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HomeMy WebLinkAbout2006-3504 Ordinance - - ORDINANCE NO. 2006-3504 AN ORDINANCE OF THE MAYOR AND CITY COMMISSION OF THE CITY OF MIAMI BEACH, FLORIDA, MERGING THE RETIREMENT SYSTEM FOR GENERAL EMPLOYEES OF THE CITY OF MIAMI BEACH WITH THE RETIREMENT SYSTEM FOR UNCLASSIFIED EMPLOYEES OF THE CITY OF MIAMI BEACH, THEREBY CREATING THE MIAMI BEACH EMPLOYEES' RETIREMENT PLAN; IMPLEMENTING PROVISIONS OF THE 2003-2006 COLLECTIVE BARGAINING AGREEMENT BETWEEN THE CITY AND THE COMMUNICATIONS WORKERS OF AMERICA; AMENDING PROVISIONS OF THE RETIREMENT PLAN APPLICABLE TO NON-BARGAINING UNIT AND UNCLASSIFIED EMPLOYEES; THE CHANGES WILL LATER APPLY TO MEMBERS OF THE AMERICAN FEDERATION OF COUNTY STATE AND MUNICIPAL EMPLOYEES (AFSCME) AND GOVERNMENT SUPERVISORS ASSOCIATION (GSA) BARGAINING UNITS SUBJECT TO THE COLLECTIVE BARGAINING PROCESS AND UPON RATIFICATION OF AN AGREEMENT BY THOSE UNITS; PROVIDING FOR SEVERABILITY; REPEALING ALL ORDINANCES IN CONFLICT THEREWITH; AND PROVIDING AN EFFECTIVE DATE. BE IT ORDAINED BY THE CITY COMMISSION OF THE CITY OF MIAMI BEACH, FLORIDA: ARTICLE 1. Creation and Purpose of the Retirement Plan 1.01 A retirement system is hereby created under and by authority of Chapter 18691, Laws of Florida, Acts of 1937, as amended, by merging the "RETIREMENT SYSTEM FOR GENERAL EMPLOYEES OF THE CITY OF MIAMI BEACH" created by Ordinance 1901, as amended (hereinafter referred to as the "Classified System"), with the "RETIREMENT SYSTEM FOR UNCLASSIFIED EMPLOYEES AND ELECTED OFFICIALS OF THE CITY OF MIAMI BEACH" created by Ordinance 88-2603, as amended (hereinafter referred to as the "Unclassified System"), to form the "MIAMI BEACH EMPLOYEES' RETIREMENT PLAN," which shall be hereinafter referred to as the "Plan" or the "Retirement Plan." Any references to the Classified System or Unclassified System in any other provision of the City Charter, Code of Ordinances, ordinances or resolutions shall be construed to apply to this Plan in the same manner as applied to the Classified System or Unclassified System. 1.02 The purpose of the Retirement Plan is to provide retirement and other related benefits for eligible employees and elected officials of the City and their beneficiaries or dependents. -1- - -- ARTICLE 2. Definitions For purpose of the Retirement Plan, certain words and phrases shall have the meanings ascribed to them in this Article except when the context otherwise requires. The masculine pronoun, wherever used, shall include the feminine. 2.01 "Accumulated Employee Contributions" means the required contributions paid by any Member as provided in Section 6.02 or credited to the Member pursuant to Section 6.01 (b), together with any interest allowed thereon under this Plan or previous City retirement system, until such time as the Employee's service with the City is terminated at the rate, compounded annually, as determined by the Board from time to time. 2.02 "Actuarial Equivalent" means equivalent when computed at regular interest on the basis of the mortality tables last adopted by the Board of Trustees. 2.03 "Beneficiary" means, the surviving person or persons designated as such by a Member or Retirant in the last written designation on file with the Board in accordance with Section 5.08 (g); in the absence of such survivor or such designation, it means the estate of the deceased Member or Retirant, as the case may be. 2.04 "Board of Trustees" or "Board" means the managing board of the Plan as provided for in Article 7. 2.05 "City" or "Employer" means the City of Miami Beach, Florida. 2.06 "City Commission" or "Commission" means the City Commission of the City of Miami Beach, Florida. 2.07 "Classified Employee" means an Employee who is employed in a classified position under the City of Miami Beach Civil Service Act. 2.08 "Creditable Service" means service credited to a Member under the Plan as provided in Article 4. 2.09 "Defined Contribution Retirement System" means a plan established by the City pursuant to Ordinance 92-2813. 2.10 "Domestic Partner" means a person with whom a member has entered into a domestic partnership as defined in Section 62-126 of the City Code, and registered and documented according to the requirements of Section 62-127 of the City Code. 2.11 "Earnings" means base pay, including longevity pay, for personal services rendered as an Employee, but excluding any payment of overtime, shift differential or extra -2- - compensation allowances such as uniform allowances. Notwithstanding the foregoing, in the case of any Member who is in a classification within the CWA bargaining unit who entered service with the City prior to February 21, 1994 as a Classified Employee, and who was continuously a member of the Classified System from that date until the effective date of this Ordinance, "Earnings" shall include overtime pay up to a maximum of ten percent (10%) above the Member's highest pensionable earnings each year. Earnings in excess of the limitations set forth in Section 401 (a)(17) of the Internal Revenue Code, and regulations promulgated thereunder, shall be disregarded, and no member contributions shall be required on any such excess. The definition of Earnings in the preceding sentence shall apply to Employees in classifications within the AFSCME bargaining unit who entered the service of the City prior to April 30, 1993 and to employees in classifications within the GSA bargaining unit who entered the service of the City prior to August 1, 1993, and who were Members of the Classified Plan continuously from that date until the effective date of this Ordinance, upon the ratification of a collective bargaining agreement that contains such definition. 2.12 "Elected Officials" means the Mayor, and the members of the City Commission of the City of Miami Beach. 2.13 "Employee" means any person employed by the City on a regular basis who is receiving compensation from the City for personal services, exclusive of the following groups and classifications: (a) Persons whose services are compensated on a contractual basis. (b) Persons employed on a provisional, original probationary or other temporary basis. (c) Members of boards or commissions, officers, or employees receiving no salary or a nominal salary on a fee basis. (d) Members of the City Pension Fund for Firemen and Policemen or the City Supplemental Pension Fund for Firemen and Policemen in the City of Miami Beach. (e) Persons whose regular employment with the City is for less than thirty (30) hours per week. Provided, however, all persons who were on the membership rolls of the Classified System as of August 31, 1992 and became Members of this Plan on the effective date of this Ordinance, whose regular employment is for less than thirty (30) hours per week may continue as Members of this Plan. "Employee" also means any person employed on a regular basis for thirty (30) or more hours per week by the Miami Beach Visitor and Convention Authority, this Retirement Plan, the Classified Plan, the Unclassified Plan or the City Pension Fund for Firemen and Policemen. -3- - - 2.14 "Final Average Monthly Earnings" means one-twelfth of the average annual earnings of the Member during the two highest paid years of creditable service except as otherwise provided in this Section 2.14. Notwithstanding the foregoing, for any Member who is in a classification within the AFSCME bargaining unit who entered service with the City on or after April 30, 1993, and for any Member who is in a classification within the GSA bargaining unit who entered service with the City on or after August 1, 1993, "Final Average Monthly Earnings" means one-twelfth of the average annual earnings of the Member during the three highest paid years of service as an Employee, until such time as a collective bargaining agreement is ratified providing for the definition in the first sentence of this Section 2.14. Notwithstanding the foregoing, for any Member who became a member of the Unclassified System prior to October 18, 1992 and was continuously a member of the Unclassified System from that date until the effective date of this Ordinance, "Final Average Monthly Earnings" means one-twelfth of the average annual earnings of the Member during the two highest paid years of creditable service, but shall not in any event be less than one-twelfth of the earnings of the Member during the twelve months immediately preceding the effective date of this Ordinance. 2.15 "Finance Director" means the Finance Director of the City of Miami Beach as appointed by the City Manager or such person designated by the City Manager to perform the duties of Finance Director. 2.16 "Member" means any Employee included in the membership of the Plan, as provided in Article 3. A Member who retires shall be deemed a retired member or a retirant. 2.17 "Pension" means the monthly amount payable to a Pensioner under the Plan; the pension shall be due as of the first day of the calendar month next following the death of the Member or Retirant and shall cease after the payment due on the first day of the month in which the Pensioner ceases to be entitled thereto according to the provisions of this Ordinance. 2.18 "Pensioner" means the dependent beneficiary of a Member or Retirant in receipt of a pension under the Plan as the result of the death of a Member or Retirant of this Plan, the Classified or Unclassified System, or the Predecessor System. 2.19 "Physical Examiners" means the physicians provided for in Section 7.060). 2.20 "Predecessor system" means the Retirement System governed by Ordinance No. 845 as in effect prior to the adoption of the Classified System and the Unclassified System. 2.21 "Regular Interest" means interest at the rate or rates determined by the Board of Trustees as provided in Section 7.06 (d). -4- - 2.22 "Retirant" means a person in receipt of retirement allowance payments under the Plan on the basis of his service as an Employee. 2.23 "Retirement allowance" means monthly payments under the Plan to a Retirant during his lifetime; monthly payments shall be due as of the first day of each calendar month and shall cease after the payment as of the first day of the month in which the Retirant's death occurs. 2.24 "Retirement Plan" or "Plan" means the Miami Beach Employees Retirement Plan created by this ordinance. 2.25 "Unclassified Employee" means an Employee who is employed in a position that is not a classified position under the City of Miami Beach Civil Service Act. For members in classifications within the American Federation of State, County and Municipal Employees ("AFSCME") and Communications Workers of America ("CWA") bargaining units, the terms in this Plan shall have the same meanings as in Ordinance 789, the Classified Employee's Salary Ordinance, except as otherwise specifically provided in this Plan. ARTICLE 3. Membership 3.01 Every person who on the effective date of this Ordinance was a Retirant, Pensioner, or vested former member under the Classified System, Unclassified System or Predecessor System shall automatically become on such date a Retirant, Pensioner or vested Member, as applicable, under this Plan, and shall continue to receive or receive in the future under this Plan the benefits paid or payable under the Classified System, Unclassified System, or Predecessor System. Every person who on the effective date of this Ordinance was a Member of the Classified System or Unclassified System shall automatically become on such date a Member of this Retirement Plan. Any written designation of beneficiary or dependent beneficiary in effect under the Classified System, Unclassified System or Predecessor System on the effective date of this Ordinance shall continue to be in effect under this Plan unless subsequently changed or revoked by the Member or Retirant, in writing, in accordance with the provisions of this Plan Ordinance. 3.02 Any person, other than as provided in Section 3.03 herein, who becomes an Employee on or after the effective date of this Ordinance shall be a Member of this Plan as a condition of his employment or office, as of the first day of City employment. An Employee's acceptance of employment with the city shall constitute authorization for the city to deduct contributions from the Earnings of the Employee in accordance with Section 6.02, unless and until the Employee elects not to participate in this Plan to Section 3.03. -5- ...-..., - 3.03 Any person serving as an Elected Official, City Manager or City Attorney shall have the option to reject membership in this Plan, and to participate in another plan that is approved by the City Commission. Any employee in a classification within the AFSCME or GSA bargaining units who enter the service of the City on or after the effective date of this Ordinance, and who would otherwise become a Member of this Retirement Plan, shall have an irrevocable option to reject membership in this Plan, and elect instead to participate in the Defined Contribution Retirement System, until such time as a collective bargaining agreement is ratified that provides for mandatory participation in this Plan. 3.04 An Employee shall cease to be a Member if he dies, retires, ceases to be an Employee as defined in Section 2.13 herein for any other reason, or elects not to participate in this Plan in accordance with Section 3.03. 3.05 Any Employee who previously elected to participate in the Defined Contribution Retirement System, or a defined contribution retirement plan established for employees of the Miami Beach Visitor and Convention Authority, the Classified Plan, the Unclassified Plan or the City Pension Fund for Firemen and Policemen, prior to the effective date of this Ordinance shall have a one-time, irrevocable option to transfer to this Plan by filing a written election with the Board within six months following the effective date of this Ordinance, but in no event later than the last day of employment. Employees who elect to participate in this Plan pursuant to this Section 3.05 may purchase Creditable Service under the Plan for all or a portion of the period of their participation in the Defined Contribution Retirement System, or a defined contribution retirement plan established for employees of the Miami Beach Visitor and Convention Authority, the Classified Plan, the Unclassified Plan or the City Pension Fund for Firemen and Policemen, in accordance with Section 4.04. Notwithstanding the foregoing, Employees in classifications within the AFSCME and GSA bargaining units who previously elected to participate in the Defined Contribution Retirement System, shall not be eligible to participate in this Plan unless and until a collective bargaining agreement is ratified that provides for such participation. ARTICLE 4. Creditable Service 4.01 Each Employee who was a member of the Classified System or Unclassified System and becomes a Member of this Plan on the effective date of this Ordinance shall be credited with the same amount of creditable service under this Plan to which the member was credited as of such date under the Classified System or Unclassified System. A Member shall be credited with creditable service for all periods of service as an Employee on or after the effective date of this Ordinance during which the Member makes contributions to the Plan in -6- - - accordance with Article 6. The creditable service of a Member shall not include service prior to the date the member elects to receive a refund of Accumulated Employee Contributions in accordance with Section 5.08 (a). 4.02 A member who separates from City employment for active duty service in the Armed Forces of the United States, the United States Merchant Marine or the United States Coast Guard, voluntarily or involuntarily, shall be entitled to creditable service under the Plan for the period of such service, provided: (a) The Member must return to City employment within one (1) year from the earlier of the date of military discharge or release from active service, unless otherwise provided by the Uniformed Services Employment and Reemployment Rights Act (USERRA), (P.L.1 03-353). (b) The Member is entitled to reemployment with the City under the provisions of the Uniformed Services Employment and Reemployment Rights Act (USERRA), (P.L.1 03-353). (c) The member pays into the Plan the amount of contributions that would have been required had the Member remained continuously employed by the City, based on the member's earnings on the date of separation from City employment. (d) The maximum amount of creditable service available under this paragraph shall be five (5) years. 4.03 (a) A Member with five (5) or more years of creditable service may, at any time prior to retirement, elect to purchase up to a maximum of two (2) years of additional creditable service as provided in this section 4.03. The benefit multiplier that the Member is earning at the time of the election to purchase additional creditable service pursuant to this section 4.03 shall be applied to the additional credited service purchased. To be eligible to purchase additional creditable service under this section 4.03, a Member who previously elected to participate in the Defined Contribution Retirement System (401(a) Plan) must first purchase all available creditable service in accordance with section 4.04. An eligible Member may elect to purchase additional creditable service under this section 4.03 for any of the following types of employment prior to the employee's date of hire by the City, provided that the Member may not purchase such service if the Member has received or will receive a pension benefit for the same period of employment under another retirement plan: 1. Active duty military service in the Armed Forces of the United States or the Coast Guard. -7- - - 2. Full-time employment with another governmental entity. 