HomeMy WebLinkAboutDocumentation_Pension Public Safety_Tab 09_11/03/2008Final 2008 Public Safety Summary Plan
Description
November 3, 2008
Public Safety Agenda
Village of Tequesta
Public Safety Officers' Pension Fund
Summary Plan Description
August 2008
Introduction
As a Member in the Village of Tequesta Public Safety Officers' Pension Fund, you
are included in a program of benefits to help you meet your financial needs in retirement,
or in the event of disability or death. The purpose of this booklet is to give you a brief
description of benefits available to you under your pension plan.
Planning for retirement begins now. This booklet can be a valuable tool in preparing
for your retirement and financial future. If you need any further information on any of the
topics presented in this booklet, please contact the Pension Coordinator, Lori McWilliams
or the Board of Trustees. They will answer any questions to help you better understand
your benefits.
The information presented is a summary of the pension plan as provided in the
Village of Tequesta Ordinance No. 598 which governs your Pension Fund. A copy of
Ordinance No. 598, Exhibit B (June 9, 2005) is available from the Village Clerk. Any
discrepancies between information in this booklet and the Plan will be governed by the
Plan. A copy of the Plan can be obtained from the Pension Coordinator, Lori McWilliams.
Her address is:
Village of Tequesta
Post Office Box 3273
Tequesta, Florida 33469-0273
Telephone (561)575-6200
FAX Number (561)575-6203
Board of Trustees
Village of Tequesta
Public Safety Officers' Pension Fund
Ken Nielson, Chairman
Ray Giblin, Secretary
David Cooper
Ed Sabin
Robert Young
TABLE OF CONTENTS
DEFINITIONS ................................... ..................... 1
PARTICIPATION IN THE PENSION FUND ............ ..................... 2
ELIGIBILITY FOR NORMAL RETIREMENT ........... ..................... 2
AMOUNT OF A NORMAL RETIREMENT PENSION ..... ..................... 2
Sample Calculation ......................... ..................... 3
EARLY RETIREMENT PENSION ................... ..................... 4
FORMS OF PAYMENT OF A PENSION .............. ..................... 4
Normal Form .............................. ............ ........ 4
Optional Forms of Payment ................... ..................... 5
SURVIVOR BENEFITS -DEATH BEFORE RETIREMENT ..................... 6
Duty Related Deaths ........................ ...............:..... 6
Deaths ................................... ..................... 6
DISABILITY RETIREMENT ........................ ..................... 7
Duty Disability Retirement .................... ..................... 7
Non-Duty Disability Retirement ................ ..................... 7
MONTHLY SUPPLEMENTAL BENEFITS ............. ..................... 8
DEFERRED RETIREMENT OPTION PLAN (DROP) ..... ..................... 8
ENDING EMPLOYMENT BEFORE RETIREMENT ...... ..................... 8
FILING FOR RETIREMENT ........................ ..................... 9
TRUSTEE TO TRUSTEE TRANSFER ................ ..................... 9
COST OF THE PENSION FUND .................... ..................... 9
FORFEITURE OF PENSION ....................... .................... 10
CLAIMS PROCEDURES .......................... .................... 11
ADMINISTRATION OF THE PENSION FUND .............................. 11
INVESTMENTS ................................ ..................... 12
ACTUARIAL SOUNDNESS ....................... ..................... 12
AGENT FOR SERVICE OF LEGAL PROCESS ............................. 12
PLAN YEAR ........................................................ 12
ACTUARIAL DATA ................................................... 13
INCOME AND DISBURSEMENTS ....................................... 14
DEFINITIONS
Accumulated Contributions - a Member's own contributions without interest.
Average Final Compensation -one-twelfth of the average salary paid during the
best five years of the last ten years of employment.
Beneficiary - an individual, such as a spouse, child or dependent parent, who is
receiving a survivor benefit from the Pension Fund following the death of a Member.
Board -the Board of Trustees which administers, manages and operates the
Pension Fund.
Credited Service - A Member's years and fractional parts of years of service as
a Firefighter or Police Officer in the Village of Tequesta, which may include
military time purchased in this plan.
Member - a Village of Tequesta Firefighter or Police Officer participating in the
Pension Fund.
Salary -total cash remuneration paid to a Firefighter or Police Officer for
services rendered.
