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Ord 57-02ORDINANCE NO. 57-02 AN ORDINANCE OF THE CITY COMMISSION OF THE CITY OF DELRAY BEACH, FLORIDA, AMENDING CHAPTER 35, "EMPLOYEES POLICIES AND BENEFITS", SUBHEADING "RETIREMENT PLAN", OF THE CODE OF ORDINANCES OF THE CITY OF DELRAY BEACH, FLORIDA, BY AMENDING SECTION 35.089, "DEFINITIONS", REVISING THE DEFINITION OF "EMPLOYEE" TO INCLUDE CERTAIN PREVIOUSLY EXCLUDED POSITIONS; AMENDING SECTION 35.093, "CREDITED SERVICE FOR FORMER EMPLOYEES AND EMPLOYEES WHO WERE EXCLUDED FROM PARTICIPATION IN THE PLAN", TO PROVIDE FOR CERTAIN PREVIOUSLY EXCLUDED EMPLOYEES TO PURCHASE CREDITED SERVICE UNDER THE PLAN; AMENDING SECTION 35.097, "RETIREMENT INCOME; BASIS, AMOUNT, AND PAYMENT", SUBSECTION (L), "DIRECT TRANSFERS OF F.I.IGIBLE ROLLOVER DISTRIBUTIONS", TO AI.IJOW PARTICIPANTS WHO WERE PREVIOUSLY EXCLUDED FROM PARTICIPATION IN THE PLAN TO MAKE A DIRECT TRANSFER OF ELIGIBLE ROLLOVER DISTRIBUTIONS TO PURCHASE CREDITED SERVICE UNDER THE PLAN; PROVIDING A GENERAL REPEALER CLAUSE; PROVIDING A VALIDITY CLAUSE; AND PROVIDING AN EFFECTIVE DATE. WHEREAS, the City Commission of the City of Delray Beach desires to amend the General Employees' Retirement Plan to allow certain employees who were previously excluded from the Plan to participate in the Plan and purchase credited service under the plan for the period of their employment with the City; NOW THEREFORE, BE IT ORDAINED BY THE CITY COMMISSION OF THE CITY OF DELRAY BEACH AS FOLLOWS: Section 1. That Chapter 35, "Employee Policies and Benefits", subheading, "Retirement Plan", of the Code of Ordinances of the City of Delray Beach is hereby amended by amending Section 35.089, "DEFINITIONS", to read as follows: Section 35.089 DEFINITIONS. (A) "Actuarial (actuarially) equivalence (equivalen0" means equality in value of the aggregate amounts expected to be received under different forms of payment. Actuarial equivalent amounts under the plan will be determined utilizing the 1983 Group Annuity Mortality Table, blended for males and females, with interest at seven percent (7%), where the participant's age shall be set back one year and the beneficiary's age shall be set back four years regardless of gender. However, in the event of plan termination, actuarial equivalence will be based upon the interest and mortality assumptions prescribed by the Pension Benefit Guaranty Corporation for plan terminations in effect on the actual date of plan termination. 03) "Basic compensation" means the compensation actually paid to a participant by the City, including participant contributions picked up by the City in accordance with Sec. 35.095(A)(1) of this subchapter, and exclusive of overtime pay, commissions, bonuses, expense allowances, and all other extraordinary compensation. (C) "Credited service" means the period of continuous City employment from the employee's most recent date of hire to the date of termination of City employment up to a maximum of thirty (30) years, except as otherwise provided in Sec. 35.093 of this subchapter, and the Uniformed Services Employment and Reemployment Rights Act of 1994, as amended from time to time. Credited service shall include all periods of paid leave, and unpaid leave up to and including thirty (30) days in any calendar year. Unpaid leave in excess of thirty 00) days in any calendar year shall be excluded from credited service, except as otherwise required by the Uniformed Services Employment and Reemployment Rights Act of 1994, as amended from time to time. 02)) "Employee" means any regular full-time employee of the City, except as otherwise provided herein. The term "employee" shall not include: City Commissioners; the City Manager (and assistants); the City Attorney (and assistants); depaxunent heads upon their written election not to participate in the plan; former department heads who have elected not to participate in the plan; any person not chssified by the City as a regular, full-time employee; any participant who retires and receives early or normal retirement benefits under the plan, is subsequently re- employed by the City, and elects to continue receiving retirement income during the period of employment pursuant to Sec. 35.090(E) of this subchapter; and firefLghters and police officers employed by the City who participate in another retirement plan. 2 ORD. NO. 57-02 Effective upon the adoption of this ordinance, the term "employee" shall include the City Manager (and assistants) upon their written election to participate in the plan; the City Attorney (and assistants) upon their written election to participate in the plan; and department heads who previously elected not to participate in the plan. upon their written election to participate in the plan. An employee's written election to participate in the plan pursuant to this para~aph must be submitted to the Retirement Committee within ninety days following adoption of this ordinance or date of employment in a position identified in this par%eraph, whichever is later. Such written election shall be irrevocable. Any such employee who does not submit a timely written election to participate in the plan pursuant to this para~aph shall not participate in the plan for as !.o. ng as he or she is employed by the City in a position identified in this paragraph. (E) "Employment" means regn~hr, full-time employment as a City employee. (F) "Final monthly compensation" means the total basic compensation received by a participant during the highest paid twenty-four (24) consecutive months of the one hundred twenty (120) months mediately preceding the termination of employment, divided by twenty-four (24). In computing final monthly compensation for a participant who has returned to active dty employment following an approved leave of absence, disability retirement or termination of employment with a vested benefit, the period of leave of absence, disability retirement, or following termination of employment shall be ignored in determining the highest paid 24 consecutive months of the 120 months immediately preceding the subsequent termination of employment. (G) "Normal retirement date" is the first day of the month coincident with or next following the date a participant attains the age of 60 and completes ten years of credited service, or the date on which a participant attains thirty (30) years of credited service, regardless of age, whichever occurs first. A participant may continue in the employ of the city and continue to participate in the plan beyond the normal retirement date. 0-I) "Participant" means an employee who is eligible to participate and who actually participates in the plan. (I) "Retirement" means either termination of