Ordinance No. 58-14-38 v ORDINANCE NO. 58-14-38
AN ORDINANCE OF THE CITY OF ATLANTIC BEACH,
AMENDING CHAPTER 2, ADMINISTRATION, ARTICLE
VI, EMPLOYEE BENEFITS, DIVISION 3, GENERAL
EMPLOYEES' RETIREMENT SYSTEM,OF THE CODE OF
ORDINANCES OF THE CITY OF ATLANTIC BEACH;
AMENDING SECTION 2-268, DISABILITY; AMENDING
SECTION 2-274, MAXIMUM PENSION; PROVIDING FOR
CODIFICATION; PROVIDING FOR SEVERABILITY OF
PROVISIONS; REPEALING ALL ORDINANCES IN
CONFLICT HEREWITH AND PROVIDING AN
EFFECTIVE DATE.
BE IT ENACTED BY THE CITY COMMISSION ON BEHALF OF THE PEOPLE OF
THE CITY OF ATLANTIC BEACH, FLORIDA;
SECTION 1: That Chapter 2, Administration, Article VI, Employee Benefits, Division
3, General Employees' Retirement Plan, of the Code of Ordinances of the City of Atlantic Beach,
is hereby amended by amending Section 2-268, Disability, subsection (a), Disability benefits, to
read as follows:
* * * * *
(a) Disability benefits. Any member who has accrued five (5) or more years of credited
service, who shall become totally and permanently disabled to the extent that he is unable, by reason
of a medically determinable physical or mental impairment, to render useful and efficient service as a
general employee, shall, upon establishing the same to the satisfaction of the board, be entitled to a
monthly pension equal to two and eight-five one hundredths percent (2.85%) of his average final
compensation multiplied by the total years of credited service for members hired before April 24,
2005, and two and one-half percent (2.5%) of his average final compensation multiplied by the total
years of credited service for members hired on or after April 24, 2005. Terminated persons, either
vested or non-vested, are not eligible for disability benefits. Notwithstanding the previous sentence,
if a member is terminated by the City for medical reasons, the terminated person may apply for a
disability benefit if the application is filed with the board within ninety (90) days from the date of
termination. If a timely application is received, it shall be processed and the terminated person shall
be eligible to receive a disability benefit if the board otherwise determines that he is totally and
permanently disabled as provided for above.
* * * * *
SECTION 2: That Chapter 2, Administration, Article VI, Employee Benefits, Division 3,
General Employees' Retirement Plan, of the Code of Ordinances of the City of Atlantic Beach, is
hereby amended by amending Section 2-274, Maximum Pension, to read as follows:
Sec. 2-274. Maximum pension.
(a) Basic limitation. Notwithstanding any other provisions of this system to the contrary,
the member contributions paid to, and retirement benefits paid from, the system shall be limited to
such extent as may be necessary to conform to the requirements of IRC Section 415 for a qualified
retirement plan. Before January 1, 1995, a plan member may not receive an annual benefit that
exceeds the limits specified in IRC Section 415(b), subject to the applicable adjustments in that
section. On and after January 1, 1995, a plan member may not receive an annual benefit that exceeds
the dollar amount specified in IRC Section 415(b)(1)(A) ($160,000), subject to the applicable
adjustments in IRC Section 415(b) and subject to any additional limits that may be specified in this
System. For purposes of this section, "limitation year" shall be the calendar year.
For purposes of Code Section 415(b), the "annual benefit" means a benefit payable
annually in the form of a straight life annuity (with no ancillary benefits) without regard to the benefit
attributable to after-tax employee contributions (except pursuant to Code Section 415(n) and to
rollover contributions (as defined in Code Section 415(b)(2)(A)). The "benefit attributable" shall be
determined in accordance with Treasury Regulations.
