Commission Meeting Agenda Item

WHEREAS, the Town of Lady Lake police officers are presently provided pension benefits pursuant to Chapter 185, Florida Statutes, and Ordinances of the Town of Lady Lake; and

WHEREAS,the following proposed changes have been approved and recommended by the Board of Trustees of the plan.

NOW, THEREFORE, BE IT ORDAINED by the Town Commission of the Town of Lady Lake, Florida, as follows:

SECTION 1.  Chapter 10.5, Pensions and Retirement, Article III, Police Officer’s Retirement Trust Fund, of the Code of Ordinances of the Town of Lady Lake, is hereby amended by amending Section 10.5-35- Benefit amounts and eligibility, Section 10.5-38- Disability, Section 10.5-39- Vesting, Section 10.5-45- Maximum pension, Section 10.5-46- Minimum distribution of benefits, and the first paragraph of Sec. 10.5-59- Excess premium tax revenues; supplemental share account benefit, to read as follows:

Sec. 10.5-36 – Benefit amounts and eligibility

(1) Normal retirement date. A member's normal retirement date shall be the first day of the month coincident with, or next following the earlier of the attainment of age 55 and the completion of ten eight years of credited service or the completion of 20 25 years of credited service regardless of age. A member may retire on his normal retirement date or on the first day of any month thereafter, and each member shall become 100 percent vested in his accrued benefit on the member's normal retirement date. Normal retirement under the system is retirement from employment with the town on or after the normal retirement date.

(2) Normal retirement benefit. A member retiring hereunder on or after his normal retirement date shall receive a monthly benefit which shall commence on the first day of the month coincident with or next following his retirement and be continued thereafter during member's lifetime, ceasing upon death, but with 120 monthly payments guaranteed in any event. The monthly retirement benefit shall equal 3.3 percent of average final compensation, for each year of credited service earned prior to October 1, 2021, and shall equal 3.5 percent of average final compensation for each year of credited service on and after October 1, 2021. A member, excluding vested terminated persons, retiring hereunder on or after his normal retirement date shall also receive a supplemental benefit equal to $200.00 per month.

(3) Early retirement date. A member may retire on his early retirement date which shall be the first day of any month coincident with or next following the attainment of age 50 and the completion of eight ten years of credited service years. Early retirement under the system is retirement from employment with the town on or after the early retirement date and prior to the normal retirement date.

Sec. 10.5-38. – Disability

(1) Disability benefits in-line of duty. Any member 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 police officer, which disability was directly caused by the performance of his duty as a police officer, shall, upon establishing the same to the satisfaction of the board, be entitled to a monthly pension equal to 3.3 percent of his average final compensation multiplied by the total years of credited service for performance prior to October 1, 2021, and 3.5 percent of his average final compensation multiplied by the total years of credited service for performance on and after October 1, 2021, but in any event the minimum amount paid to the member shall be 42% of the average final compensation of the member. Terminated persons, either vested or nonvested, are not eligible for disability benefits, except that those terminated by the town for medical reasons may apply for a disability within 30 days after termination.

(3) Disability benefits not-in-line of duty. Any member with ten eight years or more 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 police officer, which disability is not directly caused by the performance of his duties as a police officer shall, upon establishing the same to the satisfaction of the board, be entitled to a monthly pension equal to 3.3 percent of his average final compensation multiplied by the total years of credited service for performance prior to October 1, 2021, and 3.5 percent of his average final compensation multiplied by the total years of credited service for performance on and after October 1, 2021. Terminated persons, either vested or nonvested, are not eligible for disability benefits, except that those terminated by the town for medical reasons may apply for a disability within 30 days after termination.

Sec. 10.5-39 Vesting.

If a member terminates his employment as a police officer after the effective date of this ordinance, either voluntarily or by discharge, and is not eligible for any other benefits under this system, the member shall be entitled to the following:

(1) If the member has less than ten eight  years credited service upon termination, the member shall be entitled to a refund of his accumulated contributions, or the member may leave it deposited with the fund.

