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HomeMy WebLinkAbout2018-046 Municipal General Employees' Retirement Trust Fund ORDINANCE NO. 2018-046 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 1, DEFINITIONS BY AMENDING THE DEFINITIONS OF "ACTUARIAL EQUIVALENT", "CREDITED SERVICE" AND "SPOUSE"; AMENDING SECTION 4, FINANCES AND FUND MANAGEMENT; AMENDING SECTION 6, BENEFIT AMOUNTS AND ELIGIBILITY; AMENDING SECTION 9, OPTIONAL FORMS OF BENEFITS; AMENDING SECTION 14, MAXIMUM PENSION; AMENDING SECTION 24, REEMPLOYMENT AFTER RETIREMENT; 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 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 1, Definitions, by amending the definitions of "Actuarial Equivalent", "Credited Service" and "Spouse", to read as follows: * * * Actuarial Equivalent means a benefit or amount of equal value, based upon the RP 2000 Combined Healthy Unisex Mortality Table and an interest rate of seven and three quarters percent (7.75%) per annum equal to the investment return assumption set forth in the last actuarial valuation report approved by the Board. This definition may only be amended by the City pursuant to the recommendation of the Board using assumptions adopted by the Board with the advice of the plan's actuary, such that actuarial assumptions are not subject to City discretion. * * * Credited Service means the total number of years and fractional parts of years of service as a General Employee with Member contributions, when required, or effective October 1, 2006 as a Mayor or a Commissioner, omitting intervening years or fractional parts of years when such Member was not employed by the City as a General Employee or an elected official. 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 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 or her Accumulated Contributions, if more than one-thousand dollars ($1,000.00), will be returned only upon the written request of the Member and upon 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 his or her Accumulated Contributions, all of his or her Page 1 rights and benefits under the System are forfeited and terminated. Those Members who terminated employment with the City of Ocoee prior to October 1, 1991 and who became or will become reemployed on or after October 1, 1991 shall be granted Credited Service for the total number of years and fractional parts of years of service as a General Employee with the City of Ocoee prior to October 1, 1991. The years or parts of a year that a member performs "Qualified Military Service" consisting of voluntary or involuntary "service in the uniformed services" as defined in the Uniformed Services Employment and Reemployment Rights Act (USERRA) (P.L.103-353), after separation from employment as a General Employee 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 is entitled to reemployment under the provisions of USERRA. B. The Member returns to his or her employment as a General Employee within one (1) year following the earlier of the date of his or her military discharge or his or her release from service, unless otherwise required by USERRA. C. The Member deposits into the Fund the same sum that the Member would have contributed, if any, if he or she had remained a General Employee during his or her absence. The maximum credit for military service pursuant to this subdivision shall be five (5) years. The Member must deposit all missed contributions within a period equal to three times the period of military service, but not more than five (5) years, following re-employment or he or she will forfeit the right to receive credited service for his or her military service pursuant to this paragraph. D. This paragraph is intended to satisfy the minimum requirements of USERRA. To the extent that this paragraph does not meet the minimum standards of USERRA, as it may be amended from time to time, the minimum standards shall apply. In the event a Member dies on or after January 1, 2007, while performing USERRA Qualified Military Service, the beneficiaries of the Member are entitled to any benefits (other than benefit accruals relating to the period of qualified military service) as if the Member had resumed employment and then died while employed. Beginning January 1, 2009, to the extent required by Section 414(u)(12) of the Code, an individual receiving differential wage payments (as defined under Section 3401(h)(2) of the Code) from an employer shall be treated as employed by that employer, and the differential wage payment shall be treated as compensation for purposes of applying the limits on annual additions under Section 415(c) of the Code. This provision shall be applied to all similarly situated individuals in a reasonably equivalent manner. Leave conversions of unused accrued paid time off shall not be permitted to be applied toward the accrual of Credited Service either during each Plan Year of a Member's employment with the City or in the Plan Year in which the Member terminates employment. In the event that a Member (except a Mayor or Commissioner 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 period or periods of previous employment for benefit calculation purposes, then such other credited service shall be used in determining vesting as provided for in Section 8, and for determining eligibility for early or normal retirement. Such