Ordinance 2023-4549 ORDINANCE NO. 2023-4549
AN ORDINANCE OF THE MAYOR AND CITY COMMISSION OF THE
CITY OF MIAMI BEACH, FLORIDA, AMENDING AND RESTATING THE
MIAMI BEACH EMPLOYEES' RETIREMENT PLAN CREATED BY
ORDINANCE NO. 2006-3504, AS SUBSEQUENTLY AMENDED, BY
AMENDING SECTIONS 2, 3, 4, 5, AND 12 OF THE PLAN; PROVIDING
FOR SEVERABILITY; REPEALING ALL ORDINANCES IN CONFLICT
THEREWITH; AND PROVIDING AN EFFECTIVE DATE.
BE IT ORDAINED BY THE MAYOR AND CITY COMMISSION OF THE CITY OF MIAMI
BEACH, FLORIDA:
Section 1. The Miami Beach Employees' Retirement Plan created by Ordinance 2006-
3504, as subsequently amended, is hereby restated, and amended as follows:
Section 1. Creation and Purpose of the Retirement Plan
1. 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.
2. 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.
Section 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 6.2 or credited to the Member pursuant to Section
6.1(b), together with any interest allowed thereon under this Plan or previous City
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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 8.0% interest per
annum on the basis of the RP 2000 Combined Healthy Participant Mortality Tables with
a blending of 65% male rate and 35% female rates.
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 5.10 (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 VII.
2.05 "Charter Officers"means the City Manager, City Attorney, City Clerk, and Inspector
General.
2.065 "City" or"Employer" means the City of Miami Beach, Florida.
2.076 "City Commission" or "Commission" means the City Commission of the City of
Miami Beach, Florida.
2.087 "Classified Employee" means an Employee who is employed in a classified
position under the City of Miami Beach Civil Service Act.
2.098 "Creditable Service" means service credited to a Member under the Plan as
provided in Article IV.
2.1004 "Defined Contribution Retirement System" means a plan established by the City
pursuant to Ordinance 92-2813.
2.1148 "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.
2.1244- "Earnings" means base pay, including longevity pay, for personal services
rendered as an Employee, but excluding any payment of overtime, shift differential or
extra 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 March 18, 2006, "Earnings" shall include overtime pay up to a maximum of ten
percent (10%) above the Member's highest pensionable earnings each year. 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
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the Classified Plan continuously from that date until March 18, 2006, upon the ratification
of a collective bargaining agreement that contains such definition. 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
2.1342"Elected Officials" means the Mayor, and the members of the City Commission of
the City of Miami Beach.
2.1443 "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 March 18, 2006, 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.
2.1544 (a) "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 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 March 18, 2006, "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 March
18, 2006.
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(b) Notwithstanding Section 2.14(a) above, effective September 30, 2010,
"Final Average Monthly Earnings" means:
1) For those Members who as of September 30, 2010 have attained normal
retirement age or are within twenty-four(24) months from normal retirement
age, "Final Average Monthly Earnings" shall have the same meaning as in
Section 2.14(a) above.
2) For those Members who as of September 30, 2010 are between twenty-
four (24) and thirty-six (36) months from normal retirement age, "Final
Average Monthly Earnings" means one-twelfth (1/12)of the average annual
earnings of the Member during the three (3) highest paid years of creditable
service.
3) For those Members who as of September 30, 2010 are between thirty-
six (36) and forty-six (46) months from normal retirement age, "Final
Average Monthly Earnings" means one-twelfth (1/12)of the average annual
earnings of the Member during the four (4) highest paid years of creditable
service.
4) For those Members who as of September 30, 2010 are more than forty-
eight (48) months from normal retirement age, "Final Average Monthly
Earnings" means one-twelfth (1/12) of the average annual earnings of the
Member during the five (5) highest paid years of creditable service.
(c) Effective April 23, 2014, Members within classifications in the AFSCME
bargaining unit who were hired prior to September 30, 2010, may elect to retire for
purposes of the Plan but continue employment with the City for up to sixty (60)
months, and have their monthly retirement benefit paid into a DROP account
during the DROP period, in accordance with Section 5.13.
Effective January 1, 2023 for Members who have served as an Elected
Official or Charter Officer and terminate employment, retire or enter the DROP on
or after that date, "Final Average Monthly Earnings" means one-twelfth (1/12) of
the average annual earnings of the Member during the five (5) highest paid years
of creditable service, or if such Member's period of creditable service is less than
five (5) years, the average of the Member's years of creditable service.
2.1645 "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.
2.17.1-6 "Member" means any Employee included in the membership of the Plan, as
provided in Article Ill. A Member who retires shall be deemed a retired member or a
retirant.
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2.184-7"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.
2.191-8 "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.
2.2049"Physical Examiners" means the physicians provided for in Section 8.06(j).
2.2129"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.
2.2224 "Regular Interest" means interest at the rate or rates determined by the Board of
Trustees as provided in Section 8.6(d).
2.2322"Retirant" means a person in receipt of retirement allowance payments under the
Plan on the basis of his service as an Employee.
2.2423 "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.
2.2524"Retirement Plan" or"Plan" means the Miami Beach Employees Retirement Plan
created by this ordinance.
2.2625"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.
2.2728 Deferred Retirement Option Plan (DROP) - A program under which a Member
who has reached the normal retirement date may elect to retire for purposes of the Plan
but continue employment with the City for up to thirty-six (36) months, and have his/her
monthly retirement benefit paid into a DROP account during the DROP period, in
accordance with Section 5.13. Notwithstanding the preceding sentence:
(a) Effective July 17, 2013, Members within classifications in the CWA
bargaining unit who were hired prior to October 27, 2010, and Members not
included in any bargaining unit, who were hired prior to September 10, 2010, may
elect to retire for purposes of the Plan but continue employment with the City for
up to sixty(60)months, and have their monthly retirement benefit paid into a DROP
account during the DROP period, in accordance with Section 5.13.
(b) Effective October 16, 2013, Members within classifications in the GSAF
bargaining unit who were hired prior to July 14, 2010, may elect to retire for
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purposes of the Plan but continue employment with the City for up to sixty (60)
months, and have their monthly retirement benefit paid into a DROP account
during the DROP period, in accordance with Section 5.13.
(c) Effective April 23, 2014, Members within classifications in the AFSCME
bargaining unit who hired prior to September 30, 2010, may elect to retire for
purposes of the Plan but continue employment with the City for up to sixty (60)
months, and have their monthly retirement benefit paid into a DROP account
during the DROP period, in accordance with Section 5.13.
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.
Section 3. Membership
3.01 Every person who on March 18, 2006 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 March 18, 2006 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 March 18, 2006 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 3.0334 herein, who becomes an
Employee on or after March 18, 2006 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 pursuant to Section 3.03.
3.03 Any person serving as an Elected Official or Charter Officer,
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
March 18, 2006, 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.
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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 March 18, 2006 shall
have a one-time, irrevocable option to transfer to this Plan by filing a written election with
the Board within six months from March 18, 2006, but in no event later than the last day
of employment. Employees who elect to participate in this Plan pursuant to this Section
3.053,5 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.
Section 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 March 18, 2006 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 March
18, 2006 during which the Member makes contributions to the Plan in 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 5.095,9(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. 103-353).
(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. 103-353).
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(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.
In addition, for years beginning after December 31, 2008, (i) an individual receiving a
differential wage payment, as defined in Section 3401(h)(2)of the Internal Revenue Code,
shall be treated as an employee of the employer making the payment, (ii) the differential
wage payment shall be treated as compensation, and (iii)the plan shall not be treated as
failing to meet the requirements of any provision described in Section 414(u)(1)(C) of the
Internal Revenue Code by reason of any contribution or benefit which is based on the
differential wage payment.
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 may at any time prior to retirement elect to purchase a maximum
of two years of additional creditable service as provided in Section 4.03.
Notwithstanding any provision of this Section 4.03, effective September 30, 2013,
Members whose classification is included in the CWA bargaining unit and
Members who are not included in any collective bargaining unit shall not be eligible
to purchase additional creditable service under this Section 4.03. Notwithstanding
any provision of this Section 4.03, effective September 30, 2013, Members whose
classification is included in GSAF bargaining unit shall not be eligible to purchase
additional creditable service under this Section 4.03. Notwithstanding any
provision of this Section 4.03, effective April 23, 2015, Members whose
classification is included in the AFSCME bargaining unit shall not be eligible to
purchase additional creditable service under 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 4.044 . An
eligible Member may elect to purchase additional creditable service under this
Section 4.3 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.
2) Full-time employment with another governmental entity.
3) Full-time employment in the private sector performing the same or
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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.
Notwithstanding the preceding sentence, effective July 17, 2013, Members whose
classification is included in the CWA bargaining unit and Members who are not
included in any collective bargaining unit shall make payment in a single lump sum
to the Plan within twelve (12) months following the date of the Members election
to purchase the additional service.
(c) For purposes of this Section 4.0344, 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(4 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 4.3, in no event may the
maximum benefit percentage applicable to the member be exceeded as the result
of any purchase of creditable service.
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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 March 18, 2006, and who
becomes a Member of this Plan on or after March 18, 2006, 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 percent 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 from March 18, 2006 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 4.4, in no event may the maximum benefit 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 March 18, 2006, and who
becomes a Member of this Plan on or after March 18, 2006, may purchase
Creditable Service under this Plan for all or a portion of the period of their
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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 for all service purchased pursuant to this
subsection (b) must be made within six (6) months after March 18, 2006 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 this Section 4.044 , 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
4.044 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
12.0312.3, 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
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service under this Section 4.044:4. A Member must pay off 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 4.044 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 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 4.044,4
shall be deducted from the maximum amount of leave allowed for payout to
the Member upon termination of employment.
(d) Amounts paid or transferred to this Plan for the purchase of creditable
service under this Section 4.044 , 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.
(e) Notwithstanding any other provision of this Section 4.044 , the provisions
of this Section 4.044 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 4.044 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.
01852760-5 (01852760-5 I (01852760-5 1
12
(a) Any Employee who was employed on March 18, 2006, and becomes a
Member of this Plan on or before September 18, 2006, and 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 March 18, 2006.
(b) Notwithstanding the provisions of subsection (a), above, any Employee who
was employed on March 18, 2006 and becomes a Member of this Plan on or before
September 18, 2006, and who was promoted from a classified position to an
unclassified position with no break in City service prior to March 18. 2006 and
received a refund of member contributions from 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 ten
percent (10%) of their annual rate of pensionable, Earnings, multiplied by the
number of years and fractions of a year purchased, plus interest at the rate of 9.0%
calculated from the end of each applicable fiscal year through the date of payment.
Full payment for Creditable Service purchased pursuant to the preceding sentence
must be made within six (6) months from March 18, 2006.
(c) 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 March 18, 2006.
4.06 Purchase of Creditable Service for Initial Probationary Period. Any Member who
did not receive credit under a City retirement plan, other than a Section 457 plan, during
their employment as a provisional or probationary employee, may, at any time prior to
retirement, purchase Creditable Service under this Plan for all or a portion of such
provisional or probationary employment, by paying into the Plan an amount equal to
member contribution rate in effect during the period of such provisional or probationary
employment, plus interest compounded annually based on the regular rate of interest in
effect at the time of the purchase. If the member elects to purchase Credited Service for
less than the entire period of provisional or probationary employment, only the most
recent period of provisional or probationary employment shall be claimed.
Notwithstanding, any other provision of this Section 4.06, in no event may the maximum
benefit percentage applicable to the member be exceeded as the result of any purchase
of Creditable Service.
