HomeMy Public PortalAboutOrd 1029 - General Employees Retirement Plan4
ORDINANCE NO. 1029
AN ORDINANCE OF THE CITY OF CRESTVIEW
AMENDING ORDINANCE NO. 781, ESTABLISHING THE
CITY OF CRESTVIEW GENERAL EMPLOYEES'
RETIREMENT PLAN, AS SUBSEQUENTLY AMENDED;
AMENDING SECTION 1, DEFINITIONS; AMENDING
SECTION 6, BENEFIT AMOUNTS AND ELIGIBILITY;
AMENDING SECTION 26, DEFERRED RETIREMENT
OPTION PLAN; PROVIDING SEVERABILITY OF
PROVISIONS; REPEALING ALL ORDINANCES IN
CONFLICT HEREWITH AND PROVIDING AN
EFFECTIVE DATE.
BE IT ORDAINED BY THE CITY COUNCIL OF THE CITY OF CRESTVIEW,
FLORIDA;
SECTION 1. That Ordinance No. 781 of the City of Crestview, establishing the City of
Crestview General Employees' Retirement Plan, as subsequently amended, is further amended by
amending section 1, Definitions, by amending the definition of Credited Service, to read as
follows:
CreditedServicemeans the total number of years and fractional parts of years of service
as a General Employee with Member contributions, when required, omitting intervening years or
fractional parts of years when such Member was not employed by the City as a General
Employee. A Member may voluntarily leave his contribution in the Fund for a period of five (5)
years after leaving the employ of the City pending the possibility of being reemployed as a
General Employee, and remaining employed for a period of not less than three (3) one (1) years,
without losing credit for the time that he was a Member of the System. If the Member does not
remain employed for a period of three (3) one year (1) years upon reemployment within five (5)
years, then the Accumulated Contribution will be returned upon his written request.
In the event that a Member of this System has also accumulated credited service in
another pension system maintained by the City, then such other credited service shall be used in
determining vesting as provided for in Section 9, and for determining eligibility for early or
normal retirement in each system. Such other credited service shall not be considered in
determining benefits under this System, but shall be considered for determining benefits under
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such other system using the benefit accrual rate in effect in such other system at the time of the
Member's termination or retirement from the City of Crestview. Only his Credited Service under
this System on or after his date of membership in this System shall be considered for this
System's benefit calculation. The benefit calculation for a Member of this System who is or
becomes eligible for a benefit from this System after he has become a member of another
pension system maintained by the City, shall be based upon the Member's Average Final
Compensation and benefit accrual rate in effect on the date of Member's termination of
employment or retirement from the City.
The years or fractional parts of a year that a General Employee serves in the military
service of the Armed Forces of the United States, the United States Merchant Marine or the
United States Coast Guard. voluntarily or involuntarily, after separation from employment as a
General Employee with the City to perform training or service, shall be added to his years of
Credited Service for all purposes, including vesting, provided that:
A. The General Employee must return to his employment as a General Employee
within one (1) year from the earlier of the date of his military discharge or his
release from service.
B. The General Employee deposits into the Fund the same sum that the Member
would have contributed if he had remained a General Employee during his
absence. The General Employee must deposit all missed contributions within a
period equal to three (3) times the period of military service, but not more than
five (5) years or he will forfeit the right to receive Credited Service for his
military service pursuant to this Section.
C. The maximum credit for military service pursuant to this Section shall be five (5)
years.
D. In order to qualify for the purchase of Credited Service pursuant to this Section,
the General Employee must have been discharged or released from service under
honorable conditions.
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E. This Section is intended to satisfy the minimum requirements of the Uniformed
Services Employment and Reemployment Rights Act (USERRA), (P.L. 103-353).
To the extent that this Section does not meet the minimum standards of USERRA,
as it may be amended from time to time, the minimum standards shall apply.
SECTION 2. That Ordinance No. 781 of the City of Crestview, establishing the City of
Crestview General Employees' Retirement Plan, as subsequently amended, is further amended by
amending Section 6, Benefit Amounts and Eligibility, subsection 2. Normal Retirement Benefit,
to read as follows:
2. Normal Retirement Benefit.
A Member retiring hereunder on or after his normal retirement date shall receive a
monthly benefit which shall commence on his Retirement and be continued thereafter during
Member's lifetime, ceasing upon death. The monthly retirement benefit shall equal two and
sixty-four hundredths percent (2.64%) of Average Final
Compensation for each year of Credited Service, plus two -hundred fifteen dollars ($215) per
month additional benefit on each normal retirement benefit payment.
