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March 27, 2009 CITY COUNCIL WORKSHOP THUR SD AY, APR IL 2, 2009, 4:00 P.M. HA GLER MAS ON C ONFEREN CE ROOM SECON D FLOOR , CI TY HA LL
Michael C. Wiggins, Mayor Jewel Cannada-Wynn, Deputy Mayor Maren DeWeese Sam Hall John Jerralds Larry B. Johnson Diane Mack Megan B. Pratt Ronald P. Townsend P. C. Wu
1)
Alvin G. Coby, City Manager
2)
William D. Wells, City Attorney
*3)
Richard Barker Jr., Director of Finance
*4)
Employee Executive Committee – Brenda Kahalley, Committee Representative
*5)
Firefighters’ Union – Larry Porto, Union Representative
*Presentation *6)
Police Union – Robert Bell, Jr., Union Representative
If any person decides to appeal any decision made with respect to any matter considered at such meeting, he will need a record of the proceedings, and that for such purpose he may need to ensure that a verbatim record of the proceedings is made, which record includes the testimony and evidence upon which the appeal is to be based. The City of Pensacola adheres to the Americans with Disabilities Act and will make reasonable accommodations for access to city services, programs, and activities. Please call 435-1606 for further information. Requests must be made at least 48 hours in advance of the event in order to allow the city time to provide the requested services.
CITY OF PENSACOLA DEFINED BENEFIT RETIREMENT PLANS COUNCIL WORKSHOP APRIL 2, 2009
Pension Plan History • General Pension – effective April 21, 1932 – – – –
Special Act of the State Legislature Six (6) trustees Included General, Fire and Police Closed October 1, 1979, new employees were in deferred compensation plans – Reopened October 6, 1997, participants in the Police Plan were not allowed to join the General Plan – Plan adopted as an ordinance in 2007 – Closed again June 18, 2007, new employees are now in Florida Retirement System (FRS)
Pension Plan History • Fire Pension – effective 1939 – Special Act of the Florida Legislature – Five (5) Trustees – Withdrew from the General Pension Plan and created it’s own plan
• Police Pension – effective October 22, 1959 – – – – –
City ordinance Five (5) Trustees Police Officers continued in the General Pension Plan Police Plan was a supplemental plan No longer in General Pension Plan as of October 1, 1979
• Florida Retirement System – joined effective June 18, 2007 – General employees
Basic Retirement Funding Equation C+I=B+E C = Contributions I = Investment Income B = Benefits Paid E = Expenses
Issues • General Pension Plan – Irrevocable Election to not go to FRS before July 2007 – Now may change Plan? – Employee Contributions 5.5%
• Fire Pension Plan – Union Contract included reopening language for pension and going to FRS was discussed at time of union contract. – Loss of State Insurance Proceeds if go to FRS – Employee Contributions 11.0% – No Social Security or Social Security Replacement Plan
• Police Pension Plan – Union Contract included reopening language for pension and going to FRS was discussed at time of union contract. – Loss of State Insurance Proceeds if go to FRS – Employee Contributions 0.5%
Pension Cost • Pensions – Funding Difference between beginning FY03 to Projected Budget FY10
– City-Wide Increase - $11,014,500 – General Fund Increase – $6,175,200
C it y C o nt r ib ut io n Hist o r y G ener al F und B eg inning
Pr o ject ed
A ct ual
A ct ual
A ct ual
A ct ual
A ct ual
A ct ual
F Y 0 9 B ud g et
F Y 10 B ud g et
FY 2 0 0 3
FY 2004
FY 2 0 0 5
FY 2 0 0 6
FY 2 0 0 7
FY 2 0 0 8
T o t al
T o t al
Gener al Pensio n
76 7,4 0 0
1,9 51,12 3
2 ,3 3 6 ,9 72
2 ,58 6 ,3 70
2 ,4 75,10 2
2 ,2 73 ,714
2 ,2 8 9 ,2 0 0
2 ,3 50 , 10 0
F ir e Pensio n
719 ,3 0 0
1,712 ,56 8
2 ,0 8 5,0 6 2
2 ,6 6 2 ,6 19
2 ,79 5,8 3 9
2 ,6 8 9 ,516
2 , 73 1,10 0
2 ,8 6 5,8 0 0
4 0 2 ,4 0 0
1,18 8 ,58 6
1,4 4 4 ,50 1
2 ,0 53 ,9 9 2
2 ,19 6 ,9 2 9
2 ,4 6 8 ,6 4 1
2 ,4 14 ,8 0 0
2 ,3 9 8 ,6 0 0
116 ,73 7
4 3 3 ,76 3
4 15,2 0 0
3 9 0 ,50 0
7,58 4 ,6 0 7
7,8 6 5,6 3 4
7,8 50 ,3 0 0
8 ,0 0 5,0 0 0
Po lice Pensio n F lo r i d a R et . Sys. T o t al
1,8 8 9 ,10 0
4 ,8 52 ,2 77
5,8 6 6 ,53 5
7,3 0 2 ,9 8 1
Ot her F und s B eg inning
Pr o ject ed
A ct ual
A ct ual
A ct ual
A ct ual
A ct ual
A ct ual
F Y 0 9 B ud g et
F Y 10 B ud g et
FY 2 0 0 3
FY 2004
FY 2 0 0 5
FY 2 0 0 6
FY 2 0 0 7
FY 2 0 0 8
T o t al
T o t al
1,0 0 6 ,4 0 0
2 ,76 8 ,0 0 0
3 ,4 0 2 ,9 9 8
3 ,8 6 2 ,53 9
3 ,73 1,8 2 3
3 ,9 9 5,0 3 6
5,0 6 6 ,4 0 0
4 ,8 6 1,10 0
F ir e Pensio n
52 ,3 0 0
18 9 ,4 2 0
2 4 4 ,4 8 8
2 75,8 9 2
2 2 9 ,58 6
2 70 ,4 6 6
2 9 1,0 0 0
3 2 0 ,4 0 0
Po lice Pensio n
3 3 ,0 0 0
18 6 ,3 9 5
2 0 3 ,4 8 6
2 10 ,50 8
2 6 9 ,3 70
2 9 2 ,6 6 0
2 58 ,70 0
2 3 9 ,2 0 0
1,0 9 1,70 0
3 ,14 3 ,8 15
3 ,8 50 ,9 72
4 ,3 4 8 ,9 3 9
115,3 6 6 4 ,3 4 6 ,14 5
4 8 8 ,0 75 5,0 4 6 ,2 3 7
4 6 5,6 0 0 6 ,0 8 1,70 0
515,2 0 0 5,9 3 5,9 0 0
Gener al Pensio n
F lo r i d a R et . Sys. T o t al
A ll F und s
Gener al Pensio n F ir e Pensio n Po lice Pensio n
Pr o ject ed
A ct ual
A ct ual
A ct ual
A ct ual
A ct ual
A ct ual
F Y 0 9 B ud g et
F Y 10 B ud g et
FY 2 0 0 3
FY 2004
FY 2 0 0 5
FY 2 0 0 6
FY 2 0 0 7
FY 2 0 0 8
T o t al
T o t al
6 ,4 4 8 ,9 0 9
6 ,2 0 6 ,9 2 5
6 ,2 6 8 ,750
7,3 55,6 0 0
7,2 11,2 0 0
3 ,0 2 5,4 2 5
2 ,9 59 ,9 8 2
3 ,0 2 2 ,10 0
3 ,18 6 ,2 0 0
1,773 ,8 0 0
4 ,719 ,12 3
5,73 9 ,9 70
771,6 0 0
1,9 0 1,9 8 8
2 ,3 2 9 ,550
4 3 5,4 0 0
1,3 74 ,9 8 1
1,6 4 7,9 8 7
2 ,9 3 8 ,511 2 ,2 6 4 ,50 0
F lo r i d a R et . Sys. T o t al
B eg inning
2 ,9 8 0 ,8 0 0
7,9 9 6 ,0 9 2
9 ,717,50 7
11,6 51,9 2 0
2 ,4 6 6 ,2 9 9
2 ,76 1,3 0 1
2 ,6 73 ,50 0
2 ,6 3 7,8 0 0
2 3 2 ,10 3
9 2 1,8 3 8
8 8 0 ,8 0 0
9 0 5,70 0
13 ,9 3 2 ,0 0 0
13 ,9 4 0 ,9 0 0
11,9 3 0 ,752
12 ,9 11,8 71
Combined Annual Pensions Paid As of 9/30/08 100% 75% General Fire Police
50% 25% 0% $2,746$20,000
$20,000$40,000
$40,000$60,000
$60,000$125,000
General Pension Annual Pensions Paid As of 9/30/08 $40,000-$60,000 (16) 3%
$60,000-$100,000 (8) 2%
$20,000-$40,000 (134) 26%
$2,746-$20,000 (348) 69%
Fire Pension Annual Pensions Paid As of 9/30/08 $60,000-$100,000 (6) 3% $40,000-$60,000 (48) 28%
$5,718-$20,000 (19) 11%
$20,000-$40,000 (100) 58%
Police Pension Annual Pensions Paid As of 9/30/08 $60,000-$125,000 (36) 29%
$40,000-$60,000 (22) 18%
$2,145-$20,000 (35) 29%
$20,000-$40,000 (29) 24%
Retiree and Beneficiary Annual Pensions Paid As of 9/30/08 Annual Pension
General
Firefighters
Police Officers
Total
Number Percentage
Number Percentage
Number Percentage
Number Percentage
<$10,000
152
30.04%
4
2.33%
7
5.74%
163
20.38%
$10,000-$20,000
196
38.73%
15
8.72%
28
22.93%
239
29.85%
$20,000-$30,000
88
17.39%
44
25.58%
22
18.03%
154
19.25%
$30,000-$40,000 $40,000-$50,000
46 12
9.09% 2.37%
56 24
32.56% 13.95%
7 12
5.74% 9.84%
109 48
13.63% 6.00%
$50,000-$60,000
4
0.79%
24
13.95%
10
8.20%
38
4.75%
$60,000-$70,000
5
0.99%
4
2.33%
11
9.02%
20
2.50%
$70,000-$80,000
2
0.40%
1
0.58%
14
11.48%
17
2.13%
7
5.74%
7
0.88%
1
0.82%
2
0.25%
3
2.46%
3
0.38%
122
100.00%
800
100.00%
$80,000-$90,000 $90,000-$100,000
1
0.20%
>$100,000 506
100.00%
172
100.00%
HMO Non Medicare
PPO Non Medicare
Medicare
Family
Family
Family
$13,904.40
$11,679.12
$5,721.60
Annual Insurance Permiums (Paid by Pensioner)
Defined Benefit Plans Active and Retired Participants As of September 2008 General Pension*
Fire Pension
Police Pension
FRS
Num ber of Active Participants
345
108
157
293
Num ber of Retired and DROP Participants
608
172
122
N/A
$10,955,365
$5,466,527
$2,534,905
N/A
Average Annual Pension
$18,019
$31,782
$38,432
**
Annual Pension Highest to Low est Highest Low est
$96,690 $2,746
$79,186 $5,718
$125,771 $2,145
**
2.1% Max 63%
3.0% Max 75%
3.0% Max 100%
Total FY 2008 Pensions Benefits Paid
Current Annual Retirem ent Benefit Percentage Based On Years Of Service * General Pension closed effective June 18, 2007. ** Police and General Benefits
N/A
1.60-3.0% Max 100%
City Contribution Percentage Fiscal Year 2009 • General Pension • Fire Pension • Police Pension • FRS – Regular Class – Senior Mgmt Class – Elected Official Class – Special Risk Class
Employee 5.5% 11.0% 0.5%
City 49.58% 58.00% 35.68%
Total 55.08% 83.72% 45.03%
0.00% 0.00% 0.00% 0.00%
9.85% 13.12% 16.53% 20.92%
9.85% 13.12% 16.53% 20.92%
General Pension Cost As A Percentage Of Salaries History
ANNUAL CITY CONTRIBUTIONS FY FY FY FY FY FY FY FY
