HomeMy WebLinkAboutDocumentation_Pension Public Safety_Tab 07_11/05/2007EXCERPT FROM MINUTES OF REGULAR TEQUESTA VILLAGE COUNCIL
MEETING OF 10111/07:
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4. Presentation by Steve Palmquist, Gabriel Roeder, Smith ~
Company regarding the possibility of reducing firefighter
contributions from 6,1% back to 5%.
Mr. Palmquist apologized that he had not attended last month because of an
error on his calendar. Mr. Palmquist presented a proposed change to the Police
and Firefighters Pension Plan, explaining the firefighters currently paid 6.1 % of
their pay out of their own pockets into the pension plan and the police paid 5%
out of their own pockets into the pension plan. The Pension Board had
proposed a plan to reduce the firefighters' contribution of 6.1 % to 5%--the same
rate paid by the police officers. Mr. Palmquist referred to the Supplemental
Actuarial Report which he had provided, explaining that under Florida Statutes
175 and 185 the firefighters and police received revenue from the State of
Florida, which was a tax on casualty and property insurance written within the
Village limits. The firefighters were now receiving revenue from the State that
exceeded the amount the Village was allowed to take credit for against their
contribution; under State rules the only way that money could be used was to
provide more benefits for the firefighters. The request by the firefighters to
reduce their contribution to 5% would be such a benefit, since it was reducing the
amount the firefighters would have to pay in contributions. The increase in
• annual cost associated with this change was $7,000; the amount the Village
could take credit for would increase that same $7,000, making the contribution
amount from the Village unchanged. In other words, this proposal would be
financed by Chapter 185 revenue.
Mayor Humpage commented the Village was about to enter into negotiations and
this could be a negotiable item. Mr. Palmquist advised that was correct, and he
was not pushing for this one way or the other-he was only providing
information. Mayor Humpage commented this was really anon-actionable item
tonight. Council Member Turnquest noted in 2005 the firefighters had requested
their contribution rate be increased from 5% to 6.1 %, and asked how often this
was going to happen and stated he did not like an up-and-down scenario. Mr.
Palmquist commented the firefighters had asked for a benefit which they had
funded through their contributions and normally the rate did not change from year
to year, but he was not privy to the thinking that led to the request to reduce back
to 5%. Council Member Turnquest commented it seemed when it was not in
their favor they wanted to change the rate. Mr. Palmquist advised now they had
the State revenue to pay for this and the only way to tap into that extra revenue
was to provide another benefit to the firefighters. Council Member Paterno
referred to Mr. Palmquist's report and asked why the figures were as of 2005; Mr.
Palmquist explained that was the date of the last actuarial evaluation and another
one would be done as of October 1, 2007. Council Member Paterno also noted
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return on investment was less than the 8% target; and salary increases during
the last two years were a little more than 6%, so he believed the assumptions
• would. be found incorrect when a new evaluation was done, and he believed it
would cost the Village more money. The assumptions made in 2005 for this
pension fund had not materialized, and this fund had not done as well as the
General Employees Pension Fund, which had performed better than expected.
Council Member Paterno also stated he believed this was a negotiable item.
Council Member Amero agreed this was a negotiable item; and expressed
concern the calculations came out perfectly with zero increase in Village
contributions. Mr. Palmquist explained that was because the baseline for State
revenue had been increased by the amount of the cost increase, which was the
way the State required them to do this exercise, and there was enough State
revenue to pay for it. Vice Mayor Watkins asked if this would continue into the
future, to which Mr. Palmquist responded in both 2006 and 2007 the State
revenue amount had been larger that it had been in 2005. There was no
guarantee of the amount of State funds in the future, but for firefighters it was tied
to property insurance; for police it was tied to casualty insurance. Mayor
Humpage stated he wanted to wait, thanked Mr. Palmquist for his presentation,
and advised that a decision would be made on this soon.
END OF EXCERPT
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