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HomeMy WebLinkAboutItem #10ab General Employees Retirement Trust Fund Changes AGENDA ITEM COVER SHEET Meeting Date: 05/( ""06 L(h/b. Reviewed By: ~~ Department Directo~ ~A. City Manager: _,_ ___~ =---- Item # Contact Name: Contact Number: James Carnicella 1032 Background Summary: The Pension Board for the City ofOcoee Municipal General Employees' Retirement Trust Fund and the City of Ocoee Municipal Police Officers' and Firefighters' Retirement Trust Fund is governed by ordinance. Issue: The Pension Attorney, Lee Dehner, has advised the Boards that this change is required by law resulting from amendments to the Internal Revenue Code which applies to tax qualified pension plans. Recommendations Staff recommends the Commission adopt the Pension Board changes as amended for the City of Ocoee General Employees' Retirement Trust Fund and the City of Ocoee Municipal Police Officers' and Firefighters' Retirement Trust Fund on the first reading. Attachments: Attached are the Ordinances pertaining to the recommended changes. Financial Impact: None Type of Item: D Public Hearing [gI Ordinance First Reading D Ordinance First Reading D Resolution D Commission Approval D Discussion & Direction For Clerk's Deaf Use: D Consent Agenda D Public Hearing D Regular Agenda D Original Document/Contract Attached for Execution by City Clerk D Original Document/Contract Held by Department for Execution Reviewed by City Attorney Reviewed by Finance Dept. Reviewed by ( ) D N/A D N/A D N/A FOSTER & FOSTER, INC. ~and~~@'~~~ P 3j>-ilp~ fL TELEPHONE (239) 433-5500 6290 CORPORATE COURT, C-201 FORT MYERS, FLORIDA 33919 FACSIMILE (239) 48 I - 0634 March 20, 2006 Ms. Jean Grafton, Secretary City of Ocoee General Employees' Pension Board 150 N. Lakeshore Dr. Ocoee, FL 34761 Re: City of Ocoee General Employees' Retirement Trust Fund Dear Jean: In response to H. Lee Dehner's letter of March 10, 2006 to James Carnicella, we have reviewed the proposed Ordinance (identified on page 12 as noc\ocoee\gen\12-07-05.ord), amending the Plan to include changes resulting from recent amendments to the Internal Revenue Code which apply to tax qualified pension plans, and have determined that its adoption 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. 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: Mr. Charles Slavin Division of Retirement Bureau of Local Retirement Systems P. O. Box 9000 Tallahassee, FL 32315-9000 If you have any questions, please let me know. Sincerely, f4D~ Patrick T. Donlan PTD/nck cc: Jim Carnicella, H.R. Director H. Lee Dehner, Board Attorney LAW OFFICES CHRISTIANSEN & DEHNER, P.A. SCOTT R. CHRISTIANSEN H. LEE DEHNER 63 SARASOTA CENTER BLVD. SUITE 107 SARASOTA, FLORIDA 34240 PHONE: (941) 377-2200 FAX: (941) 377-4848 March 10, 2006 Mr. James Carnicella Human Resource Director City of Ocoee 150 N. Lakeshore Drive Ocoee, FL 34761 Re: City of Ocoee Municipal General Employees' Retirement Trust Fund Dear Jim: As you know, I represent the Board of Trustees of your City of Ocoee Municipal General Employees' Retirement Trust Fund. As directed by the Board of Trustees, I am enclosing a proposed ordinance which is recommended for adoption by the City Commission. The ordinance includes a number of changes resulting from recent amendments to the Internal Revenue Code which apply to tax qualified pension plans such as ours: 1. Section 10, Optional Forms of Benefits, has been amended to reflect revised IRS limitations on the calculation and payment of the Joint and Survivor benefit option. 2. Section 16, Distribution of Benefits, has been amended to incorporate changes to the minimum distribution requirements of Internal Revenue Code Section 401 (a)(9). These changes are based upon model language supplied by the IRS for inclusion in tax-qualified pension plans. 3. Various sections of the plan have also been amended to eliminate any mandatory cash distributions in excess of one-thousand dollars. These changes are proposed to eliminate the effects of a new Internal Revenue Code (401 (a)(31)(B)) provision that would require the Board of Trustees to establish an IRA for any member or former member who is due an involuntary distribution and who fails to elect, in writing, to receive either a cash distribution or a rollover of the amount to be distributed. Mr. James Carnicella March 10, 2006 Page 2 By copy of this letter to the Board's actuary, Foster & Foster, Inc., I am requesting that they provide you with a letter confirming that there is no cost associated with the adoption of this ordinance. If you or any member of your staff have any questions with regard to this ordinance, please feel free to give me a call. In addition, if you feel it would be appropriate for me to be present at the meeting at which this ordinance is considered by the City Commission, please contact my office to advise me of the date that the ordinance would be considered. :x= truly, H. Lee Dehner HLD / noc enclosure cc: Ward Foster, with enclosure ORDINANCE NO. 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 96-20, AS SUBSEQUENTLY AMENDED; AMENDING SECTION 1, DEFINITIONS, BY AMENDING THE DEFINITION OF "CREDITED SERVICE"; AMENDING SECTION 10, OPTIONAL FORMS OF BENEFITS; 16, DISTRIBUTION OF BENEFITS; AMENDING SECTION 19, EXEMPTION FROM EXECUTION; NONASSIGNABILITY; AMENDING SECTION 25, DIRECT TRANSFERS OF ELIGIBLE ROLLOVER DISTRIBUTIONS; AMENDING SECTION 27, DEFERRED RETIREMENT OPTION PLAN; PROVIDING FOR SEVERABILITY OF PROVISIONS; REPEALING ALL ORDINANCES IN CONFLICT HEREWITH AND PROVIDING AN EFFECTIVE DATE. SECTION 1: Authority. The City Commission of the City ofOcoee 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. 96-20, adopting the amended and restated City of Ocoee Municipal Police Officers' and Firefighters' Retirement Trust Fund, as subsequently amended, is hereby further amended by amending Section 1, Definitions, by amending the definition of "Credited Service", to read as follows: Credited Service means the total number of years and fractional parts of years of service as a Police Officer or Firefighter with Member contributions, when required, omitting intervening years or fractional parts of years when such Member was not employed by the City as a Police Officer or Firefighter. A Member may voluntarily leave his or her Accumulated Contributions in the Fund for a period of five (5) years after leaving the employ of the Police or Fire Department pending the possibility of being reemployed as a Police Officer or Firefighter, without losing credit for the time that he or she was a Member of the System. If a vested Member leaves the employ of the Police or Fire Department, his or her Accumulated Contributions will be returned only upon his or her written request. If a Member who is not vested is not reemployed as a Police Officer or Firefighter with the Police or Fire Department within five (5) years, his or her Accumulated Contributions. if one-thousand dollars ($1.000.00) or less. shall be returned. If a Member who is not vested is not reemployed within five (5) years. his Accumulated Contributions. if more than one-thousand dollars ($1.000.00). will be returned only upon the written request of the Member and u{lon completion of a written election to receive a cash lump sum or to rollover the lump sum amount on forms designated by the Board. Upon return of a Member's Accumulated Contributions, all of his or her rights and benefits under the System are forfeited and terminated. Upon any reemployment, a Police Officer or a Firefighter shall not receive credit for the years and fractional parts of years of service for which he has withdrawn his Accumulated Contributions from the Fund, unless the Police Officer or Firefighter repays into the Fund the contributions he has withdrawn, with interest, as determined by the Board, within ninety (90) days after his reemployment. 