3. Full-time employment in the private sector performing the same or very similar duties the employee is performing for the City at the time of his/her election to purchase additional service. (b) In order to receive the additional creditable service, the Member shall pay ten percent (10%) of his/her annual rate of pensionable Earnings, multiplied by the number of years and fractions of a year purchased, up to a total of two years. For the purpose of this section, the annual rate of pensionable earnings shall be the rate in effect on the date of payment and shall include the annual amount of overtime pay for those Members whose overtime pay is included in Earnings. Payment shall be made in a single lump sum to the Plan within six (6) months following the date of the member's election to purchase the additional service. (c) For purposes of this section 4.03, Members may use the value of accrued sick and/or annual leave for the purchase of additional creditable service, as follows. Accrued sick leave may be used at the rate of 2 hours of accrued sick leave for the value of each hour used toward the purchase, provided that the Member must retain at least 120 hours of accrued sick leave after the purchase. Annual leave may be used at the rate of 1 hour of accrued annual leave for the value of each hour used toward the purchase. The total amount of sick and annual leave used for the purchase of additional creditable service under this section 4.03 shall be deducted from the maximum amount of leave allowed for payout to the Member upon termination of employment. (d) Members may pay for some or all of the cost of additional creditable service purchased pursuant to this section 4.03 by direct transfer or rollover of funds from a 401 (a) or 457 plan, provided the 401 (a) plan or 457 plan permits such direct transfers. (e) Notwithstanding the forgoing, Employees in classifications within the AFSCME bargaining unit and the GSA bargaining unit shall not be eligible to purchase additional creditable service under this section 4.03 unless and until a collective bargaining agreement is ratified that provides for such purchase. (f) Amounts paid or transferred to this Plan for the purchase of creditable service under this section 4.03 shall be considered accumulated employee contributions as that term is defined herein, and Members shall be 100% vested in such amounts. (g) Notwithstanding any other provision of this section 4.03, in no event may the maximum benefit percentage applicable to the member be exceeded as the result of any purchase of creditable service. -8- -, - 4.04 Purchase of Creditable Service by Members Who Previously Participated in the Defined Contribution Retirement System. (a) Any Employee who previously elected to participate in the Defined Contribution Retirement System (401(a) Plan) prior to the effective date of this Ordinance, and who becomes a Member of this Plan on or after the effective date of this Ordinance, may purchase Creditable Service under this Plan for all or a portion of the period of their participation in the Defined Contribution Retirement System, by paying into the Plan an amount equal to the sum of the required employer and employee contributions to the Classified Plan or Unclassified Plan (whichever plan in which the Member was eligible to participate) for each fiscal year of service, or portion thereof, purchased, as reflected in the actuarial valuation report for that year; plus interest at the rate of 8.5 percent for Classified Employees and 9.0% for Unclassified Employees, calculated from the end of each applicable fiscal year through the date of payment. Notwithstanding the preceding sentence, for any Creditable Service purchased pursuant to this subsection (a) that relates to employment during the 2005-2006 fiscal year, if full payment for such service is made on or before May 1, 2006, the payment amount for such service shall be twenty percent (20%) of the Employee's earnings for the period purchased, with no interest on the amount paid for such service. In any event, full payment all service purchased pursuant to this subsection (a) must be made within six (6) months after the effective date of this Ordinance and cost estimates have been provided to the Employee, but in no event later than the last day of employment. In the case of an employee who elects to transfer or roll over assets from the Defined Contribution Retirement System to purchase creditable service pursuant to this subsection (a), the requirements of the preceding sentence as to such assets shall be satisfied by the employee's irrevocable authorization to transfer or roll over such assets, executed on or before the last day of employment. Each employee electing this option may purchase creditable service under this Plan for the period from the date the employee entered the Defined Contribution Retirement System through the effective date of membership in this Plan, or any portion thereof. If a Member elects to purchase less than the full period of participation in the Defined Contribution Retirement System, the first period of purchase shall be for the same fiscal year in which the Employee was first authorized to purchase service pursuant to this subsection (a),the second period of purchase shall be for the immediately preceding fiscal year and so on, until the Member purchases the amount of creditable service desired. A Member shall not be permitted to select those years that result in the lowest purchase amount. Notwithstanding any other provision of this section 4.04, in no event may the maximum benefit -9- - - percentage applicable to the member be exceeded as the result of any purchase of Creditable Service. (b) Any Employee who previously elected to participate in a defined contribution retirement plan established for employees of the Miami Beach Visitor and Convention Authority, the Classified Plan, the Unclassified Plan or the City Pension Fund for Firemen and Policemen, prior to the effective date of this Ordinance, and who becomes a Member of this Plan on or after the effective date of this Ordinance, may purchase Creditable Service under this Plan for all or a portion of the period of their participation in such defined contribution retirement plan on or after October 18, 1992, during which such Member was employed on a regular basis for thirty (30) or more hours per week, by paying into the Plan an amount equal to the sum of the required employer and employee contributions to the Classified Plan for each fiscal year of service, or portion thereof, purchased, as reflected in the actuarial valuation report for that year; plus interest at the rate of 8.5 percent calculated from the end of each applicable fiscal year through the date of payment. Notwithstanding the preceding sentence, for any Creditable Service purchased pursuant to this subsection (b) that relates to employment during the 2005-2006 fiscal year, if full payment for such service is made on or before May 1, 2006, the payment amount for such service shall be twenty percent (20%) of the Employee's earnings for the period purchased, with no interest on the amount paid for such service. In any event, full payment all service purchased pursuant to this subsection (b) must be made within six (6) months after the effective date of this Ordinance and cost estimates have been provided to the Employee, but in no event later than the last day of employment. In the case of a Member who elects to transfer or roll over assets from a defined' contribution retirement plan established for employees of the Miami Beach Visitor and Convention Authority, the Classified Plan, the Unclassified Plan or the City Pension Fund for Firemen and Policemen to purchase creditable service pursuant to this subsection (b), the requirements of the preceding sentence as to such assets shall be satisfied by the Member's irrevocable authorization to transfer or roll over such assets, executed on or before the last day of employment. If a Member elects to purchase less than the full period of participation in the defined contribution retirement plan, the first period of purchase shall be for the same fiscal year in which the Employee was first authorized to purchase service pursuant to this subsection (b),the second period of purchase shall be for the immediately preceding fiscal year and so on, until the Member purchases the amount of creditable service desired. A Member shall not be permitted to select those years that result in the lowest purchase amount. Notwithstanding any other provision of -10- - this section 4.04, in no event may the maximum benefit percentage applicable to the Member be exceeded as the result of any purchase of creditable service. (c) A Member who elects to purchase creditable service under this section 4.04 may pay for such service in one or a combination of the following manners: (1) Direct transfer or rollover from the Defined Contribution Retirement System, 457 plan or other eligible plan in accordance with Section 11.03, provided the other retirement system or plan permits such direct transfers or rollovers for the purchase of creditable service under this Plan. The full value of assets, including any outstanding loans, transferred from a Member's account in the Defined Contribution Retirement System, or from a defined contribution retirement plan established for employees of the Miami Beach Visitor and Convention Authority, the Classified Plan, the Unclassified Plan or the City Pension Fund for Firemen and Policemen that permits such direct transfers or rollovers for the purchase of creditable service under this Plan, will be credited toward the purchase of creditable service under this section 4.04. A Member must payoff any loan balance existing at the time of transfer from the Defined Contribution Retirement System, or from a defined contribution retirement plan established for employees of the Miami Beach Visitor and Convention Authority, the Classified Plan, the Unclassified Plan or the City Pension Fund for Firemen and Policemen, by making payments to this Plan in the same manner and at the same rate of interest as the payments that were made to the Defined Contribution Retirement System or defined contribution retirement plan prior to the transfer. In the event full payment of all outstanding loan balances is not made prior to termination of employment, the Member's creditable service shall be adjusted to reflect the payments actually made. (2) Cash Payment. (3) A Member who is employed by the City at the time creditable service is purchased pursuant to this section 4.04 may use the value of accrued sick and/or annual leave as follows. Accrued sick leave may be used at the rate of 2 hours of accrued sick leave for the value of each hour used toward the purchase, provided that the Member must retain at least 120 hours of accrued sick leave after the purchase. Annual leave -11- - may be used at the rate of 1 hour of accrued annual leave for the value of each hour used toward the purchase. The total amount of sick and annual leave used for the purchase of additional creditable service under this section 4.04 shall be deducted from the maximum amount of leave allowed for payout to the Member upon termination of employment. (c) Amounts paid or transferred to this Plan for the purchase of creditable service under this section 4.04, excluding any outstanding loan balances, shall be considered accumulated employee contributions as that term is defined herein, and Members shall be 100% vested in such amounts. (d) Notwithstanding any other provision of this section 4.04, the provisions of this section 4.04 shall not apply to Employees within classifications in the AFSCME and GSA bargaining units until a collective bargaining agreement containing such provisions is ratified. If a collective bargaining agreement applying the provisions of this section 4.04 to Employees within classifications in the AFSCME or GSA bargaining units is ratified on or before April 1, 2006, for any Employee who purchases Creditable Service purchased pursuant to subsection (a), above, that relates to employment during the 2005-2006 fiscal year, and makes full payment for such service within sixty (60) days following ratification of the collective bargaining agreement, the payment amount for such service shall be twenty percent (20%) of the Employee's earnings for the period purchased, with no interest on the amount paid for such service. 4.05 Purchase of Creditable Service by Members Who Previously had Creditable Service Under the Classified Plan. Any Member who previously had creditable service under the Classified Plan but who separated from employment as a Classified Employee prior to becoming fully vested in the Classified Plan, may purchase Creditable Service under this Plan for all or a portion of the period of their creditable service under the Classified Plan, by paying into the Plan an amount equal to the sum of the required employer and employee contributions to the Classified Plan for each fiscal year of service, or portion thereof, purchased, plus interest at the rate of eight and one-half percent (8.5%) from the end of each applicable fiscal year through the date of payment. Full payment must be made within six (6) months after the effective date of this Ordinance. Notwithstanding any provision of this section 4.05, this section 4.05 shall have no application to persons employed by the Miami Beach Visitor and Convention Authority, the Classified Plan, the Unclassified Plan or the City Pension Fund for Firemen and Policemen on the effective date of this Ordinance, -12- - ARTICLE 5. Benefits 5.01 Normal Retirement (a) Normal Retirement Date (1) Except as otherwise provided in this subsection (a), the normal retirement date shall be the first day of the calendar month coincident with or next following the attainment of age fifty-five (55) and completion of five (5) or more years of creditable service. (2) Notwithstanding the provisions of paragraph (1), above, the normal retirement date of a Member who became a member of the Unclassified System prior to October 18, 1992 and was continuously a member of the Unclassified System from that date until the effective date of this Ordinance, shall be the first day of the calendar month coincident with or next following the attainment of age fifty (50) and completion of five (5) or more years of creditable service. (3) Notwithstanding the provisions of paragraph (1), above, the normal retirement date for Members in classifications within the CWA (MBEBA) bargaining unit who entered the service of the City prior to February 21, 1994 and who were Members of the Classified Plan continuously from that date until the effective date of this Ordinance, shall be the first day of the calendar month coincident with or next following the attainment of age 50 and completion of five (5) or more years of creditable service. (4) Notwithstanding the provisions of paragraph (1), above, the normal retirement date for Members in classifications within the AFSCME bargaining unit who entered the service of the City prior to April 30, 1993 and who were Members of the Classified Plan continuously from that date until the effective date of this Ordinance, shall be the first day of the calendar month coincident with or next following the attainment of age fifty (50) and completion of five (5) or more years of creditable service, until a collective bargaining agreement is ratified that provides a normal retirement date in accordance with paragraph (1), above. (5) Notwithstanding the provisions of paragraph (1), above, the normal retirement date for Members in classifications within the GSA bargaining unit or any Employee classified as "Other" who entered the service of the City prior to August 1, 1993 and who were Members of the Classified Plan continuously from that date until the effective date of this Ordinance, shall be the first day of the calendar month coincident with or next following the attainment of age fifty (50) and completion of five (5) or more years of creditable service, until a collective bargaining agreement is ratified that provides a normal retirement date in accordance with paragraph (1), above. -13- - - (6) Notwithstanding the provIsions of paragraph (1), above, the normal retirement date for Members in classifications within the AFSCME bargaining unit who entered the service of the City after on or April 30, 1993, and Members in classifications within the GSA bargaining unit who entered the service of the City on or after August 1, 1993, shall be the first day of the calendar month coincident with or next following the attainment of age sixty (60) and the completion of ten (10) or more years of creditable service, until a collective bargaining agreement is ratified that provides a normal retirement date in accordance with paragraph (1), above. (b) Normal Retirement Benefit (1) Except as otherwise provided in this subsection (b), the normal retirement benefit shall be payable to a Member on or after the normal retirement date in an amount equal to three percent (3%) of final average monthly earnings multiplied by creditable service, up to a maximum of eighty percent (80%) of final average monthly earnings. (2) Notwithstanding the provisions of paragraph (1), above, the normal retirement benefit payable to Members in classifications within the AFSCME bargaining unit who entered the service of the City prior to April 30, 1993 and who were Members of the Classified Plan continuously from that date until the effective date of this Ordinance, shall be three percent (3%) of final average monthly earnings multiplied by creditable service for the first fifteen (15) of such service, and four percent (4%) of final average monthly earnings multiplied by creditable service for each year in excess of fifteen (15), to a maximum of ninety percent (90%) of final average monthly earnings. (3) Notwithstanding the provisions of paragraph (1), above, the normal retirement benefit payable to Members in classifications within the CWA (MBEBA) bargaining unit who entered the service of the City prior to February 21, 1994 and who were Members of the Classified Plan continuously from that date until the effective date of this Ordinance, shall be three percent (3%) of final average monthly earnings multiplied by creditable service for the first fifteen (15) of such service, and four percent (4%) of final average monthly earnings multiplied by creditable service for each year in excess of fifteen (15), to a maximum of ninety percent (90%) of final average monthly earnings. (4) Notwithstanding the provisions of paragraph (1), above, the normal retirement benefit payable to Members in classifications within the GSA bargaining unit who entered the service of the City prior to August 1, 1993 and who were Members of the Classified Plan continuously from that date until the effective date of this Ordinance, shall be three percent (3%) of final average monthly earnings multiplied by creditable service for the first fifteen (15) of -14- such service, and four percent (4%) of final average monthly earnings multiplied by creditable service for each year in excess of fifteen (15), to a maximum of ninety percent (90%) of final average monthly earnings. (5) Notwithstanding the provisions of paragraph (1), above, the normal retirement benefit payable to a Member who became a member of the Unclassified System prior to October 18, 1992 and was continuously a member of the Unclassified System from that date until the effective date of this Ordinance, shall be four percent (4%) of final average monthly earnings multiplied by creditable service prior to that date, and three percent (3%) of final average monthly earnings multiplied by creditable service after that date, up to a maximum of eighty percent (80%) of final average monthly earnings. Notwithstanding any other provision of this Plan, in determining the normal retirement benefit payable to Unclassified Employees, earnings shall be as defined in section 2.11 except that annual payments for unused leave (excluding annual or sick leave) shall be included. (6) Notwithstanding the provisions of paragraph (1), above, the normal retirement benefit payable to a Member who has served as an Elected Official, City Manager or City Attorney shall be four percent (4%) of final average monthly earnings multiplied by the number of years of creditable service as an Elected Official, City Manager or City Attorney; and the percentage rate in effect under the Classified System, Unclassified System or this Plan, as applicable, for any other periods of City employment multiplied by the number of years of creditable service in such employment; up to a maximum of eighty percent (80%) of final average monthly earnings. Notwithstanding any other provision of this Plan, in determining the benefit payable under this paragraph (6), earnings as an Elected Official, City Manager or City Attorney shall include total W-2 compensation plus any other payments or allowances, up to the limitations set forth in Section 401(a)(17) of the Internal Revenue Code and regulations promulgated thereunder. Notwithstanding any other provision of this Plan, the normal retirement benefit payable to a Member who has served as an Elected Official and is subsequently employed, without a break in service, by the City in another position as a member of this Plan for a period of at least five additional years, shall be equal to the sum of the retirement allowance payable based on the member's creditable service and final average monthly earnings as an Elected Official, plus the retirement allowance payable based on the member's creditable service and final average monthly earnings for the period of employment subsequent to service as an Elected Official, up to a maximum of eighty percent (80%) of final average monthly earnings during employment subsequent to service as an Elected Official. In the event a Member who has served as an Elected Official and is subsequently employed, without a break -15- -, in service, by the City in another position as a member of this Plan for a period of less than five additional years, such Member shall not be entitled to a benefit from this Plan for the period of employment subsequent to service as an Elected Official, but shall be entitled to a refund of accumulated employee contributions for such period of service. 