2013-3806 Ordinance ORDINANCE NO. 2013-3806
AN ORDINANCE OF THE MAYOR AND CITY COMMISSION OF THE CITY OF
MIAMI BEACH, FLORIDA, IMPLEMENTING PROVISIONS OF THE 2012-2015
COLLECTIVE BARGAINING AGREEMENT BETWEEN THE CITY AND THE
COMMUNICATIONS WORKERS OF AMERICA, (CWA) LOCAL 3178;
IMPLEMENTING SIMILAR RETIREMENT PLAN AMENDMENTS FOR
MEMBERS WHO ARE NOT INCLUDED IN ANY BARGAINING UNIT;
AMENDING THE MIAMI BEACH EMPLOYEES' RETIREMENT PLAN
CREATED BY ORDINANCE 2006-3504; AMENDING SECTION 2.26 OF THE
PLAN BY EXTENDING THE DEFERRED RETIREMENT OPTION PLAN
(PLAN) PROGRAM FROM THREE (3) TO FIVE (5) YEARS FOR ELIGIBLE
MEMBERS; AMENDING SECTION 5.13 TO REFLECT AMENDED
ELIGIBILITY AND PARTICIPATION REQUIREMENTS AND AMENDED DROP
PLAN FEATURES; AMENDING SECTION 4.03 BY ELIMINATING THE
PURCHASE OF ADDITIONAL CREDITABLE SERVICE FOR CERTAIN
MEMBERS; PROVIDING FOR SEVERABILITY; REPEALING ALL
ORDINANCES IN CONFLICT THEREWITH; AND PROVIDING AN EFFECTIVE
DATE.
BE IT ORDAINED BY THE CITY COMMISSION OF THE CITY OF MIAMI .BEACH,
FLORIDA:
Section 1. Section 2.26 of the Miami Beach Employees' Retirement Plan created by
Ordinance 2006-3504, as subsequently amended, is hereby further amended as follows:
2.26 Deferred Retirement Option Plan (DROP) —A program under which a Member who
has reached the normal retirement date may elect to retire for purposes of the Plan but
continue employment with the City for up to thirty-six (36) months, and have his/her
monthly retirement benefit paid into a DROP account during the DROP period, in
accordance with Section 5.13. Notwithstanding the preceding sentence, effective July
17, 2013, Members within classifications in the CWA bargaining unit who were hired
prior to October 27, 2010, and Members not included in any bargaining unit, who were
hired prior to September 10, 2010, may elect to retire for purposes of the Plan but
continue employment with the City for up to sixty (60) months, and have their monthly
retirement benefit paid into a DROP account during the DROP period, in accordance
with Section 5.13.
Section 2. Section 5.13 of the Miami Beach Employees' Retirement Plan created by
Ordinance 2006-3504, as subsequently amended, is hereby further amended as follows:
5.13 A deferred retirement option plan ("DROP") is hereby established for eligible
Members, as follows:
(a) Eligibility and participation:
1. A Member who attains-the normal retirement date shall be eligible to
participate in the DROP.
2. A Member's election to participate in the DROP shall be irrevocable.
A Member may participate in the DROP only once.
3. An eligible Member may participate in the DROP for a maximum of
thirty-six (36) months. Effective July 17, 2013, Members within
classifications in the CWA bargaining unit, who were hired prior to
October 27, 2010, and Members not included in any collective
bargaining unit, who were hired prior to September 10, 2010, may
participate in the DROP for a maximum of sixty (60) months.
4. An eligible Member who elects to participate in the DROP must
provide at least thirty (30) days' advance written notice to the City of
his or her election to participate in the DROP. A Member who elects to
participate in the DROP may elect to terminate DROP participation
and City employment sooner than the maximum DROP period, with
thirty (30) days' advance written notice to the City.
5. Effective July 17, 2013, any Member within classifications in the CWA
bargaining unit, and any Member not included in any collective
bargaining unit, who previously executed an election form entitling
him/her to participate in the DROP for a period of less than sixty (60)
months and whose DROP period ceases between July 1, 2013 and
July 16, 2016, shall have a one-time opportunity to submit an
irrevocable amended election from provided by the Board, within thirty
(30) calendar days following the effective date of this ordinance,
extending his or her DROP period to a maximum of sixty (60) months
in total.
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(b) DROP plan features:
1. An eligible Member who elects to participate in the DROP will be
considered to have retired for purposes of the Plan upon entry into the
DROP, except that such Member shall be eligible to vote for and
serve as an Employee member of the Board of Trustees during the
DROP participation period. The Member's monthly retirement benefit,
determined in accordance with the Plan based on years of creditable
service and final average monthly earnings at the time the Member
enters the DROP, will be paid into the Member's DROP account every
month during the DROP period.
2. No Member contributions shall be required after a Member enters the
DROP, and the Member will not accrue any additional creditable
service or any additional benefits under the Plan after entering the
DROP. No City normal cost contributions shall be required after a
Member enters the DROP, and DROP participants shall be excluded
from the covered payroll for the Plan.
3. A Member who elects to participate in the DROP shall not be eligible
for disability or preretirement death benefits under the Plan; nor shall
a Member be eligible for any post retirement adjustment provided in
Section 5.10 during the DROP participation period.
4. A Member who elects to participate in the DROP shall retain the
earned balance of annual and sick leave as of the date of entry into
the DROP, and shall continue to earn annual and sick leave during
the DROP period, in accordance with applicable City ordinances.
Alternatively, at the time of entry into the DROP, a
Member may request full or partial payment of the earned balance of
annual and sick leave as of the date of entry into the DROP, up to the
maximum allowed by applicable City ordinances for employees who
terminate City employment, but reduced by the amount of annual and
sick leave used for the purchase of additional credited service under
section 4.03, if any, at the Member's rate of compensation upon
entering the DROP; provided that the Member must retain at least 120
hours of accrued sick leave after any such payment. Upon
termination of City employment, a Member who has participated in the
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DROP shall be eligible to receive payment for the earned balance of
annual and sick leave as of the date of termination, up to the
maximum allowed by applicable City ordinances for employees who
terminate City employment, but reduced by the amount of annual and
sick leave for which payment was received upon entry into the DROP,
if any; and further reduced by the amount of annual and sick leave
used for the purchase of additional credited service under section
4.03, if any. In no event shall payments for accrued annual or sick
leave be included in a member's Earnings for purposes of the Plan.
5. As a condition of participating in the DROP, the Member must agree
to terminate City employment at the conclusion of the DROP period,
and to submit an irrevocable letter of resignation stating this prior to
entering the DROP. A Member who elects to participate in the DROP
must also submit an irrevocable written DROP election prior to
entering the DROP on a form provided by the Board. Notwithstanding
the preceding sentence, eligible Members who are participants in the
DROP on July 1, 2013, shall be given a one-time opportunity to
submit an irrevocable amended election form, as provided in Section
5.13 (a) 5., extending the DROP period to a maximum of sixty (60)
months in total.
6. At the conclusion of the DROP period and upon termination of City
employment, the Member's monthly retirement benefit shall be paid to
the Member in accordance with the Plan. In 'the event of the
Member's death during or at the conclusion of the DROP period, a
benefit may be payable in accordance with Section 5.07
8. Participation in the DROP is not a guarantee of City employment, and
DROP participants will be subject to the same terms and conditions of
employment that are applicable to employees who are not DROP
participants.
9. During participation in the DROP, the Member's monthly retirement
benefit will be paid into the DROP account, and shall be
credited/debited with earnings/losses as provided herein. The
Member may direct that their DROP account be invested in any of the
investment options approved by the Board, on forms provided by the
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Board. Any gains on the Member's DROP account investments shall
be credited to the Member's DROP account; and any losses incurred
by the Member shall be deducted from the Member's DROP account
balance, and shall not be made up by the City or the Retirement Plan.
A Member's DROP account shall only be credited or debited with
earnings/losses while the Member is a participant in the DROP.
10. A DROP participant may designate a beneficiary or beneficiaries for
his/her DROP account on a form provided by the Board.
11. Within thirty (30) days following a DROP participant's termination of
City employment or death, whichever occurs first, the Member, or in
the event of the Member's death the Member's designated
beneficiary, may submit a written election on a form approved by the
Board, to receive the Member's entire DROP account balance, which
shall be distributed to the Member (or in the event of the Member's
death, to the Member's designated beneficiary or estate in
accordance with paragraph (b)9., below) in a cash lump sum, unless
the Member elects to have all or any portion of an eligible rollover
distribution paid directly to an IRA or eligible retirement plan specified
by the Member in a direct rollover. Any such direct rollover shall be
processed in accordance with Article 12 of the Plan. In the event a
Member or designated beneficiary does not submit a written election
to receive a distribution of the Member's DROP account balance
within thin 30 days following the Member's termination of City
Y ( ) Y 9 Y
employment or death, the Member's DROP account shall be
maintained by the Plan but shall not be credited with earnings/losses
after thirty (30) days following the Member's termination of City
employment or death.
12. If a DROP participant dies before his or her DROP account is
distributed, the participant's designated beneficiary shall have the
same rights as the participant with respect to the distribution of the
DROP account. If the participant has not designated a beneficiary, the
DROP account balance shall be paid to the Member's estate.
13.The Board of Trustees shall make such administrative rules as are
necessary for the efficient operation of DROP, but shall not adopt any
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rule that is inconsistent with this Ordinance or the Plan.
14.The DROP shall be administered so that the Plan remains qualified
under the Internal Revenue Service Code and in compliance with
applicable laws and regulations.
Section 3. Section 4.03 of the Miami Beach Employees' Retirement Plan created by
Ordinance 2006-3504, as subsequently amended, is hereby further amended as
follows:
4.03 (a) A Member with five (5) or more years of creditable service may, at any time prior to
retirement, elect to purchase up to a maximum of two (2) years of additional creditable
service as provided in this section 4.03. Notwithstanding any provision of this Section 4.03,
effective September 30, 2013, Members whose classification is included in the CWA
bargaining unit and Members who are not included in any collective bargaining unit shall not
be eligible to purchase additional creditable service under this section 4.03. The benefit
multiplier that the Member is earning at the time of the election to purchase additional
creditable service pursuant to this section 4.03 shall be applied to the additional credited
service purchased. To be eligible to purchase additional creditable service under this
section 4.03, a Member who previously elected to participate in the Defined Contribution
Retirement System (401 (a) Plan) must first purchase all available creditable service in
accordance with section 4.04. An eligible Member may elect to purchase additional
creditable service under this section 4.03 for any of the following types of employment prior
to the employee's date of hire by the City, provided that the Member may not purchase such
service if the Member has received or will receive a pension benefit for the same period of
employment under another retirement plan:
1. Active duty military service in the Armed Forces of the United States or the Coast Guard.
2. Full-time employment with another governmental entity.
3. Full-time employment in the private sector performing the same or very similar duties the
employee is performing for the City at the time of his/her election to purchase additional
service.
