HomeMy WebLinkAboutCOUNCIL - AGENDA ITEM - 03/20/2007 - RESOLUTION 2007-029 ADOPTING THE FIFTH AMENDMENT T ITEM NUMBER: 21
AGENDA ITEM SUMMARY DATE: March 20, 2007
FORT COLLINS CITY COUNCIL STAFF: Chuck Seest
SUBJECT
Resolution 2007-029 Adopting the Fifth Amendment to the City's General Employees'Retirement
Plan for the Purpose of Shortening the Length of Time Between an Employee's Retirement Date and
the Initial Benefit Payment.
RECOMMENDATION
Staff recommends adoption of the Resolution.
FINANCIAL IMPACT
Based upon discussions with Milliman, the outside actuary for the City's General Employees'
Retirement Plan, the financial impact to the Plan of shortening the length of time by one month
between the retirement date and the initial benefit payment would be statistically negligible.
Milliman also commented this change would align the timing of the initial benefit payment with
what is considered standard practice as compared to other defined benefit plans.
EXECUTIVE SUMMARY
By adoption of this Resolution, Council would shorten the amount of time that lapses between an
employee's retirement date and the date upon which he/she receives the initial payment from the
General Employees' Retirement Plan ("Plan").
Currently,when an employee retires from the City,his/her retirement date is established as the first
day of the subsequent month. Then, in accordance with Section 4 of Article VIII of the Plan, the
benefit payments commence on the last day of the month following the month of the Retirement
Date.
For example, if someone retires from the City on the 5th of March, his/her retirement date will be
established as April 1 st and he/she will receive the first benefit payment from the Plan by May 31 st.
As a result,eighty seven days will have lapsed between the last day of employment with the City and
the first benefit payment.
By adoption of this resolution, the first benefit payment under the above scenario will be received
by April 30th, as opposed to May 31 st. Instead of eighty seven days, the retired employee would
only have to wait fifty six days between his/her last day of employment with the City and the day
he/she received the first benefit payment from the Plan.
RESOLUTION 2007-029
OF THE COUNCIL OF THE CITY OF FORT COLLINS
ADOPTING THE FIFTH AMENDMENT TO
THE CITY OF FORT COLLINS GENERAL EMPLOYEES'
RETIREMENT PLAN FOR THE PURPOSE OF SHORTENING
THE LENGTH OF TIME BETWEEN AN EMPLOYEE'S RETIREMENT
DATE AND THE INITIAL BENEFIT PAYMENT
WHEREAS,the City Council adopted,effective January 1, 1971,a qualified defined benefit
pension plan known as the City of Fort Collins General Employees' Retirement Plan (the "Plan"),
for the purpose of providing retirement benefits for certain of its employees; and
WHEREAS,the City Council has amended the 1971 Plan from time to time and restated the
1971 Plan to incorporate all prior amendments and other changes required by law, effective
December 31, 2001, via section 1 of Resolution 2001-157; and
WHEREAS, under the provisions of the Plan as currently adopted, participants in the Plan
retiring from the employment of the City must wait at least 58 days from their retirement date for
their first benefit payment; and
WHEREAS,the Retirement Committee has recommended to City Council the approval of
this fifth amendment of the Plan so that the first payment of retirement benefits to employees in the
Plan can be made one month earlier than under the current wording of the Plan; and
WHEREAS, changing the first payment date so that it occurs one month earlier will not
significantly affect the funding needs of the Plan; and
WHEREAS, Article XV, Modification or Termination of Plan, Section 2 of the Plan,
authorizes the City Council to amend the terms of the Plan.
NOW, THEREFORE, BE IT RESOLVED BY THE COUNCIL OF THE CITY OF FORT
COLLINS, COLORADO, that Section 4 of Article VIII of the City of Fort Collins General
Employees'Retirement Plan is amended effective the date of the adoption of this Resolution to read
as follows:
Section4. Payment of Benefits. The basic monthly Retirement Benefit,
computed as set forth above, shall be paid in equal monthly payments commencing
on the last day of the month fbliovving tit, nionth of their Retirement Date, and
continuing at monthly intervals for the Retired Member's lifetime thereafter. If a
Retired Member or Beneficiary should die during a monthly interval, a partial
monthly payment shall be paid.
Notwithstanding the above, if the value of a terminated Member's vested Accrued
Benefit derived does not exceed $5,000, the entire vested benefit shall be paid to
such Member in a single lump sum, regardless of when the Member terminated
Covered Employment.
Passed and adopted at a regular meeting of the Council of the City of Fort Collins this 20th
day of March, A.D. 2007.
Mayor
ATTEST:
City Clerk