DATE: May 12, 2016
TO: Board of Mayor and Aldermen
FROM: Eric Stuckey, City Administrator
SUBJECT:
title
*Consideration of Resolution 2016-23, a Resolution to Adopt Amendment 4 to the City of Franklin Employees’ Pension Plan. (05-16-16 Employee Pension Committee, 05-24-16 WS)
body
Purpose
The purpose of this memorandum is to provide information to the Franklin Board of Mayor and Aldermen (BOMA) concerning an amendment to the Employees’ Pension Plan regarding lump sum distributions.
Background
Employees that leave City employment with a vested pension balance of $10,000 or less, as calculated by the actuarial firm, is provided the balance as a lump sum. This is good for the City and the employee. The employee is able to transfer their vested amount into another retirement vehicle. The city is able to avoid writing small pension checks during the lifetime of the retiree.
From time to time, the threshold for lump sum payments has been adjusted to account for inflation. The Pension Committee is recommending that the threshold amount be raised to $15,000 effective immediately.
Financial Impact
There is no financial impact resulting from this amendment. The method of payment to the vested employee would be actuarially equal, whether paid as a lump sum or in the form of monthly checks.
Recommendation
rec
Staff recommends approval of the Resolution