HomeMy WebLinkAboutItem #31 - First Reading OrdinanceHonorable Members of the
City- Cc,ttirni:- siort
P. tit'. Aridrews
City Manager
0 7 75
Pension Cirdinartce Amendnnent.s
Following is a summary of the pension ordinance amendments. These amend-
ments flow from exhaustive time and energy being spent by the City Commis-
sion's Pension Committee, recommendations from the Director of Finance,
the actuarial firm of A. S. Hansen, Inc. , and the actuarial firm of Kruse,
O'Connor. and Ling, Inc., as well as various recommendations and discussions
generated by the current Pension Board. These pension amendments imple-
ment the various labor contracts which were entered into by the City and its
five (5) groups of organized labor.
A, This ordinance gives the Retirement Board of the Retirement System
the right to limit disability pension benefits to those members who
have received an accidental disability retirement and who are per-
forming services which are substantially equivalent to those services
that can be assigned within the classification from which the employee
retired. For example: If a retired employee is found to be doing work
with job content, either from a physical basis or an academic basis,
that can be substantially equivalent to the job content assignable within
the classification from which he was retired, that employee's pension
benefits can be limited.
J'he ordinance provides the procedure for subsequent physical exam-
inations of members who have received an accidental disability retire-
ment. The requirement for physical examinations is exercised at the
discretion of the .Board as the need deems it necessary. For example:
If a retired employee suffers brain damage, then certainly the require-
ment would not be exercised. It should also be noted that reference is
made in Subsection 12 to the Civil Service Rules and Regulations and,
therefore, an amendment will be necessitated to said rules and regu-
lations in order to make them consistent with the ordinance herein
contained.
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Honorable Mernb~rrs of the
City Commission
This ordinance provides for the Retirement Board of the Retirement
System to require at the Board's discretion employee's receiving a
disability pension, on a form provided for such purpose (such as a
certified public accountant's statement), an indication of the salary
and type of employment that the retiree is currently engaged in. It
is discretionary on the part of the Board in that it may not be required
of all employees who are retired for the same reason that all retirees
may not be subject to being recalled for physical examinations for the
reasons as outlined above.
Subject ordinance also provides for the right of pay back of contri-
butions in the event a retired employee is returned to duty.
In addition, a provision of the ordinance allows for the reassignment
of an employee to another job classification (other than police and
fire duties) if the employee consents to such assignment and providing
that the salary in the new job assignment (outside the Police and Fire
Department) is no less than 100?-% of the employee's job class from
which her was transferred. This latter provision will also necessitate
a change in Civil Service Rules and Regulations.
13. Under the ordinance now in effect a member who receives an accidental
disability retirement is entitled to a return of his or her contributions,
in addition to his/her monthly benefit. The purpose of this ordinance
is to eliminate the return of contributions in the case of an accidental
disability retirement. (This should save the Pension Trust Fund on
the System $250, 000 annually. )
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iionorable Members of the
City Gummission
C. 'ibis ordinance provides the procedure to be followed in the event of
an application for accidental cr sabil ity retirement by a member of
the Retirement System. "ihe ordinance also provides a definition of
permanent total disability. It should be noted that this amended
definition removes the construction of an employee receiving an acci-
dental disability retirement in the event that he is no longer able to
perform duties in his assigned classification. The amended ordinance
removes the word assigned and thereby eliminates the practice that
has heretofore existed in permitting employees to become candidates
for disability pension if they were alleged to be unable to perform the
exact function (for example. motorcycle policemen) at the time the
injury occurred. The amended definition will permit the injured
motorcycle policemen, for example, to be assigned to other duties
within the classification of police officer, which are more compatible
with his disabilities, and thereby permit his continued service to the
City of Miami.
In addition, the Board is given the right to receive any and all infor-
mation which it deems necessary in order to arrive at a decision re-
garding granting or denying the application for disability pension.
A significant change from current practice is reflected in the provision
that requires that the Retirement Board must concur with the physician
who is employed by said board when granting a retirement.
it is important to note that regardless of independent opinions and
judgments the current practice of granting disability rested solely on
the determination of the Medical Board. This will no longer be the
case as the Medical Report is no lodger final and conclusive in terms
of dictating whether the employee will receive or not receive a dis-
ability pension. in order for the applicant to receive a disability pen-
sion, it must be shown that he is no longer able to perform in the
broad classification of police officer or fire fighter; and, secondly,
the doctor retained by the Retirement Board must state that the
applicant is medically permanently and totally disabled. Then, and
only then, will the employee receive an accidental disability pension
if the Retirement Board concurs.
