HB 1165

1	A bill to be entitled
2	An act relating to the City of Tampa, Hillsborough County;
3	amending chapter 23559, Laws of Florida, 1945, as amended;
4	revising the General Employees' Pension Plan for the City
5	of Tampa; revising the definitions of the terms "Salaries
6	or Wages," "Employee," and "Military Service Time";
7	revising application of the term "Actuarial Equivalent";
8	defining the term "Limitation Year"; providing that all
9	employee contributions to the pension fund after a certain
10	date are mandatory and that the city shall pay such
11	contributions to the fund on behalf of the employee;
12	providing certain beneficiaries an option to roll over
13	certain death benefits; providing for a refund of employee
14	contributions; revising construction of the act; allowing
15	DROP members the opportunity to elect an investment
16	option, as determined by the board of trustees, to be
17	applied to the participant's account for the plan year
18	entering the DROP program and for each subsequent plan
19	year; revising benefit limitations; revising requirements
20	for distribution of benefits; providing a default
21	distribution when a member fails to elect a distribution
22	option; revising direct rollover options; revising the
23	definitions of the terms "eligible rollover distribution,"
24	"eligible rollover plan," and "distributee"; providing an
25	effective date.
26
27	Be It Enacted by the Legislature of the State of Florida:
28
29	Section 1.  Subsections (A), (E), (H), and (P) of section
30	4, subsection (A) of section 5, section 19, subsection (D) of
31	section 22, subsections (A), (B), (D), (E), and (F) of section
32	24, and sections 25 and 26 of chapter 23559, Laws of Florida,
33	1945, as amended, are amended, and subsection (S) is added to
34	section 4, subsection (C) is added to section 12, and subsection
35	(C) is added to section 14 of that chapter, to read:
36	Section 4.  Definitions.
37	(A)  Salaries or Wages.  Salaries or Wages for the purpose
38	of this Act shall be the base amounts earned by the Employee,
39	plus regular longevity bonuses, overtime, and shift premiums.
40	Salary or Wages shall also include elective amounts that are
41	excludible from the Employee's gross income under Sections 125
42	(including amounts that are not available to the Employee in
43	cash in lieu of group health coverage because the Employee is
44	unable to certify that he or she has other health coverage, but
45	only if the Employer does not request or collect information
46	regarding the Employee's other health coverage as part of the
47	enrollment for the health plan); 403(b) (tax-sheltered annuity);
48	457 (Section 457 plan); and 132(f)(4) of the Internal Revenue
49	Code of 1986, as amended, and the regulations thereunder (the
50	"Code"). Salaries or Wages shall exclude, but exclusive of other
51	premiums, other than shift premiums, allowances, or special
52	payments, or any casual nonrecurring or unpredictable bonuses;
53	payments for unused accrued bona fide sick, vacation, or other
54	leave; payments received by an Employee pursuant to a
55	nonqualified unfunded deferred salary or wages plan; and
56	severance pay that is paid after an Employee severs employment
57	with the City. However, Salaries or Wages, as defined herein,
58	earned but not paid to the Employee by the Employee's severance
59	date with the City shall be considered Salary or Wages for Plan
60	purposes. In addition to other applicable limitations set forth
61	in the Plan, and notwithstanding any other provision of the Plan
62	to the contrary, for Plan Years beginning on or after January 1,
63	1996, the annual Salaries or Wages of each Employee taken into
64	account under the Plan shall not exceed the annual compensation
65	limit provided for in Section 401(a)(17) of the Code the Omnibus
66	Budget Reconciliation Act of 1993 (the "OBRA 1993 Annual
67	Compensation Limit"). The OBRA 1993 Annual Compensation Limit is
68	$150,000, as adjusted by the Commissioner of the Internal
69	Revenue Service for increases in the cost-of-living in
70	accordance with Section 401(a)(17)(B) of the Internal Revenue
71	Code of 1986, as amended (the "Code"). The cost-of-living
72	adjustment in effect for a calendar year applies to any period,
73	not exceeding 12 months, over which Salaries or Wages are
74	determined (determination period) beginning in such calendar
75	year. If a determination period consists of fewer than 12
76	months, the OBRA 1993 Annual Compensation Limit will be
77	multiplied by a fraction, the numerator of which is the number
78	of months in the determination period, and the denominator of
79	which is 12. For Plan Years beginning on or after January 1,
80	1996, any reference in this Plan to the limitation under Section
81	401(a)(17) of the Code shall mean the OBRA 1993 Annual
82	Compensation Limit set forth in this provision. The limitation
83	on Salaries or Wages for an "eligible Employee" shall not be
84	less than the amount which was allowed to be taken into account
85	hereunder as in effect on July 1, 1993. "Eligible Employee" is
86	an individual who was a participant in the Plan before the first
87	Plan Year beginning after December 31, 1995. Commencing for
88	earnings paid the first pay date after October 1, 2005, all
89	mandatory Employee Contributions to the Fund shall be picked up
90	and paid by the City. Such contributions, although designated as
91	Employee Contributions, shall be paid by the City in lieu of
92	contributions by the Employee. The contributions so assumed
93	shall be treated as tax-deferred Employer "pickup" contributions
94	pursuant to Section 414(h) of the Internal Revenue Code. Members
95	shall not have the option of receiving the contributed amounts
96	directly instead of having such contributions paid by the City
97	to the Fund.
