89-19808 RESO
RESOLUTION # 89- 19808
RESOLUTION OF THE CITY COMMISSION OF THE
CITY OF MIAMI BEACH, FLORIDA AUTHORIZING
THE PAYMENT TO RETIREES FROM AN ANNUAL
APPROPRIATION ANY AMOUNTS THAT THEIR
PENSION ALLOWANCES HAVE BEEN REDUCED BY
THE EFFECT OF THE INTERNAL REVENUE
SERVICE CODE SECTION 415
WHEREAS, the City Commission of the City of Miami Beach, Florida has
established Pension Systems for its employees under Chapter 18691 Special
Acts 1937, Chapter 23414 Special Acts 1945, Ordinance 88-2603 and
Ordinance 89-2640 with a defined level of benefits; and,
WHEREAS, the Internal Revenue Code of 1986 has i~plemented in its
Section 415 a limitation on the amount of pension benefits which an
organization may grant to a retiring employee; and,
WHEREAS, the City Co~nission of the City of Miami Beach desires that
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the benefit levels granted retiring employees under its Pension Systems
not be diminished by changes in the Internal Revenue Code;
NOW THEREFORE, BE IT DULY RESOLVED BY THE CITY COMMISSION OF THE
CITY OF MIAMI BEACH, FLORIDA:
1. That an appropriation be annually funded from the general fund
of the City of Miami Beach in an amount necessary to fully fund
the defined benefits granted to retiring employees in the General
Employees Retirement System, the Police and Fire Retirement System,
the Unclassified Employees and Elected Officials Retirement System
and the Supplemental Pension Fund for Firemen and Policemen.
2. That the Boards of Trustees of these Retirement and Pension Systems
direct their actuaries to calculate the amount necessary to fund
the requirements 'of their defined benefit plans gliving effect to
the reductions caused by theimpl~mentation of the Internal
\
Revenue Code Section 415.
3. That the residual amounts within the appropriation be paid, on a
monthly basis, in an amount to each retiree equal to the difference
between the allowable pension to be paid under the Internal Revenue
Code and the amount of the defined benefit granted under the
respective system.
4. This Resolution will take effect immediately upon adoption.
PASSED AND ADOPTED THIS 15th
day of November 1989.
ATTEST:
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Elaine Baker, City Clerk
Abp. Resnick, Vice-Mayor
By
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FLORIDA 33139
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OFFICE OF THE CITY MANAGER
ROB W. PARKINS
CITY MANAGER
CITY HALL
1700 CONVENTION CENTER DRIVE
TELEPHONE: 673.7010
COMMISSION MEMORANDUM NO.
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(,) <yij-/
DATE: November 15. 19S9
FROM:
TO:
SUBJECT:
RESTORING PENSION BENEFITS LOST UNDER INTERNAL REVENUE CODE
SECTION 415
In 1986 when the U.S. Congress passed the changes to the Internal
Revenue Code, they included a provision that limits the amount of
pension that a person may earn, This limitation is the lessor of
$90,000 at age 62 actuarally reduced to the age of retirement,
($48,000 at age 50) or one-twelth of the average taxable income
over the last three years of employment. To this point, no re-
tirees pension has been reduced due to this limitation; however,
it appears that several employees contemplating retirement will be
affected by this provision.
As the Pension Systems of the City are precluded from paying bene-
fits in excess of these limitations, the amount of their pension
will be reduced. Since the level of benefits granted to employees
by the City Commission is what has been anticipated by our employees,
this Resolution will restore the benefits that would otherwise be
reduced.
Administration Recommendation:
The Administration recommends that the City Commission adopt this
R~solution restoring benefit levels.
RWP: RJN: S\v
Attachment
15
DATE
R-;-C-
11- , S.. 81
AGENDA
ITEM