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Department Approval <br />R4&SF-jNqL+E <br />REQUEST FOR COUNCIL ACTION <br />Date.- June 13,, 2011 <br />Item No..- 13. d <br />Acting City Manager Approval <br />Item Description.- Request to provide PERA pension benefit to part-time firefighters <br />I BACKGROUND <br />2 The Roseville Fire Department first organized into a Firefighter's Relief Association in <br />3 September of 194�7. <br />4 <br />5 The relief association established its benefit program to be a defined benefit plan, which allows <br />6 for a specific retirement amount based off months and years of service. The employer bears the <br />"7 full investment risk of a plan of this nature. <br />9 The current benefit level is $,30 per month of service, with the option of lump sum payout or <br />I ('_) monthly pension for life and the life of any spouse upon completion of twenty years of service <br />"I'll and age 50. <br />12 <br />13 The fund balance of the Relief Association as of May 2011 was $,8,058,871. The funding for the <br />14 pension plan is made up of two sources.- The first one comes from the State of Minnesota in the <br />I w form of State Aid. The second comes from city contributions which are necessary when the fund <br />16 falls below 100% funding level. <br />I ��7 <br />18 Over the past six years the city has contributed an average of $,129,689 over and above the State <br />19 Aid funding. In 2011 the city is anticipating contributing $,206,000 above the State Aid funding. <br />2o The amount the city is required to contribute to the fund is dependent on several factors.- <br />2 1 including the number of retired firefighters receiving pension, the investment market of the fund, <br />22 and the number of active firefighters on the fire department. <br />23 <br />24 While the number of retired firefighters receiving pensions has been consistent,, the other two <br />2 ` factors have seen many fluctuations resulting in many peaks and few valleys necessary to <br />26 stabilize the fund. <br />27 <br />28 Therefore,, the fire department would like to request that all new part-time firefighters hired as of <br />29 June 13, 2011 be offered an alternative to the current Relief Association pension plan. The city <br />3 ('_) would begin offering Police & Fire PEI A as the pension benefit to all future part-time <br />3 1 firefighters. This change would allow the fire department the ability to better budget pension <br />32 Costs,, and over time reduce the cities exposure to the firefighter pension fund. <br />34 <br />Page I of 2 <br />