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0657 Police Pension ORDINANCE NO. 657 AN ORDINANCE OF THE CITY OF OKEECHOBEE AMENDING AND RESTATING THE CITY OF OKEECHOBEE RETIREMENT SYSTEM FOR POLICE OFFICERS AS ADOPTED BY ORDINANCE 421 AND AS SUBSEQUENTLY AMENDED; PROVIDING FOR DEFINITIONS; PROVIDING FOR MEMBERSHIP; PROVIDING FOR A BOARD OF TRUSTEES; PROVIDING FOR FINANCES AND FUND MANAGEMENT; PROVIDING FOR CONTRIBUTIONS; PROVIDING FOR BENEFIT AMOUNTS AND ELIGIBILITY; PROVIDING FOR DEATH BENEFITS; PROVIDING FOR DISABILITY BENEFITS; PROVIDING FOR VESTING OF BENEFITS; PROVIDING OPTIONAL FORMS OF BENEFITS; PROVIDING FOR BENEFICIARIES; PROVIDING A CLAIMS PROCEDURE; PROVIDING FOR REPORTS TO THE DEPARTMENT OF INSURANCE; PROVIDING FOR A ROSTER OF RETIREES; PROVIDING FOR A BOARD ATTORNEY AND PROFESSIONALS; PROVIDING FOR A MAXIMUM PENSION LIMITATION; PROVIDING FOR COMMENCEMENT AND DISTRIBUTION OF BENEFITS; PROVIDINGMISCELLANEOUSPROVISIONS; PROVIDING FOR REPEAL OR TERMINATION OF THE SYSTEM; PROVIDING FOR EXEMPTION FROM EXECUTION AND NON ASSIGNABILITY; PROVIDING FOR PENSION VALIDITY; PROVIDING FOR FORFEITURE OF PENSION UNDER CERTAIN CIRCUMSTANCES; PROVIDING FOR INDEMNIFICATION; PROVIDING FOR TRANSFERS WITHIN THE CITY; PROVIDING FOR CREDIT FOR MILITARY SERVICE PRIOR TO EMPLOYMENT; PROVIDING FOR DIRECT TRANSFERS OF ELIGIBLE ROLLOVER DISTRIBUTIONS; PROVIDING FOR CODIFICATION; PROVIDING FOR SEVERABILITY OF PROVISIONS; REPEALING ALL ORDINANCES IN CONFLICT HEREWITH AND PROVIDING AN EFFECTIVE DATE. WHEREAS, the City of Okeechobee Police Officers are presently provided pension and certain other benefits under Ordinances of the City of Okeechobee and; WHEREAS, the City Council desires to clarify and restate the provisions of the Police Officers' Retirement Plan to consolidate all prior ordinances and Code provisions and to incorporate Federal law and the applicable provisions of Chapter 185, Florida Statutes; NOW, THEREFORE, BE IT ORDAINED BY THE CITY COUNCIL OF THE CITY OF OKEECHOBEE, FLORIDA: SECTION 1: That the City of Okeechobee Retirement System for Police Officers as adopted by Ordinance 421 and as subsequently amended, be and the same is amended and restated as set forth in the document designated CITY OF OKEECHOBEE MUNICIPAL POLICE OFFICERS' PENSION TRUST FUND, attached hereto and made a part hereof. SECTION 2: Specific authority is hereby granted to codify and incorporate this Ordinance in the existing Code of Ordinances of the City of Okeechobee. SECTION 3: All Ordinances or parts of Ordinances in conflict herewith be and the same are hereby repealed. SECTION 4: If any section, subsection, sentence, clause, phrase of this ordinance, or the particular application thereof shall be held invalid by any court, administrative agency, or other body with appropriate jurisdiction, the remaining section, subsection, sentences, clauses, or phrases under application shall not be affected thereby. SECTION 5: That this Ordinance shall become effective upon adoption. Introduced on first reading this 6th day of April 1993. (11, fa E. Dirk, Mayor ATTEST: Bonnie S. T omas, CMC, CITY CLERK Passed on second reading after public hearing this 20th day of April 1993. 014 amen E. Kirk, MAYOR ATTEST: 1 :onnie S. Thomas, CMC, CITY CLERK CITY OF OKEECHOBEE MUNICIPAL POLICE OFFICERS' PENSION TRUST FUND TABLE OF CONTENTS SECTION PAGE NUMBER DEFINITIONS 1 MEMBERSHIP 4 BOARD OF TRUSTEES 4 FINANCES AND FUND MANAGEMENT 7 CONTRIBUTIONS 12 BENEFIT AMOUNTS AND ELIGIBILITY 14 DEATH BENEFITS 15 DISABILITY 16 VESTING 20 OPTIONAL FORMS OF BENEFITS 21 BENEFICIARIES 24 CLAIMS PROCEDURES 25 REPORTS TO DEPARTMENT OF INSURANCE 32 ROSTER OF RETIREES 33 BOARD ATTORNEY AND PROFESSIONALS 33 MAXIMUM PENSION 33 COMMENCEMENT OF BENEFITS 37 DISTRIBUTIONS OF BENEFITS 38 MISCELLANEOUS PROVISIONS 39 REPEAL OR TERMINATION OF SYSTEM 41 EXEMPTION FROM EXECUTION, NON ASSIGNABILITY 45 PENSION VALIDITY 45 FORFEITURE OF PENSION 45 INDEMNIFICATION 47 TRANSFERS WITHIN THE CITY 47 MILITARY SERVICE PRIOR TO EMPLOYMENT 48 DIRECT TRANSFERS OF ELIGIBLE ROLLOVER DISTRIBUTIONS 49 CITY OF OKEECHOBEE MUNICIPAL POLICE OFFICERS' PENSION TRUST FUND SECTION 1. DEFINITIONS. 1. As used herein, unless otherwise defined or required by the context, the following words and phrases shall have the meaning indicated: Accumulated Contributions means a Member's own contributions with interest at the rate of five and one quarter percent (5-1/4%) per annum through September 30, 1993 and four and one quarter percent (4.25 per annum thereafter. For those Members who purchase Credited Service at no cost to the System, pursuant to Sections 25 and 26, only that portion of any payment representing the sum that he would have contributed had he been a Member of the System for the years for which he is requesting credit, shall be included in Accumulated Contributions. Act means the Employee Retirement Income Security Act of 1974 (P.L. 93- 406) as amended by the Retirement Equity Act of 1984 (P.L. 98 -397) and any regulations issued thereunder by the Department of Labor and the Internal Revenue Service, as that Statute and these regulations shall be amended. Actuarial Equivalent means that any benefit payable under the terms of this System in a form other than the normal form of benefit shall have the same actuarial present value on the date payment commences as the normal form of benefit. For purposes of establishing the actuarial present value of any form of payment other than a lump sum distribution, all future payments shall be discounted for interest and mortality by using 7 interest and the 1971 Group Annuity Mortality Table for Males, with ages set ahead five years in the case of disability retirees. Average Final Compensation means one twelfth (1/12) of the average Salary of the five (5) best years of the last ten (10) years of Credited Service prior to retirement, termination, or death, or the career average as a full-time Police Officer, whichever is greater. A year shall be twelve (12) consecutive months. -1- Beneficiary means the person or persons entitled to receive benefits hereunder at the death of a Member who has or have been designated in writing by the Member and filed with the Board. If no such designation is in effect, or if no person so designated is living, at the time of death of the Member, the Beneficiary shall be the estate of the Member. Board means the Board of Trustees, which shall administer and manage the System herein provided and serve as trustees of the Fund. City means City of Okeechobee, Florida. Code means the Internal Revenue Code of 1986, as amended from time to time. Credited Service means the total number of years and fractional parts of years of service as a Police Officer with Member contributions to the System, omitting intervening years or fractional parts of years when such Police Officer may not be employed by the City. A Police Officer may voluntarily leave his contribution in the Fund for a period of five (5) years after leaving the employ of the Police Department pending the possibility of being rehired, and remaining employed for a period of not less than three (3) years, without losing credit for the time of active participation as a Police Officer. If the Police Officer does not remain employed for a period of three (3) years upon reemployment within five (5) years, then the Accumulated Contributions will be returned upon the written request of the Member. The years or fractional parts of years that a Police Officer serves in the military service of the Armed Forces of the United States or the United States Merchant Marine, voluntarily or involuntarily, after separation from employment as a Police Officer with the City, shall be added to his years of Credited Service, for all purposes, including vesting, provided that (except as otherwise prohibited by law, in which case the minimum standards for compliance shall apply): -2- A. The Police Officer must return to his employment as a Police Officer with the City within one (1) year from the date of his military discharge. B. The Police Officer deposits into the Fund the same sum that Member would have contributed if he had remained a Police Officer, plus an amount of interest that substantially approximates the amount earned by the Fund from the date of return to employment to the date of deposit. Effective Date means the date on which this ordinance becomes effective. Fund means the trust fund established herein as part of the System. Member means an actively employed Police Officer who fulfills the prescribed participation requirements. Police Officer means an actively employed full -time person, employed by the City, including his initial probationary employment period, who is certified as a Police Officer as a condition of employment in accordance with the provisions of §943.14, Florida Statutes, who is vested with authority to bear arms and make arrests, and whose primary responsibility is the prevention and detection of crime or the enforcement of the penal, traffic, or highway laws of the State of Florida. Salary means the total monthly compensation reported on the Police Officer's W -2 form plus all tax deferred and tax exempt items of income. Spouse means the lawful wife or husband of a Member at the time of pre retirement death or retirement. System means the City of Okeechobee Municipal Police Officers' Pension Trust Fund as contained herein and all amendments thereto. 2. Masculine Gender. The masculine gender, where used herein, unless the context specifically requires otherwise, shall include both the feminine and masculine genders. -3- SECTION 2. MEMBERSHIP. 1. Conditions of Eligibility. A. All Police Officers as of the Effective Date, and all future new Police Officers, shall become Members of this System as a condition of employment. B. All future new Police Officers shall be required to complete a medical examination as prescribed by the City. Based upon medical evidence of a pre existing adverse health condition, resulting from the prescribed examination or other records or medical history, the Board may declare any Member ineligible for disability benefits hereunder, as related to such pre existing condition. Each declaration shall be reflected in the minutes of the meeting of the Board at which such declaration was formally adopted or established by the Board. 2. Membership. Each Police Officer shall complete a form prescribed by the Board providing the following information: A. Acceptance of the terms and conditions of the System, and, B. Designation of a Beneficiary or Beneficiaries, and, C. A sworn statement as to prior medical and psychological history. 3. Change in Desienation of Beneficiary A Member may from time to time change his designated Beneficiary by written notice to the Board upon forms provided by the Board. Upon such change, the rights of all previously designated Beneficiaries to receive any benefits under the System shall cease. SECTION 3. BOARD OF TRUSTEES. 