(b) In order to receive the additional creditable service, the Member shall pay ten percent
(10%) of his/her annual rate of pensionable Earnings, multiplied by the number of years and
fractions of a year purchased, up to a total of two years. For the purpose of this section, the
annual rate of pensionable earnings shall be the rate in effect on the date of payment and
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shall include the annual amount of overtime pay for those Members whose overtime pay is
included in Earnings. Payment shall be made in a single lump sum to the Plan within six (6)
months following the date of the member's election to purchase the additional service.
Notwithstanding the preceding sentence, effective July 17, 2013, Members whose
classification is included in the CWA bar-gaining unit and Members who are not included in
any collective bargaining unit shall make payment in a single lump sum to the Plan within
twelve (12) months following the date of the member's election to purchase the additional
service.
(c) For purposes of this section 4.03, Members may use the value of accrued sick and/or
annual leave for the purchase of additional creditable service, as follows. Accrued sick leave
may be used at the rate of 2 hours of accrued sick leave for the value of each hour used
toward the purchase, provided that the Member must retain at least 120 hours of accrued
sick leave after the purchase. Annual leave may be used at the rate of 1 hour of accrued
annual leave for the value of each hour used toward the purchase. The total amount of sick
and annual leave used for the purchase of additional creditable service under this section
4.03 shall be deducted from the maximum amount of leave allowed for payout to the Member
upon termination of employment.
(d) Members may pay for some or all of the cost of additional creditable service purchased
pursuant to this section 4.03 by direct transfer or rollover of funds from a 401 (a) or 457 plan,
provided the 401 (a) plan or 457 plan permits such direct transfers.
(e) Notwithstanding the forgoing, Employees in classifications within the AFSCME bargaining
unit and the GSA bargaining unit shall not be eligible to purchase additional creditable
service under this section 4.03 unless and until a collective bargaining agreement is ratified
that provides for such purchase.
(f) Amounts paid or transferred to this Plan for the purchase of creditable service under this
section 4.03 shall be considered accumulated employee contributions as that term is defined
herein, and Members shall be 100% vested in such amounts.
(g) Notwithstanding any other provision of this section 4.03, in no event may the maximum
benefit percentage applicable to the member be exceeded as the result of any purchase of
creditable service.
Purchase of Creditable Service by Members Who Previously Participated in the Defined
Contribution Retirement System.
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(a) Any Employee who previously elected to participate in the Defined
Contribution Retirement System (401(a) Plan) prior to the effective date of this Ordinance,
and who becomes a Member of this Plan on or after the effective date of this Ordinance, may
purchase Creditable Service under this Plan for all or a portion of the period of their
participation in the Defined Contribution Retirement System, by paying into the Plan an
amount equal to the sum of the required employer and employee contributions to the
Classified Plan or Unclassified Plan (whichever plan in which the Member was eligible to
participate) for each fiscal year of service, or portion thereof, purchased, as reflected in the
actuarial valuation report for that year; plus interest at the rate of 8.5 percent for Classified
Employees and 9.0%for Unclassified Employees, calculated from the end of each applicable
fiscal year through the date of payment. Notwithstanding the preceding sentence, for any
Creditable Service purchased pursuant to this subsection (a) that relates to employment
during the 2005-2006 fiscal year, if full payment for such service is made on or before May 1,
2006, the payment amount for such service shall be twenty percent (20%) of the Employee's
earnings for the period purchased, with no interest on the amount paid for such service. In
any event, full payment all service purchased pursuant to this subsection (a) must be made
within six (6) months after the effective date of this Ordinance and cost estimates have been
provided to the Employee, but in no event later than the last day of employment. In the case
of an employee who elects to transfer or roll over assets from the Defined Contribution
Retirement System to purchase creditable service pursuant to this subsection (a), the
requirements of the preceding sentence as to such assets shall be satisfied by the
employee's irrevocable authorization to transfer or roll over such assets, executed on or
before the last day of employment. Each employee electing this option may purchase
creditable service under this Plan for the period from the date the employee entered the
Defined Contribution Retirement System through the effective date of membership in this
Plan, or any portion thereof. If a Member elects to purchase less than the full period of
participation in the Defined Contribution Retirement System, the first period of purchase shall
be for the same fiscal year in which the Employee was first authorized to purchase service
pursuant to this subsection (a), the second period of purchase shall be for the immediately
preceding fiscal year and so on, until the Member purchases the amount of creditable
service desired. A Member shall not be permitted to select those years that result in the
lowest purchase amount.
Notwithstanding any other provision of this section 4.04, in no event may the maximum
benefit percentage applicable to the member be exceeded as the result of any purchase of .
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Creditable Service.
(b) Any Employee who previously elected to participate in a defined
contribution retirement plan established for employees of the Miami Beach Visitor and
Convention Authority, the Classified Plan, the Unclassified Plan or the City Pension Fund for
Firemen and Policemen, prior to the effective date of this Ordinance, and who becomes a
Member of this Plan on or after the effective date of this Ordinance, may purchase Creditable
Service under this Plan for all or a portion of the period of their participation in such defined
contribution retirement plan on or after October 18, 1992, during which such Member was
employed on a regular basis for thirty (30) or more hours per week, by paying into the Plan
an amount equal to the sum of the required employer and employee contributions to the
Classified Plan for each fiscal year of service, or portion thereof, purchased, as reflected in
the actuarial valuation report for that year; plus interest at the rate of 8.5 percent calculated
from the end of each applicable fiscal year through the date of payment. Notwithstanding the
preceding sentence, for any Creditable Service purchased pursuant to this subsection (b)
that relates to employment during the 2005-2006 fiscal year, if full payment for such service
is made on or before May 1, 2006, the payment amount for such service shall be twenty
percent (20%) of the Employee's earnings for the period purchased, with no interest on the
amount paid for such service. In any event, full payment all service purchased pursuant to
this subsection (b) must be made within six (6) months after the effective date of this
Ordinance and cost estimates have been provided to the Employee, but in no event later
than the last day of employment. In the case of a Member who elects to transfer or roll over
assets from a defined• contribution retirement plan established for employees of the Miami
Beach Visitor and Convention Authority, the Classified Plan, the Unclassified Plan or the City
Pension Fund for Firemen and Policemen to purchase creditable service pursuant to this
subsection (b), the requirements of the preceding sentence as to such assets shall be
satisfied by the Member's irrevocable authorization to transfer or roll over such assets,
executed on or before the last day of employment. If a Member elects to purchase less than
the full period of participation in the defined contribution retirement plan, the first period of
purchase shall be for the same fiscal year in which the Employee was first authorized to
purchase service pursuant to this subsection (b),the second period of purchase shall be for
the immediately preceding fiscal year and so on, until the Member purchases the amount of
creditable service desired. A Member shall not be permitted to select those years that result
in the lowest purchase amount. Notwithstanding any other provision of this section 4.04, in
no event may the maximum benefit percentage applicable to the Member be exceeded as
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the result of any purchase of creditable service. (c) A Member who elects to purchase
creditable service under this section 4.04 may pay for such service in one or a combination
of the following manners:
(1) Direct transfer or rollover from the Defined Contribution Retirement System, 457 plan or
other eligible plan in accordance with Section 11.03, provided the other retirement system or
plan permits such direct transfers or rollovers for the purchase of creditable service under
this Plan. The full value of assets, including any outstanding loans, transferred from a
Member's account in the Defined Contribution Retirement System, or from a defined
contribution retirement plan established for employees of the Miami Beach Visitor and
Convention Authority, the Classified Plan, the Unclassified Plan or the City Pension Fund for
Firemen and Policemen that permits such direct transfers or rollovers for the purchase of
creditable service under this Plan, will be credited toward the purchase of creditable service
under this section 4.04. A Member must payoff any loan balance existing at the time of
transfer from the Defined Contribution Retirement System, or from a defined contribution
retirement plan established for employees of the Miami Beach Visitor and Convention
Authority, the Classified Plan, the Unclassified Plan or the City Pension Fund for Firemen
and Policemen, by making payments to this Plan in the same manner and at the same rate
of interest as the payments that were made to the Defined Contribution Retirement System
or defined contribution retirement plan prior to the transfer. In the event full payment of all
outstanding loan balances is not made prior to termination of employment, the Member's
creditable service shall be adjusted to reflect the payments actually made.
(2) Cash Payment.
(3) A Member who is employed by the City at the time creditable service is purchased
pursuant to this section 4.04 may use the value of accrued sick and/or annual leave as
follows. Accrued sick leave may be used at the rate of 2 hours of accrued sick leave for the
value of each hour used toward the purchase, provided that the Member must retain at least
120 hours of accrued sick leave after the purchase. Annual leave may be used at the rate of
1 hour of accrued annual leave for the value of each hour used toward the purchase. The
total amount of sick and annual leave used for the purchase of additional creditable service
under this section 4.04 shall be deducted from the maximum amount of leave allowed for
payout to the Member upon termination of employment.
(c) Amounts paid or transferred to this Plan for the purchase of creditable service under this
section 4.04, excluding any outstanding loan balances, shall be considered accumulated
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employee contributions as that term is defined herein, and Members shall be 100% vested in
such amounts.
(d) Notwithstanding any other provision of this section 4.04, the provisions of this section
4.04 shall not apply to Employees within classifications in the AFSCME and GSA bargaining
units until a collective bargaining agreement containing such provisions is ratified. If a
collective bargaining agreement applying the provisions of this section 4.04 to Employees
within classifications in the AFSCME or GSA bargaining units is ratified on or before April 1,
2006, for any Employee who purchases Creditable Service purchased pursuant to
subsection (a), above, that relates to employment during the 2005-2006 fiscal year, and
makes full payment for such service within sixty (60) days following ratification of the
collective bargaining agreement, the payment amount for such service shall be twenty
percent (20%) of the Employee's earnings for the period purchased, with no interest on the
amount paid for such service.
Purchase of Creditable Service by Members Who Previously had Creditable Service Under
the Classified Plan. Any Member who previously had creditable service under the Classified
Plan but who separated from employment as a Classified Employee prior to becoming fully
vested in the Classified Plan, may purchase Creditable Service under this Plan for all or a
portion of the period of their creditable service under the Classified Plan, by paying into the
Plan an amount equal to the sum of the required employer and employee contributions to the
Classified Plan for each fiscal year of service, or portion thereof, purchased, plus interest at
the rate of eight and one-half percent (8.5%) from the end of each applicable fiscal year
through the date of payment. Full payment must be made within six (6) months after the
effective date of this Ordinance. Notwithstanding any provision of this section 4.05, this
section 4.05 shall have no application to persons employed by the Miami Beach Visitor and
Convention Authority, the Classified Plan, the Unclassified Plan or the City Pension Fund for
Firemen and Policemen on the effective date of this Ordinance.
Section 4: Reference.
