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Home My WebLink AboutO-1984-030 1 ORDINANCE NO. 30-84 AN ORDINANCE OF THE CITY OF DANIA, FLORIDA AMENDING ORDINANCE NO. 268 ; DEFINING THE TERM "ACTUARIAL EQUIVALENCE" ; DELETING THE REQUIREMENT THAT 70 YEAR OLD EMPLOYEES RECEIVE AUTHORIZATION TO CONTINUE IN EMPLOYMENT; INCLUDING THE MAXIMUM BENEFIT LIMITATIONS OF INTERNAL REVENUE CODE SECTION 415; INCLUDING THE DISTRIBUTION RULES PROMULGATED BY THE 19£2 A14D 1984 FEDERAL TAX REFORM LAWS; PROVIDING FCR THE CITY' S PICKUP OF MEMBER CONTRIBUTIONS PURSUANT TO INTERNAL REVE14UE CODE SECTION 414(h )( 2) ; REPLEALING ALL ORDINANCES OR PARTS OF ORDINANCES AND ALL RESOLUTIONS OR PARTS OF RESOLUTIONS Ill CONFLICT HEREWITH; AND PROVIDING AN EFFECTIVE DATE. WHEREAS, it Dania the City of an a Amended Retirement Plan, enacted by Ordinance No. 268, provides City employees with certain retirement benefits, and WHEREAS, the City Commission is desirous of revising said Plan for purposes of complying with recent changes in federal and state laws and regulations. NOW THEREFORE, BE IT ORDAINED BY THE CITY COMMISSION OF THE CITY OF DANIA, FLORIDA: Section 1 . That Section 2 of Ordinance tlo. 268 be hereby amended by adding the following definition R to the end of such Section: R. Actuarial Equivalence or Actuarially Equivalent means that any benefit payable under the terms of this Plan in a form other than the normal form of benefit shall have the same actuarial present value on the date payment commences as the normal form of benefit. For purposes of establishing the actuarial present value of any form of payment, other than a lump sum distribution, all future payments shall be discounted for interest and mortality by using 70/ interest and the 1983 Group Annuity Mortality Table for Hales, with ages set ahead five years in the case of disability retirees. In the case of a lump sum distribution, the actuarial present value shall be determined on the basis of the saine mortality rates as just described and the Pension Benefit Guaranty Corporation 's interest rates for terminating single employer plans which rates are in effect (a) 90 days prior to the Member 's date of termination if distribution is i ,u � r i 1 q made within six months of such date of termination, or (b ) 90 days 1 prior to the distribution date if distribution is made later than six I months after the Menber 's date of termination. { I Section 2. That Section 4, subsection A2, of Ordinance No. 268 be hereby deleted. i Section 3. That Section 4 of Ordinance No. 268 be hereby amended by adding j the following subsection H to the end of such Section: H. Limitation on Benefits In no event may a Meirber 's annual benefit exceed the lesser of: 1 . 590,000 (adjusted for cost of living in accordance with Internal I Revenue Code ( IRC) Section 415(d ), but only for the year in which such adjustment is effective), or 2. 100% of the average annual compensation for the Member 's three highest paid consecutive years; however, benefits of up to $10,000 a year can be paid without regard to the 10000, limitation if the total retirement benefits payable to a Member under all defined benefit plans (as defined in IRC Section 414(j )) maintained by the City for the present and any prior year do not exceed $10,000 and the City has not at any time maintained a defined contribution plan (as defined in IRC Section 414( i )) in which the employee was a Member. If the Member has less than ten years of service with the City (as defined in IRC Section 415(b )( 5) and as modified by IRC Section 415(b )( 6)( D) ), the applicable limitation in paragraph 1. or paragraph 2, of this subsection shall be reduced by multiplying such limitation by a fraction, not to exceed one. The numerator of such fraction shall be the number of years, or part thereof, of service with the City; the denominator shall be ten years. For purposes of this subsection, the 11annual benefit" means a benefit payable annually in the form of a straight life annuity with no ancillary or incidental benefits and with no Member or rollover contributions. To the extent that ancillary benefits are provided, the limits set forth in paragraphs 1 . and 2. above will be reduced actuarially, using an interest rate assumption equal to the greater of 5% or the interest rate used in the most recent annual actuarial valuation, to reflect such ancillary benefits. L� l I IF { dIf distribution