(a) History. In 1999, city council adopted Ord. 13842, which established a simple 2% cost-of- living adjustment for all members. In 2007, city council adopted Ord. 17839-10-2007, which established an ad hoc cost-of-living adjustment for all city employees hired on or after December 31, 2007, and all members who were not vested as of December 31, 2007. All members who were vested as of December 31, 2007, all retired members, and all beneficiaries were allowed to make a selection to either stay with the 2% simple cost-of-living adjustment or to receive the ad hoc cost-of-living adjustment. The members who did not make a selection were automatically defaulted into the 2% cost-of-living adjustment. In 2011, city council adopted Ord. 19599-03-2011, which eliminated the cost-of-living adjustment for group II general members. In 2012, city council adopted Ord. 20471-10-2012, which eliminated the cost-of-living adjustment for group IV police members, implemented the 2% cost-of-living adjustment for all service earned or purchased after October 1, 2013, for group I and group III police members, allowed group I general members and group III police members who were subject to the ad hoc cost-of-living adjustment to select the 2% cost-of-living adjustment for past years of service, and allowed beneficiaries who were subject to the ad hoc cost-of-living adjustment to select the 2% cost-of-living adjustment for future COLA adjustments. Active firefighters, and those firefighters who retired or separated from employment during the term of the April 13, 2010, collective bargaining agreement between the city and the Fort Worth Professional Firefighters Association IAFF Local 440, were not eligible to participate in the 2012 selection. On September 16, 2014, the city council adopted Ord. 21459-09-2014, which eliminated the cost-of-living adjustment for group VI firefighters. On October 21, 2014, city council adopted Ord. No. 21510-10-2014, which implemented the 2% cost-of-living adjustment for all service earned or purchased on or after January 10, 2015 for group V firefighters. Group V firefighters who were subject to the ad-hoc cost-of-living-adjustment were also allowed to select the 2% cost-of living adjustment for past years of service.
(b) Group II general members, group IV police officers, and group VI firefighters. Group II general members, group IV police officers and group VI firefighters (and their beneficiaries) are not eligible to receive a cost-of-living adjustment on their pension amount.
(c) Group I general members, group III police officers, and group V firefighters. Group I general members, group III police officers, and group V firefighters (and their beneficiaries) are not entitled to a cost-of living adjustment for any credited service earned or purchased on or after July 20, 2019.
(d) Group I general members, group III police officers, and group V firefighters who have not retired or entered the DROP by January 1, 2021. The following provisions apply to group I general members, group III police officers and group V firefighters who have not retired or entered the drop effective January 1, 2021:
(1) The ad-hoc cost-of-living adjustment and the 2% simple cost-of-living adjustments are eliminated for all past years of service.
(2) The ad-hoc cost-of-living adjustment and the 2% simple cost-of-living adjustment are eliminated for all future years of service.
(3) Group I general members, group III police members and group V firefighters who have not retired or entered the DROP by January 1, 2021 may receive a variable cost-of-living adjustment to be calculated as follows:
a. Upon retirement, on or after the first day of each January a cost-of-living adjustment or 13th paycheck may be made in accordance with subsection (d)(3)c. based on that portion of the base pension of a member for all credited service earned or purchased prior to July 20, 2019 (hereinafter called pro-rata base pension), with the amount of such cost-of-living adjustment or 13th paycheck to be in an amount not to exceed 4% of the member's pro-rata base pension, provided, however, that such cost-of-living adjustment or 13th paycheck may be made only if both of the following conditions are met:
1. The actuarially determined contribution (ADC), based on a closed 30-year funding of the unfunded liabilities, has been equal to or less than the fixed contribution (the contribution in place before any automatic increases under § 2.5-3(c)) for the last two consecutive calendar years based on both actuarial and market values of assets; and
2. The fund's actuary determines that funding the full cost of the 13th paycheck or cost-of-living adjustment is not anticipated to cause the ADC to exceed the fixed contribution (the contribution in place before any automatic increases under § 2.5-3(c)) for the calendar year in which the 13th paycheck or cost-of-living adjustment will apply.
b. A cost-of-living adjustment or 13th check cannot be granted under subsection (d)(3)a. if either of the following circumstances exist:
2. The assumed rate of return as determined by the board is higher than the average of the assumed rates of return as reported by two independent sources that have been agreed to by the city and the board.
c. No later than April 30 of each year, the board shall, based on fund performance for the two immediately preceding years, advise the city council of the board's decision regarding whether to grant a variable cost-of-living adjustment or a 13th paycheck for the following calendar year, and the city council shall ratify such decision if the decision is fully in compliance with subsections (d)(3)a. and (d)(3)b..
