Loading...
02/03/1992 TRUSTEES OF THE EMPLOYEES' PENSION FUND MEETING February 3, 1992 The City Commission, meeting as the Board of Trustees of the Employees Pension Fund, met in regular session at City Hall, Monday, February 3, 1992 at 11:00 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 H. M. Laursen Human Resources Director ITEM #2 - Minutes: Trustee Berfield moved to approve the minutes of the December 30, 1991, meeting. The motion was duly seconded and carried unanimously. ITEM #3 - Request for Acceptance into Membership: The City Manager presented the recommendation of the Pension Advisory Committee to approve membership for the employee(s) listed below: a) Juan Torres b) William Connell, Jr. c) James Kleinsorge d) George Koder e) George Belsky f) Richard Crean g) Chrisann Gerakios h) Richard Sanchez i) Richard Clendenin j) Richard Garbe k) Gerald Klinske Trustee Fitzgerald moved to accept the recommendation of the Pension Advisory Committee. The motion was duly seconded and carried unanimously. ITEM #4a - Request for Pension: The City Manager presented the recommendation of the Pension Advisory Committee that John W. Jacobs, Jr. be granted a job-connected disability pension under Section 26.35 and/or 26.27 of the Employees' Pension Plan. Mr. Jacobs suffers from a back injury which was incurred while pulling a hose at a brush fire. This request was presented to the Trustees at their meeting of December 16, 1991. At that time, the Trustees remanded this to the Pension Advisory Committee (PAC) for further evaluation due to the lack of documentation to substantiate the claim that Mr. Jacobs' condition is job-connected. On January 8, 1992, the PAC was presented with new letters from Doctors Sweeney and Loax. On that date, the PAC again approved a job-connected disability pension for Mr. Jacobs based on previous medical documentation and letters dated December 19, 1991, September 23, 1991 and May 15, 1991 from Doctors Sweeney, Lox and Sena respectively. H. M. Laursen, Human Resources Director, stated Dr. Lox has indicated the injury is permanent. Trustee Regulski moved to approve a job-connected disability pension for John W. Jacobs, Jr. The motion was duly seconded and carried unanimously. ITEM #4b - Request for Pension: The City Manager presented the recommendation of the Pension Advisory Committee that Verling Gentile be granted a job-connected disability pension under Section 26.35 and/or 26.27 of the Employees' Pension Plan. Mr. Gentile, Police Sergeant, suffers from a back injury which was incurred in the line of duty. H. M. Laursen, Human Resources Director, stated Mr. Gentile has been with the City approximately 22 years. He has had a number of accidents during that time. Doctors now say he is 7% to 20% disabled and no longer able to perform the duties of Police Officer. Trustee Berfield moved to approve a job-connected disability pension for Verling Gentile. The motion was duly seconded and carried unanimously. ITEM #5 - Request for Pension: The City Manager presented the recommendation of the Pension Advisory Committee that Dries H. Vandenberg be granted a regular pension under Section 26.34 and/or 26.37 of the Employees' Pension Plan. Trustee Regulski moved to grant a regular pension to Dries H. Vandenberg. The motion was duly seconded and carried unanimously. ITEM #6 - Waiver of Vested Pension Benefits & Adding Previous and Current Pension Service Periods for Larry Dean: The City Manager presented the recommendation of the Pension Advisory Committee to approve the waiver of vested pension rights for Larry Dean and to add his past pension credit to his current employment period so there is one continuous accumulation of pension service credit. Mr. Dean was employed as a Police Officer on April 8, 1974. He requested and was granted a voluntary demotion to Firefighter on January 11, 1982, and subsequently resigned from city employment on July 13, 1984. Mr. Dean, having more than ten years of pension service credit, vested his pension at that time. On May 11, 1987, Mr. Dean again was hired as a Firefighter by the City and continues to serve in this capacity. Mr. Dean again was placed under pension as a new employee. The Pension Plan contains language that prohibits an employee from receiving two pensions under the plan. The recently adopted PAC Policies and Procedures Manual provides for "Reinstated Pension Service Credit" under certain conditions, one of which is when a vested employee returns to work. The Manual provides that an employee who has separated employment with the City and vested his/her pension and then again is employed by the City shall have either of two options; 1) Voiding the vested right and being credited with the years of service pension credit based on the previous period of employment which may be augmented with current pension service credit toward pension eligibility; or 2) Not being in the Pension Plan upon new hire but retaining the right to the vested pension