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HomeMy WebLinkAboutVII (A2) First Reading of Ordinance No. 2002-25, Amending the General Employee Pension Trust Fund Agenda 11-05-2002 Item VIl A 2 jal I CITY OF OCOEE Tom loon,[hair Human Resources oeportmet GENERAL EMPLOYEE Jahn Vogl,Trave4Seu. ISO H.Loise Shore Orive Pal Cornell,Trustee Ocoee,Ft 34761 PENSION BOARD Mike Miller,Trustee Phone (407)905-3154 Ed Bishop,Trustee Fos (407)656)5741 TO: The Honorable Mayor and Members of the Commission FROM: The General Employee Pension Board Trustees DATE: November 5, 2002 REFERENCE: Amendment to General Employee Pension Trust Fund We are requesting an ordinance to amend the General Employees' Retirement Trust Fund in order to bring the plan into compliance with the Economic and Tax Relief Reconciliation Act of 2001 and to allow prior service buy-back opportunities in the plan. Actuarial review of these amendments by the plan's actuary, Foster & Foster, indicate that the changes will not impact City funding. The Plan's Board of Trustees has reviewed these changes. Based on that review, we would recommend and request approval of these amendments to the General Employees' Pension Fund by the City Commission. Attachments cc: James Gleason, City Manager Fran Diedrich, Human Resources Director FOSTER & FOSTER, INC. 6290 CORPORATE COURT, C-201 TELEPHONE FORT MYERS, FLORIDA 33919 FACSIMILE (941) 433-5500 October 10, 2002 (941 ) 481-0634 Mr. Tom Isom, Chairman Ocoee General Employees' Pension Plan 6 Delaware St. Ocoee, FL 34761 Re: Proposed Ordinance Dear Tom: In response to H. Lee Dehner's letter dated October 7, 2002, we have reviewed the proposed Ordinance, identified on page 16 as noc\ocoee\gen\09-23-02.ord, amending the Plan for compliance with the Economic Growth and Tax Relief Reconciliation Act of 2001 and have determined that its adoption will have no financial impact on the funding requirements to the program. Because the changes do not result in a financial impact on the funding requirements, it is our opinion that a formal Actuarial Impact Statement is not required in support of its adoption. When the Ordinance has been adopted, please provide a copy of this letter and the executed Ordinance to the following Bureau at the Division of Retirement: Charles Slavin, Actuary Bureau of Local Retirement Systems �� - Division of Retirement Cedars Executive Center, Bldg. C �� 2639 North Monroe Street / Tallahassee, FL 32303 If you have any questions, please let me know. � r Sincerely, - 1 raf Patrick T. Donlan PTD/nck cc: Pat Cornell, Trustee James P. Gleason, City Manager H. Lee Dehner, Board Attorney LAW OFFICES CHRISTIANSEN & DEHNER, P.A. 63 SARASOTA CENTER BLVD. SUITE 107 PHONE:(941)377-2200 sCOTr R. CHRISTIANSEN SARASOTA, FLORIDA 34240 FAX: (941)377-4836 H.LEE DEIINER October 7, 2002 Mr. James P. Gleason City Manager City of Ocoee 150 N. Lakeshore Drive Ocoee, FL 34761-2258 Re: City of Ocoee Municipal General Employees' Retirement Trust Fund Dear Jim: As directed at the last meeting of the Board of Trustees of the designated pension plan, enclosed please find a proposed ordinance for the City of Ocoee Municipal General Employees' Retirement Trust Fund which brings the plan into compliance with the Economic and Tax Relief Reconciliation Act of 2001 and adds prior service buy-back opportunities. Please set this ordinance for first reading before the City Commission. By copy of this letter, I am requesting that Ward Foster prepare the appropriate actuarial analysis and forward it to you. If you have any questions, please do not hesitate to contact me. Yours very truly, H. Lee Dehner HLD\noc Enclosure cc: Pat Cornell, with enclosure Ward Foster, with enclosure ORDINANCE NO. 2002—25 AN ORDINANCE OF THE CITY OF OCOEE, FLORIDA, RELATING TO THE CITY OF OCOEE MUNICIPAL GENERAL EMPLOYEES' RETIREMENT TRUST FUND, ADOPTED AND RESTATED IN FULL BY ORDINANCE NUMBER 96-19; AS SUBSEQUENTLY AMENDED; AMENDING SECTION 1, DEFINITIONS BY AMENDING THE DEFINITIONS OF "ACCUMULATED CONTRIBUTIONS" AND "CREDITED SERVICE; AMENDING SECTION 14, MAXIMUM PENSION; AMENDING SECTION 23, DIRECT TRANSFERS OF ELIGIBLE ROLLOVER DISTRIBUTIONS; AMENDING SECTION 25, DEFERRED RETIREMENT OPTION PLAN; ADDING A NEW SECTION 26, PRIOR GOVERNMENT SERVICE; ADDING A NEW SECTION 27, MILITARY SERVICE PRIOR TO EMPLOYMENT; PROVIDING FOR SEVER.ABILITY OF PROVISIONS; REPEALING ALL ORDINANCES IN CONFLICT HEREWITH AND PROVIDING AN EFFECTIVE DATE. SECTION 1: Auth ri . The City Commission of the City of Ocoee has the authority to adopt this ordinance pursuant to Article VIII of the Constitution of the State of Florida and Chapter 166, Florida Statutes. SECTION 2: That Ordinance No. 96-19, adopting the amended and restated City of Ocoee Municipal General Employees' Retirement Trust Fund, as subsequently amended, is hereby further amended by amending Section 1, Definitions, by amending the definition of Accumulated Contributions and the definition of Credited Service, to read as follows: Ac 1 i d Contributions means a Member's own contributions without interest. For those Members who purchase Credited Service with interest or at no cost to the System, any payment ons plicable Member contribution representing the amount ent utable representing interest and Member anyrtequiredsactuarially c on the alculated payments for the rate,_s,^"'"t for the purchase of such Credited Service, shall be included in Accumulated Contributions. Credited Service means the total number of years and fractional parts of years of service as a General Employee with Member contributions, when required, omitting intervening years or fractional parts of years when such Member was not