Ordinance 07-2017 Retirement ORDINANCE NO. 07-2017
AN ORDINANCE OF THE TOWN COUNCIL OF THE TOWN OF PALM
BEACH,PALM BEACH COUNTY,FLORIDA,AMENDING CHAPTER 82
OF THE TOWN CODE OF ORDINANCES RELATING TO PERSONNEL,
AT ARTICLE II, EMPLOYEE BENEFITS, DIVISION 2, RETIREMENT
SYSTEM; AMENDING SUBDIVISION I, IN GENERAL, BY AMENDING
SECTION 82-80, RESERVE FOR MEMBER CONTRIBUTIONS;
AMENDING SECTION 82-134; RETIREMENT AGE AND SERVICE
CONDITIONS FOR BENEFIT GROUP GENERAL AND BENEFIT GROUP
LIFEGUARD, AMENDING SECTION 80-135, AMOUNT OF PENSION
FOR BENEFIT GROUP GENERAL AND BENEFIT GROUP LIFEGUARD;
AMENDING SECTION 82-139, DEFERRED RETIREMENT OPTION
PROGRAM FOR MEMBERS OF BENEFIT GROUP GENERAL AND
BENEFIT GROUP LIFEGUARD; PROVIDING FOR SEVERABILITY;
PROVIDING FOR REPEAL OF ORDINANCES IN CONFLICT;
PROVIDING FOR CODIFICATION; PROVIDING AN EFFECTIVE
DATE.
BE IT ORDAINED BY THE TOWN COUNCIL OF THE TOWN OF PALM BEACH,
PALM BEACH COUNTY,FLORIDA,AS FOLLOWS:
Section 1. The Code of Ordinances of the Town of Palm Beach is hereby amended at
Chapter 82,Personnel;Article II, Employee Benefits;Division 2,Retirement System; Subdivision
I, In General; Section 82-80,to read as follows:
Sec. 82-80. - Reserve for member contributions.
* * *
(f) Notwithstanding the provisions of subsection(c)above,effective the first full pay period after
May 1, 2017 the member contribution rate for benefit group general and benefit group
lifeguard members who were employed but did not attain normal retirement eligibility based
on credited service as of May 1, 2012, and for benefit group general and benefit group
lifeguard members hired on or after May 1, 2012, shall be 3.5%of compensation.
(g) The individual responsible for preparing the town payroll shall cause the contributions
provided for in subsection (b) of this section to be deducted from the compensation of each
member on each payroll. The deducted contributions shall be paid to the retirement system
and shall be credited to the member's individual accounts in the reserve for member
contributions. Member's contributions shall be made notwithstanding that the minimum
compensation provided by law for any member shall be changed thereby. Every member shall
be deemed to consent and agree to the deductions made and provided herein. Payment of
compensation, less the deduction, shall be a full and complete discharge and acquittance of
all claims and demands whatsoever for services rendered by the member during the period
covered by such payment, except as to benefits provided by the retirement system.
00753288-1 Ordinance No.07-2017 Page 1 of 7
(h) The accumulated contributions of a member shall be transferred from the reserve for member
contributions to the reserve for retired benefit payments upon a member's retirement or death.
At the expiration of a period of four years from the date an individual without entitlement to
a vested termination pension provided in section 82-94, 82-114, or 82-134 ceases to be a
member, any balance in the reserve for member contributions unclaimed by the individual or
the individual's legal representative shall be transferred to the reserve for undistributed
investment income. Provided, however, that a former firefighter member or a former police
officer member may voluntarily leave his or her contributions in the fund for a period of five
years after leaving the employ of the town, pending the possibility of being rehired by the
same department, without losing credit for the time he or she has participated actively as a
member. If such former member is not re-employed as such with the same department within
five years, his or her contributions shall be returned without interest.
Section 2. The Code of Ordinances of the Town of Palm Beach is hereby amended at
Chapter 82,Personnel;Article II,Employee Benefits;Division 2,Retirement System; Subdivision
V, General Employees and Lifeguards; Section 82-134,to read as follows:
Sec. 82-134. - Retirement age and service conditions for benefit group general and benefit group
lifeguard.
