HomeMy WebLinkAboutAgenda Police Pension 012915 Agenda
City of Palm Beach Gardens Police Officers’
Pension Fund
MEETING OF JANUARY 29, 2015
LOCATION: City Council Chambers’
10500 North Military Trail
Palm Beach Gardens, FL 33410
TIME: 9 AM
1. Call Meeting To Order
2. Roll Call:
• Jay Spencer, Chairman
• David Pierson, Secretary
• Brad Seidensticker, Trustee
• Greg Mull, Trustee
• Marc Glass, Trustee
3. Investment Manger Report – ICC Capital (Steve Stack)
• ICC Letter Regarding Firm Update
4. Investment Consultant Report – Thistle Assets (John McCann)
5. Attorney Report – KKJ&L (Bonni Jensen)
• Legislative Updates: Memo regarding SB 172 & SB 242
• New Special Tax Notice regarding Rollovers
• Memorandum on the IRS Mileage Rate for 2015
• Memorandum on DROP Plans and IRS Review
• Sue Marden -- Rebuttal of Leroy Collins Report
6. Administrator Report – Resource Centers (Audrey Ross)
• Discussion Regarding Vested Deferred Members and Plan Changes
• Ratification of the 2015 Fiduciary Insurance Renewal
• Schedule Remaining 2015 Meeting Dates
7. Approval of Minutes
• October 27, 2014 Regular Meeting
8. Disbursements
9. Benefit Approvals
10. Financial Statements
11. Other Business
12. Public Comments
13. Adjourn
Next Meeting Date:
To be determined…
PLEASE NOTE:
Should any interested party seek to appeal any decision of this Board with respect to any matter considered at such meeting or hearing, s/he
will need a record of the proceedings and for such purpose may need to ensure that a verbatim record of the proceedings is made, which
record includes the testimony and evidence upon which the appeal is to be based.
In accordance with the Americans With Disabilities Act of 1990, persons needing a special accommodation to participate in this meeting
should contact the The Pension Resource Center, LLC no later than four days prior to the meeting.
Part III - Administrative, Procedural, and Miscellaneous
2015 Standard Mileage Rates
Notice 2014-79
SECTION 1. PURPOSE
This notice provides the optional 2015 standard mileage rates for taxpayers to
use in computing the deductible costs of operating an automobile for business,
charitable, medical, or moving expense purposes. This notice also provides the amount
taxpayers must use in calculating reductions to basis for depreciation taken under the
business standard mileage rate, and the maximum standard automobile cost that may
be used in computing the allowance under a fixed and variable rate (FAVR) plan.
SECTION 2. BACKGROUND
Rev. Proc. 2010-51, 2010-51 I.R.B. 883, provides rules for computing the
deductible costs of operating an automobile for business, charitable, medical, or moving
expense purposes, and for substantiating, under § 274(d) of the Internal Revenue Code
and § 1.274-5 of the Income Tax Regulations, the amount of ordinary and necessary
business expenses of local transportation or travel away from home. Taxpayers using
the standard mileage rates must comply with Rev. Proc. 2010-51. However, a taxpayer
is not required to use the substantiation methods described in Rev. Proc. 2010-51, but
- 2 -
instead may substantiate using actual allowable expense amounts if the taxpayer
maintains adequate records or other sufficient evidence.
An independent contractor conducts an annual study for the Internal Revenue
Service of the fixed and variable costs of operating an automobile to determine the
standard mileage rates for business, medical, and moving use reflected in this notice.
The standard mileage rate for charitable use is set by § 170(i).
SECTION 3. STANDARD MILEAGE RATES
The standard mileage rate for transportation or travel expenses is 57.5 cents per
mile for all miles of business use (business standard mileage rate). See section 4 of
Rev. Proc. 2010-51.
The standard mileage rate is 14 cents per mile for use of an automobile in
rendering gratuitous services to a charitable organization under § 170. See section 5 of
Rev. Proc. 2010-51.
The standard mileage rate is 23 cents per mile for use of an automobile (1) for
medical care described in § 213, or (2) as part of a move for which the expenses are
deductible under § 217. See section 5 of Rev. Proc. 2010-51.
SECTION 4. BASIS REDUCTION AMOUNT
For automobiles a taxpayer uses for business purposes, the portion of the
business standard mileage rate treated as depreciation is 22 cents per mile for 2011, 23
cents per mile for 2012, 23 cents per mile for 2013, 22 cents per mile for 2014, and 24
cents for 2015. See section 4.04 of Rev. Proc. 2010-51.
SECTION 5. MAXIMUM STANDARD AUTOMOBILE COST
- 3 -
For purposes of computing the allowance under a FAVR plan, the standard
automobile cost may not exceed $28,200 for automobiles (excluding trucks and vans) or
$30,800 for trucks and vans. See section 6.02(6) of Rev. Proc. 2010-51.
SECTION 6. EFFECTIVE DATE
This notice is effective for (1) deductible transportation expenses paid or incurred
on or after January 1, 2015, and (2) mileage allowances or reimbursements paid to an
employee or to a charitable volunteer (a) on or after January 1, 2015, and (b) for
transportation expenses the employee or charitable volunteer pays or incurs on or after
January 1, 2015.
SECTION 7. EFFECT ON OTHER DOCUMENTS
Notice 2013-80 is superseded.
DRAFTING INFORMATION
The principal author of this notice is Bernard P. Harvey of the Office of Associate
Chief Counsel (Income Tax and Accounting). For further information on this notice
contact Bernard P. Harvey on (202) 317-7005 (not a toll-free call).
Page 1 of 10
YOUR ROLLOVER OPTIONS
You are receiving this notice because all or a portion of a payment you are receiving from
the Palm Beach Gardens Police Officers’ Pension Fund (the "Plan") is eligible to be rolled
over to an IRA or an employer plan. This notice is intended to help you decide whether to
do such a rollover.
This notice describes the rollover rules that apply to payments from the Plan that are not
from a designated Roth account (a type of account with special tax rules in some employer
plans). If you also receive a payment from a designated Roth account in the Plan, you will
be provided a different notice for that payment, and the Plan administrator or the payor will
tell you the amount that is being paid from each account.
Rules that apply to most payments from a plan are described in the "General Information
About Rollovers" section. Special rules that only apply in certain circumstances are
described in the "Special Rules and Options" section.
GENERAL INFORMATION ABOUT ROLLOVERS
How can a rollover affect my taxes?
You will be taxed on a payment from the Plan if you do not roll it over. If you are under age
59½ and do not do a rollover, you will also have to pay a 10% additional income tax on
early distributions (unless an exception applies). However, if you do a rollover, you will not
have to pay tax until you receive payments later and the 10% additional income tax will not
apply if those payments are made after you are age 59½ (or if an exception applies).
Where may I roll over the payment?
You may roll over the payment to either an IRA (an individual retirement account or
individual retirement annuity) or an employer plan (a tax-qualified plan, section 403(b) plan,
or governmental section 457(b) plan) that will accept the rollover. The rules of the IRA or
employer plan that holds the rollover will determine your investment options, fees, and
PALM BEACH GARDENS POLICE OFFICERS’
PENSION FUND
SPECIAL TAX NOTICE
Page 2 of 10
rights to payment from the IRA or employer plan (for example, no spousal consent rules
apply to IRAs and IRAs may not provide loans). Further, the amount rolled over will
become subject to the tax rules that apply to the IRA or employer plan.
How do I do a rollover?
There are two ways to do a rollover. You can do either a direct rollover or a 60-day rollover.
If you do a direct rollover, the Plan will make the payment directly to your IRA or an
employer plan. You should contact the IRA sponsor or the administrator of the employer
plan for information on how to do a direct rollover.
If you do not do a direct rollover, you may still do a rollover by making a deposit into an IRA
or eligible employer plan that will accept it. You will have 60 days after you receive the
payment to make the deposit. If you do not do a direct rollover, the Plan is required to
withhold 20% of the payment for federal income taxes (up to the amount of cash and
property received other than employer stock). This means that, in order to roll over the
entire payment in a 60-day rollover, you must use other funds to make up for the 20%
withheld. If you do not roll over the entire amount of the payment, the portion not rolled
over will be taxed and will be subject to the 10% additional income tax on early distributions
if you are under age 59½ (unless an exception applies).
How much may I roll over?
If you wish to do a rollover, you may roll over all or part of the amount eligible for rollover.
Any payment from the Plan is eligible for rollover, except:
•Certain payments spread over a period of at least 10 years or over your life
or life expectancy (or the lives or joint life expectancy of you and your
beneficiary)
Required minimum distributions after age 70½ (or after death)•
Hardship distributions•
ESOP dividends•
Corrective distributions of contributions that exceed tax law limitations•
Loans treated as deemed distributions (for example, loans in default due to•
missed payments before your employment ends)
Cost of life insurance paid by the Plan•
Payments of certain automatic enrollment contributions requested to be•
withdrawn within 90 days of the first contribution
•Amounts treated as distributed because of a prohibited allocation of S
corporation stock under an ESOP (also, there will generally be adverse tax
consequences if you roll over a distribution of S corporation stock to an IRA).
The Plan administrator or the payor can tell you what portion of a payment is eligible for
Page 3 of 10
rollover.
If I don't do a rollover, will I have to pay the 10% additional income tax on early
distributions?
If you are under age 59½, you will have to pay the 10% additional income tax on early
distributions for any payment from the Plan (including amounts withheld for income tax)
that you do not roll over, unless one of the exceptions listed below applies. This tax is in
addition to the regular income tax on the payment not rolled over.
The 10% additional income tax does not apply to the following payments from the Plan:
•Payments made after you separate from service if you will be at least age 55
in the year of the separation
Payments that start after you separate from service if paid at least annually•
in equal or close to equal amounts over your life or life expectancy (or the
lives or joint life expectancy of you and your beneficiary)
Payments from a governmental defined benefit pension plan made after you•
separate from service if you are a public safety employee and you are at
least age 50 in the year of the separation
•Payments made due to disability
•Payments after your death
•Payments of ESOP dividends
•Corrective distributions of contributions that exceed tax law limitations
•Cost of life insurance paid by the Plan
•Payments made directly to the government to satisfy a federal tax levy
•Payments made under a qualified domestic relations order (QDRO)
•Payments up to the amount of your deductible medical expenses
Certain payments made while you are on active duty if you were a member•
of a reserve component called to duty after September 11, 2001 for more
than 179 days
•Payments of certain automatic enrollment contributions requested to be
withdrawn within 90 days of the first contribution.
If I do a rollover to an IRA, will the 10% additional income tax apply to early
di s tr i bu tio ns fro m the IRA?
If you receive a payment from an IRA when you are under age 59½, you will have to pay
the 10% additional income tax on early distributions from the IRA, unless an exception
applies. In general, the exceptions to the 10% additional income tax for early distributions
from an IRA are the same as the exceptions listed above for early distributions from a plan.
However, there are a few differences for payments from an IRA, including:
•There is no exception for payments after separation from service that are
Page 4 of 10
made after age 55.
The exception for qualified domestic relations orders (QDROs) does not•
apply (although a special rule applies under which, as part of a divorce or
separation agreement, a tax-free transfer may be made directly to an IRA of
a spouse or former spouse).
The exception for payments made at least annually in equal or close to equal•
amounts over a specif ied period applies without regard to whether you have
had a separation from service.
•There are additional exceptions for (1) payments for qualified higher
education expenses, (2) payments up to $10,000 used in a qualified
first-time home purchase, and (3) payments for health insurance premiums
after you have received unemployment compensation for 12 consecutive
weeks (or would have been eligible to receive unemployment compensation
but for self-employed status).
Will I owe State income taxes?
This notice does not describe any State or local income tax rules (including withholding
rules).
SPECIAL RULES AND OPTIONS
If your payment includes after-tax contributions
After-tax contributions included in a payment are not taxed. If a payment is only part of
your benefit, an allocable portion of your after-tax contributions is included in the payment,
so you cannot take a payment of only after-tax contributions. However, if you have
pre-1987 after-tax contributions maintained in a separate account, a special rule may
apply to determine whether the after-tax contributions are included in a payment. In
addition, special rules apply when you do a rollover, as described below.
You may roll over to an IRA a payment that includes after-tax contributions through either
a direct rollover or a 60-day rollover. You must keep track of the aggregate amount of the
after-tax contributions in all of your IRAs (in order to determine your taxable income for
later payments from the IRAs). If you do a direct rollover of only a portion of the amount
paid from the Plan and at the same time the rest is paid to you, the portion directly rolled
over consists first of the amount that would be taxable if not rolled over. For example,
assume you are receiving a distribution of $12,000, of which $2,000 is after-tax
contributions. In this case, if you directly roll over $10,000 to an IRA that is not a Roth IRA,
no amount is taxable because the $2,000 amount not directly rolled over is treated as
being after-tax contributions. If you do a direct rollover of the entire amount paid from the
plan to two or more destinations at the same time, you can choose which destination
receives the after-tax contributions.
Page 5 of 10
If you do a 60-day rollover to an IRA of only a portion of a payment made to you, the after-
tax contributions are treated as rolled over last. For example, assume you are receiving
a distribution of $12,000, of which $2,000 is after-tax contributions, and no part of the
distribution is directly rolled over. In this case, if you roll over $10,000 to an IRA that is not
a Roth IRA in a 60-day rollover, no amount is taxable because the $2,000 amount not
rolled over is treated as being after-tax contributions.
You may roll over to an employer plan all of a payment that includes after-tax
contributions, but only through a direct rollover (and only if the receiving plan separately
accounts for after-tax contributions and is not a governmental section 457(b) plan). You
can do a 60-day rollover to an employer plan of part of a payment that includes after-tax
contributions, but only up to the amount of the payment that would be taxable if not rolled
over.
If you miss the 60-day rollover deadline
Generally, the 60-day rollover deadline cannot be extended. However, the IRS has the
limited authority to waive the deadline under certain extraordinary circumstances, such as
when external events prevented you from completing the rollover by the 60-day rollover
deadline. To apply for a waiver, you must file a private letter ruling request with the IRS.
Private letter ruling requests require the payment of a nonrefundable user fee. For more
information, see IRS Publication 590, Individual Retirement Arrangements (IRAs).
If your payment includes employer stock that you do not roll over
If you do not do a rollover, you can apply a special rule to payments of employer stock (or
other employer securities) that are either attributable to after-tax contributions or paid in
a lump sum after separation from service (or after age 59½, disability, or the participant's
death). Under the special rule, the net unrealized appreciation on the stock will not be
taxed when distributed from the Plan and will be taxed at capital gain rates when you sell
the stock. Net unrealized appreciation is generally the increase in the value of employer
stock after it was acquired by the Plan. If you do a rollover for a payment that includes
employer stock (for example, by selling the stock and rolling over the proceeds within 60
days of the payment), the special rule relating to the distributed employer stock will not
apply to any subsequent payments from the IRA or employer plan. The Plan administrator
can tell you the amount of any net unrealized appreciation.
If you have an outstanding loan that is being offset
If you have an outstanding loan from the Plan, your Plan benefit may be offset by the
amount of the loan, typically when your employment ends. The loan offset amount is
treated as a distribution to you at the time of the offset and will be taxed (including the 10%
additional income tax on early distributions, unless an exception applies) unless you do
Page 6 of 10
a 60-day rollover in the amount of the loan offset to an IRA or employer plan.
If you were born on or before January 1, 1936
If you were born on or before January 1, 1936 and receive a lump sum distribution that
you do not roll over, special rules for calculating the amount of the tax on the payment
might apply to you. For more information, see IRS Publication 575, Pension and Annuity
Income.
If your payment is from a governmental section 457(b) plan
If the Plan is a governmental section 457(b) plan, the same rules described elsewhere in
this notice generally apply, allowing you to roll over the payment to an IRA or an employer
plan that accepts rollovers. One difference is that, if you do not do a rollover, you will not
have to pay the 10% additional income tax on early distributions from the Plan even if you
are under age 59½ (unless the payment is from a separate account holding rollover
contributions that were made to the Plan from a tax-qualified plan, a section 403(b) plan,
or an IRA). However, if you do a rollover to an IRA or to an employer plan that is not a
governmental section 457(b) plan, a later distribution made before age 59½ will be subject
to the 10% additional income tax on early distributions (unless an exception applies).
Other differences are that you cannot do a rollover if the payment is due to an
"unforeseeable emergency" and the special rules under "If your payment includes
employer stock that you do not roll over" and "If you were born on or before January 1,
1936" do not apply.
If you are an eligible retired public safety officer and your pension payment is used
to pay for health coverage or qualified long-term care insurance
If the Plan is a governmental plan, you retired as a public safety officer, and your
retirement was by reason of disability or was after normal retirement age, you can exclude
from your taxable income plan payments paid directly as premiums to an accident or
health plan (or a qualified long-term care insurance contract) that your employer maintains
for you, your spouse, or your dependents, up to a maximum of $3,000 annually. For this
purpose, a public safety officer is a law enforcement officer, firefighter, chaplain, or
member of a rescue squad or ambulance crew.
If you roll over your payment to a Roth IRA
If you roll over the payment from the Plan to a Roth IRA, a special rule applies under which
the amount of the payment rolled over (reduced by any after-tax amounts) will be taxed.
However, the 10% additional income tax on early distributions will not apply (unless you
take the amount rolled over out of the Roth IRA within 5 years, counting from January 1
of the year of the rollover).
Certain pension (usually defined contribution plans) plans may have an optional1
Roth account. Please contact your Plan Administrator to determine if your Plan has this
option. The optional Roth accounts are not required to be offered by the Plan.
