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ATTORNEYS AT LAW
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JOHN CORBETT TELEPHONE (561) 586-71 I6
TRELA ]. WHTTE TELECOP]ER (561} 586-961 I
BRADLEY W. BIGGS*^
KETI'H W. DAV[S*^ * State Certified County and Circuit Cautt Mediator
R MAX LOHMAN•+ •* Certified County Court Mediator
MICHAEL B. STEINBAUM ^ Board Certified in City, County and Local Government Law
MEMORANDUM
TO: Michael Couzzo, Village Manager
FROM: Trela J. White, Esq.
DATE: October 9, 2008
RE: Village Pension Plans; Clarification of Duties and Responsibilities
With regard to a request to clarify the duties and responsibilities of the Village's Pension
Boards, the Village Council and the Village Manager for both the general employees' and the
public safety officers' pension trust funds, I offer the following:
1. Sec. 2-61 of the Village Code creates both the general employees' and the public safety
officers' pension trust funds. Both aze "defined benefit" plans which provide for a retirement
benefit in a guaranteed amount. These trust funds have been amended from time to time, by
ordinance of the Village Council, and exist in their ewrent form as Exhibits A and B to the latest
amending ordinance. Each of the pension trust funds provides for the creation of a pension
board and the duties and responsibilities of those boazds.
2. For purposes of the issue addressed by this Memorandum, the duties of both the general
employees' and the public safety officers' pension boards aze essentially identical. Those duties
and responsibilities are set out in detail in each pension trust fund and are outlined as follows:
a. The "sole and exclusive" responsibility to administer and operate the retirement
system rests with the hoard of trustees;
b. It is also the board of trustees' responsibility to construe the provisions of their
respective pension plans and determine alI questions arising thereunder. In other
words, they have the responsibility to interpret the terms and provisions of the
trust funds;
c. Further, the pension boards determine all questions regarding member
participation and eligibility in their respective pension plans;
d. The pension boards also determine and distribute the appropriate benefits to all
members of the funds;
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e. The actual custody and supervision of the trust funds are vested with the
respective board of trustees (subject to the Village Council's ability to
amend/terminate the trust). As such, the boards are charged with the fiduciary
responsibility of investing and re-investing all fund assets;
f. The pension boards must adopt and abide by an investment policy which guides
and directs the investing and re-investing of fund assets consistent with the
pazameters set forth in the ordinance adopted by the Village Council, which must
also be consistent with state law.
3. The funds and securities of the respective pension plan maybe deposited by the Board of
Trustees with the Treasurer of the municipality who acts only in a ministerial capacity. The
pension moneys are to be kept in a separate fund by the municipality or may be deposited by the
Boazd in a qualified public depository as defined at Sec. 280.02, F.S.
4. The Village Council also has certain duties and responsibilities relative to the Village's
two pension trust funds. Fundamentally, in accordance with constitutional and statutory "home
rule" authority, the Village Council has the power to conduct municipal government, perform
municipal functions and render municipal services. This includes the power to create, amend
and/or terminate pension trust funds for all Village employees. As noted above, the Village
Council has provided for the creation of pension trust funds as codified at Sec. 2-61 of the
Village Code. The Village Council may likewise amend or terminate these trust funds.
5. If the pension plans are terminated by the Village Council, such termination must be
accomplished in accordance with the terms of the plan document, itself and in accordance with
applicable state law as certain vested rights maybe implicated.
6. It must be noted, however, that in accordance with the terms of the pension trust funds,
the power of the Village Council to amend/terminate may not result in the use of fund assets for
anything other than payment of regular expenses and benefits.
7. The Village Council is also obligated to fund any pension fund actuarial deficiency on a
quarterly basis, so long as the pension funds exist since they are defined benefit plans. The
Village is responsible for any shortfalls, whatsoever, whether due to underfunding, a drop in the
market or actuarial miscalculations.
8. Neither the ordinances that create the current pension trust funds, nor the trust fund plans
themselves, give duties or responsibilities to the Village Manager, nor do they contemplate any
direct involvement by the Village Manager in the creation, modification or operation of the
pension trust funds.
9. Should you require further information regarding these matters, please advise.
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