HomeMy WebLinkAboutO-2011-009 IRS Compliance Amendment-General Employees ORDINANCE NO. 2011-009
AN ORDINANCE OF THE CITY OF DANIA BEACH, FLORIDA,
AMENDING PROVISIONS OF CHAPTER 18, "PENSIONS AND
RETIREMENT" OF THE CITY CODE OF ORDINANCES TO PROVIDE FOR
COMPLIANCE WITH THE UNITED STATES INTERNAL REVENUE CODE
AS IT AFFECTS PROVISIONS APPLICABLE TO THE GENERAL
EMPLOYEES' RETIREMENT SYSTEM; PROVIDING FOR SEVERABILITY;
PROVIDING FOR CONFLICTS; FURTHER, PROVIDING FOR AN
EFFECTIVE DATE.
WHEREAS, recent changes to federal laws and regulations require that various
amendments be made to the General Employees' Retirement Plan (the "Plan") in order to
jmaintain its status as a qualified plan under Section 401(a) of the Internal Revenue Code; and
WHEREAS, amendments to the City Code of Ordinances are necessary to comply with
the federal changes; and
WHEREAS, the trustees of the City of Dania Beach General Employees' Retirement
Plan have requested and approved such amendments as being in the best interests of the
participants and beneficiaries as well as improving the administration of the Plan; and
WHEREAS, the City Commission has received, reviewed and considered an actuarial
impact statement describing the actual impact of the amendments;
NOW THEREFORE, BE IT ORDAINED BY THE CITY COMMISSION OF THE
CITY OF DANIA BEACH,FLORIDA:
Section 1. That Sec. 18-290) of the City Code of Ordinances is amended to read as
follows:
Sec. 18-29. Definitions.
0) Earnings means a member's basic rate of pay from the city, exclusive of
all overtime pay, bonuses, travel or expense allowances and any other
extraordinary compensation. Earnings shall include a member's longevity pay.
Sec. 18-29. Definitions.
(j) Earnings means a member's basic rate of pay from the city, exclusive of
all overtime pay, bonuses, travel or expense allowances and any other
extraordinary compensation. Earnings shall include a member's longevity pay.
This provision shall not apply to any member whose employment termination
date precedes April 8, 1986. For the purpose of applying the limitations set forth
in Sections 401(a)(17) and 415 of the Internal Revenue Code, salary shall include
any elective deferral (as defined in Code Section 402(g)3) of the Internal
Revenue Code), and any amount which is contributed or deferred by the employer
at the election of the Member and which is not includible in the gross income of
the Member by reason of Section 125 or 457 of the Internal Revenue Code. For
limitation years beginning on and after January 1, 2001, for the purposes of
applying the limitations described in Section 18-29.14 hereof this Chapter,
Earnings paid or made available during such limitation wears shall include
elective amounts that are not includible in the gross income of the Member by
reason of Section 132(f)(4) of the Internal Revenue Code.
Section 2. Sec. 18-29.2(h) and (i) of the City Code of Ordinances are repealed in
their entirety and all following subsections renumbered/relettered accordingly:
Sec. 18-29.2. Retirement dates and benefits.
(h) Lifnita4iea E)a benefi— ... .-.e evei4-may a member's annual benefit ex
the lessor oP.
(1) TAT;„o+y +t,o„nnr,d dollars
«an nnn nn1 lnd;,,n+o.a for-
nnn+ „f l;vn-tl ;Y,
year-
;v, �,�h;nti, n„n�, n�;,,n+,v,ov,+ ;n v��on+;�Tol r,r
theye+ -7Td'GIZ"adj u-s CII efA i effi five�T
for-
the ember-'s-wee-(3) hi eeutive years; however-, benefits
Of
„n +e to thousand dePl Arn (Q 10 nnn nn) n „ear- nn� paid
, ;+, ,L+=
2 ORDINANCE#2011-009
regard to the ene hundred Pereent 0
) limitation if the total r-etir-efRefA
benefits payable to
u momVor lruor all rnfror .nrofi4 rlArc lnc dof;,ol ;r
a n 1 .r-esefA and an4, Y�r1Ar
a_v 1Vl_dh{�11 year do t1At eyceee ten thousand d-ollArc4 a 1 n'000.00)
nn nn\\ and the
;+y has
HAt
''it any t1YYln mA;r�4aine A defined nAr.4lrbttien plan (as defined
e fi e in TRG
a.aa. Nll Li11iV i11LL111LLL111\/ld Ll \.LV1111V1L VVIlI. �iC[� T
if the ffi.ember- has less than ten (10) years of ser-viee with the eity (as defined in
r-edueed by multiplying sueh limitation by a fr-aetion, not to eyceeed one. The
n»morntAr of
crue frnntie sha l be the number-
mb years, l.i1 Ar p thereof> c.Ar orc�;no
with the eity; the ate be tors (1 n) yonrn
For- puTeses of this subseetien, the "annual benefit" fneans a bienveafAit. payable
annually in the �� of a straight life annuity with no aneillar-y or- ineidef4al
benefits and wth no ember Ar rAlleyer�eent ibu i ns. To the extent that nnn;llnry
(5) per-eent or the ifAefest r-a4e used in the most reeent annual aetuarial valuation,
to roqon4 rnunh nnn;llnry bonof4c.
