Ordinance 93-2850ORDINANCE NO. 93-2850
AN ORDINANCE AMENDING ORDINANCE 89-2640, WHICH
CREATED THE CITY SUPPLEMENTAL PENSION FUND FOR
FIREMEN AND POLICEMEN IN THE CITY OF MIAMI
BEACH, FLORIDA; PROVIDING 1) REPLACING ALL
REFERENCES TO FIREMEN AND POLICEMEN WITH
FIREFIGHTERS AND POLICE OFFICERS,
RESPECTIVELY; 2) CHANGING THE INVESTMENT
POLICY TO THE PRUDENT PERSON RULE; 3) REDUCING
PENSION BENEFITS FOR ALL NEW MEMBERS EMPLOYED
AFTER MAY 19, 1993; 4) REDUCING THE USE OF
OVERTIME FOR CALCULATING PENSION BENEFITS FOR
CURRENT MEMBERS TO 70% OF THE CURRENT LIMIT;
AND 4) OFFERING TWO OPTION PERIODS FOR EARLY
RETIREMENT INCENTIVES; PROVIDING FOR
SEVERABILITY; REPEALING ALL ORDINANCES IN
CONFLICT THEREWITH; AND PROVIDING FOR AN
EFFECTIVE DATE.
WHEREAS, the City Commission of the City of Miami Beach
adopted Ordinance 89-2640, which created the "Supplemental Pension
Fund for Firemen and Policemen in the City of Miami Beach; and
WHEREAS, the City, through contract negotiations with the
International Association of Firefighters and the Fraternal Order
of Police have negotiated changes affecting this pension fund; and
WHEREAS, it is the desire to replace all references to Firemen
and Policemen with Firefighters and Police Officers, respectively,
so as to make all such references gender neutral; and
WHEREAS, changing the investment policy for the plan's assets
to the "prudent person" rule for investing would assist in
achieving the assumed rate of return; and
WHEREAS, the benefits for future employees (hired after the
effective date of this amendment) would be decreased from that of
the current employees; and
WHEREAS, the utilitzation of overtime for purposes of
calculating pension benefits for current employees will be reduced
to 70% of the current limit; and
WHEREAS, in the effort to reduce the overall cost of pension
benefits and to accelerate the process of employee diversity in the
Police and Fire Departments, the City has offered an incentive for
the early retirement of current employees; and
NOW, THEREFORE, BE IT ORDAINED BY THE CITY COMMISSION OF THE CITY
OF MIAMI BEACH, FLORIDA:
SECTION 1. - That Ordinance 89-2640 (as amended) be amended to read
as follows:
Section 1. Establishment of Supplemental Pension Fund
A special fund shall be created to be known as the City
Supplemental Pension Fund for Firemen Firefighters and Policemen
Police Officers in the City of Miami Beach; said fund to be used
exclusively for the purpose provided for in this Supplemental
System, which Fund shall be collected, administered and disbursed
according to the provisions of this Supplemental System.
Section 2. Method of Financing
The Said Supplemental Pension fund shall consist of monies derived
from the following sources:
2.01 On and after the Effective Date, the City shall pay into
the fund of the Supplemental System with respect to each fiscal
year such amount as is actuarially determined to be required under
this Plan, in addition to the personal contributions of members,
computed on an interest rates as determined from time to time by
the Board of Trustees. Any forfeitures arising under this
Supplemental System shall be used to reduce the contributions of
the City otherwise payable.
2.02 All computations of liability in connection with the
Supplemental System created hereby shall be based on such tables
and rates approved by the Board of Trustees. The actuary for the
Base System shall be the Actuary for the Supplemental System. The
Actuary for the Supplemental System shall recommend such tables and
rates for adoption by the board. On the basis of such tables and
rates, the Actuary for the Supplemental System shall determine the
amounts required to be paid into the Supplemental System by the
City, as provided for in Section 2.01.
2.03 There shall be a complete actuarial evaluation prepared
by the Actuary at least every three (3) years, and the City shall
make such adjustments in its contributions as shall be shown to be
required by such actuarial evaluation. The money required to meet
all the obligations of this Supplemental System, over and above the
personal contributions forthcoming from the members, is a liability
and obligation of the City of Miami Beach. The expenses of the
Supplemental System shall not be separately budgeted so long as
that method is permitted by law. Therefore, the City Commission of
the City of Miami Beach may levy annually, in the manner provided
by Law, upon all taxable property within said City, such millage on
the assessed valuation thereof as is necessary to produce the
amounts required hereby to be contributed by said City to this
Supplemental System.
Nothing in this Supplemental System shall be construed to prevent
the City Administration from appropriating monies from the General
Fund or from any Special Funds of the City, for the purpose of
creating or adding to the Pension Fund created under this
Supplemental System, and the City shall have the right to
appropriate monies from the General Fund or any special Fund of the
City in addition to a millage. And furthermore, the City shall
have the right and power to designate other sources of revenue for
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the Pension Fund created by this Supplemental System, including the
designating of certain fines and forfeitures for violation of the
City Ordinances to be paid to this Fund instead of the general
revenue of said City.
No monies raised by taxation or otherwise provided for in the
Pension Fund created under this Supplemental System shall be used
other than for the purpose of this Supplemental System.
2.04 Except as hereinafter provided, commencing with the first
payroll period beginning on or after the Effective Date, every
member shall contribute an amount equal to ten (10%) percent of his
salary or wages reduced by the amount of salary or wages he is
contributing under the Base System, and shall be entitled to
receive the benefits of this Supplemental System. On and after the
Effective Date, the City shall, solely for the purpose of
compliance with Section 414(h) of the Internal Revenue Code, pick
up the member contributions required to be made under this
Supplemental System by employees on salary or wages paid with
respect to payroll periods beginning on or after the Effective
Date, and the contributions so picked up shall be treated as
employer contributions in determining tax treatment under the
Internal Revenue Code.
Section 3. Definitions
3.01 The term "employee" shall mean any regular member of the
Police Department or Fire Department who has attained regular Civil
Service Status in such Departments under_• the Official
Classifications of positions in the Classified Service of the City
of Miami Beach, Florida, having a rank in such department other
than Civilian rank and other than the classification of School
Guard. The Chiefs of the Police and Fire Departments who have held
classified positions with the City of Miami Beach shall be
considered employees for the purposes of this Supplemental System.
The Chiefs of the Police and Fire Departments who have never held
classified positions with the City of Miami Beach shall not be
considered employees for purposes of this Supplemental System.
(Ordinance No. 90-2715)
3.02 The terms "Firemen" "Firefighters" and "Policemen"
"Police Officers" shall be synonymous with the term "employee" as
defined above.
3.03 The term "widow" "widow" or "widower" shall mean the
lawfully wedded wife spouse of a member of the Fire or Police
Departments living with the member at the time of his death.
3.04
this Supplemental System, thc term usalary or wages" shall mean
calary or wages before reduction for thc picked up member
accordance with Sectiorc 12-5 er 457 of thc Internal Revenue Codc.
