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HomeMy WebLinkAboutO-12202J-02-254 3/20/02 ORDINANCE NO. 2 2 - AN EMERGENCY ORDINANCE OF THE MIAMI CITY COMMISSION AMENDING CHAPTER 40/ ARTICLE IV/DIVISION 3, OF THE CODE OF THE CITY OF MIAMI, FLORIDA, AS AMENDED, ENTITLED "PERSONNEL/ PENSION AND RETIREMENT PLAN/CITY OF MIAMI GENERAL EMPLOYEES' AND SANITATION EMPLOYEES' RETIREMENT TRUST," TO PROVIDE THAT THE PROVISIONS OF THE CITY CODE ARE CONSISTENT WITH THE TERMS AND CONDITIONS OF A CERTAIN COLLECTIVE BARGAINING AGREEMENT; MORE PARTICULARLY BY AMENDING SECTIONS 40-241, 40-255, AND 40-256 OF SAID CODE; CONTAINING A REPEALER PROVISION AND A SEVERABILITY CLAUSE; PROVIDING FOR AN EFFECTIVE DATE. WHEREAS, the City of Miami and the A.F.S.C.M.E., Local 1907, collective bargaining agent for members in Local 1907 (general employees) have agreed to establish a Deferred Retirement Option Program, to include a Forward Deferred Retirement Option Program ("DROP") and a Benefit Actuarily Calculated Deferred Retirement Option Program, (BACDROP); NOW, THEREFORE, BE IT ORDAINED BY THE COMMISSION OF THE CITY OF MIAMI, FLORIDA: Section 1. The recitals and findings contained in the Preamble to this Ordinance are adopted by reference and incorporated as if fully set forth in this Section. 22, 02 Section 2. Chapter 40/Article IV/Division 3 of the Code of the City of Miami, Florida, as amended, entitled "PERSONNEL/PENSION AND RETIREMENT PLAN/CITY OF MIAMI GENERAL EMPLOYEES' AND SANITATION EMPLOYEES' RETIREMENT TRUST", is amended in the following particulars: J/ "Chapter 40 PERSONNEL Article IV. PENSION AND RETIREMENT PLAN DIVISION 3. CITY OF CITY OF MIAMI GENERAL EMPLOYEES' AND SANITATION EMPLOYEES' RETIREMENT TRUST Sec. 40-241. Definitions. RACDROP shall mean Benefit Actuarially Calculated Deferred Retirement Option Program. DROP shall mean Deferred Retirement Option Program and shall include a FORWARD DROP and a BACDROP. FORWARD DROP shall mean a Deferred Retirement Option Program where benefit is equal to the regular retirement benefit the member would have received had the member separated from service and commenced the receipt of benefits from the Plan. 1' Words and/or figures stricken through shall be deleted. Underscored words and/or figures shall be added. The remaining provisions are now in effect and remain unchanged. Asterisks indicate omitted and unchanged material. Page 2 of 9 Sec. 40-255. Benefits. (b) Early service retirement. (2) A member eligible for early service retirement may choose any of the optional allowances provided for in subsection 40- 255(i) of this Plan. (3) A member who has elected to retire on an early service retirement shall not be eligible to participate in DROP. (c) Vested right to retirement. (6) A member not in service shall not be eligible to participate in DROP. (d) Ordinary disability retirement. (9) A DROP member shall not be entitled to receive an ordinary disability retirement. (e) Service -incurred disability retirement. (12) A DROP participant shall not be entitled to receive a service incurred disability retirement. (f) Ordinary death benefit; post-retirement death benefits. (k) Deferred retirement option program. Effective upon ratification of the A.F.S.C.M.E., Local 1907, labor agreement for October 1, 2001 through September 30, 2004, the DROP of the Retirement Plan shall be available for general emplovees and Page 3 of 9 shall consist of a FORWARD DROP and a BACDROP. Any general employee who has reached age fifty- five (55) with ten (10) years of creditable service, or who has attained a combination of age plus years of creditable service equal to seventy (70), shall be eligible to participate in the DROP. (1) Election to participate. Upon election of participation in the DROP, by using forms and procedures as prescribed by the Board of Trustees, a member's creditable service, accrued benefits, and compensation calculation shall be frozen and shall be based on the member's average final compensation as the basis of calculating the DROP payment. Upon commencement of participation in the DROP, the member's contribution and the City contribution to the Retirement Plan for that member shall cease as the member will be earning no further service credit. The member shall not acquire additional pension credit for the purposes of the pension plan but may continue City employment for up to a maximum of thirty six (3 6 ) months. (2) Maximum participation. The maximum period of participation in the DROP, is thirty