17THE CITY OF PLEASANT LIVING
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OFFICE OF THE CITY MANAGER
INTER-OFFICE MEMORANDUM
The Honorable Mayor & Members ofthe City Commission
Steven Alexander, City Manager
December 15, 2015 Agenda Item No.: 11
A Resolution authorizing the City Manager to expend an amount
not to exceed $12,000 with Gabriel Roeder Smith & Company to
perform an Actuarial Projection Study of the City's General and
Police Employee's Pension Plan.
Gabriel, Roeder, Smith & Company will prepare actuarial
projection study(s) for the City's General and Police Employees
Pension Plan as directed by the City Manager. The actuarial
projection study(s) are required for the City's American
Federation of State, County and Municipal Employees (AFSCME)
and Police Benevolent Association negotiations.
The City of South Miami continues to work in studying and
completing projections using Gabriel Roeder Smith and Company
(GRS), the City's pension plan actuary. The City is not only
reviewing and studying benefit and cost projections related to the
Florida Retirement System (FRS), but also reviewing at effects of
amending the City's existing current retirement benefit plans.
The City of South Miami has previously used Gabriel, Roeder,
Smith & Company as a consultant on multiple impact studies and
projections and all most recent actuarial valuation reports are
produced by Gabriel, Roeder, Smith & Company using the City's
existing retirement data.
An amount not to exceed $12,000.
001.1410.513.3100, Finance Professional Services, with a current
balance of $5,443.
Resolution for approval
Gabriel Roeder Smith & Company's engagement letter.
1 RESOLUTION NO. ______ _
2 A Resolution authorizing the City Manager to expend an amount not to exceed
3 $12,000 with Gabriel Roeder Smith & Company to perform an Actuarial Projection
4 Study of the City's General and Police Employee's Pension Plan.
5 WHEREAS, Gabriel, Roeder, Smith & Company will prepare actuarial projection
6 study(s) for the City's General Employee's Pension Plan as directed by the City Manager;
7 and,
8 WHEREAS, the actuarial projections study(s) are required for the City's American
9 Federation of State, County and Municipal Employees (AFSCME) and Police Benevolent
10 Association negotiations; and,
11 WHEREAS, the City of South Miami continues to work in studying and
12 completing projections using Gabriel Roeder Smith and Company (GRS), the City's
13 pension plan actuary; and,
14 WHEREAS, the City is not only reviewing and studying benefit and cost
15 projections related to the Florida Retirement System (FRS), but also reviewing at effects
16 of amending the City's existing current retirement benefit plans.
17 NOW THEREFORE BE IT RESOLVED BY THE MAYOR AND CITY COMMISSION OF
18 THE CITY OF SOUTH MIAMI, FLORIDA THAT;
19 Section 1. The City Manager is authorized to expend an amount not to exceed
20 $12,000 with Gabriel Roeder Smith & Company to perform an Actuarial Projection Study
21 of the City of South Miami General and Police Employee's Pension Plan on behalf of the
22 City, charging account 001.1410.513.3100, Finance Professional Services.
23 Section 2. This resolution shall take effect immediately upon adoption.
24 PASSED AND ADOPTED this __ day of ___ -', 2015
25 ATTEST: APPROVED:
26
27
28 CITY CLERK MAYOR
29
30 COMMISSION VOTE:
31 Mayor Stoddard:
32 READ AND APPROVED AS TO FORM, Vice Mayor Harris:
33 LANGUAGE, LEGALITY AND Commissioner Edmond:
34 EXECUTION THEREOF Commissioner Liebman:
35 Commissioner Welsh:
36
37 CITY ATTORNEY
GRS Gabriel Roeder Smith & Company
Consultants & Actuaries
December 3, 2015
Mr. Alfred Riverol
Finance Director
City Hall, 15t Floor
6130 Sunset Drive
South Miami, Florida 33143
One Ellst Brow<lrd Blvd.
Suite 505
Ft. Lauderdale, PI.. 3330.1-1804
Re: Engagement Letter for Actnarial Services -Actuarial Projection Stndy
Dear Alfred:
954.527.1616 phone
9.14.525.0083 fax
www,gabriclrocdcr.colll
As requested, Gabriel, Roeder, Smith & Company (GRS) is pleased to present this engagement
letter to perform an Actuarial Projection Study of the City of South Miami Pension Plan (Plan)
on behalf of the City.