1. The sole and exclusive administration of and responsibility for the proper operation of the System and for making effective the provisions of this ordinance are hereby -4- vested in a Board of Trustees. The Board of Trustees is hereby designated as the plan administrator. The Board of Trustees shall consist of five (5) Trustees, two of whom, unless otherwise prohibited by law, shall be legal residents of the municipality, who shall be appointed by the Okeechobee City Council, and two of whom shall be full -time Police Officer Members of the System, who shall be elected by a majority of the Police Officers who are Members of the System. The fifth Trustee shall be chosen for a two (2) year term by a majority of the previous four Trustees as provided for herein, and such person's name shall be submitted to the Okeechobee City Council. Upon receipt of the fifth person's name, the Okeechobee City Council shall, as a ministerial duty, appoint such person to the Board of Trustees as its fifth Trustee. The fifth Trustee shall have the same rights as each of the other four Trustees appointed or elected as herein provided and shall serve a two (2) year term unless the office is sooner vacated and may succeed himself in office. Each resident Trustee shall serve as Trustee for a period of two (2) years, unless sooner replaced by the Okeechobee City Council at whose pleasure the Trustee shall serve, and may succeed himself as a Trustee. Each Police Officer Trustee shall serve as Trustee for a period of two (2) years, unless he sooner leaves the employment of the City as a Police Officer or otherwise vacates his office as Trustee, whereupon a successor shall be chosen in the same manner as the departing Trustee. Each Police Officer may succeed himself in office. The Board of Trustees shall meet at least quarterly each year. The Board of Trustees shall be a legal entity with, in addition to other powers and responsibilities contained herein, the power to bring and defend lawsuits of every kind, nature, and description. 2. The Trustees shall, by a majority vote, elect a Chairman and a Secretary. The Secretary of the Board shall keep a complete minute book of the actions, proceedings, or hearings of the Board. The Trustees shall not receive any compensation as such, but may receive expenses and per diem as provided by law. -5- 3. Each Trustee shall be entitled to one vote on the Board. Three (3) affirmative votes shall be necessary for any decision by the Trustees at any meeting of the Board. A Trustee shall have the right to abstain from voting as the result of a conflict of interest provided that Trustee complies with the provisions of Section 112.3143, Florida Statutes. 4. The Board shall engage such actuarial, accounting, legal, and other services as shall be required to transact the business of the System. The compensation of all persons engaged by the Board and all other expenses of the Board necessary for the operation of the System shall be paid from the Fund at such rates and in such amounts as the Board shall agree. 5. The duties and responsibilities of the Board shall include, but not necessarily be limited to, the following: A. To construe the provisions of the System and determine all questions arising thereunder. B. To determine all questions relating to eligibility and membership. C. To determine and certify the amount of all retirement allowances or other benefits hereunder. D. To establish uniform rules and procedures to be followed for administrative purposes, benefit applications and all matters required to administer the System. E. To distribute to Members, at regular intervals, information concerning the System. F. To receive and process all applications for membership and benefits. G. To authorize all payments whatsoever from the Fund, and to notify the disbursing agent, in writing, of approved benefit payments and other expenditures arising through operation of the System and Fund. -6- H. To have performed actuarial studies and at least biennial valuations, and make recommendations regarding any and all changes in the provisions of the System. I. To perform such other duties as are specified in this ordinance. SECTION 4. FINANCES AND FUND MANAGEMENT. Establishment and Overation of Fund. 1. As part of the System, there is hereby established the Fund, into which shall be deposited all of the contributions and assets whatsoever attributable to the System, including the assets of the prior Municipal Police Officers' Pension Trust Fund. 2. The actual custody and supervision of the Fund (and assets thereof) shall be vested in the Board. Payment of benefits and disbursements from the Fund shall be made by the disbursing agent but only upon written authorization from the Board. 3. All funds and securities of the Municipal Police Officers' Pension Trust Fund may be deposited by the Board with the Finance Director of the municipality, acting in a ministerial capacity only, who shall be liable in the same manner and to the same extent as he is liable for the safekeeping of funds for the municipality. However, any funds and securities so deposited with the Finance Director of the municipality shall be kept in a separate fund by the Finance Director or clearly identified as such funds and securities of the Municipal Police Officers' Pension Trust Fund. In lieu thereof, the Board shall deposit the funds and securities of the Municipal Police Officers' Pension Trust Fund in a qualified public depository as defined in §280.02, Florida Statutes, which depository with regard to such funds and securities shall conform to and be bound by all of the provisions of Chapter 280, Florida Statutes. In order to fulfill its investment responsibilities as set forth herein, the Board may retain the services of a custodian bank, an investment advisor registered under the Investment Advisors Act of 1940 or otherwise exempt from such required registration, an insurance company, or a combination of these, for the purposes of investment decisions -7- and management. Such investment manager shall have discretion, subject to any guidelines as prescribed by the Board, in the investment of all Fund assets. 4. All funds and securities of the System may be commingled in the Fund, provided that accurate records are maintained at all times reflecting the financial composition of the Fund, including accurate current accounts and entries as regards the following: A. Current amounts of Accumulated Contributions of Members on both an individual and aggregate account basis, and B. Receipts and disbursements, and C. Benefit payments, and D. Current amounts clearly reflecting all monies, funds and assets whatsoever attributable to contributions and deposits from the City, and E. All interest, dividends and gains (or losses) whatsoever, and F. Such other entries as may be properly required so as to reflect a clear and complete financial report of the Fund. 5. An independent audit shall be performed annually by a certified public accountant for the most recent fiscal year of the City showing a detailed listing of assets and a statement of all income and disbursements during the year. Such income and disbursements must be reconciled with the assets at the beginning and end of the year. Such report shall reflect a complete evaluation of assets on both a cost and market basis, as well as other items normally included in a certified audit. 6. The Board shall have the following investment powers and authority: A. The Board shall be vested with full legal title to said Fund, subject, however, and in any event to the authority and power of the Okeechobee City Council to amend or terminate this Fund, provided that no amendment or Fund termination shall ever result in the use of any assets of this Fund except for the payment of regular expenses and -8- benefits under this System. All contributions from time to time paid into the Fund, and the income thereof, without distinction between prin- cipal and income, shall be held and administered by the Board or its agent in the Fund and the Board shall not be required to segregate or invest separately any portion of the Fund. B. All monies paid into or held in the Fund shall be invested and reinvested by the Board and the investment of all or any part of such funds shall be limited to: (1) Annuity and life insurance contracts of life insurance companies in amounts sufficient to provide, in whole or in part, the benefits to which all of the Members in the Fund shall be entitled under the provisions of this System and pay the initial and subsequent premium thereon. (2) Time or savings accounts of a national bank, a state bank or a savings/building and loan association insured by the Federal Deposit Insurance Corporation. (3) Obligations of the United States or obligations guaranteed as to principal and interest by the government of the United States. (4) Bonds issued by the State of Israel. (5) Bonds, stocks, commingled funds administered by National or State Banks or evidences of indebtedness issued or guaranteed by a corporation organized under the laws of the United States, any state or organized territory of the United States, or the District of Columbia, provided that the corporation is traded on a nationally recognized exchange and holds a rating in one of the three highest classifications by a major rating service, and -9- if such investments are made in a pooled fund administered by a state or national bank, then the rating of each issue in the pooled fund shall hold a rating within the top three (3) rating classifications of a major rating service and no foreign investments shall be permitted in the pooled fund. (6) Real estate. C. The Board shall not invest more than five percent (5 of its assets in the common stock, capital stock or convertible securities of any one issuing company, nor shall the aggregate investment in any one issuing company exceed five percent (5 of the outstanding capital stock of that company; nor shall the aggregate of its investments in common stock, capital stock and convertible securities at cost exceed sixty percent (60 of the assets of the Fund. D. The Board may retain in cash and keep unproductive of income such amount of the Fund as it may deem advisable, having regard for the cash requirements of the System. E. No person or entity shall be liable for the making, retention or sale of any investment or reinvestment made as herein provided, nor for any loss or diminishment of the Fund, except that due to his or its own negligence, willful misconduct or lack of good faith. F. The Board may cause any investment in securities held by it to be registered in or transferred into its name as Trustee or into the name of such nominee as it may direct, or it may retain them unregistered and in form permitting transferability, but the books and records shall at all times show that all investments are part of the Fund. -10- G. The Board is empowered, but is not required, to vote upon any stocks, bonds, or securities of any corporation, association, or trust and to give general or specific proxies or powers of attorney with or without power of substitution; to participate in mergers, reorganizations, recapitaliza- tions, consolidations, and similar transactions with respect to such securities; to deposit such stock or other securities in any voting trust or any protective or like committee with the Trustees or with depositories designated thereby; to amortize or fail to amortize any part or all of the premium or discount resulting from the acquisition or disposition of assets; and