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Ordinance 2006-010 ORDINANCE NO. 2006-010 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' 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 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 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 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 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 the City, shall be based upon the Mernber'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 value of payments to the Retiree shall not be less than fifty percent (50%) of the total present value of pa)'ments to the Retiree and his or her joint pensioncr payments to the joint 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 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 value of pa)'ments to the Retiree shall not be less than fifty percent (50%) ofthe total present value of pa)'ments to the Retiree and his or her joint pensioner payments to the joint 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 5: 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. Not\lVithstanding an)' other prOvision of this System to the contrary, a form of retirement income payable from this System after the Dffccti ve Date of this ordinance, shall satisfy the folIo \lV ing conditions. +: 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 Apr ill, of the calendar y car folIo \lV ing the later of thc calendar)' car in \lVhich the l\1cmber attains age 70-1/2, or the calendar year in \lVhich Member retires, Page 2 Vlhere a form of retirement income pa)'ment has commenced in accordance with the preceding paragraphs and the l\iember dies before his or her entire interest in the System has been distributed, the remaining portion of stIch interest in the System shall be distributed no less rapidly than under the form of distribution in effect at the time of the l\fember's death. 2-:- If the Member's death occurs before the, distribution of his or her interest in the S)'stem has commenced, Member's entire interest in the System shall be distributed \lVithin five (5) years of l\fember's death, unless it is to be distributed in accordance \lVith the follo\lVing mles. k The l\1cmber's remaining interest in the System is pa)'able to his or her Spouse, issue or dependellt, B-:- The remaining interest is to be distributed over the life of the Spouse, issue or dependent or over a period not extending beyond the life expectanc)' of the Spouse, issue or dependent, and €:- Such distribution begins \lVithin one year of the l\fember's death unless the Mcmber's Spouse shall receive the rcmaining interest in whieh case the distribution need not begin before the date on which the Member \lVould have attained age 70-1/2 and if the Spouse dies before the distribution to the Spouse begins, this Section shall be applicd as if the Spouse were the Mcmber. .L General Rules. A. Effective Date. The provisions of this Section will apply for purposes of determimng required minimum distributions for calendar years beginning with the 2003 calendar year. B. Precedence. The requirements ofthis Section will take precedence over any mconsistent provisions of the Plan. c. D. 2. Time and Manner of Distribution. A. Re6uired Beginning Date. The Member's entire interest will be distributed. or egm to be distriouted. to the Member no later than the Member's required beginning date which shall not be later than April 1 of the calendar year Page 3 following the later of the calendar year in which the Member attains age seventy and one-half (70 Yz) 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 Begin. If the Member dies before distnbutlons begin. the Member's entire mterest 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 ofthe 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 Y2. if later. ill Ifthe Member's surviving spouse is not the Member's sole designated beneficiary. then. distributions to the designated beneficiary will begin bv December 31 ofthe calendar year immediately 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 ofthe 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.R. other than subsection 2.R(1 ). will apply as ifthe 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.R( 4) applies. the date of distributions are required to begin to the surviving spouse under 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.(1)). 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 ofthe 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 applv to individual accounts. Page 4 1, Determination of Amount to be Distributed Each Year. B. C. A. 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. @ To the extent ofthe reduction in the amount ofthe 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). if) To provide cash refunds of Accumulated Contributions upon the Member's death. @ To pay increased benefits that result from a Plan amendment. Amount Re uired to be Distributed b Re uired Be innin Date. The amount t at must e Istn ute on or e ore t e Mem er'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 ofthe next payment interval even ifthat payment interval ends in the next calendar year. Payment intervals are the periods for which payments are received. e.g.. bi-monthly. monthly. semi-annually. or annually. All ofthe Member's benefit accruals as ofthe last day ofthe first distribution calendar year will be included in the calculation ofthe amount ofthe annuity payments for payment intervals ending on or after the Member's required beginning date. Additional Accruals After First Distribution Calendar Year. Any additional benefits accrumg to the Member m a calendar year after the first distribution calendar year will be distributed beginning with the first payment interval Page 5 ending in the calendar year immediatelv following the calendar year in which such amount accrues. 