Florida Senate - 2010 (NP) SB 2766
By Senator Joyner
18-02265-10 20102766__
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; revising the General Employees’ Pension
5 Plan for the City of Tampa; revising the definitions
6 of the terms “Salaries or Wages,” “Employee,” and
7 “Military Service Time”; revising application of the
8 term “Actuarial Equivalent”; defining the term
9 “Limitation Year”; providing that all employee
10 contributions to the pension fund after a certain date
11 are mandatory and that the city shall pay such
12 contributions to the fund on behalf of the employee;
13 providing certain beneficiaries an option to roll over
14 certain death benefits; providing for a refund of
15 employee contributions; revising construction of the
16 act; allowing DROP members the opportunity to elect an
17 investment option, as determined by the board of
18 trustees, to be applied to the participant’s account
19 for the plan year entering the DROP program and for
20 each subsequent plan year; revising benefit
21 limitations; revising requirements for distribution of
22 benefits; providing a default distribution when a
23 member fails to elect a distribution option; revising
24 direct rollover options; revising the definitions of
25 the terms “eligible rollover distribution,” “eligible
26 rollover plan,” and “distributee”; providing an
27 effective date.
28
29 Be It Enacted by the Legislature of the State of Florida:
30
31 Section 1. Subsections (A), (E), (H), and (P) of section 4,
32 subsection (A) of section 5, section 19, subsection (D) of
33 section 22, subsections (A), (B), (D), (E), and (F) of section
34 24, and sections 25 and 26 of chapter 23559, Laws of Florida,
35 1945, as amended, are amended, and subsection (S) is added to
36 section 4, subsection (C) is added to section 12, and subsection
37 (C) is added to section 14 of that chapter, to read:
38 Section 4. Definitions.
39 (A) Salaries or Wages. Salaries or Wages for the purpose of
40 this Act shall be the base amounts earned by the Employee, plus
41 regular longevity bonuses, overtime, and shift premiums. Salary
42 or Wages shall also include elective amounts that are excludible
43 from the Employee’s gross income under Sections 125 (including
44 amounts that are not available to the Employee in cash in lieu
45 of group health coverage because the Employee is unable to
46 certify that he or she has other health coverage, but only if
47 the Employer does not request or collect information regarding
48 the Employee’s other health coverage as part of the enrollment
49 for the health plan); 403(b) (tax-sheltered annuity); 457
50 (Section 457 plan); and 132(f)(4) of the Internal Revenue Code
51 of 1986, as amended, and the regulations thereunder (the
52 “Code”). Salaries or Wages shall exclude, but exclusive of other
53 premiums, other than shift premiums, allowances, or special
54 payments, or any casual nonrecurring or unpredictable bonuses;
55 payments for unused accrued bona fide sick, vacation, or other
56 leave; payments received by an Employee pursuant to a
57 nonqualified unfunded deferred salary or wages plan; and
58 severance pay that is paid after an Employee severs employment
59 with the City. However, Salaries or Wages, as defined herein,
60 earned but not paid to the Employee by the Employee’s severance
61 date with the City shall be considered Salary or Wages for Plan
62 purposes. In addition to other applicable limitations set forth
63 in the Plan, and notwithstanding any other provision of the Plan
64 to the contrary, for Plan Years beginning on or after January 1,
65 1996, the annual Salaries or Wages of each Employee taken into
66 account under the Plan shall not exceed the annual compensation
67 limit provided for in Section 401(a)(17) of the Code the Omnibus
68 Budget Reconciliation Act of 1993 (the “OBRA 1993 Annual
69 Compensation Limit”). The OBRA 1993 Annual Compensation Limit is
70 $150,000, as adjusted by the Commissioner of the Internal
71 Revenue Service for increases in the cost-of-living in
72 accordance with Section 401(a)(17)(B) of the Internal Revenue
73 Code of 1986, as amended (the “Code”). The cost-of-living
74 adjustment in effect for a calendar year applies to any period,
75 not exceeding 12 months, over which Salaries or Wages are
76 determined (determination period) beginning in such calendar
77 year. If a determination period consists of fewer than 12
78 months, the OBRA 1993 Annual Compensation Limit will be
79 multiplied by a fraction, the numerator of which is the number
80 of months in the determination period, and the denominator of
81 which is 12. For Plan Years beginning on or after January 1,
82 1996, any reference in this Plan to the limitation under Section
83 401(a)(17) of the Code shall mean the OBRA 1993 Annual
84 Compensation Limit set forth in this provision. The limitation
85 on Salaries or Wages for an “eligible Employee” shall not be
86 less than the amount which was allowed to be taken into account
87 hereunder as in effect on July 1, 1993. “Eligible Employee” is
88 an individual who was a participant in the Plan before the first
89 Plan Year beginning after December 31, 1995. Commencing for
90 earnings paid the first pay date after October 1, 2005, all
91 mandatory Employee Contributions to the Fund shall be picked up
92 and paid by the City. Such contributions, although designated as
93 Employee Contributions, shall be paid by the City in lieu of
94 contributions by the Employee. The contributions so assumed
95 shall be treated as tax-deferred Employer “pickup” contributions
96 pursuant to Section 414(h) of the Internal Revenue Code. Members
97 shall not have the option of receiving the contributed amounts
98 directly instead of having such contributions paid by the City
99 to the Fund.
