HomeMy WebLinkAboutResolution 3980-03-2011A Resolution
NO. 3980 -03 -2011
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 THAT WOULD
REDUCE BENEFITS
WHEREAS, Article 62431 of the Texas Revised Civil Statutes applies to the
Employees' Retirement Fund of the City of Fort Worth, 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 Employees' Retirement
Fund of the City of Fort Worth of City Council's intent to consider and vote on any
amendment to the administrative rules governing the Retirement Fund of the City of Fort
Worth that would reduce a benefit provided by the retirement system, and
WHEREAS, The City Council intends to consider and vote at a meeting, to be held
on or after June 21, 2011, on an amendment to the Retirement Ordinance that will reduce
benefits.
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 amendments to the Retirement Ordinance, at a meeting to be held
on or after June 21, 2011, that would permit all active members of the Fund hired prior
to July 1, 2011, and those currently receiving benefits under the Retirement Ordinance to
make an irrevocable selection between the cost of living adjustment the member is
currently subject to and a new alternative cost of living adjustment to be determined
prior to the selection process.
Adopted this 22nd day of March 2011. APPROVED
ATTEST: CITY COUNCIL
MAR 2 2 2011
By: N
City Secretary of the
Marty Hendrix, City Secretary City of Fort WoitlLTexas
FORT WORTH
T
City of Fort Worth, Texas
Mayor and Council Communication
COUNCIL ACTION Approved on 312212011 - Res. No. 3980 -03 -2011
DATE: Tuesday, March 22, 2011
LOG NAME: 12COLA 2011
REFERENCE NO.: G -17244
SUBJECT:
Adopt Resolution Notifying the Board of Trustees of the Employees' Retirement Fund of the City of Fort
Worth of City Council's Intent to Consider Benefit Reductions
RECOMMENDATION:
It is recommended that the City Council adopt the attached resolution notifying the Board of Trustees of
the Employees' Retirement Fund of the City of Fort Worth of its intent to consider benefit reductions at the
City Council meeting on or after June 21, 2011, that would permit all members of the Fund hired prior to
July 1, 2011, and those currently receiving benefits under the Retirement Ordinance the option of
selecting a new cost of living adjustment.
DISCUSSION:
Based on the market value of assets as of January 1, 2010, and using the most recent actuarial valuation,
the Employees Retirement Fund had an unfunded liability of $717 million, which is projected to grow to
over $3 billion by the year 2040. In order to curb the growth of that liability, benefit reductions need to be
made. The Ad Hoc Cost of Living Adjustment (COLA) was offered to members in 2007 as a cost saving
mechanism, that would allow members a larger cost of living adjustment or none at all based on the time
period to pay off the unfunded actuarial liability of the Fund. The Ad Hoc Cost of Living Adjustment has
served its purpose in the last two years when the Fund was not in a position to pay cost of living
adjustment benefits. However, because Ad Hoc COLA benefits are triggered solely by the amortization
period of the fund (i.e. not based on any correlation to the cost of living as measured by the Consumer
Price Index), the provision precludes the ability of the Fund to exceed a minimum funded status of 80
percent. Staff is therefore recommending giving members of the Fund hired prior to July 1, 2011, and
those receiving benefits from the Fund the option of selecting a new cost of living adjustment.
FISCAL INFORMATION / CERTIFICATION:
The Finance Director certifies that the proposed changes are designed to improve the long term funded
status of the Fund, which may have a positive impact of City funds in the future.
FUND CENTERS:
TO Fund /Account/Centers
CERTIFICATIONS:
Submitted for City Manager's Office by:
Originating Department Head:
Additional Information Contact:
FROM Fund /Account/Centers
Karen Montgomery (6222)
Tom Higgins (6192)
Sarah Fullenwider (7606)
Laetitia Brown (6639)
Karen Montgomery (6222)
Logname: 12COLA 2011 Page 1 of 1