Council adopts new general-employee retirement plan and creates trustee board; one-time reserve funding approved for transition costs

The Sebastian City Council adopted Ordinance O‑25‑13, establishing a new defined-benefit retirement plan and trust for general employees, and Ordinance O‑25‑14, creating the five-member board of trustees to administer the plan.

Staff said the plan will start Oct. 1, 2025, cover full-time general employees and include an opt‑out provision for workers within five years of retirement. Employee contributions are voluntary (0–10%), vesting is five years, and the plan provides standard benefit options (life certain, joint survivorship). The plan adoption agreement will enroll the city in the Florida Municipal Pension Trust Fund.

Staff and the actuary identified transition costs related to employees previously in the city’s CWA plan who had not vested. The actuarial calculation showed the value of lost benefits for unvested CWA employees at $158,005.61; the amount applied to purchase credited service for those electing to buy service was estimated at $115,003.31; and the opt‑out 401(a) lump-sum option for employees choosing not to participate was estimated at $43,002.30. Staff presented plan cost estimates of roughly $1,016,009 in employer contributions (budget line) — an increase over the current budget of about $293,637 — and said including the buyback for unvested CWA employees raises the one‑time increase to about $452,198. City leaders said those one-time transition costs will be covered from reserves rather than recurring operating revenue.

Council also approved an ordinance creating the plan’s board of trustees: five members with staggered initial terms, three resident appointees by council and two elected plan participants.

Councilmembers spoke in favor of protecting employees from possible instability in the now-dissolved CWA plan; staff and legal counsel said the change safeguards active employees and provides additional options such as a buyback and 401(a) payment for those who do not vest. The council voted to adopt both ordinances.