HomeMy WebLinkAbout1995 01 31 Regular
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CITY OF WINTER SPRINGS, FLORIDA
1126 EAST STATE ROAD 434
WINTER SPRINGS. FLORIDA 32708-2799
Telephone (407) 327.1800
January 17, 1995
Mr. Phil G. Robert
Trust Investment Officer
SunBank Capital Management
200 South Orange Avenue
P.O. Box 3786
Orlando, Florida 32802
Re: City of Winter Springs
Money Purchase Pension Plan
The regular quarterly meeting of the Plan Trustees will be held
Tuesday, January 31, 1995 at 7:30 P.M. at the City of Winter
Springs, 1126 East S.R. 434, City Hall conference room.
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After confirming the minutes of the meeting of October 27,1994, we
wi 11 review the performance of the past quarter of the PI an
investments. We ask that you or a representative attend to provide
information for this review.
We will also review the methods of evaluating an employees' account
at the time he or she terminates employment by reason of
retirement, death, disabi I i ty, or for other vol untary or
involuntary reasons. This review will assist in our considering
the benefits of proposing a semi-annual plan account evaluation.
The Trustees will also discuss any other plan matters appropriate
to their responsibilities.
Art Hoffman ,
Chairman, Board of Trustees
AH/saf
cc: Board of Trustees
City Manager
Employee Relations Coordinator
Finance Director
Thomas Lang, Attorney
Frank Kruppenbacher, City Attorney
Dianne Garcia, Sun Bank Trust Officer
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:MEMORANDUM
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JAN 1 9 19951
TO:
John Govoruhk
CITY OF WINTER SPRINGE
City Manager
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fJ l31V5JtJ,v t3r/ /ltf D
Pi?1Z ~t?;V/YEL
F//V' AI1r?E-
Attached for your information is a copy of the letter that was sent to Mr. Richard
Rozansky. I would appreciate your assistance in having your assistant distribute the remainder of
the copies to :Mayor Bush and the City Commissioners.
FROM:
Frank Kruppenbacher, Esq.
DATE:
January 18, 1995
RE:
Letter to Richard Rozansky
Thank you.
Law Offices
KRUPPENBACHER & ASSOCIATES
A Professional Association
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Frank Kruppenbacher
340 North Orange Avenue
P.O. Box 3471
Orlando, Florida 32802-3471
Telephone (407) 246-0200
Facsimile (407) 426-7767
January 19, 1995
Mr. Richard Rozansky
5801 Edouard Street
Oviedo, FL 32765
Re: Your letter to Mayor Bush of January 12, 1995
Dear Dick:
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Your above-referenced letter of January 12, 1995, has been referred to me for reply. Your
prior letter of August 23, 1994, was provided to the pension advisors for reply, but apparently you
have received no reply to date.
In answering your questions, we have conferred with Tom Lang, Sun Bank, and Harry
Martin. As we understand your question and the explanation provided to Mr. Lang by Harry Martin,
Mr. Lang has advised the City Manager and me of the following:
To the extent you had money in the Plan on the last day of the year, you share on a percentage
basis in the investment earnings for the Plan Year. If you withdraw during the Plan Year, you do not
share in the investment earnings. You received interest investment earnings for 1993, but did not
receive them for 1994.
Hopefully, this letter answers your question. !fit does not, please contact Tom Lang at Wells,
Allen, Lang & Morrison, P .A, to provide him any further details or to seek clarification.
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FCK:lmc
cc: Mayor, City Manager, City Commissioners,
City of Winter Springs, Florida
Thomas F. Lang, Esq.
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CITY OF WINTER SPRINGS, FLORIDA
1126 EAST STATE ROAD 434
WINTER SPRINGS, FLORIDA 32708-2799
Telephone (407) 327-1800
February 6, 1995
Conunission
John Govoruhk, City Manager
Board of Trustees/Pension Plan
Frank Kruppenbacher, City Attorney
Re: Trustees Suggested Changes in Pension Plan Document
At the January 31st meeting of the Board of Trustees, changes to
the Plan Document were discussed. The following changes were
approved for consideration by the Conunission.
1. A semi-annual account evaluation so that employees leaving for
any reason would not lose their vested pension amount accumulated
in the period from their leaving month, back to the previous
valuation date, a maximum of eleven (11) months to a maximum of
,-. only five (5) months. If paragraph 1.36 is changed to have
valuation dates of March 31st and September 30th, the Plan
administration fee would rise $ 578.00 as indicated in Sun Bank's
letter of December 6, 1994 from Ms. Garcia.
2. If semi-annual valuations are approved, the words "Plan Year"
would have to be changed to, "Valuation Date" in paragraphs, 2.04,
6.01, 6.02 (a), 6.03 (a), 6.04 (a), etc.
3. The Trustees also approved that the conunission consider a plan
change to permit employees who terminate employment for any reason,
to be permitted to request within thirty (30) days of that date to
have their vested pension amount accumulate up to the last full
month of employment, and to remain in the Plan unti 1 the next
valuation date when the termination occurs in a month that did not
have an account val uation. (i. e., not in March or September) Thus,
employees, if they elect, would not lose the maximum of the last
five (5) months of their accumulated vested pension.
4. The Plan Sununary document dated 1989 should be updated to show
whether these changes are adopted or not. Copies should be given
to all employees at the next valuation date or sooner.
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5. The IRS Model Notice given to all terminating employees is
legal, but quite detailed and extensive. Our Plan attorney should
draft a 1 egal, but non-binding summary of that notice to al ert
those employees to read the sections regarding the consequences of
accepting a lump sum set t I ement verses a di rect transfer (roll
over) to an IRA, regarding taxes, etc..
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Trustees Suggested Changes
in Pension Plan Document
February 3, 1995
Page 2
6. Plan Summary section 13 (c) indicates Plan payouts must
commence within sixty (60) days after the Plan Year. To assure
that this directive is met, the Finance Director should fully
computerize all accounts updated to the last pay period, so that
the Plan Administrator, (SunBank) can complete the account
val uations expedi tiousl y, and issue the annual report. Section
4.01 (e) of the Plan would have to be revised so that employees
receive their valuations much sooner than the (210) days following
September 30th as is now shown.
7. Section 4.01 should be revised to agree with previous
suggestions that non-vested amounts which an employee forfei ts when
he terminates should remain in the Plan, and not be used to reduce
the employer's (City's) next contribution(s).
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8. A previous request concerned a terminated employee being
rehired. The Plan paragraphs 6.04 (d) and 6.04 (e) permits such
employees to re-enter the plan if rehired within five (5) years of
termination, and upon returning any distributions in full. Is it
legal to require the returning employee to forfeit his non-vested
amount rather than to reclaim it, and/or can the maximum gap in
service be reduced to one (1) year rather than five (5) years?
The Trustees ask the Attorney and Commission to review these
suggestions at their earliest convenience.
Sincerely
Arthur H. Hoffmann, Chairperson
Board of Trustees/Winter Springs Pension Plan
AHH/saf
enclosures: Garcia Letter, December 6, 1994 (3 pgs.)
1989 Plan Summary (9 Pgs.)
IRS Model Notice (2 Pgs.)
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Trust and Investment Services Group
Corporate Employee Benefits Division
P.O. Box 3808
Orlando, Florida 32802
407237-4254
December 6, 1994
Mr. Arthur Hoffmann
Chairman
City of Winter Springs
1126 East State Road 434
Winter Springs, FL 32708
Re: City of Winter Springs
Money Purchase Pension Plan
Dear Mr. Hoffmann:
Per your request, I have attached a worksheet indicating the
estimated cost for employee valuations. The calculations are
shown for annual, semiannual, and quarterly processes. As we
have discussed in the past, in order for you to change from the
current annual valuation process, your document would have to
allow for more frequent calculations. Your attorney can amend
the Plan, if necessary, to allow for any changes that you would
like to make.
The earnings on your Money Purchase Pension Plan are allocated to
all participants at specific periods as specified in your docu-
ment. The employee would receive any earning/losses due to his
balance as long as his vested portion is still in the Plan at
year-end. The same would be true if you used a semiannual or
quarterly valuation cycle. For example, if Joe Smith terminated
August 31 and did not take his distribution until after the
September 30 year-end, his balance would be eligible for
earnings/losses. If he terminated on August 31 and took his
distribution of benefits pri0r to September 30, he would forfeit
any earnings for the Plan year in which he took his distribution.
He would not receive earnings at September 30. The same would be
true using the quarterly valuation cycle. If Joe Smith
terminated on May 15 and wanted his distribution immediately, he
would receive his balance as of the prior quarter (March 31). If
he left his money in the Plan until after June 30 (the next
quarter-end), he would get the earnings/losses for the quarter
ending June 30.
