HomeMy WebLinkAbout5E - Firefighter's Improved Pension Benefits
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MEETING DATE:
AGENDA #:
PREPARED BY:
AGENDA ITEM:
DISCUSSION:
STAFF AGENDA REPORT
SEPTEMBER 21, 1998
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RALPH TESCHNER, FINANCE DIRECTOR
CONSIDER APPROVAL OF VOLUNTEER FIREFIGHTERS'
REQUEST FOR IMPROVED PENSION BENEFITS
Attached is a memorandum from the Prior Lake Volunteer Fire
Association which requests that pension benefits be improved as of
January 1, 1999 from $2,400 to $2,600 per year of service, This
agenda item provides information with regard to this request.
Current Circumstances:
Volunteer firefighters have requested a $200 per year increase in
pension benefit amount effective January 1, 1999 from $2400 to
$2600 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 $2,600 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 $52,000 rather
than the existing $48,000. 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 $2,400 per year pension benefit amount has been in
effect for the past year. The City's 1998 contribution to support the
pension fund is zero and will require no tax levy payable 1999. The
firefighters' pension plan is funded by the annual state aid received
by the City, derived from 2% of the homeowners insurance
premium, which is dedicated by law for pension contribution
purposes,
Attached for Council information is a copy of a Fire Relief Pension
Survey prepared by Mike Lyrenmann, a Prior Lake Firefighter. This
data was obtained from the most recent State of Minnesota relief
association filings. Prior Lake's pension amount compares favorably
with other communities.
16200 Eagle Creek Ave. S.E., Prior Lake, Minnesota 55372-1714 / Ph. (612) 447-4230 / Fax (612) 447-4245
AN EQUAL OPPORTUNITY EMPLOYER
H:\AGENDA\A9803.DOC
ALTERNATIVES:
RECOMMENDED
MOTION:
REVIEWED BY:
Attachments:
Financial Imvact:
Based upon actuarial projections and current investment
assumptions, as indicated by Dave Chromy, the new pension benefit
amount of $2,600 per year of service will not require any city
contribution presently or in the future. The 2% insurance money will
fully fund their pension program.
Conclusion:
Staff would recommend approval of the proposed pension benefit
increase to $2600.00 per month as requested. 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 an amendment to the Prior
Lake Volunteer Firefighter Bylaws which provides for a $2,600 per
year of service credit for pension benefit purposes, effective January
1, 1999.
2, Take no action at this time and direct the staff to provide
additional information.
Adopt a motion and a second to authorize a revision in Article 8,
Section 2 of the Prior Lake Fire Relief Association Bylaws
benefits m $2,400 per year of service to
rvice e e ive January 1, 1999.
1. Prior La F epartment Relief Association minutes approving
change in bylaws.
2. Prior Lake Volunteer Fire Department memorandum requesting
approval of increase in pension benefits.
3. Fire Relief Pension Survey.
4. "Schedule I-II for Lump Sum Pension Plans State Fire Aid Year
1999".
Prior Lake Volunteer Fire Department
PRIOR LAKE VOLUNTEER FIRE DEPARTMENT
PRIOR LAKE, MINNESOTA 55372
At a regular meeting of the Prior Lake Fire Department Relief Association, a motion was
made and seconded to increase our pension benefits as of January 1st, 1999 from $2400.00
to $2600.00 per year of service.
Therefore, Article VIII, Section 2 should read: The association shall pay to each member
who shall have served as an active firefighter in the Prior Lake Fire Department for a
period of 20 years or more prior to his/her resignation from said Fire Department, and who
has reached the age of 50 years or more and who has been a member of the association for
at least 10 years, the sum of $2600.00 for each year that he/she served as an active member
of said Fire Department.
ReCOr,~il1g s~cr ,
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Stacy Peterson
4629 Dakota 51. 5.E., Prior Lake, Minnesota 55372 / Ph. (612) 447-4230 / Fax (612) 447-4245
Prior Lake Volunteer Fire Department
TO:
PRIOR LAKE CITY COUNCIL
FROM:
PRIOR LAKE VOLUNTEER FIRE DEPARTMENT
SUBJECT: APPROVE INCREASE IN PENSION BENEFITS
DATE:
AUGUST 27TH, 1998
At this time we ask the city council to approve an increase in pension benefits as of January
1, 1999 from $2400.00 to $2600.00 per year of service.
