Coversheet


NEW BUSINESS 13.


COMMITTEE MEMORANDUM

TO:	Finance and Economic Resiliency Committee Members

FROM:	Alina T. Hudak, City Manager

DATE:	May 21, 2021

SUBJECT:	DISCUSS IMPLEMENTING TEN YEAR VESTING FOR ALL FUTURE EMPLOYEES

HISTORY:

The vesting period was previously ten years but was changed to five years in 2010.

ANALYSIS:

Gabriel Schroder and Smith (GRS) performed an actuarial analysis in 2018 as an option for our negotiations for the 2018-2021 collective bargaining agreements. This study was updated recently with similar results which indicate minimal savings ranging from .02% t0 .19% each year for the next 30 years.

Supporting Survey Data
HR surveyed local public agencies in South Florida, and we received thirty-one (31) responses.
6 had five year vesting; 5 had a vesting period which was more than five years but less than ten years; 4 had a ten year vesting period; 9 had the Florida Retirement System which has eight year vesting, and 7 had defined contribution plans with vesting from immediate to five years.

Fiscal Impact Statement
The GRS actuarial study as noted above provides the fiscal impact and is included as an attachment.

CONCLUSION:

Human Resources recommends that the vesting period not be changed as the actuarial analysis indicates negligible savings to the City which ranges from .02% in year one to a maximum of .19% over the next thirty years. This is not enough to offset the potential negative effects on the City of Miami Beach’s ability to recruit top talent. In addition, it would need to be negotiated with AFSCME, CWA and GSAF before it could be implemented with classified employees.
It should also be noted that our pension program needs to be even better than other competing employers as the City is relatively unique in that we do not participate in the Social Security program.

Applicable Area

Citywide

Is this a "Residents Right to Know" item, pursuant to City Code Section 2-14?		Does this item utilize G.O. Bond Funds?
Yes		No

ATTACHMENTS:
	Description	Type
	Proposed Plan Change	Other