HomeMy WebLinkAboutOrdinance 17848-10-2007ORDINANCE NO. 17848-10-2007
AN ORDINANCE AMENDING C]EIAPTER 2, ARTICLE VI, DIVISION 1,
ENTITLED "EMPLOYEES' RETIREMENT FUND," OF THE CODE OF
THE CITY OF FORT WORTH (1986), AS AMENDED, AMENDING
SECTION 2-207 TO PROVIDE AN EARNINGS CAP ON THE
COMPENSATION BASE FOR DETERIVYINING BENEFITS; PROVIDING
THAT THIS ORDINANCE IS CUMULATIVE; PROVIDING A
SEVERABILITY CLAUSE; PROVIDING THAT ALL CONDITIONS
PRECEDENT FOR THE ADOPTION OF THIS ORDINANCE CLAUSE
AND PROVIDING AN EFFECTIVE DATE;
WHEREAS, the City of Fort Worth City Council ("City Council") adopted
Ordinance No. 13543, as amended by Ordinance Nos. 13672, 13673, 13674, 13842,
14641, 15334, 15528, 15862, 16967-OS-2006, and 169969-OS-2006, and as codified as
Chapter 2, Article VI, Division 1 of the Code of the City of Fort Worth, collectively
called the "Employees Retirement Fund Ordinance"; and
WIIEREAS, the City Council desires to address the Employees' Retirement
Fund unfunded liability; and
WHEREAS, the following change to the Retirement Ordinance would address
the Retirement Fund's unfunded liability.
BE IT ORDAINED BY THE CITY COUNCIL OF THE CITY OF FORT
WORTH, TEXAS:
SECTION 1.
That Chapter 2, Article VI, Division 1, Section 2-207 ("Compensation base for
determining benefits") is amended by deleting it in its entirety and substituting the
following language in lieu thereof:
Sec. 2-207. Compensation base for determining benefits.
(a) Pension, death, disability and vested termination benefits shall be based upon
the member's compensation base which shall mean the average annual earnings
which were paid to the member by the city for employment with the city during
any five (5) calendar years in which he or she had the highest annual earnings. If
a member's last day of employment with the city is on or after January 1, 1999,
"three (3)" shall be substituted for "five (5)" in the preceding sentence, and the
calculation of the member's compensation base will be subject to any applicable
limits on annual earnings set forth in section 2.207(b). If a member has less than
five (5) (or, if applicable, three (3)) calendar years of employment, the member's
compensation base shall be determined by the executive director under uniform,
non-discriminatory procedures that are consistently applied. For compensation
base purposes, any lump sum payments of earnings for any prior time period,
whether awarded to the member by a court, administrative body or settlement
agreement, shall be retroactively attributed to the calendar year in which it
would otherwise have been received by the employee from the city for services
rendered. For purposes of computing the compensation base for a member who
has completed at least one (1) year of service following the making of an effective
DROP election, the member's compensation base shall be calculated using the
member's earnings prior to the effective date of the DR®P election.
(b) For a member whose last day of employment with the city is on or after
January 1, 1999, and whose benefits commence on or after December 31, 2008, a
member's compensation base shall be calculated as follows:
(1) The Fund shall determine the four calendar years in which the member had
the highest annual earnings. ®f such four years, the year in which the member
had the lowest annual earnings shall serve as the base year. The base year shall
not be included as one of the three calendar years for purposes of the
compensation base calculation.
(2) The first annual earnings to be used in the calculation of the member's
compensation base shall be the actual annual earnings from the calendar year
with the third highest annual earnings of the four calendar years identified in
subsection (1) of this section 2.207(b), provided that if such annual earnings are
from a calendar year beginning on or after January 1, 2008, the amount to be
used in the calculation of the compensation base for the first year shall not
exceed 112% of the annual earnings for the base year.
(3) The second annual earnings to be used in the calculation of the member's
compensation base shall be the actual annual earnings from the calendar year
with the second highest annual earnings of the four calendar years identified in
subsection (1) of this section 2.207(b), provided that if such annual earnings are
from a calendar year beginning on or after January 1, 2008, the amount to be
used in the calculation of the compensation base for the second year shall not
exceed 112% of the annual earnings used that are attributable to the year
described in subsection (2) of section 2-207(b).