1 The years or fractional parts of a year that a Member serves in 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, after separation from employment as a Police Officer or Firefighter with the City to perform training or service, shall be added to his or her years of Credited Service for all purposes, including vesting, provided that: A. The Member must return to his or her employment as a Police Officer or Firefighter within one (1) year from the earlier of the date of his or her military discharge or his or her release from service. B. The Member is entitled to reemployment under the provisions of the Uniformed Services Employment and Reemployment Rights Act (USERRA), (P.L.I03-353). C. The maximum credit for military service pursuant to this paragraph shall be five (5) years. In the event that a Member of this System has also accumulated Credited Service in another pension system maintained by the City, then such other Credited Service shall be used in determining vesting as provided for in Section 9, and for determining eligibility for early or normal retirement. Such other Credited Service will not be considered in determining benefits under this System. Only his or her Credited Service and Salary under this System on or after his or her 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 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 Member's Average Final Compensation, Credited Service and benefit accrual rate as of the date the Member ceases to be a Police Officer or Firefighter. SECTION 3: That Ordinance No. 96-20, adopting the amended and restated City of Ocoee Municipal Police Officers' and Firefighters' Retirement Trust Fund, as subsequently amended, is hereby further amended by amending Section 10, Optional Forms of Benefits, subsection I.B., to read as follows: 1. B. A retirement income of a modified monthly amount, payable to the Retiree during the lifetime of the Retiree, and following the death of the Retiree, one hundred percent (100%), seventy-five percent (75%), sixty-six and two-thirds percent (66-2/3 %), or fifty percent (50%) of such monthly amounts payable to a joint pensioner for his or her lifetime. Except where the Retiree's joint pensioner is his or her Spouse, the present value of payments to the Retiree shall not be less than fifty peroent (50%) of the total present yalue of payments to the Retiree and his or her joint pensioner pavrnents to the ioint l>ensioner as a percentage of the pavrnents to the Retiree shall not exceed the applicable percentage provided for in the applicable table in the Treasury regulations. SECTION 4: That Ordinance No. 96-20, adopting the amended and restated City of Ocoee Municipal Police Officers' and Firefighters' Retirement Trust Fund, as subsequently amended, is hereby further amended by amending Section 16, Distribution of Benefits, to read as follows: 2 SECTION 16. MINIMUM DISTRIBUTION OF BENEFITS. Notv.ithstanding any oilier provision of this 8ystem to the eontrary, a form of retirement income payable from tBis 8ystem after Oetober 1, 1991, shall satisfy the f{)llo'.v~g conditions: h If the retirement ineome is payable before the Member's death, A: It shall either be distributed or commence to the Member not later than .^..prill, of the calendar year f{)llO'.ving the later of the ealendar year i:n which the Member attains age 70 1/2, or the ealendar year in '.vhieh Member retires, ~ The distrif>ution shall eommence not later than the calendar year defIned abo'/e; and a), shall be paid oyer the life of the Member or over the lifetimes of the Member and 8pouse, issue or dependent, or b), shall be paid over the period extendmg not beyond the life eJcpeetancy of the Member and 8pouse, issue or dependent. Where a f{)rm of retirement income payment has commenced in accordance \\ith the preeeding paragraphs and the Member dies before his or her entire interest in the 8ystem has been distributed, the remaining portion of such interest in the 8ystem shall be distributed no less rapidly than ooder the form of distribution in effeet at the time of the Member's death. ~ If the Member's death occurs before the distribution of his or her interest in the 8ystem has commenced, Member's entire interest in the 8ystem shall be distributed within fIye (5) years of Member's death, unless it is to be distributed in accordance v.ith the follovling rules: A: The Member's remaining interest in the 8ystem is payable to his or her 8pouse, issue or dependent; ~ The remainiRg interest is to be distributed o'/er the life of the 8pouse, issue or dependent or over a period not extending beyond the life expectancy of the 8pouse, issue or dependent; and (;.; 8uch distribution begins within one year of the Member's death unless the Member's 8pouse shall recei','e the remaining interest in 'shich case the distribution need not begin before the date on which the Member 'lIould have attained age 70 1/2 and if the Spouse dies before the distribution to the Spouse begins, this Section shall be applied as if the Spouse '.vere the Member. .1. General Rules. A. Effective Date. The provisions of this Section will apply for purposes of determining required minimum distributions for calendar years beginning with the 2003 calendar year. B. Precedence. The requirements of this Section will take ?recedence over any inconsistent provisions of the Plan. 3 C. Reauirements of Treasurv Re1nllations Incoroorated. All distributions required under this Section will be determined and made in accordance with the Treasury regulations under Section 401(a)(9) of the Code. D. TEFRA Section 242(b)(2) Elections. Notwithstanding the other provisions of this Section other than this subsection l.D.. distributions may be made under a designation made before January L 1984. in accordance with Section 242(b)(2) of the Tax Equity and Fiscal Responsibility Act (TEFRA) and the provisions of the plan that related to Section 242(b )(2) of TEFRA. 