Item 8F- General Employees' Pension OrdinanceORDINANCE NO.
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 2-261, DEFINITIONS; AMENDING
SECTION 2-264, FINANCES AND FUND MANAGEMENT;
AMENDING SECTION 2-266, BENEFIT AMOUNTS AND
ELIGIBILITY; AMENDING SECTION 2-274, MAXIMUM
PENSION; AMENDING SECTION 2-275, MINIMUM
DISTRffiUTION OFBENEFITS;AMENDINGSECTION 2-284,
PRIOR GOVERNMENT SERVICE; AMENDING SECTION 2-
285, REEMPLOYMENT AFTER RETIREMENT; AMENDING
SECTION 2-286, DEFERRED RETIREMENT OPTION PLAN;
PROVIDING FOR CODIFICATION; PROVIDING FOR
SEVERABILITY OF PROVISIONS; REPEALING ALL
ORDINANCES IN CONFLICTHEREWITHAND PROVIDING
AN EFFECTIVE DATE.
BE IT ORDAINED BY THE CITY COMMISSION OF THE CITY OF ATLANTIC
BEACH, FLORIDA;
SECTION 1: That Chapter 2, Administration, Article VI, Employee Benefits, Division 3,
General Employees' Retirement Plan, ofthe Code of Ordinances of the City of Atlantic Beach, is
hereby amended by amending Section 2-261, Definitions, to amend the definitions of "Actuarial
Equivalent", "Credited Service", ''Effective Date", and "Spouse", to read as follows:
* * * * *
Actuarial equivalent means a benefit or ammmt of equal value, based upon the RP-2000
Combined Healthy Unisex (50/50 mix) Male Generational Mortality Table projected by Scale AA,
and an interest rate of eight (8%) pet ammm egual to the investment return assmnption set forth in
the last actuarial valuation approved by the board. This definition may only be amended by the city
pursuant to the recommendation of the board using assumptions adopted by the board with the
advice of the plan's actuary, such that actuarial assumptions are not subject to city discretion
Credited Service means the total number of years and fi·actional pmts of years of service as
a general employee with member contnbutions, when required, omitting intervening years or
fractional pmts of years when such member was not employed by the city as a general employee.
If a vested member leaves the employ of the city, his accumulated contributions will be rettuned only
upon his w1itten request. If a member who is not vested is not reemployed as a general employee
with the city within five (5) years, his accumulated contributions, if one thousand dollars ($1 ,000.00)
or less, shall be rettuned. If a member who is not vested is not reemployed within five (5) years, his
accumulated contributions, if more than one-thousand dollars ($1,000.00), will be returned only
upon the written request of the member and upon completion of a written election to receive a cash
lump sum or to rollover the lmnp sum amount on forms designated by the board. Upon return of a
member's accumulated contributions, all of his rights and benefits under the system are forfuited and
terminated.
The years or pmts of a year that a member performs "Qualified Military Service" consisting
ofvoluntmy or involuntmy "service in the mriformed services" as defined in the Unifonned Services
Employment and Reemployment Rights Act (USERRA) (P.L.103-353), after separation fi·om
Agenda Item 8F
March 27, 2017
employment as a general employee to perform training or service, shall be added to his years of
credited service for all purposes, including vesting, provided that:
(1) The member is entitled to reemployment under the provisions ofUSERRA.
(2) The member returns to his employment as a general employee within the time frame
as allowed by USERRA following the earlier of the date of his military discharge or
his release fi·om service, unless otherwise required by USERRA.
(3) The member deposits into the fund the same sum that the member would have
contnbuted, if any, if he had remained a general employee during his absence. The
maximum credit for military service pursuant to this subdivision shall be five (5)
years. The member must deposit all missed contnbutions within a period equal to
three times the period of military service, but not more than five (5) years, following
re-employment or he will forfeit the right to receive credited service for his military
service pursuant to this paragraph.
(4) This paragraph is intended to satisfY the minimum requirements ofUSERRA. To the
extent that this paragraph does not meet the minimmn standards ofUSERRA, as it
may be amended from time to time, the minimum standards shall apply.
In the event a member dies on or after January 1, 2007, while perfonning USERRA Qualified
Military Service, the beneficiaries of the member are entitled to any benefits (other than benefit
accruals relating to the period of qualified military service) as if the member had resumed
employment and then died while employed.