5.02 Early Retirement (a) Any Member who was a member of the Classified System and became a Member of this Plan on the effective date of this Ordinance may retire prior to the normal retirement date and receive an early retirement benefit in accordance with this Section 5.02. To be eligible for an early retirement benefit, such Member must have attained age fifty (50), and the sum of the Member's attained age (last birthday) and complete years of creditable service must not be less than seventy-five (75). The early retirement benefit shall commence on the first day of the calendar month next following receipt of written application therefor by the Board. (b) The early retirement benefit shall be the actuarial equivalent of a deferred benefit commencing on the Member's normal retirement date and computed in accordance with Section 5.01 on the basis of final average monthly earnings and creditable service as of the date of retirement. 5.03 Partial Lump Sum Distribution. A Member who terminates City employment and retires on or after the normal retirement date and on or after the effective date of this Ordinance shall have the option of receiving up to twenty-five percent (25%) of the actuarial value of his/her normal retirement allowance in a lump sum distribution. For example, if a member's normal retirement allowance is $2,000 per month, the Member may elect to receive, in lieu of such monthly benefit, a monthly benefit in the amount of $1,500 per month plus a single lump sum distribution equal to the actuarial value of the other $500 monthly benefit. The lump sum distribution shall be calculated using the same discount rate, mortality rates and other assumptions and cost methods used in the most recent actuarial valuation report for the Plan. The partial lump sum distribution option is available only to Members who are eligible for a normal retirement allowance, and is not available in connection with any other benefit payable under the Plan. 5.04 Vested Retirement Allowance (a) Any Member who was a member of the Unclassified System and became a Member of this Plan on the effective date of this Ordinance, with five or more years of creditable service and whose service with the City is terminated prior to the normal retirement date, shall be eligible for a refund of accumulated employee contributions; or the member may -16- - - elect to not receive the refund but instead, in lieu of a refund of accumulated employee contributions, apply for a vested retirement allowance in accordance with this section 5.04. (b) Any Member who was a member of the Classified System and became a Member of this Plan on the effective date of this Ordinance, whose service with the City is terminated voluntarily or involuntarily, prior to the date as of which he would first become eligible for retirement on a normal or early service retirement allowance shall be entitled, in lieu of a refund of his accumulated employee contributions, to apply for a vested retirement allowance in accordance with this section 5.04. (c) The vested retirement allowance payable under this section 5.04 shall be a deferred allowance commencing on the earliest date as of which a Member, with the years of creditable service upon termination of employment, would first be eligible for normal retirement benefits, and shall be equal to the amount computed in accordance with section 5.01 on the basis of the Member's final average monthly earnings and creditable service at the time of termination, and the Member's age as of the date on which payment of the allowance commences. 5.05 Disability Retirement Allowance (a) Upon the written application of a Member or the City Manager, a Member who has five (5) or more years of creditable service may be retired by the Board on an ordinary disability retirement allowance on the first day of a calendar month next following the granting of such application; provided that the Physical Examiners, after a medical examination of such Member, shall certify that the member is totally incapacitated, mentally or physically, for the further performance of duty, that such incapacity is not the result of habitual use of narcotics or alcohol, misconduct, service in the Armed Forces, self-inflicted injury or disability sustained through other employment, that such incapacity is likely to be permanent and that such Member should be retired. (b) Upon the written application of a Member or the City Manager, any Member who has been totally and permanently incapacitated for the performance of his duties as the natural and proximate result of an accident occurring while in the actual performance of duty at some definite time and place, without willful negligence on the member's part, may be retired by the Board on a Service-connected disability retirement allowance, and not on an ordinary disability retirement allowance, on the first day of a calendar month next following the execution and granting of such application; provided that the Physical Examiners, after a medical examination of the Member, shall certify that the member is totally incapacitated, -17- - -, mentally or physically for the further performance of duty, that such incapacity is likely to be permanent and that he should be retired. (c) The disability retirement allowance payable to a Member retiring under the provisions of this Section 5.05 shall be an amount computed as a normal retirement benefit in accordance with section 5.01, on the basis of the Member's final average monthly earnings and creditable service at the time of disability retirement; provided, that the amount of such allowance shall be modified in accordance with the following Subsections (d) and (e). (d) 1. The allowance payable to a disability Retirant prior to the normal retirement date shall not be less than thirty-five percent (35%) of his final average monthly earnings as of the date of disability if an ordinary disability retirement allowance is payable, and not less than sixty-five percent (65%) of such final average monthly earnings if a service connected disability retirement allowance is payable. Notwithstanding the foregoing, for Members who are in classifications within the AFSCME bargaining unit and who entered the service of the City prior to April 30, 1993, Members who are in classifications within the CWA bargaining unit and who entered the service of the City prior to February 21, 1994, Members who are in classifications within the GSA bargaining unit and who entered the service of the City prior to August 1, 1993, and Members who are classified as "Other" who entered the service of the City prior to August 1, 1993, the minimum service connected disability retirement allowance payable prior to such member's normal retirement date shall be seventy-five percent (75%) of such final average monthly earnings. 2. The allowance payable to a disability Retirant after the normal retirement date shall be an amount computed as a normal retirement benefit on the basis of the final average monthly earnings and number of years of creditable service the Member would have had if he had continued in service without interruption until the normal retirement date at the maximum rate of pay in effect at the time of his retirement for the classification from which the Member retired, provided that such allowance shall not exceed the amount payable to the Member as a disability retirement allowance prior to the normal retirement date and shall not be less than the normal retirement benefit at the normal retirement date. "Normal retirement date" as used in this Section 5.05 means the date determined in accordance with Section 5.01 (a) on the assumption that the period of disability retirement is deemed to be active service as an Employee for this purpose. (e) Any amounts which may be paid or payable on account of disability to the Member or the Member's dependents under the Workers' Compensation Act, exclusive of fixed statutory payments for the loss of any bodily member, shall be offset against and payable in lieu -18- - of that part of the disability retirement allowance provided under the Plan for the same disability, in such equitable manner as the Board shall determine. (f) 1. During the period of disability retirement prior to the normal retirement date, the Retirant's annual earnings from employment (including self-employment) shall not exceed an amount which, when added to the disability retirement allowance payments received by him, would result in a combined earned income of one hundred twenty-five percent (125%) of the maximum current salary for the classification from which the member retired if he is receiving a service-connected disability retirement allowance, or one hundred percent (100%) of such maximum salary if he is receiving an ordinary disability retirement allowance; otherwise payments of the disability retirement allowance shall be withheld to the extent that the combined earned income exceeds the maximum permissible amount. The Member must agree at the time of disability retirement, before any benefits are paid under the Plan, to furnish annually to the Board, before May 1 of each year, a copy of the Member's Federal Income Tax return for the prior year, and any other information which the Board may require. When the Retirant's combined earned income exceeds the maximum permissible amount determined on the basis of the maximum salary as of January 1 of the prior year for the classification from which the Member retired, future payments of the disability retirement allowance shall be withheld until the total sum withheld equals the amount by which the Member's combined earned income for the prior year exceeded the maximum permissible amount. Restrictions on earnings shall not be applicable after the Retirant's normal retirement date. 2. Notwithstanding the provisions of paragraph 1, above, any member of the Classified System who became a Member of this Plan on or after the effective date of this Ordinance, and who retires on a disability retirement on or after July 1, 1995, shall be subject to the benefit adjustments in this paragraph 2. During the period of such Member's disability retirement, the Retirant's annual earnings from employment (including self-employment) shall not exceed an amount which, when added to the disability retirement allowance payments received by him, would result in a combined earned income of two hundred percent (200%) of the maximum current salary for the classification from which the Member retired if the Member is receiving a service-connected disability retirement allowance, or one hundred percent (100%) of such maximum salary if the Member is receiving an ordinary disability retirement allowance; otherwise payments of the disability retirement allowance shall be withheld to the extent that the combined earned income exceeds the maximum permissible amount. The Member must agree at the time of his disability retirement, before any benefits are paid under the Plan, to furnish annually to the Board, before May 1 of each year, a copy of the Member's Federal Income Tax -19- ...-.., return for the prior year, and any other information which the Board may require. When the Retirant's combined earned income exceeds the maximum permissible amount determined on the basis of the maximum salary as of January 1 of the prior year for the classification from which the Member was retired, future payments of disability retirement allowance shall be withheld until the total sum withheld equals the amount by which the Member's combined earned income for the prior year exceeded the maximum permissible amount. 3. The term "earned income" shall be defined by Section 43(c)(2) of the Internal Revenue Code to mean wages, salaries, tips, and other employee compensation, plus the amount of the taxpayer's net earnings from self-employment for the taxable year (within the meaning of Section 1402(a) of the Internal Revenue Code). (g) Any Retirant who is receiving a disability retirement allowance shall be subject, prior to the normal retirement date, to re-examination by the Physical Examiners either upon request of the Retirant, the Board or the City Manager, and the Physical Examiners shall report their conclusions as to the continuance of the incapacity. In the event that such disability shall not continue to incapacitate the Retirant for service acceptable to the City, in accordance with requirements of the Personnel Department, the City Manager may require that such Retirant be returned to active duty at work which is the same or of similar nature to the work he performed prior to his incapacity, or returned to other work within the limits of his mental or physical capacities, at a rate of compensation not less than seventy percent (70%) of the pay to which he would have been entitled at the time of the Member's return to active service for the grade of service occupied by the Retirant prior to incapacity. Upon any such return to active duty, the Retirant shall be restored to service as a Member, the disability retirement allowance shall be terminated, the Member shall resume contributing to the Plan based on the earnings received upon reemployment, and the period during which the member was receiving a disability retirement allowance shall be included in creditable service for all purposes of the Plan. (h) If any Retirant in receipt of a disability retirement allowance is found by the Physical Examiners, prior to the normal retirement date, to be no longer incapacitated but is not restored to service as a Member because of the member's own refusal to accept employment offered in accordance with the foregoing paragraph, the disability retirement allowance shall be terminated, and the period during which the member was receiving a disability retirement allowance shall in no event be added to the creditable service acquired prior to the incapacity. 