HomeMy WebLinkAboutOrdinance 10291~ a
~„
ORDINANCE N0. ID~ l
AN ORDINANCE AMENDING ORDINANCE NOS. 2999, 4060, 4250,
4304, 4354, 4430, 4860, 4861, 4873, 4875, 5226, 5259,
6393, 6556, 7056, 7317, 7875, 8674, 8843, 9247, 9532
AND 10081, CODIFIED AS CHAPTER 2, ARTICLE VI,
DIVISION 1, ENTITLED "EMPLOYEES' RETIREMENT FUND", OF
THE CODE OF THE CITY OF FORT WORTH (1 986) , AS AMENDED,
WHICH ORDINANCES ESTABLISH AND PROVIDE FOR A RETIREMENT
SYSTEM, RETIREMENT PLAN AND BENEFITS THEREUNDER FOR
EMPLOYEES OF THE CITY OF FORT WORTH; PROVIDING THAT NO
DISABILITY PENSION SHALL BE GRANTED UNTIL ALL ACTUAL
WORKERS' COMPENSATION CLAIMS HAVE BEEN SETTLED OR CAN
NO LONGER BE APPEALED OR SET ASIDE BY ANY COURT; PROVID-
ING FOR ANNUAL MEDICAL EXAMINATION AFTER A DISABILITY
PENSION HAS BEEN GRANTED WHEN DEEMED NECESSARY; PROVID-
ING THAT FALSIFICATION OR OMISSION OF PRIOR INJURIES ON
ANY PART OF THE EMPLOYMENT APPLICATION SHALL CON ST IT UT E
GROUNDS FOR DENIAL OR REVOCATION OF ANY DISABILITY
PENSION; PROVIDING FOR AN ANNUAL DISABILITY NOT IN LINE
OF DUTY PENSION; PROVIDING FOR A VESTED TERMINATION
PENSION WHEN ELIGIBLE AS IF EMPLOYMENT HAD CONTINUED;
ALLOWING THE FUND TO HONOR CERTAIN DIVORCE DECREES
DIVIDING PENSION BENEFITS; MAKING THIS ORDINANCE CUMULA-
TIVE; PROVIDING A SEVERABILITY CLAUSE; PROVIDING FOR
ENGROSSMENT AND ENROLLMENT; AND PROVIDING AN EFFECTIVE
DATE.
BE IT ORDAINED BY THE CITY COUNCIL OF THE CITY OF FORT
WORTH, TEXAS;
That Ordinance No. 2999, passed and adopted by the City
Council of the City of Fort Worth on the 24th day of September,
A.D. 1952, as amended by Ordinance Nos. 4060, 4250, 4304, 4354,
4430, 4860, 4861, 4873, 4875, 5226, 5259, 6393, 6556, 7056, 7317,
7875, 8674, 8843, 9247, 9532 and 10081, be and the same is hereby
further amended as follows:
SECT ION I .
That Chapter 2, Article VI, Division I, Section 2-210,
"Disability Pensions," Subsection (b) "General Provisions," of
the Code of the City of Fort Worth (1986), as amended, be and is
,.
hereby further amended by substituting the following language in
lieu thereof, to wit:
"(1) Such disability must exist for at least ninety (90}
consecutive days..
"(2) Such disability was not contracted, suffered or incur-
red while the member was engaged in, or did not result
from his having engaged in, a criminal enterprise, or
from his habitual drunkenness or addiction to narcot-
ics, or from self-inflicted injury, or from voluntary
or involuntary service in the Armed Forces of the
United States (including the United States Merchant
Marine), any of its allies or any other foreign coun-
try.
"(3) No disability pension shall be granted to any member
allegedly injured on the job until all claims under
the Workers' Compensation Act, Articles 8306-8309,
R.C.S. of Texas, as amended, have reached settlement,
or can no longer be appealed or set aside by any
court."
SECT ION I I .
That Chapter 2, Article VI, Division 1, Section 2-210,
"Disability Pensions," Subsection (c) "Qualification For
Disability Pension," of the Code of the City of Fort Worth
(1986), as amended, be and is hereby further amended by substitut-
ing the following language in lieu thereof, to wit:
"(1) A member shall qualify for a disability pension as
hereinafter provided only after he has been certified
to be disabled, in accordance with the definition in
subsection (a) of this section, by one or more duly
licensed and practicing physician(s) appointed by the
Administrator. Determination of the existence of disa-
bility shall be made after a ninety (90) day period
from the date such disability is alleged to have com-
men ced, and benefits shall not commence until the first
day of the month following the month in which such
ninety (90) day period ends.