SECTION 3. That Ordinance No. 781 of the City of Crestview, establishing the City of
Crestview General Employees' Retirement Plan, as subsequently amended, is further amended by
amending section 26, Deferred Retirement Option Plan, to read as follows:
SECTION 26. DEFERRED RETIREMENT OPTION PLAN.
1. Definitions.
As used in this Section 26, the following definitions apply:"
A. "DROP" -- The City of Crestview General Employees' Deferred
Retirement Option Plan.
B. "DROP Account" -- The account established for each DROP participant
under subsection 3.
2. Participation.
A. Eligibility to Participate.
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In lieu of terminating his employment as a General Employee, any
Member who is eligible for normal retirement under the System may elect
to defer receipt of such service retirement pension and to participate in the
DROP provided that the election to participate in the- DROP is made
the election to participate is made within twelve (12) months from the
B. Election to Participate.
A Member's election to participate in the DROP must be made in writing
in a time and manner determined by the Board and shall be effective on
the first day of the first calendar month which is at least fifteen (15)
business days after it is received by the Board.
C. Period of Participation.
A Member who elects to participate in the DROP under subsection 2.B.,
shall participate in the DROP for a period not to exceed sixty (60) months
beginning at the time his election to participate in the DROP first becomes
effective. A Member may participate only once.
D. Termination of Participation.
(1) A Member participating in the DROP shall cease participating in
the DROP by:
(a) electing in writing, in a time and manner determined by the
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(b) () continuing to be employed as a General Employee at the
end of his period of participation in the DROP as
determined under subsection 2.C.; or
(c) Lb j terminating his employment as a General Employee.
(2) Upon the Member's termination of participation in the DROP,
pursuant to subsection (1),(a) er-(-b) above, all amounts provided
for in subsection 3.B., including monthly benefits and investment
earnings or losses, shall cease to be transferred from the System to
his DROP Account. Any amounts remaining in his DROP
Account shall be paid to him in accordance with the provisions of
subsection 4. when he terminates his employment as a General
Employee.
(3) A Member who ciccts to terminates his participation in the DROP
under subsection 2.D. shall not be permitted to again become a
participant in the DROP.
E. Effect of DROP Participation on the System.
(1) A Member's Credited Service and his accrued benefit under the
System shall be determined on the date his election to participate
in the DROP first becomes effective. The Member shall not accrue
any additional Credited Service or any additional benefits under
the System (except for any additional benefits provided under any
cost -of -living adjustment in the System) while he is a participant in
the DROP. After a Member commences participation, he shall not
be permitted to again contribute to the System nor shall he be
eligible for disability or pre -retirement death benefits.
(2) No amounts shall be paid to a Member from the System while the
Member is a participant in the DROP. Unless otherwise specified
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in the System, if a Members participation in the
DROP is terminated other than by terminating his employment as a
General Employee, no amounts shall be paid to him from the
System until he terminates his employment as a General
Employee. Unless otherwise specified in the System, amounts
transferred from the System to the Member's DROP Account shall
be paid directly to the member only on the termination of his
employment as a General Employee.
3. Funding.
A. Establishment of DROP Account.
A DROP Account shall be established for each Member participating in
the DROP. A Member's DROP Account shall consist of amounts
transferred to the DROP under subsection 3.B., and earnings on those
amounts.
B. Transfers From Retirement System.
(1) As of the first day of each month of a Member's period of
participation in the DROP, the monthly retirement benefit he
would have received under the System had he terminated his
employment as a General Employee and elected to receive
monthly benefit payments thereunder shall be transferred to his
DROP Account, except as otherwise provided for in subsection
2.D.(2). A Member's period of participation in the DROP shall be
determined in accordance with the provisions of subsections 2.C.
and 2.D., but in no event shall it continue past the date he
terminates his employment as a General Employee.
(2) Except as otherwise provided in subsection 2.D.(2), a Member's
DROP Account under this subsection 3.B. shall be debited or
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credited with earnings after each fiscal year quarter. The average
daily balance in a Member's DROP Account shall be credited or
debited at a rate equal to the actual net rate of investment return
realized by the System for that quarter. "Net investment return"
for the purpose of this paragraph is the total return of the assets in
which the Member's DROP Account is invested by the Board net
of brokerage commissions, transaction costs and management fees.