5.06. Active Service Death Benefits -20- - - (a) Upon receipt of evidence, satisfactory to the Board, of the death of a Member who has three (3) or more years of creditable service, a monthly pension shall be paid to the surviving spouse or domestic partner of the deceased Member, provided that said spouse had been married to the Member, or the domestic partnership has been registered for at least one (1) year immediately prior to the date of his death. If there is no surviving spouse or domestic partner entitled to such pension, the pension shall be paid to the dependent child or children of the deceased Member, divided in such manner as the Board in its discretion shall determine, to continue until every such child dies or attains twenty-one (21) years of age. (b) The monthly pension payable to the person or persons entitled thereto in accordance with the subsection (a), above, shall be equal to one-half of the amount computed as a normal service retirement allowance in accordance with of Section 5.01, as though the date of the Member's death were the normal retirement date, on the basis of the Member's final average monthly earnings and creditable service at the time of death; provided that, for members of the Classified System who became members of this Plan on the effective date of this Ordinance, such pension shall not be less than thirty percent (30%) nor more than forty percent (40%) of final average monthly earnings; further provided that, in the case of a person who became a Member of the Classified System prior to November 1, 1976, if the Accumulated Employee Contributions credited to the Member at the time of death are less than would have been credited to him if he had contributed at the rate of six per centum (6%) of his earnings from the time he became a participant under the predecessor system governed by Ordinance No. 845, the pension computed in accordance with the foregoing provisions of this paragraph shall be reduced by half of the amount by which the retirement allowance of the deceased Member would have been reduced if he were retiring on a normal or early service retirement allowance as of the date of his death; and further provided that, if the pension is payable to a spouse or domestic partner who is more than fifteen (15) years younger than the Member, the pension shall be reduced to an amount which is the actuarial equivalent, of the pension payable to the spouse if said spouse or domestic partner were exactly fifteen (15) years younger than the deceased Member. In the event of the death of the spouse or domestic partner after pension payments have commenced, a pension computed in accordance with the foregoing sentence but prior to any reduction because of the difference in the ages of the deceased Member and the surviving spouse or domestic partner shall be paid to the dependent child or children of the deceased Member under twenty-one (21) years of age, divided in such manner as the Board in its discretion shall determine, until every such child dies or attains twenty-one (21) years of age. -21- - - 5.07 Death Benefits after Retirement (a) Upon receipt of evidence, satisfactory to the Board, of the death of a Retirant, a monthly pension shall be payable to the surviving spouse or domestic partner of the deceased Retirant, provided that the spouse had been married to the Retirant or the domestic partnership was registered on the date of retirement or termination of service, whichever occurred first, and for a least one (1) year prior to such date; and further provided, that if the Retirant had elected an option in accordance with Section 5.08 which was in effect at the time of his death, monthly benefits shall be continued after his death, in lieu of benefits under this section 5.07, in accordance with the option. (b) The monthly pension payable to the surviving spouse or domestic partner of a deceased Retirant pursuant to the foregoing paragraph of this Section 5.07 shall be equal to fifty percent (50%) of the retirement allowance which would have been payable to the deceased Retirant if the Retirant had been alive at the time of the monthly payment; provided, that, if the surviving spouse or domestic partner is more than fifteen (15) years younger than the deceased Retirant, such monthly pension shall be reduced to an amount which is the actuarial equivalent of such pension for a spouse exactly fifteen (15) years younger than the deceased Retirant. (c) If any such deceased Retirant is not survived by a spouse or domestic partner entitled to a pension in accordance with the foregoing paragraphs of this Section 5.07, or if the death of such a spouse or domestic partner occurs after pension payments have commenced in accordance with the foregoing paragraph, the pension which would otherwise have been payable to a surviving spouse or domestic partner eligible therefor and not more than fifteen (15) years younger than the deceased Retirant shall be payable to the dependent child or children of the said deceased Retirant, if any, divided in such manner as the Board in its discretion shall determine, to continue until every such child 1) marries or dies, or 2) attains eighteen (18) years of age or twenty-two (22) years of age in the case of a child who is a full- time student in high school or college; provided that, for children of Members in classifications within the AFSCME bargaining unit, the pension shall continue to twenty-five (25) years of age in the case of a child who is a full-time student in high school or college; provided that in the case of a physically or mentally disabled child, the pension shall continue until the child recovers from the disability. As used in this paragraph, a "physically or mentally disabled child" is one who 1) is unmarried, 2) is entitled to and receives a child's disability benefit based upon determination by the Social Security Administration that the child is unable to do any substantial gainful activity by reason of any medically determinable physical or mental impairment which -22- - can be expected to result in death or which has lasted or can be expected to last for a continuous period of not less than twelve (12) months and 3) was suffering from such impairment prior to attaining eighteen (18) years of age (or twenty-two (22) years of age in the case of a child who was a full time student in high school or college, or twenty-five (25) years of age in the case of a child who was a full-time student in high school or college and is the child of a Member in a classification within the AFSCME bargaining unit). Notwithstanding the foregoing, only children who were dependent beneficiaries of the Retirant on the date of retirement or termination of service, whichever is first, shall be eligible for a pension under this paragraph. (d) If there are no pension benefits payable to a surviving or domestic partner, child or children pursuant to paragraphs (a), (b) or (c) above, then the aforementioned pension shall be paid to the dependent parent, if any, of the deceased member. If both parents are dependent, such benefit shall be shared equally between them. (e) Notwithstanding any provision of this Section 5.07 to the contrary, in the event that an optional benefit had been elected by a Retirant in accordance with Section 5.07, and such election is in effect at the time of the Retirant's death, monthly benefits, if any, shall be payable after death to the person designated as the contingent annuitant in accordance with the optional election, and no benefits shall be payable as a result of the death of the Retirant under this Section 5.07. (d) For members of the Unclassified System who became members of this Plan on the effective date of this Ordinance, under no circumstances shall any surviving spouse or domestic partner of a deceased Member or Retirant receive a pension if the surviving spouse remarries, or if the domestic partner registers as the domestic partner of any other person. 5.08 Optional Benefits (a) In lieu of the normal or early retirement benefits provided in sections 5.01 and 5.02, above, a Member may elect to receive an optional benefit under this section 5.08. The optional benefit is the actuarial equivalent of the Member's normal or early retirement benefit. If the member's written election of an optional benefit is received by the Board at least thirty (30) days prior to the date of commencement of retirement benefits, the election of the optional benefit shall become effective on the date the retirement benefit commences. If such election is received by the Board at any later date it shall become effective thirty (30) days after the date the retirement allowance commences. (b) A Member who elects an optional benefit must designate a contingent annuitant to receive a benefit following the Member's death. A Member may designate his/her -23- - spouse, domestic partner, child or any other person who is shown, on the basis of evidence satisfactory to the Board, to be dependent upon or receiving substantial support from the Member, as the contingent annuitant; provided, if the contingent annuitant is a minor child, the retirement benefit shall not be payable under the option after the death of the Member after the minor child attains twenty-one (21) years of age. If the designated contingent annuitant is the Member's spouse or domestic partner on the date of retirement or termination of service, whichever occurred first, and for at least one (1) year prior to such date, the monthly benefit payable under the option to the Member and the surviving contingent annuitant shall be the actuarial equivalent of the benefit which would have been payable in the absence of the member's election to receive an optional benefit, as a retirement benefit to the Member after retirement and as a pension after the Member's death to the surviving spouse or domestic partner in accordance with Section 5.07; otherwise, the monthly benefit payable under the option shall be the actuarial equivalent of the retirement allowance payable only to the Member after retirement and prior to the election of an optional benefit. (c) The election of an optional benefit may not be revoked or changed by the Member but, if the Member or the contingent annuitant designated under the option dies prior to the date the option becomes effective, the election shall thereby be revoked. (d) A member may elect one of the following optional benefits: Option 1. A reduced retirement benefit payable during the Member's life, and after the Member's death the same monthly benefit shall be paid to the Member's contingent annuitant for the contingent annuitant's lifetime; or Option 2. A reduced retirement allowance payable during the Member's life, and after the member's death an allowance equal to two-thirds (2/3) of the Member's reduced monthly allowance shall be paid to the contingent annuitant for the contingent annuitant's lifetime. 5.09 Refund of Accumulated Employee Contributions (a) A Member may elect, upon ceasing to be an Employee for any cause other than retirement or death, to receive in one sum the Accumulated Employee Contributions credited to the Member. (b) Upon receipt of a refund of accumulated employee contributions, all creditable service shall be canceled, such creditable service shall not be reinstated if the Member is reemployed by the City in the future, and the Member shall be considered a new Member as of the date of reemployment. -24- .- - (c) Upon receipt of evidence satisfactory to the Board, of the death of a Member prior to the commencement of retirement benefits, with no surviving spouse, domestic partner or dependent children entitled to receive a pension as provided in Section 5.05, the amount of the Member's Accumulated Employee Contributions at the time of death shall be payable in one sum to the Member's designated beneficiary if living, otherwise to such Member's estate. (d) Upon receipt of evidence satisfactory to the Board, of the death of a Retirant who is not survived by a spouse, domestic partner or dependent children entitled to a pension in accordance with Section 5.07, provided the Member has not elected an optional benefit that has become effective, any excess of Accumulated Employee Contributions at retirement over the sum of the retirement benefit payments received shall be paid in one sum to the Member's designated beneficiary if living, otherwise to such Member's estate. (e) Upon receipt of proof satisfactory to the Board, of the death of the survivor of a Retirant and the contingent annuitant under an option, if an option has been elected and has become effective, any excess of the Retirant's Accumulated Employee Contributions at the time of retirement over the sum of the benefit payments received shall be paid to the Retirant's beneficiary if living, otherwise to the estate of the survivor of such Retirant and contingent annuitant. (f) Upon receipt of proof satisfactory to the Board, that no further benefits are payable as the result of the death of a Member prior to the commencement of any retirement benefit, the excess, if any, of the Accumulated Employee contributions at the time of his death over the benefit payments received by the Member's spouse or domestic partner and dependent children shall be paid in a single sum to the Member's designated beneficiary if living, otherwise to such Member's estate. (g) Upon receipt of proof satisfactory to the Board, that no further benefits are payable as the result of the death of a Retirant, the excess of the Retirant's Accumulated Employee Contributions at retirement over benefit payments received by the Retirant, the Retirant's spouse or domestic partner and dependent children shall be paid in one sum to the Retirant's designated beneficiary if living, otherwise to such Retirant's estate. (h) A Member's beneficiary for receipt of the single sum payments in accordance with this Section 5.08 must have been designated by the Member in writing and filed with the Board prior to the member's death. A Member may designate more than one beneficiary for this purpose; provided that in such event the Member must specify the manner in which payments to the multiple beneficiaries shall be allocated, The Member may also -25- - -- designate alternate beneficiaries with a specified order or priorities for entitlement to single sum payments in the event of death. A Member may change the designated beneficiary or beneficiaries by similar written designation. A designation, revocation or change of the contingent annuitant under an optional benefit may be made only as provided in Section 5.08. 5.10 Post Retirement Adjustments (a) The benefits payable to Retirants and Pensioners on the effective date of this Ordinance and the benefits commencing in accordance with this Ordinance on or after such date shall be continued without change except as increased in accordance with this Section 5.10 (b) "Improvement Factor" for the purpose of this Section 5.10 means an increase of two and one-half percent (2.5%) per annum in retirement allowances or pensions for each year commencing on October 1 following the completion of 364 days after the commencement date of the retirement allowance or, if applicable to pensions payable as the result of the death of a Member prior to his retirement, one full year after the commencement date of the pension. The Improvement Factor shall be compounded, and shall be applied to the retirement allowance or pension payable as the result of the retirement, termination or death of a Member, whichever is applicable. (c) The Improvement Factor shall be applied automatically as of each October 1, with respect to retirement allowances payable for more than one year as of such time. (d) 1. Upon the death of a Retirant, the pension payable thereafter to his dependent beneficiary shall be based on the retirement allowance payable as of the date of such death, including the benefit improvements granted in accordance with this Section 5.09, and on each October 1 subsequent to such death the Improvement Factor shall be applied to the then-current retirement allowance. 5.11 Return to Active Service (a) If a former Member who is entitled to a vested retirement allowance not yet payable returns to service with the City as an Employee before such allowance has become payable, he shall again become a Member, but benefits payable with respect to earnings and creditable service after the Member's reemployment shall be based on the provisions applicable to a Member whose employment with the City commences on the date of reemployment. He shall contribute to the Plan at the rate required, pursuant to Section 6.02, of Employees who become Members for the first time. Creditable service rendered before and after the Member's return to service shall be considered for the purpose of determining the benefit payable; -26- - provided, in the event of the Member's subsequent termination of employment for reasons other than death or retirement, only creditable service rendered after reemployment shall be considered for the purpose of determining entitlement to a vested retirement benefit based on service rendered after reemployment. Upon subsequent retirement, the Member's retirement benefit shall be equal to the sum of the amounts computed on the basis of final average monthly earnings and creditable service with respect to each period of service as an Employee; provided that the retirement allowance shall not exceed the retirement allowance which would have been payable if creditable service had been one period of continuous service. (b) Should a Retirant, other than a disability Retirant restored to service in accordance with Section 5.04(g), be employed by the City as an Employee, such Member's retirement benefit shall cease and the Member shall again become a Member of the Plan, but benefits payable with respect to the Member's earnings and creditable service after reemployment shall be based on the provisions applicable to a Member whose employment with the city commences on the date of reemployment. The Member shall contribute at the rate required, pursuant to Section 6.02, of Employees who become Members for the first time. An amount equal to the excess, if any, of the Member's Accumulated Employee Contributions at the time of his retirement over the amount of retirement benefits received shall be credited as Accumulated Employee Contributions as of the date of reemployment. Creditable service rendered before and after reemployment shall be considered for the purpose of determining entitlement to a normal or early service retirement allowance upon subsequent retirement. Upon subsequent retirement, the Member's retirement allowance shall be equal to the sum of the retirement allowance payable during the previous retirement, adjusted actuarially, if reemployment is prior to the normal retirement date, for the period from the date of reemployment to the date of subsequent retirement or normal retirement date, whichever occurs first, plus the amount computed as a retirement allowance on the basis of final average monthly earnings and creditable service for the period after the last date of reemployment; provided that the total retirement benefit shall not exceed the retirement allowance which would have been payable if all years of creditable service had been a continuous period. If an option had been elected and in effect at the time of reemployment, the option shall continue to be in effect after reemployment, with respect to the retirement benefit payable prior to reemployment. (c) The return of a disability Retirant to employment with the City prior to the normal retirement date in accordance with Section 5.04(g) shall be governed by said Section 5.04(g). Return of such a person to employment with the City after the normal retirement date, as defined in Section 5.04, or after the date as of which he ceased to be entitled to a disability -27- - retirement allowance pursuant to Section 5.04(h) shall be governed by the provisions of Paragraph (a) or (b) of this Section 5.11, whichever is applicable at the time of such return. (d) Should a Pensioner be employed by the City in any capacity for which regular compensation is paid, the Pension shall cease to be paid to said Pensioner for the period of such employment, and such person shall be subject to the provisions of this Ordinance as any other person employed by the City. Upon termination of such employment, such person shall elect to receive either the benefit to which he was previously entitled as a Pensioner if still eligible therefore or the benefit, if any, to which he is otherwise entitled on the basis of his membership in this Plan. 5.12 Early Retirement Incentive Program Effective upon the effective date of this Ordinance, a voluntary early retirement incentive program is established for members of the Classified System who became members of this Plan on the effective date of this Ordinance, who are in classifications within the CW A bargaining unit and who entered the service of the City prior to February 21, 1994. Such Members who are at least 48 years of age or who will attain age 48 within 90 ninety days following the effective date of this Ordinance may elect to retire on or after the effective date of