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For the purpose of determining member contributions under this
Supplemental System, with respect to members who were employed by
the City prior to May 19, 1993, the term "salary or wages" shall
mean salary or wages before reduction for the picked -up member
contributions and before reduction for any amounts contributed in
accordance with Sections 125 or 457 of the Internal Revenue Code.
Solely with respect to members employed by the City on or after May
19, 1993 the term "salary or wages" shall refer only to base pay
and longevity pay, excluding any payment of overtime, shift
differential or extra compensation allowance such as uniform
allowance, but determined before reduction for the picked -up member
contributions and before reduction for any amounts contributed in
accordance with Sections 125 or 457 of the Internal Revenue Code.
Furthermore, "salary or wages" taken into account for any purpose
under this Supplemental System, including for purposes of
determining a member's contribution to this Supplemental System
under Section 2.04, shall not exceed $200,000 per year. As of
January 1 of each calendar year beginning on or after January 1,
1990, the foregoing limitation shall be adjusted in such manner as
shall be determined by the Secretary of the Treasury.
3.05 The term "Base System" shall mean the Police and
Firemen's Pension Act, City of Miami Beach, Florida Chapter 23414,
Laws of Florida, Special Acts of 1945, as amended from time to
time.
3.06 The term "Supplemental System" shall mean this Police and
Fircmcn's Firefighters' Supplemental Pension System, as set forth
in this document or as amended from time to time.
3.07 The term "Effective Date" shall mean June 1, 1989 except
that if the City is required to initiate funding prior to October
1, 1989, the Effective Date shall be October 1, 1989.
3.08 The term "Base System Benefit" shall mean the amount of
benefit payable to or on behalf of a member, if any, under the Base
System on account of the member's retirement, death or disability,
as the case may be, under a provision of the Base System.
3.09 The term "physically and/or mentally handicapped child"
shall mean a dependent child of a member having reached the age of
eighteen (18) who is primarily dependent upon the member for the
child's livelihood or support due to a mental or physical condition
or handicap of the adult child which requires, or otherwise would
have required, the member to provide primary support for the adult
child.
3.10 The term "dependent parent" shall mean a parent of a
member for whom a member is entitled, or would have been entitled,
to claim a dependency exemption for Federal income tax reporting
purposes.
The masculine pronoun shall mean the feminine where appropriate,
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and vice versa.
Section 4. Membership
4.01 Any employee of the City who is an employee as herein
defined on the Effective Date or who becomes an employee as defined
herein after the Effective Date shall automatically be a member of
this System. However, any member may irrevocably elect, in writing
and prior to January 1, 1990 or prior to retirement, if earlier, to
waive his membership in this Supplemental System and, in such
event, he shall not become a member hereunder, shall not make
contributions hereunder, and shall not be entitled to any benefits
hereunder.
4.02 A member who retired from the Base System on or after
January 1, 1989 and prior to the Effective Date shall become a
member of this Supplemental System on the Effective Date and have
his pension recalculated to reflect the provisions of Section
7.01(B) and (C) with respect to payments due and owing on and after
the Effective Date; provided, however, that such member may
irrevocably elect in writing prior to the Effective Date to waive
his membership in this System, in which event he shall not become
a member hereunder, and shall not be entitled to any benefits
hereunder. A member who retired from the Base System on or after
January 1, 1989 and prior to the Effective Date and who has at
least twenty (20) years of creditable service and who is entitled
to receive benefits under the Supplemental System may contribute an
additional amount to the Supplemental System on or after the
Effective Date but no later than January 1, 1990 in order to
receive service credit for his years of active military service in
the U.S. Army, Navy, Air Force, Marines or Coast Guard occurring
prior to his date of employment with the City. A member may
purchase up to four (4) years of such service. The price for each
such year shall be ten (10%) per cent of the aggregate of his
salary or wages during the twelve (12) calendar months immediately
preceding the date of his retirement and such price shall be
prorated accordingly if a member's election includes a fractional
year of service. Any additional benefit attributable to military
service purchased under this Section 4.02 shall be determined in
accordance with the three (3%) per cent rate as described in
Section 7.01(B) (1). (Ordinance No. 89-2652)
4.03 Whenever a member shall sever his employment voluntarily
prior to becoming eligible for a pension but retain his civil
service rights with the City, and if such member does not have
returned to him the monies provided for in Section 18 hereof, he
shall, upon resuming his employment as an employee as defined
herein, again become a member; provided, however, that between the
date of such severance and the date of such re-employment he shall
be entitled to no benefits hereof excepting those which may have
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accrued to him prior to such severance, and further provided upon
such re-employment he shall submit to the medical examination
required by Section 4.06. For purposes of determining the
provisions of the System which apply to a member who was employed
by the City prior to May 19, 1993 and is rehired on or after
May 19, 1993 if such a member did not receive a distribution of his
accumulated contributions upon his termination of employment, he
shall be treated as a member employed by the City prior to
May 19, 1993; in all other cases, the member shall be deemed a new
employee as of his date of reemployment and the provisions of the
Plan applicable to new members on and after May 19, 1993 shall
govern.
4.04 As of the Effective Date, there shall be transferred to
the Pension Fund of this Supplemental System an amount equal to
three (3) times the accumulated amount of contributions, together
with interest thereon to the date of transfer, that were paid by
the employee into the City of Miami Beach Employees Retirement
System with respect to employees as defined herein who are members
of the City of Miami Beach Employees Retirement System as of the
Effective Date and who are not members of the Base System as of
such Date. Simultaneously with such transfer, said employees shall
become members of this Supplemental System. The funds so
transferred, together with interest thereon to the date of
transfer, shall be credited against the City's liability for
creditable service already accrued prior to the date of transfer
with respect to persons who become members of this Supplemental
System in accordance with this Section 4.04.
4.05 Membership in this Supplemental System shall
automatically cancel the membership and participation of any
employee in any other pension annuity or retirement System for
employees of the City of Miami Beach to which the said City
contributes, other than membership and participation in the Base
System.
4.06 All employees of the City who become employees as defined
herein and who become members of this Supplemental System in
accordance with the provisions of this Section 4, shall submit to
a physical examination as prescribed by the Board of Trustees;
however, the result of such examination shall not affect
eligibility for membership in this Supplemental System, but shall
be used for the proper administration of the Supplemental System by
the Board. This physical examination requirement shall be deemed
satisfied with respect to any member who has fulfilled this
requirement under the Base System as of the Effective Date or who
fulfills said requirement under said System after the Effective
Date.
4.07 Whenever any employee is employed by the City prior to
May 19, 1993 and becomes a member of this Supplemental System, the
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City, within thirty (30) days thereafter, is hereby authorized,
empowered and directed to prepare a contract for execution between
the parties hereto, to -wit: the City and said employee, which
contract shall be in the following form:
THIS AGREEMENT, made and entered into this day of
, 19 , between the City of Miami Beach, a
municipal corporation under the laws of the State of Florida,
hereinafter referred to as City, party of the first part, and
(individual employee), hereinafter described as employee, party of
the second part.
