HomeMy WebLinkAboutResolutions - 1996.12.12 - 24706MISCELLANEOUS RESOLUTION #96277
BY: Finance / Personnel Committee, Sue Douglas, Chairperson
IN RE: DEFINED CONTRIBUTION RETIREMENT PLAN
To the Oakland County Board of Commissioners
Chairperson, Ladies and Gentlemen:
WHEREAS the County of Oakland continues to explore opportunities to
control personnel costs while maintaining a competitive salary and benefit
package; and
WHEREAS the County of Oakland has taken extraordinary steps in the past
three years to develop economical and desirable employee benefit alternatives;
and
WHEREAS the County of Oakland adopted an optional Defined Contribution
Retirement Plan in 1994, on the recommendation of a committee comprised of
representatives of the Board of Commissioners, County Executives Office, the
Departments of Personnel and Management and Budget and the County Retirement
Board; and
WHEREAS employees were offered a chance to transfer from the Defined
Benefit Retirement Plan into the new Defined Contribution Retirement Plan
within a twelve month window of opportunity, commencing January 1, 1995; and
WHEREAS many employees who failed to meet the one transfer window
deadline have seen the Defined Contribution Retirement Plan in operation for
two years and have a better understanding of the potential of the plan; and
WHEREAS a number of employees still in the Defined Benefit Retirement
Plan have indicated an interest in transferring to the Defined Contribution
Retirement Plan; and
WHEREAS it is in the best interests of the County and those employees
wishing to transfer to the Defined Contribution Retirement Plan to temporarily
re-open the window of opportunity for 60 days for those employees who wish to
transfer; and
WHEREAS ERISA retirement plans allow working employees to begin
withdrawals from Defined Contribution retirement plans in the year the
employee turns age 70 %, and
WHEREAS Oakland County's Performance Retirement, Defined Contribution
Plan makes no provision for withdrawals upon the employee's attainment of age
70 %, and
WHEREAS the absence of a withdrawal provision for working employees age
70 % and older may result in unnecessary tax penalties when the employee
retires and begins withdrawals, and
WHEREAS a provision to allow withdrawals from the Performance
Retirement, Defined Contribution Plan for working employees age 70 % or older
will have no financial impact on the County, and
WHEREAS the attached amended "Defined Contribution Retirement Plan" has
been reviewed and recommended for adoption by the County Executive;
NOW THEREFORE BE IT RESOLVED that the Board of Commissioners hereby
authorizes a 60 day window of opportunity for general, non-represented
employees and represented employees who negotiate for this opportunity, to
transfer, at their option, to the new Defined Contribution Retirement Plan
commencing on April 1, 1997 through May 30, 1997, and
BE IT FURTHER RESOLVED that the plan offered to employees currently in
the Defined Benefit Retirement Plan, including general non-represented
employees and represented employees whose labor bargaining agreement provides
for this option, shall be the same plan offered to employees that transferred
to the Defined Contribution Retirement Plan between January 1 and December 31,
1995 with the exception that the amount transferred for each employee will be
the actuarial value of their Defined Benefit Retirement Plan as of the last
pay date in December, 1996, and
BE IT FURTHER RESOLVED that a member who continues in the employ of the
County, the State of Michigan or any of its political subdivisions past April
1 of the Calendar year immediately following his/her attainment of age 70 %
may elect to receive all or any part of his/her account at any time ("post NRA
distribution") and continue to have ongoing contributions credited to his/her
account, and
BE IT FURTHER RESOLVED that the Performance Retirement - Defined
Contribution Plan document shall be amended as outlined in the attachments
hereto.
Chairperson, on behalf of the Finance and Personnel Committee, I move the
adoption of the foregoing resolution.
FINANCE / PERSONNEL COMMITTEE
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q.
1997 SPECIAL ELECTION
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. Detirmine who the Members of the DB Part are as of
December 31, 1996;
b. Determine each such Member's Accrued Benefit as of
December 31, 1996, as defined in Section 18 of the DB
Part;
c. Determine the actuarial present value as of December
31, 1996 of each such Member's 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 504; 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
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after such notice in which to decide whether to
participate in the DC part and thereby have the value
determined in (c) transferred to the DC part of the
System as hereafter identified in subparagraph (h) but
with benefit accruals under the DB 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 Member's 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;
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(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 Member's 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 elects 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
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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 Addition attributable to
Employee Contributions;
(1) Amounts in a Member's 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 Member's Normal Retirement Date, or such
other date when the Member shall be entitled to receive
a distribution from the DC part, the fair market value
of the Member's Transferred Account shall be added to
the amounts otherwise available.
