R5D-Amend And Restate The Miami Beach Employees Retirement Plan -Weithorn-City of Miomi Beoch, 1700 Convention Center Drive, Miomi Beoch, Florido 33I39, www.miomibeochfl.gov
COMMISSION MEMORANDUM
TO: Mayor Philip Levine and Members df the City
FROM: Jimmy L. Morales, City Manager
DATE: May 20,2015
SUBIECT:AN ORDINANCE OF THE MAYOR AND CITY COMMISSION OF THE CITY OF
M!AM! BEACH, FLORIDA, AIUIFND|NG AND RESTATTNG THE MtAMt BEACH
EMPLOYEES' RETIREMENT PIAN CREATED BY ORDTNANCE NO. 2006.3504,
AS SUBSEQUENTLY AMENDED, By AMENDTNG SECTIONS 2, 4, 5, 11, and 12
OF THE PLAN TO COMPLY WITH APPLICABLE PROVISIONS OF THE
INTERNAL REVENUE CODE AND REGULATIONS THEREUNDER, AND
DELETING OUTDATED LANGUAGE; PROVIDING FOR SEVERABILITY;
REPEALING ALL ORDINANCES lN CONFLICT THEREWITH; AND PROVIDING
AN EFFECTIVE DATE.
HISTORY/BACKGROUND
The attached Ordinance is sponsored by Commissioner Deede Weithorn and provides
amendments to the Miami Beach Employees' Retirement Plan (MBERP) in order for the Plan to
comply with the applicable qualification standards under lnternal Revenue Code (lRC) section
401(a) and for the Plan to retain its qualified status. The Ordinance makes various technical
amendments to the MBERP to comply with IRC qualification standards for a retirement plan. As
noted in the attached Memorandum from pension counsel, the proposed amendments are required
by the IRC and lnternal Revenue Service (lRS) regulations for the Plan to retain its qualified status.
ANALYSIS
A summary of the proposed changes to the Plan is set forth in pension counsel's attached
Memorandum.
ln addition to the technical amendments required for IRC and IRS compliance, the
Ordinance provides a restatement of the entire Plan in one document, pursuantto pension counsel's
recommendation, to reflect all ordinance amendments to the Plan that have been adopted since the
Plan was established in 2006.
FINANCIAL IMPAGT
The City's pension counsel has opined that the amendments should not result in any fiscal
impact to the Plan or to the City. However, pursuant to the Florida Statutes, an actuarial impact
statement is needed and will be provided prior to adoption on second reading.
Agenda ltem F SI\ -DateEOf58
TO:
FROM:
DATE:
RE:
LEWIS, LONCMAN & WALKER, P.A.
All()itNtYsAIIA\r\,
REPLYTo: TALLAHASSEE
MEMORANDUM
Raul J. Aguila, City Attomey
City of Miami Beach
Jim Linn and Jennifer Cowan
I|u[.ay 14,2015
Miami Beach Employees' Retirement Plan - Internal Revenue Code Compliance
Amendments
As requested, we have reviewed the proposed amendments to the Miami Beach Employees'
Retirement Plan enclosed with Robert Friedman's letter of February 2,2015. In our opinion, the
proposed amendments are required by the Internal Revenue Code and IRS regulations, in order
for the Plan to retain its qualified status and receive a favorable determination letter from the
IRS.
The amendments are technical in nature, and include the following provisions:
o Revised definition of o'actuarial equivalent" (section 2.02)o A reference to IRS regulations on differential wage payments (section 4.02).o A provision incorporating Internal Revenue Code requirement that upon a member's
attainment of the normal retirement date the member's benefits under the plan are fully
vested and non-forfeitable (section 5.0 1 (a)7).o A provision incorporating Intemal Revenue Code requirements concerning death benefits
payable to a member who dies during qualified military service (section 5.08).o Deletion of outdated language concerningthe200T-08 early retirement incentive program
(sections 5.12 arrd 5.13(b)14).o A provision incorporating the maximum benefit limitations of Section 415 of the Internal
Revenue Code (section 5.13(b)15).o A provision incorporating Internal Revenue Code requirements concerning the
corrmencement of benefits (section 1 1.07).
