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03/14/1996 PENSION ADVISORY COMMITTEE CITY OF CLEARWATER March 14, 1996 Present: Rita Garvey Acting Chair/Mayor Richard Breest Committee Member J. B. Johnson Committee Member/Commissioner Robert Clark Committee Member/Commissioner Pat Greer Committee Member Pat Shepler Committee Member Empty Seat Committee Member Leslie Dougall-Sides Assistant City Attorney Michael Laursen Human Resources Director Patricia O. Sullivan Board Reporter The Acting Chair called the meeting to order at 9:00 a.m. at City Hall. To provide continuity for research, items are in agenda order although not necessarily discussed in that order. ITEM #2 - Approval of Minutes Member Johnson moved to approve the minutes of the regular meeting of February 8, 1996, as recorded and submitted in written summation to each member. The motion was duly seconded and carried unanimously. ITEM #3 - Action Items a) Review and action on Employee Requests for Years of Service Pension 1) Terrance L. Clements - Fire District Chief, Fire Department - 20 years of service designation - hazardous duty provision Member Clark moved to approve a Years of Service Pension for Terrance L. Clements. The motion was duly seconded and carried unanimously. 2) Wayne Vanden Berg - Firefighter - Fire Department - 20 years of service designation - hazardous duty provision Member Shepler moved to approve a Years of Service Pension for Wayne Vanden Berg. The motion was duly seconded and carried unanimously. 3) Albert Myrick - Equipment Operator III - Public Works Department - 30 years of service designation Member Greer moved to approve a Years of Service Pension for Albert Myrick. The motion was duly seconded and carried unanimously. 4) Ellen G. Darrington - Senior Recreation Supervisor - Parks & Recreation Department - 30 years of service designation Member Clark moved to approve a Years of Service Pension for Ellen G. Darrington. The motion was duly seconded and carried unanimously. 5) Jack D. Bryant - Police Officer - Police Department - 20 years of service designation - hazardous duty provision Member Breest moved to approve a Years of Service Pension for Jack D. Bryant. The motion was duly seconded and carried unanimously. b) Review and action on Employee Requests for Job-connected Disability Pension 1) David L. Ford - Spray Technician, Parks & Recreation Department - Additional medical documentation regarding Mr. Ford was distributed. Mr. Laursen said his January 1996, letter to Mr. Ford advised him the submitted medical documentation did not verify a connection between Mr. Ford's disability and his job. The Fords are appealing the Risk Management and State rejection of Mr. Ford's worker's compensation claim. Mr. Laursen recommended scheduling Mr. Ford for an IME (Independent Medical Examination) to provide the PAC (Pension Advisory Committee) with appropriate information and schedule a Special Meeting for the PAC to consider a non-job connected disability with a proviso to upgrade the rating if a job-connected disability is established later. Assistant City Attorney Leslie Dougall-Sides said Mr. Ford can amend, in writing, his application to request a non-job connected disability. In answer to a question, Mr. Laursen stated a job-connected disability pays a 66(% pension and non-job connected disability pays 2.75% times years of service. Mr. Ford is unable to work and has exhausted all benefits. Mrs. Ford expressed concern they had not received early notice of this meeting. She said Mr. Ford will amend his application to a non-job connected disability request with a provision they can continue pursuing a job-connection. It was suggested that Mr. Ford visit a medical toxicologist to document cause. It was recommended that employees listed on the agenda receive timely notification of meetings. Member Breest moved to schedule a Special Meeting for the week of March 18, 1996, to address David L. Ford's request for a non-job connected disability. The motion was duly seconded. Member Breest reported he will be unable to attend a PAC meeting on March 21, 1996. Mr. Laursen said only a quorum is necessary. The motion was amended to schedule the Special Meeting for March 21, 1996, at 9:00 a.m. The seconder agreed. It was recommended a review of Rick Management files accompany each disability application. Mr. Laursen said before the Pension Plan was revised, Mr. Marcin attended PAC meetings with the Risk Management file that contains all injury forms for discussion with the Committee. These files are available for Committee review before PAC meetings. Risk Management's presence at the March 21, 1996, meeting was requested. Upon the vote being taken, the amended motion was carried unanimously. c) Approval of New Hires as Plan Members Mr. Laursen said the Committee had directed him to review all new hires and confirm that doctors had approved the applicants for pension, etc. Ms. Dougall-Sides