HomeMy WebLinkAbout2007 02 05 300 Defined Benefit Pension Plan Document
COMMISSION WORKSHOP
ITEM 300
Regular
February 5, 2007
Workshop
MGR. /DEPT.
Authorization
REQUEST: City Manager requesting the City Commission review the Pension Attorney's
revision and update of the City of Winter Springs Defined Benefit Pension Plan document.
PURPOSE: This agenda item is needed for the City Commission to review the Pension Attorney's
revision and update of the City of Winter Springs Defined Benefit Pension Plan document.
CONSIDERATIONS:
On January 8, 2007 the Commission set this Special Workshop to review the revised and updated
Pension Plan document.
The Pension Attorney has completed the Final Draft of the revised and updated City of Winter Springs
Pension Plan document, with input and review from staff and the City Actuaries. The Pension Attorney
and City Actuary will be in attendance at this workshop.
As a reminder, the purpose of this revision and update was to eliminate unnecessary language and to
create a more concise and easy to read document. No substantive plan/benefit changes were made to the
document.
FUNDING: N/A.
RECOMMENDATION: Recommend the City Commission review the Pension Attorney's revision
and update to the City of Winter Springs Defined Benefit Pension Plan document.
ATTACHMENTS:
1. Final Draft of Updated and Revised Pension Plan Document as prepared by Pension Attorney..
COMMISSION ACTION:
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CITY OF WINTER SPRINGS RETIREMENT PLAN
The City of Winter Springs hereby establishes this Retirement Plan for City employees,
to be known as the City of Winter Springs Retirement Plan. This Retirement Plan restates and
supersedes the Defined Benefit Plan and Trust for Employees of the City of Winter Springs, as
adopted on March 23, 1998, restated on November 10, 2003, and subsequently amended. This
Retirement Plan shall take effect upon adoption by the City Commission.
SECTION I - DEFINITIONS
The following definitions shall apply throughout this Retirement Plan, unless a different
meaning is provided in a specific section or is clearly required by context.
1.01 "Actuarial Equivalent" means a means a benefit of equal value computed using
the 1983 Group Annuity Mortality Table, Male Rates, Set Back Two Years for Females, and an
interest rate of eight percent (8%) per annum for optional forms of benefit, and 5% per annum
for the purchase of credited service.
1.02 "Accrued Benefit" means a monthly annuity benefit accumulated as of any date,
determined in accordance with Section IV.
1.03 "Average Final Compensation" means a one-twelfth (ll1ih) of the arithmetic
average of annual compensation paid for the highest three (3) consecutive years of credited
service, or such shorter period if total credited service is less than three (3) consecutive years.
1.04 "Board" or "Board of Trustees" means the Board of Trustees as described in
Section VII.
1.05 "Beneficiary" means the person or persons entitled to receive benefits from the
Plan upon the death of a Member who has or have been designated in writing by the Member and
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filed with the Board. If no such designation is in effect, or if no person so designated is living, at
the time of death of the Member, the beneficiary shall be the estate of the Member.
1.06 "City" means the City of Winter Springs, Florida.
1.07 "Code" means the Internal Revenue Code of 1986, as amended.
1.08 "Compensation" means a Member's wages received for personal services
actually rendered in the course of employment with the City, as reported on the
member's W-2 form. .
1.09 "Credited Service" means the total number of years, and fractions thereof, of City
employment during which a Member meets the participation requirements of Section II, works at
least 1,000 hours per year, and makes the required Member contributions to the Plan. Credited
service also includes all years of service credited under the predecessor plan, and any service
purchased pursuant to Section 2.01(B) of the Predecessor Plan.
1.10 "Early Retirement Date" means the first day of any month on or after a Member
attains twenty-five (25) years of credited service prior to age fifty-five (55). A Member must be
an Employee at the time of retirement to be eligible for early retirement.
1.11 "Employee" means any Employee of the City, other than excluded employees as
described in Section 2.01(A). Individuals who perform services for the City in any capacity
other than as an Employee, determined pursuant to the books and records of the City (e.g.,
independent contractors or leased employees within the meaning of Code section 414(n), even if
such individuals are reclassified as employees by any governmental agency other than the City or
by judicial decision), are not Employees for purposes of the Plan, and thus, are not eligible to
participate in the Plan. Notwithstanding any other provision of this Plan, individuals who are
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employed by the City pursuant to an employment contract shall not be eligible to participate in
the Plan, unless their employment contract expressly provides for such participation.
1.12 "Fund" means the retirement fund established pursuant to this Plan.
1.13 "Member" means all Employees who participate in this Plan, vested terminated
members, and retirees.
1.14 "Normal Retirement Date" means the first day of any month on or after the earlier
of the date a Member attains age sixty-five (65), or attains age 55 with at least ten (10) years of
credited service.
1.15 "Plan Administrator" is the City Manager, unless the City Commission designates
another person or entity as Plan Administrator.
