Meeting Date:           December 8, 2008


From:                          Jay M. Evans, City Manager   


Subject:                      Ordinance amending the General Employees Pension Plan to provide vesting for four employees laid off in July 2008 and amending various sections of the plan to ensure compliance with federal regulations



Staff Recommendation:

Staff recommends approval of the proposed ordinance amending the General Employees Pension Plan.



The City amended the General Employees Pension Plan on July 15, 2008 to “freeze” the plan effective September 30th and provide vesting to those who were not vested (but who would ultimately stay with the City through their five year anniversary).  The City laid-off nine employees on July 15th due to budget constraints.  Five of those employees were not vested in the pension plan because they had less than five years of service.  One of the five employees was later re-employed by the City in another position, but four former employees remain un-vested. 


The vesting provisions in the General Employees Pension Plan are designed to encourage longevity and reduce turnover.  Layoffs are not within the control of the employee, and can serve to deprive an otherwise loyal and productive employee of any retirement benefit they would have received for up to four years and 364 days of service.   Since up until the point of layoff these employees have performed in good-faith, it does not seem appropriate to separate them with no retirement benefit at all.  The proposed ordinance would vest the employee’s pension benefit for the amount of service they have with the City up to the point they were laid off.


The Actuarial Impact Statement that was done in anticipation of freezing the plan did not anticipate layoffs, and thus included the four employees as otherwise vested.  This means there is no additional actuarial impact to the plan by providing them with vesting even though they were laid off (see attached letter from Patrick Donlan, Actuary for the G.E. Pension Plan). 


Since one of Leesburg’s “Core Values” is “We value a caring organization”, it seems appropriate to take care of our employees, even when economics require us to separate them.  This sends the right message to our employees that we are looking out for them in good times and bad.


Other changes to the plan are at the request of the pension fund’s attorney, Scott Christiansen, to keep the plan in compliance with federal regulations.  Those changes also result in no actuarial impact.



1.  Adopt the Ordinance as presented; or

2.  Such alternative action as the Commission may deem appropriate



Fiscal Impact

There is a fiscal impact to the expanded vesting in the ordinance, but such impact has been accounted for previously in the Actuarial Impact Statement considered by the Commission in July.  There is no additional impact to the plan.





Submission Date and Time:    1/21/2009 4:23 PM____


Department: ______________________

Prepared by:  ______________________                     

Attachments:         Yes____   No ______

Advertised:   ____Not Required ______                     

Dates:   __________________________                     

Attorney Review :       Yes___  No ____



Revised 6/10/04


Reviewed by: Dept. Head ________


Finance  Dept. __________JB______                                     


Deputy C.M. ___________________                                                                         

Submitted by:

City Manager ___________________


Account No. _________________


Project No. ___________________


WF No. ______________________


Budget  ______________________


Available _____________________