2011-22 Fire & Police Pension Plan Amendments ORDINANCE NO. 2011-22
•
AN ORDINANCE OF THE VILLAGE COUNCIL OF THE VILLAGE OF
NORTH PALM BEACH, FLORIDA, AMENDING DIVISION 4, "PENSION
AND CERTAIN OTHER BENEFITS FOR POLICE AND FIRE EMPLOYEES,"
OF ARTICLE V, "PENSIONS AND RETIREMENT SYSTEMS," OF
CHAPTER 2, "ADMINISTRATION," OF THE VILLAGE CODE OF
ORDINANCES FOR THE PURPOSES OF INTERNAL REVENUE CODE
COMPLIANCE; AMENDING SECTION 2-159, "DEFINITIONS," TO
PROVIDE FOR THE CREATION OF THE TRUST; AMENDING SECTION 2-
161, `BENEFIT AMOUNTS," TO ADOPT INTERNAL REVENUE CODE
SERVICE LIMITS AND ADD REQUIRED MINIMUM DISTRIBUTIONS;
AMENDING SECTION 2-170, "DIRECT TRANSFERS OF ELIGIBLE
ROLLOVER DISTRIBUTION," TO COMPLY WITH INTERNAL REVENUE
CODE REQUIREMENTS REGARDING ROLLOVERS AND MANDATORY
DISTRIBUTIONS; PROVIDING FOR CODIFICATION; PROVIDING FOR
SEVERABILITY; PROVIDING FOR CONFLICTS; AND PROVIDING FOR
AN EFFECTIVE DATE.
WHEREAS, the Board of Trustees ("Board") of the North Palm Beach Fire and Police
Retirement Fund ("Fund") filed for a determination letter from the Internal Revenue Service
("IRS") as to the tax qualification of the Fund; and
WHEREAS, as a part of the process the Board sought a voluntary Compliance Statement
regarding certain amendments to the Fund's plan document; and
WHEREAS, the IRS has issued the Compliance Statement under the Voluntary Compliance
Program; and
WHEREAS, the Board has determined that it is in the best interest of the Fund's participants and
beneficiaries to amend the Fund plan document in accordance with the Compliance Statement
issued by the IRS; and
WHEREAS, the Village Council determines that the adoption of this Ordinance is in the best
interests of the residents and citizens of the Village of North Palm Beach.
NOW, THEREFORE, BE IT ORDAINED BY THE VILLAGE COUNCIL OF THE VILLAGE
OF NORTH PALM BEACH, FLORIDA as follows:
Section 1. The foregoing recitals are ratified as true and correct and are incorporated herein.
Section 2. The Village Council hereby amends Chapter 2, "Administration," Article V,
"Pension and Retirement Systems," Division 4, "Pension and Certain Other Benefits for Fire and
Police Employees," of the Village Code of Ordinances by amending Section 2-159 to read as
follows (new language is underlined and deleted language is stricken):
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• Sec. 2-159. Creation of trust and definitions.
(a) Creation of trust. A pension and retirement system for full-time
firefighters and police officers of the village is hereby established to provide
retirement, survivor and disability benefits as provided by this division. The
system shall be known as the Village of North Palm Beach Fire and Police
Retirement Fund and is intended to be a tax qualified plan under Internal Revenue
Code Section 401(a) and meet the requirements of a governmental plan as defmed
in Internal Revenue Code Section 414(d).
b( Definitions. As used herein, unless otherwise defmed or required
by the context,the following words and phrases shall have the meaning indicated:
* * *
Section 3. The Village Council hereby amends Chapter 2, "Administration," Article V,
"Pension and Retirement Systems," Division 4, "Pension and Certain Other Benefits for Fire and
Police Employees," of the Village Code of Ordinances by amending Section 2-161 to read as
follows (new language is underlined and deleted language is stricken):
Sec. 2-161. Benefit amounts.
* * *
(h) Limitations on benefits. In no event may a member's annual
benefit exceed the limitations of Internal Revenue Code Section 415 as such
provisions apply to governmental pension plans. The provisions of Internal
Revenue Code Section 415 that apply to governmental pension plans are hereby
incorporated into this plan by reference. The maximum amount of the actual
annual retirement income paid in any year with respect to a Participant under this
Plan attributable to employer provided benefits shall not exceed the dollar amount
allowable for any calendar year pursuant to Internal Revenue Code Section
415(b), as adjusted in such calendar year for increases in the cost of living in
accordance with regulations issued by the Secretary of the Treasury under Internal
Revenue Code Section 415(d). For purposes of applying the basic limitation,
benefits payable in any form other than a straight life annuity with no ancillary
benefits shall be adjusted, as provided by Department of Treasury regulations, so
that such benefits are the Actuarial Equivalent of a straight life annuity.
(1) For purposes of this subsection, the following benefits shall not be
taken into account:
a. Any ancillary benefit which is not directly related to
• retirement income benefits; and
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b. Any other benefit not required under Internal Revenue
Code Section 415(b)(2) and Treasury Regulations issued
thereunder to be taken into account for purposes of the
limitation of Internal Revenue Code Section 415(b)(1).
(2) Cost-of-Living Adjustments. The limitations as stated herein shall
be adjusted annually in accordance with any cost-of-living
adjustments prescribed by the Secretary of the Treasury pursuant
to Internal Revenue Code Section 415(d).