1.16 "Predecessor Plan" means the Defined Benefit Plan and Trust for Employees for
the City of Winter Springs, adopted by the City on March 23, 1998, as subsequently amended.
1.17 "Retiree" means any Member who receives benefits under the provisions of this
Plan.
1.18 "Retirement" or "retire" means a Member's separation from city employment with
eligibility for and actual receipt of benefits under this Plan.
1.19 "Retirement Committee" or "Committee" means the committee described 10
Section VII.
1.20 "Retirement Plan" or "Plan" means the City of Winter Springs Retirement Plan as
contained herein, and all amendments hereto.
1.21 "Vesting period" means the period of credited service required to obtain a non-
forfeitable right to receive a future benefit under the Plan, in accordance with Section V.
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SECTION II - PARTICIPATION
2.01 Eligibility. All Employees shall be eligible for membership III the Plan in
accordance with this Section II. Each Employee who is eligible to participate in this Plan shall
become a Member of the Plan on the first day of the month immediately following the date that
is six (6) months after the employment commencement date, if employed on that date.
"Employment commencement date" means the date on which the Member first performs work as
an Employee of the City.
(A) Excluded Employees:
(1) An Employee is excluded from participation in the Plan if the Employee's
customary weekly employment with the City is less than twenty-nine (29)
hours.
(2) If a Member becomes an excluded employee while working for the City,
then during the period such a Member is an excluded employee, the
Member will not accrue any benefits under the Plan. However, during
such period of exclusion, the Member, without regard to employment
classification, shall continue to receive credit for vesting under the Plan.
(3) If an excluded employee becomes eligible to participate in the Plan by
reason of a change in employment status or classification, the employee
will become a Member and begin to accrue benefits under the Plan upon
completion of six months of employment with the City from the
employment commencement date.
2.02 Participation upon Reemployment. A Member whose employment terminated
prior to October 1, 2000 will re-enter the Plan as a new Member on the date of reemployment. A
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Member whose employment terminates on or after October 1, 2000 shall become a Member of
the Plan upon the date of reemployment, and all credited service earned by such Member prior to
termination of employment shall be credited to the member upon reemployment.
2.03 Credited Service.
(A) A Member's credited service under the Plan shall consist of all periods of City
employment during which a Member meets the eligibility requirements of Section 2.01and
makes the required Member contributions to the Plan. Credited service also includes all years of
service credited under the Predecessor Plan, and any service purchased pursuant to this Section
II. All paid leave and approved leaves of absence of up to 12 weeks in any calendar year shall be
included in credited serviceif Member contributions are made for the leave period.
(B) A Member shall be eligible to purchase up to five (5) additional years of credited
service under the Plan for service in the uniformed services of the United States as provided in the
Uniformed Services Employment and Reemployment Rights Act of 1994 (28 U.S.c. SS 4301 et
seq.), as amended, provided that the Member:
(1) was employed by the City when he or she entered the uniformed services;
(2) is reemployed by the City within the time specified in the Act;
(3) leaves his or her Member contributions in the Plan during the period of
military service; and
(4) deposits into the fund within a period that does not exceed the period of
military service the Member contributions that would have been required to
have been made by the Member during the period of such service based on
the Members' city compensation prior to entering military service, for each
month of service purchased, together with interest equal to the overall rate of
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return on fund investments from the date of reemployment to the date of
deposit.
This subsection (B) is intended to comply with all applicable provisions of the Uniformed
Services Employment and Reemployment Rights Act of 1994 (28 U.S.c. ~~ 4301 et seq.), as
amended, and in the event of any conflict or inconsistency with the Act, the provisions of the Act
shall control.
(C) Employees with Non-Contributing Service under the Predecessor Plan. Any
Employee who completed years of service under the Predecessor Plan prior to the adoption of
Resolution No. 2003-44, but did not make contributions to the Predecessor Plan or to the Money
Purchase Plan for Employees of the City of Winter Springs, and did not receive years of accrual
service under the Predecessor Plan, shall receive credited service under this Plan upon payment
of the required Member contributions due under this Plan and the required member contributions
due under the Money Purchase Plan for such service.
(D) Credited Service shall also include prior service performed by the Member as an
employee of the federal government, any state or political subdivision thereof, or any agency or
instrumentality of any of the foregoing, other than the City, but only if all of the following
conditions are satisfied:
(1) the Member contributes to the Plan the full actuarial cost of such years of
prior service, as determined by the Plan actuary utilizing the definition of
actuarial equivalent in Section 1.01, in one lump sum payment prior to
receiving credit for such service;
(2) the Member's Accrued Benefit is either 100% nonforfeitable at the time
he makes the contribution described in subsection (A) (1) above or will
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become 100% Nonforfeitable immediately after receiving credit for such
prior service; and
(3) the crediting of such prior service must not cause the Member to receive a
retirement benefit for the same years of service under more than one
retirement plan.
