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<br />AI ~\.( <br />( if <br />fl~ River <br /> <br />AGENDA ITEM 8.5. <br /> <br /> <br />MEMORANDUM <br /> <br />FROM: <br /> <br />MAYOR & CITY COUNCIL <br />LORI JOHNSON, FINANCE DIRECTOR ~ <br />MARCH 17, 1994 <br /> <br />TO: <br /> <br />DATE: <br /> <br />SUBJECT: FIRE COMPENSATION TASK FORCE <br />REQUEST TO HIRE ACTUARIAL <br /> <br />On October 19, 1993, the Fire Department Compensation Task Force held its <br />first meeting. Since that time, the Task Force has made considerable <br />progress in evaluating the department's compensation, both in terms of <br />hourly pay and the pension benefit amount. <br /> <br />e <br /> <br />The main focus of the Task Force has been on the Fire Relief Association <br />benefit plan and changing from a defined benefit to a defined contribution <br />method of payment. Staff has provided the Task Force members with <br />estimates (based on numerous assumptions) of what the beginning balance of <br />each firefighter's pension account would be under the defined contribution <br />method. There are several firefighters whose account balance is less under <br />the defined contribution method. However, the difference is not substantial <br />and it is felt that this issue can be resolved so that the firefighters in that <br />position maintain their current benefit amount. <br /> <br />Of course, the membership is concerned that all firefighters benefit from the <br />change. The Fire Department membership has to approve the change to the <br />by-laws in order to change from defined benefit to defined contribution. There <br />has been discussion that the members would be more likely to approve the <br />change if there are no benefit reductions and if they have an idea of what <br />their pension balance would be upon retirement under the two plans. The <br />Task Force agreed that it is appropriate at this time to have an actuarial <br />provide projections on future retirement account balances. The Task Force <br />members representing the Relief Association and Fire Department feel that it <br />will be much easier to explain and ultimately sell this proposal to the <br />membership if that information is available. <br /> <br />e <br /> <br />At Monday's meeting I will have a list of possible consultants who could <br />perform the actuarial work requested by the Task Force. I have spoken with <br />Rick Holtz of Wyatt Companies; Mr. Holtz did similar but more extensive <br />studies for the New Hope and Edina Fire Relief Associations. Based on our <br /> <br />P.O. Box 490 · 13065 Orono Parkway · Elk River, MN 55330 · (612) 441-7420 · Fax: (612) 441-7425 <br />