1992-10-26 Regular Meeting - Laserfiche WebLink

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e . PROPOSED RETIREMENT BENEFITS I) The City should pass an ordinance providing for updated service credits and annuity increases. This would benefit those retirees who are receiving a monthly annuity check and would also show current employees that the City not only takes care of them now, but is planning ahead for their retirement years. There is also a revision to the Act that would allow these updated service credits and annuity increases to be automatic each year so that a new ordinance would not have to passed on an annual basis. The City's contribution rate for 1993 has been reduced from 9.38% to 8.80%. Adoption of the above recommendation would decrease the rate to 8.77%. This decrease is made possible by a new provision that allows a 25 year amortization of the additional cost. Using current payroll figures, the City's contribution, at 8.77%, would be approximately $52,500 per month or $630,350 per year, an annual reduction of $77,650. Please note that although the City's monthly contribution would be reduced, the amortization period is extended from 21 years to 25 years. Also, if the City adopts the automatic Updated Service Credits and Annuity increases, the amortization period would return to 25 years each year. 2) Pass a second ordinance allowing current employees to buy back former service credit. It is unknown what cost impact this would have on the City. All eligible employees would not necessarily be in a fmancial position to buy back forfeited service, but it would be available to them if they so desire.