03 04 05 06 07 08 09 Budgeted 10 Projected
11.30% 28.60% 33.77% 37.63% 35.74% 43.42% 49.58% 53.23%
PREPAYMENT RESERVE USED 9.88% 0.00% 0.00% 0.00% 0.00% 0.00% 0.00% 0.00%
STATE INSURANCE PROCEEDS 0.00% 0.00% 0.00% 0.00% 0.00% 0.00% 0.00% 0.00%
EMPLOYEE CONTRIBUTIONS 5.50% 5.50% 5.50% 5.50% 5.50% 5.50% 5.50% 5.50%
TOTAL ACTUAL CONTRIBUTIONS 26.68% 34.10% 39.27% 43.13% 41.24% 48.92% 55.08% 58.73%
General Pension Contribution History
FY FY FY FY FY FY FY FY
03 04 05 06 07 08 09 Budgeted 10 Projected
City Contributions
Pre-Payment Reserve Used
State Insurance Proceeds
1,760,559 4,611,350 5,860,702 6,477,705 6,247,958 6,268,750 7,359,900 7,211,000
1,444,925 -
-
Employee Contributions 858,380 886,797 953,417 946,730 961,556 794,006 816,500 745,100
Total Contributions 4,063,864 5,498,147 6,814,119 7,424,435 7,209,514 7,062,756 8,176,400 7,956,100
Pensacola General Employees Pension Fund Total Market Value
Cash & Equivalents, 2,086,853, 2.6%
$79,373,573 (02/28/09)
Fixed Income, 37,173,321, 46.8%
Equities, 40,113,399, 50.5%
Total Market Value
Total Market Value
$100, 202,547 (9/30/08)
$119,690,414 (9/30/07)
Fire Pension Cost As A Percentage Of Salaries History ANNUAL CITY CONTRIBUTIONS FY FY FY FY FY FY FY FY
03 04 05 06 07 08 09 Budgeted 10 Projected
18.20% 40.60% 46.83% 53.80% 58.33% 56.10% 58.00% 57.80%
STATE INSURANCE PROCEEDS 9.09% 13.20% 11.71% 12.34% 14.79% 15.15% 14.72% 14.50%
EMPLOYEE CONTRIBUTIONS 11.00% 11.00% 11.00% 11.00% 11.00% 11.00% 11.00% 11.00%
TOTAL ACTUAL CONTRIBUTIONS 38.29% 64.80% 69.54% 77.14% 84.12% 82.25% 83.72% 83.30%
Fire Pension Contribution History
City Contributions FY FY FY FY FY FY FY FY
03 04 05 06 07 08 09 Budgeted 10 Projected
771,210 1,807,624 2,424,270 2,938,511 3,025,425 2,959,982 3,022,100 3,186,178
Pre-Payment Reserve Used -
State Insurance Proceeds 507,383 587,799 579,686 674,181 766,923 799,135 766,923 799,135
Employee Contributions 441,869 489,752 568,735 600,810 570,531 580,431 573,200 606,418
Total Contributions 1,720,462 2,885,175 3,572,691 4,213,502 4,362,879 4,339,548 4,362,223 4,591,731
Pensacola Firefighters’ Relief and Pension Fund Total Market Value
Cash & Equivalents, 1,130,799, 1.8%
$63,560,489 (02/28/09)
Fixed Income, 29,722,120, 46.8%
Equities, 32,707,570, 51.5%
Total Market Value
Total Market Value
$78,805,728 (9/30/08)
$92,553,922 (9/30/07)
Police Pension Cost As A Percentage Of Salaries History ANNUAL CITY CONTRIBUTIONS FY 03 FY 04 FY 05 FY 06 FY 07 FY08 FY09 Budgeted FY10 Projected
7.10% 19.00% 19.00% 28.59% 31.26% 35.60% 35.68% 36.78%
PREPAYMENT RESERVE USED 1.05% 3.43% 9.70% 0.10% 0.00% 0.00% 0.00% 0.00%
STATE INSURANCE PROCEEDS 9.66% 10.44% 10.62% 10.25% 8.40% 8.54% 8.85% 7.81%
EMPLOYEE CONTRIBUTIONS 8.50% 5.50% 2.50% 0.50% 0.50% 0.50% 0.50% 0.50%
TOTAL ACTUAL CONTRIBUTIONS 26.31% 38.37% 41.82% 39.44% 40.16% 44.64% 45.03% 45.09%
Note: Actuarial Report not approved by the Police Pension Board for FY10 contributions. Will use FY09 contribution rates.
Police Pension Contribution History City Contributions FY FY FY FY FY FY FY FY
03 04 05 06 07 08 09 Budgeted 10 Projected
432,241 1,285,399 1,759,486 2,264,514 2,466,299 2,761,301 2,673,500 2,637,800
Pre-Payment Reserve Used 61,122 231,940 676,096 7,438 -
State Insurance Proceeds* 717,421 706,380 662,759 662,759 662,759 662,759 662,759 662,759
Employee Contributions 589,016 375,764 192,508 36,327 39,445 38,793 37,500 35,900
Total Contributions 1,799,800 2,599,483 3,290,849 2,971,038 3,168,503 3,462,853 3,373,759 3,336,459
* Can only apply $619,399 for contributions each year. Note: Actuarial Report not approved by the Police Pension Board for FY10 contributions. Will use FY09 contribution rates.
Pensacola Police Pension Fund Total Market Value
Cash & Equivalents, 1,223,163, 3.0%
$40,719,075 (02/28/09)
Equities, 18,662,448, 45.8%
Fixed Income, 20,833,464, 51.2%
Total Market Value
Total Market Value
$51,605,517 (9/30/08)
$57,273,509 (9/30/07)
Reconciliation of Contribution Increases Reason
General Pension
Due to Net Negative Investement Returns
$1,446,348
Due to Losses
$2,550,140
Due to Plan Amendments
$125,060
Due to Actual Experience Different From Assumptions
$233,808
Due to Method Changes
$1,772,594
Fire Pension $1,914,778
Police Pension $1,255,369
$1,292,809 $296,996 ($731,624)
Due to Payroll Different Than Assumed
($891,734)
Due to Demographic Changes
$201,184
$934,450
Total Increase in Contributions
$5,437,400
$2,414,600
$50,655 ($515,362) $292,919 ($173,990) $2,202,400
Schedule of Funding Progress All Pension Plans Combined Actuarial Valuation Date 9/30/1996 9/30/1997 9/30/1998 9/30/1999 9/30/2000 9/30/2001 9/30/2002 9/30/2003 9/30/2004 9/30/2005 9/30/2006 9/30/2007 9/30/2008
Market Value of Assets (In Millions)
Actuarial Value of Assets (In Millions)
Actuarial Accrued Liability (AAL)
150,365 183,885 193,079 212,846 218,485 201,000 182,189 198,604 213,850 228,941 239,103 269,518 231,023
137,985 160,673 178,871 195,938 212,436 219,296 215,402 218,376 220,312 225,817 235,791 254,956 261,441
153,906 202,892 215,707 245,823 263,454 269,514 265,855 289,820 300,882 308,689 306,766 332,464 355,032
Unfunded AAL (UAAL) 15,921 42,219 43,144 49,885 51,018 50,218 50,353 71,444 80,570 82,872 80,975 77,508 93,091
Funded Ratio 89.66% 79.19% 82.92% 79.71% 80.63% 81.37% 81.02% 75.35% 73.22% 73.15% 76.86% 76.69% 73.64%
Covered Payroll 16,180 21,613 23,491 25,492 23,994 24,810 25,650 25,873 27,059 29,864 30,372 27,449 26,572
Schedule of Funding Progress General Pension Actuarial Valuation Date 9/30/1996 9/30/1997 9/30/1998 9/30/1999 9/30/2000 9/30/2001 9/30/2002 9/30/2003 9/30/2004 9/30/2005 9/30/2006 9/30/2007 9/30/2008
Actuarial Market Value of Value of Assets (In Assets (In Millions) Millions) 74,086 81,634 89,237 103,000 105,501 95,993 86,264 91,598 97,324 103,608 107,866 119,690 100,490
68,668 81,634 89,287 97,992 104,738 106,476 104,817 105,000 104,027 104,435 106,662 113,372 115,679
Actuarial Accrued Liability (AAL) 71,524 110,292 118,515 131,148 140,905 141,680 140,310 155,855 160,845 157,913 157,417 163,684 166,311
Unfunded AAL (UAAL) 2,856 28,658 26,228 33,156 36,167 35,204 35,493 50,855 56,818 53,478 50,755 50,312 50,632
Funded Ratio 96.00% 74.00% 75.30% 74.70% 74.30% 75.20% 74.70% 67.40% 64.70% 66.10% 67.76% 69.26% 69.56%
Covered Payroll 6,937 11,889 13,932 15,465 14,030 14,480 15,445 15,286 15,708 16,904 17,598 14,807 13,546
Schedule of Funding Progress Fire Pension Actuarial Valuation Date 9/30/1996 9/30/1997 9/30/1998 9/30/1999 9/30/2000 9/30/2001 9/30/2002 9/30/2003 9/30/2004 9/30/2005 9/30/2006 9/30/2007 9/30/2008
Market Value of Assets (In Millions)
Actuarial Value of Assets (In Millions)
51,744 63,055 65,803 72,288 73,950 66,082 60,355 67,208 72,892 78,536 84,440 92,554 78,885
46,524 51,924 57,390 63,803 70,000 73,385 71,441 72,891 73,263 74,679 78,872 85,956 88,835
Actuarial Accrued Liability (AAL) 56,321 60,774 65,082 76,345 82,307 85,681 83,645 85,334 85,214 92,165 97,021 100,973 107,803
Unfunded AAL (UAAL) 9,797 8,850 7,692 12,542 12,307 12,296 12,104 12,443 11,951 17,486 18,149 15,017 18,968
Funded Ratio 82.60% 85.40% 88.20% 83.60% 85.00% 85.60% 85.50% 85.40% 86.00% 81.00% 81.30% 85.10% 82.40%
Covered Payroll 3,971 4,038 3,754 4,189 4,321 4,427 3,887 4,103 4,468 5,025 4,840 5,041 5,513
Schedule of Funding Progress Police Pension Actuarial Valuation Date
Market Value of Assets (In Millions)
Actuarial Value of Assets (In Millions)
24,535 31,095 33,631 37,558 39,034 38,925 35,570 39,798 43,634 46,797 50,135 57,273 51,698
22,793 27,115 30,194 34,143 37,698 39,435 39,144 40,485 43,022 46,703 50,257 55,628 57,427
9/30/1996 9/30/1997 9/30/1998 9/30/1999 9/30/2000 9/30/2001 9/30/2002 9/30/2003 9/30/2004 9/30/2005 9/30/2006 9/30/2007 9/30/2008 **
Actuarial Accrued Liability (AAL) 26,061 31,826 36,418 38,330 * 40,242 * 42,153 41,900 48,631 54,823 58,611 62,328 67,807 80,918
Unfunded AAL (UAAL) 3,268 4,711 6,224 4,187 2,544 2,718 2,756 8,146 11,801 11,908 12,071 12,179 23,491
Funded Ratio 87.46% 85.20% 83.39% 89.08% 93.68% 93.60% 93.40% 83.20% 78.50% 79.68% 80.60% 82.04% 70.97%
Covered Payroll 5,272 5,686 5,805 5,838 5,643 5,859 6,318 6,484 6,883 7,934 7,153 7,601 7,513
* Estimated Numbers ** Actuarial Report not approved by the Police Pension Board as of 9/30/08 contributions. Will use prior year contribution rates.
