HomeMy WebLinkAboutIR 9802 INFORMAL REPORT TO CITY COUNCIL MEMBERS No. 9802
To the Mayor and Members of the City Council September 1, 2015
h�T�i7 Page 1 of 2
�i
�i7 Y
*a SUBJECT: PENSION REVIEW COMMITTEE
#qrF rn
f e'?5
On July 21, 2015, the City Council held a joint meeting with the Employees' Retirement Fund
Board of Directors. The bodies received the January 1 , 2015 valuation data. In addition, they
received an analysis prepared by Gallagher Benefit Services that evaluated the results of the
benefit changes and COLA selection processes that have occurred over the last several years.
By most measures, the changes made in the past several years have improved the financial
position of the retirement fund and more accurately computed future liabilities. At the same time,
there remains an unfunded gap or liability. For example, the amortization period to address the
unfunded liability is reported at 55.7 years, exceeding the industry standard of 30 years. As a
result, several members of the City Council requested that the City Manager form a committee,
including employee representation, to determine what additional steps may be necessary to
manage the risk of the plan and improve the overall financial condition.
The City Manager's recommended approach is summarized below:
Committee Composition (7 members)
• City Manager David Cooke
• Fund Executive Director Joelle Mevi
• Fort Worth Police Officers' Association
• International Fire Fighters Association #440
• A general employee representative
• (2) Representatives of businesses/taxpayers/municipal financial advisors
'
Committees Charge
The committee will be charged with:
• Defining and assessing the long-term sustainability of the Fort Worth Employees' Retirement
Fund (ERF) and evaluating options to improve the current position of the retirement fund,
without directly or indirectly — requiring additional contributions from taxpayers/ratepayers.
In order to meet the charge, the Committee will conduct the following:
• Discussion and agreement in how long-term sustainability will be defined (as it
relates to amortization period; discount rates; funded ratios, etc.)
• Evaluation of the competitiveness of the City's pension plan in the context of total
compensation with the goal of maintaining competitive recruitment and retention.
Total compensation will include salary, pension, healthcare, and other benefits such
as paid leave.
ISSUED BY THE CITY MANAGER FORT WORTH, TEXAS
INFORMAL REPORT TO CITY COUNCIL MEMBERS No. 9802
To the Mayor and Members of the City Council September 1, 2015
h�T�i7 Page 2 of 2
�i
�i7 Y
*a SUBJECT: PENSION REVIEW COMMITTEE
#qrF rn
Yg7'3
• Evaluation of the pension marketplace to include other Texas stand-alone plans and
the Texas Municipal Retirement System (TMRS) to include, at a minimum, the
following data.
o Financial condition of other plans
o Vesting
o Benefit formula (multiplier, final salary calculation, overtime, etc.)
o Employer/Employee Contributions
• Submitting a report to the Mayor and City Council detailing the results of the
evaluation and identifying options that the City Manager may recommend to the City
Council to improve the condition of the retirement fund.
Related Work & Considerations
At the same time this Committee will be completing its charge, we must consider other work
which will be underway or occurring during the Committee timeframe, including:
• City will commence Police Meet and Confer process in October 2015.
• Retirement Fund will perform an Experience Study, beginning in January 2016.
Timeline
• Establish Committee: September 2015
• Define/understand goals and data collection needs and methodologies: October 2015
• Data Collection/Benchmarking: November/December 2015
• Identify Scenarios for Evaluation: December 2015/January 2016
• Discuss/Recommend changes and consider implications of upcoming Experience Study
and Valuation: January/February 2016
We will update the City Council as specific committee members are identified and agree to
participate. In the meantime, please let me know if you have any additional questions.
David Cooke
City Manager
ISSUED BY THE CITY MANAGER FORT WORTH, TEXAS