2. Time and Manner of Distribution. A. Reauired BeQinninQ Date. The Member's entire interest will be distributed. or begin to be distributed. to the Member no later than the Member's required beginning date which shall not be later than April 1 of the calendar year following the later of the calendar year in which the Member attains age seventy and one-half (70 )12) or the calendar year in which the Member retires unless otherwise provided for in the Plan or required by law. B. Death of Member Before Distributions BeQin. If the Member dies before distributions begin. the Member's entire interest will be distributed. or begin to be distributed no later than as follows: ill If the Member's surviving spouse is the Member's sole designated beneficiary. then distributions to the surviving spouse will begin by December 31 of the calendar year immediately following the calendar year in which the Member died. or by December 31 of the calendar year in which the Member would have attained age 70 )12. if later. ill If the Member's surviving spouse is not the Member's sole designated beneficiary. then. distributions to the designated beneficiary will begin by December 31 of the calendar year immediately following the calendar year in which the Member died. ill If there is no designated beneficiary as of September 30 of the year following the year of the Member's death. the Member's entire interest will be distributed by December 31 of the calendar year containing the fifth anniversary of the Member's death. ill If the Member's surviving spouse is the Member's sole designated beneficiary and the surviving spouse dies after the Member but before distributions to the surviving spouse begin. this subsection 2.B.. other than subsection 2.B.(1). will apply as if the surviving spouse were the Member. For purposes of this subsection 2.B. and subsection 5.. distributions are considered to begin on the Member's required beginning date or. if subsection 2.B.( 4) applies. the date of distributions are required to begin to the surviving spouse under 4 subsection 2.Rn). If annuity payments irrevocably commence to the Member before the Member's required beginning date (or to the Member's surviving spouse before the date distributions are required to begin to the surviving spouse under subsection 2.B.n )). the date distributions are considered to begin is the date distributions actually commence. C. Form of Distribution. Unless the Member's interest is distributed in the form of an annuity purchased from an insurance company or in a single sum on or before the required beginning date. as of the fIrst distribution calendar year distributions will be made in accordance of subsections 3. 4 and 5 of this Section. If the Member's interest is distributed in the form of an annuity purchased from an insurance company. distributions thereunder will be made in accordance with the requirements of Section 401 (a)(9) of the Code and Treasury regulations. Any part of the Member's interest which is in the form of an individual account described in Section 414(k) of the Code will be distributed in a manner satisfying the requirements of Section 401(a)(9) of the Code and Treasury regulations that apply to individual accounts. 1. Determination of Amount to be Distributed Each Year. A. General Annuity Reauirements. If the Member's interest is paid in the form of annuity distributions under the Plan. payments under the annuity will satisfy the following requirements: ill The annuity distributions will be paid in periodic payments made at intervals not longer than one year. ill The distribution period will be over a life ( or lives) or over a period certain not longer than the period described in subsection 4 or 5. ill Once payments have begun over a period certain. the period certain will not be changed even if the period certain is shorter than the maximum permitted. ill Payments will either be nonincreasing or increase only as follows: {ill By an annual percentage increase that does not exceed the cumulative annual percentage increase in a cost-of-living index that is based on prices of all items and issued by the Bureau of Labor Statistics or by a fIxed annual increase of fIve percent or less. Dll To the extent of the reduction in the amount of the Member's payments to provide for a survivor benefIt upon death. but only if the benefIciary whose life was being used to determine the distribution period described in subsection 4 dies or is no longer the Member's benefIciary pursuant to a qualifIed domestic relations order within the meaning of Section 414(p). 5 ill To provide cash refunds of Accumulated Contributions upon the Member's death. @ To pay increased benefits that result from a Plan amendment. B. Amount Required to be Distributed bv Required BeQinnim!: Date. The amount that must be distributed on orbefore the Member's required beginning date (or. if the Member dies before distributions begin. the date distributions are required to begin under subsection 2.B.) is the payment that is required for one payment interval. The second payment need not be made until the end of the next payment interval even if that payment interval ends in the next calendar year. Payment intervals are the periods for which payments are received. e.g.. bi-monthlv. monthly. semi- annually. or annually. All of the Member's benefit accruals as of the last day of the first distribution calendar year will be included in the calculation of the amount of the annuity payments for payment intervals ending on or after the Member's required beginning date. C. Additional Accruals After First Distribution Calendar Year. Any additional benefits accruing to the Member in a calendar year after the first distribution calendar year will be distributed beginning with the first payment interval ending in the calendar year immediately following the calendar year in which such amount accrues. 4. Requirements for Annuity Distributions That Commence DurinQ a Member's Lifetime. A. Joint Life Annuities Where the Beneficiary Is Not the Member's Soouse. If the Member's interest is being distributed in the form of a ioint and survivor annuity for the ioint lives of the Member and a nonspouse beneficiary. annuity payments to be made on or after the Member's required beginning date to the designated beneficiary after the Member's death must not at any time exceed the applicable percentage of the annuity payment for such period that would have been payable to the Member using the table set forth in O&A-2 of Section 1.401 (a)(9)-6T of the Treasury regulations. lithe form of distribution combines a ioint and survivor annuity for the ioint lives of the Member and a nonspouse beneficiary and a period certain annuity. the requirements in the preceding sentence will apply to annuity payments to be made to the designated beneficiary after the expiration of the period certain. B. Period Certain Annuities. Unless the Member's spouse is the sole designated beneficiary and the form of distribution is a period certain and no life annuity. the period certain for an annuity distribution commencing during the Member's lifetime may not exceed the applicable distribution period for the Member under the Uniform Lifetime Table set forth in Section 1.401 (a)(9)-9 of the Treasury regulations for the calendar year that contains the annuity starting date. If the annuity starting date precedes the year in which the Member reaches age 70. the applicable distribution period for the Member is the distribution period for age 70 under the Uniform Lifetime Table set forth in Section 1.401(a)(9)-9 of