100 (E) Employee. For the purposes of this Act, “Employee”
101 shall mean an Employee covered or qualified to be covered under
102 either Division A or Division B of this Plan. An Employee
103 covered by this Plan shall include all Employees, whether full
104 time full time, part-time, or temporary, who have taken the
105 physical examination required by Section 18. Employees whose
106 Salaries or Wages are paid pursuant to a federal grant-in-aid
107 program are included in this Act only when the federal
108 government pays the employer’s contribution. Any individual who
109 is an independent contractor, or who performs services for the
110 City under an agreement that identifies the individual as an
111 independent contractor, is excluded from the Plan even if a
112 governmental agency retroactively reclassifies such individual
113 as an Employee. Casual laborers are excluded from this
114 definition as are employees covered by other City pension plans.
115 (H) Military Service Time. For members rehired after leave
116 to provide military service prior to December 12, 1994, in
117 computing Service allowance for retirement, creditable Service
118 shall, at the option of the Employee, include any service which
119 interrupted employment with the Employer, not to exceed a period
120 of 3 years, in any of the armed services of the United States
121 during time of war, upon condition that within 90 days from the
122 date of reinstatement of such Employee now or hereafter serving
123 in the armed forces, or within 90 days from the effective date
124 of this Act for those Employees already reinstated, such
125 Employee shall exercise such option by filing written notice
126 thereof with the Board of Trustees and, if a Division A
127 Employee, shall within the 12 ensuing months pay into the
128 retirement fund an amount equal to the aggregate contributions
129 such Employee would have made had such Employee not served in
130 the armed forces, based upon the Salary or Wages being earned at
131 the time of entering the armed services, and if any such
132 Employee shall fail to exercise such option within the time and
133 in the manner hereinabove prescribed, such period of military
134 service shall not thereafter be allowed as creditable Service,
135 but shall not be deemed a break in such Employee’s Continuous
136 Service eligibility period. Members rehired on or after December
137 12, 1994, Notwithstanding the foregoing, an Employee shall be
138 credited with service for purposes of vesting and benefit
139 accrual under the Plan for his or her service in the uniformed
140 service (as defined in the Uniformed Services Employment and
141 Reemployment Rights Act of 1994, known as (the “USERR Act”) upon
142 being granted leave by the Employer for such uniformed service
143 and termination from employment as an Employee with the
144 Employer, provided that the Employee must return to his or her
145 employment as an Employee with the Employer within the time
146 periods prescribed by the USERR Act; and must comply the
147 Employee complies with the Employee contribution requirements
148 prescribed by the USERR Act. The maximum service credit for
149 uniformed service shall be 5 years or such other time period as
150 may be prescribed by the USERR Act. Effective as of the dates
151 reflected in the Heroes Earnings Assistance and Relief Tax Act
152 (”HEART Act”), the Plan must comply with all applicable
153 provisions of the HEART Act.
154 (P) Actuarial Equivalent. The Actuarial Equivalent of an
155 Employee’s Accrued Pension shall be determined by basing
156 mortality on the 1983 Group Annuity Mortality Table for Males
157 with female ages set back 6 years and post-disablement mortality
158 upon 80 percent of the 1965 Railroad Board Ultimate Mortality
159 Table, or such other mortality tables as are in compliance with
160 the Code. This subsection does not apply to Plan Limitation
161 Years beginning after December 31, 2008.
162 (S) Limitation Year. The limitation year shall be the Plan
163 Year.
164 Section 5. Contributions. The Pension Fund shall consist of
165 moneys derived from the following sources:
166 (A) Employee Contributions. Division A Employees.
