FYE 14 Budget prelim - City of Norman

CITY OF NORMANRETIREMENT SYSTEMSBUDGETHIGHLIGHTSThe City of Norman contributes to three separate retirement systems on behalf of Cityemployees.• Norman Employees Retirement System;• Oklahoma Firefighters Pension and Retirement System;• Oklahoma Police Pension and Retirement System.Each of these retirement systems is administered by entities other than the City of Normanand as a result the City does not exercise budgetary control. Therefore, they are not included in theFYE 13 Budget as separate funds of the City. It should be noted that the costs of contributions tothe systems appear as a part of salaries and benefit category of expenditure in every operating fundof the City.Employee Retirement SystemThe Employee Retirement System (the “Plan”) of the City of Norman is a single-employerpublic retirement system, which was established on November 1, 1967, by a City ordinance andamended on January 29, 1985 and July 1, 1991. The Plan was a defined benefit pension plan towhich the City and employees contributed. The July 1, 1991, amendment converted that portion ofthe Plan which relates to non-retired participants to a money purchase defined contribution planunder section 414 (h) of the Internal Revenue Code (the “New Plan”). For active employees as ofJuly 1, 1991, an amount equal to the greater of the participants’ vested benefits under the Plan ortheir account balance in the Plan was transferred to a participant account in the New Plan.A Board of Trustees, composed of six members, meeting at least quarterly, manages theNew Plan. Members by position include the City Manager or a designee, Finance Director, andHuman Resources Director. The City Council elects one additional member, and the AmericanFederation of State, County, and Municipal Employees (AFSCME) union membership elects thefinal two members. All active employees who participate in the New Plan contribute 6.5 percent oftheir base pay and the City contributes 8.5 percent of member’s payroll to the New Plan.The Plan will remain in existence to pay benefits to those retired employees receivingbenefits at July 1, 1991. As of April 1, 2012, the Plan included 12 retirees and other beneficiaries.ANNUAL BUDGET122