(3) A Member's DROP Account shall only be credited or debited with
earnings and monthly benefits while the Member is a participant in
the DROP and after the Member dies, retires or terminates his
employment as a General Employee. If a Member is employed by
the City after
(5) years, then
or after participating in the DROP for five
beginning with the Member's 61st
month of DROP participation, whichever occurs first, the
Member's DROP Account will no longer be credited or debited
with earnings, nor will monthly benefits be transferred to the
DROP account. All such non -transferred amounts shall be
forfeited and continue to be forfeited while the Member is
employed by the City. A Member employed by the City after five
(5) years of DROP participation will still not be eligible for pre -
retirement death or disability benefits, nor will be accrue additional
Credited Service.
4. Distribution of DROP Accounts on Termination of Employment.
A. Eligibility for Benefits.
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A Member shall receive the balance in his DROP Account in accordance
with the provisions of this subsection 4. upon his termination of
employment as a General Employee. Except as provided in subsection
4.D., no amounts shall be paid to a Member from the DROP prior to his
termination of employment as a General Employee.
B. Form of Distribution.
(1)
Unless the Member elects otherwise, distribution of his DROP
Account shall be made in a cash lump sum, subject to the direct
rollover provisions set forth in subsection 4.G. A Member may,
however, elect, in such time and manner as the Board shall
prescribe, that his DROP distribution be used to purchase a
nonforfeitable fixed annuity payable in such form as the Member
may elect. Elections under this paragraph shall be in writing and
shall be made in such time or manner as the Board shall determine.
If the annuity form selected is not a qualified joint and fifty percent
(50%) survivor annuity with the Member's Spouse as the
Beneficiary, the annuity payable to the Member and thereafter to
his Beneficiary shall be subject to the incidental death benefit rule
as described in Section 401(a)(9)(G) of the Code and its applicable
regulations.
(2) If a Member dies before his benefit is paid, his DROP Account
shall be paid to his Beneficiary in such optional form as his
Beneficiary may select. If no Beneficiary designation is made, the
DROP Account shall be distributed to the Member's estate.
C. Date of Payment of Distribution.
(1) Except as otherwise provided in this subsection 4., distribution of a
Member's DROP Account shall be made as soon as
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11111 Hummummun
administratively practicable following the Member's termination of
employment.
(2) In lieu of a distribution as described in paragraph (1) above, a
Member may, in accordance with such procedures as the Board
shall prescribe, elect to have the distribution of his DROP Account
made as of the first day of any month coincident with or following
his termination of employment as a General Employee; provided,
however, payments shall be made before the distribution date
elected by the Member to the extent necessary to comply with the
provisions of subsections 4.D. and 4.F.
D. Aye Seventy and One -Half (,70-1/2) Rey: aired Distribution.
In no event shall the provisions of subsection 4. operate so as to allow the
distribution of a Member's DROP Account to be later than the April 1
following the later of the calendar year in which he terminates his
employment as a General Employee or he attains age seventy and one-half
(70-1/2). In the event a Member is required to receive payment while in
service under the provisions of this subsection D., he shall receive one
lump sum payment on or before his required beginning date equal to his
entire DROP Account balance and annual lump sum payments thereafter
of amounts credited to his DROP Account during each calendar year.
Upon the Member's subsequent termination of employment, payment of
his DROP Account shall be made in accordance with the provisions of
subsection 4.B.
E. Proof of Death and Right of Beneficiary or Other Person.
The Board may require and rely upon such proof of death and such
evidence of the right of any Beneficiary or other person to receive the
value of a deceased Member's DROP Account as the Board may deem
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proper and its determination of the right of that Beneficiary or other
person to receive payment shall be conclusive.
F. Distribution Limitation.
Notwithstanding any other provision of subsection 4., all distributions
from the DROP shall conform to the regulations issued under Section
401(a)(9) of the Code, including the incidental death benefit provisions of
Section 401(a)(9)(G) of the Code. Further, such regulations shall override
any DROP provision that is inconsistent with Section 401(a)(9) of the
Code.
G. Direct Rollover of Certain Distributions.
This subsection applies to distributions made on or after January 1, 1993.
