DISTRICT’S Apri I l!)!)O WORKFORCE Annual Report Required by the District of Columbia Retirement Reform Act 141048 _1--.-.-._-._.-- ..-. - __lll_--__~-._,..- ._._ -._- .._- -.- ____ (;A(:l;(;(;l)-!~o-70 United States General Accounting Office Washington, D.C. 20648 General Government Division B-208412 April 4,199O The Honorable Thomas S. Foley Speaker of the House of Representatives The Honorable Robert C. Byrd President Pro Tempore United States Senate The Honorable John Glenn Chairman, Committee on Governmental Affairs United States Senate The Honorable Ronald V. Dellums Chairman, Committee on the District of Columbia Houseof Representatives The Honorable Robert C. Byrd Chairman, Committee on Appropriations United States Senate The Honorable Jamie L. Whitten Chairman, Committee on Appropriations House of Representatives The Honorable Marion S. Barry, Jr. Mayor of the District of Columbia The Council of the District of Columbia Washington, DC In accordancewith subsection 146(b) of the District of Columbia Retire- ment Reform Act (Public Law 96-122; as amendedby Public Law 9% 104), we are sending you our comments on the enclosedreport prepared by Mr. Thomas Lowman, of William M. Mercer Meidinger Hansen,Inc., on the disability retirement rate of District of Columbia police officers and firefighters. The act provides for annual federal payments to the District of Columbia Police Officers and Fire Fighters’ Retirement Fund. These payments, however, are to be reduced when the disability retire- ment rate exceedsan established limit. The purpose of making the pay- ments subject to a reduction was to encouragethe District government to control disability retirement costs. Page 1 GAO/GGIHO-70 Retirement Reform Act Mr. Lowman, an enrolled actuary, was engagedby the District of Colum- bia Retirement Board to (1) determine the 1989 disability retirement rate for District police officers and firefighters hired before February 16, 1980; (2) determine if that rate exceededeight-tenths of 1 percent- age point; and (3) prepare the annual report required by the act. Subsection 146(a) of the act, as amended,established a “trigger mecha- nism” for determining whether the annual federal payment of $34,170,000 to the District of Columbia Police Officers and Fire Fight- ers’ Retirement Fund (authorized under subsection 144(a)(l) of the act) is to be reduced. The Comptroller General is required by the act to make this determination each year on the basis of a review of the disability retirement rate computed by the enrolled actuary. We have reviewed the actuary’s report and other relevant data and concluded that no reduc- tion is required in the fiscal year 1991 federal payment to the District’s police and firefighters’ retirement fund. / Ba#is for Our As defined by subsection 146(a)(2) of the act, as amended,the disability retirement rate is a fraction, the numerator of which is the number of Determination District of Columbia police officers and firefighters hired before Febru- , ary 16,1980, who retired on disability during the applicable calendar year. The denominator is the total number of police officers and firefighters hired before February 16, 1980, who were on active duty as of January 1 of the applicable calendar year. For calendar year 1989, up to 118 officers and members of the Metropol- itan Police Force who were hired before February 14, 1980, and who retired on disability before the end of calendar year 1989 shall be excluded from the computation of the disability retirement rate.’ According to the conferencereport on the bill, a number of officers were in limited or light duty status or on extended sick leave, and the police chief testified that it was important to replace these individuals with able-bodied police officers who could perform on the street. The confer- ees,noting that the District responded favorably to incentives for reduc- ing the percentageof disability retirements, included language allowing up to 118 of these individuals to retire without reducing the authorized federal payment to the retirement fund. ‘kection 139(a) of Title I, District of Columbia Appropriations Act, 1989 (Public Law 100-462, Oct. 1, 1988.) Psge 2 GAO/GGD-90-70 Retirement Reform Act 5208412 A disability retirement rate greater than eight-tenths of 1 percentage point triggers a reduction in the next annual federal payment. Thus, the trigger mechanism governing the fiscal year 1991 payment is baaedon membersretiring on disability in calendar year 1989 (the numerator) and memberson board on January 1,1989, (the denominator). The enrolled actuary must report the determinations made under the law, along with related documentation, to the Retirement Board and to the Comptroller General no later than March 1 of each year. Our comments must include a statement as to whether the determina- tions made by the enrolled actuary fairly present, in all material respects,the requirements of the law. The law also requires that we make a determination as to the amount, if any, by which the annual federal payment is to be reduced. A reduction in the federal payment would amount to l-1/2 percent for each whole tenth of a percentage point by which the disability retirement rate is greater than eight-tenths of 1 percentagepoint. We have reviewed the enclosedreport from the actuary, which shows that 114 police officers and 21 firefighters who were hired before Feb- ruary 16, 1980, retired on disability in 1989. We did not verify to source documents the information on disability retirements and employment strength provided by District officials. On January 1,1989, there