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2006-O-34ORDINANCE NO.2006-0-34 AN ORDINANCE OF THE CITY OF EDGEWATER, FLORIDA, MODIFYING THE POLICE RETIREMENT PLAN; BY AMENDING ARTICLE I (FORMAT AND DEFINITIONS), SECTION 1.02 (DEFINITIONS) AND ARTICLE VI (WHEN BENEFITS START AND DISTRIBUTION OF BENEFITS, SECTION 6.03 (OPTIONAL FORMS OF DISTRIBUTION AND DISTRIBUTION REQUIREMENTS); PROVIDING FOR FILING WITH THE DIVISION OF RETIREMENT OF THE FLORIDA DEPARTMENT OF MANAGEMENT SERVICES; PROVIDING FOR CONFLICTING PROVISIONS, SEVERABILITY AND APPLICABILITY; PROVIDING FOR AN EFFECTIVE DATE AND ADOPTION. WHEREAS, the City Council of the City of Edgewater, Florida, has made the following determinations: On September 13, 1999, Council adopted Ordinance No. 99-0-08, which restated and clarified the Police Retirement Plan/Police Officers' Pension Fund. 2. On September 11, 2000, Council adopted Ordinance No. 2000-0-14, which amended Ordinance No. 99-0-08 by modifying certain articles and sections of the Police Retirement Plan. 3. The Florida Legislature passed Chapter 99-1 of the Florida Laws, which amended Chapter 185, of the Florida Statutes creating minimum requirements for local Police Officer Pension Plans. The modifications contained herein will provide for the purchase ofcreditable service for military service in the armed forces and as a police officer with other agencies prior to employment with the City; provides for a deferred retirement program (DROP) with a five (5) year maximum and provides for third (3rd) party payments from retirement benefits. St nek-anvnglr passages are deleted. Underlined passages are added. 2006-0-34 NOW, THEREFORE, BE IT ENACTED by the People of the City of Edgewater, Florida: PART A. AMENDMENT OF THE POLICE RETIREMENT PLAN, SECTION 1.02 (DEFINITIONS) OF ARTICLE I (FORMAT AND DEFINITIONS) The Police Retirement Plan, Section 1.02 (Definitions) of Article I (Format and Definitions) is hereby amended to read as follows: ARTICLE I FORMAT AND DEFINITIONS SECTION 1.02 - - DEFINITIONS. The provisions of Chapter 185, Florida Statutes, shall be effective and constitute the City of Edgewater. Florida Police Officers' Pension Fund except as specifically set forth herein Accordingly, Chapter 185 Florida Statutes(1997)are attachedhereto and incorporated by reference This Pension Fund may be amended at any time by the city council enacting an appropriate ordinance, provided that such amendment complies with the Internal Revenue Code, Florida Statutes and other applicable laws The board of trustees may make recommendations by a majority vote to the city council concerning proposed pension plan amendments ACCRUAL SERVICE means the total of an Employee's Continuous Service as a Law Enforcement Officer, expressed as whole years and fractional parts of a yew (to two decimal places) on the basis that 365 days equal one year. Such total shall equal one year. Such total shall be equal to the period from his the Employee's Employment Commencement Date to the date of determination. However, Accrual Service is modified as follows: Period of Military Duty included: A Period of Military Duty shall be included as service with the Employer to the extent it has not already been credited. Prior service purchase: Apolice officer may purchase up to a combined total of five (5) years of Accrual Service for service in the Armed Forces of the United States or service as a notice officer for some other employer prior to employment with the Emplover. provided Shock d tough passages are deleted. Underlined passages are added. 2006-0-34 the police officer is not entitled to receive a retirement benefit for such other prior service in another governmental pension plan, and ii the police officer purchases such prior military or prior other police officer service at the full actuarial cost of such Accrual Service. ACCRUED BENEFIT means the amount of monthly retirement benefit on the Normal Form accrued by an Active Participant as of any date. See the ACCRUED BENEFIT SECTION of Article IV. ACTIVE PARTICIPANT means an Eligible Employee who is actively participating in the Plan according to the provisions in the ACTIVE PARTICIPANT SECTION of Article II. ACTUARIAL EQUIVALENT means equality in the value of the aggregate amounts expected to be received under different forms of payment based on the rates determined below. Theamountofeach payment under an optional form shall be determined by multiplying the amount payable on the Normal Form by the ratio of (a) the purchase rate available under Group Contract GA 59448 for the Normal Form, to (b) the purchase rate available under such Group Contract for the optional form at the time benefits are determined. The benefit from a single sum on an optional form shall be the Actuarial Equivalent of the benefit payable on the Normal Form based on the purchase rates available under such Group Contract. This is a variable standard of actuarial equivalence which precludes employer discretion except as provided in the AMENDMENTS SECTION of Article DC. On and after March 1, 1992, these applicable rates will be determined using the rates of interest and mortality (weighted .65 male and .35 female) used (as of the Annuity Starting Date) by the Pension Benefit Guaranty Corporation for a trusteed single -employer plan to value a benefit upon termination of an insufficient trusteed single -employer plan. In the event the basis for determining Actuarial Equivalent is changed, Actuarial Equivalent of the Participant's Accrued Benefit on and after the date of the change shall be determined as the greater of (a) the Actuarial Equivalent of the Accrued Benefit as of the date of the change computed on the old basis, or (b) the Actuarial Equivalent of the total Accrued Benefit computed on the new basis. ANNUITY STARTING DATE means, for a Participant, the first day of the first period for which an amount is paid as an annuity or any other form. AVERAGE COMPENSATION means, on any given date, the average of an Employee's Monthly Compensation for those three Compensation Years (all Compensation Years, if less than three) which give the highest average out of the five latest Compensation Years (all Compensation Years, if less than five) before the earlier of such given date, or his Normal Retirement Date. In computing Average Compensation on any given date before the first Yearly Date in 1994, the Plan will include only Compensation Years ending before such given date. In computing Average Compensation on any given date on or after the first Yearly Date in 1994, the Plan will exclude Strncktlneas' passages are deleted. Underlined passages are added. 