1132 Amends City/OUA Pension PlanORDINANCE NO. -1-132
AN ORDINANCE OF THE CITY OF OKEECHOBEE
AMENDING THE CITY OF OKEECHOBEE AND
OKEECHOBEE UTILITY AUTHORITY EMPLOYEES'
RETIREMENT SYSTEM, ADOPTED PURSUANT TO
ORDINANCE NO. 1053, AS SUBSEQUENTLY AMENDED;
AMENDING SECTION 1, DEFINITIONS; AMENDING
SECTION 2, MEMBERSHIP; AMENDING SECTION 6,
BENEFIT AMOUNTS AND ELIGIBILITY; AMENDING
SECTION 8, DISABILITY; AMENDING SECTION 10,
OPTIONAL FORMS OF BENEFITS; AMENDING SECTION
14, MAXIMUM PENSION; AMENDING SECTION 15,
MINIMUM DISTRIBUTION OF BENEFITS; AMENDING
SECTION 25, REEMPLOYMENT AFTER RETIREMENT;
AMENDING SECTION 27, PRIOR GOVERNMENT SERVICE;
AMENDING SECTION 28, DEFERRED RETIREMENT
OPTION PLAN; PROVIDING FOR CODIFICATION; PROVID-
ING FOR SEVERABILITY OF PROVISIONS; REPEALING
ALL ORDINANCES IN CONFLICT HEREWITH AND
PROVIDING AN EFFECTIVE DATE.
WHEREAS, the City of Okeechobee and the Okeechobee Utility Authority
employees are presently provided pension and certain other benefits under Ordinances
of the City of Okeechobee; and
WHEREAS, it becomes necessary from time to time to amend said ordinances in
order to clarify or restate certain provisions of the ordinance, or to enact amendments to
comply with revised Federal regulations;
NOW THEREFORE, be it ordained before the City Council of the City of
Okeechobee, Florida; presented at a duly advertised public meeting; and passed by
majority vote of the City Council; and properly executed by the Mayor or designee, as Chief
Presiding Officer for the City:
SECTION 1: That the City of Okeechobee and Okeechobee Utility Authority
Employees' Retirement System, adopted pursuant to Ordinance No. 1053, as
subsequently amended, is hereby further amended by amending Section 1, Definitions, to
amend the definitions of "Actuarial Equivalent ", "Credited Service ", and "Spouse ", to read
as follows:
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
seven percent (7.0 %) interest and the RP -2000 Combined Healthy
Participant Mortality Table, projected to 2015 using projection scale AA, using a blend of
50% male mortality rates and 50% female mortality rates, set back five (5) years for
disabled lives. This definition may only be amended by the City pursuant to the
recommendation of the Board using assumptions adopted by the Board with the advice of
the plan's actuary, such that actuarial assumptions are not subject to City discretion.
Credited Service means the total number of years and fractional parts of years of
service as a General Employee with member contributions when required, omitting
intervening years or fractional parts of years when such Member was not employed by the
City as a General Employee. A Member may voluntarily leave his Accumulated Contribu-
tions in the Fund for a period of five (5) years after leaving the employ of the City pending
the possibility of being reemployed as a General Employee, without losing credit for the
time that he was a Member of the System. If a non - vested Member leaves the employ of
the City and is not reemployed within five (5) years, his Accumulated Contributions, if one -
thousand dollars ($1,000.00) or less, will be returned. If a Member who is not vested is not
reemployed within five (5) years, his Accumulated Contributions, if more than one -
thousand dollars ($1,000.00), will be returned only upon the written request of the Member
and upon completion of a written election to receive a cash lump sum or to rollover the
lump sum amount on forms designated by the Board. If a vested Member leaves the
employ of the City, his Accumulated Contributions will be returned upon his written request.
Upon return of his Accumulated Contributions, all of his rights and benefits under the
System are forfeited and terminated.
1
The years or fractional parts of a year that a Member performs "Qualified Military
Service" consisting of voluntary or involuntary "service in the uniformed services" as
defined in the Uniformed Services Employment and Reemployment Rights Act (USERRA)
(P.L.103 -353), after separation from employment as a General Employee with the City to
perform training or service, shall be added to his years of Credited Service for all purposes,
including vesting, provided that:
A. The Member is entitled to reemployment under the provisions of
USERRA.
B. The Member returns to his employment as a General Employee within
one (1) year from the earlier of the date of his military discharge or his
release from service, unless otherwise required by USERRA.
