2019-11 Code Amendment - Police and Fire PensionORDINANCE NO. 2019-11
AN ORDINANCE OF THE VILLAGE COUNCIL OF THE VILLAGE OF
NORTH PALM BEACH, FLORIDA AMENDING DIVISION 4, "PENSION
AND CERTAIN OTHER BENEFITS FOR FIRE AND POLICE EMPLOYEES,"
OF ARTICLE V, "PENSIONS AND RETIREMENTS SYSTEMS," OF
CHAPTER 2, "ADMINISTRATION," OF THE VILLAGE CODE OF
ORDINANCES TO IMPLEMENT CHANGES TO RETIREMENT BENEFITS
RESULTING FROM COLLECTIVE BARGAINING WITH THE UNIONS
REPRESENTING THE VILLAGE'S FIREFIGHTER EMPLOYEES (IAFF)
AND POLICE OFFICER EMPLOYEES (PBA); PROVIDING FOR
AMENDMENTS AFFECTING THE CALCULATION OF POLICE OFFICER
AND FIREFIGHTER RETIREMENT BENEFITS; PROVIDING FOR AN
INCREASE TO THE MULTIPLIER USED TO CALCULATE BENEFITS;
ESTABLISHING A 75% CAP ON RETIREMENT BENEFITS; INCREASING
EMPLOYEE CONTRIBUTION RATES; CREATING A DEFERRED
RETIREMENT BENEFIT PLAN (DROP); APPLYING THE USE OF
INSURANCE PREMIUM TAX REVENUE TO THE VILLAGE'S ANNUAL
RETIREMENT CONTRIBUTION; PROVIDING FOR CODIFICATION;
PROVIDING FOR SEVERABILITY; PROVIDING FOR CONFLICTS; AND
PROVIDING FOR AN EFFECTIVE DATE.
WHEREAS, collective bargaining with the Unions that represent the Village's firefighter and
police officer employees has been concluded with the ratification of new Collective Bargaining
Agreements by the Village Council and the bargaining units; and
WHEREAS, the new Collective Bargaining Agreements provide for amendments to the
retirement benefits for police officers and firefighters; and
WHEREAS, a majority of bargaining unit employees ratified their respective Agreements,
including the provisions for increasing employee contributions; and
WHEREAS, the Village Council finds that the retirement benefit amendments hereinafter
described are fully consistent with the new Collective Bargaining Agreements; and
WHEREAS, Village Administration has complied with all conditions precedent to the adoption
of a pension plan amendment as required by Florida Statutes; and
WHEREAS, the Village Council determines that the adoption of this Ordinance is in the interests
of the public health, safety and welfare of the Village and its residents.
NOW, THEREFORE, BE IT ORDAINED BY THE VILLAGE COUNCIL OF THE VILLAGE
OF NORTH PALM BEACH, FLORIDA as follows:
Section 1. The foregoing "whereas" clauses are hereby ratified as true and are incorporated
herein.
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Section 2. The Village Council hereby amends Chapter 2, "Administration," Article V,
"Pensions and Retirement Systems," Division 4, "Pension and Certain Other Benefits for Fire
and Police Employees," of the Village Code of Ordinance as follows (new language is
underlined and deleted language is str-ieken tIffeug ):
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 defined
in Internal Revenue Code Section 414(d).
(b) Definitions. As used herein, unless otherwise defined or required
by the context, the following words and phrases shall have the meaning indicated:
Accrued benefit means the portion of a member's normal retirement
benefit which is considered to have accrued as of any date. A member's accrued
benefit for years of credited service earned before October 1, 2018 as of any date
shall be equal to the sum of two and oe half (21,x) 2.50 percent of h�s the
member's average monthly earnings multiplied by his the member's credited
service for the first twenty-four (24) years; zero (0) percent of his the member's
average monthly earnings multiplied by the member's credited service for each
year after twenty-four (24) years up to thirty (30) years; and two (2) percent of 14S
the member's average monthly earnings multiplied by the member's credited
service for each year in excess of thirty (30) years. A member's accrued benefit
for years of credited service earned on and after October 1, 2018 (provided the
member was employed by the Village on or after July 11, 2019) shall be equal to
2.75 percent per year of service. The total accrued benefit shall not be greater
than 75.00 percent of average 'monthly earnings at the time of retirement
(including entry into the DROP), but in all cases the accrued benefit earned on
and after October 1, 2018 shall be at least 2.75 percent per year of service on and
after October 1, 2018. For purposes of this calculation, average monthly earnings
and credited service as of the date of determination shall be used. The accrued
benefit is considered to be payable in the plan's normal form commencing on the
member's normal retirement date, with such date determined as through the
member remains in full-time employment with the employer.