Beginning January 1, 2009, to the extent required by IRC section 414(u)(12), an individual
receiving differential wage payments (as defined under IRC section 3401(h)(2)) from an employer
shall be treated as employed by that employer, and the differential wage payment shall be treated as
compensation for pmposes of applying the limits on annual additions under IRC section 415(c). This
provision shall be applied to all similarly situated individuals in a reasonably equivalent manner.
Leave conversions of unused accrued paid time off shall not be pemlitted to be applied
toward the accmal of credited service either during each plan year of a member's employment with
the City or in the plan year in which the member terminates employment.
Effective date means the date on ~>Vhiehthis ordinance becomes eftCetive June 10,2013.
* * * * *
Spouse means the la~>Vful ~>V:ifu or htlsband of a member or ret:itee member's or retiree's spouse
tmder applicable law at the tin1e benefits become payable.
* * * * *
SECTION 2: That Chapter 2, Administration, Alticle 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 2-264, Finances and Fund Management, subsection (f)(2)c.,
to read as follows:
(f)(2) c.
* * * * *
In addition, the board may, upon recommendation by the board's investment
consuhant, make investments in group trusts meeting the requirements of
Intemal Revenue Service Revenue Ruling 81-1 00,_ and Revenue Ruling 2011-
-2-
Agenda Item 8F
March 27, 2017
1, IRS Notice 2012-6 and Revenue Ruling 2014-24 or successor rulings or
guidance of similar import, and operated or maintained exclusively for the
commingling and collective investment of monies, provided that the funds in
the group trust consist exclusively of trust assets held under plans qualified
under IRC section 401(a), individual retirement accounts that are exempt
under IRC section 408(e), eligtble governmental plans that meet the
requirements of IRC section 457(b ), and governmental plans under IRC
section 401(a)(24). For this purpose, a trust includes a custodial account or
a separate tax fuvored account maintained by an insurance company that is
treated as a trust under IRC section 401(f) or under IRC section 457(g)(3).
While any portion of the assets of the fund are invested in such a gt·oup trust,
such gt·oup trust is itself adopted as a part of the system or plan
1. Any collective or conm1on group trust to which assets of the fund are
transferred pursuant to subsection c. shall be adopted by the board as
patt of the plan by executing appropriate participation, adoption
agreements, and/or tmst agreements with the group trust's trustee.
2. The separate account maintained by the group trust for the plan
pursuant to subsection c. shall not be used for, or diverted to, any
purpose other than for the exclusive benefit of the members and
beneficiaries of the plan.
3. For purposes of valuation, the value of the separate account
maintained by the group trust for the plan shall be the fuir market
value of the pmtion of the group trust held for the plan, determined
in accordance with generally recognized valuation procedures.
* * * * *
SECTION 3: 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 2-266, Benefit Amounts and Eligtbility, subsection (a),
N mmal Retirement Date, to read as follows:
* * * * *
(a) Normal retirement age and date. A member's normalretirement date shaH be the first
day of the month coincident with; or next fuHo wing the attairnnent of age sixty (60) and the
completion of five (5) years of credited set vice. A member may retire on h1s normalretirement date
or on the first day of any month thereafter, and each member shaH become one htm:dred percent
(1 00%) vested itt his accmed benefit on the member's normal retirement date. Notmal retirement
ttnder the system is retiremerrt :liom employment with the City on 01 after the nonnal retirernerrt date.
A member's normal retirement age is the attainment of age sixty (60) and the completion of five (5)
years of credited service. Each member shall become one hundred percent (100%) vested in his
accrued benefit at normal retirement age. A member's nmmal retirement date shall be the first day
of the month coincident with or next following the date the member retires fi·om the City after
attaining nmmal retirement age.
* * * * *
SECTION 4: That Chapter 2, Administration, Alticle 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, subsections (h), (1)(2), and by
adding subsection (m), to read as follows:
-3-
Agenda Item 8F
March 27, 2017
* * * * *
(h) Ten Thousand Dollar ($10,000) Limit; Less Than Ten Years of Service.
