Florida Senate - 2009 (NP) SB 2718
By Senators Joyner, Crist, Justice, and Storms
18-01155A-09 20092718__
1 A bill to be entitled
2 An act relating to the City of Tampa, Hillsborough
3 County; amending chapter 23559, Laws of Florida, 1945,
4 as amended, the General Employees’ Pension Plan for
5 the City of Tampa; revising definitions for “Salaries
6 or Wages,” “Employee,” and “Military Service Time”;
7 providing a definition for “Limitation Year”;
8 providing that all employee contributions to the
9 pension fund are mandatory and that the city shall pay
10 such contributions to the fund on behalf of the
11 employee; providing non-spouse beneficiaries an option
12 to rollover death benefits; providing for refund of
13 employee contributions; revising construction of the
14 act; revising benefit limits; revising requirements
15 for distribution of benefits; providing a default
16 distribution when a member fails to elect a
17 distribution option; revising direct rollover options;
18 providing an effective date.
19
20 Be It Enacted by the Legislature of the State of Florida:
21
22 Section 1. Subsections (A), (E), and (H) of section 4,
23 subsection (A) of section 5, section 19, subsections (A), (B),
24 and (F) of section 24, and sections 25 and 26 of chapter 23559,
25 Laws of Florida, 1945, as amended, are amended, and subsection
26 (S) is added to section 4, subsection (C) is added to section
27 12, and subsection (C) is added to section 14 of that chapter,
28 to read:
29 Section 4. Definitions.
30 (A) Salaries or Wages. Salaries or Wages for the purpose of
31 this act shall be the base amounts earned by the Employee, plus
32 regular longevity bonuses, overtime, and shift premiums. Salary
33 or Wages shall also include elective amounts that are excludible
34 from the Employee’s gross income under Section 125 (cafeteria
35 plan) amounts that are not available to the Employee in cash in
36 lieu of group health coverage because the Employee is unable to
37 certify that he or she has other health coverage. Such deemed
38 Section 125 compensation will be treated as an amount under
39 Section 125 of the Code only if the Employer does not request or
40 collect information regarding the Employees’ other health
41 coverage as part of the enrollment for the health plan; 403(b)
42 (tax-sheltered annuity); 457 (Section 457 plan); and, effective
43 for Plan Years beginning on and after January 1, 2001, 132(f)(4)
44 (qualified transportation fringe benefit plan) of the Internal
45 Revenue Code of 1986, and the regulations thereunder as amended
46 (the “Code”). Salaries or Wages shall exclude:, but exclusive of
47 other premiums, other than shift premiums, allowances, or
48 special payments, or any casual nonrecurring or unpredictable
49 bonuses; payments for unused accrued bona fide sick, vacation,
50 or other leave; payments received by an Employee pursuant to a
51 nonqualified unfunded deferred salary or wages plan; and
52 severance pay that is paid after an Employee severs employment
53 with the City. However, Salaries or Wages, as defined herein,
54 earned but not paid to the Employee by the Employee’s severance
55 date with the City shall be considered Salary or Wages for Plan
56 purposes. In addition to other applicable limitations set forth
57 in the Plan, and notwithstanding any other provision of the Plan
58 to the contrary, for Plan Years beginning on or after January 1,
59 1996, the annual Salaries or Wages of each Employee taken into
60 account under the Plan shall not exceed the annual compensation
61 limit provided for in Section 401(a)(17) of the Code the Omnibus
62 Budget Reconciliation Act of 1993 (the “OBRA 1993 Annual
63 Compensation Limit”). The OBRA 1993 Annual Compensation Limit is
64 $150,000, as adjusted by the Commissioner of the Internal
65 Revenue Service for increases in the cost-of-living in
66 accordance with Section 401(a)(17)(B) of the Internal Revenue
67 Code of 1986, as amended (the “Code”). The cost-of-living
68 adjustment in effect for a calendar year applies to any period,
69 not exceeding 12 months, over which Salaries or Wages are
70 determined (determination period) beginning in such calendar
71 year. If a determination period consists of fewer than 12
72 months, the annual compensation the OBRA 1993 Annual
73 Compensation limit will be multiplied by a fraction, the
74 numerator of which is the number of months in the determination
75 period, and the denominator of which is 12. For Plan Years
76 beginning on or after January 1, 1996, any reference in this
77 Plan to the limitation under Section 401(a)(17) of the Code
78 shall mean the OBRA 1993 Annual Compensation Limit set forth in
79 this provision. The limitation on Salaries or Wages for an
80 “eligible Employee” shall not be less than the amount which was
81 allowed to be taken into account hereunder as in effect on July
82 1, 1993. “Eligible Employee” is an individual who was a
83 participant in the Plan before the first Plan Year beginning
84 after December 31, 1995. Commencing for earnings paid the first
85 pay date after October 1, 2005, all mandatory Employee
86 Contributions to the Fund shall be picked up and paid by the
87 City. Such contributions, although designated as Employee
88 Contributions, shall be paid by the City in lieu of
89 contributions by the Employee. The contributions so assumed
90 shall be treated as tax-deferred Employer “pickup” contributions
91 pursuant to Section 414(h) of the Internal Revenue Code. Members
92 shall not have the option of receiving the contributed amounts
93 directly instead of having such contributions paid by the City
94 to the Fund.
