HomeMy WebLinkAboutItem 12 First Reading of Ordinance Amending the City of Ocoee Municipal General Employees’ Retirement Trust Fund Reflecting Changes for Compliance with Setting Every Community Up Retirement Enhancement (SECURE) Actt l
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AGENDA ITEM COVER SHEET
Meeting Date: October 6, 2020
Item # 12.
Contact Name: Gequita.Cowan,
Chairperson GERB
Contact Number: 407-905-3111
Reviewed By:
Department Director:
City Manager:
Subject: First Reading of Ordinance Amending the City of Ocoee Municipal.General Employees'
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 General Employees' 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 pay benefits to the 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 '/2
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 15,
"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 General Employees' Retirement Board respectfully recommends that the Mayor and
City Commission adopt the attached Ordinance amending the City of Ocoee Municipal General
Employees' 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 10, 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 Y)
Public Hearing
Ordinance First Reading
Ordinance Second Reading
Resolution
Commission Approval
Discussion & Direction
For Clerk's Dept Use:
Consent Agenda
Public Hearing
Regular Agenda
Original Document/Contract Attached for Execution by City Clerk
Original Document/Contract Held by Department for Execution
Reviewed by City Attorney N/A
Reviewed by Finance Dept. N/A
Reviewed by N/A
2
ORDINANCE NO. 2020 -
AN ORDINANCE OF THE CITY OF OCOEE, FLORIDA,
RELATING TO THE CITY OF OCOEE MUNICIPAL
GENERAL EMPLOYEES' RETIREMENT TRUST FUND,
ADOPTED BY ORDINANCE NUMBER 2009-020; AS
SUBSEQUENTLY AMENDED; AMENDING SECTION 15,
"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 General
Employees' Retirement Trust Fund has recommended an amendment to the Retirement
Fund to comply with the SECURE Act; and
WHEREAS, the trustees of the City of Ocoee Municipal General Employees'
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 general employees;
Page 11
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 General Employees' Retirement
Trust Fund adopted by Ordinance No. 2009-020, as subsequently amended, is hereby
further amended by amending Section 15, "Minimum Distribution of Benefits", subsection
2, "Time and Manner of Distribution", to read as follows:
Section 15. 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: ne later +� Members FequiFed beginning
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datewhinh shall Rot be 1ater+haR 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);,
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 year that next follows the calendar year 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.
Page 12
SECTION 3. 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 4. Repeal of Ordinances. All ordinances or parts of ordinances in
conflict herewith are hereby repealed.
SECTION 5. Effective Date. This ordinance shall be effective on the date of
adoption.
PASSED AND ADOPTED this _ day of , 2020.
APPROVED:
ATTEST: CITY OF OCOEE, FLORIDA
City Clerk
(SEAL)
FOR USE AND RELIANCE ONLY BY
THE CITY OF OCOEE, FLORIDA
APPROVED AS TO FORM AND
LEGALITY THIS day of
.2020.
:M
In
Mayor
ADVERTISED , 2020
READ FIRST TIME 12020
READ SECOND TIME AND ADOPTED
.2020
APPROVED BY THE OCOEE CITY
COMMISSION AT A MEETING HELD
ON 2020
UNDER AGENDA ITEM NO.
Page 13
FOSTER & FOSTER
ACTUARIES AND CONSULTANTS
September 10, 2020
VIA EMAIL
Board of Trustees
City of Ocoee
General Employees' Pension Board
c/o Ms. Kim Kilgore, Plan Administrator
2503 Del Prado Blvd. S. Suite 502
Cape Coral, FL 33904
Re: City of Ocoee General Employees' Pension board
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 office:
Mr. Keith Brinkman
Bureau of Local Retirement Systems
Division of Retirement
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,
r
Douglas H. Lozen, EA, MAAA
13420 Parker Commons Blvd., Suits 104 Fort Mews, R 33912 • (239) 433-SSCO - Fox (239) 481-0634 - ww�.Fogtrr-iostsr.eo