2006-0-34 Compensation Years in which the Employee terminates employment with the Employer BENEFICIARY means the person or persons named by a Participant to receive any benefits under this Plan upon the Participant's death. See the BENEFICIARY SECTION of Article IX. CODE means the Internal Revenue Code of 1986, as amended. COMPENSATION means, except as modified in this definition, the total earnings paid or made available to an Employee by the Employer during any specified period. "Eamings" in this definition means all wages as reported in the wages, tips and other compensation box on form W-2 for Federal income tax withholding purposes, as defined under Code Section 3401(a) (for purposes of income tax withholding at the source), disregarding any rules limiting the remuneration included as wages based on the nature or location of the employment or the services performed. Earnings also include all other payments to an Employee in the course of the Employer's trade or business, for which the Employer must furnish the Employee a written statement under Code Sections 6041(d) and 6051(a)(3). Compensation shall also include elective contributions. Elective contributions are amounts excludable from the Employee's gross income under Code Sections 12 5,402(a)(8),402(h) or 403(b), and contributed by the Employer, at the Employee's election, to a Code Section 401(k) arrangement, a simplified employee pension, cafeteria plan or tax-sheltered annuity. Elective contributions also include Compensation deferred under a Code Section 457 plan maintained by the Employer and Employee contributions "picked up" by a governmental entity and, pursuant to Code Section 414(h)(2), treated as Employer contributions. COMPENSATION YEAR means a consecutive one-year (twelve month) period ending m janc30. Before the first Yearly Date in 1994, Compensation Yew means a one-year period ending on the June 30 immediately before an Employee's Entry Date and ending on the same date of each following year on which he is an Active Participant. After 1994, Compensation Year means a consecutive one-year (twelve monthl period immediately preceding a Participant's Retirement Date CONTINGENT ANNUITANT means an individual named by the Participant to receive a lifetime benefit after the Participant's death according to a survivorship life annuity form of distribution. CONTINUOUS SERVICE means, for a Participant any period of uninterrupted service with the Employer. For purposes of this definition, no interruption in service will occur because of approved periods of absence from the Employer due to temporary lay-off, leave of absence (not to exceed one year), of a temporary absence due to illness or injury. Strnekthywgh passages are deleted. Underlined passages are added. 2006-0-34 CONTRIBUTIONS means Employer Contributions Required Contributions State Contributions Other Contributions as set out in Article III, unless the context clearly indicates otherwise. DIRECT ROLLOVER means a payment by the Plan to the Eligible Retirement Plan specified by the Distributee. DISTRIBUTEE means the Employee or former Employee. In addition, the Employee's or former Employee's surviving spouse and the Employee's or former Employee's spouse of former spouse who is the alternative payee under a qualified domestic relations order, as defined in Code Section 414(p), are Distributees with regard to the interest of the spouse or former spouse. DROP (Deferred Retirement Option Program) means that a police officer may retire for all purposes of the plan and defer receipt of retirement benefits into a DROP account while continuing emDlovment with the Citv. ELIGIBLE RETIREMENT PLAN means an individual retirement account described in Code Section 408(a), an individual retirement annuity described in Code Section 408(b), an annuity plan described in Code Section 403(a) or a qualified trust described in Code Section 401(a), that accepts the Distributee's Eligible Rollover Distribution. However, in the case of an Eligible Rollover Distribution to the surviving spouse, an Eligible Retirement Plan is an individual retirement account or individual retirement annuity. ELIGIBLE ROLLOVER DISTRIBUTION means any distribution ofall or any portion ofthe balance to the credit of the Distributee, except that an Eligible Rollover Distribution does not include: (a) 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 thejoint lives (or joint life expectancies) of the Distributee and the Distributee's designated Beneficiary, or for a specified period of ten years or more. (b) Any distribution to the extent such distribution is required under Code Section 401(a)(9). ( c) The portion of any distribution that is not includible in gross income (determined without regard to the exclusion for net umealized appreciation with respect to employer securities). Se gh passages are deleted. Underlined passages are added. 