and he had checked the ordinance and noted the language states ". . .the committee shall review such physicians' reports. . . ." In answer to a question, Mr. Laursen said physicians are provided with job descriptions and medical standards developed by the City. The PAC always has based approval of new hires on physician recommendation. Ms. Dougall-Sides indicated the PAC can delegate responsibility for reviewing physician recommendations to Mr. Laursen. PAC members can review this information in the Human Resource offices before PAC meetings. Concern was expressed that promoted employees are not examined for pension for new positions. Mr. Laursen said the PAC cannot address that issue. ADA (American with Disabilities Act) requires the City to consider only the position a new hire has accepted. The revised ordinance states a person cannot receive a disability pension based on a preexisting condition. Physical examinations remain on record. It was suggested the form for physicals list limitations. Ms. Dougall-Sides suggested a mechanism could be initiated to identify limitations. Member Clark moved to authorize Mr. Laursen to review all new hire applications for completeness and confirm that physicians had approved the applicants for pension and that records will be available for PAC review. The motion was duly seconded and carried unanimously. Member Johnson moved to accept the following employees into membership in the Pension Plan: Date of Pension Employment Elig. Date. Michael Aleska, Firefighter Fire Department 03/04/96 03/04/96 Elizabeth Boone, Firefighter Fire Department 03/04/96 03/04/96 Kevin Bowler, Firefighter Fire Department 03/04/96 03/04/96 Dewayne Broadwater, Custodial Wrkr Parks & Rec. Dept. 02/21/95 10/16/95 Timothy Chaplinsky, Custodial Worker Parks & Rec. Dept. 02/20/96 02/20/96 Stephen Coward, Firefighter Fire Department 03/04/96 03/04/96 Paul Cronin, PW Service Worker. I Public Works Dept. 01/22/96 01/22/96 Oscar DelBono, WWTP Operator Trne Engineering Dept./WPC 02/20/96 02/20/96 Louis Georgantas, Firefighter Fire Department 03/04/96 03/04/96 Ronald Horne, PW Service Worker I Public Works Dept. 01/22/96 01/22/96 Donald Gulley, Custodial Worker Parks & Rec. Dept. 02/20/96 02/20/96 Kenneth Smith, PW Service Worker I Public Works Dept. 02/20/96 02/20/96 The motion was duly seconded and carried unanimously. ITEM #4 - Pending Business a) Leo Thompson - Spray Technician, Parks & Recreation Department - Job-connected Disability Pension - Not present Mr. Laursen reported the former PAC had rejected Mr. Thompson's application for job-connected disability pension. Mr. Thompson also has a pending claim with workers' compensation. Mr. Laursen reported Mr. Thompson has reached a settlement with the City that calls for him to resign, to withdraw his pension monies, and to release the City from any claims. The City has not yet received the court approved order. Mr. Thompson's resignation is expected soon. b) Claim of Kathy Jenkins on behalf of Latisha Renae Carey, a minor, for Survivor Benefits as the daughter of Robert Mouzon, deceased - Not present Ms. Dougall-Sides said the City has received competing claims regarding Survivor Benefits from Robert Mouzon's estate. If either claim is paid, the Pension Fund potentially could be libel for complete payment to the other claimant. The PAC cannot determine which claimant has the better claim. She recommended filing an inter-pleader action requesting the court to determine which claimant should receive the benefits. According to Code, the Commission directs the City Attorney to file suit on behalf of the City in general civil actions. The Pension Ordinance has no corresponding provision except the Trustees have ultimate authority to administer the fund. She suggested including this on the Trustees' next agenda. Robert Medler, representative for Kathy Jenkins, indicated evidence was submitted to the City regarding Ms. Carey's claim as Mr. Mouzon's daughter. Ms. Dougall-Sides said no definition of a dependent exists. In answer to a question, she said the City is relieved of liability if the circuit court orders the City to pay a specific claimant. If Clearwater files an inter-pleader action, the City would be the plaintiff, but a disinterested party. Member Clark moved to request the Pension Trustees direct the City Attorney to file an inter-pleader action regarding competing claims for Survivor Benefits in Robert Mouzon's estate. The motion was duly seconded and carried unanimously. c) Request of Robert Lockwood to review the application of actuarially reduced pensions (early retirement provision) Steve Metz, actuary for Coopers and Lybrand, referred to Robert Lockwood's January 2, 1996, memorandum regarding actuarially reduced pensions at age 65 with 10 years of service. Mr. Metz said before the January 1, 1996, change to the Pension Plan, retiring employees could not collect pension funds