HomeMy WebLinkAbout2011 10 24 Regular 601 Resolution 2011-52 Pension Reform
COMMISSION AGENDA
CONSENT
INFORMATIONAL
ITEM 601
PUBLIC HEARING
REGULAR XX
MGR /DEPT
October 24, 2011
Meeting
Authorization
REQUEST:
The City Manager and Finance and Administrative Services Department are requesting the
Commission consider adoption of Resolution 2011-52, modifying the Winter Springs Defined Pension Plan benefits and
to allow the City Manager and City Attorney to complete any and all documents necessary to execute the plan changes.
SYSNOPSIS:
The changes purposed in this agenda item memorialize the consensus reached by the City of Winter Spring Commission
at the Joint Commission and Board of Trustee Special Meeting held on May 2, 2011. This agenda item is needed to seek
Commission approval to modify the City of Winter Springs Defined Pension with the stated goal of assuring financial
stability and sustainability of the plan for future years. The changes to the plan effect current and future employees, the
changes have no impact on participants that are currently drawing pension benefits (current retirees). The Plan changes
include: newly hired General Employees participating in a defined contribution plan, changes in benefit accrual rates,
vesting periods, early retirement requirement, and increase in participant contributions, average compensation
calculation and pensionable wage definitions.
CONSIDERATIONS:
Defined Benefits Plans (DB) is impacted by a number of different variables. These variables are be both endogenous
(plan structure/hiring/salary and wages) and exogenous (economic and investment returns) to the plan. This agenda
item focuses on only the purposed plan structure changes (endogenous) variables that will increase the probability of a
sustainable employee pension plan. The following changes are presented in order of the magnitude of fiscal impact on
the pension plan.
Defined Contribution Plan (savings over 30 years $11,752,000)
The first and most significant change to the Winter
Springs employee benefits is the closure of the DB plan to all General Government employees hired after October 1,
2011. All new General Government hires after October 1, 2011 will participate in a defined contribution plan (401a) or
(457). Details of this plan will be brought before the Commission in a separate agenda item.
Average of High 5 and Base Compensation only (savings over 30 years $8,783,000):
Final average salary (FAS) used
to calculate retirement benefits are currently the average of the highest three consecutive years of total compensation
during employment with the City. Additionally, compensation was very broadly defined and encompassed almost all
direct and indirect payments to the employee. With the purposed changes the FAS will be the high 5 years, which will
reduce the average and the retirement benefit. The high 5 is a better metric for calculating a pension because it will
reduce the emphasis on spikes in employees’ salaries caused by non-reoccurring anomalies.
Additionally, by defining pensionable wages as base wage plus the first 150 hours over base, the pension payouts will be
more predictable and thus simplifies the City’s funding forecast requirement. Base wages would be defined in the
employee handbook as follows:
Weekly Bi-Weekly
Police (non-exempt) 42 84
Fire Fighters 56 112
General Employees (non-exempt) 40 80
In addition to the base pay the City would permit 150 hours annually to be added as pensionable wages. An example of
this would be a police officer (non-exempt) works 2184 hours annually and works an additional 150 hours of straight
and overtime. The City would credit that officer with 2334 hours pensionable at the actual rate the hours were paid.
Participant Contributions (savings over 30 years $8,576,000):
Increasing the employee contributions from 3%
(October 24, 2011) to 5% for all participants will decrease the City’s required funding significantly.
Benefit Accrual Rate (savings over 30 years $6,232,000):
Reducing the benefit accrual rate for General Employees to
two and a half percent (2.5%) per year of credited service after October 1, 2011with a maximum of 30 years of total
service. Sworn Police and Fire would remain at 3% per year to with a maximum of 30 years credited service.
Unreduced Early Retirement (savings over 30 years $2,375,000):
The City pension plan currentlypermits participant
to retire early after attaining age 55 and having served 10 years. The changes purposed would simply increase the
service requirement to 15 years and attainment of age 55.
Vesting (savings over 30 years $197,000):
This purposed plan change was not solely recommended for its impact on
the Plan’s financials, rather to encourage long-term loyalty in employees. The current plan employs a phased (step...see
below) vesting approach, allowing the employee to earn part of the City’s contribution/match after just 3 years. By
switching to a cliff vesting it is believed the turn-over rates will decrease subsequently reducing the City’s hiring and
training costs.
Chart A depicts the current Defined Benefit Plan structure and the purposed changes to the plan as discussed at the
Joint Commission and BOT meeting in May 2011.
Chart A.
Current Plan Details Purposed Changes Purposed Changes
General Employees Hired
AllPolice
before Oct. 1, 2011
All Wages included in pension
Calculation FAS All Compensation/ 3year FAS Base + 150 hours / 5 year FAS Base + 150 hours / 5 year FAS
Employee Contribution Rate
3% total pension wages 5% Base Pay 5% Base Pay
Benefit Accrual Rate
3% per Year 3% per Year 2.5% per Year
Unreduced Early Retirement
Age 55 and 10 years of service Age 55 and 15 years of service Age 55 and 15 years of service
Years of Service vesting % Years of Service vesting % Less Years of Service vesting %
Less than 3………..…....none than 7………….…..None 7 or Less than 7………….…..None
3…………………..………....20% more ………………..100% 7 or more ………………..100%
Vesting
4……………………………....40%
5……………………………....60%
6……………………………....80%
7………………..………...…100%
It is important to note that all of the changes are intended to be applied on a prospective basis using October 1, 2011 as
the historical time reference point. However, it will be necessary to rewrite the entire pension plan document to
effectively memorialize and administer each of the purposed changes. The rewrite would begin shortly after this agenda
item is approved, with a completion date of early 2012. The above changes are a synopsis of the major elements of the
Winter Springs Pension Plan purposed modifications. There are several smaller less obvious details that are critical to
the successful implementation of the purposed changes that will have to be worked out with/between the City’s Actuary
and Attorneys.
FISCAL IMPACT:
The direct monetary impact of the change outlined above over the next 30 years will be approximately $28,444,574.00.
30 years is used because that is the State mandated planning horizon for most retirement plans. These changes and the
corresponding savings ($579,000.00) have been budgeted for F11-12.
COMMUNICATION EFFORTS:
This Agenda Item Has Been Electronically Forwarded To The Mayor And City Commission, City Manager, City
Attorney/Staff, And Is Available On The City’s Website, LaserFiche, And The City’s Server. Additionally, Portions Of
This Agenda Item Are Typed Verbatim On The Respective Meeting Agenda Which Has Also Been Electronically
Forwarded To The Individuals Noted Above, And Which Is Also Available On The City’s Website, LaserFiche, And
The City’s Server; Has Been Sent To Applicable City Staff, eAlert/eCitizen Recipients, Media/Press Representatives
Who Have Requested Agendas/Agenda Item Information, Homeowner’s Associations/Representatives On File With The
City, And All Individuals Who Have Requested Such Information.
This Information Has Also Been Posted Outside City Hall, Posted Inside City Hall With Additional Copies Available
For The General Public, And Posted At Five (5) Different Locations Around The City. Furthermore, This Information
Is Also Available To Any Individual Requestors. City Staff Is Always Willing To Discuss This Agenda Item Or Any
Agenda Item With Any Interested Individuals.
RECOMMENDATION:
City Manager and Director of Finance and Administrative Services recommend the Commission adopt Resolution 2011-
52 and permit the City Manager and City Attorney to prepare and execute any and all applicable documents necessary to
execute the pension modifications.
