HomeMy WebLinkAbout8A - Volunteer Firefighter's Improved Pension Benifits
DATE:
INTRODUCTION:
DISCUSSION:
ALTERNATIVES:
STAFF AGENDA REPORT
8A
RALPH TESCHNER, FINANCE DIRECTOR
CONSIDER APPROVAL OF VOLUNTEER FIREFIGHTERS'
REQUEST FOR IMPROVED PENSION BENEFITS
SEPTEMBER 2, 1997
Attached is a memorandum from the Prior Lake Volunteer Fire
Department which requests that pension benefits be improved as of
January 1, 1998 from $2,200 to $2,400 per year of service. This
agenda item provides information with regard to this request.
V 61unteer firefighters have requested a $200 per year increase in
pension benefit amount effective January 1, 1998 from $2,200 to
$2400 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 $2,400 for each year of active service on
the department. An individual with twenty years of service would
receive $48,000. All fire department members serving between 10
and nineteen years receive service credit at 60~/o and graduate
upwards in 4% increments until becoming fully vested after twenty
years of service.
The current $2,200 per year pension benefit amount has been in
effect for the past year. The City's 1997 annual contribution to
support the pension fund has been reduced to zero and will require
no tax levy payable 1998. Basically the firefighters' pension plan is
funded by the annual state aid received by the City, which in turn is
funded by 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.
1. A motion and second to approve an amendment to the Prior
Lake Volunteer Firefighter Bylaws which provides for a $2,400 per
year of service credit for pension benefit purposes, effective January
1, 1998.
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 \A9708.DOC
ALTERNATIVES:
1. A motion and second to approve an amendment to the Prior
Lake Volunteer Firefighter Bylaws which provides for a $2,400 per
year of service credit for pension benefit purposes, effective January
1, 1998.
2. Take no action at this time and direct the staff to provide
additional information.
FINANCIAL IMPACT: Based upon actuarial projections and current investment
assumptions, as indicated by Dave Chromy, the new pension benefit
amount of $2,400 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.
RECOMMENDATION: Alternative 1. 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.
ACTION REQUIRED: Adopt a motion and a second to authorize a revision in Article 8,
Section 2 of the Prior Lake Fire Relief Association Bylaws
increasing pension benefits from $2,200 per year of service to
$2,400 per year of service effective January 1, 1998.
J
Approved by:
Attachments
Prior Lake Volunteer Fire Department
TO: PRIOR LAKE CITY COUNCIL
FROM: PRIOR LAKE VOLUNTEER FIRE DEPARTMENT
SUBJECT: APPROVE INCREASE IN PENSION BENEFITS
DATE: JULY 22, 1997
At this time we ask the city council to approve an increase in pension benefits as of Janual)'
1, 1998 from $2200.00 to $2400.00 per year of service.
Therefore article VIll, 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 mOl"e 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 $2400.00 1'01"
each year that he/she served as an active member of said Fire Department.
Thank You. .~ / /
c:7~~."
-;;;.~~ I~E/vr
Fire Chief, Dave Chromy
President, Doug Hartman
Treasurer, Mike Lyrenmann
4629 Dakota 51. 5.E., Prior Lake, Minnesota 55372 / Ph. (612) 447-4230 / Fax (612) 447-4245
FIRE RELIEF PENSION SURVEY
September 1, 1996
NUMBER OF MONTHLY 20 YEAR
CITY MEMBERS PENSION CREDIT LUMP SUM
Lakeville 69 3500/per yr. of service $70,000
Northfield 28 3300/per yr. of service $66,000
Chaska 40 3000/per yr. of service $60,000
Stillwater 36 2600/per yr. of service $52,000
Shakopee 33 2332/per yr. of service $46,640
Wilmar 47 2200/per yr. of service $44,000
Savage 38 2350/per yr. of service $47,000
Prior Lake 40 2200/per yr. of service $44,000
Owatonna 36 2150/per yr. of service $43,000
New Prague 30 1250/per yr. of service $25,000
LeSuer 24 13 50/per yr. of service $27,000
Waconia 34 850/per yr. of service $17,000
New Market 20 650/per yr. of service $13,000
Young America 29 550/per yr. of service $11,000
FIRERELF.DOC
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 1998 from $2200.00
to $2400.00 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 Lal{e Firc Depal"tment for a
pel'iod of 20 years or more pl'ior to his/her resignation from said Fire Dcpartment, 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 $2400.00 for each year that he/she served as an active member
of said Fire Department.