six (36) months. Once the maximum participation has been achieved, the participant must terminate employment. (3) Creation of individual account. For each general employee electing participation in the DROP, an individual account shall be created. (4) Earnings on DROP account. The Board of Trustees of the Retirement Plan shall establish, by administrative rule, a series of investment vehicles which may be chosen by participants in the DROP. Any losses incurred on account of the option selected by the participant shall not be made up by the City of Miami or the GESE trust fund, but any such loss shall be borne by the participant only. Upon participation in the DROP, the Page 4 of 9 12402 member shall make a selection of the earnings program on forms provided by the board. All interest shall be credited to the member's DROP account. (5) Distribution of DROP benefits. Upon conclusion of a period of participation in the DROP not to exceed the maximum set forth in subsection 2, the participant shall terminate employment. Upon termination of employment, a participant may receive payment from the DROP account in the following uiFtiiiT=k Z a) Lump sum distribution; or b) Periodic payments; or c) Rollover of the balance to another qualified Retirement Plan, IRA, or an Internal Revenue Code Section 457 Plan; or d) An annuit A participant may defer payment until the latest date authorized by Section 401(a)(9) of the Internal Revenue Code. (6) Drop participation shall not affect any other death or disability benefit provided to a member under federal law, state law, city ordinance, or any rights or benefits under any applicable collective bargaining agreement. (7) If a DROP participant dies before the DROP account balances are paid out in full, the person(s) designated by such DROP participant shall receive such DROP account balances in accordance with the DROP participant election in effect at the time of death. (8) Any employee who enters into a DROP agreement shall be bound by the terms and conditions of that agreement. 9) FORWARD DROP. The date of entry into the FORWARD DROP shall be the beginning of a Dav Page 5 of 9 12202 period. Payment shall be made by the Retirement Plan into the participant's DROP account in an amount equal to the regular monthly retirement benefit which the participant would have received had the participant separated from service and commenced the receipt of benefits from the Plan. The amount of the monthly benefit shall be determined based on the creditable service, average final compensation, and retirement option selected in accordance with Section 40-255 of this Code. Upon conclusion of a period of participation in the DROP not to exceed the maximum set forth in subsection 2, the participant shall terminate employment with the City of Miami. Election of a FORWARD Drop Program precludes participation in a BACDROP Program. (10) BACDROP. A general employee may elect to BACDROP to a date no further back than the date of the member's retirement eligibility date. The BACDROP period must be in 12 month increments, beginning at the start of a pay period, not to exceed 36 months. Participation in the BACDROP does not preclude participation in the FORWARD Drop program. The benefits for purpose of the BACDROP will then be actuarially calculated to be the equivalent to the benefit earned at the date of retirement. Said calculation will consist of the present value of benefits being equal to the actuarially reduced benefit, plus a lump sum with interest, as determined by the Retirement Plan's actuary. Participant contributions will not be returned for the period of time covered by the BACDROP Program. The lump sum as,calculated by the Retirement Plan's actuary will be based on the assumed investment return of the fund without discount for mortality and deposited into the newlv created DROP account. (kl) Reemployment of retirees. Should any retiree be reemployed by the city in any capacity as Page 6 of 9 12202 defined in this Plan, the benefits payable under this Plan shall be suspended during the period of re-employment. Upon termination of the period of re-employment with the city, benefits shall be automatically restored, as provided for in this Plan, on the first day of the month following the termination of re-employment. No additional vesting period shall be required. This section shall not apply to any employment other than with the city. Sec. 40-256. Cost -of -living allowance. (a) A cost of living (COLA) allowance shall