(2) If the member has ten eight or more years of credited service upon termination, the member shall be entitled to a monthly retirement benefit, determined in the same manner as for normal or early retirement and based upon the member's credited service, average final compensation and the benefit accrual rate as of the date of termination, payable to him commencing at the member's otherwise normal or early retirement date, determined as if he had remained employed, provided he does not elect to withdraw his accumulated contributions and provided the member survives to his otherwise normal or early retirement date. If the member does not withdraw his accumulated contributions and does not survive to his otherwise normal or early retirement date, his designated beneficiary shall be entitled to a benefit as provided herein for a deceased member, vested or eligible for retirement under preretirement death.

Sec. 10.5-46.- Minimum distribution of benefits

(1) General rules.

(a) Effective date. Effective as of January 1, 1989, the plan will pay all benefits in accordance with a good faith interpretation of the requirements of Code Section 401(a)(9) and the regulations in effect under that section, as applicable to a governmental plan within the meaning of Code Section 414(d). Effective on and after January 1, 2003, the plan is also subject to the specific provisions contained in this section. The provisions of this section will apply for purposes of determining required minimum distributions for calendar years beginning with the 2003 calendar year.

(b) Precedence. The requirements of this section will take precedence over any inconsistent provisions of the plan.

(c) TEFRA Section 242(b)(2), Elections. Notwithstanding the other provisions of this section other than this subsection (1)(c), distributions may be made under a designation made before January 1, 1984, in accordance with Section 242(b)(2) of the Tax Equity and Fiscal Responsibility Act (TEFRA) and the provisions of the plan that related to Section 242(b)(2) of TEFRA.

(2) Time and manner of distribution.

(a) Required beginning date. The member's entire interest will be distributed, or begin to be distributed, to the member no later than the member's required beginning date which shall not be later than April 1 of the calendar year following the calendar year in which the member attains age 70½, 72, or the calendar year in which the member terminates employment with the town.

(b) Death of member before distributions begin. If the member dies before distributions begin, the member's entire interest will be distributed, or begin to be distributed no later than as follows:

1. If the member's surviving spouse is the member's sole designated beneficiary, then distributions to the surviving spouse will begin by December 31 of the calendar year immediately following the calendar year in which the member died, or by a date on or before December 31 of the calendar year in which the member would have attained age 70½, 72, if later, as the surviving spouse elects.
2. If the member's surviving spouse is not the member's sole designated beneficiary, then, distributions to the designated beneficiary will begin by December 31 of the calendar year immediately following the calendar year in which the member died.
3. If there is no designated beneficiary as of September 30 of the year following the year of the member's death, the member's entire interest will be distributed by December 31 of the calendar year containing the fifth anniversary of the member's death.
4. If the member's surviving spouse is the member's sole designated beneficiary and the surviving spouse dies after the member but before distributions to the surviving spouse begin, this subsection (2)(b), other than subsection (2)(b)1., will apply as if the surviving spouse were the member.

For purposes of this subsections (2)(b) and (5), distributions are considered to begin on the member's required beginning date or, if subsection (2)(b)4., applies, the date of distributions are required to begin to the surviving spouse under subsection (2)(b)1. If annuity payments irrevocably commence to the member before the member's required beginning date (or to the member's surviving spouse before the date distributions are required to begin to the surviving spouse under subsection (2)(b)1.), the date distributions are considered to begin is the date distributions commence.

(c) Death after distributions begin. If the member dies after the required distribution of benefits has begun, the remaining portion of the member's interest must be distributed at least as rapidly as under the method of distribution before the member's death.

(d) Form of distribution. Unless the member's interest is distributed in the form of an annuity purchased from an insurance company or in a single sum on or before the required beginning date, as of the first distribution calendar year distributions will be made in accordance with this section. If the member's interest is distributed in the form of an annuity purchased from an insurance company, distributions thereunder will be made in accordance with the requirements of Section 401(a)(9) of the code and Treasury regulations. Any part of the member's interest which is in the form of an individual account described in Section 414(k) of the code will be distributed in a manner satisfying the requirements of Section 401(a)(9) of the code and Treasury regulations that apply to individual accounts.

(3) Determination of amount to be distributed each year.

