Title
General Employees' Pension Plan and Disability Plan Actuarial Valuation Reports (B)
Explanation
The City of Gainesville receives actuarial valuation reports on its General Employees' Pension Plan and its Disability Plan every two years. The actuarial valuation is the process by which the fiscal status of the Plan is measured on a recurring basis. The valuation determines the 'price' of the plan in the form of contribution rates paid by both the plan sponsor and its members. This price is quantified in terms of percentage of covered payroll. These valuations establish contribution rates effective October 1, 1999.
Related to the General Employees' Pension Plan, in August of 1999 the affected unions ratified an agreement which provided that the employee contribution rate would remain constant at 4.62% until the current bargaining process is completed , or until September 30, 2000, whichever is earlier.
Fiscal Note
For the General Employees' Pension Plan the valuation requires an increase in the employer contribution rate from 2.90% to 3.22%. In contrast, the valuation for the Disability Plan requires a reduction in the employer rate from 1.44% to 1.13%. Taking into account the fact that the covered payroll base is much larger for the Disability Plan than the General Employees' Pension Plan, these changes actually result in slightly reduced employer costs.
Recommendation
The City Commission: 1) hear a presentation from Actuarial Concepts; 2)accept the General Employees' Pension Plan and the Disability Plan valuations as of September 30, 1998; 3) approve implementation of the recommended employer contribution rates retroactive to October 1, 1999, and; 4) suspend implementation of the recommended employee contribution rate for the General Employees' Pension Plan until the current bargaining process is completed or until September 30, 2000, whichever is earlier.