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89-19808 RESO RESOLUTION # 89- 19808 RESOLUTION OF THE CITY COMMISSION OF THE CITY OF MIAMI BEACH, FLORIDA AUTHORIZING THE PAYMENT TO RETIREES FROM AN ANNUAL APPROPRIATION ANY AMOUNTS THAT THEIR PENSION ALLOWANCES HAVE BEEN REDUCED BY THE EFFECT OF THE INTERNAL REVENUE SERVICE CODE SECTION 415 WHEREAS, the City Commission of the City of Miami Beach, Florida has established Pension Systems for its employees under Chapter 18691 Special Acts 1937, Chapter 23414 Special Acts 1945, Ordinance 88-2603 and Ordinance 89-2640 with a defined level of benefits; and, WHEREAS, the Internal Revenue Code of 1986 has i~plemented in its Section 415 a limitation on the amount of pension benefits which an organization may grant to a retiring employee; and, WHEREAS, the City Co~nission of the City of Miami Beach desires that .~ the benefit levels granted retiring employees under its Pension Systems not be diminished by changes in the Internal Revenue Code; NOW THEREFORE, BE IT DULY RESOLVED BY THE CITY COMMISSION OF THE CITY OF MIAMI BEACH, FLORIDA: 1. That an appropriation be annually funded from the general fund of the City of Miami Beach in an amount necessary to fully fund the defined benefits granted to retiring employees in the General Employees Retirement System, the Police and Fire Retirement System, the Unclassified Employees and Elected Officials Retirement System and the Supplemental Pension Fund for Firemen and Policemen. 2. That the Boards of Trustees of these Retirement and Pension Systems direct their actuaries to calculate the amount necessary to fund the requirements 'of their defined benefit plans gliving effect to the reductions caused by theimpl~mentation of the Internal \ Revenue Code Section 415. 3. That the residual amounts within the appropriation be paid, on a monthly basis, in an amount to each retiree equal to the difference between the allowable pension to be paid under the Internal Revenue Code and the amount of the defined benefit granted under the respective system. 4. This Resolution will take effect immediately upon adoption. PASSED AND ADOPTED THIS 15th day of November 1989. ATTEST: ~ ~ /J ~ J ~ j u/~ ;I) ! ~A~-- Elaine Baker, City Clerk Abp. Resnick, Vice-Mayor By Date " 'j ~ of 71ttaHd g: ead 6~~ p~;:S:Zir\ 'i""!~'~"\ ~ * ~NC.OIlP: IOIl.lTEO) * ~ "-:So' ~ ,/~j 'Q}"'~C ~';;;,~.? ~4~ FLORIDA 33139 "V ACA T10NLAND USA,'. OFFICE OF THE CITY MANAGER ROB W. PARKINS CITY MANAGER CITY HALL 1700 CONVENTION CENTER DRIVE TELEPHONE: 673.7010 COMMISSION MEMORANDUM NO. ~~n (,) <yij-/ DATE: November 15. 19S9 FROM: TO: SUBJECT: RESTORING PENSION BENEFITS LOST UNDER INTERNAL REVENUE CODE SECTION 415 In 1986 when the U.S. Congress passed the changes to the Internal Revenue Code, they included a provision that limits the amount of pension that a person may earn, This limitation is the lessor of $90,000 at age 62 actuarally reduced to the age of retirement, ($48,000 at age 50) or one-twelth of the average taxable income over the last three years of employment. To this point, no re- tirees pension has been reduced due to this limitation; however, it appears that several employees contemplating retirement will be affected by this provision. As the Pension Systems of the City are precluded from paying bene- fits in excess of these limitations, the amount of their pension will be reduced. Since the level of benefits granted to employees by the City Commission is what has been anticipated by our employees, this Resolution will restore the benefits that would otherwise be reduced. Administration Recommendation: The Administration recommends that the City Commission adopt this R~solution restoring benefit levels. RWP: RJN: S\v Attachment 15 DATE R-;-C- 11- , S.. 81 AGENDA ITEM