95-94 ORDINANCE NO. 95-94
AN ORDINANCE OF THE CITY COMMISSION OF THE CITY OF
DELRAY BEACH, FLORIDA, AMENDING CHAPTER 33, "POLICE
AND FIRE DEPARTMENTS", SUBHEADING "PENSIONS", OF THE
CODE OF ORDINANCES OF THE CITY OF DELRAY BEACH,
FLORIDA, BY CREATING A NEW SECTION 33.70, "DIRECT
TRANSFERS OF ELIGIBLE ROLLOVER CONTRIBUTIONS";
PROVIDING A SAVINGS CLAUSE; AND PROVIDING AN
EFFECTIVE DATE.
WHEREAS, the U.S. Unemployment Compensation Amendments Act
of 1992 requires all qualified retirement plans, including
governmental plans, to adopt specific provisions regarding the
transfer of eligible rollover contributions effective January 1, 1993;
WHEREAS, the City of Delray Beach desires to maintain the
qualified status of its employee retirement plans; and
WHEREAS, the plan actuary has determined that this amendment
will have no actuarial impact on the plan.
NOW, THEREFORE, BE IT ORDAINED BY THE CITY COMMISSION OF THE
CITY OF DELRAY BEACH, FLORIDA, AS FOLLOWS:
~ That a new Section 33.70, "Direct Transfers Of
Eligible Rollover Contributions", is created to read as follows:
Sec. 33.70 Direct Transfers of Eligible Rollover Contributions.
(A) 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 distrtbutee' 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
dis~ributee in a direct rollover,
Definitions,
{1) 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 4oint lives (or 4oint life expectancies) of the
distributee and the distributee's designated beneficiary, or for a
'specified period of ten (10) years or more: a~y distribution to the
extent such distribution is reauired under section 401(a)(9) of the
Internal Revenue Code: and the portion of any distribution that is not
includable in gross income.
(2} 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 s~%ion 405(b) of ~he Internal Revenue Code. an annuity
plan described in section 403(a) of the Internal Revenue Code. or a
qualified trust described in section 401(a) of the Internal Revenue
Code. that accepts the distributee's eliqible rollover distribution.
HoWever. in the case of an eligible rollover distribution of the
surviving spouse, an eliaible retirement plan is an individual
retirement account or individual retirement annuity.
(3) Distributee. A distributee includes an employee
or former employee. In addition, the employee's or former employee's
survivinq spouse is a distributee with regard to the interest of the
(4) Direct rollover. A direct rollover is a payment
by the plan to the eligible retirement plan specified by the
distributee.
~ 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.
~ That this ordinance shall take effect on January
1, 1993.
PASSED AND ADOPTED in regular session on second and final
reading on this the 13th day of December , 1994.
ATTEST:
~City Cl&rk '
First Reading December 6, 1994
Second Reading December 13, 1994
- 2 - Ord. No. 95-94
I:ITY I)F DEI. RIIY BEACH
CITY ATTORNEY'S OFFICE ~°° ~'~TM^~' ~'~ "~^~"' '~°"~ ~""
FACSIMILE 407/278-4755 Writer' s Direct Line
p~tg~ e~A~ (407) 243-7091
lfl.~ca C~ MEMO~ND~
]'~'~DATE:'''I' December 2, 1994
1993 TO: City Co~ission
FROM: Susan A. Ruby, City Attorney
SUBJECT: Ordinance No. 95-94 - Police and Fire Pension Plan
Modification
The police and fire pension plan is modified to cover the IRS
Code requirement encompassing the rollover and 20% withholding
rules from the Unemployment Compensation Act which added
Section 401(a)(31) to the IRS Code.
This amendment does not specifically mention the benefits
limitations of Section 415 or the Distribution Rules of Section
401(a)(9) of the IRS Code, because the pension ordinance
encompasses these sections by incorporating relevant sections
of the IRS Code.
Attachment
cc: David Harden, City Manager
Joseph Safford, Director of Finance
SUM~I~,Y OF PROPOSED.A~ENDM~...NTTQ
POLICE/FIRE PENSION
Sec. 33-70 (D~rec~ Transfers of Eligible Rollover
Distributions) [New]--provides for direct rollover of pension plan
distributions into another eligible retirement plan, in compliance
with Unemployment Compensation Amendments Act of ]992. Basically,
this avoids the 20% withholding tax on pension plan distributions,
and permits a vested member to roll his city pension refund into
an IRA or other qualified pension plan upon leaving the city's
employ prior to retirement. As required by federal law, this
amendment is retroactive to January ], ]993. There is no actuarial
cost associated with this change.