(4) To be eligible for a cost-of-living adjustment for a particular year, either the member or any survivor must have been receiving benefits by September 30th of the prior year.
(e) Retirees and beneficiaries eligible to receive a cost-of-living adjustment who are receiving payments or who have retired on or before July 19, 2019; group I general members, group III police members, and group V firefighters who retire or enter the DROP on or before January 1, 2021; and members who receive an in the line of duty disability retirement or in the line of duty death retirement.
The following provisions apply to:
Retirees and beneficiaries eligible to receive a cost-of-living adjustment, who are receiving payments or who have retired on or before July 19, 2019;
Group I general members, group III police members, and group V firefighters who retire or enter the DROP on or before January 1, 2021; and
Members who receive an in the line of duty disability retirement or in the line of duty death retirement.
(1) The 2% simple cost-of-living adjustment.
a. The 2% simple cost-of-living is applicable to the following:
1. Retirees and beneficiaries who are eligible to receive a cost-of-living adjustment, who are already receiving payments on January 1, 2021, and who selected or defaulted to the 2% cost-of-living adjustment following the 2007, 2012, and 2014 selection processes;
2. Credited service through July 19, 2019 for group I general members, group III police members, group V firefighters, and vested terminated members in any of those groups who retire or enter the DROP on or before January 1, 2021 and who selected or defaulted to the 2% cost-of-living adjustment following the 2007, 2012, and 2014 selection processes;
3. Credited service through July 19, 2019 for group I general members, group III police members, and group V firefighters who retire on disability retirement due to an in the line of duty disability, and who selected or defaulted to the 2% cost-of-living adjustment following the 2007, 2012, and 2014 selection processes;
4. Credited service through July 19, 2019 for beneficiaries of group I general members, group III police members, and group V firefighters who selected or defaulted to the 2% cost-of-living-adjustment following the 2007, 2012, and 2014 selection processes;
5. Credited service earned or purchased from October 1, 2013 through July 19, 2019 for group I general members and group III police members who retire or enter the DROP on or before January 1, 2021, and have the ad hoc cost-of-living adjustment for service prior to October 1, 2013;
6. Credited service earned or purchased from January 10, 2015 through July 19, 2019 for group V firefighters who retire or enter the DROP on or before January 1, 2021, and have the ad hoc cost-of-living adjustment for credited service prior to January 10, 2015;
7. Credited service earned or purchased from October 1, 2013 through July 19, 2019 for group I general members and group III police members who retire on disability retirement due to an in the line of duty disability and who have the ad hoc cost-of-living adjustment for credited service prior to October 1, 2013;
8. Credited service earned or purchased from January 10, 2015 through July 19, 2019 for group V firefighters who retire on disability retirement due to an in the line of duty disability and who have the ad hoc cost-of-living adjustment for credited service prior to January 10, 2015;
9. Credited service earned or purchased from October 1, 2013 through July 19, 2019 for beneficiaries of group I general members and group III police members who had the ad hoc cost-of-living adjustment for credited service prior to October 1, 2013, if the member is killed in the line of duty; and
10. Credited service earned or purchased from January 9, 2015 through July 29, 2019 for beneficiaries of group V firefighters who had the ad hoc cost-of-living adjustment for credited service prior to January 10, 2015, if the member is killed in the line of duty.
b. Calculation of the 2% simple cost-of-living adjustment. Upon retirement, on the first day of each January a cost-of-living adjustment shall be made on that portion of the base pension of the member that is subject to the 2% cost-of-living adjustment, as described in subsection (e)(1)a., by increasing the amount of the actual pension by 2% of that portion of the base pension, unless otherwise provided herein. To be eligible for a cost-of-living adjustment for a particular year, either the member or any survivor must have been receiving benefits by September 30 of the prior year.
