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HomeMy WebLinkAbout2007 04 23 Consent 204 Resolution 2007-20 Alternative Normal Retirement Benefit COMMISSION AGENDA ITEM 204 Consent Informational Public Hearin Re ular x April 23, 2007 Regular Meeting MGR. ;<Z'-//DEPT. Authorization REQUEST: City Manager requesting the City Commission approve Resolution 2007-20 to provide an alternative normal retirement benefit to the City's Defined Benefit Pension Plan. PURPOSE: This agenda item is needed to obtain Commission approval of Resolution 2007-20 to provide an alternative normal retirement benefit to the City's Defined Benefit Pension Plan. CONSIDERATIONS: On March 12, 2007, the Commission approved the implementation of an additional benefit to the City Defined Benefit Pension Plan. This benefit would allow an employee who has at least thirty (30) years of credited service and who is determined to be disabled under the provisions of the City's long term disability insurance policy prior to the Normal Retirement Date, to retire with an unreduced, normal retirement benefit. The attached Resolution 2007-20 is necessary to implement this Plan benefit. FUNDING: The total additional first-year cost of this new benefit is $75,000 or 0.5% of payroll as calculated by the City Actuary and previously approved by the City Commission. RECOMMENDATION: Recommend the City Commission approve Resolution 2007-20 to amend the City's Defined Benefit Pension Plan to provide for an alternative normal retirement benefit. ATTACHMENTS: 1. Resolution 2007-20. COMMISSION ACTION: RESOLUTION NO. 2007-20 A RESOLUTION OF THE CITY COMMISSION OF THE CITY OF WINTER SPRINGS, FLORIDA, AMENDING THE DEFINED BENEFIT PLAN AND TRUST FOR EMPLOYEES OF THE CITY OF WINTER SPRINGS; AMENDING ARTICLE V, SECTION 5.02, TO PROVIDE AN ALTERNATIVE NORMAL RETIREMENT BENEFIT; PROVIDING FOR CONFLICTS; PROVIDING FOR SEVERABILITY; AND PROVIDING AN EFFECTIVE DATE. BE IT RESOLVED BY THE CITY COMMISSION OF THE CITY OF WINTER SPRINGS, FLORIDA: Section 1. Article V, Section 5.02, of the Defined Benefit Plan and Trust for Employees ofthe City of Winter Springs is hereby amended to read as follows: (A) Normal Retirement Pension. (1) Benefit Formula. (a) A Participant's normal retirement pension equals 2% of the Participant's Average Compensation multiplied by his Years of Accrual Service for service prior to October 1, 2000, and 3% of the Participant's Average Compensation multiplied by his Years of Accrual Service for service on and after October 1, 2000. Such pension will be adjusted for any distribution in accordance with Section 8.05. The maximum number of Years of Accrual Service taken into account in the normal retirement pension is 30, counting forward from the date of initial participation to include any purchased past service. (b) Notwithstanding any provision of subparagraph (a) to the contrary, effective October 1, 2008, a Participant's normal retirement pension shall equal 3% of the Participant's Average Compensation multiplied by his Years of Accrual Service for service prior to October 1, 2000; provided that such multiplier shall increase by one-fourth of one percent (.25%) each year beginning October 1, 2005, as follows: Effective Date Multiplier for Service Prior to October 1, 2000 October 1,2005 October 1, 2006 October 1, 2007 October 1, 2008 2.25% 2.50% 2.75% 3.00% (c) A Participant'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 ofthe Participant's separation from service. (2) Average Compensation. Average Compensation is the average of the Participant's Plan Compensation for the Averaging Period in the Participant's Compensation History which results in the highest Average Compensation. A Participant's Compensation History is the Participant's entire period of employment with the Employer. The Averaging Period is 3 consecutive Compensation periods (or the entire period of employment, if shorter). A Compensation period is the 12-month period ending on the last day of the Plan Year. (B) Accrued Benefit. Subject to the Annual Benefit limitations of Article III, a Participant's Accrued Benefit is the normal retirement pension accrued by the Participant under the accrual formula provided in this paragraph (B). (1) Method of Accrual. As of any date, a Participant's Accrued Benefit is his normal retirement pension calculated as of the determination date, based on the Years of Accrual Service credited as of such date. (2) Year of Accrual Service. Years of Accrual Service are Years of Service as determined under Section 8.06, including Years of Service completed prior to his participation in the Plan. Any Employee who completed Years of Service prior to the adoption of Resolution No. 2003-44 but did not make contributions to this Trust Fund or to the Money Purchase Pension Plan shall be credited with Years of Accrual Service upon payment of the Required Participant Contributions due under this Plan and the required participant contributions due under the Money Purchase Pension Plan for such service. Years of Accrual Service also include "Years of Qualified Service". Y ears of Qualified Service means any or all years of service performed by the Participant as an employee of the Government of the United States, any State or political subdivision thereof or any agency or instrumentality of any of the foregoing, other than the Employer, but