Notwithstanding anything in tills section 2-274, the retirement benefit payable with respect to a
member shall be deemed not to exceed the limit set forth in tills subsection (h) of section 2-274 if
the benefits payable, with respect to such member under tills system and under all other qualified
defined benefit pension plans to which the City contnbutes, do not exceed ten thousand dollars
($10,000) for the applicable limitation year and or for any prior limitation year,_ and the City has not
at any time maintained a qualified defined contribution plan in which the member participated;
provided, however, that if the member has completed less than ten (1 0) years of credited service with
the City, the limit under tills subsection (h) of section 2-274 shall be a reduced limit equal to ten
thousand dollars ($10,000) multiplied by a fraction, the mnnerator of which is the number of the
member's years of credited service and the denominator of which is ten (1 0).
* * * * *
(1)(2) No member ofthe 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 :ti'om a different employer's retirement system or plan. This restriction does
not apply to social security benefits or federal benefits under Chapter 69-1223, Title
10, U.S. Code.
1m) E(fect o(Direct Rollover on 415(b) Limit. If the plan accepts a direct rollover of an
employee's or former employee's benefit fi·om a defined contnbution plan qualified under Code
Section 401(a) which is maintained by the employer, any annuity resulting from the rollover amount
that is determined using a more fuvorable actuarial basis than required under Code Section 417(e)
shall be included in the annual benefit for pmposes of the limit under Code Section 415(b).
SECTION 5: 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 atnended by amending Section2-27 5, Minimum Distribution of Benefits, subsection (b )(2)d.,
to read as follows:
* * * * *
d. If the member's smviving spouse is the member's sole designated beneficiary
and the smviving spouse dies after the member but before distributions to the
surviving spouse begin, tills subsection (b )(2), other than subsection (b )(2)a.,
will apply as if the smviving spouse were the member.
For pmposes of tills subsection (b )(2). and snbseetion (e), distnbutions are
considered to begin on the member's required beginning date or, if subsection
(b )(2)d. applies, the date of distnbutions are required to begin to the surviving
spouse under subsection (b )(2)a. If annuity payments irrevocably commence
to the member before the member's required beginning date (or to the
member's sm'Viving spouse before the date distributions are required to begin
to the smviving spouse under subsection (b )(2 )a.) the date distributions are
considered to begin is the date distributions actually commence.
* * * * *
-4-
Agenda Item 8F
March 27, 2017
SECTION 6: 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 2-284, Prior Government Service, subsection (5), to read as
follows:
* * * * *
(5) In no event, however, may credited service be purchased pursuant to this Section for
prior service with any other governmental agency, if such prior service forms or will
form the basis of a retirement benefit or pension from a different employers'
retirement system or plan as set forth in Section 2-274, subsection~ .()}ill.
* * * * *
SECTION 7: Timt 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 2-285, Reemployment After Retirement, to read as follows:
Sec. 2-285. Reemployment after retirement.
(a) Any retiree who is retired under this system, except for disability retirement as
previously provided for, may be reemployed by any public or private employer, except the city, and
may receive compensation from tllat employment without limiting or restricting in any way the
retirement benefits payable under this system Reemployment by the city shall be subject to the
limitations set forth in this section.
(b) After normal retirement. Any retiree who is retired under normal retirement pursuant
to this system and who is reemployed by the city after that retirement shall be ineligible to participate
in this system and shall, during the period of such reemployment, continue to receive retirement
benefits previously earned if he is at least age sixty-two (62), otherwise the system shall discontinue
receipt ofbenefits until he reaches age sixtv-two (62) or terminates employment.
(c) After early retirement. Any retiree who is retired under early retirement pursuant to
this system and who subsequently becomes an employee of the city in any capacity shall be ineligible
to participate in this system and shall discontinue receipt of benefits fi·om the system Pension
benefit payments shall be suspended for the period of any such reemployment, but shall be restored
upon the earlier of termimtion of employment or such time as the reemployed retiree reaches the
date that he wottld have been eligible fur nonnal retirement tmder this system had he eontintted
employment and not elected early retnement age sixty-two (62). Retirement pursuant to an early
retirement incentive program shall be deemed early retirement for purposes of this section if the
member was permitted to retire prior to the customaty retirement date provided for in the system at
the time of retirement.
