20-010 2 ORDINANCE 20-010
J
AN ORDINANCE OF THE CITY OF BOYNTON BEACH FLORIDA
3 AMENDING ARTICLE III OF CHAPTER 18 OF THE BOYNTON
BEACH CODE OF ORDINANCES ENTITLED MUNICIPAL POLICE
OFFICERS' RETIREMENT TRUST FUND AMENDING SECTION
3 18-164 TO PROVIDE FOR MUTUAL CONSENT REGARDING USE
OF THE 185 MONEY AND AN INCREASE IN THE MEMBER
10 CONTRIBUTIONS; AMENDING SECTION 18-165 DEFINITION OF
1 BENEFICIARY TO ALLOW FOR PAYMENT OF LUMP SUM
12 BENEFITS TO A TRUST; AMENDING SECTION 18-169 TO ADD A
13 NEW NORMAL RETIREMENT BENEFIT FOR POLICE OFFICERS
14 HIRED AFTER OCTOBER 1, 2019 AND ADD A MAXIMUM
1$ PENSION BENEFIT;AMENDING SECTION 18-169(e)TO REFLECT
16 THE NEW BENEFIT FOR POLICE OFFICERS HIRED AFTER
1 7 OCTOBER 1, 2019; AMENDING SECTION 18-174 TO COMPLY
18 WITH THE NEW FEDERAL SECURE ACT; AMENDING SECTION
19 18-175 DEFERRED RETIREMENT OPTION PLAN TO PROVIDE
20 THAT MEMBERS HIRED AFTER OCTOBER 1, 2019 WILL ARE
2_ SUBJECT TO SECTION 18-300 OF THE CITY CODE FOR THE
22 TERMS OF THE DROP PLAN AND TO PROVIDE THE PROCESS
23 FOR DISTRIBUTION OF THE DROP IN THE EVENT OF DEATH
24 OF THE DROP PARTICIPANT WITH A BALANCE IN THE
2 ACCOUNT AND ESTABLISHING A PRIORITY DISTRIBUTION IN
26 THE EVENT THERE IS NO DESIGNATED BENEFICIARY;
27 PROVIDING FOR CODIFICATION CONFLICT, SEVERABILITY,
28 AND AN EFFECTIVE DATE.
29
30 WHEREAS, the City and the Palm Beach County Police Benevolent Association
3 l ("Union")have agreed in collective bargaining to make certain changes to the Pension Benefits
32 provided to the Police Officer members of the Pension Plan;
33 WHEREAS,the City and the Union have agreed in collective bargaining to a change
34 to the DROP plan which is effective for members hired on or after October 1, 2019;
3 5 WHEREAS the City Commission of the City of Boynton Beach Florida desires to so
315 amend the Boynton Beach Police Officers Pension Fund.
37 NOW THEREFORE BE IT ORDAINED BY THE CITY COMMISSION OF THE
3 3 CITY OF BOYNTON BEACH FLORIDA
39
40 Section 1. The foregoing WHEREAS clauses are hereby certified as being true and
4 correct and are incorporated herein by this reference.
42
4� Section 2. Section 18-164(b) of Article III of Chapter 18 of the Boynton Beach
44 Code of Ordinances is hereby amended as follows:
45
46 Sec. 18-164. Creation and maintenance of fund and retirement system.
41
48 * * *
49
59 (b) The fund shall be maintained in the following manner:
5
52 (1) By payment to the fund of the net proceeds of the .85% excise tax which is
53 imposed by the City of Boynton Beach upon certain casualty insurance companies on
54 their gross receipts of premiums from holders of policies,which policies cover property
5� within the corporate limits of the City of Boynton Beach as authorized in F.S. Chapter
5t 185, amended. These amounts are to be deposited with the Board of Trustees within
57 five days of receipt by the municipality.F.S.Ch. 185. Besiinning In November of 2017
5 and endin. November of 2021 2818 ems, $30,000.00 of each year's distribution of
50 the insurance premium excise tax provided for in this subsection will be used by the
60 City to offset the unfunded actuarial liability of the Fund. The remainder of the
6 insurance premium excise tax received each year Funds will be used as set forth in
62 Section 18-169(f) of the Plan, which provides for a supplemental benefit as defined in
63 Florida Statutes §185.02(22).
64
65 (2) By the payment to the fund of 7% of the salary of each full time police officer
66 duly appointed and enrolled as a member of the City of Boynton Beach Police
67 Department;which 7%shall be picked up,rather than deducted,by the City of Boynton
64 Beach from the compensation due to the Police Officer and paid over to the Board of
69 Trustees of the Boynton Beach Police Officers' Pension Fund on a bi-weekly basis.All
7) pickup contributions shall be treated as employer contributions for the purposes of
7 l determining tax treatment under the Internal Revenue Code of 1986, as amended. All
72 such pick up amounts shall be considered as employee contributions for purposes of this
73 plan.The percentage deducted from the police officers' salaries are to be deposited with
74 the Board of Trustees immediately. F.S. Ch.185, Boynton Beach Code of Ordinances
75 Sec. 18-170.
76 a. Effective the first full payroll period after October 1, 2019, the
77 employee contribution will increase to 7.5%.
