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Ordinance 88-2603 ORDINANCE NO. 88-2603 AN ORDINANCE PROVIDING FOR THE CREATION AND MAINTENANCE OF THE RETIREMENT SYSTEM FOR UNCLASSIFIED EMPLOYEES AND ELECTED OFFICIALS OF THE CITY OF MIAMI BEACH, FLORIDA; PROVIDING FOR SEVERABILITY ; REPEALING ALL ORDINANCES IN CONFLICT THEREWITH; AND PROVIDING FOR AN EFFECTIVE DATE. BE IT ORDAINED BY THE CITY COMMISSION OF THE CITY OF MIAMI BEACH, FLORIDA: SECTION 1. ARTICLE 1 . Creation and Purpose of System 1.01 A retirement system is hereby created under and by authority of Chapter 18691, Laws of Florida, Acts of 1937 . This systen shall be known as the "RETIREMENT SYSTEM FOR UNCLASSIFIED EMPLO1 :ES AND ELECTED OFFICIALS OF THE CITY OF MIAMI BEACH" and shall be hereinafter referred to as the "Unclassified System" or "Unclassified Retirement System. " 1.02 The purpose of the Unclassified Retirement System is to provide retirement and other related benefits for eligible unclassified employees and elected officials of the City and their beneficiaries or dependents . ARTICLE 2. Definitions For purpose of the Unclassified Retirement System, 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 "City" or "Employer" means the City of Miami Beach, Florida. 2.02 "City Commission" or "Commission" means the City Commission of the City of Miami Beach, Florida. 2.03 "Board of Trustees" or "Board" means the managing board of the Unclassified System as provided for in Article 7 . 2.04 "Elected Officials" means the Mayor, and the members of the City Commission of the City of Miami Beach. 2.05 "Employee" means any person employed by the City on a regular basis, who is receiving compensation from the City for personal services, and who is within a group or classification of employees designated by the Board of Trustees as eligible for 1 x4/12/88 • membership in the Unclassified System, 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 or a fee. (d) Those persons who hold classified positions within the City. (e) Member of the City Pension Fund for Firemen and Policemen in the City of Miami Beach. ( f) Persons whose regular employment with the City is for less than thirty ( 30) hours per week. 2.06 "Members" means any Employee included in the membership of the Unclassified System, as provided in Article 3 . A Member who retires shall be deemed a retired member or a retirant . 2.07 "Creditable Service" means service credited to a Member under the Unclassified System as provided in Article 4. 2.08 "Accumulated Employee Contributions" means the required contributions paid by any Member as provided in Section 6 . 02 or credited to the Member pursuant to Section 6 . 01, together with any interest allowed thereon under this Unclassified 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. 2.09 "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. 2.10 "Final Average Monthly Earnings" means, one-twelfth of the annual earnings of the Member during the last year of his creditable service. 2.11 "Beneficiary" means the surviving person or persons designated as such by a Member or Retirant in the last written 2 designation on file with the Board in accordance with Section 5 .07 (b) ; in the absence of such survivor or such designation, it means the estate of the deceased Member or Retirant, as the case may be. 2.12 "Regular Interest" means interest at the rate or rates determined by the Board of Trustees as provided in Section 7 .06(d) . 2.13 "Actuarial Equivalent " means the equivalent when computed at regular interest on the basis of the mortality tables last adopted by the Board of Trustees. 2.14 "Retirant" means a person in receipt of retirement allowance payments under the Unclassified System on the basis of his service as an Employee. 2.15 "Retirement allowance?' means monthly payments under the System 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. 2.16 "Pensioner" means the dependent beneficiary of a Member or Retirant in receipt of a pension under the Unclassified System as the result of the death of said Member or Retirant. 2.17 "Pension " means the monthly amount payable to a Pensioner under the Unclassified System; the pension shall be due as of the first day of the calendar month next following the death of the Member or Retirant and shall cease after the payment due on the first day of the month in which the Pensioner ceases to be entitled thereto according to the provisions of this Ordinance. 2.18 "Physical Examiners" means the physicians provided for in Section 7. 06( j ) . 2.19 "Predecessor system" means the Retirement System governed by Ordinance Nos. 845 and 1901 as in effect at the time of the adoption of this Ordinance. 2.20 "Finance Director" means the Finance Director of the City of Miami Beach as appointed by the City Manager or such 3 person designated by the City Manager to perform the duties of Finance Director . ARTICLE 3 . Membership 3.01 Every eligible person who on April 1 , 1988 , is an unclassified employee under the predecessor system shall have the option to become on such date a participant under this Unclassified System. All elections of options must take place within ninety ( 90 ) days of April 1, 1988. The Board has the authority to extend this period for no more than ninety ( 90 ) days . Any written designation of beneficiary or dependent beneficiary in effect under the predecessor system on the effective date of this Ordinance shall continue to be in effect under this Unclassified System unless subsequently changed or revoked by the Member or Retirant in writing in accordance with the provisions of this Ordinance. 3.02 Any person , other than as provided in Section 3. 