(3) For distributions after December 31, 2002, for purposes of Internal
Revenue Code Section 415(b), the mortality table is the table used
under Internal Revenue Code Section 417(e), as prescribed by the
Secretary of the Treasury in Revenue Ruling 2001-62.
(4 For any person who first becomes a member in any Plan year
beginning on or after January 1, 1996, compensation for any Plan
year shall not include any amounts in excess of the Internal
Revenue Code Section 401(a)(17) limitation (as amended by the
Omnibus Budget Reconciliation Act of 1993), which limitation
shall be adjusted as required by federal law for qualified
government plans and shall be further adjusted for changes in the
cost of living in the manner provided by Internal Revenue Code
Section 401(a)(17)(B). For any person who first became a member
prior to the first Plan year beginning on or after January 1, 1996,
the limitation on compensation shall be not less than the maximum
compensation amount that was allowed to be taken into account
under the Plan as in effect on July 1, 1993, which limitation shall
be adjusted for changes in the cost of living since 1989 in the
manner provided by Internal Revenue Code Section 401(a)(17).
(i) 401(a)(9) Required Distributions.
(1) Effective for distributions after December 31, 1996, in accordance
with Internal Revenue Code Section 401(a)(9), all benefits under
this Plan will be distributed, beginning not later than the required
beginning date set forth below, over a period not extending beyond
the life expectancy of the member or the life expectancy of the
member and a beneficiary.
(2) Any and all benefit payments shall begin by the later of
a. April 1 of the calendar year following the calendar year of
• the member's retirement date; or
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• b. April 1 of the calendar year following the calendar year in
which the member attains age 70 '/Z.
If an employee dies before his entire vested interest has been
distributed to him, the remaining portion of such interest will be
distributed at least as rapidly as provided for under this Plan and
will comply with the incidental death benefit under Internal
Revenue Code Section 401(a)(9)(G).
(4,) All distributions under this Plan will be made in accordance with
this section, Internal Revenue Code Section 401(a)(9) and the
regulations thereunder, notwithstanding any provisions of this Plan
to the contrary, effective beginning January 1, 2003.
Section 4. The Village Council hereby amends Chapter 2, "Administration," Article V,
"Pension and Retirement Systems," Division 4, "Pension and Certain Other Benefits for Fire and
Police Employees," of the Village Code of Ordinances by amending Section 2-170 to read as
follows (new language is underlined and deleted language is stricken 4Iffeugh):
Sec. 2-170. Direct transfers of eligible rollover distribution.
(2) Definitions.
(A) The term "Code" as used herein refers to the Internal Revenue
Code of the United States.
(B) Eligible rollover distribution. An eligible rollover distribution is
any distribution of all or any portion of the balance to the credit of
the 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 (10) years
or more; any distribution to the extent such distribution is required
under Section 401(a)(9) of the Code excluding hardship
distributions; and the portion of any distribution that is not
includable in gross income. For purposes of a direct rollover, a
portion of a distribution shall not fail to be an eligible rollover
distribution merely because the portion consists of after-tax
employee contributions which are not includible in gross income.
• However, such portion may be paid only to an individual
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retirement account or annuity described in Section 408(a) or (b) of
• the Code, or to a qualified defined contribution plan described in
401(a) or 403(a) of the Code 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) 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)
of the Code; a qualified trust; 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
eligible employer described in Section 457(e)(1)(A) of the Code or
an annuity contract described in Section 403(b) of the Code that
accepts the distributee's eligible rollover distribution and agrees to
separately account for amounts contributed into such plan from
this plan; or a qualified trust described in Section 401(a) of the
Code, that accepts the distributee's eligible rollover distribution.
However, in the case of an eligible rollover distribution to the
surviving spouse, an eligible retirement plan is an individual
retirement account or individual retirement annuity.
* * *
(3) Mandatory distributions. In the event of a mandatory distribution
greater than $1,000 under this Plan, if the participant does not elect to have such
distribution paid directly to an eligible retirement plan specified by the participant
in a direct rollover or to receive such distribution directly, then the Board will pay
the distribution in a direct rollover to an individual retirement plan designated by
the Board. This section is effective for mandatory distributions after October 1,
2006.
Section 5. The provisions of this Ordinance shall become and be made a part of the Code of
the Village of North Palm Beach, Florida.
Section 6. If any section, paragraph, sentence, clause, phrase or word of this Ordinance is for
any reason held by a court of competent jurisdiction to be unconstitutional, inoperative or void,
such holding shall not affect the remainder of this Ordinance.
Section 7. All ordinances or parts of ordinances and resolutions or parts of resolutions in
conflict herewith are hereby repealed to the extent of such conflict.
Section 8. This Ordinance shall take effect retroactive to October 27, 2011 once all of the
• following events have occurred: (1) the Village Council has received a report establishing the
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actuarial soundness of these amendments; (2) the amendments have been transmitted to the State
• of Florida Division of Retirement; and (3) a collective bargaining agreement ratifying the
amendments has been approved by the Village Council and both the Palm Beach County Police Benevolent Association and The Professional Firefighters/Paramedics of Palm Beach County,
Local 2928 or the Village is in receipt of written communications from the PBA and IAFF
evidencing a waiver of such bargaining.
PLACED ON FIRST READING THIS 10th DAY OF NOVEMBER, 2011.
PLACED ON SECOND,FINAL READING AND PASSED THIS 8th DAY OF DECEMBER,2011.
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VILLAGE CLERK
APPROVED AS TO FORM AND
LEGAL SUFFICIENCY:
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VILLAGE ATTORNEY
III
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