(d) Reemployment of terminated vested persons. Reemployed tenninated vested persons
shall not be subject to the provisions of this section until such time as they begin to actually receive
benefits. Upon receipt of benefits, termimted vested persons shall be treated as normal or early
retirees for purposes of applying the provisions of this section and their status as an early or normal
retiree shall be determined by the date they elect to begin to receive their benefit.
(e) DROP participants. Members or retirees who are or were in the defened retirement
option plan shall, following termination of employment after DROP participation sllall be subject
to the above restrictions.
-5-
Agenda Item 8F
March 27, 2017
SECTION 8: 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 2-286, Deferred Retirement Option Plan, to read as follows:
Sec. 2-286. Deferred retirement option plan.
(a) Definitions. As used in this Section 2-286, the following definitions apply:
(1) ''DROP" --The City of Atlantic Beach General Employees' Retirement System
Deferred Retirement Option Plan
(2) ''DROP Account" --The account established for each DROP participant under
subsection (c).
ill "Total return of the assets"--For pruposes of calculating earnings on a member's
DROP account pursuant to subsection (c)(2)b., for each fiscal year quarter, the
percentage increase (or decrease) in the interest and dividends earned on investments,
including realized and unrealized gains (or losses), of the total Plan assets.
(b) Participation.
(1) Eligibility to Participate. In lieu of terminating his employment as a general
employee, any member who is eligtble for normal or early retirement under the
system may elect to defer receipt of such service retirement pension and to participate
in the DROP.
(2) Election to Participate. A member's election to participate in the DROP must be
made in writing in a time and manner determined by the board and shall be effective
on the first day ofthe first calendar month which is at least fifteen (15) business days
after it is received by the board.
(3) Period of Participation. A member who elects to participate in the DROP under
subsection (b )(2), shall participate in the DROP for a period not to exceed sixty (60)
months beginning at the time his election to participate in the DROP first becomes
effective. An election to participate in the DROP shall constitute an in·evocable
election to resign from the service of the City not later than the date provided for in
the previous sentence. A member may participate only once.
(4) Termination of Participation.
a. A member's participation in the DROP shall cease at the earlier of
1. the end of his pem1issible period of participation in the DROP as
determined under subsection (b )(3); or
2. termination ofhis employment as a general employee.
b. Upon the member's temrination of participation in the DROP, pursuant to
subsection a. I. above, all amounts provided for in subsection (c)(2), including
monthly benefits and investment eamings and losses, shall cease to be
transferred from the system to his DROP Account. Any amounts remaining
in 11is DROP Account shall be paid to him in accordance with the provisions
of subsection (d) when he terminates employment as a general employee.
-6-
Agenda Item 8F
March 27, 2017
c. A member who terminates ills participation in the DROP under tills
subsection (b)( 4) shall not be permitted to again become a participant in the
DROP.
(5) Effect of DROP Participation on the System.
a. A member's credited service and ills accrued benefit under the system shall
be determined on the date ills election to participate in the DROP first
becomes effective. For purposes of determining the accrued benefit, the
member's salary for the purposes of calculating ills average final
compensation shall include an amount equal to any lump sum payments
which would have been paid to the member and included as salary as defined
herein, had the member retired under normal or early retirement and not
elected DROP participation. Member contnbutions attnbutable to any lun1p
sums used in the benefit calculation and not actually received by the member
shall be deducted from the first payments to the member's DROP Account.
The member shall not accrue any additional credited service or any additional
benefits under the system (except for any additional benefits provided under
any cost-o:f.living adjustment for retirees in the system) while he is a
patticipant in the DROP. After a member commences patticipation, he shall
not be permitted to again contnbute to the system nor shall he be eligtble for
disability or pre-retirement death benefits, except as provided for in Section
2-285, Reemployment After Retirement.
b. No amounts shall be paid to a member from the system while the member is
a participant in the DROP. Unless otherwise specified in the systetn, if a
member's pmticipation in the DROP is terminated other than by terminating
ills employment as a general employee, no amounts shall be paid to hint from
the system until he terminates his employment as a general employee. Unless
otherwise specified in the systetn, amounts transferred from the system to the
member's DROP Account shall be paid directly to the member only on the
termination ofills employment as a general employee.
(c) Funding.