98	(E)  Employee.  For the purposes of this Act, "Employee"
99	shall mean an Employee covered or qualified to be covered under
100	either Division A or Division B of this Plan. An Employee
101	covered by this Plan shall include all Employees, whether full-
102	time full time, part-time, or temporary, who have taken the
103	physical examination required by Section 18. Employees whose
104	Salaries or Wages are paid pursuant to a federal grant-in-aid
105	program are included in this Act only when the federal
106	government pays the employer's contribution. Any individual who
107	is an independent contractor, or who performs services for the
108	City under an agreement that identifies the individual as an
109	independent contractor, is excluded from the Plan even if a
110	governmental agency retroactively reclassifies such individual
111	as an Employee. Casual laborers are excluded from this
112	definition as are employees covered by other City pension plans.
113	(H)  Military Service Time.  For members rehired after
114	leave to provide military service prior to December 12, 1994, in
115	computing Service allowance for retirement, creditable Service
116	shall, at the option of the Employee, include any service which
117	interrupted employment with the Employer, not to exceed a period
118	of 3 years, in any of the armed services of the United States
119	during time of war, upon condition that within 90 days from the
120	date of reinstatement of such Employee now or hereafter serving
121	in the armed forces, or within 90 days from the effective date
122	of this Act for those Employees already reinstated, such
123	Employee shall exercise such option by filing written notice
124	thereof with the Board of Trustees and, if a Division A
125	Employee, shall within the 12 ensuing months pay into the
126	retirement fund an amount equal to the aggregate contributions
127	such Employee would have made had such Employee not served in
128	the armed forces, based upon the Salary or Wages being earned at
129	the time of entering the armed services, and if any such
130	Employee shall fail to exercise such option within the time and
131	in the manner hereinabove prescribed, such period of military
132	service shall not thereafter be allowed as creditable Service,
133	but shall not be deemed a break in such Employee's Continuous
134	Service eligibility period. Members rehired on or after December
135	12, 1994, Notwithstanding the foregoing, an Employee shall be
136	credited with service for purposes of vesting and benefit
137	accrual under the Plan for his or her service in the uniformed
138	service (as defined in the Uniformed Services Employment and
139	Reemployment Rights Act of 1994, known as (the "USERR Act") upon
140	being granted leave by the Employer for such uniformed service
141	and termination from employment as an Employee with the
142	Employer, provided that the Employee must return to his or her
143	employment as an Employee with the Employer within the time
144	periods prescribed by the USERR Act; and must comply the
145	Employee complies with the Employee contribution requirements
146	prescribed by the USERR Act. The maximum service credit for
147	uniformed service shall be 5 years or such other time period as
148	may be prescribed by the USERR Act. Effective as of the dates
149	reflected in the Heroes Earnings Assistance and Relief Tax Act
150	("HEART Act"), the Plan must comply with all applicable
151	provisions of the HEART Act.
152	(P)  Actuarial Equivalent.  The Actuarial Equivalent of an
153	Employee's Accrued Pension shall be determined by basing
154	mortality on the 1983 Group Annuity Mortality Table for Males
155	with female ages set back 6 years and post-disablement mortality
156	upon 80 percent of the 1965 Railroad Board Ultimate Mortality
157	Table, or such other mortality tables as are in compliance with
158	the Code. This subsection does not apply to Plan Limitation
159	Years beginning after December 31, 2008.
160	(S)  Limitation Year.  The limitation year shall be the
161	Plan Year.
162	Section 5.  Contributions.  The Pension Fund shall consist
163	of moneys derived from the following sources:
164	(A)  Employee Contributions.  Division A Employees.
