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3965ORDINANCE NO. 3965 AN ORDINANCE OF THE CITY OF SANFORD, FLORIDA, AMENDING CHAPTER 2, ADMINISTRATION, ARTICLE XVI, FIREFIGHTERS' RETIREMENT SYSTEM; AMENDING SECTION 2-281, DEFINITIONS, BY AMENDING THE DEFINITION OF "BASE PAY"; AMENDING SECTION 2-286, BENEFIT AMOUNTS AND ELIGIBILITY; AMENDING SECTION 2-287, OPTIONAL FORMS OF BENEFITS; ADDING SECTION 2-296, DEFERRED RETIREMENT OPTION PLAN; PROVIDING FOR SEVERABILITY OF PROVISIONS; PROVIDING FOR CODIFICATION; REPEALING ALL ORDINANCES IN CONFLICT HEREWITH AND PROVIDING AN EFFECTIVE DATE. BE IT ENACTED BY THE PEOPLE OF THE CITY OF SANFORD, FLORIDA: SECTION 1: That Chapter 2, Administration, Article XVI of the City Code of the City of Sanford entitled Firefighters' Retirement System, is hereby amended by amending Section 2-281, Definitions, by amending the definition of Base pay, to read as follows: Basepay means the pay for the grade and step in the salary classification pay plan in the city for the given fiscal year, including all tax deferred, tax sheltered or tax exempt items of income derived from elective employee payroll deductions or salary reductions and otherwise includible in base pay. Base pay shall also include "Education Incentive" as well as "Paramedic Incentive" paid to firefighters who are certified as paramedics. Compensation in excess of the limitations set forth in Section 401(a)(17) of the Code shall be disregarded. The limitation on compensation for an "eligible employee" shall not be less than the amount which was allowed to be taken into account hereunder as in effect on July 1, 1993. "Eligible employee" is an individual who was a member before the first plan year beginning after December 31, 1995. SECTION 2: That Chapter 2, Administration, Article XVI of the City Code of the City of Sanford entitled Firefighters' Retirement System, is hereby amended by amending Section 2-286, Benefit amounts and eligibility, subsection (e), Vesting, to read as follows: Ordinance No. 3965 Page 1 (e) Vesting. Ifa member terminates his employment as a firefighter, either voluntarily or by discharge, and is not eligible for any other benefits under this system, the member shall be entitled to the following: (1) If the member has less than ten (10) years credited service upon termination, the member shall be entitled to a refund of his accumulated contributions, or the member may leave it deposited with the fund. (2) If the terminated member has ten (10) or more years of credited service upon termination, the member shall be entitled to a monthly retirement benefit, determined in the same manner as for normal or early retirement and based upon the member's credited service, average final compensation and the benefit accrual rate as of the date of termination, payable to him commencing at member's otherwise normal or early retirement date, determined as if he had remained employed, provided he does not elect to withdraw his accumulated contributions, and provided member survives to his otherwise early or normal retirement date. If the member does not withdraw his accumulated contributions and does not survive to his otherwise normal or early retirement date, his designated beneficiary shall be entitled to a benefit as provided herein for a deceased member, vested or eligible for retirement under Pre-retirement death. (3) In the event a member elects to receive his accumulated contributions in lieu of any benefits hereunder, he shall also receive an additional lump-sum amount equal to five (5) percent of the member's base pay for all years of credited service between October 1, 1976 and June 30, 1998. SECTION 3: That Chapter 2, Administration, Article XVI of the City Code of the City of Sanford entitled Firefighters' Retirement System, is hereby amended by amending Section 2-287, Optional forms of benefits, subsection (2), to read as follows: (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, Ordinance No. 3965 Page 2 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 (1) or more primaw 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). SECTION 4: That Chapter 2, Administration, Article XVI of the City Code of the City of Sanford entitled Firefighters' Retirement System, is hereby amended by adding Section 2-296, Deferred retirement option plan, to read as follows: Sec. 2-296. Deferred retirement option plan. (a) Definitions. As used in this section 2-296, the following definitions apply: (1) "DROP"'-TheCityofCityofSanfordFirefightersDeferredRetirementOptionPlan. (2) "DROP account" -- The account established for each DROP participant under subsection (c). (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 fifteen (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 Ordinance No. 3965 Page 3 (4) (5) 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. 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. 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 additional benefits provided under any cost-of-living adjustment for retirees in the system) while he is a participant in the DROP. A~er 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 2-295, Reemployment al~er retirement. Ordinance No. 3965 Page 4 (c) (1) (2) 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. Funding. 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. Transfers.from retirement system. 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. Except as otherwise provided in subsection (b)(4)b., a member's DROP account under this subsection (c)(2) shall be debited or credited at~er each fiscal year quarter with earnings, determined as follows: 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 Ordinance No. 3965 Page 5 (d) O) 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. 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 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 2-295. Distribution of DROP accounts on termination of employment. 