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2014 Miami Shores Police Summary Plan with Descriptions MIAMI SHORES VILLAGE POLICE OFFICERS’ RETIREMENT SYSTEM SUMMARY PLAN DESCRIPTION Prepared July 2014 1 INTRODUCTION TO YOUR PLAN Miami Shores Village established a defined benefit pension plan to provide eligible police officers with retirement and related benefits. This Summary Plan Description is a brief description of that Plan and your rights, obligations and benefits under it. This Summary Plan Description is not meant to interpret, extend or change the provisions of the Plan in any way. The provisions of the Plan may only be determined accurately by reading the actual Plan document. A copy of the Plan is on file at the Employer's office and may be read by you, your beneficiaries or your legal representatives at any reasonable time. If you have any questions regarding either the Plan or this Summary Plan Description, you should ask the Plan's Administrator. In the event of any discrepancy between this Summary Plan Description and the actual provisions of the Plan, the Plan shall govern. 2 GENERAL INFORMATION ABOUT YOUR PLAN There is certain general information you may need to know about the Plan. This general information is summarized below. Name of Plan Miami Shores Village Police Officers’ Retirement System Employer Miami Shores Village Plan Administrator Board of Trustees Miami Shores Village Police Officers’ Retirement System 10050 Northeast 2nd Avenue Miami Shores, Florida 33138-2382 Trustee Plan Administrator Designated Agent for Service of Legal Process Board of Trustees Type of Administration The Plan Administrator is responsible for the overall administration of the Plan. It has discretionary authority to construe the terms of the Plan and make determinations on questions which may affect your eligibility for benefits. The Plan Administrator may also retain the services of attorneys, accountants, actuaries, investment advisors and other professionals. Plan Year Each 12 month period beginning on October 1st and ending on September 30th. The Plan's fiscal records are maintained on this basis. 3 Relevant Provisions of Local and State Laws The Plan is set forth in Chapter 18 of the Village’s Code of Ordinances. The most recent amendment to the Plan which is reflected in this Summary Plan Description is Ordinance No. 658-06. The Plan is also governed by certain provisions of Part VII, Chapter 112, Florida Statutes (F.S.), Chapter 185 F.S., and various federal laws. Relevant Provision of Collective Bargaining Agreements Certain employees covered by the Plan are members of the Police Benevolent Association. The current collective bargaining agreement between the unit and the Employer covers the period from October 1, 2007 through September 30, 2010. Custodian The custodian of the Plan is responsible for the safe-keeping of securities owned by the Pension Fund. At the direction of the Plan Administrator, the custodian also pays benefits to eligible persons and pays expenses incurred by the Plan. The custodian is: Salem Trust Company Tampa, Florida Investment Manager(s) The investment manager is responsible for selecting the securities to be bought and sold by the Pension Fund, in accordance with guidelines established by the Plan Administrator. The investment managers are: The Boston Company Manning & Napier Boston, MA Dublin, OH Cutwater Wells Fargo Armonk, NY Charlotte, NC Heartland Milwaukee, WI 4 Member You are a Member of the Plan if you fulfill the prescribed eligibility requirements (see Eligibility and Credited Service section). Beneficiary Your Beneficiary is each person designated by you to the Plan Administrator to receive any payments that may become payable by the Plan upon your death. You should designate a Beneficiary when you become a Member of the Plan. At any time prior to retirement you may change your Beneficiary designation upon written notification to the Plan Administrator. 5 CONTRIBUTIONS TO THE PLAN Benefits of the Plan are financed by contributions that are paid into the pension fund and by investment earnings generated by investment of the pension fund. Contributions to the fund are made by: You Your contribution rate is 9% of your Covered Salary (see later page for definition of Covered Salary.) Your contribution will cease upon your retirement, death or employment termination. Interest is credited to your contributions each September 30th at a rate of 3%. State of Florida Monies are paid each year by the State pursuant to Chapter 185, F.S. Said monies are used for the benefit of police officers. Your Employer Miami Shores Village must contribute an amount determined by the Plan's actuary to be sufficient, along with your contributions and the State contribution, to fund systematically the benefits under the Plan. The Village’s contributions will vary depending upon the experience of the Plan. 6 ELIGIBILITY AND CREDITED SERVICE Eligibility If you are a full-time Police Officer, you will become a Member on your date of employment. Credited Service Credited Service is used to compute the amount of pension benefit when you retire, to determine whether you are eligible for certain benefits and to determine whether you are vested. Your Credited Service is your total number of years and fractional parts of years of actual service with the Employer. Vacations and other paid leaves of absence are included in Credited Service. Years or parts of years when you were not employed by the Employer as a police officer are not included. Break in Service If you terminate employment but return to work for the Employer within five years of your termination, your previous service will be included in Credited Service as long as you left your contributions in the pension fund. Buy Back of Previous Service If you terminate your employment, take a refund of your contributions, and are then subsequently reemployed by the Employer, you will be permitted to buy back your previous Credited Service under the following conditions: 1. you must pay into the fund an amount equal to the sum of the amount you withdrew from the fund when you terminated employment, plus interest from the date of withdrawal to the date of repayment; and 2. payment must be made within 90 days of reemployment. Covered Salary Wages paid by the Village on regular payroll for services performed. 