General Pension Phased-In Recognition of Investment Income P e n s i o n Ye a r
20 0 7
2 00 8
20 0 9
2 01 0
20 1 1
2 0 12
2 01 3
2 0 14
Fi s c a l Ye a r
20 0 5
2 00 6
20 0 7
2 00 8
20 0 9
2 0 10
2 01 1
2 0 12
GE NE RAL
C u r r e n t Ye a r In v e s t me n t In c ome
2 47 , 1 91
7 9, 66 1
1 , 3 6 4, 2 9 1
Fi r s t P r i o r Ye a r
1 43 , 7 25
2 4 7, 19 1
7 9, 6 6 1
1 , 36 4 , 29 1
Se c o nd P r i or Ye a r
3 27 , 3 29
1 4 3, 72 5
2 4 7, 1 9 1
7 9 , 66 1
1 , 3 64 , 2 91
3 2 7, 32 9
1 4 3, 7 2 5
24 7 , 19 1
79 , 6 61
1 , 3 64 , 2 91
14 3 , 72 5
2 47 , 1 91
79 , 6 61
T h i r d P r i o r Ye a r
(2 , 9 01 , 6 07 )
Fou r t h P r i o r Ye a r
(2 , 8 82 , 1 86 )
(2, 9 0 1, 60 7 )
3 2 7, 3 2 9
T o t a l R e c o gn i z e d Inv e s t me n t Ga i n(Lo s s )
(5 , 0 65 , 5 48 )
(2, 1 0 3, 70 1 )
2 , 1 6 2, 1 9 7
(4, 92 2 , 39 4 )
(3, 08 7 , 52 6 )
(4 , 9 22 , 3 94 )
(3 , 2 31 , 2 51 )
(4 , 9 22 , 3 94 )
(3 , 4 78 , 4 42 )
-
-
-
-
(4, 9 2 2, 3 9 4)
-
1, 3 6 4, 2 9 1
(4 , 92 2 , 39 4 )
(3, 5 5 8, 1 0 3)
(4 , 92 2 , 39 4 )
Fire Pension Phased-In Recognition of Investment Income Pension Year
2006
2007
2008
2009
2010
Fiscal Year
2004
2005
2006
2007
2008
2011 2009
2012
2013
2014
2010
2011
2012
FIRE Current Year Investment Income First Prior Year Second Prion Year Third Prior Year Fourth Prior Year Total Recognized Investment Gain(Loss)
172,338
314,925
205,125
1,122,345
(3,822,672)
626,288
172,338
314,925
205,125
1,122,345
(1,892,186)
626,288
172,338
314,925
205,125
1,122,345
(3,822,672)
(2,203,903)
(1,892,186)
626,288
172,338
314,925
205,125
1,122,345
(143,102)
(2,203,903)
(1,892,188)
626,289
172,336
314,924
205,125
(3,440,565)
(2,982,538)
(573,512)
2,441,022
(2,007,941)
(3,822,672)
(2,180,278)
(2,495,202)
(3,822,672)
-
1,122,343
(3,822,672)
(2,700,329)
(3,822,672)
SUMMARY • • • • •
The cumulative funding of all 3 plans is 73.64% funded 9/30/07 - $270 million in assets 9/30/08 - $231 million in assets 2/28/09 - $183 million in assets Pension Plan Investments are market sensitive
• Earnings need to be looked at as long range – 30 to 40 years • General Pension is closed to new members. New general employees hired are placed in FRS.
Future Issues • Litigation – Fire – General
• Actuarially no cost amendments to the Fire Pension Plan - approved when collective bargaining agreement ratified - Need to send to legislature • Pension Obligation Bonds
Cost Reduction Options
General Pension Possible Benefit Changes Employer Contribution Rate
ITEM Valuation Results - Baseline
Unfunded Accrued Liability (UAL)
Normal
UAL
Total
Total Employer Contribution
50,631,882
14.31%
38.92%
53.23%
7,210,946
1. 1.6% Accrual Rate Reduction from Baseline
48,201,033 2,430,849
12.30% 2.01%
37.05% 1.87%
49.35% 3.88%
6,685,298 525,648
2. 1.05% Accrual Rate Reduction from Baseline
44,833,165 5,798,717
10.20% 4.11%
34.46% 4.46%
44.66% 8.57%
6,050,305 1,160,641
3. Life Annuity Normal Form Reduction from Baseline
47,155,105 3,476,777
12.50% 1.81%
36.25% 2.67%
48.75% 4.48%
6,603,187 607,759
4. Benefit Freeze Reduction from Baseline
46,260,420 4,371,462
2.53% 11.78%
35.56% 3.36%
38.09% 15.14%
5,160,136 2,050,810
5. 5 Year Final Average Salary Reduction from Baseline
48,656,388 1,975,494
13.60% 0.71%
37.40% 1.52%
51.00% 2.23%
6,908,537 302,409
6. Eliminate COLA Reduction from Baseline
45,829,543 4,802,339
12.11% 2.20%
35.23% 3.69%
47.34% 5.89%
6,412,210 798,736
*Administrative expenses and adjustment for timing of contributions only Note: The sum of any 2 benefits added together will not be the exact amount if combined.
Fire Pension Possible Benefit Changes Employer Contribution Rate
ITEM
Unfunded Accrued Liability (UAL)
Valuation Results - Baseline
18,968,619
1. 2.5% Accrual Rate (max 75%) Reduction from Baseline
Normal
Total Employer Contribution
UAL
Total
29.72%
28.08%
57.80%
3,186,178
16,114,404 2,854,215
26.84% 2.88%
25.26% 2.82%
52.10% 5.70%
2,871,930 314,248
2. 2.0% Accrual Rate (max 75%) Reduction from Baseline
14,749,263 4,219,356
20.48% 9.24%
23.24% 4.84%
43.72% 14.08%
2,410,050 776,128
3. 10 Year Certain Life Annuity Normal Form Reduction from Baseline
15,657,536 3,311,083
24.00% 5.72%
24.57% 3.51%
48.57% 9.23%
2,699,546 486,632
4. Benefit Freeze Reduction from Baseline
14,181,790 4,786,829
6.90% 22.82%
36.01% -7.93%
42.91% 14.89%
2,365,815 820,363
5. 5 Year Final Average Salary Reduction from Baseline
16,289,469 2,679,150
26.14% 3.58%
25.33% 2.75%
51.47% 6.33%
2,837,039 349,139
6. Eliminate COLA Reduction from Baseline
9,973,547 8,995,072
17.91% 11.81%
18.79% 9.29%
36.70% 21.10%
2,022,647 1,163,531
Note: The sum of any 2 benefits added together will not be the exact amount if combined.
Police Pension Possible Benefit Changes Employer Contribution Rate
ITEM
Unfunded Accrued Liability (UAL)
Normal
UAL
Total
Total Employer Contribution
Valuation Results - Baseline
23,491,042
22.55%
20.87%
43.42%
2,637,749
1. 2.5% Accrual Rate (max 75%) Reduction from Baseline
16,932,118 6,558,924
18.94% 3.61%
15.04% 5.83%
33.98% 9.44%
1,928,540 709,209
2. 2.0% Accrual Rate (max 75%) Reduction from Baseline
11,291,444 12,199,598
15.56% 6.99%
10.03% 10.84%
25.59% 17.83%
1,298,220 1,339,529
3. 10 Year Certain Life Annuity Normal Form Reduction from Baseline
17,824,132 5,666,910
19.39% 3.16%
15.84% 5.03%
35.23% 8.19%
2,022,458 615,291
4. Benefit Freeze Reduction from Baseline
7,292,693 16,198,349
4.00% 18.55%
6.48% 14.39%
10.48% 32.94%
200,593 2,437,156
5. 5 Year Final Average Salary Reduction from Baseline
20,244,375 3,246,667
20.69% 1.86%
17.99% 2.88%
38.68% 4.74%
2,281,651 356,098
6. Eliminate COLA Reduction from Baseline
13,652,657 9,838,385
16.91% 5.64%
12.13% 8.74%
29.04% 14.38%
1,557,413 1,080,336
IMPORTANT NOTE: Minimum benefits that may be required by law have neither been defined nor valued.