05 herein, who becomes an Employee or Elected Official , as herein defined, on April 1, 1988, shall be a Member of the Unclassified System as a condition of his employment or office as of the date he becomes an Employee or Elected Official . 3.03 With the exception of persons eligible to decline membership in the retirement plan pursuant to Section 3 . 05 of this Ordinance , participation in this retirement plan is a mandatory condition of employment for employees. An employee ' s acceptance of employment with the city shall constitute authorization for the city to pick up contributions from the earnings of the employee, unless and until an election permitted by Section 3 . 05 is made. 3.04 Any person , other than as provided in Section 3. 05 herein, in the employ of the City or who held elective office on April 1 , 1988 , who became an Employee or elected official as herein defined prior thereto but was not , as of such date , a participant of the predecessor system established by Ordinance Nos. 845 and 1901 because of exclusions of certain groups from membership under the provisions of said Ordinances shall become a 4 • Member of the Unclassified System on April 1, 1988 . 3.05 All individuals holding the position of either city manager or city attorney, shall have the option to reject membership in the plan provided herein and to be a member in a retirement program with any public trust fund named by the aforesaid individuals and approved by the city commission. 3.06 An employee shall cease to be a Member if he dies, retires or ceases to be an employee for any other reason. ARTICLE 4. Creditable Service 4.01 Each Employee who becomes a Member of the Unclassified System on April 1 , 1988 , shall be credited under this Unclassified System with creditable service to which he was credited as of such date under the predecessor system. Each Member of the Unclassified System shall be credited with service rendered after the effective date of this Ordinance with respect to which he has made contributions to the Unclassified System in accordance with Section 6 . 02. The creditable service of a Member shall not include service rendered prior to the date as of which he elected to receive his Accumulated Employee Contributions in accordance with Section 5.07(a) . 4.02 Each Member shall be entitled to acquire additional creditable service for his period or periods of service with the Armed Forces of the United States while on leave of absence granted by the City for such military service by making the contributions that he would have been required to pay on the basis of his salary in effect at the beginning of such period if he had not been on a leave of absence with interest at the rate per annum, compounded annually, being allowed on contributions of Members at the time such election is made, subject to such conditions and limitations as are required by law or established by the Board under rules uniformly applicable to all persons similarly situated. 4.03 Any current Employee or current Elected Official whose employment or election commenced on or after January 28, 1970 and whose attainment of age 56 previously excluded him from 5 0 eligibility for membership in the system, may elect to acquire additional creditable service in respect of the period of his continuous service in the employ of the City for which he previously was denied eligibility for membership in the System. The election to acquire creditable service under this section shall be limited to Employees or Elected Officials whose employment or election commenced prior to April 1, 1988. ARTICLE 5 . Benefits 5.01 Normal Service Retirement Allowance (a) The normal retirement date of a person who became a Member shall be the first day of the calendar month coincident with or next following the fiftieth anniversary of his birth and the date as of which he completes five years of creditable service. (b) The normal service retirement allowance payable upon the retirement of a Member on or after his normal retirement date shall be as follows: four per centum ( 4%) of his final average monthly earnings multiplied by the number of his years of creditable service, provided that such allowance shall not exceed ninety percent ( 90%) of his final average monthly earnings. 5.02 Vested Retirement Allowance (a) Any Member with less than five ( 5) years of service whose service with the City is terminated voluntarily or involuntarily shall be eligible for a refund of his accumulated employee contributions plus the amount in Section 5 . 07(a) . (b) Any Member with five ( 5) or more years of service and whose service with the City is terminated prior to the date of which he would first become eligible for retirement on a normal service retirement allowance shall be eligible for a refund of his accumulated employee contributions plus the amount in Section 5 .07 (a) ; or , the member may elect to not get the refund but instead allow all of his contributions to remain in the Unclassified System as a vested retirement allowance. The vested retirement allowance shall be a deferred allowance commencing on the earliest date as of which a member 6 r with his years of creditable service would first be eligible for retirement on a normal service retirement allowance and shall be equal to the amount computed in accordance with this Article 5 as a normal service retirement allowance on the basis of the Member ' s final average monthly earnings and creditable service at the time of his termination and his age as of the date on which payment of the allowance commences. 