CITY OF SUNRISE FIREFIGHTERS RETIREMENT PLAN SUMMARY PLAN DESCRIPTION DECEMBER 2013 1
TABLE OF CONTENTS PLAN INFORMATION... 3 DEFINITIONS... 5 WHEN MAY I RETIRE AND WHAT BENEFIT IS PAYABLE?... 7 HOW IS MY BENEFIT PAID?... 11 ARE THERE ANY SUPPLEMENTAL BENEFITS PAYABLE TO ME?... 12 WHAT IS THE DEFERRED RETIREMENT OPTION PLAN (DROP)?... 13 IS THERE A COST OF LIVING ADJUSTMENT (COLA)?... 14 WHAT IF I LEAVE EMPLOYMENT BEFORE I RETIRE?... 15 WHAT HAPPENS IF I BECOME DISABLED?... 16 WHAT BENEFIT IS PAYABLE IF I DIE BEFORE I RETIRE?... 18 WHAT IS THE AFFECT OF DOMESTIC RELATONS ORDERS?... 19 CAN I LOSE ANY OF MY BENEFITS IN THIS PLAN?... 20 HOW DO I APPLY FOR BENEFITS UNDER THE PLAN?... 21 HOW DO I APPEAR BEFORE THE BOARD?... 22 WHAT IS THE ACTUARIAL INFORMATION AND FINANCIAL INFORMATION BASED ON THE MOST RECENT VALUATION OF THE PLAN?... 23 2
PLAN INFORMATION There is certain general information you may need to know about your Plan. This general information is summarized below. Name of Plan: The name of the Plan is City of Sunrise Firefighters Retirement Plan. Plan Sponsor: The Plan Sponsor is the City of Sunrise. Plan Year: Each 12-month period beginning on October 1 st and ending on September 30 th is the plan year. The Plan's fiscal records are maintained on this basis. Relevant Provisions of Local and State Laws: The Plan is set forth in Section 11 of the City of Sunrise Code of Ordinances. Your Plan is also governed by certain provisions of Chapter 175, Chapter 112, Part VII, Chapter 119 and Chapter 286, Florida Statutes, and various federal laws including the Internal Revenue Code and amendments thereto and Operating Rules and Procedures adopted by the Board of Trustees. Plan Administrator: The Board of Trustees is the Plan Administrator. Board of Trustees: Members of the Board of Trustees are as follows: Chairman: George Farrell Secretary: Scott Brackney Trustees: Frank Cagan Edwin Javier John McNamara The Board of Trustees may be reached at Benefits USA, Inc., 3810 Inverrary Blvd., Suite 303, Lauderhill, FL 33319. Designated Agent for Service of Legal Process: The Chairman of the Board of Trustees is the designated agent for service of legal process. Type of Administration: The Plan Administrator, which is the Board of Trustees, 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 that may affect your eligibility for benefits. The Board of Trustees consists of five members, two of whom are legal residents of the City and current members or former City employees who are vested in the Plan and are appointed by the City Commission, two of whom are current members who are elected by members of the Plan and one who is selected by a majority of the previous four Trustees. The Board of Trustees may retain the services of administrators, attorneys, actuaries, accountants, investment advisors and other professional consultants. The current service providers are shown below but are subject to change. Pension Fund assets are maintained and invested separately from City assets and cannot be used for any purpose other than that specified in the City Ordinance. Fund Administrator: The Fund Administrator is a person or company engaged by the Board of Trustees to administer the day-to-day business of the Plan. The Fund 3
Administrator is Benefits USA, Inc. who may be reached at 3810 Inverrary Boulevard, Suite 303, Lauderhill, FL 33319. Their telephone numbers are (954) 730-2068 or (800) 452-2454. Legal Counsel: The attorney for the Plan is Klausner & Kaufman, P.A., 10059 N.W. 1st Court Plantation, FL 33324. Actuary: The actuary for the Plan is Freiman Little Actuaries, LLC, 4105 Savannahs Trail, Merritt Island, FL, 32953-8607. Auditor: The accountant for the Plan is Goldstein Schechter Koch, 4000 Hollywood Blvd., Suite 215 South, Hollywood, FL 33021. Custodian: The Custodian is responsible for the safekeeping 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 KeyBank National Association. Investment Managers and Consultant: The investment managers are responsible for selecting the securities to be bought and sold by the Pension Fund, in accordance with guidelines established by the Plan Administrator. The current investment managers are: Artisan Partners, Ltd. Atlanta Capital Management Company Deprince Race & Zollo Eaton Vance Glovista ICC Capital Management Company Lee Munder Rhumbline Advisors Sawgrass Asset Management The investment consultant advises the Board of Trustees on its investment guidelines, the performance of its managers compared to applicable indices and recommends asset allocation of the Fund. The investment consultant is Dahab Associates. Financial and Actuarial Information: A report of financial and actuarial information is included at the end of this Summary Plan Description (SPD). Social Security Numbers: Social Security numbers are requested and maintained on behalf of all Plan participants, beneficiaries and retirees for data collection, reconciliation, tracking, benefit processing, tax reporting, and identity verification purposes. Social Security numbers are also used as a unique numeric identifier and may be used for death record searches for retirees. 4
