HomeMy WebLinkAboutR21-505151
RESOLUTION NO. R21-505
A RESOLUTION OF THE CITY COUNCIL OF THE CITY OF PLAINVIEW
TEXAS APPROVING THE FUNDING SOUNDNESS RESTORATION
PLAN FOR THE PLAINVIEW FIREMEN'S RELIEF AND RETIREMENT
FUND AS RECOMMENDED BY THE PLAINVIEW FIREMEN'S RELIEF
AND RETIREMENT FUND BOARD OF TRUSTEES.
WHEREAS, the City of Plainview, Texas is a home -rule municipal corporation and
political subdivision of the State of Texas which is authorized to operate, and does
operate, a fire department for the health, safety and welfare of its citizens; and
WHEREAS, the City of Plainview Fire Department, maintains the Plainview
Firemen's Relief & Retirement Fund ("Retirement Fund") for the benefit of the employees
and retirees of the City of Plainview Fire Department who qualify and participate in the
Retirement Fund; and
WHEREAS, the Retirement Fund is governed by the Board of Trustees for the
Plainview Firemen's Relief & Retirement Fund (the "Board of Trustees"); and
WHEREAS, the Retirement Fund qualifies for and is considered a public
retirement system and is subject to state law including Texas Government Code, Title 8,
Public Retirement Systems; and
WHEREAS, the Board of Trustees retained Retirement Horizons Inc. ("RHI"), an
independent consultant to provide certain actuarial services including and actuarial
valuation of the Retirement Fund as of December 31, 2019 ("Valuation Report"); and
WHEREAS, the Retirement Fund has experienced a deterioration in its actuarial
soundness over the last few valuation cycles and the Valuation Report found that the
unfunded actuarial liability of the Retirement Fund was $11.633 million (34.0% funded
status) as of December 31, 2019 and the current contribution policy (total 39.68% of
payroll) will amortize the unfunded actuarial liability over 79.7 years based on the 2019
valuation, both of which exceed the previous year's valuation; and
WHEREAS, the Texas Pension Review Board guidelines for actuarial soundness
require a contribution policy that will amortize the unfunded liability over a preferred period
of 10-25 years, not to exceed a maximum of 30 years; and
WHEREAS, due to the Texas Pension Review Board guidelines and applicable
state law, the Retirement Fund must reduce its amortization period to 30 years or less no
later than June 30, 2025; and
WHEREAS, in accordance with Texas Government Code § 802.2015, the Board
of Trustees and the City Council of the City of Plainview are required to formulate a
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funding soundness restoration plan if a public retirement system's actuarial valuation
shows that the system's amortization period exceeds certain thresholds; and
WHEREAS, in order to allow for greater efficiency and responsiveness in the
administration of the Retirement Fund, the City entered into a written Memorandum of
Understanding whereby the City acts as agent and Plan Administrator of the Retirement
Fund; and
WHEREAS, based on the Valuation Report, RHI has developed a funding
soundness restoration plan (the "Restoration Plan") that complies with Texas Government
Code § 802.2015 and the Texas Pension Review Board guidelines and has been
approved by the Board of Trustees for the Plainview Firemen's Relief & Retirement Fund
and is attached hereto as Exhibit "A"; and
WHEREAS, the Board of Trustees recommends to the City Council of the City of
Plainview that the City Council approve the Restoration Plan; and
WHEREAS, based on the Valuation Report and the recommendation of the Board
of Trustees and in order to comply with state law, the City Council believes it to be in the
best interest of the City and its citizens and the participants in the Retirement Fund, to
approve and adopt the Restoration Plan as outlined herein;
NOW THEREFORE, THE CITY COUNCIL OF THE CITY OF PLAINVIEW, TEXAS,
HEREBY RESOLVES, THAT:
1. Recitals Approved. The recitals outlined above are found to be true and correct
and are incorporated as if fully set forth herein.
2. Retirement Fund Restoration Plan Approved. The terms and conditions of the
Restoration Plan, attached hereto as Exhibit "A", are hereby approved.
3. City Manager Authority. The City Manager is authorized to act on behalf of the
City to further develop, administer, manage and execute all necessary documents in
accordance with or consistent with the Restoration Plan attached to this resolution.
Approved by the City Council this 12th day of January, 2021.
CI PVIEW, TEXAS
UA
Charles S�jans, Mayor
A ST:
lag .1
Belinda Hinojosa, City ec tary
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Exhibit "A"
Plainview Firemen's Relief and Retirement Fund
Funding Soundness Restoration Plan
Terms and Conditions
Proposed Changes Effective December 31 St, 2020
1. Additional City contributions of $500K for 2021, and then $250K per year for the next 3
years ($1.25 million in total)
2. Increase City contribution rate from 24.68% to 25.00% of payroll
3. City will make contributions for 36 active members even if the actual member count is
less than 36 members
4. Move to base pay for benefit calculations for members retirement, but member/City
contributions continue to be based on gross pay
5. New benefit formula:
a) 2.5% of Monthly Average Salary for 20 years and then 2.8% for the next 5 years
b) Maximum base formula at 25 years of 64%
c) Retain current longevity benefit after 20 years
d) Doesn't reduce benefit for those that are already retirement eligible
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