(a) General requirements. If the member's interest is paid in the form of annuity distributions under the plan, payments under the annuity will satisfy the following requirements:

1. The annuity distributions will be paid in periodic payments made at intervals not longer than one year.
2. The member's entire interest must be distributed pursuant to Section 10.5-36, Section 10.5-37, Section 10.5-39, or Section 10.5-40 (as applicable) and in any event over a period equal to or less than the member's life or the lives of the member and a designated beneficiary, or over a period not extending beyond the life expectancy of the member or of the member and a designated beneficiary. The life expectancy of the member, the member's spouse, or the member's beneficiary may not be recalculated after the initial determination for purposes of determining benefits.

(b) Amount required to be distributed by required beginning date. The amount that must be distributed on or before the member's required beginning date (or, if the member dies before distributions begin, the date distributions are required to begin under section 10.5-37) is the payment that 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 year. Payment intervals are the periods for which payments are received, e.g., monthly. All the member's benefit accruals as of the last day of the first distribution calendar year will be included in the calculation of the amount of the annuity payments for payment intervals ending on or after the member's required beginning date.

(c) Additional accruals after first distribution calendar year. Any additional benefits accruing to the member in a calendar year after the first distribution calendar year will be distributed beginning with the first payment interval ending in the calendar year immediately following the calendar year in which such amount accrues.

(4) General distribution rules.

(a) The amount of an annuity paid to a member's beneficiary may not exceed the maximum determined under the incidental death benefit requirement of Code Section 401(a)(9)(G), and effective for any annuity commencing on or after January 1, 2008, the minimum distribution incidental benefit rule under Treasury Regulation Section 1.401(a)(9)-6, Q&A-2.

(b) The death and disability benefits provided by the plan are limited by the incidental benefit rule set forth in Code Section 401(a)(9)(G) and Treasury Regulation Section 1.401-1(b)(1)(I) or any successor regulation thereto. As a result, the total death or disability benefits payable may not exceed 25 percent of the cost for all the members' benefits received from the retirement system.

(5) Definitions.

(a) Designated beneficiary. The individual who is designated as the beneficiary under the plan and is the designated beneficiary under Section 40l(a)(9) of the code and Section 1.401(a)(9)-1, Q&A-4, of the Treasury regulations.

(b) Distribution calendar year. A calendar year for which a minimum distribution is required. For distributions beginning before the member's death, the first distribution calendar year is the calendar year immediately preceding the calendar year which contains the member's required beginning date. For distributions beginning after the member's death, the first distribution calendar year is the calendar year in which distributions are required to begin pursuant to section 10.5-37.

Sec. 10.5-59. - Excess premium tax revenues; supplemental share account benefit.

There is hereby established an additional plan component to provide special benefits in the form of a supplemental retirement, termination, death and disability benefits to be in addition to the benefits provided for in the previous sections of this plan, such benefit to be funded solely and entirely by Chapter 185, Florida Statutes, premium tax monies for each plan year which are allocated to this supplemental defined contribution component for special benefits as provided for in Section 185.35, Florida Statutes. As of October 1, 2017, there is mutual consent of the members' collective bargaining representative and the municipality to use premium tax revenues in the manner described herein. Of the additional premium tax revenues received for the 2021 calendar year and each subsequent year that are in excess of $110,000.00, the amount received for the 2021 calendar year, 50 percent must be used to reduce any unfunded liabilities of the plan and 50 percent must be placed in a defined contribution plan component. If there is no unfunded actuarial accrued liability as of the most recent actuarial valuation report, then the 50 percent that was to be used to reduce any unfunded liabilities of the plan will be used to reduce the town's funding requirement for that year. Amounts allocated to this supplemental component ("share plan"), if any, shall be further allocated to the members as set forth herein.

SECTION 2.  Specific authority is hereby granted to codify and incorporate this Ordinance in the existing Code of Ordinances of the Town of Lady Lake, Florida.

SECTION 3.  All ordinances or parts of Ordinances in conflict herewith be and the same are hereby repealed.

SECTION 4.  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 5.  That this Ordinance shall become effective upon its adoption.

This Ordinance shall become effective upon its passage and adoption according to law.