"-
Stacy Peterson
4629 Dakota 51. 5.E., Prior Lake, Minnesota 55372 / Ph. (612) 447-4230 / Fax (612) 447-4245
Form SC-97
,-,
SCHEDULE I-ll FOR LUMP SUM PENSION PLANS
REPORTING FORM YEAR 1997
STATE FIRE AID YEAR 1998
Firefighters Relief Association of r....~\'" LA \4:- County of ~o,.. ("'"
SCHEDULE I
Computation of benefit of relief association special fund (at $2'tco per year of service) for all members based on their years
of service as active fire department members.
Name
2 I
I
I
I .
Age i En~rr Date
: Month! Year
3
4
5
6
7
F.D.
1998
To End of Next Year
Years Activei Accrued
I
Service I Liability
i
6.
7.
8.
9.
10.
11.
12.
13.
14. 1:>
15.
Total
** DEFERRED
Total of Deferred Pensions.
If An, Total from age 2
Total Unpaid Installments,
If An, Total from a e 2
Total of Early Vested Pensions
If An , Total from a e 2
A. Accrued Liability Through Next
Year 1998 (total, column 7 ----------------________>
B. Accrued Liability Through This
Year 1997 total. column 5 ----------->
C. Subtract Line B from
Line A normal cost
I
130 ~'2,'2-
---- >
(7 g7 ~
730"7..2-
<j)l 2..S-tf
Fractional Years of service 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
Section 1
Schedule IT
Determination of Projected Net Assets for the year ending December 31, 1997
1 $ {7010~
Special Fund Assets at December 31, 1996
(See Ending Assets in Reponing Form - 1996)
Projected Income to December 31, 1997
a. Minnesota State Aid
(U se 1996 amount, exclude supplemental)
b. Municipal (independent fire) Contributions
c. Donations (List )
d. Invesonent Income
e. Realized Gains (losses)
f. Unrealized Gains (losses)
g. Other income (Includes Supplemental)
(List -
Total
$ (,(2~~
$ 0
$ 0
$ ~'tooo
$
$
$
2 $ q~2.3 6>
3 $ <B to ~"3cf3
Projected Assets plus Income December 31, 1997 (line 1 + line 2)
Projected Disbursements through end of year
h. Pensions
1. Other benefits
J. Administrative
Total
S '"'-ff~
Projected Assets at end of year (line 3 Illinus line 4)
$ '7o~slf
$ 2000
$ 351)
4 $ crUOtf
5 $ 17~73cr
Section 2 Determination of Projected Surplus (Deficit) as of December 31. 1997
Projected Assets (line 5) 6 $ ?7 ")... 73 <t
Accrued Liability (line B, Schedule 1) 7 $ 730" ~2-
Surplus (deficit) (Subtract line 7 from line 6) 8 $ 3'2-t t 7
* Go to Section 3 if Surplus * Go to Section 4 if Deficit
Section 3 Determination of Municipal Contribution (if Surplus)
Normal Cost (Line C, Schedule 1)
9 $ 8,2Stf_
x 1.035) 10 $ I S7"0
$ ~''2.~~
$ "3 S~17
$~
Calculated Administrative Expense (1996 Reporting Form Adm. Exp. $
Less:
k. Minnesota State Aid
1. 5 % of line 5
m. 10% of line 8
Total Subtractions
11$~
12$~
Municipal Contribution (line 9, plus 10 minus 11)
If $1.00 or greater, cenify to municipality before August 1. 1997,
If negative nwnber, no contribution is due.
