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Home My WebLink AboutCity of Tamarac Ordinance O-2012-004Temp. Ord. 2242 January 11, 2012 Page 1 of 5 CITY OF TAMARAC, FLORIDA ORDINANCE NO. 0-2012- AN ORDINANCE OF THE CITY COMMISSION OF THE CITY OF TAMARAC, FLORIDA; AMENDING CHAPTER 16, PENSIONS AND RETIREMENT, ARTICLE III, PENSION PLAN, AMENDING THE DEFINITION OF AVERAGE FINAL COMPENSATION TO EXCLUDE OVERTIME IN EXCESS OF 300 HOURS AND PAYMENTS FOR ACCRUED, UNUSED LEAVE ON OR AFTER NOVEMBER 9, 2011; AMENDING SECTION 16-198 (a), (b), AND (c) TO LOWER THE INTEREST PAID ON RETURNS OF EMPLOYEE CONTRIBUTIONS FROM 5 PERCENT TO 2.5 PERCENT; PROVIDING FOR A SAVINGS CLAUSE; PROVIDING FOR SEVERABILITY; PROVIDING FOR CODIFICATION AND PROVIDING FOR AN EFFECTIVE DATE. WHEREAS, the 2011 Florida Legislature enacted Chapter 2011-216, Law of Florida, which mandates certain amendments to the City's Employees' Pension Trust Fund; and WHEREAS, an amendment to the City Code is necessary to permit such new obligations and conditions, and WHEREAS, the City proposes to change the interest rate paid on returns of employee contributions, and WHEREAS, the trustees of the City of Tamarac Employees' Pension Trust Fund has reviewed the proposed changes, and CODING: Words in StFUGk thFeug4 type are deletions from existing law; Words in underscore type are additions Temp. Ord. 2242 January 11, 2012 Page 2 of 5 WHEREAS, the City Commission has received, reviewed and considered an actuarial impact statement describing the actual impact of the amendments provided for herein, attached as Exhibit 1; and WHEREAS, the City Commission of the City of Tamarac has deemed it to be in the best interest of the citizens of the City of Tamarac to amend the plan to reflect these changes. NOW THEREFORE, BE IT ORDAINED by the City Commission of the City of Tamarac, Florida: Section 1: That the foregoing whereas clauses are hereby ratified and confirmed as being true and correct and are hereby made a specific part of this Ordinance upon adoption hereof. Section 2: That Section 16-126 of Chapter 16, Article III, Division 1, of the City of Tamarac Code of Ordinances, be and is hereby amended as follows: Sec. 16-126. Definitions. Average final compensation means one -twelfth of the average annual compensation, defined as total cash remuneration paid for services rendered to the city, of the five (5) highest years of service prior to the employee's normal retirement date or prior to the employee's voluntary discontinuance of participation in the plan. Average final compensation CODING: Words in stFuGk thFeag# type are deletions from existing law; Words in underscore type are additions 1 Temp. Ord. 2242 January 11, 2012 Page 3 of 5 shall exclude overtime earned on or after November 9 2011 in excess of 300 hours per calendar year. Average final compensation shall also exclude_ _payments for unused, accrued vacation and sick leave hours earned on or after November 9, 2011. For the purpose of applying the limitations set forth in Sections 401(a)(17) and 415 of the Internal Revenue Code, earnings shall include any elective deferral (as defined in Code Section 402(g)(3) of the Internal Revenue Code), and any amount which is contributed or deferred by the employer at the election of the Member and which is not includible in the gross income of the Member by reason of Section 125 or 457 of the Internal Revenue Code. For limitation years beginning on and after January 1, 2001, for the purposes of applying the limitations described in Subsection (a) of Section 16-234 hereof, compensation paid or made available during such limitation years shall include elective amounts that are not includible in the gross income of the Member by reason of Section 132(f)(4) of the Internal Revenue Code. Section 3: That Section 16-198, Refund of Contributions, of Chapter 16, Article III, Division 3, of the City of Tamarac Code of Ordinances, be and is hereby amended as follows: Sec. 16-198. Refund of Contributions. (a) A participant who is not vested and suffers a break in service shall receive a refund of the participant's accumulated contributions plus interest at the rate of five (5) percent per annum. For credited service accrued on or after January 1. 