benefit. Mr. Dean desires to waive his vested rights and have his previous pension service credit added to his current employment for the purpose of having one continuous period of pension service credit. The PAC has approved this request and the Legal Department has prepared a "Waiver of Vested Pension Rights" which Mr. Dean has signed. Approval of this request will allow Mr. Dean to retire when he has a combined total of 20 years or more of service as a Police Officer and Firefighter during which time he has contributed to the Pension Plan. Discussion ensued regarding Mr. Dean having an advantage as his pension will be based on the last five years of his second term of employment with the City. Trustee Berfield moved to approve the Waiver of Vested Pension Rights for Larry Dean and to add his past pension credit to his current employment period so there is one continuous accumulation of pension service credit. The motion was duly seconded and carried unanimously. ITEM #7 - Continuation of policy of including Workers' Compensation payments with an employee's prorated sick leave up to the employee's regular base pay during use of sick leave time for the purpose of computing an employee's 5-year average salary for pension benefits. For many years, the City has had a policy allowing employees injured on the job and receiving Workers'Compensation benefits because of such injury to coordinate their Workers' Compensation benefit payments with their sick leave benefit payments to enable them to receive their full regular base pay. This has been accomplished by having the employees endorse their Workers' Compensation check to the City, with the City in turn then issuing a full regular paycheck to the employee. The employee would then have a prorated charge made to their sick leave balance. This method resulted in the Workers' Compensation dollars being processed through the payroll system as salary from which all regular deductions, including pension, were made. With this method, when an employee's five-year average salary was to be computed for purposes of pension, full regular pay was reflected. Effective January 1, 1992, the City changed the process by which Workers' Compensation (WC) is handled. Now the City's servicing agent for WC directs the WC check directly to the employee, and the City prepares a regular payroll check for a prorated sick leave benefit amount which is charged against the employee's sick leave balance. The two checks together equal the employee's regular pay, but the WC payment does not go through the payroll system and, therefore, is not reflected as salary nor is a pension deduction made from that amount. Staff has reviewed the impact of this change on those persons who are paid WC and prorated sick leave benefit payments who then go on disability retirement. Staff has determined the most appropriate manner to compute pension in future instances (after 1/1/92) where an employees' last five years of service includes WC payments which are not routed through the payroll system is, for the purposes of pension computation only, to count the WC payments as "salary" provided the employee authorizes an equivalent pension deduction from their regular payroll check. The pension ordinance does not define "salary". It relates that the pension fund shall consist of 8% of all salaries and wages of all employees participating in the Plan and it provides for the computation of pension benefits based on a percentage of the "average salary" received by the employee for the last five years of service. Included over the years as part of salary for purposes of pension computation has been WC payments, incentive pays, overtime, etc. Several years ago the "Pension Rewrite Committee" proposed defining salary as regular pay, bonuses, overtime pay, sick leave (except when paid as a lump sum as a retirement benefit), vacation pay, special acting pay, FLSA overtime pay, incentive pay (basic, career and education), and leave pay (funeral, military, union and jury) but excluding clothing, car or meal allowances, tuition refunds, gas sales commissions, or fringe benefits provided by the City. At their meeting of January 8, 1991, the PAC passed a motion "that in computing pension benefits Workers' Compensation be used to determine the average salary for the last five years of service". Trustee Regulski moved to approve a continuation of the policy of including Workers' Compensation payments with an employee's prorated sick leave up to the employee's five-year average salary for pension benefits. The motion was duly seconded and carried unanimously. ITEM #8 - Acknowledge receipt of notification from the PAC regarding pending request to change regular pension to job- connected disability pension regarding Arthur Carpentieri On January 8, 1992, Ed Hooper, President of the IAFF, appeared before the PAC as a representative for Arthur Carpentieri, Firefighter (retired), who recently was granted a regular pension based