5.03 Disability Retirement Allowance (a) Upon the written application of a Member or of 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 he is totally incapacitated, mentally or physically, for the further performance of duty, that such incapacity is not the result of 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 of 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 wilful negligence on his part, may be retired by the Board on a service-connected disability retirement allowance, and not on an ordinary disability retirement allowance, on the first day of a calendar month next following the execution and granting of such application; provided that the application is filed within three ( 3) years from the time of said accident, and that the Physical Examiners , after a medical examination of the Member , shall certify that he is totally incapacitated, mentally or physically, for the further performance of duty, that such incapacity is not the result of misconduct , service in the Armed Forces, self- 7 i inflicted injury or disability sustained through other employment, that such incapacity is likely to be permanent and that such Member should be retired. (c) The disability retirement allowance payable to a Member retiring under the provisions of this Section 5.03 shall be an amount computed as a normal service retirement allowance 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 Paragraphs (d) and (e) if the Member has not reached his normal retirement date at the time of his disability retirement. (d) ( l)The allowance payable to a disability Retirant prior to his normal retirement date shall not be less than twenty-five per centum ( 25%) of his final average monthly earnings as defined in Section 2.10 as of the date of his disability if an ordinary disability retirement allowance is payable, and not less than fifty per centum ( 50%) of such final average monthly earnings if a service connected disability retirement allowance is payable. Under this section, the period of disability retirement is deemed to be active service and when the normal retirement date occurs, the disability Retirant after his normal retirement date is based on what the Retirant would have received if disability had not occurred. The allowance payable to a disability Retirant after his normal retirement date shall be an amount computed as a normal service retirement allowance on the basis of the final average monthly earnings and number of years of creditable service he would have had if he had continued in service without the disability interruption . The allowance payable to a disability Retirant after his normal retirement date shall be based on the maximum rate of pay in effect on his normal retirement date for the classification at which he retired provided that such allowance shall not exceed the amount payable to him as his disability retirement allowance prior to his normal retirement date nor be less than his normal retirement allowance 8 r at his normal retirement date. "Normal retirement date" as used in Section 5. 01 means the date determined in accordance with Section 5.01(a) on the assumption that the period of disability retirement is deemed to be active service as an Employee for this purpose. (e) Any amounts which may be paid or payable on account of disability to the Member or his 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 his disability retirement allowance provided under the Unclassified System contributions of the City on account of the same disability, in such equitable manner as the Board shall determine. (f) 1. During the period of his retirement on a disability retirement allowance prior to his normal retirement date, the disability Retirant ' s annual earnings from employment ( including self-employment) prior to his normal retirement date 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 more than one hundred twenty-five per centum ( 125 % ) of the maximum current salary for the classification from which he was retired if he is receiving a service-connected disability retirement allowance, or one hundred per centum ( 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 his disability retirement, before any benefits are paid to him under the Unclassified System, to furnish annually to the Board, before May 1 of each year , a copy of his Federal Income Tax return for the prior year , and any other information which the Board may require. When the disability 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 9 r classification from which he was retired, future payments of his disability retirement allowance shall be withheld until the total sum withheld equals the amount by which his 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. The term "earned income" shall be defined by Section 32(c) ( 2) of the Internal Revenue Code, as amended, 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 14 . 