(2) Ad hoc cost-of-living adjustment.
a. The ad hoc cost-of-living adjustment is applicable to the following:
1. Credited service through September 30, 2013, for group I general members and group III police members who retire or enter the DROP on or before January 1, 2021, who had the ad hoc cost-of-living adjustment, and who did not select to receive the 2% cost-of-living adjustment during the 2012 selection process;
2. Credited service through January 9, 2015, for group V firefighters who retire or enter the DROP on or before January 1, 2021, who had the ad hoc cost-of-living adjustment, and who did not select to receive the 2% cost-of-living adjustment during the 2014 selection process;
3. Credited service through September 30, 2013, for group I general members and group III police members who retire on disability retirement due to an in the line of duty disability, who had the ad hoc cost-of-living adjustment, and who did not select to receive the 2% cost-of-living adjustment during the 2012 selection process;
4. Credited service through September 30, 2013 for beneficiaries of group I general members and group III police members if the member is killed in the line of duty and the member had the ad hoc cost-of-living adjustment and did not select to receive the 2% cost-of-living adjustment during the 2012 selection process;
5. Credited service through January 9, 2015 for group V firefighters who retire on disability retirement due to an in the line of duty disability, who had the ad hoc cost-of-living adjustment, and who did not select to receive the 2% cost-of-living adjustment during the 2014 selection process;
6. Credited service through January 9, 2015 for beneficiaries of group V firefighters if the group V firefighter is killed in the line of duty, and the group V firefighter had the ad hoc cost-of-living adjustment and did not select the 2% cost-of-living adjustment during the 2014 selection process; and
7. Members and beneficiaries who are eligible to receive a cost-of-living adjustment, who are already receiving payments on January 1, 2021, who had the ad hoc cost-of-living adjustment, and who did not select the 2% cost-of-living adjustment during the 2012 or 2014 selection process.
b. Calculation of the ad hoc cost-of-living adjustment. Upon retirement, on the first day of each January, an ad hoc cost-of-living adjustment may be made on that portion of the base pension of the member that is subject to the ad hoc cost-of-living adjustment, as described in subsection (e)(2)a., pursuant to this subsection as follows:
1. Prior to December 31 of each year, the fund's actuary shall make a written report to the board certifying the amortization period required to pay off the unfunded actuarial accrued liability of the fund.
2. Based on the information provided by the actuary, the board shall:
i. Grant a compounded ad hoc cost-of-living adjustment of 4%, if the actuary certifies that the amortization period required to pay off the unfunded actuarial accrued liability of the fund, after granting the 4% cost-of-living adjustment, would be 18.0 years or less;
ii. Grant a compounded ad hoc cost-of-living adjustment of 3%, if the actuary certifies that the amortization period required to pay off the unfunded actuarial accrued liability of the fund, after granting the 3% cost-of-living adjustment, would be between 18.1 and 24.0 years;
iii. Grant a compounded ad hoc cost-of-living adjustment of 2%, if the actuary certifies that the amortization period required to pay off the unfunded actuarial accrued liability of the fund, after granting a 2% cost-of-living adjustment, would be between 24.1 and 28.0 years;
iv. Grant no ad hoc cost of living adjustment if the actuary certifies that the amortization period required to pay off the unfunded actuarial accrued liability of the fund is 28.1 years or more.
c. Increased contributions made in conjunction with the automatic risk-sharing provision of § 2.5-3(c) cannot be used in determining the amortization period for granting an ad hoc cost-living adjustment.
d. To be eligible for a cost-of-living adjustment for a particular year, either the member or any beneficiary must have been receiving benefits by September 30th of the prior year.
(f) DROP participants.
(1) If a member enters the DROP and remains in the DROP for two or more years, they will be entitled to receive a cost of living adjustment for their years in the DROP as if the member retired on the date they entered in the DROP. Members who do not remain in the DROP for at least two years are not entitled to a cost of living adjustment for their time in the DROP. If the cost of living adjustment takes the form of a 13th paycheck, the amount of the paycheck shall be based on the member's DROP pension amount (excluding impact of any potential qualified leave under § 2.5-4(c)), and the cumulative balance of all such 13th paychecks shall be payable to the member in a lump sum following the date of actual retirement.
(2) A group I member, group III police member, or group V firefighter who enters the DROP on or before January 1, 2021 , but does not remain in the DROP for two years is still eligible to receive a cost-of-living on their pension, although they would not be eligible to receive a cost-of-living adjustment for their years in the DROP. If a member does not remain in the DROP for two years, then the member must be receiving pension benefits by September 30th to be eligible to receive a cost-of-living adjustment on their pension the next year.
(Ord. 20471-10-2012, § 2, passed 10-23-2012; Ord. 21459-09-2014, § 1, passed 9-16-2014; Ord. 21510-10-2014, § 1, passed 10-21-2014; Ord. 23516-12-2018, § 3, passed 12-11-2018)