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11/29/1993 TRUSTEES OF THE EMPLOYEES' PENSION FUND MEETING November 29, 1993 The City Commission, meeting as the Board of Trustees of the Employees Pension Fund, met in regular session at City Hall, Monday, November 29, 1993 at 9:00 A.M., with the following members present: Rita Garvey Chairperson Richard Fitzgerald Trustee Sue Berfield Trustee Arthur X. Deegan, II Trustee Absent: Fred Thomas Trustee Also Present were: Michael J. Wright City Manager Milton A. Galbraith, Jr. City Attorney Cynthia E. Goudeau City Clerk ITEM #2 - Minutes: Trustee Berfield moved to approve the minutes of the November 1, 1993, 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) Nancy Scott b) John F. Brown c) Thomas R. Tait d) Frank J. Calabrese Trustee Fitzgerald moved to accept the recommendation of the Pension Advisory Committee. The motion was duly seconded and carried unanimously. ITEM #4 - Request for Pension: The City Manager presented the recommendation of the Pension Advisory Committee that Michael McGowan be granted a job-connected disability pension under Section(s) 2.397 and/or 2.399 of the Employees' Pension Plan. Michael McGowan was employed on April 16, 1973, and began participating in the Pension Plan on that date. On March 16, 1993, he injured his right knee while at work which is the basis for his request for a job-connected disability pension. Mr. McGowan has submitted letters from Dr. Howard L. Schuele, dated September 20, 1993, and August 3, 1993, and Dr. W. Allen Hughes, dated September 10, 1993, and August 11, 1993, in support of his request. This pension will be effective on March 10, 1994, at 2.6 hours into the day. The letter from Dr. Schuele states that "the patient has sustained a permanent partial impairment ... This disability did occur on the job ... It is also my opinion that this man may have difficulties with this knee in an emergency type situation where he has to be on his extremity for long periods of time, kneeling or crawling or doing heavy lifting." The letter from Dr. Hughes states "Mr. McGowan's original knee injury was while he was working 3/16/93 and he twisted his knee ... He has ... difficulty in obtaining full function in the knee and ... is having difficulty functioning on stairs ... I think he is capable of a light work activity but I recommend no stairs and no squatting. I do not believe he will be able to perform all of his duties required of police work. I do believe he has a permanent injury ... " Based on an average salary of approximately $37,721 over the past five years and the formula for computing job-connected disability pensions, Mr. McGowan's pension will approximate $28,291 annually. Charts from Finance which take into consideration mortality rates and age reflect the "present value cost of financing" this pension will be approximately $325,659. Trustee Fitzgerald pointed out this amplifies the problem with the disability portion of the Pension Plan in that although the individual has only a 5% disability, the Pension Plan classifies its as a 100% disability. Kathy Rice, Deputy City Manager, reported discussions are continuing at a staff level. She indicated proposals could be discussed at a closed bargaining meeting. Trustee Fitzgerald moved to grant Michael McGowan a job-connected disability pension under Section(s) 2.397 and/or 2.399 of the Employees' Pension Plan. The motion was duly seconded and carried unanimously. ITEM #5 - Extension of agreement with Coopers & Lybrand to perform actuarial valuations for the General Employees Pension Plan as of 1/1/94 & 1/1/95 for a fee not to exceed $13,000 each year Coopers & Lybrand was first hired in 1988 in response to a request for proposals for actuarial services, and have successfully performed the last six actuarial studies. They have also assisted the City in several special projects, and staff has always been pleased with the quality and timeliness of their work. The $13,000 annual fee represents no increase in the current two year agreement, and staff recommends approval of the proposed extension agreement. Funding was anticipated and will be provided from the assets of the pension plan. Margie Simmons, Assistant Finance Director, reported the actuary for the Pension Plan is not required to change every five years as required by the Charter for the City. She indicated staff is proposing there be some asset "smoothing" to reduce the difference between actual returns and the assumed 7% return. The actuaries will be asked to assist in this. Trustee Deegan requested the proposal be brought to the Trustees prior to implementation. The Chairperson questioned if there should be a policy to rebid every five years. Betty Deptula, Assistant City Manager, reported she has requested a policy of rebidding every ten years. Trustee Deegan moved to approve extending an agreement with Coopers & Lybrand to perform actuarial valuations for the General Employees Pension Plan as of January 1, 1994 and January 1, 1995, for a fee not to exceed $13,000 each year. The motion was duly seconded and carried unanimously. ITEM #6 - Other Business: - None. ITEM #7 - Adjournment: The meeting adjourned at 9:06 a.m.