* *
(b) The age and service conditions for normal retirement are as follows:
(1) Benefit group general.
a. Normal retirement.
1. Members who attained normal retirement eligibility based on credited service as
of May 1,2012, excluding credited service purchased pursuant to section 82-54,
and who were employed by the town and not participating in the DROP on that
date, shall be eligible for normal retirement upon attaining age 55 with ten or
more years of credited service, or 30 or more years of credited service without
regard to age.
2. Members who did not attain normal retirement eligibility based on credited
service as of May 1, 2012, excluding credited service purchased pursuant to
section 82-54, and who were employed by the town and not participating in the
DROP on that date, shall be eligible for normal retirement upon attaining age
55, or 30 or more years of credited service without regard to age, and upon such
retirement shall be eligible to receive the frozen accrued benefit based on
credited service and average final compensation on April 30, 2012. Such
members shall be eligible to receive the accrued benefit based on credited
service on and after May 1, 2012 upon attaining age 65 with ten or more years
of credited service. Effective May 1, 2017, such members shall be eligible to
receive the accrued benefit based on credited service on and after May 1, 2012
upon attaining age 62 with ten or more years of credited service. The preceding
sentence shall apply to members who are participating in the DROP on May
00753288-1 Ordinance No.07-2017 Page 2 of 7
2017, and to members who retire or enter the DROP on or after that date, but
shall not apply to members who retired or separated from employment before
May 1, 2017.
3. Members hired on or after May 1, 2012, shall be eligible for normal retirement
upon attaining age 62 with ten or more years of credited service.
(2) Benefit group lifeguard.
a. Members who attained normal retirement eligibility based on credited service as of
May 1, 2012, excluding credited service purchased pursuant to section 82-54, and who
were employed by the town and not participating in the DROP on that date, shall be
eligible for normal retirement upon attaining age 50 with ten or more years of credited
service; or when the member's age to last completed month plus credited service totals
65 years or more and the member has ten or more years of credited service.
b. Members who did not attain normal retirement eligibility based on credited service as
of May 1, 2012, excluding credited service purchased pursuant to section 82-54, and
who were employed by the town and not participating in the DROP on that date, shall
be eligible for normal retirement upon termination of town employment and attaining
age 50, or when the member's age to last completed month plus credited service totals
65 years or more; and upon such retirement shall be eligible to receive the frozen
accrued benefit based on credited service and average final compensation on April 30,
2012. Such members shall be eligible to receive the accrued benefit based on credited
service on and after May 1, 2012 upon attaining age 65 with ten or more years of
credited service.Notwithstanding the preceding sentence, effective May 1, 2017, such
members shall be eligible to receive the accrued benefit based on credited service on
and after May 1,2012 upon attaining age 62 with ten or more years of credited service.
The preceding sentence shall apply to members who are participating in the DROP on
May 1, 2017, and to members who retire or enter the DROP on or after that date, but
shall not apply to members who retired or separated from employment before May 1,
2017.
c. Benefit group lifeguard age 60 early retirement option. Members who did not attain
normal retirement eligibility based on credited service as of May 1, 2012, excluding
credited service purchased pursuant to section 82-54, and who were employed by the
town and not participating in the DROP on that date, and members hired on or after
May 1, 2012, may elect to retire at age 60 subject to the early retirement reduction
specified in subsection 82-135(c)(1)g.
d. Members hired on or after May 1, 2012, shall be eligible for normal retirement upon
attaining age 62 with ten or more years of credited service.
00753288-1 Ordinance No.07-2017 Page 3 of 7
Section 3. The Code of Ordinances of the Town of Palm Beach is hereby amended at
Chapter 82, Personnel;Article II, Employee Benefits;Division 2,Retirement System; Subdivision
V, General Employees and Lifeguards; Section 82-135,to read as follows:
Sec. 82-135. - Amount of pension for benefit group general and benefit group lifeguard.
