06-027
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1 ORDINANCE NO. 006- 0; 7
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3 AN ORDINANCE OF THE CITY OF BOYNTON BEACH,
4 FLORIDA AMENDING CHAPTER 18, ARTICLE II, SECTION 4
5 OF THE CODE OF ORDINANCES OF THE CITY OF BOYNTON
6 BEACH, FLORIDA TO CREATE SECTION 18-128, ENTITLED
7 "ELECTIVE BENEFITS;" CODIFYING THE ELECTIVE
8 BENEFITS AVAILABLE TO MEMBERS OF THE GENERAL
9 EMPLOYEES PENSION PLAN; PROVIDING FOR
10 CODIFICATION; PROVIDING FOR CONFLICT; PROVIDING
II FOR SEVERABILITY; AND PROVIDING AN EFFECTIVE DATE.
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13 WHEREAS, certain elective benefits have been available to the participants of the
14 General Employees' Pension Plan (the "Plan") of the City of Boynton Beach since December
15 1998; and
l6 WHEREAS, the Board of Trustees of the Plan (the "Board") recommends that such
17 elective benefits be codified so as to ensure all participants have adequate notice of such elective
18 benefits and the regulations applicable to their application; and
19 WHEREAS, the City Commission adopted Ordinance No. 000-75 on January 2,
20 2001 which provided a pre-retirement death benefit for General Employees as set forth in
21 ~18-115 of the City Code of Ordinances; and
22 WHEREAS, since the adoption of Ordinance No. 000-75, the City has ceased
23 offering Option 3 of the elective benefits entitled "Pre-Retirement Monthly Survivor
24 Benefit;" and
CODING:
Words in strike through type are deletion from existing law;
Words in underscored type are additions.
Amended between 1 sl and 2nd reading. Amendments are shown in bold type.
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WHEREAS, the City Commission has reviewed the recommendations of the Board and
2 finds the amendments to the Plan proposed by the Board as provided herein to be in the best
3 interests of the Plan, its members and the City;
4 NOW, THEREFORE, BE IT ORDAINED BY THE CITY COMMISSION OF THE
5 CITY OF BOYNTON BEACH, FLORIDA, THAT:
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Section 1.
The foregoing "WHEREAS" clauses are hereby certified as being true and
7 correct and are incorporated herein by this reference.
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Section 2.
The City Commission of the City of Boynton Beach hereby creates
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Chapter 18, Article II, Division 4, 918-128 of the Code of Ordinances of the City of Boynton
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Beach, Florida, entitled "Elective Benefits" as follows:
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~18-128
Elective Benefits.
(a) Elective benefits are benefits offered to the members of this Plan and
are voluntary elections, the costs of which are borne entirely by the member through
payroll deductions during their employment with the City. Such deductions are
taxable dollars at the time the deduction is made. A member may voluntarily elect to
participate in those elective benefits available in order to supplement and enhance
their retirement benefits provided pursuant to this Plan.
(b) Open Enrollment. A member may elect to enroll or cancel an
elective benefit only during the open enrollment period. The open enrollment period
shall occur in September of each year. Once an elective benefit is cancelled, any
contributions made will remain in the Plan until the member is no longer actively
employed. Upon such separation from service, contributions shall be reimbursed to
the member, except as otherwise provided in this section. No interest earnings will be
applicable to the premiums contributed. The cancellation of such elective benefit is
irrevocable and the member may not re-enroll for such elective benefit in the future.
(c) Costs. The costs for all elective benefits are borne by the member
through payroll deductions during employment with the City. The cost for each
CODING:
Words in strike through type are deletion from existing law;
Words in underscored type are additions.
Amended between 1 sl and 2nd reading. Amendments are shown in bold type.
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benefit shall be actuarially determined on an annual basis based upon the premiums to
fund the various options selected. Any change in rates associated with the elected
benefit options selected is passed on to the participant.
(d) In the event of death before retirement of any participant, all premiums
paid shall be refunded to the beneficiary. If the employee was eligible for normal
retirement and the retirement annuity option had already been selected by the
employee, the deceased member's earned pension amount will be actuarially reduced
to a ioint and survivor form and two -thirds (2/3) of this amount will be paid to the
survivor for their lifetime. For the 25 Year Retirement at Any Age benefit option, the
retirement factor used shall be the factor which provides the most benefit to the
employee.
