O00-33ORDINANCE NO. O-~a~::::~-~
AN ORDINANCE OF THE CITY OF BOYNTON BEACH
AMENDING CHAPTER 18, ARTICLE III, PENSIONS'
FOR POLICE OFFICERS; CREATING A NEW SECTION
18-176 - DEFERRED RETIREMENT OPTION PLAN;
PROVIDING FOR CONFLICTS, SEVERABILITY,
CODIFICATION AND AN EFFECTIVE DATE.
WHEREAS, the City Commission of the City of Boynton Beach desires to
amend Chapter 18 of the Code of Ordinances of the City to provide for a
Deferred Retirement Option Plan for Police Officers;
NOW, THEREFORE, BE TT ORDATNED BY THE CITY COMMTSSTON
OF THE CZTY OF BOYNTON BEACH, FLORZDA:
Section 1: Section 18-169 of Chapter 18, Article III of the Code of
Ordinances of the City is hereby amended by creating a new Section 18-176, as
follows:
Sec. :L8-:L76. Deferred Retirement Option Plan
(1) A deferred retirement option plan ("DROP") is hereby created.
(2) Eligibility to participate in the DROP is based upon eligibility for normal
service retirement in the Plan. Members shall elect to participate by
applying to the Board of Trustees on a form provided for that
purpose.
(3) Participation in the DROP must be exercised within the first twenty-
(4)
two (22) years of combined credited service. However, participation
in calendar year 2000, the first year, will be extended to all members.
Except for the extension of participation at inception as provided for
in (c) above, a member shall not participate in the DROP beyond the
time of attaining twenty-five (25) years of service and the total years
(s)
(6)
(7)
(8)
of participation in the DROP shall not exceed five (5) years. For
example:
(1) Members with twenty (20) years of credited service at time of
entry shall only participate for five (5) years.
(2) Members with twenty-one (21) years of credited service at time
of entry shall only participate for four (4) years.
(3) Members with twenty-two (22) years of credited service at time
of entry shall only participate for three (3) years.
Upon a member's election to participate in the DROP, he or she shall
cease to be a member and is precluded from accruinq any additional
benefit under the Pension Fund. For all Fund purposes, the member
becomes a retirant. The amount of credited service and final average
salary freeze as of the date of entry into the DROP. Accumulated,
unused sick and vacation leave shall be included in the compensation
calculation; provided however, that a minimum balance of 120 hours
of sick leave and 120 hours of vacation leave shall be maintained by
the employee and excluded from this calculation. The retained leave
balance, including any additions, shall be distributed at the conclusion
of DROP participation and separation from service.
Payment shall be made into the employee's DROP account as if the
employee had retired from the employ of the City. The amounts paid
will be determined in accordance with this Plan and the employee's
selection of the payment option. Payments into the DROP will be
made monthly over the period the employee participates in the DROP,
up to a maximum of sixty (60) months.
An employee's account in the DROP program shall earn interest in one
of two ways. The selection of the earnings program shall be
(9)
(10)
(11)
(12)
irrevocable and shall be made prior to the first deposit in the DROP
account. The options are:
(1) Gains or losses at the same interest rate earned by the Pension
Plan; or
(2) A guaranteed rate of 7%.
Employee's DROP accounts will be assessed an administrative fee that
is based upon the ratio that the Employee's DROP account bears to
the Fund as a whole.
An employee's participation in the DROP shall terminate at the end of
five years or 25 years of service, whichever comes first. Failure to
end DROP participation may result in penalties at the discretion of the
Trustees, up to and including forfeiture of the DROP account.
All interest shall be credited to the employee's DROP account on a
quarterly basis with quarterly statements provided. In the event that
a member dies while in the DROP, interest shall be pro-rated to the
last business day of the month preceding the death of the member.
Upon termination of employment, participants in the DROP will receive
the balance of the DROP account in accordance with the following
rules:
(1)
(2)
Members may elect to begin to receive payment upon
termination of employment or defer payment of DROP until the
latest day as provided under sub-subparagraph c.
Payments shall be made in either:
1. Lump sum - the entire account balance will be paid to
the retirant upon approval of the Board of Trustees,
ii Installments - the account balance will be paid out to
the retirant in five (5) equal annual payments paid over
3
five (5) years, the first payment to be made upon
approval of the Board of Trustees.
(3) Any form of payment selected by a police officer must comply
with the minimum distribution requirements of the IRC
401(A)(9), and is subject to the requirements of subsection
([29) of this Act e.g., payments must commence by age 70 1/2.
(4) The beneficiary of the DROP participant who dies before
payments from DROP begin shall have the same right to select
payment options as the participant in accordance with this
subsection. A DROP participant may designate a beneficiary to
receive the DROP balance in the event of the participant's
death prior to pay out of the full DROP balance.
(1:[) No payments will be made from DROP until the employee actually
separates from service with the City.
(:[2) If an employee shall die during participation in the DROP, a survivor
benefit shall be payable in accordance with the form of benefit chosen
at the time of entry into the DROP.
(13) Upon commencement of participation in the DROP, the member shall
no longer be eligible for disability retirement from the pension plan.
Section 2. That all ordinances or parts of ordinances in conflict herewith be
and the same are hereby repealed.
Section 3. Should any section or provision of this ordinance or a portion
hereof, any paragraph, any sentence, or word be declared by a court of competent
jurisdiction to be invalid, such decision shall not affect the remainder of this
ordinance.
Section 4. Authority is hereby granted to codify this ordinance.
Section 5: This ordinance shall become effective immediately upon passage.
FIRST READING this ~,~ day of.lune, 2000.
SECOND, FINAL READING AND PASSAGE this ~" day of.luly, 2000.
C['I'Y ~)= BOYNT,ON/I~EACH, FLORIDA
Vice Mayor ~ .......
Co~i s~io--~e ~'
Commissioner
A-I-I'EST:
- 5
D.R.O.P.
DEFERRED RETIREMENT OPTION PLAN
for
BOYNTON BEACH POLICE OFFICERS PENSION FUND
I HAVE RECEIVED A COPY OF THE PROVISIONS FOR THE DROP CONTAINED IN
THE SPECIAL ACT. IT HAS BEEN EXPLAINED TO ME AND I AM IN FULL AGREE-
MENT WITH THE TERMS SET FORTH. IT IS MY UNDERSTANDING THAT I WILL NO
LONGER HAVE TO CONTRIBUTE SEVEN PERCENT (7.00%) PAYROLL DEDUCTIONS
FOR PENSION. I HAVE ALSO BEEN ADVISED TO SEEK THE COUNSEL OF A
QUALIFIED TAX ADVISOR REGARDING THE TAX CONSEQUENCE TO ME OF
ENTERING THE DROP. FAILURE TO RETIRE AT THE END OF THE PARTICIPATION
PERIOD COULD RESULT IN FINANCIAL PENALTIES BEING ASSESSED UP TO AND
INCLUDING THE LOSS OF THE DROP ACCOUNT BALANCES.
I, , RESPECTFULLY SUBMIT
TO ENTER INTO THE DROP EFFECTIVE .(DATE).
SIGNATURE
(MAXIMUM DROP
PARTICIPATION)
PENSION ADMINISTRATOR