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HomeMy WebLinkAbout2008 07 22 Regular 601 Recommendations on Retirement Matters Related to Consolidation of Fire Department with Seminole CountyCity of Winter Springs July 29, 2008 Board of Trustees Meeting Page 1 of 5 BOARD OF TRUSTEES AGENDA ITEM 601 July 22, 2008 Regular Meeting MGR. /DEPT. Authorization REQUEST: City Manager requesting the Board of Trustees to provide the City Commission with advisory recommendations on retirement matters related to the consolidation of Winter Springs Fire and Emergency Medical Services with Seminole County. PURPOSE: This agenda item is needed for the Board of Trustees to fulfill its responsibilities in providing advisory recommendations to the Commission regarding pension matters, in this case pension matters related to fire consolidation. CONSIDERATIONS: On June 23, 2008 the City Commission approved an interlocal agreement consolidating City and County Fire and Emergency Medical Services with Seminole County, followed by approval of the agreement on June 24, 2008 by the Seminole County Commission. Section 3.5.2 of the interlocal agreement, consistent with State Statutes, provides that the transferred employees shall make an irrevocable election, prior to September 1, 2008, to either remain in the City Pension Plan or joint the Florida State Retirement System (FRS). Florida Statutes also require that in the occurrence of a consolidation involving unions that the governing units must meet at least once to hear the concerns and requests of the effected collective bargaining unit regarding impacts of consolidation on the employees. The City has fulfilled this statutory requirement. The union placed a number of issues on the table regarding compensation and pension. Following are pension requests made by the union: 1. That the City add a pension benefit, one that is not currently in the City Pension Plan, for employees electing to stay in the City Plan that would provide anon-reduced retirement benefit at age of 52 years with 25 years of service. Consent Informational Public Hearin Re ular X Page 1 of 5 2. That the City and County agree to utilize the differential between the FRS contribution rate and the City contribution rate to fund the cost of the 52/25 pension benefit. 3. That the City offer a cash buyout of earned pension benefits based upon the future values of the benefit at retirement. 4. That the City provide for full vesting credit for non or partially vested employees. 5. That the City par for employee financial advice relative to the most advantageous plan alternative. FRS Benefits: According to the provisions of the interlocal agreement, for those employees electing to transfer to FRS, their FRS benefits will begin on the day of transfer, October 2, 2008. Their benefit in the Winter Springs plan will be frozen. The County will pay 100% of the FRS contribution rate for employees transferring to FRS and 100% of the contribution rate for employees electing to stay in the City pension plan up to the established FRS rate of contribution. City employees transferring to FRS will be fully vested in the FRS plan in six years. City employees electing to transfer to FRS will receive the following benefits not provided by the City pension plan. 1. 3% annual cost of living raise. 2. Post-retirement health care supplement based upon years of service. 3. Improved disability coverage. 4. Unreduced retirement benefit with 25 years of service, regardless of age. In addition, these employees will no longer have to pay a 3% contribution rate they pay in the Winter Springs plan, resulting in a 3% "take-home" pay gain. Employees electing to stay in the Winter Springs plan will not receive these additional benefits except for the 3% gain in pay that will result from the County paying 100% of their contribution rate. Union Request "1" -Addition of anon-reduced retirement aye 52 with 25 years of service. The union concludes that an estimated 16 firemen will be unfairly impacted due to being stranded in the Winter Springs' plan. As we understand it, the rational for being unfairly stranded in the plan is based upon the fact that they are too old to work the additional 10 years required to fully vest in the FRS. Response • The City on several occasions has advised the union that only six years of service is required to vest in the FRS, not 10. • Adding additional benefits to the plan in this situation is highly unusual. The employees have a choice to select which plan they believe will be in their best interest. • The cost to the City to add this benefit will be substantial. • Age 55 is a normal retirement age for firefighters. Based upon our analysis, it appears that anyone under the age of 50 years would be able to fully vest in FRS at age 55. Page 2 of 5 If paid by the remaining plan population, which would be highly unfair to those remaining employees to pay the cost of the benefit they cannot get, the additional cost would be approximately $234,000 or a 2.3% increase in contributions system-wide for the first year. Over the seven year period to amortize the benefit for this select group of employees, the cost would be approximately 2 million dollars. If paid for by the select group of employees the cost would result in a 23.6% increase in their contribution rates. Union Repuest " 2" -Utilization of the differential between the FRS contribution rate and the City plan contribution rate to pay for the 52/25 non reduced benefit. As we understand it, the union believes that sufficient funds are available in the difference between the FRS contribution rate and the City contribution rate to pay for the 52/25 non reduced