01852760-5 {01852760-5 1 (01852760-5 1
13
Section 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 March 18, 2006, 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 March 18, 2006, 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 March 18, 2006, 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 March 18, 2006, 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.
01852760-5 {01852760-5 1 101852760-5 I
14
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.
7) Upon attainment of the Member's normal retirement date as provided
for in this subsection (a), the Member's benefits under this Plan shall be fully
vested and nonforfeitable.
(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 March 18, 2006, shall be three percent (3%) of final average monthly
earnings multiplied by creditable service for the first fifteen (15) years 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 March 18, 2006, shall be three percent
(3%) of final average monthly earnings multiplied by creditable service for
the first fifteen (15) years 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 or any Employee classified as "Other" who entered the
service of the City prior to August 1, 1993 and who were Members of the
01852760-5 (01852760-5 ) (01852760-5 1
15
Classified Plan continuously from that date until March 18, 2006, shall be
three percent (3%) of final average monthly earnings multiplied by
creditable service for the first fifteen (15) years 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.
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 March 18, 2006,
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, City Attorney, or City Clerk(from and after December
12, 2012, the date the position of City Clerk became a charter officer of the
City)shall be the sum of four percent(4%)of final average monthly earnings
as an Elected Official or Charter Officer multiplied by the number of years
of creditable service as an Elected Official, City Manager, City Attorney or
City Clerk; plusand the percentage rate in effect under the Classified
System, Unclassified System or this Plan, as applicable, for any other
periods of City employment as a member of such plan(s)1 multiplied by the
final average monthly earnings and the number of years of creditable
service as a member of such plan(s); in such employment; up to a an overall
maximum of eighty percent (80%) of the member's greatest 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, City Attorney or City Clerk 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 l norma retirement benefit payable to a Member who has
,
served as an Elected Official and icy subs egg gently employed, th wiout a break
in service, by the City in another position as a member of this Plan for a
pperi atleast five additienalyears,shalclll be equal to the sum of the
retirement allowance payable based on the membber's creditable service
and final average monthly earnings as an Elected Official, plus the
•retirement allowance payable based on tthee_membber� creditable sepiice
and final average monthly earnings for the period of employment
01852760-5 (01852760-5 ) (01852760-5 1
16
subsequent to service as an Elected Of icial up to a maximum of eighty
e
percent (80%) of final average monthly earnings during employment
subse-guentrto sesfie acarElected Official. In t�he_eventtaa 7Mice.mberc.Tv hoo
has served as an Elected Official and is subsequently employed without a
i
break 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
e
entitled to a benefit from this Plan for the period of employment subsea cent
to seance as an Elected Official but shall be d of and of
�.acrvrc�a�—urr—cr ,�u-r�nun—veep � e�t9--a-�cnxrr�vr
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 March 18, 2006, may retire prior to the normal retirement
date and receive an early retirement benefit in accordance with this Section 5.2.
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 5.1 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 March 18, 2006, 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 March 18, 2006, 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 elect to not receive the refund but instead, in lieu of a refund of
01852760-5 (01852760-5 } (01852760-5 1
17
accumulated employee contributions, apply for a vested retirement allowance in
accordance with this Section 5.4.
(b) Any Member who was a member of the Classified System and became a
Member of this Plan on March 18, 2006, 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) Notwithstanding any other provision of the Plan, effective January 1, 2023,
any Member employed on that date who has served as an Elected Official or
Charter Officer and whose service with the City is terminated voluntarily or
involuntarily on or after that date, after completing four (4) or more years of
creditable service, or in the case of a Member who has served as a City
Commissioner, after completing a full term as defined in Article II, Section 2.02 of
the Miami Beach City Charter, shall be entitled, in lieu of a refund of accumulated
employee contributions, to apply for a vested retirement allowance in accordance
with this Section 5.04.
The vested retirement allowance payable under this Section 5.045 4 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 5.0154 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
01852760-5 {01852760-5 } (01852760-5
18
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, 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.
01852760-5 (01852760-5 } (01852760-5 }
19
(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 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
March 18, 2006, 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
01852760-5 (01852760-5 I (01852760-5 }
20
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 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 Human Resources 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.
01852760-5 (01852760-5 } {01852760-5 1
21
5.06 Active Service Death Benefits
(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 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 March 18, 2006, 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.
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
01852760-5 [01852760-5 ) (01852760-5 )
22
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 5.09 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 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 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.
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
01852760-5 (01852760-5 ) (01852760-5 )
23
•
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.
5.08 Death Benefits for Death During Qualified Military Service. In the case of a death
or disability occurring on or after January 1, 2007, if a Member dies while performing
qualified military service (as defined in Section 414(u)of the Internal Revenue Code), the
survivors of the Member are entitled to any additional benefits (other than benefit accruals
relating to the period of qualified military service) provided under the Plan as if the
Member had resumed and then terminated employment by the City on account of death.
5.09 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 5.09. 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 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.
01852760-5 (01852760-5 } (01852760-5 }
24
(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.
5.10 Refund of Accumulated Employee Contributions
(a) A Member may elect in writing, in a form and manner determined by the
Board, 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.
(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
01852760-5 (01852760-5 ) (01852760-5 )
25
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 5.10 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 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 5.09.
5.11 Post Retirement Adjustments
(a) The benefits payable to Retirants and Pensioners on the effective date of
Ordinance 2006-3504, March 18, 2006, and the benefits commencing in
accordance with Ordinance 2006-3504 on or after such date shall be continued
without change except as increased in accordance with this Section 5.11
(b) "Improvement Factor" for the purpose of this Section 5.11 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.
01852760-5 (01852760-5 I (01852760-5 1
26
(c) The return of a disability Retirant to employment with the City prior to the
normal retirement date in accordance with Section 5.05(g) shall be governed by
said Section 5.05(g). Return of such a person to employment with the City after
the normal retirement date, as defined in Section 5.01(a), or after the date as of
which he ceased to be entitled to a disability retirement allowance pursuant to
Section 5.05(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) 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 5.11, and on each October 1 subsequent to such death the
Improvement Factor shall be applied to the then-current retirement allowance.
5.12 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;
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) Notwithstanding the provisions of paragraph (a) above, the benefits of a
Member hired prior to September 30, 2010 (or October 27, 2010 for members of
the CWA bargaining unit) who terminates employment and at the time of
termination is entitled to a vested retirement allowance not yet payable, does not
receive a refund of Accumulated Employee Contributions, and subsequently
returns to service with the City as an Employee before such allowance has become
payable, shall be determined in accordance with this paragraph (b). Upon
reemployment, such member shall again become a vested Member, and shall
continue to accrue benefits and make contributions to the Plan for creditable
service after the Member's reemployment in accordance with the Plan provisions
in effect on the date of reemployment, except as otherwise provided in this
01852760-5 (01852760-5 ( (01852760-5 1
27
paragraph (b). The Member's benefit for the initial period of employment shall be
three percent (3%) of Final Average Monthly Earnings multiplied by creditable
service accrued during the initial period of employment, and two and one-half
percent (2.5%) of Final Average Monthly Earnings multiplied by creditable service
accrued after reemployment; provided the Member's retirement allowance shall
not exceed eighty percent (80%) of Final Average Monthly Earnings. The
Member's 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.The retiree Cost of Living Adjustment
applied to the member's benefit shall be 2.5% per year applied to the benefit based
on creditable service accrued during the initial period of employment, and 1.5%
per year applied to the benefit based on creditable service accrued after
reemployment. The provisions of this paragraph (b) shall take effect on [effective
date of ordinance) for Members not included in any bargaining unit, but shall not
take effect for bargaining unit Members until the provisions of this paragraph (b)
are agreed to by the City and the union representing the bargaining unit.
(c) Notwithstanding the provisions of paragraph (a) above, the benefits of a
Member hired prior to September 30, 2010 (or October 27, 2010 for members of
the CWA bargaining unit) who terminates employment and at the time of
termination is not entitled to a vested retirement allowance not yet payable, does
not receive a refund of Accumulated Employee Contributions, and subsequently
returns to service with the City as an Employee, shall be determined in accordance
with this paragraph (c). Upon reemployment, such member shall retain his/her
credited service for the initial period of employment, and continue to accrue
benefits and make contributions to the Plan for creditable service after the
Member's reemployment in accordance with the Plan provisions in effect on the
date of reemployment, except as otherwise provided in this paragraph. The
Member's benefit for the initial period of employment shall be three percent (3%)
of Final Average Monthly Earnings multiplied by creditable service accrued during
the initial period of employment, and two and one-half percent (2.5%) of Final
Average Monthly Earnings multiplied by creditable service accrued after
reemployment; provided the Member's retirement allowance shall not exceed
eighty percent(80%)of Final Average Monthly Earnings. The retiree Cost of Living
Adjustment applied to the member's benefit shall be 1.5% per year applied to
benefit based on all years of creditable service. The Member's normal retirement
date shall be the first day of the calendar month coincident with or next following
the attainment of age sixty-two (62) and completion of five (5) or more years of
creditable service. The provisions of this paragraph (c) shall take effect on
'effective date of ordinance) for Members not included in any bargaining unit, but
shall not take effect for bargaining unit Members until the provisions of this
paragraph (b) are agreed to by the City and the union representing the bargaining
unit.
(db) Should a Retirant, other than a disability Retirant restored to service in
accordance with Section 5.05(h). be employed by the City as an Employee, such
Member's retirement benefit shall cease and the Member shall again become a
01852760-5 (01852760-5 ) (01852760-5 )
28
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.
(ee) The return of a disability Retirant to employment with the City prior to the
normal retirement date in accordance with Section 5.05(g) shall be governed by
said Section 5.05(g). Return of such a person to employment with the City after
the normal retirement date, as defined in Section 5.05, or after the date as of which
he ceased to be entitled to a disability retirement allowance pursuant to Section
5.05(h) shall be governed by the provisions of Paragraph (a) or (b) of this Section
5.12, whichever is applicable at the time of such return.
(fd)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.
(q) Notwithstanding the provisions of paragraph (a) above, a Member hired on
or after September 30, 2010 (or October 27 , 2010 for members of the CWA
bargaining unit) who terminates employment, does not receive a refund of
Accumulated Employee Contributions, and subsequently returns to service with
the City, shall again become a Member, and shall continue to accrue benefits and
make contributions to the Plan for creditable service after the Member's
reemployment in accordance with the Plan provisions in effect on the date of
01852760-5 (01852760-5 3 (01852760-5 )
29
reemployment. The Member's creditable service for the initial period of
employment shall be applied for vesting purposes, and the benefit multiplier
applicable to the initial period of employment shall also be applied in calculating
the Member's retirement benefit; provided the Member's retirement allowance
shall not exceed eighty percent (80%) of Final Average Monthly Earnings. The
provisions of this paragraph (g)shall take effect on [effective date of ordinance)for
Members not included in any bargaining unit, but shall not take effect for bargaining
unit Members until the provisions of this paragraph (f) are agreed to by the City
and the union representing the bargaining unit.
5.13 A deferred retirement option plan (DROP) is hereby established for eligible
members as follows:
(a) Eligibility and participation:
1) A Member who attains the normal retirement date shall be eligible to
participate in the DROP.
2) A Member's election to participate in the DROP shall be irrevocable.
A Member may participate in the DROP only once.
3) An eligible Member may participate in the DROP for a maximum of
thirty-six (36) months. Notwithstanding the preceding sentence:
(a) Effective July 17, 2013, Members within classifications in the CWA
bargaining unit, who were hired prior to October 27, 2010, and
Members not included in any collective bargaining unit,who were hired
prior to September 10, 2010, may participate in the DROP for a
maximum of sixty (60)months.
