HomeMy WebLinkAbout7183RESOLUTION NO. 7183
A RESOLUTION CERTIFYING THE VOTE OF THE CITY COUNCIL ON
PROPOSED MODIFICATIONS TO THE STATEWIDE NEW HIRE PENSION
PLAN FOR POLICE OFFICERS
WHEREAS, the Board of Directors of the Fire and Police
Pension Association has proposed modifications to the pension
benefits and age and service requirements for police officer
pension benefits set forth in Part 10 of Article 30 of Title 31,
C.R.S.; and
WHEREAS, certain conditions must be met before the Board
may adopt any modification to the plan, including approval by
more than fifty percent of the employers having active members
covered by the plan; and
WHEREAS, it is therefore necessary for the City Council to
either approve or reject these plan modifications;
NOW, THEREFORE, BE IT RESOLVED BY THE CITY COUNCIL OF
PUEBLO, that:
Section 1. The vote of the City Council on the five proposed
amendments to the Statewide New Hire Plan for police officers is
as follows:
Amendment One 6 yes 1 no
Amendment
Two
6
yes
1 no
Amendment
Three
6 __
yes
1 no
Amendment
Four
5
yes
2 no
Amendment
Five
6
yes
1 no
Section 2. The City Clerk is hereby authorized and directed
to complete the Official Statewide Pension Plan Employer Ballot
in accordance with this vote.
INTRODUCED:
By SAMUEL
Councilpe
ATTEST:, APPROVED:
City Clerk President
July 26, 1993
CORSENTINO
rson
the City Council
FIRE AND POLICE PENSION ASSOCIATION
BOARD OF DIRECTORS
RESOLUTION NO. 2 -1993
WHEREAS, pursuant to the authority granted in C.R.S., 31 -30- 1006.5 (Cum. Supp. 1992), the
Board of Directors of the Fire and Police Pension Association ( "the Board ") has proposed certain
modifications to the pension benefits and the age and service requirements for pension benefits set forth
in part 10, article 30, title 31, Colorado Revised Statutes, as amended, with respect to the members of
the statewide defined benefit plan ( "the plan"), and
WHEREAS, the proposed modifications to the plan are set forth in the Board's Resolution No.
1 -1993, adopted by the Board on April 28, 1993, and
WHEREAS, FPPA rule 305.02(b) requires that prior to an election by employers and members
on any proposed modification to the plan, the Board must provide employers with a certification that the
proposed modifications comply with the requirements set forth in C.R.S., 31- 30- 1006.5 (Cum. Supp.
1992),
NOW, THEREFORE, BE IT RESOLVED, that the Board hereby certifies that the proposed
modifications to the plan set forth in Board Resolution No. 1 -1993, comply with the requirements set
forth in C.R.S., 31- 30- 1006.5(a), (b), (c) and (f) (Cum. Supp. 1992).
IN WITNESS WHEREOF, I have hereunto set my hand on th' ay of April, 1993.
Randy"L. Gu tafso , Board Chairman
Fire and Po cu
Pefision Association
STATE OF COLORADO )
ss
COUNTY OF ARAPAHOE )
The foregoing instrument was acknowledged before me this 28th day of April, 1993,
by Randy L. Gustafson, Board Chairman of the Fire and Police Pension Association, a political
subdivision of the State of Colorado.
WITNESS my hand and official seal.
My commission expires:
FIRE AND POLICE PENSION ASSOCIATION
BOARD OF DIRECTORS
RESOLUTION NO. 1 -1993
WHEREAS, C.R.S., 31- 30- 1006.5 (Cum. Supp. 1992), provides that the Board of Directors of
the Fire and Police Pension Association ( "the Board ") may modify the pension bene-fits and the age and
service requirements for pension benefits set forth in part 10, article 30, title 31, Colorado Revised
Statutes, as amended, with respect to the members of the statewide defined benefit plan ( "the plan"), and
WHEREAS, C.R.S., 31- 30- 1006.5 (Cum. Supp. 1992), sets forth certain conditions which must
be met before the Board may adopt any modification to the plan, including approval by at least sixty -five
percent of the active members of the plan and more than fifty percent of the emplovers having active
members covered by the plan, and
WHEREAS, pursuant to the authority granted in C.R.S., 31 -30- 1006.5(3) (Cum. Supp. 1992),
the Board has adopted Rules establishing the procedure which the Board will follow with respect to its
adoption of any modification to the plan, and
WHEREAS, FPPA Rule 305.01 requires that the Board provide a copy of the lan;.iage of each
proposed plan modification to employers for distribution to each member of the plan,
NOW, THEREFORE, BE IT RESOLVED, that the Board hereby proposes the following
modifications to the plan which shall he submitted for approval to plan employers and plan members
pursuant to the provisions of C.R.S., 31 -30- 1006.5 (Cum. Supp. 1992) and FPPA Rule 305.