73 b. Effective the first full payroll period after October 1, 2020, the
79 employee contribution will increase to 8.0%.
80 • 1 • 1 s , . _ • I „ • I t •
8l employee contribution will increase to 8.5%.
82 d. The increase in employee contributions provided for in subsections
83 a-c will not reduce the City's contribution. The excess City contribution
2
S:\CA\Ordinances\Pension\AMENDMENT_TO_ADD_2019_CBA_AND_TRUST_AS_BENEFICIARY_(00146793-2xbc 171)(2nd
Reading).Docx
8' created by those additional contributions will be used to offset the unfunded
8' actuarial liability.
8i,
8 e. To fund the monthly supplemental benefit provided for in Section
8: 18-169(f), effective October 1, 2001, each police officer shall contribute an
8'' additional 1% of salary through twenty years of service. This contribution
911 is picked up rather than deducted under the provisions of Code section
9 414(h)(2).
9
9 (3) By all fines and forfeitures imposed and collected from any police officer
9' because of the violation of any rule and regulation adopted by the Board of Trustees.
9 F.S. Ch. 185.
9+,
9 (4) By mandatory payment at least quarterly by the City of Boynton Beach a sum
9 equal to the normal cost and the amount required to fund any actuarial deficiency shown
9' by an actuarial valuation as provided in F.S. Chapter 112, Part VII. F.S. Ch. 185. On
10 1) an annual basis,the Board of Trustees will evaluate the actuarial assumptions used.
10
10 (5) By all gifts, bequests, and devises when donated to the fund. F.S. Ch. 185.
10
10 (6) By all accretions to the fund by way of interest or dividends on bank deposits,
10 or otherwise. F.S. Ch. 185.
100
10 ' (7) By all other sources or income now or hereafter authorized by law for the
10 augmentation of the Boynton Beach Police Officers' Pension Fund. F.S. Ch. 185.
10"
1111 Section 3. Section 18-165 Definition of Beneficiary of Article III of Chapter 18 of
11 the Boynton Beach Code of Ordinances is hereby amended as follows:
11 '
11 Sec. 18-165. - Definitions.
11
11 , The following words and phrases as used in this article shall have the following meanings:
11 ,
11 ' ******
11 ;
11" Beneficiary. Any natural person, ' .. - - - . - - -- - =- , who is entitled to
121 receive a pension benefit payable from the Boynton Beach Police Officers' Pension Fund
12 upon the death of a member or participant. F.S. Ch. 185.A member's trust may only be a
12' beneficiary of the DROP Account. If there is no named beneficiary eligible to receive
12; the remaining DROP, member refund of contributions, or the remainder of the 10 year
12certain period,the benefit can be paid to the member's estate.
12.
12• Section 4. Section 18-169(a) of Article III of Chapter 18 of the Boynton Beach
12' Code of Ordinances is hereby amended as follows:
12:
3
S:\CA\Ordinances\Pension\AMENDMENT_TO_ADD_2019_CBA_AND_TRUST_AS_BENEFICIARY_(00146793-2xbc 171)(2nd
Reading).Docx
129 Sec. 18-169. Requirements for retirement- benefit amounts.
130
13 . (a) Normal retirement.
132
133 (1) Normal retirement date. The normal retirement date ofd
134 a,. Police Officers hired before October 1, 2019 each police officer will be the
135 first day of the month coinciding with, or next following, the date on which he
136 or she has attained and completed 20 years of credited service, or the first day
137 of the month coinciding with, or next following, the date on which the police
13$ officer has attained age 55 and completed ten years of credited service or age
139 50 and completed 15 years of service. In the case of a retirement with twenty
140 (20) years of service, effective January 1, 2017, Normal Retirement Age is the
14 l age a police officer has attained when retired at twenty (20) years of service.
