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