this Ordinance and before the expiration of ninety (90) days following such effective date, by submitting an irrevocable election in writing to the City prior to such effective date. The amount of the retirement benefit payable to Members so electing shall be equal to the pension benefit accrued by such Member at the time of retirement, with no reduction for early retirement. The early retirement incentive program provided in this Section 5.12 shall apply to Members in classifications within the AFSCME and GSA bargaining units upon ratification of a collective bargaining agreement that provides for such program. ARTICLE 6. Financino 6.01 Assets of Predecessor System (a) All moneys, investments and assets of the Classified System and Unclassified System as of the effective date of this Ordinance shall become assets of this Plan as of such date. (b) The amount credited to each member of the Classified System and Unclassified System as "Accumulated Employee Contributions" as of the effective date of this Ordinance shall be credited to each such Member under this Plan on such date as Accumulated Employee Contributions. -28- 6.02 Contributions by Members (a) Each Member shall contribute to the Plan eight percent (8%) of earnings, except as otherwise provided in this Section 6.02. The contributions made by each Member to the Plan shall be deducted from the Member's Earnings and designated as Employer contributions pursuant to section 414(h) of the Internal Revenue Code. Such designation is contingent upon the contributions being excluded from the Members' gross income for Federal Income Tax purposes. For all other purposes of the Plan, such contributions shall be considered to be Member contributions. (b) Notwithstanding subsection (a) above, all persons entering service with the City prior to April 1, 1993 who are in the classifications within the AFSCME bargaining unit; and all persons entering service with the City prior to February 21, 1994 who are in classifications within the CWA (MBEBA) bargaining unit, shall contribute to the Plan ten percent (10%) of their earnings throughout their service as a Member of this Plan. (c) Notwithstanding subsection (a), above, Members of the Unclassified System who entered service with the City prior to October 18, 1992, were continuously members of the Unclassified System form that date until the effective date of this Ordinance, and who became Members of this Plan on the effective date of this Ordinance shall contribute to the Plan ten percent (10%) of their earnings. (d) Notwithstanding subsection (a), above, Members who are in classifications within the CWA bargaining unit, members of the Classified System who became Members of this Plan on the effective date of this Ordinance and are not in any bargaining unit, and members of the Unclassified System who became Members of this Plan on the effective date of this Ordinance, who accrue the maximum retirement benefit payable under the Plan and continue in City employment, shall contribute to the Plan an amount equal to the applicable percentage contribution in accordance with subsections (a), (b) and (c), above, but such percentage shall be applied only to the amount of earnings in excess of such Members' rate of earnings at the time the member accrued the maximum retirement benefit payable under the Plan. For example, if a Member with earnings of $2,000 each pay period attains the maximum benefit percentage payable under the plan (80% or 90%, depending on which cap applies to the member), the employee contribution will cease until the member has earnings in excess of $2,000, at which time the Employee contribution would be 10% (or 8%, depending on the contribution rate that is applicable) of the excess over $2,000. If the member's earnings increase to $2,500 per pay period, the Member would contribute $50.00 (at the 10% contribution rate) each pay period. The limitation on member contributions provided in this subsection shall -29- - apply to Members in classifications within the AFSCME and GSA bargaining units upon ratification of a collective bargaining agreement that provides for such limitation. 6.03 Contributions by City (a) It is the intent of this Ordinance that the City contribute to the Plan each year the amounts actuarially determined to be required, in addition to contributions by Members, to cover the cost of the benefits provided by the Plan. All administrative expenses shall be paid by the Plan. (b) An actuarial valuation investigation of the Plan shall be performed annually to determine the contribution payable by the City. On the basis of regular interest and of such mortality and service tables as shall be adopted by the Board of Trustees, the actuary shall determine, immediately after making each valuation, the percentage of the compensation of all Members required, in addition to contributions payable by such Members, as contributions payable by the City to provide the benefits of the Plan currently accruing to such Members; the rate per centum so determined shall be known as the "Normal Contribution Rate" and the contributions based on this rate shall be known as "Normal Contributions." In addition, the actuary shall determine the part of the liabilities for benefits under the Plan not covered by assets in hand, future contributions of Members and future normal contributions of the City and this amount shall be known as the "Unfunded Accrued Liability"; the percentage of compensation of Members determined to be payable on account of such liability shall be known as the "Accrued Liability Contributions Rate". Also, the actuary shall determine the percentage of compensation necessary to provide for payment of the administrative expenses of the Plan and this rate shall be known as the "Administrative Cost Rate". The actuary shall recommend on the basis of each valuation a Normal Contribution Rate and an Accrued Liability Contribution Rate and an Administrative Cost Contribution Rate. (c) It is the intention of this Ordinance that contributions be set at such levels, as recommended by the Actuary designated by the Board, as to provide for a systematic amortization of any unfunded accrued liability over a period of thirty (30) years from the date as of which such liability is incurred. 6.04 Contributions by other Agencies The Miami Beach Visitor and Convention Authority, this Plan, the Classified Plan, the Unclassified Plan, and the City Pension Fund for Firemen and Policemen shall contribute to this Plan the same percentage of payroll rate as the City on behalf of employees who become members of this Plan. -30- - ARTICLE 7. Preservation of Benefits Plan 7.01 The Preservation of Benefits Plan adopted in Resolution No. 89-19808 is incorporated herein and revised as set forth in this Article 7. The Preservation of Benefits Plan is established as a qualified governmental excess benefit arrangement pursuant to section 415(m) of the Internal Revenue Code. The Preservation of Benefits Plan is provided for the purpose of providing benefits to a payee (Retirant or Beneficiary) of this Retirement Plan whose benefits would otherwise be limited by section 415(b) of the Internal Revenue Code. 7.02 A payee of the Plan shall participate in the Preservation of Benefits Plan whenever his or her earned benefit under the Plan exceeds the benefit maximum established under section 415(b) of the Internal Revenue Code. Participation in the Preservation of Benefits Plan shall continue for as long as the payee's earned benefit under the Plan is reduced by the application of the maximum benefit limit under section 415(b) of the Internal Revenue Code. 7.03 On and after the effective date of this Ordinance, the City shall pay to each eligible payee of the Plan who retires on or after such date, a supplemental benefit equal to the difference between the amount of the payee's monthly retirement benefit which would have been payable under the Plan if not for a reduction due to the application of section 415(b) of the Internal Revenue Code, and the reduced monthly retirement benefit as paid to the payee. The Preservation of Benefits Plan benefit shall be computed and payable under the same terms and conditions and to the same person as would have applied under the Plan were it not for the reduction resulting from the application of section 415(b) of the Internal Revenue Code. 7.04 The benefits paid under the Preservation of Benefits Plan shall not be subject to execution, garnishment, attachment, or any other process of any court with respect to a payee under the Preservation of Benefits Plan. 7.05 The Preservation of Benefits Plan shall be unfunded within the meaning of the federal tax laws. No payee contributions or deferrals, direct or indirect, by election or otherwise shall be made or allowed under the Preservation of Benefits Plan. 7.06 The Preservation of Benefits plan shall be administered by the City. Benefits due under the Preservation of Benefits plan as determined by the City Finance Director shall be paid timely by the City. The Finance Director may make modifications to the benefits payable under the preservation of benefits plan as may be necessary to maintain compliance with section 415(m) -31- - and other relevant sections of the Internal Revenue Code. The Board of Trustees shall furnish to the City all records necessary for the administration of the Preservation of Benefits Plan, including, but not limited to, the making of requisite calculations and disbursements under the Preservation of Benefits Plan. ARTICLE 8. BOARD OF TRUSTEES 8.01 The Plan created by this Ordinance shall be construed as a trust and shall be administered by a Board of Trustees. The Board shall have the general responsibility for the proper operation and management of the Plan and for making effective the provisions of this Ordinance. 8.02 The Board shall consist of nine (9) persons, each of whom shall be designated as a trustee, as follows: (a) Three Members of the Plan elected by Employees who are Members of the Plan; (b) Two (2) Retirants elected by the retired Members of the Plan; and (c) Four persons appointed by the City Manager; 8.03 The elected members of the Board of Trustees of the Classified System shall continue to serve as the elected Trustees of this Plan for the remainder of their terms. The City Manager may reappoint some or all of the Trustees who were appointed to serve as Trustees of the Classified System, or may appoint new Trustees to serve as appointed Trustees of this Plan. Elected Trustees shall serve for three (3) year terms and the rules governing their election shall be as prescribed by the Board. Appointed Trustees shall serve at the pleasure of the City Manager. 8.04 Each trustee shall take an oath of office within ten (10) days after his election or appointment. A trustee shall serve without compensation but shall be reimbursed for any expenses incurred as the result of service as a trustee. 8.05 The Board shall annually elect from its membership a Chairman and a Vice Chairman and shall elect a Secretary from among the City Manager's appointees. Each trustee shall be entitled to one (1) vote, and five (5) concurring votes shall be necessary for a decision by the trustees at any meeting of the Board. 8.06 The Board shall have, in addition to all other powers and duties arising out of this Ordinance not otherwise specifically reserved or delegated to others, the following specific powers and duties: -32- (a) Hold regular meetings at least quarterly in each year and special meetings at such time as a majority of the Board or the Chairman may deem necessary. (b) Establish rules and regulations to implement the provisions of this Ordinance, and formulate policy for the proper administration of the Plan and the transaction of its business. (c) Consider and pass on all applications for retirement and other benefits, authorize the granting of all retirement allowances, pensions and lump sum settlements, and suspend any payment or payments, all in accordance with the provisions of this Ordinance. (d) Adopt from time to time service and mortality tables and the rate of regular interest for use in actuarial calculations in connection with the Plan. (e) Submit to the City Manager on or before July 1 of each year an estimate of the amount of appropriation required for the purpose of the Plan for the following fiscal year. Any expenditure of the Board in excess of the amounts appropriated by the City in any budget category must be approved in advance by the City Manager and City Commission. (f) Employment of such actuarial, legal or investment counselor specialized technical assistance as may be required for the efficient operation of the Plan. (g) Maintain accounts and records showing the fiscal transactions of the Plan and keep in convenient form such data as may be necessary for the actuarial valuations of the Plan; require from each person covered under the Plan such information as shall be necessary for the proper operation of the Plan; require the maintenance of adequate accounting records which shall at all times reflect the financial condition of the Plan. (h) Provide for the receipt of all payments made to the Plan and records thereof, and cause them to be deposited immediately with the custodian of the fund. (i) Keep a permanent record of all proceedings of the Board which shall be tape recorded and available for examination by any Member, Retirant or Pensioner, or by any Officer of the City. 0) Designate for specified periods, or as occasion may require, three (3) physicians who are not eligible for membership in the Plan as Physical Examiners; such Physical Examiners shall arrange for, and conduct, all physical and mental examinations required under this Ordinance, shall investigate all essential statements and certificates in connection with applications for disability retirement, and shall report in writing to the Board their conclusions and recommendations upon all matters referred to them. (k) Be the legal custodian of all cash and securities of the Plan, invest and reinvest all cash not required to meet current disbursements in securities; and subject to the -33- - limitations of this Ordinance, the Board shall have full power to hold, purchase, sell, assign, transfer and dispose of any of the securities and investments as well as the proceeds of such investments. (I) Provide for certification on its behalf of all warrants issued in accordance with actions of the Board authorizing payments for benefits, expenses and investments out of funds belonging to the Plan, and provide for certification on its behalf of all amounts required by the Plan to be levied as taxes by the City. (m) Cause a general investigation to be made by a Consulting Actuary, at least once every three (3) years, and cause recommendations to be furnished as a result of such investigation as to the actuarial tables and rates of contributions to be used. (n) Cause an audit of the affairs of the Plan to be made annually, with interim quarterly reports by an independent Certified Public Accountant, and submit a copy thereof to the City Manager as soon as possible after the end of each fiscal year. (0) Accept any gift, grant or bequest of any money or securities under the terms designated by the grantor, or, if no special purpose or allocation is specified, for credit to the funds of the Plan. (p) Make available to Members, Retirants and Pensioners a financial statement including a summary of the report of the Certified Public Accountant, and issue to each Member, as soon as practicable following the close of each fiscal year, an individual statement showing the Accumulated Employee Contributions standing to his credit. (q) Require the preparation of an annual report as of the close of each fiscal year for submission to the City Commission; said report shall embody, among other things, a financial balance sheet and a statement of receipts and disbursements for the fiscal year, schedules of acquisitions and sales or exchanges of investments, a statement of investments owned at the close of the fiscal year and other pertinent financial and operating data. (r) Establish rules governing the election of the trustees as described in Section 8.02 (b) and (c). (s) May appoint an Administrator of such Pension Plan and fix the terms of employment of such Administrator who shall serve at the pleasure of the Board. ARTICLE 9. Investments 9.01 The assets of the Plan, in excess of the amount required to meet current operations or pension and retirement payments, shall be invested in accordance with the following paragraph. -34- - The trustees shall, in acqUiring, investing, reinvesting, exchanging, retaining, selling and managing property for the benefit of the Plan, exercise the judgment and care under the circumstances then prevailing, which men of prudence, discretion and intelligence exercise in the management of their own affairs, not in regard to speculation but in regard to the permanent disposition of their funds, considering the probable income as well as the probable safety of their capital. Within the limitations of the foregoing standard, a trustee is authorized to acquire and retain every kind of property, real, personal or mixed, and every kind of investment specifically including, but not by way of limitation, bonds, debentures and other corporate obligations, and stocks, preferred or common, which men of prudence, discretion and intelligence acquire or retain for their own account and, within the limitations of the foregoing standard, a trustee may retain property acquired, without limitation as to time and without regard to its suitability for original purchase. 9.02 All investments shall be clearly marked to indicate that they are a part of the assets of the Plan, and to the extent possible they shall be so registered. 9.03 Transactions involving the sale of bonds and simultaneous purchase of other bonds for substantially the same consideration may be treated as exchanges rather than two separate transactions. No adjustments shall be made in investment valuations for ordinary current market price fluctuations, but reserves may be provided for anticipated losses upon redemption as determined by the Board. 