-2-
.,
"(2) The Board shall have its appointed physician(s) conduct
an annual medical examination after a disability pen-
sion has been granted unless deemed not necessary by
the Administrator due to the retiree's condition or at
any other time deemed necessary by the Board when a
change in the retiree's condition is brought to the
Board's attention, in order to determine whether the
disability is continuing.
"(3) Any disability payment shall be discontinued at any
time upon proof that the member is not disabled as
above defined. The Board's determination on all matters
concerning the granting, refusing or revoking of a
disability payment shall be final and conclusive on all
parties, and no appeal can be made therefrom.
"(4) No disability benefit coverage shall be provided during
a service break in excess of three (3) consecutive
months unless the service break was caused by sickness
or accident leading to total disability.
"(5) The disability benefit specified herein shall not be
payable during any period for which regular pay or a
portion thereof is continued by the City, the State or
any other division of government in accordance with the
then-existing civil service statutes.
"(6) Falsification or omission of prior conditions or inju-
ries on any part of the employment application, for
which a disability pension is or has been sought, shall
constitute grounds for denial of a disability pension
or for revocation of any disability pension granted."
SECT ION I I I .
That Chapter 2, Article VI, Division I, Section 2-210,
"Disability Pensions," Subsection (e) "Disability Not In Line Of
Duty," of the Code of the City of Fort Worth (1986), as amended,
be and is hereby further amended by substituting the following
language in lieu thereof, to wit:
"If a member who is vested becomes totally and perma-
nently disabled while not in line of duty, he shall receive
an annual life pension, the amount of which shall be two
percent (2~) of his compensation base multiplied by his
total credited service to date. If a member becomes disabled
-3-
s
not in line of duty before that member is vested, then
Section 2-212 shall apply." -
SECTION IV.
That Chapter 2, Article VI, Division I, Section 2-212,
"Termination Benefits and Vesting" of the Code of the City of
Fort Worth (1986), as amended, be and is hereby further amended
by adding Subsection (d), and after such addition, Subsection (d)
shall read as follows, to wit:
"(d) A vested member, who resigns or is terminated
prior to his retirement date and whose years of age and
years of credited service total sixty-five (65) when added
together, shall be entitled to receive a vested right of one
hundred per cent ( 100) of the amount of pension earned to
date of resignation or termination, payable in full upon
what would have been his retirement date if he had remained
employed by the City."
SECT ION V.
That Chapter 2, Article VI, Division 1, Section 2-217,
"Exemption of Benefits from Judicial Process," Subsections (a)
and (b), of the Code of the City of Fort Worth (1986), as
amended, be and are hereby further amended by substituting the
following language in lieu thereof, and by adding Subsection (c)
and subsection (d), and after the additions and amendment, shall
read as follows, to wit:
"(a) The City shall never be held liable or responsible
for any claim or asserted claim for benefits under the pro-
visions of this article, but all claims shall be paid from
the funds for which provision has been specifically made in
this article.
"(b) No portion of this Fund shall, at any time before
or after its disbursement, be held, seized, taken, subjected
to or detained or levied upon by virtue of any execution,
attachment, garnishment, assignment, injunction or other
-4-
~:
r;
writ, order or decree, or any process or proceedings whatso-
ever issued out of or by any court for the payment or satis-
faction, in whole or in part, of any debt, damage, claim,
demand or judgment against any persons entitled to the
benefits of this Fund, nor shall the Fund or any claim
thereto be directly or indirectly assigned or transferred,
and any attempt to transfer or assign same shall be void;
provided however that (1) nothing in this section shall
prevent the deduction of the spouse's insurance premiums
from the Fund for the purpose of paying same, on behalf of
the spouse, to the health and life insurance carrier for the
City only, and (2) nothing shall prevent the Fund from divid-
ing a member's pension benefit between the member and a
former spouse according to the terms of a valid court order
from a court of competent jurisdiction as set forth in
subsection (c).
