HomeMy WebLinkAbout1996-05-13 96-220 RESOLVECOUNCIL ACTION
DATE: 5-13-96 Item No. 96-220
Item/Subject: RESOLVE, Providing for the City of Bangor (Participating
Local District M2O) to Join the Maine State Retirement System Consolidated
Plan
Responsible Department: Administration
Commentary: In the early 199O's, the State Legislature passed enabling
legislation allowing the Maine State Retirement System (MSRS) to
lisolidate more than 250 Participating Local Districts (PDL'6) into a
mited number of retirement plans. The Consolidated Plan went into
effect July 1, 1993 and PLO's were given three years to either: (1) take
action to elect me of the Consolidated Plan offerings; (2) be transferred
into the Consolidated Plan and have MSPS determine the new plan that most
closely resembled the District's current plan; or (3) withdraw from the
MORS as a Participating Local District.
As Council is a, the City has been working toward being in
position to withdraw from the MSRS for the past three years. At thin
time, it does not appear likely that we will be in that position prior to
the June 30, 1996 deadline Accordingly, the City will need to take
action to enter the Plan. The Staff recommendation is to take affirmative
action to enter the Plan, selecting the two plana (PLAN A, regular
retirement; and PLAN 2, special retirement) which most closely parallel
our existing retirement plana.
The accompanying resolve provides the necessary language to accomplish
manom t frour existing plan to the Consolidated Plan in accordance
with Statutory requirements.
DEPARIMENT }app
manager, aConsents:
lea/ IIeU a3 pkyJd�HX vsf
CITY MANAGER
Associated Information: Resolve, Background Material from MEAS.
Budget Approval:
FINANCE DIRECI'OR�
Legal Approval:
u
CITY SOLI ITOR
Introduced For G
_ Passage
First Reading
— Referral to Finance Committee Page _ of
Assigned to Coucilox Blanchette May 13, 1996 96-220
CITY OF BANGOR
(TITLEJ AmolUPr...... R.m.Bdwe.Gx.tbz.Cit..af.RacE9x.(PadiripaSiug.Losal... _....................
Mtrict #20) to Join the Coueolidated Plan m the Maine State Raureme nt System
Dy the aw Conceit Of the atV of Ba ear.
s LVRD, _
WHEREAS, The City of Bangor participatas in the Maine State Reti.®ent System as Participating
Local Dietmt (PLD) #20 order 5 MRSA Chapter 425 6 (18201 at oeq.); and
WHEREAS, Mme than 250 Participating local Di d Plane administered by the Retir®ent
Systeri arm being caoeoLdatad roto a limited another of enurement phase; and
WHEREAS, Participating Local Districts been until June 30, 1996 to either: (1) withdraw from the
Ratireamunt Syaicm; (2) elect to join the Consolidated Plan; or (3) be tianafen d into
the Consolidated plan by the Maine State Retirement System at the level of renrameut
bermfits pre.antly provided by the City; and
WHEREAS, Tim Cityis not in a poeitiw to be able to withdraw Lrom the Maine State Rethem®t
System patron to the Coasolidat d Plan deadline date of That 30,1996;
NOW, THEREFORE, Be it Reached by the Bangor City Council that:
the City of Bangor (PLD #20) hereby elects to join the Maine State Retiremwt System
Consolidated Plan in accordance with d,e agniramenra of 5 MRSA S 18804, and
BE IT FURTHER RESOLVED that:
the City elect PIAN A (with COLA) fm its ®ployeza covered by Regular Service
Retirement and deco PLAN #2 (with COLA) for its ®ployeas covered by Special
Service Retirement, and
BE IT FURTHER RBSOLVBD that:
the City Manager is hereby authorized to the appropriate canon including signing the
Agreement on behalf of the IaJ District to eMcchuate the term, and conditions
repdred to join the Maine State Retirement Syst® Cwuol;dated Plan before June 30,
1996.
IN CM COUNCIL
May 13, 1996
First Reading
Referred to Finance
Committas D
in UiM
TY COUNCIL
May 29, 1996
Passed
CI C J
96-220
EES0LVE
Providing for the City of Bangor
(Participating Local District d2O) to
Jain the Consolidated Plan in the Maine
Slate Retirement ////S��pva[e��m/p/
96-220
Overview of SPECIAL Service Retirement Plans
Available Under Consolidation
NOTE: Districts that currently have plans with COLA (cosi-of-living adjustments) must
adopt service retirement plans with COLA under Consolidation. Only districts
without COLA before Consolidation may not have COLA after Consolidation.
Plans 3, 3-A, 4, and 4-A are available only for firefighters and police officers.
