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HomeMy WebLinkAboutIR 8267 INFORMAL REPORT TO CITY COUNCIL MEMBERS No.- 8267 To the Mayor and Members of the City Council August 15, 2000 Subject: COST PARTICIPATION IN RETIREE HEALTH INSURANCE BY THOSE ion HIRED AFTER OCTOBER, 1988 AND WHO RETIRE AS "LINE OF DUTY" DISABILITY RETIREES Implementation Staff proposes to utilize the "credited years of service" as determined by the Retirement Office for "line of duty" disability retirees as the definition of"Years of Service" used to calculate the City's portion of retiree health insurance for persons hired after October 5, 1988 and who retire due to a "line of duty" disability. Members of the Government Relations Committee concurred with this approach at their meeting of August 8, 2000. Discussion The total annual premium cost of coverage for a non-Medicare eligible retiree for the plans recommended for the 2000-2001 benefit year is $3,105.60. This, is the amount that the City pays to provide health insurance to non-Medicare eligible retirees hired prior to October 5, 1988 and who have retired or who will retire during the period October 1, 2000 through September 30, 2001. This amount is subject to change annually based on renewal rates, For person hired after October 5, 1988, the City's participation in the cost of their retiree health insurance is based on their"completed years of service" as follows: City Retiree Completed Will Pay Will Pay Years of Of Basic Of Basic Service Coverage Coverage <5 years NO ELIGIBILITY BEYOND COBRA 5 to <15 33% 67% + optional additional coverage 15 to <25 67% 33% + optional additional coverage 25 and over 100% 0% + optional additional coverage When this policy was adopted in 1988, there was no definition of"Completed Years of Service". A question arises regarding this definition for those persons who retire due to a "line of duty" injury or illness. The staff of the Risk Management Department has interpreted Completed Years of Service" variously as tenure (actual service period) or"credited years of service" (those years of service on which the person's pension benefit is based) for persons who have retired since 1988 with a"line of duty" retirement. INFORMAL REPORT TO CITY COUNCIL MEMBERS No.- 8267 00_P1 I T"'.4 August 15, 2000 To the Mayor and Members of the City Council Page 2 of 2 Subject, COST PARTICIPATION IN RETIREE HEALTH INSURANCE BY THOSE HIRED AFTER OCTOBER, 1988 AND WHO RETIRE AS "LINE OF DUTY" DISABILITY RETIREES Persons who retire as a result of a "line of duty" injury or illness receive a"credited years of service" period by the Retirement Office that represents a service period adjusted to their earliest available normal retirement date. See the attached information excerpted from the Retirement Ordinance for how this "credited service"period is determined for those persons who are granted a retirement benefits resulting from a"line of duty" injury or illness. scope Research to date has identified thirteen persons who have retired due to a"line of duty" injury or illness since October 5, 1988. Applying the staff's proposed implementation of the"credited years of service" definition to these thirteen persons would result in: o No effect for two (2) retirees o Cost reductions for seven (7) retirees u Cost increases for four (4) retirees (who are under-participating, regardless of whether tenure or credited service determination) The attached spreadsheet details this information. Absent City Council direction to the contrary, the following specific action will be taken with regards each of these individuals: • Reimburse the cost differential to the four retirees who would have experienced less cost participation since their retirement • Permit the three (3) retirees who opted out of the Plan to re-enroll themselves and their eligible dependents if they so choose within a specified period after notice • Notify the four retirees who are not currently being charged the correct amount that, effective October 2000; their deductions will be increased to comply with the policy. Please let me know if you have questions or desire additional information. 6Z Bob Terrell City Manager Attaclu-nents, ISSUED BY THE CITY MANAGER FORT WORTH,TEXAS 0 0 0 O o o L: Lo Lo Lo Lo 0 0 o c0 coctrcoco0P` r- r- r- r- 00 N o Lo Lo 410 Lo U) Lo 0 0 0 0 O Lo U) �jO aaOaOOw: wwwwaa y c O N 0 Cl) c') <) c7 c') c') C14, N N N c') c') F+ C QA QA to EA EA ER 64 EA EA EA EA EA EA U O Q N Lo O O. 