(A) Participation in the DROP.
(1) Eligibility to participate. In lieu of terminating his employment as a police officer or firefighter, any police officer or firefighter actively employed by the city who is or has been eligible for normal retirement, may elect to participate in the DROP.
(2) Election to participate. A police officer or firefighter's election to participate in the DROP must be made in writing in a time and manner determined by the Board and shall be effective on the first day of the first calendar month following the Board's acceptance of such notification.
(3) Period of participation. No police officer or firefighter shall participate in the DROP for more than sixty (60) months.
(4) Termination of participation.
(a) A police officer or firefighter shall cease DROP participation by
1. terminating employment with the city.
2. participating in the DROP for 60 months.
(b) Upon termination of participation in the DROP, amounts shall cease to be transferred from the Retirement System to the police officer or firefighter DROP Account, and shall be disbursed in the normal manner for retirement benefits. Any amounts remaining in his DROP Account shall be paid to him in accordance with the provisions of division (C) of this section when he terminates employment with the city.
(c) A police officer or firefighter who terminates his participation in the DROP under division (A)(4) of this section shall not be permitted to again become a participant of the Retirement System or DROP.
(5) Effect of DROP Participation on the Retirement System.
(a) A police officer or firefighter's Credited Service and accrued benefit under the Retirement System shall be determined on the date his election to participate in the DROP becomes effective. A police officer or firefighter shall not accrue any additional Credited Service or additional benefits under the Retirement System (except for any benefits provided under any cost of living adjustments in the Retirement System) while he is a participant of the DROP.
(b) No amounts shall be paid to a police officer or firefighter from the Retirement System while a police officer or firefighter is a participant in the DROP. Unless otherwise specified in the Retirement System and/or DROP provisions, if a police officer or firefighter terminates his or her participation in the DROP other than terminating his or her employment with the city, no amounts shall be paid to him or her from the Retirement System until he or she terminates his or her employment with the city.
1. Unless otherwise provided for within the Retirement System or DROP provisions, amounts transferred to the firefighter member DROP Account shall be paid directly to the firefighter member only on or after the earliest date after the quarterly interest posting and declaration of interest, net of fees by the Board for the quarter following the firefighter member's termination of employment with the city. Anything herein to the contrary notwithstanding, upon request of the firefighter member, the Board, based upon performance of the plan during the then-current quarter, may make payment directly to the firefighter member of up to seventy-five percent (75%) of the amount in the firefighter member's DROP Account on or as soon as practical after the firefighter member's termination of employment with the city. The balance, if any, shall be paid directly to the firefighter member after the quarterly interest posting and declaration of interest, net of fees, by the Board for the quarter following the firefighter member's termination of employment with the city. If it is subsequently determined by the Board that the firefighter member has been overpaid, the firefighter member shall forthwith repay the Board the amount of such overpayment, plus interest and the Board may withhold from future benefit payments to the firefighter member the amount of any such overpayment, plus interest.
2. Unless otherwise provided for within the Retirement System or DROP provisions, amounts transferred to the police officer's DROP Account shall be paid directly to the police officer only on or after the earliest date after the quarterly interest posting and declaration of interest, net of fees by the Board for that quarter following the police officer's termination of employment with the city.
(c) Participant's contributions to the Retirement System cease on effective date of DROP participation.
(d) In the event of death of a DROP participant, DROP participation ceases. Retirement benefit is paid according to the form of benefit chosen upon election to participate in the DROP, and Drop Account becomes payable at that time.
(B) Funding.
(1) Establishment of DROP account. A DROP account shall be established for each police officer or firefighter participating in the DROP.
A police officer or firefighter's DROP account shall consist of:
(a) amounts transferred to the DROP under division (B)(2), and
(b) investment earnings or losses on those amounts.
Such amounts will not be segregated or invested separate from the System, but accounted for separately.
(2) Transfers from retirement system.
(a) As of the first day of each month of a police officer or firefighter's period of participation in the DROP, the monthly retirement benefit he would have received under the Retirement System had he terminated his employment as a police officer or firefighter and elected to receive monthly benefit payments there under shall be transferred to his DROP Account. A police officer or firefighter's period of participation in the DROP shall be determined in accordance with the provisions of division (A) of this section, but in no event shall it continue past the date he terminates employment with the city.
(b) Amounts credited to a police officer or firefighter's DROP Account under division (B)(2)(a) of this section shall be credited monthly.
(c) Investment earnings or losses shall be credited or debited quarterly to a police officer or firefighter's DROP Account with the quarterly net investment return, net of money manager fees and other expenses, determined by the Board on the assets of the Retirement System. Individuals entering the DROP during a quarter would have investment earnings or losses, net of money manager fees and other expenses, determined by the Board on the assets of the Retirement System for the specific number of months the funds were considered in the DROP during that quarter; however, interest would be posted at quarter-end.