9.04 Except as otherwise herein provided, no trustee or employee of the Board shall have any direct interest in the income, gains or profits of any investments made by the Board, nor shall any such person receive any payor emolument for services in connection with any investment. Proof that any such person violated any of these restrictions shall make such person guilty of a misdemeanor or felony, as the case may be, and such person shall be punishable therefor as provided by law. ARTICLE 10 Administration 10.01 Pension Administrator The Pension Administrator shall have responsibility for the administration of the Plan. As such, he will have responsibilities which shall include, but not necessarily be limited to, the duties specified in this Section 10.01. (a) The Pension Administrator shall establish and maintain records on all persons covered under the Plan. -35- ,~ (b) The Pension Administrator shall verify the amounts entered by the Payroll Department as deductions for contributions by Employees to the Plan and shall certify all payrolls on which such deductions are entered. (c) The Pension Administrator shall receive applications for retirement and other benefits, compute retirement allowances, pensions and lump sum settlements, compute and credit interest to individual accounts and make such analyses, computations and other determinations and records as the Board may deem necessary for the efficient operation of the Plan. (d) It shall be the duty of the Pension Administrator to notify the Board of any new Members, withdrawal of Members, applications for retirement and lump sum payments, and such other personnel information as the Board may require. (e) The Pension Administrator shall maintain necessary records to show receipts by payroll deductions, City contributions, donations and investment returns, and to show disbursements for retirement allowances, pensions and lump sum settlements. He shall also keep such other financial records of the moneys and investments of the Plan as the Board deems necessary. (f) All payments from the funds of the Plan shall be made by the Pension Administrator only upon vouchers signed by the Chairman of the Board of Trustees. A duly attested copy of a resolution of the Board bearing on its face the specimen signature of the Pension Administrator shall be filed as authority for making payments upon such vouchers. No voucher shall be drawn unless it shall have been previously authorized by resolution of the Board, except that the Board may, by resolution authorize the Pension Administrator to issue vouchers for refunds of Accumulated Employee Contributions in accordance with Section 5.08 and for minor adjustments in contributions by Employees. (g) For the purpose of meeting current disbursements, cash equal in amount, as nearly as practicable, to the regular demands for the ensuing month shall be kept available in deposit. 10.02 City Attorney (a) The City Attorney shall serve as legal advisor of the Board when do so, and his services on behalf of the Board shall not be compensated requested to additionally. Legal Counsel (b) The Board shall be vested with the authority to retain private legal counsel for representation thereof. -36- - - (c) Counsel retained hereunder shall be subject to the approval of the City Commission. ARTICLE 11 General 11.01 The Assets of the Classified and Unclassified Systems as of the effective date of this Ordinance shall become the assets of this Plan on such date. The assets of the Plan shall be invested as one fund, and no particular person, or group of persons, shall have any right in, or to, any specific security or property, or in or to any item of cash, other than an undivided interest in the whole, as specified in the provisions of this Ordinance. All the funds of the Plan shall be held in trust for use in providing the benefits of the Plan and paying its expenses not paid directly by the City; provided that no part of the corpus or income of the funds shall be used for, or diverted to, purposes other than for the exclusive benefit of members or their beneficiaries under the Plan prior to the satisfaction of all liabilities for benefits with respect to them or for the administrative expenses of the Plan. In case of termination of the Plan, or in the event of the discontinuance of contributions thereunder having the effect of such termination, the rights of all members of the Plan to benefits accrued to the date of such termination or discontinuance, to the extent then funded, shall be nonforfeitable. 11.02 All retirement allowances, pensions, and other benefits payable under the provisions of this Ordinance, and all accumulated credits of Employees in the Plan shall not be assignable. 11.03 Any person who shall knowingly make any false statement, or shall falsify, or permit to be falsified, any record or records of the Plan in any attempt to defraud the Plan shall be guilty of a misdemeanor, and shall be punishable therefor, upon conviction, by a fine of not more than One Thousand Dollars ($1,000.00) or imprisonment for not more than ninety (90) days, or both, in the discretion of the Court. 11.04 No provision of any ordinance, which provides wholly or partly, at the expense of the City, for retirement allowances, pensions, or other benefits for employees of the City, their widows or other dependents, shall apply to persons covered by the Plan established by this Ordinance. 11.05 Any changes in contributions or benefits contained in this Ordinance shall apply prospectively to Members who are employed by the City on the effective date of this Ordinance who retire on or after such effective date, and to Members who enter the service of the City after such effective date. -37- - ARTICLE 12. Rollover Distributions 12.01 Election by Distributee This Article applies to distributions made on or after January 1, 1993. Notwithstanding any provision of this Ordinance to the contrary that would otherwise limit a distributee's election under this Article, a distributee may elect, at the time and in the manner prescribed by the plan administrator, to have any portion of an eligible rollover distribution paid directly to an eligible retirement plan specified by the distributee in a direct rollover. 12.02 Definitions For purposes of this Article, the following definitions shall apply: (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 the 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 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 includible in gross income. (b) Eligible retirement plan: An eligible retirement plan is 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, an annuity plan described in Section 403(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 and which agrees to separately account for amounts transferred into such plan from this Plan, an annuity contract described in section 403(b) of the Internal Revenue Code, or a qualified trust described in section 401 (a) of the Internal revenue Code that provides or accepts the distributee's eligible rollover distribution. However, in the case of an eligible rollover distribution to the surviving spouse or domestic partner, an eligible retirement plan is an individual retirement account or individual retirement annuity. (c) Distributee: A distributee includes an Employee or former Employee. In addition, the Employee's or former Employee's surviving spouse or domestic partner are distributees with regard to the interest of the spouse or domestic partner. -38- - (d) Direct rollover: A direct rollover is a payment by the plan to the eligible retirement plan specified by the distributee. 12.03 Rollovers or Transfers into the Fund. On or after the effective date of this Ordinance, the Plan will accept an eligible rollover distribution or direct transfer of distribution for the purchase of credited service pursuant to Section 4.04 as follows: (a) Transfers, Direct Rollovers or Member Rollover Contributions from Other Plans. 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 Code, from an annuity contract described in section 403(b) of the Code, or from an eligible plan under section 457(b) of the 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. The Plan will also accept legally permissible Member requested transfers from eligible retirement plans. (b) Member Rollover Contributions from 401(a) Plans and IRAs. The plan will accept a member rollover contribution of the portion of a distribution from qualified plan described in section 401 (a) of the Code, or from an individual retirement account or annuity described in section 408(a) or 408(b) of the Code, that is eligible to be rolled over and would otherwise be includible in the member's gross income. ARTICLE 13. Election of Contributions and Benefits by Unclassified Employees Hired Prior to October 18, 1992 13.01 Notwithstanding any other provIsion of this Ordinance, a Member who became a member of the Unclassified System prior to October 18, 1992 and was continuously a member of the Unclassified System from that date until the effective date of this Ordinance, may make a one-time, irrevocable option of contributions and benefits in accordance with this Article 13. Within thirty (30) days following the effective date of this Ordinance, any such Member may elect one of the following options: (a) To retain all contributions, rights and benefits provided to members of the Unclassified System who became members of the Unclassified System prior to October 18, 1992 and were continuously members of the Unclassified System from that date until the effective date of this Ordinance, in accordance with the provisions of the Unclassified System -39- - - in effect on the day before the effective date of this Ordinance; (b) To obtain the contributions, rights and benefits otherwise provided in this Ordinance to members of the Unclassified System who became members of the Unclassified System prior to October 18, 1992 and were continuously members of the Unclassified System from that date until the effective date of this Ordinance; or (c) To obtain the contributions, rights and benefits otherwise provided in this Ordinance to members of the Unclassified System who became members of the Unclassified System after October 18, 1992, and who became Members of this Plan on the effective date of this Ordinance. 13.02 In the event a Member who is eligible to make an election pursuant to this Article 13 does not make such an election within thirty (30) days following the effective date of this Ordinance, the contributions, rights and benefits otherwise provided in this Ordinance to members of the Unclassified System who became members of the Unclassified System prior to October 18, 1992 and were continuously members of the Unclassified System from that date until the effective date of this Ordinance, shall apply to such Member. ARTICLE 14. APPLICATION TO MEMBERS OF THE CWA BARGAINING UNIT WHO TERMINATE CITY EMPLOYMENT FOLLOWING RATIFICATION OF THE 2003-2006 COLLECTIVE BARGAINING AGREEMENT AND BEFORE THE EFFECTIVE DATE OF THIS ORDINANCE All provisions of this plan that are applicable to employees in classifications within the CWA bargaining unit shall apply to such employees who are employed on the date the 2003-2006 collective bargaining agreement between the City and the CWA is ratified by the CWA bargaining unit and who terminate City employment after that date, but prior to the effective date of this ordinance, under the following conditions: a) On or after February 1, 2006, the employee must submit a letter of resignationlretirement to their respective Department Head and the City Labor Relations Director providing a minimum of two (2) weeks notice, (Le., the employee will agree to work a minimum of ten (10) additional working days (not including sick or annual leave time); and b) The employee will leave any accrued sick or annual leave time with the City until they exercise any retirement options contained in this ordinance; and c) Following the second reading of the this ordinance, the employee will have a period not -40- -, to exceed twenty (20) days to submit all changes and any required monetary payments for the buyback and/or 401A conversion to the Pension Office. d) In the event that the election and/or full payment is not made within the specified twenty (20) day time frame, there will no changes made to the pension for that employee, and any accrued sick or annual leave shall be paid to the employee. ARTICLE 15. CONFLICTS AND SEVERABILITY 15.01 All Ordinances, and parts of ordinances, in conflict herewith shall be and the same, are hereby repealed. 15.02 In the event any article, section, paragraph, sentence, clause, or phrase of this Ordinance shall be adjudicated invalid or unconstitutional, such adjudication shall in no manner affect the other articles, sections, paragraphs, sentences, clauses or phrases of this Ordinance, which shall be and remain in full force and effect as fully as if the item so adjudged invalid or unconstitutional was not originally a part hereof. PASSED and ADOPTED by the City Com ----8.th day of March ,2006. the City of Miami Beach this " ~(Ptu~ David Dermer APPROVED AS TO FORM & LANGUAGE & FOR EXECUTION City Clerk - Robert Parcher (Seal) ~ '+~-Oh City Attorney Date -41- COMMISSION ITEM SUMMARY Condensed Title: Ordinance merging the retirement system for general employees of the City with the retirement system for unclassified employees of the City, thereby creating the Miami Beach Employees' Retirement Plan; implementing provisions of the 2003-2006 collective bargaining agreement between the City and the CW A; and amending provisions of the retirement plan applicable to non-bargaining unit and unclassified employees. Ke Intended Outcome Su orted: Attract and maintain a quality workforce. Issue: Should the City adopt this ordinance that will merge the retirement system for the general employees of the City with the retirement system for unclassified employees of the City, creating the Miami Beach Emplovees' Retirement Plan? Item Summary/Recommendation: This ordinance merges the retirement system for general employees of the City of Miami Beach with the retirement system for unclassified employees of the City of Miami Beach, thereby creating the Miami Beach Employees' Retirement Plan; implements provisions of the 2003-2006 collective bargaining agreement between the City and the CW A; amends provisions of the retirement plan applicable to non- bargaining unit and unclassified employees; the changes may later apply to employees who are represented by the AFSCME and GSA bargaining units, conditioned upon the subsequent ratification by those units of an agreement reached via the collective bargaining process. Advisory Board Recommendation: I N/A Financial Information: Source of Funds: D OSPI Financial Impact Summary: Ci Clerk's Office Le islative Trackin Office of Labor Relations m ..., MIA I BEACH AGENDA ITEM R5/~ DATE 3-~-O~ lD MIAMI BEACH City of Miami Beach, 1700 Convention Center Drive, Miami Beach, Florida 33139, www,miamibeachA,gov TO: FROM: DATE: SUBJECT: COMMISSION MEMORANDUM Mayor David Dermer and Members of the City Commission Jorge M. Gonzalez, City Manager ~'...J.. / March 8, 2006 or D AN ORDINANCE OF THE MAYOR A D CITY COMMISSION OF THE CITY OF MIAMI BEACH, FLORIDA, MERGING THE RETIREMENT SYSTEM FOR GENERAL EMPLOYEES OF THE CITY OF MIAMI BEACH WITH THE RETIREMENT SYSTEM FOR UNCLASSIFIED EMPLOYEES OF THE CITY OF MIAMI BEACH, THEREBY CREATING THE MIAMI BEACH EMPLOYEES' RETIREMENT PLAN; IMPLEMENTING PROVISIONS OF THE 2003-2006 COLLECTIVE BARGAINING AGREEMENT BETWEEN THE CITY AND THE COMMUNICATIONS WORKERS OF AMERICA; AMENDING PROVISIONS OF THE RETIREMENT PLAN APPLICABLE TO NON-BARGAINING UNIT AND UNCLASSIFIED EMPLOYEES; THE CHANGES WILL LATER APPLY TO MEMBERS OF THE AMERICAN FEDERATION OF COUNTY STATE AND MUNICIPAL EMPLOYEES (AFSCME) AND GOVERNMENT SUPERVISORS ASSOCIATION (GSA) BARGAINING UNITS SUBJECT TO THE COLLECTIVE BARGAINING PROCESS AND UPON RATIFICATION OF AN AGREEMENT BY THOSE UNITS; PROVIDING FOR SEVERABILITY; REPEALING ALL ORDINANCES IN CONFLICT THEREWITH; AND PROVIDING AN EFFECTIVE DATE. ADMINISTRATION RECOMMENDATION: Adopt the Ordinance on the second and final reading. DISCUSSION DURING THE FIRST READING - FEBRUARY 8. 2006 During the first reading of this ordinance, the City Commission made and passed a motion to change the multiplier for appointed and elected officials from 4% to 3%. This change has been reflected in the final ordinance. The Commission also agreed to have further discussion on this matter, during the second reading. In addition, the Commission suggested that employees who administer the general and unclassified pension systems, employees who administer the Police and Fire pension system and employees of the Visitor and Convention Authority (VCA) be allowed to participate in the City's pension system. Therefore, language has been added to the ordinance that will allow these employees to participate in the City's pension system, providing it is determined to be legal and further providing that the City plan will accept rollovers and direct transfers from their 401 plans if those plans permit such transfers. BACKGROUND: In the early 1990s, the City of Miami Beach enacted a series of changes to the then existing pension systems, affecting both the sworn and civilian employees. These changes essentially resulted in a two-tier system of benefits. Years later, further changes were made to the Police and Fire pension systems, which fundamentally reinstated most of the pension reductions made in the early 1990s for Police and Fire personnel. Since that time, the topic of pension and the disparity of benefit levels among various employees in the City has, from time to time, become a very heated and sometimes fractious topic. Recently, there has been a convergence of issues that, once again, brought the topic of pensions to the forefront. This convergence has resulted in the present proposal to make targeted enhancements to the pension system for employees in order to create a unified and more equitable system for all employees. The issues that have helped bring this topic to its present proposal are as follows and are more fully detailed below: 1. Unclassified employees request an enhancement to Retiree Cost of Living Adjustment (COLA) provision; 2. Richard McKinnon et al vs. City of Miami Beach pension lawsuit 3. Communication Workers of America (CWA) Collective Bargaining Process and Subsequent Impasse Proceedings 1. Unclassified emplovees request an enhancement to Retiree Cost of Livinq Adiustment (COLA) provision Last year, an item was placed on the agenda to consider an increase to the unclassified retiree COLA. The request was to increase the COLA amount for the Unclassified Pension System to the same level as the Classified Pension System from 1.5% compounded for Tier A employees and 1.5% simple for Tier B employees to 2.5% compounded for all City employees. During the September 19, 2005 Commission meeting, the City Manager suggested that the one particular item on the agenda for the retiree COLA was only a small part of the overall review of our pension system that was already in progress. Additionally, the City was also in the midst of collective bargaining with the CWA bargaining unit, which was also proposing several pension reform changes. The Administration pointed out that since there are a total of five City collective bargaining units, any changes made to anyone of these units, could potentially prompt requests from any of the other bargaining units. The enhancements as proposed by the CW A at that time were estimated to cost the City approximately $3.1 million dollars for the CW A membership alone, and $7.9 million dollars if extended to all civilian City employees each year. The City Commission directed the Administration to complete its holistic review of the City's pension system. Until such time as the City-wide review was completed, the item was deferred from consideration. 