HomeMy WebLinkAboutAgenda Police Pension 042313 Agenda
City of Palm Beach Gardens Police Officers’
Pension Fund
MEETING OF APRIL 23, 2013
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. Presentation of the 9/30/2012 Actuarial Valuation Report – Gabriel, Roeder,
Smith & Company: GRS (Pete Strong)
4. Presentation on Emerging Markets – SSGA (Max Cann)
5. Investment Manager Report – ICC Capital (Steve Stack)
6. Investment Consultant Report – Thistle Asset Consulting (John McCann)
7. Attorney Report – Law Offices of Perry & Jensen (Bonni Jensen)
• Revised DROP Distribution Policy
• Memo – Senate Bill 458 & House Bill 1399
8. Administrator Report – Resource Centers (Audrey Ross)
• Discussion Regarding a Deceased Members Benefit
9. Approval of Minutes
• January 31, 2013 Regular Meeting
10. Disbursements
11. Financial Statements
12. Other Business
• Update on VEBA Refunds
• Ullico Casualty Company Rehabilitation Action
13. Public Comments
14. Adjourn
Next Meeting Date:
Friday August 2, 2013 @ 9AM
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.
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PALM BEACH GARDENS POLICE OFFICERS’ PENSION FUND
STATEMENT OF POLICY REGARDING
DROP DISTRIBUTIONS
W HEREAS, the Palm Beach Gardens Police Officers’ Pension Fund Plan ("Plan")
provides for Deferred Retirement Option Plan (“DROP”) benefits;
W HEREAS, the Board of Trustees of the Plan (“Trustees”) desire to adopt a
Statement of Policy regarding the distributions of these benefits;
NOW , THEREFORE, it is hereby resolved that the following Statement of Policy
Regarding DROP and Share Account Distributions is hereby adopted.
I.DISTRIBUTION METHODS
A.Lump sum - If the lump sum method of distribution is selected then the
entire account balance will be paid. The full amount, or a portion thereof, will
be paid to the Retiree or can be rolled over to another qualified plan, at the
discretion of the Retiree. The payout/rollover can be made in any amount of
the Retiree’s choosing but the full amount must be taken from the plan. Any
amounts paid directly to a Retiree will have a 20% withholding deduction and
may be subject to other taxes and/or penalties.
B.Annuity - If a Retiree chooses monthly installments, then the account
balance will be paid out on a monthly basis. The following rules will apply to
this method of distribution:
1.For retirees who are age under 50 upon separation from service - The
Retiree may choose any amount provided the payment is made in
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substantially equal periodic payments over at least 5 years or, if later,
until age 59 ½ and is in compliance with Revenue Ruling 2002-62.
This amount will not be calculated by the Fund. The amount chosen
cannot be modified before the Retiree attains age 59½ or within 5
years from the date of the first payment, whichever occurs last. The
Retiree can be subject to additional taxes and/or penalties if the
amount is not correctly calculated. At age 70½, the monthly
installment shall be paid at a rate which meets the minimum
distribution rules of Internal Revenue Code §401(a)(9).
2.For Retirees who are age 50 and older upon separation from service
when the monthly installments begin - The monthly amounts may be
determined by the Retiree according to his or her need. The amount
of the monthly benefit or the method of payment (for example, from
monthly to lump sum) can be changed on a monthly quarterly basis
and will be made by on the 15 of any the month (February 15, Mayth
15, August 15, and November 15) and 30 days from the date a
member exits the DROP. Members must provide at least 30 days
notice for each DROP withdrawal. DROP assets can be
distributed without Board approval up to the gross amount of
$35,000.00. If the distribution is more, it must wait for approval
at the next quarterly Board meeting. The amount of the monthly
payment can be reduced to zero unless the payee has reached age
70½. Additionally, during these payment periods only, a member may
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request a partial lump sum withdrawal and still continue to receive the
monthly payments.
3.A 20% withholding tax applies to all payments paid directly to a
Retiree.
4.If there are less than 15 times the monthly installment at the start of
the fiscal year, then the remaining balance will be paid in a lump sum.
5.Between open enrollment periods, there will be no changes in the
method or amount of the payment unless a Retiree has a hardship.
Hardship withdrawals are permitted if both a and b below are met.
a. The Retiree has an immediate and heavy financial need - A
need may be immediate and heavy even though it was
foreseeable or voluntarily incurred. A need is deemed to be
immediate and heavy if it is:
1)medical expenses previously incurred by the Retiree,
the Retiree’s spouse or dependents, or amounts
necessary for these persons to obtain medical care;
2)costs related to the Retiree’s purchase of a principal
residence (not including mortgage payments);
3)payment of tuition and related educational fees and
room and board expenses for the next 12 months of
post-secondary education for the Retiree, the Retiree’s
spouse, children or dependents; or
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4)payments necessary to prevent the eviction of the
employee from the principal residence or to avoid
foreclosure on the mortgage on that residence.
b. the distribution is necessary to satisfy the Retiree’s financial
need - A distribution generally may be treated as necessary to
satisfy a financial need if the need cannot be relieved:
1)through reimbursement or compensation by insurance
or otherwise;
2)by reasonable liquidation of the participants’s assets (to
the extent that such liquidation would not itself cause an
immediate and heavy financial need);
3)by other distributions or nontaxable (at the time of the
loan) loans from the plans of the employer or by
borrowing from commercial sources at reasonable
terms; or
4)by cessation of elective contributions to other plans.
II. GENERAL CONSIDERATIONS
A.A Retiree may defer election of payment until age 70½. Any account
balances participate in earnings according to the Retiree’s election of
earnings method.
B.Final distributions from the DROP account will be subject to a 10% hold back
to account for the crediting of earnings/losses and administrative fees. Final
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disbursements of DROP accounts will be made once the DROP statements
for the prior quarter have been distributed.
C.Participants and Retirees may designate beneficiaries to receive any
balances in the DROP accounts upon their death. In the absence of such
designation, the benefit will be paid to the Retiree’s estate.
D.Lump sum payments in excess of $50,000.00 will be paid as soon as
administratively possible but no later than 60 days after the date of approval
by the Board of Trustees.
E.No amount or number of payments from the DROP accounts are
guaranteed. No member is entitled to payments greater than the balance in
the account, as maybe reduced by losses and/or expenses.
IN WITNESS WHEREOF the Board of Trustees of the Palm Beach Gardens Police
Officers’ Pension Fund has adopted this STATEMENT OF POLICY REGARDING DROP
AND SHARE ACCOUNT DISTRIBUTIONS this day of , 2013.
TRUSTEES
W itnessed by:
H:\PBG 0003\POLICY\2013.2.15 DROP Distributions (draft).wpd
BSJ/lg - February 15, 2013
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LEGISLATIVE ACTION
Senate
.
.
.
.
.
.
House
The Committee on Appropriations (Ring and Bradley) recommended
the following:
Senate Amendment (with title amendment) 1
2
Delete everything after the enacting clause 3
and insert: 4
Section 1. Subsection (2) of section 175.021, Florida 5
Statutes, is amended to read: 6
175.021 Legislative declaration.— 7
(2) This chapter hereby establishes, for all municipal and 8
special district pension plans existing now or hereafter under 9
this chapter, including chapter plans and local law plans, 10
required minimum benefits and minimum standards for the 11
operation and funding of such plans, hereinafter referred to as 12
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firefighters’ pension trust funds, which must be met as a 13
condition precedent to the plan or plan sponsor receiving a 14
distribution of insurance premium tax revenues under s. 175.121. 15
The required minimum benefits and minimum standards for each 16
plan as set forth in this chapter may not be diminished by local 17
charter, ordinance, or resolution or by special act of the 18
Legislature, or nor may the minimum benefits or minimum 19
standards be reduced or offset by any other local, state, or 20
federal law that may include firefighters in its operation, 21
except as provided under s. 112.65. 22
Section 2. Section 175.032, Florida Statutes, is amended to 23
read: 24
175.032 Definitions.—For any municipality, special fire 25
control district, chapter plan, local law municipality, local 26
law special fire control district, or local law plan under this 27
chapter, the term following words and phrases have the following 28
meanings: 29
(1) “Additional premium tax revenues” means revenues 30
received by a municipality or special fire control district 31
pursuant to s. 175.121 which exceed base premium tax revenues. 32
(2)(1)(a) “Average final compensation” for: 33
(a) A full-time firefighter means one-twelfth of the 34
average annual compensation of the 5 best years of the last 10 35
years of creditable service before prior to retirement, 36
termination, or death, or the career average as a full-time 37
firefighter since July 1, 1953, whichever is greater. A year is 38
shall be 12 consecutive months or such other consecutive period 39
of time as is used and consistently applied. 40
(b) “Average final compensation” for A volunteer 41
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firefighter means the average salary of the 5 best years of the 42
last 10 best contributing years before a prior to change in 43
status to a permanent full-time firefighter or retirement as a 44
volunteer firefighter or the career average of a volunteer 45
firefighter, since July 1, 1953, whichever is greater. 46
(3) “Base benefits” means the level of benefits in 47
existence for firefighters on March 12, 1999. 48
(4) “Base premium tax revenues” means revenues received by 49
a municipality or special fire control district pursuant to s. 50
175.121 equal to the amount of such revenues received for 51
calendar year 1997. 52
(5)(2) “Chapter plan” means a separate defined benefit 53
pension plan for firefighters which incorporates by reference 54
the provisions of this chapter and has been adopted by the 55
governing body of a municipality or special district. Except as 56
may be specifically authorized in this chapter, the provisions 57
of a chapter plan may not differ from the plan provisions set 58
forth in ss. 175.021-175.341 and 175.361-175.401. Actuarial 59
valuations of chapter plans shall be conducted by the division 60
as provided by s. 175.261(1). 61
(6)(3) “Compensation” or “salary” means, for 62
noncollectively bargained service earned before July 1, 2011, or 63
for service earned under collective bargaining agreements in 64
place before July 1, 2011, the fixed monthly remuneration paid a 65
firefighter. If remuneration is based on actual services 66
rendered, as in the case of a volunteer firefighter, the term 67
means the total cash remuneration received yearly for such 68
services, prorated on a monthly basis. For noncollectively 69
bargained service earned on or after July 1, 2011, or for 70
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service earned under collective bargaining agreements entered 71
into on or after July 1, 2011, the term has the same meaning 72
except that when calculating retirement benefits, up to 300 73
hours per year in overtime compensation may be included as 74
specified in the plan or collective bargaining agreement, but 75
payments for accrued unused sick or annual leave may not be 76
included. 77
(a) Any retirement trust fund or plan that meets the 78
requirements of this chapter does not, solely by virtue of this 79
subsection, reduce or diminish the monthly retirement income 80
otherwise payable to each firefighter covered by the retirement 81
trust fund or plan. 82
(b) The member’s compensation or salary contributed as 83
employee-elective salary reductions or deferrals to any salary 84
reduction, deferred compensation, or tax-sheltered annuity 85
program authorized under the Internal Revenue Code shall be 86
deemed to be the compensation or salary the member would receive 87
if he or she were not participating in such program and shall be 88
treated as compensation for retirement purposes under this 89
chapter. 90
(c) For any person who first becomes a member in any plan 91
year beginning on or after January 1, 1996, compensation for 92
that plan year may not include any amounts in excess of the 93
Internal Revenue Code s. 401(a)(17) limitation, as amended by 94
the Omnibus Budget Reconciliation Act of 1993, which limitation 95
of $150,000 shall be adjusted as required by federal law for 96
qualified government plans and shall be further adjusted for 97
changes in the cost of living in the manner provided by Internal 98
Revenue Code s. 401(a)(17)(B). For any person who first became a 99
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member before the first plan year beginning on or after January 100
1, 1996, the limitation on compensation may not be less than the 101
maximum compensation amount that was allowed to be taken into 102
account under the plan in effect on July 1, 1993, which 103
limitation shall be adjusted for changes in the cost of living 104
since 1989 in the manner provided by Internal Revenue Code s. 105
401(a)(17)(1991). 106
(7)(4) “Creditable service” or “credited service” means the 107
aggregate number of years of service, and fractional parts of 108
years of service, of any firefighter, omitting intervening years 109
and fractional parts of years when such firefighter may not have 110
been employed by the municipality or special fire control 111
district, subject to the following conditions: 112
(a) A No firefighter may not will receive credit for years 113
or fractional parts of years of service if he or she has 114
withdrawn his or her contributions to the fund for those years 115
or fractional parts of years of service, unless the firefighter 116
repays into the fund the amount he or she has withdrawn, plus 117
interest determined by the board. The member shall have at least 118
90 days after his or her reemployment to make repayment. 119
(b) A firefighter may voluntarily leave his or her 120
contributions in the fund for a period of 5 years after leaving 121
the employ of the fire department, pending the possibility of 122
being rehired by the same department, without losing credit for 123
the time he or she has participated actively as a firefighter. 124
If the firefighter is not reemployed as a firefighter, with the 125
same department, within 5 years, his or her contributions shall 126
be returned without interest. 127
(c) Credited service under this chapter shall be provided 128
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only for service as a firefighter, as defined in subsection (8), 129
or for military service and does not include credit for any 130
other type of service. A municipality may, by local ordinance, 131
or a special fire control district may, by resolution, may 132
provide for the purchase of credit for military service prior to 133
employment as well as for prior service as a firefighter for 134
some other employer as long as a firefighter is not entitled to 135
receive a benefit for such prior service as a firefighter. For 136
purposes of determining credit for prior service as a 137
firefighter, in addition to service as a firefighter in this 138
state, credit may be given for federal, other state, or county 139
service if the prior service is recognized by the Division of 140
State Fire Marshal as provided under chapter 633, or the 141
firefighter provides proof to the board of trustees that his or 142
her service is equivalent to the service required to meet the 143
definition of a firefighter under subsection (12) (8). 144
(8)(5) “Deferred Retirement Option Plan” or “DROP” means a 145
local law plan retirement option in which a firefighter may 146
elect to participate. A firefighter may retire for all purposes 147
of the plan and defer receipt of retirement benefits into a DROP 148
account while continuing employment with his or her employer. 149
However, a firefighter who enters the DROP and who is otherwise 150
eligible to participate may shall not thereby be precluded from 151
participating, or continuing to participate, in a supplemental 152
plan in existence on, or created after, March 12, 1999 the 153
effective date of this act. 154
(9) “Defined contribution plan” means the component of a 155
local law plan to which deposits are made to provide benefits 156
for firefighters, or for firefighters and police officers if 157
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both are included. Such component is an element of a local law 158
plan and exists in conjunction with the defined benefit 159
component that meets the required benefits and minimum standards 160
of this chapter. The retirement benefits of the defined 161
contribution plan shall be provided through individual member 162
accounts, in accordance with the applicable provisions of the 163
Internal Revenue Code and related regulations, and are limited 164
to the contributions made into each member’s account and the 165
actual accumulated earnings, net of expenses, earned on the 166
member’s account. 167
(10)(6) “Division” means the Division of Retirement of the 168
Department of Management Services. 169
(11)(7) “Enrolled actuary” means an actuary who is enrolled 170
under Subtitle C of Title III of the Employee Retirement Income 171
Security Act of 1974 and who is a member of the Society of 172
Actuaries or the American Academy of Actuaries. 173
(12)(8)(a) “Firefighter” means any person employed solely 174
by a constituted fire department of any municipality or special 175
fire control district who is certified as a firefighter as a 176
condition of employment in accordance with s. 633.35 and whose 177
duty it is to extinguish fires, to protect life, or to protect 178
property. The term includes all certified, supervisory, and 179
command personnel whose duties include, in whole or in part, the 180
supervision, training, guidance, and management responsibilities 181
of full-time firefighters, part-time firefighters, or auxiliary 182
firefighters but does not include part-time firefighters or 183
auxiliary firefighters. However, for purposes of this chapter 184
only, the term also includes public safety officers who are 185
responsible for performing both police and fire services, who 186
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are certified as police officers or firefighters, and who are 187
certified by their employers to the Chief Financial Officer as 188
participating in this chapter before October 1, 1979. Effective 189
October 1, 1979, public safety officers who have not been 190
certified as participating in this chapter are considered police 191
officers for retirement purposes and are eligible to participate 192
in chapter 185. Any plan may provide that the fire chief has an 193
option to participate, or not, in that plan. 194
(b) “Volunteer firefighter” means any person whose name is 195
carried on the active membership roll of a constituted volunteer 196
fire department or a combination of a paid and volunteer fire 197
department of any municipality or special fire control district 198
and whose duty it is to extinguish fires, to protect life, and 199
to protect property. Compensation for services rendered by a 200
volunteer firefighter does shall not disqualify him or her as a 201
volunteer. A person may shall not be disqualified as a volunteer 202
firefighter solely because he or she has other gainful 203
employment. Any person who volunteers assistance at a fire but 204
is not an active member of a department described herein is not 205
a volunteer firefighter within the meaning of this paragraph. 206
(13)(9) “Firefighters’ Pension Trust Fund” means a trust 207
fund, by whatever name known, as provided under s. 175.041, for 208
the purpose of assisting municipalities and special fire control 209
districts in establishing and maintaining a retirement plan for 210
firefighters. 211
(14)(10) “Local law municipality” is any municipality in 212
which there exists a local law plan exists. 213
(15)(11) “Local law plan” means a retirement defined 214
benefit pension plan, which includes both a defined benefit plan 215
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component and a defined contribution plan component, for 216
firefighters, or for firefighters or police officers if both are 217
where included, as described in s. 175.351, established by 218
municipal ordinance, special district resolution, or special act 219
of the Legislature, which enactment sets forth all plan 220
provisions. Local law plan provisions may vary from the 221
provisions of this chapter if the, provided that required 222
minimum benefits and minimum standards of this chapter are met. 223
However, any such variance must shall provide a greater benefit 224
for firefighters. Actuarial valuations of local law plans shall 225
be conducted by an enrolled actuary as provided in s. 226
175.261(2). 227
(16)(12) “Local law special fire control district” is any 228
special fire control district in which there exists a local law 229
plan exists. 230
(17) “Long-term funded ratio” or “funded ratio” means the 231
ratio of the actuarial value of assets of the plan to the 232
actuarial accrued liabilities of the plan, as reported in the 233
most recent actuarial valuation of the plan, deemed to be in 234
compliance with chapter 112 by the Department of Management 235
Services. 236
(18)(13) “Property insurance” means property insurance as 237
defined in s. 624.604 and covers real and personal property 238
within the corporate limits of a any municipality, or within the 239
boundaries of a any special fire control district, within the 240
state. “Multiple peril” means a combination or package policy 241
that includes both property and casualty coverage for a single 242
premium. 243
(19) “Required benefits” means the lesser of the minimum 244
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benefits set forth in this chapter and the base benefits of the 245
plan. For local law plans created after March 1, 2013, the 246
required benefits are the minimum benefits set forth in this 247
chapter. 248
(20)(14) “Retiree” or “retired firefighter” means a 249
firefighter who has entered retirement status. For the purposes 250
of a plan that includes a Deferred Retirement Option Plan 251
(DROP), a firefighter who enters the DROP is shall be considered 252
a retiree for all purposes of the plan. However, a firefighter 253
who enters the DROP and who is otherwise eligible to participate 254
may shall not thereby be precluded from participating, or 255
continuing to participate, in a supplemental plan in existence 256
on, or created after, March 12, 1999 the effective date of this 257
act. 258
(21)(15) “Retirement” means a firefighter’s separation from 259
city or fire district employment as a firefighter with immediate 260
eligibility for receipt of benefits under the plan. For purposes 261
of a plan that includes a Deferred Retirement Option Plan 262
(DROP), “retirement” means the date a firefighter enters the 263
DROP. 264
(22) “Special benefits” means benefits provided in a 265
defined contribution plan for firefighters. 266
(23)(16) “Special fire control district” means a special 267
district, as defined in s. 189.403(1), established for the 268
purposes of extinguishing fires, protecting life, and protecting 269
property within the incorporated or unincorporated portions of a 270
any county or combination of counties, or within any combination 271
of incorporated and unincorporated portions of a any county or 272
combination of counties. The term does not include any dependent 273
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or independent special district, as those terms are defined in 274
s. 189.403(2) and (3), respectively, the employees of which are 275
members of the Florida Retirement System pursuant to s. 276
121.051(1) or (2). 277
(24)(17) “Supplemental plan” means a plan to which deposits 278
are made to provide extra benefits for firefighters, or for 279
firefighters and police officers if both are where included 280
under this chapter. Such a plan is an element of a local law 281
plan and exists in conjunction with a defined benefit component 282
plan that meets the required minimum benefits and minimum 283
standards of this chapter. Any supplemental plan in existence on 284
March 1, 2013, shall be deemed to be a defined contribution plan 285
in compliance with s. 175.351(8). 286
(25)(18) “Supplemental plan municipality” means a any local 287
law municipality in which there existed a supplemental plan 288
existed, of any type or nature, as of December 1, 2000. 289
Section 3. Paragraph (b) of subsection (7) of section 290
175.071, Florida Statutes, is amended to read: 291
175.071 General powers and duties of board of trustees.—For 292
any municipality, special fire control district, chapter plan, 293
local law municipality, local law special fire control district, 294
or local law plan under this chapter: 295
(7) To assist the board in meeting its responsibilities 296
under this chapter, the board, if it so elects, may: 297
(b) Employ an independent enrolled actuary, as defined in 298
s. 175.032(7), at the pension fund’s expense. 299
300
If the board chooses to use the municipality’s or special 301
district’s legal counsel or actuary, or chooses to use any of 302
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the municipality’s or special district’s other professional, 303
technical, or other advisers, it must do so only under terms and 304
conditions acceptable to the board. 305
Section 4. Paragraphs (d) through (g) of subsection (1) of 306
section 175.091, Florida Statutes, are amended, and a new 307
paragraph (e) is added to that subsection, to read: 308
175.091 Creation and maintenance of fund.—For any 309
municipality, special fire control district, chapter plan, local 310
law municipality, local law special fire control district, or 311
local law plan under this chapter: 312
(1) The firefighters’ pension trust fund in each 313
municipality and in each special fire control district shall be 314
created and maintained in the following manner: 315
(d) By mandatory payment by the municipality or special 316
fire control district of a sum equal to the normal cost of and 317
the amount required to fund any actuarial deficiency shown by an 318
actuarial valuation as provided in part VII of chapter 112 after 319
taking into account the amounts described in paragraphs (b), 320
(c), (f), (g), and (h) and the amounts of the tax proceeds 321
described in paragraph (a) which must be used to fund defined 322
benefit plan benefits, except as otherwise excluded from 323
consideration in determining the mandatory payment. 324
(e) For local law plans, and in addition to the mandatory 325
payment specified in paragraph (d), by mandatory payment by the 326
municipality or special fire control district of the amount 327
specified in s. 175.351(3), if the long-term funded ratio of the 328
plan is less than 80 percent. 329
(f)(e) By all gifts, bequests, and devises when donated to 330
the fund. 331
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(g)(f) By all accretions to the fund by way of interest or 332
dividends on bank deposits, or otherwise. 333
(h)(g) By all other sources or income now or hereafter 334
authorized by law for the augmentation of such firefighters’ 335
pension trust fund. 336
337
Nothing in this section shall be construed to require 338
adjustment of member contribution rates in effect on the date 339
this act becomes a law, including rates that exceed 5 percent of 340
salary, provided that such rates are at least one-half of 1 341
percent of salary. 342
Section 5. Section 175.351, Florida Statutes, is amended to 343
read: 344
175.351 Municipalities and special fire control districts 345
that have having their own pension plans for firefighters.—For 346
any municipality, special fire control district, local law 347
municipality, local law special fire control district, or local 348
law plan under this chapter, In order for a municipality or 349
municipalities and special fire control district that has its 350
districts with their own pension plan plans for firefighters, or 351
for firefighters and police officers if both are included, to 352
participate in the distribution of the tax fund established 353
under pursuant to s. 175.101, a local law plan and its plan 354
sponsor plans must meet the required minimum benefits and 355
minimum standards set forth in this chapter. 356
(1) If a municipality has a pension plan for firefighters, 357
or a pension plan for firefighters and police officers if both 358
are included, which in the opinion of the division meets the 359
required minimum benefits and minimum standards set forth in 360
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this chapter, the board of trustees of the pension plan, must as 361
approved by a majority of firefighters of the municipality, may: 362
(a) place the income from the premium tax in s. 175.101 in 363
such pension plan for the sole and exclusive use of its 364
firefighters, or for firefighters and police officers if both 365
are included, where it shall become an integral part of that 366
pension plan and shall be used to fund benefits for firefighters 367
as follows: 368
(a) The base premium tax revenues must be used to fund base 369
benefits. 370
(b) Of the premium tax revenues received which are in 371
excess of the amount received for the 2012 calendar year, and 372
any accumulations of additional premium tax revenues that have 373
not been applied to fund extra benefits: 374
1. If the plan has a long-term funded ratio of less than 80 375
percent: 376
a. Fifty percent must be used as additional contributions 377
to pay the plan’s actuarial deficiency and may not be considered 378
in the determination of the mandatory payment described in s. 379
175.091(1)(d); 380
b. Twenty-five percent must be used to fund base benefits; 381
and 382
c. The remainder must be placed in a defined contribution 383
plan to fund special benefits. 384
2. If the plan has a long-term funded ratio of 80 percent 385
or greater: 386
a. Fifty percent must be used to fund base benefits; and 387
b. The remainder must be placed in a defined contribution 388
plan to fund special benefits. 389
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(c) Additional premium tax revenues not described in 390
paragraph (b) must be used to fund benefits that were not 391
included in the base benefits to pay extra benefits to the 392
firefighters included in that pension plan; or 393
(b) Place the income from the premium tax in s. 175.101 in 394
a separate supplemental plan to pay extra benefits to 395
firefighters, or to firefighters and police officers if 396
included, participating in such separate supplemental plan. 397
(2) Insurance premium tax revenues may not be used to fund 398
benefits provided in a defined benefit plan which were not 399
provided by the plan as of March 1, 2013; however, for a local 400
law plan created after March 1, 2013, up to 50 percent of the 401
insurance premium tax revenues may be used to fund defined 402
benefit plan component benefits and the remainder used to fund 403
defined contribution plan component benefits. 404
(3) If a plan offers benefits in excess of its required 405
benefits, such benefits may be reduced if the plan continues to 406
meet the required benefits of the plan and the minimum standards 407
set forth in this chapter. The amount of insurance premium tax 408
revenues previously used to fund benefits in excess of the 409
plan’s required benefits before the reduction must be used as 410
provided in subsection (1)(b). Twenty-five percent of the amount 411
of any mandatory contribution paid by the municipality or 412
special fire control district which was previously used to fund 413
benefits above the level of required benefits provided before 414
the reduction must be used as additional contributions as 415
specified in s. 175.091 to fund the plan’s actuarial deficiency. 416
(4)(2) The premium tax provided by this chapter shall in 417
all cases be used in its entirety to provide retirement extra 418
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benefits to firefighters, or to firefighters and police officers 419
if both are included. However, local law plans in effect on 420
October 1, 1998, must comply with the minimum benefit provisions 421
of this chapter only to the extent that additional premium tax 422
revenues become available to incrementally fund the cost of such 423
compliance as provided in s. 175.162(2)(a). If a plan is in 424
compliance with such minimum benefit provisions, as subsequent 425
additional premium tax revenues become available, they must be 426
used to provide extra benefits. Local law plans created by 427
special act before May 27, 1939, are deemed to comply with this 428
chapter. For the purpose of this chapter, the term: 429
(a) “Additional premium tax revenues” means revenues 430
received by a municipality or special fire control district 431
pursuant to s. 175.121 which exceed that amount received for 432
calendar year 1997. 433
(b) “Extra benefits” means benefits in addition to or 434
greater than those provided to general employees of the 435
municipality and in addition to those in existence for 436
firefighters on March 12, 1999. 437
(5)(3) A retirement plan or amendment to a retirement plan 438
may not be proposed for adoption unless the proposed plan or 439
amendment contains an actuarial estimate of the costs involved. 440
Such proposed plan or proposed plan change may not be adopted 441
without the approval of the municipality, special fire control 442
district, or, where permitted, the Legislature. Copies of the 443
proposed plan or proposed plan change and the actuarial impact 444
statement of the proposed plan or proposed plan change shall be 445
furnished to the division before the last public hearing 446
thereon. Such statement must also indicate whether the proposed 447
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plan or proposed plan change is in compliance with s. 14, Art. X 448
of the State Constitution and those provisions of part VII of 449
chapter 112 which are not expressly provided in this chapter. 450
Notwithstanding any other provision, only those local law plans 451
created by special act of legislation before May 27, 1939, are 452
deemed to meet the minimum benefits and minimum standards only 453
in this chapter. 454
(6)(4) Notwithstanding any other provision, with respect to 455
any supplemental plan municipality: 456
(a) A local law plan and a supplemental plan may continue 457
to use their definition of compensation or salary in existence 458
on March 12, 1999. 459
(b) Section 175.061(1)(b) does not apply, and a local law 460
plan and a supplemental plan shall continue to be administered 461
by a board or boards of trustees numbered, constituted, and 462
selected as the board or boards were numbered, constituted, and 463
selected on December 1, 2000. 464
(c) The election set forth in paragraph (1)(b) is deemed to 465
have been made. 466
(7)(5) The retirement plan setting forth the benefits and 467
the trust agreement, if any, covering the duties and 468
responsibilities of the trustees and the regulations of the 469
investment of funds must be in writing, and copies made 470
available to the participants and to the general public. 471
(8) In addition to the defined benefit component of the 472
local law plan, each plan sponsor must have a defined 473
