HomeMy WebLinkAboutResolutions - 1997.07.17 - 25034MISCELLANEOUS RESOLUTION 197072
BY: Frank H. Millard, Jr., Commissioner, District 4
IN RE: RETIREMENT BOARD- INCREASE IN RETIREES PAYMENT
TO THE OAKLAND COUNTY BOARD OF COMMISSIONERS
Chairperson, Ladies and Gentlemen:
WHEREAS the Retirement Board recommends an increase in the compensation rates for
former employees and beneficiaries of former employees who retired prior to August 1993; and
WHEREAS the recommended increase, which is detailed on the attached schedule, ranges
from .5% of the annual benefit for those employees and/or beneficiaries of employees who retired
from 1990 to August 1993, to 5% of the annual benefit for those employees and beneficiaries of
employees who retired prior to 1975; and
WHEREAS, it is estimated that the total cost for this increase will cost approximately
$1,245,751.00, which amounts to a first year payout of approximately $120,000.00 decreasing
annually thereafter and that it has been determined that sufficient funds are available in the
Retirement fund to cover this recommendation; and
WHEREAS, the Oakland County Board of Commissioners, wishing to acknowledge the
years of valuable service given by those who are to benefit from this resolution and to assure,
within fiscally reasonable bounds, that the welfare of those who have contributed their working
lives to the betterment of Oakland County is a concern of the board and that these persons be
allowed to share, in a relatively small way, the increase in wealth, that this county has enjoyed, in
part and as a result of the contributions made to this county by those former employees.
NOW THEREFORE BE IT RESOLVED that the Oakland County Board of
Commissioners approves the Retirement Board's recommendation to grant an increase in the
compensation rates to employees and/or beneficiaries of employees who retired prior to August
1993, as detailed on the attached schedule.
BE IT FURTHER RESOLVED that the cost of this increase be paid from the Retirement
dorern, on behalf of • - 1 • rsigned, I move adoption of the foregoing resolution.
- n
H. Millard, Jr. , District 4
fund.
1000 1
February 20,1996 • II? II N7:7 • ! :
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OAK CO TREASURER rio 810 858 1810
03.08.'96 13:4u FAX 410 43: 9:13 OAR. I 03/20/97 16:42 bi :02/03 N0:647
GABRIEL, ROEDER, SMITH & COMPANY
Actuaries &Consultant's
Mr. Douglas J. Williams
Deputy County Administrator
County Of Oakland
1200 N. Telegraph Road
Pontiac, Michigan 48053
KO: Retiree Increase
Dear. Doug: . .
Per rig request we provide the following breakdown of the retiree liability as of December 31, 1994:
(I) (3) (4)
Redranent Accrued 1% of (3) without Amortization
• Date Liabli_lw Liability_ Increases of (4)
1976 & before S 7.789,892 $ 77,899 $ 73,124 _ ..f% S 4,794
1977-78, 2,904,738 29,047 27,340 ..+ 1,792
1979-81 4,662,734 46,627 43,287 _ .4. 2,838
1982-89 30,906,871 509,069 463.011 0.03 30,334
1990-93° 40,041,726 400,417 355,797 0.02 23,326
1993°-94 75,015,671 750.151 656.221 as4 —42.9211
Combined 181,321,639 1,813,216 1,618,782 0.09 106,124
through September 1993
# begbuting Octoter 1993 •
• dollar contribution first year. thereafter 0.09% of current payroll
+ added cost represents toss than 0.01% of payroll
Column 3 , 1% of the valuation liability would be appropriate if the addition veould become part of the bus
for four° annual increases. Since we understand that this Is not the cue, column 4 shows the addidonnl
accrued liability viithout annual increases. Amortization of the additional liability is shown in column S as a
percanage of 1994 payroll and as a that year dollar amount.