generally to exercise any of the powers of an owner with respect to stocks, bonds, or other investments comprising the Fund which it may deem to be to the best interest of the Fund to exercise. H. The Board shall not be required to make any inventory or appraisal or report to any court, nor to secure any order of court for the exercise of any power contained herein. I. Where any action which the Board is required to take or any duty or function which it is required to perform either under the terms herein or under the general law applicable to it as Trustee under this ordinance, can reasonably be taken or performed only after receipt by it from a Member, the City, or any other entity, of specific informa- tion, certification, direction or instructions, the Board shall be free of liability in failing to take such action or perform such duty or function until such information, certification, direction or instruction has been received by it. -11- J. Any overpayments or underpayments from the Fund to a Member or Beneficiary caused by errors of computation shall be adjusted with interest at a rate per annum approved by the Board. Over payment shall be charged against payments next succeeding the correction. Underpayments shall be made up from the Fund. K. The Board shall sustain no liability whatsoever for the sufficiency of the Fund to meet the payments and benefits herein provided for. L. In any application to or proceeding or action in the courts, only the Board shall be a necessary party, and no Member or other person having an interest in the Fund shall be entitled to any notice or service of process. Any judgment entered in such a proceeding or action shall be conclusive upon all persons. M. Any of the foregoing powers and functions reposed in the Board may be performed or carried out by the Board through duly authorized agents, provided that the Board at all times maintains continuous supervision over the acts of any such agent; provided further, that legal title to said Fund shall always remain in the Board. N. The Board shall not invest more than twenty percent (20%) at cost of its assets in real property or real estate and there shall be no investment in a limited partnership or trust. SECTION 5. CONTRIBUTIONS. 1. Member Contributions. A. Amount. Members of the System shall be required to make regular contributions to the Fund in the amount of five percent (5 of his Salary. Member contributions withheld by the City on behalf of the Member shall be deposited with the Board at least monthly. The -12- contributions made by each Member to the Fund shall be designated as employer contributions pursuant to §414(h) of the Internal Revenue Code of 1986. Such designation is contingent upon the contributions being excluded from the Members' gross income for Federal Income Tax purposes. For all other purposes of the System, such contributions shall be considered to be Member contributions. B. Method. Such contributions shall be made by payroll deduction. 2. State Contributions. Any monies received or receivable by reason of laws of the State of Florida, for the express purpose of funding and paying for retirement benefits for Police Officers of the City shall be deposited in the Fund comprising part of this System immediately and under no circumstances more than five (5) days after receipt by the City. 3. Citv Contributions. So long as this System is in effect, the City shall make quarterly contributions to the Fund in an amount equal to the difference in each year, between the total aggregate Member contributions for the year, plus state contributions for such year, and the total cost for the year, as shown by the most recent actuarial valuation of the System. The total cost for any year shall be defined as the total normal cost plus the additional amount sufficient to amortize the unfunded past service liability over a forty (40) year period, commencing with the fiscal year in which the Effective Date of this System occurs. 4. Other. Private donations, gifts and contributions may be deposited to the Fund, but such deposits must be accounted for separately and kept on a segregated bookkeeping basis. Funds arising from these sources may be used only for additional benefits for Members, as determined by the Board, and may not be used to reduce what would have otherwise been required City contributions. -13- SECTION 6. BENEFIT AMOUNTS AND ELIGIBILITY. 1. Normal Retirement Date. A Member's normal retirement date shall be the first day of the month coincident with, or the next following age sixty (60) and the completion of ten (10) years of Credited Service, or upon the completion of twenty-five (25) years of Credited Service regardless of age. A Member may retire on his normal retirement date or on the first day of any month thereafter, and each Member shall become 100% vested in his accrued benefit on the Member's normal retirement date. Normal retirement under the System is retirement from employment with the City on or after the normal retirement date. 2. Normal Retirement Benefit. A Member retiring hereunder on or after his normal retirement date shall receive a monthly benefit which shall commence on his retirement date and be continued thereafter during Member's lifetime, ceasing upon death, but with one hundred twenty (120) monthly payments guaranteed in any event. The monthly retirement benefit shall equal three percent (3 of Average Final Compensation, for each year of Credited Service. 3. Early Retirement Date. A Member may retire on his early retirement date which shall be the first day of any month coincident with or next following the attainment of age fifty -five (55) and the completion of ten (10) years of Credited Service. Early retirement under the System is retirement from employment with the City on or after the early retirement date and prior to the normal retirement date. 4. Early Retirement Benefit. A Member retiring hereunder on his early retirement date may receive either a deferred or an immediate monthly retirement benefit payable in the same form as for normal retirement as follows: -14- A. A deferred monthly retirement benefit which shall commence on what would have been his normal retirement date had he continued employment as a Police Officer and shall be continued on the first day of each month thereafter. The amount of each such deferred monthly retirement benefit shall be determined in the same manner as for retirement on his normal retirement date except that Credited Service and Average Final Compensation shall be determined as of his early retirement date; or B. An immediate monthly retirement benefit which shall commence on his early retirement date and shall be continued on the first day of each month thereafter. The benefit payable shall be as determined in paragraph A above, which is reduced by one fifteenth (1 /15th) for each of the first five (5) years and one thirtieth (1 /30th) for each of the next five (5) years by which the commencement of benefits precedes the date which would have been the Member's normal retirement date had he continued employment as a Police Officer. SECTION 7. DEATH BENEFITS. 1. Prior to Vesting or Eligibility for Retirement. The Beneficiary of a deceased Member who was not receiving monthly benefit payments, or who was not yet vested or eligible for retirement shall receive a refund of one hundred percent (100 of the Member's Accumulated Contributions. 2. Deceased Members Vested or Eligible for Retirement. Any Member, whether or not still actively employed, who has a right to a vested accrued benefit, shall be eligible for a death benefit if he dies before collecting any other benefits from this System. The amount of the death benefit shall be equal to fifty -15- percent (50 of the actuarially equivalent single sum value of the Member's vested accrued benefit or his Accumulated Contributions, whichever is greater. If this single sum value is less than $3,500, it shall be paid in a lump sum. If the value exceeds $3,500, the Beneficiary may elect payment under any of the optional forms available for retirement benefits or a lump sum payment. If a Member is eligible for early or normal retirement, but remains in employment and dies while so employed, the death benefit shall be determined as follows: It shall be assumed that such deceased Member had retired immediately preceding his date of death and elected the Ten Year Certain and Life Thereafter option. However, the death benefit shall be equal to fifty percent (50%) of the actuarially equivalent single sum value of the Member's vested accrued benefit, if larger than the Ten Year Certain and Life Thereafter Option, described earlier in this Section. SECTION S. DISABILITY. 1. Disability Benefits On- Duty Each Police Officer who is a Member in the System and who shall have become totally and permanently disabled while an active Member of the Okeechobee Police Department to the extent that he is unable, by reason of a medically determinable physical or mental impairment, to render useful and efficient service as a Police Officer, which disability was directly caused by the performance of his duty as a Police Officer, shall, upon establishing the same to the satisfaction of the Board, be entitled to a monthly pension determined in the same manner as for early retirement as set forth in Section 6, subsection 4B, but in any event, the minimum amount paid to the Member shall be forty -two percent (42%) of the Average Final Compensation of the Member. Any condition or impairment of health of a Police Officer caused by tuber- culosis, hypertension or heart disease shall be presumed to have been suffered in line of duty unless the contrary is shown by competent evidence, provided that such Police Officer shall -16- have successfully passed a physical examination upon entering into such service, including cardiogram, which examination failed to reveal any evidence of such condition; and provided further, that such presumption shall not apply to benefits payable or granted in a policy of life insurance or disability insurance. 2. Disability Benefits Off -Dutv. Every Police Officer who is a Member in the System with five (5) years or more Credited Service who shall have become totally and permanently disabled to the extent that he is unable, by reason of a medically determinable physical or mental impairment, to render useful and efficient service as a Police Officer, which disability is not directly caused by the performance of his duties as a Police Officer shall be entitled to a monthly pension determined in the same manner as for early retirement as set forth in Section 6, subsection 4B, but in any event, the minimum amount paid to the Member shall be twenty-five percent (25 of his Average Final Compensation. 