C. The Member deposits into the Fund the same sum that the Member
would have contributed if he had remained a General Employee
during his absence. The maximum credit for military service pursuant
to this subsection shall be five (5) years. The Member must deposit
all missed contributions within a period equal to three (3) times the
period of military service, but not more than five (5) years following
reemployment or he will forfeit the right to receive Credited Service for
his military service pursuant to this Section.
D. This Section is intended to satisfy the minimum requirements of
USERRA. To the extent that this Section does not meet the minimum
standards of USERRA, as it may be amended from time to time, the
minimum standards shall apply.
In the event a Member dies on or after January 1, 2007, while performing USERRA
Qualified Military Service, the beneficiaries of the Member are entitled to any benefits
(other than benefit accruals relating to the period of qualified military service) as if the
Member had resumed employment and then died while employed.
Beginning January 1, 2009, to the extent required by Section 414(u)(12) of the
Code, an individual receiving differential wage payments (as defined under Section
3401(h)(2) of the Code) from an employer shall be treated as employed by that employer,
and the differential wage payment shall be treated as compensation for purposes of
applying the limits on annual additions under Section 415(c) of the Code. This provision
shall be applied to all similarly situated individuals in a reasonably equivalent manner.
Leave conversions of unused accrued paid time off shall not be permitted to be
applied toward the accrual of Credited Service either during each Plan Year of a Member's
employment with the City or in the Plan Year in which the Member terminates employment.
Spouse means the : • . • - . - :: - :: • : Member's or
Retiree's spouse under applicable law at the time benefits become payable.
SECTION 2: That the City of Okeechobee and Okeechobee Utility Authority
Employees' Retirement System, adopted pursuant to Ordinance No. 1053, as
subsequently amended, is hereby further amended by amending Section 2, Membership,
subsections 1.B. and 1.C., to read as follows:
1. B. Notwithstanding the previous paragraph, a new employee who is
hired as the City Administrator or Administrative Assistant and a new
employee who is hired as the Executive Director of the Okeechobee
Utility Authority may, in the event he has elected to participate in
another pension program, - - - - - • .: :: 7 - • upon his
employment as City Administrator or Administrative Assistant or
Executive Director, notify the Board and the City of Okeechobee (with
respect to the City Administrator or Administrative Assistant) or the
Okeechobee Utility Authority (with respect to the Executive Director),
in writing, of his election to not be a Member of the System. In the
event of any such election, he shall be barred from future
membership in the System. Contributions, if any, to the plan in
2
accordance with Section 5., shall not be required, he shall not be
eligible to be elected as a Member Trustee on the Board or vote for
a Member Trustee, and he shall not be eligible for any other benefits
from the plan.
C. Notwithstanding any provision herein to the contrary, any future new
elected official, who is not already a Member of the System may,
upon taking office, elect to discontinue notify
the Board and the City of Okeechobee, in writing, of his election to not
be a membership Member of the System
In the event of such election, the elected
official shall be barred from future membership in the system.
Contributions, if any, to the plan in accordance with Section 5., shall
not be required, he shall not be eligible to be elected as a Member
Trustee on the Board or vote for a Member Trustee, and he shall not
be eligible for any other benefits from the plan.
SECTION 3: That the City of Okeechobee and Okeechobee Utility Authority
Employees' Retirement System, adopted pursuant to Ordinance No. 1053, as
subsequently amended, is hereby further amended by amending Section 6, Benefit
Amounts and Eligibility, subsection 1., Normal Retirement Date, to read as follows:
1 Normal Retirement Age and Date.
date- A Member's normal retirement age is the earlier of the attainment of age sixty -five
(65) and the completion of five (5) years of Credited Service or upon the completion of
thirty (30) years of Credited Service, regardless of age. Each Member shall become one
hundred percent (100 %) vested in his accrued benefit at normal retirement age. A
Member's normal retirement date shall be the first day of the month coincident with or next
following the date the Member retires from the City after attaining normal retirement age.
