Fort Walton Beach Council agenda — 02-08-11 regular — reading text

0 E v Ck To: Robert T. Mearns, City Manager From: Carole Jones, Executive Assistant Date: February 8, 2011 Subject: Ordinance 1837 to amend FF Pension Plan 1. Background: 1. 1 The Firefighters' Pension Advisory Board has submitted an ordinance to amend the Pension Plan. 2. Discussion: 2. 1 The City has received confirmation from the Firefighters' Pension Actuary, Foster Foster, that there will be no impact to the City by adopting this ordinance and a Christiansen & letter of transmittal from the Firefighters' Pension Attorney, Dehner. by the City' s 2. 2 In addition, Staff has received an opinion on the proposed ordinance Pension. Attorney that confirms the need for the adoption of the Ordinance to clarify current Plan language and to bring the Plan into compliance with various laws and IRS regulation. 2. 3 The confirmation received by the City' s Pension Attorney requested that two the items listed sections of the original Ordinance be removed. Specifically, below were requested to be removed. 1), page 48 of 55, of 2. 3. 1 Section 27, Deferred Retirement Option Plan, ( 2)( E)( proposed Ordinance 1837, titled " Effect of DROP Participation on the Plan" states: For purposes of determining the accrued benefit, the Member's Salary for the purposes of calculating his Average Final Compensation shall include an amount equal to any lump sum payments which would have been paid to the Member and included as salary as defined herein, had the Member retired under normal retirement and not elected DROP participation. Member contributions attributable to any lump sums used in the benefit calculation and not actually received by the Member shall be deducted from the first payments to the Member' s DROP Account."  2. 3. 2 The current definition of " Salary" in the Plan Document excludes lump sump payments, such as unused accumulated sick and vacation leave paid out upon termination, from the calculation of average compensation for retirement purposes. 2. 3. 3 Given the current definition of salary, this change will have no impact. However, if, in the future, this definition of salary is amended, the financial impact could be significant. 2. 3. 4 Therefore, it is recommended that this reference in the proposed Ordinance be eliminated prior to approval and the definition of Salary reflect the definition ofsalary previously included in the Plan Document. 2. 4. Section 28, Reemployment after Retirement, page 54 and 55, is a new section that is created to " provide for the treatment of retirees who are reemployed by the City." 2. 4. 1 In the opinion of Mr. Thomas, the " proposed reemployment after retirement provisions in section 28 are not required to be included in the plan by state or federal law." 2. 4.2 In addition, these revisions could, if adopted, pose IRS complications and questions in the future. 2. 4. 3 Therefore, it is recommended that Section 28 in the proposed Ordinance be eliminated. 2.5 All of the recommended changes have been made to the proposed Ordinance. 3. Financial Impact: 3. 1 As reported by the Firefighters' Pension Plan Actuary, Foster & Foster, there is no financial impact to the City related to Ordinance 1837. 4. Recommendation: 4. 1 Staff recommends City Council adoption of Ordinance 1837. ATTACHMENTS: Ord 1837 ( PDF) Ord 1837 Min from 9 -14 -10 ( PDF) Memo re Firefighters Plan Amend 9 -22 -10 ( PDF) SIGNATURE BLOCK: Carole Jones Completed 02/ 01/ 2011 11: 38 AM Brandy Wunker Completed 02/ 01/ 2011 10: 06 AM City Attorney Pending Carole Jones Skipped 02/ 02/ 20119: 51 AM Completed 02/ 01/ 2011 11: 53 AM City Manager City Council Pending acket?Fg.  Law Offices Christiansen & Dehner, P. A. 63 Sarasota Center Blvd. Suite 107 Sarasota, Florida 34240 • 941 -377 -2200 • Fax 941 -377 -4848 January 17, 2011 Via Electronic & U.S. Mail Ms. Brandy Wunker Finance Director City of Fort Walton Beach P. O. Box 4009 Fort Walton Beach, FL 32549 Re: City of Fort Walton Beach Firefighters' Pension Trust Fund Dear Brandy: Enclosed, please find the restated plan document to be set for second reading. This document incorporates your requested changes. Should you have any further questions please to not hesitate to contact the office. You s very truly, H. Lee Dehner HLD /ksh cc: Ery Kempf, with enclosure  ORDINANCE No. 1837 AN ORDINANCE OF THE CITY OF FORT WALTON BEACH AMENDING THE CITY OF FORT WALTON BEACH MUNICIPAL FIREFIGHTERS' PENSION TRUST FUND, ADOPTED BY ORDINANCE No. 1174, AS SUBSEQUENTLY AMENDED; PROVIDING FOR SEVERABILITY OF PROVISIONS; REPEALING ALL ORDINANCES IN CONFLICT HEREWITH AND PROVIDING AN EFFECTIVE DATE. 1. The City of Fort: Walton Beach Firefighters are presently provided pension and certain other benefits under Ordinances of the City of Fort Walton Beach and; 2. The City Council desires to clarify and restate the provisions of the Firefighters' Retirement Plan to incorporate Federal law and the applicable provisions of Chapter 175, Florida Statutes; NOW, THEREFORE, BE IT ORDAINED BY THE CITY COUNCIL OF THE CITY OF FORT WALTON BEACH, FLORIDA: SECTION 1: 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 2: All ordinances or parts of ordinances in conflict herewith be and the same are hereby repealed. SECTION 3: This ordinance shall take effect immediately upon approval by Council and signature by the Mayor. Approved: Mayor: Mike Anderson, Mayor Attest: Helen Spencer, City Clerk Reviewed and Approved as to Form: Hayward Dykes, City Attorney Reviewed and Approved as to legal sufficiency: H. Lee Dehner, Retirement Attorney Page I of 53 Pages  CITY OF FORT WALTON BEACH MUNICIPAL FIREFIGHTERS' 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 three percent (3 %) per annum. For those Members who purchase Credited Service with interest or at no cost to the Plan, any payment representing the amount attributable to Member contributions based on the applicable Member contribution rate, and any payment representing interest and any required actuarially calculated payments for the purchase ofsuch Credited Service, shall be included in Accumulated Contributions, without the crediting of interest of three percent (3 %) per annum. a IN No L9111jelt" M1910120 logo Actuarial Equivalent means a benefit or amount of equal value, based upon the I3-p 1984 RP 2000 Mortality Table and a six and one -half percent ( 6. 50 %) rate of interest. This rate of interest will be determined periodically by the Board. 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 subiect to City discretion. - - -- as v Average Final Compensation shall mean one -twelfth (1/ 12) of the average salary ofthe 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 Firefighter, whichever is greater. A year shall be twelve ( 12) Wj consecutive months. IRr r- 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. M 00 If no such designation is in effect, or ifno person so designated is living, at the time of death of the Member, the beneficiary shall be the estate of the Member. 0 Board means the Board of Trustees, which shall