Ord 52-04
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POLICE/FIRE PENSION PLAN
ENHANCED MULTIPLIER OPTION
FOR DROP PARTICIPANTS AND OTHER RETIREES
ORDINANCE NO. 52-04
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AN ORDINANCE OF THE CITY COMMISSION OF THE CITY OF DELRA Y
BEACH, FLORIDA, AMENDING CHAPTER 33, "POLICE AND FIRE DEPARTMENTS",
SUBHEADING "PENSIONS", OF THE CODE OF ORDINANCES OF THE CITY OF
DELRA Y BEACH, FLORIDA, BY AMENDING SECTION 33.62, "BENEFIT AMOUNTS
AND ELIGIBILITY", PROVIDING AN ENHANCED MULTIPLIER OPTION FOR
¡ ELIGIBLE DROP P ARTICIP ANTS AND RETIREES; REQUIRING THOSE MEMBERS
WHO ELECT THE ENHANCED MULTIPLIER TO PAY THE FULL ACTUARIAL COST
THEREOF, PLUS THE FULL COST OF ACTUARIAL AND OTHER PROFESSIONAL
SERVICES REQUIRED; AND PROVIDING A NINETY-DAY PERIOD FOLLOWING THE
EFFECTIVE DATE OF THIS ORDINANCE DURING WHICH ELIGIBLE MEMBERS MAY
ELECT AND PAY FOR THE ENHANCED MULTIPLIER; PROVIDING A GENERAL
REPEALER CLAUSE, A SAVINGS CLAUSE AND AN EFFECTIVE DATE.
BE IT ORDAINED BY THE CITY COMMISSION OF THE CITY OF DELRA Y
BEACH AS FOLLOWS:
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Section 1. That Chapter 33, "Police and Fire Departments", subheading, "Pensions", of the
Code of Ordinances of the City of Delray Beach is hereby amended by amending Section 33.62,
"Benefit Amounts and Eligibility", Subsection (B), "Normal Retirement Benefit", to read as follows:
Sec. 33.62. BENEFIT AMOUNTS AND ELIGIBILITY.
(B) Normal Retirement Benefit.
I (1) Duration, Survivor Benefits. A member retiring on his normal retirement date shall
receive a monthly benefit which shall commence on his normal retirement date and
be continued thereafter during his lifetime. Upon his death the full retirement benefit
shall be continued to his spouse for one year and sixty (60) percent of that amount
continued thereafter until the earlier of death or remarriage.
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(2) Amount. Normal retirement benefits shall be in the amount of two and one-
half (2 1/2) percent of average monthly earnings for each year of continuous service
for employees with more than ten (10) but less than twenty (20) years of continuous
service. Normal retirement benefits shall be in the amount of three (3) percent of
average monthly earnings for each year of continuous service if an employee has
attained twenty (20) or more years of continuous service, subject to a maximum of
seventy-five (75) percent of average monthly earnings. Provided, however, that in no
I event shall a member's total benefit be less than two (2) percent of average monthly
! earnings for each year of continuous service. However, members as of the effective
date shall receive at their normal retirement date (age fifty-two (52) regardless of
years of service) the greater of the benefit provided by the formula above or fifty
(50) percent of average monthly earnings.
I (3) Optional Enhanced Multiplier.
(a) Notwithstanding any provision of the System to the contrary, a
member who is actively employed by the City on March 15,2004, but who is
not participating in the deferred retirement option plan (DROP), may elect a
normal retirement benefit in the amount of three and one-half (3.5) percent
of average monthly earnings for each year of continuous service if the
member attains twenty (20) or more years of continuous service, subject to a
maximum of eighty-seven and one-half (87.5) percent of average monthly
earrungs. Members electing this enhanced multiplier shall thereafter
contribute three (3) percent of earnings to the Trust Fund in addition to the
member contribution specified in Section 33.64(A), and shall receive the
enhanced multiplier for all periods of continuous service. An election under
this subparagraph must be on or before April 15, 2004.