(b) Effective October 1, 2013, Members within classifications in the
GSAF bargaining unit, who were hired prior to July 14, 2010, may
participate in the DROP for a maximum of sixty (60) months.
4) An eligible Member who elects to participate in the DROP must
provide at least thirty (30) days' advance written notice to the City of his or
her election to participate in the DROP. A Member who elects to participate
in the DROP may elect to terminate DROP participation and City
employment sooner than the maximum DROP period, with thirty (30) days'
advance written notice to the City.
5) Effective July 17, 2013, any Member within classifications in the CWA
bargaining unit, and any Member not included in any collective bargaining
unit, who previously executed an election form entitling him/her to participate
in the DROP for a period of less than sixty (60) months and whose DROP
period ceases between July 1, 2013 and July 16, 2016, shall have a one-time
opportunity to submit an irrevocable amended election from provided by the
Board, within thirty (30) calendar days following the effective date of this
01852760-5 (01852760-5 ] (01852760-5
30
ordinance, extending his or her DROP period to a maximum of sixty (60)
months in total. Effective October 16, 2013, any Member within classifications
in the GSAF bargaining unit, who previously executed an election form
entitling him/her to participate in the DROP for a period of less than sixty (60)
months and whose DROP period ceases between October 16, 2013 and
October 15, 2016, shall have a one-time opportunity to submit an irrevocable
amended election from provided by the Board,within thirty(30)calendar days
following the effective date of this ordinance, extending his or her DROP
period to a maximum of sixty(60)months in total. Effective April 23, 2014, any
Member within classifications in the AFSCME bargaining unit,who previously
executed an election form entitling him/her to participate in the DROP for a
period of less than sixty (60) months and whose DROP period ceases
between April 23, 2014 and April 22, 2015, shall have a one-time opportunity
to submit an irrevocable amended election from provided by the Board,within
thirty (30) calendar days following the effective date of this ordinance,
extending his or her DROP period to a maximum of sixty(60)months in total.
(b) DROP plan features:
1) An eligible Member who elects to participate in the DROP will be
considered to have retired for purposes of the Plan upon entry into the DROP,
except that such Member shall be eligible to vote for and serve as an
Employee member of the Board of Trustees during the DROP participation
period. The Member's monthly retirement benefit, determined in accordance
with the Plan based on years of creditable service and final average monthly
earnings at the time the Member enters the DROP, will be paid into the
Member's DROP account every month during the DROP period.
2) No Member contributions shall be required after a Member enters
the DROP, and the Member will not accrue any additional creditable
service or any additional benefits under the Plan after entering the DROP.
No City normal cost contributions shall be required after a Member enters
the DROP and DROP participants shall be excluded from the covered
payroll for the Plan.
3) A Member who elects to participate in the DROP shall not be eligible
for disability or preretirement death benefits under the Plan; nor shall a
Member be eligible for any post retirement adjustment provided in Section
5.11 during the DROP participation period.
4) A Member who elects to participate in the DROP shall retain the earned
balance of annual and sick leave as of the date of entry into the DROP, and
shall continue to earn annual and sick leave during the DROP period, in
accordance with applicable City ordinances. Alternatively, at the time of entry
into the DROP, a Member may request full or partial payment of the earned
balance of annual and sick leave as of the date of entry into the DROP, up to
the maximum allowed by applicable City ordinances for employees who
01852760-5 (01852760-5 ) (01852760-5 )
31
terminate City employment, but reduced by the amount of annual and sick
leave used for the purchase of additional credited service under Section 4.3, if
any, at the Member's rate of compensation upon entering the DROP; provided
that the Member must retain at least 120 hours of accrued sick leave after any
such payment. Upon termination of City employment, a Member who has
participated in the DROP shall be eligible to receive payment for the earned
balance of annual and sick leave as of the date of termination, up to the
maximum allowed by applicable City ordinances for employees who
terminate City employment, but reduced by the amount of annual and sick
leave for which payment was received upon entry into the DROP, if any; and
further reduced by the amount of annual and sick leave used for the purchase
of additional credited service under Section 4.3, if any. In no event shall
payments for accrued annual or sick leave be included in a member's
Earnings for purposes of the Plan.
5) As a condition of participating in the DROP, the Member must agree
to terminate City employment at the conclusion of the DROP period, and to
submit an irrevocable letter of resignation stating this prior to entering the
DROP. A Member who elects to participate in the DROP must also submit
an irrevocable written DROP election prior to entering the DROP on a form
provided by the Board. Notwithstanding the preceding sentence:
(a) Eligible Members who are participants in the DROP on July 1, 2013,
shall be given a one-time opportunity to submit an irrevocable amended
election form, as provided in Section 5.13 (a)5., extending the DROP period
to a maximum of sixty (60) months in total.
(b) Eligible Members who are participants in the DROP on October 1, 2013,
shall be given a one-time opportunity to submit an irrevocable amended
election form, as provided in Section 5.13 (a)5, extending the DROP period
to a maximum of sixty (60) months in total. Notwithstanding the preceding
sentence, eligible Members whose classifications are covered by the
AFSCME bargaining unit who are participants in the DROP on April 23,
2014, shall be given a one-time opportunity to submit an irrevocable
amended election form, as provided in Section 5.13 (a) 5, extending the
DROP period to a maximum of sixty (60) months in total.
6) At the conclusion of the DROP period and upon termination of City
employment, the Member's monthly retirement benefit shall be paid to the
Member in accordance with the Plan. In the event of the Member's death
during or at the conclusion of the DROP period, a benefit may be payable
in accordance with Section 5.07.
7) Participation in the DROP is not a guarantee of City employment,
and DROP participants will be subject to the same terms and conditions of
employment that are applicable to employees who are not DROP
participants.
01852760-5 (01852760-5 1 (01852760-5 }
32
8) During participation in the DROP, the Member's monthly retirement
benefit will be paid into the DROP account, and shall be credited/debited with
earnings/losses as provided herein. The Member may direct that their DROP
account be invested in any of the investment options approved by the Board,
on forms provided by the Board. Any gains on the Member's DROP account
investments shall be credited to the Member's DROP account;and any losses
incurred by the Member shall be deducted from the Member's DROP account
balance, and shall not be made up by the City or the Retirement Plan. A
Member's DROP account shall only be credited or debited with
earnings/losses while the Member is a participant in the DROP.
9) A DROP participant may designate a beneficiary or beneficiaries for
his/her DROP account on a form provided by the Board.
10) Within thirty (30) days following a DROP participant's termination of
City employment or death, whichever occurs first, the Member, or in the
event of the Member's death the Member's designated beneficiary, may
submit a written election on a form approved by the Board, to receive the
Member's entire DROP account balance, which shall be distributed to the
Member(or in the event of the Member's death,to the Member's designated
beneficiary or estate in accordance with paragraph (b)9., below) in a cash
lump sum, unless the Member elects to have all or any portion of an eligible
rollover distribution paid directly to an IRA or eligible retirement plan
specified by the Member in a direct rollover. Any such direct rollover shall
be processed in accordance with Article 12 of the Plan. In the event a
Member or designated beneficiary does not submit a written election to
receive a distribution of the Member's DROP account balance within thirty
(30) days following the Member's termination of City employment or death,
the Member's DROP account shall be maintained by the Plan but shall not
be credited with earnings/losses after thirty (30)days following the Member's
termination of City employment or death.
11) If a DROP participant dies before his or her DROP account is
distributed, the participant's designated beneficiary shall have the same
rights as the participant with respect to the distribution of the DROP
account. If the participant has not designated a beneficiary, the DROP
account balance shall be paid to the Member's estate.
12) The Board of Trustees shall make such administrative rules as are
necessary for the efficient operation of DROP, but shall not adopt any rule
that is inconsistent with this Ordinance or the Plan.
13) The DROP shall be administered so that the Plan remains qualified
under the Internal Revenue Service Code and in compliance with
applicable laws and regulations.
01852760-5 (01852760-5 } [01852760-5 }
33
14) Limit under Section 415(b) of the Internal Revenue Code.
Notwithstanding any other provisions of this Plan, the retirement benefit of
a Member shall be reduced to the extent that it exceeds amounts specified
in Section 415(b) of the Internal Revenue Code. For purposes of the
application of Section 415(b), each Member's compensation shall be
determined in accordance with Section 1.415(c)-2 and shall be defined as
remuneration for services to the City including wages, salaries, fees for
professional services and other amounts for personal services actually
rendered in the course of employment with the City to the extent that such
amounts are included in gross income (or to the extent amounts would
have been received and includible in gross income but for an election under
Internal Revenue Code section 125(a), 132(f)(4), 402(e)(3), 402(h)(1)(B),
402(k) or 457(b)), and compensation in excess of the limitations set forth
in Section 401(a)(17) of the Internal Revenue Code, and regulations
promulgated thereunder, shall be disregarded.
Section 6. Financing
6.01 Assets of Predecessor System
(a) All moneys, investments and assets of the Classified System and
Unclassified System as of March 18, 2006 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 March 18,
2006 shall be credited to each such Member under this Plan on such date as
Accumulated Employee Contributions.
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. Notwithstanding the preceding
sentence, effective July 14, 2010 each Member in a classification within the
AFSCME an GSA bargaining units, and each Unclassified and "Other" Member,
shall contribute to the Plan ten percent (10%) of earnings, except as otherwise
provided in this Section 6.02. Notwithstanding the first sentence of this subsection
(a), effective November 27, 2010, each Member in a classification within the CWA
(MBEBA) collective bargaining unit shall contribute to the Plan ten percent (10%)
of earnings except as otherwise provided in this Section 6.02, and contingent on
state approval of the actuarial impact statement confirming a reduction in the City's
annual required pension contribution for fiscal year 2010-2011 associated with the
pension changes contained in the 2009-2012 CWA collective bargaining
agreement of at least$1,000,050. 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
01852760-5 (01852760-5 1 (01852760-5 I
34
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; all persons entering service with the City prior to February 21, 1994
who are in classifications within the CWA(MBEBA)bargaining unit, and all persons
entering service with the City prior to August 1,1993 who are in classifications
within the GSA bargaining unit or classified as "Other" who were members of the
Classified Plan continuously from the date they entered service with the City until
March 18, 2006, shall contribute to the Plan ten percent (10%) of their earnings
throughout their service as a Member of this Plan. Notwithstanding the preceding
sentence, effective July 14, 2010 each Member described in the preceding
sentence who is in a classification within the AFSCME or GSA bargaining units
shall contribute to the Plan twelve percent(12%)of earnings; and effective January
18, 2010, each Member described in the preceding sentence, classified as"Other"
shall contribute to the Plan twelve percent (12%) of earnings. Notwithstanding the
first sentence of this subsection (b), effective November 27, 2010, each Member
described in the first sentence of this subsection (b)who is in a classification within
the CWA (MBEBA) bargaining unit shall contribute to the Plan twelve percent
(12%) of earnings, contingent on state approval of the actuarial impact statement
confirming a reduction in the City's annual required pension contribution for fiscal
year 2010-2011 associated with the pension change as contained in the 2009-
2012 CWA collective bargaining agreement of at least$1,000,050.
(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 from that date until March 18,
2006, and who became Members of this Plan on March 18, 2006, shall contribute
to the Plan ten percent (10%) of their earnings. Notwithstanding the preceding
sentence, effective January 18, 2010, each Member described in the preceding
sentence shall contribute to the Plan twelve percent (12%) of 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 March 18, 2006, and are not in any bargaining unit, and
members of the Unclassified System who became Members of this Plan on March
18, 2006, 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 12%,
01852760-5 (01852760-5 } (01852760-5 )
35
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 apply to Members in
classifications within the AFSCME and GSA bargaining units upon ratification of a
collective bargaining agreement that provides for such limitation.
