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Ordinance 06-2012 Retirement ORDINANCE NO. 6-2012 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 82-51, GENERAL, AS AMENDED BY ORDINANCE NO. 4-2012, ADOPTED MARCH 13, 2012; BY AMENDING SECTION 82-52, DEFINITIONS; BY AMENDING SECTION 82-54, CREDITED SERVICE; LOSS OF CREDITED SERVICE; REINSTATEMENT OF CREDITED SERVICE; BY AMENDING SECTION 82-56, BENEFIT GROUPS; BY AMENDING SECTION 82-59, TRANSFER OF SERVICE BETWEEN TOWN PLANS, BY AMENDING SECTION 82-63, AMOUNT OF POST-RETIREMENT REDETERMINATION OF PENSIONS; BY AMENDING SECTION 82-65, ALLOWANCE OF INTEREST; RATES OF INTEREST; BY AMENDING SECTION 82-66, REFUND OF MEMBER'S ACCUMULATED CONTRIBUTIONS; BY AMENDING SECTION 82-699 ADMINISTRATIVE EXPENSES; BY AMENDING SECTION 82-70, ASSIGNMENTS PROHIBITED; BY AMENDING SECTION 82-729 ROLLOVER DISTRIBUTIONS, BY AMENDING SECTION 82-73, METHOD OF MAKING PAYMENTS; AMENDING SUBDIVISION II, RESERVE ACCOUNTS, BY AMENDING SECTION 82-80, RESERVE FOR MEMBER CONTRIBUTIONS; BY AMENDING SECTION 82-83, RESERVE FOR UNDISTRIBUTED INVESTMENT INCOME; BY DELETING SECTION 82-85, PLANS AND ASSETS SEGREGATED; BY DELETING SECTION 82-86, CHAPTERS 175 AND 185, FLORIDA STATUTES; AMENDING SUBDIVISION III, FIREFIGHTERS, BY DELETING SECTION 82-90, FIREFIGHTER BOARD OF TRUSTEES; BY DELETING SECTION 82-91, TERM OF OFFICE; OATH OF OFFICE: VACANCY; BY DELETING SECTION 82-92, OFFICERS, ADMINISTRATIVE SERVICES; BY DELETING SECTION 82-93, INVESTMENT LIMITATIONS; BY AMENDING SECTION 82-94, RETIREMENT AGE AND SERVICE CONDITIONS; BY AMENDING SECTION 82-95, AMOUNT OF PENSION; BY AMENDING SECTION 82- 96, OPTIONAL FORMS OF PAYMENT OF A PENSION; BY DELETING SECTION 82-97, SUPPLEMENTAL PENSION DISTRIBUTIONS; BY AMENDING SECTION 82-98, CHAPTER SHARE ACCOUNTS, BY AMENDING SECTION 82-99, DEFERRED___RETIRE-MENT__....._OPTION PROGRAM, BY AMENDING SECTION 82-100, _DISABILITY RETIREMENT; BY AMENDING SECTION 82-102, CONTINUATION SUBJECT TO RE-EXAMINATION; RETURN TO EMPLOYMENT: EFFECT OF GAINFUL EMPLOYMENT; BY AMENDING SECTION 82- 103, DEATH AFTER_ RETIREMENT; AUTOMATIC SURVIVOR PENSION TO MINOR CHILDREN AND/OR SURVIVING SPOUSE; BY AMENDING SECTION 82-104, DEATH WHILE AN EMPLOYEE OF THE TOWN; .AUTOMATIC SURVIVOR PENSION TO MINOR CHILDREN AND/OR SPOUSE; BY AMENDING SECTION 82-105, ELECTIVE SURVIVOR PENSION; AMENDING SUBDIVISION IV , POLICE OFFICERS, BY DELETING SECTION 82-110, POLICE- OFFICER BOARD OF TRUSTEES; BY DELETING SECTION 82-111, TERM OF OFFICE; OATH OF OFFICE; VACANCY; BY DELETING SECTION 82- 112, OFFICERS, ADMINISTRATIVE SERVICES; BY DELETING SECTION 82-113, INVESTMENT LIMITATIONS; BY AMENDING SECTION 82-114, RETIREMENT AGE AND SERVICE CONDITIONS; BY AMENDING SECTION 82-115, AMOUNT OF PENSION; BY AMENDING SECTION 82-116, OPTIONAL FORMS OF PAYMENT OF A PENSION; BY DELETING SECTION 82-117, SUPPLEMENTAL PENSION DISTRIBUTIONS; BY AMENDING SECTION 82-119, DEFERRED RETIREMENT OPTION PROGRAM; BY AMENDING SECTION 82-120, DISABILITY RETIREMENT; BY AMENDING SECTION 82-122, CONTINUATION SUBJECT TO RE-EXAMINATION; RETURN TO EMPLOYMENT; EFFECT OF GAINFUL EMPLOYMENT; BY AMENDING SECTION 82-123, DEATH AFTER RETIREMENT; AUTOMATIC SURVIVOR PENSION TO MINOR CHILDREN AND/OR SURVIVING SPOUSE; BY AMENDING SECTION 82-124, DEATH WHILE AN EMPLOYEE OF THE TOWN: AUTOMATIC SURVIVOR PENSION TO MINOR CHILDREN AND/OR SPOUSE; BY AMENDING SECTION 82-125, ELECTIVE SURVIVOR PENSION, AMENDING SUBDIVISION V, GENERAL EMPLOYEES AND LIFEGUARDS, BY DELETING SECTION 82-130, GENERAL EMPLOYEE BOARD OF TRUSTEES; BY DELETING SECTION 82-131, TERM OF OFFICE; OATH OF OFFICE; VACANCY; BY DELETING SECTION 82-132, OFFICERS, ADMINISTRATIVE SERVICES, BY AMENDING SECTION 82-134, RETIREMENT AGE AND SERVICE CONDITIONS; BY AMENDING SECTION 82-135, AMOUNT OF PENSION; BY AMENDING SECTION 82-136, OPTIONAL FORMS OF PAYMENT OF A PENSION; BY DELETING SECTION 82-137, SUPPLEMENTAL PENSION DISTRIBUTIONS; BY AMENDING SECTION 82-139, DEFERRED RETIREMENT OPTION PROGRAM; BY AMENDING SECTION 82-140, DISABILITY RETIREMENT; BY AMENDING SECTION 82-143, DEATH AFTER RETIREMENT; AUTOMATIC SURVIVOR PENSION TO MINOR CHILDREN AND/OR SURVIVING SPOUSE BY AMENDING SECTION 82-144, DEATH WHILE AN EMPLOYEE OF THE TOWN; AUTOMATIC SURVIVOR PENSION TO MINOR CHILDREN AND/OR SPOUSE; AMENDING SECTION 82-145, ELECTIVE SURVIVOR PENSION, PROVIDING FOR SEVERABILITY; PROVIDING FOR REPEAL OF ORDINANCES IN CONFLICT; PROVIDING FOR CODIFICATION; PROVIDING AN EFFECTIVE DATE. Ordinance No. 6-2012 Page 2 of 74 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 Il, Employee Benefits; Division 2, Retirement System; Subdivision 1, In General; Section 82-51, as amended by Ordinance No. 4-2012 adopted March 13,2012,to read as follows: "Sec. 82-51. General. (a) The town retirement system established as of July 1, 1947, as amended, is continued for the purpose of providing retirement income to certain employees and former employees, and survivor income to certain of their beneficiaries. Effective April 1, 2012, the retirement system shall be administered by a board of trustees as provided in subsection (b) below. Such board shall operate in the manner provided by this division, and in accordance with applicable provisions of by the United States Internal Revenue Code and Florida Statutes as they may be amended from time to time. The retirement system shall be operated for the exclusive benefit of members, retirants and their beneficiaries. (b) Notwithstanding any other provision of this Division 11, and effective March 14, 2012 ttpon the .,deptio of this ,,,,ding ee: (1) A new board of trustees is created as provided in section 82-57. The members of the new board of trustees shall be selected no later than March 29, 2012, and shall be sworn in on or before March 30, 2012. The existing boards of trustees of the firefighter, police officer and general/lifeguard retirement plans shall continue to operate through March 31, 2012, for the primary purpose of facilitating the transfer of contracts, investment holdings, assets and liabilities of the existing firefighter, police officer and general/lifeguard retirement plans, as well as all documents and records of those plans, to the new board of trustees. The existing boards of trustees shall take all necessary and appropriate action to carry out this purpose in a timely manner. (2) All existing contracts, investment holdings, assets and liabilities of the existing firefighter, police officer and general/lifeguard retirement plans shall be transferred to and become contracts, investment holdings, assets and liabilities of the new board of trustees on April 1, 2012, or as soon thereafter as administratively possible. The existing firefighter, police officer and general/lifeguard retirement funds shall be separately managed by the new board of trustees for up to six months following April 1, 2012, until such time as the new board of trustees determines that it is prudent to consolidate one or more of the funds. The existing firefighter, police officer and general/lifeguard retirement funds shall be consolidated into one retirement fund on or before October 1, 2012. Notwithstanding the consolidation of the retirement funds, the new board of trustees shall provide for a separate accounting of the assets and liabilities attributable to the firefighter, police officer and general/lifeguard employee benefit groups, and all actuarial valuations and studies performed on and after April 1, 2012 shall include a separate accounting of the assets and liabilities attributable to the firefighter, police officer and general/lifeguard employee benefit groups. Ordinance No. 6-2012 Page 3 of 74 (3) The plan administrators for the existing firefighter, police officer and general/lifeguard retirement plans are authorized to implement and facilitate the provisions of this subsection (b), and to act as plan administrators for the consolidated retirement plan until otherwise determined by the new board of trustees. During the period prior to April 1, 2012 the boards of trustees of the existing firefighter,police officer and general/lifeguard retirement plans and the plan administrators shall take all necessary and appropriate action to ensure that the benefits due retired plan members are not interrupted, and that any benefit applications submitted by plan members are processed in a timely manner. Commencing April 1, 2012, the new board of trustees and the plan administrators shall take all necessary and appropriate action to ensure that the benefits due retired plan members are not interrupted, and that any benefit applications submitted by plan members are processed in a timely manner. (c) Effective May 1, 2012, and notwithstanding any other provision of this Division 2: The accrued benefits of all members of the retirement system who have not attained normal retirement eligibility based on credited service as of May 1, 2012, excluding credited service purchased pursuant to section 82-54, and who are employed by the town and not participating in the DROP on May 1, 2012, shall be frozen. All such members shall be 100% vested in their frozen accrued benefit as of May 1, 2012 regardless of length of service. The value of each member's frozen accrued benefit shall be calculated in accordance with the provisions of the retirement system in effect on April 30 2012 and based on the member's credited service and average final compensation on April 30, 2012, and such frozen accrued benefit shall be payable to the member upon attaining eligibility for receipt of retirement benefits under the provisions of the system in effect on April 30 2012, and termination of town employ_ ment. For service on and after May 1, 2012, all members of the retirement system who have not attained normal retirement eligibility as of May 1, 2012 based on credited service, excluding credited service purchased pursuant to section 82-54. and who are employed by the town and not participating in the DROP on May 1, 2012 shall accrue benefits in accordance with the provisions of the retirement system as amended by this ordinance. Members of the retirement system who have not attained normal retirement eligibility based on credited service as of May 1, 2012, excluding credited service purchased pursuant to section 82-54, and who are employed by the town and not participating in the DROP on May 1, 2012 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 prior to May 1, 2012, payable upon attaining eligibility for receipt of retirement benefits under the provisions of the system in effect on April 30 2012, and entry into the DROP or termination of employment; and (2) the accrued benefit based on credited service on and after May 1, 2012, payable upon attaining age 65 with 10 or more years of credited service, and entry into the DROP or termination of employment. Q Members of the retirement system 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 May 1, 2012 shall continue to accrue benefits in accordance with the provisions of the system in effect on April 30, 2012 for as long as they are employed by the town and eligible to accrue benefits under the system. Ordinance No. 6-2012 Page 4 of 74 Members of the retirement system who retired or entered the DROP prior to May 1, 2012 shall continue to receive benefits in accordance with the provisions of the system in effect on the date of their retirement or DROP entry. Members of the retirement system who terminated employment with ten or more years of credited service prior to May 1. 2012 and did not receive a refund of accumulated member contributions shall be eligible to receive benefits in accordance with the provisions of the system in effect on the date of their termination." 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 I, In General; Section 82-52, to read as follows: "Sec. 82-52. Definitions. The following words, terms and phrases, when used in this article, shall have the meanings ascribed to them in this section, except where the context clearly indicates a different meaning: Accumulated member contributions means the sum of all amounts credited to a member's individual account in the reserve for employee contributions. Average final compensation means: (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, half the total amount of compensation paid a member during the 24 consecutive months of credited service in which the total amount of compensation paid a member is greatest. The greatest 24 consecutive months of credited service must fall within the member's last five years of credited service prior to retirement, termination, or death. (b) For 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, average final compensation for benefits based on credited service prior to May 1, 2012. means half the total amount of compensation paid a member during the 24 consecutive months of credited service in which the total amount of compensation paid a member is greatest. The greatest 24 consecutive months of credited service must fall within the member's last five years of credited service prior to May 1, 2012. (c) For members who did not attain normal retirement eligibility based on credited service as of May 1, 2012, and for members hired on or after that date, average final compensation for benefits based on credited service on or after May 1, 2012 means the total amount of compensation paid a member during the final 60 consecutive months of credited service, divided by five. Provided, if a member terminates town employment or enters the DROP after May 1, 2012 with less than 60 months of credited service after that date, average final compensation for benefits based on credited service on or after May 1, 2012 shall be based on the total amount of compensation paid on and after May 1, 2012, divided by the total months of credited service on and after date, multiplied by twelve. Ordinance No. 6-2012 Page 5 of 74 (d) In applying the above definition of average final compensation, periods of credited service granted while being on long-term disability and/or worker's compensation shall not be considered, nor shall it interrupt consecutive months for the purpose of computing average final compensation. Beneficiary means an individual who is being paid or who has entitlement to the future payment of a pension or other benefit by the retirement system for a reason other than the individual's membership in the retirement system. Board of trustees or board means the mlevant board of trustees responsible for managing this retirement system retiremet# betiefits for the group of employees to whiek the member belongs, either the general employee a fl-- r �; +o, board i �� i, -b���efigh� the poliee�eerboard�or, i applieable, all-tree bozo. Chapter 75 wansF.S. eh. 175, rters'Pomsion T+u&t Fund, a3 may be amended f time to time—. Gh 6#er 185 means c „h. 145, p„liee O ffieers' n etir-e,. ei# T,.,,.,+ Fund, as may be—amended ftomrtime time. Child means the natural and adopted children of the member. Compensation means the salary or wages paid a member for personal service rendered the town while a member of the retirement system, as follows:. (a) Compensation 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, shall include base salary or wages; longevity pay; cost-of-living allowances; salary or wages while absent from work on account of vacation, holiday or illness; overtime pay; special assignment overtime pay; shift premiums; educational incentive payments; and the value of housing furnished a member by the town. Compensation shall not include lump sum payments for accumulated leave paid to or at the direction of a member. Special detail pay shall not be included as compensation. (b) Compensation for members who did not attain normal retirement eligibility based on credited service as of Mav 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, for credited service prior to May 1, 2012, shall include base salary or wages; longevity pay; cost-of- living allowances, salary or wages while absent from work on account of vacation. holidav or illness, overtime pav; special assignment overtime pay; shift premiums; educational incentive payments, and the value of housing furnished a member by the town. Compensation shall not include lump sum pavments for accumulated leave paid to or at the direction of a member.. Special detail pav shall not be included as compensation. (c) Compensation for members who did not attain normal retirement eligibility based on credited service as of Mav 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 for members hired on or after Mav 1, 2012, for credited service on and after Mav 1, 2012, shall include only base salary and shall exclude anv other compensation that is not base salarv. Defined contribution plan means the retirement plan established by Resolution No. 22-2012. Ordinance No. 6-2012 Page 6 of 74 i DROP means deferred retirement option program. DROP participant means any member who elects to retire and participate in the deferred retirement option program as provided for his or her employee group. 1;';,.,,x;,,7 t r board ine-a s the fi f ht r board of trustees established by Fierid Statutes .1,-,.1 by Q7 ost 1 ter the tiro r1 1'01.1'. fo f 1-,one i lTtllilH se�tior. .,� «9-�1}i;;h i:, .,.a'oli lies' to /—e���n�����s«zo Genera!enTleyee board means the general employee beard of tmste as ostablish2d by eet;l1 92 130 whieh is established to administer-the retirement system for- gonoral, benefi t group 1;f.uar-r1 a- r1 rot;ra is from a groups._ Pension means a series of monthly payments by the retirement system, for a temporary period or throughout the life of a retirant or beneficiary. D„1;. offieer board means the „1; affieer boat 1 of tr, sta established by Florid Statute and by seetion 82 110 w-hieh is established to administer the retir-efflefit system fOf benefit grottp Retirant means an individual who is being paid a pension on account of credited service acquired by the individual as a member of the retirement system. Retirement system means the Town of Palm Beach Retirement System. Service means personal service rendered the town while a member of the retirement system and military service qualifying under section 82-55. Town means Town of Palm Beach, Florida. Vesting or vested status means the attainment of ten or more vears of credited service. Notwithstandina the orecedinia sentence, all members of the retirement system who did not attain normal retirement eliaibilitv based on credited service as of May 1, 2012, excluding credited service purchased pursuant to section 82-54, and who were emploved by the town and not participating in the DROP on that date shall be 100% vested in their frozen accrued benefit as of Mav 1, 2012, reaardless of length of credited service." Section 3. The Code of Ordinances of the Town of Palm Beach is hereby amended at Chapter 82, Personnel; Article I1, Employee Benefits; Division 2, Retirement System; Subdivision I, In General; Section 82-54, to read as follows: "Sec. 82-54 Credited service; loss of credited service; reinstatement of credited service. (a) Service rendered by a member shall be credited to the member's individual credited service account in accordance with rules the boards of trustees shall from time to time prescribe. In no case shall more than one year of credited service be credited on account of all service rendered by a member in any one year, nor shall less than 85 hours of service in a calendar month be credited as 1/12 year of credited service. Service shall be credited to the nearest 1/12 year. (b) Except as provided in section 82-80, credited service shall be forfeited and no longer in force if an individual has a break in town employment of more than 12 months or if an Ordinance No. 6-2012 Page 7 of 74 individual's accumulated member contributions are withdrawn from the reserve for employee contributions and paid to the individual or a beneficiary(including an estate). (c) A member may have forfeited credited service restored upon satisfaction of each of the following conditions: (1) The break in town employment is not more than 12 months; and (2) The retirement system is paid the total amount of accumulated member contributions previously withdrawn, plus interest from the date of withdrawal to the date of repayment. Repayment shall be made in accordance with rules the boards shall from time to time prescribe. Repayment must be completed within one year of recommencement of membership. (d) Unless otherwise prohibited by law, a vested member who has not purchased service credit under section 82-64, may purchase years or fractional parts of years of service to be added to years of credited service provided that: (1) The member contributes to the retirement system the sum that would have been contributed, based on the applicable employee contribution rate in effect at the time that the credited service is requested for the years or fractional parts of years for which the credit is requested, plus payment of costs for all professional services rendered to the board in connection with the purchase of years of credited service, plus the amount actuarially determined so that the crediting of service does not result in any costs to the retirement system. (2) Payment by the member of the required amount may be made within six months of the request for credit and in one lump sum payment, or over a period equal to the length of time being purchased or five years, whichever is less, at an interest rate which is equal to the interest rate determined under section 82-65. No credit shall be given for any service until all years of service which are to be purchased,have been purchased. (3) The credited service purchased under this section shall count for all purposes except vesting. No more than five years of credited service may be purchased. (4) If a member who is in the process of purchasing service terminates before completing the purchase, the unpaid purchase price due from the former member may be set-off against benefits payable to the former member. (5) A purchase of service may be made no more than three times during the course of employment and no purchase may be made until any previous purchase is fully paid. (6) Purchases of service by members of benefit group firefighter may only be based upon actual prior service as a firefighter or service in the military and purchases of service by a member of benefit group police officer may only be based upon actual prior service as a police officer or service in the military. " 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 I, In General; Section 82-56, to read as follows: "Sec. 82-56. Benefit groups. (a) The following benefit groups are designated for the purpose of determining benefit conditions, benefit amounts and contribution amounts applicable to a member: Ordinance No. 6-2012 Page 8 of 74 (1) Benefit group general, consisting of all members not included in benefit groups firefighter,police officer or lifeguard. (2) Benefit group firefighter, consisting of members employed in the fire-rescue department who hold the rank of firefighter, paramedic, or higher (including probationary firefighters), provided that they are certified pursuant to F.S. § 633.35. (3) Benefit group police officer, consisting of members employed in the police department who hold the rank of police officer or higher (including probationary police officers), provided that they are certified pursuant to F.S. § 943.1395. (4) Benefit group lifeguard, consisting of members employed in the ocean rescue unit beae pa+re' departm°„*who hold the rank of lifeguard or higher, including probationary lifeguards. (b) Benefit eligibility conditions shall be those applicable to the benefit group under which the member has the largest amount of credited service. (c) Pension amounts shall be separately determined for each benefit group based on retirement system provisions in effect at time of termination of membership." Section 5., 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 1, In General; Section 82-59,to read as follows: "Sec. 82-59. Transfer of service between town plans. In the event that a member changes his or her job status after October 4, 2007 and prior to May 1, 2012, such that he or she becomes a member of a different benefit group, he or she shall be subject to the following: (1) If he or she is not fully vested, the accumulated contributions in the previous benefit group, if any, will be retained by the plan for such benefit group. The member shall be treated the same as terminated vested member of such plan and, therefore, entitled to benefits in existence in such plan on the date of transfer to the new benefit group, provided that the member attains at least ten years of credited service credited service. Credited service up to the date of transfer to the new benefit group will be counted for purposes of determining eligibility for benefits in the new benefit group, but not for purposes of pension calculations. Service in the first benefit group shall be credited with the multiplier for that benefit group at the time of transfer, and service in the new benefit group shall be credited with the multiplier for that benefit group. Upon retirement, the member shall receive pension payments from each benefit group using the average final compensation at the time of transfer or retirement, whichever is applicable, based upon the service and multiplier of each benefit group at the time of termination from participation in the plan of such benefit group, and pension payments shall become due and payable on the early or normal retirement date of the benefit group in which the member most recently participated. (2) If already vested in a benefit group, the member shall be entitled to all of the rights and benefits according to the plan for that benefit group, and, upon transferring into a different benefit group, shall be entitled to all rights and benefits as a new employee in such benefit group. (3) To become eligible for a pension from both plans, the member must have satisfied the service requirements for vesting, that is, ten years of total combined service credited service. Ordinance No. 6-2012 Page 9 of 74 N) Thus-co„+;,,,, o��,.+;�,o nor ennplayees who transfer benefit n after the off,.tive date_o of this seetio Section 6. 