HomeMy WebLinkAboutAgenda Police Pension 060811C
Agenda
City of Palm Beach Gardens Police Officers'
Pension Fund
SPECIAL MEETING OF 3UNE 8f 2011
LOCATION: City Council Chambers'
10500 North Military Trail
Palm Beach Gardens, FL 33410
TIME: 9 AM
1. Call Meeting To Order
2. Roll Call:
• Lt. Jay Spencer, Chairman
• David Pierson, Secretary
• Jules Barone, Trustee
• Brad Seidensticker, Trustee
• Wayne Sidey, Trustee
3. Review/Discussion of the City Council Presentation Regarding the Analysis of
Public Safety Pensions
4. Other Business
5. Public Comments
6. Adjourn
Next Meeting Date:
Thursday July 21, 2011 @ 9AM
PLEASE NOTE:
Should any interestzd patty seek to appeal any decision of this roar(j with respect to any matter considered at such
meeting or hearing, s/he wife reed a record of the proceedings and for such purpose may reed to ensure that a verbah l
record of the proceedings is made, which record includes the testimony and evidence upon which the appeal ,s to be
based.
In accordance with the Americans with Disabilitie,, Ac:t. of 1996: € e,—.C,: 5 nor, c?ing e sperial arc ours; o abon to partii.;paze
in this meeting shvuid contact the The Pension 2esr.urc:e';enter, t -C." 10 later thus. trur drys; prior to the greeting.
THE LAW OFFICES OF
PERRY & JENSEN, LLC
ANN H. PERRY
aperry@perryjensenlaw.com
MEMORANDUM
To: Board of Trustees
From: Bonni S. Jensen
Subject: Senate Bill 1128
Date: June 3, 2011
BONNI SPATARA JENSEN
bsjensen@perryjensenfaw.com
This week, Patricia Shoemaker with the Municipal Police Officers and Firefighters
Pension Trust Funds' Office sent the attached information sheet regarding SB 1128. As
of this morning, SB 1128 has not yet been presented to the Governor. Even though the
bill is not law, the Pension Trust Funds Office wanted to try to address the many questions
about SB 1128 and its impact on the local plans. Trish indicated that once the bill
becomes law, the information will be updated to show the Chapter number and a
section -by -section analysis. A copy of information sheet is also posted on the Pension
Trust Funds Office website at: www.myflorida.com/frs/mpf.
Please contact me if you have any questions.
400 EXECUTIVE CENTER DRIVE, SUITE 207•: WEST PALM BEACH, FLORIDA 33401-2922
PH: 561.686.6550 >• Fx: 561.686.2802
Senate Bill 1128 made several changes to all Florida's local government defined benefit retirement
plans with amendments to chapter 112, as well as the Municipal Police Officers' and Firefighters'
Retirement Trust Fund plans operating under chapters 175 and 185.
Though this bill has not vet become law, we know you have many questions and want to present
information to help you understand these changes.
Listed below are the key changes made in this legislation:
Overtime, accrued vacation and sick leave payments for pension purposes
Change applies to: all local plans — Chapter 112
• For service earned on or after the "effective date" (July 1, 2011, for non -collectively
bargained service; or the date of entry into the first collective bargaining agreement (CBA)
entered into on or after July 1, 2011, for collectively bargained service), a defined benefit
plan may include up to 300 hours per year of overtime compensation, as specified in the
plan or CBA, but may not include any payments for accrued unused sick or annual leave in
the retirement calculation.
Payments for overtime greater than 300 hours per year or accrued unused annual or sick
leave accrued with service earned before the "effective date" may still be included in
compensation for pension purposes, as provided in the plan document or CBA, even if the
payment is not actually made until on or after the "effective date".
Plan sponsor contributions relating to normal cost
Change applies to: all local plans — Chapter 112
Effective July 1, 2011, a local government sponsor of a defined benefit plan may not reduce
contributions required to fund the normal cost of the plan. If the Actuarially Required
Contribution is less than the normal cost, employer contributions must at least equal the
normal cost.
This change in funding will require actuarial review and must be funded in accordance with
chapter 60T-1.004(4), F.A.C. The minimum funding requirement must begin no later than
the first day of the next fiscal year for the plan.
