4382 Firefighters Retirement SystemOrdinance No. 2016 -4382
An Ordinance of the City of Sanford, Florida, Amending
Chapter 66, pensions and retirement, Article III, firefighters'
retirement system of the Code of Ordinances of the City of
Sanford, amending Section 66 -71, definitions; amending
section 66 -74, finances and fund management; amending
section 66 -76, benefit amounts and eligibility; amending
section 66 -77, optional forms of benefits; amending section
66 -84, prior fire service; amending section 66 -86, deferred
retirement option plan; deleting section 66 -87, conviction and
forfeiture; false, misleading or fraudulent statements;
providing for legislative findings and intent; providing for
conflicts; providing for a savings provision; providing for
codification; providing for severability and providing for an
effective date.
Be it Enacted by the People of the City of Sanford, Florida:
Section 1. Legislative findings and intent.
(a). The City Commission of the City of Sanford hereby adopts and incorporates
into this Ordinance the City staff report and City Commission agenda memorandum
relating to this ordinance.
(b). The City of -Sanford has complied with all requirements and procedures of
Florida law in processing and advertising this Ordinance.
Section 2. Firefighters= Retirement System. Chapter 66, Article III, Code of
Ordinances of the City of Sanford, is hereby amended to read as follows by amending
Section 66 -71, Definitions, to amend the definitions of Accumulated Contributions,
Actuarial Equivalent, Credited Service, Effective Date, Firefighter and Spouse, and to
delete the definition of Gross Pay:
Accumulated contributions means a member's own contributions, without
interest, plus the amount described in section 66 76(e)(4) 66- 76(e)(3). For those
members who purchase credited service with interest or at no cost to the system, any
payment representing the amount attributable to member contributions based on the
applicable member contribution rate, interest and any required actuarially calculated
payments for the purchase of such credited service, shall be included in accumulated
contributions.
For the purposes of this Ordinance, underlined type shall constitute additions to the original text. ' ' ' shall constitute ellipses to the original text and stxil ethrough shall
constitute deletions to the original text.
Actuarial equivalent means a benefit or amount of equal value, based upon the RP
2000 Combined Healthy Unisex Mortality Table and an interest rate of eight (8) percent
peg —atom equal to the investment return assumption set forth in the last actuarial
valuation approved by the Board. This definition may only be amended by the city
pursuant to the recommendation of the board using the assumptions adopted by the
board with the advice of the plan =s actuary, such that actuarial assumptions are not
subject to city discretion.
Credited service means the total number of years and fractional parts of years of
service as a firefighter with member contributions when required, omitting intervening
years or fractional parts of years when such member was not employed by the city as a
firefighter. Upon any reemployment, a firefighter shall not receive credit for years or
fractional parts of years of service for which he has withdrawn his accumulated
contributions from the fund, unless the firefighter repays into the fund, within 90 days after
his reemployment as a firefighter, all the contributions he has withdrawn, plus interest for
the period the funds were withdrawn at the rate assumed by the actuarial valuation for
the fund on the contribution from the date of withdrawal to date of repayment. Such
repayment of contributions shall include any additional lump sum amounts withdrawn
equal to five percent of the member's base pay for all years of credited service from
October 1, 1976 to June 30, 1998, as referenced in section 66- 75(e)(4), plus interest
thereon at the rate assumed by the actuarial valuation. A member may voluntarily leave
his accumulated contributions in the fund for a period of five years after leaving the employ
of the fire department pending the possibility of being reemployed as a firefighter, without
losing credit for the time that he was a member of the system. If a vested member leaves
the employ of the fire department, his accumulated contributions will be returned only
upon his written request. If a member who is not vested is not reemployed as a firefighter
with the fire department within five years, his accumulated contributions, if $1,000.00 or
less, shall be returned. If a member who is not vested is not reemployed within five years,
his accumulated contributions, if more than $1,000.00, will be returned only upon the
written request of the member and upon completion of a written election to receive a cash
lump sum or to rollover the lump sum amount on forms designated by the board. Upon
return of a member's accumulated contributions, all of his rights and benefits under the
system are forfeited and terminated.
In addition, a member may receive credited service for periods which the member
is absent from employment and receiving workers' compensation benefits for injuries
sustained while acting as a firefighter for the city, up to the time maximum medical
improvement is reached, as determined in accordance with the Florida Workers'
Compensation Law.
The years or fractional parts of years that a member performs "Qualified Military
Service" consisting of voluntary or involuntary "service in the uniformed services" as
defined in the Uniformed Services Employment and Reemployment Rights Act
(USERRA) (P.L.103 -353), after separation from employment as a firefighter with the city
For the purposes of this Ordinance, underlined type shall constitute additions to the original text, ' ' ' shall constitute ellipses to the original text and st,ikethrough shall
constitute deletions to the original text.
to perform training or service, shall be added to his years of credited service for all
purposes, including vesting, provided that:
(a) The member is entitled to reemployment under the provisions of USERRA.
(b) The member returns to his employment as a firefighter within one (1) year
from the earlier of the date of his military discharge or release from active
service, unless otherwise required by USERRA.
(c) The maximum credit for military service pursuant to this paragraph shall be
five (5) years.
(d) This paragraph is intended to satisfy the minimum requirements of
USERRA. To the extent that this paragraph does not meet the minimum
standards of USERRA, as it may be amended from time to time, the
minimum standards shall apply.
In the event a member dies on or after January 1, 2007, while performing USERRA
Qualified Military Service, the beneficiaries of the member are entitled to any benefits
(other than benefit accruals relating to the period of qualified military service) as if the
member had resumed employment and then died while employed.
Beginning January 1, 2009, to the extent required by section 414(u)(12) of the
code, an individual receiving differential wage payments (as defined under section
3401(h)(2) of the code) from an employer shall be treated as employed by that employer,
and the differential wage payment shall be treated as compensation for purposes of
applying the limits on annual additions under section 415(c) of the code. This provision
shall be applied to all similarly situated individuals in a reasonably equivalent manner.
be permitted to be
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Effective date means the date en whieh this arts„ le beeem es effe April 27,
Firefighter means an actively employed full -time person employed by the city,
including his initial probationary employment period, who is certified as a firefighter as a
condition of employment in accordance with the provisions of F.S. t 633.35 408, and
whose duty it is to extinguish fires, to protect life and to protect property. The term
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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For the purposes of this Ordinance, underlined type shall constitute additions to the original test, ' ' ' shall constitute ellipses to the original text and 5tActinough shall
constitute deletions to the original text.