other credited service will not be considered in determining benefits under this System. Unless otherwise provided herein, only his or her Credited Service and Salary under this System on or after his or her latest date of membership in this System will be considered for benefit calculation. In Page 2 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. * * * Spouse means the lawful wife or husband of a Member or Retiree at the time benefits become payable. * * * SECTION 3: 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 4, Finance and Fund Management, subsection 6.B., to read as follows: * * * B. All monies paid into or held in the Fund shall be invested and reinvested by the Board and the investment of all or any part of such funds shall be subject to the following: (1) Notwithstanding any limitation provided for in the Florida Statutes prior City ordinances to the contrary (unless such limitation may not be amended by local ordinance) or any limitation in prior city ordinances to the contrary, all monies paid into or held in the Fund may be invested and reinvested in such securities, investment vehicles or property wherever situated and of whatever kind, as shall be approved by the Board, including but not limited to common or preferred stocks, bonds, and other evidences of indebtedness or ownership. In no event, however, shall more than ten percent of the assets of the Fund be invested in foreign securities, unless the Florida Statutes , are amended to remove or change or this mandatory restriction. (2) The Board shall develop and adopt a written investment policy statement setting forth permissible types of investments, goals and objectives of investments and setting quality and quantity limitations on investments in accordance with the recommendations of its investment consultants. The investment policy statement shall be reviewed by the Board at least annually, and shall be followed by the Board in making its investment decisions. (3) In addition, the Board may, upon recommendation by the Board's investment consultant, make investments in group trusts meeting the requirements of Internal Revenue Service Revenue Ruling 81- 1001 and Revenue Ruling 2011-1, IRS Notice 2012-6 and Revenue Ruling 2014-24 or successor rulings or guidance of similar import, and operated or maintained exclusively for the commingling and collective investment of monies, provided that the funds in the group trust consist exclusively of trust assets held under plans qualified under Section 401(a) of the Code, individual retirement accounts that are exempt under Section 408(e) of the Code, eligible governmental plans that meet the requirements of Section 457(b) Page 3 of the Code, and governmental plans under 401(a)(24) of the Code. For this purpose, a trust includes a custodial account or separate tax favored account maintained by an insurance company that is treated as a trust under Section 401(f) or under Section 457(g)(3) of the Code. While any portion of the assets of the Fund are invested in such a group trust, such group trust is itself adopted as a part of the System or Plan. (a) Any collective or common group trust to which assets of the fund are transferred pursuant to subsection (3) shall be adopted by the board as part of the plan by executing appropriate participation, adoption agreements, and/or trust agreements with the group trust's trustee. (b) The separate account maintained by the group trust for the plan pursuant to subsection (3) shall not be used for, or diverted to, any purpose other than for the exclusive benefit of the members and beneficiaries of the plan. (c) For purposes of valuation, the value of the separate account maintained by the group trust for the plan shall be the fair market value of the portion of the group trust held for the plan, determined in accordance with generally recognized valuation procedures. * * * SECTION 4: 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 6., Benefit Amounts and Eligibility, subsection 1,Normal Retirement Date, to read as follows: 1. Normal Retirement Age and Date. A Member (except a Mayor or Cerrirsioner Member) who became a Member . coincident with,or next following the attainment of age sixty (60) regardlessof the years of Member on or after September 18, 2012 shall have a normal retirement date of the first day of the month coincident with, or next following the attainment of age sixty two (62) and the retirement date shall be the first day of the month coincident with, or next following the attainment of age sixty(60)and the completion of nine (9) years of Credited Service. A Member each Member shall become 100% vested in his or her accrued benefit on the Member's normal retirement date. Normal retirement under the System is Retirement from employment with the City on or after the normal retirement date. A Member's (except a Mayor or Commissioner Member) who became a Member prior to September 18, 2012 his normal retirement age is the attainment of age sixty (60) regardless of the years of Credited Service. A Member (except a Mayor or Commissioner Member) who became a Member on or after September 18, 2012 his normal retirement age is the attainment of age sixty-two (62) and the completion of seven (7) years of Credited Service. A Mayor or Commissioner Member's normal retirement age is the attainment of age sixty (60) and