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PARTICIPATION IN THE PENSION FUND
Each Firefighter or Police Officer employed in the Village of Tequesta Public
Safety Officers' Department is a Pension Fund Member. A Firefighter or Police
Officer is an employee who works full time for the Village.
ELIGIBILITY FOR NORMAL RETIREMENT
A Member who is age 55 with 6 or more years of credited service or age 52 with
25 or more years of credited service is eligible for normal retirement. An
application for normal retirement must be filed with the Fund Administrator and
approved by the Board of Trustees.
AMOUNT OF A NORMAL RETIREMENT PENSION
The amount of a normal retirement pension is based on a Member's credited
service, average final compensation and pension multiplier.
Average final compensation is one-twelfth of the average salary paid during the
best five years of the last ten years of employment. Salary is total -cash
remuneration for services rendered as a Firefighter or Police Officer.
Credited service is generally a Member's period of employment as a Firefighter
or Police Officer with the Village of Tequesta, measured in years and completed
months of a year.
The pension multiplier is:
3.0% for the first 6 years of service
3.5% for the next 4 years of service
4.0% for the next 5 years of service
3.0% for the next 6 years of service
2.0% for the next 4 years of service
3.0% for all years after 25 years
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Sample Calculation
The following example illustrates how average final compensation is calculated.
This example is for planning purposes only and does not indicate the actual
benefit for any Member.
Year Before
Retirement
Sample Salary
for Year
5th 21,000
4th 21,000
3rd 22,000
2nd 23,000
1st _ 24,f100~ ~~
5-Year Total Salary $111,000
To calculate final average compensation, add together the best five years, of the
last ten years salary, and divide by 5:
$1 ~ 1,000 divided by 5 = $22,200 average yearly salary
Divide the average yearly salary by twelve for the final average compensation:
$22,000 divided by 12 = $1,850
The following is an illustration of a normal retirement pension calculation. This is
an example for planning purposes only and does not indicate the actual benefit
for any Member.
(1) Age at retirement 52 years
(2) Total credited service 25.0 yrs.
(3) Average final compensation $1,850
(4) (a) 3.0% for 6 years 18%
(b) 3.5% for 4 years 14%
(c} 4.0% for 5 years 20%
(d) 3.0% for 6 years 18%
(e) 2.0% for 4 years 8%
(5) Total (4)(a) through (4)(e) 78%
(6) Line (5) times line (3) 78% x 1,850 $1,443.00
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EARLY RETIREMENT PENSION
A Firefighter or Police Officer who is age 50 and has 6 years of service is eligible
for early retirement. The early retirement benefits that are payable to a
Firefighter or Police Officer are determined in the same manner as the normal
retirement benefit payable at the normal retirement date or payable immediately,
but reduced by 3% for each year that early retirement precedes normal
retirement.
FORMS OF PAYMENT OF A PENSION
Normal Form
The standard form of payment for the pension described above is a benefit
payable for life with 10 years certain, in other words, you are guaranteed 120
monthly payments.
A Member may designate a beneficiary to receive the benefit payable, if any,
upon the death of the retired Member.
When there is no beneficiary named, the benefit will be paid to the spouse,
dependent children, or dependent living parents of the Firefighter or Police
Officer, or if there is no such survivor, then to the deceased Firefighter or Police
Officer's estate. Pension payments will continue to the retired Member's
beneficiary until a total of 120 payments have been made.
IT IS IIVIP~?RTANT TOK_EEP YOI~R
BENEFICIARY DESIGNATION UP TO DATE
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Optional Forms of Payment
Optional forms of payment are available in lieu of the normal form described
above. The amount of pension under each optional form has the same actuarial
value as the normal form of payment (lifetime payments with 120 payments
guaranteed).
Option I -Joint and 100% Survivor -The joint and 100% survivor .form
of payment pays the retired Member a reduced monthly pension during
the joint lifetime of the Member and a dependent joint pensioner. Upon
the death of either of them, 100% of the reduced monthly pension is paid
to the survivor for life.
Option II -Joint and 76% Survivor -The joint and 76% survivor form of
payment pays the retired Member a reduced monthly pension during the
joint lifetime of the Member and a dependent joint pensioner. Upon the
death of either of them, 76% of the reduced monthly pension is paid to the
survivor for life.
Option III -Joint and 66-213% Survivor -The joint and 66-2/3% survivor
form of payment pays the retired Member a reduced monthly pension
during the joint lifetime of the Member and a dependent joint pensioner.