Notwithstanding any provision of the DROP to the contrary that would
otherwise limit a distributee's election under this subsection, a distributee
may elect, at the time and in the manner prescribed by the Board, to have
any portion of an eligible rollover distribution paid directly by the DROP
to an eligible retirement plan specified by the distributee in a direct
rollover as otherwise provided under the System in Section 24, herein
incorporated by reference.
5. Administration of DROP.
A. Board Administers the DROP.
The general administration of the DROP, the responsibility for carrying
out the provisions of the DROP and the responsibility of overseeing the
investment of the DROP's assets shall be placed in the Board. The
members of the Board may appoint from their number such
subcommittees with such powers as they shall determine; may adopt such
administrative procedures and regulations as they deem desirable for the
conduct of their affairs; may authorize one or more of their number or any
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110 1111
agent to execute or deliver any instrument or make any payment on their
behalf; may retain counsel, employ agents and provide for such clerical,
accounting, actuarial and consulting services as they may require in
carrying out the provisions of the DROP; and may allocate among
themselves or delegate to other persons all or such portion of their duties
under the DROP, other than those granted to them as Trustee under any
trust agreement adopted for use in implementing the DROP, as they, in
their sole discretion, shall decide. A Trustee shall not vote on any
question relating exclusively to himself.
B. Individual Accounts. Records and Reports.
The Board shall maintain, or cause to be maintained, records showing the
operation and condition of the DROP, including records showing the
individual balances in each Member's DROP Account, and the Board shall
keep, or cause to be kept, in convenient form such data as may be
necessary for the valuation of the assets and liabilities of the DROP. The
Board shall prepare or cause to be prepared and distributed to Members
participating in the DROP and other individuals or filed with the
appropriate governmental agencies, as the case may be, all necessary
descriptions, reports, information returns, and data required to be
distributed or filed for the DROP pursuant to the Code, the applicable
portions of the Act and any other applicable laws.
C. Establishment of Rules.
Subject to the limitations of the DROP, the Board from time to time shall
establish rules for the administration of the DROP and the transaction of
its business. The Board shall have discretionary authority to construe and
interpret the DROP (including but not limited to determination of an
individual's eligibility for DROP participation, the right and amount of any
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benefit payable under the DROP and the date on which any individual
ceases to be a participant in the DROP). The determination of the Board
as to the interpretation of the DROP or its determination of any disputed
questions shall be conclusive and final to the extent permitted by
applicable law. The Board shall also oversee the investment of the
DROP'S assets.
D. Limitation of Liability.
(1) The Trustees shall not incur any liability individually or on behalf
of any other individuals for any act or failure to act, made in good
faith in relation to the DROP or the funds of the DROP.
(2) Neither the Board nor any Trustee of the Board shall be
responsible for any reports furnished by any expert retained or
employed by the Board, but they shall be entitled to rely thereon as
well as on certificates furnished by an accountant or an actuary,
and on all opinions of counsel. The Board shall be fully protected
with respect to any action taken or suffered by it in good faith in
reliance upon such expert, accountant, actuary or counsel, and all
actions taken or suffered in such reliance shall be conclusive upon
any person with any interest in the DROP.
6. 'General Provisions.
A. Amendment of DROP.
The DROP may be amended by an ordinance of the City at any time and
from time to time, and retroactively if deemed necessary or appropriate, to
amend in whole or in part any or all of the provisions of the DROP.
However, except as otherwise provided by law, no amendment shall make
it possible for any part of the DROP's funds to be used for, or diverted to,
purposes other than for the exclusive benefit of persons entitled to benefits
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under the DROP. No amendment shall be made which has the effect of
decreasing the balance of the DROP Account of any Member.
B. Facility of Payment.
If the Board shall find that a Member or other person entitled to a benefit
under the DROP is unable to care for his affairs because of illness or
accident or is a minor, the Board may direct that any benefit due him,
unless claim shall have been made for the benefit by a duly appointed
legal representative, be paid to his Spouse, a child, a parent or other blood
relative, or to a person with whom he resides. Any payment so made shall
be a complete discharge of the liabilities of the DROP for that benefit.
C. Information.
Each Member, Beneficiary or other person entitled to a benefit, before any
benefit shall be payable to him or on his account under the DROP, shall
file with the Board the information that it shall require to establish his
rights and benefits under the DROP.