(b) Adjustments to Basic Limitation for Form of Benefit. If the benefit under the plan is
other than the annual benefit described in subsection (a), then the benefit shall be adjusted so that it is
the equivalent of the annual benefit, using factors prescribed in Treasury Regulations. If the form of
the benefit without regard to any automatic benefit increase feature is not a straight life annuity or a
qualified joint and survivor annuity, then the preceding sentence is applied by either reducing the Code
Section 415(b) limit applicable at the annuity starting date or adjusting the form of benefit to an
actuarially equivalent amount (determined using the assumptions specified in Treasury Regulation
Section 1.415(b)-1(c)(2)(ii)) that takes into account the additional benefits under the form of benefit as
follows:
(1) For a benefit paid in a form to which IRC section 417(e)(3) does not apply (generally,
a monthly benefit), the actuarially equivalent straight life annuity benefit that is the
greater of:
a. The annual amount of the straight life annuity (if any) payable to the member
under the plan commencing at the same annuity starting date as the form of
benefit to the member, or
b. 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 member, computed using a 5 percent interest assumption
(or the applicable statutory interest assumption) and (i) for years prior to
January 1, 2009, the applicable mortality tables described in Treasury
Regulation Section 1.417(e)-1(d)(2) (Revenue Ruling 2001-62 or any
subsequent Revenue Ruling modifying the applicable provisions of Revenue
Rulings 2001-62), and (ii) for years after December 31, 2008, the applicable
mortality tables described in IRC section 417(e)(3)(B) (Notice 2008-85 or any
subsequent Internal Revenue Service guidance implementing IRC section
417(e)(3)(B)); or
(2) For a benefit paid in a form to which IRC section 417(e)(3) applies (generally, a lump
sum benefit), the actuarially equivalent straight life annuity benefit that is the greatest
of:
a. The annual amount of the straight life annuity commencing at the annuity
starting date that has the same actuarial present value as the particular form of
benefit payable, computed using the interest rate and mortality table, or tabular
factor, specified in the plan for actuarial experience;
b. The annual amount of the straight life annuity commencing at the annuity
starting date that has the same actuarial present value as the particular form of
benefit payable, computed using a 5.5 percent interest assumption (or the
applicable statutory interest assumption) and (i) for years prior to January 1,
2009, the applicable mortality tables for the distribution under Treasury
Regulation Section 1.417(e)-1(d)(2) (the mortality table specified in Revenue
Ruling 2001-62 or any subsequent Revenue Ruling modifying the applicable
provisions of Revenue Ruling 2001-62), and (ii) for years after December 31,
Ordinance No.58-14-38 -2- dm/ab/gen/04-09-14.ord
2008, the applicable mortality tables described in IRC section 417(e)(3)(B)
(Notice 2008-85 or any subsequent Internal Revenue Service guidance
implementing IRC section 417(e)(3)(B)); or
c. The annual amount of the straight life annuity commencing at the annuity
starting date that has the same actuarial present value as the particular form of
benefit payable (computed using the applicable interest rate for the distribution
under Treasury Regulation Section 1.417(e)-1(d)(3) (the 30-year Treasury rate
(prior to January 1, 2007, using the rate in effect for the month prior to
retirement, and on and after January 1, 2007, using the rate in effect for the
first day of the plan year with a one-year stabilization period)) and(i) for years
prior to January 1, 2009, the applicable mortality tables for the distribution
under Treasury Regulation Section 1.417(e)-1(d)(2) (the mortality table
specified in Revenue Ruling 2001-62 or any subsequent Revenue Ruling
modifying the applicable provisions of Revenue Ruling 2001-62), and (ii) for
years after December 31, 2008, the applicable mortality tables described in
IRC section 417(e)(3)(B) (Notice 2008-85 or any subsequent Internal Revenue
Service guidance implementing IRC section 417(e)(3)(B)), divided by 1.05.
(3) The actuary may adjust the 415(b) limit at the annuity starting date in accordance
with subsections (1)and (2)above.