the completion of nine (9) years of Credited Service. Each Member shall become one hundred Page 4 percent (100%) vested in his accrued benefit at normal retirement age. A Member's normal retirement date shall be the first day of the month coincident with or next following the date the Member retires from the City after attaining normal retirement age. * * * SECTION 5: 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 9, Optional Forms of Benefits, subsections 1.D. and 2., to read as follows: * * * D. A member may elect a percentage of benefit in a lump sum as follows: (1) Five (5) percent of the total actuarial equivalent value of the benefit paid as a lump sum benefit with ninety-five (95) percent paid under the normal form or as per A., B. or C. above. (2) Ten (10) percent of the total actuarial equivalent value of the benefit paid as a lump sum benefit with ninety (90) percent paid under the normal form or as per A., B. or C. above. (3) Fifteen (15) percent of the total actuarial equivalent value of the benefit paid as a lump sum benefit with eighty-five (85) percent paid under the normal form or as per A., B. or C. above. (4) Twenty (20) percent of the total actuarial equivalent value of the benefit paid as a lump sum benefit with eighty (80) percent paid under the normal form or as per A., B. or C. above. 2. The Member, upon electing any option of this Section, will designate the joint pensioner (subsection 1.B., above) or Beneficiary (or Beneficiaries) to receive the benefit, if any, payable under the System in the event of Member's death, and will have the power to change such designation from time to time. Such designation will name a joint pensioner or one or more primary Beneficiaries where applicable. If a Member has elected an option with a joint pensioner or Beneficiary and Member's retirement income benefits have commenced, Member may thereafter change his or her designated Beneficiary at any time, but may only change his or her joint pensioner if the designated joint pensioner and the Member were married at the time of Member's Retirement and are divorced subsequent thereto and the joint pensioner is alive at the time of the change. In the absence of proof of good health of the joint pensioner being replaced, the actuary will assume that the joint pensioner has deceased for purposes of calculating the new payment. * * * SECTION 6: 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 14, Maximum Pension, subsections 6., Less than Ten (10) Years of Participation or Service and 12.B. and adding subsection 13, Effect of Direct Rollover on 415(b) Limit, to read as follows: * * * 6. Less than Ten (10) Years of Participation or Service. Page 5 The maximum retirement benefits payable under this Section to any Member who has completed less than ten (10) years of Credited Service participation with the City shall be the amount determined under subsection 1 of this Section multiplied by a fraction, the numerator of which is the number of the Member's years of Credited Service participation and the denominator of which is ten (10). The reduction provided by this subsection cannot reduce the maximum benefit below 10% of the limit determined without regard to this subsection. The reduction provided for in this subsection shall not be applicable to pre-retirement death benefits paid pursuant to Section 7. * * * 12. B. No Member of the System shall be allowed to receive a retirement benefit or pension which is in part or in whole based upon any service with respect to which the Member is already receiving, or will receive in the future, a retirement benefit or pension from a different employer's retirement system or plan. This restriction does not apply to social security benefits or federal benefits under Chapter 67 1223, Title 10, U.S. Code. 13. Effect of Direct Rollover on 415(b) Limit. If the plan accepts a direct rollover of an employee's or former employee's benefit from a defined contribution plan qualified under Code Section 401(a) which is maintained by the employer, any annuity resulting from the rollover amount that is determined using a more favorable actuarial basis than required under Code Section 417(e) shall be included in the annual benefit for purposes of the limit under Code Section 415(b). SECTION 7: 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 24, Reemployment After Retirement, to read as follows: SECTION 24. REEMPLOYMENT AFTER RETIREMENT. 1. Any Retiree who is retired under this System, except for disability retirement as previously provided for, may be reemployed by any public or private employer, except the City, and may receive compensation from that employment without limiting or restricting in any way the retirement benefits payable under this system. Reemployment by the City shall be subject to the limitations set forth in this Section. 