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Ordinance 1982-010 General Employees Pension Plan ORDINANCE NO. 10-82 AN ORDINANCE OF THE VILLAGE OF NORTH PALM BEACH ENACTING INTO LAW A PENSION PLAN FOR GENERAL EMPLOYEES OF THE VILLAGE, EXCEPT FIRE AND POLICE; PROVIDING FOR AN ORDERLY TRANSFER OF FUNDS TO THE NEW FUND; PROVIDING FOR THE BENEFITS OF THE FUND; PROVIDING FOR THE FUNDING OF THE FUND; PROVIDING FOR ADMINISTRATION OF THE FUND; PROVIDING FOR THE ESTABLISHMENT OF A NEW BOARD OF RETIREMENT; PRO- ' VIDING FOR A SAVINGS CLAUSE; REPEALING ALL ORDI- NANCES IN CONFLICT HEREWITH; AND PROVIDING AN EFFECTIVE DATE. WHEREAS, the Village of North Palm Beach General Employees are presently provided pension and certain other benefits, and WHEREAS, the Village Council is desirous of clarifying and restating the provisions of the General Retirement Fund in Ordinance form. NOW, THEREFORE, BE IT ORDAINED BY THE VILLAGE COUNCIL OF NORTH PALM BEACH, FLORIDA AS FOLLOWS: SECTION 1: DEFINITIONS As used herein, unless otherwise defined or required by the context, the following words and phrases shall have the meaning indicated: 1. Village means Village of North Palm Beach, Florida. 2. Agreement means this written Ordinance setting forth the provisions of the Retirement System. 3. System means the Village of North Palm Beach General Retirement Fund as contained herein and all amendments thereto. 4. Fund means the Trust Fund established herein as part of the System. 5. Board means the Board of Retirement, which shall administer and manage the System herein provided and serve as Trustees of the Fund. 6. Employee shall mean all actively employed full-time General Employees of the Village, except Firemen and Policemen. (Exceptions as allowed by the Pension Trustees.) 7. Member means an actively employed full-time employee who fulfills the prescribed participation requirements, after twelve (12) months employment and will become a participant on the October 1st coincident with or next following. - 1 - 8. Credited Service means the total number of years and ' fractional parts of years of actual service with the Village of North Palm Beach, beginning after one year of continuous service. The maximum credited service is 30 years. 9. Earnings means gross salary, (including overtime) but excluding bonuses, or any other nonregular payments, such as unused sick leave and vacation time pay. 10. Final Average Earnings means the arithmetic average of annual Earnings for the highest Five (5) years of the Ten (10) consecutive years of service immediately preceding the retirement or termination of a Member. 11. Beneficiary means the person or persons entitled to receive benefits hereunder at the death of a Member who has or have been designated in writing by the Member and filed with the Board. If no such designation is in effect at the time of death of the Member, or if no such person so designated is living at that time, the beneficiary shall be the estate of the Member. 12. Actuarial Equivalent means a benefit or amount of equal value, based upon the 1971 Group Annuity Mortality Table. 13. Spouse means the lawful wife or husband of a Member at the time of pre-retirement death or retirement. 14. Effective Date means the date on which this Ordinance becomes effective. Plan year is from October 1 to September 30. 15. Social Security Benefit means a benefit calculated using the social security law in effect at the time of employee separation. The benefit is calculated using all earnings with the Village during the employee's tenure and if the employee separates before his Normal Retirement date, future earnings will be assumed at the employee's rate of earnings at termination. Additionally, earnings before employment will follow from the employee's actual earnings with the Village but be adjusted by the appropriate social security average wage factor. 16. Accrued Benefit is the benefit earned to date using the formula for the Normal Retirement Benefit. - 2 - SECTION 2: MEMBERSHIP 1. Conditions of Eligibi7Yty A. All Employees as of the Effective Date, and all future new Employees, shall become Members of this System as a condition of Employment. Members of the fire department and police depart- ment are not included under the General Pension and Retirement Fund of the Village of North Palm Beach. 2. Application for Membership Each current and future eligible Employee shall complete an application form covering certain items, and provide other information, as follows or may be prescribed by the Board: A. Acceptance of the terms and conditions of the Retirement System. B. Designation of a Beneficiary or Beneficiaries. C. A certified statement as to prior medical history. D. A written release allowing distribution of all medical records to the Board. For the purposes of all benefits hereunder, an Application for Membership shall be considered to have been in effect from date of employment, even though officia-ly accepted and approved by the Board at a later date. 3. Change in Designation of Beneficiary A Member may from time to time change his designated Beneficiary by written notice to the Board upon forms provided by the Board. Upon such change, the rights of all previously designated Beneficiaries to receive any benefits under the System shall cease. SECTION 3: BENEFIT AMOUNTS AND ELIGIBILITY 1. Retirement Date A Member's Normal Retirement Date .shall be the first day of the month coincident with, or next following, attainment of his sixty-fifth (65) birthday. A Member may retire on his Normal Retirement Date or on the first day of any month thereafter, and each Member shall become 100% vested in his accrued benefit on his Normal Retirement Date. 2. Retirement Benefit A Member retiring hereunder on or after his Normal Retirement Date shall receive a monthly benefit which shall - 3 - commence on his Retirement Date and be continued thereafter during his lifetime, ceasing upon death. The Member's annual Pension benefit shall equal 1-2/3% of Final Average Earnings multiplied by the Member's credited service minus 1-2/3% of his Social Security Benefit multiplied by credited service. 