Therefore article VIII, Section 2 will read:
The association shall pay to each member who shall have served as an active firefighter in
the Prior Lake Fire Department for a period of 20 years or more prior to his/her
resignation from said Fire Department, and who has reached the age of 50 years or more
and who has been a member of the association for at least 10 years, the sum of $2600.00 for
each year that he/she served as an active member of said Fire Department.
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Fire Chief, Dave Chr~
President, Doug Hart n
Treasurer, Mike Lyr nmann
4629 Dakota 51. 5.E., Prior Lake, Minnesota 55372 / Ph. (612) 447-4230 / Fax (612) 447-4245
FIRE RELIEF PENSION SURVEY
City of Prior Lake
(September 1, 1998)
Number of Yearly Pension 20 Year
~ Volunteers Credit Amount Lump Sum
Lakeville 69 $3850/per yr. of service $77,000
Northfie1d 28 $3300/per yr. of service $66,000
Shakopee 33 $3062/per yr. of service $61,240
Stillwater 36 $2800/per yr. of service $56,000
Savage 38 $2750/per yr. of service $55,000
Chanhassen 47 $2550/per yr. of service $51,000
Prior Lake 38 $24001per yr. of service $48,000
Jordan 30 $ 1250/per yr. of service $25,000
New Prague 30 $ 1600/per yr. of service $32,000
New Market 20 $850/per yr. of service $17,000
16200 F.jt.1I~~~&>'Ce. S.E., Prior Lake, Minnesota 55372-1714 / Ph. (612) 447-4230 / Fax (612) 447-4245
AN EQUAL OPPORTUNITY EMPLOYER
Form SC-98
SCHEDULE I-II FOR LUMP SUM PENSION PLANS
STATE FIRE AID YEAR 1999
Firefighters Relief Association of PRIOR LAKE
County of scon
SCHEDULE I
Computation of benefit of relief association special fund (at $ 2600 per year of service) for all members based on their years
of service as active fife department members.
1 2 3 4 5 6 7
1998 1999
F.D. To End of This Year To End of Next Year
Name Age Entry Date Years Active Accrued Years Active Accrued
Montb': Year Service Liabilitv Setvice Liability
1. JAMES WEBER 5 ) 69 30 78000 31 80600
2. KENNY KLINGBERG 6) 76 23 59800 24 62400
3. WEEMER WEBER 6/ 76 23 59800 24 62400
4. DALE RADANKE 4i 78 21 54600 22 57200
5. MICHAEL L YRENMANN 5 82 17 40560 18 44148
6. BRUCE SAMES 5 82 17 40560 18 44148
7. BRENT JOHNSON 5 82 17 40560 18 44148
8. JAMES KLEIN 10 85 13 27820 14 30784
9. LARRYSCHO~ER Ii 88 11 22308 12 25012
10. DAVE CHROMY 1 ) 88 11 22308 12 25012
11. MARK FRIEDRICH 7) 89 9 17316 10 19760
12. JAMES LARSON 7) 89 9 17316 10 19760
13. CHRIS JOHNSON 7...: 89 9 17316 10 19760
14. DOUG HARlMAN 7: 90 8 14976 9 17316
15. VICfOR ORESKOVICH 7) 90 8 14976 9 17316
Total from Pa~e 2 153088 201604
.. DEFERRED
Total of Deferred Pensions,
If Any, Total from pa~e 2 0 0
Total Unpaid Installments,
If Any, Total from pa~e 2 0 0
Total of Early Vested Pensions
If Any, Total from pa2e 2 188308 197724
A Accrued Liability Through Next
Year 1999 (total, column 7) --------------------- 969092
B. Accrued Liability Through This
Year 1998 (total, column 5) --------------------> 869612 869612
C. Subtract Line B from
Line A (normal cost) 99480
Fractional Years of setvice must be calculated to nearest full year.
Do not enter liability in Columns 5 or 7 for any person who will receive entire pension during this year. Enter this pension
amount on Schedule II, Section 1, Line h.
For installment liability, enter amount which will be payable after end of this year in both column 5 and column 7.
If interest is to be paid on unpaid pensions, add interest for 1 year in column 7.
A copy of these schedules must be presented to the City Council before August 1 each year.