DEFINITIONS Actuarial Equivalent: Any benefit payable under the terms of the Plan other than the Normal Form of Benefit has the same actuarial present value as the Normal Form of Benefit. Effective April 27, 2010, the determination of the actuarial present value is based on the RP-2000 static mortality table with a 50%/50% blend of male/female rates projected to 2010 using Scale AA and an 8.0% annual interest assumption. Disabled mortality tables are used for disability retirees. Member; Participant: Member or participant means a member of the plan employed by the City of Sunrise Fire Department as a full-time sworn Firefighter. Participation in the Plan is mandatory. Beneficiary: Your beneficiary is each person that you designate to the Plan Administrator to receive a benefit payable by the Plan. You should designate a beneficiary when you become a Member of the Plan. You may change your designation at any time prior to retirement upon written notification to the Fund Administrator. After retirement you may change your Beneficiary up to two times without Board approval. However, the amount of the retirement income payable upon designation of a new Beneficiary will be redetermined as the Actuarial Equivalent of your current benefit based on your age and the age of your new Beneficiary. Contributions: Effective with the first pay period in January, 2004, Participants are required to contribute 10.63% of Salary. Effective September 25, 2012, Tier 1 Participants are required to contribute 9.95% of Salary and Tier 2 Participants are required to contribute 9.0% of Salary. Effective the first full pay period following November 13, 2012, both Tier 1 and Tier 2 participants are required to contribute 10.63% of Salary. Contributions are deducted from each bi-weekly paycheck. These Member contributions plus contributions from the City of Sunrise and funds are received from the state under provisions of Chapter 175 are all sources of Contributions to fund Plan benefits. Credited Service: "Credited Service" is your service with the City as a full-time salaried firefighter where Contributions are made. Completed months of partial years of service are included in the determination of Credited Service. Credited Service also includes certain military service. Participants who retire or enter the DROP on or after September 25, 2012 and who have 10 or more years of Credited Service may purchase time worked as a full-time firefighter with another governmental entity prior to employment with the City, provided no benefit has been received and no benefit will be received from another retirement plan based on this employment. The purchase is determined as the full actuarial cost based on the assumptions approved by the Board of Trustees, plus the cost of any actuarial calculations required. The service purchase takes effect only upon full payment of all actuarial costs of the service being purchased. The purchase must be made in full prior to entering the DROP or separation from service with the City, whichever occurs first. In the event full payment is not made prior to such date, only the amount of Credited Service for which payment has been made is counted under the Plan. Payment may be made in a cash lump sum or direct transfer of funds from a Member s account in the City s 457 plan. 5