3. Late Retirement A participant who retires after his Normal Retirement Date shall be paid the monthly benefit otherwise payable to the participant at his Normal Retirement Date increased actuaria-ly to his actual benefit commencement date. 4. Early Retirement A Member may retire after age 55. If a Member does retire early, his or her Pension benefits shall be actuarially reduced. 5. Pre-retirement Death If a Member is age 55 and has 5 years of continuous service and has been married for one year and dies prior to Normal Retirement Date, a pension benefit of 50% of the amount the Member would have been entitled to, actuarially reduced for Early Retirement, shall be paid to the surviving Spouse for as long as the Spouse shall live. Such amount shall be based on the amount payable under the 50% joint and survivor option. The Spouse's pension benefit shall be adjusted for changes in the cost of living benefit. The cost of this death benefit is to be borne by the participant in the form of an actuarial reduction in the participant's or the Spouse's annuity. 6. Cost of Living The amount of pension benefit will be increased or decreased in accordance with the changes in the consumer price index published by the U.S. Bureau of Labor Statistics. Adjust- ments of pension payments will be made on October 1 of each year reflecting the change in the consumer-price index over the 12 month period ending three months before that date. The maximum increase or decrease in the Member's pension benefit for any one year is 3%. However, the Member's pension benefit can never be reduced below the amount the Member received at date of retire- ment. - 4 - 7. Termination of Employment A participant who terminates his employment for reason other than death or retirement shall be entitled to a deferred monthly retirement benefit commencing at his Normal Retirement Date equal to the product of his vested percentage, as determined from the following schedule, and his Accrued Benefit: Credited Service Vested Percentage Less than 5 0% 5 but less than 7 50% 7 but less than 9 75% 9 or more 100% SECTION 4: NORMAL AND OPTIONAL FORMS OF BENEFITS 1. The normal form of retirement benefit is a monthly annuity for life. 2. Each Member entitled to a Normal or Early Retirement Benefit shall have the right at any time prior to the date on which benefit payments begin to elect to have this benefit payable under any of the Options hereinafter set forth in lieu of benefits provided herein, and to revoke any such elections and make a new el-ction at any time prior to the actual beginning of payments. The value of optional benefits shall be the actuarial equivalent of the value of benefits otherwise payable. The Member shall make such an election by written request to the Board, such request being retained in the Board's files. Option 1 - Joint and Last Survivor Option The Member may elect to receive a benefit during his lifetime and have such benefit (or a designated fraction thereof) continued after his death to and during the lifetime of his Spouse or a relative other than his Spouse. The minimum Joint and Survivor Percentage shall be 50%. The election of Option 1 shall be null and void if the designated Beneficiary dies before the Member's benefit payments commence. Option 2 - Life Annuity With Ten Years Certain The Member may elect to receive a monthly benefit for one hundred and twenty monthly payments and then continuing thereafter only during the lifetime of the Member. - 5 - Option 3 - Other In lieu of the optional forms enumerated in this Section, benefits may be paid in any form approved by the Board so long as it is the Actuarial Equivalent of the benefits otherwise payable. Option 4 - Social Security Adjustment Option ' If a Member retires before being eligible for Social Security benefits, he or she may elect this option. A Member may elect to receive a larger pension up to the date he or she begins receiving Social Security benefits. The Member's pension benefits may be reduced or terminated after Social Security payments begin. The amount of reduction shall be actuarially determined by the actuary. SECTION 5: VILLAGE CONTRIBUTIONS 1. So long as this System is in effect, the Village shall make a contribution to the Turst Fund in an amount equal to the total cost for the year as shown by the most recent actuarial valuation of the System. The total cost for any year shall be defined as the total Normal Cost plus the additional amount ' sufficient to amortize the Unfunded Accrued Past Service Liability over a forty (40) year period. 