GO TO SECTION 5
Page 3
SCHEDULE I - ADDITIONAL MEMBERS
,----- 2 I 3 4 7
5 6
1997 1998
F.D. To End of This Year To End of Next Y ear_ ___.
Name Age : En~l Date Years Active i Years Active: Accrued
: Monthl Year Service I Service I Liability
I I
i
I
I
I
4. I
5,
6.
7.
1..1" L.I.. ~r\1\L . h j~ v- I I C;~ :LI I i i
i 9. , ~ c"ZI.fo S" ~ tl (j,o
I !
,: 10. iC.. 1M I! 5 Kl'i~'\! i I S '14 1./ I ~ 2. 'to I s;- f ~ot'" I
I
1),. II\. w\'l <;. ~'-~\If'" i ~I '14 4 (,2. '-to .... I SSo l",
' 11. 5.
.'12. 11, "^ ""B 0 eo fit'+. ~ .,. I 10 '14 ? 4 S"t.o I Ii i '" Z Iio
JOe Z I't'S i:::4. I I S- q~ J 4 '"" 0 I tf i (,? c.fo
'13, I
,
14. Ibt\t\.f t..L. ! i S' '1(' J Lt S"" 0 I * ~24o I
-..... ,
15. ~,..~. 1>0 k~ '^ .... i i ) <f~ 3 "ts-c..o L.I I (,2 'to I
16. \)-.' ,- ~~l<a",,1 I I ) ct~ 3 4- '"~ 0 y i (p 21./-0 I
,
; 17, \?'(\'~j '"D A \f\ ~ I cr! lj(, I I'-iLtO 2 I Z'17~
,
it 8. 13 ("",J e" .:so ."1'1 So--... I i 't I ,,, I l"f'to I z.. I 1..'17(.,.