SECTION III - CONTRIBUTIONS
3.01 Required Member Contributions. Each Member is required to contribute 3% of
Compensation to the Plan, which contribution shall be considered the required Member
contribution. The required Member contribution shall be deducted from each Member's
Compensation whenever such Compensation is paid, and remitted to the Fund. Required
Member contributions shall be considered an Employer "pick-up" contribution and shall be
designated as City contributions pursuant to Section 414(h) of the Internal Revenue Code,
contingent upon the contributions being excluded from the Member's gross income for federal
income tax purposes. For all other purposes of this Plan, such contributions shall be considered
Member contributions.
3.02 100% Vesting of Required Member Contributions. Each Member is immediately
100% vested with respect to required member contributions. A Member is entitled to receive a
refund of required member contributions to the Money Purchase Plan made prior to October 1,
2000, upon separation from City employment, together with simple interest at a rate equal to the
interest rate on 30-year Treasury securities as published in the Internal Revenue Bulletin
determined as of the calendar month preceding the first day of the Plan year, if available, and if
not, a rate equal to the U.S. Treasury Department long-term average rate published on the last
day of the calendar month preceding the first day of the Plan year, or such other rate that may be
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approved by the V.S. Treasury Department to replace the 30-year Treasury bond rate as a
benchmark for calculating lump sum payouts from defined benefit plans. Any refund received
by a Member pursuant to the preceding sentence shall reduce the accrued benefit payable, if any,
at the Normal Retirement Date. Required Member contributions contributed on and after
October I, 2000 are 100% vested and shall be included in the accrued benefit payable to the
Member upon the Early Retirement Date or Normal Retirement Date.
3.03 Member Account Balance Transferred from Money Purchase Pension Plan to
Predecessor Plan. A Member's account balance transferred from the Money Purchase Pension
Plan and Trust for Members of the City of Winter Springs to the Predecessor Plan pursuant to
Resolution No. 2003-44, shall become an integral part of this Fund; provided that such account
balance, plus interest at a rate equal to the interest rate on 30-year Treasury securities as
published in the Internal Revenue Bulletin determined as of the calendar month preceding the
first day of the Plan year, if available, and if not, a rate equal to the V.S. Treasury Department
long-term average rate published on the last day of the calendar month preceding the first day of
the Plan year, or such other rate that may be approved by the U.S. Treasury Department to
replace the 30-year Treasury bond rate as a benchmark for calculating lump sum payouts from
defined benefit plans, shall be part of the accrued benefit payable to a Member upon normal
retirement, except as reduced in accordance with Section 3.03.
3.04 City contributions: The city shall annually contribute an amount which, when
added to the Members' contributions, will be sufficient to fund the plan on a sound actuarial
basis. For the Plan years beginning on the following dates, City contributions shall be as follows
unless the plan actuary determines that a different contribution is required:
October I, 2005:
Eleven percent (11 %) of covered payroll
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October 1, 2006:
October 1,2007:
Twelve and one-half percent (12.5%) of covered payroll.
Thirteen percent (13%) of covered payroll.
SECTION IV - BENEFITS
4.01 Normal Retirement
(A) Eligibility for Normal Retirement. A Member who is actively employed by the
City at the Normal Retirement Date may retire with an unreduced benefit at any time thereafter
and the benefit shall be calculated based on the Member's credited service and average final
compensation at the date of separation from employment.
(B) Normal Retirement Benefit:
(1) Benefit Formula
(a) A Member's monthly normal retirement benefit equals 2% of the
Member's average final compensation multiplied by years of credited
service for service prior to October 1, 2000, and 3% of the Member's
average final compensation multiplied by years of credited service for
service on and after. October 1, 2000. Such pension will be adjusted in
accordance with Section V. The maximum number of years of credited
service taken into account in calculating the normal retirement benefit is
thirty (30), counting forward from the date of initial participation and
including any purchased past service.
(b) Notwithstanding any provision of subparagraph (a) to the contrary, a
Member who separates from City employment after attaining the Normal
Retirement Date and retires on or after October 1, 2005, shall receive a
benefit multiplier for service prior to October 1, 2000 as set forth below:
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Multiplier for Service
Prior to October 1. 2000
Date of
Retirement on or After
October 1,2005
2.25%
October 1, 2006
2.50%
October 1, 2007
2.75%
October 1, 2008
3.00%
(c) A Member's normal retirement pension shall be calculated by applying the
multiplier for service prior to October 1, 2000 that is in effect on the date of the Member's
separation from service.
(C) Standard Form of Benefit. The Normal Retirement Benefit shall be computed in
the form of a straight life annuity. The Member, or in the event of the member's death prior to
commencement of normal retirement benefits, early retirement benefits, or deferred vested
benefits, the Member's beneficiary, may select an optional form of distribution in accordance
with Section 4.04.
