2009-3626 Ordinance ORDINANCE NO. 2009-3626
AN ORDINANCE OF THE MAYOR AND CITY
COMMISSION OF THE CITY OF MIAMI BEACH, FLORIDA,
IMPLEMENTING A DEFERRED RETIREMENT OPTION
PLAN FOR MEMBERS OF THE MIAMI BEACH
EMPLOYEES' RETIREMENT PLAN CREATED BY
ORDINANCE 2006-3504, AS SUBSEQUENTLY AMENDED;
CREATING A NEW SECTION 2.26, PROVIDING A
DEFINITION OF DEFERRED RETIREMENT OPTION
PLAN; CREATING A NEW SECTION 5.13, ESTABLISHING
THE DEFERRED RETIREMENT OPTION PLAN AND
SETTING FORTH THE FEATURES OF THE PLAN;
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. Anew Section 2.26 of the Miami Beach Employees' Retirement
Plan created by Ordinance 2006-3504, as subsequently amended, is created to read:
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 Citv 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.
Section 2. Anew Section 5.13 of the Miami Beach Employees' Retirement
Plan created by Ordinance 2006-3504, as subsequently amended, is created to read:
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.
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.
(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 Citv 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 Citv 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 Citv ordinances for employees who
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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 Citv employment, a Member who has participated in the
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 Citv 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.
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 Citv 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
3
investment options approved by the Board, on forms provided by the
Board. Anv pains 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. Anv 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 thirty (30) days followina the Member's termination of Citv
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
4
necessary for the efficient operation of DROP, but shall not adopt any
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. 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 4. Effective Date. This Ordinance shall take effect the 7th day of February
2009.
PASSED and ADOPTED by the City Commission of the City of Miami Beach this
28th day of January , 2009.
Attest:
~~(Lt~t, ~ ~G(~
CITY CLERK
Robert Parcher G~~~/~ '
AY R
Matti Herrera Bower
p~Q AS TO
Ft?RM & LANC3UAGE
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5
COMMISSION ITEM SUMMARY
Condensed Title:
An Ordinance implementing a Deferred Retirement Option Plan for Members of the Miami Beach
Em to ees' Retirement Plan
Ke Intended Outcome Su orted:
Attract and Maintain a Qualit Workforce.
Supporting Data (Surveys, Environmental Scan, etc.):
2000-2008 Environmental Scan: (1) Retention and turnover rates for City employees were
11.20% in 2004 versus 13.86% in 2007; and (2) Average employee tenure for City employees
was 9.48 ears in 2004 and 8.95 ears in 2007.
Issue:
Shall the Mayor and City Commission approve the Ordinance to implement a Deferred
Retirement O tion Plan DROP for Members of the Miami Beach Em to ees' Retirement Plan.
Item Summa /Recommendation:
Second Reading Public Hearing
This item was heard on First Reading at the December 10, 2008 City Commission meeting and was
previously discussed at both the September 16, 2008 and May 27, 2008 Finance and Citywide
Projects Committee meetings.
The criteria proposed for City employees who are members of the Miami Beach Employees'
Retirement Plan (MBERP) to be eligible to enter a three (3) year DROP is as follows: (1) The eligible
employee must be vested in the MBERP; and (2) the eligible employee has attained the required
retirement age.
According to the City's actuary, implementing a DROP would likely save the City on the employer
annual required contribution. From an employee morale and succession planning perspective, a
DROP is likely to have a positive impact on the workforce, as this benefit is viewed positively by
employees and allows for transitions to take place, particularly for positions that may be hard to fill. In
weighing all the factors, the ability to retain valuable employees with vast institutional knowledge
coupled with the fact that there is a savings to the employer required contribution, establishing a
DROP appears to be beneficial to the City at this time, therefore, the Administration recommends a
DROP be established as proposed for all emplo ees who are members of the MBERP.
Adviso Board Recommendation:
N/A
Financial Information:
Source of Amount Account Approved
Funds: ~
2
3
4
OBPI Total
Financial Impact Summary: It is difficult to estimate the actual savings and/or costs to the
employer annual required contribution since it depends on the actual number of eligible employees
who enter the DROP. According to the analysis conducted by the City's Actuary, the first year savings
could be as much as $985,227 if 100% of the eligible employees enter the DROP to an actual cost to
the Cit of $32,352 if none of the eli ible em to ees enter the DROP.
City Clerk's Office Legislative Tracking:
~ Ramiro Inguanzo, Human Resources Director
Si n-Offs:
D artment Director Assistant City Manager City Manager
T:WGE DA~2009Wanuary 2 Regular\DROP dinance 2nd Reading Summary.doc
M I AM I B EAC H AGENDA ITEM J
DATE I'e2. "0
m MIAMIBEACH
City of Miami Beach, 1700 Convention Center Drive, Miami Beach, Florida 33139, www.miamibeachfl.gov
COMMISSION MEMORANDUM
TO: Mayor Matti Herrera Bower and Members of the Citty -Commission
FROM: Jorge M. Gonzalez, City Manager ~,~Cv~-~"- ~p?~
DATE: January 28, 2009 SECOND READING
PUBLIC HEARING
SUBJECT: AN ORDINANCE OF THE MAYOR AND CITY COMMISSION OF THE CITY
OF MIAMI BEACH, FLORIDA, IMPLEMENTING A DEFERRED
RETIREMENT OPTION PLAN FOR MEMBERS OF THE MIAMI BEACH
EMPLOYEES' RETIREMENT PLAN CREATED BY ORDINANCE 2006-3504,
AS SUBSEQUENTLY AMENDED; CREATING A NEW SECTION 2.26,
PROVIDING A DEFINITION OF DEFERRED RETIREMENT OPTION PLAN;
CREATING A NEW SECTION 5.13, ESTABLISHING THE DEFERRED
RETIREMENT OPTION PLAN AND SETTING FORTH THE FEATURES OF
THE PLAN; PROVIDING FOR SEVERABILITY; REPEALING ALL
ORDINANCES IN CONFLICT THEREWITH; AND PROVIDING AN
EFFECTIVE DATE.
ADMINISTRATION RECOMMENDATION
Adopt the proposed ordinance on Second Reading.
BACKGROUND
The issue of amending the current Miami Beach Employees' Retirement Plan ordinance to add a
Deferred Retirement Option Plan (DROP) was discussed on First Reading at the December 10,
2008 City Commission Meeting and was also previously discussed at both the September 16, 2008
and May 29, 2008 Finance and Citywide Projects Committee meetings.
A Deferred Retirement Option Plan (DROP) is an arrangement used in many public organizations
under which an employee who would otherwise be entitled to retire and receive benefits under an
employer's defined benefit (pension) retirement plan instead continues working for a fixed number of
years. However, instead of having the continued compensation and additional years of service taken
into account for purposes of the defined benefit plan formula, the employee has a sum of money
credited during each year of the continued employment (while in the DROP) to a separate account
under the employer's retirement plan. The account earns interest (either at a rate stated in the plan,
or based on the earnings of the trust underlying the retirement plan). When the employee eventually
leaves at the end of the DROP, the account is paid to the employee, in addition to whatever benefit
the employee has acquired under the defined benefit plan based on earlier years of service.
One of the major reasons that an employer would create a DROP is to retain valued employees who
are eligible to retire by providing an incentive to stay on for an additional period of time. DROP
plans are often quite popular with employees as they enable those employees who may have
"maxed out" on the benefit payable under a defined benefit plan to continue to accrue benefits. Even
for those who have not "maxed out", the rate of accrual is often more favorable than continued
accrual under the defined benefit arrangement.
DROP Ordinance, 2"d Reading
January 28, 2009 City Commission Meeting
Page 2 of 7
Members of the Miami Beach Fraternal Order of Police (FOP) and Miami Beach International
Association of Fire Fighters (IAFF) have been eligible to participate in a three (3) year DROP since
1998. Once a police and/or fire employee meets the eligibility criteria and enters into the DROP,
these employees continue to receive their full salary and do not lose any benefits, including, merit
(step) increases, incentive pays, longevity, possibility of promotions, accrual of sick, annual and all
other appropriate leave, etc. The pension payout for those employees (which starts once they enter
the DROP) for each of those three (3) years then goes into an account and that full amount is paid
out to the employee at the end of the three (3) years when the employee leaves the City. All other
City of Miami Beach employees, including all civilian classified employees (members of the
Communication Workers of America (CWA), American Federation of State, County and Municipal
Employees (AFSCME) and Government Supervisors of America (GSA) unions and those employees
in the "Others" group) and all unclassified (non-union) employees, are not currently eligible to
participate in a DROP.
At the May 29, 2008 Finance and Citywide Projects Committee meeting, the members of the
Committee discussed the issue of implementing a DROP for CWA employees and determined that
further analysis was needed. The Committee asked the Administration and the CWA to meet, along
with Commissioner Weithorn, to discuss and conduct this additional analysis so that the Finance and
Citywide Projects Committee could further consider the DROP implementation at a future committee
meeting. The meeting with Commissioner Weithorn and representatives from the Administration
and the CWA took place on June 10, 2008. As a result of this meeting, the Administration and the
CWA worked jointly with the Miami Beach Employees' Retirement Plan office to collect and analyze
data and information on employees who had retired or who could already retire.
At the September 16, 2008 Finance and Citywide Projects Committee meeting, the Committee
members were presented with the information and data collected regarding the members of the
Miami Beach Employees' Retirement Plan. This data revealed that there does not appear to be any
method to substantiate exactly when an employee will retire and for what reasons. There are some
employees who have reached retirement age and are already at the maximum accrual rate but have
not yet retired. Other employees retire once they reach the retirement age but have not reached
their maximum accrual rate. And still other employees have reached retirement age, have not
reached their maximum accrual rate and are still working. And finally, there are some employees
who have reached their maximum accrual rate but have not reached the retirement age, and are still
working. The Committee members also discussed what the possible expected additional annual
employer required contribution to the pension would be if this benefit was added for all employees.
