BOARD OF COMMISSIONERS
AGENDA ITEM COVER SHEET
Board Meeting
Date:
Presenter:
Subject:
Background:
January 7, 2016
Scott Adair
Amendment of the Authority’s sponsored Pension Plan documents in
anticipation of the final IRS Determination Letters.
The Authority sponsors four retirement plans for its employees. There are two
Union plans for Union Employees of Regional Transit Services, Inc. and Union
Employees of Lift Line, Inc. and Rural Properties; and two Non-Union plans for
Non-Union Employees of Regional Transit Services, Inc. and Non-Union
Employees of Lift Line, Inc. and Rural Properties. All of these plans are
defined benefit plans.
From time to time each of these four plans are required to comply with the
Internal Revenue Code, conform to collectively bargained changes, and to
improve the four plans administration and processes.
At this time, the Internal Revenue Service (IRS) is requiring governmental
pension plans determination letters to be updated based on technical changes
required by the IRS. Therefore, we have adjusted each of the four Authority
sponsored pension plans Plan Document to present the most current IRS
regulations for these plans. The four pension plans revised documents are
attached, in final version, as we have adjusted each pension plan document to
flow in a logical format and add the additional required changes from both an
IRS standpoint and to adhere to changes that have been adopted by this
Board since the last IRS Determination Letter. None of the changes, in any of
these documents, has a financial impact either in terms of added cost or
change in benefit on the plans that were not previously approved by the
Board.
Finally, the Board of Commissioners has the power delegate the authority to
sign certain plan amendments to the Chief Executive Officer as it is an
efficient model of governance. This delegation would allow the CEO to sign
plan amendments administratively when they are required by applicable laws
or have no negative or positive financial impact on the Authority’s four
sponsored plans.
Financial Impact:
The Authority has worked with the defined benefit plan’s attorneys and other
than their charges for services there are no additional costs to the Authority or
the defined benefit plans for the adoption of these Plan Documents.
Recommendation
:
That the Chief Executive Officer or his designee be authorized to sign the
amended plan documents for the Authority’s four sponsored pension plans. In
addition, the Board of Commissioners delegates to the Chief Executive Officer
the power to administratively execute future plan amendments administratively
when required by applicable laws or that have no negative or positive financial
impact to any of the Authority’s four sponsored Pension Plans.
Resolution: RGRTA 4-2016
AMENDMENT OF THE AUTHORITY’S SPONSORED PENSION PLAN DOCUMENTS IN
ANTICIPATION OF THE FINAL IRS DETERMINATION LETTERS
WHEREAS, the Rochester Genesee Regional Transportation Authority (the Authority) sponsors
four retirement plans for its employees, as follows: The two Union Plans are the Retirement Plan
for Union Employees of Regional Transit Service, Inc. and the Retirement Plan for Union
Employees for Lift Line, Inc. and Rural Properties; and the two non-union plans are the
Retirement Plan for General Administrative and Supervisory (Non-Union) Employees of Regional
Transit Service, Inc. and the Retirement Plan for Non-Union Employees of Lift Line, Inc. and Rural
Properties (collectively, the “Plans”); and
WHEREAS, from time to time the Plans are required to comply with the Internal Revenue Code,
conform to collectively bargained changes, and to improve the Plans administration and
processes; and
WHEREAS, at this time the Internal Revenue Service (IRS) is requiring governmental pension
plans determinations letter to updated based on technical changes required by the IRS; and
WHEREAS, we have adjusted the Plans’ Plan Document for the IRS technical changes and all
other Board adopted changes since the last time the plan documents were revised; and
WHEREAS, none of the changes included in any of the plan documents has a financial impact
either in terms of added cost or change in benefit on the plans that were not previously approved
by the Board; and
WHEREAS, , the Board of Commissioners has the power to authorize the Chief Executive Officer
to execute plan amendments the Plans ; and
WHEREAS, the Board of Commissioners desires to delegate the power to execute such
amendments for the Plans to the Chief Executive Officer where the amendments are required by
applicable laws, or that do not result in a financial impact to the Plans;
NOW, THEREFORE, BE IT RESOLVED, that the Board of Commissioners hereby authorizes the
Chief Executive Officer or his designee to perform any and all actions and to execute the Plans’
Plan Documents’ ; and
BE IT FURTHER RESOLVED, that the Board of Commissioners delegates the authority to
execute amendments to the Plans that are required by applicable laws or that have no negative or
positive financial impact to the Plans.
CERTIFICATION
The undersigned hereby certifies that the above is an excerpt from the Minutes of a
Regular Meeting of the Rochester-Genesee Regional Transportation Authority, which was held on
January 7, 2016 and that the Resolution is still in full force and effect.
