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Council reviews switch to city-run pension trust; actuarial shows higher near-term cost
Summary
City staff presented a plan at the budget workshop to move non‑police employees from the CWA contract to a city‑sponsored pension trust administered through the Florida League of Cities; an actuarial valuation estimated an employer contribution of 13.71% of payroll, up from the 9% currently budgeted, increasing general‑fund costs roughly $278,000 next year.
City staff presented a plan at the budget workshop to move non‑police employees from the current contract arrangement to a city‑sponsored pension trust administered through the Florida League of Cities and to close the old CWA plan. An actuarial evaluation run for a proposed benefit structure estimated an employer contribution rate of 13.71% of payroll, up from the 9% currently budgeted. Under staff assumptions that increase would raise general‑fund costs by about $278,000 next year and the total cost across all funds by about $378,000.
City Manager Chris DeBenton and the city’s finance team described the study and the steps staff proposed if the council decides to proceed: (1) direct staff to complete a formal withdrawal process from the CWA plan; (2) ask the actuarial firm to finalize plan documents and a formal valuation; (3) survey employees on likely contribution choices; and (4) establish a pension board and ordinance language for council consideration. Chief Financial Officer Mister Stewart and Finance staff said the city could avoid an immediate recurring budget shock by making an advanced, one‑time contribution to the new plan this fiscal year. That advance would sit in the pension trust and reduce future annual contribution volatility.
The actuary’s cost estimate in the workshop package was built on a set of assumptions the council can change, staff said. Those assumptions included a 3‑year final average pay formula, a 5‑year vesting period, a normal retirement age of 60 (or 55 with 25 years of service), no automatic COLA, and a flexible employee contribution schedule. Under the draft structure employees could choose a contribution level (0% up to 10%) with a corresponding multiplier (“factor”) that determines benefit accrual; staff said those choices would be finalized in the plan document and would be carefully explained in enrollment sessions.
Council members asked about the timing and budget impacts. Finance staff said the actuarial valuation date used (Oct. 1) sets employer contributions one fiscal year later, which is standard practice. City and finance staff recommended setting an enrollment/selection date (for employees) and bringing final ordinances and plan documents back to council for formal adoption. Council members supported staff moving forward to develop documents, perform employee outreach, and to return with firm numbers and an ordinance before any change is final.
No ordinance or formal vote was taken at the workshop. Staff said they will return to council with a final plan, enrollment materials, and the ordinance language after additional actuarial work, legal review, and employee education sessions.