ATTACHMENTS:
Resolution 2011-52
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RESOLUTION NO. 2011-52
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 I OF THE DEFINED BENEFIT PLAN
TO REVISE THE DEFINITION OF “PLAN COMPENSATION”;
AMENDING ARTICLE II OF THE DEFINED BENEFIT PLAN TO
REVISE THE ELIGIBILTY PROVISIONS AND PROVIDE THAT
EMPLOYEES HIRED ON OR AFTER OCTOBER 1, 2011 SHALL NOT
PARTICIPATE IN THE DEFINED BENEFIT PLAN BUT SHALL
PARTICIPATE IN A DEFINED CONTRIBUTION PLAN; AMENDING
ARTICLE IV OF THE DEFINED BENEFIT PLAN TO PROVIDE FOR A
FIVE PERCENT CONTRIBUTION BY PARTICIPANTS; AMENDING
ARTICLE V OF THE DEFINED BENEFIT PLAN TO PROVIDE A TWO
AND ONE-HALF PERCENT BENEFIT MULTIPLIER FOR SERVICE ON
AND AFTER OCTOBER 1, 2011 AND MODIFYING THE DEFINITION
OF AVERAGE COMPENSATION; AMENDING ARTICLE VI OF THE
DEFINED BENEFIT PLAN TO MODIFY THE ELIGIBILITY
REQUIREMENTS FOR AN UNREDUCED EARLY RETIREMENT
BENEFIT; AMENDING ARTICLE VIII OF THE DEFINED BENEFIT
PLAN TO MODIFY THE VESTING SCHEDULE; PROVIDING FOR
CONFLICTS; PROVIDING FOR SEVERABILITY; PROVIDING AN
EFFECTIVE DATE.
WHEREAS, the City Commission of the City of Winter Springs has determined that
certain changes to the City’s Defined Benefit Plan and Trust are in the best interest of the City,
its employees and taxpayers;
NOW, THEREFORE, BE IT RESOLVED BY THE CITY COMMISSION OF THE
CITY OF WINTER SPRINGS, FLORIDA:
Section 1.
That Article I, Section 1.10 of the Defined Benefit Plan and Trust for Employees of the
City of Winter Springs be amended as follows:
1.10 Compensation Definitions. Any reference in this Plan to Compensation is a
reference to the definition in this Section 1.10, unless the Plan reference specifies a modification
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to this definition. The Retirement Committee will take into account only Compensation actually
paid for the relevant period.
(A) Total Compensation. "Total Compensation" means wages, salaries, and other amounts
received (whether or not paid in cash) for personal services actually rendered in the course of
employment with the Employer, but only to the extent included in gross income. This definition
includes, but is not limited to commissions, overtime pay and bonuses. With respect to the Plan
Years beginning prior to October 1, 1998, Total Compensation does not include elective
contributions. With respect to Plan Years beginning on and after October 1, 1998, Total
Compensation includes elective contributions. Total Compensation also does not include:
(1) Employer contributions to a plan of deferred compensation to the extent the
contributions are not included in the gross income of the Employee for the taxable year in
which contributed, on behalf of an Employee to a Simplified Employee Pension Plan to
the extent such contributions are excludible from the Employee's gross income, and any
distributions from a plan of deferred compensation, regardless of whether such amounts
are includible in the gross income of the Employee when distributed.
(2) Other amounts which receive special tax benefits, such as premiums for group
term life insurance (but only to the extent that the premiums are not includible in the
gross income of the Employee), or contributions made by an Employer towards the
purchase of an annuity contract described in Code §403(b) (whether or not the
contributions are excludible from the gross income of the Employee).
(B) Plan Compensation. Plan Compensation means Total Compensation described in Section
1.10(A), except that Plan Compensation includes elective contributions for all Plan Years. Plan
Compensation applies to determine a Participant's benefit formula and Accrued Benefit under
Article V. Effective October 1, 2011, Plan Compensation shall exclude commissions, bonuses,
pay in excess of one hundred fifty (150) hours in a Plan Year, and payments for accrued leave-in
excess of the dollar amount of an Employee’s accrued vacation leave balance on July 1, 2011.
Section 2.
That Article II, Section 2.01 of the Defined Benefit Plan and Trust for Employees of the
City of Winter Springs be amended as follows:
2.01 Eligibility. Each Employee (other than an Excluded Employee) becomes a
Participant in the Plan on the first day of the month (if employed on that date) immediately
following the date 6 months after his Employment Commencement Date. "Employment
Commencement Date" means the date on which the Employee first performs an Hour of Service
for the Employer. Notwithstanding any other provision of this Plan, any Employee other than a
sworn police officer or Forensic Professional hired on or after October 1, 2011, and any
Employee who is not participating in this Plan on April 1, 2012, shall not be eligible to
participate in this Plan. Any Employee other than a sworn police officer or Forensic Professional
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hired on or after October 1, 2011, and any Employee who is not participating in this plan on
April 1, 2012 shall participate in the defined contribution plan established pursuant to Resolution
2011-52 , if eligible to participate in the defined contribution plan. Employees hired as sworn
police officers or Forensic Professional on or after October 1, 2011 shall participate in this Plan.
(A) Excluded Employee
(1) An Employee is an Excluded Employee if his customary weekly employment
with the Employer is less than 29 hours. An Employee is an Excluded Employee if he is
actively participating (and “benefiting” within the meaning of Treas. Reg. § 1.410(b)-3)
in another qualified plan maintained by the Employer other than the Money Purchase
Pension Plan and Trust for Employees of the City of Winter Springs, Florida (hereinafter
referred to as the “Money Purchase Plan”).
(2) If a Participant has not incurred a Separation from Service but becomes an
Excluded Employee, then during the period such a Participant is an Excluded Employee,
the Participant will not accrue a benefit under the Plan attributable to any period during
which he is an Excluded Employee. However, during such period of exclusion, the
Participant, without regard to employment classification, continues to receive credit for
vesting under Article VIII for each included Year of Service.
(3) If an Excluded Employee who is not a Participant becomes eligible to participate
in the Plan by reason of a change in employment classification, he will participate in the
Plan immediately if he has satisfied the eligibility conditions of Section 2.01 and would
have been a Participant had he not been an Excluded Employee during his period of
Service. Furthermore, the Plan takes into account all of the Participant’s included Years
of Service with the Employer as an Excluded Employee for purposes of vesting credit
under Article VIII.
(B) Employees with Non-Contributing Service. Any Employee who completed Years of
Service prior to adoption of Resolution No. 2003-44, but did not make contributions to this Trust
Fund or to the Money Purchase 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 Plan for such service.
Section 3.
That Article II, Section 2.03 of the Defined Benefit Plan and Trust for Employees of the
City of Winter Springs be amended as follows:
2.03 Participation upon Re-employment. A Participant whose employment terminates
will re-enter the Plan as a Participant on the date of his re-employment. Nothwithstanding the
above, a General Employee Participant whose employment terminates and who is subsequently
re-employed on or after October 1, 2011 shall not participate in the Plan.
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An Employee who satisfies the Plan's eligibility conditions but who terminates employment with
the Employer prior to becoming a Participant will, become a Participant on the later of the Plan
Entry Date on which he would have entered the Plan had he not terminated employment or the
date of his re-employment. Notwithstanding the above, a General Employee who satisfies the
Plan’s eligibility conditions but who terminates employment with the Employer prior to
becoming a Participant and who is subsequently re-employed on or after October 1, 2011 shall
not participate in the Plan
Any Employee who terminates employment prior to satisfying the Plan's eligibility conditions
becomes a Participant in accordance with the provisions of Section 2.01. Notwithstanding the
above, any General Employee who terminates employment prior to satisfying the Plan’s
eligibility conditions and who is subsequently re-employed on or after October 1, 2011 shall not
participate in the Plan.
