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07/14/1999PENSION ADVISORY COMMITTEE MEETING CITY OF CLEARWATER July 14, 1999 Present: Brian Aungst Chair/Mayor – departed 2:40 p.m. J. B. Johnson Vice Chair/Commissioner Pat Greer Committee Member Dick Fitzgerald Committee Member Ed Hart Committee Member/Commissioner Sharon Walton Committee Member Absent: Pat Shepler Committee Member Also Present: Paul O’Rourke Human Resources Administrator Margie Simmons Financial Services Administrator Debbie Ford Administrative Analyst Lee Dehner Pension Advisory Committee Attorney Patricia O. Sullivan Board Reporter The Chair called the meeting to order at 2:00 p.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 June 17, 1999, as recorded and submitted in written summation to each board member. The motion was duly seconded and carried unanimously. ITEM #3 - Employees to be Heard – None. ITEM #4 - Action Items a) Review and Action on Employee Requests for Years of Service Pensions: 1. Duane E. Smith IV – Police Sergeant, Police Department 2. Donald O. Parker – Parking Meter Technician, Public Works Member Greer moved to approve Years of Service Pensions for Duane E. Smith IV and Donald O. Parker. The motion was duly seconded and carried unanimously. b) Review and Action on Employee Requests to Vest Pensions: 1. Nancy Yankus – Meter Reader II, Customer Service Nancy Yankus has resigned her position after being employed by the City for more than 12 years. She will qualify to receive her reduced pension beginning March 1, 2008. Member Greer moved to approve the request by Nancy Yankus to vest her Pension. The motion was duly seconded and carried unanimously c) Review and Action on Employee Requests to waive Vested Pensions: 1. Lori Metzner – Librarian I, Library Lori Metzner was credited pension service credit for time served with the City from October 25, 1982, to October 30, 1992. She has requested that pension service time be credited with her current pension service time as an employee of the Library Department and to continue for such time as she is employed by the City and participates in the Pension Plan. In a statement signed June 11, 1999, Ms. Metzner waived her rights to a vested pension with the City based on her original period of employment from 1982 to 1992. Member Greer moved to approve waiving a vested pension for Lori Metzner. The motion was duly seconded and carried unanimously. d) Approval of New Hires as Pension Plan Members As of July 7, 1999, the City has 1,644.9 FTEs and 1,750 budgeted positions. Theresa McNeela, Edward Hartman, Daniel Harrison, Lori Metzner, and George Banores were hired originally part-time; changed to full-time and eligible for pension as of Pension eligibility date listed. Member Greer moved to accept the following employees into membership in the Pension Plan: Date of Pension Employment Elig. Date Theresa McNeela, Police Aide Police Department 05/27/97 04/24/99 Edward Harman, Police Aide Police Department 07/22/96 04/24/99 Daniel Harrison, Police Aide. Police Department 01/21/97 04/24/99 Earl Ashley, Fleet Service Worker General Support Services 06/07/99 06/07/99 Elizabeth Lancara, Staff Assistant I Fire Department 06/07/99 06/07/99 Lori Metzner, Librarian I Library 09/06/94 06/05/99 George Banores, Marine Facility Operator Marine Department 03/11/98 06/05/99 Antoinette DeLuca, Police Info. Tech. Police Department 06/07/99 06/07/99 Sylvia Walls, Police Information Tech. Police Department 05/24/99 05/24/99 Eric Jenkins, Public Services Tech. I Public Works 06/21/99 06/21/99 Luther Mack, Custodial Worker General Support Services 06/21/99 06/21/99 Robert Mock, Maintenance Worker II Parks & Recreation Dept. 06/21/99 06/21/99 Mark Crellin, Survey Assistant Public Works 06/21/99 06/21/99 John Waldman, Air Conditioning Tech. General Support Services 06/21/99 06/21/99 Lisa Authier, Accounting Clerk General Support Services 06/21/99 06/21/99 Chance Anderson, Public Service Tech. I Public Works 06/21/99 06/21/99 Matthew Johnson, Maintenance Wkr. I Parks & Recreation Dept. 06/21/99 06/21/99 The motion was duly seconded and carried unanimously. ITEM #5 - Pending/New Business a) Early Retirement Issue Human Resources Administrator Paul O’Rourke reported 39 employees between the ages of 60 and 65 have worked less than 10 years for the City. Prior to 1996, the Pension Plan had no provision for the collection of retirement benefits prior to the 20th anniversary of employment. He recommended the PAC (Pension Advisory Committee) attorney and actuary, Steve Metz, analyze this issue and recommend a course of action. Currently, older employees can receive an actuarial reduced pension at age 65. Concern was expressed that amount is significantly reduced and unfair to older workers. It was suggested the City consider a vested benefit after 5 years of employment. Financial Services Administrator Margie Simmons said payments to retirees who collect benefits before their 20th anniversary of employment are actuarially reduced to prevent this new benefit from harming the Plan. Mr. O’Rourke said, for example, a 65-year-old retiring after 10 years of service could receive $229 monthly immediately but would receive $603 monthly if the person waited until age 75 to begin collecting retirement benefits. Concern was expressed plan