Spouse means the lawful wife eF husband of a membef eF FetiF member's or
retiree's spouse under applicable law at the time benefits become payable.
Section 3. Firefighters= Retirement System. Chapter 66, Article III, Code of
Ordinances of the City of Sanford, is hereby amended to read as follows by amending
Section 66 -74, Finances and Fund Management, subsection (6)(b)3.:
3. In addition, the board may, upon recommendation by the board =s
investment consultant, make investments in group trusts meeting the
requirements of Internal Revenue Service Revenue Ruling 81 -1001
ai-rd or Revenue Ruling 2011 -1 IRS Notice 2012 -6 and Revenue
Ruling 2014 -24 or successor rulings or guidance of similar import,
and operated or maintained exclusively for the commingling and
collective investment of monies, provided that the funds in the group
trust consist exclusively of trust assets held under plans qualified
under section 401(a) of the code, individual retirement accounts that
are exempt under section 408(e) of the code, eligible governmental
plans that meet the requirements of section 457(b) of the code, and
governmental plans under 401(a)(24) of the code. For this
purpose, a trust includes a custodial account or a separate tax
favored account maintained by an insurance company that is treated
as a trust under section 401(f) or under section 457(g)(3) of the code.
While any portion of the assets of the fund are invested in such a
group trust, such group trust is itself adopted as a part of the system
or plan.
a
C,
The separate account maintained by the aroup trust for the
1
For the purposes of this Ordinance, underlined type shall constitute additions to the original text. ' ' ' shall constitute ellipses to the original text and strilrethrough shall
constitute deletions to the original text.
Section 4. Firefighters= Retirement System. Chapter 66, Article III, Code of
Ordinances of the City of Sanford, is hereby amended to read as follows by amending
Section 66 -76, Benefit Amounts and Eligibility, subsection (a), Normal Retirement,
subsection (a)(1), Normal Retirement Date:
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age oo ana ine compieyon o'
ipletion of 25 years of creditec
member shall become onE
is accrued benefit at norma
retirement date shall be the
or next followina the date the
Section 5. Firefighters= Retirement System. Chapter 66, Article III, Code of
Ordinances of the City of Sanford, is hereby amended to read as follows by amending
Section 66 -76, Benefit Amounts and Eligibility, subsection (c), Pre - Retirement Death,
subsection (c)(2)b.:
(c)(2) b. If the deceased member was eligible for normal or early
retirement, the spouse beneficiary shall receive a benefit payable for
ten (10) years, beginning on the first day of the month following the
member's death or at the deceased member's otherwise eat er
normal retirement date, at the option of the spouse beneficiary.
The benefit shall be calculated as for normal retirement based on the
deceased member's credited service and average final
compensation as of the date of his death and reduced as for early
retirement, if applicable.
For the purposes of this Ordinance, underlined type shall constitute additions to the original text, ' ' ' shall constitute ellipses to the original text and stAct1nough shall
constitute deletions to the original text.
Section 6. Firefighters= Retirement System. Chapter 66, Article III, Code of
Ordinances of the City of Sanford, is hereby amended to read as follows by amending
Section 66 -76, Benefit Amounts and Eligibility, subsection (d), Disability, subsection
(d)(1), Disability Benefits On -Duty, subsection (d)(3), Disability Benefits Off -Duty, and
subsection (d)(7), Worker =s Compensation:
(d)(1) Disability benefits on -duty. Any member who shall become totally and
permanently disabled to the extent that he is unable, by reason of a
medically determinable physical or mental impairment, to render useful and
efficient service as a firefighter, which disability was directly caused by the
performance of his duty as a firefighter, shall, upon establishing the same
to the satisfaction of the board, be entitled to a monthly pension equal to
three and eight- hundredths percent of base pay at the date of disability for
each year of credited service, but in any event the minimum amount to be
paid to the member shall be equal to 60 percent of the base pay of the
member at the date of disability. Notwithstanding the previous sentence, in
the event a member is determined by the board to be disabled in -line of duty
and the disability resulted from the perpetration of an intentional act of
violence directed toward the firefighter and the board reasonably believes
the perpetrator intended to cause great bodily harm or permanent
disfigurement of the firefighter, the minimum amount paid to the member
shall be 80 percent of the average final compensation of the member.
Terminated persons, either vested or non - vested, are not eligible for
disability benefits,
(d)(3) Disability benefits off-duty. Any member with five years or more credited
service who shall become totally and permanently disabled to the extent
that he is unable, by reason of medically determinable physical or mental
impairment, to render useful and efficient service as a firefighter, which
disability is not directly caused by the performance of his duties as a
firefighter shall, upon establishing the same to the satisfaction of the board,
be entitled to a monthly pension equal to three and eight- hundredths
percent of base pay at the date of disability for each year of credited service.
Terminated persons, either vested or non - vested, are not eligible for
disability benefits,
For the purposes of this Ordinance, underlined type shall constitute additions to the original text. ' ' ' shall constitute ellipses to the original text and stt&thzough shall
constitute deletions to the original text.
6
(d)(7) Workers' compensation. When a retiree is receiving a disability pension
and workers' compensation benefits pursuant to F.S. ch. 440, Florida
Statute and /or any other disability benefit provided by the city, for the same
disability, and the total monthly benefits received from all sources exceeds
100 percent of the member's average monthly wage, as defined in F.S. ch.
440„ the disability pension benefit shall be reduced so that the total monthly
amount received by the retiree does not exceed 100 percent of average
monthly wage. The amount of any lump sum workers' compensation
payment shall be converted to an equivalent monthly benefit payable for ten
years certain by dividing the lump sum amount by 83.9692. Notwithstanding
the foregoing, in no event shall the disability pension benefit be reduced
below the greater of 42 percent of average final compensation or two and
three quarters percent of average final compensation times years of
credited service.
