Attachment C.. r-, -- .. ..
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' ._ ... .. ... ~.. .. ATTACI~fENT .C
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- - ---'-~~ "~--` - --- ` ~" ~' ~- -~ ~ - AUGUST 23, 1999 CO~L~IISSION MEETING
~"""~ ~ ~ ~ CITY OF ATLANTIC BEACH ••
CITY COMMISSIONER MEETING
STAFF REPORT
ITEM: Fire Contract with City of Jacksonville -Pension Funding
SUBMITTED BY: City Manager David Thompson
IRATE: August 18, 1999
BACKGROUND: Effective June 1, 1999, fire services, and fire employees, were
transferred to the city of Jacksonville.
Based upon legal actions required, the Fire Pension Plan has not
been terminated and assets have not been transferred to the City of
Jacksonville.
Initially, the City of Jacksonville indicated that assets of the Atlantic
~„~,~ ~ ~ 1 Beach (AB) Fire Pension Plan were sufficient to fully fund the
transfer and there may be a small shortage of AB funding; however,
it was so insignificant that, Jacksonville did not consider this
"shortage" as long as the. City of Atlantic Beach transferred all
assets to their Plan.. However, based upon a review by the AB
pension plan actuaries, it has been determined that the Fire Pension
Plan may have funds that exceed those necessary to fully fund
pension entitlements for retired/vested fire plan participants and for
' active fire employees transferred to Jacksonville. This amount may
' be as much as $300,000.
OPTION 1:
. Florida Statutes 175.361 states that when a Pension Plan is
terminated, surplus funds will be divided "proportionately"
between the plan sponsor (city of AB) and the State based upon the
total contributions made by the City and the funds received from
the State.
If allowed by the State, transfer all assets of the Fire Pension Plan
. to the City of Jacksonville.
The current agreement states that "All assets and liabilities of the. ~ .. .
Atlantic Beach Fire Department Plan existing as of the date of the ~ ~ ~ . .....:
merger, (approximately 1.5 million dollars) shall be transferred on . ---~ . ~~- - -- -
the date of the merger to the Fund." Note: The Fund is the '-. `_ ___:_-._...._ _- :. _: .
Jacksonville Police and Fire Fund. ~- ~ ~ - - ~ ~ ~ ~ - - ~ - ~-- ~ ~~ - ~-- - -- --' ---
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OPTION 2.
FUNDING:
Since the agreement was signed, the City of Jacksonville has made
a decision to allow all Jacksonville Fire employees that ever worked
for the City of Atlantic Beach to buy back their Atlantic Beach fire
service time within the Jacksonville Police and Fire Pension Plan.
Prior AB employees will pay the employee contribution portion for
their period of Atlantic Beach service, i.e., 7%, with the Fund
responsible for the difference. Based upon this additional expense,
the City of Jacksonville is requesting that the City of Atlantic Beach
transfer all assets of the AB Fire Pension Plan.
Amend current agreement with the City of Jacksonville.
If the Commission does not desire to transfer all assets of the AB
Fire Pension Plan to the City of Jacksonville, the current agreement
needs to be changed to indicate that the City of Atlantic Beach .
Employees Retirement Plan will transfer to the Jacksonville Police
and Fire Pension Plan, all liabilities of the Firefighters' portion of
the Retirement Plan. However, only those assets of the plan
necessary to fully fund the actuarial accrued liability for the Atlantic
Beach Firefighters under the Jacksonville Plan shall betransferred -
not all assets.
,.Funds for whichever option is selected are currently witYun the Fire
portion of the City of Atlantic Beach Employees Retirement Plan.
RECONIMENDA.TTON: That Commissioner approve Option 2.
CITY MANAGER: it
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