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City of Clermont
CODE ORDINANCE
NO. 322-C
AN ORDINANCE OF THE CITY OF CLERMONT, AMENDING AND RESTATING THE
CITY OF CLERMONT FIREFIGHTERS' PENSION TRUST FUND, AS ADOPTED BY
ORDINANCE NO. 30S-C; PROVIDING FOR CODIFICATION; PROVIDING FOR
SEVERABILITY OF PROVISIONS; REPEALING ALL ORDINANCES IN CONFLICT
HEREWITH; PROVIDING PLAN BENEFIT IMPROVEMENTS LIMITATION; AND
PROVIDING AN EFFECTIVE DATE.
WHEREAS, The City of Clermont Firefighters are presently provided pension and certain
other benefits under Code Ordinance No. 305-C and;
WHEREAS, The City Council desires to clarify and restate the provisions of the
Firefighters' Retirement Plan and to incorporate Federal Law and the applicable provisions of
Chapter 175, Florida Statutes;
NOW, THEREFORE BE IT ORDAINED BY THE CITY COUNCIL OF THE CITY OF
CLERMONT, FLORIDA,
SECTION 1:
Section 7.05 (Beneficiaries Receipt of Payment) of the Plan Document shall be amended to read
as follows:
A Beneficiary may not elect an optional form of benefit, however, the Board may elect to make a
lump sum payment pursuant to Article 10(F) to a beneficiary of the death benefits payable
hereunder.
SECTION 2:
Section 16.01 (Basic Limitations) of the Plan Document shall be amended to read as follows:
Subject to the adjustments hereinafter set forth, the maximum amount of annual retirement
income payable with respect to a Participant under this Plan shall riot exceed the dollar amount
as may be allowable for any calendar year pursuant to Section 415(b) of the Code.
SECTION 3:
Section 16.03 A. (Adjustments in Limitations) of the Plan Document shall be amended to read as
follows:
In the event the Participant's retirement benefits become payable before age sixty-two (62), the
maximum amount of annual retirement income limitation prescribed by this Article shall be
reduced in accordance with Regulations issued by the Secretary of the Treasury, so that such
limitation (as so reduced) equals an annual benefit (beginning when such retirement income
benefit begins) which is equivalent to the maximum amount of annual retirement income as
prescribed by this Article beginning at age 62.
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City of Clermont
CODE ORDINANCE
NO. 322-<:
Page 2
SECTION 4:
Section 16.03 C. (Adjustments in Limitations) of the Plan Document shall be amended to read as
follows:
The reduction provided for in 16.03 A. shall not be applicable to disability benefits or pre-
retirements death benefits.
SECTION 5:
Section 18.07 (Qualified Military Service) of the Plan Document shall be amended to read as
follows:
Notwithstanding any provision of this Plan to the contrary, contributions, benefits and service
credit with respect to qualified military service will be provided in accordance with Section 414(u)
of the Code.
SECTION 6:
Section 18.08 (Domestic Relations Under Submission) shall be added to the Plan Document to
read as the following:
(A) Prior to the entry of any domestic relations order which affects or purports to affect
the Fund's responsibilities in connection with the payment of benefits, that order
should be submitted through the Fund's administrator for review as to whether the
Fund may honor it.
(B) If the domestic relations order is not submitted to the administrator for review prior to
entry, and the Fund is ordered to take action that it may not legally take, and the
Fund expends administrative or legal fees in resolving the matter, the Member who
submitted the domestic relations order will be required to reimburse the Fund its
expenses in connection with the order.
(C) The administrator may develop rules or regulations concerning what the Fund will
consider to determine if a domestic relations order may be complied with by the
Fund.
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City of Clermont
CODE ORDINANCE
NO. 322-C
Page 3
SECTION 7:
Section 18.09 (Plan Amendments) shall be added to the Plan Document to read as the following:
The Employer acknowledges the FMPTF Defined Benefit Plan document may be amended from
time to time by the FMPTF Master Trustee to comply with applicable federal or state laws or
regulations, and to make ministerial or administrative changes to the Plan, without the consent of
the Employer or of Participants or any Beneficiaries thereof. Any amendment of the Plan, made
in accordance with this provision, may be made retroactively, if deemed necessary or appropriate
by the FMPTF Master Trustee. A copy of any Plan amendment shall be delivered to the Plan
administrator, and the Plan shall be amended in the manner and effective as of the date set forth
therein, and the Employers, Employees, Participants and Beneficiaries shall be bound by the
amendment. The FMPTF Master Trustee shall not make any amendment to benefits under the
Plan unless the amendment is necessitated to comply with applicable federal or state laws or
regulation. Employers shall receive copies of any Plan amendments made by the FMPTF Master
Trustee.
SECTION 8:
Section G. 2. (Normal Retirement Benefit) of the Adoption Agreement shall be amended to read
as follows:
The monthly normal retirement benefit for full-time firefighters shall be the sum of (1) the number
of years service prior to October 1, 2002 multiplied by 2.25% and (2) the number of years of
service after October 1, 2002, multiplied by 3% and multiplied by average final compensation.