3. Conditions Disaualifvine Disability Benefits. Each Police Officer who is claiming disability benefits shall establish, to the satisfaction of the Board, that such disability was !Lot occasioned primarily by: A. Excessive or habitual use of any drugs, intoxicants, or alcohol. B. Injury or disease sustained while willfully and illegally participating in fights, riots or civil insurrections. C. Injury or disease sustained while committing a crime. D. Injury or disease sustained while serving in any branch of the Armed Forces. E. Injury or disease sustained after his employment as a Police Officer with the City Okeechobee shall have terminated. F. Willful, wanton conduct or gross negligence of the Member. -17- G. Injury or disease sustained by the Police Officer while working for anyone other than the City and arising out of such employment. H. A condition pre existing the Police Officer's membership in the System. No Member shall be entitled to a disability pension, whether in line of duty or not in line of duty, because of or due to the aggravation of a specific injury, impairment or other medical condition pre existing at the time of membership in the System, provided that such pre existing condition and its relationship to a later injury, impairment or other medical condition be established by competent substantial evidence. Nothing herein shall be construed to preclude a disability pension to a Member who, after membership in the System, suffers an injury, impairment or other medical condition different from some other injury, impairment, or other medical condition existing at or prior to said membership. 4. Physical Examination Requirement. A Police Officer shall not become eligible for disability benefits until and unless he undergoes a physical examination by a qualified physician or physicians and /or surgeon or surgeons, who shall be selected by the Board for that purpose. Any Police Officer receiving disability benefits under provisions of this ordinance may be periodically re- examined by a qualified physician or physicians and /or surgeon or surgeons who shall be selected by the Board, to determine if such disability has ceased to exist. If the Board finds that the retiree is no longer permanently and totally disabled to the extent that he is unable to render useful and efficient service as a Police Officer, the Board shall recommend to the City that the retiree be returned to performance of duty as a Police Officer, and the retiree so returned shall enjoy the same rights that Member had at the time he was placed upon pension. In the event the retiree so ordered to -18- return shall refuse to comply with the order within thirty (30) days from the issuance thereof, Member shall forfeit the right to his pension. The cost of the physical examination and /or re- examination of the Police Officer claiming and /or receiving disability benefits shall be borne by the Fund. All other reasonable costs as determined by the Board incident to the physical examination, such as, but not limited to, transportation, meals and hotel accommodations, shall be borne by the Fund. If the Police Officer recovers from disability and reenters the service of the City as a Police Officer, his service shall be deemed to have been continuous, and the period for which Member received a disability retirement income shall be Credited Service for purposes of the System. If the Police Officer fails to reenter the service of the City as a Police Officer within thirty (30) days from the date the Board determines that the retiree is no longer permanently and totally disabled to the extent that he is unable to render useful and efficient service as a Police Officer, the Member's future benefits shall be determined as though he initially terminated employment on the date the Board determined that he was permanently and totally disabled to the extent that he was unable to render useful and efficient service as a Police Officer. The Board shall have the power and authority to make the final decisions regarding all disability claims. 5. Disability Payments. The monthly benefit to which a Member is entitled in the event of the Member's disability retirement shall be payable on the first day of the first month after the Board determines such entitlement. However, the monthly retirement income shall be payable as of the date the Board determined such entitlement, and any portion due for a partial month shall be paid together with the first payment. The last payment will be: -19- A. If the Police Officer recovers from the disability prior to his normal retirement date, the payment due next preceding the date of such recovery, or B. If the Police Officer dies without recovering from disability or attains his normal retirement date while still disabled, the payment due next preceding his death or the 120th monthly payment, whichever is later. 6. Workers' Comoensation. When a Member is receiving a disability pension and workers' compensation benefits pursuant to Florida Statute Chapter 440, for the same disability, and the total monthly benefits received from both exceed 100% of the Member's final monthly Salary, excluding overtime, the disability pension benefit shall be reduced so that the total monthly amount received by the Member does not exceed 100% of such Salary. SECTION 9. VESTING. If a Member terminates his employment with the Police Department, either voluntarily or by discharge, and is not eligible for any other benefits under this System, Member shall be entitled to the following: 1. If the Member has less than ten (10) years Credited Service upon termination, the Member shall be entitled to a refund of his Accumulated Contributions or Member may leave it deposited with the Fund. 2. If the Member has ten (10) or more years of Credited Service upon termination, the Member shall be entitled to a monthly retirement benefit that is the Actuarial Equivalent of the amount of such retirement income otherwise payable to him commencing at Member's otherwise normal or early retirement date, provided he does not elect to withdraw his Accumulated Contributions and provided Member survives to his normal or early retirement date. -20- Ilk w 3. Any Police Officer of the System whose position is terminated, for whatever reason, but who remains employed by the City in some other capacity, shall have all retirement benefits accrued up to the date of such termination under this System preserved, provided he does not elect to withdraw his Accumulated Contributions from this System. Such accrued retirement benefits shall be payable at his otherwise normal retirement date hereunder, or later, in accordance with the provisions of this System; provided further, however, that benefits shall not be payable under this System during any period of continued employment by the City. SECTION 10. OPTIONAL FORMS OF BENEFITS. 1. In lieu of the amount and form of retirement income payable in the event of normal or early retirement as specified herein, a Police Officer, upon written request to the Board may elect to receive a retirement income or benefit of equivalent actuarial value payable in accordance with one of the following options: A. A retirement income of a modified monthly amount, payable to the Police Officer during the lifetime of the Police Officer and following the death of the Police Officer, 100 75%, or 50 of such monthly amount payable to a joint pensioner for his lifetime. B. A retirement income of a modified monthly amount payable to the Police Officer for his lifetime only. C. If a Member retires prior to the time at which social security benefits are payable, he may elect to receive an increased retirement benefit until such time as social security benefits shall be assumed to commence and a reduced benefit thereafter in order to provide, to as great an extent as possible, a more level retirement allowance during the entire period of retirement. The amounts payable shall be as recommended by the actuaries for the System, based upon the social -21- security law in effect at the time of the Member's retirement. This option may be combined with other optional forms of benefit. 2. The Police Officer, upon electing any option of this Section, will designate the joint pensioner or Beneficiary (or Beneficiaries) to receive the benefit, if any, payable under the System in the event of Member's death, and will have the power to change such designa- tion from time to time. Such designation will name a joint pensioner or one or more primary Beneficiaries where applicable. If a Police Officer has elected an option with a joint pensioner or Beneficiary and Member's retirement income benefits have commenced, Member may thereafter change his designated joint pensioner or Beneficiary, but only if the designated Beneficiary predeceases the Member or if the designated Beneficiary and the Member were married at time of Member's retirement and are divorced subsequent thereto; provided however, in no event may a Member change his or her designated Beneficiary more than twice. 3. The consent of a Police Officer's joint pensioner or Beneficiary to any such change shall not be required. The rights of all previously- designated Beneficiaries to receive benefits under the System shall thereupon cease. 4. Upon change of a Member's Beneficiary or joint pensioner in accordance with this section, the Board shall adjust the Member's monthly benefit by application of actuarial calculations to insure that the benefit paid is the Actuarial Equivalent of the Member's then current benefit. Any such Member shall pay the actuarial recalculation expenses and shall make repayment of any overage of previously -paid pension benefits as a result of said recalculations. Each request for a change will be made in writing on a form prepared by the Board and on completion will be filed with the Board. In the event that no designated Beneficiary survives the Police Officer, such benefits as are payable in the event of the death of the Police Officer subsequent to his retirement shall be paid as provided in Section 11. -22- w 5. Retirement income payments shall be made under the option elected in accordance with the provisions of this Section and shall be subject to the following limitations: A. If a Police Officer dies prior to his normal retirement date or early retirement date, whichever first occurs, no retirement benefit will be payable under the option to any person, but the benefits, if any, will be determined under Section 7. B. If the designated Beneficiary (or Beneficiaries) or joint pensioner dies before the Police Officer's retirement under the System, the option elected will be canceled automatically and a retirement income of the normal form and amount will be payable to the Police Officer upon his retirement as if the election had not been made, unless a new election is made in accordance with the provisions of this Section or a new Beneficiary is designated by the Police Officer prior to his retirement and within ninety (90) days after the death of the Beneficiary. C. If both the retired Police Officer and the Beneficiary (or Beneficiaries) designated by Member die before the full payment has been effected under any option providing for payments for a period certain and life thereafter, made pursuant to the provisions of Subsection 1, the Board may, in its discretion, direct that the commuted value of the remaining payments be paid in a lump sum and in accordance with Section 11. D. If a Police Officer continues beyond his normal retirement date pursuant to the provisions of Section 6, Subsection 1, and dies prior to his actual retirement and while an option made pursuant to the provisions of this Section is in effect, monthly retirement income payments will be made, or a retirement benefit will be paid, under the -23- option to a Beneficiary (or Beneficiaries) designated by the Police Officer in the amount or amounts computed as if the Police Officer had retired under the option on the date on which his death occurred. 