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N N N N N U } J W Q co N N r- t) O Cl)O 000 000 Cl)0 U z co CS oi ch 4 4 cn r-- 00 00 00 c) c) Q H w 00 0) 0 0 t0 w O � O N N O O 0) N 0) O f}'S=0) 0) 0) 0 0) 0) ~ 0 0 `- O O O S C'S M r' c0 � c0 �ncoemcoo �nv � � rn � rnrn m m m m m m m rn rn w rn mm L u W O O - O O O 67 O O O O rn 0 00 O M n 04 Cl) III! ` it it a a a Disability Pension Benefits Forms - Employees' Retirement Fund Page 1 of I ]Disability Pension Benefits r , DISABILITY PENSION - IN LINE OF DUTY , I 0 ' When a member is injured in the line of duty, vested or not, the �� pension benefit is computed to the earliest normal retirement ��' date of the member. ;¢ r, , r, ..,7 DISABILITY - NOT IN LINE OF DUTY When a member becomes disabled,while not in the line of duty and is a vested member of the Fund, he/she will receive a prypp�u{,� � pension bene ft based on actual years of credited service. When a member becomes disabled while not in the line of duty and who is not vested is not eligible to receive a disability pension. That member is only entitled to a refund of his or her contributions plus regular interest. Disability Pension Benefits Forms are available online. Click on the format desired. pdf format* Word Format Ir,., ' "pdf files require Adobe Acrobat Reader INFORMATION CONTACT US I PEOPLE I ORDINANCE PUBLICATIONS I INVESTMENTS I BENEFITS I SITEMAP Employees' Retirement Fund (817) 429-1694 (817) 36--660- -IVfETROJ817M - -0363 EMAIL ValentW ci.fort-worth.tx.us dY. http://www.cfwnet.org/retirement/disbenefits.htm 8/10/00 Sec. 2-211. Disability pensions. (a) Definition of disability. A member is disabled (or continues to be disabled) if, because of bodily injury, disease or mental illness, the member is incapacitated for life, in spite of reasonable accommodations by the city, from performing the essential functions of (i) the trade, profession or occupation in which the member was employed by the city when the member suffered the bodily injury, disease, or mental illness and (ii) any other position which the board determines to be reasonably comparable to the position held by the member, taking into account the member's education, qualifications, experience, salary and other factors which the board deems appropriate; provided, however, that no physical condition existing at the time of entry into the fund shall be a basis for a disability pension prior to vesting. (b) General provisions. (1) Such disability must exist for at least ninety (90) consecutive days prior to application for a disability pension. (2) Such disability must not have been contracted, suffered or incurred while the member was engaged in, or did not result from the member having engaged in, a criminal enterprise, or from habitual drunkenness, addiction to narcotics, self-inflicted injury, or from voluntary or involuntary service in the Armed Forces of the United States (including the United States Merchant Marine), any of its allies or any other foreign country. (3) Notwithstanding the provisions of section 2-211(d) and section 2-211(e), no disability pension shall, at the time of commencement, exceed the member's rate of earnings. (4) To assist the board in making disability determinations, the city shall provide the executive director with city job descriptions and qualifications, related salary (roll ` ranges, and other appropriate information as requested. (5) Continuation of a disability pension, whether granted before or after the enactment of this division, shall be subject to all the provisions of this section 2-211, including review and determination of the member's eligibility for a disability pension. (c) Qualification for disability pension. (1) A member shall not qualify for a disability pension as hereinafter provided unless one (1) or more duly licensed and practicing physician(s) appointed by the executive director has determined that the member is not capable of performing the essential functions of the positions identified under section 2-211(a)(1) and section 2-211(a)(2). Determination of the existence of disability shall not be made until ninety (90) days after the date such disability is alleged to have commenced, and benefits shall not commence before the first day of the month following the month in which such ninety-day period ends. (2) The executive director shall have the appointed physician(s) conduct an annual medical examination after a disability pension has been granted (unless deemed not necessary by the executive director due to the member's medical condition) and at any other time deemed necessary by the board in order to determine whether the disability is continuing. The fund will pay the expenses for medical examinations directed by the executive director or board. To continue to receive a disability pension, the member shall submit to any medical examination required by the executive director or board. (3) If at any time the board is in reasonable doubt as to whether the member is disabled as above defined, it may suspend the disability pension until the doubt is resolved, which shall occur within a reasonable time. Any disability pension shall be terminated upon the board's determination that the member is not disabled as defined in section 2-211(a). (4) No disability pension coverage shall be provided during a service break in excess of ninety (90) consecutive days unless the service break was caused by sickness or