Ordinance 95-3007 ORDINANCE NO. 95-3007
AN ORDINANCE OF THE MAYOR AND CITY COMMISSION
OF THE CITY OF MIAMI BEACH, FLORIDA AMENDING
ORDINANCE NO. 88-2603 WHICH ESTABLISHED A
RETIREMENT SYSTEM FOR UNCLASSIFIED EMPLOYEES
AND ELECTED OFFICIALS, AMENDING ARTICLE 5,
ENTITLED "BENEFITS" , BY ADDING SECTION 5 . 12,
ENTITLED "MAXIMUM COMPENSATION" PROVIDING THAT
THE SAME COMPENSATION LIMITS WHICH WERE USED
FOR DETERMINING EMPLOYEES PENSION BENEFITS AS
OF JULY 1, 1993 SHALL CONTINUE TO BE USED FOR
EMPLOYEES HIRED BEFORE DECEMBER 31, 1995;
PROVIDING FOR A REPEALER, SEVERABILITY AND AN
EFFECTIVE DATE.
WHEREAS, the Omnibus Reconciliation Act of 1993 amended
Section 401 (a) (17) of the Internal Revenue Code to reduce the
amount of an employee ' s yearly compensation which may be considered
for pension plan purposes to $150, 000 for 1994, with limited future
indexing; and
WHEREAS, public sector plans are permitted to "grandfather"
the use of compensation limits specified in their plans as of July
1, 1993 if a "grandfather" provision is added to their pension
plans before the plan year beginning in 1996 ; and
WHEREAS, the amendment set forth herein were recommended by
the Board of Trustees of the Retirement System For Unclassified
Employees and Elected Officials .
NOW, THEREFORE, BE IT ORDAINED BY THE MAYOR AND CITY
COMMISSION OF THE CITY OF MIAMI BEACH, FLORIDA:
SECTION 1 . ADDITION OF SECTION 5 . 12 .
That Article 5, entitled "Benefits" of City of Miami Beach
Ordinance No. 88-2603 is hereby amended by addition of Section 5 . 12
to read as follows :
5 .12 Maximum Compensation.
In determining the pension benefit for an eligible employee ,
compensation in excess of limitations set forth in Section
401 (a) (17) of the Internal Revenue Code shall be disregarded. The
limitation on compensation for an "eligible employee" shall not be
less than the amount which was allowed to be taken into account
hereunder as in effect on July 1 , 1993 . As used in the Section,
"Eligible employee" is an individual who was a member before the
first plan year beginning after December 31 , 1995 .
SECTION 2 . REPEALER.
All ordinances or parts of ordinances in conflict herewith be
and the same are hereby repealed.
7
SECTION 3 . SEVERABILITY._
If any section, subsection, clause or provision of this
Ordinance is held invalid, the remainder shall not be affected by
such invalidity.
SECTION 4 . EFFECTIVE DATE.
This Ordinance shall take effect on the 23rd day of
September , 1995 .
PASSED and ADOPTED this 13th day 'if September , 1995 .
ATTEST:
MAYOR
id CITY CLERK
1st reading 7/12/95
2nd reading 9/13/95
SWS:scf:6.0disk8\Sec-5-12.ord
FORM APPROVED
Le¢a1 Dept.
By err i .
Date SwS 7 3 -7S
3
CITY OF MIAMI BEACH
CITY HALL 1700 CONVENTION CENTER DRIVE MIAMI BEACH FLORIDA 33139
COMMISSION MEMORANDUM NO. e 03"—I-
TO: Mayor Seymour Gelber and
Members of the City Commission DATE:
July 26, 1995
FROM: Jose Garcia-Pedrosa 7
City Manager •.-i,
SUBJECT:
SECOND READING AMENDING ORDINANCE NO. 88-2603, WHICH
ESTABLISHED THE RETIREMENT SYSTEM FOR UNCLASSIFIED
EMPLOYEES AND ELECTED OFFICIALS OF THE CITY OF MIAMI
BEACH AMENDING ARTICLE 5, ENTITLED "BENEFITS", BY ADDING
SECTION 5.12,ENTITLED "MAXIMUM COMPENSATION", PROVIDING
THAT'1HE SAME COMPENSATION LIMITS WHICH WERE USED FOR
DETERMINING EMPLOYEES PENSION BENEFITS AS OF JULY 1, 1993
SHALL CONTINUE TO BE USED FOR EMPLOYEES HIRED BEFORE
DECEMBER 31, 1995; PROVIDING FOR A REPEALER, SEVERABILITY
AND AN EFFECTIVE DATE.
Administrative Recommendation
The Ordinance passed first reading on July 12, 1995. The Administration recommends that
the Mayor and City Commission adopt this Ordinance at second reading.
Analysis
The Omnibus Budget Reconciliation Act of 1993 amends Section 401(a)(17) of the Internal
Revenue Code to reduce the amount of compensation which may be considered for pension plan
purposes to $150,000 for 1994, with limited future indexing. The Unclassified Employees and
Elected Officials Retirement System, as a public sector plan, would be permitted to grandfather use
of the limits, if any, existing in Plan as of July 1, 1993, for employees hired before the plan year
beginning 1996. In order to take advantage of the grandfather provision, the Ordinance must be
amended by September 30, 1995.
The Actuary for the Plan, Steve Palmquist, has advised that the proposed amendatory
language would not negatively impact the Plan.
Conclusion
This amendment is recommended by the Board of Trustees as necessary for the protection
of existing employees from the new lower compensation limits effective in 1996. •
JGP:ma AGENDA
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