Page 7 of 10
If you roll over the payment to a Roth IRA, later payments from the Roth IRA that are
qualified distributions will not be taxed (including earnings after the rollover). A qualified
distribution from a Roth IRA is a payment made after you are age 59½ (or after your death
or disability, or as a qualified first-time homebuyer distribution of up to $10,000) and after
you have had a Roth IRA for at least 5 years. In applying this 5-year rule, you count from
January 1 of the year for which your first contribution was made to a Roth IRA. Payments
from the Roth IRA that are not qualified distributions will be taxed to the extent of earnings
after the rollover, including the 10% additional income tax on early distributions (unless an
exception applies). You do not have to take required minimum distributions from a Roth
IRA during your lifetime. For more information, see IRS Publication 590-A, Contributions
to Individual Retirement Arrangements (IRAs), and IRS Publication 590-B, Distributions
from Individual Retirement Arrangements (IRAs).
If you do a rollover to a designated Roth account in the Plan
You cannot roll over a distribution to a designated Roth account in another employer’s
plan. However, you can roll the distribution over into a designated Roth account in the
distributing Plan. If you roll over a payment from the Plan to a designated Roth account1
in the Plan, the amount of the payment rolled over (reduced by any after-tax amounts
directly rolled over) will be taxed. However, the 10% additional tax on early distributions
will not apply (unless you take the amount rolled over out of the designated Roth account
within the 5-year period that begins on January 1 of the year of the rollover).
If you roll over the payment to a designated Roth account in the Plan, later payments from
the designated Roth account that are qualified distributions will not be taxed (including
earnings after the rollover). A qualified distribution from a designated Roth account is a
payment made both after you are age 59½ (or after your death or disability) and after you
have had a designated Roth account in the Plan for at least 5 years. In applying this 5-year
rule, you count from January 1 of the year your first contribution was made to the
designated Roth account. However, if you made a direct rollover to a designated Roth
account in the Plan from a designated Roth account in a plan of another employer, the 5-
year period begins on January 1 of the year you made the first contribution to the
designated Roth account in the Plan or, if earlier, to the designated Roth account in the
plan of the other employer. Payments from the designated Roth account that are not
qualified distributions will be taxed to the extent of earnings after the rollover, including the
10% additional income tax on early distributions (unless an exception applies).
If you are not a plan participant
Payments after death of the participant. If you receive a distribution after the participant's
Page 8 of 10
death that you do not roll over, the distribution will generally be taxed in the same manner
described elsewhere in this notice. However, the 10% additional income tax on early
distributions and the special rules for public safety officers do not apply, and the special
rule described under the section "If you were born on or before January 1, 1936" applies
only if the participant was born on or before January 1, 1936.
If you are a surviving spouse. If you receive a payment from the Plan as the
surviving spouse of a deceased participant, you have the same rollover options that
the participant would have had, as described elsewhere in this notice. In addition,
if you choose to do a rollover to an IRA, you may treat the IRA as your own or as
an inherited IRA.
An IRA you treat as your own is treated like any other IRA of yours, so that
payments made to you before you are age 59½ will be subject to the 10%
additional income tax on early distributions (unless an exception applies) and
required minimum distributions from your IRA do not have to start until after you are
age 70½.
If you treat the IRA as an inherited IRA, payments from the IRA will not be subject
to the 10% additional income tax on early distributions. However, if the participant
had started taking required minimum distributions, you will have to receive required
minimum distributions from the inherited IRA. If the participant had not started
taking required minimum distributions from the Plan, you will not have to start
receiving required minimum distributions from the inherited IRA until the year the
participant would have been age 70½.
If you are a surviving beneficiary other than a spouse. If you receive a payment
from the Plan because of the participant's death and you are a designated
beneficiary other than a surviving spouse, the only rollover option you have is to do
a direct rollover to an inherited IRA. Payments from the inherited IRA will not be
subject to the 10% additional income tax on early distributions. You will have to
receive required minimum distributions from the inherited IRA.
Payments under a qualified domestic relations order. If you are the spouse or former
spouse of the participant who receives a payment from the Plan under a qualified
domestic relations order (QDRO), you generally have the same options the participant
would have (for example, you may roll over the payment to your own IRA or an eligible
employer plan that will accept it). Payments under the QDRO will not be subject to the
10% additional income tax on early distributions.
If you are a nonresident alien
If you are a nonresident alien and you do not do a direct rollover to a U.S. IRA or U.S.
employer plan, instead of withholding 20%, the Plan is generally required to withhold 30%
of the payment for federal income taxes. If the amount withheld exceeds the amount of
Page 9 of 10
tax you owe (as may happen if you do a 60-day rollover), you may request an income tax
refund by filing Form 1040NR and attaching your Form 1042-S. See Form W -8BEN for
claiming that you are entitled to a reduced rate of withholding under an income tax treaty.
For more information, see also IRS Publication 519, U.S. Tax Guide for Aliens, and IRS
Publication 515, Withholding of Tax on Nonresident Aliens and Foreign Entities.
Other special rules
If a payment is one in a series of payments for less than 10 years, your choice whether
to make a direct rollover will apply to all later payments in the series (unless you make a
different choice for later payments).
If your payments for the year are less than $200 (not including payments from a
designated Roth account in the Plan), the Plan is not required to allow you to do a direct
rollover and is not required to withhold for federal income taxes. However, you may do a
60-day rollover.
Unless you elect otherwise, a mandatory cashout of more than $1,000 (not including
payments from a designated Roth account in the Plan) will be directly rolled over to an IRA
chosen by the Plan administrator or the payor. A mandatory cashout is a payment from
a plan to a participant made before age 62 (or normal retirement age, if later) and without
consent, where the participant's benefit does not exceed $5,000 (not including any
amounts held under the plan as a result of a prior rollover made to the plan).
You may have special rollover rights if you recently served in the U.S. Armed Forces. For
more information, see IRS Publication 3, Armed Forces' Tax Guide.
FOR MORE INFORMATION
You may wish to consult with the Plan administrator or payor, or a professional tax advisor,
before taking a payment from the Plan. Also, you can find more detailed information on
the federal tax treatment of payments from employer plans in: IRS Publication 575,
Pension and Annuity Income; IRS Publication 590-A, Contributions to Individual
Retirement Arrangements (IRAs); IRS Publication 590-B, Distributions from Individual
Retirement Arrangements (IRAs); and IRS Publication 571, Tax-Sheltered Annuity Plans
(403(b) Plans). These publications are available from a local IRS office, on the web at
www.irs.gov, or by calling 1-800-TAX-FORM.
* * *
Page 10 of 10
I HAVE RECEIVED AND READ THE PRECEDING 9-PAGE
SPECIAL TAX NOTICE:
Date:
Participant’s Signature
Print Clearly Participant’s Name
Note: Return ONLY this last page (numbered 10 of 10) to:
Palm Beach Gardens Police Officers’ Pension Fund
Audrey Ross, Pension Administrator
4360 Northlake Boulevard, Suite 206
Palm Beach Gardens, FL 33410
H:\PBG 0003\FORMS\2015 SPECIAL TAX NOTICE (ROLLOVERS).wpd
PALM BEACH GARDENS POLICE
PENSION FUND
Benefit Approvals
Meeting of January 29, 2015
APPLICATION TO EXIT THE DROP
GWEN FLEMMING DATE OF BIRTH 10/4/1963
DATE OF HIRE 10/6/1986
DROP ENTRY DATE 3/28/2010
DATE OF TERMINATION 12/10/2014
FORM OF BENEFIT LIFE ANNUITY
MONTHLY BENEFIT AMOUNT $7,667.26
SUPPLEMENTAL BENEFIT $ 287.50
_________________________
APPLICATION FOR DISTRIBUTION OF DROP ACCOUNTS
(12/15/2014 & 1/15/2015)
GWEN FLEMING DATE OF RETIREMENT 12/10/2014
DATE OF BIRTH 10/4/1963
TYPE OF DISTRIBUTION PARTIAL LUMP SUM-CASH
12/15/2014 TOTAL GROSS DISTRIBUTION $25,000.00
TAX WITHHOLDING (20%) $ 5,000.00
TOTAL NET DISTRIBUTION $20,000.00
CURRENT DROP ACCOUNT BALANCE $389,534.29
_________________________
GWEN FLEMING DATE OF RETIREMENT 12/10/2014
DATE OF BIRTH 10/4/1963
TYPE OF DISTRIBUTION PARTIAL LUMP SUM-CASH
TOTAL GROSS DISTRIBUTION $150,000.00
TAX WITHHOLDING (20%) $ 30,000.00
TOTAL NET DISTRIBUTION $120,000.00
CURRENT DROP ACCOUNT BALANCE $364,534.29
_________________________
__________________________________, SECRETARY
APPROVED _________________________________, TRUSTEE
_________________________________, DATE
October November December
1000 BB&T 361,062.90 277,518.97 316,922.83
1215 A/R Employee Buyback Contributions 20,279.43 20,279.43 20,279.43
1220 A/R State Contributions 546,748.75 0.00 0.00
1300 Prepaid Other 0.00 155,666.25 174,235.28
Salem Trust (Consolidated)
1400 Cash and Equivalents 593,922.29 773,307.34 1,086,822.39
1410 Equities 8,765,047.96 9,091,586.69 8,767,100.95
1420 Fixed Income 16,988,567.91 16,854,433.00 16,901,916.81
1430 Other Assets-RhumbLine 36,435,442.33 37,102,577.92 37,355,464.73
1450 Accrued Income 109,282.09 110,034.39 99,317.48
1460 Broker Accruals (55,774.56)328,202.79 (763.13)
Salem Trust Total 62,836,488.02 64,260,142.13 64,209,859.23
1604 American Core Realty 3,177,331.79 3,177,331.79 3,177,331.79
1616 Dreyfus International Bond 815,187.95 818,669.18 809,345.28
1628 Oppenheimer International Bond 738,102.29 739,648.61 730,310.45
1639 Vanguard Global Equity 2,282,828.78 2,282,828.78 2,310,247.54
1641 Vanguard International Growth 1,644,941.40 1,644,941.40 1,596,731.01
1642 Vanguard International Value 1,484,821.55 1,484,821.55 1,400,506.72
2000 Accounts Payable (38,166.83)0.00 0.00
73,869,626.03 74,861,848.09 74,745,769.56
Palm Beach Gardens Police
Balance Sheet
FY 2015
Account Description
TOTAL RESERVE FUND (MARKET VALUE):
Pension Resource Centers
Accounts Payable Check Register
FOR: PALM BEACH GARDENS POLICE
Meeting
Check NumberDatePayee and DescriptionAmount
2628October 31, 2014City of Palm Beach Gardens $13,593.67
Retiree Insurance
2629November 3, 2014Pension Resource Center $2,597.80
Administrative Fee - November 2014
2630November 3, 2014FPPTA $30.00
Re-Certification Fee for 2014 - Marc Glass
2631November 3, 2014Thistle Asset Consulting Inc $5,304.00
Performance Monitoring - Reports-Executive September 30, 2014
2632November 3, 2014Rhumbline Advisors $5,786.00
Investment Management Fees - 3rd Quarter 2014
2633November 3, 2014Law Offices of Bonni Jensen, P. A.$158.55
Legal Services Rendered through 9/30/2014
2634November 3, 2014Law Offices of Bonni Jensen, P. A.$667.50
Legal Services Rendered through 10/15/2014
2635November 3, 2014ICC Capital Management $26,918.28
Investment Management Fee - 3rd Quarter 2014
2636November 11, 2014FPPTA $600.00
Membership Renewal for 2015
2637December 1, 2014City of Palm Beach Gardens $13,583.96
Retiree Insurance
2638December 1, 2014Pension Resource Center $2,575.00
Administrative Fee - December 2014
2639December 1, 2014FPPTA $30.00
Re-Certification Fee for 2014 - Jay Spencer
2640December 1, 2014Law Offices of Bonni Jensen, P.A.$898.43
Legal Services Rendered through 11/15/2014
2641December 1, 2014Gabriel Roeder Smith & Company$10,480.00
Actuarial Services Rendered through 10/31/2014
2642December 3, 2014United Members Insurance Inc$5,579.23
Fiduciary Liability Policy # AGL 001043501 - 12/01/14 - 12/01/15
2643December 4, 2014Marc Glass $269.11
Reimbursement for Travel Expense - 10/5/2014 - 10/08/2014
FPPTA Fall Trustee School
2644December 4, 2014FPPTA $30.00
Re-Certification Fee for 2014 - Greg Mull
2645January 1, 2015City of Palm Beach Gardens $13,599.27
Retiree Insurance
2646January 6, 2015Pension Resource Center $2,575.00
Administration Fee - January 2015
2647January 6, 2015Law Offices of Bonni Jensen, P A$291.90
Legal Services Rendered through 12/15/2014
2648January 6, 2015Cherry Bekaert & Holland $5,000.00
Progress Billing on Audit of financial Statements for the year ended
9/30/2014
2649January 14, 2015New York Marriott East Side $1,386.41
Reservations for Greg Mull - 15th Annual Wall Street Program
04/14/2015 - 04/18/2015
Total:$111,954.11
Chair___________________________
Secretary___________________________
Date_______________________________
End OctoberEnd NovemberEnd DecemberYear-To-Date
Income:
4100 Employee Contributions 31,774.16 32,574.60 33,082.87 97,431.63
Realized Gain/Loss-Salem Trust
4210 Equities 723.06 786.83 (240.69)1,269.20
4220 Fixed Income (821.44)(3,791.11)(9,687.14)(14,299.69)
Unrealized Gain/Loss-Salem Trust
4310 Equities 190,451.56 246,370.96 (20,389.85)416,432.67
4320 Fixed Income 74,790.62 63,566.82 (67,992.81)70,364.63
4330 Other Assets-RhumbLine 1,302,020.84 667,135.59 252,886.81 2,222,043.24
4500 Unrealized Gain/Loss-Mgr Held
4516 Dreyfus International Bond 0.00 0.00 (30,058.91)(30,058.91)
4528 Oppenheimer International Bond 0.00 0.00 (11,079.38)(11,079.38)
4539 Vanguard Global Equity 0.00 0.00 (7,970.28)(7,970.28)
4541 Vanguard International Growth 0.00 0.00 (86,618.92)(86,618.92)
4542 Vanguard International Value 0.00 0.00 (122,298.64)(122,298.64)
4600 Interest & Dividend Income 45,597.92 54,612.57 179,398.39 279,608.88
4710 Securities Litigation 0.00 0.00 114.32 114.32
Total Income1,644,536.721,061,256.26109,145.772,814,938.75
End OctoberEnd NovemberEnd DecemberYear-To-Date
Expense:
5000 Benefit Payments 292,000.53 0.00 148,482.59 440,483.12
5010 Beneficiary Payments 14,572.78 0.00 7,286.39 21,859.17
5020 Disability Payments 42,495.08 0.00 22,735.14 65,230.22
5300 DROP Distributions 38,000.00 65,000.00 25,000.00 128,000.00
5310 DROP Distributions-Monthly 3,400.00 0.00 1,700.00 5,100.00
6100 Actuary Fees 0.00 0.00 10,480.00 10,480.00
6110 Administrator Fees 2,575.00 2,597.80 2,575.00 7,747.80
6130 Bank Charges 199.30 138.90 158.41 496.61
6150 Legal Fees 0.00 667.50 898.43 1,565.93
6200 Trustee Expense-Conference 3,920.81 0.00 269.11 4,189.92
6200 Trustee Expense-Conference 3,150.00 30.00 60.00 3,240.00
6220 Annual Membership Fees 0.00 600.00 0.00 600.00
6300 Fiduciary Liability Insurance 927.81 0.00 5,579.23 6,507.04
Total Expense 401,241.3169,034.20225,224.30695,499.81
Reserve Fund Last Period 72,626,330.62 73,869,626.03 74,861,848.09 72,626,330.62
Balance To/ From Reserve 1,243,295.41 992,222.06 (116,078.53)2,119,438.94
TOTAL RESERVE FUND73,869,626.0374,861,848.0974,745,769.5674,745,769.56
Palm Beach Gardens Police
Statement of Income and Expense
FY 2015
Account Description
Account Description
December 8, 2014
Control No.: TEGE-07-1114-0029
Affected IRM: IRM 7.11.1, 4.72.7
Expiration Date: December 8, 2016
MEMORANDUM FOR ALL EP EMPLOYEES
FROM: Robert S. Choi, Director /s/ Robert S. Choi
Employee Plans
SUBJECT: Applying Section 415 Limits to Governmental Defined Benefit Plans
with Deferred Retirement Option Plan Features
Purpose
This memorandum provides direction to Employee Plans (EP) employees reviewing
governmental defined benefit (DB) plans with deferred retirement option p lan (DROP)
features, setting forth administrative guidelines for applying the benefit and contribution
limits of § 415 of the Internal Revenue Code (Code) to such plans.
This directive is not a pronouncement of law and is not subject to use, citation, or
reliance as such. Nothing in this directive shall affect the operation of any other
provision of the Code, regulations, or guidance thereunder.
DROP Design
Under a typical DROP design, a DB plan participant who is eligible to retire and
immediately receive retirement payments under the DB plan continues to work and
makes an election under which the participant’s benefit accruals under the DB plan are
frozen (i.e., no additional service or compensation credits accrue). Pursuant to the
election, the amounts that the participant would have received as a DB retirement
payment had the participant in fact retired are credited to a DROP (for purposes of this
directive, these amounts will be referred to as DB Benefit Amounts). The DROP may
also provide for employee or employer contributions to be made to the DROP in
addition to the DB Benefit Amounts credited to the DROP (Additional Contributions).
2
Administrative Guidelines
EP employees reviewing a governmental DB should not treat DB Benefit Amounts
credited to a DROP as annual additions subject to the § 415(c) limitation applicable to
defined contribution (DC) plans.
Accordingly, if you are reviewing a governmental DB plan that does not allow Additional
Contributions to be made to the DROP, the plan will not be required to include § 415(c)
limitation provisions for the DROP, and no further analysis with regard to the § 415(c)
limitation for the DROP is required.