accident leading to total disability. (5) The disability pension specified herein shall not be payable during any period for which wages are received from the city, the State of Texas or any other division of government while performing the duties of a firefighter or peace officer, (6) Falsification or omission on any part of the employment application of prior conditions or injuries for which a disability pension is or has been sought, falsification or omission on any part of the disability pension application, or falsification or omission in connection with the continuation of a disability pension shall constitute grounds for denial of a disability pension or for revocation of any disability pension previously granted. (7) The board's determination on all matters concerning the granting, refusing or revoking of a disability pension shall be final and conclusive on all parties, and no appeal can be made therefrom. A member is entitled to a reasonable hearing (at which the member may appear in person, with or by a representative, or in writing) before the board makes its determination. (8) No disability pension shall be granted (or continued) while the member is working for the city; provided however, a member may be granted a disability pension if the executive director or the board has been informed by the city that the member's employment is about to be terminated by the city because of the member's inability to perform the essential functions of the member's position. Any such disability pension granted under this section 2-211(c)(8) shall not become effective until the month after the member has stopped working for the 00011111 city. (9) Except as otherwise provided by law, to be eligible to continue receiving a disability pension, a member must have complied with the medical recommendations (including rehabilitation therapy and treatment) as prescribed by the member's treating physician(s), the physician(s) appointed by the executive director and/or the Texas Rehabilitation Commission. (d) Disability in line of duty. (1) If a member, whether or not vested, becomes disabled as above defined while in line of duty, the member shall receive an annual life pension, the amount of which shall be the specified percentage of the member's compensation base multiplied by the member's total years of credited service which would have accrued if the member had worked to the member's normal retirement date, but not less than two hundred fifty dollars ($250.00) per month. For purposes of the preceding sentence, the specified percentage of the member's compensation base shall be two and seventy-five one-hundredths (2.75) percent, unless the member is already eligible to retire on or after the member's normal retirement date, in which case the specified percentage shall be three (3.0) percent. (2) As used in this section 2-211(d) and section 2-211(e) below, "line of duty" means in the course of the operations usual to a member's employment, including all operations necessary, incident, or appurtenant thereto or connected therewith, whether such operations are conducted at the usual place of employment or elsewhere. (e) Disability not in line of duty. If a vested member becomes disabled as above defined while not in line of duty, the member shall receive an annual life pension, the amount of which shall be the specified percentage of the member's compensation base multiplied by the member's total years of credited service to date of actual retirement. For purposes of the preceding sentence, the specified percentage of the member's compensation base shall be two and seventy-five one-hundredths (2.75) percent, unless the member is already eligible to retire on or after the member's normal retirement date, in which case the specified percentage shall be three (3.0) percent. If a member becomes disabled while not in the line of duty before the member is vested, then section 2-208 shall apply. (f) Recovery from disability. If the board determines that a disabled member receiving a disability pension hereunder is no longer disabled as above defined, the member's disability pension shall immediately cease. If such member is re-employed by the city immediately following such determination by the board, the member's fund membership shall be reinstated as of the date of such re-employment, with full credited service to the date of disability. The member shall receive no additional credited service for the period of disability, provided however, that such period of disability shall be used to determine attainment of normal retirement date and special retirement date. If such member is not re-employed by the city immediately following certification of recovery, the member shall be considered as a terminated fund member and shall have no further interest in the fund other than a refund of any excess of the member's total contributions, plus regular interest (at the regular interest rate in effect on