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Home My WebLink AboutItem 13 First Reading of Ordinance Amending the City of Ocoee Police Officers’ and Firefighters’ Retirement Trust Fund Reflecting Changes for Compliance with Setting Every Community Up Retirement Enhancement (SECURE) Actt J ocoee florid. AGENDA ITEM COVER SHEET Meeting Date: October 6, 2020 Item # 13 Contact Name: Charles J. Brown Chairperson P&FPTF Contact Number: 407-905-3163 Reviewed 8y: Department Director: d"4 -4lie City Manager: Rob Fr Subject: First Reading of Ordinance Amending the City of Ocoee Police Officer's and Firefighters' Retirement Trust Fund Reflecting Changes for Compliance with Setting Every Community Up Retirement Enhancement (SECURE) Act Background Summary: At their meeting held on August 5, 2020, the Police & Firefighters' Retirement Board reviewed and approved the proposed ordinance which deals primarily with the Setting Every Community Up Retirement Enhancement (SECURE) Act, signed into law on December 20, 2019 and amended the definition of "Required Beginning Date' under Section 401 (a)(9) for compliance with the Internal Revenue Code. Contained in Section 401(a)(9) of the Internal Revenue Code, the required Minimum Distribution rules limit the tax deferral of retirement benefits by requiring qualified plans to pay benefits to participants, and the participants begin to pay taxes on those benefits by a certain age. The SECURE Act amended Section 401 (a)(9) by raising the age at which benefits must commence to 72 or at the age the participant retires whichever is later. The change is effective to participants who reach the age of 70 % on or after January 1, 2020. None of these changes are anticipated to have any financial impact to the city. Issue: Should the Honorable Mayor and City Commissioners adopt an Ordinance amending Section 16, "Minimum Distribution of Benefits", Subsection (2), "Time and manner of Distribution" which changes the minimum age that distributions need to begin from 70'/2 to age 72 to comply with the SECURE Act. Recommendations: In order to be compliant with the Setting Every Community Up Retirement Enhancement (SECURE) Act, the Ocoee Police & Firefighters' Retirement Board respectfully recommends that the Mayor and City Commission adopt the attached Ordinance amending the City of Ocoee Police Officers' & Firefighters' Retirement Trust Fund.. Adoption of the proposed changes will have no impact on the assumptions used in determining the funding requirements of the pension program. Attachments: • Ordinance • Foster & Foster Impact Letter Dated September 23, 2020 Financial Impact: None, as pointed out in the attached letter from Douglas Lozen of Foster & Foster, the change will have no measurable impact on the Plan's funding requirement. Type of Item: (please mark with an `k') Public Hearing X Ordinance First Reading Ordinance Second Reading Resolution Commission Approval Discussion & Direction Original Document/Contract Attached for Execution by City Clerk Original Document/Contract Held by Department for Execution Reviewed by City Attorney Reviewed by Finance Dept. Reviewed by 2 For Clerk's Dept Use:., Consent Agenda Public Hearing: Regular Agenda N/A N/A N/A ORDINANCE NO. 2020 - AN ORDINANCE OF THE CITY OF OCOEE, FLORIDA, RELATING TO THE CITY OF OCOEE MUNICIPAL POLICE OFFICERS' AND FIREFIGHTERS' RETIREMENT TRUST FUND; AMENDING ORDINANCE NUMBER 2010-019, AS SUBSEQUENTLY AMENDED; AMENDING SECTION 16, "MINIMUM DISTRIBUTION OF BENEFITS" TO PROVIDE FOR COMPLIANCE WITH THE SECURE ACT; PROVIDING FOR SEVERABILITY OF PROVISIONS; REPEALING ALL ORDINANCES IN CONFLICT HEREWITH AND PROVIDING AN EFFECTIVE DATE. WHEREAS, the Setting Every Community Up for Retirement Enhancement ("SECURE") Act, signed into law on December 20, 2019, amended the definition of "Required Beginning Date" under Section 401(a)(9) of the Internal Revenue Code; and WHEREAS, amendments to the Plan are necessary to conform the Retirement Trust Fund to the requirements of the SECURE Act; and WHEREAS, the Board of Trustees of the City of Ocoee Municipal Police Officers' and Firefighters' Retirement Trust Fund has recommended an amendment to the Retirement Trust Fund to comply with the SECURE Act; and WHEREAS, the trustees of the City of Ocoee Municipal Police Officers' and Firefighters' Retirement Trust Fund have requested and approved the amendments provided herein as being in the best interests of the participants and beneficiaries and improving the administration of the Fund, and WHEREAS, the City Commission has received and reviewed an actuarial impact statement related to this change and attached as such; and WHEREAS, the City Commission deems it to be in the public interest to provide this change to the Retirement Trust Fund for its police officers and firefighters; 1 BE IT ORDAINED BY THE CITY COMMISSION OF THE CITY OF OCOEE, FLORIDA; SECTION 1: Authority. 