6. A Police Officer may not change his retirement option after the date of cashing or depositing his first retirement check. 7. Notwithstanding anything herein to the contrary, the Board in its discretion, may elect to make a lump sum payment to a Member or a Member's Beneficiary in the event that the total commuted value of the remaining monthly income payments to be paid do not exceed Three Thousand Five Hundred Dollars ($3,500.00). Any such payment made to any person pursuant to the power and discretion conferred upon the Board by the preceding sentence shall operate as a complete discharge of all obligations under the System with regard to such Member and shall not be subject to review by anyone, but shall be final, binding and conclusive on all persons. SECTION 11. BENEFICIARIES. 1. Each Police Officer may, on a form provided for that purpose, signed and filed with the Board, designate a Beneficiary (or Beneficiaries) to receive the benefit, if any, which may be payable in the event of his death; and each designation may be revoked by such Police Officer by signing and filing with the Board a new designation -of- Beneficiary form. 2. If a deceased Police Officer fails to name a Beneficiary in the manner prescribed in Subsection 1, or if the Beneficiary (or Beneficiaries) named by a deceased Police Officer predeceases the Police Officer, the death benefit, if any, which may be payable under the System with respect to such deceased Police Officer, shall be paid to the estate of the Police Officer. -24- SECTION 12. CLAIMS PROCEDURES 1. Claims of Affected Persons. A. The Board of Trustees shall grant an initial hearing upon receipt of a written request "Claim on matters which affect the substantial rights of any person "Claimant including Members, active or retired, Beneficiaries, or any person affected by a decision of the Board of Trustees. B. The Board shall review the Claim at an initial hearing and enter an order within sixty (60) days from the date of receipt of the Claim and, in the case of disability claims, receipt by the Board of a written medical release authorization in a form approved by the Board Attorney and a completed set of interrogatories prepared by the Board Attorney and provided to the Claimant. The Board may extend the time for entering the order at an initial hearing for an additional forty -five (45) days if it determines such time is necessary for full discovery and adequate review. The Board Attorney and the Claimant may stipulate to further extensions of time. C. It shall be the function of the Board Attorney, throughout the claims procedure, to assist the Board in the discovery and presentation of evidence in order to assure that the Board receives all relevant information prior to the Board's decision. D. The Claimant shall have the right to be represented by counsel at any or all times throughout the claims procedure. 2. Initial Hearinz. A. At the initial hearing, the only evidence to be considered by the Board shall be documentary evidence contained in the pension file, including -25- but not limited to, correspondence, medical records and reports of treating physicians and /or examining physicians and evidence received pursuant to paragraph B. B. Other than questions from the Trustees, there will be no taking of additional evidence at the initial hearing, except that the Claimant and /or his representative will be afforded fifteen (15) minutes to make a presentation, which shall be limited to comments and /or arguments as to the evidence or information already contained in the pension file, including the report of the examining physician. C. Upon completion of the review of the Claim at the initial hearing, the Board shall enter an order setting forth its fmdings and conclusions on the Claim. The written order shall be provided to the Claimant. The order shall include: (1) The specific fmdings and conclusions of the Board, including specific references to pertinent provisions of the System on which such conclusions are based; (2) A description of any additional material or information that the Board may deem necessary for the Claimant to perfect his Claim, together with the reasons why such material or informa- tion is necessary; and (3) An explanation of the right to a full hearing on the Claim and the time limit in which a full hearing must be requested in writing. D. The decision of the Board at the initial hearing shall not be final until after the time has expired to request a full hearing or, if a full hearing is requested, until the Board makes a decision at the conclusion of the full hearing. -26- 3. Full Hearinz. A. Any Claimant may request a full hearing on the issues presented to the Board at an initial hearing and upon which the Board has entered an order as provided in subsection 2.C. above. B. A full hearing must be requested by the Claimant within ninety (90) days of the receipt of the Board's order. The order will be deemed received three (3) days following the date it is mailed to Claimant at the address provided to the Board by Claimant. C. Upon receipt of the request for a full hearing and considering the amount of discovery which might be conducted, the Board shall establish a date for the full hearing and cause notice to be given to the Claimant. The full hearing shall be held within ninety (90) days from the receipt of the request from the Member. The full hearing may be postponed, if necessary and with the consent of the Claimant, to permit full discovery of the facts. D. Copies of all documents to be offered into evidence at the full hearing, including depositions, and a complete witness list with names and addresses of witnesses expected to be called, shall be furnished to the Board by the Claimant and the Board Attorney at least twenty (20) days prior to the full hearing. Documents not furnished to the Board within the prescribed time limit may be excluded from evidence at the full hearing if a reasonable explanation is not provided for the delay in providing the documents. E. A Claimant or the Board Attorney may obtain discovery by deposition and /or interrogatories prior to the full hearing. Written notice of any -27- depositions and /or interrogatories shall be given to the Board Attorney and the Claimant. F. The costs of any discovery, except discovery requested by the Board or the Board Attorney, the appearance of witnesses at the hearing, and the making of a verbatim record of the proceedings shall be the responsibility of the Claimant. G. The Claimant shall be responsible for the appearance of any witnesses at the hearing. The Board shall, however, have the power to subpoena and require the attendance of witnesses and the production of docu- ments for discovery prior to and at the proceedings provided for herein. The Claimant may request in writing the issuance of subpoenas by the Board. A reasonable fee may be charged for the issuance of any subpoenas not to exceed the fees set forth in Florida Statutes. H. Testimony at the full hearing may be submitted in the form of a deposition. Since it will give the Board more time for review and consideration, the Board prefers that testimony be submitted by deposition. Depositions timely submitted will be part of the record before the Board at the full hearing and will not be read in totality at the full hearing; provided however, that this does not preclude the Claimant or the Board Attorney from reading parts of depositions in an opening or closing statement. I. Irrelevant and unduly repetitious evidence shall be excluded. J. Any person who knowingly gives false testimony is guilty of a misde- meanor of the first degree, punishable as provided in Section 775.082 or 775.083, Florida Statutes. -28- K. The file maintained by the Board, including but not limited to various medical reports therein, is part of the record before the Board at the full hearing. L. All proceedings of the Board shall be conducted in public. M. In cases concerning an application for pension benefits, including applications for disability retirement benefits, the burden of proof, except as provided by law, shall be on the Member seeking to show entitlement to such benefits. N. In cases concerning termination of pension benefits including re- examination of Members receiving disability retirement benefits, the burden of proof shall be on the Board. 0. Except as to those records which are exempted from the provisions of Chapter 119, Florida Statutes, Florida's Public Record Law, records maintained by the Board are open for inspection and /or copying during normal business hours at a reasonable cost for the copying. P. Should a Claimant requesting an initial or full hearing decide to appeal any decision made by the Board, with respect to any matter considered at such hearing, the Claimant requesting an initial or full hearing will need a record of the proceedings and may need to assure that a verbatim record of the proceeding is made. The Claimant requesting an initial or full hearing will be responsible for obtaining a court reporter or otherwise making a record of the proceedings before the Board. Q. The decisions of the Board after the requested full hearing shall be final and binding. -29- R. Within fifteen (15) days after making a decision at the full hearing, the Board shall enter a final order setting forth its findings and conclusions and a copy of the order shall be provided to the Claimant. S. Judicial review of decisions of the Board shall be sought by the filing of a timely petition for writ of certiorari with the Clerk of the Circuit Court, in the appropriate county. 4. Conduct of the Full Hearing. A. The Chairman shall preside over the hearing and shall rule on all evidentiary, procedural, and other legal questions that arise during the hearing. The Chairman's rulings shall stand unless overruled by all other Trustees present. The Chairman shall open the full hearing by explaining the procedures to be followed. B. The Claimant shall have the right to be represented by counsel or be self represented. The Board Attorney shall advise the Board. C. The Claimant shall be allowed to make an opening statement not to exceed ten (10) minutes. D. Testimony of witnesses shall be under oath or affirmation. Depositions or affidavits shall be admissible if agreed upon by the Claimant and the Board or the Board Attorney. E. The Chairman, any Trustee, the Board Attorney, the Claimant or the Claimant's counsel, upon recognition by the Chairman, may direct questions to any witness during the proceedings. F. Either the Claimant or the Board Attorney shall have the right to present evidence relevant to the issues, to cross examine witnesses, to impeach witnesses and to respond to the evidence presented. -30- G. The Claimant shall be permitted a closing argument not to exceed fifteen (15) minutes. H. The Board shall deliberate and make a decision following closing argument and thereafter enter an order as provided herein. 