The Committee members discussed the potential fiscal impact, as well as the other pros and cons of
implementing a DROP. From a fiscal perspective, at the time of the Committee meeting, the DROP
appeared to have a slight financial impact. From an employee morale perspective, the Committee
discussed that a DROP may have a positive impact on the workforce, as this benefit is often viewed
very positively by employees. From a succession planning perspective, the Committee discussed
that a DROP is helpful as it allows for transitions to take place, particularly for positions that may be
hard to fill. As a result, the Committee asked the Administration to secure an actual cost estimate
and actuarial valuation report from the City's actuary to determine the exact fiscal impact of adding a
DROP for all City employees. As the majority of the Committee members were in favor of
recommending the implementation of a DROP, it was suggested by some members of the
Committee that the Administration and the CWA meet to negotiate concessions the CWA would be
willing to make as a give back to the City in exchange for the implementation of the DROP. Based
on these discussions, a motion was made by Commissioner Weithorn and seconded by
Commissioner Gross to amend the Miami Beach Employees' Retirement Plan Ordinance to include
a Deferred Retirement Option Plan (DROP) for all City employees who are members of the Miami
Beach Employee Retirement Plan and to refer this item to the City Commission for discussion at the
next possible City Commission meeting.
DROP Ordinance, 2"d Reading
January 28, 2009 City Commission Meeting
Page 3 of 7
ANALYSIS
The criteria proposed for City employees who are members of the Miami Beach Employees'
Retirement Plan to be eligible to enter a three (3) year DROP is as follows:
• The eligible employee must be vested in the Miami Beach Employees' Retirement Plan
o All employees who are members of the City's pension plan are vested after five (5)
years of creditable service with the City.
• The eligible employee has attained the required retirement age
o Age 50 for those employees who started working with the City prior to the bifurcation
of the pension system in the early to middle 1990s which created two tiers of
benefits. The actual dates are as follows for each group of employees:
• CWA -February 21, 1994
• AFSCME -April 30, 1993
• GSA -August 1, 1993
• Unclassified -October 18, 1992
• Others -August 1, 1993
o Age 55 for those employees who started working with the City after the bifurcation
dates for each employee group.
Employees who enter the DROP would still earn their salary and would be eligible for all benefits
during the entire DROP period (although their pension benefit would be calculated and "frozen" at
the amount determined right before they enter the DROP). For example, for a classified employee
hired prior to the bifurcation date earning $50,000 who has reached a maximum accrual rate of 90%
and enters the DROP, the employee's pension benefit at that point would be $45,000 per year
(which is 90% of $50,000) for the rest of the employee's life. For as long as that employee is
working for the City and is in the DROP (but not to exceed three (3) years), the $45,000 is "deferred"
into an interest bearing investment account in the individual's name and that amount is paid out
when the employee leaves the DROP and no longer works for the City. During this DROP period,
the defined benefit plan 2.5% COLA that the employee would otherwise be entitled to as a retiree
would be deferred and the employee would not receive at all during the DROP period. Even though
no further contributions are made to the employee's pension, the employee, as long as they are in
the DROP, continues earning their full salary, is eligible for merit (step) increases, non-retiree COLA
increases (that all other employees would receive), overtime, and all other incentive pays they would
be eligible for under their respective collective bargaining agreement. In the example cited above,
even though that employee's pension benefit is "frozen" at $45,000, that same employee, after being
in the DROP for a maximum of three (3) years, assuming they receive a 4% merit adjustment each
year (if eligible and if not already at the maximum of the range for their position), and a 3% COLA
each year, would make $53,560 in year one (1) of the DROP; $57,373.47 in year two (2) of the
DROP; and $61,458.46 in year three (3) of the DROP. Again, no contribution to the pension is
made on the employee's behalf each of these three (3) years, so the pension benefit for this
employee is calculated, and frozen, at the employee's salary rate before the employee entered the
DROP.
The total employer required contribution paid by the City to the Miami Beach Employees' Retirement
Plan for FY 2007-2008 was approximately $13.9 million. This represented 24.24% of the covered
payroll for all the participants in the pension plan (total payroll for the past fiscal year for employee
members of the Miami Beach Employee Retirement Plan was approximately $57.3 million). The
employer required contribution for the FY 2008-2009 is approximately $12.9 million. This represents
21.57% of the covered payroll for all participants in the Miami Beach Employees' Retirement Plan
(total payroll for this fiscal year for employee members of the pension plan is expected to be
approximately $59.6 million).
DROP Ordinance, 2"d Reading
January 28, 2009 City Commission Meeting
Page 4 of 7
The City's actuary, Gabriel Roeder Smith & Company (GRS), provided a supplemental actuarial
valuation report to the City on October 30, 2008 which details the financial impact of adding a three
(3) year DROP program. A copy of this report is attached (Exhibit A). GRS' analysis included the
following four (4) scenarios:
1. Members who reach benefit accrual cap in future are eligible to enter DROP
regardless of age.
2. Members who reach benefit accrual cap in future are eligible to enter DROP
but not earlier than age 50.
3. Members who reach benefit accrual cap in future are eligible to enter DROP
but not earlier than age 52.
4. Members who reach benefit accrual cap in future are eligible to enter DROP
but not earlier than age 55.
Under each of those scenarios referenced above, GRS made projections of the employer annual
required contribution (ARC) using each of the following assumptions:
• 100% of all members of the Miami Beach Employees' Retirement Plan
eligible for the DROP as of October 1, 2007 elect to enter immediately
• 50% of all members of the Miami Beach Employees' Retirement Plan
eligible for the DROP as of October 1, 2007 elect to enter immediately
• 33% of all members of the Miami Beach Employees' Retirement Plan
eligible for the DROP as of October 1, 2007 elect to enter immediately
• 25% of all members of the Miami Beach Employees' Retirement Plan
eligible for the DROP as of October 1, 2007 elect to enter immediately
• 0% of all members of the Miami Beach Employees' Retirement Plan
eligible for the DROP as of October 1, 2007 elect not to enter immediately
Representatives from the Administration and the CWA had a discussion with Steve Palmquist, the
Senior Consultant and Actuary from GRS who conducted the analysis for the City, on October 31,
2008 to review the data provided by GRS. After analyzing all the scenarios, the Administration and
the CWA agreed that it was in the City's best interest, from a cost savings perspective, to only
explore scenario number four (4) which assumes that members who reach the benefit accrual cap in
the future are eligible to enter DROP but not earlier than age 55 (no earlier than normal retirement
age) for those employees who can retire at age 55. The actuarial assumption of this scenario also
takes into account all those employees who are eligible to retire at age 50. The table below is a
summary of GRS' Actuarial Study for the scenario described above for the first year after the
implementation of a DROP:
ARC as a
Employer Annual Percent of (Savings)/
Required Non-DROP Non-DROP Increases
Contribution ARC) Pa roll Pa roll to the ARC
Baseline -October 1, 2007 Valuation $12,863,823 21.57% $59,632,425
100% of Members enter into DROP $11,878,596 25.03% $47,462,111 $985,227
50% of Members enter into DROP $12,387,388 23.13% $53,547,268 $476,435
33% of Members enter into DROP $12,560,375 22.58% $55,616,221 303,448
25% of Members enter into DROP $12,641,781 22.34% $56,589,846 222,042
0% of Members enter into DROP $12,896,175 21.63% $59,632,425 $32,352
According to GRS' analysis, if a DROP was implemented with the assumption that 33% of currently
eligible participants entered the DROP upon implementation, the savings to the City to the annual
employer required contribution in the first year would be $303,448. As summarized in the chart on
DROP Ordinance, 2"d Reading
January 28, 2009 City Commission Meeting
Page 5 of 7
page four (4) of this memorandum, the savings are greater if a greater percentage of employees
enter the DROP and the savings are lower if a smaller percentage of employees enter the DROP
(and may even result in a cost to the City).
The table below is a summary of GRS' Actuarial Study for the scenario described above itemized for
the first six (6) years after the implementation of the DROP (assuming that 33% of currently eligible
participants enter the DROP upon implementation):
Employer Annual Required Employer Annual Required Savings to the Employer
Valuation Date Contribution (ARC) - Contribution (ARC) - Annual Required
With No DROP Assuming 33% Enter DROP Contribution (ARC)
October 1, 2007 $12,863,823 $12,560,375 $303,448
October 1, 2008 $12,227,010 $11,846,960 $380,050
October 1, 2009 $9,584,713 $9,200,707 $384,006
October 1, 2010 $10,812,541 $10,394,670 $417,871
October 1, 2011 $13,290,241 $13,147,228 $143,013
October 1, 2012 $15,282,620 $15,100,833 $181,787
To summarize the chart above, over a six (6) year period, the anticipated savings to the City,
assuming that 33% of eligible participants enter the DROP, is approximately $1.8 million. The
savings are greater if a greater percentage of employees enter the DROP and the savings are lower
if a smaller percentage of employees enter the DROP.
There are two (2) reasons the City saves on the annual employer required contribution (ARC). The
first reason is that participants who enter the DROP do not receive the annual two-and-one-half
percent (2.5%) Cost of Living Adjustment (COLA) they would be entitled to as retirees (this COLA is
eliminated for the entire time period the participant is in the DROP). The second reason is that there
is a decrease in the actual contribution the City makes for each employee who is participating in the
DROP. The City's annual required contribution (ARC) to the pension is divided into two (2) parts,
the Unfunded Actuarial Liability and the Normal Cost. If a DROP were in place, the City's
contribution to the Normal Cost for each employee in the DROP would no longer be required;
therefore the City would save on the Normal Cost component of the contribution they would
otherwise be making for these employees.
