Res 52-99RESOLUTION NO. 52-99
A RESOLUTION OF THE CITY COMMISSION OF THE CITY OF
DELRAY BEACH, FLORIDA, ESTABLISHING A DEFERRED
RETIREMENT OPTION PLAN FOR CERTAIN ELIGIBLE
EMPLOYEES AND ADOPTING THE DECLARATION OF TRUST OF
ICMA RETIREMENT TRUST; PROVIDING FOR A COORDINATOR;
PROVIDING AN EFFECTIVE DATE.
WHEREAS, the City of Delray Beach, Florida (hereinatter referred to as the "City") has previously
established and maintains a deferred compensation plan for certain of its employees which is administered
by the ICMA Retirement Corporation (hereinaRer referred to as the "Administrator"); and,
WHEREAS, the City desires to establish a Deferred Retirement Option Plan (DROP Plan) for
certain eligible employees; and,
WHEREAS, the City desires that the DROP Plan be administered by the ICMA Retirement
Corporation and the funds held under such a plan shall be invested in the ICMA Retirement Trust, a mast
established by public employees for the collective investment of funds held under their retirement plans.
WHEREAS, other public employers have joined together to establish the ICMA Retirement Trust
for the purpose of representing the interests of the participating employers with respect to the collective
investment of funds held under their deferred compensation plans; and,
WHEREAS, the City does hereby wish to execute the Declaration of Trust of ICMA Retirement
Trust.
NOW, THEREFORE, BE IT RESOLVED BY THE CITY COMMISSION OF THE CITY OF
DELRAY BEACH, FLORIDA, AS FOLLOWS:
Section 1. That the City does hereby establish a DROP Plan in the form provided by the plan
attached hereto as Appendix A for certain eligible employees and executes the Declaration of Trust with
the ICMA Retirement Corporation, as same appears in Appendix "B" which is attached hereto and made a
part hereof, as an amendment and restatement of its existing agreement with the ICMA Retirement
Corporation, intending that this execution to be operative with respect to any retirement or deferred
compensation plan subsequently established by the City if the assets of the plan are to be invested in the
ICMA Retirement Trust, and directs the ICMA Retirement Corporation, as Trustee, to invest all funds held
under the deferred compensation plan through the ICMA Retirement Trust as soon as is practicable.
Section 2. Employees eligible to participate in the DROP plan are those employees who are
eligible members of the General Employee Pension Plan under the terms and conditions set forth in City
ordinances as may be amended from time to time.
Section 3. That the City hereby agrees to serve as trustee under the Plan and to invest funds
held under the Plan in the ICMA Retirement Trust.
Section 4. That the City does hereby authorize the City Manager of the City of Delray Beach,
Florida to be the coordinator for this program, and to be the official of the City authorized to receive the
necessary reports, notices, etc. from the ICMA Retirement Corporation or ICMA Retirement Trust as
administrator, and to cast, on behalf of the City, any required votes under the program and is authorized to
execute all necessary agreements with the ICMA Retirement Corporation incidental to the administration of
the program. All administrative duties to carry out the plan may be assigned by the City Manager to either
the City Manager's Office or to appropriate departments of the City.
PASSED AND ADOPTED in regular session on this the ! 7 thday of August ,1999.
ATTEST:
City Clerk ~ /
2 RES. NO, 52-99
ORDINANCE NO. 30-99
AN ORDINANCE OF THE CITY COIVIMISSION OF THE CITY OF DELKAY BEACH,
FLORIDA, AMENDING CHAPTER 35, 'EIVIPLOYEES POLICIES AND BENEFITS",
SLrBHEADING 'RETIREMENT PLAN", OF THE CODE OF ORDINANCES OF TIlE
CITY OF DELRAY BEACH BY AMENDING SECTION 35.089, 'DEFINITIONS", TO
PROVIDE CHANGES IN THE DEFINITIONS OF "NORMAL RETIREMENT DATE",
~RETIP~E1VIENT" AND ~TERMINATED PARTICIPANT"; AMENDING SECTION
35.095, "CONTRIBUTIONS OF PARTICIPANT AND CITY", SUBSECTION 35.095(A),
'PARTICIPANT'S CONTRIBUTION ACCOUNT", TO PROVIDE FOR CHANGES TO
CERTAIN PARTICIPANT CONTRIBUTIONS, AND TO PROVIDE FOR VARIABLE
INTEREST ON CONTRIBUTIONS WITHDRAWN BY CERTAIN PARTICIPANTS
PRIOR TO NORMAL RETIREMENT; AMENDING SECTION 35.097, ~RETIREMENT
INCOME; BASIS, AMOUNT, AND PAYMENT", SUBSECTION 35.097(D), "BENEFITS
OTHER THAN ON RETIREMENT", PART 35.097(D)(1), "BENEFIT ON
TERMINATION OF SERVICE AND ON DEATH AFTER TERMINATION OF
SERVICE", PARAGRAPHS (A) & (E), TO PROVIDE FOR INTEREST ON CERTAIN
PARTICIPANT CONTKIBUTIONS WITHDRAWN PRIOR TO RETIREMENT;
CREATING A NEW SECTION 35.110, "DEFERRED RETIREMENT OPTION PLAN",
PROVIDING A DROP PLAN FOR CERTAIN ELIGIBLE PARTICIPANTS; PROVIDING
A GENERAL REPEALER CLAUSE, A SAVING CLAUSE, AND AN EFFECTIVE
DATE.