95 (E) Employee. For the purposes of this Act, “employee”
96 shall mean an employee covered or qualified to be covered under
97 either Division A or Division B of this Plan. An employee
98 covered by this Plan shall include all employees whether full
99 time, part-time or temporary, who have taken the physical
100 examination required by Section 18. Employees whose Salaries or
101 Wages are paid pursuant to a federal grant-in-aid program are
102 included in this Act only when the federal government pays the
103 employer’s contribution. Casual laborers are excluded from this
104 definition as are employees covered by other City pension plans.
105 Any individual who is an independent contractor, or who performs
106 services for the City under an agreement that identifies the
107 individual as an independent contractor, is excluded from the
108 Plan even if a governmental agency retroactively reclassifies
109 such individual as an Employee.
110 (H) Military Service Time. For Members rehired after leave
111 to provide military service prior to December 12, 1994, in
112 computing Service allowance for retirement, creditable Service
113 shall, at the option of the Employee, include any service which
114 interrupted employment with the Employer, not to exceed a period
115 of 3 years, in any of the armed services of the United States
116 during time of war, upon condition that within 90 days from the
117 date of reinstatement of such Employee now or hereafter serving
118 in the armed forces, or within 90 days from the effective date
119 of this act for those Employees already reinstated, such
120 Employee shall exercise such option by filing written notice
121 thereof with the Board of Trustees and, if a Division A
122 employee, shall within the 12 ensuing months pay into the
123 retirement fund an amount equal to the aggregate contributions
124 such Employee would have made had such Employee not served in
125 the armed forces, based upon the Salary or Wages being earned at
126 the time of entering the armed services, and if any such
127 Employee shall fail to exercise such option within the time and
128 in the manner hereinabove prescribed, such period of military
129 service shall not thereafter be allowed as creditable Service,
130 but shall not be deemed a break in such Employee’s Continuous
131 Service eligibility period. Members rehired on or after December
132 12, 1994, Notwithstanding the foregoing, an Employee shall be
133 credited with service for purposes of vesting and benefit
134 accrual under the Plan for his or her service in the uniformed
135 service (as defined in the Uniformed Services Employment and
136 Reemployment Rights Act of 1994 (the “USERR Act”) upon being
137 granted leave by the Employer for such uniformed service and
138 termination from employment as an Employee with the Employer,
139 provided that the Employee must return to his or her employment
140 as an Employee with the Employer within the time periods
141 prescribed by the USERR Act; and the Employee complies with the
142 Employee contribution requirements prescribed by the USERR Act.
143 The maximum service credit for uniformed service shall be 5
144 years or such other time period as may be prescribed by the
145 USERR Act. Effective as of the dates reflected in the Heroes
146 Earnings Assistance and Relief Tax Act (”HEART Act”), the Plan
147 shall comply with all applicable provisions of the HEART Act.
148 (S) Limitation Year. The limitation year shall be the Plan
149 Year.
150 Section 5. Contributions. The Pension Fund shall consist of
151 moneys derived from the following sources:
152 (A) Employee Contributions. Division A Employees.
153 Commencing for earnings paid, beginning with the first pay date
154 after January 1, 2006, all Employee contributions to the Fund
155 shall be mandatory employee contributions and shall be picked up
156 and paid by the City on behalf of the Member. Such contributions
157 There shall be made by Employees in an amount equal to a
158 contribution of 7 percent of all Salaries or Wages of all
159 Employees participating in this Fund, which shall be deducted
160 from said Salaries or Wages by the Director of Finance, before
161 the same are paid, as long as the Employee continues in the
162 Service of the City of Tampa, regardless of the number of years
163 of Service with the City. Such contributions, although
164 designated as Employee contributions, will be paid by the City
165 in lieu of contributions by the Employee. The contributions so
166 assumed shall be treated as tax-deferred Employer “pick-up”
167 contributions pursuant to Section 414(h) of the Code. Members
168 shall not have the option of receiving the contributed amounts
169 directly instead of having such contributions paid by the City
170 to the Fund.
