HomeMy WebLinkAbout6.o. Firefighters Relief Association By-Law Change and Scheduled Benefit IncreaseCITY OF ROSEMOUNT
EXECUTIVE SUMMARY FOR ACTION
City Council Meeting Date December 21, 2004
AGENDA ITEM: FIREFIGHTERS RELIEF ASSOCIATION
AGENDA SECTION:
BENEFIT and BY LAW CHANGE
CONSENT
PREPARED BY: LINDA JENTINK, CITY CLERK
AGENED
ATTACHMENTS: ARTICLE VIII Death Benefits and
APPROVED BY:
Pensions, MN Relief Schedule Report
RECOMMENDED ACTION: Motion to approve the by -law change to Article VII of the
Rosemount Firefighters Relief Association and an increase of
$900 to bring the annual
benefit level for 2004 to $4,800
ACTION:
ISSUE
1) The Rosemount Firefighters Relief Association must comply with language changes
in the by -laws issued by the State of Minnesota Auditor's Office
2) The Relief Association is on a step program to reach the State maximum benefit for
firefighter's benefits and pensions and is asking for an increase of $900 this year which
would bring the annual benefit level for 2004 to $4,800
BACKGROUND
By -Laws
The wording change requested by the State of Minnesota referenced fully deferred
members would get the investment return percentage up to 5 based on the return
calculated by our forms In the past, the membership would override this in down years
and still give the deferred members the full 5% The State requests three options,
1)give no interest 2) give the percentage the investments made up to 5% based on the
returns the state calculated (this would then always be delayed about one year while
they calculated the returns from our forms), or 3) always give 5% no mater what our
investments did The Rosemount Firefighters Relief Association voted for the 5% option
since this is what they had done in the past
Benefit Increase
The Rosemount Firefighters Relief Association is in the fourth year of an approximate
12 -year process to move Rosemount to the maximum benefit for firefighters Each year
the Relief Association evaluates their benefit increase based on investment
gains /losses, contributions from the city, and Minnesota state aid money The goal is to
utilize the money received for the year by increasing the benefit level to a point where
Executive Summary
Rosemount Firefighter's Relief Association
Page 2
the total fund is at a slight surplus This year with an increase of $900 to the benefit
level the funds will be at a $1,504 surplus, which is acceptable, effectively utilizing the
money received this year There are 35 active firefighters this year and three
firefighters who have retired
SUMMARY
Staff recommends approval of the by -law change to Article VIII of the Rosemount
Firefighters Relief Association and an increase to the annual benefit level for 2004 to
$4,800
PEC -14 -2004 10.04 PEREGRINE CAPITAL 6122157359 P.02
Article VIII.
Death Benefits and Pensions (continued)
Section 4.
During the time that a member is on the deferred pension roll, the Association shall add interest to the deferred
benefit amount, compounded annually, at a rate equal to five percent, if the member has served as a firefighter
on the Rosemount Volunteer Fire Department for a minimum period of 20 (Twenty) years This change will be
applied retroactively to the current members of the fully deferred pension list as of September 2004.
Section 5.
A member of the Association who shall have served in the Rosemount Volunteer Fire Department for more than
10 (Ten) years, but less than 20 (Twenty) years, as a firefighter in the Rosemount Fire Department, may retire
from said fire department and be placed on the early vested pension roll When the member reaches the age of
50 (Fifty) years, and has been a member of the Association for at least 10 (Ten) years, shall upon application
therefore, be paid in the following manner:
a) For duty of more than 10 (Ten) years, but less than 11 (Eleven) years, 60 (Sixty) per cent of the amount
per "year of service" which would have been earned, had the member served for 20 (Twenty) years or
more,
b) For Duty of more than 11 (Eleven) years, but less than 20 (Twenty) years, 4 (Four) per cent of the
amount per "year of service" which would have been earned, had the member served for 20 (Twenty)
years or more, shall be added to all "years of service" for each additional "year of service" between 11
(Eleven) and 20 (Twenty) years
c) Upon the death of a member, who is on the early vested pension roll, and who is in good standing at the
time of death, the Association shall pay to the named beneficiary and if no beneficiary has been named,
to the surviving spouse, if any, and if there is no surviving spouse, divided equally to surviving child or
children, if any and if no child or children survive, to the estate of such deceased member, the sum that
has been determined payable to the member,
d) The Yearly Pension Amount as Specified in Article VIII, Section 6, (b) for each "year of service" as a
member of said fire department
Last Updated 12114/2004 Page 10 of 13
DEC -14 -2004 10:04 PEREGRINE CRPITRL 6122157359
Article VIII.