contribution plan component within the local law plan by October 474
1, 2013, or upon the creation date of a new participating plan. 475
However, the plan sponsor of any plan established by special act 476
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of the Legislature has until July 1, 2014, to create a defined 477
contribution component within the plan. 478
(9) Notwithstanding any other provision of this chapter, a 479
municipality or special fire control district that has 480
implemented or proposed changes to a local law plan based on the 481
municipality’s or district’s reliance on an interpretation of 482
this chapter by the department on or after August 14, 2012, and 483
before March 1, 2013, may continue the implemented changes or 484
continue to implement proposed changes. Such reliance must be 485
evidenced by formal correspondence between the municipality or 486
district and the department which describes the specific changes 487
to the local law plan, with the initial correspondence from the 488
municipality or district dated prior to March 1, 2013. The 489
changes to the local law plan that are otherwise contrary to the 490
provisions of this chapter may continue in effect until the 491
earlier of October 1, 2016, or the effective date of a 492
collective bargaining agreement that is contrary to the changes 493
to the local law plan. 494
Section 6. Subsection (2) of section 185.01, Florida 495
Statutes, is amended to read: 496
185.01 Legislative declaration.— 497
(2) This chapter hereby establishes, for all municipal 498
pension plans now or hereinafter provided for under this 499
chapter, including chapter plans and local law plans, required 500
minimum benefits and minimum standards for the operation and 501
funding of such plans, hereinafter referred to as municipal 502
police officers’ retirement trust funds, which must be met as a 503
condition precedent to the plan or plan sponsor receiving a 504
distribution of insurance premium tax revenues under s. 185.10. 505
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The required minimum benefits and minimum standards for each 506
plan as set forth in this chapter may not be diminished by local 507
ordinance or by special act of the Legislature, or nor may the 508
minimum benefits or minimum standards be reduced or offset by 509
any other local, state, or federal plan that may include police 510
officers in its operation, except as provided under s. 112.65. 511
Section 7. Section 185.02, Florida Statutes, is amended to 512
read: 513
185.02 Definitions.—For any municipality, chapter plan, 514
local law municipality, or local law plan under this chapter, 515
the term following words and phrases as used in this chapter 516
shall have the following meanings, unless a different meaning is 517
plainly required by the context: 518
(1) “Additional premium tax revenues” means revenues 519
received by a municipality pursuant to s. 185.10 which exceed 520
base premium tax revenues. 521
(2)(1) “Average final compensation” means one-twelfth of 522
the average annual compensation of the 5 best years of the last 523
10 years of creditable service prior to retirement, termination, 524
or death. 525
(3) “Base benefits” means the level of benefits in 526
existence for police officers on March 12, 1999. 527
(4) “Base premium tax revenues” means revenues received by 528
a municipality pursuant to s. 185.10 equal to the amount of such 529
revenues received for calendar year 1997. 530
(5)(2) “Casualty insurance” means automobile public 531
liability and property damage insurance to be applied at the 532
place of residence of the owner, or if the subject is a 533
commercial vehicle, to be applied at the place of business of 534
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the owner; automobile collision insurance; fidelity bonds; 535
burglary and theft insurance; and plate glass insurance. 536
“Multiple peril” means a combination or package policy that 537
includes both property coverage and casualty coverage for a 538
single premium. 539
(6)(3) “Chapter plan” means a separate defined benefit 540
pension plan for police officers which incorporates by reference 541
the provisions of this chapter and has been adopted by the 542
governing body of a municipality as provided in s. 185.08. 543
Except as may be specifically authorized in this chapter, the 544
provisions of a chapter plan may not differ from the plan 545
provisions set forth in ss. 185.01-185.341 and 185.37-185.39. 546
Actuarial valuations of chapter plans shall be conducted by the 547
division as provided by s. 185.221(1)(b). 548
(7)(4) “Compensation” or “salary” means, for 549
noncollectively bargained service earned before July 1, 2011, or 550
for service earned under collective bargaining agreements in 551
place before July 1, 2011, the total cash remuneration including 552
“overtime” paid by the primary employer to a police officer for 553
services rendered, but not including any payments for extra duty 554
or special detail work performed on behalf of a second party 555
employer. A local law plan may limit the amount of overtime 556
payments which can be used for retirement benefit calculation 557
purposes; however, such overtime limit may not be less than 300 558
hours per officer per calendar year. For noncollectively 559
bargained service earned on or after July 1, 2011, or for 560
service earned under collective bargaining agreements entered 561
into on or after July 1, 2011, the term has the same meaning 562
except that when calculating retirement benefits, up to 300 563
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hours per year in overtime compensation may be included as 564
specified in the plan or collective bargaining agreement, but 565
payments for accrued unused sick or annual leave may not be 566
included. 567
(a) Any retirement trust fund or plan that meets the 568
requirements of this chapter does not, solely by virtue of this 569
subsection, reduce or diminish the monthly retirement income 570
otherwise payable to each police officer covered by the 571
retirement trust fund or plan. 572
(b) The member’s compensation or salary contributed as 573
employee-elective salary reductions or deferrals to any salary 574
reduction, deferred compensation, or tax-sheltered annuity 575
program authorized under the Internal Revenue Code shall be 576
deemed to be the compensation or salary the member would receive 577
if he or she were not participating in such program and shall be 578
treated as compensation for retirement purposes under this 579
chapter. 580
(c) For any person who first becomes a member in any plan 581
year beginning on or after January 1, 1996, compensation for 582
that plan year may not include any amounts in excess of the 583
Internal Revenue Code s. 401(a)(17) limitation, as amended by 584
the Omnibus Budget Reconciliation Act of 1993, which limitation 585
of $150,000 shall be adjusted as required by federal law for 586
qualified government plans and shall be further adjusted for 587
changes in the cost of living in the manner provided by Internal 588
Revenue Code s. 401(a)(17)(B). For any person who first became a 589
member before the first plan year beginning on or after January 590
1, 1996, the limitation on compensation may not be less than the 591
maximum compensation amount that was allowed to be taken into 592
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account under the plan as in effect on July 1, 1993, which 593
limitation shall be adjusted for changes in the cost of living 594
since 1989 in the manner provided by Internal Revenue Code s. 595
401(a)(17)(1991). 596
(8)(5) “Creditable service” or “credited service” means the 597
aggregate number of years of service and fractional parts of 598
years of service of any police officer, omitting intervening 599
years and fractional parts of years when such police officer may 600
not have been employed by the municipality subject to the 601
following conditions: 602
(a) A No police officer may not will receive credit for 603
years or fractional parts of years of service if he or she has 604
withdrawn his or her contributions to the fund for those years 605
or fractional parts of years of service, unless the police 606
officer repays into the fund the amount he or she has withdrawn, 607
plus interest as determined by the board. The member has shall 608
have at least 90 days after his or her reemployment to make 609
repayment. 610
(b) A police officer may voluntarily leave his or her 611
contributions in the fund for a period of 5 years after leaving 612
the employ of the police department, pending the possibility of 613
his or her being rehired by the same department, without losing 614
credit for the time he or she has participated actively as a 615
police officer. If he or she is not reemployed as a police 616
officer with the same department within 5 years, his or her 617
contributions shall be returned to him or her without interest. 618
(c) Credited service under this chapter shall be provided 619
only for service as a police officer, as defined in subsection 620
(11), or for military service and may not include credit for any 621
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other type of service. A municipality may, by local ordinance, 622
may provide for the purchase of credit for military service 623
occurring before employment as well as prior service as a police 624
officer for some other employer as long as the police officer is 625
not entitled to receive a benefit for such other prior service 626
as a police officer. For purposes of determining credit for 627
prior service, in addition to service as a police officer in 628
this state, credit may be given for federal, other state, or 629
county service as long as such service is recognized by the 630
Criminal Justice Standards and Training Commission within the 631
Department of Law Enforcement as provided under chapter 943 or 632
the police officer provides proof to the board of trustees that 633
such service is equivalent to the service required to meet the 634
definition of a police officer under subsection (16) (11). 635
(d) In determining the creditable service of a any police 636
officer, credit for up to 5 years of the time spent in the 637
military service of the Armed Forces of the United States shall 638
be added to the years of actual service, if: 639
1. The police officer is in the active employ of the 640
municipality before prior to such service and leaves a position, 641
other than a temporary position, for the purpose of voluntary or 642
involuntary service in the Armed Forces of the United States. 643
2. The police officer is entitled to reemployment under the 644
provisions of the Uniformed Services Employment and Reemployment 645
Rights Act. 646
3. The police officer returns to his or her employment as a 647
police officer of the municipality within 1 year after from the 648
date of his or her release from such active service. 649
(9)(6) “Deferred Retirement Option Plan” or “DROP” means a 650
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local law plan retirement option in which a police officer may 651
elect to participate. A police officer may retire for all 652
purposes of the plan and defer receipt of retirement benefits 653
into a DROP account while continuing employment with his or her 654
employer. However, a police officer who enters the DROP and who 655
is otherwise eligible to participate may shall not thereby be 656
precluded from participating, or continuing to participate, in a 657
supplemental plan in existence on, or created after, March 12, 658
1999 the effective date of this act. 659
(10) “Defined contribution plan” means the component of a 660
local law plan to which deposits are made to provide benefits 661
for police officers, or for police officers and firefighters if 662
both are included. Such component is an element of a local law 663
plan and exists in conjunction with the defined benefit 664
component that meets the required benefits and minimum standards 665
of this chapter. The retirement benefits of the defined 666
contribution plan shall be provided through individual member 667
accounts, in accordance with the applicable provisions of the 668
Internal Revenue Code and related regulations, and are limited 669
to the contributions made into each member’s account and the 670
actual accumulated earnings, net of expenses, earned on the 671
member’s account. 672
(11)(7) “Division” means the Division of Retirement of the 673
Department of Management Services. 674
(12)(8) “Enrolled actuary” means an actuary who is enrolled 675
under Subtitle C of Title III of the Employee Retirement Income 676
Security Act of 1974 and who is a member of the Society of 677
Actuaries or the American Academy of Actuaries. 678
(13)(9) “Local law municipality” is any municipality in 679
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which there exists a local law plan exists. 680
(14)(10) “Local law plan” means a retirement defined 681
benefit pension plan, which includes both a defined benefit plan 682
component and a defined contribution plan component, for police 683
officers, or for police officers and firefighters if both are, 684
where included, as described in s. 185.35, established by 685
municipal ordinance or special act of the Legislature, which 686
enactment sets forth all plan provisions. Local law plan 687
provisions may vary from the provisions of this chapter if the, 688
provided that required minimum benefits and minimum standards of 689
this chapter are met. However, any such variance must shall 690
provide a greater benefit for police officers. Actuarial 691
valuations of local law plans shall be conducted by an enrolled 692
actuary as provided in s. 185.221(2)(b). 693
(15) “Long-term funded ratio” or “funded ratio” means the 694
ratio of the actuarial value of assets of the plan to the 695
actuarial accrued liabilities of the plan, as reported in the 696
most recent actuarial valuation of the plan, deemed to be in 697
compliance with chapter 112 by the Department of Management 698
Services. 699
(16)(11) “Police officer” means any person who is elected, 700
appointed, or employed full time by a any municipality, who is 701
certified or required to be certified as a law enforcement 702
officer in compliance with s. 943.1395, who is vested with 703
authority to bear arms and make arrests, and whose primary 704
responsibility is the prevention and detection of crime or the 705
enforcement of the penal, criminal, traffic, or highway laws of 706
the state. The term This definition includes all certified 707
supervisory and command personnel whose duties include, in whole 708
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or in part, the supervision, training, guidance, and management 709
responsibilities of full-time law enforcement officers, part-710
time law enforcement officers, or auxiliary law enforcement 711
officers, but does not include part-time law enforcement 712
officers or auxiliary law enforcement officers as those terms 713
the same are defined in s. 943.10(6) and (8), respectively. For 714
the purposes of this chapter only, the term also includes 715
“police officer” also shall include a public safety officer who 716
is responsible for performing both police and fire services. Any 717
plan may provide that the police chief shall have an option to 718
participate, or not, in that plan. 719
(17)(12) “Police Officers’ Retirement Trust Fund” means a 720
trust fund, by whatever name known, as provided under s. 185.03 721
for the purpose of assisting municipalities in establishing and 722
maintaining a retirement plan for police officers. 723
(18) “Required benefits” means the lesser of the minimum 724
benefits set forth in this chapter and the base benefits of the 725
plan. For local law plans created after March 1, 2013, the 726
required benefits are the minimum benefits set forth in this 727
chapter. 728
(19)(13) “Retiree” or “retired police officer” means a 729
police officer who has entered retirement status. For the 730
purposes of a plan that includes a Deferred Retirement Option 731
Plan (DROP), a police officer who enters the DROP is shall be 732
considered a retiree for all purposes of the plan. However, a 733
police officer who enters the DROP and who is otherwise eligible 734
to participate may shall not thereby be precluded from 735
participating, or continuing to participate, in a supplemental 736
plan in existence on, or created after, March 12, 1999 the 737
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effective date of this act. 738
(20)(14) “Retirement” means a police officer’s separation 739
from city employment as a police officer with immediate 740
eligibility for receipt of benefits under the plan. For purposes 741
of a plan that includes a Deferred Retirement Option Plan 742
(DROP), “retirement” means the date a police officer enters the 743
DROP. 744
(21) “Special benefits” means benefits provided in a 745
defined contribution plan for police officers. 746
(22)(15) “Supplemental plan” means a plan to which deposits 747
of the premium tax moneys as provided in s. 185.08 are made to 748
provide extra benefits to police officers, or police officers 749
and firefighters if both are where included, under this chapter. 750
Such a plan is an element of a local law plan and exists in 751
conjunction with a defined benefit component plan that meets the 752
required minimum benefits and minimum standards of this chapter. 753
Any supplemental plan in existence on March 1, 2013, shall be 754
deemed to be defined contribution plan in compliance with s. 755
185.35(8). 756
(23)(16) “Supplemental plan municipality” means a any local 757
law municipality in which there existed a supplemental plan 758
existed as of December 1, 2000. 759
Section 8. Paragraph (b) of subsection (6) of section 760
185.06, Florida Statutes, is amended to read: 761
185.06 General powers and duties of board of trustees.—For 762
any municipality, chapter plan, local law municipality, or local 763
law plan under this chapter: 764
(6) To assist the board in meeting its responsibilities 765
under this chapter, the board, if it so elects, may: 766
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(b) Employ an independent enrolled actuary, as defined in 767
s. 185.02(8), at the pension fund’s expense. 768
769
If the board chooses to use the municipality’s or special 770
district’s legal counsel or actuary, or chooses to use any of 771
the municipality’s other professional, technical, or other 772
advisers, it must do so only under terms and conditions 773
acceptable to the board. 774
Section 9. Paragraphs (d) through (g) of subsection (1) of 775
section 185.07, Florida Statutes, are amended, and a new 776
paragraph (e) is added to that subsection, to read: 777
185.07 Creation and maintenance of fund.—For any 778
municipality, chapter plan, local law municipality, or local law 779
plan under this chapter: 780
(1) The municipal police officers’ retirement trust fund in 781
each municipality described in s. 185.03 shall be created and 782
maintained in the following manner: 783
(d) By payment by the municipality or other sources of a 784
sum equal to the normal cost and the amount required to fund any 785
actuarial deficiency shown by an actuarial valuation as provided 786
in part VII of chapter 112 after taking into account the amounts 787
described in paragraphs (b), (c), (f), (g), and (h) and the 788
amounts of the tax proceeds described in paragraph (a) which 789
must be used to fund defined benefit plan benefits, except as 790
otherwise excluded from consideration in determining the 791
mandatory payment. 792
(e) For local law plans, and in addition to the mandatory 793
payment described in paragraph (d), by mandatory payment by the 794
municipality of the amount specified in s. 185.35(3), if the 795
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long-term funded ratio of the plan is less than 80 percent. 796
(f)(e) By all gifts, bequests and devises when donated to 797
the fund. 798
(g)(f) By all accretions to the fund by way of interest or 799
dividends on bank deposits or otherwise. 800
(h)(g) By all other sources of income now or hereafter 801
authorized by law for the augmentation of such municipal police 802
officers’ retirement trust fund. 803
804
Nothing in this section shall be construed to require 805
adjustment of member contribution rates in effect on the date 806
this act becomes a law, including rates that exceed 5 percent of 807
salary, provided that such rates are at least one-half of 1 808
percent of salary. 809
Section 10. Section 185.35, Florida Statutes, is amended to 810
read: 811
185.35 Municipalities that have having their own retirement 812
pension plans for police officers.—For any municipality, chapter 813
plan, local law municipality, or local law plan under this 814
chapter, In order for a municipality that has municipalities 815
with its their own retirement plan pension plans for police 816
officers, or for police officers and firefighters if both are 817
included, to participate in the distribution of the tax fund 818
established under pursuant to s. 185.08, a local law plan and 819
its plan sponsor plans must meet the required minimum benefits 820
and minimum standards set forth in this chapter: 821
(1) If a municipality has a retirement pension plan for 822
police officers, or for police officers and firefighters if both 823
are included, which, in the opinion of the division, meets the 824
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required minimum benefits and minimum standards set forth in 825
this chapter, the board of trustees of the pension plan must, as 826
approved by a majority of police officers of the municipality, 827
may: 828
(a) place the income from the premium tax in s. 185.08 in 829
such pension plan for the sole and exclusive use of its police 830
officers, or its police officers and firefighters if included, 831
where it shall become an integral part of that pension plan and 832
shall be used to fund benefits for police officers as follows: 833
(a) The base premium tax revenues must be used to fund base 834
benefits. 835
(b) Of the premium tax revenues received which are in 836
excess of the amount received for the 2012 calendar year, and 837
any accumulations of additional premium tax revenues which have 838
not been applied to fund extra benefits: 839
1. If the plan has a long-term funded ratio of less than 80 840
percent: 841
a. Fifty percent must be used as additional contributions 842
to pay the plan’s actuarial deficiency and may not be considered 843
in the determination of the mandatory payment described in s. 844
185.07(1)(d); 845
b. Twenty-five percent must be used to fund base benefits; 846
and 847
c. The remainder must be placed in a defined contribution 848
plan to fund special benefits. 849
2. If the plan has a long-term funded ratio of 80 percent 850
or greater: 851
a. Fifty percent must be used to fund base benefits; and 852
b. The remainder must be placed in a defined contribution 853
Florida Senate - 2013 COMMITTEE AMENDMENT
Bill No. CS for SB 458
Ì326778]Î326778
Page 31 of 36
3/25/2013 4:43:30 PM 576-02935-13
plan to fund special benefits. 854
(c) Additional premium tax revenues not described in 855
paragraph (b) must be used to fund benefits that were not 856
included in the base benefits pay extra benefits to the police 857
officers included in that pension plan; or 858
(b) May place the income from the premium tax in s. 185.08 859
in a separate supplemental plan to pay extra benefits to the 860
police officers, or police officers and firefighters if 861
included, participating in such separate supplemental plan. 862
(2) Insurance premium tax revenues may not be used to fund 863
benefits provided in a defined benefit plan which were not 864
provided by the plan as of March 1, 2013; however, for a local 865
law plan created after March 1, 2013, up to 50 percent of the 866
insurance premium tax revenues may be used to fund defined 867
benefit plan component benefits and the remainder used to fund 868
defined contribution plan component benefits. 869
(3) If a plan offers benefits in excess of its required 870
benefits, such benefits may be reduced if the plan continues to 871
meet the required benefits of the plan and the minimum standards 872
set forth in this chapter. The amount of insurance premium tax 873
revenues previously used to fund benefits in excess of the 874
plan’s required benefits before the reduction must be used as 875
provided in subsection (1)(b). Twenty-five percent of the amount 876
of any mandatory contribution paid by the municipality or 877
special fire control district which was previously used to fund 878
benefits above the level of required benefits provided before 879
the reduction must be used as additional contributions as 880
specified in s. 185.07 to fund the plan’s actuarial deficiency. 881
(4)(2) The premium tax provided by this chapter shall in 882
Florida Senate - 2013 COMMITTEE AMENDMENT
Bill No. CS for SB 458
Ì326778]Î326778
Page 32 of 36
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all cases be used in its entirety to provide retirement extra 883
benefits to police officers, or to police officers and 884
firefighters if both are included. However, local law plans in 885
effect on October 1, 1998, must comply with the minimum benefit 886
provisions of this chapter only to the extent that additional 887
premium tax revenues become available to incrementally fund the 888
cost of such compliance as provided in s. 185.16(2). If a plan 889
is in compliance with such minimum benefit provisions, as 890
subsequent additional tax revenues become available, they shall 891
be used to provide extra benefits. Local law plans created by 892
special act before May 27, 1939, shall be deemed to comply with 893
this chapter. For the purpose of this chapter, the term: 894
(a) “Additional premium tax revenues” means revenues 895
received by a municipality pursuant to s. 185.10 which exceed 896
the amount received for calendar year 1997. 897
(b) “Extra benefits” means benefits in addition to or 898
greater than those provided to general employees of the 899
municipality and in addition to those in existence for police 900
officers on March 12, 1999. 901
(5)(3) A retirement plan or amendment to a retirement plan 902
may not be proposed for adoption unless the proposed plan or 903
amendment contains an actuarial estimate of the costs involved. 904
Such proposed plan or proposed plan change may not be adopted 905
without the approval of the municipality or, where permitted, 906
the Legislature. Copies of the proposed plan or proposed plan 907
change and the actuarial impact statement of the proposed plan 908
or proposed plan change shall be furnished to the division 909
before the last public hearing thereon. Such statement must also 910
indicate whether the proposed plan or proposed plan change is in 911
Florida Senate - 2013 COMMITTEE AMENDMENT
Bill No. CS for SB 458
Ì326778]Î326778
Page 33 of 36
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compliance with s. 14, Art. X of the State Constitution and 912
those provisions of part VII of chapter 112 which are not 913
expressly provided in this chapter. Notwithstanding any other 914
provision, only those local law plans created by special act of 915
legislation before May 27, 1939, are deemed to meet the minimum 916
benefits and minimum standards only in this chapter. 917
(6)(4) Notwithstanding any other provision, with respect to 918
any supplemental plan municipality: 919
(a) Section 185.02(7)(a) 185.02(4)(a) does not apply, and a 920
local law plan and a supplemental plan may continue to use their 921
definition of compensation or salary in existence on March 12, 922
1999. 923
(b) A local law plan and a supplemental plan must continue 924
to be administered by a board or boards of trustees numbered, 925
constituted, and selected as the board or boards were numbered, 926
constituted, and selected on December 1, 2000. 927
(c) The election set forth in paragraph (1)(b) is deemed to 928
have been made. 929
(7)(5) The retirement plan setting forth the benefits and 930
the trust agreement, if any, covering the duties and 931
responsibilities of the trustees and the regulations of the 932
investment of funds must be in writing and copies made available 933
to the participants and to the general public. 934
(8) In addition to the defined benefit component of the 935
local law plan, each plan sponsor must have a defined 936
contribution plan component within the local law plan by October 937
1, 2013, or upon the creation date of a new participating plan. 938
However, the plan sponsor of any plan established by special act 939
of the Legislature has until July 1, 2014, to create a defined 940
Florida Senate - 2013 COMMITTEE AMENDMENT
Bill No. CS for SB 458
Ì326778]Î326778
Page 34 of 36
3/25/2013 4:43:30 PM 576-02935-13
contribution component within the plan. 941
(9) Notwithstanding any other provision of this chapter, a 942
municipality that has implemented or proposed changes to a local 943
law plan based on the municipality’s reliance on an 944
interpretation of this chapter by the department on or after 945
August 14, 2012 and before March 1, 2013, may continue the 946
implemented changes or continue to implement proposed changes. 947
Such reliance must be evidenced by formal correspondence between 948
the municipality and the department which describes the specific 949
changes to the local law plan, with the initial correspondence 950
from the municipality dated prior to March 1, 2013. The changes 951
to the local law plan which are otherwise contrary to the 952
provisions of this chapter may continue in effect until the 953
earlier of October 1, 2016, or the effective date of a 954
collective bargaining agreement that is contrary to the changes 955
to the local law plan. 956
Section 11. The Legislature finds that a proper and 957
legitimate state purpose is served when employees and retirees 958
of the state and its political subdivisions, and the dependents, 959
survivors, and beneficiaries of such employees and retirees, are 960
extended the basic protections afforded by governmental 961
retirement systems that provide fair and adequate benefits and 962
that are managed, administered, and funded in an actuarially 963
sound manner as required by s. 14, Article X of the State 964
Constitution and part VII of chapter 112, Florida Statutes. 965
Therefore, the Legislature determines and declares that this act 966
fulfills an important state interest. 967
Section 12. This act shall take effect July 1, 2013. 968
969
Florida Senate - 2013 COMMITTEE AMENDMENT
Bill No. CS for SB 458
Ì326778]Î326778
Page 35 of 36
3/25/2013 4:43:30 PM 576-02935-13
970
================= T I T L E A M E N D M E N T ================ 971
And the title is amended as follows: 972
Delete everything before the enacting clause 973
and insert: 974
A bill to be entitled 975
An act relating to firefighter and police officer 976
pension plans; amending s. 175.021, F.S.; revising the 977
legislative declaration to require all plans to meet 978
the requirements of ch. 175, F.S., in order to receive 979
insurance premium tax revenues; amending s. 175.032, 980
F.S.; revising definitions to conform to changes made 981
by the act and adding new definitions; amending s. 982
175.071, F.S.; conforming a cross-reference; amending 983
s. 175.091, F.S.; revising existing payment provisions 984
and providing for an additional mandatory payment by 985
the municipality or special fire control district to 986
the firefighters’ pension trust fund; amending s. 987
175.351, F.S., relating to municipalities and special 988
fire control districts that have their own pension 989
plans and want to participate in the distribution of a 990
tax fund; revising criteria governing the use of 991
income from the premium tax; requiring plan sponsors 992
to have a defined contribution plan in place by a 993
certain date; authorizing a municipality to implement 994
certain changes to a local law plan which are contrary 995
to ch. 175, F.S., under certain time-limited 996
circumstances; amending s. 185.01, F.S.; revising the 997
legislative declaration to require all plans to meet 998
Florida Senate - 2013 COMMITTEE AMENDMENT
Bill No. CS for SB 458
Ì326778]Î326778
Page 36 of 36
3/25/2013 4:43:30 PM 576-02935-13
the requirements of ch. 185, F.S., in order to receive 999
insurance premium tax revenues; amending s. 185.02, 1000
F.S.; revising definitions to conform to changes made 1001
by the act and adding new definitions; deleting a 1002
provision allowing a local law plan to limit the 1003
amount of overtime payments which can be used for 1004
retirement benefit calculations; amending s. 185.06, 1005
F.S.; conforming a cross-reference; amending s. 1006
185.07, F.S.; revising existing payment provisions and 1007
providing for an additional mandatory payment by the 1008
municipality to the police officers’ retirement trust 1009
fund; amending s. 185.35, F.S., relating to 1010
municipalities that have their own pension plans for 1011
police officers and want to participate in the 1012
distribution of a tax fund; revising criteria 1013
governing the use of income from the premium tax; 1014
requiring plan sponsors to have a defined contribution 1015
plan in place by a certain date; authorizing a 1016
municipality to implement certain changes to a local 1017
law plan which are contrary to ch. 185, F.S., under 1018
certain time-limited circumstances; providing a 1019
declaration of important state interest; providing an 1020
effective date. 1021
Pension Resource Centers
Accounts Payable Check Register
FOR: PALM BEACH GARDENS POLICE
Check Number Date Payee and Description Amount
2467February 6, 2013Pension Resource Centers $2,638.52
Administration Fee- March 2013
2468February 6, 2013Thistle Asset Consulting Inc $4,812.00
Performance Monitoring thru 12/31/12
2469February 6, 2013Rhumbline Advisers $4,717.00
Investment Management Fee- 4th Qtr 2012
2470February 6, 2013Gabriel Roeder Smith and Company $2,137.00
Actuarial Services Rendered 12/31/12
2471February 6, 2013ICC Capital Management $25,334.05
Investment Management Fees- 4th Qtr 2012
2472February 6, 2013Perry & Jensen, LLC $475.95
Legal Services Rendered through 1/15/13
2473February 13, 2013Marc Glass $324.13
Travel Reimbursement for January 2013 Travel
2474March 1, 2013City of Palm Beach Gardens $13,621.62
Retiree Insurance
2475March 6, 2013Pension Resource Centers $2,575.00
Administration Fee- March 2013
2476March 6, 2013Cherry, Bekeart & Holland $14,500.00
Final Billing on 9/30/12 Audit
2477March 6, 2013Cherry, Bekeart & Holland $350.00
Final Billing on 9/30/12 Audit
2478March 6, 2013Gabriel Roeder Smith and Company $2,018.00
Actuarial Services Rendered 2/01/13
2479March 6, 2013Perry & Jensen, LLC $1,044.74
Legal Services Rendered through 2/15/13
2480April 1, 2013City of Palm Beach Gardens $13,650.70
Retiree Insurance
2481April 4, 2013Pension Resource Centers $2,583.97
Administration Fee- April 2013
2482April 4, 2013Gabriel Roeder Smith and Company $2,983.00
Actuarial Services Rendered 2/28/13
2483April 4, 2013Omni Orlando Resort at Championsgate $540.00
Registration 6/23/13 - 6/26/13 for Marc Glass
2484April 4, 2013FPPTA $500.00
June Conference Registration for Marc Glass
2485April 4, 2013Perry & Jensen, LLC $578.58
Legal Services Rendered through 3/15/13
2486April 4, 2013Florida State University, CAPD 250.00
Division of Retirement School Registration for Jay Spencer
2487April 4, 2013DoubleTree by Hilton Hotel Tallahassee $297.00
Hotel Registration for 5/19/13 - 5/22/13 for Jay Spencer
2488April 4, 2013VOID - Printing Error $0.00
$95,931.26
Chiar___________________________
Secretary___________________________
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Minutes 1-31-13.doc
Page 1 of 6
City of Palm Beach Gardens Police Officers’
Pension Fund
Minutes of the Meeting Held
January 31, 2013
The regular meeting of the Board of Trustees of the City of Palm Beach Gardens
Police Officers’ Pension Fund was called to order at 9:05 AM by Jay Spencer in the
Council Chambers at the Palm Beach Gardens City Hall at 10500 North Military Trail,
Palm Beach Gardens, Florida.