WHEREAS, the City Commission of the City of Dekay Beach desires to enhance certain retireme~
benefits to certain participants of the General Employees' Retirement Plan by changing the norm. I
retirement date, providing for no employee contributions, providing interest on con~butions withdrawn by
participants prior to their normal rmtirement date and by providing for a Deferred Retiremen! Option Plan.
NOW THEREFORE, BE IT ORDAINED BY THE CITY COMMISSION OF TI-IE CITY OF
DELRAY BEACH AS FOLLOWS:
.Section 1. That Chapter 35, 'F-mployee Policies and Benefits", subheading, "Retirement Plan", of
the Code of Ordln,,~ces of the City of Delray Beach is hereby amended by amending Section 35.089,
'Definitions", to read as follows:
Section 35.089 DEFINITIONS_
(O) "Normal retirement date" is the first day of the month coincident with or nex~ following the
date a participant attaln~ the age of 60 and completes ten years of credited service~ or the date on which a
~p._~ant attains thi~ears of credited em~whichever occurs fu'st. A
S '
EXHIBIT "A"
P~ -. .
retirement date· me empJoy otthe city and continue to participate in the plan beyond the normal
· (I) "Retirement" means either termination of Ci6, e.-.-~ ........ ~-.,_ · . ....
receive normal, early or disability, re]ireme-, :---~ . ,.,.a ?,,~,ymcm w~m munemate entitlement to
~~") wig ~e.~:-- ~.~.~.a,~ome. unuer me plan, or en into the Deferred Retir
· c~a~e enuuement to receive norm ~ theE)cf_erred Retirement
Em lo ecsC. al retirement income from the General
(K) "Terminated Panici ant" means a plan participant with t~9,~..,~l~ a_t least five
15) 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 35.095
"Contributions of Participant and City", Subsection 35.095(A), 'Participants contribution account" to read
as follows:
Section 35.095 CONTRIBUTIONS OF PARTICIPANT AND CITY.
(A) Participant's contribution account.
(1) For the purpose of this division "PARTICIPANT'S CONTRIBUTION ACCOUN'V'
will consist of tax deferred participant contributions, l~ffective the fa'st pay period beginning on or after
October 1, 1989, employee contributions will be picked up by the city and shall be treated as employer
contributions for tax purposes. However, for all purposes of determining benefits under
be considered participant contributions, the plan, they will
(2) Each participant will contribute toward the cost of the plan an amount equal to thine
percent (3%) of the first $4,800 of his basic annual compensation, and six percent (6%) of basic annual
compensation in excess of $4,800 until the beginning of the fa-st pay period after September 25, 1984.
Beginning with the fa'st pay period after September 25, 1984, each participant will contribute toward the
cost of the plan an amount equa/to six percent (6%) of basic compensation. Effective as of the first pay
period beginning on or after October I, 1989, participant contributions will be equal to four and one-half
percent (4·5%) of basic compensation on a tax-deferred basis. Be innin with the frrst a efiod after
Se tember ! 1999 artici ants shall not be re uired to contribute to the lan exce t those artici ants
described in ara rah 4 of this Section.
2 ORD. NO. 30-99
(.A.)(3) Anything in the plan to the contrary notwithstanding, the total benefits payable under
the plan to, or with respect to, a participant shall not be less than the benefits that can be provided by the
participant's contributions, and further provided, if a ~ participant~ who is terminated elects to
withdraw participant contributions ~,~_,:_- ;_-, :~; .-._':._':m._~! -~?_'r_"_-._e~t a_~;_, the participant will be entitled
~ :k: :-~,_,.~_. _?f p~!_,:!?~_-.! _~en:~k,~,:!?~_o 'w.':~_-".t '-'-~-:--:~_t, to the return of participant contributions with
i.nterest~ in lieu of all other benefits payable under the plan.' Effective September 1~ 1999~ ifa participant
~ears of credited service under the_Elan a' non-c~le interest rate of five
~ear shall be a lied to the rinci al balance of the ~ant's contribution as accrued
on December 31 ofeachyear. Effective Se tember i 1999 ifa artiei ant has less than ten 10~
credited service under the.p_lan a non-com, p_ounded sim 1E~ interest rate of three~ercent shall be
~alance of the artE_.a.yt_.i_cipant's contribution as accrued on December 31 of each year.
Participant contributions cannot be withdrawn while a participant rema~in the employ of the city or after
the payment of benefits under the plan has commenced.
(4) Applicability to Bargalni,o Unit Employees. Participants who are part of a
~ unit which c~e..~.~ has not ' ~
entered into a collective b~ ~_g~.g. Eg.reement or is~
an_.q~.Eired collective ~eement with the Cit~ shall continue contribu~lan in the same
~anner and amount a~rior to the effective date ofth~s ordinance and shall receive no
~ntrib. uti~.ns u o.r~ te~n from the lan. Should the Cit and ~ affected
~un,ts enter into ano rati~ colle~~t~
required shall ~
to contribute to the~receive interest on monies withdrawn in accordance with
~ from the date of the final execution of the collective ~eement forward and shall
~uo ante rights thereafter.