(c) The benefit formulas are:
(1) For benefit group general.
a. For members who attained normal retirement eligibility based on credited service as
of May 1, 2012, excluding credited service purchased pursuant to section 82-54, and
who were employed by the town and not participating in the DROP on that date:
average final compensation multiplied by the sum of 2.75 percent of credited service
rendered after September 30, 1990,to a maximum of 82.5 percent,plus 2.35 percent
of credited service rendered prior to October 1, 1990, plus 1.0 percent of credited
service, if any, in excess of 30 years, provided that years of credited service under
the first two clauses of this subsection shall not exceed 30 and provided further that
the second clause shall apply only to the extent that years of credited service under
the first clause are less than 30.
b. Effective May 1,2012,the accrued benefits of all members who did not attain normal
retirement eligibility based on credited service as of May 1,2012, excluding credited
service purchased pursuant to section 82-54, and who were employed by the town
and not participating in the DROP on that date, shall be frozen. The value of each
member's frozen accrued benefit shall be calculated in accordance with subparagraph
a., above, based on credited service and average final compensation on April 30,
2012.
c. For credited service on and after May 1,2012,except as such service may be credited
to members who qualify under subsection 82-135(c)(1)a. above,the benefit formula
shall be 1.25 percent of average final compensation multiplied by years of credited
service between May 1, 2012 and April 30, 2017; and 1.70 percent of average final
compensation multiplied by years of credited service on and after May 1, 2017.
d. Members who did not attain normal retirement eligibility based on credited service
as of May 1, 2012, excluding credited service purchased pursuant to section 82-54,
and who were employed by the town and not participating in the DROP on that date,
shall, upon retirement, be eligible to receive a retirement benefit consisting of two
parts: (1) the frozen accrued benefit based on credited service and average final
compensation on April 30, 2012,payable upon attaining age 55 or completion of 30
years of credited service regardless of age, and termination of town employment or
entry into the DROP; and (2) the accrued benefit based on credited service on and
after May 1, 2012, payable upon attaining age 62 with ten or more years of credited
service, and termination of town employment or entry into the DROP.
00753288-1 Ordinance No.07-2017 Page 4 of 7
* * *
(2) For benefit group lifeguard.
a. For members who attained normal retirement eligibility based on credited service as
of May 1, 2012, excluding credited service purchased pursuant to section 82-54, and
who were employed by the town and not participating in the DROP on that date:
average final compensation multiplied by the sum of 2.85 percent of credited service
to a maximum of 71.25 percent, plus 1.0 percent of credited service,if any, in excess
of 25 years for benefit group lifeguard.
b. Effective May 1,2012,the accrued benefits of all members who did not attain normal
retirement eligibility based on credited service as of that date, excluding credited
service purchased pursuant to section 82-54, and who were employed by the town
and not participating in the DROP on that date, shall be frozen. The value of each
member's frozen accrued benefit shall be calculated in accordance with subparagraph
a., above, based on credited service and average final compensation on April 30,
2012.
c. For credited service on and after May 1, 2012, the benefit formula shall be 1.25
percent of average final compensation multiplied by years of credited service
between May 1, 2012 and April 30, 2017; and 1.70 percent of average final
compensation multiplied by years of credited service on and after May 1, 2017.
d. Members who did not attain normal retirement eligibility based on credited service
as of May 1, 2012, excluding credited service purchased pursuant to section 82-54,
and who were employed by the town and not participating in the DROP on that date,
shall be eligible to receive a retirement benefit consisting of two parts: (1)the frozen
accrued benefit based on credited service and average final compensation on April
30,2012,payable upon attaining age 50 or the date on which the member's age to last
completed month plus credited service totals 65 years or more, and termination of
town employment or entry into the DROP; and (2) the accrued benefit based on
credited service on and after May 1, 2012,payable upon attaining age 62 with ten or
more years of credited service, and termination of town employment or entry into the
DROP.
e. Benefit group lifeguard age 60 early retirement option. Members who did not attain
normal retirement eligibility based on credited service as of May 1, 2012, excluding
credited service purchased pursuant to section 82-54,and who were employed by the
town and not participating in the DROP on that date, and members hired on or after
May 1, 2012, may elect to retire at age 60 and receive a benefit based on credited
service on and after May 1, 2012, subject to an early retirement reduction equal to
the full actuarial cost of each month that early retirement precedes the date the
member would have met the applicable age and service conditions for normal
00753288-1 Ordinance No.07-2017 Page 5 of 7
retirement under subsection 82-134(b)(2)d., if the member had not elected early
retirement.
