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04-22-1975 Regular MeetingApril 22, 1975 Miami chores9ilIage F L o R 1 D A PENSION BOARD MEETING A breakfast meeting of the Miami Shores Pension Board was held on Tuesday morning, April 22, 1975 at Howard Johnson's Restaurant on 95th Street. The following were present: Absent were: Mayor Donald McIntosh James Condit Michael Franco Dean Miller William Davis David Peace Ann Vigneron Jim Glaid John Fletcher (who was out of town) The meeting began at 7:55 am. Minutes of the previous meeting were read and approved. A long discussion was held on transferring to the State Pension System, in the case of (1) the entire Village, (2) the Police Department and (3) other groups. Information was requested on a legal opinion as to the rights of individuals or groups to transfer at their option. A motion was made by Ann Vigneron and seconded by Mike Franco to accept the Wyatt Company's Actuarial Report dated March 28, 1975 and the Trustee's Investment Review Report as of March 31, 1975. The reports were accepted by all. A discussion was held on Robert Wylie's case, where he would work for Dade County, but remain in our Pension Plan. It was moved by Al Davis and seconded by Ann Vigneron to defer any recommendation or action by the Board until further information could be had regarding the entire case. A discussion was held on the Cost of Living proposal, which has been standing the last several meetings. It was moved by Mike Franco and seconded by Dean Miller that the Board defer any increases for cost of living. It was pointed out by Jim Condit that under present proposed legislation, the Plan may incurr unwanted additional expense shortly which would be beyond its control. Also, with other possible demands on the Plan, and recent market declines in securities, it was agreed by all to defer any cost of living increase. The meeting adjourned at approximately 9:00 am. Approved: Respectfully submitted Chairman Secretary • April 4, 1975 aiami jhores` illage F L OR ID A ALL PENSION BOARD MEMBERS There will be a breakfast meeting of the Pension Board at the Howard Johnson's Restaurant on 95th Street and N.E. 2nd Avenue on Tuesday, April 22nd at 7:45 am. The Agenda will include: 1. Acceptance of the Wyatt Company's Actuarial Reports dated March 28, 1975, and the Trustee's Investment Review report as of March 31, 1975. 2. Discussion on the State Pension System ( as per enclosed material) and costs of Police Transfer. 3. Cost of Living for Pensioners ( see notes and minutes on last meeting). 4. Transfer of Inspection Station personnel to State Pension System as of 2-21-75, (Fire Department personnel to join State Plan sometime later this year, at date of County take-over). Please be prompt, as the meeting should be rather short. JAMES A. GLAID Pension Secretary CHICAGO CLEVELAND DALLAS DETROIT FORT WORTH HONOLULU HOUSTON LOSANGELES THE yall COMPANY ACTUARIES AND EMPLOYEE BENEFIT CONSULTANTS 9595 NORTH KENDALL DRIVE MIAMI, FLORIDA 33156 (305) 274-8080 March 31, 1975 Mr. James A. Glaid Finance Director Miami Shores Village 10050 N. E. 2nd Avenue Miami Shores, Florida 33128 Re: Dear Mr. Glaid: MIAMI NEW YORK PHILADELPHIA SAN FRANCISCO WASHINGTON OTTAWA TORONTO Review of Pension Board Meeting Minutes Concerning Transferral of Police Officers to State Plan As you have requested, we have reviewed the above topic, and the following additional points of clarification are of- fered: f- fered: 1. As of the point in time that such a transfer would occur, the market value of the fund's assets would be determined. 2. After such value of assets is reduced for liabilities for current retirees, terminated vested employees, and active employees' contributions, the reduced asset value would be apportioned to the Police Officers on the basis of the ratio of their accrued liability to the total accrued liability for all active employees in the plan. 3. This ratioed portion of the assets plus the Police Officers' contributions would be the recommended amount to transfer to the State Plan on their behalf. If we may be of further assistance in this matter, please do not hesitate to contact us. 111 Sincerely, Wallace W. Wilson, A.S.A. Associate Actuary Tames Z-vh James L. Shaw, A.S.A. Associate Actuary WWW:JLS:rgb P'hami cShores9illage F L OR ID A Under our present pension plan 1975 - Village Contribution Under State Plan (1-1-75 computer report figures) Regular members 9% on $587,818 $80,462 52,904 X975 Special risk members ( on 10-1-75 rates) 13% on 339,196 44,095 $927,014 $96,999 If police go to State Plan, the