of retirement benefits begins before age 62, the dollar limitation as described in paragraph 1 . shall be reduced actuarially using an interest rate assumption equal to the greater of 5% or the interest rate used in the most recent annual actuarial i valuation; however, retirement benefits shall not be reduced below I $75.000 if payment of benefits begins at or after age 55 and not below the actuarial equivalent of $75,000 if payment of benefits begins before age 55• If retirement benefits begin after age 65, the i dollar limitation of paragraph 1 . shall be increased actuarially i using an interest assumption equal to the lesser of 5% or the i interest rate used in the most recent annual actuarial valuation. For purposes of this subsection, the "average annual compensation for a Member 's three highest paid consecutive years" shall mean the Member 's greatest aggregate compensation during the period of three consecutive years in which the individual was an active Member of the Plan. Section 4. That Section 4 of Ordinance No. 268 be hereby amended by adding I 9 the following subsection I to the end of such Section: i I . Distributions in Plan Years Beginning After December 31 , 1984. Commencing with the first Plan Year beginning after December 31 , °•J 1984, the entire interest of a Member shall either be distributed to him not later than April 1 of the calendar year in which he attains age 70 1/2 or the calendar year in which he retires, whichever is later. In the alternative, distribution shall commence no later than the above specified commencement date and be distributable over a period of time not exceeding the limitations hereinafter set forth: 1 . Distributions to a Member shall not extend beyond the life of the Member or the lives of the Member and his designated beneficiary, or over a period not extending beyond the life expectancy of the Member or the life expectancy of the Member and his designated Beneficiary. 2. If distribution has commenced to a Member, and such Member dies before receiving his entire interest, the remainder of such ti Interest shall be distributed over a period at least as rapidly as under the method of distribution in effect prior to such Member 's death (e.g. , remainder of period certain basis). y99 I j3. Any method of distribution selected and made in writing by a i Member prior to January 1 , 1984, and which is in compliance with i Plan provisions prior to said date, shall be permitted hereunder I even though not in accordance with the above provisions as i applied to plan years beginning after December 31 , 1983• I Section 5. That Section 8 of Ordinance No. 2'.8 be hereby amended by deleting subsection A4 and by substituting the following subsection A : 4. Duration. Contributions shall be deducted from said Earnings before the sane are paid until the Member has reached his actual retirement date or his termination date whichever occurs first. Member contributions shall be deposited in the Fund on at least a monthly basis. In the event that the City agrees to assume and pay Member contributions in lieu of direct contributions by the -, Member, such contributions shall accordingly be paid into the Plan in behalf of the Members. No fieirber subject to such agreement shall have the option of choosing to receive the contributed amounts directly instead of having them paid by the City directly to the Plan. All such contributions by the City shall be deemed and considered as part of the Merrber 's Accumulated Contributions and subject to all provisions of this Plan pertaining to Accumulated Contributions of Members. The intent of this language is to comply with Section 414(h )( 2) of the Internal Revenue Code. Section 6• That except as herein amended all other provisions of said Ordinance No. 268 shall remain in full force and effect. Section 7. That all ordinances or parts of ordinances and all resolutions or parts of resolutions in conflict herewith be and the same are hereby repealo d to the extent of such conflict. Section 8. That this ordinance shall be in force and take effect immediately upon its passage and adoption on final reading. J �_\ r� PASSED AND ADOPTED on First Reading this llth day of December 1984. PASSED AND ADOPTED on Second and Final Reading thisllthday of December 1984. i MAYOR — COMMISSIO ER i ATTEST: CLERK — AUDITOR APPROVED FOR FORM AND CORRECTIVE14ESS: FRANK C. ADLER, City Attorney City of Dania, Florida a