22-021 1 ORDINANCE 22-021
2
3 AN ORDINANCE OF THE CITY OF BOYNTON BEACH FLORIDA
4 AMENDING SECTION 18-300 CREATION OF CONSOLIDATED
5 DEFERRED RETIREMENT OPTION PLAN TO EXCLUDE POLICE
6 OFFICERS AND FIREFIGHTERS AND TO UPDATE FOR RECENT
7 CHANGES TO THE IRS CODE; PROVIDING FOR CODIFICATION
8 CONFLICT, SEVERABILITY, AND AN EFFECTIVE DATE.
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10 WHEREAS, the Police and Fire Pension Plans instituted an eight (8) year DROP; and
11 WHEREAS, references to those positions covered under this plan need to be removed;
12 and
13 WHEREAS, changes to the IRS Code require updates to the City's Code.
14 NOW, THEREFORE, BE IT ORDAINED BY THE CITY COMMISSION OF THE CITY OF
15 BOYNTON BEACH, FLORIDA:
16 Section 1. The foregoing "WHEREAS" clauses are hereby certified as being true and
17 correct and are incorporated herein by this reference.
18 Section 2. Section 18-300 of Article XI of Chapter 18 of the Boynton Beach Code of
19 Ordinances is hereby amended as follows:
20 ARTICLE XI— DEFERRED RETIREMENT OPTION PLAN
21 Sec. 18-300. Creation of consolidated deferred retirement option plan.
22 (a) A city employee deferred retirement option plan ("DROP") is hereby created,
23 amending, implementation, all conflicting provisions in existing DROP plans for general
24 employees, police officer employee's, and fire/rescue employees.
25 (b) Employees who reach eligibility for normal service retirement in the employee's
26 retirement plan may elect to enter DROP.
27 (c) An employee may elect to participate in the deferred retirement option plan
28 ("DROP") provided they make the election no later than 30 days after reaching their
29 normal retirement date. Notwithstanding the foregoing, upon enactment of this section,
30 employees who have reached normal retirement date and did not enter DROP may make
31 their initial election to participate in the DROP no later than 90 days after the
32 implementation date of this section.
Remove Police&Fire from Consolidated DROP-Ord
33 (d) An election to participate in the DROP plan is irrevocable.
34 (e) Employees may elect to participate by submitting an election to enter DROP to the
35 city's Human Resource Department ("Department") on a form available from the
36 Department for that purpose. On receipt of the election to enter DROP, the Department
37 will notify the administrator of the pension plan in which the employee participates.
38 (f) Participation in the DROP must be exercised within the first 30 years of combined
39 credited service{25 for law enforcement officers).
40 (g) An employee shall not participate in the DROP for more than five years.
41 (h) Upon an employee's election to participate in the DROP, the employee shall cease
42 to be an employee of the retirement plan and is precluded from accruing any additional
43 benefit under the Pension Fund. For all fund purposes, the employee becomes a retiree
44 (the term retiree and employee herein are synonymous for employees who elect to enter
45 DROP). The amount of credited service and final average salary freeze as of the date of
46 entry into the DROP.
47 (i) Accumulated, unused sick (over 120 hours) and vacation leave (over 120 hours)
48 shall be deemed cashed out and included in the compensation calculation; provided,
49 however, that a minimum balance of 120 hours of sick leave and 120 hours of vacation
50 leave shall be maintained by the employee and excluded from this calculation. The
51 retained leave balance, including any additions, shall be paid to the employee at the
52 conclusion of DROP participation and separation from service.
53 (j) DROP plan account shall be established for each employee who elects to
54 participate. These are not actual accounts but nominal accounts and balances are kept
55 as a bookkeeping process.
56 (k) Payment shall be made into the employee's DROP account as if the employee had
57 retired from the employ of the city. Payments into the DROP will be made monthly over
58 the period the employee participates in the DROP, up to a maximum of 60 months, or,
59 pursuant to 1101(A)(9)of the Internal Revenue Code, payments age 70.5,whichever occurs
60 f4fst.
61 (I) An employee's participation in the DROP shall terminate at the end of five years
62 and the employee shall separate from city employment. Upon entering the DROP, an
63 employee shall file with the Board a non-revocable letter of resignation from city
64 employment. The binding letter of resignation shall establish a deferred termination date
65 in accordance with the limitations of this DROP which may be amended if an employee
66 wished to separate from employment earlier than the deferred termination date.
