Staff recommends approval of an Ordinance amending Chapter 17, Pensions and Retirement, Article IV, Police Officers’ Retirement Fund specifically amending Section 3, Board of Trustees; amending Section 4, Finance and Fund Management; and amending Section 10, Optional Forms of Benefits.
Upon approval, the Ordinance will accomplish the following:
Pension Plan Section 3, Board of Trustees, will be amended to provide that DROP participants can be elected as Trustees, but not vote for elected Trustees.
Pension Plan Section 4, Finance and Fund Management, has been amended to broaden the permissible investment restrictions. The change has been recommended by the Board’s investment professionals to allow more flexibility in the investment asset allocation in order to increase the investment return and still minimize risk. Increased returns could result in a lower funding requirement from the City.
Pension Plan Section 10, Optional Forms of Benefits, has been amended to add an additional optional form of benefit known as a partial lump sum option (PLOP) which allows a retiree to elect to receive 10%, 15%, 20% or 25% of the total value of his retirement benefit as a lump sum with the remaining value of the benefit used to determine the monthly annuity benefit. Since this option is actuarially equal to other options, there is no funding impact in adding this option.
1. Approval of staff recommendations; or
2. Such alternative action as the Commission may deem appropriate
Prepared by: ______________________
Attachments: Yes____ No ______
Advertised: ____Not Required ______
Attorney Review : Yes___ No ____
Reviewed by: Dept. Head ________
Finance Dept. __________________
Deputy C.M. ___________________
City Manager ___________________
Account No. _________________
Project No. ___________________
WF No. ______________________
AN ORDINANCE OF THE CITY OF LEESBURG, AMENDING CHAPTER 17, PENSIONS AND RETIREMENT, ARTICLE IV, POLICE OFFICERS’ RETIREMENT FUND, OF THE CODE OF ORDINANCES OF THE CITY OF LEESBURG; AMENDING SECTION 3, BOARD OF TRUSTEES; AMENDING SECTION 4, FINANCE AND FUND MANAGEMENT; AMENDING SECTION 10, OPTIONAL FORMS OF BENEFITS; PROVIDING FOR SEVERABILITY OF PROVISIONS; REPEALING ALL ORDINANCES IN CONFLICT HEREWITH, AND PROVIDING AN EFFECTIVE DATE.
BE IT ORDAINED BY THE CITY COMMISSION OF THE CITY OF LEESBURG, FLORIDA;
SECTION 1: That Chapter 17, Pensions and Retirement, Article IV, Police Officers’ Retirement Fund, of the Code of Ordinances of the City of Leesburg, is hereby amended by amending Section 3, Board of Trustees, subsection 1., to read as follows:
1. The sole and exclusive administration of and responsibility for the proper operation of the System and for making effective the provisions of this ordinance are hereby vested in a Board of Trustees. The Board is hereby designated at the plan administrator. The Board shall consist of five (5) Trustees, two (2) of whom, unless otherwise prohibited by law, shall be legal residents of the City, who shall be appointed by the Leesburg City Commission, and two (2) of whom shall be Members of the System, who shall be elected by a majority of the Police Officers who are Members of the System. The fifth Trustee shall be chosen by a majority of the previous four (4) Trustees as provided for herein, and such person's name shall be submitted to the Leesburg City Commission. Upon receipt of the fifth person's name, the Leesburg City Commission shall, as a ministerial duty, appoint such person to the Board of Trustees as its fifth Trustee. The fifth Trustee shall have the same rights as each of the other four (4) Trustees appointed or elected as herein provided and shall serve a two (2) year term unless he sooner vacates the office. Each resident Trustee shall serve as Trustee for a period of two (2) years, unless he sooner vacates the office or is sooner replaced by the Leesburg City Commission at whose pleasure he shall serve. Each Member Trustee shall serve as Trustee for a period of two (2) years, unless he sooner leaves the employment of the City as a Police Officer or otherwise vacates his office as Trustee, whereupon a successor shall be chosen in the same manner as the departing Trustee. Each Trustee may succeed himself in office. DROP participants can be elected as Trustees but not vote for elected Trustees. The Board shall establish and administer the nominating and election procedures for each election. The Board shall meet at least quarterly each year. The Board shall be a legal entity with, in addition to other powers and responsibilities contained herein, the power to bring and defend lawsuits of every kind, nature, and description.
SECTION 2: That Chapter 17, Pensions and Retirement, Article IV, Police Officers’ Retirement Fund, of the Code of Ordinances of the City of Leesburg, is hereby amended by amending Section 4, Finance and Fund Management, subsection 6.B., to read as follows:
6.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 Chapter 185, Florida Statutes 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 Chapter 185, Florida Statutes, is 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.
(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 81-100 or successor rulings or guidance of similar import, and 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.
SECTION 3: That Chapter 17, Pensions and Retirement, Article IV, Police Officers’ Retirement Fund, of the Code of Ordinances of the City of Leesburg, is hereby amended by amending Section 10, Optional Forms of Benefits, Section 1., to add subsection D., to read as follows:
D. For Members who do not participate in the DROP pursuant to Section 28, the Member may elect a percentage of benefit in a lump sum as follows:
(1) Ten (10) percent lump sum benefit with ninety (90) percent paid under the normal form or as per (A), (B) or (C) above.
(2) Fifteen (15) percent lump; sum benefit with eighty-five (85) percent paid under the normal form or as per (A), (B) or (C) above.
(3) Twenty (20) percent lump sum benefit with eighty (80) percent paid under the normal form or as per (A), (B) or (C) above.
(4) Twenty-five (25) percent lump sum benefit with seventy-five (75) percent paid under the normal form or as per (A), (B) or (C) above.
SECTION 4: Specific authority is hereby granted to codify and incorporate this Ordinance in the existing Code of Ordinances of the City of Leesburg.
SECTION 5: All Ordinances or parts of Ordinances in conflict herewith be and the same are hereby repealed.
SECTION 6: 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 7: That this Ordinance shall be effective upon adoption.
PASSED AND ADOPTED AT A REGULAR MEETING OF THE CITY COMMISSION OF THE CITY OF LEESBURG, FLORIDA, HELD ON THE _____ DAY OF _____________, 2007.