4.02 Delayed Normal Retirement. A benefit commencing after age sixty-five (65) is
the Actuarial Equivalent of the Member's accrued benefit payable as ofthe later of age sixty-five
(65) or the last day of the prior Plan Year. A Member continues to accrue benefits after age
sixty-five (65) if the Member's Accrued Benefit would increase because of additional credited
service or compensation. A Member's accrued benefit as of the end of each Plan Year following
age sixty-five (65) is the greater of: (1) the normal retirement benefit determined under the Plan,
taking into account credited service and compensation earned after age sixty-five (65); or (2) the
accrued benefit, determined as of the later of age sixty-five (65) or the end of the prior Plan Year,
actuarially adjusted for delayed retirement.
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4.03 Early Retirement.
(A) A Member who separates from City employment after completing twenty-five
(25)years of credited service prior to age fifty-five (55) may elect to receive an early retirement
benefit.
(B) The early retirement benefit shall be calculated in the same manner as the normal
retirement benefit, except that the benefit shall be based on average final compensation and
credited service as of the early retirement date, and shall be reduced by the actuarial equivalent
of what would have been payable at age fifty-five (55) unreduced.
(C) If the present value of the Member's early retirement benefit does not exceed
$1,000, the benefit will automatically be paid in a lump sum, as soon as administratively
practicable after the Member's separation from employment or, if later, after the Member
satisfies the eligibility requirements for an early retirement benefit. If the present value of the
Member's early retirement benefit is greater than $1,000 but does not exceed $3,500, upon
receipt of the Member's written election to receive a lump sum distribution, the early retirement
benefit shall be paid in a lump sum, as soon as administratively practicable after the Member's
separation from employment or, if later, after the Member satisfies the eligibility requirements
for an early retirement benefit.
(D) If the present value of the Member's early retirement benefit exceeds $3,500, the
benefit shall be paid in the form and as of the date elected by the Member in accordance with the
Plan. A Member may elect to commence his early retirement pension as of the first day of any
month during the period he is eligible for the early retirement pension and after he has separated
from employment. If the Member fails to designate a distribution date, then the early retirement
benefit shall be paid in accordance with this Section IV.
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4.04 Optional Forms of Distribution. Any form of payment under this Section 4.04
must satisfy the mandatory distribution requirements of Section 4.06 and must be the Actuarial
Equivalent of the Member's accrued benefit. The optional forms of distribution are:
(A) Installments. Payment in monthly, quarterly or annual installments over the life
expectancy of the Member, or the joint life and last survivor expectancy of the Member and his
or her designated beneficiary.
(B) Life Annuity. A straight life annuity, payable no less frequently than annually,
with payment of the Member's accrued benefit ending on the Member's death.
(C) Life Annuity with Term Certain. A life annuity, payable no less frequently than
annually, with a term certain guaranteed. The term certain cannot exceed the Member's life
expectancy, or the joint life and last survivor expectancy of the Member and his or her
designated beneficiary. If a Member dies before the guaranteed number of payments has been
made, the Member's designated beneficiary shall receive the same monthly payments for the
remainder of the guaranteed period.
(D) Joint and Survivor Annuity. A joint life annuity payable for the life of the
Member, with a survivor annuity payable for the remaining life of a designated beneficiary
which is a specified percentage ( 50%, 75% or 100%) of the annuity payable during the
Member's life.
4.05 If a Member elects a benefit in accordance with Section 4.04 in a form other than
a life annuity, the benefit paid may not exceed the Actuarial Equivalent of the maximum annual
benefit payable as a straight life annuity.
4.06 Deferred Vested Benefit.
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(A) A vested Member who separates from City employment prior to the Normal
Retirement Date and prior to eligibility for early retirement benefits, for any reason other than
death, shall receive a deferred vested benefit equal to the accrued benefit payable at age sixty-
five (65).
(B) If the present value of the Member's deferred vested pension does not exceed
$1,000, the deferred vested benefit will be paid in lump sum, as soon as administratively
practicable following the Member's Separation from Service. If the present value of the
Member's deferred vested benefit is greater than $1,000 but does not exceed $3,500, upon receipt
of the Member's written election to receive a lump sum distribution, the deferred vested benefit
shall be paid in a lump sum as soon as administratively practicable after the Member's separation
from Employment. In no event may the distribution occur later than the 60th day following the
close of the plan year in which the Member attains age sixty-five (65).
(C) If the present value of the Member's deferred vested benefit exceeds $3,500, the
deferred vested benefit shall be paid in the form elected by the Member in accordance with the
Plan. A Member may elect to commence the deferred vested benefit beyond age sixty-five (65),
but in no event shall the deferred vested benefit commence later than the latest date allowed for
distribution provided in section 401(a)(9) of the Internal Revenue Code, and regulations
promulgated thereunder. If the Member fails to elect a distribution date, then payment of the
deferred vested benefit shall commence no later than the 60th day following the close of the plan
year in which the Member attains age sixty-five (65).