until the 20th anniversary of their start of service. Some employees indicated they wished to collect their pensions early. An actuarially equivalent pension that starts early provides pensioners the option of receiving their pensions earlier without increasing the Pension Plan's costs. Actuarial tables calculate an expected benefit that is equal in value to the deferred pension. Pensioners can wait until their 20th anniversary and collect a full pension. Permitting early collection is a new and added benefit. Pensioners cannot change their plan once one is chosen. Robert Lockwood expressed concern that senior employees are the only ones with pensions based on actuarially equivalents. Public safety employees and those over age 55 can retire after 20 years of service without a reduction to their pensions. He said SAMP employees did not write or bargain the new plan and pensioners who collect an actuarially equivalent pension will never receive as much money as they contributed. He suggested allowing older employees to invest their 8% contribution independent of the Pension Plan. Mr. Metz said the Plan provides that all employees will be returned a minimum of their own contribution plus interest. The beneficiary or estate receives the difference. Mr. Lockwood was concerned one group of employees is treated differently than others and referred to the non-discrimination clause. Mr. Metz agreed everyone does not receive the same benefit from the Plan. This always has been true. A non-hazardous employee who retires at age 40 after 20 years of service must wait 15 years before collecting pension funds and cannot request an actuarially equivalent reduced amount. The updated Plan allows employees, at age 65, to receive benefits of equal value earlier. Every older employee who now retires has actuarially equivalent options. Mr. Metz felt the term fair is impossible to assign here. Mr. Laursen concurred and noted some employees have complained the hazardous duty provision is not fair. Changes to the Plan were directed by the collective bargaining process. Pat Buzek said retirees are asking for benefits based on the formula (2.75% times the number of years). Mr. Laursen said it is difficult to define the subjective word "unfairly" in the non-discrimination clause. For example, he said the current Plan identifies Police and Fire as hazardous duties to be treated differently than non-hazardous duty employees. Mr. Metz said employees who leave the City after ten years of service, must wait at least ten years to collect a full pension. Only older employees can receive payments sooner if they agree to a reduction. According to agreements between the City, State, and Social Security Administration, all employees must join the Pension Plan if they pass the pension physical. Before ADA, some employees considered a poor risk, were denied admission into the Plan. Now, if employees are eligible to perform their jobs, they are deemed eligible for Plan participation. . The majority of the Committee felt the Plan is fair and lucrative. Concern was expressed new committee members have not had the opportunity to review this issue. It was noted Mr. Lockwood had expressed concern the actuarial tables were not distributed until shortly before the referendum. Mr. Lockwood said figures indicate an employee retiring after 10 years receives an 82% reduction in benefits. He said PAC can select a different actuary table in conjunction with the actuaries. Mr. Metz said he was surprised the actuarial tables were requested prior to the referendum. He pointed out the change increased employees' options by adding an alternative method to receive their pension benefit. Employees who reject the new option still can receive a benefit as available from the original Plan. Only older employees have this added option. The majority of the Committee agreed not to pursue this issue nor make any recommendations to the Pension Trustees. d) Request of Police Sergeant Kenneth Donagan to buy pension service credit Mr. Laursen noted Kenneth Donagan had distributed information at the February 8, 1996, meeting. Ms. Dougall-Sides said each buyback case should be considered individually. Regarding Sergeant Donagan's case, the Legal Department did not find the request viable or that the employee could buy back years due to provisions in the Pension ordinance and Policies and Procedures Manual. It was noted former Assistant City Manager Gerald B. Weimer's November 9, 1983, memorandum to the City Manager indicated Sergeant Donagan was accepted back on the Police Force but was not permitted, by law, to buy back into the Pension Plan. This is Sergeant Donagan's first opportunity to have his buy back request considered. In answer to a question, Mr. Laursen said the revised Pension Plan allows employees to buy back into the plan if they return within five years of their resignation and pay back an actuarially determined