Section 7. Firefighters= Retirement System. Chapter 66, Article III, Code of
Ordinances of the City of Sanford, is hereby amended to read as follows by amending
Section 66 -76, Benefit Amounts and Eligibility, subsection (f), Maximum Pension,
subsection (f)(6), (f)(8), (f)(1 2)b., and by adding subsection (f)(13):
(f)(6) Less than Ten (90) Years of Participation of Se;= The maximum
retirement benefits payable under this section to any member who has
completed less than ten (10) years of
participation shall be the amount determined under subsection (1) of this
section multiplied by a fraction, the numerator of which is the number of the
member's years of eFedited service participation and the denominator of
which is ten (10). The reduction provided by this subsection cannot
reduce the maximum benefit below 10% of the limit determined without
regard to this subsection. The reduction provided for in this subsection
shall not be applicable to pre - retirement disability benefits paid pursuant to
Sec. 66- 76(d), or pre- retirement death benefits paid pursuant to Sec. 66-
76(c).
(f)(8) Ten Thousand Dollar ($10,000) Limit; Less Than Ten Years of Service.
Notwithstanding anything in this section 66- 76(f), the retirement benefit
payable with respect to a member shall be deemed not to exceed the limit
set forth in this subsection (f)(8) of section 66 -76 if the benefits payable,
For the purposes of this Ordinance, underlined type shall constitute additions to the original text, ' ' ' shall constitute ellipses to the original text and strikcthrovgk shall
constitute deletions to the original text.
with respect to such member under this system and under all other qualified
defined benefit pension plans to which the City contributes, do not exceed
ten thousand dollars ($10,000) for the applicable limitation year and or for
any prior limitation year., and the City has not at any time maintained a
qualified defined contribution plan in which the member participated;
provided, however, that if the member has completed less than ten (10)
years of credited service with the City, the limit under this subsection (f)(8)
of section 66 -76 shall be a reduced limit equal to ten thousand dollars
($10,000) multiplied by a fraction, the numerator of which is the number of
the member's years of credited service and the denominator of which is ten
(10).
(f) (12) b. No member of the system shall be allowed to receive a retire-
ment benefit or pension which is in part or in whole based upon any
service with respect to which the member is already receiving, or will
receive in the future, a retirement benefit or pension from a different
employer's retirement system or plan. This restriction does not
apply to social security benefits or federal benefits under Chapter 67
1223, Title 10, U.S. Code.
(m) Effect of Direct Rollover on 41&b) Limit. If the plan accepts a direct
under Code Section
from the rollover an
n required under Co(
of the limit under Cc
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Section 8. Firefighters= Retirement System. Chapter 66, Article III, Code of
Ordinances of the City of Sanford, is hereby amended to read as follows by amending
Section 66 -76, Benefit Amounts and Eligibility, subsection (g), Minimum Distribution of
Benefits, subsection (g)(2)b.4.:
(g)(2) b. 4. If the member's surviving spouse is the
member's sole designated beneficiary and the surviving
spouse dies after the member but before distributions to the
surviving spouse begin, this subsection (2)b., other than
subsection (2)b.1., will apply as if the surviving spouse were
the member.
For purposes of this subsection (2)b. and ."..eetion -(6),
distributions are considered to begin on the member's
required beginning date or, if subsection (2)b.4. applies, the
date of distributions are required to begin to the surviving
spouse under subsection (2)b.1. If annuity payments
irrevocably commence to the member before the member's
required beginning date (or to the member's surviving spouse
before the date distributions are required to begin to the
For the purposes of this Ordinance, underlined type shall constitute additions to the original text, ' ' ' shall constitute ellipses to the original text and ugh shall
constitute deletions to the original text.
surviving spouse under subsection (2)b.1.) the date
distributions are considered to begin is the date distributions
actually commence.
Section 9. Firefighters= Retirement System. Chapter 66, Article II'l, Code of
Ordinances of the City of Sanford, is hereby amended to read as follows by amending
Section 66 -77, Optional Forms of Benefits, subsection (1)(d), and (2):
(d) For members who do not participate in the drop pursuant to section 66 -86,
the member may elect a percentage of benefit in a lump sum as follows:
a. Ten percent of the total actuarial equivalent value of the benefit paid
as a lump sum with the remaining 90 percent paid under the normal
form or as per subsections (a), (b), or (c) above.
b. Fifteen percent of the total actuarial equivalent value of the benefit
paid as a lump sum with the remaining 85 percent paid under the
normal form or as per subsections (a), (b), or (c) above.
C. Twenty percent of the total value actuarial equivalent of the benefit
paid as a lump sum with the remaining 80 percent paid under the
normal form or as per subsections (a), (b), or (c) above.
d. Twenty -five percent of the total actuarial equivalent value of the
benefit paid as a lump sum with the remaining 75 percent paid under
the normal form or as per subsections (a), (b), or (c) above.
(2) The member, upon electing any option of this section, will designate the
joint pensioner (subsection (1)(b) above) or beneficiary (or beneficiaries) to receive the
benefit, if any, payable under the system in the event of member's death, and will have
the power to change such designation from time to time. Such designation will name a
joint pensioner or one or more primary beneficiaries where applicable. A member may
change his beneficiary at any time. If a member has elected an option with a joint
pensioner and the member's retirement income benefits have commenced, the member
may thereafter change his designated beneficiary at any time, but may only change his
joint pensioner twice. Subject to the restriction in the previous sentence, a member may
substitute a new joint pensioner for a deceased joint pensioner. Effective January 1, 2005,
any current retiree, regardless of his date of retirement, may elect the options provided
for in this subsection (2). In the absence of proof of good health of the ioint pensioner
beina replaced. the actuary will assume that the ioint pensioner has deceased for
Section 10. Firefighters= Retirement System. Chapter 66, Article III, Code of
Ordinances of the City of Sanford, is hereby amended to read as follows by amending
Section 66 -84, Prior Fire Service, subsection (6):
For the purposes of this Ordinance, underlined type shall constitute additions to the original text, ' ' ' shall constitute ellipses to the original text and striketh ... 0 shall
constitute deletions to the original text.