(1) Establishment of DROP Account. A DROP Account shall be established for each
member patticipating in the DROP. A member's DROP Account shall consist of
amounts transfetred to the DROP under subsection (c)(2), and eamings or losses on
those amounts.
(2) Transfers From Retirement System.
a. As ofthe first day of each month of a member's period of participation in the
DROP, the monthly retirement benefit he would have received under the
system had he terminated his employment as a general employee and elected
to receive monthly benefit payments thereunder shall be transferred to ills
DROP Account, except as otherwise provided for in subsection (b)(4)b. A
member's period of participation in the DROP shall be determined in
accordance with the provisions of subsections (b)(3) and (b)(4), but in no
event shall it continue past the date he terminates ills employment as a
general en1ployee.
b. Except as otherwise provided in subsection (b)(4)b., a member's DROP
Account under tills subsection (c)(2) shall be debited or credited after each
fiscal ycat qttartet with eamings, to be credited or debited to the member's
-7-
Agenda Item 8F
March 27, 2017
DROP account, determined as of the last business day of each fiscal year
quarter and debited or credited as of such date, determined as follows:
The average daily balance in a member's DROP Account shall be credited or
debited at a rate equal to the net investment retrnn realized by the system for
that quarter. ''Net investment return" for the purpose ofthis paragraph is the
total return of the assets in which the Member's DROP Account is invested
by the board net of brokerage commissions, transaction costs and
management fees.
For purposes of calculating earnings on a member's DROP account pursuant
to this subsection (c)(2)b., brokerage commissions, transaction costs, and
management fees shall be determined for each quarter by the investment
consultant pursuant to contracts with fimd managers as reported in the
custodial statement. The investment consultant shall report these quarterly
contractual fees to the board. The investment consultant shall also report the
net investment return for each manager and the net investment retrnn for the
total plan assets.
c. A member's DROP Account shall only be credited or debited with earnings
or losses and monthly benefits while the member is a participant in the
DROP. A member's final DROP account value for distnbution to the
member upon termination ofparticipation in the DROP shall be the value of
the account at the end of the quarter immediately preceding termination of
participation plus any monthly periodic additions made to the DROP account
subsequent to the end of the previous quarter and prior to distnbution If a
Member mils to terminate employment after participating in the DROP for
the permissible period of DROP participation, then beginning with the
member's :first month of employment fOllowing the last month of the
permissible period of DROP participation, the member's DROP Account will
no longer be credited or debited with earnings or losses, nor will monthly
benefits be transferred to the DROP account. All such non-transferred
amounts shall be forfeited and continue to be forfeited while the member is
employed by the City. A member employed by the City after the permissible
period of DROP participation will still not be eligtble for pre-retirement death
and disability benefits, and will not accrue additional Credited Service except
as provided for in Section M86 2-285, Reemployment After Retirement.
(d) Distribution of DROP Accounts on Termination of Employment.
(1) Eligibility for Benefits. A member shall receive the balance in his DROP Account
in accordance with the provisions of this subsection (d) upon his termination of
employment as a general employee. Except as provided in subsection (d)(5), no
amounts shall be paid to a member :fi'Om the DROP p1ior to his termination of
employment as a general employee.
(2) Form of Distribution.
a. Unless the member elects otherwise, distribution of his DROP Account shall
be made in a lrnnp sum, subject to the direct rollover provisions set forth in
subsection (d)(6). Elections under this paragt·aph shall be in writing and shall
be made in such time or manner as the board shall determine.
b. Notwithstanding the preceding, if a member dies before his benefit is paid,
his DROP Account shall be paid to his bene:ficimy in such optional form as
his beneficiary may select. If no beneficiary designation is made, the DROP
Account shall be distnbuted to the member's estate.
-8-
Agenda Item 8F
March 27, 2017
(3) Date of Payment of Distribution. Except as otherwise provided in this subsection
(d), distribution of a member's DROP Account shall be made as soon as
administratively practicable following the member's termination of employment.
Distribution of the amount in a member's DROP account will not be made unless the
member completes a written request for distribution and a written election, on form;
designated by the board, to either receive a cash lump sum or a rollover of the lump
sum amount.
