The URL can be used to link to this page

Home My WebLink About2011 03 31 Other City of Winter Springs Defined Benefit Plan PowerPoint Presentation Date: March 31, 2011 The attached document was provided to the Board of Trustees Members and was discussed during Regular Agenda Item "600" at the Special Meeting of March 31, 2011. w H z r 404 O ONE* f 1 A w z w w z z H w w z W M U� I 0 w N V v 3 u w -t!� W V .t� O U . O 0 N c� V i-, c a E 0 V E O U cn a� r 4J 4. "r I l r � � r i cn P4 C.7 10 ,0 Phase I - Benchmarking *Compare Winter Springs Plan Benefits To: Florida Local Law Plans General Employee Plans Police and Firefighter Plans Florida Retirement System (FRS) Chapter 185 Police Officer Benefits GRS 2 10 ,* Phase I - Benchmarking •Benefits Reviewed: Normal Retirement Eligibility Early Retirement Eligibility Benefit Accrual Rate Final Average Pay Period Member Contributions Plan Closure Plan Freeze GRS 10 ,* Phase I - Benchmarking • Normal Retirement Eligibility Current Plan Age 65 Unreduced Early: Age 55 and 10 Years of Service Local Law Plans General Employees: — Most Common: 30 Years of Service — Least Restrictive: Age 50 and 5 Years of Service Special Risk (Police Officers and Firefighters): — Most Common: Age 55 and 10 Years of Service — Least Restrictive: 20 Years of Service GRS 11 ,* 10 Phase I - Benchmarking • Normal Retirement Eligibility (cont) Current Plan Age 65 Unreduced Early: Age 55 and 10 Years of Service FRS General Employees: — Earliest of: Age 62 and 6 Years of Service 30 Years of Service Special Risk (Police Officers and Firefighters): — Earliest of: Age 55 and 6 Years of Service 25 Years of Service G ,* 10 Phase I - Benchmarking • Normal Retirement Eligibility (cont) Current Plan Age 65 Unreduced Early: Age 55 and 10 Years of Service Chapter 185 (Police Officers) Earliest of: — Age 55 and 10 Years of Service — Age 52 and 25 Years of Service Chapter 175 (Firefighters) � Same as Police Officers G 10 ,* Phase I - Benchmarking • Early Retirement Eligibility Current Plan 25 Years of Service Unreduced Early: Age 55 and 10 Years of Service Local Law Plans General Employees: - Most Common: Age 55 and 10 Years of Service - Least Restrictive: Age 42 and 5 Years of Service Special Risk (Police Officers and Firefighters): - Most Common: Age 50 and 10 Years of Service - Least Restrictive: Age 40 and 10 Years of Service GRS ,* 10 Phase I - Benchmarking • Early Retirement Eligibility (cont) Current Plan 25 Years of Service Unreduced Early: Age 55 and 10 Years of Service FRS All Employees: — 6 Years of Service Chapter 185 (Police Officers) Age 50 and 10 Years of Service Chapter 175 (Firefighters) Same as Police Officers GRS 10 ,* Phase I - Benchmarking • Benefit Accrual Rate Current Plan 3% Local Law Plans ,- General Employees: - Median: 2.5% - Most Common: 3% Special Risk (Police Officers and Firefighters): - Median: 3% - Most Common: 3% y GRS ,* 10 Phase I - Benchmarking • Benefit Accrual Rate (cont) Current Plan FRS General Employees: - 1.6% (1.8 %) Special Risk (Police Officers and Firefighters): - 3% Chapter 185 (Police Officers) 2% Chapter 175 (Firefighters) Same as Police Officers 10 GRS 10 ,* Phase I - Benchmarking • Final Average Pay Period Current Plan 3 Consecutive Years Local Law Plans General Employees: - Median: 5 Years - Most Common: 5 Years Special Risk (Police Officers and Firefighters): - Median: 5 Years - Most Common: 5 Years 11 GRS ,* 10 Phase I - Benchmarking • Final Average Pay Period (cont) Current Plan 3 Consecutive Years FRS General Employees: — 5 Highest Years Special Risk (Police Officers and Firefighters): — 5 Highest Years Chapter 185 (Police Officers) 5 Years Chapter 175 (Firefighters) Same as Police Officers 12 GRS ,* 10 Phase I - Benchmarking • Member Contributions Current Plan 3% Local Law Plans General Employees: - Median: 5% - Most Common: None Special Risk (Police Officers and Firefighters): - Median: 6% - Most Common: 5% 13 GRS ,* 10 Phase I - Benchmarking • Member Contributions (cont) Current Plan FRS All Employees: - None - Proposed Legislation Chapter 185 (Police Officers) 5% Chapter 175 (Firefighters) Same as Police Officers 14 GRS 10 ,* Phase I - Benchmarking • Plan Closure No New Members Current Members Retain Current Benefits Future Benefits May Be Modified •Plan Freeze No New Members Current Members Benefits Frozen 15 GRS �/ Phase 2 - Financial Projections (10/1/2009) Rp • Current Plan Net City and County Cost (8% Return) One Year = $2,746,000 (24.8% of Covered Pay) Ten Year = $31,806,000 (25.3% of Covered Pay) ►Net City and County Cost (9% Return) One Year = $2,743,000 (24.7% of