amount no later than the second anniversary of their return. Sergeant Donagan said he wanted to buy back into the Pension Plan in 1983, but was told he had to waive that right because of his age. During his four month absence, he had celebrated his 39th birthday. At that time, no provision allowed him to buy back into the Plan within two years. Mr. Laursen said the City previously had to comply with State mandate regarding age requirements for Police and Fire personnel that set a 39-year age limit for Police officers. That rule subsequently was challenged and overturned. That mandate was not related to the City's Pension Plan. It was noted Sergeant Donagan's request is based on new Pension Plan language permitting buy backs after breaks in service. Mr. Laursen suggested imposing a two year limitation for similar requests. He said the new Plan contemplates someone leaving under the revised ordinance and then returning within five years. The returning employee has two years to pay back the Pension Fund the greater of: 1) the actual amount of contributions returned plus interest or 2) the present value of the benefit. Ms. Dougall-Sides said her legal opinion was partly based on ordinance language that indicates repayments must be made by the second anniversary of the participant's reemployment. She recommended reviewing each case independently. Concern was expressed regarding City liability to fund the Pension Plan for someone who requests to buy back into the plan after being absent many years. Ms. Dougall-Sides questioned if the Committee can go back beyond the effective date of the ordinance. It was questioned why Weimer's 1983 memorandum addressed the buy back issue. Mr. Laursen said the rules of the PAC allowed someone, whose termination was overruled after they withdrew their pension money, to buy back that time. Those who withdrew their resignation also could buy back their pension. Sergeant Donagan had withdrawn his resignation but was denied the ability to buy back his pension even though others were provided that same opportunity. The age basis, established by the State, for that denial later was found to be discriminatory. It was felt his denial was based on a law or a law of the State that was overturned. Ms. Dougall-Sides said if Sergeant Donagan is permitted to buy back into the Plan, other employees will request a similar benefit. She referred to her February 6, 1996, memorandum and noted payment of City funds covering time periods not actually worked by the employee raises questions of public purpose. She questioned if the employee would be requested to pay back the employee and City contributions. Mr. Laursen said no contributions were made to the Plan during the four months Sergeant Donagan did not work for the City and recommended not counting that time. Sergeant Donagan said when he returned, his seniority was restored, less his four months' absence. He is trying to buy back the 9½ years he worked before his resignation and subsequent withdrawal of same. It was recommended to allow Sergeant Donagan the option to buy back his 9½ years of previous service. Upon approval, Mr. Metz would compute the present value of the benefit Sergeant Donagan would owe. Concern was expressed the Charter did not address this issue. Ms. Dougall-Sides said the City's contribution for those 9½ may have been committed to other employees' benefits. Member Clark moved to grant Sergeant Kenneth Donagan's request to buy back his Pension service credit, if he so chooses, based on the clear understanding that each case regarding the buyback issue will be considered independently. The motion was duly seconded and carried unanimously. Member Greer moved for employees to be notified a temporary window to buy back into the Pension Plan exists for two years after the effective date of the revised Pension Plan. The motion was duly seconded and carried unanimously. The meeting recessed from 11:01 to 11:11 a.m. e) Request of Police Officer David Krieger to buy pension service credit Officer David Krieger said his request for a leave of absence to return to college had not been granted. His intent was to earn his bachelor's degree and return to the City within two years. Although he wanted to leave his money in the plan, it was returned to him less a 20% fee. When he tried to return, a hiring freeze was in place. Upon his 1977 return, he had been absent four years. His request to buy back his previous service is based on language in the new Charter. Member Johnson moved to grant Police Officer David Krieger's request to buy back his Pension service credit, if he so chooses. The motion was duly seconded and carried unanimously. f) Request of Police Lieutenant Wayne Sibbert to be heard regarding claim that new Pension Plan discriminates against single employees. Lieutenant Wayne Sibbert said employees preparing to retire are required to sign many forms. Based on benefits he built