WITNESSETH: THAT WHEREAS, the City has established the Police
Officers and Firemen's Firefighters' Supplemental Pension System
City of Miami Beach, Florida, and
WHEREAS, it is beneficial to the said City to have its said
employees protected by the terms of said Supplemental System and
benefits and the said employee is desirous of participating in said
Supplemental System and benefits, it is thereupon
UNDERSTOOD AND AGREED by and between the parties that the
party of the second part does hereby allot, out of his salary or
wages paid to him by the City and determined before reduction for
picked -up contributions in accordance with Section 2.04 or any
amounts contributed on a pre-tax basis in accordance with Sections
125 and 457 of the Internal Revenue Code, an amount equal to ten
(10%) per cent of said salary or wages from the Effective Date (or
date of membership, if later), reduced by the amount of salary or
wages he is contributing under the Base System, and does hereby
authorize and direct the disbursing officer or officers of said
City to retain out of said salary or wages said amount, in
compliance with the terms of the Supplemental System, and to
continue to make said allotment and authorize said deduction
throughout the entire time of his employment or re-employment or
until such time as he shall be entitled to receive the pension
allowance or benefit provided by the Fund. For the purpose of
determining member contributions under this Supplemental System,
salary or wages shall be computed in accordance with the provisions
of Section 3.04.
IT IS FURTHER UNDERSTOOD AND AGREED by and between the parties
that the said City, party of the first part, will accept said
allotment or deduction from the salary or wages of said employee
aforesaid, and when, under the terms of the Supplemental System,
said employee or other beneficiary of said employee shall be
entitled, under the terms of the Supplemental System, to receive
the benefits from said Fund herein created, will pay said sum or
sums from said Fund and all other benefits so authorized to said
employee or his other beneficiaries, in accordance with the terms
of this Supplemental System, without diminution or deduction.
IT IS FURTHER UNDERSTOOD AND AGREED that this contract shall
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remain in force without change, modification or amendment, until
all the purposes now intended to be fulfilled shall have been fully
performed, except that payment or other benefits to the party of
the second part or his beneficiaries may be increased but not
diminished.
IT IS FURTHER UNDERSTOOD AND AGREED that the percentage of the
allotment of or deduction from the salary or wages of the said
employee shall not be increased during the term of this contract
but may only be decreased or diminished by the party of the first
part, nor shall said employee lose any rights under the terms of
this contract by reason of the refusal of said City at any time
during the terms hereof to make allotment or deduction from said
salary or wages.
IT IS FURTHER UNDERSTOOD AND AGREED that it is the intention
of the parties hereto to create vested rights in the respective
parties not to be hereinafter impaired for any cause whatsoever.
IT IS FURTHER UNDERSTOOD AND AGREED that the terms of the
Supplemental System hereinbefore set forth are declared to be a
part of this contract and this contract is to be construed with
reference thereto.
IN WITNESS WHEREOF, the party of the first part has hereto
caused these presents to be executed, signed and sealed, with the
seal of said City, by its duly authorized officers, and the said
party of the second part has hereunto set his hand and seal the day
and year first above written. (Here follow signatures and seals.)
Said contract or agreement is to be executed in duplicate, one
copy to be retained by the City, the other copy to be delivered to
the said employee joining in said contract, and shall thereafter be
and remain a contract binding upon the said City and the employee,
and enforceable in any Court in the State of Florida having
jurisdiction of actions upon contracts in like amount, and by such
relief, ordinary or extraordinary, at law, or in equity as may be
suitable or appropriate in similar causes.
Section 5. Administration of System
The general administration and responsibility for the
proper operation of the Supplemental System are vested in a Board
of Trustees consisting of nine persons. The Board of Trustees
shall be identical to the Board of Trustees of the Base System.
Election or appointment to the Board of Trustees of the Base System
shall constitute an election or appointment to the Board of the
Supplemental System. The Chairman and Secretary of the Board of
Trustees of the Supplemental System shall be the Chairman and
Secretary of the Board of Trustees of the Base System.
(A) The Trustees shall serve without compensation, but they
may be reimbursed for all necessary expenses which they may
actually expend through services on the Board.
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(B) Each Trustee shall, within ten days after his appointment
or election, take an oath of office before the City Clerk of said
City, that so far as it develops upon him he will diligently and
honestly administer the affairs of the said Board, and that he will
not knowingly violate or willingly permit to be violated any of the
provisions of the law applicable to the retirement system. Such
oath shall be subscribed to by the member making it and certified
by the said Clerk and filed in his office.
(C) Each Trustee shall be entitled to one vote on the Board.
Five votes shall be necessary for a decision by the Trustees at any
meeting of the Board. The Chairman shall have the right to one
vote only.
(D) Subject to the limitations of this Supplemental System,
the Board of Trustees shall from time to time establish rules and
regulations for the administration of funds of the Supplemental
System and for the transaction of its business, including
provisions for compulsory attendance of its members.
(E) The Board of Trustees shall engage such actuarial and
other services as shall be required to transact the business of the
Supplemental System. The compensation of all persons engaged by
the Board of Trustees and all expenses of the Board necessary for
the operation of the Supplemental System shall be paid at such
rates and in such amounts as the Board of Trustees shall agree but
in no case shall the total expenditures for such services or
operations under this Supplemental System exceed three (3) per cent
of the maximum of the combined pension funds under the Base System
and this Supplemental System for each fiscal year less the amount
of actual expenditures for services or operations under the Base
System. All funds shall be disbursed by the Board of Trustees.
(F) Any trustee who neglects the duties of his office shall
be removed by the Board of Trustees.
Section 6. Investment of Funds
6.01 Money shall be withdrawn from the pension fund under the
Supplemental System only upon warrants executed by a majority of
the Board. The Board shall have exclusive charge of the investment
of any surplus in said fund not needed for the current obligations
thereof_
Bonds, notes, sccuritics or other evidences of
obligations of the Government of
government is pledged.
guaranty.
Bonds, notes and other sccuritics of any county or
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Dividend paying stocks,
common or preferred, of any
amount so invested shall
Croup annuity contracts with one or more insurance
Supplemental System.
trustees shall, in acquiring, investing, reinvesting, exchanging,
retaining, selling and managing property for the benefit of the
City Supplemental Pension Fund for Firefighters and Police Officers
in the City of Miami Beach, exercise the judgment and care under
the circumstances then prevailing, which persons 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 persons 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. The
intent of this provision is to remove any and all restrictions
which are otherwise imposed by Chapter 175 or 185 Florida Statutes
and which may be removed.
6.02 Monies needed for the meeting of the current obligations
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may be deposited in a depository recognized by law for the deposit
of funds of the State of Florida and upon posting of similar
security to that required for public deposits. The City of Miami
Beach shall have the custody of and responsibility for any funds,
stocks, bonds, notes or other evidences of indebtedness and such
custody shall be for the purpose of safekeeping only, without any
discretion in the City of Miami Beach regarding the propriety of
any withdrawal or transfer of any such funds, stocks, notes, other
evidences of indebtedness or funds.
