4590 Amend Fire Fighters' Pension Section 66-76Ordinance No. 2021-4590
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
66-76, BENEFIT AMOUNTS AND ELIGIBILITY, SUBSECTION (G),
MINIMUM DISTRIBUTION OF BENEFITS, TO PROVIDE FOR
COMPLIANCE WITH THE SECURE ACT; 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.
WHEREAS, the Setting Every Community Up for Retirement Enhancement
("SECURE") Act, signed into law on December 20, 2019, amended the definition of
"Required Beginning Date" under Section 401(a)(9) of the Internal Revenue Code; and
WHEREAS, amendments to the Plan are necessary to conform the Retirement
System to the requirements of the SECURE Act; and
WHEREAS, the Board of Trustees of the City of Sanford Firefighters' Retirement
System has recommended an amendment to the Retirement System to comply with the
SECURE Act; and
WHEREAS, the trustees of the City of Sanford Firefighters' Retirement System
have requested and approved the amendments provided herein as being in the best
interests of the participants and beneficiaries and improving the administration of the
Fund, and
WHEREAS, the City Commission has received and reviewed an actuarial impact
statement related to this change and attached as such; and
1
For the purposes of this Ordinance, underlined type shall constitute additions to the original text, * * * shall
constitute ellipses to the original text and strikethrough shall constitute deletions to the original text.
WHEREAS, the City Commission deems it to be in the public interest to provide
this change to the Retirement System for its Firefighters;
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 111, Code of
Ordinances of the City of Sanford, s hereby amended to read as follows by amending
Section 66-76, Benefit amounts and eligibility, subsection (g), Minimum distribution of
benefits, sub -subsection (2), Time and manner of distribution, as follows:
66-76. — Benefit amounts and eligibility.
(g) Minimum distribution of benefits.
(2) Time and manner of distribution.
a. Required beginning date. The member's entire interest
will be distributed, or begin to be distributed, to the
member no later than:
1 With regard to distributions required to be made
to a member who reaches age 70 1/2 before
Janua[y 1, 2020: RG later thaR the MembeF's
FequiFed begiRlIiR h shall Rot be late
2
For the purposes of this Ordinance, underlined type shall constitute additions to the original text, * * * shall
constitute ellipses to the original text and st; ikethi ough shall constitute deletions to the original text.
#kan April 1 of the calendar year following the
later of the calendar year in which the member
attains age seventy and one-half (70'2);. or April
1 of the calendar year in which the member
terminates employment with the district,
whichever is later.
2. With regard to distributions required to be made
on or after January 1, 2020 to a participant who
reaches the age of 70 '2 on or after said date:
April 1 of the calendar year that next follows the
calendar year in which the participant attains or
will attain the age of 72 years, or April 1 of the
calendar year that next follows the calendar
year in which the participant retires, whichever
is later.
Section 3. 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 4. Conflicts. All Ordinances or parts of Ordinances in conflict with this
Ordinance are hereby repealed.
Section 6. 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.
Section 6. Codification. Section 2 of this Ordinance shall become and be
made a part of the Code of Ordinances of the City of Sanford, Florida.
3
For the purposes of this Ordinance, underlined type shall constitute additions to the original text, * * * shall
constitute ellipses to the original text and str lke shall constitute deletions to the original text.
Section 7. Effective Date. This Ordinance shall become effective upon
passage; however, the provisions of this Ordinance that are specified to take effect as of
a date certain shall take effect as of the date specified herein.
Passed and Adopted this 8th day of February, A.D. 2021.
Attest:
&M i cbx I
Traci Houchin, City Clerk
City Commission of the City of
Sanford, Florida
Ilk"
Nl�
, iw-
Approved as to form and legal sufficiency:
William L. Colbert, City Attorney
IH
, iviayor
For the purposes of this Ordinance, underlined type shall constitute additions to the original text, * * * shall
constitute ellipses to the original text and strikethrough shall constitute deletions to the original text.