the Treasury 6 regulations l'lus the excess of 70 over the age of the Member as of the Member's birthday in the year that contains the annuity starting date. If the Member's spouse is the Member's sole designated beneficiary and the form of distribution is a period certain and no life annuity. the period certain may not exceed the longer of the Member's applicable distribution period. as determined under this subsection 4.B.. or the ioint life and last survivor expectancy of the Member and the Member's spouse as determined under the Joint and Last Survivor Table set forth in Section 1.401(a)(9)-9 of the Treasury regulations. using the Member's and sl'ouse's attained ages as of the Member's and spouse's birthdays in the calendar year that contains the annuity starting date. ~ Reauirements for Minimum Distributions Where Member Dies Before Date Distributions Begin. A. Member Survived bv Designated Beneficiarv. If the Member dies before the date distribution of his or her interest begins and there is a designated beneficiary. the Member's entire interest will be distributed. beginning no later than the time described in subsection 2.B.(1) or 2.B.(2). over the life of the designated beneficiary or over a period certain not exceeding: ill Unless the annuity starting date is before the first distribution calendar year. the life expectancy of the designated beneficiary determined using the beneficiary's age as of the beneficiary's birthday in the calendar year immediately following the calendar year of the Member's death. ill If the annuity starting date is before the first distribution calendar year. the life expectancy of the designated beneficiary determined using the beneficiary's age as of the beneficiary's birthday in the calendar year the contains the annuity starting date. B. No desi!:mated Beneficiarv. If the Member dies before the date distributions begin and there is no designated beneficiary as of September 30 of the year following the year of the Member's death. distribution of the Member's entire interest will be completed by December 31 of the calendar vear containing the fifth anniversary of the Member's death. C. Death of Surviving Soouse Before Distributions to Survivim! Soouse Begin. If the Member dies before the date distribution of his interest begins. the Member's surviving spouse is the Member's sole designated beneficiary. and the surviving spouse dies before distributions to the surviving spouse begin. this subsection 5 will apply as if the surviving spouse were the Member. excel't that the time by which distributions must begin will be determined without regard to subsection 2.B.(1 ). 6. Definitions. A. Designated Beneficiarv. The individual who is designated as the beneficiary under the Plan and is the designated beneficiary under Section 7 40l(a)(9) of the Code and Section 1.401(a)(9)-1. Q&A-4. of the Treasury regulations. B. Distribution Calendar Year. A calendar year for which a minimwn distribution is required. For distributions beginning before the Member's death. the first distribution calendar year is the calendar year immediately preceding the calendar year which contains the Member's required beginning date. For distributions beginning after the Member's death. the fIrst distribution calendar year is the calendar year in which distributions are required to begin pursuant to subsection 2.B. C. Life Exoectancv. Life expectancy as computed by use of the Single Life Table in Section 1.401(a)(9)-9 of the Treasury regulations. D. Reauired Bellinninll Date. The date specifIed in subsection 2.A. SECTION 5: That Ordinance No. 96-20, adopting the amended and restated City of Ocoee Municipal Police Officers' and FirefIghters' Retirement Trust Fund, as subsequently amended, is hereby further amended by amending Section 19, Exemption From Execution; Nonassignability, to read as follows: SECTION 19. DOMESTIC RELATIONS ORDERS: EXEMPTION FROM EXECUTION. NON-ASSIGN ABILITY. 1. Domestic Relations Orders. A. Prior to the entry of any domestic relations order which affects or purports to affect the System's responsibility in connection with the payment of benefIts of a Retiree. the Member or Retiree shall submit the proposed order to the Board for review to determine whether the System may legally honor the order. B. If a domestic relations order is not submitted to the Board for review prior to entry ofthe order. and the System is ordered to take action that it may not legally take. and the System expends administrative or legal fees in resolving the matter. the Member or Retiree who submits such an order will be required to reimburse the System for its expenses in connection with the order. 2. Exemotion from Execution. Non-Assillnabilitv Except as otherwise provided by law, the pensions, annuities, or any other benefIts accrued or accruing to any person under the provisions of this ordinance and the Accwnulated Contributions and the cash securities in the Fund created under this ordinance are hereby exempted from any state, county or municipal tax of the state and shall not be subject to execution, attachment, garnishment or any legal process whatsoever and shall be unassignable. SECTION 6: That Ordinance No. 96-20, adopting the amended and restated City of Ocoee Municipal Police Officers' and FirefIghters' Retirement Trust Fund, as subsequently amended, is hereby further amended by amending Section 25, Direct Transfers of Eligible Rollover Distributions., to read as follows: 8 SECTION 25. DIRECT TRANSFERS OF ELIGIBLE ROLLOVER DISTRIBUTIONS; ELIMINATION OF MANDATORY DISTRIBUTIONS. 1. Rollover Distributions. A. General. This Section applies to distributions made on or after January 1,2002. 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. B. Definitions. (1) Eligible Rollover Distribution: An eligible rollover distribution is any distribution of all or any portion of the balance to the credit of 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 j oint lives (or j oint life expectancies) of the distributee and the distributee's designated Beneficiary, or for a specified period often years or more; any distribution to the extent such distribution is required under section 40 1 (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. (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. This definition shall also apply in the case of an eligible rollover 9 distribution to the surviving Spouse, an eligible retirement plan is an individual retirement account or individual retirement annuity. (3) 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. (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 Member rollover cash contributions and/or direct cash rollovers of distributions made on or after January 1,2002, as follows: A. 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 distribution from a qualified plan described in section 401(a) or 403(a) 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. B. Member Rollover Contributions from lRAs. 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. 