(b) Notwithstanding any provision of the System to the contrary, a
member who is actively employed by the City on March 15, 2004, but does
not elect the enhanced multiplier in accordance with subparagraph (a),
above, and who is not participating in the deferred retirement option plan
(DROP), may thereafter elect a normal retirement benefit in the amount of
three and one-half (3.5) percent of average monthly earnings for all future
continuous service after making such election if the member attains twenty
(20) or more years of continuous service, subject to a maximum of eighty-
seven and one-half (87.5) percent of average monthly earnings. Members
electing this enhanced multiplier shall thereafter contribute three (3) percent
of earnings to the Trust Fund in addition to the member contribution
specified in Section 33.64(A). Such member may also elect to purchase the
enhanced multiplier for some or all periods of continuous service prior to the
2 ORD. NO. 52-04
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date of the election, by paying the full actuarial cost of the enhanced
multiplier, plus the full cost of any actuarial or other professional services
required.
(c) Notwithstanding any provision of the System to the contrary, a
member who is hired after March 15, 2004 and who is not participating in
the deferred retirement option plan (DROP) may elect a normal retirement
benefit in the amount of three and one-half (3.5) percent of average monthly
earnings for all future continuous service after making such election if the
member attains twenty (20) or more years of continuous service, subject to a
maximum of eighty-seven and one-half (87.5) percent of average monthly
earrungs. Members electing this enhanced multiplier shall thereafter
j contribute three (3) percent of earnings to the Trust Fund in addition to the
member contribution specified in Section 33.64(A). Such member may also
elect to purchase the enhanced multiplier for some or all periods of
continuous service prior to the date of the election, by paying the full
actuarial cost of the enhanced multiplier, plus the full cost of any actuarial or
other professional services required.
i (d) Notwithstanding any provision of the System to the contnu;y. any
member who is actively employed on the effective date of this paragp\ph and
entered the deferred retirement option plan (PROP) with twenty (20) or
more years of credited service prior to March 15. 2004. and any member who
retired under this subsection with twenty (20) or more years of credited
service prior to March 15. 2004. may. within ninety (90) days followin.g the
i effective date of this paragraph. elect a normal retirement benefit in the
amount of three and one-half (3.5) percent of average monthly e~.
subject to a maximum of ejghty-seven and one-half ~87 .5) percent of average
monthly earnings. Members who elect the enhanced multi.plier must
contribute the full actuarial cost of the enhanced multiplier. plus the full cost
of any actuarial or other professional services req.uired. in a one-time lump
I sum payment.
WW The election to receive the enhanced multiplier under this paragraph
must be made in writing on a form provided by the City. Such election shall
be irrevocable. If an eligible member does not elect an optional enhanced
multiplier under this paragraph, or if an eligible member elects the enhanced
I multiplier for only a portion of his total continuous service, then the benefit
provided in paragraph (2) shall be used to calculate the benefit for all
continuous service to which the enhanced multiplier does not apply. If an
eligible member elects the enhanced multiplier and attains more than ten (10)
but less than twenty (20) years of continuous service, the member's benefit
I 3 ORD. NO. 52-04
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shall be determined in accordance with paragraph (2), and the member shall
receive a refund of all additional contributions and amounts paid for the
enhanced multiplier, without interest. In no event shall a member's total
i benefit be less than two (2) percent of average monthly earnings for each
year of continuous service.
(4) Upon becoming eligible for normal retirement, a member shall be one
hundred (100) percent vested in his accrued benefit.
Section 2. That all ordinances or parts of ordinances in conflict herewith be, and the same
are hereby repealed.
Section 3 That should any section or provision of this ordinance or any portion thereof,
any paragraph, sentence, or word be declared by a court of competent jurisdiction to be invalid, such
decision shall not operate to invalidate the remainder hereof.
Section 4 That this ordinance shall become effective upon passage.
PASSED AND ADOPTED in regular session on second and final reading on this
the _ day of ,2004.