2. Other. Private donations, gifts and contributions may be deposited to the Fund, but such deposits must be accounted for separately and kept on a segregated bookkeeping basis. Funds arising from these sources may be used only for additional benefits for-Members, as determined by the Board, and may not be used to reduce what would have otherwise been required Village contributions, SECTION 6: RETIREMENT BOARD - ESTABLISHMENT A. There is hereby created a Retirement Board of the Village of North Palm Beach, Palm Beach County, Florida consisting ' of five (5) Members. Four (4) of whom shall be employees of the Village of North Palm Beach. The above mentioned employees shall be elected at large by the Village employees. The term of service on the General Retirement Board shall be indefinite or until such time such employee Member of the Retirement Board is retired, disabled, or is removed for misconduct by majority vote of the employees of - 6 - the Village of North Palm Beach or for non-participation by missing two (2) or more consecutive meetings. One (1) Member of the five on the General Retirement Board shall be a resident of the Village of North Palm Beach, selected by the Village Council, and shall serve as Chairman of the Retirement Board. ' B. Should a vacancy occur in the Member serving as employee Member, the Village of North Palm Beach employees shall within thirty (30) days hold an election and elect a successor to serve. Should the Member appointed by Village Council resign or relinquish duties on the General Retirement Board, his successor shall be appointed by the Village Council within thirty (30) days. C. The Retirement Board hereby created shall perform all duties and en3oy all rights and powers vested by law or Ordinance, and the Village Attorney of said Village may give advice and legal assistance to said Retirement Board in all matters pertaining for the performance of their duties, whenever requested, and may prosecute and defend all suits which may be instituted by or ' against it; provided, however, the Retirement Board may, in their discretaion, employ independent legal counsel if funded by Village Council, for such purposes, the expense of such employment to be paid by the Village of North Palm Beach. D. The Retirement Board shall have full authority to administer all the provisions of this act and shall make all discursements and receipt for all monies received by the Fund. The Retirement Board shall appoint a secretary who shall keep a complete record of all actions and proceedings by the Board. E. The Retirement Board shall continue to exist exclusively for the purpose provided by this and related legislation, and the responsibility for the administration and proper operation thereof and for effectuating the provisions of the law relating ' thereto, is vested in the said Retirement Board. SECTION 7: ADDITIONAL RULES AND REGULATIONS AUTHORIZED Said Retirement Board shall have the power to adopt rules and regulations, not inconsistent with the provisions of this act, governing its activities and providing for the certification of the sum to be paid from the General Retirement Fund. - 7 - SECTION 8: INVESTING FUNDS; CUSTODIAN OF SECURITIES A. The Retirement Board shall have the power and authority to direct the Village Treasurer to invest and reinvest the assets of the General Retirement Fund. B. The Village of North Palm Beach, or its designated funding agent, shall be the custodian of all securities, and the ' accretion thereof shall become a part of the General Retirement Fund. All funds and securities of the General Retirement Fund shall be deposited with the Village, who shall keep them in a separate fund, and shall be liable for the safekeeping of the same under the bond given to the Village and shall be liable in the same manner and to the same extent as is liable for the safekeeping of the funds of the Village ae provided for by law. All funds now held by the Village of North Palm Beach for this Retirement System or from the former Retirement System are hereby transferred to the Fund established by this act. SECTION 9: OATHS OF OFFICE; MEETINGS; QUORUM Before entering upon their duties as Members of said Board, each Member shall take and subscribe to the oath of office required ' by the Village Charter, which oath shall be filed with the Village Clerk. The Board shall meet as often as necessary or upon the call of the Chairman or any Member thereof or upon request of the Village Clerk. A majority of the Board shall constitute a quorum for the transaction of any business. Notice of meetings shall be given to Council and the public at least seven (7) days in advance. SECTION 10: REPEAL OR TERMINATION OF SYSTEM 1. This Ordinance establishing subsequent Ordinances pertaining to said modified, terminated or amended in whole that if this or any subsequent Ordinance repealed in its application to any perso; the amount of benefits which at the time the System and Fund, and System and Fund, may be or in part; provided shall be amended or 1 benefiting hereunder, of any such alteration, amendment or repeal shall have accrued to the Member or Beneficiary shall not be affected thereby, except to the extent that the assets of the Fund may be determined to be inadequate. - 8 - 2. If this Ordinance shall be repealed, or if contribu- tions to the System are discontinued, the Board shall continue to administer the System in accordance with the provisions of this Ordinance, for the sole benefit of the then Members, any Beneficiaries then receiving retirement allowances, and any future persons entitled to receive benefits under one of the ' options provided for in this Ordinance who are designated by any of said Members. In the event of repeal, or if contributions to the System are discontinued, there shall be full vesting (100%) of benefits on a proportionate basis to the person entitled to benefits in accordance with the provisions thereof. 