171 Section 12. Death Benefits.
172 (C) In accordance with Section 402(c)(11)(A) of the Code,
173 for distributions made after December 31, 2006, any non-spouse
174 beneficiary, as defined in Section 401(a)(9)(E) of the Code,
175 from Division A or Division B shall have the option to rollover
176 all or a portion of his or her death benefit via a direct
177 trustee-to-trustee transfer to an inherited individual
178 retirement account, as defined in Section 408(d)(3)(c) of the
179 Code, provided such distribution meets the definition of an
180 eligible rollover distribution as defined in Section 26 of this
181 Act.
182 Section 14. Refund of Contributions Contribution.
183 (C) Refund of Employee contributions shall be paid in
184 accordance with Section 26 of this Act.
185 Section 19. Construction. This Act shall be liberally
186 construed in accordance with general law and the federal tax
187 code, and if any part or portion thereof be declared invalid, or
188 the application thereof to any person, circumstance or thing is
189 declared invalid, the validity of the remainder of this Act
190 shall not be affected thereby.
191 Section 24. Limitations on Amounts of Benefits.
192 (A) For Plan Years ending after December 31, 2001, benefits
193 for an Employee under this Plan, when expressed as a benefit
194 payable annually in the form of a straight life annuity without
195 regard to the death benefit or any other ancillary benefit,
196 shall not at any time within the limitation year exceed the
197 limits provided under Section 415(b) of the Code $90,000.
198 (B)1. The $90,000 limitation set forth in subsection (A)
199 shall be actuarially reduced in accordance with regulations
200 prescribed by the Secretary of the Treasury for any retirement
201 benefit that may begin before an Employee attains age 62, by
202 adjusting such benefit so that it is equivalent to such a
203 benefit beginning at age 62. For Plan Years ending before
204 January 1, 2002, and repealed for Plan Years ending thereafter,
205 the reduction shall not reduce the $90,000 limitation set forth
206 in subsection (A) to less than (a) $75,000 if the benefit begins
207 at or after age 55, or (b) if the benefit begins before age 55,
208 the equivalent of the $75,000 limitation for age 55.
209 2. If any retirement benefit begins after the Employee
210 attains age 65, the $90,000 limitation set forth in subsection
211 (A) shall be adjusted (based upon an interest rate assumption of
212 5 percent) in accordance with regulations prescribed by the
213 Secretary of the Treasury, by adjusting such benefit so that it
214 is equivalent to such benefit beginning at age 65.
215 (F) The following is repealed for Plan Limitation Years
216 beginning after December 31, 1999:
217 1. In the event that any Employee participates in both a
218 defined benefit plan and a defined contribution plan maintained
219 by the City, then the sum of the Defined Benefit Plan Fraction
220 (as defined in Section 415(e) of the Code) and the Defined
221 Contribution Plan Fraction (as defined in Section 415(e) of the
222 Code) for any limitation year shall not exceed 1.0.
223 2. In the event that the sum of the Defined Benefit Plan
224 Fraction and the Defined Contribution Plan Fraction exceeds 1.0,
225 then the Board of Trustees shall take such actions, applied in a
226 uniform and nondiscriminatory manner, as will keep the benefits
227 and annual additions thereto for such Employees from exceeding
228 these limits. Adjustments shall be made to this Plan before any
229 adjustments shall be required to any other plans.
230 Section 25. Latest Date of Commencement of Benefits
231 Required Distributions.
232 (A) The distribution of a member’s benefit shall be made in
233 accordance with the following requirements, and shall otherwise
234 comply with Section 401(a)(9) of the Code and the Regulations
235 thereunder, as prescribed by the Commissioner in Revenue
236 Rulings, Notices, and other guidance published in the Internal
237 Revenue Bulletin, to the extent that said provisions apply to
238 governmental plans under Section 414(d) of the Code. The
239 distribution provisions of Section 401(a)(9) of the Code shall
240 override any distribution options in the Plan inconsistent with
241 Section 401(a)(9) of the Code:
242 1. Any benefit paid to a member an Employee shall commence
243 not later than the last to occur of:
244 (a)1. April 1 of the year following the calendar year in
245 which the member Employee retires; or
246 (b)2. April 1 of the year immediately following the
247 calendar year in which the member Employee reaches age 70 1/2.
248 2. Distributions of members’ benefits will be made in
249 accordance with Sections 1.401(a)(9)-2. through 1.401(a)(9)-9.
250 of the Code and such other rules thereunder as may be prescribed
251 by the Secretary of the Treasury, to the extent that said
252 provisions apply to governmental plans under Section 414(d) of
253 the Code.