SECTION 4: That the City of Okeechobee and Okeechobee Utility Authority
Employees' Retirement System, adopted pursuant to Ordinance No. 1053, as
subsequently amended, is hereby further amended by amending Section 8, Disability,
subsection 1., Disability Benefits, to read as follows:
1. Disability Benefits.
Any Member who shall become totally and permanently disabled to the extent
that he is unable, by reason of a medically determinable physical or mental impairment,
to perform the duties that the General Employee was assigned at the time of the
impairment and is unable to perform the duties of another General Employee position
which the City of Okeechobee or the Okeechobee Utility Authority makes available to him
in a similar job classification and rank at no reduction in Salary for which the General
Employee is qualified by reason of training, education, or experience, whether or not such
disability was directly caused by the performance of his duty as a General Employee. Upon
establishing the same to the satisfaction of the Board, the General Employee shall be
entitled to a monthly pension determined in the same manner as for Early Retirement set
forth in Section 6, subsection 4.B, if the benefit begins at or after age fifty -five (55), and if
the benefit begins priorto age fifty -five (55), the benefit shall be actuarially reduced for the
period priorto age fifty -five (55). Terminated persons, either vested or non - vested, are not
eligible for disability benefits,
Notwithstanding the
previous sentence, if a Member is terminated by the City for medical reasons, the
terminated person may apply for a disability benefit if the application is filed with the Board
within thirty (30) days from the date of termination. If a timely application is received, it
shall be processed and the terminated person shall be eligible to receive a disability benefit
if the Board otherwise determines that he is totally and permanently disabled as provided
for above.
3
SECTION 5: That the City of Okeechobee and Okeechobee Utility Authority
Employees' Retirement System, adopted pursuant to Ordinance No. 1053, as
subsequently amended, is hereby further amended by amending Section 10, Optional
Forms of Benefits, subsections 1.D., and 2., to read as follows:
1. D. For any Member who does not participate in the DROP pursuant to
Section 28, a lump sum payment payable to the Retiree equal to
twenty percent (20 %) of the present total actuarial equivalent value of
the Retiree's accrued benefit at the date of retirement with the
remaining eighty percent (80 %) payable to the Retiree in a form
selected by the Retiree and provided for in Ai er B. or C above or in
the normal form (10 year certain and life). A Retiree who is a
participant in the Deferred Retirement Option Plan shall not be eligible
to select this partial lump sum option.
2. The Member, upon electing any option of this Section, will designate the joint
pensioner (subsection 1.,A. above) 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 designation from time to time. Such designation will name a joint
pensioner or one or more primary Beneficiaries where applicable. If a Member has elected
an option with a joint pensioner or Beneficiary and Member's retirement income benefits
have commenced, Member may thereafter change his designated Beneficiary at any time,
but may change his joint pensioner only if the designated joint pensioner and the Member
were married at the time of Member's Retirement and are divorced subsequent thereto and
the joint pensioner is alive at the time of the change. In the absence of proof of good
health of the joint pensioner being replaced, the actuary will assume that the joint
pensioner has deceased for purposes of calculating the new payment.
SECTION 6: That the City of Okeechobee and Okeechobee Utility Authority
Employees' Retirement System, adopted pursuant to Ordinance No. 1053, as
subsequently amended, is hereby further amended by amending Section 14, Maximum
Pension, subsections 6., 8., 12.B., and by adding subsection 13., to read as follows:
6. Less than Ten (10) Years of Participation o.
The maximum retirement benefits payable underthis Section to any Member
who has completed Tess than ten (10) years of e • • participation
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
participation and the denominator of which is ten (10). The reduction provided by this
subsection cannot reduce the maximum benefit below 10% of the limit determined without
regard to this subsection. The reduction provided for in this subsection shall not be
applicable to pre- retirement disability benefits paid pursuant to Section 8, or pre- retirement
death benefits paid pursuant to Section 7.
8. Ten Thousand Dollar ($10,000) Limit; Less Than Ten Years of Service.
Notwithstanding anything in this Section 14, the retirement benefit payable
with respect to a Member shall be deemed not to exceed the limit set forth in this
subsection 8. of Section 14 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 ten thousand dollars ($10,000) for the applicable limitation year
anti or for any prior limitation year and the City has not at any time maintained a qualified
defined contribution plan in which the Member participated; provided, however, that if the
Member has completed less than ten (10) years of Credited Service with the City, the limit
underthis subsection 8. of Section 14 shall be a reduced limit equal to ten thousand dollars
($10,000) 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).
4
12. B. No Member of the 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 a different
employer's retirement system or plan. This restriction does not apply
to social security benefits or federal benefits under Chapter 6-7 1223,
Title 10, U.S. Code.
13. Effect of Direct Rollover on 415(b) Limit.
If the plan accepts a direct rollover of an employee's or former employee's
benefit from a defined contribution plan qualified under Code Section 401(a) which is
maintained by the employer, any annuity resulting from the rollover amount that is
determined using a more favorable actuarial basis than required under Code Section
417(e) shall be included in the annual benefit for purposes of the limit under Code Section
415(b).