167 Commencing for earnings paid beginning with the first pay date
168 after January 1, 2005, all Employee contributions to the Fund
169 shall be mandatory Employee contributions and shall be picked up
170 and paid by the City on behalf of the member. Such contributions
171 shall be made by Employees in an amount equal to There shall be
172 a contribution of 7 percent of all Salaries or Wages of all
173 Employees participating in this Fund, which shall be deducted
174 from said Salaries or Wages by the Director of Finance, before
175 the same are paid, as long as the Employee continues in the
176 Service of the City of Tampa, regardless of the number of years
177 of Service with the City. Such contributions, although
178 designated as Employee contributions, shall be paid by the City
179 in lieu of contributions by the Employee. The contributions so
180 assumed shall be treated as tax-deferred Employer “pick-up”
181 contributions pursuant to Section 414(h) of the Code. Members
182 shall not have the option of receiving the contributed amounts
183 directly instead of having such contributions paid by the City
184 to the Fund.
185 Section 12. Death Benefits.
186 (C) When the designated beneficiary, as defined in Section
187 401(a)(9)(E) of the Code, is not the Employee’s spouse
188 (including, without limitation, a child, parent, or sibling),
189 distributions made after December 31, 2006, from Division A and
190 Division B shall be made in accordance with Section 402(c)(11)
191 of the Code, and such designated beneficiary shall have the
192 option to roll over all or a portion of his or her death benefit
193 via a direct trustee-to-trustee transfer to an inherited
194 individual retirement account, as defined in Section
195 408(d)(3)(c) of the Code, provided such distribution meets the
196 definition of an eligible rollover distribution as defined in
197 Section 26 of this Act.
198 Section 14. Refund of Contributions Contribution.
199 (C) Refund of Employee contributions shall be paid in
200 accordance with Section 26 of this Act.
201 Section 19. Construction. This Act shall be liberally
202 construed in accordance with general law and the federal tax
203 code, and if any part or portion thereof be declared invalid, or
204 the application thereof to any person, circumstance, or thing is
205 declared invalid, the validity of the remainder of this Act
206 shall not be affected thereby.
207 Section 22. Deferred Retirement Option Program.
208 Notwithstanding any other provisions of this Act, and subject to
209 the provisions of this section, the Deferred Retirement Option
210 Program, hereinafter referred to as the DROP, is an option under
211 which an eligible member may elect, commencing on October 1,
212 1999, to have the member’s pension benefits calculated as of a
213 certain date prior to retirement, and accumulate benefits plus
214 the investment return pursuant to this section during the DROP
215 calculation period. Participation in the DROP does not guarantee
216 employment for the DROP calculation period, as defined in this
217 section.
218 D. Interest and administrative costs. Interest shall
219 accumulate annually at a rate reflecting the Fund’s net
220 investment performance, whether positive or negative, during the
221 DROP calculation period, less the cost of administering the
222 DROP, all of which shall be determined by the Board of Trustees.
223 A DROP participant shall have the opportunity to elect, as
224 provided in this subsection, an investment option to be applied
225 to such DROP participant’s account for the Plan Year when
226 entering the DROP and for each subsequent Plan Year. In such
227 election, the DROP participant shall choose to have interest
228 accumulate annually, whether positive or negative, at either (i)
229 a rate reflecting the Fund’s net investment performance, as
230 determined by the Board of Trustees, or (ii) a rate reflective
231 of a low-risk variable rate selected annually by the Board of
232 Trustees in its sole discretion. Each election must be made at
233 such time, on such forms, and in such manner as the Board of
234 Trustees may determine in its sole discretion. If a DROP
235 participant fails to make a valid election upon entering the
236 DROP, the Fund interest rate shall be applied as provided in (i)
237 herein. If a DROP participant fails to make a valid election in
238 a subsequent Plan Year, the election for the then-current Plan
239 Year shall be applied.
240 Section 24. Limitations on Amounts of Benefits.
241 (A) For Plan Years ending after December 31, 2001, benefits
242 for an Employee under this Plan, when expressed as a benefit
243 payable annually in the form of a straight life annuity without
244 regard to the death benefit or any other ancillary benefit,
245 shall not at any time within the limitation year exceed the
246 limits provided under Section 415(b) of the Code $90,000.
