HB 0801 2003
1	A bill to be entitled
2	An act relating to the City of West Palm Beach, Palm Beach
3	County; amending the West Palm Beach Firefighters Pension
4	Fund to provide for optional methods of crediting
5	investment earnings to chapter 175, Florida Statutes,
6	share accounts and DROP accounts; repealing any
7	conflicting part of the special act or resolution, or
8	parts thereof; providing an effective date.
9
10	Be It Enacted by the Legislature of the State of Florida:
11
12	Section 1. Subparagraph 3. of paragraph (j) of subsection
13	(5) of section 17 of chapter 24981, Laws of Florida, 1947, as
14	amended by chapter 2002-360, Laws of Florida, is amended to
15	read:
16	Section 17. West Palm Beach Firefighters Pension Fund.--
17	(5) Service pension.--
18	(j) Chapter 175, Florida Statutes, share accounts.--
19	3. Annual allocation of accounts.--
20	a. Moneys shall be credited to each individual member
21	account in an amount directly proportionate to the number of pay
22	periods for which the member was paid compared to the total
23	number of pay periods for which all members were paid, counting
24	the pay periods in the calendar year preceding the date for
25	which chapter 175, Florida Statutes, tax revenues were received.
26	b. At the end of each fiscal year (September 30), each
27	individual account shall be adjusted to reflect the earnings or
28	losses resulting from investment, as well as reflecting costs,
29	fees, and expenses of administration.
30	c. Effective October 1, 2002, vested participants have the
31	option to select one of three methods to credit investment
32	earnings to their account. The method may be changed each year
33	effective October 1; however, the method must be elected prior
34	to October 1. The methods are:
35	(I)The investment earnings or losses credited to the
36	individual member accounts shall be in the same percentage as
37	are earned or lost by the total investment earnings or losses of
38	the Fund as a whole, unless the Board dedicates a separate
39	investment portfolio for chapter 175, Florida Statutes, share
40	accounts, in which case the investment earnings or losses shall
41	be measured by the investment earnings or losses of the separate
42	investment portfolio;
43	(II) A fixed annual rate of 8.25 percent; or
44	(III) A percentage of the share account assets to be
45	credited with earnings or losses in accordance with sub-sub-
46	subparagraph (I) and a corresponding percentage of the share
47	account assets credited in accordance with sub-sub-subparagraph
48	(II). The combined total percentage invested under this sub-sub-
49	subparagraph must equal 100 percent.
50	d. Costs, fees, and expenses of administration shall be
51	debited from the individual member accounts on a proportionate
52	basis, taking the cost, fees, and expenses of administration of
53	the Fund as a whole, multiplied by a fraction, the numerator of
54	which is the total assets in all individual member accounts and
55	the denominator of which is the total assets of the Fund as a
56	whole. The proportionate share of the costs, fees, and expenses
57	shall be debited from each individual member account on a pro
58	rata basis in the same manner as chapter 175, Florida Statutes,
59	tax revenues are credited to each individual member account
60	(i.e., based on pay periods).
61	e. If the entire balance of the individual member account
62	is withdrawn before September 30 of any year, there shall be no
63	adjustment made to that individual member account to reflect
64	either investment earnings or losses or costs, fees, and
65	expenses of administration.
66	Section 2. Subparagraph 2. of paragraph (k) of subsection
67	(5) of section 17 of chapter 24981, Laws of Florida, 1947, as
68	amended by chapter 2002-360, Laws of Florida, is amended to
69	read:
70	Section 17. West Palm Beach Firefighters Pension Fund.--
71	(5) Service pension.--
72	(k) Deferred Retirement Option Plan (DROP).--
73	2. Amounts payable upon election to participate in the
74	DROP.--
75	a. Monthly retirement benefits that would have been
76	payable had the member terminated employment with the Department
77	and elected to receive monthly pension payments shall be paid
78	into the DROP and credited to the retirant. Payments into the
79	DROP shall be made monthly over the period the retirant
80	participates in the DROP, up to a maximum of 60 months.
81	b. Effective October 1, 2002, participants have the option
82	to select one of three methods to credit investment earnings to
83	their account. Investment earnings shall be credited on a
84	quarterly basis. The method may be changed each year effective
85	October 1; however, the method must be elected prior to October
86	1. The methods are:
87	(I) EarningsPayments to the DROP earn interestusing the
88	rate of investment return earned on Pension Fund assets as
89	reported by the Fund’s investment monitor. DROP assets are
90	commingled with the Pension Fund assets for investment purposes;
91	(II) A fixed rate of 8.25 percent; or
92	(III) A percentage of the DROP account assets to be
93	credited with earnings or losses in accordance with sub-sub-
94	subparagraph (I) and a corresponding percentage of the DROP
95	account assets credited in accordance with sub-sub-subparagraph
96	(II). The combined total percentage invested under this sub-sub-
97	subparagraph must equal 100 percent.
98
99	However, if a member does not terminate employment at the end of
100	participation in the DROP, interest credit shall cease on the
101	current balance and on all future DROP deposits.
102	c. No payments shall be made from the DROP until the
103	member terminates employment with the Department.
104	d. Upon termination of employment, participants in the
105	DROP shall receive the balance of the DROP account in accordance
106	with the following rules:
107	(I) Members may elect to begin to receive payment upon
108	termination of employment or defer payment of the DROP until the
109	latest day under sub-sub-subparagraph (III).
110	(II) Payments shall be made in either:
111	(A) Lump sum.--The entire account balance shall be paid to
112	the retirant upon approval of the Board of Trustees.
113	(B) Installments.--The account balance shall be paid out
114	to the retirant in three equal payments paid over 3 years, the
115	first payment to be made upon approval of the Board of Trustees.
116	(C) Annuity.--The account balance shall be paid out in
117	monthly installments over the lifetime of the member or until
118	the entire balance is exhausted. Monthly amount paid will be
119	determined by the Fund’s actuary in accordance with selections
120	made by the member in a form provided by the Board of Trustees.
121	(III) Any form of payment selected by a member must comply
122	with the minimum distribution requirements of the IRC 401(A)(9),
123	and are subject to the requirements of subsection (19).
124	(IV) The beneficiary of the DROP participant who dies
125	before payments from DROP begin shall have the same right as the
126	participant in accordance with subsection (7).
127	e. Costs, fees, and expenses of administration shall be
128	debited from the individual member accounts on a proportionate
129	basis, taking the cost, fees, and expenses of administration of
130	the Fund as a whole, multiplied by a fraction, the numerator of
131	which is the total assets in all individual member accounts and
132	the denominator of which is the total assets of the Fund as a
133	whole.
134	Section 3. All special laws and parts of special laws,
135	ordinances, or regulations, or parts thereof, insofar as they
136	are in conflict or inconsistent with the provisions of this act
137	are repealed.
138	Section 4. This act shall take effect upon becoming a law.