employed by the City as a General Employee. A Member may voluntarily leave his or her contribution in the Fund for a period of five (5) years after leaving the employ of the City pending the possibility of being rehired without losing credit for the time that he or she was a Member of the System. If the Member is not reemployed within five (5) years,then the Accumulated Contributions will be returned upon written request of the Member. Upon return of his or her Accumulated Contributions, all of his or her rights and benefits under the System are forfeited and terminated. In the event that a Member of this System has also accumulated credited service in another pension system maintained by the City, or has a period or periods of previous employment as a s of pGeneral revious mploymentt for ibenefit eligibles not lculation purpos s,then such other c Service redir ted dis service shall b or e used in determining vesting as provided for in Section 8, and for determining eligibility for early or normal retirement. Such other credited service will not be considered in determining benefits under this System. Unless otherwise provided herein, only his or her Credited Service and Salary under this System on or after his or her latest date of membership in this System will be considered for benefit calculation. In addition, any benefit calculation for a Member of this System who is or 1 becomes eligible for a benefit from this System after he or she has become a member of another pension system maintained by the City, shall be based upon the Members Average Final Compensation, Credited Service and benefit accrual rate as of the date the Member ceases to be a General Employee. Thy y am w 6a..tiunal pat>of yem.,that a p,Lviuusiy sL,wd as a G..n1/4-,ak fo, .1,11w11 Gcdit.,d Se,vn.o has not bi-en othu sCTwur d fm bu,efit .akuulation purposs, shall • ❑„ muouuts actuaially dl.l,.IilI lICd Su,,h that d,c wcdithig of adniiu st,ativL uu.,ts ,Lndwcd to the D a,d in coru,cction .vhhthuT.rchas., of ycd,s of C ..dit..d 5 rvle V. the katc., of t‘.clvc(12)mouth firm t ., dfL.cti.c dab.. of-this ordu,a,6o kat >a (6) months bola tl,L 3. Pay uwut by tip,Gww,al Eu,ployw of thu,Lquuud aniuuut 311a11 hu' Uadk w iduu >ie (6) u,untlia of 1us u, lw, ,uyuost fu, u.udit aid shall hu u,adu n,on,- tamp sun,payau.ut upon ,wu,pt SECTION 3: That Ordinance No. 96-19, adopting the amended and restated City of Ocoee Municipal General Employees' Retirement Trust Fund, as subsequently amended, is hereby further amended by amending Section 14, Maximum Pension, to read as follows: SECTION 14 MAXIMUM PENSION. 1. Basic 1 imitation. Subject to the adjustments hereinafter set forth, the maximum amount of annual retirement income payable with respect to a Member under this System shall not exceed $90,000 $160,000.00. For purposes of applying the above limitation,benefits payable in any form other than a straight life annuity with no ancillary benefits shall be adjusted, as provided by Treasury Regulations, so that such benefits are the Actuarial Equivalent of a straight life annuity. For purposes of this Section, the following benefits shall not be taken into account: (1) Any ancillary benefit which is not directly related to retirement income benefits; (2) Any other benefit not required under §415(b)(2) of the Code and Regulations thereunder to be taken into account for purposes of the limitation of§415(b)(1) of the Code. 2 2. Participation in Other Defined Benefit Plans. The limitation of this Section with respect to any Member who at any time has been a Member in any other defined benefit plan (as defined in §414(j) of the Code) maintained by the City shall apply as if the total benefits payable under all defined benefit plans in which the Member has been a member were payable from one plan. 3. Adjustments in Limitation In the event the Member's retirement benefits become payable before age 62, the $90-;000 S160,000.00 limitation prescribed by this Section shall be reduced in accordance with Regulations issued by the Secretary of the Treasury pursuant to the provisions of§415(b) of the Code, §415(L)of thy Cud.,so That such limitation (as so reduced) equals an annual benefit (beginning when such retirement income benefit begins) which is equivalent to a one hundred sixty thousand dollar ($160.000) annual benefit Sinning at age sixty-two (62). The reductions provided for in the previous two paragraphs shall not be applicable to pre-retirement death benefits paid pursuant to Section 7. If the Member's retirement benefit becomes payable after age sixty-five (65), for purposes of determining whether this benefit meets the limitation set forth in subsection I herein, such benefit shall be adjusted so that it is actuarially equivalent toy the benefit beginningll Lage 65. This adjustment shall be made ❑ a. I (� ) in accordance with regulations promulgated by the Secretary of the Treasury or his or her delegate. 4 Less_thanTen Years of Service. The maximum retirement benefits payable under this Section to any Member who has completed less than ten(10)years of Credited Service with the City shall be the amount determined under subsection 1 of this Section multiplied by a fraction, the numerator of which is the number of the Member's years of Credited.Service and the denominator of which is ten (10). The reduction provided for in this subsection shall not be applicable to pre-retirement death benefits paid pursuant to Section 7. 5. 