benefit. Additionally, union representatives have voiced that they are entitled to that differential for their benefit. Response• The FRS rate for FY 09 will be 19.76%, representing a 0.44% differential over the FY 08 rate of 20.2%. The Winter Springs rate is 16.5%. The differential between the two rates is currently 3.26%. There are three problems with the concept of utilizing the differential between the FRS rate and the City rate for increased benefits. Under the terms of the interlocal agreement, the County will pay no more than the FRS contribution rate level for those employees that elect to stay in the City plan. If the FRS contribution rate falls below the City contribution rate in future years, the City would be responsible for the difference. The differential between the FRS and City rates are dynamic, not static, the FRS rates changes annually based upon annual actuarial evaluation of the plan. As seen, the FRS rate for FY 09 is actually coming down. Over the past seven years, the FRS Special Risk Class rate has been as low as 16.01%. The same is true for the Winter Springs plan. The contribution rate for the City must be adjusted when necessary to maintain the actuarial soundness of the plan. As shown below, the differential is currently not sufficient to even pay for the incremental cost of a 52/25 benefit for either all or the 16 selected firefighters. All 16 Selected Firefi hg tern Firefi hters New Funding Required for 52/25 Benefit $578,000 $234,000 FRS Total Contribution Amount (19.76%) 417.000 196,000 Surplus (Deficit) ($161,000) ($38,000) In the alternative, we believe any delta should be utilized to pay down the firefighters past service liability, in that their compensation, for those that choose to go to FRS, would now be used to fund the County's (FRS) plan and not the City plan. Also, we believe we should further use this delta to pay off this past service liability over a shorter period of time. Page 3 of 5 _Union Request " 3" -Cash buv out of accrued benefits at the future normal retirement age value. As we understand it, the union believes that the cash out of the future benefit of the plan at normal retirement age would allow employees to utilize their cash to purchase prior years service in the FRS thus helping them to attain a more beneficial retirement benefit. Resqonse• Cash out provisions can be accomplished in four ways. 1. 100% of the future normal retirement age accrued value. 2. 100% of the present value of the accrued benefit on the day of the cash out. 3. Funded value of the future accrued value of normal retirement. 4. Funded value of the present value of the benefits on the day of the cash out. The Winter Springs pension plan like most governmental plans is not 100% funded. As of April 30, 2008, the Winter Springs retirement plan is approximately 68% funded due to reduced earnings in equity investments associated with the down turn in the economy. Therefore, the cash out of benefits at 100% of accrued value is not possible from retirement benefits. The only way that this could be accomplished would be for the City to provide cash infusion into the plan, which is highly unlikely in today's economic realities. Secondly, it is important to understand that the normal retirement age for funding purposes is age 60 in the City plan. As designed, the age 55 with 10 years of service retirement benefit is paid for through the assumption that most employees will choose to retire at age 60 to pay for those that retire at age 55 with 10 years of service. Therefore, in order to provide for a voluntary cash payout that would not bankrupt the plan, the cash pay out amount would have to be below the funded present value of the accrued benefit resulting in amounts of cash that would not purchase many years of past service with FRS. Finally, it needs to be understood that the purchase of prior years of service with FRS can only be purchased at a 2% annual rate as opposed to the 3% annual rate provided in the City's plan; and that the maximum that can be purchased is 5 years. Union Request "4" -City paving for non vested time of emgloyees transferring to FRS. As we understand it, the union believes the City should pay for the cost of upgrading non and partially vested time to the equivalent of full vested service in the Winter Springs plan since this decision is being imposed upon the employees. Resqonse• ^ This can be accomplished at a minimal cost of $5.500 per year. ^ In addition to the service time earned at the City, employees would be required to work sufficient time at the County in order to meet the vesting requirements as established under the City plan, i.e., a combined City-County total of 7 years. Page 4 of 5 Union Request "5" -City providing firemen with a monetary contribution to pay for retirement advice. The union believes the City should pay a financial advisor to advise employees as to the most advantageous retirement plan choice, since they do not possess these professional skills. Response• None. FUNDING: Increased cost for any benefit change to the City's plan would ostensibly require increased contributions. RECOMMENDATION: ATTACHMENTS: I . FRS Summary Plan Description (See Page 4). 