2012. interest shall be applied at the rate of two and one-half (2.5) percent per annum. (b) A participant who is vested and suffers a break in service may elect to receive a refund of the participant's accumulated contributions plus interest, in accordance with section 16-198(a), in lieu of any other benefits from this plan. If a participant accepts such a refund '> of accumulated contributions plus interest, no other benefits shall » be due or payable from the plan to the participant. CODING: Words in stFUGk thFeagh type are deletions from existing law; Words in underscore type are additions Temp. Ord. 2242 January 11, 2012 Page 4of5 (c) A participant who elects or is required to participate in the defined benefit pension plan established by the city's Elected and Appointed Officer's and Non -Represented Employees Retirement Plan may, in lieu of receiving any benefits from this pension plan, direct that the participant's accumulated contributions plus interest in accordance with section 16-198(a) ,+ +ho ante of five (5) peFGen be paid directly to the defined benefit pension plan established by the city's Elected and Appointed Officer's and Non -Represented Employee's Retirement Plan in a direct roll over pursuant to section 16-149(c.) Section 4: It is the intention of the City Commission and it is hereby ordained that the provisions of this Ordinance shall become and be made part of the Code of Ordinances of the City of Tamarac, Florida, and that the Sections of this Ordinance may be renumbered or relettered, and the word "Ordinance" may be changed to "Section", "Article" or such other word or phrase in order to accomplish such intention. Section 5: All Ordinances or parts of Ordinances in conflict herewith are hereby repealed to the extent of such conflict. Section 6: If any provision of this Ordinance or the application thereof to any person or circumstances is held invalid, such invalidity shall not affect other provisions or applications of this Ordinance that can be given affect without the invalid provision or application, and to this end the provisions of this Ordinance are declared to be severable. CODING: Words in stFuskheugh type are deletions from existing law; Words in underscore type are additions 1 �i Temp. Ord. 2242 January 11, 2012 Page 5 of 5 Section 7: This Ordinance shall become effective on adoption. PASSED, FIRST READING this PASSED, SECOND READING th ATTEST: EAF"-, ma'; ,'A W�Maac'-'mm Mi, _ Is] :4 AA WN INA CITY CLERK I HEREBY CERTIFY that I have approved this ORDINANCE as to form. FAMLLA t3UbHNLLL MAYOR RECORD OF COMMISSION VOTE: 1st Reading MAYOR BUSHNELL DIST 1: COMM. SWENSON DIST 2: COMM. GOMEZ DIST 3: V/M GLASSER DIST 4: COMM. DRESSLER RECORD OF COMMISSION VOTE: 2nd Reading MAYOR BUSHNELL DIST 1: COMM. SWENSON DIST 2: COMM. GOMEZ DIST 3: V/M GLASSER /,' DIST 4: COMM. DRESSLER CODING: Words in stFUGk thmuo type are deletions from existing law; Words in underscore type are additions EXHIBIT I _= SOUTURN _= ACTUARIAL SERVICES January'_5, 2012 Trustees of the City of Tamarac Employees' Pension Fund c/o :ifs. EliLabeth Bush National Employee Benefits Administrators. Inc. 2010 N.W°. I iolh Avenue, Suite 100 Pembroke Pines. FL 33028 Re: City of Tamarac Employees' Pension Plan Ladies and Gentlemen: pol I Jwa Box 8663tI3 rltp - Jj j_ti3� ttwfl(* 7)v.3y.0gbu AA`W» tl)ihiPV(TuAkItLAOM In response to your request. I have reviewed Temporary Ordinance 2212. This ordinance eliminates overtime in excess of 00 hours per year after November S. 201 I, excludes unused sick and annual leave accrued after November 8. 2011 from plan compensation. and reduces the interest rate credited to employee contributions from 5.0M/( per annum to 2.50% per annum effective January 1. 2012. I have enclosed the impact statement for the ordinance. Please have the statement signed by the pension board chair. Then the impact statement should he submitted to the Division of Retirement. State of Florida. along with a copy of the ordinance. If you have any questions, please do not hesitate to call me. Sincerely. Charles T. Carr COIIsUhin!? Actuary Enclosure as Stated 01} likI%1 ) �:`k tilk�1 11 a1 th!'F�H_ I i � K: Nt`, CITY OF TAMARAC EMPLOYEES' PENSION PLAN IMPACT STATEMENT FOR TEMPORARY ORDINANCE 2242 PART ONE: CERTIFICATION OF THE PLAN ADMINISTRATOR I have enclosed a copy of Temporary Ordinance 2242 of the City of Tamarac, which ordinance makes the following changes to the. City of Tamarac Employees' Pension Plan: (1) Plan compensation it -ill no longer include overtirne in excess of'300 hours pet- rear earned after Noveneber 8, 2011 and pawnents _for unused annual and sick leave that accrete after - that date: and (2) The rate of interest that is credited to acculnulated eniplol-ee contributions has been reduced,from .001,Ic per annuin to '. iOcc per annrune ttfective JanuarY 1, 2012. The plan's enrolled actuary. Charles T. Carr of Southern Actuarial Services Company, Inc., was provided with a copy of the proposed ordinance. In addition, the described plan change meets the requirements of Part V Il. Chapter 112. Florida :Statutes, and Section 14. Article X of the State Constitution. Chair, Board of Trustees PART TWO: CERTIFICATION OF THE ENROLLED ACTUARY Chapter 112 require, disclosure of the effect of changes in assumptions. methods. and plan provisions on certain liabilities. I have determined the impact of Temporary Ordinance 2242 based on the results of the October 1. 