TRUSTEES PRESENT OTHERS PRESENT
Jay Spencer, Chairman Audrey Ross (Resource Centers)
David Pierson, Secretary Bonni Jensen (Law Offices of Perry & Jensen)
Brad Seidensticker, Trustee Donna Kramer (PBG Clerk’s Office)
Greg Mull, Trustee Denise D’Entremont (RhumbLine Advisors)
John McCann (Thistle Asset Consulting)
Jonathan Davidson (KTMC)
Jim Burdick (Cherry Bekeart)
CLASS ACTION REPORT
Kessler, Topaz, Meltzer & Check (KTMC) – Presented by Jonathan Davidson
Mr. Davidson introduced himself and stated that he was here today because a
settlement has been reached Medtronic, Inc. and the fund should be receiving a
check for this shortly (the amount is still unknown at this time). He also reviewed
the quarterly litigation report that his firm provides and commented that there is
another class action lawsuit that is currently pending. Mr. Davidson discussed the
filing process and explained that they have access to the Plans transaction history so
that way they are able to review all trades. He noted that the plan does have online
access as well, if any of the Trustees are interested. He continued to explain that if
they do find a trade that was not valid, then his firm will start the class action filing
process and will actually file all the forms on behalf of the fund. Mr. Davidson
explained that the Plan’s Custodian, Salem Trust also provides this type of service to
the board and therefore there could be duplicate documents being filed, which could
ultimately have a negative impact on the Plan. Ms. Jensen reminded the Trustees
that a couple of months ago Salem Trust issued a letter to the board stating that
they were going to start charging for the class action services that they provide.
Shortly after that letter was issued, Salem Trust sent out another letter redacting the
first one. The second letter stated that since it was currently in their contract to
provide these services for the boards and they will continue to do so for now, but
Salem Trust may come back at a later date and revisit their contract. With that said,
Mr. Davidson stated that he would like the boards permission to keep on filing the
class actions on behalf of the fund, but to also direct Salem Trust to stop filing so
that there is no negative impact on the fund for multiple class action filings. Lastly
Mr. Davidson reminded the board that the service his firm provides is free of charge.
The Trustees discussed and commented that they understood that both parties did
not need to be filing on behalf of the fund.
MOTION: Mr. Seidensticker made a motion to allow KTMC to continue
performing the class action services that they are currently
providing on behalf of the fund, and to also authorize the Chair
to execute the direction letter to Salem Trust to notify them to
Minutes 1-31-13.doc
Page 2 of 6
cease the class action filing services that they are currently
providing.
SECOND: Mr. Pierson seconded the motion.
CARRIED: The motion carried unanimously 4-0.
PRESENTATION OF THE SEPTEMBER 30, 2012 AUDITED FINANCIAL
STATEMENTS
Cherry Bekaert – Presented by Jim Burdick
Mr. Burdick welcomed himself back and stated that it was a clean audit for the fiscal
year ending September 30, 2012. He also noted that there were no significant
changes from last year to this year. Mr. Burdick reported on the required
communications under GASB and noted that an unqualified opinion was issued,
which is the highest level that can be issued. He reviewed the internal controls and
commented that there were no material weaknesses, deficiencies, or no reportable
noncompliances that were found while performing the audit. Mr. Burdick did note
that there are new GASB requirements that will change the disclosure of the financial
statements, but this change is not effective until September 30, 2014. Also he noted
that the plan still does need to sign the audit representation letter before the final
audit is released. The representation letter is currently being reviewed by Mr.
Burdick’s partner, and then it will be sent over to the Administrator to be executed
by the Chair. Mr. Burdick commented that the letter will not change any of the
numbers or assets being reported here today.
Mr. Burdick reviewed and compared the Plan’s assets from 2011 to 2012. The net
assets did increase in 2012 to $55,261,152 from $44,279,384 in 2011. Although the
City’s contributions did decrease from $3,885,572 in 2011 to $3,785,539 in 2012, as
well as the employees’ contributions decreased to $559,305 in 2012 (from $690,226
in 2011). Therefore Mr. Burdick reported that the plan had a net increase this year
of $10,981,768, which is up from last year at $2,875,532. Lastly he reviewed the
benefit payments which increased this year, and the administrative expenses which
decreased.
MOTION: Mr. Mull made a motion to approve the September 30, 2012
Audited Financial statements as presented by the Plan’s
Auditor.
SECOND: Mr. Seidensticker seconded the motion.
CARRIED: The motion carried unanimously 4-0.
INVESTMENT MANAGER REPORT
RhumbLine Advisors – Presented by Denise D’Entremont
Ms. D’Entroment commented that it has been a couple of years since she has been
here to visit the board, but welcomed herself back. Mr. McCann asked her to explain
how the index funds are actually beating the index. Ms. D’Entremont stated that
they don’t trade every day which decreases their turnover and saves cost. She also
noted that it also has to do with the timing of when they put the money into the
market place to be invested. She explained their investment process and noted that
all new contributions are isolated into a separate investment account and are
invested the day that they receive the money. Ms. D’Entremont reported that they
only trade when there are contributions or withdrawals to the fund, or when
dividends build up in the account. Therefore trading only takes place about once a
month.
Minutes 1-31-13.doc
Page 3 of 6
Ms. D’Entremont reviewed each accounts performance. The S&P 500 made 15.96%
for the fiscal year ending September 30, 2012, but for the last quarter they were
down -0.36% versus the benchmark at -0.38%. Since inception the fund has been
up 1.91% each year versus the benchmark at 1.77%. The S&P 600 has performed
very well and is 2.22% for the quarter ending December 31, 2012. Since inception
this fund has outperformed by 8.24% versus the benchmark at 8.19%. Lastly the
S&P 400 is also outperforming the year and since inception at 3.57% and 10.37%
respectively. Ms. D’Entremont announced that altogether this plan has $10M since
inception, which is almost double their initial investment. She also noted that the
fee for all 3 accounts combined together is less than 10 basis points, which is a huge
discount.
Lastly Ms. D’Entremont reported that RhumbLine also has a fixed income product,
which currently has about $3M in assets. She noted that the fixed income product
has been around since 2005 and the return since then is 5.67%. Also RhumbLine
just recently funded an emerging market product, but this is a custom fund for 1
client, although they eventually hope to open more funds down the road.
INVESTMENT CONSULTANT REPORT
Thistle Asset Consulting – Presented by John McCann
Mr. McCann reviewed the Callen periodic table of investment returns worksheet for
2012. He noted that it is a mirror image of last years table and that the emerging
markets will more than likely be at the bottom of the chart this year. Mr. McCann
commented that this is why he would like the board to consider moving into
emerging markets at this time. The fund’s risk may increase, but it will add value to
the fund and it will also diversify the portfolio some more. Mr. McCann stated that
he will bring back more detailed information on emerging markets to the next
meeting. The Trustees concurred.
Mr. McCann reviewed the report for the quarter ending December 31, 2012 and
stated that it was a great quarter for International. He reviewed the Plan’s
compliance checklist and noted that the total fund is trailing for the 3 year period.
As of December 31, 2012 there was $54.7M in assets, which was a gain of $668K
during the quarter. Mr. McCann reviewed the asset allocation and commented that
the fund will add another $1.5M to American Realty on April 1, 2013, which will more
the real estate allocation up to 5%. For the quarter the total fund outperformed the
benchmark net of fees at 1.23% versus 0.98%, but for the year they are slightly
behind the benchmark net of fees at 11.89% versus 12.14%. Lastly he reviewed the
risk versus reward chart and reported that the plan is currently taking a little more
risk then in the past, but is still getting an average return. Therefore that is why the
board would want to explore into diversifying their portfolio some more.
ATTORNEY REPORT
Law Offices of Perry & Jensen - Presented by Bonni Jensen
Ms. Jensen reviewed the American Realty agreement regarding the board’s $1.5M
commitment on April 1, 2013. She noted that these funds would be coming from the
ICC Capital portfolio.
MOTION: Mr. Seidensticker made a motion to approve the American
Realty agreement regarding the board’s $1.5M commitment on
April 1, 2013.
SECOND: Mr. Pierson seconded the motion.
Minutes 1-31-13.doc
Page 4 of 6
CARRIED: The motion carried unanimously 4-0.
Ms. Jensen noted that the IRS mileage reimbursement rate increased to $0.565
effective January 1, 2013.
Ms. Jensen explained that she received a letter from the City asking the board’s
permission to use the GRS valuation data to review some benefits. She stated that
the City wants to use the information that is provided to GRS from the City and
Administrator for their own studies. Mr. Owens briefly explained the options that the
City is looking to explore and also explained why it would be easier to use the pre-
existing data. He also noted that the City will pay for any cost that this request may
incur. The Trustees discussed and stated that they did not foresee a problem with
the City using the data information that is sent to GRS on an annual basis for
Valuation purposes, as this information is all considered public records anyways.
Ms. Jensen reviewed the current DROP distribution policy. Currently the policy
allows for distributions to take place on a quarterly basis and the Trustees would like
to change the open enrollment period to a monthly basis. The Board discussed and
Mrs. Ross noted that if they were to move forward with the change, all applications
would need to be by the 15th of each month for a distribution on the following 1st
business day of the month. Also the Trustees stated that any distribution over $35K
must be approved by the board of Trustees prior to a payment being issued.
MOTION: Mr. Pierson made a motion to authorize the Plan’s Attorney to
revise the DROP Distribution policy to allow distributions to
take place on a monthly basis, and to also include the
guidelines stated above.
SECOND: Mr. Seidensticker seconded the motion.
CARRIED: The motion carried unanimously 4-0.
Ms. Jensen briefly spoke about Senate Bill 458 which is currently in the Legislative
session right now. She reviewed some of the things that this bill would change, such
as: it would add a floor to the City’s contribution rate and it would guide the pension
plans on how to distribute the premium tax monies. Ms. Jensen commented that she
will send out a memo regarding the changes once the bills have been passed.
ADMINISTRATOR REPORT
Resource Centers – Presented by Audrey Ross
Ms. Ross presented the board with the Salem Trust class action report for the
quarter ending December 31, 2012. She noted that there were no new class actions
filed on behalf of the fund and there were no new settlements received in during the
quarter either.
MOTION: Mr. Seidensticker made a motion to pay out the non-duty death
benefit to the Estate of Mr. Thomas Juric.
SECOND: Mr. Pierson seconded the motion.
CARRIED: The motion carried unanimously 5-0.
Ms. Ross explained that the Plan’s local checking account is held at BB&T, formally
Bank Atlantic. She stated that BB&T has slightly different rules from Bank Atlantic in
regards to benefit payments falling on a holiday or a weekend. Therefore the board
needs to give direction regarding when a benefit should be paid if the first of the
Minutes 1-31-13.doc
Page 5 of 6
month falls on a weekend or holiday. Does the board want the payment to be issued
on the last business day of the prior month if the first falls on a weekend or a
holiday, or should the payment be issued on the first business day of that current
month (for example: if January 1st falls on a Saturday, should the payments be
issued Friday December 31, or should they be issued Monday January 3)? The
Trustees discussed and noted that during the holidays there could be a longer hold
up (other than just the weekend), so they rather their retirees get paid sooner rather
than later.
MOTION: Mr. Seidensticker made a motion to authorize the pension
department and BB&T to issue pension payments on the last
business day of the prior month if the first of the month falls on
a weekend or holiday.
SECOND: Mr. Pierson seconded the motion.
CARRIED: The motion carried unanimously 4-0.
Ms. Ross noted that she had to get the Salem Trust authorized signors form updated
today because Salem Trust requires an update every 3 years.
MINUTES
MOTION: Mr. Pierson made a motion to approve the minutes from the
November 28, 2013 regular meeting.
SECOND: Mr. Seidensticker seconded the motion.
CARRIED: The motion carried unanimously 4-0.
*Ms. Ross noted that Mr. Spencer abstained from a benefit approval vote last
meeting due to his own benefit approval being presented. She noted that he did fill
out the required Form 8b following the meeting and that form is attached to the
original signed copy of the minutes on file.
DISBURSEMENTS APPROVALS
MOTION: Mr. Seidensticker made a motion to approve the
disbursements.
SECOND: Mr. Pierson seconded the motion.
CARRIED: The motion carried unanimously 4-0.
BENEFIT APPROVALS
MOTION: Mr. Seidensticker made a motion to approve the applications to
enter the DROP for Avrham Tawil and Eleanora Lovejoy, the
application to exit the DROP for Jules Barone, the applications
for distribuions from DROP accounts for Wayne Sidey, Ronald
Council, and George Betscha, and the application for a refund of
contributions for Curtis Riddick.
SECOND: Mr. Pierson seconded the motion.
CARRIED: The motion carried unanimously 4-0.
Minutes 1-31-13.doc
Page 6 of 6
FINANCIAL STATEMENTS
The board reviewed and discussed the financial statements that were provided
through December 2012.
The board received and filed the financial statements through December
2012.
OTHER BUSINESS
Ms. Ross stated that GRS will start working on the analysis that the board requested
once the 9/30/2012 Valuation is completed so that they can use current numbers.
PUBLIC COMMENTS
N/A
AJOURN
There being no further business, the Trustees officially adjourned the meeting at
11:41 AM. The next meeting is scheduled for Tuesday April 23, 2013 at 9AM.
Respectfully submitted,
_____________________________
DAVID PIERSON, Secretary
PAGE
Market Snapshot 1
Index Comparisons 2
Compliance Report 3
Total Portfolio Pie Chart 4
Manager Pie Chart 5
Asset Allocation Table 6
Gain/Loss Table 7
Total Ranks Table 8
Manager Ranks 9
Scatterplot Graphs:
Total Fund Graph 11
Rhumbline Equities Graph 12
ICC Fixed income Graph 13
Beta Graph 14
Alpha Graph 15
Beta/Alpha Table 16
Batting Average Graph 17
Batting Average/R-Squared Table 18
Other Managers' Page 19
Palm Beach Gardens Police Pension Fund
Executive Summary Report
Table of Contents
SECTION
Page 2
Index Comparison
March 31, 2013
-10.00
0.00
10.00
20.00
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
13.21% R2000G
-0.16% BCGC
18.77% R1000V
4.64% BCIGC
14.75% R2000G
3.04% 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? [68th]
Did the total return of the fund over the trailing 3-year period equal or exceed 7.5% (actuarial assumption rate of return)?
[9.64 vs. 7.50]
TOTAL FIXED INCOME
Did the fixed income return, over the trailing 3-year period, exceed the 89% BCGC and 11% Non-US World Gov't Bond?
[5.59 vs. 5.32]
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 BCGC? [4.87 vs. 5.15]
Did the fixed income return, over the trailing 3-year period, rank in the top 40% of the Mobius Broad Fixed Income
Universe? [59th]
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
March 31, 2013
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? [12.43 vs. 12.45]
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? [6.95 vs. 6.32]
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? [7th]
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? [5th]
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% BCGC , 4% Non US $ World Gov. Bond & 2% RE? [9.64 vs. 10.27]
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? [52nd]
1.
No
2.
No
3.
Yes - Mike Mara, a member of the QSG team left in February 2013 to pursue other career opportunities.
4.
No
5.
No
6.
No
7.
No
8.
No
9.
0.00%
10.
No
11.
Steven Stack, CRCP - Chief Compliance Officer ICC Capital Management, Inc.
