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2012 P& F Pension Fund Summmary Plan DescriptionVILLAGE OF NORTH PALM BEACH FIRE AND POLICE PENSION FUND SUMMARY PLAN DESCRIPTION May 2012 TABLE OF CONTENTS INTRODUCTION ...................... ............................... 1 PARTICIPATION IN THE PENSION FUND .. ............................... 1 ELIGIBILITY FOR NORMAL RETIREMENT . ............................... 1 AMOUNT OF A NORMAL RETIREMENT PENSION .......................... 1 EARLY RETIREMENT BENEFIT .......... ............................... FORMS OF PAYMENT OF A PENSION .... ............................... NormalForm .................... ............................... 3 Optional Forms of Payment ......... ............................... 3 SURVIVOR BENEFITS - DEATH BEFORE RETIREMENT ..................... 4 DISABILITY RETIREMENT .............. ............................... 4 Non -Duty Disability Retirement ...... ............................... Duty Disability Retirement .......... ............................... 5 ENDING EMPLOYMENT BEFORE NORMAL RETIREMENT ................... ROLLOVER TRANSFERS ............... ............................... COST OF LIVING ADJUSTMENT ......... ............................... 6 FILING FOR RETIREMENT .............. ............................... 6 FORFEITURE OF PENSION ............. ............................... 6 CLAIMS PROCEDURES ................ ............................... 7 COST OF THE PENSION FUND .......... ............................... 9 ADMINISTRATION OF THE PENSION FUND ............................... 9 INVESTMENTS ....................... ............................... 9 ACTUARIAL SOUNDNESS ............. ............................... 10 AGENT FOR LEGAL PROCESS ......... ............................... 10 PLAN YEAR ......................... ............................... 10 DEFINITIONS ........................ ............................... 11 ACTUARIAL DATA .................... ............................... 13 INTRODUCTION As a member in the Village of North Palm Beach Fire and Police Pension Fund, you are included in a program of benefits to help you meet your financial needs in retirement, or in the event of disability or death. The purpose of this booklet is to give you a brief description of benefits available to you under your pension plan. Planning for retirement begins now. This booklet can be a valuable tool in preparing for your retirement and financial future. If you need any further information on any of the topics presented in this booklet, please contact the Fund Administrator, Resource Centers, LLC, or the Board of Trustees. They will answer any questions to help you better understand your benefits. The information presented is a summary of the pension plan as provided in the Village of North Palm Beach Code of Ordinances which governs your Pension Fund, and includes the last amendment to the Plan, Ordinance No. 2011 -22 dated December 8, 2011. The legal citation for your Plan is Division 4, Section 2 -159 et seq., Village of North Palm Beach Code, Article V. Any discrepancies between information in this booklet and the Plan will be governed by the Plan. A copy of the Plan can be obtained from the Fund Administrator, The Pension Resource Center, LLC whose address is: Resource Centers, LLC 4360 Northlake Boulevard, Suite 206 Palm Beach Gardens, FL 33410 Telephone (561) 624 -3277 Fax Number (561) 624 -3278 Board of Trustees Village of North Palm Beach Fire and Police Pension Fund Robert DiGloria, Chairman Henry Maki, Secretary Maria Walden Jake Stone Robert Coliskey PARTICIPATION IN THE PENSION FUND Each firefighter and police officer in the Village of North Palm Beach Public Safety Department is a Pension Fund member. ELIGIBILITY FOR NORMAL RETIREMENT A firefighter or police officer who is age 55 or older, or who is age 52 with 25 years of service, is eligible for normal retirement. An application for normal retirement must be filed with the Fund Administrator and approved by the Board of Trustees. AMOUNT OF A NORMAL RETIREMENT PENSION The amount of a normal retirement pension is based on a member's credited service, average monthly earnings and pension multiplier. Average Monthly Earnings is the monthly average of earnings during the best five years of employment during the last ten years. Earnings includes base salary, overtime, public safety pay increment and special pay, but excluding bonuses such as longevity, safety and attendance awards and other non - regular payments such as unused sick leave or vacation time pay. Credited service is generally a member's period of employment as a firefighter or police officer in the Public Safety Department of the Village of North Palm Beach, measured in years and fractions of a year. Special conditions apply if a member has a break in service as a firefighter or police officer. In certain circumstances, limited periods of military service and firefighter or police service with another municipality may be recognized as credited service. Promptly contact the Fund Administrator if either situation applies and a determination has not been rendered. The pension multiplier is two and one -half percent (2.5 %) for up to 24 years of service. However, in all cases, the member must receive at least two percent (2 %) per year of service. In practical effect this means that members are entitled to 2.5% for years 1 through 24 and 0% for years 25 to 30 and 2% for each year after 31 years of service. Sample Calculation The following example illustrates how average monthly earnings are calculated. This is an example