7 Military Service If you leave the employment of the Employer to enter the military, you will receive credit for the time you spent in the military provided you are entitled to re-employment under the Uniformed Services and Employment and Re-employment Rights Act and you return to work as a police officer within one year from the date of your release. The maximum credit for military service is five years. 8 RETIREMENT DATES Normal Retirement Date Your Normal Retirement Date is the earliest date you may begin to receive unreduced retirement benefits. Your Normal Retirement Date is the date you complete 25 years of Credited Service. Early Retirement Date Your Early Retirement Date is the date you reach age 55 and complete 15 years of Credited Service. You may retire at any time following this date with reduced benefits (as described later). Late Retirement Date You may continue to work past your Normal Retirement Date. The date you actually stop working will be your Late Retirement Date. 9 RETIREMENT BENEFITS Normal Retirement Benefit The monthly benefit that you will receive if you continue employment to your Normal Retirement Date is your Normal Retirement Benefit. The amount of your Normal Retirement Benefit is based on the following factors: 1. Your Covered Salary - this is the amount of your compensation payable on a regular payroll for personal services performed. 2. Your Average Monthly Salary - this is the average of your Covered Salary during the three year period within your last ten years of employment that produces the highest average. 3. Your years of Credited Service at your Normal Retirement Date. The calculation of your Normal Retirement Benefit is as follows: 2.91% of your Average Monthly Salary multiplied by your first 25 years of Credited Service. However, as a minimum, the benefit will not be less than 2% of Average Monthly Salary multiplied by your total Credited Service. As an example, if your Average Monthly Salary at your Normal Retirement Date is $5,000 and your Credited Service is 30 years, then the benefit would be the maximum of the following: 2.91% x $5,000 x 25 years = $ 3,637.50 or 2.00% x $5,000 x 30 years = $ 3,000.00 In this case the benefit is $ 3,637.50. The retirement benefit is paid to you for the rest of your life in accordance with the Normal Form of Benefit Payment as described later (however, see the sections on Death Benefits After Retirement and Election of Optional Forms of Benefit Payments). Your benefits from this Plan are paid in addition to any benefits you may receive from Social Security. 10 Accrued Benefit The portion of your Normal Retirement Benefit that you have earned at any point in time is called your Accrued Benefit. Your Accrued Benefit is computed in the same way as the Normal Retirement Benefit, except you use your present Average Monthly Salary and Credited Service in the calculation. The Accrued Benefit is a monthly amount which starts on your Normal Retirement Date. Early Retirement Benefit If you decide to retire early, you may receive your Early Retirement Benefit immediately or on a deferred basis. 1. A deferred Early Retirement Benefit means a benefit begins at age 62 and is paid for the rest of your life. The benefit is equal to your Accrued Benefit. 2. An immediate Early Retirement Benefit means a benefit begins on your Early Retirement Date and is paid for the rest of your life. The benefit is equal to your Accrued Benefit but reduced for the number of months by which the starting date of the benefit precedes age 62. The benefit is actuarially reduced to take into account the younger age and earlier commencement of benefit payments. The following table shows how much your benefit will be reduced if payments begin before your Normal Retirement Date: Age at Early Retirement Percentage Reduction 61 60 59 58 57 56 55 10.19% 19.19 27.16 34.23 40.52 46.13 51.15 11 Late Retirement Benefit The amount of your monthly Late Retirement Benefit is calculated and paid in the same way as the Normal Retirement Benefit. However, your Average Monthly Salary and Credited Service as of your actual retirement date are used in the calculation. Deferred Retirement Option Plan (DROP) If you have completed 25 years of Credited Service, but less than 30 years, you are eligible to enter the DROP Plan. Election into the DROP Plan is voluntary, but it is irrevocable once DROP payments begin. If you enter the DROP Plan, your contributions will stop, you will cease to accrue a benefit in the Plan, you will no longer be eligible for disability or pre-retirement death benefits, and you will never have the right to be a contributing member of the Plan again. Your Credited Service and Average Monthly Salary as of the first date of participation in the DROP Plan will be used to calculate your retirement benefit. If you enter the DROP Plan, the monthly benefit that you would have received if you had retired on your election date will be paid into a DROP account. This account will be debited or credited quarterly at a rate equal