For more detailed information about these plans, please review Chapter 803 of
the MSRS Rules or other materials we have sent you on the. Consolidated Plan.
PLAN #1 (with COLA) and PLAN #1-A (without COLA)
• 1/2 (50%) of average final compensation
• 20 years of creditable service
•
+2% of average final compensation for each year of creditable service beyond
20 years ..
• Employee contribution rate is 6.5%
PLAN #2 (with COLA) and PLAN #2-A (without COLA)
1/2 (50%) of average final compensation
25 years of creditable service
+2% of average final compensation for each year of creditable service beyond
25 years
Employee contribution rate is 6.5
PLAN #3 (with COLA) and PLAN #3-A (without COLA)
• 213 (66.67%) of average final compensation
• 25 years of creditable service
•
+2% of average final compensation for each year of creditable service beyond
25 years
• Employee contribution rate is 8.0%
- PLAN #4 (With COLA) and PLAN #4-A (without COLA)
• 1/50 (2%) of average final compensation for each year of creditable service
• Normal retirement age = 55 with 25 years of creditable service
• Reduced retirement before age 55 with 25 years of creditable service
Employee contribution rate. is 7.5%
_ (overview of3eaula[ Plans on reverse �)
.✓ - OCT 311995 96-220
Overview of REGULAR Service Retirement Plans
Available Under Consolidation
PLAN A (with COLA) NOTE: Districts that currently have plans with COLA (cost -of -liv-
ing adjustments) must adopt service retirement plans with COLA
under Consolidation.
• 1/50 (20%) of average final compensation for each year of creditable service
Normal Retirement Age = 60
Reduced retirement before age 60 with 25 years of creditable service
Employee contribution rate = 6.5
PLAN A-1 (without COLA) NOTE: Only districts without COLA before Consolidation may
not have COLA after Consolidation.
• 1/50 (2%) of average final compensation for each year of creditable service
Normal retirement age = 60
Reduced retirement before age 60 with 25 years of creditable service
Employee contribution rate =6.5%
PLAN B (available only with COLA)
This plan is available only to those districts that also have Social Security.
1/100 (1%) of average final compensation for each year of creditable service
Normal retirement age = 60
Reduced retirement before age 60 with 25 years of creditable service'
• Employee contribution rate =3.00/6 - For more detailed information about these plans, please review Chapter 803 of the MRS
.Rules or other materials we have sent you on the Consolidated Plan. -
(overview of soecial Plans on reverse :)
1 fcem fae Plan paSubjectrticipation
to 5 MRSA $10203, a participating
wilocalthdrawal
awal in may dishdrawtrict's
free
mp employees
is Bove In The Plan. The effect of
wlthd[ewal an CM1B dietilct •a employees le governed by 5 MRSA 510354.
Districts,V. Qjpbaodod Or Dissolved The affect of the disbanding or
dissolution Of a district that participates in The Plan on the memberehLp aid
('.benefits its employees In governed by 5 MRSA 518255 and $18408.
F. Chases Of 59- led & Benefit Plan or Plans, After beginning
participation in The Plan a participating local district may elect to change
the service retirement benefit plan or plane which apply to the dLetrict'c
employees by following the same process set forth In 8action-2 for '
participation in The Plan. The change is applicable to all current and future
employees who are members, if the change results in a higher level of benefits
for the district's employees. The change LP applicable to new employees only,
if the change results is a lower level of benefits for the district's
employees. The Executive Director shall prepare either a new agreement or an
Amendment to the district's agreement which will be signed by the authorized
representative of the district and the Executive Director. The effective date
of the change is July 1 Immediately following the date the new agreement o
amendment to the agreement is signed by the authorized representative of the
district and the Executive Director. -
- 003-5 -
96-220
ports of aThend Plan applicable to the district and the duties andrightsIns of the
district and CM1a Retirement System. She resolution or order spall inclutle:-
1. Approval of the participation in The Plan;
2. The regular service retirement benefit plan and, if applicable,
'special service retirement benefit plan elected from those provided
by?Y
this-Gapter for the district'e empleyeeal
3. A list of classes, and a list by came add socialsecurity number,. of
any employees who'are excluder from membership based upon their being .;
provided for by local Pension provisions;
<. Any limitations on the granting of service credits to employees for
service before the beginning date of the participation of its
employees in The Plan; and
S. The name or title of the pe[ authorized to sign the agreement on
behalf of the local district.
Effec 've Oate O drat o � 0 art ci at o
1. Effective Date. July 1, 1993, is the effective date of The Plan.
participating local districts and other local districts may enter into
an agreement to participate in The Plan on and after that date.