The valuation process is calculated for all participants. We
cannot process a valuation for one or two participants at a time,
nor can the calculations be done out of cycle on a Money Purchase
Pension Plan. Many Municipalities utilize the Defined Benefit
form of Pension Plan, which are actuarially calculated. This
type of Plan is based on future benefits and can be calculated
for one participant at any given time.
A SunTrust Bank
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Page 2
Mr. Arthur Hoffmann
December 6, 1994
I hope that this information answers your questions regarding
valuations within your Plan. If you have any questions, please
do not hesitate to call me.
Sincerely,
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Dianne Garcia
Trust Officer
cc: Tim Helsel
SunBank, N.A.
:3 MODEL NOTICE
ecial Tax'Notice
garding Plan Payments
; noti~tains important information you will need before you
de hi ) receive your benefits from your company's retirement plan .
'PIan"J-
7\a.rY
, }'tl'\'mt from the Plan that is eligible for 'rollover" can be taken in two
s. You can have all or any portion of your payment either 1) P AlD IN
:zEct ROLLOVER" or 2) P AlD TO YOU. A rollover is a payment 0/
. ?1a.n benefits to your individual retirement arrangement (IRA) or to
er employer plan. !his choice will affect the tax yo,=, owe.
;u choose a DIRECT ROLLOVER
'{our payment will not be taxed in the current year and no income tax
."ill be withheld.
! our payment will be made directly to your IRA or, if you choose, to
mother employer plan that accepts your rollover.
::'our payment will be taxed later when you take it out of the IRA or the
~m?loyer plan.
'u choose to have your Plan benefits P AlD TO YOU
(ou will receive only 80% of the payment. because the Plan
lcUr..ir.istrator is required to withhold 20% of the payment and send it
,:) the IRS as income tax withholding to be credited against your taxes.
'our payment will be taxed in the current year unless you roll it over.
.ou may be able to use special tax rules that could reduce the tax you
lwe. However, if you receive the payment before age 59'h.. you also
nay rl...."to pay an additional 10% tax.
.. ou em ron over the payment by paying it to your IRA or to another
c:'.?loyer'plan that accepts your rollover within 60 days oE receiving
;.c! payment. The amount rolled over will not be taxed until you take it
.ut of the IRA or employer plan.
f you want to roll over 100% of the payment to an IRA or an employer
'bn. yau mllst find olliff money to replaa the 20% that was witltheld. U.
ou roll over only 80% that you received, you will be taxed on the 20%.
:.at was withheld and that is not rolled over.
yments 1bat Can and Cannot be Rolled OVer
lents from the Plan may be 'eligJ"le rollover distributions.' This
l.S tha t they can be rolled over to an IRA or to another employer plan
la:epts rollovers. Your Plan administrator should be able to tell you
'?Ortion of YOlU payment is an eligJ"le rollover distribution. The
';.,g types of payments CANNOT be rolled over:
.;~ab~ Payments. In general. only the "taxable portion' oE your
;nt is an eligible rollover distnbution. U you have made "after-tax"
:l yee contributions to the Plan. these contributions will be non-taxable
'.!-ey are paid to you. and they cannot be rolled over. (After-tax
yet: c;ontributions generally are contributions you made from your
~y that were already taxed.)
=::s 5prud OrIer Long Periods. You cannot roll over a paYment if it
't CJi. series oE equal (or almost equal) payments that are made at least
'. -:ear and that will last tor
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lOur me (or your lile expectancy), or
.'our lifetime and your beneficiary's lifetime (or lile expectancies), or
I period of ten year.s or more.
r-d ~'Uni1JUlm Paymnrts. Beginning in the year you reach age 70 1/2.
:t:.n Fcrtion of your payment cannot be rolled over because it is .
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II. Direct Rollover
You can choose a direct rollover of all or any portion of your payment that
is an 'eligible rollover distribution," as described above. In a direct
rollover, the eligible rollover distribution is paid directly from the PIan to
an IRA or another employer plan that accepts rollovers. U you choose a
direct rollover, you are not taxed on a payment until you later take it out of
the IRA or the employer plan.
Direct Rollwa' to IIn IRA. You can open an IRA to receive the direct
rollover. (Ibe term "IRA," as used in this notice, includes individual
retirement accounts and individual retirement annuities.) U you choose to
have your payment made directly to an IRA, contact an IRA sponsor
(:us:ually . financial institution) to find out how to have your payment
made in a direct rollover to an IRA at that institution. U you are url.SUre oE
how to invest your money, you can temporarily establish an IRA to receive,
the payment. However, in choosing an IRA, you may wish to consider
whether the IRA you choose will allow you to move all or a part of your
payment to another IRA at a later date, without penalties or other
limitations. See IRA Publication 590, IndWidual &timnent Arnzn~nts, for
more information on lRAs (including limits on how ohen you can roll over
between IRAs). .
Direct RolIwa' to II Plan. U you are employed by a new employer that has
a plan, and you want a direct rollover to that plan, ask the administrator of
that plan whether it will accept your rollover. An employer plan is not
legally required to accept a rollover. Ii your new employer's plan does not
accept a rollover, you can choose a direct rollover to an IRA.
Direct RolIl1t1a' of II Series of Paymnrts. If you receive eligible rollover
distnoutions that are paid in a series for less than ten years, your choice to
make or not make a direct rollover for a payment will apply to all later
payments in the series until you change your election. You are free to
change your election for any later payment in the series.
III. Payment Paid To You
If you have the payment made to you, it is subject to 20% income tax
withholding. The payment is taxed in the year you receive it unless, within
60 days, you roll it over to an IRA or another plan that accepts rellovers. U
you do not roll it over, special tax rules may apply.
Income Tax Withholding:
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MAndatory Withholding. If any portion of the-payment to you is an
eligJole rollover distribution, the Plan is required by law to withhold 20%
of that amount. This amount is sent to the IRS as income tax withholding.
For' ~ple, if your eligJole rollover distrIbution is 510,000, only $8,000
will be paid to you because the Plan must withhold 52.000 as income tax. ,
However, when you prepare your income tax return lor the year, you will
report the full $10,000 as a payment from the Plan. You will report the
52.000 as tax withheld, and it will be credited against any income tax you .
owe for the year.
Volll1Jtary Withholding. U any portion ol your payment is not an eligtcle
rollover distribution but is taxable, the mandatory' withholding rules
described above do not apply. In this case, you may elect not to have
withholding apply to that portion. To elect out of withholding. ask ~e
Plan administrator for the election form and related information. .
Sixty-Day Rollat1er Option. If you have an eligt"le rOllov~ diStribution . .'
paid to you. you can still decide to roll over all or p~ of jt to an IRA or --
another employer plan that accepts rollovers. U you decide to roll over, yau
mllSt nuzJce the rollava wit/un 60 dsrJp after you rrt:lriw tl/4 payment. The
portion of your payment that is roUed OVf?:l' will not be taxed urltU you take
it out of the IRA or the employer plan.
You can roll over up to 100% of the eligJ"le rollover distribution. including
an amount equal to the 20% that was withheld. IE you choose to roll over
100%, you must find other money within the 6O-day period to contribute to
the IRA or the employer plan to replace the 20% that was withheld. On the
other hand, if you roll over onl}' the 80% that you received. you will be
taxed on the 20% that was withheld.
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ample: Your eligible rollover distribution is 510,000. and you ct\o<lse
have it paid to you. You will receive 58,000, and 52.000 will be sent to
~ IRS as income tax withholding. Within 60 days after receiving the .
,000. you may roll over the entire 510,000 to an IRA or employer plan.
I do this. you roll over the 58,000 you received from the Plan. and you
ill have to find 52.000 from other sources (your savings, a loan. etc.). In
is case. the entire 510,000 is not taxed until you take it out of the IRA or
nployer plan. If you roll over the entire 510,000, when you file your
come tax return you may get a refund of the 52.000 withheld.
. on the other hand, you roll over only 58,000, the 52.000 you did not
III over is taxed in the year it was withheld. When you file your income
LX return you may get a refund of part of the 52.000 withheld. .
-Iowever, any refund is likely to be larger if you roll over the entire
10.000.)
litional1DIfo Ta.x If Yo II. A.n under A.ge 59th. If you receive a payment
Jre you reach age 591h and you do not roll it over, then, in addition to
regular income tax, you may have to pay an extra tax equal to 10% of
taxable portion of the payment. The additional 10% tax does not apply
fOUr payment if it is (1) paid to you because you separate from ~ce
h your employer during or after the year you reach age 55, (2) paId .