City employment with mediate entitlement to receive normal, early or disability retirement income under the plan, or entry into the Deferred Retirement Option Plan ("DROP") with immediate entitlement to receive normal retirement income from the General Employees Retirement Plan to the DROP. 0) "Spouse" means the lawful husband or wife of an employee at the time of the employee's retirement or death, whichever is applicable. (IQ "Terminated Participant" means a plan partidpant with at least five (5) years of credited service whose City employment is terminated for any reason other than death, early retirement or disability retirement prior to the normal retirement date. 3 ORD. NO. 57-02 Section 2. That Chapter 35, "Employee Policies and Benefits", subheading, "Retirement Plan", of the Code of Ordinances of the City of Delray Beach is hereby amended by amending Section 35.093, "CREDITED SERVICE FOR FORMER EMPLOYEES AND EMPLOYEES WHO WERE EXCLUDED FROM PARTICIPATION IN THE PLAN", to read as follows: Section 35.093 CREDITED SERVICE FOR FORMER EMPLOYEES AND EMPLOYEES WHO WERE EXCLUDED FROM PARTICIPATION IN THE PLAN. (A) Former plan participants who have not begun to receive benefits under the plan and who are re-employed by the city as eligible employees will be considered new employees with credited service for all purposes calculated as such unless the former participants elect to pay back to the plan the amount of any previous distribution received from the plan plus interest. The amount of interest required will be calculated based upon a seven percent (7%) per annum rate for the period from date of original distribution to the date of repayment. Former plan participants who elect to repay this amount will be granted the credited service awarded prior to their previous termination of service. 03) Current employees, or employees who left the employ of the dty on or after January 1, 1984, who participated in the plan and who were excluded from further participation in the plan during employment due to being over the then-existing maximum age provisions, but who never received retirement income or withdrawal of participant contributions from the plan, shall have credited service for purposes of benefit calculation equal to the period of participation before exclusion plus one year, plus whatever time they elect to buy back under divisions (C) and (D) of this section, plus the time after September 25, 1984, during which they contributed to, and participated in the plan. If an employee who was excluded from further participation in the plan received retirement income or a withdrawal of participant contributions, then credited service for purposes of benefit calculation shall be equal to the number of years the employee elects to buy back under divisions (C) and (ID) of this section, plus one year, plus the time after September 25, 1984, during which the employee contributed to and participated in the plan. Employees in this category may buy back both those years for which they have received a withdrawal of participant contributions and the years during which they were excluded from the plan. In no event shall this credited service calculation exceed the total number of years of full-time employment with the city. (C) (1) Eligible employees who had previously been excluded from plan participation due to being over the then-existing maximum allowable age for participation at hire, or were excluded from the plan due to being over the then-existing maximum age at any time during their employment with the city, will have their credited service calculated in accordance with division 03) of this section. Eligible employees who wish to buy back any time they were excluded from the plan shall be required to make payment in accordance with division (D), which payment shall be equal to an amount which represents the employee contributions they would have made to the plan 4 ORD. NO. 57-02 had they always participated, plus interest. The amount of interest required will be calculated based upon a seven percent (7%) per annum rate for the period from which the money would otherwise have been paid into the plan to the date of repayment. Those employees who elect to make this payment will be granted credited service for purposes of benefit calculation in accordance with division (B). Employees will be required to buy back the most recent years first. All new participants will receive credited service for the purpose of determining their normal retirement date whether or not the optional payment is made. (2) The repayment provisions of division (G)(1) shall also be available to former employees who retired from the city on or after January 1, 1984, and who were excluded from the plan due to being over the then-existing maximum age, thereby being prevented from accruing ten years of credited service. (D) The repayment of a previous distribution plus interest under division (A) of this section or the payment of employee contributions plus interest under division (C) of this section will be payable in a lump sum within ninety (90) days after reemployment or on or before July 1, 1985, whichever is later. However, persons who are employees of the city as of January 16, 1985, at 5:01 p.m. may elect to pay the amount required in installments. If this option is used, $1,000 will be due on or before April 15, 1985, with subsequent payments of the lesser of $1,000 or the balance due payable every three months after the initial payment. If any type of benefit payment under the plan begins prior to the full payment of employee contributions or a previous distribution plus interest, the outstanding balance will be deducted from the benefit payments as they become due. The Retirement Committee shall have the authority to waive the repayment deadlines set forth herein, upon a finding by the Retirement Committee of extenuating circumstances upon individual request which shall be submitted not later than nine (9) months following the expiration of the applicable deadline. Employees who were previously excluded from the plan who elect to participate in the plan pursuant to Sec. 35.089(D)(2) shall earn credited service from the date of their election to participate in the plan. Such employees may also purchase credited service under the plan, in years and tenths of a year, for all or a portion of the period of their prior employment with the City, by pay~g into the plan the full actuarial cost of such credited service, as determined by the plan actuary. Such payment must be made in full prior to entering the DROP or separation from City employment, whichever occurs earlier, and in the event full payment is not made prior to such date, the member