Public Safety Pensions2

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Presentation of benefits of Fort Lauderdale Police and Fire Pension System.

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Public Safety Pensions2

  1. 1. City of Fort Lauderdale Police and Firefighters’ Retirement System
  2. 2. Public Safety Pensions Fort Lauderdale Police and Firefighters’ Pension Plan (1)
  3. 3. Key Elements  Established by City in 1973  Covers 491 sworn police officers and 382 sworn firefighters  Provides benefits to 944 retirees and beneficiaries  Assets of $417.5 million (market value as of 12-31-09) (2)
  4. 4. Administering the Plan Administered by 7-member board of trustees:  2 elected by police officers  2 elected by firefighters  2 appointed by mayor  1 consensus trustee approved by City Commission (3)
  5. 5. Current Trustees 1. Lieutenant Michael Dew (police), Chairman 2. Officer Richard Fortunato (police), Secretary 3. Firefighter J. Scott Bayne (fire) 4. Battalion Chief Ken Rudominer (fire), Vice Chairman 5. Mark Burnam (appointed by Mayor) 6. Jim Naugle (appointed by Mayor) 7. Dennis Hole (consensus trustee approved by City Commission) Finance Director (city) ex-officio member (4)
  6. 6. Funding the Plan Funding comes from 4 sources  Employee Contribution: 7% of pay  State Contribution: tax on casualty and property insurance premiums  City Contribution: determined by plan actuary to maintain benefits  Investment Income: return on assets invested in securities (5)
  7. 7. City’s Contribution 2008  36.3% of $52.8 million payroll*  Pension contribution of $18.6 million  Employee Contribution $4 million  Investment Income $9.2 million  Fund Value Declined 22.1%**  Plan is pre-funded for 78% of benefits *City saved $2 million by not having to pay pension contributions on 69 officers participating in the DROP program **Fund value declined only four times in past 18 years due to market downturn (6)
  8. 8. Retirement Formula  YEARS: 20 years service or 10 years and age 55  BENEFIT ACCRUAL: 3.38% credited toward each year of work  FINAL SALARY: average of 2 highest years (7)
  9. 9. Sample Retirement  20 years of service  Benefit Accrual 3.38%  Final 2 years salary average $70,000 20 X .0338 X $70,000 = $47,320 per year or $3,943 per month (8)
  10. 10. Benefit Options Retirees can select a reduced monthly retirement payment in order to provide additional benefits to their spouses, children or designated beneficiaries upon the death of the retired officer (9)
  11. 11. Death of an Active Officer  Beneficiary is entitled to receive survivorship benefits whether the officer’s death is duty- related or non-duty related. (10)
  12. 12. Deferred Retirement Option Plan (DROP)  After 20 years of service  Retire and monthly benefit is frozen  Work at regular salary for up to 5 years  Maximum combined service is 27 years  City does not make pension contribution during DROP period  Monthly pension benefit placed in tax- deferred account (11)
  13. 13. DROP  If disabled, cannot get disability pension  At end of DROP – terminate employment and receive amount in DROP account  DROP account receives interest based on plan’s actuarial return (7.75%)*  Interest on DROP account stops when officer terminates employment  Retirees receive no COLA *If investment return is greater than 7.75%, the city’s plan earns an additional amount (12)
  14. 14. City Benefits from DROP  City saves pension contributions on officers while in DROP program  City saves money on pensions as the benefits are frozen at time of DROP  City saves money on recruitment and training of new employees  City saves money by keeping experienced employees (13)
  15. 15. Disability Pension Benefit Service-Related Disability Pension: disability on the job or related to job duties – 65% of current salary (reduced by workers’ comp) Non-Service Related Disability Pension: disability is not job related – 50% of current salary (reduced by workers’ comp, Social Security disability or other earned income) (14)
  16. 16. Overtime Police – 40 hours of overtime per year count toward retirement (funded by the casualty insurance premium tax, which is not a cost to the city) Firefighters – overtime does not count toward retirement (15)
  17. 17. Unused Leave Unused sick and annual leave do not count toward retirement benefits – cannot increase monthly pension benefit (16)
  18. 18. Firefighters Supplemental Share Plan  Established by the City in 2005  Paid by property insurance premium tax  Extra premium tax revenue each year is allocated into individual accounts  After 10 years service, firefighters receive a lump sum payable upon termination, retirement, death or disability* * If officer suffers service-related death or disability with less than 10 years service, the account balance is paid. (17)
  19. 19. Pension Plan Statistics  Average Police Pension $3,438 per month  Average Firefighter Pension $3,513 per month  Plan had positive investment returns 15 of past 19 years  78% of retirees live in Florida  Each dollar of pension benefits paid creates $1.41 in local economic activity* *National Institute on Retirement Security, Study of Florida pension benefits (18)
  20. 20. Police and Firefighters’ Pension Plan Defined benefit pension providing a lifetime, guaranteed benefit and financial security and dignity to all retirees who served the City of Fort Lauderdale each day as police officers and firefighters, sometimes giving their lives to protect our citizens. (19)
  21. 21. Police and Firefighters’ Pension Plan  Providing employees with adequate retirement, death, disability, and survivor pension benefits is an invaluable way to reward the contributions of hard working and dedicated public safety officers.  It is simply good economic, public policy. (20)

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