Title
Resolution of the City Commission of the City of Coral Gables, Florida, relating to the Retirement System for City employees; reviewing the Retirement Board’s decision to grant a cost of living increase for retirees effective January 1, 2013; finding the Retirement Board’s action inconsistent with Section 112.61, Florida Statutes; modifying the Retirement Board’s action; providing for full force and effectiveness; providing for repeal of conflicting Resolutions; and providing an effective date.
Body
Section 112.61, Florida Statutes establishes minimum standards for the operation and funding of public employee retirement systems. The state statute applies to all retirement plans supported in whole or part by public funds, including local government retirement plans like the Coral Gables Retirement Plan for City Employees. Section 112.61 requires that public retirement systems be managed, administered, operated and funded in such a manner as to maximize the protection of public employee retirement benefits, such that the pension liabilities attributable to the benefits promised public employees be fairly, orderly, and equitably funded by current, as well as future, taxpayers. Specifically, the statute prohibits the use any procedure, methodology, or assumptions which effectively transfer to future taxpayers any portion of the costs which may reasonably have been expected to be paid by current taxpayers.
Section 112.61 expressly states that “actuarial experience may only be used to fund additional benefits when the present value of the benefits does not exceed the net actuarial experience accumulated from all sources of gains and losses.” In essence, this means a provision for funding retirement benefits must be made at the time the benefits are adopted, and actuarial experience may only be used to fund additional benefits when “the net actuarial experience accumulated from all sources of gains and losses” is sufficient to fund the additional benefit.
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