valuation;interest rate asstffnption equal to thea. g.rea.-at—er- of five (5) per-eent er-the interest r-
used in the most r-eeen4 annual aetuar-ial
sha4l not be r-edueed below sevefAy five thousand dollars however-, rretir-emea4 benefits
ef benefits begins at or- aflef age fifly five (55) and net below the aetu
• 7 e t A? seventy
eyee seye=��!$ /� nnn nn 1 ;T payme 4 At bAY1A��
3 ORDINANCE#2011-009
yeafs11 shall mean the 1
be—r-eft..LW f4an.
(i) Dis#ibtAiens in
plan
yeafs
begircr,ing after Deee Iber 21 1984. GewAne g
member- shall either- be distribtAed te him not later- than April I of the ealefida
— ...�. ffin year-b after-Deeember- 3 1� 1984, the entire interest ef-a
few.
mom,bor er the lives of the member-and
n his designator, b i
7
n period
erio net extending
beyond
the life exp,eetanGTorthe
member or t�o
,ifa ovr.nntnnny of the member-
and his
dosirtnntar, bonvfininrcr
(2) if distrib tAie has eemmeneed to member-,
and
n c.ueh member- dies
before r-eeeiving his entire in4er-est, the remainder- ef sueh interest sha4l
disc ibtAed eveperiod-at least as rapidly n'RsTC under- the method of
distfibtAien in elfreet.-jpri.er- te--such-member s death ., em ep-o=
periodnortnin bnsis>
d—ef—distribtAien seleeted—nnr, memo in iw1 n by
n
me
mbe
r pri„r to Tnnmnry ,> 1984, c:�and
in iinne with•nawith r,,nr
is pr-ier-te said date, shall be pefmitted hereunder- even theugh net
lanee with the above provisions
as
applied t
ran,iedt ` years begivgZIIIiStS`Tg
nfte f De ember-3 1983.
Section 3. Sec. 18-29.7 of the City Code of Ordinances is amended to read as
follows:
Sec. 18-29.7. Optional forms of benefit payments.
Each member entitled to a normal, early or delayed retirement benefit shall have
the right, at any time prior to the date on which benefit payments begin, to elect to
i
4 ORDINANCE#2011-009 j
I
have the benefit payable under any one of the options as hereinafter set forth in
lieu of the benefits otherwise provided herein, and to revoke any such elections
and make a new election at any time prior to the actual beginning of payments.
The value of optional benefits shall be actuarially equivalent to the value of
benefits otherwise payable, and the present value of payments to the retiring
member must be at least equal to fifty (50) percent of the total present value of
payments to the retiring member and his or her beneficiary. The member shall
make such an election by written request to the board, such request being retained
in the board's files.
Option I Joint and last survivor option: The member may elect to receive a
reduced benefit during his or her lifetime and having such benefit (or a designated
fraction thereof) continued after his or her death to and during the lifetime of his
or her designated beneficiary. The election of Option 1 shall be null and void if
the designated beneficiary dies before the member's benefit payments commence.
Option 2 Straight life annuity basis: The member may elect to receive his benefit
on a straight life annuity basis, with benefit payments ceasing upon the member's
death.
Option 3 Other: In lieu of the other optional forms enumerated in this section,
benefits may be paid in any form approved by the board so long as actuarial
equivalence with the benefits otherwise payable is maintained. An interest only
option or an option providing guaranteed payments over a period in excess of
twenty (20) years or beyond age eighty-five (85) may not be elected. The board,
in its sole discretion, may make a lump sum distribution of any monthly payment
with a present value not exceeding three thousand dollars ($3,000.00).
Option 4 Deferred retirement option plan: A member may enter into the deferred
retirement option plan (DROP) on the first day of any month following the date
upon which the member reaches normal retirement date or early retirement date.