were 888 active firefighters and 2,719 active police officers who had been hired before February X,1980, In his report, the actuary noted, and we agree,that the recent act did not clearly specify whether the 114 retired police officers should be excluded from the denominator in calculating the disability retirement rate. He therefore calculated two separate rates-one that included these police officers in the denominator and one that excluded them (0.682 percent and 0.601 percent, respectively). Since both rates are less than 0.8 percent, no reduction is required in the fiscal year 1991 payment to the District’s police and firefighters’ retire- ment fund. We did not consider it necessaryto resolve the matter of whether the 114 retired police officers should be included in or excluded from the denominator since there is no effect on future calculations and, for 1989, both disability retirement rates are less than the trigger mechanism. In our opinion, the determination made by the enrolled actuary meets, in all material respects,the requirements of the law. Page 3 GAO/GGD-90-70 RetirementRefonn Act I 4 3 E208412 We are sending a copy of this report to the District of Columbia Retire- ment Board. Copieswill be made available to other interested parties upon request. Larry Endy, Assistant Director, Federal Human ResourceManagement Issues,was the principal contributor to this report. If you or your staffs have any questions, please call me on 2766074. Bernard L. Ungar Director, Federal Human Resource Management Issues Page 4 GAO/GGDW70 Retirement Reform Act . Page 5 GAO/GGDo-?O Retirement Reform Act App&dix A&uary’s Report WILLIAM M. MmCER turto MEIDINGER HANSEN v/IYP - Thomas B. Lowman, F.S.A./Prmclpal February 21, 1990 Hand Delivered Ms. Carolyn Smith Chairperson DC Retirement Board 1025 Vermont Avenue, N.W., Suite 1030 Washington, DC 20005 Dear Ms. Smith: Disability Retirement Rate for 1989 Calendar Year District of Columbia Police Officers and Firefighters’ Public Law 98-104 requires that the enrolled actuary determine the disability retirement rate and report on the disability retirement rate by March 1 of each year, with respect to the rate for the preceding calendar year. The following employee data and disability retirement data was made available to me by the D.C. Retirement Board and D.C. Policemen and Firemen Retirement Relief Board respectively: 1. Number of active police officers as of January 1, 1989, hired on or before February 14, 1980: l 2,719 (includes 114 police officers who retired on disability during 1989 as explained below.) a 2,605 (excludes 114 police officers who retired on disability during 1989 as explained below.) 2. Number of active firefighters as of January 1, 1989, hired on or before February 14, 1980: 888 3. Numbers of 1989 disability retirements among employees hired on or before February 14, 1980: 21 (21 firefighters, excludes 114 police officers as explained below): Section 139 of Title I - Districiof Columbia Appropriation Act, 1989 (P.L 100-462) allowed up to 118 officers and members of the Metropolitan Police Department who were hired prior to February 14, 1980 to retire on disability before the end of calendar year 1989 without including them in the computation of the rate of disability retirement pursuant to subsection 145(a)of the District of Columbia Reform Act (disability trigger). Based on the provisions of this Act, all one hundred and fourteen (114) police officers who were hired prior to February 14, 1980 and retired during the 1989 calendar year are eligible for exclusion from the disability ratio calculation. The Act did not specify clearly Page 6 GAO/GGD-90-70 Retirement l&form Act . Appendix Actuary’s Report MEKER MEIDINGER HANSEN Ms. Carolyn Smith February 27, 1990 Page 4 whether these disabled retirees should be excluded from the denominator of the calculation. As a result, we have done two separate calculations for the disability retirement rates, one by including these disabled retirees in the denominator and the other by excluding them from the denominator. Based on the data provided to us. the disability retirement rate for 1989 as defined in Public Law 98-104 amending subsection 145(a) paragraphs (1) and (2) of the District of Columbia Retirement Reform Act, after excluding 114 police officers who retired on special disability provisions from the denominator of the calculation, is 0.601%. If these disabled retirees are included in the denominator, the disability retirement ratio will decrease to 0.582%. The disability retirement rates calculated above are not greater than 0.8%, i.e. eight-tenths of a percentage point. Sincerely, -72 7- ThomasGan, F.S.A. Principal TL/plm Enclosure cc: Mr. William Stanton Mr. Larry H. Endy Mr. Jorge Morales Mr. Charles Bowsher (B66424) Page 7 GAO/GGD-fW70 Retirement Reform Act - ---_ ^.-I._I ,....I..rl-, _,” “,, .I..,_I ;.,-” _. ..I. ...- ..-- ..-.----.~_---.--___~ - _._-- ; .-..--.._“._ __..” ._........_.-_ I-.-._--.--.-._..I_._- -.___._ I.- ----__ -- ltt~~at~4.s for c.tJlJiw of t;Ao relJtJrt,s shooltl lw wnt Lo: 1J.S. (it*t~t~r;ll AcuJulrt,ing Offi~ I’osl Offiw 130x (iO15 Gaitht*rsburg, Maryla~Jtl 20877 ‘I’twre is il %5”0tlist~outil, 011orths for 100 or more copit niailwl t.0 it singIt& ;uitlwss. First-<Jlass Mail Postage & I’tws Paid GAO I’carrnit, No. G 100 .-.” _.....lllll”l- ._...--. --~-.-___---~-
District's Workforce: Annual Report Required by the District of Columbia Retirement Reform Act
Published by the Government Accountability Office on 1990-04-04.
Below is a raw (and likely hideous) rendition of the original report. (PDF)