Loading...
HomeMy WebLinkAbout06586ORDINANCE NO. 6586 AN ORDINANCE AMENDING CHAPTER 2 OF TITLE II OF THE PUEBLO MUNICIPAL CODE RELATING TO FIREMEN'S PENSIONS AND CREATING AN ADDITIONAL PENSION BENEFIT FOR QUALIFYING MEMBERS BE IT ORDAINED BY THE CITY COUNCIL OF PUEBLO, that: (Brackets indicate matter being deleted; underscoring indicates new matter being added) SECTION 1. Chapter 2 of Title II of the Pueblo Municipal Code, as amended, is hereby amended by the addition of a new section 2 -2 -19 thereto, to read as follows: Sec. 2 -2 -19 Deferred Retirement Option Proqram - Benefits (a) This Section adds, effective prospectively after October 25, 2000 or the date upon which the City receives a Favorable Determination Letter from the Internal Revenue Service with respect to the changes made by this section to the retirement plan for thos uniformed employees of the City Fire Department hired prior to April 8, 1978 (hereinafte referred to as the "plan "), whichever is later, as part of the plan, anoptional benefit known as the Deferred Retirement Option Proqram. The provisions of this Section are applicable only with respect to those otherwise eligible members of the plan whose election to participate in the Deferred Retirement Option Program occurs on or after the effective date of this section. An "eligibl member" is any member hired as a City firemen prior to April 8, 1978 who elected to b covered by the plan, and who has met all of the requirements of this Chapter and sectio 31- 30.5 -602, C.R.S. for a pension but has not yet submitted an application for retirement t the Board which has been approved by the Board. (c) The provisions of this Section may be cited as the "DROP Program" o "DROP." The purpose of the DROP Program is to grant additional benefits to the members. The DROP Program allows an eligible member to accrue into a special membe account referred to as the member's DROP account, for a period not to exceed five (5 years the monthly pension benefits the member would otherwise be eligible to receive upon retirement (including periodic pension increases) without the member actually having retired. During this period, referred to as the period of participation in the DROP, th employee would not actually be retired and would therefore also be eligible to directly receive the full compensation and benefits, including periodic pay increases, payable to members who are active employees of the City. Additionally, during the member' participation in the DROP the statutorily required member contributions to the plan woul not accrue generally to the plan, but instead would be earmarked and accrue to the participating member's DROP account. At the end of the period of participation in th DROP the member shall cease all employment with the City, would begin to directly receive the monthly pension payments and, in addition, would be entitled to receive a distribution of all amounts credited to the member's DROP account and net investmen earnings thereon in accordance with one of the distribution methods specified in paragraph (m) of this Section 2 -2 -19. Participation in the DROP Program is subject to all of th requirements and limitations set forth in this Section (e) An eligible member may participate in the DROP Program only once (f ) The duration of an eligible member's participation in the DROP Program shall not exceed a total of five years. As a condition precedent to participation in th DROP, the member shall execute in multiple original counterparts an irrevocable agreement with the City which Agreement shall among other items clearly and unequivocally state that the member must retire and cease all employment with the City n later than the fifth anniversary of the member's participation in the DROP and that th member shall also acknowledge that no disbursement of any DROP account funds can occur absent the retirement or death of the member. One signed counterpart of th agreement shall be retained by the City, one counterpart shall be provided to the Board o the Colorado Fire and Police Pension Association (FPPA) and one counterpart shall be provided to the participating member. LM If the member's participation in the DROP is interrupted by military service reduction in work force, or mob related disability, then upon reestablishment of membership and provided that the member has not received any distribution from his or her DROP account the member shall be immediately eligible for resumption of participation in the DROP for the balance of the five year maximum. Other than the above - described types o interruptions of participation, the five year period shall continue to run in all other cases Upon commencement of the member's participation in the DROP the member shall remain an active member. Nevertheless, the member shall thereafter ear no additional service credit or additional benefits under the plan and both years of service and the rank escalator provisions described in section 2 -2 -11 of this Chapter shall be established and calculated by utilizing the years of credited service accrued and rank held by the member at the time of the member's commencement of participation in the DRO Program. Upon commencement of the member's participation in the DROP the retirement benefit provided in section 31- 30.5 -602 C.R.S. or section 2 -2 -18 of this Chapter calculated based upon the member's years of service and average final compensation as o commencement of participation in the DROP Program shall be paid into the member' individual DROP account by FPPA. The member's required contribution to the plan shal also be credited by FPPA to the member's individual DROP account. Effective upon commencement of the member's participation in the DROP Program no further employe contributions shall be paid by the City as a match or otherwise on account of the member' employment during the member's participation in the DROP The DROP assets shall continue to be commingled for investment purposes as part of the fire and police members' benefit fund and shall be credited with ne investment earnings and losses at the same rate as other assets of the fund. FPPA shal be authorized to charge each DROP account a fee for the administration of the DROP account. The Board is