BACKGROUND:
Some time ago, the Board for General Employees’ Pension Plan submitted a proposed “ restatement” ordinance of the Plan to simplify, modernize, and clarify several sections of the ordinance. City staff felt that it was prudent to dispose of the Florida Retirement System (FRS) ordinances before making any significant changes to the Plan. After the council enacted the final FRS ordinance in June 2015, city staff met with the pension attorney, Ken Harrison, to discuss each change proposed. Although the Plan is now closed to new members, the Plan will continue in effect for the retirees and current employees in the Plan.
At the January 20, 2016 city council meeting, Mr. Harrison gave an overview of changes recommended by the Board; and Ms. Ryan discussed changes recommend by city staff. Thereafter, the city council approved the ordinance on first reading 4-1 (with Chairperson Pardo dissenting) with the following changes:
Adding a provision which changes the composition of the pension board. Although the number of pension board members will remain the same, the city council will now have two appointments, the mayor will have two appointments to be confirmed by city council, and the three elected employee members will be elected at large, primarily because the Plan is now closed to new members so the number of employees in the Plan will be decreasing as time goes by.
The council also made it clear that it wanted board members to seek education opportunities in the state but clarified that it isn't mandatory.
Finally, the city council did not agree to remove the DROP education component of the ordinance so that provision remains.
SUMMARY:
After months of working together and thorough review of the Plan, the fifty plus page document is proposed for your consideration. In addition to clean-up language, some of the substantive changes include:
· Clarifying and removing restrictions for military personnel to purchase past service under the definition of “continuous service”.
· Clarifying and refining the definition of “Earnings”
· Removing the mandatory retirement of age of 70 to comply with state and federal laws.
· Limiting post-retirement beneficiary changes to two times without board approval.
· Clarifying the optional forms of benefits so that they are more easily understood.
· Clarifying that employees may only include sick and vacation leave in the pension in accordance with Florida statute section 112.66(11).
· Adding language to provide certain survivor benefits for those who die in military service.
· Changing the composition of the board of trustees after the expiration of terms
· Adding language that the board should have written policies for expenses and travel.
· Clarifying that board members must attend educational functions and focusing on attending classes in the State of Florida.
· Adding language to clarify that the city could rehire past employees so long as the city is in compliance with IRS regulations.
Finally, the actuary has submitted an actuarial report regarding the fiscal impact that is being submitted for your review.