1. Elimination of Mandatory Distributions. Notwithstanding any other provision herein to the contrary. in the event this Plan provides for a mandatory (involuntary) cash distribution from the Plan not otherwise required by law. for an amount in excess of one-thousand dollars ($1.000.00). such distribution shall be made from the Plan only upon written request of the Member and completion by the Member of a written election on forms designated by the Board. to either receive a cash lump sum or to rollover the lump sum amount. SECTION 7: That Ordinance No. 96-20, adopting the amended and restated City of Ocoee Municipal Police Officers' and Firefighters' Retirement Trust Fund, as subsequently amended, is hereby further amended by amending Section 27, Deferred Retirement Option Plan, subsection 4., Distribution of DROP Accounts on Termination of Employment, to read as follows: 4. Distribution of DROP Accounts on Termination of Employment. A. Eligibility for Benefits. 10 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 Police Officer or Firefighter. Except as provided in subsection 4.l* E., no amounts shall be paid to a Member from the DROP prior to his termination of employment as a Police Officer or Firefighter. B. Form of Distribution. (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: F. 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 quaHfiedjoint and fifty percent (50%) survi',or annuity with the Member's 8pouse 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 8ection 101(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 of Payment of Distribution. fl-1 Except as otherwise provided in this subsection 4., distribution of a Member's DROP Account shall be made as soon as administratively practicable following the Member's termination of employment Distribution of the amount in a Member's DROP account will not be made unless the Member completes a written request for distribution and a written election. on forms designated by the Board. to either receive a cash lump sum or a rollover of the lump sum amount. ~ In lieu of a distribution as described in pamgraph (1) aboye, a Member may, in accordance '.vith such procedures as the Board shall prescribe, elect to have the distribution of his DROP .^...ccount made as of the first day of any month coincident with or fDllO'tving his termination of employment as a Police Officer or Firefighter; provided, ho'.vever, payments shall be made before the distribution date elected by the Member to the extent necessary to comply '.vith the pro',isions of subsections 1.D. and 1.F. l* .^...ge 8E:1'Ientv and One Half (70 1/2) Required Distribution. 11 & D. ill no eyent sh1l11 the pro~/isions of subsection 1. operate so as to 1l110v,' the distribution of a Member's DROP .\C00unt to be later than the .^...prill follovRng the later of the cll1eooar year in which he terminates his employment as a Police Officer or Firefighter or he attains age seventy and one half (70 1/2). In the e~/ent a Member is required to receive payment while in servioe under the provisions of this subsection D., he sh1l11 receive one ha::ap sum payment on or before his required hegiIllling date equll1 to his entire DROP Account balance and annual lump sum payments thereafter of amounts credited to his DROP .\ccount duf.ng each cll1endar year. Upon the Member's subsequent termination of employment, payment of his DROP .\ccount shall be made in accordance '.vith the pro'/isions of subsection 1.B. 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. ~ E. Distribution Limitation. Notwithstanding any other provision ofthis subsection 4., all distributions from the DROP shall conform to the "Minimum Distribution Of Benefits" provisions as provided for herein. regulations issued under Section 101(0.)(9) of the Code, in0luding the incidentll1 death benefit provisions of Section 101(a)(9)(G) of the Code. Further, such regulations sh1l11 override any DROP provision that is inconsistent "vith Section 101 (a)(9) of the Code. (:h F. Direct Rollover of Certain Distributions. This subsection applies to distributions made on or after January 1, +m 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 25, herein incorporated by reference. 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 affect the remaining portions hereof. SECTION 10. Effective Date. This ordinance shall take effect upon second reading and adoption. 12 PASSED AND ADOPTED this _ day of ATTEST: Beth Eikenberry, City Clerk (SEAL) FOR USE AND RELIANCE ONLY BY THE CITY OF OCOEE, FLORIDA APPROVED AS TO FORM AND LEGALITY THIS _ day of ,2006. CHRISTIANSEN & DEHNER, P.A. Special Counsel By: noc\ocoee \pt\12-08-05 .ord ,2006. APPROVED: CITY OF OCOEE, FLORIDA By: S. Scott Vandergrift, Mayor ADVERTISED READ FIRST TIME READ SECOND TIME AND ADOPTED APPROVEI 13 ORDINANCE NO. 20- 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 DEFINITION OF "CREDITED SERVICE", AMENDING SECTION 9, OPTIONAL FORMS OF BENEFITS; AMENDING SECTION 15, DISTRIBUTION OF BENEFITS; AMENDING SECTION 23, DIRECT TRANSFERS OF ELIGIBLE ROLLOVER DISTRIBUTIONS; AMENDING SECTION 25, DEFERRED RETIREMENT OPTION PLAN; PROVIDING FOR SEVERABILITY OF PROVISIONS; REPEALING ALL ORDINANCES IN CONFLICT HEREWITH AND PROVIDING AN EFFECTIVE DATE. 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 Ordinance No. 96-19, adopting the amended and restated City of Ocoee Municipal General Employees I Retirement Trust Fund, as subsequently amended, is hereby further amended by amending Section 1, Definitions, by amending the definition of "Credited Service, to read as follows: 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. If a Member who is not vested is not reemployed as a General Employee with the City of Ocoee within five (5) years. his Accumulated Contributions. if one-thousand dollars ($1.000.00) or less. shall be returned. If a Member who is not vested is not reemploved within five (5) vears. his Accumulated Contributions. if more than one-thousand dollars ($1.000.00). will be returned onlv upon the written request of the Member and upon completion of a written election to receive a cash lum? sum or to rollover the lump sum amount on forms designated bv the Board. 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 General Employee, but is not eligible to receive Credited Service for this peri<?d or pe~ods of previous ~mploym~n! for be~efit calcul~tion pur:poses, ~en such other credIted servIce shall be used m deterrmrung vestmg as proVIded for m 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 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 Member's Average Final Compensation, Credited Service and benefit accrual rate as of the date the Member ceases to be a General Employee. 