City Council Study Session Agenda and Packet 2017 05 09

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SUBJECT: POLICE MASTER PLAN WITH COMPENSATION AND BENEFITS DATE: MAY 9, 2017 PAGE 9 OF 17 Recommendation for Implementation: If Council is interested in pursuing this option, we should conduct informational meetings with PERA representatives, City Council, and City employees to hear more details about this plan. Informational meetings would need to be scheduled in advance of the adoption of the 2018 budget if this is a desired option for 2018. Option 5: Join the Fire and Police Pension Association (FPPA) to enhance the retirement benefits for Sworn Officers. FPPA was established in January of 1980. FPPA administers a statewide, multiple employer, public employee retirement system providing a defined benefit and defined contribution retirement plan coverage along with a death and disability coverage for police officers and fire fighters throughout the State of Colorado. This pre -retirement death and disability coverage is also available as a separate benefit for those entities that have another retirement plan but would like to add the death and disability coverage for their public safety officers. For most of the 1900's, pension plans for Colorado police officers and firefighters were funded and administered by local governments and special districts. By the mid -1970's many local pension plans were in serious financial trouble, paying out far more in benefits than they were taking in through contributions and investment returns. The Colorado Legislature addressed this growing crisis by dividing public safety officers into two groups — old hires and new hires — for retirement purposes. The dividing line between the two groups was the date of April 8, 1978. Police officers and firefighters hired on or after April 8, 1978 were designated as new hires and are covered by the Statewide Defined Benefit Plan (SWDB Plan) administered by FPPA. Both old hires and new hires were enrolled in the Statewide Death & Disability Plan (SWD&D Plan). Provisions in the law, however, allowed for old hire plans to affiliate with FPPA for investment purposes. The law also provided a time period for departments to set up financially sound alternative pension plans of their own, thus bypassing normal retirement coverage under the SWDB Plan for all of their employees. During that time, many departments established locally administered money purchase plans. In recent years, members and employer groups from departments with local money purchase plans approached FPPA requesting entry into the SWDB Plan. In 2003, legislation was enacted to allow plans to enter the SWDB Plan and for FPPA to establish a Statewide Hybrid Plan (SWH), which is a combination of a defined benefit plan and a money purchase plan. As of January, 1, 2004, departments that offer local CITY COUNCIL COMMUNICATION