0
(6) In no event, however, may credited service be purchased pursuant to this
section for prior service with any other municipal, county, state or special
district fire department in the State of Florida, if such prior service forms or
will form the basis of a retirement benefit or pension from a different
employer's retirement system or plan as set forth in section 66 -76,
subsection {f}(I 1 )b (f)(12Z.
Section 11. Firefighters= Retirement System. Chapter 66, Article III, Code of
Ordinances of the City of Sanford, is hereby amended to read as follows by amending
Section 66 -86, Deferred Retirement Option Plan:
Sec. 66 -86. Deferred retirement option plan.
(a) Definitions. As used in this section 2 -296, the following definitions apply:
(1) "DROP" means the City of City of Sanford Firefighters Deferred Retirement
Option Plan.
(2) "DROP account' means the account established for each DROP participant
under subsection (c).
"Total return of the assets" -- For purposes of calculating earnings on a
[41 r 4116- ORIMIMili3imII ll �1061ty1011 ire NOT-1If3 JFTINA- 1100FAWWiMYIW
(b) Participation.
(1) Eligibility to participate. In lieu of terminating his employment as a
firefighter, any member who is eligible for normal retirement under the
system may elect to defer receipt of such service retirement pension and to
participate in the DROP.
(2) Election to participate. A member's election to participate in the DROP
must be made in writing in a time and manner determined by the board and
shall be effective on the first day of the first calendar month which is at least
15 business days after it is received by the board.
(3) Period of participation. A member who elects to participate in the DROP
under subsection (b)(2), shall participate in the DROP for a period not to
exceed 60 months beginning at the time his election to participate in the
DROP first becomes effective. An election to participate in the DROP shall
constitute an irrevocable election to resign from the service of the city not
later than the date provided for in the previous sentence. A member may
participate only once.
For the purposes of this Ordinance, underlined type shall constitute additions to the original text. ' ' ' shall constitute ellipses to the original text and striketh... shall
constitute deletions to the original text.
10
(4) Termination of participation.
a. A member's participation in the DROP shall cease at the earlier of:
1. The end of his permissible period of participation in the DROP
as determined under subsection (b)(3); or
2. Termination of his employment as a firefighter.
b. Upon the member's termination of participation in the DROP,
pursuant to subsection 1. above, all amounts provided for in
subsection (c)(2), including monthly benefits and investment
earnings and losses, shall cease to be transferred from the system
to his DROP account. Any amounts remaining in his DROP account
shall be paid to him in accordance with the provisions of subsection
(d) when he terminates his employment as a firefighter.
C. A member who terminates his participation in the DROP under this
subsection (b)(4) shall not be permitted to again become a
participant in the DROP.
(5) Effect of DROP participation on the system.
a. A member's credited service and his accrued benefit under the
system shall be determined on the date his election to participate in
the DROP first becomes effective. The member shall not accrue any
additional credited service or any additional benefits under the
system (except for any supplemental benefit payable to DROP
participants or any additional benefits provided under any
cost -of- living adjustment for retirees in the system) while he .is a
participant in the DROP. After a member commences participation,
he shall not be permitted to again contribute to the system nor shall
he be eligible for disability or pre - retirement death benefits, except
as provided for in section 66 -85, reemployment after retirement.
b. No amounts shall be paid to a member from the system while the
member is a participant in the DROP. Unless otherwise specified in
the system, if a member's participation in the DROP is terminated
other than by terminating his employment as a firefighter, no
amounts shall be paid to him from the system until he terminates his
employment as a firefighter. Unless otherwise specified in the
system, amounts transferred from the system to the member's
DROP account shall be paid directly to the member only on the
termination of his employment as a firefighter.
(c) Funding.
(1) Establishment of DROP account. A DROP account shall be established
for each member participating in the DROP. A member's DROP account
shall consist of amounts transferred to the DROP under subsection (c)(2),
and earnings on those amounts.
(2) Transfers from retirement system.
For the purposes of this Ordinance, underlined type shall constitute additions to the original text, ' ' ' shall constitute ellipses to the original text and stri6tlnoagh shall
constitute deletions to the original text.
11
a. As of the first day of each month of a member's period of participation
in the DROP, the monthly retirement benefit he would have received
under the system had he terminated his employment as a firefighter
and elected to receive monthly benefit payments thereunder shall be
transferred to his DROP account, except as otherwise provided for
in subsection (b)(4)b. A member's period of participation in the
DROP shall be determined in accordance with the provisions of
subsections (b)(3) and (b)(4), but in no event shall it continue past
the date he terminates his employment as a firefighter.
b. Except as otherwise provided in subsection (b)(4)b., a member's
DROP account under this subsection (c)(2) shall be debited or
credited after eaeh fiseal year quart with earnings, to be credited
or debited to the member's DROP account. determined as of the last
etermined as
The average daily balance in a member's DROP account shall be
credited or debited at a rate equal to the net investment return
realized by the system for that quarter. "Net investment return" for
the purpose of this paragraph is the total return of the assets in which
the member's DROP account is invested by the board net of
brokerage commissions, transaction costs and management fees.
calcu
each auarter by the investment consultant pursuant to contracts with
nvestment consu
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C. A member's DROP account shall only be credited or debited with
earnings and monthly benefits while the member is a participant in
the DROP. A member's final DROP account value for distribution to
the member upon termination of participation in the DROP shall be
the value of the account at the end of the quarter immediately
preceding termination of participation date plus any monthly periodic
additions made to the DROP account subsequent to the end of the
previous quarter and prior to distribution. If a member fails to
terminate employment after participating in the DROP for the
permissible period of DROP participation, then beginning with the
member's 1st month of employment following the last month of the
permissible period of DROP participation, the member's DROP
account will no longer be credited or debited with earnings, nor will
monthly benefits be transferred to the DROP account. All such
non - transferred amounts shall be forfeited and continue to be
forfeited while the member is employed by the fire department. A
member employed by the fire department after the permissible
For the purposes of this Ordinance, underlined type shall constitute additions to the original test, ' ' ' shall constitute ellipses to the original text and strikctlnough shall
constitute deletions to the original text.