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 the City of Ocoee Municipal Police Officers' and Firefighters' Retirement Trust Fund adopted by Ordinance No. 2010-019, as subsequently amended, is hereby further amended by amending Section 16, Minimum Distribution of Benefits, by amending subsection 2, "Time and manner of distribution", to read as follows: Section 16. Minimum Distribution of Benefits. 2. Time and manner of distribution. A. Required beginning date. The member's entire interest will be distributed, or begin to be distributed, to the member no later than: (1) With regard to distributions required to be made to a member who reaches age 70 Y2 before January 1, 2020: no h+or an Member's req �iFed begin �—t-h�t��T�r�a�,,,,�,a date which shall not be later April 1 of the calendar year following the later of the calendar year in which the member attains age seventy and one-half (70 Y)i or April 1 of the calendar year in which the member terminates employment with the district, whichever is later. (2) With regard to distributions required to be made on or after January 1, 2020 to a participant who reaches the age of 70 Y2 on or after said date: April 1 of the calendar vear that next follows the calendar vear in which the participant attains or will attain the age of 72 years, or April 1 of the calendar year that next follows the calendar year in which the participant retires, whichever is later. K SECTION 3. Repeal of Ordinances. All ordinances or parts of ordinances in conflict herewith are hereby repealed. SECTION 4. 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 affect the remaining portions hereof. SECTION 5. Effective Date. This ordinance shall take effect upon second reading and adoption. PASSED AND ADOPTED this day of ATTEST: By: City Clerk (SEAL) FOR USE AND RELIANCE ONLY BY THE CITY OF OCOEE, FLORIDA APPROVED AS TO FORM AND LEGALITY THIS day of .2020 :AF 2020. APPROVED: CITY OF OCOEE, FLORIDA is Mayor ADVERTISED 12020 READ FIRST TIME , 2020 READ SECOND TIME AND ADOPTED . 2020 APPROVED BY THE OCOEE CITY COMMISSION AT A MEETING HELD ON 2020 UNDER AGENDA ITEM NO. 3 r FOSTER N& FOSTER �ACTUARIES AD CONSULTANTS September 23, 2020 VIA EMAIL Board of Trustees City of Ocoee Police Officers' and Firefighters' Pension Board c/o Ms. Livia Guiliani 3810 Inverrary Blvd, Suite 303 Lauderhill, FL 33319 Re: City of Ocoee Police Officers' and Firefighters' Retirement Trust Fund Dear Board: We have reviewed the proposed ordinance amending the plan as follows: - Changed the minimum age that distributions need to begin from age 70 '/Z to age 72 to comply with the recent SECURE Act. We have determined that the adoption of the proposed changes will have no impact on the assumptions used in determining the funding requirements of the program. Because the changes do not result in a change in the valuation results, it is our opinion that a formal Actuarial Impact Statement is not required in support of its adoption. However, since the Division of Retirement must be aware of the current provisions of all public pension programs, it is recommended that you send a copy of this letter and a copy of the fully executed ordinance to each of the following offices: Mr. Keith Brinkman Mr. Steve Bardin Bureau of Local Retirement Systems Municipal Police and Fire Division of Retirement Pension Trust Funds 3189 S. Blair Stone Rd. Division of Retirement Tallahassee, FL 32301 3189 S. Blair Stone Rd. Tallahassee, FL 32301 The undersigned is familiar with the immediate and long-term aspects of pension valuations, and meets the Qualification Standards of the American Academy of Actuaries necessary to render the actuarial opinions contained herein. If you have any questions, please let me know. Sincerely, Dougln.ozen, EA, MAAA 13420 Parker Commons Blvd., Seita 104 Fort (Byers, Fl. 33912 - (239) 433.5500 - Fax (239) 4B1-0634 • www.loster-faster.com