Section 4.
That Article IV, Section 4.01 of the Defined Benefit Plan and Trust for Employees of the
City of Winter Springs be amended as follows:
4.01 Required Participant Contributions. The Plan did not permit nor require
Participant Contributions prior to October 1, 2000. Effective October 1, 2000, each Participant is
required to contribute 3% of Compensation to the Plan, which contribution shall be considered
the Required Participant Contribution. Effective October 24, 2011, each Participant is required
to contribute 5% of Compensation to the Plan, which contribution shall be considered the
Required Participant Contribution. The Required Participant Contribution shall be deducted
from each Participant’s Compensation whenever such Compensation is paid, and remitted to the
Trustee. Required Participant Contributions shall be considered an Employer “pick-up”
contribution and shall be designated as employer contributions pursuant to Section 414(h) of the
Internal Revenue Code, contingent upon the contributions being excluded from the Participant’s
gross income for federal income tax purposes. For all other purposes of this Plan, such
contributions shall be considered Participant contributions.
* * *
Section 5.
That Article V, Section 5.02 of the Defined Benefit Plan and Trust for Employees of the
City of Winter Springs be amended as follows:
5.02 Amount of Normal Retirement Pension/Accrued Benefit. The Annual Benefit
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limitations of Article III apply to the determination of a Participant's normal retirement pension
and Accrued Benefit in the manner prescribed in Section 3.05(H).
(A) Normal Retirement Pension.
(1) Benefit Formula
(a) A Participant's normal retirement pension equals 2% of the Participant’s
Average Final Compensation multiplied by his Years of Accrual Service for service prior
to October 1, 2000, and 3% of the Participant’s Average Final 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.
(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 Final 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 2.25%
October 1, 2006 2.50%
October 1, 2007 2.75%
October 1, 2008 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.
(d) Effective October 1, 2011, a participating General Employee’s normal
retirement pension shall equal 3% of the Participant's Average Compensation multiplied
by Years of Accrual Service prior to October 1, 2011, and 2.5% of the Participant’s
Average Compensation multiplied by Years of Accrual Service on and after October 1,
2011. The normal retirement pension of a Participant employed as a Sworn police officer
or firefighter or Forensic Professional shall equal 3% of the Participant's Average
Compensation multiplied by Years of Accrual Service. Such pension will be adjusted for
any distribution in accordance with Section 8.05.
(e) 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.
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(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). Effective October 1, 2011 Average
Compensation shall be the average of the highest five (5) consecutive years of Plan
Compensation out of the ten (10) years immediately preceding termination of
employment, A Compensation period is the 12-month period ending on the last day of the
Plan Year. Notwithstanding the above, a Participant’s Average Compensation shall not
be less than his or her Average Compensation as of September 30, 2011.
* * *
Section 6.
That Article VI, Section 6.01 of the Defined Benefit Plan and Trust for Employees of the
City of Winter Springs be amended as follows:
6.01 Eligibility for Early Retirement Pension.
A Participant as of September 30, 2011 who has received credit for at least 10 Years of Service
(as defined in Section 8.06) and has attained age 55 may elect an early retirement pension. A
Participant as of September 30, 2011 who separates from service after satisfying the service
requirement but not the age requirement may elect to receive an early retirement pension upon
satisfying the age requirement. In addition, a Participant who as of September 30, 2011 who has
completed 25 Years of Service (as defined in Section 8.06) may elect an early retirement
pension.
A Participant employed after September 30, 2011 who has received credit for at least 15
Years of Service (as defined in Section 8.06), and has attained age 55 may elect an early
retirement pension. A Participant employed after September 30, 2011 who separates from
service after satisfying the service requirement but not the age requirement may elect to receive
an early retirement pension upon satisfying the age requirement. In addition, a Participant
employed after September 30, 2011 who has completed 25 Years of Service (as defined in
Section 8.06) may elect an early retirement pension.
The early retirement pension for a Participant is his or her Nonforfeitable Accrued
Benefit payable at Normal Retirement Date without actuarial reduction for early commencement
but only if benefits commence on or after the Participant attains age 55.
Notwithstanding the above, the early retirement pension for a Participant as of September
30, 2011 who has received credit for 10 or more Years of Service but less than 15 Years of
Service is the sum of his or her Nonforfeitable Accrued Benefit as of September 30, 2011
payable at Normal Retirement Date without actuarial reduction for early commencement plus his
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or her Accrued Benefit payable at Normal Retirement Date earned after September 30, 2011 with
actuarial reduction for early commencement but only if benefits commence on or after the
Participant attains age 55.
If an eligible Participant elects to commence his early retirement pension prior to attaining age
55, such Participant's early retirement pension is the Actuarial Equivalent of his Nonforfeitable
Accrued Benefit payable at age 55.
Section 7.
That Section 8.05 of the Defined Benefit Plan and Trust for Employees of the City of
Winter Springs be amended as follows:
8.05 Vesting Schedule.
(A) 100% Vesting Upon Certain Events. A Participant's Accrued Benefit is 100%
Nonforfeitable upon and after his attaining Normal Retirement Age (if employed on or after that
date). A Participant's Accrued Benefit is 100% Nonforfeitable if the Participant's separation
from Service is a result of death, disability or eligibility for an early retirement pension.
(B) 100% Vesting of Required Participant Contributions. Each Participant is immediately 100%
vested with respect to his Required Participant Contributions. A Participant is entitled to receive
a return of his Required Participant Contributions, contributed while a participant under the
money purchase plan prior to October 1, 2000, upon termination of 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, and effective October 1, 2003, 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 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, in lieu of any other benefit under the Plan. The amount received as a distribution by the
Participant shall be used to reduce the accrued benefit, if any, at his normal retirement date.
Required Participant contributions contributed on and after October 1, 2000 are 100% vested and
shall be included in the deferred vested benefit payable to the Participant upon normal retirement
date.
(C) Vesting Schedule prior to October 1, 2011. Subject to Section 8.05(A) and Section
8.05(B), a Participant's Nonforfeitable percentage in his Accrued Benefit equals the percentage
in the following schedule:
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Nonforfeitable
Years of Service Percentage
Less than 3 ...................................................... None
3 ...................................................................... 20%
4 ...................................................................... 40%
5 ...................................................................... 60%
6 ...................................................................... 80%
7 or more ......................................................... 100%
(D) Vesting Schedule effective October 1, 2011. Effective October 1, 2011, and subject to
Section 8.05(A) and Section 8.05(B), a Participant's Nonforfeitable percentage in his Accrued
Benefit equals the percentage in the following schedule:
Nonforfeitable
Years of Service Percentage
Less than 7 ...................................................... None
7 or more ......................................................... 100%
Notwithstanding anything herein to the contrary, the Accrued Benefit of a Participant on
September 30, 2011 shall continue to vest in accordance with Section 8.05(C).
(E)(D) Amendment to Vesting Schedule. Though the Employer reserves the right to amend the
vesting schedule at any time, the Retirement Committee will not apply the amended vesting
schedule to reduce the Nonforfeitable percentage of any Participant's Accrued Benefit derived
from Employer contributions (determined as of the later of the date the Employer adopts the
amendment, or the date the amendment becomes effective) to a percentage less than the
Nonforfeitable percentage computed under the Plan without regard to the amendment. An
amended vesting schedule will apply to a Participant only if the Participant receives credit for at
least one Hour of Service after the new schedule becomes effective.