Section 7. Benefits Payable
7.01 Service and Disability Benefits Service and Disability
Benefits for Members Who Were Employed by the City Prior to May 19,
1993
(A) The Board shall, upon application, retire members meeting any
one of the following requirements:
(1) The attainment of age Fifty (50) years.
(2) Permanent and total disability incurred in the line of
duty in the Police or Fire Department, or in the
Unclassified Service as provided in Section 18 hereof,
irrespective of the number of years of service.
(3) Permanent and total disability incurred other than in the
line of duty, after five (5) years of creditable service.
(B) A member shall be entitled to receive, upon retirement after
the attainment of age Fifty (50) , or upon retirement under the
provisions of Subsection (A) (2) or (3), a monthly pension
payable for life equal to subparagraph (1) plus subparagraph
(2), reduced by subparagraph (3) as follows:
(1) Three (3%) per cent of the average monthly salary or
wages of the member for each year of the first fifteen
(15) years of creditable service, being computed as to a
part of a year on a pro rata basis to the nearest month;
plus
(2) Four (4%) per cent of the average monthly salary or wages
of the member for each year of creditable service in
excess of fifteen (15) years, being computed as to a part
of a year on a pro rata basis to the nearest month;
reduced by
(3) the base System Benefit.
In the event a service retirement pension becomes payable
under this Supplemental System prior to the date the service
retirement pension is payable under the Base System, the member's
pension payable hereunder shall be recomputed at such time as the
Base System Benefit becomes payable to reflect payment of such
Benefit.
For purposes of determining a member's benefit under this
Supplemental System, the "average monthly salary or wages" of the
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member shall be based on the average of the two (2) highest paid
years of the member prior to the date of retirement or termination.
For purposes of such calculation, salary or wages shall be computed
on the salary or wages upon which the member's contribution to the
Supplemental System was computed, as defined in Section 3.04.
•
•
Notwithstanding that definition, however, with respect to a member
retiring before October 1, 1994, the inclusion of overtime in the
two (2) highest paid years shall be limited in each year to an
amount which is equal to the difference between the member's
annualized pay rate at the time of retirement or termination and
the highest annualized pay rate for the next higher salary rank.
With respect to a member retiring on or after October 1, 1994, the
inclusion of overtime in the two (2) highest paid years shall be
limited in each year to an amount which is equal to 70% of the
difference between the member's annualized pay rate at retirement
and the highest annualized pay rate for the next higher salary
rank; provided, however, that in no event shall such a member's
accrued benefit on his date of retirement be less than the benefit
he had accrued as of September 30, 1994, determined under the terms
of the Supplemental System in effect on that date.
The benefits provided hereinabove shall not be more than
ninety (90%) per cent of the member's average monthly salary or
wages as defined in the immediately preceding paragraph, reduced by
the Base System Benefit.
(C) The minimum pension for a member retiring under Section
7.01(A) (2) for permanent and total disability shall be eighty-five
(85%) per cent of the salary or wages of the member at the time of
disability retirement, reduced by the Base System Benefit.
(D) In the event that any member eligible for benefits hereunder
shall have terminated his employment after having completed at
least ten (10) years of creditable service but prior to attaining
the age of fifty (50) years and shall elect hereunder to decline to
withdraw his accumulated contributions in the Supplemental System,
then such member shall be entitled to receive upon attaining the
age of fifty (50) years a monthly pension payable for life in
accordance with the benefits designated in Subsection (B) hereof;
provided, however, that in the event of the death of a member prior
to having attained the age of fifty (50) years, then the benefits
as contained in this paragraph shall become ineffective and the
estate of such member shall be entitled to all monies contributed
by him into this System together with accumulated interest on said
sum at the rate of three (3%) per cent per annum computed until the
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date of payment to the estate of the member.
(E) Nothing herein contained shall be construed to prevent the
City Manager or the Board from initiating action for the compulsory
retirement of a member, eligible for retirement, prior to such age,
where such member is considered to be unfit for the proper
performance of his duties because of physical or mental incapacity,
and upon certification by the Medical Board designated by the Board
of Trustees pursuant to Section 8, that such person is mentally or
physically incapable of proper performance of duties, such person
shall be automatically retired.
7.02 Service and Disability Benefits for Members Who Were Employed
by the City on or After May 19, 1993
(A) The Board, shall upon application, retire members meeting any
one of the following requirements:
(1)_ The attainment of age fifty-five (55) years with ten (10)
or more years of creditable service.
(2) Permanent and total disability incurred in the line of
duty in the Police or Fire Department, or in the
Unclassified Service as provided in Section 18 hereof,
irrespective of the number of years of service.
_(3) Permanent and total disability incurred other than in the
line of duty, after five (5) years of creditable service.
(B) A member shall be entitled to receive, after the attainment of
age fifty-five (55) years with ten (10) or more years of creditable
service or upon retirement under the provisions of Subsection
(A)(2) or (3), a monthly pension payable for life equal to
subparagraph (1) reduced by subparagraph (2) as follows:
_(1) Three (3%) per cent of the average monthly salary or
wages of the member for each year of creditable service,
being computed as to a part of a year on a pro rata basis
to the nearest month; reduced by
/2) the Base System Benefit.
In the event a service retirement pension becomes payable
under this Supplemental System prior to the date the service
retirement pension is payable under the Base System, the member's
pension payable hereunder shall be recomputed at such time as the
Base System Benefit becomes payable to reflect payment of such
Benefit.
For the purposes of determining a member's benefit under this
Supplemental System, the "average monthly salary or wages" of the
member shall be based on the average of the three (3) highest paid
years of the member prior to the date of retirement or termination.
For purposes of such calculation, salary or wages shall be computed
on the salary or wages upon which the member's contribution to the
Supplemental System was computed, as defined in Section 3.04.
The benefits provided hereinabove shall not be more than
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eighty (80) per cent of the member's average monthly salary or
wages as defined in the immediately preceding paragraph, reduced by
the Base System Benefit.
jC) The minimum pension for a member retiring under Section
7.02 (A) (2) for permanent and total disability shall be seventy-five
(75%) per cent of the salary or wages of the member at the time of
disability retirement, reduced by the Base System Benefit.
(D) The minimum pension for a member retiring under Section
7.02 (A) (3) for permanent and total disability shall be fifty (50%)
per cent of the salary or wages of the member at the time of
disability retirement, reduced by the Base System Benefit.
(E) In the event that any member eligible for benefits hereunder
shall have terminated his employment after having completed at
least one (1) year of creditable service but prior to attaining the
age of fifty-five (55) years and completing ten (10) years of
creditable service and shall elect hereunder to decline to withdraw
his accumulated contributions in the Supplemental System, then such
member shall be entitled to receive upon attaining the age of
fifty-five (55) years or upon his termination of employment, if
later, a monthly pension payable for life. Such benefit shall be
initially determined in accordance with the benefits designated in
Subsection (B) hereof, and then multiplied by a percentage based on
the member's years of creditable service at the date of
termination. Such percentage shall equal ten (10%) per cent for
each year of creditable service up to one hundred (100%) per cent
after 10 years of creditable service. In the event of the death of
a member prior to having attained the age of fifty-five (55) years,
then the benefits as contained in the paragraph shall become
ineffective and the estate of such member shall be entitled to all
monies contributed by him into this System together with
accumulated interest on said sum at the rate of three (3%) per cent
per annum computed until the date of payment to the estate of the
member.
