CR 05-011 Relief Assoc Benefit
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C\IY OF
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January 7, 2005
HOPKINS
Council Report 2005-011
Changing the Benefit amount for the Hopkins Fire Department Relief Association
Proposed Action
Staff recommends approval of the following motion: Move to adopt Resolution No
2005-006 chanqinq the benefit amount for the Hopkins Fire Department Relief
Association.
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This will raise the retirement benefit from $5,200 to $6,000 per year of service for the
Hopkins Fire Department Relief Association.
Overview
The Hopkins Fire Department Relief Association lost money in 2001 and 2002 which
caused us to temporally lower the pension amount last year. The fund was back on
track earning a good profit in 2003 and 2004.
At this new benefit amount the fund is still 100% funded with a surplus adequate to
weather any bad years in the future. This surplus amount is part of the formula used by
the State Auditors office to determine what the maximum benefit amount can be. The
formula also includes actual cash contributions for the previous three years. Using this
formula we could raise the pension for 2005 to as much as $6,300 per year of service.
Primary Issues to Co'nsider
o Will the benefit have to be reduced again, like in 2004, because of State funding
requirements? No. We have projected to 2007 with mostly known numbers on
the States Maximum Benefit Worksheet. The benefit amount could be increased
to as much as $6,300 now or up to $7,200 in 2007
o Will the City be responsible to provide additional funding. No. The fund is solid
and will continue to have a healthy surplus. Also we have agreed to lower the
pension before ever requesting additional funds from the City. In exchange the
City, continues to provide budgeted funding to the pension and allows the Fire
Department to determine the pension amount.
Supporting Information
o Resolution No 2005-006
o 2005 Maximum Benefit Worksheet (draft)
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James Williams III, HFD Relief President
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City of Hopkins
Hennepin County, Minnesota
RESOLUTION NO. 2005-006
Changing the Benefit amount for the Hopkins Fire Department Relief Association
WHEREAS, the City of Hopkins Fire Department Relief Association has requested the
benefit amount be changed from $5,200 to $6,000 per year of service; and
WHEREAS, the City of Hopkins provides the Relief Association with a set amount of
funding each year and has agreed to allow the Relief Association to determine the benefit amount
as long as no additional City funds are requested; and
WHEREAS", according to State of Minnesota law the Relief Association can maintain the
new benefit amount without additional City contributions;
NOW THEREFORE, BE IT RESOLVED, by the City Council of the City of Hopkins,
Minnesota, that we hereby change the Hopkins Fire Department Relief Association benefit
amount to $5,200 per year of service.
Adopted by the City Council of the City of Hopkins this 1st day of Feburuay, 2005.
By:
Eugene J. Maxwell, Mayor
, ATTEST:
Teny Obermaier, City Clerk
LOOS-
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Maximum Benefit Worksheet
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1. Indicate your plan type here:
Hopkins Fire Relief Association
Lump Sum
2. Enter data in columns A, B, C and D for each year requested.
A B C D E
---------------------- --------------------- --------------------- --------------------- ---------------------
State Fire Aid Active Members Per Year
(Received or Municipal 10% of in Relief Average
Receivable) Contribution Surplus * Association [( A + B + C) / D]
(From RF-03) (From RF-03) (SC-03 or Actuarial) (From RF-03)
200#r 101,852 31,535 34,464 36 4,663
(From RF-02) (From RF-02) (SC-02 or Actuarial) . (From RF-02)
200'i 79,403 30,766 37 2,978
(From RF-Ol) (From RF-OI) (SC-Ol or Actuarial) (From RF-Ol)
20012-. 65,013 29,870 2,929 37 2,644
* If deficit for the year, leave blank.
Average available financing per active member for the most recent 3-year period:
(sum of column E divided by 3)
Maximum Lump Sum Benefit Level under Minn. Stat. ~ 424A.02, subd. 3
I 3,428
I 6,300
I N/A
Maximum Monthly Benefit Level under Minn. Stat. ~ 424A.02, subd. 3
Relief Officer Certification
On or before August 1, the average amount of available financing per active member for the most recent three-
year period was calculated in accordance with Minn. Stat. ~ 424A.02, subd. 3, and certified to the governing
body of the applicable qualified municipality.
Signature of Relief Association Officer
Date
Print Name and Title
Please retain a copy of this form and return the signed original to: State Auditor's Office, Pension Division, 525 Park Street,
Suite 500, Saint Paul,MN 55103. Fax: (651) 282-5298 Phone: (651) 282-6110