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City manager outlines pension benefit changes to boost competitiveness; trustees accept actuarial costs but decline policy endorsement
Summary
City Manager Kevin Sweet presented a package of pension design options (scenario 7 combines four changes including a larger multiplier, more pensionable overtime and a DROP); trustees accepted the special actuarial report showing projected liabilities but emphasized the commission, not the trustees, must adopt design changes.
City Manager Kevin Sweet presented proposed pension design scenarios to the Winter Springs Board of Trustees on May 14 aimed at helping the city remain competitive for recruitment and retention. Sweet described an administrator recommendation (scenario 7) that combines four changes: increasing the maximum accrued benefit toward a 99% multiplier with additional service, expanding pensionable overtime to 300 hours per year, allowing unreduced retirement after 30 years of service regardless of age in some cases, and creating a deferred retirement option program (DROP) with up to three years of participation and a fixed 4% annual credit.
"We're now just about back probably in the middle of the road where we're at with starting pay and salary," Sweet said, explaining the proposals were developed after consultation with law enforcement leadership and staff and comparing benefits to nearby jurisdictions.
Trustees asked detailed questions about whether benefits would apply prospectively (Sweet said changes would move forward only, not retroactively), how the overtime calculation would change, and the additional liability associated with each option. The actuary pointed trustees to the scenario table in the packet (page 18) showing the plan's unfunded liability rising under the combined scenario (example figures in the packet show liability increasing from about $7.3 million under the current plan to about $8.7 million under the combined scenario).
Trustee Michael Blake cautioned the board against taking a policy position: "This is truly a policy issue, and we are not a policy board," he said, stressing that design decisions belong to the city commission. Trustees voted to accept the special actuarial report and recorded that the board could manage the trust under any design the commission might choose; they did not formally endorse a specific plan design.
Next steps: the city manager indicated he would seek commission consideration in June and the actuarial report will be filed so the commission can consider the fiscal impacts alongside budget planning.