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 82-63, to read as follows: "Sec. 82-63. Amount of post-retirement redetermination of pensions. (a) The amount of each pension that became effective after September 30, 1968, and prior to October 1, 1990, shall be increased each October 1, starting with the October 1 that is at least 12 full months after the effective date. The amount of increase shall be one percent of the base amount of pension that would be payable had no increases been granted under the provisions of this section. (b) The amount of each pension that became effective after September 30, 1990 for members who retired, entered the DROP or terminated employment with 10 or more vears of credited service prior to Mav 1, 2012, and members who attained normal retirement eliaibility based on credited service as of Mav 1, 2012, excluding credited service purchased pursuant to section 82- 54, and who were emploved by the town and not participatina in the DROP on that date, shall be increased on the first day of the month which is at least 36 full months after the effective date and shall be further increased on an annual basis thereafter. The amount of annual increase shall be two percent. (c) The amount of each pension that became effective after September 30, 1990 based on credited service prior to Mav 1, 2012 for members who did not attain normal retirement eligibility based on credited service as of Mav 1, 2012, excluding credited service purchased pursuant to section 82-54, and who were emploved by the town and not participating in the DROP on that date, shall be increased on the first day of the month which is at least 36 full months after the effective date and shall be further increased on an annual basis thereafter. The amount of annual increase applicable to the pension based on credited service prior to Mav 1, 2012 shall be two percent. (d) There shall be no post-retirement increase applied to anv pension based on credited service on and after Mav 1, 2012 for members who did not attain normal retirement eligibility based on credited service as of Mav 1, 2012, excluding credited service purchased pursuant to section 82-54, and who were emploved by the town and not mrticipatina in the DROP on that date, and for members hired on or after Mav 1, 2012." Section 7. 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 82-65, to read as follows: "Sec. 82-65. Allowance of interest; rates of interest. The boards of trustees of the retirement system shall, at the end of each fiscal year, credit interest on the individual balances in the reserve for member contributions, and on the balances in the reserve for employer contributions and the reserve for retired benefit payments. The amounts so credited shall be charged to the reserve for undistributed investment income. The boards shall determine the rate of interest to be used in the crediting and charging of interest." Ordinance No. 6-2012 Page 10 of 74 Section 8. 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 82-66, to read as follows: "Sec. 82-66. Refund of member's accumulated contributions. (a) An individual who ceases to be a member for any reason except retirement or death prior to satisfying any of the applicable age and service requirements for retirement shall be paid his accumulated member contributions upon written request filed with the plan administrator-beard of+f, ste (b) If an individual dies and no pension becomes or will become payable by the retirement system on account of the death, the deceased individual's accumulated member contributions shall be paid to such individual or individuals as the deceased individual shall have named by written designation duly executed and filed with the board. If there is no such named individual surviving the deceased individual, the accumulated member contributions shall be paid to the deceased individual's estate. (c) Payment of accumulated contributions as provided in this section may be made in installments." Section 9. 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 82-69, to read as follows: "Sec. 82-69. Administrative expenses. The administrative expenses of the retirement system shall be borne by the plan, and allocated to each employee benefit group in proportion to the assets attributable to each aroun as of the end of the most recent plan year. with those generati by the boards-or- r the benefit of the employee gfeups al.1.9eated to ie ^„rds or employee groups." Section 10. 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 82-70, to read as follows: "Sec. 82-70. Assignments prohibited. (a) The right of an individual to a pension, to the return of accumulated contributions, the pension itself, any optional benefit, any other right accrued or accruing to any individual under the provisions of the retirement system, and any moneys belonging to the retirement system shall not be subject to execution, garnishment, attachment, the operation of bankruptcy or insolvency law, or any other process or law whatsoever, and shall be unassignable, except as is otherwise specifically provided in this section. (b) If a member is covered by a group insurance or prepayment plan participated in by the town, and should the member be permitted to and elect to continue such coverage as a retirant, the member may authorize the relevant board of trustees to have deducted from his pension the payments, if any, required of the retirant to continue coverage under such group insurance or prepayment plan. The town shall have the right of setoff for any claim arising from embezzlement or fraud by a member, retirant or beneficiary, unless prohibited by law eh-apter 175 or ehapter 185." Ordinance No. 6-2012 Page 11 of 74 Section 11 The Code of Ordinances of the Town of Palm Beach is hereby amended at Chapter 82, Personnel; Article I1, Employee Benefits; Division 2, Retirement System; Subdivision I, In General; Section 82-72, to read as follows: "Sec. 82-72. Rollover distributions. (a) General. Notwithstanding any provision of the plan to the contrary that would otherwise limit a distributee's election under this subsection, a distributee may elect, at the time and in the manner prescribed by the board, to have any portion of an eligible rollover distribution paid directly to an eligible retirement plan specified by the distributee in a direct rollover. (b) Definitions. (1) Eligible rollover distribution. An eligible rollover distribution is any distribution of all or any portion of the balance to the credit of the distributee, except that an eligible rollover distribution does not include: any distribution that is one of a series of substantially equal periodic payments (not less frequently than annually) made for the life (or life expectancy) of the distributee or the joint lives (or joint life expectancies) of the distributee and the distributee's designated beneficiary, or for a specified period of ten years or more; any distribution to the extent such distribution is required under section 401(a)(9) of the Internal Revenue Code ("code"); and the portion of any distribution that is not includible in gross income. Any portion of any distribution which would be includible in gross income will be an eligible rollover distribution if the distribution is made to an individual retirement account described in code section 408(a), to an individual retirement annuity described in code section 408(b) or to a qualified defined contribution plan described in code section 401(a) or 403(a) that agrees to separately account for amounts so transferred, including separately accounting for the portion of such distribution which is not so includible. (2) Eligible retirement plan. An eligible retirement plan is an individual retirement account described in section 408(a) of the code, an individual retirement annuity described in section 408(b) of the code, an annuity plan described in section 403(a) of the code, an eligible deferred compensation plan described in section 457(b) of the code which is maintained by an eligible employer described in section 457(e)(1)(A) of the code and which agrees to separately account for amounts transferred into such plan from this plan, an annuity contract described in section 403(b) of the code, or a qualified trust described in section 401(a) of the code, that accepts the distributee's eligible rollover distribution. This definition shall also apply in the case of an eligible rollover distribution to the surviving spouse. (3) Distributee. A distributee includes a member or former member. In addition, the member's or former member's surviving spouse is a distributee with regard to the interest of the spouse. (4) Direct rollover. A direct rollover is a payment by the plan to the eligible retirement plan specified by the distributee, or a payment to the plan from an eligible retirement plan for the purchase of credited service under the plan." Section 12. 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 1, In General; Section 82-73, to read as follows: Ordinance No. 6-2012 Page 12 of 74 "Sec. 82-73. Method of making payments. All payments from moneys of the retirement system shall be made according to procedures governing the disbursement of town general fund moneys. No payment shall be made unless it shall have been previously authorized by a specific or continuing resolution of one 0 the boards of trustees. Benefits shall accrue from the day following the date of retirement, death, or disability and shall be payable monthly." Section 13. 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 II, Reserve Accounts; Section 82-80, to read as follows: "Sec. 82-80. Reserve for member contributions. (a) The reserve for member contributions is the account in which is accumulated the contributions deducted from the compensation of members, or otherwise paid to the retirement system by the member or on the member's behalf, and from which shall be made refunds and transfers of accumulated member contributions. (b) 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 emploved by the Town and not participating in the DROP on that date, their contribution rate both before and after May 1, 2012 shall be 7.21% for benefit group lifeguard. 6.98% for benefit group police officer, 6.82% for benefit group firefighter, and 6.47% for benefit group general. (be) For 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, Mmember contributions to the retirement system shall be at the applicable following rates: Contribution Rate (percent) Contribution Rate (percent) Benefit Group Before May 1, 2012 On and After May 1, 2012 Benefit group general — hired before 6.47 4.47 May 1, 1992 Benefit group general — hired on or 6.47 2.47 after May 1, 1992 Benefit group firefighter 6.82 4.82 Benefit group police officer 6.98 4.98 Benefit group lifeguard — hired 7.21 5.21 before May 1, 1992 Benefit group lifeguard—hired on or 7.21 3.21 after May 1, 1992 Ordinance No. 6-2012 Page 13 of 74 (ed) 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. (de) 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 14. 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 II, Reserve Accounts; Section 82-83, to read as follows: "Sec. 82-83. Reserve for undistributed investment income. The reserve for undistributed investment income is the account to which is credited all interest, dividends and other income from the investment of retirement system assets; all gifts and bequests received by the retirement system; all unclaimed accumulated contributions and pensions; and all other moneys received by the retirement system the disposition of which is not specifically provided. There shall be transferred from the reserve for undistributed investment income all amounts required to credit interest to the reserve for member contributions, reserve for employer contributions, and the reserve for retired benefit payments. Whenever the boards of trustees determines the balance in the reserve for undistributed investment income is more than sufficient to cover current charges to the account, the excess or any part thereof may be used to provide contingency reserves or to meet special requirements of the other reserve accounts of the retirement system; pfevided, however-, that the reserves and ffeeoutAs of eaeh board of trustees shall not be eonHningled and no transfer -.hall be made to the of anothe beafd. Whenever the balance in the reserve for undistributed investment income is insufficient to meet the current charges to the account, the amount of the insufficiency shall be transferred from the reserve for employer contributions." Ordinance No. 6-2012 Page 14 of 74 Section 15. The Code of Ordinances of the Town of Palm Beach is hereby amended at Chapter 82, Personnel; Article Il, Employee Benefits; Division 2, Retirement System; Subdivision 1I, Reserve Accounts, by deleting Sections 82-85 and 82-86 in their entirety. See. 82 85. Phans and- assets segregated. The plan, Meney or assets for the benefit of benefit groups shall be seises„+oa from those 0 +h benefit t grops(e eept benefit group gene.:1 and benefit group lifeguard,which shall be eer.-A ingled), and the egfegation, invest ent, aa."oke-aping and disbursement of sueh Mersey or assets shall be the esponsilxli<y of the+,., stee of the olo ant boa-rdT See. . s 175 end 185, Florida_Statutes. if my tems or-e9nditi^ons of this e 3aptei applieable to the fire ;gh4e,. board,benefit gFeup f fi hter, „r the „„liee „ffieer hoar-d4 benefit group „liee officer, are i.-Roonsistent with 1~ C eham -3r 185, ar, arne nd ,l from time to ti c, F.S. e'20. 1,--5-and485, ar, arn&n`e fr-of' time to time, shall ,.only-o Section 16. 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 111, Firefighters; by deleting Sections 82-90, 82-91, 82-92 and 82-93 in their entirety. See. 2 90. Fir-efighter- board of trustees. (a) the firefighter board of trustees (the "firefighter board" or "b ard") shall cansist of the following i„diyid,,.,ls• (1) Two me1T s covered by benefit group firefi.,hter, to he eleeted by members of that benefit (2) T legal r side„ts of the to<,,,,, to bc-appqinted by the t,,.,.r, �?) The fifth member- of the f f:,. ehter hoard shall hem, a major.n., of the Previous far members and s ,..h person'r, name shall b&-subrmitted to the t„<,,,, , nil .,.h;ch-, as a ."Y.-N-MAerml shall app t l i person to the fi efig tei boar's its fifkl� membe , � pia is � board its .........� !h\ Eleetior,s of meim m trustees shall be hold in aeeordanee with-rulas adopted by the firefigl,+er-board and.,,itl, F.S. ,.1, 175 (e) The firefighter her hall meet at least himonth! , shall adopt its o rules of procedure and shall ked orris of its p eedi gs. Three trustees shall V of the board, d at least three eo c;irtnng veto:, shall ba r for ., decisior by thth- e board. Eaehh tmstee shall-hv. entitled to on vote on eaeh „es+i.,n before the board. T�a trus €€'-s [;hall nit s„+io„ but„ expenses and-per-diem. as pravided by state law. (d) The firefighter board shall be a lagal entity Wi±h, in addition to other- and sib.ilities , „t.,ir,ed here n and 4w-powers and responsibilities set forth in-F.S. ch. 17-5 the power to bring and defend lawsuits of el,cry kind, ature and deseriptie„, and to .,dm „ister separate plans for the benefit of its i ember-s and retirants (e) If a el.,im for benefits is denied by the firefighter beard—, the claimant shall. lee notified of the denial, in IVY iting, within 30 d. of the board's etion. The notifiec-Aim shall Jet forth the masons Ordinance No. 6-2012 Page 15 of 74 per-des al. The olalr:art � appeal the denial and Nequest a hearlrg befog the board. The appeal shall be in �wifing to the tovffi elerk and filed within 90 days of the erual. The request shall n+,,;n written statement the of te ofai r-.as# osi-t-ionz d e-elaim. The board shall sel,edi o a marine within in 60 days of reee n+ .f+lie , M See. 82 91. Term of of-flee; oath of office; yae-flney. (a) The r-egulaf term of offiee of member elected trustees of the firefighter board and hinted trustees shhall be two years and they may sueeeed themselves in off; (b) Each tmstee shall, befere us;-ar?-rg the dtAies of+,.,,s+oc, qualify l—i b ar. oath of offiee t"e administered by the t,,,,,,, „lerl C„1 A vacancy shall occur on the f;ref;g ter boa-rd f- ��1 membo elected tmstee eeases to be ., ml.er of benefit group f;refig ter. C(2) A iy member � consecutive meetings of the firefighlef 1,,,af each ease a• cause by the trustees attending the meeting. (3) Any town citizen or legal r2s dent appointed by the t,,,,.n eouneil fails to remain sue-h; and (4` Any tpds+ee--resignsc�r is remeved from off;,,e (d) T�f a vFaea-neyLoocum on the firefighter board, the vaeane , shall ba filled within 30 days, for the unex-pir-ed term. in the tho po"'t; , was previotisly filled See. 82 92. -"fr-eers, administmfiv The off eery and employed services oft the firefighter b d c)rall b2 as follows: (1) Ghai . The firefighter- h d shall annually elee a chair and a oha r pt•g term from =mbors. (2)—Qeepe-t,,,., The fir-ef;g ter heard srhall annually elect ., fe+.,f f ro: among itsmember� (3) Pnanee a t and ti-easwer The to.ffi finance direeter and treastircr -Imll b2 finanee director- an cusurer -Af tl c--I 1e h , unless the firefighter ter >,n-A—del gates-such authority o a plan a tr-atc-: The atmots, other-than operating eeeoui+to, steal.' bo places ,stud., of a nationally ehartered bars- or tfust m. .parcy. The—board n# a plan administrator-to administer the opefating aeeounts at the f„nd'R e n (4) Legal adviso The firefighter hoard m pley legal . sel e++he fimd's exp.onsg- (5) Aetuwy. The firefighter board 'n appoint and compensate an actuary :,,10 shall 'ache technical .,dvisof to the 1,o rd regarding the operation of the retirement system on an aetuarial 'ou;ICs, and-who shall pd f such required in that , on. Tho t " ! as used in this .,r+;.,lv :gall mean a mamh r of the American n A e dem„ of Actuaries, who has demonstrated an edueational background neeessafy for the #uarlal s Renee and has at least five y of relev.,n+ pension actuarial c..perionee n partnership or corporation may bo app ;�; ,n of an individual who meet #lip preceding qualifiaatiors. Ordinance No. 6-2012 Page 16 of 74 ()Sw-ioiees. The firefighter i,,,.,,.a m play s ie pr-e feasiona? and—ether eervie c as are required for the proper-administration of the retirement system at the Aind's e)c-peflse. (7) r s.,, nf ft . t. The firefighter board shall employ an invest „+ eonsttltai4 at the fps expenso. 2. 92. InVestment limitations. Upon eonsultafien with its itwestment advisefs and staff-, the board may exeeed e ' r:ta4ens on ; ostme„+s in eenunon steey and pi4a stook s eifiea i i F.S. Section 17., 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 III, Firefighters; Section 82-94, to read as follows: "Sec. 82-94. Retirement age and service conditions-for firefighters. (a) A firefighter may retire upon satisfaction of each of the following requirements: (1) The firefighter has filed written application for retirement with the board setting forth the date, not less than 30 days nor more than 120 days subsequent to the execution and filing thereof, retirement is to be effective. (2) Unless the firefighter is an applicant for a DROP, the firefighter terminates all town employment prior to the date retirement is to be effective. (3) The firefighter has met an applicable age and service condition for retirement. (b) The age and service conditions for normal retirement are as follows: 1. Members who attained normal retirement eligibility based on credited service as of Mav 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 [he per hao aq.eified age 50 with years ^r oldef and has ten or more years of credited service; or when the firefighter's member's age to last completed month plus credited service totals 65 years or more and the membern4ividualhas ten or more years of credited service; or when the member Chas 20 or more years of credited service. 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 emploved by the town and not participating in the DROP on that date, shall be eligible for normal retirement upon attainina age 50, or when the member's age to last completed month plus credited service totals 65 vears or more, or upon completion of 20 vears of credited service reaardless of 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 Mav 1, 2012 upon attaining age 65 with ten or more vears of credited service. 3. Members hired on or after Mav 1, 2012, shall be elia_ible for normal retirement upon attaining age 65 with ten or more vears of credited service." Ordinance No. 6-2012 Page 17 of 74 Section 18. 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 III, Firefighters; Section 82-95, to read as follows: "Sec. 82-95. Amount of pension - firefighters. (a) The amount of a member's or a vested former member's pension under the standard form of payment shall be equal to the sum of separately determined amounts for which the individual has credited service in force, and in no event shall the amount of a member's or a vested former member's pension under the standard form of payment be less than$1,200.00 per annum. (b) The amount of pension attributable to a member who has credited service under another benefit group shall be the amount determined by calculating credited service in this benefit group plus the amount determined by calculating credited service in such other benefit group. (c) The benefit formula for firefighters is: 1. For pension payments payable after October 1, 2005 to firefighters who were actively employed on and after October 1, 2005 and who retired, entered the DROP, or terminated employment with 10 or more years of credited service prior to Mav 1, 2012, and to firefighters 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, the benefit formula shall best•: e, average final compensation multiplied by the sum of 3.5 percent of credited service to a maximum of 87.5 percent, plus two percent of average final compensation for credited service, if any, in excess of 43.75 years. The standard form of payment for such benefit shall be life and ten years certain i.e. Provided f•t-thel tha-�—unless a retirant chooses an optional form of payment under section 82-96, payments for the benefit of a retirant who dies within ten years of retirement shall continue to the retirant's designated beneficiary until the tenth anniversary of the retirant's retirement date. j 2. For firefighters 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, the benefit formula shall be 3.5 percent of average final compensation on April 30, 2012, multiplied by credited service on that date. The accrued benefit of all such firefighters shall be frozen on Mav 1, 2012. The standard form of payment for the frozen accrued benefit shall be life and ten vears certain. 3. For credited service on and after May 1, 2012, except as such service may be credited to members who qualify under Section 82-95 (c) 1 above, the benefit formula shall be 1.25 percent of average final compensation multiplied by years of credited service on and after that date. The standard form of payment for benefits based on credited service on and after May 1, 2012 shall be a straight life annuity, payable for the member's lifetime. 4. Firefighters 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 May 1, 2012 shall, upon retirement, be eligible to receive a retirement benefit consisting of two parts: (1) the frozen accrued benefit based on credited service prior to May 1, 2012, payable upon entry into the DROP or termination of employment and attaining eligibility for receipt of retirement benefits under the provisions of Ordinance No. 6-2012 Page 18 of 74 the system in effect on April 30 2012 and ; and (2) the accrued benefit based on credited service on and after May 1, 2012, payable upon attaining age 65 with 10 or more years of credited service and entry into the DROP or termination of employment." Section 19. 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 III, Firefighters; Section 82-96, to read as follows: "Sec. 82-96. Optional forms of payment of a pension for firefighters. (a) Firefighters who terminated employment with 10 or more years of credited service prior to May 1, 2012, and firefighters 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, ^ m°mbef Or vested m° may elect to be paid under one of the following optional forms of payment. The election shall be in writing and filed with the board prior to the date retirement is effective. Payment will be made under the standard form of payment if a timely election of an optional form of payment is not made. (1) Optional form of payment A100- 100 percent survivor pension. Under optional form of payment Al 00, a retirant is paid a reduced pension for life. Upon the retirant's death the reduced pension is paid to the beneficiary, if living, designated in writing and filed with the board at the time of election of the optional form of payment. Payment to the designated beneficiary shall terminate upon the death of the designated beneficiary. The amount of reduced pension is a percentage of the amount of pension under the standard form of payment (SL). The percentage is 80 percent if the retirant and designated beneficiary are the same age on their last birthdays. The 80 percent is reduced by 0.5 percent for each year the age of the retirant exceeds the age of the designated beneficiary, to a minimum of 60 percent for differences in age of 40 or more years. The 80 percent is increased by 0.5 percent for each year the age of the designated beneficiary exceeds the age of the retired member, to a maximum of 90 percent for differences in age of 20 or more years. (2) Optional form of payment A50--50 percent survivor pension. Under optional form of payment A50, a retirant is paid a reduced pension for life. Upon the retirant's death, 50 percent of the reduced pension is paid to the beneficiary, if living, designated in writing and filed with the board at the time of election of the optional form of payment. Payment to the designated beneficiary shall terminate upon the death of the designated beneficiary. The amount of reduced pension is a percentage of the amount of pension under the standard form of payment. The latter percentage is 90 percent if the retirant and designated beneficiary are the same age at their last birthdays. The 90 percent is reduced by 0.25 percent for each year the age of the retirant exceeds the age of the designated beneficiary, to a minimum of 80 percent for differences in age of 40 or more years. The 90 percent is increased by 0.25 percent for each year the age of the designated beneficiary exceeds the age of the retired member, to a maximum of 95 percent for differences in age of 20 or more years. (3) Form of payment (SL)--Straight life pension. Under form of payment (SL) the retirant is paid a pension for life. The (SL) payment amount is an increased amount based on the actuarial equivalent of the life with ten-year guarantee standard form of payment computed pursuant to section 82-95(c). Ordinance No. 6-2012 Page 19 of 74 (4) Such members may also elect to receive the following optional benefit forms: a. A75--75 percent survivor pension. Under optional form of payment A75, a retirant is paid a reduced pension for life. Upon the retirant's death, 75 percent of the reduced pension is paid to the beneficiary, if living, designated in writing and filed with the board at the time of election of the optional form of payment. Payment to the designated beneficiary shall terminate upon the death of the designated beneficiary, or upon the tenth anniversary of the retirant's retirement date, if later. The amount of the reduced pension is based on the actuarial equivalent of the standard form of payment. b. A66-2/3--66 213 Pei-cent survivor pension. Under optional form of payment A66-2/3, a retirant is paid a reduced pension for life. Upon the retirant's death, 66 2/3 percent of the reduced pension is paid to the beneficiary, if living, designated in writing and filed with the board at the time of election of the optional form of payment. Payment to the designated beneficiary shall terminate upon the death of the designated beneficiary, or upon the tenth anniversary of the retirant's retirement date, if later. The amount of the reduced pension is based on the actuarial equivalent of the standard form of payment. (b) Firefighters 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 May 1, 2012, may elect to receive the frozen accrued benefit based on credited service prior to May 1, 2012 under one of the following_ optional forms of payment. The election shall be in writing and filed with the board prior to the date retirement is effective. Payment will be made under the standard form of payment if a timelv election of an optional form of payment is not made. (1) Optional form of pavment A100--100 nef•cent survivor pension. Under optional form of payment A100, a retirant is paid a reduced pension for life. Upon the retirant's death the reduced Pension is paid to the beneficiary, if living, designated in writing and filed with the board at the time of election of the optional form of payment. Payment to the designated beneficiary shall terminate upon the death of the designated beneficiary. The amount of reduced pension is a percentage of the amount of pension under the standard form of payment (SL). The percentage is 80 percent if the retirant and designated beneficiary are the same age on their last birthdays. The 80 percent is reduced by 0.5 percent for each year the age of the retirant exceeds the age of the designated beneficiary, to a minimum of 60 percent for differences in age of 40 or more years. The 80 percent is increased by 0.5 percent for each year the age of the designated beneficiary exceeds the age of the retired member, to a maximum of 90 percent for differences in age of 20. or more years. (2) Optional form of pavment A50--50 Percent survivor pension. Under optional form of payment A50. a retirant is paid a reduced pension for life. Upon the retirant's death. 