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HomeMy WebLinkAboutO-13091Vop City of Miami F .. 19611F A111 *'Ir Legislation i 0 R �O Ordinance: 13091 File Number: 09-00951 City Hall 3500 Pan American Drive Miami, FL 33133 www.miamigov.com Final Action Date: 9/24/2009 AN ORDINANCE OF THE MIAMI CITY COMMISSION AMENDING CHAPTER 40/ARTICLE IV/DIVISION 2, OF THE CODE OF THE CITY OF MIAMI, FLORIDA, AS AMENDED, ENTITLED "CITY OF MIAMI FIREFIGHTERS' AND POLICE OFFICERS' RETIREMENT TRUST" TO AMEND THE ORDINANCE; MORE PARTICULARLY BY AMENDING SECTIONS 40-191, 40-196,40-200,40-202, 40-203, AND 40-205; THEREBY INCREASING FIREFIGHTERS' MEMBER CONTRIBUTIONS FROM EIGHT PERCENT TO NINE PERCENT AND CHANGING FIREFIGHTERS' RULE OF 64 TO THE RULE OF 68; CONTAINING A SEVERABILITY CLAUSE, AND PROVIDING FOR AN EFFECTIVE DATE. WHEREAS, Article 43.11 (Pension Stabilization) of the 2007-2010 Collective Bargaining Agreement ("CBA") between the City of Miami ("City") and International Association of Firefighters, Local 587 ("IAFF") provides for a long term stabilization goal for the City's general fund contribution; and WHEREAS, said goal is to maintain the City's contribution at 37 percent or less of pensionable payroll by September 30th of each year; and WHEREAS, Article 43.11 of the above -referenced CBA provides for a one percent increase in firefighters' member contributions, from eight percent to nine percent, and for the Rule of 64 to be changed to the Rule of 68 should the long term stabilization goal not be met by September 30, 2009; and WHEREAS, the actuaries for the City and FIPO Board determined that stabilization of the City of Miami Firefighters' and Police Officers' Retirement Trust ("FIPO") is not attainable as it relates to firefighters; NOW, THEREFORE, BE IT ORDAINED BY THE COMMISSION OF THE CITY OF MIAMI, FLORIDA: Section 1. Sections 40-191, 40-196, 40-200, 40-202, 40-203, and 40-205 of the Code of the City of Miami, Florida, as amended, is amended in the following particulars:{1} "Chapter 40 PERSONNEL ARTICLE IV. PENSION AND RETIREMENT PLAN City of Miand Page 1 of 7 File Id. 09-00951 (Version: 2) Printed On: 6/28/2017 File Number: 09-00951 Enactment Number: 13091 DIVISION 2. CITY OF MIAMI FIREFIGHTERS' AND POLICE OFFICERS' RETIREMENT TRUST Sec. 40-191. Definitions. Unless a different meaning is plainly required by the context, the following words and phrases as used in this division shall have the following meanings: Rule of 64 shall mean a computation consisting of the sum of a member's age and length of creditable service, which sum shall permit normal service retirement upon the member's combined age and creditable service equalling at least 64. The Rule of 64 shall apply to all police officer members. The Rule of 64 shall also aDDly to anv firefiahter member whose combined aae and lenath of creditable service is eaual to or areater than 64 on or before September 30. 2009. Rule of 68 shall mean a computation consisting of the sum of a member's age and length of creditable service, which sum shall permit normal service retirement upon the member's combined age and creditable service equaling at least 68. The Rule of 68 shall only apply to firefighter members whose combined aae and lenath of creditable service are less than 64 on September 30. 2009. Sec. 40-196. Contributions. (a) Member Contributions. (3)(A) Effective the first full pay period following June 16, 2009, and thereafter, regular contributions of each firefighter member of the retirement system shall be made at the rate of eight percent of each firefighter member's earnable compensation. (3)(B) Effective the first full pay period following June 16, 2009, should the firefighter member's contribution be less than eight percent, the difference between the eight percent and the actual contribution shall be deducted from the firefighter member's paycheck and placed into an individual contribution account (ICA), as part of the retirement system. ICA's shall be established as allowed by IRS Code. If it is found that the IRS Code does not allow for an individual account, the reduction in contribution shall be reflected in the member's paycheck. (4) (A) Effective the first full pay period following October 1, 2009, and thereafter, regular contributions of each firefighter member of the retirement system shall be made at the rate of nine percent of each firefighter member's earnable compensation. (4)(B) Effective the first full pay period following October 1, 2009, should the firefighter member's contribution be less than nine Dercent. the difference between the nine Dercent and City of Miand Page 2 of 7 File Id. 09-00951 (Version: 2) Printed On: 6/28/2017 File Number: 09-00951 Enactment Number: 13091 the actual contribution shall be deducted from the firefighter member's paycheck and placed into an individual contribution account (ICA), as part