02 ( a) of the Internal Revenue Code, as amended. (g) Any Retirant who is receiving a disability retirement allowance shall be subject, prior to his 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 disability. In the event that such disability shall not continue to incapacitate the Retirant for service acceptable to the City, in accordance with requirements of the Personnel Department, the City Manager may require that such Retirant be returned to active duty at work which is the same or of similar nature to the work he performed prior to his disability, or returned to other work within the limits of his mental or physical capacities , at a rate of compensation not less than seventy per centum ( 70%) of the pay to which he would have been entitled at the time of his return to active service for the grade of service occupied by the Retirant prior to his incapacity. Upon any such return to active duty such Retirant shall be restored to service as a Member , his disability retirement allowance shall be terminated, he shall resume contributing to the Unclassified System according to the compensation thereafter payable to him, and the period during which he was receiving his disability retirement allowance shall be included in his creditable service for all purposes of the 10 • System. (h) If any Retirant in receipt of a disability retirement allowance is found by the Physical Examiners, prior to his normal retirement date, to be no longer incapacitated but is not restored to service as a Member because of his own refusal to accept employment offered to him in accordance with the foregoing paragraph , his disability retirement allowance shall be terminated, and the period during which he was receiving a disability retirement allowance shall in no event be added to the creditable service he had acquired prior to his disability. 5.04 Active Service Death Benefits (a) Upon receipt of evidence, satisfactory to the Board, of the death of a Member who has five ( 5 ) or more years of creditable service, a monthly pension shall be paid to the surviving spouse of the deceased Member , provided that said spouse had been married to the Member for at least one ( 1 ) year immediately prior to the date of his death . If there is no surviving spouse 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 foregoing Paragraph (a) shall be equal to one-half of the amount computed as a normal service retirement allowance in accordance with Paragraph (b) of Section 5.01 as though the date of the Member ' s death were his normal retirement date , on the basis of the Member ' s final average monthly earnings and creditable service at the time of his death; provided that, if the pension is payable to a spouse 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 were exactly fifteen ( 15) years younger than the deceased Member . In the event of the death of the spouse after pension payments 11 r 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 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. (c) Under no circumstances shall any surviving spouse of a deceased Member or Retirant receive from the Unclassified System more than one pension under either the provisions of this Section 5. 04 or the following Section 5.05 or because of the simultaneous effect of both of these sections. (d) Under no circumstances shall any surviving spouse of a deceased Member or Retirant receive a pension from the Unclassified System if the surviving spouse remarries . 5.05 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 of the deceased Retirant, provided that the spouse had been married to the Retirant on the date of his retirement or termination of service, whichever was first, and for at least one ( 1 ) year prior to such date; and further provided , that if the Retirant had elected an option in accordance with Section 5 . 06 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 5.05, in accordance with the option. (b) The monthly pension payable to the surviving spouse of a deceased Retirant pursuant to the foregoing paragraph of this Section 5 . 05 shall be equal to fifty per centum ( 50%) of the retirement allowance which would have been payable to the deceased Retirant if he had been alive at the time of the monthly payment; provided that , if the surviving spouse is more than fifteen ( 15 ) years younger than the deceased Retirant , such monthly pension shall be reduced to an amount which is the 12 • 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 entitled to a pension in accordance with the foregoing paragraphs of this Section 5. 05 or if the death of such a spouse occurs after pension payments have commenced in accordance with the foregoing paragraph, the pension which would otherwise have been payable to a surviving spouse eligible therefor and not more than fifteen (15) years younger than the deceased Retirant shall be payable to the child or children of the said deceased Retirant , if any , divided in equal shares, to continue until every such child dies or attains twenty-one ( 21) years of age ; provided that only children who were beneficiaries of the Retirant on the date of his retirement or termination of service, whichever was first, shall be eligible for a pension under this paragraph. (d) Anything in this Section 5 . 05 to the contrary notwithstanding, in the event that an optional benefit had been elected by a Retirant in accordance with Section 5 . 06 and such election is in effect at the time of his death, monthly benefits, if any, shall be payable after his 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 5.05. (e) Under no circumstances shall any surviving spouse of a deceased Member or Retirant receive a pension from the Unclassified System if the surviving spouse remarries. 5.06 Optional Benefits (a) Subject to the applicable provisions of this Section 5 . 