If the Employer makes a permissible amendment to the vesting schedule, each Participant
having at least 3 Years of Service with the Employer may elect to have the percentage of his
Nonforfeitable Accrued Benefit computed under the Plan without regard to the amendment. The
Participant must file his election with the Retirement Committee within 60 days of the latest of
(1) the Employer's adoption of the amendment; (2) the effective date of the amendment; or (3)
his receipt of a copy of the amendment. The Retirement Committee, as soon as practicable, must
forward a true copy of any amendment to the vesting schedule to each affected Participant,
together with an explanation of the effect of the amendment, the appropriate form upon which
the Participant may make an election to remain under the vesting schedule provided under the
Plan prior to the amendment and notice of the time within which the Participant must make an
election to remain under the prior vesting schedule. The vesting schedule election does not apply
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to a Participant if the amended vesting schedule provides for vesting at least as rapid at all times
as the vesting schedule in effect prior to the amendment.
(F) Forfeiture for Cause. The Plan does not permit a forfeiture for cause.
Section 8.
That Article VIII, Section 8.08 of the Defined Benefit Plan and Trust for Employees of
the City of Winter Springs be amended as follows:
8.08 Included Years of Service - Vesting. For purposes of determining "Years of
Service" under Section 8.06, the Plan takes into account all Years of Qualified Service credited
to a Participant pursuant to Section 5.02(B) and all Years of Service an Employee completes
with the Employer except:
(A) Any Year of Service completed before a Break in Service, unless the Employee
completes a Year of Service after the Break in Service. This Break in Service rule will not
operate to recredit any Year of Service disregarded under clause (B).
(B) Any Year of Service completed before a Break in Service if the number of the
Participant's consecutive Breaks in Service equals of exceeds the greater of 5 or the aggregate
number of the Years of Service prior to the Break. This Break in Service rule applies only if the
Participant is 0% vested in his Accrued Benefit derived from Employer contributions at the time
he has a Break in Service. Furthermore, the aggregate number of Years of Service before a
Break in Service does not include any Years of Service not required to be taken into account
under this exception by reason of any prior Break in Service. If the Retirement Committee
Retirement Committee disregards the Participant's Years of Service under this exception, the
Plan forfeits his pre-Break in Service Accrued Benefit.
(C) Any Year of Service before the Plan Year in which the Participant attained the age of 18.
Section9.
That this resolution shall supersede any and all conflicting provisions of any previously
adopted resolutions.
Section10.
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
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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 11.
That this resolution shall take effect upon adoption.
PASSED and ADOPTED this _____ day of ___________________, 2011.
MAYOR
ATTEST:
CITY CLERK
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RESOLUTION NO. 2011-52
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 I OF THE DEFINED BENEFIT PLAN
TO REVISE THE DEFINITION OF "PLAN COMPENSATION ";
AMENDING ARTICLE II OF THE DEFINED BENEFIT PLAN TO
REVISE THE ELIGIBILTY PROVISIONS AND PROVIDE THAT
EMPLOYEES HIRED ON OR AFTER OCTOBER 1, 2011 SHALL NOT
PARTICIPATE IN THE DEFINED BENEFIT PLAN BUT SHALL
PARTICIPATE IN A DEFINED CONTRIBUTION PLAN; AMENDING
ARTICLE IV OF THE DEFINED BENEFIT PLAN TO PROVIDE FOR A
FIVE PERCENT CONTRIBUTION BY PARTICIPANTS; AMENDING
ARTICLE V OF THE DEFINED BENEFIT PLAN TO PROVIDE A TWO
AND ONE -HALF PERCENT BENEFIT MULTIPLIER FOR SERVICE ON
AND AFTER OCTOBER 1, 2011 FOR GENERAL GOVERNMENT
EMPLOYEES AND MODIFYING THE DEFINITION OF AVERAGE
COMPENSATION; AMENDING ARTICLE VI OF THE DEFINED
BENEFIT PLAN TO MODIFY THE ELIGIBILITY REQUIREMENTS
FOR AN UNREDUCED EARLY RETIREMENT BENEFIT; AMENDING
ARTICLE VIII OF THE DEFINED BENEFIT PLAN TO MODIFY THE
VESTING SCHEDULE; PROVIDING FOR CONFLICTS; PROVIDING
FOR SEVERABILITY; PROVIDING AN EFFECTIVE DATE.
WHEREAS, the City Commission of the City of Winter Springs has determined that
certain changes to the City's Defined Benefit Plan and Trust are in the best interest of the City,
its employees and taxpayers;
NOW, THEREFORE, BE IT RESOLVED BY THE CITY COMMISSION OF THE
CITY OF WINTER SPRINGS, FLORIDA:
Section 1.
That Article I, Section 1.10 of the Defined Benefit Plan and Trust for Employees of the
City of Winter Springs be amended as follows:
1.10 Compensation Definitions. Any reference in this Plan to Compensation is a
reference to the definition in this Section 1.10, unless the Plan reference specifies a modification
1
9.16.11
to this definition. The Retirement Committee will take into account only Compensation actually
paid for the relevant period.
(A) Total Compensation. "Total Compensation" means wages, salaries, and other amounts
received (whether or not paid in cash) for personal services actually rendered in the course of
employment with the Employer, but only to the extent included in gross income. This definition
includes, but is not limited to commissions, overtime pay and bonuses. With respect to the Plan
Years beginning prior to October 1, 1998, Total Compensation does not include elective
contributions. With respect to Plan Years beginning on and after October 1, 1998, Total
Compensation includes elective contributions. Total Compensation also does not include:
(1) Employer contributions to a plan of deferred compensation to the extent the
contributions are not included in the gross income of the Employee for the taxable year in
which contributed, on behalf of an Employee to a Simplified Employee Pension Plan to
the extent such contributions are excludible from the Employee's gross income, and any
distributions from a plan of deferred compensation, regardless of whether such amounts
are includible in the gross income of the Employee when distributed.
(2) Other amounts which receive special tax benefits, such as premiums for group
term life insurance (but only to the extent that the premiums are not includible in the
gross income of the Employee), or contributions made by an Employer towards the
purchase of an annuity contract described in Code §403(b) (whether or not the
contributions are excludible from the gross income of the Employee).
(B) Plan Compensation. Plan Compensation means Total Compensation described in Section
1.10(A), except that Plan Compensation includes elective contributions for all Plan Years. Plan
Compensation applies to determine a Participant's benefit formula and Accrued Benefit under
Article V. Effective October 10, 2011, Plan Compensation means base salary including overtime
a us to one hundred fift 150 hours in a Plan Year and excludin . all other forms of
compensation.
Section 2.
That Article II, Section 2.01 of the Defined Benefit Plan and Trust for Employees of the
City of Winter Springs be amended as follows:
2.01 Eligibility. Each Employee (other than an Excluded Employee) becomes a Participant in
the Plan on the first day of the month (if employed on that date) immediately following the date
6 months after his Employment Commencement Date. "Employment Commencement Date"
means the date on which the Employee first performs an Hour of Service for the Employer.
Notwithstanding any other provision of this Plan, any Employee other than a sworn police
officer and Forensic Professional hired on or after October 1, 2011, shall not be eligible to
participate in this Plan. Any Employee other than a sworn police officer or forensic professional
hired on or after October 1, 2011, shall participate in the defined contribution plan established
2
9.16.11
pursuant to Resolution 2011 -52, if eligible to participate in the defined contribution plan.
Employees hired as sworn police officers or forensic professional on or after October 1, 2011
shall participate in this Plan.