Accumulated contributions means a member's own contributions plus
interest credited thereto, if any, by the board.
Actuarial equivalence or actuarially equivalent means that any benefit
payable under the terms of this plan in a form other than the normal form of
benefit shall have the same actuarial present value on the date payment
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commences as the normal form of benefit. For purposes of establishing the
actuarial present value of any form of payment, all future payments shall be
discounted for interest and mortality by using seven (7) percent interest and the
1983 Group Annuity Mortality Table for Males, with ages set ahead five (5) years
in the case of disability retirees.
Average monthly earnings means one -sixtieth of earnings of a member
during the five (5) years of his employment within the last ten (10) years of
employment, which is greater than the total during any other five (5) years during
the ten-year period; provided that if a member shall have been employed for
fewer than five (5) years, such average shall be taken over the period of his actual
employment.
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 person so designated is living at that time,
the beneficiary shall be the estate of the member.
Board means the board of trustees which shall administer and manage the
plan herein provided and serve as trustee of the fund.
Credited service means the total number of years and fractional parts of
years of service expressed as years and completed months, during which a person
serves as an employee as defined below, omitting intervening years and fractional
parts of years, when such person may not be employed by the employer;
provided, however, such person may have, without interrupting his other years of
credited service, up to one (1) year's leave of absence.
Notwithstanding the foregoing, no employee will receive credit for years
or fractional parts of years of service for which he has withdrawn his
contributions to the pension fund for those years or fractional parts of years of
service unless he repays into the pension fund the contributions he has withdrawn,
with interest, within ninety (90) days after his reemployment, as provided in
section 2-160 below.
Further, an employee may voluntarily leave his contributions in the
pension fund for a period of five (5) years after leaving the employ of the
employer, pending the possibility of his being rehired, without losing credit for
the time he has participated actively as an employee. Should he not be re-
employed within five (5) years, his contributions shall be returned to him without
interest.
It is provided further that credited service shall include any service,
voluntary or involuntary, in the armed forces of the United States, provided the
employee is legally entitled to re-employment under the provisions of the federal
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USERRA provisions or any similar law; and provided further that the employee
shall apply for reemployment within the time and under the conditions prescribed
by law. Effective January 1, 2007, members who die or become disabled while
serving on active duty military service which intervenes the member's
employment shall be entitled to the rights of this section even though such
member was not re-employed by the village. Members who die or become
disabled while on active duty military service shall be treated as though re-
employed the day before the member became disabled or died, was credited with
the service they would have been entitled to under this section, and then either
died a non -duty death while employed or became disabled from a non -duty
disability.
Early retirement date means for each member the first day of the month
coincident with or next following the date on which he attains his fiftieth (50th)
birthday.
Earnings means a member's gross salary, including overtime as provided
below, public safety pay increment and special pay, but excluding bonuses, such
as longevity, safety and attendance awards and any other non -regular payments
such as unused sick leave or vacation time pay. Beginning with earnings after
December 31, 2008 and pursuant to Internal Revenue Code Section 414(u)(7), the
definition of earnings includes amounts paid by the village as differential wages
to members who are absent from employment while serving in qualified military
service. For Police Officer members only, effective the first full payroll following
October 1, 2013, Police Officers will be limited to three hundred (300) hours of
overtime per officer per fiscal year. For Firefighter members only, effective the
first full payroll following December 11, 2014, Firefighters will be limited to two
hundred (200) hours of overtime per firefighter per fiscal year.