:.ause you retire due to disability, (3) paid to you as equal (or almost
lal) payments over your life or life expectancy (or your and your
,eficiary'S lives or life expectancies), or (4) used to pay certain medical
;>enSeS. ~ IRS Form 5329 for more information on the additional 10%
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ecial Tax Treatment. If your eligible rollover distribution is not rolled
er, it will be taxed in the year you receive it. However, if it qualifies as a
I.II\p sum distribution." it may be eligible for special tax treatment. A
enp sum distribution is a payment, within one year, of your entire balance
Ider the Pian (and certain other similar plans of the employer) that is
Iyable to you because you have reached age 591h or have separated from
rvke with your employer (or, in the case of a selI-employed individual.
~ause you have reached age 591h or have became disabled). For a
lyment to qualify as a lump sum distribution. you must have been a
uticipant in the Plan for at least 5 years. The special tax treatment for
=p sum distributions is described below.
Fil1t:-Year Af1eraging. Ii you receive a lump sum distribution after you
are age 59th. you may be able to make a one-time election to figure the
tax on the payment by using "S.year averaging". Five-year averaging
often reduces the tax you owe because it treats the payment much as if it
were paid over 5 years. I
Tm-YearA.1Jeraging If You Were Born Before January 1,1936. liyou
receive a lump sum distribution and you were bom before January 1,
1936. you can make a one-time election to figut'\! the tax on the payment
by using "lO-year averaging" (using 1986 tax rates) instead of s.year
averaging (using current tax rates). Like the s.year averaging rules, 10-
year averaging often reduces the tax you owe.
Capit41 GlZin Treatment IfYoll Wne Born Before January 1,1936. In
addition. if you receive a lump sum distribution and you were bom .
before January 1, 1936, you may elect to have the part of your payment
that is attributable to your pre-1914 participation in the Pian (if any)
taxed as long-term capital gain at a rate of 20%.
There are other limits on the special tax treatment for lump sum
distributions. For example, you can generally elect this special tax
treatment only once in your lifetime, and the election applies to all lump
5Um distributions that you receive in that same yeu. If you have. .
previously roned over a payment from the Plan (Ot' certain other similar
plans of the employer), you cannot use this special tax treatment for later
payments from the Plan. If you ron over your payment to an IRA. you will
not be able Ie:! use this special tax treatment for later payments from the
I RA. Also. if you roll over only a portion of your payment to an IRA. this
s-oecial tax treatment is not available for the rest of the payment. ..
Additional restrictions are described in IRS Form 4972. which has more
i..-uormation on lump 5Um distributions and how you elect the special tax
treatment.
Emplayer Slack or S4!curiti4!s. There is a special rule for a payment from
:he Plan that includes employer stock (or other employer securities). To
u.::te' u.~ .;)t",=,,-,UJ.J,.. ....-, .1 _4_ r -J-
distribution. as described above (or would 'qualify except that you do not
yet have 5 years of participation in the Pian), or 2) the employer stock
included in the payment must be attributable to "after-tax. employee
contributions. if any. Under this special rule, you may have the option of
not paying tax on the "net unrealized appreciation. of the stock until you
sell the stock. Net unrealized appreciation generally is the increase in the
value of the employer stock while it was held by the Plan. For example, if
employer stock was contributed to your Plan account when the stock was
worth Sl.ooo but the stock was worth Sl,200 when you received it, you
would not have to pay tax on the S200 increase in value until you later sold
the stock.
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You may instead elect not to have the special rule apply to the net .
unrealized appreciation. In this case, your net unrealized appreciation will
be taxed in the year you receive the stock. unless you roll over the stock.
The stock (including any net utlIealized appreciation) can be rolled over to
an IRA or another employer plan either in a direct rollover or a rollover
that you make yourselI.
If you receive employer stock in a payment that qualifies as a lump sum
distribution. the special tax treatment for lump sum distributions
described above (such as s.year averaging) also may apply. See IRS Form
4972 for additional information on these rules.
IV. Surviving Spouses, Alternate Payees, and Other
Beneficiaries.
In general. the rules summarized above that apply to payments to
employees also apply to payments to surviving spouses of employees and
to spouses or former spouses who are "alternate payees." You are an
alternate payee if your interest in the Plan results from a "qualified
domestic relations order," which is an order issued by a court, usually in
connection with a divorce or legal separation. Some of the rules
su.mmarized above also apply to a deceased employee's beneficiary who is
not a spouse. However. there are some exceptions for payments to
surviving spouses, alternate payees, and other beneficiaries that should be
mentioned.
If you are a surviving spouse, you may chose to have an eligible rollover
distribution paid in a direct rollover to an IRA or paid to you. If you have
the payment paid to you, you can keep it or roll it over yourself to an IRA
but you cannot roll it over to an employer pIan. If you are an alternate
payee, you have the same choices as the employee. thus, you can have the
payment paid as a direct rollover or paid to you. If you have it paid to you,
you can keep it or roll it over to yourself to an IRA or to another employer.
pian that accepts rollovers. If you are a beneficiary other than a surviving
.-spouse, you CANNOT choose a direct rollover, and you CANNOT roll
over the payment yourselI.
If you are a surviving spouse. an alternate payee, or another beneficiary,
your payment is not subject to the additional 10% tax described. in ~tion
III above, even if you are younger than age 59'h.
If you are a surviving spouse, an alternate payee, or another ben~ciary~ :' .
you may be able to use the special tax treatment for lump sum distributions' .'
and the special rule for payments that include employer stock. as described
in section 1Il above. If you receive a payment because of the employee's
death. you may be able to treat the payment as a lump swn dist:ribution.~. -
the employee met the appropriate a ge requirements, whether or not the
employee had 5 years of participation in the Plan. .
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How To Obtain Additional Information. -
This notice SWIUX'lllriZes only the federal (not state or local) t;aX- rules that
might apply to your payment. The rules described a~ve are ~p~ex and
contain many conditions and exceptions that are not 1I\clu~ed In this .'
notice. Therefore, you may want to consult with a profe5SlonaI taX adV\SOr
befon you take a payment of your benefits from the Plan. Also, you can
find more specific information on the taX treatment of payments ~
qualified retirement plans in IRS Publication 575, pension and ~wt'l
lncome and IRS Publication 590. Individual Retirement An"M!lZetne:'ts.
~ublications are available from your local IRS office or by calling 1-
800- TAX-FORMS.
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SUMMARY PLAN DESCRIPTION OF
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PENSION PLAN AND TRUST
OF
THE CITY OF WINTER SPRINGS
1. Name of Plan:
Pension Plan and Trust for Employees of the City of Winter
Springs.
2. Purpose of Plan:
The purpose of the Plan is to provide our employees with
benefits when they reach retirement age, and to provide bene-
fits to the survivors of those employees who die before
retirement.
3. Effective Date:
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The Plan was originally effective October 1, 1982 and has
been replaced by a new Plan and Trust, also effective October
1, 1982, in order to comply with final regulations issued
under the Employee Retirement Income Security Act of 1974.
4. Name and Address of Employer:
City of Winter Springs
400 North Edgemon Avenue
Winter Springs, Florida 32708
5. Employer Identification Number:
59-1026364
6. Plan Number: 001
7. Type of Plan: Defined Contribution Pension Plan
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8. Administration of Plan:
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(a) Trustee. All contributions to the Plan are depos-
ited with the Board of Trustees of the City of Winter Springs
(address: 400 North Edgemon Avenue, Winter Springs, Florida
32708), as Trustee, to invest until such funds are paid out
under the terms of the Plan. The Trustee holds legal title
to all Plan assets, has complete authority over the invest-
ment thereof (except to the extent that such responsibility
is delegated by the Trustee to an Investment Manager), and is
the Plan's agent for service of legal process. The Trustee
maintains a separate account for every Participant and is
required to keep a record of what portion of the funds in the
Plan (including current contributions and earnings or ,losses)
is credited to each Participant.
(b) Professional Administrator. ECS, Inc. (address:
1016 Oak Street, Jacksonville, Florida 32204; telephone no.:
(904) 354-3785) is Professional Administrator and, as such,
is responsible for the administration of the Plan, for filing
all forms required by the Treasury and Labor Departments and
other applicable governmental units, and for furnishing the
Participants with information concerning the Plan.
9. Valuation Date:
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As of the end of each Plan year (September 30), or such other
valuation date as may be specified by the Trustee from time
to time, the assets of the Trust are valued and the accounts
of all Participants adjusted to reflect changes in value,
income, losses, contributions and any distributions made
under the Plan.