S_ection 3. That Chapter 35, "Employee Policies and Beneftts", 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 35.097(D), ~Benefits other than on
retirement", Part 35.097(D)(1), 'Benefit on termination of service on death after termination of service",
Paragraph (a), to read as follows:
3 ORD. NO. 30-99
Section 35.097 RETIREMENT INCOME. BASIS AMOUNT AND PAYMENT.
(D) Benefits other ~hn~ on retirement.
(1) Benefit on termination of service and on death after termination of service:
(a) If a participant's city employment is terminated after completion of five (5)
years of credited service but before the normal retirement date, and the termination of employment is for
any reason other than the participant's death, early retirement as described in division (B) of this section, or
disability retirement as described in division (C) of this section, the participant shall, if then living, be
entitled to a deferred monthly retirement income commencing on the normal retirement date. The ~
of the deferred monthly retirement income shall be computed in the same mnrmer as normal retirement
income under division (B)(2) of this section, based upon the terminated participant's vested percentage,
credited service and final monthly compensation at the date of termination of city employment. A
participant who terminates city employment after completion of five (5) years of credited service may
alternatively elect, in lieu of any other plan benefits, to withciraw participant contributions ~
in accordance with Section 35.095_(.~.
.Section 4. 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 35.097(D), "Benefits other than on
retirement", Part 35.097(D)(I), "Benefit on termination of service on death aRer termination of service',
Paragraph (e), to read as follows:
Section 35.097 RETIREMENT INCOMEi BASIS~ AMOUNT~ AND PAYMENT.
(D) Benefits other than on retirement.
(1) Benefit on .te~fion of zervice and on death ~ ~ermination of service:
(e) Except as provided in division (A) of fi'ds section with respect to normal
retirement, division (C) of tlfis section with respect to disability retirement, and division (D) of this section
with respect to death, a participant whose employment is terminated prior to the completion of five (5)
years of credited service shall be entitled only to the return of participant contributions ~ in
.accordance with Section 35.095(A).
ORD. NO. 30-99
.Section 5. That 'Chapter 35, ~Employee Policies and Benefits~, subheading, nRetirement Plan", of
the Code of Ordinances of the City of Delray Beach is hereby amended by creating Section 35.110,
"Deferred Retirement Option Plan", to read as follows:
.Section 35.110 DEFERRED RETIREMENT OPTION PLAN.
~ with the £u'st a_p_~eriod after Se tember 1 1999 an em 1o ee who is eli ible
for normal retirements_as defined in Section 35.0~te in the Deferred Retirement
Otion Plan "DROP" exce t as rovided in Section 35.110__~in accordance with this section. An
~ is considered retired for ension lan oses u on enterin into the DROP lan
ensmn tan oses u on enterin into the DROP lan.
(13) An ~articivate in the Dr'cm -, ....... ,~ * ·
effective fl' n .~~--ff,~' ~".'""~"'~ ,~ must ~e mane In writing and shall become
~~v the Ret:- .... ; 7~ -- -- -- ~
aamlnlstralor~~ u~s,~m ,,,ummmee or r~enslon
.............
vii gl lgltcl uale 1I s eCltled b the em lo ce. - ..........
~ who elects ~ate in the DROP ~ate in such plan for a
~ months.
~ee's credited service and accrued benefit under thee system shall be determined on
the effective date of the em__m.p.~0~yee's election to ~a~tici,,-,- :- o~-- ,',~,', .... ~
,, o,~,~;,:,..~ ~.___~. - ~~ ..... ~. ,., ,,.,-, _~,~ ~ .mc ~l~,~r lan. Ahem loyee shall not accrue
any .....,,,,,~, ucucm unoer me plan alter entering the DROP ~ as~ ~
~lan. After entering_the DROP ~ant shall not be~ble for disabili~
retirement death benefits under the retirement plan.
.(E) A DROP plan account shall be established for each cniplo~'ee who elects to participate in ;l~c.
DRO..~_~.~an in accordance with this section. Duri~riod of the e~atinn in the DROP
~e's normal retirement benefit shall be_paid into the em l_~.~e's DROP plan account. The
e~mplo~ee's DROP_plan account shall be invested by the Retirement Committee and credited with inter'st
~ ~.le.~ss ~ rate or return on the Ret,rement P '
~ smmisn a se ~atp..~.!!~J_an for DROP accounts that would be mvest~ed by the retiree and for
~cial rules ma ~i_~p.~lied consistent with Internal Revenu'u-~ervic~
(~F) At the conclusion of the retiree's participation in the DROP plan~ and as a condition of
~in such Plan. a0.2. the retiree, wl~'l..I continue his.retirement and t_erminate.Cit em 1o ment. The
retiree will thereafter receive a normal retirement benefit at the same rate as~ealculated but the
monthl amount will be aid to the retiree and not de_p..osited in the DROP I~lan account. The retiree's
DR_D~RQ.P_P_P_P_~Ian account will thereafter be distributed to the retiree in a cash lum s.p..!_~a_unless the retiree elects
an a~lternative distribution as described below:
5 ORD. NO. 30-99
. ~n a roximatel · ual ~uar~erlv or annual install