50 percent of the reduced pension is paid to the beneficiary, if living, designated in writing and filed with the board at the time of election of the optional form of pavment. Payment to the designated beneficiary shall terminate upon the death of the designated beneficiary. The amount of reduced pension is a percentage of the amount of pension under the standard form of pavment. The latter percentage is 90 percent if the retirant and designated beneficiary are the same age at their last birthdays. The 90 percent is reduced by 0.25 percent for each year the age of the retirant exceeds the age of the designated beneficiary, to a minimum of 80 percent for differences in age of 40 or Ordinance No. 6-2012 Page 20 of 74 more years. The 90 percent is increased by 0.25 percent for each year the age of the designated beneficiary exceeds the age of the retired member, to a maximum of 95 percent for differences in age of 20 or more years. (3) Forin of pavment (SL)--Straizht life pension. Under form of payment (SL) the retirant is paid a pension for life. The (SL) pavment amount is an increased amount based on the actuarial equivalent of the life with ten-year guarantee standard form of payment computed pursuant to section 82-95(c). (4) A75--75 Pei-cent survivor pension. Under optional form of payment A75, a retirant is paid a reduced pension for life. Upon the retirant's death, 75 percent of the reduced pension is paid to the beneficiary, if living, designated in writing and filed with the board at the time of election of the optional form of pavment. Payment to the designated beneficiary shall terminate upon the death of the designated beneficiary, or upon the tenth anniversary of the retirant's retirement date, if later. The amount of the reduced pension is based on the actuarial equivalent of the standard form of pavment. (5) A66-213--66 213 Percent survivor pension. Under optional form of pavment A66-2/3, a retirant is paid a reduced pension for life. Upon the retirant's death, 66 2/3 percent of the reduced pension is paid to the beneficiary, if living, designated in writing and filed with the board at the time of election of the optional form of payment. Payment to the designated beneficiary shall terminate upon the death of the designated beneficiary, or upon the tenth anniversary of the retirant's retirement date, if later. The amount of the reduced pension is based on the actuarial equivalent of the standard form of payment. (c) A firefighter may elect to receive the accrued benefit based on credited service on and after May 2012 as follows: the member may elect to receive a reduced pension for life, and upon the retirant's death 100 percent, 75 percent, 66 and 2/3 percent or 50 percent of the reduced pension is paid to the beneficiary, if living, designated in writing and filed with the board at the time of election of the optional form of payment. Payment to the designated beneficiary shall terminate upon the death of the designated beneficiary. The amount of the reduced pension payable to the retirant shall reflect an actuarial reduction in the standard form of pavment based on the age of the member and the age of the beneficiary, such that the total value of the benefit payable to the retirant and beneficiary is actuarially equivalent to the standard form of pavment to the retirant. The election of an optional form of pavment under this subsection (c) must be in writing and filed with the board prior to the date retirement is effective. Pavment will be made under the standard form of pavment if a timely election of an optional form of pavment is not made." Section 20. 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 III, Firefighters; by deleting Section 82-97 in its entirety. See. 82 97. Supplemental pension distributions-. (tea The board ef a-stees rr-.wf annuall-y authori c oupplemmtal pmsion distributions to eligible persons, the ameu-PA of which sJ1t-C11 bodetermined . of eaeh September-30 beginning September er 30, 200�1, The amount of the supplernen4al pen ien of an-eligibl"erso < ,;» be determined as fellaws! Ordinance No. 6-2012 Page 21 of 74 "1) The arraunt shall be aqual to the +„+.,1 °ligiblo p-o-rsans-€ram bonefi+ group r;,.°r;ghte, divided into the positive amount of 4westment return, if Year ending September exeeeds ghtr +b does + ° edte r „+ (2) T�., ,.a shall a + whether- the 1, � 2mep+.,1 distr;1,,,+ s C"/ 1 ° €����ir_€ � € a .,�ppl ��n based on the following f„tors. a. The ,,,.+,,.,r„ ai plan administrator chali d + the „+° of; estme„+ r°+„r„ di ffin. +1,° fiseal year „ding eaeh September 39. The rates deterzr nine pt. VII. the rater o�*°d o-n the mast reeent °.,tu r;.,l repo s -,ubinl,4ed pursuant to F.S. A'112,pt VII. b. The aetuaf3,-ar plan administrator- shall, as of September 3 n determine the amount, if.,,,,, of investment return ,,,1,;°t, after- expenses, exeeeds eight p + of the f retired benLii fesefve payment assets btA does not exeeed ten per-eent of sueh assets, (3) If the investment r°+„r„ on these assets is less et than 'ght pereen+, s e „ts el:all be �� eaffied forward to be against sal lati, „f supp'terrert-a-l--ensi,,, distfibut;, a„ the next year and ei:all sontifine to era tintil sQeh eaffy €envards-are OfAet by investmefft r°+, ms eiieeedin° eight„ +, if the net e „even ° Unfavorable, „1.,+;,.°l„ with the ° periennee4or the yeaf ended September 39,2001, and thereafter, no supplemental distfi,„+;ails reriene� fav �.>� , and the-te��si must amortize the losses until ;+ is offset by curnulati:v favor-able e Eperienees.-tithe ne t e -oumulati;elyEe ei�g with-the-experience r the , , ing perience-i o1 �epte er 0,?nn' after-off-se#-4ar all pr' c' pp' e°rr,ion d�a�tie„n—th e iar a n,���� r„r + 1 „ensio,, distr;L,,,+;a is, may-b°.,,.,de to eligible per-sons of the beflie�lu--group. if ° supplemental distr;l,,,+o report or rep eris is or ar, not state aeeepted pn-or to distribution:,, and if a defie-ieney to the fund results, the de fie ens-- > shall bye up 5), withholding and eharging-sue-h-defleieney against the next avadn b'e-suppl:x zant 1 pension distribtAion, .,less sooner- made up by agreornent between the baan-the tov,%. No-sueh awe, shall be permitted to , ntin,° rar a ptr i^d greater than +twee years f,.,Y. the date o paym t-sf a cupplomental distribution „hie resulted in a aefieien (b) if the aett ar-y or plan administratordedeternvines that may be a suppLenwnI4 distribution the the board of tfustees shall aut4wize cupplenrerrt€.' pera gn distb ions ur-'.ese the administrative expenses of distribtAion exeeed the amount available for the distribution, i w-hieh evepA, no distfibution may be authorized or-made. (e) "Eligible per-sons” are�� (1) Retie-°„+s• (il) A°+;r.,nts' estates. (d) the supplemmantal p aicn distribution, if ° shall be made on of .,1,,.,,+ May 1 arnuall-7- €4giblo Msons retired for less than one year- afe entitled to a prorata share of their suppl-eflffefitffil pension distr;but o based an the number- of months retired. A ret rant's estate is entitled to Ordinance No. 6-2012 Page 22 of 74 .non ��,„ro of the ao,.o—A ro+;r, Vc, supplemental „ r distrilfat;er base „r the number of mon4hs that !he deeeased fetir-ant reeeived a pension during the year ending the September- 30 prior to+ho retir-ant's death. (e) Swappl2mo„+al pension a;s4r butions, payable to eligible persons who ., pai4ieip nts in -- -DROP „+the time of p o„t shall be added to suet, eligible per-san's DRQP—aeee €)--8"plemo ntal pensian distributions to benefieiafies of deeeased irants shall have r s"plemental pension distribtAions ed e in the same prop V m as 1ra the r4n i , Section 21. 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 III, Firefighters; Section 82-98, to read as follows: "Sec. 82-98. Chapter 175 share accounts. (a) Individual member accounts. A separate individual member account shall be established and maintained in each group firefighter member's name effective on or after October 1, 1998. Firefighter DROP participants shall participate or continue to participate in this supplemental plan and the accounts for such participants shall be treated as individual member accounts under this section 82-98. (b) Share account funding. (1) Each individual member account shall be credited with a share in accordance with the formula set forth in subsection (3) below of all available tax revenues received from F.S. ch. 175, from October 1, 1998, and thereafter. (2) Available tax revenues shall be those moneys received pursuant to F.S. ch. 175, which, according to the board actuary, have not been otherwise committed for benefits for members. Notwithstanding any other provision of this section 82-98, in the event there are no available tax revenues or no monies received pursuant to F.S. ch. 175 after Mav 1, 2012, the then-existing member share accounts shall be administered by the board in accordance with this section 82-98, except that there shall be no annual allocations of ch. 175 tax revenues to the existing member accounts. No new member accounts shall be established on or after Mav 1, 2012. (3) In addition, any forfeitures as provided in subsection (e) below shall be credited to the individual member accounts in like manner. (c) Annual allocation of accounts. (1) Moneys shall be credited to each individual member account in an amount directly proportionate to the number of pay periods for which the member or DROP participant was paid compared to the total number of pay periods for which all members and DROP participants were paid, counting the pay periods in the calendar year preceding the date for which F.S. ch. 175, tax revenues were received. (2) Upon receipt of the annual disbursement of tax revenues from F.S. ch. 175 each individual member account shall be adjusted to reflect the earnings or losses resulting from investment, as well as reflecting costs, fees and expenses of administration. (3) Until a member becomes vested, the investment earnings or losses credited to or debited from the individual member accounts shall be in the same percentage as are earned or lost by the Ordinance No. 6-2012 Page 23 of 74 total investment earnings or losses of the retirement plan for benefit group firefighter members as a whole as reported by the fund's investment monitor/consultant less administrative expenses, unless the board dedicates a separate investment portfolio for F.S. ch. 175, share accounts, in which case the investment earnings or losses shall be measured by the investment earnings or losses of the separate investment portfolio. Once vested, a member may, on a semi-annual basis, chose for his/her share account assets to be invested in the system investment method or the self- directed investment method. The board shall by policy establish the procedure for such elections. The two investment methods are: a. The system investment method The share accounts shall accrue in the retirement system on behalf of the member, plus earnings (losses) at the rate of investment return earned (or lost) on pension fund assets as reported by the fund's investment monitor/consultant for the period that the share account assets remain in the plan. Earnings are credited on a quarterly basis. Share account assets are commingled with the pension fund assets for investment purposes and are subject to payment of prorata share of the fund's administrative expenses. b. The self-directed investment method. For members who are vested in the share account benefit on or after May 12, 2009, each member shall have an individual investment account to which his or her share account benefits shall be transferred. The board shall select a third-party administrator or provider for this purpose. After such selection, each member shall direct the manner in which the amounts in his or her individual investment account shall be invested from an array of options selected by the board. The assets invested in the self-directed method are subject to the administrative and investment management fees assessed by the third-party administrator or provider. (4) Costs, fees, and expenses of administration shall be debited from the individual member accounts on a proportionate basis, taking the cost, fees, and expenses of administration of the retirement system for firefighter members as a whole, multiplied by a fraction, the numerator of which is the total assets in all individual member accounts and the denominator of which is the total assets of the fund as a whole. The proportionate share of the costs, fees, and expenses shall be debited from each individual member account on a pro rata basis in the same manner as set forth in subsection(3)a. (5) If the entire balance of an individual member account is withdrawn before September 30 of any year, there will be no adjustment made to that individual member account to reflect either investment earnings, losses, costs, fees, or expenses of administration. (d) Eligibility for benefits. Any member or DROP participant who terminates employment shall, upon application filed with the fifefighte board, be entitled to be paid 100 percent of the value of his individual member account, provided the member meets any of the following criteria: (1) The member is eligible to receive a pension; or (2) The member has ten or more years of credited service and is eligible to receive either: a. A disability pension as provided in section 82-100; or b. A duty disability pension as provided in section 82-101. Ordinance No. 6-2012 Page 24 of 74 (e) Forfeitures. Any member who has less than ten years of credited service and who is not eligible for payment of benefits after termination of employment credited service shall forfeit his or her individual member account. The amounts credited to said individual member account shall be redistributed to the other individual member accounts as set forth in subsection (c)(1) above. (f) Payment of benefits. The normal form of benefit payment shall be a lump sum payment of the entire balance of the individual member account: or, upon the written election of the member or DROP participant, upon a form prescribed by the board,payment may be made either over three years in annual installments or in the form of a monthly annuity. (g) Death of a member. If a member or DROP participant dies and is eligible for benefits from the individual member account, the entire balance of the individual member account shall be paid in a lump sum to the member's beneficiaries. (h) Rollovers from qualified plans. A member of benefit group firefighter may roll over all or part of his or her assets in another qualified plan to his or her chapter share account provided all of the following requirements are met: (1) Some or all of the amount distributed from the other plan is rolled over to this plan no later than the 60th day after distribution was made from such plan or, if distributions are made in installments, no later than the 60th day after the last distribution was made. (2) The amount rolled over to the share account does not include any amounts contributed by the member to such plan on a post-tax basis. (3) The rollover is made in cash. (4) The member certifies that the distribution is eligible for a rollover. (5) Amounts which are accepted as a rollover to this retirement system shall, along with any earnings allocated to the share account, be fully vested at all times. The rollover may also be made to a member's individual share account from individual retirement accounts qualified under Internal Revenue Code section 408 when the individual retirement account was merely used as a conduit for funds from another qualified plan and the rollover is made in accordance with the rules provided in subsections (1)--(5) above. Amounts roiled over may be segregated from other retirement plan assets. The fir-efiglAe board shall separately account for gains, losses, and administrative expenses on rollovers. In addition, the retirement system may accept the direct transfer of a member's benefits from another qualified retirement plan. The retirement system shall account for direct transfers in the same manner as a rollover and shall obtain certification from the member that the amounts are eligible for a rollover or direct transfer to this retirement system. (i) Administration and Interpretation. The share accounts shall be administered by a third- party administrator as directed by the firefigh4er board. The expense of such third-party administrator shall be paid from emplovee accountsmoneys ree €d purauan**9 F.S. sh. 175. Interpretation of this part by such administrator or administrators shall be resolved as directed by the firefigWe board." Section 22. The Code of Ordinances of the Town of Palm Beach is hereby amended at Chapter 82, Personnel; Article 11, Employee Benefits; Division 2, Retirement System; Subdivision III, Firefighters; Section 82-99, to read as follows: Ordinance No. 6-2012 Page 25 of 74 "Sec. 82-99. Deferred retirement option program for firefi hters. (a) Generally. In general, and subject to the provisions of this section, the deferred retirement option program, hereinafter referred to as the DROP, is a program under which an eligible firefiahte ...ember of the retirement system may elect to retire, participate, and become a retirant of the retirement system, deferring receipt of retirement benefits while continuing employment credited service. For members who are DROP participants or have entered the DROP after May 12, 2009, a member may, on a semi-annual basis, chose for his/her DROP account assets to be invested in the system investment method or the self-directed investment method. The board shall bye policy establish the procedure for such elections. The two investment methods are: (1) The system investment method. The deferred monthly benefits of a DROP participant shall accrue in the retirement system on behalf of the DROP participant, plus earnings (losses) at the rate of investment return earned (or lost) on pension fund assets as reported by the fund's investment monitor/consultant during the period of DROP participation. Earnings are credited on a quarterly basis. DROP assets are commingled with the pension fund assets for investment purposes and are subject to payment of pro-rata share of the fund's administrative expenses. (2) The self-directed investment method. For members entering the DROP after May 12, 2009, each DROP participant may choose to have a self directed individual investment account to which his or her monthly benefits shall be transferred. The board shall select a third-party administrator or provider for this purpose. After such selection, each participant shall direct the manner in which the amounts in his or her self-directed individual investment account shall be invested from an array of options selected by the board. DROP assets invested under the self- directed investment method shall receive DROP statements as prepared and distributed by the third party administrator or provider. The assets invested in the self-directed method are subject to the administrative and investment management fees assessed by the third-party administrator or provider. (3) During the period of DROP participation, neither the town nor the DROP participant is obligated to make additional contributions to the retirement system on behalf of the DROP participant. Upon termination of employment and participation in the DROP, the DROP participant shall receive his or her total DROP benefits and begin to receive his or her previously determined normal retirement benefits. Employment while participating in the DROP does not guarantee employment for any specified period. A DROP participant is a retirant of the retirement system. (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 and provided that: (1) Election to participate may be made when the member first reaches normal retirement date or age, as follows:. a. Members who were emploved by the town and not participating in the DROP on Mav 1, 2012 shall be eligible to participate in the DROP upon attaining af4e 50: or the date on which the member's age to last completed month plus credited service totals 65 vears or more: or 20 vears of credited service regardless of aye. Upon entry into the DROP the benefit pavable to such member's DROP account shall be the frozen accrued benefit based on credited service prior to Ordinance No. 6-2012 Page 26 of 74 Mav 1, 2012. The accrued benefit based on credited service on and after Mav 1, 2012 shall be navable to the member's DROP account, or directiv to the member if DROP participation has ceased, upon attaininv aRe 65.E€ar a r-e-:�°r who first r-eaehed normal retirement a„+° of age prior to the eff-eetive date of the ordinanee ffom whieh th ctic'n is defived, eleetion to pai4ieipate may be made within 84 months of the eff-eetive da4e of the ordinanee from whieh this seetion is derived; p ;a°a h°••eve ° Such member who fails to make an election within 84 months after the member has 20 years of credited service shall forfeit all rights to participate in the DROP. b. Members hired on or after Mav 1, 2012 shall be eligible to participate in the DROP upon attaining ate 65 with 10 or more vears of service (2) There is no break in service to the town between the member's last working day as an employee and first day as a retirant and DROP participant. (c) Participation in the DROP. (1) The date on which participation in the DROP must terminate is within 120 months of the commencement of the election period provided in subsection (b)(1) of this section. Participation in the DROP may not exceed a maximum of 60 months. No DROP participant may continue to be eligible to participate in the DROP for more than 60 months or for any time after 120 months following the date on which the member first reaches normal retirement age or date, unless the member first reached normal retirement age or date prior to the effective date of the ordinance from which this section derives. (2) Submission of required information. Upon electing to participate in the DROP, the member shall submit on forms required by the retirement system and/or the third-party administrator: a. A written election to retire; b. A written election to participate in the DROP; C. An irrevocable resignation from service to the town and withdrawal from the DROP effective after no more than 60 months participation in the DROP; d. A properly completed DROP application for service retirement as provided in this section; and e. Any other information required by the retirement system or by the third-party administrator. (3) Re-employed retirants. Re-employed retirants of the town's retirement system are not eligible to participate in DROP. (d) Compensation for work performed while participating in the DROP. Starting pay shall be at the base pay rate in effect on the employee's last working day of employment, prior to participation in the DROP. Job performance will be evaluated under the town's pay for performance system, and performance pay increases will be permitted as established by town policy. General pay increases shall also be awarded, as approved by the town council and the town manager. Performance pay increases and general pay increases Ordinance No. 6-2012 Page 27 of 74 awarded to DROP participants will be reflected in their salary but will not be reflected in pension payments made to DROP accounts or made after DROP participation. (1) Effective with the date of DROP participation, the member's initial normal monthly pension benefit, calculated in accordance with section 82-95 and based on creditable service and average final compensation and the effective date of retirement, shall be fixed. Retirement system amendments which become effective after the establishment date of participation in the DROP will not be applicable to the DROP participant, unless so stated by the amendment. The monthly pension benefit (minus any reduction as determined by the board of trustees as provided by subsection(h) of this section), cost of living adjustments, interest and earnings thereon, if any, shall accrue monthly in the retirement system or the individual investment account as applicable. Interest under the system investment method only shall accrue at an effective annual rate to be determined hereunder as set forth in subsection (h) of this section, and will be compounded monthly, on the prior month's accumulated ending balance, up to the month of termination of the DROP or death. (2) The monthly pension benefits payable to the DROP (minus any reduction as determined by the board of trustees as provided by subsection (h)) and interest thereon, if any, shall continue to accrue in the DROP until the established termination date of the DROP, or until the DROP participant terminates employment or dies prior to such date. For DROP participants who are invested under the system investment method described above in subsection (a)(1), a separate accounting of each DROP participant's accrued benefits under the DROP shall be calculated and provided to DROP participants at least quarterly. DROP assets invested under the self-directed investment method shall receive DROP statements as prepared and distributed by the third party administrator or provider. (3) Employee benefits, other than benefits under the retirement system, which are normally granted to employees, will be provided to DROP participants. Such DROP participants are not members of the retirement system. (4) At the conclusion of the participant's DROP, any credits made to a DROP participant's account will cease. Membership in the DROP will automatically terminate 60 months after the effective date of participation in the DROP, except as provided in subsection (c)(1) above. DROP participants may elect to discontinue membership in the DROP at any time, provided a two-week written notice of termination of employment has been submitted to the town and notice has been submitted to the plan administrator and the third-party administrator. (5) At the conclusion of the participant's DROP, participants in the self-directed investment method shall exercise such options as provided by the third-party administrator's plan; or for participants in the system investment method, the retirement system may distribute the participant's total accumulated DROP benefits, subject to the following provisions: a. The retirement system shall receive verification that such DROP participant has terminated membership in the DROP. b. The terminated DROP participant, or if deceased, such DROP participant's named beneficiary, shall elect on forms provided by the retirement system to receive payment of the DROP benefits in accordance with one of the options listed below. Ordinance No. 6-2012 Page 28 of 74 1. Lump sum. All accrued DROP benefits, plus interest and earnings, if any, less withholding taxes remitted to the United States Internal Revenue Service, shall be paid to the DROP participant or surviving beneficiary. 