06, a Member or former Member may, by written notice received by the Board prior to the date of commencement of his retirement allowance, elect to convert his retirement allowance, provided that said allowance is not a disability retirement allowance, into an optional benefit which is the actuarial equivalent of his retirement allowance, in accordance with one of the options named 13 below. If such notice is received by the Board not less than thirty ( 30 ) days prior to the date of commencement of his retirement allowance, the election of the optional benefit shall become effective on the date his retirement allowance commences. If such election is received by the Board at any later date it shall become effective thirty ( 30 ) days after the date his retirement allowance commences. Option 1. A reduced retirement allowance payable during the Member 's life, with the provision that after his death it shall be paid during the life of , and to, the contingent annuitant nominated by him by written designation duly acknowledged and filed with the Board when he elected the option; or Option 2. A reduced retirement allowance payable during the Member ' s life, with the provision that after his death an allowance at two-thirds ( 2/3) the rate of his reduced allowance shall be paid during the life of , and to , the contingent annuitant nominated by him by written designation duly acknowledged and filed with the Board when he elected the option. A Member may designate as the contingent annuitant under an option his spouse or a minor 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, provided, however, if the contingent annuitant is _a minor child, the retirement allowance shall not be payable under the option after the death of the Member after the minor child attains twenty-one ( 21) years of age. (b) If the person designated by the Member as a contingent annuitant under an option is his spouse to whom he was married on the date of his retirement or termination of service, whichever was first, and for at least one (1) year prior to such date, the monthly benefits payable under the option to the Member and the surviving contingent annuitant shall be the actuarial equivalent of the benefits which would have been payable without the optional election as a retirement allowance to the Member after 14 i his retirement and as a pension after his death to his surviving spouse in accordance with Section 5.05; otherwise , the monthly benefits payable under the option shall be the actuarial equivalent of the retirement allowance payable only to the Member after his retirement prior to any optional election. (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 election of the option becomes effective, the election shall thereby be revoked. 5.07 Refund of Accumulated Contributions (a) A Member may elect, upon ceasing to be an Employee for any cause other than retirement or death, to receive in one sum the Accumulated Employee Contributions and any interest accumulated thereon credited to him plus an additional ten per centum (10%) of the Accumulated Employee Contributions credited to him multiplied by his years of services with the City, such years not to exceed ten ( 10) . Upon acceptance of such payment, all creditable service shall be cancelled , such creditable service shall not be reinstated upon his becoming a Member again at a subsequent date and he shall be considered a new Member as of the date on which he again becomes a Member . (b) Upon receipt of evidence, satisfactory to the Board, of the death of a Member prior to the commencement of his retirement allowance , with no surviving spouse or dependent children entitled to receive a pension as provided in Section 5. 04 , the amount of his Accumulated Employee Contributions at the time of his death shall be payable in one sum to his designated beneficiary if living, otherwise to such Member ' s estate. Upon receipt of evidence, satisfactory to the Board, of the death of a Retirant who is not survived by a spouse or dependent children entitled to a pension in accordance with Section 5.05, provided he has not elected an optional benefit that has become effective, any excess of his Accumulated Employee Contributions at retirement over the sum of the retirement allowance payments 15 • received shall be paid in one sum to his designated beneficiary if living, otherwise to such Member ' s estate. 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 had been elected and has become effective, any excess of the Retirant ' s Accumulated Employee Contributions at the time of his retirement over the sum of the benefit payments received shall be paid to the Retirant ' s beneficiary if living, otherwise to the estate of the survivor of such Retirant and contingent annuitant . 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 allowance , the excess, if any , of the Accumulated Employee Contributions at the time of his death over the pension payments received by the Member ' s spouse and his dependent children shall be paid in a single sum to the Member ' s designated beneficiary if living , otherwise to his estate. 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 his Accumulated Employee Contributions at retirement over benefit payments received by the Retirant , his spouse and dependent children shall be paid in one sum to the Retirant ' s designated beneficiary if living, otherwise to his estate . A Member ' s beneficiary for receipt of the single sum payments in accordance with this Section 5 . 07 must have been designated by him in writing and duly acknowledged. A Member may designate more than one person as his beneficiary for this purpose provided that he specifies the manner in which the payment is to be allocated, and he may designate alternate beneficiaries with a specified order of priorities for entitlement to single sum payments in the event of death. A Member may change his 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. 06. 5.08 Post Retirement Adjustments 16 • (a) The benefits payable to Retirants and Pensioners on April 1, 1988, and the benefits commencing in accordance with this Ordinance on or after such date shall be continued without change except as increased in accordance with this Section 5. 