(d) Elective Benefits. There are four (4) elective benefits options
available. A member may select as many as they desire, but will be required to pay
for each option selected through a payroll deduction. A member may select either the
Health Insurance Subsidy or the Health Insurance Subsidy with 2% per year COLA.
but not both. Once either of the Health Insurance Subsidy benefit options is selected,
the member may not change to the other form of Health Insurance Subsidy benefit
option. The elective benefit options available are as follows:
CODING:
(1)
Option lA - Health Insurance Subsidy.
(a) The Health Insurance Subsidy will provide a monthly
benefit up to $200 per month upon normal retirement. In the event of
death prior to retirement, where the member is eligible for normal
retirement and the retirement annuity option has been elected by the
employee, the $200 per month will be actuarially reduced to a ioint
and survivor form of benefit and two-thirds (2/3) of this amount will
be paid to the survivor for their lifetime.
(b) The amount to be received for the Health Insurance
Subsidy at retirement is based on years of contributions by the
employee. The full benefit of $200 per month is based upon twenty-
five (25) years of employees contributions. A prorated benefit will be
provided for years of contributions less than twenty-five (25) years.
Illustration for prorated Health Insurance Subsidy:
Member Age (ci) Hire
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Words in strike through type are deletion from existing law;
Words in underscored type are additions.
Amended between 1 st and 2nd reading. Amendments are shown in bold type.
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CODING:
Member Age @ Retirement 55
Years of Premium Payment 5 (5vrsl25vrs =20%)
Monthly Benefit $40.00 ($200 subsidy x 20%)
Based upon this illustration, the employee contributed for five (5)
years which represents 5125, or twenty percent (20%) of the full
benefit calculated period. Therefore, the Health Insurance Subsidy at
normal retirement would be 20% of $200, or $40.
(2) Option IB - Health Insurance Subsidy with 2% per year
COLA
(a) The health Insurance Subsidy with 2% Cost of Living
Adiustment ("COLA") will provide an initial monthly benefit up to
$200 per month at normal retirement in 1999. In the event of death
prior to retirement, where the member is eligible for normal
retirement, and the retirement annuity option has been selected, the
$200 per month will be actuarially reduced to a ioint an survivor form
of benefit and two-thirds (2/3) of this amount will be paid to the
survivor for their lifetime. The $200 per month will be indexed by two
percent (2%) per year, compounded for all affected members.
(b) The amount to be received for the Health Insurance
Subsidy with 2% COLA at retirement is based upon years of
contributions by the employee. The full benefit of the indexed
insurance subsidy per month is based upon twenty-five (25) years of
employee contributions. A prorated benefit will be provided for years
of employee contributions less than twenty-five (25) years.
Illustration for prorated Health Insurance Subsidy with 2% COLA:
Member Age @ Hire
30
Member Age (a) Retirement
55
Years of Premium Payment
8 (8vrsl25vrs =32%)
$64.00 ($200 subsidy x 32%)
1 st Year Monthly Benefit
2nd Year Monthly Benefit
$65.28 ($204 subsidy x 32%)
Words in strike through type are deletion from existing law;
Words in underscored type are additions.
Amended between 1 st and 2nd reading. Amendments are shown in bold type.
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(3) Option 2 - Cost-of-Living Adjustment ("COLA"). The Cost of
Living Adjustment ("COLA") provides a five percent (5%) deferred COLA
commencing five (5) years after retirement and compounded with additional
five percent (5%) increases every three (3) years thereafter. Spouse benefits,
if elected, would also be eligible for the COLA, but the actuarial equivalent
factors at retirement for conversion to the joint and two-third survivor benefit
would need to be updated. A prorated benefit will be provided for years of
employee contributions less than twenty-five (25) years.
Illustration of the Cost-of-Living Adjustment (COLA):
Member Age @ Hire
50
Member Age (a) Retirement
62
Years of Premium Payment
12 (l2vrs/25vrs = 48%)
COLA Benefit
2.4% (5% COLA x 48%)
An employee that made full contributions for this elective benefit
option would receive a 5% COLA. Since the illustrated employee
contributed 12 years toward the COLA it has been prorated to 2.40%
which represents 48% of the fully contributed percentage.