142 IL Police Officers hired on and after October 1, 2019 will be the first day of
143 the month coinciding with, or next following, the date on which he or she
144 has attained and completed 25 years of credited service, or the first day of
145 the month coinciding with, or next following, the date on which the police
146 officer has attained age 55 and completed ten years of credited service. In
147 the case of a retirement with twenty-five (25) years of service, effective
14(3 October 1, 2019, Normal Retirement Age is the age a police officer has
149 attained when retired at twenty (25)years of service,
150
15 (2) Normal retirement benefit. The normal retirement benefit payable to a police officer
152 who retires on or after the normal retirement date shall be an amount equal to the
153 number of years of his or her credited service multiplied by 3.5%of his or her average
154 final compensation. For Effective [insert effective date], for all police officers hired
155 on or after October 1, 2015, the 3.5% multiplier provided for in this the paragraph
156 shall be 3.0%. Effective [insert date of passage] for all police officers, the
157 maximum retirement benefit under the normal form of benefit is 85%of average
153 final compensation, provided that in all cases the benefit is at least 2.75% for
15p each year of service.
16)
161
162 Section 5. Section 18-169(e) of Article III of Chapter 18 of the Boynton Beach Code of
163 Ordinances is hereby amended as follows:
164
165 (e) Separation from service.
165
167 (1) The vesting period for members hired on or after October 1, 2016, is ten years. The
168 vesting period for members who were hired before October 1, 2016, and terminated
4
S:\CA\Ordinances\Pension\AMENDMENT_TO_ADD_20I9_CBA_AND_TRUST_AS_BENEFICIARY_(00146793-2xbc 171)(2nd
Reading)Docx
169 after October 1, 2020, is five years of service. If a member leaves the service of the
170 city before vesting, such member shall be entitled to a refund of all of his or her
17 . contributions made to the fund, without interest.
172 (2) Benefit commencement date for ten-year vesting.
17 a,. Police Officers hired before October 1, 2019 and on or after October 1,
174 2016: If any member who had been in the service of the city for at least ten years
17$ elects to leave his or her accrued contributions in the fund, such police officer
176 upon attaining age 50 years or more(without reaching what would have been 20
17'7 years of service had he or she not terminated his or her employment)may receive
178 an early retirement benefit at the actuarial equivalent of the amount of such
179 retirement income otherwise payable to him or her at early retirement or upon
180 attaining what would have been normal retirement had he or she not terminated
18 his employment, such police officer may receive his or her accrued normal
18? retirement benefit.
18 12. Police Officers hired on or after October 1, 2019: If any member who had
184 been in the service of the city for at least ten years elects to leave his or her
185 accrued contributions in the fund,such police officer upon attaining age 50
186 years or more (without reaching what would have been 25 years of service
187 had he or she not terminated his or her employment) may receive an early
188 retirement benefit at the actuarial equivalent of the amount of such
189 retirement income otherwise payable to him or her at early retirement or
190 upon attaining what would have been normal retirement had he or she not
191 terminated his employment, such police officer may receive his or her
197 accrued normal retirement benefit.
193
194 (3) Benefit commencement date for five-year vesting. If any member who had been in the
193 service of the city for at least five years elects to leave his or her accrued contributions in the
19 5 fund, the police officer upon attaining age 55 with ten or more years of service (had he or she
19 7 not terminated employment) or reaching what would have been 20 years of service (had he or
19 3 she not terminated his or her employment), mayreceive the accrued normal retirement
19) benefit. The member may receive the benefits payable in the normal form or any option
20) available under Section 18-170.
201
20?
203 Section 6. Section 18-174 of Article III of Chapter 18 of the City of Boynton Beach
204 Code is amended as follows:
203
206 Sec. 18-174. Miscellaneous.
207 ****
203 (I) Required distributions.
20) (1) In accordance with section 401(a)(9)of the Internal Revenue Code, all benefits
21) under this plan will be distributed, beginning not later than the required beginning
211 date set forth below, over a period not extending beyond the life expectancy of the
212 member or the life expectancy of the member and a beneficiary.
213
5
S:\CA\Ordinances\Pension\AMENDMENT_TO_ADD_2019_CBA_AND_TRUST_AS_BENEFICIARY_(00146793-2xbc 171)(2nd
Reading).Docx
214 (2) Any and all benefit payments shall begin by the later of:
215 a. April 1 of the calendar year following the calendar year of the member's retirement
216 date; or
217 b. April 1 of the calendar year following the calendar year in which the member attains
213 age 72, provided the member has not reached age 70.5 by December 31,2019.
219
220 (3) If an employee dies before his or her entire vested interest has been distributed to him
221 or her,the remaining portion of such interest will be distributed at least as rapidly as provided
222 for under this plan.
223
224
225 Section 7. Subsections 18-175(a) and (1) of Article III of Chapter 18 of the City of
22 5 Boynton Beach Code is amended as follows:
22 7
22 3 Sec. 18-175. Deferred retirement option plan
22? (a) A deferred retirement option plan ("DROP") is hereby created.