Average Final Compensation: Prior to October 1, 2004, Average Final Compensation was defined as the average of Salary for the five highest years. Effective October 1, 2004, Average Final Compensation is the average of your three highest consecutive years of Salary, or an average of your five highest years of Salary out of the last 10 years of Credited Service, whichever is greater. Salary: Salary includes regular pay, overtime, holiday and other payroll cash incentives and general monthly expense allowances, but excludes lump sum payouts of accrued benefits upon termination of employment, auto allowances, uniform allowances, mileage and travel reimbursements and private detail pay. Effective October 1, 2012, overtime pay in excess of 300 hours per year is not included in Salary. Tier 1 and Tier 2: Members hired on or after September 25, 2012 are part of Tier 2. Members hired prior to September 25, 2012 are part of Tier 1. Vesting: You are 100% vested upon completion of ten years of Credited Service. Collective Bargaining Agreement: The current collective bargaining agreement between the City and the Firefighters contains provisions that deal directly with pension benefits. Pension benefits are a bargainable issue. NOTE: The following is a brief description of pension benefits presented for general information purposes only. Participants should refer to the Plan agreement for more complete information. 6
WHEN MAY I RETIRE AND WHAT BENEFIT IS PAYABLE? You may choose to retire with a Normal Retirement Benefit or an Early Retirement Benefit upon termination from employment. Benefits are payable on the first day of the month. Different Normal Retirement Age, Normal Retirement Benefits, Early Retirement Age and Early Retirement Benefits are defined for Tier 1 and Tier 2. Tier 1 Normal Retirement Age: For members who retire or terminate employment after January 1, 2004, the Normal Retirement Age is the earlier of (i) age 45 and completion of 25 years of Credited Service, (ii) age 48 and completion of 21 years of Credited Service (which may be accelerated one year to age 47 and completion of 20 years of Credited Service), or (iii) age 50 and completion of at least 10 years of Credited Service. Tier 1 Normal Retirement Benefit: (1) Prior to January 1, 2004, Members who reached Normal Retirement Age were entitled to a retirement benefit calculated as follows: 4.0% x Average Final Compensation x up to 10 Years Credited Service Plus 2.0% x Average Final Compensation x Credited Service over 10 Years (2) Effective for Tier 1 Members who retire or terminate employment on or after January 1, 2004, the benefit formula is revised to a maximum of 80% of Average Final Compensation under the following: 3% x Average Final Compensation x up to 15 Years Credited Service Plus 3.5% x Average Final Compensation x Credited Service from 15 to 25 Years (3) Any Tier 1 Member who was actively employed on October 1, 2001 and retires or enters the DROP after January 1, 2004 is due a benefit based on the greater of these two benefit formulas. Tier 1 Early Retirement Age: Tier 1 Members become eligible for Early Retirement upon reaching age 47 and completion of at least 10 years of Credited Service. An application for Early Retirement must be filed with the Fund Administrator. Tier 1 Early Retirement Benefit: Tier 1 Early Retirement Benefits are computed on the same basis as a Tier 1 Normal Retirement Benefit, but reduced by no more than 3% for each year and partial year by which Early Retirement precedes the Tier 1 Normal Retirement Age. 7
Tier 2 Normal Retirement Age: The earlier of (i) age 55 and completion of 10 years of Credited Service and (ii) age 52 with 25 years of Credited Service. Tier 2 Normal Retirement Benefit: The maximum Tier 2 Normal Retirement Benefit is 80% of Average Final Compensation. 3.0% x Average Final Compensation x up to 25 Years Credited Service Plus 1.0% x Average Final Compensation x Credited Service over 25 Years Tier 2 Early Retirement Age: Members become eligible for Early Retirement upon reaching age 50 and completion of at least 10 years of Credited Service. An application for Early Retirement must be filed with the Fund Administrator. Tier 2 Early Retirement Benefit: Early Retirement Benefits are computed on the same basis as a Normal Retirement Benefit, but reduced by 3% for each year and partial year by which Early Retirement precedes age 55. NOTE: If you are receiving a retirement benefit and are reemployed by the City in any capacity, your retirement benefit will be suspended for the period of your reemployment. Such reemployment by the City shall have no effect on your Average Final Compensation or your Credited Service. No deductions for retirement Contributions shall be made from the Salary received from such reemployment. 8