3. The following shall be the order of priority for purposes of allocating the assets of the System as of the date of repeal of this Ordinance, or if contributions to the System are discontinued with the date of such discontinuance being determined by the Board. A. Apportionment shall first be made in respect of each retired Member receiving a retirement or disability benefit ' hereunder on such date, each person receiving a benefit on such date on account of a retired (but since deceased) Member, and each Member who has, by such date, become eligible for Normal Retirement but has not yet retired, an amount which is the actuarial equivalent of such benefit, based upon the actuarial assumptions used for purposes of the most recent actuarial valuation, provided that, if such asset value be less than the aggregate of such amounts, such amounts shall be proportionately reduced so that the aggregate of such reduced amounts will be equal to such asset value. B. If there be any asset value remaining after the appor- tionment under subparagraph A, apportionment shall next be made in respect of each Member in the Service of the Village on such ' date who has completed at least ten years of Credited Service and who is not entitled to an apportionment under subparagraph A, in the amount required to provide the actuarial equivalent, as described in A above, of the accrued Normal Retirement Benefit, based on the Credited Service and Average Monthly Earnings as of such date, and each vested former Member then entitled to a deferred benefit who has not, by such date, begun receiving - 9 - benefit payments, in the amount required to provide said actuarial equivalent of the accrued Normal Retirement Benefit, provided that, if such remaining asset value be less than the aggregate of the amounts apportioned hereunder, such latter amounts shall be proportionately reduced so that the aggregate of such amounts will be equal to such remaining asset value. C. If there be any asset value after the apportionments under subparagraph A and B, apportionment shall be made in respect of each Member in the service of the Village on such date who is not entitled to an apportionment under subparagraphs A and B in the amount equal to his accumulated benefits, provided that, if such remaining asset value be less than the aggregate of the amounts apportioned hereunder such latter amounts shall be proportionately reduced so that the aggregate of such reduced amounts will be equal to such remaining asset value. D. If there be any asset value remaining after the apportionments under subparagraphs A, B and C, apportionments shall lastly be made in respect of each Member included in subparagraph C above to the extent of the actuarial equivalent, as described in A above, of the accrued Normal Retirement Benefit, less the amount apportioned in subparagraph C, based on the Credit Service and Average Monthly Earnings as of such date, provided that, if such remaining asset value be less than the aggregate of the amounts apportioned hereunder, such amounts shall be reduced so that the aggregate of such reduced amounts will be equal to such remaining asset value. 4. After all the vested and accrued benefits provided hereunder have been paid and after all other liabilities have been satisfied, then and only then shall any remaining funds revert to the general fund of the Village. SECTION 11: MISCELLANEOUS 1. Discharged Members. Members entitled to a pension as approved by the Pension Board, shall not forfeit the same upon dismissal from the Department, but shall be retired as herein described. 2. Non-Assignability. No benefit provided for herein shall be assignable or subject to garnishment for debt or for other legal process. - 10 - 3. Pension Validity. The Board of Retirement shall have the power to examine into the facts upon which any pension shall heretofore have been granted or obtained erroneously, fraudulently, or illegally for any reason. Said Board is empowered to purge the pension rolls of any person heretofore granted a pension under prior or existing law or heretofore ' granted under this Ordinance if the same is found to be erroneous, fraudulent or illegal for any reason; and to reclassify any pensioner who has heretofore under any prior or existing law or who shall hereafter under this Ordinance be erroneously, improperly, or illegally classified. 4. Incompetents. If any Member or Beneficiary is a minor or is, in the judgement of the Board, otherwise incapable of personally receiving and giving a valid receipt for any payment due him under the System, the Board may, unless and until claims shall have been made by a duly appointed guardian of such person, make such payment or any part to such person's Spouse, children or other person deemed by the Board in its sole discretion to have incurred expenses of resumed responsibility for the expenses of such person. Any payment so made shall be a complete discharge of any liability under the System for such payment. SECTION 12: Specific authority is hereby granted to codify and incorporate this Ordinance in the existing Code of Ordinances of the Village of North Palm Beach. SECTION 13: All Ordinances or parts of Ordinances in conflict herewith be and the same are hereby repealed. SECTION 14: That should any section or provision of this Ordinance or any portion thereof, any paragraph, sentence or word be declared by a court of competent jurisdiction to be invalid, such decision shall not affect the validity of the remainder hereto as a whole or part thereof other than the part to be declared invalid. - 11 - SECTION 15: This Ordinance shall take effect immediately upon passage. I I L~ PLACED ON FIRST READING THIS 10TH DAY OF JUNE, 1982. PLACED ON SECOND, FINAL READING AND PASSED THIS 10TH DAY OF JUNE, 1982. MAYOR ATTEST: VILLAGE CLERK