Page 3a
Manager Compliance Questionnaire
March 31, 2013
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 4
Palm Beach Gardens Police Pension Fund
Total Assets
March 31, 2013
Equities
66%
Fixed Income
28%
Real Estate
2%
Cash
4%
Equities Fixed Income Real Estate Cash
Page 5
Palm Beach Gardens Police Pension Fund
Total Assets
March 31, 2013
Rhumbline S&P500
25%
Rhumbline S&P400
11%
Rhumbline S&P600
11% Intl. Equity
7%
ICC Lg. Growth
12%
Intl. Bonds
2%
ICC Fixed
30%
American Realty
2%
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 $15,099,000 $0 $0 $0 $15,099,000 25.4%
25.0%
Rhumbline S&P400 $6,466,000 $0 $0 $0 $6,466,000 10.9%
10.0%
Rhumbline S&P600 $6,345,000 $0 $0 $0 $6,345,000 10.7%
10.0%
Intl. Equity $4,099,000 $0 $0 $0 $4,099,000 6.9%
10.0%
ICC Lg. Growth $6,929,000 $0 $0 $0 $6,929,000 11.7%
10.0%
Intl. Bonds $0 $1,555,000 $0 $0 $1,555,000 2.6%
4.0%
ICC Fixed $0 $15,226,000 $0 $2,563,000 $17,789,000 30.0%
29.0%
$0 $0 $1,054,000 $0 $1,054,000 1.8%
2.0%
Total $38,938,000 $16,781,000 $1,054,000 $2,563,000 $59,336,000 100.0%
100.0%
% of Total 65.6%28.3%1.8%4.3%100.0%
Target %65.0%33.0%2.0%0.0%100.0%
Page 6
Palm Beach Gardens Police Pension Fund
Performance Evaluation Summary
March 31, 2013
American Realty
Portfolio Last Qtr. MV Net Flows Inv G(L)This Qtr. MV
Total Fund $55,255,000 $211,000 $3,870,000 $59,336,000
Total Equities $34,893,000 $146,000 $3,898,000 $38,937,000
ICC Large Growth $5,942,000 $135,000 $851,000 $6,929,000
Rhumbline S&P 500 $13,655,000 $0 $1,444,000 $15,099,000
Rhumbline S&P 400 $5,701,000 $0 $765,000 $6,466,000
Rhumbline S&P 600 $5,677,000 $0 $668,000 $6,345,000
Intlernational Equity $3,919,000 $0 $181,000 $4,099,000
Intlernational Bonds $1,573,000 $0 -$18,000 $1,555,000
ICC Fixed Income $15,561,000 -$318,000 -$17,000 $15,226,000
Real Estate $1,043,000 -$12,000 $23,000 $1,054,000
Page 7
Palm Beach Gardens Police Pension Fund
Performance Evaluation Summary
March 31, 2013
Current Fiscal Year
Quarter FYTD One Year Three Years Five Years 2012 2011 2010 2009 2008
Return 6.98%8.31%10.60%9.64%6.68%18.63%0.22%10.09%5.62%-13.73%
Ranking (*)23 50 47 52 13 87 36 40 6 29
Policy Return (**)6.51%7.61%10.39%10.27%6.48%19.60%1.76%10.82%1.64%-12.83%
Policy Ranking (*)52 74 53 28 17 71 6 30 53 17
Return 11.18%13.29%14.87%12.43%6.95% 28.59%-2.62%12.36%-1.00%-23.28%
Ranking (***)5 11 11 7 5 9 49 16 18 75
Policy Ranking (***)24 41 24 7 15 22 8 32 70 31
Return -0.30%-0.26%4.13%5.59%4.87%5.83%4.78%7.63%11.10%0.54%
Ranking (Broad Fixed)93 92 67 59 68 71 14 45 53 28
Policy Return (89% BCAB and 11%
Non-US World Gov't Bond)-0.53%-0.60%3.11%5.32%5.15%4.98%5.21%7.79%11.19%3.85%
Policy Ranking (Broad Fixed)100 98 78 65 62 76 10 44 53 13
Page 8
Red indicates bottom 40% of universe
11.44%12.45%
*** 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
10.23%11.93%-0.50%
* 25% Broad Large Cap Core, 10% Mid Cap, 10% Small Cap, 10% Broad Large Growth, 10% International, 4% Intl. Bond, 29% Broad Fixed & 2% RE
** 25% S&P500, 10% S&P400, 10% S&P600, 10% R1000G, 10% EAFE, 4% Intl. Bond, 29% BCAB & 2% NCREIF
-4.36%
Policy Return (38.4%S&P500,
15.4%S&P400, 15.4%S&P600,
15.4% R1000G, 15.4% EAFE)6.32%27.80%
Palm Beach Gardens Police Pension Fund
Performance Evaluation Summary
March 31, 2013
14.01%-21.04%
TOTAL FUND (Net of Fees)[Inception 3-31-1992]
TOTAL EQUITIES(Net of Fees)[Inception 6-30-2000]
Current Fiscal Year
Quarter FYTD One Year Three Years Five Years 2012 2011 2010 2009 2008
10.57%10.17%13.93%12.68%5.96%30.17%1.19%10.21%-6.49%-21.72%
Ranking (Br.Large Cap Core)40 50 36 19 35 21 20 29 55 36
10.61%10.19%13.96%12.67%5.81%30.20%1.15%10.16%-6.91%-21.98%
Policy Ranking (Br.Large Cap Core)38 50 35 19 40 20 20 30 62 40
13.42%17.47%17.73%15.26%10.01%28.90%-1.17%17.77%-2.77%-16.54%
26 32 29 10 8 28 26 12 100 9
13.45%17.55%17.83%15.12%9.85%28.54%-1.28%17.78%-3.10%-16.68%
25 30 28 10 9 30 27 12 100 9
11.77%14.25%16.04%15.16%9.16%33.27%0.21%14.14%-10.54%-13.64%
Ranking (Broad Small Cap)65 70 51 28 45 18 26 37 86 22
11.81%14.29%16.14%15.18%9.19%33.35%0.21%14.21%-10.61%-13.83%
Policy Ranking (Broad Small Cap)64 69 49 27 44 18 26 36 86 23
14.37%17.42%16.64%11.90%9.56%27.52%-6.48%14.62%15.30%-30.79%
Ranking (Broad Large Cap Growth)1 1 1 44 9 55 94 8 1 100
9.54%8.10%10.09%13.06%7.30%29.18%3.78%12.65%-1.85%-20.88%
34 54 46 20 22 40 14 20 35 32
4.62%11.37%10.80%6.51%0.94%19.38%-11.11%9.09%2.30%-29.10%
29 32 33 25 25 20 50 32 48 36
5.23%12.18%11.79%5.49%-0.40%14.33%-8.94%3.71%3.79%-30.12%
22 20 23 38 45 68 25 65 39 45
Page 9
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
March 31, 2013
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 2012 2011 2010 2009 2008
-0.12%-0.15%4.36%6.02%5.45%6.07%5.66%8.10%11.96%1.22%
Ranking (Broad Fixed)85 89 64 49 53 69 8 42 46 25
-0.12%0.09%3.77%5.53%5.48%5.16%5.29%8.17%10.56%3.66%
Policy Ranking (Broad Fixed)85 82 71 60 52 75 9 41 57 13
Two Years
-1.15%0.57%6.10%4.24%n/a 7.89%0.33%n/a n/a n/a
-3.83%-6.09%-2.17%0.84%n/a 3.46%4.14%n/a n/a n/a
2.22%4.49%n/a n/a n/a n/a n/a n/a n/a n/a
2.00%4.59%n/a n/a n/a n/a n/a n/a n/a n/a
Page 10
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
March 31, 2013
ICC FIXED INCOME PORTFOLIO(Inception 3-31-1994)
Return
Policy(BCAB)
March 31, 2013
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 11
Palm Beach Gardens Police Pension Fund
Total Fund Trailing 5-Years
March 31, 2013
(versus 25% S&P500, 10% S&P400, 10% S&P600, 10% R1000G, 10% EAFE, 4% Non-US World Bond, 29% BCGC, 2% 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)
3/31/2013 12/31/2012 9/30/2012 6/30/2012
Good Aggressive
Conservative Bad
Page 12
Palm Beach Gardens Police Pension Fund
Total Equity Trailing 5-Years
March 31, 2013
(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)
3/31/2013 12/31/2012 9/30/2012 6/30/2012
Good Aggressive
Conservative Bad
Page 13
Palm Beach Gardens Police Pension Fund
Total Fixed Income 5-Year Trailing
March 31, 2013
(versus 89% BCGC, 11% 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)
3/31/2013 12/31/2012 9/30/2012 6/30/2012
Good Aggressive
Conservative Bad
15451000 15451000
123518000 123518000
264000 264000
139233000
Page 14
Palm Beach Gardens Police Pension Fund
Beta: Trailing 5-Year Risk (or Inception if Less)
March 31, 2013
0.30 0.40 0.50 0.60 0.70 0.80 0.90 1.00 1.10 1.20
Mar-13
Dec-12
Sep-12
Jun-12
Total Fund Large Cap Mid Cap Small Cap Total Fixed International Large Growth
Page 15
Palm Beach Gardens Police Pension Fund
Alpha: Trailing 5-Year Reward (or Inception if Less)
March 31, 2013
-2.0%
-1.0%
0.0%
1.0%
2.0%
Mar-13 Dec-12 Sep-12 Jun-12
TOTAL FUND & INDIVIDUAL MANAGERS
Total Fund Large Cap Mid Cap Small Cap Total Fixed International Large Growth
Mar-13 Dec-12 Sep-12 Jun-12
Total Fund 0.88 0.88 0.88 0.77
Managers, Fixed Income
Total Fixed 0.88 0.88 0.88 0.87
Managers, Equities
Large Cap 0.99 0.99 0.99 0.99
Mid Cap 0.99 0.99 0.99 0.99
Small Cap 0.99 0.99 0.99 0.99
International 0.41 0.40 0.39 0.40
Large Growth 1.10 1.09 1.10 1.10
Real Estate NCREIF 0.00 0.00 0.00
Total Fund 0.99%0.66%0.41%0.77%
Managers, Fixed Income
Total Fixed 0.36%0.15%0.15%-0.01%
Managers, Equities
Large Cap 0.19%0.17%0.18%0.22%
Mid Cap 0.21%0.18%0.21%0.22%
Small Cap 0.04%0.08%0.06%0.06%
International 1.11%-0.54%-1.56%-1.67%
Large Growth 1.51%0.53%-1.82%-1.62%
Real Estate NCREIF 0.00%0.00%0.00%
Page 16
S&P400
* 25% S&P 500, 10% S&P400, 10% S&P600, 10% R1000G, 10% EAFE, 4% Non-US World Gov't Bond, 29% BCAB, 2% 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)
March 31, 2013
Current
BETA
*
Page 17
Palm Beach Gardens Police Pension Fund
Batting Average: 5-Years Trailing (or Inception if Less)
March 31, 2013
0
10
20
30
40
50
60
70
80
90
100
Mar-13 Dec-12 Sep-12 Jun-12
TOTAL FUND & INDIVIDUAL MANAGERS
Total Fund Large Cap Mid Cap Small Cap Total Fixed International Large Growth
Mar-13 Dec-12 Sep-12 Jun-12
Total Fund 35.00 35.00 30.00 35.00
Managers, Fixed Income
Total Fixed 55.00 50.00 45.00 40.00
Managers, Equities
Large Cap 60.00 65.00 65.00 70.00
Mid Cap 60.00 65.00 70.00 75.00
Small Cap 35.00 40.00 45.00 50.00
International 55.00 55.00 55.00 60.00
Large Growth 55.00 50.00 45.00 47.37
Real Estate NCREIF 33.33 0.00 0.00
Total Fund 0.98 0.98 0.98 0.96
Managers, Fixed Income
Total Fixed 0.74 0.73 0.74 0.74
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 0.28 0.26 0.26 0.26
Large Growth 0.92 0.91 0.91 0.91
Real Estate NCREIF 0.00 0.00 0.00
Page 18
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, 29% BCAB, 2% RE
S&P600
EAFE
R1000G
March 31, 2013
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
Advanced Investment Partners - Large Cap - Gross Size 12.00 10.90 15.38 12.90 7.24 9.41
Atlanta Capital Management Co., LLC - High Quality Growth Plus - Gross Size 8.62 8.51 8.72 11.77 6.29 8.61
ICC Capital Management, Inc - Core Value - Gross Size 12.01 16.69 16.43 9.47 4.38 9.52
Logan Capital Management - Large Core 60/40 - Gross Size 8.05 6.93 7.41 16.09 9.02 10.82
Madison Investment Advisors, Inc. - Large Cap Equity (Instl) - Gross Size 11.08 12.71 16.29 11.27 6.99 8.28
Rhumbline Advisers Corporation - Russell 1000 Index Fund - Gross Size 10.94 11.05 14.38 12.47 6.11 8.94
Robeco Investment Management, Inc. - WPG Disc Equity Large Cap - Gross Size 10.16 11.11 13.75 12.26 5.50 8.91
South Texas Money Management - Large Cap Core - Gross Size 7.12 8.66 10.24 9.27 3.78 8.27
Valley Forge Asset Management - Large Cap Core - Gross Size 8.97 5.10 11.73 11.38 5.39 9.71
Russell 1000 10.96 11.10 14.43 12.93 6.15 8.97
S&P 500 10.61 10.19 13.96 12.67 5.81 8.53
Dana Investment Management - Large Growth - Gross Size 9.54 7.41 9.81 12.37 6.30 10.68
Denver Investment Advisors, LLC - Growth - Gross Size 7.95 5.43 6.59 11.97 5.93 9.57
Garcia Hamilton & Associates - Quality Growth - Gross Size 7.57 5.00 5.79 11.53 5.84 7.28
ICC Capital Management, Inc - Large Cap Growth Equity - Gross Size 12.17 15.17 14.47 10.85 9.42 9.73
Logan Capital Management - Large Cap Growth - Gross Size 8.63 9.90 5.46 11.79 5.69 10.22
Montag & Caldwell, Inc. - Large Cap Growth - Gross Size 10.48 8.81 13.72 11.53 7.19 8.50
Polen Capital Management - Large Cap Growth - Gross Size 6.34 5.17 2.84 13.56 10.56 9.95
Rhumbline Advisers Corporation - Russell 1000 Growth Index Fund - Gross Size 9.50 8.05 10.04 13.05 7.35 8.67
Sawgrass Asset Management, LLC - Large Cap Growth Equity - Gross Size 11.85 10.16 13.30 14.20 7.27 8.83
Silvant Capital - Select LCG Stock - Grosss Size 6.03 2.38 0.94 8.42 4.30 8.05
Russell 1000 Growth 9.54 8.10 10.09 13.06 7.30 8.62
S&P 500/Citigroup Growth 9.33 7.10 11.61 13.31 7.48 8.15
Rhumbline Large Cap(FYE)10.57 10.17 13.93 12.68 5.96 8.64
Rhumbline Mid Cap(FYE)13.42 17.47 17.73 15.26 10.01 12.55
Rhumbline Small Cap(FYE)11.77 14.25 16.04 15.16 9.16 n/a
International Equity(FYE)4.62 11.37 10.80 6.51 0.94 n/a
ICC Large Growth(FYE)14.37 17.42 16.64 11.90 9.56 n/a
Page 19
Performance of Other Managers
March 31, 2013
CORE EQUITY
GROWTH EQUITY
Qtr YTD 1Yr 3Yr 5Yr 10Yr
BRC Investment Management Large Cap Value - Gross Size 11.78 14.32 17.68 14.29 7.90 12.20
Buckhead Capital Management - Value Equity - Low P/E - Gross Size 10.62 9.85 11.88 9.30 5.26 8.48
Ceredex Value Ad Large Cap Value 11.05 14.29 16.96 12.91 7.64 10.90
Eagle Asset Management - Value - Institutional - Gross Size 12.88 14.20 14.07 9.80 4.95 9.61
ICC Capital Management, Inc - Core Value - Gross Size 12.01 16.69 16.43 9.47 4.38 9.52
Missouri Valley Partners - Large Cap Value - Gross Size 10.96 11.78 14.56 11.34 3.57 7.95
Rhumbline Advisers Corporation - Russell 1000 Value Index Fund - Gross Size 12.24 13.94 18.69 12.72 4.97 9.23
The Boston Company Asset Mgmt., LLC - US Large Cap Value Equity Management 12.30 16.55 19.06 11.31 5.27 11.39
RBC Global Asset Management, Inc. - Large Cap Value - Gross Size 10.96 12.95 17.34 12.02 5.05 10.45
RNC Genter Capital - Dividend Income Equity - Gross Size 9.69 9.64 13.52 13.39 7.70
Westwood Management Corporation - LargeCap Equity - Gross Size 10.16 12.62 14.91 11.15 4.06 10.30
Russell 1000 Value 12.31 14.02 18.77 12.74 4.85 9.18
S&P 500/Citigroup Value 11.97 13.81 16.64 12.12 4.07 8.84
Amalgamated Bank - LongView 400 MidCap Index Fund - Gross Size 13.41 17.55 17.82 15.10 9.83 12.42
Batterymarch Financial Mgmt., Inc. - US Mid Cap Russell - Gross Size 13.91 16.58 18.05 14.96 7.50 12.23
Chicago Equity Partners, LLC - Mid Cap Core Equity - Gross Size 13.86 18.53 19.00 17.82 10.04 11.80
Rhumbline Advisers Corporation - S&P 400 Index Fund - Gross Size 13.43 17.48 17.72 15.15 9.08 12.07
Robeco Investment Management, Inc. - BPAM Mid Cap Value Equity - Gross Size 12.77 18.02 18.86 16.37 12.70 15.08
Russell Midcap 12.96 16.21 17.30 14.62 8.37 12.27
S&P Midcap 400 13.45 17.55 17.83 15.12 9.85 12.45
Advanced Investment Partners 14.23 21.19 25.36 19.40 11.65 13.84
AtlantaCapital Management - High Quality SMID - Gross Size 13.65 17.91 18.22 18.01 13.24
Eagle Asset Management - SMID Core - Institutional - Gross Size 12.53 15.53 16.54 14.91 8.29 12.48
Kayne AndersonRudnick - SMID Core - Gross Size 11.24 13.48 10.73 13.63 10.99 9.80
Westwood Management Corporation - SMID Cap Equity - Gross Size 12.99 17.64 16.54 14.97 11.27 16.85
Russell 2500 12.85 16.35 17.73 14.59 9.02 12.30
Rhumbline Large Cap(FYE)10.57 10.17 13.93 12.68 5.96 8.64
Rhumbline Mid Cap(FYE)13.42 17.47 17.73 15.26 10.01 12.55
Rhumbline Small Cap(FYE)11.77 14.25 16.04 15.16 9.16 n/a
International Equity(FYE)4.62 11.37 10.80 6.51 0.94 n/a
ICC Large Growth(FYE)14.37 17.42 16.64 11.90 9.56 n/a
Page 20
Performance of Other Managers
March 31, 2013
VALUE EQUITY
MID-CAP EQUITY
SMID-CAP EQUITY
Qtr YTD 1Yr 3Yr 5Yr 10Yr
Advanced Investment Partners - AllCap - Gross Size 11.45 11.40 16.78 14.51 7.88 9.02
BuckheadCaptial Management - All Cap - Gross Size 10.39 10.11 11.51 9.75 3.58 10.27
Chartwell Investment Partners - Premium Yield Equity - Gross Size 10.76 10.66 15.13 14.11 6.48 9.12
Diamond Hill Capital Management, Inc. - Diamond Hill Select Equity - Gross Size 14.93 17.09 16.53 11.16 6.39 13.68
HGK Asset Management - All Cap - Gross Size 10.93 12.25 14.21 11.49 5.11
ICC Capital Management, Inc - Multi-Cap Eq. - Gross Size 9.70 11.95 9.36 8.05 8.10 14.08
Intrepid Capital Management, Inc. - Intrepid Multi-Cap Equity - Gross Size 7.72 9.17 10.43 11.12 9.93 11.06
Oak Ridge Investments, LLC - All-Cap - Gross Size 10.64 9.13 6.70 12.07 6.32 9.76
Russell 3000 11.07 11.35 14.56 12.97 6.32 9.15
Dow Jones Wilshire 5000 (Full Cap)10.91 11.03 14.17 12.84 6.28 9.32
Atlanta Capital Management Co., LLC - High Quality Small Cap - Gross Size 11.81 14.42 15.43 17.59 13.43 14.42
BuckheadCaptial Management - Small Cap Value - Gross Size 11.33 17.99 11.60 9.75 7.23 12.25
Ceredex - Value Ad Small Cap Value - Gross Size 12.02 18.95 18.56 15.38 11.55 15.51
DePrince, Race, Zollo, Inc. - Small Cap Value - Gross Size 10.00 15.88 18.46 12.46 10.31 13.47
Eagle Asset Management - Small Cap Core - Institutional - Gross Size 12.53 15.01 16.44 15.26 8.01 12.31
GW Capital, Inc. - Small Cap Value Equity - Gross Size 15.29 22.06 28.04 15.81 8.78 17.40
Intrepid Capital Management, Inc. - Intrepid Small Cap - Gross Size 4.91 6.31 8.61 10.96 13.39 12.65
Kayne Anderson Rudnick Invst. - Small Cap - Gross Size 10.07 12.03 11.32 17.65 12.67 13.67
Missouri Valley Partners 13.57 17.32 18.83 19.60 13.70 13.03
Rhumbline Advisers Corporation - S&P 600 Index Fund - Gross Size 11.77 14.24 16.03 15.12 9.14
Sawgrass Asset Management, LLC - Small Cap Growth Equity - Gross Size 13.73 13.09 8.34 16.06 5.35 7.61
Silvant Capital - Small Cap Growth - Gross Size 11.53 12.53 15.50 15.21 9.02 11.58
Russell 2000 12.39 14.48 16.30 13.45 8.24 11.52
S&P SmallCap 600 11.81 14.29 16.14 15.18 9.19 12.36
American Realty Advisors - Core Equity Real Estate-Sep. Accts. - Gross Size 2.50 11.27 13.14 12.50 -1.15
Cornerstone Real Estate Advisors, Inc. - US REIT TR - Gross Size 2.80 17.49 13.53 18.59 6.97 14.31
Intercontinental - US REIF - Gross Size 6.30 15.31 15.59 12.23 -1.07
JPMorgan Asset Management - Strategic Property Fund - Gross Size 2.78 12.12 14.02 14.07 0.04 7.79
Principal Global - Real Estate Core - Gross Size 2.19 12.75 14.69 15.54 -1.29 6.47
Dow Jones Wilshire REIT Index 2.48 2.48 17.59 18.21 5.26 11.58
NCREIF Property Index 2.54 2.54 12.39 12.63 2.13 8.44
Altrinsic Global Advisors - International Equity - Gross Size 6.01 10.15 9.29 5.27 2.70 10.94
DePrince, Race, Zollo, Inc. - International Equity - Gross Size 1.14 11.12 9.51 2.81 1.75 10.88
Harding Loevner - International Equity - Gross Size 2.93 9.24 10.67 8.97 4.42 12.43
Harding Loevner - Emerging Mkts. Equity - Gross Size 0.19 6.29 6.95 7.35 2.77 18.87
ICC Capital Management, Inc - International ADR Equity - Gross Size 5.40 11.72 9.78 6.38 2.72 9.28
INVESCO - International EM Equity - Gross Size -3.96 -0.03 -5.28 -1.03 -0.69
OFI Institutional Asset Mgmt. - Emerging Mkts.Equity - Gross Size 0.30 5.24 6.60 8.05 6.95
The Boston Company Asset Mgmt., LLC - International Core Equity Management 5.26 12.22 14.05 7.61 -1.03 10.53
Thornburg Investment Mgmt. - International Equity - Gross Size 2.76 8.50 7.79 5.95 1.14 13.26
WHV - WHV International Equity - Gross Size 3.98 8.13 8.54 5.17 0.21 15.73
WHV - WHV Emerging Mkts. Equity - Gross Size -1.47 2.49 -1.49 3.74
MSCI EAFE 5.23 12.18 11.79 5.49 -0.40 10.19
MSCI EMERGING MARKETS -1.57 3.95 2.30 3.59 1.39 17.41
Rhumbline Large Cap(FYE)10.57 10.17 13.93 12.68 5.96 8.64
Rhumbline Mid Cap(FYE)13.42 17.47 17.73 15.26 10.01 12.55
Rhumbline Small Cap(FYE)11.77 14.25 16.04 15.16 9.16 n/a
International Equity(FYE)4.62 11.37 10.80 6.51 0.94 n/a
ICC Large Growth(FYE)14.37 17.42 16.64 11.90 9.56 n/a
Page 21
Performance of Other Managers
March 31, 2013
ALL CAP EQUITY
SMALL CAP EQUITY
REAL ESTATE (12/31/2012)
INTERNATIONAL EQUITY
Qtr YTD 1Yr 3Yr 5Yr 10Yr
Atlanta Capital Management Co., LLC - High Quality Broad Market - Gross Size -0.07 -0.07 3.21 4.89 4.76 4.87
Denver Investment Advisors - Core Bond Gov't/Corp. - Gross Size 0.12 0.32 4.87 6.29 5.93 5.65
Eagle Asset Management - Core Fixed Institutional - Gross Size -0.12 0.18 4.23 5.88 5.86 5.24
Garcia Hamilton & Associates - Fixed Aggregate - Gross Size 0.70 1.88 8.06 7.43 7.93 6.64
ICC Capital Management, Inc - Core Fixed Income - Gross Size -0.12 0.05 4.33 5.92 5.24 4.67
Integrity Fixed Income Mgmt, LLC - Core Fixed Income - Gross Size 0.43 0.90 4.94 6.34 6.65
Montage & Caldwell Inc. - Core Fixed Income - Gross Size 0.05 0.09 2.81 4.47 4.87 5.04
Sawgrass Asset Management, LLC - Core Fixed Income - Gross Size 0.17 0.66 4.64 5.88 6.19 5.45
RBC Global Asset Management, Inc. - Broad Market Core - Gross Size 0.07 0.31 4.32 6.11 5.59 4.89
Seix Advisors - Core Fixed Income - Gross Size -0.02 0.17 3.99 6.11 6.57 5.71
Wedge Capital Management - Core Fixed Income - Gross Size 0.56 1.06 4.84 6.15 6.53 5.68
Barclays Aggregate Bond -0.12 0.09 3.77 5.52 5.47 5.03
Barclays Gov/Credit Bond -0.16 0.21 4.56 6.10 5.50 5.06
Barclays High Yield US Corporate Bond 2.89 6.28 13.13 11.24 11.65 10.13
Buckhead Capital Management - Intermediate Fixed - Gross Size 0.24 0.66 3.72 4.52 5.03
Denver Investment Advisors - Intermediate Fixed - Gross Size 0.38 0.78 4.34 5.58 5.42 5.27
Eagle Asset Management - Institutional Conservative - Gross Size 0.22 0.51 3.63 5.15 5.41 4.86
Garcia Hamilton & Associates - Intermediate Fixed Income - Gross Size 0.75 1.76 6.95 6.37 6.89 5.87
Missouri Valley Partners - Intermediate Government/Credit Fixed Income - Gross Size 0.32 0.50 3.56 4.98 5.27 5.02
RBC Global Asset Management, Inc. - Intermediate Core - Gross Size 0.33 0.76 3.92 5.25 4.59 4.16
Sawgrass Asset Management, LLC - Intermediate Fixed Income - Gross Size 0.29 0.71 3.97 4.88 8.09 4.71
Seix Advisors - Intermediate Fixed Income - Gross Size 0.26 0.55 3.49 4.88 5.60 5.16
Sit Investment Associates, Inc. - Intermediate Govt/Corp - Gross Size 0.53 1.18 4.81 6.29 6.90 5.62
Barclays Intermediate Aggregate 0.15 0.33 3.04 4.64 4.93 4.69
Barclays Gov/Credit-Intermediate 0.26 0.61 3.53 4.75 4.61 4.49
Brandywine Global - International Fixed Invst. Grade - Gross Size -0.48 2.32 8.18 8.22 6.78 7.92
Federated Investors - Non-US Fixed Income Unhedged - Gross Size -4.88 -6.93 -2.66 3.12 2.57 5.64
PIMCO - Non US Fixed Income Unhedged - Gross Size -3.77 -5.62 2.29 7.89 5.83 7.58
Wells Capital Mgmt. - Global Fixed Income Ex-US - Gross Size -2.65 -2.43 3.47 5.28 5.22 7.56
Citigroup World Government Ex-US -3.83 -6.09 -2.17 3.33 2.28 5.58
International Bonds(FYE)-1.15 0.57 6.10 n/a n/a n/a
ICC Fixed Income(FYE)-0.12 -0.15 4.36 6.02 5.45 4.77
American Realty(FYE)2.22 4.49 n/a n/a n/a n/a
Page 22
INTERMEDIATE FIXED INCOME
INTERNATIONAL FIXED INCOME
Performance of Other Managers
March 31, 2013
CORE FIXED INCOME
CITY OF PALM BEACH GARDENS POLICE OFFICERS’ PENSION FUND
ACTUARIAL VALUATION REPORT AS OF OCTOBER 1, 2012
ANNUAL EMPLOYER CONTRIBUTION FOR THE FISCAL YEAR ENDING SEPTEMBER 30, 2014
TABLE OF CONTENTS
Section Title Page
A Discussion of Valuation Results
1. Discussion of Valuation Results 1
2. Chapter Revenue 5
B Valuation Results
1. Participant Data 6
2. Annual Required Contribution 7
3. Actuarial Value of Benefits and Assets 8
4. Calculation of Employer Normal Cost 9
5. Liquidation of Unfunded Actuarial Accrued
Liability 10
6. Actuarial Gains and Losses 12
7. Recent History of Required and Actual
Contributions 16
8. Actuarial Assumptions and Cost Method 17
9. Glossary of Terms 21
C Pension Fund Information
1. Statement of Plan Assets at Market Value 24
2. Reconciliation of Plan Assets 25
3. Reconciliation of DROP Accounts 26
4. Calculation of Actuarial Value of Assets 27
5. Investment Rate of Return 28
D Financial Accounting Information
1. FASB No. 35 29
2. GASB No. 25 30
3. GASB No. 27 32
E Miscellaneous Information
1. Reconciliation of Membership Data 34
2. Active Participant Distribution 35
3. Inactive Participant Distribution 36
F Summary of Plan Provisions 37
SECTION A
DISCUSSION OF VALUATION RESULTS
1
DISCUSSION OF VALUATION RESULTS
Comparison of Required Employer Contributions
A comparison of the required employer contribution developed in this year's actuarial valuation and
the previous valuation is as follows.