1995
$14,100,000
4,138,859
2,294,735
854,164
35,075
1996*
$10,451,756
6,601,640
2,871,452
924,998
32,443
14
$21,422,974 $20,882,290
$3,946,532 ($540,684)
$0
4,849,497
1,081,015
557,001
153,324
88,527
65,648
16,940
$6,822,463
$0
0
4,574,840
1,171,459
539,368
167,229
83,035
66,824
20,745
r66.13.141,ell
$14,600,511 $14,247,443
$3,423,795
30.63%
($3;
34246f 0
$66,656,817 $80,904,260
$14,600,511
28.05%
$14,247,443
21.37%
$522,737
8.311%
($187,616)
-2.76%1
Oakland County Board of Commissioners
Retiree's Health Care Trust Fund
Historical Analysis of Operating Results 1992-1995
Revenues:
Retirees' Fr. Ben. Hosp. Approp.
Gain on Sale of Investments
Interest-Investments
Dividends From Investments
Retiree's Hospitalization Riders
Miscellaneous
Total Revenues
Change
% Change
Expenses:
Benefit Payments
Other
Retirees' BC/BS Hospitalization
Loss on Sale of Investments
Fr. Ben. Retirees' Hosp.-General
Retirees' BC/BS Stop Loss
Retirees' Health Alliance
Retirees' Blue Care Network
Adjustment of Prior Years' Exp.
Fr. Ben. Retirees' Hosp.-Sheriff
Total Expenses
Change
% Change
Net Income
Change
% Change
Fund Balance
Change
% Change
For the Year Ended:
1992 1993
$9,365,610 $10,056,127
1,661,794 2,399,790
1,426,634 1,270,736
0 505,119
0 18,479
0 21
$12,454,038 S14,250,271 $17,476,442
$1,796,233 $3,226,171
"4.42% 22.641
$2,866,363 $0 $0
0 3,390,233 4,300,782
882,987 1,212,844
408,932 478,906
112,553 146,031
25,713 81,662
3,352 71,075
82,874 •
1.464 8.426
$2,866,363 $4,908,109 $6,299,725
$2,041,746 $1,391,617
71.23% 28.35%
$9,587,675 S9,342,162 $11,176,717
($245,513) $1,834,554
-2.56% 19.64%
$31,537,426 $40,879,588
$11,176,717
27.34%
1994
$12,814,266
2,331,228
1,645,867
652,221
32,843
111
$52,056,305
$9,342,162
29.62%
* Unaudited
** Due to an 'actuarial adjustment, this amount may be up to $2 million below what was actually required.
The underfunding will be adjusted in 1997.
Program Evaluation 03/27/97
For the Year Ended:
1992 1993 1994 1995 1996*
$10,444,466 $10,927,184
Appropriation
General County $1 1 ,65 1 ,583 $12,755,514 $11,589,179
Oakland County Board of Commissioners
Employees' Retirement System Fund
Historical Analysis of General Fund Contributions 1992-1996
Change
% Change
$482,718
4.62%
$724,399
6.63%
($62,404)
-0.54%
$1,166,335
10.06%
Sheriff
Change
%Change
Total Appropriation
Change
% Change
Change
%Chan_ge
2,298,804 2,380,597
$81,193
3.56%
$12,743,270 $13,307,781
$564,511
4.43%
$1,255,028
5.68%
3,910,450
$1,529,853
64.26%
$15,562,033
$2,254,252
16.94%
$28,376,299
$5,012,391
21.45%
3,595,276
($315,174)
-8.06%
$15,184,455
($377,578)
-2.43%
$29,284,455
$908,156
3.20%
3,729,283
$134,007
3.73%
$16,484,797
$1,300,342
8.56%
$26,936,553
($2,347,9021
-8.02%
Total General Fund Contributions-
Health Care Trust and Retirement S22,108,880 $23,363,908
* Unaudited
03/27/97 Program Evaluation
Qpick Facts: Retirement comparisons
OAKLAND COUNTY:
Currently, 39.95% (or 1,666) County employees are members of the
Defined Contribution (DC) Plan.