Overtime, accrued vacation and sick leave payments for pension purposes (175/185 specific)
Change applies to: local Police Officer and Firefighter pension plans — Chapters 175 & 185
There are no changes to the definition of "compensation" or "salary" for service earned
prior to the "effective date".
• Police Plans continue to require 300 hours of overtime in the retirement calculation as a
minimum benefit. Fire Plans may include up to 300 hours.
• For service earned on or after the "effective date", a Chapter 175 or 185 plan may include
up to 300 hours per year of overtime compensation, as specified in the plan or CBA, but
may not include any payments for accrued unused sick or annual leave in the retirement
calculation.
Payments for overtime greater than 300 hours per year or accrued unused annual or sick
leave accrued with service earned before the "effective date" may still be included in
compensation for pension purposes, as provided in the plan document or CBA, even if the
payment is not actually made until on or after the "effective date".
Board of Trustees — makeup of the board of trustees
Change applies to: local Police Officer and Firefighter pension plans — Chapters 175 & 185
• This amendment only applies to those local law plans in effect on June 30, 1986 having a
higher than 40% employee representation on the board. For these boards that were
grandfathered in under the amendments in 1986, the City may now change the designated
municipal representative on the board. Such municipal representatives must continue to be
residents of the municipality. This change may not reduce the membership percentage of
firefighters, police officers, or the municipal representatives on the board.
Employee Contribution increases
Change applies to: local Police Officer and Firefighter pension plans — Chapters 175 & 185
• As of the "effective date", employee contributions may be increased by consent of the
members' collective bargaining unit, or if none, by majority consent of the police officers
and firefighters. Increases in employee contributions are no longer contingent upon
providing greater benefits.
Collectively Bargained Benefits & Non -collectively Bargained Benefits — Effective Date
Change applies to: all local plans — Chapter 112, 175 & 185
• Where the members are represented by a collective bargaining agent (whether the CBA
includes pension benefits or not) these provisions are effective on the date of entry into the
first CBA entered into on or after July 1, 2011.
For Chapters 175 & 185 plans, if some of the police and firefighters are represented by a
collective bargaining agent, then the effective date is the date of entry into the first CBA
entered into on or after July 1, 2011 for all police and firefighters regardless of whether they
are members of the collective bargaining unit or not.
In cities/districts where the members are not represented by a collective bargaining agent,
the effective date shall be July 1, 2011.
If you have questions regarding these changes, please call the Municipal Police Officers' and
Firefighters' Retirement Fund Office at (850) 922-0667 or toll free (877) 738-6737.
May 31, 2011
Cavanaugh Macdonald
CONS ULTING,LLC
The exper(ence and dedication You deserve
April 13, 2011
Mr. Allan Owens, CPA, CGFO
Finance Administrator
City of Palm Beach Gardens
10500 N. Military Trail
Palm Beach Gardens, FL 33410
RE: Cost Reductions for Public Safety Plans
Dear Allan:
As requested, we have estimated the impact of certain changes in the public safety pensions plans. The
goal is to obtain savings and retain as much State funding through Chapters 175 and 185 of the Florida
statutes as possible.
Payroll data was supplied to us by the City in order to estimate the reduction in costs that can be obtained
by redefining pensionable earnings. The revised definition of pensionable earnings was base pay plus
overtime up to the minimum required based on the Florida statutes. Actual overtime pay in the data
supplied was in the 6% to 7% range of base pay for both the police and firefighters. We have assumed
overtime pay will be 10% of base pay for purposes of this study.
In addition to the redefinition of pensionable earnings, there will no longer be cost of living adjustments
(COLA). After that, we were asked to determine what reduction in benefit multiplier would be needed to
obtain the savings.
As before, these estimates are not based on actuarial calculations using actual census data but are based
on the 2009 GRS actuarial reports and asset information sent by the City and our experience analyzing
benefit changes. We understand the changes in pension benefits discussed in this letter are subject to
collective bargaining.