(F) Nothing herein contained shall be construed to prevent the
City Manager or the Board from initiating action for the compulsory
retirement of a member, eligible for retirement, prior to such age,
where such member is considered to be unfit for the proper
performance of his duties because of physical or mental incapacity,
and upon certification by the Medical Board designated by the Board
of Trustees pursuant to Section 8, that such person is mentally or
physically incapable of proper performance of duties, such person
shall be automatically retired.
7.02 7.03 Cost of Living Adjustment
(A) In the case of a pensioncr or bcncficiary a pensioner who was
employed by the City prior to May 19, 1993 or a beneficiary of such
a member who has been receiving a pension for at least one year
under the Base System or this Supplemental System as of October 1,
14
1989 or any subsequent October 1, the amount of pension payable to
him as of such October 1, shall be increased by two and one-half
(2-1/2) per cent of the amount payable to him under the Base System
and this Supplemental System. The amount of the increase payable
from this Supplemental System shall be the full amount of the
increase (including the portion attributable to any pension payable
under the Base System), reduced by any increase actually payable
from the Base System. For purposes of this Section 7.02 7.03, the
pension commencement date for a beneficiary receiving a pension as
the result of the death of a retired member who was receiving a
pension at the time of his death shall be the date on which the
retired member began to receive his pension.
(B) In the case of a pensioner who was employed by the City on or
after May 19, 1993 or a beneficiary of such a member, who has been
receiving a pension for at least one year under the Base System or
this Supplemental System as of October 1, 1994 or any subsequent
October 1, the amount of pension payable to him under the Base
System and this Supplemental System as of such October 1,
determined without regard to any cost of living increase previously
granted under this Section 7.03 or under the Base System, shall be
increased by one and one-half (11%) per cent. The amount of the
increase payable from this Supplemental System shall be the full
amount of the increase (including the portion attributable to any
pension payable under the Base System), reduced by any increase
actually payable from the Base System. For purposes of determining
the one year requirement of this Section 7.03(B), the pension
commencement date for a beneficiary receiving a pension as the
result of the death of a retired member who was receiving a pension
at the time of his death shall be the date on which the retired
member began to receive his pension.
(B) In the case of a pensioner or beneficiary who retires
after October 1, 1988 under the Base System or this Supplemental
System or after October 1 of any subsequent year under this
Supplemental System, and who therefore must wait more than twelve
(12) months for his first increase, the amount of pension payable
to him as of the October 1 next following the first anniversary of
the commencement of his pension shall be increased by two and
half (2 1/2%) per ccnt a specified percentage, as hereinafter
defined, of the amount payable to him under the Base System and
this Supplemental System multiplied by a fraction, the numerator of
which is the number of months for which his pension under said
Systems has been paid and the denominator of which is twelve (12).
The specified percentage shall be two and one-half (21%) per cent
for members who were employed by the City prior to May 19, 1993 or
beneficiaries of such members and one and one-half (11%) per cent
for members who were employed by the City on or after May 19, 1993
and beneficiaries of such members. The amount of the increase
15
payable from this Supplemental System shall be the full amount of
the increase (including the portion attributable to any pension
payable under the Base System), reduced by any increase actually
payable from the Base System.
(C) (D) The provisions of this Section 7.02 7.03 shall not apply
in the case of a member of the Base System who elects in writing
prior to the earlier of his date of retirement or January 1, 1990
to waive his membership in this Supplemental System in accordance
with the provisions of Section 4.01 or 4.02.
7.03 7.04 Service Connected Death Benefits
If any member shall lose his life or later die within
five (5) years from injuries received while in the discharge of his
duties and shall leave a widow or widower or a child or children or
one or more dependent parent(s), the Trustees shall authorize and
direct payment of a pension to the widow or widower or a child or
children or dependent parent(s) under the following terms,
conditions and restrictions and at the following rates:
(A) To the widow or widower, the greater of subparagraph (1) or
subparagraph (2), reduced by subparagraph (3) as follows:
(1) the pension to which the deceased member would have been
entitled under Section 7.01(B), determined without regard
to clause (3) thereof, or Section 7.02(B), whichever is
applicable.
(2) eighty-five (85%) per cent of the salary or wages of the
member at the date of his death,
(3) the Base System Benefit.
(B) If there be no surviving widow or widower, or if such widow or
widower remarries or dies, then the benefit set forth in Subsection
(A) above shall be paid in equal portions to each child of the
deceased member. Payment to any such child shall cease at such
time as
(1) the child attains age eighteen (18) (or age twenty-two
(22) in the case of a child who is a full-time student in
high school or college),
(2) the child marries or dies, or
(3) the child recovers in the case of a physically or
mentally handicapped child.
(C) If there are no benefits payable to a child or children, then
the benefit set forth in Subsection (A) above shall be paid to the
dependent parent of the deceased member. If both parents are
dependent, such benefit shall be shared equally.
(D) The beneficiary of a member of the Base System who became
entitled to the service connected death benefit under the terms of
the Base System on or after June 1, 1988 and prior to the Effective
Date, shall be entitled to receive the service connected death
benefit described in this Section 7.03 7.04 assuming, solely for
this purpose, that the Supplemental System was in effect on and
16
after June 1, 1988. Payment of the death benefit shall commence as
of the Effective Date and, to the extent applicable, the Trustees
shall authorize and direct that retroactive payments, calculated in
accordance with the foregoing provisions of this Section 7.03 7.04,
be made to the appropriate beneficiary as herein before described.
(E) the trusteeship and disbursement of the pension to any child
or children or dependent parent is to be determined by the Board of
Trustees.
(F) a legally adopted child shall have the same rights as a
natural born child, but no pension shall be allowed to any
stepchild or stepchildren of a deceased member.
(G) Pension payments to widows or widowers, children and dependent
parents shall not be decreased or reduced due to benefits received
by them under any Workers' Compensation Law.
7.04 7.05 Non -Service Connected Death Benefits
If any member shall die from causes not attributed to his
duties, and such death shall occur after his having completed five
(5) years of creditable service, or if any such member shall die
subsequent to his having met the requirements for retirement under
Section 7.01(A)(1) or 7.02 (A)(1), whichever is applicable,
regardless of whether or not pension payments have commenced, the
Trustees shall authorize and direct payment to the widow or widower
and/or child or children and/or a dependent parent in equal monthly
installments as follows:
(A) To the widow or widower, if she shall have been married to the
deceased member for ten (10) years or more, the amount of the
pension to which the deceased member was entitled or receiving at
the time of death or would have been entitled at the time of death
under Section 7.01 or 7.02 of this Supplemental System, for the
first twelve (12) months, and thereafter the greater of
Subparagraph (1) or Subparagraph (2), reduced by Subparagraph (3)
as follows:
(1) seventy-five (75%) per cent of the pensions payable under
the Base System and this Supplemental System, payable
with respect to a member who was employed by the City
prior to May 19, 1993 and who retired on or after October
1, 1988, and fifty (50%) per cent of the pensions payable
under the Base System and this Supplemental System
payable with respect to a member who was employed by the
City on or after May 19, 1993, or
(2) twenty-five (25%) per cent of the average monthly pay for
the two (2) highest paid years, reduced by
(3) the Base System Benefit.