The analysis conducted in August 2007 for the CWA by Gabriel, Roeder, Smith & Company (GRS)
estimated that if the City implemented a DROP for only the CWA employees, the employer annual
required contribution to the pension would increase by an additional $20,308 per year. The more
recent analysis conducted by GRS in October 2008 estimates that if the City implemented a DROP
for all employees, there is actually a savings to the employer annual required contribution. The
savings are greater if a greater percentage of employees enter the DROP and the savings are lower
if a smaller percentage of employees enter the DROP. According to GRS, there were differences in
the assumptions and data used for the study conducted in August 2007 and the study conducted in
October 2008. The methodology used to account for the group of employees (only CWA versus all
City employees) who are currently eligible for the DROP was the main difference. The original CWA
studies that were prepared in August 2007 took into account an increased rate of retirement (on an
individual basis) for participants who were eligible to enter the DROP immediately as well as future
participants who enter the DROP. For the recent DROP study conducted in October 2008, GRS
used a similar approach for the future participants who enter the DROP. Since all active participants
are now included in the analysis, there is a much larger group of participants who are eligible to
DROP Ordinance, 2"d Reading
January 28, 2009 City Commission Meeting
Page 6 of 7
enter the DROP immediately, therefore the savings to the employer annual required contribution are
also greater.
EXISTING ORDINANCE
The existing ordinance, Ordinance No. 2006-3504, was last amended on March 8, 2006. The
ordinance merged the former retirement system for general employees of the City with the former
retirement system for unclassified employees of the City and created the Miami Beach Employees'
Retirement Plan, which is the City's current pension plan.
PROPOSED ORDINANCE AMENDMENT
The amendment to Ordinance No. 2006-3504 would implement a Deferred Retirement Option Plan
(DROP) for members of the Miami Beach Employees' Retirement Plan and would create new
sections of the ordinance which defines, establishes, and sets forth the features of the DROP.
FISCAL IMPACT SUMMARY
It is difficult to estimate the actual savings, and/or costs, to the employer annual required
contribution since it depends on the actual number of eligible employees who enter the DROP.
According to the analysis conducted by Roeder, Smith & Company (GRS), the savings in the first
year after implementing the DROP could be as much as $985,227 if 100% of the eligible employees
elect to enter the DROP to an actual cost to the City of $32,352 if none of the eligible employees
elect to enter the DROP. Over a six (6) year period, the anticipated savings to the City, assuming
that 33% of eligible participants enter the DROP, is approximately $1.8 million. Again, the actual
savings are greater if a greater percentage of employees enter the DROP and the savings are lower
if a smaller percentage of employees enter the DROP.
CITY COMMISSION ACTION
At the December 10, 2008 City Commission meeting a motion was made by Commissioner
Weithorn and seconded by Commissioner Libbin to approve the ordinance on First Reading. The
motion passed by a vote of (7-0). The item is being presented for Second Reading at a Public
Hearing scheduled for January 28, 2009.
CONCLUSION
As previously discussed, it is very difficult to determine exactly if any City employee would retire
when they reach retirement age and/or if any City employee would enter into a DROP if they were
eligible, because the decision to do either is so personal and depends on a number of factors that
vary from employee to employee.
From a fiscal perspective, according to data provided by the City's actuary, implementing a DROP
would most likely save the City on the employer annual required contribution. From an employee
morale perspective, a DROP is likely to have a positive impact on the workforce, as this benefit is
often viewed very positively by employees. From a succession planning perspective, a DROP is
very helpful as it allows for smoother transitions to take place for those positions.
In weighing all the factors, the ability to retain valuable employees with vast institutional knowledge
coupled with the fact that there is a potential for savings to the employer required contribution,
establishing a DROP appears to be beneficial to the City at this time. While we can not pick and
choose who is and is not eligible, the benefit the City derives from retaining these valuable
employees greatly outweighs any adverse results of implementing the DROP. As a result, the
DROP Ordinance, 2"d Reading
January 28, 2009 City Commission Meeting
Page 7 of 7
Administration recommends a DROP be established as proposed for all employees who are
members of the Miami Beach Employees' Retirement Plan.
On January 5, 2009, Commissioner Tobin requested additional information regarding this item.
Attached is the January 14, 2009 Memorandum with the responses to the questions posed.
The Administration recommends that the Mayor and City Commission hereby approve, on second
reading an amendment to the current Miami Beach Employees' Retirement Plan ordinance to add a
Deferred Retirement Option Plan.
JMG/ri
T:\AGENDA\2009Wanuary 28\Regular\DROP Ordinance 2nd Reading Memo.doc
m MIAMIBEACH
office of tl,e cry Manager MEMORANDUM
TO: Commissioner Edward L. Tobin
FROM: Jorge M. Gonzalez, City Manager
DATE: January 14, 2009
SUBJECT: Recent Questions Regarding the DROP
This memorandum is in response to your recent a-mail regarding questions about the Deferred
Retirement Option Plan (DROP) following the discussion by the City Commission at the
December 10, 2008 City Commission meeting.
Since you posed a number of questions, I am listing each of those questions below with the
response following the question:
Question #1
"You are recommending that we give the CWA union the DROP program for which they have
been lobbying. This pension benefit is something that the CWA has wanted for almost a decade.
Why are we giving them this coveted perk prior to negotiating their new contract which is up for
renewal and negotiation. in three or four months?"
Response to Question #1
The Communications Workers of America (CWA) sent a memorandum to the Mayor and City
Commissioners in early 2008 asking the City Commission to explore the possibility of amending
the current CWA collective bargaining agreement to a. include a DROP. The Administration
responded with a Letter to the Commission (LTC) on February 28, 2008 recommending to the
Commission that the CWA request to reopen the contract and negotiate a DROP benefit not be
granted.
Notwithstanding, this item was however referred to the Finance and Citywide Projects
Committee and was first discussed by the Committee at the May 29, 2008 Finance and Citywide
Projects Committee meeting. At this meeting, the Administration again recommended the CWA
request to reopen the contract and negotiate a DROP not be granted. Notwithstanding again,
the Committee directed the Administration to meet with the CWA, along with Commissioner
Weithorn, to further discuss and conduct additional analysis so that the Finance and Citywide
Projects Committee could consider the DROP implementation at a future Committee meeting.
The meeting with Commissioner Weithorn, representatives from the Administration and from the
CWA took place on June 10, 2008. As a result of this meeting, the Administration and CWA
worked jointly with staff from the Miami Beach Employees' Retirement Plan to collect and
analyze additional pension related data.
This item was again discussed at the September 16, 2008 Finance and Citywide Projects
Committee. The members of the committee discussed the item thoroughly and even though
there appeared at the time (according to the data available at that time) that there would be a
slight financial impact in implementing a DROP, the benefits seemed to outweigh the cost and
Memorandum Regarding DROP Questions
Page 2 of 6
the Committee asked the Administration to secure an actual cost estimate and actuarial
valuation report from the City's actuary (Gabriel Roeder Smith and Company) to determine the
exact fiscal impact of adding a DROP for all City employees.
The City's actuary provided this actuarial valuation report to the City on October 30, 2008 which
details the financial impact of adding a three (3) year DROP program. The valuation report, as
well as an analysis by City staff, was provided with the December 10, 2008 City Commission
agenda item. As a reminder, the City's actuary estimated that over a six (6) year period, the
anticipated savings to the City (again, according to the City's actuary), assuming that 33% of
eligible participants enter the DROP, would be approximately $1.8 million. The savings are
greater if a greater percentage of employees enter the DROP and the savings are lower if a
smaller percentage of employees enter the DROP.
Question #2
"When is the CWA contract expiring?"
Response to Question #2
The Contract period for the current CWA contract is October 1, 2006 through September 30,
2009.
Question #3
"Is there a traditional/customary/contractual time period when the contract gets negotiated?"
Response to Question #3
There is no standard or official timeframe as to when to begin to negotiate a union contract nor
when agreement is reached, but ideally it should be priorto the expiration of the current contract.
Some union contracts, like the current contracts with the FOP, AFSCME and GSA, were
negotiated and ratified prior to the expiration of the contract period, while others, like the current
contracts with the IAFF and CWA, were not ratified until after the contracts expired.
With the CWA in particular, the negotiations traditionally have been protracted and have taken
anywhere between 24 to 36 months to negotiate and ratify a contract. The 2003-2006 contract
negotiations lasted two-and-one-half (2.5) years and included a full impasse proceeding that
resulted in nine (9) days of Special Magistrate impasse hearings and three (3) days of City
Commission meetings and deliberations. The ratification occurred on December 7, 2005, which
means that there were less than ten (10) months remaining in that Contract that was just
approved. The 2006-2009 Contract was approved on September 5, 2007; almost twelve (12)
months into the bargaining period.
Question #4
"I understand that the Administration has in the past recommended against the DROP for this
group of employees. Why?"
Response to Question #4
There are several pros and cons to having a DROP in place. One of the arguments in not
implementing a DROP is obviously the possible cost and/or fiscal impact a DROP may have to
an organization. Based on data available previously and based on the DROP provisions
Vb'e are commined to providing excellent public sen~ice and safett~ to alt who live, work, ono piav in our vibron'. tropicol, histo~fc community.