If you are reviewing a governmental DB that allows Additional Contributions to be made
to the DROP, these Additional Contributions also will not be treated as annual additions
subject to the § 415(c) limits except in limited circumstances as described below. If
there are Additional Contributions, the § 415(c) annual addition limits will apply only with
respect to the Additional Contributions and only if all of the following three criteria
described below are satisfied. You should review the plan documents to determine if
this is the case.
(1) The DROP consists of segregated accounts for each participant;
(2) Earnings on amounts in the DROP are based solely on actual investment
earnings, i.e., the DROP does not provide for a fixed or guaranteed rate of
return on funds in the DROP; and
(3) The DROP does not provide for cessation of the accrual of earnings in the
DROP at any time.
With respect to the first criterion, if the plan’s language indicates that it provides for
segregated accounts for each participant, you should contact the plan’s representative
to receive written confirmation under penalties of perjury of how the plan is actually
operated.
If the DROP does not meet any one of the above three criteria, the Additional
Contributions will not be treated as annual additions subject to the § 415(c) limits.
The Appendix to this directive provides an explanation of the three criteria and
examples of plan language to assist you in reviewing the plan documents.
If you have any questions regarding this directive, please contact Patrick Gutierrez at
202-317-8718.
cc: www.irs.gov
A-1
APPENDIX
Detailed Explanation of the Three Criteria Used for Determining Whether § 415(c)
Limits Apply to Additional Contributions in a DROP
If a DROP provides for Additional Contributions, the following information is designed to
facilitate the application of the three criteria listed in the directive.
I. Segregated accounts for each participant
For purposes of the directive, Additional Contributions will not be treated as
annual additions subject to § 415(c) limits where the plan language does not
indicate that it provides for segregated accounts for each participant or the plan’s
representative confirms that the plan is actually not operated with segregated
accounts.
The following are examples of plan language providing for non-segregated
accounts:
- All benefits payable to a DROP participant shall be paid from the
general assets of the Plan.
- All benefits payable under the DROP shall be paid only from the assets
of the DROP, and the Employer shall have no duty or liability to furnish the
DROP with any funds except to the extent required by applicable law.
[NOTE - this does not provide for segregated accounts for each participant
because the language groups the DROP accounts for all participants
together.]
Pursuant to the directive, if the plan’s language indicates that it provides for
segregated accounts for each participant, the EP employee should contact the
plan’s representative to receive written confirmation under penalties of perjury of
how the plan is actually operated. If the plan in fact does not operate as if
benefits paid to a participant are paid only from the assets in the participant’s
DROP account, this first criterion is not met.
The following is an example of plan language indicating that it provides for
segregated accounts:
- All DROP benefits payable to a participant shall be paid only from the
assets in the participant’s DROP account.
II. Actual investment earnings
If a DROP provides for a rate of return based on something other than actual
investment earnings (such as a fixed or guaranteed rate), the DROP account is
A-2
not based “solely” upon contributions and earnings and the Additional
Contributions will not be treated as annual additions subject to the § 415(c) limits.
For purposes of the directive, DROP designs that are treated as having a fixed or
guaranteed rate of return include designs where:
(a) the rate of return is fixed at a pre-stated rate, such as x% (this includes
setting the earnings rate as a rate external to the plan (e.g., 10 -year
Treasury bills) or at a 0% rate of return (i.e., no earnings));
(b) there is a maximum and/or minimum set for investment returns (e.g., a
participant may choose from individual investments but is guaranteed a
return of not less than x%); or
(c) a participant may choose from different investment options and the
choices include either (a) or (b).
The following are examples of plan language providing for fixed or guaranteed
rates of return:
(1) Fixed rate on assets in DROP account:
A member’s DROP account shall be credited each month with
earnings based on an interest rate of X percent per annum
compounded monthly.
If the plan language provides for a rate of return equal to the return on the
assets of the entire DB plan, this shall be treated as a fixed or guaranteed
rate and not actual investment earnings of the participant’s DROP
account.
(2) Maximum or minimum rate:
The DROP account shall be credited annually with earnings equal
to the actual investment return on the assets in the participant’s
DROP account (as selected by the participant), but in no event
more than X percent or less than Y percent.
(3) Interest rate determined by participant election:
- Participant can choose interest at:
(i) a fixed rate of X percent,
(ii) the rate equal to the net investment return of Plan assets, or
(iii) the net investment return of the assets in the DROP account
as selected by the DROP participant.
A-3
- Payment to the DROP shall be credited or debited with interest
according to one of the following options chosen by the DROP
participant:
(i) the DROP account is credited or debited with the same
percentage as the net investment return of the Plan as a
whole, or
(ii) the participant’s DROP account is credited with the actual
investment return on the mutual funds in the participant’s
DROP account (as selected by the participant).
III. No cessation of the crediting of earnings in the DROP at any time
Most DROPs provide for the crediting of the DB Benefit Amounts into the DROP
only over a defined time period, often five years (the DROP period).
For purposes of the directive, if crediting of investment earnings ceases at any
time while assets remain in the DROP (for example after the DROP period), the
DROP is not treated as providing for actual investment earnings and the
Additional Contributions will not be treated as annual additions subject to the §
415(c) limits.
The following are examples of plan language providing for cessation of earnings:
- Except as otherwise provided in the section above (providing that interest
ceases at end of DROP period), the DROP account shall be credited
with…
- If an employee does not terminate employment at the end of participation
in the DROP, interest shall no longer be credited to the DROP account.
Florida Senate - 2015 SB 172
By Senators Bradley and Ring
7-00045-15 2015172__
Page 1 of 42
CODING: Words stricken are deletions; words underlined are additions.
A bill to be entitled 1
An act relating to local government pension reform; 2
amending s. 175.021, F.S.; requiring that firefighter 3
pension plans meet the requirements of ch. 175, F.S., 4
in order to receive certain insurance premium tax 5
revenues; amending s. 175.032, F.S.; revising 6
definitions to conform to changes made by the act and 7
providing new definitions; amending s. 175.071, F.S.; 8
conforming a cross-reference; amending s. 175.091, 9
F.S.; revising the method of creating and maintaining 10
a firefighters’ pension trust fund; amending s. 11
175.162, F.S.; deleting a provision basing the 12
availability of additional benefits in a firefighter 13
pension plan upon state funding; revising the 14
calculation of monthly retirement income for a full-15
time firefighter; specifying the minimum benefits that 16
must be maintained by certain firefighter pension 17
plans after a specified date; amending s. 175.351, 18
F.S.; exempting certain firefighter pension plans of a 19
municipality or special fire control district from 20
meeting certain minimum benefits in order to 21
participate in the distribution of a premium tax; 22
redesignating the term “pension plan” as “retirement 23
plan”; revising criteria governing the use of revenues 24
of the premium tax; authorizing a pension plan to 25
reduce certain excess benefits if the plan continues 26
to meet certain minimum benefits and standards; 27
providing that the use of premium tax revenues may 28
deviate from the requirements of ch. 175, F.S., under 29
Florida Senate - 2015 SB 172
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CODING: Words stricken are deletions; words underlined are additions.
certain circumstances; revising the conditions for 30
proposing the adoption of a pension plan or an 31
amendment to a pension plan; requiring plan sponsors 32
to have a defined contribution plan component in place 33
by a certain date; authorizing a municipality or 34
special fire control district to implement certain 35
changes to a local law plan which are contrary to ch. 36
175, F.S., for a limited time, under certain 37
circumstances; amending s. 185.01, F.S.; requiring 38
that police officer pension plans meet the 39
requirements of ch. 185, F.S., in order to receive 40
certain insurance premium tax revenues; amending s. 41
185.02, F.S.; revising definitions to conform to 42
changes made by the act and providing new definitions; 43
revising applicability of the limitation on the amount 44
of overtime payments that may be used for pension 45
benefit calculations; amending s. 185.06, F.S.; 46
conforming a cross-reference; amending s. 185.07, 47
F.S.; revising the method of creating and maintaining 48
a police officers’ retirement trust fund; amending s. 49
185.16, F.S.; deleting a provision basing the 50
availability of additional benefits in a police 51
officer pension plan upon state funding; revising the 52
calculation of monthly retirement income for a police 53
officer; specifying the minimum benefits that must be 54
maintained by certain police officer pension plans 55
after a specified date; amending s. 185.35, F.S.; 56
exempting certain municipal police officer pension 57
plans from meeting certain minimum benefits in order 58
Florida Senate - 2015 SB 172
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Page 3 of 42
CODING: Words stricken are deletions; words underlined are additions.
to participate in the distribution of a premium tax; 59
redesignating the term “pension plan” as “retirement 60
plan”; revising criteria governing the use of revenues 61
from the premium tax; authorizing a plan to reduce 62
certain excess benefits if the plan continues to meet 63
certain minimum benefits and minimum standards; 64
providing that the use of premium tax revenues may 65
deviate from the requirements of ch. 185, F.S., under 66
specified circumstances; revising the conditions for 67
proposing the adoption of a pension plan or amendment 68
to a pension plan; conforming a cross-reference; 69
requiring plan sponsors to have a defined contribution 70
plan component in place by a certain date; authorizing 71
a municipality to implement certain changes to a local 72
law plan which are contrary to ch. 185, F.S., for a 73
limited time; providing a declaration of important 74
state interest; providing an effective date. 75
76
Be It Enacted by the Legislature of the State of Florida: 77
78
Section 1. Subsection (2) of section 175.021, Florida 79
Statutes, is amended to read: 80
175.021 Legislative declaration.— 81
(2) This chapter hereby establishes, for all municipal and 82
special district pension plans existing now or hereafter under 83
this chapter, including chapter plans and local law plans, 84
minimum benefits and minimum standards for the operation and 85
funding of such plans, hereinafter referred to as firefighters’ 86
pension trust funds, which must be met as a condition precedent 87
Florida Senate - 2015 SB 172
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CODING: Words stricken are deletions; words underlined are additions.
to the plan or plan sponsor receiving a distribution of 88
insurance premium tax revenues under s. 175.121. The Minimum 89
benefits and minimum standards for each plan set forth in this 90
chapter may not be diminished by local charter, ordinance, or 91
resolution or by special act of the Legislature and may not, nor 92
may the minimum benefits or minimum standards be reduced or 93
offset by any other local, state, or federal law that includes 94
may include firefighters in its operation, except as provided 95
under s. 112.65. 96
Section 2. Section 175.032, Florida Statutes, is amended to 97
read: 98
175.032 Definitions.—For any municipality, special fire 99
control district, chapter plan, local law municipality, local 100
law special fire control district, or local law plan under this 101
chapter, the term following words and phrases have the following 102
meanings: 103
(1) “Additional premium tax revenues” means revenues 104
received by a municipality or special fire control district 105
pursuant to s. 175.121 which exceed base premium tax revenues. 106
(2)(1)(a) “Average final compensation” for: 107
(a) A full-time firefighter means one-twelfth of the 108
average annual compensation of the 5 best years of the last 10 109
years of creditable service before prior to retirement, 110
termination, or death, or the career average as a full-time 111
firefighter since July 1, 1953, whichever is greater. A year is 112
shall be 12 consecutive months or such other consecutive period 113
of time as is used and consistently applied. 114
(b) “Average final compensation” for A volunteer 115
firefighter means the average salary of the 5 best years of the 116
Florida Senate - 2015 SB 172
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CODING: Words stricken are deletions; words underlined are additions.
last 10 best contributing years before prior to change in status 117
to a permanent full-time firefighter or retirement as a 118
volunteer firefighter or the career average of a volunteer 119
firefighter, since July 1, 1953, whichever is greater. 120
(3) “Base premium tax revenues” means: 121
(a) For a local law plan in effect on October 1, 1998, the 122
revenues received by a municipality or special fire control 123
district pursuant to s. 175.121 for the 1997 calendar year. 124
(b) For a local law plan created between October 1, 1998, 125
and March 1, 2015, inclusive, the revenues received by a 126
municipality or special fire control district pursuant to s. 127
175.121 based upon the tax collections during the second 128
calendar year of participation. 129
(4)(2) “Chapter plan” means a separate defined benefit 130
pension plan for firefighters which incorporates by reference 131
the provisions of this chapter and has been adopted by the 132
governing body of a municipality or special district. Except as 133
may be specifically authorized in this chapter, the provisions 134
of a chapter plan may not differ from the plan provisions set 135
forth in ss. 175.021-175.341 and ss. 175.361-175.401. Actuarial 136
valuations of chapter plans shall be conducted by the division 137
as provided by s. 175.261(1). 138
(5)(3) “Compensation” or “salary” means, for 139
noncollectively bargained service earned before July 1, 2011, or 140
for service earned under collective bargaining agreements in 141
place before July 1, 2011, the fixed monthly remuneration paid a 142
firefighter. If remuneration is based on actual services 143
rendered, as in the case of a volunteer firefighter, the term 144
means the total cash remuneration received yearly for such 145
Florida Senate - 2015 SB 172
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CODING: Words stricken are deletions; words underlined are additions.
services, prorated on a monthly basis. For noncollectively 146
bargained service earned on or after July 1, 2011, or for 147
service earned under collective bargaining agreements entered 148
into on or after July 1, 2011, the term has the same meaning 149
except that when calculating retirement benefits, up to 300 150
hours per year in overtime compensation may be included as 151
specified in the plan or collective bargaining agreement, but 152
payments for accrued unused sick or annual leave may not be 153
included. 154
(a) Any retirement trust fund or plan that meets the 155
requirements of this chapter does not, solely by virtue of this 156
subsection, reduce or diminish the monthly retirement income 157
otherwise payable to each firefighter covered by the retirement 158
trust fund or plan. 159
(b) The member’s compensation or salary contributed as 160
employee-elective salary reductions or deferrals to any salary 161
reduction, deferred compensation, or tax-sheltered annuity 162
program authorized under the Internal Revenue Code shall be 163
deemed to be the compensation or salary the member would receive 164
if he or she were not participating in such program and shall be 165
treated as compensation for retirement purposes under this 166
chapter. 167
(c) For any person who first becomes a member in any plan 168
year beginning on or after January 1, 1996, compensation for 169
that plan year may not include any amounts in excess of the 170
Internal Revenue Code s. 401(a)(17) limitation, as amended by 171
the Omnibus Budget Reconciliation Act of 1993, which limitation 172
of $150,000 shall be adjusted as required by federal law for 173
qualified government plans and shall be further adjusted for 174
Florida Senate - 2015 SB 172
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CODING: Words stricken are deletions; words underlined are additions.
changes in the cost of living in the manner provided by Internal 175
Revenue Code s. 401(a)(17)(B). For any person who first became a 176
member before the first plan year beginning on or after January 177
1, 1996, the limitation on compensation may not be less than the 178
maximum compensation amount that was allowed to be taken into 179
account under the plan in effect on July 1, 1993, which 180
limitation shall be adjusted for changes in the cost of living 181
since 1989 in the manner provided by Internal Revenue Code s. 182
401(a)(17)(1991). 183
(6)(4) “Creditable service” or “credited service” means the 184
aggregate number of years of service, and fractional parts of 185
years of service, of any firefighter, omitting intervening years 186
and fractional parts of years when such firefighter may not have 187
been employed by the municipality or special fire control 188
district, subject to the following conditions: 189
(a) A No firefighter may not will receive credit for years 190
or fractional parts of years of service if he or she has 191
withdrawn his or her contributions to the fund for those years 192
or fractional parts of years of service, unless the firefighter 193
repays into the fund the amount he or she has withdrawn, plus 194
interest determined by the board. The member has shall have at 195
least 90 days after his or her reemployment to make repayment. 196
(b) A firefighter may voluntarily leave his or her 197
contributions in the fund for a period of 5 years after leaving 198
the employ of the fire department, pending the possibility of 199
being rehired by the same department, without losing credit for 200
the time he or she has participated actively as a firefighter. 201
If the firefighter is not reemployed as a firefighter, with the 202
same department, within 5 years, his or her contributions shall 203
Florida Senate - 2015 SB 172
7-00045-15 2015172__
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CODING: Words stricken are deletions; words underlined are additions.