to the actual net rate of investment return realized by the Plan for that quarter. You may participate in the DROP Plan until you have a total of 30 years of service. Upon retirement, the balance in your DROP account will become payable. You will have the following options of payment: 1. A single lump sum payment 2. Equal periodic payments Should you pass away during your participation in the DROP Plan, your Beneficiary receives a single lump sum payment equal to the balance of your DROP account. DROP payments to your Beneficiary will be in addition to any retirement benefits payable by the Plan. 12 DISABILITY RETIREMENT Service Incurred Disability The amount of your benefit due to a service incurred disability is equal to your accrued pension benefit, but will not be less than 42% of your Average Monthly Salary. There is no minimum service requirement to be eligible for this service incurred disability benefit. Non-Service Incurred Disability The amount of your benefit due to a non-service incurred disability is equal to your accrued pension benefit, but will not be less than 25% of your Average Monthly Salary. You must have at least ten years of Credited Service to be eligible for this non-service incurred disability benefit. Disability benefits are payable for life, but no less than ten years. However, they can be converted to any one of the Optional Forms of Benefits described later. The benefit will be reduced to the extent that the disability benefit plus workers compensation exceeds the final average salary 13 SURVIVOR BENEFITS Before You Retire If you die before you are eligible for Early or Normal Retirement, your Beneficiary will receive a refund of your accumulated contributions with interest. If you die after you are eligible for Early or Normal Retirement but before you actually retire, your Beneficiary will receive the same benefit that they would have received if you had retired and chosen the 100% Joint and Survivor Option on the day before your death. After You Retire If you were receiving a form of retirement payment which provided for a survivor's benefit to be paid after your death, your Beneficiary will receive payments following your death. A later page describes the various forms of retirement payments. 14 VESTED RETIREMENT BENEFIT If you terminate employment, other than by reason of retirement, disability or death, you may be entitled to a deferred Vested Retirement Benefit. This benefit is equal to your Accrued Benefit on your termination date multiplied by your vested interest. The following chart shows your vested interest in your Accrued Benefit. Vesting Schedule Completed Years of Credited Service Vested Interest Less than 10 10 or more 0% 100 If you become eligible for Early or Normal Retirement, then you are automatically 100% vested regardless of length of service. The vested benefit is payable at what would have been your Normal Retirement Date if you had continued full-time employment with the Employer, or a reduced benefit may be payable on or after your Early Retirement Date if you have at least 15 years of Credited Service when you terminate. If you terminate employment with less than ten years of Credited Service, you will receive a refund of your accumulated contributions with interest. 15 FORMS OF BENEFIT PAYMENTS Normal Form of Benefit Payment Unless you elect otherwise before retirement, your pension is payable as a single life annuity. This is a series of monthly payments for your life, ceasing upon your death. On each October 1st, retired members shall receive an annual Cost-of-Living Adjustment of 1.5%. Election of Optional Forms of Benefit Payments You have the right at any time before your actual retirement date to elect not to have your retirement benefit paid in the Normal Form. You may choose among the options described below and revoke any such elections and make a new election at any time before actual retirement. You must make such an election by written request to the Plan Administrator and such an election shall be subject to the approval of the Plan Administrator. This election also applies to disability retirees and terminated members who are eligible for payment of deferred Vested Retirement Benefits. The options available are as follows: 1. Option 1 - Joint and Last Survivor Annuity You may elect to receive a decreased monthly retirement benefit during your lifetime and have such decreased retirement benefit (or a designated percent thereof - 100%, 75%, 66 2/3% or 50%) continued after your death to and during the lifetime of your Beneficiary. 2. Option 2 - Ten Year Certain and Life Thereafter Annuity You may elect to receive a decreased retirement benefit with 120 monthly payments guaranteed. If you die before receiving 120 payments (ten years), the payments will continue until a total of 120 payments have been made. If you live longer than ten years, payments are continued for the rest of your life, ceasing upon your death. 3. Option 3 - Social Security Option If you retire before being eligible for Social Security benefits, you may elect this option. You may elect to receive a larger pension up to the date you begin receiving Social Security benefits. Your pension benefits may be reduced or terminated after Social Security payments begin. The amount of reduction shall be actuarially determined. 16 AMENDMENT OR TERMINATION OF THE PLAN The Plan may be amended or terminated at any time by the Employer. If the Plan was terminated, you would immediately become fully vested in the benefit you had earned to date. All of the assets of the Plan would be allocated to the Members according to certain classes of priority. Only after all accrued benefits have been paid and any other liabilities have been satisfied could any remaining money be returned to the Employer. 