Ordinance 92-2800ORDINANCE NO.
92-2800
AN ORDINANCE OF THE CITY OF MIAMI BEACH,
FLORIDA, AMENDING ORDINANCE NO. 88-2603, WHICH
CREATED A RETIREMENT SYSTEM FOR UNCLASSIFIED
EMPLOYEES AND ELECTED OFFICIALS, BY PROVIDING
THAT ADMINISTRATIVE EXPENSES OF THE PLAN SHALL
BE PAID FROM THE PLAN, PROVIDING FOR A REPEALER,
SEVERABILITY AND AN EFFECTIVE DATE.
WHEREAS, the City of Miami Beach, Florida, created a
retirement system known as the Retirement System for Unclassified
Employees and Elected Officials of the City of Miami Beach with the
passage of Ordinance No. 88-2603, as the same has been amended,
and,
WHEREAS, the City desires that the administrative and
investment expenses of the Retirement System be paid from the
assets of the Retirement System rather than directly from the City,
NOW, THEREFORE, BE IT ORDAINED BY THE CITY COMMISSION OF THE
CITY OF MIAMI BEACH, FLORIDA:
SECTION 1. That Section 6.03 of Ordinance 88-2603 be amended
to read as follows:
6.03 Contributions by City
(a) It is the intent of this
Ordinance
that the
City contribute to the Unclassified System each
year the amounts actuarially determined to be
required, in addition to contributions by Members,
to cover the cost of the benefits provided by the
Unclassified System. In addition Provided, however,
administrative expenses shall be paid by the City
Unclassified System. Administrative expenses shall
include, but not be limited to, all attorneys fees
and costs incurred by or on behalf of the
Unclassified System.
(b) An Actuarial investigation of the Unclassified
System shall be made annually to determine the
contribution payable by the City. On the basis of
regular interest and of such mortality and service
tables as shall be adopted by the Board of
Trustees, the actuary shall determine, immediately
after making each valuation, the percentage of the
compensation of all Members required, in addition
to contributions payable by such Members, as
contributions payable by the City to provide the
benefits of the Unclassified System currently
accruing to such Members; the rate per centum so
determined shall be known as the "normal
contribution rate" and the contributions based on
this rate shall be known as "normal contributions".
In addition, the actuary shall determine the part
of the liabilities for benefits under the
Unclassified System not covered by assets in hand,
future contributions of Members and future normal
contributions of the City and this amount shall be
known as the "unfunded accrued liability"; the
percentage of compensation of Members determined to
be payable on account of such liability shall be
known as the "accrued liability contributions
rate". Also, the actuary shall determine the
percentage of compensation necessary to provide for
payment of the administrative expenses of the
Unclassified System and this rate shall be known as
the "administrative cost rate". The actuary shall
recommend on the basis of each valuation a normal
contribution rate, and an accrued liability
contribution rate and an administrative cost
contribution rate.
SECTION 2. REPEALER
All ordinances or parts of ordinances in conflict herewith be
and the same are hereby repealed.
SECTION 3. SEVERABILITY
If any section, sentence, clause or phrase of this ordinance
is held to be invalid or unconstitutional by any court of competent
jurisdiction, then said holding shall in no way affect the validity
of the remaining portions of this ordinance.
SECTION 4. EFFECTIVE DATE
This ordinance shall become effective 10 days after adoption.
PASSED AND ADOPTED this 16th day of
ATTEST:
CITY CLERK
1st reading 9/2/92
2nd reading 9/16/92
C:\ordinance\adm.exp
2
September, 19
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FORM AP
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CITY OF MIAMI BEACH
C.TY HALL 1700 CONVENTION CENTER DRIVE MIAMI BEACH FLORIDA 33 139
OFFICE OF THE CITY MANAGER TELEPHONE: (305) 673-7010
FAX: (305)-673-7782
COMMISSION MEMORANDUM NO. 51-7-92_
TO:
Mayor Seymour Gelber and DATE: September 16, 1992
Members of the City Commission
FROM: Roger M. Canto
City Manager
SUBJECT:
Amendments to the Unclassified Employees and Elected Officials Retirement
System providing for all administrative costs to be paid from the System
Administrative Recommendation
The Administration recommends that the City Commission adopt this Ordinance on
second reading after the public hearing on September 16, 1992.
Background
The costs associated with the administration of the City's three pension systems is
in excess of $2 million annually. The Administration believes that these cost associated
principally with fees and costs incurred in the investment process as well as other
administrative costs associated with the plan should be charged against the income produced
by the investment process. The administrative costs in the Unclassified Employees and
Elected Officials Retirement System, which is the only plan that can be changed without
bargaining, is $260,000 annually.
Analysis
The Board of the Unclassified Plan has had the actuary for the System review the costs
associated with the administration of the System and what impact would inure to the System
if these costs were assumed by the System. The actuary's report indicated that the required
funding of the System would need to be increased by $105,000 if it assumed this $260,000
in additional costs. The amendment proposed herein would save the City $155,000 in the
FY 92/93 Budget. The reason that the fee absorption lowers the cost is that the fees
associated with the production of investment income are assumed to be paid from that
income with no overall reduction in the rate of return. A corollary benefit of the transfers
of these costs is that the Board of the Unclassified Plan will now be responsible for
enhancing the earnings of the Plan
3
AGENDA
STEM
DATE
116
Conclusion
The savings of $155,000 which is already anticipated in the FY 92/93 Proposed
Budget is one of the many savings which must be achieved to bring the City back to
financial health. Therefor, your approval is recommended.
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