Committee Hearing, December 11, 2003

COUNCIL OF THE CITY OF PHILADELPHIA PUBLIC HEARING COMMITTEE ON LABOR AND CIVIL SERVICE - - - - Room 696, City Hall Philadelphia, Pennsylvania Thursday, December 11, 2003 9:00 a.m. - - - - BILL 030827 - An Ordinance amending Title of The Philadelphia Code, entitled "Public 10 Employees Retirement Code," by amending Section 22-305 relating to maximum benefit 11 limitations imposed by the Internal Revenue Code. 12 13 14 PRESENT: 15 COUNCILMAN DARRELL CLARKE, Chair COUNCIL PRESIDENT VERNA 16 COUNCILMAN FRANK DICICCO COUNCILWOMAN DONNA REED MILLER 17 COUNCILMAN FRANK RIZZO 18 19 20 - - - - 21 22 V A R A L L O Incorporated Litigation Support Services Eleven Penn Center 1835 Market Street, Suite 600 Philadelphia, Pennsylvania 19103 215.561.2220 215.567.2670 I N D E X BILL 030827 GWENDOLYN BELL, Board of Pensions and Retirement........................ 3 12/11/03 - LABOR & CIVIL SERVICE - BILL 030827

Good morning. May the Clerk please read the title of the bill.

Bill No. 0308277, an ordinance amending Title of the 7 Philadelphia Code, entitled "Public Employees 8 Retirement Code," by amending section 22-305 9 related to maximum benefit limitations imposed 10 by the Internal Revenue code. 11

Thank you. 12 May the record note that Council 13 President Verna, Councilwoman Miller, 14 Councilman DiCicco, Councilman Rizzo are 15 present. 16 I'd like to call to the witness 17 stand Ms. Gwendolyn Bell from the Board of 18 Pensions and Mr. Evan Meyer from the Law 19 Department. 20 Please state your name for the 21 record. 22

Good morning, Honorable Members of the City Council. My name is Gwendolyn Bell. I'm the Executive Director of the Board of Pensions and Retirement. 4 12/11/03 - LABOR & CIVIL SERVICE - BILL 030827

Do you have any testimony?

Yes. With me today is Evan Meyer from the City's solicitors Office. I'm asking approval for Bill 030827, amending Title 22, Section 22-305 of the Retirement Code. On March 29, 2002, the Board of Pensions and Retirement requested a Determination Letter from the IRS which would have given us tax qualified status under the IRS regulations. The Determination Letter is a process developed by the IRS that formally a fund can request approval to seek the Determination Letter which would mean that we would meet all of the requirements of the IRS and also meet the requirements for tax qualification, meaning that some of the DROP plans and the fact that the service connected disabilities are tax exempt would be met. On August 6, 2003, a favorable determination was received from the IRS with the provision that we have the Retirement Code 5 12/11/03 - LABOR & CIVIL SERVICE - BILL 030827 amended to include an increase in the maximum actuarial benefit that a person could receive from $90,000 annually to $160,000. So we are here today to ask that the Code be amended. We are at the end of the 90-day period that the IRS required us to have this one particular request approved, and we would ask your favorable vote on this.

Thank you. Are there any questions of this witness by the Members?

Mr. Chairman. Ms. Bell, this is simply a technical amendment, is it not?

Yes, it is. It does not change the nature of the plan, the way that we administer it or the operations or any other part of the plan.

Thank you.

Thank you. Mr. Meyer.

I really have no 25 testimony. I'm happy to answer any questions. 6 12/11/03 - LABOR & CIVIL SERVICE - BILL 030827

Please state your name for the record.

Evan Meyer, Senior Attorney for the Law Department. I have no prepared testimony. I'm happy to answer any questions about the legal ramifications of this bill if any Councilmembers have any.

Thank you. Are there any questions of either of the witnesses by Members of the Committee? (No response.)

There being none, we will now move into the public meeting. - - - - 7 COUNCIL OF THE CITY OF PHILADELPHIA PUBLIC MEETING COMMITTEE ON LABOR AND CIVIL SERVICE - - - - THURSDAY, December 11, 2003 - - - - Public meeting conducted by the Committee on Labor and Civil Service, held in Room 696, City Hall, Philadelphia, Pennsylvania, on the above date, to consider action on the following: BILL 030827. PRESENT: COUNCILMAN DARRELL CLARKE, Chair COUNCIL PRESIDENT VERNA COUNCILMAN FRANK DICICCO COUNCILWOMAN DONNA REED MILLER COUNCILMAN FRANK RIZZO 8 12/11/03 - LABOR & CIVIL SERVICE - PUBLIC MEETING

Councilman DiCicco. Can I call for a motion on Bill No. 4 030827.

Thank you, Mr. Chairman. I move that Bill No. 030827 be reported out of this Committee with favorable recommendation, and a further recommendation that the Rules of Council be suspended so as to permit first reading this day of the bill 11 just read into the record.

Second.

All those in favor? (Aye.)

All opposed? (No response.)

THE bill is approved. Bill 030827 will be reported out of Committee with favorable recommendation and request for a rules suspension as to be read at the next Session of Council. That concludes the public meeting. Thank you very much. (Council adjourned.) 9 C E R T I F I C A T I O N I HEREBY CERTIFY that the foregoing proceedings of the Council of the City of Philadelphia of December 11, 2003, were reported fully and accurately by me, and that this is a correct transcript of the same. RE: COMMITTEE ON LABOR AND CIVIL SERVICE _________________________ Lisa C. Bradley, RPR