2006-0-34 EMPLOYEE means an individual who is employed by the Employer EMPLOYER means the Primary Employer. EMPLOYER CONTRIBUTIONS means contributions made by the Employer to fund this Plan. See the EMPLOYER CONTRIBUTIONS SECTION of Article III. ENTRY DATE means the date an Employee first enters the Plan as an Active Participant. See the ACTIVE PARTICIPANT SECTION of Article II. FISCAL YEAR means the Primary Employer's accounting year. The last day of the Fiscal Yew is September 30. FUND means the Trust Fund established herein as part of the Plan. GROUP CONTRACT means the group annuity contract or contracts into which the City of Edgewater Police Retirement Plan Board of Trustees enters with the Insurer for the investment of Contributions and the payment of benefits under this Plan. The tern Group Contract as it is used in this Plan is deemed to include the plural unless the context clearly indicates otherwise. INACTIVE PARTICIPANT means a former Active Participant who has an Accrued Benefit. See the INACTIVE PARTICIPANT SECTION of Article II. INSURER means Principal Mutual Life Insurance Company and any other insurance company or companies named by the Board of Trustees. INVESTMENT MANAGER means any fiduciary (other than a trustee). (a) who has the power to manage, acquire, or dispose of any assets of the Plan; and (b) who (1) is registered as an investment adviser under the Investment Advisers Act of 1940, or (2) is a bank, as defined in the Investment Advisers Act of 1940, or (3) is an insurance company qualified to perform services described in subparagraph (a) above under the laws of more than one state. LATE RETIREMENT DATE means the first day of any month which is after a Participant's Normal Retirement Date and on which retirement benefits begin. If a Participant continues to work for the Employer after his Normal Retirement Date, his Late Retirement Date shall be the earliest first day of the month on or after he ceases to be an Employee. See the WHEN BENEFITS START SECTION of Article VI. St nek-aneng' passages are deleted. Underlined passages are added. 2006-0-34 MONTHLY COMPENSATION means, for any Compensation year, 1/12th of an Employee's Compensation for such year. To determine Monthly Compensation if an Employee is an Employee for only part of a Compensation Year, his Compensation for that Compensation Year shall be converted to an annual basis as though he were employed for the full Compensation Year. MONTHLY DATE means each Yearly Date and the same day of each following month during the Plan Year beginning on such Yearly Date. NORMAL FORM means a straight life annuity. NORMAL RETIREMENT DATE means the earliest first day of the month on or after the date of the Participant reaches the earlier of (i) age 55 and the date he completes 5 years of service with the Employer, or (ii) the date he completes 20 yews of service with the Employer. Unless otherwise provided in this Plan, a Participant's retirement benefits shall begin on his Normal Retirement Date if he has ceased to bean Employee on such date. See the WHEN BENEFITS START SECTION of Article VI. OTHER CONTRIBUTIONS means contributions from persons or entities other than the State of Florida, City of Edgewater, or Plan Participants. PARTICIPANT means either an Active Participant or an Inactive Participant. PARTICIPANT CONTRIBUTIONS means with Required Contributions as set out in Article I1I. PERIOD OF MILITARY DUTY means, for an Employee: (a) who served as a member of the armed forces of the United States, and (b) who was reemployed by the Employer at the time when the Employee had a right to reemployment in accordance with seniority rights as protected under Section 2021 through 2026 of Title 38 of the U.S. Code, the period of time from the date the Employee was first absent from active work for the Employer because of such military duty to the date the Employee was reemployed. A police officer may purchase Accrual Service for service with the Armed Forces of the United States or prior service as a police officer for some other employer prior to employment provided- (i) the police officer is not entitled to receive a retirement benefit for such other prior service as a police officer, and (ij) the police officer purchases such prior military or prior other police officer St ack-Nno* passages are deleted. Underlined passages are added. 2006-0-34 service at the full actuarial cost of such Accrual Service. Payment for such purchase of prior service shall be made, at the option of the police officer, as a lump sum navment or installments that shall be paid over a period of time not to exceed the Accrual Service purchased. Installment payments shall be subject to interest in an amount to be established by the board of trustees, not to exceed the annual actuarial assumption rate for the plan. Full payment for such prior service purchase shall be made before crediting the service. PLAN means the defined benefit retirement plan of the Employer set forth in this document, including any later amendments to it. PLAN ADMINISTRATOR means the person or persons who administer the Plan. The Plan Administrator is the City of Edgewater Police Retirement Plan Board of Trustees. See the BOARD OF TRUSTEES SECTION of Article VIII. PLAN PARTICIPATION means the period of time during which a Participant has been an Active Participant. PLAN YEAR means a period beginning on a Yearly Date and ending on the day before the next Yearly Date. PRESENT VALUE means the current value of a benefit payable on a specified form and on a specified date. The Present Value of any benefit under the terms of this Plan will be the actuarial equivalent of the benefit payable on the Norma] Form. Actuarial equivalence shall be determined on the basis of the mortality rates specified in the definition of Actuarial Equivalent, and either the interest rate(s) specified in the definition of Actuarial Equivalent or the Code Section 417 interest rate(s), whichever produces the great benefit. In addition, the amount of any distribution under the terms of this Plan will be determined in accordance with the preceding paragraph. The two preceding paragraphs shall not apply to the extent they would cause the Plan to fail to satisfy the requirements of the BENEFIT LIMITATION SECTION of Article IV. The Code Section 417 interest rates(s) are: (a) the applicable interest rate if the Present Value of the benefit (using such rate(s)) is not in excess of $25,000; or (b) 120 percent of the applicable interest rate if the Present Value of the benefit exceeds $25,000 (as determined under (a) above). In no event shall the Present Value determined under this Shack th o* passages are deleted. Underlined passages are added. 