Staff recommends approval of the ordinance amending the Retirement Plan for the General Employees; amending Section 1, Definitions; amending Section 10, Optional Forms of Benefits; amending Section 18, Exemption from Execution, Non-Assignability.
The following changes to the existing Retirement Plan for the General Employees are submitted for approval:
1. Section 1, Definitions; to amend the definition of Actuarial Equivalent. This change is being made at the request of the actuary to reflect the new actuarial assumptions adopted by the Board and assure that the Partial Lump Sum Option described in item 2 is a no-cost option.
2. Section 10, Optional Forms of Benefits; amend to add two additional optional forms of benefits. The first allows a member who retires prior to the time at which social security benefits are payable, to elect to receive an increased retirement benefit until social security benefits commence and a reduced benefit thereafter. The second is 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 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 by addition of this option (reviewed by Foster & Foster). This option is an alternative to the Deferred Retirement Option Plan (DROP). Members are not permitted to elect both the DROP and the PLOP since such an election would result in a large cash payment from the plan and would dramatically reduce the monthly lifetime benefit payment to the retiree.
3. Section 18, Exemption from Execution, non-assignability; amend to add the requirement that members who are involved in a divorce will provide a copy of the proposed court order to the Board for review prior to submitting it to the Court. This review will avoid the entry of an order requiring the plan to make payments to an ex-spouse which are not legally permissible and avoid possible expenses to the Board in seeking the repeal of any such orders. This amendment also allows a retiree to direct retirement benefit deductions for payments to the City or to insurance companies for benefits such as health insurance.
1. Approval of ordinance amending the Retirement Plan for the General Employees; 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. ______________________
ORDINANCE NO. 08-
AN ORDINANCE OF THE CITY OF LEESBURG, AMENDING THE RETIREMENT PLAN FOR THE GENERAL EMPLOYEES FOR THE CITY OF LEESBURG, ADOPTED PURSUANT TO ORDINANCE NO. 03-57, AS SUBSEQUENTLY AMENDED; AMENDING SECTION 1, DEFINITIONS; AMENDING SECTION 10, OPTIONAL FORMS OF BENEFITS; AMENDING SECTION 18, EXEMPTION FROM EXECUTION, NON-ASSIGNABILITY; PROVIDING FOR CODIFICATION; 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 Ordinance No. 03-57, adopting the amended and restated City of Leesburg Retirement Plan for General Employees, as subsequently amended, is further amended to amend Section 1, Definitions, to amend the definition of Actuarial Equivalent, to read as follows:
Actuarial Equivalent means a benefit or amount of equal value, based upon the RP-2000 Combined Healthy Mortality Table-Sex Distinct Without Projection and an interest rate of seven and one half percent (7.5%) per annum.
SECTION 2: That Ordinance No. 03-57, adopting the amended and restated City of Leesburg Retirement Plan for General Employees, as subsequently amended, is further amended to amend Section 10, Optional Forms of Benefits, subsection 1., to read as follows:
1. In lieu of the amount and form of retirement income payable in the event of normal or early retirement as specified herein, a Member, upon written request to the Board, may elect to receive a retirement income or benefit of equivalent actuarial value payable in accordance with one of the following options:
A. A retirement income of a monthly amount payable to the Retiree for his life, with one hundred twenty (120) payments guaranteed in any event.
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 amount payable to a joint pensioner for his lifetime. Except where the Retiree's joint pensioner is his spouse, the 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.
C. If a Member retires prior to the time at which social security benefits are payable, he may elect to receive an increased retirement benefit until such time as social security benefits shall be assumed to commence and a reduced benefit thereafter in order to provide, to as great an extent as possible, a more level retirement allowance during the entire period of Retirement. The amounts payable shall be as recommended by the actuaries for the System, based upon the social security law in effect at the time of the Member's Retirement.
D. For Members who do not participate in the DROP pursuant to Section 27, the Member may elect a percentage of benefit in a lump sum as follows:
(1) Ten percent (10%) of the total value of the benefit paid as a lump sum with the remaining ninety percent (90%) paid under the normal form or as per A, B or C above.
(2) Fifteen percent (15%) of the total value of the benefit paid as a lump sum with the remaining eighty-five percent (85%) paid under the normal form or as per A, B or C above.
(3) Twenty percent (20%) of the total value of the benefit paid as a lump sum with the remaining eighty percent (80%) paid under the normal form or as per A, B or C above.
(4) Twenty-five percent (25%) of the total value of the benefit paid as a lump sum with the remaining seventy-five percent (75%) paid under the normal form or as per A, B or C above.
SECTION 3: That Ordinance No. 03-57, adopting the amended and restated City of Leesburg Retirement Plan for General Employees, as subsequently amended, is further amended to amend Section 18, Exemption from Execution, Non-Assignability, to read as follows:
SECTION 18. DOMESTIC RELATIONS ORDERS; RETIREE DIRECTED PAYMENTS; EXEMPTION FROM EXECUTION, NON-ASSIGNABILITY.
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 of the 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. Retiree Directed Payments.
The Board may, upon written request by a Retiree or by a dependent, when authorized by a Retiree or the Retiree's Beneficiary, authorize the System to withhold from the monthly retirement payment those funds that are necessary to pay for the benefits being received through the City, to make payments to insurance companies for insurance premiums and to make any payments for child support or alimony.
3. Exemption from Execution, Non-Assignability.
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 Accumulated Contributions and the cash securities in the Fund created under this ordinance are hereby exempted from any state, county or municipal tax and shall not be subject to execution, attachment, garnishment or any legal process whatsoever and shall be unassignable.
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 become effective upon its adoption.
PASSED AND ADOPTED AT A REGULAR MEETING OF THE CITY COMMISSION OF THE CITY OF LEESBURG, FLORIDA, HELD ON THE ___________ DAY OF __________________________, 2008.
Approved as to form: