RESOLUTION 89-19808 RESOLUTION # 89- 19808
RESOLUTION OF THE CITY COMMISSION OF THE
CITY OF MIAMI BEACH, FLORIDA AUTHORIZING
THE PAYMENT TO RETIREES FROM AN ANNUAL
APPROPRIATION ANY AMOUNTS THAT THEIR
PENSION ALLOWANCES HAVE BEEN REDUCED BY
THE EFFECT OF THE INTERNAL REVENUE
SERVICE CODE SECTION 415
WHEREAS, the City Commission of the City of Miami Beach, Florida has
established Pension Systems for its employees under Chapter 18691 Special
Acts 1937 , Chapter 23414 Special Acts 1945, Ordinance 88-2603 and
Ordinance 89-2640 with a defined level of benefits; and,
WHEREAS, the Internal Revenue Code of 1986 has implemented in its
Section 415 a limitation on the amount of pension benefits which an
organization may grant to a retiring employee; and,
WHEREAS, the City Commission of the City of Miami Beach desires that
the benefit levels granted retiring employees under its Pension Systems
not be diminished by changes in the Internal Revenue Code;
NOW THEREFORE, BE IT DULY RESOLVED BY THE CITY COMMISSIQN OF THE
CITY OF MIAMI BEACH, FLORIDA:
1. That an appropriation be annually funded from the general fund
of the City of Miami Beach in an amount necessary to fully fund
the defined benefits granted to retiring employees in the General
Employees Retirement System, the Police and Fire Retirement System,
the Unclassified Employees and Elected Officials Retirement System
and the Supplemental Pension Fund for Firemen and Policemen.
2. That the Boards of Trustees of these Retirement and Pension Systems
direct their actuaries to calculate the amount necessary to fund
the requirements of their defined benefit plans giving effect to
the reductions caused by the implementation of the Internal
Revenue Code Section 415.
3. That the residual amounts within the appropriation be paid, on a
monthly basis, in an amount to each retiree equal to the difference
between the allowable pension to be paid under the Internal Revenue
Code and the amount of the defined benefit granted under the
respective system.
4. This Resolution will take effect immediately upon adoption.
PASSED AND ADOPTED THIS 15th day of November 1989.
ATTEST: 1
40,1°
Abe Resnick, Vice-Mayor
4( A// ,
Elaine Baker, City Clerk
FORM APPROVED
LEGAL APPROV '
By
Date „tc,,y.tect,
ecee, /44m
I
ed
FLORIDA 3 3 1 3 9
*;INCORP ORATED]*' i "VACA TIONLAIVD U. S. .4. "
OFFICE OF THE CITY MANAGER CITY HALL
ROB W.PARKINS 1700 CONVENTION CENTER DRIVE
CITY MANAGER TELEPHONE: 6737010
COMMISSION MEMORANDUM NO. 4,-.)3Y7
DATE: November 15, 1989
TO: Mayor Alex a.oud and
+f the City y Com' issi• ,9
41104
FROM: Rob W. Par' • s
City Manager -
SUBJECT: RESTORING PENSION BENEFITS LOST UNDER INTERNAL REVENUE CODE
SECTION 415
In 1986 when the U.S. Congress passed the changes to the Internal
Revenue Code, they included a provision that limits the amount of
pension that a person may earn. This limitation is the lessor of
$90,000 at age 62 actuarally reduced to the age of retirement,
($48,000 at age 50) or one-twelth of the average taxable income
over the last three years of employment. To this point, no re-
tirees pension has been reduced due to this limitation; however,
it appears that several employees contemplating retirement will be
affected by this provision.
As the Pension Systems of the City are precluded from paying bene-
fits in excess of these limitations, the amount of their pension
will be reduced. Since the level of benefits granted to employees
by the City Commission is what has been anticipated by our employees,
this Resolution will restore the benefits that would otherwise be
reduced.
Administration Recommendation:
The Administration recommends that the City Commission adopt this
Resolution restoring benefit levels.
RWP:RJN: sw
Attachment
18
AGENDA _
ITEM
:
DATE � l
ORIGINAL
RESOLUTION NO. 89--19808
Authorizing the payment to retirees from
an annual appropriation any amounts that
their persion allowances have been reduced
by the effect of the internal revenue ser-
vice code section 415.
IY