Required Employer/State Contribution$3,125,279$3,113,406$11,873
As % of Covered Payroll60.62%51.80%8.82%
Allowable Credit for State Contribution$412,644*$412,644*$0
As % of Covered Payroll8.00%6.87%1.13%
Required Employer Contribution$2,712,635$2,700,762$11,873
As % of Covered Payroll52.62%44.93%7.69%
For FYE 9/30/2014For FYE 9/30/2013
Based on
10/1/2011
Based on
10/1/2012
ValuationValuation(Decrease)
Increase
* Reflects that the additional premium tax revenues ($209,716) are not sufficient to fund the Chapter
minimum benefits, and therefore can be utilized to help meet the City’s contribution requirement.
The required employer contribution has been adjusted for interest on the basis that contributions are
made in equal payments at the end of each quarter.
The contribution has also been computed under the assumption that the amount to be received from
the State on behalf of police officers in 2014 will be the same as the base amount of $412,644. If the actual
payment from the State falls below this amount, then the City must increase its contribution by the
difference.
Actual employer and allowable State contributions during the year ending September 30, 2012 were
$3,785,539 and $412,644, respectively, for a total of $4,198,183. The annual required contribution was
$4,198,183.
2
Revisions in Benefits
Under Ordinance 24, 2012, adopted on September 13, 2012, the following changes were made:
The benefit multiplier was lowered from 3.50% to 2.75% per year of service for service accrued
after September 13, 2012. This change did not apply to members who were eligible for normal
retirement as of September 13, 2012.
The total maximum benefit that may be accrued under the Plan was reduced from 100% to 75% of
Average Final Compensation. However, any member who had accrued a greater percentage as of
September 13, 2012 retains that percentage but will not accrue an increased percentage. This
change did not apply to members who are eligible for normal retirement as of September 13, 2012.
Compensation was changed from total W-2 earnings to base pay excluding all other pay. However,
compensation for pension purposes after September 13, 2012 will not be less than the compensation
on the day before September 13, 2012 under the previous definition.
The amount of unused leave pay included in compensation is limited to the dollar amount accrued
on September 13, 2012.
The normal retirement date was changed to age 59 with 10 years of service from the earlier of age
52 with 10 years of service or 20 years of service regardless of age. This change did not apply to
members who had at least ten years of service as of September 13, 2012.
The COLA provided by actuarial gains was eliminated. Since this plan provision is not pre-funded,
this change had no impact on the required contribution.
These revisions were recognized in an Actuarial Impact Statement dated August 15, 2012.
Revisions in Actuarial Assumptions or Methods
The investment return assumption was lowered from 7.4% to 7.3%. This rate will continue to be
lowered by 0.1% each year until 6.5% is reached. There have been no other changes in assumptions or
methods since the prior valuation.
Actuarial Experience
There was a net actuarial gain of $751,599 for the year, which means that actual experience was
3
more favorable than expected. The gain is primarily due to lower than expected salary increases. Actual
average salary increases were 0.4% versus assumed salary increases of 7.5%. The gain was partially
offset by losses due to recognized investment return below the assumed rate of 7.4% and more
retirements (DROP entries) than expected. The investment return was 18.0% based on market value of
assets and 7.0% based on actuarial value of assets. The net actuarial gain has decreased the required
employer contribution by 1.68% of covered payroll.
Funded Ratio
This year’s funded ratio is 69.1% compared to 66.4% last year (after reflecting Ordinance 24,
2012). The funded ratio was 69.9% before the change in the investment return assumption. The ratio is
equal to the actuarial value of assets divided by the actuarial accrued (past service) liability.
Analysis of Change in Employer Contribution
The components of change in the employer contribution rate are as follows:
Contribution rate last year44.93%
Change in assumptions1.96
Payment on unfunded liability9.44*
Experience (gain)/loss(1.68)
Change in Normal Cost Rate(1.45)
Change in administrative expense0.55
Change in State revenue(1.13)
Contribution rate this year52.62
* The payroll growth assumption was lowered to 0% from 1.55% (as of the Actuarial Impact Statement) for
purposes of amortizing the UAAL due to the 10-year payroll growth cap required by Florida Statutes.
Variability of Future Contribution Rates
The Actuarial Cost Method used to determine the contribution rate is intended to produce
contribution rates which are generally level as a percent of payroll. Even so, when experience differs
from the assumptions, as it often does, the employer’s contribution rate can vary significantly from year-
to-year.
Over time, if the year-to-year gains and losses offset each other, the contribution rate would be
expected to return to the current level, but this does not always happen.
The Actuarial Value of Assets exceeds the Market Value of Assets by $714,862 as of the
4
valuation date (see Section C). This difference will be gradually recognized in the absence of offsetting
gains. In turn, the computed employer contribution rate will increase by approximately 1.6% of covered
payroll.
Another area of variability has to do with the annual payment on the unfunded accrued liability
(UAL). For general employees, this payment is computed as a level percent of covered payroll under the
assumption that covered payroll will rise by 5% per year. According to Chapter 112, Florida Statutes, this
payroll growth assumption may not exceed the average growth over the last ten years, which was (1.26%)
during the ten-year period ending September 30, 2012. Therefore, the UAL is being amortized as a level
dollar amount this year. This adjustment increased the required employer contribution rate by 4.72% of
covered payroll.
Relationship to Market Value
If Market Value had been the basis for the valuation, the City contribution rate would have been
54.20% and the funded ratio would have been 68.1%. The market value-based funded ratio was 58.7%
last year. In the absence of other gains and losses, the City contribution rate should increase to that level
over the next few years.
Conclusion
The remainder of this Report includes detailed actuarial valuation results, financial information,
miscellaneous information and statistics, and a summary of plan provisions.
5
CHAPTER REVENUE
Increments in Chapter revenue over that received in 1998 must first be used to fund the cost of
compliance with minimum benefits. Once minimums are met, any subsequent additional Chapter
revenue must be used to provide extra benefits.
As of the valuation date, there are no minimum benefit requirements outstanding.
1.Base Amount Previous Plan Year$412,644
2.Amount Received for Previous Plan Year445,534
3.Benefit Improvements Made in Previous Plan Year0
4.Excess Funds for Previous Plan Year: (2) - (1) - (3)32,890
5.Accumulated Excess at Beginning of Previous Year505,662
6.Prior Excess Used in Previous Plan Year0
7.Accumulated Excess as of Valuation Date
(Available for Benefit Improvements): (4) + (5) - (6)538,552
8.Base Amount This Plan Year: (1) + (3)412,644
Actuarial Confirmation of the Use of State Chapter Money
The Accumulated Excess shown in line 7 is being held in reserve to pay for additional benefits.
The reserve is subtracted from Plan assets (see Section C of this Report). The Base Amount in line 8 is the
maximum amount the employer may take as a credit against its required contribution; however, in no event
may the employer take credit for more than the actual amount of Chapter revenue received.
SECTION B
VALUATION RESULTS
6
ACTIVE MEMBERS
Number7484
Covered Annual Payroll$4,910,023$5,724,225
Average Annual Payroll$66,352$68,146
Average Age40.240.1
Average Past Service10.710.5
Average Age at Hire29.529.6
RETIREES, BENEFICIARIES & DROP**
Number5446
Annual Benefits$3,934,797$3,350,377
Average Annual Benefit$72,867$72,834
Average Age54.854.9
DISABILITY RETIREES
Number1010
Annual Benefits$272,822$272,822
Average Annual Benefit$27,282$27,282
Average Age56.255.2
TERMINATED VESTED MEMBERS
Number11
Annual Benefits$49,452$49,452
Average Annual Benefit$49,452$49,452
Average Age41.040.0
* From August 15, 2012 Actuarial Impact Statement
** Does not include deferred supplemental benefits for DROP members
PARTICIPANT DATA
October 1, 2012October 1, 2011*
7
A.Valuation DateOctober 1, 2012October 1, 2012
B.ARC to Be Paid During
Fiscal Year Ending9/30/20149/30/20149/30/2013
C.Assumed Dates of Employer
ContributionsQuarterlyQuarterlyQuarterly
D.Annual Payment to Amortize
Unfunded Actuarial Liability$1,905,316$1,836,445$1,716,176
E.Employer Normal Cost944,743919,8391,121,518
F.ARC if Paid on the Valuation
Date: D+E2,850,0592,756,2842,837,694
G.ARC Adjusted for Frequency of
Payments2,976,6302,880,3172,965,390
H.ARC as % of Covered Payroll60.62%58.66%51.80%
I.Assumed Rate of Increase in Covered
Payroll to Contribution Year5.00%5.00%5.00%
J.Covered Payroll for Contribution Year5,155,5245,155,5246,010,436
K.ARC for Contribution Year: H x J3,125,2793,024,2303,113,406
L.Allowable Credit for State Revenue in
Contribution Year412,644**412,644**412,644**
M.Required Employer Contribution (REC)
in Contribution Year2,712,6352,611,5862,700,762
N.REC as % of Covered Payroll in
Contribution Year: M ÷ J52.62%50.66%44.93%
ANNUAL REQUIRED CONTRIBUTION (ARC)
After ChangeBefore Change
October 1, 2011*
* From August 15, 2012 Actuarial Impact Statement
** Reflects that the additional premium tax revenues ($209,716) are not sufficient to fund the minimum
Chapter benefits, and therefore can be utilized to help meet the City’s contribution requirement.
8
A.Valuation DateOctober 1, 2012October 1, 2012October 1, 2011*
B.Actuarial Present Value of All Projected
Benefits for
1.Active Members
a. Service Retirement Benefits$ 26,846,938$ 26,336,103$ 32,085,576
b. Vesting Benefits1,217,271 1,190,274 1,341,710
c. Disability Benefits4,133,242 4,059,680 4,584,137
d. Preretirement Death Benefits457,605 449,367 514,978
e. Return of Member Contributions14,349 14,325 19,655
f. Total32,669,405 32,049,749 38,546,056
2.Inactive Members
a. Service Retirees & Beneficiaries48,572,874 48,096,901 41,515,012
b. Disability Retirees2,920,636 2,897,000 2,944,145
c. Terminated Vested Members279,574 274,042 254,908
d. Total51,773,084 51,267,943 44,714,065
3. Total for All Members84,442,48983,317,69283,260,121
C.Actuarial Accrued (Past Service)
Liability per GASB No. 2572,156,731 71,364,212 68,822,738
D.Actuarial Value of Accumulated Plan
Benefits per FASB No. 35
1.Based on Plan's Interest Rate70,152,68469,362,72266,770,064
2. Based on FRS Interest Rate66,716,73066,716,73064,157,459
E.Plan Assets
1.Market Value49,144,43649,144,43640,379,486
2. Actuarial Value49,859,29849,859,29845,709,740
F.Unfunded Actuarial Accrued Liabilit y: C - E222,297,43321,504,91423,112,998
G.Actuarial Present Value of Projected
Covered Payroll52,548,80952,180,29859,908,329
H.Actuarial Present Value of Projected
Member Contributions4,519,1974,487,5065,152,116
ACTUARIAL VALUE OF BENEFITS AND ASSETS
Before ChangeAfter Change
* From August 15, 2012 Actuarial Impact Statement
9
CALCULATION OF EMPLOYER NORMAL COST
A.Valuation DateOctober 1, 2012
After ChangeBefore Change
B.Normal Cost for
1.Service Retirement Benefits$887,980 $868,490 $1,088,926
2.Vesting Benefits89,091 87,290 102,624
3.Disability Benefits230,964 227,642 267,504
4.Preretirement Death Benefits25,544 25,191 29,213
5.Return of Member Contributions9,859 9,921 11,493
6.Total for Future Benefits1,243,438 1,218,534 1,499,760
7.Assumed Amount for Administrative
Expenses123,567 123,567 114,041
8.Total Normal Cost1,367,005 1,342,101 1,613,801
9.Total as a % of Covered Payroll27.84%27.33%28.19%
C.Expected Member Contribution422,262 422,262 492,283
D.Employer Normal Cost: B8-C 944,743 919,839 1,121,518
E.Employer Normal Cost as a % of
Covered Payroll19.24%18.73%19.59%
October 1, 2011*October 1, 2012
* From August 15, 2012 Actuarial Impact Statement
10
LIQUIDATION OF THE UNFUNDED ACTUARIAL ACCRUED LIABILITY
A. UAAL Amoritzation Period and Payments
Amortization
PeriodYears
Years(Years)Amount Remaining AmountAfter ChangeBefore Change
7/1/1986304,147$ 41,119$ 310$ 310$
10/1/199130(1,504)9(816)(118)(119)
10/1/199130286,2239154,85822,43522,509
10/1/199230122,6111071,8489,6669,702
10/1/199330(194,444)11(122,977)(15,513)(15,576)
10/1/199530796,97513687,17177,93578,300
10/1/199630(189,977)14(178,549)(19,371)(19,468)
10/1/2000303,639,273184,132,031391,159393,586
10/1/200530975,210231,094,83492,85093,546
10/1/2005305,273,728235,920,631502,115505,876
10/1/20063012,571,5152413,749,6551,146,8401,155,693
10/1/200715(251,668)10(208,704)(28,078)(28,181)
10/1/2008153,319,494112,881,261363,465364,923
10/1/200915(137,951)12(122,301)(14,581)(14,644)
10/1/201015348,98113318,26936,09636,265
10/1/201115(718,288)14(668,480)(72,524)(72,887)
10/1/201115847,05414788,31785,52585,954
10/1/201115(6,706,717)14(6,241,654)(677,162)(680,556)
10/1/201215(751,599)15(751,599)(78,371)(78,788)
10/1/201215792,519 15792,519 82,638 N/A
20,025,582$ 22,297,433$ 1,905,316$ 1,836,445$
Original UAALCurrent UAAL
Payment
11
B. Amortization Schedule
The UAAL is being amortized as a level percent of payroll. The expected amortization schedule is as
follows:
2012$22,297,433
201321,880,740
201421,433,630
201520,953,881
201620,439,110
201719,887,093
202216,484,349
202712,779,647
20325,806,306
20360
YearExpected UAAL
Amortization Schedule
12
ACTUARIAL GAINS AND LOSSES
The assumptions used to anticipate mortality, employment turnover, investment income, expenses,
salary increases, and other factors have been based on long range trends and expectations. Actual
experience can vary from these expectations. The variance is measured by the gain and loss for the period
involved. If significant long term experience reveals consistent deviation from what has been expected and
that deviation is expected to continue, the assumptions should be modified. The net actuarial gain (loss) for
the past year is computed as follows:
1.Last Year's UAAL$23,112,998
2.Last Year's Employer Normal Cost1,613,801
3.Last Year's Contributions4,198,183
4. Interest at the Assumed Rate on:
a.1 and 2 for one year1,829,783
b.3 from dates paid101,886
c. a - b1,727,897
5.This Year's Expected UAAL Prior to Revision:
1 + 2 - 3 + 4c22,256,513
6.Change in UAAL Due to Plan Amendments
and/or Changes in Actuarial Assumptions792,519
7.This Year's Expected UAAL: 5 + 623,049,032
8.This Year's Actual UAAL22,297,433
9.Net Actuarial Gain (Loss): 7 - 8751,599
10.Gain (Loss) Due to Investments(178,716)
11.Gain (Loss) from Other Sources930,315
13
Experience gains/losses for the past few years are as follows:
Year Ending
September 30 Gain (Loss)
1996$(284,232)
1997(994,552)
1998(674,477)
1999(424,754)
200068,592
2001(435,534)
2002(2,162,823)
2003(949,324)
2004(246,347)
2005(1,006,694)
2006(1,517,294)
2007251,668
2008(3,319,494)
2009137,951
2010(348,981)
2011718,288
2012751,599
14
The fund earnings and salary increase assumptions have considerable impact on the cost of the Plan
so it is important that they are in line with the actual experience. The following table shows the actual fund
earnings and salary increase rates compared to the assumed rates for the last few years:
Year Ending
9/30/19909.1%8.0%9.1%6.5%
9/30/19918.68.09.56.5
9/30/19928.28.010.96.5
9/30/19938.88.014.16.5
9/30/19942.48.00.66.5
9/30/199518.28.012.86.5
9/30/19965.28.03.66.5
9/30/199710.38.011.5*6.5
9/30/19989.28.010.06.5
9/30/19999.68.08.46.5
9/30/20009.08.05.96.5
9/30/20016.38.51.16.0
9/30/2002(1.6)8.511.86.0
9/30/20033.78.57.46.0
9/30/20043.98.516.46.0
9/30/20054.88.53.66.0
9/30/20066.58.59.76.0
9/30/20078.17.58.87.5
9/30/20083.67.513.87.5
9/30/20094.47.51.07.5
9/30/20105.67.57.77.5
9/30/20114.67.5(1.9)7.5
9/30/20127.07.40.47.5
Average for
Years Shown6.7N/A7.6N/A
Salary IncreasesInvestment Return
ActualAssumedActualAssumed
* Actual raises during the year were less than 10.0%. However, there was a problem of underreporting of
compensation in the previous year that resulted in the 11.5% average increase.
The actual investment return rates shown above are based on the actuarial value of assets. The actual
salary increase rates shown above are the increases received by those active members who were included in
the actuarial valuations both at the beginning and the end of each year.
15
Active
Members
YearVestedOtherEnd of
EndedAEAEAEAEAAAEYear
9/30/20021052400001232 90
9/30/20031493510001453 95
9/30/20041072610001343 98
9/30/20051142800000223 105
9/30/2006751901000443 107
9/30/2007553601001123 107
9/30/2008233501000003 106
9/30/2009576801001013 104
9/30/201031411501001233 93
9/30/201141311201000222 84
9/30/20122128100100332 74
9/30/20130002
11 Yr Totals *7384525926106232930
* Totals are through current Plan Year only.
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17
ACTUARIAL ASSUMPTIONS AND COST METHOD
Valuation Methods
Actuarial Cost Method - Normal cost and the allocation of benefit values between service rendered
before and after the valuation date were determined using an Individual Entry-Age Actuarial Cost
Method having the following characteristics:
(i) the annual normal cost for each individual active member, payable from the date of
employment to the date of retirement, is sufficient to accumulate the value of the member’s
benefit at the time of retirement;
(ii) each annual normal cost is a constant percentage of the member’s year by year projected
covered pay.
Actuarial gains/(losses), as they occur, reduce (increase) the Unfunded Actuarial Accrued Liability.
Financing of Unfunded Actuarial Accrued Liabilities - Unfunded Actuarial Accrued Liabilities (full
funding credit if assets exceed liabilities) were amortized by level (principal & interest combined)
percent-of-payroll contributions over a reasonable period of future years.
Actuarial Value of Assets - The Actuarial Value of Assets phase in the difference between the expected
actuarial value and actual market value of assets at the rate of 20% per year. The Actuarial Value of
Assets will be further adjusted to the extent necessary to fall within the corridor whose lower limit is 80%
of the Market Value of plan assets and whose upper limit is 120% of the Market Value of plan assets.
During periods when investment performance exceeds the assumed rate, Actuarial Value of Assets will
tend to be less than Market Value. During periods when investment performance is less than assumed
rate, Actuarial Value of Assets will tend to be greater than Market Value.
Valuation Assumptions
The actuarial assumptions used in the valuation are shown in this Section.
Economic Assumptions
The investment return rate assumed in the valuation is 7.3% per year, compounded annually (net after
investment expenses). This assumption is being lowered by 0.1% each year until 6.5% is reached.
The Wage Inflation Rate assumed in this valuation was 3% per year. The Wage Inflation Rate is
defined to be the portion of total pay increases for an individual that are due to macro-economic forces
including productivity, price inflation, and labor market conditions. The wage inflation rate does not
include pay changes related to individual merit and seniority effects.
The assumed real rate of return over wage inflation is defined to be the portion of total investment
return that is more than the assumed wage inflation rate. Considering other economic assumptions, the
7.3% investment return rate translates to an assumed real rate of return over wage inflation of 4.3%.
18
The rate of salary increase used for individual members is 7.5% per year. Part of the assumption is for
merit and/or seniority increase, and 3% recognizes wage inflation, including price inflation, productivity
increases, and other macroeconomic forces. This assumption is used to project a member’s current salary
to the salaries upon which benefits will be based.
For purposes of financing the unfunded liabilities, total payroll is assumed to grow at 5% per year.
According to Chapter 112, Florida Statutes, this payroll growth assumption may not exceed the average
growth over the last ten years which was (1.26%). Therefore, unfunded liabilities are being amortized
this year as a level dollar amount, with no assumed payroll growth.
Demographic Assumptions
The mortality table was the RP-2000 Combined Healthy Participant Mortality Tables for males and
females. The provision for future mortality improvements is being made by using Scale AA after 2000.
Sample
Attained
Ages (in 2012)MenWomenMenWomen
500.17%0.14%34.0835.52
550.290.2528.9630.57
600.560.4824.0425.79
651.080.9119.4521.31
701.851.5815.2817.20
753.192.5511.5313.48
805.714.228.3510.19
Probability of Future Life
Dying Next YearExpectancy (years)
This assumption is used to measure the probabilities of each benefit payment being made after retirement.
For active members, the probabilities of dying before retirement were based upon the same mortality table
as members dying after retirement (75% of deaths are assumed to be service-connected).
For disabled retirees, the regular mortality tables are set forward 5 years in ages to reflect impaired
longevity.
19
The rates of retirement used to measure the probability of eligible members who were not affected by the
change in normal retirement eligibility (who had at least 10 years of service as of the change date) retiring
during the next year are as follows:
Age
42 - 45464748495051525354555657585960
10 0.0%0.0%0.0%0.0%0.0%2.5%2.5%20.0%20.0%20.0%55.0%65.0%65.0%65.0%65.0%100.0%
11 0.0%0.0%0.0%0.0%0.0%2.5%2.5%10.0%10.0%10.0%47.5%57.5%60.0%60.0%60.0%100.0%
12 0.0%0.0%0.0%0.0%0.0%2.5%2.5%10.0%10.0%10.0%47.5%57.5%60.0%60.0%60.0%100.0%
13 0.0%0.0%0.0%0.0%0.0%2.5%2.5%10.0%10.0%10.0%47.5%57.5%60.0%60.0%60.0%100.0%
14 0.0%0.0%0.0%0.0%0.0%2.5%2.5%10.0%10.0%10.0%47.5%57.5%60.0%60.0%60.0%100.0%
15 0.0%0.0%0.0%0.0%0.0%2.5%2.5%10.0%10.0%10.0%47.5%57.5%60.0%60.0%60.0%100.0%
16 0.0%0.0%0.0%0.0%0.0%2.5%2.5%10.0%10.0%10.0%47.5%57.5%60.0%60.0%60.0%100.0%
17 0.0%0.0%0.0%0.0%0.0%2.5%2.5%10.0%10.0%10.0%47.5%57.5%60.0%60.0%60.0%100.0%
18 0.0%0.0%0.0%0.0%0.0%2.5%2.5%10.0%10.0%10.0%47.5%57.5%60.0%60.0%60.0%100.0%
19 0.0%0.0%0.0%0.0%0.0%2.5%2.5%10.0%10.0%10.0%47.5%57.5%60.0%60.0%60.0%100.0%
20 20.0%22.5%22.5%22.5%22.5%25.0%27.5%30.0%40.0%45.0%70.0%80.0%80.0%80.0%80.0%100.0%
21 5.0%5.0%5.0%10.0%10.0%12.5%12.5%12.5%15.0%15.0%47.5%65.0%65.0%65.0%65.0%100.0%
22 5.0%5.0%5.0%10.0%10.0%12.5%12.5%12.5%15.0%15.0%47.5%65.0%65.0%65.0%65.0%100.0%
23 5.0%5.0%5.0%10.0%10.0%15.0%15.0%15.0%15.0%15.0%47.5%65.0%65.0%65.0%65.0%100.0%
24 5.0%5.0%5.0%10.0%10.0%15.0%15.0%15.0%15.0%15.0%47.5%65.0%65.0%65.0%65.0%100.0%
25 100.0%100.0%100.0%100.0%100.0%100.0%100.0%100.0%100.0%100.0%100.0%100.0%100.0%100.0%100.0%100.0%
S
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The probability of normal retirement for members affected by the change in normal retirement eligibility (to
age 59 with 10 years of service) is 100% when first eligible. The probability of early retirement for these
members is 2.5% for each year eligible.
Rates of separation from active membership were as shown below (rates do not apply to members
eligible to retire and do not include separation on account of death or disability). This assumption
measures the probabilities of members remaining in employment.
Sample
Ages
206.0%
255.7
305.0
353.8
402.6
451.6
500.8
550.3
% of Active Members
Separating Within Next Year
Rates of disability among active members (75% of disabilities are assumed to be service-connected).
Sample
Ages
200.21%
250.23
300.27
350.35
400.45
450.77
501.50
552.32
% Becoming Disabled
within Next Year
20
Miscellaneous and Technical Assumptions
Administrative & Investment
Expenses
The investment return assumption is intended to be the return net of
investment expenses. Annual administrative expenses are assumed to
be equal to the average of the prior two years’ expenses. Assumed
administrative expenses are added to the Normal Cost.
Benefit Service Exact fractional service is used to determine the amount of benefit
payable.
Decrement Operation Disability and mortality decrements operate during retirement
eligibility.