Page 1
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SCHEDULE I - ADDITIONAL MEMBERS
1 2 3 4 5 6 7
1998 1999
F.D. To End of This Year To End of Next Year
Name Age Ent Date Years Active Accrued Years Active Accrued
Re/nllar Pensions . Month Year Service Liability Service Liability
1. JOE BUSS 8 91 7 12792 8 14976
2. BRAD PATCHIN 8 91 7 12792 8 14976
3. RICK STEINHAUS 10 92 6 10660 7 12792
4. CARTER ANDERSON 5 93 6 10660 7 12792
5. STACY PETERSON 5 93 6 10660 7 12792
6. KURT CHELGREN 5 93 6 10660 7 12792
7. FIONA KEEL 5 93 6 10660 7 12792
8. JAMESKUNE 3 94 5 8684 6 10660
9. TOM BOEMER 10 94 4 6760 5 8684
10. JOE ZIESKA 5 95 4 6760 5 8684
11. TONEY HENNEN 5 95 4 6760 5 8684
12. DOUG NELSON 5 95 4 6760 5 8684
13. BRIAN DAVIS 9 96 2 3224 3 4940
14. BRANDEN JOHNSON 9 96 2 3224 3 4940
15. MICHAEL KUMERS 9 96 2 3224 3 4940
16. JON NIEMANN 9 96 2 3224 3 4940
17. TERRY BARTA 4 97 2 3224 3 4940
18. SCOTI BURFEIND 4 97 2 3224 3 4940
19. RICK KATHAN 4 97 2 3224 3 4940
20. CHRIS KORKOWSKI 4 97 2 3224 3 4940
21. JOHN RIEGERT 4 97 2 3224 3 4940
22. JIM RUZICKA 4 97 2 3224 3 4940
23. DALE CHARD 5 98 1 1560 2 3224
24. JEANNE HANISH 5 98 1 1560 2 3224
25. KEVIN KLEIST 5 98 1 1560 2 3224
26. BRIAN ZOPOY 5 98 1 1560 2 3224
Subtotal of RestUlar pension liability 153088 '$':~~O::-?'::;:~""":::;I.ID 201604
Separation Accrued Accrued
Name Al!e EntrvDate Date Liability Liability
Earlv Vested
1. DAVE ERNEWIN 3 79 3 90 14560 15288
2. CURT SCHMIDT 5 82 6 93 16051 16854
3. JOHN CLEMENS 5 82 3 94 18845 19787
4. JOE MUELKEN 12 78 1 96 29635 31117
Subtotal of Deferred Pensions 79091 83046
Unpaid Installments
1.
2.
Subtotal of Unpaid installments 0 0
Early Vested Pensions
1. JIM O'KEEFE 3 79 3 96 32987 34636
2. ALLEN BORCHART 6 76 6 97 48510 50936
3. JERRY MAHONEY 5 82 6 97 277W 29106
4.
Subtotal of Earlv Vested Pensions 109217 114678
Page 2
Sched ule II
Section 1
Determination of Projected Net Assets for the year ending December 31, 1998
Special Fund Assets at December 31,1997
(See Ending Assets in Reporting Form - 1997)
Projected Income to December 31,1998
a. Minnesota State Aid
(Use 1997 amount, exclude supplemental)
b. Municipal (independent fire) Contributions
c. Donations (List )
d. Investment Income
e. Realized Gains (losses)
f. Unrealized Gains (losses)
g. Other income (Includes Supplemental)
(List - )
Total
1$
$ 61,847
$ 0
$ 0
$ 40,000
$ 0
$ 20,000
$ 0
2$
3$
Projected Assets plus Income December 31,1998 (line 1 + line 2)
Projected Disbursements through end of year
h. Pensions $ 0
i. Other benefits $ 0
j. Administrative $ 450
Total
Projected Assets at end of year (line 3 minus line 4)
4$
5$
857,148 .
121,847
978,995
450
978,545
Section 2
Determination of Projected Surplus (Deficit) as of December 31, 1998
Projected Assets (line 5)
Accrued Liability (line B, Schedule 1)
Surplus (deficit) (Subtract line 7 from line 6)
· Go to Section 3 if Surplus
6$
7$
8$
· Go to Section 4 if Deficit
978,545
869,612
108,933
Section 3
Normal Cost (Line C, Schedule 1)
$
$
$
61,847
48,927
10,893
Determination of Municipal Contribution (if Surplus)
9$
10 $
11$
12$
Municipal Contribution (line 9, plus 10 minus 11)
If $1.00 or greater, certify to municipality before August 1, 1998,
If negative number, no contribution is due.