of the retirement system. ICA's shall be established as allowed by IRS Code. If it is found that the IRS Code does not allow for an individual account. the reduction in contribution shall be reflected in the member's Davcheck. {4)_LQ Individual Contribution Accounts. (A) Earnings. Interest on ICA's shall be determined in the same manner as the COLA transfer methodology. Interest shall be credited periodically to the ICA's as determined by the retirement system board's actuary, but not less than once a year. (B) Disbursements. Member contributions and earnings in ICA's shall be deemed 100 percent vested upon deposit. Upon the member's separation, ICA balances shall be disbursed as provided under the IRS Code. Disbursement of ICA funds may only occur upon separation or as mandated under the IRS Code Sec. 40-200. Transfer of city employees to retirement system. (c) Any member of the retirement system who transferred from the retirement plan may contribute to the retirement system an amount computed to be sufficient with the member's prospective regular contributions to make accumulated contributions at normal retirement age equal to the amount such accumulated contributions would have been had the member been a member of the retirement system during his or her entire period of service with the city. If such election is not made, upon service, early service, rule of 7-9- 64 or 68 or ordinary disability retirement, the member's retirement allowance shall be reduced by the actuarial equivalent of the amount by which accumulated contributions fall short of the full amount which would have been the member's accumulated contributions had he or she been a member of the retirement system during his or her entire period of service with the city. Any member who elects to make a contribution pursuant to this subsection, and who is granted disability retirement under the retirement system, shall have his or her disability retirement allowance reduced by the actuarial equivalent of the then unpaid amounts. Sec. 40-202. Paybacks for membership credit. Members shall have the right to receive membership credit in the retirement system in accordance with the following provisions: (6) Creditable service years purchase. a. Firefighter members. 1. A retiring firefighter member, including I.A.F.F. bargaining unit member, who does not participate in the DROP and retires under service retirement, or rule of 64 or 68 retirement, may purchase from available leave balances, whole years of creditable service up to a maximum of three years. The purchase of creditable service under this subsection may not be utilized for eligibility for either service City of Miand Page 3 of 7 File Id. 09-00951 (Version: 2) Printed On: 6/28/2017 File Number: 09-00951 Enactment Number: 13091 retirement, or rule of 64 or 68 retirement. Once the leave balances have been applied toward the purchase of whole years of creditable service, and the amount thereof actually paid to and received by the trust, the member may purchase the balance of the three years by a lump sum cash payment to the trust. Leave balances shall be determined in accordance with the applicable labor agreement and/or leave payoff practices. The cost of creditable service purchased shall be the prorata actuarially determined present value based upon the member's average final compensation used to determine the member's retirement benefit. This benefit shall be available using after tax value of the member's leave balance; if, in the future, the issue of income taxes is resolved, then it will be available using pre-tax value of the member's leave balances. Effective June 12, 2007, firefighter members and I.A.F.F. bargaining unit members, including those electing to participate in either the FORWARD DROP or BACDROP, may elect to transfer funds from their accounts in the Miami Firefighters' Relief and Pension Fund (175) to the trust to purchase the three years of creditable service referred to herein. Members may purchase three whole creditable service years by a lump sum payment of cash to the trust or a tax qualified transfer of funds from a member's 457 Deferred Compensation Plan at present value as actuarially determined for each individual member. In no case shall a firefighter member, including I.A.F.F. bargaining unit member, purchase more than three years of creditable service through any combination of the above provisions. No benefit provided under this subsection shall be effective unless and until full payment in accordance herewith is made. 2. Effective the full pay period following October 1, 2007 2009, the following provisions shall supersede the provisions of subsection a.1., and govern the purchase of creditable service by firefighter members, including, but not limited to, I.A.F.F. bargaining unit members: A. A retiring firefighter member, including, I.A.F.F. bargaining