Decrement Timing Decrements of all types are assumed to occur at the beginning of the
year.
Eligibility Testing Eligibility for benefits is determined based upon the age nearest
birthday and service nearest whole year on the date the decrement is
assumed to occur.
Forfeitures For vested separations from service, it is assumed that 0% of members
separating will withdraw their contributions and forfeit an employer
financed benefit. It was further assumed that the liability at
termination is the greater of the vested deferred benefit (if any) or the
member’s accumulated contributions.
Incidence of Contributions Employer contributions are assumed to be made in equal installments
at the end of each quarter. Member contributions are assumed to be
received continuously throughout the year based upon the computed
percent of payroll shown in this report, and the actual payroll payable
at the time contributions are made.
Liability Load Projected normal and early retirement benefits are loaded based on the
dollar amount of each active member’s frozen accrued leave as of
September 13, 2012 to allow for the inclusion of unused sick and
vacation pay (frozen as of September 13, 2012) in final average
earnings.
Marriage Assumption 100% of males and 100% of females are assumed to be married for
purposes of death-in-service benefits. Male spouses are assumed to be
three years older than female spouses for active member valuation
purposes.
Normal Form of Benefit A 10-year certain and life annuity is the normal form of benefit.
Pay Increase Timing Middle of fiscal year. This is equivalent to assuming that reported pays
represent amounts paid to members during the year ended on the
valuation date.
Service Credit Accruals It is assumed that members accrue one year of service credit per year.
21
GLOSSARY
Actuarial Accrued Liability
(AAL)
The difference between the Actuarial Present Value of Future Benefits,
and the Actuarial Present Value of Future Normal Costs.
Actuarial Assumptions Assumptions about future plan experience that affect costs or liabilities,
such as: mortality, withdrawal, disablement, and retirement; future
increases in salary; future rates of investment earnings; future investment
and administrative expenses; characteristics of members not specified in
the data, such as marital status; characteristics of future members; future
elections made by members; and other items.
Actuarial Cost Method A procedure for allocating the Actuarial Present Value of Future Benefits
between the Actuarial Present Value of Future Normal Costs and the
Actuarial Accrued Liability.
Actuarial Equivalent Of equal Actuarial Present Value, determined as of a given date and based
on a given set of Actuarial Assumptions.
Actuarial Present Value
(APV)
The amount of funds required to provide a payment or series of payments
in the future. It is determined by discounting the future payments with an
assumed interest rate and with the assumed probability each payment will
be made.
Actuarial Present Value of
Future Benefits (APVFB)
The Actuarial Present Value of amounts which are expected to be paid at
various future times to active members, retired members, beneficiaries
receiving benefits, and inactive, nonretired members entitled to either a
refund or a future retirement benefit. Expressed another way, it is the
value that would have to be invested on the valuation date so that the
amount invested plus investment earnings would provide sufficient assets
to pay all projected benefits and expenses when due.
Actuarial Valuation The determination, as of a valuation date, of the Normal Cost, Actuarial
Accrued Liability, Actuarial Value of Assets, and related Actuarial
Present Values for a plan. An Actuarial Valuation for a governmental
retirement system typically also includes calculations of items needed for
compliance with GASB No. 25, such as the Funded Ratio and the Annual
Required Contribution (ARC).
Actuarial Value of Assets The value of the assets as of a given date, used by the actuary for
valuation purposes. This may be the market or fair value of plan assets
or a smoothed value in order to reduce the year-to-year volatility of
calculated results, such as the funded ratio and the actuarially required
contribution (ARC).
22
Amortization Method A method for determining the Amortization Payment. The most common
methods used are level dollar and level percentage of payroll. Under the
Level Dollar method, the Amortization Payment is one of a stream of
payments, all equal, whose Actuarial Present Value is equal to the UAAL.
Under the Level Percentage of Pay method, the Amortization Payment is
one of a stream of increasing payments, whose Actuarial Present Value is
equal to the UAAL. Under the Level Percentage of Pay method, the
stream of payments increases at the rate at which total covered payroll of
all active members is assumed to increase.
Amortization Payment That portion of the plan contribution or ARC which is designed to pay
interest on and to amortize the Unfunded Actuarial Accrued Liability.
Amortization Period The period used in calculating the Amortization Payment.
Annual Required
Contribution (ARC)
The employer’s periodic required contributions, expressed as a dollar
amount or a percentage of covered plan compensation, determined under
GASB No. 25. The ARC consists of the Employer Normal Cost and
Amortization Payment.
Closed Amortization Period A specific number of years that is reduced by one each year, and declines
to zero with the passage of time. For example if the amortization period is
initially set at 30 years, it is 29 years at the end of one year, 28 years at the
end of two years, etc.
Employer Normal Cost The portion of the Normal Cost to be paid by the employer. This is
equal to the Normal Cost less expected member contributions.
Equivalent Single
Amortization Period
For plans that do not establish separate amortization bases (separate
components of the UAAL), this is the same as the Amortization Period.
For plans that do establish separate amortization bases, this is the period
over which the UAAL would be amortized if all amortization bases were
combined upon the current UAAL payment.
Experience Gain/Loss A measure of the difference between actual experience and that expected
based upon a set of Actuarial Assumptions, during the period between two
actuarial valuations. To the extent that actual experience differs from that
assumed, Unfunded Actuarial Accrued Liabilities emerge which may be
larger or smaller than projected. Gains are due to favorable experience,
e.g., the assets earn more than projected, salaries do not increase as fast as
assumed, members retire later than assumed, etc. Favorable experience
means actual results produce actuarial liabilities not as large as projected
by the actuarial assumptions. On the other hand, losses are the result of
unfavorable experience, i.e., actual results that produce Unfunded
Actuarial Accrued Liabilities which are larger than projected.
23
Funded Ratio The ratio of the Actuarial Value of Assets to the Actuarial Accrued
Liability.
GASB Governmental Accounting Standards Board.
GASB No. 25 and
GASB No. 27
These are the governmental accounting standards that set the accounting
rules for public retirement systems and the employers that sponsor or
contribute to them. Statement No. 27 sets the accounting rules for the
employers that sponsor or contribute to public retirement systems, while
Statement No. 25 sets the rules for the systems themselves.
Normal Cost The annual cost assigned, under the Actuarial Cost Method, to the current
plan year.
Open Amortization Period An open amortization period is one which is used to determine the
Amortization Payment but which does not change over time. In other
words, if the initial period is set as 30 years, the same 30-year period is
used in determining the Amortization Period each year. In theory, if an
Open Amortization Period is used to amortize the Unfunded Actuarial
Accrued Liability, the UAAL will never completely disappear, but will
become smaller each year, either as a dollar amount or in relation to
covered payroll.
Unfunded Actuarial Accrued
Liability
The difference between the Actuarial Accrued Liability and Actuarial
Value of Assets.
Valuation Date The date as of which the Actuarial Present Value of Future Benefits are
determined. The benefits expected to be paid in the future are discounted
to this date.
SECTION C
PENSION FUND INFORMATION
24
Statement of Plan Assets at Market Value
Item20122011
A.Cash and Cash Equivalents (Operating Cash)1,285,425$ 129,016$
B.Receivables:
1.Member Contributions34,753$ 73,914$
2.Employer Contributions- 971,393
3.State Contributions- -
4.Investment Income and Other Receivables240,411 350,067
5.Total Receivables275,164$ 1,395,374$
C.Investments
1.Short Term Investments3,499,191$ 1,701,615$
2.Domestic Equities30,327,759 21,218,413
3.International Equities3,680,875 3,083,297
4.Domestic Fixed Income14,463,030 15,483,122
5.International Fixed Income1,545,948 1,432,846
6.Real Estate557,928 -
7.Private Equity- -
8.Total Investments54,074,731$ 42,919,293$
D.Liabilities
1.Benefits Payable-$ -$
2.Accrued Expenses and Other Payables(374,168) (164,299)
3.Total Liabilities(374,168)$ (164,299)$
E.Total Market Value of Assets Available for Benefits55,261,152$ 44,279,384$
F.Reserves
1.State Contribution Reserve(538,552)$ (505,662)$
2.DROP Accounts(5,578,164) (3,394,236)
3.Total Reserves(6,116,716)$ (3,899,898)$
G.Market Value Net of Reserves49,144,436$ 40,379,486$
H.Allocation of Investments
1.Short Term Investments6.5%4.0%
2.Domestic Equities56.1%49.4%
3.International Equities6.8%7.2%
4.Domestic Fixed Income26.7%36.1%
5.International Fixed Income2.9%3.3%
6.Real Estate1.0%0.0%
7.Private Equity0.0%0.0%
8.Total Investments100.0%100.0%
September 30
25
Reconciliation of Plan Assets
Item 20122011
A.Market Value of Assets at Beginning of Year44,279,384$ 41,403,852$
B.Revenues and Expenditures
1.Contributions
a.Member Contributions559,305$ 690,226$
b.Employer Contributions3,785,539 3,885,572
c.State Contributions445,534 435,787
d.Total4,790,378$ 5,011,585$
2.Investment Income
a.Interest, Dividends, and Other Income773,887$ 832,952$
b.Net Realized/Unrealized Gains/(Losses)*7,589,148 (851,895)
c.Investment Expenses(152,703) (136,513)
d.Net Investment Income8,210,332$ (155,456)$
3.Benefits and Refunds
a.Regular Monthly Benefits(1,679,226)$ (1,568,779)$
b.Refunds- (21,975)
c.Lump Sum Benefits- -
d.DROP Distributions(227,800) (254,626)
e.Total(1,907,026)$ (1,845,380)$
4.Administrative and Miscellaneous Expenses(111,916)$ (135,217)$
5.Transfers-$ -$
C.Market Value of Assets at End of Year55,261,152$ 44,279,384$
D.Reserves
1.State Contribution Reserve(538,552)$ (505,662)$
2.DROP Accounts(5,578,164) (3,394,236)
3.Total Reserves(6,116,716)$ (3,899,898)$
E.Market Value Net of Reserves49,144,436$ 40,379,486$
September 30
* Breakdown between realized and unrealized gains/(losses) was not provided.
26
Year
Ended
9/30
Balance at
Beginning
of YearCreditsInterestDistributionsAdjustments
Balance at
End of
Year
2002-$ 25,536$ 559$ -$ -$ 26,095$
200326,09535,048962(33,734) - 28,371
200428,37167,2784,210- - 99,859
200599,859107,7169,307(54,224) - 162,658
2006162,65888,33213,653- - 264,643
2007264,643164,84422,183- - 451,670
2008451,670188,43424,255(215,043) 2,665 451,981
2009451,981557,33946,178- - 1,055,498
20101,055,498993,75396,296(91,000) - 2,054,547
20112,054,5471,426,393167,922(254,626) - 3,394,236
20123,394,2362,128,627283,101(227,800) - 5,578,164
Reconciliation of DROP Accounts
27
Calculation of Actuarial Value of Assets
Item
A. Beginning of Year Assets*
1. Market Value$44,279,384 *$41,403,852
2. Actuarial Value49,609,638 44,485,075
B. End of Year Market Value
of Assets*55,261,152 44,279,384
C. Net of Contributions
Less Disbursements2,771,436 *3,007,948
D. Actual Net Investment
Earnings8,210,332 (155,456)
E. Expected Investment
Earnings3,773,656 3,449,179
F. End of Year Expected
Actuarial Value56,154,730 50,942,202
G. End of Year Market Value Less
Expected Actuarial Value: B - F(893,578)(6,662,818)
H. 20% of Difference(178,716)(1,332,564)
I. End of Year Assets
1. Actuarial Value:
F + H55,976,014 49,609,638
2. Final Actuarial Value
Within 80% to 120%
of Market Value55,976,014 49,609,638
J. State Contribution Reserve538,552 505,662
K. DROP Accounts5,578,164 3,394,236
L. Final Actuarial Value of Assets:
I2 - J - K49,859,298 45,709,740
M. Recognized Investment Earnings3,594,940 2,116,615
N. Recognized Rate of Return7.0%4.6%
20122011
Year Ending September 30
* Before offset of DROP Account Balances and State Contribution Reserve.
28
1990 9.1 % 9.1 %
1991 8.6 8.6
1992 8.2 8.2
1993 8.8 8.8
1994 2.4 2.4
1995 18.2 18.2
1996 5.2 5.2
1997 24.2 10.3
1998 5.3 9.2
1999 11.6 9.6
2000 6.7 9.0
2001 (7.8) 6.3
2002 (6.5) (1.6)
2003 12.7 3.7
2004 8.6 3.9
2005 9.6 4.8
2006 6.4 6.5
2007 11.5 8.1
2008 (13.9) 3.6
2009 6.7 4.4
2010 9.8 5.6
2011 (0.4) 4.6
2012 18.0 7.0
Average Returns:
Last 5 Years 3.5 % 5.0 %
Last 10 Years 6.6 % 5.2 %
All Years 6.8 % 6.7 %
* Net of investment expenses after 2005.
Investment Rate of Return
Actuarial ValueMarket Value *
Year Ending
September 30
The above rates are based on the retirement system’s financial information reported to the actuary. They
may differ from figures that the investment consultant reports, in part because of differences in the
handling of administrative and investment expenses, and in part because of differences in the handling of
cash flows.
SECTION D
FINANCIAL ACCOUNTING INFORMATION
29
A.Valuation Date
B.Actuarial Present Value of Accumulated
Plan Benefits
1.Vested Benefits
a.Members Currently Receiving Payments$51,493,510$44,459,157
b.Terminated Vested Members279,574254,908
c.Other Members17,138,30020,221,453
d.Total68,911,38464,935,518
2.Non-Vested Benefits1,241,3001,834,546
3.Total Actuarial Present Value of Accumulated
Plan Benefits: 1d + 270,152,68466,770,064
4.Accumulated Contributions of Active Members4,190,4944,622,917
C.Changes in the Actuarial Present Value of
Accumulated Plan Benefits
1.Total Value at Beginning of Year66,770,06460,581,471
2.Increase (Decrease) During the Period
Attributable to:
a.Plan Amendment and Change in
Actuarial Assumptions684,655764,846
c.Latest Member Data, Benefits Accumulated
and Decrease in the Discount Period6,505,8188,440,894
d.Benefits Paid(3,807,853)(3,017,147)
e.Net Increase3,382,6206,188,593
3.Total Value at End of Period70,152,68466,770,064
D.
a.Vested65,610,39762,459,677
b.Non-Vested1,106,3331,697,782
c.Total66,716,73064,157,459
E.Market Value of Assets49,144,43640,379,486
F.Funded Ratio Using FRS Interest Rate (7.75%)73.7%62.9%
G.Actuarial Assumptions - See page entitled
Actuarial Assumptions and Methods
Actuarial Present Value of Accumulated Plan
Benefits Using FRS Interest Rate (7.75%)
October 1, 2012October 1, 2011
FASB NO. 35 INFORMATION
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31
SCHEDULE OF CONTRIBUTIONS FROM THE EMPLOYER
AND THE STATE OF FLORIDA
(GASB Statement No. 25)
Year Ending
September 30
1994$242,083$268,705111.0%
1995244,317258,492105.8
1996404,856438,206108.2
1997438,074469,583107.2
1998592,522601,235101.5
1999760,142760,959100.1
2000853,790853,790100.0
2001935,273945,392101.1
20021,005,6621,015,588101.0
20031,425,3281,425,328100.0
20041,475,3401,475,340100.0
20051,704,0411,704,041100.0
20061,931,0542,107,880109.2
20073,176,7913,176,791100.0
20083,556,5483,556,548100.0
20093,762,3233,762,323100.0
20104,368,6124,368,612100.0
20114,298,2164,298,216100.0
20124,198,1834,198,183100.0
Contribution
Percentage
Contributed
Annual Required
Contribution
Actual
32
Employer FYE September 30201320122011
Annual Required Contribution (ARC)*3,113,406$ 1 4,198,183$ 4,298,216$
Interest on Net Pension Obligation (NPO)(14,017) (14,872) (15,858)
Adjustment to ARC(18,347) (23,829) (26,320)
Annual Pension Cost (APC)3,117,736 4,207,140 4,308,678
Contributions made**4,198,183 4,298,216
Increase (decrease) in NPO**8,957 10,462
NPO at beginning of year(192,016) (200,973) (211,435)
NPO at end of year**(192,016) (200,973)
* Includes expected State contribution.
** To be determined.
ANNUAL PENSION COST AND NET PENSION OBLIGATION
(GASB STATEMENT NO. 27)
1 This amount is an estimate. The final required contribution should be no less than the percent of payroll
requirement multiplied by the actual covered payroll for the fiscal year.
Fiscal Annual PensionActual
Year EndingCost (APC)Contribution
9/30/20104,380,133$ 4,368,612$ 99.7%(211,435)$
9/30/20114,308,678 4,298,216 99.8(200,973)
9/30/20124,207,140 4,198,183 99.8(192,016)
APC ContributedObligation
THREE YEAR TREND INFORMATION
Percentage of Net Pension
33
REQUIRED SUPPLEMENTARY INFORMATION
GASB Statement No. 25 and No. 27
The information presented in the required supplementary schedules was determined as part of the
actuarial valuations at the dates indicated. Additional information as of the latest actuarial valuation:
Valuation Date October 1, 2012
Contribution Rates
Employer (and State) 60.62%
Plan Members 8.60%
Actuarial Cost Method Entry Age Normal
Amortization Method Level percent, closed
Remaining Amortization Period 24 years
Asset Valuation Method Recognizes 20% of difference
between market value of assets
and expected actuarial asset
value
Actuarial Assumptions
Investment rate of return 7.3%
Projected salary increases 7.5%
Includes inflation and other general increases at 3.0%
Cost-of-living adjustments Not Applicable
SECTION E
MISCELLANEOUS INFORMATION
34
A.
1.Number Included in Last Valuation8493
2.New Members24
3.Non-Vested Employment Terminations(3)(2)
4.Vested Employment Terminations00
5.Service Retirements00
6.DROP Retirement(8)(11)
7.Disability Retirements00
8.Deaths(1)0
9.Other -- Data Corrections00
10.Number Included in This Valuation7484
B.
1.Number Included in Last Valuation11
2.Additions from Active Members00
3.Lump Sum Payments/Refund of Contributions00
4.Payments Commenced00
5.Deaths00
6.Other00
7.Number Included in This Valuation11
1.Number Included in Last Valuation2415
2.Additions from Active Members811
3.Retirements(4)(2)
4.Deaths Resulting in No Further Payments00
5.Other00
6.Number Included in This Valuation2824
D.
1.Number Included in Last Valuation3230
2.Additions from Active Members00
3.Additions from Terminated Vested Members00
4.Additions from DROP42
5.Deaths Resulting in No Further Payments00
6.Deaths Resulting in New Survivor Benefits00
7.End of Certain Period - No Further Payments00
8.Other 00
9.Number Included in This Valuation3632
RECONCILIATION OF MEMBERSHIP DATA
Active Members
Service Retirees, Disability Retirees and Beneficiaries
Terminated Vested Members
From 10/1/10From 10/1/11
To 10/1/11To 10/1/12
C. DROP Plan Members
35
ACTIVE PARTICIPANT DISTRIBUTION
Age Group 0-1 1-2 2-3 3-4 4-5 5-9 10-14 15-19 20-24 25 & Up Totals
20-24 NO.21000000003
TOT PAY90,45245,22600000000135,678
AVG PAY45,22645,2260000000045,226
25-29 NO.00011400006
TOT PAY00047,97247,931201,9860000297,889
AVG PAY00047,97247,93150,496000049,648
30-34 NO.00000520007
TOT PAY00000256,554112,169000368,723
AVG PAY0000051,31156,08400052,675
35-39 NO.0000010600016
TOT PAY00000566,988357,091000924,079
AVG PAY0000056,69959,51500057,755
40-44 NO.000008690023
TOT PAY00000431,990369,443704,259001,505,692
AVG PAY0000053,99961,57478,2510065,465
45-49 NO.000003170011
TOT PAY00000170,30664,106565,28100799,693
AVG PAY0000056,76964,10680,7540072,699
50-54 NO.00100104006
TOT PAY00120,0000057,8500350,45800528,308
AVG PAY00120,0000057,850087,6140088,051
55-59 NO.00000100001
TOT PAY0000057,490000057,490
AVG PAY0000057,490000057,490
60-64 NO.01000000001
TOT PAY0115,00000000000115,000
AVG PAY0115,00000000000115,000
65-69 NO.00000000000
TOT PAY00000000000
AVG PAY00000000000
TOT NO.221113215200074
TOT AMT90,452160,226120,00047,97247,9311,743,164902,8091,619,998004,732,552
AVG AMT45,22680,113120,00047,97247,93154,47460,18781,0000063,953
Years of Service to Valuation Date
36
INACTIVE PARTICIPANT DISTRIBUTION
DisabledRetired*
TotalTotalTotalTotal
Age Group NumberBenefitsNumberBenefitsNumberBenefitsNumberBenefits
Under 20- - - - - - - -
20-24- - - - - - - -
25-29- - - - - - - -
30-34- - - - - - - -
35-39- - - - - - - -
40-441 49,452 - - 2 122,783 - -
45-49- - 1 23,392 17 1,462,422 - -
50-54- - 3 87,331 14 1,280,783 - -
55-59- - 5 144,248 6 380,608 - -
60-64- - 1 17,851 7 385,978 2 65,847
65-69- - - - 4 144,116 - -
70-74- - - - 2 92,260 - -
75-79- - - - - - - -
-
80-84- - - - - - - -
85-89- - - - - - - -
90-94- - - - - - - -
95-99- - - - - - - -
100 & Over- - - - - - - -
Total 1 49,452 10 272,822 52 3,868,950 2 65,847
Average Age 41 56 55 62
Terminated Vested
Deceased with
Beneficiary
* Does not include deferred supplemental benefits for DROP members
SECTION F
SUMMARY OF PLAN PROVISIONS
37
SUMMARY OF PLAN PROVISIONS
A. Ordinances
The Plan was established under the Code of Ordinances for the City of Palm Beach Gardens,
Florida, Chapter 50, Article III, and was most recently amended under Ordinance No. 24, 2012
passed and adopted on September 13, 2012. The Plan is also governed by certain provisions of
Chapter 185, Florida Statutes, Part VII, Chapter 112, Florida Statutes and the Internal Revenue
Code.
B. Effective Date
July 1, 1972
C. Plan Year
October 1 through September 30
D. Type of Plan
Qualified, governmental defined benefit retirement plan; for GASB purposes it is a single employer
plan.
E. Eligibility Requirements
All full-time police officers are eligible for membership on the first day of the month coincident
with or next following date of employment.
F. Credited Service
Service is measured as the total number of full years (and fraction thereof) of continuous service
from the date of employment to the date of termination. No service is credited for any periods of
employment for which the member received a refund of employee contributions.
G. Compensation
Base pay, but not less than the amount of total W-2 Compensation prior to September 13, 2012.
H. Average Monthly Earnings (AME)
The average of Compensation over the last 5 years of Credited Service; includes a lump sum
payment of unused leave pay (no more than the dollar amount of unused leave accrued as of
September 13, 2012).
38
I. Normal Retirement
Eligibility: A member with at least ten years of service on September 13, 2012 may retire on
the first day of the month coincident with or next following the earlier of:
(1) age 52 and 10 years of Credited Service, or
(2) 20 years of Credited Service regardless of age.
A member with less than ten years of service on September 13, 2012 may retire on
the first day of the month coincident with or next following:
age 59 and 10 years of Credited Service.
Benefit: For service accrued before September 13, 2012, 3.5% of AME multiplied by years
of Credited Service. For service accrued after September 13, 2012, 2.75% of AME
multiplied by years of Credited Service. The maximum benefit is equal to 75% of
AME, or the percentage earned as of September 13, 2012, if greater.
Normal Form
of Benefit: 10 Years Certain and Life thereafter; other options are also available.
Supplemental
Benefit: A monthly supplemental benefit of $12.50 per year of Credited Service is payable
to all retirees and their beneficiaries in pay status.
COLA: None
J. Early Retirement
Eligibility: A member may elect to retire earlier than the Normal Retirement Eligibility upon
attainment of age 50 and 10 years of Credited Service.
Benefit: The Normal Retirement Benefit is reduced by 3.0% for each year by which the
Early Retirement date precedes the Normal Retirement date.
Normal Form
of Benefit: 10 Years Certain and Life thereafter; other options are also available.
Supplemental
Benefit: A monthly supplemental benefit of $12.50 per year of Credited Service is payable
to all retirees and their beneficiaries in pay status.
COLA: None
K. Delayed Retirement
Same as Normal Retirement taking into account compensation earned and service credited until the
date of actual retirement.
L. Service Connected Disability
Eligibility: Any member who becomes totally and permanently disabled and unable to render
useful and efficient service as a police officer for a period of at least 6 months
39
resulting from an act occurring in the performance of service for the City is eligible
for a disability benefit.
Benefit: 60% of the current rate of pay, but no less than the accrued Normal Retirement
Benefit taking into account compensation earned and service credited until the date
of disability. Disability benefits, when combined with Social Security, Worker’s
Compensation or any other local, state or federal government benefits, cannot
exceed and will be limited to the AME on the date of disability.
Normal Form
of Benefit: 10 Years Certain and Life thereafter; other options are also available.
Supplemental
Benefit: A monthly supplemental benefit of $12.50 per year of Credited Service is payable
to all retirees and their beneficiaries in pay status.
COLA: None
M. Non-Service Connected Disability
Eligibility: Any member with 10 years of Credited Service who becomes totally and
permanently disabled and unable to render useful and efficient service as a police
officer for a period of at least 6 months is eligible for a disability benefit.
Benefit: 2.5% of AME multiplied by Credited Service, but not less than 25% of salary or the
accrued Normal Retirement Benefit taking into account compensation earned and
service credited until the date of disability. Disability benefits, when combined
with Social Security, Worker’s Compensation or any other local, state or federal
government benefits, cannot exceed and will be limited to the AME on the date of
disability.
Normal Form
of Benefit: 10 Years Certain and Life thereafter; other options are also available.
Supplemental
Benefit: A monthly supplemental benefit of $12.50 per year of Credited Service is payable
to all retirees and their beneficiaries in pay status.