shall receive only the amount of credited service, as determined by the actuary, for which the payment made. excluding interest, ~s the full actuarial cost. A participant purchasing such additional credited service must pay the full cost of any actuarial calculations required. Payment for the purchase of credited service pursuant to this subsection may be made using any one or a combination of the following options: 5 ORD. NO. 57-02 Cash lump sum pa.vment~ Direct transfer or rollover of an eligible rollover distribution from a qualified plan. in accordance with Sec. 35.097{L). Time payment plan. Under this option the member may elect to pay any remaining balance due for the purchase of credited service through payroll deduction on a time payment plan over a period of not more than five (5) years, as approved by the Retirement Committee. Interest on such payments shall be paid based on the assumed rate of remm of the plan. Payments deducted from an employee's pay shall be des'~mnated as employer contributions pursuant to Section 414(h) of the Internal Revenue Code. Section 3. That Chapter 35, "Employee Policies and Benefits", subheading, "Retirement Plan", of the Code of Ordinances of the City of Delray Beach is hereby amended by amending Section 35.097, "RETIREMENT INCOME; BASIS, AMOUNT, AND PAYMENT", subsection (L), "Direct Transfers of Eligible Rollover Contributions", to read as follows: Section 35.097 RETIREMENT INCOME; BASIS, AMOUNT, AND PAYMENT. (L) Direct Transfers of Eligible Rollover Contributions. (1) General. This section applies to distributions made on or after January 1, 1993. Notwithstanding any provision of the system to the contrary that would otherwise limit a distributee's election under this section, a distributee may elect, at the time and in the manner prescribed by the Board, to have any portion of an eligible rollover paid directly to an eligible retirement plan specified by the distributee in a direct rollover. (2) Definitions. (a) Eligi~'ble rollover distribution. An eligible rollover distribution is any distribution of all or any portion of the balance to the credit of the distributee, except that an eligible rollover distribution does not include: any distribution that is one of a series of substantially equal periodic payments (not less frequently than annually) made for life (or life expectancy) of the distributee or the joint lives (or joint life expectancies) of the distributee and the distributee's designated beneficiary, or for a specified period of ten (10) years or more; any distribution to the extent such distribution is required under section 401(a)(9) of the Internal Revenue Code; and the portion of any distribution that is not includable in gross income. (b) Eligible retirement plan. An eligible retirement plan is an individual retirement account described in section 408(a) of the Internal Revenue Code, an individual retirement annuity described in section 408(b) of the Internal Revenue Code (other than an endowment contract), and annuity plan described in section 403(a) of the Internal Revenue Code, a 6 ORD. NO. 57-02 qualified trust described in section 401(a) of the Internal Revenue Code, an eligible deferred compensation plan described in section 457(b) of the Internal Revenue Code which is maintained by an eligible employer described in section 457(e)(1)(A) of the Internal Revenue Code, or an annuity contract described in section 403(b) of the Internal Revenue Code, that accepts the distributee's eligible rollover distribution. (c) Distributee. A distributee includes an employee or former employee. In addition, the employee's or former employee's surviving spouse is a disttibutee with regard to the interest of the spouse. (d) Direct rollover. A direct rollover is a payment by the plan to the eligible retirement plan specified by the distributee. (3) Rollovers or Transfers into the Fund. On or after the effective date of this ordinance, the fund will accept member rollover cash contributions and/or direct cash rollovers of distributions for the purchase of credited service pursuant to Sec. 35.093CE), as follows: the plan will accept either a direct rollover of an eligfi'ble rollover distribution or a member contribution of an eligfi'ble rollover distribution from a qualified plan described in section 403(a) of the Internal Revenue Code, from an annuity contract described in section 403(b) of the Internal Revenue Code, or from an eli~ble plan under section 457.(b) of the Internal Revenue Code, which is maintained by a state, political subdivision of a state, or any agency or instrumentality of a state or political subdivision of a state. Section 4. That all ordinances or parts of ordinances in conflict herewith be, and the same are hereby repealed. Section 5. 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 6. That this ordinance shall become effective immediately upon its passage on second and final reading, except as to plan participants who are covered under a collective bargaining agreement. This ordinance shall become effective as to the excluded employees immediately upon the date of ratification and execution of a collective bargaining agreement or memorandum of understanding that includes the provisions of this ordinance. 7 ORD. NO. 57-02 ~e ? PASSED AND ADOPTED in regm!ar session on second and final reading on this MAYOR ATTEST: City Clerk First Reading ~' Second Readm 8 ORD. NO. 5%02 MEMORANDUM TO: FROM: SUBJECT: DATE: MAYOR AND CITY COMMISSIONERS CITY MANAGER ~ AGENDA ITEM # ~'~ ff ORDINANCE NO. 57-02 POLICIES AND BENEFITS") - REGULAR MEETING OF JANUARY 7, 2005 (AMENDING CHAPTER 35, "EMPLOYEE JANUARY 3, 2003 This ordinance is before Commission for second reading and public hearing amending Chapter 35, "Employee Policies and Benefits", subheading "Retirement Plan", of the City Code of Ordinances to allow previously excluded employees to participate Lq the City's General Employees Retirement Plan via a written election to do so. At the first reading on December 10, 2002, the City Commission passed this ordinance. This ordinance has been submitted to our actuaries for their review. We expect to receive their report on Monday. Recommend approval of Ordinance No. 57-02 on second and final reading; providing we have received the actuarial report and it is satisfactory. S.