12
period of DROP participation will still not be eligible for pre - retirement
death or disability benefits, and he will accrue additional credited
service only as provided for in section 66 -85.
(d) Distribution of DROP accounts on termination of employment.
(1) Eligibility for benefits. A member shall receive the balance in his DROP
account in accordance with the provisions of this subsection (d) upon his
termination of employment as a firefighter. Except as provided in subsection
(d)(5), no amounts shall be paid to a member from the DROP prior to his
termination of employment as a firefighter.
(2) Form of distribution.
a. Unless the member elects otherwise, distribution of his DROP
account shall be made in a lump sum, subject to the direct rollover
provisions set forth in subsection (d)(6). Elections under this
paragraph shall be in writing and shall be made in such time or
manner as the board shall determine.
b. If a member dies before his benefit is paid, his DROP account shall
be paid to his beneficiary in such optional form as his beneficiary may
select. If no beneficiary designation is made, the DROP account shall
be distributed to the member's estate.
(3) Date of payment of distribution. Except as otherwise provided in this
subsection (d), distribution of a member's DROP account shall be made as
soon as administratively practicable following the member's termination of
employment. Distribution of the amount in a member's DROP account will
not be made unless the member completes a written request for distribution
and a written election, on forms designated by the board, to either receive
a cash lump sum or a rollover of the lump sum amount.
(4) Proof of death and right of beneficiary or other person. The board may
require and rely upon such proof of death and such evidence of the right of
any beneficiary or other person to receive the value of a deceased
member's DROP account as the board may deem proper and its
determination of the right' of that beneficiary or other person to receive
payment shall be conclusive.
(5) Distribution limitation. Notwithstanding any other provision of this
subsection (d), all distributions from the DROP shall conform to the
"Minimum distribution of benefits" provisions as provided for herein.
(6) Direct rollover of certain distributions. This subsection applies to
distributions made on or after January 1, 2002. Notwithstanding any
provision of the DROP to the contrary, a distributee may elect to have any
portion of an eligible rollover distribution paid in a direct rollover as
otherwise provided under the system in section 2 -291.
(e) Administration of DROP.
For the purposes of this Ordinance, underlined type shall constitute additions to the original text. ' ' ' shall constitute ellipses to the original text and stzikethraagh shall
constitute deletions to the original text.
is]
(1) Board administers the DROP. The general administration of the DROP,
the responsibility for carrying out the provisions of the DROP and the
responsibility of overseeing the investment of the DROP's assets shall be
placed in the board. The members of the board may appoint from their
number such subcommittees with such powers as they shall determine;
may adopt such administrative procedures and regulations as they deem
desirable for the conduct of their affairs; may authorize one or more of their
number or any agent to execute or deliver any instrument or make any
payment on their behalf; may retain counsel, employ agents and provide for
such clerical, accounting, actuarial and consulting services as they may
require in carrying out the provisions of the DROP; and may allocate among
themselves or delegate to other persons all or such portion of their duties
under the DROP, other than those granted to them as trustee under any
trust agreement adopted for use in implementing the DROP, as they, in their
sole discretion, shall decide. A trustee shall not vote on any question
relating exclusively to himself.
(2) Individual accounts, records and reports. The board shall maintain
records showing the operation and condition of the DROP, including records
showing the individual balances in each member's DROP account, and the
board shall keep in convenient form such data as may be necessary for the
valuation of the assets and liabilities of the DROP. The board shall prepare
and distribute to members participating in the DROP and other individuals
or file with the appropriate governmental agencies, as the case may be, all
necessary descriptions, reports, information returns, and data required to
be distributed or filed for the DROP pursuant to the Code and any other
applicable laws.
(3) Establishment of rules. Subject to the limitations of the DROP, the board
from time to time shall establish rules for the administration of the DROP
and the transaction of its business. The board shall have discretionary
authority to construe and interpret the DROP (including but not limited to
determination of an individual's eligibility for DROP participation, the right
and amount of any benefit payable under the DROP and the date on which
any individual ceases to be a participant in the DROP). The determination
of the board as to the interpretation of the DROP or its determination of any
disputed questions shall be conclusive and final to the extent permitted by
applicable law.
(4) Limitation of liability.
a. The trustees shall not incur any liability individually or on behalf of
any other individuals for any act or failure to act, made in good faith
in relation to the DROP or the funds of the DROP.
b. Neither the board nor any trustee of the board shall be responsible
for any reports furnished by any expert retained or employed by the
board, but they shall be entitled to rely thereon as well as on
certificates furnished by an accountant or an actuary, and on all
opinions of counsel. The board shall be fully protected with respect
to any action taken or suffered by it in good faith in reliance upon
such expert, accountant, actuary or counsel, and all actions taken or
For the purposes of this Ordinance, underlined type shall constitute additions to the original text, ' ' ' shall constitute ellipses to the original text and Striketinaugh shall
constitute deletions to the original text.
14
(f)
101
(2)
(3)
suffered in such reliance shall be conclusive upon any person with
any interest in the DROP.
General provisions.
No emDlover discretion. The DROP benefit is determined pursuant to a
(4) IRC limit. The DROP account
(4 5) Amendment of DROP. The DROP may be amended by an ordinance of
the city at any time and from time to time, and retroactively if deemed
necessary or appropriate, to amend in whole or in part any or all of the
provisions of the DROP. However, except as otherwise provided by law, no
amendment shall make it possible for any part of the DROP's funds to be
used for, or diverted to, purposes other than for the exclusive benefit of
persons entitled to benefits under the DROP. No amendment shall be made
which has the effect of decreasing the balance of the DROP account of any
member.
(-2 §) Facilityofpayment, If a member or other person entitled to a benefit under
the DROP is unable to care for his affairs because of illness or accident or
is a minor, the board shall direct that any benefit due him shall be made
only to a duly appointed legal representative. Any payment so made shall
be a complete discharge of the liabilities of the DROP for that benefit.
(3 Z) Information. Each 'member, beneficiary or other person entitled to a
benefit, before any benefit shall be payable to him or on his account under
the DROP, shall file with the board the information that it shall require to
establish his rights and benefits under the DROP.