A member will no longer be required to make contributions to the plan or, at the
member's option may be permitted to make reduced contributions to the plan, and
the member's retirement benefits will accrue to the member's benefit through a
separate fund administered by the board of trustees. Members electing to
5 ORDINANCE#2011-009
participate in the DROP plan whose contributions to the retirement system are
either discontinued or reduced shall receive a return of any contributions made
into the retirement system on their behalf after the commencement of their
participation in the DROP plan or, at the member's option, said contributions shall
be deposited into a separate fund administered by the board of trustees. The
DROP plan shall be administered by the board of trustees in such a way as to not
increase the city's contributions to the retirement system. Members electing to
enter the DROP plan after March 1, 2006, shall submit with their application to
i
enter the plan an irrevocable letter of resignation of employment to be effective
!, no later than five (5) years from the date of entry into the DROP. Termination of
employment may occur sooner but in no event later than the effective date of the
letter of resignation.
WTZbTLt ien c., if the naerp=,.,4 of
any
eligible rel l eve
d i stri btAi a as that terr.-� i s defined
i a in
seeti o 4 02( the inn n l
, �rr�v��rvi=—..,�T�(zi�l��xxv rrr�e��k�
Revenue Code,
457 ,
lump sum refunds of
member
+ieas, and lump sum r-etuffis ef mpmbe
5 ,
paid direetly to an eligible retirement plan or individual retirement aeeeurA (IRA),
and speeifies the eligible refifement plan or- IRA to whieh siaeh distfibutien is to
then the distribution will be made in the &Tm of a dir-eet trastee to trustee trafisfer-
tote speei fie eligible retirement
plan or 1 A
Section 4. Sec. 18-29.14 of the City Code of Ordinances is created to read as follows:
Sec. 18-29.14. Internal Revenue Code Compliance.
(a) Maximum Pension
Notwithstanding M provision of this Plan to the contrary, the Annual Pension that
is accrued boor paid to a participant shall not exceed the Dollar Limitation set forth
below. If the benefit the participant would otherwise accrue in a Limitation Year
would produce an Annual Pension in excess of the Dollar Limitation, the benefit
shall be limited to a benefit that does not exceed the Dollar Limitation.
6 ORDINANCE#2011-009
(1) Definitions Used in this Section
(A) "Annual Pension" means the benefits received by a
participant under this Plan expressed in the form of a straightlife
annuity. In determining whether benefits payable exceed the
Dollar Limitation set forth below, benefits payable in any form
other than a straight life annuity shall be adjusted to the larger of:
(i) The annual amount of the straight life annuity (if any)
payable to the participant under the plan commencingat t the
same annuity starting date as the form of benefit payable to
the participant; or
(ii) The annual amount of the straight life annuity
commencing at the same annuity starting date that has the
same actuarial present value as the form of benefit payable
to the participant, computed using a 5 percent interest
assumption and the applicable mortality table described in
§1.417(e)-I(d)(2) of the Income Tax Regulations Cede for
that annuity starting date.
No actuarial adjustment to the benefit shall be made for benefits
that are not directly related to retirement benefits (such as a
qualified disability benefit, preretirement incidental death benefits,
and postretirement medical benefits); or the inclusion in the form
of benefit of an automatic benefit increase feature, provided the
form of benefit is not subject to §417(e)(3) of the Internal Revenue
Code and would otherwise satisfy the limitations of this Subsection
(a), and the amount payable under the form of benefit in any
Limitation Year shall not exceed the limits of this Subsection (a)
applicable at the annuity starting date, as increased in subsequent
years pursuant to § 415(d) of the Internal Revenue Code. For this
purpose, an automatic benefit increase feature is included in a form
of benefit if the form of benefit provides for automatic, periodic
increases to the benefits paid in that form.
7 ORDINANCE#2011-009
(B) "Dollar Limitation" means $160,000.00 (subject to the
annual adjustments provided under Section 415(d) of the Internal
Revenue Code). Said Such amount shall be adjusted based on the
age of the participant when benefits begin,as follows:
(i) Except with respect to a participant who is a
"Qualified Participant" as defined in Section 415(b)(2)(H)
of the Internal Revenue Code, for benefits (except survivor
and disability benefits as defined in Section 415(b)(2)(I) of
the Internal Revenue Code) beginning before age 62 the
Age-Adjusted Dollar Limitation is equal to the lesser of:
(I) the actuarial equivalent of the annual amount of
a straight life annuity commencing at the annuity
starting date that has the same actuarial present
value as a deferred straight life annuity_
commencing at age 62, where annual payments
under the straight life annuity commencing at age
62 are equal to the Dollar Limitation (as adjusted
pursuant to section 415(d) of the Internal Revenue
Code for the limitation year), and where the
actuariallyequivalent straight life annuity is
computed using_a 5 percent interest rate and the
applicable mortality table under §1.417(e)-1(d)(2)
of the Income Tax Regulations Cede that is
effective for that annuity starting date (and
expressingparticipant's age based on completed
calendar months as of the annuity starting date), and
(II) the Dollar Limitation (as adjusted pursuant to
section 415(d)) of the Internal Revenue Code
multiplied by the ratio of the annual amount of the
straight life annuity under the plan to the annual
amount of the straight life annuity under the plan
8 ORDINANCE 42011-009
commencing at age 62, with both annual amounts
determined without applying the rules of section
415 of the Internal Revenue Code.
