HomeMy WebLinkAboutIR 7472 REPORT TO CITY COUNCIL MEMBERS No. 7472
June 12, 1990
To the Mayor and Members of the City Council
000k Subject: SUPPLEMENTAL RETIREMENT INFORMATION
10 7 3
At the City Council ' s June 5th Pre-Council discussion of proposed
amendments to the Retirement Ordinance, some additional
information was requested by the Council . Responses to these
requests are as follows :
City Contribution for Terminated Employees
In calendar year 1989, 73 employees retired from the City and 391
city employees terminated prior to retirement . During the period
of employment the Retirement Fund had received contributions from
these employees in the amount of $1 , 908, 275 and contributions
from the City for these employees in the amount of $2 ,862 , 395.
Following termination each employee received a refund of their
contribution plus annual interest on their contribution
calculated at 2% for years prior to 1983 and 5 1/4% for
subsequent years. The City contribution remained in the Fund.
Employee Options Under City Manager's Proposals
/``
At the May 22nd Pre-Council Meeting, a presentation was made
using as an example an employee with the following assumptions:
born January 1941
employed January 1970 at age 29
salary at $27 , 945 in 1985 increasing 4% annually
to $54 , 435 in 2002-
80 points (combination years of age and years of service)
in June 1995
If the City Manager 's proposed amendments to the retirement
ordinance are adopted, this employee will have retirement options
as follows:
1) 65 Point Vested Retirement - Currently having 70 points
(20 . 5 years of service and 49. 5 years of age) can terminate
anytime and "freeze" retirement benefits earned to date to
be received starting in June 1995 . This would be $15, 514
annual benefit ($30 , 321 [average high 5 years salary] x 2 . 5
x 20 .5 [years of service] ) . If not taken this year,
employee will continue to have this option with future
retirement benefit growing according to increase in years of
service and earnings .
pr-1
ISSUED BY THE CITY MANAGER FORT WORTH, TEXAS
INFORMAL REPORT TO CITY COUNCIL MEMBERS No. 7472
June 12, 1990
aSot?,-� To the Mayor and Members of the City Council
Exp P"',
Subject: SUPPLEMENTAL RETIREMENT INFORMATION
1873
2) "g_mrly! ___ Retirement - In January , 1991 , at age 50 , employee
can opt to retire with an actuarial adjustment to the
retirement benefit earned, such adjustment being a reduction
of 5/12 ' s per month for each month commencement of the
retirement benefit precedes the date employee would have
accumulated 80 points . If the retiree retires in January,
1991 , he will have an earned benefit of $16, 529 ($31 , 483
[average high 5 years salary] x 2 . 5% x 21 [years of
service] ) which, if he chooses to start drawing immediately,
will be reduced by 22 . 5% (5/125 x 54 months) to $12 , 810 .
3) Full 80 Points Retirement - Employee may continue to work
until 80 points are accumulated in June, 1995 , and earn a
retirement benefit of $23, 480 ($36,830[average high 5 years
salary] x 2 . 5% x 24 . 5 [years of service] ) which may be
started immediately upon retirement . Benefit is equal to
61 . 25% of average highest five years of salary.
4) "Late" Retirement - Employee may continue to work beyond
accumulation of 80 points and continue to increase the
retirement benefit to be received upon eventual retirement.
Retirement Plan has no maximum accumulations . This employee
can earn a retirement benefit equal to 1005 of average high
five years salary at age 69 and 40 years of service. -
The "employed at age 29" assumption is based on the average
employment age of all general employees. If this assumption is
changed to age 25, the average employment of age Public Safety
employees, options would be as depicted on the following table.
Retirement Service Benefit
Date Age Years Starts Amount
Vested 65 Point
Retirement 7/90 45 .5 20 .5 7/97 $15 ,514
Early Retirement 1/95 50 .0 25 .0 2/ 95 $20 ,238
Full 80 Point 6/97 52 . 5 27 .5 7/97 $27 ,387
Late Retirement 6/97+ 52 . 5+ 27 . 5+ 7/97+ $27 , 387+
( 1/00 55 .0 30 .0 2/00 $31 ,072)
(1/05 60 .0 35 .0 2/05 $47 , 703)
(1/10 65 .0 40 .0 2/10 $66,331)
Note: In both examples, employees would have been eligible for
65 vested retirement prior to present time. For comparison
purposes it is assumed that this option has not been exercised
and is being compared against other options available if
Retirement ordinance is amended in June, 1990 .
4-
6c'1-15avid Ivory
-ISSUED BY THE CITY MANAGER City Manager FORT WORTH, TEXAS