2. After normal retirement. Any retiree who is retired under normal retirement pursuant to this system and who is reemployed by the city in any capacity, shall upon being reemployed, continue receipt of retirement benefits during any such employment period if he is at least age sixty-two (62), otherwise the System shall discontinue receipt of benefits until he reaches age sixty-two (62). A retiree who returns to work under the provisions of this section shall not be eligible for membership in this system, and, therefore, shall not accumulate additional credited service for subsequent periods of employment described in this section, shall not be required to make contributions to the system, nor shall he or she be eligible for any other benefit other than the retiree's normal retirement benefit. Page 6 3. Any Retiree who is retired under normal retirement pursuant to this System and who is reemployed by the City after that retirement and, by virtue of that reemployment is ineligible to participate in this System, shall, during the period of such reemployment, continue to receive retirement benefits previously earned if he is at least age sixty-two (62), otherwise the System shall discontinue receipt of benefits until he reaches age sixty-two (62). Former DROP participants shall begin receipt of benefits under these circumstances. 4. After early retirement. Any Retiree who is retired under early retirement pursuant to this System and who subsequently becomes an employee of the City in any capacity, shall discontinue receipt of benefits from the System until the earlier of termination of employment or such time as the reemployed Retiree reaches -- .. . -- - -- . . - - - - - - -- - - -- - - - •- -- - --- -• . - -- age sixty-two (62). A Retiree who returns to work under the provisions of this Section shall not be eligible for membership in the System, and, therefore, shall not accumulate additional Credited Service for subsequent periods of employment described in this section, shall not be required to make contributions to the system, nor shall he or she be eligible for any other benefit other than the Retiree's early retirement benefit when he or she again becomes eligible as provided herein. Retirement pursuant to an early retirement incentive program shall be deemed early retirement for purposes of this Section if the Member was permitted to retire prior to the customary retirement date provided for in the System at the time of retirement. 5. Reemployment of terminated vested persons. Reemployed terminated vested persons shall not be subject to the provisions of this section until such time as they begin to actually receive benefits. Upon receipt of benefits, terminated vested persons shall be treated as normal or early Retirees for purposes of applying the provisions of this section and their status as an early or normal retiree shall be determined by the date they elect to begin to receive their benefit. 6. DROP Participants. Members or r Retirees who are or were in the Deferred Retirement Option Plan shall, following termination of employment after DROP participation, have the options provided for in this section for reemployment. SECTION 8: 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 25, Deferred Retirement Option Plan, to read as follows: SECTION 25. DEFERRED RETIREMENT OPTION PLAN. 1. Definitions. As used in this Section 25, the following definitions apply:" A. "DROP" -- The Ocoee General Employees' Deferred Retirement Option Plan. Page 7 B. "DROP Account" -- The account established for each DROP participant under subsection 3. C. "Total Return of the Assets" -- For purposes of calculating earnings on a Member's DROP Account pursuant to subsection 3.B.(2)(b)., for each fiscal year quarter, the percentage increase (or decrease) in the interest and dividends earned on investments, including realized and unrealized gains (or losses), of the total Plan assets. 2. Participation. A. Eligibility to Participate. In lieu of terminating his or her employment as a General Employee, any Member who became a Member prior to September 18, 2012 and who is eligible for normal retirement under the System may elect to defer receipt of such service retirement pension and to participate in the DROP. Any Member who became a Member on or after September 18, 2012 must have a minimum of ten (10) years Credited Service and be eligible for normal retirement. B. Election to Participate. A Member's election to participate in the DROP must be made in writing in a time and manner determined by the Board and shall be effective on the first day of the first calendar month which is at least fifteen (15) business days after it is received by the Board. C. Period of participation. A Member who became a Member prior to September 18, 2012 who elects to participate in the DROP under subsection 2.B., shall participate in the DROP for a period not to exceed eighty-four(84) months beginning on the date which the Member first becomes eligible for normal retirement. A Member who became a Member on and after September 18, 2012 who elects to participate in the DROP under section 2.B., shall participate in the DROP for a period not to exceed sixty (60) months beginning on the date which the Member first becomes eligible for normal retirement. An election to participate in the DROP shall constitute an irrevocable election to resign from the service of the City at the time of election into the DROP. A Member may participate only once. D. Termination of Participation. (1) A Member's participation in the DROP shall cease at the earlier of: (a) the end of his or her permissible period of participation in the DROP as determined under subsection 2.C.; or (b) termination of his or her employment as a General Employee. Page 8 (2) Upon the Member's termination of participation in the DROP, pursuant to subsection(a) above, all