Resolution No. 2013-28290, accepting the recommendations of the Finance and
Citywide Projects Committee at its May 13, 2013, meeting, to adopt the Budget Advisory
Committee's proposed policies and guidelines in order to ensure longterm pension reform, is
incorporated herein by reference.
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Section 5: Conflicts and Severability.
(a) All Ordinances, and parts of ordinances, in conflict herewith shall be and
the same, are hereby repealed.
(b) In the event any article, section, paragraph, sentence, clause, or phrase
of this Ordinance shall be adjudicated invalid or unconstitutional, such adjudication shall
in no manner affect the other articles, sections, paragraphs, sentences, clauses or
phrases of this Ordinance, which shall be and remain in full force and effect as fully as if
the item so adjudged invalid or unconstitutional was not originally a part hereof.
Section 6. Effective Date.
This Ordinance shall take effect the 21stday of Septembe32013.
PASSED and ADOPTED by the City Commission of the City of Miami Beach this
11th day of September , 2013.
Attest:
RAFAE GRANADO, CITY CLE .
TI HERRE A BOWER
:INC,ORF. ORATED. AYOR
f
APPROVED AS TO
FORM.8, LANGUAGE
& FOR F UTION
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MIAMI BEACH
City of Miami Beath, 1700 Convention Center Drive, Miami Beach, Florida 33139,www.miamibeachfl.gov
COMMISSION MEMORANDUM
TO: Mayor Matti Herrera Bower and Me bers of the ity Commission
FROM: Jimmy L. Morales, City Manager -�
DATE: September 11, 2013
SUBJECT: Amendment to the Miami each Employees' Retirement Plan
Supplemental Document
For the September 11, 2013 City Commission meeting, the Administration submitted for your
review the initial Actuarial Impact Statement for the proposed changes for all members to the
Miami Beach Employees' Retirement Plan (MBERP). Since the proposed changes only impact
employees covered by the Communications Workers of America (CWA) and employees in the
Unclassified and Others salary groups, Gabriel, Roeder, Smith & Company (GRS), the actuary
for MBERP, has just provided the Administration with a revised Actuarial Impact Statement that
only applies to these employees.
The initial figures provided by GRS reflected a savings attributed to extending the Deferred
Retirement Option Plan (DROP) from three to five years of ($778,000) toward the City's Annual
Required Contribution (ARC) for all members of the Plan. The employees represented by the
CWA, Unclassified and Others salary groups comprise approximately 75% of the MBERP, thus
reflecting an initial estimated savings of ($583,500). However, based on the revised analysis
provided by GRS, the impact attributed for extending the DROP for only employees represented
by the CWA, Unclassified and Others salary groups results in a savings of ($600,000) payable
on October 1, 2013.
The revised impact statement provided by GRS is attached for your review.
JLM/K B/SC-T/CMG
Attachment
FAT_Drive\AGENDA\2013\September 11\CWA\CWA 2012-2015 MBERP Pension DROP and Buyback Supplemental Impact
Statement Covermemo.docx
Agenda Item R-5
A
Date gt1i i
Gabriel Roeder Smith & Company One East Broward Blvd. 954.527.1616 phone
GRS Consultants� �tcnwries Suite 505 954.525.0083 fax
Ft.Lauderdale,FL 33301-1.804 www.gabrielroeder.com
September 6,2013
Ms.Carla Gomez
Assistant Director,Human Resources
City of Miami Beach
1700 Convention Center Drive
Miami Beach,Florida 33139
Re: Actuarial Impact Statement for Proposed Changes to the Miami Beach Employees'Retirement Plan
Dear Carla:
As requested,we have prepared the enclosed Actuarial Impact Statement showing the financial effect of the
following proposed changes to the Miami Beach General Employees'Retirement System:
1. The maximum period for participation in the Deferred Retirement Option Program(DROP)would be
extended from three to five years for members hired before October 1,2010(i.e.,Tier A and Tier B
members). This extension would apply to all active members in Tiers A and B who elect to participate
in the DROP in the future as well as current DROP members. The 2.5%COLA is not payable while
members are in the DROP.
2. The option for members_to purchase up to 2-years of credited service would be eliminated.
The above changes would not apply to members who are participating in the AFSCME or GSAF
bargaining units.
The Statement must be filed with the Division of Retirement before the final public hearing on the ordinance.
Please have a member of the Board of Trustees sign the Statement. Then.send the Statement along with
g g a copy
of the proposed ordinance to Tallahassee.
With regard to item 2 above,the employer portion of the cost for members to purchase service is not prefunded.
Therefore,eliminating the service purchase provision will not have an immediate financial effect on the Plan.
When we prepare our annual valuation,any increases to the liability due to service purchased during the
previous year are reflected in the net gain/loss for the year,which is amortized over 30 years.
The ultimate cost of the current service purchase provision is measured by the difference between the full
actuarial cost of the service purchased and the amount that members currently pay to purchase service(i.e.,
10%of pay for each year purchased). As an example,the full actuarial cost to purchase the maximum of 2
years of service for a member who is currently age 45 with 10 years of credited service and an annual salary of
$60,000 is approximately$38,000. Under the current provisions,the member pays$12,000. The difference of
$26,000 is funded by additional City contributions over time. In this example,the effect on the annual required
contribution due to the service purchase is an increase of about$2,300 for the first year.This assumes that all of
our actuarial assumptions as described in the October 1,2012 Actuarial Valuation Report are met each year.
The impact on the total gain/loss varies each year depending on the demographics and the specific benefit
provisions that apply to members who purchased service.
Eliminating the service purchase provision will mean that any losses due to service purchases will not occur in
future years. Please note,however,that there will likely be losses due to service purchases in fiscal year ending
Ms. Carla Gomez
September 6,2013
Page 2
September 30,2013 that will be reflected in the October 1,2013 Actuarial Valuation,since elimination of the
service purchase provision will not be effective until September 30,2013.
Summary of Findings
• The present value of future benefits decreases by approximately$6.1 million.
- The Plan would be expected to pay out$6.1 million less,in today's dollars,to current members
of the Plan. This can be viewed as the total cost impact due to the extension of the DROP if the
actuarial assumptions are met each year.
• There is a decrease in the first year Annual Required Contribution for the City that is comprised of a
reduction in the amortization payments on the Unfunded Accrued Liability and a reduction in the normal
cost.
- The Unfunded Accrued Liability decreased by approximately$4.8 million. This reduction will
decrease the annual required contribution by approximately$428,000 each of the next 30 years.
- The first year normal cost will decrease by approximately$182,000 which is 0.26%of total
covered payroll(0.28%of Tier A and B member covered payroll). The reduction of 0.28%of
Tier A and Tier B member covered payroll will exist until all Tier A and Tier B members have
retired.
- The first year required employer contribution would decrease by approximately$610,000 or
0.93%of Non-DROP payroll.
- The funded ratio will increase from 66.1%to 66.6%.
Other Cost Considerations
■ As of October 1,2012 the Market Value of Assets exceeds the Actuarial Value by$2.07 million. This
difference will be recognized over the next several years. Once all the gains and losses through September
30,2012 are fully recognized in the Actuarial Value of Assets,the contribution rate will decrease by
roughly 0.3%of non-DROP payroll unless there are further gains or losses.
Additional Disclosures
This report was prepared at the request of the City with the Board's permission and is intended for use by the
City and the Retirement Plan,and those designated or approved by them. This report may be provided to
parties other than the City and Retirement Plan only in its entirety and only with their permission.
This report is intended to describe the financial effect of the proposed plan changes.No statement in this
report is intended to be interpreted as a recommendation in favor of the changes,or in opposition to them.
This report should not be relied on for any purpose other than the purpose described above.
The calculations in this report are based upon information furnished by the Plan Administrator for the
October 1,2012 Actuarial Valuation concerning Plan benefits,financial transactions,plan provisions and
active members,terminated members, retirees and beneficiaries. The calculations are also based on
bargaining unit information provided by the City related to this study. We reviewed this information for
internal and year-to-year consistency,but did not otherwise audit the data. We are not responsible for the
accuracy or completeness of the information provided by the Plan Administrator or the City.
The calculations are based upon assumptions regarding future events,which may or may not materialize.
They are also based on the assumptions,methods,and plan provisions outlined in this report. Future
actuarial measurements may direr significantly from the current measurements presented in this report due
Gabriel Roeder Smith & Company
Ms.Carla Gomez
September 6,2413
Page 3
to such factors as the following: plan experience differing from that anticipated by the economic or
demographic assumptions;changes in economic or demographic assumptions; increases or decreases
expected as part of the natural operation of the methodology used for these measurements(such as the end of
an amortization period or additional cost or contribution requirements based on the plan's funded status);and
changes in plan provisions or applicable law. If you have reason to believe that the assumptions that were
used are unreasonable,that the plan provisions are incorrectly described,that important plan provisions
relevant to this proposal are not described,or that conditions have changed since the calculations were made,
you should contact the author of the report prior to relying on information in the report.
The undersigned actuaries are members of the American Academy of Actuaries and meet the Qualification
Standards of the American Academy of Actuaries to render the actuarial opinions contained herein. The
undersigned actuaries are independent of the plan sponsor.
This report has been prepared by actuaries who have substantial experience valuing public employee
retirement systems.To the best of our knowledge the information contained in this report is accurate and
fairly presents the actuarial position of the Plan as of the valuation date. All calculations have been made in
conformity with generally accepted actuarial principles and practices,and with the Actuarial Standards of
Practice issued by the Actuarial Standards Board and with applicable statutes.
Respectfully submitted,
01 -A a iq 6 PD&UgAt All
Melissa R.A gayer,MAAAJ F A, tu ff rose, MAAA
Enrolled Actuary No. 11-06467 rolled Actuary No. 11-06599
Copy: Rick Rivera
Enclosures
(Gabriel Roeder Smith& Company
1
SUPPLEMENTAL ACTUARIAL VALUATION REPORT
Plan
City of Miami Beach Employees'Retirement Plan
Valuation Date
October 1,2012
Date of Report
September b,2013
Report Requested by
City of Miami Beach
Prepared by
Melissa R.Algayer
Group Valued
All active and inactive members.
Plan Provisions Being Considered for Change
Present Plan Provisions Before Chance
• Members hired before October 1,2010(i.e.,Tier A and Tier B members)who become eligible for
normal retirement may participate in the Deferred Retirement Option Program(DROP)for up to three
years.The annual cost-of-living adjustment(COLA)of 2.5%is not payable while members are in the
DROP.
• Members who have five or more years of service may elect to purchase up to two years of additional
credited service at any time prior to retirement. Members who elect to purchase such service pay
10%of the annual rate of compensation multiplied by the number of years purchased.
Proposed Plan Changes
• Members hired before October 1,2010(i.e.,Tier A and Tier B members)who become eligible for
normal retirement may participate in the Deferred Retirement Option Program(DROP)for up to five
years. Members currently participating in the three-year DROP may also continue participation for an
additional two years(five years total). The annual COLA of 2.5%is not payable while members are
in the DROP.