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 9, Optional Forms of Benefits, subsection 1.B., to read as follows: 1. B. A retirement income of a modified monthly amount, payable to the Member during the joint lifetime of the Member and a dependent joint pensioner designated by the Member, and following the death of either of them, 100 %, 75 %, 66-2/3 %, or 50 % of such monthly amounts payable to the survivor for the lifetime of the survivor. Except where the Retiree's joint pensioner is his or her Spouse, the present 'Ialue of payments to the Retiree shaH not be less than fifty percent (50 %) of the total present value of payments to the Retiree and his or her joint pensioner payments to the loint pensioner as a percentage of the payments to the Retiree shall not exceed the applicable percentage -provided for in the applicable table in the Treasury regulations 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 15, Distribution of Benefits, to read as follows: SECTION 15. MINIMUM DISTRIBUTION OF BENEFITS. Notwithstanding any other provision of this System to the contrary, a form of retirement income payable from this System after the Effectiye Date of this ordinance, shall satisfy the follo':/ing conditions: h If the retirement income is payable before the Member's death, k It shall either be distributed or commence to the Member not later than .April 1, of the calendar year follO\ving the later of the calendar year in which the Member attains age 70 1/2, or the calendar year in which Member retires, &- The distribution shall commence not later than the calendar year defined above; and a), shall be paid over the life of the Member or o'/er the lifetimes of the Member and Spouse, issue or dependent, or b), shall be paid o'ler the period extending not beyond the life expectancy of the Member and Spouse, issue or dependent. Where a form of retirement income payment has commenced in accordance with the preceding paragraphs and the Member dies before his or her entire interest in the System has been distributed, the remaining portion of such interest in the System shall be distributed no less rapidly than under the form of distribution in effect at the time of the Member's death. ~ If the Member's death occurs bef{)re the distribution of his or her interest in the System has co:mmeneed, Member's entire interest in the System shall be distributed within five (5) years of Member's death, unless it is to be distributed in accordance with the f-ollow~Jlg rules: ~ The Member's remaining interest in the System is payable to his or her Spouse, issue or dependent; &- The remaining interest is to be distributed O~ler the life of the Spouse, issue or dependent or o~/er a period not extending beyond the life expectancy of the Spouse, issue or dependent; and (;;. Such distribution begins '.vithin one year of the Member's death unless the Member's Spouse shall receive the remaining interest in'shich case the distribution need not begin before the date on which the Member would have attained age 70 1/2 and if the Spouse dies before the distribution to the Spouse begins, this Section shall be applied as if the Spouse were the Member. L. General Rules. A. Effective Date. The provisions of this Section will apply for purposes of determining required minimum distributions for calendar years beginning with the 2003 calendar year. B. Precedence. The requirements of this Section will take precedence over any inconsistent provisions of the Plan. C. Reauirements of Treasurv ReQulations Incomorated. All distributions required under this Section will be determined and made in accordance with the Treasury regulations under Section 401(a)(9) of the Code. D. TEFRA Section 242(b)(2) Elections. Notwithstanding the other provisions of this Section other than this subsection I.D.. distributions may be made under a designation made before January 1. 1984. in accordance with Section 242(b )(2) of the Tax Equity and Fiscal Responsibility Act (TEFRA) and the provisions of the plan that related to Section 242(b )(2) of TEFRA. 2. Time and Manner of Distribution. A. Reauired BeQinninQ Date. The Member's entire interest will be distributed. or begin to be distributed. to the Member no later than the Member's required beginning date which shall not be later than April 1 of the calendar year following the later of the calendar year in which the Member attains age seventy and one-half (70 ~) or the calendar year in which the Member retires unless otherwise provided for in the Plan or required by law. B. Death of Member Before Distributions BeQin. Ifthe Member dies before distributions begin. the Member's entire interest will be distributed. or begin to be distributed no later than as follows: ill If the Member's surviving spouse is the Member's sole designated beneficiary. then distributions to the surviving spouse will begin by December 31 of the calendar year immediately following the caiendar year in which the Member died. or by December 31 of the calendar year in which the Member would have attained age 70 K if later. ill If the Member's surviving spouse is not the Member's sole designated beneficiary. then. distributions to the designated beneficiary will begin by December 31 of the calendar year immediatelv following the calendar vear in which the Member died. ill If there is no designated beneficiary as of September 30 of the year following the year of the Member's death. the Member's entire interest will be distributed by December 31 of the calendar year containing the fifth anniversary of the Member's death. ill If the Member's surviving spouse is the Member's sole designated beneficiary and the surviving spouse dies after the Member but before distributions to the surviving spouse begin. this subsection 2.B.. other than subsection 2.B.n). will apply as if the surviving spouse were the Member. For l'UfPoses of this subsection 2.B. and subsection 5.. distributions are considered to begin on the Member's required beginning date or. if subsection 2.B.( 4) applies. the date of distributions are required to begin to the surviving spouse under subsection 2.B.n). If annuitv payments irrevocably commence to the Member before the Member's required beginning date (or to the Member's surviving spouse before the date distributions are required to begin to the surviving spouse under subsection 2.B.n )). the date distributions are considered to begin is the date distributions actually commence. C. Form of Distribution. Unless the Member's interest is distributed in the form of an annuity purchased from an insurance company or in a single sum on or before the required beginning date. as of the first distribution calendar year distributions will be made in accordance of subsections 3. 