Upon the death of either of them, 66-2/3% of the reduced monthly
pension is paid to the survivor for life.
Option IV -Joint and 50% Survivor -The joint and 50% survivor form of
payment pays the retired Member a reduced monthly pension during the
joint lifetime of the Member and a dependent joint pensioner. Upon the
death of either of them, 50% of the reduced monthly pension is paid to the
survivor for life.
Option V -Life Annuity -The straight life form of payment pays the
retired Member an increased monthly pension for life. The amount of this
benefit is more than the normal form and other optional forms. No
monthly pension is ever paid a spouse, child, dependent parent or other
beneficiary under this form of payment.
Option VI -Other - In lieu of the other optional forms, benefits may be
paid in any form approved by the Board so long as it is the actuarial
equivalent of the benefits otherwise payable.
The Fund Administrator can give you an estimate of the amount of your pension
under any of the optional forms of payment. A request for an optional form of
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payment must be submitted in writing to the Board before the effective date of
retirement. An optional form of payment cannot be changed after the first
pension check is cashed. The election of Options I, II, III and IV shall be null and
void if the designated beneficiary dies before the member's payments
commence and the member will be paid in accordance with the normal form of
benefit.
SURVIVOR BENEFITS -DEATH BEFORE RETIREMENT
Dutv Related Deaths
The surviving spouse, or in certain circumstances surviving dependent children,
of a participant who dies while employed in the Fire or Police Departments as a
Firefighter or Police Officer will be paid a duty death pension if the Board finds
the death to be the result of causes arising out of and in the course of the
participant's performance of duty as a police officer or firefighter.
A surviving spouse is paid a monthly pension, for life, of 50% of the participant's
Average Final Compensation.
The death benefit is paid to the estate if the participant leaves neither a surviving
spouse nor an eligible surviving child. In any of these cases, the Board may, in
its sole discretion, direct that the actuarial value of the monthly payment be paid
as a lump sum.
Non-Duty Related Deaths
If a participant who has 6 or more years of credited service dies while employed
in the Fire or Police Department as a Firefighter or Police Officer and the death
is not in the line of duty, the beneficiary is paid a pension equal to the benefits
otherwise payable at early or normal retirement age.
if no peiisioii~ is paid or will become payable on account of the death of a
participant, the participant's accumulated contributions are paid to the parti-
cipant's designated beneficiary or to the participant's estate if there is no
designated beneficiary.
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DISABILITY RETIREMENT
A pension may be payable to a Member who becomes disabled while employed
trt with the Village as a Firefighter or Police Officer. Eligibility and the amount of
the pension are dependent on whether or not the disability occurred in the line of
duty.
The disability must arise from a mental or physical illness, disease or injury which
totally and permanently prevents the Member from performing useful and
efficient service as a Firefighter or Police Officer in the Village of Tequesta. No
Firefighter or Police Officer shall be permitted to retire under a disability
retirement until examined by a duly qualified physician or surgeon to be selected
by the Board of Trustees and the physician or surgeon finds the Member to be
disabled from performing the functions of a Firefighter or Police Officer. The
final determination of disability is made by the Board.
If disability results from excessive and habitual use of drugs, intoxicants or
narcotics, willful and illegal participation in fights, riots or civil insurrection, while
committing a crime, injury or disease sustained while serving in the armed
forces, then no disability pension can be awarded.
A Member who is retired for disability may be required to undergo periodic
medical examination under the direction of the Board of Trustees to determine if
the retired Member is capable of performing the duties of a Firefighter or Police
Officer in the Village.
Duty Disability Retirement
If the Board finds the disability to have arisen out of and in the course of the
Member's performance of duty as a Village of Tequesta Firefighter or Police
Officer, the amount of pension is equal to the greater of: 42% of the Member's
average monthly compensation or the accrued pension benefit.
Non-Dut~r Disability Retirement
If the disability is not the result of performing duty as a Village of Tequesta
Firefighter or Police Officer, then the amount of pension is calculated the same
as a normal retirement pension based on average final compensation and
credited service at the time of disability. The minimum pension is 25% of
average final compensation.