be returned without interest. 204
(c) Credited service under this chapter shall be provided 205
only for service as a firefighter, as defined in subsection (8), 206
or for military service and does not include credit for any 207
other type of service. A municipality may, by local ordinance, 208
or a special fire control district may, by resolution, may 209
provide for the purchase of credit for military service prior to 210
employment as well as for prior service as a firefighter for 211
some other employer as long as a firefighter is not entitled to 212
receive a benefit for such prior service as a firefighter. For 213
purposes of determining credit for prior service as a 214
firefighter, in addition to service as a firefighter in this 215
state, credit may be given for federal, other state, or county 216
service if the prior service is recognized by the Division of 217
State Fire Marshal as provided in under chapter 633, or the 218
firefighter provides proof to the board of trustees that his or 219
her service is equivalent to the service required to meet the 220
definition of a firefighter under subsection (11) (8). 221
(d) In determining the creditable service of any 222
firefighter, credit for up to 5 years of the time spent in the 223
military service of the Armed Forces of the United States shall 224
be added to the years of actual service if: 225
1. The firefighter is in the active employ of an employer 226
immediately before prior to such service and leaves a position, 227
other than a temporary position, for the purpose of voluntary or 228
involuntary service in the Armed Forces of the United States. 229
2. The firefighter is entitled to reemployment under the 230
provisions of the Uniformed Services Employment and Reemployment 231
Rights Act. 232
Florida Senate - 2015 SB 172
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3. The firefighter returns to his or her employment as a 233
firefighter of the municipality or special fire control district 234
within 1 year after from the date of release from such active 235
service. 236
(7)(5) “Deferred Retirement Option Plan” or “DROP” means a 237
local law plan retirement option in which a firefighter may 238
elect to participate. A firefighter may retire for all purposes 239
of the plan and defer receipt of retirement benefits into a DROP 240
account while continuing employment with his or her employer. 241
However, a firefighter who enters the DROP and who is otherwise 242
eligible to participate may shall not thereby be precluded from 243
participation or continued participation participating, or 244
continuing to participate, in a supplemental plan in existence 245
on, or created after, March 12, 1999 the effective date of this 246
act. 247
(8) “Defined contribution plan” means the component of a 248
local law plan, as provided in s. 175.351(1), to which deposits, 249
if any, are made to provide benefits for firefighters, or for 250
firefighters and police officers if both are included. Such 251
component is an element of a local law plan and exists in 252
conjunction with the defined benefit component that meets 253
minimum benefits and minimum standards. The retirement benefits, 254
if any, of the defined contribution plan shall be provided 255
through individual member accounts in accordance with the 256
applicable provisions of the Internal Revenue Code and related 257
regulations and are limited to the contributions, if any, made 258
into each member’s account and the actual accumulated earnings, 259
net of expenses, earned on the member’s account. 260
(9)(6) “Division” means the Division of Retirement of the 261
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Department of Management Services. 262
(10)(7) “Enrolled actuary” means an actuary who is enrolled 263
under Subtitle C of Title III of the Employee Retirement Income 264
Security Act of 1974 and who is a member of the Society of 265
Actuaries or the American Academy of Actuaries. 266
(11)(a)(8)(a) “Firefighter” means a person employed solely 267
by a constituted fire department of any municipality or special 268
fire control district who is certified as a firefighter as a 269
condition of employment in accordance with s. 633.408 and whose 270
duty it is to extinguish fires, to protect life, or to protect 271
property. The term includes all certified, supervisory, and 272
command personnel whose duties include, in whole or in part, the 273
supervision, training, guidance, and management responsibilities 274
of full-time firefighters, part-time firefighters, or auxiliary 275
firefighters but does not include part-time firefighters or 276
auxiliary firefighters. However, for purposes of this chapter 277
only, the term also includes public safety officers who are 278
responsible for performing both police and fire services, who 279
are certified as police officers or firefighters, and who are 280
certified by their employers to the Chief Financial Officer as 281
participating in this chapter before October 1, 1979. Effective 282
October 1, 1979, public safety officers who have not been 283
certified as participating in this chapter are considered police 284
officers for retirement purposes and are eligible to participate 285
in chapter 185. Any plan may provide that the fire chief has an 286
option to participate, or not, in that plan. 287
(b) “Volunteer firefighter” means any person whose name is 288
carried on the active membership roll of a constituted volunteer 289
fire department or a combination of a paid and volunteer fire 290
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department of any municipality or special fire control district 291
and whose duty it is to extinguish fires, to protect life, and 292
to protect property. Compensation for services rendered by a 293
volunteer firefighter does shall not disqualify him or her as a 294
volunteer. A person may shall not be disqualified as a volunteer 295
firefighter solely because he or she has other gainful 296
employment. Any person who volunteers assistance at a fire but 297
is not an active member of a department described herein is not 298
a volunteer firefighter within the meaning of this paragraph. 299
(12)(9) “Firefighters’ Pension Trust Fund” means a trust 300
fund, by whatever name known, as provided under s. 175.041, for 301
the purpose of assisting municipalities and special fire control 302
districts in establishing and maintaining a retirement plan for 303
firefighters. 304
(13)(10) “Local law municipality” means is any municipality 305
in which there exists a local law plan exists. 306
(14)(11) “Local law plan” means a retirement defined 307
benefit pension plan, which includes both a defined benefit plan 308
component and a defined contribution plan component, for 309
firefighters, or for firefighters and or police officers if both 310
are where included, as described in s. 175.351, established by 311
municipal ordinance, special district resolution, or special act 312
of the Legislature, which enactment sets forth all plan 313
provisions. Local law plan provisions may vary from the 314
provisions of this chapter if, provided that required minimum 315
benefits and minimum standards are met. However, any such 316
variance must shall provide a greater benefit for firefighters. 317
Actuarial valuations of local law plans shall be conducted by an 318
enrolled actuary as provided in s. 175.261(2). 319
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(15)(12) “Local law special fire control district” means is 320
any special fire control district in which there exists a local 321
law plan exists. 322
(16) “Minimum benefits” means the benefits specified in ss. 323
175.021-175.341 and ss. 175.361-175.401. 324
(17) “Minimum standards” means the standards specified in 325
ss. 175.021-175.401. 326
(18)(13) “Property insurance” means property insurance as 327
defined in s. 624.604 and covers real and personal property 328
within the corporate limits of a any municipality, or within the 329
boundaries of a any special fire control district, within the 330
state. The term “multiple peril” means a combination or package 331
policy that includes both property and casualty coverage for a 332
single premium. 333
(19)(14) “Retiree” or “retired firefighter” means a 334
firefighter who has entered retirement status. For the purposes 335
of a plan that includes a Deferred Retirement Option Plan 336
(DROP), a firefighter who enters the DROP is shall be considered 337
a retiree for all purposes of the plan. However, a firefighter 338
who enters the DROP and who is otherwise eligible to participate 339
may shall not thereby be precluded from participation or 340
continued participation participating, or continuing to 341
participate, in a supplemental plan in existence on, or created 342
after, March 12, 1999 the effective date of this act. 343
(20)(15) “Retirement” means a firefighter’s separation from 344
municipal city or fire district employment as a firefighter with 345
immediate eligibility for receipt of benefits under the plan. 346
For purposes of a plan that includes a Deferred Retirement 347
Option Plan (DROP), “retirement” means the date a firefighter 348
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enters the DROP. 349
(21) “Special act plan” means a plan subject to the 350
provisions of this chapter which was created by an act of the 351
Legislature and continues to require an act of the Legislature 352
to alter plan benefits. 353
(22) “Special benefits” means benefits provided in a 354
defined contribution plan for firefighters. 355
(23)(16) “Special fire control district” means a special 356
district, as defined in s. 189.012, established for the purposes 357
of extinguishing fires, protecting life, and protecting property 358
within the incorporated or unincorporated portions of a any 359
county or combination of counties, or within any combination of 360
incorporated and unincorporated portions of a any county or 361
combination of counties. The term does not include any dependent 362
or independent special district, as those terms are defined in 363
s. 189.012, the employees of which are members of the Florida 364
Retirement System pursuant to s. 121.051(1) or (2). 365
(24)(17) “Supplemental plan” means a plan to which deposits 366
are made to provide special extra benefits for firefighters, or 367
for firefighters and police officers if both are where included 368
under this chapter. Such a plan is an element of a local law 369
plan and exists in conjunction with a defined benefit component 370
plan that meets the minimum benefits and minimum standards of 371
this chapter. Any supplemental plan in existence on March 1, 372
2015, shall be deemed to be a defined contribution plan in 373
compliance with s. 175.351(6). 374
(25)(18) “Supplemental plan municipality” means a any local 375
law municipality in which there existed a supplemental plan 376
existed, of any type or nature, as of December 1, 2000. 377
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Section 3. Subsection (7) of section 175.071, Florida 378
Statutes, is amended to read: 379
175.071 General powers and duties of board of trustees.—For 380
any municipality, special fire control district, chapter plan, 381
local law municipality, local law special fire control district, 382
or local law plan under this chapter: 383
(7) To assist the board in meeting its responsibilities 384
under this chapter, the board, if it so elects, may: 385
(a) Employ independent legal counsel at the pension fund’s 386
expense. 387
(b) Employ an independent enrolled actuary, as defined in 388
s. 175.032(7), at the pension fund’s expense. 389
(c) Employ such independent professional, technical, or 390
other advisers as it deems necessary at the pension fund’s 391
expense. 392
393
If the board chooses to use the municipality’s or special 394
district’s legal counsel or actuary, or chooses to use any of 395
the municipality’s or special district’s other professional, 396
technical, or other advisers, it must do so only under terms and 397
conditions acceptable to the board. 398
Section 4. Paragraph (d) of subsection (1) of section 399
175.091, Florida Statutes, is amended to read: 400
175.091 Creation and maintenance of fund.—For any 401
municipality, special fire control district, chapter plan, local 402
law municipality, local law special fire control district, or 403
local law plan under this chapter: 404
(1) The firefighters’ pension trust fund in each 405
municipality and in each special fire control district shall be 406
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created and maintained in the following manner: 407
(d) By mandatory payment by the municipality or special 408
fire control district of a sum equal to the normal cost of and 409
the amount required to fund any actuarial deficiency shown by an 410
actuarial valuation conducted under as provided in part VII of 411
chapter 112 after taking into account the amounts described in 412
paragraphs (b), (c), (e), (f), and (g) and the tax proceeds 413
described in paragraph (a) which are used to fund defined 414
benefit plan benefits. 415
416
Nothing in this section shall be construed to require adjustment 417
of member contribution rates in effect on the date this act 418
becomes a law, including rates that exceed 5 percent of salary, 419
provided that such rates are at least one-half of 1 percent of 420
salary. 421
Section 5. Paragraph (a) of subsection (2) of section 422
175.162, Florida Statutes, is amended to read: 423
175.162 Requirements for retirement.—For any municipality, 424
special fire control district, chapter plan, local law 425
municipality, local law special fire control district, or local 426
law plan under this chapter, any firefighter who completes 10 or 427
more years of creditable service as a firefighter and attains 428
age 55, or completes 25 years of creditable service as a 429
firefighter and attains age 52, and who for such minimum period 430
has been a member of the firefighters’ pension trust fund 431
operating under a chapter plan or local law plan, is eligible 432
for normal retirement benefits. Normal retirement under the plan 433
is retirement from the service of the municipality or special 434
fire control district on or after the normal retirement date. In 435
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such event, payment of retirement income will be governed by the 436
following provisions of this section: 437
(2)(a)1. The amount of monthly retirement income payable to 438
a full-time firefighter who retires on or after his or her 439
normal retirement date shall be an amount equal to the number of 440
his or her years of credited service multiplied by 2.75 2 441
percent of his or her average final compensation as a full-time 442
firefighter. However, if current state contributions pursuant to 443
this chapter are not adequate to fund the additional benefits to 444
meet the minimum requirements in this chapter, only such 445
incremental increases shall be required as state moneys are 446
adequate to provide. Such increments shall be provided as state 447
moneys become available. 448
2. Effective July 1, 2015, a plan that is in compliance 449
with this chapter except that the plan provides a benefit that 450
is less than 2.75 percent of the average final compensation of a 451
full-time firefighter for all years of credited service or 452
provides an effective benefit that is less than 2.75 percent as 453
a result of a maximum benefit limitation: 454
a. Must maintain, at a minimum, the percentage amount or 455
maximum benefit limitation in effect on July 1, 2015, and is not 456
required to increase the benefit to 2.75 percent of the average 457
final compensation of a full-time firefighter for all years of 458
credited service; or 459
b. If the plan changes the percentage amount or maximum 460
benefit limitation to 2.75 percent, or more, of the average 461
final compensation of a full-time firefighter for all years of 462
credited service, the plan may not thereafter decrease the 463
percentage amount or maximum benefit limitation to less than 464
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2.75 percent of the average final compensation of a full-time 465
firefighter for all years of credited service. 466
Section 6. Section 175.351, Florida Statutes, is amended to 467
read: 468
175.351 Municipalities and special fire control districts 469
that have having their own retirement pension plans for 470
firefighters.—For any municipality, special fire control 471
district, local law municipality, local law special fire control 472
district, or local law plan under this chapter, In order for a 473
municipality or municipalities and special fire control district 474
that has its districts with their own retirement plan pension 475
plans for firefighters, or for firefighters and police officers 476
if both are included, to participate in the distribution of the 477
tax fund established under pursuant to s. 175.101, a local law 478
plan plans must meet the minimum benefits and minimum standards, 479
except as provided in the mutual consent provisions in paragraph 480
(1)(g) with respect to the minimum benefits not met as of 481
October 1, 2012 set forth in this chapter. 482
(1) If a municipality has a retirement pension plan for 483
firefighters, or a pension plan for firefighters and police 484
officers if both are included, which in the opinion of the 485
division meets the minimum benefits and minimum standards set 486
forth in this chapter, the board of trustees of the retirement 487
pension plan must, as approved by a majority of firefighters of 488
the municipality, may: 489
(a) place the income from the premium tax in s. 175.101 in 490
such pension plan for the sole and exclusive use of its 491
firefighters, or for firefighters and police officers if both 492
are included, where it shall become an integral part of that 493
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pension plan and shall be used to fund benefits as provided 494
herein. Effective October 1, 2015, for noncollectively bargained 495
service or upon entering into a collective bargaining agreement 496
on or after July 1, 2015: 497
(a) The base premium tax revenues must be used to fund 498
minimum benefits or other retirement benefits in excess of the 499
minimum benefits as determined by the municipality or special 500
fire control district. 501
(b) Of the additional premium tax revenues received which 502
are in excess of the amount received for the 2012 calendar year, 503
50 percent must be used to fund minimum benefits or other 504
retirement benefits in excess of the minimum benefits as 505
determined by the municipality or special fire control district, 506
and 50 percent must be placed in a defined contribution plan to 507
fund special benefits. 508
(c) Additional premium tax revenues not described in 509
paragraph (b) must be used to fund benefits that are not 510
included in the minimum benefits. If the additional premium tax 511
revenues subject to this paragraph exceed the full annual cost 512
of benefits provided through the plan which are in excess of the 513
minimum benefits, any amount in excess of the full annual cost 514
must be used as provided in paragraph (b). 515
(d) Of any accumulations of additional premium tax revenues 516
which have not been allocated to fund benefits in excess of the 517
minimum benefits, 50 percent of the amount of the accumulations 518
must be used to fund special benefits, and 50 percent must be 519
applied to fund any unfunded actuarial liabilities of the plan; 520
provided that any amount of accumulations in excess of the 521
amount required to fund the unfunded actuarial liabilities must 522
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be used to fund special benefits to pay extra benefits to the 523
firefighters included in that pension plan; or 524
(b) Place the income from the premium tax in s. 175.101 in 525
a separate supplemental plan to pay extra benefits to 526
firefighters, or to firefighters and police officers if 527
included, participating in such separate supplemental plan. 528
(e) For a plan created after March 1, 2015, 50 percent of 529
the insurance premium tax revenues must be used to fund defined 530
benefit plan component benefits, with the remainder used to fund 531
defined contribution plan component benefits. 532
(f) If a plan offers benefits in excess of the minimum 533
benefits, such benefits, excluding supplemental plan benefits in 534
effect as of September 30, 2014, may be reduced if the plan 535
continues to meet minimum benefits and minimum standards. The 536
amount of insurance premium tax revenues previously used to fund 537
benefits in excess of minimum benefits, excluding the amount of 538
any additional premium tax revenues distributed to a 539
supplemental plan for the 2012 calendar year, before the 540
reduction must be used as provided in paragraph (b). However, 541
benefits in excess of minimum benefits may not be reduced if a 542
plan does not meet the minimum percentage amount of 2.75 percent 543
of the average final compensation of a full-time firefighter, as 544
required by s. 175.162(2)(a)1., or provides an effective benefit 545
that is below 2.75 percent as a result of a maximum benefit 546
limitation as described in s. 175.162(2)(a)2. 547
(g) Notwithstanding paragraphs (a)-(f), the use of premium 548
tax revenues, including any accumulations of additional premium 549
tax revenues which have not been allocated to fund benefits in 550
excess of minimum benefits, may deviate from the provisions of 551
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this subsection by mutual consent of the members’ collective 552
bargaining representative or, if there is no representative, by 553
a majority of the firefighter members of the fund, and by 554
consent of the municipality or special fire control district, 555
provided that the plan continues to meet minimum benefits and 556
minimum standards; however, a plan that operates pursuant to 557
this paragraph which does not meet minimum benefits as of 558
October 1, 2012, may continue to provide the benefits that do 559
not meet the minimum benefits at the same level as was provided 560
as of October 1, 2012, and all other benefit levels must 561
continue to meet the minimum benefits. Such mutually agreed 562
deviation must continue until modified or revoked by subsequent 563
mutual consent of the members’ collective bargaining 564
representative or, if none, by a majority of the firefighter 565
members of the fund, and the municipality or special fire 566
control district. An existing arrangement for the use of premium 567
tax revenues contained within a special act plan or a plan 568
within a supplemental plan municipality is considered, as of 569
July 1, 2015, to be a deviation for which mutual consent has 570
been granted. 571