(e) Notwithstanding subsections (a) and (b) above, for members who are in
classifications within the AFCSME bargaining unit:
1) For Members hired prior to April 30, 1993, the employee contribution
shall be twelve percent (12%) of earnings effective July 14, 2010 through
April 30, 2013; ten percent (10%) of earnings effective May 1, 2013 through
April 23, 2014; and twelve percent (12%) of earnings effective April 23,
2014.
2) For Members hired on or after April 30, 1993 and before September
30, 2010, the employee contribution shall be ten percent (10%) of earnings
effective July 14, 2010 through April 30, 2013; eight percent (8%) of
earnings effective May 1, 2013 through April 23, 2014; and ten percent
(10%) of earnings effective April 23, 2014.
3) For members hired on or after September 30, 2010, the employee
contribution shall be ten percent (10%) of earnings.
4) The employee contribution provided in paragraphs 1. and 2. above
shall decrease by two percent (2%) of earnings when the Plan actuary
confirms that the City's annual required contribution to the Plan is twenty-
three and one-half percent (23.5%) of pensionable payroll or less. The two
percent decrease in the employee contribution shall take effect on the same
date as the City's annual required contribution of twenty-three and one-half
percent (23.5%) of pensionable payroll or less.
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. Effective September 30, 2013,
the City shall annually contribute no less than the net City's "normal cost" of the
Plan. The net "normal cost" is the annual cost of the Plan net of Member
contribution assigned to the current Plan year. If the net City"normal cost"for any
Plan year exceeds the City's annual required contribution as determined in
accordance with Part VII, Chapter 112, Florida Statutes, the excess shall be held
in reserve as part of Fund assets, designed as the pension stabilization fund, and
shall be used to offset the City's annual required contribution to any Plan year as
determined by the City. The pension stabilization fund shall be accounted for
01852760-5 (01852760-5 1 (01852760-5 )
36
separately and not included as assets of the Fund for Plan's valuation purposes,
and shall be annually credited or debited with gains and losses at the same rate of
return as the overall net market rate of return on Fund investments.
(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.
(d) During the Plan year beginning October 1, 2013, and at least once every
three years thereafter, there shall be an experience study of the Plan's actuarial
assumptions performed by the actuary selected by the City. The actuary shall
make recommendations for any changes and assumptions based on the results of
the experience study. In the event the Board of Trustees or Plan actuary disagrees
with the recommended assumption changes, the Board or Plan actuary shall
present the basis of their disagreement and justify any deviation from the
recommended assumptions to the City Commission.
(e) Effective September 30, 2013, the City shall require five, ten and twenty
year projections of required pension contributions as part of the annual actuarial
valuations for the Plan. These projections shall be based on current actuarial
assumptions for the Plan. The projections shall be updated to reflect the cost of
any proposed benefit enhancement before the City Commission agrees to the
enhancement. The cost of these studies shall be funded separately from the
annual contribution to the pension plan.
01852760-5 {01852760-5 } (01852760-5
37
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.
Section 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 March 18, 2006, 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) 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
01852760-5 [01852760-5 1 (01852760-5 }
38
making of requisite calculations and disbursements under the Preservation of Benefits
Plan.
Section 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:
(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.
01852760-5 (01852760-5 1 (01852760-5 1
39
(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 counsel or 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.
Q) 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 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
01852760-5 (01852760-5 } (01852760-5 )
40
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.
(o) 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 (a) and (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.
Section 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.
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,
01852760-5 (01852760-5 1 (01852760-5 1
41
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 pay or 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.
9.05 Beginning January 1, 2010 the Board shall proceed to sell, redeem, divest, or
withdraw all publicly traded securities of any corporation or other business entity
conducting business with the countries of Sudan and Iran, as follows:
(a) Sections 215.442 and 215.473, Florida Statutes, require the State Board of
Administration (SBA) to make its best efforts to identify "Scrutinized Companies,"
as defined in section 215.473(t), Florida Statutes. The SBA has created a list of
such companies ("scrutinized companies list"), which state law requires be notified
and ultimately divested by the Florida Retirement System (FRS).
(b) The definition of "scrutinized company" as to Sudan generally includes a
company with business operations in Sudan with revenues or assets linked to oil-
related or power-production activities under certain circumstances, is complicit in
Darfur genocide, or the company supplies military equipment within Sudan under
certain conditions.
(c) The definition of "scrutinized company" as to Iran general includes a
company with business operations that involve the Government of Iran or certain
companies, and have revenues or assets linked to Iran and involve oil-related or
mineral-extraction under certain conditions.
(d) "Scrutinized company" also includes any company that is complicit in the
Darfur genocide.
(e) Notwithstanding any provision of this Plan to the contrary, the Board, or its
designee, shall annually survey all corporations or other business entities in which
the assets of the Retirement System are invested in order to ascertain whether
01852760-5 (01852760-5 ( (01852760-5 1
42
any of the assets of the Retirement System are invested in a corporation or other
business entity that is appears on the SBA Scrutinized Companies List, as
periodically amended.
(f) The Board, on or before the first day of January of each year, shall make
available to the public the findings of its survey.
(g) Notice of the provisions of this section shall be given to investment
managers for the Retirement System.
(h) The Board and its named officers or investment advisors may not be
deemed to have breached their fiduciary duty in any action taken to dispose of any
such security, and the Board shall have satisfactorily discharged the fiduciary
duties of loyalty, prudence, and sole and 'exclusive benefit to the members of the
Plan and their beneficiaries if the actions it takes are consistent with the duties
imposed by section 215.473, Florida Statutes\and the manner of the disposition, if
any, is reasonable as to the means chosen.
(i) The divestiture of any security pursuant to this section must be completed
by September 30 of any year following identification of Retirement System assets
invested in a corporation or other business entity appearing on the SBA Scrutinized
Companies List.
Section 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.
(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.
01852760-5 (01852760-5 ) (01852760-5 1
43
(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 5.10
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 requested
to do so, and his services on behalf of the Board shall not be compensated
additionally.
10.03 Legal Counsel
(a) The Board shall be vested with the authority to retain private legal counsel
for representation thereof.
(b) Counsel retained hereunder shall be subject to the approval of the City
Commission.
Section 11. General
11.01 The Assets of the Classified and Unclassified Systems as of March 18, 2006 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.
11.02 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
01852760-5 (01852760-5 I (01852760-5
44
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.
11.03 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.
11.04 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.
11.05 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.
11.06 Any changes in contributions or benefits contained in this Ordinance shall apply
prospectively to Members who are employed by the City on March 18, 2006 who retire
on or after such effective date, and to Members who enter the service of the City after
such effective date.
11.07 Effective as of March 18, 2006, notwithstanding anything herein to the contrary, a
member's benefits shall commence no later than April 1 of the calendar year following the
later of(a)the calendar year in which he or she attains age 70 1/2 or(b)the calendar year
in which the member retires. All distributions from the Plan shall conform to the
regulations issued under Section 401(a)(9) of the Internal Revenue Code, including the
incidental death benefit provision of Section 401(a)(9)(G) of the Internal Revenue Code.
Further, such regulation shall override any Plan provision that is inconsistent with Section
401(a)(9) of the Internal Revenue Code.
11.08 Notwithstanding any other provision of this Plan to the contrary, a form of
retirement income payable from this plan shall satisfy the following conditions:
(a) If the retirement income is payable before the member's death:
1) It shall either be distributed or commence to the member not later than
April 1 of the calendar year following the later of the calendar year in which
the member attains age 70 1/2, or the calendar year in which member
retires;
2) The distribution shall commence not later than the calendar year
defined above; and (a)shall be paid over the life of the member or over the
lifetimes of the member and spouse, issue or dependent, or(b)shall be paid
over the period extending not beyond the life expectancy of the member
and spouse, issue or dependent.
01852760-5 (01852760-5 ) {01852760-5 1
45
Where a form of retirement income payment has commenced in accordance with
the preceding paragraphs and the member dies before his entire interest in the
plan has been distributed, the remaining portion of such interest in the plan shall
be distributed no less rapidly than under the form of distribution in effect at the time
of the member's death.
(b) If the member's death occurs before the distribution of his interest in the plan
has commenced, member's entire interest in the plan shall be distributed within
five years of member's death, unless it is to be distributed in accordance with the
following rules:
1) The member's remaining interest in the Plan is payable to his spouse,
issue or dependent;
2) The remaining interest is to be distributed over the life of the spouse,
issue or dependent or over a period not extending beyond the life
expectancy of the spouse, issue or dependent; and
3) Such distribution begins within one year of the member's death unless
the member's spouse, is the sole designated beneficiary, in which case the
distribution need not begin before the date on which the member would
have attained age 70 1/2 and if the member's spouse dies before the
distribution to the spouse begins, this section shall be applied as if the
spouse were the member.
Section 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
01852760-5 (01852760-5 } (01852760-5 }
46
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. Effective for distributions made after
December 31, 2001, an eligible retirement plan shall also mean an annuity contract
described in Section 403(b) of the Internal Revenue Code and an eligible plan
under Section 457(b)of the Internal Revenue 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 and which agrees to separately account for amounts
transferred into such plan from this Plan.
(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. Effective as of January 1, 2008, an Employee's or former Employee's non-
spouse Beneficiary is a distributee with regard to the interest of the Employee or
former Employee.
(d) Direct rollover: A direct rollover is a payment by the plan to the eligible
retirement plan specified by the distributee. Effective as of January 1, 2008, a non-
spouse Beneficiary may make a direct rollover only to an "inherited" individual
retirement account as described in Section 408(b) of the Internal Revenue Code.
If a non-spouse Beneficiary receives a distribution from the Plan, the distribution is
not eligible for a 60-day (non-direct) rollover.
3. Rollovers or Transfers into the Fund. On or after March 18, 2006, the Plan will
accept an eligible rollover distribution or direct transfer of distribution for the purchase of
credited service pursuant to Section 4.044 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
01852760-5 (01852760-5 1 (01852760-5 1
47
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.
Section 13. Employees hired on or after September 30, 2010
Notwithstanding any other provision of the Plan, for employees hired on or after
September 30, 2010, other than employees hired in classifications within the CWA
(MBEBA) bargaining unit, the provisions of the Miami Beach Employees' Retirement
Plan created by Ordinance 2006-3504, as subsequently amended, shall be applicable,
except as set forth in paragraphs (a) through (i.) below. Notwithstanding any other
provision of the Plan, for employees hired on or after October 27, 2010 in classifications
within the CWA(MBEBA) bargaining unit, the provisions of the Miami Beach Employees'
Retirement Plan created by Ordinance 2006-3504, as subsequently amended, shall be
applicable, except as set forth in paragraphs (a) through (i.) below.
(a) The normal retirement date shall be age 55 with at least thirty (30) years of
creditable service, or age 62 with at least five (5) years of creditable service.
(b) The early retirement date shall be the date on which the member's age plus
years of creditable service equal 75, with a minimum age of 55
(c) Final average monthly earnings shall be an average of the highest five (5)
years of employment.
(d) The benefit multiplier shall be 2.5% multiplied by the member's years of
creditable service, subject to a maximum of 80% of the member's FAME.
(e) The retiree Cost of Living Adjustment shall be 1.5% per year, with the first
adjustment deferred to one year after the end of the DROP.
(f) The employee contribution shall be 10% of salary.
(g) The standard form of benefit shall be a lifetime annuity.
(h) Members who separate from City employment with 5 or more years of
creditable service but prior to the normal or early retirement date shall be eligible
to receive a normal retirement benefit at age 62.
(i) Employees shall be eligible to enter the DROP at the normal retirement age
specified in paragraph a, above, and may participate in the DROP for a maximum
of 5 years.
01852760-5 (01852760-5 ) (01852760-5 }
48
Section 14. Application to Members of the CWA bargaining unit who terminate City
employment following ratification of the 2003-2006 collective bargaining agreement and
before March 18, 2006
•
14.01.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 March 18, 2006, under the following conditions:
(a) On or after February 1, 2006, the employee must submit a letter of
resignation/retirement to their respective Department Head and the City Labor
Relations Director providing a minimum of two (2)weeks notice, (i.e.,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 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.
Section 2. Incorporation by Reference of Resolution No. 2013-28290.
Resolution No. 2013-28290, accepting the recommendations of the Finance and
Citywide Projects Committee at its May 13, 2013 meeting, to adopt the Budget Advisory
Committee's proposed policies and guidelines in order to ensure long term pension
reform, is incorporated herein by reference pursuant to Ordinance No. 2013-3806.
Section 3. Conflicts and Severability.
(a) All Ordinances, and parts of ordinances, in conflict herewith shall be and
the same, are hereby repealed.
(b) 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
01852760-5 (01852760-5 } {01852760-5 }
49
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.
Section 4. Effective Date.
This Ordinance shall take effect the day of. / 9 2023.
PASSED and ADOPTED this day of Apr'. , 2023.
ATTEST: „e,,,,
- tee
INCORP ORAiED MAY DAN GELBER, MAYOR
RAFAEL E. OR ADO, CITY CLERK
(Sponsored by Commissioner David Richardson) MAY 0 2 23?
Underscore denotes new language
Strikethrough denotes deleted language
(Ordinance Nos. 2006-3504, 2006-3530, 2007-3575, 2009-3626, 2009-3664, 2010-3693,
2010-3706, 2013-3806, 2014-3837, 2014-3864, 2015-3946)
APPROVED AS TO
FORM&LANGUAGE
&FOR EXECUTION
City Attorney Date
01852760-5 [01852760-5 [ [01852760-5 1
50
Ordinances-R5 J
MIAMI BEACH
COMMISSION MEMORANDUM
TO: Honorable Mayor and Members of the City Commission
FROM: Rafael A. Paz, City Attorney
DATE: April 28, 2023
2:25 p.m. Second Reading Public Hearing
SUBJECT:AN ORDINANCE OF THE MAYOR AND CITY COMMISSION OF THE CITY
OF MIAMI BEACH, FLORIDA, AMENDING AND RESTATING THE MIAMI
BEACH EMPLOYEES' RETIREMENT PLAN CREATED BY ORDINANCE
NO. 2006-3504, AS SUBSEQUENTLY AMENDED, BY AMENDING
SECTIONS 2, 3, 4, 5, AND 12 OF THE PLAN; PROVIDING FOR
SEVERABILITY; REPEALING ALL ORDINANCES IN CONFLICT
THEREWITH;AND PROVIDING AN EFFECTIVE DATE.
ANALYSIS
See attached Commission Memorandum.
SUPPORTING SURVEY DATA
N/A
FINANCIAL INFORMATION
See attached Commission Memorandum.
Is this a"Residents Right Does this item utilize G.O.
to Know" item. pursuant to Bond Funds?
City Code Section 2-14? •
No No
Legislative Tracking
Office of the City Attorney
Sponsor
Commissioner David Richardson
ATTACHMENTS:
Description
o Commission Memorandum
o Ordinance
Page 517 of 991
❑ Attachment- Updated Actuarial Impact Statement
❑ Attachment-Actuarial Impact Statement
•
Page 518 of 991
M AM BEACH
City of Miami Beach, 1700 Convention Center Drive,Miami Beach,Florida 33139,www.miamibeachfl.gov
COMMISSION MEMORANDUM
TO: Mayor Dan Gelber and Members of the City Commission
FROM: Rafael A. Paz, City Attorney
SECOND READING
DATE: February 22, 2023
SUBJECT: AN ORDINANCE OF THE MAYOR AND CITY COMMISSION OF THE CITY
OF MIAMI BEACH, FLORIDA, AMENDING AND RESTATING THE MIAMI
BEACH EMPLOYEES' RETIREMENT PLAN CREATED BY ORDINANCE
NO. 2006-3504, AS SUBSEQUENTLY AMENDED, BY AMENDING
SECTIONS 2, 3, 4, 5, AND 12 OF THE PLAN; PROVIDING FOR
SEVERABILITY; REPEALING ALL ORDINANCES IN CONFLICT
THEREWITH; AND PROVIDING AN EFFECTIVE DATE.
The proposed Ordinance is sponsored by Commissioner David Richardson and is submitted
for consideration on Second Reading at the February 22, 2023 City Commission meeting.
On February 1, 2023, the Mayor and City Commission adopted the proposed Ordinance on
First Reading. No changes have been made between First and Second Reading.A summary
of the proposed Ordinance is set forth below.
BACKGROUND
This proposed Ordinance, which would amend the Miami Beach Employees' Retirement Plan
(the "Pension Plan"), was originally referred to FERC in 2021. Originally, the item was
intended to solely deal with finding an equitable solution for six (6) employees who were fully
vested in their Tier B pension, left City employment, subsequently returned to City
employment, and re-vested under Tier C of the Pension Plan. This scenario presents
administrative and other challenges because employees would essentially have two (2)
different pensions for their City service, and some of the benefits of the Tier B pension directly
conflict with Tier C, namely the normal retirement age for a Tier B employee is 55, and the
normal retirement age for a Tier C employee is 62.
Page 519 of 991
Commission Memorandum
February 22, 2023
Page 2
The below chart provides detail benefit information of each Tier:
Tier B Tier C
• Age 55 with 5 years of Creditable Service • The earlier of age 55 with 30 years of
• 3% Multiplier Creditable Service or Age 62 with 5 years
• Annual Cost of Living 2.5% of Creditable Service
• 50% Spouse/Domestic Partner Survivor • 2.5% Multiplier
benefit • Annual Cost of Living 1.5%
• Health benefits for retirees hired before • Life Annuity with optional Survivor Benefits
3/18/2006 determined each year as a part • Health benefits for retirees hired before
of the budget process, currently 3/18/2006 determined each year as a part
approximately 50% of premium of the budget process, currently
• Health benefits for retirees hired on or after approximately 50% of premium
3/18/2006 is a stipend of $10 for each • Health benefits for retirees hired on or after
Creditable Year of Service, up to a 3/18/2006 is a stipend of $10 for each
maximum of $250 a month for under age Creditable Year of Service, up to a
65; $5 for each Creditable Year of Service, maximum of $250 a month for under age
up to a maximum of$125 a month for age 65; $5 for each Creditable Year of Service,
65 and older and 62 can be calculated up to a maximum of$125 a month for age
and paid out retroactively. 65 and older.
The below chart provides the eligibility dates for each Pension Plan Tier:
Classification Group Tier A Tier B Tier C
Hired before Hired on or after Hired on or after
AFSCME 4/30/1993 4/30/1993 and 9/30/2010
before 9/30/2010
Hired before Hired on or after Hired on or after
Classified GSA or"Other" 8/1/1993 8/1/1993 and 9/30/2010
before 9/30/2010
Hired on or after Hired on or after
CWA Hired before 2/21/1994 and 10/27/2010
2/21/1994 before 10/27/2010
Hired before Hired on or after Hired on or after
Unclassified N/A 10/18/1992 10/18/1992 and 9/30/2010
before 9/30/2010
At the April 29, 2022 FERC meeting, the Committee members asked the Administration to
continue exploring options that would equitably address the issues for employees who leave
the City and return at a later date.
The referral of this item was initially sponsored by Commissioner Samuelian. After
Commissioner Samuelian's untimely passing, the item was subsequently sponsored by
Commissioner Richardson at the July 29, 2022 FERC Meeting, who has proposed a solution
to the foregoing equity issues for the vested Tier B employees, along with a prospective
2
Page 520 of 991
Commission Memorandum
February 22, 2023
Page 3
solution for other employees who leave City service prior to vesting and subsequently return
to City service.
In addition, Commissioner Richardson has proposed other amendments, to better align the
Pension Plan to the City Charter and City Code, particularly as it relates to Charter Officers
and Elected Officials.
ANALYSIS
The Human Resources Department and the City Attorney's Office have engaged the City's
outside pension counsel to assist with the drafting of the proposed Ordinance amendments,
which are attached as an exhibit to this Committee Memorandum.
The proposed Ordinance amendments provide as follows
1. Resolution for Vested Tier B Members Who Left City Employment and Were
Subsequently Re-employed and Vested in Tier C.The Ordinance allows the vested
Tier B members who terminated employment, did not receive a refund of their
accumulated contributions, and were subsequently reemployed, to continue as a
vested Tier B member following reemployment. For such employees, the member
would receive the benefits of Tier B under a single pension (namely, the more
favorable retirement age of 55 years provided to Tier B members), with the exception
that for each year of service following their re-employment after September 30, 2010,
the pension accrual multiplier for those years shall be the same 2.5% provided to Tier
C members hired after September 30, 2010 (October 27, 2010 for CWA bargaining
unit members). In other words, the members would receive a single pension - with
most of the more favorable Tier B benefits - but with an accrual factor of 3.0% and
COLA of 2.5% for each year of service in Tier B, and an accrual factor of 2.5% and
COLA of 1.5% for each year of service in Tier C after re-employment with the City.
Any former city employee who previously vested in Tier B and subsequently returns
to City employment would benefit from the proposed new rule in the same manner.
2. Resolution for Tier B Employees Who Left City Employment Prior to Vesting and Are
Subsequently Re-Employed by the City in Tier C. There are a few employees with a
period of service in Tier B but who left City employment prior to vesting and were
subsequently re-employed by the City after September 30, 201 0 (October 27, 2010
for CWA bargaining unit members). If the employees did not receive a refund of their
accumulated contributions (i.e., if the employees did not cash out of the Plan), the
proposed Ordinance would allow the employees to count their prior period of service
toward creditable service in Tier C. Once vested in Tier C, the member will receive all
benefits afforded to members in Tier C (including the 1.5% COLA for all periods of
service), with the exception that the pension accrual factor for periods of service under
Tier B would be 3% (the Tier B multiplier), and the pension accrual factor for periods
of service after re-employment would be the standard Tier C multiplier of 2.5%.
3
Page 521 of 991
Commission Memorandum
February 22, 2023
Page 4
3. Resolution for Tier C Employees Who Leave City Employment, and
Subsequently Return to City Employment. The Ordinance resolves the foregoing
issues prospectively for all employees in Tier C, to allow Tier C members who
terminate employment but leave their contributions in the Plan to be re-employed and
continue accruing benefits in accordance with Tier C (with all periods of service in Tier
C counting toward the vested pension benefit under Tier C)
4. Automatic Application for Bargaining Unit Employees Upon Agreement with the
Unions. The Ordinance applies the foregoing provisions immediately to non-
bargaining unit employees, and would apply to bargaining unit employees upon
agreement with the unions.