2. Firemen City & FRS Non-Reduced Benefit Retirement Schedule COMMISSION ACTION: Page 5 of 5 ATTACHMENT 2 FLORIDA RETIREMENT SYSTEM PENSION PLAN SUMMARY PLAN DESCRIPTION The following summary is a brief description of the Florida Retirement System Pension Plan as of June 30, 2006. Questions of interpretation shall be determined from part I of chapter 121, Florida Statutes, and chapter 60S of the Florida Administrative Code. Creation The Florida Retirement System (FRS) was created December 1,1970, with consolidation of the Teachers' Retirement System, the State and County Officers and Employees' Retirement System, and the Highway Patrol Pension Fund. In 1972, the Judicial Retirement System was also consolidated with the FRS. The system was created to provide a program offering retirement, disability, and survivor benefits for participating public employees. Social Security coverage is also required for all members. Membership Membership in the FRS is compulsory for all full-time and part-time employees working in regularly established positions for state agencies, county governments, district school boards, state universities, and state community colleges; or cities, independent special districts, and public charter schools may make an irrevocable election to participate. Certain members, including elected officials and local government senior managers, may elect to not participate in the system. Members of the Elected Officers' Class may elect to participate in the Senior Management Service Class in lieu of the Elected Officers' Class or to withdraw from the FRS altogether. The following members may elect to participate in various optional programs instead of the FRS: • Most pension plan members (including renewed members), Senior Management Service Optional Annuity Program participants, and Community College Optional Retirement Program participants may elect to participate in the Public Employee Optional Retirement Program (FRS Investment Plan). Participants of the State University System Optional Retirement Program or FRS Pension Plan members who retired to participate in the Deferred Retirement Option Program (DROP) are not eligible to become a member of the FRS Investment Plan; • Senior Management Service Class members who are state employees (including state-level Elected Officers' Class members who choose to join that class) may elect to participate in the Senior Management Service Optional Annuity Program, while locally designated members of the class may elect to opt out of the system altogether; • State University System faculty, executive service employees, and administrative and professional employees may elect to participate in the State University System Optional Retirement Program; and • Community College System faculty and certain administrators may elect to participate in a Community College Optional Retirement Program, if the college offers an optional retirement program. Classes of Membership Regular Class -This class consists of members of the FRS who do not qualify for membership in the Special Risk, Special Risk Administrative Support, Elected Officers', or Senior Management Service Classes. Special Risk Class -This class consists of members who meet the criteria to qualify for this class as set forth in Florida Law and Rules, and who are employed as: • Law enforcement officers; Firefighters (including fire prevention and firefighter training positions, and aerial firefighting surveillance pilots for the Department of Agriculture and Consumer Services); Correctional officers or community-based correctional probation officers; FLORIDA RETIREMENT SYSTEM PENSION PLAN FY 2005/06 • Paramedics or emergency medical technicians whose primary duty and responsibility includes on-the-scene emergency medical care and who is employed with a licensed Advance Life Support (ALS) or Basic Life Support (BLS) employer; • Professional health care workers in specified positions within the Department of Corrections or the Department of Children and Family Services who spend at least 75% of their time performing duties that involve contact with patients or inmates in a correctional or forensic facility or institution; • Youth custody officers with the Department of Juvenile Justice; or • Forensic employees employed by a law enforcement agency or medical examiner's office in a forensic discipline recognized by the International Association for Identification (IAI). Special Risk Administrative Support Class -This class consists of former Special Risk Class members who are transferred or reassigned to anon-special-risk law enforcement, firefighting or correctional administrative support position within an FRS special risk employing agency and meet the criteria set forth in Florida Law. Elected Officers' Class (EOC) -This class consists of members who hold specified elective offices in either state or local government: • State officers include: Governor, Lieutenant Governor, Cabinet Officer, Legislator, Supreme Court Justice, district court of appeal judge, circuit judge, county court judge, state attorney, and public defender. • County officers include: sheriff, tax collector, property appraiser, supervisor of elections, school board member, school board superintendent, clerk of circuit court, county commissioner, and other elected official with countywide authority. • City or special district officers include: These elected officials in cities and special districts that have chosen to place their elected officials in the EOC instead of the Regular Class. Senior Management Service Class (SMSC) -This class consists of: • Members of the Senior Management Service of state government; • Community college presidents; • Appointed school board superintendents; • County and city managers; • Selected managerial staff of the Legislature; • The Auditor General and managerial staff; • The Executive Director of the Ethics Commission; • The State University System Executive Service and university presidents; • Selected managerial staff of the State Board of Administration; • Judges of compensation claims; • Selected managerial staff with the Judicial Branch; • Capital collateral regional counsels and assistant capital