10. Who May Join:
All employees of the City who had completed a year of service
on September 30, 1983 were eligible -to participate in the Plan
as of the ~ffectiv~ date set forth in paragraph 3 above. All
employees not initially eligible shall commence participation
as of the earlier of:
(a) the first day of the Plan year (October 1) begin-
ning after the date the employee completes one (1) year of
service with the City, or
(b) the first day of the sixth (6th) month after the
date the employee completes one (1) year of service with the
City.
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Notwithstanding the above, all employees covered by a collec-
tive bargaining agreement between employee representatives
~ and the City, pursuant to which retirement benefits have been
the subject of good faith bargaining, shall be excluded from
coverage under the Plan.
11. Retirement Date:
Retirement date is the last day of the month preceding the
date on which a Participant reaches his sixty-fifth (65th)
birthday. If an employee works beyond his retirement date he
shall continue to participate in the Plan until the date of
his actual retirement.
12.
Contribution~:~
~) lP-
The City will contribute each year an amount equal to four
percent ~ of the annual compensation of each Participant.
Contributions by Participants are neither required nor per-
mitted.
.1""""'
13. Payment of Benefits:
(a) Amount of Payment. Participants (or their benefi-
ciaries) are entitled to benefits equal to the full amount in
their accounts in the event of retirement, disability or
death. Reduced benefits are provided for a Participant who
otherwise incurs a break in service prior to his retirement
date unless the Participant's account is fully vested. The
amount~such reduced benefits shall be fhia-f portion of the
Participant's account which has vested at the time of his
break in service~ the nonvested portion of the account shall
be forfeited.
(b) Vesting. A Participant's interest in his account
shall be determined on the basis of the number of years of
service with the City (including service before the effective
date of the Plan) and shall vest as follows:
Years of Service
Vested Interest
in Fund
One year
Two years
Three years
Four years
Five years
Six years
-0-
-0-
-0-
40%
50%
60%
I'""'"
- 3 -
t-...--......-..-~ -/..<cr/.r7
".....
Seven years
Eight years
Nine years
Ten years
70%
80%
90%
100%
(c) Time of Payment. The payment of benefits to a
participant must commence within sixty (60) days after the
end of the Plan year in which the later of the following
occurs:
(i) The attainment of retirement age, or
(ii) The Participant's termination of employment, or
(iii) The tenth (10th) anniversary of the Partici-
pant's participation in the Plan.
Notwithstanding the above, the Trustee may, in its discretion
but on a uniform and nondiscriminatory basis, direct earlier
payment of vested amounts to a terminating Participant.
(d) Manner of Payment. Whenever benefits are payable
to a Participant or his beneficiary, the Trustee shall select
the method of payment, which shall be one of the following:
".....
(i) Payments in monthly, quarterly, semiannual or
annual installments over a period not to
exceed twenty (20) years; or
(ii) One lump sum payment.
(e) Withdrawals. Funds may not be withdrawn from- the
Plan by active Participants.
14. Year of Service:
A year of service is a period of twelve (12) consecutive
months, consisting of an employee's first year of employment
or any subsequent Plan year, during which he completes at
least 1,000 hours of service.
15. Break in Service:
A break in service occurs when an employee works 500 hours or
less during a twelve (12) month period. Normally, if an
individual attains initial eligibility by completing a year
of service, he shall remain eligible so long as he works more
than 500 hours during each subsequent Plan year. Notwith-
standing the above, if a participant's employment terminates
by reason of death, disability or retirement he shall be
fully vested and his account shall receive an allocation of
tI""""-
- 4 -
~
,,-.-
.-..
Seven years
Eight years
Nine years
Ten years
70%
80%
90%
100%
ime of Pa mente The payment of
must commence within sixty (60 days after the
an year in which the later ~/ the following
I
(i) attainment of retire~ent age,
(; ;) Pt" t' tit' f 1
.. ar ~c~pan s erf~na ~on 0 emp oyment.
Notwithstanding the bove, the Tru~ee may, in its discretion
but on a uniform and ondiscrimincvtory basis, direct earlier
payment of vested amou ts to'a teiminating Participant.
(d) Manner of Pay nt. w~never benefits are payable
to a Participant or his b~nefidiary, the Trustee shall select
the method of payment, wh~h ~hall be one of the following:
(i) Payments in~~thlY, quarterly, semiannual or
annual ins taX mentsi or
I
(ii) One lump su~ pa mente
I
(e) Withdrawals. Junds not be withdrawn from the
Plan by active particip~ts.
(c)
Participan
end of the
occurs:
14. Year of Service:
A year of service is a period of tweI e (12) consecutive
months, consisting f an employee's f~ st year of employment
or any subsequent B an year, during whx h he completes at
least 1,000 hours f service.
15.
A break in serv. ce occurs when an employee
less during a welve (12) month period. Nor ally, if an
individual at ains initial eligibility by com leting a year
of service, e shall remain eligible so long a he works more
than 500 ho s during each subsequent Plan year Notwith-
standing t above, if a Participant's employmen terminates
by reason f death, disability or retirement he s all be
fully ves ed and his account shall receive an allo ation of
- 4 -
'.
,""""
contributions for that Plan year regardless of the number of
hours worked. However, if his employment terminates for any
other reason, he shall participate in the. allocation of
contributions for that Plan year only ir- he fs--employed by
the City on the laSta-ay-01:-slich year. Regardless of the
cause of termination, an-~leyee-shall be entitled to credit
for vesting purposes for any Plan year during which he
completes 1,000 hours of service.
16. Plan Year:
The Plan year is the period from october 1 to September 30.
In the absence of a break in service resulting from death,
disability or retirement, the City shall not make contribu-
tions to the account of an employee for those Plan years
during which he works less than 1,000 hours, and such years
shall not be counted toward the vesting of benefits.
17. Title IV of ERISA:
This Plan is not insured by the Pension Benefit Guaranty
Corporation because, being a money purchase pension plan, it
is specifically excluded from the coverage requirement under
Title IV of the Employee Retirement Income Security Act of
1974.
18. Funding Medium:
,,-...
The funding medium used for the accumulation of assets under
the Plan is the City of Winter Springs Pension Trust, which
is a member of the Florida Municipal Pension Trust Fund.
19. Designation of Beneficiary:
A Participant may designate a beneficiary or beneficiaries to
receive benefits which become payable upon his death. Desig-
nations shall be made in writing on a form provided by the
Trustee. A Participant may change the beneficiary from time
to time by executing a new designation form.
20. No Reversion of Funds:
If the City makes a contribution to the Trust that is based
on a mistake of fact, then the City may have the contribu-
tions returned to it by the Trustee by making demand within
one (1) year following the making of the contribution. Under
any other circumstances, however, it is impossible under the
Plan for any part of the Trust to revert to the City.
-
- 5 -
.'
21. Assignment:
-
The Plan was created for the benefit and protection of the
Participants and their beneficiaries and they may not pledge,
sell, assign, encumber or transfer their interest in the
Plan.
22. Claims:
A.Participant, former Participant or beneficiary may file
with the Trustee a written claim for benefits to which he
feels he is entitled under the terms of the Plan. In the
event the Trustee shall determine that the claimant is not
entitled to the claimed benefits, the Trustee shall so notify
the claimant in writing within ninety (90) days of receipt of
the claim and shall specify the reasons for such determina-
tion. The claimant may request that an adverse determination
be reviewed by the Trustee and within ninety (90) days of
this request shall be given the opportunity to present any
additional information establishing his right to said bene-
fit.
23. Future of the Plan:
,,-..
The City hopes and expects to continue this Plan indefinitely
and every effort has been made to meet future conditions
insofar as they may be anticipated. In order to afford pro-
tection against unforeseen circumstances, however, the City
must necessarily reserve the right to change, modify, suspend
temporarily or discontinue the Plan if future conditions make
such action necessary.
24. Amendment or Termination:
The Plan may be amended or terminated by the City, but no
amendment may deprive a Participant of his vested interest.
Upon termination of the Plan all benefits shall fully vest
and the City shall have the option of continuing the Trust
and making payments in accordance with its terms or ter-
minating the Trust and distributing all funds within a period
of six (6) months.
25. Scope of Description:
This description summarizes some of the principal terms of
the Plan but it does not purport to be the complete Plan. A
copy of the Plan itself is available in the office of the
City Manager for your inspection and you are encouraged to
review it and to direct any questions you may have to the
City Manager or the City's legal counsel. In case of any
,,-..
- 6 -
STATEMENT OF ERISA RIGHTS
".....
