Fort Walton Beach Council agenda — 12-08-2010 - regular — reading text

vested in accordance with section 17- 17. 1( 20), or partially vested in accordance with section 17- 15( 2), terminates City employment or elects to participate in the Defined Contribution plan in accordance with section 17- 11( 2), he may elect to receive a refund of contributions in accordance with subsection ( 1), above, or may elect to defer the receipt of retirement benefits until the early or normal retirement date ( if applicable), at which time he may receive the retirement benefit which had accrued to the date of his termination or election to participate in the Defined Contribution plan, calculated in accordance with section 17 -15 or 17 -15. 1. The retirement benefits of such iyestea tem4nated members shall be determined in accordance with the terms of the Plan in effect at the time City employment terminates or participation in the Defined Contribution Plan commences, and shall not be subject to the cost of living adjustment in 54- section 17 -16. Fully or partially vested members may not transfer member contributions into the Defined Contribution Plan. 3) In the event a member terminates City employment and is the -° aft°- re- employed on or before December 31, 2009 by the City in a position covered by this Plan within one ( 1) year following the effective date of termination, the member may receive credited service for the full period of prior membership by paying back into the retirement fund, within thirty ( 30) days after reemployment, the full amount returned to the member following termination of employment, together with interest at the rate assumed in the most recent actuarial valuation. A member who is reemployed by the City must complete the medical examination described in Sec. 17- 13( 1). Notwithstanding any other provision of the Plan, a former member of the Plan who is reemployed by the City on or after January 1, 2010 will become a member of the Defined Contribution Plan. Section 5. Section 17 -20. 1 of the City of Fort Walton Beach General Employees' Retirement Plan is hereby amended to read as follows: Sec. 17 -20. 1. Transfer of City employees between plans. 1) If a City employee participating as a member of another retirement plan within the City system becomes an employee under the definitions of this Plan on or before December 31, 2009, his membership shall be transferred to this Plan. The years of credited service that he has accrued under the predecessor plan shall be credited to him under this Plan. The entre balance of the employee' s accumulated contributions shall be transferred without delay to the General Employees Pension Trust Fund. In addition, the advisory committee shall request that an actuarial calculation be performed to determine the portion of the predecessor plan' s funds which has been accrued to fund the benefits of the transferring employee. As soon as the amount can be determined, the Plan administrator shall transfer such amount from the predecessor fund to this fund and provide a memorandum to each plan of the result of the transfer. If a City employee participating as a member of another retirement plan within the City system becomes an employee under the definitions of this Plan on or after January 1, 2010, he will become a member of the Defined Contribution Plan. Section 6. That all ordinances or parts of ordinances in conflict herewith are hereby repealed. 55-  Section 7. That if any section, subsection, sentence, clause, phrase of this ordinance or Exhibit A, or the particular application thereof shall be held invalid by any court, administrative agency, or other body with appropriate jurisdiction, the remaining section, subsection, sentences, clauses, or phrases under application shall not be affected thereby. Section 8. That this Ordinance shall take effect immediately upon approval by Council and signature by the Mayor, except as otherwise specifically provided herein. ADOPTED: MAYOR: ATTEST: CITY CLERK Reviewed and approved as to form: CITY ATTORNEY Reviewed and approved as to legal sufficiency: James W. Linn Retirement Attorney Note: additions are underlined; deletions are stfiek . 