The monthly installments shall continue until the remarriage
or death of the widow or widower. If the widow or widower shall
have been married to the deceased member less that ten (10) years,
the benefits as above provided shall be payable until remarriage or
17
death, but in no case longer than for the period of the normal life
expectancy of the deceased member at the time of his death,
determined in accordance with the 1979 George B. Buck Mortality
Table for males or such other table as shall be formally adopted by
the Board of Trustees.
(B) If the beneficiary of a member of the Base System who was not
eligible to become a member of this Supplemental System is or
becomes entitled to the non -service connected death benefit under
the terms of the Base System on or after October 1, 1988, the
beneficiary shall be entitled to receive the non -service connected
death benefit described in this Section 7.04 7.05. Payment of the
death benefit shall commence as of the Effective Date or following
the member's date of death, if later.
(C) To the child or children or dependent parent(s), the
provisions of Section 7.03 7.04 governing the conditions and
restrictions applicable to the administration of children's or
parents' pensions shall apply.
7.06 Enhanced Retirement Pension
(A) Any active member employed by the City prior to May 19, 1993
who will reach age forty-eight (48) on or before July 28, 1993
shall be eligible to elect, by written application filed with the
Board during the period from May 29, 1993 through July 28, 1993, to
retire and to receive an enhanced retirement pension as follows:
L11 A member who on his date of retirement has not attained
age fifty (50) shall have his age increased to age fifty
(50) and thereby qualify for retirement under Section
7.01(A) (1) .
121 A member who on his date of retirement has attained age
fifty (50) will have his years of creditable service
increased by two (2) years for purposes of determining
the amount of his retirement pension. However, in no
event shall a member's retirement pension calculated
under this Section 7.06(A) exceed ninety (90%) per cent
of the member's average monthly salary or wages as
defined in Section 7.01(B) reduced by the Base System
Benefit.
The member's pension under this Section 7.06(A) shall commence
on his date of retirement which shall be no later than July 281
1993. A member's election under this Section 7.06(A) shall be
irrevocable on his date of retirement. Failure by an otherwise
eligible member to affirmatively elect, by July 28, 1993, to retire
pursuant to the provisions of this Section 7.06(A) shall constitute
an irrevocable waiver of such right.
JB) Any active member employed by the City prior to May 19, 1993
who will reach age forty-eight (48) on or before September 30, 1994
shall be eligible to elect, by written application filed with the
18
Board during the period from August 2, 1994 through September 30,
1994, to retire and to receive an enhanced retirement pension as
follows:
(1) A member who on his date of retirement has not attained
age fifty (50) shall have his age increased to age fifty
(50) and thereby qualify for retirement under Section
7.01(A)(1).
/2) A member who on his date of retirement has attained aqe
fifty (50) will have his years of creditable service
increased by two (2) years for purposes of determining
the amount of his retirement pension. However, in no
event shall a member's retirement pension calculated
under this Section 7.06(B) exceed ninety (90%) per cent
of the member's average monthly salary or wages as
defined in Section 7.01(B) reduced by the Base System
Benefit.
The member's pension under this Section 7.06(B) shall commence
on his date of retirement which shall be no later than September
30, 1994. A member's election under this Section 7.06(B) shall be
irrevocable on his date of retirement. Failure by an otherwise
eligible member to affirmatively elect, by September 30, 1994, to
retire pursuant to the provisions of this Section 7.06(B) shall
constitute an irrevocable waiver of such right.
Section 8. Medical Board
The Board of Trustees shall designate a medical board to
be composed of three physicians who shall arrange for and pass upon
all medical examinations required under the provisions of this
Supplemental System, shall investigate all essential statements or
certificates made by or on behalf of a member in connection with an
application for disability or retirement and shall report in
writing to the Board of Trustees its conclusions and
recommendations upon all matters referred to it. The payment for
such services shall be determined by the Board of Trustees.
Section 9. Compulsory Retirement
On compulsory retirement of a member on act of the Board
of Trustees any such retired member shall have the right to appeal
against such retirement by the Board of Trustees by appealing to a
Court of proper jurisdiction, and said member shall defray his own
expense in his appeal of such compulsory retirement.
Section 10. Cessation of Pension
The pension provided for herein shall cease upon
conviction of a felony of a member receiving the benefits herein
provided and actual incarceration in a Penitentiary. A pension as
provided herein shall be paid to the wife spouse or children or
19
dependent parent(s) as herein prescribed for a deceased member
under this Supplemental System, until his official release from
incarceration, then the pension will be paid to the pensioner
again.
Section 11. Dismissal
Members entitled to a pension shall not forfeit the same
upon dismissal from the department, but shall be retired as herein
prescribed.
Section 12. Recovering from Disability
In the event a member who has been retired on a pension
on account of permanent and total incapacity regains his health and
is found by the Board of Trustees of this Supplemental System to be
in such physical and mental condition as to meet the requirements
of the Personnel Department for service acceptable to the City, the
Board shall order his pension discontinued, and he shall be ordered
to resume active service in the department from which he was
retired at the same of similar work as that at which he was
employed prior to his disability retirement, or at other work
within the limits of his physical or mental capabilities at a rate
of compensation not less than seventy (70%) per cent of the pay at
the time of his return to active service for the classification
occupied by him prior to his disability retirement. Upon request
of the City manager, the Board shall review the condition of any
member receiving a pension for disability and shall submit to the
City Manager a report thereon; and if there shall be substantial
evidence that the retired member is capable of performing service
acceptable to the City in the Department from which such member was
retired, he shall be ordered to resume active duties and his
pension shall be discontinued.
Section 13. Computation of Pension Service
13.01 In computing service allowance, creditable service
shall mean all service which is counted as creditable service under
the Base System or under the city of Miami Beach Employees
Retirement System as of the member's date of retirement or
termination, all periods of time of actual work for which wages or
salaries were received by the member in the service of the Fire and
Police Departments, all military service for which employee
contributions are made as provided in Section 19, and all
Accumulated Total Credit transferred to this Supplemental System in
accordance with Section 4.04. Notwithstanding any provision to the
contrary, in no event shall the same period of service be counted
more than once as creditable service under this Supplemental
System.