D. Prevention of Escheat.
If the Board cannot ascertain the whereabouts of any person to whom a
payment is due under the DROP, the Board may, no earlier than three (3)
years from the date such payment is due, mail a notice of such due and
owing payment to the last known address of such person, as shown on the
records of the Board or the City. If such person has not made written
claim therefor within three (3) months of the date of the mailing, the
Board may, if it so elects and upon receiving advice from counsel to the
DROP, direct that such payment and all remaining payments otherwise
due such person be canceled on the records of the DROP. Upon such
cancellation, the DROP shall have no further liability therefor except that,
in the event such person or his Beneficiary later notifies the Board of his
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whereabouts and requests the payment or payments due to him under the
DROP, the amount so applied shall be paid to him in accordance with the
provisions of the DROP.
E. Written Elections. Notification.
(1) Any elections, notifications or designations made by a Member
pursuant to the provisions of the DROP shall be made in writing
and filed with the Board in a time and manner determined by the
Board under rules uniformly applicable to all employees similarly
situated. The Board reserves the right to change from the time and
manner for making notifications, elections or designations by
Members under the DROP if it determines after due deliberation
that such action is justified in that it improves the administration of
the DROP. In the event of a conflict between the provisions for
making an election, notification or designation set forth in the
DROP and such new administrative procedures, those new
administrative procedures shall prevail.
(2) Each Member or Retiree who has a DROP Account shall be
responsible for furnishing the Board with his current address and
any subsequent changes in his address. Any notice required to be
given to a Member or Retiree hereunder shall be deemed given if
directed to him at the last such address given to the Board and
mailed by registered or certified United States mail. If any check
mailed by registered or certified United States mail to such address
is returned, mailing of checks will be suspended until such time as
the Member or Retiree notifies the Board of his address.
F. Benefits Not Guaranteed.
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11111111111111,1111 1111111111111111111111111111111
All benefits payable to a Member from the DROP shall be paid only from
the assets of the Member's DROP Account and neither the City nor the
Board shall have any duty or liability to furnish the DROP with any funds,
securities or other assets except to the extent required by any applicable
law.
G. Construction.
(1) The DROP shall be construed, regulated and administered under
the laws of Florida, except where other applicable law controls.
(2) The titles and headings of the subsections in this Section 26 are for
convenience only. In the case of ambiguity or inconsistency, the
text rather than the titles or headings shall control.
H. Forfeiture of Retirement Benefits.
Nothing in this Section shall be construed to remove DROP participants
from the
ose employment
maxe hate ' b. in motion 22 while employed, will be subject to
f f + � ll + t bone is inelu,.7 DROP L fi+ suan to
the above provisions of law application of any forfeiture provisions
applicable to the system. DROP participants shall be subectoo forfeiture
of all retirement benefits, including DROP benefits.
SECTION 4: Specific authority is hereby granted to codify and incorporate this
Ordinance in the existing Code of Ordinances of the City of Crestview.
SECTION 5: All Ordinances or parts of Ordinances in conflict herewith be and the
same are hereby repealed.
SECTION 6: If any section, subsection, sentence, clause, phrase of this ordinance, or
the particular application thereof shall be held invalid by any court, administrative agency, or
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other body with appropriate jurisdiction, the remaining section, subsection, sentences, clauses, or
phrases under application shall not be affected thereby.
SECTION 7: This Ordinance shall become effective upon adoption.
PASSED AND ADOPTED BY THE CITY COUNCIL OF THE CITY OF
CRESTVIEW, FLORIDA on the ha "day of 2000.
ATTEST:
yh
AL I i' JACKSON, CITY CLERK
APPROVED BY ME THIS /4. .day of
GEORGE I WHITEHURST, MAYOR
Approved as to form:
BEN HOL E , C Y AT
noc\cv\gen\05-16-00.ord
WIII. IAM F. KILPAT:
COUNCIL PRESIDEN
, 2000.
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MEMORANDUM
MEMO TO: City Council
FR: Brenda Crosson. Chairman
RE: Adoption of Ordinance for Benefit Improvement to General Employees Retirement Plan
Date: May 17, 2000
Last year the Board discussed improvement of benefits after the plan actuary advised that the plan is over
funded. The employees/members of the General Employees Retirement Plan met with Mr. Lee Dehner.
Attorney and Ward Foster, Acturary during three member meetings on April 11, 2000 to vote on which
improvement they wished.