(ii) For benefits beginning after the age of 65, the age-
adjusted Dollar Limitation is equal to the lesser of:
(1) the actuarial equivalent of the annual
amount of a straight life annuity commencin at t the
annuity starting date that has the same actuarial
present value as a straight life annuity commencing
at age 65, where annual payments under the straight
life annuity commencing at age 65 are equal to the
dollar limitation of section 415(b)(1)(A) of the
Internal Revenue Code (as adjusted pursuant to
section 415(d) of the Income Tax Regulations Code
for the limitation year), and where the actuarially
equivalent straight life annuity is computed using a
5 percent interest rate and the applicable mortality
table under §1.417(e)1(d)(2) the Income Tax
Regulations ale that is effective for that annuity
starting date and expressingparticipant's age
based on completed calendar months as of the
annuity starting); and
(II) the section 415(b)1)(A) of the h4emal
Revenue Code Dollar limitation of the Internal
Revenue Code (as adjusted pursuant to sections
415(d) of the Internal Revenue Code and §1.415(d)-
1 of the intemal
Revenue rode Income Tax
Regulations for the limitation year) multiplied by
the ratio of the annual amount of the adjusted
immediately commencing straight life annuity
under the plan to the adjusted age 65 straight life
9 ORDINANCE#2011-009
annuity. The adjusted immediately commencing
straight life annuity means the annual amount of the
immediately commencing straight life annuity
payable to the participant, computed disregarding
the participant's accruals after age 65 but including
actuarial adjustments even if those actuarial
adjustments are applied to offset accruals. For this
purpose, the annual amount of the immediately
commencing straight life annuity is determined
without applying the rules of section 415 of the
Internal Revenue Code. The adjusted age 65
straight life annuity means the annual amount of the
straight life annuity that would be payable under the
plan to a hypothetical participant who is 65 years
old and has the same accrued benefit (with no
actuarial increases for commencement after age 65)
as the participant receiving the distribution
(determined disregarding the participant's accruals
after age 65 and without applying the rules of
section 415 of the Internal Revenue Code).
(iii) There shall be no age adjustment of the Dollar
Limitation with respect to benefits beginning between the
ages of 62 and 65.
(2) The limitations set forth in this Subsection (a) shall not apply if the
Annual Pension does not exceed $10,000.00 provided the participant has
never participated in a Defined Contribution Plan maintained by the City.
(3) Cost-of-living adjustments.in the Dollar Limitation for benefits shall
be limited to scheduled annual increases determined by the Secretary of the
Treasury under Section Subsection 415(d)of the Internal Revenue Code.
(4) In the case of a participant who has fewer than 10 years of
participation in the Plan, the Dollar Limitation set forth in Paragraph
10 ORDINANCE#2011-009
(1)(B) of this Subsection (a) shall be multiplied by a fraction (i) the
numerator of which is the number of years (or part thereof a year) of
participation in the Plan, and (ii) the denominator of which is 10.
(5) Any portion of aparticipant's benefit that is attributable to
mandatory employee contributions (unless picked-up by the City) or
rollover contributions, shall be taken into account in the manner
prescribed in the regulations under Section 415 of the Internal Revenue
Code.
(6) Should any participant participate in more than one defined benefit
plan maintained by the City, in any case in which the participant's benefits
under all such defined benefit plans (determined as of the same age) would
exceed the Dollar Limitation applicable at that age, the accrual of the
participant's benefit under this Plan shall be reduced so that the
participant's combined benefits will equal the Dollar Limitation.
(7) For a participant who has or will have distributions commencing at
more than one annuity starting date, the Annual Benefit shall be
determined as of each such annuity starting date (and shall satisfy the
limitations of this Section as of each such date), actuarially adjusting
past and future distributions of benefits commencing at the other annuity
starting dates. For this purpose, the determination of whether a new
starting date has occurred shall be made without regard to § 1.401(a
Q&A 10(d), and with regard to , 1.415(b)1(b)(1)(iii)(B) and (C) of the
Income Tax Regulations.