Tier 1 EXAMPLE #1: Suppose you retire with 27 years of Credited Service with monthly Average Final Compensation of $5,000. The monthly Tier 1 Normal Retirement Benefit payable is computed as: (1) (4.0% x $5,000 x 10) + (2.0% x $5,000 x 17) = $2,000 + $1,700 = $3,700 (2) (3.0% x $5,000 x 15) + (3.5% x $5,000 x 10) = $2,250 + $1,750 = $4,000 (3) For Tier 1 Members hired on or before October 1, 2001, the monthly Tier 1 Normal Retirement Benefit payable is the greater of (1) and (2), or $4,000. (4) For Tier 1 Members hired after October 1, 2001, the monthly Tier 1 Normal Retirement Benefit payable is that shown in item (2), or $4,000. Tier 1 EXAMPLE #2: Suppose you retire at age 47 with 15 years of Credited Service with monthly Average Final Compensation of $4,000. You are 3 years from reaching the Tier 1 Normal Retirement Age eligibility of age 50 with 10 years of Credited Service. The monthly Tier 1 Early Retirement Benefit payable is computed as: (1) [(4.0% x $4,000 x 10) + (2.0% x $4,000 x 5)] x [1 (3% x 3)] = ($1,600 + $400) x 0.91 = $2,000 x 0.91 = $1,820 (2) [(3.0% x $4,000 x 15)] + (3.5% x $4,000 x 0)] x [1 (3% x 3)] = ($1,800 + $0) x 0.91 = $1,638 (3) For Tier 1 Members hired on or before October 1, 2001, the monthly Tier 1 Early Retirement Benefit payable is the greater of (1) and (2), or $1,820. (4) For Tier 1 Members hired after October 1, 2001, the monthly Tier 1 Early Retirement Benefit payable is that shown in item (2), or $1,638. 9
Tier 2 EXAMPLE #1: Suppose you retire at age 52 with 29 years of Credited Service with monthly Average Final Compensation of $5,000. The monthly Tier 2 Normal Retirement Benefit payable is computed as: (3.0% x $5,000 x 25) + (1.0% x $5,000 x 4) = $3,750 + $200 = $3,950 Tier 2 EXAMPLE #2: Suppose you retire at age 50 with 27 years of Credited Service with monthly Average Final Compensation of $4,000. You are 5 years from age 55. The monthly Tier 2 Early Retirement Benefit payable is computed as: [(3.0% x $4,000 x 25) + (1.0% x $4,000 x 2)] x [1 (3% x 5)] = ($3,000 + $80) x 0.85 = $3,080 x 0.85 = $2,618 10
HOW IS MY BENEFIT PAID? Standard Form of Benefit: Effective October 1, 2004, the Normal Retirement Benefit is payable as a 10-year Certain & Continuous Annuity. Prior to October 1, 2004, the Normal Retirement Benefit was defined payable as a Single Life Annuity. Instead of receiving the Standard Form of Benefit, Members may choose an optional form of benefit which has the same actuarial value as the Standard Form of Benefit. The election as to the form of benefit you would like to receive upon retirement should be elected at the time you are hired; this election can be changed at any time prior to the receipt of your first pension benefit check. The following describes the Optional Forms of Benefit available to you under the terms of the Plan. The 10-year Certain & Continuous Annuity is a monthly pension payable to you for as long as you live. If you should die before 120 monthly payments have been made, your designated beneficiary will receive a monthly payment equal to the monthly payment you were receiving for the remainder of the 120 months. A Single Life Annuity is a monthly pension payable to you for as long as you live. There are no payments made to any surviving beneficiary upon your death. A Joint & Survivor Annuity is a reduced monthly pension payable to you for as long as you live. Upon your death your eligible beneficiary will receive a monthly payment for life equal to a percentage (either 50%, 66-2/3%, 75% or 100%) of the monthly payment you were receiving. Effective January 1, 2004, the Joint & Survivor Annuity may include an actuarially equivalent Pop-Up feature such that if the Member s joint pensioner predeceases the Member, the survivorship benefit is deemed cancelled and the Member s annuity is recalculated as an actuarially equivalent Single Life Annuity effective on the first day of the month following the death of the Member s joint pensioner. There is an actuarial cost to this benefit. The Fund Administrator can advise the percentage of reduction in the amount of your pension benefit under any of the Optional Forms of Benefit. The percentage is based on your age and your beneficiary's age at the time of your retirement. The precise retirement benefit payment cannot be calculated until after the amount of your final paycheck has been determined. You will be given the opportunity to select an Optional Form of Benefit, which must be submitted in writing to the Board of Trustees. 11