(2) The premium tax provided by this chapter must shall in 572
all cases be used in its entirety to provide retirement extra 573
benefits to firefighters, or to firefighters and police officers 574
if both are included. However, local law plans in effect on 575
October 1, 1998, must comply with the minimum benefit provisions 576
of this chapter only to the extent that additional premium tax 577
revenues become available to incrementally fund the cost of such 578
compliance as provided in s. 175.162(2)(a). If a plan is in 579
compliance with such minimum benefit provisions, as subsequent 580
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additional premium tax revenues become available, they must be 581
used to provide extra benefits. Local law plans created by 582
special act before May 27, 1939, are deemed to comply with this 583
chapter. For the purpose of this chapter, the term: 584
(a) “Additional premium tax revenues” means revenues 585
received by a municipality or special fire control district 586
pursuant to s. 175.121 which exceed that amount received for 587
calendar year 1997. 588
(b) “Extra benefits” means benefits in addition to or 589
greater than those provided to general employees of the 590
municipality and in addition to those in existence for 591
firefighters on March 12, 1999. 592
(3) A retirement plan or amendment to a retirement plan may 593
not be proposed for adoption unless the proposed plan or 594
amendment contains an actuarial estimate of the costs involved. 595
Such proposed plan or proposed plan change may not be adopted 596
without the approval of the municipality, special fire control 597
district, or, where required permitted, the Legislature. Copies 598
of the proposed plan or proposed plan change and the actuarial 599
impact statement of the proposed plan or proposed plan change 600
shall be furnished to the division before the last public 601
hearing on the proposal is held thereon. Such statement must 602
also indicate whether the proposed plan or proposed plan change 603
is in compliance with s. 14, Art. X of the State Constitution 604
and those provisions of part VII of chapter 112 which are not 605
expressly provided in this chapter. Notwithstanding any other 606
provision, only those local law plans created by special act of 607
legislation before May 27, 1939, are deemed to meet the minimum 608
benefits and minimum standards only in this chapter. 609
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(4) Notwithstanding any other provision, with respect to 610
any supplemental plan municipality: 611
(a) A local law plan and a supplemental plan may continue 612
to use their definition of compensation or salary in existence 613
on March 12, 1999. 614
(b) Section 175.061(1)(b) does not apply, and a local law 615
plan and a supplemental plan shall continue to be administered 616
by a board or boards of trustees numbered, constituted, and 617
selected as the board or boards were numbered, constituted, and 618
selected on December 1, 2000. 619
(c) The election set forth in paragraph (1)(b) is deemed to 620
have been made. 621
(5) The retirement plan setting forth the benefits and the 622
trust agreement, if any, covering the duties and 623
responsibilities of the trustees and the regulations of the 624
investment of funds must be in writing, and copies made 625
available to the participants and to the general public. 626
(6) In addition to the defined benefit component of the 627
local law plan, each plan sponsor must have a defined 628
contribution plan component within the local law plan by October 629
1, 2015, for noncollectively bargained service, upon entering 630
into a collective bargaining agreement on or after July 1, 2015, 631
or upon the creation date of a new participating plan. Depending 632
upon the application of subsection (1), a defined contribution 633
component may or may not receive any funding. 634
(7) Notwithstanding any other provision of this chapter, a 635
municipality or special fire control district that has 636
implemented or proposed changes to a local law plan based on the 637
municipality’s or district’s reliance on an interpretation of 638
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this chapter by the Department of Management Services on or 639
after August 14, 2012, and before March 4, 2015, may continue 640
the implemented changes or continue to implement proposed 641
changes. Such reliance must be evidenced by a written collective 642
bargaining proposal or agreement, or formal correspondence 643
between the municipality or district and the Department of 644
Management Services which describes the specific changes to the 645
local law plan, with the initial proposal, agreement, or 646
correspondence from the municipality or district dated before 647
March 4, 2015. Changes to the local law plan which are otherwise 648
contrary to minimum benefits and minimum standards may continue 649
in effect until the earlier of October 1, 2018, or the effective 650
date of a collective bargaining agreement that is contrary to 651
the changes to the local law plan. 652
Section 7. Subsection (2) of section 185.01, Florida 653
Statutes, is amended to read: 654
185.01 Legislative declaration.— 655
(2) This chapter hereby establishes, for all municipal 656
pension plans now or hereinafter provided for under this 657
chapter, including chapter plans and local law plans, minimum 658
benefits and minimum standards for the operation and funding of 659
such plans, hereinafter referred to as municipal police 660
officers’ retirement trust funds, which must be met as 661
conditions precedent to the plans or plan sponsors receiving a 662
distribution of insurance premium tax revenues under s. 185.10. 663
The Minimum benefits and minimum standards for each plan set 664
forth in this chapter may not be diminished by local ordinance 665
or by special act of the Legislature and may not, nor may the 666
minimum benefits or minimum standards be reduced or offset by 667
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any other local, state, or federal plan that includes may 668
include police officers in its operation, except as provided 669
under s. 112.65. 670
Section 8. Section 185.02, Florida Statutes, is amended to 671
read: 672
185.02 Definitions.—For any municipality, chapter plan, 673
local law municipality, or local law plan under this chapter, 674
the term following words and phrases as used in this chapter 675
shall have the following meanings, unless a different meaning is 676
plainly required by the context: 677
(1) “Additional premium tax revenues” means revenues 678
received by a municipality pursuant to s. 185.10 which exceed 679
base premium tax revenues. 680
(2)(1) “Average final compensation” means one-twelfth of 681
the average annual compensation of the 5 best years of the last 682
10 years of creditable service before prior to retirement, 683
termination, or death. 684
(3) “Base premium tax revenues” means: 685
(a) For a local law plan in effect on October 1, 1998, the 686
revenues received by a municipality pursuant to s. 185.10 for 687
the 1997 calendar year. 688
(b) For a local law plan created between October 1, 1998, 689
and March 1, 2015, inclusive, the revenues received by a 690
municipality pursuant to s. 185.10 based upon the tax 691
collections during the second calendar year of participation. 692
(4)(2) “Casualty insurance” means automobile public 693
liability and property damage insurance to be applied at the 694
place of residence of the owner, or if the subject is a 695
commercial vehicle, to be applied at the place of business of 696
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the owner; automobile collision insurance; fidelity bonds; 697
burglary and theft insurance; and plate glass insurance. The 698
term “multiple peril” means a combination or package policy that 699
includes both property coverage and casualty coverage for a 700
single premium. 701
(5)(3) “Chapter plan” means a separate defined benefit 702
pension plan for police officers which incorporates by reference 703
the provisions of this chapter and has been adopted by the 704
governing body of a municipality as provided in s. 185.08. 705
Except as may be specifically authorized in this chapter, the 706
provisions of a chapter plan may not differ from the plan 707
provisions set forth in ss. 185.01-185.341 and ss. 185.37-708
185.39. Actuarial valuations of chapter plans shall be conducted 709
by the division as provided by s. 185.221(1)(b). 710
(6)(4) “Compensation” or “salary” means, for 711
noncollectively bargained service earned before July 1, 2011, or 712
for service earned under collective bargaining agreements in 713
place before July 1, 2011, the total cash remuneration including 714
“overtime” paid by the primary employer to a police officer for 715
services rendered, but not including any payments for extra duty 716
or special detail work performed on behalf of a second party 717
employer. Overtime may be limited before July 1, 2011, in a 718
local law plan by the plan provisions A local law plan may limit 719
the amount of overtime payments which can be used for retirement 720
benefit calculation purposes; however, such overtime limit may 721
not be less than 300 hours per officer per calendar year. For 722
noncollectively bargained service earned on or after July 1, 723
2011, or for service earned under collective bargaining 724
agreements entered into on or after July 1, 2011, the term has 725
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the same meaning except that when calculating retirement 726
benefits, up to 300 hours per year in overtime compensation may 727
be included as specified in the plan or collective bargaining 728
agreement, but payments for accrued unused sick or annual leave 729
may not be included. 730
(a) Any retirement trust fund or plan that meets the 731
requirements of this chapter does not, solely by virtue of this 732
subsection, reduce or diminish the monthly retirement income 733
otherwise payable to each police officer covered by the 734
retirement trust fund or plan. 735
(b) The member’s compensation or salary contributed as 736
employee-elective salary reductions or deferrals to any salary 737
reduction, deferred compensation, or tax-sheltered annuity 738
program authorized under the Internal Revenue Code shall be 739
deemed to be the compensation or salary the member would receive 740
if he or she were not participating in such program and shall be 741
treated as compensation for retirement purposes under this 742
chapter. 743
(c) For any person who first becomes a member in any plan 744
year beginning on or after January 1, 1996, compensation for 745
that plan year may not include any amounts in excess of the 746
Internal Revenue Code s. 401(a)(17) limitation, as amended by 747
the Omnibus Budget Reconciliation Act of 1993, which limitation 748
of $150,000 shall be adjusted as required by federal law for 749
qualified government plans and shall be further adjusted for 750
changes in the cost of living in the manner provided by Internal 751
Revenue Code s. 401(a)(17)(B). For any person who first became a 752
member before the first plan year beginning on or after January 753
1, 1996, the limitation on compensation may not be less than the 754
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maximum compensation amount that was allowed to be taken into 755
account under the plan as in effect on July 1, 1993, which 756
limitation shall be adjusted for changes in the cost of living 757
since 1989 in the manner provided by Internal Revenue Code s. 758
401(a)(17)(1991). 759
(7)(5) “Creditable service” or “credited service” means the 760
aggregate number of years of service and fractional parts of 761
years of service of any police officer, omitting intervening 762
years and fractional parts of years when such police officer may 763
not have been employed by the municipality subject to the 764
following conditions: 765
(a) A No police officer may not will receive credit for 766
years or fractional parts of years of service if he or she has 767
withdrawn his or her contributions to the fund for those years 768
or fractional parts of years of service, unless the police 769
officer repays into the fund the amount he or she has withdrawn, 770
plus interest as determined by the board. The member has shall 771
have at least 90 days after his or her reemployment to make 772
repayment. 773
(b) A police officer may voluntarily leave his or her 774
contributions in the fund for a period of 5 years after leaving 775
the employ of the police department, pending the possibility of 776
his or her being rehired by the same department, without losing 777
credit for the time he or she has participated actively as a 778
police officer. If he or she is not reemployed as a police 779
officer with the same department within 5 years, his or her 780
contributions shall be returned to him or her without interest. 781
(c) Credited service under this chapter shall be provided 782
only for service as a police officer, as defined in subsection 783
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(11), or for military service and may not include credit for any 784
other type of service. A municipality may, by local ordinance, 785
may provide for the purchase of credit for military service 786
occurring before employment as well as prior service as a police 787
officer for some other employer as long as the police officer is 788
not entitled to receive a benefit for such other prior service 789
as a police officer. For purposes of determining credit for 790
prior service, in addition to service as a police officer in 791
this state, credit may be given for federal, other state, or 792
county service as long as such service is recognized by the 793
Criminal Justice Standards and Training Commission within the 794
Department of Law Enforcement as provided in under chapter 943 795
or the police officer provides proof to the board of trustees 796
that such service is equivalent to the service required to meet 797
the definition of a police officer under subsection (16) (11). 798
(d) In determining the creditable service of a any police 799
officer, credit for up to 5 years of the time spent in the 800
military service of the Armed Forces of the United States shall 801
be added to the years of actual service, if: 802
1. The police officer is in the active employ of the 803
municipality before prior to such service and leaves a position, 804
other than a temporary position, for the purpose of voluntary or 805
involuntary service in the Armed Forces of the United States. 806
2. The police officer is entitled to reemployment under the 807
provisions of the Uniformed Services Employment and Reemployment 808
Rights Act. 809
3. The police officer returns to his or her employment as a 810
police officer of the municipality within 1 year after from the 811
date of his or her release from such active service. 812
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(8)(6) “Deferred Retirement Option Plan” or “DROP” means a 813
local law plan retirement option in which a police officer may 814
elect to participate. A police officer may retire for all 815
purposes of the plan and defer receipt of retirement benefits 816
into a DROP account while continuing employment with his or her 817
employer. However, a police officer who enters the DROP and who 818
is otherwise eligible to participate may shall not thereby be 819
precluded from participation or continued participation 820
participating, or continuing to participate, in a supplemental 821
plan in existence on, or created after, March 12, 1999 the 822
effective date of this act. 823
(9) “Defined contribution plan” means the component of a 824
local law plan, as provided in s. 185.35(1), to which deposits, 825
if any, are made to provide benefits for police officers, or for 826
police officers and firefighters if both are included. Such 827
component is an element of a local law plan and exists in 828
conjunction with the defined benefit component that meets 829
minimum benefits and minimum standards. The retirement benefits, 830
if any, of the defined contribution plan shall be provided 831
through individual member accounts in accordance with the 832
applicable provisions of the Internal Revenue Code and related 833
regulations and are limited to the contributions, if any, made 834
into each member’s account and the actual accumulated earnings, 835
net of expenses, earned on the member’s account. 836
(10)(7) “Division” means the Division of Retirement of the 837
Department of Management Services. 838
(11)(8) “Enrolled actuary” means an actuary who is enrolled 839
under Subtitle C of Title III of the Employee Retirement Income 840
Security Act of 1974 and who is a member of the Society of 841
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Actuaries or the American Academy of Actuaries. 842
(12)(9) “Local law municipality” means is any municipality 843
in which there exists a local law plan exists. 844
(13)(10) “Local law plan” means a retirement defined 845
benefit pension plan, that includes both a defined benefit plan 846
component and a defined contribution plan component, for police 847
officers, or for police officers and firefighters if both are, 848
where included, as described in s. 185.35, established by 849
municipal ordinance or special act of the Legislature, which 850
enactment sets forth all plan provisions. Local law plan 851
provisions may vary from the provisions of this chapter if, 852
provided that required minimum benefits and minimum standards 853
are met. However, any such variance must shall provide a greater 854
benefit for police officers. Actuarial valuations of local law 855
plans shall be conducted by an enrolled actuary as provided in 856
s. 185.221(2)(b). 857
(14) “Minimum benefits” means the benefits specified in ss. 858
185.01-185.341 and ss. 185.37-185.50. 859
(15) “Minimum standards” means the standards specified in 860
ss. 185.01-185.50. 861
(16)(11) “Police officer” means any person who is elected, 862
appointed, or employed full time by a any municipality, who is 863
certified or required to be certified as a law enforcement 864
officer in compliance with s. 943.1395, who is vested with 865
authority to bear arms and make arrests, and whose primary 866
responsibility is the prevention and detection of crime or the 867
enforcement of the penal, criminal, traffic, or highway laws of 868
the state. The term This definition includes all certified 869
supervisory and command personnel whose duties include, in whole 870
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or in part, the supervision, training, guidance, and management 871
responsibilities of full-time law enforcement officers, part-872
time law enforcement officers, or auxiliary law enforcement 873
officers, but does not include part-time law enforcement 874
officers or auxiliary law enforcement officers as those terms 875
the same are defined in s. 943.10(6) and (8), respectively. For 876
the purposes of this chapter only, the term also includes 877
“police officer” also shall include a public safety officer who 878
is responsible for performing both police and fire services. Any 879
plan may provide that the police chief shall have an option to 880
participate, or not, in that plan. 881
(17)(12) “Police Officers’ Retirement Trust Fund” means a 882
trust fund, by whatever name known, as provided under s. 185.03 883
for the purpose of assisting municipalities in establishing and 884
maintaining a retirement plan for police officers. 885
(18)(13) “Retiree” or “retired police officer” means a 886
police officer who has entered retirement status. For the 887
purposes of a plan that includes a Deferred Retirement Option 888
Plan (DROP), a police officer who enters the DROP is shall be 889
considered a retiree for all purposes of the plan. However, a 890
police officer who enters the DROP and who is otherwise eligible 891
to participate may shall not thereby be precluded from 892
participation or continued participation participating, or 893
continuing to participate, in a supplemental plan in existence 894
on, or created after, March 12, 1999 the effective date of this 895
act. 896
(19)(14) “Retirement” means a police officer’s separation 897
from municipal city employment as a police officer with 898
immediate eligibility for receipt of benefits under the plan. 899
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For purposes of a plan that includes a Deferred Retirement 900
Option Plan (DROP), “retirement” means the date a police officer 901
enters the DROP. 902
(20) “Special act plan” means a plan subject to the 903
provisions of this chapter which was created by an act of the 904
Legislature and continues to require an act of the Legislature 905
to alter plan benefits. 906
(21) “Special benefits” means benefits provided in a 907
defined contribution plan for police officers. 908
(22)(15) “Supplemental plan” means a plan to which deposits 909
of the premium tax moneys as provided in s. 185.08 are made to 910
provide special extra benefits to police officers, or police 911
officers and firefighters if both are where included, under this 912
chapter. Such a plan is an element of a local law plan and 913
exists in conjunction with a defined benefit component plan that 914
meets the minimum benefits and minimum standards of this 915
chapter. Any supplemental plan in existence on March 1, 2015, 916
shall be deemed to be a defined contribution plan in compliance 917
with s. 185.35(6). 918
(23)(16) “Supplemental plan municipality” means a any local 919
law municipality in which there existed a supplemental plan 920
existed as of December 1, 2000. 921
Section 9. Subsection (6) of section 185.06, Florida 922
Statutes, is amended to read: 923
185.06 General powers and duties of board of trustees.—For 924
any municipality, chapter plan, local law municipality, or local 925
law plan under this chapter: 926
(6) To assist the board in meeting its responsibilities 927
under this chapter, the board, if it so elects, may: 928
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(a) Employ independent legal counsel at the pension fund’s 929
expense. 930
(b) Employ an independent enrolled actuary, as defined in 931
s. 185.02(8), at the pension fund’s expense. 932
(c) Employ such independent professional, technical, or 933
other advisers as it deems necessary at the pension fund’s 934
expense. 935
936
If the board chooses to use the municipality’s or special 937
district’s legal counsel or actuary, or chooses to use any of 938
the municipality’s other professional, technical, or other 939
advisers, it must do so only under terms and conditions 940
acceptable to the board. 941
Section 10. Paragraph (d) of subsection (1) of section 942
185.07, Florida Statutes, is amended to read: 943
