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10/10/1996 PENSION ADVISORY COMMITTEE CITY OF CLEARWATER October 10, 1996 Present: Rita Garvey Chair/Mayor Richard Breest Committee Member Robert Clark Committee Member/Commissioner Pat Greer Committee Member Leslie Dougall-Sides Assistant City Attorney Michael Laursen Human Resources Director Patricia O. Sullivan Board Reporter Absent: J. B. Johnson Vice Chair/Commissioner Dick Fitzgerald Committee Member Pat Shepler Committee Member The Chair called the meeting to order at 9:02 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 Clark moved to approve the minutes of the regular meeting of September 12, 1996, as recorded and submitted in written summation to each member. The motion was duly seconded and carried unanimously. ITEM #3 - Review & Action on Employee Request for Non-job-connected Disability Pension a.) Hearing on Thomas Murray - Meter Reader, Finance Department - Non-Job-connected Disability Pension - Member Greer moved that Thomas Murray be granted a non-job-connected disability pension effective on a date to be determined based on Mr. Murray's disability which is described as nonischemic cardiomyopathy, nonsustained ventricular tachycardia, chronic obstructive pulmonary disease, and anxiety; all these symptoms making him permanently unable to perform his job and documented by numerous medical statements of Paul L. Phillips, M.D.; Jose L. Gallastegui, M.D.; Aland Fernandez, M.D.; and Robert Sanchez, M.D.; with accompanying dates of all the doctor visits. The motion was duly seconded and carried unanimously. Human Resources Director Mike Laursen indicated Mr. Murray's functional occupational assessment test is on file. ITEM #4 - Employees to be Heard Mr. Laursen indicated employees were advised they might not receive immediate answers upon addressing the PAC unless employees provide the PAC with written requests in advance for review. Dan Carpenter questioned why the PAC (Pension Advisory Committee) had denied his buy-back application and requested they reconsider their position. Mr. Laursen said the PAC had agreed with Assistant City Attorney Leslie-Dougall-Sides' memorandum indicating Mr. Carpenter's request did not fall within approved parameters; buy-backs only were approved for employees who had returned to their previous positions and had, in essence, withdrawn their resignations. Mr. Carpenter had resigned his position as a Senior Beach Guard in the Marine Department and returned to the City as an Accountant in the Finance Department. It was requested staff redistribute the memorandum addressing this issue. Van Horton, President of the International Association of Firefighters, questioned if the policy is a written one or is based on staff interpretation. Ms. Dougall-Sides said the parameters are based on PAC minutes and consensus. Mr. Laursen said buy-backs are based on actuary numbers and have no negative impact on the Pension Plan. It was requested staff request Mr. Metz compute actuary numbers for Mr. Carpenter prior to the November 14, 1996, meeting when further discussion of this issue will be held. ITEM #5 - Action Items a) Review and Action on Employee Requests for Years of Service Pension - None. b) Approval of New Hires as Pension Plan Members Mr. Laursen said he had reviewed all physician recommendations and reported all listed new hires meet Pension Plan criteria. Member Greer moved to accept the following employees into membership in the Pension Plan: Date of Pension Employment Elig. Date. Robin I. Gomez, Auditor Internal Audit 09/16/96 09/16/96 Elizabeth Wood, Systm Analyst/Prgrm Information Mgmt. 09/16/96 09/16/96 Jeanette Terry, Staff Assistant II Economic Development 09/16/96 09/16/96 Von Watson, Pub Works Svc Worker I Public Works Dept. 09/16/96 09/16/96 Gregory Anderson, PubWorksSvcWrkrI Public Works Dept. 09/16/96 09/16/96 Darrell Ford, Pub Works Svc Worker I Public Works Dept. 09/16/96 09/16/96 Alan L. Ruud, Tradesworker II, General Services Dept. 08/26/96 09/23/96 Jessie Croskey, Maintenance Worker I Parks & Recreation 10/30/95 09/16/96 Courtney G. Atkinson, Mechanic II General Services Dept. 09/09/96 09/09/96 Jose Leon-Tapia, Maint. Worker I Solid Waste Dept. 09/16/96 09/16/96 Michelle Solaski, Staff Asst. I Legal Department 09/03/96 09/03/96 The motion was duly seconded carried unanimously. ITEM #6 - Pending/New Business a) Direction from Committee regarding pension buy-back - lump sum or installment Mr. Laursen referred to his October 3, 1996, memorandum addressing repayment of pension buy-backs, noting the Pension Ordinance requires repayment be made no later than the second anniversary of the participant's reemployment. The PAC had determined buy-backs of time prior to January 1, 1996, must be concluded by December 31, 1997. Firefighter Jerry Lovett has requested buying-back his retroactive pension service time through payroll deduction or installment payments. Consensus of Finance Director Margie Simmons, Payroll Services Manager Debbie Bailey, and Mr. Laursen was that buy-backs should be made with a lump sum payment. Mr. Laursen expressed concern benefits would be difficult to determine if an employee terminates employment, becomes disabled, or dies in the midst of a buy-back. Current pension contributions by employees are pre-taxed while previous pension contributions were post-taxed. Mr. Lovett said his buy-back had been computed at approximately $41,000 for 28 months of service. He felt an installment plan would better serve his need to accrue those funds as it is impossible for him to make a lump sum payment. Mr. Laursen suggested the employee would benefit from setting aside the amount he intended to deduct from his bi-weekly pay, earning interest on the investment of that money, and making a lump sum payment prior to December 31, 1997. Mr. Lovett said he would lose money if he took out a loan to pay back the money. Member Breest moved to require eligible employees make their buy-back contribution to the Pension Plan in a lump sum payment. The motion was duly seconded. In answer to a question, Mr. Laursen said approximately 8 employees are eligible for buy-backs. The City is not required to match the contribution as it had contributed money during the previous employment; these monies remained in the Plan's fund and continued earning interest. Mr. Horton suggested the City must match the contribution. Ms. Dougall-Sides said the City is not required to make a double contribution. Upon the vote being taken, the motion carried unanimously. It was requested staff verify if Mr. Lovett qualifies for pre-tax benefits regarding his buy-back. Ms. Dougall-Sides said an IRS ruling might be needed as the buy-back relates to the original years of employment. It was suggested Mr. Lovett be encouraged to seek outside advice regarding his financial planning. Mr. Laursen reported a RFP (Request for Proposals) has been distributed for a third party administrator for the Pension Plan to provide counseling to employees. The third party administrator was a key commitment made at referendum to provide employees information and review options. A recommendation for this position will be forwarded to the City Commission in several months. ITEM #7 - Director's Reports a) Discussion of Draft of Periodic Examination and Call-Back Procedures Mr. Laursen noted the absence of several committee members and suggested continuing discussion on the draft. He requested committee members contact him with corrections and recommendations. Member Clark moved to continue Item #7a to November 14, 1996. ITEM #8 - Adjournment The meeting adjourned at 10:02 a.m.