O97-49ORDINANCE O97-z~'
AN ORDINANCE OF THE CITY COMMISSION OF THE
CITY OF BOYNTON BEACH, FLORIDA AMENDING
CHAPTER 18, PENSIONS AND RETIREMENT BY
CREATING A NEW ARTICLE IX ENTITLED, EARLY
RETIREMENT INCENTIVE PROGRAM; PROVIDING
REQUIREMENTS FOR PARTICIPATION IN THE EARLY
RETIREMENT INCENTIVE PROGRAM; PROVIDING
CRITERIA FOR QUALIFICATION FOR EARLY
RETIREMENT; APPROVING AND ISSUING A STATEMENT
OF ACTUARIAL IMPACT; APPROVING THE FORM OF
AGREEMENT FOR PARTICIPATION IN THE EARLY
RETIREMENT INCENTIVE PROGRAM; DIRECTING CITY
ADMINISTRATION TO FURNISH A COPY TO THE
DIVISION OF INSURANCE; PROVIDING FOR
SEVERABILITY, CONFLICTS AND AN EFFECTIVE DATE.
WHEREAS, the City Administration has formulated an Early Retirement
Incentive Program, available for participation by full-time employees, who, on
January 1, 1998, will be within three (3) years of normal retirement and
WHEREAS, the City Commission has evaluated an actuarial study
prepared by Gabriel, Roeder & Smith and dated July 31, 1997 and has determined
that that study supports the feasibility of the Early Retirement Incentive Program
and
WHEREAS, the City Commission wishes to formally adopt the Early
Retirement Incentive Program, having previously been reviewed and approved
the program at a public meeting of the City Commission held September 2, 1997.
NOW THEREFORE, BE IT ORDAINED BY THE CITY COMMISSION OF
THE CITY OF BOYNTON BEACH, FLORIDA:
Section 1. The foregoing whereas clauses are true and correct and
constitute the findings of the Commission necessary to support this Ordinance.
Section 2. There is hereby created a new Article IX entitled, Early
Retirement Incentive Program, as follows:
Sec. 18-223 Creation of Early Retirement Incentive Program
and Eligibility
The City Commission hereby creates an Early Retirement Incentive
Program for full-time City employees who are currently members of the classified
service, as that term is defined in Article IV-A of the City Charter, and who on
January 1, 1998 will be within three years of normal retirement.
Sec. 18-224 Requirement for Agreement for Participation.
Any full-time City employee who on January 1, 1998 is within three years of
retirement is eligible to participate and must execute an Agreement for
Participation and Waiver no later than November 5, 1997 designating a last date of
employment not later than January 1, 1998.
Sec. 18-225 Benefit Provided.
A. Eligible employees who elect to participate will receive:
(1)
Three years added to years of service time and/or years of
age credited to the employees accrual of service time or years
of service. In no event will the credited time of service or
years exceed three years total.
(2)
The City of Boynton Beach will continue to pay health and
dental insurance at prevailing single coverage premium rates
for all employees who elect to participate, through December,
2000.
(3)
When necessary to fully vest an employee in the police or fire
service for years credited pursuant to this incentive, but not
actually served or rendered, the retirement administrator and
the plan actuaries shall provide a benefit calculation factor for
such employee which, when applied, result in the employee
receiving the full retirement benefit set forth herein, without
offset or penalty.
Sec. 18-226 Statement of Actuarial Impact.
The City Commission adopts, issues and certifies as its own, the statement
of actuarial impact and analysis of the proposed Early Retirement System
prepared Gabriel. Roeder & Smith and dated July 31, 1997, a copy of which is
attached hereto as Exhibit '%".
Sec. 18-227 Deadline for Participation.
Eligible employees who elect to participate in the Early Retirement Incentive
Program must execute an Agreement for Participation and Waiver of Rights form
on or before 5:00 p.m. on November 5, 1997.
Sec. 18-228 Filing with Division of Management.
The City administration and the administrators of the retirement plans, in
accordance with the requirements of Chapter 112, Florida Statutes, and Rule 60T-
1.004, are directed to certify and furnish a copy of this Ordinance toqether with the
statement of actuarial impact referenced herein to the Department of
Management, Division of Insurance. The City administration and plan
administrators are authorized to make such supplemental filings with the Division
of Insurance as is necessary to effectuate this Early Retirement Incentive Plan.