"(c) The court order must state a specific amount pay-
able monthly or a percentage of the member's monthly benefit
to be divided on a monthly basis between the member and the
former spouse; no lump sum payment shall be made to the
former spouse, except as otherwise stated in this subsec-
tion. Upon the member's death, no further monthly pension
benefits shall be paid to the former spouse. If a divorced
member dies leaving dependent children or dependent parents,
such eligible person(s) shall be entitled to receive a death
benefit, based upon the member's pension benefit but for the
divorce, according to the terms of Section 2-211, and in no
event shall any of the member's remaining contributions be
paid to the former spouse. If a divorced member dies prior
to receiving all of the member's contributions in monthly
pension benefits and if the divorced member leaves no widow,
widower, dependent children or dependent parents eligible to
receive a benefit under Section 2-211, the member's remain-
ing contributions shall be divided between the member's
estate and the former spouse according to (1) the ratio of
the monthly pension benefit payable to the former spouse
divided by the monthly pension benefit payable to the member
but for the divorce, or (2) the percentage used to calculate
the monthly pension benefit payable to the member and the
former spouse. In the event a member remarries at least one
year prior to retirement and thereafter dies, the surviving
widow or widower shall be entitled to receive a death bene-
fit, based upon the member's pension benefit but for the
divorce, according to the terms of Section 2-211, and in no
event shall any of the member's remaining contributions be
paid to the former spouse. The date that benefit payments
are due and payable to a former spouse shall be determined
by the eligibility of the member to receive benefits or
contributions based upon the member's retirement date or
other termination of employment. No court order shall be
-5-
i
.. - _ ~ ,;.
~,
r
honored if it: (1) provides for any type or form of benefit
or option not otherwise provided by the Fund, (2) requires
the Fund to provide increased benefits determined on the
basis of actuarial value or (3) requires the payment of
benefits to a former spouse that are required to be paid to
another former spouse.
"(d) Unless other wise expressly provided for in this
article, the Board shall not reduce an individual pension."
SECT ION VI .
CONTROLLING POWER OF ORDINANCE
The provisions of this ordinance shall be cumulative of and
in addition to all other ordinances of the City of Fort Worth
relating to pensions, which ordinances are hereby preserved and
continued in force and effect; provided, however, that, in the
event of any conflict, the provisions of this ordinance shall
control.
SECT ION VII .
VALIDITY OF ORDINANCE
If any provision, section, part, subsection, sentence,
clause, phrase or paragraph of this ordinance be declared invalid
or unconstitutional, the same shall not affect any other portion
or provision hereof, and all other provisions shall remain valid
and unaffected by any invalid portion, if any, and the City
Council now says that, if it had known at the time of the passag e
of this ordinance that any portion of said ordinance was invalid,
it would not have adopted such invalid part.
-6-
,- ~ ~~.,
k'.
Y
LL !
P'
SECTION VIII.
PREREQUISITES TO ORDINANCE
The City Council finds that all acts, conditions and things
required by provisions of the Constitution of Texas and the
Charter and Ordinances of the City of Fort Worth precedent to and
in the adoption of this ordinance have been done, have happened
and have been performed in proper and lawful time and manner.
SECTION IX.
ENGROSSMENT AND ENROLLMENT
The City Secretary of the City of Fort Worth is hereby
directed to engross and enroll this ordinance by copying the
caption and effective date of same in the minutes of the City
Council of the City of Fort Worth and by filing this ordinance in
the ordinance records of said City.
SECT ION X.
EFFECTIVE DATE
This ordinance shall be in full force and effect from and
after the date of its adoption and it is so ordained.
APPROVED AS TO FORM AND LEGALITY:
City Attorney _ '
Date: ~J~~ -g~
ADOPTED
EFFECTIVE:
-7-
-- ~~- .- ATTACHMENT
T0: Doug Harman, City Manager DATE: January 16, 1989
FROM: 3udson Bailiff, Director of Finance
SUBJECT: Proposed Amendments to Retirement Ordinance
At a special called meeting on January 10, 1989 the Retirement Fund Board
of Trustees unanimously approved recommending to the City Council several
amendments to the Retirement Ordinance.
Two of the recommended amendments have an acturial cost impact. The
other amendments are needed either for clarification or to protect the
position of the Fund in certain possible legal proceedings. The
amendments having acturial cost impact involve (1) a change in the
formula used to determine retiree benefits and (2) a change in the vested
retirement provisions of the Ordinance. These two changes are discussed
in more detail below.
Benefit Fora-ula
Retirees presently receive an annual benefit of 27 of compensation base
(average highest five years' earnings) multiplied by total credited
service years The Retirement Board is recommending that the 27 factor
be increased to 2.157 for an effective increase in benefits of 7 1/27.
The last change in the benefit formula was approved in July 1983 when
this factor was increased from 1.83347 to the 2 7
Prior to their recommendation the Retirement Board had an acturial study
performed to assess the impact of increasing the benefit factor to 2.257..
The acturial report reflected that a 2.257 factor could not be funded
within present funding levels; however, an increase of 2.15 7 could be
made within established "safety" margins. The 2.157 change has an
acturial cost of 1.267 of payroll.