5. Disability Claims Additional Procedures A. All applications for disability pensions shall be in writing. Forms for such applications may be provided by the Board. B. Upon receipt of the application for disability, the Board Attorney will provide the Claimant with a set of interrogatories or questions to be answered under oath and a medical release authorization. Both documents will be completed by the Claimant and returned to the Board Attorney. C. Upon receipt of the properly completed interrogatories and medical release authorization, the Board Attorney will request medical records from all relevant treating physicians; personnel records from the employer, copies of relevant workman's compensation records, and copies of other records deemed to be relevant to the Claim. The Board shall pay from the Fund the cost of any medical examinations required by the Board and for copies of medical records. D. The Board Attorney will, if authorized by the Board, upon receipt of the medical records from the treating physicians, schedule an indepen- dent medical examination (IME) with an appropriate independent examining physician who will be asked to render an opinion about Claimant's physical condition as it relates to the claimed disability. E. Upon receipt of the IME from the examining physician, the Board Attorney will provide all records of treating physicians, relevant -31- workman's compensation claims records, the independent medical evaluation, and all other relevant documents to the Board for inclusion in the pension file and the Board shall then schedule the initial hearing. SECTION 13. REPORTS TO DEPARTMENT OF INSURANCE. Each year and no later than March 15th, the Chairman of the Board shall file a report with the Department of Insurance containing the following: 1. Whether in fact the Municipality is in compliance with the provisions of Chapter 185, Florida Statutes. 2. A certified statement of accounting for the most recent fiscal year of the Municipality (or an independent audit by a certified public accountant if required by the Department of Insurance) showing a detailed listing of assets and methods used to value them and a statement of all income and disbursements during the year. Such income and disbursements shall be reconciled with the assets at the beginning and end of the year. 3. A statistical exhibit showing the number of Police Officers on the force of the Municipality, the number included in the System, the number of Police Officers ineligible, classified according to the reasons for their being ineligible, and the number of disabled and retired Police Officers and their Beneficiaries receiving pension payments and the amounts of annual retirement income or pension payments being received by them. 4. A statement of the amount the Municipality has contributed to the Fund for the preceding plan year, and the amount the Municipality will contribute to the Fund for the current plan year. 5. If any benefits are insured with a commercial insurance company, the report shall include a statement of the relationship of the insured benefits to the benefits provided by this ordinance. This report shall also contain information about the insurer, basis of premium rates, mortality table, interest rates and method used in valuating retirement bene- fits. -32- 6. The actuarial valuation of the System as provided for in Section 3. Such valuation shall be prepared by an enrolled actuary who is enrolled under Subtitle C of Title 3 of the Employee Retirement Income Security Act of 1974 and who is a member of the Society of Actuaries or the American Academy of Actuaries. SECTION 14. ROSTER OF RETIREES. The Secretary of the Board shall keep a record of all persons enjoying a pension under the provisions of this ordinance in which it shall be noted the time when the pension is allowed and when the same shall cease to be paid. Additionally, the Secretary shall keep a record of all Police Officers employed by the Municipality in such a manner as to show the name, address, date of employment and date such employment is terminated. SECTION 15. BOARD ATTORNEY AND PROFESSIONALS. The Board may employ independent legal counsel at the System's expense for the purposes contained herein, together with such other professional, technical, or other advisors as the Board deems necessary. SECTION 16. MAXIMUM PENSION. 1. Basic Limitation. Subject to the adjustments hereinafter set forth, the maximum amount of annual retirement income payable with respect to a Member under this System shall not exceed the lesser of: A. $90,000, or B. 100% of the Member's average aggregate compensation for the three (3) consecutive calendar years during which the Police Officer was an active Member and had his highest aggregate compensation. "Compen- sation" shall mean the Police Officer's total annual remuneration paid or accrued for personal services rendered to the City during the plan year as reported on the Police Officer's W -2. -33- For purposes of applying the above limitation, benefits payable in any form other than a straight life annuity with no ancillary benefits shall be adjusted, as provided by Treasury Regulations, so that such benefits are the Actuarial Equivalent of a straight life annuity. For purposes of this Section, the following benefits shall not be taken into account: (1) Any ancillary benefit which is not directly related to retirement income benefits; (2) Any other benefit not required under §415(b)(2) of the Internal Revenue Code and Regulations thereunder to be taken into account for purposes of the limitation of §415(b)(1) of the Internal Revenue Code. 2. Participation in Other Defined Benefit Plans. The limitation of this Section with respect to any Member who at any time has been a member in any other defined benefit plan (as defined in §414(j) of the Internal Revenue Code) maintained by the City shall apply as if the total benefits payable under all defined benefit plans in which the Member has been a member were payable from one plan. 3. Adiustments in Limitations. In the event the Member's retirement benefits become payable before age 62, the $90,000 limitation prescribed by this Section shall be reduced in accordance with Regula- tions issued by the Secretary of the Treasury pursuant to the provisions of §415(b) of the Internal Revenue Code, but not less than $75,000. In the event the Member's retirement benefit becomes payable before age fifty five (55), the $75,000 limitation shall be reduced from age fifty-five (55) in accordance with Regulations issued by the Secretary of the Treasury pursuant to the provisions of §415(b) of the Internal Revenue Code. A Member with at least fifteen (15) years of Credited Service may not have the benefit reduced below $50,000.00. -34- If the Member's retirement benefit becomes payable after age sixty-five (65), for purposes of determining whether this benefit meets the limitation set forth in Subsection 1 herein, such benefit shall be adjusted so that it is actuarially equivalent to the benefit beginning at age 65. This adjustment shall be made using an assumed interest rate of five percent (5 and shall be made in accordance with regulations promulgated by the Secretary of the Treasury or his delegate. 4. Less than Ten Years of Service. The maximum retirement benefits payable under this Section to any Member who has completed less than ten (10) years of Credited Service with the City shall be the amount determined under Subsection 1 of this Section multiplied by a fraction, the numerator of which is the number of the Member's years of Credited Service and the denominator of which is ten (10). 5. $10.000 Limit. Notwithstanding the foregoing, the retirement benefit payable with respect to a Member shall be deemed not to exceed the limitations set forth in this Section if the benefits payable, with respect to such Member under this System and under all other qualified defined benefit pension plans to which the City contributes, do not exceed $10,000 for the applicable plan year and for any prior plan year and the City has not at any time maintained a qualified defined contribution plan in which the Member participated. 6. Member in Defined Contribution Plan. In any case where a Member under this System is also a member in a "Defined Contribution Plan" as defined in §414(i) of the Internal Revenue Code, maintained by the City, the sum of the "Defined Benefit Plan Fraction" and the "Defined Contribution Plan Fraction" (both as defined in §415(e) of the Internal Revenue Code) shall not, subject to the restrictions and exceptions contained in §2004 of the Act, exceed 1.0. -35- 7. Reduction of benefits. Reduction of benefits and /or contributions to all plans, where required, shall be accomplished by first reducing the Member's benefit under any defined benefit plans in which Member participated, such reduction to be made first with respect to the plan in which Member most recently accrued benefits and thereafter in such priority as shall be determined by the Board and the plan administrator of such other plans, and next, by reducing or allo- cating excess forfeitures for defined contribution plans in which the Member participated, such reduction to be made first with respect to the plan in which Member most recently accrued benefits and thereafter in such priority as shall be established by the Board and the plan administrator for such other plans provided, however, that necessary reductions may be made in a different manner and priority pursuant to the agreement of the Board and the plan administrator of all other plans covering such Member. 8. Cost -of- Living Adiustments. The limitations as stated in Subsections 1, 2, 3, and 6 herein shall be adjusted to the time payment of a benefit begins in accordance with any cost -of -living adjustments prescribed by the Secretary of the Treasury pursuant to §415(d) of the Internal Revenue Code. 9. Additional Limitation on Pension Benefits. Notwithstanding anything herein to the contrary: A. The normal retirement benefit or pension payable to a retiree who becomes a Member of the System and who has not previously participated in such System, on or after January 1, 1980, shall not exceed 100 percent of his Average Final Compensation. However, nothing contained in this Section shall apply to supplemental retirement benefits or to pension increases attributable to cost -of -living increases or adjustments. -36- w B. No Member of the System who is not now a Member of such System shall be allowed to receive a retirement benefit or pension which is in part or in whole based upon any service with respect to which the Member is already receiving, or will receive in the future, a retirement benefit or pension from another System or plan. This restriction does not apply to social security benefits or federal benefits under Chapter 67, Title 10, U.S. Code. SECTION 17. COMMENCEMENT OF BENEFITS. 