510000Limit. Notwithstanding the foregoing, the retirement benefit payable with respect to a Member shall be deemed not to exceed the limitations set forth in this Section if the benefits payable, with respect to such Member under this System and under all other qualified defined benefit pension plans to which the City contributes,do not exceed$10,000 for the applicable Plan Year and for any prior Plan Year and the City has not at any time maintained a qualified defined contribution plan in which the Member participated. 6 {dci � rr>-Plan §2004 of thu 3 q- ( Reduction of benefits. Reduction of benefits and/or contributions to all plans, where required, shall be accomplished by first reducing the Member's benefit under any defined benefit plans in which Member participated, such reduction to be made first with respect to the plan in which Member most recently accrued benefits and thereafter in such priority as shall be determined by the trustees and the plan administrator of such other plans, and next, by reducing or allocating excess forfeitures for defined contribution plans in which the Member participated, such reduction to be made first with respect to the plan in which Member most recently accrued benefits and thereafter in such priority as shall be established by the trustees and the plan administrator for such other provided, however, that of the trustees reductions the plan adminbe istrator ator oe in a f all otherpifferent lans sr and covering such Member.Membeursuant ro the agreement & 7 Fi " v Adjustments. The limitations as stated in Subsections 1, 2, and 3,and-6 herein shall be adjusted to the payment of benefit be inss to ns in ataccordance a c the ed)with a h de-of-living adjustments prescribed by the Secretary the 4 8. Additional Limitation on Pension B neflts. Notwithstanding anything herein to the contrary: A. The normal retirement benefit or pension payable to a Retiree who becomes a Member of the System and who has not previously participated in such System,on or after January 1, 1980, shall not exceed 100 percent of his or her Average Final Compensation. However, nothing contained in this Section shall apply to supplemental retirement benefits or to pension increases attributable to cost-of-living increases or adjustments. B. No member of the System shall be allowed to receive a retirement benefit or pension which is in part or in whole based upon any service with respect to which the Member is already receiving, or will receive in the future, a retirement benefit or pension from another retirement system or plan. This restriction does not apply to social security benefits or federal benefits under Chapter 67, Title 10, U.S. Code. SECTION 4: That Ordinance No. 96-19, adopting the amended and restated City of Ocoee Municipal General Employees' Retirement Trust Fund, as subsequently amended, is hereby further amended by amending Section 23, Direct Transfers of Eligible Rollover Distributions,to read as follows: SECTION 23 DIRE TA eNSFERS OF ELIGIBLE ROLLOVER DISTRIBUTIONS. ]. Rollover D ns A. neral. This Section applies to distributions made on or after January I, }993 2002. Notwithstanding any provision of the System to the contrary that would otherwise limit a distributee's election under this Section, a distributee may elect, at the time and in the manner prescribed by the Board, to have any portion of an eligible rollover distribution paid directly to an eligible retirement plan specified by the distributee in a direct rollover. 4 2: B. Definitions. A7 Eligible Rollover tion: An eligible rollover ion is any distribution of all oranny portion of thebalance to the credit red tof the distributee, except that an eligible rollover distribution does not include: any distribution that is one of a series of substantially equal periodic payments (not less frequently than annually) made for the life (or life expectancy) of the distributee or the joint lives (or joint life expectancies) of the distributee and the distributee's designated Beneficiary, or for a specified period of ten years or more; any distribution to the extent such distribution is required under section 401(a)(9) of the Code; and the portion of any distribution that is not includible in gross income. Any portion of any distribution which would be includible in gross income will be an eligible rollover distribution if the distribution is made to an individual retirement account described in section 408(a), to an individual retirement annuity described in section 408(b) or to a qualified defined contribution plan described in section 401(a)or 403(a) that agrees to separately account for amounts so transferred, including separately accounting for the portion of such distribution which is includible in gross income and the portion of such distribution which is not so includible. B: (2) Eligible Retirement Plan: An eligible retirement plan is an individual retirement account described in section 408(a) of the Code, an individual retirement annuity described in section 408(b) of the Code, an annuity plan described in section 403(a) of the Code, an eligible deferred compensation plan described in section 457(b) of the Code which is maintained by an eligible employer described in section 457(e)(1)(A)of the Code and which agrees to separately account for amounts transferred into such plan from this plan.an annuity contract described in section 403(b)of the Code or a qualified trust described in section 401(a) of the Code, that accepts the distributee's eligible rollover distribution. iiuwcvLL,This definition shall also apply in the case of an eligible rollover distribution to the surviving Spouse an uligibl� n,tnwncut plat' is an individual nAirtuiw,t auuouut individual Lulu muwt annuity. E 131 Distributee: A distributee includes an employee or former employee. In addition, the employee's or former employee's surviving Spouse is a distributee with regard to the interest of the Spouse. a (4) Direct Rollover: A direct rollover is a payment by the plan to the eligible retirement plan specified by the distributee. 2. Rollovers or Transfers into the Fund. On or after January 1. 2002, the System will accept. sole y for the nurpose of purchasing Credited Service as provided herein.permissible Member requested transfers of funds from other retirement oL cnsion plans. Member rollover cash contributions and/or direct cash rollovers of distributions made on or after January I. 2002. as follows: A. Transfers and Direct Rollovers or Member Rollover Contributions from Other Plans. The System will accept either a direct rollover of an eligible rollover distribution or a Member contribution of an eligible rollover 5 distribution from a Qualified plan described in section 401(aLor 4031a) of the Code, from an annuity contract described in section 403(b) of the Code or from an eligible plan under section 457(b) of the Code which is maintained by a state political subdivision of a state, or any agency or instrumentality of a state or political subdivision of a state. The System will also accept legally permissible Member requested transfers of funds from other retirement or pension plans. B. Member Rollover Contributions from TRAs. The system will accept a Member rollover contribution of the portion of a distribution from an individual retirement account or annuity described in section 408(a)or 408(b) of the Code that is eligible to be rolled over and would otherwise be includible in gross income. SECTION 5: That Ordinance No. 96-19, adopting the amended and restated City of Ocoee Municipal General Employees' Retirement Trust Fund, as subsequently amended, is hereby further amended by amending Section 25, Deferred Retirement Option Plan, to read as follows: SECTION 25. DEFERRED RETIREMENT OPTION PLAN. 1. Definitions. As used in this Section 25, the following definitions apply:" A. "DROP"—The Ocoee General Employees'Deferred Retirement Option Plan. B. "DROP Account" -- The account established for each DROP participant wider subsection 3. 2. Participation. A. y to Participate. In lieu of terminating his employment as a General Employee, any Member who is eligible for normal retirement under the System may elect to defer receipt of such service retirement pension and to participate in the DROP provided that the election to participate in the DROP is made within twelve (12)months following the date on which the Member first becomes eligible for normal retirement, or for a Member who first reached eligibility for normal retirement prior to the effective date of this Section, the election to participate is made within twelve(12)months from the effective date of this Section. A Member who fails to make the election within such twelve (12) month limitation period shall forfeit all rights to participate in the DROP. B. Election to Participate. A Members election to participate in the DROP must be made in writing in a time and manner determined by the Board and shall be effective on the first day of the first calendar month which is at least fifteen (15) business days after it is received by the Board. C Period of participation. A Member who elects to participate in the DROP under subsection 2.B., shall participate in the DROP for a period not to exceed sixty (60) months 6 beginning on the date which the Member first becomes eligible for normal retirement. An election to participate in the DROP shall constitute an irrevocable election to resign from the service of the City at the time of election into the DROP. A Member may participate only once. D. Termination of Participation. (1) A Member's padiu;pating participation in the DROP shall cease partiuipatiug Li the DROP at the earlier of: (a) ulwtittg in wtit:ug, bra thin and uatutut dutuntducd by tin, Dowd, to ucaa6 partuutpativg m tluu DROP, (ID) f a) woLuutug to LL Laiploy.d as a al Eutpluyuu at the end of his permissible period of participation in the DROP as determined under subsection 2.C.; or (c) ,b tLttuhtatiug termination of his employment as a General Employee. Any Lh.ctiou ttjadt, widw ulous.(a) shall Lu uff uti vu vu thu lust day uftltu fiat ualuttdat utvutlt wluclt *lb at luaot Lttuou(15)Luautwo days aftw It IJ iLuuv%A by the Duaid. (2) Upon the Member's termination of participation in the DROP, pursuant to subsection(1),(a)or-(b) above, all amounts provided for in subsection 3.B., including monthly benefits and investment earnings and losses or interest, shall cease to be transferred from the System to his DROP Account. Any amounts remaining in his DROP Account shall be paid to him in accordance with the provisions of subsection 4. when he terminates his employment as a General Employee. (3) A Member who vlwt5 tv terminates his participation in the DROP under this subsection 2.D. shall not be permitted to again become a participant in the DROP. E. Effect of DROP Participation on the System. (I) A Member's Credited Service and his accrued benefit under the System shall be determined on the date his election to participate in the DROP first becomes effective. The Member shall not accrue any additional Credited Service or any additional benefits under the System (except for any additional benefits provided under any cost- of-living adjustment in the System) while he is a participant in the DROP. After a Member commences participation, he shall not be permitted to again contribute to the System nor shall he be eligible for disability or pre-retirement death benefits. (2) No amounts shall be paid to a Member from the System while the Member is a participant in the DROP. Unless otherwise specified in the System, if a Members tuuuuivatuc his participation in the DROP is temtinated other than by terminating his employment as a General Employee,no amounts shall be paid to him from the System until he terminates his employment as a General Employee. Unless otherwise specified in the System, amounts transferred from the System to the 7 Members DROP Account shall be paid directly to the Member only on the termination of his employment as a General Employee. 