amounts provided for in subsection 3.B., including monthly benefits and investment earnings and losses or interest, shall cease to be transferred from the System to his or her DROP Account. Any amounts remaining in his or her DROP Account shall be paid to him or her in accordance with the provisions of subsection 4. when he or she terminates his or her employment as a General Employee. (3) A Member who terminates his or her participation in the DROP under this subsection 2.D. shall not be permitted to again become a participant in the DROP. E. Effect of DROP Participation on the System. (1) A Member's Credited Service and his or her accrued benefit under the System shall be determined on the date his or her election to participate in the DROP first becomes effective. For purposes of determining the accrued benefit, the Member's Salary for the purposes of calculating his or her Average Final Compensation shall include an amount equal to any lump sum payments which would have been paid to the Member and included as Salary as defined herein, had the Member retired under normal retirement and not elected DROP participation. Member contributions attributable to any lump sums used in the benefit calculation and not actually received by the Member shall be deducted from the first payments to the Member's DROP Account. The Member shall not accrue any additional Credited Service or any additional benefits under the System (except for any additional benefits provided under any cost-of-living adjustment for Retirees in the System) while he or she is a participant in the DROP. After a Member commences participation, he or she shall not be permitted to again contribute to the System nor shall he or she be eligible for disability or pre-retirement death benefits, except as provided for in Section 24, Reemployment After Retirement. (2) No amounts shall be paid to a Member from the System while the Member is a participant in the DROP. Unless otherwise specified in the System, if a Member's participation in the DROP is terminated other than by terminating his or her employment as a General Employee, no amounts shall be paid to him or her from the System until he or she terminates his or her employment as a General Employee. Unless otherwise specified in the System, amounts transferred from the System to the Member's DROP Account shall be paid directly to the Member only on the termination of his or her employment as a General Employee. 3. Funding. A. Establishment of DROP Account. A DROP Account shall be established for each Member participating in the DROP. A Members whose DROP participation began prior to September 18, 2012 shall have a DROP Account consisting of amounts Page 9 transferred to the DROP under subsection 3.B., and earnings or interest on those amounts. A Member whose DROP participation began on or after September 18, 2012 shall have a DROP Account consisting of amounts transferred to the DROP under subsection 3.C. and interest on those amounts. B. Transfers From Retirement System. (1) As of the first day of each month of a Member's period of participation in the DROP, the monthly retirement benefit he or she would have received under the System had he or she terminated his or her employment as a General Employee and elected to receive monthly benefit payments thereunder shall be transferred to his or her DROP Account, except as otherwise provided for in subsection 2.D.(2). A Member's period of participation in the DROP shall be determined in accordance with the provisions of subsections 2.C. and 2.D., but in no event shall it continue past the date he or she terminates his or her employment as a General Employee. (2) Except as otherwise provided in subsection 2.D.(2), a Member's DROP Account under this subsection 3.B. shall be debited or credited after each fiscal year quarter with either: (a) Interest at an effective rate of six and one-half percent (6.5%) per annum compounded monthly determined on the last business day of the prior month's ending balance and credited to the Member's DROP Account as of such date (to be applicable to all current and future DROP participants); or (b) Earnings, to be credited or debited to the Member's DROP Account, determined as of the last business day of each fiscal year quarter and debited or credited as of such date, determined as follows: The average daily balance in a Member's DROP Account shall be credited or debited at a rate equal to the actual net rate of investment return realized by the System for that quarter. "Net investment return" for the purpose of this paragraph is the total return of the assets in which the Member's DROP Account is invested by the Board net of brokerage commissions, transaction costs and management fees. For purposes of calculating earnings on a Member's DROP Account pursuant to this subsection 3.B.