Ordinance No. 2023-003CC/.
�LER�" N-r CITY OF CLERMONT
— ORDINANCE NO.2023-003
1 AN ORDINANCE OF THE CITY COUNCIL OF THE CITY OF
2 CLERMONT, LAKE COUNTY, FLORIDA, AMENDING THE CITY OF
3 CLERMONT FIREFIGHTERS' PENSION TRUST FUND, AS ADOPTED
4 BY ORDINANCE NO. 304-C; PROVIDING PLAN BENEFIT REVISIONS;
5 PROVIDING FOR CONFLICT, SEVERABILITY, CODIFICATION,
6 ADMINISTRATIVE CORRECTION OF SCRIVENERS ERROR,
7 PUBLICATION AND AN EFFECTIVE DATE.
8 WHEREAS, the City of Clermont Firefighters are presently provided pension and certain
9 other benefits under Ordinance No. 304-C;
10 WHEREAS, the City and the IAFF Local 4350 have agreed in collective bargaining to
11 certain changes in Pension benefits, member contributions, and use of State Chapter 175 money;
12 WHEREAS, the Pension Board has recommended a clarification to the definition of salary
13 regarding the application of certain IRS salary limits; and
14 WHEREAS, the City Council desires to amend the provisions of the Firefighters'
15 Retirement Plan to implement the collective bargaining agreement and the recommended
16 clarification;
17 NOW, THEREFORE BE IT ORDAINED, by the City Council of the City of Clermont,
18 Lake County, Florida that: (note: strikethrough indicates removed words and underlined indicates
19 added):
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SECTION 1:
That Chapter 46, Pensions and Retirement, Article IV, Firefighters' Retirement Plan, Sec. 46-101,
of the Code of Ordinances of the City of Clermont, is hereby amended to read as follows:
Sec. 46-101. - Definitions.
(a) As used herein, unless otherwise defined or required by the context, the following
words and phrases shall have the meaning indicated:
Salary means the fixed monthly remuneration paid a firefighter plus all tax
deferred, tax sheltered, or tax exempt items of income derived from elective
employee payroll deductions or salary reductions; where, as in the case of volunteer
firefighter, remuneration is based on actual services rendered, salary will be total
cash remuneration received yearly for such services, prorated on a monthly basis.
The remuneration paid to a firefighter by the city for a plan year excludes bonuses.
Effective October 1, 2019, the amount of annual overtime compensation that may
be included in the calculation of a retirement benefit shall be limited to the first 300
hours of overtime paid per calendar year. The amount of the accrued unused sick
or annual leave payment at retirement that may be included in the retirement benefit
shall be the lesser of (a) the total value of accrued unused sick or annual leave that
would have been paid to the member based on years of service as of February 14,
2014; or (b) the actual amount of accrued unused sick or annual leave paid to the
member at retirement, regardless of whether the amount of sick or annual leave
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�LEKI- ONT CITY OF CLERMONT
— ORDINANCE NO.2023-003
41 was, at some time prior to retirement, reduced below the amount on February 14,
42 2014.
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Compensation in excess of the limitations set forth in Section 401(a)(17) of the
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code as of the first day of the plan year shall be disregarded for any purpose,
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including employee contributions or any benefit calculations. The annual
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compensation of each member taken into account in determining benefits or
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employee contributions for any plan year beginning on or after January 1, 2002,
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may not exceed $200,000.00, as adjusted for cost -of -living increases in accordance
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with code Section 401(a)(17)(B). Compensation means compensation during the
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fiscal year, and the fiscal year is considered the determination period. The cost-
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of -living adjustment in effect for a calendar year applies to annual compensation
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for the determination period that begins with or within such calendar year. If the
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determination period consists of fewer than 12 months for all members, the annual
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compensation limit is an amount equal to the otherwise applicable annual
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compensation limit multiplied by a fraction, the numerator of which is the number
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of months in the short determination period, and the denominator of which is 12 as
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provided for in Treas. Reg. Section 1.401(a)(17)-1(b)(3)(iii)(B). If the
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compensation for any prior determination period is taken into account in
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determining a member's contributions or benefits for the current plan year, the
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compensation for such prior determination period is subject to the applicable annual
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compensation limit in effect for that prior period. The limitation on compensation
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for an "eligible employee" shall not be less than the amount which was allowed to
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be taken into account hereunder as in effect on July 1, 1993. "Eligible employee"
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is an individual who was a member before the first plan year beginning after
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December 31, 1995.
