2010-01 Police & Fire Pension Plan Amendment ORDINANCE N0.2010-01
AN ORDINANCE OF THE VILLAGE COUNCIL OF THE VILLAGE OF
NORTH PALM BEACH, FLORIDA, AMENDING 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; AMENDING THE DEFINITIONS OF CREDITED SERVICE
AND EARNINGS TO PROVIDE CERTAIN BENEFITS FOR MEMBERS
ABSENT FROM WORK ON QUALIFYING MILITARY SERVICE;
AMENDING THE DEFINITIONS OF FIREFIGHTER AND POLICE OFFICER
TO CLARIFY THE INCLUSION OF SUPERVISORY PERSONNEL;
AMENDING THE EXCLUSIONS FROM DISABILITY TO RECOGNIZE
CERTAIN BENEFITS FOR MEMBERS ABSENT FROM WORK ON
QUALIFYING MILITARY SERVICE; AMENDING THE OPTIONAL FORMS
OF BENEFITS TO ALLOW A RETIRED MEMBER TO CHANGE HIS OR
HER BENEFICIARY UP TO TWO TIMES WITHOUT BOARD APPROVAL;
MODIFYING THE TERMS OF THE MEMBERS OF THE BOARD OF
TRUSTEES; ALLOWING MEMBERS TO BUY FEDERAL POLICE OFFICER
OR FIREFIGHTER SERVICE; AMENDING THE POWERS AND
AUTHORITY OF THE BOARD OF TRUSTEES TO EXPAND THE
PERMISSIBLE INVESTMENTS AND REQUIRE IDENTIFICATION OF AND
DIVESTITURE FROM SCRUTINIZED COMPANIES; AMENDING THE
REPEAL OR TERMINATION PROVISIONS TO INCORPORATE NEW
STATE LAW PROVISIONS; AMENDING THE PLAN TO ALLOW FOR THE
PAYMENT OF THIRD PARTY INSURANCE PREMIUMS FROM A
MEMBER'S RETIREMENT; AMENDING SECTIONS 2-159, 2-161, 2-162, 2-
164, 2-165, 2-166, 2-168 AND 2-169 OF THE VILLAGE CODE OF
ORDINANCES; PROVIDING FOR CODIFICATION; PROVIDING FOR
SEVERABILITY; PROVIDING FOR CONFLICTS; AND PROVIDING FOR
AN EFFECTIVE DATE.
WHEREAS, the North Palm Beach Police and Fire Pension Fund's ("Fund" or "Plan")
investment consultant has recommended that the Board of Trustees expand the list of permissible
investments; and
WHEREAS, the Board of Trustees recommends expanding the permissible investments
of the Fund to allow greater diversity in the Board's investments; and
WHEREAS, the Heroes Earnings Assistance and Relief Tax Act of 2008 ("HEART Act")
(H.R. 6081; P.L. 110-245) was passed into federal law and permits qualified pension plans to
provide certain benefits to members of the Fund absent from employment on active duty military
service; and
WHEREAS, the HEART Act provides for both required and permissive amendments to
qualified plans; and
Page 1 of 12
WHEREAS, Chapter 2009-97, Laws of Florida, made significant changes to Chapters 175
and 185, Florida Statutes, which govern the operation of the Plan; and
WHEREAS, the Fund's Board of Trustees has determined that it is in the best interests of
the members and beneficiaries to amend the Plan to further diversify the investments, to provide
certain benefits to individuals who are absent from employment on active duty military service,
and to amend the plan to comply with changes to Florida law; and
WHEREAS, the Village Council of the Village of North Palm Beach determines that the
adoption of this Ordinance is in the best interests of the residents and employees 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,
"Pensions and Retirement Systems," Division 4, "Pension and Certain Other Benefits for Fire
and Police Employees," by amending Section 2-159 to read as follows (additional language is
underlined and deleted language is *'~r°~~°'~):
Sec.2-159. Definitions.
As used herein, unless otherwise defined or required by the context, the
following words and phrases shall have the meaning indicated:
~
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.
Page2of12
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 USERRA
provisions vTiiiv~er.^~u' r''"^~~~~^ c°M~~°° ^ or any similar law; and provided
further that the employee shall apply for reemployment within the time and under
the conditions prescribed by law. ~'^r ^ ~.~^''°^°m°^ ^
gv v °viiu'uv°°"
" ~ °a ~ ~.r,°'° ° ^ ~~'~+^-~~ 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-emplo.~y 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 anon-duty death while emplo ed or
became disabled from anon-duty disability.
Earnings means a member's gross salary, including overtime, 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)L7), 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.