3. Funding. A. stabiishment of DROP Account. A DROP Account shall be established for each Member participating in the DROP.DROP underber's subseectiioon 3.Bccount., and earnings orall t of inte amounts onttho transferred mouts the B. Transfers From Retirement System. (1) As of the first day of each month of a Member's period of participation in the DROP, the monthly retirement benefit he would have received under the System had he temtmated his employment as a General Employee and elected to receive monthly benefit payments thereunder shall be transferred to his DROP Account, except as otherwise provided for in subsection 2.D.(2). A Member's period of participation in the DROP shall be determined in accordance with the provisions of subsections 2.C. and 2.D., but in no event shall it continue past the date he terminates his employment as a General Employee. (2) Except as otherwise provided in subsection 2.D.(2), a Member's DROP Account under this subsection 3.B.shall be debited or credited after each fiscal year quarter with either: one-half percent (6.5%) (a) per annum compoundederest at an efftive rate of six d unded monthly on prior months ending balance; or (b) Earnings, determined as follows: The average daily balance in a Member's DROP Account shall be credited or debited at a rate equal to the actual net rate of investment return realized by the System for that quarter. "Net investment return" for the purpose of this paragraph is the total return of the assets in which the Member's DROP Account is invested by the Board net of brokerage commissions, transaction costs and management fees. Upon electing participation in the DROP, the Member shall elect to receive either interest or earnings on his account to be determined as provided above. The Member may, in writing, elect to change his election only once during his DROP participation. An election to change must be made prior to the end of a quarter and shall be effective beginning the following quarter. (3) A Member's DROP Account shall only be credited or debited with earnings or interest and monthly benefits while the Member is a participant in the DROP add a@., dry Muubu dius, iutir�� Ur h.uu;ualLs his.uupluyu.ad asa GtmAal Erupluyc",.. A Member's final DROP account value upon o�articipation in the DROP shall be the value of the accounttermination at the 8 diateI re in termination ofnarticipation lus n onthl periodic additions made to the DROP account arte an rior Isub uent f aeMember hs end employed rbyotheu City after olwt� gsto ccb on participating in the DROP for f v., (5)yLas the permissible period of DROP tion,then b,.g . i i'ig v.,th thL L,,nt payu,Li3 Eolluw;ug beginning with the Member's Glst 1st month of employment following the last month of DROP participation,wlavlicv i oLLeis firbt, the Member's DROP Account will no longer be credited or debited with earnings or interest, nor will monthly benefits be transferred to the DROP account. All such non-transferred amounts shall be forfeited and continue to be forfeited while the Member is employed by the City. .ble Member of employed by the City after fiv (5) yLaia P DROP participation will still not be eligible for pre-retirement death or disability benefits, nor will he accrue additional Credited Service. 4. Distri ution of DR P Ac unts on Terminate n of Em 1 anent. A. Elieibilit^ v fo_ rr Benefits. A Member shall receive the balance in his DROP Account in accordance with the provisions of this subsection 4. upon his termination of employment as a General Employee. Except as provided in subsection 4.D., no amounts shall be paid to a Member from the DROP prior to his termination of employment as a General Employee. B. E f fistribution. (1) Unless the Member elects otherwise, distribution of his DROP Account shall be made in a cash lump sum, subject to the direct rollover provisions set forth in subsection 4.G. A Member may, however, elect, in such time and manner as the Board shall prescribe, that his DROP distribution be used to purchase a nonforfeitable fixed annuity payable in such form as the Member may elect. Elections under this paragraph shall be in writing and shall be made in such time or manner as the Board shall determine. If the annuity form selected is not a qualified joint and fifty percent (50%) survivor annuity with the Members Spouse as the Beneficiary, the annuity payable to the Member and thereafter to his Beneficiary shall be subject to the incidental death benefit rule as described in Section 401(a)(9)(G)of the Code and its applicable regulations. (2) If a Member dies before his benefit is paid, his DROP Account shall be paid to his Beneficiary in such optional form as his Beneficiary may select. If no Beneficiary designation is made, the DROP Account shall be distributed to the Member's estate. C. Date Pa ent f Distribution. (1) Except as otherwise provided in this subsection 4., distribution of a Mepracticable olllP lowing thet shall be Member's terminal on of employmenade s soon as t.9 (2) In lieu of a distribution as described in paragraph (I) above, a Member may, in accordance with such procedures as the Board shall prescribe, elect to have the distribution of his DROP Account