HomeMy WebLinkAboutSummary Form 6-12-09Date: 5/27/2008
AGENDA ITEM SUMMARY FORM
FILE ID: 06 - 00 G 81
Commission Meeting Date: 6/12/2008
FR -3
Requesting Department: City Manager's Office
District Impacted: N/A
Type: ❑ Resolution ® Ordinance ❑ Emergency Ordinance ❑ Discussion Item
❑ Other
Subject: Amendment to GESE Retirement Plan
Purpose of Item:
It is respectfully recommended that the City Commission adopt the attached Ordinance amending
Section 40-250 of the City Code, to provide a period of 90 days in which to allow unclassified
employees to transfer from the defined contribution plan (401 A) administered by ICMA ("ICMA") to
the Miami GESE Retirement System (the "Pension").
Information:
See Supplemental Page
Budget Impact Analysis
Is this item related to revenue?
Is this item an expenditure? If so, please identify funding source below.
General Account No:
Special Revenue Account No:
CIP Project No:
NO Is this item funded by Homeland Defense/Neighborhood Improvement Bonds?
Start Up Capital Cost:
Maintenance Cost:
Total Fiscal Impact:
CIP
If using or receiving capital funds
Grants
Purchasing
Chief
0 1 1 V
Final Approvals
(SIGN AND DATE)
Budget
Risk Management
Dept. Director
City Manager
Page 1 of 1
Supplemental Page
Background Information:
In 2007, employees in the ICMA plan requested an opportunity to migrate into the GESE
Pension. A review of the pension systems of neighboring municipalities indicated that
several of our neighboring municipalities had recently addressed similar requests (401A
type plans were considered to contain the least desirable pension benefits). In recent
years the cities of Hialeah, Miami Beach, Ft. Lauderdale and Hollywood have recognized
the need to create more equitable pension programs for all employees and adopted plan
provisions allowing for migration to the municipalities' defined benefit plans.
In response to the employees request the City Administration requested that the GESE
actuary, Buck Consultants, complete an analysis of the ongoing cost associated with
transferring all eligible employees currently in the ICMA 401A plan into the GESE plan.
Their findings indicate that the transfer would increase the City's ongoing contribution by
approximately $884,000, but reduce the percentage of payroll contribution by
approximately 2%, assuming all eligible employees elect the transfer option. Based on
the Administration's analysis we expect approximately 20% to 30% of the eligible
employees to take advantage of the option, thus increasing the ongoing contribution by
only $265,000. The amendments to Sections 40-250 and 40-251 provide a short
"window" period (90 days) for employees currently participating in the ICMA to transfer
to the Pension. That election would be irrevocable.
On March 28, 2008 the GESE Retirement Trust considered and approved an item
accepting the report findings and affirming that Trust will accept the eligible employees
into the pension. Their consideration does not bind or otherwise commit the City to
allow the transfer, as Commission approval is required.
Maintaining a quality workforce is a significant challenge for the Administration. The
City relies on its managerial staff to provide the sound, professional, expert and efficient
working of government, as well the quality of services in all areas that City residents
expect and deserve. Authorizing unclassified employees to migrate to the Pension will
bring us closer to meeting the needs of our managerial staff, it will position the City more
favorably to compete with neighboring municipalities in the retention of our managerial
staff and reduce the expenses associated with new hires (recruitment, training and high
market salaries).