4.07 Notwithstanding any provision of the Plan, the Plan shall at all times comply with
the minimum distribution requirements of Internal Revenue Code section 40 1 (a)(9), and
regulations promulgated thereunder.
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SECTION V - VESTING
5.01 Vesting Schedule. A Member shall become vested in the Plan after attaining
three (3) years of credited service, as follows:
Years of Credited Service
Vested Percentage
Less than 3 ................................................ None
3 ................................................................ 20%
4 ................................................................ 40%
5 ................................................................ 60%
6 ................................................................ 80%
7 or more .................................................. 100%
5.02 100% Vesting Upon Certain Events. A Member's Accrued Benefit is 100%
nonforfeitable upon attaining Normal Retirement Age (if employed on that date), or if the
Member separates from City employment as the result of death, disability or eligibility for an
early retirement benefit.
SECTION VI - DEATH BENEFIT
6.01 Death benefit prior to retirement.
(A) If a Member dies prior to commencement of normal retirement benefits, early
retirement benefits, or deferred vested benefits, the Member's beneficiary shall receive a death
benefit equal to the present value of the Member's nonforfeitable accrued benefit.
(B) If the present value of the Member's nonforfeitable accrued benefit is $3,500 or
less, the benefit shall be paid in a lump sum payment.
(C) If the present value of the Member's nonforfeitable accrued benefit exceeds
$3,500, the Member's beneficiary shall receive said benefit in the form of an annuity selected by
the beneficiary in accordance with Section 4.04, with payments commencing as directed by the
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beneficiary, and in the absence of any such direction, no later than the date the Member would
have attained age sixty-five (65).
SECTION VII - ADMINISTRATION
7.01 The ultimate responsibility for the Plan shall be vested in a Board of Trustees,
which shall be the City Commission.
7.02 The City Manager shall act as the Plan Administrator, in accordance with direction
from the Board, unless the Board designates another person or entity as Plan Administrator. The
City Manager shall be responsible for all records, files, and documents relating to the Plan.
7.03 To the extent possible, the accounts and records of the Plan shall be integrated with
the operations of the City government.
7.04 The City Finance Director shall be the treasurer of the Fund and shall be the official
custodian of all cash and securities and books and accounts of the Fund. He/she shall receive all
monies and securities for the account of the Fund, deposit such monies and make payments for the
purposes specified in this Plan, in accordance with direction from the Board.
7.05 The City may retain an attorney to serve as legal advisor to the Plan, and shall
engage such actuarial, administrative, medical, and other professional services as may be required in
the operation of the Fund and to effectuate the purposes of this Plan.
7.06 All costs and expenses incurred in the administration of the Fund shall be charged to
and, with the Board's approval, paid by the Fund.
7.07 Proper and adequate records and accounts shall be established and maintained which
will give full effect to the requirements of this Plan.
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7.08 An annual audit of books, accounts and records of the fund shall be made by a
certified public accountant selected by the Board. In conjunction with the audit, an annual report
shall be prepared by the Finance Director as of the close of each fiscal year for submission to the
Board, showing the assets and liabilities of the fund at the end of such year, the income and
expenditures for the year, and other data pertinent to the operation of the Fund. A synopsis of such
report may be prepared for distribution to the Members of the Fund.
7.09 The Board shall carry out the duties set forth in this Plan in accordance with its
terms. The Board may adopt such rules as the Board determines to be reasonable and prudent for
the administration of the Plan.
7.0 lOA Retirement Committee shall be established to provide advice and
recommendations to the Board in accordance with Section 7.11, below. The Retirement
Committee shall consist of nine (9) members, and staff, as follows:
OPTION A
(A) Six voting members who shall be residents of the City appointed by the City
Commission, and who shall serve at the pleasure of the City Commission.
(B) Three nonvoting members who shall be non-management Employees elected by a
majority of Members in each of the following categories:
I. Police Department.
2. Fire Department.
3. General Services.
Each elected Employee member shall serve for a term of two (2) years, and an elected
member may be re-elected one time.
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(C) The City Manager, Finance Director and General Services Director shall serve as
administrative support for the Retirement Committee.
7.11 The Retirement Committee shall meet on not less than a quarterly basis at such
times as are convenient to a majority of Retirement Committee members. The Retirement
Committee shall review financial and investment reports on the Fund, evaluate the performance
of investment managers, and make recommendations to the Board concerning the Fund's
investment strategy, investment policy, investment managers, advisors and consultants. The
Retirement Committee shall also review all proposals for revising Plan benefits, evaluate the
short-term and long-term cost of such proposals, identify options for funding such proposals, and
make recommendations to the City Commission regarding such proposals. In addition, the
Retirement Committee shall review the benefit structure of the Plan once every five years
commencing in 2012 to: evaluate whether Plan benefits are commensurate with the City's goal
of recruiting and retaining qualified employees; identify proposed benefit revisions that would
enhance the City's ability to recruit and retain qualified employees; evaluate the short-term and
long-term cost of such proposals; identify options for funding such proposals; and make
recommendations to the City Commission regarding such proposals.