4. Requirements for Annuitv Distributions That Commence During a Member's LIfetime. A. Joint Life Annuities Where the Benefici ouse. If t e Mem er's mterest IS emg lstn ute m t e orm 0 a JOmt an survIvor annuity for the ioint lives of the Member and a nonspouse beneficiary. annuitv 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 ofthe 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 ofthe Treasury regulations. rfthe 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 ofthe 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 1.40l( 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 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 1.40l( a)(9)-9 of the Treasury regulations. using the Member's and spouse's attained ages as of the Member's and spouse's birthdays in the calendar year that contains the annuitv starting date. ~ Requirements for Minimum Distributions Where Member Dies Before Date DistrIbutions Begin. A. 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 ofthe beneficiary's birthday in the calendar year immediately following the calendar year of the Member's death. Page 6 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. C. .Q,. Definitions. A. . The individual who is desi ated as the beneficia un ert eP an an IS t e designated beneficiary under Section40l(a)(9) of the Code and Section 1.401(a)(9)-1. O&A-4. ofthe 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 vear is the calendar vear in which distributions are required to begin pursuant to subsection 2.B. e. 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. Required Beginning Date. The date specified in subsection 2.A. 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 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 Page 7 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 ofthe balance to the credit ofthe 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 401 (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. c. (3) (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) ofthe 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)(I)(A) ofthe Code and which agrees to separately account for amounts transferred into such plan from this plan, an annuity contract described in section 403(b) ofthe 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. 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 Page 8 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) ofthe Code which is maintained by a state, political subdivision of a state, or any agency or instrumentality of a stat~ o! 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 ofMandato~ Distributions. NotwIthstanding any ot er 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. 96-19, 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.fT.- 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 4.6:- 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 ammity form selected is not a qualified joint and fifty peieent (50%) StllvivOI annuity with the Membel's Spouse as the Deneficiary, the annuity payable to thc Membci and thcIGafter to his Dencfieiary shall be subject to the incidental death benefit rule as described in Sectioll 401 (a)(9)(C) of the Code and its applicable regulatiolls. Page 9 fr (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. ffl 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. t21 In lieu of a disttibution as deselibed in pauglaph (I) above, a Me,mber may, in accordance, '\lVith such Ploce,dmes as the Doard shall prescribe" clcct to have, the disttibution of his DROP Account lllade as of the filst day of any month coincident with 01 fullowing his tGmination of employment as a Genelal Employee, plovided, however, payments shall be made before the distribution date clecte,d by the Membel to the extent necessary to comply \lV ith the pro v isio11s of subsections 4.D. and 4.v. B:- Age Sevent} and One-IIalf(70-1/2) Rcquiled Distribution. In no event shall the provisiolls of subsection 4. ope,late so as to allow the distribution of a MembcI's DROP Account to be latel than the April I follo wing the lat"r of the calendar year in which he telminates his employment as a General Employee or he attains age seventy arId o11e-half (70-1/2). In the event a Membel is lequiled to leeeive payment while in sel v ice undel the prov isions ofthis subsection D., he shallne"i ve one lump smn payment on 01 before his lequiled beginning date equal to his entile DROP Account balance and arulual lmnp sum paynlents theloaftel of amounts eledited to his DROP Account during "adl calendar yea1. Upon the Membcr's subsequent termination of employment, payment of his DROP Account shall be made in aceoldanee with the prov isions of subsection4.D. fr 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. F:- E. F. 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 undcr Section 401 (a)(9) of the Code" including the incidental death benefit prOvisions of Section 401 (a)(9)( G) ofthe Code. vurthel, such 1 egulatiol1s shall 0 v en ide any DROP prOvision that is inconsistent with Section 401(a)(9) of the Code. Direct Rollover of Certain Distributions. Page 10 This subsection applies to distributions made on or after January 1, 2002. Notwithstanding any provision of the DROP to the contrary that would other wise limit a distributee's eJection under this subscction, a distributee may elect, at the timG and in thc ma1lllGr presGribGd by the Doa1d, to have any portion of an eligible rollover distribution paid directly by the DROP to an eligible retircment plan specified by the distributee in a direct rollover as otherwise provided under the System in Section 23, herein incorporated by reference. SECTION 8: 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 9. Repeal of Ordinances. All ordinances or parts of ordinances in conflict herewith are hereby repealed. SECTION 10. Effective Date. This ordinance shall take effect upon adoptions. PASSED AND ADOPTED this !bTlfday of~, 2006. ATTEST: APPROVED: CITY OF OCOEE, FLORIDA d (SEAL) ADVERTISED m~ ,2006 READ FIRST TIME . . " 1 ~ , 2006 ~1":? S~~OND TIME D ADOPTED ~,2006 FOR USE AND RELIANCE ONLY BY THE CITY OF OCOEE, FLORIDA APPROVED AS TO FORM AND LEGALITY THIS A day of ~(Vl--' , 2006 Page 11 CHRISTIANSEN & DEHNER, P.A. Special Counsel By:LlA~v,-z)~t",-VL noc\ocoee\gen\ 12-07 -05 .oed APPROVED BY THE OCOEE CITY COM~SSION AT A MEETING HELD ON b-t/ /~02006UNDERAGENDA ITEMNO( / tl. . Page 12