Memorandum Regarding DROP Questions
Page 3 of 6
requested, there did seem to be a cost to the City, and given the budget cuts the City has had to
make in the past few years, the Administration was looking for cost savings, not implementing
programs that would have a cost. Based on the recent actuarial study conducted and based on
the revised provisions of the proposed DROP however, the actuary's estimates indicate that
there would most likely be a savings to the City employer required contribution if a DROP were
implemented per the actuary's estimates.
Another reason that a DROP is not seen as favorable is that having a DROP in place may
actually provide an incentive to some employees whom the organization would benefit if they
separated from the City when they reach retirement age to stay for an additional three (3) years.
Alternatively, the ability to retain valuable employees with vast institutional knowledge may
outweigh the perceived adverse effects.
From an employee morale perspective, a DROP is likely to have a positive impact on the
workforce and from a succession planning perspective, a DROP is very helpful as it allows for
smoother transitions to take place for those positions.
Question #5
"At the Dec. 10, 2008 commission meeting someone mentioned a potential savings of $1.8
million to the city. What is your understanding of the savings, and over what time period?"
Response to Question #5
The $1.8 million anticipated savings to the City is based on the actuarial study for the first six (6)
years after the implementation of the DROP, assuming that at least 33% of currently eligible
participants enter the DROP upon implementation. The savings are actually greater if a greater
percentage of employees enter the DROP and the savings are lower if a smaller percentage of
employees enter the DROP. The chart below summarizes the savings (indicated in the last
column) to the Employer Annual Required Contribution (ARC). The Employer Annual Required
Contribution is the annual amount the City is required to contribute each fiscal year to fund the
retirement benefits of all employees in the Miami Beach Employees' Retirement Plan.
Employer Annual Required Employer Annual Required Savings to the Employer
Valuation Date Contribution (ARC) - Contribution (ARC) - Annual Required
With No DROP Assumin 33% Enter DROP Contribution ARC
October 1, 2007 $12,863,823 $12,560,375 $303,448
October 1, 2008 $12,227,010 $11,846,960 $380,050
October 1, 2009 $9,584,713 $9,200,707 $384,006
October 1, 2010 $10,812,541 $10,394,670 $417,871
October 1, 2011 $13,290,241 $13,147,228 $143,013
October 1, 2012 $15,282,620 $15,100,833 $181,787
The total anticipated savings over a six (6) year period actually equals to $1,810,175 million.
1/Ve are committed to providing excellent public service and sofety io all vrho live, wor,`,, and play ;n au: vibron. ;ropico~, historic community.
Memorandum Regarding DROP Questions
Page 4 of 6
Question #6
"The actuary who calculated the numbers associated with the DROP which the CWA has fought
so hard to get was hired by the CWA. Shouldn't we have an independent expert of our own give
us an opinion about the potential downside to the city?"
Response to Question #6
Gabriel Roeder Smith & Company (GRS) is the actuary used by the Miami Beach Employees'
Retirement Plan. The CWA hired GRS because they are the City's actuary and they are the
consultants and actuaries who are most familiar with our retirement plan.
Question #7
"We spoke in our retreat back in May 2008 about switching our police and fire pension system to
the State of Florida retirement system? Who is working on that conversion?"
Response to Question #7
In addition to myself, the Director and staff from the Office of Budget and Performance
Improvement (OBPI) and the Director and staff from the Human Resources Department are
working with the City's pension attorneys, actuary, and with representatives from the Florida
Retirement System (FRS) on exploring and analyzing the possibilities that might be available
with FRS. We are also analyzing pension costs from the past ten (10) to twenty (20) years
versus projected costs on a going forward basis so that we can compare against our own plan
performance and employer costs. I intend to discuss and share this data when fully analyzed
with the Commission at an upcoming Commission Workshop in the near future.
Question #8
"Can you provide a progress report with the pros and cons of switching to the State of Florida
retirement system? Please include in the progress report whether or not all Miami Beach
pension eligible employees will be eligible for the conversion?"
Response to Question #8
As mentioned in the response to question #7, staff is still analyzing the data and I will provide an
update as soon as we have information to report.
Question #9
"What fiscal impact if any will there be to the city when converting over to the State of Florida
retirement system?"
Response to Question #9
The data is still being analyzed.
Question #10
"Will this CWA DROP Program add any additional fiscal impact to the City?"
Vb'e are committed to providing excellent public service ane.' sofety ro ai~ who live, wor,:, and piav in ou~ vibra~', ;repicol, historic community.
Memorandum Regarding DROP Questions
Page 5 of 6
Response to Question #10
As proposed, all City employees (not just CWA employees) will be eligible to participate in the
DROP once they reach normal retirement age. As mentioned in the response to question #5,
according to data provided by the City's actuary, implementing a DROP would most likely save
the City on the employer annual required contribution and likely not have any additional fiscal
impact to the City.
It is difficult to estimate the actual savings, and/or costs, to the employer annual required
contribution since it depends on the actual number of eligible employees who enter the DROP.
According to the analysis conducted by Roeder, Smith & Company (GRS), the savings in the
first year after implementing the DROP could be as much as $985,227 if 100% of the eligible
employees elect to enter the DROP to an actual cost to the City of $32,352 if none of the eligible
employees elect to enter the DROP. Over a six (8) year period, the anticipated savings to the
City, assuming that 33% of eligible participants enter the DROP, is approximately $1.8 million.
Again, the actual savings are greater if a greater percentage of employees enter the DROP and
the savings are lower if a smaller percentage of employees enter the DROP.
Question #11
"One claim the experts made in the December 10, 2008 Commission agenda summarythat I did
not understand and would like clarification on is the claim that this DROP saves the City its 2.5%
COLA contribution into the pension plan. It seems that is only half the story because we are still
obliged to pay 3% COLA to active employees. In light of this, how does the DROP save money?"
Response to Question #11
According to the City's actuary, if a DROP were implemented, the City would likely see a savings
not because of the retiree Cost of Living Adjustment (COLA) but because of the savings to the
employer annual required contribution (as described in the response to question #5).
There actually is a savings though to the COLA paid by the City if a DROP were in place. While
the employee is in the DROP period (could be up to three (3) years), the defined benefit plan
two-and-one-half (2.5) percent COLA (the COLA that all retirees receive which the employee
would otherwise be entitled to as a retiree) would be deferred and the employee would not
receive this two-and-one-half (2.5) percent COLA at all while they are in the DROP. If the
employee actually retired and separated from the City, that employee would be eligible to
receive the two-and-one-half (2.5) percent COLA each year. The following example might help
to clarify the confusion regarding the retiree COLA versus the COLA active employees receive:
If employee A retires and separates from the City, employee A would receive his pension benefit
and is entitled to a retiree two-and-one-half (2.5) percent COLA each year. Assuming the City
replaces employee A with employee B, employee B is now eligible to receive the same COLA all
other active employees receive. Although the City Commission has not approved any COLA for
the 2009-2010 Fiscal Year, assuming that the City Commission did hypothetically approve a
three (3) percent COLA adjustment for active employees, then the City is paying the two-and-
one-half (2.5) percent COLA to the retiree (employee A) as well as the three (3) percent COLA
to the active employee (employee B). If there were a DROP and employee A entered the
DROP, employee A would forfeit the retiree COLA and instead receive the COLA all other active
employees receive. So there actually is a savings to the City with a DROP because the City is
only paying one (1) COLA (to employee A if a DROP were in place) versus two (2) COLAs -one
(1) for employee A (who is retired) and another one (1) for employee B (who is an active
employee).
VVe ore committed rc providinG excellent public service and soiei~~ to ai wflo live, wore, and p,~ov in our vibron:, tropico, nisroric cernmuni~y.
Memorandum Regarding DROP Questions
Page 6 of 6
Conclusion
I would be happy to meet with you to discuss any additional questions you may have or clarify
the answers to any of the responses to the questions you have already raised. Please feel free
to let me know if you would like to meet to discuss further.
cc: Mayor Matti Herrera Bower
Vice-Mayor Jonah Wolfson
Commissioner Victor M. Diaz, Jr.
Commissioner Saul Gross
Commissioner Jerry Libbin
Commissioner Deede Weithorn
JMG/ri
F:\cmgr\$ALL\JORGEGON\MEMOS\Response to DROP Questions.doc
1/Ve are cornmitted to providing excellent public service and soieA~ to all wha live, wain, and play iri ouf vibron tropical. historic camrnunity.
~x~~~iT ~
Gabriel Roeder Smith & Company (hie I:asr Broward Blvd. 954.527.1616 pliune
RS Consulcanis 8: Actuaries Suite SUS 954,52.S.OU83 fax
!'t. l.audcrdalc, PL..3:i.i01-~i872 www.~abriclrordrr.cnm
October 30, 2008 .
Mr. Ramiro Inguanzo
Human Resource Director
City of Miami Beach
1700 Convention Center Drive
Miami Beach, Florida 33139
Re: Supplemental Actuarial Valuation Report for Proposed Benefit Changes to the Miami Beach
Employees' Rairemcnt Plan ,
Dear Ramiro:
As requested by the City Manager, enclosed is our revised Supplemental Actuarial Valuation Report to
measure the financial impact of adding athree-year DROP program with the COLA delayed during DROP
participation. The DROP program is available to members who have reached normal retu'ement eligibility
or the applicable benefit accrual cap.
We have updated the study provided on October 14, 2008 to allow members who will reach the applicable
benefit accrual cap in the firture to be eligible for tbe DROP. Results are included under four possible
conditions for rnealbers who reach the cap in the future: DROP entry is permitted regardless of age and
DROP entry is not permitted before ages 50, 52 and 55.
. We have shown the impact of each of the above changes under five scenarios, assuming 100%, 50%, 33%,
25% and 0% of members eligible for the DROP as of October 1, 2007 elect to enter immediately.