SECTION 7: That the City of Okeechobee and Okeechobee Utility Authority
Employees' Retirement System, adopted pursuant to Ordinance No. 1053, as
subsequently amended, is hereby further amended by amending Section 15, Minimum
Distribution of Benefits, subsection 2.B.(4), to read as follows:
2. B. (4) If the Member's surviving spouse is the Member's sole
designated beneficiary and the surviving spouse dies after the
Member but before distributions to the surviving spouse begin,
this subsection 2.B., other than subsection 2.B.(1), will apply
as if the surviving spouse were the Member.
For purposes of this subsection 2.B. ,
distributions are considered to begin on the Member's required
beginning date or, if subsection 2.B.(4) applies, the date of
distributions are required to begin to the surviving spouse
under subsection 2.B.(1). If annuity payments irrevocably
commence to the Member before the Member's required
beginning date (or to the Member's surviving spouse before
the date distributions are required to begin to the surviving
spouse under subsection 2.B.(1)), the date distributions are
considered to begin is the date distributions actually
commence.
SECTION 8: That the City of Okeechobee and Okeechobee Utility Authority
Employees' Retirement System, adopted pursuant to Ordinance No. 1053, as
subsequently amended, is hereby further amended by amending Section 25,
Reemployment After Retirement, subsections 2., 3., 4. and 6., to read as follows:
2. After Normal Retirement. Any Retiree who is retired under normal retirement
pursuant to this System and who is reemployed as a General Employee after that
Retirement and, by virtue of that reemployment, is eligible to participate in this System,
shall upon being reemployed continue receipt of benefits if he is at least age sixty -two (62),
otherwise the System shall discontinue receipt of benefits until he reaches age sixty -two
(62). Upon reemployment, the Retiree shall be deemed to be fully vested and the
additional Credited Service accrued during the subsequent employment period shall be
used in computing a second benefit amount attributable to the subsequent employment
period, which benefit amount shall be added to the benefit determined upon the initial
retirement to determine the total benefit payable upon final Retirement. Calculations of
benefits upon Retirement shall be based upon the benefit accrual rate, Average Final
Compensation, and Credited Service as of that date (not including any period of DROP
participation) and the retirement benefit amount for any subsequent employment period
shall be based upon the benefit accrual rate, Average Final Compensation (based -only
and Credited Service as of the date of subsequent retirement (based only on the
subsequent employment period). The amount of any death or disability benefit received
as a result of a subsequent period of employment shall be reduced by the amount of
accrued benefit eligible to be paid for a prior period of employment. The optional form of
benefit and any joint pensioner selected upon initial retirement shall not be subject to
change upon subsequent retirement except as otherwise provided herein, but the Member
may select a different optional form and joint pensioner applicable to the subsequent
retirement benefit.
5
3. Any Retiree who is retired under normal retirement pursuant to this System
and who is reemployed by the City after that Retirement and, by virtue of that
reemployment is ineligible to participate in this System, shall, during the period of such
reemployment, continue to receive retirement benefits previously earned if he is at least
age sixty -two (62), otherwise the System shall discontinue receipt of benefits until he
reaches age sixty -two (62). Former DROP participants shall begin receipt of benefits under
these circumstances.
4. After Early Retirement. Any Retiree who is retired under early retirement
pursuant to this System and who subsequently becomes an employee of the City in any
capacity, shall discontinue receipt of benefits from the System until the earlier of
termination of employment or such time as the reemployed Retiree reaches the -date that
age
sixty -two (62). A Retiree who returns to work under the provisions of this Section shall not
be eligible for membership in the System, and, therefore, shall not accumulate additional
Credited Service for subsequent periods of employment described in this Section, shall not
be required to make contributions to the System, nor shall he be eligible for any other
benefit other than the Retiree's early retirement benefit when he again becomes eligible
as provided herein. Retirement pursuant to an early retirement incentive program shall be
deemed early retirement for purposes of this Section if the Member was permitted to retire
prior to the customary retirement date provided for in the System at the time of retirement.
6. DROP Participants. Retirees who are or were in the Deferred
Retirement Option Plan shall, following termination of employment after DROP
participation, have the options provided for in this section for reemployment.