COLA: None
N. Death in the Line of Duty
Eligibility: Members who die as a result of personal injury or disease arising out of the
member’s actual performance of duties are eligible for survivor benefits regardless
of Credited Service.
40
Benefit: The surviving spouse will receive the greater of:
(1) 50% of the member’s AME, or
(2) the member’s accrued Normal Retirement Benefit as of the date of death with no
actuarial reduction for Early Retirement.
If there is no spouse, or if the surviving spouse dies, the spouse’s benefit determined
above shall be distributed equally among any eligible children. If there is no spouse
or eligible children, the benefit will be paid to the deceased member’s estate.
Normal Form
of Benefit: Spouse’s benefits are payable until death; children’s benefits are payable until age
18 (24 if a full-time student), marriage, death, or adoption. Benefits paid to a
member’s estate may be paid as a lump sum at the discretion of the Board of
Trustees.
Supplemental
Benefit: A monthly supplemental benefit of $12.50 per year of Credited Service is payable
to all retirees and their beneficiaries in pay status.
COLA: None
O. Other Pre-Retirement Death
Eligibility: Members are eligible for survivor benefits after the completion of 5 or more years
of Credited Service.
Benefit: The survivor benefit payable to the designated beneficiary is the member’s accrued
Normal Retirement Benefit. Benefit is payable at the member’s Early or Normal
retirement date and will be actuarially reduced for Early Retirement when
applicable.
Normal Form
of Benefit: For member’s eligible for Normal or Delayed Retirement on the date of death, the
designated beneficiary’s benefit will be paid for life. For members not yet
eligible, benefits will be paid for 10 years.
Supplemental
Benefit: A monthly supplemental benefit of $12.50 per year of Credited Service is payable
to all retirees and their beneficiaries in pay status.
COLA: None
The beneficiary of a plan member with less than 5 years of Credited Service at the time of death
will receive a refund of the member’s accumulated contributions without interest.
41
P. Post Retirement Death
Benefit determined by the form of benefit elected upon retirement.
Q. Optional Forms
In lieu of electing the Normal Form of benefit, the optional forms of benefits available to all retirees
are a Single Life Annuity or the 50%, 66 2/3%, 75% and 100% Joint and Survivor options.
R. Vested Termination
Eligibility: A member has earned a non-forfeitable right to Plan benefits after the completion of
5 years of Credited Service (see vesting table below).
Years of
Credited Service
Vested
%
Under 5
5
6
7
8
9
10 or more
0%
25
40
55
70
85
100
Benefit: The benefit is the member’s vested accrued Normal Retirement Benefit as of the
date of termination. Benefit begins at the member’s Normal Retirement date.
Alternatively, members with at least 10 years of Credited Service may elect to
receive an actuarially reduced Early Retirement Benefit any time after age 50.
Normal Form
of Benefit: 10 Years Certain and Life thereafter; other options are also available.
Supplemental
Benefit: A monthly supplemental benefit of $12.50 per year of Credited Service is payable
to all retirees and their beneficiaries once in pay status.
COLA: None
Members terminating employment with less than 5 years of Credited Service will receive a refund of
their own accumulated contributions without interest.
S. Refunds
Eligibility: All members terminating employment with less than 5 years of Credited Service are
eligible. Optionally, vested members (those with 5 or more years of Credited
Service) may elect a refund in lieu of the vested benefits otherwise due.
Benefit: Refund of the member’s contributions without interest.
42
T. Member Contributions
8.6% of Compensation
U. State Contributions
Chapter 185 Premium Tax Refunds
V. Employer Contributions
Any additional amount needed to fund the plan properly according to State laws.
W. Cost of Living Increases
None.
X. 13th Check
Not Applicable
Y. Deferred Retirement Option Plan
Eligibility: A member who had at least ten years of Credited Service as of September 13, 2012
may enter the DROP on the first day of the month coincident with or next following
the earlier of:
(1) age 52 and 10 years of Credited Service, or
(2) 20 years of Credited Service regardless of age.
Members with less than ten years of Credited Service on September 13, 2012 may
enter the DROP on the first day of the month coincident with or next following:
age 59 and 10 years of Credited Service.
Members who meet eligibility must submit a written election to participate in the
DROP. The election to participate must be made within the first 28.5 years of
Credited Service and members can no longer participate after attaining 33.5 years of
employment service.
Benefit: The member’s Credited Service and AME are frozen upon entry into the DROP.
The monthly retirement benefit as described under Normal Retirement is calculated
based upon the frozen Credited Service and AME.
Maximum
DROP Period: 60 months
Interest
Credited: The member's DROP account is credited quarterly at an interest rate based upon
the option chosen by the member. Members must elect from 1 of the 2 following
options:
1. Gain or loss at the same rate earned by the Plan, or
2. Guaranteed rate of 6.5% per annum.
43
Normal Form
of Benefit: Lump Sum; member may also elect that the DROP distribution be paid in 3 equal
payments over 3 years or used to purchase an annuity to be paid in monthly
installments.
COLA: None
Z. Other Ancillary Benefits
There are no ancillary retirement type benefits not required by statutes but which might be deemed
a City of Palm Beach Gardens Police Officers’ Pension Fund liability if continued beyond the
availability of funding by the current funding source.
AA. Changes from Previous Valuation
Under Ordinance 24, 2012, adopted on September 13, 2012, the following changes have been made:
The benefit multiplier was lowered from 3.50% to 2.75% per year of service for service accrued
after September 13, 2012. This change did not apply to members who were eligible for normal
retirement as of September 13, 2012.
The total maximum benefit that may be accrued under the Plan was reduced from 100% to 75% of
Average Final Compensation. However, any member who had accrued a greater percentage as of
September 13, 2012 retains that percentage and will not accrue an increased percentage. This
change did not apply to members who are eligible for normal retirement as of September 13, 2012.
Compensation was changed from total W-2 earnings to base pay excluding all other pay. However,
compensation for pension purposes after September 13, 2012 will not be less than the compensation
on the day before the effective date under the previous definition.
The amount of unused leave pay included in compensation is limited to the dollar amount accrued
on September 13, 2012.
The normal retirement date was changed to age 59 with 10 years of service from the earlier of age
52 with 10 years of service or 20 years of service regardless of age. This change did not apply to
members who had at least ten years of service as of September 13, 2012.
The COLA provided by actuarial gains was eliminated.
Florida Senate - 2013 CS for SB 458
By the Committee on Governmental Oversight and Accountability;
and Senator Ring
585-01746-13 2013458c1
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A bill to be entitled 1
An act relating to firefighter and police officer 2
pension plans; amending s. 175.021, F.S.; revising the 3
legislative declaration to require all plans to meet 4
the requirements of ch. 175, F.S., in order to receive 5
insurance premium tax revenues; amending s. 175.032, 6
F.S.; revising definitions to conform to changes made 7
by the act and adding new definitions; amending s. 8
175.071, F.S.; conforming a cross-reference; amending 9
s. 175.091, F.S.; revising existing payment provisions 10
and providing an additional mandatory payment by the 11
municipality or special fire control district to the 12
firefighters’ pension trust fund; amending s. 175.351, 13
F.S., relating to municipalities and special fire 14
control districts that have their own pension plans 15
and want to participate in the distribution of a tax 16
fund; revising how income from the premium tax must be 17
used; requiring plan sponsors to have a defined 18
contribution plan in place by a certain date; amending 19
s. 185.01, F.S.; revising the legislative declaration 20
to require all plans to meet the requirements of ch. 21
185, F.S., in order to receive insurance premium tax 22
revenues; amending s. 185.02, F.S.; revising 23
definitions to conform to changes made by the act and 24
adding new definitions; deleting a provision allowing 25
a local law plan to limit the amount of overtime 26
payments which can be used for retirement benefit 27
calculations; amending s. 185.06, F.S.; conforming a 28
cross-reference; amending s. 185.07, F.S.; revising 29
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existing payment provisions and providing for an 30
additional mandatory payment by the municipality to 31
the police officers’ retirement trust fund; amending 32
s. 185.35, F.S., relating to municipalities that have 33
their own pension plans for police officers and want 34
to participate in the distribution of a tax fund; 35
revising how income from the premium tax must be used; 36
requiring plan sponsors to have a defined contribution 37
plan in place by a certain date; providing a 38
declaration of important state interest; providing an 39
effective date. 40
41
Be It Enacted by the Legislature of the State of Florida: 42
43
Section 1. Subsection (2) of section 175.021, Florida 44
Statutes, is amended to read: 45
175.021 Legislative declaration.— 46
(2) This chapter hereby establishes, for all municipal and 47
special district pension plans existing now or hereafter under 48
this chapter, including chapter plans and local law plans, base 49
minimum benefits and minimum standards for the operation and 50
funding of such plans, hereinafter referred to as firefighters’ 51
pension trust funds, which must be met as a condition precedent 52
to the plan or plan sponsor receiving a distribution of 53
insurance premium tax revenues under s. 175.121. The base 54
minimum benefits and minimum standards for each plan as set 55
forth in this chapter may not be diminished by local charter, 56
ordinance, or resolution or by special act of the Legislature, 57
or nor may the minimum benefits or minimum standards be reduced 58
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or offset by any other local, state, or federal law that may 59
include firefighters in its operation, except as provided under 60
s. 112.65. 61
Section 2. Section 175.032, Florida Statutes, is amended to 62
read: 63
175.032 Definitions.—For any municipality, special fire 64
control district, chapter plan, local law municipality, local 65
law special fire control district, or local law plan under this 66
chapter, the term following words and phrases have the following 67
meanings: 68
(1) “Additional premium tax revenues” means revenues 69
received by a municipality or special fire control district 70
pursuant to s. 175.121 which exceed base premium tax revenues. 71
(2)(1)(a) “Average final compensation” for: 72
(a) A full-time firefighter means one-twelfth of the 73
average annual compensation of the 5 best years of the last 10 74
years of creditable service before prior to retirement, 75
termination, or death, or the career average as a full-time 76
firefighter since July 1, 1953, whichever is greater. A year is 77
shall be 12 consecutive months or such other consecutive period 78
of time as is used and consistently applied. 79
(b) “Average final compensation” for A volunteer 80
firefighter means the average salary of the 5 best years of the 81
last 10 best contributing years before a prior to change in 82
status to a permanent full-time firefighter or retirement as a 83
volunteer firefighter or the career average of a volunteer 84
firefighter, since July 1, 1953, whichever is greater. 85
(3) “Base benefits” means the level of benefits in 86
existence for firefighters on March 12, 1999. 87
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(4) “Base premium tax revenues” means revenues received by 88
a municipality or special fire control district pursuant to s. 89
175.121 equal to the amount of such revenues received for 90
calendar year 1997. 91
(5)(2) “Chapter plan” means a separate defined benefit 92
pension plan for firefighters which incorporates by reference 93
the provisions of this chapter and has been adopted by the 94
governing body of a municipality or special district. Except as 95
may be specifically authorized in this chapter, the provisions 96
of a chapter plan may not differ from the plan provisions set 97
forth in ss. 175.021-175.341 and 175.361-175.401. Actuarial 98
valuations of chapter plans shall be conducted by the division 99
as provided by s. 175.261(1). 100
(6)(3) “Compensation” or “salary” means, for 101
noncollectively bargained service earned before July 1, 2011, or 102
for service earned under collective bargaining agreements in 103
place before July 1, 2011, the fixed monthly remuneration paid a 104
firefighter. If remuneration is based on actual services 105
rendered, as in the case of a volunteer firefighter, the term 106
means the total cash remuneration received yearly for such 107
services, prorated on a monthly basis. For noncollectively 108
bargained service earned on or after July 1, 2011, or for 109
service earned under collective bargaining agreements entered 110
into on or after July 1, 2011, the term has the same meaning 111
except that when calculating retirement benefits, up to 300 112
hours per year in overtime compensation may be included as 113
specified in the plan or collective bargaining agreement, but 114
payments for accrued unused sick or annual leave may not be 115
included. 116
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(a) Any retirement trust fund or plan that meets the 117
requirements of this chapter does not, solely by virtue of this 118
subsection, reduce or diminish the monthly retirement income 119
otherwise payable to each firefighter covered by the retirement 120
trust fund or plan. 121
(b) The member’s compensation or salary contributed as 122
employee-elective salary reductions or deferrals to any salary 123
reduction, deferred compensation, or tax-sheltered annuity 124
program authorized under the Internal Revenue Code shall be 125
deemed to be the compensation or salary the member would receive 126
if he or she were not participating in such program and shall be 127
treated as compensation for retirement purposes under this 128
chapter. 129
(c) For any person who first becomes a member in any plan 130
year beginning on or after January 1, 1996, compensation for 131
that plan year may not include any amounts in excess of the 132
Internal Revenue Code s. 401(a)(17) limitation, as amended by 133
the Omnibus Budget Reconciliation Act of 1993, which limitation 134
of $150,000 shall be adjusted as required by federal law for 135
qualified government plans and shall be further adjusted for 136
changes in the cost of living in the manner provided by Internal 137
Revenue Code s. 401(a)(17)(B). For any person who first became a 138
member before the first plan year beginning on or after January 139
1, 1996, the limitation on compensation may not be less than the 140
maximum compensation amount that was allowed to be taken into 141
account under the plan in effect on July 1, 1993, which 142
limitation shall be adjusted for changes in the cost of living 143
since 1989 in the manner provided by Internal Revenue Code s. 144
401(a)(17)(1991). 145
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(7)(4) “Creditable service” or “credited service” means the 146
aggregate number of years of service, and fractional parts of 147
years of service, of any firefighter, omitting intervening years 148
and fractional parts of years when such firefighter may not have 149
been employed by the municipality or special fire control 150
district, subject to the following conditions: 151
(a) A No firefighter may not will receive credit for years 152
or fractional parts of years of service if he or she has 153
withdrawn his or her contributions to the fund for those years 154
or fractional parts of years of service, unless the firefighter 155
repays into the fund the amount he or she has withdrawn, plus 156
interest determined by the board. The member shall have at least 157
90 days after his or her reemployment to make repayment. 158
(b) A firefighter may voluntarily leave his or her 159
contributions in the fund for a period of 5 years after leaving 160
the employ of the fire department, pending the possibility of 161
being rehired by the same department, without losing credit for 162
the time he or she has participated actively as a firefighter. 163
If the firefighter is not reemployed as a firefighter, with the 164
same department, within 5 years, his or her contributions shall 165
be returned without interest. 166
(c) Credited service under this chapter shall be provided 167
only for service as a firefighter, as defined in subsection (8), 168
or for military service and does not include credit for any 169
other type of service. A municipality may, by local ordinance, 170
or a special fire control district may, by resolution, may 171
provide for the purchase of credit for military service prior to 172
employment as well as for prior service as a firefighter for 173
some other employer as long as a firefighter is not entitled to 174
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receive a benefit for such prior service as a firefighter. For 175
purposes of determining credit for prior service as a 176
firefighter, in addition to service as a firefighter in this 177
state, credit may be given for federal, other state, or county 178
service if the prior service is recognized by the Division of 179
State Fire Marshal as provided under chapter 633, or the 180
firefighter provides proof to the board of trustees that his or 181
her service is equivalent to the service required to meet the 182
definition of a firefighter under subsection (12) (8). 183
(8)(5) “Deferred Retirement Option Plan” or “DROP” means a 184
local law plan retirement option in which a firefighter may 185
elect to participate. A firefighter may retire for all purposes 186
of the plan and defer receipt of retirement benefits into a DROP 187
account while continuing employment with his or her employer. 188
However, a firefighter who enters the DROP and who is otherwise 189
eligible to participate may shall not thereby be precluded from 190
participating, or continuing to participate, in a supplemental 191
plan in existence on, or created after, March 12, 1999 the 192
effective date of this act. 193
(9) “Defined contribution plan” means the component of a 194
local law plan to which deposits are made to provide benefits 195
for firefighters, or for firefighters and police officers if 196
both are included, under this chapter. Such component is an 197
element of a local law plan and exists in conjunction with the 198
defined benefit component that meets the base benefits and 199
minimum standards of this chapter. The retirement benefits of 200
the defined contribution plan shall be provided through 201
individual member accounts in accordance with the applicable 202
provisions of the Internal Revenue Code and related regulations 203
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and are limited to the contributions made into each member’s 204
account and the actual accumulated earnings, net of expenses, 205
earned on the member’s account. 206
(10)(6) “Division” means the Division of Retirement of the 207
Department of Management Services. 208
(11)(7) “Enrolled actuary” means an actuary who is enrolled 209
under Subtitle C of Title III of the Employee Retirement Income 210
Security Act of 1974 and who is a member of the Society of 211
Actuaries or the American Academy of Actuaries. 212
(12)(8)(a) “Firefighter” means any person employed solely 213
by a constituted fire department of any municipality or special 214
fire control district who is certified as a firefighter as a 215
condition of employment in accordance with s. 633.35 and whose 216
duty it is to extinguish fires, to protect life, or to protect 217
property. The term includes all certified, supervisory, and 218
command personnel whose duties include, in whole or in part, the 219
supervision, training, guidance, and management responsibilities 220
of full-time firefighters, part-time firefighters, or auxiliary 221
firefighters but does not include part-time firefighters or 222
auxiliary firefighters. However, for purposes of this chapter 223
only, the term also includes public safety officers who are 224
responsible for performing both police and fire services, who 225
are certified as police officers or firefighters, and who are 226
certified by their employers to the Chief Financial Officer as 227
participating in this chapter before October 1, 1979. Effective 228
October 1, 1979, public safety officers who have not been 229
certified as participating in this chapter are considered police 230
officers for retirement purposes and are eligible to participate 231
in chapter 185. Any plan may provide that the fire chief has an 232
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option to participate, or not, in that plan. 233
(b) “Volunteer firefighter” means any person whose name is 234
carried on the active membership roll of a constituted volunteer 235
fire department or a combination of a paid and volunteer fire 236
department of any municipality or special fire control district 237
and whose duty it is to extinguish fires, to protect life, and 238
to protect property. Compensation for services rendered by a 239
volunteer firefighter shall not disqualify him or her as a 240
volunteer. A person shall not be disqualified as a volunteer 241
firefighter solely because he or she has other gainful 242
employment. Any person who volunteers assistance at a fire but 243
is not an active member of a department described herein is not 244
a volunteer firefighter within the meaning of this paragraph. 245
(13)(9) “Firefighters’ Pension Trust Fund” means a trust 246
fund, by whatever name known, as provided under s. 175.041, for 247
the purpose of assisting municipalities and special fire control 248
districts in establishing and maintaining a retirement plan for 249
firefighters. 250
(14)(10) “Local law municipality” is any municipality in 251
which there exists a local law plan exists. 252
(15)(11) “Local law plan” means a retirement defined 253
benefit pension plan, which includes both a defined benefit plan 254
component and a defined contribution plan component, for 255
firefighters, or for firefighters or police officers if both are 256
where included, as described in s. 175.351, established by 257
municipal ordinance, special district resolution, or special act 258
of the Legislature, which enactment sets forth all plan 259
provisions. Local law plan provisions may vary from the 260
provisions of this chapter if the base, provided that required 261
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minimum benefits and minimum standards of this chapter are met. 262
However, any such variance must shall provide a greater benefit 263
for firefighters. Actuarial valuations of local law plans shall 264
be conducted by an enrolled actuary as provided in s. 265
175.261(2). 266
(16)(12) “Local law special fire control district” is any 267
special fire control district in which there exists a local law 268
plan exists. 269
(17) “Long-term funded ratio” or “funded ratio” means the 270
ratio of the actuarial value of assets of the plan to the 271
actuarial accrued liabilities of the plan, as reported in the 272
most recent actuarial valuation of the plan, deemed to be in 273
compliance with chapter 112 by the Department of Management 274
Services. 275
(18)(13) “Property insurance” means property insurance as 276
defined in s. 624.604 and covers real and personal property 277
within the corporate limits of a any municipality, or within the 278
boundaries of a any special fire control district, within the 279
state. “Multiple peril” means a combination or package policy 280
that includes both property and casualty coverage for a single 281
premium. 282
(19)(14) “Retiree” or “retired firefighter” means a 283
firefighter who has entered retirement status. For the purposes 284
of a plan that includes a Deferred Retirement Option Plan 285
(DROP), a firefighter who enters the DROP is shall be considered 286
a retiree for all purposes of the plan. However, a firefighter 287
who enters the DROP and who is otherwise eligible to participate 288
may shall not thereby be precluded from participating, or 289
continuing to participate, in a supplemental plan in existence 290
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on, or created after, March 12, 1999 the effective date of this 291
act. 292
(20)(15) “Retirement” means a firefighter’s separation from 293
city or fire district employment as a firefighter with immediate 294
eligibility for receipt of benefits under the plan. For purposes 295
of a plan that includes a Deferred Retirement Option Plan 296
(DROP), “retirement” means the date a firefighter enters the 297
DROP. 298
(21) “Special benefits” means benefits provided in a 299
defined contribution plan for firefighters. 300
(22)(16) “Special fire control district” means a special 301
district, as defined in s. 189.403(1), established for the 302
purposes of extinguishing fires, protecting life, and protecting 303
property within the incorporated or unincorporated portions of a 304
any county or combination of counties, or within any combination 305
of incorporated and unincorporated portions of a any county or 306
combination of counties. The term does not include any dependent 307
or independent special district, as those terms are defined in 308
s. 189.403(2) and (3), respectively, the employees of which are 309
members of the Florida Retirement System pursuant to s. 310
121.051(1) or (2). 311
(23)(17) “Supplemental plan” means a plan to which deposits 312
are made to provide extra benefits for firefighters, or for 313
firefighters and police officers if both are where included, 314
under this chapter. Such a plan is an element of a local law 315
plan and exists in conjunction with a defined benefit component 316
plan that meets the base minimum benefits and minimum standards 317
of this chapter. 318
(24)(18) “Supplemental plan municipality” means a any local 319
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law municipality in which there existed a supplemental plan 320
existed, of any type or nature, as of December 1, 2000. 321
Section 3. Paragraph (b) of subsection (7) of section 322
175.071, Florida Statutes, is amended to read: 323
175.071 General powers and duties of board of trustees.—For 324
any municipality, special fire control district, chapter plan, 325
local law municipality, local law special fire control district, 326
or local law plan under this chapter: 327
(7) To assist the board in meeting its responsibilities 328
under this chapter, the board, if it so elects, may: 329
(b) Employ an independent enrolled actuary, as defined in 330
s. 175.032(7), at the pension fund’s expense. 331
332
If the board chooses to use the municipality’s or special 333
district’s legal counsel or actuary, or chooses to use any of 334
the municipality’s or special district’s other professional, 335
technical, or other advisers, it must do so only under terms and 336
conditions acceptable to the board. 337
Section 4. Paragraphs (d) through (g) of subsection (1) of 338
section 175.091, Florida Statutes, are amended, and a new 339
paragraph (e) is added to that subsection, to read: 340
175.091 Creation and maintenance of fund.—For any 341
municipality, special fire control district, chapter plan, local 342
law municipality, local law special fire control district, or 343
local law plan under this chapter: 344
(1) The firefighters’ pension trust fund in each 345
municipality and in each special fire control district shall be 346
created and maintained in the following manner: 347
(d) By mandatory payment by the municipality or special 348
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fire control district of a sum equal to the normal cost of and 349
the amount required to fund any actuarial deficiency shown by an 350
actuarial valuation as provided in part VII of chapter 112 after 351
taking into account the amounts described in paragraphs (b), 352
(c), (f), (g), and (h) and the amounts of the tax proceeds 353
described in paragraph (a) that must be used to fund defined 354
benefit plan benefits, except as otherwise excluded from 355
consideration in determining the mandatory payment. 356
(e) For local law plans, and in addition to the mandatory 357
payment described in paragraph (d), by mandatory payment by the 358
municipality or special fire control district of the amount 359
specified in s. 175.351(3) if the long-term funded ratio of the 360
plan is less than 80 percent. 361
(f)(e) By all gifts, bequests, and devises when donated to 362
the fund. 363
(g)(f) By all accretions to the fund by way of interest or 364
dividends on bank deposits, or otherwise. 365
(h)(g) By all other sources or income now or hereafter 366
authorized by law for the augmentation of such firefighters’ 367
pension trust fund. 368
369
Nothing in this section shall be construed to require adjustment 370
of member contribution rates in effect on the date this act 371
becomes a law, including rates that exceed 5 percent of salary, 372
provided that such rates are at least one-half of 1 percent of 373
salary. 374
Section 5. Section 175.351, Florida Statutes, is amended to 375
read: 376
175.351 Municipalities and special fire control districts 377
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having their own pension plans for firefighters.—For any 378
municipality, special fire control district, local law 379
municipality, local law special fire control district, or local 380
law plan under this chapter, In order for a municipality or 381
municipalities and special fire control district that has its 382
districts with their own pension plan plans for firefighters, or 383
for firefighters and police officers if both are included, to 384
participate in the distribution of the tax fund established 385
under pursuant to s. 175.101, a local law plan and its plan 386
sponsor plans must meet the base minimum benefits and minimum 387
standards set forth in this chapter. 388
(1) If a municipality has a pension plan for firefighters, 389
or a pension plan for firefighters and police officers if both 390
are included, which in the opinion of the division meets the 391
base minimum benefits and minimum standards set forth in this 392
chapter, the board of trustees of the pension plan, as approved 393
by a majority of firefighters of the municipality, must may: 394
(a) place the income from the premium tax in s. 175.101 in 395
such pension plan for the sole and exclusive use of its 396
firefighters, or for firefighters and police officers if both 397
are included, where it shall become an integral part of that 398
pension plan and shall be used to fund benefits for firefighters 399
as follows: 400
(a) The base premium tax revenues must be used to fund base 401
benefits. 402
(b) Of the premium tax revenues received that are in excess 403
of the amount received for the 2012 calendar year, and any 404
accumulations of additional premium tax revenues that have not 405
been applied to fund extra benefits: 406
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1. If the plan has a long-term funded ratio of less than 80 407
percent: 408
a. Fifty percent must be used as additional contributions 409
to pay the plan’s actuarial deficiency and may not be considered 410
in the determination of the mandatory payment described in s. 411
175.091(1)(d); 412
b. Twenty-five percent must be used to fund base benefits; 413
and 414
c. Twenty-five percent must be placed in a defined 415
contribution plan to fund special benefits. 416
2. If the plan has a long-term funded ratio of 80 percent 417
or greater: 418
a. Fifty percent must be used to fund base benefits; and 419
b. Fifty percent must be placed in a defined contribution 420
plan to fund special benefits. 421