66 SECTION 2:
67 That Chapter 46, Pensions and Retirement, Article IV, Firefighters' Retirement Plan, Sec. 46-105,
68 of the Code of Ordinances of the City of Clermont, is hereby amended to read as follows:
69 Sec. 46-105. — Contributions.
70 a. Member contributions.
71 (1) Amount.
72 (a) Member contributions will be made as follows:
73 i. Effective the first full payroll period following January 24, 2023,
74 each member of the system shall be required to make regular
75 contributions to the fund in the amount of five and one-half
76 (5.5%) percent of their salary.
77 ii. Prior to January 24, 2023, each Ewh member of the system was
78 shall be required to make regular contributions to the fund in the
79 amount of four percent of their his salary.
80 b) Member contributions withheld by the city on behalf of the member
81 shall be deposited with the board immediately after each pay period.
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82 The contributions made by each member to the fund shall be
83 designated as employer contributions pursuant to Section 414(h) of
84 the code. Such designation is contingent upon the contributions
85 being excluded from the members' gross income for Federal Income
86 Tax purposes. For all other purposes of the system, such
87 contributions shall be considered to be member contributions.
88 (2) Method. Such contributions shall be made by payroll deduction.
89 b. State contributions. Any monies received or receivable by reason of laws of the
90 State of Florida, for the express purpose of funding and paying for retirement
91 benefits for firefighters of the city shall be deposited in the fund comprising part of
92 this system immediately and under no circumstances more than five days after
93 receipt by the city. Effective with the monies received from the State of Florida
94 for the distribution received for calendar year 2021 in Fiscal Year 2022. no
95 further monies will be used to fund the Supplemental benefit in accordance
96 with Sec. 46-129 and all future State contributions will be used by the City to
97 offset its contribution.
98 C. City contributions. So long as this system is in effect, the city shall make quarterly
99 contributions to the fund in an amount equal to the required city contribution as
100 shown by the applicable actuarial valuation of the system.
101 d. Other. Private donations, gifts and contributions may be deposited to the fund, but
102 such deposits must be accounted for separately and kept on a segregated
103 bookkeeping basis. Funds arising from these sources may be used only for
104 additional benefits for members, as determined by the board, and may not be used
105 to reduce what would have otherwise been required city contributions.
106 SECTION 3:
107 That Chapter 46, Pensions and Retirement, Article IV, Firefighters' Retirement Plan, Sec. 46-106,
108 of the Code of Ordinances of the City of Clermont, is hereby amended to read as follows:
109 Sec. 46-106. — Benefit amounts and eligibility.
110 (a) Normal retirement age and date. A member's normal retirement age is the earlier
111 of the attainment of age 55 and the completion of ten years of credited service, or
112 the completion of 20 years of credited service, regardless of age. Each member shall
113 become 100 percent vested in his accrued benefit at normal retirement age. A
114 member's normal retirement date shall be the first day of the month coincident with
115 or next following the date the member retires from the city after attaining normal
116 retirement age.
117 (b) Normal retirement benefit.
118 For full-time firefighters: A full-time firefighter member retiring hereunder on or after
119 his normal retirement date shall receive a monthly benefit which shall commence on
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the first day of the month coincident with or next following his retirement and be
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continued thereafter during member's lifetime, ceasing upon death, but with 120
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monthly payments guaranteed in any event.
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(a) The monthly retirement benefit shall equal the sum of two and one -quarter
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percent of average final compensation times years of credited service earned
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prior to October 1, 2002 and three percent of average final compensation times
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years of credited service earned on and after October 1, 2002.
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(b) For retirements on and after January 24, 2023, the retirement benefit for
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each member's 22"d year of credited service shall equal 75% of the
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average final compensation at 22 years).
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(1) For years of service earned after the 22"d year of a member's
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service, the monthly retirement benefit shall equal the sum of two
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percent of average final compensation times vears of credited
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service up to a maximum of 100%.
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(c) Notwithstanding the foregoing, in no event shall the monthly benefit be
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less than two and three-guarters percent of average final compensation
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times all years of credited service up to a maximum of 100%.