(A) Excluded Employee
(1) An Employee is an Excluded Employee if his customary weekly employment
with the Employer is less than 29 hours. An Employee is an Excluded Employee if he is
actively participating (and "benefiting" within the meaning of Treas. Reg. § 1.410(b) -3)
in another qualified plan maintained by the Employer other than the Money Purchase
Pension Plan and Trust for Employees of the City of Winter Springs, Florida (hereinafter
referred to as the "Money Purchase Plan").
(2) If a Participant has not incurred a Separation from Service but becomes an
Excluded Employee, then during the period such a Participant is an Excluded Employee,
the Participant will not accrue a benefit under the Plan attributable to any period during
which he is an Excluded Employee. However, during such period of exclusion, the
Participant, without regard to employment classification, continues to receive credit for
vesting under Article VIII for each included Year of Service.
(3) If an Excluded Employee who is not a Participant becomes eligible to participate
in the Plan by reason of a change in employment classification, he will participate in the
Plan immediately if he has satisfied the eligibility conditions of Section 2.01 and would
have been a Participant had he not been an Excluded Employee during his period of
Service. Furthermore, the Plan takes into account all of the Participant's included Years
of Service with the Employer as an Excluded Employee for purposes of vesting credit
under Article VIII.
(B) Employees with Non - Contributing Service. Any Employee who completed Years of
Service prior to adoption of Resolution No. 2003 -44, but did not make contributions to this Trust
Fund or to the Money Purchase 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 Plan for such service.
Section 3.
That Article II, Section 2.03 of the Defined Benefit Plan and Trust for Employees of the
City of Winter Springs be amended as follows:
3
9.16.11
2.03 Participation upon Re- employment. A Participant whose employment terminates
and who is subsequently reemployed prior to October 1, 2011 will re -enter the Plan as a
Participant on the date of his re- employment. An Employee other than a sworn police officer or
forensic professional who satisfies the Plan's eligibility conditions but who terminates
employment with the Employer prior to becoming a Participant will, upon reemployment,
participate in the defined contribution plan established pursuant to Resolution 2011 -52, in
accordance with the terms and conditions therein provided. . _. .. : ' :,- • • • ., - - . -
• - - - - - .. - - - . Any Employee other than a sworn police officer or forensic
professional who terminates employment prior to satisfying the Plan's eligibility conditions and
who is subsequently reemployed on or after October 1, 2011 shall participate in the defined
contribution plan established pursuant to Resolution 2011 -52, in accordance with the terms and
conditions therein provided. - : ' :. - •
.., - . _. .., - ' - - . .. ' • • . • _
2.01. Any Employee employed as a police officer or forensic professional who terminates
employment prior to satisfying the Plan's eligibility conditions and who is subsequently
reemployed becomes a Participant in accordance with the provisions of Section 2.01.
Section 4.
That Article IV, Section 4.01 of the Defined Benefit Plan and Trust for Employees of the
City of Winter Springs be amended as follows:
4.01 Required Participant Contributions. The Plan did not permit nor require
Participant Contributions prior to October 1, 2000. Effective October 1, 2000, each Participant is
required to contribute 3% of Compensation to the Plan, which contribution shall be considered
the Required Participant Contribution. Effective October 10, 2011, each Participant is required
to contribute 5% of Compensation to the Plan, which contribution shall be considered the
Required Participant Contribution. The required participant contribution shall be deducted from
each Participant's Compensation whenever such Compensation is paid, and remitted to the
Trustee. Required participant contributions shall be considered an Employer "pick -up"
contribution and shall be designated as employer contributions pursuant to Section 414(h) of the
Internal Revenue Code, contingent upon the contributions being excluded from the Participant's
gross income for federal income tax purposes. For all other purposes of this Plan, such
contributions shall be considered Participant contributions.
4
9.16.11
Section 5.
That Article V, Section 5.02 of the Defined Benefit Plan and Trust for Employees of the
City of Winter Springs be amended as follows:
5.02 Amount of Normal Retirement Pension/Accrued Benefit. The Annual Benefit
limitations of Article III apply to the determination of a Participant's normal retirement pension
and Accrued Benefit in the manner prescribed in Section 3.05(H).
(A) Normal Retirement Pension.
(1) Benefit Formula
(a) A Participant's normal retirement pension equals 2% of the Participant's
Average Final Compensation multiplied by his Years of Accrual Service for service prior
to October 1, 2000, and 3% of the Participant's Average Final 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 Final 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 2.25%
October 1, 2006 2.50%
October 1, 2007 2.75%
October 1, 2008 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.
(d) Effective October 10, 2011, a participating General Employee's normal
retirement pension of a Participant other than a sworn police officer or firefighter or
forensic professional shall equal 3% of the Participant's Average Compensation
5
9.16.11
multiplied by Years of Accrual Service prior to October 1, 2011, and 2.5% of the
Participant's Average Compensation multiplied by Years of Accrual Service on and after
October 1, 2011. The normal retirement pension of a Participant employed as a sworn
police officer or firefighter or forensic professional shall equal 3% of the Participant's
Average Compensation multiplied by Years of Accrual Service. 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.
(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). Effective October 1, 2011 Average
Compensation shall be the average of the highest five (5) consecutive years of Plan
Compensation out of the ten (10) years immediately preceding termination of
employment. A Compensation period is the 12 -month period ending on the last day of the
Plan Year. Notwithstanding the above, a Participant's Average Compensation shall not
be less than his or her average compensation as of September 30, 2011.
Section 6.
That Article VI, Section 6.01 of the Defined Benefit Plan and Trust for Employees of the
City of Winter Springs be amended as follows:
6.01 Eligibility for Early Retirement Pension. A Participant as of September 30, 2011
who has received credit for at least 10 Years of Service (as defined in Section 8.06) and has
attained age 55 may elect an early retirement pension. A Participant as of September 30, 2011
who separates from service after satisfying the service requirement but not the age requirement
may elect to receive an early retirement pension upon satisfying the age requirement. In
addition, a Participant as of September 30, 2011 who has completed 25 Years of Service (as
defined in Section 8.06) may elect an early retirement pension.
A Participant employed after September 30, 2011 who has received credit for at least 15
Years of Service (as defined in Section 8.06), and has attained age 55 may elect an early
retirement pension. A Participant employed on September 30, 2011 who separates from service
after satisfying the service requirement but not the age requirement may elect to receive an early
retirement pension upon satisfying the age requirement. In addition, a Participant employed after
September 30, 2011 who has completed 25 Years of Service (as defined in Section 8.06) may
elect an early retirement pension.
6
9.16.11
The early retirement pension for a Participant is his or her Nonforfeitable Accrued
Benefit payable at Normal Retirement Date without actuarial reduction for early commencement
but only if benefits commence on or after the Participant attains age 55.
Notwithstanding the above, the early retirement pension for a Participant as of September
30, 2011 who has received credit for 10 or more Years of Service but less than 15 Years of
Service is the sum of his or her Nonforfeitable Accrued Benefit as of September 30, 2011
payable at Normal Retirement Date without actuarial reduction for early commencement plus his
or her Accrued Benefit payable at Normal Retirement Date earned after September 30, 2011 with
actuarial reduction for early commencement but only if benefits commence on or after the
Participant attains age 55.
If an eligible Participant elects to commence his early retirement pension prior to
attaining age 55, such Participant's early retirement pension is the Actuarial Equivalent of his
g g p Y p q
Nonforfeitable Accrued Benefit payable at age 55.
Section 7.