OPTION B
(A) Six voting members who shall be residents of the City appointed by the City
Commission, and who shall serve at the pleasure of the City Commission.
(B) Three nonvoting members who shall be non-management Employees elected by a
majority of Members in each of the following categories:
I. Police Department.
2. Fire Department.
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3. General Services.
Each elected Employee member shall serve for a term of two (2) years, and an elected
member may be re-elected one time.
(C) The City Manager, Finance Director and General Services Director shall serve as
administrative support for the Retirement Committee.
7.12 The Retirement Committee shall meet on not less than a quarterly basis at such
times as are convenient to a majority of Retirement Committee members. The Retirement
Committee shall also review all proposals for revising Plan benefits, evaluate the short-term and
long-term cost of such proposals, identify options for funding such proposals, and make
recommendations to the City Commission regarding such proposals. In addition, the Retirement
Committee shall review the benefit structure of the Plan once every five years commencing in
2012 to: evaluate whether Plan benefits are commensurate with the City's goal of recruiting and
retaining qualified employees; identify proposed benefit revisions that would enhance the City's
ability to recruit and retain qualified employees; evaluate the short-term and long-term cost of
such proposals; identify options for funding such proposals; and make recommendations to the
City Commission regarding such proposals.
SECTION VIII - INVESTMENTS
8.01 The Board shall be responsible for the investment of any assets in the Fund not
needed for the fund's current obligations, and may invest such assets in accordance with a written
investment policy adopted by the Board pursuant to Section 7.02, below. Board members and
other fiduciaries of the Plan must discharge their duties with respect to the Plan solely in the
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interest of the Members and beneficiaries and for the exclusive purpose of: (i) providing benefits to
Members and their beneficiaries; and (ii) defraying reasonable expenses of administering the Plan;
with the care, skill, prudence, and diligence under the circumstances then prevailing that a prudent
person acting in a like capacity and familiar with such matters would use in the conduct of an
enterprise of a like character and with like aims; by diversifying the investments of the Plan so as to
minimize the risk of large losses, unless under the circumstances it is clearly prudent not to do so.
8.02 The Board shall adopt and periodically update a written investment policy In
accordance with Section 112.661, Florida Statutes, as such statute may be amended in the future.
Within the limitations of the foregoing standards and investment policy, the Board is authorized
to acquire and retain in the fund every kind of investment specifically including, but not limited
to stocks, bonds, securities, debentures, real estate, mutual funds, trusts and other obligations
which persons of prudence, discretion and intelligence acquire or retain for their own account.
8.03 In carrying out its investment duties, the Board shall engage such custodial,
investment management and other professional consultants as are required by law and as the
Board deems necessary and prudent.
SECTION IX - MISCELLANEOUS
9.01 Nonassignability. Benefits under this Plan shall not be subject to execution,
garnishment, attachment, or any other process of any court with respect to a payee under the
Plan, except for qualified domestic relations orders issued by a court of competent jurisdiction
pursuant to section 222.21, Florida Statutes, or an income deduction order as provided in section
61.1301, Florida Statutes.
9.02 Plan Amendments. This Plan may be amended at any time by the Board;
provided that no amendment shall reduce the accrued benefit of any Member at the time of the
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amendment. Amendments shall apply prospectively, unless the amendment expressly provides
for retroactive application. A Member who separates from City employment shall be entitled to
those benefits in effect at the time of separation, unless a subsequent amendment expressly
provides otherwise.
9.03 Repeal or termination of the Plan. The City has the right, at any time, to suspend
or discontinue its contributions under the Plan, and to terminate this Plan; provided, upon full or
partial termination of the Plan, an affected Member's right to his or her accrued benefit is 100%
nonforfeitable, irrespective of the nonforfeitable percentage which otherwise would apply under
this Plan. If this ordinance shall be repealed, or if contributions to the System are discontinued
or if there is a transfer, merger or consolidation of government units, services or functions as
provided in Chapter 121, Florida Statutes, the Board shall continue to administer the System in
accordance with the provisions of this ordinance, for the sole benefit of the then Members, any
Beneficiaries then receiving retirement allowances, and any future persons entitled to receive
benefits under one of the options provided for in this ordinance who are designated by any of
said Members. In the event of repeal, discontinuance of contributions, or transfer, merger or
consolidation of government units, services or functions, there shall be full vesting (100%) of
benefits accrued to date of repeal, and the assets of the System shall be allocated in an equitable
manner to provide benefits on a proportionate basis to the persons so entitled as set forth herein.
The following shall be the order of priority for purposes of allocating the assets of the Plan as of
the date of repeal of this ordinance, or if contributions to the System are discontinued with the
date of such discontinuation being determined by the Board.