As a participant in the plan which is the subject
of this Summary Plan Description, you have certain rights
and protections under the Employee Retirement Income
Security Act of 1974 (ERISA). This will advise you that
ERISA provides that all plan participants shall be entitled
to:
1. Examine, without charge, at the plan adminis-
trator's office, all plan documents, including insurance
contracts and copies of materials filed by the plan with the
u. S. Department of Labor, such as detailed annual reports
and plan descriptions.
2. Obtain copies of all plan documents and other
plan information upon written request to the plan adminis-
trator. The administrator may charge you a reasonable sum
for these copies.
3. Receive a summary of the plan's yearly finan-
cial statement, which the plan administrator is required by
law to furnish to each participant in the form of a summary
annual report.
"..... 4. Obtain a statement of your benefits under the
plan, along with an indication of what portion of such bene-
fits are nonforfeitable (vested) and would actually be paid
to you if you were to stop working under the plan now. If
your benefits are not yet vested, you must be advised of the
earliest date on which they will become vested. This state-
ment is to be requested in writing and is not required to be
given more than once a year. It must be provided free of
charge.
In addition to setting forth the rights of plan
participants, ERISA imposes duties upon those who are
responsible for the operation of an employee benefit plan.
The people who administer your plan, called "fiduciaries" of
the plan, have an obligation to do so prudently and in the
interest of you and other participants and beneficiaries.
No one, including your employer or any other person, may
fire you or otherwise discriminate against you in order to
prevent you from obtaining benefits under this plan or from
exercising your rights under ERISA. If you file a claim for
plan benefits which is denied, in whole or in part, you
must receive a written explanation of the reason for the
denial, and you have the right to have your claim reviewed
and reconsidered.
".....
",.....
conflict between the contents of the complete Plan and this
Summary Plan Description, the provisions of the Plan shall be
controlling.
."'""'
.",.....
- 7 -
~
Statement of ERISA Rights
Page Two
Under ERISA, there are certain steps you can take
to enforce the above rights. For instance, if you request
plan materials to which you are entitled and do not receive
them within 30 days, you may file suit in a federal court.
In such a case, the court may require the plan administrator
to provide the materials and pay you a penalty of up to $100
a day until you receive them, unless they were not furnished
because of reasons beyond the' control of the administrator.
If you have a claim -for benefits which is denied or ignored,
in whole or in part, you may file suit in a state or federal
court. If plan fiduciaries misuse the plan's money, or if
you are discriminated against for asserting your rights, you
may seek assistance from the U. S. Department of Labor, or
you may file suit in a federal court. The court will decide
who should pay court costs and legal fees. If you are suc-
cessful the court may order the person or institution you
have sued to be responsible for these costs and fees; if you
lose, the court may require you to pay them.
,,-...
If you have any questions about your plan, you
should contact the plan administrator or.legal counsel for
the plan. If you have any questions about this Statement or
your rights under ERISA, you should contact the nearest Area
Office of the U. S. Labor-Management Services Administra-
tion, Department of Labor.
~
~
h/~ Crt
CITY OF WINTER SPRINGS, FLORIDA
1126 EAST STATE ROAD 434
WINTER SPRINGS. FLORIDA 32708
Telephone (407) 327-1800
March 22, 1995
Mr. Thomas F. Lang
c/o Wells, Allen, Lang & Morrison, P.A.
340 North Orange Avenue
Orlando, Florida 32801-1611
Re: Winter Springs Money Purchase Pension Plan
for City Employees Proposed Revisions
Dear Mr. Lang:
Please refer to the City Commission Minutes of February 27, 1995,
page 5 attached, and discussion of Pension Plan request. The
Commission approved proposals in the Pension Trustees letter of
February 6, 1995 to the Commission.
~
In my letter of February 6, 1995, all but paragraph six (6) require
your review and modification of the Plan. Paragraph eight (8) also
requires your determination of legality.
Mr. Kruppenbacher mentioned to me he is, "in the process" of
forwarding documents to you. This letter merely expedites his
"process". If you need copies of the Plan and the Plan Summary,
check with the City Manager and Mr. Kruppenbacher.
The attachments are copies of a form sent to employees and proposed
additions to this form.
Sincerely,
~
Art Hoffmann, Chairperson
Winter Springs Pension Plan/Board of Trustees
;--.
AH/saf
cc: City Attorney~
Ci ty Manager ~
At tachments (9)
MA-t ~cI -/-cJ I-A~
o ~ :5 fl./ /15-
Co~/~S ~:
.M ~'I (jJ//sotU
hl.e....
.---
CITY OF WINTER SPRINGS, FLORIDA
1126 EAST STATE ROAD 434
WINTER SPRINGS, FLORIDA 32708-2799
Telephone (407) 327-1800
February 6, 1995
Commission
John Govoruhk, City Manager
Board of Trustees/Pension Plan
Frank Kruppenbacher, City Attorney
("d/J;U'~ !)&,0,-i~ '?
1.~L--4~. jJ--l di-c:. (l}~l-~'L .-
. /' ~ / J - 't) . ~
.L.f!..LIf-l~ tl ~ I >J-.( ... t::3 /- M/ (
l.tJvl<..:Lt L i
Trus~ees Suggested Changes in Pension Plan Document
/"
ltl L'il
,.-
:H
JC JV~1
Re:
At the January 31st meeting of the Board of Trustees, changes to
the PI an Document were discussed. The following changes were
approved for consideration by the Commission.
~ A semi-annual account evaluation so that employees leaving for
~y reason would not lose their vested pension amount accumulated
in the period from their leaving month, back to the previous
valuation date, a maximum of eleven (11) months to a maximum of
I""" onl y five (5) months. I f paragraph 1. 36 is changed to have
valuation dates of March 31st and September 30th, the Plan
administration fee would rise $ 578.00 as indicated in Sun Bank's
letter of December 6, 1994 from Ms. Garcia.
W If semi-annual valuations are approved, the words "Plan Year"
would have to be changed to, "Valuation Date" in paragraphs, 2.04,
6.01, 6.02 (a), 6.03 (a), 6.04 (a), etc.
.r"'"
~ The Trustees also approved that the Commission consider a plan
~ange to permit employees who terminate employment for any reason,
to be permitted to request within thirty (30) days of that date to
have their vested pension amount accumulate up to the last full
month of employment, and to remain in the Plan until the next
valuation date when the termination occurs in a month that did not
have an account valuation. (i.e., not in March or September) Thus,
employees, if they elect, would not lose the maximum of the last
five (5) months of their accumulated vested pension.
~ The Plan Summary document dated 1989 should be updated to show
whether these changes are adopted or not. Copies should be given
to all employees at the next valuation date or sooner.
(5) The IRS Model Notice given to all terminating employees is
~gal, but quite detailed and extensive. Our Plan attorney should
draft a legal, but non-binding summary of that notice to alert
those employees to read the sections regarding the consequences of
accepting a I ump sum set t I ement verses a di rect transfer (roll
over) to an IRA, regarding taxes, etc..
,-
Trustees Suggested Changes
in Pension Plan Document
February 3, 1995
Page 2
6. Plan Summary section 13 (c) indicates Plan payouts must
commence within sixty (60) days after the Plan Year. To assure
that this directive is met, the Finance Director should fully
computerize all accounts updated to the last pay period, so that
the Plan Administrator, (SunBank) can complete the account
valuations expeditiously, and issue the annual report. Section
4.01 (e) of the Plan would have to be revised so that employees
receive their valuations much sooner than the (210) days following
September 30th as is now shown.
(J[) Section 4.01 should be revised to agree with previous
suggestions that non-vested amounts which an employee forfeits when
he terminates should remain in the Plan, and not be used to reduce
the employer's (City's) next contribution(s).
1""""". CD A previous request concerned a terminated employee being
rehired. The Plan paragraphs 6.04 (d) and 6.04 (e) permits such
employees to re-enter the plan if rehired within five (5) years of
termination, and upon returning any distributions in full. Is it
legal to require the returning employee to forfeit his non-vested
amount rather than to reclaim it, and/or can the maximum gap in
service be reduced to one (1) year rather than five (5) years?
The Trustees ask the Attorney and Commission to review these
suggestions at their earliest convenience.
Sincerely
~\~
Arthur H. Hoffmann, Chairperson
Board of Trustees/Winter Springs Pension plan
AHH/saf
,-
enclosures: Garcia Letter, December 6, 1994 (3 pgs.)
1989 plan Summary (9 Pgs.)
IRS Model Notice (2 Pgs.)
.~
Regular Meeting City Commission
February 27, 1995
94-95-13 Page 5
Commissioner Conniff: aye; Commissioner McLeod: aye. Motion passes.