ARE THERE ANY SUPPLEMENTAL BENEFITS PAYABLE TO ME? Effective October 1, 2009, firefighters who terminate employment and begin receiving Normal or Early Retirement benefits on or after October 1, 2007 receive a Supplemental Benefit payable monthly which is: The lesser of [(i) $25 x Credited Service and (ii) $500] payable until age 65 The lesser of [(i) $15 x Credited Service and (ii) $300] payable from age 65 for life The Supplemental Benefit is payable for the life of the member only. Members are not allowed to convert the Supplemental Benefit to an Optional Form of Benefit. This Supplemental Benefit is not increased for any COLAs defined under the Plan and is only payable after DROP exit (to members who entered the DROP on or after October 1, 2007). Members who terminate employment on or after October 1, 2007 due a deferred vested benefit receive the supplement upon retirement. Members who retire under disability retirement provisions are not eligible to receive the supplement. Each retiree s Supplemental Benefit is determined on an annual basis, and the amount of the Supplemental Benefit may vary from year to year or the Supplemental Benefit may be discontinued entirely depending on required benefit increases from the State and available funding. EXAMPLE #1: Suppose you retire with 27 years of Credited. The monthly Supplemental Benefit payable is computed as: (1) The lesser of (i) $25 x 27 and (ii) $500 = $500 payable until age 65 (2) The lesser of (i) $15 x 27 and (ii) $300 = $300 payable from age 65 for life EXAMPLE #2: Suppose you retire at age 47 with 15 years of Credited Service. The monthly Supplemental Benefit payable is computed as: (1) The lesser of (i) $25 x 15 and (ii) $500 = $375 payable until age 65 (2) The lesser of (i) $15 x 15 and (ii) $300 = $225 payable from age 65 for life 12
WHAT IS THE DEFERRED RETIREMENT OPTION PLAN (DROP)? Effective September 30, 2001, Members are eligible to enter the DROP at their Normal Retirement Age. The maximum DROP participation duration is 84 months (36 months prior to January 1, 2004, 60 months prior to June 10, 2008, and 72 months prior to September 25, 2012). DROP participation and City employment may be terminated sooner than elected with 30 days advance written notice to the City. Alternatively, effective September 25, 2012, Members may elect a BAC-DROP for up to 24 months, which reduces the current maximum 84 month DROP period by the same amount of time elected under the BAC-DROP. Under the BAC-DROP option, a Member receives a lump sum distribution of up to 24 months of retirement benefits upon entry into the DROP, and the Member s monthly pension is actuarially reduced to reflect the cost to the Plan for this lump sum being credited to the Member s DROP account. The BAC- DROP period was 18 months effective January 1, 2004 for DROP entry prior to September 25, 2012. On and after May 17, 2005, Members who elect to participate in the DROP within the first five years following their Normal Retirement Age incur no reduction to the maximum 84 month (60 month prior to June 10, 2008 and 72 month prior to September 25, 2012) DROP period for DROP entry deferral. However, the maximum DROP period is reduced for Members who elect to participate in the DROP beyond five years following their Normal Retirement Age. Effective January 1, 2004 and prior to May 17, 2005, for every year (or portion thereof) of deferred entry into the DROP after the 12 month period following their Normal Retirement Age, the maximum DROP period is reduced by one year. DROP participants are not eligible for death or disability benefits. The Normal Retirement Benefit is frozen at DROP entry and no further employee Contributions are payable. For DROP entrants prior to September 25, 2012, Optional Form of Benefit chosen by the Member is accumulated with interest at the same rate as the investment earnings assumption for the funding valuation of the Plan. Effective September 25, 2012, interest crediting is based on an annual interest rate of 6.0%. Members who commenced participation in the DROP on or after October 1, 2010 and who were participating in the DROP on September 25, 2012 were allowed to extend their DROP participation from 72 to 84 months if the Member agreed all DROP account earnings are recomputed retroactively to the date of DROP using an annual interest rate of 6.0%. No interest is credited after the end of the DROP period. 13