Sec. 18-229 Authorization to Execute Agreements.
The City Commission authorizes the Mayor, City Manager and City Clerk to
execute Agreements for Participation In Early Retirement Incentive Program and
Waiver of Rights forms with eligible employees. A copy of the Agreement for
Participation is attached hereto as Exhibit "B".
Sec. 'i8-230 Approval of Forms.
The City Commission adopts and ratifies the Commencement Notice,
Acknowledgement of Receipt of Program Commencement Notice and Information
Fact Sheet, and Fact Sheet heretofore prepared by the City administration, copies
of which are attached hereto as Exhibits "C", "D". and "E" respectively. The City
Administration is authorized to modify these forms when modification is necessary
to facilitate the objectives of this Ordinance or when amendment is required to
conform the forms to requirements of state or federal law.
Section 3. All ordinances or parts of ordinances in conflict herewith
be and the same are hereby repealed.
Section 4. Should any section or provision of this ordinance or portion
hereof, any paragraph, sentence or word be declared by a court of competent
jurisdiction to be invalid, such decision shall not affect the remainder of this
ordinance.
Section 5.
Section 6.
passage.
FIRST READING this 2" day of October, 1997.
Authority is hereby granted to codify said ordinance.
This ordinance shall become effective immediately upon
SECOND, FINAL READING AND PASSAGE this o¢/ day of October,
1997.
ATTEST:
CITY OF BOYNT. ON_.BEA-6H, FLORIDA
Mayor ~ -
Vi~ Mayor
/~/_ ~/!_
~¢¢~nisSioner ·
issioner ~
AGREEMENT FOR PARTICIPATION IN EARLY
RETIREMENT INCENTIVE PROGRAM
AND
WAIVER OF RIGHTS
This Agreement For Participation in Early Retirement Incentive Program
(hereinafter Agreement) is entered into between The City of Boynton Beach,
Florida (hereinafter City) and
(hereinafter Employee) this .... day of ,1997.
WHEREAS, the City has announced an early retirement incentive program
which provides incentive benefits for participation; and
WHEREAS, the City has prepared and distributed a Program Commencement
Notice and a Information Fact Sheet setting forth the terms and conditions for
participation in the Early Retirement Incentive Program; and
WHEREAS, the Employee has been provided with a copy of the Program
Commencement Notice and Information Fact Sheet and has had the opportunity
to review the terms and conditions for participation; and
WHEREAS, the Employee has been advised that the Employee has up to forty-
five (45) days in which to consider the terms and conditions of this Agreement,
and
WHEREAS, the Employee has acknowledged understanding of the benefits
associated with the Early Retirement Incentive Program, and
WHEREAS, the Employee has been advised to consult with an attorney prior to
the execution of this Agreement and has had such opportunity; and
WHEREAS, the Employee is eligible for participation in the Early Retirement
Incentive Program based upon the Employee's years of
Service and age;
NOW, THEREFORE, the City and the Employee, in exchange for the mutual
covenants expressed herein and which are derived from the creation of and
participation in the Early Retirement Incentive Program agree as follows:
All representations and statements set forth in the foregoing Whereas
clauses are true and correct and constitute material representations of
each party to the other.
The Employee agrees to participate in the Early Retirement Incentive
Program.
The last day of employment of Employee with the City of Boynton Beach
is
o
" 7.
The City will credit the Employee, who is within three years of normal
retirement, either three years to the employees time of service or age or
both so that a minimum criteria for normal retirement is satisfied.
Employee shall receive any payment for any unused annual leave and/or
sick leave in accordance with current City policy. This payout will be
made in three equal installments. The first installment will be on the
retirement date set forth in paragraph 2 above. The second installment
will be paid on December 1, 1998. The third installment will be paid on
December 1, 1999.
Employee must complete all termination clearance procedures
established by the City prior to the receipt of final payment from the City.