over the years, his time is extended for one year. He expressed concern he is asked to choose his retirement option now. Many things can occur within a year that may affect that choice. Lieutenant Sibbert said Human Resources will not consider his pension until all paperwork is complete. He recommended changing this procedure. In answer to a question, Mr. Laursen said Human Resources requests those who announce retirement plans to select an option and complete their paperwork before presenting the application to the PAC for approval. Human Resources provides retiring employees with the actuarial numbers related to their six options. He suggested Lieutenant Sibbert could choose his option shortly before his last day of pay for presentation to the PAC. It was noted the PAC approves retiree pensions, not the options. Mr. Laursen said retirees cannot change their option once one is chosen. He noted retirees want assurances the PAC will approve their retirement. Lieutenant Sibbert will contribute to the plan until his last day of pay. Mr. Laursen said staff was hesitant to bring incomplete Pension applications to the PAC for approval. Consensus was for retirees who are extending their time to complete paperwork and choose an option for their pension benefit at least 30 days prior to the completion of their extended time and start of pension benefits. Lieutenant Sibbert expressed concern married retirees receive greater benefits than single retirees even though both contribute the same. The added benefit for married retirees can be as much as 44%. He said the Pension prohibits discrimination. Mr. Metz said married employees always have received a more valuable benefit. The Pension Plan always provided a death benefit to an employee's spouse of 100% for five years and 50% thereafter. Single employees do not receive a death benefit. When the Pension Plan was amended, added options did not cost the plan more but provided employees with additional choice. Married employees who give up the death benefit upon retirement receive an increased benefit to keep the value the same. Only employees who are married at death, qualify for death benefits. The new Pension Plan allows retirees to factor in that value at the time of retirement. g) Selection of seventh Committee member Mr. Laursen distributed two memorandums each recommending Dick Fitzgerald for the seventh seat. Two other nominations were submitted previously by PAC members. Consensus was to agenda this item for the March 21, 1996 Special Meeting. h) Request of Sgt. Paul Noeske to select another option Mr. Laursen reported Officer Fred Casale and Sergeant Paul Noeske submitted their retirement papers and selected their benefit without receiving information regarding the specific dollar value of the six options. Sergeant Noeske has asked to reconsider his choice. Ms. Dougall-Sides felt the request is reasonable because the City did not disclose full information before he considered his option. Only two employees were not provided dollar figures. Mr. Laursen recommended the PAC honor Sergeant Noeske's request. He will contact Officer Casale and make a similar offer. Member Greer moved to allow Officer Fred Casale and Sergeant Paul Noeske to reconsider their choice of retirement options now that the dollar values are available for their review. The motion was duly seconded and carried unanimously. Consensus was to allow the two retirees thirty days to change their retirement options. I) Discussion of procedures for processing employee disability pensions requests Mr. Laursen requested PAC support staff's recommendation for procedure: 1) all disability applicants fill out the application form; 2) applicants submit their medical documentation; 3) Human Resources refer applicants for an IME and occupational assessment; 4) applicants complete a set of interrogatories prepared by the Legal Department; and 5) applicants appear before the PAC. Ms. Dougall-Sides said staff has reviewed procedures from other counties and found proceedings range in formality. Staff recommend a procedure that allows the applicant and City to make a presentation and not be too formal about presenting witnesses and evidence. An appeal procedure will be included. Employees who are disabled from doing their job can be reassigned. Mr. Laursen said staff recommends no longer requiring applicants to submit two medical statements. It was noted the PAC previously required two meetings to approve a disability because time may be needed to investigate concerns and contact doctors. It was suggested that Human Resources advise applicants regarding required documentation before their case is on the agenda. Consensus was for Mr. Laursen to submit procedures to the PAC based on this recommendation. ITEM #5 - Director's Reports The April PAC meeting was rescheduled for Tuesday, April 16, 1996, at 9:00 a.m. ITEM #6 - Adjournment The meeting adjourned at 12:03 p.m.