HomeMy WebLinkAbout1970-09-14 284-X ORDERA ..
Introduced by Councilov Mooney, Sept. 19, 1110
_ryrypp CITY OF BANGOR
(TITLE.) (Orb [f....T ansferring 23_ city Employees from the City Pension Plan to. _..
the Maine State Retirement System
By the City Coyndd of the City ofBaagsa.
ORDERED,
THAT the twenty-three (23) City Employees under the City Pension Plan
be transferred to the Maine State Retirement System at an estimated annual
costof $73,298.00, and
BE IT FURTHER ORDERED that, as a condition of this coverage, all employees
affected by this order will make a contribution of 10% of then weekly earnings.
TN CITY COUNCIL
sept. 14, 1970
Amended by deleting -23" and su]oSti-
tuting "22". AS anended, PASSED.
25t—x
ORDER
Title,
22
4ensferring N loyeea frmn City
..¢waian.¢lan.fa state .aetivement .....
Introduced and filed by
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Bangor, the tearer of Maine—rhe Gutemar w Maine's North Woodr and Searhere Rxoru
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GIliq OI Paugag Paine
TO: City Manager
FRGM: Thom Willard, Administrative Assistant
DATR: August 21, 1970
SUPJSCT: Convexsion of City Retirement System
There are presently 23 active employees who are under the
Old City Retirement System. The 23 employees form two distinct
groups for retirement purposes. i.e., the first group consists
Of eleven Fire Department and four Police Department employees,
and the second group consists of seven Public Service employees
and one School Department employee.
GROUP I
After recent labon contract negotiations, the City agreed
to establish a 20 -year Retirement System for Police and Firemen
now under the City Plan that would have similar benefits to the
Maine State 20 -year System. The question then is not whether
or not the City extends 20 -year Retirement to this first group,
but what is the best method to accomplish this goal.
2.
the Base Annual Salary of this group is currently $117,136
and since all of the men in this group are eligible to retire
under a 20 -year -half -pay system, the City has a potential annual
liability, right now, of $58,568. Using the 70 -year average life
expectancy of the Maine State Retirement System, and assuming no
wage or cost of living increases, the City has a liability of
$796,838 over the next 17 years.
While the 70 -year average life expectancy may be valuable
to the Maine State Retirement System with thousands of members,
it has little meaning for our purposes. Surely part of the group
of 15 men will live past age 70, and depending on the number that
do, the City?s $58,000 liability could be distorted considerably.
The Maine State Retirement System will assume our liability
for the 15 men on their 20 -year -half -pay system for an annual
premium of $60,889 over a 17 -year period. On the surface the
State System is more costly, and for good reason, the benefits
are greater.
The major benefit to the City is that of stabilizing the
existing liability, of getting an unknown quantity to a known
cost.
The benefits to the employees and reasons for the difference
in cost are as follows:
1. Survivors benefit under the State Plan - none
�� under the City Plan.
3.
2. Four retirement options available under
M. S. R. S. - none under City.
These options include various methods for the employees to
have retirement income continue to be available to their bene-
ficiaries in the event of their death. With the City System,
when an employee dies his retirement benefits cease. It is
primarily in this area that the additional cost is found, by virtue
of the fact that we are no longer talking about average 70 -year
life expectancy.
For comparisons sake, assume all 15 men do die at age 70.
Under the City System, the liability ends; however, under the
M. S. R. S. there is still a retirement benefit that accrues to
the spouse for as long as she may live. Again, this is the major
area or reason for the cost differential.
RECOPMMNDATION: Accept the Maine State Retirement System 17 -year
amortization of the liability for the following reasons:
We are presently self insured by having our own retirement
system; this means we are saying to ourselves that we are ready
and able, right now, to accept the consequences of all 15 men
retiring tomorrow. That is, we are ready and able to appropriate
$58,568 right now and to continue to make this amount available
for we don't know how many years, until these men die.
4.
It would seem logical that we accept and provide for this
liability with a known cost factor over a known period of time;
and in addition, make survivors benefits and continued retirement
benefits available to the spouses of our employees at an additional
annual cost of less than $2000. The 15 employees would contribute
at the )grate while they remain active in the departments.
)DID
GROUP II
This group consists of 8 City Employees and one School
Department employee who would be eligible for the new provisions
of Chapter 415, i.e., a 1/60 computation for membership service,
3 year average highest computation and an $80 minimum monthly
Nbenefit.
As a group, these men have sufficient number of years of
service (average for the group 30.2 years) to be eligible to
receive one-half their current salary. The base annual salary for
this group is $53,713, representing a retirement liability of
$26,856 annually.
The Maine State Retirement System will include these men under
our district at an annual cost of $12,409 over a period of 24 years
plus a $349 charge for membership service.
RECOMMENDATION: Include these people under the Who State
Retirement System for the same reasoning given for Fire and Police
5.
Department Personnel. This group varies somewhat from the Fire
and Police in that the amortization is 24 years instead of 17
years and the reason for this is that there are mainly more
employees throughout the state contributing to this particular
program than to the 20 -year program.