(4 8) Prevention of escheat If the board cannot ascertain the whereabouts of
any person to whom a payment is due under the DROP, the board may, no
earlier than three years from the date such payment is due, mail a notice of
For the purposes of this Ordinance, underlined type shall constitute additions to the original text, shall constitute ellipses to the original text and stliketh,ough shall
constitute deletions to the original text.
15
such due and owing payment to the last known address of such person, as
shown on the records of the board or the city. If such person has not made
written claim therefor within three months of the date of the mailing, the
board may, if it so elects and upon receiving advice from counsel to the
DROP, direct that such payment and all remaining payments otherwise due
such person be canceled on the records of the DROP. Upon such
cancellation, the DROP shall have no further liability therefor except that, in
the event such person or his beneficiary later notifies the board of his
whereabouts and requests the payment or payments due to him under the
DROP, the amount so applied shall be paid to him in accordance with the
provisions of the DROP.
(-5 9) Written elections, notification.
a. Any elections, notifications or designations made by a member
pursuant to the provisions of the DROP shall be made in writing and
filed with the board in a time and manner determined by the board
under rules uniformly applicable to all employees similarly situated.
The board reserves the right to change from time to time the manner
for making notifications, elections or designations by members under
the DROP if it determines after due deliberation that.such action is
justified in that it improves the administration of the DROP. In the
event of a conflict between the provisions for making an election,
notification or designation set forth in the DROP and such new
administrative procedures, those new administrative procedures
shall prevail.
b. Each member or retiree who has a DROP account shall be
responsible for furnishing the board with his current address and any
subsequent changes in his address. Any notice required to be given
to a member or retiree hereunder shall be deemed given if directed
to him at the last such address given to the board and mailed by
registered or certified United States mail. If any check mailed by
registered or certified United States mail to such address is returned,
mailing of checks will be suspended until such time as the member
or retiree notifies the board of his address.
(6 10) Benefits not guaranteed. All benefits payable to a member from the
DROP shall be paid only from the assets of the member's DROP account
and neither the city nor the board shall have any duty or liability to furnish
the DROP with any funds, securities or other assets except to the extent
required by any applicable law.
(7 71) Construction.
a. The DROP shall be construed, regulated and administered under the
laws of Florida, except where other applicable law controls.
b. The titles and headings of the subsections in this section 2 -296 are
for convenience only. In the case of ambiguity or inconsistency, the
text rather than the titles or headings shall control.
For the purposes of this Ordinance, underlined type shall constitute additions to the original text, ' ' ' shall constitute ellipses to the original text and striket}aongh shall
constitute deletions to the original text.
16
(8 12) Forfeiture of retirement benefits. Nothing in this section shall be construed
to remove DROP participants from the application of any forfeiture
provisions applicable to the system. DROP participants shall be subject to
forfeiture of all retirement benefits, including DROP benefits.
(J 13) Effect of DROP participation on employment. Participation in the DROP
is not a guarantee of employment and DROP participants shall be subject
to the same employment standards and policies that are applicable to
employees who are not DROP participants.
Section 12. Firefighters= Retirement System. Chapter 66, Article III, Code of
Ordinances of the City of Sanford, is hereby amended to read as follows by deleting
current Section 66 -87, Conviction and Forfeiture; False, Misleading or Fraudulent
Statements:
Ey
Section 13 Savings. The prior actions of the City of Sanford relating to the
administration of the firefighters= retirement system and related matters are hereby
ratified and affirmed.
Section 14 Conflicts. All Ordinances or parts of Ordinances in conflict with this
Ordinance are hereby repealed.
Section 15 Severability. If any section, sentence, phrase, word, or portion of
this ordinance is determined to be invalid, unlawful or unconstitutional, said determination
shall not be held to invalidate or impair the validity, force or effect of any other section,
sentence, phrase, word, or portion of this Ordinance not otherwise determined to be
invalid, unlawful, or unconstitutional.
For the purposes of this Ordinance, underlined type shall constitute additions to the original text. ' ' ' shall constitute ellipses to the original text and stActi iougk shall
constitute deletions to the original text.
17
N-0
1 -
:
• . • : - - - :
- : - :
: - -
- - -
- - -
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- rim
M -
: :
: : : •
• :
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Section 13 Savings. The prior actions of the City of Sanford relating to the
administration of the firefighters= retirement system and related matters are hereby
ratified and affirmed.
Section 14 Conflicts. All Ordinances or parts of Ordinances in conflict with this
Ordinance are hereby repealed.
Section 15 Severability. If any section, sentence, phrase, word, or portion of
this ordinance is determined to be invalid, unlawful or unconstitutional, said determination
shall not be held to invalidate or impair the validity, force or effect of any other section,
sentence, phrase, word, or portion of this Ordinance not otherwise determined to be
invalid, unlawful, or unconstitutional.
For the purposes of this Ordinance, underlined type shall constitute additions to the original text. ' ' ' shall constitute ellipses to the original text and stActi iougk shall
constitute deletions to the original text.
17
Section 16. Codification. Sections 2 -13 of this Ordinance shall become and be
made a part of the Code of Ordinances of the City of Sanford, Florida.
Section 17. Effective Date. This Ordinance shall become effective immediately
upon enactment by the City Commission.
Passed and Adopted this 27th day of June, A.D. 2016.
Attest: City Commission o�lthe Cir of Sanford,
Florida ,iJ
Q'zf�' '- " ►
Cynt 'a Porter, City Clerk Jeff Trip
Approved as to form and legal sufficiency:
W Liam L. Colbert, City Attorney
For the purposes of this Ordinance, underlined type shall constitute additions to the original text, ' ' ' shall constitute ellipses to the original text and st7ikethroagh shall
constitute deletions to the original text.