(C) Distribution of DROP Account Funds on termination of employment.
(1) Eligibility for benefits. A police officer or firefighter shall receive the balance in his DROP Account in accordance with the provisions of this section upon his termination of employment as a police officer or firefighter. Except as provided in division (C)(4) of this section, no amounts shall be paid to a police officer or firefighter from the DROP prior to his termination of employment as a police officer or firefighter. Should the police officer or firefighter elect any combination of the forms of distribution, the rollover and/or lump sum portions of the DROP account shall be deducted from the balance prior to the calculation of annual installment amount.
(2) Forms of distribution.
(a) Annual installments. The amount of the annual installment shall be fixed upon termination from employment as a police officer or firefighter, and shall be no less than 10% (1/10th) or $10,000, whichever is greater, of the balance of the member's DROP account at the time of termination. Annual installments shall be distributed each December and continue until either the member's DROP account is depleted, or the member chooses a Rollover or Lump Sum distribution, as listed below.
(b) Rollover. The balance or any portion of the balance of a member's DROP account may be rolled over to another qualified retirement plan.
(c) Lump sum. The balance or any portion of the balance of a member's DROP account may be paid directly to the member.
(d) In the event that a police officer or firefighter dies before total distribution of his DROP account, the balance in his DROP account shall be paid in an immediate lump sum to his beneficiary.
(3) Date of payment of distribution.
(a) Distribution of a police officer or firefighter's DROP Account shall begin as soon as administratively practicable following the police officer or firefighter's termination of employment as a police officer or firefighter in accordance with divisions (A)(5)(b) and (C)(2)(a) through (d) of this section.
(b) Any amounts in the DROP Account of a police officer or firefighter who terminated his participation in the DROP in accordance with division (A)(4)(a)1. of this section by terminating his employment as a police officer or firefighter shall continue to be invested as part of the DROP's funds and shall be credited or debited with the net investment on those funds in accordance with division (B)(2)(c) of this section until such amounts are distributed to the police officer or firefighter or his beneficiary.
(4) Proof of death and right of beneficiary or other person. The Board may require and rely upon such proof of death and evidence of the right of any beneficiary or any other person to receive the value of a deceased police officer or firefighter's DROP Account as the Board may deem proper and its determination of the right of that beneficiary or other person to receive payment shall be conclusive.
(D) Administration of the DROP.
(1) Board responsibilities. The general administration of the DROP, the responsibility for carrying out the provisions of the DROP and the responsibility for overseeing the investment of the DROP's assets shall be placed with the Board. However, DROP assets will not be segregated or invested separate from the system's assets. The Board may adopt such administrative procedures and regulations as it deems desirable for the conduct of its affairs; may authorize one or more of its number or any agent to execute or deliver any instrument or make any payment on its behalf; may retain counsel, employ agents and provide for such clerical, accounting, actuarial and consulting services as it may require in carrying out the provisions of the DROP; and may allocate among its members or delegate to other persons all or such portion of its duties under the DROP, other than those granted to the Board as a trustee under any trust agreement adopted for use in implementing the DROP, as it, in its sole discretion shall decide.
(2) Individual accounts, records, and reports. The Board shall maintain, or cause to be maintained, records showing the operation and condition of the DROP, including records showing the individual balances in each police officer or firefighter's DROP account, and the Board shall keep, or cause to be kept, in convenient form such data as may be necessary for the valuation of the assets and liabilities of the DROP. The Board shall prepare or cause to be prepared and distributed to each police officer or firefighter participating in the DROP and shall file with the appropriate governmental agencies, all necessary descriptions, reports, information returns, and data required to be distributed or filed for the DROP pursuant to the Internal Revenue Service Code, the Employee Retirement Income Security Act and any other applicable laws.
(3) Establishment of rules. Subject to the limitations of the DROP, the Board from time to time shall establish rules for the administration of the DROP and the transaction of its business. The Board shall have discretionary authority to construe and interpret the DROP (including but not limited to determination of an individual's eligibility for DROP participation, the right and amount of any benefit payable under the DROP and the date on which any individual ceases to be a participant in the DROP). The determination of the Board as to the interpretation of the DROP or its determination of any disputed question shall be conclusive and final to the extent permitted by applicable law.
(4) Limitation of liability.
(a) The members of the Board shall not incur any liability individually or on behalf of anyother individuals for any act or failure to act, made in good faith in relation to the DROP or the funds of the DROP.
