City of Palm Coast Volunteer Firefighter’s Pension

Plan Share Plan Project

Finance DepartmentChristopher M. Quinn, Finance Director, MACC, CPA, CFE, CGFO, CGMAGinger Norberg, Accounting Technician IIDecember 9 th, 2014

• History

• Current Plan Status

• Benefit Enhancement Project

• Next Steps

Presentation Outline

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 Council• 2 appointed by Volunteers• 1 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

History

Points Issues for the Following Activities• Response to Paged Calls (25%)• Attendance at Drills (50%)• Attend Business Meetings (8 Minimum)• Position, Activity, Etc. points (50)

HistoryLength of Service Award Pension Program (LOSAP)

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

History

HistoryPremium Tax ReceiptsReceived During Fiscal Year Amount Increase from Previous Year

2003 14,328 -

2004 62,130 333.6%

2005 96,546 55.4%

2006 128,816 33.4%

2007 242,231 88.0%

2008 380,757 57.2%

2009 499,181 31.1%

2010 339,246 -32.0%

2011 359,373 5.9%

2012 377,962 5.2%

2013 364,571 -3.54%

2014 381,967 4.77

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)

Current Plan StatusPlan Funding

2008 2009 2010 2011 2012 2013$0

$500,000

$1,000,000

$1,500,000

$2,000,000

$2,500,000

$3,000,000

$3,500,000

Assets

Pension Liability

Current Plan StatusFunded Ratio

2008 2009 2010 2011 2012 2013106%

108%

110%

112%

114%

116%

118%

120%

122%

114%

111%

112%

119%

121% 121%

Current Plan StatusRequired Contributions

2008 2009 2010 2011 2012 2013$0

$20,000

$40,000

$60,000

$80,000

$100,000

$120,000

$140,000

$160,000

Required Contribution

State Con-tribution

Current Plan StatusReserve for Benefit Improvements

2008 2009 2010 2011 2012 2013$0

$200,000

$400,000

$600,000

$800,000

$1,000,000

$1,200,000

$1,400,000

Goals:• No increased potential liability to the City • Comply with IRS Regulations• Comply with State Pension Statutes• Take Advantage of benefit improvement reserve

Benefit Enhancement Project

Share Plan Concept• Provide 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 participate• Mitigate accumulation of benefit improvement

reserve• No effect on potential City liability

Benefit Enhancement Project

Volunteer Firefighter Pension Plan Ordinance• Update to include share plan component• Update for IRS compliance

Submit to IRS for Private Letter Ruling IRS Approval Received 11/7/14

• Update for changes in State Statutes

Benefit Enhancement Project

Apply to IRS for Private Letter Ruling• 9 to 12 month review period

Present revised Ordinance to City Council for consideration• January 2015

Next Steps

Questions?