unit member, who does not participate in the DROP and retires under service retirement, or rule of 64 or 68 retirement, may purchase up to three whole years of creditable service utilizing the member's available leave balances, a tax qualified transfer of funds to the trust from the member's 457 Deferred Compensation Plan at present value as actuarially determined for the individual retiring member, lump sum payment of cash to the trust, or funds transferred to the trust from the member's account with the Miami Firefighters' Relief and Pension Fund (175). C. The following provisions shall apply to all purchases of creditable service under paragraphs a.2.A. and 2.B.: i. The purchase of creditable service shall be allowed only immediately prior to retirement. ii. The purchase of creditable service may not be utilized for eligibility for either service retirement, or rule of 64 or 68 retirement. Once the leave balances or the funds from the member's account with the Miami Firefighters' Relief and Pension Fund (175) or those from the member's 457 Deferred Compensation Plan have been applied toward the purchase of whole years of creditable service, and the amount thereof actually paid to and received by the trust, the member may purchase the balance of the three years by a lump sum cash payment to the trust. Leave balances shall be determined in accordance with the applicable labor agreement and/or leave payoff practices. The cost of creditable service purchased shall be the prorata actuarially determined present value based upon the member's average final compensation used to determine the member's retirement benefit. The use of leave balances shall be available using after tax value of the member's leave balance; if, in the future, the issue of income taxes is resolved, then it will be available using pre-tax value of the member's leave balances. In no case shall a member purchase more than three years of creditable service through any combination of the above provisions. No benefit provided under this subsection shall be effective unless and until full payment in accordance herewith is made. City of Miand Page 4 of 7 File Id. 09-00951 (Version: 2) Printed On: 6/28/2017 File Number: 09-00951 Enactment Number: 13091 Sec. 40-203. Benefits. (b) Rule of 64 or Rule of 68 retirement. (1) Any member in service who did not withdraw from active membership in the retirement system and retiring effective May 28, 1995, may elect service retirement on the basis of his or her combined age and creditable service equalling 64 or more provided that the member has reached minimum vesting requirements. Such election shall be made upon written application to the board no less than ten days nor more than 45 days from May 28, 1995. (2) Upon rule of 64 retirement, on or after May 28, 1995, a police officer member shall be entitled to receive a retirement allowance equal to 2.75 percent of the member's average final compensation multiplied by the years of creditable service for the first 15 years of such creditable service. Such member shall also be entitled to receive a retirement allowance equal to three percent of the member's final average compensation multiplied by the years of creditable service in excess of 15 years. Upon rule of 64 retirement, a firefighter member retiring on May 28, 1995, shall be entitled to receive a retirement allowance equal to three percent of the member's average final compensation multiplied by years of creditable service which amount shall be paid yearly in monthly installments. A member eligible for rule of 64 or Rule of 68 retirement may choose one of the optional allowances available to him or her on the date of retirement, as provided in subsection (m). (3) Upon rule of 64 retirement, on or after October 1, 1998, or upon the Rule of 68 retirement on or after October 1, 2009, a member shall be entitled to receive a retirement allowance equal to three percent of the member's average final compensation multiplied by years of creditable service for the first 15 years of such creditable service. Such member shall also be entitled to receive a retirement allowance equal to 3 1/2 percent of member's final average compensation multiplied by the years of creditable service in excess of 15 years, which amount shall be paid yearly in monthly installments. A member eligible for rule of 64 or Rule of 68 retirement may choose one of the optional allowances available to him or her on the date of retirement, as provided in subsection (m). (c) Limitation on benefits. (1) Effective October 1, 1998, member retirement allowances shall not exceed 100 percent of the member's final average compensation for members retiring under service retirement or rule of 64 retirement, and effective October 1, 2009 for Rule of 68 retirement with the following exceptions: a. Members whose retirement allowances, prior