165	Commencing for earnings paid beginning with the first pay date
166	after January 1, 2005, all Employee contributions to the Fund
167	shall be mandatory Employee contributions and shall be picked up
168	and paid by the City on behalf of the member. Such contributions
169	shall be made by Employees in an amount equal to There shall be
170	a contribution of 7 percent of all Salaries or Wages of all
171	Employees participating in this Fund, which shall be deducted
172	from said Salaries or Wages by the Director of Finance, before
173	the same are paid, as long as the Employee continues in the
174	Service of the City of Tampa, regardless of the number of years
175	of Service with the City. Such contributions, although
176	designated as Employee contributions, shall be paid by the City
177	in lieu of contributions by the Employee. The contributions so
178	assumed shall be treated as tax-deferred Employer "pick-up"
179	contributions pursuant to Section 414(h) of the Code. Members
180	shall not have the option of receiving the contributed amounts
181	directly instead of having such contributions paid by the City
182	to the Fund.
183	Section 12.  Death Benefits.
184	(C)  When the designated beneficiary, as defined in Section
185	401(a)(9)(E) of the Code, is not the Employee's spouse
186	(including, without limitation, a child, parent, or sibling),
187	distributions made after December 31, 2006, from Division A and
188	Division B shall be made in accordance with Section 402(c)(11)
189	of the Code, and such designated beneficiary shall have the
190	option to roll over all or a portion of his or her death benefit
191	via a direct trustee-to-trustee transfer to an inherited
192	individual retirement account, as defined in Section
193	408(d)(3)(c) of the Code, provided such distribution meets the
194	definition of an eligible rollover distribution as defined in
195	Section 26 of this Act.
196	Section 14.  Refund of Contributions Contribution.
197	(C)  Refund of Employee contributions shall be paid in
198	accordance with Section 26 of this Act.
199	Section 19.  Construction.  This Act shall be liberally
200	construed in accordance with general law and the federal tax
201	code, and if any part or portion thereof be declared invalid, or
202	the application thereof to any person, circumstance, or thing is
203	declared invalid, the validity of the remainder of this Act
204	shall not be affected thereby.
205	Section 22.  Deferred Retirement Option Program.
206	Notwithstanding any other provisions of this Act, and subject to
207	the provisions of this section, the Deferred Retirement Option
208	Program, hereinafter referred to as the DROP, is an option under
209	which an eligible member may elect, commencing on October 1,
210	1999, to have the member's pension benefits calculated as of a
211	certain date prior to retirement, and accumulate benefits plus
212	the investment return pursuant to this section during the DROP
213	calculation period. Participation in the DROP does not guarantee
214	employment for the DROP calculation period, as defined in this
215	section.
216	D.  Interest and administrative costs. Interest shall
217	accumulate annually at a rate reflecting the Fund's net
218	investment performance, whether positive or negative, during the
219	DROP calculation period, less the cost of administering the
220	DROP, all of which shall be determined by the Board of Trustees.
221	A DROP participant shall have the opportunity to elect, as
222	provided in this subsection, an investment option to be applied
223	to such DROP participant's account for the Plan Year when
224	entering the DROP and for each subsequent Plan Year. In such
225	election, the DROP participant shall choose to have interest
226	accumulate annually, whether positive or negative, at either (i)
227	a rate reflecting the Fund's net investment performance, as
228	determined by the Board of Trustees, or (ii) a rate reflective
229	of a low-risk variable rate selected annually by the Board of
230	Trustees in its sole discretion. Each election must be made at
231	such time, on such forms, and in such manner as the Board of
232	Trustees may determine in its sole discretion. If a DROP
233	participant fails to make a valid election upon entering the
234	DROP, the Fund interest rate shall be applied as provided in (i)
235	herein. If a DROP participant fails to make a valid election in
236	a subsequent Plan Year, the election for the then-current Plan
237	Year shall be applied.
238	Section 24.  Limitations on Amounts of Benefits.
239	(A)  For Plan Years ending after December 31, 2001,
240	benefits for an Employee under this Plan, when expressed as a
241	benefit payable annually in the form of a straight life annuity
242	without regard to the death benefit or any other ancillary
243	benefit, shall not at any time within the limitation year exceed
244	the limits provided under Section 415(b) of the Code $90,000.