authorized to adopt rules and regulations governing the DROP provided, however, that such rules and regulations shall not modify the requirements of thi section. The DROP account shall not be subject to any fees or charges of any kind for any purpose, except as otherwise provided in this Section (m) (1) A participant in the DROP who terminates employment or reaches the five -year limit for participation shall become a retiree and shall select a distribution method for the retiree's individual DROP account from amona the followina distribution methods: a. Deferral of any payment(s) from the individual DROP account until a specified date if a participant shall select one of the following distribution methods. However, all distributions must start no late than the year in which the participant attains the age of 70'/2 b. A lump sum distribution of the entire individual DROP accoun balance. C. Periodic monthly payments with a designated amount until the balance of the individual DROP account has been entirelv distributed. d. Periodic pavments for a desianated period of vears. The FPPA will calculate the dollar amount of the participant's periodic payment, so that the entire balance in the participant's individual DROP accoun will have been distributed to the participant by the end of the period selected by the participant. This amount will be recalculated annually during April. e. Initial minimum reauired distribution. The FPPA will calculate the dollar amount of the participant's periodic payment based on the participant's current individual DROP account balance. The minimum distribution is based on the participant's life expectancy (and the life expectancy of his /her beneficiary, if any) Combination of lump sum and periodic gavments by desianatina an initial lump sum payment of a specified amount and a balance to be paid in a specified number of monthly payments of a specified dolla amount until the balance of the individual DROP account has been entirely distributed to the participant. If no selection is made by the retiree within 30 days of retirement, the lump sum paymen method shall be utilized. 2) Reaardless of the form of the pavment the participant chooses, the minimum distribution amount will be determined by FPPA and made in accordance with Internal Revenue Code ( "Code ") Section 401(a)(9) and the regulations thereunder, including minimum distribution incidental death benefit requirement of income tax regulation Section 1.401(A)(9) -2. The minimum distribution is recalculated by the FPPA annually on the basis of the life expectancy of the participant and the participant's beneficiary, i applicable If elected in writing before the required beginning date under Code Section 401(A)(9) by the participant and /or the participant's spouse, if applicable, the expectancy o the participant and /or participant's spouse shall be recalculated annually (n) If the member dies during the period of the member's participation in the DROP and the member's designated beneficiary is the member's surviving spouse to whom the member was legally married at the time of the member's death the member' designated beneficiary shall select a distribution method for the retiree's individual DROP account from among the distribution methods specified in paragraph (m) of thisSection 2 -2- 19. If no selection is made by the designated beneficiary within 30 days of death of th member, the lump sum payment method shall be utilized (o) If the member dies during the period of the member's participation in the DROP and the member's designated beneficiary is someone other than the member's surviving spouse to whom the member was legally married at the time of the member' death, the designated beneficiary shall receive a lump sum payment equal to the member' individual DROP account balance plus net investment earnings and losses (p) If the member dies during the period of the member's participation in the DROP and the designated beneficiary has not survived the member, the member's estate shall receive a lump sum payment equal to the member's individual DROP account balance plus net investment earnings and losses. (q) Except for assignments for child support purposes as provided for in sections 14 -10- 118(1) and 14 -14 -107, C.R.S., as they existed prior to July 1 1996 fo income assignments for child support purposes pursuant to section 14 -14 -111.5 C.R.S. fo writs of garnishment that are the result of a Judgment taken for arrearages for child suppo or for child support debt, and for payments made in compliance with a properly executed court order approving a written agreement entered into pursuant to section 14 -10- 113(6) C.R.S., no portion of an individual DROP account, before or after their order for distributio by the Board to the persons entitled thereto, shall be held, seized taken subjected to detained, or levied on by virtue of any attachment, execution, injunction writ interlocutory or other order or decree, or process or proceeding whatsoever issued out of or by any court of this state for the payment or satisfaction, in whole or in part, of any debt damage claim demand, or judgment against the City or the beneficiary of the DROP account SECTION 2 This Ordinance shall become effective on October 25, 2000 or the date upon which the City receives a Favorable Determination Letter from the Internal Revenue Service with respect to the modifications made by this Ordinance to the Pueblo Firemen's Pension Fund, whichever is later; provided, however, that notwithstanding the foregoing, this Ordinance shall not become effective (a) unless approved by sixty -five percent of the active members of the Pueblo Firemen's Pension Fund and (b) unless the Board of Directors of the Fire and Police Pension Association established pursuant to section 31- 31- 201(1), C.R.S. (Vol. 9, 1999) shall decide to permit said modifications pursuant to Section 31- 30.5- 210(2), C.R.S. (Vol. 9, 1999). For such purpose, on its effective date, this Ordinance shall constitute and be construed to be a request by the City to so modify the Pueblo Firemen's Pension Fund. INTRODUCED September 11, 2000 BY Al Gurule Councilperson APPROVED: (I`6r(l�- President of the Council ATTEST: PASSED AND APPROVED: September 25, 2000