2. McKinnon et. al vs. City of Miami Beach pension lawsuit Filed in 2001, this class action lawsuit sought to have the ordinances that increased the employee pension contributions from 8% to 10% declared invalid. This would have reduced the employee contribution back to 8%. The lawsuit further demanded that all employee pension contributions in excess of 8% that have been made since 1997 be refunded. The class action was composed of all participants in the General Employees Retirement System who were making a contribution of 10%. On November 22, 2005, the McKinnon et al vs. City of Miami Beach pension lawsuit was argued before the court for a second time. After hearing arguments from all parties, Judge Gisselle Cardone Ely ruled orally in favor of the 2 City and also ruled that the lawsuit was barred by the statute of limitations and that all members of the class whose positions were covered by bargaining units could not now challenge the 10 percent contribution rate to which they had agreed through their respective unions. Therefore, the City prevailed in this lawsuit. On December 21, 2005, Judge Ely entered a final order granting the City's motion for summary judgment. 3. CW A Collective BarQainina Process and Subsequent Impasse Proceedinas On June 26, 2003, the Administration and the CWA held the first session to collectively bargain a new labor contract. Both sides proposed significant changes to the existing contract. The Administration attempted throughout the course of negotiations to limit each side to focus on a "short list" (a manageable number of proposals). Twelve collective bargaining sessions were held and numerous proposals were made in an attempt to negotiate a mutually agreeable contract but at each subsequent meeting, the parties remained apart on several issues. Based on the length of time that had passed, and the inability of the parties to agree on the proposals, the Administration felt that a declaration of impasse was the only option left. In order to bring resolution to the contract, (which had expired on September 30,2003) and after consulting with the City Commission, on November 10, 2004, in accordance with the procedures defined in the Florida Statutes, the Administration sent a letter to the CWA President and the Public Employees Relations Commission (PERC) declaring an impasse. After the declaration of impasse and during the next several months, the parties attempted to mediate a contract through the use of a Special Magistrate. Although the Special Magistrate made several recommendations to the parties, the Administration felt that the majority of these recommendations disregarded the overall interest of the City. Therefore, according to the statutory impasse procedures, the disputed items were to be decided upon by the City Commission at a public hearing, which was scheduled for August 1, 2005. During the impasse hearing on August 1, 2005, both the CWA and the Administration presented and explained their recommendations on the various disputed items to the Mayor and City Commission. At the conclusion of the impasse hearing, the City Commission recommended that the following three main impasse items: (1) wages, (2) pension and (3) health insurance, be referred to the September 14, 2005 Finance and Citywide Projects Committee for their review and further recommendations. REVIEW OF PENSION SYSTEMS Currently, the City has six different pension systems. They include the (1) Police and Fire pension plan, (2) Tier A Classified Pension Plan, (3) Tier B Classified Pension Plan, (4) Tier A Unclassified Pension Plan, (5) Tier B Unclassified Pension Plan and (6) 401A plan. Participation in these plans depends on the date an employee was hired, the classification the employee was hired into and the election of benefit they made when they were hired. The pension plans (Police and Fire pension plan, Tier A Classified Pension Plan, Tier B Classified Pension Plan, Tier A Unclassified Pension Plan and Tier B Unclassified Pension Plan) are considered defined benefit plans and the 401A plan is considered a defined contribution plan. A key element of the various City retirement systems is the bifurcation which took place in the early 1990s. This bifurcation created two tiers of benefits for general and unclassified employees. Tier A employees are those who were employed by the City prior to the bifurcation date, and generally enjoyed more generous pension benefits. On the other hand, Tier B employees were hired after the bifurcation date and generally have a lower level of benefits. The respective bifurcation dates are as follows: 3 CW A - February 21, 1994 AFSCME - April 30, 1993 GSA - August 1, 1993 Unclassified - October 18, 1992 Others - August 1, 1993 The comprehensive review was completed by the Administration with the goals of (1) being fair to all affected employees, (2) making the pension plans as similar as possible for all affected employees, (3) maintaining fiscal responsibility and (4) benefiting as many employees as possible. At the Finance and Citywide Projects Committee meeting held on October 6, 2005, the Administration presented a thorough review of the City's various retirement plans that affect civilian bargaining units, including the CW A, the American Federation of State, County and Municipal Employees (AFSCME), the Government Supervisors Association (GSA), the non- unionized Classified employees and the Unclassified employees and the varying levels of benefits each group received. The Administration provided detailed information which compared the main benefits, similarities and differences in the five civilian defined benefit plans. It was clear that the Tier A Classified plan contained the most desirable benefits, followed by the Tier A Unclassified plan, then the Tier B classified plan, followed by the Tier B Unclassified plan, and finally the 401A plan contained the least desirable benefits. For example, underthe Tier A Classified and Unclassified Plans, an employee can retire, (start collecting benefits) at age 50, whereas, under both Tier B plans the retirement age is 60. The vesting period under both Tier A plans is five years, whereas, under both Tier B plans, a ten (10) year vesting period is required. Only the Tier A Classified Plan allows an employee to retire with 90% of their pensionable earnings, whereas, the Tier A unclassified plan and both Tier B plans have an 80% maximum earnings payout. The defined contribution 401 A plan simply provides an annual allotment invested by the employee for pension purposes, but provides no guaranteed level of pension benefit upon retirement. Employees in the 401 A plan were requesting an opportunity to fully fund and migrate or move into a defined benefit plan. Exhibit A (attached) is a comparison of the City's five current civilian pension plans. The review included an analysis of our employees, their tenure, their classification and their participation in the various plans. This analysis helped determine the relative impact of each of the enhancements and their projected costs. The breakdown of employees in each of the civilian pension plans are as follows: Classified Unclassified Total % of emDlovees % of employees TierA 24% 18% 23% Tier B/401A 76% 82% 77% Furthermore, of the 225 current members of the classified Tier A pension, 149 employees (or approximately 66%) are currently at retirement age, or will reach retirement age within five years. Consequently, the revisions proposed do not simply raise every employee to the Tier A level. Instead, the proposals provide targeted enhancements that make the plan comparable across employee classes on all but a few pension elements. 4 PROPOSED AMENDMENTS Tier A Classified and Unclassified: The Administration presented a plan which examined all of the different components of each of the five existing civilian pension plans. Not only did Tier A classified employees have the "richest plan," but the plan also contained a benefit which allowed all overtime pay to be included in the employee's pensionable earnings. This benefit could, and has allowed employees to retire with average final earnings that are significantly higher than the base earnings the employee had earned throughout his career. This was clearly not the purpose of a City pension, as a "pension" is designed to replace a similar salary or standard of living the employee was accustomed to. Therefore, part of the proposal was to limit the amount of overtime pay that could be included in pensionable earnings to 10% of the employee's annual pay. The Tier A employees will also receive several enhancements under the Administration's proposed plan, which include the following: . A two-year pension "buy-back" for past service will be available for employees with prior government, military or similar private sector experience (in accordance with section 112.65, Florida State Statutes); . Employees who have reached their maximum pension benefit accrual (90% based on years of service or 80% for unclassified employees) but who have not yet reached retirement age, will continue to contribute to the pension plan, but only for that portion of their salary which is incrementally higher than their salary at the time they reached their maximum pension benefit accrual. . A two-year early out window for those Tier A Classified employees ages 48 and 49, which allows employees to retire early without penalty, but with no benefit reduction for early retirement. . Allow employees the option of a partial lump sum distribution up to 25%; . There will be no negative impact on the pension of a promoted employee. . For Tier A unclassified employees, the Final Average Monthly Earnings (FAME) will be changed from a calculation of the highest year to the average of the two highest years, which is considered a reduction in benefits. . Increase the retiree COLA from 1.5% compounded to 2.5% compounded for the unclassified employees. · Increase the service connected disability from 50% to 60% of FAME for unclassified employees. · Increase the non service connected disability from 25% to 35% of FAME for unclassified employees. Tier 8 Classified and Unclassified: . Reducing the retirement age from 60 to 55. · Reducing the vesting requirement from 10 years to 5 years. · A two-year pension "buy-back" for past service will be available for employees with government, military or similar private sector experience (in accordance with section 112.65, Florida State Statutes). · Improving the Final Average Monthly Earnings (FAME) from a calculation of the average of the three years to the average of the two highest years; · Reducing the employee pension contribution from 10% to 8%. 5 . Allow employees the option of a partial lump sum distribution up to 25%. . There will be no negative impact on the pension of a promoted employee. . Employees who have reached their maximum pension benefit accrual (80% based on years of service) but who have not yet reached retirement age will continue to contribute to the pension plan, but only for that portion of their salary which is incrementally higher than their salary at the time they reached their maximum pension benefit accrual. · Increase the retiree COLA from 1.5% simple to 2.5% compounded for the unclassified employees. Allow the 401A employees to migrate into the pension plan. The Administration further proposed that the Unclassified System and Classified System be merged into one retirement system, which would result in administrative and other cost savings to the City. Exhibit B (attached) is an overview of the new pension proposals which highlights the adjustments in benefits for each group. Exhibit C (attached) illustrates the similarities of the newly proposed pension system across all five plans. It should be noted that with only a few exceptions, namely the retirement age, accrual rate and cap, and an early retirement incentive program for the Tier A classified employees, the system now has a comparable level of benefits for all civilian employees regardless of classification or tenure with the City. Further, in accordance with federal law, the proposed pension changes will not reduce the accrued benefits of any employee. At the October 6, 2005 Finance and Citywide Projects Committee meeting, the Committee conceptually approved the amendments and directed the Administration to meet with representatives of the CW A and representatives from the other civilian bargaining units (AFSCME and GSA), to study and discuss possible 401A migration methods and related cost estimates (this meeting was held on October 14, 2005). Both the Administration and the CWA agreed upon a method to allow the 401A employees a "window" period to transfer to the defined benefit pension plan. Employees who elect to transfer to the defined benefit plan will be able to use the funds they have accumulated in the 401A plans and 457 deferred compensation plans to buy the period of their City employment under the defined benefit plan. Employees will also be able to use their accrued annual vacation and sick leave to buy prior service in the 401A plan or for the buy-back of service (If accrued annual vacation leave is used, it will be valued on a one-for-one basis and If accrued annual sick is used it will be valued on a one-for-two basis). In addition, any use of sick or annual leave for buy back purposes shall be deducted from any final payout of sick or annual leave time at the time of termination, resignation or retirement. The purchase amount is based upon how much the employee and the City would have paid into the pension plan, had the employee joined the pension plan instead of the 401A plan on their first day of employment, plus interest. Appropriate amendments will be made to the City's 401A and 457 deferred compensation plans to permit the transfer of funds to the new retirement plan for the purchase of past service. At the October 19,2005 City Commission meeting, after hearing alternative proposals from CWA representatives, as well as representatives of the AFSCME and GSA unions, the City Commission considered all of the factors and costs and ultimately adopted the recommendation of the Finance and Citywide Projects Committee to merge the retirement plans and implement the other City retirement proposals. The City Commission also urged the CWA to withdraw the McKinnon et. al vs. City of Miami Beach pension lawsuit. On December 7,2005, the City Commission passed a resolution resolving the remaining impasse items between the Administration and the CWA. The recommendation included, among other items, the Administration's recommendation for Citywide pension reform. 6 A summary of the benefit enhancements and other retirement changes are as follows: 1. Two Year "Buy-Back" For Past Service Option - Any member with five or more years of service will be able to purchase up to two years of creditable service under the pension plan earned prior to the employee's date of hire by the City, provided that the employee may not purchase such service credit if the employee has received or will be receiving a pension benefit for the same period of employment under another retirement plan in accordance with state law (section 112.65, Florida State Statutes). Eligible prior service will include military service in the United States armed forces or Coast Guard, full- time employment with another governmental entity, or full-time employment in the private sector performing the same or very similar duties the employee is performing for the City at the time of their election to purchase additional service. Employees electing to purchase such service must pay 10% of his/her annual rate of pensionable earnings multiplied by the number of years and fractions of a year purchased. This benefit will apply to all employees covered by the new retirement plan (subject to future negotiations with AFSCME and GSA). 2. Early Retirement Incentive Plan - An Early Retirement Incentive Plan (ERIP) is provided for Tier A classified employees who are at least 48 years of age or attain age 48 within 90 days of the effective date. The amount of benefit payable to each member at the time of retirement will be equal to the pension benefit accrued by the member with no reduction for early retirement. The amount of the retirement benefit payable to each member who elects to retire under this ERIP is equal to the pension benefit accrued by such member at the time of retirement, but with no reduction for early retirement. (This option is available only to "Tier A" classified employees and only for a ninety (90) day period) This benefit will apply to all employees covered by the new retirement plan (subject to future negotiations or me-too clauses with AFSCME and GSA). 3. Partial Lump Sum Distribution - A member who retires under normal retirement shall be allowed to convert up to 25% of the actuarial value of their pension benefit into a lump sum distribution. For example, if the normal retirement benefit is equal to $2,000 per month, the member may receive $2,000 per month, or the combination of $1 ,500 per month plus a single lump sum equal to the actuarial value of the other $500. This benefit will apply to all employees covered by the new retirement plan (subject to future negotiations with AFSCME and GSA). 4. Reduction in Member Contributions Upon Reaching Pension Cap - The Plan will provide that when a member reaches the applicable pension cap (maximum benefit percentage), their pensionable earnings will be recorded. Thereafter, the member's contribution to the plan will be the applicable contribution rate but applied only to pensionable earnings in excess of the recorded amount. This benefit will apply to all employees covered by the new retirement plan (subject to future negotiations with AFSCME and GSA). 5. 10% Cap on Overtime included in pensionable earnings - For those classified employees whose overtime is currently included in the Final Average Monthly Earnings (FAME) calculation, any overtime included in pensionable earnings received after the effective date will be limited to a maximum of 10% above the employee's highest pensionable compensation each year. This will apply to all employees covered by the new retirement plan (subject to future negotiations with AFSCME and GSA). 