to October 1, 1998, who had already earned 100 percent or greater of the member's average final compensation shall continue to accrue pension benefits as outlined under section 40-203. b. Members whose retirement allowance exceeds 100 percent of their average final compensation as of October 1, 1998, due to the multiplier change, shall be capped at the new percentage. (2) Effective June 12, 2007, firefighter member, including, but not limited to, I.A.F.F. bargaining unit member, retirement allowances shall not exceed 100 percent of the member's final average compensation for firefighter members and I.A.F.F. bargaining unit members retiring under service retirement, of rule of 64 retirement or Rule of 68 retirement. City of Miand Page 5 of 7 File Id. 09-00951 (Version: 2) Printed On: 6/28/2017 File Number: 09-00951 Enactment Number: 13091 (m) Optional allowances. Option 6: Any member upon service, early service, er rule of 64 or Rule of 68 retirement may elect to receive benefits in one of the following three forms, in lieu of the retirement allowance otherwise payable to the member: (p) Deferred retirement option program. Effective October 1, 1995, there is hereby created the City Deferred Retirement Option Program (DROP) to be administered by the board of trustees. Only firefighters who have retired after reaching age 50 within ten years of creditable service or who have retired after reaching a combination of age plus years of creditable service equal to either 64 or 68 as applicable, and who elect to defer receipt of their retirement benefit into a DROP account shall be eligible to participate in the DROP. Effective upon the ratification of the Memorandum of Understanding of July 11, 2008 amending Article 43 of the 2007--2010 collective bargaining agreement with the IAFF, the maximum participation in the Forward DROP for firefighters shall be 54 full months. Effective upon the ratification of the Memorandum of Understanding of May 8, 2008 amending Article 39 of the 2007--2010 collective bargaining agreement with the FOP, the maximum participation in the Forward DROP for police officers who elect Forward DROP or are currently in Forward DROP shall be 84 full months. (q) Modified deferred retirement option program. Effective upon approval by the city commission of the F.O.P. and I.A.F.F. labor agreements for October 1, 1998, through September 30, 2001, the DROP of the retirement system shall consist of a Forward DROP and a BACDROP. Any member who has reached age 50 with ten years of creditable service, or who has attained a combination of age plus years of creditable service equal to either 64 or 68 as applicable, shall be eligible to participate in the DROP. Sec. 40-205. Adjustments in benefits. (1) Election of increased benefit of class A membership. 1. Any member may waive payment of the foregoing amount, in which case, upon service, early service, rule of 64, Rule of 68 or ordinary disability retirement, the member's retirement allowance shall be reduced by the actuarial equivalent of the amount by which accumulated contributions fall short of the full amount which would have been the member's accumulated contributions had he or she been a class A member or contributed at the increased rate during his or her entire period of membership in the Miami city employees' retirement system. City of Miand Page 6 of 7 File Id. 09-00951 (Version: 2) Printed On: 6/28/2017 File Number: 09-00951 Enactment Number: 13091 (2) Executive benefit. Any members who, on or before May 23, 1985, had a vested right to receive an additional retirement allowance equal to one percent of average final compensation under the provisions of the Miami city employees' retirement system, presently known as the City of Miami firefighters' and police officers' retirement trust, which benefit was set forth in former section 40-235(A)(3)(a) of this Code (repealed June 13, 1985), shall be entitled to such additional benefit upon service retirement, early service retirement, er "rule of 64" or Rule of 68 retirement pursuant to this division. A member shall be deemed to have a vested right if said member, on or before May 23, 1985, was serving in any of the capacities enumerated in former section 40-235(A)(3)(a) and thereafter continued to serve in such capacity uninterruptedly for a total combined period of not less than three years. Those members having such vested right may only continue to earn credit for such allowance up to a combined period of ten years' service. Section 2. 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 3. This Ordinance shall become effective immediately upon its adoption and signature of the Mayor. {2} Footnotes: {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. {2} 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. City of Miami Page 7 of 7 File Id. 09-00951 (Version: 2) Printed On: 6/28/2017