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0.00
Calculated Administrative Expense (1997 Reporting Form Adm. Exp. $ 464 x 1.035)
Less:
k. Minnesota State Aid
1. 5% of line 5
m. 10% of line 8
Total Subtractions
Page 3
99,480
480
121,667
(21,707)
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Section 4
Determination of Municipal Contribution (if Deficit)
Amortization of Deficits.
Year Incurred
Column 1
Column 2
Amount Retired in Prio
Yean
Column 3
Amount Left to
Retire
Ori onal Ammmt
19
19
19
19_
o (section 2, line 8)
o (Column 3 Subtotal)
o (n. minus 0.)
n.
o.
p.
Totals
Step # 1 If line p is positive, enter line p in columns 1 and 3 of New additional Deficit (98) line.
(This is your New additional Deficit for 1998.)
Step # 2 If line p is negative, reduce columns 2 and 3 according to Deficit Reduction in the instructions, page 6.
Amortization of Deficit (fotal from Column lOx .10)
Total from line C, Schedule I, Normal Cost
Calculated Administrative Expense (1997 Reporting Form Adm. Exp. 464 x 1.035)
Subtotal Lines 13+ 14+ 15
13 $
14$
15 $
16 $
o
o
o
o
Less:
q. Minnesota State Aid $
r. 5% of line 5 $
o
o
Total Subtractions (subtotal of Lines q and r)
Municipal Contnbution (line 16 minus line 17)
(If 0 or negative, there is no municipal contdbution)
17$
18$
o
o
You must certify to municipality before Au".st I, 1998, even if no contribution is due.
Section 5
Calcula
F.
tion of Average special fund income per member A+B+C
D
A B C D E
State Municipal 10% of Active
Aid Support Surplus Members Averal!:e
last year 1997 61,847 244 4,212 41 1,617.15
2 years ago 1996 61,238 4,111 0 39 1,675.62
3 years ago 1995 45,343 12,737 0 41 1,41659
Total column E divided by 3
$1 15701
Maximum Pension Benefit under
statute $1 2900 I
G.
Look up the result ofF on the table (page 7 in the instructions) to obtain G.
This is your maximum benefit this year. You cannot increase benefits beyond this amount
Page 4
OFFICER'S CERTIFICATION
(Form must be provided to municipal clerk on or before August 1, 1998)
We, the officers of the PRIOR LAKE Firefighters Relief Association, state that the "accompanying
schedules have been prepared in accordance with the provisions of Minn. Stat fi 69.772, subd. 4. The average amount
of available fmancing per member of the special fund for the past three years is $ 1570 . Further, benefit levels
have been established in accordance with the average amount of available fmancing, as is required by Minnesota law.
We certify that the fmancial requirements of the relief association special fund for 1999 purposes of required
municipal contribution is $ 0
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Date
~
r
Signa
(/-'30 --Qfj
Date
\\~b
Date
CLERK'S CERTIFICATION
(FOR MUNICIPAL FIRE DEPARTMENTS ONLY)
I am the clerk of . I have received the completed Office of State Auditor Schedule I & II from
PRIOR LAKE Relief Association on , 1998. I have reviewed Section 2, line 8, 12 and 18
of Schedule II. If line 12 or 18 reflects a required municipal contribution, I certify that I will advise the governing
municipal body atit's next regularly scheduled meeting. If the Certification of the Officers discloses that the By-laws have
been amended or benefits have increased and line 12 or 18 reflect a required municipal contribution, I certify that the
governing municipal board passed a resolution approving of the increase or change in by-laws. I have attached the Board
resolution, if required.
Date
Signature of Clerk
Business Phone
WARNING: This document must be fully completed, certified by the relief association offICers, certified by the municipal clerk, and filed with the Office
of State Auditor reporting form as required by Minn. Stat. 169.771. subd. 3. Failure to me this document, whether or not a municipal contribution
is due, will result in ineligilibility of state fire aid, as required by Minnesota state law.
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