D. This ordinance provides that the spouse of any member who dies after
receiving an accidental disability retirement shall receive monthly
forty percent of the ntetriber's retirement allowance during the lifetime
of said spouse. Heretofore this provision did not exist for employees
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F{onora ,le Members of cne
City Commission
•kvhu received disability- retirement because the employee received c c( the
return of his contributions and, therefore, could provide in his -will
the remainder of those contributions to his spouse. Since the return
r
of contributions has been eliminated, this provision allows for the
employee to provide for his spouse in the event he prematurely expires.
It should be noted that this provision is the e:•:act provision that currently
exists in the Pension Ordinance as it applies to service retirements.
F. The subject matter of this ordinance reflects the change in the composition
of the Board of Trustees of the Retirement Systetn. There will now be a
Pension Board for the Plan (non Police and Fire personnel) and a Pension
Board for the System (Police and Fire personnel). The design and con-
figuration of these two (2) Boards are such that equal members will serve
representing the interests of employees and management. In other words,
four (4) members will be selected from the ranks of labor and four (4)
representatives representing the City administration will serve on the
Board, with one (1) City Commissioner being appointed as the ninth member.
G. This ordinance gives the Board of Trustees of the Retirement System the
right to require a fidelity bond if it believes the trust is subject to finan-
cial loss due to the services being performed by any person or firm.
H. This ordinance establishes the composition of the Retirement Board of the
Retirement System and provides fur the election of said members. The
members of thee. Board will be; two (2) fire fighters, two (2) police officers,
four (4) members selected by the City Manager to represent the City admin-
istration, and one (1) City Commissioner appointed by the City Commission
by a minimum 4/ 5 vote. The City Commissioner appointed by the City Com-
mission shall serve as Chairman of the Board and shall vote only in the event
of a tie. There are further provisions which require the Board to keep its
matters open for public inspection and also require the Board to submit
annual reports to the City Commission before July 1 of each year.
In addition, the ordinance provides for the designation of an actuary and a
physician by the Board.
The ordinance further establishes a new physical examination procedure
whereby the physician that is employed by the Board will he the only doctor
who will have direct communication with said board. That physician, how-
ever, is empowered to seek assistance from other physicians from a list
that hits been al)prt)ved by the Board,
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Honorable Mern'.)e r s of the
City Commission
An actuarial valuation periodically is also provided for in this ordinance.
J. Tliis ordinance provides the prucedi.►re to be followed in the event of an
application for accidental disability retirement by a member of the
R tiren-lent Plan (non Police and rire personnel). This ordinance also
provides for a definition of permanent and total disability for the further
performance of duties (as it affects non Police and Fire personnel).
This definition refers to non-performance of duties as those duties that
can be assigned the employee regardless of which department he is in at
the time injury occurs. In other words, if an employee injured as a Park
Tender can no longer function as a Park Tender in the Departrnent of
Parks and Recreation, he can thereby be reassigned to custodian duties,
for example, in the Department of Public Works, which would be lighter
duty and more compatible with his disability, provided that the employee
does not receive diminished earnings as a result of said reassignment.
In addition, the Board is given the right to receive any and all information
which it deems necessary in order to arrive at a decision regarding the
granting or denying of an applicant for disability retirement.
A significant change frorn current practice is reflected in the provision
that requires that the Retirement Board must concur with the physician
who is employed by said board when granting a retirement. The. Medical
Report is no longer final and conclusive in terms of dictating whether the
employee will receive or not receive a disability pension.
J. This ordinance establishes the composition of the Retirement Board of the
Retirement Plan (non Police and Fire personnel) and provides for the election
of said members. The members of the Board will be: one (1) City Manager,
one (1) Director of Finance and two (2) members of the City Administration
appointed by the City Manager and one (1) City Commissioner appointed by
the City Cornrni s sion by a minimum of 4/5 vote.
Once again, the configuration of this new board places management interests
in equal numbers in terms of representation with the number of employee
representatives on the Board.
There are further provisions which require the Board to keep its matters
open for public inspection and also require the Board to submit an annual
report to t:ho City Commission before July I of each year.
In addition, the ordinance pro,.'ides for the designation of an actuary and a
physician by the Board.
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OINIMININeim
Honorable N1cmhers of the
City ConuniSsion
The ordinance further establishes a new physical examination procedure
whereby the physician that is employed by the Board will be the only doctor
who trill have direct communication Nvith said Board. That physician, how-
ever, is empowered to :reel. assistance from other physicians from a list
that has been approved by the Board.
An a•ctuarial valuation periodically is also provided for ih this ordinance.