2011 actuarial valuation. except that the assumed increase in future salaries has been reduced from 5.00% per year to 4.00% per year and a loading has been added to average final compensation to account for payments of accrued unused leave. The loadin<* is 3.0017t for benefit determinations during the period October 1. 2011 through September 30. 2016. 2.251,'1 for benefit determinations during the period October 1. 2016 through September 30. 2021. 1.501T, for benefit determinations during the period October 1. 2021 through September 30, 2026. 0.75 e for benefit determinations during the period October 1. 2026 through September 30. 20'I and zero for benefit determinations thereafter. The ordinance decreases the annual contribution required from the City by 0.94% of payroll. As of October 1. 2011. the decrease in annual cost is ``;74.124. The following table sets forth the required disclosures in connection with the plan changes which have been described above: City- trj Tamarac Ennplovees' Pension Plan hrmact Statement fir Ternnoran- Ordinance 2 242 f continued As of As of October 1, 2011 October 1, 2011 (Old Plan Provisions) (New Plan Provisions) Present value of future expected benefit payments: for active participants retirement benefits S 24.693,909 $ 23.668.878 termination benefits 1.533,066 1.513,381 di.sabiliry bennefit.c 1,542939 1.482.062 death bencfrts 285,446 275.758 return of contributions 81,965 80.311 S 28.137.325 sub -total S 27.020.390 for tern unated %ested participants S 1,480,482 S 1.480.482 for retired participants and beneficiaries retired father than disab.) S, benel, S 13.188.364 S 13.188,364 disabled retirees 623.009 623.009 S 13.811.373 sub -total S 13,811.373 S 43,429.1_,.-- total 42 3 12 145 Fntry age nortnal accrued liability: for active participants retirementbenefitc S 17.281.938 S 17.053.315 te"nimntion henefitc 1.099,498 1,104.241 disability benefits 1.044,208 1,027.368 death benefits 192,370 191.075 return of coniribunon's 49,435 48,975 S 19.667.449 sub tntirl S 19,424.974 for inactive participants S 15.291,855 S 15,291.855 S— 14959p,304 total S 14,716, (27,593.467) Actuarial value of assets (27.593.467) .- 7 36 S1Z S 7,123.362 Unfunded accrued liabilit%� S 29.796.418 Actuarial present value of accrued benefit, S 30.191.682 Present value of active participants': Future salaries S 47 296.3 33 S 44.492.415 Future contributions S 3.310.745 S 3.114.469 Present value of future contributions from the employer (including expense loading) S 13.1 16.172 S 12.160A64 Total annual compensation (201 1/12 FY) S 6,41 1,284 S 0.350,227 Minimum required contribution (2011112 FY): Annual normal cost (incl. expenses) S 1.410944 S 1.353.462 Unfunded liability amortization prat. 542.190 523928 Interest adjustment 55,859 53,205 Expected employee contribution (448.790) (444,516) S 1,56Q.203 til486.U79 Total 24.34°Ic 23.40e9i As a percentage of payroll City of Tamarac F_mplcrcees' Pension Plan Lrzpact Statement farTemporary Ordinance 2242 (continued This actuarial valuation and/or cost determination was prepared and completed by me or under my direct supervision and 1 acknowledge responsibility for the results. To the best of my knowledge. the results are complete and accurate and. in my opinion. the techniques and assumptions used are reasonable and meet the requirements and intent of Part VII. Chapter 112. Florida Statutes. There is no benefit or expense to be provided by the plan and/or paid from the plan's assets for which liabilities or current costs have not been established or otherwise taken into account in the valuation. All known events or trends which may require a material increase in plan costs or required contribution rates have been taken into account in the valuation. Respectfully submitted. Charles T. Carr. A.S.A. Consulting Actuary Enrolled Actuary No. 11-04927 Date signed