SPECIAL CIVILIAN PENSION BOARD

A Special Civilian Pension Board meeting was held on January 16, 2008 at 1:36 p.m. with Councilman Hogan presiding. Members present were Mr. McGiffin, Mr. DePrima, Mrs. Mitchell, Mrs. Rigby, Mr. Lucas, and Mrs. Braun. Others present were Mr. Szyjka, Mrs. Hawkins, Mrs. McDowell, and Mrs. Clendaniel.

AGENDA ADDITIONS/DELETIONS

Mr. Lucas moved for approval of the agenda, seconded by Mrs. Rigby and unanimously carried.

DISCUSSION - ALTERNATIVES TO THE STANDARD ACROSS THE BOARD PENSION COLA

During their Regular Meeting of November 21, 2007, members discussed alternatives to the standard across the board pension cost of living adjustment (COLA).

Referring to the Pension Board Minutes of January 19, 1988, Mr. Lucas reminded members that the Board directed that the question of retiree increases be an automatic agenda item during the month of January for an annual review for consideration of a possible increase for retirees of the Civilian Pension Plan. He noted that during the past few years, this consideration has been delayed and as a result, there has been concern relayed by members of City Council when the matter is presented to them during the budget review. In order to be a part of the budget process, he stated that members of the pension plan are requesting the establishment of a standing agenda item during the month of January to discuss a COLA for retirees.

Responding, Mr. DePrima explained that in January, no budget figures are known and as a result, he could never support a COLA. He also questioned the role of the Pension Board in respect to recommending a COLA. Mr. DePrima advised members that since 1988, there has been another Pension Plan (Deferred Compensation) established and questioned the role of the Pension Board in regards to benefits for these retirees.

Mr. Lucas stated that when action regarding a COLA has been delayed until the budget has been prepared, the response of the City Manager has been that funds have already been allocated for the current budget. Responding, Mr. DePrima questioned if the role of the Board is to make a budget recommendation or is it to set a COLA based on statistics.

Mrs. Mitchell explained that in previous years, a COLA was recommended without giving consideration to its impact. Members are now involving the Actuary in order to avoid adding to the liability.

Responding to Mr. Hogan, Mrs. Mitchell stated that not all of the information requested by members had been obtained since this meeting was originally scheduled to be held in February.

Mrs. Hawkins, Human Resources, relayed concern that if the Pension Board grants a COLA to the retirees of the Defined Pension Plan, members of the Deferred Compensation Plan will question their entitlement to a COLA. Mrs. Mitchell explained her opinion that there are two (2) distinct separate pension plans. There is a difference between a defined contribution plan and its intent and a defined benefit plan. She advised members that defined benefit plans do sometimes include COLA’s; however, defined contribution plans do not include COLA’s since the investment earnings is considered the COLA.

Mr. DePrima stated that when new employees are given the option to become a member of the General Pension Plan or Deferred Compensation Plan, they are not advised that the members of the General Pension Plan may receive COLA’s which are not provided to the members of the Deferred Compensation Plan.

Mr. Hogan suggested that members obtain a clear understanding of the powers and duties of the Civilian Pension Board. Members were advised that there have been legal opinions issued regarding this matter. Noting that there is ambiguity between the powers and duties of the various Pension Boards, Mr. DePrima suggested an ordinance amendment to include consideration of a COLA by the Pension Board.

Mr. Hogan suggested that action be deferred on this matter and requested that members be provided those sections of the Charter and Code relative to the City’s Pension Plans, as well as any legal opinions and other pertinent information, for their review to be considered at a later time.

Responding to Mr. Lucas, Mr. Hogan stated that members will further discuss the issue regarding the annual January review of a COLA during their February 20, 2008 meeting. Mr. DePrima requested that a legal opinion be obtained regarding the duties and responsibilities of the Board and provided to members for their review during the February 20, 2008 meeting.

COLA REQUEST FOR 2008

The civilian members of the Pension Board submitted a request that a COLA be granted to retirees effective July 2008.

Mrs. Mitchell provided and reviewed spreadsheets indicating retiree benefits (Attachment #1A) and alternatives for providing retirees with a COLA such as based on the number of years retired (Attachment #1B), age (Attachment #1C), and 65 years and older (Attachment #1D). She noted that the “hire date” included in the spreadsheets is actually the employee’s “retirement date”.

Referring to the opinion provided by City Solicitor Rodriguez, Mr. Hogan noted that members should be consistent and that COLA’s should be granted in a uniform fashion. Mr. DePrima indicated that by providing a COLA by way of a grant, monies of the Pension Fund would not be utilized, since the monies would be coming from the General Fund.

The civilian members indicated their support of the formula based on “age”. Mr. Hogan noted that there was no calculation based on the employees’ years of service.

Mr. Szyjka, Human Resources Director, advised members that as a result of research conducted, there are four (4) basic stipends or COLA’s provided to retirees by other organizations, as follows: 1) based on Consumer Price Index and over-funding; 2) disbursement of a “13^th month” check (extra check in the year); 3) based on years of service ranging from 10% to 20% increase; and 4) based on date retired ranging from 3.6% to .3% increase.

Mr. McGiffin relayed his concern with providing a benefit to retirees based on age, explaining his opinion that the benefit should be provided independent of any protected class. The majority of members felt that the age formula provided the best alternative and was most equitable for all retirees. It was suggested that the stipend be distributed either once a year (November) or twice per year (July and November). Mrs. Mitchell suggested that the stipend be provided to those retirees that retired prior to January 1, 2008.

Mr. Hogan suggested that members review the material provided and be prepared to make a recommendation during their February 20, 2008 meeting.

Mr. DePrima announced that Mr. Szyjka will be retiring February 1, 2008.

Mr. Lucas moved for adjournment, seconded by Mr. McGiffin and unanimously carried.

Meeting Adjourned at 2:49 P.M.

Respectfully submitted,

Kenneth L. Hogan

Chairman

KLH/TM/jg

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