Amendment One. The provisions of section 31- 30- 1006(1)(a), Colorado Revised Statutes, as
amended, are modified as follows:
Any member who has completed at least twenty -five years of active
service and has attained the age of sixty years shall be eligible for a
normal retirement pension, but any member shall be eligible for a normal
retirement pension at any time after attaining the age of fifty -five years
if his employer has certified to the board that there is no available
position for which such member is qualified. The annual normal
retirement pension shall be two percent of the average of the member's
highest three years' base salary multiplied by the member's years of
service, not to exceed twenty -five. IN ADDITION TO THE ANNUAL
NORMAL RETIREMENT PENSION SET FORTH IN THIS
PARAGRAPH (a), A MEMBER SHALL RECEIVE TWO PERCENT
OF THE AVERAGE OF THE MEMBER'S HIGHEST THREE YEARS'
BASE SALARY FOR EACH YEAR OF SERVICE WHICH THE
MEMBER ACCRUES AFTER HAVING SERVED AT LEAST
TWENTY -FIVE YEARS AND ATTAINING THE AGE OF SIXTY
YEARS OR SUCH LESSER AGE AS THE BOARD MAY SET
PURSUANT TO PARAGRAPH (b) OF THIS SUBSECTION (1).
HOWEVER, IN NO EVENT SHALL A MEMBER RECEIVE MORE
THAN SEVENTY PERCENT OF THE AVERAGE OF THE
MEMBER'S HIGHEST THREE YEARS' BASE SALARY AS A
RETIREMENT BENEFIT. THE ADDITIONAL BENEFIT PROVIDE
yens of credited service may leave his contributions with the fund.
When the inactive member attains age sixty -five, he shall be eligibie to
re'.:eive an annual vested benefit equal to two percent of his average
hi2h.est three years' salary multiplied by his years, not to exceed twenty -
five, of active service. Any such member shall be eligible to receive the
applicable vested benefit as provided in this section or to make an
e!ection for a reduced pension in the manner provided in section 31 -30-
1006(4). All the provisions of section 31- 30- 1006(4) shall apply to said
member; except that the benefits used to calculate the reduced benefits
shall be the vested benefit provided to the member under this section
rather than the retirement benefit provided in section 31 -30 -1006. The
member may not elect one of the options earlier than sixty days prior to
the commencement of vested benefit payments. In the event that an
inactive member who is eligible for vested benefits dies prior to the
commencement of his benefit payments, the fire and police pension
association shall refund the inactive member's contributions to his estate,
and no vested benefits shall be payable to the inactive member's
survivors or beneficiaries.
Amendment Five. The provisions of section 31- 30- 1011(2)(x), Colorado Revised Statutes, as
amended, are modified as follows:
In lieu of having his contributions returned as provided in paragraph (a)
of subsection (1) of this section, a member who has at least ten years of
credited service may leave his contributions with the fund. When the
inactive member attains age sixty -five, he shall be eligible to receive an
annual vested benefit equal to two percent of his average highest three
years' salary multiplied by his years, not to exceed twenty -five, of active
service. Anv such member shall be eligible to receive the applicable
vested benefit as provided in this section or to make an election for a
reduced pension in the manner provided in section 31 -30- 1006(4). All
the provisions of section 31 -30- 1006(4) shall apply to said member;
except that the benefits used to calculate the reduced benefits shall be the
vested benefit provided to the member under this section rather than the
retirement benefit provided in section 31 -30 -1006. The member may not
elect one of the options earlier than sixty days prior to the
commencement of vested benefit payments. In the event that an inactive
member who is eligible for vested benefits dies prior to the
commencement of his benefit payments, the fire and police pension
association shall EITHER refund the inactive member's contributions to
his estat ---d fie rested beneriEs —she l be pa, e th
me .I ems begeAei. -ies. OR PROVIDE SURVIVOR
BENEFITS TO THE MEMBER'S DESIGNATED BENEFICIARY,
PAYABLE WHEN THE MEMBER WOULD HAVE BEEN ELIGIBLE
TO RECEIVE A VESTED BENEFIT UNDER THIS SUBSECTION (2),
WHICHEVER IS GREATER. THE SURVIVOR BENEFITS SHALL
BE CALCULATED AS IF THE MEMBER HAD SELECTED OPTION
VPPA Official Statewide Pension Plan Employer Ballot,
Disclosure Statement and Comparison
FIRE & POLICE PENSION ASSOCIATION Between Current Plan and Proposed Changes
DISCLOSURE STATEMENT
The purpose of this document is to explain the proposed modifications to be made to the Statewide New Hire Plan, which FPPA
is submitting for member and employer approval.