137 For volunteer firefighters: A volunteer firefighter member retiring hereunder on or
138 after his normal retirement date shall receive a monthly benefit which shall commence
139 on the first day of the month coincident with or next following his retirement and be
140 continued thereafter during member's lifetime, ceasing upon death, but with 120
141 monthly payments guaranteed in any event. The monthly retirement benefit shall
142 equal the greater of:
143 (1) Five dollars a year multiplied by the years of credited volunteer service, or
144 (2) The sum of two and one -quarter percent of average final compensation times years
145 of credited service earned prior to October 1, 2002 and three percent of average
146 final compensation times years of credited service earned on and after October 1,
147 2002.
148 The normal retirement benefit of a volunteer firefighter that changes status from a
149 volunteer firefighter to a full-time firefighter shall be the sum of the accrued benefit
150 as a volunteer firefighter and the accrued benefit as a full-time firefighter.
151 *****
152 SECTION 4:
153 That Chapter 46, Pensions and Retirement, Article IV, Firefighters' Retirement Plan, Sec. 46-129,
154 of the Code of Ordinances of the City of Clermont, is hereby amended to read as follows:
155 Sec. 46-129. — Supplemental benefit component for special benefits; chapter 175 share
156 accounts.
157 Effective with the Chapter 175 money received for calendar year 2021 in Fiscal Year
158 2022, the city shall use 100 percent of all future Chapter 175 annual distributions to fund the
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159 normal cost of the pension plan. Effective October 1, 2022, the Supplemental benefit will no
160 longer be funded and no new share accounts will be created for any firefighters hired after
161 the effective date; however, any forfeitures of Chapter 175 money within the Supplemental
162 benefit share accounts on and after October 1, 2021 will be reallocated to the members who
163 are actively employed as of September 30, 2021 and have an existing share account balance.
164 These forfeitures will be allocated in accordance with subsection (4) of this section 46-129.
165 There was established, effective January 24, 2017, an additional plan component to provide
166 special benefits in the form of a supplemental retirement, termination, death and disability benefit
167 to be in addition to the benefits provided for in the previous sections of this plan, such benefit to
168 be funded solely and entirely by F.S. ch. 175, premium tax monies for each plan year which are
169 allocated to this supplemental component as provided for in F.S. § 175.351. Effective January 24,
170 2017 and ending with the Chapter 175 money received for calendar year 2020, the city shall
171 we used 100 percent of all fttwe Chapter 175 annual distributions up to the amount received in
172 the 2012 calendar year ($188,967.00) and 50 percent of any future annual amount in excess of the
173 2012 calendar year distribution to fund the normal cost of the pension plan. The remaining 50
174 percent of the Chapter 175 money received prior to the distribution for calendar year 2021
175 in excess of the 2012 calendar year distribution was shall be allocated
176 to this supplemental component ("share plan"), and was shall be fut4 e" allocated to the members
177 and DROP participants as follows:
178 (1) Individual member share accounts. The board shall create individual "member share
179 accounts" for all actively employed plan members and DROP participants and maintain
180 appropriate books and records showing the respective interest of each member or DROP
181 participant hereunder. Each member or DROP participant shall have a member share
182 account for his share of the F.S. ch. 175 tax revenues described above, forfeitures and
183 income and expense adjustments relating thereto. The board shall maintain separate
184 member share accounts, however, the maintenance of separate accounts is for accounting
185 purposes only and a segregation of the assets of the trust fund to each account shall not be
186 required or permitted.
187 (2) Share account funding.
188 a. Individual member share accounts were established as of January 24, 2017 for
189 all members and DROP participants who were actively employed as of January
190 24, 2017. Individual member share accounts shall be credited with an allocation
191 as provided for in the following subsection (3) of any premium tax monies
192 which have been allocated to the share plan for that plan year, beginning with
193 the plan year ending September 30, 2015.
194 b. Any forfeitures as provided in subsection (4), shall be used as part of future
195 allocations to the individual member share accounts in accordance with the
196 formula set forth in subsection (3)a.
197 (3) Allocation of monies to share accounts.
198 a. Allocation of Chapter 175 contributions.
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199 1. Initial allocation. Effective January 24, 2017, the amount of any premium
200 tax monies allocated to the share plan were allocated to individual member
201 share accounts based on their completed months of credited service in
202 proportion to the combined completed months of credited service of all
203 participants.
