Res 68-01RESOLUTION NO. 6801
A RESOLUTION OF THE CITY COMMISSION OF THE CITY
OF DELRAY BEACH AUTHORIZING AND DESIGNATING
THE INCLUSION OF THE MAYOR AND CITY
COMMISSIONERS IN THE ELECTED OFFICERS' CLASS OF
THE FLORIDA RETIREMENT SYSTEM.
WHEREAS, the Florida Legislature has amended Section 121.052(1)(e), Florida
Statutes, to permit the governing body of a municipality to designate all of its elected positions for
inclusion in the Elected Officers' Class of the Florida Retirement System; and
WHEREAS, the designation of municipal elected officials to participate in the
Elected Officers' Class of the Florida Retirement System must be made between July 1, 2001 and
December 31,2001; and
WHEREAS, members of the City Commission of the City of Delray Beach have
not previously participated in any City retirement program; and
WHEREAS, the City Commission of the City of Delray Beach finds that giving
elected City Commissioners the ability to participate in the Elected Officers' Class of the Florida
Retirement System will benefit the City by making the office of City Commissioner more desirable
to citizens of the City, thereby increasing participation in the election process and encouraging
qualified individuals to seek and hold elected office as City Commissioners; and
WWrlEREAS, inclusion of City Commissioners in the Elected Officers' Class of the
Florida Retirement System requires that the City first apply to become a participating employer in
the Florida Retirement System;
NOW, THEREFORE, BE IT RESOLVED BY THE CITY COMMISSION
OF THE CITY OF DELRAY BEACH, FLORIDA, AS FOLLOWS:
Section 1. That the City through its staff immediately apply to become a
participating employer in the Florida Retirement System, and provide such additional information
as may be requested by the Florida Division of Retirement, such that those persons now serving as
elected City Commissioners, as well as those persons elected as City Commissioners in the future,
may participate in the Elected Officers' Class of the Florida Retirement System.
1 Resolution No. 68-01
Section 2. That the City resolves by majority vote of this Commission, its
governing body, to designate all its elective positions for inclusion in the Elected Officers' Class of
the Florida Retirement System.
Section 3. That City staff is authorized and directed to make such payments as
may be required to fund the participation of City Commissioners in the Elected Officers' Class of
the Florida Retirement System, as well as the cost of credit for prior service as a City
Commissioner for all Commissioners who are eligible for such past service credit.
2001.
PASSED AND ADOPTED in regular session on this the 6~ day of November,
ATTEST:
C~ Clerk
MAYOR
2 Resolution No. 68-01
CITY (IF DELRI:I¥ BEI:I[H
CITY ATTORNEY'S OFFICE
1993
DATE:
November 1,2001
200 NW 1st AVENUE · DELRAY BEACH, FLORIDA 33444
TELEPHONE 561 '243-7090 · FACSIMILE 561/278-4755
Writer's D~ect lane 561/243-7091
MEMORANDUM-
TO:
City Commission
David Harden, City Manager
Joe Safford, Finance Director
FROM:
Susan A. Ruby, City Attorney
SUBJECT: Florida Retirement System Option (FRS)
I requested and just received from the City's pension lawyer, Jim Linn, more
information on the elected officers' option to participate in the FRS.
The election to participate must be by majority vote and if a majority decides to
participate, all must participate.
The Division of Retirement must receive the applications by November 15, 2001.
Because of the impending deadlines, I suggest that the resolution be placed on
the November 6, 2001 agenda, to give the Commission the chance to participate if
they desire to do so.
Attachment
cc: Barbara Garito, City Clerk
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MEMORANDUM
Reply To. TALLAHA$SEE
TO
Susan Ruby, C~ty Attorney
City of Delray Beach
F R L'-).L ~ ),m Linn
D4TE
November 2, 2001
Partiopation of City Commissioners in the Florida Retirement System Elected
Officers' Class
TNs responds to your request for additional information concerning the recent change
~:~ 5tdt~ In~ that allov~s local elected offioals to participate in the elected officers' class of the
F'or:da Retirement System (FRSL The change, contained in Chapter 2001-235, Laws of
F lu~ ~da, amends Sect,on 121.052t3)(e), Florida Statutes, to state:
Effective July 1, 2001, the governing body of a municipality or speoal d~stnct
may, by majority vote, elect to designate all its elected off~oals for ~nclus¢on
~r~ ti~e Elected Officers' Class. Such election shall be made between )ul;. 1,
2,,o~ and December 31, 2001, and shall be irrevocable. The designabon of
sL,,-h posmons shall be effective the first day of the month following receipt
b, the Department [Division of Rebrement] of the ordinance or resolution
passed by the governing body.