245	(B)1.  The $90,000 limitation set forth in subsection (A)
246	shall be actuarially reduced in accordance with regulations
247	prescribed by the Secretary of the Treasury for any retirement
248	benefit that may begin before an Employee attains age 62, by
249	adjusting such benefit so that it is equivalent to such a
250	benefit beginning at age 62. For Plan Years ending before
251	January 1, 2002, and repealed for Plan Years ending thereafter,
252	the reduction shall not reduce the $90,000 limitation set forth
253	in subsection (A) to less than (a) $75,000 if the benefit begins
254	at or after age 55, or (b) if the benefit begins before age 55,
255	the equivalent of the $75,000 limitation for age 55.
256	2.  If any retirement benefit begins after the Employee
257	attains age 65, the $90,000 limitation set forth in subsection
258	(A) shall be adjusted (based upon an interest rate assumption of
259	5 percent) in accordance with regulations prescribed by the
260	Secretary of the Treasury, by adjusting such benefit so that it
261	is equivalent to such benefit beginning at age 65.
262	(D)  In accordance with Section 415(b)(5) of the Code, the
263	$90,000 limitation in subsection (A), and the limitation in
264	subsection (C), shall be multiplied by a fraction (not in excess
265	of 1), the numerator of which is the number of the Employee's
266	years of Service in the Plan (in the case of the $90,000
267	limitation set forth in subsection (A)) or the number of the
268	Employee's years of Service (in the case of the limitation set
269	forth in subsection (C)) and the denominator of which, in either
270	case, is 10.
271	(E)  As of January 1 of each calendar year, the $90,000
272	limitation set forth in subsection (A) shall be adjusted as and
273	if permitted by the Secretary of the Treasury, and any such
274	adjusted limitation shall become effective as the maximum dollar
275	limitation under the Plan for that calendar year. The maximum
276	dollar limitation for a calendar year, as so adjusted, shall
277	apply to limitation years ending with or within such calendar
278	year.
279	(F)  The following is repealed for Plan Limitation Years
280	beginning after December 31, 1999:
281	1.  In the event that any Employee participates in both a
282	defined benefit plan and a defined contribution plan maintained
283	by the City, then the sum of the Defined Benefit Plan Fraction
284	(as defined in Section 415(e) of the Code) and the Defined
285	Contribution Plan Fraction (as defined in Section 415(e) of the
286	Code) for any limitation year shall not exceed 1.0.
287	2.  In the event that the sum of the Defined Benefit Plan
288	Fraction and the Defined Contribution Plan Fraction exceeds 1.0,
289	then the Board of Trustees shall take such actions, applied in a
290	uniform and nondiscriminatory manner, as will keep the benefits
291	and annual additions thereto for such Employees from exceeding
292	these limits.  Adjustments shall be made to this Plan before any
293	adjustments shall be required to any other plans.
294	Section 25.  Latest Date of Commencement of Benefits
295	Required Distributions.  The distribution of a member's benefit
296	shall be made in accordance with the following requirements, and
297	shall otherwise comply with Section 401(a)(9) of the Code and
298	the regulations thereunder, as prescribed by the Commissioner in
299	Revenue Rulings, Notices, and other guidance published in the
300	Internal Revenue Bulletin, to the extent that said provisions
301	apply to governmental plans under Section 414(d) of the Code.
302	The distribution provisions of Section 401(a)(9) of the Code
303	shall override any distribution options in the Plan inconsistent
304	with Section 401(a)(9) of the Code:
305	(A)  Any benefit paid to a member an Employee shall
306	commence not later than the last to occur of:
307	1.  April 1 of the year following the calendar year in
308	which the member Employee retires; or
309	2.  April 1 of the year immediately following the calendar
310	year in which the member Employee reaches age 70 1/2.
311	(B)  Distributions of members' benefits will be made in
312	accordance with Sections 1.401(a)(9)-2. through 1.401(a)(9)-9.
313	of the Code and such other rules thereunder as may be prescribed
314	by the Secretary of the Treasury, to the extent that said
315	provisions apply to governmental plans under Section 414(d) of
316	the Code.
317	(B)  In the case of a benefit payable by reason of an
318	Employee's retirement or other termination of employment, in no
319	event shall payment extend beyond the life or life expectancy of
320	the Employee or the joint lives or life expectancies of the
321	Employee and the Employee's designated beneficiary. In the case
322	of an Employee who is receiving his or her pension benefit as of
323	the date of his or her death, the survivor portion of the
324	Employee's pension benefit shall be paid at least as rapidly as
325	under the method being used prior to the Employee's death.