During a special meeting the afternoon of April 11, 2000 the Board discussed the date of DROP election
and recommended a change to allow the eligibility date for the DROP to be anytime after the employee is
eligible for normal retirement. This will allow the employee to time the end of their five year period with
the beginning of their social security benefits. They also discussed the requirement of a vested employee to
be re-employed for a three year period to be eligible to receive retirement at the current benefit rate rather
than the benefit rate at which they left service. It was the consensus of the Board that a one year period for
re-employment was a sufficient amount of time and that the three year period unfairly penalized an
employee that returned to work after leaving THEIR money in the fund for the time they were not employed
with the City.
Ward Foster, Actuary for the General Employees Retirement Board has completed his review of the
changes and advises that the benefit improvements will have no financial impact on the City's funding
requirements. The City's contribution rate is currently the minimum allowed which is 5%. The
improvements will change the City's current funding requirement for the plan from 1.1% to 4%. This is
also assuming a 6% yearly wage increase for employees.
Also included is a February 2000 un-audited excerpt of the Compiled Financial Statement prepared by
Allen, Yaglow, and Carr, Inc. indicating that the value of the fund has increased from 5 million dollars in
October 1999 to 7 million in February 2000. We have two excellent funds investment management firms
in place for our retirement funds.
It is the intent of the Board to place the ordinance on the Council Agenda on May 22, 2000, for first
reading. If you have any questions, please let me know.
Respectfully Submitted.
6
Brenda A. Crosson
Chairman
3 Atch.
1. Letter to Definer
2. Letter of no Impact, Foster
3. Excerpt Compiled Financial Statement, Allen Yaglow & Carr
w
City Of CrEstviEW
Chairman
Brenda A. Crosson
Mr. H. Lee Delmer
Christiansen & Dehner, P.A.
63 Sarasota Center Blvd.
Suite 107
Sarasota, Florida 34240
Dear Mr. Dehner:
General Employees' Retirement Plan
Board of Trustees
Post Office Drawer 1209 Telephone No. (850) 682
32
Crestview, Florida 32536 Fax No. (850)682-73159
On April 11, 2000, the General Employees' Board of Trustees held a special meeting, and the
following items were approved:
1. Plan members chose Alternative Benefit Improvement Option F increasing the multiple
from 2.4% to 2.64%. Board recommends adoption of Benefit Improvement Alternative
Option F.
2. Approved amendment to plan pertaining to DROP (Deferred Retirement Option Plan)
Section 26,2.A. Eligibility to Participate. Board requests that the twelve(12)
month
limitation period to participate in the DROP be removed allowing members toenter the
DROP anytime after becoming eligible.
3. Approved amendment to plan pertaining to Section 1, Definition of Credited Service.
Board request change to read as follows: A General Employee may voluntarily leave his ...,
and remaining employed for a period of not less than
wee -(3) y:-.%ar::r one (I) year. without
losing credit.... If the General employee does not remain employed for a period of thr:.e (3)
yes one 1'' year upon reemployment ....
4. Board requests attorney to prepare Ordinance with amendments as requested and
codifying all ordinances previously adopted as soon as possible.
5. Board requests Actuary to provide an Actuarial -Impact Statement pertaining to requested
amendments.
Please E -Mail the amended and codified ordinance to me at bcrosson@co.okaloosa.fl.us. The
Board will hold a special meeting to approve the ordinance and forward it to the Council for
adoption.
Sincerely,
Brenda A. Crosson
1111111 111111
SENT`3Y: FOSTER & FOSTER, INC.;
941 481 0634 ;
MAY -12 1:43PM; PAGE 2/2
TELEPHONE
W41/433-5500
FOSTER & FOSTER, INC.
6201 PRESIDENTIAL COURT, S.W.. SUITE 203
FORT MYERS. FLORIDA 33919
May 12, 2000
VIA FAX and MAIL
Ms. Kathy L. Austin
City of Crestview
General Employees'
Pension Board
P.O. Drawer 1209
Crestview, FL 32536
FACSIMILE
(941) 481-0634
Re: City of Crestview General
Employees' Retirement Plan
Dear Kathy:
We have received Brenda Crosson's memo dated May 11, 2000,
regarding the substantive amendments to the referenced retirement
program and are writing to advise that the formal Actuarial
Impact Statement (dated April 13, 2000) is only required to
identify those Plan changes that have an impact on the funiing
requirements.
It is our opinion that the implementation of the DROP program and
the changes to the "Credited Service" definition will have no
actuarial impact on the funding requirements to the program.
If you have any questions regarding this matter, please let us
know.