As discussed above, part of the goal of the plan changes is to retain as much as possible the State
premium tax distributions to offset the City's pension contributions. Establishing a two tier plan with
reduced benefits for new hires and reduced future service benefits for current members appears to be
permitted by the State provided the new tier of benefits meets the Chapter 175/185 minimums and as long
as the new benefits do not fall below the plans' level of benefits in 1999. Also, if benefit changes reduce
any benefits increased since 1999 using premium tax revenues, the allowable State offset would be
decreased by the corresponding premium tax amount. If allowed by the State, and agreed to by the
unions, under this approach the City could continue to use a portion of premium tax base amounts to
offset future contributions.
Mr. Allan Owens, CPA, CGFO
April 13, 2011
Page 2
N
Generally, there are no clear rules on the flexibility or constraints employers have on making pension
benefit changes to fire and police plans if they want to continue receiving the Chapter 175 and 185
moneys. The requirements are subject to the interpretation of Chapters 175 and 185 by the Florida
Division of Retirement. We strongly recommend the City seek legal counsel on this issue.
Firefighters Pension Fund
The cost savings due to reducing pensionable pay to base pay plus expected overtime and eliminating the
COLA are shown in the following table:
Fiscal Year
Baseline (With Asset Loss
Recognition)
With Pay and COLA
Changes Only
Change
2010/2011
$3,745,497
$3,745,497
$0
2011/2012
$4,003,809
$2,864,607
($1,139,202)
2012/2013
$4,281,575
$3,091,109
($1,190,466)
2013/2014
$4,507,129
$3,263,091
($1,244,038)
2014/2015
$4,714,205
$3,414,187
($1,300,018)
2015/2016
$4,929,977
$3,571,457
$1,358,520)
2016/2017
$5,152,904
$3,733,251
($1,419,653)
2017/2018
$5,385,090
$3,901,552
($1,483,538)
2018/2019
$5,627,556
$4,077,260
($1,550,296)
2019/2020
$5,880,840
$4,260,780
$1,620,060)
2020/2021
$6,145,478
$4,452,516
$1,692,962
As a result of benefit improvements effective October 1, 2003 which among other things provided for a
COLA, 2% of payroll (approximately $200,000 per year) is deducted from the Chapter 175 tax revenues
and used by the City to offset its contribution to the Pension Fund. The balance of the Chapter 175 tax
revenues (currently about $450,000 per year) is deposited in the Share Plan. As a result of the elimination
of the COLA, the City will no longer be able to use the 2% of payroll as an offset to its pension
contributions. Therefore, we have assumed the Chapter 175 distributions to the plan would cease as a
result of these changes. The change in the definition of pensionable earnings and the elimination of the
COLA decrease costs enough to achieve over $1,000,000 in savings the first year without decreasing the
firefighter multiplier.
Police Officers' Pension Fund
As mentioned in our March 4 letter, when reviewing the actuarial report, we were unable to determine
what the amortization period for plan changes is in the police officers' pension fund. We have calculated
the impact of the proposed changes over both a 15 year amortization period and a 30 year amortization
period.
The cost savings due to reducing pensionable pay to base pay plus expected overtime, eliminating any
COLA, and reducing the multiplier to 3.1% with a 15 year amortization period are shown in the following
16
•
Mr. Allan Owens, CPA, CGFO
April 13, 2011
Page 3
LI
table. Under this scenario we have assumed the Chapter 185 distributions to the plan would decrease
from $412,624 to $230,855 per year because of these changes. The amount of $230,855 appears to
represent the base amount to provide the State Chapter 99-1 minimum benefits plus perhaps the cost to
provide an increase in the benefit multiplier from 2.65% to 3% adopted in 2001. The City would lose the
remaining State moneys which were used to provide extra benefits that would be eliminated with the
benefit reductions.