The City shall continue to pay medical coverage premiums for the
Employee until December 31, 2000. The medical coverage currently
includes dental coverage, but no representation is made that future
medical coverage packages will include dental coverage. The Employee
may continue participation in the medical plan offered by the City after
December 31, 2000, but such continued participation shall be at the sole
expense of the Employee. The current monthly premiums are as follows:
Health
Single coverage
Employee plus spouse
Employee plus children
Employee plus family
$161.78
$335.83
$311.56
$389.86
Dental
o
Single coverage
Family covera_ge
$ 20.23
$ 40.04
The Employee will be responsible for the payment of all premiums for
insurance coverage for family members other than the Employee. City
will deduct the premium for additional spouse, child or family coverage for
the month of retirement from the Employee's final pay check. Thereafter
monthly premium amounts for additional spouse, child or family coverage
will be deducted from Employee's monthly pension check. No notice will
be sent to Employee concerning payments for additional coverage.
This Agreement contains the entire understanding of the parties hereof
superseding all prior communications between the parties, whether oral or
written, and this Agreement may not be altered, amended, or modified or
otherwise changed, nor may any of the terms hereof be waived except by
written instrument executed by both parties.
10.
By countersigning below, Employee acknowledges that Employee
understands and agrees to this Agreement and that Employee has been
advised by the City to consult with an attorney regarding Employee's
rights and that Employee has had the opportunity to do so.
11.
Employee releases the City of Boynton Beach, Florida, its officers,
employees, trustees and agents, from and against, any and all liability or
causes of action arising out of the City's offer of an Early Retirement
Incentive Programs or Employee's decision to participate in the program..
12.
Employee acknowledges understanding of Employee's rights under the
Older Worker's Benefit Protection Act and the Age Discrimination and
Employment Act and waives any right or claim provided by either of those
Acts against the City.
13.
Employee agrees not to seek or accept reemployment with the City of
Boynton Beach except with written waiver approved by the City Manager.
14.
This Agreement may be revoked by the Employee for a period of seven
(7) days following execution of this Agreement. Thereafter, this
Agreement is irrevocable by Employee.
IN WITNESS WHEREOF, the City and the Employee execute and enter into this
Agreement.
EMPLOYEE
Witnesses as to Employee:
Employee Signature
(As to Employee)
STATE OF FLORIDA
COUNTY OF PALM BEACH
On this ~ day of
Notary Public of the State of
, 1997, before me, the undersigned
Florida, personally appeared
and whose name
is Subscribed to the within instrument, and he/she acknowledged that he/she
executed it.
WITNESS my hand
and official seal.
SEAL OF OFFICE:
NOTARY PUBLIC, STATE OF FLORIDA
.. Personally known to me or
~ Produced identification:
(Type of Identification Produced)
CITY OF BOYNTON BEACH
Mayor
City Manager
ATTESTED TO:
City Clerk
CITY OF BOYNTON BEACH
EARLY RETIREMENT INCENTIVE PROGRAM
COMMENCEMENT NOTICE
The City hereby announces an Early Retirement Incentive Program. This program is
available for participation by Full-Time Employees who, on January 1, 1998, will be
within three years of normal retirement. The City has prepared an Information Fact
Sheet which provides a detailed overview of the program. The City has prepared an
Agreement For Participation In Early Retirement Incentive Program and Waiver of
Bights form which interested Employees will be required to sign to participate in the
Program. Both the Information Fact Sheet and the form Agreement are available for
review and may be obtained from the Finance Department.
Eligible employees who wish to participate in the Early Retirement Incentive Program
must execute an Agreement for Participation and Waiver of Rights by 5:00 P.M. on
November 5, 1997.
DATED: September 19, 1997
CITY OF BOYNTON BEACH
EARLY RETIREMENT INCENTIVE PROGRAM
ACKNOWLEDGEMENT OF RECEIPT OF PROGRAM COMMENCEMENT
NOTICE AND INFORMATION FACT SHEET
The Undersigned, a current employee of the City of Boynton Beach, Florida,
acknowledges that he/she:
1. Was given a PROGRAM COMMENCEMENT NOTICE, INFORMATION FACT
SHEET, and AGREEMENT FOR PARTICIPATION IN EARLY RETIREMENT
INCENTIVE PROGRAM AND WAIVER OF RIGHTS form describing the Early
Retirement Incentive Program being offered by City of Boynton Beach.