• The optional service purchase provision would be eliminated.
Participants Affected
The extension of the DROP participation period would apply to all active members hired prior to
October 1,2010(i.e.,Tier A and Tier B members)who become eligible for normal retirement,exce t
for members participating in the AFSCME or GSAF bargaining units. The extension of the DROP
2
would also apply to current members participating in the DROP as the effective date of the amending
ordinance,except for members participating in the AFSCME or GSAF bargaining units.
Elimination of the optional service purchase provision would apply to all active members after the
effective date of the amending ordinance,except for members participating in the AFSCME or GSAF
bargaining units.
Actuarial Assumptions and Methods
To measure the impact of extending the DROP,the assumed COLA delay was increased from 2.75
years to 4 years for active Tier A and Tier B members who are not participating in the AFSCME or
GSAF bargaining units. Additionally,the COLA delay was increased from 3 years to 5 years for
members currently participating in the DROP and not members of the AFSCME or GSAF bargaining
units.
All other assumptions and methods are the same as shown in the October 1,2012 Actuarial Valuation
Report.
Some of the key assumptions/methods are:
Investment return— 8.0%per year
Salary increase — 4.5%to 7.0%depending on service
Cost Method — Entry Age Normal Cost Method
Amortization Period for Any Change in Actuarial Accrued Liability
30 years.
Summary of Data Used in Report
.Same as data used in October 1,2012 Actuarial Valuation Report.
Actuarial Impact of Proposal(s)
See attached page(s). Extending the DROP from three to five years for members not participating in
the AFSCME or GSAF bargaining units will decrease the.first year annual required contribution by
$609,986 or 0.93%of Non-DROP payroll.
Since the employer portion of the cost for members to purchase service is not prefunded,eliminating
the optional service purchase provision would not have an immediate financial effect on the Plan.
Special Risks Involved With the Proposal That the Plan Has Not Been Exposed to Previously
None
Other Cost Considerations
As of October 1,2012 the Market Value of Assets exceeds the Actuarial Value by$2.07 million. This
difference will be recognized over the next several years. Once all the gains and losses through.
September 30,2012 are fully recognized in the Actuarial Value of Assets,the contribution rate will
decrease by roughly 0.3%of non-DROP payroll unless there are further gains or losses.
3
CITY OF MIAMI BEACH EMPLOYEES' RETIREMENT PLAN
Impact Statement—September b,2013
Description of Amendment
The proposed ordinance incorporates the following plan changes and would apply to all active members
and members participating in the Deferred Retirement Option Program(DROP)except for members of
the AFSCME or GSAF bargaining units:
I. The maximum period for participation in the Deferred Retirement Option Program(DROP)
would be extended from three to five years for members hired before October 1,2010(i.e.,Tier A
and Tier B members). This extension would apply to all active members in Tiers A and B who
elect to participate in the DROP in the future as well as current DROP members. The 2.5%
COLA is not payable while members are in the DROP.
2. The option for members to purchase up to 2-years of credited service would be eliminated.
Funding Implications of Amendment
See attachments.
Certification of Administrator
I believe the amendment to be in compliance with Part V1I, Chapter 112, Florida Statutes and Section
14,Article X of the Constitution of the State of Florida.
For the Board of Tnistecs
as Plan Administrator
4
ANNUAL REQUIRED CONTRIBUTION(ARC)
A. Valuation Date October 1,2012 October 1,2012 Increase/
Valuation Extend DROPfrom (Decrease)
Three to Five Years
B. ARC to Be Paid During
Fiscal Year Ending 9/30/2014 9/30/2014
C. Assumed Date of Employer Contrib. 10/1/2013 10/1/2013
D. Annual Payment to Amortize
Unfunded Actuarial Liability $ 17,184,796 $ 16,788,153 $ (396,643)
E. Employer Normal Cost 7,085,589 6,9.17,430 (168,159)
F. ARC if Paid on the Valuation Date:
D+E 24,270,385 23,705,583 (564;802)
G. ARC Adjusted for Frequency of
Payments 26,212,016 25,602.,030 (609,986)
H. ARC as%of Covered Payroll
-Non-DROP Payroll 40.29 % 39.36 % (0.93) %
-Total Payroll 37.56 % 36.69 % (0.87) %
1. Covered Payroll for Contribution Year
-Non-DROP Payroll 65,053,945 65,053,945 -
-Total Payroll 69,782,6.89 69,782,689 -
5
ACTUARIAL VALUE OF BENEFITS AND ASSETS
A. Valuation Date October 1, 2012 October 1, 2012 Inerease0
Valuation Extend DROP from (Decrease)
Three to Five Years
B. Actuarial Present Value of A11.Projected
Benefits for
1. Active Members
a. Service Retirement Benefits $ 264,825,342 $ 260,184,135 $ (4,641,207)
b. Vesting Benefits 31,967,178 31,967,178 -
c. Disability Benefits 7,271,899 7,271,899 -
d. Preretirement Death Benefits 3,953,764 3,953,764 -
e. Return of Member Contributions 631,843 631,843 -
f. Total 308,650,026 304,008,819 (4,641,207)
2. Inactive Members
a. Service Retirees&Beneficiaries 409,347,392 407;869,328 (1,478,064)
b. Disability Retirees 12,377,127 12,377,127 -
c. Terminated Vested Members 117480,115 11,480,115 -
d. Total. 433,204,634 4311)726,570 (1,478,064)
3. Total for All Members 741,854,660 735,735,389 (6,119,271)
C. Actuarial Accrued (.Past Service)
Liability per GASB No. 25 637,363,774 632,541,230 (4,822,544)
D. Plan Assets
1. Market Value 423,447,642 423,447,642 -
2. Actuarial Value 421,376,041 421,376,041
E. Unfunded Actuarial Accrued Liability(C-D2) 21.5,987,733 211,165,189 (4,822,544)
F. Funded Ratio(132 _C) 66.1 % 66.6 % 0.5 %
G. Actuarial Present Value of Projected
Covered Payroll ' 543,825,043 543,825,043 -
H. Actuarial Present Value of Projected
Member Contributions 51,791,078 51,791,078 -
6
CALCULATION OF EMPLOYER NORMAL COST
A. Valuation Date October 1, 2012 October 1, 2012 Increase/
Valuation Extend DROP from (Decrease)
Three to Five Years
B. Normal Cost for
1. Service Retirement Benefits $ 9,825,032 $ 9,656,873 $ (168,159)
2. Vesting Benefits 2,047,065 2,047,065 -
3. Disability Benefits 529,872 529,872 -
4. Preretirement Death Benefits 268,222 268,222 -
5. Return of Member Contributions 225,573 225,573 -
6. Total for Future Benefits 12,895,764 12,727,605 (168,159)
7. Assumed Amount for Administrative
Expenses w 694,l 80 694,180 -
8. Total Normal Cost 13,589,944 131,421,785 (168,159)
%of Covered Payroll
-Non-DROP Payroll 20.99 % 20.63 % (0.26) %
- Total Payroll 19.47 % 19.23 % (0.24) %
C. Expected Member Contribution 6,504,355 6,504,355 -
%of Covered Payroll
-Non-DROP Payroll 10.00 % 10.00 % 0.00 %
-Total Payroll 9.32 % 9.32 % 0.00 %
D. Employer Normal Cost:B8-C 7,085,589 6,917,430 (168,159)
%of Covered Payroll
-Excluding DROP Payroll 10.89 % 10.63 % (0.26) %
- including DROP Payroll 10.15 % 9.91 % (0.24) %
7
PARTICIPANT DATA
October 1,2012 October 1, 2012
Valuation Extend DROP from
Three to Five Years
ACTIVE MEMBERS
Number(Non-DROP) 1,049 1,049
Covered Annual Non-DROP Payroll $ 65,053,945 $ 65,053,945
Average Annual Mon-DROP Pay $ 62,015 $ 621015
Total Covered Annual Payroll $ 69,782,689 69,782,689
Average Annual Pay $ 63,209 63,209
Average Age 45.1 45.1
Average Past Service 9.8 9.8
Average Age at Hire 35.3 35.3
DROP PARTICIPANTS
Number 55 55
Annual Benefits $ 2,9947703 2,994,703
Average Annual Benefit $ 54,449 54,449
Average Age 59.3 59.3
RETIREES&BENEFICIARIES
Number 17002 1,002
Annual Benefits $ 333085,394 $ 33,085,394
Average Annual Benefit $ 332019 $ 33,019
Average Age 71.1 71.1
DISABILITY RETIREES
Number 43 43
Annual Benefits $ 1,117,160 $ 17117060
Average Annual Benefit $ 25,980 $ 25,980
Average Age 65.6 65.6
TERMINATED VESTED MEMBERS
Number 63 63
Annual Benefits $ 1,343,444 $ 1,343,444
Average Annual Benefit $ 21,325 $ 21,325
Average Age 45.9 45.9
THIS PAGE INTENTIONALLY LEFT BLANK
COMMISSION ITEM SUMMARY
Condensed Title:
An ordinance amending Ordinance 2006-3504, Miami Beach Employees' Retirement Plan, for Communications Workers of
America (CWA) bargaining unit members and members not covered by a collective bargaining unit, extending the DROP to
five years and eliminating the buyback of prior creditable service.
Key Intended Outcome Supported:-
Attract and maintain a Workforce of Excellence.
Item Summa /Recommendation:
Second Hearing Public Meeting
The City and CWA reached a three-year labor agreement covering the period October 1, 2012, through September 30, 2015,
which calls for pension changes, in an effort to maximize the savings, the Administration is recommending that the same
provisions apply to members not covered by a collective bargaining unit. (Employees belonging to the Unclassified and
Others salary groups.) The pension changes include: extending the Deferred Retirement Option Program (DROP) for pre-
2010 members from three to five years and eliminating the ability to purchase prior creditable service effective September 30,
2013.
The extension of the DROP yields saving to the City's ARC because participants are not eligible for the annual retiree COLA
while in the DROP. In addition, there the decrease in the actual contributions the City makes since employees in the DROP
are no longer earning retirement benefits. On average, there are 157 employees who elect to purchase additional creditable
service each year. The actuarial impact to the City is significantly higher than what the member pays for the benefit.