\C~ty Clerk\chevelle folder\agenda memo Ord 57.02.1.07.03 doc [ITY OF I)ELIII:I¥ BEI:IgH CITY ATTORNEY'S OFFICE DATE: TO: FROM: SUBJECT: December 4, 2002 200 NW 1st AVENUE · DELRAY BEACH, FLORIDA 33444 TELEPHONE 561/243-7090 · FACSIMILE 561/278-4755 Wdter's Direct Line: 5611243-7091 MEMORANDUM City Commission Susan A. Ruby, City Attorney General Employees' Pension Plan Revisions Attached are revisions to the General Employees' Pension Plan. Also attached is a memorandum summarizing these changes. By copy of this memorandum to David Harden, City Manager, we are requesting that these ordinances be placed on the December 10, 2002 City Commission agenda. If you have any questions, please feel free to contact me. SAR:jw~~/' Attachments CC: David Harden, City Manager Barbara Garito, City Clerk Helping Shape Florida's Future® LEwIs, ATTORNEYS LONGMAN AT LAW REPLY TO: TALLAHASSEE Eric Ash Kristin Bennet~ W. O. Birchfleld Jody Lane Brooks William G. Capko Beth Ann Carlson Miehelle Diffenderfer Robert P. Diffenderfer Kenneth W. Dodge Amy M. Dukes Brenna Malouf Durden Laura Jacobs Feagin Roslyqn bi. Ferguson Wayne E. Flowers John ~,~. Forehand Walter E. Forehand Melissa G ro~s-Arnold Kevin S. Hennessy R. Ste,en Lewis Terry E. Lewis James ~,. Linn &nne Longman G. Stephen Manning David E. Rumba Kenneth G. Spillias Edwin A. Steinmeyer Glenn E. Thomas Stephen A. Walker www.llw-law.com Jacksonville Office 9428 Baymeadows Road Suite 625 Jacksonville, Florida 32256 (904) 737-2020 Fax: (904) 737-3221 l'allahassee Office Post Office Box 10788 (32J02) 125 South Gadsden Street Suite 300 Tallahassee, Florida 3230 ! {850) 222-5702 Fax: (850) 224-9242 West Palm Beach Office 1700 Palm Beach Lakes Boulevard, Suite 1000 West Palm Beach, Florida (561) 64O-O820 Faa: (561) 640-8202 MEMORANDUM TO: Susan Ruby, City Attorney City of Delray Beach FROM: James W. Linn DATE: November 21, 2002 Ordinances Amending the General Employees' Retirement Plan This memo summarizes the attached draft ordinances amending the General Employees' Retirement Plan. 1. Purchase of Prior Government Service Under the General Pension Plan--This ordinance creates a new Section 35.094 which would allow a participant in the General Employees' Retirement Plan who has at least five years of credited service based on City employment and who has not entered the DROP to purchase up to three additional years of credited service, in years and tenths of a year, for a like period of previous full-time employment with a federal, state or local government agency (other than the City of Delray Beach). The participant would have to pay the full actuarial cost of such credited service and the cost of any required actuarial calculations. No service credit would be allowed if the participant will receive any other retirement benefit based on the prior government service. Payment for the credited service could be made in a lump sum, by a direct transfer or rollover from a section 403Co) or 457 plan, or through installment payments deducted from the employees' pay over a maximum period of five years. 2. Participation in General Pension Plan of Previously Excluded Persons Amends the General Employees' Retirement Plan to allow certain employees who were previously excluded from the plan to participate in the plan by making a written election to do so. The affected employees are the city manager (and assistants), city attorney (and assistants), and department heads who previously elected not to participate in the plan. An employee who wants to participate in the plan would have to submit a written election within 90 days following adoption of the ordinance, or within 90 days following their date of employment in one of these positions, whichever is later. The written election to participate in the plan is irrevocable. Any employee who does not November 21, 2002 Page 2 submit a timely written election to participate in the plan shall not participate in the plan for as long as he or she is employed by the City in one of the identified positions. The ordinance also allows previously excluded employees who join the plan to buy credited service under the plan, in years and tenths of a year, for some or all of their previous City employment. Employees choosing this option will be required to pay the full actuarial cost of the credited service and the cost of any required actuarial calculations. Payment could be made in a lump sum, by a direct transfer or rollover from a section 403(b) or 457 plan, or through installment payments deducted from the employees' pay over a maximum period of five years. Please call me if you have any questions concerning the attached ordinances. JWL/es Attachments ORDINANCE NO. 57-02 AN ORDINANCE OF THE CITY COMMISSION OF THE CITY OF DELRAY BEACH, FLORIDA, AMENDING CHAPTER 35, "EMPLOYEES POLICIES AND BENEFITS", SUBHEADING "RETIREMENT PLAN", OF THE CODE OF ORDINANCES OF THE CITY OF DELRAY BEACH, FLORIDA, BY AMENDING SECTION 35.089, "DEFINITIONS", REVISING THE DEFINITION OF "EMPLOYEE" TO INCLUDE CERTAIN PREVIOUSLY EXCLUDED POSITIONS; AMENDING SECTION 35.093, "CREDITED SERVICE FOR FORMER EMPLOYEES AND EMPLOYEES WHO WERE EXCLUDED FROM PARTICIPATION IN THE PLAN", TO PROVIDE FOR CERTAIN PREVIOUSLY EXCLUDED EMPLOYEES TO PURCHASE CREDITED SERVICE UNDER THE PLAN; AMENDING SECTION 35.097, "RETIREMENT INCOME; BASIS, AMOUNT, AND PAYMENT", SUBSECTION (L), "DIRECT TRANSFERS OF ELIGIBLE ROLLOVER DISTRIBUTIONS", TO ALLOW PARTICIPANTS WHO WERE PREVIOUSLY EXCLUDED FROM PARTICIPATION IN THE PLAN TO MAKE A DIRECT TRANSFER OF ELIGIBLE ROLLOVER DISTRIBUTIONS TO PURCHASE CREDITED SERVICE UNDER THE PLAN; PROVIDING A GENERAL REPEALER CLAUSE; PROVIDING A VALIDITY CLAUSE; AND PROVIDING AN EFFECTIVE DATE. WHEREAS, the City Commission of the City of Delray Beach desires to amend the General Employees' Retirement Plan to allow certain employees who were previously excluded from the Plan to participate in the Plan and purchase credited service under the plan for the period of their employment with the City; NOW THEREFORE, BE IT ORDAINED BY THE CITY COMMISSION OF THE CITY OF DELRAY BEACH AS FOLLOWS: Section 1. That Chapter 35, "Employee Policies and Benefits", subheading, "Retirement Plan", of the Code of Ordinances of the City of Delray Beach is hereby amended by amending Section 35.089, "DEFINITIONS", to read as follows: Section 35.089 DEFINITIONS. (A) "Actuarial (actuarially) equivalence (equivalent)" means equality in value of the aggregate amounts expected to be received under different forms of payment. Actuarial equivalent amounts under the plan will be determined utilizing the 1983 Group Annuity Mortality Table, blended for males and females, with interest at seven percent (7%), where the participant's age shall be set back one year and the beneficiary's age shall be set back four years regardless of gender. However, in the event of plan termination, actuarial equivalence will be based upon the interest and mortality assumptions prescribed by the Pension Benefit Guaranty Corporation for plan terminations in effect on the actual date of plan termination. (B) "Basic