~by th~ -- ~ .... ,-,;~,a ov_.y~er a enoo
~x ct~c of ~e retiree o~e Joint
installments nave 0 . . . ay;ut; ~iles oeIore ail
~ een aid the remaimn balance
in. mediate ~an account ~ eu venenci{~_~
em_,_ __A on?r?bie . x:d a able in such fo m
gm .w?e ma elect. Elections shall be m writino an~'~ls I~'"Zd~ ~ ~y,,i~ ,:m_?_u_c~_ l_oml, as the
as the ~ef~r~rns. nl'~ -~.~__ _mau v~s. iml ~ mane at suc/l time or m such rrl:~nn~,r
~_z_~ ~g,lremem t.ommlttee shall d~.. '_~ .'~,~.~
~ne, If tbe annuit *onn smectea IS not a~
?ivor m__ as .the be ci me
ap....~t~le Io ~e retiree and thereafter to the retiree s benefic~~eet to the incidental
death benefit rule as described in Section 401 a_(.~(~of the Internal Revenue Code and
((3) Notwithstandin the rovisions of ara rah F if a retiree dies before distribution of the
retir___ee's DROP ~.vlan account commences.~_the account balance shall be paid to the retiree's des~
~tional form as the benefici~elect. N°twithstand'm~Fu_.~.~P. fovisions of
~if the retirement '
committee ad~lan in accordance with 35.110(E), distribution
in accordance with rules established bythe retirement committee under such se~
~ as otherwise provided in this Section, distribution of an em__~.~yee's DROP ~
account shall be__q.g~_as soon as administrativel racticable followin the em 1o ee's termination of
~ment. A r~ in accordance with such procedures as the Retirement Committee may
~ ,elec! to .d~efer di.strib, ution_ Of ~ account until the first da of an mon ' '
~ me termination of the retiree's Ci~ em,q .... ~,, a or. ~.th. coin. ci.d.e_nt
~ ~,,~ I~J &JJ~:ll[' rOVlaeu however OlStrlDutlon shall be
made before the distribution date elected ~to the extent necessary to com~
lnte.__mal Revenue Code and regulations thereunder. An amounts in a retiree's DROP lan account shall
continue to be invested by the Retirement Committee and shall be credited with the net investment return
.o_n,..~e_,_Re, tirern, en.t Fund. until the balance of the DROP I~l~aceount ' fully a;-,-',---. - ..... .-
~ ~ ~ I0 Ine retiree or me
~°.~.ver~o~tablishes a Seal,ian as set ~ '---
~ the earmn~swill be invested and dist~buted-urs .. ~.~e .a~me ~ l.an as set forth in
a_~ uan~ Io tl~e rules oI tl~e se arate lan
l~_ In no event shall ~e ~rovisions of this Section ~ lo allow the distribution of a
~lan aceounl to be~in later than A_p.~ l followin&_the later of the calendar
retiree ~erminates Client or attains~ and one-half 70~..~.: ~
~ Notwiths~and~rovisions of this $~all dis~butions from retiree DROP
plan accounts shall conform to a~rovisions of the internal Revenue Code an~
thereunder and_d__.~.p.rovided under a se arate lan if ado ted b the retirement committee.
6 ORD. NO. 30-99
· . ~ .Notwithsiandin an l~rovision of thio e..,.o: ..... ,_ . .
~~u~-~-~'~ ~ ~
· esec at the time and in a manner rescrib
R~t C~,, ,,orii._ _,- .............. ed b the
~le rollover distn'bution aid
~ b the retiree or ~ in a direct rollover.
the
,.,,, ,o,, utc ~'IX. VF 18~ ~llotme ' · · ' '
~~,_, ~_~.~__.v..l.,r, vi- .lan ~lc tment will be distributed~-~suant to
...... · lis IVllOWm (lellnlElo ..... -
......... · ,,~ ,v,uwm oenmuons a I to the terms used tn thi~
~" mc. aris_an distn'bution o.f a.!l or an orion of the
balance to the credit, of. the distrib~er.L_theDR.OP.__~_l~, exce~t~-~at an el'
distribution does not include any distribution that is ~-'~at,., ... ,~__ ..a~_,,eli ible. rol.lov_er
ntl__than annuall made for life ex ectanc of ' ' .
or_.c.~e 'oint lives ~~f ~ee ~,,,c..~..,~ ~s_.tribu!~
~or -- ' ,,,,~,,,~ *la me u~stnoutee s oesi n~
for a ~eriod of renal0) years or mo~tribution to the extent such
distribution is required under Section 401 a_(i~of the Internal Revenue Cod. e, and the
any distribution that is not includible in gross income.
~ible retireme~nt l~lan" means an individual retirement account described in
~ of the Internal Revenue Code, an individual retirement ann~ribed in Section
~ the Internal Revenue Cod~lan described in Section 403(a) of the Internal
Reve___.nue Cod~ualified trust described in Section 401~ of the Internal Revenue
ac_.~ts the distr~ible rollover distribution. However, in the case of an eligible rollover
distribution to the surviv~ible retirement.~lan is an individual retirement account
or_O_individual retirement annuity.
(3) stnoute~ee or former~
~ee's surviving~pouse is a distributee with In additio~
regard to the interest ofthe~
~s a l~avment b- o'-- "'"'-'-' , ........
............ -,.-, ,, mc z~xvr lan to the eli lole retirement plan
~ the distributee. The direct rollover ma be accom lished b an reasonable means
~ the Retirement Comn~ttee.
L Partici ants who are art of a bar ainin unit wh/ch currency has not entered into a
collective bar ainin a reement or i~ under an ex ired collective bar ainin a reement with the
City shall not be allowed to--pate in the DROP nlan
units enter int~, -,,~ --o:~ ....,,--.-' ...... - ....... Should the City and the affec~
................. ,,,~, a conecuve~ement the affected ~p.._~.!pants shall be allowed to
enter into the D~lan as of the date the collective b~eement is executed.