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MAYOR
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AlTEST:
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Acting City Clerk
First Reading
Second Reading
4 ORD. NO. 52-04
- .,- LEWIS, LONGMAN &WALKER, P.A
ATTORNEYS AT LAW
H S REPLY To. TALLAHASSEE
ELPING HAPE
FLORIDA '8 FUTURE®
www IIw-law com
August 17, 2004
Ms. Susan A. Ruby
City Attorney
City of Delray Beach
200 N.W. 1st Avenue
Delray Beach, FL 33444
Re: Police Officers' and Firefighters' Retirement Plan - Proposed Ordinance
Providing an Enhanced Multiplier Option for DROP Participants and Retirees
Dear Susan:
It has come to our attention that concerns have been raised about the proposed ordinance
amending the Police Officers' and Firefighters' Retirement Plan to provide an enhanced
multiplier option for DROP participants and retirees. Specifically, plan actuary Steve Palmquist,
based on information he received from another member of his firm, has questioned whether an
enhanced multiplier option for DROP participants and retirees is permissible under applicable
provisions of the Internal Revenue Code, and if it is, whether a rollover or direct transfer from
another qualified plan may be used to purchase the enhanced multiplier. We have spoken to the
person in Steve's firm who raised this concern, and have done some preliminary legal research
on these issues. Based on our research, we have concluded that DROP participants and retirees
would not be able to purchase the enhanced multiplier using a rollover or direct transfer from
another qualified plan. However, we have not yet reached a conclusion as to whether the
enhanced multiplier option for DROP participants and retirees is permissible under the Internal
Revenue Code. Further research on this issue will be necessary.
Accordingly, we recommend that the City defer consideration of the proposed ordinance
until we complete our research and analysis of the legal issues. We anticipate that our research
and analysis will be completed within the next two weeks.
Bradenton Jack.mnville Tallahassee West Palm Beach
1001 3rd Avenue West 9428 Baymeadows Road Post Office Box 10788 (32302) 1700 Palm Beach Lakes Blvd.
Suite 670 Suite 625 125 South Gadsden Street, SUlle 300 Suite 1000
Bradenton, FL 34205 Jacksonville. FL 32256 Tallahassee, FL 3230] West Palm Beach, FL 33401
(941) 708-4040 (904) 737-2020 (850) 222-5702 (56]) 640-0820
Fax: (941) 708-4024 Fax: (904) 737-3221 Fax. (850) 224-9242 Fax: (561) 640-8202
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August 17, 2004
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Please call me if you have any questions concerning this matter.
With best regards, I am
Sincerely,
James W. Linn
JWL/es
[IT' DF DELRA' BEA[H ~I
CITY ATTORNEY'S OFFICE 200 NW 1st AVENUE· DELRAY BEACH. FLORIDA 33444
TELEPHONE 561/243-7090· FACSIMILE 561/278-4755
Writer's Direct Line. 561/243-7091
DELRA Y BEACH
F l 0 . I D "
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AJl.Amerlca City MEMORANDUM
~IIE DATE: August4,2004
TO: City Commission
David Harden, City Manager
FROM: Susan A. Ruby, City Attorney
SUBJECT: Ordinance 52-04 Drop Plan and Other Retirees Eligibility for 3.5%
Multiplier/Police and fire Pension Plan
The ordinance allows Police and Fire Pension Drop Participants that entered the
Drop Plan prior to March 15, 2004 and other police/fire pension retirees to obtain a
3.5 percent multiplier, subject to the payment of a maximum of 87.5 percent of
average monthly earnings, if they elect to do so, within ninety (90) days of the
passage of the ordinance. The persons that elect to participate must pay the full
actuarial costs, including actuarial services in a one-time lump sum payment.