Note: The sum of any 2 benefits added together will not be the exact amount if combined.
Where Do We Go From Here? Savings Combinations
General, Fire & Police Combined Life Annuity Normal Form Fiscal Year 2010 City Contribution Before Changes
Plan General Pension $
7,210,946
Fire Pension Police Pension Total Savings
$
Changes (607,759) $
7,818,705
3,186,178
(486,632)
3,672,810
2,637,749
(615,291)
3,253,040
13,034,873
$
City Contribution Before Changes
$ (1,709,682) $
14,744,555
General, Fire & Police Combined 5 Year Average Final Salary Fiscal Year 2010 City Contribution Before Changes
Plan General Pension $
7,210,946
Fire Pension Police Pension Total Savings
$
Changes (302,409) $
7,513,355
3,186,178
(349,139)
3,535,317
2,637,749
(356,098)
2,993,847
$ (1,007,646) $
14,042,519
13,034,873
$
City Contribution After Changes
General, Fire & Police Combined 0.5% Reduction in Accrual Rate City Contribution Before Changes
Plan General Pension
$
7,210,946
Changes $
City Contribution After Changes
(525,648) $
6,908,537
Fire Pension
3,186,178
(314,248)
2,837,039
Police Pension
2,637,749
(709,209)
2,281,651
Total Savings
$
13,034,873
$ (1,549,105) $
12,027,227
General, Fire & Police Combined Freezing Plan Benefits Fiscal Year 2010 City Contribution Before Changes
Pla n Gene ra l Pension
$
7,210,946
City Contribution After Cha nge s
Changes $
(2,050,810)
$
5,160,136
Fire Pension
3,186,178
(820,363)
2,365,815
Police Pension
2,637,749
(2,437,156)
200,593
Subtotal
$
13,034,873
$
(5,308,329)
Loss of Contribution from State Insurance Proceeds Fire and Police $ 1,418,435 Ne t Savings* Ne t City Obligation
$
$
$
7,726,544
1,418,435
(3,889,894) $
9,144,979
*Net savings a ssumes no other pension plan provide d for employee s.
Issues Boards will determine how the plan will continue if the plans are frozen • Purchase annuities – immediate cost to city to purchase annuities • Payout all participants, retired and active, in a lump-sum – immediate cost to city to fund lump-sums • Continue as they are currently – city’s annual cost will be determined by actuary each year
What do you provide employees – Defined Contribution Plan – General, Fire & Police – FRS for Fire and Police • Employees would have choice which plan current or FRS • Close plans would lose the state insurance premium tax money
– Provide No Retirement Plan
QUESTIONS
City of Pensacola Employee’s Executive Committee City Council Workshop April 2, 2009
Employee’s Executive Committee Represents and Protects The Interest Of All Members of the Civil Service Created By Laws of Florida
Ch 84-510 Section 17
Employee’s Executive Committee Chairperson
Brenda Kahalley
Group 5
Police, Fire, MIS
Vice-Chairperson
Anthony Bosso
Group 6
Energy Services of Pensacola
Secretary
Yvette McLellan
Group 1
Finance, Community Development, Housing, Employee Services, Engineering
Treasurer
Michael Laven
Group 4
Airport, Library Port
Gene Ryder
Group 2
Parks & Recreation
Toney McCreary
Group 3
Public Works, Sanitation Services & Fleet Management
Cheryl Jackson Eric Ervin Darryl Singleton
Group 1 Group 2 Group 6
Alternates
City of Pensacola General Pension Plan Change is Necessary Allow For Thorough Research And Comparisons
Independent Party
Informed Decision Consensus
“Cadillac Pensions”
Average Civil Service Worker
608 Current General Pension Retirees
Average Pension - $18,019 68.77% Receive Less Than $20,000 Per Year Family Health Insurance - $14,000 Per Year
Civil Service Employees Position
Yearly Salary Starting Salary Maximum Salary
30 Years (63%) Maximum Pension
Clerk I Clerk II Clerk III
19,115 20,092 21,091
29,702 31,220 32,760
18,712.26 19,668.60 20,638.80
Customer Service Representative I Customer Service Representative II
23,171 24,545
35,214 38,188
22,184.82 24,058.44
Maintenance Worker I Maintenance Worker II Maintenance Worker III
20,092 21,091 23,171
31,220 32,760 35,214
19,668.60 20,638.80 22,184.82
Public Safety Telecommunicator I Public Safety Telecommunicator II
24,585 27,040
38,188 41,558
24,058.44 26,181.54
Equipment Operator II Equipment Operator III
23,171 24,545
35,214 38,188
22,184.82 24,058.44
Teamwork
Budgets and Personnel Reduction
73 Full Time Positions Since FY 2008 No Pay Increases
FY 2009 - $1,122,000 FY 2010 – $2,244,000
Personal Budgets Being Tightened
Health Insurance Groceries Gasoline
Pension Structure Changes
Three Changes In Past 30 Years
1979 – Closed General Pension To New Employees. New Employees Put In Deferred Compensation Plans 1997 – Reopened General Pension
Employees Allowed To Buy In Years of Service One-Time Chance
2007 – Closed General Pension to New Employees
New Employees Put In Florida Retirement System Existing Employees Allowed To Remain In Current Plan Or Join Florida Retirement System Irrevocable Decision
Civil Service Employees Affected Customer Service Employees Equipment Operators
Library Workers & Recreation Aids
Picks Up Garbage Mows Parks After School Computer Labs
Hurricane/Disaster Recovery
Independent Study
Support Hiring Outside Consultant
Evaluate and Compare
Similar Cities Neighboring Governmental Agencies State and Federal Governments
Will Provide Clearer Picture
Thank You
Pensacola Firefighters Relief and Pension Fund
Good News, Bad News
Brief History
In 1939 the state establishes Chapter 19112 Section 175.041 Laws of Florida allowing collection of excise tax on casualty insurance for the purpose of funding dedicated firefighter pension plans.
Where it Went Wrong !
1957- revealed no portfolio 1961- $2,962,000 (original unfunded) loss over the 18 years 1971- (14 year delay)-”stair-step funding” assumes 64.6% of payroll 1991-2011 Paid $4,000 of recommended $135,000 initial payment 2008-required payment $1,462,359 (original unfunded-grown now to $9,166,787)
THE GOOD NEWS! Paid off in 7 years: 2008 - $1,936,150 2015 - $613,946 *Don’t give up now, almost there!* 2038 - $0!
A Well Managed Plan
Return on investment: 2004 - 15.1% 2005 - 10.2% 2006 - 10.6% 2007 - 14.5% 2008 - (13.3%) - Rank in top 30%
PENSACOLA POLICE PENSION ROB BELL PRESIDENT FRATERNAL ORDER OF POLICE, LODGE 71 CHAIRMAN POLICE PENSION BOARD
Pension Plan History – Police Pension – effective October 22, 1959 – City ordinance – Five (5) Trustees – Police Officers continued in the General Pension Plan • – Police Plan was a supplemental plan • – No longer in General Pension Plan as of October 1, 1979 • • • •
“CADILLAC PENSION” • OFFICERS HIRED PRIOR TO 1979 – PARTICIPATED IN BOTH THE GENERAL AND POLICE PENSIONS – THIS PROVIDED THESE OFFICERS WITH A COMBINED 4% BENEFIT – ONLY 4 REMAIN
CURRENT PENSION • DEFINED BENEFIT – 3% MULTIPLIER – MINIMUM 25 YEARS OF SERVICE – VESTED IN 10 YEARS – AVERAGE PENSION $38,432.00
PENSION HISTORY • PRIOR TO 1997 – 2% MULTIPLIER – MINIMUM 30 YEARS OF SERVICE – 10 YEARS VESTED 1997 GENERAL PENSION WAS RE-OPENED POLICE AND FIRE WERE EXCLUDED
PENSION HISTORY (CONT.) • IN LIEU OF THE GENERAL PENSION PARTICIPATION: – CITY STAFF ENHANCED THE POLICE PENSION. • FROM 2% TO A 3% MULTIPLIER • DECREASED MINIMUIM YEARS OF SERVICE FROM 30 TO 25 YEARS • THESE INCREASES BROUGHT US IN LINE WITH OTHER LAW ENFORCEMENT PENSIONS
PENSION HISTORY (CONT.) • FURTHER PLAN ENHANCEMENTS – 2003 CONTRACT NEGOITATIONS • IN LIEU OF PAY RAISES CITY STAFF PROPOSED A REDUCTION IN THE OFFICER’S CONTRIBUTION TO THE PENSION PLAN TO .5% FROM 8.5% THIS REDUCTION WAS SPREAD OUT OVER A 3 YEAR PERIOD
COMPARISONS POLICE PLAN
FRS (SPECIAL RISK CLASS) 3% 25 YEARS 6 YEARS VEST. 0 100% MAX
• OUR PENSION IS COMPARABLE IN BENEFITS TO THE MAJORITY OF OTHER 185 PLANS ACROSS THE STATE • DUE TO INVESTMENTS OUR PENSION HAS OUT PERFORMED MANY PLANS IN FLORIDA • IN TOP 30TH PERCENTILE FOR THE QUARTER
WHY PUBLIC SERVICE PRIVATE/PUBLIC BETTER SALARY PAY FOR EDUCATION LESS OR NO BENEFITS/LITTLE OR NO PENSION OFFICERS WANT TO MAKE A DIFFERENCE OFFICERS HAVE A SENCE OF COMMUNITY PRIDE OFFICERS ACCEPT LESS PAY FOR BETTER BENEFITS AND PENSIONS
• PENSIONS AND BENEFITS ARE RECRUITING TOOLS • LAW ENFORCEMENT IS A HIGH LIABILITY AREA
– EDUCATION AND EXPERIENCE ARE VITAL IN REDUCING THE CITIES EXPOSURE TO LIABILITY
A DEFINED BENEFIT PENSION HELPS IN RETAINING EXPERIENCED POLICE OFFICERS
HIGH RISK BENEFIT BECAUSE OUR LIFE IS ON THE LINE FOR YOU EVERYDAY
Michael C. Wiggins, Mayor Jewel Cannada-Wynn, Deputy Mayor Maren DeWeese Sam Hall John Jerralds Larry B. Johnson Diane Mack Megan B. Pratt Ronald P. Townsend P. C. Wu
1)
Alvin G. Coby, City Manager
2)
William D. Wells, City Attorney
*3)
Richard Barker Jr., Director of Finance
*4)
Employee Executive Committee – Brenda Kahalley, Committee Representative
*5)
Firefighters’ Union – Larry Porto, Union Representative
*Presentation *6)
Police Union – Robert Bell, Jr., Union Representative
If any person decides to appeal any decision made with respect to any matter considered at such meeting, he will need a record of the proceedings, and that for such purpose he may need to ensure that a verbatim record of the proceedings is made, which record includes the testimony and evidence upon which the appeal is to be based. The City of Pensacola adheres to the Americans with Disabilities Act and will make reasonable accommodations for access to city services, programs, and activities. Please call 435-1606 for further information. Requests must be made at least 48 hours in advance of the event in order to allow the city time to provide the requested services.