Section 6. That all ordinances or parts of ordinances in conflict herewith be, and the same
are hereby repealed.
ORD. NO. 30-99
_Section 7. 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 affect the validity of the remainder hereof as a whole or part thereof other than the part
declared to be invalid.
Section 8. That this ordinance shall become effective immediately upon its passage on
second and final '
reading, except as to general employee plan participants who are covered under an expired
collective bargaining agreement; or belong to a bargaining unit that has no1 executed a collective bargaining
agreement. This ordinance shall become effective as to the excluded employees immediately upon the date
of ratification and execution ora collective bargaining agreement applicable to such employees.
~'~ PASSED AND ADOPTED in regular session on second and final
day of~ff,~, 1999. ' reading on this the ../~'~
ATTEST:
First Reading ~~ ,~/~ ~
Second Reading ~/~/~'~
8 ORD. NO. 30-99
DECLARATION OF TRUST
OF
ICMA I~: I IREMENT TRUST
ART1CLE I. NAME AND DEFINITIONS
Section 1.1 Name: 'The name of the trust created hereby is the ICMA Retirement Trust.
Section 1.2 .Definitions: Whareve.r they are used herein, the following terms shall have the
follow, ng respective meanings:
Iai
By-laws. The by-laws referred to in Section 4.1 hereof, as amended from time
to time:
lb)
....... I:mploy~.r mr the purpose of provid,ng rm~rement income
aha omer oeTerred bener~s to ~s employees in accordance with the provision
of section 457 of the Internal Revenue Code.
Employees. Those employees who particil~.te in Qualified Plans and/or
Compensation Plans.
Id) Employer Trust. A trust created pursuant to an agreement be,.tween RC and a
Public. Employer. o.r an agreement between R.C and a Pubhc Employer for
~ndvme~.~r:nt~r~i~.~_t~Srh~h~k~sft~ a trust: in either case for t~. putpo~, of
w'~ ...... g . s s~t aside by such Employer rn conneetmn
nn ~s uemrreo L.ompensat~on agreements with its .employees or in
connection wi~h its Qualified Plan.
Investment Contract. A non-negotiable contract entered into by' the Retirement
Trust with a financial institution that provides for a fixed fate of return on
investment.
If) ICMA. The International CitylCountv Management Association.
ICMA Trustees. Those Trustees elected by the Public EnLoloyers in accordance
w~th the provisions of Section 3.11a) hereof, who are also members or former
members of the Executive Board of ICMA.
ih)
Iii
Ik!
(11
(m!
(nl
(o)
(p)
iq)
Ir)
(si
RC Trustees. Those Trustees elected by the Public Employers who, in
accordance wkh the provisions of Section 3.1 ia) hereof, are also members or
former members of the Board af Directors of RC.
Internal Revenue Code..The Internal Revenue Code of 1986, = amended.
Investment Adviser. The Investment Adviser that enters into a contract with
the Retirement Trust to provide advice with respect to investment of the Trust
Property.
Portfolios. The separate commingled pools of investment establi.s.hed by the
Investment Adviser to the Retirement Trust, under the superv~s,on of the
Trustees, for the purPose of providing investments for the Trust Property.
Public Employee Trustees. Those Trustees elected by the Public Employers
who, in accordance with the provision of Section 3.1 (a) hereof, are fuR-time
employees of Public Employers.
Public Employer Trustees. Public Employers who serve as trustees of the
Oualified Plans or Deferred Cnmpensation Plans.
Public Employer. A unit of state or local government, or any agency or
instrumentality thereof, that has adopted a Deferred Compensation Plan or e
Qualified Plan and has executed this Declaration of Trust.
Qualified Plan. A plan that is sponsored by · Public Employer for the purpose
of providing retirement income to Its employees end that satis~'~s the
qualification requiremen~ of Section 401 of the internal Revenue Code.
Public Employer Trust. A trust that is established by a Public Employer in
connection with its Qualified Plan and that satisfies the requirements of Section
501 of the Internal Revenue Code, or a trust established bv-a Publ~_
in connection with ~ Deferred Compensation I~lan ang
requirement~ of Section 457ib! of the Internal Revenue Code.
RC. The International City Management Association Retirement Corporation.
Retirement Trust. The Trust created by this Declaration of Trust.
Trust Property. The amounts held in the Retirement Trust as provided in
Section 2.3. The Trust Property shall include any in~:ome resulting from the
investment to the amounts so held.
Trustees. The Public Employee Trustees, ICMA Trustees and RC Trustees
elected by ~he Public Employers to serve as members of the Board of Trustees
of the Retirement Trust.
ARTICLE II. CREATION AND PURPOSE OF THE TRUST; OWNERSHIP OF TRUST PROPI:~i ~'
· Section 2.1 Creation: (al The Retirement 'Trust was created by the execution of this
Declaration of Trust by the initial Trustees and Public Employers and is established
with respect to each participating Public Employer by adoption of this Declaration of
Trust.
lb) The Retirement Trust is hereby expressly made a part of the approprlam Ouard"md
Plan or Deferred Compensation Plan of each Public Employer that executes or has
executed this Declaration of Trust.