08 . (b) "Improvement Factor" for the purpose of this Section 5.08 means an increase of one and one half per centum ( 1 1/2% ) per annum in retirement allowances or pensions for each year commencing on October 1 following the completion of one full year after the commencement date of the retirement allowance or, if applicable to pensions payable as the result of the death of a Member prior to his retirement , one full year after the commencement date of the pension. The Improvement Factor shall be compounded, and shall be applied to the retirement allowance or pension payable as the result of the retirement, termination or death of a Member, whichever is applicable. (c) The Improvement Factor shall be applied automatically as of each October 1 , with respect to retirement allowances payable for more than one year as of such time. (d) 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 5.08; however, on each October 1 subsequent to such death the Improvement Factor shall be applied to the amount which would have been payable as a pension prior to any post retirement adjustment made in accordance with this Section 5 . 08 . 5.09 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 to him or on his account with respect to his earnings and creditable service after his return shall be based on the provisions applicable to a Member whose employment with the City commences on the date of his return to service. He shall contribute to the Unclassified 17 r System at the rate required , pursuant to Section 6 . 02 , of Employees who become Members for the first time . Creditable service rendered before and after his return to service shall be considered for the purpose of determining his allowance ; provided , in the event of his subsequent termination of employment for reasons other than death or retirement , only creditable service rendered after his return to service shall be considered for the purpose of determining his entitlement to a vested retirement allowance with respect to service rendered after his return. Upon subsequent retirement , his retirement allowance shall be equal to the sum of the amounts computed on the basis of the final average monthly earnings and creditable service with respect to each period of continuous service as an Employee; provided that the retirement allowance shall not exceed the retirement allowance which would have been payable if his creditable service had been one period of continuous service. (b) Should a Retirant , other than a disability Retirant restored to service in accordance with Section 5 . 03 ( g ) , be employed by the City as an Employee, his retirement allowance shall cease, he shall again become a Member of the Unclassified System, but benefits payable to him or his account with respect to his earnings and creditable service after his return shall be based on the provisions applicable to a Member whose employment with the city commences on the date of his return to service. He 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 his Accumulated Employee Contributions at the time of his retirement over the amount of retirement allowance payments he received shall be credited to him as Accumulated Employee Contributions as of the date he became a Member . Creditable service rendered before and after his return to service shall be considered for the purpose of determining his entitlement to a normal service retirement allowance upon subsequent retirement. Upon subsequent retirement, his retirement allowance shall be equal to the sum of the 18 • retirement allowance payable to him during his previous retirement, adjusted actuarially, if he returned to service prior to his normal retirement date, for the period from the date of his return to service to the date of his subsequent retirement or normal retirement date, whichever occurs first, plus the amount computed as a retirement allowance on the basis of his final average monthly earnings and creditable service for the period after his last return; provided that the total retirement allowance shall not exceed the retirement allowance which would have been payable if all years of his creditable service had been a continuous period. If an option had been elected and in effect at the time of his return to service, the option shall continue to be in effect after his return to service, with respect to the retirement allowance payable prior to his return. (c) 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 therefor or the benefit, if any, to which he is otherwise entitled on the basis of his membership in the Unclassified System. (d) The return of a disability Retirant to employment with the City prior to his normal retirement date in accordance with Section 5. 03 (g) shall be governed by said Section 5.03 (g) . Return of such a person to employment with the City after his normal retirement date, as defined in Section 5.03, or after the date as of which he ceased to be entitled to a disability retirement allowance pursuant to Section 5 . 03 ( h) shall be governed by the provisions of Paragraph ( a ) or ( b) of this Section 5.09, whichever is applicable at the time of such return. ARTICLE 6 . Financing 19 i 6.01 Assets of Predecessor System The amount credited to each participant of the predecessor system as "Accumulated Employee Normal Contributions" as of the effective date of this Ordinance shall be credited to him under this Unclassified System on such date as Accumulated Employee Contributions. Such amounts credited shall be transferred to this Unclassified System; likewise, appropriate portions of the City ' s contributions under the predecessor system shall be transferred to this Unclassified System. 