4 and 5 of this Section. If the Member's interest is distributed in the form of an annuity purchased from an insurance company. distributions thereunder will be made in accordance with the requirements of Section 401 (a)(9) of the Code and Treasury regulations. Any part of the Member's interest which is in the form of an individual account described in Section 414(k) of the Code will be distributed in a manner satisfying the requirements of Section 401(a)(9) of the Code and Treasury regulations that apply to individual accounts. J..:. Determination of Amount to be Distributed Each Year. A. General Annuity Requirements. If the Member's interest is paid in the form of annuity distributions under the Plan. payments under the annuity will satisfy the following requirements: ill The annuity distributions will be paid in periodic payments made at intervals not longer than one year. ill The distribution period will be over a life (or lives) or over a period certain not longer than the period described in subsection 4 or 5. ill Once payments have begun over a period certain. the period certain will not be changed even if the {Jeriod certain is shorter than the maximum permitted. Payments will either be nonincreasing or increase only as follows: W By an annual percentage increase that does not exceed the cumulative annual percentage increase in a cost-of-living index that is based on prices of all items and issued by the Bureau of Labor Statistics or by a fixed annual increase of five percent or less. ill {h} To the extent of the reduction in the amount of the Member's payments to provide for a survivor benefit upon death. but only if the beneficiary whose life was being used to determine the distribution period described in subsection 4 dies or is no longer the Member's beneficiary pursuant to a qualified domestic relations order within the meaning of Section 414(p ). ill To provide cash refunds of Accumulated Contributions upon the Member's death. @ To pay increased benefits that result from a Plan amendment. B. Amount Required to be Distributed bv Required Be!!innin!! Date. The amount that must be distributed on or before the Member's required beginning date (or, if the Member dies before distributions begin. the date distributions are required to begin under subsection 2.B.) is the payment that is required for one {Jayment interval. The second {Jayment need not be made until the end of the next payment interval even if that payment interval ends in the next calendar year. Payment intervals are the periods for which payments are received. e.g.. bi-monthly. monthly. semi- annuallv. or annually. All of the Member's benefit accruals as of the last day of the first distribution calendar year will be included in the calculation of the amount of the annuity payments for payment intervals ending on or after the Member's required beginning date. C. Additional Accruals After First Distribution Calendar Year. Any additional benefits accruing to the Member in a calendar year after the first distribution calendar year will be distributed beginning with the first payment interval ending in the calendar year immediately following the calendar year in which such amount accrues. 4. Requirements for Annuity Distributions That Commence Durin!! a Member's Lifetime. A. Joint Life Annuities Where the Beneficiary Is Not the Member's Soouse. If the Member's interest is being distributed in the form ofa ioint and survivor annuity for the ioint lives of the Member and a nonspouse beneficiary. annuity payments to be made on or after the Member's required beginning date to the designated beneficiary after the Member's death must not at anv time exceed the applicable percentage of the annuitv payment for such period that would have been pavable to the Member using the table set forth in Q&A-2 of Section 1.401 (a)(9)-6T of the Treasury regulations. If the form of distribution combines a ioint and survivor annuity for the ioint lives of the Member and a nonspouse beneficiary and a period certain annuitv. the requirements in the preceding sentence will applv to annuity payments to be made to the designated beneficiary after the expiration of the period certain. B. Period Certain Annuities. Unless the Member's spouse is the sole designated beneficiary and the form of distribution is a period certain and no life annuity. the period certain for an annuitv distribution commencing during the Member's lifetime mav not exceed the applicable distribution period for the Member under the Uniform Lifetime Table set forth in Section 1.401(a)(9)-9 of the Treasury regulations for the calendar year that contains the annuity starting date. If the annuity starting date precedes the year in which the Member reaches age 70. the applicable distribution period for the Member is the distribution period for age 70 under the Uniform Lifetime Table set forth in Section 1.401(a)(9)-9 of the Treasury regulations plus the excess of 70 over the age of the Member as of the Member's birthday in the vear that contains the annuity starting date. If the Member's spouse is the Member's sole designated beneficiary and the form of distribution is a period certain and no life annuity. the period certain may not exceed the longer of the Member's applicable distribution period. as determined under this subsection 4.B.. or the ioint life and last survivor expectancy of the Member and the Member's spouse as determined under the Joint and Last Survivor Table set forth in Section 1.401(a)(9)-9 of the Treasury regulations. using the Member's and spouse's attained ages as of the Member's and spouse's birthdavs in the calendar vear that contains the annuity starting date. 5. Requirements for Minimum Distributions Where Member Dies Before Date Distributions Begin. A. Member Survived bv Designated Beneficiarv. If the Member dies before the date distribution of his or her interest begins and there is a designated beneficiarv. the Member's entire interest will be distributed. beginning no later than the time described in subsection 2.B.(1) or 2.B.(2). over the life of the designated beneficiary or over a period certain not exceeding: ill Unless the annuity starting date is before the first distribution calendar vear. the life expectancy of the designated beneficiary determined using the beneficiary's age as of the beneficiary's birthdav in the calendar vear immediatelv following the calendar year of the Member's death. ill If the annuity starting date is before the first distribution calendar year. the life expectancv of the designated beneficiary determined using the beneficiary's age as of the beneficiary's birthday in the calendar vear the contains the annuity starting date. B. No designated Beneficiary. If the Member dies before the date distributions begin and there is no designated beneficiary as of September 30 of the vear following the vear of the Member's death. distribution of the Member's entire interest will be completed by December 31 of the calendar vear containing the fifth anniversary of the Member's death. C. Death of SurvivinlZ Soouse Before Distributions to SurvivinlZ Soouse BelZin. If the Member dies before the date distribution of his interest begins, the Member's surviving s?ouse is the Member's sole designated beneficiary, and the surviving spouse dies before distributions to the surviving spouse begin, this subsection 5 will apply as if the surviving spouse were the Member, except that the time by which distributions must begin will be determined without regard to subsection 2.B.(1 ). 