Fiscal Year
With Asset Loss Recognition
With Pay Changes and 3.1%
Multiplier
Change
2010/2011
$3,885,572
$3,885,572
$0
2011 /2012
$4,165,577
$3,169,098
($996,479)
2012/2013
$4,450,283
$3,394,890
($1,055,393)
2013/2014
$4,741,412
$3,624,160
($1,117,252)
2014/2015
$5,040,380
$3,858,176
$1,182,204
2015/2016
$5,348,520
$4,098,116
($1,250,404)
2016/2017
$5,667,098
$4,345,085
($1,322,013)
2017/2018
$5,997,332
$4,600,129
($1,397,203)
2018/2019
$6,340,403
$4,864,250
($1,476,153)
2019/2020
$6,697,090
$5,138,040
($1,559,050
2020/2021
$7,069,271
$5,423,180
($1,646,091)
The cost savings due to reducing pensionable pay to base pay plus expected overtime, eliminating any
COLA, and reducing the multiplier to 2.85% with a 30 year amortization period are shown in the
following table. Under this scenario we have assumed the City would still be allowed to use State
moneys up to $230,855 per year to offset its pension contributions. The amount of $230,855 may have to
be reduced if it includes the cost of the increase in the multiplier adopted in 2001 from 2.65% to 3%.
Fiscal Year
With Asset Loss Recognition
With Pay Changes and 2.85%
Multiplier
Change
2010/2011
$3,885,572
$3,885,572
$0
2011/2012
$4,165,577
$3,137,515
($1,028,062)
2012/2013
$4,450,283
$3,361,727
($1,088,556)
2013/2014
$4,741,412
$3,589,340
($1,152,072)
2014/2015
$5,040,380
$3,821,615
$1,218,765
2015/2016
$5,348,520
$4,059,727
($1,288,793)
2016/2017
$5,667,098
$4,304,775
($1,362,323)
2017/2018
$5,997,332
$4,557,804
($1,439,528)
2018/2019
$6,340,403
$4,819,810
$1,520,593
2019/2020
$6,697,090
$5,091,377
$1,605,713
2020/2021
$7,069,271
$5,374,183
($1,695,088)
The multiplier reduction for the police plan is less under the 15 year amortization than the 30 year
amortization. This is because the redefinition of pensionable earnings and the reduction in multiplier
h
Mr. Allan Owens, CPA, CGFO
April 13, 2011
Page 4
EA
decrease the unfunded actuarial accrued liability (UAAL) so the new amortization payments are negative
and reduce the contribution amount. The negative payments are larger when amortized over 15 years so
the benefit multiplier reduction is minimized. Since we are projecting the change in cost for 10 years
only, you do not see that the cost savings under the 15 year amortization diminish after 15 years while the
cost savings under the 30 year scenario continue for 30 years.
Other Proposed Changes
There were some other requested changes including reducing the maximum multiplier (currently 100%
for police and 99% for firefighters). The savings from this type of change are hard to predict. Total
pension amounts would decrease but the incentive to keep working once the maximum multiplier is
reached is severely eroded. Many members would retire earlier than they would have under the prior
maximum which increases costs.
Another proposed change was to eliminate the service based retirement eligibility provisions (25 years of
service for firefighters and 20 years of service for police officers). Elimination of these would generally
decrease costs due to the delay in benefit commencement for those who would have retired under these
provisions. However, the plans could suffer losses if there is a large amount of previously unexpected
retirements due to the pending implementation of the changes.
Changes to the DROP were also mentioned as possible areas of modification. The interest earned on
DROP accounts is probably not significant enough to materially affect plan results. The change in costs
due to the elimination of DROP is hard to predict for public safety plans. Much of it depends on whether
retirement patterns are changed by it. For general employee plans, there is usually a savings when DROP
is eliminated due to lower multipliers and longer careers of general employees.
Summary
The proposed changes to the public safety plans include using base pay plus expected overtime for
pensionable earnings and eliminating all COLAs. After those reductions, we were asked to calculate
benefit multipliers that would be needed to obtain desired savings. The goal is to maximize qualification
for State monies under Chapters 175 and 185 of the Florida statutes.
The firefighter pension fund would realize over $1,000,000 in savings the first year with no reduction in
the multiplier but with elimination of the State moneys to offset City contributions. This is because of the
elimination of the current prefunded 3% COLA as well as the redefinition of pensionable earnings. This
is not the case for the police officers' plan because they do not have a prefunded COLA. The change to
the multiplier and the available State offset for the police officers' pension fund is dependent on the
amortization period used. When using a 15 year amortization of the changes, a reduction from 3.5% to
3.1% is required to obtain the desired savings while still retaining a portion of the State premium tax
distribution. When amortized over 30 years, the police multiplier needs to be reduced from 3.5% to
2.85% in addition to losing a portion of the State moneys in order to achieve the desired savings.
a
Mr. Allan Owens, CPA, CGFO
April 13, 2011
Page 5
We have assumed the continuation of the increasing payroll amortization methods used by the plan
actuaries. Changing the definition of pensionable earnings will interrupt the growth of payroll which
could require permission from the State to continue with the increasing payroll method.
