Submitted By: Chris Watt
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Presentation By: Doug Peebles and Chris Watt
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Department: Human Resources and Risk Management
STAFF RECOMMENDATION (Motion Ready):
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Adopt Ordinance 2022-20 to adjust the General Employees' Retirement System investment assumption rate. This public hearing was postponed from the February 15, 2022 City Council meeting.
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OCALA'S RELEVANT STRATEGIC GOALS:
Fiscally Sustainable .
PROOF OF PUBLICATION:
2/19/2022 - #6930769
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BACKGROUND:
The relevant reasons for reducing the investment assumption rate for the General Employees' Retirement System is the plan is currently cash-flow negative. The annual contribution requirement is around $9.5 million but payout is about $14 million in benefit payments each year. For this reason, the plan is becoming more sensitive to investment return performance and typically requires a more conservative approach for asset allocation. An asset allocation study provided to the Pension Board shows the closed plan cannot continue to expect a 7% investment return, long term, without increasing to an undesirable risk portfolio.
FINDINGS AND CONCLUSIONS:
It is the recommendation of City Staff and the General Employees' Retirement Board to lower the Investment Assumption Rate from 7% to 6.5% over 5 years, at 10 basis points each year starting October 1, 2021.
FISCAL IMPACT:
See attached schedule and impact statement.
PROCUREMENT REVIEW:
N/A
LEGAL REVIEW:
Was reviewed by Mr. Glen Thomas with Lewis Longman Walker, PA and City Attorney
ALTERNATIVE:
Not Approve and direct staff to change.
ORDINANCE 2022-20
AN ORDINANCE OF THE CITY OF OCALA, AMENDING THE CITY OF OCALA GENERAL EMPLOYEES' RETIREMENT SYSTEM, ADOPTED PURSUANT TO ORDINANCE NO. 5988, AS SUBSEQUENTLY AMENDED; IS HEREBY FURTHER AMENDED BY AMENDING SECTION 43-67, BENEFIT AMOUNTS AND ELIGIBILITY; PROVIDING FOR SEVERABILITY OF PROVISIONS; PROVIDING FOR CODIFICATION; REPEALING ALL ORDINANCES IN CONFLICT AND PROV...
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