collateral regional counsels; • Assistant state attorneys; • Assistant public defenders; • Assistant statewide prosecutors or assistant attorneys general; • Elected officials who chose to join the SMSC in lieu of the EOC; • Nonelective managerial positions designated for SMSC membership by local government agencies; and • Chief Deputy Court Administrator. ---- PAGE 2 REVise~ DECEMBER 2006 SUMMARY PLAN DESCRIPTION FLORIDA RETIREMENT SYSTEM PENSION PLAN Contributions Members of the Florida Retirement System (FRS) are not required to make employee contributions to establish service credit for work performed in a regularly established position; employers pay all required contributions. Effective July 1, 2002, the Florida Legislature established a uniform contribution rate system for the Florida Retirement System (FRS), covering both the FRS Pension Plan and the FRS Investment Plan. Including the fee of 0.05% for administration of the FRS Investment Plan and provision of educational tools for both plans, the uniform rates for FY 2005/ 06 are as follows: Class Regular ........................................................................ Special Risk ................................................................. Special Risk Administrative Support ............................ Elected Officers Judges ................................................................. Governor, Lt. Governor, Cabinet, Legislators, State Attorneys, and Public Defenders ................. Elected County Officials (in EOC) ......................... Senior Management Service ....................................... Deferred Retirement O tion Pro ram (DROP) Rate ....... 6.72% ......17.42% ........ 8.81 17.54% ...................................................... 11.38% ...................................................... 14.12% ........................................................ 9.34% p g ....................................................................... 8.22% Note: To offset the rates shown above, a portion of the normal cost has been prefunded from surplus actuarial assets for all rates. These rates do not include the separate 1.11 % contribution for the Retiree Health Insurance Subsidy. Any member who terminates employment with an FRS employer may receive a refund of any retirement contributions personally made to the system (and lose the associated retirement credit), or may leave these personal contributions in the system and keep all creditable service earned through the date of termination. Creditable Service Members receive 1 month of service credit for each month in which any salary is reported for work performed. Members may also purchase additional credit to increase their retirement benefits under the FRS. Credit may be purchased for past service, prior service (including refunded service credit), certain military service (up to 4 years), approved leaves of absence (up to 2 years), out-of-state public service (including federal service), non-FRS public service and non-public service in certain schools or colleges in Florida (up to 5 years total, including both in-state and out-of-state service), and in some cases credit for periods of disability. To purchase this service credit, members must meet certain requirements. Only the purchase of past service and prior service may be included in the creditable years of service needed to vest (see next section). All other types of service credit purchases become creditable service only after a member is vested based on his/her other service. Vesting Since July 1, 2001, the FRS has provided for vesting of benefits after 6 years of creditable service. Members not employed in a position covered by the FRS on July 1, 2001, may be required to return to covered employment for up to 1 work year to be eligible to vest with less service than was required under the law in effect before July 1, 2001. REVISED DECEMBER 2006 PAGE 3 FLORIDA RETIREMENT SYSTEM PENSION PLAN FY 2005/06 Service Retirement Members become eligible for normal retirement based on their age and/or service when they meet the minimum requirements listed in the following section. Early retirement may be taken after a member has vested and is within 20 years of his/her normal retirement age; however, there is a 5% benefit reduction for each year remaining from a member's retirement age to his/her normal retirement age. Normal Retirement Requirements Regular Class, Elected Six years of service and age 62; or Officers' Class, and Senior The age after 62 that the member becomes vested; or Management Service Class Thirty years of service, regardless of age. Special Risk Class Six years of special risk service and age 55; or The age after 55 that the member becomes vested; or Twenty-five total years of service, consisting of both special risk service and up to four years of military service, and age 52; or Twenty-five total years of special risk service, regardless of age; or Thirty years of any creditable service, regardless of age. Special Risk Administrative Special Risk Class normal retirement requirements apply to Support Class service in this class if member has six years actual special risk service; otherwise Regular Class requirements apply. Benefit Calculation Service retirement benefits are computed on the basis of age and/ or years of service, average final compensation (AFC), and service credit. Credit for each year of service is expressed as a percentage of AFC (the average of the 5 highest fiscal years of earnings). The total percentage value of the benefit received is determined by calculating the total value of all service, which is based on the retirement plan and/or class to which the member belonged