Title
An Ordinance Of The City Of Hollywood, Florida, Amending Section 33.025 Related To Providing New Benefit Options, Revising The Makeup Of The Board Of Trustees, And Revising Language Governing Purchase Of Credited Service.
Strategic Plan Focus
Financial Management and Administration
Body
Staff Recommends: Approval of the attached Ordinance.
Explanation:
Currently, the Code provides only for a defined benefit plan ("DB Plan") to members of the City of Hollywood Employees' Retirement Fund ("COHERF"). During collective bargaining between representatives of AFSCME Local 2432 ("AFSCME") and the City, tentative agreement has been reached upon the desire to add two more options for retirement benefits. These two new options are a defined contribution plan ("DC Plan") and a hybrid plan ("Hybrid Plan") that would be comprised of both a DB and a DC component.
The DC Plan would provide for the City to contribute 8% of a new employee's compensation into a DC Plan, such as a 401(a) account. Vesting would be immediate, giving employees nonforfeitable rights to their benefit, and the benefit would be portable, two features that are attractive to certain employees based upon their own personal family and financial situation.
The second new optional plan is the Hybrid Plan, which would have a DB component of a 1% multiplier toward which the employee would contribute 5% of their compensation, along with a DC component toward which the City would contribute 5% of a new employee's compensation. New employees would not be required to contribute anything toward the DC component of the Hybrid Plan.
By contrast, new employees joining the current DB Plan vest in the plan after seven years, and contribute 8% of their compensation for a 2.5% multiplier.
Briefly, future benefits under the DB Plan are determined by multiplying the years of service times the average final compensation (a term defined in the ordinance) times the multiplier. Future benefits under the DC P...
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