2. Was advised that he/she may have rights which are protected under the Older
.~ -. Workers Protection Act or the Age Discrimination in Employment Act.
3. Was advised to consult with an attorney prior to executing an Agreement For
Participation in Early Retirement Incentive Program (Agreement).
4. Was advised that he/she may have up to forty-five (45) days to consider the
Agreement For Participation in Early Retirement Incentive Program.
5. Was advised that he/she may revoke his/her Agreement For Participation In Early
Retirement for a period of seven (7) days following execution of the Agreement.
of
IN WITNESS WHEREOF, I have hereunto set my hand and seal this
,1997.
day
Signed, sealed and delivered
in the presence of:
WITNESSES:
(Print Name)
(Print Name of Employee)
(Print Name)
(Print Name of Employee)
CITY OF BOYNTON BEACH
EARLY RETIREMENT INCENTIVE PROGRAM FACT SHEET
FACT SHEET
Based on the City's current staffing needs and requests of employees, the City is
offering a early retirement incentive program. Eligible employees are not
required to accept the offer and participate in the program.
WHO IS ELIGIBLE?
Any full-time Employee who, on January 1, 1998, is within three (3) years of
retirement. In order to participate, an eligible employee must execute an
Agreement for Participation and Waiver document, by 5:00 P.M. on November 5,
1997, designating a last day of employment not later than January 1, 1998.
HOW WILL IT WORK?
If you are eligible to participate in the program and elect to do so, you will
receive:
· Three (3) years added to your years of service time and/or years of age. In
no event will the additional years exceed three (3) total years. (General
Employees for example, i.e.: If you have 9 years of service and are age 61,
you would get 2 years added to service time and 1 year added to your age; if
you have 10 years of service and are age 62, 3 years would be added to
service time; For Police and Fire, 3 years would be added to service time as
there is no age requirement for your pension plan).
· The City of Boynton Beach will continue to pay health and dental insurance
at the single coverage rate for all employees who elect to participate in the
early retirement program through December, 2000.
IS THIS A ONE TIME OPPORTUNITY?
At this time the City does not anticipate offering this program again.
HOW LONG DO I HAVE TO MAKE A DECISION?
You will have 45 days from the date of formal notification, September 19, 1997,
to decide to accept or reject this offer. If you elect to participate by signing an
Agreement for Participation and Waiver, you will have an additional seven (7)
days following signing to notify the City that you revoke your decision to
participate.
SHOULD I SEEK LEGAL FINANCIAL ADVICE BEFORE I MAKE BY
DECISION?
Yes, you should seek the advice of legal and financial counsel before accepting
or rejecting this offer.
WILL BE REQUIRED TO SiGN ANY TYPE OF WAIVER TO ACCEPT THE
PLAN?
Yes, you will be required to sign a Agreement For Participation In Early
Retirement which includes a general release of all claims against the City and a
Waiver. A copy of the Agreement For Participation In Early Retirement is
available for your review.
CAN I REVIEW THE AGREEMENT, RELEASE AND WAIVER NOW?
Yes, the documents have been released and are available in the Finance
Department.
WHERE CAN I GET MORE INFORMATION?
You should contact any of the following individuals:
Diane P, eese, Finance Director (561) 375-6312
Barbara LaDue, Pension Administrator (561) 375-081
IMPLEMENTATION DATES:
OFFER oF PROGRAM
LAST DAY TO SIGN
AGP,EEMENT TO PARTICPATE
LAST DAY OF EMPLOYMENT
September 19, 1997
November 5, 1997
January 1, 1998
ity of Boym:w Beach Pension Plans for Ge:t#'al Employees,
.Subject:
'--.:-.~_Submitted To:
Police Officers and Firefighters
Supplemental Actuarial Report
Fiscal Impact of Proposed Early Retirement Incentive Programs
Boards of Trustees Attn: Barbara LaDue, Pension Administrator
Submitted By:
Brad L. Armstrong, ASA, EA and J. Stephen Palmquist, ASA, EA
Gabriel, Roeder, Smith & Company
Date: July 31, 1997
BACKGROUND
We have' determined the first year dollar impact of four proposed early retirement incentive programs on
the City's computed annual contribution and covered payroll.
