HomeMy WebLinkAboutReportIn the past, City of Miami Mayors included monthly expense allowances in the calculation of their monthly pension benefit.
Mayor Diaz proposed an ordinance which removed expense allowances from the pension calculation for Mayors.
The Mayor's monthly allowances are as follows:
Expense
Car
Phone
Total
2,500 per month
900
300
3,700
The Mayor's pension is estimated to be at 55% of his pay, based upon the plan rules stating that elected officials' pensions are
to be calculated at 50% of pay for the first 7 years plus an additional 5% of pay for every additional year of service.
As a result, the Mayor's pension was reduced by 55%'pf expense allowances.
The resulting reduction in pension benefit is calculatettla5 follows:
\Monthly Annual
Expense allowances `� 3,700 44,400
Benefit % 1 55% 55% •
Reduction in benefit 2,035 24,420
Prior to the recent raise, the Mayor's pension benefit was estimated to be 55% of his salary of $97,000 and is calculated as
follows:
Monthly Annual
Salary, excluding allowances 8,083 97,000
Benefit % 55% 55%Y
Estimated Pension Benefit 4,446 53,350
110
The benefit reduction, as a percent of the estimated benefit (using a $97K Salary) is calculated as follows:
Reduction in benefit
Divided by Estimated Pension Benefit
Benefit reduction, as a percent of the estimated benefit
Monthly Annual
f 2,035 24,420
ti 4,446 53,350
45.77% 45.77%
s
Based upon the 2004 Actuarial Valuation of the Elected Official's Pension Plan, the present value of the Mayor's pension, using
the $97,000 salary, would be $657,751 at 12/1/2009. 12/1/2009 Is the estimated date of retirement. We can extrapolate the
impact of Mayor Diaz's ordinance which excluded expense allowances from the pension benefit as follows:
Present value of pension benefit at date of retirement, using $97,000 salary \ 657,751
Benefit reduction, as a percent of estimated benefit . 45.77%
Present value of pension benefit given up by Mayor Diaz 301,074¶
The salary increase approved for Mayor Diaz would increase his salary from $97,000 to $150,000, or 54.64%. The impact of this
increase on the present value of his pension benefit as of the date of his retirement is as follows:
Old Salary
Increase
New Salary
Increase as a percent of salary
Present value of pension benefit at date of retirement, using $97,000 salary
Increase as a percent of salary
Present value additional pension as a result of salary Increase
Present value of pension benefit given up in previous ordinance
Present value of additional pension as a result of salary increase
Net change in pension benefit
97,000
53000
150,000
0. 54.6392%
`, 657,751
1 54.64%
359,390
301,074
1 359,390
58,316