2. Direct rollover. All accrued DROP benefits, plus interest and earnings, if any, shall be paid from the DROP directly to the custodian of an eligible retirement plan as defined in section 402(c)(8)(B) of the United States Internal Revenue Code. However, in the case of an eligible rollover distribution to the surviving spouse of a deceased DROP participant, an eligible retirement plan is an individual retirement account or an individual retirement annuity as described in section 402(c)(9) of the United States Internal Revenue Code. 3. Partial lump sum. A portion of the accrued DROP benefits shall be paid to the DROP participant or surviving spouse, less withholding taxes remitted to the United States Internal Revenue Service, and the remaining DROP benefits shall be transferred directly to the custodian of an eligible retirement plan as defined in section 402(c)(8)(B) of the United States Internal Revenue Code. However, in the case of an eligible rollover distribution to the surviving spouse of a deceased DROP participant, an eligible retirement plan is an individual retirement account or an individual retirement annuity as described in section 402(c)(9) of the United States Internal Revenue Code. The proportions shall be specified by the DROP participant or surviving beneficiary. C. The form of payment selected by the DROP participant or surviving beneficiary complies with the minimum distribution requirements of the United States Internal Revenue Code and payments begin no later than the date on which the participant reaches age 70 years and six months. (6) The accrued benefits of any DROP participant, and any contributions accumulated under such program, shall not be subject to assignment, execution, attachment, or to any legal process whatsoever, except for income deduction orders and federal income tax levies. (7) DROP participants shall not be eligible for disability retirement benefits as provided in sections 82-100 or 82-101. In the event a DROP participant becomes incapacitated for employment by the town as defined under sections 82-100 or 82-101, the DROP participation will terminate, and the former DROP participant will elect one of the alternatives under subsection(d)(5)b of this section. (8) The effective date of retirement of a DROP participant shall be the day selected by the member to begin participation in the DROP. (e) Death benefits under the DROP. (1) Upon the death of a DROP participant, the named beneficiary shall be entitled to apply for and receive the accrued benefits in the DROP as provided under subsection (d)(5)b of this section. (2) The pension benefit paid to the DROP during the month of a DROP participant's death shall be the final pension benefit credited for such DROP participant. (3) Eligibility to participate in the DROP terminates upon the death of a DROP participant. If the DROP participant dies on or after the effective date of enrollment in the DROP, but prior to Ordinance No. 6-2012 Page 29 of 74 the first monthly benefit being credited to the DROP, retirement system benefits shall be paid in accordance with section 82-103. (4) A DROP participant's survivor shall not be eligible for retirement system death benefits as provided in section 82-104. (f) Cost of living adjustment. The DROP participants' normal pension benefit shall be increased as provided in section 82-63(b). (g) Renewed membership. Participants of the DROP will not be permitted to be members of the town's retirement system. Contributions that normally would be made by the employee and the town will not be paid into the retirement system upon an individual's election to participate in the DROP. (h) Administration of the program. The board of trustees shall make such rules as are necessary for the effective and efficient administration of this subsection. The board of trustees shall not be required to advise participants of the federal tax consequences of an election related to the DROP but may advise participants to seek independent advice. (1) The DROP will be cost-neutral to the town. To maintain the cost-neutral basis to the town, the earnings (losses) and any reduction in the DROP participants' monthly pension benefits payable to the DROP will be reviewed by the board of trustees from time to time as other actuarial assumptions are reviewed. All costs of the DROP and any increase or decrease in the cost of administering the DROP will be absorbed by: a. A change of the or establishment of a reduction of the DROP participants' monthly pension benefits payable to the DROP; and/or b. An increase in the fees charged by the third-party administrator to the individual investment accounts; As determined by the board of trustees with approval by the town council. (2) Administrative expenses shall be debited from the individual member accounts on a proportionate basis, taking the cost, fees, and expenses of administration of the fund as a whole, multiplied by a fraction, the numerator of which is the total assets in all individual member accounts and the denominator of which is the total assets of the fund as a whole. (3) Notwithstanding anv other provision of this section 82-99 or the Code. a member who receives anv DROP benefits for the portion of their pension benefits earned on or after Mav 1, 2012 shall be an at-will employee for the entire DROP period." Section 23. 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 III, Firefighters; Section 82-100,to read as follows: "Sec. 52-100. FirefiLyhters: Disability retirement. (a) Upon the application of a member or the member's department head, a firefighter who becomes incapacitated for employment by the town by reason of a personal injury or disease may be retired by the board of trustees subject to the following conditions: Ordinance No. 6-2012 Page 30 of 74 (1) The member has ten or more years of credited service in force or was emploved by the town and not participating in the DROP on Mav 1, 2012; (2) The member is medically examined by a duly-qualified physician or surgeon selected by theme board of trustees for that purpose; (3) The physician or surgeon certifies to the r;"i== board that the member is wholly prevented from rendering useful and efficient service as a firefighter, and he is likely to remain so disabled continuously and permanently; and (4) The board of trustees concurs with the certification of the physician or surgeon. (b) Upon disability retirement, a member shall be paid a pension computed according to section 82-95, provided that the disability pension benefit payable to a member of the benefit group firefighter shall not be less than 30 percent of the member's average final compensation at the time of disability, which minimum amount shall be applicable for at least five years if the member attains such age for retirement less than five years after disability benefits commence. (c) A member shall not be entitled to receive disability pension benefits if the disability is a result of: (1) Excessive or habitual use of drugs, intoxicants or narcotics by the member; (2) Injury or disease sustained by the member while willfully and illegally participating in fights, riots or civil insurrections, or while committing a crime; (3) Injury or disease sustained by the member while serving in any armed forces; (4) Injury or disease sustained by the member after his employment has terminated." Section 24. The Code of Ordinances of the Town of Palm Beach is hereby amended at Chapter 82, Personnel; Article Il, Employee Benefits; Division 2, Retirement System; Subdivision III, Firefighters; Section 82-102, to read as follows: "Sec. 82-102. Continuation subject to re-examination; return to employment; effect of gainful employment. (a) The board of trustees may require a disability retirant to undergo periodic medical examination by or under the direction of a physician selected by the board of trustees if the disability retirant has not attained the age for retirement required in section 82-94. If a disability retirant refuses to submit to a medical examination,payment of the pension may be suspended by the board until withdrawal of the refusal. Should refusal continue for one year, all the disability retirant's rights in and to a disability pension may be revoked by the board. The terminated disability retirant may be restored to active employment credited service. A disability pension shall be discontinued if, following the medical examination, the physician certifies that the disability retirant is no longer disabled, and the board concurs in the certification of the physician. The town shall be allowed reasonable latitude in placing the terminated disability retirant in a position commensurate with the position held at time of disability retirement. (b) A disability retirant who has been restored to employment credited service as provided in subsection (a) of this section shall again become a member of the retirement system if employed in a membership position. The disability retirant's credited service at time of retirement shall be restored to full force. Service shall be credited for the period the disability retirant was being Ordinance No. 6-2012 Page 31 of 74 paid a disability pension, if the provisions of section 82-101 were applicable; otherwise credited service shall not be given for the period of disability retirement. (c) A terminated disability retirant who does not return to town employment and who had ten or more years of credited service at time of disability retirement shall become a vested former member and entitled to deferred retirement as provided in section 82-58. (d) E eept to the extent prohibited b , F S c". 17-5-,41f a disability retirant is or becomes engaged in gainful occupation, business or employment, paying more than the difference between the retirant's average final compensation and the amount of pension, the disability pension shall be reduced to the amount of the difference. Should the retirant's earnings later change, the disability pension shall be adjusted. The limitation of this subsection shall apply until the retirant meets an age and service requirement for retirement as provided in section 82-94." Section 25. 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 III, Firefighters; Section 82-103, to read as follows: "Sec. 82-103. Firefighters: Death after retirement; automatic survivor pension to minor children and/or surviving spouse. (a) For members who retired or entered the DROP after September 30. 1995 and prior to May 1, 2012, members who terminated emplovment with 10 or more vears of credited service Prior to May 1, 2012, and 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 ernWoved by the town and not participating in the DROP on that date. death benefits after retirement shall be pavable as follows: (1,) Surviving children. a.(I)—The surviving children of a deceased retirant shall be paid a pension terminating upon the attainment of age 18 or death, if the following conditions are satisfied: Ia. The retirant retired after September 30, 1995. 2b. A valid election of optional form of payment under section 82-105 is not in effect. b.(-2)--Payment of the pension shall be made for months beyond age 18 years, but not beyond the month in which age 25 is attained, if a pension payment would not otherwise be made for the month under the provisions of subsection(b) of this section. c.()—The amount of each surviving child's pension is 25 percent of the retirant's pension at time of death, not to exceed an equal share of 75 percent of the retirant's pension when there are four or more surviving children being paid. Pension payments shall be made to the legal guardian of each child. (2b) Surviving spouse. The surviving spouse of a deceased retirant shall be paid a pension terminating upon death. The amount of a surviving spouse's pension for a month is the difference, if any, between 75 percent of the retirant's pension and the aggregate amount paid to surviving children for the month. Ordinance No. 6-2012 Page 32 of 74 (3e) Ten year certain. If a retirant dies within ten years of retirement, the total monthly payments due under subsection (a) and/or (b) above shall not be reduced from that which may have been due to the retirant until the tenth anniversary of the retirant's retirement date. (b) For 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, who were emploved by the town and not participatina in the DROP on that date, death benefits after retirement shall be pavable as follows: (1) Survivinz children. a. The surviving children of a deceased retirant shall be paid a pension terminating upon the attainment of age 18 or death, if the following conditions are satisfied: 1. The retirant was employed and not varticipatina in the DROP on May 1, 2012 and retired thereafter. 2. A valid election of optional form of payment under section 82-105 is not in effect. b. Payment of the pension shall be made for months beyond age 18 years, but not beyond the month in which age 25 is attained, if a pension payment would not otherwise be made for the month under the provisions of subsection (b) of this section. C. The amount of each surviving child's pension is 25 percent of the retirant's pension based on the retirant's frozen accrued benefit as of May 1, 2012, not to exceed an equal share of 75 Percent of the retirant's pension when there are four or more surviving children being paid. Pension pavments shall be made to the legal guardian of each child. (2) Surviviniz spouse. The surviving spouse of a deceased retirant shall be raid a pension terminating upon death. The amount of a surviving spouse's pension for a month is the difference, if any, between 75 percent of the retirant's pension based on the retirant's frozen accrued benefit as of May 1, 2012, and the aggregate amount paid to surviving children for the month. (3) Ten year certain. If a retirant dies within ten years of retirement, the total monthly payments due under subsection (a) and/or (b) above shall not be reduced from that which may have been due to the retirant until the tenth anniversary of the retirant's retirement date. (c) 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 emploved by the town and not participating in the DROP on that date, and members hired on or after May 1, 2012, may elect an optional form of benefit pursuant to section 82-96(c) for benefits based on credited service on and after May 1, 2012, but there shall be no automatic survivor Pension for death after retirement based on such credited service on and after Mav 1, 2012." Section 26. 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 I11, Firefighters; Section 82-104,to read as follows: "Sec. 82-104. Firefighters: Death while an employee of the town; automatic survivor pension to minor children and/or spouse. (a) Surviving children. Ordinance No. 6-2012 Page 33 of 74 (1) The surviving children of a deceased member shall be paid a pension terminating upon the attainment of age 18 or death if the following conditions are satisfied: a. The member has ten or more years of credited service, or was emploved by the Town and not participating in the DROP on Mav 1, 2012, and dies while in the employ of the town aftef September 30, 1995; and b. A valid election of optional form of payment under section 82-105 is not in effect. (2) Payment of the pension shall be made for months beyond such a beneficiary age of 18 years, but not beyond the month in which the age 25 is attained, if a pension payment would not otherwise be made for the month under the provisions of subsection(b) of this section. (3) The amount of each surviving child's pension, which shall be paid to the legal Ruardian of each child, is: a. For members who attained normal retirement eligibility based on credited service as of May 1, 2012, excludiniz credited service purchased aursuant to section 82-54, and who were employed by the town and not participating in the DROP on that date, 25 percent of the amount of pension computed according to section 82-95, based on the deceased member's average final compensation and credited service at time of death. A child's pension shall not exceed an equal share of 75 percent of the amount of pension computed according to section 82-95, based on the deceased member's average final compensation and credited service at time of death, where there are four or more surviving children being paid. b. For members who did not attain normal retirement eli6bility based on credited service as of May 1, 2012, excludinj4 credited service purchased pursuant to section 82-54. and who were employed by the town and not participating in the DROP on that date, 25 percent of the amount of pension computed according to section 82-95, based on the deceased member's frozen accrued benefit as of May 1, 2012, plus 25 percent of the amount of pension computed according to section 82-95, based on the deceased member's accrued benefit for credited service on or after Mav 1, 2012. A child's pension shall not exceed an equal share of 75 percent of the amount of Pension computed accordini4 to section 82-95, based on the deceased member's frozen accrued benefit as of May 1, 2012, plus 75 percent of the amount of pension computed accordinja to section 82-95, based on the deceased member's accrued benefit for credited service on or after Mav L 2012, where there are four or more surviving children beini4 paid. C. For members hired on or after Mav 1, 2012, 25 percent of the amount of pension computed according to section 82-95, based on the deceased member's accrued benefit for credited service on or after Mav 1, 2012. A child's pension shall not exceed an eaual share of 75 percent of the amount of pension computed accordiniz to section 82-95. based on the deceased member's accrued benefit for credited service on or after Mav 1, 2012, where there are four or more surviving children being paid. Pension payments-steal'.he rnade to the legal guardian o f ea eh ,.hild, (b) Suf•viving spouse. (1) The surviving spouse of a deceased member shall be paid a pension terminating upon death if the following conditions are satisfied: Ordinance No. 6-2012 Page 34 of 74 a. The member has ten or more years of credited service, or was emploved by the Town and not narticipatina in the DROP on Mav 1, 2012, and dies while in the employ of the town; b. A valid election of optional form of payment under section 82-105 is not in effect; and C. The member was married to the surviving spouse at the time of death. (2) Payment of a surviving spouse's pension shall commence the first day of the month following the date the deceased member would have met an age and service condition for normal retirement in the absence of death. (3) The amount of a surviving spouse's pension is: a. For members who attained normal retirement eligibility based on credited service as of May 1, 2012, excludina credited service purchased pursuant to section 82-54. and who were emploved by the town and not participatina in the DROP on that date, the difference, if any, between 75 percent of the retirant's pension computed according to section 82-95, based on the deceased member's average final compensation and credited service at time of death, and the aggregate amount paid to surviving children for the month. b. For 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 emploved by the town and not participating in the DROP on that date, the difference, if anv, between 75 percent of the retirant's pension computed according to section 82-95. based on the deceased member's frozen accrued benefit as of Mav 1, 2012, plus 75 percent of the retirant's pension computed according to section 82-95, based on the deceased member's accrued benefit for credited service on and after of Mav 1, 2012, and the aggregate amount paid to surviving children for the month. C. For members hired on or after Mav 1, 2012, the difference, if anv, between 75 percent of the retirant's pension computed according to section 82-95, based on the deceased member's accrued benefit for credited service on and after Mav 1, 2012, and the aggregate amount raid to surviving children for the month. (c) Ten year certain. If survivors of a deceased member are due payments under subsection (a) and/or (b) above, they shall not be reduced until the tenth anniversary of the commencement of payments." Section 27. The Code of Ordinances of the Town of Palm Beach is hereby amended at Chapter 82, Personnel; Article I1, Employee Benefits; Division 2, Retirement System; Subdivision III, Firefighters; Section 82-105,to read as follows: "Sec. 82-105. Firefighters: Elective survivor pension. (a) The elected surviving beneficiary of a deceased member shall be paid a pension terminating upon death if the following conditions are satisfied: (1) The member has elected a survivor beneficiary. (2) The member dies while in the employ of the town with at least ten years of credited service, or the member was emploved by the Town and not participating in the DROP on Mav 1, 2012 and thereafter dies while in the emplov of the town. Ordinance No. 6-2012 Page 35 of 74 (b) The election of a survivor beneficiary shall be in writing and filed with the human resources department . The election of a survivor beneficiary shall be null and void upon the member's retirement or prior termination of town employment. A member may revoke a nomination of survivor beneficiary at any time and again elect a survivor beneficiary. (c) The amount of a surviving dependent elected beneficiary's pension shall be_ (1) For members who attained normal retirement eligibility based on credited service as of Mav 1, 2012, excluding credited service purchased pursuant to section 82-54, and who were emploved by the town and not participating in the DROP on that date. a benefit computed according to section 82-95 as if the deceased member had elected optional form of payment A100 provided in section 82-96 and retired the day preceding death, notwithstanding that the deceased member may not have satisfied the section 82-94 conditions for retirement. (2) For members who did not attain normal retirement eligibility based on credited service as of Mav 1, 2012, excluding credited service purchased pursuant to section 82-54, and who were emploved by the town and not participating in the DROP on that date, a benefit computed according to section 82-95, based on the member's frozen accrued benefit as of Mav 1, 2012 plus the benefit based on the member's credited service on and after that date. as if the deceased member had elected optional form of pavment A100 provided in section 82-96 and retired the day preceding death, notwithstanding that the deceased member may not have satisfied the section 82-94 conditions for retirement. (3) For members hired on or after Mav 1, 2012, a benefit computed according to section 82- 95 based on credited service on and after that date computed as if the deceased member had elected optional form of pavment A100 provided in section 82-96 and retired the day preceding death, notwithstanding that the deceased member may not have satisfied the section 82-94 conditions for retirement." Section 28. 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 IV, Police Officers, by deleting Sections 82-110, 82-111, 82-112 and 82-113 in their entirety. See. 82 110.n Poll oereer board trustees 1' board f " ff; board" th ail " shall co6i3Slst of the following individuals! (1) Two mb,ers . re.l 1,., l,ene-11 b po—Ijec of-ner-�to be by niic-mcbers of that by- benefit (2) Two legal r-esidents of+rt e town,to be appai„+°a by the+.,w eoun ;1 (3) The fifth, m mb e of the line „ff eer board shall be i.hose„ by a majority of the pre viou� r yr four irwrnybors and sucb per:,on'a :pane shall be; subrm.<<ed to the +,,.,.,, eouneil Which, as ministerial duty, shall appai„+ sueh sue person to +hc police „ffieer board as its frfth nx-.-nber: (b) Eleetio,,s of member +rusteos .hall be held in aeeor-danee with rules adopted by the Police off eer board- and with F Q ch. 1 Q5. Ordinance No. 6-2012 Page 36 of 74 (c) The p„lice eff;eer heard shall m.,et at least rthly shall „dept its rates of "d Nall keep z-eC6id s-if proeeedings. Three tru stees shall nv„sti+ute ° quorum at any et;„ of the board, and at least three eoneurrin gate, shall b-C fleeessary decis6�on by the heard. E eb, +ridstee sha'1 bo entitled to-one vote on eaek-questiebefore the board.Tl,o trustee, shall n + -___-.e -- ✓ -__--„ ns-t-e„ -,,+ ,-.y expenses and per--diem a, pravided by state V6r. poliee „ff ee l,e rd shall b, a legal „+;+„ .th in addition to other-powers responsibilities „+„;„ed b,ere;n and the r xr.