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HomeMy WebLinkAboutItem 08 Second 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) ActMeeting Date: October 20, 2020 Item # Contact Name: Gequita Cowan, lu Chairperson GERB Contact Number: 407-905-3111 Reviewed By: Department Director: City Manager: Subject: Second Reading of <Ordinance Amending ;the City:; of Ocoee Municipal General Employees' Retirement Trust Fund Reflecting ;Changes for Compliance with 'Setting ;Every, Communitv Un Retirement Enhancement 7SECURE1 Art Background Summary: The first reading of this ordinance was read at the October 6, 2020, City Commission meeting. 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 'k ) Public Hearing 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 For Clerk's Dept Use: Consent Agenda Public Hearing _ Regular Agenda N/A N/A 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; Page11 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 '/2 before January 1, 2020: no later than the Member'c required beginning April 1 of the calendar year following the later the member attains age or April 1 of the calend terminates employment later, of the calendar year in which seventy and one-half (70 Y2)- ar year in which the member with the district, whichever is (2) With regard to distributions required to be made on or after January 1 2020 to a participant who reaches the age of 70 '/2 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 Vear 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 portionshereof. SECTION4. 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 ATTEST: City Clerk (SEAL) FOR USE AND RELIANCE ONLY BY THE CITY OF OCOEE, FLORIDA APPROVED AS TO FORM AND LEGALITY THIS day of 2020. Shuffield Lowman & Wilson, P.A. City Attorney 2020. APPROVED: CITY OF OCOEE, FLORIDA Mayor ADVERTISED 2020 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. rear FOSTER & FOSTER 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, Douglas H. Lozen, EA, MAAA 13420 Parker Commons Blvd., Suite 104 Fort Mysn, Ft 33912 • (239) 455.5500 - Fax (209) 481.0634 - unviJader-fnstecmm Date Published and Media blame The West ©vame Times Thursdaaiciaber 8. 2020 Advertisement or Article FIRST INSERTION CITY OF OCOEE PUBLIC HEARINGS Public Hearings before the Ocoee City Commission will be held Tuesday, Octo. ber20, 2020 at6:15p.m, or as soon thereafter as maybe heard, in the Commission Chambers of City Hall at 150 North Lakeshore Drive, Ocoee, Florida, to consider thefollov$ag: AN ORDINANCE OF THE CITY OF OCOEE, FLORIDA, RELATING TO THE CITY OF OCOEE MUNICIPAL GENERAL EMPLOYERS' R& ITREMENT TRUST FUND, ADOPTED BY ORDINANCE NUMBER 2009-020; AS SUESEQUENT LYAMENDED; AMENDING SECTION I6, "MINIMUM DISTRIBUTION OF BENEFITS" TO PROVIDE FOR COM- PLIANCE WITH THE SECURE ACT, PROVIDING FOR SEVERABILI TY OF PROVISIONS; REPEALING ALL ORDINANCES IN CONFLICT HERF.WYFHAND PROVIDING AN EFFECTIVE DATE. AN ORDINANCE OF THE CITY OF OCOEE, FLORIDA, RELATING TO THE CITY OF OCOEE MUNICIPAL POLICE OFFICERS' AND FHiE- FIGIiTE2S' RETIREMENT TRUST FUND; AMENDING ORDINANCE NUMBER 2010-019, AS SUBSEQUENTLY AMENDED; AMENDING SECTION 16, "MINIMUM DISTRIBUTION OF BENEFITS" TO PEO- V IDE FOR COMPLIANCE W TTH THE SECURE ACT; PROV IDING FOR SEVERABH=OFPROVLSIONS;REPEALINGALLORDINANCESIN CONFLICT HEREWITH AND PROVIDINGAN EFFECTIVE DATE, The City Hall Commission Chambers will be closed during the meeting, which closure is subject to change based on the Governor's Executive Order. All inter- ested parties are invited to be heard during the public hearing portion of the meeting. This meeting is broadcasted live on Spectrum Channel 493 with a live stream at www.Ocoee.org/197/Omee-TV. Any interested party is invited to offer comments and/or questions during the hearing by smelling citizens@ omee.org or calling 407-554-7118 or by registering in advanm by email- ing citiMm@omee.org or calling 407-905-3105 and City staff will call you during the live meeting. The Ocoee City Commission may continue the public hearings to other dates and times, as it deems necessary. If a person decides to appeal any decision made by the City Commission with respect to any matter considered at such hearing, they will need a record of the proceedings, and for such purpose they may need'fo ensure that a verbatim record of the proceed- ings is made, which record includes the testimony and evidence upon which the appeal is to be based. In accordance with the Americans with Disabilities Act, persons needinga special accommodation or an interpreter to participate in this proceeding should contact the City Clerk's office at 407-905-3105 at least two days prior to the date ofbearing. October 8, 2020 20-04014W COPY OF ADVERTISEMENT Date Published and Media Name r20 The West oangeTimes_TliursdayOctober8.2020 Advertisement or Article