5. Vesting Period and Benefits for Elected Officials and Charter Officers. With
regard to Charter Officers and Elected Officials, the Ordinance conforms certain Plan
provisions to the City Charter and City Code, and makes other changes as follows:
a. For Elected Officials, provides that an Elected Official is vested in the Plan upon
completion of 4 years of service or one full term, as contemplated in Section 2.03
of the City Charter, which provides that service "in excess of 50 percent of any
term of office shall be considered a full term").
b. The new vesting period for Elected Officials would resolve the inherent equity issue
of requiring a 5 year vesting period for Elected Officials who only serve for a term
of 4 years (for commissioners) or 2 years (for the Mayor), effectively precluding
Commissioners from vesting as members of the Plan unless they seek and are
elected to a second term of office, and precluding the Mayor from vesting as a
member of the Plan unless the Mayor seeks and is elected to three terms of office.
c. For Charter Officers, the proposed Ordinance provides for a vesting period of 4
years (as opposed to the current vesting period of 5 years). In the case of the
Inspector General in particular, a 4-year vesting period for the Inspector General
would align the Plan with Section 2-256(b)(3) of the City Code, which provides that
the Inspector General serves for a term of 4 years, unless the Inspector General
is reappointed by the City Commission for a second four-year term.
d. Adds a definition of"Charter Officers"at Section 2.05, to include the City Manager,
City Attorney, City Clerk and Inspector General.
e. Adds a definition of "Final Average Monthly Earnings" for Elected Officials and
Charter Officers, to mean the highest 5 year average annual earnings, or if the
member has less than 5 years of service, the average for the member's period of
service.
f. Clarifies the benefit calculation provision in Section 5.01 (b)(6)for Elected Officials,
the City Manager, City Attorney and City Clerk, who also have periods of service
in other City positions, to make it clear that the member's benefit will consist of 2
4
Page 522 of 991
Commission Memorandum
February 22, 2023
Page 5
parts: (1) the 4% pension accrual factor applied to the member's final average
monthly earnings for service as an Elected Official, City Manager, City Attorney
and City Clerk; plus (2) the benefit accrual factor otherwise applicable to the
member's other service applied to the member's final average monthly earnings
for the period of other service as a City employee, namely, either a 3% accrual
factor for Tier B periods of service, or a 2.5% accrual factor for Tier C periods of
service.
Finally, due to limitations in State law, the proposed new vesting period and other benefits, if
adopted by the City Commission, could only apply to employees and officers employed or
holding office at the time the Ordinance amendment is adopted. Section 215.425 of the
Florida Statutes, as well as court opinions and Florida Attorney General opinions interpreting
said statute, make clear that government entities are prohibited from expending public funds
to award extra or additional compensation to former employees for work that has already
been performed. The prohibition does not apply if the extra compensation is authorized while
the employee or official is still performing services for the governmental entity. Thus, the
pension changes in the ordinance would not apply to former Elected Officials and any
employee who was not employed by the City at the time the ordinance takes effect. However,
the provisions outlined above in Sections 1-3 and 5(g)would apply to a former Elected Official
or any other employee who returns to City service in a position covered by the Plan.
FINANCIAL IMPACT
Pursuant to Section 112.63 of the Florida Statutes, a statement of the actuarial impact of the
proposed change upon the local retirement system shall be provided prior to the final adoption
of the proposed Ordinance.
RAP/ag
5
Page 523 of 991
FOSTER & FOSTER
April 6,2023
Board of Trustees
City of Miami Beach
General Employees' Pension Board
Re: City of Miami Beach Employees' Retirement Plan
Dear Board:
As requested,we are writing to provide a supplementary explanation of the cost impact for the proposed
benefit changes set forth in our March 19,2023 actuarial impact statement. The cost,impact, determined
as of October 1,2021,applicable to the fiscal year ending September 30,2023, is as follows,when
compared to the contribution requirements under the current benefit structure as calculated in the October
1,2021 actuarial valuation report prepared by Gabriel,Roeder,Smith&Company(GRS).
Proposed Current
(Foster&Foster) (GRS)
Minimum-Required Contribution $38,772,056 $38,258,786
Member Contributions(Est.) 9,152,572 9,155,767
City Required Contribution $29,619,484 $29,103,019
Please find below a breakdown of the impact for each category of employees affected by the proposed
benefit changes:
Cost Impact
Benefit Changes for Elected Officials: $25,693
Benefit Changes for Charter Officers: $33,340
Benefit Changes for Tier B and Tier C Rehires: $57,744
Any additional impact was due to the transition of actuarial firms from GRS to Foster& Foster. A
preliminary step in preparing the Actuarial Impact Statement was replicating the October 1,2021
actuarial valuation results produced by GRS. It is important to keep in mind that slight differences in
actuarial methods or software can combine to produce differences of up to 5%,which is the industry-
accepted margin for determining whether results have been sufficiently replicated. We were able to
replicate the Actuarial Accrued Liability and Normal Cost within 0.7%and-1.1%,respectively.
Sincerely,
.,4 (Aft,o..Calt.fiZAS)1,
Sara E. Carlson,ASA,EA,MAAA
13420 Parker Commons Blvd.,Suite 104 Fort Myers,FL 33912•(239)433-5500•Fax(239)481-0634•www.foster-foster.com
Page 574 of 991
FOSTER & FOSTER
March 19,2023
Board of Trustees
City of Miami Beach
General Employees' Pension Board
Re: City of Miami Beach Employees' Retirement Plan
Dear Board:
Enclosed is the following material,which has been prepared in support of the proposed changes to the
Fund:
1. Three(3)copies of the required Actuarial Impact Statement,which outlines the costs associated with
implementing the changes.
2. Draft of transmittal letters to the Bureau of Local Retirement Systems.
It will be necessary for the Chairman to sign each copy of the Actuarial Impact Statement as the Plan
Administrator and forward the Impact Statement,along with a copy of the proposed Ordinance,to the
Bureau prior to final reading.
If you have any questions concerning the enclosed material,please let us know.
Sincerely,
,e)&744,C6A.52aA-Srt
Sara E.Carlson,ASA, EA, MAAA
SEC/Ike
Enclosures
13420 Parker Commons Blvd.,Suite 104 Fort Myers,FL 33912•(239)433-5500•Fax(239)481-0634•www.foster-foster.com
Page 575 of 991
Mr. Keith Brinkman •
Bureau of Local Retirement Systems
Division of Retirement
3189 S. Blair Stone Rd.
Tallahassee, FL 32301
Re: Actuarial Impact Statement
Dear Mr. Brinkman:
The City of Miami Beach is considering the implementation of amended retirement benefits for its
General Employees. The changes are described in the enclosed material.
' Pursuant to Section 22d-1.04 of the Agency Rules,we are enclosing the required Actuarial Impact
Statement(AIS)and a copy of the proposed Ordinance for your review.
If you have any questions or if additional information is needed,please contact us.
Sincerely,
Page 576 of 991
CITY OF MIAMI BEACH
EMPLOYEES' RETIREMENT PLAN
ACTUARIAL IMPACT STATEMENT
March 19,2023
Attached hereto is a comparison of the impact on the Minimum Required Contribution(per Chapter 112,
Florida Statutes)and the Required City Contribution,resulting from the implementation of the following
changes:
➢ Effective January 1,2023,for Members who have served as an Elected Official or
Charter Officer and terminate employment,retire,or enter DROP,"Final Average
Monthly Earnings"means the average of the best 5 years of earnings.
➢ For Members who have served as an Elected Official or Charter Officer on and after
December 12,2012,benefits earned as an Elected Official or Charter Officer are
determined as 4%of final average monthly earnings multiplied by years of creditable
service as an Elected Official or Charter Officer. Benefits for service in other roles are
calculated separately based on the benefit multiplier,final average monthly earnings,and
creditable service applicable to the service in that role.
➢ Members who have served as an Elected Official or Charter Officer become 100%vested
at 4 years of creditable service.
➢ For Members who terminated vested under Tier B provisions and were re-hired under
Tier C provisions,
o The benefit for the Tier B service is based on the Tier B benefit multiplier(3.0%)
and receives the Tier B COLA(2.5%)
o The benefit for the Tier C service is based on the Tier C benefit multiplier(2.5%)
and receives the Tier C COLA(1.5%).
o Eligibility for both benefits is based on Tier B provisions(e.g.Normal
Retirement Date of age 55 with 5 years of creditable service).
➢ For Members who terminated non-vested under Tier B provisions,did not receive a
refund of contributions,and were re-hired under Tier C provisions,
o The benefit for the Tier B service is based on the Tier B benefit multiplier
(3.0%).
o The benefit for the Tier C service is based on the Tier C benefit multiplier
(2.5%).
o Eligibility for both benefits is based on Tier C provisions(e.g.Normal
Retirement Date of age 55 with 30 years of creditable service or age 62 with 5
years of creditable service)and both benefits are subject to the Tier C COLA
(1.5%).
Page 577 of 991
City of Miami Beach Employees'Retirement Plan FOSTER&FOSTER 13
> For Tier C Members who terminate employment and are re-employed,the service from
the initial period is included when calculating benefits and the benefit is based on the
benefit rate applicable to initial period of service.
The cost impact,determined as of October 1,2021,applicable to the fiscal year ending September 30,
2023,is as follows,when compared to the contribution requirements under the current benefit structure as
calculated in the October 1,2021 actuarial valuation report prepared by Gabriel, Roeder, Smith&
Company(GRS).
Proposed Current
(Foster&Foster) (GRS)
Minimum Required Contribution $38,772,056 $38,258,786
Member Contributions(Est.) 9,152,572 9,155,767
City Required Contribution $29,619,484 $29,103,019
Page 578 of 991
City of Miami Beach Employees'Retirement Plan FOSTER&FOSTER 14
CITY OF MIAMI BEACH
EMPLOYEES' RETIREMENT PLAN
ACTUARIAL IMPACT STATEMENT
March 1'9,2023
Unless otherwise noted,all data,assumptions, methods and plan provisions are the same as in the October
1,2021 actuarial valuation report. It should be noted that changes to retirement benefits could potentially
affect participants' retirement or termination behavior. We will monitor and advise of any recommended
changes with future experience studies.
Future actuarial measurements may differ significantly from the current measurements presented in this
report for a variety of reasons including: changes in applicable laws,changes in plan provisions;changes
in assumptions,or plan experience differing from expectations. Due to the limited scope of the analysis,
we did not perform an analysis of the potential range of such future measurements.
Please note that contents of this analysis and the October 1,2021 actuarial valuation report are considered
an integral part of the actuarial opinions. In reviewing the results presented in this study, it should be
noted that there are risks that may not be inherently apparent to the reader that should be carefully
considered. For key risks,please see the Discussion of Risk section of the October 1,2021 actuarial
valuation report.
In performing the analysis,we used third-party software to model (calculate)the underlying liabilities and
costs.These results are reviewed in the aggregate and for individual sample lives.The output from the
software is either used directly or input into internally developed models to generate the costs. All
internally developed models are reviewed as part of the process. As a result of this review,we believe that
the models have produced reasonable results. We do not believe there are any material inconsistencies
among assumptions or unreasonable output produced due to the aggregation of assumptions.
The changes presented herein are in compliance with Part VII,Chapter 112, Florida Statutes and Section
14,Article X of the State Constitution. The undersigned is familiar with the immediate and long-term
aspects of pension valuations and meets the Qualification Standards of the American Academy of
Actuaries necessary to render the opinions contained herein.
jejalL4,CIP194-6)A,
Sara E. Carlson,ASA, EA,MAAA
Enrolled Actuary#20-8546
STATEMENT OF PLAN ADMINISTRATOR
The prepared information presented herein reflects the estimated impact of the proposed Ordinance.