when the service credit was earned. The following chart shows the percentage value for each year of service credit earned: VALUE RETIREMENT PLAN (per year of service) State and County Officers' and Employees' Retirement System (SCOERS) Division A (no Social Security) ....................................................................... Division B (with Social Security) .................................................................... Teachers' Retirement System (TRS) Plan E ................................................................................................................ ......2.00% ......1.50% ............................2.00% Florida Retirement System (FRS) Regular Class Retirement at age 62 or with 30 years of service .......................................................................1.60% Retirement at age 63 or with 31 years of service .......................................................................1.63% Retirement at age 64 or with 32 years of service .......................................................................1.65% Retirement at age 65 or with 33 or more years of service .........................................................1.68% Special Risk Class Service from 12/1/70 through 9/30/74 ........................................................................................2.00% Service on and after 10/1/74 ......................................................................................................3.00% PAGE 4 REVISED DECEMBER 2006 SUMMARY PLAN DESCRIPTION FLORIDA RETIREMENT SYSTEM PENSION PLAN ~ecial Risk Administrative Support Class (With 6 years of special risk service, the service in this class counts towards special risk normal retirement; otherwise, Regular Class requirements apply.) Retirement at age 55; or with 25 total years special risk service; or at age 52 with 25 years (if total service includes military service) ..................................1.60% Retirement at age 56; or with 26 total years special risk service; or at age 53 with 26 years (if total service includes military service) ..................................1.63% Retirement at age 57; or with 27 total years special risk service; or at age 54 with 27 years (if total service includes military service) ..................................1.65% Retirement at age 58; or with 28 total years special risk service; or at age 55 with 28 years (if total service includes military service) ..................................1.68% Elected Officers' Class Service as Supreme Court Justice, district court of appeal judge, circuit court judge, or county court judge ............................................................................3.33% Service as Governor, Lt. Governor, Cabinet Officer, Legislator, state attorney, public defender, elected county officer, or elected official of a city or special district that chose EOC membership for its elected officials ...............................................3.00% Senior Management Service Class .............................................................................................2.00% There are three steps in computing an annual retirement benefit: Step 1. Determine the member's retirement plan(s) and class(es) of membership, years of creditable service in each, and the total percentage value earned. Step 2. Calculate the average final compensation (AFC). Step 3. Multiply the figures obtained in Steps 1 and 2 to determine the annual normal retirement benefit. Benefit Options Members must select one of the following four benefit options at retirement: Option 1 -Member receives a benefit for life with no continuing survivor benefit at death. Option 2 -Member receives a reduced benefit for life. If member dies anytime within 10 years after retiring, the beneficiary will receive the benefit for the remainder of the 10-year period from the member's retirement date. No survivor benefits are paid if the member dies 10 or more years after his/her effective retirement date. Option 3 -Member receives a reduced benefit for life. Upon the member's death, the joint annuitant, if living, will receive the same benefit for the remainder of his or her life. A joint annuitant who is under age 25 and is the member's child or other dependent for whom the member has guardianship will receive the member's maximum benefit, but only until age 25, or, if disabled, until he or she is no longer disabled. Option 4 -Member receives a reduced benefit for life. Upon the death of either the member or the joint annuitant, the survivor will receive a lifetime benefit equal to two-thirds of the benefit the member was receiving when both were living. A joint annuitant who is under age 25 and is the member's child or other dependent for whom the member has guardianship will receive the member's maximum benefit, but only until age 25, or, if disabled, until he or she is no longer disabled. Termination Members must end all employment relationships with all FRS employers for 1 calendar month to complete their retirement process, in addition to meeting all other requirements and be eligible to receive monthly benefits payable under the FRS Pension Plan. Members who elect to retire and participate in the Deferred Retirement Option Program (DROP) must remain off all FRS payrolls for 1 calendar month at REVISED DECEMBER 2006 PAGE 5 FLORIDA RETIREMENT SYSTEM PENSION PLAN Fr 2005/06 the end of their program participation. (Special DROP termination provisions may apply as described in the following section.) Deferred Retirement Option Program The Deferred Retirement Option Program (DROP) is available under the FRS Pension Plan when the member first reaches eligibility for normal