K. This ordinance combines all the current classes of employees in the
Retirement Plan into one new class so as to eliminate confusion of the
benefit structures and to establish uniformity. It further transfers all
general employees who are currently in the Retirement System to the
Retirement Plan. These latter employees are separated into a distinct
class due to the fact that they are not required to pay Social Security
benefits. There are, thus, only two classes of employees under the
Retirement Plan; the only distinction being Social Security payments.
The ordinance further provides the benefit that a member receives when
said member achieves his minimum retirement date. The normal
retirement benefit is two per cent of the member's final average earnings,
plus an additional one -tenth of one per cent for each year that the member's
age and service exceeds 75, up to a maximum credit of three per cent per
year. The ordinance further provides for certain exceptions to the above
benefit.
In order to implement the transfer of those general employees in the System
to the Plan, the ordinance provides for the transfer of all those members'
assets and liabilities from said System to said Plan.
A further provision of the ordinance is an increase in the rat e of contribution
by the general employees from the current 7 1/2 per cent to 8 per cent.
L. The subject matter of this ordinance gives to those employees who are
employees of the Retirement Plan prior to October 1, 1974, or those
employees who are being transferred from the system to the plan, the
option of having their benefits computed in one of two ways. The first
alternative would be to have their benefits computed in accordance with
the provisions of Section 2-106, which are outlined in Ordinance K. The
other alternative is to have a member's benefits, if he qualifies, computed
in accordance with the provisions of Section 2- 109(3) (b) (Longevity Benefits),
or et a rate of two and one-half per cent per year, whichever benefit is greater.
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Ilonora.ble Members s or the
City Commission
This ordinance rives the Retirement: i;oard of the Retirement Ulan the
right. to limit disability bt refits to those members who have :tn accidental
retirement and whose annual earnings from employment e::ceed an amount
which when adclect to their disability retirement allowance would result in
a combined income of 100 per cent of the maximum current salary for the
classification from which the employee was retired.
In addition, the ordinance requires that each member receiving an accidental
disability retirement allowance furnish copies of his income tax statement
for the preceding year.
The ordinance further provides for the procedure to be followed for subse-
quent physical examinations of members who have received an accidental
disability retirement.
It should be noted that reference is made in Subsection 11 to the Civil Service
Rules and Regulations and, therefore, an amendment will be necessitated
to said rules and regulations in order to make them consistent with the
ordinance herein contained.
The subject ordinance also provides for the right of pay back of contributions
in the event a member who was on disability is returned to duty.
In addition, the ordinance provides for a subsequent physical examination
at least once every five years for those members receiving an accidental
disability retirement.
N. The subject matter of this ordinance reflects the change in the composition
of the Board of Trustees of the Retirement Plan. The Board of Trustees
will now be limited to and comprised of all members of the Retirement Board.
The foregoing amendments have addressed themselves favorably to the content of
the labor agreements which serve to address positively the heretofore weaknesses
in the current Pension Ordinance applicable to application, interpretation and
administration of disability pensions.
It should be further noted that after sufficient review of the manner in which these
amendments are transplanted into administrative actionandthey do not produce
they required results that both labor and management in their respective advocate
positions shall reopen and renegotiate those items which are not producing the
rc'cluirtect results when the respective parties go back to the collective bargaining
table in April of 1916.
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ctn. C)F MI • Lr,r�t
INTER -OFFICE MEMORANDUM
TO.
rROM
The honorable Members
of the City Commission
John Lloyd
CItyyAttorne
February 6, 1975
Pension Ordinance Amendments
On January 23, 1975, the City Commission passed on first reading •
the pension ordinances presented at that time. The pension ordin-
ances to be presented to the City Commission at its meeting of
February 12, 1975 are substantially the same as those previously
presented. However, in order to better clarify certain provisions,
the following changes have been suggested and are contained in the
ordinances that are to be presented to you at the February 12th
meeting: Words stricken through shall be deleted. Underscored
words constitute the change from the ordinance as presented at the
first reading.
I. ORDINANCE A
(11) "...The board may periodically require of its mem-
ber receiving a disability pension, on a form approv-
ed by the board for such purpose, a statement of
salary and type of employment."
(12) "...If the employee fails to pay back the contributions,
then he shall not be entitled to creditable -service
time for the period he was receiving a disability
retirement allowance."
(12.1)"...If any disability beneficiary in receipt of dis-
ability retirement allowance is found by the board,
prior to his minimum service -retirement age, to be
no longer incapacitated but is not restored to ser-
vice as a member in the classification from which he
was retired because of his own refusal to accept
employment offered to him, his disability retirement
allowance shall be terminated."