(b) Neither the Board nor any member of the Board shall be responsible for any reports furnished by any expert retained or employed by the Board, but they shall be entitled to rely thereon as well as on certificates furnished by an accountant or an actuary, and on all opinions of counsel. The Board shall be fully protected with respect to any action taken or suffered by it in good faith in reliance upon such expert, accountant, actuary or counsel, and all actions taken or suffered in such reliance shall be conclusive upon any person with any interest in the DROP.
(E) General provisions.
(1) Amendment of DROP. The Board reserves the right at any time and from time to time, and retroactively if deemed necessary and if permissible, to amend in whole or in part any or all of the provisions of the DROP. However, except as otherwise provided by law, no amendment shall make it possible for any part of the DROP's funds to be used for, or diverted to, purposes other than for the exclusive benefit of persons entitled to benefits under the DROP. No amendment to this section shall be made which has the effect of decreasing the balance of the DROP account of any police officer or firefighter.
(2) Facility of payment. If a police officer or firefighter or other person entitled to a benefit under the DROP has a duly appointed legal representative, payment shall be made to such legal representative in complete discharge of the liabilities of the DROP for that benefit.
(3) Information. Each police officer or firefighter, beneficiary or other person entitled to a benefit, before any benefit shall be payable to him or on his account under the DROP, shall file with the Board the information that it shall require to establish his rights and benefits under the DROP.
(4) Written elections and notifications.
(a) Any elections, notifications or designations made by a police officer or firefighter pursuant to the provisions of the DROP shall be made in writing and filed with the Board in a time and manner determined by the Board under rules uniformly applicable to all employees similarly situated. The Board reserves the right to change from time to time the time and manner for making notifications, elections or designations by police officers or firefighters under the DROP if it determines after due deliberations that such action is justified in that it improves the administration of the DROP. In the event of a conflict between the provisions for making and election, notification or designation set forth in the DROP and such new administrative procedures, those new administrative procedures shall prevail.
(b) Each police officer or firefighter or former police officer or firefighter who has a DROP account shall be responsible for furnishing the Board with his current address, along with any financial institution information required by the Board to facilitate direct transfers of funds. Any notice required to be given to a police officer or firefighter or former police officer or firefighter hereunder shall be deemed given if directed to him at the last such address given to the Board and mailed by registered or certified United States mail. If any such correspondence or funds transfer is returned, future disbursement of funds shall be suspended until such time as the police officer or firefighter or former police officer or firefighter notifies the Board of his address and financial institution information.
(5) Benefits not guaranteed. All benefits payable under the DROP shall be paid only from the assets of the DROP and neither the city nor the Board shall have any duty or liability to furnish the DROP with any funds, securities or other assets except to the extent required by applicable law. A positive or negative quarterly earnings may occur throughout DROP participation and the distribution period. The principal balance could be reduced due to lowered market investment returns while in the DROP.
(6) Administrative expenses. The Board may pay the reasonable and necessary expense of administering the DROP, including, but not limited to, expenses incurred in connection with investing theDROP's assets, from the funds of the system to the extent that they are not otherwise paid by the city.
(7) Construction.
(a) The DROP shall be construed, regulated and administered under the laws of Florida, except where other applicable law controls.
(b) The masculine pronoun shall mean the feminine wherever appropriate.
(c) The titles and heading of the articles and sections in this Plan are for convenience only. In the case of ambiguity or inconsistency, the text rather than the titles or headings shall control.
(8) Forfeiture of retirement benefits. Nothing in this section shall be construed to remove DROP participants from the application of any forfeiture provisions applicable to the System. DROP participants shall be subject to the forfeiture of all retirement benefits, including DROP benefits.
(9) Code Section 414(k) and Code Section 415. To the extent that the DROP is treated as a defined contribution plan under Section 414(k) of the Code, the amounts transferred to the participant's DROP account under section 55.28(B)(2) above and any other annual additions to the participant's DROP account shall not exceed the applicable limit under Section 415(c) of the Code. For purposes of the application of the applicable limit under Section 415(c) of the Internal Revenue Code, the term "participant's compensation" shall mean the participant's compensation and earnings from the City and the term "annual additions" shall have the meaning given under Section 415(c)(2) and Income Tax Regulations Section 1.415(c)-1. To the extent that the annual additions to a participant's DROP account for any year exceed the applicable limit under Section 415(c), the City shall correct such excess contribution in accordance with IRS Revenue Procedure 2008-50 and any successor procedure issued by the IRS.
(Ord. 2000-48, passed 9-21-00; Am. Ord. 2001-64, passed 10-18- 01; Am. Ord. 2006-113, passed 11-2-2006; Am. Ord. 2007-66, passed 9-6-07; Am. Ord. 2009-18, passed 5-7-09; Am. Ord. 2015-24, passed 5-21-15)