HomeMy WebLinkAboutResolutions - 2007.06.14 - 28450June 14, 2007
MISCELLANEOUS RESOLUTION # 07151
BY: Personnel Committee, Thomas F. Middleton, Chairperson
RE: HUMAN RESOURCES DEPARTMENT - DEFERRED DEFINED BENEFIT
RETIREMENT BUY-OUT 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 a number of vested, deferred retirements to
administer, including the provision of future health care, for persons no longer in the service
of the County; and
WHEREAS, the Michigan Attorney General, in 1991 Opinion Number 6697, page
116, confirms that the County may, without violating the State Constitutional protection of
contractual obligations, modify retirement benefits to current retirees and members if it
provides alternative benefits in their place that are equal to or greater than pension benefits
that would be limited or withdrawn; and
WHEREAS, it is permissible to amend the plan to offer deferred retirees the
opportunity to receive a "Lump-Sum" payment actuarially equivalent to the present value of
their accrued benefit; and
WHEREAS, deferred retirees will incur no tax consequence if a deferred retiree
elects to roll the Lump-Sum to another tax-qualified retirement plan or Individual Retirement
Account (IRA); and
WHEREAS, the law does not prohibit the County from requiring the deferred retirees
surrender other retirement benefits including future health care as a condition of receiving
the optional Lump-Sum buy-out; and
WHEREAS, any offer to buy-out deferred retirements would be voluntary and
optional to those eligible; and
WHEREAS, the approval of changes to the retirement plan requires an actuarial
calculation, in addition to authorization by the County Board of Commissioners.
NOW THEREFORE BE IT RESOLVED that the Oakland County Board of
Commissioners approves a Deferred Retirement Buy-Out Plan initiating an offer to buy-out
accrued, vested retirement benefits to members of the retirement system who have left the
service of Oakland County, deferring their retirement benefits.
Personnel Committee Vote:
Motion carried unanimously on a roll call vote with Douglas, Rogers and Coleman absent
BE IT FURTHER RESOLVED that buy-outs, effective September 1, 2007, be offered
in a Lump-Sum, thereby allowing the option of a rollover of same to another tax-qualified
retirement plan or Individual Retirement Account (IRA).
BE IT FURTHER RESOLVED that the buy-out of each particular deferred retiree be
contingent on the deferred retiree's signed waiver of rights to any and all other retirement
welfare benefits, including the right to future County funded health care.
BE IT FURTHER RESOLVED that the Board of Commissioners amend the Oakland
County Employee's Retirement System Resolution by adding:
SECTION 34.2a, Single Sum 2007 Special Payment to Vested Former members of
the Defined Benefit plan.
The Retirement Commission shall undertake the following with respect to vested
former Members:
a. As of June 30, 2007 determine who the vested former Members are;
b. Determine each such vested former Member's Pension as defined in
Section 20 of the Defined Benefit Plan of the Retirement System;
c. Determine the present value, as of August 31, 2007 of the lump-sum
actuarial equivalent accrued benefit of each such vested former
Member's Pension using all of the Retirement Commission's actuarial
assumptions in effect for funding purposes for the September 30, 2006
annual actuarial valuation;
d. Make the same determination in (c), except without the use of a
Disability factor used for funding purposes; and
e. Notify each such vested former Member in writing that they have an
irrevocable, one-time election continuing for no less than seven (7)
days nor more than sixty (60) 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 September 21, 2007 in lieu of any further Pension from
this System and specifically waiving any rights to benefits from the
Oakland County Retirees' Health Care Trust.
Mr. Chairperson, on behalf of the Personnel Committee, I move the adoption of the
foregoing resolution.
Personnel Corapaitte
FISCAL NOTE (MISC. #07151) June 14, 2007
BY: FINANCE COMMITTEE, MIKE ROGERS, CHAIRPERSON
IN RE: HUMAN RESOURCES DEPARTMENT - DEFERRED DEFINED BENEFIT RETIREMENT
BUYOUT
TO THE OAKLAND COUNTY BOARD OF COMMISSIONERS
Chairperson, Ladies and Gentlemen:
Pursuant to Rule XI-G of this Board, the Finance Committee has
reviewed the above referenced resolution and finds:
1. Resolution authorizes the offering of a lump sum payment,
effective September 1, 2007, to vested members of the
retirement system who have left the service of Oakland County
and deferred their retirement benefits.
2. In exchange for this lump sum payment, these "deferred
retirees" will sign a waiver of rights to any and all other
retirement welfare benefits, including the right to future
County funded health care.
3. The actual amount of each lump sum payment requires an
actuarial evaluation to determine the present value of the
deferred benefit as of August 31, 2007.
4. Funding for these lump sum payments will be drawn from the
assets of the Oakland County Public Employees' Retirement
System.
5. The economic impact of this offer will be realized in a
reduction in the future liabilities of the County's Public
Employees' Retirement System and the County's Voluntary
Employee Benefit Association (VEBA); this impact will be
calculated by the County's actuary after it is determined how
many of the deferred retirees accept the offer.
6. No budget amendment is required at this time.
FINANCE COMMITTEE
FINANCE COMMITTEE
Motion carried unanimously on a roll call vote.
a)_3/4 -7
Resolution #07151 June 14, 2007
Moved by Middleton supported by Suarez the resolution (with fiscal note attached) be adopted.
AYES: Gregory, Greimel, Hatchett, Jacobsen, KowaII, Long, Middleton, Nash, Potter, Potts,
Rogers, Scott, Spector, Suarez, Woodward, Zack, Bullard, Burns, Coulter, Crawford, Douglas,
Gershenson, Gingell, Gosselin. (24)
NAYS: None. (0)
A sufficient majority having voted in favor, the resolution (with fiscal note attached) was adopted.
I HEREBY APPROVE .HE FOREMIG, RESOLUTION
STATE OF MICHIGAN)
COUNTY OF OAKLAND)
I, Ruth Johnson, 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 June 14, 2007, 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 14th day of June, 2007.
Ruth Johnson, County Clerk