retirement. DROP allows a member to retire while continuing employment for up to 60 months. While in DROP, the member's retirement benefits accumulate in the FRS Trust Fund (increased by acost-of-living adjustment each July) and earn monthly interest equivalent to an annual rate of 6.50%. The election to participate in DROP must be made within 12 months of the member's normal retirement date, unless the member is eligible to defer the election. To participate for the maximum DROP period, the member must enter DROP upon first reaching eligibility for normal retirement, or upon reaching an eligible deferral date as described below: • A Special Risk Class member or a Special Risk Administrative Support Class member (with 6 years of Special Risk Class service) who reaches his or her normal retirement date based upon years of service before reaching age 52 may defer DROP entry up to age 52 and still participate for 60 months. • A member of the Regular Class, Elected Officers' Class, or the Senior Management Service Class who reaches his or her normal retirement date before reaching age 57 may defer DROP entry until age 57 and still participate for 60 months. A member of the Special Risk Administrative Support Class who does not have 6 years of Special Risk Class service would be subject to these deferral requirements. • A member of the Elected Officers' Class who reaches his or her normal retirement date during a term of office may defer the DROP election until the next succeeding term in that office and still participate for up to 60 months or until the end of that succeeding term, whichever is less. • A member who is employed as K-12 instructional personnel as defined in s. 1012.01(2), F.S., may elect to participate in DROP at any time after reaching his or her normal retirement date and still participate for 60 months. Upon termination, the DROP account is paid out as a lump sum payment, a rollover, or a combination partial lump sum payment and rollover, and monthly benefits are paid to the member in the amount as calculated upon entry into DROP, plus cost-of-living adjustments for intervening years. In most cases, the DROP participant must cease employment after a maximum of 60 months in DROP, must satisfy the termination requirements for retirement, and must comply with applicable reemployment restrictions thereafter. However, certain exceptions apply: • Effective July 1, 2002, a DROP participant who holds an elective office covered by the Elected Officers' Class may end DROP participation and postpone compliance with termination requirements and reemployment limitations until he or she no longer holds the elective office (including consecutive terms in the same office). For the period between the end of DROP participation and termination, no retirement credit is earned and the member's DROP accumulation accrues no additional monthly benefits (but continues to earn interest).1 • Since June 1, 2003, K-12 instructional personnel employed with a district school board or the Florida School for the Deaf and the Blind may be allowed to extend their DROP participation for up to an additional 36 months beyond their initia160-month DROP participation period. To ~ Notwithstanding these provisions, any elected officer who entered DROP on or before June 30, 2002, is subject to prior provisions of law and may end DROP without terminating employment and be automatically enrolled as a renewed member of the Elected Officers' Class. PAGE 6 REVISED DECEMBER 2006 SUMMARY PLAN DESCRIPTION FLORIDA RETIREMENT SYSTEM PENSION PLAN qualify for the extension, the DROP participant must receive authorization from the Division and from the district school superintendent or the Board of Trustees of the School for the Deaf and the Blind, as appropriate. If authorized to extend DROP participation, a participant must remain employed in an eligible position during the period of DROP extension. Since June 23, 2004, K-12 instructional personnel employed by a developmental research school may be allowed to extend DROP participation up to an additiona136 months beyond their initia160-month DROP participation period. To qualify for the extension, the DROP participant must receive authorization from the Division and from the developmental research school's director (or principal if there is no director), as appropriate. If authorized to extend DROP participation under this provision, a participant must remain employed in an eligible position during the period of DROP extension. Employers pay contributions at a rate of 8.22% of salary for all DROP participants. Disability Benefits Two types of disability retirement are available under the FRS: In-line-of-duty disability retirement and regular disability retirement. To qualify for either type of disability retirement, members must be totally and permanently disabled to the extent that they are unable to work in any job for any employer. In-line-of-duty disability benefits are available to members on their first day of employment. The minimum Option 1 benefit for in-line-of-duty disability retirement is 42% of AFC for all members except those in the Special Risk Class, who receive a minimum Option 1 in-line-of-duty disability benefit of 65% of AFC. To be eligible for regular disability retirement, members must complete 8 years of creditable service. The minimum Option 1 benefit under regular disability retirement is 25% of AFC. If a disabled member's service benefit would be higher than the minimum disability benefit, the higher benefit is paid. Survivor Benefits If an active member dies in the line of duty, his/her spouse will receive a monthly benefit equal to one- half of the member's monthly