2. Date The Plan Goes Into Operation. The Pian will be put into -..
operation as of July 1 immediately following, the date when: _
a. The number of local districts that have entered into agreements
For pbrtl4paticn in The Plan with an election of regular service
retirement benefits for their employees exceeds 3% of the
districts which as of that date are participating in the
Retirement System in regular service retirement benefit plane;
b. The number of local districts that have entered into agreements
for participation in The Plan with an election of special service
retirement benefits for their employees exceeds 3% of the
districts which as of that data are participating in the
Retirement System special service retirement benefit plans; and
. In each instance the total number of members employed by districts
that have entered ag[e menta exceeds 5% of the total of all
participating local district members in each category as of that
date.
3. Date of Participation. The date of participation in The Plan for a
participating 1 1 district is July 1 immediately.following th d t
whichOn the agreement 'f 'participation - 1 Signed by E e[ ti A
t- d th to 1 d B tativa f GF p ti lyati g l ale. -
h r�
district, unless The PlanIs not then ln_op ti n; in Which th .:
d t f participation is the date en which ThePlan goes Into + p^-.
operation.
...
- ea3-a -
p 96-220
x ."rMAr OIATRICT PPRTSCIPAi SOH _\moi,'. �.
A participating Local District RldctiQn.Before July 1, 1996, the H„
executive body or legislative body of each local district that is a
participating local district under -5 AREA, Chapter 425 (SIS201at seq.( must,.
by resolution or order, elect one of the following options. Failure to make m
l
election will have the same effect as electing paragraph 2.. .,�...�,_.
1.
To Jin The Plan. A participating local distr
act may TS ct t
participate in The Plan in accordance with the requirements of 5 MRSA F
1, 53EB04. Upon receipt of the certified copy of the resolution order .
M record of the vote,. the Executive Director h 11 p p
are ani .»�.�• 4_'
agreement', to be signed by theauthorizedrepresentativebf the
district and the Executive Director, specifying the pacts of The Plan -
applicable to the district and the duties and rights of the district
and the Retirement System. The resolution or order shall include:
a. Approval of the participation in The Plan;
b. The regular service retirement benefit plan and, if applicable,
the special c tvice retirement benefit plan elected from Chose
provided by this Chapter for the district's employees; and
c. The name or title of the person authorized to sign the agreement
on behalf of the local district.
2. To Be Transferred To The Plan. A participating local district may
elect to have its participation in the Retirement System transferred
to The Plan without electing the retirement benefit plan or plana for
the district's employees. -
a. The Retirement System will transfer the district's employees to
the plan or plane with the benefit level or levels closest to the
district -9 current plan or plans.
b. The resolution or order shall include the same information as that
required under paragraph 1, except that it shall state that the
Retirement System is Co determine the retirement benefit plan or
pian that apply to the district's employees.
C. The agreement ee prepared by the Executive Director shall be as
provided in paragraph 1.
3. To Withdraw From The Maine State Retirement System. Subject to 5 MRSA
518203, a Participating local district may withdraw free participation
in the Retirement System. The effect of withdrawal an the district's
employees Is governed by 5 mask 518254.
grist that Is not a participating,loca3 a
r'. into an agreement for participationof
tem only under The Plan and in the m
2. Upon receipt of the certified copy of
the vote, the Executive Director shall Be
803-3 -
96-2n
Lenin to PLD Atlmimstrators
October 30, 1993
Page 2
embers anendmg m informational meeting about the Consolidated Plan, we maybe able to hold some
general meetings for groups of PLDs in me coming months. Please contact me to let me know of your
interest (including some idea of the number ofpmpls you would expect to attend and the best time of day
for the meeting).
At this point we are not sure bowmany meetings we may be ableto handle. Bnt ifwe
hear from a sig,u5cant number of PLDs in a most area we will try, to arrange for a general meeting for
those PLDs in that area.
Please also are that entry into the Consolidated Plan will require a f assmiated changesm
pay oll mpmung. hd'oanation abounhem changes will be provided to your PLD when we send you your
PLD's Agreement to participate. MSRS stuffwbo spttialiu by handling payroll reporting will also be
available to help with any questions you may, have.
If your PLD fails to take any action by June 1, 1996, the Consolidated Plain requires that your
PLD betreated as if it had chosen opum (b) above. thus means your PLD will be hensf rmid into the
Consolidated Plan, with the MSRS matching your PLD's warn[ service retirement plants) as closely as
possible to the appropriate service movement plaints) in the Consolidated Plan.