(2)(b)., brokerage commissions, transaction costs, and management fees shall be determined for each quarter by the investment consultant pursuant to contracts with fund managers as reported in the custodial statement. The investment consultant shall report these quarterly contractual fees to the Board. The investment consultant shall also report the Page 10 net investment return for each manager and the net investment return for the total Plan assets. Upon electing participation in the DROP, the Member shall elect to receive either interest or earnings on his or her account to be determined as provided above. The Member may, in writing, elect to change his or her election only once during his or her DROP participation. An election to change must be made prior to the end of a quarter and shall be effective beginning the following quarter. (3) A Member's DROP Account shall only be credited or debited with earnings or interest and monthly benefits while the Member is a participant in the DROP. A Member's final DROP account value for distribution to the Member upon termination of participation in the DROP shall be the value of the account at the end of the quarter immediately preceding termination of participation for participants electing the net plan return and at the end of the month immediately preceding termination of participation for participants electing the flat interest rate return plus any monthly periodic additions made to the DROP account subsequent to the end of the previous quarter or month, as applicable, and prior to distribution. If a Member fails to terminate employment after participating in the DROP the permissible period of DROP participation, then beginning with the Member's 1st month of employment following the last month of the permissible period of DROP participation, the Member's DROP Account will no longer be credited or debited with earnings or interest, nor will monthly benefits be transferred to the DROP account. All such non-transferred amounts shall be forfeited and continue to be forfeited while the Member is employed by the City, and not cost-of-living adjustments shall be applied to the Member's credit during such period of continued employment. A Member employed by the City after the permissible period of DROP participation will still not be eligible for pre-retirement death or disability benefits, nor will he or she accrue additional Credited Service, except as provided for Section 24, Reemployment After Retirement. C. Transfers From Retirement System. (1) As of the first day of each month of a Member's period of participation in the DROP, the monthly retirement benefit he or she would have received under the System had he or she terminated his or her employment as a General Employee and elected to receive monthly benefit payments thereunder shall be transferred to his or her DROP Account, except as otherwise provided for in subsection 2.D.(2). A Member's period of participation in the DROP shall be determined in accordance with the provisions of subsections 2.C. and 2.D., but in no event shall it continue past the date he or she terminates his or her employment as a General Employee. (2) Except as otherwise provided in subsection 2.D.(2), a Member's DROP Account under this subsection 3.C. shall be credited with Page 11 interest at an effective rate of three percent (3%) per annum compounded monthly on the prior month's ending balance. (3) A Member's DROP Account shall only be credited with interest and monthly benefits while the Member is a participant in the DROP. A Member's final DROP account value for distribution to the Member upon termination of participation in the DROP shall be the value of the account at the end of the quarter immediately preceding termination of participation plus any monthly periodic additions made to the DROP account subsequent to the end of the previous quarter and prior to distribution. If a Member fails to terminate employment after participating in the DROP the permissible period of DROP participation, then beginning with the Member's 1st month of employment following the last month of the permissible period of DROP participation, the Member's DROP Account will no longer be credited with interest, nor will monthly benefits be transferred to the DROP account. All such non-transferred amounts shall be forfeited and continue to be forfeited while the Member is employed by the City, and no cost- of-living adjustments shall be applied to the Member's credit during such period of continued employment. A Member employed by the City after the permissible period of DROP participation will still not be eligible for pre-retirement death or disability benefits, nor will he or she accrue additional Credited Service, except as provided for Section 24, Reemployment After Retirement. 4. Distribution of DROP Accounts on Termination of Employment. A. Eligibility for Benefits. A Member shall receive the balance in his or her DROP Account in accordance with the provisions of this subsection 4. upon his or her termination of employment as a General Employee. Except as provided in subsection 4.E., no amounts shall be paid to a Member from the DROP prior to his or her termination of employment as a General Employee. B. Form of Distribution. (1) Unless the Member elects otherwise, distribution of his or her DROP Account shall be made in a cash lump sum, subject to the direct rollover provisions set forth in subsection 4.F. Elections under this paragraph shall be in writing and shall be made in such time or manner as the Board shall determine. (2) If a Member dies before his or her benefit is paid, his DROP Account shall be paid to his Beneficiary in such optional form as his or her Beneficiary may select. If no Beneficiary designation is made, the DROP Account shall be distributed to the Member's estate. Page 12 C. Date of Payment of Distribution. 