CITY OF PENSACOLA DEFINED BENEFIT RETIREMENT PLANS COUNCIL WORKSHOP APRIL 2, 2009
Pension Plan History • General Pension – effective April 21, 1932 – – – –
Special Act of the State Legislature Six (6) trustees Included General, Fire and Police Closed October 1, 1979, new employees were in deferred compensation plans – Reopened October 6, 1997, participants in the Police Plan were not allowed to join the General Plan – Plan adopted as an ordinance in 2007 – Closed again June 18, 2007, new employees are now in Florida Retirement System (FRS)
Pension Plan History • Fire Pension – effective 1939 – Special Act of the Florida Legislature – Five (5) Trustees – Withdrew from the General Pension Plan and created it’s own plan
• Police Pension – effective October 22, 1959 – – – – –
City ordinance Five (5) Trustees Police Officers continued in the General Pension Plan Police Plan was a supplemental plan No longer in General Pension Plan as of October 1, 1979
• Florida Retirement System – joined effective June 18, 2007 – General employees
Basic Retirement Funding Equation C+I=B+E C = Contributions I = Investment Income B = Benefits Paid E = Expenses
Issues • General Pension Plan – Irrevocable Election to not go to FRS before July 2007 – Now may change Plan? – Employee Contributions 5.5%
• Fire Pension Plan – Union Contract included reopening language for pension and going to FRS was discussed at time of union contract. – Loss of State Insurance Proceeds if go to FRS – Employee Contributions 11.0% – No Social Security or Social Security Replacement Plan
• Police Pension Plan – Union Contract included reopening language for pension and going to FRS was discussed at time of union contract. – Loss of State Insurance Proceeds if go to FRS – Employee Contributions 0.5%
Pension Cost • Pensions – Funding Difference between beginning FY03 to Projected Budget FY10
– City-Wide Increase - $11,014,500 – General Fund Increase – $6,175,200
C it y C o nt r ib ut io n Hist o r y G ener al F und B eg inning
Pr o ject ed
A ct ual
A ct ual
A ct ual
A ct ual
A ct ual
A ct ual
F Y 0 9 B ud g et
F Y 10 B ud g et
FY 2 0 0 3
FY 2004
FY 2 0 0 5
FY 2 0 0 6
FY 2 0 0 7
FY 2 0 0 8
T o t al
T o t al
Gener al Pensio n
76 7,4 0 0
1,9 51,12 3
2 ,3 3 6 ,9 72
2 ,58 6 ,3 70
2 ,4 75,10 2
2 ,2 73 ,714
2 ,2 8 9 ,2 0 0
2 ,3 50 , 10 0
F ir e Pensio n
719 ,3 0 0
1,712 ,56 8
2 ,0 8 5,0 6 2
2 ,6 6 2 ,6 19
2 ,79 5,8 3 9
2 ,6 8 9 ,516
2 , 73 1,10 0
2 ,8 6 5,8 0 0
4 0 2 ,4 0 0
1,18 8 ,58 6
1,4 4 4 ,50 1
2 ,0 53 ,9 9 2
2 ,19 6 ,9 2 9
2 ,4 6 8 ,6 4 1
2 ,4 14 ,8 0 0
2 ,3 9 8 ,6 0 0
116 ,73 7
4 3 3 ,76 3
4 15,2 0 0
3 9 0 ,50 0
7,58 4 ,6 0 7
7,8 6 5,6 3 4
7,8 50 ,3 0 0
8 ,0 0 5,0 0 0
Po lice Pensio n F lo r i d a R et . Sys. T o t al
1,8 8 9 ,10 0
4 ,8 52 ,2 77
5,8 6 6 ,53 5
7,3 0 2 ,9 8 1
Ot her F und s B eg inning
Pr o ject ed
A ct ual
A ct ual
A ct ual
A ct ual
A ct ual
A ct ual
F Y 0 9 B ud g et
F Y 10 B ud g et
FY 2 0 0 3
FY 2004
FY 2 0 0 5
FY 2 0 0 6
FY 2 0 0 7
FY 2 0 0 8
T o t al
T o t al
1,0 0 6 ,4 0 0
2 ,76 8 ,0 0 0
3 ,4 0 2 ,9 9 8
3 ,8 6 2 ,53 9
3 ,73 1,8 2 3
3 ,9 9 5,0 3 6
5,0 6 6 ,4 0 0
4 ,8 6 1,10 0
F ir e Pensio n
52 ,3 0 0
18 9 ,4 2 0
2 4 4 ,4 8 8
2 75,8 9 2
2 2 9 ,58 6
2 70 ,4 6 6
2 9 1,0 0 0
3 2 0 ,4 0 0
Po lice Pensio n
3 3 ,0 0 0
18 6 ,3 9 5
2 0 3 ,4 8 6
2 10 ,50 8
2 6 9 ,3 70
2 9 2 ,6 6 0
2 58 ,70 0
2 3 9 ,2 0 0
1,0 9 1,70 0
3 ,14 3 ,8 15
3 ,8 50 ,9 72
4 ,3 4 8 ,9 3 9
115,3 6 6 4 ,3 4 6 ,14 5
4 8 8 ,0 75 5,0 4 6 ,2 3 7
4 6 5,6 0 0 6 ,0 8 1,70 0
515,2 0 0 5,9 3 5,9 0 0
Gener al Pensio n
F lo r i d a R et . Sys. T o t al
A ll F und s
Gener al Pensio n F ir e Pensio n Po lice Pensio n
Pr o ject ed
A ct ual
A ct ual
A ct ual
A ct ual
A ct ual
A ct ual
F Y 0 9 B ud g et
F Y 10 B ud g et
FY 2 0 0 3
FY 2004
FY 2 0 0 5
FY 2 0 0 6
FY 2 0 0 7
FY 2 0 0 8
T o t al
T o t al
6 ,4 4 8 ,9 0 9
6 ,2 0 6 ,9 2 5
6 ,2 6 8 ,750
7,3 55,6 0 0
7,2 11,2 0 0
3 ,0 2 5,4 2 5
2 ,9 59 ,9 8 2
3 ,0 2 2 ,10 0
3 ,18 6 ,2 0 0
1,773 ,8 0 0
4 ,719 ,12 3
5,73 9 ,9 70
771,6 0 0
1,9 0 1,9 8 8
2 ,3 2 9 ,550
4 3 5,4 0 0
1,3 74 ,9 8 1
1,6 4 7,9 8 7
2 ,9 3 8 ,511 2 ,2 6 4 ,50 0
F lo r i d a R et . Sys. T o t al
B eg inning
2 ,9 8 0 ,8 0 0
7,9 9 6 ,0 9 2
9 ,717,50 7
11,6 51,9 2 0
2 ,4 6 6 ,2 9 9
2 ,76 1,3 0 1
2 ,6 73 ,50 0
2 ,6 3 7,8 0 0
2 3 2 ,10 3
9 2 1,8 3 8
8 8 0 ,8 0 0
9 0 5,70 0
13 ,9 3 2 ,0 0 0
13 ,9 4 0 ,9 0 0
11,9 3 0 ,752
12 ,9 11,8 71
Combined Annual Pensions Paid As of 9/30/08 100% 75% General Fire Police
50% 25% 0% $2,746$20,000
$20,000$40,000
$40,000$60,000
$60,000$125,000
General Pension Annual Pensions Paid As of 9/30/08 $40,000-$60,000 (16) 3%
$60,000-$100,000 (8) 2%
$20,000-$40,000 (134) 26%
$2,746-$20,000 (348) 69%
Fire Pension Annual Pensions Paid As of 9/30/08 $60,000-$100,000 (6) 3% $40,000-$60,000 (48) 28%
$5,718-$20,000 (19) 11%
$20,000-$40,000 (100) 58%
Police Pension Annual Pensions Paid As of 9/30/08 $60,000-$125,000 (36) 29%
$40,000-$60,000 (22) 18%
$2,145-$20,000 (35) 29%
$20,000-$40,000 (29) 24%
Retiree and Beneficiary Annual Pensions Paid As of 9/30/08 Annual Pension
General
Firefighters
Police Officers
Total
Number Percentage
Number Percentage
Number Percentage
Number Percentage
<$10,000
152
30.04%
4
2.33%
7
5.74%
163
20.38%
$10,000-$20,000
196
38.73%
15
8.72%
28
22.93%
239
29.85%
$20,000-$30,000
88
17.39%
44
25.58%
22
18.03%
154
19.25%
$30,000-$40,000 $40,000-$50,000
46 12
9.09% 2.37%
56 24
32.56% 13.95%
7 12
5.74% 9.84%
109 48
13.63% 6.00%
$50,000-$60,000
4
0.79%
24
13.95%
10
8.20%
38
4.75%
$60,000-$70,000
5
0.99%
4
2.33%
11
9.02%
20
2.50%
$70,000-$80,000
2
0.40%
1
0.58%
14
11.48%
17
2.13%
7
5.74%
7
0.88%
1
0.82%
2
0.25%
3
2.46%
3
0.38%
122
100.00%
800
100.00%
$80,000-$90,000 $90,000-$100,000
1
0.20%
>$100,000 506
100.00%
172
100.00%
HMO Non Medicare
PPO Non Medicare
Medicare
Family
Family
Family
$13,904.40
$11,679.12
$5,721.60
Annual Insurance Permiums (Paid by Pensioner)
Defined Benefit Plans Active and Retired Participants As of September 2008 General Pension*
Fire Pension
Police Pension
FRS
Num ber of Active Participants
345
108
157
293
Num ber of Retired and DROP Participants
608
172
122
N/A
$10,955,365
$5,466,527
$2,534,905
N/A
Average Annual Pension
$18,019
$31,782
$38,432
**
Annual Pension Highest to Low est Highest Low est
$96,690 $2,746
$79,186 $5,718
$125,771 $2,145
**
2.1% Max 63%
3.0% Max 75%
3.0% Max 100%
Total FY 2008 Pensions Benefits Paid
Current Annual Retirem ent Benefit Percentage Based On Years Of Service * General Pension closed effective June 18, 2007. ** Police and General Benefits
N/A
1.60-3.0% Max 100%
City Contribution Percentage Fiscal Year 2009 • General Pension • Fire Pension • Police Pension • FRS – Regular Class – Senior Mgmt Class – Elected Official Class – Special Risk Class
Employee 5.5% 11.0% 0.5%
City 49.58% 58.00% 35.68%
Total 55.08% 83.72% 45.03%
0.00% 0.00% 0.00% 0.00%
9.85% 13.12% 16.53% 20.92%
9.85% 13.12% 16.53% 20.92%
General Pension Cost As A Percentage Of Salaries History
ANNUAL CITY CONTRIBUTIONS FY FY FY FY FY FY FY FY
03 04 05 06 07 08 09 Budgeted 10 Projected
11.30% 28.60% 33.77% 37.63% 35.74% 43.42% 49.58% 53.23%
PREPAYMENT RESERVE USED 9.88% 0.00% 0.00% 0.00% 0.00% 0.00% 0.00% 0.00%
STATE INSURANCE PROCEEDS 0.00% 0.00% 0.00% 0.00% 0.00% 0.00% 0.00% 0.00%
EMPLOYEE CONTRIBUTIONS 5.50% 5.50% 5.50% 5.50% 5.50% 5.50% 5.50% 5.50%
TOTAL ACTUAL CONTRIBUTIONS 26.68% 34.10% 39.27% 43.13% 41.24% 48.92% 55.08% 58.73%
General Pension Contribution History
FY FY FY FY FY FY FY FY
03 04 05 06 07 08 09 Budgeted 10 Projected
City Contributions
Pre-Payment Reserve Used
State Insurance Proceeds
1,760,559 4,611,350 5,860,702 6,477,705 6,247,958 6,268,750 7,359,900 7,211,000
1,444,925 -
-