6. Final Average Monthly Earning Computation (FAME) - The FAME will be the average of the two highest years. For those employees hired after their respective bifurcation dates, the Final Average Monthly Earnings will be revised from a three year average to a two year average. For those unclassified employees hired prior to October 18, 1992, the Final Average Monthly Earnings will be reduced from a one year average to a two year average, provided that the average for such employees will not be less than the 7 employee's earnings for the 12 months immediately preceding the effective date of the ordinance. This benefit will apply to all employees covered by the new retirement plan (subject to future negotiations with AFSCME and GSA). 7. Contribution Rate Reduction - For those employees hired after their respective bifurcation dates and for those employees currently in the 401A plan who elect to migrate into the pension system, the contribution rate will be changed from 10% to 8% of pensionable earnings, prospectively. For employees electing to remain in the 401A, both the employee and the City contributions will be reduced to 8%. All participants may also elect to participate in an optional, voluntary employee funded 401A plan and/or 457 deferred compensation plan. This benefit will apply to all employees covered by the new retirement plan (subject to future negotiations with AFSCME and GSA). 8. Reduction in Vesting Requirement - The minimum vesting requirement for members of the new post 2005 plans is reduced from 10 years to 5 years. Thus, all employees in the new plan will become fully vested after 5 years of service (subject to future negotiations with AFSCME and GSA). 9. Reduction in Normal Retirement Age - The normal retirement age for members of the new post 2005 plan is reduced from 60 to 55. This benefit will apply to all employees covered by the new retirement plan (subject to future negotiations with AFSCME and GSA). 10. Retirement COLA - The annual cost of living adjustment (COLA) for unclassified employees will be increased to 2.5% (compounded) to reflect the same retirement COLA that previously existed in the classified plans. Thus, all employees in the new plan will have the same COLA benefit (subject to future negotiations with AFSCME and GSA). 11. Service Connected Disability - The benefit for unclassified employees hired prior to October 18, 1992, will be increased from 50% to 60%, which will equalize this benefit for the new post 2005 plan. This benefit will apply to all employees covered by the new retirement plan (subject to future negotiations with AFSCME and GSA). 12. Non Service Connected Disability - The benefit for unclassified employees hired prior to October 18, 1992, will be increased from 25% to 35%, which is the same as the benefit for all other employees. This benefit will apply to all employees covered by the new retirement plan (subject to future negotiations with AFSCME and GSA). 13. No pension impact upon promotions - There will be no negative impact on the pension of a promoted employee. This benefit will apply to all employees covered by the new retirement plan (subject to future negotiations with AFSCME and GSA). 14. One-Time Option for Employees covered by 401 (a) Plans - Employees who elected to participate in the 401A Plans will have a one-time irrevocable option to transfer to the new retirement plan. The cost to convert each employee will be calculated to ensure appropriate costs. This decision shall be irrevocable and must be made within 6 months after the date that the City Commission passes a second reading on the ordinance amending the pension plan to include this option. This benefit will apply to all employees covered by the new retirement plan (subject to future negotiations with AFSCME and GSA). 15. Retiree Health Insurance - For all employees hired after the effective date of the Ordinance, the retire health contribution by the City will be a fixed monthly amount based upon each eligible employee's years of creditable service. (This will be accomplished through a companion ordinance on this agenda). This benefit will apply to all employees covered by the new retirement plan (subject to future negotiations with AFSCME and GSA). The new plan also incorporates and updates the preservation of benefits plan that was previously adopted in Resolution No. 89-19808. The preservation of benefits plan is authorized by the U.S. Internal Revenue Code (IRC), and provides for payment by the City of any benefits that exceed the maximum benefit limits in Section 415 of the IRC. 8 Unclassified employees are not subject to the collective bargaining process. Therefore, the unclassified employees hired prior to October 18, 1992, will be given the following three options: (1) Elect to retain the same contributions, requirements and benefits, currently provided for Tier A members of the unclassified plan; (2) Elect to participate in the pension plan as described on the attached chart under "Tier A", with all contributions, requirements and benefits as provided in the new ordinance for members who joined the unclassified plan prior to January 1, 1992, and remained in the unclassified plan continuously from that date until the effective date of the new plan; or (3) Elect to participate in the new pension plan provided to employees hired after the bifurcation date, as described in the attached chart under "Tier B/40 1 A" with all contributions, requirements and benefits as provided in the new ordinance for members who joined the unclassified plan on or after October 18, 1992. On January 19, 2006, the Administration and the CW A finalized the details of the contract language that would be implemented in the new collective bargaining agreement. The CW A agreed not to appeal the court's decision regarding the McKinnon et. al vs. City of Miami Beach lawsuit and this language was incorporated into the collective bargaining agreement. On February 1,2006, the CWA conducted a ratification vote, which approved the three (3) year collective bargaining agreement and therefore, accepted, among other benefits, the Administration's pension proposals. The ratification vote was approved by 274 (89%) of the employees who voted (a total of 308 voted) and are represented in classifications covered by the CW A collective bargaining agreement. Under authority of Chapter 18691, Laws of Florida, Acts of 1937, as amended, the proposed ordinance will merge the Classified System and the Unclassified System and form the "Miami Beach Employees' Retirement Plan." The new plan contains benefit enhancements that affect elected officials and appointed City officials. These officials now have the option of participating in the Miami Beach Employees' Retirement Plan or electing to participate in an alternate plan. In recognition of the fact that most elected and appointed officials do not have lengthy careers with anyone public entity, many public retirement plans, including the Florida Retirement System (FRS) provide additional benefits for elected officials and appointed managers. The new City retirement plan provides a 4% benefit multiplier for service as an elected official, City Manager or City Attorney, and up to a maximum benefit of 80% of final average earnings. Earnings for such officials include total W-2 compensation plus any other payments, expenses or allowances. The retirement provisions proposed will apply ten days after the second reading of this pension ordinance to members of the CWA bargaining unit, Classified employees who are not in any bargaining unit, Unclassified employees and elected and appointed officials who are employed on the effective date and who retire or terminate City employment thereafter, except as otherwise specifically provided in the ordinance. The changes will be the subject of upcoming negotiations between the Administration and the AFSCME and GSA bargaining units, and thus will not apply to employees represented by those bargaining units until the conclusion of the collective bargaining process with those units. FISCAL IMPACT The City's pension actuary Gabriel, Roeder, Smith and Company has estimated that the cost of the pension enhancements under the proposed merger of the retirement systems for General Employees and the Unclassified Employees is approximately $4.5 million. Approximately half of the increase is due to the cost of allowing employees currently in the 401A Defined contribution plan to migrate to the merged pension plan. The increased cost would be incorporated into the actuarial valuation report for the Fiscal Year ending September 30, 2006 to be programmed as part of the FY 2006/07 operating budget. 9 Administrative and other cost savings of approximately $200,000 are anticipated due to the merging of the two systems. CONCLUSION The Administration recommends adopting the Ordinance on the second and final reading, merging the retirement system for general employees of the City of Miami Beach with the retirement system for unclassified employees of the City of Miami Beach, thereby creating the Miami Beach Employees' Retirement Plan; implementing provisions of the 2003-2006 collective bargaining agreement between the City and the CW A; amending provisions of the retirement plan applicable to non-bargaining unit and unclassified employees; the changes may later apply to employees who are represented by the AFSCME and GSA bargaining units, conditioned upon the subsequent ratification by those units of an agreement reached via the collective bargaining process; providing for severability; repealing all ordinances in conflict therewith; and providing an effective date. 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E Q/ C .QQ/ :J - E E III Q/ I:J.... b+i U Q/ III .... 25 G MIAMIBEACH CITY OF MIAMI BEACH NOTICE OF PUBLIC HEARING g N ,.,; N > "" <( ::> "" '" ~ ,.: <( o Vl "" ::> :J: I- NOTICE IS HEREBY given that public hearings will be held by the Mayor and City Commission of the City of Miami Beach, Florida, in the Commission Chambers, 3rd floor, City Hall, 1700 Convention Center Drive, Miami Beach, Florida, on Wednesday, March 8, 2006, to consider the following: ' -x.. 10:15 a.m. An Ordinance Merging The Retirement System For General Employees Of The City Of Miami Beach With The Retirement System For Unclassified Employees Of The City Of Miami Beach, Thereby Creating The Miami Beach Employees' Retirement Plan; Implementing Provisions Of The 2003-2006 Collective Bargaining Agreement Between The City And The Communications Workers Of America; Amending Provisions Of The Retirement Plan Applicable To Non-Bargaining Unit And Unclassified Employees; The Changes Will Later Apply To Members Of The American Federation Of County State And Municipal Employees (AFSCME) And Government Supervisors Association (GSA) Bargaining Units Subject To The Collective Bargaining Process And Upon Ratification Of An Agreement By Those Units; Providing For Severability; Repealing All Ordinances In Conflict Therewith Inquiries may be directed to the Labor Relations Department at (305) 673-7009. 10:20 a.m, An Ordinance Amending Miami Beach City Code Chapter 78, Article II Thereof, Entitled "Employee Benefit Plans"; ~ending Section 78-81, Entitled "Group Health Insurance," And Section 78-82, Entitled "Health Maintenance Organization," To Require That Employees Make A One-Time Irrevocable Election To Continue Participating In The City Group Health Insurance Or Health Maintenance Organization Program Prior To Termination Of Employment To Be Eligible For Such Continued Participation; Providing That Employees Who Participate In The Defined Contribution Retirement System Must Have Ten Years Of Full-Time City Employment To Be Eligible For Retiree Health Benefits; Providing For Specified City Contributions Toward The Cost Of Retiree Health Coverage For Employees Hired On Or After The Effective Date Of This Ordinance; Providing Certain Exceptions; Repealing All Ordinances In Conflict Therewith, Inquiries may be directed to the Labor Relations Department at (305) 673-7009. 10:25 a.m. An Ordinance Amending Ordinance NO,789, The Classified Employees Salary Ordinance Of The City Of Miami Beach, Florida, Providing For The Group IV Classifications, Those Being The Classifications Covered By The Communications Workers Of America (CWA), Local 3178, In Accordance With The Negotiated Agreement; There Shall Be No Wage Increase For Rscal Year 2003/ 2004; All CWA Bargaining Unit Employees Shall Be Paid, Prior To Any Other Wage Increase, A One-Time Lump Sum Payment Valued At Three Percent (3%) Of The Employee's Base Pay And His/Her Regular Pay Enhancements And The Overtime That The Employee Earned During Fiscal Year 2003/2004 (LE. Based On The Employee's Extended Pay Plus Overtime, But Not To Include Any Sick Time Bonus Or Any Differentials Or Allowances); The Above Payment Shall Not Be Pensionable And Shall Not Increase The Employee's Base Pay, Nor Result In Any Adjustment To The Pay Ranges Contained In The Pay For Performance Plan; Effective In The First Pay Period Ending In October Of 2004, There Shall Be An Across The Board Wage Increase Of Six Percent (6%), And The Minimum And Maximum Of Each Pay Range Will Also Be Increased By Six Percent (6%); The Three Percent (3%) One-Time Lump Sum Payment Referred To Earlier In This Paragraph Shall Not Be Included In The Calculation Of The Six Percent (6%)Cost Of Living Adjustment (COLA); Effective With The First Pay Period Ending In October Of 2005, There Shall Be An Across The Board Wage Increase Of Three And One Half Percent (3,5%), And The Minimum And The Maximum Of Each Pay Range Will Also Be Increased By Three And One Half Percent (3.5%); Amending The Salary Ranges Of The Classifications Specified In The Negollated Agreement; Creating The Classifications Of Field Inspector I, Field Inspector II, .Meter Analyst, Parking Dispatcher, Revenue Processor I And Revenue Processor II; Deleting The Titles Of Coin Room Money Handler, tD. Technician I And to. Technician II; Deleting The Previous Format Of The CWA Section Of The Ordinance And Replacing It With The Current Format Of The Other Sections; Repealing All Ordinances In Conflict, , Inquiries may be directed to the Human Resources Department at (305) 673-7520, i !I! i: :!! . ~ E E " ;; ~ :I 'e << i a 1 10:30 a.m. An Ordinance Amending Chapter 82 Of The City Code, Entitled 'Public Property,' By Amending Article VI Entitled "Naming Of Public Facilities And Establishments Of Monuments And Memorials," By Amending Section 82-501, Entitled "Generally", To Provide That The City Owned Building, Located At 2200 Liberty Avenue, Miami Beach, Florida, And Housing The Administrative Offices And Studio And Teaching Facilities Of The Miami City Ballet, Pursuant To The Lease Agreement Between The City, As Landlord, And Miami City Ballet, Inc. As Tenant, Shall Be Exempt From The Provisions Of Said Article VI, For So Long As Said City- Owned Building Is Leased To Miami City Ballet, Inc" A Not For Profit Corporation, And Used By The Bllllet For The Aforestated Purposes And i In Accordance With The Terms And Conditions Of The Lease Agreement. Inquiries may be directed to the Finance Department at (305) 673-7466, 10:35 a.m. An Ordinance Amending The Land Development Regulations Of The Code Of The City Of Miami Beach, By Amending Chapter 142, "Zoning Districts And Regulations", Article IV, "Supplementary District Regulations", Division 3, "Supplementary Use Regulations," By Adding Section 142-1110, Entitled "Mobile Storage Containers", To RegUlate Storage Containers, Inquiries may be directed to the Planning Department at (305) 673-7550, 10:40 a.m. An Ordinance Amending The Code Of The City Of Miami Beach, Florida, Amending Chapter 82, "Public Property," Article II, "Sale Or Lease Of Public Property," Sections 82-36 Through 89-40, To Expand The Applicability Of The Ordinance To include Vacations Of Easements, Alleys, Rights-Of-Way, Or Any Other Conveyance Or Reduction Of The City's Interest In Real Property; Providing For Inclusion In The Code Of The City Of Miami Beach, Florida, . Inquiries may be directed to the Planning Department at (305) 673-7550, 10:50 a.m, An Ordinance Amending The Land Development Regulations Of The Code Of The City Of Miami Beach, By Amending Chapter 130, "Off Straet Parking", Article III, "Design Standards", To Modify The ReqUirements For Commercial And Residential Uses In Front Of Certain Portions Of A Parking Garage; By Amending Chapter 142, "Zoning Districts And Regulations", Article II, "DIstrict Regulations", By Amending Division 3, "Residential Multifamily Districts", Subdivision II, "RM-l Residential Multifamily Low Intensity", Section 142-156 To Modify The Requirements For New Construction To Require Residential Uses In Front Of Certain Portions Of A Parking Lot Or Pedestal; By Amending Subdivision IV, "RM-2 Residential Multifamily Medium Intensity", Subdivision V, "RM-3 Residential Multifamily High Intensity", Division 4, "CD-l Commercial, Low Intensity District", Division 5, "CD-2 Commercial, Medium Intensity District", Division 6, "CD-3 Commercial, High Intensity District", And Division 13, "MXE Mixed Use Entertainment District", To Add New Sections Specifying Requirements For Residential Uses Or Commercial Space In Front Of Certain Portions Of A Parking Lot Or Pedestal; By Amending Division 18, "Performance Standard District", Section 142-695, To Add New Requirements For Residential Uses Or Commercial Space In Front Of Certain Portions Of A Parking Lot Or PedestaL Inquiries may be directed to the Planning Department at (305) 673-7550. J INTERESTED PARTIES are Invited to appear at this meeting, or be represented by an agent, or to express their views in writing addressed to the City Commission, clo the City Clerk, 1700 Convention Center Drive, 1 st Floor, City Hall, Miami Beach, Florida 33139- Copies of these ordinances are available for public inspection during normal business hours in the City Clerk's Office, 1700 Convention Center Drive, 1 st Floor, City Hall, and Miami Beach, Florida 33139, This meeting may be continued and under such circumstances additional legal notice would not be provided, Robert E, Parcher, City Clerk City of Miami Beach Pursuant to Section 286,0105, Fla, Stat, the City hereby advises the public that: if a person decides to appeal any decision made by the City Commission with respect to any matter considered at its meeting or its hearing, such person must ensure that a verballm record of the proceedings is made, which record Includes the testimony and evidence upon which the appeal Is to be based. This notice does not constitute consent by the City for the introduction or admission of otherwise inadmissible or irrelevant evidence, nor does it authorize challenges or appeals not otherwise allowed by law, ----.---~....:--.... ......:...... ........ rln"IU"Dn+ nr n-orti,.ln!;;llto In