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Village of Tequesta
Public Safety Officers' Pension Fund
Summary Plan Description
August 2006
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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, Gwen Carlisle
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 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, Gwen Carlisle. 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
Ed Sabin, Chairman
Ray Giblin, Secretary
Ken Nielson
Robert Neier
Kevin Pittman
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• TABLE OF CONTENTS
DEFINITIONS ........................................................ 1
PARTICIPATION IN THE PENSION FUND ................................. 2
ELIGIBILITY FOR NORMAL RETIREMENT ................................ 2
AMOUNT OF A NORMAL RETIREMENT PENSION .......................... 2
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
Non-Duty Related 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
ADMINISTRATION OF THE PENSION FUND .............................. 10
INVESTMENTS ..................................................... 10
ACTUARIAL SOUNDNESS ............................................ 10
AGENT FOR SERVICE OF LEGAL PROCESS ............................. 10
• PLAN YEAR ........................................................ 10
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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 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 Pen-
sion Fund.
Salary -total cash remuneration paid to a Firefighter or Police Officer for services
rendered.
Village of Tequesta Public
Safety Officers Pension Fund
• Page 1
• PARTICIPATION IN THE PENSION FUND
Each Firefighter or Police Officer employed in the Village of 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 the one-twelfth of the average salary paid during the
best five years of the last ten years of employment. Salary is total cash remunera-
• tion for services rendered as a Firefighter or Police Officer.
Credited service is generally a Member's period of employment as a ire ig ter or
Police Officer with the Village of Tequesta, measured in years and completed
months of a year.
The pension multiplier is:
3.0°I° 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
Village of Tequesta Public
Safety Officers Pension Fund
• Page 2
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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 Sample Salary
Retirement for Year
5th 21,000
4th 21,000
3rd 22,000
2nd 23,000
1st 24.000
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:
$991,000 divided by 5 = $22,200 average yearly salary
Divide the average yearly salary by twelve for the final average compensation:
$22,000 divided by 92 = $9,850
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
Village of Tequesta Public
Safety Officers Pension Fund
• Page 3
• EARLY RETIREMENT PEN
SION
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 but are 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 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 IMPORTANT TO KEEP YOUR
BENEFICIARY DESIGNATION UP TO DATE
Village of Tequesta Public
Safety Officers Pension Fund
• Page 4
• Optional Forms of P~ment
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 11 -Joint and 75% Survivor -The joint and 75% 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, 75% of the reduced monthly pension is paid to the survivor
for life.
• Option III -Joint and 66-2/3% Survivor -The joint and 66-2/3% survivor
form of payment pays the retired Membera 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 'oint and 50% survivor form
1 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 underthis
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.
Village of Tequesta Public
Safety Officers Pension Fund
• Page 5
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
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.
SURVIVOR BENEFITS -DEATH BEFORE RETIREMENT
Duty Related Deaths
The surviving spouse, or in certain circumstances surviving 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.
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 pension is paid orwill become payable on account of the death of a participant,
the participant's accumulated contributions are paid to the participant's designated
beneficiary or to the participant's estate if there is no designated beneficiary.
Village of Tequesta Public
Safety Officers Pension Fund
• Page 6
• DISABILITY RETIREMENT
A pension may be payable to a Member who becomes disabled while employed in
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-Duty 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.
Village of Tequesta Public
Safety Officers Pension Fund
• Page 7
MONTHLY SUPPLEMENTAL BENEFITS
• Be innin October 1 2003 each Member or B
9 9 eneficiary 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:
i) termination of employment,
ii) 30 years of credited service, or
iii) 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.
Participanfi 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.
Village of Tequesfa Public
Safety Officers Pension Fund
• Page 8
• A Member may voluntarily leave their contributions in the pension fund pending re-
employment by the Village for a period up to five years.
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 feast 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.
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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
Effective the first full payroll period after June 9, 2005, Police Officer Members are
required to contribute 5.00% of covered salary and Firefighter Members are
required to contribute 6.1 %. 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
Village of Tequesta Public
Safety Officers Pension Fund
• Page 9
to finance Pension Fund benefits as they are earned.
• ADMINISTRATION OF TH
E 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.
ACTUARIAL SOUNDNESS
• The actuary for the Plan has determined that the P
Ian 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,
Village of Tequesta Public
Safety Officers Pension Fund
• Page 70