compensation" means the compensation actually paid to a participant by the City, including participant contributions picked up by the City in accordance with Sec. 35.095(A)(1) of this subchapter, and exclusive of overtime pay, commissions, bonuses, expense allowances, and all other extraordinary compensation. (C) "Credited service" means the period of continuous City employment from the employee's most recent date of hire to the date of termination of City employment up to a maximum of thirty (30) years, except as otherwise provided in Sec. 35.093 of this subchapter, and the Uniformed Services Employment and Reemployment Rights Act of 1994, as amended from time to time. Credited service shall include all periods of paid leave, and unpaid leave up to and including thirty (30) days in any calendar year. Unpaid leave in excess of thirty (30) days in any calendar year shall be excluded from credited service, except as otherwise required by the Uniformed Services Employment and Reemployment Rights Act of 1994, as amended from time to time. (D) "Employee" means any regular full-time employee of the City, except as otherwise provided herein. (D The term "employee" shall not include: City Commissioners; the City Manager (and assistants); the City Attorney (and assistants); department heads upon their written election not to participate in the plan; former department heads who have elected not to participate in the plan; any person not classified by the City as a regular, full-time employee; any participant who retires and receives early or normal retirement benefits under the plan, is subsequently re-employed by the City, and elects to continue receiving retirement income during the period of employment pursuant to Sec. 35.090(E) of this subchapter; and firefighters and police officers employed by the City who participate in another retirement plan. (2) Effective upon the adoption of this ordinance, the term "employee" shall include the City Manager (and assistants) upon their written election to participate in the plan; the City Attorney (and assistants) upon their written election to participate in the plan; and department heads who previously elected not to participate in the plan, upon their written election to participate in the plan. An employee's written election to participate in the plan pursuant to this paragraph must be submitted to the Retirement Committee within nine _ty days following adoption of this ordinance or date of employrnent in a position identified in this paragraph, whichever is later. Such written election shall be irrevocable. Any such employee 2 ORD. NO. 57-02 who does not submit a timely written election to participate in the plan pursuant to this paragraph shall not participate in the plan for as long as he or she is employed by the City in a position identified in this paragraph. (E) "Employment" means regular, full-time employment as a City employee. (F) "Final monthly compensation" means the total basic compensation received by a participant during the highest paid twenty-four (24) consecutive months of the one hundred twenty (120) months immediately preceding the termination of employment, divided by twenty- four (24). In computing final monthly compensation for a participant who has returned to active city employment following an approved leave of absence, disability retirement or termination of employment with a vested benefit, the period of leave of absence, disability retirement, or following termination of employment shall be ignored in determining the highest paid 24 consecutive months of the 120 months immediately preceding the subsequent termination of employment. (G) "Normal retirement date" is the first day of the month coincident with or next following the date a participant attains the age of 60 and completes ten years of credited service, or the date on which a participant attains thirty (30) years of credited service, regardless of age, whichever occurs first. A participant may continue in the employ of the city and continue to participate in the plan beyond the normal retirement date. (H) "Participant" means an employee who is eligible to participate and who actually participates in the plan. (I) "Retirement" means either termination of City employment with immediate entitlement to receive normal, early or disability retirement income under the plan, or entry into the Deferred Retirement Option Plan ("DROP") with immediate entitlement to receive normal retirement income from the General Employees Retirement Plan to the DROP. (J) "Spouse" means the lawful husband or wife of an employee at the time of the employee's retirement or death, whichever is applicable. (K) "Terminated Participant" means a plan participant with at least five (5) years of credited service whose City employment is terminated for any reason other than death, early retirement or disability retirement prior to the normal retirement date. Section 2. That Chapter 35, "Employee Policies and Benefits", subheading, "Retirement Plan", of the Code of Ordinances of the City of Delray Beach is hereby amended by amending Section 35.093, "CREDITED SERVICE FOR FORMER EMPLOYEES AND EMPLOYEES WHO WERE EXCLUDED FROM PARTICIPATION IN THE PLAN", to read as follows: 3 ORD. NO. 57-02 Section 35.093 CREDITED SERVICE FOR FORMER EMPLOYEES AND EMPLOYEES WHO WERE EXCLUDED FROM PARTICIPATION IN THE PLAN. (A) Former plan participants who have not begun to receive benefits under the plan and who are re-employed by the city as eligible employees will be considered new employees with credited service for all purposes calculated as such unless the former participants elect to pay back to the plan the amount of any previous distribution received from the plan plus interest. The amount of interest required will be calculated based upon a seven percent (7%) per annum rate for the period from date of original distribution to the date of repayment. Former plan participants who elect to repay this amount will be granted the credited service awarded prior to their previous termination of service. (B) Current employees, or employees who left the employ of the city on or after January 1, 1984, who participated in the plan and who were excluded from further participation in the plan during employment due to being over the then-existing maximum age provisions, but who never received retirement income or withdrawal of participant contributions from the plan, shall have credited service for purposes of benefit calculation equal to the period of participation before exclusion plus one year, plus whatever time they elect to buy back under divisions (C) and (D) of this section, plus the time after September 25, 1984, during which they contributed to, and