2022-06 Code Amendment - Firefighters Pension PlanORDINANCE NO. 2022-06
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 RETIREMENT SYSTEMS," OF CHAPTER
2, "ADMINISTRATION," OF THE VILLAGE CODE OF ORDINANCES BY
AMENDING SECTION 2-159, "CREATION OF TRUST AND DEFINITIONS,"
SECTION 2-161, "BENEFIT AMOUNTS," AND SECTION 2-163,
"CONTRIBUTIONS," TO MODIFY THE MAXIMUM CAP ON BENEFITS
AND THE EMPLOYEE CONTRIBUTION FOR FIREFIGHTER MEMBERS;
PROVIDING FOR CODIFICATION; PROVIDING FOR SEVERABILITY;
PROVIDING FOR CONFLICTS; AND PROVIDING FOR AN EFFECTIVE DATE.
WHEREAS, the Village sponsors a retirement plan for its police officer and firefighter employees
known as the Village of North Palm Beach Fire and Police Retirement Fund, which is administered
by a Board of Trustees;
WHEREAS, the Village and the Professional Firefighter/Paramedics of Palm Beach County, Local
2928, IAFF, Inc. have agreed to a new Collective Bargaining Agreement that provides for changes
to the Plan, specifically, an increase in the maximum cap on retirement benefits and increases to
the employee contributions rates for Fiscal Years 2023 through 2025; and
WHEREAS, the Village Council wishes to amend the Plan to incorporate these changes and
determines that the adoption of this Ordinance is in the interest 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.
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 Ordinances as follows (additional language is
underlined and deleted language is st-Fieke ,-1,r,,ug :
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..-, as follows:
(1) A member's accrued benefit for years of credited service earned
before October 1, 2018 shall be equal to the sum of two and one-
half percent of the member's average monthly earnings multiplied
by the member's credited service for the first twenty-four (24) years;
zero (0) percent of 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
the member's average monthly earnings multiplied by the member's
credited service for each year in excess of thirty (30) years.
(2) 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 two and three-
fourths percent per year of service. For Police Officers and
Firefighters who retire prior to October 1, 2022, the The total
accrued benefit shall not be greater than seventy-five (75) 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 two and three-fourths percent
per year of service on and after October 1, 2018. For Firefighters
who retire on and after October 1, 2022, the total accrued benefit
shall not be greater than eighty (80) 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 two and three-fourths percent per year of
service on and after October 1, 2018.
(3) 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.
Sec. 2-161. Benefit amounts.
(a) Normal retirement benefit.
(1) Amount. Each member who retires on or after the member's normal
retirement date shall be eligible to receive a normal retirement benefit
commencing on the member's actual retirement date. A retiree'_
m
above.monthly pension benefit shall not exeeed seventy five (75) per-eent of
retiree's average moi#hly eamings as that term is defined in Seetion 2 159
In all cases, the benefit provided for years of service on and after
October 1, 2018 shall be at least two and three-fourths 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 amount equal to the sum of two and one-
half percent of the member's average monthly earnings multiplied by the
member's credited service prior to October 1, 2018; and two and three-
fourths 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). A Police Officer retiree's maximum monthly pension
benefit shall not exceed seventy-five (75) percent of the retiree's average
monthly earnings as that term is defined in Section 2-159 above.
For Firefighter members: An amount equal to the sum of two and one-half
percent of the member's average monthly earnings multiplied by the
member's credited service prior to October 1, 2018; and two and three-
fourths 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). On and after October 1, 2022, a Firefighter retiree's
maximum monthly pension benefit shall not exceed eighty (80) percent of
the retiree's average monthly earnings as that term is defined in Section 2-
159 above; for retirements prior to October 1, 2022, the maximum benefit
is 75% of average monthly earnings.
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) 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 member contribution shall
increase to two and sixty-seven one hundredths (2.67) percent;
(ii) 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 six
(6) percent of earnings.
(v) Effective the first payroll period after October 1, 2020, the Police
Officer member shall contribute seven (7) percent of earnings.