1. Unless the Member otherwise elects, with such election being in writing and delivered to the Board and specifying the form of retirement income and date on which the retirement income is to commence, the payment benefits under the System to the Member shall commence not later than the 60th day after the close of the plan year in which the latest of the following events occur: A. The attainment by the Member of age 65; B. The 10th anniversary of the date on which the Member commenced participation in the System; or C. The termination of the Member's service with the City. 2. If the payment of a Member's retirement income cannot begin on the date required under Subsection 1 of this Section because the Board either cannot ascertain the amount of the Member's retirement income or cannot locate the Member after making reasonable efforts to do so, the payment of the Member's benefit shall begin not later than sixty (60) days after the date on which the amount can be ascertained or the Member is located, whichever is applicable. Any such payment shall be made retroactive to a date which is not earlier than the date on which the payment of the Member's benefit was scheduled to begin but which is not later than the date specified under Subsection 1 of this Section. -37- SECTION 18. DISTRIBUTION OF BENEFITS. Notwithstanding any other provision of this System to the contrary, a form of retirement income payable from this System after the Effective Date of this ordinance, shall satisfy the following conditions: 1. If the retirement income is payable before the Member's death, A. It shall either be distributed or commence to the Member not later than April 1 of the calendar year following the later of the calendar year in which the Member attains age 70 -1/2, or the calendar year in which Member retires, B. The distribution shall commence not later than the calendar year defined above; and a), shall be paid over the life of the Member or over the lifetimes of the Member and Spouse, issue or dependent, or b), shall be paid over the period extending not beyond the life expect- ancy of the Member and Spouse, issue or dependent. Where a form of retirement income payment has commenced in accordance with the preceding paragraphs and the Member dies before his entire interest in the System has been distributed, the remaining portion of such interest in the System shall be distributed no less rapidly than under the form of distribution in effect at the time of the Member's death. 2. If the Member's death occurs before the distribution of his interest in the System has commenced, Member's entire interest in the System shall be distributed within five (5) years of Member's death, unless it is to be distributed in accordance with the following rules: A. The Member's remaining interest in the System is payable to his Spouse, issue or dependent; -38- B. The remaining interest is to be distributed over the life of the Spouse, issue or dependent or over a period not extending beyond the life expectancy of the Spouse, issue or dependent; and C. Such distribution begins within one year of the Member's death unless the Member's Spouse, issue or dependent shall receive the remaining interest in which case the distribution need not begin before the date on which the Member would have attained age 70 -1/2 and if the Spouse, issue or dependent dies before the distribution to the Spouse, issue or dependent begins, this Section shall be applied as if the Spouse, issue or dependent were the Member. SECTION 19. MISCELLANEOUS PROVISIONS 1. Interest of Members in System. At no time prior to the satisfaction of all liabilities under the System with respect to Members and their Spouses or Beneficiaries, shall any part of the corpus or income of the Fund be used for or diverted to any purpose other than for their exclusive benefit. 2. Liauidation of Fund Assets. A. In the event that contributions of the City are permanently discontinued or in the event that it becomes necessary for the City to discontinue the System, the Board shall determine a proposed date of termination and liquidate the Fund, in accordance with the applicable requirements of the Act governing termination. The rights of affected Members, joint annuitants, Beneficiaries and surviving Spouses to benefits accrued to the date of any such termination or discontinuance to the extent then funded shall become fully vested and nonforfeitable and upon occurrence of such event, the City's aliquot share of the assets then -39- remaining in the Fund shall be allocated among the Members and their Beneficiaries and administered and distributed at such time or times as is determined by the Board. B. Any reserves which shall be released as a result of the application of the provisions of Section 20, Subsection 3E, shall be added to the portion of the Fund which is distributed as provided above to Members whose benefits are not restricted, provided that in the event that all of the benefits accrued to such Members are fully provided for, such released reserves (or any remaining portion thereof) shall be allocated to provide to the extent possible up to one hundred percent (100 of the benefits otherwise cancelled pursuant to Section 20, Subsection 3E, allocating such remaining funds in proportion to the value of the benefits so cancelled. C. The Board may in its discretion give effect to the provisions of the foregoing paragraphs A and B by the purchase of annuities, by continu- ing the Fund in existence and making provisions thereunder for pension benefits, or by immediate distribution from the Fund. If the assets of the Fund applicable to any asset distribution priority category are insufficient to provide full benefits for all persons in such group, the benefits otherwise payable to such persons shall be reduced proportionately except as may otherwise be specified by regulations. If there is any balance remaining in the Fund after all obligations to Members, joint annuitants, Beneficiaries and surviving Spouses are met, such balance will revert to the City. The actuary shall calculate the allocation of the assets of the Fund in accordance with the asset distribution priority category, and certify his calculations to the Board. -40- Aft w No liquidation of assets and payment of benefits (or provision there- fore) shall actually be made by the Board until after it is advised by the City in writing that applicable requirements, if any, of the Act gover- ning termination of "Police Officer Pension Benefit Plans" have been, or are being, complied with or that appropriate authorizations, waivers, exceptions or variances have been, or are being, obtained. 3. No amendment or ordinance shall be adopted by the City Council of the City of Okeechobee which shall have the effect of reducing the then vested accrued benefits of Members or a Member's Beneficiaries. SECTION 20. REPEAL OR TERMINATION OF SYSTEM. 1. This ordinance establishing the System and Fund, and subsequent ordinances pertaining to said System and Fund, may be modified, terminated, or amended, in whole or in part; provided that if this or any subsequent ordinance shall be amended or repealed in its application to any person benefiting hereunder, the amount of benefits which at the time of any such alteration, amendment, or repeal shall have accrued to the Member or Beneficiary shall not be affected thereby, except to the extent that the assets of the Fund may be deter- mined to be inadequate. 2. If this ordinance shall be repealed, or if contributions to the System are discontinued, the Board shall continue to administer the System in accordance with the provisions of this ordinance, for the sole benefit of the then Members, any Beneficiaries then receiving retirement allowances, and any future persons entitled to receive benefits under one of the options provided for in this ordinance who are designated by any of said Members. In the event of repeal, or if contributions to the System are discontinued, there shall be full vesting (100%) of benefits accrued to date of repeal and the assets of the System shall be allocated in an equitable manner to provide benefits on a proportionate basis to the persons so entitled in accordance with the provisions thereof. -41- 3. The following shall be the order of priority for purposes of allocating the assets of the System as of the date of repeal of this ordinance, or if contributions to the System are discontinued with the date of such discontinuation being determined by the Board. A. Apportionment shall first be made in respect of each retired Police Officer receiving a retirement or disability benefit hereunder on such date, each person receiving a benefit on such date on account of a retired or disabled (but since deceased) Police Officer, and each Police Officer who has, by such date, become eligible for normal retirement but has not yet retired, an amount which is the Actuarial Equivalent of such benefit, based upon the actuarial assumptions in use for purposes of the most recent actuarial valuation, provided that, if such asset value be less than the aggregate of such amounts, such amounts shall be proportionately reduced so that the aggregate of such reduced amounts will be equal to such asset value. B. If there be any asset value remaining after the apportionment under paragraph A, apportionment shall next be made in respect of each Police Officer in the service of the City on such date who has completed at least ten (10) years of Credited Service and who is not entitled to an apportionment under paragraph A, in the amount required to provide the Actuarial Equivalent, as described in A above, of the accrued normal retirement benefit, based on the Credited Service and average monthly earnings as of such date, and each vested former Member then entitled to a deferred benefit who has not, by such date, begun receiving benefit payments, in the amount required to provide said Actuarial Equivalent of the accrued normal retirement benefit, provided that, if such remaining asset value be less than the aggregate -42- w of the amounts apportioned hereunder, such latter amounts shall be proportionately reduced so that the aggregate of such reduced amounts will be equal to such remaining asset value. C. If there be any asset value after the apportionments under paragraphs A and B, apportionment shall be made in respect of each Police Officer in the service of the City on such date who is not entitled to an apportionment under paragraphs A and B in the amount equal to Member's Accumulated Contributions, provided that, if such remaining asset value be less than the aggregate of the amounts apportioned here- under such latter amount shall be proportionately reduced so that the aggregate of such reduced amounts will be equal to such remaining asset value. D. If there be any asset value remaining after the apportionments under paragraphs A, B, and C, apportionment shall lastly be made in respect of each Police Officer included in paragraph C above to the extent of the Actuarial Equivalent, as described in paragraph A above, of the accrued normal retirement benefit, less the amount apportioned in para- graph C, based on the Credited Service and average monthly earnings as of such date, provided that, if such remaining asset value be less than the aggregate of the amounts apportioned hereunder, such amounts shall be reduced so that the aggregate of such reduced amounts will be equal to such retraining asset value. E. In the event that there be asset value remaining after the full apportionment specified in paragraphs A, B, C, and D, such excess shall be returned to the