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Palatka board to consider partial lump‑sum retirement option; staff to draft ordinance
Summary
Board members discussed drafting an ordinance to allow retirees to take a partial lump-sum payment (5%, 10%, 15% or up to 20%) with the remainder paid as monthly benefits. Staff said the change should be actuarially no-cost but could require additional liquidity for lump-sum payouts and must be approved by city council.
A staff member told the Palatka Pension Board that two other boards are moving forward with a proposed partial lump‑sum retirement option and offered to prepare a draft ordinance for the board to consider.
The staff presenter said the proposal would let a retiring member elect to take 5%, 10%, 15% or 20% of their benefit as a lump sum at retirement, with the remainder continuing as monthly payments. “This would give them that option,” the presenter said, adding the plan would cap the lump sum at 20% so members do not take too large a portion of lifetime benefits.
The presenter said the change should be “a no cost item to the plan,” subject to actuarial confirmation, and that the drafter will provide a letter confirming any cost impact. A consultant on the call reiterated that the principal actuarial concern would be liquidity—if multiple members took a lump sum at once the plan might need additional cash on hand temporarily—but said the change does not create a material actuarial liability if contributions are made as scheduled.
The presenter noted that any change to the plan document must be approved by the City Council. A board member moved that the board participate in the drafting work and the motion was seconded; the transcript records the motion and second but does not show a final roll‑call vote in the excerpt provided.
Board members requested that, if the board moves forward, staff circulate the draft ordinance and an actuarial letter describing whether the option would be cost neutral and what liquidity measures (if any) would be required. The presenter said she would draft the ordinance and send it to the consultant for a cost letter.
Members also noted the origin of the proposal: the presenter said the request initially came from the Fire Board. The board asked staff to return a draft ordinance and the consultant’s cost statement at a future meeting for formal consideration and any required city‑council action.
