Exh 8AAGENDA ITEM t{SA
JANCARY 8, 2001
CITY OF ATLANTIC BEACH
CITY COMMISSIONER MEETING
STAFF REPORT
ACTION REQUESTED: The General Employees' and Police Employees' Pension Boards
aze requesting that the City Corrunission approve a one time five
percent (5%) Cost of Living Adjustment for City retirees to be
effective with the Retirees January 2001 pay.
SUBMITTED BY: George Foster, Human Resource Manager
DATE: January 3, 2001
BACKGROUND: The City's pension plans were established in September 1975 and
do not contain an automatic COLA provision. In 1981, the City
Corrunission passed Resolution 81-11 requesting that
recommendations concerning any needs for increases in benefits be
performed at three-year intervals from June 1, 1981. Since this
date, retirees have received a 12.:i% COLA in 1987, a re-
computation of the1r pay in Octolxr 1993, and a 3% COLA in
January 1997.
A retirees benefit is determined by their final average salary
(average of highest five yeazs) being multiplied by their number of
years of service then multiplied b:y a pension benefit multiplier. The
October 1993 re-computation of retiree pay was done using a
pension benefit multiplier that was increased from 2.00% or 2.24%
to 2.85% for general plan retiree:; and a multiplier that was
increased from 2.0% or 2.4% to 3.0% for police plan retirees.
RECOMMENDATIONS: Consider Pension Boards' request and advise staff if an Ordinance
should be prepared to implement the proposed COLA.
FUNDING: According to an actuarial impact statement prepared by Gabriel,
Roeder, Smith & Company, approval of this one time 5% COLA
would increase the future City contribution rate to the General
Employee Pension Plan by 0.18°/~ of salary ($4,032) annually and
would increase the future contnbution rate to the Police Employee
Pension Plan by 0.43% of salary ;$4,380) annually.
CITY MANAGER:
Attachments: 1. Request from Pension B ds
2. Summary of other Cities
3. Funding Ratio of Plan
4. Ciry Contribution Rates
AGENDA ITEM q8A
JA\UARY 8, 2001
CITY OF ATLANTIC BEACH
800 SEMINOLE ROAD
ATLANTIC BEACH, FLORIDA 32233-5445
TELEPHONE: (904) 247-5800
FAX: (904) 247-5805
SUNCOM: 852-5800
http:; 7ci.atlantic-beach. fl. us
January 3, 2001
. MEMORANDUM
TO: Honorable Mayor and City Commissioners
SUBJECT: Cost of Living Adjustment (COLA) for Retvees
The Police and General Employee Pension Boazds respectively request that the City Commission
approve cone-time cost-of--living adjustment (COLA) of five P:rcent (5%) for all City retirees
and beneficiaries to be effective January 2001.
City retirees aze not provided with a Cost of Living Adjustment (COLA) except on a exception
basis as approved by the City Commission. The last COLA received was a three percent (3%)
COLA on January 1, 1997 which was "a one-time cost-of-living; adjustment" provided to all
retirees and beneficiaries who retired prior to January 1, 1997. Since the City's pension plans
were established in September 1975, retirees have received two COLAs (a 3% COLA in 1997 and
a 12.5% COLA in 1987) and one re-computation of retirement pay in 1993 based upon a change
to the retirement multiplier.
Based upon an actuarial evaluation completed by Gabriel, Roecer, Smith & Company, the
adoption of this proposal would require an additional City cont,-ibution of 0.18% of salary
($4,032 annually) for General employees and 0.43% of salary (:54,380 annually) for Police Officer
employees.
Sincerely,
/~
l / ~'
Cin Anderson
Chairperson,
Police Pension Boazd
Tim To send
C Isom,
General Employee Pension Boazd
Attachment 1
AGENDA ITE~1 p8A
JANUARY 8, 2001
PENSION COMPARISON INFORMATION
Atl Beach = Citv of Atlantic Bech
Jax Beach = City of Jacksonville Beach
Fern Beach = City of Fernandina Beach
St. Augustine = City of St. Augustine
Neptune Beach. Neptune Beach was not utilized withn this comparison as they have a
Defined Contribution Plan and not a~efined Benefit Plan.
Jacksonville. The City of Jacksonville was not utilised as the Ciry of Jacksonville
does not participate within the Social Security program
The Benett Formula determines the employees retirement benefit and consists of multiplying the
employee's Final Average Salary (FAS) times the employee's Years of Creditable Service (YOS)
times a muhiplier. The multiplier utilized by different Cities isDfdicated below.
GENERAL EMPLOYEES: Atl Jax Fern St.
Beach Beach Beach Augustine
COLA Provision: Ho No No Ho
COLAs Provided: 2* 0 0* 1
Retirement age (Hotel): 60 60 SS 60
Years of service (Note 1): S S 2S 10
Mutiplier: 2.85% 2.50% 2.75% 2.50%**
Employee Contribution: 2.00% 6.45% 6.50% 4.00%
City Contribution: 11.24% 0.00% 7.90% 7.15%
* Currently considering providing COLA to retirees.
** Benefit multiplier reduces to 2% at Social Security eligibility, i.e., age 6S.
POLICE EMPLOYEES: Atl Jaa Fern St.
Beach Beach Beach Augustine
COLA Provision: No No No Yes
COLAs Provided: 2* 0 0* 7***
Retirement age (Note 1): SO SS Any S2
Years of service (Note i ): 20 30 2S 2S
Mutiplier: 3.00% 3.00% 2.75°/u 2.50%**
Employee Contribution: 1.00% 6.45% 6.90% 4.00%
City Contribution: 10.33% 6.00% 3.80% 2.50
* Currently considering providing COLA to retirees.