Covered Pay) Ten Year = $30,799,000 (24.5% of Covered Pay) Net City and County Cost (7% Return) One Year = $2,749,000 (24.8% of Covered Pay) Ten Year = $32,768,000 (26.1% of Covered Pay) 16 GRS 0 Phase 2 — Financial Projections (10/1/2009) 1 0 • 2.5% Benefit Accrual Rate Net City and County Cost (8% Return) One Year = $2,510,000 (22.6% of Covered Pay) Ten Year = $28,882,000 (23.0% of Covered Pay) • 5 Year Final Average Base Salary Net City and County Cost (8% Return) One Year = $2,381,000 (23.4% of Base Pay) Ten Year = $27,982,000 (24.0% of Base Pay) 17 GRS Phase 2 - Financial Projections (10/1/2009) *Current Plan Vesting 20% after 3 Years, Increasing 20% Per Year, 100% after 7 Years • 7 Year Cliff Vesting 0% 0 -6 Years, 100% 7 Years Net City and County Cost (8% Return) One Year = $2,744,000 (24.8% of Covered Pay) Ten Year = $31,773,000 (25.3% of Covered Pay) 18 GRS Phase 2 - Financial Projections (10/1/2009) • Early Retirement Unreduced General Employees: Age 55 and 15 Years of Service Police Officers /Firefighters: 30 Years of Service Net City and County Cost (8% Return) One Year = $2,588,000 (23.3% of Covered Pay) Ten Year = $29,938,000 (23.7% of Covered Pay) Unreduced 1, All Employees: Age 55 and 15 Years of Service Net City and County Cost (8% Return) One Year = $2,700,000 (24.3% of Covered Pay) Ten Year = $31,286,000 (24.7% of Covered Pay) 19 GRS Phase 2 - Financial Projections (10/1/2009) • Early Retirement Unreduced General Employees: Age 55 and 15 Years of Service Police Officers /Firefighters: Earliest of: >> Age 55 and 15 Years of Service 30 Years of Service Net City and County Cost (8% Return) One Year = $2,715,000 (24.5% of Covered Pay) Ten Year = $31,449,000 (24.9% of Covered Pay) 20 G Phase 2 - Financial Projections (10/1/2009) • Combined Unreduced Early Retirement General Employees: Age 55 and 15 Years of Service Police Officers /Firefighters: 30 Years of Service Net City and County Cost (8% Return) One Year = $2,052,000 (20.1% of Base Pay) Ten Year = $23,985,000 (20.5% of Base Pay) Unreduced Early Retirement All Employees: Age 55 and 15 Years of Service Net City and County Cost (8% Return) One Year = $2,108,000 (20.7% of Base Pay) Ten Year = $24,688,000 (21.1% of Base Pay) 21 GRS Phase 2 - Financial Projections (10/1/2009) • Combined Unreduced Early Retirement General Employees: Age 55 and 15 Years of Service Police Officers /Firefighters: Earliest of: >> Age 55 and 15 Years of Service 30 Years of Service Net City and County Cost (8% Return) One Year = $2,118,000 (20.8% of Base Pay) Ten Year = $24,799,000 (21.2% of Base Pay) 22 G 0 Phase 2 — Financial Projections (10/1/2009) 1 0 •Plan Closure Net City and County Cost (8% Return) One Year = $2,667,000 (25.8% of Covered Pay) Ten Year = $28,096,000 (31.1% of Covered Pay) • Plan Freeze Net City and County Cost (8% Return) One Year = $1,068,000 (10.3% of Covered Pay) Ten Year = $12,172,000 (13.5% of Covered Pay) 23 GRS Phase 2 - Financial Projections (10/1/2009) Reductions in Net City and County Cost 2.5 %: One Year ($236,000), Ten Year ($2,924,000) FAE(5): One Year ($365,000), Ten Year ($3,824,000) Vesting(7): One Year ($2,000), Ten Year ($33,000) ER (G 55 &15,PF 30 &out): Year ($1,868,000) One Year ($158,000), Ten ER (GPF 55 &15): One Year ($46,000), Ten Year ($520,000) ER (GPF 55 &15,PF 30 &out): One Year ($31,000), Ten Year ($357,000) 24 GRS Phase 2 - Financial Projections (10/1/2009) Reductions in Net City and County Cost Combined (ER - G 55 &15,PF 30 &out): One Year ($694,000), Ten Year ($7,821,000) Combined (ER - GPF 55 &15): One Year ($638,000), Ten Year ($7,118,000) Combined (ER - GPF 55 &15,PF 30 &out): One Year ($628,000), Ten Year ($7,007,000) Plan Closure: One Year ($79,000), Ten Year ($3 .1 710,000) Plan Freeze: One Year ($1,678,000), Ten Year ($19. 1 634,000) 25 GRS 10 City of Winter Springs Defined Benefit Plan 1 0 • Circular 230 Notice: Pursuant to regulations issued by the IRS, to the extent this presentation concerns tax matters, it is not intended or written to be used, and cannot be used, for the purpose of (i) avoiding tax - related penalties under the Internal Revenue Code or (ii) marketing or recommending to another party any tax - related matter addressed within. Each taxpayer should seek advice based on the individual's circumstances trom an independent tax advisor. • This presentation shall not be construed to provide tax advice, legal advice or investment advice. • Readers are cautioned to examine original source materials and to consult with subject matter experts before making decisions related to the subject matter of this presentation. 26 GRS