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MONTHLY SUPPLEMENTAL BENEFITS
Each Member or Beneficiary receiving pension benefits is entitled to a monthly
supplemental pension benefit. The monthly supplemental benefit is equal to $20
per year of service to a maximum of $600.00 per month. The benefit will cease
upon the later of the death of the retired Member or Beneficiary.
DEFERRED RETIREMENT OPTION PLAN (DROP)
A participant may elect DROP participation upon eligibility for normal retirement.
Eligibility to enter the DROP ends if not exercised before the 27'h year of
employment. DROP participation ends at the first to occur of:
1) termination of employment,
2) 30 years of credited service, or
3) 5 years of participation.
Upon the effective date of DROP participation a participant's pension amount is
calculated based on credited service and final average salary at that time and
the amount remains permanently frozen. The participant's DROP account is
credited with monthly amounts equal to the frozen pension during the period of
DROP participation. DROP accounts are credited with investment earnings and
losses each September 30 during the DROP period. Members accounts receive
the rate of return on the pension fund.
Participant DROP accounts are subject to administrative charges.
A participant may elect payment of the DROP account at any time following
termination of employment but not later than age 70 '/2. Payment is available
under several options. Detailed information is available from the administrator.
ENDING EMPLOYMENT BEFORE RETIREMENT
If a participant with less than 6 years of credited service, quits or is fired from
employment as a Village of Tequesta Firefighter or Police Officer, future rights to
a pension are forfeited. Participant contributions are refundable, however.
A Member may voluntarily leave their contributions in the pension fund pending
re-employment by the Village for a period up to five years.
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If a participant has at least 6 years of credited service when employment as a
Firefighter or Police Officer terminates, the right to a deferred normal retirement
is retained, so long as accumulated contributions are left on deposit in the
Pension Fund.
The amount of deferred normal retirement pension is calculated using average
final compensation and credited service at the time of termination of employment
as a Firefighter or Police Officer. The amount of pension may be subject to early
retirement reduction of 3% per year if applicable. Retirement and payment of a
pension is available upon application on or after age 50.
FILING FOR RETIREMENT
In order to ensure that you receive your pension on time, you should file your
application with the Fund Administrator at least 30 days before retirement. All
forms can be obtained from the Fund Administrator at the address on the
Introduction page. Penalties will be imposed for making a false or misleading
statement to obtain a pension benefit. It can take up to 120 days after your date
of retirement to receive your first pension check.
TRUSTEE TO TRUSTEE TRANSFER
To minimize the tax consequences of rolling assets over to an IRA or another
qualified plan, direct trustee-to-trustee transfers are available. Please see the
administrator for the appropriate forms.
COST OF THE PENSION FUND
Members are required to contribute 5.00% of covered salary. Contributions are
deducted from each paycheck and credited to the Member's Pension Fund
account.
The Village of Tequesta also contributes to the Pension Fund. The amount of
Village contribution is mathematically determined in accordance with State
statutes to finance Pension Fund benefits as they are earned.
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FORFEITURE OF PENSION
Any Member who is convicted of any of the below offenses committed prior to
retirement shall forfeit all rights and benefits under this Fund, except for a refund
of accumulated contributions. The specified offenses are:
(1) Committing, aiding or abetting of an embezzlement of public funds;
(2) Committing, aiding or abetting of any theft by a public officer or employee
from employer;
(3) Bribery in connection with the employment of a public officer or employee;
(4) Any felony specified in Chapter 838, Florida Statutes;
(5) The committing of impeachable offense
(6) The committing of any felony by a public officer or employee who, willfully
and with intent to defraud the public or the public agency for which the
public officer or employee acts or in which he or she is employed of the
right to receive the faithful performance of his or her duty as a public
officer or employee, realizes or obtains, or attempts to realize or obtain, a
profit, gain, or advantage for himself or herself or for some other person
through the use or attempted use of the power, rights, privileges, duties,
or position of his or her public office or employment position.
(7) The committing on or after October 1, 2008, of any felony defined in
§800.04, Florida Statutes, against a victim younger than 16 years of age,
or any felony defined in Chapter 794, Florida Statutes against a victim
younger than 18 years of age, by a public officer or employee through the
use or attempted use of power, rights, privileges, duties, or position of his
or her public office or employment position.
Any Member who has received benefits from the Plan in excess of his
accumulated contributions shall be required to repay the Fund. The Board may
implement legal action necessary to recover such funds.