(8) The determination of the Annual Pension under Paragraph (a)((1) of
this Subsection (a) shall take into account(in the manner prescribed by the
regulations under Section 415 of the Internal Revenue Code) social
security supplements described in § 411(a)(9) of the Internal Revenue
Code and benefits transferred from another defined benefit plan, other
than transfers of distributable benefits pursuant § 1.411(d) 4, Q&A-3(c) of
the Income Tax Regulations.
11 ORDINANCE#2011-009
(9) The above limitations are intended to comply with the provisions
of Section 415 of the Internal Revenue Code, as amended, so that the
maximum benefits provided by plans of the City shall be exactly equal to
the maximum amounts allowed under Section 415 of the Internal Revenue
Code and regulations there under it. If there is any discrepancy between
th�rovisions of this Subsection (a) and the provisions of Section 415 of
the Internal Revenue Code and regulations there under it, such
discrepancy shall be resolved in such a way as to give full effect to the
provisions of Section 415 of the Internal Revenue Code. The value of any
benefits forfeited as a result of the application of this Subsection (a) shall
be used to decrease future employer contributions.
(10) For the purpose of applying the limitations set forth in Sections
401(a)(17) and 415 of the Internal Revenue Code, Earnings shall include
any elective deferral (as defined in Cede Section 402(g)((3) of the Internal
Revenue Code), and any amount which is contributed or deferred by the
employer at the election of the Member and which is not includible in the
gross income of the Member by reason of Section 125 or 457 of the
Internal Revenue Code. For limitation years beginning on and after
January 1, 2001, for the purposes of applying the limitations described in
this Subsection (a), compensation paid or made available during
limitation years shall include elective amounts that are not includible in
the gross income of the Member by reason of Section 132(D(4) of the
Internal Revenue Code.
(b) Required Beginning Date:
Notwithstanding any other provision of the Plan, payment of a participant's
retirement benefits under the Plan shall commence not later than the participant's
Required Beginning Date, which is defined as the later of:
April 1 of the calendar year that next follows the calendar year in which the
participant attains or will attain the age of 701/2 years; or
April 1 of the calendar year that next follows the calendar year in which the
participant retires.
12 ORDINANCE#2011-009
(c) Required Minimum Distributions.
(1) Required Beginning Date. The participant's entire interest will be
distributed, or begin to be distributed, to the participant no later than the
participant's Required Beginning Date as defined in Subsection (b) of this
Section 18-29.14.
(2) Death of participant Before Distributions Begin.
(A) If the participant dies before distributions begin, the
participant's entire interest will be distributed, or begin to be
distributed,no later than as follows:
(i) If the participant's surviving_spouse is the
participant's sole designated beneficiary, then distributions
to the surviving spouse will begin by December 31 of the
calendar year immediately following the calendar year in
which the participant died, or by December 31 of the
calendar year in which the participant would have attained
age 701/2, if later.
(ii) If the participant's surviving spouse is not the
participant's sole designated beneficiary, then distributions
to the designated beneficiary will begin by December 31 of
the calendar year immediately following the calendar year
in which the participant died.
(iii) If there is no designated beneficiary as of
September 30 of the year following the year of the
participant's death, the participant's entire interest will be
distributed by December 31 of the calendar year containing
the fifth anniversary of the participant's death.
,(B) The participant's entire interest shall be distributed as
follows:
(i) participant Survived by Designated Beneficiary. If
the participant dies before the date distribution of his or her
interest begins and there is a designated beneficiary, the
13 ORDINANCE#2011-009
participant's entire interest will be distributed, beginning no
later than the time described in Subparagraph (2)(A) above,
over the life of the designated beneficiary or over a period
certain not exceeding:
(I) unless the annuitystarting tarting date is before the
first distribution calendar year, the life expectancy
of the designated beneficiary determined using the
beneficiary's age as of the beneficiary's birthday in
the calendar year immediately following he
calendar year of the participant's death; or
(II) if the annuity starting date is before the first
distribution calendar year, the life expectancyof the
designated beneficiary determined using the
beneficiary's age as of the beneficiary's birthday in
the calendar year that contains the annuity starting
date.
(ii) No Designated Beneficiary. If the participant dies
before the date distributions begin and there is no
designated beneficiary as of September 30 of the year
following the year of the participant's death, distribution of
the participant's entire interest will be completed by
December 31 of the calendar year containing the fifth
anniversary of the participant's death.