204 All premium tax monies allocated to the share plan in any subsequent plan
205 year shall be allocated as provided for in this subsection. Available premium
206 tax monies shall be allocated to individual member share accounts at the
207 end of each plan year on September 30 (a "valuation date"). To be eligible
208 for a distribution, an individual member must be employed on September
209 30.
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2. Annual allocations. On each valuation date, each current actively employed
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member of the plan not participating in the DROP, each DROP participant
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and each retiree who retires or DROP participant who has terminated DROP
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participation in the plan year ending on the valuation date (including each
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disability retiree), or beneficiary of a deceased member (not including
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terminated vested persons) who is otherwise eligible for an allocation as of
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the valuation date shall receive a share allocation as follows:
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(i) The total funds subject to allocation on each valuation date shall be
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divided equally among those persons eligible for an allocation and
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allocated to the member share account of those eligible for an
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allocation.
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(ii) Re-employed retirees shall be deemed new employees and shall
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receive an allocation based solely on the credited service in the
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reemployment period.
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b. Allocation of investment gains and losses. On each valuation date, each
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individual member share account shall be adjusted to reflect the net earnings
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or losses resulting from investments during the year. The net earnings or
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losses allocated to the individual member share accounts shall be the same
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percentage which is earned or lost by the total plan investments, including
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realized and unrealized gains or losses, net of brokerage commissions,
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transaction costs and management fees.
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Net earnings or losses are determined as of the last business day of the fiscal
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year, which is the valuation date, and are debited or credited as of such date.
233 For purposes of calculating net earnings or losses on a member's share
234 account pursuant to this subsection, brokerage commissions, transaction
235 costs, and management fees for the immediately preceding fiscal year shall
236 be determined for each year by the investment consultant pursuant to
237 contracts with fund managers as reported in the custodial statement. The
238 investment consultant shall report these annual contractual fees to the board.
239 The investment consultant shall also report the net investment return for
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each manager and the net investment return for the total plan assets.
241 C.
Allocation of costs, fees and expenses. The board of trustees shall pay all
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costs and expenses for the management and operation for the current fiscal
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year and shall set aside as much of the income as it considers advisable as a
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reserve for expenses for the next fiscal year.
245 d.
No right to allocation. The fact of allocation or credit of an allocation to a
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member's share account by the board shall not vest in any member, any
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right, title, or interest in the assets of the trust or in the Chapter 175 tax
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revenues except at the time or times, to the extent, and subject to the terms
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and conditions provided in this section.
250 e.
Members and drop participants shall be provided annual statements setting
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forth their share account balance as of the end of the plan year.
252 (4) Forfeitures. Any member who has less than five years of service credit and who is not
253 otherwise eligible for payment of benefits after termination of employment with the city as
254 provided for in subsection (5) shall forfeit his individual member share account. Forfeited
255 amounts shall be included and used as part of the Chapter 175 tax revenues for future
256 allocations to individual member share accounts on each valuation date in accordance with
257 the formula set forth in subsection (3)a.
258 (5) Eligibility for benefits. Any member (or his beneficiary) or DROP participant who
259 terminates employment as a firefighter with the city or who dies, upon application filed
260 with the board, shall be entitled to be paid the value of his individual member share account,
261 subject to the following criteria:
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a. Retirement benefit.
263 1. A member shall be entitled to 100 percent of the value of his share account
264 upon normal or early retirement pursuant to section 46-106, or if the
265 member enters the DROP, upon termination of employment.
266 2. Such payment shall be made as provided in subsection (6).
267 b. Termination benefit.
268 1. In the event that a member's employment as a firefighter is terminated by
269 reason other than retirement, death or disability, he shall be entitled to
270 receive 100 percent of the value of his share account, but only if he is either
271 partially or totally vested in accordance with section 46-109.
272 2. Such payment shall be made as provided in subsection (6).
273 c. Disability benefit.
274 1. In the event that a member is determined to be eligible for either an in -line
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ORDINANCE NO.2023-003
275 of duty disability benefit pursuant to section 46-108(a) or a not -in -line of
276 duty disability benefit pursuant to section 46-108(c), he shall be entitled to
277 100 percent of the value of his share account.
278 2. Such payment shall be made as provided in subsection (6).
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d. Death benefit.
280 1. In the event that a member or DROP participant dies while actively
281 employed as a firefighter, 100 percent of the value of his member share
282 account shall be paid to his designated beneficiary as provided in section
283 46-107.
