HomeMy WebLinkAboutResolution 4842-09-2017 A Resolution
NO. 4842-09-2017
TO NOTIFY THE BOARD OF TRUSTEES OF THE EMPLOYEES'
RETIREMENT FUND OF THE CITY OF FORT WORTH THAT THE FORT
WORTH CITY COUNCIL INTENDS TO CONSIDER AND VOTE ON
AMENDMENTS TO THE RETIREMENT ORDINANCE FOR MEMBERS THAT
WILL REDUCE A NON- ACCRUED BENEFIT PROVIDED BY THE
RETIREMENT SYSTEM
WHEREAS, Article 62431 of the Texas Revised Civil Statutes applies to the Employees'
Retirement Fund of the City of Fort Worth ("the Fund");and
WHEREAS, Section 4.03 of Article 62431 of the Texas Revised Civil Statutes requires the City
Council to notify the Board of Trustees of the Fund of the City Council's intent to consider and vote on
any amendment to the administrative rules governing the Fund that would reduce a benefit provided by
the retirement system; and
WHEREAS, the City and the taxpayers of Fort Worth currently have the State constitutional
obligation to honor earned benefits for employees should the Fund become insolvent and therefore have
a critical interest in the affordability of the benefits that are offered to employees;and
WHEREAS, the City controls, within Constitutional constraints and as limited by collective
bargaining or meet and confer agreements,the retirement benefits that are offered to employees;and
WHEREAS, the Employee Retirement Fund Board has the legal authority over the investment
strategy and management oversight of the contributions once remitted to them;and
WHEREAS,the City has previously reduced retirement benefits for Members;and
WHEREAS, the City adopted a 2% guaranteed cost of living adjustment (COLA) for certain
employees to more accurately project and book the cost of a COLA and to give those employees a more
predictable COLA to facilitate long-term financial planning, but resulted in an increase in the liability
of the Fund; and
WHEREAS, the Fund has adopted more conservative and realistic actuarial assumptions over
the last two years which has led to an increase in the liability of the Fund;and
WHEREAS,the Fund has not consistently met its assumed rate of return in recent years, which
has led to an increase in the liability of the Fund; and
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Resolution No.4842-09-2017
WHEREAS, the Fund has had three consecutive actuarial valuations that indicate an
amortization period of greater than 40 years; and
WHEREAS, State law requires a governmental entity to submit a Funding Soundness
Restoration Plan(FSRP)when the Fund that has had three consecutive valuations with an amortization
period of greater than 40 years; and
WHEREAS,the FSRP requires that the plan reduces the amortization period to below 40 years
within 10 years; and
WHEREAS, the City Council provided 90-day notice to the Employees Retirement Fund
on January 31, 2017 (Resolution 4736-01-2017) that the City is considering modifying the definition
of Regular Interest paid on withdrawals to be equivalent to a 2-year Treasury accrued annually;and
WHEREAS,the City Council will soon consider an ordinance to enact this change to enact this
change effective January 1, 2018; and
WHEREAS, this change would have the unintended consequence of lowering the interest paid
by employees for purchase of service following breaks in service unless an additional ordinance change
is implemented at the same time;and
NOW, THEREFORE, BE IT RESOLVED BY THE CITY COUNCIL OF THE
CITY OF FORT WORTH, TEXAS:
That this Resolution serve as Notification to the Board of Trustees of the Employees' Retirement
Fund of the City of Fort Worth that the Fort Worth City Council intends to consider and vote on the
following amendment to the Retirement Ordinance at a meeting to be held on or after December 12,
2017:
Amend Section 2.5-4 of the Retirement Ordinance allowing repurchase of prior credited
service for Members who return to work for the City on or after January 1, 2018
as follows:
1. Apply the assumed rate of return in place at the time of repayment commencement
and during the payback period to the repayment of the total contributions
withdrawn instead of the Regular Interest rate; and
2. Reduce the repayment period for repurchase from seven (7)years to three
(3)years.
Adopted this 12" day of September, 2017. _ OF F
ATTEST: %
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By: .--------
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Mary J. Kayser, Secretary .
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