6. Definitions. A. DesilZnated Beneficiary. The individual who is designated as the beneficiary under the Plan and is the designated beneficiary under Section 40l(a)(9) of the Code and Section 1.401(a)(9)-l, Q&A-4, of the Treasury regulations. B. Distribution Calendar Year. A calendar year for which a minimum distribution is required. For distributions beginning before the Member's death, the first distribution calendar year is the calendar year immediately preceding the calendar year which contains the Member's required beginning date. For distributions beginning after the Member's death, the first distribution calendar year is the calendar year in which distributions are required to begin ?ursuant to subsection 2.B. C. Life Exoectancv. Life expectancy as computed by use of the Single Life Table in Section 1.401(a)(9)-9 of the Treasury regulations. D. Reauired BelZinninlZ Date. The date specified in subsection 2.A. SECTION 5: That Ordinance No. 96-19, adopting the amended and restated City of Ocoee Municipal General Employees I 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. DIRECT TRANSFERS OF ELIGIBLE ROLLOVER DISTRIBUTIONS: ELIMINATION OF MANDATORY DISTRIBUTIONS. 1. Rollover Distributions. A. General. This Section applies to distributions made on or after January 1,2002. 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. B. Definitions. (1) Eligible Rollover Distribution: An eligible rollover distribution is any distribution of all or any portion of the balance to the credit of 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 40 1 (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. (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. This definition shall also apply in the case of an eligible rollover distribution to the surviving Spouse. (3) 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. (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, solely for the purpose of purchasing Credited Service as provided herein, permissible Member requested transfers of funds from other retirement or pension plans, Member rollover cash contributions and/or direct cash rollovers of distributions made on or after January 1, 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 distribution from a qualified plan described in section 401 (a) or 403(a) 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 IRAs. 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. 1. Elimination of Mandatorv Distributions. Notwithstanding any other provision herein to the contrary. in the event this Plan ?rovides for a mandatory (involuntary) cash distribution from the Plan not otherwise required by law. for an amount in excess of one-thousand dollars ($1.000.00), such distribution shall be made from the Plan only upon written request of the Member and com?letion by the Member of a written election on forms designated by the Board. to either receive a cash lump sum or to rollover the lump sum amount. 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 amending Section 25, Deferred Retirement Option Plan, subsection 4., Distribution of DROP Accounts on Termination of Employment, to read as follows: 4. Distribution of DROP Accounts on Termination of Employment. A. Eligibility for 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.:Q.,. E., no amounts shall be paid to a Member from the DROP prior to his termination of employment as a General Employee. B. Form of Distribution. (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. F. 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 seleoted is not a qualified j oint and fifty peroent (50%) survivor annuity vlith the Member's Spouse as the Beneficiary, the annuity payable to the Member and thereafter to his Beneficiary shall be subjeet to the incidental death benefit rule as described in Section 101(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 of Payment of Distribution. tB Except as otherwise provided in this subsection 4., distribution of a Member's DROP Account shall be made as soon as administratively practicable following the Member's termination of employment. Distribution of the amount in a Member's DROP account will not be made unless the Member completes a written request for distribution and a written election. on forms designated bv the Board. to either receive a cash lump sum or a rollover of the lump sum amount. ~ In lieu of a distribution as described in paragraph (1) aboY0, a Member may, in accordance "vith such procedures as the Board shaH prescribe, elect to ha~;e the distribution of his DROP 4^~CCOunt made as of the first day of any month coincident "vith or follo',v...ng his termination of employment as a Genera:!. Employee; proyided, ho';vever, payments sha:!.l be made before the distribution date elected by the Member to the extent necessary to comply vlith the provisions of subsections 1.D. and 1.F. I};. "^~ge Se'/enty and One Ha:!.f (70 1/2) Required Distribution. In no event shall the provisions of subsection 1. operate so as to allo'?; the distribution of a Member's DROP Account to be later than the April 1 following the later of the calendar year in '.vhich he terminates his employment as a General Employee or he attains age seyenty and one half (70 1/2). In the event a Member is required to receiYe payment while in service under the proyisions ohhis subsection D., he shall recei'/e one lump sum payment on or before his required beginning date equal to his entire DROP 4\CCOunt balance and annual lump sum. payments thereafter of amounts credited to his DROP "^~ccount ck:t:r...ng each calendar year. Upon the Member's subsequent termination of employment, payment of his DROP AccOlmt shall be made in accordance \vith the provisions of subsection 1.B. & D. 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. ~ Distribution Limitation. E. Notwithstanding any other provision of this subsection 4., all distributions from the DROP shall conform to the "Minimum Distribution Of Benefits" provisions as provided for herein. regulations issued under Section 101 (a)(9) of the Code, including the incidemal death benefit proyisions of Section 101 (a)(9)(G) of the Code. Further, such regulations shall o'/erride any DROP provision that is inconsistent '.vith Section 101 (a)(9) of the Code. G:- Direct Rollover of Certain Distributions. F. This subsection applies to distributions made on or after January 1,2002. Notwithstanding any provision of the DROP to the contrary that v,'ould otherwise limit a distributee's election under this subsection, a distributee may elect, at the time and in the manner prescribed by the Bomd, 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. SECTION 7: If any section, subsection, sentence, clause, phrase of this ordinance, or the particular application thereof shall be held invalid by any court, administrative agency, or other body with appropriate jurisdiction, the remaining section, subsection, sentences, clauses, or phrases under application shall not be affected thereby. SECTION 8. Repeal of Ordinances. All ordinances or parts of ordinances in conflict herewith are hereby repealed. SECTION 9. Effective Date. This ordinance shall take effect upon second reading and adoption. PASSED AND ADOPTED this _ day of ,2006. ATTEST: APPROVED: CITY OF OCOEE, FLORIDA By: Beth Eikenberry, City Clerk S. Scott Vandergrift, Mayor (SEAL) ADVERTISED , 2006 READ FIRST TIME , 2006 READ SECOND TIME AND ADOPTED ,2006 FOR USE AND RELIANCE ONLY BY THE CITY OF OCOEE, FLORIDA APPROVED AS TO FORM AND LEGALITY This day of , 2006 APPROVED BY THE OCOEE CITY COMMISSION AT A MEETING HELD ON , 2006 UDER AGENDA ITEM NO. CHRISTIANSEN & DEHNER, P.A. Special Counsel By: noclocoeelgenl12-07-OS .ord