We have also included afive-year projection of the required contribution under curnnt Ptan Provisions and
each of the scenarios descrbibed above. When performing these projections, we assumed that there would be
no gains and losses. In each scenario, we assumed that the members entering the DROP on October 1, 2007
would rernain in the DROP for three years and that they would be replaced with new hires after their three-
. year DROP participation.
If a decision is made to adopt the new benefits, please let us know so that we may prepare an actuarial
impact statement.
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.
The calculations are based upon assumptions regarding future events, which may or may not materialize.
They are also based upon present and proposed plan provisions that are outlined in the report. If you
have reason to believe that the assumptions that were used are unreasonable, that the plan provisions are
inwrrectly 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 this report
prior to relying on information in the report.
EXHIBIT
A
473
Mr. Ramiro Inguanzo
October 30, 2008
Page 2
if you have reason to believe that the information provided in this report is inaccurate, or is in any way
incomplete, or if you need further information in order to make an informed decision on the subject
matter of this report, please contact the author of the report prior to malting such decision.
In the event that more than one plan change is being considered, it is very important to remember that the
results of separate actuarial valuations cannot generally be added together to produce a correct estimate
of the combined effect of all of the changes. The total can be considerably greater than the sum of the
parts due to the interaction of various plan provisions with each other, and with the assumptions that
must be used.
We welcome your questions and comments.
Sincerely yours,
~-w ~ '
~~-'~"`~
J. Stephen Palmquist, ASA
Senior Consuitan# & Actuary
JSP/ta
Enclosures
Gabriel Raeder Smith & Company
474
SUPPLEMENTAL ACTUARIAL VALUATION REPORT
Plan
City of Miami Beach Employees' Retirement Plan
Valuation Date
October 1, 2007
Date of Report
October 30, 2008
Report Requested by
City of Miami Beach
Prepared by
3. Stephen Pahmquist
Group Valued
All active and inactive members.
plan provisions Being Considered for Change
Present Plan Provisions Before Chance
There is no DROP program.
Proposed Plan Changes
Add athree-year DROP program for members who have reached normal retirement eligibility or
the applicable benefit accrual cap. The COLA is delayed during DROP participation. Members
who will reach the applicable benefit aoaual cap in the future are eligible for the DROP. Results
are included under four possible conditions for members who reach the cap in the future: DROP
entry is permitted regardless of age and DROP entry is not permitted before ages 50, 52 and 55.
Participants Affected
The change would apply to active members as of the date of the amending ordinance-
Actuarial Assumptions and Methods
Same as October 1, 2007 Revised Actuarial Valuation Report with the following exceptions:
We have shows results under five scenarios, assuming that 100%, 50%, 33%, 25% and 0% of
active members who have reached nonmal retirement eligtbility or the applicable benefit accrual
cap as of October 1, 2007 elect to enter the DROP immediately. We have added 10% to the
retirement rates in the first year of normal retirement eligibility. Also, members who will reach
the benefit accrual cap in the future before their normal retirement age are assumed to enter the
DROP immediately upon reaching DROP eligibility.
475
Some of the key assumptions/methods are:
Investment return - 8.65% per year
Salaryincrease - 6% per year
Cost Method -Entry Age Normal Cost Method
Amortization Period for Any Increase in Actuarial Accrued Liability
30 years.
Summary of Data Used in Report
Same as data used in October 1, 2007 Revised Actuarial Valuation Report but assuming that
100%, 50%, 33%, 25% and 0% of active members who have reached normal retirement
eligibility or the applicable benefit accrual cap as of October 1, 2007 elect to eater the DROP
immediately.
Actuarial Impact of Proposal(s)
See attached pages}.
Special Risks Involved With the Proposal That the Plan Has Not Been Exposed to Previously
None
Qther Cost Considerations
The pension fund has suffered significant investment losses since September 30, 2007. The
required contributions to the System will increase in the '09-'10 fiscal year whether or not the
proposed changes are made.
Possible Conflicts With IRS Qualification Rules
None
As indicated below, the undersigned are Members of the American Academy of Actuaries (MAAA) and
meet the Qualification Standards of the Academy of Actuaries to render the actuarial opinion herein.
By ~-~1~~~e~ia.
By
J. S en pahnquist, AS MAAA, FCA Melissa R Moslcovitz, FCA
Enrolled Actuary No. 08-1560 ~ Enrolled Actuary No. 08-6467
Senior Consultant & Actuary Consultant
476
City of Miami Beach Employees' Retirement Plaa
Summary of Actuarial Study
3-Year DROP with Delayed COLA
Members who reach beneft accrual cap in future are eligible to enter DROP (regardless of age)
Chan from Baseline
Annual Required ARC as °Ib of Non-DROP % of Non-DROP Payroll % of Non-DROP Payroll
Contribution ARC) Non-DROP Pa 11 Pa li ARC aflrr Plan Chan before Plan Chan e
Baseline -October 1 2007 Valuation S 12,863 823 2I.57 % $ 59,632,425
3-Year DROP with Delayed COLA 12,615,787 26.58 47,462,111 (248,03b) 5.01 % (0.42)
assuming 100% of members eligible on l0/1/07
enter DROP
3-Year DROP with Delayed COLA 13,124,578 24.51 53,54?,268 260,755 2.94 0•~
assuming50%ofinembers eligible on 10/1/07
enter DROP
~ 3-Year DROP with Delayed COLA 13,297,566 23.91 55,6] 6,221 433,743 2.34 0•'73
y assuming 33% of
members eligible on 10/1/07
enter DROP
3-Year DROP with Delayed COLA 13,378,972 23.64 56,589,846 515,149 2.07 0.86
asswmirrg 25%of members eligible on 10/1/07
enter DROP
3-Year DROP wiW Delayed COLA 13,633,366 22.86 59,632,425 7b9,543 1.29 1.29
assuming 0%of
members eltglMe on 10/1/!17
enter DROP
The assumptions, methods, and plan provisions used for these calculations are the same as those usod in the 10?1/2007 Revised Actuarial Valuation, including an 8.65% interest
rate, with the exception that we have added 10°/. to the retirement rates in the fast year of nomal retirement eligibility. Also, members who will reach the benefit accrual cap in
the future before their normal retirement age are assumed fA enter the DROP irmnediately upon reaching DROP eligibility.
According to state rules, the above cmcsts (or savings) are funded in the fiscal year following the effecxive date of the amending ordinance.
City of Miami Beuh Employee' Retirement Plan
Sammary of Actaarlal Stady
3-Year DROP with Delayed COLA.
Member: who reach benefit ucrual csp lu Eaters are eligible to enter DROP bat not earlier than age 50
Chan from Baseline
Annual Required ARC as °i6 of Non-DROP % of Non-DROP Payroll % of Non-DROP Payroll
Contribution ARC Non-DROP Pa Il P oll ARC after Plan Ch a before Plan Chan e
Baseline -October 1, 2007 Valuation S 12,$63,823 21.57 % S 59 632,425
3-Year DROP with Delayed COLA 12,218,821 25.74 47,462,111 (645,002) 4.17 % (1.08)
assuming 1003a of
members eligible on 1 D/I/07
enter DROP
3-Year DROP with Delayed COLA 12,727,613 23.77 53,547,268 (136,210) 2.20 (0.23)
assuming 5090 of
members eligible on 10/1/07
enter DROP
y 3 Peat DROP with Delayed COLA 12,900,600 23.20 55,616,221 36,777 1.63 0.06
~ assuming 33%of members eligible on 10/1/07
enter DROP
3-Year DROP with Delayed COLA 12,982,006 22.94 56,589,846 118,183 1.37 0.20
assuming 2530 of
members eligible on IO/1107
enter DROP
3-Year DROP with Delayed COLA 13,236,400 22.20 59,632,423 372,577 0.63 0.63
asswning 0%of members eligible on 10/1/a7
enter DROP
The assumptions, methods, and plan provisions used for these calculations are the same as those used in the 10/1/2007 Revised Actuarial Valuation, including an 8.65% interest
rate, with the exception that we have added 10% to the retirement rates in the first year of normal retirement eligibility. Also, members who will reach the benefit accnuil cap in
the future before their normal rctirer~nt age are assumod to enter the DROP immediately upon reaching DROP eligibility.
According to state rules, the above costs (or savings) are funded in the fiscal year following tho effective date of the amending ordinance.
City of Miami Beach Employees' Retirement Phtn
Summary of Actuarial Study
3-Year DROP wttb Delayed COLA
Members who reach benefit accraal cap in Enters are eligible to enter DROP but not earlier than age 52
Chan from Baseline
Annual Required ARC as °~6 of Non-DROP % of Non-DROP Payroll 9~0 of Non-DROP Payroll
Contribution ARC Non-DROP Pa ll Pa oil ARC after Plan Chan a before Plan Chan e
Baseline -October 1 2007 Valuation $ 12,863 823 21.57 % $ 59,632,425
3-YearDROP with Delayed COLA 12,142,589 25.58 47,462,111 (721,234) 4.01 9/0 (1.21)
assuming 1009'0 of
members eligible on 10/1/07
enter DROP
3-Year DROP with Delayal COLA 12,651,381 23.63 53,547,268 (212,442) 2.06 (0.36)
assuming SO% of members eligible on 10/!/07
enter DROP
3-Year DROP with Delayed COLA 12,824,368 23.06 55,616,221 (39,455) 1.49 (0.07)
assuming33°/. ofinembers eligible on 10/1/07
enter DROP
3-Year DROP with Dolayod COLA 12,905,774 22.81 56,589,846 41,951 1.24 0.07
assumi~ 2S% of members eligible on I D/1/07
enter DROP
3-Year DROP with Delayed COLA 13,160,168 22.07 59,632,425 296,345 0.50 0.50
assuming 0'~ of members eligible on 1011 /07
enter DROP
The assunsptions, methods, and plan provisions used for these calculations are the same as those used in the 10/1/2007 Revised Actuarial Valuation, including an 8.65% interest
rate, with the exception that we have added 10% to the retirement rtes in the first year of normal retirement eligibility. Also, members who will reach the benefit accrual cap in
the future before their normal retirement age are assumed to enter the DROP immediately upon reaching DROP eligibility.