2006-0-34 (b) be less than $25,000 The applicable interest rate is the interest rate(s) which would be used (as of the Annuity Starting Date) by the Pension Benefit Guaranty Corporation for a trusteed single -employer plan to value a benefit upon termination of an insufficient trusteed single -employer plan. Before March 1, 1992, Present Value is determined in accordance with the provisions of the Plan as in effect on September 30, 1989. PRIMARY EMPLOYER means City of Edgewater, Florida. QUALIFIED JOINT AND SURVIVOR FORM means, for a Participant who has a spouse, an immediate survivorship life annuity, where the survivorship percentage is 50% and the Contingent Annuitant is the Participant's spouse. If a Participant does not have a spouse, the Qualified Joint and Survivor Form means the Normal Form. This Qualified Joint and Survivor Form shall be at least the Actuarial Equivalent of any form of benefit offered under the Plan. QUALIFIED PRERETIREMENT SURVIVOR ANNUITY means a straight life annuity payable to the surviving spouse of a Participant who dies before his Annuity Starting Date. Benefits shall be determined as if the Participant had ceased to be an Employee on the date of his death (date he last ceased to be an Employee, if earlier) and survived to the date benefits become payable to the spouse and retired on that date. The monthly benefit payable to the spouse shall be equal to the survivorship percentage of the retirement benefit that would have been payable to the Participant if his Retirement Date had occurred on the date benefits start to the spouse and he had retired under the Qualified Joint and Survivor Form. If the Participant elects a survivorship annuity (where the survivorship percentage is at least 50% and the Contingent Annuitant is the Participant's spouse) and which is at least the Actuarial Equivalent of the Qualified Joint and Survivor Form for purposes of determining the Qualified Preretirement Survivor Annuity. REENTRY DATE means the date a former Active Participant reenters the Plan. See the ACTIVE PARTICIPANT SECTION of Article I1. REQUIRED CONTRIBUTIONS means nondeductible contributions required from a Participant in order to participate in this Plan. See the REQUIRED CONTRIBUTIONS BY PARTICIPANTS SECTION of Article III. REQUIRED CONTRIBUTION ACCOUNT means, on any date, the total ofa Participant's Required Contributions. A Participant's Required Contribution Account shall be reduced by the amount of any distribution of his Required Contribution Account. Shack H tough passages are deleted. Underlined passages are added. 2006-0-34 RETIREMENT DATE means the date a retirement benefit will begin and is a Participant's Early, Normal or Late Retirement Date, as the case may be. SOCIAL SECURITY RETIREMENT AGE means age 65 in the case of a Participant attaining age 62 before January 1, 2000 (i.e., born before January 1, 1938), age 66 for a Participant attaining age 62 after December 31, 1991, and before January 1, 2017 (i.e., bom after December 31, 2016)(i.e., bom after December 31, 1954). STATE CONTRIBUTIONS means the net proceeds of the one percent excise tax which may be imposed by the City of Edgewater, Florida upon certain casualty insurance companies on their gross receipts of premiums from holders of policies, which policies cover property within the corporate limits of the City of Edgewater, Florida. TEFRA means the Tax Equity and Fiscal Responsibility Act of 1982. TEFRA COMPLIANCE DATE means the date a plan is to comply with the provisions of TEFRA. The TEFRA Compliance Date as used in this Plan is, (a) for purposes of benefit limitation, Code Section 415, (1) if the plan was in effect on July 1, 1982, the first day of the first limitation yew which begins after December 31, 1982, or (2) if the plan was not in effect on July 1, 1982, the first day of the first limitation year which ends after December 31, 1982, or (b) for all other purposes, the first Yearly Date after December 31, 1983 TOTALLY AND PERMANENTLY DISABLED means a Police Officer is considered Disabled when he or she becomes totally and permanently unable to perform useful and efficient service as a Police Officer. A written application is made to the Board of Trustees for a Disability Pension and decides whether or not the pension is to be granted. VESTING PERCENTAGE means the percentage used to determine that portion of a Participant's Accrued Benefit resulting from Employer Contributions which is nonforfeitable (cannot be lost since it is vested). A Participant's Vesting Percentage is shown in the following schedule opposite the number ofwhole years of his Plan Participation. Stmek-tltrovgh passages are deleted. Underlined passages are added. 2006-0-34 10 PLAN PARTICIPATION VESTING (whole years) PERCENTAGE Less than 5 0 5 or more 100 However, the Vesting Percentage for a Participant who is an Employee on or after the earlier of (i) the date he reaches his Normal Retirement Date or (ii) the date he meets the requirement(s) for an Early Retirement Date, shall be 100% on such date. VOLUNTARY DISCONTINUANCE DATE means the date a Participant fails or refuses to make a Required Contribution. YEARLY DATE means February 1, 1978, and each following October 1. YEARS OF SERVICE means an Employee's Continuous Service disregarding any modifications which exclude service. PART B. AMENDMENT OF THE POLICE RETIREMENT PLAN, SECTION 6.03 (OPTIONAL FORMS OF DISTRIBUTION AND DISTRIBUTION REQUIREMENTS) OF ARTICLE VI (WHEN BENEFITS START AND DISTRIBUTION OF BENEFITS) The Police Retirement Plan, Section 6.03 (Optional Forms of Distribution and Distribution Requirements) of Article VI (When Benefits Start and Distribution of Benefits) is hereby amended to read as follows: ARTICLE VI WHEN BENEFITS START AND DISTRIBUTION OF BENEFITS SECTION 6.03 OPTIONAL FORMS OF DISTRIBUTION AND REQUIREMENTS. (a) For purposes of this section, the following terns are defined: Designated Beneficiary means the individual who is designated as the beneficiary under the Plan in accordance with Code Section 401(a)(8) and the proposed regulations thereunder. Distribution Calendar Ye az means a calendar year for which a minimum distribution is required. For distributions beginning before the Participant's death, the first Distribution Calendar Year is the calendar year immediately preceding the calendar year which contains the Participant's Required Beginning Date. For distributions beginning after the Shuck 0noegh passages are deleted. Underlined passages are added. 