Placement: Second Reading of Ordinances / Public Hearing
Action Requested: Motion / Vote
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Ordinance 22-104, Public Hearing, An Ordinance of the City Council of the City of Port St. Lucie, Florida, Amending Chapter 32, Article VIII, Section 32.77 of the Code of the City of Port St. Lucie, Florida, Entitled “Police Officers’ Retirement Trust Fund;” Amending Section (F) Benefit Amounts and Eligibility; Amending Section (G) Pre-Retirement Death; Amending Section (P) Minimum Distribution of Benefits; Amending Section (Q) Miscellaneous Provisions; Providing A Conflicts Clause, A Severability Clause, And Authority To Codify; Providing An Effective Date; And For Other Purposes.
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Submitted By: Sandra Steele, Pension Plan Administrator, Finance Department.
Strategic Plan Link: The City's Goal of a high-performing city government organization.
Executive Summary (General Business): On December 20, 2019, the Setting Every Community Up for Retirement Enhancement Act (the "Secure Act") was signed into law. The law is primarily intended to expand opportunities to increase individual retirement savings. Pertinent to pension plans, effective January 1, 2020, the Secure Act increased the age at which the required minimum distributions must begin from 70 1/2 to 72. This provision applies to qualified plans, traditional IRAs, and 401(k) plans. This new amendment applies to individuals who did not reach age 70 1/2 by December 31, 2019. As a governmental pension plan subject to the Internal Revenue Code ("IRS") requirement, the Plan must adopt these provisions to maintain tax qualification. The proposed Ordinance is to amend Section (F) Benefit Amounts and Eligibility, Section (G) Pre-Retirement Death, Section (P) Minimum Distribution of Benefits, and Section (Q) Miscellaneous Provisions.
Presentation Information: A member of the Finance Department will be available to answer any questions.
Staff Recommendation: Move that the Council adopt Ordinance 22-XX.
Alternate Recommendations:
1. Move that the Council amend the recommendation and adopt Ordinance 22-XX.
2. Move that the Council provide staff direction.
Background: This amendment revises three sections of the plan which currently require benefits to begin following the later of attaining age 70 1/2 or separation of service:
1. Section 32-77(f) which provides for the Required distribution date and inserts the new required age 72, provided that the member did not attain age 70 1/2 before December 31, 2019.
2. Section 32-77(g)(2) which provides for the Pre-retirement death benefit and provides that the deceased member's spouse must begin distributions of the pension benefits before December 31 of the calendar year in which the member would have turned age 72.
3. Section 32-77(p)(2) which provides for the Minimum distribution of benefits and the Time and manner of distribution. This section is similar to the change in 1 above inserting the new required age 72, provided that the member did not attain age 70 1/2 before December 31, 2019
The last change is to Section 32-77(q) and adds the intent to comply with the provisions of the Treasury Regulations, along with the compliance with the provisions of the IRS applicable to qualified plans and governmental plans. It also allows the Board to adopt policies to come into compliance with future required IRS changes due to the changing requirements of the IRS's qualification requirements and the need to keep the plan in compliance. This amendment gives the policy the force of law as if adopted by City Council.
Issues/Analysis: N/A
Financial Information: N/A
Special Consideration: N/A
Location of Project: N/A
Attachments:
1. Ordinance 22-XX Draft
2. No Impact Letter
NOTE: All of the listed items in the “Attachment” section above are in the custody of the City Clerk. Any item(s) not provided in City Council packets are available upon request from the City Clerk.
Internal Reference Number: Legal Intake #8690
Legal Sufficiency Review:
Reviewed/Prepared by Special Labor Counsel. Approved as to Legal form and sufficiency by James D. Stokes, City Attorney.