salary at death, payable for the spouse's lifetime. If the spouse dies, the benefit will continue to be paid on behalf of the member's children until the youngest child reaches age 18 or is married, if earlier. If an active member dies before becoming vested and his/her death was not suffered in the line of duty, the designated beneficiary will receive a refund of any member-paid retirement contributions. However, if the active member dies within 1 year of vesting, the member's joint annuitant may use the deceased member's accumulated leave on an hour-by-hour basis, or the member's eligible in-state or out-of-state service, to purchase enough service credit to vest the deceased member and receive monthly benefits. If the member was vested at death, the beneficiary may receive a refund of any contributions that may have been paid by the member or, if the beneficiary qualifies as a joint annuitant, he or she may receive a lifetime monthly benefit calculated as though the member had retired on the date of death and had chosen Option 3. If the joint annuitant is the member's child or other dependent for whom the member has guardianship who is under age 25, he or she will receive the member's maximum benefit only until age 25, or, if disabled, until no longer disabled. A deceased member's joint annuitant may buy any service credit that could have been claimed by the member at the time of death. Cost-of-Living Adjustments The benefits received by retirees and beneficiaries are increased by a 3%cost-of-living adjustment (COLA) each July based on their June benefit amount (excluding the Retiree Health Insurance Subsidy benefit). For retirees who have been retired for less than 12 months on July 1, the first COLA increase is prorated. The COLA applies to all continuing monthly retirement benefits paid under the FRS Pension REVISED DECEMBER 2006 PAGE 7 FLORIDA RETIREMENT SYSTEM PENSION PLAN FY 2005/06 Plan (i.e., normal and early service retirement benefits and benefits accruing in participant accounts under DROP, disability retirement benefits, and survivor benefits). Reemployment after Retirement After retirement or DROP termination, retired FRS members may be employed by any private employer or any public employer not participating in the FRS without affecting his/her FRS benefits. However, restrictions apply to reemployment with an FRS employer. Any retired FRS member who is reemployed by an FRS employer during the first calendar month after retirement or DROP termination is not considered to have terminated employment and is therefore not considered to have retired. His/her active membership will be reinstated. Upon meeting termination requirements, FRS retirees who are reemployed by FRS employers may not receive both salary and retirement benefits for the rest of the 12-calendar month period after retirement or the end of their DROP participation, and must forfeit retirement benefits for the months employed unless working in a position for which an exception is provided. Exceptions to the reemployment restrictions allow FRS retirees to be reemployed in specified positions during the 2nd through 12th months of retirement or following termination from DROP participation without forfeiting benefits. After being retired for 1 calendar month, retirees may be reemployed without further limitation in specified positions with district school boards, the Florida School for the Deaf and the Blind, developmental research schools, and participating charter schools. Retirees may also be reemployed for up to 780 hours in specified positions by a state community college or a university in the State University System, or by FRS employers as firefighters or paramedics. Finally, retired judges called to temporary duty and retirees appointed to or voted into elective office are exempt from reemployment limitations after being retired for 1 calendar month. Renewed Membership Retirees of the FRS who are reemployed in regularly established positions will have renewed membership in the Regular Class, the Senior Management Service Class (SMSC), or the Elected Officers' Class and earn credit toward asecond-career benefit based on requirements for their class of membership. Once retirees have established renewed membership in the system, they will have the same opportunities to elect to participate in alternative retirement programs, or to withdraw from the system altogether, as do similarly situated newly hired members of that membership class. Renewed members are subject to the same vesting requirements and other limitations as apply to other active members. However, renewed members are not eligible to participate in the Special Risk Class, to participate in the Deferred Retirement Option Program, to participate in the State University System Optional Retirement Program (SUSORP), or to retire under disability retirement provisions. Appeals Procedure Whenever the Division makes a decision that will reduce, suspend or terminate a member's retirement benefits, the member may petition the Division for a hearing. Section 28-106.201, F.A.C., outlines the requirements for filing a petition. After the Division reviews the petition, the State Retirement Director may ask a hearing officer from the Division of Administrative Hearings to conduct the hearing, or in some cases the Department of Management Services may conduct the hearing. If the outcome of the hearing is not in the member's favor, the member will be informed of the time period during which he or she can appeal the decision to the District Court of Appeal. Forfeiture of Benefits If, before retirement, a member commits a felony specified by law and is found guilty of or enters a