Employee Contributions 858,380 886,797 953,417 946,730 961,556 794,006 816,500 745,100
Total Contributions 4,063,864 5,498,147 6,814,119 7,424,435 7,209,514 7,062,756 8,176,400 7,956,100
Pensacola General Employees Pension Fund Total Market Value
Cash & Equivalents, 2,086,853, 2.6%
$79,373,573 (02/28/09)
Fixed Income, 37,173,321, 46.8%
Equities, 40,113,399, 50.5%
Total Market Value
Total Market Value
$100, 202,547 (9/30/08)
$119,690,414 (9/30/07)
Fire Pension Cost As A Percentage Of Salaries History ANNUAL CITY CONTRIBUTIONS FY FY FY FY FY FY FY FY
03 04 05 06 07 08 09 Budgeted 10 Projected
18.20% 40.60% 46.83% 53.80% 58.33% 56.10% 58.00% 57.80%
STATE INSURANCE PROCEEDS 9.09% 13.20% 11.71% 12.34% 14.79% 15.15% 14.72% 14.50%
EMPLOYEE CONTRIBUTIONS 11.00% 11.00% 11.00% 11.00% 11.00% 11.00% 11.00% 11.00%
TOTAL ACTUAL CONTRIBUTIONS 38.29% 64.80% 69.54% 77.14% 84.12% 82.25% 83.72% 83.30%
Fire Pension Contribution History
City Contributions FY FY FY FY FY FY FY FY
03 04 05 06 07 08 09 Budgeted 10 Projected
771,210 1,807,624 2,424,270 2,938,511 3,025,425 2,959,982 3,022,100 3,186,178
Pre-Payment Reserve Used -
State Insurance Proceeds 507,383 587,799 579,686 674,181 766,923 799,135 766,923 799,135
Employee Contributions 441,869 489,752 568,735 600,810 570,531 580,431 573,200 606,418
Total Contributions 1,720,462 2,885,175 3,572,691 4,213,502 4,362,879 4,339,548 4,362,223 4,591,731
Pensacola Firefighters’ Relief and Pension Fund Total Market Value
Cash & Equivalents, 1,130,799, 1.8%
$63,560,489 (02/28/09)
Fixed Income, 29,722,120, 46.8%
Equities, 32,707,570, 51.5%
Total Market Value
Total Market Value
$78,805,728 (9/30/08)
$92,553,922 (9/30/07)
Police Pension Cost As A Percentage Of Salaries History ANNUAL CITY CONTRIBUTIONS FY 03 FY 04 FY 05 FY 06 FY 07 FY08 FY09 Budgeted FY10 Projected
7.10% 19.00% 19.00% 28.59% 31.26% 35.60% 35.68% 36.78%
PREPAYMENT RESERVE USED 1.05% 3.43% 9.70% 0.10% 0.00% 0.00% 0.00% 0.00%
STATE INSURANCE PROCEEDS 9.66% 10.44% 10.62% 10.25% 8.40% 8.54% 8.85% 7.81%
EMPLOYEE CONTRIBUTIONS 8.50% 5.50% 2.50% 0.50% 0.50% 0.50% 0.50% 0.50%
TOTAL ACTUAL CONTRIBUTIONS 26.31% 38.37% 41.82% 39.44% 40.16% 44.64% 45.03% 45.09%
Note: Actuarial Report not approved by the Police Pension Board for FY10 contributions. Will use FY09 contribution rates.
Police Pension Contribution History City Contributions FY FY FY FY FY FY FY FY
03 04 05 06 07 08 09 Budgeted 10 Projected
432,241 1,285,399 1,759,486 2,264,514 2,466,299 2,761,301 2,673,500 2,637,800
Pre-Payment Reserve Used 61,122 231,940 676,096 7,438 -
State Insurance Proceeds* 717,421 706,380 662,759 662,759 662,759 662,759 662,759 662,759
Employee Contributions 589,016 375,764 192,508 36,327 39,445 38,793 37,500 35,900
Total Contributions 1,799,800 2,599,483 3,290,849 2,971,038 3,168,503 3,462,853 3,373,759 3,336,459
* Can only apply $619,399 for contributions each year. Note: Actuarial Report not approved by the Police Pension Board for FY10 contributions. Will use FY09 contribution rates.
Pensacola Police Pension Fund Total Market Value
Cash & Equivalents, 1,223,163, 3.0%
$40,719,075 (02/28/09)
Equities, 18,662,448, 45.8%
Fixed Income, 20,833,464, 51.2%
Total Market Value
Total Market Value
$51,605,517 (9/30/08)
$57,273,509 (9/30/07)
Reconciliation of Contribution Increases Reason
General Pension
Due to Net Negative Investement Returns
$1,446,348
Due to Losses
$2,550,140
Due to Plan Amendments
$125,060
Due to Actual Experience Different From Assumptions
$233,808
Due to Method Changes
$1,772,594
Fire Pension $1,914,778
Police Pension $1,255,369
$1,292,809 $296,996 ($731,624)
Due to Payroll Different Than Assumed
($891,734)
Due to Demographic Changes
$201,184
$934,450
Total Increase in Contributions
$5,437,400
$2,414,600
$50,655 ($515,362) $292,919 ($173,990) $2,202,400
Schedule of Funding Progress All Pension Plans Combined Actuarial Valuation Date 9/30/1996 9/30/1997 9/30/1998 9/30/1999 9/30/2000 9/30/2001 9/30/2002 9/30/2003 9/30/2004 9/30/2005 9/30/2006 9/30/2007 9/30/2008
Market Value of Assets (In Millions)
Actuarial Value of Assets (In Millions)
Actuarial Accrued Liability (AAL)
150,365 183,885 193,079 212,846 218,485 201,000 182,189 198,604 213,850 228,941 239,103 269,518 231,023
137,985 160,673 178,871 195,938 212,436 219,296 215,402 218,376 220,312 225,817 235,791 254,956 261,441
153,906 202,892 215,707 245,823 263,454 269,514 265,855 289,820 300,882 308,689 306,766 332,464 355,032
Unfunded AAL (UAAL) 15,921 42,219 43,144 49,885 51,018 50,218 50,353 71,444 80,570 82,872 80,975 77,508 93,091
Funded Ratio 89.66% 79.19% 82.92% 79.71% 80.63% 81.37% 81.02% 75.35% 73.22% 73.15% 76.86% 76.69% 73.64%
Covered Payroll 16,180 21,613 23,491 25,492 23,994 24,810 25,650 25,873 27,059 29,864 30,372 27,449 26,572
Schedule of Funding Progress General Pension Actuarial Valuation Date 9/30/1996 9/30/1997 9/30/1998 9/30/1999 9/30/2000 9/30/2001 9/30/2002 9/30/2003 9/30/2004 9/30/2005 9/30/2006 9/30/2007 9/30/2008
Actuarial Market Value of Value of Assets (In Assets (In Millions) Millions) 74,086 81,634 89,237 103,000 105,501 95,993 86,264 91,598 97,324 103,608 107,866 119,690 100,490
68,668 81,634 89,287 97,992 104,738 106,476 104,817 105,000 104,027 104,435 106,662 113,372 115,679
Actuarial Accrued Liability (AAL) 71,524 110,292 118,515 131,148 140,905 141,680 140,310 155,855 160,845 157,913 157,417 163,684 166,311
Unfunded AAL (UAAL) 2,856 28,658 26,228 33,156 36,167 35,204 35,493 50,855 56,818 53,478 50,755 50,312 50,632
Funded Ratio 96.00% 74.00% 75.30% 74.70% 74.30% 75.20% 74.70% 67.40% 64.70% 66.10% 67.76% 69.26% 69.56%
Covered Payroll 6,937 11,889 13,932 15,465 14,030 14,480 15,445 15,286 15,708 16,904 17,598 14,807 13,546
Schedule of Funding Progress Fire Pension Actuarial Valuation Date 9/30/1996 9/30/1997 9/30/1998 9/30/1999 9/30/2000 9/30/2001 9/30/2002 9/30/2003 9/30/2004 9/30/2005 9/30/2006 9/30/2007 9/30/2008
Market Value of Assets (In Millions)
Actuarial Value of Assets (In Millions)
51,744 63,055 65,803 72,288 73,950 66,082 60,355 67,208 72,892 78,536 84,440 92,554 78,885
46,524 51,924 57,390 63,803 70,000 73,385 71,441 72,891 73,263 74,679 78,872 85,956 88,835
Actuarial Accrued Liability (AAL) 56,321 60,774 65,082 76,345 82,307 85,681 83,645 85,334 85,214 92,165 97,021 100,973 107,803
Unfunded AAL (UAAL) 9,797 8,850 7,692 12,542 12,307 12,296 12,104 12,443 11,951 17,486 18,149 15,017 18,968
Funded Ratio 82.60% 85.40% 88.20% 83.60% 85.00% 85.60% 85.50% 85.40% 86.00% 81.00% 81.30% 85.10% 82.40%
Covered Payroll 3,971 4,038 3,754 4,189 4,321 4,427 3,887 4,103 4,468 5,025 4,840 5,041 5,513
Schedule of Funding Progress Police Pension Actuarial Valuation Date
Market Value of Assets (In Millions)
Actuarial Value of Assets (In Millions)
24,535 31,095 33,631 37,558 39,034 38,925 35,570 39,798 43,634 46,797 50,135 57,273 51,698
22,793 27,115 30,194 34,143 37,698 39,435 39,144 40,485 43,022 46,703 50,257 55,628 57,427
9/30/1996 9/30/1997 9/30/1998 9/30/1999 9/30/2000 9/30/2001 9/30/2002 9/30/2003 9/30/2004 9/30/2005 9/30/2006 9/30/2007 9/30/2008 **
Actuarial Accrued Liability (AAL) 26,061 31,826 36,418 38,330 * 40,242 * 42,153 41,900 48,631 54,823 58,611 62,328 67,807 80,918
Unfunded AAL (UAAL) 3,268 4,711 6,224 4,187 2,544 2,718 2,756 8,146 11,801 11,908 12,071 12,179 23,491
Funded Ratio 87.46% 85.20% 83.39% 89.08% 93.68% 93.60% 93.40% 83.20% 78.50% 79.68% 80.60% 82.04% 70.97%
Covered Payroll 5,272 5,686 5,805 5,838 5,643 5,859 6,318 6,484 6,883 7,934 7,153 7,601 7,513
* Estimated Numbers ** Actuarial Report not approved by the Police Pension Board as of 9/30/08 contributions. Will use prior year contribution rates.