__________________________________
James H. Redmond, Chairman
Date: January 7, 2016
Rochester, New York
EXECUTIVE SUMMARY OF MATERIAL CHANGES TO EACH AUTHORITY
SPONSORED PENSION PLANS
The Authority sponsors four retirement plans for its employees. There are two Union plans
for Union Employees of Regional Transit Services, Inc. and Union Employees of Lift Line,
Inc. and Rural Properties; and two Non-Union plans for Non-Union Employees of Regional
Transit Services, Inc. and Non-Union Employees of Lift Line, Inc. and Rural Properties. In
order to provide some clarity on the changes and what their origins are this Executive
Summary is provided to the Board as additional information.
RTS Union Retirement Plan:
Item #1 – "Government Pick-Up Contributions", allow members to have their contributions
to the plan to be pre-tax. This change aligns the Plan Document with the contract we have
with the Union that the Board previously approved.
Item #2 – "Years of Service", clarifies the practice of an employee working at least one hour
in a Plan Year to be eligible for vesting service. This change aligns the Plan Document with
the practice in place currently and thus required to be included in the governance practice
of the Plan.
Item #3 – Members with service in both the RTS Union Retirement Plan and the RTS NonUnion Retirement Plan have vesting time calculated based on time in both plans. The
benefit that the member receives upon retirement is calculated for each individual plan
separately. This change aligns the Plan Document with the practice in place currently and
thus required to be included in the governance practice of the Plans.
Item #4 – Pension Benefits updated to reflect the collective bargaining agreement. This
change aligns the Plan Document with the contract we have with the Union that the Board
previously approved.
Item #5 – "Disability Benefit" is revised to align with the timing of the end of an Authorized
Leave. This allows the employer to cause the pensioner to undergo an examination once
each year. This change aligns with Plan Document with the practice in place currently and
thus required to be included in the governance practice of the Plan.
Item #6 – The indemnification provision of the Plan for each Committee Member has been
revised to reflect industry standards and current insurance coverage. The change aligns
with the practice in place currently and thus required to be included in the governance
practice of the Plan.
Item #7 – The Committee may determine to provide appropriate training concerning
fiduciary obligations, plan operations, or other relevant subjects by, among other methods,
attendance at approved educational programs paid for by the Plan. This change aligns
with an IRS recommended practice.
Item #8 – The "Qualification" section requires that the Plan be amended to conform to IRS
requirements. These are changes throughout the document and are required by the IRS.
Access (IRS name is “Lift Line”) Union Retirement Plan:
Item #1 – "Contributions by Members", describes how a part-time employee that has
moved to full-time must pay into the Plan in order to receive past Service Credit for time
worked prior to their change in status. This change aligns the Plan Document with the
contract we have with the Union that the Board previously approved.
Item #2 – Pension Benefits updated to reflect the collective bargaining agreement. This
change aligns the Plan Document with the contract we have with the Union that the Board
previously approved.
Item #3 – "Years of Service" definition clarified for those employees that work less than
1000 hours in any Plan Year. The change aligns with the practice in place currently and
thus required to be included in the governance practice of the Plan.
Item #4 – "Disability Credited Service" is defined as unable to perform the same occupation
at the time of Disability. The change aligns with the practice in place currently and thus
required to be included in the governance practice of the Plan.
Item #5 – Added a 30-Year Early Retirement Benefit as bargained. This change aligns the
Plan Document with the contract we have with the Union that the Board previously
approved.
Item #6 – When a "Disability Benefit" has ceased, the Employee is permitted to return to
his or her employment with no loss of seniority. Also, language has been added regarding
the timing of an offer of a substitute job in the event of Disability. The change aligns with
the practice in place currently and thus required to be included in the governance practice
of the Plan.
Item #7 – A Member may receive an estimate of his or her projected pension within 60days of a written request. This change aligns the Plan Document with the contract we have
with the Union that the Board previously approved.
Item #8 – The indemnification provision of the Plan for each Committee Member has been
revised to reflect industry standards and current insurance coverage. The change aligns
with the practice in place currently and thus required to be included in the governance
practice of the Plan.
Item #9 – The "Qualification" section requires that the Plan be amended to conform to IRS
requirements. These are changes throughout the document and are required by the IRS.
Access (IRS name is “Lift Line”) and Rural Properties Non Union Retirement Plan:
Item #1 – "Government Pick-Up Contributions", allow members to have their contributions
to the plan to be pre-tax. This change aligns the Plan Document with the contract we have
with the Union that the Board previously approved.
Item #2 – "Teamster's Union Employee" is included to include the retirement benefit for
that bargaining unit. This change aligns the Plan Document with the contract we have with
the Union that the Board previously approved.