185.07 Creation and maintenance of fund.—For any 944
municipality, chapter plan, local law municipality, or local law 945
plan under this chapter: 946
(1) The municipal police officers’ retirement trust fund in 947
each municipality described in s. 185.03 shall be created and 948
maintained in the following manner: 949
(d) By payment by the municipality or other sources of a 950
sum equal to the normal cost and the amount required to fund any 951
actuarial deficiency shown by an actuarial valuation conducted 952
under as provided in part VII of chapter 112 after taking into 953
account the amounts described in paragraphs (b), (c), (e), (f), 954
and (g) and the tax proceeds described in paragraph (a) which 955
are used to fund defined benefit plan benefits. 956
957
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Nothing in this section shall be construed to require adjustment 958
of member contribution rates in effect on the date this act 959
becomes a law, including rates that exceed 5 percent of salary, 960
provided that such rates are at least one-half of 1 percent of 961
salary. 962
Section 11. Subsection (2) of section 185.16, Florida 963
Statutes, is amended to read: 964
185.16 Requirements for retirement.—For any municipality, 965
chapter plan, local law municipality, or local law plan under 966
this chapter, any police officer who completes 10 or more years 967
of creditable service as a police officer and attains age 55, or 968
completes 25 years of creditable service as a police officer and 969
attains age 52, and for such period has been a member of the 970
retirement fund is eligible for normal retirement benefits. 971
Normal retirement under the plan is retirement from the service 972
of the city on or after the normal retirement date. In such 973
event, for chapter plans and local law plans, payment of 974
retirement income will be governed by the following provisions 975
of this section: 976
(2)(a) The amount of the monthly retirement income payable 977
to a police officer who retires on or after his or her normal 978
retirement date shall be an amount equal to the number of the 979
police officer’s years of credited service multiplied by 2.75 2 980
percent of his or her average final compensation. However, if 981
current state contributions pursuant to this chapter are not 982
adequate to fund the additional benefits to meet the minimum 983
requirements in this chapter, only increment increases shall be 984
required as state moneys are adequate to provide. Such 985
increments shall be provided as state moneys become available. 986
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(b) Effective July 1, 2015, a plan that is in compliance 987
with this chapter except that the plan provides a benefit that 988
is less than 2.75 percent of the average final compensation of a 989
police officer for all years of credited service or provides an 990
effective benefit that is less than 2.75 percent as a result of 991
a maximum benefit limitation: 992
1. Must maintain, at a minimum, the percentage amount or 993
maximum benefit limitation in effect on July 1, 2015, and is not 994
required to increase the benefit to 2.75 percent of the average 995
final compensation of a police officer for all years of credited 996
service; or 997
2. If the plan changes the percentage amount or maximum 998
benefit limitation to 2.75 percent, or more, of the average 999
final compensation of a police officer for all years of credited 1000
service, the plan may not thereafter decrease the percentage 1001
amount or the maximum benefit limitation to less than 2.75 1002
percent of the average final compensation of a police officer 1003
for all years of credited service. 1004
Section 12. Section 185.35, Florida Statutes, is amended to 1005
read: 1006
185.35 Municipalities that have having their own retirement 1007
pension plans for police officers.—For any municipality, chapter 1008
plan, local law municipality, or local law plan under this 1009
chapter, In order for a municipality that has its municipalities 1010
with their own retirement plan pension plans for police 1011
officers, or for police officers and firefighters if both are 1012
included, to participate in the distribution of the tax fund 1013
established under pursuant to s. 185.08, a local law plan plans 1014
must meet the minimum benefits and minimum standards, except as 1015
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provided in the mutual consent provisions in paragraph (1)(g) 1016
with respect to the minimum benefits not met as of October 1, 1017
2012. set forth in this chapter: 1018
(1) If a municipality has a retirement pension plan for 1019
police officers, or for police officers and firefighters if both 1020
are included, which, in the opinion of the division, meets the 1021
minimum benefits and minimum standards set forth in this 1022
chapter, the board of trustees of the retirement pension plan 1023
must, as approved by a majority of police officers of the 1024
municipality, may: 1025
(a) place the income from the premium tax in s. 185.08 in 1026
such pension plan for the sole and exclusive use of its police 1027
officers, or its police officers and firefighters if both are 1028
included, where it shall become an integral part of that pension 1029
plan and shall be used to fund benefits as provided herein. 1030
Effective October 1, 2015, for noncollectively bargained service 1031
or upon entering into a collective bargaining agreement on or 1032
after July 1, 2015: 1033
(a) The base premium tax revenues must be used to fund 1034
minimum benefits or other retirement benefits in excess of the 1035
minimum benefits as determined by the municipality. 1036
(b) Of the additional premium tax revenues received which 1037
are in excess of the amount received for the 2012 calendar year, 1038
50 percent must be used to fund minimum benefits or other 1039
retirement benefits in excess of the minimum benefits as 1040
determined by the municipality, and 50 percent must be placed in 1041
a defined contribution plan to fund special benefits. 1042
(c) Additional premium tax revenues not described in 1043
paragraph (b) must be used to fund benefits that are not 1044
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included in the minimum benefits. If the additional premium tax 1045
revenues subject to this paragraph exceed the full annual cost 1046
of benefits provided through the plan which are in excess of the 1047
minimum benefits, any amount in excess of the full annual cost 1048
must be used as provided in paragraph (b). 1049
(d) Of any accumulations of additional premium tax revenues 1050
which have not been allocated to fund benefits in excess of the 1051
minimum benefits, 50 percent of the amount of the accumulations 1052
must be used to fund special benefits and 50 percent must be 1053
applied to fund any unfunded actuarial liabilities of the plan; 1054
provided that any amount of accumulations in excess of the 1055
amount required to fund the unfunded actuarial liabilities must 1056
be used to fund special benefits pay extra benefits to the 1057
police officers included in that pension plan; or 1058
(b) May place the income from the premium tax in s. 185.08 1059
in a separate supplemental plan to pay extra benefits to the 1060
police officers, or police officers and firefighters if 1061
included, participating in such separate supplemental plan. 1062
(e) For a plan created after March 1, 2015, 50 percent of 1063
the insurance premium tax revenues must be used to fund defined 1064
benefit plan component benefits, with the remainder used to fund 1065
defined contribution plan component benefits. 1066
(f) If a plan offers benefits in excess of the minimum 1067
benefits, such benefits, excluding supplemental plan benefits in 1068
effect as of September 30, 2014, may be reduced if the plan 1069
continues to meet minimum benefits and the minimum standards. 1070
The amount of insurance premium tax revenues previously used to 1071
fund benefits in excess of the minimum benefits, excluding the 1072
amount of any additional premium tax revenues distributed to a 1073
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supplemental plan for the 2012 calendar year, before the 1074
reduction must be used as provided in paragraph (b). However, 1075
benefits in excess of the minimum benefits may not be reduced if 1076
a plan does not meet the minimum percentage amount of 2.75 1077
percent of the average final compensation of a police officer or 1078
provides an effective benefit that is less than 2.75 percent as 1079
a result of a maximum benefit limitation, as described in s. 1080
185.16(2)(b). 1081
(g) Notwithstanding paragraphs (a)-(f), the use of premium 1082
tax revenues, including any accumulations of additional premium 1083
tax revenues which have not been allocated to fund benefits in 1084
excess of the minimum benefits, may deviate from the provisions 1085
of this subsection by mutual consent of the members’ collective 1086
bargaining representative or, if none, by a majority of the 1087
police officer members of the fund, and by consent of the 1088
municipality, provided that the plan continues to meet minimum 1089
benefits and minimum standards; however, a plan that operates 1090
pursuant to this paragraph which does not meet the minimum 1091
benefits as of October 1, 2012, may continue to provide the 1092
benefits that do not meet the minimum benefits at the same level 1093
as was provided as of October 1, 2012, and all other benefit 1094
levels must continue to meet the minimum benefits. Such mutually 1095
agreed deviation must continue until modified or revoked by 1096
subsequent mutual consent of the members’ collective bargaining 1097
representative or, if none, by a majority of the police officer 1098
members of the fund, and the municipality. An existing 1099
arrangement for the use of premium tax revenues contained within 1100
a special act plan or a plan within a supplemental plan 1101
municipality is considered, as of July 1, 2015, to be a 1102
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deviation for which mutual consent has been granted. 1103
(2) The premium tax provided by this chapter must shall in 1104
all cases be used in its entirety to provide retirement extra 1105
benefits to police officers, or to police officers and 1106
firefighters if both are included. However, local law plans in 1107
effect on October 1, 1998, must comply with the minimum benefit 1108
provisions of this chapter only to the extent that additional 1109
premium tax revenues become available to incrementally fund the 1110
cost of such compliance as provided in s. 185.16(2). If a plan 1111
is in compliance with such minimum benefit provisions, as 1112
subsequent additional tax revenues become available, they shall 1113
be used to provide extra benefits. Local law plans created by 1114
special act before May 27, 1939, shall be deemed to comply with 1115
this chapter. For the purpose of this chapter, the term: 1116
(a) “Additional premium tax revenues” means revenues 1117
received by a municipality pursuant to s. 185.10 which exceed 1118
the amount received for calendar year 1997. 1119
(b) “Extra benefits” means benefits in addition to or 1120
greater than those provided to general employees of the 1121
municipality and in addition to those in existence for police 1122
officers on March 12, 1999. 1123
(3) A retirement plan or amendment to a retirement plan may 1124
not be proposed for adoption unless the proposed plan or 1125
amendment contains an actuarial estimate of the costs involved. 1126
Such proposed plan or proposed plan change may not be adopted 1127
without the approval of the municipality or, where required 1128
permitted, the Legislature. Copies of the proposed plan or 1129
proposed plan change and the actuarial impact statement of the 1130
proposed plan or proposed plan change shall be furnished to the 1131
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division before the last public hearing on the proposal is held 1132
thereon. Such statement must also indicate whether the proposed 1133
plan or proposed plan change is in compliance with s. 14, Art. X 1134
of the State Constitution and those provisions of part VII of 1135
chapter 112 which are not expressly provided in this chapter. 1136
Notwithstanding any other provision, only those local law plans 1137
created by special act of legislation before May 27, 1939, are 1138
deemed to meet the minimum benefits and minimum standards only 1139
in this chapter. 1140
(4) Notwithstanding any other provision, with respect to 1141
any supplemental plan municipality: 1142
(a) Section 185.02(6)(a) 185.02(4)(a) does not apply, and a 1143
local law plan and a supplemental plan may continue to use their 1144
definition of compensation or salary in existence on March 12, 1145
1999. 1146
(b) A local law plan and a supplemental plan must continue 1147
to be administered by a board or boards of trustees numbered, 1148
constituted, and selected as the board or boards were numbered, 1149
constituted, and selected on December 1, 2000. 1150
(c) The election set forth in paragraph (1)(b) is deemed to 1151
have been made. 1152
(5) The retirement plan setting forth the benefits and the 1153
trust agreement, if any, covering the duties and 1154
responsibilities of the trustees and the regulations of the 1155
investment of funds must be in writing and copies made available 1156
to the participants and to the general public. 1157
(6) In addition to the defined benefit component of the 1158
local law plan, each plan sponsor must have a defined 1159
contribution plan component within the local law plan by October 1160
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1, 2015, for noncollectively bargained service, upon entering 1161
into a collective bargaining agreement on or after July 1, 2015, 1162
or upon the creation date of a new participating plan. Depending 1163
upon the application of subsection (1), a defined contribution 1164
component may or may not receive any funding. 1165
(7) Notwithstanding any other provision of this chapter, a 1166
municipality that has implemented or proposed changes to a local 1167
law plan based on the municipality’s reliance on an 1168
interpretation of this chapter by the Department of Management 1169
Services on or after August 14, 2012, and before March 4, 2015, 1170
may continue the implemented changes or continue to implement 1171
proposed changes. Such reliance must be evidenced by a written 1172
collective bargaining proposal or agreement, or formal 1173
correspondence between the municipality and the Department of 1174
Management Services which describes the specific changes to the 1175
local law plan, with the initial proposal, agreement, or 1176
correspondence from the municipality dated before March 4, 2015. 1177
Changes to the local law plan which are otherwise contrary to 1178
minimum benefits and minimum standards may continue in effect 1179
until the earlier of October 1, 2018, or the effective date of a 1180
collective bargaining agreement that is contrary to the changes 1181
to the local law plan. 1182
Section 13. The Legislature finds that a proper and 1183
legitimate state purpose is served when employees and retirees 1184
of this state and its political subdivisions, and the 1185
dependents, survivors, and beneficiaries of such employees and 1186
retirees, are extended the basic protections afforded by 1187
governmental retirement systems that provide fair and adequate 1188
benefits and that are managed, administered, and funded in an 1189
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actuarially sound manner as required under s. 14, Article X of 1190
the State Constitution and part VII of chapter 112, Florida 1191
Statutes. Therefore, the Legislature determines and declares 1192
that this act fulfills an important state interest. 1193
Section 14. This act shall take effect July 1, 2015. 1194
Florida Senate - 2015 SB 242
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A bill to be entitled 1
An act relating to publicly funded retirement plans; 2
amending s. 112.63, F.S.; requiring that actuarial 3
reports for certain retirement plans include mortality 4
tables; amending s. 112.664, F.S.; revising 5
information to be included in a defined benefit system 6
or plan’s annual report to the Department of 7
Management Services; providing a declaration of 8
important state interest; providing an effective date. 9
10
Be It Enacted by the Legislature of the State of Florida: 11
12
Section 1. Subsection (1) of section 112.63, Florida 13
Statutes, is amended to read: 14
112.63 Actuarial reports and statements of actuarial 15
impact; review.— 16
(1) Each retirement system or plan subject to the 17
provisions of this act shall have regularly scheduled actuarial 18
reports prepared and certified by an enrolled actuary. The 19
actuarial report shall consist of, but is shall not be limited 20
to, the following: 21
(a) Adequacy of employer and employee contribution rates in 22
meeting levels of employee benefits provided in the system and 23
changes, if any, needed in such rates to achieve or preserve a 24
level of funding deemed adequate to enable payment through the 25
indefinite future of the benefit amounts prescribed by the 26
system, which shall include a valuation of present assets, based 27
on statement value, and prospective assets and liabilities of 28
the system and the extent of unfunded accrued liabilities, if 29
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any. 30
(b) A plan to amortize any unfunded liability pursuant to 31
s. 112.64 and a description of actions taken to reduce the 32
unfunded liability. 33
(c) A description and explanation of actuarial assumptions. 34
(d) A schedule illustrating the amortization of unfunded 35
liabilities, if any. 36
(e) A comparative review illustrating the actual salary 37
increases granted and the rate of investment return realized 38
over the 3-year period preceding the actuarial report with the 39
assumptions used in both the preceding and current actuarial 40
reports. 41
(f) Mortality tables that use mortality methodology 42
consistent with the most recently published actuarial valuation 43
report of the Florida Retirement System. 44
(g)(f) A statement by the enrolled actuary that the report 45
is complete and accurate and that in his or her opinion the 46
techniques and assumptions used are reasonable and meet the 47
requirements and intent of this act. 48
49
The actuarial cost methods utilized for establishing the amount 50
of the annual actuarial normal cost to support the promised 51
benefits shall only be those methods approved in the Employee 52
Retirement Income Security Act of 1974 and as permitted under 53
regulations prescribed by the Secretary of the Treasury. 54
Section 2. Subsection (1) of section 112.664, Florida 55
Statutes, is amended to read: 56
112.664 Reporting standards for defined benefit retirement 57
plans or systems.— 58
Florida Senate - 2015 SB 242
22-00288-15 2015242__
Page 3 of 4
CODING: Words stricken are deletions; words underlined are additions.
(1) In addition to the other reporting requirements of this 59
part, within 60 days after receipt of the certified actuarial 60
report submitted after the close of the plan year that ends on 61
or after June 30, 2014, and thereafter in each year required 62
under s. 112.63(2), each defined benefit retirement system or 63
plan, excluding the Florida Retirement System, shall prepare and 64
electronically report the following information to the 65
Department of Management Services in a format prescribed by the 66
department: 67
(a) Annual financial statements that comply are in 68
compliance with the requirements of the Governmental Accounting 69
Standards Government Accounting and Standard Board’s Statement 70
No. 67, titled Financial Reporting for Pension Plans, and 71
Statement No. 68, titled Accounting and Financial Reporting for 72
Pensions, using mortality tables that use mortality methodology 73
consistent with the most recently published actuarial valuation 74
report of the Florida Retirement System RP-2000 Combined Healthy 75
Participant Mortality Tables, by gender, with generational 76
projection by Scale AA. 77
(b) Annual financial statements similar to those required 78
under paragraph (a), but which use an assumed rate of return on 79
investments and an assumed discount rate that are equal to 200 80
basis points less than the plan’s assumed rate of return. 81
(c) Information indicating the number of months or years 82
for which the current market value of assets are adequate to 83
sustain the payment of expected retirement benefits as 84
determined in the plan’s latest valuation and under the 85
financial statements prepared pursuant to paragraphs (a) and 86
(b). 87
Florida Senate - 2015 SB 242
22-00288-15 2015242__
Page 4 of 4
CODING: Words stricken are deletions; words underlined are additions.
(d) Information indicating the recommended contributions to 88
the plan based on the plan’s latest valuation, and the 89
contributions necessary to fund the plan based on financial 90
statements prepared pursuant to paragraphs (a) and (b), stated 91
as an annual dollar value and a percentage of valuation payroll. 92
Section 3. The Legislature finds that a proper and 93
legitimate state purpose is served when employees and retirees 94
of the state and its political subdivisions, and the dependents, 95
survivors, and beneficiaries of such employees and retirees, are 96
extended the basic protections afforded by governmental 97
retirement systems that provide fair and adequate benefits and 98
that are managed, administered, and funded in an actuarially 99
sound manner as required by s. 14, Article X of the State 100
Constitution and part VII of chapter 112, Florida Statutes. 101
Therefore, the Legislature determines and declares that this act 102
fulfills an important state interest. 103
Section 4. This act shall take effect July 1, 2015. 104
PAGE
Market Snapshot 1
Index Comparisons 2
Compliance Report 3
Total Portfolio Pie Chart 5
Manager Pie Chart 6
Asset Allocation Table 7
Gain/Loss Table 8
Total Ranks Table 9
Manager Ranks 10
Scatterplot Graphs:
Total Fund Graph 13
Rhumbline Equities Graph 14
ICC Fixed income Graph 15
Beta Graph 16
Alpha Graph 17
Beta/Alpha Table 18
Batting Average Graph 19
Batting Average/R-Squared Table 20
Other Managers' Page 21
Palm Beach Gardens Police Pension Fund
Executive Summary Report
Table of Contents
SECTION
Page 2
Index Comparison
December 31, 2014
-10.00
0.00
10.00
20.00
30.00
3 Months Last 12 Months Last 3 Years (Annualized)
Re
t
u
r
n
(
%
)
Barclays Gov/Credit Bond Barclays Gov/Credit-Intermediate S&P 500
Russell 1000 Growth Russell 1000 Value Russell 2000 Growth
Russell 2000 Value Russell 3000 MSCI EAFE
10.06% R2000G
0.89% BCIGC
13.69%S&P500
20.89%R1000V
2.03% BCIGC
3.12%BCIGC
1.