If your PLD no longer wishes to participate in the MSRS, it can withdraw before the holy 1,
1996, deadline. Your PLD may also choose to withdraw after itjows the Consolidated Plan. In either
ruse, withdrawal is afr inial process requiring avote ofhmor governing body and a mrti5ed copy of that
vorebeingscnttolhe MSRS. Please mterial PLDs that choose to withdraw should be sure to understand
all that is involved in withdrawing, includigq any ongoing employer mite requhtd to fund remaining:
liabilities and currurt members having a choice about cunt wing m participate. Please wooer me if you
have questions about[ his process.
Informatn about vour PLD's summit eyes and about mrts under me Consolidated Plan will be
maileito ym again in January when we will also send you your PLD's normal actuarial valuation. Until
that cost hJotmaoon is available, you can user to the cent information that you received lint January (a
green sheet), which was based on your jowng the Consolidated Plan effective July 1, 1995. If you have
quesYons about this cost information or about your actuawl valuation, please contact our Actuarial
Coordinator, Robert Mellor.
fo order to allow sufficient time for votes to be take, Agrcements to ho put together, and other
matters to be handled both by your office and ours, it is important that you begin considering your choices
at thus time, if you have not already. Please do not Msiosteto comer[ me with any questions you may lave.
Sincerely, '' nn� //__
1� (I
Brenda M. Welch
Direct Services Sp nardist for PLDs
Enclosure: Outlme of Service Retirement Plans within the PLD Consolidated Plan.
FI OCT 31 ji-3
MAINE STATE RETIREMENT SYSTEM
C6We P. Pu,+.. iw m Nrtn,.
s,nownsip. tno�,r�.
Ocrober30,1995
union M PRUSTEE5
96-220•
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Dear PLD Administrator:
Worlds the rest several months, ymur PLD las a decision to make regrading what its cents in the
Maine Slue itethemmt System (MSAs) will be after June 30,1996. As you may recall from other
crrmnuoicatious we Tuve amt you during the Tart two years, after June 30,1996, all existing PLDs that
wish Wadivelyparficipatemthe MSRSmu4dosowitMnthe PLDConmlidatd Pim. MoreNan100
ocher PLDs (with amW ofappro. u ately 5 000 mbmbem) harm alrmdylakmthe necessary steps tojoin
the plan; more Nan 60jomed effecfive July 1,1994, and=otfier 4Ojoi ed effective July 1, 1995. The nett
aced Ian date on which existing PLDs conjoin is July 1,1996
To participate in the Consolidated Plan, your PLD needs to do We following:
(1) Your PLD needs m make ora of the following choices:
(a) Choose to come into the Consolidated Plan and choose the service retirement plans) under
which your PLD wants to have its employees covered. (The piNc shat mclosd emb this letter
provides some information about Nese urvice retirement plans)
do (2boose to come into the Consolidsned Plan but have Ne MSRS chime the service retirement
plau(s) within the Consolidated Plan that best match your PLD's mrrem plan(s). This is
refrrred to as being trmsferred"into the Plan.
(2) Your PLD vecds its governing body to vote on its choice and to sand a certified ropy of that vow W
the MSRS. The me must specify Ne choice made. lfyieur PLD wishes to chances the service'
retirement plans) under which it woms its employees covered rather door w have the MSRS
throw it(them), Ne verb must also specify the plan(s)clesm. No matter which thrice your Pl,D
makes about how it raters the plan, the vote must specify the person (by name or title) who is
authonzM W signihe Agreemmt for pamcipabon. YWu would like my msisraru in making sure
Nu your governing body ewre rovers all it should, please counct me.
In order to allow sulficiem tune for bath your PLD and our officeW handle the necessary
paperwork a certified copy of this vote must be received by our once no later Wan June 1,
1996.
After eve receive.Ne certified copy of the rate, we will Prepare an Agreement for your authorized
represmrafiveN sign and return. Once the Agreement is signed and returned W our office, your
PLD will be able to inter the Consolidated Plea edwive July t, 1996.
Many PLDs have broad the materials we have mailed over Ne last two years, as well an the
meetings we held around the state m 1993, helpful N undershooting the Cmmlidated Plan. Wyou are
missing copies ofany, of Nis information. or Move questions, Tome dont hesitate to contact me ber
our era In rwMeryl e0,951.9mo o: pan ssraae Pte:
L
Nil` �( �Lmpnr, �Ilfu6u
May 17, 1996
TP THE flfiMBEPB OF THE CITY OOONCIII
Notice I none✓ awm thOt a ap.elal. Natlne 01 I1 City Coua[li du to
1a NEW 16 the COVelil Pnw,
city Hail, E819m, Me 22 1996
at Ja'clack P.
t9 eetab119M1 M Adflot :Copm�
MN,l M- I .t-•.5t.e
CWIIPMRN CF THE CITY CPASII