made as of the first day of any month coincident with or following his termination of employment as a General Employee; provided, however,payments shall be made before the distribution date elected by the Member to the extent necessary to comply with the provisions of subsections 4.D. and 4.F. D. Age Seventy and One-FIalf(70-1/2) Required Distribution. In no event shall the provisions of subsection 4. operate so as to allow the distribution of a Members DROP Account to be later than the April 1 following the later of the calendar year in which he terminates his employment as a General Employee or he attains age seventy and one-half (70-1/2). In the event a Member is required to receive payment while in service under the provisions of this subsection D., he shall receive one lump sum payment on or before his required beginning date equal to his entire DROP Account balance and annual lump sum payments thereafter of amounts credited to his DROP Account during each calendar year. Upon the Member's subsequent termination of employment, payment of his DROP Account shall be made in accordance with the provisions of subsection 4.B. E. Proof of Death and Right of Beneficiary or Other Person. The Board may require and rely upon such proof of death and such evidence of the right of any Beneficiary or other person to receive the value of a deceased Member's DROP Account as the Board may deem proper and its determination of the right of that Beneficiary or other person to receive payment shall be conclusive. F. Distribution Limitation. Notwithstanding any other provision of subsection 4., all distributions from the DROP shall conform to the regulations issued under Section 401(a)(9) of the Code, including the incidental death benefit provisions of Section 401(a)(9)(G)of the Code. Further,such regulations shall override any DROP provision that is inconsistent with Section 401(a)(9) of the Code. G. Direct Rollover of Certain Distributions. This subsection applies to distributions made on or after January 1, -I-993 2002. Notwithstanding any provision of the DROP to the contrary that would otherwise limit a distributee's election under this subsection, a distributee may elect,at the time and in the manner prescribed by the Board, to have any portion of an eligible rollover distribution paid directly by the DROP to an eligible retirement plan specified by the distributee in a direct rollover as otherwise provided under the System in Section 23, herein incorporated by reference. 5. Administration of DROP. A. Board Administers the DROP. The general administration of the DROP, the responsibility for carrying out the provisions of the DROP and the responsibility of overseeing the 10 investment of the DROP's assets shall be placed in the Board. The members of the Board may appoint from their number such subcommittees with such powers as they shall determine; may adopt such administrative procedures and regulations as they deem desirable for the conduct of their affairs; may authorize one or more of their number or any agent to execute or deliver any instrument or make any payment on their behalf; may retain counsel, employ agents and provide for such clerical, accounting, actuarial and consulting services as they may require in carrying out the provisions of the DROP; and may allocate among themselves or delegate to other persons all or such portion of their duties under the DROP, other than those granted to them as Trustee under any trust agreement adopted for use in implementing the DROP, as they, in their sole discretion,shall decide. A Trustee shall not vote on any question relating exclusively to himself B. individual Accounts Records and Reports. The Board shall maintain, or cause to be maintained, records showing the operation and condition of the DROP, including records showing the individual balances in each Member's DROP Account, and the Board shall keep, or cause to be kept, in convenient form such data as may be necessary for the valuation of the assets and liabilities of the DROP. The Board shall prepare or cause to be prepared and distributed to Members participating in the DROP and other individuals or filed with the appropriate governmental agencies, as the case may be, all necessary descriptions, reports, information returns, and data required to be distributed or filed for the DROP pursuant to the Code, the applicable portions of the Act and any other applicable laws. C. Establishment of Rules. Subject to the limitations of the DROP, the Board from time to time shall establish rules for the administration of the DROP and the transaction of its business. The Board shall have discretionary authority to construe and interpret the DROP (including but not limited to determination of an individual's eligibility for DROP participation, the right and amount of any benefit payable under the DROP and the date on which any individual ceases to be a participant in the DROP). The determination of the Board as to the interpretation of the DROP or its determination of any disputed questions shall be conclusive and final to the extent permitted by applicable law. The Board shall also oversee the investment of the DROP'S assets. D. Limitation of Liability. (I) The Trustees shall not incur any liability individually or on behalf of any other individuals for any act or failure to act, made in good faith in relation to the DROP or the funds of the DROP. (2) Neither the Board nor any Trustee of the Board shall be responsible for any reports furnished by any expert retained or employed by the Board, but they shall be entitled to rely thereon as well as on certificates furnished by an accountant or an actuary, and