An updated impact statement from the plan's actuary, reflecting the savings attributable to these three salary groups will be
provided as a supplemental item,
Advisory Board Recommendation:
Budget Advisory Committee Pension Reform Initiative Recommendation Report August 2012
Financial Information:
Source of Amount
Funds: FY2012/2013 Impact on salaries attributed to extending the DROP
$ 8,000
FY2013/2014 Reduction to the City's Annual Required Contribution to MBERP represented by
2 $584,000 in pension saving due to DROP extension which is offset by$113,000 in
($471,000) salary increases
FY2014/20 Reduction to the City's Annual Required Contribution to MBERP payable October 1,
3 15 2015, represented by$855,000 in pension savings($584,000 from DROP and
$448,000 $271,000 from elimination of buyback),which is offset by$407,000 in salary increases
OBPI Total ($911,000)
Financial Impact Summary: The full actuarial cost of purchasing two years of service to a 45 year old member with ten
years of credited service and an annual salary of$60,000 is approximately $38,000; yet, the member pays $12,000 in either
cash, accrued leave or a combination thereof. The difference of $26,000 ($4.082 million each year for 157 buybacks) is
recognized as an experience loss and is funded by additional City contributions over time. The effect on the Annual Required
Contribution (ARC) due to this member's service purchase is an increase of about$2,300 the first year after the buyback and
for each of the 30 years thereafter. Based on trends, the average annual impact of$2,300 per member represents $361,000
to the City in each year(for 157 buybacks per year of which $271,000 is attributed to CWA, Unclassified and Others), yielding
an increased savings in the long-term.
The budget included $84,000 in increased salaries from excluding the DROP offset by pension savings of $233,000, based
on the impact for CWA only. Estimates have since been refined and updated to include the impacts of Unclassified and
Others, for an estimated salary increase of$113,000, offset by-pension savings of$584,000 for a net savings of$471,000 for
FY 2013/14.
City Clerk's Office Legislative Tracking:
Sylvia Cres o-Tabak, Human Resources Director
Sign-Offs:
Department Director Assistant City M ger City Manager
Sylvia Cres o-Tabak FE =J Kathie G. Brooks Jimmy L. Morales
&AIAMIBEACH ENDA ITEM Stt AGENDA
_ MIAMI BEACH
City of Miami Beath, 1700 Convention Center Drive,Miami Beach, Florida 33139,vwvw.miamibeachfl.gov
COMMISSION MEMORANDUM
TO: Mayor Matti Herrera Bower and Members f the City Commission
FROM: Jimmy . Morales City Manage Y Y 9 1
DATE: September 11, 2013 SECOND HEARING PUBLIC READING
SUBJECT: AN ORDINANCE OF THE MAYOR AND CITY COMMISSION OF THE CITY
OF MIAMI BEACH, FLORIDA, IMPLEMENTING PROVISIONS OF THE
2012-2015 COLLECTIVE BARGAINING AGREEMENT BETWEEN THE
CITY AND THE COMMUNICATIONS WORKERS OF AMERICA, (CWA)
LOCAL 3176; IMPLEMENTING SIMILAR RETIREMENT PLAN
AMENDMENTS FOR MEMBERS WHO ARE NOT INCLUDED IN ANY
BARGAINING UNIT; AMENDING THE MIAMI BEACH EMPLOYEES'
RETIREMENT PLAN CREATED BY ORDINANCE 2006-3504; AMENDING
SECTION 2.26 OF THE PLAN BY EXTENDING THE DEFERRED
RETIREMENT OPTION PLAN (PLAN) PROGRAM FROM THREE (3) TO
FIVE (5) YEARS FOR ELIGIBLE MEMBERS; AMENDING SECTION 5.13
TO REFLECT AMENDED ELIGIBILITY AND PARTICIPATION
REQUIREMENTS AND AMENDED DROP PLAN FEATURES; AMENDING
SECTION 4.03 BY ELIMINATING THE PURCHASE OF ADDITIONAL
CREDITABLE SERVICE FOR CERTAIN MEMBERS; PROVIDING FOR
SEVERABILITY; REPEALING ALL ORDINANCES IN CONFLICT
THEREWITH; AND PROVIDING AN EFFECTIVE DATE.
ADMINISTRATION RECOMMENDATION
The Administration recommends approval of the ordinance.
BACKGROUND
In 2010, the Administration negotiated changes to pension benefits for then current and future
employees who participate in the Miami Beach Employees' Retirement Plan (MBERP). These
changes were included in the labor agreements entered into by the City with the: American
Federation of State, County and Municipal Employees (AFSCME), Communications Workers of
America (CWA), Local 3178, and Government Supervisors Association of Florida (GSAF). In
keeping with the spirit of treating similar groups of employees consistently, these contractual
changes were also applied to all members of the Plan not covered by a collective bargaining
unit.
The changes to MBERP implemented in 2010 included an increase of two percent to the
employee's pension annual contribution. This increase was implemented for the general
Commission Memorandum
September 11,2013
MBERP Pension Ordinance CWA 2nd Reading
Page 2 of 8
employee salary groups as follows: Unclassified and Others in January 2010, employees
covered by the AFSCME and GSAF collective bargaining units in July 2010, and employees
covered by the CWA collective bargaining unit in November 2010. The additional employee
contribution remains in effect for incumbents in all salary groups except employees covered by
the AFSCME collective bargaining agreement (CBA), which expired April 30, 2013, and the
provision sunsetted.
The Final Average Monthly Earnings (FAME) increased from two to five years for current (Tier A
and Tier B members) and future employees (Tier C members), phasing in those members who
were between two and four years from normal retirement age, so as not to adversely impact
them. The change in FAME yielded a reduction of approximately $1.9 million in the City's annual
Actuarial Required Contribution (ARC). Gabriel, Roeder and Smith (GRS), the actuary for
MBERP, estimated that the change in FAME for all members will yield an annual savings
ranging from $1.49 million to $2.275 million per year (approximately 2.12 percent of payroll)
each year over the next ten years.
Additional pension related changes were negotiated for all employees hired after September 30,
2010 (November 2010 for employees whose classifications are covered by the CWA collective
bargaining unit). The changes for new employees (Tier C) included:
• Normal retirement - Age 55 with a minimum of thirty years of creditable service, or age
62 with a minimum of five years of creditable service.
• The early retirement date will be the date on which the member's age plus years of
creditable service equals 75, with a minimum age of 55.
• The FAME will be an average of the highest five (5) years of employment.
• The benefit multiplier will be two and one half percent multiplied by the member's years
of creditable service, subject to a maximum of 80% of the member's FAME.
• The retiree Cost of Living Adjustment (COLA) will be one and one half percent per year,
with the first adjustment deferred to one year after the end of the Deferred Retirement
Option Plan (DROP).
• The employee contribution will be ten percent of pensionable salary.
• The standard form of benefit is a lifetime annuity.
• Members who separate from City employment with five or more years of creditable
service but prior to the normal or early retirement date will be eligible to receive a normal
retirement benefit at age 62.
• Employees will be eligible to enter the DROP at the normal retirement age specified
above and may participate in the DROP for a maximum of five years. (The five year
DROP is applicable to those CWA bargaining unit employees who were hired on or after
October 27, 2010.)
Commission Memorandum
September 11,2013
MBERP Pension Ordinance CWA 2"d Reading
Page 3 of 8
The annual savings toward the ARC and attributed to the changes for future employees
beginning in FY 2011/2012, was approximately $900,000 (1.92 percent of payroll). GRS
estimated that the City would realize an additional annual reduction of seven-tenths percent, per
payroll in perpetuity. These savings will vary from a low of$910,000 in FY2011/2012 to as much
as $5.995 million in FY202012021.
The negotiating teams for the City and CWA began meeting in September 2012, to negotiate a
successor agreement since the 2009-2012 collective bargaining agreement expired on
September 30, 2012. After 15 negotiation sessions, on June 28, 2013, the City and CWA
reached a tentative three year agreement covering the time period of October 1, 2012 through
September 30, 2015.
Shortly thereafter, 84 percent of the CWA membership that voted ratified the agreement. The
City Commission did the same on July 17, 2013.
Pursuant to the negotiated terms and condition of the agreement between the City of Miami
Beach and CWA, the Administration proposed this ordinance amendment on first reading also
at the Commission meeting on July 17, 2013.
ANALYSIS
The pension changes recently negotiated with CWA are expected to generate a savings toward
the City's ARC, as well as savings applicable to the Unfunded Actuarial Accrued Liability
(UAAL). The City is still negotiating with AFSCME and GSAF and the agreement with CWA is
contingent upon negotiating a parallel provision regarding the elimination of the creditable
service buyback provision with at least one of the two unions.
Given that savings will be greater if changes apply to all members of the Plan, the pension
changes negotiated with the CWA should also be implemented for those members not covered
by a collective bargaining unit (Unclassified and "Others" salary groups).
The City and CWA have agreed to the following:
Extension of the Deferred Retirement Option Plan (DROP)
A DROP is an arrangement used by many public organizations under which employees who
would otherwise retire and collect benefits pursuant to the employer's defined benefit (pension)
retirement plan continue working for a fixed number of years.
Instead of having the compensation and additional years of service taken into account for
purposes of the defined benefit plan formula, the employees have a sum of money, equal to
their monthly retirement benefit, credited during their-extended employment to an interest
bearing account under the employer's retirement plan.
No further contributions are made to the employees' pensions but as long as they remain in the
DROP, they continue earning their full salaries and all other applicable incentive pays and
employment benefits, if any. If these employees are not exempt from the provisions of the Fair
Labor Standards Act (FLSA) they earn overtime if they work more than 40 hours in one week
and they are also eligible for merit increases and salary COLAs in effective during their years in
Commission Memorandum
September 11,2013
MBERP Pension Ordinance CWA 2"d Reading
Page 4 of 8
the DROP.
When the employees leave at the end of the DROP period, they collect their deferred retirement
benefit contributions from the interest bearing account. At that point, they start collecting the
monthly benefits they earned based on earlier years of service under the defined benefit plan.
While participating in the DROP, employees are not eligible for the retiree COLA.
There are two reasons why the DROP yields savings to the City's ARC. The first, is that
participants are not eligible for the annual retiree COLA. The second is that there is a decrease
in the actual contribution the City makes for each employee in the DROP.
Currently, there is a three year DROP for Tier A and Tier B members and a five year DROP for
Tier C (post-2010) members. The City and the CWA have agreed to extend the DROP period
for Tier A and Tier B (pre-2010) members from three to five years effective July 17, 2013.
The City intends to extend the DROP period to all pre-2010 members currently participating in
the DROP, except for pre-2010 members covered by the AFSCME and GSAF collective
bargaining units.
Current DROP participants whose period ends between July 17, 2013 and July 16, 2016, shall
be given a one-time opportunity to submit an irrevocable amended election form provided by the
Board, within thirty calendar days from the effective date of the ordinance, extending their
DROP to a maximum of five years. Members of the unclassified salary group must have their
intent to extend their DROP periods approved by the City Manager.
According to GRS, the total estimated impact from extending the DROP period for all pre-2010
members represents a reduction in the present value of future benefits of approximately $7.8
million. This means the Plan would be expected to pay out $7.8 million less, in today's dollars,
to current members of the Plan, (see Attachment 1).