2006-0-34 11 Participant's death, the first Distribution Calendar Year is the calendar year in which distributions are required to begin pursuant to (h) below. Joint and Last Survivor Expectancy means the joint and last survivor expectancy calculated using the attained age of the Participant (or Designated Beneficiary) as of the Participant's (or Designated Beneficiary's) birthday in the applicable calendar year. The applicable calendar year shall be the Distribution Calendar Yew. If annuity payments commence before the Required Beginning Date, the applicable calendar year is the year such payments commence. Joint and Last Survivor Expectancy is computed by use of the expected return multiples in Table VI of section 1.72-9 of the Income Tax Regulations. Life Expectancv means the life expectancy calculated using the attained age of the Participant (or Designated Beneficiary) as of the Participant's (or Designated Beneficiary's) birthday in the applicable calendar year. The applicable calendar year shall be the Distribution Calendar Yew. If annuity payments commence before the Required Beginning Date, the applicable calendar yen is the year such payments commence. Life Expectancy is computed by use of the expected return multiples in Table V of section 1.72-9 of the Income Tax Regulations. Required Be ig nning Date means, for a Participant, the later of the April 1 following the calendar year in which a Participant attains age 70 % or the April 1 of the year following the calendar year in which retirement occurs. (b) The optional forms of retirement benefit shall be the following: a straight life annuity; single life annuities with certain periods of five, ten or fifteen years; and survivorship life annuities with survivorship percentages of 50, 66 2/3, 75 or 100 and a Deferred Retirement Option Propsam (DROP). described herein. The benefit payable on any optional annuity form available above (other than the Normal Form) shall be the Actuarial Equivalent ofthe benefit that would otherwise be payable on the Formal Form. Election of an optional form is subject to the qualified election provisions of Article VI. Any annuity contract distributed shall be nontransferable. The terms of any annuity contract purchased and distributed by the Plan to a Participant or spouse shall comply with the requirements of this Plan. The DROP shall be as follows: a police officer may retire for all purposes of the plan and defer receipt of retirement benefits into a DROP account while continuing employment with the City as follows, SheekNveugh passages are deleted. Underlined passages are added. 2006-0-34 12 1. Eli ibili An "eligible police officer" of the City of Edgewater, Florida Police Officers' Pension Fund, de£med m a police officer in Section 185 0201) of the Florida Statutes who has attained age fifty-five (55) and completed five (5) Years of Accrual Service or who has completed twenty (20) Years of Accrual Service shall have a five (5) year period to elect participation in the DROP On such election narticipation in the DROP shall commence on the first day of the month coincident with or next following such election, which date shall constitute the "initial date of eligibility". 2. Written Election of resignation effective no later than the conclusion of the maximum period of DROP participation. Election into DROP is irrevocable provided however, there is no minimum neriod of particination 3. Limitation/Disqualifications for Other Benefits An eligible police officer may elect to participate in the DROP only once After commencement of participation in DROP a police officer shall no longer eam accrue or purchase additional service credits towards retirement benefits and shall not be eligible le for Pre -retirement death benefits or later enhancements to the City of Edgewater Police Officers' Pension Plan, however shall remain eligible for disability benefits provided herein On election to participate in the DROP, an eligible police officer shall be given a thirty -(30) day period to elect one of the following options concerning the liquidation of accrued leave, Cil Convert total accmed leave to compensation ii Convert part of accrued leave to compensation and retain an accrued leave balance: iii Maintain total accrued leave balances. 4. Cessation or Reduction of Contributions Upon the effective date of an eligible police officer's participation in DROP all contributions by and on behalf of the police officer to the Plan shall be discontinued Sh mek-atreuglr passages are deleted. Underlined passages are added. 2006-0-34 13 5. Benefit Calculation For all plan purposes, service and vesting credits of an eligible police officer electing DROP shall be fixed w of the effective date of commencement of DROP participation. Any service as a police officer after entry into DROP shall not be used for calculation or determination of benefits payable by the Plan. The average fmal compensation of a participant, m defined in this Plan shall be determined as of the effective date of commencement of DROP participation and any subsequent eaminps shall not be used for calculation or determination of benefits ,payable by the Plan. 6. Benefit Credits to DROP Account a. Upon entry into DROP, the monthly retirement benefit which would have been payable had the police officer ceased employment and commenced receiving a nomral retirement benefit shall be credited to the police officer's DROP account on a monthly basis. No benefit credits from the Plan shall be made to a