We are enthusiastic about extending our existing relationship with you and your colleagues. We
have a long-standing commitment and experience with working on behalf of public sector
benefit programs. Our philosophy of developing a partnership with our clients emphasizes the
collaborative nature of the GRS working relationship. We strive to earn your trust as your
advisor. We will continue to work together with you in the best interest of the interested parties.
Description of Services
The professional services will be provided under the supervision of Larry Wilson, A.S.A., E.A., a
Senior Consultant and Actuary with over 25 years of experience in employee benefit plans, Kelly
Adams, A.S.A., E.A., a Consultant and Actuary with over 15 years of experience with employee
benefit plans and Jen Borregard, E.A., a Consultant and Actuary with over 15 years of experience
with retirement systems.
We understand the City is interested in analyzing the impact of the following proposed changes
in Plan provisions:
~ Police Officer employee contributions will be capped at eight percent (8%) !!!: ten percent
(10%) of compensation.
~ Re-open the plan for General Employees with the following new Tier of benefit
prOVISiOns:
D General Employees become vested upon completion of ten (10) years of service.
D The benefit multiplier will be 1.6% for each year of service.
D Final Average Compensation will be the highest eight (8) years of compensation.
Mr. Alfred Riverol
December 3, 20 IS
Page Two
o Nonnal Retirement will be attainment of age 651!! completion of thirty three (33)
years of service.
o General Employee contributions will be capped at ten percent (l 0%) of
compensation for current General Employees in the Plan. General Employees
joining the plan on or after October 1, 2014 will be required to contribute three
percent (3.0%) of compensation.
o No cost-of-living adjustments will be provided.
~ General employees in the current defined benefit plan will have a one-time option to
freeze their current benefit and join the new Tier benefits shown above.
o General Employee contributions will be capped at ten percent (l 0%) of
compensation for current General Employees in the Plan not exercising this
option.
o For purposes of this Study, 100% of employees currently accruing benefits in the
Plan are assumed not to exercise this option.
~ Two thirds of new General Employees and current employees in the Defined
Contribution plan will join the defined benefit plan under the new Tier benefit provisions.
~ Provide a defined benefit pension plan for employees designated as members of the
Administration Management Service Class with the following benefit provisions:
o Participants will be 100% vested upon completion of three (3) years of service for
initial members as of date of adoption. New participants will be 100% vested
upon completion of three (3) 1!! five (5) 1!! eight (8) years of service.
o The benefit multiplier will be 3.0% for each year of service.
o Final Average Compensation will be the highest eight (8) years of compensation.
o Nonnal Retirement will be attainment of age 651!! completion of thirty three (33)
years of service.
o Employees will be required to contribute seven percent (7.0%) of compensation.
o Employees who will receive the above benefits and who are currently a
participant in the Plan will have their Plan benefits frozen as of the date of
adoption of this new Administration Management Service Plan.
o For purposes of this Study, all employees eligible for these benefits will join this
new Administration Management Service Plan and no longer participate in the
Defined Contribution plan.
~ Alternative Defined Contribution plan offered to all General Employees
o Employees will be required to contribute three percent (3%) of compensation
o The City will contribute seven percent (7%) of compensation
o Employees will be vested after completion of one (1) year of service
Gabriel Roeder Smith & Company
Mr. Alfred Riverol
December 3, 2015
Page Three
~ One third of new General Employees and current employees in the Defined Contribution
plan will join the Alternative Defined Contribution plan.
This Actuarial Projection Study will include the development of 30-year deterministic
projections measuring the impact of the proposed changes.
Proposed Fees
We propose a not-to-exceed fee of $12,000. Our fee includes one meeting with the interested
parties to present the key financial results.
Other Items
Please provide a listing of employees who will be participants in the Administration
Management Service Plan.
Timing
We will deliver our Actuarial Projection Study within sixty (60) days following authorization to
proceed and receipt of requested data.
We trust the above is responsive to your request. Please do not hesitate to contact us should you
have any questions or require additional information. We look forward to your approval to
proceed and to assisting the City of South Miami with this important project.
Sincerest regards,
~.~.U~
Lawrence F. Wilson, A.S.A
Senior Consultant and Actuary
Gabriel Roeder Smith & Company