6.02 Contributions by Members Each Member after April 1 , 1988, shall contribute to the Unclassified System ten per centum ( 10% ) of his earnings throughout his service as an Employee. 6.03 Contributions by City (a) It is the intent of this Ordinance that the City contribute to the Unclassified System 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 Unclassified System. In addition, administrative expenses shall be paid by the City. (b) An Actuarial investigation of the Unclassified System shall be made 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 Unclassified System 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 Unclassified System not covered by assets in hand, future 20 • 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" . The actuary shall recommend on the basis of each valuation a normal contribution rate and an accrued liability 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. ARTICLE 7. Board of Trustees 7.01 The Unclassified System 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 Unclassified System and for making effective the provisions of this Ordinance. 7.02 The Board shall consist of seven (7) persons, each of whom shall be designated as a trustee. The members of the Board shall be as follows: (a) One ( 1 ) City Commissioner appointed by the City Commission. (b) Six ( 6) appointed by the City Manager . (c) A quorum shall consist of three ( 3) persons. (d) Each trustee shall serve on the Board for a term of two years. 7.03 The member of the City Commission serving on the Board of Trustees shall serve at the pleasure of the Commission and only during his incumbency in office. The first Board of Trustees under this Ordinance shall be appointed within thirty ( 30) days of the effective date of the Ordinance. If a vacancy occurs prior to the expiration of the term, the vacancy shall be filled for the unexpired part of term in the same manner as it 21 r was previously filled. 7.04 Each trustee shall take an oath of office within ten (10) days after his appointment. A trustee shall serve without compensation but shall be reimbursed for any expenses incurred as the result of service as a trustee. 7.05 The Board shall elect from its membership a Chairman and a Secretary. Each trustee shall be entitled to one ( 1) vote. 7.06 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 Unclassified System and the transaction of its business. (c) Consider and pass on all applications for retirement and other benefits , authorize the granting of all retirement allowances , pensions and lump sum settlements, and suspend any payment or payments, all in accordance with the provisions of this Ordinance. (d) Adopt from time to time service and mortality tables and the rate of regular interest for use in actuarial calculations in connection with the Unclassified System. (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 Unclassified System for the following fiscal year . ( f) Recommend to the City Commission the employment of such • actuarial, legal or investment counsel or specialized technical assistance as may be required for the efficient operation of the Unclassified System; and prepare and submit to the City Manager , prior to the beginning of each fiscal year , a budget of the 22 • operating expenses for each year . (g) Maintain accounts and records showing the fiscal transactions of the Unclassified System and keep in convenient form such data as may be necessary for the actuarial valuations of the Unclassified System; require from each person covered under the Unclassified System such information as shall be necessary for the proper operation of the Unclassified System; require the maintenance of adequate accounting records which shall at all times reflect the financial condition of the Unclassified System. (h) Provide for the receipt of all payments made to the Unclassified System and records thereof , and cause them to be deposited immediately with the Finance Director of the City. ( i ) Keep a permanent record of all proceedings of the Board which shall be available for examination by any Member, Retirant or Pensioner, or by any Officer of the City. ( j ) Designate for specified periods, or as occasion may require, three ( 3) physicians who are not eligible for membership in the Unclassified System, 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 Unclassified System, invest and reinvest all cash not required to meet current disbursements in securities; and subject to the limitations of this Ordinance and particularly Section 8 . 01 below, 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. (1) Provide for certification on its behalf of all warrants issued in accordance with actions of the Board authorizing payments for benefits , expenses and investments out of funds 23 i belonging to the Unclassified System, and provide for certification on its behalf of all amounts required by the System to be levied as taxes by the City. (m) Cause a general investigation to be made by a Consulting Actuary annually 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 Unclassified System to be made annually in conjunction with the annual audit of the City ' s financial affairs. (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 Unclassified Systen. (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. ARTICLE 8 . Investments 8.01 The assets of the Unclassified System, 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 Unclassified System, 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 , 24 r personal or mixed, and every kind of investment, specifically including, but not by way of limitation, bonds, debentures and other corporate obligations, and stocks, preferred or common, which men of prudence, discretion and intelligence acquire or retain for their own account and, within the limitations of the foregoing standard, a trustee may retain property properly acquired, without limitation as to time and without regard to its suitability for original purchase. 