13.02 Employees who become members of this Supplemental
20
System, in order to receive credit for service rendered on and
after the Effective Date and prior to their becoming a member,
shall make contributions in the amount such member would have
contributed had he been a member during the period of service for
which credit is being purchased. In order to receive such credit
employees shall make payment within six (6) months of becoming a
member. Notwithstanding the foregoing, any employee who transfers
to the Base System or this Supplemental System whereby the
Accumulated Total Credit in any other Pension System of the City is
transferred to either the Base System or this System, then and in
that event all of the creditable service time in such other System
shall be considered creditable pension service time as hereinabove
provided, and such employee need make no additional contribution
for time credited.
13.03 The Board of Trustees shall establish a service
record of all employees who may be entitled to participate in the
benefits of this Supplemental System, and shall keep a record
thereof.
Section 14. Nonassignability of Pension
No pension provided for herein shall be assignable or
subject to garnishment for debt or to other legal process, and no
pension provided for herein shall be subject to any deductions or
assessments by the City of Miami Beach, Florida, nor shall any
benefits hereunder be altered or modified in any respect due to the
fact that any member may be the recipient of any benefits from any
other pension or pension plan; provided, however, Workers'
Compensation benefits paid by the City to a retired member shall be
credited against any pension payments payable on account of
permanent and total disability incurred in the line of duty in the
Police or Fire Department, or in the Unclassified Service as
provided in Section 18.
Section 15. Duration of Member's Pension
Pensions granted to retired members shall be paid to them
for life and shall not be revoked nor in any way diminished except
as provided in this Supplemental System, and the payment of the
member to this Fund shall cease upon his retirement and acceptance
of a pension.
Section 16. Assets for Benefits of Members and Beneficiaries
All assets of the Fund shall be held by the Board of
Trustees in trust for use in providing the benefits of the
Supplemental System and paying its expenses not paid directly by
the City; provided that no part of the corpus or income of the Fund
shall be used for, or diverted to, purposes other than for
21
exclusive benefit of members or their beneficiaries under the
system, prior to the satisfaction of all liabilities for benefits
with respect to them or for the administrative expenses of the
system; and provided further, that no person shall have any
interest in or right to any part of the earnings of the Fund, or
any rights in, or to, any part of the assets thereof, except as and
to the extent expressly provided in this Supplemental System. In
case of termination of the Supplemental System, or in the event of
the discontinuance of contributions thereunder having the effect of
such termination, the rights of all members of the Supplemental
System to benefits accrued to the date of such termination or
discontinuance, to the extent then funded, shall be nonforfeitable.
Section 17. Re-examination of Pensions
The Board of Trustees shall have the power to examine
into the facts upon which any pensions are granted under this
Supplemental System, and to ascertain if any pension has been
granted or obtained erroneously, fraudulently, or illegally for any
reason. Said Board shall also be empowered to purge the pension
rolls of any pensions granted under this Supplemental System, if
the same are found to be erroneous, fraudulent or illegal for any
reason; and to reclassify any pensioner who, under this
Supplemental system, is erroneously, improperly or illegally
classified.
Section 18. Return of Contribution
Whenever any member in the service of either the Fire or
Police Departments shall sever his connection with such department
either voluntarily or by lawful discharge, or by death not
attributed to his active duties prior to the completion of five (5)
years of membership in the Department, or by death in active
service leaving no widow or widower, or children or dependent
parent(s) surviving him entitled to pension benefits under this
Supplemental System, such member, or his estate, shall be entitled
to the return of all of the monies he has contributed into this
Supplemental System, together with accumulated interest on said
sum, at the rate of three (3%) per cent per annum, computed until
date of payment to said member, or his estate unless in the event
of discharge or voluntary severance such member has at that time
qualified under the terms of this Supplemental System for a pension
as herein provided for: except that any member of this
Supplemental System who separates from active service with the Fire
or Police Departments to accept an appointment to any office in the
Unclassified Service of the City shall continue to have all the
rights, privileges and responsibilities of this Supplemental System
provided, however, that any member of this Supplemental System who
separates from active service with the Fire or Police Departments
22
to accept an appointment to any office in the Classified Service of
the City shall immediately become a member of the City of Miami
Beach Employees Retirement System and shall receive creditable
service under that System for service which is creditable
hereunder.
Upon becoming a member of said System the Trustees shall
transfer from the funds of this Supplemental System to the City of
Miami Beach Employees Retirement System an amount equal to three
(3) times the accumulated amount of the member's contributions,
together with interest thereon to the date of transfer, that were
paid by the employee to this Supplemental System. For purposes of
this Section, monies a member has contributed shall include picked -
up member contributions together with interest thereon.
Section 19. Military Service
19.01 Any member of the Supplemental System or any
probationary employee in the Fire or Police Department who is
absent from the service of the City because of service in the Armed
Forces of the United States and if he shall have returned to the
service of the City having applied to return while his reemployment
rights were protected by law shall be entitled to preserve all
retirement rights and privileges under this Supplemental System
provided that such member, or such probationary employee after he
becomes a member, shall contribute into the Supplemental System a
sum equal to the amount such member would have contributed had he
been a member during the period of service for which credit is
being purchased, and creditable toward service retirement as in
this Section hereinafter provided. Payment of such contributions
shall be made within six (6) months after discharge from such
active military service.
19.02 A member who has at least twenty (20) years of
creditable service and who is entitled to receive benefits under
the Supplemental System may contribute an additional amount to the
Supplemental System in order to receive service credit for his
years of active military service in the U.S. Army, Navy, Air Force,
Marines or Coast Guard occurring prior to his date of employment
with the City. A member may purchase up to four (4) years of such
service. The price for each such year shall be ten (10%) per cent
of the aggregate of his salary or wages during the twelve (12)
calendar months immediately preceding the date of such purchase,and
such price shall be prorated accordingly if a member's election
included a fractional year of service. Any additional benefit
attributable to service purchased under this Section 19.02 shall be
determined in accordance with the three (3%) per cent benefit rate
as described in Section 7.01(B)(1) or 7.02(B)(1).
23
Section 20. Distribution Limitation
Notwithstanding any other provision of this Plan, all
distributions from this Plan shall conform to Section 401(a) (9) of
the Internal Revenue Code in general and to Section 401(a) (9)(C)
of said Code in particular, as such Section was amended by the
Technical and Miscellaneous Revenue Act of 1988.
Section 21. Limitations on Benefits
(A) In addition to the other limitations set forth in this
Supplemental System and notwithstanding any other provision of this
Supplemental System, the pension payable under this Supplemental
System shall not increase to an amount in excess of the amount
permitted under Section 415 of the Internal Revenue code, with such
limitation specifically subject to subparagraphs (F) and (G) of
Section 415(b)(2) of said Code.
(B) For purposes of applying the limitations of Section 415 of the
Internal Revenue Code, the term "compensation" shall be determined
by reference to the provisions of subparagraphs (1) and (2) of
Title 26 of the Code of Federal Regulations, Section 1.415-2(d), as
modified by subparagraph (10) of said Regulation.
SECTION 2. REPEALER - All ordinances or parts of ordinances in
conflict herewith be and the same are hereby repealed.