participated in the plan. If an employee who was excluded from further participation in the plan received retirement income or a withdrawal of participant contributions, then credited service for purposes of benefit calculation shall be equal to the number of years the employee elects to buy back under divisions (C) and (D) of this section, plus one year, plus the time after September 25, 1984, during which the employee contributed to and participated in the plan. Employees in this category may buy back both those years for which they have received a withdrawal of participant contributions and the years during which they were excluded from the plan. In no event shall this credited service calculation exceed the total number of years of full-time employment with the city. (C) (1) Eligible employees who had previously been excluded from plan participation due to being over the then-existing maximum allowable age for participation at hire, or were excluded from the plan due to being over the then-existing maximum age at any time during their employment with the city, will have their credited service calculated in accordance with division (B) of this section. Eligible employees who wish to buy back any time they were excluded from the plan shall be required to make payment in accordance with division (D), which payment shall be equal to an amount which represents the employee contributions they would have made to the plan had they always participated, plus interest. The amount of interest required will be calculated based upon a seven percent (7%) per annum rate for the period from which the money would otherwise have been paid into the plan to the date of repayment. Those employees who elect to make this payment will be granted credited service for purposes of benefit calculation in accordance with division (B). Employees will be required to buy back the most recent years first. All new participants will receive credited service for the purpose of determining their normal retirement date whether or not the optional payment is made. 4 ORD. NO. 57-02 (2) The repayment provisions of division (C)(1) shall also be available to former employees who retired from the city on or after January 1, 1984, and who were excluded from the plan due to being over the then-existing maximum age, thereby being prevented from accruing ten years of credited service. (D) The repayment of a previous distribution plus interest under division (A) of this section or the payment of employee contributions plus interest under division (C) of this section will be payable in a lump sum within ninety (90) days after reemployment or on or before July 1, 1985, whichever is later. However, persons who are employees of the city as of January 16, 1985, at 5:01 p.m. may elect to pay the amount required in installments. If this option is used, $1,000 will be due on or before April 15, 1985, with subsequent payments of the lesser of $1,000 or the balance due payable every three months after the initial payment. If any type of benefit payment under the plan begins prior to the full payment of employee contributions or a previous distribution plus interest, the outstanding balance will be deducted from the benefit payments as they become due. The Retirement Committee shall have the authority to waive the repayment deadlines set forth herein, upon a finding by the Retirement Committee of extenuating circumstances upon individual request which shall be submitted not later than nine (9) months following the expiration of the applicable deadline. (E) Employees who were previously excluded from the plan who elect to participate in the plan pursuant to Sec. 35.089(D)(2) shall earn credited service from the date of their election to participate in the plan. Such employees may also purchase credited service under the plan, in years and tenths of a year, for all or a portion of the period of their prior employment with the City, by paying into the plan the full actuarial cost of such credited service, as determined by the plan actuary. Such payment must be made in full prior to entering the DROP or separation from Ci_ty employment, whichever occurs earlier, and in the event full payment is not made prior to such date, the member shall receive only the amount of credited service, as determined by the actuary_, for which the payment made, excluding interest, is the full actuarial cost. A participant purchasing such additional credited service must pay the full cost of any actuarial calculations required. Payment for the purchase of credited service pursuant to this subsection may be made using any one or a combination of the following options: Cash lump sum payment. Direct transfer or rollover of an eligible rollover distribution from a qualified plan, in accordance with Sec. 35.097(L). Time payment plan. Under this option the member may elect to pay any remaining balance due for the purchase of credited service through payroll deduction on a time payment plan over a period of not more than five (5) years, as approved by the Retirement Committee. Interest on such payments shall be paid based on the assumed rate of return of the plan. Payments deducted from an employee's pay shall be designated as employer contributions pursuant to Section 414(h) of the Internal Revenue Code. 5 ORD. NO. 57-02 Section 3. That Chapter 35, "Employee Policies and Benefits", subheading, "Retirement Plan", of the Code of Ordinances of the City of Delray Beach is hereby amended by amending Section 35.097, "RETIREMENT INCOME; BASIS, AMOUNT, AND PAYMENT", subsection (L), "Direct Transfers of Eligible Rollover Contributions", to read as follows: Section 35.097 RETIREMENT INCOME; BASIS, AMOUNT, AND PAYMENT. (L) Direct Transfers of Eligible Rollover Contributions. (1) General. This section applies to distributions made on or after January 1, 1993. Notwithstanding any provision of the system to the contrary that would otherwise limit a distributee's election under this section, a distributee may elect, at the time and in the manner prescribed by the Board, to have any portion of an eligible rollover paid directly to an eligible retirement plan specified by the distributee in a direct rollover. (2) Definitions. (a) Eligible rollover distribution. An eligible rollover distribution is any distribution of all or any portion of the balance to the credit of the distributee, except that an eligible rollover distribution does not include: any distribution that is one of a series of substantially equal periodic payments (not less frequently than annually) made for life (or life expectancy) of the distributee or the joint lives (or joint life expectancies) of the distributee and the distributee's