0 Five plan amendments are being proposed to members and employers.
• Each amendment will be voted on separately for the purposes of the election.
• Each amendment must be approved by at least 65 0 6 of the active plan members and 50 96 of the employers for passage.
* Any of the amendments that are approved will become effective January 1, 1994.
The costs attributable to the adoption of these amendments will not increase the required contributions to the plan.
Rather, the costs will be absorbed through reductions in future allocations to each member's SRA account.
SRA allocations are calculated annually, based on each year's actuarial study, and are rounded down to the nearest 1/2%.
All calculations are shown as percentages, based on members' total base salaries.
For 1993, based on the 1992 actuarial study, the SRA allocations If all of the amendments had been approved effective
were calculated as follows: January 1, 1993, costs would have been calculated as
follows:
Contributions from Employees:
8.000%
8.000%
Contributions from Employees:
8.000 °'0
Contributions from Employers:
16.000 °'o
Contributions from Employers:
8.000%
Total Contributions:
Total Contributions:
16.000%
Cost of defined benefits under the plan
per 1992 actuarial study:
10.240%
Cost of defined benefits under the plan
Contributions available for SRAs:
5.760 °6
per 1992 actuarial study:
10.240
Cost of: Amendment One
0.000%
1993 SRA contribution allocation:
5.500%
Amendment Two
0.169%
0.239%
Amendment Three
Amendment Four
0.049 9 6
Amendment Five
0.052 °6
Total Cost of defined benefits under the Plan: 10.749%
Contributions available for SRAs: 5.251'6
1993 SRA contributions allocation: 5.00 °6
Since each plan amendment is being voted on independently, only the costs associated with the adopted amendments will be
added to the total "normal cost" of the defined benefits under the plan. The calculations in the above right -hand column are
based on the 1992 actuarial study rates. Actual SRA allocations to be effective January 1, 1994 will be calculated using the
"normal benefit" plan costs determined in the 1993 actuarial study, plus the cost of any amendments adopted.
Official Statewide Pension Plan Employer Ballot
INSTRUCTIONS FOR VOTING: If your municipality or special district employs BOTH firefighters and police officers covered
by the Statewide New Hire Plan, you are being supplied with TWO identical employer ballots. The governing body of your
municipality or special district should adopt separate resolutions for each group of employees, with each resolution expressing the
will of the governing body regarding each proposed amendment individually. AS AN EXAMPLE: It may be the will of the governing
body to vote "YES" on any amendment for its police officers, but to vote "NO" on the same amendment for firefighters. Indicate below
which group of employees this ballot represents. Attach a copy of the accompanying resolution to this ballot and return to FPPA along
with your certification of election results.
city or special district circle one
This ballot represents the will of the governing body of regarding its ( firefighters police officers )
employed by said city or special district and covered by the Statewide New Hire Pension Plan.
Amendment One
Granting an additional 2%
per year benefit, to a
maximum of 70% of salary,
for every year worked after
the member is eligible for
normal retirement benefits
(25 years of service and
attainment of age 55). This
benefit would be available for
full years of service credited
after January 1, 1994.
Amendment Two
Reducing the age from which
the early retirement penalty
is calculated from 60 years
to 55 years of age (to
coincide with the age used
for normal retirement).
A member must complete at
least 25 years of service and
have reached age 55 to be
eligible for a normal retire-
ment benefit. His benefit will
be 2 0 /o of the average of his
highest three years' base
salary, multiplied by years of
service, not to exceed 25.
Thus, the maximum benefit is
50% of salary.
Once a member has com-
pleted at least 30 years of
service, or is at least age 50,
he is eligible for an early
retirement. His benefits will
be those described above for
normal retirement, reduced
by one -half of one percent
per month for each month
the member is less than age
60.
If the average of a member's
highest three years' base
salary is $30,000, with 25
years' service (at age 55) the
member's benefit would be:
$30,000 x 2 %b x 25= $15,000
per year. With 27 years'
service at age 57, a member
would receive the same
benefit, since the maximum
number of years that may be
used in the calculation is 25.
