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Home My WebLink AboutOrdinance 11716ORDINANCE NO. ~~'/ AN ORDINANCE AMENDING ORDINANCES NOS. 2999, 4060,, 4250, 4304, 4354, 4430, 4860, 4861, 4873, 4875, 5226, 5259, 6393, 6556, 7056, 7317, 7875, 8674, 8843., 9247, 9532, 10081, 10291, 10369, 10385, 10564, 10607, 10679, 11126, 11238, 11401, 11412, AND 11608, CODIFIED AS CHAPTER 2, ARTICLE VI, DIVISION 1, ENTITLED "EMPLOYEES RETIREMENT FUND", OF THE CODE OF THE CITY OF FORT WORTH (1986), AS AMENDED, WHICH ORDINANCES ESTABLISH AND PROVIDE FOR A RETIREMENT SYSTEM, RETIREMENT PLAN AND BENEFITS THEREUNDER FOR EMPLOYEES OF THE CITY OF FORT WORTH; CLARIFYING THE DEFINITION OF CALENDAR YEAR EARNINGS; AMENDING THE DEFINITION OF COMPENSATION BASE TO~ATTRIBUTE RETROACTIVELY LUMP SUM AWARDS OF PAY FOR PRIOR SERVICES; MAKING THIS ORDINANCE CUMULATIVE; PROVIDING FOR A SEVERABILITY CLAUSE; AND PROVIDING AN EFFECTIVE DATE. BE IT ORDAINED BY THE CITY COUNCIL OF THE CITY OF FORT WORTH, TEXAS: That Ordinance No. 2999, passed and adopted by the City Council of the City of Fort Worth on the 24th day of September A.D. 1952, as amended by Ordinance Nos. 4060, 4250, 4304, 4354, 4430, 4860, 4861, 4873, 4875, 5226, 5259, 63.93, 6556, 70'.16, 7317, 7875, 8674, 8843, 9247, 9532, 10081, 10291, 10369, 10385, 10564, 10607, 10679, 11126, 11238, 11401, 11412, and 11608, be and the same is hereby amended as follows: SECTION 1. That Chapter 2, Article VI, Division 1, Section 2-201 - "Definitions," Paragraph O., of the Code of the City of Fort Worth (1986), as amended, be and is hereby further amended substituting the following language in lieu thereof, and after such amendment, said Paragraph O. shall read as follows: "O. Earnings shall mean the base hourly rate of pay actually paid to an employee by the City for services rendered to the City during the calendar year to which such pay is attributable plus overtime, acting, assignment, o i ay, longevity, educational incentive, safety award, incentive and shift differential pay, as reported on-the employee's W-2 form. Regardless of the fact that the following payments may be shown upon an employee's W-2 form, Earnings shall not include: (1) any non-:~>alary allowance (such as uniform reimbursement, automobile usage and mileage, etc.), (2) lump sum payments received at time of termination of unused vacation leave, sick leave and personal leave, and (3) any award by a court, administrative body, or settlement actreem.ent_ in excess of Earnings. However, an employee participating in a City- sponsored deferred compensation plan shall have the amount of any deferred compensation credited to that employee during the calendar year added to earnings reported on the employee's W-2 form to arrive at total earnings for Retirement Fund matters. Notwithstanding the foregoing, earnings in excess of $200,000, if any (or such other amounts as may be determined by taking into account the cost-of-living adjustment provided under section 401(a) (17) of the Code) , shall be disregarded for all purposes of this Ordinance." SECTION 2. That Chapter 2, .Article VI, Division 1, Section 2-207 "Compensation Base for Determining Benefits," of the Code of the City of Fort Worth (1986), as amended, be and is hereby further amended by substituting the following language in lieu thereof, to wit: "Section 2-207. Compensation Base For Determining Benefits. Pension, death, disability and vested termination benef its shall be based upon the member"s Compensation Base which shall mean the average Earnings which were paid to the member by the City for employment with the _ City during any five (5) calendar years in which the member had the highest Earnings. 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 -2- SECTION 3. That provisions of this Ordinance shall be cumulative of and in addition to all other ordinances of the City of Fort Worth relating to pensions, which ordinances are hereby preserved and continued in force and effect; provided, however, that in the event of any conflict, the provisions of this Ordinance shall control. SECTION 4. a If any provision,. section, part, subsection, sentence, clause, phrase or paragraph of this Ordinance shall be declared invalid or unconstitutional, the same shall not affect any other portion or provision hereof, and all other provisions shall remain valid and unaffected by any invalid portion, if any, and the City Council now says that if it had known at the time of the passage of this Ordinance that any portion of said Ordinance was invalid, it would not have adopted such invalid part.. SECTION 5. The City Council finds 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 6. This Ordinance shall be in full force and effect from and after the date of its adoption and it is so ordained. -3- APPROVED AS TO FORM AND LEGALITY: ~~ ~ ~- ~"`' ty Attorney ~/ Date: /~- aZ '~"" ~7 ~T ADOPTED : ~~ ~~ EFFECTIVE: ~~_ ~- ~~f -4- City of Fort i~orth, Texas Mayor and Council Communication DATE REF~RBNCB NUD~BBR LOG NAMS PAGE 11 /01 /94 **G108fi6 13CALC 1 of 2 3USJ8CT CLARIFICATION OF CALENDAR YEAR EARNINGS FOR THE CALCULATION OF RETIREMENT BENEFITS RECOMMENDATION It is recommended that the City Council adopt the attached ordinance amending the City's retirement plan to clarify the definition of calendar year earnings and retroactively attribute lump sum awards of pay to the calendar year in which it would otherwise have been received DISCUSSION When employees receive lump sum payments of back-pay after an extended disciplinary suspension or termination, it skews their compensation base for determining retirement benefits In computing retirement benefits, an employee's compensation base is defined as the average earnings paid to the employee during any five calendar years in which the employee had the highest earnings For example, compare the compensation base of a~n employee (A) who has been working for the last seven years before retirement with that of an employee (B) who was suspended and then reinstated after 18 months with an award of back-pay Emplovee A Emalovee B 532,000 532,000 33,000 33,000 34,000 34,000 * 35,000 17,000 36,000 -0- 37,100 91,000 * 38,200 38,200 * *High Five Avg *High Five Avg is 536,060 is 546,640 Assuming both employees retire after 28 years of service under the 2 7% multiplier, Employee A (with no disciplinary suspension) receives an annual retirement benefit of 527,261, and Employee B receives an annual benefit of 534,503 With the adoption of the proposed amendment, both employees would receive an annual benefit equal to 527,261 The Board of Trustees of the Employees' Retirement Fund has reviewed this proposed amendment and recommends approval -~~- Printed on recycled paper City of Fort Worth, Texas Mayor and Council Communication DATE 11 /01 /94 RSFSRSNCS NUbIBSR **G10866 LOG NAME 13CAL.C PAGS ' 2 of 2 SUBJECT CLARIFICATION OF CALENDAR YEAR EARNINGS FOR THE CALCULATION OF RETIREMENT BENEFITS FISCAL INFORMATION/CERTIFICATION This amendment will have no significant actuarial impact on the Retirement Fund CBI Submitted for City Manager's FUND ACCOUNT CENTER AMOUNT CITY SECRETARY Office by: (~) Charles Boswell 85()0 ovE~ Originating Department Head: O f (~iCI~ CITY C Jim Keyes 8500 (from) N~V ~ ~An~ For Additional Information ~ L Contact: Ci ~ cf F~ ort Worms of the ~'ex ~ Jim Keyes 8500 , as i~~ Printed on recycled paper