Helping Shape Florido's Futureo
T,lvrpl Bny
l00l 3d Avenue west
Suite 670
Bradenton, FL 34205
(941) 7084040
Fax: (941) 7084024
JACKSoNvILLE
245 Riverside Avenue
Suite 150
Jacksonville, FL32202
(904) 353-64r0
Fax: (9M) 353-7619
TALLAHASSEE
2600 Centennial Place
Suite 100
Tallahassee, FL 32308-0572
(850)222-5102
Fax: (850) 224-9242
www.llw-law.com
WESTPALMBEACH
1700 Palm Beach Lakes Blvd.
Suite 1000
West Palm Beach, FL 33401
(561) 640-0820
Fax: (561) @0-8202
59
}u4ay 14,2015
Page2
o Provisions incorporating Internal Revenue Code requirements distributions and rollovers
from the plan (section 12.02).
The ordinance also reflects our recommendation that the retirement plan be restated to
incorporate all amendments that have been adopted since the plan was established in 2006 in one
document. All the ordinances creating and amending the plan are listed at the end of the
ordinance.
An Intemal Revenue Service "determination letter" is issued by the IRS in response to a request
as to the qualified status of a retirement plan under IRC section 401(a). The determination letter
expresses the Service's opinion regarding the form of the plan, and applies only to the employer
and the plan participants on whose behalf it was issued. The IRS issued a favorable
determination letter for the Miami Beach Employees' Retirement Plan on October 15,2014,
conditioned on adoption of the amendments contained in this ordinance.
While public employers that sponsor retirement plans are not required to apply for a
determination letter, receiving a favorable determination letter provides documentation that the
plan satisfies the applicable qualif,rcation standards.
There are several legal and practical advantages to obtaining a determination letter. One legal
advantage is that an IRS determination letter provides a definitive analysis of whether a plan is
qualified. It also provides the basis for retroactive relief if the Service later changes its position.
One practical advantage of obtaining a determination letter is that the City's auditors will be less
likely to question the qualified status of the Plan.
We have prepared an ordinance incorporating the IRC compliance amendments. The
amendments are technical in nature, and should not result in additional cost to the Plan or the
City.
In accordance with section 112.63(3), Florida Statutes, an actuarial impact statement will need to
be prepared before the IRC compliance ordinance is adopted on second reading.
Please let us know if you have any questions.
60
ORDINANCE NO.
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, 4, 5,
11, AND 12 OF THE PLAN TO COMPLY WITH APPLICABLE
PROVISIONS OF THE INTERNAL REVENUE CODE AND
REGULATIONS THEREUNDER, AND DELETING OUTDATED
LANGUAGE; PROVIDING FOR SEVERABILITY; REPEALINGALL ORDINANCES lN 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
fo!!ows:
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 toas 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 "MlAMl 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 othenruise
requires. The masculine pronoun, wherever used, shall include the feminine.
61
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 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 blendinq of 65% male rate and 35% female rates@
the basis ef mertality tables last adepted by the Beard ef Trustees.
2.03 "Beneficiary" means, the surviving person or persons designated as such
by a Member or Retirant in the last written designation on fib 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 Vll.
2.05 "City" or "Employer" means the City of Miami Beach, Florida.
2.06 "City Commission" or "Commission" means the City Commission of the
City of Miami Beach, Florida.
2.07 "Classified Employee" means an Employee who is employed in a
classified position under the City of Miami Beach Civil Service Act.
2.08 "Creditable Service" means service credited to a Member under the Plan
as provided in Article lV.
2.09 "Defined Contribution Retirement System" means a plan established by
the City pursuant to Ordinance 92-2813.
2.10 "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.
2.11 "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 (10o/o\
62
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 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 aU@)(17\ of
the lnternal Revenue Code, and regulations promulgated thereunder, shall be
disregarded, and no member contributions shall be required on any such excess
2.12 "Elected Officials" means the Mayor, and the members of the City
Commission of the City of Miami Beach.
213 "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 provisiona!, 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.