SECTION 9: That the City of Okeechobee and Okeechobee Utility Authority
Employees' Retirement System, adopted pursuant to Ordinance No. 1053, as
subsequently amended, is hereby further amended by amending, Section 27, Prior
Government Service, subsection 5., to read as follows:
5. In no event, however, may Credited Service be purchased pursuant to this
Section for prior service with any other governmental agency, if such prior service forms
or will form the basis of a retirement benefit or pension from another retirement system or
plan as set forth in Section 14, subsection 11.[3 12.B.
SECTION 10: That the City of Okeechobee and Okeechobee Utility Authority
Employees' Retirement System, adopted pursuant to Ordinance No. 1053, as
subsequently amended, is hereby further amended by amending Section 28, Deferred
Retirement Option Plan, to read as follows:
SECTION 28. DEFERRED RETIREMENT OPTION PLAN.
1. Definitions.
As used in this Section 28, the following definitions apply:"
A. "DROP" -- The City of Okeechobee General Employees' Deferred
Retirement Option Plan.
B. "DROP Account" -- The account established for each DROP
participant under subsection 3.
C "Total return of the assets" -- For purposes of calculating earnings on
a Member's DROP Account pursuant to subsection 3.B.(2)(b), for
each fiscal year quarter, the percentage increase (or decrease) in the
interest and dividends earned on investments, including realized and
unrealized gains (or losses), of the total plan assets.
6
2. Participation.
A. Eligibility to Participate.
In lieu of terminating his employment as a General Employee, any
Member who is eligible for normal retirement under the System may
elect to defer receipt of such service retirement pension and to
participate in the DROP.
B. Election to Participate.
A Member's election to participate in the DROP must be made in
writing in a time and manner determined by the Board and shall be
effective on the first day of the first calendar month which is at least
fifteen (15) business days after it is received by the Board.
C. Period of Participation.
A Member who elects to participate in the DROP under subsection
2.B., shall participate in the DROP for a period not to exceed sixty
(60) months beginning at the time his election to participate in the
DROP first becomes effective. An election to participate in the DROP
shall constitute an irrevocable election to resign from the service of
the City not later than the date provided for in the previous sentence.
A Member may participate only once.
D. Termination of Participation.
(1) A Member's participation in the DROP shall cease at the
earlier of:
(a) the end of his permissible period of participation in the
DROP as determined under subsection 2.C.; or
(b) termination of his employment as a General Employee.
(2) Upon the Member's termination of participation in the DROP,
pursuant to subsection (a) above, all amounts provided for in
subsection 3.B., including monthly benefits and investment
earnings and losses or interest, shall cease to be transferred
from the System to his DROP Account. Any amounts
remaining in his DROP Account shall be paid to him in
accordance with the provisions of subsection 4. when he
terminates his employment as a General Employee.
A Member who terminates his participation in the DROP under
this subsection 2.D. shall not be permitted to again become a
participant in the DROP.
(3)
E. Effect of DROP Participation on the System.
(1) A Member's Credited Service and his accrued benefit under
the System shall be determined on the date his election to
participate in the DROP first becomes effective. The Member
shall not accrue any additional Credited Service or any
additional benefits under the System (except for any
supplemental benefit payable to DROP participants or any
additional benefits provided under any cost -of- living
adjustment for Retirees in the System) while he is a participant
in the DROP. After a Member commences participation, he
shall not be permitted to again contribute to the System nor
shall he be eligible for disability or pre- retirement death
benefits, except as provided for in Section 25, Reemployment
After Retirement.
(2) No amounts shall be paid to a Member from the System while
the Member is a participant in the DROP. Unless otherwise
specified in the System, if a Member's participation in the
DROP is terminated other than by terminating his employment
as a General Employee, no amounts shall be paid to him from
the System until he terminates his employment as a General
7
Employee. Unless otherwise specified in the System, amounts
transferred from the System to the Member's DROP Account
shall be paid directly to the Member only on the termination of
his employment as a General Employee.
3. Funding.
A. Establishment of DROP Account.
A DROP Account shall be established for each Member participating
in the DROP. A Member's DROP Account shall consist of amounts
transferred to the DROP under subsection 3.B., and earnings or
interest on those amounts.
B. Transfers From Retirement System.
(1) As of the first day of each month of a Member's period of
participation in the DROP, the monthly retirement benefit he
would have received under the System had he terminated his
employment as a General Employee and elected to receive
monthly benefit payments thereunder shall be transferred to
his DROP Account, except as otherwise provided for in
subsection 2.D.(2). A Member's period of participation in the
DROP shall be determined in accordance with the provisions
of subsections 2.C. and 2.D., but in no event shall it continue
past the date he terminates his employment as a General
Employee.