General Pension Phased-In Recognition of Investment Income P e n s i o n Ye a r
20 0 7
2 00 8
20 0 9
2 01 0
20 1 1
2 0 12
2 01 3
2 0 14
Fi s c a l Ye a r
20 0 5
2 00 6
20 0 7
2 00 8
20 0 9
2 0 10
2 01 1
2 0 12
GE NE RAL
C u r r e n t Ye a r In v e s t me n t In c ome
2 47 , 1 91
7 9, 66 1
1 , 3 6 4, 2 9 1
Fi r s t P r i o r Ye a r
1 43 , 7 25
2 4 7, 19 1
7 9, 6 6 1
1 , 36 4 , 29 1
Se c o nd P r i or Ye a r
3 27 , 3 29
1 4 3, 72 5
2 4 7, 1 9 1
7 9 , 66 1
1 , 3 64 , 2 91
3 2 7, 32 9
1 4 3, 7 2 5
24 7 , 19 1
79 , 6 61
1 , 3 64 , 2 91
14 3 , 72 5
2 47 , 1 91
79 , 6 61
T h i r d P r i o r Ye a r
(2 , 9 01 , 6 07 )
Fou r t h P r i o r Ye a r
(2 , 8 82 , 1 86 )
(2, 9 0 1, 60 7 )
3 2 7, 3 2 9
T o t a l R e c o gn i z e d Inv e s t me n t Ga i n(Lo s s )
(5 , 0 65 , 5 48 )
(2, 1 0 3, 70 1 )
2 , 1 6 2, 1 9 7
(4, 92 2 , 39 4 )
(3, 08 7 , 52 6 )
(4 , 9 22 , 3 94 )
(3 , 2 31 , 2 51 )
(4 , 9 22 , 3 94 )
(3 , 4 78 , 4 42 )
-
-
-
-
(4, 9 2 2, 3 9 4)
-
1, 3 6 4, 2 9 1
(4 , 92 2 , 39 4 )
(3, 5 5 8, 1 0 3)
(4 , 92 2 , 39 4 )
Fire Pension Phased-In Recognition of Investment Income Pension Year
2006
2007
2008
2009
2010
Fiscal Year
2004
2005
2006
2007
2008
2011 2009
2012
2013
2014
2010
2011
2012
FIRE Current Year Investment Income First Prior Year Second Prion Year Third Prior Year Fourth Prior Year Total Recognized Investment Gain(Loss)
172,338
314,925
205,125
1,122,345
(3,822,672)
626,288
172,338
314,925
205,125
1,122,345
(1,892,186)
626,288
172,338
314,925
205,125
1,122,345
(3,822,672)
(2,203,903)
(1,892,186)
626,288
172,338
314,925
205,125
1,122,345
(143,102)
(2,203,903)
(1,892,188)
626,289
172,336
314,924
205,125
(3,440,565)
(2,982,538)
(573,512)
2,441,022
(2,007,941)
(3,822,672)
(2,180,278)
(2,495,202)
(3,822,672)
-
1,122,343
(3,822,672)
(2,700,329)
(3,822,672)
SUMMARY • • • • •
The cumulative funding of all 3 plans is 73.64% funded 9/30/07 - $270 million in assets 9/30/08 - $231 million in assets 2/28/09 - $183 million in assets Pension Plan Investments are market sensitive
• Earnings need to be looked at as long range – 30 to 40 years • General Pension is closed to new members. New general employees hired are placed in FRS.
Future Issues • Litigation – Fire – General
• Actuarially no cost amendments to the Fire Pension Plan - approved when collective bargaining agreement ratified - Need to send to legislature • Pension Obligation Bonds
Cost Reduction Options
General Pension Possible Benefit Changes Employer Contribution Rate
ITEM Valuation Results - Baseline
Unfunded Accrued Liability (UAL)
Normal
UAL
Total
Total Employer Contribution
50,631,882
14.31%
38.92%
53.23%
7,210,946
1. 1.6% Accrual Rate Reduction from Baseline
48,201,033 2,430,849
12.30% 2.01%
37.05% 1.87%
49.35% 3.88%
6,685,298 525,648
2. 1.05% Accrual Rate Reduction from Baseline
44,833,165 5,798,717
10.20% 4.11%
34.46% 4.46%
44.66% 8.57%
6,050,305 1,160,641
3. Life Annuity Normal Form Reduction from Baseline
47,155,105 3,476,777
12.50% 1.81%
36.25% 2.67%
48.75% 4.48%
6,603,187 607,759
4. Benefit Freeze Reduction from Baseline
46,260,420 4,371,462
2.53% 11.78%
35.56% 3.36%
38.09% 15.14%
5,160,136 2,050,810
5. 5 Year Final Average Salary Reduction from Baseline
48,656,388 1,975,494
13.60% 0.71%
37.40% 1.52%
51.00% 2.23%
6,908,537 302,409
6. Eliminate COLA Reduction from Baseline
45,829,543 4,802,339
12.11% 2.20%
35.23% 3.69%
47.34% 5.89%
6,412,210 798,736
*Administrative expenses and adjustment for timing of contributions only Note: The sum of any 2 benefits added together will not be the exact amount if combined.
Fire Pension Possible Benefit Changes Employer Contribution Rate
ITEM
Unfunded Accrued Liability (UAL)
Valuation Results - Baseline
18,968,619
1. 2.5% Accrual Rate (max 75%) Reduction from Baseline
Normal
Total Employer Contribution
UAL
Total
29.72%
28.08%
57.80%
3,186,178
16,114,404 2,854,215
26.84% 2.88%
25.26% 2.82%
52.10% 5.70%
2,871,930 314,248
2. 2.0% Accrual Rate (max 75%) Reduction from Baseline
14,749,263 4,219,356
20.48% 9.24%
23.24% 4.84%
43.72% 14.08%
2,410,050 776,128
3. 10 Year Certain Life Annuity Normal Form Reduction from Baseline
15,657,536 3,311,083
24.00% 5.72%
24.57% 3.51%
48.57% 9.23%
2,699,546 486,632
4. Benefit Freeze Reduction from Baseline
14,181,790 4,786,829
6.90% 22.82%
36.01% -7.93%
42.91% 14.89%
2,365,815 820,363
5. 5 Year Final Average Salary Reduction from Baseline
16,289,469 2,679,150
26.14% 3.58%
25.33% 2.75%
51.47% 6.33%
2,837,039 349,139
6. Eliminate COLA Reduction from Baseline
9,973,547 8,995,072
17.91% 11.81%
18.79% 9.29%
36.70% 21.10%
2,022,647 1,163,531
Note: The sum of any 2 benefits added together will not be the exact amount if combined.
Police Pension Possible Benefit Changes Employer Contribution Rate
ITEM
Unfunded Accrued Liability (UAL)
Normal
UAL
Total
Total Employer Contribution
Valuation Results - Baseline
23,491,042
22.55%
20.87%
43.42%
2,637,749
1. 2.5% Accrual Rate (max 75%) Reduction from Baseline
16,932,118 6,558,924
18.94% 3.61%
15.04% 5.83%
33.98% 9.44%
1,928,540 709,209
2. 2.0% Accrual Rate (max 75%) Reduction from Baseline
11,291,444 12,199,598
15.56% 6.99%
10.03% 10.84%
25.59% 17.83%
1,298,220 1,339,529
3. 10 Year Certain Life Annuity Normal Form Reduction from Baseline
17,824,132 5,666,910
19.39% 3.16%
15.84% 5.03%
35.23% 8.19%
2,022,458 615,291
4. Benefit Freeze Reduction from Baseline
7,292,693 16,198,349
4.00% 18.55%
6.48% 14.39%
10.48% 32.94%
200,593 2,437,156
5. 5 Year Final Average Salary Reduction from Baseline
20,244,375 3,246,667
20.69% 1.86%
17.99% 2.88%
38.68% 4.74%
2,281,651 356,098
6. Eliminate COLA Reduction from Baseline
13,652,657 9,838,385
16.91% 5.64%
12.13% 8.74%
29.04% 14.38%
1,557,413 1,080,336
IMPORTANT NOTE: Minimum benefits that may be required by law have neither been defined nor valued.