DROP account for more than the maximum period of DROP participation. IL No police officer shall receive a credit to the police officer's DROP account until the required DROP forms have been submitted including the police officer's irrevocable letter of resignation and the City has actually discontinued the police officer's contributions to the plan. 7. DROP Account Earnings Each DROP account shall be eligible to earn interest in accordance with the following method, which may be amended by the Board of Trustees periodicallk The DROP account shall earn interest equal to the actual earnings of the investments of the City of Ed@ewater Police Officers' Pension Plan, net of fees as determined by the actuary using the standard IRS formula for purposes of reporting the annual investment return on Schedule B (Form 5500). whether or not such form is actually required for this plan and less an administrative fee. (not to exceed one -quarter of one percent (.25%),) to be established annually on October 1" of each fiscal vem by the Board of Trustees 8. Maximum Period of Participation An eligible police officer may elect to participate in DROP for a maximum of sixty (60) months At the conclusion ofthe maximum period of DROP participation retirement benefit Shack 9nengh passages are deleted. Underlined passages are added. 2006-0-34 14 payments to the DROP account shall cease and the police officer's termination from employment with the City shall become effective pursuant to the irrevocable letter of resignation. 9. Administrative Fee for DROP Account An annual administrative fee, of not more than one -quarter of one percent (.25%). shall be charged on each October 1" for the administration and operation of a police officer's DROP account at a rate established by the Board of Trustees. In the case of a participant who separates from service after October 1". the administrative fee shall be paid on a prorated basis for the Dartial vem of participation. 10. Distribution of DROP Account a. Upon termination of a police officer's City employment, whether by retirement, resignation, discharge or death, no further benefit credits shall be made to the DROP account. b. All retirement benefits paid after termination of employment shall be made directly to the police officer, or in the case of death, in accordance with any survivorship option which the police officer elected c. Within sixty (60) days following the end of the month in which the police (30) days following the end of DROP participation and the election shall be irrevocable. Failure to elect a payment within the prescribed time s hall be deemed an election to receive payment of the entire DROP account balance in cash less required income tax withholding d. Notwithstanding the option selected by the police officer. the Board of Trustees reserves the right to accelerate payments to comply with the minimum distribution provisions of the Internal Revenue Code or to defer payments to comply with the maximum benefit provisions of the Internal Revenue Code 11. Disability of a DROP Participant If the City determines as provided under the worker compensation statutes of the State of Florida and the current collective bargaining agreement that a police officer has become unable to perform the duties of an Edgewater Police officer due to service or non -service 8 Hek d mugh passages are deleted. Underlined passages are added. 2006-0-34 15 related disability and terminates the employment of the police officer for this reason, the police officer shall be deemed to have retired on a disability retirement and shall be entitled to benefits provided in the Disability Benefits of this planDROP participation shall end effective on the date of such determination by the CiTy. Distribution of the DROP account balance shall be made in accordance with the provisions and requirements of this section in the manner elected by the police officer. 12. Death of a DROP Participant If a DROP participant dies the police officer shall be deemed to have retired upon entry into DROP and the balance in the DROP account shall be distributed in accordance with the distribution methodology (Paragraph 10 above) elected by the police officer, or if no such election has been made the police officer's designated beneficiary may elect the method of payment in accordance with the time and election requirements of Paragraph 10 above Survivorship benefits if any, shall be paid in accordance with the nolice officer's benefit elections upon entry into DROP 13. Forms All fonns and notices used in the administration of the DROP shall be prepared through joint cooceration between the Chy of Edgewater and the Board of Trustees Back DROP I. Eligibility; Duration of Back -DROP Election The Back -DROP shall be defined as a partial lump sum distribution with a forward annuity for the remainder of the lifetime of the participant available only to participants who have passed the initial DROP eligibility date as of the effective date of this ordinance This sub- section sets forth rights for participation in the Back -DROP 2. Participation in Back -DROP Participants who have attained Normal Retirement Date as of the effective date of the selected date of eligibility then in existence Any contributions paid by the eligible participant during the Back -DROP period not to exceed twenty-four (24) months shall be transferred to the participant's Back -DROP account The Back -DROP account shall be credited with interest equal to five percent ON annually from the selected date of Back - St uck di, ous' passages are deleted. Underlined passages are added. 