The member has completed
25 years of service, and the
average of his three highest
years' base salary is $30,000,
and he chooses an early
retirement pension would be
$15,000 (the normal pension)
minus 1/2% per month for
eight years, (1/2% x 96
months x $15,000= $7,200
reduction), for an annual
benefit of $7,800.
While the member in the
previous example would
receive the same benefit at
age 55 with 25 years of
service, the member with 27
years of service and age 57
would receive a greater
benefit, calculated as follows:
$30,000 x 2% x 27= $16,200
per year ($1,200 increase
over benefit under current
plan).
The member in the previous
example would receive a
greater benefit, since his
early retirement reduction
would be less. His benefit at
age 52 with 25 years of
service would be: $15,000
(the normal pension) minus
1/2% per month for three
years (1/2% x 35 months x
$15,000 = $2,700 reduction),
for an annual benefit of
$12,300 - an increase of
$4,500 per year over the
previous example.
0.000%
(No Cost)
0.169%
Amendment
One
❑ YES
❑ NO
Amendment
Two
❑ YES
❑ NO
Amendment Three
Allowing a - pop -up benefit
for a re£red member who
has selected an "Option 1"
or 'Option 2 joint and
survt,or benefit to cover a
beneficiary . If the beneficiary
predeceases the member
and the member does not
designate an alternative
beneficiary. then the benefits
would "pop -up" or revert to
the full unreduced retirement
benefit. This provision
applies to all types of
retirements -- early, deferred,
vested and normal.
Amendment Four
Reducing the current 10 -year
vesting requirement to five
years.
Amendment Five
Alters benefits available
when a vested retiree dies
prior to the commencement
of his benefit. Would provide
survivor benefits equal to the
greater of a refund of the
member's contributions, or a
1005; survivor annuity
beginning when the member
would have attained age 55.
Member receives the same
reduced (Option 1 or 2)
1 benefit amount. even if his
designated beneficiary dies
first
A member who terminates
with 10 or more years of
service may elect a vested
retirement. A member with
less than 10 years of service
has only the option of taking
a refund of his contributions,
plus 5:% as interest.
If a member chooses to take
a vested retirement and dies
before actually drawing the
benefit, his estate would
receive any money remaining
in the member's SRA
account, as well as a refund
of contributions (w,,thout
interest).
A member is age 55, has a
53- yea -old beneficiary
(spouse), and a normal
retirement of S15.000 per
year- Under Option 1, the
reduction factor would be
86 46'0, which would provide
a benefit to both the member
l i and his survivor (after his
death) of 512,969 per yer_ If
his beneficiary dies first, the
member would continue to
receive the reduced benefit of
512,969, in spite of the fact
that no survivor benefits
would ever be paid.
A member who had 10 years
of service and an average
three highest years' base
salary of $30,000 would
receive a benefit of: 530,000
x 2% x 10 = S6,000 per year
payable at age 55. He would
also then have immediate
access to the balance in his
SRA account. A member with
less than 10 years of service
could only get a refund of his
contributions (plus 5% as
interest), and would forfeit his
rights to the balance in his
SRA account.
Regardless of what the
member's vested benefit
would have been, his estate
receives only the funds in his
SRA, plus a refund of his
contributions
The same member in the
previous example would have
his bene €t Increar,ed from
S12,969 rack to the
unr dj ced benefit of $15.000
in the e :e ^t tat desig-
nated beneficiary was to die
before him With the pro-
posed change, a member is
only - paying" for the survivor
benefit by ta4'ng less during
his lifetime as long as there is
a bene'-ciary alive to collect
the benefit after his death.
A member with five or more
years of service could elect a
vested retirement. A member
who had an average three
years' highest base salary of
530,000 would receive a
benefit of: S30,000 x 2% x 5
=$3,000 per year, payable at
age 55. He would also then
have immediate access to
the balance in his SRA
account.
A member whc has com-
pleted 14 years of service
and has an average three
years highest base salary of
S30,000 would be eligible for
a vested benefit of $30,000 x
2% x 14 = S8.-100 per year,
payable at age 55. If he died
prior to drawing the benefit,
the following would be paid
the greater cf (1) a refund of
his contrbubons to his estate
or (2) a 100 survivor
benefit (of 57.263 per year if
spouse was'wc years
younger), payable when the
member would have reached
age 55 In ether case, any
1' money remaining in the
member's SRA account is
paid out to the estate.
