HomeMy WebLinkAboutResolution 3942-12-2010 A Resolution
NO. 3942-12-2010
TO NOTIFY THE BOARD OF TRUSTEES OF THE CITY OF FORT WORTH
EMPLOYEES' RETIREMENT FUND THAT THE CITY COUNCIL INTENDS
TO CONSIDER AND VOTE ON AN AMENDMENT TO THE RETIREMENT
ORDINANCE THAT WOULD ELIMINATE THE COST OF LIVING ADJUSTMENT
FOR ALL NON-CIVIL SERVICE EMPLOYEES HIRED ON OR AFTER APRIL 1,2011
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 City of Fort Worth
Employees' Retirement Fund of City Council's intent to consider and vote on any
amendment to the administrative rules governing the Retirement Fund 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 March 8, 2011, on an amendment to the Retirement Ordinance that will
eliminate the cost of living adjustment for Non-Civil Service Employees hired on or after
April 1, 2011.
NOW, THEREFORE, BE IT RESOLVED BY THE CITY COUNCIL OF THE
CITY OF FORT WORTH, TEXAS:
1. That this Resolution serve as Notification to the Board of Trustees of the City
of Fort Worth Employees' Retirement Fund that City Council intends to consider and
vote on an amendment to the Retirement Ordinance, at a meeting to be held on or after
March 8, 2011, that would eliminate the Cost of Living Adjustment for Non-Civil
Service employees who are hired on or after April 1, 2011.
Adopted this 7th day of December 2010. APPROVED
ATTEST: CITY COUNCIL
DEC 0 7 2010
By: — ----------- C,� �`
------ City Secrftry of the
Marty Hendrix, City Secretary C4 of Fort Wortk Texas
FoRTWORTH
City of Fort Worth, Texas
Mayor and Council Communication
COUNCIL ACTION: Approved on 12/712010 »,Res'. No, 394242-2010
DATE: Tuesday, December 07, 2010 REFERENCE NO.: G-17132
LOG NAME: 12COLA CHANGE
SUBJECT:
Adopt a Resolution Notifying the Board of Trustees of the City of Fort Worth Employees' Retirement Fund
of City Council's Intent to Consider and Vote on an Amendment to the Retirement Ordinance That Will
Eliminate the Cost of Living Adjustment for Non-Civil Service Employees Hired On or After April 1, 2011
RECOMMENDATION:
It is recommended that the City Council adopt the attached resolution notifying the Board of Trustees of
the City of Fort Worth Employees' Retirement Fund that City Council intends to consider and vote on an
amendment to the Retirement Ordinance that will eliminate the Cost of Living Adjustment for Non-Civil
Service Employees hired on or after April 1, 2011.
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 for Non-Civil
Service Employees need to be made.
On November 9, 2010, City Council approved a resolution notifying the Board of Trustees of the City of
Fort Worth Employees' Retirement Fund (ERF)that City Council intended to vote on an amendment to the
Retirement Ordinance that would change the survivor benefit to an actuarially neutral benefit for Non-Civil
Service Employees hired on or after October 1, 2010. On November 16, 2010, City Council approved a
resolution notifying the Board of Trustees of the ERF that City Council intended to vote on
amendments to the Retirement Ordinance for Non-Civil Service Employees hired on or after March 1,
2011, that would increase the vesting period, change the definition of earnings, change the compensation
base for determining benefits, lower the multiplier for normal retirement, lower the multiplier for early
retirement, lower the multiplier for disability retirement, change vested termination benefits, eliminate the
DROP, increase the minimum age requirement for early retirement, and change the normal retirement
date.
Staff has recommended that City Council amend the Retirement Ordinance to eliminate the Cost of Living
Adjustment for Non-Civil Service Employees hired on or after April 1, 2011. Staff will continue to study the
best methods for addressing cost of living adjustments, and may make recommendations in the future on
a new procedure for giving cost of living adjustments.
These ordinance amendments will not apply to employees hired on or before April 1, 2011. These
ordinance amendments also will not apply to Civil Service Police and Fire Employees, but it will be part of
the negotiations with Police during Meet and Confer contract negotiations, and with Fire during Collective
Bargaining contract negotiations.
Logname: 12COLA CHANGE Page 1 of 2
Since the recommended ordinance amendment is a benefit reduction for Non-Civil Service Employees
hired on or after April 1, 2011, Section 6243i of the Texas Revised Civil Statutes, which applies to the
Retirement Fund, requires the City Council to provide 90 days notice to the Board of Trustees of the ERF
of City Council's intent to consider and vote on the benefit reduction. If adopted, this resolution would
serve as notice to the Board of Trustees of the ERF of City Council's intent to consider and vote on an
ordinance amendment eliminating the Cost of Living Adjustment at a meeting of the City Council to be
held on or after March 8, 2011.
FISCAL INFORMATION / CERTIFICATION:
The Financial Management Services Director certifies that that adoption of the attached resolution, which
is for notification purposes only, will have no material effect on City Funds.
FUND CENTERS:
TO Fund/Account/Centers FROM Fund/Account/Centers
CERTIFICATIONS:
Submitted for City Manager's Office by: Karen Montgomery (6222)
Originating Department Head: David Yett (7623)
Additional Information Contact: Laetitia Brown (6639)
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