326	(C)  Notwithstanding anything contained herein to the
327	contrary, payments under the Plan to a Beneficiary due to a
328	member's death shall satisfy the incidental death benefit
329	requirements and all other applicable provisions of Section
330	401(a)(9)(G) of the Code, the regulations issued thereunder
331	(including Section 1.401(a)(9)-2 of the proposed Treasury
332	regulations), and such other rules thereunder as may be
333	prescribed by the Secretary of the Treasury, including IRS
334	Notice 2007-7, to the extent that said provisions apply to
335	governmental plans under Section 414(d) of the Code.
336	Section 26.  Direct Rollovers.
337	(A)  This section applies to distributions made on or after
338	January 1, 1993. Notwithstanding any provision of the Plan to
339	the contrary that would otherwise limit a distributee's (as
340	defined below) election under this section, a distributee may
341	elect, at the time and in the manner prescribed by the
342	Commissioner of the Internal Revenue Service, to have any
343	portion of an eligible rollover distribution (as defined below)
344	paid directly to an eligible retirement rollover plan (as
345	defined below) specified by the distributee in a direct rollover
346	(as defined below). If a member fails to elect a distribution
347	option as provided under Sections 14 and 22 of this Act, then
348	such member's benefit shall be rolled over to an individual
349	retirement account designated by the Board of Trustees, as
350	defined in Section 6.
351	(B)  For purposes of this section, the following terms
352	shall have the following meanings:
353	1.  An "eligible rollover distribution" is any distribution
354	of all or any portion of the balance to the credit of the
355	distributee, except that an eligible rollover distribution does
356	not include: any distribution that is one of a series of
357	substantially equal periodic payments (not less frequently than
358	annually) made for the life (or life expectancy) of the
359	distributee or the joint lives (or joint life expectancies) of
360	the distributee and the distributee's designated beneficiary, or
361	for a specified period of 10 years or more; any distribution to
362	the extent such distribution is required under Section 401(a)(9)
363	of the Code;, and the portion of any distribution that is not
364	includable in gross income (determined without regard to the
365	exclusion for net unrealized appreciation with respect to
366	employer securities). Notwithstanding the above, a portion of a
367	distribution shall not fail to be an "eligible rollover
368	distribution" merely because the portion consists of after-tax
369	voluntary Employee contributions that are not includable in
370	gross income. However, such portion may be transferred only to
371	an individual retirement account or annuity described in Section
372	408(a) or (b) of the Code or to a qualified defined contribution
373	plan described in Section 401(a) or 403(a) of the Code that
374	agrees to separately account for amounts transferred, including
375	separately accounting for the portion of such distribution that
376	is includable in gross income and the portion of such
377	distribution that is not so includable.
378	2.  An "eligible retirement rollover plan" is an individual
379	retirement account described in Section 408(a) of the Code, an
380	individual retirement annuity described in Section 408(b) of the
381	Code, other than an endowment contract; an annuity plan
382	described in Section 403(a) of the Code, or a qualified trust
383	(an employees' trust) described in Section 401(a) of the Code
384	that is exempt from tax under Section 501(a) of the Code; an
385	annuity plan described in Section 403(a) of the Code; an
386	eligible plan under Section 457(b) of the Code that is
387	maintained by a state, a political subdivision of a state, or
388	any agency or instrumentality of a state or political
389	subdivision and that agrees to separately account for amounts
390	transferred into such plan from this Plan; or an annuity
391	contract described in Section 403(b) of the Code that accepts
392	the distributee's eligible rollover distribution. However, in
393	the case of an eligible rollover distribution to the surviving
394	spouse, an eligible retirement rollover plan is an individual
395	retirement account or individual retirement annuity.
396	3.  A "distributee" includes the member or former member an
397	Employee or former employee. In addition, the member's
398	Employee's or former member's employee's surviving spouse and
399	the member's Employee's or former member's employee's spouse or
400	former spouse who is the alternate payee under a qualified
401	domestic relations order, as defined in Section 414(p) of the
402	Code, are distributees with regard to the interest of the spouse
403	or former spouse.
404	4.  A "direct rollover" is a payment by the Plan to the
405	eligible retirement plan specified by the distributee.
406	Section 2.  This act shall take effect October 1, 2010.

CODING: Words stricken are deletions; words underlined are additions.