8.02 All investments shall be clearly marked to indicate that they are a part of the assets of the Unclassified System, and to the extent possible they shall be so registered. 8.03 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. ARTICLE 9 . Administration 9.01 Finance Director The Finance Director shall have responsibility for the administration of the Unclassified System. As such, he will have responsibilities which shall include, but not necessarily be limited to, the duties specified in this Section 9.01. (a) The Finance Director shall establish and maintain records on all persons covered under the Unclassified System. (b) The Finance Director shall verify the amounts entered by the Payroll Department as deductions for contributions by Employees to the Unclassified System and shall certify all payrolls on which such deductions are entered. • (c) The Finance Director shall receive applications for retirement and other benefits, compute retirement allowances , pension and lump sum settlements, compute and credit interest to individual accounts and make such analyses , computations and 25 • other determinations and records as the Board may deem necessary for the efficient operation of the Unclassified System. (d) It shall be the duty of the Finance Director to notify the Board of any new Members, withdrawal of Members, applications for retirement and lump sum payments, and such other personnel information as the Board may require. (e) The Finance Director of the City shall be the custodian of the assets of the Unclassified System and shall furnish bond or surety thereforeacceptable to the Board. He shall deposit all cash on hand in regularly designated depositories of the City and shall require surety or collateral therefor as is required by the Charter or Ordinances of the City for other funds of the City , and shall hold all investments under the joint custody of himself and the Board. ( f) The Finance Director 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 monies and investments of the Unclassified System as the Board deems necessary. (g) All payments from the funds of the Unclassified System shall be made by the Chief Accountant only upon vouchers signed by the Finance Director . A duly attested copy of a resolution of the Board bearing on its face the specimen signature of the Chief Accountant 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 Finance Director to issue vouchers for refunds of Accumulated Employee Contributions in accordance with Section 5 . 07 and for minor adjustments in contributions by Employees. (h) 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 . 26 r 9.03 City Attorney (a) The City Attorney shall serve as legal adviser of the Board when requested to do so, and his services on behalf of the Board shall not be compensated additionally. 9.04 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. (c) Private Counsel shall provide legal services to the Board of Trustees as requested by the Board. ARTICLE 10. General 10.01 The assets of the Unclassified System shall be invested as one fund, and no particular person, or group of persons, shall have any right in, or to, any specific security or property, or in or to any item of cash, other than an undivided interest in the whole, as specified in the provisions of this Ordinance. All the funds of the Unclassified System shall be held in trust for use in providing the benefits of the Unclassified System 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 Unclassified System prior to the satisfaction of all liabilities for benefits with respect to them or for the administrative expenses of the Unclassified System. In case of termination of the Unclassified System, or in the event of the discontinuance of contributions thereunder having the effect of such termination , the rights of all members of the Unclassified System to benefits accrued to the date of such termination or discontinuance, to the extent then funded, shall be nonforfeitable. 10.02 All retirement allowances, pensions, and other benefits payable under the provisions of this Ordinance , and all accumulated credits of Employees in the Unclassified System shall not be assignable. 27 0 10.03 Any person who shall knowingly make any false statement , or shall falsify, or permit to be falsified, any record or records of the Unclassified System in any attempt to defraud the Unclassified System 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 . 10.04 No provisions 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 Unclassified System established by this Ordinance. SECTION 2. REPEALER All ordinances or parts in conflict herewith be and the same are hereby repealed. SECTION 3 SEVERABILITY If any section, sentence, clause or phrase of this Ordinance is held to be invalid or unconstitutional by any court of competent jurisdiction , then said holding shall in no way affect the validity of the remaining portion of this Ordinance. SECTION 4. EFFECTIVE DATE. This Ordinance shall take effect ten ( 10 ) da - after its adoption, on March 12 , 1988. PASSED and ADOPTED this 2nd d of M-r, h , 1988. OrVICE rrrYOR ATTEST: ,-4Walfrj City Clerk 1st Reading - February 17, 1988 2nd Reading - March 2, 1988 Formm;d1.1,4, Approved: Legal Department Date: TDL/rlw 2/25/88 sections corrected 4/12/88 28 c w M 8 CI " o 1:1 0o 00 v Z O A H • Cel C/ ect CAc14 Ia o qj o ott U LY, W o