/
Discussion of Pension Plan request regarding upgrading certain sections:
Art Hoffinann, Chairman of the Board of Trustees for the Pension Plan, stated that the Commission
has his letter dated February 6, 1995 and will answer any questions regarding that letter or anything
else regarding what the Trustees are doing.
Mr. Hoffmann stated that the Trustees looked at the plan as it now and it appears that employees
have to wait ten years to be fully vested and then depending on what month of the year they retire
or leave employment, they could loose the last several months of what the City contributed to their
plan because they didn't leave on an evaluation date; which could be as much as eleven months. If
the evaluation were done twice a year then that could be five months. An additional evaluation would
cost the City about $500.00 per year, however if you look at paragraph three, if you change the plan
such that an employee could notify the City that you would like to keep these funds in the plan until
the next evaluation date. Discussion.
Motion was made by Commission Ferring to go along with the recommendations of the Board of
Trustees. Seconded by Commissioner Langellotti. Discussion. Vote: Commissioner Gennell: aye;
Commissioner McLeod: aye; Commissioner Conniff: aye; Commissioner Ferring: aye; Commissioner
~ Langellotti: aye. Motion passes.
City Attorney - Frank Kruppenbacher 1. Wage and Hour Issue. 2. Reports:
Attorney Kruppenbacher stated that we were going to discuss the wage and hour issue, but it has not
been finalized; we will have it on our next agenda.
Attorney Kruppenbacher mentioned that he did extend to the developer in the lawsuit, the
opportunity to go to mediation; I recommended a mediator being the former Chief Judge of the
Florida Supreme Court from Miami, FL.
City Manager - John Govoruhk: 1. Reports:
Manager Govoruhk stated that last meeting he was asked a question in regards to his retirement, I
have given this considerable thought, the best answer I can give at this time is that the Commissioners
will receive an answer and will know it in a very timely fashion.
Manager Govoruhk mentioned his memo of January 24, 1995, regarding fee proposal for visioning
task, I would like to get your recommendation on that.
Motion was made by Commissioner Gennell to hold a workshop regarding the visioning. Seconded
by Commissioner McLeod. Discussion. Commissioner McLeod withdrew his second.
Commissioner Gennell withdrew her motion.
r"' Commissioner Ferring stated that the proposal deals with six different phases and a complete one day
"ItS MODEL NOTICE
:ipedal T~ Notice
~egarding Plan Payments
1Us notice contains important information you will need before you
:~d~w to receive your benefits from your company's retirement plan.
the " ).
;umrn;a.ry
\ payment from the Plan that is eligible for "rollover" can be taken in two
~ays. You can have all or any portion of your payment either 1) PAID IN
DIRECT ROLLOVER. or 2) PAID TO YOU. A rollover is a payment of
our Plan benefits to your individual retirement arrangement (IRA) or to
:lother employer plan. This choice will affect the tax YOl;1 owe.
: you choose a DIRECT ROLLOVER
Your payment will not be taxed in the =t yeax and no income tax
will be withheld.
Your payment will be made directly to your IRA or, if you choose, to
another employer plan that accepts your rollover.
Your payment will be taxed later when you take it out of the IRA or the
employer plan.
. you choose to have your Plan benefits PAID TO YOU
You will receive only 80% of the payment, because the Plan
administrator is required to withhold 20% of the payment and send it
to the IRS as income tax withholding to be credited against your taxes.
Your payment will be taxed in the current year unless you roll it over.
You may be able to use special tax rules that could reduce the tax you
owe. However, if you receive the payment before age 59'h. you also
:na),,1i~we to pay an additional 10% tax.
Yo,,- ....Jl roll over the payment by paying it to your IRA or to another
~=-?loyer.plan that accepts your rollover within 60 days of receiving
l1"\e payment. The amount rolled over will not be taxed until you take it
out oE the IRA or employer plan.
U you want to roll over 100% of the payment to an IRA or an employer
pI.:m. you mllst find olhrr mon~ 10 ~la" I~ 20% lhat UJas witlwld. If.
yeu roll over only 80% that you receivecI. you will be taxed on the 20%.
that was withheld and that is not rolled over.
?.ayments That Can and Cannot be Rolled oVer
.yments from the Plan may be "eligible rollover distributions." nus
ea.ns that they can be rolled over to an IRA at' to another employer plan
lit ac::epts rollovers. Your Pian administrator should be able to tell you
:\at fX'rtion of your payment is an eligible rollover distribution. The
:1o\0_"1g types oE payments CANNOT be rolled over:
In-T=ablt Payments. In general, only the "taxable portion" oE your
yt.'1ent is an eligible rollover distribution. If you have made "after-tax"
~?ioyee contributions to the PIan. the3e contributions will be non-taxable
~= they are paid to you, and they cannot be rolled over'. (A.fter.tax
l?loyee contributions genera..1ly are contributions you made from your
I'tl pay that were already taxed..)
:-=ts Spruul Otler Long Pmods. You cannot ron over a paYm~t if it
~.u1 oi a series oE equal (or almost equal) payments that are made at lea.st
:e .1 year and that will last for
y~etime (or your liEe expectancy), or
)'our lifetime and your beneficiary's lifetime (or liEe expectancies), or
.1 period oE ten year.! or more.
::oird Minimum Paymcrts. Beginning in the year you reach age iO 1/2.
::-..:\ir. portion oE your payment cannot be rolled over because it is a
. .
II. Direct Rol1.over
You can choose a direct rollover oE all or any portion oE your payment that
is an "eligible rollover distribution," as described above. In a direct
rollover, the eligible rollover distnbution is paid directly from the Plan to
an IRA or another employer plan that acc:epts rollovers. If you choose a
direct rollover, you are not taxed on a payment until you later take it out oE
the IRA or the employer pIan.
Direct RoIlotleT to trn IRA. You can open an IRA to receive the direct
rollover. (!be term "IRA,. as used in this notice, includes individual
retirement accounts and individual retirement annuities.) If you choose to
have your payment made directly to an IRA, contact an IRA sponsor
(usually a financial institution) to find out how to have your payment
made in a direct rollover to an IRA at that institution. If you are unsure of
how to invest your money, you can temporarily establish an IRA to receive.
the payment. However, in choosing an IRA,. you may wish to consider
whether the IRA you choose will allow you to move all or a part of your
payment to another IRA at a later date, without pena.lties or other
limitations. See IRA Publication" 590, lndiuidunl Rttircnent Arrangrn:ents, for
more information on lRAs (including limits on how often you can roll over
between IRAs). .
Direct RolIotIeT to tr Plan. If you are employed by a new employer that has
a plan, and you want a direct rollover to that plan, ask the administrator of
that plan whether it will accept your rollover. An employer plan is not
legally required to accept a rollover. If your new employer's plan does not
accept a rollover, you can choose a direct rollover to an IRA
Direct RolIotIeT of tr SerUs of Paymcrts. U you receive eligible rollover
distnoutions that are paid in a series for less than ten years, your choice to
make or not make a direct rollover for a payment will apply to all later
payments in the series until you change your election. You are.fr~ to
change your election for any later payment in the series.
III. Payment Paid To You
If you have the payment made to you, it is subject to 20% income tax
withholding. The payment is taxed in the year you receive it unless, within
60 days, you roll it over to an IRA or another plan that accepts rollovers. If
you do not roll it over, special tax rules may apply.
Income Tax Withholding:
.'1.
Mandtrtory Withholding. lf any portion of thel'ayment to you is an
eligtole rollover distribution, the Plan is required by law to withhold 20%
oE that amount:.. This amount is sent to the IRS as income tax withholding.
For ~ple, if your eligIole rollover distribution is $10,000, only $8,000
will be paid to you because the Pian must withhold S2.OOO as income tax.
However, when you prepare your income tax retwn for the year, you will
refX'rt the full $10,000 as a payment .from the Plan. You will report the
52.000 as tax withheld. and it will be credited against any income tax you
owe for the year. . - ..
Voluntary Withholding. If any portion oE your payment is not an e1iglole
rollover distribution but is taxable, the mandatory withholding rules
desaibed above do not apply. In this case, you may elect not to have
withholding apply to that portion. To elect out of withholding, ask t,he
Plan administrator for the election Eorm and related information..
.
Sirty-Day Rollot1er Option.. If you have an eligtole rollOVer diStribution . .-' : 1
paid to you, you can still decide to roll over all or P3.U oE it to an IRA or --
another employer plan that accepts rollovers. If you decide to ron over, yau
must nuzJce the rollC1Ot!rTuitlu'n 6a amp aftn" you rr:l%'iw the payment. The
portion of your payment that is roUed over will not be taxed until you ~
it out oC the IRA or the employer pIan..