The monthly normal retirement benefit for volunteer firefighters shall be the greater of:
(a) five dollars ($5.00) a year multiplied by the years of credited volunteer service, or
(b) the sum of (1) the number of years of credited volunteer service prior to October
1, 2002 multiplied by 2.25% and (2) the number of years of credited volunteer
service after October 1, 2002 multiplied by 3% and multiplied by average monthly
compensation as a volunteer.
The monthly normal retirement benefit of a firefighter that changes status from a volunteer
firefighter to a full-time firefighter shall be the sum of (1) the accrued benefit as a volunteer
firefighter and (2) the accrued benefit as a full-time firefighter.
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City of Clermont
CODE ORDINANCE
NO. 322-C
Page 4
SECTION 9:
Section J. (Termination of Employment and Vesting) of the Adoption Agreement shall be
amended to read as follows:
If a member's employment is terminated either voluntarily or involuntarily, the following benefits
are payable.
1) If the member has less than five (5) years of credited service upon termination of
employment, the member shall be entilled to a refund of his accumulated
contributions or the member may leave the accumulated contributions deposited with
the fund.
2) If a member has more than five (5) and less than ten (10) years of credited service
upon termination of employment, the member shall be entilled to their accrued
monthly benefit, starting at the member's otherwise normal or early retirement date,
provided he does not elect to withdraw his contributions and provided he survives to
his normal or early retirement date, in accordance with the following schedule:
Years of Vesting
Service %
5 50%
6 60%
7 70%
8 80%
9 90%
For the purposes of this section only, a member may start drawing his vested accrued
benefit at the age of 55. Early retirement deduction will be based on the years
between the age of 55 and the early retirement date.
3) If the member has ten (10) or more years of credited service upon termination of
employment, the member shall be entilled to their accrued monthly retirement
benefits, starting at the member's otherwise normal or early retirement date, provided
he does not elect to withdraw his contributions and provided he survives to this
normal or early retirement date. Early and normal retirement dates are based on
actual years of service.
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City of Clermont
CODE ORDINANCE
NO. 322-C
Page 5
SECTION 10:
Section M. (Deferred Retirement Option Program - "DROP") of the Adoption Agreement shall be
amended to read as follows:
I. ELIGIBILITY.
A participant who reaches the normal retirement date as a Firefighter for the City
of Clermont and is a member of the City of Clermont Firefighters' Pension Plan may enter
into a Deferred Retirement Option Plan ("DROP") on the first day of the month following
the attainment of normal retirement date as defined in the Plan Adoption Agreement.
Participants who attained their normal retirement date prior to the enactment of the
"DROP" shall be afforded the option of participating immediately or retroactively to the
date that they actually attained their normal retirement date. This option must be
exercised no later than (60) days after the Board provided notice of this option to the
affected employee.
II. WRITTEN ELECTION.
An eligible participant electing to participate in the "DROP" must complete and
execute the proper forms supplied by the plan and a resignation of employment.
Election into the "DROP" Is irrevocable once a participant completes the
application to enter the "DROP".
III. LIMITATION AND DISQUALIFICATION FOR OTHER BENEFITS.
A participant may participate in the "DROP" only once. After commencement of
participation the employee shall no longer earn or accrue additional vesting credits or
credited years of service toward retirement benefits and shall not be eligible for disability
or pre-retirement death benefits in the City of Clermont Firefighters' Pension Plan.
IV. CESSATION OR REDUCTION OF CONTRIBUTIONS.
Upon the effective date of a participant's commencement of participation in the
"DROP", the participant's contributions to the City of Clermont Firefighters' Pension Plan
will be discontinued.
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City of Clermont
CODE ORDINANCE
NO. 322-C
Page 6
V. BENEFIT CALCULATIONS.
For all City of Clermont Firefighters' Pension Plan purposes, the credited service
and vesting credits of a participant participating in the "DROP" shall remain as they
existed on the effective date of commencement of participation in the "DROP". The
participant shall not earn or be credited with any additional vesting credits or credited
service after beginning "DROP" participation. Service thereafter shall not be recognized
by the City of Clermont Firefighters' Pension Plan or used for the calculation or
determination of any benefits payable by such Plan.
The average final compensation of the participant shall remain as it existed on
the effective date of commencement of participation in the "DROP". Payment for accrued
unused leave (vacation, holiday, etc.) shall be made, at the option of the participant, from
one of the following choices:
1. when commencing participation in the "DROP", or
2. as the leave is actually used during participation in the "DROP", or
3. when the participant actually terminates employment with the City.
Earnings thereafter shall not be recognized by the Plan or used for the calculation or
determination of any benefits payable by the Plan. However, the value of any retirement
gift provided by the City shall be based on the date that a participant actually leaves
employment with the City including the "DROP" participation period.
VI. PAYMENTS TO DROP ACCOUNT.
The monthly retirement benefits that would have been payable had the member
elected to cease employment and receive normal retirement benefits shall be deposited
in the participant's "DROP" account.