That Section 8.05 of the Defined Benefit Plan and Trust for Employees of the City of
Winter Springs be amended as follows:
8.05 Vesting Schedule.
(A) 100% Vesting Upon Certain Events. A Participant's Accrued Benefit is 100%
Nonforfeitable upon and after his attaining Normal Retirement Age (if employed on or after that
date). A Participant's Accrued Benefit is 100% Nonforfeitable if the Participant's separation
from Service is a result of death, disability or eligibility for an early retirement pension.
(B) 100% Vesting of Required Participant Contributions. Each Participant is immediately 100%
vested with respect to his Required Participant Contributions. A Participant is entitled to receive
a return of his Required Participant Contributions, contributed while a participant under the
money purchase plan prior to October 1, 2000, upon termination of 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, and effective October 1, 2003, 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 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, in lieu of any other benefit under the Plan. The amount received as a distribution by the
Participant shall be used to reduce the accrued benefit, if any, at his normal retirement date.
Required Participant contributions contributed on and after October 1, 2000 are 100% vested and
shall be included in the deferred vested benefit payable to the Participant upon normal retirement
date.
7
9.16.11
(C) Vesting Schedule prior to October 1, 2011. Subject to Section 8.05(A) and Section
8.05(B), a Participant's Nonforfeitable percentage in his Accrued Benefit equals the percentage
in the following schedule:
Nonforfeitable
Years of Service Percentage
Less than 3 None
3 20%
4 40%
5 60%
6 80%
7 or more 100%
(D) Vesting Schedule effective October 1, 2011. Effective October 1, 2011, and subject to
Section 8.05(A) and Section 8.05(B), a Participant's Nonforfeitable percentage in his Accrued
Benefit equals the percentage in the following schedule:
Nonforfeitable
Years of Service Percentage
Less than 7 None
7 or more 100%
Notwithstanding anything herein to the contrary, the Accrued Benefit of a Participant with at
least three (3) Years of Service on October 1, 2011 shall continue to vest in accordance with
Section 8.05(C).
(E)(1) Amendment to Vesting Schedule. Though the Employer reserves the right to amend the
vesting schedule at any time, the Retirement Committee will not apply the amended vesting
schedule to reduce the Nonforfeitable percentage of any Participant's Accrued Benefit derived
from Employer contributions (determined as of the later of the date the Employer adopts the
amendment, or the date the amendment becomes effective) to a percentage less than the
Nonforfeitable percentage computed under the Plan without regard to the amendment. An
amended vesting schedule will apply to a Participant only if the Participant receives credit for at
least one Hour of Service after the new schedule becomes effective.
If the Employer makes a permissible amendment to the vesting schedule, each Participant
having at least 3 Years of Service with the Employer may elect to have the percentage of his
Nonforfeitable Accrued Benefit computed under the Plan without regard to the amendment. The
Participant must file his election with the Retirement Committee within 60 days of the latest of
(1) the Employer's adoption of the amendment; (2) the effective date of the amendment; or (3)
his receipt of a copy of the amendment. The Retirement Committee, as soon as practicable, must
forward a true copy of any amendment to the vesting schedule to each affected Participant,
8
9.16.11
together with an explanation of the effect of the amendment, the appropriate form upon which
the Participant may make an election to remain under the vesting schedule provided under the
Plan prior to the amendment and notice of the time within which the Participant must make an
election to remain under the prior vesting schedule. The vesting schedule election does not apply
to a Participant if the amended vesting schedule provides for vesting at least as rapid at all times
as the vesting schedule in effect prior to the amendment.
(E) Forfeiture for Cause. The Plan does not permit a forfeiture for cause.
Section 8.
That Article VIII, Section 8.08 of the Defined Benefit Plan and Trust for Employees of
the City of Winter Springs be amended as follows:
8.08 Included Years of Service - Vesting. For purposes of determining "Years of
Service" under Section 8.06, the Plan takes into account all Years of Qualified Service credited
to a Participant pursuant to Section 5.02(B) and all Years of Service an Employee completes
with the Employer except:
(A) Any Year of Service completed before a Break in Service, unless the Employee
completes a Year of Service after the Break in Service. This Break in Service rule will not
operate to recredit any Year of Service disregarded under clause (B).
(B) Any Year of Service completed before a Break in Service if the number of the
Participant's consecutive Breaks in Service equals of exceeds the greater of 5 or the aggregate
number of the Years of Service prior to the Break. This Break in Service rule applies only if the
Participant is 0% vested in his Accrued Benefit derived from Employer contributions at the time
he has a Break in Service. Furthermore, the aggregate number of Years of Service before a
Break in Service does not include any Years of Service not required to be taken into account
under this exception by reason of any prior Break in Service. If the Retirement Committee
Retirement Committee disregards the Participant's Years of Service under this exception, the
Plan forfeits his pre -Break in Service Accrued Benefit.
(C) Any Year of Service before the Plan Year in which the Participant attained the age of 18.
(D) Any period of employment with the City during which the Employee participated in the
defined contribution plan established pursuant to Resolution 2011- 52.
Section 9.
That this resolution shall supersede any and all conflicting provisions of any previously
adopted resolutions.
9
9.16.11
Section 9.
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 10.
That this resolution shall take effect upon adoption.
PASSED and ADOPTED this 24 day of October, 2011.
Mme" 6 11•
f
AT' E` : -
-
'
" ' •� ERK
i
10
9.16.11
RESOLUTION NO. 2011-52
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 I OF THE DEFINED BENEFIT PLAN
TO REVISE THE DEFINITION OF "PLAN COMPENSATION ";
AMENDING ARTICLE II OF THE DEFINED BENEFIT PLAN TO
REVISE THE ELIGIBILTY PROVISIONS AND PROVIDE THAT
EMPLOYEES HIRED ON OR AFTER OCTOBER 1, 2011 SHALL NOT
PARTICIPATE IN THE DEFINED BENEFIT PLAN BUT SHALL
PARTICIPATE IN A DEFINED CONTRIBUTION PLAN; AMENDING
ARTICLE IV OF THE DEFINED BENEFIT PLAN TO PROVIDE FOR A
FIVE PERCENT CONTRIBUTION BY PARTICIPANTS; AMENDING
ARTICLE V OF THE DEFINED BENEFIT PLAN TO PROVIDE A TWO
AND ONE -HALF PERCENT BENEFIT MULTIPLIER FOR SERVICE ON
AND AFTER OCTOBER 1, 2011 FOR GENERAL GOVERNMENT
EMPLOYEES AND MODIFYING THE DEFINITION OF AVERAGE
COMPENSATION; AMENDING ARTICLE VI OF THE DEFINED
BENEFIT PLAN TO MODIFY THE ELIGIBILITY REQUIREMENTS
FOR AN UNREDUCED EARLY RETIREMENT BENEFIT; AMENDING
ARTICLE VIII OF THE DEFINED BENEFIT PLAN TO MODIFY THE
VESTING SCHEDULE; PROVIDING FOR CONFLICTS; PROVIDING
FOR SEVERABILITY; PROVIDING AN EFFECTIVE DATE.
WHEREAS, the City Commission of the City of Winter Springs has determined that
certain changes to the City's Defined Benefit Plan and Trust are in the best interest of the City,
its employees and taxpayers;
NOW, THEREFORE, BE IT RESOLVED BY THE CITY COMMISSION OF THE
CITY OF WINTER SPRINGS, FLORIDA:
Section 1.
That Article I, Section 1.10 of the Defined Benefit Plan and Trust for Employees of the
City of Winter Springs be amended as follows:
1.10 Compensation Definitions. Any reference in this Plan to Compensation is a
reference to the definition in this Section 1.10, unless the Plan reference specifies a modification
1
9.16.11
to this definition. The Retirement Committee will take into account only Compensation actually
paid for the relevant period.