According to state rubs, the above costs (or savings) are fimded in the fiscal year following the effa;tive date of the amending ordinance. .
Clty of Miami Beach Employees' Retirement Plan
Summary of Actwrial 3tady
3-Year DROP with Delayed COI.A~.
Members who reach benefit accrvai cap in Estate are eligible to enter DROP but not earlier than age 35
Chan c from Baseline
Annual Requsred ARC as % of Non-DROP % of Non-DROP Payroll % of Non-DROP Payroll
Contribution AR Non~TtOP Pa fl Pa oll ARC after Plan Chan a 'before Plan Chan e
Baseline -October 1, 2007 Valuation $ 12,863,823 21.57 % S 59 632,425
3-Year DROP with Delayed COLA 11,878,596 25.03 47,462,111 (985,227) 3.46 % (1.65)
assuming 100% of members eligible on 10/1/07
enter DROP
3-Year DROP with Delayed COLA 12,387,388 23.13 53,547,268 (476.435) 1.56 (0.80}
assuming 50% of
members eligible on 10/1/07
enter DROP .
.A
00 3-Year DROP with Delayed COLA 12,Sb0,375 22.58 55,616,221 {303,448) l .01 (0.5
0
assuming 33% ojmembers eligible on 10/1/07
enter DROP
3-Year DROP with Delayed COLA 12,641,781 22.34 56,584,846 (222,042) 0.77 (0.37)
~ assianing 2S% of
members eligible on 1 Q/1/07
enter DROP
3-Year DROP with Delayed COLA 12,846,175 21.63 59,b32,425 32,352 0.06 0•~
assuming 0%oJmembers eligible on 10/1/07
enter DROP
The assumptions, methods, and plan provisions used for these calculations are the same as those used in the 10/1/2007 Revised Actuarial Valuation, including an 8.65% interest
rate, with the exception that we have added 10% to the retirement rates in the first year of normal retiraytait eligibility. Also, members who will reach the benefit accrual cap in
the futum before their normal retirement age are assumed to enter the DROP immediately upon reaching DROP eligibility.
According to state roles, the above costs (or savings) are funded in the fiscal year following the effective daft of the amending ordinance.
Projection of Required Contribution
Members who reach benefit accrual cap in future are eligible to enter DROP (regardless of age)
na ' - ' 1
Annual Required Conmbution
Cost/(Saviiogs)uuder
B~~ Scenario #1 Scenario #1
of Pay % of Pay
after Plan before Plan
Valuation Chan e
Date Dollar Amount % of Pay Dollar Amount % of Pay Dollar Amount C~augo g
10/1/2007 $ ]2,863,823 21.57 % $ 12,615,787 2b.58 % $ (248,036) 5.01 % (0.42}
10!1/2008 12,227,010 20.37 12,167,639 24.61 {59,371) 4.24 (0.10)
10/]/2009 9,584,713 15.55 9,545,743 18.b0 (38,970) 3.05 (0.06)
10/1/2010 10,812,541 16.96 10,738,905 20.15 (73,636) 3.19 (0.12)
10/1/2011 13,290,241 20.14 14,158,036 2226 867,795 2.12 1.32
10/1/2412 15,282,620 22.39 16,157,992 24.44 875,372 2.05 1.28
~ ---a #Z - 50% DROP Entry st 1011!28®7
Anneal Required Contribution
Cosd(5sviugs) under
Baseline Scenario #Z Scenario #2
of Pay % of Pay
Valuation - after Plan before Plan
Date Dollar Amount % of Pay Dollar Amount % of Pay Dollar Amound Change Chango
10/1/2007 S 12,863,823 21.57 % S 13,124,578 2451 % $ 260,755 2.94 % 0.44
10/1/2008 12,227,010 20.37 12,493,813 23.05 266,803 2.b8 0.44
10/1/2009 9,584,713 15.55 9,852,341 17.59 267,628 2.04 0.43
10/1/2010 10,812,541 ~ 16.96 11,440,502 19 02 22?,961 2.06 0.36
10!1/2011 13,290,241 20.14 13,951,162 21.73 660,921 1.59 1.00
10/1/2012 15,282,620 22.39 15,924,816 23.91 642,196 1.52 0.94
~enario #3 - 33°/. D
OR_P Entry at 1®/1/20x7
Aenaal Required Contribation
Cost/(Savings) seder
Bsseline Scenario ~ ~~O ~
of Pay % of Pay
Valuation ai}er Plan before Plan
Date Dollar Amount % of Pay Dollar Amount % of Pay Dollar Amount Change Change
10/1/2007 $ 12,863,$23 21.57 % $ 13,297,566 23.91 % $ 433,743 2.34 % 0.73
10/1/2008 12,227,010 20.37 12,595,7A4 22.56 368,234 2.19 0.61
14/]/2009 9,584,713 15.55 9,446,114 17.26 361,401 1.71 OS9
10/1/2010 10,812,541 16.96 11,132,137 18.65 319,595 1.69 0.50
14/1/2011 13,290,241. 20.14 13,870,205 21.54 57964 1.40 0.88
10/1/2012 15,282,620 22.39 15,834,97b 23.72 552,356 1.33 0.81
481
Projection of Required Contribution (Continued)
Members who reach benefit accrual cap in futare are eligible to enter DROP (regardless of age)
See tfo #4 - 25% DROP Entry at 10/1/2007
Annual aired Contribution
Cost/(Savings) under
Baseline Scenario #4 Scenario #4
of Pay % of Pay
Valuation after Plan before Plan
Date Doilsr Amount % of Pay Dollar Amount % of Pay Dollar Amaurt Change Change
10!1/2007 S 12,863,823 21.57 °/i $ 13,378,972 23.64 % $ 515,149 2.07 °Yo 0.86
10!1/2008 12,227,010 20.37 12,646,136 22.34 419,126 1.97 ~ 0.70
10/1/2009 9,584,913 1555 9,993,290 17.12 408,577 1.57 0.66
1011!2010 10,812,541 1b.96 11,177,853 1850 365,312 154 0.57
10/1/201 i 13,290,241 20.14 13,834,542 21.45 544,301 1.31 0.82
10/1/2012 15,282,620 22.39 15,795,446 23.63 512,82b 1.24 0.75
Scenario #5 - 0°/. DROP Entry at 10/1C2Q07
Annual Required Coutribation
- Cost/(Savings) under
BaseNne Scenario #S 3cenarlo #5
_ % of Pay % of Pay
Valuation after Plan before Plan
Date Dollar Amount % of Pay Dollar Amount % of Pay Dollar Amount Change Change
10/1/2007 $ 12,863,823 2157 % $ 13,633,366 22.86 % S 769,543 1.29 % 1.29
10/1/2008 12,227,010 2037 12,792,079 ~ 21.69 565,069 1.32 0.94
10/1/2009 9,584,713 15.55 10,127,551 16.68 542,838 1.13 0.88
10/1/2010 10,812,541 16.96 11,308,686 18.00 496,145 1.04 0.78
10/1/2011 13,290,241 20.14 13,710,778 21.16 420.537 1.02 0.64
10/1!2012' 15,282,620 2239 15,658,287 23.35 375,667 0.96 0.55
Note: As indicated in the cover letter, these projections have been prepared as though there would be no experience
gains or losses after 9/30/2007. This assumption was made in order to keep the projections simple and
uncluttered. In reality, the Pension Fund had a negative investment return for the year ending 9/30/2008. This
experience will raise the required contribution by an as yet to be determined amount starting 10/1/2009.
