HomeMy WebLinkAboutIR 7076 INFORMAL REPORT TO CITY COUNCIL MEMBERS NO.— 7076
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,,XPTrA,0 December 3, 1985
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Up To the Mayor and Members of the City Council
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Subject: ADJUSTMENT TO BASE PENSION OF RETIREES
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Approximately four years ago, various City Council members ,
the Retirement Fund Board of Trustees and City staff developed
a general plan for making revisions to the City pension pro-
gram to benefit both current and retired employees . Major
accomplishments implemented to date are :
1 . Revisions to the Retirement Ordinance
adopted June 7 , 1983
a. Two per cent (21) increase in retirees '
compensation base multiplied by total
credited service to date- of retirement .
b. Change in composition of Board to
broaden representation.
2 . Selection of new actuarial consultants and
revision of actuarial assumptions .
3. Diversification of the investment program;
and
4 . Revisions to the Retirement Ordinance adopted
November 6 , 1984.
a. Change eligibility for normal retirement
to the "Rule of 80"
b. Change provision for disability retirement
to require that the employee only be
disabled from occupation for which employed
rather than from any employment .
The revisions to the Retirement Ordinance on June 7 , 1983 and
November 6 , 1984 reflected those changes which were determined
to be the highest priority of current and retired members and
which could be made with neither a predicted negative impact
on the actuarial soundness of the Fund nor require additional
contributions from the City or employees . The 1983 two per cent
adjustment to the compensation base was adopted to bring relief
to retirees in light of the effect of the inflation which pre-
vailed in the 1970' s and early 80 ' s .
ISSUED BY THE CITY MANAGER FORT WORTH, TEXAS
7076 2
INFORMAL REPORT TO CITY COUNCIL MEMBERS W.
3
To the Mayor and Members of the City Council December , 1985
Subject: ADJUSTMENT TO BASE PENSION OF RETIREES
This was done with the knowledge that such relief was
limited and that the situation justified being addressed
again after other priority needs had been resolved .
As the January 1 , 1985 actuarial report showed that there
was a one per cent (1%) margin between the contribution
level in place and the contribution rate required , under
the assumptions used , to support the benefits of the Fund ,
the Board requested from the actuary a special study to
determine the additional cost of making an ad hoc adjustment
to the benefits of current retirees . This study revealed
that a one per cent (11) adjustment to the base pension of
retirees would use . 58% of the existing 1% margin which , in
the opinion of the actuary, would have no negative impact
on the actuarial soundness of the Fund .
With this amendment to the Ordinance , it is the opinion of
the Retirement Board that the remaining priority items (as
identified in 1981) is to bring about a reduction in the
contribution level required from the City and the employees
and that any future improvement in the actuarial strength
of the Fund should be used for this purpose .
6& Douglas Harman
—/City Manager
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ISSUED BY THE CITY MANAGER FORT WORTH, TEXAS