CR 2004-137 Changing The Benefit Amount For the Hopkins Fire Department Relief Association
C\IY OF
-
September 7, 2004 HOPKINs Council Report 2004-137
.
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
2004-074 chanqinq the benefit amount for the Hopkins Fire Department Relief
Association.
This will lower the retirement benefit from $5,500 to $5,200 per year of service
temporally to bring the Fire Department Relief Association in compliance with the
maximum benefit allowed by State Law.
Overview
Few investments have done well over the last few years. The Hopkins Fire Department
Relief Association lost money in 2001 and 2002. Surpluses in the fund completely
covered these loses. The fund was back on track earning a good profit in 2003.
Although the fund is still 1 00% funded at the current benefit level, those bad years
reduced the size of the surplus. 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 as well as our estimated fund revenues
. for the previous three years. A combination of the surplus being reduced and a
conservative estimate of 2003 fund revenues has put our benefit amount for 2004 over
the limit imposed by State law.
Reducing the benefit amount for 2004 from $5,500 to $5,200 per year of service gives
us a substantial surplus that will allow us to restore and possibly even increase the
benefit amount in 2005.
Primary Issues to Consider
o Will this reduction hurt any Fire Department members who will retire in 2004? No.
We will not have any retirements until early in 2005.
0 Will the benefit be able to be restored in 2005? Yes. The numbers used for the
2005 Maximum Worksheet are known and show an allowed maximum benefit of
$5,900.
SupportinQ Information
o Resolution No 2004-074
o 2004 Maximum Benefit Worksheet
o 2005 Maximum Benefit Worksheet (draft)
. :::r-~~. W~ ~-m-
James Williams III, HFD Relief President
e City of Hopkins
Hennepin County, Minnesota
RESOLUTION NO. 2004-074
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 $5,500 to $5,200 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 cannot maintain
the existing benefit amount for 2004 without additional City contributions; and
WHEREAS, the benefit amount will be restored to at least the pervious level early in
2005;
. 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 7th day of September, 2004.
By:
Eugene 1. Maxwell, Mayor
ATTEST:
Teny Obennaier, City Clerk
.
2 00 cj Maximum Benefit Worksheet
.1. Hopkins Fire Relief Association
Indicate your plan type here: I Lump Sum I
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 ) I DJ
(From RF-03) (From RF-03) (Se-03 or Actuarial) (From RF 03)
2003 79,403 30,766 37 2,978
(From RF-02) (From RF-02) (SC -02 or Actuarial) (From RF 02)
2002 65,013 29,870 2,929 37 2,644
I From RF-O I) (From RF-Ol) (SC-OI or ActUllrial) (From RF-Ol)
2001 56,885 29,000 21,923 38 2,837
* If deficit for the year, leave blank
Average available financing per active member for the most recent 3-year period: I 2,820 I
. (sum of column E divided by 3) ] 5,200 I
Maximum Lump Sum Benefit Level under Minn. Stat. S 424A.02, subd. 3
Maximum Monthly Benefit Level under Minn. Stat. g 424A.02, subd. 3 I N/A I
______________________._________._________.._~.____.____________.__._____________________________________w______________________.P_________.
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. S 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 55]03_ Fax: (651) 282-5298 Phone: (651) 282-6110
:;2. 00 5 Maximum Benefit Worksheet
.1. Hopkins Fire Relief Association
Indicate your plan type here: I Lump Sum I
2. Enter data in columns A, B, C and 0 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 ) I D]
(From RF-03) (From RF-03) (SC -lJ3 or Actuarial) (From RF-03)
200* 79,403 3 1 ,600 34,464 37 3,932
(From RF-02) (From RF 0:') I SC -02 or Actuarial) (From RF-02)
200~ 79,403 30,766 37 2,978
(From RF-Ol) (From RF 01) (SC -01 or Actuarial) (From RF-Ol)
200L 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: I 3,185 I
. (sum of column E dividcd by 3) I I
Maximum Lump Sum Benefit Level under Minn. Stat. S 424A.02, subd. 3 5,900
Maxlmum Monthly Benefit Level under Minn. Stat. S 424A.02, subd. 3 I N/A I
___~w__...~__________________.~_._.~__________._______~--._------------.------_.-.--.~-------.--.-------..--.--------.--.-------.-.~--------
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. S 424A.02, subd. 3, and certified to the governing
body of the applicable qualified munlcipality.
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