(vi) During participation in the DROP, Police Officer members shall
contribute four (4) percent of earnings, with three (3) percent
credited to the member's DROP account and one (1) 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 (31/2) percent; and
(ii) Effective the first full payroll period after April 1, 2016, the
Firefighter member contribution shall increase to five (5) percent.
(iii) Effective with the second payroll period following adoption of
Ordinance No. 2019-11, the Firefighter member contribution shall
increase from five (5) percent of earnings to seven (7) [percent] of
earnings.
iv Effective the first full payroll period after September 30, 2022, the
Firefighter member contribution shall increase from seven (7)
percent to seven and one-half (7.5)percent.
Cv� Effective the first full payroll period after September 30, 2023, the
Firefighter member contribution shall increase from seven and one-
half (7.5) percent to eight (8) percent.
vi Effective the first full payroll period after September 30, 2024, the
Firefighter member contribution shall increase from eight (8)
percent to eight and one-half (8.5) percent.
(vii) During DROP, the Firefighter member shall contribute four (4)
percent of earnings, with three (3) percent credited to the member's
DROP account and one (1) percent applied to the Pension Plan.
(2) Duration. The village shall pick-up, rather than deduct from each member's
pay, beginning with the date of employment, two (2) percent of the
member's basic compensation. The monies so picked -up shall be deposited
in the fund on a monthly basis. An account record shall be maintained
continuously for each member. Pick-up contributions shall continue until
death, disability or termination of service, whichever shall occur first.
Contributions shall remain in the fund unless withdrawn as provided in the
plan. No member shall have the option to choose to receive the contributed
amounts directly instead of having them paid by the village directly to the
plan. All such pick-up contributions by the village shall be deemed and be
considered as part of the member's accumulated contributions and subject
to all provisions of the plan pertaining to accumulated contributions of
members. The intent of this provision is to comply with Section 414(h)(2)
of the Internal Revenue Code. For paying Social Security taxes, and for such
other purposes except as specified in this plan, the amount of employee
contributions "picked -up" or paid by the village will be added to the amount
distributed on a current basis in order to determine total wages, salary, pay
or compensation. In the event that the employer agrees to assume and pay
member contributions in lieu of direct contributions by the member, such
contributions shall accordingly be paid into the plan on behalf of the
members. No member subject to such agreement shall have the option of
choosing to receive the contributed amounts directly instead of having them
paid by the employer directly to the plan. All such contributions by the
employer shall be deemed and considered as part of the member's
accumulated contributions and subject to all provisions of this plan
pertaining to accumulated contributions of members. The intent of this
language is to comply with section 414(h)(2) of the Internal Revenue Code.
(3) Interest. Interest shall be credited to member contributions as of September
30 of each year at a rate equal to the change in the consumer price index,
published by the U.S. Bureau of Labor Statistics, over the twelve-month
period ending on the previous June 30. The maximum rate for any year shall
be seven (7) percent and the minimum rate shall be zero (0) percent.
(4) Guaranteed refund. All benefits payable under this plan are in lieu of a
refund of accumulated contributions. In any event, however, each member
shall be guaranteed the payment of benefits on his behalf at least equal in
total amount to his accumulated contributions.
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 this Ordinance.
Section 4. The provisions of this Ordinance shall become and be made part of the Code
of the Village of North Palm Beach, Florida.
Section 5. If any action, paragraph, sentence, clause, phrase or word of this Ordinance
is for any reason held be a court of competent jurisdiction to be unconstitutional, inoperative or
void, such holding shall not affect the remainder of this Ordinance.
Section 6. All ordinance or parts of ordinances and resolutions or parts of resolutions
of the Village of North Palm Beach, Florida, which are in conflict with this Ordinance are hereby
repealed to the extent of such conflict.
Section 7. This Ordinance shall be effective immediately upon adoption.
PLACED ON FIRST READING THIS 24TH DAY OF MARCH, 2022.
PLACED ON SECOND, FINAL READING AND PASSED THIS 14TH DAY OF APRIL, 2022.
ATTEST:
ILLAGf CLERK
APPROVED AS TO FORM AND
LEGAL SUFFICIENCY:
VILLAGE ATTORNEY
MA