Sincerely,
Ward V. Foster, Jr.
WVF/hj a
Enclosures
cc: H. Lee Definer, Board Attorney
CITY OF CRESTVIEW
GENERAL EMPLOYEES' RETIREMENT PLAN
ACTUARIAL IMPACT STATEMENT
April 13, 2000
Attached hereto is a comparison of the impact on the Total
Required Contribution (per Chapter 112, Florida Statutes)
resulting from the implementation of the following benefit
improvements:
1) Increase the benefit rate for all years of service from
2.40% to 2.64%.
The impact of these changes on the annual funding requirements,
determined as of October 1, 1999, is as follows:
Total Required Contribution
% of Total Annual Payroll
Expected Member Contributions
Balance From City
% of Total Annual Payroll
Current
$131,598
7.5%
112,480
19,118
1.1%
Pr000sed
$183,167
10.4%
112,480
70,687
4.0%
Increase
51,569
2.9%
The changes presented herein are in compliance with Part
VII, Chapter 112, Florida Statutes and Section 14, Article X of
the State Constitution.
‘1441/
y'13Loov
Ward V. Foster,! Jr., A.S.A.
Enrolled Actuary #99-2808
STATEMENT OF PLAN ADMINISTRATOR
The prepared information presented herein reflects the
estimated cost of each proposed improvement.
oard of Trustees
Comparative Summary of Principal Valuation Results
Before After
10/1/99 10/1/99
A. Participant Data
Number Included
Actives 89 89
Service Retirees 12 12
Beneficiaries 1 1
Terminated Vested 6 6
Disability Retirees 0 0
Total
108 108
Total Annual Payroll $1,757,502 $1,757,502
Payroll Under Assumed Ret. Age 1,757,502 1,757,502
Annual Rate of Payments to:
Service Retirees $94,141 $94,141
Beneficiaries 2,612 2,612
Terminated Vested 16,181 16,181
Disability Retirees 0 0
B. Assets
Actuarial Value
Market Value
C. Liabilities
$5,166,270
5,47E,681
$5,166,270
5,478,681
Present Value of Benefits
Active Members
Retirement Benefits $3,596,146 $3,889,475
Disability Benefits 159,459 175,405
Death Benefits 34,147 37,562
Vested Benefits : 1,085,310 1,193,841
Refund of Contributions 30,202 30,202
Service Retirees 890,511 890,511
Beneficiaries 32,401 32,401
Terminated Vested 96,790 96,790
Disability Retirees 0 0
Total
$5,924,966 $6,346,187
C. Liabilities - (Continued)
Liabilities Due and Unpaid $0
$0
Present Value Fut Salaries (AA) 10,462,900
10,462,900.
Present Value Fut Salaries (EA) 12,032,700
12,032,700
Present Value of Future
Member Contributions 669,626 669,626
Present Value of Future
Normal Costs (Entry Age) 1,220,263 1,315,671
Actuarial Accrued Liability 5,393,354
5,591,276
Unfunded Actuarial Accrued 227 084
Liability (UAAL) ' 425,006
Before After
10/1/99 10/1/99
D. Actuarial Present Value of Accrued Benefits
Vested Accrued Benefits
Inactives $1,019,702
Actives 607,472
Member Contributions 525,020
Total $2,152,194
Non -vested Accrued Benefits 284,109
Total
$1,019,702
720,721
525,020
$2,265,443
312,520
$284,109 $312,520
Total Present Value Accrued
Benefits $2,436,303 $2,577,963
Increase (Decrease) in Present Value of
Accrued Benefits Attributable to:
Plan Amendments
Assumption Changes $141,660
New Accrued Benefits 0
Benefits Paid 0
Interest 0
Other 0
0
$141,660
E. Pension Cost
Normal Cost (with interest)
% of Total Annual Payroll*
Payment Required to Amortize
Unfunded Actuarial Accrued
Liability over 26 years
(as of 10/1/99) to 2025
% of Total Annual Payroll*
Total Required Contribution
% of Total Annual Payroll*
Expected Member Contributions
% of Total Annual Payroll*
Expected City Contribution
% of Total Annual Payroll*
Before After
10/1/99 10/1/99
$116,165 $155,174
6.6 8.8
15,434
0.9
131,598
7.5
112,480
6.4
19,118
1.1
27,993
1.6
183,167
10.4
112,480
6.4
70,667
4.0
* Contributions developed as of 10/1/99 are expressed as a
percentage of projected annual payroll at 10/1/99 of
$1,757,502
ACTUARIAL ASSUMPTIONS AND FUNDING METHODS
Mortality Rates
Interest Rates
Retirement Age
Early Retirement
Disability Rates
Termination Rates
Salary Increases
Administrative Exrenses
Payroll Growth
Assumations
1983 Group Annuity Mortality Table.
8% per year compounded annually, net of
investment related expenses.