Effective date means March 1, 1967, the date on which this plan initially
became effective. The effective date of this restated plan is the date as of which
the village council adopts the plan.
Employee means each actively employed full-time firefighter and police
officer of the village.
Employer means the Village of North Palm Beach, Florida.
Firefighter means any person employed in the fire department who is
certified as a firefighter as a condition of employment in accordance with the
provisions of F.S. § 633.35, and whose duty it is to extinguish fires, to protect life,
and to protect property. The term firefighter includes all certified, supervisory,
and command personnel whose duties include, in whole or in part, the
supervision, training, guidance, and management responsibilities of full-time
firefighters, part-time firefighters, or auxiliary firefighters but does not include
part-time firefighters or auxiliary firefighters.
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Fund means the trust fund established herein as part of the plan.
Member means an employee who fulfills the prescribed participation
requirements.
Normal retirement date means for each member the first day of the month
coincident with or next following the date on which the member attains age fifty-
five (55) or the date on which the member attains age fifty-two (52) and has
twenty-five (25) years of credited service. A member may retire on this normal
retirement date or on the first day of any month thereafter.
Plan or system means the Village of North Palm Beach Fire and Police
Retirement Fund as contained herein and all amendments thereto.
Plan year means each year commencing on October 1, and ending on
September 30.
Police officer means any person employed in the police department who is
certified as a law enforcement officer as a condition of employment in accordance
with the provisions of F.S. § 943.14, and who is vested with authority to bear
arms and make arrests, and whose primary responsibility is the prevention and
detection of crime or the enforcement of the penal, criminal, traffic or highway
laws of the state. This definition includes all certified supervisory and command
personnel whose duties include, in whole or in part, the supervision, training,
guidance, and management responsibilities of full-time law enforcement officers,
part-time law enforcement officers, or auxiliary law enforcement officers, but
does not include part-time law enforcement officers or auxiliary law enforcement
officers as the same are defined in F.S. §§ 943.10(6) and 943.10(8), respectively.
Any public safety officer who is responsible for performing both police and fire
services and who is certified as a police officer or firefighter shall be considered a
police officer.
Spouse shall mean the lawful wife or husband of a member at time of
preretirement death or retirement.
Sec. 2-161. Benefit amounts.
(a) Normal retirement benefit.
(1) Amount. Each member who retires on or after hi -s the
member's normal retirement date shall be eligible to
receive a normal retirement benefit commencing on h�s the
member's actual retirement date. A retiree's maximum
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monthlv aension benefit shall not exceed 75.00 percent of
the retiree's average monthly earnings as that term is
defined in Section 2-159 above. In all cases, the benefit
provided for _years of service on and after October 1, 2018
shall be at least 2.75 percent of average monthly earnings
per year of service (provided the member was employed by
the village on and after July 11, 2019). The monthly
normal retirement benefit shall be calculated as follows:
For Police Officer members:
an An amount equal to the sum of two and one ha4f (24 1
2.50 percent of 14s the member's average monthly earnings
multiplied by the member's credited servicerip or to
October 1, 2018, and 2.75 percent for credited service on or
after October 1, 2018 (provided the member remained
employed by the Village as a police officer on or after July
11 2019) fefthe first t �^ (24) years;
Tor^ �nl
i��l�� Q rf"1'CV-' Ip'CL1�L �'1�wi �, uvi v �v f
per-eei�1 aver-age
monthly eax. 1 .,,- ml Itiplie by the
1 _ n�.��� Q� �. n� 111E
l �mb�c�erted sefviee for- each year- after twenty
feiir
i74: vonra ur. to
4hir4y x301 yonrc.• and 1'w^ i7i r,ornov+t ^-Fhis
average thly multipliedby the member's
C ited servt h crony in
exeess of thirty (30) years.
�� Y `CA
For Firefighter members:
An amount equal to the sum of 2.50 percent of the
member's average monthly earnings multiplied by the
member's credited service prior to October 1, 2018, and
2.75 percent for credited service on or after October 1,
2018 (provided the member remained employed by the
Village as a firefighter on or after July 11, 2019).