18
' WS RM X
'E 1877- Item No. _ • �
CITY COMMISSION MEMORANDUM 16.217
JUNE 27, 2016 AGENDA
To: Honorable Mayor and Members of the City Commission
PREPARED BY: Cynthia Porter, City Clerk
Cynthia Lindsay, Director of Finance
SUBMITTED BY: Norton N. Bonaparte, Jr., City Man ger
SUBJECT: City of Sanford Firefighters Retirement ystem Proposed Ordinance
STRATEGIC PRIORITIES:
❑ Unify Downtown & the Waterfront
❑ Promote the City's Distinct Culture
❑ Update Regulatory Framework
❑ Redevelop and Revitalize Disadvantaged Communities
SYNOPSIS:
Ordinance No. 2016 -4382, amending City Code, Sections 66 -71, 66 -74, 66 -76, 66 -77, 66 -84, 66 -86,
and 66 -87 of the Firefighters Retirement System, is being submitted for second reading and
adoption.
F'ISCALISTAFFING STATEMENT:
The Fire Pension Board's actuary, Foster & Foster, Inc., advised that there is no cost associated with
the adoption of this ordinance.
BACKGROUND:
At the May 5, 2016 Firefighters Pension Board meeting, the Board unanimously recommended
amending the following sections of the Firefighters Retirement System in accordance with recent
changes to the Internal Revenue Code (IRC) relating to tax qualified pension plans such as this plan
and for language clarity.
• Section 66 -71, Definitions, is being amended for IRC changes and requirements.
• Section 66 -74, Finances and Fund Management, is being amended to further incorporate
recent IRC requirements with regard to investments in commingled funds.
• Section 66 -76, Benefit Amounts and Eligibility, subsection (a), Normal Retirement, is being
amended to change the Normal Retirement Date to include IRC required language regarding
Normal Retirement Age and Normal Retirement Date.
• Section 66 -77, Benefits Amounts and Eligibility, subsection (c), Pre - Retirement Death,
subsection (c)(2)b., is being amended to remove unnecessary language.
Section 66 -76, Benefits Amounts and Eligibility, subsection (d), Disability, is being
amended to more clearly identify those individuals who may be eligible to apply for a
disability pension who have been terminated by the City due to medical reasons. Subsection
(7), Workers' Compensation, is also being amended to clearly identify the new minimum
benefit accrual rate of 2.75 %, as provided for in Chapter 175, Florida Statutes.
• Section 66 -76, Benefit Amounts and Eligibility, subsection (f), Maximum Pension, has had
several subsections amended to comply with IRC changes.
Section 66 -76, Benefit Amounts and Eligibility, subsection (g), Minimum Distribution of
Benefits, is being amended for a reference clarification in subsection (g)(2)b.4.
• Section 66 -77, Optional Form of Benefits, has been amended to:
o Amend the optional form of benefit known as a partial lump sum option (PLOP), to
clarify that the percentage chosen is calculated as a percent of the total actuarial
equivalent value of the member's benefit.
o Amend subsection (2) to clarify that if proof of good health of a joint pensioner who
is being replaced is not provided, the actuary will assume that the joint pensioner is
deceased for purposes of calculating the revised benefit amount.
• Section 66 -84, Prior Fire Service, subsection (6), is being amended to correct a reference.
Section 66 -86, Deferred Retirement Option Plan (DROP), is being amended in accordance
with recent direction from the IRS in connection with the issuance of several recent
Favorable Determination Letters to clarify investment returns on DROP accounts and add
several sections clarifying the DROP provisions as required by the IRS.
• Section 66 -87, Conviction and Forfeiture; False, Misleading and Fraudulent Statements, is
being deleted in its entirety as it is a duplicate of the same language which is already in place
in Section 66- 76(i).
The City Commission approved the first reading of Ordinance No. 2016 -4382 on June 13, 2016.
The City Clerk published notice of the public hearing in the Sanford Herald on June 12, 2016.
LEGAL REVIEW:
The ordinance has been prepared by the Firefighters Pension Board attorney.
RECOMMENDATION:
The Firefighters Pension Board recommends that the City Commission adopt the ordinance.
SUGGESTED MOTION:
"I move to adopt Ordinance No. 2016- 4382."
Attachments: Cover letter from the Law Offices of Christiansen & Dehner, P.A.
Actuarial Impact Letter from Foster & Foster Actuaries
Ordinance No. 2016 -4382
Law Offices
Christiansen & Lehner, P.A.
63 Sarasota Center Blvd. Suite 107 Sarasota, Florida 34240 . 941.377 -2200 • Fax 941. 377 -4848
May 16, 2016
Mr. Norton N. Bonaparte Jr.
City Manager
City of Sanford
Post Office Box 1788
Sanford, Florida 32772 -1788
Re: City of Sanford Firefighters' Retirement System - Proposed Ordinance
Dear Mr. Bonaparte
As you know, I represent the Board of 'Trustees of the City of Sanford Firefighters'
Retirement System. Enclosed please find a proposed ordinance amending the City of Sanford
Firefighters' Retirement System which is recommended by the Board for adoption by the City
Commission. With the recent adoption by the Florida Legislature of Chapter 2015 -39, Laws of
Florida, and changes to the Internal Revenue Code (IRC) and its associated Regulations, as well as
guidance from the Internal Revenue Service (IRS), the following amendments to the pension plan
are proposed:
1. Section 66 -71, Definitions, is being amended for IRC changes and requirements, to
amend the definitions of
a. Accumulated Contributions is being amended to correct a section reference
b. Actuarial Equivalent - to amend the definition to incorporate the Mortality
Table and interest rate currently being used by the plan's actuary
C. Credited Service - to clarify IRC regulations on leave conversions
d. Effective Date - to clearly state the effective date of the plan
e. Firefighter - to update a refcretncc in Florida Statutes.
f. Gross Pay - is being removed as this tenn in no longer a defined tenn in the
plan
g. Spouse - To clarify the definition in accordance with a recent US Supreme
Court ruling
Section 66 -74, Finances and Fund Management, is being amended to further
incorporate recent IRC requirements with regard to investments in commingled
funds.
Mr. Norton N. Bonaparte Jr.
May 16, 2016
Page 2
3. Section 66 -76, Benefit Amounts and Eligibility, subsection (a), Normal Retirement,
is being amended to change the Normal Retirement Date to include IRC required
language regarding Normal Retirement Age and Normal Retirement Date.
