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CL- 1932 Work Session   Item #:   B.    
Work Session Meeting
Meeting Date: 08/09/2018  
Subject:    Employees' Retirement System
From: Sara Weller

COUNCIL ACTION
Work Session Meeting:     08/09/2018
SUMMARY
City of Danville employees are members of the Employees’ Retirement System (ERS), which is a defined benefit retirement system created exclusively for City employees. City Council’s adopted FY 2019 Budget includes funding to enhance the retirement benefit for Public Safety employees.  Changes to ERS require City Council to adopt an ordinance modifying Chapter 32 of City Code.
BACKGROUND
The Employees’ Retirement System (ERS) is a defined benefit retirement plan that began in 1946 for the purpose of providing retirement, disability, and death-in-service benefits to regular, full-time employees of the City of Danville. The provisions of Chapter 32 of the City Code and ordinances made by City Council govern the System.  Funding for the System comes from employer contributions paid by the City, and investment income.

 Each year, with the annual budget, City Council is provided recommended contribution rates from the Board of Trustees to adopt for the next fiscal year. Recommendations are made with a goal of maintaining ERS on a sound financial basis. ERS funds are separate from other City funds and are invested and administered solely in the interest of the members, retirees, and beneficiaries of ERS.  ERS covers two employee groups (1) General Employees and (2) Public Safety Employees (uniformed Police and Fire). The current operational provisions are the same for both groups of employees; however, the benefits are different. Public Safety employees have a higher retirement benefit from ERS because they do not participate in the Social Security System. 

At City Council’s request, a review of the Public Safety’s ERS benefit was completed and the decision made to enhance the retirement benefit effective September 1, 2018. Specifically, changes to the benefit include increasing the multiplier used to calculate Public Safety retirement from 2% to 2.2%, and changing the age and service requirements for early-unreduced retirement benefits from age 55 with 30 years of creditable service to age 50 with 25 years of creditable service. These changes, along with other Code edits, are included in the attachment for review.


 
RECOMMENDATION
It is recommended that City Council adopt the attached Ordinance modifying Chapter 32 of City Code.
 

Attachments
Ordinance
Retirement Code

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