(2) Except as otherwise provided in subsection 2.D.(2), a
Member's DROP Account under this subsection 3.B. shall be
debited or credited with either:
(a) Interest at an effective rate of six and one -half percent
(6.5 %) per annum compounded monthly determined on
the last business day of the prior month's ending
balance and credited to the Member's DROP Account
as of such date (to be applicable to all current and
future DROP participants); or
(b) Earnings, to be credited or debited to the Member's
DROP Account, determined as of the last business day
of each fiscal year quarter and debited or credited as of
such date, determined as follows:
The average daily balance in a Member's DROP
Account shall be credited or debited at a rate equal to
the net investment return realized by the System for
that quarter. "Net investment return" for the purpose of
this paragraph is the total return of the assets in which
the Member's DROP Account is invested by the Board
net of brokerage commissions, transaction costs and
management fees.
For purposes of calculating earnings on a Member's
DROP Account pursuant to this subsection 3.B.(2)(b),
brokerage commissions, transaction costs, and
management fees shall be determined for each quarter
by the investment consultant pursuant to contracts with
fund managers as reported in the custodial statement.
The investment consultant shall report these quarterly
contractual fees to the Board. The investment
consultant shall also report the net investment return for
each manager and the net investment return for the
total plan assets.
Upon electing participation in the DROP, the Member
shall elect to receive either interest or earnings on his
account to be determined as provided above. The
Member may, in writing, elect to change his election
only once during his DROP participation. An election to
change must be made prior to the end of a quarter and
shall be effective beginning the following quarter.
8
(3) A Member's DROP Account shall only be credited or debited
with earnings or interest and monthly benefits while the
Member is a participant in the DROP. A Member's final DROP
account value for distribution to the Member upon termination
of participation in the DROP shall be the value of the account
at the end of the quarter immediately preceding termination of
participation for participants electing the net plan return and at
the end of the month immediately preceding termination of
participation for participants electing the flat interest rate
return, plus any monthly periodic additions made to the DROP
account subsequent to the end of the previous quarter or
month, as applicable, and prior to distribution. If a Member
fails to terminate employment after participating in the DROP
for the permissible period of DROP participation, then
beginning with the Member's 1st month of employment
following the last month of the permissible period of DROP
participation, the Member's DROP Account will no longer be
credited or debited with earnings or interest, nor will monthly
benefits be transferred to the DROP account. All such non -
transferred amounts shall be forfeited and continue to be
forfeited while the Member is employed by the City, and no
cost -of- living adjustments shall be applied to the Member's
credit during such period of continued employment. A Member
employed by the City after the permissible period of DROP
participation will be eligible for pre- retirement death and
disability benefits, and will accrue additional Credited Service,
only as provided for in Section 25.
4. Distribution of DROP Accounts on Termination of Employment.
A. Eligibility for Benefits.
A Member shall receive the balance in his DROP Account in
accordance with the provisions of this subsection 4. upon his
termination of employment as a General Employee. Except as
provided in subsection 4.E., no amounts shall be paid to a Member
from the DROP prior to his termination of employment as a General
Employee.
B. Form of Distribution.
(1) Unless the Member elects otherwise, distribution of his DROP
Account shall be made in a lump sum, subject to the direct
rollover provisions set forth in subsection 4.F. Elections under
this paragraph shall be in writing and shall be made in such
time or manner as the Board shall determine.
(2) If a Member dies before his benefit is paid, his DROP Account
shall be paid to his Beneficiary in such optional form as his
Beneficiary may select. If no Beneficiary designation is made,
the DROP Account shall be distributed to the Member's estate.
C. Date of Payment of Distribution.
Except as otherwise provided in this subsection 4., distribution of a
Member's DROP Account shall be made as soon as administratively
practicable following the Member's termination of employment.
Distribution of the amount in a Member's DROP account will not be
made unless the Member completes a written request for distribution
and a written election, on forms designated by the Board, to either
receive a cash lump sum or a rollover of the lump sum amount.
D. Proof of Death and Right of Beneficiary or Other Person.
The Board may require and rely upon such proof of death and such
evidence of the right of any Beneficiary or other person to receive the
value of a deceased Member's DROP Account as the Board may
deem proper and its determination of the right of that Beneficiary or
other person to receive payment shall be conclusive.
9
E. Distribution Limitation.
Notwithstanding any other provision of this subsection 4., all
distributions from the DROP shall conform to the "Minimum
Distribution Of Benefits" provisions as provided for herein.