Sec. 2-163. Contributions.
(a) Member contributions.
(1) Amount. Members of the plan shall make regular
contributions to the fund at rate equal to two (2) 2.00
percent of their respective earnings.
For Police Officer members only:
(i) Effective at the beginning of the first full payroll
period after October 1, 2013, the Police Office
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member contribution shall increase to two and
sixty-seven one hundredths (2.67) percent;
Effective the first full payroll period after October
1, 2014, the Police Officer member contribution
shall increase to three and thirty-three one
hundredths (3.33) percent; and
(iii) Effective the first full payroll period after October
1, 2015, the Police Officer member contribution
shall increase to four (4) percent.
iv Effective the second payroll period following the
adoption of Ordinance 2019-11, the Police Officer
member shall contribute 6.00 percent of earnings.
Lvj Effective the first payroll period after October 1,
2020, the Police Officer member shall contribute
7.00 percent of earnings,
viDuring participation in the DROP, Police Officer
members shall contribute 4.00 percent of earnings,
with 3.00 percent credited to the member's DROP
account and 1.00 percent applied to the Pension
Plan Unfunded Actuarial Accrued Liability
"UAAL" .
For Firefighter members only:
(i) Effective the beginning of the first full payroll
period after April 1, 2015, the Firefighter member
contribution shall increase to three and one-half
(3.50) percent; and
(ii) Effective the first full payroll period after April 1,
2016, the Firefighter member contribution shall
increase to five (5.00) percent.
iii Effective with the second pa roll period following
adoption of Ordinance No. 2019-11, the Firefighter
member contribution shall increase from 5.00
percent of earnings to 7.00 of earnings.
iv During DROP, the Firefighter member shall
contribute 4.00 percent of earnings, with 3.00
percent credited to the member's DROP account
and 1.00 percent applied to the Pension Plan
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Sec. 2-170.1 Deferred Option Benefit Plan (DROP)
Cal Effective upon the adoption this Ordinance, a Deferred Retirement
Option Plan ("DROP") benefit is created and added to the Plan and shall be
available to employees upon reaching their normal retirement date.
Upon entry into the DROP, an employee is considered retired for
pension plan purposes.
D An employeey elect to participate in the DROP provided the
employee makes the election no later than thirty (30) days after reaching the
employee's normal retirement date. Notwithstanding the foregoing, upon first
enactment of this Ordinance, members must make their initial election to
participate in the DROP by the later of:
Thirty (30) days after reaching their normal retirement date; or
Ninety (90) days after creation of the DROP.
CQ An election to participate in the DROP must be made in writing
and shall become irrevocable thirty (30) days following the date it is received by
the Pension Administrator and the Village's Director of Human Resources.
Le� An employee who elects to participate in the DROP may
participate in the plan for a maximum of sixty_(60) months. The application to
enter into the DROP shall include an irrevocable letter of resignation effective
upon the last day of DROP participation. Employees who participate in the DROP
may elect to terminate their participation prior to sixty (60) months of
participation, but may not continue participation beyond sixty (60) months from
the date of entry into the DROP.
M An eligible employee who elects to participate in the DROP shall
have the employee's benefit calculated based on credited service, multiplier, and
average monthly earnings determined as of the effective date of the employee's
election to participate in the DROP. No further credited service, benefit changes,
or changes in earnings shall be considered for pension purposes.
tg� After entering the DROP, a participant shall not be eligible for
disability or pre -retirement death benefits under the Plan. This provision is not
intended to limit entitlement to any statutory line of duty death benefit under state
or federal law.
A DROP account shall be established for each employee who
elects to participate These are not actual accounts; rather they are nominal
accounts and balances kept as a bookkeeping process.
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During the period of the employee's participation in the DROP, the
employee's normal retirement benefit shall be accounted for in the employee's
DROP account.
The employee's DROP account shall be invested with the
retirement plan assets and credited with the overall net (earnings less costs)
investment rate of return on the retirement plan assets during the period of the
employee's participation in the DROP and the crediting rate will be no less than
0.00 percent and no more than 6.40 percent.