(c) Benefits Not Taken into Account. For purposes of this Section, the following
benefits shall not be taken into account in applying these limits:
(1) Any ancillary benefit which is not directly related to retirement income benefits;
(2) Any other benefit not required under §415(b)(2) of the IRC and Regulations
thereunder to be taken into account for purposes of the limitation of IRC Section
415(b)(1); and
(3) That portion of any joint and survivor annuity that constitutes a qualified joint and
survivor annuity
(d) COLA Effect. Effective on and after January 1, 2003, for purposes of applying the
limits under IRC Section 415(b) (the "Limit"), the following will apply:
(1) A member's applicable limit will be applied to the member's annual benefit in the
member's first limitation year of benefit payments without regard to any automatic
cost of living adjustments;
(2) thereafter, in any subsequent limitation year, a member's annual benefit, including
any automatic cost of living increases, shall be tested under the then applicable
benefit limit including any adjustment to the IRC Section 415(b)(1)(A)dollar limit
under IRC Section 415(d), and the regulations thereunder; but
(3) in no event shall a member's benefit payable under the system in any limitation year
be greater than the limit applicable at the annuity starting date, as increased in
subsequent years pursuant to IRC Section 415(d) and the regulations thereunder.
Unless otherwise specified in the system, for purposes of applying the limits under IRC
Section 415(b), a Member's applicable limit will be applied taking into consideration cost of living
increases as required by Section 415(b) of the IRC and applicable Treasury Regulations.
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(e) Other Adjustments in Limitations.
(1) In the event the member's retirement benefits become payable before age sixty-two
(62), the limit prescribed by this section shall be reduced in accordance with
regulations issued by the Secretary of the Treasury pursuant to the provisions of IRC
Section 415(b) of the IRC, so that such limit (as so reduced) equals an annual straight
life benefit (when such retirement income benefit begins) which is equivalent to a one
hundred sixty thousand dollar ($160,000) annual benefit beginning at age sixty-two
(62).
(2) In the event the member's benefit is based on at least fifteen (15) years of credited
service as a full-time employee of the police department of the City, the adjustments
provided for in (e)(1) above shall not apply.
(3) The reductions provided for in (e)(1) above shall not be applicable to disability
benefits pursuant to Sec. 2-268, or pre-retirement death benefits paid pursuant to Sec.
2-267.
(4) In the event the member's retirement benefit becomes payable after age sixty-five (65),
for purposes of determining whether this benefit meets the limit set forth in subsection
(a) herein, such benefit shall be adjusted so that it is actuarially equivalent to the
benefit beginning at age sixty-five (65). This adjustment shall be made in accordance
with regulations promulgated by the Secretary of the Treasury or his delegate.
(f) Less than Ten (10) Years of Participation. The maximum retirement benefits payable
under this section to any member who has completed less than ten (10) years of participation with the
City shall be the amount determined under subsection (a) of this section multiplied by a fraction, the
numerator of which is the number of the member's years of participation and the denominator of which
is ten (10). The reduction provided by this subsection cannot reduce the maximum benefit below
10% of the limit determined without regard to this subsection. The reduction provided for in this
subsection shall not be applicable to pre-retirement disability benefits paid pursuant to Sec. 2-268, or
pre-retirement death benefits paid pursuant to Sec. 2-267.
(g) Participation m Other Defined Benefit Plans. The limit of this section with respect to
any member who at any time has been a member in any other defined benefit plan as defined in IRC
Section 414(j) maintained by the City shall apply as if the total benefits payable under all City defined
benefit plans in which the member has been a member were payable from one plan.
(h) Ten Thousand Dollar ($10,000) Limit; Less Than Ten Years of Service.
Notwithstanding anything in this section 2-274, the retirement benefit payable with respect to a
member shall be deemed not to exceed the limit set forth in this subsection (h) of section 2-274 if the
benefits payable, with respect to such member under this system and under all other qualified defined
benefit pension plans to which the City contributes, do not exceed ten thousand dollars ($10,000) for
the applicable limitation year and for any prior limitation year and the City has not any time
maintained a qualified defined contribution plan in which the member participated; provided,however,
that if the member has completed less than ten (10) years of credited service with the City, the limit
under this subsection (h) of section 2-274 shall be a reduced limit equal to ten thousand dollars
($10,000) multiplied by a fraction, the numerator of which is the number of the member's years of
credited service and the denominator of which is ten (10).