- and rospans b,;l;t;es set fo h in F.S. ah. 185, the power to bring and defend lawsuits of every kind, nature and deseription, and to admiffiste separate plans. for the b,er,ef;+of;t;,mem-ern an r-et rants (e) If a elaim f benefits is denied by the poliee eff;eer board, the claimant Nall be notified o dial, ir. ° iting, within 30 days of the board's aetior,. The natifieation shall ,a+ forth the reasons for denial. The-c-11ainra,t*bay-i pea1the --l—ial and requerst a hearing befofe-Ihe boar The appeal shall be in rating to the +e,,,,, c1erlc and filed within 90 days of the board's rd's denial. The request shall ,.+,;, r;++e„ statement ,f e Eiabl;art'” position re rd;,,n the-el-aim. T1,8 beard shall ,e'' dµle a hears within 60 days of reeeipt of the appeal. See: 1 111. Term of offiee9 oath of offiee,; vacaney. (a) The regular term of ffi,.e of member elected-trio tees of the poliee ff eer board d appointed trustees shall be two years and the),r~, eed n-: the ,ol: e;- (b) Each trustee shall, bafere assuming the d„ties of trustee, ^ 1el;fy by taking an oath of offer t"e administered by the te,,,,, elery (e)A vas aney shall oeeur on the poliee „ff eer 1,P (4),,momber elected trustee e n + b,e ., ,r,l,er of benefit group poliee eff;eer. (2) Any member eleeted-trustee or the h memb-or of-the-poliee off eer r.,,rd fn;ln to attend three eonseoulive meetings of the board unless i-a eaeh ease exeused for eatise by the trustees attending the mecting; (3) Any town citizen or lag al resident-appointed by the te,,.,., , ei fails to real„s"a3h, and (4) A , trustee resigns ed from off e if,, the poliee off;. r board, the vaeaney shell be filled within 30 d for the, ed tdrm, in the oame ma iner as the position, previously filled See. 82 112. Offieers, ad tr-ati �e a eyes: The of eves and employed say.iees of the pol1Ve off eer heard shall be ._ll follows: (1tGhah-. The pe11wee off;.er "oar d shal' aru ually eleet a c'hair and-a-ehair pro tuts Members. (2) Seereta;y. The poliee offieer—beard ohall aru ua: from amang its members. 3) F4nEtnC-£' dii-eetoi- and tweaww-er. The town finanee cdireetoei and-ti-rrcas; lrer ahall-be ce d;reeter an t,.casurcr af-the police qffieer board, „less the poliee eff;eer board delegates s eb, Ordinance No. 6-2012 Page 37 of 74 a play adlinistfater. The sets, other than ,,, efaling n ,.,ts, shah bo plaeed in+l,o rated of a nationally ehai e ed bar'{ ar±adst eempany. The board may appa r_t a plat; adrn nistrutgr to administef the op--rating aeeottnts at the fund's (4)Legadviser—Thc police or�eef board m ploy legal eaun3el at the fund's expense. (5) Aetua y. The p„1; off;, f bear shall appoint ana eompensate an aetuafy who shall be +1,0 + 11 1 advisor the board regarding the efat of the r +;, m „+ ,I-Aer on an astuar�l leLSl ellSelll u N N 1 bass, aroma shal_?porfofm stieh no 0 r-equired in that , etion. The y€ "aetuW as used in this afticle shall rnaan a tn=bcr a f the A mer.;,,a A eademy of A etua.ion whD has tuarial see and has at least five years of relo„n„+ pension as aarial expofienee. n paftne,ship of eorpofafiefl- may be individual who moo+n the „ ..o. ing qu li fie LLL1t,11U. (6)-46 , vag. The paliee offleer pal beafd m efflploy sueh sue professional and „truer ser fleas as are r-equifed for the proper-ad strat o of the retirement system at the fiind's expe-nsa;- (7) T yestnie nt eans-Hltaw The p9liee offieef 11 . ,1 strap employ an investment , „1+n,1+ at the fund's expense. "- 113. !wvestment Upon eonsultation .,.;+1 its ; on+mor+ advisors and n+nff 111 board may o 00 l the lim;+n+;or,n on; estments in eonunon stook and a ,1;+.,1 stoe r n,11.zr ca`1-rill F.S. ch, 185. Section 29. 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 IV, Police Officers; Section 82-114, to read as follows: "Sec. 82-114. Retirement age and service conditions for police officers. (a) A police officer may retire upon satisfaction of each of the following requirements: (1) The police officer has filed written application for retirement with the board setting forth the date, not less than 30 days nor more than 120 days subsequent to the execution and filing thereof, retirement is to be effective. (2) Unless the police officer is an applicant for a DROP, the police officer terminates all town employment prior to the date retirement is to be effective. (3) The police officer has met an applicable age and service condition for retirement. (b) The age and service conditions for normal retirement are as follows: 1. Members who attained normal retirement eligibility based on credited service as of Mav 1, 2012, excluding credited service purchased pursuant to section 82-54, and who were emploved by the town and not varticivatina in the DROP on that date, shall be eligible for normal. retirement upon attaining the pollee officer has a4tamed age 50 with years or older and has ten or more years of credited service; or when the i's-member's age to last completed month plus credited service totals 65 years or more and the memberi-ndiv-iclual has ten or more years of credited service; or when the memberi3oliee ^ffi^°r has 20 or more years of credited service. Ordinance No. 6-2012 Page 38 of 74 2. Members who did not attain normal retirement eli6bility 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 elis4ible for normal retirement upon attaining ate 50, or when the member's aRe to last completed month plus credited service totals 65 vears or more, or upon completion of 20 vears of credited service regardless of aye, 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 Mav 1, 2012 upon attaining ate 65 with ten or more vears of credited service. 3. Members hired on or after Mav 1, 2012, shall be elij4ible for normal retirement upon attaining ate 65 with ten or more vears of credited service." Section 30. 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 IV, Police Officers; Section 82-115,to read as follows: "Sec. 82-115. Amount of pension—police officers. (a) The amount of a member's or a vested former member's pension under the standard form of payment shall be equal to the sum of separately determined amounts for which the police officer has credited service in force, and in no event shall the amount of a member's or a vested former member's pension under the standard form of payment be less than$1,200.00 per annum. (b) The amount of pension attributable to a member who has credited service under another benefit group shall be the amount determined by calculating credited service in this benefit group plus the amount determined by calculating credited service in such other benefit group. (c) The benefit formula for police officers is: 1. For pension payments payable after October 1, 2005 to police officers who were actively employed on and after October 1, 2005 and who retired, entered the DROP, or terminated emolovment with 10 or more vears of credited service prior to Mav 1, 2012, and to police officers 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 emploved by the town and not participating in the DROP on that date, the benefit formula shall besuch date, average final compensation multiplied by the sum of 3.5 percent of credited service rendered to a maximum of 87.5 percent, plus two percent of average final compensation for credited service, if any, in excess of 43.75 years. The standard form of payment for such benefit shall be life and ten vears certain (i.e., Provided f,..ther that, unless a retirant chooses an optional form of payment under section 82-96, payments for the benefit of a retirant who dies within ten years of retirement shall continue to the retirant's desi mated beneficiary until the tenth anniversary of the retirant's retirement date. 2. For police officers who did not attain normal retirement eligibility based on credited service as of Mav 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, the benefit formula shall be 3.5 percent of average final compensation on April 30. 2012 multiplied by credited service on that date. The accrued benefit of all such police officers shall be frozen on Ordinance No. 6-2012 Page 39 of 74 May 1, 2012. The standard form of payment for the frozen accrued benefit shall be life and ten years certain. 3. For credited service on and after May 1, 2012, except as such service may be credited to members who qualify under Section 82-115 (c) 1 above, the benefit formula shall be 1.25 percent of average final compensation multiplied by years of credited service on and after that date. The standard form of payment for benefits based on credited service on and after May 1, 2012 shall be a straight life annuity, payable for the member's lifetime. 4. Police officers 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 May 1, 2012 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 prior to May 1, 2012, payable upon entry into the DROP or termination of employment and attaining eligibility for receipt of retirement benefits under the provisions of the system in effect on April 30 2012; and (2) the accrued benefit based on credited service on and after May 1, 2012, payable upon attaining age 65 with 10 or more years of credited service, and termination of employ_ ment or entry into the DROP." Section 31. 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 IV, Police Officers; Section 82-116, to read as follows: "Sec. 82-116. Optional forms of payment of a pension for Police officers. (a) Police officers who terminated employment with 10 or more years of credited service prior to May 1, 2012, and police officers 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, A member or a weed f rmer member-may elect to be paid under one of the following optional forms of payment. The election shall be in writing and filed with the board prior to the date retirement is effective. Payment will be made under the standard form of payment if a timely election of an optional form of payment is not made. (1) Optional form of payment A100--100 percent survivor pension. Under optional form of payment A100, a retirant is paid a reduced pension for life. Upon the retirant's death, the reduced pension is paid to the beneficiary, if living, designated in writing and filed with the board at the time of election of the optional form of payment. Payment to the designated beneficiary shall terminate upon the death of the designated beneficiary. The amount of reduced pension is a percentage of the amount of pension under the standard form of payment (SL). The percentage is 80 percent if the retirant and designated beneficiary are the same age on their last birthdays. The 80 percent is reduced by 0.5 percent for each year the age of the retirant exceeds the age of the designated beneficiary, to a minimum of 60 percent for differences in age of 40 or more years. The 80 percent is increased by 0.5 percent for each year the age of the designated beneficiary exceeds the age of the retired member, to a maximum of 90 percent for differences in age of 20 or more years. Ordinance No. 6-2012 Page 40 of 74 (2) Optional form of payment A50--50 percent survivor pension. Under optional form of payment A50, a retirant is paid a reduced pension for life. Upon the retirant's death, 50 percent of the reduced pension is paid to the beneficiary, if living, designated in writing and filed with the board at the time of election of the optional form of payment. Payment to the designated beneficiary shall terminate upon the death of the designated beneficiary. The amount of reduced pension is a percentage of the amount of pension under the standard form of payment. The latter percentage is 90 percent if the retirant and designated beneficiary are the same age at their last birthdays. The 90 percent is reduced by 0.25 percent for each year the age of the retirant exceeds the age of the designated beneficiary, to a minimum of 80 percent for differences in age of 40 or more years. The 90 percent is increased by 0.25 percent for each year the age of the designated beneficiary exceeds the age of the retired member, to a maximum of 95 percent for differences in age of 20 or more years. (3) Form of payment (SL)--Straight life pension. Under form of payment (SL), the retirant is paid a pension for life. The (SL) payment amount is an increased amount based on the actuarial equivalent of the life with ten-year guarantee standard form of payment computed pursuant to section 82-115(c). (4) Members may also elect to receive the following optional benefit forms: a. A75--75 percent survivor pension. Under optional form of payment A75, a retirant is paid a reduced pension for life. Upon the retirant's death, 75 percent of the reduced pension is paid to the beneficiary, if living, designated in writing and filed with the board at the time of election of the optional form of payment. Payment to the designated beneficiary shall terminate upon the death of the designated beneficiary, or upon the tenth anniversary of the retirant's retirement date, if later. The amount of the reduced pension is based on the actuarial equivalent of the standard form of payment. b. A66-213--66 213 percent survivor pension. Under optional form of payment A66-2/3, a retirant is paid a reduced pension for life. Upon the retirant's death, 66 2/3 percent of the reduced pension is paid to the beneficiary, if living, designated in writing and filed with the board at the time of election of the optional form of payment. Payment to the designated beneficiary shall terminate upon the death of the designated beneficiary, or upon the tenth anniversary of the retirant's retirement date, if later. The amount of the reduced pension is based on the actuarial equivalent of the standard form of payment. (b) Police officers 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 emploved by the town and not participating in the DROP on May 1, 2012, may elect to receive the frozen accrued benefit based on credited service prior to May 1, 2012 under one of the following optional forms of payment. The election shall be in writing and filed with the board prior to the date retirement is effective. Payment will be made under the standard form of payment if a timely election of an optional form of payment is not made. (1) Optional form of payment A100-400 percent survivor pension. Under optional form of payment A100, a retirant is paid a reduced pension for life. Upon the retirant's death the reduced pension is paid to the beneficiary, if living, designated in writing and filed with the board at the time of election of the optional form of payment. Payment to the designated beneficiary shall terminate upon the death of the designated beneficiary. The amount of reduced pension is a Ordinance No. 6-2012 Page 41 of 74 percentaize of the amount of pension under the standard form of payment (SL). The percentage is 80 percent if the retirant and designated beneficiary are the same aye on their last birthdays. The 80 percent is reduced by 0.5 percent for each year the aye of the retirant exceeds the ajQe of the designated beneficiary, to a minimum of 60 percent for differences in aye of 40 or more years. The 80 percent is increased by 0.5 percent for each year the age of the desiEnated beneficiary exceeds the aae of the retired member, to a maximum of 90 percent for differences in aae of 20 or more years. (2) Optional form of pavment A50--50 percent survivor pension. Under optional form of payment A50, a retirant is paid a reduced pension for life. Upon the retirant's death. 50 percent of the reduced pension is paid to the beneficiary, if living, designated in writing and filed with the board at the time of election of the optional form of payment. Payment to the designated beneficiary shall terminate upon the death of the desiiznated beneficiary. The amount of reduced pension is a percentai4e of the amount of pension under the standard form of payment. The latter percentage is 90 percent if the retirant and designated beneficiary are the same ai4e at their last birthdays. The 90 percent is reduced by 0.25 percent for each year the aae of the retirant exceeds the aae of the designated beneficiary, to a minimum of 80 percent for differences in aize of 40 or more years. The 90 percent is increased by 0.25 percent for each year the aze of the desij4nated beneficiary exceeds the aae of the retired member, to a maximum of 95 percent for differences in age of 20 or more years. (3) Form of payment (SL)--Straight life pension. Under form of payment (SL) the retirant is paid a pension for life. The (SL) pavment amount is an increased amount based on the actuarial eauivalent of the life with ten-vear Guarantee standard form of payment computed pursuant to section 82-95(c). (4) A75--75 percent survivor pension. Under optional form of payment A75, a retirant is Paid a reduced pension for life. Upon the retirant's death, 75 percent of the reduced pension is Paid to the beneficiary, if living, designated in writing and filed with the board at the time of election of the optional form of payment. Payment to the designated beneficiary shall terminate upon the death of the designated beneficiary, or upon the tenth anniversary of the retirant's retirement date, if later. The amount of the reduced pension is based on the actuarial equivalent of the standard form of payment. (5) A66-213--66 213 percent survivor pension. Under optional form of pavment A66-2/3, a retirant is paid a reduced pension for life. Upon the retirant's death. 66 2/3 percent of the reduced Pension is paid to the beneficiary, if living, desijanated in writing and filed with the board at the time of election of the optional form of payment. Payment to the designated beneficiary shall terminate upon the death of the designated beneficiary, or upon the tenth anniversary of the retirant's retirement date, if later. The amount of the reduced pension is based on the actuarial eauivalent of the standard form of payment. (c) A police officer may elect to receive the accrued benefit based on credited service on and after May 1, 2012 as follows: the member may elect to receive a reduced pension for life, and upon the retirant's death 100 percent, 75 percent, 66 and 2/3 percent or 50 percent of the reduced, Pension is paid to the beneficiary, if living, designated in writinj4 and filed with the board at the time of election of the optional form of payment. Payment to the designated beneficiary shall terminate upon the death of the designated beneficiary. The amount of the reduced pension Ordinance No. 6-2012 Page 42 of 74 payable to the retirant shall reflect an actuarial reduction in the standard form of payment based on the aae of the member and the aae of the beneficiary, such that the total value of the benefit payable to the retirant and beneficiary is actuarially equivalent to the standard form of payment to the retirant. The election of an optional form of payment under this subsection (b) shall be in writing and filed with the board prior to the date retirement is effective. Payment will be made under the standard form of payment if a timely election of an optional form of payment is not made." Section 32. 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 IV, Police Officers by deleting Section 82-117 in its entirety. See. 82 . ) The board of+r„n , may annually-axthorizo Tapplem°n+nl pension dist.ibutions to elig persons, theamount of<,,hich shall-be-dete-rmincd as of eael, September 30, beginning Septe,v be 30, 2001. Theamount of then pl°m°„+.11 pension distribut o of an °1;..;1,1° pc-rsorl made i3rio> will be determined as follows: (1)o arrzourt -I,.all bs his of her prarata s-hn,.°, based upon the years of n°,.<„n° of the ,.°+;,.n„+ to the+own, , r +!< .l ”3:imurr.years of serviee r°d,'+ of 25, of the positive n r,+ of inyen+m°„+ .°+llr„ if n eamed during f;nnnl tears ending-Sep+embor 39 on the reserve f feti na 1,enefit paym°„+ n °+n .,,1<;nl, ° °d eight p „+but d„ not exeeed to rperC�� (2) The baar-d shall determine whether- there may-be a -.applvm°r,+nl pension distributio base on the following faetors, a. The °+„ or plan administfator shall deter-mine the ate of investment etu during the f;nnnl year ending eaeh September 30 The rates detefmi d shall bo the on the m„s+ :arial rcp°,.*n submitted pureuar—;to F.S:, °h 112,„+ VII b. The aE4tary-or plar. administrator shall, as of Septeml,°,�tormine tho amoun+,, ' , investment retu whieh, after expenses, exeeeds eight rereent of the ° for- retired benefit payment assets but d„°n not ° °d to p + s �-a such a,�gts: (3) if the investment retuf on these assets is less than ° gh "e eent> le n *+; shall be ea-rfied for-ward to be ehaf ed against nnl.,lllatio,,n of supplemental r.cansior, d,n+ribtAions dufin< the-next car and shall oantinuc to o for-ward until e for-wards e „f&et by ear-fy iwvestmei+t retums ° eedin eight r ent if the net ° r,er-tenees are unfavorable, ,llatiyely with +1,c- e.£penonee for the yeaf ended September3v,, 2001, and therea=er-, no stip ,l°m°„+al distributions m be rondo until the net expefienees are Arable, and the tow must amortize the losses until it is offset by eu 7mlatiye fa orabie experienees. if the next. e p@riene.-is favofable, eumulatively, eoffflneneing with the ° perieflee for- the yc°-c^cr-eritirng �eptembe�-38-2001. -Aftlef offse--t—f3t. all prior suppl2mepAl pension distributisns, the GuppLam;awel-pensien distr;l.,,+;ons maybe made to eligible persons of the borxfit gro". If a supplemental pension distfibu4ion repoA or repoAs is of are not state aeeepted p r to d; =, and if a defic-ie-ney to the fund results, the deney shall be up by wi"oldirng and ehafgil g,stie r aefieie ey against the n t aTallc;J12 suppleme d sttr-ibtAiez, r l° --ner ndc up buy agreement l,et =cell the board and the +° rn. No such Ordinance No. 6-2012 Page 43 of 74 a o'ial.? bo permitted to eontinue for--a-period greater- than ee years f„m the date „� payme.-Al of a suppio m real distribution :hieh resulted a aefteieney.. � (b) If the—aetuar3 or plan administrator- detenninesthat there may be a aupplarnental distribution, then the board of trustetm shah author- ,e supplemental pension distributions unless the adminis4ative ex-penses of distribution exeeed the amount .allable for- the distribution, „1,;,,1, event-, no dietr bu ien m l.e .,,,+1, r; ,ed ,de (el "Eligible pefsons” a-re: lJ ; (2) Surviving spouse-Rt (3) "ar; vift dere„de„4 b;ldre„ grre+;r,,,+�, (4) Retir-ants' estates. (eke stqT4emefftal penasian distr;b„tio , if , shall be made on .,bout May , an uall,, Eligible persons fetired for less than one year- ar-e-e—ii,led to a pror-ata share of t sir supple-mc tel pension distribution based „ the numbe. of...—I'lirretire"t A r tir-a is estate titled t„ ���°ccm-�rn�-v�cccc�rre�entitled share of the deeeased ret;ran '-.-auppl rtal pon'-fian distribution based on the nurrbrr of months that the deeeased retirant reeeived a pension during the year- ending the September 30 prior to the retir-a,t's death (o) Su pplemorrtal perman distributions payable to eligible per-sons who are p rt;e;,,a is in the DROP at the time of payment shall be added to ar-sofils DROP aeeount. (f) Supplemental ponsi-on distr but;^N� + >,erer; ;�r;e� r de e �ed ret;r�„ts shall ha;ie their supplementa4ension d•str;b„t;gas red„eed in the same epertimn as ar2 theirper:ian payer Section 33. 