Sec~on 2.2 Purpose. and ParlJcipation: (al The purpose of l~e .R~..'rernent Trust is to pro~ide
for the comm,nglad investment of funds held by the Pubhc Employers in connection
with their Deferred Compensation and Qualified Plans. The Trust Prol~.rty shaJI be
iNveSted in the Portfolios, in Invest,~ent Contracts. and in other mveslnten~
recommended by the Investment Adviser under the supervision of the Board of
TrusTees. No part of the Trust Property will be invested in securities issued by Public
Employers.
(bi Participation in the Retirement Trust is limited to Ii) pension and pro~t-shafillg
trusts which are maintained by Public Employers and that are exempt under s~:tion
501 (a) of the Internal Revenue Code because the Qualified Plans related thereto
qualify under section 401(a) of the Internal Revenue Code and (ii) deferred
compensation plans maintained by Public Employers under Section 457 of the Internal
Revenue Code (and trusts maintained by such Public Employers in connection with
Such 457 plans).
Sec'don 2.3 Ownership of Trust Property: (a} The Trustees shall have legal t~tle to the Trust
Property. The Trust Property shall be held as follows:
(il for the Public Employer Trustees for the exclusive benefit of the Employees:
or
Iii) in the case of a Deferred Compensation Plan maintained by a Public
Employer that has not established a Public Employer Trust for the plan, for the
Public Employer as beneficial owner Df the plan's assets.
lb) The portion of the corpus and income of the Retirement Trust that equitably
belongs to any Public Employer Trust may not be used for or diverted to any purpose
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other than for the exclusive benef'~ of the Employees {or their beneficiaries) who :ire
entitled to benefits under such Public Employer Trust.
lc) No employer's. Public Employer Trust may assign any par~ of its equiw or interest
in the Retirement Trust, and any puq)oned assignment of such equity or interest shall
be void.
AH i ICLE III. TRUSTEES
Section 3.1 Number and Qualification of Trustees: (alThe Board of Trustees shall consist of
nine Trustees. l~we of the Trustees shall be ful!-time employees .of a Public Employer
(the Public Employee Trustees) who are author,~ed by such Publ,c Employer to serve
as Trustee. The remaining four Trustees shall consist of two persons .who. ar ~ time
of election to the Board of Trustees, are members or former members of the
Executive Board of ICMA, and two persons who. at the time of election, are members
or former members of the Board of Directors of RC. One of the ICMA Trustees end
one of the RC Trustees shall, at the time of election, be full-time employees of PubFu=
Employers.
[b) No person may serve as a Trustee for more than two terms in any ten-year period.
Section 3.2 Election and Term: (al Except for the Trustees appointed to fill vacancies
pursuant to Section 3.5 hereof, the Trustees shall be elected by a vote of · majority
of the voting Public Employers in accordance with the procedures set forth irt the
By-Laws.
(b) At the first election of Trustees, three Trustees shall be elected for e term of three
years, three Trustees shall be elected for a term of two years and three Trustees shall
be elected for a term of one year. At each subsequent election, three Trustees shall
be elected, each to serve for a term of three years and until his or her successor is
elected and qualified.
Section 3.3 Nominations: The Trustees who are full-time employees of Public Employers
shell serve as U)e Nominating Comm~ee for the Public Employee Trustees. The
Nominating Committee shall choose candidates for Public Employee Trustee in
accordanc~e with the procedures set forth in the By-Laws,
Section 3.4 Resignation and Removal: (al Any Trustee may resign as Trustee (without need
for prior or subsequent accounting) by an ir=u-merit in writing signed by the Trustee
and delivered to th~ other Trustees and such resignation shall be effective upon such
delivery, or at a later date according to the terms of the instrument. Any of the
Trustees may be removed for cause, by a vote of a majority of the Public Employers.'
(b) Each Public Employee Trustee shall resign his or her position as Trustee within
sixty days of the date on which he or she ceases to be a full-time employee of a
Public Employer.
Section 3.5 Vacancies: The term of office of a Trustee shall term;note and a vacancy shall
occur in the event of his or her deai~t, resignation, remnval, adjudicated incompetenc~
or other incapacity to perform the duties of the office of e Trustee. In the case of a
vacancy, the remaining Trustees shall appoint such person as they in their discretion
shall see fit (subject to the limitations set forth in this Section), to serve for the
unexpired portion of the term of the Trustee who has resigned or otherwise ceased
to be a Trustee. The appointment shall be made by a ~'itten instrument sigrmd by a
majority of the Trustees. The person appointed must be the same type of Trustee
{i.e., Public Employee Trustee, ICMA Trustee or RC Trustee) as the person who has
ceased to be a Trustse. An appointment of e Trustee may be made in anticipation of
a vacancy to occur at a later date by reason of retirement or resignation, provided
that such appointment shall not become effective prior to such retirement or
resignation. Whenever a vacancy shall occur, until such vacancy is filled as provided
in this Section 3.5, the Trustees in office, regardless of their number, shall have au
the powers granted to the Trustees and shall discharge all the duties imposed upon
~he Trustees by this Declaration. A written instrument certifying the existence of a
vacancy signed by a majority of the Trustees shall be conclusive evidence of the
existence of such vacancy.
Section 3.6 Trustees Serve in Representative Capac;W: By executing this Dnclaration, each
Public Employer agrees ~he! the' Public Employee Trustees elected by the Pu'Mic
Employers are authorized to act as agems and represent'at;v-- of the Public Em~doyers
collectively.