67 (m) All interest shall be credited to the employee's DROP account less any
68 outstanding loan balances on a quarterly basis with quarterly statements provided. In the
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Remove Police&Fire from Consolidated DROP-Ord
69 event that an a employee dies while in the DROP, interest shall be pro-rated to the last
70 business day of the month preceding the death of the employee.
71 (n) During the period of the employee's participation in the DROP plan, the
72 employee's normal retirement benefit shall be accounted for and paid into the
73 employee's DROP plan account.
74 (o) The employee's DROP plan account shall be invested with the retirement plan
75 assets and credited with interest equal to the overall net (earning less costs) investment
76 rate of return on the retirement plan assets during the period of the employee's
77 participation in the DROP plan. Notwithstanding fund performance, the crediting rate
78 will be no less than 0% and no more than 8%.
79 (p) At the conclusion of the retiree's participation in the DROP plan, and as a condition
80 of participating in such plan, the retiree will continue retirement and terminate city
81 employment. The retiree will thereafter receive a normal monthly retirement benefit at
82 the same rate as previously calculated upon entry into the DROP, but the monthly
83 amount will be paid to the retiree and no longer accounted for in the DROP plan account.
84 If the employee does not terminate participation in the DROP plan at the end of the 60-
85 month maximum participation period, no earnings will be credited on the DROP balance
86 and no further DROP deposits will be made.
87 (q) No amount can be paid from the retirement plan until the DROP employee
88 terminates employment.
89 (r) Upon termination, the retiree's DROP plan account will thereafter be distributed to
90 the retiree in a cash lump sum, which can be rolled over or paid in cash unless the retiree
91 elects an alternative distribution (also known as a rollover). Direct rollover may be
92 accomplished by any reasonable means determined by the Pension Board.
93 (s) If a retiree dies before distribution of the retiree's DROP plan account commences,
94 the account balance shall be distributed paid to the retiree's designated beneficiary in a
95 lump sum, which can be rolled over or paid in cash at the beneficiary's discretion.
96 (t) Distribution of an employee's DROP plan account shall begin as soon as
97 administratively practicable following the employee's termination of employment. The
98 employee must elect the distribution within, but in no event later than, 45 days following
99 the employee's termination date. If the employee does not timely request the withdrawal
100 of the asset in the DROP plan, no further earnings will be credited on the DROP balance.
101 (u) Any form of payment selected by the employee must comply with the minimum
102 distribution requirements of the IRC 401(A)(9), which states that payments must
103 commence by age 72, provided that the retiree did not reach age 70 1/2 before
104 December 31, 2019.
105
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07 participants shall provide written notice of their intent to extend their DROP participation. The
08 - .- -- - - e • - : • -- - . shall expire thirty ( e -. - - - - = - -.s.-: - -
09 ordinance.
110 Section 3. It is the intention of the City Commission of the City of Boynton Beach that
111 the provisions of this Ordinance shall become and be made a part of the Code of Ordinances of
112 the City of Boynton Beach Florida.The Sections of this ordinance may be renumbered re-lettered
113 and the word Ordinance may be changed to Section Article or such other word or phrase in
114 order to accomplish such intention.
115 Section 4. All Ordinances or parts of Ordinances Resolutions or parts of Resolutions in
116 conflict herewith be and the same are hereby repealed to the extent of such conflict.If any clause
117 section or other part or application of this Ordinance shall be held by any court of competent
118 jurisdiction to be unconstitutional or invalid such unconstitutional or invalid part or application
119 shall be considered as eliminated and so not effecting the validity of the remaining portions or
120 applications remaining in full force and effect.
121 Section 5. This Ordinance shall become effective immediately upon adoption
122 provided that the changes approved herein are effective nunc pro tunc to October 1, 2022.
123 FIRST READING THIS / ( QDAY OF Ltf, awl , 2022.
124i
125 SECOND, FINAL READING and PASSAGE THIS / DAY OF �L- ol6( 2022.
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127 CITY OF BOYNTON BEACH, FLORIDA
128 YES NO
129 j
130 Mayor-Ty Penserga t/
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132 Vice Mayor-Angela Cruz
133 .,./-
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%134 Commissioner-Woodrow L. Hay
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136 Commissioner-Thomas Turkin
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1-7-
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-j138 Commissioner-Aimee Kelley
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139
140 VOTE O
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142
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144 ATTEST:
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147 Mayle• - Jesus, MPA MC Ty P--
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151 (Corporate Seal) 1,:t-f(' T
152 SEAL'
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INCORPORATED
153 . 1920 : Michael D. Cirullo, Jr.
154 City Attorney
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