Chairman, Board of Trustees
Page 579 of 991
City of Miami Beach Employees'Retirement Plan FOSTER&FOSTER 15
COMPARATIVE SUMMARY OF PRINCIPAL VALUATION RESULTS
New Benefits Old Benefits(GRS)
10/1/2021 10/1/2021
A. Participant Data
Actives 1,185 1,185
Service Retirees 933 933
DROP Retirees 101 101
Beneficiaries 166 166
Disability Retirees 25 25
Terminated Vested 2 106 110
•
Total 2,516 2,520
Payroll Under Assumed Ret. Age 88,200,899 88,213,744
Annual Rate of Payments to:
Service Retirees 46,111,001 46,111,003
DROP Retirees 4,965,559 4,965,560
Beneficiaries 3,732,108 3,732,108
Disability Retirees 878,517 878,516
Terminated Vested 2 2,755,561 2,793,353
B. Assets
Actuarial Value(AVA) ' 754,950,350 754,950,350
Market Value(MVA) 831,931,524 831,931,524
C. Liabilities
Present Value of Benefits
Actives
Retirement Benefits 325,524,305 323,637,282
Disability Benefits 14,059,308 8,794,475
Death Benefits - 5,355,385 3,563,411
Vested Benefits 30,238,517 36,119,739
Refund of Contributions 1,770,906 1,613,453
Service Retirees,DROP Retirees,and Beneficiaries 674,832,417 674,335,672
Disability Retirees 9,406,855 9,415,122
Terminated Vested 2 27,580,097 27,339,081
Total 1,088,767,790 1,084,818,235
Page 580 of 991
City of Miami Beach Employees'Retirement Plan FOSTER&FOSTER 6
New Benefits Old Benefits(GRS)
C. Liabilities-(Continued) 10/1/2021 10/1/2021
Present Value of Future Salaries 788,159,392 791,402,539
Normal Cost(Retirement) 11,635,850 12,039,153
Normal Cost(Disability) 948,547 665,687
Normal Cost(Death) 368,448 220,563
Normal Cost(Vesting) 2,084,419 2,425,862
Normal Cost(Refunds) 675,606 491,183
Total Normal Cost 15,712,870 15,842,448
Present Value of Future
Normal Costs 129,088,936 132,904,453
Accrued Liability(Retirement) 230,913,805 N/A
Accrued Liability(Disability) 5,817,641 N/A
Accrued Liability(Death) 2,365,327 N/A
Accrued Liability(Vesting) 7,598,267 N/A
Accrued Liability(Refunds) 1,164,445 N/A
Accrued Liability(Inactives) ` 2 711,819,369 N/A
Total Actuarial Accrued Liability(EAN AL) 959,678,854 951,913,782
Unfunded Actuarial Accrued
Liability(UAAL) 204,728,504 196,963,432
Funded Ratio(AVA/EAN AL) 78.7% 79.3%
Page 581 of 991
City of Miami Beach Employees'Retirement Plan FOSTER&FOSTER 7
D. Actuarial Present Value of New Benefits Old Benefits(GRS)
Accrued Benefits 10/1/2021 10/1/2021
Vested Accrued Benefits
Inactives ' 711,819,369 711,089,875
•
Actives 113,380,180 120,242,041
Member Contributions 73,651,478 73,651,478
Total 898,851,027 904,983,394
Non-vested Accrued Benefits 188,472 18,683,718
Total Present Value
Accrued Benefits(PVAB) 899,039,499 923,667,112
Funded Ratio(MVA/PVAB) 92.5% 90.1%
Increase(Decrease)in Present Value of
Accrued Benefits Attributable to:
Plan Amendments 430,963
Benefit Changes 0
Plan Experience 0
Benefits Paid 0
Interest 0
Other 0
Total 430,963
Page 582 of 991
City of Miami Beach Employees'Retirement Plan FOSTER&FOSTER 18
New Benefits Old Benefits(GRS)
Valuation Date 10/1/2021 10/1/2021
Applicable to Fiscal Year Ending 9/30/2023 9/30/2023
E.Pension Cost
Normal Cost 2 $16,844,197 $16,983,104
Administrative Expenses 3 807,246 807,246
Payment Required to Amortize
Unfunded Actuarial Accrued
Liability over 28 years
(as of 10/1/2021)3 ° . 21,120,613 20,468,436
Minimum Required Contribution 38,772,056 38,258,786
Expected Member Contributions 3 ° 9,152,572 9,155,767
Expected City Contribution 29,619,484 29,103,019
' The asset values and liabilities do not include accumulated DROP Plan Balances as of
9/30/2021.
2 Headcounts for vested terminated members show a decrease due to the benefit change;
benefits for prior periods of service were previously valued under a Vested Terminated record but are
now valued under the employee's active record. The extra Vested Terminated records were eliminated.
3 Contributions developed as of 10/1/2021 displayed above have been adjusted to account for assumed
interest.
° Utilizes the 9.68%effective Member Contribution Rate provided in the October 1,2021 actuarial
valuation report prepared by GRS.
Page 583 of 991
City of Miami Beach Employees'Retirement Plan FOSTER&FOSTER 9
The following summaries of valuation assumptions,valuation methods,and plan provisions are as
shown in the October 1,2021 actuarial valuation report prepared by Gabriel, Roeder, Smith and
Company.
Page 584 of 991
City of Miami Beach Employees'Retirement Plan FOSTER&FOSTER 10
ACTUARIAL ASSUMPTIONS AND COST METHOD
Both the economic and decrement assumptions were established following the Experience Investigation
for the Seven Years Ended September 30, 2017. The investment return and salary increase assumptions
have been adjusted in accordance with subsequent analyses.The covered group is too small to provide
statistically significant experience on which to base the mortality assumption. Mortality is based on a
commonly used mortality table and projection scale.
Valuation Methods
Actuarial Cost Method-Normal cost and the allocation of benefit values between service rendered before
and after the valuation date were determined using an Individual Entry-Age Actuarial Cost Method having
the following characteristics:
•
(i) the annual normal cost for each individual active member,payable from the date of
employment to the date of retirement,is sufficient to accumulate the value of the member's
benefit at the time of retirement;
(ii) each annual normal cost is a constant percentage of the member's year by year projected
covered pay.
Actuarial gains/(losses),as they occur, reduce(increase)the Unfunded Actuarial Accrued Liability.
Financing of Unfunded Actuarial Accrued Liabilities-Unfunded Actuarial Accrued Liabilities(full funding
credit if assets exceed liabilities)were amortized by level(principal&interest combined)dollar contributions
over a reasonable period of future years.
Actuarial Value of Assets-The Actuarial Value of Assets phase in the difference between the expected
actuarial value and actual market value of assets at the rate of 20%per year. The Actuarial Value of Assets
will be further adjusted to the extent necessary to fall within the corridor whose lower limit is 80%of the
Market Value of plan assets and whose upper limit is 120%of the Market Value of plan assets. During periods
when investment performance exceeds the assumed rate,Actuarial Value of Assets will tend to be less than
Market Value. During periods when investment performance is less than assumed rate,Actuarial Value of
Assets will tend to be greater than Market Value.
Valuation Assumptions
The actuarial assumptions used in the valuation are shown in this Section. These assumptions were
established following the Experience Investigation for the Seven Years Ended September 30,2017,dated
March 11,2019.The mortality assumption is mandated by Chapter 112.63, Florida Statutes.
Economic Assumptions
The investment return rate assumed in the valuation is 7.20%per year,compounded annually(net after
investment expenses).
The Wage Inflation Rate assumed in this valuation is 2.5%per year. The Wage Inflation Rate is defined to be
the portion of total pay increases for an individual that are due to macroeconomic forces including
productivity, price inflation,and labor market conditions.The wage inflation rate does not include pay
changes related to individual merit and seniority effects.
Page 585 of 991
City of Miami Beach Employees'Retirement Plan FOSTER&FOSTER I 1 I
The Price Inflation Rate assumed this year is 2.5%per year. The Price Inflation Rate is defined to be the
long-term rate of annual increases in goods and services.
The assumed real rate of return over inflation is defined to be the portion of total investment return
that is more than the assumed inflation rate. Considering other economic assumptions,the 7.20%
investment return rate translates to an assumed real rate of return over inflation of 4.70%.
Rates of salary increases used are in accordance with the following table.This assumption is used to project
a member's current salary to the salaries upon which benefits will be based.
% Increase in Salary
Years of Merit and Wage Total
Service Seniority Inflation Increase
•
1-5 3.60% 2.5% 6.10%
6-10 2.50% 2.5% 5.00%
11-15 2.00% 2.5% 4.50%
16-20 1.75% 2.5% 4.25%
21+ 1.25% 2.5% 3.75%
Demographic Assumptions
The mortality rates used in the valuation are based on the PUB-2010 Headcount Weighted Mortality
Tables described below,with mortality improvements projected to all future years after 2010 using
Scale MP-2018. No mortality improvements are projected for disabled lives:
Pre-Retirement PUB-2010 Table Post-Retirement PUB-2010 Table
Female Healthy Headcount Weighted General Below Headcount Weighted General Below
Median Employee Female Table Median Healthy Retiree Female Table
Male Healthy Headcount Weighted General Below Headcount Weighted General Below
Median Employee Male Table,set Median Healthy Retiree Male Table,set
back 1 year back 1 year
Female Disabled N/A Headcount Weighted General Disabled
Retiree Female Table,set forward 3
years
Male Disabled N/A Headcount Weighted General Disabled
Retiree Male Table,set forward 3 years
These are the same rates as used by the Florida Retirement System (FRS) in their July 1,2021 Actuarial
Valuation Report for Regular Class Members(other than K-12 School Instructional Personnel). Florida
Statutes Chapter 112.63(1)(f) mandates the use of the same mortality tables from either of the two
most recently published actuarial valuation reports of FRS.
Page 586 of 991
City of Miami Beach Employees'Retirement Plan FOSTER&FOSTER 112
The following table presents post-retirement mortality rates and life expectancies at illustrative ages.
These assumptions are used to measure the probabilities of each benefit payment being made after
retirement:
FRS Healthy Post-Retirement Mortality for Regular Class Members
Sample Probability of Future Life
Attained Dying Next Year Expectancy(years)
Ages(in 2021) Men Women Men Women
50 0.19 % 0.58 % 33.14 36.95
55 0.96 0.58 28.77 32.50
60 1.14 0.60 24.68 27.96
65 1.29 0.69 20.63 23.39
70 1.80 1.09 16.62 18.91
75 2.86 1.89 12.91 14.73
80 4.83 3.41 9.63 10.98
The following table presents pre-retirement mortality rates and life expectancies at illustrative ages.These
assumptions are used to measure the probabilities of active members dying prior to retirement(25%of
deaths are assumed to be service-connected).
FRS Healthy Pre-Retirement Mortality for Regular Class Members
Sample Probability of Future Life
Attained Dying Next Year Expectancy(years)
Ages(in 2021) Men Women Men Women
50 0.19 % 0.11 % 37.72 40.26
55 0.30 0.17 32.71 35.14
60 0.46 0.26 27.85 30.11
65 0.65 0.37 23.17 25.19
70 0.90 0.56 18.62 20.37
75 1.35 0.93 14.19 15.68
80 2.13 1.58 9.89 11.17
The following table presents disabled post-retirement mortality rates and life expectancies at illustrative
ages:
FRS Disabled Mortality for Regular Class Members
Sample Probability of Future Life
Attained Dying Next Year Expectancy(years)
Ages(in 2021) Men Women Men Women
50 2.02 % 1.64 % 20.99 23.92
55 2.53 1.91 18.18 20.88
60 3.08 2.27 15.50 17.88
65 3.93 2.83 12.94 14.91
70 5.08 3.79 10.53 12.07
75 6.98 5.46 8.29 9.45
80 10.12 8.31 6.33 7.19
Page 587 of 991
City of Miami Beach Employees'Retirement Plan FOSTER&FOSTER l 13
The rates of retirement used to measure the probability of eligible members retiring during the next year are
shown in the table below.
