City of Coral Gables - File #: 15-3634

• File #: 15-3634
• Version: 2
• Name: Pension Ordinance Amendment
• Type: Ordinance
• Status: Adopted
• File created: 1/14/2015
• In control: City Commission
• On agenda: 2/10/2015
• Final action: 2/10/2015
• Enactment date: 2/10/2015
• Enactment #: 2015-03
• Title: An Ordinance amending Chapter 50 of the “Code of The City of Coral Gables,” entitled “Pensions,” amending Section 50-230, Normal Retirement Income; and providing for repealer provision, severability clause, codification, and providing for an effective date. (This Ordinance does not modify pension benefits. It only serves to clarify the existing language to make it consistent with Florida Statutes, City Attorney interpretation, and current practices.) (Passed on First Reading January 28, 2015).

Date	Ver.	Action By	Action	Result
2/10/2015	2	City Commission	adopted by Ordinance Number	Pass
1/28/2015	1	City Commission	approved as an Ordinance on First Reading	Pass

Title
An Ordinance amending Chapter 50 of the “Code of The City of Coral Gables,” entitled “Pensions,” amending Section 50-230, Normal Retirement Income; and providing for repealer provision, severability clause, codification, and providing for an effective date. (This Ordinance does not modify pension benefits. It only serves to clarify the existing language to make it consistent with Florida Statutes, City Attorney interpretation, and current practices.) (Passed on First Reading January 28, 2015).
Body
When the pension COLA was originally enacted in 1989, an assumption was made that the COLA would be paid when there were investment gains in excess of 10% and cumulative actuarial gains in the pension fund sufficient to fund the COLA. This intent is demonstrated by the fact that no provision was made to pre-fund the COLA through increased City contributions at the time it was enacted, or any time since. This Ordinance serves to clarify the existing language to make it consistent with Florida Statutes, City Attorney interpretation, and current practices.

When the pension COLA was originally enacted, the actuarial impact statement addressing the plan changes did not treat the pension COLA as an additional cost that required increased contributions. It was assumed that the COLA would be paid from excess funds created in addition to what was needed to meet then current contribution requirements, so no advance funding was required. Implicit in this assumption is that future contributions would not increase based on diverting a portion of asset returns for COLA. But if contributions had previously increased due to asset shortfalls, and all asset returns were not used to replenish those shortfalls before any funds were diverted for COLA, then the impact statement would have identified this and would have estimated a contribution increase (advance funded) for this treatment. Funds could only be removed from the excess earnings when there were investment gains i...