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 IV, Police Officers; Section 82-119, to read as follows: "Sec. 82-119. Deferred retirement option program for police officers. (a) Generally. In general, and subject to the provisions of this section, the deferred retirement option program, hereinafter referred to as the DROP, is a program under which an eligible police officemember of the retirement s-ystern may elect to retire, participate, and become a retirant of the retirement system, deferring receipt of retirement benefits while continuing employment credited service. (1) The system investment method For participants who entered the DROP prior to January 1, 2003, unless the self-directed investment method was chosen by the participant, the deferred monthly benefits of a DROP participant shall accrue in the retirement system on behalf of the DROP participant, plus interest, compounded monthly, for the specified period of DROP participation. (2) The self-directed investment method. For participants entering the DROP after January 1, 2003, each DROP participant shall have an individual investment account to which his or her monthly benefits shall be transferred. The board shall select a third-party administrator or provider for this purpose. After such selection, each participant shall direct the manner in which Ordinance No. 6-2012 Page 44 of 74 the amounts in his or her individual investment account shall be invested from an array of options selected by the board. (3) During the period of DROP participation, neither the town nor the DROP participant is obligated to make additional contributions to the retirement system on behalf of the DROP participant. Upon termination of employment and participation in the DROP, the DROP participant shall receive his or her total DROP benefits and begin to receive his or her previously determined normal retirement benefits. Employment while participating in the DROP does not guarantee employment for any specified period. A DROP participant is a retirant of the retirement system. (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 and provided that: (1) Election to participate may be made when the member first reaches normal retirement date or age as follows: a. Members who were emploved 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; or 20 years of credited service regardless of age: and upon entry into the DROP the benefit payable to such member's DROP account 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 the member's DROP account, or directly to the member if DROP participation has ceased, upon attaining age 65., or for- ^ me er who first , .elted normal ret rcment dater-age prior to the eff-eetive date of the ordinanee ffom whieh this seetion is derived, eleetion to partieipate may-be made within 84 months of the effeetive date of the ofdina-nee from Whieh this seetion is derived; »Ρ idea however, Such member who fails to make an election within 84 months after the member has 20 years of credited service shall forfeit all rights to participate in the DROP. b. Members hired on or after May 1, 2012 shall be eligible to participate in the DROP upon attaining age 65 with 10 or more years of service. (2) There is no break in service to the town between the member's last working day as an employee and first day as a retirant and DROP participant. (c) Participation in the DROP. (1) The date on which participation in the DROP must terminate is within 120 months of the commencement of the election period provided in subsection (b)(1) of this section. Participation in the DROP may not exceed a maximum of 60 months. No DROP participant may continue to be eligible to participate in the DROP for more than 60 months or for any time after 120 months following the date on which the member first reaches normal retirement age or date, unless the member first reached normal retirement age or date prior to the effective date of the ordinance from which this section derives. (2) Subinission of regWred information. Upon electing to participate in the DROP, the member shall submit on forms required by the retirement system and/or the third-party administrator: Ordinance No. 6-2012 Page 45 of 74 a. A written election to retire; b. A written election to participate in the DROP; C. An irrevocable resignation from service to the town and withdrawal from the DROP effective after no more than 60 months participation in the DROP; d. A properly completed DROP application for service retirement as provided in this section; and e. Any other information required by the retirement system or by the third-party administrator. (3) Re-employed retirants. Re-employed retirants of the town's retirement system are not eligible to participate in DROP. (d) Compensation for work performed while participatin-a inBenefits�ywble under the DROP. Starting pay shall be at the base pay rate in effect on the employee's last working day of employment, prior to participation in the DROP. Job performance will be evaluated under the town's pay for performance system, and performance pay increases will be permitted as established by town policy. General pay increases shall also be awarded, as approved by the town council and the town manager. Performance pay increases and general pay increases awarded to DROP participants will be reflected in their salary but will not be reflected in pension payments made to DROP accounts or made after DROP participation. (1) Effective with the date of DROP participation, the member's initial normal monthly pension benefit, calculated in accordance with section 82-115 and based on creditable service and average final compensation and the effective date of retirement, shall be fixed. Retirement system amendments which become effective after the establishment date of participation in the DROP will not be applicable to the DROP participant, unless so stated by the amendment. The monthly pension benefit (minus any reduction as determined by the board of trustees as provided by subsection(h) of this section), cost of living adjustments, interest and earnings thereon, if any, shall accrue monthly in the retirement system or the individual investment account as applicable. Interest under the system investment method only shall accrue at an effective annual rate to be determined hereunder as set forth in subsection (h) of this section, and will be compounded monthly, on the prior month's accumulated ending balance, up to the month of termination of the DROP or death. (2) The monthly pension benefits payable to the DROP (minus any reduction as determined by the board of trustees as provided by subsection (h) of this section) and interest thereon, if any, shall continue to accrue in the DROP until the established termination date of the DROP, or until the DROP participant terminates employment or dies prior to such date. Although individual DROP accounts shall not be established under the system investment method described above in subsection (a)(1), a separate accounting of each DROP participant's accrued benefits under the DROP shall be calculated and provided to DROP participants annually. (3) Employee benefits, other than benefits under the retirement system, which are normally granted to employees, will be provided to DROP participants. Such DROP participants are not members of the retirement system. Ordinance No. 6-2012 Page 46 of 74 (4) At the conclusion of the participant's DROP, any credits made to a DROP participant's account will cease. Membership in the DROP will automatically terminate 60 months after the effective date of participation in the DROP, except as provided in subsection (c)(1) above. DROP participants may elect to discontinue membership in the DROP at any time, provided a two-week written notice of termination of employment has been submitted to the town, and notice has been submitted to the plan administrator and the third-party administrator. (5) At the conclusion of the participant's DROP, participants in the self-directed investment method shall exercise such options as provided by the third-party administrator's plan; or for participants in the system investment method, the retirement system shall distribute the participant's total accumulated DROP benefits, subject to the following provisions: a. The retirement system shall receive verification that such DROP participant has terminated membership in the DROP. b. The terminated DROP participant, or if deceased, such DROP participant's named beneficiary, shall elect on forms provided by the retirement system to receive payment of the DROP benefits in accordance with one of the options listed below. For a DROP participant or beneficiary who fails to elect a method of payment at least 60 days prior to termination of the DROP, the retirement system will pay a lump sum as provided in subsection (d)(5)b.l. of this section. 1. Lump sum. All accrued DROP benefits, plus interest and earnings, if any, less withholding taxes remitted to the United States Internal Revenue Service, shall be paid to the DROP participant or surviving beneficiary. 2. Direct rollover. All accrued DROP benefits, plus interest and earnings, if any, shall be paid from the DROP directly to the custodian of an eligible retirement plan as defined in section 402(c)(8)(B) of the United States Internal Revenue Code. However, in the case of an eligible rollover distribution to the surviving spouse of a deceased DROP participant, an eligible retirement plan is an individual retirement account or an individual retirement annuity as described in section 402(c)(9) of the United States Internal Revenue Code. 3. Partial lump sum. A portion of the accrued DROP benefits shall be paid to the DROP participant or surviving spouse, less withholding taxes remitted to the United States Internal Revenue Service, and the remaining DROP benefits shall be transferred directly to the custodian of an eligible retirement plan as defined in section 402(c)(8)(B) of the United States Internal Revenue Code. However, in the case of an eligible rollover distribution to the surviving spouse of a deceased DROP participant, an eligible retirement plan is an individual retirement account or an individual retirement annuity as described in section 402(c)(9) of the United States Internal Revenue Code. The proportions shall be specified by the DROP participant or surviving beneficiary. C. The form of payment selected by the DROP participant or surviving beneficiary complies with the minimum distribution requirements of the United States Internal Revenue Code and payments begin no later than the date on which the participant reaches age 70 years and six months. Ordinance No. 6-2012 Page 47 of 74 (6) The accrued benefits of any DROP participant, and any contributions accumulated under such program, shall not be subject to assignment, execution, attachment, or to any legal process whatsoever, except for income deduction orders and federal income tax levies. (7) DROP participants shall not be eligible for disability retirement benefits as provided in section 82-120 or section 82-121. In the event a DROP participant becomes incapacitated for employment by the town as defined under section 82-120 or section 82-121, the DROP participation will terminate, and the former DROP participant will elect one of the alternatives under subsection(d)(5)b of this section. (8) The effective date of retirement of a DROP participant shall be the day selected by the member to begin participation in the DROP. (e) Death benefits under the DROP. (1) Upon the death of a DROP participant, the named beneficiary shall be entitled to apply for and receive the accrued benefits in the DROP as provided under subsection (d)(5)b of this section. (2) The pension benefit paid to the DROP during the month of a DROP participant's death shall be the final pension benefit credited for such DROP participant. (3) Eligibility to participate in the DROP terminates upon the death of a DROP participant. If the DROP participant dies on or after the effective date of enrollment in the DROP, but prior to the first monthly benefit being credited to the DROP, retirement system benefits shall be paid in accordance with section 82-123. (4) A DROP participant's survivor shall not be eligible for retirement system death benefits as provided in section 82-124. (f) Cost of living adjustment. The DROP participants' normal pension benefit shall be increased as provided in section 82-63(b). (g) Renewed membership. Participants of the DROP will not be permitted to be members of the town's retirement system. Contributions that normally would be made by the employee and the town will not be paid into the retirement system upon an individual's election to participate in the DROP. (h) Administration of the program. The board of trustees shall make such rules as are necessary for the effective and efficient administration of this subsection. The board of trustees shall not be required to advise participants of the federal tax consequences of an election related to the DROP but may advise participants to seek independent advice. (1) The DROP will be cost-neutral to the town. To maintain the cost-neutral basis to the town, the credited interest rate and any reduction in the DROP participants' monthly pension benefits payable to the DROP will be reviewed by the board of trustees from time to time as other actuarial assumptions are reviewed. All costs of the DROP and any increase or decrease in the cost of administering the DROP will be absorbed by: a. A change in the interest rate credited to participants in the system investment method; b. A change of the or establishment of a reduction of the DROP participants' monthly pension benefits payable to the DROP; and/or Ordinance No. 6-2012 Page 48 of 74 C. An increase in the fees charged by the third-party administrator to the individual investment accounts; As determined by the board of trustees with approval by the town council. (2) For those participants under the system investment method, interest on DROP participant's monthly pension benefits payable to the DROP shall accrue at an effective annual rate of 7.5 percent compounded monthly. Such interest rate shall be reviewed by the board of trustees from time to time as other actuarial assumptions are reviewed and may be redetermined by the board of trustees with approval by the town council. (3) Notwithstanding any other provision of this section 82-119 or the Code, a member who receives any DROP benefits for the portion of their pension benefits earned on or after May 1, 2012 shall be an at-will employee for the entire DROP period." Section 34., 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 IV, Police Officers; Section 82-120, to read as follows: "Sec. 82-120. Police Officers: Disability retirement. (a) Upon the application of a member or the member's department head, a op lice officermember who becomes incapacitated for employment by the town by reason of a personal injury or disease may be retired by the board of trustees subject to the following conditions: (1) The member has ten or more years of credited service in force, or was employed by the town and not participating in the DROP on May 1, 2012; (2) The member is medically examined by a duly-qualified physician or surgeon selected by the rat board of trustees for that purpose; (3) The physician or surgeon certifies to the power board that the member is wholly prevented from rendering useful and efficient service as a police officer, and he is likely to remain so disabled continuously and permanently; and (4) The board of trustees concurs with the certification of the physician or surgeon. (b) Upon disability retirement, a member shall be paid a pension computed according to section 82-115, provided that the disability pension benefit payable to a member of the benefit group police officer shall not be less than 30 percent of the member's average final compensation at the time of disability, which minimum amount shall be applicable for at least five years if the member attains such age for retirement less than five years after disability benefits commence. (c) A member shall not be entitled to receive disability pension benefits if the disability is a result of: (1) Excessive or habitual use of drugs, intoxicants or narcotics by the member; (2) Injury or disease sustained by the member while willfully and illegally participating in fights, riots or civil insurrections, or while committing a crime; (3) Injury or disease sustained by the member while serving in any armed forces; (4) Injury or disease sustained by the member after his employment has terminated." Ordinance No. 6-2012 Page 49 of 74 I Section 35., 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 IV, Police Officers; Section 82-122, to read as follows: "Sec. 82-122. Continuation subject to re-examination; return to employment; effect of gainful employment. (a) The board of trustees may require a disability retirant to undergo periodic medical examination by or under the direction of a physician selected by the board of trustees if the disability retirant has not attained the age for retirement required in section 82-114. If a disability retirant refuses to submit to a medical examination,payment of the pension may be suspended by the board until withdrawal of the refusal. Should refusal continue for one year, all the disability retirant's rights in and to a disability pension may be revoked by the board. The terminated disability retirant may be restored to active employment credited service. A disability pension shall be discontinued if, following the medical examination, the physician certifies that the disability retirant is no longer disabled, and the board concurs in the certification of the physician. The town shall be allowed reasonable latitude in placing the terminated disability retirant in a position commensurate with the position held at time of disability retirement. (b) A disability retirant who has been restored to employment credited service as provided in subsection (a) of this section shall again become a member of the retirement system if employed in a membership position. The disability retirant's credited service at time of retirement shall be restored to full force. Service shall be credited for the period the disability retirant was being paid a disability pension, if the provisions of section 82-121 were applicable; otherwise credited service shall not be given for the period of disability retirement. (c) A terminated disability retirant who does not return to town employment and who had ten or more years of credited service at time of disability retirement shall become a vested former member and entitled to deferred retirement as provided in section 82-58. (d) & eor+ to the extep, prohibited by ch. 185, iIf a disability retirant is or becomes engaged in gainful occupation, business or employment, paying more than the difference between the retirant's average final compensation and the amount of pension, the disability pension shall be reduced to the amount of the difference. Should the retirant's earnings later change, the disability pension shall be adjusted. The limitation of this subsection shall apply until the retirant meets an age and service requirement for retirement as provided in section 82-114." Section 36. 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 IV, Police Officers; Section 82-123, to read as follows: "Sec. 82-123. Police Officers: Death after retirement; automatic survivor pension to minor children and/or surviving spouse. (a) For members who retired or entered the DROP after September 30, 1995 and prior to Mav 1, 2012, members who terminated emplovment with 10 or more vears of credited service prior to Mav 1, 2012, and 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, death benefits after retirement shall be pavable as follows: Ordinance No. 6-2012 Page 50 of 74 Surviving children. (a4-) The surviving children of a deceased retirant shall be paid a pension terminating upon the attainment of age 18 or death, if the following conditions are satisfied: Ia. The retirant retired after September 30, 1995. 2b. A valid election of optional form of payment under section 82-125 is not in effect. (b2) Payment of the pension shall be made for months beyond age 18 years, but not beyond the month in which age 25 is attained, if a pension payment would not otherwise be made for the month under the provisions of subsection(b) of this section. (c ) The amount of each surviving child's pension is 25 percent of the retirant's pension at time of death, not to exceed an equal share of 75 percent of the retirant's pension when there are four or more surviving children being paid. Pension payments shall be made to the legal guardian of each child. (2b) Surviving spouse. The surviving spouse of a deceased retirant shall be paid a pension terminating upon death. The amount of a surviving spouse's pension for a month is the difference, if any, between 75 percent of the retirant's pension and the aggregate amount paid to surviving children for the month. (3e) Ten year certain. If a retirant dies within ten years of retirement, the total monthly payments due under subsection (a) and/or (b) above shall not be reduced from that which may have been due to the retirant until the tenth anniversary of the retirant's retirement date. (b) For 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, who were emploved by the town and not participating in the DROP on that date, death benefits after retirement shall be pavable as follows: (1) SurvivingQ children. a. The surviving children of a deceased retirant shall be paid a pension terminating upon the attainment of age 18 or death, if the following conditions are satisfied: 1. The retirant was employed and not participating in the DROP on May 1, 2012 and retired thereafter. 2. A valid election of optional form of pavment under section 82-105 is not in effect. b. Payment of the pension shall be made for months bevond age 18 years, but not beyond the month in which age 25 is attained, if a pension pavment would not otherwise be made for the month under the provisions of subsection (b) of this section. C. The amount of each surviving child's pension is 25 percent of the retirant's pension based on the retirant's frozen accrued benefit as of Mav 1, 2012, not to exceed an eaual share of 75 percent of the retirant's pension when there are four or more surviving children being paid. Pension payments shall be made to the legal guardian of each child. (2) Survivinz spouse. The surviving spouse of a deceased retirant shall be paid a pension terminating upon death. The amount of a surviving spouse's pension for a month is the difference, if any, between 75 percent of the retirant's pension based on the retirant's frozen Ordinance No. 6-2012 Page 51 of 74 accrued benefit as of May 1, 2012, and the aggregate amount paid to surviving children for the month. (3) Ten vear certain. If a retirant dies within ten vears of retirement, the total monthly payments due under subsection (a) and/or (b) above shall not be reduced from that which may have been due to the retirant until the tenth anniversary of the retirant's retirement date. (c) Members who did not attain normal retirement eligibility based on credited service as of May 1, 2012, excludina credited service purchased pursuant to section 82-54. and who were emploved by the town and not participating in the DROP on that date. and members hired on or after May 1, 2012, may elect an optional form of benefit pursuant to section 82-96(c) for benefits based on credited service on and after Mav 1, 2012, but there shall be no automatic survivor pension for death after retirement based on such credited service on and after Mav 1, 2012." Section 37. 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 IV, Police Officers; Section 82-124,to read as follows: "Sec. 82-124. Police Officers: Death while an employee of the town; automatic survivor pension to minor children and/or spouse (a) Surviving children. (1) The surviving children of a deceased member shall be paid a pension terminating upon the attainment of age 18 or death if the following conditions are satisfied: a. The member has ten or more years of credited service, or was employed by the Town and not participating in the DROP on Mav 1, 2012, and dies while in the employ of the town Aff September 3nc ,1995; and b. A valid election of optional form of payment under section 82-125 is not in effect. (2) Payment of the pension shall be made for months beyond such a beneficiary age of 18 years, but not beyond the month in which the age 25 is attained, if a pension payment would not otherwise be made for the month under the provisions of subsection(b) of this section. (3) The amount of each surviving child's pension, which shall be paid to the legal guardian of each child, is: a. For members who attained normal retirement eligibility based on credited service as of May 1, 2012, excludina credited service purchased pursuant to section 82-54. and who were emploved by the town and not participating in the DROP on that date. 25 percent of the amount of pension computed according to section 82-115, based on the deceased member's average final compensation and credited service at time of death. A child's pension shall not exceed an equal share of 75 percent of the amount of pension computed according to section 82-115, based on the deceased member's average final compensation and credited service at time of death, where there are four or more surviving children being paid. b. For members who did not attain normal retirement eli6bility based on credited service as of May 1, 2012, excludina credited service purchased pursuant to section 82-54, and who were emploved by the town and not participating in the DROP on that date, 25 percent of the amount of pension computed according to section 82-115, based on the deceased member's frozen Ordinance No. 6-2012 Page 52 of 74 accrued benefit as of May 1, 2012, plus 25 percent of the amount of pension computed according to section 82-115, based on the deceased member's accrued benefit for credited service on or after May 1, 2012. A child's pension shall not exceed an equal share of 75 percent of the amount of pension computed according to section 82-115, based on the deceased member's frozen accrued benefit as of May 1, 2012, plus 75 percent of the amount of pension computed according to section 82-115, based on the deceased member's accrued benefit for credited service on or after May 1, 2012, where there are four or more surviving children being paid. C. For members hired on or after May 1, 2012, 25 percent of the amount of pension computed according to section 82-115, based on the deceased member's accrued benefit for credited service on or after May 1, 2012. A child's pension shall not exceed an equal share of 75 percent of the amount of pension computed according to section 82-115, based on the deceased member's accrued benefit for credited service on or after May 1, 2012, where there are four or more surviving children being paid. Pension paymepAs shal e made to the legal guardian of eaeh ehild. (b) Surviving spouse. (1) The surviving spouse of a deceased member shall be paid a pension terminating upon death if the following conditions are satisfied: a. The member has ten or more years of credited service, or was employed by the Town and not participating in the DROP on May 1, 2012, and dies while in the employ of the town; b. A valid election of optional form of payment under section 82-125 is not in effect; and C. The member was married to the surviving spouse at the time of death. (2) Payment of a surviving spouse's pension shall commence the first day of the month following the date the deceased member would have met an age and service condition for normal retirement in the absence of death. (3) The amount of a surviving spouse's pension is: 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, the difference, if any, between 75 percent of the retirant's pension computed according to section 82-115, based on the deceased member's average final compensation and credited service at time of death, and the aggregate amount paid to surviving children for the month. b. For 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, the difference, if any, between 75 percent of the retirant's pension computed according to section 82-115, based on the deceased member's frozen accrued benefit as of May 1, 2012, plus 75 percent of the retirant's pension computed according_ to section 82-115, based on the deceased member's accrued benefit for credited service on and after of May 1, 2012, and the aggregate amount paid to surviving children for the month. Ordinance No. 6-2012 Page 53 of 74 C. For members hired on or after May 1, 2012, the difference, if any, between 75 percent of the retirant's pension computed according to section 82-115, based on the deceased member's accrued benefit for credited service on and after May 1, 2012, and the aggregate amount paid to surviving children for the month. (c) Ten year certain. If survivors of a deceased member are due payments under subsection (a) and/or (b) above, they shall not be reduced until the tenth anniversary of the commencement of payments." Section 38. 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 IV, Police Officers; Section 82-125,to read as follows: "Sec. 82-125. Police Officers: Elective survivor pension. (a) The elected surviving beneficiary of a deceased member be paid a pension terminating upon death if the following conditions are satisfied: (1) The member has elected a survivor beneficiary. (2) The member dies while in the employ of the town with at least ten years of credited service, or the member was employed by the Town and not participating in the DROP on May 1, 2012 and thereafter dies while in the emWov of the town. (b) The election of a survivor beneficiary shall be in writing and filed with the human resources department . The election of a survivor beneficiary shall be null and void upon the member's retirement or prior termination of town employment. A member may revoke a nomination of survivor beneficiary at any time and again elect a survivor beneficiary. (c) The amount of a surviving dependent elected beneficiary's pension shall be_ (1) 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. a benefit computed according to section 82-115 as if the deceased member had elected optional form of payment A100 provided in section 82-116 and retired the day preceding death, notwithstanding that the deceased member may not have satisfied the section 82-114 conditions for retirement. (2) For 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 emWoved by the town and not participating in the DROP on that date. a benefit computed according to section 82-115, based on the member's frozen accrued benefit as of May 1, 2012 plus the benefit based on the member's credited service on and after that date, as if the deceased member had elected optional form of pavment A100 provided in section 82-116 and retired the day preceding death, notwithstanding that the deceased member may not have satisfied the section 82-114 conditions for retirement. (3) For members hired on or after May 1, 2012, a benefit computed according to section 82- 115 based on credited service on and after that date computed as if the deceased member had elected optional form of payment A100 provided in section 82-116 and retired the day preceding death, notwithstanding that the deceased member may not have satisfied the section 82-114 conditions for retirement." Ordinance No. 6-2012 Page 54 of 74 Section 39. 