HomeMy WebLinkAboutIR 9440Fit
To the Mayor and Members of the City Council
Itemaw"I
No. 9440
September 27, 2011
Page 1 of 1
On October 9, 2007, City Council approved M&C G -15919 which contained an amendment to the
Financial Management Policy Statements (FMPS). The amendment added a requirement for an
actuarial analysis to be performed on the compensation related items proposed in the annual
budgets, which could have an effect on the Employees' Retirement Fund (ERF). Doug Anderson,
Area Vice President with Gallagher Benefit Services, Inc. was asked to perform the analysis of
the FY2012 proposed budget. City staff provided the information related to pay increases for all
employees (3% across the board for General employees and contractual increases for Police and
Fire employees), changes in staffing, and vacation buyback for eligible employees. Each of these
items was analyzed separately then combined into an overall result.
According to Mr. Anderson's report, "The combined impact of the proposed budget changes has
a very slight favorable Impact on the Fund. While the amortization period increases slightly, the
Unfunded Actuarial Accrued Liability and the Annual Required Contribution are both expected to
decrease slightly. While there may be a slight favorable impact due to these budget changes,
other variables that impact the Fund may make these results look small by comparison. For
example, if investment returns in 2011 are significantly less than the assumed return of 8.25%,
the resulting asset loss could be significantly larger than the small gain from the budget items. "
Mr. Anderson's complete report is attached for your review. It has also been provided to Ruth
Ryerson, Executive Director of the ERF, who will forward the information to their actuary. With
the submission of this Informal Report, the requirements of Chapter XIV, Section A, item 4 have
been fulfilled.
If you have any questions or need additional information, please contact Karen Montgomery,
Assistant City Manager at (817) 392-6222 or Greg Jordan, Assistant Financial Management
Services Director at (817) 392-8843,
Tom Higgins
Interim City Manager
Attachment
ISSUED BY THE CITY MANAGER FORT WORTH, TEXAS