designated beneficiary, or for a specified period of ten (10) years or more; any distribution to the extent such distribution is required under section 401(a)(9) of the Internal Revenue Code; and the portion of any distribution that is not includable in gross income. (b) Eligible retirement plan. An eligible retirement plan is an individual retirement account described in section 408(a) of the Internal Revenue Code, an individual retirement annuity described in section 408(b) of the Internal Revenue Code (other than an endowment contract), and annuity plan described in section 403(a) of the Internal Revenue Code, a qualified trust described in section 401(a) of the Internal Revenue Code, an eligible deferred compensation plan described in section 457(b) of the Internal Revenue Code which is maintained by an eligible employer described in section 457(e)(1)(A) of the Intemal Revenue Code, or an annuity contract described in section 403(b) of the Internal Revenue Code, that accepts the distributee's eligible rollover distribution. (c) Distributee. A distributee includes an employee or former employee. In addition, the employee's or former employee's surviving spouse is a distributee with regard to the interest of the spouse. 6 ORD. NO. 57-02 (d) Direct rollover. A direct rollover is a payment by the plan to the eligible retirement plan specified by the distributee. (3) Rollovers or Transfers into the Fund. On or after the effective date of this ordinance, the fund will accept member rollover cash contributions and/or direct cash rollovers of distributions for the purchase of credited service pursuant to Sec. 35.093(E), as follows: the plan will accept either a direct rollover of an eligible rollover distribution or a member contribution of an eligible rollover distribution from a qualified plan described in section 403(a) of the Internal Revenue Code, from an almuity contract described in section 403(b) of the Intemal Revenue Code, or from an eligible plan under section 457(b) of the Internal Revenue Code, which is maintained by a state, political subdivision of a state, or any agency or instrumentality of a state or political subdivision of a state. Section 4. That all ordinances or parts of ordinances in conflict herewith be, and the same are hereby repealed. Section 5. 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 6. That this ordinance shall become effective immediately upon its passage on second and final reading, except as to plan participants who are covered under a collective bargaining agreement. This ordinance shall become effective as to the excluded employees immediately upon the date of ratification and execution of a collective bargaining agreement or memorandum of understanding that includes the provisions of this ordinance. the PASSED AND ADOPTED in regular session on second and final reading on this __ day of ,2002. MAYOR ATTEST: City Clerk First Reading Second Reading 7 ORD. NO. 57-02 01/06/03 12'59 FAX GABRIEL, ROE~IDI:I~. SMITH & COMPANY Consultant~ & Actuarie~ 301 East Las Ola$ Etivd · Sutle 200 ,, Fi Lauderdale, FL 33301-22.54., §54-52Z 1616 * FAX 954 525 (J083 January 6, 2003 Mr. Joseph M. Safford Director of Finance City of Delray Beach 100 Northwest 1st Avenue Delray Beach, Florida 33444 Re' Retirement Plan for General Employees Dear Joe: Pursuant to your request, we have prepared the enclosed Actuarial Impact Statement pertaining to ]he proposed ordinance allowing previously excluded employees to partIcipate in the Plan. The Staternent must be filed with the Bureau of Local Retirement Systems within the Division of Retirement before the final public hearing on the ordinance We welcome your questions and comments. S~ncerely yours, J. Stephen Palmquist JSP/or Enclosures 01/06/03 12:59 FAX ~003/011 RETIREMENT PLAN FOR EMPLOYEES OF THE CITY OF DELRAY BEACH Impact Statement - January 6, 2003 Description of Amendment An amendment is being proposed that would allow previously excluded employees to participate in the Retirement Plan if they made written election to do so. The affected employees are the city manager and attorney (and their assistants) and department heads who previously elected not to participate in the plan. They will receive credit for future service only. However, credit for past service may be obtained by paying the full actuarial cost of such service Funding Implications of Amendment An actuarial cost estimate is attached. If all nine eligible employees parhcipate, the annual required contribution to the Plan will increase by $192,181, from $370,449 to $562,630. 'l-h~s analysis does not include credit for any past service Certification of Administrator I believe the amendment to be in compliance with Pad VII, Chapter 112, Flodda Statutes and Section 14, Article X of the Constitution of the State of Flodda. For the Board of Trustees as Plan Administrator 01/06/03 13:00 FAX ~004/011 SUPPLEMENTAL ACTUARIAL VALUATION REPORT Plan Retirement Plan for Employees of the City of Delray Beach. Va|uation Date October 1, 2001 Date of Report January 6, 2003 Report Requested by Director of Finance Prepared by J.Stephen Palmquist Group Valued All Plan participants. Plan Provisions Being Considered for Change Present ProvIsion Before Chanqe City manager and attorney (and their assistants) and department heads are excluded from Plan part~c~pahon. Proposed Chanqe Allow city manager and attorney (and their assistants) and department heads to participate in the Plan if they so choose. They will receive credit for future service only_ Partmipants Affected Those City employees previously excluded (nine employees)_ Actuarial Assumptions and Methods Same as October 1, 2001 Actuarial Valuation Repod with no exceptions. Some of the key assumptions/methods are: Investment return - ?.75% per year Salary increase - 5 0% per year Cost Method - Aggregate 01/06/03 ~3:00 FAX Amortization Period for Any Increase in Actuarial Accrued Liability N/A Summary of Data Used in Report See attached page. Actuarial Impact of Proposal(s) See attached page(s)_ The proposed ordinance allows the previously excluded employees to purchase their prior employment service (service prior to their date of e~ection to participate in this plan). If they opt to purchase this prior service, the cost of such service shall be borne by each respective employee so there is no actuarial impact on the Plan for the previous serv,ce_ Special Risks Involved With the Proposal That the Plan Has Not Been Exposed to Previously None. Other Cost Considerations As a result of negative stock market returns since September 30, 2001, there will be a loss from investments for the year ended September 30, 2002. Unless there are offsetting gains from other sources, the October 1, 2002 actuarial valuation repod will show a cost increase. Users of this Supplemental Report should be aware of likely future cost increases over and above those shown in this Report. Possible Conflicts With IRS Qualification Rules None. ~ 0~/06/03 13:00 FAX ~006/011 ...... ". ..........o,-,,,,,,,,,:,,-..,",..,,-o,,.,~,;-,,,,,.