on all opinions of counsel. The Board shall be fully protected with respect to any action taken or suffered by it in good faith in reliance upon such expert, accountant, actuary or counsel, and all actions taken or suffered in such reliance shall be conclusive upon any person with any interest in the DROP. 11 6. General Provisions. A. Amendment of DROP. The DROP may be amended by an ordinance of the City at any time and from time to time, and retroactively if deemed necessary or appropriate, to amend in whole or in part any or all of the provisions of the DROP. However, except as otherwise provided by law, no amendment shall make it possible for any part of the DROP's funds to be used for,or diverted to,purposes other than for the exclusive benefit of persons entitled to benefits under the DROP. No amendment shall be made which has the effect of decreasing the balance of the DROP Account of any Member. B. Facility of Payment. If the Board shall find that a Member or other person entitled to a benefit under the DROP is unable to care for his affairs because of illness or accident or is a minor, the Board may direct that any benefit due him, unless claim shall have been made for the benefit by a duly appointed legal representative, be paid to his Spouse, a child, a parent or other blood relative, or to a person with whom he resides. Any payment so made shall be a complete discharge of the liabilities of the DROP for that benefit. C. Information. Each Member, Beneficiary or other person entitled to a benefit, before any benefit shall be payable to him or on his account under the DROP, shall file with the Board the information that it shall require to establish his rights and benefits under the DROP. D. Prevention of Escheat. If the Board cannot ascertain the whereabouts of any person to whom a payment is due under the DROP, the Board may, no earlier than three (3) years from the date such payment is due, mail a notice of such due and owing payment to the last known address of such person, as shown on the records of the Board or the City. If such person has not made written claim therefor within three (3) months of the date of the mailing, the Board may, if it so elects and upon receiving advice from counsel to the DROP, direct that such payment and all remaining payments otherwise due such person be canceled on the records of the DROP. Upon such cancellation, the DROP shall have no further liability therefor except that, in the event such person or his Beneficiary later notifies the Board of his whereabouts and requests the payment or payments due to him under the DROP, the amount so applied shall be paid to him in accordance with the provisions of the DROP. E. Written Elections. Notification. (I) Any elections, notifications or designations made by a Member pursuant to the provisions of the DROP shall be made in writing and filed with the Board in a time and manner determined by the Board under rules uniformly applicable to all employees similarly situated. The Board reserves the right to change from the time and manner for making notifications, elections or designations by Members under the DROP if it determines after due deliberation that such action is justified in that it improves the administration of the DROP. In the 12 event of a conflict between the provisions for making an election, notification or designation set forth in the DROP and such new administrative procedures, those new administrative procedures shall prevail. (2) Each Member or Retiree who has a DROP Account shall be responsible for furnishing the Board with his current address and any subsequent changes in his address. Any notice required to be given to a Member or Retiree hereunder shall be deemed given if directed to him at the last such address given to the Board and mailed by registered or certified United States mail. If any check mailed by registered or certified United States mail to such address is returned, mailing of checks will be suspended until such time as the Member or Retiree notifies the Board of his address. F. Benefits Not Guaranteed. All benefits payable to a Member from the DROP shall be paid only from the assets of the Member's DROP Account and neither the City nor the Board shall have any duty or liability to furnish the DROP with any funds,securities or other assets except to the extent required by any applicable law. G. Construction. (1) The DROP shall be construed,regulated and administered under the laws of Florida, except where other applicable law controls. (2) The titles and headings of the subsections in this Section 25 are for convenience only. In the case of ambiguity or inconsistency, the text rather than the titles or headings shall control. H. Forfeiture of Retirement Benefits. idothiug iu this So.rivll shall In consti eed to..,n„O vc DROP pa.ticipauts floor the slope of Section 20 above-or Erection 112.3173, _ jida tatuks. DROP pamhwpautS who o0wuut a ayccificd uff1.1i51, Oi wlr0L 1.wpIOyuIwt 10 tLuuumtLd as doccnibcd u Section 20 whip employed, will be subj,.0 to f uE.:dim,of all,ctimucmt h,Aiuding DROP bcncfts,ptnsu“nt to th,. abov.. p.uvi3ions of law. Nothing in this Section shall be construed to remove DROP participants from the application of a y forfeiture provisions applicable to the Svstom. DROP participants shall be subject to forfeiture of all retirement benefits. including DROP benefits. Effect of DROP Participation on Employment. Participation in the DROP is not a guarantee of employment and DROP participants shall be subject to the same employment standards and policies that are applicable to employees who are not DROP participants. SECTION 6: That Ordinance No. 