City of Alexandria, Virginia
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MEMORANDUM
DATE: APRIL 26, 2017
TO: THE HONORABLE MAYOR AND MEMBERS OF CITY COUNCIL
FROM: MARK B. JINKS, CITY MANAGER /s/
DOCKET TITLE:
TITLE
Consideration of a Resolution to Amend the City of Alexandria's Supplemental Retirement Plan. [ROLL-CALL VOTE]
BODY
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ISSUE: Consideration of a Resolution to Amend the City of Alexandria's Supplemental Retirement Plan.
RECOMMENDATION: That City Council pass the resolution to amend the Plan as described in Attachment 2.
BACKGROUND: The City of Alexandria's Supplemental Retirement Plan (the "Plan") is a defined benefit plan, established in 1970. It is intended to supplement retirees' income from the Virginia Retirement System ("VRS"). As a defined benefit plan, it is designed to provide a monthly income for life. Membership in the Supplemental Retirement Plan is provided for all full-time general schedule employees, deputy sheriffs, fire marshals, medics and part-time general schedule employees who are employed in positions that are at least the equivalent of 50 percent of a full-time position.
There are currently four forms of benefit that an employee can select at the time of their retirement. Three of them are a form of annuity. The life annuity provides a monthly benefit for the employee. The two other forms of annuity are calculated to include a benefit for a survivor or beneficiary. Regardless of the form of annuity benefit, the total value provided to the employee or his family is the same.
A fourth benefit option provides a lump sum payment to the member. The intent of the lump sum is to be a single payment of cash at the time of retirement that is the equivalent of the annuity benefits, discounted for present value. As the Plan is currently written, the lump sum present value is calculated at the 30-year Treasury Rate. This rate is set annually. Due to historic low market inter...
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