be paid to beneficiaries of the Plan as follows: (3) COLA participation for DROP members. Eligibility for payments for cost of living adjustment (COLA) shall commence when a member has reached the first anniversary of retirement. When that occurs, the COLA shall be paid into the member's DROP account in monthly installments for the FORWARD DROP until a member has actually separated from employment from the City and in lump sum to the member's DROP account for the BACDROP member upon separation from employment. For the purpose of complying with Section H(2)(9) of the Second Amended Final Judgment in Gates, the employee's "Date of Retirement" shall be the date FORWARD DROP is entered or the date to which the member elects to RnrnRnp (-�3-4) The board shall administer COLA payments and COLA assets shall be deemed an integral part of the trust for which separate accounting is not required. Section 3. All ordinances or parts of ordinances insofar as they are inconsistent or in conflict with the provisions of this Ordinance are repealed. Page 7 of 9 2 Section 4. If any section, part of section, paragraph, clause, phrase or word of this Ordinance is declared invalid, the remaining provisions of this Ordinance shall not be affected. Section 5. This Ordinance is declared to be an emergency measure on the grounds of urgent public need for the preservation of peace, health, safety, and property of the City of Miami, and upon the further grounds of the necessity to make the required and necessary payments to its employees and officers, payment of its debts, necessary and required purchases of goods and supplies, and to generally carry on the functions and duties of municipal affairs. Section 6. For determination of pension benefits, the provisions of this Ordinance shall be effective on the retroactive dates set forth in the amendments contained herein. Section 7. This Ordinance shall become effective immediately upon its adoption and signature of the Mayor .2/ a/ If the Mayor does not sign this Ordinance, it shall become effective at the end of ten calendar days from the date it was passed and adopted. If the Mayor vetoes this Ordinance, it shall become effective immediately upon override of the veto by the City Commission. Page 8 of 9 22Pt` PASSED AND ADOPTED BY TITLE ONLY this 27th day of March , 2002. EST: YZA t., v A PRISCILLA A.-'TH(5MPSO CITY CLERK APPROVED AS T.4?' FOAM AND ALEJIAT�.le CITY W1236YLRC:egq:BSS RRECTNESS:tl- Page 9 of 9 MANUEL A. DIA;, YOR .220') TO FROM CITY OF MIAMI, FLORIDA INTER -OFFICE MEMORANDUM The Honorable Mayor and Members of the City Commission RECOMMENDATION DATE: March 20, 2002 FILE: SUBJECT: Amendments to Sections 40-241,40-255 and 40-256 of the City Code REFERENCES: ENCLOSURES: Emergency Ordinance The Administration recommends that the City Commission approve the attached Ordinance amending Sections 40-241, 40-255, and 40-256 of the City of Miami .Code by establishing a Deferred Retirement Option Program (DROP) for members participating in the General Employees' and Sanitation Employees' Retirement Trust. BACKGROUND In recently concluded contract negotiations the City of Miami and the AFSCME, Local 1.907 negotiated a three year labor agreement which provided for, in part, the establishment of a thirty-six (36) month Deferred Retirement Option Program (DROP). Under the DROP an employee may, upon Service or Rule of 70 retirement, elect to continue working for the City in their same classification and with the same benefits for up to a maximum of thirty- six (36) months. Upon commencement of participation in the DROP, the employee contribution and the City contribution to the GESE Trust shall cease as the employee will not earn any further service credit. The employee's regular monthly retirement benefit shall be placed into an individual defined contribution account providing for various investment vehicles established by the Board of Trustees of the Retirement System. Upon termination of employment from the City, the employee may receive payment from the DROP account. NATURE OF EMERGENCY ORDINANCE The amendments to Sections 40-241, 40-255, and 40-256 of the City of Miami Code are requested on an emergency basi ratification of the labor agreement Sections 40-241, 40-255, and agreements. CAG/RSW:rsw s as the new pension provisions are effective upon , which is expected to occur today. Delay of amending 40-256 would delay implementation of the labor C:\My Documenu\GESE and FIFO\CAG-MayorCComm-GESE-DROPOrd.doc .A"