F Direct Rollover of Certain Distributions.
This subsection applies to distributions made on or after January 1,
2002. Notwithstanding any provision of the DROP to the contrary, a
distributee may elect to have any portion of an eligible rollover
distribution paid in a direct rollover as otherwise provided under the
System in Section 24.
5. Administration of DROP.
A. Board Administers the DROP.
The general administration of the DROP, the responsibility for carrying
out the provisions of the DROP and the responsibility of overseeing
the investment of the DROP's assets shall be placed in the Board.
The members of the Board may appoint from their number such
subcommittees with such powers as they shall determine; may adopt
such administrative •procedures and regulations as they deem
desirable for the conduct of their affairs; may authorize one or more
of their number or any agent to execute or deliver any instrument or
make any payment on their behalf; may retain counsel, employ
agents and provide for such clerical, accounting, actuarial and
consulting services as they may require in carrying out the provisions
of the DROP; and may allocate among themselves or delegate to
other persons all or such portion of their duties under the DROP,
other than those granted to them as Trustee under any trust
agreement adopted for use in implementing the DROP, as they, in
their sole discretion, shall decide. A Trustee shall not vote on any
question relating exclusively to himself.
B. Individual Accounts, Records and Reports.
The Board shall maintain records showing the operation and condition
of the DROP, including records showing the individual balances in
each Member's DROP Account, and the Board shall keep in
convenient form such data as may be necessary for the valuation of
the assets and liabilities of the DROP. The Board shall prepare and
distribute to Members participating in the DROP and other individuals
or file with the appropriate governmental agencies, as the case may
be, all necessary descriptions, reports, information returns, and data
required to be distributed or filed for the DROP pursuant to the Code
and any other applicable laws.
C. Establishment of Rules.
Subject to the limitations of the DROP, the Board from time to time
shall establish rules for the administration of the DROP and the
transaction of its business. The Board shall have discretionary
authority to construe and interpret the DROP (including but not limited
to determination of an individual's eligibility for DROP participation,
the right and amount of any benefit payable under the DROP and the
date on which any individual ceases to be a participant in the DROP).
The determination of the Board as to the interpretation of the DROP
or its determination of any disputed questions shall be conclusive and
final to the extent permitted by applicable law.
D. Limitation of Liability.
(1) The Trustees shall not incur any liability individually or on
behalf of any other individuals for any act or failure to act,
made in good faith in relation to the DROP or the funds of the
DROP.
(2) Neither the Board nor any Trustee of the Board shall be
responsible for any reports furnished by any expert retained or
employed by the Board, but they shall be entitled to rely
10
thereon as well as on certificates furnished by an accountant
or an actuary, and on all opinions of counsel. The Board shall
be fully protected with respect to any action taken or suffered
by it in good faith in reliance upon such expert, accountant,
actuary or counsel, and all actions taken or suffered in such
reliance shall be conclusive upon any person with any interest
in the DROP.
6. General Provisions.
A. The DROP is not a separate retirement plan.
Instead, it is a program under which a Member who is eligible for
normal retirement under the System may elect to accrue future
retirement benefits in the manner provided in this Section 28 for the
remainder of his employment, rather than in the normal manner
provided under the plan. Upon termination of employment, a Member
is entitled to a lump sum distribution of his or her DROP Account
balance or may elect a rollover. The DROP Account distribution is in
addition to the Member's monthly benefit.
B. Notional account.
The DROP Account established for such a Member is a notional
account, used only for the purpose of calculation of the DROP
distribution amount. It is not a separate account in the System.
There is no change in the System's assets, and there is no distribution
available to the Member until the Member's termination from the
DROP. The Member has no control over the investment of the DROP
account.
C. No employer discretion.
The DROP benefit is determined pursuant to a specific formula which
does not involve employer discretion.
D. IRC limit.
The DROP Account distribution, along with other benefits payable
from the System, is subject to limitation under Internal Revenue Code
Section 415(b).
(A E) Amendment of DROP.
The DROP may be amended by an ordinance of the City at any time
and from time to time, and retroactively if deemed necessary or
appropriate, to amend in whole or in part any or all of the provisions
of the DROP. However, except as otherwise provided by law, no
amendment shall make it possible for any part of the DROP's funds
to be used for, or diverted to, purposes other than for the exclusive
benefit of persons entitled to benefits under the DROP. No
amendment shall be made which has the effect of decreasing the
balance of the DROP Account of any Member.