At the conclusion of the employee's participation in the DROP, and
as a condition of participating_ in such plan, the employee will terminate Village
employment The retiree will thereafter receive a normal monthly retirement
benefit as previously calculated upon entry into the DROP, but the monthly
amount will be paid to the retiree and no longer accounted for in the DROP
account If the employee does not terminate participation in the DROP at the end
of the sixty (60) month maximum participation period, no earnings shall be
credited on the DROP balance and no further DROP deposits shall be made.
M No amount can be paid from the retirement plan until the DROP
employee terminates employment.
Lm) Upon termination, the retiree's DROP account will be distributed
to the retiree in a lump sum, which can be rolled over or paid in cash at the
retiree's discretion Direct rollover may be accomplished by any reasonable
means determined by the Board.
Cnj If a retiree dies before distribution of the retiree's DROP account
commences, the account balance shall be distributed to the retiree's designated
beneficiary in a lump sum, which can be rolled over or paid in cash at the
beneficiary's discretion.
I Distribution of an employee's DROP account shall begin as soon
as administratively practicable following the employee's termination of
employment The employee must elect the distribution within forty-five (45) days
following_ the employee's termination- date. If the employee does not timely
request the withdrawal of the asset in the DROP, no further earnings shall be
credited on the DROP balance.
�p) Any form of payment selected by the employee must comply with
the minimum distribution requirements of the IRC 401(A)(9), i.e., payments must
commence by age 70.50.
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Sec. 2-170.2. Use of Insurance Premium Tax Revenue.
The 2015 Florida Legislature enacted Chapter 2015-39, Laws of Florida
(hereinafter "Legislation") regarding the use of insurance premium tax revenue
("IPTR"). The Fund meets or exceeds the minimum benefits and minimum
standards established by the State of Florida for public employee police officer
and firefighter Pension plans as set forth in chapters 175 and 185, Florida Statutes.
The Legislation provides that use of IPTR, including any accumulations of
additional premium tax revenues which have not been allocated to fund benefits
in excess of the minimum benefits, may deviate from the provisions of the
Legislation by mutual consent of the collective bargaining agents of the police
officer and firefighter employees. This provision of the Plan reflects the mutual
agreement of the Village and the respective collective bargaining agents that all
IPTR, whether base premium at revenue or additional premium tax revenue,
received by the Village will be used by the Village to meet its annual actuarially
required contribution ("ARC") to the Fund.
Sec. 2-170.3. Defined contribution component.
Pursuant to the requirements of Sections 175.351(6) and 185.35(6),
Florida Statutes, a defined contribution component is established in addition to the
defined benefit component of this local law plan. This defined contribution
component is not currently funded. Once the plan is funded, the Board has the
authority to adopt rules regarding the operation of the defined contribution
component of the local law plan.
Section 3. All other provisions of Division 4 of Article V of Chapter 2 of the Village Code
of Ordinances not expressly amended as set forth above shall remain unchanged by the adoption
of the Ordinance. The Code sections set forth in Division 5, "Length of Service Award Plan for
Volunteer Firefighters," and Division 6, "ICMA Defined Contribution Pension Plan," shall be
renumbered from Section 2-170.01 through 2-170.15 to Section 170.5 through 170.20.
Section 4. The provisions of this Ordinance shall become and be made a part of the Code of
the Village of North Palm Beach, Florida.
Section 5. 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 6. All ordinances or parts of ordinances and resolutions or parts of resolutions in
conflict with this Ordinance are hereby repealed to the extent of such conflict.
Section 7. This Ordinance shall take effect immediately upon adoption.
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PLACED ON FIRST READING THIS 10TH DAY OF OCTOBER, 2019.
PLACED ON SECOND, FINAL READING AND PASSED THIS 24TH DAY OF OCTOBER, 2019.
(Village Seal) � "'., 0 -..,
AYOR
ATTEST:
VILLAGE CLERK
APPROVED AS TO FORM AND
LEGAL SUFFICIENCY:
VILLAGE ATTORNEY
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