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HomeMy WebLinkAbout12-09-2016 PBA MinutesCITY OF SEBASTIAN PBA— PENSION PLAN - DROP COLA BUY-BACK PROVISIONS MINUTES OF REGULAR MEETING December 9, 2016 Present: Ken Killgore, Administrative Services Director, City of Sebastian Cynthia Watson, Assistant Administrative Services Director/HR Manager, City of Sebastian Al Boettjer, PBA Union Representative Ken McDonough, Police Officer Union Representative Jason Mills, Police Officer Union Representative A meeting between the City of Sebastian and the Police Officer Union Representatives for the PBA began at 10:20 AM. Ken Killgore brought the meeting to order. This is the second meeting to discuss the DROP, Buy-back, and COLA and what the requirements would be included in the programs. Research was conducted by Mr. Killgore and Mr. Mills. Mr. Boettjer also found information on the Mass Mutual DROP Plan. He stated that Mass Mutual has several ways they could manage the program. They could absorb the whole Pension Plan. They would administer for the City and the Pensioners. Another option for the DROP plan is funded by the employee plan where the investments are directed by the employee through Mass Mutual. The Pension Payment would go to Mass Mutual and it would be an individual account for those employees. If they chose to do that, they would have a variety of group options. They could choose to manage their own investments or they could use MassMutual's guaranteed plan which would give them a guaranteed 3% rate of return on the DROP money. Mass Mutual is willing to talk to us. Richard Snyder (407) 247-2543 is the person the City would speak to. He is the Managing Director of Institutional Government Retirement Plans. Mr. Mills stated that VanGuard gave the best deals. The Representative there is Bernie Rice. She is their lead Counsel. She conducted a study and found out who had the best DROP manager. Her list showed VanGuard was number one, ICMA was number two. Mr. Killgore spoke about the Rockwood Agency Apparently they pay out the 1.3% or you have the option, which is approved by the Board, to make your own decision where you want to invest your DROP funds. For example you, individually, want to use VanGuard and someone else wants to use a different DROP manager. Mr. Killgore was impressed by Rockwood. Discussion took place on the percent of guarantee and investment of the funds. It was requested that Mr. Killgore look at the fees of the vendor and a possible 3% guarantee. Mr, Killgore suggested he go out for an RFP to vendors and develop a Committee to review the RFPs which would include Mr. Mills and Mr. McDonough. Mr. Killgore is suggesting he go to the Board with Individually directed accounts. It gives the Officers an option with their money. Discussion took place on an officer leaving the plan prior to the five (5) years. Mr. Killgore stated that an officer who has chosen an actual date to leave can't decide to extend if they are out for an illness. The date is the date. Mr. Mills had a question regarding someone exceeding the age 60 by the end of the DROP period and that it might be illegal. He was asking where this came from. Mr. Killgore will ask the Pension Board Attorney. It was agreed to remove the age provision. Mr. Mills questioned the statement, "participants receive no additional guarantee of employment". Mr. Killgore stated that you're subject to the same discipline as a regular employee. The officers still fall under the contract even though they are in the DROP program. Mr. Mills questioned the possibility to put vacation and/or sick time payouts into the DROP program. Could the officers have the option of putting those monies in DROP right away? It would be a nice option. Discussion took place regarding leave and payout. It was stated that once they select DROP they are paid out therefore, they don't have anything accrued. So if they want to take vacation, they would have to wait until they accrue time. The officers do accrue at the same rate. It was stated Palm Bay pays out all sick time and vacation at the end of DROP. Mr. Killgore stated that some pay a portion. Ms. Watson suggested that an officer will be paid out the 600 hours of sick if they have it and then if there is an excess of sick time hours, the officer can keep at least a minimum of 480 hours be carried for 12 weeks for FMLA. It was decided to pay out vacation time per the contract unless a vacation is scheduled after the retirement. It was agreed that anyone taking DROP will be paid out 600 hours and if any additional hours up to 480 hours can be carried over which is equivalent to twelve weeks of FMLA. Mr. Killgore stated he wanted to expedite the process so it was recommended to talk to VanGuard and MassMutual then put out a proposal. Mr. Killgore stated that the Pension Board meets next Tuesday and Mr. Killgore will update them on benefit changes. He wants to get factor changed to make everybody at the 8%. He would like to get a motion by the Pension Board to direct the Pension Board Attorney to draft up the legal documents. He would suggest they look at certain cities to see the language of the Ordinance. Mr. Boettjer requested copies of all that is given or received from the attorney. Mr. Mills asked about the COLA and what was happening there. Mr. Killgore stated he recommended age 62 years and retired 60 months before receiving the COLA. Another recommendation was 15 or 20 years of service and age 58. It was highly recommended by Mr. Mills that 15 years of service and age of 58 before receiving the COLA would be the best. He felt that this would give the City time to save up the insurance funds to pay for the COLA because we aren't going to have to use it right away. Conversation took place on the COLA and Florida State Funds. Mr. Killgore recommended that we will commit putting 1% in the proposal for the recommended COLA with 15 years. He stated if that can't be done per the Actuary, then the City will come back to discuss. Mr. Killgore will send to the Actuary. The following was agreed to by the City and the Union: 1%, 15years of service and 58 years of age. Mr. Killgore discussed the buyback. It was agreed that Military and other Agency personnel could buyback four (4) years after they had five (5) years of service. The question was how a person could pay for it if no help from the City. Mr. Mills stated we want this to be a useful benefit because is someone has to have all the money up -front, no one will use this benefit. Discussion took place on the buyback. Mr. Killgore stated he will put in the ordinance that the person could buy back up to four (4) years of service. You must be employed five (5) years to be eligible. In addition, they would have to purchase in one (1) year increments. The charge for the Actuary is approximately $150.00. Mr. Killgore spoke of a timeline for all the documents and approval by the Union. The Pension Board Attorney would create and bring back an Ordinance back to the Board and the Board will bring back to the Union. If all approved it would go to Council. The Union would also like to have it go to the Union attorneys. Mr. Killgore stated the Pension Board meets next Tuesday and then not until March 2017. Mr. Killgore will request to have the Ordinance back in the next thirty days. It was suggested we could meet in January. The Actuary committed to have the Actuarial Report for this current year to him on Monday. The Actuary cannot be at the next meeting. Our goal is to have everything back by March 2017.