IS THERE A COST OF LIVING ADJUSTMENT (COLA)? An annual 2% COLA is effective September 30, 2001. COLA payments commence at the end of the 4 th year following initial receipt of retirement benefits for all Members who reach Normal or Early Retirement Age and begin receipt of benefits (either directly or through the DROP) after September 30, 2001, and the beneficiaries of such Members. Members who retire or terminate employment on or after January 1, 2004 may elect, in lieu of the 2% COLA described above, a 1% annual COLA commencing 12 months after initial receipt of retirement benefits, which increases to a 2% annual COLA at the end of the 6 th year following initial receipt of retirement benefits. Effective October 1, 2013, the annual COLA is 2.5% for Members who terminate and begin receiving Normal Retirement Benefits or who enter the DROP on or after October 1, 2010, and the beneficiaries of such Members. The annual 2.5% COLA becomes payable at the end of the 7 th year following initial receipt of retirement benefits. Members who entered the DROP prior to October 1, 2010 and are actively employed and participating in the DROP on August 16, 2011 are eligible for the annual 2.5% COLA payable October 1, 2013 or the end of the 7 th year following initial receipt of retirement benefits, whichever occurs later. While COLAs do become payable to members who terminate employment with a vested benefit payable to them once they meet retirement eligibility requirements and they begin to receive a monthly retirement income, COLAs are not payable to members who receive a monthly retirement income under the Disability Retirement provisions of the Plan. EXAMPLE: Suppose you retire October 1, 2013 at age 62 ½ with a monthly Normal Retirement benefit of $4,000, the maximum Supplemental Benefits payable, and you elect the 1% annual COLA commencing 12 months after initial receipt of retirement benefits, which increases to a 2% COLA at the end of the 6 th year following initial receipt of retirement benefits and a 2.5% annual COLA at the end of the 7 th year following initial receipt of retirement benefits. The following shows the COLA payable. Date of Birth: 04/01/1951 First of Month On or After Age 65: 04/01/2016 Monthly Regular Begin Monthly Total Begin End 10-Yr C&C Date Life Only Monthly # of Date Date COLA Benefit Age Supplement Benefit Payments 10/01/2013 09/30/2014 0.00% 4,000.00 62.5 500.00 4,500.00 12 10/01/2014 09/30/2015 1.00% 4,040.00 63.5 500.00 4,540.00 12 10/01/2015 03/31/2016 1.00% 4,080.40 64.5 500.00 4,580.40 6 04/01/2016 09/30/2016 N/A 4,080.40 65.0 300.00 4,380.40 6 10/01/2016 09/30/2017 1.00% 4,121.20 65.5 300.00 4,421.20 12 10/01/2017 09/30/2018 1.00% 4,162.41 66.5 300.00 4,462.41 12 10/01/2018 09/30/2019 1.00% 4,204.03 67.5 300.00 4,504.03 12 10/01/2019 09/30/2020 2.00% 4,288.11 68.5 300.00 4,588.11 12 10/01/2020 09/30/2021 2.50% 4,395.31 69.5 300.00 4,695.31 12 10/01/2021 etc. etc. etc. etc. etc. etc. etc. 14
WHAT IF I LEAVE EMPLOYMENT BEFORE I RETIRE? Nonvested Members: If you have less than 10 years of Credited Service when you leave employment, you will ONLY receive the return of your employee Contributions without interest and no further benefits will be payable to you under the Plan. Vested Members: If you leave employment prior to becoming eligible for retirement benefits but after becoming 100% vested (after completing 10 years of Credited Service), you are entitled to a monthly retirement income when you become eligible to receive benefits if you leave your accumulated employee Contributions in the Fund. You are eligible to receive a monthly retirement income as soon as you meet eligibility conditions described above under the Normal Retirement Age or Early Retirement Age. Alternatively, you may elect a refund of your employee Contributions without interest but will be required to sign a release indicating you are aware you have waived your right to receive any future retirement benefits available under the Plan. NOTE: The Internal Revenue Service requires 20% federal income tax withholding on untaxed Contributions distributed as a lump sum. As an alternative, you may roll over your employee Contributions to an individual retirement account or to another eligible plan that will accept the Contributions. Upon termination, you will be provided a tax notice that sets forth your alternatives. Employee Contributions left in the Fund do not earn interest. 15