Age 55 and 10 years of service. Mem-
bers eligible to retire on the valua-
tion date are assumed to work one
additional year.
Commencing with the earliest Early
Retirement Age (50), members are
assumed to retire with an immediate
subsidized benefit at the rate of 5%
per year.
See table below (1202).
See table below (1312).
6% per year until the assumed retire-
ment age; see table below.
$22,400 per year
3% per year
% Becoming Disabled % Terminating Current Salary as % of
Age During the Year During the Year Salary at Ace 55
20
30
40
50
.051%
.058
.121
.429
38.6%
19.4
7.3
2.7
Funding Method
Frozen Entry Age Actuarial Cost Method
13.0%
23.3
41.7
74.7
EFFECTIVE DATE
(Restated Plan)
LATEST AMENDMENT
CREDITED SERVICE
SALARY
AVERAGE FINAL
COMPENSATION (AFC)
NORMAL RETIREMENT
Eligibility
Benefit Amount
Form of Benefit
EARLY RETIREMENT
Eligibility
Benefit Amount
DISABILITY
Eligibility
Benefit Amount
SUMMARY OF PLAN PROVISION
October 1, 1992.
September 27, 1999.
Years and fractional parts of years of
service with the City as a General
Employee.
W-2 earnings, excluding lump sum sick
and vacation pay, commissions, bonuses,
and expense allowances, but including
tax exempt, tax sheltered, and tax
deferred income.
Average Salary during 5 best years of
the last 10.
Age 55 and 10 years of Credited Serv-
ice.
2.4% of Average Final Compensation for
each year of Credited Service. In
addition, Normal Retirees receive an
additional $215 per month for life.
Life Annuity (options available).
Age 50 and 10 years of Credited Serv-
ice.
Accrued benefit actuarially reduced.
a. 10 years of Credited Service.
b. Total and permanent disability
prior to Normal Retirement Date.
Accrued Benefit, actuarially reduced as
for Early Retirement paid for life
(with 120 payments guaranteed) or until
recovery.
ri
PRE -RETIREMENT DEATH
Not Vested
Vested
Refund of accumulated Member Contribu-
tions, with interest.
Accrued benefit paid to beneficiary for
10 years beginning at the member's
otherwise Normal Retirement Date
(unreduced) or, on a reduced basis, on
any earlier date.
VESTING (TERMINATION)
Less than 10 years Refund of Member Contributions with
interest.
10 years or more
Accrued benefit payable at the other-
wise Early or Normal Retirement Date.
or
Refund of Member Contributions.
CONTRIBUTIONS
Employee 6.4% of Salary.
City
5% of payroll of covered members plus
any remaining amount necessary for
payment of Normal (current year's) Cost
and amortization of the accrued past
service liability over 30 years (per
Chapter 112, F) .
BOARD OF TRUSTEES a) Two Council appointees,
b) Two elected Members of the Plan,
and
c) Fifth Member elected by the other
four and appointed by the Council
as a ministerial duty.
EXHIBIT A
CRESTVIEW GENERAL, EMPLOYEES RETIREMENT PLAN
STATEMENT OF PLAN ASSETS, LIABILITIES AND
FUND BALANCE
02/29/00 02/28/99 09/30/99
(Unaudited) (Unaudited) (Audited)
ASSETS:
Cash -demand
Prepaid insurance
Investments:
Key Trust/Boatmen's
(market)
S 36,640.24 S 58,070.48 S 45,039.01
1,915.32 1,823.26 202.62
7.042.797.91 5.110872. 88 5.433.439.86
7 081.; 47 70,7f6 62 55 478,681.49
LIABILITIES AND FUND BALANCE:
Refunds and interest
requested by participants S S
Accounts payable - - -
S
Fund balance (Exhibit B) 8,391.89
7.081.353.47 5.170.766.62 5,470,289.60
$7.081.353.47 "7170,766.62 x,478.681.49
See accountant's compilation report.