only if all of the following conditions are satisfied: 2 (a) the Participant makes a voluntary contribution to the Plan, in an amount necessary to fund the benefit attributable to such Years of Qualified Service (as determined by the actuary for the Plan, utilizing the actuarial definitions used for plan funding purposes) and which does not exceed the amount necessary to fund the benefit attributable to such Years of Qualified Service; (b) the Participant makes the voluntary contribution described in paragraph (a) above, in one lump sum payment to the Plan prior to receiving credit for such Years of Qualified Service; (c) the Participant's Accrued Benefit is either 100% Nonforfeitable at the time he makes the voluntary contribution described in paragraph (a) above or will become 100% Nonforfeitable immediately after receiving credit for such Years of Qualified Service; and (d) the crediting of such Years of Qualified Service must not cause the Participant to receive a retirement benefit for the same Years of Qualified Service under more than one retirement plan. 5.03 Normal Form of Benefit. The Retirement Committee will compute a Participant's normal retirement pension in the form of a straight life annuity. The Trustee will pay the Participant's normal retirement pension in accordance with Article X. 5.04 Alternative Normal Retirement. Notwithstanding any other provision of this Article, a Member with thirty (30) or more years of accrual service who is determined to be disabled under the provisions of the City's long term disability insurance policy prior to the Normal Retirement Date may retire with an unreduced benefit, and the benefit shall be calculated based on the Member's years of accrual service and average compensation at the date of separation from employment. 5.0~4 Late Retirement. (A) Actuarial Adjustment for Delayed Commencement/Accrual of Benefits After Normal Retirement Date. A benefit commencing after Normal Retirement Date is the Actuarial Equivalent of the Participant's Accrued Benefit payable as of the later of Normal Retirement Date or the last day of the prior Plan Year. A Participant continues to accrue benefits after his Normal Retirement Date if the Participant's Accrued Benefit would increase because of additional Service or Compensation. A Participant's Accrued Benefit as of the end of each Plan Year following his Normal Retirement Date is the greater of: (1) the normal retirement pension determined under the Plan, taking into account Service and Compensation credited after Normal Retirement Date; or (2) the Accrued Benefit, determined as of the later of Normal Retirement Date or the end of the prior Plan Year, actuarially adjusted for late retirement. 3 Section 2. That this resolution shall supersede any and all conflicting provisions of any previously adopted resolutions. Section 3. That should any section or provision of this resolution or any portion thereof, any paragraph, sentence, or word be declared by a court of competent jurisdiction to be invalid, such decision shall not affect the validity of the remainder hereof as a whole or part thereof other than the part declared to be invalid. Section 4. That this resolution shall take effect upon adoption, except as otherwise specifically provided herein. PASSED and ADOPTED this _ day of , 2007. JOHN F. BUSH, Mayor ATTEST: ANDREA LORENZO-LUACES, City Clerk 4 RESOLUTION NUMBER 2007-20 A RESOLUTION OF THE CITY COMMISSION OF THE CITY OF WINTER SPRINGS, FLORIDA, AMENDING THE DEFINED BENEFIT PLAN AND TRUST FOR EMPLOYEES OF THE CITY OF WINTER SPRINGS; AMENDING ARTICLE V, SECTION 5.02, TO PROVIDE AN ALTERNATIVE NORMAL RETIREMENT BENEFIT; PROVIDING FOR CONFLICTS; PROVIDING FOR SEVERABILITY; AND PROVIDING AN EFFECTIVE DATE. BE IT RESOLVED BY THE CITY COMMISSION OF THE CITY OF WINTER SPRINGS, FLORIDA: Section 1. Article V, Section 5.02, of the Defined Benefit Plan and Trust for Employees of the City of Winter Springs is hereby amended to read as follows: (A) Normal Retirement Pension. (1) Benefit Formula. (a) A Participant's normal retirement pension equals 2% of the Participant's Average Compensation multiplied by his Years of Accrual Service for service prior to October 1, 2000, and 3% of the Participant's Average Compensation multiplied by his Years of Accrual Service for service on and after October 1, 2000. Such pension will be adjusted for any distribution in accordance with Section 8.05. The maximum number of Years of Accrual Service taken into account in the normal retirement pension is 30, counting forward from the date of initial participation to include any purchased past service. (b) Notwithstanding any provision of subparagraph (a) to the contrary, effective October 1, 2008, a Participant's normal retirement pension shall equal 3% of the Participant's Average Compensation multiplied by his Years of Accrual Service for service prior to October 1, 2000; provided that such multiplier shall increase by one-fourth of one percent (.25%) each year beginning October I, 2005, as follows: Effective Date Multiplier for Service Prior to October 1, 2000 October 1,2005 October 1,2006 October 1,2007 October 1,2008 2.25% 2.50% 2.75% 3.00% (c) A Participant'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 Participant's separation from service. (2) Average Compensation. Average Compensation is the average of the