B F. Facility of Payment.
If a Member or other person entitled to a benefit under the DROP is
unable to care for his affairs because of illness or accident or is a
minor, the Board shall direct that any benefit due him shall be made
only to a duly appointed legal representative. Any payment so made
shall be a complete discharge of the liabilities of the DROP for that
benefit.
O G. Information.
Each Member, Beneficiary or other person entitled to a benefit, before
any benefit shall be payable to him or on his account under the
DROP, shall file with the Board the information that it shall require to
establish his rights and benefits under the DROP.
11
9 H. Prevention of Escheat.
If the Board cannot ascertain the whereabouts of any person to whom
a payment is due under the DROP, the Board may, no earlier than
three (3) years from the date such payment is due, mail a notice of
such due and owing payment to the last known address of such
person, as shown on the records of the Board or the City. If such
person has not made written claim therefor within three (3) months of
the date of the mailing, the Board may, if it so elects and upon
receiving advice from counsel to the System, direct that such payment
and all remaining payments otherwise due such person be canceled
on the records of the System. Upon such cancellation, the System
shall have no further liability therefor except that, in the event such
person or his Beneficiary later notifies the Board of his whereabouts
and requests the payment or payments due to him under the DROP,
the amount so applied shall be paid to him in accordance with the
provisions of the DROP.
E I. Written Elections, Notification.
(1) Any elections, notifications or designations made by a Member
pursuant to the provisions of the DROP shall be made in
writing and filed with the Board in a time and manner
determined by the Board under rules uniformly applicable to all
employees similarly situated. The Board reserves the right to
change from time to time the manner for making notifications,
elections or designations by Members under the DROP if it
determines after due deliberation that such action is justified in
that it improves the administration of the DROP. In the event
of a conflict between the provisions for making an election,
notification or designation set forth in the DROP and such new
administrative procedures, those new administrative
procedures shall prevail.
(2) Each Member or Retiree who has a DROP Account shall be
responsible for furnishing the Board with his current address
and any subsequent changes in his address. Any notice
required to be given to a Member or Retiree hereunder shall be
deemed given if directed to him at the last such address given
to the Board and mailed by registered or certified United States
mail. If any check mailed by registered or certified Unified
States mail to such address is returned, mailing of checks will
be suspended until such time as the Member or Retiree
notifies the Board of his address.
F J. Benefits Not Guaranteed.
All benefits payable to a Member from the DROP shall be paid only
from the assets of the Member's DROP Account and neither the City
nor the Board shall have any duty or liability to furnish the DROP with
any funds, securities or other assets except to the extent required by
any applicable law.
e K. Construction.
(1) The DROP shall be construed, regulated and administered
under the laws of Florida, except where other applicable law
controls.
(2) The titles and headings of the subsections in this Section 28
are for convenience only. In the case of ambiguity or
inconsistency, the text rather than the titles or headings shall
control.
H L. Forfeiture of Retirement Benefits.
Nothing in this Section shall be construed to remove DROP
participants from the application of any forfeiture provisions applicable
to the System. DROP participants shall be subject to forfeiture of all
retirement benefits, including DROP benefits.
+ M. Effect of DROP Participation on Employment.
Participation in the DROP is not a guarantee of employment and
DROP participants shall be subject to the same employment
standards and policies that are applicable to employees who are not
DROP participants.
SECTION 11: Specific authority is hereby granted to codify and incorporate this
Ordinance in the existing Code of Ordinances of the City of Okeechobee.
SECTION 12: All Ordinances or parts of Ordinances in conflict herewith be and the
same are hereby repealed.
SECTION 13: 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 14: That this Ordinance shall become effective upon adoption.
96 Introduced on first reading and set for public hearing this Yt. day of
, , 2016.
ATTEST:
Lane
amiotea, ity Clerk
o-�
es E. Kirk, ayor
Passed on second reading after public hearing this Ala day of
, 2016.
ATTEST:
ne t amiotea, City Jerk
APPROVED FOR LEGAL SUFFICIENCY:
Jobn R. Cook, City Attorney
d m/o k/g a n/ 10- 20 -15. o rd
13
✓vy� c
J es E. Kirk, ayor
assed on second reading after public hearing this d day of
, 2016.
ATTEST:
Lane : miotea, C' y Clerk
1
APPROVED FOR LEGAL SUFFICIENCY:
John R. Cook, City Attorney
d m /o k /po l/ 10- 20 -15. o rd
16
es E. Kirk, Mayor