Death Benefits and Pensions (continued)
Section 6.
a) The YEARLY PENSION AMOUNT that the Association will pay is FOUR THOUSAND EIGHT
HUNDRED DOLLARS 5$4,800 00) per "YEAR OF SERVICE
b) Effective December 21 2004, the PERCENT OF 20 YEAR PAYMENT at $4,800.00 per "year of
service" is as follows'
Years of Service
On Fire Department
Percentage of
20 Year Payment
Amount of Payment
At age of 50 years
10
60
$28,800
11
64
$33,792
12
68
$39,168
13
72
$44.928
14
76
$51,072
15
80
$57,600
16
84
$64,512
17
88
$71,808
18
92
$79,488
19
96
$87,552
20
100
$96,000
Last Updated 12/14!2004 Page 11 of 13
DEC -14 -2004 10:04 PEREGRINE CAPITAL 6122157359 P 04
Data Entry
Data entered here will populate the 2004 Schedule form. Please use only Special Fund data.
Choose your relief association name
Annual benefit level (effective 12131/2004)•
ROSEMOUNT
2003 Reporting Form (RF -03) Data
Ending Assets (12/31/03)
State Aid Received or Receivable
Admmistrativc Expcnse
2004 Actual and/or Proiections
Revenues
Municipal Independent Fire Dept Contributions
(must be at least the Required Contribution shown on the SC -03)
Interest Dividends
Appreciation (Depreciation)
Member Dues
Other Revenues
Expenses
Service Pensions
Other Benefits
Administrative Expenses
1,493,608
79,949
1,997
135,000
10,000
104,500
106,404
3,000
Deficit Section If there was deficit information on the SC -03, enter that information here.
Original Amount Amount Retired Amount Left
Few Incurred (from SC -03) (from SC 1035) Before Ad usun
(1) (2
1995
1996
1997
1998
1999
2000
2001
2002
2003 189
2004
Totals
Surplus or Deficit
(page 4) e�
Sum of Column 3
b�
New Deficit
(a b) c�
DEC -14 -2004 10:05
Farm SC -04
Unpaid Installments
PEREGRINE CAPITAL
6122157359 P.10
ROSEMOUNT Page 3
Entry Separation 2004 Estnnated 2005 Estimated
Name Date Date Liability Liabilit
Calculation of Normal Cost
21104 2005
Total Active Member Liabilities
1,543,392
1,701,024
Total Deferred Member Liabilities and Unpaid Installments
168,757
172,107
Grand Total Special Fund Liability
1,712,149
BI 1,873,131
Normal Cost (Cell B minus Cell A)
Projection of Net Assets for Year Ending December 31, 2004
Special Fund Assets at December 31, 2003 (RF•03 ending assets)
Projected Income for 2004
State Fire Aid
D
Municipal Independent Fire Dept. Contributions
E
InteiestI Dividends
F
Appreciation (Depreciation)
G
Member Dues
H
Other Revenues
I
Total Projected Income for 2004 (Add lanes D through I)
Projected Expenses for 2004
160,982
1 1,493,608
2 329,449
Service Pensions I 106,404
Other Benefits K
Administrative Expenses L 3,000
Total Projected Expenses for 2004 (Add Lines I through L) 3 109,404
Projected Net Assets at December 31, 2004 (Add Lines I and 2, subtract Line 3) 4 1,713,653
79
135
1
,DEC -14 -2004 10.05 PEREGRINE CAPITAL 6122157359 P.11
Form SC -04
Projection of Surplus or (Deficit) as of December 31, 2004
Projected Assets (Line 4) 5 1,713,653
2004 Accrued Liability (Page 3, cell A) 6 1,712,10.9
Surplus or (Deficit) (Line 5 minus Line 6) 7 1,504
Complete Section 1 below
Calculation of Municipal Contribution
A If Line 7 is positive, complete this section:
Normal Cost (Page 3, cell C)
Projected Administrative Expense (2003 Admin Exp x 1035)
State Fire Aid
Member Dues
5% of Projected Assets at December 31, 2004 (Line 4 x 0 05)
10% of Surplus (Line 7 x 010)
Mumeipai Contribution (Add Lines 8 and 9, subtract Lines 10, 11, 12 and 13)
No municipal contribution due in 2005.