#tete mf maw
MAINE STATE RETIREMENT SYSTEM
AUGUSTA, ~Na I'll,
July 6, 1970
Mr. Tem Willard
personnel Officer
City of Bangor
Bangor, Mine 04401
If the City of Bangor should extend a 20 year half -pay retirement
to the firemen and the policeman who appeared on year listing dated
June 22, 1970 the total outstanding liability would be $)20,)90.00 and
which could be amortized over a 17 year period at a level premMm pay-
ment of $60,889.00.
For eight other employees of the public service and school deparc-
wants as on that ease listing if the City of Bangor were to
grant them credit under the provisions of Chapter 415, PL 1969, which
extends a 1160 computation for membership a rvice, three year average
highest computation, $00.00 encloses menchly benefit if ten years o
Gore and these persons would contribute at the rate of 6.14% from a
point onward to this retirement system the annual coat for the prior
service would be $12,409.00 and for the membership service $349.00 and
is would be assummed that the prior service would be amortized ever a
period of 24.years.
V trul rs,
i
E. L. Waiter
Executive Secretary
ELW:des
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All
#tete mf maw
MAINE STATE RETIREMENT SYSTEM
AUGUSTA, ~Na I'll,
July 6, 1970
Mr. Tem Willard
personnel Officer
City of Bangor
Bangor, Mine 04401
If the City of Bangor should extend a 20 year half -pay retirement
to the firemen and the policeman who appeared on year listing dated
June 22, 1970 the total outstanding liability would be $)20,)90.00 and
which could be amortized over a 17 year period at a level premMm pay-
ment of $60,889.00.
For eight other employees of the public service and school deparc-
wants as on that ease listing if the City of Bangor were to
grant them credit under the provisions of Chapter 415, PL 1969, which
extends a 1160 computation for membership a rvice, three year average
highest computation, $00.00 encloses menchly benefit if ten years o
Gore and these persons would contribute at the rate of 6.14% from a
point onward to this retirement system the annual coat for the prior
service would be $12,409.00 and for the membership service $349.00 and
is would be assummed that the prior service would be amortized ever a
period of 24.years.
V trul rs,
i
E. L. Waiter
Executive Secretary
ELW:des
Lite Ecoectonc
Fire Department
John E. Burr
12.6358
12.6358
Maurice A.
England
15.8701
14.9391
Norman L.
Catchall
13.7894
12.6358
Eugene F.
Hmmrd
122524
16.4485
Theodore A. Jellison
6.81ol
Cornelius
B. Kelleher
1).6358
James F. McDonald
16.8195
Thomas E.
McGlew
14.9391
Richard M.
O'Brien
13.4048
Donald A.
Scripture
16.0749
William E.
Welch
11.8701
Police Department
Leon D.
Hatch
12.6358
James R.
McCarthy
14.9391
John N.
McDonnell
12.6358
John W.
Welch
16.4485
811 /A
... � 6/17/7n
-
Date of
Date of
Name
PnSl Liao
Birth
Enplovment
Salary
Fire Denarbmnt
John E. Burr
Fire Lfeutemmr.
5/2/12
12/10/60
$137
Maurice A. England
Beat. Fire Chief
9/30/15
6/14/38
167
Woman L. Getchell
Fire FiFhtet
2/9/14
1/5/42
124
Eugene F. Howard
Fire Fq;hter
7/9/10
I/11/43
124
Theodore A. Jellison
Fire Chief
10/13/15
6/11/40
230
Cornelius B. Kelleher
Fire Fighter
1/14/11
5/1941
124
James F. McDonald
Fire Flj,hter
4/22/22
4/20/47
124
Thomas E. McClev
Asst. Fire Chief
9/25/17
9/8/42
162
Richard M. 093rlen
Fire Captain
4/8/13
6/30/41
144
Donald A. Scripture
Fire Lieutenant
6/18/20
9/12/45
132
William E. Belch
Fire Captain
2/22/09
6/14/38
144
Police Deportment
Leon B. Hatch
Police Captain
3/30/12
9/14/42
162
Janes R. McCarthy
Police Captain
6/26/17
4/29/46
167
Jahn N. McDonnell
Police sergeant
6/8/11
1/16/41
144
NJohn W. Welch
Police Nergeant
1/1/21
5/21/46
144
Public Services
John W. Bryce
Heavy Eouip. Oper. II
6/19/16
3/1939
132.20
Herbert E. Bums
Highway Supervisor
1/31/14
8/20/46
175
James E. Collins
Bldg. MnInt. Fnreman
12/12/06
3/1934
144
Berry E. Hill
Heavy Ecuip. Came. EI
8/2/05
1/1930
124
names E. La+bert
Heed Cuitodinn
9/16/15
12/30/46
124
George F. Trask
Mason
2/23/11
4/1941
112
J. Donald Baker
Chief Station aper.
9/24/08
11/7/32
112
School Department
John Dugan
Custodian
8/20/02
3/27/45
loo
All emp toyeea listed above are male.