HomeMy WebLinkAboutResolution 3956-12-2010 A Resolution
NO. 3956-12-2010
TO NOTIFY THE BOARD OF TRUSTEES OF THE CITY OF FORT WORTH
EMPLOYEES' RETIREMENT FUND OF CITY COUNCIL INTENT TO CONSIDER
AND VOTE ON AMENDMENTS TO THE RETIREMENT ORDINANCE FOR NON-
VESTED, NON-CIVIL SERVICE EMPLOYEES HIRED ON OR AFTER APRIL 1,2006,
THAT WILL REDUCE A NON-ACCRUED BENEFIT PROVIDED BY
THE RETIREMENT SYSTEM
WHEREAS, Article 62431 of the Texas Revised Civil Statutes applies to the City
of Fort Worth Employees' Retirement 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 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 15, 2011, on amendments to the Retirement Ordinance that that will
reduce a non-accrued benefit provided by the retirement system for Non-Vested, Non-
Civil Service Employees who are hired on or after April 1, 2006.
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 City of
Fort Worth Employees' Retirement Fund that City Council intends to consider and vote
on amendments to the Retirement Ordinance that would reduce a non-accrued benefit
provided by the retirement system for Non-Civil Service Employees hired on or after
April 1, 2006 by:
1. Eliminating the Ad Hoc Cost of Living Adjustment;
2. increasing the vesting period from five (5) years to ten (10) years;
3. changing the definition of earnings to base pay only;
4. changing the compensation base for determining benefits from
highest three-year average to highest five-year average;
5. changing the multiplier for normal retirement from 3.0% to 2.5%,
for early retirement from 2.75% to 2.25%, and for disability
retirement from 2.75% to 2.25%;
FFoRTWORTH
RESOLUTION NO. 3956-12-2010
6. changing the vested termination benefit for normal retirement to
when the member's age plus actual years of service with the City
of Fort Worth total eighty-five (85);
7. eliminating the DROP;
8. increasing the minimum age requirement for early retirement to
fifty-five (55); and
9. changing the normal retirement date to when a member's age plus
years of service total eighty-five (85) with a minimum age of fifty-
five (55) at retirement.
Adopted this 14th day of December 2010. APPROVED
ATTEST: CITY COUNCIL
DEC 14 2010
B •
Mart Hendrix, City Secretary ity Secretary aryofthe
Marty y y City of Fort Worth,Texas
ORT WORT
City of Fort Worth, Texas
Mayor and Council Communication
COUNCIL ACTION..Approved on 12114/2010 - Res. No. 395642.20101
DATE: Tuesday, December 14, 2010 REFERENCE NO.: G-17153
LOG NAME: 12COLA AND BENEFIT 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 Benefit Reductions for Non-Vested, Non-Civil Service
Employees Hired on or After April 1, 2006
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
Amendments to the Retirement Ordinance at a City Council meeting to be held on or after March 15,
2011, pertaining to benefit reductions for all Non-Vested, Non-Civil Service Employees hired on or after
April 1, 2006.
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-
vested, 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 a change 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 April 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.
City Council may further reduce benefits by amending the Retirement Ordinance to include the following
benefit reductions for non-vested, non-civil service employees hired on or after April 1, 2006: eliminating
the Ad-Hoc Cost of Living Adjustment, increasing the vesting period, changing the definition of earnings,
changing the compensation base for determining benefits, lowering the multiplier for normal retirement,
early retirement, and disability retirement, eliminating the DROP, changing the vested termination benefit
for normal retirement, increasing the age for early retirement, and changing the normal retirement date.
These ordinance amendments will not apply to employees hired prior to April 1, 2006. 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 AND BENEFIT CHANGE Page 1 of 2
Since the recommended ordinance amendments are benefit reductions, 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
reductions. 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 the ordinance amendments described above at a meeting of the
City Council to be held on or after March 15, 2011.
FISCAL INFORMATION /CERTIFICATION:
The Financial Management Services Director certifies 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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