WHAT HAPPENS IF I BECOME DISABLED? You are considered disabled when you become permanently and totally unable to perform useful and efficient service as a Firefighter. A written application must be made to the Board of Trustees to receive Disability Retirement benefits. The Board of Trustees gathers evidence of your disability and decides, based on the terms of the Plan, whether or not the Disability Retirement is to be granted. If you become disabled after you have terminated employment, you are not eligible for Disability Retirement. Service Incurred Disability Retirement: The amount of the Service Incurred Disability Retirement benefit is 75% of Salary in effect on the date of disability, subject to certain benefit offsets described below. Nonservice Incurred Disability Retirement: You must have earned at least 10 years of Credited Service to become eligible for Nonservice Incurred Disability Retirement. The benefit payable is the Normal Retirement Benefit, not less than 25% of Average Final Compensation. Prior to October 1, 2004, the maximum Nonservice Incurred Disability Retirement benefit was 50% of Average Final Compensation. Benefit Offsets: Your benefit may be reduced if the combined amount of your Service Incurred Disability benefit, certain insurance benefits plus Salary or earnings from other sources exceeds 100% of your pre-disability Salary. Offsets may not reduce a Service Incurred Disability benefit below the greater of your Normal Retirement Benefit and 42% of your Average Final Compensation. Benefit Options: The same Optional Forms of Benefit are available to members retiring with Service or Nonservice Incurred Disability Retirement as for members retiring under Normal or Early Retirement. Termination of Disability Benefit: Your Disability Retirement benefit ceases upon the earlier of death or recovery. As a disabled pensioner, you are subject to periodic medical examinations as directed by the Board of Trustees to determine whether your disability continues. Converting to an Early or Normal Retirement Benefit: If you are receiving a Service Incurred Disability benefit you may convert to a Normal or Early Retirement Benefit when you meet the eligibility conditions for these benefits. You may elect to continue making regular contributions to the Plan while disabled and earn additional service credit toward Normal or Early Retirement Benefits. If you recovered from a Service Incurred Disability and wish to retire at your Normal or Early Retirement Age, you may do so provided you are vested and make the full regular employee Contribution within one year of your recovery for the period of time you were out on disability. Diseases of Firefighters Suffered in the Line of Duty: Any condition or impairment of health caused by hepatitis, meningococcal meningitis, tuberculosis, hypertension, heart disease or hardening of the arteries resulting in disability or death is presumed to be accidental and suffered in the line of duty unless the contrary can be shown by competent evidence, provided that you have successfully passed a physical examination including an electrocardiogram before entering into service, which examination failed to reveal any 16
evidence of such condition. Hepatitis means hepatitis A, hepatitis B, hepatitis non-a, hepatitis non-b, hepatitis C or any other strain of hepatitis generally recognized by the medical community. Exclusions: To receive disability benefits, you must establish to the satisfaction of the Board that your disability was not caused by: a) Excessive and habitual use of drugs, intoxicants or narcotics; b) Injury or disease sustained while illegally participating in fights, riots, civil insurrections and/or committing a crime; c) Injury or disease sustained while serving in any of the armed forces; d) Injury or disease sustained after your employment with the City has terminated; e) Injury or disease sustained while working (either as an employee or through some other contractual arrangement) for anyone other than the City, performing a job function the same as or related to your City job function and arising out of the scope of such other employment or contractual arrangement. 17
WHAT BENEFIT IS PAYABLE IF I DIE BEFORE I RETIRE? The designated beneficiary of a nonvested Member is due a refund of employee Contributions without interest. The designated beneficiary of a vested Member who dies prior to retirement is entitled to receive either the refund of employee Contributions without interest, or an amount equal to the benefit that would have been payable as if the Member terminated on the date of death, survived to the earliest retirement age, and died the next day. If no Optional Form of Benefit was selected, then the Death Benefit is payable for a period of 10 years. However, any Member who has become eligible for Normal or Early Retirement and continues to be employee is construed to have selected the option which pays the largest possible survivor benefit. If a Member fails to designate a beneficiary, the refund of the employee Contributions is made to the estate of the deceased employee. 18