on years of service. Mr. Hooper informed the PAC that the day before Mr. Carpentieri's pension was approved by the Trustees, he suffered a heart attack. At the time of his heart attack, Mr. Carpentieri was using his vacation time to extend his retirement date; he had not yet begun to use his sick leave. He further related that there is a presumption law which applies to Firefighters which states that any heart disease suffered by a Firefighter is presumed to be job-related. Mr. Hooper expressed his view that since Mr. Carpentieri was using vacation and not sick leave, the effect should be the same as it would be for any active Firefighter who has a heart attack while on vacation leave. Mr. Hooper asked that Mr. Carpentieri be allowed to change his pension request from a regular pension to job-connected disability pension. The effect on the amount of pension would be minimal since Mr. Carpentieri had 28 years of service. However, there would be a tax advantage with the job-related pension. PAC Chairman, John Nicholson moved that Mr. Carpentieri's request be sent to the Trustees with the recommendation they change his pension to job-connected disability pension based on Chapter 112, Florida Statutes, which provides a "presumption" of job-relatedness for any Firefighter disabled due to a heart condition. Upon being reminded that PAC procedures require the employee provide letters from two cardiac specialists substantiating the request, he withdrew his motion. Mr. Hooper was advised the employee would need to first submit the required letters. Mr. Nicholson requested the Human Resources Director advise the Trustees that this item (to change a regular pension to a job-connected disability pension) will be coming before them in the near future. It was requested the attorney be prepared to address this issue when it comes before the Trustees. ITEM #9 - Direct City Attorney to request Attorney General's opinion as to the applicability of the "presumption of job-related disability" in Chapter 185 to Clearwater employees At its December 4, 1991, meeting, the PAC passed a motion ".... that the Trustees ask the Attorney General for an opinion as to whether or not Chapter 185 applies to the City of Clearwater's Pension Plan". This issue periodically has been raised by the PAC and, in this instance, was discussed by the Committee as they considered Police Officer Daniel O'Connell's request for a job-connected disability pension based on hypertensive cardiovascular disease. Subsequent to the PAC's request that the Trustees ask for an Attorney General's Opinion, attorney Robert Walker, representing the Fraternal Order of Police, appeared before the PAC and expressed his concurrence with views already expressed by the City's attorneys that the Chapter 185 presumption does not apply to Police Officers under the CIty of Clearwater's Pension Plan. The PAC, nevertheless, has requested the Trustees seek an Attorney General's opinion on the applicability of Chapter 185 to the City's Pension Plan. Consensus of the Trustees was that previous legal opinions have indicated the presumption does not apply and an Attorney General opinion is not needed. No action taken. ITEM #10 - Appointment of Coopers & Lybrand to prepare a special study assessing the impact of disabilities on the financial soundness of the City pension plan for a fee not to exceed $2,500 Staff continues to be concerned about the apparent large number of disability pensions being granted, and the potential impact these pensions may have on the financial soundness of the plan and on future funding requirements. A special study was performed by the City's previous actuary, Ogle & Waters, in 1987. At that time, they estimated that changing actuarial assumptions to reflect the actual trend in disability pensions would have increased the annual required contribution by about $300,000. Since 1987, disability pensions have continued to be processed with apparent increasing frequency. Frequently the impact this may have is discussed and the advisability of modifying the City's disability provisions, but without any clear indication of the actual dollar impact of the problem. The City's current actuary, Coopers & Lybrand, has proposed to update the 1987 study using actual disability incidence data accumulated in the last five years, for a fee not to exceed $2,500. Their study will indicate the true costs of disability pensions based on current trends. This information could be significant as the City continues to negotiate pension benefits with the three bargaining units, and could also be used as a basis for revising the existing disability provisions. Staff recommends approval of this special study which will be completed within 45 days. Trustee Nunamaker moved to accept the recommendation of the Pension Advisory Committee. The motion was duly seconded and carried unanimously. ITEM #11 - Other Business: None. ITEM #12 - Adjournment: The meeting adjourned at 11:25 a.m.