You can roU over up to 100% oE the eligible rollover distribution. including
an amount equal to the 20% that was withheld. If you choose to roil over
100%, you must find other money within the 6O-day period to contribute to
the IRA or the employer plan to replace the 20% that was withheld. On the
other hand, if you roll over only the 80% that you received. you will be
taxed on the 20% that was withheld.
Example "Your eilg1ble roUover Q.l5tr10UlJon '" ~1V.VVV, ~.~} ~- _,"w_
to have it paid to you. You will receive S8.OC<J, and 52.lXXl ~ ~ sent to
the IRS as income tax withholding. Within 6fJ days alter recelV11\g the .
58,000, you may roll over the entire 510,000 to an IRA or employer pian.
To do this, you roll over the $8,000 you received from the Plan. and you
will have to find 52.000 from other so~ (your savings, a loan. etc.). In
this case, the entire 510,000 is not taxed until you take it out of the IRA or
emp.II':l.oe er pian. If you roll over the entire 519,000, when you file your
in~\X return you may get a refund of the 52.000 withheld.
If, on the other hand, you roll over only $8,000, the 52.000 you did not
roll over is taxed in the year it was withheld. When you file your income
tax return you may get a refund of part of the 52.000 withheld. .
(However, any refund is likely to be larger if you roll over the entire
510,000.)
aditioMl10% T.u If You Are under Age 591/1. If you receive a payment
efore you reach age 591h and you do not roll it over, then, in addition to
Ie regular income tax, you may have to pay an extra tax equal to 10'.\'. of
Ie taxable portion of the payment. The additionall0'.\'. tax does not apply
) yoUr payment if it is (1) paid to you because you separate from service
rith your employer during or after the year you reach age 55, (2) paid .
ecause you retire due to disability, (3) paid to you as equal (or almost
qual) payments over your life or life expectancy (or your and your
eneficiary's lives or life expectancies), or (4) used to pay certain medical
xpenses. See IRS Form 5329 for more information on the additional10'.\'.
IX.
puial T= Treatmmt. II your eligible rollover distribution is not rolled
ve:, it will be taxed in the year you receive it. However, if it qualifies as a
lump sum distribution." it may be eligible for special tax treatment. A
:un; sum distribution is a payment, within one year, of your entire balance
II\d~ the Plan (and certain other similar plans of the employer) that is
,ayable to you because you have reached age 591f.l or have separated from
ervice with your employer (or, in the case of a self-employed individual.
>ecause you have reached age 591h or have became disabled). For a
layment to qualify as a lump sum distribution. you must have been a
larticipant in the Plan for at least 5 years. The special tax treatmertt for
wnp)o*L1 distributions is described below.
Fivt:- J ear A.T1eraging. II you receive a lump sum distribution alter you
ue age 591h. you may be able to make a one-time election to figure the
tax on the payment by using "S-year averaging", Five-year averaging
oHen reduces the tax you owe because it treats the payment much as if it
were paid over 5 years. /
Tal-YearA.vaaging If You Wae B()T71 Before January 1, 1936. If you
receive a lump sum distribution and you were born before January 1,
19""~, you can make a one-time election to fi~ the tax on the payment
by using "lO-year averaging" (using 1986 tax rates) instead of 5-year .
averaging (using current tax rates). Like the 5-year averaging rules, 10-
year averaging often reduces the tax you owe.
Capital Gain Treatmmt If You Wae Born Before January 1, 1936, In
addition. if you receive a lump sum distn"bution and you were born .
'beEoreJanuary 1, 1936, you may elect to have the part of your payment
that is attributable to your pre-1974 participation in the Plan (if any)
wed as long-tenn capital gain at a rate of 20%.
There are other limits on the special tax treatment for lump sum
distn"butions. For example, you can generally elect this special tax
treatment only 0IlC!! in your lifetime, and the election applies to all lump
:sum distn"butions that you receive in that same year. If you have ..
previously rolled over a payment frotn the Plan (or certain other ~
plans of the employer), you cannot use this sp<<ial tax treatment for later
pa yments from the Plan. If you roll over your payment to an IRA. you will
not be able II:! use this spec:ia.l tax trutment for later payments from the
IRA. Also, if you roll over only a portion of your payment to an IRA. this
s~ treatment is not available for the rest of the payment. .'.
Adl al restrictiON are described in IRS Form 4972, which has more
i..-uortl..ation on lump sum distributions and how you elect the special tax
t:utment.
Employer Stock or Securities. There is a special rule for a paymertt from
the P1.m that includes employer stock (or other employer securities). To
dl;tri~ti~~-~ d~~~d ~bo~e (or ~o~ld 'qualliY~xcept that you do not
yet have 5 years oE participation in the Plan), or 2) the employer stock
included in the payment must be attributable to "alter.tax" employee
contributions, if any. Under this special rule, you may have the option of
not paying tax on the "net unrealized appreciation" of the stock urttil you
sell the stock. Net unrealized appreciation generally is the increase in the
value of the employer stock while it was held by the Plan. For example, if
employer stock was contributed to your Plan account whert the stcx:k was
worth 51,000 but the stock was worth 51.200 when you received it. you
would not have to pay tax on the 5200 increase in value until you later sold
the stock.
You may instead elect not to have the special rule apply to the net .
unrealized appreciation. In this case, your net unrealized appreciation will
be taxed in the year you receive the stock. unless you roll over the stock.
The stock (including any net unrealized appreciation) can be rolled over to
an IRA or another employer plan either in a direct rollover or a rollover
that you make yourself.
If you receive employer stock in a payment that qualifies as a lump sum
distribution, the special tax treatment for lump sum distributions
described above (such as 5-year averaging) also may apply. ~ IRS Form
4972 for additional information on these rules.
IV. surviving Spouses, Alternate Payees, and Other
Beneficiaries.
In general. the rules summarized above that apply to paymertts to
employees also apply to paymertts to surviving spouses of employees and
to spouses or former spouses who are "alternate payees." You are an
alternate payee if your interest in the Plan results from a "qualified
domestic relations order: which is an order issued by a court, usually in
connection with a divorce or legal separation. Some of the rules
su.nu:narized above also apply to a deceased employee's beneficiaIy who is
not a spouse. However, there are some exceptions for payments to
surviving spouses, alternate payees, and other beneficiaries that should be
mentioned.
If you are a surviving spouse, you may chose to have an eligible rollover
distribution paid in a direct rollover to an IRA or paid to you. If you have
the payment paid to you, you can keep it or roll it over yourself to an IRA
but you cannot roll it over to an employer plan. If you are an alternate
payee, you have the same choices as the employee. thus, you can have the
payment paid as a direct rollover or paid to you. If you have it paid to you,.
you can keep it or roll it over to yourself to an IRA or to another employer.
plan that accepts rollovers. If you are a beneficiary other than a surviving
,'spouse, you CANNOT choose a direct rollover, and you CANNOT roll
over the payment yourself.
. .
If you are a surviving spouse, an alternate payee, or another beneficiary,
your payment is not subject to the additionall0'.\'. tax descri~ iJ:l. ~on
III above, even if you are younger than age 59'h. .
. . -"
lf you are a surviving spouse, an alternate payee, or another ben~ciary~ :.~ '.
you may be able to use the special tax treatment lor lump sum distributiON....
and the special rule for payments that include employer st~ as described
in section m above. If you receive a payment because of the employee's
death. you may be able to treat the payment as a lump sum distribution_~ ._
the employee met the appropriate age requirements, whether or not the
employee had 5 years of participation in the PIan.. .~,. .. _._ ,
_.__. ..'" __ . r '. '\".: '..__ __.. .. ..
How To Obtain Additional Information. . -
nus notice sw:r;u:narizes only the federal (not state or local) taX iules that
might apply to your payment. The rules described a~ve are ~p~ex an~ .
contain many conditions and exceptions tha.t are not 1I\cIuded In this .'
notice. Therefore, you may want to consult with a professional tax advuor
be/ort: you take a payment of your benefits from the Plan. Also, you can
find more specific information on the tax treatment of payments ~
qualified retirement plans in IRS Publication 575, pension and Anrtwtv
Income and IRS Publication 590, Indiv;dual Retintnenl Arranl!:em~ts.
~ublications are available from your lcx:allRS office or by calling 1-
800. TAX-FORMS.
~.
Dear he Li ring ~ 1 onllel') .t.lLIp 1 o,y ee:
On 1994 the City Commission approved ordinance
.'1 r:hich amends the City Employees Pension PLan, which operates
unaer-the latest ordinance i'l . The amendment reqtitires that
employeGs when retiring or leavin6 or having left city employnent
at 'Yinter Springs, and who have a vested pension amount in the Plan
are required to have that amount removed from the plan and distributer
to them.