WHAT IS THE AFFECT OF DOMESTIC RELATONS ORDERS? In the event that a Member is divorced, the Member's retirement benefit may be subject to distribution between the Member and the former spouse under Florida's dissolution of marriage law. No share of the retirement benefit which is payable to a former spouse may be released until the Member is actually retired and in receipt of benefits from the Fund. In the case of alimony and child support, the Fund may make payments directly to the former spouse or to the registry of the court. In the case of property settlement, payments must be made to a joint account in the name of the Member and the former spouse. The bank will act as a trustee of the account and divide the pension payment between the Member and the former spouse in accordance with the dictates of the divorce order. No survivorship benefit may be paid to a former spouse after the death of a retired member. Members are required to submit proposed orders affecting the retirement plan prior to their entry by the court. In the event that a divorce order requires correction for failure to comply with the terms of the plan, the cost of the correction is chargeable to the Member's account. 19
CAN I LOSE ANY OF MY BENEFITS IN THIS PLAN? If you are convicted of certain crimes listed in Section 112.3173, Florida Statutes, committed prior to retirement, or if your employment is terminated by reason of your admitted commission, aid or abetment of these crimes, you shall forfeit all rights and benefits under the Plan, except for the return of your Contributions as of the date of your termination. 20
HOW DO I APPLY FOR BENEFITS UNDER THE PLAN? You should file your retirement application at least thirty days before your planned retirement date. The precise payment cannot be determined until after you have received your final paycheck. The application and all related forms can be obtained from the Fund Administrator. The Fund Administrator is: Benefits USA, Inc. 3810 Inverrary Boulevard, Suite 303 Lauderhill, FL 33319 (954) 730-2068 (800) 452-2454 21
HOW DO I APPEAR BEFORE THE BOARD? All meetings of the Board of Trustees are open to the public and are governed by the provisions of the Florida Government in the Sunshine Law. If you wish to present a request for action by the Board you must do so by making a request in writing to the Fund Administrator in advance of the meeting. All decisions of the Board are final. Members who disagree with a decision of the Board of Trustees may seek judicial review by filing a petition for writ of common law certiorari in the Circuit Court of Broward County. 22
WHAT IS THE ACTUARIAL INFORMATION AND FINANCIAL INFORMATION BASED ON THE MOST RECENT VALUATION OF THE PLAN? Actuarial Information as of October 1, 2012 Present Value of Future Benefits (PVB): Number By Category of Participants Retirees and Beneficiaries in Payment Status 88 $ 89,838,708 Disability Retirees in Payment Status 9 3,822,089 Terminated Participants Due Future Benefits 4 857,841 Active Participants 112 68,517,840 Total Present Value of Future Benefits 213 $ 163,036,478 Accrued Liability (AL): $ 138,034,840 Actuarial Value of Assets: $ 83,654,894 Unfunded Accrued Liability (UAL): $ 54,379,946 Required Contribution to be Made to the Plan on October 1, 2013 For the Fiscal Year Ending September 30, 2014 Over and Above Contributions By Participants of the Plan: As a Dollar Amount: $ 5,851,503 As a Percent of Payroll: 53.2% Financial Information as of October 1, 2012 Market Value of Assets Available to Pay Benefits: Cash and cash equivalents $ 2,584,818 U.S. Government securities 11,877,034 Corporate bonds 9,704,910 Common stock 34,640,430 Domestic Equity Funds 21,255,060 International Equity Funds 6,763,367 Net receivables 236,735 Total Market Value of Assets* $ 87,062,354 Income for the Year Ending September 30, 2012: Employer Contributions $ 4,579,306 Participant Contributions 1,103,807 Net Investment Income 14,243,117 Total Income: $ 19,926,230 Disbursements for the Year Ending September 30, 2012: Benefit Payments: $ (5,392,748) Administrative Expenses: (153,722) Other Expenses: 0 Total Disbursements: $ (5,546,470) *Total Market Value of Assets includes assets of $9,337,757 in the Deferred Retirement Option Plan. 23