Based on the Actuarial Impact Statement provided by GRS (Attachment 1) if the amendment to
the ordinance also applied to AFSCME and GSAF bargaining unit employees, the City's ARC
payable on October 1, 2014, would be reduced by approximately $778,000. That savings
includes a reduction in the amortization payments on the Unfunded Actuarial Accrued Liability
(UAAL) of approximately $6.076 million over the next 30 years. The reduced payments on the
UAAL will decrease the ARC by approximately $540,000 each year for the next 30 years.
Additionally, the normal cost will decrease by approximately $238,000, which represents 0.34
percent of total covered payroll for all members or 0.38 percent of Tier A and B members'
covered payroll. The reduction of 0.38 percent in Tier A and B members' covered payroll will
continue until all such members have retired. The funded ratio will increase by approximately
0.6 percent.
It is estimated that the CWA bargaining unit employees, unclassified and "others" salary groups
comprise approximately 75 percent of the MBERP membership. Therefore, it is estimated that
the pension changes applicable to these salary groups will yield a savings of $584,000 off the
ARC payable on October 1, 2014.
The City continues to negotiate with AFSCME and GSAF and the goal is to obtain consistent
Commission Memorandum
September 11,2013
MBERP Pension Ordinance CWA 2�d Reading
Page 5 of 8
pension reforms for all of the general employees' salary groups. If successful, the City would
realize the full savings of$778,000 from the ARC payable on October 1, 2014.
The analysis provided by the pension actuary does not take into account the fiscal impact
associated with salary earnings. By extending the DROP to five (5) years, long term employees,
earning higher salaries, will remain employed with the City longer, requiring the City to pay their
higher salaries for a longer period.
However, since new employees would not be hired to replace those in the DROP, the City may
accrue some savings since it will not be contributing toward retirement benefits. Quantifying the
fiscal impact from a salary perspective is difficult since there is no true way to forecast
assumptions regarding which employees will choose to extend their DROP participation and
who will choose to separate.
There are 53 members in the MBERP DROP. The following chart illustrates the effect on
salaries if the DROP period is extended. To get to these numbers, the salary of each DROP
member was compared to the entry level salary of a new incumbent in the classification
ultimately affected by the DROP participant's retirement. For example, when a Lifeguard
Lieutenant retires, his/her position becomes available to an incumbent in a feeder classification
and the domino effect leads to the City ultimately hiring a new entry level Lifeguard I. In such an
example, the impact is the difference between the Lifeguard Lieutenant's salaries and Lifeguard
I entry level salary. For illustrative purposes, the assumption is that all current DROP
participants whose period is extended take advantage of the opportunity and remain employed
with the City.
Note that the numbers related to pension savings and salary costs associated with these
changes were refined between the first and second reading of the ordinance. The
Administration has requested an updated Actuarial Impact Statement from GRS reflecting only
the savings attributable to the three salary groups identified herein. The update will be provided
as a supplemental item.
FY 2012/13 FY FY 2013/14 FY FY 2014/15 FY
Salary Group Eligible 2012/13 Newly
Eligible 2013/14 Newly ble 2014/15 Total
Incumbents Cost Incumbents COQ Incumbents Cost
AFSCME 0 $ - 3 $ 9,413 2 $ 52,696 $ 62,109
CWA 2 $7,590 5 $ 69,793 9 $261,212 $338,595
GSAF 0 $ - 0 $ - 2 $ 34,333 $ 34,333
Unclassified 0 $ - 3 $ 43,145 9 $145,426 $188,571
Others 0 $ - 0 0 $ - 0
Tota 1 $7,590 $122,351 $493,667 $623,608
Tota I CWA
and $7,590 $112,938 $406,638 $527,166
Unclassified
Commission Memorandum
September 11,2013
MBERP Pension Ordinance CWA 2"d Reading
Page 6 of 8
Elimination of Two Year Past Service Option
The CWA agreed to eliminate the provision that permits bargaining unit members to purchase
up to two years of prior creditable service effective September 30, 2013, provided that either
AFSCME or GSAF agrees to a parallel provision in their respective contracts.
Currently, any member with five or more years of service can purchase up to two years of
creditable service earned prior to the member's date of hire by the City. Such benefit is
contingent upon the member not receiving a pension benefit for the same period under another
retirement plan (§112.65, Florida State Statutes). Eligible prior service includes: (1) military
service in the United States Armed Forces or Coast Guard; (2) full-time employment with
another governmental entity; or (3) full-time employment in the private sector performing the
same or similar duties the member performs for the City at the time of his/her additional service
purchase. Members who exercise this option pay ten percent of their annual rate of pensionable
earnings multiplied by the number of years and fractions of a year purchased.
On average, there are 157 employees who elect to purchase additional creditable service in the
MBERP each year. The true actuarial impact is significantly higher than what the member pays
for the benefit. The ultimate cost of the prior creditable service purchase provision is measured
by the difference between the full actuarial cost of the time purchased and the amount a
member pays (e.g., ten percent of pay for each year purchased). The full actuarial cost to
purchase the maximum of two years of service to a 45 year old member with ten years of
credited service and an annual salary of $60,000 is approximately $38,000; yet pursuant to
current provisions, the member pays $12,000. The difference of $26,000 is recognized as an
experience loss and is funded by additional City contributions over time.
The explanation in the previous paragraph assumes that all actuarial plan assumptions included
in the Actuarial Valuation Report are met each year. The effect on the ARC due to this
member's service purchase is an increase of about $2,300, for the first year. Based on trends,
the average annual impact of $2,300 per member who exercises a two year prior service
purchase represents $361,000 to the City each year based on an average of 157 buybacks per
year, of which $271,000 is attributed to CWA, unclassified and others. This impact is
compounded each year that buybacks are allowed as shown in the table below.
IMPACT
FY 2014/15 FY 2015/16 FY 2016/17 Future Years
FY 2013/14 $271,000 $271,000 $271,000
Buybacks Savings as a
FY 2014/15 result of the
Buybacks $271,000 $271,000 elimination of the
FY 2015/16 $271,000 buyback will
Buybacks continue to
Total $271,000 $542,000 $813,000 compound each
ear.
According to GRS, elimination of this benefit provides significant long-term savings to the plan
although there will be losses due to service purchases in fiscal year ending September 30,
2013, that will be reflected in the October 1, 2013, Actuarial Valuation, since elimination of the
service purchase provision will not be effective until September 30, 2013.
Commission Memorandum
September 11,2013
MBERP Pension Ordinance CWA 2"d Reading
Page 7 of 8
The Budget Advisory Committee's (BAC) Recommendation on Pension Reform Report from
August 2012 included recommended policies and guidelines for the City to adopt in order to
establish thresholds which, if not met, would require the City to take prompt and appropriate
measures to meet the guideline criteria. At the July 17, 2013, City Commission meeting, the
Commission approved Resolution No. 2013-28290, adopting the BAC's policies and guidelines
in order to ensure long term pension reform.
The adopted policy statements include, but are not limited to:
• The City shall fund at least the normal cost of pension. If this exceeds the amount of the
actuarially determined annual required contribution, the excess should be placed in a
pension stabilization fund, to be made available for future pension shortfalls.
• The City should require 5, 10 and 20 year projections of required pension contributions
as part of the annual actuarial valuations for each of the City's pension plans. These
projections shall be based on the current actuarial assumptions for each plan. The
projections shall be updated to reflect the cost of any proposed benefit enhancement
before the City Commission agrees to the enhancement. The cost of these studies shall
be funded separately from the annual contribution to the pension plan
• There shall be an experience study of each of the City's pension plans' actuarial
assumptions performed by an actuary that is independent from the pension board. The
experience study should be conducted at least once every three years to compare actual
experience to the assumptions. The independent actuary shall make recommendations
for any changes in assumptions based on the results of the experience study, and any
deviations from those assumptions by the pension boards shall be justified to the City
Commission.
When this ordinance is revised again, upon conclusion of negotiations with GSAF and
AFSCME, the pension policies adopted via Resolution No. 2013-28290 will be incorporated.
CONCLUSION
The leadership negotiating for the CWA has agreed to the aforementioned pension changes. A
contract ratification vote for the CWA membership was held on July 15, 2013. The results of the
ratification vote resulted in 84 percent of the members who voted supported the proposed
agreement.
The Administration recommends amending Ordinance No. 2006-3504, the Miami Beach
Employees' Retirement Plan by extending the DROP for pre-2010 members from three to five
years; and eliminating the two year past service buyback option for members covered by the
CWA collective bargaining agreement, as well as the unclassified and "others" salary groups.
Implementing the described changes for these three (3) salary groups, will provide additional
pension savings in the short and long term.
The City will continue to bargain with AFSCME and GSAF and seek pension savings applicable
to all plan members. GRS prepared an Actuarial Impact Statement to be submitted to the State
of Florida Division of Retirement which reflects the proposed changes to the MBERP ordinance
Commission Memorandum
September 11, 2013
MBERP Pension Ordinance CWA 2"d Reading
Page 8 of 8
for all plan members upon approval of the amended ordinance at first reading. Should the City
not reach agreement with AFSCME and GSAF regarding parallel pension reform in their
respective labor contracts, the Actuarial Impact Statement will have to be amended accordingly.
Based on the foregoing, the Administration recommends that the City Commission approve the
ordinance.
JLM/ B/SC-T/CMG
T:\AGENDA\2013\September 11\CWA\CWA 2012-2015 MBERP Pension DROP and Buyback Memo 2nd Reading.docx
ATTACHMENT 1
Gabriel Roeder Smith & Company One East Broward Blvd. 954.527.1616 phone
GRS C011SUIMIUS L Actuaries Suite 505 954.525.0083 fax
Ft.Lauderdale,FL 33301-1804 www.gabriciroeder.com
July 15,2013
Ms. Carla Gomez
Assistant Director, Human Resources
City of Miami Beach
1700 Convention Center Drive
Miami Beach, Florida 33139
Re: Actuarial Impact Statement for Proposed Changes to the Miami Beach Employees'Retirement Plan
Dear Carla:
As requested, we have prepared the enclosed Actuarial Impact Statement showing the financial effect of the
following proposed changes to the Miami Beach General Employees' Retirement System:
1. The maximum period for participation in the Deferred Retirement Option Program(DROP)would be
extended from three to five years for members hired before October 1,2010(i.e.,Tier A and Tier B
members). This extension would apply to all active members in Tiers A and B who elect to participate
in the DROP in the future as well as current DROP members. The 2.5%COLA is not payable while
members are in the DROP.
2. The option for members to purchase up to 2-years of credited service would be eliminated.
The Statement must be filed with the Division of Retirement before the final public hearing on the ordinance.
Please have a member of the Board of Trustees sign the Statement. Then send the Statement along with a copy
of the proposed ordinance to Tallahassee.
With regard to item 2 above,the employer portion of the cost for members to purchase service is not prefunded.
Therefore,eliminating the service purchase provision will not have an immediate financial effect on the Plan.
When we prepare our annual valuation,any increases to the liability due to service purchased during the
previous year are reflected in the net gain/loss for the year,which is amortized over 30 years.