Note: The sum of any 2 benefits added together will not be the exact amount if combined.
Where Do We Go From Here? Savings Combinations
General, Fire & Police Combined Life Annuity Normal Form Fiscal Year 2010 City Contribution Before Changes
Plan General Pension $
7,210,946
Fire Pension Police Pension Total Savings
$
Changes (607,759) $
7,818,705
3,186,178
(486,632)
3,672,810
2,637,749
(615,291)
3,253,040
13,034,873
$
City Contribution Before Changes
$ (1,709,682) $
14,744,555
General, Fire & Police Combined 5 Year Average Final Salary Fiscal Year 2010 City Contribution Before Changes
Plan General Pension $
7,210,946
Fire Pension Police Pension Total Savings
$
Changes (302,409) $
7,513,355
3,186,178
(349,139)
3,535,317
2,637,749
(356,098)
2,993,847
$ (1,007,646) $
14,042,519
13,034,873
$
City Contribution After Changes
General, Fire & Police Combined 0.5% Reduction in Accrual Rate City Contribution Before Changes
Plan General Pension
$
7,210,946
Changes $
City Contribution After Changes
(525,648) $
6,908,537
Fire Pension
3,186,178
(314,248)
2,837,039
Police Pension
2,637,749
(709,209)
2,281,651
Total Savings
$
13,034,873
$ (1,549,105) $
12,027,227
General, Fire & Police Combined Freezing Plan Benefits Fiscal Year 2010 City Contribution Before Changes
Pla n Gene ra l Pension
$
7,210,946
City Contribution After Cha nge s
Changes $
(2,050,810)
$
5,160,136
Fire Pension
3,186,178
(820,363)
2,365,815
Police Pension
2,637,749
(2,437,156)
200,593
Subtotal
$
13,034,873
$
(5,308,329)
Loss of Contribution from State Insurance Proceeds Fire and Police $ 1,418,435 Ne t Savings* Ne t City Obligation
$
$
$
7,726,544
1,418,435
(3,889,894) $
9,144,979
*Net savings a ssumes no other pension plan provide d for employee s.
Issues Boards will determine how the plan will continue if the plans are frozen • Purchase annuities – immediate cost to city to purchase annuities • Payout all participants, retired and active, in a lump-sum – immediate cost to city to fund lump-sums • Continue as they are currently – city’s annual cost will be determined by actuary each year
What do you provide employees – Defined Contribution Plan – General, Fire & Police – FRS for Fire and Police • Employees would have choice which plan current or FRS • Close plans would lose the state insurance premium tax money
– Provide No Retirement Plan
QUESTIONS
City of Pensacola Employee’s Executive Committee City Council Workshop April 2, 2009
Employee’s Executive Committee Represents and Protects The Interest Of All Members of the Civil Service Created By Laws of Florida
Ch 84-510 Section 17
Employee’s Executive Committee Chairperson
Brenda Kahalley
Group 5
Police, Fire, MIS
Vice-Chairperson
Anthony Bosso
Group 6
Energy Services of Pensacola
Secretary
Yvette McLellan
Group 1
Finance, Community Development, Housing, Employee Services, Engineering
Treasurer
Michael Laven
Group 4
Airport, Library Port
Gene Ryder
Group 2
Parks & Recreation
Toney McCreary
Group 3
Public Works, Sanitation Services & Fleet Management
Cheryl Jackson Eric Ervin Darryl Singleton
Group 1 Group 2 Group 6
Alternates
City of Pensacola General Pension Plan Change is Necessary Allow For Thorough Research And Comparisons
Independent Party
Informed Decision Consensus
“Cadillac Pensions”
Average Civil Service Worker
608 Current General Pension Retirees
Average Pension - $18,019 68.77% Receive Less Than $20,000 Per Year Family Health Insurance - $14,000 Per Year
Civil Service Employees Position
Yearly Salary Starting Salary Maximum Salary
30 Years (63%) Maximum Pension
Clerk I Clerk II Clerk III
19,115 20,092 21,091
29,702 31,220 32,760
18,712.26 19,668.60 20,638.80
Customer Service Representative I Customer Service Representative II
23,171 24,545
35,214 38,188
22,184.82 24,058.44
Maintenance Worker I Maintenance Worker II Maintenance Worker III
20,092 21,091 23,171
31,220 32,760 35,214
19,668.60 20,638.80 22,184.82
Public Safety Telecommunicator I Public Safety Telecommunicator II
24,585 27,040
38,188 41,558
24,058.44 26,181.54
Equipment Operator II Equipment Operator III
23,171 24,545
35,214 38,188
22,184.82 24,058.44
Teamwork
Budgets and Personnel Reduction
73 Full Time Positions Since FY 2008 No Pay Increases
FY 2009 - $1,122,000 FY 2010 – $2,244,000
Personal Budgets Being Tightened
Health Insurance Groceries Gasoline
Pension Structure Changes
Three Changes In Past 30 Years
1979 – Closed General Pension To New Employees. New Employees Put In Deferred Compensation Plans 1997 – Reopened General Pension
Employees Allowed To Buy In Years of Service One-Time Chance
2007 – Closed General Pension to New Employees
New Employees Put In Florida Retirement System Existing Employees Allowed To Remain In Current Plan Or Join Florida Retirement System Irrevocable Decision
Civil Service Employees Affected Customer Service Employees Equipment Operators
Library Workers & Recreation Aids
Picks Up Garbage Mows Parks After School Computer Labs
Hurricane/Disaster Recovery
Independent Study
Support Hiring Outside Consultant
Evaluate and Compare
Similar Cities Neighboring Governmental Agencies State and Federal Governments
Will Provide Clearer Picture
Thank You
Pensacola Firefighters Relief and Pension Fund
Good News, Bad News
Brief History
In 1939 the state establishes Chapter 19112 Section 175.041 Laws of Florida allowing collection of excise tax on casualty insurance for the purpose of funding dedicated firefighter pension plans.
Where it Went Wrong !
1957- revealed no portfolio 1961- $2,962,000 (original unfunded) loss over the 18 years 1971- (14 year delay)-”stair-step funding” assumes 64.6% of payroll 1991-2011 Paid $4,000 of recommended $135,000 initial payment 2008-required payment $1,462,359 (original unfunded-grown now to $9,166,787)
THE GOOD NEWS! Paid off in 7 years: 2008 - $1,936,150 2015 - $613,946 *Don’t give up now, almost there!* 2038 - $0!
A Well Managed Plan
Return on investment: 2004 - 15.1% 2005 - 10.2% 2006 - 10.6% 2007 - 14.5% 2008 - (13.3%) - Rank in top 30%
PENSACOLA POLICE PENSION ROB BELL PRESIDENT FRATERNAL ORDER OF POLICE, LODGE 71 CHAIRMAN POLICE PENSION BOARD
Pension Plan History – Police Pension – effective October 22, 1959 – City ordinance – Five (5) Trustees – Police Officers continued in the General Pension Plan • – Police Plan was a supplemental plan • – No longer in General Pension Plan as of October 1, 1979 • • • •
“CADILLAC PENSION” • OFFICERS HIRED PRIOR TO 1979 – PARTICIPATED IN BOTH THE GENERAL AND POLICE PENSIONS – THIS PROVIDED THESE OFFICERS WITH A COMBINED 4% BENEFIT – ONLY 4 REMAIN
CURRENT PENSION • DEFINED BENEFIT – 3% MULTIPLIER – MINIMUM 25 YEARS OF SERVICE – VESTED IN 10 YEARS – AVERAGE PENSION $38,432.00
PENSION HISTORY • PRIOR TO 1997 – 2% MULTIPLIER – MINIMUM 30 YEARS OF SERVICE – 10 YEARS VESTED 1997 GENERAL PENSION WAS RE-OPENED POLICE AND FIRE WERE EXCLUDED
PENSION HISTORY (CONT.) • IN LIEU OF THE GENERAL PENSION PARTICIPATION: – CITY STAFF ENHANCED THE POLICE PENSION. • FROM 2% TO A 3% MULTIPLIER • DECREASED MINIMUIM YEARS OF SERVICE FROM 30 TO 25 YEARS • THESE INCREASES BROUGHT US IN LINE WITH OTHER LAW ENFORCEMENT PENSIONS
PENSION HISTORY (CONT.) • FURTHER PLAN ENHANCEMENTS – 2003 CONTRACT NEGOITATIONS • IN LIEU OF PAY RAISES CITY STAFF PROPOSED A REDUCTION IN THE OFFICER’S CONTRIBUTION TO THE PENSION PLAN TO .5% FROM 8.5% THIS REDUCTION WAS SPREAD OUT OVER A 3 YEAR PERIOD
COMPARISONS POLICE PLAN
FRS (SPECIAL RISK CLASS) 3% 25 YEARS 6 YEARS VEST. 0 100% MAX
• OUR PENSION IS COMPARABLE IN BENEFITS TO THE MAJORITY OF OTHER 185 PLANS ACROSS THE STATE • DUE TO INVESTMENTS OUR PENSION HAS OUT PERFORMED MANY PLANS IN FLORIDA • IN TOP 30TH PERCENTILE FOR THE QUARTER
WHY PUBLIC SERVICE PRIVATE/PUBLIC BETTER SALARY PAY FOR EDUCATION LESS OR NO BENEFITS/LITTLE OR NO PENSION OFFICERS WANT TO MAKE A DIFFERENCE OFFICERS HAVE A SENCE OF COMMUNITY PRIDE OFFICERS ACCEPT LESS PAY FOR BETTER BENEFITS AND PENSIONS
• PENSIONS AND BENEFITS ARE RECRUITING TOOLS • LAW ENFORCEMENT IS A HIGH LIABILITY AREA
– EDUCATION AND EXPERIENCE ARE VITAL IN REDUCING THE CITIES EXPOSURE TO LIABILITY
A DEFINED BENEFIT PENSION HELPS IN RETAINING EXPERIENCED POLICE OFFICERS
HIGH RISK BENEFIT BECAUSE OUR LIFE IS ON THE LINE FOR YOU EVERYDAY
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