* ~ ~
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. section 633.35, and whose duty it is to extinguish fires, to
protect life, and to protect property. The term Firefighter includes all certified1
supervisory, and command personnel whose duties include, in whole or in part,
the supervision, training=guidance, and management responsibilities of full-time
firefi htg ers, part-time firefi hg
ters, or auxiliary firefighters but does not include
part-time firefighters or auxiliary
hg
tern.
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. section 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
Page3of12
highway laws of the state. This definition includes all certified supervisor, 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 auxiliar.
enforcement officers as the same are defined in F.S. sections 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.
Section 3. 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," by amending Section 2-161 to read as follows (additional language is
underlined and deleted language is °+r~^'~°~
Sec. Z-161. Benefit amounts.
* ~
(e) Disability retirement.
(10) A member will not be entitled to receive any disability retirement
income if the disability is a result of
a. Excessive and habitual use by the member of drugs,
intoxicants, or narcotics;
b. Injury or disease sustained by the member while willfully
and illegally participating in fights, riots, civil insurrections
or while committing a crime;
c. Injury or disease sustained by the member while serving in
any armed forces (this exclusion does not affect members
who have become disabled as a result of intervening military
service under the federal Heroes Earnings Assistance and
Relief Tax Act of 2008 (H.R. 6081; P.L. 110-245
d. Injury or disease sustained by the member after
employment has terminated;
e. Injury or disease sustained by the member while working
for anyone other than the village and arising out of such
employment.
Page4ofl2
Section 4. 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," by amending Section 2-162 to read as follows (additional language is
underlined and deleted language is st~cgc~~„):
Sec. 2-162. Optional forms of benefits.
Each member entitled to a normal, early, disability or vested retirement
benefit shall have the right, at any time prior to the date on which benefit
payments begin, to elect to have his or her benefit payable under any one (1) of
the options hereinafter set forth in lieu of benefits provided herein, and to revoke
any such elections and make a new election at any time prior to the actual
beginning of payments. The value of optional benefits shall be actuarially
equivalent to the value of benefits otherwise payable, and the present value of
payments to the retiring member must be at least equal to fifty (50) percent of the
total present value of payments to the retiring member and his/her beneficiary.
The member shall make such an election by written request to the board, such
request being retained in the board's files. Notwithstanding any other provision of
this section, a retired member mange his or her designation of joint annuitant
or beneficiar~p to two times as provided in F.S. section 175.333 without the
approval of the board of trustees or the current joint annuitant or beneficiary. The
retiree is not required to provide proof of the ,good health of the joint annuitant or
beneficiary being removed, and the joint annuitant or beneficiary being removed
need not be living. Any retired member who desires to change his or her joint
annuitant or beneficiary shall file with the board of trustees a notarized notice of
such changeUpon receipt of a completed change of joint annuitant form or such
other notice, the board of trustees shall adjust the member's monthly benefit by
the application of actuarial tables and calculations developed to ensure that the
benefit paid is the actuarial equivalent of the present value of the member's
current benefit and there is no impact to the Plan. The beneficiary or joint
annuitant being removed will be assumed deceased by the actuary in determining
the actuarially equivalent amount of the revised monthlXpayment. No retiree's
current benefits shall be increased as a result of the change of beneficiary.
(1) Option 1--Joint and last survivor option. The member may elect to receive
a benefit, which has been adjusted to the actuarial equivalent of the normal
form of benefit, during his/her lifetime and have such adjusted benefit (or
a designated fraction thereof, for example one hundred (100) percent,
seventy-five (75) percent, sixty-six and two-thirds (66 2/3) percent or fifty
(50) percent) continued after his death to and during the lifetime of his
beneficiary. The election of option 1 shall be null and void if the designated
beneficiary dies before the member's benefit payments commence.
(2) Option 2--Social security adjustment option. If a member retires before
being eligible for social security benefits, he may elect this option. A
member may elect to receive a larger pension up to the date he 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.
Page5of12
(3) Option 3--Other. In lieu of the other optional forms enumerated in this
section, benefits may be paid in any form approved by the board so long
as actuarial equivalence with the benefits otherwise payable is maintained,
provided, however, that the board shall not authorize any actuarially
equivalent single or lump sum distributions.
Section 5. 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," by amending Section 2-164 to read as follows (additional language is
underlined and deleted language is r+ri,.v°„
Sec. 2-164. Board of trustees--Generally.