0.2395ti
I
Amendment
Three
I
YES
N 0
0.049%
Amendment
Four
YES
NO
0052%
Amendment
Five
YES
NO
M E M O R A N D U M
TO: Tom Jagger, City Attorney
FROM: Steve Bolton, Civil Service Administrator -A e
DATE: July 14, 1993
RE: FPPA Statewide New Hire Pension Plan Modification Election
Enclosed are the certified results of the recent FPPA retirement
plan modification elections. Separate results have been tallied for
both the Police and Fire "New Hire" member groups.
As you are aware, the Civil Service Commission has been charged with
certifying the results of the member elections and the employer vote
(i.e. City of Pueblo) on or before July 30, 1993 to FPPA.
Please provide me with the results of the employer vote (as soon as
it is possible to do so) so I may forward it (and the member
elections vote) to FPPA on or before the deadline date. Thanks.
POLICE MEMBERS
EMPLOYER'S CERTIFICATION OF MEMBER ELECTION RESULTS
This certification concerns the member election conducted by
Civil Service Commission
City of Pueblo
(Insert Name of Employer)
regarding proposed modifications to the pension benefits and the age and service requirements
for pension benefits as set forth in Fire and Police Pension Association Board of Directors
Resolution No. 1 -1993. Those persons voting in the election are members of the statewide
defined benefit plan provided in part 10, article 30, title 31, Colorado Revised Statutes, as
amended.
The undersigned certifies that he /she is an authorized representative of the employer named
above and further certifies as follows:
(i) The results of the vote by the members of the statewide defined benefit plan who are
employees of the employer named above are as follows:
Votes For
Votes Against
(including eligi-
ble members
who failed to
vote)
Amendment One 43
28
Amendment Two 43
28
Amendment Three 42
29
Amendment Four 40
31
Amendment Five 41
30
(ii) Attached hereto is a roster of those members who received ballots to vote for or against
the proposed modifications, along with the signatures of those members who actually
submitted ballots.
(iii) To the best of the employer's knowledge, all eligible members timely received a copy
of the language of the proposed plan modifications, a plain language summary of the
proposed plan modifications including the proportionate amount of current contributions
necessary to fund the modifications, and a member election ballot.
(iv) The election was conducted in a fair and impartial manner.
Date: July l.3 1993.
State of Colorado 1
County of b
�
ss.
POLICE MEMBERS
*6 atfre of Authorize epresentative
Vice - Chairman, Civil Service Commis
Title
City of Pueblo
Employer
The foregoing certification was acknowledged before me this 12 day of
,1993, by Robert L. Hawkins
WITNESS my hand and official seal.
Notary Putic
My commission expires: /d -
FIRE MEMBERS
EMPLOYER'S CERTIFICATION OF MEMBER ELECTION RESULTS
This certification concerns the member election conducted by
Civil Service Commission
City of Pueblo
(Insert Name of Employer)
regarding proposed modifications to the pension benefits and the age and service requirements
for pension benefits as set forth in Fire and Police Pension Association Board of Directors
Resolution No. 1 -1993. Those persons voting in the election are members of the statewide
defined benefit plan provided in part 10, article 30, title 31, Colorado Revised Statutes, as
amended.
The undersigned certifies that he /she is an authorized representative of the employer named
above and further certifies as follows:
(i) The results of the vote by the members of the statewide defined benefit plan who are
employees of the employer named above are as follows:
Votes For
Votes Against
(including eligi-
ble members
who failed to
vote)
Amendment One 43
26
Amendment Two 31
3 8
Amendment Three 37
32
Amendment Four 23
4 6
Amendment Five 37
32
(ii) Attached hereto is a roster of those members who received ballots to vote for or against
the proposed modifications, along with the signatures of those members who actually
submitted ballots.
(iii) To the best of the employer's knowledge, all eligible members timely received a copy
of the language of the proposed plan modifications, a plain language summary of the
proposed plan modifications including the proportionate amount of current contributions
necessary to fund the modifications, and a member election ballot.
(iv) The election was conducted in a fair and impartial manner.
FIRE MEMBERS
Date: Julv 13 , 1993.
na re of Authorized Representative
Vice - Chairman, Civil Service Commiss
Title
City of Pueblo
Employer
State of Colorado
ss.
County of _ / / C) )
-ce
The foregoing certification was acknowledged before me this day of
u ,1993, by Robert L. Hawkins
WITNESS my hand and official seal.
J
Notary P61blic
My commission expires: /D - 51 -ZZ