I I
: 19. M H.J+~ "I.. Kl 1W\.i" It'f i I 't qc, I l~o i 2- i '2-'t7~
120. ..10", v\''C . ... .. ~ i '11 q~ I [\of tto 7- i Z.~7'-
I
21. I(t'ru "Ra.W"" tu I I ttl C,1 I l\.ftto I "2- I 2'?7~
22. SLOf-+-' 6\.1."'.c.. ;.....i I 41 ct, I l~~ 2- 2.~7,"
I
23. Rlex. ""Cc. Hv~ ~ L./ 0" I J4'io I ... 2-'t7,,"
24. C...'V.r ~ Kor l~"" ~,d I '+ I '1, ! 14 "0 "1- '2.'77(0- I
.. -~-
25. ,,)0 ... I'\, K\< j t.'I"'T I i.. ~~ ~ ',?iun i- I i~.;;: i
-. ,., ./
Subt;;t1J';f Rel!ula; ~e~sioo liabiW v (00 oal!e 2) mirmmrmtimti:tttttt ii
I Separation Accrued Accrued ,I
~.\ .. N allle Al!e Entry Date Date Liabilitv Liabilitv I
.\ eosions I i
1. ~w-. dl~~ 3 -7 ., , - '"1c, '3/&.tI'- ~2 787 i
I
I
2. Mk..... ~ 0(' c.\-\ Ao P.. ,.. ~ .7" ~ -<; 7 o.t/o zoo 'fS ~'c I
3. 3e",y'1 IV\A- ~o ~"C '" >,,-g'2,.. (, -C11 ~., 400 "2., 71.0 I
4. , \ !/
Subtotal of Deferred Peosions I
I i I !I
I
Unpaid Installments I I
I I
1. I
2. I !
, Subtotal of Unoaid installments I
,
i
, I
Early Vested Pensions I
I
1.1>6.lI<" ~C\oO.Jl_ ~ -1<1 ~-'o , 3 8(,7 t~ S"''-o
2. C<.c.f + S'l.kkA- \1-f- )-~'2,.. (.,-'13 I'S 2$7 { c..o or, I
3. ~'" CJ.... \0. ,. lr\.4.. ~ ~ -z.. 1-''f I 7 '1 <f8 188 'Is I
I
4. Jot 1M I.a.~ \ tL..... (2-78 1-7(", Z~ 2:2..,+ 2ct (. 3 ~ I
Subtotal of Earlv Vested Pensions i
Page 2
-- ---- -~-- ._----,--~_....~-_._.--- - -.------~- -_.._-----~ ..- -- --.-..--
Section 4
Detemlinlltion of Municipal Contrihution (if Deficit)
Year Incurred Column 1 , Column 2 Column J
,
I Amoun, Retired in j Amount Left
Priori to
Original i ! Retire
Amount Ye~r.l
, i
i 19 ,
i 19 , I I
I
i 19 i I
I !
119 I
, ! I I Subtotal --
, , I i
I New add'! Deficit (1997) :
i Totals I i I
Am()rll:alion oj" Defidls
n.
(section 2. line 8
enter as a posItive nwnberl
o.
(Column 3 Subtotal)
(n. minus 0.)
p.
Step # 1 If line p is positive. enter line p in columns 1 and 3 of New additional Deficit (97) line,
(This is your New additional Deficit for 1997.)
Step # 2 If line p is negative. reduce columns 2 and 3 according to Deficit Reduction in the instructions. page 6.
Amortization of Deficit (Total from Column 1 x .10)
Total from line C, Scbedule I. Normal Cost
Calculated Administrative Expense (1996 Reporting Form Adm. Exp,
x 1.035)
Subtotal Lines 13+14+15
Less:
q. Minnesota State Aid :5
r. 5 % of line 5 :5
Total Subtractions (subtotal of Lines q and r)
Municipal Contribution (line 16 minus line 17)
(If 0 or negative, there is no municipal contribution)
13 :5
14 S
15 S
16 S
17 :5
18 :5
You must certify to municipality before Aueust 1. 1997. eyen if no contribution is due.
Section 5
Calculation of A verage special fund income per member
* Received or Receivable
A
State
B
C
10% of
F.
last year 1996
2 years ago 1995
3 years ago
G. statute :5
D
A+B+C
D
E
Active
Look up the result of F 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 I. 1997)
We, the officers of the _~r\.(~ ~ r~ ~J- Firefighters Relief Association. state that the accompanying
schedules have been prepared in accordance with the provisions of Minn. Stat. 9 69.772, subd.. 4.. The average amount
of available financing per member of the special fund for the past three years is $ ( s; l.fJ;;'t"'. Further. benefit levels
have been established in accordance with the average amount of available financing. as is required by Minnesota law.
We certify that the financial
municipal contribution is $
requirements of the relief association
o
special
fund for 1998 purposes of required
7-z.9-f?
Date
'7- tr1rcn
Date
~;.z i /17
Date
CLERK'S CERTIFlCA TION
(FOR MUNICIPAL FIRE DEPARTMENTS ONL Y)
I am the clerk of . I have received the completed Office of State Auditor Schedule I & II from
Relief Association on . 1997. 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 at it'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 --1J '3)\'\ 1
~
Signawre of Clerk
4-+' -+2...'30
Business Phone
WARNING: This documefll musl be fully compleled, unified by Ihe relief association officers. cenijied by /he 17IlUIicipal cleric, and filed wi/h /he Office
of Slale AudUor reponing form as required I1y Minn. SUllo i 69.771. subd. J. Failure 10 file /his documenl. whe/her or nol a 17IlUIicipal conrribulion
is due, will resull in ineligilibiliry of Slale fire aid, as required I1y MinnesolD SIDle law.
Office of the State Auditor
Pension Oversight
525 Park Street
Suite 400
St. Paul, MN 55103
Page 5