(i) Reduction of Benefits. Reduction of benefits and/or contributions to all plans, where
required, shall be accomplished by first reducing the member's benefit under any defined benefit plans
in which member participated, such reduction to be made first with respect to the plan in which
member most recently accrued benefits and thereafter in such priority as shall be determined by the
board and the plan administrator of such other plans, and next, by reducing or allocating excess
Ordinance No.58-14-38 -4- dm/ab/gen/04-09-14.ord
forfeitures for defined contribution plans in which the member participated, such reduction to be made
first with respect to the plan in which member most recently accrued benefits and thereafter in such
priority as shall be established by the board and the plan administrator for such other plans provided,
however, that necessary reductions may be made in a different manner and priority pursuant to the
agreement of the board and the plan administrator of all other plans covering such member.
(i) Service Credit Purchase Limits.
(1) Effective for permissive service credit contributions made in limitation years
beginning after December 31, 1997, if a member makes one or more contributions to
purchase permissive service credit under the system, as allowed in Sections 2-283, and
2-284, then the requirements of this section will be treated as met only if:
a. the requirements of IRC Section 415(b) are met, determined by treating the
accrued benefit derived from all such contributions as an annual benefit for
purposes of IRC Section 415(b), or
b. the requirements of IRC Section 415(c) are met, determined by treating all
such contributions as annual additions for purposes of IRC Section 415(c).
e For purposes of applying subparagraph (j)(1)a.-, the System will not fail to meet the
reduced limit under IRC Section 415(b)(2)(C) solely by reason of this subparagraph e,
and for purposes of applying subparagraph (j)(1)b. the System will not fail to meet the
percentage limitation under Section 415(c)(1)(B) of the IRC solely by reason of this
subparagraph e-.
(2) For purposes of this subsection the term "permissive service credit" means service
credit—
a. recognized by the system for purposes of calculating a member's benefit under
the plan,
b. which such member has not received under the plan, and
c. which such member may receive only by making a voluntary additional
contribution, in an amount determined under the system, which does not
exceed the amount necessary to fund the benefit attributable to such service
credit.
Effective for permissive service credit contributions made in limitation years
beginning after December 31, 1997, such term may, if otherwise provided by the
system, include service credit for periods for which there is no performance of service,
and, notwithstanding clause (j)(2)b., may include service credited in order to provide
an increased benefit for service credit which a member is receiving under the system.
(k) Contribution Limits.
(1) For purposes of applying the Code Section 415(c) limits which are incorporated
by reference and for purposes of this subsection(k), only and for no other purpose,
the definition of compensation where applicable will be compensation actually paid
or made available during a limitation year, except as noted below and as permitted
by Treasury Regulations Section 1.415(c)-2, or successor regulations. Unless
another definition of compensation that is permitted by Treasury Regulations
Section 1.415(c)-2, or successor regulation, is specified by the system,
Ordinance No.58-14-38 -5- dm/ab/gen/04-09-14.ord
compensation will be defined as wages within the meaning of IRC Section 34O1(a)
and all other payments of compensation to an employee by an employer for which
the employer is required to furnish the employee a written statement under IRC
Sections 6O41(d), 6O51(a)(3) and 6052 and will be determined without regard to
any rules under IRC Section 34O1(a)that limit the remuneration included in wages
based on the nature or location of the employment or the services performed (such
as the exception for agricultural labor in IRC Section 34O1(a)(2).
a. However, for limitation years beginning after December 31, 1997,
compensation will also include amounts that would otherwise be included
in compensation but for an election under IRC Sections 125(a), 4O2(e)(3),
4O2(h)(1)(B), 4O2(k), or 457(b). For limitation years beginning after
December 31, 2000, compensation will also include any elective amounts
that are not includible in the gross income of the employee by reason of IRC
Section 132(0(4).
