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03/02/1992 TRUSTEES OF THE EMPLOYEES' PENSION FUND MEETING March 2, 1992 The City Commission, meeting as the Board of Trustees of the Employees Pension Fund, met in regular session at City Hall, Monday, March 2, 1992 at 9:10 A.M., with the following members present: Rita Garvey Chairperson Lee Regulski Trustee William Nunamaker Trustee Richard Fitzgerald Trustee Sue Berfield Trustee Also Present were: Michael J. Wright City Manager Milton A. Galbraith, Jr. City Attorney Cynthia E. Goudeau City Clerk ITEM #2 - Minutes: Trustee Fitzgerald moved to approve the minutes of the February 3, 1992, meeting. The motion was duly seconded and carried unanimously. ITEM #3 - Reinstatement of Pension Credit: Lois Maroon was employed by the City on September 27, 1978 and resigned on January 4, 1985. Upon resigning she received a return of her pension contributions. Ms. Maroon subsequently withdrew her resignation and was re-employed in her former position on July 15, 1985. During the 191 days between her resignation and re-employment, Ms. Maroon turned 45 years of age. On August 13, 1985, she appeared before the PAC to request to rejoin the Pension Plan by returning her pension contributions so she could receive pension service credit for the time of her original employment period. This request was denied due to the age provisions of the pension ordinance. Four years later when the age-45 limitation was removed from the Pension Plan and employees were given an option to join the Plan, she did so (11/89). On January 8, 1992, Ms. Maroon addressed the PAC and renewed her request to buy back her past pension service credit. Additionally, she requested the Plan grant her credit for the four years between the time of her return to work and her re-entry into the Plan. The PAC Policies and Procedures Manual provides that an employee shall be allowed to return to the Plan provided the employee immediately notifies the PAC of intent to rejoin the Plan with past pension service credit, the employee takes and passes the physical, and the employee repays the Pension Fund the monies withdrawn plus interest. Ms. Maroon passed the City's pre-employment physical exam on 7/9/85 and is prepared to repay to the Plan the monies withdrawn by her plus interest. The PAC passed a motion that Ms. Maroon be permitted to buy back her original pension service credit time by returning the pension contribution amount from her first period of employment, plus interest, and additionally, the Plan grant her (without a pension contribution) four years and four months of pension service credit for the period when she was not in the Plan. If the Trustees do not grant her the four years and four months of credit for the period July, 1985, to November, 1989, the PAC recommends she be permitted to buy back her original pension service credit by returning the pension contribution amount plus interest. The Finance Department has determined the pension monies withdrawn by Ms. Maroon at the time of her resignation in 1985 were $10,090.12 and the interest on that amount would be $2,320.04. The Finance Director advises there would be considerable difference between the cost to the Plan and the amount of pension "contributions" that would have been made to the Plan for the four years and four months Ms. Maroon served before being readmitted to the Plan. The pension "contribution" would have been roughly 20% of her salary for that period of time (an 8% contribution by the employee and approximately 12% by the City). This contribution amount approximates $27,717.48. The Finance Director has advised that the actuarial cost to the Plan for granting the four years and four months of service time would be considerable and could only be determined by an actuarial study. Two options were proposed by the PAC for the Trustees' consideration: 1) Lois Maroon be permitted to buy back her previous pension service time that was accrued between her employment on 9/27/78 and her resignation on 1/4/85 by paying back the amount of pension contributions she withdrew, plus interest as defined in the PAC Policies and Procedures Manual and, additionally, she be given pension service credit for the period from her reinstatement on 7/15/85, until she re-entered the Pension Plan in 1989; or 2) Lois Maroon be permitted to buy back her previous pension service time that was accrued between her employment on 9/27/78 and her resignation on 1/4/85 by paying back the amount of pension contributions she withdrew plus interest as defined in the PAC Policies and Procedures Manual. Mike Laursen, Human Resources Director, stated when Ms. Maroon returned to City Employment there were no provisions to buy back time. In response to a question, he indicated during the four years when Ms. Maroon was not in the Plan, both she and the City were contributing to Social Security. Discussion ensued regarding the impact of granting her the four years of service credit. It was indicated the cost would be at least $27,000 and could be much more when an actuarial study is done. Concerns were also expressed that granting this credit would set a precedent. Trustee Nunamaker moved to permit Lois Maroon to buy back her previous service time that was accrued between her employment on September 27, 1978 and her resignation on January 4, 1985 by paying back the amount of pension contributions she withdrew plus interest as defined in the PAC Policies and Procedures Manual. The motion was duly seconded and carried unanimously. Ms. Maroon stated when she was reemployed, all other senority was reinstated. She felt her case was different from others that might make this request. She indicated she can not recoup her Social Security contributions. ITEM #4 - Other Business: None. ITEM #5 - Adjournment: The meeting adjourned at 9:25 a.m.