482
Projection of Required Contribution
Members who reach benefit accrual cap in future are eligible to enter DROP but not earlier than age 50
Q-~pna_~o #1--100% DROP Entry at 10/U2007
Annual Required Contribution
Cost/(Savings) ender
BaaeIIne Scenario #1 Scenario #1
- % of Pay % of Pay
Valuation after Plan before Plan
Data Dollar Amount % of Pay Dollar Amount % of Pay Dollar Amount Change Change
10/1/2007 $ 12,863,823 21.57 % $ 12,218,821 25.74 % $ {645,002) 4.17 % (1.08)
10/1/2008 12,227,010 20.37 11,7b7,587 23.80 (459,423) 3.43 (0.77)
10/1/2009 9,584,713 15.55 9,157,629 17.80 (427,084} 225 (0.69)
10/1/2010 10,812,541 16.96 10,368,097 19.35 (444,444) 2.39 {0.70}
10!112011 13,290,241 20.14 13,814,746 21.52 524,505 1.38 0.79
10/I/2012 15,282,620 22.39 15,815,915 23.71 533,295 1.32 0.78
~nario #2 - SO•/. DROP Entry at 10/1/2007
Aanaal Rmaired Contrlbation
CosN(Savings) Hader
Baseline Scenario #2 ~ar~ #Z
% of Pay % of Pay
Valuation _ after Plan before Plan
Date Dollar Amount % of Pay Dollar Amount % of Pay Dollar Amount Change Change
10/1!2007 S 12,863,823 21.57 % S 12,727,613 23.77 % $ (136,210) 2.20 % (013) %
10/1!2008 12,227,010 20.37 12,095,433 22.31 (131,577) 1.94 (0.22)
10/1/2009 9,584,713 15.55 9,467,223 16.86 (117,490) 1.31 (0.19)
10/1/2010 10,812,541 16.96 10,674,246 18.30 (138,295) 1.34 (012)
20/1!2011 13,290,241 20.14 13,b18,i73 21.02 327,932 0.88 0.50
10/1/2012 I5,282,b20 22.39 15,593,340 2311 310,720 0.82 0.46
Scenario #3 - 33•/. DROP E~ at 10/1/2007
Annual aired CoaMbution
Cost/(Savings) ender
Baseline Scenario #3 Scenario #3
of Pay of Pay
Valuation after Plan before Plan
Date Dollar Amount % of Pay Dollar Amount % of Pay Dollar Amount Change Change
10/1/2007 $ 12,863,823 21.57 % $ 12,900,600 23.20 % $ 36,777 1.63 % 0.06
l0/1/2008 12,227,010 20.37 12,201,104 21.85 (25,906) 1.48 {0.04)
10/1/2009 9,584,713 15.55 9,565,419 16.57 (19,294) 1.02 (0.03)
10/1/2010 10,812,541 16.96 10,770,570 17.97 (41,971) 1.01 (0.07)
10/1/2011 13,290,241 20.14 13,543,551 20.84 253,310 0.70 0.38
10/1!2012 15,282,620 22.39 15,509,732 23.03 227,112. 0.64 0.33
483
Projection of Required Coatrlbution (Continued)
Members who reach benefit accrual cap in future are eligible to enter DROP but not earlier tLan age 50
cseuarIo #4 - 25% DROP Entrv at 10/1/2007
Annual Required Contribution
Cost/(Savings) under
Baseline 3censrio #4 Scenario f14
% of Pay % of Pay
Valuation aftc~ Plan mom Plan
Date Dollar Amount % of Pay Dollar Amount % of Pay Dollar Amount Change Change
10/1/2007 $ 12,863,823 21.57 % $ 12,982,006 22.94 % S 118,183 137 % 0.20 %
10/1/2008 12,227,010 20.37 12,246,074 21.64 19,064 1.27 0.03
10/1/2009 9,584,713 15.55 9,b07,109 16.42 22,396 0.87 0.04
10/1/2010 10,812,541 16.96 10,811,248 17.81 {1,293) 0.85 0.00
10/1!2011 13,290,241 20.14 13,503,931 20.75 213,690 0.61 0.32
10/1/2012 15,282,620 22.39 15,466,570 22.94 183,950 0.55 0.27
G~n9*lo liS - 0'/o DROP EIItri at lOJ1/2007
flannel Repaired Coatrlbation
Cost/(SavLgs) wader
Baseline Scenario ~5 Scenario #S
_ % of Pay % of Pay
Valuation after Plan before Plan
Date Dollar Amount of Pay Dollar Amount % of Pay Dollar Amount Change Chaa~
10/1/2007 $ 12,863,823 21.57 % S 13,236,400 22.20 % S 372,577 0.63 % 0.63 %
10/1/2008 12,227,010 20.37 12,390,344 21.01 163,334 0.64 0.27
10/1/2009 9,584,713 15.55 9,740,250 16.01 155,537 0.46 0.25
10/1/2010 10,812,541 16.96 10,941,599 1734 129,058 0.38 0.20
10/1/2011 13,290,241 20.14 13,382,310 20.47 92,069 0.33 0.14
10/1/2012 15,282,620 22.39 15,331,760 22.66 49,140. 0.27 0.07
Note: As indicated in the cover letter, these projections have been prepared ss though there would be no experience
gains or losses after 9!30/2007. This assumption was made in order to keep the Projections simple and
uncluttered. In reality, the Pension Fund had a negative investment return for the year ending 9/30/2008. This
experience will raise the required contribution by an as yet to be determined amount starting 10/1/2009.
484
Projection of Regnlred Contribution
Members who reach benefit accrual cap in future are eligible to enter DROP but not earUer than age 52
Scenario #i - lOd•/s DROP Entrv at 10/1/2007
Apnea! R~uired Contribution
Coct/(Savings) Bader
Baseline Scenario #I Scenario #1
of Pay % of Pay
Valuation aRer Plan before Plen
Date Dollar Amount % of Pay Dollar Amount % of Pay Dollar Amount Change Change
10/1/2007 $ 12,863,823 21.57 % $ 12,142,589 25.58 % $ (721,234) 4.01 °/i (1.21) %
10/1/2008 12,227,010 20.37 11,686,811 23.64 (540,199) 3.27 (0.90)
lal/2009 9,584,713 15.55 9,073,612 17.64 (511,101} 2.09 {0.83)
lal/2010 10,812,541 16.96 10,280,614 19.19 (531,927) 2.23 (0.83)
lal/2011 13,290,241 20.14 13,713,643 2136 423,402 1.22 0.64
10/1!2012 15,282,620 22.39 15,710,478 23.55 427,838 1.16 O.b3
Ccenario a2 - 50% DROP Eatr9 at ld/1L2tid7_
Anneal Required Contribntlon
Cart!(Savags) aader
Baseline Scenar[o #Z Sasarb #Z
of Pay % of Pay
Valuation - sties Plan before Plan
Date Dollar Amount % of Pay Dollar Amount % of Pay Dollar Amount Change Change
lal/2007 $ 12,8b3,823 21.5? % S 12,b51,381 23.63 % $ (212,442) 2.06 °h (036) %
10/1/2008 12,227,010 20.37 12,015,891 22.17 (211,119) 1.80 (0.35)
10/1/2009 9,584,713 1555 9,383,916 16.72 (200,797) 1.17 (033)
10/1/2010 10,812,541 16.96 10,586,962 18.15 {225,579) 1.19 (0.35}
lal/2011 13,290,741 20.14 13,521,897 20.88 231,656 0.74 0.35
lal/2012 15,282,620 22.39 15,492,462 23.06 209,842 0.67 031
Scen_arri_o #3 - 33•k DROP Entrv at 10/1/Zdd7
Annual Reeplred Contribntioa
Cost/(Savinga) under
Baseiune Scenario #3 ~
% of Pay % of Pay
Valuation after Plan before Plan
Date Dollar Amount % of Pay Dollar Amount % of Pay Dollar Amount Change Change
10/1/2007 $ 12,863,823 21.57 % $ 12,824,3b8 23.06 % $ (39,435) 1.49 % (0.07)
10/1/2008 12,227,010 20.37 12,120,270 21.71 (106,740) 134 (0.18}
lal/2009 9,584,713 15.55 9,480,694 1b.42 (104,019) 0.87 (0.17)
lai/2010 10,812,541 16.96 10,681,747 17.82 (130,794) 0.86 (0.21)
10/1/2011 13,290,241 20.14 13,447,362 20.70 157,121 0.56 0.24
10!1/2012 15,282,620 22.39 15,408,926 22.88 126,306. 0.49 0.19
485
Projecdon of Required Contribution (Continued)
Members who reach benefit accraal cap in feature are eligible to enter DROP but not earlier than age 52
Scenario #4 -- ZSY° DROP Entry at 10/1/Z007
Aunaal Required Contribution
Coet/(Savin$e) under
Baseline 5cenarlo #4 Scenario #4
°i6 of Pay % of Pay
Valuation after Plan before Plan
Date Dollar Amount % of Pay Dollar Amount % of Pay Dollar Amount Change Change
10/112007 S 12,863,823 21.5? S 12,905,774 22.81 % $ 41,951 1.24 % 0.07 %
10/1/2008 12,227,010 20.37 12,164,632 21.49 (62,378) 1.12 (0.10)
10/1/2009 9,584,713 15.55 9,521,713 1628 {63,000} 0.73 (0.10)
10/1/2010 10,812,541 16.96 10,721,700 17.66 (90,841} 0.70 (O.I4)
10/1/2011 13,290,241 20.14 13,407,?83 20.61 117,542 0.47 0.18
10/1/2012 15,282,b20 22.39 i5,365,?90 22.79 83,170 0.40 0.12
.S'e~earu. #5 - 0% DROP Entry st 10!112007
Anaual R~+utred ConMbutbn
Cost/(Saviup) under
Baseline Scenario #3 Scenario #5
_ % of Pay °k of Pay
Valuation after Plan beforo Plan
Date Dollar Amount % of Pay DOtlar Amamt % of Pay Dollar Amount Cheng~e Change
10!1/2007 S 12,863,823 21.57 °i6 S 13,160,168 22.07 % S 29b,345 OSO % 0.50 %
10/112008 12,227,010 2037 12,312,575 20.88 85,565 OS1 0.14
10!112009 9,584,713 15.55 9,658,061 15.87 73,348 0.32 0.12
10/1/ZO10 10,812,541 16.96 10,854,843 17.21 42,302 0.25 0.07
10/1/2011 13,290,241 20.14 13,291,136 20.34 895 0.20 0.00
10/1/2012 15,282,620 22.39 ~ 15,235,664 22.52 ~ (46,956) 0.13 (0.07)
Note: As indicated in the cover letter, these projections have been prepared as though there would be no experience
gains or losses aftea 9/30/2007. This assumption was made in order to keep the projections simple and
uncluttered. In reality, the Pension Fund had a negative investment return for the year ending 9/3012008. This
experience will raise the required conmbution by as as yet to be determined amount starting 10/1/2009.