(4) Proof of Death and Right of Beneficiary or Other Person. The board may require
and rely upon such proof of death and such evidence of the right of any beneficiary
or other person to receive the value of a deceased member's DROP Account as the
board may deem proper and its detennination of the right of that beneficiary or other
person to receive payment shall be conclusive.
(5) Distribution Limitation. Notwithstanding any other provision of subsection (d), all
distributions from the DROP shall confmm to the ''Minimum Distribution Of
Benefits" provisions as provided for herein.
(6) Direct Rollover of Certain Distributions. This subsection applies to distnbutions
made on or after January 1, 2002. Notwithstanding any provision ofthe DROP to the
contrary, a distributee may elect to have any portion of an eligtble rollover
distribution paid in a direct rollover as othe1wise provided under the System in
Section 2-281.
(e) Administration of DROP.
(1) Board Administers the DROP. The general administration of the DROP, the
responsibility for carrying out the provisions of the DROP and the responsibility of
overseeing the investment of the DROP's assets shall be placed in the board. The
members of the board may appoint from their number such subcommittees with such
powers as they shall determine; may adopt such administrative procedures and
regtllations as they deem desirable for the conduct of their a:ffitirs; may authorize one
or more of their number or any agent to execute or deliver any instrument or make
any payment on their behalf; may retain counsel, employ agents and provide for such
clerical, accounting, actuarial and consulting services as they may require in carrying
out the provisions of the DROP; and may allocate among themselves or delegate to
other persons all or such pmtion of their duties under the DROP, other than those
granted to them as trustee under any oust agreement adopted for use in implementing
the DROP, as they, in their sole discretion, shall decide. A trustee shall not vote on
any question relating exclusively to hinlself
(2) Individual Accounts, Records and Reports. The board shall maintain records
showing the operation and condition of the DROP, including records showing the
individual balances in each member's DROP Account, and the board shall keep in
convenient form such data as may be necessary for the valuation of the assets and
liabilities of the DROP. The board shall prepare and distribute to members
participating in the DROP and other individuals or file with the appropriate
governmental agencies, as the case may be, all necessary desc1iptions, reports,
information returns, and data required to be distributed or filed for the DROP
pursuant to the IRC and any other applicable laws.
(3) Establishment of Rules. Subject to the limitations of the DROP, the board fi·om time
to time shall establish rules for the adminisn·ation of the DROP and the transaction
of its business. The Board shall have discretionmy authority to construe and interpret
the DROP (including but not linllted to determination of an individuafs eligtbility for
DROP participation, the 1ight and amount of any benefit payable tmder the DROP
and the date on which any individual ceases to be a participant in the DROP). The
-9-
Agenda Item 8F
March 27, 2017
determination of the board as to the interpretation of the DROP or its determination
of any disputed questions shall be conclusive and final to the extent permitted by
applicable law.
(4) Limitation of Liability.
a. The trustees shall not incur any liability individually or on behalf of any other
individuals for any act or :fuilure to act, made in good :fuith in relation to the
DROP or the fimds ofthe DROP.
b. Neither the board nor any trustee of the board shall be responsible for any
reports furnished by any expert retained or employed by the board, but they
shall be entitled to rely thereon as well as on certificates furnished by an
accountant or an actuary, and on all opinions of counsel The board shall be
fully protected with respect to any action taken or suffered by it in good :fuith
in reliance upon such expert, accountant, actuary or counseL and all actions
taken or suffered in such reliance shall be conclusive upon any person with
any interest in the DROP.
(f) General Provisions.
ill The DROP is not a separate retirement plan. fustead, it is a program under which
a member who is eligtble for normal retirement under the system may elect to accrue
future retirement benefits in the manner provided in this Section 2-286 for the
remainder of his employment, rather than in the normal manner provided under the
plan. Upon termination of employment, a member is entitled to a lump sum
distnbution ofhis or her DROP account balance or may elect a rollover. The DROP
account distnbution is in addition to the member's monthly benefit.
ill Notional account. The DROP account established for such a member is a notional
account, used only for the purpose of calculation of the DROP distnbution amount.
It is not a separate account in the system There is no change in the system's assets,
and there is no distribution available to the member until the member's termination
from the DROP. The member has no control over the investment of the DROP
account.
ill No emplover discretion. The DROP benefit is determined pursuant to a specific
formula which does not involve employer discretion.
ffi IRC limit. The DROP account distnbution, along with other benefits payable from
the system, is subject to limitation under futernal Revenue Code Section 415(b ).