(a) Composition. The board of trustees shall consist of five (5)
members: four (4) of whom shall be elected by a majority of the members of the
plan. Two (2) of the elected members shall be certified firefighters of the village,
and two (2) shall be certified police officers of the village. The fifth member of
the board shall be a legal resident of the village and shall be appointed by the
village council. Each of the elected board members shall be appointed for a period
of four 4 twe-(2} years, unless he sooner leaves the employment of the village or
forfeits membership on the board, whereupon a successor shall be elected by a
majority of the members of the plan. Each of the elected board members may
succeed himself in office. The resident member shall be a trustee for a term of
four 4 twe-(~} years unless he forfeits membership on the board and he may
succeed himself in office. The resident member shall be appointed by the village
council for a term commencing October 1, 1998, and expiring Apri130, 1999. The
resident member shall be appointed by the village council for atwo-year term
commencing May 1, 1999, and on the first day of May of each second year
thereafter. The resident member shall hold office at the pleasure of the village
council. The fifth member shall have the same rights as each of the other four (4)
members appointed or elected as herein provided. The trustees shall by majority
vote elect from its members a chairman and a secretary. The secretary of the
board shall keep a complete minute book of the actions, proceedings, or hearings
of the board. The trustees shall not receive any compensation as such, but may
receive expenses and per diem as provided by law.
* ~
Section 6. 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," by amending Section 2-165 to read as follows (additional language is
underlined and deleted language is °*ri°'>°r +'~~°~~~-''):
Sec. 2-165. Prior service.
Unless otherwise prohibited by law, the years or fractional parts of years
that a member previously served as a firefighter, police officer or public safety
officer with the village during a period of employment and for which accumulated
Page6of12
contributions were withdrawn from the fund, or the years and fractional parts of
years that a member served as a firefighter, police officer or public safety officer
for this or any other municipal, county,. er- state or federal fire, police or public
safety department, or any time served in the military service of the armed forces
of the United States, shall be added to the years of credited service provided that:
Section 7. 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," by amending Section 2-166 to read as follows (additional language is
underlined and deleted language is s~ric-lc~~eugh):
Sec. 2-166. Board of trustees Sa->~e --Power and authority.
The board shall be the administrator of the system and, as such, it shall be
solely responsible for administering the pension fund. Th° >,,.n,.,l ~hnn hn.,° +>7°
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The Board shall have the power and authority to invest and reinvest the monies of
the Fund and to hold, purchase, sell, assign transfer and dispose of any securities
and investments held in the Fund, including the power and authority to employ
counseling or investment management services. The aim of the investment
policies shall be to preserve the integrity and security of Fund principal to
maintain a balanced investment portfolio, to maintain and enhance the value of
the Fund principal, and to secure the maximum total return on investments that is
consonant with safet~of ,principal, provided that such investments and re-
investments shall be limited only by the investments permitted by the investment
policesguidelines adopted by the Board in accordance with Florida law Further
notwithstanding the foregoing investments in foreign investments are limited in
accordance with F.S. sections 175.071(1) and 185.06(l~(b)4. The Board must
discharge these duties with respect to the plan solely in the interest of the
participants and beneficiaries and (i) for the exclusive purpose of providing
benefits to participants and their beneficiaries and defra~g reasonable expenses
of administering the plan; (ii) with the care, skillLprudence and diligence under
the circumstances then prevailing that a prudent person acting in a like capacity
and familiar with such matters would use in the conduct of an enterprise of a like
character and with like aims; and (iii~y diversif~g the investments of the plan
so as to minimize the risk of lame losses, unless under the circumstances it is
clearly prudent not to do so.
Notwithstanding anything else in this subsection and as provided in F.S.
section 215.473, the board of trustees must identify and publicly report any direct
or indirect holdin s
igt may have in any scrutinized company as defined in that
section. Beginning January 1, 2010, the Board must proceed to sell redeem
divest, or withdraw all publicly traded securities it may have directly in that
company. The divestiture of any such security must be completed by September
10, 2010. The board and its named officers or investment advisors may not be
deemed to have breached their fiduciary duty in any action taken to dispose of any
such security, and the board shall have satisfactorily discharged the fiduciary
duties of loyalty, prudence, and sole and exclusive benefit to the participants of
the pension fund and their beneficiaries if the actions it takes are consistent with
the duties imposed by F.S. section 215.473 as provided for by F.S. sections
175.071 8) and 185.06(7) and the manner of the disposition if any is reasonable
as to the means chosen. For purposes of determining which companies are
scrutinized companies, the Board may utilize the list of scrutinized companies as
developed by the Florida State Board of Administration. No person may bring
any civil, criminal, or administrative action against the board of trustees or anX
employee, officer, director, or advisor of such pension fund based upon the
divestiture of any securitypursuant to this subsection.
Page $ of 12
Section 8. 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," by amending Section 2-168 to read as follows (additional language is
underlined and deleted language is s~^'~°~ +''r^~~R'~):
Sec. 2-168. Repeal or termination of plan.