486
Projection of Req~red Contnbution
Members who react benefit accrual cap in future are eliglble to enter DROP but not earlier than age SS
~ena*io #1-100% DROP I'7afrv st 10/1/2007
Annum Required Contribudon
Cosd(Savlugs) under
Baseline Scenario #1 Scenario #1
%ofPay %ofPay
Valuation after Plan before Plan
Date DollarAmount %ofPay DollarAmount %ofPay DoliarAmount Change Change
lal/2007 S 12,863,823 21.57 % S 1],878,596 25.03 % S {985,227) 3.46 % (1.65)
l0yi/2pOg 12,227,010 20.37 11,418,345 23.09 {808,665) 2.72 (135)
lal/2009 9,584,713 15.55 8,799,384 17.11 (785,329) 1.56 (127)
10/1/2010 10,812,54] 16.9b 10,000,221 18.66 (812,320) 1.70 (127)
lal/2011 13,290,241 20.14 13,408,630 20.89 118,389 0.75 0.18
ial/2012 15,282,620 22.39 15,397,781 23.08 115,161 0.69 0.17
S p~°rio#2 -50% DROP 17ntry it 10/1/20Q7
Annual RegnlredCo~ribution
CostJ(Sa~ings) ender
Baseline Scenario#2 Scenario#2
%ofPay %ofPay
Valuation after Plan before Plan
Date Dollar Amount %ofPay DoliarAmount °/.ofPay Dollar Amount txsange Change
lal/2007 S 12,863,823 21.57 % S 12,387,388 23.13 %a $ (476,435) 1.56 % (0.80)
lal/2008 12,22?,010 2037 11,745,090 21.67 (481,920) 130 (0.80)
lal/2009 9,584,713 15.55 9,106,630 16.22 (478,083) 0.67 (0.78)
lal/2010 10,812,541 .16.96 10,301,781 17.66 (504,760) 0.70 (0.80)
lal/2011 13,290,241 20.14 13,221,686 20.41 (68,555) 0.27 (0.10)
lal/2012 15,282,620 2239 15,184,307 22.60 (98,313) 0.21 (0.14)
c~..+°rin!!~ ;a°/ T1RAP1]ntrvatl0/1/2007
Annual RequlredConWb>ltion
- CosbiSaNnEs} under
Baseline Scenario #3 Scenario #3
Yo ofPay %ofPay
Valuation after Plan beiiote Plan
Date Dollar Amount %ofPay Dollar Amount %ofPay Dollar Amount Change G'ttange
lai/2007 S 12,863,823 21.57 % S 12,560,375 22.58 % S {303,448) 1.01 % (0.51)
10/1/2008 12,227,010 20.37 11,846,960 21.22 (380,050) 0.85 (0.63}
ial/2009 9,584,713 1555 9,200,707 15.94 (384.006) 039 (0.62}
IOV1/2010 10,812,541 16.66 10,394,670 17.34 (417,871) 038 (0.66)
10JI/2011 13,290,?Al 20.14 13,147,228 20.23 (143,013) 0.09 (0.22)
• l0?1/2012 15,282,620 22.39 15,100,833 22.42 (181,787) 0.03 (0.27)
487
Projection of Required Contribution {Continued)
Members who reach benefit avcrual cap in future are eligible to enter DROP bnt not earlier than age 55
Scenario#4 2S°/. DROPEatrvat101 7
Annual Repaired Coatribation
Cast/(Savings) render
Saseiine S eenario #4 Scenario #4
%ofPay %ofPay
Valuation after Plan before Plan
Date Dollar Amount %ofPay DollarAmount %ofPay Dollar Amount Change Change
lal/2007 $ 12,863,823 21.57 9/0 $ 12,641,781 22.34 % $ (222,042) 0.77 % (0.37)
10/i/2008 12,227,010 20.37 11,895,570 21.02 (331,440) 0.65 (0.55)
10/1/2009 9,584,713 1S.SS 9,245,639 15.81 (339,074) 0.26 (0.55)
10/1/2010 10,812,541 16.96 10,438,233 17.19 (374,308) 0.23 (0.59)
10/1/2011 13,290,241 20.14 13,112,458 20.15 (177,783) 0.01 (0.27}
10/1/2012 15,282,620 22.34 15,062,235 22.34 (220,385) (0.05) (0.32)
Scenario #S - 0% DROP >'Sntrv at 10/1/Z007_
Annnal Req~lred Cotttribctlon _ _
Costl(Savings} wader
Baseline Sceasrto #S 3eenario #3
%ofPay %ofPay
Valuation after Plan before Plan
Date Dollar Amount ofPay Dollar Amount %ofPay Dollar Amount Change Change
lal/2007 $ 12,863,823 21.57 °/i $ 12,896,175 21.63 % S 32,352 0.06 % 0.06
10/1/2008 12,227,010 20.37 12,034,412 20.40 (192,598} 0.03 (0.32)
10/1/2009 9,584,713 15.55 9,372,833 15.41 (211,880) (0.14) (0.34)
10/1/2010 !0,812,541 16.96 10,562,147 16.74 (250,394) (0.22) (0.39}
10/1/2011 13,290,241 20.14 12,991,159 19.88 (299,082) (0.26) (0.45)
10/1/2012 15,282,620 22.39 14,927,698 22.06 (354,922) (0.33) (0.52)
Note: As indicated in the coves letter, these projections have been prepared as though there would be no experience
gains or losses after 9/3012007. This assumption was made in order to kceP the projections simple and
uncluttered. Tn reality, the Pension Fund had a negative investment return for the year ending 9/30/2008. This
experience will raise the requirod contribution by an as yet to be determined amount starting 10/1/2009.
488
~17
CITY OF -MIAI~~ BEACH ~ o -
N
NOTICE OF~ PUBLIC HEARINGS
}
NOTICE IS HEREBY given .that second readings and public hearings will be held ~ z
by the Mayor and City Commission of the City of Miami Beach, Florida, iri the ~ a
Commission Chambers, 3rd floor, City HaII, 1700 Convention Center Drive, Miami }
Beach, Florida, on Wednesday, January 28, 2009, to consider the following: ~ o
` 10:15 a.m.
An Ordinance Amending Miami Beach City Code Chapter 2, Article tll, Section
2-22(5)(a) Thereof Regardipg General Requirements for Membership On City Of c
Miami Beach's Agencies, Boards And Committees, By Providing That When A
Vacancy On The City Commission Exists Beyond December 31 Of The Year An W
Appointing Commission Member Leaves Office, Direct Appointees Of Said Former _
Commission .Member. Shall Hold Over UnUI The Appointment/Election Of The a.
Successor City Com(ission Member. ~
E W
N
Inquiries may be directed to the City Attorney's Office at (305) 673-7470. ~ ~
! -
10:20 a.m. °
An Ordinance Amending The Land Development Regulations Of The City Code
Of The City Of Miami Beach, Florida By Amending Chapter 118, "Administration ~ z
And Review Procedures," Article II, "Boards," Division 2, "Planning Board;' By ~
Amending Section-118-53, "Composition," By Clarifying That Only A Resident o
Of The City Shall Be Eligible For Appointment; Amending Division 4, "Historic
Preservation Board," SecUan 118-103, "Membership,'' By Establishing That One
Of The At-Large Members Who Must Own Or Manage Property In One Of The _
E
'Historic Districts' Shall Also Reside In The City. -fO
Inquiries may be directed to the Planning Departmen~:at (305) 673-7550.
m
10:25 a.m.
An Ordinance Amending City Code Chapter 118, "Administration And Review
Procedures," Article VII, "Division Of Land/Lot Split," Section 118-321, "Purpose,
Standards And Procedure," By Clarifying That The Review Criteria For Requests }
For A Division Of Land/Lot Split To Require An Applicant To Submit Massing And 1
Scale Studies Of Possible Structures And Uses On The Lot Or Lots Proposed To
Result From Lot Splits; And The Required Opiniori Of Title Should Be As Of A Date
Not More Than 120 Days Before The Planning Board Meeting. 1
Inquiries may be directed to the Planning Department at (305) 673-7550.
10:35 a:m.
An Ordinance Implementing A Deferred Retirement Option Plan For Members Of '
The Miami Beach Employees' Retirement Plan Created By Ordinance 2006-3504,
As Subsequently Amended; Oreating A New Sention 2.26, Providing A Definition Of i
Deferred Retirement Option Plan; Creating A New Section 5.13, Establishing The .
Deferred Retirement Option Plan And Setting Forth The Features Of The Plan.
Inquiries may be directed to the Human Resources Department at (305) 673-7520.
INTERESTED PARTIES are invited to appear at this meeting, or be represented by
an agept, or to express their views in writir~ addressed to the City Commission,
c/o the City Clerk, 1700 Convention Center Drive, i st Floor, City Hall, Miami Beach,
Florida 33139. Copies of these ordinances are available for public inspection .
during normal business hours in the City Clerk's Office,1700 Convention Center
Drive, 1st Floor, C'dy Hail, and Miami Beach, Florida 33139. This meeting may. -
be continued and under such circumstances additional legal notice would not
be provided. i
Robert E. Parcher, City Clerk
City of Miami Beach
Pursuant to Section 286.0105, Fla. Stat., the Ciiy hereby advises the public
i that:, if a person decides to appeal -any decision made by the City Commission
wiW respect to any matter considered at its meeting or its hearing, such person f
~ must ensure that a verbatim record of the proceedings is made, which record i
includes the testimony and evidence upon which the appeal is to be based. This
notice does not constitute consent by the City for the introduction or admission of 1
otherwise inadmissible or irrelevant evidence, nor does it authorize challenges or
1 appeals not otherwise allowed by law. i
To request this material in accessible format, sign language interpreters,
( information on access for persons with disabilities, and/or arty accommodation ; I
to review any document or participate in any city-sponsored proceeding, please
contact (305) 604-2489 (voice), (305) 673-7218 (ml five days in advance to ~
initiate your request. TTY users may also call 711 (Florida Relay Service).
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