Robert A. Sugarman♦
Howard S. Susskind
Kenneth R. Harrison, Sr.
D. Marcus Braswell, Jr.
Pedro A. Herrera
David Robinson
Ivelisse Beno LeBeau
+Board Certified Labor
& Employment Lawyer
SUGARMAN & SUSSKIND
PROFESSIONAL ASSOCIATION
ATTORNEYS AT LAW
R
,4 , 02 XIQ YA I ulh-kl 4 ZOI
January 2020
SECURE ACT
and
100 Miracle Mile
Suite 300
Coral Gables, Florida 33134
(305) 529-2801
Toll Free (800) 329-2122
Facsimile (305) 447-8115
ANNUAL LIMITS UNDER THE INTERNAL REVENUE CODE
SECURE ACT
On December 20, 2019, President Trump signed into law an appropriations bill that contained
several amendments to the Internal Revenue Code, including some that were presented in a bill
entitled the SECURE ("Setting Every Community Up for Retirement Enhancement") Act.
While many of the amendments contained in the law do not affect governmental plans such as
yours, certain changes would require Board action.
SOME PARTICIPANTS CAN DEFER TAXES ON THEIR ACCRUED BENEFITS JUST A LITTLE BIT LONGER:
The most significant of the amendments that affect our governmental plan is the increase in age
at which Required Minimum Distributions ("RIVIDs") must begin.
Contained in Section 401(a)(9) of the Internal Revenue Code, the Required Minimum Distribution
rules limit the tax deferral of retirement benefits, by requiring that qualified plans begin to pay
benefits to participants (and thus that the participant begin to pay taxes on the benefits) by a
certain age. Prior to the Secure Act, that age was the later of 70 1/2 or the age at which the
participant retires. The Secure Act amended Section 401(a)(9) of the Internal Revenue Code by
raising the age at which benefits must commence to 72 (or the age at which the participant retires,
whichever is later).
The change is effective with respect to participants who reach the age of 70'/2 on or after January
1, 2020. Participants affected by the change will thus be able to defer taxes on their accrued
benefit just a little bit longer.
We will review your plan document to determine whether an amendment to the plan bsnecessary
toprovide for the increased RK8[Jage.
PARTICIPANTS CAN RECEIVE WORKING RETIREMENT BENEF[Ts EARLIER:
As a general rule, qualified plans must provide for the payment ufbenefits after retirement. []Ode[
certain conditions, however, qualified plans may allow participants to begin to receive benefits
even before the person has stopped working for the employer that sponsors the plan. This is
commonly referred toason "in-service distribution." Section 4O1(s)/3G\ of the Internal Revenue
Code provides one such exception tuthe general rule.
Prior tothe Secure Aot, plans were permitted to begin to pay benefits to a participant who was
still working for the employer that sponsored the plan once the participant reached the age of 62.
The Secure Act amended Section 4O1(a)(36)bylowering that age to 59 1/2. That means that a
plan may provide that o participant who is still working for the employer that sponsors the plan
may begin to receive benefits under the plan once the participant reaches the age of 59 1/2.
Qualified plans are still permitted to make payments to participants who are even younger than
59 Y2 and who are adU working for the plan aponoor, but additional conditions must be satisfied.
Hrst, the participant must have reached the plan's normal retirement age. Seoond, the plan's
normal retirement age must not beunreasonably young. |nother words, the normal retirement
age must reasonably represent the age at which employees in the relevant industry retire. On
January 27. 2016. the |F{S promulgated proposed regulations with safe harbor guidelines to help
governmental plans establish areasonable normal retirement age.
VVewill review your plan document todetermine whether aDamendment to the plan isnecessary
and discuss any possible ramifications with the Board.
MISCELLANEOUS CHANGEs THAT Do NOT DIRECTLY IMPACT GOVERNMENTAL DEFINED BENEFIT
PLANS SUCH As YOURS:
° -457 Plan Distributions
Also of interest to governmental employees—though not of direct impact on this plan—is
the lowering of the age at which employees may access their 457 plans unconditionally.