b. For limitation years beginning on and after January 1, 2007, compensation
for the limitation year will also include compensation paid by the later of
21/2 months after an employee's severance from employment or the end of
the limitation year that includes the date of the employee's severance from
employment if:
1. the payment is regular compensation for services during the
employee's regular working hours, or compensation for services
outside the employee's regular working hours (such as overtime or
shift differential), commissions, bonuses or other similar payments,
and, absent a severance from employment, the payments would have
been paid to the employee while the employee continued in
employment with the employer; or
2. the payment is for unused accrued bona fide sick, vacation or other
leave that the employee would have been able to use if employment
had continued.
c. Back pay, within the meaning of Treasury Regulations Section
1.415(c)-2(g)(8), shall be treated as compensation for the limitation year to
which the back pay relates to the extent the back pay represents wages and
compensation that would otherwise be included under this definition.
(2) Notwithstanding any other provision of law to the contrary, the board may modify a
request by a member to make a contribution to the system if the amount of the
contribution would exceed the limits provided in IRC Section 415 by using the
following methods:
a. If the law requires a lump sum payment for the purchase of service credit, the
board may establish a periodic payment deduction plan for the member to
avoid a contribution in excess of the limits under IRC Sections 415(c) or
415(n).
b. If payment pursuant to subparagraph (k)(2)a. will not avoid a contribution in
excess of the limits imposed by IRC Section 415(c), the board may either
reduce the member's contribution to an amount within the limits of that section
or refuse the member's contribution.
Ordinance No.58-14-38 -6- dm/ab/gen/04-09-14.ord
(3) If the annual additions for any member for a limitation year exceed the limitation
under section 415(c) of the code, the excess annual addition will be corrected as
permitted under the Employee Plans Compliance Resolution System (or similar IRS
correction program).
(4) For limitation years beginning on or after January 1, 2009, a member's compensation
for purposes of this subsection (k) shall not exceed the annual limit under section
401(a)(17) of the code.
(1) Additional Limitation on Pension Benefits. Notwithstanding anything herein to the
contrary:
(1) The normal retirement benefit or pension payable to a retiree who becomes a member
of the system and who has not previously participated in such system, on or after
January 1, 1980, shall not exceed one hundred percent (100%) of his average final
compensation. However, nothing contained in this section shall apply to supplemen-
tal retirement benefits or to pension increases attributable to cost-of-living increases or
adjustments.
(2) No member of the system shall be allowed to receive a retirement benefit or pension
which is in part or in whole based upon any service with respect to which the member
is already receiving, or will receive in the future, a retirement benefit or pension from
a different employer's retirement system or plan. This restriction does not apply to
social security benefits or federal benefits under Chapter 67, Title 10, U.S. Code.
SECTION 3: Specific authority is hereby granted to codify and incorporate this Ordinance in
the existing Code of Ordinances of the City of Atlantic Beach.
SECTION 4: All Ordinances or parts of Ordinances in conflict herewith be and the same are
hereby repealed.
SECTION 5: If any section, subsection, sentence, clause, phrase of this ordinance, or the
particular application thereof shall be held invalid by any court, administrative agency, or other body
with appropriate jurisdiction, the remaining section, subsection, sentences, clauses, or phrases under
application shall not be affected thereby.
SECTION 6: That this Ordinance shall become effective upon its adoption.
Ordinance No.58-14-38 -7- dm/ab/gen/04-09-14.ord
PASSED ON FIRST READING, this 14th day of July 2014.
PASS D A201ND ADOPTED ON SECOND READING, this /H ` day of
4.
L,,,,,,, ,
2
Carolyn Woods
MAYOR
ATTEST:
'OrAdi
Donn L. Bartle, CMC
CITY CLERK
Approved as s lrm:
lie 4
Rich Komand. squire
CITY ATTORNEY
Ordinance No.58-14-38 -8- dm/ab/gen/04-09-14.ord