Normal Retirement Rates
Years of Service Age Assumed Rate of
5-9 50-54 5.0%
55-59 7.0
60-64 10.0
65-69 20.0
70-74 50.0
75+ 100.0
10-14 50-54 5.0
55-59 10.0
60-64 20.0
65-69 20.0
70-74 50.0
75+ 100.0
15-19 50-54 20.0
55-59 15.0
60-64 20.0
65-69 25.0
70-74 50.0
75+ 100.0
20-24 50-54 30.0
55-59 30.0
60-64 25.0
65-69 50.0
70-74 50.0
75+ 100.0
25-29 50-54 70.0
55-59 60.0
60-64 50.0
65-69 50.0
70-74 50.0
75+ 100.0
30+ 50-54 100.0
55-59 100.0
60-64 100.0
65-69 100.0
70-74 100.0
75+ 100.0
The rate of retirement is 5%for each year of eligibility for early retirement.
It is assumed that 80%of retirees will enter the DROP and those that do will remain in the DROP for 5
years. For this reason,we assume the COLA will be delayed 4 years from retirement.
Page 588 of 991
City of Miami Beach Employees'Retirement Plan FOSTER&FOSTER 114
Rates of separation from active membership were as shown below(rates do not apply to members eligible ,
to retire and do not include separation on account of death or disability). This assumption measures the
probabilities of members remaining in employment.
Sample Years of %of Active Members
Ages Service Separating Within Next Year
•
ALL 0 12.50 %
1 12.00
2 10.00
3 8.50
4 6.00
20 5&Over 6.75
25 6.75
30 4.75
35 4.75
40 3.25
45 2.50
50 2.50
55 2.50
Rates of disability among active members are shown in the table below(50%of disabilities are assumed to
be service connected).
Sample %Becoming Disabled
Ages Within Next Year
25 0.03 %
30 0.03
35 0.05
40 0.07
45 0.11
50 0.17
55 0.23
60 0.37
65 0.56
Changes Since Previous Valuation
• The investment return assumption was lowered from 7.4%to 7.2%.
• Effective October 1,2021,the period over which changes to the Unfunded Actuarial Accrued
Liability(UAAL)was reduced from 29 years to 28 years.
Page 589 of 991
City of Miami Beach Employees'Retirement Plan FOSTER&FOSTER 15
Miscellaneous and Technical Assumptions
Administrative&Investment The investment return assumption is intended to be the return net of
Expenses investment expenses. Annual administrative expenses are assumed to be
the average of non-investment related expenses averaged over the last two
years. Assumed administrative expenses are added to the Normal Cost.
Benefit Service Service rounded to the nearest month is used to determine the amount of
benefit payable.
Decrement Operation Disability and mortality decrements operate during retirement eligibility.
Decrement Timing . Decrements of all types are assumed to occur at the beginning of the year.
Eligibility Testing Eligibility for benefits is determined based upon the age nearest birthday and
service nearest whole year on the date the decrement is assumed to occur.
Forfeitures For vested separations from service, it is assumed that 0%of members
separating will withdraw their contributions and forfeit an employer
financed benefit. It was further assumed that the liability at termination is
the greater of the vested deferred benefit(if any)or the member's
accumulated contributions.
Incidence of Contributions Employer contributions are assumed to be made in full on the first day of the
fiscal year. Member contributions are assumed to be received continuously
throughout the year based upon the computed percent of payroll shown in
this report,and the actual payroll payable at the time contributions are
made.
Marriage.Assumption 85%of males and 85%of females are assumed to be married for purposes of
death-in-service benefits. Male spouses are assumed to be three years older
than female spouses for active member valuation purposes.
Normal Form of Benefit 50%joint and survivor annuity; life annuity for members hired after
September 30,2010.
Pay Increase Timing Middle of fiscal year.This is equivalent to assuming that reported pays
represent amounts paid to members during the year ended on the valuation
date.
Cost of Living Increase 2.5%per year for Tier A and Tier B members;1.5%per year for Tier C
members. Increases are assumed to begin 4 years after retirement. This
assumption reflects the COLA delay for DROP members.
Maximum Benefits The maximum accrued benefit payable as a life annuity reflects the 415(b)
limit ($230,000 for 2021 for ages 62 through 65).The limitation is projected
to increase by 3% per year and is adjusted for other commencement ages
based on IRS regulations.
Page 590 of 991
City of Miami Beach Employees'Retirement Plan FOSTER&FOSTER 1 16
SUMMARY OF PLAN PROVISIONS
Effective Date
September 30,2010 under Ordinance No.2010-3693 and Ordinance No.2010-3706. Most
recent amendments were Ordinance No.2021-4423 effective July 3,2021 and Ordinance No.
2015-3946 effective June 10,2015.
Eligibility
Each general employee who works more than 30 hours per week is eligible for membership
on his date of employment
Creditable Service
Service credited under the predecessor system plus service after such date with respect to
which member contributions are made.
Tiers of Employees
Tier C—All members hired on or after September 30,2010(October 27,2010 for members
of CWA)
Tier B—Members of AFSCME hired on or after April 30, 1993; members classified as GSA or
"Other"hired on or after August 1, 1993; members of CWA hired on or after February 21,
1994;and Unclassified members hired on or after October 18,1992.
Tier A—All other members
Earnings
For Tier B and C members,base pay including longevity,but excluding overtime,shift
differential or extra compensation allowances. For Tier A members,actual salary or wages
received. Earnings do not include lump sum payments of unused sick or vacation time.
Overtime pay for Classified Tier A members is limited to 10%of regular pay.
Final Average Monthly Earnings(FAME)
One-twelfth of average annual Earnings during the two highest paid years of Creditable
Service,not less than the average monthly earnings for the 12 months as of March 8,2006
for Unclassified Tier A members
Effective September 30,2010 averaging period is five years except for members who are less
than five years away from normal retirement eligibility. Members who are eligible for
normal retirement within two years or less as of September 30,2010 will have average
earnings of two years. Members who are eligible for normal retirement in within three years
as of September 30,2010 will have average earnings of three years. Members who are
eligible for normal retirement within four years as of September 30,2010 will have average
earnings of four years.
Page 591 of 991
City of Miami Beach Employees'Retirement Plan FOSTER&FOSTER l 17
Normal Retirement
Eligibility Age 50 and five years of Creditable Service for those in Tier A
Age 55 and five years of Creditable Service for those in Tier B
Age 55 with 30 years of service or age 62 with 5 years of service for
those in Tier C
Benefit 3%of FAME multiplied years of Creditable Service with the total not to
exceed 80%of FAME. There is a 90%cap for certain Tier A members.
4%of FAME multiplied years of Creditable Service with the total not to
exceed 80%of FAME for the City Clerk.
2.5%of FAME multiplied years of Creditable Service with the total not
to exceed 80%of FAME for Tier C members.
Form of Benefit 50%joint and survivor annuity payable only to the spouse or, if no
spouse,to the surviving children until age 21;other options are also
available. Spouse's benefits cease upon remarriage.
Life annuity for Tier C members
COLA 2.5%for Tier A and Tier B members; 1.5%for Tier C members
Early Retirement
Eligibility Tier B members of the General Plan whose total of age plus service is
75,not earlier than age 50
Tier C members whose total of age plus service is 75, not earlier than
age 55
Benefit Accrued pension actuarially reduced for number of years by which
Early Retirement Date precedes Normal Retirement Date.
Form of Benefit 50%joint and survivor annuity payable only to the spouse or,if no
spouse,to the surviving children until age 21;other options are also
available. Spouse's benefits cease upon remarriage.
Life annuity for Tier C members
COLA 2.5%for Tier A and Tier B members; 1.5%for Tier C members
Delayed Retirement
Eligibility Any time after the Normal Retirement Date.
Benefit Calculated in the same manner as the Normal Retirement Benefit but
using the FAME and Creditable Service as of the actual retirement
date.
Page 592 of 991
City of Miami Beach Employees'Retirement Plan FOSTER&FOSTER 18
Form of Benefit 50%joint and survivor annuity payable only to the spouse or,if no
spouse,to the surviving children until age 21;other options are also
available. Spouse's benefits cease upon remarriage.
Life annuity for Tier C members
COLA 2.5%for Tier A and Tier B members; 1.5%for Tier C members
Disability Benefits
Eligibility A total and permanent disability which renders a member
incapacitated for the further performance of duty. Five years of
Creditable Service is also required unless the disability is service-
connected.
Benefit Ordinary Disability:Accrued retirement benefit,without reduction,
with a minimum of 35%of FAME.
Service-Connected Disability:Accrued retirement benefit without
reduction,with a minimum of 65%of FAME;75%of FAME minimum
for General Tier A members.
Such amounts are reduced by workers'compensation benefits and,in
certain cases,earned income will be considered in offsetting the
benefit. The period of disability shall be included in Creditable Service
for purposes of computing normal retirement benefits when a
disability retiree reaches normal retirement age.
Form of Benefit 50%joint and survivor annuity payable only to the spouse or, if no
spouse,to the surviving children until age 21;other options are also
available. Spouse's benefits cease upon remarriage.
Life annuity for Tier C members
COLA 2.5%for Tier A and Tier B members; 1.5%for Tier C members
Preretirement Death Benefits
For a member who has at least three years of Creditable Service but who dies before
commencement of retirement benefits,a monthly benefit is payable to the spouse or,if no
spouse,to the children until age 21. The benefit is equal to 50%of the accrued normal
retirement benefit without reduction with the result being a minimum of 30%of FAME and a
maximum of 40%of FAME for General members.
Termination Benefits
Any member who terminates employment and does not request a refund of his own
contributions and has completed at least five years of Creditable Service will be eligible to
receive his accrued benefit upon reaching his normal retirement age.
Page 593 of 991
City of Miami Beach Employees'Retirement Plan FOSTER&FOSTER 119
Contributions
Tier A Members 12%of Earnings.
Tier B and Tier C
Members 10%of Earnings.
Employees who have reached the applicable benefit accrual cap
(90%for General Tier A employees and 80%for all others)but have
not yet reached retirement age will continue to contribute to the
pension Plan, but only on the amount by which pay increases after
reaching the cap
From the City The amount necessary to fund the Plan properly according to the
Plan's actuary.
Deferred Retirement Option Plan(DROP)
Eligibility Members who are eligible for Normal Retirement
Benefit The member's Credited Service and AFC are frozen upon entry
into the DROP.The monthly retirement benefit as described
under Normal Retirement is calculated based upon the frozen
Credited Service and AFC.
Maximum
DROP Period 60 months
Interest
Credited The investment return is determined by the self-directed
investments.
Normal Form
of Benefit Lump Sum
COLA None
Changes Since Last Valuation
Under Ordinance No. 2021-4423,the City Clerk's pension accrual rate and pensionable
earnings were increased from 3%to 4%and from base pay to W-2 earnings,respectively.
Page 594 of 991
City of Miami Beach Employees'Retirement Plan FOSTER&FOSTER 120