2.
3.
1.
2.
3.
4.
5.
6.
1.
2.
3.
4.
5.
6.
Page 3
Is the minimum quality rating of the domestic bond investments BBB from Standard & Poor's or BAA from Moody's?
Did the fixed income return, over the trailing 5-year period, rank in the top 40% of the Mobius Broad Fixed Income
Universe? [67th]
Did the total return of the fund over the trailing 3-year period equal or exceed 7.3% (actuarial assumption rate of return)?
[13.33 vs. 7.3]
TOTAL FIXED INCOME
Did the fixed income return, over the trailing 3-year period, exceed the 89% BCAB and 11% Non-US World Gov't Bond?
[1.74 vs. 2.16]
Is the amount invested in any single security less than or equal to 5% of the market value of the total equity portfolio?
Is the amount invested in any single industry less than or equal to 20% of the market value of the total equity portfolio?
Did the fixed income return, over the trailing 5-year period, exceed the BCAB? [3.90 vs. 4.07]
Did the fixed income return, over the trailing 3-year period, rank in the top 40% of the Mobius Broad Fixed Income
Universe? [78th]
Is the amount invested in any single security (with exception of U.S. Government and its agencies) less than or equal to 5%
of the market value of the total fixed income portfolio?
Palm Beach Gardens Police Pension Fund
Compliance Report
December 31, 2014
YES NO
Did the equity return, over the trailing 3-year period, exceed the 38.4% S&P 500, 15.4% S&P 400, 15.4% S&P 600, 15.4%
R1000G index and 15.4% EAFE? [19.52 vs. 19.00]
Did the equity return, over the trailing 5-year period, exceed the 38.4% S&P 500, 15.4% S&P 400, 15.4% S&P 600, 15.4%
R1000G index and 15.4% EAFE? [14.67 vs. 14.52]
Did the equity return, over the trailing 3-year period, rank in the top 40% of the Mobius 38.4% Broad Large Cap, 15.4%
Mid Cap, 15.4% Small Cap, 15.4% Broad Large Cap Growth and 15.4% International Universe? [13th]
Did the equity return, over the trailing 5-year period, rank in the top 40% of the Mobius 38.4% Broad Large Cap, 15.4%
Mid Cap, 15.4% Small Cap, 15.4% Broad Large Cap Growth and 15.4% International Universe? [8th]
TOTAL FUND
Did the total return, over the trailing 3-year period, exceed the policy, which is comprised of 25% S&P500, 10% S&P400,
10% S&P600, 10% R1000G, 10% EAFE, 29% BCAB , 4% Non US $ World Gov. Bond & 2% RE? [13.33 vs. 13.13]
TOTAL EQUITY
Did the total return, over the trailing 3-year period, rank in the top 40% of the Universe comprised of 25% Mobius Broad
Large Core, 10% Mid Cap, 10% Small Cap, 10% Broad Large Cap Growth, 10% International Equity, 29% Broad Fixed, 4%
International Fixed Income & 2% NCREIF? [63rd]
1.
ICC hasn’t gone under any oraganizational changes as of 12/31/2014
2.
No
3.
Robert Dombrower resigned from ICC affective 12/26/2014.
4.
No
5.
No
6.
No
7.
No
8.
No
9.
0.00%
10.
No
11.
Steven Stack, CRCP COO/CCO
Page 4
Manager Compliance Questionnaire
December 31, 2014
Have there been any changes in your organization? Have you undergone any change in ownership or control?
Are you invested in any unhedged and/or levereged derivatives?
What percentage of equity is international? The
manager must immediately notify the Board and the Consultant when the international exposure reaches ten percent (10%). An explanation
will be needed as to why the manager is changing their discipline. (This does not apply to managers that are 100% international equity and to
those that have been previously given permission by the board and the consultant)
Are you invested in any companies on the SBA's website? (Please review list of scrutinized companies on the following website:
http://www.sbafla.com/fsb/Home/ProtectingFloridasInvestmentAct/tabid/751/Default.aspx
Name of person completing this form (please include company name)?
Have there been any changes in your investment philosophy?
Have there been any changes in your staff of investment professionals?
Have you lost a substantial amount of business (amount of percentage of assets under management)?
Have you gained a substantial amount of business (amount of percentage of assets under management)?
Have there been any new investigations begun by any state or federal government or their agencies, or any charges filed, with regard to any
division or unit of your company, and in particular anyone who directly or indirectly performs services for this client? Please provide details
(if there is any doubt, please err on the side of providing too much information).
For managers, with fixed income portfolios that we monitor, are you currently invested in commercial mortgage backed securities (CMBS)? (If
yes, please give % of fixed portfolio)
Page 5
Palm Beach Gardens Police Pension Fund
Total Assets
December 31, 2014
Equities
69%
Fixed Income
25%
Real Estate
4%
Cash
2%
Equities Fixed Income Real Estate Cash
Page 6
Palm Beach Gardens Police Pension Fund
Total Assets
December 31, 2014
Rhumbline S&P500
27%
Rhumbline S&P400
11%
Rhumbline S&P600
12%
Intl. Equity
7%
ICC Lg. Growth
12%
Intl. Bonds
3%
ICC Fixed
24%
American Realty
4%
Rhumbline S&P500 Rhumbline S&P400 Rhumbline S&P600 Intl. Equity ICC Lg. Growth Intl. Bonds ICC Fixed American Realty
Manager Equities Fixed Income Real Estate Cash Total % of Total
Rhumbline S&P500 $20,054,000 $0 $0 $0 $20,054,000 27.2%
25.0%
Rhumbline S&P400 $8,346,000 $0 $0 $0 $8,346,000 11.3%
10.0%
Rhumbline S&P600 $8,480,000 $0 $0 $0 $8,480,000 11.5%
10.0%
Intl. Equity $5,307,000 $0 $0 $0 $5,307,000 7.2%
10.0%
ICC Lg. Growth $8,771,000 $0 $0 $0 $8,771,000 11.9%
10.0%
Intl. Bonds $0 $2,182,000 $0 $0 $2,182,000 3.0%
4.0%
ICC Fixed $0 $16,353,000 $0 $1,086,000 $17,439,000 23.7%
26.0%
$0 $0 $3,071,000 $0 $3,071,000 4.2%
5.0%
Total $50,958,000 $18,535,000 $3,071,000 $1,086,000 $73,650,000 100.0%
100.0%
% of Total 69.2%25.2%4.2%1.5%100.0%
Target %65.0%30.0%5.0%0.0%100.0%
Page 7
Palm Beach Gardens Police Pension Fund
Performance Evaluation Summary
December 31, 2014
American Realty
Portfolio Last Qtr. MV Net Flows Inv G(L)This Qtr. MV
Total Fund $70,948,000 -$37,000 $2,739,000 $73,650,000
Total Equities $49,243,000 -$840,000 $2,555,000 $50,958,000
ICC Large Growth $8,697,000 -$372,000 $447,000 $8,771,000
Rhumbline S&P 500 $19,563,000 -$480,000 $972,000 $20,054,000
Rhumbline S&P 400 $7,850,000 $0 $496,000 $8,346,000
Rhumbline S&P 600 $7,721,000 $0 $759,000 $8,480,000
International Equity $5,413,000 $0 -$105,000 $5,307,000
International Bonds $2,200,000 $0 -$18,000 $2,182,000
ICC Fixed Income $15,532,000 $667,000 $155,000 $16,353,000
Real Estate $2,814,000 $209,000 $48,000 $3,071,000
Page 8
Palm Beach Gardens Police Pension Fund
Performance Evaluation Summary
December 31, 2014
Current Fiscal Year
Quarter FYTD One Year Three Years Five Years 2014 2013 2012 2011 2010
Return 3.84%3.84%7.60%13.33%10.79%10.73%14.53%18.63%0.22%10.09%
Ranking (*)8 8 37 63 52 47 80 90 40 45
Policy Return (**)3.45%3.45%7.67%13.13%11.14%10.29%14.21%19.60%1.76%10.82%
Policy Ranking (*)22 22 34 70 37 58 85 72 8 32
Return 5.19%5.19%9.11%19.52%14.67% 13.97%24.43%28.59%-2.62%12.36%
Ranking (***)5 5 11 13 8 20 30 14 58 20
23.27%27.80%-0.50%11.44%
Policy Ranking (***)24 24 15 25 11 21 56 27 15 36
Return 0.75%0.75%3.82%1.74%3.90%3.07%-2.93%5.83%4.78%7.63%
Ranking (Broad Fixed)57 57 64 78 67 74 75 71 14 45
Policy Return (85% BCAB and 15%
Non-US World Gov't Bond)1.27%1.27%4.99%2.16%4.07%3.41%-2.12%4.98%5.21%7.79%
Policy Ranking (Broad Fixed)37 37 53 73 63 71 61 76 10 44
Page 9
* 25% Broad Large Cap Core, 10% Mid Cap, 10% Small Cap, 10% Broad Large Growth, 10% International, 4% Intl. Bond, 23.5% Broad Fixed & 7.5% RE
** 25% S&P500, 10% S&P400, 10% S&P600, 10% R1000G, 10% EAFE, 4% Intl. Bond, 23.5% BCAB & 7.5% NCREIF
Policy Return (38.4%S&P500,
15.4%S&P400, 15.4%S&P600,
15.4% R1000G, 15.4% EAFE)14.52%
Red indicates bottom 40% of universe
19.00%
*** 38.4% Broad Large Cap Core, 15.4% Mid Cap, 15.4% Small Cap, 15.4% Broad Large Cap Growth, 15.4% International
TOTAL FIXED INCOME(Net of Fees)[Inception 3-31-1994](International Fixed Inception 9-30-2010)
Gold indicates equal to or beat the index, or in upper 40% of universe
4.56%
Palm Beach Gardens Police Pension Fund
Performance Evaluation Summary
December 31, 2014
8.90%
TOTAL FUND (Net of Fees)[Inception 3-31-1992]
TOTAL EQUITIES(Net of Fees)[Inception 6-30-2000]
4.56%13.86%
Current Fiscal Year
Quarter FYTD One Year Three Years Five Years 2014 2013 2012 2011 2010
4.96%4.96%13.67%20.38%15.45%19.65%19.31%30.17%1.19%10.21%
Ranking (Br.Large Cap Core)35 35 19 39 25 18 66 21 20 29
4.93%4.93%13.69%20.41%15.45%19.74%19.34%30.20%1.15%10.16%
Policy Ranking (Br.Large Cap Core)38 38 19 38 25 17 66 20 20 30
6.31%6.31%9.78%19.94%16.59%11.81%27.56%28.90%-1.17%17.77%
29 29 30 42 17 53 46 28 26 12
6.35%6.35%9.77%19.99%16.54%11.82%27.68%28.54%-1.28%17.78%
28 28 30 41 18 53 44 30 27 12
9.83%9.83%5.78%20.17%17.24%5.80%31.40%33.27%0.21%14.14%
Ranking (Broad Small Cap)18 18 29 28 25 35 39 18 26 37
9.85%9.85%5.76%20.24%17.27%5.74%31.52%33.35%0.21%14.21%
Policy Ranking (Broad Small Cap)18 18 29 27 25 36 37 18 26 36
5.17%5.17%9.53%21.26%14.57%16.29%28.72%27.52%-6.48%14.62%
Ranking (Broad Large Cap Growth)34 34 70 24 53 67 1 55 94 8
4.78%4.78%13.05%20.26%15.81%19.15%19.27%29.18%3.78%12.65%
45 45 25 45 20 29 73 40 14 20
-1.94%-1.94%-1.81%13.83%7.87%7.90%23.71%19.38%-11.11%9.09%
31 31 16 12 15 8 28 20 50 32
-3.53%-3.53%-4.48%11.56%5.81%4.70%24.29%14.33%-8.94%3.71%
52 52 37 32 40 41 24 68 25 65
Page 10
Return
Policy (R1000G)
Policy (S&P 600)
Ranking (Broad Mid Cap)
ICC LARGE CAP GROWTH EQUITY PORTFOLIO(Inception 9-30-2007)
Return
Policy Ranking (Broad Mid Cap)
INTERNATIONAL EQUITY(Inception 9-30-2006)
Return
Ranking (International Equity)
Policy (MSCI EAFE)
Return
Gold indicates equal to or beat the index, or in upper 40% of universe
Policy (S&P 400)
Red indicates bottom 40% of universe
Policy Ranking (Broad Large Cap
Growth)
Policy Ranking (International
Equity)
Return
Palm Beach Gardens Police Pension Fund
Performance Evaluation Summary
December 31, 2014
RHUMBLINE S&P 500 EQUITY PORTFOLIO(Inception 6-30-2000)
RHUMBLINE S&P 400 EQUITY PORTFOLIO(Inception 12-31-2002)
Policy(S&P500)
RHUMBLINE S&P 600 EQUITY PORTFOLIO(Inception 10-31-2003)
Current Fiscal Year
Quarter FYTD One Year Three Years Five Years 2014 2013 2012 2011 2010
0.96%0.96%4.12%1.69%3.95%3.10%-2.93%5.59%5.20%7.44%
Ranking (Broad Fixed)51 51 62 79 66 73 75 72 10 46
1.79%1.79%5.97%2.66%4.46%3.96%-1.68%5.16%5.29%8.17%
Policy Ranking (Broad Fixed)10 10 40 67 54 66 53 75 9 41
Four Years
-0.84%-0.84%1.64%2.37%2.15%2.97%-2.82%7.89%0.33%n/a
-2.91%-2.91%-2.68%-1.94%-0.21%-0.99%-5.65%3.46%4.14%n/a
Inception
1.56%1.56%9.13%10.56%n/a 11.34%11.10%n/a n/a n/a
3.25%3.25%12.04%11.23%n/a 11.92%11.00%n/a n/a n/a
Page 11
INTERNATIONAL FIXED INCOME PORTFOLIO(Inception 9-30-2010)
Return
Policy (Non-US World Bond)
Gold indicates equal to or beat the index, or in upper 40% of universe
Red indicates bottom 40% of universe
AMERICAN REALTY PORTFOLIO(Inception 6-30-2012)
Return
Policy (NCREIF)
Palm Beach Gardens Police Pension Fund
Performance Evaluation Summary
December 31, 2014
ICC FIXED INCOME PORTFOLIO(Inception 3-31-1994)
Return
Policy(BCAB)
December 31, 2014
EXPLANATION OF RISK/REWARD SCATTERPLOT GRAPHS
The crossing lines represent the 5-year return (horizontal line) and 5-year standard deviation or
volatility or risk (vertical line) of the index against which the Fund is being measured.
Each point represents the Fund's 5 -year return (vertically) and standard deviation or volatility
(horizontally), relative to the index. If a point is in the southwest quadrant, for example, the 5 -year
return of the Fund has been less than (below) the index line, and the 5 -year standard deviation
(volatility) has also been less than (to the left of) the index line.
There are four points, one for each of the last four quarters. The earliest one is the smallest and the
quarter just ended being the largest. Each point shows the 5-year relative position of the Fund
versus the index for that quarter. The movement of the points shows the trend, or direction, over
time.
As noted in the graph, the best place to be is the northwest quadrant (less risk and a higher return);
the worst place to be is the southeast quadrant (more risk and a lower return).