20060-34 16 DROP initiation to the date ofthe participant's retirement resignation from employment with the City. In the case of a partial year's participation, interest shall prorated to achieve that applicable rate of interest set forth in this section on an annualized basis. Interest s hall be compounded annually. As part ofthe application process for Back -DROP- participants shall submit an irrevocable letter of retirement resignation to take effect immediately upon completion of the Back -DROP application process. Participants electing the Back -DROP shall also elect a distribution methodology of the Back -DROP account on the same basis as a DROP participant as provided in section (d)(10) herein ( c) The optional forms of death benefit are any annuity that is an optional form of retirement benefit. (d) Subject to the AUTOMATIC FORMS OF DISTRIBUTION SECTION of Article VI, joint and survivor annuity requirements, the requirements of this section shall apply to any distribution of a Participant's interest and will take precedence over any inconsistent provisions of this Plan. Unless otherwise specified, the provisions of this section apply to calendar years beginning after December 31, 1984. All distributions required under this section shall be determined and made in accordance with the proposed regulations under Code Section 401(a)(9), including the minimum distribution incidental benefit requirement of section 1. 04 1 (a)(9)-2 of the proposed regulations. (e) Required Beginning Date. The entire interest of a Participant must be distributed or begin to be distributed no later than the Participant's Required Beginning Date. (f) Limits on Distribution Periods. As of the first Distribution Calendar Year, distributions, if not made in a single sum, may only be made over one of the following periods (or combination thereof): (1) the life of the Participant, (2) the life of the Participant and a Designated Beneficiary, (3) a period certain not extending beyond the Life Expectancy of the Participant, or (4) a period certain not extending beyond the Joint and Last Survivor Expectancy of the Participant and a Designated Beneficiary. (g) Determination of amount to be distributed each year. (1) If the Participant's interest is to be paid in the form of annuity distributions under the Semek-aneegh passages are deleted. Underlined passages are added. 2006-0-34 17 Plan, payment under the annuity shall satisfy the following requirements: (i) the annuity distributions must be paid in periodic payments made at intervals not longer than one year; (ii) the distribution period must be over a life (or lives) or over a period certain not longer than a Life Expectancy (or Joint and Last Survivor Expectancy) described in Code Section 401(a)(9)(A)(ii) or Code Section 40 1 (a)(9)(B)(iii), whichever is applicable; (iii) the Life Expectancy (or Joint and Last Survivor Expectancy) for purposes of determining the period certain shall be determined without recalculation of Life Expectancy; (iv) once payments have began over a period certain, the period certain may not be lengthened even if the period certain is shorter than the maximum permitted; (v) payments must either be non -increasing or increase only as follows: (a) with any percentage increase in a specified and generally recognized cost -of -living index; (b) to the extent of the reduction to 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 described in (0 above dies and the payments continue otherwise in accordance with (f) above over the life ofthe Participant; ( c) to provide cash refunds of employees contributions upon the Participant's death; or (d) because of an increase in benefits under the Plan. (vi) if the annuity is a life annuity (or a life annuity with a period certain not exceeding 20 years), the amount which must be distributed on or before the Participant's Required Beginning Date (or, in the case of distributions after the death of the Participant, the date distributions are required to begin pursuant to (h) below) shall be the payment which is required for one payment 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 ShuckUnvogh passages are deleted. Underlined passages are added. 2006-0-34 18 year. Payment intervals are the period for which payments are received, e.g., bimonthly, monthly, semi-annually, or annually. If the annuity is a period certain annuity without a life contingency (or is a life annuity with a period certain exceeding 20 years) periodic payments for each Distribution Calendar Year shall be combined and treated as an annual amount. The amount which must be distributed by the Participant's Required Beginning Date (or, in the case of distributions after the death of the Participant, the date distributions are required to begin pursuant to (h) below) is the annual amount for the first Distribution Calendar Year. The annual amount for other Distribution Calendar Years, including the annual amount for the calendar year in which the Participant's Required Beginning Date (or the date distributions are required to begin pursuant to (h) below) occurs, must be distributed on or before December 31 of the calendar year for which the distribution is required. (2) Annuities purchased after December 31,1988, are subject to the following additional contributions: (i) Unless the Participant's spouse is the Designated Beneficiary, if the Participant's interest is being distributed in the form of a period certain annuity without a life contingency, the period certain as of the beginning of the first Distribution Calendar Year may not exceed the applicable period determined using the table set forth in Q&A A-5 of section 1.40 1 (a)(9)-2 of the proposed regulations. (ii) 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 nonspouse 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 A-6 of section 4.01(a)(9)-2 of the proposed regulations. (iii) Transitional rule. If payment under an annuity which complies with (1) above begins prior to January 1, 1989, the minimum distribution requirements in effect as of July 27, 1987, shall apply to distributions from this Plan, regardless of whether the annuity form of payment is irrevocable. This transitional rule also applies to deferred annuity contracts distributed to or owned by the employee prior to January 1, 1989, unless additional Shuck a tough passages are deleted. Underlined passages are added. 