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. 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. E. Distribution Limitation. 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. F. Direct Rollover of Certain Distributions. This subsection applies to distributions made on or after January 1, 2002. Notwithstanding any provision of the DROP to the contrary, a distributee may elect to have any portion of an eligible rollover distribution paid in a direct rollover as otherwise provided under the System in Section 23. 5. Administration of DROP. A. Board Administers the DROP. The general administration of the DROP, the responsibility for carrying out the provisions of the DROP and the responsibility of overseeing the investment of the DROP's assets shall be placed in the Board. The members of the Board may appoint from their number such subcommittees with such powers as they shall determine; may adopt such administrative procedures and regulations as they deem desirable for the conduct of their affairs; may authorize one or more of their number or any agent to execute or deliver any instrument or make any payment on their behalf; may retain counsel, employ agents and provide for such clerical, accounting, actuarial and consulting services as they may require in carrying out the provisions of the DROP; and may allocate among themselves or delegate to other persons all or such portion of their duties under the DROP, other than those granted to them as Trustee under any trust agreement adopted for use in implementing the DROP, as they, in their sole discretion, shall decide. A Trustee shall not vote on any question relating exclusively to himself. Page 13 B. Individual Accounts, Records and Reports. The Board shall maintain, records showing the operation and condition of the DROP, including records showing the individual balances in each Member's DROP Account, and the Board shall keep, in convenient form such data as may be necessary for the valuation of the assets and liabilities of the DROP. The Board shall prepare and distribute to Members participating in the DROP and other individuals or filed with the appropriate governmental agencies, as the case may be, all necessary descriptions, reports, information returns, and data required to be distributed or filed for the DROP pursuant to the Code, the applicable portions of the Act and any other applicable laws. C. Establishment of Rules. Subject to the limitations of the DROP, the Board from time to time shall establish rules for the administration of the DROP and the transaction of its business. The Board shall have discretionary authority to construe and interpret the DROP (including but not limited to determination of an individual's eligibility for DROP participation, the right and amount of any benefit payable under the DROP and the date on which any individual ceases to be a participant in the DROP). The determination of the Board as to the interpretation of the DROP or its determination of any disputed questions shall be conclusive and final to the extent permitted by applicable law. D. Limitation of Liability. (1) The Trustees shall not incur any liability individually or on behalf of any other individuals for any act or failure to act, made in good faith in relation to the DROP or the funds of the DROP. (2) Neither the Board nor any Trustee of the Board shall be responsible for any reports furnished by any expert retained or employed by the Board, but they shall be entitled to rely thereon as well as on certificates furnished by an accountant or an actuary, and on all opinions of counsel. The Board shall be fully protected with respect to any action taken or suffered by it in good faith in reliance upon such expert, accountant, actuary or counsel, and all actions taken or suffered in such reliance shall be conclusive upon any person with any interest in the DROP. 6. General Provisions. A. The DROP Is Not a Separate Retirement Plan. Instead, it is a program under which a Member who is eligible for normal retirement under the System may elect to accrue future retirement benefits in the manner provided in this section 25 for the remainder of his employment, rather than in the normal manner provided under the plan. Upon termination of employment, a Member is entitled to a lump sum distribution of his or her DROP Account balance or may elect a rollover. Page 14 The DROP Account distribution is in addition to the Member's monthly benefit. B. Notional Account. The DROP Account established for such a Member is a notional account, used only for the purpose of calculation of the DROP distribution amount. It is not a separate account in the System. There is no change in the System's assets, and there is no distribution available to the Member until the Member's termination from the DROP. The Member has no control over the investment of the DROP Account. C. No Employer Discretion. The DROP benefit is determined pursuant to a specific formula which does not involve employer discretion. D. IRC Limit. The DROP Account distribution, along with other benefits payable from the System, is subject to limitation under Internal Revenue Code Section 415(b). A E. Amendment of DROP. The DROP may be amended by an ordinance of the City at any time and from time to time, and retroactively if deemed necessary or appropriate, to amend in whole or in part