City, less return of the State's contributions to the State, provided that, if the excess is less than the total contributions -43- made by the City and the State to the date of termination such excess shall be divided proportionately to the total contributions made by the City and the State. The allocation of the Fund provided for in this Subsection may, as decided by the Board, be carried out through the purchase of insurance company contracts to provide the benefits determined in accordance with this Subsection. The Fund may be distributed in one sum to the persons entitled to said benefits or the distribution may be carried out in such other equitable manner as the Board may direct. The Fund may be continued in existence for purposes of subsequent distributions. If, at any time during the first ten (10) years after the effective date of the ordinance originally establishing this System, the System shall be terminated or the full current costs of the System shall not have been met, anything in the System to the contrary notwithstanding, City contributions which may be used for the benefit of any one of the twenty-five (25) highest paid Police Officers on the effective date, whose anticipated annual retirement allowance provided by the City's contributions at Member's normal retirement date would exceed $1,500, shall not exceed the greater of either a) $20,000, or b), an amount computed by multiplying the smaller of $10,000 or twenty percent (20 of such Police Officer's average annual earnings during his last five (5) years of service by the number of years of service since the effective date. In the event that it shall hereafter be determined by statute, court decision, ruling by the Commissioner of Internal Revenue, or otherwise, that the provisions of this paragraph are not then necessary to qualify the System under the Internal Revenue Code, this paragraph shall be ineffective without the necessity of further amendment of this ordinance. 4. After all the vested and accrued benefits provided hereunder have been paid and after all other liabilities have been satisfied, then and only then shall any remaining funds revert to the general fund of the City. -44- SECTION 21. EXEMPTION FROM EXECUTION. NON ASSIGNABILITY. Except as otherwise provided by law, the pensions, annuities, or any other benefits accrued or accruing to any person under the provisions of this ordinance and the Accumulated Contributions and the cash securities in the Fund created under this ordinance are hereby exempted from any state, county or municipal tax and shall not be subject to execution, attachment, garnishment or any legal process whatsoever and shall be unassignable. SECTION 22. PENSION VALIDITY. The Board shall have the power to examine into the facts upon which any pension shall heretofore have been granted under any prior or existing law, or shall hereafter be granted or obtained erroneously, fraudulently or illegally for any reason. Said Board is empowered to purge the pension rolls of any person heretofore granted a pension under prior or existing law or heretofore granted under this ordinance if the same is found to be erroneous, fraudulent or illegal for any reason; and to reclassify any person who has heretofore under any prior or existing law been or who shall hereafter under this ordinance be erroneously, improperly or illegally classified. SECTION 23. FORFEITURE OF PENSION. 1. Any Police Officer who is convicted of the following offenses committed prior to retirement, or whose employment is terminated by reason of his admitted commission, aid or abetment of the following specified offenses, shall forfeit all rights and benefits under this System, except for the return of his Accumulated Contributions as of the date of termination. Specified offenses are as follows: A. The committing, aiding or abetting of an embezzlement of public funds; B. The committing, aiding or abetting of any theft by a public officer or employee from employer; -45- C. Bribery in connection with the employment of a public officer or employee; D. Any felony specified in Chapter 838, Florida Statutes. E. The committing of an impeachable offense. F. The committing of any felony by a public officer or employee who willfully and with intent to defraud the public or the public agency, for which he acts or in which he is employed, of the right to receive the faithful performance of his duty as a public officer or employee, realizes or obtains or attempts to obtain a profit, gain, or advantage for himself or for some other person through the use or attempted use of the power, rights, privileges, duties or position of his public office or employment position. 2. Conviction shall be defined as an adjudication of guilt by a court of competent jurisdiction; a plea of guilty or a nolo contendere; a jury verdict of guilty when adjudication of guilt is withheld and the accused is placed on probation; or a conviction by the Senate of an impeachable offense. 3. Court shall be defined as any state or federal court of competent jurisdiction which is exercising its jurisdiction to consider a proceeding involving the alleged commission of a specified offense. Prior to forfeiture, the Board shall hold a hearing on which notice shall be given to the Member whose benefits are being considered for forfeiture. Said Member shall be afforded the right to have an attorney present. No formal rules of evidence shall apply, but the Member shall be afforded a full opportunity to present his case against forfeiture. 4. Any Member who has received benefits from the System in excess of his Accumulated Contributions after Member's rights were forfeited shall be required to pay back to the Fund the amount of the benefits received in excess of his Accumulated Contributions. The Board may implement all legal action necessary to recover such funds. -46- SECTION 24. INDEMNIFICATION 1. To the extent not covered by insurance contracts in force from time to time, the City shall indemnify and hold harmless members of the Board from all personal liability for damages and costs, including court costs and attorneys' fees, arising out of claims, suits, litigation, or threat of same, herein referred to as "claims against these individuals because of acts or circumstances connected with or arising out of their official duty as members of the Board. The City reserves the right, in its sole discretion, to settle or not settle the claim at any time, and to appeal or to not appeal from any adverse judgment or ruling, and in either event will indemnify and hold harmless any members of the Board from the judgment, execution, or levy thereon. 2. This Section shall not be construed so as to relieve any insurance company or other entity liable to defend the claim or liable for payment of the judgment or claim, from any liability, nor does this Section waive any provision of law affording the City immunity from any suit in whole or part, or waive any other substantive or procedural rights the City may have. 3. This Section shall not apply nor shall the City be responsible in any manner to defend or pay for claims arising out of acts or omissions of members of the Board which constitute felonies or gross malfeasance or gross misfeasance in office. SECTION 25. TRANSFERS WITHIN THE CITY. If a member of any of the City's three retirement systems transfers to either of the other two systems, he must choose one of the following procedures with regard to Credited Service accrued to date of transfer. 1. The Member may take a refund of his Accumulated Contributions, in which event no pension benefit shall be payable based on Credited Service attributable to the period covered. -47- 2. The member may leave his Accumulated Contributions in the fund, in which event his Credited Service with both systems shall be combined for purposes of determining eligibility for benefits and for vesting. When the member is eligible to receive a benefit, he shall receive benefits from both systems, which shall consist of accrued benefits under each system based on the provisions of the respective system and the earnings and Credited Service under that system. SECTION 26. MILITARY SERVICE PRIOR TO EMPLOYMENT. The years or fractional parts of years that a Police Officer serves or has served on active duty in the active military service of the Armed Forces of the United States or the United States Merchant Marine, voluntarily or involuntarily, honorably or under honorable conditions, prior to first and initial employment with the City Police Department shall be added to his years of Credited Service provided that: 1. The Police Officer contributes to the Fund the sum that he would have contributed had he been a member of the System for the years or fractional parts of years for which he is requesting credit plus amounts actuarially determined such that the crediting of service does not result in any cost to the Fund plus payment of costs for all professional services rendered to the Board in connection with the purchase of years of Credited Service. 2. The request shall be made only once and made by the Police Officer on or before twelve (12) months from the Effective Date of this ordinance or six (6) months from the date of his employment with the City Police Department, whichever is later. 3. Payment by the Police Officer of the required amount shall be made within six (6) months of his request for credit and shall be made in one lump sum payment upon receipt of which Credited Service shall be given. 4. The maximum credit under this Section shall be four (4) years. 5. Credited Service purchased pursuant to this section shall not count toward vesting. -48- SECTION 27. DIRECT TRANSFERS OF ELIGIBLE ROLLOVER DISTRIBUTIONS. 1. General. This Section applies to distributions made on or after January 1, 1993. Notwithstanding any provision of the plan to the contrary that would otherwise limit a distributee's election under this Section, a distributee may elect, at the time and in the manner prescribed by the Board, to have any portion of an eligible rollover distribution paid directly to an eligible retirement plan specified by the distributee in a direct rollover. 2. Definitions. 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 401(a)(9) of the Code; and the portion of any distribution that is not includible in gross income. B. Eligible Retirement Plan: An eligible retirement plan is an individual retirement account described in section 408(a) of the Code, an individual retirement annuity described in section 408(b) of the Code, an annuity plan described in section 403(a) of the Code, or a qualified trust described in section 401(a) of the Code, that accepts the distributee's eligible rollover distribution. However, in the case of an eligible rollover distribution to the surviving Spouse, an eligible -49- retirement plan is an individual retirement account or individual retirement annuity. Ili C. Distributee: A distributee includes an employee or former employee. In addition, the employee's or former employee's surviving Spouse is a distributee with regard to the interest of the Spouse. D. Direct Rollover: A direct rollover is a payment by the plan to the eligible retirement plan specified by the distributee. oNZn- 93p.wd -50-