DATE: April 1, 2015
TO: Board of Mayor and Aldermen
FROM: Eric Stuckey, City Administrator
SUBJECT:
title
Consideration Of Resolution 2015-22, A Resolution Of The Board Of Mayor And Aldermen For The City Of Franklin Employees' Pension Plan, Providing A Cost Of Living Adjustment To The Monthly Benefit For Retired Recipients (04/09/15 Budget & Finance 3-0)
Purpose
The purpose of this agenda item is to consider approval of a cost-of-living increase for existing recipients of benefits from the City of Franklin Pension Plan.
Background
The Board of Mayor & Aldermen has the authority to approve adjustments to the benefit levels of those retired under the City Pension Plan. The Board has followed the policy for cost of living increases similar to the one used by the State of Tennessee Consolidated Retirement plan. Those parameters call for a cost-of-living increase that matches the increase in the "core" Consumer Price Index (CPI) for all items, excluding food & energy, subject to a 3% maximum. The measure has been revaluated each year based on the March CPI, which will be available on April 15th.
Financial Impact
No direct impact to General Fund. Pension benefits are paid from the investment earnings of the Pension Fund. The adjustment will elevate slightly the benefits paid from those earnings.
Options
Recent Board actions have been to make adjustments to the pension benefit of retirees (or their surviving spouses) that are generally in line with changes in purchasing power of the benefit, based on consumer price levels.
Recommendation
Staff recommends that the Board adopt the Resolution approving an increase based on the March, 2015 CPI (Series ID: CUUR0000SA0L1E). The change between 2015 and 2014 is 1.75%.