ARTICLE IV. POWERS OF TRU~i-t:ES
Section 4.1 General Powers: The Trustees shall have the power to conduct the business of
the Trust and to carry on its operations. Such power shell include, but shall .nOt be
limited to, the power to:
(a}
receive the Trust Property fi'om the Public Employers, Public Employer Trustees
or the trustee or administrator under any Employer Trust;
(b)
enter into a contract with an Investment Adviser providing, among other
things, for the establishment and operation of the Portfolios, selection of the
Investment Contracts in which the Trust Property may be invested, selection
of the other investments for the Trust Property and the payment of reasonable
fees to the Investment Adviser and to any sub-investment adviser retained by
the Investment Adviser;
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(c)
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review annually the performance of the Investment Adviser and approve
annually the contract with such Investment Adviser;
invest and reinvest the Trust Property in the Portfolios. the Investment
Contracts and in any other investment recommended by the Inve~-tment
Adviser. but not including secur~ias issued by Public Employers. provided that
If a Public Employer has directed that its monies be invested in one or more
specified Portfolios or in an Investment Contract. the Trustees of the
Retirement Trust shall invest such monies in accordance with such directions;
keep such portion of the Trust Property in cash or cash balances as the
Trustees, from time to time. may deem to be in the best interest of the
Retirement Trust created hereby wfthout liability for interest thereon;
accept and retain for such time as they may deem advisable any securities or
other property received ct acquired by them as Trustees hereunder, wh,,U,er
or not such securities or other property would normally be purchased as
investment hereunder;
cause any secur'r~les or other property held es parr of the Trust Property to be
registered in the name of the Retirement Trust or in the name of a nominee,
and to hold any investments in bearer form, but the books and records of the
Trustees shall at all times show that all such investments ~re a part of the
Trust Property;
make, execute, acknowledge, and deliver any and all documents Of
and conveyance and any and all other instruments that may be necessary or
appropriate to carry out the powers herein granted;
vote upon any stock, bonds, or other securities; give general or special proxies
or powers of attorney w~th or without power of substitution; mxerclse any
conversion privileges, subscription rights, or other options, and make any
payments iflcidenlal thereto; oppose, or consent to, or otherwisa partlcip,~T.u in,
corporate reorganizations or to other changes affecting corporate sectJfilies,
and delegate discretionary powers and pay any assessments or charges in
connection therewith; and generally exercise any of the powers of an owner
with respect to stocks, bonds, securities or other property held as part of the
Trust Property;
enter into contracts or arrangements for goods or services required in
connection with the operation of the Retirement Trust, including, but not
limited to, contracts with custodians and contracts for the provision of
administrative services;
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borrow or raise money for the purposes of the Retirement Trust in such
amount, and upon such terms and conditions, as the Trustees shall deem
advisable, provided that the aggregate amount of such borrowings shall not
exceed 30% of the value of the Trust Property. No'person lending money to
the Trustees shall be bound to see the application of the money lent or to
inquire into its validity, expediency' or propriety or any such borrowing;
incur reasonable expenses as required for the operation of the Retirement Trust
and deduct such expenses from of the Trust Property;
pay expenses properly allocable to the Trust Property incurred in connection
with the Deferred Compensation Plans, Qualified Plans, or the Employer Trusts
and deduct such expenses from that portion of the Trust Property ~o which
such expenses are properly allocable;
pay out of the Trust Property all real and personal property taxes, income tams,
and uther Taxes cf any and all kinds which, in the opinion of the Trustees, are
properly levied, or assessed under existing or future laws upon, or in respe~
of, the Trust Property and allocate any such ~axes to the appropriate accounts;
adopt, amend and repeal the By-laws, provided that such By-laws are at all
times consistent with the terms of this Declaration of Trust4
employ persons to make available interests in the Retirement Trust to
employers eligible to maintain a Deferred Compensation Plan under Section 457
or a Qualified Plan under Section 401 of the Internal Revenue Code;
issue the Annual Report of the Retirement Trust. and the disclosure documents
and other literature used by the Retirement Trust;
in addition to conducting the investment program authorized in Section 4.1
make loans, including the purchase of debt obligations, provided th,~ all such
loans shall bear interest at the current market rate;
contract for, and delegate any powers granted hereunder to, such cfm=ers,
agents, employees, auditors and attorneys as the Trustees may select,
provided that the Trustees may not delegate the powers set fOrth In paragraphs
(b), (c) and (o) of this Section 4.1 and may not delegate any powers if such
delegation would violate their fiduciary duties;
provide for the indemnification of the Officers and Trustees of the Retirement
Trust and purchase fiduciary insurance;
maintain books and records, including separate' accounts for each Public
Employer, Public Employer Trustee or Employer Trust and such additional
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separate accounts as are required under, and consistent with. the Deferred
Compensation or Qualified Plan of each Public Employer; and
(vi do all such acts, take all such proceedings, and e~ercise all such rights and
privileges, although not specifically mentioned herein, as the Trustees may
deem necessary or appropriate to administer the Trust Property and to carry
out the purposes of the Retirement Trust.
