HomeMy WebLinkAbout10A - PLFD Pension
16200 Eagle Creek Avenue S.E.
Prior Lake, MN 55372-1714
STAFF AGENDA REPORT
MEETING DATE:
AGENDA #:
PREPARED BY:
AGENDA ITEM:
AUGUST 16, 2004
lOA
RALPH TESCHNER, FINANCE DIRECTOR
CONSIDER APPROVAL OF A RESOLUTION APPROVING A
PENSION INCREASE FOR THE PRIOR LAKE FIRE
DEPARTMENT FIREFIGHTERS RELIEF AND PENSION
ASSOCIATION
DISCUSSION:
The Prior Lake Volunteer Fire Dept. and Relief Association requests
that pension benefits be increased as of January 1,2005 from $3,800
to $4,000 per year of service. They are asking the City Council to
authorize an amendment to the Association Bylaws which provides
that a firefighter who has served in the Prior Lake Fire Department
for 20 years or more prior to resignation and has reached the age of
50 years old or more and been a member of the Association for at
least 10 years shall receive $4,000 for each year of active service on
the department. This means that a volunteer retiring with twenty
years of service would receive a lump sum pension of $80,000 rather
than the existing $76,000. All fire department members serving
between 10 and nineteen years receive service credit at 60% and
graduate upwards in 4% increments until becoming fully vested
after twenty years of service.
Issues:
-
The current $3,800 per year pension benefit amount has been in
effect for the past year. The City's 2004 contribution to support the
pension fund is $20,000 and is proposed to remain the same for
2005. No tax increase is required to support this level of pension
benefits. The firefighters' pension plan is primarily funded by the
annual state aid received by the City, derived from 20/0 of the
homeowners insurance premium, which is dedicated by law for
pension contribution purposes.
Prior Lake's pension amount including the proposed increase is
generally lower to that of other fire departments with similar number
of volunteers. Also, for reference purposes the maximum allowable
lump sum pension payment per year of service credit under MN
Statutes 424A.02 is $7,500.
Financial Impact:
Based upon actuarial projections and current investment
assumptions, certified by the relief association officers as required
by Minn. Statute 69.771. subd. 3, the new pension benefit amount of
$~,OOO per year of service will not require any increase in city
H: \FIRE\Pensionagenda.doc
www.cityofpriorlake.com
Phone 952.447.4230 / Fax 952.447.4245
ALTERNATIVES:
RECOMMENDED
MOTION:
REVIEWED BY:
H: \FIRE\Pensionagenda. doc
contribution presently or in the future. The existing tax levy and the
2% insurance money will fully fund their pension program.
Conclusion:
Staff would recommend approval of the proposed pension benefit
increase to $4,000 per month as requested and to incorporate this
amount into their disability and death benefits as well. The pension
amount requested is reasonable when compared to other
departments. From the City's perspective it is important that the
pension remain competitive in order for the City to continue to
recruit and retain qualified volunteer firefighters.
1. A motion and second to approve a Resolution Approving A
Pension Increase For The Prior Lake Fire Department Firefighters
Relief And Pension Association that provides for a $4,000 per year
of service credit for pension, disability and death benefit purposes
within the Bylaws of the Prior Lake Fire Department Firefighters
Relief and Pension Association effective January 1, 2005.
2. Take no action at this time and direct the staff to provide
additional information.
Adopt a Resolution Approving A Pension Increase For The Prior
Lake Fire Department Firefighters Relief And Pension Association
that provides for a $4,000 per year of service credit for pension,
disability and death benefit purposes within the Bylaws of the Prior
Lake Fire Department Firefighters Relief and Pension Association
effe 1 e Ja a , 2 5.
16200 Eagle Creek Avenue S.E.
Prior Lake, MN 55372-1714
RESOLUTION 04-XX
RESOLUTION APPROVING A PENSION INCREASE FOR
THE PRIOR LAKE FIRE DEPARTMENT FIREFIGHTERS RELIEF
AND PENSION ASSOCIATION
MOTION BY: SECOND BY:
WHEREAS, The bylaws of the Prior Lake Volunteer Firefighters relief and Pension Association
provides for a defined contribution benefit; and
WHEREAS, The present annual benefit level in effect is $3,800.00 for volunteer fire fighters that
are eligible under the existing vesting schedule; and
WHEREAS, It is in the best interest of the City of Prior Lake to provide a pension level that is
comparable with other volunteer fire departments in order for the City to continue to
recruit and retain qualified volunteer firefighters.
NOW THEREFORE, BE IT RESOLVED BY THE CITY COUNCIL OF PRIOR LAKE, that a
$4,000 per year of service credit for pension, disability and death benefit purposes within the Bylaws of
the Prior Lake Fire Department Firefighters Relief and Pension Association is hereby approved effective
January 1,2005.
Passed and adopted this 16th day of August 2004.
YES
NO
Haugen
Blomberg
LeMair
Petersen
Zieska
Haugen
Blomberg
LeMair
Petersen
Zieska
{ Seal}
City Manager
City of Prior Lake
www.cityofpriorlake.com
H: \FIRE\Pensionres.doc
Phone 952.447.4230 / Fax 952.447.4245