96-19, adopting the amended and restated City of Ocoee Municipal General Employees' Retirement Trust Fund, as subsequently amended, is hereby further amended by adding a new Section 26, Prior Government Service, to read as follows: 13 SECTION 26. PRIOR GOVERNMENT SERVICE. Unless otherwise prohibited by law. and except as provided for in Section 1. the years or fractional parts ofyearsihat a Member previously erved asa full-time General Employee with the City of Ocoee during a period of previous employment and for which period Accumulated Contributions were withdrawn from the Fund, or the years and fractional parts of years that a member served as a General Employee for any other municipal,county or special district department in the State of Florida or jurisdiction other than the State of Florida, shall he added to his years of Credited Service provided that The Member contributes to the Fund the sum that he would have contributed, based on his Salary and the Member contribution rate in effect at the time that the Credited Service is rr uested,had he been a Member of this System for the years or fractional parts of years for which he is requesting credit, plus amounts actuarially determined such that the crediting of service does not result in any cost to the Fund plus payment of costs for all professional services rendered to the Board in connection with the purchase of years of Credited Service. 2. The request shall be made only once and made by the Member on or before the later of eighteen(181 months from the dateof the ordinance adopting this section or eighteen (18)months from the date of their emplovment with the City of Ococe. Payment by the Member of the required amount shall be made within six (6)months of his request for credit,but not later than his retirement date, and shall be made in one(1)lump sum pvment upon receipt of which Credited Service shall be given. 4. The maximum credit under this Section for iurisdictions other than the City of Ocoee when combined with credited service purchased pursuant to Section 27. Military Service Prior to Employment, shall be five (5) years of Credited Service and shall count for all nurppses except v estin There shall be no maximum purchase of credit for prior service with the City of Ocoee and such credit shall count for all purposes, including vesting_ In no event,however,may Credited Service be purchased pursuant to this Section for prior service with any other governmental agency. if such prior service forms or will form the basis of a retirement benefit or pension from another retirement system or plan as set forth in the Maximum Pension Section of the plan document. SECTION 7: That Ordinance No. 96-19, adopting the amended and restated City of Ocoee Municipal General Employees' Retirement Trust Fund, as subsequently amended, is hereby further amended by adding a new Section 27, Military Service Prior to Employment, to read as follows: SECTION 27. MILITARY SERVICE PRIOR TO EMPLOYMENT. The years or fractional parts of years that a Member serves or has served on active du yin the military service of the Armed Forces of the United States the United States Merchant Marine or the United States Coast Guard, voluntarily or involuntarily_and honorably or under honorable conditions,prior to first and initial employment with the City_shall be added to his years of Credited Service provided that: 1. The Member contributes to the Fund the sum that he would have contributed based on his Salary and the Member contribution rate in effect at the time that the Credited Service is re uested.had he been a Member of this System for the years or fractional parts9_fLcars for which he is requesting credit, Plus amounts_actuanally ittermined such that the crediting of_service does not result in any cost to the Fund plus payment of costs for all professional services rendered to the Board in connection with the purchase of years of Credited Service. 14 2. The request shall be made only once and made by Member on or before the later of eighteen(181 months from the effective date o[the ordinance adopting this section or eighteen (18) months from the date of their employment with the City of Ocoee. I Payment by the Member of the required amount shall be made within six(6) months of his request for credit,but not later than his retirement date.and shall be made in one(1) lump sum payment upon receipt of which Credited Service shall be given. 4. The maximum credit under this Section when combined with credited service purchased pursuant to Section 26,Prior Government Service with iurisdictions other than the City of Ocoee, shall be five (5) years. 5. Credited Service purchased pursuant to this Section shall count for all purposes except vesting. SECTION 8. Repeal of Ordinances. All ordinances or parts of ordinances in conflict herewith are hereby repealed. SECTION 9. Severability. In the event any section, subsection, paragraph, sentence, clause, phrase or word of this ordinance shall be held invalid by a court of competent jurisdiction, then such invalidity shall not effect the remaining portions hereof. SECTION 10. Effective Date. This ordinance shall take effect upon adoptions. PASSED AND ADOPTED this day of , 2002. APPROVED: ATTEST: CITY OF OCOEE, FLORIDA By: Jean Grafton, City Clerk S. Scott Vandergrift, Mayor (SEAL) ADVERTISED , 2002 READ FIRST TIME , 2002 READ SECOND TIME AND ADOPTED , 2002 FOR USE AND RELIANCE ONLY BY THE CITY OF OCOEE, FLORIDA APPROVED AS TO FORM AND LEGALITY THIS day of , 2002 15 CHRISTIANSEN & DEFINER, P.A. Special Counsel By: APPROVED BY THE OCOEE CITY COMMISSION AT A MEETING HELD ON , 2002 UNDER AGENDA ITEM NO. n«.««eAgenA09-13-02-on] 16