(A) Total Compensation. "Total Compensation" means wages, salaries, and other amounts
received (whether or not paid in cash) for personal services actually rendered in the course of
employment with the Employer, but only to the extent included in gross income. This definition
includes, but is not limited to commissions, overtime pay and bonuses. With respect to the Plan
Years beginning prior to October 1, 1998, Total Compensation does not include elective
contributions. With respect to Plan Years beginning on and after October 1, 1998, Total
Compensation includes elective contributions. Total Compensation also does not include:
(1) Employer contributions to a plan of deferred compensation to the extent the
contributions are not included in the gross income of the Employee for the taxable year in
which contributed, on behalf of an Employee to a Simplified Employee Pension Plan to
the extent such contributions are excludible from the Employee's gross income, and any
distributions from a plan of deferred compensation, regardless of whether such amounts
are includible in the gross income of the Employee when distributed.
(2) Other amounts which receive special tax benefits, such as premiums for group
term life insurance (but only to the extent that the premiums are not includible in the
gross income of the Employee), or contributions made by an Employer towards the
purchase of an annuity contract described in Code §403(b) (whether or not the
contributions are excludible from the gross income of the Employee).
(B) Plan Compensation. Plan Compensation means Total Compensation described in Section
1.10(A), except that Plan Compensation includes elective contributions for all Plan Years. Plan
Compensation applies to determine a Participant's benefit formula and Accrued Benefit under
Article V. Effective October 10, 2011, Plan Compensation means base salary including overtime
pay up to one hundred fifty (150) hours in a Plan Year, and excluding all other forms of
compensation.
Section 2.
That Article II, Section 2.01 of the Defined Benefit Plan and Trust for Employees of the
City of Winter Springs be amended as follows:
2.01 Eligibility. Each Employee (other than an Excluded Employee) becomes a Participant in
the Plan on the first day of the month (if employed on that date) immediately following the date
6 months after his Employment Commencement Date. "Employment Commencement Date"
means the date on which the Employee first performs an Hour of Service for the Employer.
Notwithstandin • an other .rovision of this Plan, any Employee other than a sworn police
officer and Forensic Professional hired on or after October 1, 2011, shall not be eligible to
participate in this Plan. Any Employee other than a sworn police officer or forensic professional
hired on or after October 1, 2011, shall participate in the defined contribution plan established
2
9.16.11
pursuant to Resolution 2011 -52, if eligible to participate in the defined contribution plan.
Employees hired as sworn police officers or forensic professional on or after October 1, 2011
shall participate in this Plan.
(A) Excluded Employee
(1) An Employee is an Excluded Employee if his customary weekly employment
with the Employer is less than 29 hours. An Employee is an Excluded Employee if he is
actively participating (and "benefiting" within the meaning of Treas. Reg. § 1.410(b) -3)
in another qualified plan maintained by the Employer other than the Money Purchase
Pension Plan and Trust for Employees of the City of Winter Springs, Florida (hereinafter
referred to as the "Money Purchase Plan ").
(2) If a Participant has not incurred a Separation from Service but becomes an
Excluded Employee, then during the period such a Participant is an Excluded Employee,
the Participant will not accrue a benefit under the Plan attributable to any period during
which he is an Excluded Employee. However, during such period of exclusion, the
Participant, without regard to employment classification, continues to receive credit for
vesting under Article VIII for each included Year of Service.
(3) If an Excluded Employee who is not a Participant becomes eligible to participate
in the Plan by reason of a change in employment classification, he will participate in the
Plan immediately if he has satisfied the eligibility conditions of Section 2.01 and would
have been a Participant had he not been an Excluded Employee during his period of
Service. Furthermore, the Plan takes into account all of the Participant's included Years
of Service with the Employer as an Excluded Employee for purposes of vesting credit
under Article VIII.
(B) Employees with Non - Contributing Service. Any Employee who completed Years of
Service prior to adoption of Resolution No. 2003 -44, but did not make contributions to this Trust
Fund or to the Money Purchase 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 Plan for such service.
Section 3.
That Article II, Section 2.03 of the Defined Benefit Plan and Trust for Employees of the
City of Winter Springs be amended as follows:
3
9.16.11
2.03 Participation upon Re- employment. A Participant whose employment terminates
and who is subsequently reemployed prior to October 1, 2011 will re -enter the Plan as a
Participant on the date of his re- employment. An Employee other than a sworn police officer or
forensic professional who satisfies the Plan's eligibility conditions but who terminates
employment with the Employer prior to becoming a Participant will, upon reemployment,
participate in the defined contribution plan established pursuant to Resolution 2011 -52, in
accordance with the terms and conditions therein provided. beeen}e --a- Participant on the later of
or the date of his reemployment. Any Employee other than a sworn police officer or forensic
professional who terminates employment prior to satisfying the Plan's eligibility conditions and
who is subsequently reemployed on or after October 1, 2011 shall participate in the defined
contribution plan established pursuant to Resolution 2011 -52, in accordance with the terms and
conditions therein provided.. - - ' . .. - . .. - .. • - - - , .
2.01. Any Employee employed as a police officer or forensic professional who terminates
employment prior to satisfying the Plan's eligibility conditions and who is subsequently
reemployed becomes a Participant in accordance with the provisions of Section 2.01.
Section 4.
That Article IV, Section 4.01 of the Defined Benefit Plan and Trust for Employees of the
City of Winter Springs be amended as follows:
4.01 Required Participant Contributions. The Plan did not permit nor require
Participant Contributions prior to October 1, 2000. Effective October 1, 2000, each Participant is
required to contribute 3% of Compensation to the Plan, which contribution shall be considered
the Required Participant Contribution. Effective October 10, 2011, each Participant is required
to contribute 5% of Compensation to the Plan, which contribution shall be considered the
Required Participant Contribution. The required participant contribution shall be deducted from
each Participant's Compensation whenever such Compensation is paid, and remitted to the
Trustee. Required participant contributions shall be considered an Employer "pick -up"
contribution and shall be designated as employer contributions pursuant to Section 414(h) of the
Internal Revenue Code, contingent upon the contributions being excluded from the Participant's
gross income for federal income tax purposes. For all other purposes of this Plan, such
contributions shall be considered Participant contributions.
4
9.16.11
Section 5.
That Article V, Section 5.02 of the Defined Benefit Plan and Trust for Employees of the
City of Winter Springs be amended as follows:
5.02 Amount of Normal Retirement Pension/Accrued Benefit. The Annual Benefit
limitations of Article III apply to the determination of a Participant's normal retirement pension
and Accrued Benefit in the manner prescribed in Section 3.05(H).
(A) Normal Retirement Pension.
(1) Benefit Formula
(a) A Participant's normal retirement pension equals 2% of the Participant's
Average Final Compensation multiplied by his Years of Accrual Service for service prior
to October 1, 2000, and 3% of the Participant's Average Final 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 Final 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 2.25%
October 1, 2006 2.50%
October 1, 2007 2.75%
October 1, 2008 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.
(d) Effective October 10, 2011, a participating General Employee's normal
retirement pension of a Participant other than a sworn police officer or firefighter or
forensic professional shall equal 3% of the Participant's Average Compensation
.5
9.16.11
multiplied by Years of Accrual Service prior to October 1, 2011, and 2.5% of the
Participant's Average Compensation multiplied by Years of Accrual Service on and after
October 1, 2011. The normal retirement pension of a Participant employed as a sworn
police officer or firefi ter or forensic srofessional shall esual 3% of the Partici I ant's
Average Compensation multiplied by Years of Accrual Service. 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.