2006-0-34 19 contributions are made under the Plan by the Employer with respect to such contract. (iv) If the form of distribution is an annuity made in accordance with this (g), any additional benefits accruing to the Participant after his Required Beginning Date shall be distributed as a separate and identifiable component of the annuity beginning with the first payment interval ending in the calendar year in which such amount accrues. (v) Any part of the Participant's interest which is in the form of an individual account shall be distributed in a manner satisfying the requirements of Code Section 401(a)(9) and the proposed regulations thereunder. (h) Death Distribution Provisions. (1) Distribution beginning before death. If the Participant dies after distribution of his interest has begun, the remaining portion of such interest will continue to be distributed at least as rapidly as under the method of distribution begin used prior to the Participant's death. (2) Distribution beginning after death. If the Participant dies before the distribution of his interest begins, distribution of the Participant's entire interest shall be completed by December 31 of the calendar yew containing the fifth anniversary of the Participant's death except to the extent that an election is made to receive distributions in accordance with (i) or (ii) below: (i) If any portion of the Participant's interest is payable to a Designated Beneficiary, distributions may be made over the life or over a period certain not greater than the Life Expectancy of the Designated Beneficiary commencing on or before December 31 of the calendar year immediately following the calendar yew in which the Participant died; (ii) If the Designated Beneficiary is the Participant's surviving spouse, the date distributions are required to begin in accordance with (i) above shall not be earlier than the later of (a) December 31 of the calendar yew immediately following the calendar year in which the Participant died and (b) December 31 of the calendar year in which the Participant would have attained age 70 1/2. If the Participant has not made an election pursuant to this (2) by the time of his death, the Participant's Designated Beneficiary must elect the method of distribution Situck anwgh passages are deleted. Underlined passages are added. 2006-0-34 20 no later than the earlier of (a) December 31 of the calendar year in which distributions would be required to begin under this (h), or (b) December 31 of the calendar year which contains the fifth anniversary of the date of death of the Participant. If the Participant has no Designated Beneficiary, or if the Designated Beneficiary does not elect a method of distribution, distribution of the Participant's entire interest must be completed by December 31 of the calendar year containing the fifth anniversary of the Participant's death. (3) For purposes of (2) above, if the surviving spouse dies after the Participant, but before payments to such spouse begin, the provisions of (2) above, with the exception of (ii) therein, shall be applied as if the surviving spouse were the Participant. (4) For purposes of this (h), any amount paid to a child of the Participant will be treated as if it had been paid to the surviving spouse if the amount becomes payable to the surviving spouse when the child reaches the age of majority. (5) For the purpose of this (h), distribution of a Participant's interest is considered to begin on the Participant's Required Beginning Date (or, if (3) above is applicable, the date distribution is required to begin to the surviving spouse pursuant to (2) above). If distribution in the form of an annuity described in (g) above irrevocably commences to the Participant before the Required Beginning Date, the date distribution is considered to begin is the date distribution actually commences. PART C. FILING WITH THE DIVISION OF RETIREMENT Upon adoption, a copy of this Ordinance and modifications to the City of Edgewater Police Retirement Plan shall be filed with the Division of Retirement of the Florida Department of Management Services. PART D. CONFLICTING PROVISIONS. All conflicting ordinances and resolutions, or parts thereof in conflict with this ordinance, are hereby superseded by this ordinance to the extent of such conflict. PART E. SEVERABILITY AND APPLICABILITY. If any portion of this ordinance is for any reason held or declared to be unconstitutional, Shack d dough passages are deleted. Underlined passages are added. 2006-0-34 21 inoperative, or void, such holding shall not affect the remaining portions of this ordinance. If this ordinance or any provisions thereof shall be held to be inapplicable to any person, property, or circumstances, such holding shall not affect its applicability to any other person, property, or circumstance. PART F. EFFECTIVE DATE. This Ordinance shall take place upon adoption. PART G. ADOPTION. After Motion to approve by Councilwoman Rogers and Second by Councilman Vincenzi, the vote on the first reading of this ordinance held on November 6, 2006 is as follows: AYE NAY Mayor Mike Thomas X Councilman Debra Jean Rogers X Councilman Dennis Vincenzi X Councilwoman Harriet B. Rhodes X Councilwoman Judy Lichter X StrackMneugh passages are deleted. Underlined passages are added. 2006-0-34 22 O J After Motion to approve by Councilwoman Rhodes and Second by Councilwoman Lichter the vote on the second reading of this ordinance was as follows: AYE NAY Mayor Mike Thomas Absent Councilwoman Debra J. Rogers x Councilman Dennis Vincenzi x Councilwoman Harriet B. Rhodes x _ Councilwoman Judy Lichter x PASSED AND DULY ADOPTED this 4th day of December, 2006. For the use and reliance only by the City of Edgewater, Florida. Approved as to form and legality by: Paul E. Rosenthal, Esquire City Attorney Foley & Lardner, LLP Shuckrengh passages are deleted. Underlined passages are added. 2006-Od4 23 CITY COUNCIL OF THE CITY OF EDGEWATER, FLORIDA By: .Jp•�� nn:slrnce�a� v1Ce Mayor Robin L. Matusick Paralegal Approved by the City Council of the City of Edgewater at a meeting held on this 4th day of December, 2006 under Agenda Item No. 6 F.