56-  Page 1 of 1 Mark Wiltsie From: Toni Craig [ toni @tonicraig. info] Sent: Monday, November 16, 2009 7:56 AM To: Mark Wiltsie Cc: Robert Mearns; Brandy Wunker Subject: RE: General Employees Pension Plan- Ordinance Amendment Mark Add lines for the Mayor and City Clerk to sign. Otherwise, the form is sufficient. Toni L. Craig Attorney at Law Fla Bar No 115444 850) 243 -6969 www.tonicraig. info From: Mark Wiltsie [ mailto: mwiltsie@fwb. org] Sent: Friday, November 13, 2009 5: 14 PM To: Toni Craig Cc: Robert Mearns; Brandy Wunker Subject: General Employees Pension Plan- Ordinance Amendment Toni, Attached, please find an amendment to the General Employees Pension Plan which closes the plan effective December 31, 2009. As you may recall, Council approved staff moving forward to establish a defined contribution plan for all new hires after January 1, 2010. As such, it is necessary to amend the current plan and close it for new members. The amendment was prepared by Jim Linn. Can you please review as to form? In addition I will also be sending you a resolution also prepared by our pension attorney adopting the defined contribution plan. I anticipate receiving that early next week and will forward as soon as I receive it. Thanks and have a good week -end. Mark Mark Wiltsie Administrative Services Director City of Ft. Walton Beach 850/ 833 -9506 850/ 833 -9931 ( Fax) 850/830 -9950 ( Cell) Please Note: Florida has a very broad public records law. Most written communications to or from City of Fort Walton Beach officials are public records available to the public and media upon request. Your e -mail address and communications may therefore be subject to public disclosure. Think Green - Please consider the environment before printing this e- mail. No virus found in this incoming message. Checked by AVG - www.avg.com Version: 8. 5. 425 / Virus Database: 270. 14. 62/ 2499 - Release Date: 11/ 13/ 09 07:54:00 11/ 16/ 2009 - 57-  CITY OF FORT WALTON BEACH MEMORANDUM DATE: April 14, 2009 TO: Robert T. Mearns, Acting City Manager FROM: Mark Wiltsie, Administrative Services Director SUBJECT: General Employees' Pension Plan BACKGROUND: At their September 2008 regular meeting, City Council authorized staff to secure the services of our pension attorney, Jim Linn with the firm of Lewis, Longman, & Walker and the City's pension actuary, Mike Tierney of Actuarial Concepts to undertake a review of the City's defined benefit pension program and provide an analysis regarding the concept of transitioning this type of pension plan to a defined contribution program. DISCUSSION: The attached analysis was jointly prepared by Mr. Linn and Mr. Tierney and provides some general information regarding the current defined benefit pension program and the distinction between -that plan and a defined contribution plan. The analysis additionally provides advantages and disadvantages of a deferred contribution plan and provides various scenarios for Council's consideration in implementing a deferred contribution plan as an alternative. Mr. Linn and Mr. Tierney will be present at the May 5, 2009 Special City Council meeting to make a presentation regarding their analysis and respond to questions. If it is the desire of City Council to transition from the defined benefit plan to a defined contribution plan fc)r all new hires at some future date ( e.g., 10/ 01/ 09), then it would be necessary to issue a Request for Proposal ( RFP) to obtain a third -party administrator to administer the deferred contribution program. With City Council's support of staff's recommendation to proceed with offering all new hires participation in a defined contribution plan, staff would issue an RFP in this regard. RECOMMENDATION: 1. Based on the above, staff respectfully requests City Council direct staff to prepare the necessary ordinance amendments to the General Employees' Pension Plan to accommodate introducing a deferred contribution plan program for all new hires after October 1, 2009 58-  2. Authorize staff to issue an RFP for a third -party administrator to administer the deferred contribution program. 3. Request City Council adopt scenario 4 where the employees' and employer contributions would be 5% of payroll with an option for employees to increase their contribution up to 2.5% with a City match. Submitted by: ark Wiltsie, Admtnistrative Services Director Date Reviewed and Concur: Brandy Wunker, Finance Director/ Date Plan Administrator Reviewed for Agenda: Robert T. Mearns, Acting City Manager Date 59-  CITY OF FORT WALTON BEACH DEFINED CONTRIBUTION RETIREMENT PLAN ANALYSIS FOR GENERAL EMPLOYEES April 13, 2098,#' 1 James W. Linn Lewis, Longman & Walker, P. A. Post Office Box 10788 Tallahassee, FL 32302 850) 222 -5702 Michael J. Tierney Actuarial Concepts 3020 Hartley Road, Suite 250 Jacksonville, FL 32257 904) 262 -3020 60-  CONTENTS Executive Summary 3 General Employees' Retirement Plan: Key Provisions Cost of General Employees' Retirement Plan 6 Establishing a Defined Contribution Plan for General Employees 7 What is a Defined Contribution Plan? Defined Benefit Plan Contrasted Advantages of a DC Plan Disadvantages of a DC Plan Cost of a DC Plan Examples of DC Plans recent/ y Florida Cities 9 Projected Costs Under Severibution ed Plan Scenarios 10 Conclusion and Recommenda 12 APPENDIX A Florida Cities with Defined Co 13 Ne a t J n V 61-