History Current Plan Status Benefit Enhancement Project

Finance DepartmentChristopher M. Quinn, Finance Director, MACC, CPA, CFE, CGFO, CGMAGinger Norberg, Accounti ng Technician IISeptember 10, 2013

City of Palm Coast Volunteer Firefighter’s pension plan share plan project

• History

• Current Plan Status

• Benefit Enhancement Project

History

• July 2, 2002 City Council Levies Property Insurance Premium Tax of 1.85% on Insurance Companies, Ordinance Number 2002-15– State restricted for funding of pension benefits

for Firefighters

History

• February 15, 2005 City Council established City of Palm Coast Volunteer Firefighters Pension Plan (Defined Benefit Plan), Ordinance 2005-08– Established Board of Trustees (5)

2 appointed by Council2 appointed by Volunteers1 appointed by other four

History

• Ordinance 2005-08 (Continued)– Established Retirement Qualifications - LOSAP

(Length of Service Award Pension Program)– Benefit Amount - $35 per year of credited

service– Establish Pension Eligibility

LENGTH OF SERVICE AWARD PENSION PROGRAM (LOSAP)

• POINTS ISSUED FOR THE FOLLOWING ACTIVITIESResponse to Paged Calls (25%)Attendance at Drills (50%)Attend Business Meetings (8 Minimum)Position, Activity, Etc. points (50)

History

• March 3, 2009 City Council revised the City of Palm Coast Volunteer Firefighters Pension Plan, Ordinance 2009-04– Increased benefit amount from $35.00 to $50.00

per year of credited service.

History

• October 18, 2011 City Council revised the City of Palm Coast Volunteer Firefighters Pension Plan, Ordinance 2011-18– Increased benefit amount from $50.00 to $65.00

per year of credited service

Received During Fiscal Year

Amount Increase from Previous Year

2003 14,328.55 -

2004 62,129.98 333.6%

2005 96,546.34 55.4%

2006 128,816.42 33.4%

2007 242,231.00 88.0%

2008 380,757.00 57.2%

2009 499,181.00 31.1%

2010 339,246.90 -32.0%

2011 359,373.51 5.9%

2012 377,962.48 5.2%

2013 *236,585.58 *

HISTORY OF PREMIUM TAX RECEIPTS

*partial payment received for FY 2013

Current Plan Status

Annual Amount from State Tax Collections

($350,000-$400,000)

Current Benefits($144,000)

Reserve for Benefit Improvements

($206,000-$256,000)

Plan Funding Status

Funded Ratio

Required Contributions

Reserve for Benefit Improvements

Benefit Enhancement Project

• Goals

No increased potential liability to the City Comply with IRS RegulationsComply with State Pension StatutesTake Advantage of benefit improvement reserve

Benefit Enhancement Project

• Share Plan ConceptProvide additional amount above current defined

benefit plan ($65.00 per month)Recommendation annually to City Council by

Pension Board to distribute a portion of the benefit enhancement reserve (if any)

Both current volunteers and retirees participateMitigate accumulation of benefit improvement

reserveNo effect on potential City liability

Benefit Enhancement Project

• Volunteer Firefighter Pension Plan Ordinance

Update to include share plan componentUpdate for IRS compliance

Submit to IRS for Private Letter RulingUpdate for changes in State statutes

Next Steps

• Apply to IRS for Private Letter Ruling– 9 to 12 month review period

• Present revised Ordinance to City Council for consideration once Private Letter Ruling received

Questions?