(3) The Member's Transferred Account shall share in
income earned, investment gains and losses attributable
thereto, less any expenses in the same manner as any
other account.
1997-ape.ele
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ROPOSED CHANGES TO OAKLAND COUNTY _RETIREMENT SYSTEM DC PART
Section 7(a) is hereby amended as follows:
Vested Termination of Membership.
Section 7. A Member of the DC part of the Retirement System who
ceases to be a Member for a reason other than eligibility for
normal retirement, duty related disability, er duty related
death, OR POST NRA DISTRIBUTION, shall be entitled to the
following percentage of his Account Balenee, based on:
Years of Credited Service Percentage Vested
Less than 3
3 but less than 4 20%
4 but less than 5 40%
5 but less than 6 60%
6 but less than 7 EICA
7 years or more 100%
(a) For the DC part, the "Distribution Date" means sixty
days after the valuation date following the earlier of the
Member's death before receipt of any distribution from the DC
part, eas termination of employment OR FILES A REQUEST FOR A POST
NRA DISTRIBUTION AS DESCRIBED IN SECTION 45.
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Section 43(a) is hereby amended as follows:
(a) Except as provided in Subparagraph (b), if a Member of
the DC part's employment terminates OR REQUESTS A POST NRA
DISTRIBUTION, his Account shall become Fixed and Nonforfeitable
as of the close of the Veluet-ien-Bete-es-iimA4ting-wit4-the 411 , of
such termination OR SUCH REQUEST.
Section 43(f)(1) is hereby amended as follows:
(f) A Member's Fixed Account:
(1) shall be distributed no later than sixty (60) days
after the termination of employment OR REQUESTS A POST NRA
DISTRIBUTION.
Section 45 is hereby amended as follows:
Late Retirement.
Section 45. A Member who continues in the employ of the County,
THE STATE OF MICHIGAN OR ANY OF ITS POLITICAL SUBDIVISIONS past
his Normal Retirement Age shall remain a Member 4ft OF the
Retirement System for all purposes, and shall be fully vested in
his Account Delenee and in any subsequent additions upon his
- attaining Normal Retirement Age but no retirement benefits shall
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be payable to him until his actual retirement. At the time of
his actual retirement, benefits shall be paid to the Member as if
he had retired on his Normal Retirement Date except that his
actual retirement date shall be substituted for any reference to
the Normal Retirement Date. NOTWITHSTANDING THE FOREGOING,
EFFECTIVE JANUARY 1, 1997 A MEMBER WHO CONTINUES IN THE EMPLOY OF
THE COUNTY, THE STATE OF MICHIGAN OR ANY OF ITS POLITICAL
SUMIVISIONS PAST APRIL 1 OF THE CALENDAR YEAR IMMEDIATELY
FOLLOWING HIS ATTAINMENT OF AGE 70% MAY ELECT TO RECEIVE ALL OR
ANY PART OF HIS ACCOUNT AT ANY TIME ("POST NRA DISTRIBUTION") AND
CONTINUE TO HAVE ONGOING CONTRIBUTIONS CREDITED TO HIS ACCOUNT.
MD -DC11.96
11/25/96
4 rtY r
Resolution #96277 December 12, 1996
Moved by Douglas supported by Kingzett the resolution be adopted.
AYES: Kaczmar, Kingzett, McCulloch, Moffitt, Obrecht, Palmer, Pernick,
Powers, Quarles, Schmid, Taub, Wolf, Amos, Crake, Devine, Dingeldey, Douglas,
Garfield, Holbert, Huntoon, Jacobs, Jensen, Johnson. (23)
NAYS: None. (0)
A sufficient majority having voted therefor, the resolution was adopted.
STATE OF MICHIGAN)
COUNTY OF OAKLAND)
I, Lynn D. Allen, Clerk of the County of Oakland, do hereby certify that the
foregoing resolution is a true and accurate copy of a resolution adopted by the
Oakland County Board of Commissioners on December 12, 1996 with the original
record thereof now remaining in my office.
In Testimony Whereof, I have hereunto set my hand and affixed the seal of the
County of Oakland at Pontiac, Michigan this 12th day of December 1996.
n D. Allen, County Clerk