Item #3 – "Years of Service", clarifies the practice of an employee working at least one hour
in a Plan Year to be eligible for vesting service. This change aligns the Plan Document with
the practice in place currently and thus required to be included in the governance practice
of the Plan.
Item #4 – Members with service in both the Lift Line Union Retirement Plan and the Lift
Line Non-Union Retirement Plan have vesting time calculated based on time in both plans.
The benefit that the member receives upon retirement is calculated for each individual
plan separately. This change aligns the Plan Document with the practice in place currently
and thus required to be included in the governance practice of the Plans.
Item #5 – When a "Disability Benefit" is being received, the Pensioner receiving a Disability
Benefit, who has not reached his Normal Retirement Date, to undergo a medical
examination by a physician or physicians designated by the Employer to determine if they
are still appropriately classified as Disabled. This change aligns the Plan Document with
the practice in place currently and thus required to be included in the governance practice
of the Plans.
Item #6 – The indemnification provision of the Plan for each Committee Member has been
revised to reflect industry standards and current insurance coverage. The change aligns
with the practice in place currently and thus required to be included in the governance
practice of the Plan.
Item #7 – The Committee may determine to provide appropriate training concerning
fiduciary obligations, plan operations, or other relevant subjects by, among other methods,
attendance at approved educational programs paid for by the Plan. This change aligns with
an IRS recommended practice.
Item #8 – The "Qualification" section requires that the Plan be amended to conform to IRS
requirements. These are changes throughout the document and are required by the IRS.
RTS Non-Union Retirement Plan:
Item #1 – "Average Compensation" definition changed to five years for Members hired
after April 1, 2015. This change aligns the Plan Document with what the Board previously
approved.
Item #2 – "Government Pick-Up Contributions", allow members to have their contributions
to the plan to be pre-tax. The change aligns with the practice in place currently and thus
required to be included in the governance practice of the Plan.
Item #3 – "Teamster's Union Employee" is included to include the retirement benefit for
that bargaining unit. This change aligns the Plan Document with the contract we have with
the Union that the Board previously approved.
Item #4 – "Years of Service", clarifies the practice of an employee working at least one hour
in a Plan Year to be eligible for vesting service. This change aligns the Plan Document with
the practice in place currently and thus required to be included in the governance practice
of the Plan.
Item #5 – Beginning April 1, 2015, there is a one-year waiting period for new Members to
participate in the Plan. This change aligns the Plan Document with what the Board
previously approved.
Item #6 – Members with service in both the RTS Union Retirement Plan and the RTS NonUnion Retirement Plan have vesting time calculated based on time in both plans. The
benefit that the member receives upon retirement is calculated for each individual plan
separately. This change aligns the Plan Document with the practice in place currently and
thus required to be included in the governance practice of the Plans.
Item #7 – For Employees that were hired after April 1, 2015 and become Members of the
Plan the retirement benefit is based on the following:
Less than 10 years credited service - 1.25% per year
10 years but less than 20 years credited service - 1.35% per year
20 years but less than 25 years credited service - 30%
25 years but less than 30 years credited service - 35%
30 years or more credited service - 40%
This change aligns the Plan Document with what the Board previously approved.
Item #8 – When a "Disability Benefit" is being received, the Pensioner receiving a Disability
Benefit, who has not reached his Normal Retirement Date, to undergo a medical
examination by a physician or physicians designated by the Employer to determine if they
are still appropriately classified as Disabled. This change aligns the Plan Document with
the practice in place currently and thus required to be included in the governance practice
of the Plans.
Item #9 – Beginning April 1, 2015, an employee hired on or after this date, who becomes a
Member is 100 percent vested upon completing 5 Years of Service (following a one-year
waiting period to begin participation). This change aligns the Plan Document with what
the Board previously approved.
Item #10 – Employees hired on or after April 1, 2015 must contribute 3% of their
compensation to be a Member of the Plan. This contribution is required each year the
Member is in the Plan. This change aligns the Plan Document with what the Board
previously approved.
Item #11 – The indemnification provision of the Plan for each Committee Member has been
revised to reflect industry standards and current insurance coverage. The change aligns
with the practice in place currently and thus required to be included in the governance
practice of the Plan.
Item #12 – The Committee may determine to provide appropriate training concerning
fiduciary obligations, plan operations, or other relevant subjects by, among other methods,
attendance at approved educational programs paid for by the Plan. This change aligns with
an IRS recommended practice.
Item #13 – The "Qualification" section requires that the Plan be amended to conform to IRS
requirements. These are changes throughout the document and are required by the IRS.