• 1,562 of the DC Plan are contributing, the remainder are serving some
portion of their probationary periods and therefore, are not yet
contributing.
• Members of the Defined Benefit (DB) Plan have been entitled to a
maximum 1.5% annual, non-cumulative increase over their first-year's
benefit since 1969.
• There were additional increases dating back to 1980 (See Chart A)
• There was a one time increase in 1990 equal to a percentage of the annual
benefit. (See Chart A attached)
• Assets of the Retirement System increased $6,078,014 in 1995.
• Disbursements of over $489.5 million were made over this same time
period.
GENESEE COUNTY:
• Also has a dual plan system, with a Defined Contribution (DC) Plan
having been first offered in September, 1996.
• 146 individuals were members of this plan at year-end 1996, and 1062
were members of the Defined Benefit(DB) Plan.
• DB Plan participants receive a year-end distribution of excess earnings of
a particular investment fund, when such excess earnings are present. The
distribution is made based on a number of factors, including years of
service. Retirees receive an annual increase of 2% (3% for the Sheriff) of
their original benefitfor thefirstfweyears of retirement.
MACOMB COUNTY:
• There are currently 1099 retirees in a Defined Benefit(DB) Plan.
• The Macomb County Board of Commissioners have voted to distribute
excess earnings from the retirement system to the retirees. This has been
maintained for the last five years not all excess earnings are distributed.
• Comment made by County Administrator that retirees were "taking this
distribution for granted".
• .No automatic percentage increases are built into the system.
WAYNE COUNTY:
• Distributes a "13th check" when actual earnings in the retirement system
exceed expected levels.
• 20 to 50 0/0 of the excess is distributed, based on a specific formula.
• Wayne County's system does not provide for an automatic percentage
increase in benefits.
Private Sector
Retirement plans are as diverse as the population they service. Many of the
larger corporations even have different retirement plans for different groups of
employees.
• At General Motors, for instance, salaried employees normally receive
increases if the UAW-represented current employees are successful in
renegotiating theirs during contract talks.
Prepared by the Prgram Evaluation and Operations Unit of the Board of Commissioners for Oakland County
e Murphy
-
Retirement onithissibner
February 13, 1997
Dennis Murphy, Chairman
Oakland County Retirement Commission
The retirees of Oakland County have not received any unscheduled benefit increases since 1990.
Despite the modest scheduled benefit increases, the effect of inflation, over time, continues to erode
the purchasing power of the retirees. Between 1976 and 1990 the county granted eleven unscheduled
increases. Despite those increases, the real worth of county pensions has greatly diminished.
The Oakland County Retirees Association proposes an increase in retiree benefit amounts according
to the schedule:
5% increase for those who retired in 1976 or before
4% increase for those who retired in 1977 and 1978
3% increase for those who retired between 1979 and 1981
1% increase for those who retired between 1982 and 1989
Y2% increase for those who retired between 1990 and August 1993.
According to the actuary's estimate of February 1996, the cost of that benefit increase would be
approximately $1,245,751. In fact, the cost will be smaller for two reasons. First, since some have
died, there are fewer retirees now eligible than were costed in the original estimate. Second, because
all of the remaining eligible retirees are one year older, the benefit increase will be paid out over a
shorter period. The cost to implement the increase will be less than 3/4 of one percent of the county
payroll.
I will propose at the next retirement commission meeting that the commission recommend the
proposal to the county board of commissioners. Thank you for your consideration.