(A) Apportionment shall first be made in respect of each Retiree who is receiving a
benefit from the Plan on such date, each person receiving a benefit on such date
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on account of a retired or deceased Member, and each Member who has, by such
date, become eligible for normal retirement but has not yet retired, an amount
which is the Actuarial Equivalent of such benefit; provided that, if the asset value
of the Plan is less than the aggregate of such amounts, such amounts shall be
proportionately reduced so that the aggregate of such reduced amounts will be
equal to such asset value.
(B) If there be any asset value remaining after the apportionment under subsection
(A), apportionment shall next be made in respect of each Member in the service
of the City on such date who is vested and who is not entitled to an apportionment
under subsection (A), in the amount required to provide the Actuarial Equivalent
of the vested portion of the accrued benefit, based on the Member's credited
service and average final compensation as of such date, and each vested former
Member then entitled to a deferred benefit who has not, by such date, begun
receiving benefit payments, in the amount required to provide said Actuarial
Equivalent of the vested portion of the accrued benefit; provided that, if the asset
value of the Plan is less than the aggregate of such amounts, such amounts shall
be proportionately reduced so that the aggregate of such reduced amounts will be
equal to such asset value.
(C) If there be any asset value after the apportionments under subsections (A) and (B),
apportionment shall be made in respect of each Member in the service of the City
on such date who is not entitled to an apportionment under subsection (A) or (B),
in an amount equal to Member's accrued benefit; provided that, if the asset value
of the Plan is less than the aggregate of such amounts, such amounts shall be
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proportionately reduced so that the aggregate of such reduced amounts will be
equal to such asset value.
(D) If there be any asset value remaining after the apportionments under subsection
(A), (B), and (C), apportionment shall lastly be made in respect of each Member
included in subsection (C) to the extent of the Actuarial Equivalent of the non-
vested portion of the accrued benefit, less any amount apportioned in subsection
(C), based on the Member's credited service and average final compensation as of
such date; provided that, if the asset value of the Plan is less than the aggregate of
such amounts, such amounts shall be proportionately reduced so that the
aggregate of such reduced amounts will be equal to such asset value.
(E) In the event there is any asset value remaining in the Fund after the full
apportionment specified in subsections (A), (B), (C), and (D), such excess shall be
returned to the City.
(F) The allocation of the Fund provided for in this subsection may, as decided by the
Board, be carried out through the purchase of insurance company contracts to
provide the benefits determined in accordance with this subsection. The Fund
may be distributed in one sum to the persons entitled to said benefits or the
distribution may be carried out in such other equitable manner as the Board may
direct. The Fund may be continued in existence for purposes of subsequent
distributions.
9.04 Direct Transfers of Eligible Rollover Distributions.
(A) General. Notwithstanding any provision of the Plan to the contrary that would
otherwise limit a distributee's election under this section, a distributee may elect, at the time and
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III the manner prescribed by the Committee, to have any portion of an eligible rollover
distribution paid directly to an eligible retirement plan specified by the distribute in a direct
rollover.
(B) Definitions.
(1) "Eligible rollover distribution" is any distribution of all or any portion of
the balance to the credit of the distributee, except that an eligible rollover
distribution does not include: any distribution that is one of a series of
substantially equal periodic payments (not less frequently than annually)
made for the life (or life expectancy) of the distribute or the joint lives (or
joint life expectancies) of the distribute and the distributee's designated
Beneficiary, or for a specified period often years or more; any distribution
to the extent such distribution is required under section 401(a)(9) of the
Code; and the portion of any distribution that is not includible in gross
income. Any portion of any distribution which would be includible in
gross income will be an eligible rollover distribution if the distribution is
made to an individual retirement account described in section 408(a), to an
individual retirement annuity described in section 408(b) or to a qualified
defined contribution plan described in section 401(a) or 403(a) that agrees
to separately account for amounts so transferred, including separately
accounting for the portion of such distribution which is not so includible.
(2) "Eligible retirement plan" is an individual retirement account described in
section 408(a) of the Code, an individual retirement annuity described in
section 408(b) of the Code, an annuity plan described in section 403(a) of
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the Code, an eligible deferred compensation plan described in section
457(b) of the Code which is maintained by an eligible City described in
section 457(e)(1)(A) of the Code and which agrees to separately account
for amounts transferred into such plan from this Plan, an annuity contract
described in section 403(b) of the Code, or a qualified trust described in
section 401(a) of the Code, that accepts the distributee's eligible rollover
distribution. This definition shall also apply in the case of an eligible
rollover distribution to the surviving spouse.
(3) "Distributee" includes a Member or former Member. In addition, the
Member's or former Member's surviving spouse is a distributee with
regard to the interest of the spouse.
(4) "Direct rollover" is a payment by the Plan to the eligible retirement plan
specified by the distributee.
(C) Rollovers or Transfers into the Fund. The fund will accept Member rollover cash
contributions and/or direct rollovers of distributions for the purchase of permissive service credit
under the Plan, as follows:
(1) Direct Rollovers or Member Rollover Contributions from Other Plans.
