2016.05.02 CC Packet - Laserfiche WebLink

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' = 14669 Fitxgereltl Hu Avenue No gorth O Hugo,556 (6 Phone (651) 762-6360 U Fox(651)426-2859 Memorandum TO: Honorable Mayor Tom Weidt and Members of the City Council FROM: Ron Otkin, Finance Director SUBJECT: Firefighter's Relief Association Pension Increase DATE: For the City Council Meeting of May 2, 2016 DESIRED COUNCIL ACTION Motion to Ratify Board of Trustees Request for $100 Increase in Lump -Sum Pension OPTIMUM PENSION BENEFIT LEVEL On April 2, 2012, the City Council adopted a Resolution Adopting Firefighter Relief Pension Fiscal Policy. The policy sets the optimum pension benefit level as the average lump -sum benefit provided by relief associations that receive state fire aid within 10% of the amount received by the Hugo Firefighter's Relief Association, as last reported by the Office of the State Auditor. According to the Office of the State Auditor, nine other lump -sum relief associations received state fire aid in 2015 within 10% of the amount received by Hugo. These associations are located in: Becker, Ham Lake, Isami, Little Falls, Mahtomedi, New Prague, Park Rapids, Vadnais Heights, and Wacoma. Staff feels that this is a very good sampling of associations: Four are in the 7 -county metro area and three are in economic development regions that border the 7 -county metro area. Using data from these nine associations, we can establish the optimum pension benefit level at $3,367 per year of service. The Board of Trustees voted to increase their lump -sum pension benefit from $3,200 per year of service to $3,300 and is asking the City Council to ratify this increase. FINANCIAL STATISTICS The Finance Department has reviewed the financial status of the relief association and finds that the recommended increase will result in the following: Total Pension Assets: $1,246,578 - as of 03/31/16 Total Pension Liability: $1,025,974 - after increase Surplus: $ 220,604 - 21.5% of liability