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?