B If Line 7 is negative, complete this section:
Deficit Table
Year Incurred
Ori ina] Amount
Amt Reared 12/31/04
Left to Retire 1/1/05
1995
11
State Fire Aid
18
1996
I9
5% of Projected Assets at December 31, 2004 (Lino 4 x 0.05)
20
1997
21
1998
1999
2000
2001
2002
2003
2004
Totals
ROSEMOUNT Page 4
8
9
10
11
12
13
14
N
;ficit (fane 7)
AO
ft to Retire Total
B
minus B
C
If line Cis positive, this is the new additional deficit for 2004 Enter the amount in Original Amount and Left
to Rctirc Columns If line Cis negative, reduce prior deficits according to the separate Schedule instructions.
Amortization of Deficit (Total of Original Amount column x 010)
15
Normal Cost (Page 3, cell C)
16
Projected Administrative Expense (2003 Admin Exp. x 1.035)
11
State Fire Aid
18
Member Dues
I9
5% of Projected Assets at December 31, 2004 (Lino 4 x 0.05)
20
Municipal Contribution (Add Lines 15,16 and 17, subtract Lines 18,19 and 20)
21
DEC -14 -2004 10 05 PEREGRINE CAPITAL 6122157359 P.12
Form SC -04
ROSEMOUNT 1 Page 5
This Schedule must be fully completed, certified by the relief association officers, forwarded to
the municipal clerk on or before August 1, 2004 and submitted to the State Auditor's Office to
be eligible for state fire aid.
OFFICER CERTIFICATION
We, the officers of the Rosemount Relief Association, certify that this
Schedule was prepared under Minn. Siat 69 772 and that the annual benefit level was established
according to the average amount of available financing
We further certify that based on the financial requirements of the Relief Association's Special Fund for
the 2004 calendar year, the required 2005 municipal contribution is 0 If the bylaws of the
Relief Association changed in 2004, we have attached a copy of the amendment or updated bylaws.
We have also enclosed a copy of the municipal ratification of this amendment if required under
Minn Stat 69.772, subd. 6.
Signature of President
Signature of Secretary
Print Name
Print Name
Signature of Treasurer Print Name
Date
Date
Date
MUNICIPAL. CLERK CERTIFICATION
(For relief associations affiliated with municipal fire departments only
I am the municipal clerk of I received on the
completed Schedule from the Rosemount Rehef Assoc! anon I have reviewed
Lines 14 and 21 of the Schedule If either Line 14 or Line 21 show a required municipal contribution,
I certify that 1 will advise the governing municipal body of any required municipal contribution at its
next regularly scheduled meeting
Signature of Municipal Clerk Print Name
Business Telephone
Date
Please retain a copy of the Schedule for your records and submit the signed original to. State Auditor's Office, Pension Division,
525 Park Street Suite 500, Saint Paul, MN 55103 Fax. 651 -382 -5298 Telephone 651 -282 -6110.
DEC -14 -2004 10:05 PEREGRINE CAPITAL 6122157359 P.13
Article VIII, Section 4 was amended by the members of the Rosemount Fire Relief Association on the 28
day of September, 2004
Article VIII, Section 6, Subdivision a and b were amended by the members of the Rosemount Fire Relief
Association on the 1411h day of December, 2004
Jerry Noll, President
Scott Engelmann, Secretary
Approved by the City Council on the 21 day of December, 2004.
William Droste, Mayor
Jamie Verbrugge, City Administrator
TOTAL P.13