Under the new law, 457account balances may be made available to the participant in the
calendar year in which the participant attains age 59 1/2. Prior to the onnendmnent, the
minimum age was 7O 1/2
° Removal of 70 Y2age limit on contributions to IRAs
Prior tothe new |axv. contributions botraditional IRAs were no longer permitted beyond the
age of 70 Y2. Under the Act, employees may continue to contribute to an IRA as long as
they are working.
w Change in rules to Inherited IRAs
An individual who inherits an |R/\ (unless the individual inheriting the IRA is the spouse,
minor child or disabled beneficiary of the original owner, or is less than ten years younger
than the original IRA owner) must withdraw the assets mfthe IRA within ten years following
the date ofdeath ofthe original IRA owner.
P)
* Qualified Birth VrAdoption Distribution
Participants in defined contribution plans are permitted to withdraw up to $5.000 in
connection with the birth or adoption of a child.
ANNUAL INTERNAL REVENUE CODE LIMITS
Each year the Internal Revenue Service determines certain benefit and compensation limits
applicable to qualified plans. For 2020, the limits are as follows:
• The contribution limit for employees participating in 401(k). 457 and 4038d plans
increases from $19,000 to $19.500. By contrast, the limit on annual IRA contributions
remains unchanged at $6,000. Lihevviaa, the additional catch-up contribution limit for
individuals aged 5Oand over |s also unchanged at $1'000.
* The limitation on the annual benefit under a defined benefit (DB) plan under § 415(b)(1)(A)
increases from $225.00Oto$23O.00O.
m The annual ConlpeDSadiOO limit under §§ 401(a)/17l. 404U\. 408/k\/3\(C).
ond4O8(k)(8)(D)Ui\increases from $2DO.00Oto$285.OD.
* The limitation for defined contribution ([)C) plans under §415(c)(1)A\) increases from
$58.000to$57.000.
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WS RM
CITY OF Item No.
-j
SjkNFORD
FLORIDA
CITY COMMISSION MEMORANDUM 21.043
FEBRUARY 8, 2021 AGENDA
To: Honorable Mayor and Members of the City Commission
PREPARED BY: Cynthia Lindsay, Finance Director
'r
SUBMITTED BY: Norton N. Bonaparte, Jr., City Manag r
SUBJECT: City of Sanford Fire Fighters' Retire nt System Proposed Ordinance
STRATEGIC PRIORITIES:
F-1 Unify Downtown & the Waterfront
❑ Promote the City's Distinct Culture
❑ Update Regulatory Framework
F] Redevelop and Revitalize Disadvantaged Communities
SYNOPSIS:
An ordinance has been prepared amending Section 66-76 of the Fire Fighters' Retirement System
for the City Commission's consideration.
FISCAL/STAFFING STATEMENT:
The Fire Pension Board's actuary, Foster & Foster, Inc., advised that there is a cost of approximately
.1 % of payroll or $3,700 per year.
I
At the November 5, 2020 Fire Fighters' Pension Board meeting, the board unanimously
recommended amending the following section of the Fire Fighters' Retirement System to comply
with changes per the "SECURE" Act.
1) Section 66-76, Benefit amounts and eligibility, subsection (g) Minimum distribution of
benefits, is being amended to change the minimum required distribution age from 70 V2
to 72 as requires per the "SECURE" Act.
LEGAL REVIEW:
The ordinance has been prepared by the Fire Fighters' Pension Board attorney.
The City Commission approved the first reading of Ordinance No. 4590 on January 25, 2021.
The City Clerk published notice of the 2nd Public Hearing in the Sanford Herald on February 7, 2021.
RECOMMENDATION:
The Fire Fighters' Pension Board recommends the City Commission adopt Ordinance No. 4590.
SUGGESTED MOTION:
"I move to adopt Ordinance No. 4590."
Attachments: Cover letter from the Law Offices of Sugarman & Susskind
Actuarial Impact Letter from Foster & Foster Actuaries
Ordinance No. 4590