Elected Officers' Class - The FRS elected officers' class provides enhanced pension
benefits and retirement options for elected officials of participating state agenoes
and local governments The benefit formula for members of the elected officers' class is 3%
of average final compensation multiplied by years of credited service. An elected officer must
ha~ e at least s~x years of credited service under FRS to become vested 0.e.,
',425 Ba,,rnc~du~, R,',ad
2_,2u'~a, ,'0,.: '3--~221
Tallahassee Office
Post Office Box 10788 (32302)
125 South Gadsden Street · Suite 300
Tallahassee. Florida 32301
(850) 222-5702 · Fax (850) 224-9242
~/VW' LLVv-LAW COM
l ":00 PMm Beach
S~;~an Ruby, City Attorney
~Nc,~ ember 2, 2001
Page 2
entitled to receive a retirement benefit at early or normal, retirement age). For example, an
elected officia['who has six years: of credited service as a member'of the FRS elected officers'
class ~s entitled to receive a pension benefit equal to 18% of average final compensation upon
'redch~ng normal retirement age (age 62 or upon completing 30 years of credited service
under FRSI.
The elected officers' class benefit formula can be especially advantageous for a
member who earns several years of credited serwce as an elected officer, and then transitions
t,:, a t'.~gt~er paying posit~on w~th a state or local government agency that participates m FRS.
For e,,~mple, a C~t.~ Commissioner who recewes an annual salary of $5,000 would be ent,tled
:o a pension benefit of $900 per year (at normal retirement age) based on six years of credited
.~_'~ ,ce ~n the elected officers' class. However, if the same Commissioner after leaving elected
office were to be employed ~or three or more years ~n a state or local government pos~t~on
under FRS paying $75,000 per year, his/her FRS pension benefit would ~ncrease to
a;~_,r,.~ ~mately $17,000 annually (at normal retirement age).
Purchase of Credit for Past Service as a City Commissioner - C~ty Commissioners
v. t-~,:, become members of the FRS elected officers' class pursuant to the new law wtll be able
to purchase past service credit under the elected officers' class for a}l years of service as a Cit.~
Commissioner, if they have not participated m any other City retirement plan. ']-he cost of
s~c,~ past service may be pa~d either by the City, if the C~ty Commission approves th~s for all
eligible members, or by each individual member,-by paying the applicable contrib~t~on rate
for tt,c years of past service, plus 6.5% interest The current contribution rate for the e~ecte~
r,I!~,~,~s class~ 15 14% of compensation.
Senior Management Class Option - A member of the FRS elected officers' class may
ol:,t t(, part<~pate ~n the senior management class of FRS instead of the elected officers' class
?~ , ~[r, ct[on must be made w~th~n 6 months after first jo~mng the elected officers' class The
i~,,:,,.~ formula for members of the senior management class is 2% of average t~nal
~:~_er~sat~on multiplied by years of credited service. However, members of the sen~or
ma.~:~gement class can elect to participate in the optional annuity program for sen~or
managers. This program provides retirement and death benefits through contracts w~th
designated insurance companies (the two currently designated providers are Aetna and Great
\\ e~t The C~ty would contribute 12.49% of compensation to the optional annuity' program
or, befall of each partic~pat;ng elected officer. In addition, each participant ~n the optional
ambush' program may contribute up to the same amount contributed by the C~ty Upon
te~m:nat~on of employment, the member receives a benefit based on the value of their
account ~n the optional annuity program, or may roll over the account balance ~nto another
qual:fied retirement plan or IRA, in accordance w~th the provisions of the annu~' program
selected b~,, the member.
Susan Ruby, C~ty Attorney
November 2, 2001
Page 3
_FRS Optional Defined Contribution-Retirement Plan-- Th6 Legisla-tu~'e enacted 'an-
optional defined-contribution (DC) plan for all FRS members last year, which is scheduled
tO beg~n enrolling members in 2002. Under the optional DC plan, an employee maS' p~ace
the employer's pension contribution ~nto an array of mutual funds, annulbes, and o~'her
~n',estments The employee's pension benefit will consist of the amounts contributed plus
the return on his or her investments, rather than the fixed benefit guaranteed under the
regular FRS plan. Emp}oyee contributions may not be made to the optional DC plan.