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, by deleting Sections 82-130, 82-131 and 82- 132 in their entirety. See. 82 130. General employee board of trustee-,-. (a T�encr-ul empl encml baar " or the"board") sha'? Hof the following individuals- (1) The in&idual .,ho is eer:fin manager or, in that individual's absenee, the nn+;,,,. (2) Two-eitizens of the-t who are of of eefs or employees of the hete��°etira is or b enef;o;ories of the retirement system, to be appointed by the toy,% n n;l (3) n member eovered by b enefit group general and/or benefit group lifeguard who is o+ employed publie works department,to be elee-ted by the member.—of b--ef;+ groups qualified e for s,nb, position. (4) A me or eovered by benefit goneral who is empl9yed in t he publie works dep rtmepA,to b e elon+oa 6„,them mb er of t,eneft groups qualif o for-stieh position. (S) The individual ser )r and the individual serving as president of the town eouneil trustees.shall, in that order-, aet in the event of absettee of (b) The genera board shall moo+ at least !, arter-I , ;shall adopt its o rules of proeed re an shall boor, r or s of its r,r" the beard, and a:leant dffee n otes shall be no y for n aodis;on hy.the bo ra >:ae trustee shall be opAided to one vote on eaeh „ estio before the b.o--A The trtistees-shalt not rood;,.o n eompensation but m ,.*—--Fro s and Per diems:ao prn ,idea 1,,, +ate 1 (e)- The—general-boar d shall b legal—eat ty wi h, _n action to other and the power to bring and defend lawsuits of every k4nd, naWre Y1/Y 11 herein, deseriptio and to administer sep r7to plans f�anef1t of its members and retlrn Ntn. (d) if i 11441111 denial, in N,ritin., within 30 days of the hoard's action. They.-r otrreation shall cct f rtl, the r fo"criial. The claimant n- y-appeal the enial and request n hearing before the board. The appeal shall be in vffiting to the town elerk and filed within 90 days of the denial. The request shall nor+nil, n written statement of the „ ro ar, ing the e-laim. The—board s ha4-se�e ulo-a hearing within!n days of reecipt of theappeal. See. 82 131. Term of voi le; oath of o e (a) The regular- term of offiee of member eleeted tfustees of the general board and appointed tfustecs-shall be t,,,o years and they m sueeeed themselves in off ee (b.) Eaeh tr„stne- shall, before assuming the—cditties fir trustee, qualify by taking bcrrof offee to be administered by the to„>n elerlt. (e) n vaeaney shall oeeur on the general board ;f• Ordinance No. 6-2012 Page 55 of 74 (71) A member eleeted +r....+ee ee en to be n member o eeases + b+e i eluded in the n in+e be e4,+ group-, r2` n tmstee holding +c.ffi office eeases to bold the offi that qual-feed the indi-Tdual ac a tfustee, (33) A„ ,+ ei+iz r lcgal reaiden4 appoipAed by the to eouffeil fails to remain eh; and (4) n ffy+r„s+ee r ed f„m „f e, (d) if a vaeaney-ovv'ur roi44+e-g:t_ra`ll lJam , the vaeaney shall be filled < ,i+l,i,, 30 days, f r-the term,, in then e as the position pr-eviously gilled manner- 4 Se .- 2 Offieers, administra-ti�e per iee The offieer-s and employed sevviees of the g ral b emd shall ba as T ( ) Chair. The gem-ral board shall annually eleet n eh it n„a n £;hair pro tem from i+n member-s. (2) Seeretary. The general board rd shall ammally eleet n seeretary f.,, among its members. (3) F4nanee ,7.reete,. and ti, wur- ,. THe +,.<,,,, Finanee direetor and +reasufer shall be finanee direetor and tfeasurer of the general > exeept that the assets, other than operating aeeoutft shall be pin ed in the n+„d< of n nationally nl'aftered b.ftk or tfus+ eo a (4) Legal advisor. The town a#orney shall be legal advisof to the general board. (5 Aetuary. The general b d shall appai„+ an aetuafy who sha l,e the technic-al advisor to the-b„nrd regarding the operation of the retirement as atrial basis and who Per=form sRehserviees n red in that eomeetion. The t etua"," as used in this artie?e shall meam a mg�nber of the n mcriean n nndemy of n n+„nrien, or a person Who has domons+ + d a...eational bae µrd ...,eels for the aefiee o fµn+ svienee „d b.nn < . „ .,gr .. �,� �..r Yr � ..�uar�al , at least five years of rele< apA rennin„ aetuarinl e „erienee. A p nership p„rn+io m l,e appointed aetu ry if the duties of aetu fy are performed b y of under the .Brent n r. pe ,inio of Y f individual who meets the r eedi„n nlif;nn+ions (6) Serviees. The general board is authorized and empowered to employ sueh professional an-, other serviees as are required for- the proper administration of the retireme.." -, the I fund's i (7t7) PIaTradnfiHki�-a#6y� ,, personnel direntor chall bg-the e p-a„ ad,,,i,.in+rn+.,r Section 40. 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 coup lifeguard. (a) An individual may retire upon satisfaction of each of the following requirements: (1) The individual has filed written application for retirement with the board setting forth the date, not less than 30 days nor more than 120 days subsequent to the execution and filing thereof, retirement is to be effective. Ordinance No. 6-2012 Page 56 of 74 (2) Unless the individual is an applicant for a DROP, the individual terminates all town employment prior to the date retirement is to be effective. (3) The individual has met an applicable age and service condition for retirement. (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 emploved by the town and not participating in the DROP on that date. shall be eligible for normal retirement upon attaining the m€-mber hap attamed age 55 years or older and has with ten or more years of credited service, or has 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 emploved 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. 3. Members hired on or after May 1, 2012, shall be eligible for normal retirement upon attaining age 65 with ten or more years of credited service. b. Benefit group general 20 year 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 emploved by the town and not Participating in the DROP on that date. may elect to retire, subject to the early retirement reduction specified in section 82-135(c)(1)eb, upon attaining the member- does not qualify rnr normal retirement bttt has attained age 50 or older with 20 or more years of credited service-and has eleeted early retirement. C. Benefit group general ten-year 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 emploved by the town and not participating in the DROP on that date, may elect to retire, subject to the early retirement reduction specified in section 82-135(c)(1)fe, upon attainingthe member does not qualify f r normal tir-e ent but has attained age 50 or older with ten or more years of credited service-and d. Benefit zroup Qeneral 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 emploved 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 section 82-135(c)(1)g. (2) Benefit group lifeguard. Ordinance No. 6-2012 Page 57 of 74 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 emploved by the town and not participating in the DROP on that date, shall be eligible for normal retirement upon attaining idual has a4tamed age 50 years or older a„a has with ten or more years of credited service; or when the member's individual's age to last completed month plus credited service totals 65 years or more and the memberindividual 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 emploved by the town and not participating in the DROP on that date, shall be eligible for normal retirement upon termination of town emplovment and attaining age 50, or when the member's age to last completed month plus credited service totals 65 vears or more: and upon such retirement shall be eligible to receive the frozen accrued benefit based on credited service and average final compensation on Apri130, 2012. Such members shall be eligible to receive the accrued benefit based on credited service on and after Mav 1, 2012 upon attaining age 65 with ten or more vears of credited service. C. Benefit group lifekuard ajze 60 early retirement obtion. Members who did not attain normal retirement eligibility based on credited service as of Mav 1, 2012, excluding credited service purchased pursuant to section 82-54, and who were emploved by the town and not participating in the DROP on that date, and members hired on or after Mav 1, 2012. may elect to retire at age 60 subiect to the earlv retirement reduction specified in section 82-135(c)(0a. d. Members hired on or after Mav 1, 2012, shall be eligible for normal retirement upon attaining age 65 with ten or more vears of credited service." Section 41., The Code of Ordinances of the Town of Palm Beach is hereby amended at Chapter 82, Personnel; Article I1, 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. (a) The amount of a member's or a vested former member's pension under the standard form of payment shall be equal to the sum of separately determined amounts for which the individual has credited service in force, and in no event shall the amount of a member's or a vested former member's pension under the standard form of payment be less than$1,200.00 per annum. (b) The amount of pension attributable to a member who has credited service under another benefit group shall be the amount determined by calculating credited service in this benefit group plus the amount determined by calculating credited service in such other benefit group. (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 emploved 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 Ordinance No. 6-2012 Page 58 of 74 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 section 82-135 (c) (1) a above, the benefit formula shall be 1.25% of average final compensation multiplied by years of credited service. 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 emWoved 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 65 with 10 or more years of credited service, and termination of town employment or entry into the DROP. e. For benefits based on credited service prior to May 1, 2012, an early retirement reduction of 0.003 percent shall apply for each month that early retirement under section 82-134(b)(1)b precedes a date the member would have met age and service conditions for normal retirement under section 82-134(b)(1)a, if the member had not elected early retirement. f. For benefits based on credited service prior to May 1, 2012, an early retirement reduction of 0.006 percent shall apply for each month that early retirement under section 82-134(b)(1)c precedes a date the member would have met age and service conditions for normal retirement under section 82-134(b)(1)a, if the member had not elected early retirement. g. An early retirement reduction equal to the full actuarial cost of each month that early retirement under section 82-134(b)(1)d precedes a date the member would have met the applicable age and service conditions for normal retirement under section 82-134(b)(1)a, if the member had not elected early retirement. (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. Ordinance No. 6-2012 Page 59 of 74 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% of average final compensation multiplied by years of credited service. 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 emploved 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 vears or more, and termination of town emplovment or entry into the DROP; and (2) the accrued benefit based on credited service on and after May 1, 2012, payable upon attaining age 65 with 10 or more years of credited service, and termination of town emplovment or entry into the DROP. e. Benefit mun lifeguard ajze 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 Mav 1, 2012, may elect to retire at age 60 and receive a benefit based on credited service on and after May 1, 2012, subiect 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 retirement under section 82-134(b)(2)d, if the member had not elected early retirement." Section 42. The Code of Ordinances of the Town of Palm Beach is hereby amended at Chapter 82, Personnel; Article Il, Employee Benefits; Division 2, Retirement System; Subdivision V, General Employees and Lifeguards; Section 82-136,to read as follows: "Sec. 82-136. Optional forms of payment of a pension for benefit group general and benefit group lifeguard. (a) Members of benefit group general and benefit group lifeguard who terminated emplovment with 10 or more years of credited service prior to May 1, 2012, and members of those groups 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 emploved by the town and not participating in the DROP on that date, may, prior to retirement, elect A member- o r -— er-memo°r m elect t e paid ndef one of the following optional forms of payment. The election shall be in writing and filed with the board prior to the date retirement is effective. Payment will be made under the standard form of payment if a timely election of an optional form of payment is not made. (1) Optional form of payment A100--100 percent survivor pension. Under optional form of payment A100, a retirant is paid a reduced pension for life. Upon the retirant's death the reduced Ordinance No. 6-2012 Page 60 of 74 pension is paid to the beneficiary, if living, designated in writing and filed with the board at the time of election of the optional form of payment. Payment to the designated beneficiary shall terminate upon the death of the designated beneficiary. The amount of reduced pension is a percentage of the amount of pension under the standard form of payment (SL). The percentage is 80 percent if the retirant and designated beneficiary are the same age on their last birthdays. The 80 percent is reduced by 0.5 percent for each year the age of the retirant exceeds the age of the designated beneficiary, to a minimum of 60 percent for differences in age of 40 or more years. The 80 percent is increased by 0.5 percent for each year the age of the designated beneficiary exceeds the age of the retired member, to a maximum of 90 percent for differences in age of 20 or more years. (2) Optional form of payment A50--50 percent survivor pension. Under optional form of payment A50, a retirant is paid a reduced pension for life. Upon the retirant's death 50 percent of the reduced pension is paid to the beneficiary, if living, designated in writing and filed with the board at the time of election of the optional form of payment. Payment to the designated beneficiary shall terminate upon the death of the designated beneficiary. The amount of reduced pension is a percentage of the amount of pension under the standard form of payment. The latter percentage is 90 percent if the retirant and designated beneficiary are the same age at their last birthdays. The 90 percent is reduced by 0.25 percent for each year the age of the retirant exceeds the age of the designated beneficiary, to a minimum of 80 percent for differences in age of 40 or more years. The 90 percent is increased by 0.25 percent for each year the age of the designated beneficiary exceeds the age of the retired member, to a maximum of 95 percent for differences in age of 20 or more years. (3) Form ofpayment (SL)--Straight life pension. Under form of payment (SL) the retirant is paid a pension for life. The (SL) payment amount is the standard form of payment amount computed pursuant to section 82-135(c). (b) Members of benefit group general and benefit group lifeguard 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 May 1, 2012, may elect to receive the frozen accrued benefit based on credited service prior to May 1, 2012 under one of the following optional forms of payment. The election shall be in writing and filed with the board prior to the date retirement is effective. Payment will be made under the standard form of payment if a timely election of an optional form of payment is not made. (1) Optional form of pavment A100--100 percent survivor pension. Under optional form of payment A100, a retirant is paid a reduced pension for life. Upon the retirant's death the reduced pension is paid to the beneficiary, if living, designated in writing and filed with the board at the time of election of the optional form of payment. Payment to the designated beneficiary shall terminate upon the death of the designated beneficiary. The amount of reduced pension is a percentage of the amount of pension under the standard form of pavment (SL). The percentage is 80 percent if the retirant and designated beneficiary are the same age on their last birthdays. The 80 percent is reduced by 0.5 percent for each year the age of the retirant exceeds the age of the designated beneficiary, to a minimum of 60 percent for differences in age of 40 or more years. The 80 percent is increased by 0.5 percent for each year the age of the designated beneficiary Ordinance No. 6-2012 Page 61 of 74 exceeds the age of the retired member, to a maximum of 90 percent for differences in age of 20 or more years. (2) Optional forum of payment A50--50 percent survivor pension. Under optional form of payment A50, a retirant is paid a reduced pension for life. Upon the retirant's death 50 percent of the reduced pension is paid to the beneficiary, if living, designated in writing and filed with the board at the time of election of the optional form of payment. Payment to the designated beneficiary shall terminate upon the death of the designated beneficiarv. The amount of reduced pension is a percentage of the amount of pension under the standard form of pavment. The latter percentage is 90 percent if the retirant and designated beneficiary are the same age at their last birthdays. The 90 percent is reduced by 0.25 percent for each year the age of the retirant exceeds the age of the designated beneficiary, to a minimum of 80 percent for differences in age of 40 or more years. The 90 percent is increased by 0.25 percent for each year the age of the designated beneficiary exceeds the age of the retired member, to a maximum of 95 percent for differences in age of 20 or more years. (3) Form of_pavment (SL)--Straizht life pension. Under form of payment (SL) the retirant is paid a pension for life. The (SL) payment amount is the standard form of payment amount computed pursuant to section 82-135(c). (c) Members of benefit group general and benefit group lifeguard may elect to receive the accrued benefit based on credited service on and after May 1, 2012 as follows: the member may elect to receive a reduced pension for life, and upon the retirant's death 100 percent, 75 percent, 66 and 2/3 percent or 50 percent of the reduced pension is raid to the beneficiary, if living, designated in writing and filed with the board at the time of election of the optional form of payment. Payment to the designated beneficiary shall terminate upon the death of the designated beneficiary. The amount of the reduced pension payable to the retirant shall reflect an actuarial reduction in the standard form of payment based on the age of the member and the age of the beneficiary, such that the total value of the benefit payable to the retirant and beneficiary is actuarially equivalent to the standard form of payment to the retirant. The election of an optional form of payment under this subsection(b) shall be in writing and filed with the board prior to the date retirement is effective. Payment will be made under the standard form of pavment if a timely election of an optional form of payment is not made." Section 43. 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, by deleting Section 82-137 in its entirety. See. 82 137. Supplemental pension.O.S.IrMutions. (a) The board of trustees may annually authorize supplemental pension distribtAions to eligible persons;the awourA-ofwI4zh shall be c.=knod ar, of eaeh September 30, beginning September 1 tal distribution o„ F eligible will l b determined as follows: 1. Tln; aiT'JUr�v��prcriZCnccn�°cir�roircascrro urror�8z tci� ,mob (, € amunt s!iall be his or he prorata --1:are, based up=the years of sen4ee of the retirant to the to,,,,-,, up to a rra-xi.=am years of serviee ered;t of 25, of the positive amount of investment return if any, earned during fiscal yours ending September 30 on the reserve for retire benefi, payment assets ,,-hieb, o eed eight per�,e t but do aotexeeed to r�n� v.. c-nvov Ordinance No. 6-2012 Page 62 of 74 i (2) The board shall detefin ne whether- +Moro may be a su lfy-ne zr.Io distribution L...se on the following faetor-s, a. The a-swafy play admi-Ristr„t„r shall detemnine the rates of ; estnie t return d-ur-in. tl,o f seal „ding eaeh September-30. 'T'',e ra-tes determined shall be the rater ot4ed on the m„s+ =event a0tuarial raports submitted pufstiant to l S. A 112, pt vTT 1, The aetaai , or Elan admi-nistr or s'ialll., as 9f +lie amount, if any, o nvestment retum whie-h, after- expenses, ,.___as eight pefeent of the reserve for retired benefit. payment assets btA does of o eeed to Y r.t of s e assets. '� o (3) if the investment rot,,,.,, on those assets is less than eight pereent, ah am ou its shall be eaffied forward to be ehar-ged against ..1. ,1.,+.o off supple,.nentatl pension distribt4io during the next year d shall eontintte to earry f:.fwafd until Mch saffy forwards aro of` et b , with t e-,-poriganee for- the year ended 30, 2001, and Cher afilc-,- supplemental distr-ib t;m, ma;-be made-tintil the net e). te—forable, and n must amortize the losses-art'lcri it is offset by—out-.ulati« able expet=lenees. if nexA. e pe6enee-is favor-able, etinnilatively, eonimeneing with he ex-Per-iene-e-46r the year ending Septemb er-0;2001, after—offset—for all p6of supplemental dist- tie„ the supplemen#al p€`. -.-,.•r distribtit;ons may be made to eligible-per-sons of the benefit If a aapp-1Qmental pension distribution ot4 of reports is are not eepted „ r + distribution,, and if a defieieney to the fund results, the ayea, shall 'ado up by supplemental pension distribu+ior, rAe "de up by agFeement between the board and the town..No site def Fieney shall ba-pefinitted to eontiffue for a period greater than three years from the date of pent-o,f a supplame supply 1 distribution >1 1, resulted in n de fieiefley. (b) if the aet„ary or plan administrator determines—that—there may—be a supplemental distr;>,„+;o , the the board of tfustoos- shall aw.4o ize— „leme tnl ns pe o distributions unless the adr:istrative expenses i, 1, event, no distribution m y be authorized or made "Eligible persons” n (1) no+;rant-s , (2) Surviving spouses; (3) dependent eh ldren r&—karts;--and (4) Roofs ts' estates. (d) The supplemental pension distribution, f any, shallbe,-made on o about-Ma), 1 anunually-. Eligible persons retired for less than one year are entitled to a pr-or-ata share of t_...,�....���., sir cupplarne-ntal pension distr; #loT: ba,,�on-the number- of months retired. n re+�t� estate s-entrtr va to pr-ofata share of the deeeased rot;rnnt's pplem #al per-s-la distribution Lased on the numb---f--of month-, that the deeeased retirant feeeived a pension during the year ending the September prior-to the re fir-nut's death-. Ordinance No. 6-2012 Page 63 of 74 (e) Supp? ta' distr-;r.,,+ians payable to eligible per-sons who are partielpants4n4he r,nO4 time of payment A i� �,e added to sueh sue eligible »Ρv Jori's DR0 (f) Supplemen4al pension distributions to belie eiar es of deeeas°a etir n 3 shall ha-,,e thei aippldmd-ntal pension distfibti4ions,.edue°a in t e sure p:opeAian as are their pension paymepAs. Section 44. 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. (a) Generally. In general, and subject to the provisions of this section, the deferred retirement option program, hereinafter referred to as the DROP, is a program under which an eligible member of benefit group general and benefit group lifeguard the retirement syst°.,, may elect to retire, participate, and become a retirant of the retirement system, deferring receipt of retirement benefits while continuing employment credited service. (1) The system investment method. For participants who entered the DROP prior to January 1, 2003, unless the self-directed investment method was chosen by the participant, the deferred monthly benefits of a DROP participant shall accrue in the retirement system on behalf of the DROP participant, plus interest, compounded monthly, for the specified period of DROP participation. (2) The self-directed investment method. For participants entering the DROP after January 1, 2003, each DROP participant shall have an individual investment account to which his or her monthly benefits shall be transferred. The board shall select a third-party administrator or provider for this purpose. After such selection, each participant shall direct the manner in which the amounts in his or her individual investment account shall be invested from an array of options selected by the board. (3) During the period of DROP participation, neither the town nor the DROP participant is obligated to make additional contributions to the retirement system on behalf of the DROP participant. Upon termination of employment and participation in the DROP, the DROP participant shall receive his or her total DROP benefits and begin to receive his or her previously determined normal retirement benefits. Employment while participating in the DROP does not guarantee employment for any specified period. A DROP participant is a retirant of the retirement system. (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 and provided that: (1) Election to participate may be within 84 months 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 vears of credited service regardless of age. e fbr a momber who °,,,.i,°a „ -.,l r°*;,.