231, (1) Members hired on and before September 30,2019 who elect to participate
231 in the DROP are subject to the DROP terms as provided for in this Section
23 2 18-175.
233 (2) Members hired on and after October 1, 2019 who elect to participate in
231 the DROP are subject to the DROP terms as provided for in Section 18-
235 300 of the City of Boynton Beach Code.
23 5
237 * * *
23 3 (1) Death benefits-If an employee shall die during participation in the DROP, a
23? survivor benefit shall be payable in accordance with the form of benefit chosen
24) at the time of entry into the DROP.
241 (1) If a DROP Participant dies with a DROP balance in the Pension
242 Fund, then the entire balance of the DROP account shall be converted to
243 the name of the beneficiary, designated on a form provided by the board
244 of trustees.
245 a. If the designated beneficiary is the surviving spouse, the
245 _ i . 1 u . • 111'1 A . I 1 • 'II 1 • . • 0
247 under Internal Revenue Code Section 401(a)(9) and the regulations
248 thereunder,
249 b. If the designated beneficiary is a non-spouse beneficiary,
25) then the distribution must be made within 5 years of the DROP
251 participant's death.
252 c. If the beneficiary is a trust or the DROP participant's
253 estate,the balance must be paid out of the Fund in a lump sum.
254
6
S:\CA\Ordinances\Pension\AMENDMENT_TO_ADD_2019_CBA_AND_TRUST_AS_BENEFICIARY_(00146793-2xbc 171)(2nd
Reading).Docx
25 5 (2)If a DROP Participant fails to designate a beneficiary, or if the
256 beneficiary predeceases the DROP Participant, the entire balance shall be
257 converted, in the following order, to the name or names of:
25 3
259 a. The DROP Participant's surviving children on a pro rata basis;
260 b. If no children are alive, the DROP Participant's spouse;
261 c. ILuo spouse is alive, the DROP Participant's surviving parents on a
262 pro rata basis; or
265 d. If none are alive, the estate of the DROP Participant. The accounts
264 which are converted to the names of the beneficiaries shall have the
265 right to name a successor beneficiary. This option is not available to
266 a trust,.
267
263
269 [THE REMAINDER OF SECTION 18-175 IS UNCHANGED]
27)
271 Section 8. It is the intention of the City Commission of the City of Boynton Beach
272 that the provisions of this Ordinance shall become and be made a part of the Code of Ordinances
273 of the City of Boynton Beach Florida The Sections of this ordinance may be renumbered re-
274 lettered and the word Ordinance may be changed to Section Article or such other word or phrase
275 in order to accomplish such intention.
275
277 Section 9. All Ordinances or parts of Ordinances Resolutions or parts of Resolutions in
273 conflict herewith be and the same are hereby repealed to the extent of such conflict. If any
279 clause section or other part or application of this Ordinance shall be held by any court of
28) competent jurisdiction to be unconstitutional or invalid such unconstitutional or invalid part or
281 application shall be considered as eliminated and so not effecting the validity of the remaining
28? portions or applications remaining in full force and effect.
283
281 Section 10. This Ordinance shall take effect when the following conditions precedent
285 to the adoption of this Ordinance have occurred.
285 (a) the City Commission has received and has accepted a report establishing the actuarial
287 soundness of these amendments or a letter of opinion from the Plan Actuary that the amendment
283 has no actuarial impact; and
28)
29) (b) the Ordinance and impact statement have been sent to the State of Florida Division of
291 Retirement.
292
293 .,
294 FIRST READING THIS s, DAY OF 0101 ,2020.
295
7
S:\CA\Ordinances\Pension\AMENDMENT_TO_ADD_2019_CBA_AND_TRUST_AS_BENEFICIARY_(00146793-2xbc 171)(2nd
Reading).Docx
295
297 SECOND,FINAL READING and PASSAGE THIS ? I DAY OF !Vlt&t ,
293 2020.
293
30) CITY OF BOYNTON BEACH, FLORIDA
301
302 YES NO
303
304 Mayor—Steven B. Grant ✓
305
305 Vice-Mayor—Ty Penserga
307
303 Commissioner—Justin Katz ✓-
30?
31) Commissioner—Woodrow L. Hay ✓
311
312 Commissioner—Christina L. Romelus
313
314
315 VOTE
315 ATTEST:
317
318
31?
32: C tal Gibson, MM I
321 City Clerk
322
323
324 (Corporate Seal)
325
°V;.•
L O '
. .
4 ,
8
S:\CA\Ordinances\Pension\AMENDMENT_TO_ADD_2019_CBA_AND_TRUST_AS_BENEFICIARY_(00146793-2xbc 171)(2nd
Reading).Docx