19-037 l ORDINANCENO. 19-037
AN ORDINANCE OF THE CITY COMMISSION OF THE
3 CITY OF BOYNTON AMENDING CHAPTER 18,
4 PENSIONS AND RETIREMENT, OF THE CODE OF
i ORDINANCES TO CREATE A NEW ARTICLE XI,
D "DEFERRED RETIREMENT OPTION PLAN"PROVIDING
7 FOR UNIFORM DEFERRED RETIREMENT OPTION
3 PLAN BENEFITS FOR ALL CITY EMPLOYEES;
AMENDING CONFLICTING PROVISION OF DROP
1) BENEFITS CONTAINED IN THE GENERAL EMPLOYEE,
1l FIRE AND POLICE PENSION PLANS; PROVIDING FOR
1 t DELAYED IMPLEMENTATION TO ACCOMMODATE
13 COLLECTIVE BARGAINING OR WAIVER OF
14 BARGAINING; PROVIDING FOR CODIFICATION AND
1 i AN EFFECTIVE DATE.
1 i WHEREAS,it is the intent of the City Commission to reform City employee retirement
17 benefits to achieve, to the extent allowed by law, a sustainable uniform level of retirement
13 benefits for current and future City employees; and
1 3 WHEREAS, employees of the City and their respective unions have promoted a
2) deferred retirement option plan as a cost neutral retirement benefit which allows an employee
21 to accumulate a substantial retirement nest egg, payable at time of separation from service, by
2? providing an investment tool that has the potential to earn interest at a rate well in excess of
2 3 traditional savings and money market rates of return; and
2 t WHEREAS, there currently exist deferred retirement drop plans with different
2 i provision for general employees, fire/rescue employees, and police employees; and
2; WHEREAS, the City Commission desires to create a uniform deferred retirement
2 7 option plan for all City employees without regard to the nature of their job position so as to
2 3 demonstrate the City Commission's commitment to equal retirement security of all City
2) employees.
3) NOW THEREFORE,THE CITY COMMISSION OF THE CITY OF BOYNTON
31 BEACH HEREBY ENACTS THE CITY'S CONSOLIDATED DEFERRED
32 RETIREMENT OPTION PLAN AS FOLLOWS:
33 Section 1 A new section 18-300 of Article XI of Chapter 18 of the Code of
3 Ordinances is created as follows.
3. Article XI DEFERRED RETIREMENT OPTION PLAN.
3: Section 18-300 Creation of Consolidated Deferred Retirement Option Plan
3 i A. A Cityemployee deferred retirement option plan ("DROP") is hereby created,
3 amending, implementation, all conflicting provisions in existing DROP plans for
3 M general employees, police officer employees, and fire/rescue employees.
41 B. Employees who reach eligibility for normal service retirement in the employee's
Oil retirement plan may elect to enter DROP.
47 C. An Employee may elect to participate in the Deferred Retirement Option Plan
41 ("DROP") provided they make the election no later than 30 days after reaching their
4!1 normal retirement date. Notwithstanding the foregoing, upon enactment of this
4i Ordinance employees who have reached normal retirement date and did not enter DROP
4,1 may make their initial election to participate in the DROP no later than ninety(90)days
4i after the implementation date of this ordinance.
4 D. An election to participate in the DROP plan is irrevocable.
4: E. Employees may elect to participate by submitting an election to enter DROP to the
5 City's Human Resource Department ("Department") on a form available from the
51 Department for that purpose. On receipt of the election to enter DROP the Department
5 will notify the administrator of the pension plan in which the employeeparticipates.
5 F. Participation in the DROP must be exercised within the first 30 years of combined
5i credited service (25 for law enforcement officers).
51 G. An employee shall not participate in the DROP for more than five years.
5; H. Upon an employee's election to participate in the DROP, the employee shall cease to
5/ be an employee of the retirement plan and is precluded from accruing any additional
51 benefit under the Pension Fund.For all fund purposes,the employee becomes a retiree'.
5: The amount of credited service and final average salary freeze as of the date of entry
61' into the DROP.
611 I. Accumulated, unused sick (over 120 hours) and vacation leave (over 120 hours) shall
6! be deemed cashed out and included in the compensation calculation;provided however,
6: that a minimum balance of 120 hours of sick leave and 120 hours of vacation leave shall
'The term retiree and employee herein are synonymous for employees who elect to enter DROP.
6, be maintained by the employee and excluded from this calculation. The retained leave
6, balance, including any additions, shall be paid to the employee at the conclusion of
6: DROP participation and separation from service.
6
6: J. DROP plan account shall be established for each employee who elects to participate.
6' These are not actual accounts but nominal accounts and balances are kept as a
7, bookkeeping process.
7
7. K. Payment shall be made into the employee's DROP account as if the employee had
7 retired from the employ of the city.Payments into the DROP will be made monthly over
7, the period the employee participates in the DROP, up to a maximum of 60 months or,
7' pursuant to 401(A)(9) of the Internal Revenue Code payments age 70.5, whichever
7: occurs first.
7 L. An employee's participation in the DROP shall terminate at the end of five years and
7: the employee shall separate from City employment. Upon entering into the DROP, an
7• employee shall file with the Board a binding non-revocable letter of resignation from
81 city employment. The binding letter of resignation shall establish a deferred termination
8 date in accordance with the limitations of this DROP which may be amended if an
8. employee wished to separate from employment earlier than the deferred termination
8 date.
8, M. All interest shall be credited to the employee's DROP account less any outstanding loan
8' balances on a quarterly basis with quarterly statements provided. In the event that a
8: employee dies while in the DROP, interest shall be pro-rated to the last business day of
8 the month preceding the death of the employee.