The Plan will accept either a direct rollover of an eligible rollover
distribution or a Member contribution of an eligible rollover distribution
from a qualified plan described in section 403(a) of the Code, from an
annuity contract described in section 403(b) of the Code, or from an
eligible plan under section 457(b) of the Code, which is maintained by a
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state, political subdivision of a state, or any agency or instrumentality of a
state or political subdivision of a state.
(2) Member Rollover Contributions from 401(a) Plans and lRAs. The Plan
will accept a Member rollover contribution of the portion of a distribution
from qualified plan described in section 401(a) of the Code, or from an
individual retirement account or annuity described in section 408(a) or
408(b) of the Code, that is eligible to be rolled over and would otherwise
be includible in the Member's gross income.
9.05 Maximum benefit limits.
(A) Basic Limitation.
(1) Subject to the adjustments hereinafter set forth, the maximum amount of
annual retirement income payable with respect to a Member under this
System shall not exceed one hundred sixty thousand dollars ($160,000).
(2) For purposes of applying the above limitation, benefits payable in any
form other than a straight life annuity with no ancillary benefits shall be
adjusted, as provided by Treasury Regulations, so that such benefits are
the Actuarial Equivalent of a straight life annuity. For purposes of this
Section, the following benefits shall not be taken into account:
(a) Any ancillary benefit which is not directly related to retirement
income benefits;
(b) Any other benefit not required under S415(b )(2) of the Code and
Regulations thereunder to be taken into account for purposes of the
limitation of S415(b)(1) of the Code.
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(B) Participation in Other Defined Benefit Plans.
The limitation of this Section with respect to any Member who at any time has been a
member in any other defined benefit plan (as defined in 94140) of the Code) maintained by the
City shall apply as if the total benefits payable under all defined benefit plans in which the
Member has been a member were payable from one plan.
(C) Adiustments in Limitations.
(1) In the event the Member's retirement benefits become payable before age sixty-
two (62), the one hundred sixty thousand dollar ($160,000) limitation prescribed
by this Section shall be reduced in accordance with Regulations issued by the
Secretary of the Treasury pursuant to the provisions of 9415(b) of the Code, so
that such limitation (as so reduced) equals an annual benefit (beginning when
such retirement income benefit begins) which is equivalent to a one hundred sixty
thousand dollar ($160,000) annual benefit beginning at age sixty-two (62).
(2) In the event the Member's benefit is based on at least fifteen (15) years of credited
service, the adjustments provided for in A. above shall not apply.
(3) The reductions provided for in subsection (A) (1), above, shall not be applicable
to pre-retirement death benefits.
(4) If the Member's retirement benefit becomes payable after age sixty-five (65), for
purposes of determining whether this benefit meets the limitation set forth in
subsection (A) herein, such benefit shall be adjusted so that it is actuarially
equivalent to the benefit beginning at age sixty-five (65). This adjustment shall
be made using an assumed interest rate of five percent (5%) and shall be made in
accordance with regulations promulgated by the Secretary of the Treasury or his
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delegate.
(D) Less than Ten (10) Years of Service.
The maximum retirement benefits payable under this Section to any Member who has
completed less than ten (10) years of credited service shall be the amount determined under
subsection (A) of this Section multiplied by a fraction, the numerator of which is the number of
the Member's years of Credited Service and the denominator of which is ten (10). The reduction
provided for in this subsection shall not be applicable to pre-retirement death benefits.
(E) Ten Thousand Dollar ($10.000) Limit.
Notwithstanding the foregoing, the retirement benefit payable with respect to a Member
shall be deemed not to exceed the limitations set forth in this Section if the benefits payable, with
respect to such Member under this System and under all other qualified defined benefit pension
plans to which the City contributes, do not exceed ten thousand dollars ($10,000) for the
applicable plan year and for any prior plan year and the City has not at any time maintained a
qualified defined contribution plan in which the Member participated.
(F) Cost-of-Living Adjustments.
The limitations as stated in subsections (A), (B), and (C) herein shall be adjusted to the
time payment of a benefit begins in accordance with any cost-of-living adjustments prescribed
by the Secretary of the Treasury pursuant to 9415( d) of the Code.
(G) Additional Limitation on Pension Benefits.
Notwithstanding anything herein to the contrary:
(1) The normal retirement benefit or pension payable to a Retiree shall not exceed
100 one hundred percent (100%) of his Average Final Compensation. However,
nothing contained in this Section shall apply to supplemental retirement benefits
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or to pension increases attributable to cost-of-living increases or adjustments.
(2) No Member of the System shall be allowed to receive a retirement benefit or
pension which is in part or in whole based upon any service with respect to which
the Member is already receiving, or will receive in the future, a retirement benefit
or pension from a different employer's retirement system or plan. This restriction
does not apply to social security benefits or federal benefits under Chapter 67,
Title 10, U.S. Code.
9.06 No Loans.
No loans shall be permitted under this Plan.
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