Please place the ordinance on the August 17, 2004 City Commission agenda for
appro
Attachment
Cc: Chevelle Nubin, Acting City Clerk
Joe Safford, Finance Director
Harry Hamiliton, Human Resources Director
Chief Larry Schroeder, Delray Beach Police Department
Chief Kerry Koen, Delray Beach Fire Department
James Tabeek, President, IAFF
Officer Vinny Gray, PBA Representative
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POLICE/FIRE PENSION PLAN
ENHANCED MULTIPLIER OPTION
FOR DROP P ARTICIP ANTS AND OTHER RETIREES
ORDINANCE NO. 52-04
AN ORDINANCE OF THE CITY COMMISSION OF THE CITY OF DELRA Y
BEACH, FLORIDA, AMENDING CHAPTER 33, "POLICE AND FIRE DEPARTMENTS",
SUBHEADING "PENSIONS", OF THE CODE OF ORDINANCES OF THE CITY OF
DELRA Y BEACH, FLORIDA, BY AMENDING SECTION 33.62, "BENEFIT AMOUNTS
AND ELIGIBILITY", PROVIDING AN ENHANCED MULTIPLIER OPTION FOR ELIGIBLE
DROP PARTICIPANTS AND RETIREES; REQUIRING THOSE MEMBERS WHO ELECT
THE ENHANCED MULTIPLIER TO PAY THE FULL ACTUARIAL COST THEREOF, PLUS
THE FULL COST OF ACTUARIAL AND OTHER PROFESSIONAL SERVICES REQUIRED;
AND PROVIDING A NINETY-DAY PERIOD FOLLOWING THE EFFECTIVE DATE OF
THIS ORDINANCE DURING WHICH ELIGIBLE MEMBERS MAY ELECT AND PAY FOR
THE ENHANCED MULTIPLIER; PROVIDING A GENERAL REPEALER CLAUSE, A
SAVINGS CLAUSE AND AN EFFECTIVE DATE.
BE IT ORDAINED BY THE CITY COMMISSION OF THE CITY OF DELRA Y
BEACH AS FOLLOWS:
Section 1. That Chapter 33, "Police and Fire Departments", subheading, "Pensions", of
the Code of Ordinances of the City of Delray Beach is hereby amended by amending Section
33.62, "Benefit Amounts and Eligibility", Subsection (B), "Normal Retirement Benefit", to read
as follows:
Sec. 33.62. BENEFIT AMOUNTS AND ELIGIBILITY.
(B) Normal Retirement Benefit.
(1) Duration, Survivor Benefits. A member retiring on his normal retirement
date shall receive a monthly benefit which shall commence on his normal
retirement date and be continued thereafter during his lifetime. Upon his death the
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full retirement benefit shall be continued to his spouse for one year and sixty (60)
percent of that amount continued thereafter until the earlier of death or remarriage.
(2) Amount. Normal retirement benefits shall be in the amount of two and one-
half (2 1/2) percent of average monthly earnings for each year of continuous
service for employees with more than ten (10) but less than twenty (20) years of
continuous service. Normal retirement benefits shall be in the amount of three (3)
percent of average monthly earnings for each year of continuous service if an
employee has attained twenty (20) or more years of continuous service, subject to
a maximum of seventy-five (75) percent of average monthly earnings. Provided,
however, that in no event shall a member's total benefit be less than two (2)
percent of average monthly earnings for each year of continuous service.
However, members as of the effective date shall receive at their normal retirement
date (age fifty-two (52) regardless of years of service) the greater of the benefit
provided by the formula above or fifty (50) percent of average monthly earnings.
(3) Optional Enhanced Multiplier.
(a) Notwithstanding any provision of the System to the contrary, a
member who is actively employed by the City on March 15, 2004, but who
is not participating in the deferred retirement option plan (DROP), may
elect a normal retirement benefit in the amount of three and one-half (3.5)
percent of average monthly earnings for each year of continuous service if
the member attains twenty (20) or more years of continuous service,
subject to a maximum of eighty-seven and one-half (87.5) percent of
average monthly earnings. Members electing this enhanced multiplier shall
thereafter contribute three (3) percent of earnings to the Trust Fund in
addition to the member contribution specified in Section 33.64(A), and
shall receive the enhanced multiplier for all periods of continuous service.