The Honorable Members of the City Commission February 6, 1975
II. ORDINANCE B
(1) "Any member who has been granted any retirement whatso-
ever shall not be entitled to a return of his or her con-
tributions, unless the member is eligible for the benefits
of option 6(a) under Section 2-91(14) which provides
for a return of contributions; or in the event a member
is entitled to a return of excess contributions under
Section 2-91(2) (c) . There shall be no return of con-
tributions to any persons entitled to receive an acci-
dental disability retirement allowance. Nothing herein
shall be construed to deprive the spouse of a deceased
member of his or her ordinary clath beneit or acciden-
tal death benefit hereinabove set fora:."
III. ORDINANCE C
(a) "Upon application of a member or the head of the depart-
ment any member who has been totally and permanently
incapacitated for duty prior to his attaining the age
of 60 as the natural and proximate result of an accident
occurring while in the actual performance of duty,
at some definite time and place witheae-gress-negligenee
en -his -part, shall be retired for accidentally -incurred
disability;..."
IV. ORDINANCE D
This ordinance was the subject of considerable discussion
at the January 23rd meeting due to the ambiguity created
in the meaning of the word "spouse". Three proposals con-
cerning this ordinance are presented for your consideration.
(c) "Upon the death of any member who has received an ac-
cidental disability retirement, the spouse of said mem-
ber who was nominated and designated by the member on
the date of retirement as said member's spouse shall
receive the payment of an amount equal to forty (40)
per cent of the member's monthly retirement allowance
during the lifetime of said spouse."
(c) "Upon the death of any member who has received an ac-
cidental disability retirement, the spouse of said
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The Honorable Members of the City Commission February 6, 1975
member who was nominated and designated by the member
on the date of retirement as said member's spouse shall
receive the payment of an amount equal to forty (40)
per cent of the member's monthly retirement allowance
during the lifetime of said spouse. 'Spouse', for the
purpose of this section, shall mean the husband or wife
of a deceased member. Such status shall continue un-
til the survivor dies or remarries."
(c) "Upon the death of any member who has received an at-
cidental disability retirement, the spouse of said mem-
ber who was nominated and designated by the member on
the date of retirement as said member's spouse shall
receive payment of an amount equal to forty (40) per cent
of the members monthly retirement allowance during the
lifetime of said spouse. 'Spouse', for the purpose of
this section shall mean the husband or wife of a deceased
member. Such status shall not be terminated by reason
of remarriage, and the survivor shall be entitled to
the benefits of this section during his or her life-
time."
V. ORDINANCE G
6(h) "When, in the opinion of the Board of Trustees, the
trust is subject to financial loss due to the possib-
ility of criminal or fraudulent acts of any person or
firm, then the Board of Trustees shall require a fidel-
ity bond to be posted in an amount sufficient to pro-
tect the interest of the trust."
VI. ORDINANCE H
(2) "The first meeting of the board created herein shall
take place within 30 days from the date providing
for the election of members to said board as herein-
after provided."
(13) "The board shall submit to the City Commission annual-
ly a report showing the fiscal transactions of the
Retirement System for the year ending on the preceding
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The Honorable Members of the City Commission February 6, 19/5
December 31st, the amount of the accumulated cash and
securities of the system and the last balance sheet
showing the financial condition of the system by means
of actuarial valuation of the assets and liabilities
of the system. Said information and reports shall
be submitted to the City Commission no later than
July 1st of each year, commencing in 1976."
(14) "The board shall designate and select an actuary who
shall be the technical advisor to the board in mat-
ters regarding the operation of the funds created by
the provision's of this ordinance, and shall perform
such other duties as are required in connection there-
with. The actuary shall be directly responsible to the
board. The contract providing for employment of the
actuary shall be subject to the approval of the City
Commission and shall provide that the actuary may be
removed by a majority vote of the Retirement Board."
(16) "At least once (1) in each three (3) year period the
board shall cause an actuarial investigation to be made
into the mortality, service and compensation experi-
ence of the members and beneficiaries of the Retirement
System..."
VII. ORDINANCE I
(a) "Upon application of a member or the head of the depart-
ment, any member who has been totally and permanently
incapacitated for duty prior to his attaining the age
of 60 as the natural and proximate result of an acci-
dent occurring while in the actual performance of duty,
at some definite time and place witkeat-gress-aegligefee
eta -his -part, shall be retired for accidentally -incurred
disability;..."
VIII. ORDINANCE J
(2) "The first meeting of the board created herein shall
take place within 30 days from the date providing for
the election of members to said board as hereinafter
provided."
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The Honorable Members of the City Commission February 6, 1975
IX. ORDINANCEK
The only change in this ordinance is reflected in the title.
The corrected dates are "October 1, 1974" and"December 31, 1974"
respectively as they appear in said title.
3'5L/RAs/c s
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