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HomeMy WebLinkAboutResolutions - 2017.04.26 - 22871MISCELLANEOUS RESOLUTION #17088 April 26, 2017 BY: Robert Hoffman, Chairperson, Human Resources Committee IN RE: HUMAN RESOURCES DEPARTMENT - AMENDMENT OF SECTION 34 OF THE DEFINED BENEFIT PENSION PLAN CONCERNING REDETERMINED AMOUNTS FOR 2017 To the Oakland County Board of Commissioners WHEREAS by MR 96101 this Board of Commissioners established the Oakland County Employees Retirement System Restated Resolution in 1996 as Amended in May of 2016 by MR 16117 (hereinafter "Defined Benefit Plan" or "Plan."); and WHEREAS the attached Section 34 of the Plan provides for certain Post Retirement Benefit Increases; and WHEREAS unless the provisions in Section 34 are modified as to the application of the "redetermined amount", those who retired under the Plan between January 1, 2012 through May 1, 2012 (hereinafter "certain 2012 retirees"), will have their pension amount reduced below what they had previously received based on their May 1, 2016 redetermined amount; and WHEREAS on March 23, 2017, to address this situation, the Oakland County Retirement and Deferred Compensation Board approved a motion to recommend that Section 34 of the Plan be modified as follows: "34.7 - 2017 Suspension of Application of Redetermination Amount" Effective May 1, 2017, the first sentence of the last full paragraph of Section 34 shall be amended to read as follows: The redetermined amount calculated for 2017 shall not be less than the redetermined amount calculated for 2016, This amendment shall be void and shall have no further force and effect as of April 30, 2018." WHEREAS the recommendation of the Oakland County Retirement and Deferred Compensation Board, if approved by the Board of Commissioners, will result in the pension benefits of these certain 2012 retirees remaining the same amount as of May 1, 2017 as their prior redetermined amount payable as of May 1, 2016; and WHEREAS the Human Resources Retirement Unit has calculated the cost of maintaining the Plan benefits for these certain 2012 retirees at this level from May 1, 2017 through April 30, 2018 to be approximately $3,529, and such costs will be paid from the Defined Benefit Plan assets. NOW THEREFORE BE IT RESOLVED that the Oakland County Board of Commissioners adopts the amendment to Section 34 of The Plan as set forth above. Chairperson, on behalf of the Human Resources Committee, I move the adoption of the foregoing resolution. Commissioner RoVert Hoyfritn, District *2 Chairperson, Human Resources Committee HUMAN RESOURCES COMMITTEE VOTE: Motion carried unanimously on a roll call vote. b. Determine each such vested former Member's Pension as defined in Section 18; c. Determine the present value, as of October 1, 1994, of the lump-sum actuarially equivalent benefit of each such vested former Member's Pension using all of the Retirement Commission's actuarial assumptions as in effect for funding purposes for the December 31, 1993 annual actuarial valuation; d. Make the same determination in (c), except without the use of a Disability factor; and e. Notify each such vested former Member in writing that they have an irrevocable, one-time election continuing for no less than thirty (30) days nor more than ninety (90) days in which to decide as to whether they want to receive a single sum payment of the value determined in (d) on or about October 1, 1994 in lieu of any further Pension from this System and specifically waiving any rights to benefits from the Oakland County Retirees' Health Care Trust. 1997 Special Window Section 34.3, special window period for employees transferring from the Oakland county employees retirement system DB part to the DC part The retirement commission shall undertake the following for members of the DB part: a. Determine who the members of the DB part are as of December 31, 1996; b. Determine each such members accrued benefit as of December 31, 1996, as defined in section 18 of the DE part; c. Determine the actuarial present value as of December 31, 1996 of each members accrued benefit using the assumptions from the December 31, 1996 annual actuarial valuation, as approved by the retirement commission, with regard to interest, post-retirement mortality and annual post-retirement increases. Post- retirement mortality rates will be a blend of 50% male and 50% female mortality, so that gender will not be a factor. The assumed retirement date shall be as stipulated in paragraph e(3) below; d. Notify each such member in writing that they have an irrevocable election continuing for sixty(60) days after such notice in which to decide whether to participate in the dc part and thereby have the value determined in 8 transferred to the dc part of the system hereafter identified in subparagraph (h) but with benefit accruals under the DE part ceasing as of December 31, 1996; e. In determining the actuarial present value, the following shall control: (1) final average compensation, (FAC) shall be calculated as though the member were leaving the county's employ on December 31, 1996; (2) in determining the members normal retirement date, it shall be assumed that the member will retire on the first day the member would otherwise satisfy the normal retirement age and service requirements of section 17 of the DB part if he were to continue as a full-time employee of the county; (3) no redetermination shall be made to give credit for any future raises or interest rate changes in the definition of actuarial equivalence used in the DB part; (4) the retirement commission shall include in final average compensation such additional items of earned or accrued employment related compensation as it determines to be reasonable and non-discriminatory; (5) each members accrued benefit shall be based on actual years of