the date of any refund), over the total of disability payments made to the member; provided, however, that if such member had a vested interest in pension credits as of the date of which the member was certified disabled, the member shall receive a vested termination pension from the later of the date of certification of recovery or attainment of the vested retirement date under this division equal to the amount which would have been payable under the provisions of section 2-208 had the member terminated employment on the date the disability pension began. Any death benefits thereafter shall be determined in accordance with section 2-212. (g) Report of earned income or net earnings from self-employment. Any disabled member who has not attained normal retirement date or special retirement date and who is receiving a disability pension shall submit to the executive director prior to May 1 of each year following disability retirement a copy of the member's signed income tax return filed for the preceding year, with all attachments thereto, along with all tax returns and attachments for all of the member's affiliated entities, including, but not limited to, partnerships, corporations or other entities in which the member, or any relative, owns any interest, including community or separate property, and for which the member performs any services, whether compensated or not, as proof of the member's earned income and net earnings from self-employment for that year obtained from any occupation or employment. At the end of the first year of disability retirement and by May 1 of each subsequent year, a disabled member shall also submit to the executive director an affidavit on the executive director's approved form swearing that the member's earned income and net earnings from self-employment are fully disclosed on the tax returns provided to the executive director and that the disabled member has not received any other compensation, directly or indirectly, for services rendered by the disabled member, nor performed any services for which the member received no compensation except as disclosed in the affidavit, including amounts paid to other affiliated entities for the benefit of the disabled member or to any relative of the disabled member. If the Internal Revenue Service has approved an extension to file a tax return and the tax return has not been filed by May 1, the member shall provide the executive director with a copy of the extension by May 1, and a copy of the tax return with all attachments and the related affidavit, within two (2) weeks after the tax return has been filed. If the member's total receipt of earned income, net earnings from self-employment, and city disability retirement benefits, not including any cost of living adjustment increase or increase in the formula under which the pension is calculated, shall exceed the member's annualized base hourly rate of pay at the time a disability pension was granted by the board, then, as soon as practicable, the board shall reduce the amount of disability benefits to be paid to the member. In reducing a member's disability pension due to such excess earnings, the board shall consider the member's then current earnings, and attempt to recover the cumulative excess earnings and preclude excess earnings in the future. In the event that a member's disability pension is .............. Imp reduced in excess of the amount required, the board shall pay such excess to the member. For purposes of section 2-211(g), base hourly rate of pay shall not include overtime, acting, assignment, holiday, longevity, educational incentive, safety award, incentive, shift differential or any other special or premium pay. The board shall withhold a member's disability pension upon the member's failure to submit on a timely basis the required income tax returns with all attachments thereto and related documents. If the member subsequently provides the required documentation by the end of the calendar year in which the return was due, the board shall cause the member's disability pension to be reinstated, subject to the other provisions of this division and including the payment of any previously withheld amounts,without interest. If the member fails to provide the required documentation by the end of the calendar year in which the return was due, the member's disability pension shall be terminated and the member shall not be entitled to any payment for the period during which the documentation was not provided. For purposes of section 2-211(g), any amounts paid to a member's affiliated entity in connection with the performance of services by the member shall constitute "earned income," and any attempt to circumvent the limitations under this division on earned income and net earnings from self-employment through the use of affiliated entities shall be grounds for the board to terminate the member's disability pension. (Ord. No. 13543, § 1, 8-11-98)