Participant's Plan Compensation for the Averaging Period in the Participant's Compensation History which results in the highest Average Compensation. A Participant's Compensation History is the Participant's entire period of employment with the Employer. The Averaging Period is 3 consecutive Compensation periods (or the entire period of employment, if shorter). A Compensation period is the 12-month period ending on the last day of the Plan Year. (B) Accrued Benefit. Subject to the Annual Benefit limitations of Article III, a Participant's Accrued Benefit is the normal retirement pension accrued by the Participant under the accrual formula provided in this paragraph (B). (1) Method of Accrual. As of any date, a Participant's Accrued Benefit is his normal retirement pension calculated as of the determination date, based on the Years of Accrual Service credited as of such date. (2) Year of Accrual Service. Years of Accrual Service are Years of Service as determined under Section 8.06, including Years of Service completed prior to his participation in the Plan. Any Employee who completed Years of Service prior to the adoption of Resolution No. 2003-44 but did not make contributions to this Trust Fund or to the Money Purchase Pension Plan shall be credited with Years of Accrual Service upon payment of the Required Participant Contributions due under this Plan and the required participant contributions due under the Money Purchase Pension Plan for such service. Years of Accrual Service also include "Years of Qualified Service". Y ears of Qualified Service means any or all years of service performed by the Participant as an employee of the Government of the United States, any State or political subdivision thereof or any agency or instrumentality of any of the foregoing, other than the Employer, but only if all of the following conditions are satisfied: City of Winter Springs, Florida Resolution 2007-20 Page 2 of4 (a) the Participant makes a voluntary contribution to the Plan, in an amount necessary to fund the benefit attributable to such Years of Qualified Service (as determined by the actuary for the Plan, utilizing the actuarial definitions used for plan funding purposes) and which does not exceed the amount necessary to fund the benefit attributable to such Years of Qualified Service; (b) the Participant makes the voluntary contribution described III paragraph (a) above, in one lump sum payment to the Plan prior to receiving credit for such Years of Qualified Service; (c) the Participant's Accrued Benefit is either 100% Nonforfeitable at the time he makes the voluntary contribution described in paragraph (a) above or will become 100% Nonforfeitable immediately after receiving credit for such Years of Qualified Service; and (d) the crediting of such Years of Qualified Service must not cause the Participant to receive a retirement benefit for the same Years of Qualified Service under more than one retirement plan. 5.03 Normal Form of Benefit. The Retirement Committee will compute a Participant's normal retirement pension in the form of a straight life annuity. The Trustee will pay the Participant's normal retirement pension in accordance with Article X. 5.04 Alternative Normal Retirement. Notwithstanding any other provision of this Article, a Member with thirty (30) or more years of accrual service who is determined to be disabled under the provisions of the City's long term disability insurance policy prior to the Normal Retirement Date may retire with an unreduced benefit, and the benefit shall be calculated based on the Member's years of accrual service and average compensation at the date of separation from employment. 5.0~4 Late Retirement. (A) Actuarial Adjustment for Delayed Commencement/Accrual of Benefits After Normal Retirement Date. A benefit commencing after Normal Retirement Date is the Actuarial Equivalent of the Participant's Accrued Benefit payable as of the later of Normal Retirement Date or the last day of the prior Plan Year. A Participant continues to accrue benefits after his Normal Retirement Date if the Participant's Accrued Benefit would increase because of additional Service or Compensation. A Participant's Accrued Benefit as of the end of each Plan Year following his Normal Retirement Date is the greater of: (1) the normal retirement pension determined under the Plan, taking into account Service and Compensation credited after Normal Retirement Date; or (2) the Accrued Benefit, determined as of the later of Normal Retirement Date or the end of the prior Plan Year, actuarially adjusted for late retirement. City of Winter Springs, Florida Resolution 2007-20 Page 3 of 4 Section 2. That this resolution shall supersede any and all conflicting provisions of any previously adopted resolutions. Section 3. That should any section or provision of this resolution or any portion thereof, any paragraph, sentence, or word be declared by a court of competent jurisdiction to be invalid, such decision shall not affect the validity of the remainder hereof as a whole or part thereof other than the part declared to be invalid. Section 4. That this resolution shall take effect upon adoption, except as otherwise specifically provided herein. PASSED and ADOPTED this 23 RD day of April, 2007. 7.~ LORENZO-LUACES, City Clerk / City of Winter Springs, Florida Resolution 2007-20 Page 4 of 4