(t 2) Amendment of DROP. The DROP may be amended by an ordinance of the City at
any tin1e and fi·om time to time, and retroactively if deemed necessary or appropriate,
to amend in whole or in part any or all of the provisions of the DROP. However,
except as otherwise provided by law, no amendment shall make it possible for any
patt of the DROP's funds to be used for, or diverted to, purposes other than for the
exclusive benefit of persons entitled to benefits under the DROP. No amendment
shall be made which has the effect of decreasing the balance of the DROP Account
of any member.
(Z. §.) Facility of Payment. If a member or other person entitled to a benefit under the
DROP is unable to care for his affuirs because of illness or accident or is a minor, the
board shall direct that any benefit due him shall be made only to a duly appointed
legal representative. Any payment so made shall be a complete discharge of the
liabilities of the DROP for that benefit.
-10-
Agenda Item 8F
March 27, 2017
(3-1) !Jiformation. Each member, beneficiary or other person entitled to a benefit, before
any benefit shall be payable to him or on his account under the DROP, shall :file with
the Board the information that it shall require to establish his rights and benefits
under the DROP.
(4 ~) Prevention of Escheat. Ifthe board cannot ascertain the whereabouts of any person
to whom a payment is due under the DROP, the Board may, no earlier than three (3)
years from the date such payment is due, mail a notice of such due and owing
payment to the last known address of such person, as shown on the records of the
board or the City. If such person has not made written claim therefor within three (3)
months of the date of the mailing, the board may, if it so elects and upon receiving
advice from counsel to the system, direct that such payment and all remaining
payments otherwise due such person be canceled on the records of the system Upon
such cancellation, the system shall have no further liability therefor except that, in the
event such person or his beneficimy later notifies the board of his whereabouts and
requests the payment or payments due to him under the DROP, the amount so applied
shall be paid to him in accordance with the provisions ofthe DROP.
(52.) Written Elections, Notification.
a. Any elections, notifications or designations made by a member pursuant to
the provisions ofthe DROP shall be made in writing and :filed with the board
in a time and manner detennined by the board under rules unifonnly
applicable to all employees similarly situated. The board reserves the right
to change from time to time the manner for making notifications, elections
or designations by members under the DROP if it detennines after due
dehberation that such action is justified in that it improves the administration
of the DROP. In the event of a conflict between the provisions for making
an election, notification or designation set forth in the DROP and such new
administrative procedures, those new administrative procedures shall prevail
b. Each member or retiree who has a DROP Account shall be responsible for
fumishing the Board with his current address and any subsequent changes in
his address. Any notice required to be given to a member or retiree hereunder
shall be deemed given if directed to him at the last such address given to the
board and mailed by registered or certified United States mail. If any check
mailed by registered or certified United States mail to such address is
rettuned, mailing of checks, advices and direct deposit of funds will be
suspended until such time as the member or retiree notifies the board of his
address.
(6 10) Benefits Not Guaranteed. All benefits payable to a Member from the DROP shall
be paid only from the assets of the member's DROP Account and neither the City nor
the board shall have any duty or liability to furnish the DROP with any funds,
securities or other assets except to the extent required by any applicable law.
(9-ll) Construction.
a. The DROP shall be construed, regulated and administered under the laws of
Florida, except where other applicable law conhuls.
b. The titles and headings of the subsections in this Section 2-286 are for
convenience only. In the case of ambiguity or inconsistency, the text rather
than the titles or headings shall conh·ol
(8 12) Fmfeiture of Retirement Benefits. Nothing in this Section shall be construed to
remove DROP participants from the application of any forfeiture provisions
-11-
Agenda Item 8F
March 27, 2017
applicable to the system DROP participants shall be subject to forfeiture of all
retirement benefits, including DROP benefits.
(9 .U.) Effect of DROP Participation on Employment. Participation in the DROP is not a
guarantee of employment and DROP participants shall be subject to the same
employment standards and policies that are applicable to employees who are not
DROP participants.
SECTION 9: Specific authority is hereby granted to codifY and incorporate this Ordinance
in the existing Code of Ordinances of the City of Atlantic Beach.