** Benefit multiplier reduces to 2% at Social Security eligibility, i.e., age 6S.
*** Will receive up to a 3% COLA if City contribution rates do not increase.
NOTE 1. Most common retirement option listed. Other retiretrrent options may be available
including eazly retirement with reduced benefits or a DROP plan.
Attachment 2
AGE\DA ITEAI q8A
JAVtARY S, 2001
PENSION PLAN
FUNDED RATIO
09/30/99 80.2 % funded ratio for General Employees' Plan.
83.0 % funded ratio for Police Employees' Plan.
State mandated separate pension plan accountability.
09/30/98 77.9 % funded ratio.
Fire Pension assets transferred to City of Jacksonville.
10/01/97 -- Police union employees contribution rate changed from 2.315% to 1.00%.
09/30/97 80.2 % funded ratio.
If excess gains were not deferred over five ye:ars, the Funded Ratio would be
87.0%.
01/01/97 -- 3% one-time COLA provided to retirees.
10/01/96 - Police union employees contribution rate changed from 4.815% to 2.315%.
09/30/96 78.6 % funded ratio.
09/30/95 77.0 % funded ratio.
The 09/30/95 report adopted an increased rrH.mber termination assumption.
09/30/94 75.1 % funded ratio.
State mandated, for future actuarial valuatiol~s, use of mortality rates rat less
than those of the 1983 Group Annuity Mortzlity Table. Implementation of this
mandate increased the contribution requirem,:nt and decreased the funded
percent as the mortality rates in the 1983 table were lower than in the table
being utilized.
09/30/93 83.4 % funded ratio.
Benefits were changed, effective October 25, 1993, as follows:
1) General benefit factor increased from 2.25% to 2.85% for active and
retired members and some vested termintted members (from 2.0% to
2.85% for the remaining vested terminated members).
2) Police/Fire benefit factors changed from :>_.4% to 3.0% for active and
retired members and some vested terminated members (from 2.0% to 3.0%
for the reroaining vested terminated members).
3) Voluntary retirement for Police was changed to any age with 25 or more
years of credited service or at age 50 with 20 or more years of credited
service. Previous eligtbility was age 55 with 20 or more years of credited
service. Eligibility at age 60 with 5 years of credited service remained
unchanged.
4) PoGce/Fire eligibility requirement for diszbility in the line of duty changed
from 5 years to 0 years.
5) Retired General employee had their retired pay re-computed with the
2.85% factor.
6) Retired Police employees had their retired pay re-computed with the 3.00%
factor.
7) General employee contnbution rate increased from 1% to 2%.
8) Police union employee contnbution rate increased from 1 % to 4.815%
Reference Ord. Nr. 58-93-19A
09/30/92 95.1 % fiuaded ratio.
09/30/91 91.1 % funded ratio.
09/30/90 96.2 % funded ratio.
Attachment 3
AGEtiDA ITEM MSA
JA`IUARY 8, 2001
09/30/89 104.3 % funded ratio.
09/30/88 98.5 % funded ratio.
10/26/87 -- Changed vesting from ] 0 years to 5 years.
Benefit factor for Genetal changed from 2% to 2.25%.
Benefit factor for Police changed from 2% to 2.40%.
Police member contributions shall be no less than 1 %.
General member contributions shall be no less than I%
Note: Retirees were provided with the 12.5% COLA and did not have their
retirement pay re-computed with the increas<~d factors.
Reference Ord Nr. 58-87-8
10/26/87 -- One time 12.5 % COLA provided to all retirees October 1, 1987.
Reference Ord Nr. 58-87-9.
09/30/87 99.5 % funded ratio.
09/30/86 113.3 % funded ratio.
09/30/85 109.9 % funded ratio.
09/30/84 Not available
09/30/83 101. ] % funded ratio.
09/30/82 96.1 % fimded ratio.
09/30/81 82.2 % funded ratio.
09/30/80 68.4 % funded ratio.
09!30/79 66.9 % funded ratio.
09/30/78 60.2 % fielded ratio.
09/30/77 44.7 % funded ratio.
09/30/76 26.5 % funded ratio.
09/30/75 12.4 % funded ratio.
Initial Plan
Benefit factor of 2% for Police and 2% f>r General.
There were no employee contributions tc the plan.
W P//gaP/MyFiles//Pmvod/Fw~deA-RatioLhangcs
Attachment 3
AGENDA ITEM #SA
JANliARY 8, 2001
PENSION PLAN
CITY CONTRIBUTION RATE
AS A PERCENT OF PAYROLL
GENERAL POLICE
10/01/00 11.24 % 10.3:0
10/01/99 11.58 % 10.113
10/01/98 11.94 % 10.5'5
10/01/97 11.99 % 11.445
]0/01/96 1 ].12 % 7.595
10/01/95 10.85 % 14.915
10/01/94 9.57 % 11.3:.5
10/01/93 9.02 % 10.4ti0
10/01/92 9.27 % 11.1.'i0
10/01/91 9.89 % 12.7'0
10/01/90 Unavailable Unavailable
10/01/89 9.20 % 1 I.5.i0
10/01/88 9.69 % 10.3::0
10/01/87 9.24 % 8.360
10/01/86 Unavailable Unavailable
10/01/85 Unavailable Unavailable
10/01/84 Unavailable Unavailable
10/01/83 Unavailable Unavailable
10/01/82 9.91 % 7.6".0
10/01/81 Unavailable Unavailable
10/01/80 Unavailable Unavailable
10/01/79 Unavailable Unavailable
] 0/01 /78 Unavailable Unavailable
10/01 /77 Unavailable Unavailable
10/01/76 Unavailable Unavailable
10/01/75 Initial Plan
Attachment 4