The ultimate cost of the current service purchase provision is measured by the difference between the full
actuarial cost of the service purchased and the amount that members currently pay to purchase service(i.e.,
10%of pay for each year purchased). As an example,the full actuarial cost to purchase the maximum of 2
years of service for a member who is currently age 45 with 10 years of credited service and an annual salary of
$60,000 is approximately$38,000. Under the current provisions,the member pays$12,000. The difference of
$26,000 is funded by additional City contributions over time. In this example,the effect on the annual required
contribution due to the service purchase is an increase of about$2,300 for the first year.This assumes that all of
our actuarial assumptions as described in the October 1,2012 Actuarial Valuation Report are met each year.
The impact on the total gain/loss varies each year depending on the demographics and the specific benefit
provisions that apply to members who purchased service.
Eliminating the service purchase provision will mean that any losses due to service purchases will not occur in
future years. Please note,however,that there will likely be losses due to service purchases in fiscal year ending
September 30,2013 that will be reflected in the October 1,2013 Actuarial Valuation,since elimination of the
service purchase provision will not be effective until September 30,2013.
Ms. Carla Gomez
July 15,2013
Page 2
Summary of Findings
• The present value of future benefits decreases by approximately$7.8 million.
- The Plan would be expected to pay out$7.8 million less,in today's dollars,to current members
of the Plan. This can be viewed as the total cost impact due to the extension of the DROP if the
actuarial assumptions are met each year.
• There is a decrease in the first year Annual Required Contribution for the City that is comprised of a
reduction in the amortization payments on the Unfunded Accrued Liability and a reduction in the normal
cost.
- The Unfunded Accrued Liability decreased by approximately$6.1 million. This reduction will
decrease the annual required contribution by approximately$540,000 each of the next 30 years.
- The first year normal cost will decrease by approximately$238,000 which is 0.34%of total
covered payroll(0.38%of Tier A and B member covered payroll). The reduction of 0.38%of
Tier A and Tier B member covered payroll will exist until all Tier A and Tier B members have
retired.
- The first year required employer contribution would decrease by approximately$778,000 or
1.19%of Non-DROP payroll.
The funded ratio will increase from 66.1%to 66.7%.
Other Cost Considerations
■ As of October 1,2012 the Market Value of Assets exceeds the Actuarial Value by$2.07 million. This
difference will be recognized over the next several years. Once all the gains and losses through September
30,2012 are fully recognized in the Actuarial Value of Assets,the contribution rate will decrease by
roughly 0.3%of non-DROP payroll unless there are further gains or losses.
Additional Disclosures
This report was prepared at the request of the City with the Board's permission and is intended for use by the
City and the Retirement Plan, and those designated or approved by them. This report may be provided to
parties other than the City and Retirement Plan only in its entirety and only with their permission.
This report is intended to describe the financial effect of the proposed plan changes.No statement in this
report is intended to be interpreted as a recommendation in favor of the changes,or in opposition to them.
This report should not be relied on for any purpose other than the purpose described above.
The calculations in this report are based upon information furnished by the Plan Administrator for the
October 1, 2012 Actuarial Valuation concerning Plan benefits,financial transactions,plan provisions and
active members,terminated members,retirees and beneficiaries. We reviewed this information for internal
and year-to-year consistency,but did not otherwise audit the data. We are not responsible for the accuracy or
completeness of the information provided by the Plan Administrator.
The calculations are based upon assumptions regarding future events,which may or may not materialize.
They are also based on the assumptions,methods,and plan provisions outlined in this report. Future
actuarial measurements may differ significantly from the current measurements presented in this report due
to such factors as the following: plan experience differing from that anticipated by the economic or
demographic assumptions;changes in economic or demographic assumptions;increases or decreases
expected as part of the natural operation of the methodology used for these measurements(such as the end of
Gabriel Roeder Smith& Company
Ms.Carla Gomez
July 15, 2013
Page 3
an amortization period or'additional cost or contribution requirements based on the plan's funded status);and
changes in plan provisions or applicable law. If you have reason to believe that the assumptions that were
used are unreasonable,that the plan provisions are incorrectly described,that important plan provisions
relevant to this proposal are not described,or that conditions have changed since the calculations were made,
you should contact the author of the report prior to relying on information in the report.
The undersigned actuaries are members of the American Academy of Actuaries and meet the Qualification
Standards of the American Academy of Actuaries to render the actuarial opinions contained herein. The
undersigned actuaries are independent of the plan sponsor.
This report has been prepared by actuaries who have substantial experience valuing public employee
retirement systems. To the best of our knowledge the information contained in this report is accurate and
fairly presents the actuarial position-of the Plan as of the valuation date. All calculations have been made in
conformity with generally accepted actuarial principles and practices,and with the Actuarial Standards of
Practice issued by the Actuarial Standards Board and with applicable statutes.
Respectfully submitted,
Melissa R.Algayer,MAAA, FCA ff rose,MAAA
Enrolled Actuary No. 11-6467 jnr lied Actuary No. 11-6599
Copy: Rick Rivera
Enclosures
Gabriel Roeder Smith & Company
1
SUPPLEMENTAL ACTUARIAL VALUATION REPORT
Plan
City of Miami Beach Employees' Retirement Plan
Valuation Date
October 1,2012
Date of Report
July 15,2013
Report Requested by
City of Miami Beach
Prepared by
Melissa R. Algayer
Group Valued
All active and inactive members.
Plan Provisions)Being Considered for Change
Present Plan Provisions Before Change
• Members hired before October 1,2010(i.e.,Tier A and Tier B members)who become eligible for
normal retirement may participate in the Deferred Retirement Option Program(DROP)for up to three
years.The annual cost-of-living adjustment(COLA)of 2.5%is not payable while members are in the
DROP.
• Members who have five or more years of service may elect to purchase up to two years of additional
credited service at any time prior to retirement. Members who elect to purchase such service pay
10%of the annual rate of compensation multiplied by the number of years purchased.
Proposed Plan Changes
• Members hired before October 1,2010(i.e.,Tier A and Tier B members)who become eligible for
normal retirement may participate in the Deferred Retirement Option Program(DROP)for up to five
years. Members currently participating in the three-year DROP may also continue participation for an
additional two years(five years total). The annual COLA of 2.5%is not payable while members are
in the DROP.
• The optional service purchase provision would be eliminated.
2
Participants Affected
The extension of the DROP participation period would apply to members hired prior to October 1, 2010
i.e. Tier A and Tier B members who become eligible for normal retirement and current members
� � ) g
participating in the DROP as the effective date of the amending ordinance.
Elimination of the optional service purchase provision would apply to all active members after the
effective date of the amending ordinance.
Actuarial Assumptions and Methods
To measure the impact of extending the DROP,the assumed COLA delay was increased from 2.75
years to 4 years for active Tier A and Tier B members. Additionally,the COLA delay was increased
from 3 years to 5 years for members currently participating in the DROP.
All other assumptions and methods are the same as shown in the October 1, 2012 Actuarial Valuation
Report.
Some of the key assumptions/methods are:
Investment return— 8.0%per year
Salary increase — 4.5%to 7.0%depending on service
Cost Method — Entry Age Normal Cost Method
Amortization Period for Any Change in Actuarial Accrued Liability
30 years.
Summary of Data Used in Report
Same as data used in October 1, 2012 Actuarial Valuation Report.
Actuarial Impact of Proposal(s)
See attached page(s). Extending the DROP from three to five years will decrease the first year annual
required contribution by$778,439 or 1.19%of Non-DROP payroll.
Since the employer portion of the cost for members to purchase service is not prefunded, eliminating
the optional service purchase provision would not have an immediate financial effect on the Plan.
Special Risks Involved With the Proposal That the Plan Has Not Been Exposed to Previously
None
Other Cost Considerations
As of October 1,2012 the Market Value of Assets exceeds the Actuarial Value by$2.07 million. This
difference will be recognized over the next several years. Once all the gains and losses through
September 30,2012 are fully recognized in the Actuarial Value of Assets,the contribution rate will
decrease by roughly 0.3%of non-DROP payroll unless there are further gains or losses.
I
3
CITY OF MIAMI BEACH EMPLOYEES' RETIREMENT PLAN
Impact Statement—July 15, 2013
Description of Amendment
The proposed ordinance incorporates the following plan changes:
1. The maximum period for participation in the Deferred Retirement Option Program(DROP)
would be extended from three to five years for members hired before October 1,2010(i.e.,Tier A
and Tier B members). This extension would apply to all active members in Tiers A and B who
elect to participate in the DROP in the future as well as current DROP members. The 2.5%
COLA is not payable while members are in the DROP.
2. The option for members to purchase up to 2-years of credited service would be eliminated.
Funding Implications of Amendment
Se attachments.
Certification of Administrator
I believe the amendment to be in compliance with Part VII, Chapter 112, Florida Statutes and Section
14,Article X of the Constitution of the State of Florida.