254 (B) In the case of a benefit payable by reason of an
255 Employee’s retirement or other termination of employment, in no
256 event shall payment extend beyond the life or life expectancy of
257 the Employee or the joint lives or life expectancies of the
258 Employee and the Employee’s designated beneficiary. In the case
259 of an Employee who is receiving his or her pension benefit as of
260 the date of his or her death, the survivor portion of the
261 Employee’s pension benefit shall be paid at least as rapidly as
262 under the method being used prior to the Employee’s death.
263 3.(C) Notwithstanding anything contained herein to the
264 contrary, payments under the Plan to a Beneficiary due to a
265 member’s death shall satisfy the incidental death benefit
266 requirements and all other applicable provisions of Section
267 401(a)(9)(G) 401(a)(9) of the Code, the regulations issued
268 thereunder (including Section 1.401(a)(9)-2 of the proposed
269 Treasury regulations), and such other rules thereunder as may be
270 prescribed by the Secretary of the Treasury, including IRS
271 Notice 2007-7, to the extent that said provisions apply to
272 governmental plans under Section 414(d) of the Code.
273 Section 26. Direct Rollovers.
274 (A) This section applies to distributions made on or after
275 January 1, 1993. Notwithstanding any provision of the Plan to
276 the contrary that would otherwise limit a distributee’s (as
277 defined below) election under this section, a distributee may
278 elect, at the time and in the manner prescribed by the
279 Commissioner of the Internal Revenue Service, to have any
280 portion of an eligible rollover distribution (as defined below)
281 paid directly to an eligible retirement plan (as defined below)
282 specified by the distributee in a direct rollover (as defined
283 below). If a member fails to elect a distribution option as
284 provided under Sections 14 and 22 of this Act, then such
285 member’s benefit shall be rolled over to an individual
286 retirement account designated by the Board of Trustees, as
287 defined in Section 6.
288 (B) For purposes of this section, the following terms shall
289 have the following meanings:
290 1. An “eligible rollover distribution” is any distribution
291 of all or any portion of the balance to the credit of the
292 distributee, except that an eligible rollover distribution does
293 not include: any distribution that is one of a series of
294 substantially equal periodic payments (not less frequently than
295 annually) made for the life (or life expectancy) of the
296 distributee or the joint lives (or joint life expectancies) of
297 the distributee and the distributee’s designated beneficiary, or
298 for a specified period of 10 years or more; any distribution to
299 the extent such distribution is required under Section 401(a)(9)
300 of the Code, and the portion of any distribution that is not
301 includable in gross income (determined without regard to the
302 exclusion for net unrealized appreciation with respect to
303 employer securities). Notwithstanding the above, a portion of a
304 distribution shall not fail to be an “eligible rollover
305 distribution” merely because the portion consists of after-tax
306 voluntary Employee contributions that are not includable in
307 gross income. However, such portion may be transferred only to
308 an individual retirement account or annuity described in Section
309 408(a) or (b) of the Code or to a qualified defined contribution
310 plan described in Section 401(a) or 403(a) of the Code that
311 agrees to separately account for amounts transferred, including
312 separately accounting for the portion of such distribution that
313 is includable in gross income and the portion of such
314 distribution that is not so includable.
315 2. An “eligible retirement rollover plan” is an individual
316 retirement account described in Section 408(a) of the Code, an
317 individual retirement annuity described in Section 408(b) of the
318 Code, other than an endowment contract, or an annuity plan
319 described in Section 403(a) of the Code, a qualified trust (an
320 employees’ trust) described in Section 401(a) of the Code that
321 is exempt from tax under Section 501(a) of the Code, an annuity
322 plan described in Section 403(a) of the Code, an eligible plan
323 under Section 457(b) of the Code that is maintained by a state,
324 a political subdivision of a state, or any agency or
325 instrumentality of a state or political subdivision and that
326 agrees to separately account for amounts transferred into such
327 plan from this Plan, and an annuity contract described in
328 Section 403(b) of the Code that accepts the distributee’s
329 eligible rollover distribution. However, in the case of an
330 eligible rollover distribution to the surviving spouse, an
331 eligible retirement plan is an individual retirement account or
332 individual retirement annuity.
333 3. A “distributee” includes the member or former member an
334 Employee or former employee. In addition, the member’s
335 Employee’s or former member’s employee’s surviving spouse and
336 the member’s Employee’s or former member’s employee’s spouse or
337 former spouse who is the alternate payee under a qualified
338 domestic relations order, as defined in Section 414(p) of the
339 Code, are distributees with regard to the interest of the spouse
340 or former spouse.
341 4. A “direct rollover” is a payment by the Plan to the
342 eligible retirement plan specified by the distributee.
343 Section 2. This act shall take effect October 1, 2009.