As previously discussed, the results of this study should not be relied upon to make a final determination
of cost savings. We would be happy to work with the City, and/or pension boards and pension actuary to
analyze specific alternatives and prepare the true actuarial impact of the benefit changes based on the
plans' census and financial data used in the October 1, 2010 actuarial valuations.
In the meantime if you have any questions, do not hesitate to give us a call.
Sincerely,
Jose I. Fernandez, ASA, EA, FCA, MAAA
Principal and Consulting Actuary
5:\Palm Beach Gardens, City of\Lose5ome5t$Save.doc
Jonathan T. Craven, ASA, EA, FCA, MAAA
Senior Actuary
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Changes Analyzed
• Pensionable earnings to include only base pay
• Eliminate COLA in Fire Plan; no change in
multiplier (3%)
• Reduce Police Pension multiplier to 3.1 %from
3.5%
Retain two plans; continue to participate in
'. Chapters 175 and 185
Assumes new benefits apply to current and new
employees for future service (two tier plan)
— Total estimated savings year 1 >$2.IM
*1
Other Possible Savings (need
detailed impact study)
• Reduce maximum annual benefit to 75%
(currently 100% Police, 99% Fire)
• Eliminate service based retirement eligibl'
(currently 25 yrs for Fire, 20 yrs for Polic
• Raise retirement age to 59 from 52
• Eliminate interest guarantee in DROP
— Options would be: 1) Earn what fund E
2) Self -directed investment option
— Total estimated savings year I - TBD
o
to
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4
- 0)
t
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Chapter 175 and 185
Considerations
• Does not appear legislature will make
substantial changes, other than definiti(
earnings and increasing member contril
• In addition, benefits
statutory minimums
whichever is greater
cannot be less thar
or levels in 1999,
• Therefore, the following benefits cannc
reduced
Compensation defined as all W-2 income
— Retirement age of 52 with 10 years servicE
— Service based retirement in both plans (20
25 and out)
Chapter 175 and 185
Considerations
Must comply with statutory definitions of
compensable pay and overtime (different for
police and fire)
City's use of funds was frozen in 1999; future
increases in dollars had to be used for
additional benefits
Plans currently receive about $1 M annuall
_• Of this, only $235,000 can be used to offset
City contributions
; . luaki.
Recommended Plan
• Staff recommends opting out of the 175 any
185 funding program
More flexibility to design a pension plan th
equal for both firefighters and police office
Additional savings could be realized by
establishing one plan, with one board
'i • Eliminates need for two investment manage
� attorneys, actuaries, auditors, and investme
monitors
V 0 R.,
6 2
k?4WO "I, INNE11roll
LJOne plan for both police officers and firefi
LJOpt out of Chapters 175 and 185
L32.75% multiplier
LJNo-COLA
LIPensionable earnings base pay only
LIMaximum benefit 75% of average final
compensation
LJ Retirement age 59 with 10 years of service ad
LJEliminate service based retirement (i.e., 20 years
and out for police; 25 and out _for firefighters)
Comparison of Plans
Multiplier
Pensionable
COLA
Retirement
Maximum
Service Based
Earnings
Age
Benefit
Retirement
Current Plan
Police
3.5%
All W-2 income
None
52 With 10 yrs
100% of AFC
20 and out
service
Fire
3%
All W 2 Income
3%
52 With 10 yrs
99% of AFC
25 and out
service
FRS
3%
Base pay plus OT
3%
60 With 8 yrs
100%
30 and out
up to 300 hrs./no
service
unused leave
Study
Police
3.1%
Base pay plus OT
None
59 With 10 yrs
75%
None
up to 300 hrs./no
service
other income
Fire
3%
Base pay plus OT
None
59 With 10 yrs
75%
None
up to 300 hrs./no
service
other income
Recommended
2.75%
Base pay only
None
59 With 10 yrs
service
75%
None
(Police & Firei
Town of Palm
1.25% plus a
Base pay only
None
65 With 10 yrs
No maximum
None
Beach
- --- ----- -
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service
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° What a Ride!