SECTION 10: All Ordinances or parts of Ordinances in conflict herewith be and the same
are hereby repealed.
SECTION 11: 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 approp1iate jurisdiction, the remaining section, subsection, sentences, clauses, or phrases under
application shall not be affected thereby.
SECTION 12: That this Ordinance shall become effective upon its adoption
PASSED ON FIRST READING, this ___ day of _____ , 2017.
PASSED AND ADOPTED ON SECOND READING, this
-------' 2017.
MAYOR
ATTEST:
CITY CLERK
Approved as to form:
CITY ATTORNEY
dnvab/gen/Ol-12-17.ord
-12-
day of
Agenda Item 8F
March 27, 2017
GRS
February 6, 2017
Gabri el Ro eder Smith & Co mp any
Cons ulta nt s & Ac tu a ri es
Mr. Russell Caffey
Plan Administrator
O n e Ea r Browa rd Bl vd.
Su ire 505
Fr. La ud e rd a le, FL 33301 -1 804
City of Atlantic Beach General Employees' Retirement System
800 Seminole Road
Atlantic Beach, Florida 32233-5445
RE: City of Atlantic Beach General Employees' Retirement System
Actuarial Impact Statement
Dear Russell:
954 .52 7 .16 16 ph one
954 . ~25.0083 fax
w ww.ga b r iclrocdc r.com
As requested by Scott Christiansen in his letter of May 2, 2016, please find enclosed an Actuarial
Impact Statement for the proposed ordinance (also enclosed). We have reviewed the proposed
ordinance from an actuarial perspective. We were not requested to, nor did we review the ordinance
from a legal or compliance perspective. The proposed ordinance would amend the City of Atlantic
Beach General Employees' Retirement System as follows:
• Amend Section 2-261, Definitions, for IRC changes and requirements, to amend the
definitions of:
a. Actuarial Equivalent -to refer to the investment return used in the last actuarial
valuation approved by the board and to specify the mmtality table unisex mix
b. Credited Service -to clarify IRC regulations on leave conversions
c. Effective Date-to clearly state the effective date of the plan
d. Spouse -To clarify the definition in accordance with a recent US Supreme Com1 ruling
• Amend Section 2-264, Finances and Fund Management, to further incorporate recent IRC
requirements with regard to investments in commingled funds.
• Amend Section 2-266, Benefit amounts and eligibility, to clarify the Normal Retirement
Date to include IRC required language regarding Normal Retirement Age and Normal
Retirement Date.
• Amend Section 2-274, Maximum Pension, to comply with IRC changes.
• Amend Section 2-275, Minimum Distribution of Benefits, for a reference clarification in
subsection (b )(2)d.
• Amend Section 2-284, Prior Government Service, subsection (5), to correct a reference.
• Amend Section 2-285, Reemployment After Retirement, to clearly reflect recent IRC
guidance on the ability to continue to receive retirement benefits from the system upon
reemployment after normal or early retirement.
• Amend Section 2-286, Deferred Retirement Option Plan, in accordance with recent direction
from the IRS in connection with the issuance of several recent Favorable Determination
Letters to i) clarify investment returns on DROP accounts, ii) clarify when earnings are
calculated and paid, and iii) add several sections clarifying the DROP provisions as required
by the IRS.
Agenda Item 8F
March 27, 2017
Mr. Russell Caffey
February 6, 2017
Page 2
It is our understanding that the purpose of this ordinance is to conform with IRS regulations and/or
to clarify the definitions above. We have determined that the plan provisions in the ordinance
would have no significant measurable cost effect to the plan benefits .
Please sign the Actuarial Impact Statement as the Plan Administrator and f01ward the original, and
one copy, along with a copy of the ordinance to the address below. Please file the Actuarial Impact
statement prior to the second reading.
Division of Retirement
Bureau of Local Retirement Systems
Post Office Box 9000
Tallahassee, Florida 32315-9000
If you should have any questions , please give us a call.
Sincerely,
Piotr Krekora, ASA, MAAA
Consultant & Actuary
Enclosure
cc: Mr. Scott R. Christiansen
Gabriel Roeder Smith & Company
Agenda Item 8F
March 27, 2017