17 IMPORTANT NOTICE There are certain circumstances which may result in the disqualification, ineligibility, denial, loss, forfeiture, suspension or deferral of your benefits in this Plan. The following is a list of these circumstances: 1. If you terminate employment before Early or Normal Retirement Date and you do not have enough Credited Service to have earned a vested interest, no benefits will be payable except a return of your accumulated contributions with interest. 2. If you die before eligibility for Early or Normal Retirement, no benefits will be payable except for a return of your accumulated contributions with interest. 3. No credit is allowed either for benefit accrual or vesting purposes for any period in which you are not considered a full-time employee. 4. Your retirement benefit will not be payable until your actual retirement date, even if you continue to work beyond the Normal Retirement Date (unless you enter the DROP). 5. In the event that this Plan terminates and the available Plan assets are less than the value of all Accrued Benefits, then your Accrued Benefit may be reduced. 6. Your Accrued Benefit may be forfeited if you are convicted of certain felonies as provided by State law (Chapter 112.3173 F.S.) or if you acquire benefits in an improper manner as provided by Chapter 185.185 F.S. 7. Payment of your benefits may be subject to an income deduction order made pursuant to a state domestic relations law. 18 YOUR RESPONSIBILITIES 1. Retain this Summary Plan Description with your other important papers for later reference or for replacement by updated versions and supplemental notices, if any. 2. Upon completing eligibility requirements, sign a Membership Form, including a Beneficiary designation. 3. Keep your Beneficiary designation form updated to express your wishes. 4. If you terminate employment, check to see if you are entitled to a Vested Retirement Benefit and the date payable. 5. If you should terminate employment with rights to a deferred Vested Retirement Benefit, then, shortly before the date on which it is to begin, you should contact and notify the Employer to begin such payments. 6. Upon your retirement under Early or Normal Retirement, complete the form necessary to indicate which Optional Form of Benefit you desire. 19 CLAIMS AND PROCEDURES Claims for benefits under the Plan must be filed in writing with the Plan Administrator. If you are eligible for any benefits from this Plan, you will be provided with a notification form showing the amount of your benefit and options, if any, and the earliest date on which such benefit is payable. Your request for Plan benefits shall be considered a claim for Plan benefits, and it will be subject to a full and fair review. If your claim is wholly or partially denied, the Plan Administrator shall furnish you with a written notice of its denial. This written notice will state the Plan Administrator's findings and conclusions. If your claim has been denied, and you wish to submit your claim for review, you may file with the Plan Administrator a request for rehearing and review by the Plan Administrator. As soon as practicable after the Plan Administrator receives your request for a rehearing, the Plan Administrator will meet. You have the right to be present at this meeting with legal counsel, if you desire. You will be allowed to submit any evidence in support of your claim. The Plan Administrator's decision on your claim for review shall be communicated to you in writing and shall include specific references to the pertinent Plan provisions on which the decision was based. If the Plan Administrator's decision on review is not furnished to you within the time limitations described above, your claim shall be deemed denied on review. 20 PERTINENT ACTUARIAL INFORMATION As of October 1 2012 2011 Number of Members of the Plan Active Employees Those Receiving or Due to Receive Benefits Annual Payroll of Active Members Annual Rate of Benefits in Pay Status Entry Age Normal Actuarial Accrued Liability Net Assets Available for Benefits (Actuarial Value) Unfunded Actuarial Accrued Liability Required Contribution to be Made to the Plan Over and Above Contributions by Members of the Plan Required Contribution as % of Payroll of Active Members Required Contribution to be Paid During Year Ending 32 22 $2,541,774 860,789 21,643,291 14,296,817 7,346,474 1,237,354 48.68% 9/30/2014 32 22 $2,484,518 848,067 20,341,716 13,516,192 6,825,524 1,220,259 49.11% 9/30/2013 21 Reconciliation of Plan Assets Item 2012 2011 A.Market Value of Assets at Beginning of Year 12,128,893$ 11,903,786$ B.Revenues and Expenditures 1.Contributions a.Employee Contributions 214,013$ 205,997$ b.Employer Contributions 940,000 951,650 c.State Contributions 158,758 161,570 d.Other Income - - e.Total 1,312,771$ 1,319,217$ 2.Investment Income a.Interest, Dividends, and Other Income 303,833$ 297,667$ b.Net Realized Gains/(Losses)315,113 427,201 c.Net Unrealized Gains/(Losses)1,450,469 (743,009) d.Investment Expenses (51,532) (100,199) e.Net Investment Income 2,017,883$ (118,340)$ 3.Benefits and Refunds a.Regular Monthly Benefits (811,064)$ (765,274)$ b.DROP Distributions - (173,912) c.Refunds of Member Contributions - - d.Total (811,064)$ (939,186)$ 4.Administrative and Miscellaneous Expenses (24,362)$ (36,584)$ 5.Transfers -$ -$ C.Market Value of Assets at End of Year 14,624,121$ 12,128,893$ D.Reserves 1.State Contribution Reserve (420,746)$ (322,374)$ 2.DROP Accounts (199,578) (116,105) 3.Total Reserves (620,324)$ (438,479)$ E.Market Value Net of Reserves 14,003,797$ 11,690,414$ September 30