Legislative Changes to Governmental
Pensions in Florida
Bonni S. Jensen
The Law Offices Of Perry & Jensen, LLC
400 Executive Center Drive, Suite 207
West Palm Beach, Florida 33401
561-686-6550/bsjensen@perryjensenlaw.com
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And then there were 2
• SB 1128 — addresses municipal,
police and firefighter pension
plans
• HB 2 100 — addresses the Florida
Retirement System ("FRS")
9
A #
SB 1128 — Section I— 112.63
• Actuarial reports and statements of
actuarial impact review.
• Requires Plans to disclose the present value
of the accrued benefits using the FRS rate of
return.
• Currently, the FRS rate is 7.75%.
• Accrued benefits include vested and non -
vested as well as the total benefits.
• Designed to promote comparability of plans.
4
IMPACT
• Will require a new page to the actuarial
impact statement.
• State will provide the FRS rate of return
on the state website.
• Calculation is performed using FASB 35.
5
SB 1128 — Section 2 — 11200" 6
New subsection (11) which provides that:
• For service earned after July I, 2011 OR
• Service earned under a collective bargaining
agreement entered into on or after July I,
2011
o Benefits may be calculated using
• Up to 300 hours of overtime (as provided for by
the CBA or the Plan)
• But not payments for accrued unused sick or annual
leave
2
IMPACT
• Applies only to defined benefit plans.
• Does not apply to FRS.
• Bargaining parties need to be advised that
for the next collective bargaining agreement,
exclusion of sick and vacation hours needs
to be bargained.
• Overtime over 300 hours may not be
included
o If more than 300 hours can be worked, then
system to exclude those hours needs to be
designed.
7
SB 1128 — Section 2— 112066
• New subsection (12) which provides that:
o Actuarial or cash surplus may not be used to
pay expenses outside of the Plan.
1.1
SB 1128 — Section 2— 112466
New subsection (13) which provides that:
• An employer must annually pay at least the
normal cost.
• Sections 175.091 (1)(d) and 185.07(i)(d)
requires the municipality to pay the normal
cost and the amount required to fund any
actuarial deficiency shown by an actuarial
valuation.
o This section does not apply to FRS.
9
SB 1128 — Section 3 — 112*bbs
• Duties of Management Services
• Management services will provide a fact sheet
for each governmental defined benefit plan.
• Fact sheet will summarize the Alan's actuarial
status.
o Fact sheet will be posted on the Management
services website.
Iro
SB 1128 — Secs. 4 & 8 — 175.032 &
185.02 Definition of Compensation
• For service earned and collective bargaining
agreements in place before July 1, 2011,
definition of compensation remains the same as
it was before July 1, 2011.
• For service earned after July 1, 2011 OR Service
earned under a collective bargaining agreement
entered into on or after July I, 2011
o Benefits may be calculated using
• Up to 300 hours of overtime (as provided for by
the CBA or the Plan)
• But not payments for accrued unused sick or annual
leave
•
r
IMPACT
• No change to minimums - Overtime is still a
minimum for Police Officers but not for
Firefighters.
• If no union representation, law is effective
July 1, 2011.
• If there is a union contract and it addresses
pensions, law takes effect when the new
agreement is entered into.
• There is still discussion about effective date
if the contract does not expressly include
pensions.
IN
SB 1128 — Secs. 5 & 9 — 175.061 and
185.05 Board of Trustees
• Applies to Boards in place on June 30, 1986
that have higher employee percentage than
40%.
• Allows only the municipal seat designations
to be changed (For example replace the
Mayor on the Board with another City
representative).
• Firefighter, Police Officer and municipal
representation percentages cannot be
changed.
• Municipal
resident.
representative must still be a
IN
t
SB 1128 — Secs. 6& 10 175.091
and 185.07
• Allows employee contributions to be
increased without corresponding increase
in benefits if:
o The collective bargaining representative
consents OR, if not represented by a Union
o A majority of the members of the Fund
approve.