--,- -~-,,,," ', ...... , ........ ":., ..';'. ";,..~?:A~.'.Of:'Oct°b~,:l'~. ~ ,'ir2901 ..... .... ,-- [, Before Benefit,. , ' .;.After Benef,t | ,.,,, Cl~a~oges. I, ....Changes J " ',' ' ..... ~" ...... ', _ %'i' "~' ' ' Number Included in the Valuation 1. Active Members 2. Inactive Members B. Covered Annual Payroll 353 177 $11,995,941 362 177' $12,814,210 C Actuarial Present Value of Projected Benefits D. Actuarial Value of Assets E. Actuarial Present Value of Future Contributions 1. Total: C-D 2 Portion Assigned to Unfunded Actuarial Accrued Liability (UAAL) 3. Podion Assigned to Future Normal Costs 57,840,618 55,160,299 2,680,319 0 2.680,319 59,374,035 55,160,299 4,213,73§ 0 4,213,736 F. Annual Payment Needed to Amortize UAAL As % of B G. Annual Employer Normal Cost As% of B Interest on F and G from Valuation Date to Contribution Date(s) As % of B I. Required Employer Contribution: F + G + H As%orB Year to Wtnch Contributions Apply 1. Plan Year Ending 2. Employer Fiscal Year Ending 3. Assumed Date(s) of Employer Contrib. 337,576 2.82% 32,873 0 27% 370,449 3.09% 9130/02 9/30/03 12/31/02 512,703 4.00% 49,927 0 39% 562,630 4.39% 9/30102 9/30/03 12/31/02 * After adoption of Early Retirement Incentive Program 01/06/03 13'01 FAX {~007/011 Actuarial Present Value of Projected Benefits for Active Members a. Service Retirement Benefits b Vesting Benefits c Disability Benefits d. Preretirement Death Benefits e. Return of Member Contributions f. Other g. Total $ 35,788,951 1,492,694 1,424.345 1,821,001 4,648 0 40,531,639 2. Inactive Members a. Service Retirees and Beneficiaries b. Disability Retirees c. Terminated Vested Members d. Total 3. Total for All Members B. Actuanal Value of Assets C. Unfunded Actuarial Accrued Liability C. Actuarial Present Value of Projected Member Contributions E. Actuarial Present Value of Projected Employer Normal Costs: A3 - B - C - D F. Actuarial Present Value of Projected Covered Payroll G. Employer Normal Cost Rate: 100 x E/F H Annual Payroll of Active Members I Employer Normal Cast: G x H J. Assumed Amount of Administrative Expenses K Total Employer Normal Cost: I + J ' After adoption of Early Retirement Incentive Program. 13,978,653 188,10F 31~42 219 17,308,979 57,840,618 55,160,299 2,680,319 102,570,450 2.61% 11,995,941 313,094 24,482 337,576 $ 37,069,673 1,503,954 1,492,519 1,994,262 4,648 0 42,065,056 13,978,653 188,107 3,~42.~ 17,308,979 59,374,035 55,160,299 0 4,213,736 110,587,330 3.81% 12,814,210 488,221 24.482 512,703 01/06/05 13:01 FAX ~008/011 Ii Before t After Change Chan~le -;- ........ ,~";F' ~7-,,- .......... ,., ..... ' , ,. ', ,, , Number Total Annual Payroll Average Annual Salary Other Averages Current Age Age at Employment Past Service 353 11,995,941 33,983 44.4 34.8 9.6 362 12,814,210 35,398 44.5 3§.1 9.4 Sel!VlCe._____.~ r. ~ __~____ ; ,:._~...rRetlrees;''Ben~ficmi'i~r~li~d:EIROP,;,Par~"c;maO,''~'~ , ,:.i ", ", ........ ,-, -., · ~ ......... ,, ,,,,,, , ,, ,,.,. TotalAnnual Benefit $ 1,791,501 $ 1,791,501 Average Monthly Benefit 96g 969 Dis~bllltV' Retii;ees,' ~ ,,, ,, ,, ,,,:i: ,, , ..', ,,?,,,:,,,,,, :,,..., ...., .,,,,,,,,,,,,,,~; ...... .,,, ,, :, ....... ,,,: Number Total Annual Benefit Average Monthly Benefit 1 19,842 1,654 1 19,842 1,654 Number Total Annual Benefit Average Monthly Benefit 22 $ 166,875 632 22 $ 166,875 632 100 ANNOUNCEMENTS Li~4L NOTIC~ A P1J~LIC I-r~ING v/~ M bela on ~e JANUARY ~~ I~NW B~CH FLORID~ BY ~BSEETIOh C 'CREDI~D ~5. ~D CRATING A ~ ~ ~ TO ~ PA~TICI- P~S WITH AT OF CREDITED SERVICE T0 C~ UP TO THR~ CREDITED SERVICE ~ED ~IDING A GENE~ R~R C~USE PR~IDING A VALIO~ T~ DA~ M~I~ ~ T~ CI~ ~ ~L~Y ~S SUBH~ING R~RE- ~CH ~ Bv ~END(~ ~IOU~Y ~ ~ITI~. ~D ~RVI~E ~ ~LU~ ~ P~P~ AMENDING SECTION :~ 097, "RETIREMENTINCOME,BASIS AMOUNT, AND PAYMENT~, TIO~ (L), "DIRECT ~RS OF ELIGIBLE ROLL0VERDISTRIBU- TIONS' TO ALLOW WHO WERE PREVIOUSLY EXCLUDED ~ PART~CIPA3'~3N IN ~ PLAN TO ~ A DIRECT TRANC-~CER OF ELIBISLE ROLLOVER DISTRIBU- TIONS TO PURCHASE CREDITEB SERVICE UNDER THE PLAN, PROVIO- lNG A GENERAL REPEALER ~ PROVIDING A VALIDI'~ CI. ALISE AND F~OVIDING AN EFFECTIVE DATE MISSION OF 'fNE CiTY OF BELRA¥ ~ZT.H, FLORIDA, AML~d~ING DHAP- ~ 33, 'POLICE AND RP,~ DEPART- MEl~r$ SUBHrr. ADING "PENSIONS, OF THE CODE OF ORDINANCES OF THE CITY 0¢ DELRAY BEACH, FLORi- DA ~Y AMENDING SECTION 3360 ~D~FINr~ION$ REVISING THE DEFI- NITION OF "CONTINUOUS SERVICE TO I~RMIT A FtREFtGHTER wrl~ AT LEAST F~'VE YEARS OF CONTINUOUS S~RVIDE TO PURCHASE UP TO THREE ADDITIONAL YEARS OF SER- VICE FOR Pf:ll~ EMPLOYMENT AS A POLICE OFFICER OR FIRERGHTER AMENDING SECTION ~3 70 "DIRECT TRANSFERS OF ELIGIBLE ROLLOVER GONTRII~JT~ONS~ TO PROVIO[ FO~ ROU.OVERS OR TRANSFERS INTO CONTINUOUS SERVICE. PROVIDING A REI=E~LER CLAUSE PROVIO~NG A VALIDr/'Y CLAUSE AND PROVIDING AN ORDINANCE OF THE CITY CO~- MISSION OF THE C¢¢Y OF GELRAY OF.A~H, FLORIDA. AMENDING CHAP- ~ 3~ 'POLK;E ~ FIRE OEPART- MENTS SU~IEADING 'PENSIONS, OF THE CODE OF O~OINANCES OF THE CITY OF DELRAY BEACH, DA, BY AMENDING SECTION 3360 "~NITIONS', REVISING THE NINON OF "CONTINUOUS SERVICE' FOR CERTAIN PURPOSES TO IN~.UDE PREVIOUS SEI~/IC~ AS A I~ ,~,,ECTION 33 71 "COORDINA- ~ OE RETirEMENT I~OV~DING FOR COORDINATION OF ~r~l'Ts FOR M~.M~RS WHO HAW EMPLOYEE, AMENDING SECTION 3370 'DIRECT TRANSR~RS OF ELP- GIBLE ROLLOVER CONTRIBUTIONS TO PROVIDE R~ ROLLOVERS OR 1RANSFE~ INT0 ~ PJND FOR TH~ PURCHASE OF CONTINUOUS SERVICE, PROV1DfNG A REPEALER CLAUSE PROVIDING A VALIDITY CLAUSE, AND PROVIDING AN TNE DATE 'EMERGENCY MEDICAL TRANSPORTAT)ON FEES', ~ ~A), TO ~U~ ~ ~E ~D~ ~ ~E~ M~ ~ATI~ IN ~* W~ ~ ~TI~ ~ERI* ~, ~IDING A GENE~ flE~LER C~US~, k C~, ~D ~ ~TI~ ~ ~ ~re ~ ~ ~FS ~.~ ~ ~r 27 ~ IF DELRAY MISSION CYr ~EACH FLORIDA. AMI DING SEC TION 4 6 g -OFF-STRf : pARKiNG JBSECTION : pAR~ING R[-GULAT :)NS, 4 6 9(E) LOCATIOf' SPN~S, OF THE L DEV[LOP' MENI' RE( ,uLAT)O~$ ~E C~TY OF ~i ~H, TC VIDE ~R RE~lSED N L)E~J 0~ NG REGU LAT~)NS PROVIDff GENERAL REI~.A~ ~ CLNd~ ~vING OLAt~3E ~ AN EF ~CTNE DAlE BF..A~H, LO, IDA, AMENDING I~I,I~E N 3 51.0~ By AMENDING SEC- LARIFY~NG 'I'~T THE LOT~. I~ON 1 (REPERRi D TO IN ~U~ L~ 3 ~ TY~ CODE OF ORDINANCES ur' CfTY OF DELRAY BrcA~H BY AMENu- I~G CHAPTER 111, "ADVERTISING" BY REPEALING SECTION 111 lB, -D~TRIBUTII~i COMMERCIAL ~O ~IAL HANDBILLS IN ~ A NEW SECTION 111 'OISTRIBLn'ING O3MMERClAL AND lION.COMMERCIAL I.IANOBILLS. N ~UMJ~.. AND AN ER=ECTNE DATE