single -sum value as shown on the Employee's benefit statement (sample attached), or a total of $231,623 as of 1-1-75 (last date of evaluation) would be the amount which the Actuary would recommend to transfer for police to the state plan. This amount would be futher reduced to reflect the decrease in stock values over inventory value, if this be the case at time of evaluation. It would also be reduced to distribute the net Actuarial Deficiency in the plan at the time of transfer. (40 Year Funding cost runs from 1-1-65). However regarding invested employees in the pension plan, the board is not bound to give any additional funds other than what is now provided in the present ordinances ( or the amount of employee contribution). Any study, report, or determination by the Wyatt Company requested by the Board, would of course cost the plan a fee ( added to Wyatt's annual fee). Cost of living increases are as follows: (1) Social Security - voted by Congress, no set formula 1974 - March 7% June 4% 1975 - June (proposed 8 to 9%) (2) Federal Government Employee Pensions - Based on 3 month complex formula (3) 1974 - Jan. 7.3% July 6.4% 1975 - Jan. 6.2% State Pension System - complex formula figured on individual retiree bases (see copy of formula attached) • Florida Retirement System Cost -of -Living Adjustments On each July 1, retirees who are 65 or older, disability retirees, and beneficiaries of deceased retirees who would have reached age 65 as of that date, are eligible to receive a cost -of -living adjustment. The benefit first received at date of retirement (excluding minimum benefit or other adjustments) is increased by the pro- duct of (1) times (2) where (1) is the percentage increase in the average consumer price index from date of retirement to date of determination (ignoring increases greater than 3% per year after June 30, 1970), and (2) is the member's standard benefit, deter- mined as though the member had always been covered under the Florida Retirement System, but using his actual average final compensation and limiting the annual benefit unit to 1.6% for regular service. The benefit payable for the subsequent year is the larger of the increased benefit described above and the benefit being paid on date of determination. • CHICAGO CLEVELAND DALLAS DETROIT FORT WORTH HONOLULU HOUSTON LOS ANGELES a THE[�Gi COMPANY ACTUARIES AND EMPLOYEE BENEFIT CONSULTANTS 9595 NORTH KENDALL DRIVE MIAMI, FLORIDA 33156 (3O5) 274-8080 April 7, 1975 Mr. James Glaid Finance Director Miami Shores Village 10050 N. E. Second Avenue Miami Shores, Florida 33128 Re: Inspection Station Employees Dear Mr. Glaid: M IAM 1 NEW YORK PHILADELPHIA SAN FRANCISCO WASHINGTON OTTAWA TORONTO The following is the determination of the assets that should be available for the employees due to their leaving the Miami Shores Village Pension Plan. The method used to determine these amounts is as outlined in our letter to you dated March 31, 1975. Although the actual date of transfer for these employees is February 20, 1975, we have used the value of assets and liabilities as of December 31, 1974. 1. Value of Assets as of December 31, 1974 a. Market value of trust fund as of December 31, 1974 $ 902,367.49 b. Contributions for the 1974 calendar year not paid as of December 31, 1974 $ 78,193.00 c. Total value of assets as of December 31, 1974: (1) + (2) $ 980,560.49 2. Allocated Liabilities as of December 31, 1974 a. Retired life reserves b. Vested terminated reserves c. Member contributions d. Total: (a) + (b) + (c) $ 763,833.00 79,099.00 210,915.67 $1,053,847.67 3. Assets Available for Distribution Other Than Member Contributions: (1) - (2), minimum 0 $ -0- Mr. James Glaid April 7, 1975 Miami Shores Village Page Two From .this development, we suggest that the transferring em- ployees be given no assets other than their own contributions. According to our records, this would be the contributions made during 1975 plus the following amounts per employee: Member Contributions Name Date of Birth As of December 31, 1974 K. V. Martin January 9, 1928 $ 934.00 D. E. Badger July 4, 1923 $2,196.68 F. Schmitt October 10, 1930 $ 265.03 Additionally, if the Police Officers are going to transfer from the Miami Shores Village Pension Plan, it would appear that, unless at their date of transfer the market value of the funds has made a significant recovery, we will also recommend that they be given back only their member contributions. If you have any questions on this matter, please do not hesitate to contact us. WWW:rgb • Sincerely, Wallace W. Wilson, A.S.A. Associate Actuary