2.14 (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 othenruise 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
oon,n,,,-,'"mber
of the Unclassified system from that date until March 18' 2006'
63
"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.
(b) Notwithstanding Section 2.14(a) above, effective September 30,
2010, "FinalAverage 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 21a@)
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 (1112) 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 (1112) 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 (1112) 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.
2.15 "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.
216 "Member" means any Employee included in the membership of the Plan,
as provided in Article lll. A Member who retires shall be deemed a retired
member or a retirant.
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2.17 "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.
2.18 "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.
2.19 "Physical Examiners" means the physicians provided for in Section 8.060).
2.20 "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.
2.21 "Regular lnterest" means interest at the rate or rates determined by the
Board of Trustees as provided in Section 8.6(d).
2.22 "Retirant" means a person in receipt of retirement allowance payments
under the Plan on the basis of his service as an Employee.
2.23 "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.
2.24 "Retirement Plan" or "Plan" means the Miami Beach Employees
Retirement Plan created by this ordinance.
2.25 "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.
2.26 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
o049487 5-2
65
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 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
5.1 3.
(c) Effective Apri! 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 PIan 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
othenryise 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 3.3 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 to Section 3.03.
6
66
3.03 Any person serving as an Elected Official, City Manager or City 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.
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, priorto 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 3.5 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 5.9 (a).
7
67
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 othenruise 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.1. 103-353).
(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.
ln addition, for years beqinnino after December 31.2008. (i) an individual
receivinq a differential waoe pavment, as defined in Section 3401(hX2) of the
lnternal Revenue Code, shall be treated as an emplovee of the emplover making
the payment. (ii) the differential waqe pavment shall be treated as compensation,
and (iii) the plan shall not be treated as failins to meet the requirements of any
provision described in Section 414(uX1XC) of the lnternal Revenue Code by
reason of anv contribution or benefit which is based on the differential waqe
pavment.
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
68
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 4.4. 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 governmenta! entity.3) Full-time employment in the private sector performing the
same or very similar duties the employee is performing for the City
at the time of his/her election to purchase additional service.
(b) ln order to receive the additional creditable service, the Member
shall pay ten percent (10Vo) 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 4.3, 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 leasl 120 hours of
accrued sick leave after the purchase. Annual leave may be used at the
rate of t 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
69
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(a) 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 10Oo/o 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.
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 (20Yo) of the
Employee's earnings for the period purchased, with no interest on the
amount paid for such service. ln 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
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the Employee, but in no event later than the last day of employment. ln
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. !f 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, tn 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 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 fisca! 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 (20Yo) of the Employee's earnings for the
period purchased, with no interest on the amount paid for such service. !n
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. ln the case of a Member who
elects to transfer or roll over assets from a defined contribution retirement
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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. !f 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 4.4, 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 4.4 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 12.3, 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 service under this Section 4.4. 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. ln 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.
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2) Cash Payment.
3) A Member who is employed by the City at the time creditable
service is purchased pursuant to this Section 4.4 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 t 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 4.4
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 4.4, 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 4.4, the
provisions of this Section 4.4 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 4.4 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 (20Yo) 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.
(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
0049487 5 -2 13
73
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 lnitial 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, ffi?y, 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. lf 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.
Section 5. Benefits
5.01 Normal Retirement
(a) Normal Retirement Date
1) Except as othenrise provided in this subsection (a), the
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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.
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
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(b)
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 fullv vested and nonforfeitable.
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 equa! 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 (4o/o) 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
seryice, 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
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"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 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 fina! 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 or City Attorney shall be four
percent (4o/o) of final average monthly earnings multiplied by the
number of years of creditable service as an Elected Official, City
Manager or City Attorney; and the percentage rate in effect under
the Classified System, Unclassified System or this Plan, as
applicable, for any other periods of City employment multiplied by
the number of years of creditable service in such employment; up
to a maximum of eighty percent (80%) of 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 or City Attorney shall include
totalW-2 compensation plus any other payments or allowances, up
to the limitations set forth in Section 401(a)(17) of the lnternal
Revenue Code and regulations promulgated thereunder.