247 (B)1. The $90,000 limitation set forth in subsection (A)
248 shall be actuarially reduced in accordance with regulations
249 prescribed by the Secretary of the Treasury for any retirement
250 benefit that may begin before an Employee attains age 62, by
251 adjusting such benefit so that it is equivalent to such a
252 benefit beginning at age 62. For Plan Years ending before
253 January 1, 2002, and repealed for Plan Years ending thereafter,
254 the reduction shall not reduce the $90,000 limitation set forth
255 in subsection (A) to less than (a) $75,000 if the benefit begins
256 at or after age 55, or (b) if the benefit begins before age 55,
257 the equivalent of the $75,000 limitation for age 55.
258 2. If any retirement benefit begins after the Employee
259 attains age 65, the $90,000 limitation set forth in subsection
260 (A) shall be adjusted (based upon an interest rate assumption of
261 5 percent) in accordance with regulations prescribed by the
262 Secretary of the Treasury, by adjusting such benefit so that it
263 is equivalent to such benefit beginning at age 65.
264 (D) In accordance with Section 415(b)(5) of the Code, the
265 $90,000 limitation in subsection (A), and the limitation in
266 subsection (C), shall be multiplied by a fraction (not in excess
267 of 1), the numerator of which is the number of the Employee’s
268 years of Service in the Plan (in the case of the $90,000
269 limitation set forth in subsection (A)) or the number of the
270 Employee’s years of Service (in the case of the limitation set
271 forth in subsection (C)) and the denominator of which, in either
272 case, is 10.
273 (E) As of January 1 of each calendar year, the $90,000
274 limitation set forth in subsection (A) shall be adjusted as and
275 if permitted by the Secretary of the Treasury, and any such
276 adjusted limitation shall become effective as the maximum dollar
277 limitation under the Plan for that calendar year. The maximum
278 dollar limitation for a calendar year, as so adjusted, shall
279 apply to limitation years ending with or within such calendar
280 year.
281 (F) The following is repealed for Plan Limitation Years
282 beginning after December 31, 1999:
283 1. In the event that any Employee participates in both a
284 defined benefit plan and a defined contribution plan maintained
285 by the City, then the sum of the Defined Benefit Plan Fraction
286 (as defined in Section 415(e) of the Code) and the Defined
287 Contribution Plan Fraction (as defined in Section 415(e) of the
288 Code) for any limitation year shall not exceed 1.0.
289 2. In the event that the sum of the Defined Benefit Plan
290 Fraction and the Defined Contribution Plan Fraction exceeds 1.0,
291 then the Board of Trustees shall take such actions, applied in a
292 uniform and nondiscriminatory manner, as will keep the benefits
293 and annual additions thereto for such Employees from exceeding
294 these limits. Adjustments shall be made to this Plan before any
295 adjustments shall be required to any other plans.
296 Section 25. Latest Date of Commencement of Benefits
297 Required Distributions. The distribution of a member’s benefit
298 shall be made in accordance with the following requirements, and
299 shall otherwise comply with Section 401(a)(9) of the Code and
300 the regulations thereunder, as prescribed by the Commissioner in
301 Revenue Rulings, Notices, and other guidance published in the
302 Internal Revenue Bulletin, to the extent that said provisions
303 apply to governmental plans under Section 414(d) of the Code.
304 The distribution provisions of Section 401(a)(9) of the Code
305 shall override any distribution options in the Plan inconsistent
306 with Section 401(a)(9) of the Code:
307 (A) Any benefit paid to a member an Employee shall commence
308 not later than the last to occur of:
309 1. April 1 of the year following the calendar year in which
310 the member Employee retires; or
311 2. April 1 of the year immediately following the calendar
312 year in which the member Employee reaches age 70 1/2.
313 (B) Distributions of members’ benefits will be made in
314 accordance with Sections 1.401(a)(9)-2. through 1.401(a)(9)-9.
315 of the Code and such other rules thereunder as may be prescribed
316 by the Secretary of the Treasury, to the extent that said
317 provisions apply to governmental plans under Section 414(d) of
318 the Code.
319 (B) In the case of a benefit payable by reason of an
320 Employee’s retirement or other termination of employment, in no
321 event shall payment extend beyond the life or life expectancy of
322 the Employee or the joint lives or life expectancies of the
323 Employee and the Employee’s designated beneficiary. In the case
324 of an Employee who is receiving his or her pension benefit as of
325 the date of his or her death, the survivor portion of the
326 Employee’s pension benefit shall be paid at least as rapidly as
327 under the method being used prior to the Employee’s death.