8: N. During the period of the employee's participation in the DROP plan, the employee's
8• normal retirement benefit shall be accounted for and paid into the employee's DROP
91 plan account.
9 O. The employee's DROP plan account shall be invested with the retirement plan assets
9. and credited with interest equal to the overall net(earning less costs) investment rate of
9 return on the retirement plan assets during the period of the employee's participation in
9, the DROP plan. Notwithstanding Fund performance, the crediting rate will be no less
9' than 0%and no more than 8%.
9: P. At the conclusion of the retiree's participation in the DROP plan, and as a condition of
9 participating in such plan, the retiree will continue retirement and terminate City
9: employment. The retiree will thereafter receive a normal monthly retirement benefit at
9• the same rate as previously calculated upon entry into the DROP but the monthly
los amount will be paid to the retiree and no longer accounted for in the DROP plan account.
10 If the employee does not terminate participation in the DROP plan at the end of the sixty
10. (60) month maximum participation period, no earnings will be credited on the DROP
10 balance and no further DROP deposits will be made.
104 Q. No amount can be paid from the retirement plan until the DROP employee terminates
10• employment.
10: R. Upon termination, the retiree's DROP plan account will thereafter be distributed to the
10 retiree in a cash lump sum, which can be rolled over or paid in cash unless the retiree
10: elects an alternative distribution (a/k/a rollover). Direct rollover may be accomplished
10• by any reasonable means determined by the Pension Board.
11 s S. If a retiree dies before distribution of the retiree's DROP plan account commences, the
11 account balance shall be distributed paid to the retiree's designated beneficiary in a lump
11. sum, which can be rolled over or paid in cash at the beneficiary's discretion.
11 T. Distribution of an employee's DROP plan account shall begin as soon as
11, administratively practicable following the employee's termination of employment. The
11' employee must elect the distribution within but in no event later that 45 days following
11: the employee's termination date. If the employee does not timely request the
11 withdrawal of the asset in the DROP plan, no further earnings will be credited on the
11: DROP balance.
11• U. Any form of payment selected by the employee must comply with the minimum
121 distribution requirements of the IRC 401(A)(9) e.g., payments must commence by age
12 70 Y2.
12. Section 2 Following implementation as hereinafter described, all existing City
12 deferred retirement option plans, to the extent they conflict with the uniform terms of DROP
12, established herein are deemed amended conform with this Ordinance. Non-conflicting
12• provision of existing DROP provisions will survive adoption of this Ordinance.
12: Section 3. 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
12: of the City of Boynton Beach, Florida, and that the Sections of this Ordinance may be
12• renumbered, re-lettered and the word "Ordinance" may be changed to "Section," "Article", or
131 such other word or phrase in order to accomplish such intention.
13 Section 4. If any clause, section,or other part or application of this Ordinance shall
13. be held by any court of competent jurisdiction to be unconstitutional or invalid, such
13 unconstitutional or invalid part or application shall be considered as eliminated and so not
13, affecting the remaining portions or applications remaining in full force and effect.
13• Section 5. All Ordinances or parts of Ordinances, Resolutions or parts of
13: Resolutions in conflict herewith be and the same are hereby repealed to the extent of such
13 conflict.
13: Section 6. Copies of this Ordinance and the actuarial impact statement regarding
13• the proposed plan changes set forth herein shall be furnished to the State of Florida Division of
141 Retirement before the last public hearing on the pension plan modifications described herein is
14 held. The actuarial statement must also indicate whether the proposed plan or proposed plan
14. change is in compliance with s. 14,Art.X of the State Constitution and those provisions of part
14 VII of chapter 112, Chapter 185 Florida Statutes, and Chapter 175 Florida Statutes.
14, Section 7. This Ordinance shall become effective immediately upon its passage and
14• adoption. Implementation of these consolidated provision for DROP benefits shall occur as
14: follows:
14 A. Effective October 1, 2019, or the date of ratification of a collective bargaining
14: agreement incorporating a reference to this Ordinance or the date of a waiver of
14• bargaining over the terms of this Ordinance,whichever occurs first,for PBA employees
151 hired on or after October 1, 2019.
15 B. Effective January 1, 2020 for non- bargaining unit employees hired on or after January
15. 1, 2020.
15 C. Effective January 1,2020,or the date of ratification of a collective bargaining agreement
15, incorporating a reference to this Ordinance or the date of a waiver of bargaining over the
15' terms of this Ordinance, whichever occurs first, for SEIU employees hired on or after
15: January 1, 2020.
15 D. Effective January 1,2020,or the date of ratification of a collective bargaining agreement
15: incorporating a reference to this Ordinance or the date of a waiver of bargaining over the
15• terms of this Ordinance, whichever occurs first, for IAFF employees hired on or after
161, January 1, 2020.FIRST READING THIS JOctober, 2019.
16 SECOND, FINAL READING AND PASSAGE this S121 day of Jpyery.122,1-, 2019.
16 CITY OF BOYNTON BEACH, FLORIDA
16 YES NO
16,
16 Mayor—Steven B. Grant v✓
16..
16 ' Vice Mayor—Justin Katz ✓
16::
161 Commissioner—Mack McCray
170
17 Commissioner—Christina L. Romelus ✓
17
17: Commissioner—Ty Penserga
17'
17. VOTE
17. ATTEST:
17'
17: C tal Gibson, MMC ` y ....
181 City Clerk *t� �"d;
18 �;� ♦ °
18, # 19 20
18: (Corporate Seal) j s '
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