Section 4. The Code of Ordinances of the Town of Palm Beach is hereby amended at
Chapter 82,Personnel;Article II,Employee Benefits; Division 2,Retirement System; Subdivision
V, General Employees and Lifeguards; Section 82-139,to read as follows:
Sec. 82-139. - Deferred retirement option program for members of benefit group general
and benefit group lifeguard.
(b) Eligibility of member to participate in the DROP. Retirement system members are eligible
to elect participation in the DROP provided that they elect to retire as of a date certain and
provided that:
(1) Election to participate may be made at any time following the date on which the
member first reaches normal retirement date or age as follows:
a. Members of benefit group general who were employed by the town and not
participating in the DROP on May 1, 2012, shall be eligible to participate in the DROP
upon attaining age 55 or upon completion of 30 years of credited service regardless of
age. The benefit payable to such member shall be the frozen accrued benefit based on
credited service prior to May 1, 2012. The accrued benefit based on credited service on
and after May 1, 2012, shall be payable to such member's DROP account, or directly to
the member if DROP participation has ceased, upon attaining age 62.
b. Members of benefit group lifeguard who were employed by the town and not
participating in the DROP on May 1, 2012, shall be eligible to participate in the DROP
upon attaining age 50 or the date on which the member's age to last completed month
plus credited service totals 65 years or more. The benefit payable to such member shall
be the frozen accrued benefit based on credited service prior to May 1, 2012. The accrued
benefit based on credited service on and after May 1, 2012, shall be payable to such
member's DROP account, or directly to the member if DROP participation has ceased,
upon attaining age 62.
c. Members of benefit group general and benefit group lifeguard hired on or after May
1, 2012, shall be eligible to participate in the DROP upon attaining age 62 with ten or
more years of service.
*
00753288-1 Ordinance No.07-2017 Page 6 of 7
Section 5. Severability.
If any provision of this Ordinance or the application thereof is held invalid, such invalidity
shall not affect the other provisions or applications of this Ordinance which can be given effect
without the invalid provisions or applications, and to this end the provisions of this Ordinance are
hereby declared severable.
Section 6. Repeal of Ordinances in Conflict.
All other ordinances of the Town of Palm Beach, Florida, or parts thereof which conflict
with this or any part of this Ordinance are hereby repealed.
Section 7. Codification.
This Ordinance shall be codified and made a part of the official Code of Ordinances of the
Town of Palm Beach.
Section 8. Effective Date.
This Ordinance shall take effect immediately upon its passage and approval, as provided
by law.
PASSED AND ADOPTED in a regular, adjourned session of the Town Council of the Town of
Palm Beach on first reading this 14th day of February, 2017, and for second and final reading on this 14th
day of March,2017.
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L. Conigho,Mayor Richard M. Kleid, Town Council President
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00753288-1 Ordinance No.07-2017 Page 7 of 7
EXHIBIT A
SUMMARY OF PROPOSED GENERAL EMPLOYEE RETIREMENT BENEFIT
CHANGES
Current Proposed Plan
Benefits 1/10/17
Retirement Age 65 62
Multiplier 1.25% 1.70%
Employee Contribution 2.47% 3.50%
DC Employee Contribution 4.00% 3.00%
DC Town Contribution 4%-8.00% 3.00%
Optional Employee DC Contribution 0.00% 2.00%
Optional Employer DC Match 0.00% 2.00%
I0
EXHIBIT B
GENERAL EMPLOYEE RETIREMENT BENEFIT CHANGE
FINANCIAL IMPACT
Current Proposed
Benefits Benefit
Town DB Contribution $3,018,182 $3,187,747
Town DC Contribution $937,347 $473,391
Total Town Contribution $3,955,529 $3,661,138
Savings $294,391
Estimated UAAL at 7% Rate of Return $34,585,503 $35,754,772
UAAL Increase $1,167,269
Payback Period Using Savings to Reduce UAAL Increase 3.97Years