees.
Mr. Bustin suggested that the City Commission (the Trustees) be advised of its
options regarding investment counseling for the Pension Fund and of other responsibili-
ties specified by the Law.
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The Committee suggested that the terms of Advisory Members be staggered to lessen
the possibility of a completely new Advisory Committee being elected at any point,
resulting in the members having a limited knowledge of its 'responsibility.
, The Attorney suggested that it might be advisable for the Commission to discuss the
Pension Law and responsibilities of the Trustees and Advisory Committee ~t a
forthcoming work session.
A number of specific questions were then directed to the Attorney.
1. Re: the provision that "no oension or relief shall be given to any person
,out of the pension fund unless.....first reconmended by said Advisory
Committeell - the Attorney stated that he felt this was clear - the Trustees
can't act to approve pension disbursement without a recommendation from the
Advisory Commitee.
2. Re: Disabilitv pensions under Section 5 and 6 of the Law, the Attorney
indicated there are two different types of employees) i.e. those injured off
the job (coverage after 10 years service) and those injured on-the-job
(immediate coverage once an employee is accepted into the Plan). Section 6
guarantees 50% of the employees average salary as his pension.
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Special Pension Advisory Committee Meeting
August 28, 1975
With respect to the provision that states the disability pension benefit is
1150% of the employee's average salary for the last five years" and where an
employee is injured after one year with $10,000 earnings, Mr. Bustin indicated
that the benefit would be 50% of his salary i.e. earning would B2! be computed
as 1st year 0, 2nd year 0, 3rd year 0, 4th year 0 and 5th year $10,000 --
average of $2,000 for 5 years, but would be 50% of $10,000 or $5,000 pension.
The five year average means the average of any time within that framework.
3. .Re: Section 7, if a widow remarries, she loses her pension -- do the children
also lose their pension (15%)1 Mr. Bustin indicated that only the portion
established for the Widow/widower would cease, pension to children would
continue.
4. Re: Legalitv of City's retention of 20% of employee contribution when the employee
leaves employment with the City. Mr. Bustin noted this was a difficult question
and it might be necessary to have to go to the legislative intent. He indicated
that the retention of employee contributions, if for a rational purpose, was~
not improper. Suggestion was made that this issue should be discussed with the
City Manager and that perhaps some equitable proposal should be offered by the
Committee to the Manager and/or Trustees.
5. Re: Hazardous desi~nation of iobs, the Attorney stated that was the authority
of the Trustees under Section 5.
6. Re: Section 9 (Non-assignable. exempt from legal process) Mr. Bustin felt that
this does not mean an employee cannot sue the City if it withholds pension; it
is instead a protection to the employee (the employee cannot assign it to a
creditor and creditor cannot garnish it).
7. Re: Section 10 The Committee asked about the legality of Pension, ceasing
because of a felony conviction. The Attorney noted that the Pension Plan is a
contract with each section a provision of the contract. If a provision is bad,
, it does imply a question of illegality and an attempt should be made to change
the contract.
Meeting ended with general agreement that communications should be improved between
the Trustees and the Committee and between the Committee and the employees. A logical
first step would be for the Committee to discuss the Pension with the Trustees at
a Work Session.
Meeting Adjourned.
Re;;::lY submitt!ed, j-
H. M. Lau
Personnel
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