Notwithstanding any other provision of this Plan, the normal
retirement benefit payable to a Member who has served as an
Elected Official and is subsequently employed, without a break in
seryice, by the City in another position as a member of this Plan for
a period of at least five additional years, shall be equal to the sum
of the retirement allowance payable based on the member's
creditable service and final average monthly earnings as an Elected
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Official, plus the retirement allowance payable based on the
member's creditable service and final average monthly earnings for
the period of employment subsequent to service as an Elected
Official, up to a maximum of eighty percent (80%) of final average
monthly earnings during employment subsequent to service as an
Elected Official. ln the event a Member who has served as an
Elected Official and is subsequently employed, without a 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 entitled to a benefit from this Plan for the period of employment
subsequent to service as an Elected Official, but shall be entitled to
a refund of 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 Memberof this Plan on March 18,2006, may retire priortothe
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
(25o/o) 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 equa! 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.
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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 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) The vested retirement allowance payable under this Section 5.4
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 5.1 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 RetirementAllowance
(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 willfu! negligence on the member's part, may be
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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 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 (75o/o) 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
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80
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.
(e) Any amounts which may be paid or payable on account of disabilityto the Member or the Member's dependents under the Workers'
compensation Act, exclusive of fixed statutory payments for the loss of
any bodily member, shal! 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.
(0
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 (125Vo) 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 lncome 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 theprior 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
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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 salaryif 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 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 lncome
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
a3(c)(2) of the lnternal 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. ln 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
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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) lf any Retirant in receipt of a disability retirement allowance is found
by the Physical Examiners, prior to the norma! 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.
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. lf 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 (4oo/o) 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
0049481 5-2 23
83
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. ln 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 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 priorto 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) lf 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
othenrise have been payable to a surviving spouse or domestic partner
eligible therefor and not more than fifteen (15) years younger than the
0049487 5-2 24
84
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 fulltime 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) lf 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 deceased member. lf 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 Durinq Qualified Military Service. In the case of
a death or disability occurrinq on or after January 1. 2007, if a Member dies while
performinq qualified military service (as defined in Section 414(u) of the lnternal
Revenue Code). the survivors of the Member are entitled to anv additional
benefits (other than benefit accruals relatinq to the period of qualified militarv
service) provided under the Plan as if the Member had resumed and then
terminated employment by the Citv on account of death.
5.095€8
(a)
oo494A15-2
Optional Benefits
ln lieu of the normal or early retirement benefits provided in
25
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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. lf 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. lf 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.
(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
26
86
annuitant for the contingent annuitant's lifetime.
5.1Offi 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,
othenruise 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 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.
(0 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
o0494A7 5-2 27
87
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.tt#0 Post RetirementAdjustments
(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) "lmprovement Factor" for the purpose of this Section 5.11 means
an increase of two and one-half percent (2.5%o) 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 lmprovement 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 return of a disability Retirant to employment with the City prior
to the normal retirement date in accordance with Section 5.05(9) 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
28
88
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 accordancewith this Section 5.11, and on each October 1 subsequent
to such death the lmprovement Factor shall be applied to the then-current
retirement allowance.
flA* Return to Active Service
(a) !f 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) 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 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
29
89
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 tota! retirement benefit shall
not exceed the retirement allowance which would have been payable if all
years of creditable service had been a continuous period. lf 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.
(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(9). 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.
(d) 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 othenrise entitled on the basis of his membership in this Plan.
Effeetive Oeteber 27; 20O7; a veluntary early retirement ineentive pregram
(ERIP) shall be established in aeeerdanee with the fellewing terms, The ERIP
@iee-en er Uetere Uanuary ZS,
terminate City empleyment and retire after all ERIP eligibility requirements, but
net later than January 25; 2008, The ameunt ef the retiremenf benefit payable te
30
90
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 ordinance,
extending his or her DROP period to a maximum of sixty (60) months
in total. Effective October 16,2013, any Member within classifications
31
91
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 additiona! 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
32
92
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
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 annua!
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. ln 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. ln the event of
33
93
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.
