10-27-1981 - Joint GEPB/PPB CITY OF EDGEWATER
POLICE AND GENERAL EMPLOYEE'S PENSION BOARD
JOINT MEETING
October 27, 1981
Mayor Christy called the joint meeting of the pension boards to order
at 2:00 P.M. in the Community Center Board Room.
ROLL CALL
Police Bd. General Employee's Bd.
Mayor Robert Christy Present Mayor Robert Christy
Police Chief Earl Baugh Present Mrs. Cornelia Kinsey
Det. William Rickelman Excused Mr. Everett Wilcox
Officer William Britain Present City Clerk Nancy Blazi
Rev. Sayer Canova Present Rev. Harvey Hardin
Also Present: JackOAscherl, Agent of Record
Joseph Mitchell, City Manager
Mr. Ascherl explained to the new members the present pension plan.
Updated fund information was given to the board members. The original
plan consisted of a good basic pension plan. The City selected Banker's
Life to administer the plan. The pension boards were set up by the
city according to Florida Law to act as trustees of the plan and make
recommendations concerning the plan. Banker's Life collects the money
we send to them and invest that money and do all the actuarial computations
each year relating to the plan. The basic plan which calls for 10 year
vesting pays 2% of the highest pay period (averaged out over the 10 years)
times the number of years of service. It also contains a death and
disability benefits. The plan also includes credit for past service and
the City chose to put two employees on the plan (retirement) at the
beginning of the plan. This was a unique situation and resulted in an
expenditure of the plan before funding had adequately built up. We
are paying for that liability over a period of years. The pension boards
meet at least once a year to review the plan and review the benefits of
the plan.
Mr. Britain asked what happens to the money that goes into a plan for
an employee who leaves before the vesting period is reached. Mr.;Ascher1
explained that those monies stay in the plan and are considered a plus
to the plan to increase the funding.
Suggestions were made for possible improvement of the plan. There was
a discussion about reducing the vesting period from 10 to 5 years. This
would amount to an increase in funding of approximately $2,000.00 per year.
The boards also discussed the disability benefit which at present is not
effective until an employee has been in the plan for five years. The
suggestion was made that this time period be reduced to 0 so that an
employee who had just started with the city could be eligible for disability
benefits for on- the -job injury. It was pointed out that the Police Dept.
receives money from the State that can only be used for retirement benefits.
The cost, for example, of reducing the disability eligibility from 5 years
to 0 years for the Police Dept. would be approximately $1,715. This could
be paid for out of the State monies.
Now lie
Mr. Britain made a motion that the Police Retirement Plan be revised by
reducing the length of service from 5 years to 0 years to be eligible
for disability benefits for on- the -job injury. Chief BaugI seconded the
motion. Upon roll call the motion CARRIED 4 -0.
Another lengthy discussion followed concerning the reduction of the vesting
period for all employees from 10 years to 5 years. A retirement plan
acts as an incentive for trained employees to remain with the city. A
reduced vesting period could act as additional motivation both for
- employees that already have considerable length of service with the city
and also for new employees who would see the advantages of receiving
some compensation for their work after five years rather than the more
lengthy ten year period. No employee would receive retirement benefits
until they reached age 65 (the police retirement age is 60)and of course
the longer the length of service the higher the retirement benefits.
Mrs. Kinsey motioned to revise the present pension plan by reducing the
vesting period from 10 (ten) years to 5(five) years for all employees.
Mr. Wilcox seconded the motion. Upon roll call the motion CARRIED 5 -0.
It was the unanimous consensus of both boards that any revisions to the
present pension plan become effective 10/1/81. They requested that the
City Manager inform the Council of the recommendations made by both the
Police Pension Board and the General Employee's Pension Board,in their
capacity as trustees of the pension plan, to revise the present plan.and
that both boards urge the Council to give these matters serious considera-
tion and approval.
The boards also discussed various investment plans offered by Banker's
life for the pension funds in order to add to the fund higher interest
earnings. Mr. Ascherl informed the boards that Banker's life guarantees
a specific interest rate for a period of one year but that there is the
option of using other recommended investment plans to increase the interest.
The city can, at any time, revert back to the guaranteed interest rate if
the recommended investment plan does not yield as high a return as that
guaranteed by Banker's Life.
Chief Baugh made a motion that the Police Pension Board and the General
Employee's Pension Board allow the agent of record to make the best invest-
ment and advise the members accordingly. The Mayor would be authorized
to sign the amendment to the contract. Rev. Canova seconded the motion.
Upon roll call of both boards the motion CARRIED 9 -0.
BothHboards agreed that they would like to have another meeting sometime
in January 1982.
Chief Baugh motioned to adjourn the meeting, seconded by Mr. Britain.
The meeting was adjourned.
Minutes submitted by:
Nancy Blazi
Pension Board Meeting
10/27/81 - 2 -