(C) Death of Surviving Spouse Before Distributions to
Surviving Spouse Begin. In any case in which (i) the participant
dies before the date distribution of his or her interest begins, (ii)
the participant's surviving spouse is the participant's sole
designated beneficiary, and (iii) the surviving spouse dies before
distributions to the surviving spouse begin,,Subparagraphs (2)(A)
and 2(B) above shall apply as though the surviving spouse were
the participant.
14 ORDINANCE#2011-009
(3) Requirements For Annuity Distributions That Commence During
participant's Lifetime.
(A) Joint Life Annuities Where the Beneficiary Is Not the
participant's Spouse. If the participant's interest is being
distributed in the form of a joint and survivor annuity for the joint
lives of the participant and a nonspousal beneficiary, annuity
payments to be made on or after the participant's Required
Beginning Date to the designated beneficiary after the participant's
death must not at any time exceed the applicable percentage of the
annuity payment for such period that would have been payable to
the participant using the table set forth in Q&A-2 of Section
1.401(a)(9)-6T of the United States Treasury regulations. If the
form of distribution combines a joint and survivor annuity for the
joint lives of the participant and a nonspousal beneficiary and a
period certain annuity, the requirement in the preceding sentence
will apply to annuity payments to be made to the designated
beneficiary after the expiration of the period certain.
(B) Period Certain Annuities. Unless the participant's spouse
is the sole designated beneficiary and the form of distribution is a
period certain and no life annuity, the period certain for an annuity
distribution commencing during the participant's lifetime maw
exceed the applicable distribution period for the participant under
the Uniform Lifetime Table set forth in Section 1.401(a)(9)
the United States Treasury regulations for the calendar year that
contains the annuity starting date. If the annuity starting date
precedes the year in which the participant reaches age 70, the
applicable distribution period for the participant is the distribution
period for age 70 under the Uniform Lifetime Table set forth in
Section 1.401(a)(9)-9 of the United States Treasury regulations
plus the excess of 70 over the age of the participant as of the
participant's birthday in the year that contains the annuity starting
15 ORDINANCE#2011-009
I
II li
date. If the participant's spouse is the participant's sole designated
beneficiary and the form of distribution is a period certain and no
life annuity, the period certain may not exceed the longer of the
participant's applicable distribution period, as determined under
III
this Subparagraph 3 B or the joint life and last survivor
expectancy of the participant and the participant's spouse as
determined under the Joint and Last Survivor Table set forth in
Section 1.401(a)(9)-9 of the United States Treasury regulations,
using the participant's and spouse's attained ages as of the
participant's and spouse's birthdays in the calendar year that
contains the annuity starting date.
(4) Form of Distribution. Unless the participant's interest is
distributed in the form of an annuity purchased from an insurance
company or in a single sum on or before the Required Beginning Date, as
of the first distribution calendar year distributions will be made in
accordance with Subparagraphs (4)(A), (4)(B) and (4)(C) below. If the
participant's interest is distributed in the form of an annuity purchased
from an insurance company, distributions dwre under it will be made in
accordance with the requirements of Section 401(a)(9) of the Internal
Revenue Code and the United States TreasM regulations. Any part of the
participant's interest which is in the. form of an individual account
described in Section 414(k) of the Internal Revenue Code will be
distributed in a manner satisfying the requirements of Section 401(a)(9) of
the Internal Revenue Code and the United States Treasury regulations that
apply to individual accounts.
(A) General Annuity Requirements. If the participant's interest
is paid in the form of annuity distributions under the Plan,
payments under the annuity will satisfy the following
requirements:
(i) the annuity distributions will be paid in periodic
payments made at intervals not longer than one year;
16 ORDINANCE#2011-009
(ii) the distribution period will be over a life (or lives)
or over a period certain, not longer than the distribution
period described in Paragraphs 2 or 3 above, whichever is
applicable, of this Subsection(c)
(ill) once payments have begun over a period certain,
the period certain will not be changed even if the period
certain is shorter than the maximum permitted;
(iv) payments will either be non-increasing or increase
only as follows:
(I) by an annual percentage increase that does
not exceed the annual percentage increase in a cost-
of-living index that is based on prices of all items
and issued by the Bureau of Labor Statistics;
(II) to the extent of the reduction in the amount
of the participant's payments to provide for a
survivor benefit upon death, but only if the
beneficiary whose life was being used to determine
the distribution period dies or is no longer
participant's beneficigy pursuant to a qualified
domestic relations order within the meaning of
Section 414(p) of the Internal Revenue Code;
(III) to provide cash refunds of employee
contributions upon the participant's death, or
HIV to pay increased benefits that result from a
Plan amendment.
