HomeMy WebLinkAboutA001 - Council Action Form dated May 6, 1986 ITEM #
DATE: May 6, 1986
CITY OF AMES, IOWA
COUNCIL ACTION FORM
SUBJECT: Ordinance change to provide for a participation of the costs of the
Utility Retirement System.
BACKGROUND:
For several years the employee contribution to the Utility Retirement System
was 5% of covered payroll and the City contribution was 7%. Effective July 1,
1982, the rates were adjusted to 5.55% and 7.55% respectively to fund a change
which reduced the penalty for early retirement based on a survey with a majority of
the employees agreeing to share the cost of the benefit increase on a 50-50 basis
with the City. Effective July 1, 1984, based on a survey with a majority vote for
a benefit to allow retirement with no penalty at age 55 with 30 years of service,
the percent was increased to 6.93% (employee) and 9.19% (City) , or a ratio of 43%
cost by the employees and 57% cost by the City.
Section 28.46 has shown the percent of the employee earnings, however, Section
28.47 has indicated the contributions by the City are to be equal to the normal
cost to provide benefits not provided by employee contributions . The City picks up
the difference.
The change proposed would eliminate the need for an ordinance change each time
the actuarial study calculates the percent of covered payroll to maintain the
system. The proposed ordinance would provide for the participation to be shared
effective with most recent benefit changes, or, 43% by the employee and 57% by the
City.
ALTERNATIVES:
1. Adopt the ordinance as recommended by the Utility Retirement Board to fix the
percent of contributions by employee and City.
2. Leave present ordinance so that the percent of employee contribution is
indicated in Section 28.46 and the City assumes the amount necessary to fund the
system over and above the employee contribution.
MANAGER 'S RECOMMENDED ACTION :
It is recommended by the City Manager that the Council adopt Alternative #1 to
adopt the ordinance to fix the participation at 43% for employees and at 57% for
City for the cost of the system.
COUNCIL ACTION:
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