°ffi-e + date or age p;1ar to the e ffee ve date of the ordi,anee ffe Whieh this Ordinance No. 6-2012 Page 64 of 74 the d ftofn whieh this t a Such member who fails to make an election within such 84-month election period shall forfeit all rights to participate in the DROP. b. Members of benefit group lifeguard who were employed by the town and not participating in the DROP on Mav 1, 2012 shall be eligible to participate in the DROP upon attaining ate 50 or the date on which the member's aye to last completed month plus credited service totals 65 vears or more. The benefit pavable to such member shall be the frozen accrued benefit based on credited service prior to Mav 1, 2012. The accrued benefit based on credited service on and after Mav 1, 2012 shall be payable to such member's DROP account, or directiv to the member if DROP participation has ceased. upon attainini4 aj4e 65. Such member who fails to make an election within such 84-month election period shall forfeit all rights to participate in the DROP. C. Members of benefit group general and benefit Group lifeguard hired on or after Mav 1, 2012 shall be eligible to participate in the DROP upon attaining age 65 with 10 or more vears of service. (2) The member is not utilizing an early retirement option. (3) There is no break in service to the town between the member's last working day as an employee and first day as a retirant and DROP participant. (c) Participation in the DROP. (1) The date on which participation in the DROP must terminate is within 120 months of the commencement of the election period provided in subsection (b)(1) of this section. Participation in the DROP may not exceed a maximum of 60 months. No DROP participant may continue to be eligible to participate in the DROP for more than 60 months or for any time after 120 months following the date on which the member first reaches normal retirement age or date, unless the member first reached normal retirement age or date prior to the effective date of the ordinance from which this section derives. (2) Submission of required information. Upon electing to participate in the DROP, the member shall submit on forms required by the retirement system and/or the third-party administrator: a. A written election to retire; b. A written election to participate in the DROP; C. An irrevocable resignation from service to the town and withdrawal from the DROP effective after no more than 60 months participation in the DROP; d. A properly completed DROP application for service retirement as provided in this section; and e. Any other information required by the retirement system or by the third-party administrator. (3) Re-employed retirants. Re-employed retirants of the town's retirement system are not eligible to participate in DROP. Ordinance No. 6-2012 Page 65 of 74 (d) Compensation for work verformed while varticivating in Be ,. yaL���er the DROP. Starting pay shall be at the base pay rate in effect on the employee's last working day of employment, prior to participation in the DROP. Job performance will be evaluated under the town's pay for performance system, and performance pay increases will be permitted as established by town policy. General pay increases shall also be awarded, as approved by the town council and the town manager. Performance pay increases and general pay increases awarded to DROP participants will be reflected in their salary but will not be reflected in pension payments made to DROP accounts or made after DROP participation. (1) Effective with the date of DROP participation, the member's initial normal monthly pension benefit, calculated in accordance with section 82-135 and based on creditable service and average final compensation and the effective date of retirement, shall be fixed. Retirement system amendments which become effective after the establishment date of participation in the DROP will not be applicable to the DROP participant, unless so stated by the amendment. The monthly pension benefit (minus any reduction as determined by the board of trustees as provided by subsection(h) of this section), cost of living adjustments, interest and earnings thereon, if any, shall accrue monthly in the retirement system or the individual investment account as applicable. Interest under the system investment method only shall accrue at an effective annual rate to be determined hereunder as set forth in subsection (h) of this section, and will be compounded monthly, on the prior month's accumulated ending balance, up to the month of termination of the DROP or death. Provided, however the monthly pension benefit payable to members of benefit group general or benefit group lifeguard who elect to become DROP participants shall be reduced by two percent to fund the probability of increased cost to the retirement system of members of such employment group electing to participate in DROP, which reduced amount shall thereafter be such participants' normal retirement or pension benefits. This reduction will be reviewed by the board of trustees from time to time as other actuarial assumptions are reviewed and may be modified by the town council. (2) The monthly pension benefits payable to the DROP (minus any reduction as determined by the board of trustees as provided by subsection (h) of this section) and interest thereon, if any, shall continue to accrue in the DROP until the established termination date of the DROP, or until the DROP participant terminates employment or dies prior to such date. Although individual DROP accounts shall not be established under the system investment method described above in subsection (a)(1), a separate accounting of each DROP participant's accrued benefits under the DROP shall be calculated and provided to DROP participants annually. (3) Employee benefits, other than benefits under the retirement system, which are normally granted to employees, will be provided to DROP participants. Such DROP participants are not members of the retirement system. (4) At the conclusion of the participant's DROP, any credits made to a DROP participant's account will cease. Membership in the DROP will automatically terminate 60 months after the effective date of participation in the DROP, except as provided in subsection (c)(1)a above. DROP participants may elect to discontinue membership in the DROP at any time, provided a two-week written notice of termination has been submitted to the plan administrator and the third-party administrator. Ordinance No. 6-2012 Page 66 of 74 i (5) At the conclusion of the participant's DROP, participants in the Self-Directed Investment Method shall exercise such options as provided by the third-party administrator's plan; or for participants in the system investment method, the retirement system shall distribute the participant's total accumulated DROP benefits, subject to the following provisions: a. The retirement system shall receive verification that such DROP participant has terminated membership in the DROP. b. The terminated DROP participant, or if deceased, such DROP participant's named beneficiary, shall elect on forms provided by the retirement system to receive payment of the DROP benefits in accordance with one of the options listed below. For a DROP participant or beneficiary who fails to elect a method of payment within 60 days of termination of the DROP, the retirement system will pay a lump sum as provided in subsection(d)(5)b.1. of this section. 1. Lump sum. All accrued DROP benefits, plus interest and earnings, if any, less withholding taxes remitted to the United States Internal Revenue Service, shall be paid to the DROP participant or surviving beneficiary. 2. Direct rollover. All accrued DROP benefits, plus interest and earnings, if any, shall be paid from the DROP directly to the custodian of an eligible retirement plan as defined in section 402(c)(8)(B) of the United States Internal Revenue Code. However, in the case of an eligible rollover distribution to the surviving spouse of a deceased DROP participant, an eligible retirement plan is an individual retirement account or an individual retirement annuity as described in section 402(c)(9) of the United States Internal Revenue Code. 3. Partial lump sum. A portion of the accrued DROP benefits shall be paid to the DROP participant or surviving spouse, less withholding taxes remitted to the United States Internal Revenue Service, and the remaining DROP benefits shall be transferred directly to the custodian of an eligible retirement plan as defined in section 402(c)(8)(B) of the United States Internal Revenue Code. However, in the case of an eligible rollover distribution to the surviving spouse of a deceased DROP participant, an eligible retirement plan is an individual retirement account or an individual retirement annuity as described in section 402(c)(9) of the United States Internal Revenue Code. The proportions shall be specified by the DROP participant or surviving beneficiary. C. The form of payment selected by the DROP participant or surviving beneficiary complies with the minimum distribution requirements of the United States Internal Revenue Code and payments begin no later than the date on which the participant reaches age 70 years and six months. (6) The accrued benefits of any DROP participant, and any contributions accumulated under such program, shall not be subject to assignment, execution, attachment, or to any legal process whatsoever, except for income deduction orders and federal income tax levies. (7) DROP participants shall not be eligible for disability retirement benefits as provided in section 82-140 or 82-141. In the event a DROP participant becomes incapacitated for employment by the town as defined under section 82-140 or 82-141, the DROP participation will terminate, and the former DROP participant will elect one of the alternatives under subsection (d)(5)b of this section. Ordinance No. 6-2012 Page 67 of 74 (8) The effective date of retirement of a DROP participant shall be the day selected by the member to begin participation in the DROP. (e) Death benefits under the DROP. (1) Upon the death of a DROP participant, the named beneficiary shall be entitled to apply for and receive the accrued benefits in the DROP as provided under subsection (d)(5)b of this section. (2) The normal pension benefit accrued to the DROP during the month of a DROP participant's death shall be the final monthly pension benefit credited for such DROP participant. (3) Eligibility to participate in the DROP terminates upon the death of a DROP participant. If the DROP participant dies on or after the effective date of enrollment in the DROP, but prior to the first monthly benefit being credited to the DROP, retirement system benefits shall be paid in accordance with section 82-143. (4) A DROP participant's survivor shall not be eligible for retirement system death benefits as provided in section 82-144. (f) Cost of living adjustment. The DROP participants' normal pension benefit shall be increased as provided in section 82-63(b). (g) Renewed membership. Participants of the DROP will not be permitted to be members of the town's retirement system. Contributions that normally would be made by the employee and the town will not be paid into the retirement system upon an individual's election to participate in the DROP. (h) Administration of the program. The board of trustees shall make such rules as are necessary for the effective and efficient administration of this subsection. The board of trustees shall not be required to advise participants of the federal tax consequences of an election related to the DROP but may advise participants to seek independent advice. (1) The DROP will be cost-neutral to the town. To maintain the cost-neutral basis to the town, the credited interest rate and any reduction in the DROP participants' monthly pension benefits payable to the DROP will be reviewed by the board of trustees from time to time as other actuarial assumptions are reviewed. All costs of the DROP and any increase or decrease in the cost of administering the DROP will be absorbed by: a. A change in the interest rate credited to participants in the system investment method; b. A change of the or establishment of a reduction of the DROP participants' monthly pension benefits payable to the DROP; and/or C. An increase in the fees charged by the third-party administrator to the individual investment accounts; As determined by the board of trustees with approval by the town council. (2) For those participants under the system investment method, interest on DROP participant's monthly pension benefits payable to the DROP shall accrue at an effective annual rate of 7.5 percent compounded monthly. Such interest rate shall be reviewed by the board of Ordinance No. 6-2012 Page 68 of 74 trustees from time to time as other actuarial assumptions are reviewed and may be redetermined by the board of trustees with approval by the town council. (3) Notwithstanding any other provision of this section 82-139 or the Code, a member who receives any DROP benefits for the portion of their pension benefits earned on or after May 1, 2012 shall be an at-will emWovee for the entire DROP period." Section 45. 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 82-140, to read as follows: "Sec. 82-140. Benefit Group General and Benefit Group Lifeguard: Disability retirement. (a) Upon the application of a member or the member's department head, a member of benefit aroup general and benefit group lifeguard who becomes incapacitated for employment by the town by reason of a personal injury or disease may be retired by the board of trustees subject to the following conditions: (1) The member has ten or more years of credited service in force, or was emploved by the town and not participating in the DROP on May 1, 2012; (2) The member is medically examined by a duly-qualified physician or surgeon selected by the relevant board of trustees for that purpose; (3) The physician or surgeon certifies to the geneiral °mpleyee board that the member is mentally or physically totally incapacitated for continued employment by the town, that such incapacity is likely to be permanent, and that the member should be retired; and (4) The board of trustees concurs with the certification of the physician or surgeon. (b) Upon disability retirement, a member shall be paid a pension computed according to section 82-135. (c) A member shall not be entitled to receive disability pension benefits if the disability is a result of: (1) Excessive or habitual use of drugs, intoxicants or narcotics by the member; (2) Injury or disease sustained by the member while willfully and illegally participating in fights, riots or civil insurrections, or while committing a crime; (3) Injury or disease sustained by the member while serving in any armed forces; or (4) Injury or disease sustained by the member after his employment has terminated." Section 46. 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 82-143, to read as follows: "Sec. 82-143. Benefit Group General and Benefit Group Lifeguard: Death after retirement; automatic survivor pension to minor children and/or surviving spouse. For members who retired or entered the DROP after September 30, 1995 and prior to May 1, 2012, members who terminated employment with 10 or more years of credited service prior to May 1, 2012, and members who attained normal retirement eligibility based on credited service Ordinance No. 6-2012 Page 69 of 74 as of May 1, 2012, excludina credited service purchased pursuant to section 82-54. and who were employed by the town and not narticivatin4 in the DROP on that date, death benefits after retirement shall be navable as follows: Surviving children. (44-) The surviving children of a deceased retirant shall be paid a pension terminating upon the attainment of age 18 or death, if the following conditions are satisfied: la. The retirant retired after September 30, 1995. 2b. A valid election of optional form of payment under section 82-145 is not in effect. (b2-) Payment of the pension shall be made for months beyond age 18 years, but not beyond the month in which age 25 is attained, if a pension payment would not otherwise be made for the month under the provisions of subsection(b) of this section. (c-3) The amount of each surviving child's pension is 25 percent of the retirant's pension at time of death, not to exceed an equal share of 75 percent of the retirant's pension when there are four or more surviving children being paid. Pension payments shall be made to the legal guardian of each child. (2b) Surviving spouse. The surviving spouse of a deceased retirant shall be paid a pension terminating upon death. The amount of a surviving spouse's pension for a month is the difference, if any, between 75 percent of the retirant's pension and the aggregate amount paid to surviving children for the month. (b) For members who did not attain normal retirement eligibility based on credited service as of May 1, 2012. excludinj4 credited service purchased pursuant to section 82-54, who were emploved by the town and not participating in the DROP on that date. death benefits after retirement shall be payable as follows: (1) Surviving children. a. The surviving children of a deceased retirant shall be paid a pension terminatiniz upon the attainment of ajae 18 or death, if the following conditions are satisfied: 1. The retirant was emoloved and not participating in the DROP on May 1, 2012 and retired thereafter. 2. A valid election of optional form of pavment under section 82-105 is not in effect. b. Payment of the pension shall be made for months bevond age 18 years, but not beyond the month in which aye 25 is attained, if a pension payment would not otherwise be made for the month under the provisions of subsection (b) of this section. C. The amount of each surviving child's pension is 25 percent of the retirant's pension based. on the retirant's frozen accrued benefit as of May 1. 2012, not to exceed an equal share of 75 percent of the retirant's pension when there are four or more surviving children beinp- paid. Pension payments shall be made to the legal Guardian of each child. (2) Surviving spouse. The surviving spouse of a deceased retirant shall be paid a pension terminating upon death. The amount of a surviving spouse's pension for a month is the difference, if any, between 75 percent of the retirant's pension based on the retirant's frozen. Ordinance No. 6-2012 Page 70 of 74 accrued benefit as of May 1, 2012, and the aRRreRate amount paid to surviving children for the month. (3) Ten year certain. If a retirant dies within ten years of retirement, the total monthly navments due under subsection (a) and/or (b) above shall not be reduced from that which may have been due to the retirant until the tenth anniversary of the retirant's retirement date. (c) 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 an optional form of benefit pursuant to section 82-96(c) for benefits based on credited service on and after May 1, 2012, but there shall be no automatic survivor pension for death after retirement based on such credited service on and after May 1, 2012." Section 47. 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 82-144,to read as follows: "Sec. 82-144. Benefit Group General and Benefit Group Lifeguard; Death while an employee of the town; automatic survivor pension to minor children and/or spouse. (a) Surviving children. (1) The surviving children of a deceased member shall be paid a pension terminating upon the attainment of age 18 or death if the following conditions are satisfied: a. The member has ten or more years of credited service, or was emploved by the Town and not participating in the DROP on May 1, 2012, and dies while in the employ of the town after Septe bef 30, 1 995; and b. A valid election of optional form of payment under section 82-145 is not in effect. (2) Payment of the pension shall be made for months beyond such a beneficiary age of 18 years, but not beyond the month in which the age 25 is attained, if a pension payment would not otherwise be made for the month under the provisions of subsection(b) of this section. (3) The amount of each surviving child's pension, which shall be paid to the legal guardian of each child, is: a. For members who attained normal retirement eli6bility based on credited service as of May 1, 2012, excludiniz credited service purchased pursuant to section 82-54, and who were emploved by the town and not participating in the DROP on that date, 25 percent of the amount of pension computed according to section 82-135, based on the deceased member's average final compensation and credited service at time of death. A child's pension shall not exceed an equal share of 75 percent of the amount of pension computed according to section 82-135,based on the deceased member's average final compensation and credited service at time of death, where there are four or more surviving children being paid. b. For 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 emploved by the town and not participatinv in the DROP on that date, 25 percent of the amount of pension computed according to section 82-135, based on the deceased member's frozen Ordinance No. 6-2012 Page 71 of 74 accrued benefit as of May 1, 2012, plus 25 percent of the amount of pension computed according to section 82-135, based on the deceased member's accrued benefit for credited service on or after May 1, 2012. A child's pension shall not exceed an equal share of 75 percent of the amount of pension computed according to section 82-135, based on the deceased member's frozen accrued benefit as of May 1, 2012, plus 75 percent of the amount of pension computed according to section 82-135, based on the deceased member's accrued benefit for credited service on or after May 1, 2012, where there are four or more surviving children being paid. C. For members hired on or after May 1, 2012, 25 percent of the amount of pension computed according to section 82-135, based on the deceased member's accrued benefit for credited service on or after May 1, 2012. A child's pension shall not exceed an equal share of 75 percent of the amount of pension computed according to section 82-135. based on the deceased member's accrued benefit for credited service on or after May 1, 2012, where there are four or more surviving children being paid. Pension payments shall be trade to the legal ,. ,,,.a;a of eaeh ehild. (b) Surviving spouse. (1) The surviving spouse of a deceased member shall be paid a pension terminating upon death if the following conditions are satisfied: a. The member has ten or more years of credited service, or was employed by the Town and not participating in the DROP on May 1, 2012, and dies while in the employ of the town; b. A valid election of optional form of payment under section 82-145 is not in effect; and C. The member was married to the surviving spouse at the time of death. (2) Payment of a surviving spouse's pension shall commence the first day of the month following the date the deceased member would have met an age and service condition for normal retirement in the absence of death. (3) The amount of a surviving spouse's pension is: 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, the difference, if any, between 75 percent of the retirant's pension computed according to section 82-135, based on the deceased member's average final compensation and credited service at time of death, and the aggregate amount paid to surviving children for the month. b. For 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, the difference, if any, between 75 percent of the retirant's pension computed according to section 82-135, based on the deceased member's frozen accrued benefit as of May 1, 2012, plus 75 percent of the retirant's pension computed according to section 82-135, based on the deceased member's accrued benefit for credited service on and after of May 1, 2012, and the aggregate amount paid to surviving children for the month. Ordinance No. 6-2012 Page 72 of 74 C. For members hired on or after May 1, 2012, the difference, if any, between 75 percent of the retirant's pension computed according to section 82-135, based on the deceased member's accrued benefit for credited service on and after May 1, 2012, and the aggregate amount paid to surviving children for the month." Section 48. 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 82-145,to read as follows: "Sec. 82-145. Benefit Group General and Benefit Group Lifeguard: Elective survivor pension. (a) The elected surviving beneficiary of a deceased member shall be paid a pension terminating upon death if the following conditions are satisfied: (1) The member has elected a survivor beneficiary. (2) The member dies while in the employ of the town with at least ten years of credited service, or the member was employed by the Town and not participating in the DROP on May 1, 2012 and thereafter dies while in the employ of the town. (b) The election of a survivor beneficiary shall be in writing and filed with the human resources devartmentretirement system. The election of a survivor beneficiary shall be null and void upon the member's retirement or prior termination of town employment. A member may revoke a nomination of survivor beneficiary at any time and again elect a survivor beneficiary. (c) The amount of a surviving dependent elected beneficiary's pension shall be: (1) 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, computed according to section 82-135 as if the deceased member had elected optional form of payment A100 provided in section 82-136 and retired the day preceding death, notwithstanding that the deceased member may not have satisfied the section 82-134 conditions for retirement. (2) For 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, a benefit computed according to section 82-135, based on the member's frozen accrued benefit as of May 1, 2012 plus the benefit based on the member's credited service on and after that date, as if the deceased member had elected optional form of payment A100 provided in section 82-136 and retired the day preceding death, notwithstanding that the deceased member may not have satisfied the section 82-134 conditions for retirement. (3) For members hired on or after May 1, 2012, a benefit computed according to section 82- 135 based on credited service on and after that date computed as if the deceased member had elected optional form of payment A100 provided in section 82-136 and retired the day preceding death, notwithstanding that the deceased member may not have satisfied the section 82-134 conditions for retirement." Ordinance No. 6-2012 Page 73 of 74 Section 49. 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 50. 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 51. Codification. This Ordinance shall be codified and made a part of the official Code of Ordinances of the Town of Palm Beach. Section 52. 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 10"' day of April, 2012, and for second and final reading on this 24"'day of April, 2012. /Qu s�$ G ' L. Contglio, Mayot D A. Rosow, Town Council President 4 Ro e Wildrick, President Pr TOM-,4 VJillianJ. Diamon , To Council Me , K" ATTEST: ichard lei Town Council Member Swan A. wen , C, Town Clerk Mic i eI J Pucillo, Town�Council Member \i ft i ? 6'r4inance -2012 Page 74 of 74