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 Membe/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 Membe/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. ln 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) lf 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
34
94
the DROP account. lf 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 lnternal Revenue Service Code and in
compliance with applicable laws and regulations.
14)
ERIP must terminate City empleyment and retire after meeting all
ERIP eligibility requirements; but net later than January 25, 2008,
The ameunt ef the retirement benefit payable te Mernbers whe
retirement,
Limit under Section 415(b) of the lnternal Revenue Code.
Notwithstandinq anv 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 lnternal 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 includinq waqes, salaries, fees for professional services and
other amounts for personal services actually rendered in the
course of employment with the Citv to the extent that such
amounts are included in gross income (or to the extent amounts
would have been received and includible in qross income but for
an election under Internal Revenue Code section 125(a). 132(fl(4),
402(eX3), 402(hX1XB), 402(k) or 457(b)). and compensation in
excess of the limitations set forth in Section 401(aX17) of the
lnternal Revenue Code. and requlations promulqated thereunder,
shall be disreqarded.
35
95
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 (10Yo) of earnings, except as othenruise 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 (10Yo) of earnings except as othenrvise 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 Members' gross income for Federal lncome 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 "Othe/' 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%o) of their earnings
throughout their service as a Member of this Plan. Notwithstanding the
o0494415-2 36
96
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 (12Yo) 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 (12o/o) 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 (12Yo) 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 g0%,
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 12o/o,
depending on the contribution rate that is applicable) of the excess over
$2,000. lf 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
oonrn,u-,0'ovides
for such limitation'
37
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(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 Apri! 30, 2013; ten percent (10%) of earnings
effective May 1 ,2013 through April 23, 2014; and twelve percent
(12Yo) 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 (10o/o) of earnings.
4) The employee contribution provided in paragraphs 1 . and 2.
above shall decrease by two percent (2o/o) 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 (23.5o/o) of pensionable payroll or less.
6.03 Contributions by City
(a) lt 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 annua!
cost of the Plan net of Member contribution assigned to the current Plan
year. lf the net City "normal cost" for any Plan year exceeds the City's
annual required contribution as determined in accordance with Part Vll,
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 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
38
98
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." ln 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 Norma! Contribution Rate and an Accrued Liability Contribution Rate
and an Administrative Cost Contribution Rate.
(c) lt 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. ln 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
39
99
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.
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 lnternal 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 lnternal 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 lnternal 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 lnternal 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 lnternal 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
lnternal 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 othenryise shall be made or allowed under the Preservation of Benefits
Plan.
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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 lnternal 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 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
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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.
(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.
(j) 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
42
102
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.
(l) 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 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
oon,n,,,-r'n
section 8'02 (a) and to'*la
103
(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. lnvestments
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 capita!.
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, 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 madein 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 othenruise 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 lran, as
follows:
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(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 lran general includes
a company with business operations that involve the Government of lran
or certain companies, and have revenues or assets linked to lran and
i nvolve oil-related or mineral-extraction u nder certai n cond itions.
(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 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 shalt have satisfactorily
discharged the fiduciary duties of loyalty, prudence, and sole and lexctusive
benefit to the members of the Plan and their beneficiaries if the actions it
takes are consistent with the duties imposed by section 21s.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.
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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) !t 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.
(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.
(0 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
46
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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 add itionally.
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 direcfly 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. ln case of
termination of the Plan, or in the event of the 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 parfly, at the
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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 1g,
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. notwithstandinq anythinq herein to the
contraU, a member's benefits shall commence no later than Aoril 1 of the
calendar vear followinq the later of (a) the calendar vear in which he or she
attains aqe 70 % or (b) the calendar year in which the member retires. All
distributions from the Plan shall conform to the requlations issued under Section
401(a\(9) of the Internal Revenue Code, includino the incidental death benefit
provision of Section 401(aX9XG) of the lnternal Revenue Code. Further. such
reaulation shall override any Plan provision that is inconsistent with Section
401(aX9) of the lnternal Revenue Code.
an
retirement income payable from this plan shall satisfv the followinq conditions:
(a) lf the retirement income is payable before the member's death:
1) lt shall either be distributed or commence to the member not
later than April 1 of the calendar vear followino the later of the
calendar year in which the member attains aoe 70 1/2, or the
calendar vear in which member retires:
2) The distribution shall commence not later than the calendar
vear defined above: and (a) shall be paid over the life of the
member or over the lifetimes of the member and spouse. issue or
deDendent. or (b) shall be paid over the period extendinq not
beyond the life expectancv of the member and spouse, issue or
dependent.