284 2. Such payment shall be made as provided in subsection (6).
285 (6) Payment of benefits. If a member or DROP participant terminates employment for any
286 reason or dies and he or his beneficiary is otherwise entitled to receive the balance in the
287 member's share account, the member's share account shall be valued by the plan's actuary
288 on the next valuation date as provided for in subsection (3) above, following termination
289 of employment. Payment of the calculated share account balance shall be payable as soon
290 as administratively practicable following the valuation date, but not later than 150 days
291 following the valuation date and shall be paid in one lump sum payment. No optional forms
292 of payments shall be permitted.
293 (7) Benefits not guaranteed. All benefits payable under this section 46-129 shall be paid only
294 from the assets accounted for in individual member share accounts. Neither the city nor the
295 board shall have any duty or liability to furnish any additional funds, securities or other
296 assets to fund share account benefits. Neither the board nor any trustee shall be liable for
297 the making, retention, or sale of any investment or reinvestment made as herein provided,
298 nor for any loss or diminishment of the member share account balances, except due to his
299 or its own negligence, willful misconduct or lack of good faith. All investments shall be
300 made by the board subject to the restrictions otherwise applicable to fund investments.
301 (8) Notional account. The member share account is a notional account, used only for the
302 purpose of calculation of the share distribution amount. It is not a separate account in the
303 system. There is no change in the system's assets, and there is no distribution available to
304 the member or DROP participant until the member's or DROP participant's termination
305 from employment. The member or DROP participant has no control over the investment
306 of the share account.
307 (9) No employer discretion. The share account benefit is determined pursuant to a specific
308 formula which does not involve employer discretion.
309 (10) Maximum additions. Notwithstanding any other provision of this Section, annual
310 additions under this section shall not exceed the limitations of Section 415(c) of the code
311 pursuant to the provisions of section 46-115(k).
312 (11)IRC limit. The share account distribution, along with other benefits payable from the
313 system, is subject to limitation under Internal Revenue Code Section 415(b).
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314 (12) Use for permissive service purchase. Vested members may use their share account
315 balance to purchase permissive service as defined in sections 46-126 and 46-127 of this
316 system. The transfer of these funds does not convert the share account funds to employee
317 contributions under this system.
318 SECTION 5: CONFLICT
319 All ordinances or parts of ordinances, all City Code sections or parts of City Code sections, and
320 all resolutions or parts of resolutions in conflict with this Ordinance are hereby repealed to the
321 extent of such conflict.
SECTION 6: SEVERABILITY
322 If any portion of this Ordinance is declared invalid, the invalidated portion shall be severed from
323 the remainder of the Ordinance, and the remainder of the Ordinance shall continue in full force
324 and effect as if enacted without the invalidated portion, except in cases where such continued
325 validity of the remainder would clearly and without doubt contradict or frustrate the intent of the
326 Ordinance as a whole.
327 SECTION 7: CODIFICATION
328 The text of Sections 1 through 4 of this Ordinance shall be codified as a part of the Clermont City
329 Code. The codifier is authorized to make editorial changes not effecting the substance of this
330 Ordinance by the substitution of "Article" for "Ordinance", "Section" for "Paragraph", or otherwise
331 to take such editorial license.
SECTION 8: ADMINISTRATIVE CORRECTION OF SCRIVENERS ERROR
332 Regardless of whether such inclusion in the Code as described in Section 5 is accomplished,
333 sections of the Ordinance may be re -numbered or re -lettered and the correction of typographical
334 and/or scrivener's errors which do not affect the intent may be authorized by the City Manager or
335 designee, without need of public hearing, by filing a corrected or re -codified copy of same with
336 the City Clerk.
SECTION 9: PUBLICATION AND EFFECTIVE DATE
337 This Ordinance shall be published as provided by law and it shall become law and shall take effect
338 immediately upon its Second Reading and Final Passage.
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CLE - M, CITY OF CLERMONT
��d ORDINANCE NO.2023-003
PASSED AND ADOPTED by the City Council of the City of Clermont, Lake County,
Florida on this 24th day of January, 2023.
Tim Murry, M yor
Tracy Ackroyd Howe, MMC
City Clerk
LEGAL IN FORM AND VALID AS ADOPTED:
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D �'s City Atto