For the Board of Trustees
as Plan Administrator
4
ANNUAL REQUIRED CONTRIBUTION (ARC)
A. Valuation Date October 1, 2012 October 1, 2012 Increase/
Valuation Extend DROP from (Decrease)
Three to Five Years
B. ARC to Be Paid During
Fiscal Year Ending 9/30/2014 9/30/2014
C. Assumed Date of Employer Contrib. 10/1/2013 10/1/2013
D. Annual Payment to Amortize
Unfunded Actuarial Liability $ 1751845796 $ 1656851,042 $ (499,754)
E. Employer Normal Cost 7,0855589 6,864,566 (221,023)
F. ARC if Paid on the Valuation Date:
D+E 24,270,385 23,549,608 (720,777)
G. ARC Adjusted for Frequency of
Payments 26,212,016 25,433,577 (778,439)
H. ARC as %of Covered Payroll
-Non-DROP Payroll 40.29 % 39.10 % (1.19) %
-Total Payroll 37.56 % 3 6.4 5 % (1.11) %
1. Covered Payroll for Contribution Year
-Non-DROP Payroll 65,053,945 65,0535945 -
- Total Payroll 69,782,689 69,782,689 -
5
ACTUARIAL VALUE OF BENEFITS AND ASSETS
A. Valuation Date October 1, 2012 October 1, 2012 Increase/
Valuation Extend DROP from (Decrease)
Three to Five Years
B. Actuarial Present Value of All Projected
Benefits for
1. Active Members
a. Service Retirement Benefits $ 264,825,342 $ 258,655,513 $ (6,169,829)
b. Vesting Benefits 31,967,178 31,967,178 -
c. Disability Benefits 7,271,899 7,271,899 -
d. Preretirement Death Benefits 3,953,764 3,953,764 -
e. Return of Member Contributions 631,843 631,843 -
f. Total 308,650,026 302,480,197 (6,169,829)
2. Inactive Members
a. Service Retirees & Beneficiaries 409,347,392 407,731,946 (1,615,446)
b. Disability Retirees 12,377,127 12,377,127 -
c. Terminated Vested Members 11,480,1 15 11,480,115 -
d. Total 433,204,634 431,589,188 (1,615,446)
3. Total for All Members 741,854,660 734,069,385 (7,785,275)
C. Actuarial Accrued (Past Service)
Liability per GASB No. 25 637,363,774 631,287,564 (6,076,210)
D. Plan Assets
1. Market Value 423,447,642 423,447,642 -
2. Actuarial Value 421,376,041 421,376,041 -
E. Unfunded Actuarial Accrued Liability (C-132) 215,987,733 209,91 1,523 (6,076,210)
F. Funded Ratio (132 _ C) 66.1 % 66.7 % 0.6 %
G. Actuarial Present Value of Projected
Covered Payroll 543,825,043 543,825,043 -
H. Actuarial Present Value of Projected
Member Contributions 51,791,078 51,791,078 -
6
CALCULATION OF EMPLOYER NORMAL COST
A. Valuation Date October 1, 2012 October 1, 2012 Increase/
Valuation Extend DROP from (Decrease)
Three to Five Years
B. Normal Cost for
1. Service Retirement Benefits $ 9,825,032 $ 9,604,009 $ (221,023)
2. Vesting Benefits 2,047,065 2,047,065 -
3. Disability Benefits 529,872 529,872 -
4. Preretirement Death Benefits 268,222 268,222 -
5. Return of Member Contributions 225,573 225,573 -
6. Total for Future Benefits 12,895,764 12,674,741 (221,023)
7. Assumed Amount for Administrative
Expenses 694,180 694,180 -
8. Total Normal Cost 13,589,944 13,368,921 (221,023)
%of Covered Payroll
-Non-DROP Payroll 20.89 % 20.55 % (0.34) %
- Total Payroll 19.47 % 19.16 % (0.31) %
C. Expected Member Contribution 6,504,355 6,504,355 -
% of Covered Payroll
-Non-DROP Payroll 10.00 % 10.00 % 0.00 %
-Total Payroll 9.32 % 9.32 % 0.00 %
D. Employer Normal Cost: 138-C 7,085,589 6,864,566 (221,023)
%of Covered Payroll
- Excluding DROP Payroll 10.89 % 10.55 % (0.34) %
- Including DROP Payroll 10.15 % 9.84 % (0.31)
7
PARTICIPANT DATA
October 1, 2012 October 1, 2012
Valuation Extend DROP from
Three to Five Years
ACTIVE MEMBERS
Number(Non-DROP) 1,049 11049
Covered Annual Non-DROP Payroll $ 65,053,945 $ 65,053,945
Average Annual Non-DROP Pay $ 62,015 $ 62,015
Total Covered Annual Payroll $ 69,782,689 69,782,689
Average Annual Pay $ 63,209 63,209
Average Age 45.1 45.1
Average Past Service 9.8 9.8
Average Age at Hire 35.3 35.3
DROP PARTICIPANTS
Number 55 55
Annual Benefits $ 2,994,703 2,994,703
Average Annual Benefit $ 54,449 54,449
Average Age 59.3 59.3
RETIREES & BENEFICIARIES
Number 1,002 13002
Annual Benefits $ 33,0851394 $ 33,0859394
Average Annual Benefit $ 33,019 $ 33,019
Average Age 71.1 71.1
DISABILITY RETIREES
Number 43 43
Annual Benefits $ 1,117,160 $ 1,117,160
Average Annual Benefit $ 25,980 $ 25,980
Average Age 65.6 65.6
TERMINATED VESTED MEMBERS
Number 63 63
Annual Benefits $ 1,343,444 $ 1,3431444
Average Annual Benefit $ 21,325 $ 21,325
Average Age 45.9 45.9
N= THURSDAY.,AUGUST 29,2013 1 17NE
MIAMIBEACH
CITY OF MIAMI BEACH
,NOTICE OF PUBLIC HEARINGS
I NOTICE IS HEREBY given that public hearings will be held by the Mayor and City Commission of the City'of.
€ Miami Beach,Florida,in the Comrrdssion Chambers,and Floor,City Hall,1700 Convention Center Drive,Miami Beach,Florida,
on Wednesday,September 11,2013 to.consider the following;
10:15 am.
An Ordnance implementing Provislons Of. The 2012-2015 Collective Bargaining Agreement Between The City And
The Communications Workers Of America,(CWA)Local 3178;Implementing Similar Retirement Plan Amendments For Members
It Who Are,Not Included In Any Bargaining Unit:Amending The Miami Beach Employees'Retirement Plan Created By Ordinance
2006-35U;Amending Section 2.26 Of The Plan By Extending The Deferred Retirement Option Plan(Plan)Program From Three(3)
To Five(5)Years For Eligible Members;Amending Section 5.13 To Reflect Amended Eligibility And Participation Requirements And
Amended,DROP Plan Features;Amending Section 4.03 By Eliminating The Purchase Of Additional Creditable Service For Certain
Members;Providing For Severability;Repealing All Ordinances N Conflict Therewith;And Providing An Etfective.Date.
I Inquiries may be directed to the Human Resources Department(305)673-7524.
10:30 am
An Ordinance Amending Ordinance No.7139,The Classified Employees Salary Ordinance Of The City Of Miami Beach,Florida,
As Follows:Providing For The Classifications In Group IV,Represented.By The Communications Workers Of America(CWA)Local
3178,In:Accordance With The Negotiated Collective Bargaining Agreerent,Effective October 1,2012,There.Shall Be An Increase
Of Eleven Percent(1190)To The Maximum Wage For The Classificatlons Of Lifeguard 11 And Lifeguard Lieutenant;Effective The
First Pay Period Ending in October Of 2014,There Shall Be An Across.The.Board Cost-Of=Living Adjustment(COLA)Of Three
Percent(3%),And The Minimum And Maximum Of Each Pay Range Will Also Be Increased By Three Percent(3%);Repealing All
Ordinances In Conflict;Providing For Severabibty;An Effective Date And Codification.
Inquiries may be directed to the Human Resources Department(305):673-7524.
10:45 am..
Minimum Unit Sizes.For Historic Hotels And RM-2 Tower Setbacks
Ordinance Amending The Land Development Regulations Of The Code Of The.Ctty Of Miami Beach,By Amending Chapter 142,
*Zoning Districts And Regulations?By Amending Article 11,*District Regulations,"By Amending Division 3,`Residential Multifamily
Districts,"By Amending Section"142.155"To Modify The Requirements For Minimum Hotel Room Size For Historic Hotels Within
E The.R.M-1 District;By:Amending Section"142-217"To Modify The Requirements For Minimum Hotel Room Size.For Historic
III Hot ds Within The RM-2 District;By Amending Section"142-21 To Modify The Tower Setback Requirements Within The RM-2
District;By Amending Section`142-246"To Modify The Requirements For Minimum Hotel Room Size.For Historic Hotels Within
The R:M-3 District;
t Inquiries may be directed to the Planning Department at(305)673-7550.
11:00 am
E Ordinance Amending Chapter 90 Of The Miami Beach_City Code,Entitled"Solid Waste"By Amending Article V,Entitled
"Cityw 1de Recycling Program For Multifamily Residences And Commercial Establishments,"By Amending Section 90-343,Entitled
"Public Education Program.Requirements For Recycling Contractors;Warring Period;Enforcement Date,"By Extending The
Waning Period From June 30,2013 To December 31,2013 And Extending The Beginning Of The Enforcement Period From July 1,
2013 To January 1,2014;By Amending Section 90-345,_Entfded"Enforcement,"By Extending The Beginning Of The Enforcement
Period From July 1,2013 To.January 1,2014.
Inquiries may be rdirected.to the Public Works Department(305)673-7080.
11:15 am.
Ordinance Amending Chapter 90 Of The Mlaml Beach City Code,.Entitled"Solid Waste,"By Amending Section 90-39 Entitled.
"Flne Schedule For Violations Issued And Applied To Owners,,Agents.Tenantis,Occupants,Operators Or Mangers,Or Persons
Responsible For The Violation;By Amending The Fine Schedules For Violations Of Section 90-36 And 90-96 And Providing For
Consistent Terminology Regarding First And Subsequent Offenses;By Amending Section 90-40,Entitled"Fine Schedule For
Violations Of Sections 90-98;90-107;90-191 Et Seq.;90-221 Et Seq.;And 90-228 By Private Waste Contractors,"By Amending
And Providing For Fine Schedules And Violations Consistent With The Provisions In The Referenced Sections And in Sections
90-36,,90-99,And 90-100,And Providing For Consistent Terminology Regarding First And Subsequent Offenses;By Amending.
Section 90_-222,.Entitled""Ust Of Accounts,"By Providing Reporting Requirernennis For Discontinued Accounts Consistent With
Section 9046.
Inquiries may be directed to the Public Works Department(305)673-7080.
11:30 am
Ordinance Amending Chapter 82 Of The City Code,Entitled"Public Property"By Amending Article Vl,Entitled"Nanning Of Public
Facilities And Establishment Of Monuments Or Memorials,"By Amending Section 82-503,Entitled"Naming Of Public Fa ilities,"
By Eliminating The Requirement Of A Referendum In Such Cases When The Facility To Be Named Or Renamed Is City Owned,
And Not Already Named For An Individual Or individuals Pursuant To Section 82-503(a)(4),And The Proposed Name includes
The Name Of The Physical Location Of The Facility Or The Facility To Be Named Or Renamed,Which May Include The Name Of
The Park Ar&Or Street Where The Facility is Located.
inquiries may be directed to the City Attorney's Office(305)673-7470.
INTERESTED PARTIES are Invited to appear at this meeting,or be represented by an agent,or to express their views in writing
addressed to the City Commission,do the City Clerk,1700 Convention Center Drive,1st Floor,City Hall,Mtard Beach,
Florida 33139.Copies of these items are available for public inspection during normal business.hours in the City Clerk's Office,
1700 Convention Center Drive,1 st Floor,City Hall,Miami Beach,Florida 33139.This meeting or any of the items herein may be
continued,and minder such circumstances additional legal notice will not be.provided.
Rafael E.Granado,City Clerk
.City of Miami Beach
Pursuant to Section 286.0105,Fla.Stat,the City hereby advises the public that If a person decides to appeal any decision made
by the City Commission with respect to any matter considered at its meeting or its hearing,such person must ensure that-a
verbatim record of the proceedings is made,.Mich record Includes the testimony and evidence upon Mich the appeal is to be
based,_This notice does not constitute consent by the City for the Introduction or admdssion of otherwise inadmissible or irrelevant
evidence,nor does It authorize challenges or appeals not otherwise allowed by law.
To request this material in accessible format,sign language Interpreters,information on access for persons with disabilities and/
or any accornmodation to review any document or participate in any City-sponsored proceeding,please contact us five days In
advance at(305)673-741 1(voice)or TTY users may also call the Florida Relay Service at•711.
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