(a) This plan and subsequent amendments pertaining to said plan, may
be modified, terminated, or amended, in whole or in part by the employer;
provided that if this plan shall be amended or repealed in its application to any
person benefitting hereunder, the amount of benefits which at the time of any such
alteration, amendment, or repeal shall have accrued to the member or beneficiary
shall not be affected thereby~~~o-th~~~tex~t~~the-as~e-is-o-rt~e
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Page9of12
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(b) Upon termination of the elan by the Village for any reason or
because of a transfer, merger, or consolidation of governmental units services or
functions as provided in chapter 121, or upon written notice to the board of
trustees by the Village that contributions under the plan are being_permanently
discontinued, the rights of all employees to benefits accrued to the date of such
termination or discontinuance and the amounts credited to the employees'
accounts are nonforfeitable. The fund shall be distributed in accordance with the
fo llo wing_pro cedures
~1,~ The board of trustees shall determine the date of distribution and
the asset value required to fund all the nonforfeitable benefits, after
taking into account the expenses of such distribution. The board
shall inform the Village if additional assets are required, in which
event the Village shall continue to financiallysupport the plan until
all nonforfeitable benefits have been funded.
The board of trustees shall determine the method of distribution of
the asset value, whether distribution shall be b~payment in cash,
by the maintenance of another or substituted trust fund, by the purchase
of insured annuities, or otherwise, for each police officer and firefighter
entitled to benefits under the plan, as specified in subsection (3).
The board of trustees shall distribute the asset value as of the date
of termination in the manner set forth in this subsection, on the basis
that the amount required to provide any given retirement income is
the actuarially computed single-sum value of such retirement
income, except that if the method of distribution determined under
subsection (2) involves the purchase of an insured annuity, the
amount required to provide the given retirement income is the single
premium payable for such annuity. The actuarial single-sum value
may not be less than the employee's accumulated contributions to
the plan, with interest if provided b.~plan, less the value of any
plan benefits preyiousl~paid to the employee.
Page 10 of 12
If there is asset value remaining after the full distribution specified
in subsection (3), and after payment of an~penses incurred with
such distribution, such excess shall be returned to the Village less
return to the state of the state's contributions, provided that if the
excess is less than the total contributions made by the Villa e and
the state to date of termination of the plan, such excess shall be
divided proportionately to the total contributions made by the
Village and the state.
The board of trustees shall distribute, in accordance with the
manner of distribution determined under subsection (2) the
amounts determined under subsection (3). ^
Section 9. 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," by amending Section 2-169 to read as follows (additional language is
underlined and deleted language ism^'~°„ *'~r^~~^'~):
Sec. 2-169. Miscellaneous.
(b) Non-assignability. No benefit provided for herein shall be pledgable,
assignable or subject to garnishment for debt or for other legal process, provided,
however:
The board shall honor court income deduction orders for the
payment of alimony or child support in accordance with rules and
procedures adopted by the Board of Trustees; or
Upon written request by the retiree, the Board of Trustees maX
authorize the Plan administrator to withhold from the monthly
retirement payment funds necessary to:
pay for benefits being received through the village
pay the certified bargaining a eng
t; or
to pay for premiums for accident health and long-term care
insurance for the retiree's spouse and dependants. A
retirement plan does not incur liability for participation in
this permissive program if its actions are taken in good
faith pursuant to F.S. sections 175.061(7) and 185.05(6).
*
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Section 10. The provisions of this Ordinance shall become and be made part of the Code of
Ordinances for the Village of North Palm Beach, Florida.
Section 11. If any section, paragraph, sentence, clause, phrase or word of this Ordinances 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 the Ordinance.
Section 12. All ordinances and resolutions, or parts of ordinances and resolutions, in conflict
herewith are hereby repealed to the extent of such conflict.
Section 13. This Ordinance shall become effective upon the occurrence and satisfaction of
each of the following events:
(a) the Village Council has received and has accepted a report establishing the actuarial
soundness of these amendments;
(b) a collective bargaining agreement ratifying the foregoing changes to pension benefits has
been ratified by the Village Council or the Village has received confirmation in writing
that the affected unions, or their successor organizations, consent to the proposed changes
and waive bargaining or impact bargaining; and
(c) a copy of this Ordinance is transmitted to the State of Florida Division of Retirement.
PLACED ON FIRST READING THIS 10th DAY OF DECEMBER, 2009.
PLACED ON SECOND, FINAL READING AND PASSED THIS h DAY OF J ARY, 2010.
(Village Seal)
ATTEST:
U Ty VILLAGE CLERK
APPROVED AS TO FORM AND
LEGAL SUFFICIENCY:
VILLAGE ATTORNEY
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