4. Section 66 -76, Benefit Amounts and Eligibility, subsection (c), Pre - Retirement
Death, subsection (c)(2)b., is being amended to remove unnecessary language.
5. Section 66 -76, Benefit Amounts and Eligibility, subsection (d), Disability, is being
amended to more clearly identify those individuals who may be eligible to apply for
a disability pension who have been terminated by the City due to medical reasons.
Subsection (7), Workers' Compensation, is also being amended to clearly identify the
new minimum benefit accrual rate of 2.75 %, as provided for in Chapter 175, Florida
Statutes.
6. Section 66 -76, Benefit Amounts and Eligibility, subsection (f), Maximum Pension,
has had several subsections amended to comply with IRC changes.
7. Section 66 -76, Benefit Amounts and Eligibility, subsection (g), Minimum
Distribution of Benefits, is being amended for a reference clarification in subsection
(g)(2)b.4.
8. Section 66 -77, Optional Forms of Benefits, has been amended to:
a. Amend the optional form of benefit known as a partial lump sum option
(PLOP), to clarify that the percentage chosen is calculated as a percent of the
total actuarial equivalent value of the member's benefit.
b. Amend subsection (2) to clarify that if proof of good health of a joint
pensioner who is being replaced is not provided, the actuary will assume that
the joint pensioner is deceased for purposes of calculating the revised benefit
amount.
9. Section 66 -84, Prior Fire Service, subsection (6), is being amended to correct a
reference.
10. Section 66 -86, Deferred Retirement Option Plan, is being amended in accordance
with recent direction from the IRS in connection with the issuance of several recent
Favorable Determination Letters to clarify investment returns on DROP accounts and
add several sections clarifying the DROP provisions as required by the IRS.
11. Section 66 -87, Conviction and Forfeiture; False, Misleading or Fraudulent
Statements, is being deleted in its entirety as it is a duplicate of the same language
which is already in place in Section 66- 76(i).
Mr. Norton N. Bonaparte Jr.
May 16, 2016
Page 3
By copy of this letter to the Board's actuary, Foster & Foster. Inc., I am requesting that they
provide you with a letter indicating the cost, if any, associated with the adoption of this ordinance.
If you or any member of your staff have any questions with regard to this ordinance, please
feel free to give me a call. In addition, if you flecl it would be appropriate fior me to be present at the
meeting at which this ordinance is considered by the City Commission, please contact my office to
advise me of the date that the ordinance would be considered.
Yours ve llfra IV,
Scott R. Christiansen
SRC/drn
enclosure
cc: Patrick Donlan, with enclosure
Suss. Pita, with enclosure
FOSTER & FOSTER
May 31, 2016
Ms. Susy Pita
Sanford Firefighters' Retirement System
21629 Stirling Pass
Leesburg, FL 34748
Re: City of Sanford Firefighters' Retirement System
Dear Susy:
In response to Scott Christiansen's request dated May 16, 2016, we have reviewed the proposed
Ordinance (identified on page 17 as dm/san/fir /05- 13- 16.ord) including, but not limited to, the
following proposed changes:
1. Section 66 -71, Definitions, is being amended for IRC changes and requirements.
2. Section 66 -76, Benefit Amounts and Eligibility, subsection (a), Normal Retirement, is
being amended to change the Normal Retirement Date to include IRC required language
regarding Normal Retirement Age and Normal Retirement Date.
3. Section 66 -76, Benefit Amounts and Eligibility, subsection (d), Disability, is being
amended to more clearly identify those individuals who may be eligible to apply for a
disability pension who have been terminated by the City due to medical reasons.
Subsection (7), Workers' Compensation, is also being amended to clearly identify the
new minimum benefit accrual rate of 2.75 %, as provided for in Chapter 175, Florida
Statutes.
4. Section 66 -76, Benefit Amounts and Eligibility, subsection (f), Maximum Pension, has
had several subsections amended to comply with IRC changes.
5. Section 66 -76, Benefit Amounts and Eligibility, subsection (g), Minimum Distribution of
Benefits, is being amended for a reference clarification in subsection (g)(2)b.4.
6. Section 66 -77, Optional Forms of Benefits, has been amended to:
a. Amend the optional form of benefit known as a partial lump sum option (PLOP),
to clarify that the percentage chosen is calculated as a percent of the total actuarial
equivalent value of the member's benefit.
b. Amend subsection (2) to clarify that if proof of good health of a joint pensioner
who is being replaced is not provided, the actuary will assume that the joint
pensioner is deceased for purposes of calculating the revised benefit amount.
13420 Parker Commons Blvd., Suite 104 Fort Myers, FL 33912 • (239) 433 -5500 - Fax (239) 481 -0634 - www,foster- foster.com
Ms. Susy Pita
May 31, 2016
Page 2
7. Section 66 -86, Deferred Retirement Option Plan, is being amended in accordance with
recent direction from the IRS in connection with the issuance of several recent Favorable
Determination Letters to clarify investment returns on DROP accounts and add several
sections clarifying the DROP provisions as required by the IRS.
We have determined that its adoption will have no impact on the assumptions used in
determining the funding requirements to the program. Because the changes do not result in a
change in the valuation results, it is our opinion that a formal Actuarial Impact Statement is not
required in support of its adoption. However, since the Division of Retirement must be aware of
the current provisions of all public pension programs, it is recommended that you send a copy of
this letter and a copy of the fully executed Ordinance to each of the following offices:
Mr. Keith Brinkman
Bureau of Local Retirement Systems
Division of Retirement
P.O. Box 9000
Tallahassee, FL 32315 -9000
Ms. Sarah Carr
Municipal Police and Fire
Pension Trust Funds
Division of Retirement
P.O. Box 3010
Tallahassee, FL 32315 -3010
The undersigned is familiar with the immediate and long -term aspects of pension valuations, and
meets the Qualification Standards of the American Academy of Actuaries necessary to render the
actuarial opinions contained herein. All of the sections of this report are considered an integral
part of the actuarial opinions.
If you have any questions, please let me know.
Sincerely,
Patrick T. Donlan, ASA, EA, MAAA
cc: Scott R. Christiansen, Board Attorney