(B) Amount Required to be Distributed by Required Beginning
Date. The amount that must be distributed on or before the
participant's Required Beginning Date or, if the participant dies
before distributions begin, the date distributions are required to
begin under Subparagraph (2)(A)(i) or 2)(A)(ii), whichever is
applicable) is the payment that is required for one paw
17 ORDINANCE#2011-009
interval. The second payment need not be made until the end of
the next payment interval even if that payment interval ends in the
next calendar year. Payment intervals are the periods for which
payments are received, e.g., bi-monthly, monthly, semi-annually,
or annually. All of the participant's benefit accruals as of the last
day of the first distribution calendar year will be included in the
calculation of the amount of the annuity payments for payment
intervals ending on or after the participant's Required Beginning
Date.
(C) Additional Accruals After First Distribution Calendar Year.
Any additional benefits accruing to the participant in a calendar
i
year after the first distribution calendar year will be distributed
beginning with the first payment interval ending in the calendar
year immediately following the calendar year in which such
amount accrues.
(5) For purposes of this Subsection (c), distributions are considered to
begin on the participant's Required Beginning Date. If annuity pqyments
irrevocably commence to the participant or to the participant's Surviving
Spouse) before the participant's Required Beginning Date or, if to the
participant's Surviving Spouse, before the date distributions are required
to begin in accordance with Subparagraph (2)(A) above), the date
distributions are considered to begin is the date distributions actually
commence.
(6) Definitions.
(A) Designated beneficiary. The individual who is designated
as the beneficiary under the Plan and is the designated beneficiary
under Section 401(a)(9) of the Internal Revenue Code and Section
1.401(a)(9)-1, Q&A-4, of the United States Treasure regulations.
(B) Distribution calendar year. A calendar year for which a
minimum distribution is required. For distributions beginning
before the participant's death, the first distribution calendar year
18 ORDINANCE#2011-009
the calendar ye
ar immediate) preceding the calendar year which
v immediately � v
contains the participant's Required Beginning Date. For
distributions beginning after the participant's death, the first
distribution calendar year is the calendar year in which
distributions are required to beginpursuant to Paragraph (2) of this
Subsection(c).
(C) Life expectancy. Life expectancy as computed by use of
the Single Life Table in Section 1.401(a)(9)-9 of the United States
Treasury regulations.
II
(d) (1) Notwithstanding any provision of the Plan to the contrary that
would otherwise limit a distributee's election under this Section, a distributee may
elect, at the time and in the manner prescribed by the Administrator, to have any
portion of an eligible rollover distribution paid directly to an eligible retirement
plan specified by the distributee in a direct rollover.
(2) Definitions
The following definitions apply to this Section:
(A) Eligible rollover distribution: An eligible rollover
distribution is any distribution of all or any portion of the balance
to the credit of the distributee, except that an eligible rollover
distribution does not include:
(i) any distribution that is one of a series of
substantially equal periodic payments not less frequently
than annually) made for the life (or life expectancy) of the
distributee or the joint lives (or joint life expectancies) of
the distributee and the distributee's designated beneficiary,
or for a specified period of 10 years or more;
(ii)any distribution to the extent such distribution is
required under Section 401(a)(9) of the Internal Revenue
Code;
19 ORDINANCE#2011-009
(iii) the portion of any distribution that is a hardship
distribution described in Section 401(k)(2)(B)(i)(IV) of the
Internal Revenue Code; and
(iv) the portion of any distribution that is not includible
in gross income (determined without regard to the
exclusion for net unrealized appreciation with respect to
employer securities),provided that a portion of a
distribution shall not fail to be an eligible rollover
distribution merely because the portion consists of after-tax
Employee contributions which are not includible in gross
income. However, such portion may be transferred only to
an individual retirement account or annuity described in
Section 408(a) or (b) of the Internal Revenue Code, or to a
qualified defined contribution plan described in Section
401 a or 403 a of the Internal Revenue Code that agrees
to separately account for amounts so transferred, including
separately accounting for the portion of such distribution
which is includible in gross income and the portion of such
distribution which is not so includible.
(3) Eligible retirement plan: An eligible retirement plan is an
individual retirement account described in Section 408(a) of the Internal
Revenue Code, an individual retirement annuity described in Section
408(b) of the Internal Revenue Code, an annuity plan described in Section
403(a) of the Internal Revenue Code, an annuity contract described in
Section 403(b) of the Internal Revenue Code, a qualified trust described in
Section 401 (a) of the Internal Revenue Code, an eligible plan under
Section 457(b) of the Internal Revenue Code which is maintained by a
state, political subdivision of a state, or any agency or instrumentality of a
state or political subdivision of a state and which agrees to separately
account for amounts transferred into such plan from this Plan, or, with
respect to distributions on or after January 1, 2008, a Roth IRA (subject to
20 ORDINANCE#2011-009
the limitations of Internal Revenue Code Section 408A(c)(3)) that accepts
the distributee's eligible rollover distribution.