V
t
Financial Rating of Pensions
Department of Management Services is
to create a plan to rate local government
defined benefits pension plans.
• Local Governmental Plans shall cooperate
in providing necessary information.
• Plan shall be submitted by January 1, 2012
to the Governor, the Speaker of the
House and the President of the Senate.
R
Financial Rating of Pensions
• Considerations:
• Current and future unfunded liabilities
• Net asset value, managed returns and funded
ratio
• Metrics related to sustainability, including
employer contributions percentage of payroll
• Municipal Bond ratings
• Whether there is a reduced contribution rate
when the plan has an actuarial surplus
• Whether the actuarial surplus is used for
obligations outside of the pension plan
V
•
Task Force on Public Employee
Disability Presumptions
• Task Force to look at the presumptions
contained in Florida Statutes 112.18,
175.23 1, and 185.34.
• Task force will be appointed on or before
July 15,2011 and will meet for the first
time before August 15, 2011.
• Department of Financial Services shall
provide administrative support.
• Report shall be submitted by January
20120
ON
V f
Task Force on Public Employee
Disability Presumptions= Members
• 3 appointed by the Senate President:
® One Attorney who represents Plaintiffs
o One representative of organized labor who is in a 175 plan
o A representative from the Florida Association of Counties
• 3 appointed by the Speaker of the House:
® One Attorney who represents Defendants
o One representative of organized labor who is in a 185 plan
o A representative from the Florida League of Cities
• A member employed by the Division of Retirement with
experience in local government, appointed by the Governor
• A member employed by Department of Financial Services
with expertise in state risk management appointed by the
Chief Financial Officer
•
Task Force on Public Employee
Disability Presumptions
• Considerations:
• Data related to operation of presumptions
and fiscal impact to employers in pensions and
workers compensation;
• Presumptions in other states;
Proposals for change; and
Evidentiary standards and burden of proof
including consideration of blood cholesterol
level, body mass index, history of tobacco and
alcohol use and other medical conditions.
IN
L " �
HB 2100
• 3% employee contribution, beginning July I,
2011. DROP participants will not contribute
because they are retired for benefit accrual
purposes.
• DROP interest rate is reduced to 1.3%
(from 6.5%) for any member entering DROP
on and after July 1, 2011.
• Cost -of -Living increase for service earned
on and after July I, 2011 is eliminated. The
COLA crediting will return effective July I,
2016, if funding is provided.
PH
a �' •
HB 2 100 — New Hires after 7/ I /11
• Vesting 8 years — increased from 6 years
• Average Final Compensation period 8
years — increased from 5 years
• Normal Retirement increased to:
• Special Risk —Age 60 with 8 years of service
or 30 years of service at any age
• All Other Classes —Age 65 with 8 years of
service or 33 years of service at any age
a
2011 FRS Contribution Rates -
Employer
• Regular Class
• Special Risk
• Special Risk Administrative
• Elected Officers — State
• Elected Officers —Judges
• Elected Officers — County
• Senior Mgt
• DROP
3.28%
10.21%
4.07%
7.02%
9.78%
9.27%
4.81%
3.31%
01
LI a
2011 FRS Contribution Rates —
Unfunded Actuarial Accrued Liability
• Regular Class
• Special Risk
• Special Risk Administrative
• Elected Officers — State
• Elected Officers —Judges
• Elected Officers — County
• Senior Mgt
• DROP
0.49%
2.75%
0.83%
0.88%
0.77%
0.73%
0.32%
0.00%
ix
C 1. S
2012 FRS Contribution Rates -
Employer
• Regular Class
• Special Risk
• Special Risk Administrative
• Elected Officers — State
• Elected Officers —Judges
• Elected Officers — County
• Senior Mgt
• DROP
3.28%
10.21%
4.07%
7.02%
9.78%
9.27%
4.81%
3.31%
24
2012 FRS Contribution Rates Unfunded Actuarial Accrued Liability
• Regular Class
• Special Risk
• Special Risk Administrative
• Elected Officers — State
• Elected Officers —Judges
• Elected Officers — County
• Senior Mgt
• DROP
2.16%
8.21%
21.40%
21.76%
12.86%
22.05%
10.51%
6.36%
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