Vested Retirement
The City of Fort Worth Retirement Ordinance has always contained a
provision recognizing that after a certain number of years of service an
employee achieves a vested right to benefits of the Retirement Fund.
Prior to a November, 1984 Retirement Ordinance amendment, the vested
provision bore a deliberate relationship to the provision for normal
retirement. Prior to the 1984 amendment the provision for normal
retirement resulted in the majority of retirees being age 60 or older.
If a vested employee left the City prior to normal retirement and prior
to age '65, at age 65 that employee was entitled to one hundred percent of
the amount of pension earned to date of termination.
The 1984 amendment provides for normal retirement under the "Rule of 80"
resulting in many employes becoming eligible for retirement at a
mid-fifties age. To retain a relationship between normal retirement and
vested retirement similiar to that existing prior to 1984 an amendment
to the vested retirement provision should have been included in 1984;
however, this was inadvertently omitted.
The Retirement Board believes that an appropriate recognition of
long-term employees' equity in the Fund can be achieved with a "65 point
vesting". Lander this provision once an employee achieves 65 points (years
of age plus years of service) that employee may terminate with the right
to one hundred percent of the amount of pension earned to the date of
termination with payment to begin at whatever future date that employee
would have achieved 80 points. On an individual employee basis this
provision costs the Fund less money than retirement at "80 points" as it
results in the individual receiving a smaller benefit but over the same
period of time. The increased acturial cost results from a projection
that more employees will exercise a vested option that currently do so.
The acturial study performed for the Board concerning this issue studied
vested retirement at 60, 65 and 70 points The results were an acturial
cost of .647, .457 and .267 respectfully
If you should require additional information on the proposed retirement
amendments please let me know. ,
HISTORICAL BACKGROUND
HEALTH INSURANCE
~ ~oai
(~4
May 1958 -- City Council adopts health insurance program for employees and retirees
(CC Minutes, 5/16/58)
May 1965 -- City continues to pay cost of coverage for retired employees (CC Minutes,
5/17/65)
January 1971 -- City continues to pay total premium of life, hospitalization, and medical
insurance of retired employees, provided employee was a member of the active employee
insurAn~p Group plan immediately prior to retirement. (Personnel Rules and Reg , 1/1/71)
September 1975 -- The City continued to pay 10096 of cost of retired employees' health
insurance premiums. (MdcC C-3197, 9/22/75)
July 1977 -- The City continued to pay total premiums of life, hospitalization and medical
insurance of retired employees (Personnel Rules and Regs. 711177)
February 1, 1978 -- Aetna awarded health and life contract. Payment of total premiums
for retirees and all insurance costs remain same as previous year. (Memo from Personnel
Director)
November 1984 -- Retirement Ordinance changed to provide that the Retirement Fund
could voluntarily reimburse the General Fund for all actual administrative expenses or
a portion thereof upon a majority vote by the Board of Trustees if such action was
actuarially sound.
August 27, 1984 -- Retirement Board voted to pay 10096 of retiree health insurance
premiums in support of City budget as proposed in the memo from the Budget Director
which referenced absorption of health insurance costs over a three year period. There
are differing opinions as to whether this was to be a one-time or annual assumption of
cost of health insurance for retirees.
1988 -- Retirement Board agrees to pay premiums for retirees' health insurance for
FY 89 with understanding that it is a one year payment only. Board has received report
that Fund cannot continue to absorb the cost of health insuc°ance for retirees.
ATTACHMENT 2
T
.i
-
""~'`~`'~~''' `~~~ ~ City of Fort -~®rth, texas
ACCOVM{jNG•9~ ~
TRANS/pR7At10M'/USLTC ~OR~ ®~ a U ~~ ~®~L1L~(L (L~ ~®~~ lL1V U (L (L!L/a~ (L®~
' ~ i
MAt~.R AG/tglIWOTRATIOl1 ~'
s
rC11fOMNCiS+t
rINANCE.'R
DATE 'REFERENCE SUBJECT PAGE
NUMBER 2
5/2/89 .G_8021 Retirement Ordinance Amendments lof
RECOMMENDATION
.~
It is •r-ecommended that City Council select one of the alternatives listed below
regard~ng• possible amendments to ;the retirement; fund.
1) Adopt the original recommendation of the Board of Trustees of the
Employees Retirement Fund included in Attachment A,
~~ 2) Direct City staff to prepare a multi-year phase-out of funding by
the Retirement Board for retiree health cost for subsequent presentation to the
Retirement Board and to the City Council,
3) Direct the c;ty staff to develop a revised retirement ordinance
which reduces the City's contribution in an amount sufficient to support direct
funding of the retiree health cost.