(4) Distributee: A distributee includes an Employee or former
Employee. In addition, the Employee's or former Employee's surviving
spouse and the Employee's or former Employee's spouse or former spouse
who is the alternate payee under a qualified domestic relations order, as
defined in Section 414(p) of the Internal Revenue Code, are distributees
with regard to the interest of the spouse or former spouse. Furthermore,
effective January 1, 2007, a surviving designated beneficiary as defined in
Section 401(a)(9(E) of the Internal Revenue Code who is not the
surviving spouse and who elects a direct rollover to an individual
retirement account described in Section 408 a of the Internal Revenue
Code or an individual retirement annuity described in Section 408(b) of
the Internal Revenue Code shall be considered a distributee.
(5) Direct rollover: A direct rollover is a payment by the Plan to the
eligible retirement plan specified by the distributee.
(e) Notwithstanding any other provision of this Plan,the maximum amount of
any mandatory distribution, as defined in Section 401(a)(31) of the Internal
Revenue Code,payable under the Plan shall be $1000.00.
(f) Compensation Limitations Under 401(a)(17) of the Internal Revenue
Code:
In addition to other applicable limitations set forth in the Plan, and
notwithstanding M other provision of the Plan to the contrary, the annual
compensation of each participant taken into account under the Plan shall not
exceed the Economic Growth Tax Relief Reconciliation Act ("EGTRRA") annual
compensation limit for limitation years beginning after December 31, 2001. The
EGTRRA annual compensation limit is $200,000.00, as adjusted by the
Commissioner for increases in the cost of living in accordance with Section
401(a)(17)(B) of the Internal Revenue Code. The cost-of-living adjustment in
effect for a calendar year applies to any period, not exceeding 12 months, over
which Compensation is determined (determination period) beginning in such
21 ORDINANCE#2011-009
calendar year. If a determination period consists of fewer than 12 months, the
EGTRRA annual compensation limit will be multiplied by a fraction, the
numerator of which is the number of months in the determination period, and the
denominator of which is 12.
Any reference in the Plan to the limitation under Section 401 (a)(17) of the
Internal Revenue Code shall mean the EGTRRA annual compensation limit set
forth in this provision.
(g) At no time prior to the satisfaction of all liabilities under the plan with
respect to members and their spouses or beneficiaries, shall any part of the corpus
or income of the fund be used for or diverted to any purpose other than for their
exclusive benefit.
Section 5. That all ordinances or parts of ordinances and all resolutions or parts of
resolutions in conflict with the provisions of this Ordinance are repealed.
Section 6. That if any section, clause, sentence or phrase of this Ordinance is for any
reason held invalid or unconstitutional by a court of competent jurisdiction, the holding shall not
affect the validity of the remaining portions of this Ordinance.
Section 7. That this Ordinance shall take effect immediately upon its passage and
adoption.
PASSED on first reading on February 22, 2011.
PASSED AND ADOPTED on second reading on March 9, 2011.
ATTEST: ��owARn-s,�,
A
LOUISE STILSON, CMC C. K. McELY
CITY CLERK MAYOR—COMMISSIONER
71D
APPROVED AS 0 FORM AND CORRECTNESS:
` r`
fV
THOAAS J. ANS RO
CITY ATTORNEY
22 ORDINANCE#2011-009
Nov 11 10 10: 38a Marie Jabalee 9547480082 p. 2
Gabridi Roadcr SmW6 8z Company One Fast$toward Bivd.GRS
934.527.f62b pbor,r
Suitt SOS 9S4..S2S.008312x
Consv►lxana&'�.,cn,►atie, Ft.Lauderdale,FL 33301-1829 w ww 8abtielroedtrcom
August 16,2010
Mr.Ken Harrison
Sugarman&Susskind,P.A.
100 Miracle Mile
Suite 300
Coral Gables,Florida 33134
Re: City of Dania Beach Retirement Plait for Genend Employees
Dear Ken:
As requested,we have reviewed the proPM d ordinance that would amend the City of Dania Bead Rditanent Plan
for General Employees to comply with the Iateroal Revenue regulations.
In our opinion,this amendment will havE:no actuarial impact on the Plan.
Although there is no'actua W impact,a(:opy of this letter should be sent to the Division of Retirement
before the final public hearing on the Ordinance.
We welcome our q uesdons and comme tits-
Sincerely
Sincerely+yours,
J.Stephen Palmquist,ASA
Senior Consultant and Actuary
JSPIma