(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). Effective October 1, 2011 Average
Compensation shall be the average of the highest five (5) consecutive years of Plan
Compensation out of the ten (10) years immediately preceding termination of
employment. A Compensation period is the 12 -month period ending on the last day of the
Plan Year. Notwithstanding the above, a Participant's Average Compensation shall not
be less than his or her average compensation as of September 30, 2011.
Section 6.
That Article VI, Section 6.01 of the Defined Benefit Plan and Trust for Employees of the
City of Winter Springs be amended as follows:
6.01 Eligibility for Early Retirement Pension. A Participant as of September 30, 2011
who has received credit for at least 10 Years of Service (as defined in Section 8.06) and has
attained age 55 may elect an early retirement pension. A Participant as of September 30, 2011
who separates from service after satisfying the service requirement but not the age requirement
may elect to receive an early retirement pension upon satisfying the age requirement. In
addition, a Participant as of September 30, 2011 who has completed 25 Years of Service (as
defined in Section 8.06) may elect an early retirement pension.
A Participant employed after September 30, 2011 who has received credit for at least 15
Years of Service (as defined in Section 8.06), and has attained age 55 may elect an early
retirement pension. A Participant employed on September 30, 2011 who separates from service
after satisfying the service requirement but not the age requirement may elect to receive an early
retirement pension upon satisfying the age requirement. In addition, a Participant employed after
September 30, 2011 who has completed 25 Years of Service (as defined in Section 8.06) may
elect an early retirement pension.
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The early retirement pension for a Participant is his or her Nonforfeitable Accrued
Benefit payable at Normal Retirement Date without actuarial reduction for early commencement
but only if benefits commence on or after the Participant attains age 55.
Notwithstanding the above, the early retirement pension for a Participant as of September
30, 2011 who has received credit for 10 or more Years of Service but less than 15 Years of
Service is the sum of his or her Nonforfeitable Accrued Benefit as of September 30, 2011
payable at Normal Retirement Date without actuarial reduction for early commencement plus his
or her Accrued Benefit payable at Normal Retirement Date earned after September 30, 2011 with
actuarial reduction for early commencement but only if benefits commence on or after the
Participant attains age 55.
If an eligible Participant elects to commence his early retirement pension prior to
attaining age 55, such Participant's early retirement pension is the Actuarial Equivalent of his
Nonforfeitable Accrued Benefit payable at age 55.
Section 7.
That Section 8.05 of the Defined Benefit Plan and Trust for Employees of the City of
Winter Springs be amended as follows:
8.05 Vesting Schedule.
(A) 100% Vesting Upon Certain Events. A Participant's Accrued Benefit is 100%
Nonforfeitable upon and after his attaining Normal Retirement Age (if employed on or after that
date). A Participant's Accrued Benefit is 100% Nonforfeitable if the Participant's separation
from Service is a result of death, disability or eligibility for an early retirement pension.
(B) 100% Vesting of Required Participant Contributions. Each Participant is immediately 100%
vested with respect to his Required Participant Contributions. A Participant is entitled to receive
a return of his Required Participant Contributions, contributed while a participant under the
money purchase plan prior to October 1, 2000, upon termination of 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, and effective October 1, 2003, 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 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, in lieu of any other benefit under the Plan. The amount received as a distribution by the
Participant shall be used to reduce the accrued benefit, if any, at his normal retirement date.
Required Participant contributions contributed on and after October 1, 2000 are 100% vested and
shall be included in the deferred vested benefit payable to the Participant upon normal retirement
date.
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(C) Vesting Schedule prior to October 1, 2011. Subject to Section 8.05(A) and Section
8.05(B), a Participant's Nonforfeitable percentage in his Accrued Benefit equals the percentage
in the following schedule:
Nonforfeitable
Years of Service Percentage
Less than 3 None
3 20%
4 40%
5 60%
6 80%
7 or more 100%
(D) Vesting Schedule effective October 1, 2011. Effective October 1, 2011, and subject to
Section 8.05(A) and Section 8.05(B), a Participant's Nonforfeitable percentage in his Accrued
Benefit equals the percentage in the following schedule:
Nonforfeitable
Years of Service Percentage
Less than 7 None
7 or more 100%
Notwithstanding anything herein to the contrary, the Accrued Benefit of a Participant with at
least three (3) Years of Service on October 1, 2011 shall continue to vest in accordance with
Section 8.05(C).
(E)(D) Amendment to Vesting Schedule. Though the Employer reserves the right to amend the
vesting schedule at any time, the Retirement Committee will not apply the amended vesting
schedule to reduce the Nonforfeitable percentage of any Participant's Accrued Benefit derived
from Employer contributions (determined as of the later of the date the Employer adopts the
amendment, or the date the amendment becomes effective) to a percentage less than the
Nonforfeitable percentage computed under the Plan without regard to the amendment. An
amended vesting schedule will apply to a Participant only if the Participant receives credit for at
least one Hour of Service after the new schedule becomes effective.
If the Employer makes a permissible amendment to the vesting schedule, each Participant
having at least 3 Years of Service with the Employer may elect to have the percentage of his
Nonforfeitable Accrued Benefit computed under the Plan without regard to the amendment. The
Participant must file his election with the Retirement Committee within 60 days of the latest of
(1) the Employer's adoption of the amendment; (2) the effective date of the amendment; or (3)
his receipt of a copy of the amendment. The Retirement Committee, as soon as practicable, must
forward a true copy of any amendment to the vesting schedule to each affected Participant,
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together with an explanation of the effect of the amendment, the appropriate form upon which
the Participant may make an election to remain under the vesting schedule provided under the
Plan prior to the amendment and notice of the time within which the Participant must make an
election to remain under the prior vesting schedule. The vesting schedule election does not apply
to a Participant if the amended vesting schedule provides for vesting at least as rapid at all times
as the vesting schedule in effect prior to the amendment.
(E) Forfeiture for Cause. The Plan does not permit a forfeiture for cause.
Section 8.
That Article VIII, Section 8.08 of the Defined Benefit Plan and Trust for Employees of
the City of Winter Springs be amended as follows:
8.08 Included Years of Service - Vesting. For purposes of determining "Years of
Service" under Section 8.06, the Plan takes into account all Years of Qualified Service credited
to a Participant pursuant to Section 5.02(B) and all Years of Service an Employee completes
with the Employer except:
(A) Any Year of Service completed before a Break in Service, unless the Employee
completes a Year of Service after the Break in Service. This Break in Service rule will not
operate to recredit any Year of Service disregarded under clause (B).
(B) Any Year of Service completed before a Break in Service if the number of the
Participant's consecutive Breaks in Service equals of exceeds the greater of 5 or the aggregate
number of the Years of Service prior to the Break. This Break in Service rule applies only if the
Participant is 0% vested in his Accrued Benefit derived from Employer contributions at the time
he has a Break in Service. Furthermore, the aggregate number of Years of Service before a
Break in Service does not include any Years of Service not required to be taken into account
under this exception by reason of any prior Break in Service. If the Retirement Committee
Retirement Committee disregards the Participant's Years of Service under this exception, the
Plan forfeits his pre -Break in Service Accrued Benefit.
(C) Any Year of Service before the Plan Year in which the Participant attained the age of 18.
(D) Any period of employment with the City during which the Employee participated in the
defined contribution plan established pursuant to Resolution 2011- 52.
Section 9.
That this resolution shall supersede any and all conflicting provisions of any previously
adopted resolutions.
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Section 9.
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 10.
That this resolution shall take effect upon adoption.
PASSED and ADOPTED this 24 day of October, 2011.
M
AT ' E
ERK
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