4): Take no action at this time in order to permit further dis-
cussion of the issue with the Retirement Board and to take into account the
budgetary impacts of possible changes.
5) Adopt a revised retirement ordinance which incorporates the
65 point provision and other technical amendments and take no action on in-
creasing other retirement benefits .(Attachment C).~'
IITSf.I1SSTON
At the recent Council meeting on April 25, 1989, City Council discussed the
recommendations from the Board of Trustees of the Employees' Retirement Fund
and Informal Report No. 7375, dated April 18, 1989. The Board of Trustees re-
quested amendments are included in Attachment A and they are self-explanatory.
City Council could adopt these recommended changes and implement them in the
ordinance which is included in Attachment A.
At the recent City Council meeting, the Informal Report was also discussed
which highlighted the budgetary impact on the 1989-90 budget. Adoption of the
original recommerid`at~ions'~fr~om the Board of Trustees would include at least a
$.02 increase in~t~e~~General~"~F~und budget.
Councilman Williams indicated that he wished to have the original retirement
ordinance amendment s~jbefore~,,City Council in order to permit some type of action
by City Council.
q#~
Mayor Bolen indicated~th'at~~;':Fie wished to have available for possible consider-
ation by City Council-the-65.~Point provision and other technical amendments.
He indicated that~~Council~.should have available the alternative to pass these
amendments without•poss'i~bl-e action at this time without increasing the cost of
the retirement benefit. City Attorney has been requested to include such an
ordinance alternative as an attachment to be available for Council action
should Council so desire.
k~
DATE REFERENCE
NUMBER SUBJECT PAGE
5/2/89
G-8021 Retirement Ordinance Amendments ~:2.~~rfaf_..~2__,
~.
At the time that this M&C was developed, City staff had not received any
definite indication from the Retirement' Board of Trustees of any other sup-
ported alternatives other than the original proposal endorsed by the Board of
Trustees.
City staff is concerned that the full budgetary implications of these changes
be recognized prior to any possible action by City Council. The April 18.th In-
formal Report points out "that the total cost of retirees' insurance projected
for 1989-90 is $3,796,390, of which $2,733,400 is for General Fund retirees."
City staff is presently working on development of the proposed budget for next
year.
Any Council decision that would concern the retirees' health costs would have
significant implications for next year's budget. Therefore, staff recommends
that Council consider this issue very carefully. In addition,. Council needs to
focus on the potential impact on the enterprise funds if there is a transfer of
the retirees' health insurance costs to those funds.. The I.R. reflects the
current year's allocations from those funds. For example, the FY 88-89 from
the Solid Waste Fund is $198,363. This increases to over $300,000 next year
and would have to be supported, in part, by the solid waste fund rate estab-
lished by City Council. City staff will be recommending a rate increase. One
element of the requirement for the rate increase will be the funds necessary to
support retirees' health costs. This is also true in other enterprise funds
which are supported by various fees adopted by City Council.
City staff•wants to make certain that the City .Council is fully aware of the
implications of the retiree health cost transfer for the General Fund as well
as for the enterprise funds. This issue will be discussed at the Work Session.
City staff looks forward to City Council guidance on this important matter.
The budgetary implications for next year are extremely important. In addition,
City staff recommends that the retiree health cost be thoroughly analyzed dur-
ing;the weeks ahead. It has been necessary to establish cost containment for
employee health costs. It seems only appropriate that cost containment strat-
egies be applied to the issue. of retiree health costs as well. As has been in-
dicated previously, the City of Fort Worth is one of very few jurisdictions
that currently provide full cost of the health insurance coverage for retired
employees. 1`his is a complex issue which has long-term financial ramifica-
tions.
APPROVED BY
CITY COU(~CiL
Attachments
* Approved Item Number 5 under Recommendatio~IAY 2 1989
~~.~
ct~ secsesa~ ~ t~.
SUBMITTED FOR THE
CITY MANAGER'S
OFFICE BY Douglas Harman
DISPOSITION BY COUNCIL:
^ APPROVED
PROCESSED BY
ORIGINATING 7 ,.1
DEPARTMENT HEAD• VU-'SOn Ba~~~.ff ^ OTHER (DESCRIBE)
* JC
CITY SECRETARY
FOR ADDITIONAL INFORMAT19Nd$On Bai 1 i ff °1°5
CONTACT tJl1
rdinance No. -
DATE
b ~.~: qS. gat
€ a, .+.~, .'s.~
~, ~ , b.
~ ~ t tR ~i5'/I.~w 4 C:.
:~:<,;,