Where a form of retirement income payment has commenced in
accordance with the precedinq paraqraphs and the member dies before
his entire interest in the plan has been distributed, the remaininq portion of
such interest in the plan shall be distributed no less rapidlv than under the
form of distribution in effect at the time of the member's death.
(b) lf 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 vears of member's death. unless it is to be
distributed in accordance with the followinq rules:
1) The member's remainino interest in the Plan is payable to his
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108
spouse, issue or dependent:
2) The remaininq interest is to be distributed over the life of the
spouse, issue or dependent or over a period not extendinq bevond
the life expectancv of the spouse. issue or dependent: and
3) such distribution beqins within one vear of the member's death
unless the member's spouse. is the sole desiqnated beneficiary, in
which case the distribution need not beoin before the date on which
the member would have attained aqe 70 1/2 and if the member's
spouse dies before the distribution to the spouse beqins, 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 Janu ary 1, 1993.
Notwithstanding any provision of this Ordinance to the contrary that would
othenruise 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 extent such
distribution is required under Section a01(a)(9) of the lnternal 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 lnternal Revenue
Code, an individual retirement annuity described in Section 408(b) of the
lnternal Revenue Code, an annuity plan described in Section 403(a) of the
lnternal Revenue Code, an eligible deferred compensation plan described
in section 457(b) of the lnternal Revenue Code which is maintained by an
oo49481 5 -2 49
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eligible employer described in section 457(e)(1)(A) of the lnternal
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 lnternal Revenue Code, or a qualified trust described
in section 401 (a) of the lnternal revenue Code that provides or accepts
the distributee's eligible rollover distribution. Effective for distributions
made after December 31. 2001. an elisible retirement plan shall also
mean an annuity contract described in Section 403(b) of the lnternal
Revenue Code and an elisible plan under Section 457(b) of the lnternal
Revenue Code which is maintained by a state, political subdivision of a
state. or any aqency or instrumentalitv of a state or political subdivision of
a state and which aqrees to separatelv account for amounts transferred
into such plan from this Plan
irenrent
anri{*it1c
(c) Distributee: A distributee includes an Employee or former
Employee. ln 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 Januarv 1, 2008, an
Employee's or former Emplovee's non-spouse Beneficiary is a distributee
with reqard 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 onlv to an
"inherited" individual retirement account as described in Section 408(b) of
the lnternal Revenue Code. lf a non-spouse Beneficiary receives a
distribution from the Plan. the distribution is not eliqible 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 4.4 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 accept legally
permissible Member requested transfers from eligible retirement plans.
(b) Member Rollover Contributions from 401 (a) Plans and lRAs. The
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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 thifi (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 25% 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.
(0 The employee contribution shall be 10o/o 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.
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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) ln 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. lncorporation by Reference of Resolution No. 2013-28290.
Resolution No. 2013-28290, accepting the recommendations of the
Finance and Cihrrwide 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. 201 3-3806.
Section 3. Conflicts and Severability.
(a) All Ordinances, and parts of ordinances, in conflict herewith shall
be and the same, are hereby repealed.
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(b) !n 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 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 2015.
PASSED and ADOPTED this day of 2015.
PHILIP LEVINE
MAYOR
ATTEST:
APPROVED AS TO
FORM & TANGUAGE
& FOR EXECUTION
RAFAEL E. GRANADO
CITY CLERK
(Sponsored by Commissioner Deede Weithorn)
Underscore denotes new lanquage
(Ordinance Nos. 2006-3504, 2006-3530, 2007-3575, 2009-3626, 2009-3664,
20 1 0-3693, 20 1 0 -37 06, 20 13-3 806, 201 4-3937, 20 1 4 -3964)
,(",, -Dote
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