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 fireflghter. Except as provided in subsection (d)(4), no amounts Ordinance No. 3965 Page 6 (2) (3) shah be paid to a member from the DROP prior to his termination of employment as a fireflghter. 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)(7). A member may elect, however, in such time and manner as the board shall prescribe, that his DROP distribution be used to purchase a nonforfeitable fixed annuity payable in such form as the member may elect. Elections under this paragraph shall be in writing and shall be made in such time or manner as the board shall determine. If the annuity form selected is not a qualified joint and 50 percent survivor annuity with the member's spouse as the beneficiary, the annuity payable to the member and thereafter to his beneficiary shall be subject to the incidental death benefit rule as described in Section 40 l(a)(9)(G) of the Code and its applicable regulations. b. Ifa 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. Date of lmyment of distribution. a. Except as otherwise provided in this subsection (d), distribution ora member's DROP account shall be made as soon as administratively practicable following the member's termination of employment. In lieu ora distribution as described in paragraph a. above, a member may, in accordance with such procedures as the board shall prescribe, elect to have the distribution of his DROP account made as of the first day of any month coincident with or following his termination of employment as a firefighter; provided, however, payments shall be made before the distribution date Ordinance No. 3965 Page 7 elected by the member to the extent necessary to comply with the provisions of subsections (d)(4) and (d)(6). (4) Age 70-1/2 required distribution. In no event shall the provisions of subsection (d) operate so as to allow the distribution of a member's DROP account to be later than the April 1 following the later of the calendar year in which he terminates his employment as a firefighter or he attains age seventy and one-half (70-1/2). In the event a member is required to receive payment while in service under the provisions of this subsection (4), he shall receive one lump sum payment on or before his required beginning date equal to his entire DROP account balance and annual lump sum payments thereafter of amounts credited to his DROP account during each calendar year. Upon the member's subsequent termination of employment, payment of his DROP account shall be made in accordance with the provisions of subsection (d)(2). (5) 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. (6) Distribution limitation. Notwithstanding any other provision of subsection (d), all distributions from the DROP shall conform to the regulations issued under Section 401(a)(9) of the Code, including the incidental death benefit provisions of Section 401(a)(9)(G) of the Code. Further, such regulations shall override any DROP provision that is inconsistent with Section 401 (a)(9) of the Code. (7) Direct rollover of certain distributions. This subsection applies to distributions made on or al~er 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. Ordinance No. 3965 Page 8 (e) ,~clministration of DROP. (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 Ordinance No. 3965 Page 9 DROP (including but not limited to determination of an individual's eligibility for DROP participation, the fight 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 suffered in such reliance shall be conclusive upon any person with any interest in the DROP. ( f) General provisions. (1) ,4mendmentofDROP. The DROP may be amended by an ordinance ofthe 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 pan 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. Ordinance No. 3965 Page 10 (2) Facility of payment. 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) 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) 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 (3) years from the date such payment is due, mail a notice of 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 (3) months of the date of the mailing, the board may, if it so elects and upon receiving advice fi'om 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) 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 Ordinance No. 3965 Page 11 (6) (7) (8) 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 ora 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. 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. 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 ambignity or inconsistency, the text rather than the titles or headings shall control. 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. Ordinance No. 3965 Page 12 (9) 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 5: All Ordinances or parts of Ordinances in conflict herewith be and the same are hereby repealed. SECTION 6: Specific authority is hereby granted to codify and incorporate this Ordinance in the existing Code of Ordinances of the City of Sanford. SECTION 7: If any section, subsection, sentence, clause, phrase of this ordinance, or the particular application thereof shall be held invalid by any court, administrative agency, or other body with appropriate jurisdiction, the remaining section, subsection, sentences, clauses, or phrases under application shall not be affected thereby. SECTION 8: That this Ordinance shall become effective upon adoption. PASSED AND ADOPTED this 12th day of December, A.D. 2005. CITY COMMISSION OF THE CITY OF SANFORD, FLORIDA A I UI N, MAYO[ ATTEST: OUGHERTY{,/CITY CLI/RK CERTIFICATE I, Janet R. Dougherty, City Clerk of the City of Sanford, Florida, do hereby certify that a true and correct copy of the foregoing Ordinance No. 3965, PASSED AND ADOPTED by the City Ordinance No. 3965 Page 13 Commission of the City of Sanford, Florida, on the 12th day of December, 2005, was posted at the front door of the City Hall in the City of Sanford, Florida, on the 14th day of December, 2005. As tl~ ¢'ty Clerk of the Cilt~r'of Sanfg~d, Florida Ordinance No. 3965 Page 14