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2022-17 Code Amendment - Fire and Police Pension PlanORDINANCE NO. 2022-17 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 AMEND THE CALCULATION OF POLICE OFFICER RETIREMENT BENEFITS TO INCREASE THE MULTIPLIER USED TO CALCULATE RETIREMENT BENEFITS, MODIFY THE MAXIMUM CAP AND INCREASE THE EMPLOYEE CONTRIBUTION FOR POLICE OFFICER 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 Palm Beach County Police Benevolent Association, 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, an increase in the benefit multiplier, increases to the employee contributions rates, and a statement that Chapter 175 and 185 monies received from the State of Florida shall be used to offset the Village's contribution; 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 str; ever ,-i,, o • nh): 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 Page 1 of 7 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 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 and Police Officers 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. Page 2 of 7 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. 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 15 2018 (provided the member remained employed by the Village as a police officer on or after July 11, 2019); and three percent for credited service on and after October 1, 2022. On and after October 1, 2022, a A Police Officer retiree's maximum monthly pension benefit shall not exceed seventy five 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. 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. Page 3 of 7 For Police Officer members only: C� (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 Effective the first full payroll after October 1, 2022, the Police Officer member shall contribute eight and one-half (8.5) percent of earnings. vii Effective the first full payroll after October 1, 2023, the Police Officer member shall contribute ten (10) percent of earnings; and (viii) 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. Page 4 of 7 (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. (v) 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 subj ect 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 Page 5 of 7 cl, 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. (b) State contributions. Any monies received or receivable by reason of the laws of the State of Florida for the express purpose of funding and paying for the benefits of police officers or firefighters shall be deposited in the fund within the time prescribed by law. Such monies shall be for the sole and exclusive use of members or may be used to pay extra benefits for members. The State contributions pursuant to Chapters 175/185 are applied to reduce the Village's annual mntrihnti nn (c) Employer contributions. So long as this plan is in effect, the employer shall make contributions to the fund in an amount at least equal to the difference in each year as between the aggregate member and state contributions for the year and the total cost for the year as shown by the most recent actuarial valuation report for the system. The total cost for any year shall be defined as the total of normal cost plus the additional amount sufficient to amortize the unfunded actuarial liability in accordance with applicable laws of the State of Florida. The employer's contribution shall be deposited on at least a quarterly basis. The State contributions pursuant to Chapters 175/185 are applied to reduce the Village's annual contribution. (d) Forfeitures. Any forfeitures arising shall be applied to reduce future contributions to the plan. No forfeited amount shall be applied to change benefit amounts for members. Page 6 of 7 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 8Tu DAY OF SEPTEMBER, 2022. PLACED ON SECOND, FINAL READING AND PASSED THIS 22'D DAY OF SEPTEMBER, 2022. OR 1 % •�i� •ar.�a• ATTEST: VILLAGE CLERK I U APPROVED AS TO FORM AND LEGAL SUFFICIENCY: VILLAGE ATTORNEY Page 7 of 7