Section 4.2 Dism-ou~on of Trust Property: Distributions of the Trust property shall be made
to, or on behalf of, the Public Employer or Public Employer Trustee, in accordance
with the terms of the Deferred. Compensation Plans. Qualif'aed Plans or Employer
Trusts. The Trustees of the Retirement Trust shall be fully protected in making
payments in accordance wfth the direcfJons of the Public Employers, Public Employer
Trustees or trustees er administrators Df any Employer Trust w~thout ascertaining
whether such payments are in compliance vv~th the provisio~ of the applicable
Deferred Compensation or Qualified Plan or Employer Trust.
Section 4.3 Execution of Instruments: The Trustees may unanimously designate any one er
more of the Trustees to execute any instrument or document on behalf of all,
ihcluding but not limited to the signing or endorsement of any check and the signing
of any applications, insurance and other contracts, and the action of such designated
Trustee or Trustees shall have the same force and effect as if taken by ,=11 the
Trustees.
ARTICLE V. DUTY OF CARE AND UABIUTY OF TRUSTEES
Section 5.1 Duty of Care: In exercising the powers hereinbefore granted to the Trustees, the
Trustees shall perform all acts within their authority for the exclusive purpose of
providing benet-gs for the Public Emplovers in connection w~th non-trusteed Deferred
Compensation Plans and for the Public Employer Trustees. and shall perform Such
acts wfth the care. skill, prudence and diligence in the circumstances then prev~lllng
that a prudent person acting in a like capacity and familiar with such matters would
use in the conduct of an enterprise of a lika character and with like aims.
Section 5.2 Liability: The Trustees shall not be liable for any mistake of judgment or ether
action taken in good faith, and for any action taken or omitted in reliance in good
faith upon the books of account or other records of the Retirement lrust, upon the
opinion of counsel, or upon reports made to the Retirement Trust by any of its
officers, employees or agents or by the Investment Adviser or any sub-inve~t.~nt
adviser, accountant, appraiser or other expert or consultant selected with reasonable
care by the Trustees, officers or employees of the Retirement Trust. The Trustees
shall also not be liable for any loss sustained by the Trust Property by reason of any
inve:,h,,ent mede in good faith and in accordance with the standard of care set forth
in Section 5.1.
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Section S.3 Bond: No Trustee shell be obligated to give any bond or OTher security for the
performance of any of his or her duties hereunder.
ARTICLE VI. ANNUAL REPORT TO SHAREHOLDERS
The Trustees shall annually submit to the Public Employers and Public Employer
Trustees a written report of the transactions of the Retirement Trust, including financial
statements which shall be certif'md by independent public accountants chosen by the
Trustees.
ARTICLE VII. DURATION OR AMENDMENT OF RETIREMENT TRU~r
Section 7.1 Withdrawal: A Public Employer or Public Employer Trust~e may, at any time,
withdraw from this Retirement Trust by delivering to the Board of Trustees a wilton
statement of wfthdrawal. In such statement, the Public Employer or Public Employer
Trustee shall acknowledge that the Trust Property allocable to the Public Employer
is derived from compensation deferred by employees of such Public Employer
pursuant to its Deferred Compensation Plan or from contrlbutJop, s to the accounts of
Employees pursuant to a Qualifmd Plan, and shall deslg~ate the finanrdal institution
~b which such properly shall be transferred by the Trustees of the Retirement Test
or by the trustee or administrator under an Employer Trust.
Section 7.2 Duration: The Retirement Trust shall continue until tewninated by the vote Of a
majority of the Public Employers, each casting one vOTe. Upon termination, all of the
Trust Property shall be paid out to the Public Employers, Public Employer Trustees or
the trustees or administrators of the Employer Trusts, as appropriate. ·
Section 7.3 Amendment: The Retirement Trust may be amended by the vote of a majority
of the Public Employers, each casting one vote.
Sect]on 7.4 Procedure: A resolution to terminate or amend the Retirement Trust or to
remove a Trustee shall be submitted to a vote of the Public Employers if: (i} a majority
of the Trustees so direct, or; (ii) a petition requesting a vote signed by not less than
25 percent of the Public Employers, is submitted to the Trustees.
ARTICLE VIII. MISCELLANEOUS
Section 8.1 Governing Law** Except as otherwise required by at,~te ct local law, this
Declaration of Trust and the Retirement Trust hereby created shall be cor~bded and
reoulated by the laws of the District of Columbia.
Section 8.2 Counterparts: This Declaration may be executed by the Public Employers and
Trustees in two or more counterparts, each of which shall be deemed an original but
all of which together shall constitute one and the same instrument.
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rlTY JIF I)ELRflY BEACH
CITY ATTORNEY'S OFFICE
200 NW 1st AVENUE · DELRAY BEACH, FLORIDA 33444
TELEPHONE 561/243-7090 · FACSIMILE 561/278-4755
~lI.Amedca Ci~
1993
DATE:
August 13, 1999
MEMORANDUM
Writer's Direct Line: 561/243-7091
TO:
City Commission
David Harden, City Manager
FROM: Susan A. Ruby, City Attorney
SUBJECT:
Resolution No. 52-99 to Administer ICMA DROP Plan for Eligible
General Employees
The ICMA Retirement Corporation requires the adoption of this Resolution to administer
the DROP Plan for eligible General Employees.
Please place this resolution on the August 17, 1999 agenda after Ordinance 30-99 for
City Commission approval. Appendix A to this resolution is Ordinance 30-99.
Attachment
cc: Joe Safford, Finance Director