any or all of the provisions of the DROP. However, except as otherwise provided by law, no amendment shall make it possible for any part of the DROP's funds to be used for, or diverted to, purposes other than for the exclusive benefit of persons entitled to benefits under the DROP. No amendment shall be made which has the effect of decreasing the balance of the DROP Account of any Member. B F. Facility of Payment. If a Member or other person entitled to a benefit under the DROP is unable to care for his or her affairs because of illness or accident or is a minor, the Board shall direct that any benefit due him or her shall be made. Any payment so made shall be a complete discharge of the liabilities of the DROP for that benefit. G G. Information. Each Member, Beneficiary or other person entitled to a benefit, before any benefit shall be payable to him or her or on his or her account under the DROP, shall file with the Board the information that it shall require to establish his or her rights and benefits under the DROP. D H. Prevention of Escheat. If the Board cannot ascertain the whereabouts of any person to whom a payment is due under the DROP, the Board may, no earlier than three (3) years from the date such payment is due, mail a notice of such due and Page 15 owing payment to the last known address of such person, as shown on the records of the Board or the City. If such person has not made written claim therefor within three (3) months of the date of the mailing, the Board may, if it so elects and upon receiving advice from counsel to the System, direct that such payment and all remaining payments otherwise due such person be canceled on the records of the System. Upon such cancellation, the System shall have no further liability therefor except that, in the event such person or his or her Beneficiary later notifies the Board of his or her whereabouts and requests the payment or payments due to him or her under the DROP, the amount so applied shall be paid to him or her in accordance with the provisions of the DROP. E I. Written Elections,Notification. (1) Any elections, notifications or designations made by a Member pursuant to the provisions of the DROP shall be made in writing and filed with the Board in a time and manner determined by the Board under rules uniformly applicable to all employees similarly situated. The Board reserves the right to change from the time and manner for making notifications, elections or designations by Members under the DROP if it determines after due deliberation that such action is justified in that it improves the administration of the DROP. In the event of a conflict between the provisions for making an election, notification or designation set forth in the DROP and such new administrative procedures, those new administrative procedures shall prevail. (2) Each Member or Retiree who has a DROP Account shall be responsible for furnishing the Board with his or her current address and any subsequent changes in his or her address. Any notice required to be given to a Member or Retiree hereunder shall be deemed given if directed to him or her at the last such address given to the Board and mailed by registered or certified United States mail. If any check mailed by registered or certified United States mail to such address is returned, mailing of checks will be suspended until such time as the Member or Retiree notifies the Board of his or her address. F J. Benefits Not Guaranteed. All benefits payable to a Member from the DROP shall be paid only from the assets of the Member's DROP Account and neither the City nor the Board shall have any duty or liability to furnish the DROP with any funds, securities or other assets except to the extent required by any applicable law. C K. Construction. (1) The DROP shall be construed, regulated and administered under the laws of Florida, except where other applicable law controls. (2) The titles and headings of the subsections in this Section 25 are for convenience only. In the case of ambiguity or inconsistency, the text rather than the titles or headings shall control. Page 16 II L. Forfeiture of Retirement Benefits. Nothing in this Section shall be construed to remove DROP participants from the application of any forfeiture provisions applicable to the System. DROP participants shall be subject to forfeiture of all retirement benefits, including DROP benefits. I M. Effect of DROP Participation on Employment. Participation in the DROP is not a guarantee of employment and DROP participants shall be subject to the same employment standards and policies that are applicable to employees who are not DROP participants. SECTION 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. Repeal of Ordinances. All ordinances or parts of ordinances in conflict herewith are hereby repealed. SECTION 11. Effective Date. This ordinance shall be effective on the date of adoption. PASSED AND ADOPTED this 1 ay of‘24ex , 2018. APPROVED: ATTEST: " • CITY OF OCOEE, FLORIDA By: ;Melarie.Sibb'itt,City Clerk Rusty Johnso or • i � (SEAL) ,- ADVERTISED � � :uL� •.,. , 2018 4'' ' READ FIRST TIME i .4/ ,./,2018 (zip ,,'. READ SECOND TIME AND ADOPTED a��'/€n-,1x/ y ,2018 FOR USE AND RELIANCE ONLY BY THE CITY OF OCOEE,FLORIDA APPROVED AS TORM AND LEGALITY THIS 7 day of 11� •,2018 CHRISTIANSEN&DEHNER, P.A. Special C el By: ,v,_ a_ Z Page 17