Additionally, a Member who makes a false or misleading statement to obtain
retirement benefits shall commit a misdemeanor of the first degree and ':f
convicted, the Member shall forfeit his/her benefit.
CLAIMS PROCEDURES
Any member, former member, or beneficiary who has been denied a benefit by a
decision of the Board shall be entitled to request in writing that the Board give
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further consideration to the claim. The Board shall review the case and issue an
order within 60 days after receipt of the written request.
Within 90 days after receipt of the order of the Board, the Member may request
in writing, a hearing. The Board shall then conduct a hearing within the next 90
days. The claimant may be represented at the hearing by an attorney or other
representative of his/her choosing. During the hearing the claimant shall have
the opportunity to submit written and oral evidence and arguments in support of
his/her claim. The claimant shall also have the opportunity to review the Board's
file at or prior to the hearing. Either the claimant of the Board may request that a
court reporter record the proceedings. In this event a complete written transcript
of the proceedings shall be furnished to both parties at the expense of the party
requesting the attendance of the court reporter.
A final written decision shall be made by the Board within 30 days of such
hearing. The written decision shall include the reasons for such decision, and
such decision shall be final.
ADMINISTRATION OF THE PENSION FUND
The Pension Fund is administered by a Board of Trustees which is responsible
for overseeing the investment of Pension Fund assets and application of the
provisions of the Village Code. The Board has authority over distribution of all
pensions and makes final decisions on claims and appeals. Five trustees
comprise the Board: two legal residents of the Village appointed by the Village
Commission, two full-time Public Safety Officers' elected by Pension Fund
Members and a trustee chosen by the majority of the other four trustees.
Pension Fund assets are maintained and invested entirely separate from Village
assets and cannot be used for any purpose other than those specified in the
Village Code.
INVESTMENTS
The assets of the Plan are presently invested by Rockwood Capital Management
under investment guidelines adopted by the Board of Trustees in consultation
with their investment advisors.
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ACTUARIAL SOUNDNESS
The actuary for the Plan has determined that the Plan is actuarially sound and
can adequately fund the benefits based upon projected contributions to the Plan
and investment earnings.
AGENT FOR SERVICE OF LEGAL PROCESS
Board of Trustees
Hanson, Perry & Jensen, P.A.
400 Executive Center Drive
Suite 207
West Palm Beach, Florida 33401-2922
PLAN YEAR
The plan year is the twelve month period beginning each October 1. Records are
kept on a fiscal year basis.
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ACTUARIAL DATA
PERTINENT ACTUARIAL INFORMATION
October 1, 2007 October 1, 2005
Number of Members of the Plan
Active Employees 29 28
Those Receiving or Due to Receive Benefrts 1 1
Annual Payroll of Active Members
$1,931,871
$ 1,650,403
Annual Rate of Benefits in Pay Status 0 0
Actuarial Accrued Liability 3,730,247 2,598,331
Net Assets Available for Benefits (Actuarial Value) 4,080,609 2,782,953
Unfunded Actuarial Accrued Liability (350,362) (184,622)
Required Contribution to be Made to the Plan Over
and Above Contributions by Members of the Plan 185,265 171,183
Required Contribution as % of Payroll of g 5g % 10.37
Active Members
Required Contribution to be Paid During
Year Ending 9/30/08 9/30/06
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INCOME AND DISBURSEMENTS
PENSION FUND INCOME AND DISBURSEMENTS
Year Ending Year Ending
9/30/2007 9/30/2006
Market Value at Beginning of Period $ 3,373,976 $ 2,897,258
Income
Member Contributions 112,131 91,672
State Contributions 209,984 152,413
Employer Contributions 201,165 176,033
Investment Earnings
Interest & Dividends 143,722 88,109
Realized & Unrealized Gain (Loss) 379,301 57,684
Total 523,023 145,793
Other Income - 691
Totallncome 1,046,303 566,602
Disbursements
Monthly Benefit Payments - -
Lump Sum Distributions. - -
Refund of Contributions 23,445 41,199
Investment Related Expenses 33,502 33,031
Other Administrative Expenses 17,025 15,654
Insurance Premiums - -
Other - -
Total Disbursements 73,972 89,884
Net Increase During Period 972,331 476,718
Market Value at End of Period 4,346,307 3,373,976
Less: State Contribution Reserve 265,698 156,894
Final Market Value 4,080,609 3,217,082
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