membership is obligatory for non-exempt positions. PAC Attorney Lee Dehner said most public plans mandate membership. He said the City’s Plan is unusual as it does not to provide full benefits when members reach retirement age. Ms. Simmons said if a retiree begins to draw benefits before 20 years have elapsed, the amount received is reduced actuarially so that lifetime benefits will be the same. She agreed the total contributions of some retirees in this category would not be returned. It was noted Social Security recipients are not guaranteed a return on all contributions. Member Greer moved to request the Pension Trustees to fund an analysis by the PAC attorney and actuary of Plan retirement benefits that includes a calculation of the impact of allowing employees to receive full retirement benefits at age 65 after a minimum of 10 years of employment. The motion was duly seconded and carried unanimously. b) Discussion Re: Supplemental Pension Letter Robert Lockwood referred to his January 2, 1996, memorandum related to the actuarial reduction of pension benefits for retirees who worked less than 20 years. He expressed concern the current plan is not neutral as it reduces benefits by 70% for 65-year-old retirees who have worked only 10 years. New State Legislation Mr. Dehner reviewed State legislation passed during the last session affecting Pension Plans similar to the City’s. The City’s Pension Plan is a General Plan for all City employees, including firefighters and police officers. The legislation requires adding a benefit for firefighters and police officers to receive retirement benefits at age 50 after 10 years of service. Reduction of that benefit is capped at 3% per year. Mr. Dehner said preexisting conditions related to police officers and firefighters also must be removed. The City can reduce the Worker’s Compensation benefit for police officers and firefighters who receive disability benefits so that payments do not exceed 100% of the beneficiary’s salary. The City also must provide firefighters and police officers the opportunity to buy-back into the Plan with interest if they are reemployed within 90 days. Firefighters and police officers who join the military service and return to their City positions within 1 year of an honorable discharge must be provided up to 5 years of Plan credit. These changes will be paid with State funds that exceed the amount received by the City in 1997. Mr. Dehner recommended the City implement as many requirements as possible this year based upon the amount of available funds. He recommended the actuary calculate the cost of these mandated changes. In response to a question, he said the City must implement the changes, as State funds become available. The process will continue next year. Ms. Simmons said the changes benefit no one. In response to a question, she expressed concern the Plan would be burdened by actuary and legal expenses related to these changes. Mr. Dehner said the statute is not clear on reimbursement for those costs but felt related expenses would be insignificant. Mr. Dehner said changes also require that the rank or pay level of police officers cannot be reduced if they are reassigned due to a disability. In response to a question, Ms. Simmons said a review of the Plan’s financial statements will be on August’s agenda. The supplemental boards have their own review committees. Mr. Dehner recommended the PAC choose a member to participate in meetings with the Firefighters Supplemental Board and Police Officers Supplemental Board. Consensus was for Member Hart to serve. ITEM #6 - Director's Reports Mr. O’Rourke welcomed new Committee member, Sharon Walton. As Ms. Walton has resigned her position with the City, the PAC’s election committee will reconvene to set up another election. Mr. O’Rourke said employee contract negotiations are underway with union representatives. One issue under discussion is the addition of a COLA (Cost of Living Allowance) benefit for Pension Plan beneficiaries. He recommended the actuary analyze the cost of this benefit for consideration by the City Commission. Mr. O’Rourke recommended the PAC manual be revised. Mr. Dehner will review the document and discuss it with PAC members. In response to a question, Ms. Simmons reviewed the City’s 3-year contract with the actuary, including the negotiation of fees for specific projects. She said the contract’s cost will increase as it had not anticipated services related to legislative changes and analysis of a COLA benefit. It was felt the COLA should not be considered nor money spent to analyze it. Mr. O’Rourke said the City must compete to attract and retain good employees. As the unions had brought forward the proposal, the City needs to analyze it. Pension Plans of the State and nearby counties offer 3% COLAs. He recommended the entire compensation plan be reviewed. The next meeting is scheduled for August 12, 1999, at 9:00 a.m. Due to Veterans Day, that month’s meeting has been rescheduled to November 9, 1999, at 9:00 a.m. ITEM #7 - Board Members to be Heard In response to a question, Mr. Dehner said scheduling problems following contract approval were related to conflicts with other commitments. He did not anticipate future scheduling conflicts. ITEM #8 - Adjournment The meeting adjourned at 2:53 p.m.