(4) Option 3 Pre Retirement Monthly Survivor Bencfit. The Pre
Retirement Monthly Survivor Benefit ',vill provide a benefieiary
having an insurable interest in the employee's life with the greater of
fifty percent (50%) of the aeemed bencfit or twenty (20~<.) of the final
year's annual rate of pay. This benefit is effeeti'lely a one year
renewable term insurance benefit. Thc benefit is not prorated, b\:lt is
only in effect while prcmiums are being paid. The 'laluc of the
member's contributions is llsed to provide this coverage and is
thereforc non refundable upon the mcmbers separation from servicc.
Illustration of the Prc Retiremcnt Survivor Benefit:
Member Age @ Hire
25
Member '^1ge @ Retirement
47
Years of Premium Pa)'fRent
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CODING:
Words in strikc through type are deletion from existing law;
Words in underscored type are additions.
Amended between 1 st and 2nd reading. Amendments are shown in bold type.
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./\'lerage Pay While
Contributing
$24,000
Percentage Cost per year
.92%
.^..ggregate Premium
$1,325
50% of .\nnual Accrued Benefit
$6,831 ($13,662 J( 50~q
20% of Final Year A..~.nual Rate of Pay
$5,280 ($26,100 J( 20~q
Monthly Survivor Benefit
$569 ($6,ln li12mos.)
(5) 25 Year Service Requirement (any age). The 25 Year Service
Requirement (any age) would allow the employee to retire with twenty-five
(25) years of service. regardless of age. This option will provide an increase
in the early retirement factors based upon years contributed. The cost will be
actuarially adiusted on an annual basis. A prorated benefit will be provided
for years of employee contributions less than twenty-five (25) years. The
factors used for retirement based upon years of service are as follows:
25 years
26 years
27 years
28 years
29 years
30 years
72.51 % of calculated benefit
76.91 % of calculated benefit
81.81 % of calculated benefit
87.36% of calculated benefit
93.41 % of calculated benefit
100.00% of calculated benefit
Illustration of the 25 Year Service Requirement ( any Age):
Member Age @ Hire
20
Member Age @ Retirement
45 (25 vrs of service)
Years of Premium Payment
5 (5vrsl25vrs = 20%)
Average Pay While
Contributing
$29.700
Percentage Cost per year
1.89%
CODING:
Words in strike tmough type are deletion from existing law;
Words in underscored type are additions.
Amended between 1 st and 2nd reading. Amendments are shown in bold type.
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Aggregate Premium
$2.807
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ER Factor
72.5l%
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Adiusted ER Factor 78.0l % (27.49 diff(al, 20%)
(Adiusted Factor of 72.51 % + Differential of (100.00-72.51) x 20%)
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Section 3.
City Administration is hereby directed to update the benefits booklet
6 published to the General Employees evidencing the available elective benefits in conformity
7 with the terms of the elective benefits as provided herein.
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Section 4.
The City Commission hereby declares that the elective benefits
9 available to General Employees are as set forth herein above and further repeal any other
10 benefits not expressly included within this ordinance.
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Section 5.
It is the intention of the City Commission of the City of Boynton Beach
12 that the provisions of this Ordinance shall become and be made a part of the Code of Ordinances
13 of the City of Boynton Beach, Florida. The Sections of this ordinance may be renumbered,
14 re-lettered and the word "Ordinance" may be changed to "Section", "Article" or such other word
15 or phrase in order to accomplish such intention.
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Section 6.
All Ordinances or parts of Ordinances, Resolutions or parts of Resolutions
17 in conflict herewith be and the same are hereby repealed to the extent of such conflict.
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Section 7.
If any clause, section, or other part or application of this Ordinance shall
19 be held by any court of competent jurisdiction to be unconstitutional or invalid, such
20 unconstitutional or invalid part or application shall be considered as eliminated and so not
21 effecting the validity of the remaining portions or applications remaining in full force and effect.
CODING:
Words in strike through type are deletion from existing law;
Words in underscored type are additions.
Amended between 15t and 2nd reading. Amendments are shown in bold type.
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Section 8.
This Ordinance shall become effective immediately upon its passage and
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adoption.
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FIRST READING this dlsf day of 1)1'/u:~ ,2006.
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SECOND, FINAL READING and PASSAGE this ~ day of ~~
2006.
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CITY OF BOYNTON BEACH, FLORIDA
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Mayor /" ---. ~ ;J.. _ \
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ATTEST:
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Commissioner
(CORPORATE SEAL)
CODING:
Words in strike through type are deletion from existing law;
Words in underscored type are additions.
Amended between 1 st and 2nd reading. Amendments are shown in bold type.
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