In accordamce with Publication #590 of the Internal Revenue
Service you are to be given appropriate notice ~e~ation of
your options in receivina this distribution. Therefo~'~60 days from
the dote of tht.'9 notice you must decide on several options.
? tt) f zp)dJ
1. You may direct that all or parT of the distribition
"be transferred DIRECTLY to an IRA account you already have or to a
new eligible plan 'IOU identify to the City. The part rolled over
will not be subjec~ to a 20% withholding tax required by the IRS
and is subject to tax only when you withdraw it from your new IRA.
2. Any part of the distribution made directly to you
is subject to the aforementioned 2010 withholding the City must make
and deliver to the IRS in accordance with Publication /1 590.
3. If you rollover the amount you receive directly
to another IRA within 60 days you may claim a reflmd of the 20%
withheld from the IRS when filin~ in the current year.
4. If you are under 59~ and do not rollover the amount
directly, youhil1 be subject to an additional 10% penalty. Refer
to publicatidn .:'I 590 for specific details.
~.
There may be other arrangements available to you regarding
lump-Stun amounts received. Refer to Publication #590, consult your
accontant, tax adviser and the IRS. You may obtain a cOJ?Y of
Publication #590 from the IRS by calling 1-800-829-3676tFORM).
By this notice you are requested to send the City written
instructions within 60 days from the date ofJt~is~~~ter aOinotice.
If not received in this time your vested funa~v~Tl ~e'~ent
DIRECTLY to you. Send your response to City of~Vinter Springs
1126 East state Route 434, Winter Springs, FL 32708-~7',}, attention
Director Of Personnel.
Yours Truly,
John Govuruhk, City Manager
cc ~sonnel"Dir&ctor
cc Fi~Ge Dir~oto~
~.
~~w4"~ S\~~U~
?\)U.. 3~~O "r
~pt::?5e~
-
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To: All City of Winter Springs Employes
Subject: Employes Pension Plan
From: City 1funager
Winter Springs provides a pension plan for all City employes.
The Plan began in 198_. It is described as a "Defined Contribution
Plann. That is, a defined sum is added to each employes pension
account at specific intervals.
There is no cost to the employe. Each pay period a percentage
of the employes gross pay is contributed by the City to each employes
pension account. In 1993 that percentage was increased from 4% to 6%
by a vote of the City Commission.
Vmen an individual leaves employment with the City/part or
all of the accumulated amount is available to tnat person depending
on a vesting formula described in the Plan. Full vesting occurs after
",,-..
10 years of employment.
Non-vested amounts are retained in the Plan.
The Plan is administered by the City Manager, and a board of
5 Trustees. The Trustees are knowledgeable City residents appointed
by the City Commission. The Trustees and City Manager meet every 3
months to review progress of the Plan with the Plan investment agent.
The agent, selected by the Trustees, is a regional professional
investment company. The cost of administration of pension records
and accounts is payed from the cities' General Fund, but investment
expenses are payed from the Funds' account. By direction of the
Trustees the funds are inv~ed with diversification to provide
income and growth.
Once a year each employee is given a statement of the
amount in his or her account. 7fuen an employee leaves City employment,
.,-..
he will be given notice of his or her final pension account and
of the options available in receiving that amo~~t.
s:'leet I of 2
/! r -';,l
!" "f~'L' -
'/{'" .J __
. "-
. ;::::-~
Pension Plan update:
,/""",
Any questions concerning the Pension Plan should be
referred to the city Director of Persone!l,
~
~
?.{/(( .::
"
...,{. //:. ;;2
fI'"
TO: John Govoruhk
SUBJECT: City of Winter Springs Pension Plan
DATE: August 11, 1994
There is nothing in the City of Winter Springs Personnel Policy
in reference to pension plan payment of benefi ts or break in
service.
Attached is a copy of the Amended and Restated Money Purchase
Pension Plan and Trust of the City of Winter Springs.
,'--
13. Payment of Benefits: (a) (ii) Page 3/4. However, if the
Participant subsequently returns to the employ of the Employer, the
forfeited portion of the account shall be restored to him or her if
the Participant repays the amount distributed to him wi thin a
period of five (5) years from the date of reemployment.
14. Year of Service: Page 6. A year of service is a period of
twelve (12) consecutive months, consisting of an employee's first
year of employment or any subsequent Plan year, during which he/she
completes at least 1,000 hours of service.
15. Break in Service: Page 7. A break in service occurs when an
employee works 500 hours or less during a twelve (12) month period.
Regardl ess of the cause of termination, an employee shall be
entitled to credit for vesting purposes for any Plan year during
which he/she completes 1,000 hours of service.
"
L~tJ,J
Coordinator
r-
~
~-'t-q(
~
~
FEE INVOICE
Corporate Employee Benefits Division
P.O. Box 3808
Orlando, Florida 32802
407 237-4254
Invoice Date:
Invoice Number:
02/06/95
00951294
Admin Officer:
PASS Officer:
0095
0084
HARRY MARTIN
CITY OF WINTER SPRINGS
1126 EAST STATE ROAD 434
WINTER SPRINGS, FL. 32708
This fee will be charged
to your account
Account Name: CITY OF WINTER SPRINGS MP Account Number:
Statement of Services for Quarter Ending 12/31/94"otal Amount Due: $ 2,921.46
----------------------------------------------------------------------------- -------------------.
Q
(Please detach top portion and return with your chet.::k)
Detail of Charges
Amount
CITY OF WINTER SPRINGS MPPP 08257883
~ TOTAL MARKET VALUE $ 1, 224, 781 .06
10.00 PER $1000 ON $ 1,000,080.00
7.50 PER $1000 ON $ 224,781.06
MARKBT VALUE FBE
2,921.46
Total Account Administration Services Fee
$ 2,921.46
Total Current Period Fee 12/31/94
S 2,921.46
S 2,858.22
S 2,858.22
S 2,921.46
Prior Period Balance - If Paid, Please Disregard
Payment Received-Thank you
This Fee will be cha~ed to your account
~ kC]~
,b;~
-,
i Division P.O. Box 3808 Orlando, FL 32802 407 237-4254
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CITY OF WINTER SPRINGS, FLORIDA
1126 EAST STATE ROAD 434
WINTER SPRINGS, FLORIDA 32708
Telephone (407) 327-1800
April 12, 1995
City Commission /'
John Govoruhk, City Manager~
Board of Trustees/Winter Springs Pension Plan ~
Phi lip G. Robert, SunBank.............
Re: Second Quarterly Pension Review Meeting
The Quarterly Review meeting is scheduled for Tuesday, April 25th
I"""" at 7:30 P.M. at the City of Winter Springs, 1126 East State Road
434, in the City Hall Conference Room.
We request SunTrust to provide a review of the Funds' performance
and to discuss recommendations if any, for changes in the Funds'
activities for the Trustees to consider.
Mr. Lang is asked to provide information requested in our 1 etter of
March 22, 1995, regarding proposed changes in the Plan Document.
Other matters pertinent to the Board's activity may be discussed.
Sincerely,
Cktj/~/",,*
Art Hoffmann, Chairperson
Board of Trustees/Winter Springs Pension Plan
AH/saf
cc:
Frank Kruppenbacher, City Attorney~
Thomas F. Lang, Attorney~
,-
.~
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c,~4-
A/6te,'
CITY OF WINTER SPRINGS, FLORIDA
1126 EAST STATE ROAD 434
WINTER SPRINGS, FLORIDA 32708
Telephone (407) 327-1800
April 12, 1995
City Commission
John Govoruhk, City Manager
Board of Trustees/Winter Springs Pension Plan
Philip G. Robert, SunBank
Re: Second Quarterly Pension Review Meeting
The Quarterly Review meeting is scheduled for Tuesday, April 25th
~ at 7:30 P.M. at the City of Winter Springs, 1126 East State Road
434, in the City Hall Conference Room.
We request SunTrust to provide a review of the Funds' performance
and to discuss recommendations if any, for changes in the Funds'
activities for the Trustees to consider.
Mr. Lang is asked to provide informati on requested in our I etter of
March 22, 1995, regarding proposed changes in the Plan Document.
Other matters pertinent to the Board's activity may be discussed.
Sincerel y,
cw-)l~/Mf'
Art Hoffmann, Chairperson
Board of Trustees/Winter Springs Pension Plan
AH/saf
;----
cc: Frank Kruppenbacher, Ci ty Attorney
Thomas F. Lang, Attorney
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