(4) The third annual earnings to be used in the calculation of the member's
compensation base shall be the actual annual earnings from the calendar year
with the highest annual earnings of the four calendar years identified in
subsection (1) of this section 2.207(b), provided that if such annual earnings are
from a calendar year beginning on or after January 1, 2008, the amount to be
used in the calculation of the compensation base for the third year shall not
exceed 112% of the annual earnings used that are attributable to the year
described in subsection (3) of section 2-207(b).
(5) The average of the three amounts determined in accordance with subsections
(2)-(4) of this section 2-207(b) will be the average annual earnings for purposes
of the member's compensation base.
SECTION 2
This ordinance shall be cumulative of all provisions of ordinances and of the Code
of the City of Fort Worth, Texas (1986), as amended, except where the provisions of this
ordinance are in direct conflict with the provisions of such ordinances and such Code, in
which event conflicting provisions of such ordinances and such Code are hereby repealed.
SECTION 3
It is hereby declared to be the intention of the City Council that the sections,
paragraphs, sentences, clauses and phrases of this ordinance are severable, and, if any
phrase, clause, sentence, paragraph or section of this ordinance shall be declared
unconstitutional by the valid judgment or decree of any court of competent jurisdiction, such
unconstitutionality shall not affect any of the remaining phrases, clauses, sentences,
paragraphs and sections of this ordinance, since the same would have been enacted by the
City Council without the incorporation in this ordinance of any such unconstitutional phrase,
clause, sentence, paragraph or section.
SECTION 4
The City Council fords that all acts, conditions and things required by provisions
of the Constitution of Texas and Charter and Ordinances of the City of Fort Worth
precedent to and in the adoption of this Ordinance have been done, have happened and
have been performed in proper and lawful time.
SECTION 5
This ordinance shall be in full force and effect from and after its adoption.
ADOPTED this 23rd day of October, 2007.
Marty Hendrix
City Secretary
APPROVED AS TO FORM AND LEGALITY:
etiti Coleman Brown
Assistant City Attorney
C®ty ®f F®rrt ®rfla, Texas
Mayor and Council Communication
COUNCIL ACTION: Approved on 10/23/2007 -Ordinance No. 17848-10-2007
DATE: Tuesday, October 23, 2007
LOG NAME: 12EARNINGS CAP REFERENCE NO.: G-15939
SUBJECT:
Adopt an Ordinance to Amend Chapter 2, Article VI, Division 1, "Employees' Retirement Fund,"
Section 2-207 of the City Code to Place a Cap on the Amount of Pensionable Earnings Considered
in the Compensation Base for Determining Benefits
RECOMMENDATION:
It is recommended that the City Council adopt the attached ordinance amending Section 2-207
"Compensation base for determining benefits" of the City Code to place a 12 percent cap on the
pensionable earnings used in the compensation base for determining pension benefits.
DISCUSSION:
In an effort to address the unfunded liability of the Employees' Retirement Fund, the staff recommends
passage of the attached ordinance which will place a 12 percent cap on the pensionable earnings used in
the compensation base for determining pension benefits. Currently, pension benefits are determined by
averaging the highest three years of pensionable earnings, multiplying that amount by years of service, and
then multiplying that number by the 3 percent multiplier. The attached ordinance will use the fourth highest
year of pensionable earnings to establish a base. The pensionable earnings used in the compensation
base for the third highest year of pensionable earnings can not exceed 112 percent of the base
amount. The pensionable earnings used in the compensation base for the second highest year of
pensionable earnings could not exceed 112 percent of the cap amount for the third highest year of
pensionable earnings. The pensionable earnings used in the compensation base for the highest year of
pensionable earnings could not exceed 112 percent of the cap amount for the second highest year of
pensionable earnings.
It is believed that this change could reduce the unfunded liability of the Employees' Retirement Fund by
seven million dollars.
FISCAL INFORMATION/CERTIFICATION:
The Finance Director certifies that this ordinance will have no material effect on City funds.
TO Fund/AccountlCenters
FROM Fund/AccountlCenters
Submitted for City Manager's Office b~ Karen Montgomery (6222)
Originating Department Head: David Yett (7623)
Additional Information Contact: David Yett (7623)
Logname: 12EARNINGS CAP Page 1 of 1