The current normal retirement eligibility conditions are:
General Employees
attained age 62 years or older and has 10 or more years of credited service; or
· attained age 55 years or older and has 25 or more years of credited service; or
· 30 or more years of credited service regardless of age.
Police Officers and Firefighters
· 20 years of credited service regardless of age.
The four alternative early retirement incentive programs are:
1) Give 3 years of age and credited service to all members within 3 years of normal
retirement eligibility as of 10/1/97, who retire within a short window period.
2) Give 3 years of age and credited service to all members within 3 years of normal
retirement eligibility as of 1/I/98, who retire within a short window period.
3) Give X* years of age and credited service to all members within 3 years of normal
retirement eligibility as of 10/1/97, who retire within a short window period.
4) Give X* years 'of age and credited service to all members within 3 years of normal
retirement eligibility as of 1/1/98, who retire within a short window period.
Except as otherwise noted, the data, methods and assumptions used in this report are the same as the
data, methods and assumptions used for the September 30, 1996 annual actuarial valuations.
The following page is included to provide a context for the results that follow and to aid in
understanding that the first year impact is not necessarily representative of all future years.
* X represents the number of future years until a member's projected earliest eligibility for normal
retirement, if any.
GABRIEL, ROEDER, SMITH & COMPANY - t-
Illustration of the Relationship Bet~veen
Increases in Retirement Plan Costs
and Net Payroll Savings
Resulting from an Early Retirement Window
An employer offering retirement enhancements during a window period will generally incur
additional retirement costs. These are often offset by a combination of (i) a reduction in the
number of active employees, (ii) lower pay levels of replacement employees, or (iii) a reduction
in other fringe benefits for replacement employees. Employees leaving during the window period
would eventually have retired anyway. Therefore, the real payroll savings gradually declines over
the period between the date of the window and the date the last retirement among the window
group would have otherWise occurred. The timing of those "normal course" retirements is not
knowable with precision, but the pattern may be illustrated as follows:
Annual $
Othe.r payroll
sawngs
Increase in
~ ,~'/ retirement syst
5
Years After Window Opening
IO
(This graph is for illustrative purposes only. Your experience may vary).
If the window program is successful, the cumulative payroll savings will substantially eXceed
increased retirement system costs.
Amortization of Window Liabili _ty Increases. Increases in retirement system liabilities associated
with window programs are generally amortized over a period of years. The graph illustrates the
declining nature of other payroll savings due to eventual competitive and/or contractual pressures.
A reasonable match between the amortization period for window liabilities and the likely period
of other payroll savings is important in evaluating the potential value of a program. What period
provides the best measure? There is no single correct answer. In this valuation, aggregate
liability increases were amortized in accordance with each Plan's funding policy.
GABRIEL, ROEDER, SMITH & COMPANY -2-
As you will see from the following tables, the net effect on the City's budget if all those eligible were
to retire would be substantial. Of course, we would not expect every eligible member to retire. If half
were to retire, for example, we would expect roughly half the savings, or less because members whose
pension is increased by the highest margin are the most likely to retire under the ERIP.
Another matter to keep in mind is that all financial aspects have not been considered in our analysis.
For example, a reduction in payroll would also cause a reduction in fringe benefits and the City's
Social Security payments. We leave it to you and other City officials to examine the full effects of
this proposal.
For the purpose of these valuations, we assumed that all members retiring under the ERIP would be
replaced at salaries provided by Diane Reese, Finance Director. No other active member salaries
would be affected in the case of general employees. However, for police and fire, it was assumed that
.. 'there would be a number of promotions equal to the number retiring. Each such promotion would
result in a pay increase of 5%.
Any increases in unfunded actuarial accrued liability (UAAL) are financed over a 30 year period. The
30 year period is the same 30 year period used in the September 30, 1996 annual actuarial valuation to
amortize UAAL for changes from amendments.
It is important to note that these results are only applicable if applied for a limited window period.
Providing a similar early retirement provision for all future retirements would increase costs
considerably.
GABRIEL, ROEDER, SMITH & COMPANY -3-
m