Clifter 11
SUMMARY
POST RETIREMENT BENEFITS INCREASES
YEAR BENEFIT CHANGES
1969 1.5% increase in May of each year after one year of retirement
using the base amount
1976 1% increase beginning January, 1976
1979 1/6 of 1% increase for each full month of retirement
(2% per year), but limited to no more than $75.00 per month
• 1980 2-1/2% increase beginning January, 1980
1981 2-112% increase beginning January, 1981
1982 . 1-112% increase beginning January, 1982
1984 2-1/2% increase beginning July, 1984
1986 2% increase beginning January, 1986
1987 3% increase beginning January, 1987
1988 Monthly benefit increase of .85% for each full year of
service credit A($10.20 for each year of service)
1989 Amount equal to 2% increase was paid into the Health Care
fund to cover the $136.00 year charge active employees were
paying (Resolution #90005, $1,080,942)
1990 Increases were granted on a one-time basis equal to a •
percentage of the annual benefit as of July 1, 1990 as expressed
in the following chart:
Retirement Date Increase
1967 and Prior 10%
1968 through 1969 9%
1970 through 1972 8%
1973 through 1985 2%
1986 through 6-30-89 1%
21
Resolution #97072 April 10, 1997
The Chairperson referred the resolution to the Finance and Personnel
Committee. There were no objections.
FISCAL NOTE (M.R. #97072) July 17, 1997
BY: FINANCE AND PERSONNEL COMMITTEE, SUE ANN DOUGLAS, CHAIRPERSON
IN RE: RETIREMENT BOARD - INCREASE IN RETIREES PAYMENT
TO THE OAKLAND COUNTY BOARD OF COMMISSIONERS
Chairperson, Ladies and Gentlemen,
Pursuant to Rule XII-F of this Board, the Finance and Personnel Committee
has reviewed the above referenced resolution and finds:
1. The resolution approves the Retirement Board's recommendation to
increase the compensation rates of employees and/or beneficiaries of
employees who retired prior to August 1993 on a schedule ranging
from .5% of the annual benefit to 5% of the annual benefit,
depending upon retirement date.
2. Total estimated cost equals $1,241,751, with the first year payout
equaling approximately $120,000, decreasing annually thereafter.
3. Sufficient funds are available in the Retirement Fund to cover the
cost of the increase, no separate appropriation is required.
FINANCE AND PERSONNEL COMMITTEE
Resolution #97072 July 17, 1997
Moved by Douglas supported by Millard the resolution be adopted.
Moved by Palmer supported by Douglas the resolution be amended in the NOW
THEREFORE BE IT RESOLVED paragraph to read as follows:
NOW THEREFORE BE IT RESOLVED that the Oakland County Board of Commissioners
approves the Retirement Board's recommendation to grant an increase in the
compensation rates to employees and/or beneficiaries of employees who retired
prior to Auguot 1993 SEPTEMBER 30, 1993, AND WHO DID NOT RECEIVE AN ADDITIONAL
RETIREMENT BENEFIT PURSUANT TO MISCELLANEOUS RESOLUTION #93165, "DEPARTMENT OF
PERSONNEL/RETIREMENT INCENTIVE PROGRAM, as detailed on the attached schedule,
EFFECTIVE OCTOBER 1, 1997.
BE IT FURTHER RESOLVED that the cost of this increase be paid from the
Retirement Fund AND THAT THE ANNUAL COST TO THE GENERAL FUND FOR THIS BENEFIT
INCREASE WILL NOT EXCEED $13308.65.
Moved by Palmer supported by Douglas to further amend the Fiscal Note to
agree with the new date of September 30, 1993.
A sufficient majority having voted therefor, the amendment carried.
Discussion followed.
Vote on resolution, as amended:
AYES: Coleman, Devine, Garfield, Huntoon, Jacobs, Kaczmar, Kingzett, Law,
McPherson, Millard, Moffitt, Obrecht, Palmer, Pernick, Powers, Wolf, Amos. (17)
NAYS: Dingeldey, Douglas, Jensen, Johnson, McCulloch, Schmid, Taub. (7)
A sufficient majority having voted therefor, the resolution, as amended,
was adopted.
I HEREBY E OREGOING RESOLUTION
Val --Y/7
a Patterson, County Exowtive Date
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 July 17, 1997 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 17th day caf July
LynniD. Allen, County Clerk