Part~opation in the DC program is optional. Any employee, whether current or new, may
chc, o~e e~ther the traditional defined benefit plan or the new DC option. Vesting under'the
E)C program requires one year of participation, as compared with 6 years under FRS A
c~,r,~,]t FRS member who has more than one year of FRS parbcipation at the tm~e he or st~e
sw~Ict~es to the DC program will vest immediately. FRS members who elect to participate
~n the optional retirement plan may either leave their accrued benefit in the regular FRS
plan, or transfer its &scounted present value to the DC plan. The optional defined
contrrbubon plan will be available to participating city employees, including members oi:
the elected ofhcers' class, beg,nning in December 2002.
Withdrawal From FRS - A member of the elected officers' class may also elect to
withdraw entirely from the Florida Retirement System.
Procedure for City Commissioners to Join the FRS Elected Officers' Class -- In order
l'c,' (-i-,,, Commissioners to participate in the FRS elected officers' class, the C~h n~ust first
a;~!_~, to become a part~cipahng employer in the Florida Retirement System. The C~tv must
sb'~'~ .~t a ~ ntlen request for an application form to the Division of Rehrement. his Pat Ochoa
~. t~,e I-RS Enrollment Section appears to be the point person for the D~v~s~on of Retirement
on th~s issue. Ms. Ochoa's phone number is 850/488-8837, and her fax number ~s 850/410-
2'043. Although the statute states that the governing body of the municipalm,' must pass an
ordinance or resolution by December 31, 2001, designating all its elected positions for
n;clus~on ~n the elected officers' class, the Division of Retirement has indicated that the
a!:,l)l~cat~nn for FRS membership must be received by November 15, 2001 to insure that
elected officers can begin participating in the FRS elected officers' class by January' 1, 2002
A draft resolution directing City staff to file an application for FRS participation, and
designating all members of the City Commission for participation in the erected officers' class,
~s en,-In~ed P~ase call me if you have further questions concerning th~s matter
EnchDsure
RESOLUTION NO. 68431
A RESOLUTION OF THE CITY COMMISSION OF THE CITY
OF DELRAY BEACH AUTHORIZING AND DESIGNATING
THE INCLUSION OF -THE MAYOR AND CITY
COMMISSIONERS IN THE ELECTED OFFICERS' CLASS OF
THE FLORIDA RETIREMENT SYSTEM.
WHEREAS, the Florida Legislature has amended Section 121.052(1)(e-), Florida
Statutes, to permit the governing body of a municipality to designate all of its elected positions for
inclusion in the Elected Officers' Class of the Florida Retirement System; and
WHEREAS, the designation of municipal elected officials to participate in the
Elected Officers' Class of the Florida Retirement System must be made between July 1,2001 and
December 31,2001; and
WHEREAS, members of the City Commission of the City of Delray Beach have
not previously participated in any City retirement program; and
WHEREAS, the City Commission of the City of Delray Beach finds that giving
elected City Commissioners the ability to participate in the Elected Officers' Class of the Florida
Retirement System will benefit the City by making the office of City Commissioner more desirable
to citizens of the City, thereby increasing participation in the election process and encouraging
qualified individuals to seek and hold elected office as City Commissioners; and
WHEREAS, inclusion of City Commissioners in the Elected Officers' Class of the
Florida Retirement System requires that the City first apply to become a participating employer in
the Florida Retirement System;
NOW, THEREFORE, BE IT RESOLVED BY THE CITY COMMISSION
OF THE CITY OF DELRAY BEACH, FLORIDA, AS FOLLOWS:
Section 1. That the City through its staff immediately apply to become a
participating employer in the Florida Retirement System, and provide such additional information
as may be requested by the Florida Division of Retirement, such that those persons now serving as
elected City Commissioners, as well as those persons elected as City Commissioners in the future,
may participate in the Elected Officers' Class of the Florida Retirement System.
Section 2. _That the City resolves by majority vote' of this Commission, its
governing body, to designate all its elective positions for inclusion in the Elected Officers' Class of
the Florida Retirement System.
Section 3. That City staff is authorized and directed to make such payments as
may be required to fund the participation of City Commissioners in. the Elected Officers' Class of
the Florida Retirement System, as well as the cost of credit for prior service as a City
Commissioner for all Commissioners who are eligible for such past service credit.
2001.
PASSED AND ADOPTED m regular session on this the 6~ day of November,
ATTEST:
MAYOR
City Clerk