Page 13
Palm Beach Gardens Police Pension Fund
Total Fund Trailing 5-Years
December 31, 2014
(versus 25% S&P500, 10% S&P400, 10% S&P600, 10% R1000G, 10% EAFE, 4% Non-US World Bond, 23.5% BCAB, 7.5% RE)
-3
0
3
-3 0 3
Di
f
f
e
r
e
n
c
e
i
n
R
e
t
u
r
n
s
(
M
a
n
a
g
e
r
-
In
d
e
x
)
Risk (Difference in Standard Deviations)
12/31/2014 9/30/2014 6/30/2014 3/31/2014
Good Aggressive
Conservative Bad
Page 14
Palm Beach Gardens Police Pension Fund
Total Equity Trailing 5-Years
December 31, 2014
(versus 38.4% S&P 500, 15.4% S&P 400, 15.4% S&P 600, 15.4% R1000G & 15.4% Intl. )
-3
0
3
-3 0 3
Di
f
f
e
r
e
n
c
e
i
n
R
e
t
u
r
n
s
(
M
a
n
a
g
e
r
-
In
d
e
x
)
Risk (Difference in Standard Deviations)
12/31/2014 9/30/2014 6/30/2014 3/31/2014
Good Aggressive
Conservative Bad
Page 15
Palm Beach Gardens Police Pension Fund
Total Fixed Income 5-Year Trailing
December 31, 2014
(versus 85% BCAB, 15% Non-US World Gov't Bond)
-3
0
3
-3 0 3
Di
f
f
e
r
e
n
c
e
i
n
R
e
t
u
r
n
s
(
M
a
n
a
g
e
r
-
In
d
e
x
)
Risk (Difference in Standard Deviations)
12/31/2014 9/30/2014 6/30/2014 3/31/2014
Good Aggressive
Conservative Bad
15451000 15451000
123518000 123518000
264000 264000
139233000
Page 16
Palm Beach Gardens Police Pension Fund
Beta: Trailing 5-Year Risk (or Inception if Less)
December 31, 2014
0.30 0.40 0.50 0.60 0.70 0.80 0.90 1.00 1.10 1.20
Dec-14
Sep-14
Jun-14
Mar-14
Total Fund Large Cap Mid Cap Small Cap Total Fixed International Large Growth
Page 17
Palm Beach Gardens Police Pension Fund
Alpha: Trailing 5-Year Reward (or Inception if Less)
December 31, 2014
-4.0%
-2.0%
0.0%
2.0%
4.0%
6.0%
8.0%
10.0%
12.0%
14.0%
Dec-14 Sep-14 Jun-14 Mar-14
TOTAL FUND & INDIVIDUAL MANAGERS
Total Fund Large Cap Mid Cap Small Cap Total Fixed International Large Growth
Dec-14 Sep-14 Jun-14 Mar-14
Total Fund 0.97 0.97 0.96 0.93
Managers, Fixed Income
Total Fixed 0.97 0.96 0.97 0.96
Managers, Equities
Large Cap 1.00 1.00 1.00 1.00
Mid Cap 1.00 1.00 1.00 1.00
Small Cap 1.00 1.00 1.00 0.99
International 0.34 0.31 0.34 0.37
Large Growth 1.12 1.13 1.13 1.12
Real Estate NCREIF n/a n/a n/a n/a
Total Fund 0.00%-0.14%-0.15%-0.07%
Managers, Fixed Income
Total Fixed -0.04%-0.03%-0.23%-0.20%
Managers, Equities
Large Cap 0.04%0.04%0.04%0.07%
Mid Cap 0.09%0.10%0.11%0.11%
Small Cap 0.02%0.02%-0.01%0.01%
International 5.89%6.91%10.08%12.33%
Large Growth -3.08%-3.18%-1.90%-2.21%
Real Estate NCREIF n/a n/a n/a n/a
Page 18
S&P400
* 25% S&P 500, 10% S&P400, 10% S&P600, 10% R1000G, 10% EAFE, 4% Non-US World Gov't Bond, 23.5% BCAB, 7.5% RE
S&P600
EAFE
R1000G
Policy
S&P500
S&P600
EAFE
S&P400
BCAB
R1000G
BCAB
S&P500
*
ALPHA
Palm Beach Gardens Police Pension Fund
Alpha & Beta: 5-Years Trailing (or Inception if Less)
December 31, 2014
Current
BETA
*
Page 19
Palm Beach Gardens Police Pension Fund
Batting Average: 5-Years Trailing (or Inception if Less)
December 31, 2014
0
10
20
30
40
50
60
70
80
90
100
Dec-14 Sep-14 Jun-14 Mar-14
TOTAL FUND & INDIVIDUAL MANAGERS
Total Fund Large Cap Mid Cap Small Cap Total Fixed International Large Growth
Dec-14 Sep-14 Jun-14 Mar-14
Total Fund 30.00 30.00 25.00 25.00
Managers, Fixed Income
Total Fixed 55.00 55.00 50.00 50.00
Managers, Equities
Large Cap 40.00 40.00 40.00 40.00
Mid Cap 55.00 60.00 60.00 55.00
Small Cap 35.00 35.00 30.00 30.00
International 55.00 55.00 55.00 55.00
Large Growth 40.00 40.00 45.00 45.00
Real Estate NCREIF 40.00 50.00 50.00 57.14
Total Fund 0.99 0.99 0.99 0.98
Managers, Fixed Income
Total Fixed 0.88 0.89 0.90 0.89
Managers, Equities
Large Cap 1.00 1.00 1.00 1.00
Mid Cap 1.00 1.00 1.00 1.00
Small Cap 1.00 1.00 1.00 1.00
International 0.25 0.13 0.15 0.19
Large Growth 0.93 0.93 0.93 0.93
Real Estate NCREIF 0.09 0.23 0.05 0.12
Page 20
BCAB
BCAB
*
S&P600
R1000G
R-SQUARED
S&P500
S&P400
* 25% S&P 500, 10% S&P400, 10% S&P600, 10% R1000G, 10% EAFE, 4% Non-US World Gov't Bond, 23.5% BCAB, 7.5% RE
S&P600
EAFE
R1000G
December 31, 2014
EAFE
Palm Beach Gardens Police Pension Fund
Batting Average: 5-Years Trailing (or Inception if Less)
BATTING AVERAGE
S&P500
S&P400
Current
Policy
*
Qtr YTD 1Yr 3Yr 5Yr 10Yr
Great Lakes - Large Cap - Gross Size 5.10 5.10 11.62 21.53 16.05 8.76
Atlanta Capital Management Co., LLC - High Quality Growth Plus - Gross Size 5.50 5.50 11.14 19.46 14.49 8.32
ICC Capital Management, Inc - Core Value - Gross Size 6.48 6.48 12.45 20.68 13.18 7.55
Inverness Counsel, LLC - Pension Equity - Gross Size 3.78 3.78 12.50 21.36 14.74 9.03
Logan Capital Management - Large Core 60/40 - Gross Size 4.69 4.69 10.28 17.46 17.23 9.37
Rhumbline Advisers Corporation - Russell 1000 Index Fund - Gross Size 4.87 4.87 13.19 20.55 15.20 7.87
Valley Forge Asset Management - Large Cap Core - Gross Size 3.34 3.34 10.03 12.48 11.37 7.05
Russell 1000 4.88 4.88 13.24 20.62 15.64 7.96
S&P 500 4.93 4.93 13.69 20.41 15.45 7.67
Dana Investment Management - Large Growth - Gross Size 7.71 7.71 15.77 21.54 16.19 9.64
Denver Investment Advisors, LLC - Growth - Gross Size 4.38 4.38 8.07 19.12 14.56 8.12
Garcia Hamilton & Associates - Quality Growth - Gross Size 5.56 5.56 11.21 17.21 13.57 7.38
Logan Capital Management - Large Cap Growth - Gross Size 3.92 3.92 6.84 19.25 15.24 8.07
Montag & Caldwell, Inc. - Large Cap Growth - Gross Size 4.64 4.64 8.39 16.73 12.66 8.62
Polen Capital Management - Large Cap Growth - Gross Size 10.18 10.18 17.60 17.79 15.60 10.19
Rhumbline Advisers Corporation - Russell 1000 Growth Index Fund - Gross Size 4.80 4.80 13.13 20.21 15.80 8.49
Sawgrass Asset Management, LLC - Large Cap Growth Equity - Gross Size 6.10 6.10 13.91 20.83 16.41 8.89
Silvant Capital - Select LCG Stock - Grosss Size 4.02 4.02 7.18 16.81 12.25 7.56
Russell 1000 Growth 4.78 4.78 13.05 20.26 15.81 8.49
S&P 500/Citigroup Growth 5.06 5.06 14.89 20.46 16.05 8.55
Rhumbline Large Cap(FYE)4.96 4.96 13.67 20.38 15.45 7.78
Rhumbline Mid Cap(FYE)6.31 6.31 9.78 19.94 16.59 9.81
Rhumbline Small Cap(FYE)9.83 9.83 5.78 20.17 17.24 9.12
ICC Large Growth(FYE)5.17 5.17 9.53 21.26 14.57 n/a
International Equity(FYE)-1.94 -1.94 -1.81 13.83 7.87 n/a
Page 21
Performance of Other Managers
December 31, 2014
CORE EQUITY
GROWTH EQUITY
Qtr YTD 1Yr 3Yr 5Yr 10Yr
Ceredex Value Ad Large Cap Value 5.02 5.02 12.09 21.12 16.02 9.36
Edgar Lomax Large Value - Gross Size 4.36 4.36 16.22 18.95 16.26 8.19
ICC Capital Management, Inc - Core Value - Gross Size 6.48 6.48 12.45 20.68 13.18 7.55
Rhumbline Advisers Corporation - Russell 1000 Value Index Fund - Gross Size 4.92 4.92 13.35 20.82 15.39 7.37
The Boston Company Asset Mgmt., LLC - US Large Cap Value Equity Management 4.37 4.37 11.42 22.71 15.14 8.99
RBC Global Asset Management, Inc. - Large Cap Value - Gross Size 4.93 4.93 13.39 20.08 14.64 8.19
RNC Genter Capital - Dividend Income Equity - Gross Size 0.10 0.10 6.32 15.12 13.44 8.44
Westwood Management Corporation - LargeCap Equity - Gross Size 5.67 5.67 12.99 19.93 14.42 9.09
Russell 1000 Value 4.98 4.98 13.45 20.89 15.42 7.30
S&P 500/Citigroup Value 4.78 4.78 12.36 20.40 14.86 6.71
Amalgamated Bank - LongView 400 MidCap Index Fund - Gross Size 6.33 6.33 9.74 19.97 16.52 9.71
Chicago Equity Partners, LLC - Mid Cap Core Equity - Gross Size 3.33 3.33 7.80 20.57 17.99 8.71
Robeco Investment Management, Inc. - BPAM Mid Cap Value Equity - Gross Size 8.37 8.37 14.37 24.55 19.64 12.80
Russell Midcap 5.94 5.94 13.22 21.40 17.19 9.56
S&P Midcap 400 6.35 6.35 9.77 19.90 16.54 9.71
Great Lakes - SMID - Gross Size 9.80 9.80 10.49 25.01 20.72 11.25
Eagle Asset Management - SMID Core - Institutional - Gross Size 7.80 7.80 8.88 19.28 16.00 10.02
Earnest Partners - SMID Core - Gross Size 5.61 5.61 12.45 21.33 17.26
Kayne AndersonRudnick - SMID Core - Gross Size 8.21 8.21 9.74 16.27 15.47 8.23
New Amsterdam Partners - SMID Active Equity - Gross Size 7.89 7.89 3.33 21.70 18.82 10.71
Russell 2500 6.77 6.77 7.07 19.97 16.36 8.72
Rhumbline Large Cap(FYE)4.96 4.96 13.67 20.38 15.45 7.78
Rhumbline Mid Cap(FYE)6.31 6.31 9.78 19.94 16.59 9.81
Rhumbline Small Cap(FYE)9.83 9.83 5.78 20.17 17.24 9.12
ICC Large Growth(FYE)5.17 5.17 9.53 21.26 14.57 n/a
International Equity(FYE)-1.94 -1.94 -1.81 13.83 7.87 n/a
Page 22
Performance of Other Managers
December 31, 2014
VALUE EQUITY
MID-CAP EQUITY
SMID-CAP EQUITY
Qtr YTD 1Yr 3Yr 5Yr 10Yr
Great Lakes - AllCap - Gross Size 5.50 5.50 11.47 22.58 16.93 8.40
HGK Asset Management - All Cap - Gross Size 3.24 3.24 12.00 20.17 14.59 8.72
ICC Capital Management, Inc - Multi-Cap Eq. - Gross Size 5.24 5.24 14.05 15.54 10.59 10.49
Oak Ridge Investments, LLC - All-Cap - Gross Size 5.93 5.93 13.03 19.45 15.17 8.62
Russell 3000 5.24 5.24 12.56 20.51 15.63 7.94
Dow Jones Wilshire 5000 (Full Cap)5.26 5.26 12.73 20.31 15.56 8.00
Atlanta Capital Management Co., LLC - High Quality Small Cap - Gross Size 10.25 10.25 3.60 18.28 18.12 11.99
Ceredex - Value Ad Small Cap Value - Gross Size 10.10 10.10 3.28 18.63 16.20 10.89
GW Capital, Inc. - Small Cap Value Equity - Gross Size 4.63 4.63 -1.24 16.35 13.87 9.94
Kayne Anderson Rudnick Invst. - Small Cap - Gross Size 9.47 9.47 7.53 16.64 16.94 10.18
Sawgrass Asset Management, LLC - Small Cap Growth Equity - Gross Size 9.27 9.27 12.12 20.40 19.22 5.88
Silvant Capital - Small Cap Growth - Gross Size 8.51 8.51 -3.37 17.97 15.83 7.67
Russell 2000 9.73 9.73 4.89 19.21 15.55 7.77
S&P SmallCap 600 9.85 9.85 5.76 20.24 17.27 9.02
American Realty Advisors - Core Equity Real Estate-Sep. Accts. - Gross Size 3.35 12.47 12.47 12.09 10.93 6.69
Intercontinental - US REIF - Gross Size
JPMorgan Asset Management - Strategic Property Fund - Gross Size 2.36 12.11 12.11 13.10 12.56 8.22
Principal Global - Real Estate Core - Gross Size 3.12 12.59 12.59 13.00 12.98 6.98
Dow Jones Wilshire REIT Index -3.07 13.52 13.52 16.54 16.03 8.36
NCREIF Property Index 2.63 11.26 11.26 11.08 10.99 8.55
Harding Loevner - International Equity - Gross Size -3.05 -3.05 0.66 9.64 6.34 10.95
Harding Loevner - Emerging Mkts. Equity - Gross Size -0.93 -0.93 -0.13 11.61 8.58 8.63
ICC Capital Management, Inc - International ADR Equity - Gross Size -3.54 -3.54 -6.72 10.51 5.82 4.36
INVESCO - International EM Equity - Gross Size -5.41 -5.41 -2.35 0.77 -1.25 7.69
Manning & Napier - International Equity - Gross Size -4.56 -4.56 -8.60 9.73 4.38 6.35
Nuveen Asset Management - International Growth ADR - Gross Size 0.42 0.42 -6.17 15.74 9.34
The Boston Company Asset Mgmt., LLC - International Core Equity Management -4.75 -4.75 -4.45 14.72 8.09 5.32
Thornburg Investment Mgmt. - International Equity - Gross Size -1.17 -1.17 -4.63 9.22 5.67 7.25
WHV - WHV International Equity - Gross Size -10.55 -10.55 -7.92 6.74 4.19 9.80
MSCI EAFE -3.53 -3.53 -4.48 11.56 5.81 4.91
MSCI EMERGING MARKETS -4.44 -4.44 -1.82 4.41 2.11 8.78
Rhumbline Large Cap(FYE)4.96 4.96 13.67 20.38 15.45 7.78
Rhumbline Mid Cap(FYE)6.31 6.31 9.78 19.94 16.59 9.81
Rhumbline Small Cap(FYE)9.83 9.83 5.78 20.17 17.24 9.12
ICC Large Growth(FYE)5.17 5.17 9.53 21.26 14.57 n/a
International Equity(FYE)-1.94 -1.94 -1.81 13.83 7.87 n/a
Page 23
Performance of Other Managers
December 31, 2014
ALL CAP EQUITY
SMALL CAP EQUITY
REAL ESTATE (9/30/2014)
INTERNATIONAL EQUITY
Qtr YTD 1Yr 3Yr 5Yr 10Yr
Denver Investment Advisors - Core Bond Gov't/Corp. - Gross Size 1.53 1.53 6.30 3.09 5.02 5.06
Eagle Asset Management - Core Fixed Institutional - Gross Size 1.85 1.85 5.16 2.33 4.42 4.84
Garcia Hamilton & Associates - Fixed Aggregate - Gross Size 2.55 2.55 8.01 6.09 6.36 6.62
ICC Capital Management, Inc - Core Fixed Income - Gross Size 1.10 1.10 4.36 2.15 4.30 4.33
Inverness Counsel, LLC - Pension Fixed Income - Gross Size 1.08 1.08 4.30 2.74 4.37 4.87
Montage & Caldwell Inc. - Core Fixed Income - Gross Size 1.34 1.34 4.49 2.02 3.60 4.71
Sawgrass Asset Management, LLC - Core Fixed Income - Gross Size 1.50 1.50 5.49 3.07 4.62 5.12
RBC Global Asset Management, Inc. - Broad Market Core - Gross Size 1.89 1.89 6.42 3.28 4.87 4.63
Wedge Capital Management - Core Fixed Income - Gross Size 1.64 1.64 6.70 3.63 5.10 5.49
Barclays Aggregate Bond 1.79 1.79 5.97 2.66 4.45 4.71
Barclays Gov/Credit Bond 1.82 1.82 6.01 2.76 4.69 4.70
Barclays High Yield US Corporate Bond -1.00 -1.00 2.45 8.43 9.03 7.74
Denver Investment Advisors - Intermediate Fixed - Gross Size 0.77 0.77 3.93 2.93 4.42 4.73
Eagle Asset Management - Institutional Conservative - Gross Size 1.04 1.04 3.19 1.92 3.73 4.52
Garcia Hamilton & Associates - Intermediate Fixed Income - Gross Size 1.40 1.40 4.72 5.13 5.27 5.75
RBC Global Asset Management, Inc. - Intermediate Core - Gross Size 0.88 0.88 3.15 2.45 3.89 3.86
Sit Investment Associates, Inc. - Intermediate Govt/Corp - Gross Size 1.38 1.38 5.40 3.52 5.26 5.36
Barclays Intermediate Aggregate 1.20 1.20 4.12 2.19 3.72 4.34
Barclays Gov/Credit-Intermediate 0.89 0.89 3.12 2.03 3.54 4.10
Brandywine Global - International Fixed Invst. Grade - Gross Size -1.23 -1.23 2.99 4.89 5.42 5.00
PIMCO - Non US Fixed Income Unhedged - Gross Size -2.21 -2.21 1.55 0.86 4.73 4.77
Wells Capital Mgmt. - Global Fixed Income Ex-US - Gross Size -2.02 -2.02 0.43 1.04 3.36 4.39
Citigroup World Government Ex-US -2.91 -2.91 -2.68 -1.94 0.85 2.64
ICC Fixed Income(FYE)0.96 0.96 4.12 1.69 3.95 4.04
International Bonds(FYE)-0.84 -0.84 1.64 2.37 n/a n/a
American Realty(FYE)1.56 1.56 9.13 n/a n/a n/a
Page 24
INTERMEDIATE FIXED INCOME
INTERNATIONAL FIXED INCOME
Performance of Other Managers
December 31, 2014
CORE FIXED INCOME