credited service at December 31, 1996. f. In making the transfer from the DB part to the dc part, interest from December 31, 1996 to the date hereafter identified in subparagraph (h) shall be added to the present value as of December 31, 1996 at the rate of 7.5% per annum; g. A member who elected to participate in the DC part as provided herein shall enter same on the first day of the month following the end of the 60 day election period and shall cease participation in the DB part on the last day of the month immediately preceding entry into the dc part; h. Establishment of account balances. Those members of the DB part who elect to participate in the dc part under this special election shall have separate accounts established for the transfer of assets to the dc part (transferred account) at the end of the month following the end of the 60 day election period of subparagraph (d) and be fully vested in the transferred account but subject to the vesting schedule of section 7 of the dc part for the county's contributions after entry into the DC part; i. Effect on 415. Amounts transferred pursuant to this section shall not be taken into account in determining the component of the annual additional attributable to employee contributions; (1) amounts in a members transferred account may not be withdrawn by, or distributed to the member, in whole or in part, except as provided in subparagraph (2); (2) at the members normal retirement date, or such other date when the member shall be entitled to receive a distribution from the do part, the fair market value of the members transferred account shall be added to the amounts otherwise available. (3) the members transferred account shall share in income earned, investment gains and losses attributable thereto, less any expenses in the same manner as any other account. Defined Contribution transfer option for Benefit Group General Option A Section 34.4 The retirement commission shall undertake the following with respect to members of Benefit Group General - Option A who are not represented employees and represented employees whose collective bargaining agreement provides for these benefit modifications: a. As of December 31, 1999 determined who the members are that are eligible to make a current election; b. Determine each such members pension as defined in Section 18 of the defined benefit part of the retirement system; c. Determine the present value, as of December 31, 1999 of the lump-sum actuarial equivalent accrued benefit of each such vested members pension using all of the retirement commission's actuarial assumptions as in effect for funding purposes for the September 30, 1999 annual actuarial valuation; d. Make the same determination in (c), except without the use of a disability factor using for funding purposes; and e. Notify each vested member in writing that they have an irrevocable one-time election continuing for no less than seven (7) days nor more than ninety (90) days in which to decide as to whether they want to have the single sum payment of the value determined in (d) on or about April 1, 2000 in lieu of any further pension from this system. Incentive Retirement Program. Section 34.5 The Retirement Commission shall undertake the following for all members of the Oakland County Retirement System, regardless of whether they are a member of the DB part or DC part if they satisfy the following conditions: a. This program shall be open to non-represented members and all represented members excluding employees represented by the Oakland County deputy sheriff's association, the Oakland County command officer's association and elected officials of the county ('covered class'); b. The covered class shall be further limited to those members who are eligible to retire by December 31, 2002 or whose age and service, including military service credits and Michigan reciprocal retirement act service time totals 75 by that date, with a minimum of twenty (20) years and a minimum age of fifty (50); c. Those members of the covered class who so qualify must file written application with the Retirement Commission not less than thirty (30) days in advance of their requested retirement date, on the appropriate form, but in no event later than January 31, 2003, with the proposed retirement date being no sooner than November 15, 2002 and no later than March 31, 2003; d. Those members who file such application for payment of the incentive retirement from the Retirement System shall receive lump sum retirement incentive pay of 26 weeks salary determined as of September 30, 2002 (i.e. base salary longevity but not including overtime or shift premium pay); e. This lump sum retirement incentive pay shall not be included in either the final average compensation (FAC) for employees in the DB part of the Retirement System or in the amount of either employee or county contribution to the DC part of the retirement system. 2016 One Time Suspension of Application of Redetermination Amount Section 34.6 Effective May 1, 2016, the first sentence of the last full paragraph of Section 34 shall be amended to read as follows: The redetermined amount calculated for 2016 shall not be less than the redetermined amount calculated for 2015. This amendment shall be void and shall have no further force and effect as of April 30, 2017. 2017 Suspension of Application of Redetermination Amount Section 34.7 Effective May 1, 2017, the first sentence of the last full paragraph of Section 34 shall be amended to read as follows: The redetermined amount calculated for 2017 shall not be less than the redetermined amount calculated for 2016. This amendment shall be void and shall have no further force and effect as of April 30, 2018. Resolution #17088 April 26, 2017 The Vice-Chairperson referred the resolution to the Finance Committee, There were no objections.