VII. DROP ACCOUNT EARNINGS.
After each fiscal year quarter, the average daily balance in a participant's
deferred retirement option account shall be credited at a rate of six and one-half percent
(6.5%) annual interest compounded monthly. The Board of Trustees along with the City
shall review the stated rate of retum on an annual basis in order to determine the
necessity of any adjustment for future "DROP" participants only.
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City of Clermont
CODE ORDINANCE
NO. 322-C
Page 7
VIII. MAXIMUM PARTICIPATION.
A participant may participate in the "DROP" for a maximum of sixty (60) months.
At the conclusion of the sixty (60) months, the participants' covered city employment
must terminate pursuant to the resignation submitted by the participant as part of the
"DROP" application. The participant may terminate "DROP" participation by advancing
their resignation form covered city employment to a date prior to that submitted by the
participant as part of the "DROP" application.
IX. PAYOUT.
A. Upon the termination of a member's covered City employment (for any
reason, whether by retirement, resignation, discharge or death), the
retirement benefits payable to the participant or the participant's
beneficiary (if the participant selected an optional form of retirement
benefit which provides for payments to the beneficiary) shall be paid to
the member or beneficiary and shall no longer be deposited into the
participant's "DROP" account.
B. Within thirty (30) days after the end of any calendar quarter following the
termination of a participant's employment, the balance in the participant's
"DROP" account shall be payable at the participant's option:
1. In full in a single lump sum payment, all accrued "DROP"
benefits, plus interest, less withholding taxes remitted to the
Internal Revenue Services (IRS), paid to the "DROP" participant
or surviving beneficiary, or;
2. As a direct rollover, all accrued "DROP" benefits, plus interest,
paid directly from the "DROP" to the custodian of an eligible
retirement plan as defined in Section 402(c)(8)(B), Intemal
Revenue Code (lRC). If benefit is to be paid to a surviving
beneficiary, the transfer shall be to an individual retirement
account or annuity as described in Section 402(c)(9), IRC.
3. Partial lump sum - A portion of the accrued "DROP" benefits
shall be paid to the participant or surviving beneficiary, less IRS
tax, and the remaining "DROP" benefits shall be transferred
directly to the custodian of an eligible retirement plan as defined
in Section 402 (c)(8)(B), IRC. However, in the case of an eligible
rollover distribution to the surviving beneficiary of a deceased
participant, an eligible retirement plan is an individual retirement
account or annuity as described in Section 402(c)(9), IRC. The
"DROP" participant or surviving beneficiary shall specify the
proportions.
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City of Clermont
CODE ORDINANCE
NO. 322-C
Page 8
Regardless of the option selected by the participant, the Board of Trustees has
the right to accelerate payments in order to comply with Section 401 (A)(9) of the
Internal Revenue Code and the right to defer payments to comply with Section
415 of the Internal Revenue Code.
X. DEATH.
If a "DROP" participant dies before their account balances are paid out in full, the
participant's designated beneficiary shall have the same rights as the participant to elect
and receive the payout options set forth in paragraph ten (X) above. "DROP" payments
to a beneficiary shall be in addition to any retirement benefits payable to the participant.
Participants who are or have been "DROP" participants are not eligible for pre-retirement
death or disability benefits.
XI. FORMS.
The forms and notices approved by the City shall be used in the administration of
The "DROP" Plan.
XII. AMENDMENT.
The Board of Trustees, upon approval by the City Council, can amend the
"DROP" at any time. Such amendments shall be consistent with the provisions covering
deferred retirement option plans set forth in any applicable collective bargaining
agreement and shall be binding upon ail future "DROP" participants and upon all "DROP"
participant's who have balances in their accounts. Such amendments may increase the
expense, decrease the account eamings, or limit or restrict the payout options.
SECTION 11:
Specific authority is hereby granted to codify and incorporate only sections 1 - 7 of this
Ordinance in the existing Code of Ordinances of the City of Clermont, Florida.
SECTION 12:
All Ordinances or parts of Ordinances in conflict herewith be and the same are hereby repealed.
SECTION 13:
If any section, subsection, sentence, clause, phrase of this Ordinance, or any particular
. application thereof shall be held invalid by any court. administrative agency, or other body with
appropriate jurisdiction, the remaining section, subsection, sentences, clauses, or phrases under
application shall not be affected thereby.
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City of Clermont
CODE ORDINANCE
NO. 322-C
Page 9
SECTION 14:
Plan benefit improvements provided by this Ordinance shall apply prospectively and shall not
apply to any Plan Member who has terminated employment or who has retired prior to the
effective date of this Ordinance.
SECTION 15:
That this Ordinance shall be effective retroactive to October 1, 2002.
PASSED ON FIRST READING, this 12th day of November, 2002.
PASSED AND ADOPTED ON SECOND READING, this 26th day of November, 2002.
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/ d S. Turville, Jr. ,/
Mayor, City of Clermont, Florida