plea of no contest to such crime, or their employment was terminated due to admission of committing, aiding, or abetting a specified crime, the member's retirement rights and benefits are forfeited (except PAGE 8 REVISED DECEMBER 2006 SUMMARY PLAN DESCRIPTION FLORIDA RETIREMENT SYSTEM PENSION PLAN for a refund of personal retirement contributions, if any). The forfeiture of benefits provision applies in the case of any job-related felony offense as outlined below: • Committing, aiding or abetting an embezzlement of public funds or any grand theft from the employer; • Committing bribery in connection with employment; • Committing any other felony specified in chapter 838, F.S., (bribery and misuse of public office), except ss. 838.15 and 838.16, F.S., (commercial bribes); • Committing any felony with intent to defraud the public or the employer of the right to receive the faithful performance of duty, or receiving or attempting to receive profit or advantage for the member or another person through the use of his or her position; or • Committing an impeachable offense (applies to elected officials only). In addition to the crimes stated above, if a court of competent jurisdiction finds the member guilty of violating any state law against strikes by public employees, the member's benefits are forfeited. If the member's designated beneficiary is found guilty of intentionally killing or procuring the death of the member, the beneficiary forfeits all rights to retirement benefits. Any benefits payable would then be paid as if the beneficiary died before the member. The Clerk of the Court, the Secretary of the Senate or the employer, as appropriate, must notify the Commission on Ethics if the member is found guilty, impeached, or terminated prior to retirement due to any of the above offenses. The Commission on Ethics will notify the Division. The member's benefits will be suspended subject to a hearing held by a hearing officer of the Division of Administrative Hearings. The hearing officer's decision may be appealed to the District Court of Appeal. (See s. 112.3173, F.S., and Article II, Section 8, of the Florida Constitution for more information.) Assignment, Execution, or Attachment Retirement benefits and accumulated contributions accrued under the Florida Retirement System Pension Plan are not subject to assignment, execution, attachment or any other legal process with the exception of qualified domestic relations orders, certain income deduction orders (see s. 61.1301, F.S.), and federal income tax levies. REVISED DECEMBER 2006 PAGE 9 ATTACHMENT2 AST NAME IRST NAME .O.B. GE ( 10/2/08} .O.H. YEARS ©F SERVICE ( 1012/08} CITY -Non Reduced Retirement Age (Age 55!10 Yrs Service} FRS -Non Reduced Retirement Age (Age 55/6 Yrs Service) Non Reduced Retirement Age (Age 52125 Yrs Service} FRS -.Non Reduced- Retirement Age (Age 25 Yrs Service) BECK ROBERT 05/30/1963 45 12/13/1982 25 55 55 70 70 CURRY ELAINE 01/29/1963 45 05/01/1997 11 55 55 70 70 BAILES JOHN 03/12/1961 47 11/09/1992 15 55 55 72 72 CREWS JESSE 10/09/1970 37 04/05/2004 4 55 55 62 62 CURL BRAD 02/17/1977 31 07/19/2004 4 55 55 56 56 DILLON SHANNON 11/28/1981 26 04/21/2003 5 55 55 52 51 DUNCAN CARL 12/03/1967 40 11/30/2000 7 55 55 65 65 ESQUILIN MARISOL 08/29/1972 36 12/11/2000 7 55 55 61 61 FORREST EDWARD 05/27/1961 47 10/24/1984 23 55 55 72 72 GAGLIANO MICHAEL 09/01/1981 27 01/14!2008 0.7 55 55 52 52 GREEN COREY 03/22/1964 44 10/31/1985 22 55 55 69 69 GREY THOMAS 07/31/1964 44 02/11/1991 17 55 55 69 69 GRIGGS BRIAN 02/03/1983 25 08/09/2007 1 55 55 52 50 GUGLIELMELLO KEITH 05/04!1958 50 11/06/1978 29 55 56 75 75 HARTER JAMES 08/04/1980 28 07/19/2004 4 55 55 53 53 HELENTHAL DAVID 10/02/1956 52 04/21/2003 5 57 58 77 77 HOHNHORST MICHAEL 07/19/1966 42 02/17/1992 16 55 55 67 67 HONOUR SCOTT 11/11/1972 35 03/23/2006 2 55 55 60 60 HOOL MATTHEW 09/27/1963 45 08/16/1990 18 55 55 70 70 HUMPHREY MATTHEW 01/11/1985 23 06/08/2005 3 55 55 52 48 INGRANDO VINCENT 07/12/1978 30 01/16/2001 7 55 55 55 55 KEENE ROBERT 09/04/1960 48 08/22/1996 12 55 55 73 73 KOTRCH RYAN 09/20/1978 30 12/03/2007 0.8 55 55 55 55 LALLATHIN MATTHEW 11/18/1985 22 08/09/2007 1 55 55 52 47 LAVERTY MARK 06/06/1966 42 04/27/2000 8 55 55 67 67 MASSARI SHANE 02/25/1970 38 05/05/1994 14 55 55 63 63 MCCALL JEFFREY 12/27/1963 44 11/09/1992 15 55 55 69 69 METIVIER JASON 04/10/1974 34 12/29/2003 4 55 55 59 59 MOLNAR STEVEN 03/22/1964 44 02/02/1989 19 55 55 69 69 MONAHAN JAMES 01/27/1973 35 10/18/1999 8 55 55 60 60 MYERS DAVID 02/07/1958 50 04/03/1986 22 55 56 75 75 O'BRIEN DAVID 05/15/1953 55 10/09/1980 27 55 61 80 80 PANDO JOSHUA 08/08/1973 35 04/16/2001 7 55 55 60 60 ATTACHMENT 2 AST NAME IRST NAME .O.B. GE ( 1Q12108) .O.H. YEARS OF SERVICE ( 10!2/08) CITY -Non. Reduced Retirement Age (Age 55/10 Yrs Service) ERS -Non Reduced Retirement Age (Age 55/6. Yrs Service) Non Reduced Retirement Age (Age 52125 Yrs Service) FRS -Non Reduced Retirement Age ,(Age 25'Yrs Service) PERSING PHILLIP 08/14/1985 23 12/03/2007 0.8 55 55 52 48 POHLAR DANIEL 09/20/1967 41 04/21/2003 5 55 55 66 66 REILLEY JAMES 11/14/1961 46 11/09/1992 15 55 55 71 71 RIVERA WILLIAM 08/03/1956 52 07/23/1980 28 55 58 77 77 ROBINSON DAVID 07/24/1963 45 04/16/2001 7 55 55 70 70 SELVIN CALVIN 10/26/1959 48 09/17/1999 9 55 55 73 73 SERVI JOSHUA 07/10/1986 22 12/03/2007 0.8 55 55 52 47 SIMS KEVIN 11/21/1971 36 11/02/1995 12 55 55 61 61 SUMMERS MICHAEL 09/26/1978 30 06/20/2000 8 55 55 55 55 TRYON DAVID 06/14/1958 50 07/17/1978 30 55 56 75 75 TULIP CHRISTOPHER 06/11/1977 31 07/19/2004 4 55 55 56 56 ZOMBO JAZLYN 06/07/1983 25 09/06/2005 3 55 55 52 50 CHIKOWSKI BRAD 03/26/1975 33 04/03/2000 8 55 55 58 58 BAUMGART MARC 11/14/1959 48 11/05/1990 17 55 55 73 73