The request is to conduct a second and final reading of an ordinance which effectuates a benefit change in the form of a one-time supplemental benefit payment under the New Port Richey Police Officers’ Retirement System for each person receiving a benefit from the plan on October 1, 2018 including DROP participants.

The Police Officers’ Retirement System does not currently provide for an annual cost-of-living adjustment.  In accordance with the Police Pension Ordinance and in lieu of such the ordinance provides that the City Council shall, every two years, review the status of all service retirees, disability retirees and beneficiaries who are receiving payments from the system for the purposes of considering an ad hoc increase in benefits for all such retirees.

In reviewing this matter from a past perspective the City Council has not been asked and as such nor have they granted an ad hoc increase to the members receiving benefits from the system at any time in at least the last twenty years.

In deference to fiscal responsibility, in determining the appropriateness of any proposed adjustment, City Council should consider the most recent actuarial valuation, the prevailing rate of inflation, the investment return on the system assets and the recommendations of the Police Pension Board.

The most recent actuarial valuation confirms a Vested Benefit Security Ratio of 118.1% as of October 1, 2018 which is an increase from 107.2% as of the Actuarial Impact Statement as of October 1, 2017.  In other words, the system has assets in excess of present value of vested accrued benefits. The prevailing rate of inflation was reflected in the valuation as in the Consumer Price Index at 2.75%. The investment return on the system assets on a smoothed actuarial value rate of return is 9.79% which is quite favorable.

Additionally, the Police Pension Board, in a letter from Pension Administrator Scott Baker dated July 18, 2019, sets forth a recommendation that the City approve the disbursement of a one-time 13^th check as a means to provide a benefit to retirees of the system.

Incidentally, if this action is approved, as a result of the funded ratio of the plan which by the way is 108.8%, there will be no increase in the City’s funding requirement.

Therefore, please consider the approval of a distribution in the form of a 13^th pension check as a one-time additional benefit payment equal to the sum of the current regular monthly benefit and the supplemental payment payable on December 1, 2019 to current retirees and members of the DROP in respect to the Police Pension Fund.