(c) Additional premium tax revenues not described in 422
paragraph (b) must be used to fund benefits that were not 423
included in the base benefits to pay extra benefits to the 424
firefighters included in that pension plan; or 425
(b) Place the income from the premium tax in s. 175.101 in 426
a separate supplemental plan to pay extra benefits to 427
firefighters, or to firefighters and police officers if 428
included, participating in such separate supplemental plan. 429
(2) Insurance premium tax revenues may not be used to fund 430
benefits provided in a defined benefit plan which were not 431
provided by the plan as of March 1, 2013. 432
(3) If a plan offers benefits in excess of its base 433
benefits, such benefits may be reduced if the plan continues to 434
meet the base benefits of the plan and the minimum standards set 435
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forth in this chapter. The amount of insurance premium tax 436
revenues previously used to fund benefits in excess of the 437
plan’s base benefits before the reduction must be used as 438
provided in subsection (1)(b). Twenty-five percent of the amount 439
of any mandatory contribution paid by the municipality or 440
special fire control district which was previously used to fund 441
extra benefits before the reduction must be used as additional 442
contributions as specified in s. 175.091 to fund the plan’s 443
actuarial deficiency. 444
(4)(2) The premium tax provided by this chapter shall in 445
all cases be used in its entirety to provide retirement extra 446
benefits to firefighters, or to firefighters and police officers 447
if both are included. However, local law plans in effect on 448
October 1, 1998, must comply with the minimum benefit provisions 449
of this chapter only to the extent that additional premium tax 450
revenues become available to incrementally fund the cost of such 451
compliance as provided in s. 175.162(2)(a). If a plan is in 452
compliance with such minimum benefit provisions, as subsequent 453
additional premium tax revenues become available, they must be 454
used to provide extra benefits. Local law plans created by 455
special act before May 27, 1939, are deemed to comply with this 456
chapter. For the purpose of this chapter, the term: 457
(a) “Additional premium tax revenues” means revenues 458
received by a municipality or special fire control district 459
pursuant to s. 175.121 which exceed that amount received for 460
calendar year 1997. 461
(b) “Extra benefits” means benefits in addition to or 462
greater than those provided to general employees of the 463
municipality and in addition to those in existence for 464
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firefighters on March 12, 1999. 465
(5)(3) A retirement plan or amendment to a retirement plan 466
may not be proposed for adoption unless the proposed plan or 467
amendment contains an actuarial estimate of the costs involved. 468
Such proposed plan or proposed plan change may not be adopted 469
without the approval of the municipality, special fire control 470
district, or, where permitted, the Legislature. Copies of the 471
proposed plan or proposed plan change and the actuarial impact 472
statement of the proposed plan or proposed plan change shall be 473
furnished to the division before the last public hearing 474
thereon. Such statement must also indicate whether the proposed 475
plan or proposed plan change is in compliance with s. 14, Art. X 476
of the State Constitution and those provisions of part VII of 477
chapter 112 which are not expressly provided in this chapter. 478
Notwithstanding any other provision, only those local law plans 479
created by special act of legislation before May 27, 1939, are 480
deemed to meet the base minimum benefits and minimum standards 481
only in this chapter. 482
(6)(4) Notwithstanding any other provision, with respect to 483
any supplemental plan municipality: 484
(a) A local law plan and a supplemental plan may continue 485
to use their definition of compensation or salary in existence 486
on March 12, 1999. 487
(b) Section 175.061(1)(b) does not apply, and a local law 488
plan and a supplemental plan shall continue to be administered 489
by a board or boards of trustees numbered, constituted, and 490
selected as the board or boards were numbered, constituted, and 491
selected on December 1, 2000. 492
(c) The election set forth in paragraph (1)(b) is deemed to 493
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have been made. 494
(7)(5) The retirement plan setting forth the benefits and 495
the trust agreement, if any, covering the duties and 496
responsibilities of the trustees and the regulations of the 497
investment of funds must be in writing, and copies made 498
available to the participants and to the general public. 499
(8) In addition to the defined benefit component of the 500
local law plan, each plan sponsor must have a defined 501
contribution plan component within the local law plan by October 502
1, 2013, or upon the creation date of a new participating plan. 503
However, the plan sponsor of any plan established by special act 504
of the Legislature has until July 1, 2014, to create a defined 505
contribution component within the plan. 506
Section 6. Subsection (2) of section 185.01, Florida 507
Statutes, is amended to read: 508
185.01 Legislative declaration.— 509
(2) This chapter hereby establishes, for all municipal 510
pension plans now or hereinafter provided for under this 511
chapter, including chapter plans and local law plans, base 512
minimum benefits and minimum standards for the operation and 513
funding of such plans, which must be met as a condition 514
precedent to the plan or plan sponsor receiving a distribution 515
of insurance premium tax revenues under s. 185.10 hereinafter 516
referred to as municipal police officers’ retirement trust 517
funds. The base minimum benefits and minimum standards for each 518
plan as set forth in this chapter may not be diminished by local 519
ordinance or by special act of the Legislature, or nor may the 520
minimum benefits or minimum standards be reduced or offset by 521
any other local, state, or federal plan that may include police 522
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officers in its operation, except as provided under s. 112.65. 523
Section 7. Section 185.02, Florida Statutes, is amended to 524
read: 525
185.02 Definitions.—For any municipality, chapter plan, 526
local law municipality, or local law plan under this chapter, 527
the term following words and phrases as used in this chapter 528
shall have the following meanings, unless a different meaning is 529
plainly required by the context: 530
(1) “Additional premium tax revenues” means revenues 531
received by a municipality pursuant to s. 185.10 which exceed 532
base premium tax revenues. 533
(2)(1) “Average final compensation” means one-twelfth of 534
the average annual compensation of the 5 best years of the last 535
10 years of creditable service prior to retirement, termination, 536
or death. 537
(3) “Base benefits” means the level of benefits in 538
existence for police officers on March 12, 1999. 539
(4) “Base premium tax revenues” means revenues received by 540
a municipality pursuant to s. 185.10 equal to the amount of such 541
revenues received for calendar year 1997. 542
(5)(2) “Casualty insurance” means automobile public 543
liability and property damage insurance to be applied at the 544
place of residence of the owner, or if the subject is a 545
commercial vehicle, to be applied at the place of business of 546
the owner; automobile collision insurance; fidelity bonds; 547
burglary and theft insurance; and plate glass insurance. 548
“Multiple peril” means a combination or package policy that 549
includes both property coverage and casualty coverage for a 550
single premium. 551
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(6)(3) “Chapter plan” means a separate defined benefit 552
pension plan for police officers which incorporates by reference 553
the provisions of this chapter and has been adopted by the 554
governing body of a municipality as provided in s. 185.08. 555
Except as may be specifically authorized in this chapter, the 556
provisions of a chapter plan may not differ from the plan 557
provisions set forth in ss. 185.01-185.341 and 185.37-185.39. 558
Actuarial valuations of chapter plans shall be conducted by the 559
division as provided by s. 185.221(1)(b). 560
(7)(4) “Compensation” or “salary” means, for 561
noncollectively bargained service earned before July 1, 2011, or 562
for service earned under collective bargaining agreements in 563
place before July 1, 2011, the total cash remuneration including 564
“overtime” paid by the primary employer to a police officer for 565
services rendered, but not including any payments for extra duty 566
or special detail work performed on behalf of a second party 567
employer. A local law plan may limit the amount of overtime 568
payments which can be used for retirement benefit calculation 569
purposes; however, such overtime limit may not be less than 300 570
hours per officer per calendar year. For noncollectively 571
bargained service earned on or after July 1, 2011, or for 572
service earned under collective bargaining agreements entered 573
into on or after July 1, 2011, the term has the same meaning 574
except that when calculating retirement benefits, up to 300 575
hours per year in overtime compensation may be included as 576
specified in the plan or collective bargaining agreement, but 577
payments for accrued unused sick or annual leave may not be 578
included. 579
(a) Any retirement trust fund or plan that meets the 580
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requirements of this chapter does not, solely by virtue of this 581
subsection, reduce or diminish the monthly retirement income 582
otherwise payable to each police officer covered by the 583
retirement trust fund or plan. 584
(b) The member’s compensation or salary contributed as 585
employee-elective salary reductions or deferrals to any salary 586
reduction, deferred compensation, or tax-sheltered annuity 587
program authorized under the Internal Revenue Code shall be 588
deemed to be the compensation or salary the member would receive 589
if he or she were not participating in such program and shall be 590
treated as compensation for retirement purposes under this 591
chapter. 592
(c) For any person who first becomes a member in any plan 593
year beginning on or after January 1, 1996, compensation for 594
that plan year may not include any amounts in excess of the 595
Internal Revenue Code s. 401(a)(17) limitation, as amended by 596
the Omnibus Budget Reconciliation Act of 1993, which limitation 597
of $150,000 shall be adjusted as required by federal law for 598
qualified government plans and shall be further adjusted for 599
changes in the cost of living in the manner provided by Internal 600
Revenue Code s. 401(a)(17)(B). For any person who first became a 601
member before the first plan year beginning on or after January 602
1, 1996, the limitation on compensation may not be less than the 603
maximum compensation amount that was allowed to be taken into 604
account under the plan as in effect on July 1, 1993, which 605
limitation shall be adjusted for changes in the cost of living 606
since 1989 in the manner provided by Internal Revenue Code s. 607
401(a)(17)(1991). 608
(8)(5) “Creditable service” or “credited service” means the 609
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aggregate number of years of service and fractional parts of 610
years of service of any police officer, omitting intervening 611
years and fractional parts of years when such police officer may 612
not have been employed by the municipality subject to the 613
following conditions: 614
(a) A No police officer may not will receive credit for 615
years or fractional parts of years of service if he or she has 616
withdrawn his or her contributions to the fund for those years 617
or fractional parts of years of service, unless the police 618
officer repays into the fund the amount he or she has withdrawn, 619
plus interest as determined by the board. The member shall have 620
at least 90 days after his or her reemployment to make 621
repayment. 622
(b) A police officer may voluntarily leave his or her 623
contributions in the fund for a period of 5 years after leaving 624
the employ of the police department, pending the possibility of 625
his or her being rehired by the same department, without losing 626
credit for the time he or she has participated actively as a 627
police officer. If he or she is not reemployed as a police 628
officer with the same department within 5 years, his or her 629
contributions shall be returned to him or her without interest. 630
(c) Credited service under this chapter shall be provided 631
only for service as a police officer, as defined in subsection 632
(11), or for military service and may not include credit for any 633
other type of service. A municipality may, by local ordinance, 634
may provide for the purchase of credit for military service 635
occurring before employment as well as prior service as a police 636
officer for some other employer as long as the police officer is 637
not entitled to receive a benefit for such other prior service 638
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as a police officer. For purposes of determining credit for 639
prior service, in addition to service as a police officer in 640
this state, credit may be given for federal, other state, or 641
county service as long as such service is recognized by the 642
Criminal Justice Standards and Training Commission within the 643
Department of Law Enforcement as provided under chapter 943 or 644
the police officer provides proof to the board of trustees that 645
such service is equivalent to the service required to meet the 646
definition of a police officer under subsection (16) (11). 647
(d) In determining the creditable service of a any police 648
officer, credit for up to 5 years of the time spent in the 649
military service of the Armed Forces of the United States shall 650
be added to the years of actual service, if: 651
1. The police officer is in the active employ of the 652
municipality before prior to such service and leaves a position, 653
other than a temporary position, for the purpose of voluntary or 654
involuntary service in the Armed Forces of the United States. 655
2. The police officer is entitled to reemployment under the 656
provisions of the Uniformed Services Employment and Reemployment 657
Rights Act. 658
3. The police officer returns to his or her employment as a 659
police officer of the municipality within 1 year after from the 660
date of his or her release from such active service. 661
(9)(6) “Deferred Retirement Option Plan” or “DROP” means a 662
local law plan retirement option in which a police officer may 663
elect to participate. A police officer may retire for all 664
purposes of the plan and defer receipt of retirement benefits 665
into a DROP account while continuing employment with his or her 666
employer. However, a police officer who enters the DROP and who 667
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is otherwise eligible to participate may shall not thereby be 668
precluded from participating, or continuing to participate, in a 669
supplemental plan in existence on, or created after, March 12, 670
1999 the effective date of this act. 671
(10) “Defined contribution plan” means the component of a 672
local law plan to which deposits are made to provide benefits 673
for police officers, or for police officers and firefighters if 674
both are included. Such component is an element of a local law 675
plan and exists in conjunction with the defined benefit 676
component that meets the base benefits and minimum standards of 677
this chapter. The retirement benefits of the defined 678
contribution plan shall be provided through individual member 679
accounts, in accordance with the applicable provisions of the 680
Internal Revenue Code and related regulations, and are limited 681
to the contributions made into each member’s account and the 682
actual accumulated earnings, net of expenses, earned on the 683
member’s account. 684
(11)(7) “Division” means the Division of Retirement of the 685
Department of Management Services. 686
(12)(8) “Enrolled actuary” means an actuary who is enrolled 687
under Subtitle C of Title III of the Employee Retirement Income 688
Security Act of 1974 and who is a member of the Society of 689
Actuaries or the American Academy of Actuaries. 690
(13)(9) “Local law municipality” is any municipality in 691
which there exists a local law plan exists. 692
(14)(10) “Local law plan” means a retirement defined 693
benefit pension plan, which includes both a defined benefit plan 694
component and a defined contribution plan component, for police 695
officers, or for police officers and firefighters if both are, 696
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where included, as described in s. 185.35, established by 697
municipal ordinance or special act of the Legislature, which 698
enactment sets forth all plan provisions. Local law plan 699
provisions may vary from the provisions of this chapter if the 700
base, provided that required minimum benefits and minimum 701
standards of this chapter are met. However, any such variance 702
must shall provide a greater benefit for police officers. 703
Actuarial valuations of local law plans shall be conducted by an 704
enrolled actuary as provided in s. 185.221(2)(b). 705
(15) “Long-term funded ratio” or “funded ratio” means the 706
ratio of the actuarial value of assets of the plan to the 707
actuarial accrued liabilities of the plan, as reported in the 708
most recent actuarial valuation of the plan, deemed to be in 709
compliance with chapter 112 by the Department of Management 710
Services. 711
(16)(11) “Police officer” means any person who is elected, 712
appointed, or employed full time by a any municipality, who is 713
certified or required to be certified as a law enforcement 714
officer in compliance with s. 943.1395, who is vested with 715
authority to bear arms and make arrests, and whose primary 716
responsibility is the prevention and detection of crime or the 717
enforcement of the penal, criminal, traffic, or highway laws of 718
the state. The term This definition includes all certified 719
supervisory and command personnel whose duties include, in whole 720
or in part, the supervision, training, guidance, and management 721
responsibilities of full-time law enforcement officers, part-722
time law enforcement officers, or auxiliary law enforcement 723
officers, but does not include part-time law enforcement 724
officers or auxiliary law enforcement officers as those terms 725
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the same are defined in s. 943.10(6) and (8), respectively. For 726
the purposes of this chapter only, the term also includes 727
“police officer” also shall include a public safety officer who 728
is responsible for performing both police and fire services. Any 729
plan may provide that the police chief shall have the an option 730
to participate, or not, in that plan. 731
(17)(12) “Police Officers’ Retirement Trust Fund” means a 732
trust fund, by whatever name known, as provided under s. 185.03 733
for the purpose of assisting municipalities in establishing and 734
maintaining a retirement plan for police officers. 735
(18)(13) “Retiree” or “retired police officer” means a 736
police officer who has entered retirement status. For the 737
purposes of a plan that includes a Deferred Retirement Option 738
Plan (DROP), a police officer who enters the DROP is shall be 739
considered a retiree for all purposes of the plan. However, a 740
police officer who enters the DROP and who is otherwise eligible 741
to participate may shall not thereby be precluded from 742
participating, or continuing to participate, in a supplemental 743
plan in existence on, or created after, March 12, 1999 the 744
effective date of this act. 745
(19)(14) “Retirement” means a police officer’s separation 746
from city employment as a police officer with immediate 747
eligibility for receipt of benefits under the plan. For purposes 748
of a plan that includes a Deferred Retirement Option Plan 749
(DROP), “retirement” means the date a police officer enters the 750
DROP. 751
(20) “Special benefits” means benefits provided in a 752
defined contribution plan for police officers. 753
(21)(15) “Supplemental plan” means a plan to which deposits 754
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of the premium tax moneys as provided in s. 185.08 are made to 755
provide extra benefits to police officers, or police officers 756
and firefighters if both are where included, under this chapter. 757
Such a plan is an element of a local law plan and exists in 758
conjunction with a defined benefit component plan that meets the 759
base minimum benefits and minimum standards of this chapter. 760
(22)(16) “Supplemental plan municipality” means any local 761
law municipality in which there existed a supplemental plan 762
existed as of December 1, 2000. 763
Section 8. Paragraph (b) of subsection (6) of section 764
185.06, Florida Statutes, is amended to read: 765
185.06 General powers and duties of board of trustees.—For 766
any municipality, chapter plan, local law municipality, or local 767
law plan under this chapter: 768
(6) To assist the board in meeting its responsibilities 769
under this chapter, the board, if it so elects, may: 770
(b) Employ an independent enrolled actuary, as defined in 771
s. 185.02(8), at the pension fund’s expense. 772
773
If the board chooses to use the municipality’s or special 774
district’s legal counsel or actuary, or chooses to use any of 775
the municipality’s other professional, technical, or other 776
advisers, it must do so only under terms and conditions 777
acceptable to the board. 778
Section 9. Paragraphs (d) through (g) of subsection (1) of 779
section 185.07, Florida Statutes, are amended, and a new 780
paragraph (e) is added to that subsection, to read: 781
185.07 Creation and maintenance of fund.—For any 782
municipality, chapter plan, local law municipality, or local law 783
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plan under this chapter: 784
(1) The municipal police officers’ retirement trust fund in 785
each municipality described in s. 185.03 shall be created and 786
maintained in the following manner: 787
(d) By payment by the municipality or other sources of a 788
sum equal to the normal cost and the amount required to fund any 789
actuarial deficiency shown by an actuarial valuation as provided 790
in part VII of chapter 112, after taking into account the 791
amounts described in paragraphs (b), (c), (f), (g), and (h) and 792
the amounts of the tax proceeds described in paragraph (a) that 793
must be used to fund defined benefit plan benefits, except as 794
otherwise excluded from consideration in determining the 795
mandatory payment. 796
(e) For local law plans, and in addition to the mandatory 797
payment described in paragraph (d), by mandatory payment by the 798
municipality of the amount specified in s. 185.35(3) if the 799
long-term funded ratio of the plan is less than 80 percent. 800
(f)(e) By all gifts, bequests and devises when donated to 801
the fund. 802
(g)(f) By all accretions to the fund by way of interest or 803
dividends on bank deposits or otherwise. 804
(h)(g) By all other sources of income now or hereafter 805
authorized by law for the augmentation of such municipal police 806
officers’ retirement trust fund. 807
808
Nothing in this section shall be construed to require adjustment 809
of member contribution rates in effect on the date this act 810
becomes a law, including rates that exceed 5 percent of salary, 811
provided that such rates are at least one-half of 1 percent of 812
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salary. 813
Section 10. Section 185.35, Florida Statutes, is amended to 814
read: 815
185.35 Municipalities having their own pension plans for 816
police officers.—For any municipality, chapter plan, local law 817
municipality, or local law plan under this chapter, In order for 818
a municipality municipalities with its their own retirement plan 819
pension plans for police officers, or for police officers and 820
firefighters if both are included, to participate in the 821
distribution of the tax fund established under pursuant to s. 822
185.08, a local law plan and its plan sponsor plans must meet 823
the base minimum benefits and minimum standards set forth in 824
this chapter: 825
(1) If a municipality has a retirement pension plan for 826
police officers, or for police officers and firefighters if both 827
are included, which, in the opinion of the division, meets the 828
base minimum benefits and minimum standards set forth in this 829
chapter, the board of trustees of the pension plan, as approved 830
by a majority of police officers of the municipality, must may: 831
(a) place the income from the premium tax in s. 185.08 in 832
such pension plan for the sole and exclusive use of its police 833
officers, or its police officers and firefighters if included, 834
where it shall become an integral part of that pension plan and 835
shall be used to fund benefits for police officers as follows: 836
(a) The base premium tax revenues must be used to fund base 837
benefits. 838
(b) Of the premium tax revenues received that are in excess 839
of the amount received for the 2012 calendar year, and any 840
accumulations of additional premium tax revenues that have not 841
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been applied to fund extra benefits: 842
1. If the plan has a long-term funded ratio of less than 80 843
percent: 844
a. Fifty percent must be used as additional contributions 845
to pay the plan’s actuarial deficiency and may not be considered 846
in the determination of the mandatory payment described in s. 847
185.07(1)(d); 848
b. Twenty-five percent must be used to fund base benefits; 849
and 850
c. Twenty-five percent must be placed in a defined 851
contribution plan to fund special benefits. 852
2. If the plan has a long-term funded ratio of 80 percent 853
or greater: 854
a. Fifty percent must be used to fund base benefits; and 855
b. Fifty percent must be placed in a defined contribution 856
plan to fund special benefits. 857
(c) Additional premium tax revenues not described in 858
paragraph (b) must be used to fund benefits that were not 859
included in the base benefits pay extra benefits to the police 860
officers included in that pension plan; or 861
(b) May place the income from the premium tax in s. 185.08 862
in a separate supplemental plan to pay extra benefits to the 863
police officers, or police officers and firefighters if 864
included, participating in such separate supplemental plan. 865
(2) Insurance premium tax revenues may not be used to fund 866
benefits provided in a defined benefit plan which were not 867
provided by the plan as of March 1, 2013. 868
(3) If a plan offers benefits in excess of its base 869
benefits, such benefits may be reduced if the plan continues to 870
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meet the base benefits of the plan and the minimum standards set 871
forth in this chapter. The amount of insurance premium tax 872
revenues previously used to fund benefits in excess of the 873
plan’s base benefits before the reduction must be used as 874
provided in subsection (1)(b). Twenty-five percent of the amount 875
of any mandatory contribution paid by the municipality or 876
special fire control district which was previously used to fund 877
extra benefits before the reduction must be used as additional 878
contributions as specified in s. 185.07 to fund the plan’s 879
actuarial deficiency. 880
(4)(2) The premium tax provided by this chapter shall in 881
all cases be used in its entirety to provide retirement extra 882
benefits to police officers, or to police officers and 883
firefighters if both are included. However, local law plans in 884
effect on October 1, 1998, must comply with the minimum benefit 885
provisions of this chapter only to the extent that additional 886
premium tax revenues become available to incrementally fund the 887
cost of such compliance as provided in s. 185.16(2). If a plan 888
is in compliance with such minimum benefit provisions, as 889
subsequent additional tax revenues become available, they shall 890
be used to provide extra benefits. Local law plans created by 891
special act before May 27, 1939, shall be deemed to comply with 892
this chapter. For the purpose of this chapter, the term: 893
(a) “Additional premium tax revenues” means revenues 894
received by a municipality pursuant to s. 185.10 which exceed 895
the amount received for calendar year 1997. 896
(b) “Extra benefits” means benefits in addition to or 897
greater than those provided to general employees of the 898
municipality and in addition to those in existence for police 899
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officers on March 12, 1999. 900
(5)(3) A retirement plan or amendment to a retirement plan 901
may not be proposed for adoption unless the proposed plan or 902
amendment contains an actuarial estimate of the costs involved. 903
Such proposed plan or proposed plan change may not be adopted 904
without the approval of the municipality or, where permitted, 905
the Legislature. Copies of the proposed plan or proposed plan 906
change and the actuarial impact statement of the proposed plan 907
or proposed plan change shall be furnished to the division 908
before the last public hearing thereon. Such statement must also 909
indicate whether the proposed plan or proposed plan change is in 910
compliance with s. 14, Art. X of the State Constitution and 911
those provisions of part VII of chapter 112 which are not 912
expressly provided in this chapter. Notwithstanding any other 913
provision, only those local law plans created by special act of 914
legislation before May 27, 1939, are deemed to meet the base 915
minimum benefits and minimum standards only in this chapter. 916
(6)(4) Notwithstanding any other provision, with respect to 917
any supplemental plan municipality: 918
(a) Section 185.02(7)(a) 185.02(4)(a) does not apply, and a 919
local law plan and a supplemental plan may continue to use their 920
definition of compensation or salary in existence on March 12, 921
1999. 922
(b) A local law plan and a supplemental plan must continue 923
to be administered by a board or boards of trustees numbered, 924
constituted, and selected as the board or boards were numbered, 925
constituted, and selected on December 1, 2000. 926
(c) The election set forth in paragraph (1)(b) is deemed to 927
have been made. 928
Florida Senate - 2013 CS for SB 458
585-01746-13 2013458c1
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CODING: Words stricken are deletions; words underlined are additions.
(7)(5) The retirement plan setting forth the benefits and 929
the trust agreement, if any, covering the duties and 930
responsibilities of the trustees and the regulations of the 931
investment of funds must be in writing and copies made available 932
to the participants and to the general public. 933
(8) In addition to the defined benefit component of the 934
local law plan, each plan sponsor must have a defined 935
contribution plan component within the local law plan by October 936
1, 2013, or upon the creation date of a new participating plan. 937
However, the plan sponsor of any plan established by special act 938
of the Legislature has until July 1, 2014, to create a defined 939
contribution component within the plan. 940
Section 11. The Legislature finds that a proper and 941
legitimate state purpose is served when employees and retirees 942
of the state and its political subdivisions, and the dependents, 943
survivors, and beneficiaries of such employees and retirees, are 944
extended the basic protections afforded by governmental 945
retirement systems that provide fair and adequate benefits and 946
that are managed, administered, and funded in an actuarially 947
sound manner as required by s. 14, Article X of the State 948
Constitution and part VII of chapter 112, Florida Statutes. 949
Therefore, the Legislature determines and declares that this act 950
fulfills an important state interest. 951
Section 12. This act shall take effect July 1, 2013. 952