HomeMy WebLinkAboutDocumentation_Pension Public Safety_Tab 19_08/04/2008H.ANSON, PERRY S~ JENSEN, P.A.
4O0 EXECUTIVE CENTER DRIVE, SUITE 2O7 -WEST PALM BEACH, FLORIDA 33401-2922
JILL HANSON*
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NN H. PERRY
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BONNI SPATARA JENSEN
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MEMORANDUM
Board of Trustees
Tequesta Public Safety Officers' Pension Plan
Bonni S. Jensen
Hanson, Perry & Jensen, P.A.
Federal and State Legal Updates
July 18, 2008
TELEPHONE (561)686-6550
FACSIMILE (561) 686-2802
Below is information regarding two new legal updates, one involving a new federal
law and another involving administrative rules under Florida Statutes 112.61, Protecting
Florida's Pension Act.
Federal Law
On June 17, 2008, President Bush signed into law the "Heroes Earnings Assistance and
Relief Tax Act of 2008" ("HEART")(H.R. 6081; P.L. 110-245) This law provides tax
benefits to active duty miliary personnel. There are two sections that may affect your
Pension Plan.
A. Survivor and Disability Payments
The HEART law expands the federal Uniformed Services Employment and
Reemployment Rights Act of 1994 ("USERRA") to require that atax-qualified plan must
provide to the survivors of a participant who dies while performing qualified military service
the benefits that the participant would have received under the plan if the participant had
resumed participation under the plan and then terminated on account of his death. This
law includes Section 457 plans and any other types of employee benefits which may
continue upon a member's death.
The HEART law also expands USERRA to allow for additional benefit accrual for
participants who die or were disabled while performing qualified military service and unable
to return to work because of that disability or death. The participant must be treated as if
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Board of Trustees
Federal and State Legal Update
July 18, 2008
Page 2 of 3
they had been rehired as of the day before death or disability and terminated as of the date
of death or disability. These provisions are effective as of January 1, 2007 and the plan
must be amended to include this law on or before the last day of the plan year which
begins on or after January 1, 2010.
B. Treatment of Differential Military Pay as Wages
Some employers pay employees who have been called to active duty an amount
of salary to make their military income equivalent to their wages while working. This
amount is known as "differential wages." Retirement Plans shall treat differential wages
as pensionable compensation. This provision is effective for wages paid after December
31, 2008 and the plan must be amended to include this law on or before the last day of the
plan year which begins on or after January 1, 2010.
i recommend that the Board adopt amendments to incorporate these changes into
the plan document.
State Proposed Rules Under Part VII, Chapter 112 Florida Statutes
The Division of Retirement has proposed amendments to the rules under which
municipal and special district units of provide information on their retirement systems to the
Division of Retirement. Attached is a copy of the proposed rules.
The Division held a rules making workshop on Monday in Tallahassee that i
attended. The short version is that the plan attorneys (including a former legislator),
actuaries, Trustees, Union officials, City representatives, and the League of City
representatives who attended expressed concerns about the proposed rules in four areas:
• the rules in general exceed the authority granted to the Division of
Retirement in the statutes;
• the rules impose actuarial assumptions on the various boards of trustees
throughout the state without regard for the Fund's own circumstance;
• the rules impose substantially more reporting and disclosure requirements
on the Board's and specifically, the actuaries without any corresponding
explanation of the reason for the increased reporting; and
• the rules dilute of the authority and responsibility of the Trustees.
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Board of Trustees
Federal and State Legal Update
July 18, 2008
Page3of3
The individuals present also conveyed the desire to:
create a task force or study group to help convert the proposed rules into
final rules which will solve real problems presented by governmental pension
plans;
have a phased effective date for any mandated cost items in the rules; and
delay implementation until all plans can determine the impact of the various
rules to the individual plans.
A second rules workshop is planned for sometime in September, maybe even in
conjunction with the Municipal Police Officers and Firefighters Pension Trust Funds
conference in Orlando (September 8-10).
At this point, this Board should be determining whether there are any cost impacts
of the proposed rules on the Plan.
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