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Lino Lakes, Minnesota Fire Pension Impacts Page 5 Example 3: A CFD member with 12 years of service. If this firefighter transfers to Lino Lakes, he or she would be vested in the CFD plan and eligible for $36,720 plus interest earnings up to 5.0% during the period of deferment for those years of service. In addition, the firefighter would have 8 years of service with Lino Lakes, which would make him or her eligible for $20,800 from an SVFRP plan for a total of $57,520 (plus investment earnings noted above.) Firefighter with 12 Yrs of Svc $ 100,000 $80,000 $60,000 $40,000 $20,000 $- As before, if the firefighter remained with CFD, the 20 -year pension amount would be $90,000. Stay with CFD Move to LLFD Move to LLFD (SVFRP) (Relief Assn) ■ CFD Pension ■ LLFD Pension In conclusion, at the $5,000 lump -sum benefit level, a new recruit or a CFD firefighter with one year of service or less is projected to receive a higher benefit upon retirement if they join the Lino Lakes Fire Department. This would also be the case for a CFD firefighter with more than 20 years of service, because they would be fully vested in the CFD plan and then could move to the Lino Lakes Fire Department and earn a higher lump -sum benefit for any remaining years of service (assuming CFD maintains a lower lump -sum benefit amount). For any CFD firefighter with 2-19 years of service, a move to the Lino Lakes Fire Department could mean they earn less than the $90,000 lump -sum benefit they would receive if they stayed with CFD. The above examples are intended for illustrative financial purposes only. Other considerations, such as geographic location of recruits may apply. There are numerous financial scenarios, and each individual firefighter's situation and years of service will be different. Springsted will assist any of the individual firefighters with questions related to the amount of the lump -sum payouts based on their specific situation when more items are defined. In addition to the pension payments, there are incentives for training recommended separately by staff. Initial Funding of a Pension Plan In our previous memo, we used the Maximum Benefit Worksheet to calculate that without State Fire Aid in year one, the City would need to contribute approximately $292,000 to offer a $4,500 lump -sum pension immediately upon creation. This amount would increase to approximately $325,000 if the City were to offer a $5,000 lump -sum pension amount immediately upon creation. The City requested a cost analysis to join the SVFRP at a $4,500 benefit level and a $5,000 lump -sum benefit level. Depending upon the date of the first City contribution (1/1/15 or 1/1/16), the cost would range from approximately