SECTION 3. SEVERABILITY - If any section, subsection, sentence,
clause or phrase of this Ordinance is held to be invalid or
unconstitutional by any court of competent jurisdiction, then said
holding shall in no way affect the validity of the remaining
portion of this Ordinance.
SECTION 4. EFFECTIVE DATE - This Ordinance shall take effect ten
days after its adoption, with the application of the provisions
herein to become effective retroactive as of May 19, 1993.
PASSED and ADOPTED this 19th day of Ma , 1993
ATTEST:
CITY CLERK
1st reading 5/5/93
2nd rea.g 5/19/93
FORM PROVED:
City Attorney
%/93
YOR
amended by: Ordinance No. 89-2652, 7/26/89
Ordinance No. 90-2715, 9/19/90
24
CITY OF MIAMI BEACH
CITY HALL 1700 CONVENTION CENTER DRIVE MIAMI BEACH FLORIDA 33139
OFFICE OF THE CITY MANAGER
TO:
TELEPHONE: (305) 673-7010
FAX: (305) 673-7782
COMMISSION MEMORANDUM NO. c S 5 -9
Mayor Seymour Gelber and DATE:
Members of the City Commission
FROM: Roger M. Canto
City Manager
May 19, 1993
SUBJECT: AMENDING ORDINANCE 89-2640, BEING THE 'CITY SUPPLEMENTAL PENSION FUND
FOR FIREMEN AND POUCEMEN IN THE CITY OF MIAMI BEACH' PROVIDING FOR
PLAN AMENDMENTS AS AGREED BETWEEN THE CITY OF MIAMI BEACH AND BOTH
THE INTERNATIONAL ASSOCIATION OF FIRE FIGHTERS AND THE FRATERNAL
ORDER OF POLICE.
ADMINISTRATION RECOMMENDATION:
The Administration recommends that the City Commission adopt the
attached Ordinance on second reading, which amends Ordinance 89-
2640, being the "City Supplemental Pension Plan for Firemen and
Policemen in the City of Miami Beach".
First reading of the aformentioned Ordinance was on May 5, 1993.
BACKGROUND:
On Thursday, March 11, 1993, the Administration and two of the
City's unions, the International Association of Fire Fighters
(IAFF) and the Fraternal Order of Police (FOP), reached tentative
agreement on the major economic terms for their two-year labor
agreements. Included in the respective agreements is the issue of
"pension reform" for both current and future employees.
On April 21, 1993, the City Commission ratified the Labor Agreement
with the International Association of Fire Fighters, Local 1510.
On May 5, 1993, the City Commission ratified the Labor Agreement
with the Fraternal Order of Police, William Nichols Lodge No. 8.
BENEFIT CHANGES:
The negotiated changes in pension benefits for current and future
employees represented by both the IAFF and FOP are as follows:
A. FUTURE EMPLOYEES
1. Increases the normal retirement age from 50 years to 55
years of age with 10 years of service. Vesting is
incremental at 10% per year. (Section 7.02)
2. Reduces the benefit accumulation from 3% for each year
for the first fifteen years and 4% for each year
thereafter to 3% per year for all years of service.
Maximum payable reduced from 90% to 80%. (Section 7.02)
AGENDA
ITEM
DATE
7
3. Changes the definition of final average monthly earnings
from the average of the two highest years of base pay,
longevity, allowances, and overtime to the average of the
three highest years of wages and salaries to include base
pay and longevity only. (Section 3.04)
4. Reduces the minimum pension for service connected
disability from 85% to 75%. (Section 7.02(C))
5. Sets the minimum pension for non -service connected
disability, with 5 years of service to 50%.
(Section 7.02)
6. Reduces the cost of living adjustment from 21% per year,
compounded to 11/2% per year, not compounded.
(Section 7.03)
7. Eliminates the requirement for new hires to sign
individual contract for the "Supplemental', Plan.
(Section 4.08)
B. EXISTING EMPLOYEES
1. Reduces the amount of overtime allocated for purposes of
calculating pension benefit to 70% of the current limit.
(Section 7.01)
2. Provides two (2) option periods for an early retirement
incentive that would grant 2 years of age or 2 years of
service to eligible members. The first 60 -day option
period would be provided during the period May 29 to July
28, 1993; the second period would be August 2 to
September 30, 1994. (Section 7.06)
C. GENERAL CHANGES
1. Changes all reference to "firemen" and "policemen" to
read "firefighters" and "police officers", respectively.
2. Expenses of the "Supplemental" plan shall be paid from
the plan assets. (Section 2.03)
3. Changes the investment policy for plan assets to provide
for the "Prudent Person" rule. (Section 6.01)
ANALYSIS:
The impact of the recommended changes to the pension plan and
benefits for current and future employees was analyzed by the
actuary for the Police and Fire Pension Systems, Buck Consultants,
Inc., and is estimated to be $5.4 million during the next 10 years
(Attachment A). The major assumptions utilized were as follows:
1. 50% of the 31 members eligible to exercise this option during
the first option period would do so.
2. Replacements would be at salary ranges 15% lower, with the
reduced pension benefits.
3. Total membership would be stable, with all vacancies filled.
4. Annualized return of actuarial assets would be 8.5%.
5. Without the retirement windows and two-tier salary plan,
payroll growth would be 11% higher; the payroll factor for
estimating the impact of allowances and overtime would be
reduced from 10% to 9%.
6. Other assumptions for salary increases and rates of separation
would remain unchanged from the regular valuation assumptions.
8
7. No other changes, other that those already agreed, would be
made during the ten year period.
For the current fiscal year, these changes would further reduce the
City's contribution to the Supplemental Plan by $18,500. This
amount is in addition to the reduction of $270,587 already realized
by the City in contributions to the Supplemental Plan due to
revised actuarial requirements.
The original impact/analysis of the recommended changes in pension
benefits for futir' ernp r'yes in the TAFF and FOP was projected in
the Pension Review Committee's ("Green") Report at $5.8 million.
IMPLEMENTING THE CHANGER:
Pension benefits for Firefighters and Police Officers employed by
the City of Miami Beach are provided from two pension plans. These
plans are the "City Pension Plan for Firemen and Policemen in the
City of Miami Beach" commonly known as the "Base" plan; and the
"City Supplemental Pension Plan for Firemen and Policemen in the
City of Miami Beach" commonly known as the "Supplemental" plan.
The "Base" plan was created under Chapter 23414, Laws of Florida,
Special Acts of 1945; as a result, changes to the "Base" plan may
be accomplished only by referendum.
The "Supplemental" plan was created by Ordinance 89-2640, effective
October 1, 1989, to provide the additional benefits over and above
the Base benefits; changes to the "Supplemental" plan may be
enacted by amendments to that ordinance.
All of the negotiated pension changes will be accomplished by
amending the Ordinance for the "Supplemental" plan.
CONCLUSION:
The proposed ordinance amending Ordinance 89-2640 implements the
important aspects of pension reform negotiated between the City and
both the International Association of Fire Fighters and the
Fraternal Order of Police.
PFL:me
9
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