An election under this subparagraph must be on or before April 15, 2004.
(b) Notwithstanding any provision of the System to the contrary, a
member who is actively employed by the City on March 15, 2004, but
does not elect the enhanced multiplier in accordance with subparagraph
(a), above, and who is not participating in the deferred retirement option
plan (DROP), may thereafter elect a normal retirement benefit in the
amount of three and one-half (3.5) percent of average monthly earnings for
all future continuous service after making such election if the member
attains twenty (20) or more years of continuous service, subject to a
maximum of eighty-seven and one-half (87.5) percent of average monthly
earnings. Members electing this enhanced multiplier shall thereafter
contribute three (3) percent of earnings to the Trust Fund in addition to the
member contribution specified in Section 33.64(A). Such member may
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also elect to purchase the enhanced multiplier for some or all periods of
continuous service prior to the date of the election, by paying the full
actuarial cost of the enhanced multiplier, plus the full cost of any actuarial
or other professional services required.
(c) Notwithstanding any provision of the System to the contrary, a
member who is hired after March 15,2004 and who is not participating in
the deferred retirement option plan (DROP) may elect a normal retirement
benefit in the amount of three and one-half (3.5) percent of average
monthly earnings for all future continuous service after making such
election if the member attains twenty (20) or more years of continuous
service, subject to a maximum of eighty-seven and one-half (87.5) percent
of average monthly earnings. Members electing this enhanced multiplier
shall thereafter contribute three (3) percent of earnings to the Trust Fund in
addition to the member contribution specified in Section 33.64(A). Such
member may also elect to purchase the enhanced multiplier for some or all
periods of continuous service prior to the date of the election, by paying
the full actuarial cost of the enhanced multiplier, plus the full cost of any
actuarial or other professional services required.
(d) Notwithstanding any provision of the System to the contrary. any
member who is actively employed on the effective date of this paragraph
and entered the deferred retirement option plan (DROP) with twenty (20)
or more years of credited service prior to March 15.2004. and any member
who retired under this subsection with twenty (20) or more years of
credited service prior to March 15. 2004. may. within ninety (90) days
following the effective date of this paragraph. elect a normal retirement
benefit in the amount of three and one-half (3.5) percent of average
monthly earnings. subiect to a maximum of eighty-seven and one-half
(87.5) percent of average monthly earnings. Members who elect the
enhanced multiplier must contribute the full actuarial cost of the enhanced
multiplier. plus the full cost of any actuarial or other professional services
required. in a one-time lump sum pavrnent.
WW The election to receive the enhanced multiplier under this
paragraph must be made in writing on a form provided by the City. Such
election shall be irrevocable. If an eligible member does not elect an
optional enhanced multiplier under this paragraph, or if an eligible
member elects the enhanced multiplier for only a portion of his total
continuous service, then the benefit provided in paragraph (2) shall be
used to calculate the benefit for all continuous service to which the
enhanced multiplier does not apply. If an eligible member elects the
enhanced multiplier and attains more than ten (10) but less than twenty
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(20) years of continuous service, the member's benefit shall be determined
in accordance with paragraph (2), and the member shall receive a refund of
all additional contributions and amounts paid for the enhanced multiplier,
without interest. In no event shall a member's total benefit be less than two
(2) percent of average monthly earnings for each year of continuous
servIce.
(4) Upon becoming eligible for normal retirement, a member shall be one
hundred (100) percent vested in his accrued benefit.
Section 2. That all ordinances or parts of ordinances in conflict herewith be, and the
same are hereby repealed.
Section 3 That should any section or provision of this ordinance or any portion thereof,
any paragraph, sentence, or word be declared by a court of competent jurisdiction to be invalid,
such decision shall not operate to invalidate the remainder hereof.
Section 4 That this ordinance shall become effective upon passage.
PASSED AND ADOPTED in regular session on second and final reading on this
the _ day of , 2004.
MAYOR
ATTEST:
City Clerk
First Reading
Second Reading
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