328 (C) Notwithstanding anything contained herein to the
329 contrary, payments under the Plan to a Beneficiary due to a
330 member’s death shall satisfy the incidental death benefit
331 requirements and all other applicable provisions of Section
332 401(a)(9)(G) of the Code, the regulations issued thereunder
333 (including Section 1.401(a)(9)-2 of the proposed Treasury
334 regulations), and such other rules thereunder as may be
335 prescribed by the Secretary of the Treasury, including IRS
336 Notice 2007-7, to the extent that said provisions apply to
337 governmental plans under Section 414(d) of the Code.
338 Section 26. Direct Rollovers.
339 (A) This section applies to distributions made on or after
340 January 1, 1993. Notwithstanding any provision of the Plan to
341 the contrary that would otherwise limit a distributee’s (as
342 defined below) election under this section, a distributee may
343 elect, at the time and in the manner prescribed by the
344 Commissioner of the Internal Revenue Service, to have any
345 portion of an eligible rollover distribution (as defined below)
346 paid directly to an eligible retirement rollover plan (as
347 defined below) specified by the distributee in a direct rollover
348 (as defined below). If a member fails to elect a distribution
349 option as provided under Sections 14 and 22 of this Act, then
350 such member’s benefit shall be rolled over to an individual
351 retirement account designated by the Board of Trustees, as
352 defined in Section 6.
353 (B) For purposes of this section, the following terms shall
354 have the following meanings:
355 1. An “eligible rollover distribution” is any distribution
356 of all or any portion of the balance to the credit of the
357 distributee, except that an eligible rollover distribution does
358 not include: any distribution that is one of a series of
359 substantially equal periodic payments (not less frequently than
360 annually) made for the life (or life expectancy) of the
361 distributee or the joint lives (or joint life expectancies) of
362 the distributee and the distributee’s designated beneficiary, or
363 for a specified period of 10 years or more; any distribution to
364 the extent such distribution is required under Section 401(a)(9)
365 of the Code;, and the portion of any distribution that is not
366 includable in gross income (determined without regard to the
367 exclusion for net unrealized appreciation with respect to
368 employer securities). Notwithstanding the above, a portion of a
369 distribution shall not fail to be an “eligible rollover
370 distribution” merely because the portion consists of after-tax
371 voluntary Employee contributions that are not includable in
372 gross income. However, such portion may be transferred only to
373 an individual retirement account or annuity described in Section
374 408(a) or (b) of the Code or to a qualified defined contribution
375 plan described in Section 401(a) or 403(a) of the Code that
376 agrees to separately account for amounts transferred, including
377 separately accounting for the portion of such distribution that
378 is includable in gross income and the portion of such
379 distribution that is not so includable.
380 2. An “eligible retirement rollover plan” is an individual
381 retirement account described in Section 408(a) of the Code, an
382 individual retirement annuity described in Section 408(b) of the
383 Code, other than an endowment contract; an annuity plan
384 described in Section 403(a) of the Code, or a qualified trust
385 (an employees’ trust) described in Section 401(a) of the Code
386 that is exempt from tax under Section 501(a) of the Code; an
387 annuity plan described in Section 403(a) of the Code; an
388 eligible plan under Section 457(b) of the Code that is
389 maintained by a state, a political subdivision of a state, or
390 any agency or instrumentality of a state or political
391 subdivision and that agrees to separately account for amounts
392 transferred into such plan from this Plan; or an annuity
393 contract described in Section 403(b) of the Code that accepts
394 the distributee’s eligible rollover distribution. However, in
395 the case of an eligible rollover distribution to the surviving
396 spouse, an eligible retirement rollover plan is an individual
397 retirement account or individual retirement annuity.
398 3. A “distributee” includes the member or former member an
399 Employee or former employee. In addition, the member’s
400 Employee’s or former member’s employee’s surviving spouse and
401 the member’s Employee’s or former member’s employee’s spouse or
402 former spouse who is the alternate payee under a qualified
403 domestic relations order, as defined in Section 414(p) of the
404 Code, are distributees with regard to the interest of the spouse
405 or former spouse.
406 4. A “direct rollover” is a payment by the Plan to the
407 eligible retirement plan specified by the distributee.
408 Section 2. This act shall take effect October 1, 2010.