for planning purposes only and does not indicate the actual North Palm Beach May 2012 Fire and Police Pension Fund Page 1 of 15 benefit for any member. Year Before Retirement Sample Salary for Year Year 10 $25,000 Year 9 $26,000 Year 8 $27,000 Year 7 $28,000 Year 6 $29,000 Year 5 $30,000 Year 4 $30,000 Year 3 $31,000 Year 2 $32,000 Year 1 $33,000 The chart above represents the last 10 years of service. To calculate average monthly earnings, you must first determine the best 5 years out of the last 10 that your salary was the greatest. In this example, it would be years 5 through 1. Add the salary of those years together and divide it by 60 months: $30,000 + $30,000 + $31,000 + $32,000 + $33,000 = $2,600 1 -month average 60 The following is an illustration of a normal retirement pension calculation. This is an example for planning purposes only and does not indicate the actual benefit for any member. 2.5% (.25) of average monthly earnings multiplied by credited service up 31 years. 1. Total credited service 31.0 yrs. 2. Average monthly earnings $2,600 3. 2 -'/2% times 24 yrs. .025 x 24 60% 4. Line (3) times line (2) 60% x $2,600 $1,560 5. 0% times 6 yrs. .00 x 6 0 6. Line (5) times line (2) 0 x $2,600 $0 7. 2% times 1 year .02 x 1 2% North Palm Beach May 2012 Fire and Police Pension Fund Page 2 of 15 8. Line (7) times line (2) 2% x $2,600 $52 9. Line (4) + line (6) + line (8) $1,560 + $0 + $52 $1,612 EARLY RETIREMENT BENEFIT A member who is age 50 is eligible for early retirement. The early retirement benefits that are payable to a member are determined in the same manner as the normal retirement benefit but are reduced by three percent (3 %) for each year by which the member's age at retirement preceded the member's normal retirement age to take into account the firefighter's or police officer's younger age and the earlier commencement of retirement income payments, or the member may elect a deferred monthly retirement benefit which begins at the normal retirement age but is paid without an actuarial reduction. FORMS OF PAYMENT OF A PENSION Normal Form The retiree will receive a benefit for his /her life. However, if the retiree dies prior to receiving 120 monthly payments (10 years certain), then the pension payments will continue until a total of 120 monthly payments have been made to the retiree and his /her beneficiary combined. A member may designate a beneficiary to receive the benefit payable, if any, upon the death of the retired member. When there is no beneficiary named, the benefit will be paid to the deceased firefighter or police officer's estate. Pension payments will continue to the retired member's beneficiary until a total of 120 payments have been made. IT IS IMPORTANT TO KEEP YOUR BENEFICIARY DESIGNATION UP TO DATE Optional Forms of Payment Option 1 - Joint and last survivor option. The member may elect to receive a benefit, which has been adjusted to the actuarial equivalent of the normal form of benefit, during his /her lifetime and have such adjusted benefit (or a designated fraction thereof, for example one hundred percent (100 %), seventy -five percent (75 %), sixty -six and two - thirds percent (66 -2/3 %) or fifty percent (50 %) continued after his death to and during the lifetime of his beneficiary. The election of Option North Palm Beach May 2012 Fire and Police Pension Fund Page 3 of 15 1 shall be null and void if the designated beneficiary dies before the member's benefit payments commence. Option 2 -Social security adjustment option. If a member retires before being eligible for social security benefits, he may elect this option. A member may elect to receive a larger pension up to the date he begins receiving social security benefits. The member's pension benefits may be reduced or terminated after social security payments begin. The amount of reduction shall be actuarially determined. Option 3 - Other. In lieu of the other optional forms in this section, benefits may be paid in any form approved by the Board so long as actuarial equivalence with the benefits otherwise payable is maintained provided, however, that the board shall not authorize any actuarially equivalent single or lump sum distributions. A retired member may change his or her designation of joint annuitant or survivor up to two times. If changed, the member's monthly benefit shall be adjusted by the application of actuarial tables and calculations developed to ensure that the benefit paid is the actuarial equivalent of the present value of the member's current benefit and there is no impact to the plan. The member shall be responsible for the cost of recalculation of the benefit by the actuary. SURVIVOR BENEFITS - DEATH BEFORE RETIREMENT If a member who is no longer an employee of the Village dies prior to the normal retirement date and has attained age fifty (50) and has ten (10) or more years of credited service, a pension benefit of fifty percent (50 %) of the amount the member would have been entitled to, actuarially reduced for early retirement, shall be paid to the designated beneficiary for a long as the beneficiary shall live. Such amount shall be based on the amount payable under the 50% joint and survivor option, reduced actuarially to the age of the beneficiary. If a member dies while employed by the Village and has ten (10) years credited service, regardless of the member's age, a pension benefit equal to the member's vested accrued pension shall be paid to the member's designated beneficiary in equal, consecutive monthly installments over ten years. DISABILITY RETIREMENT A pension may be payable to a member who, prior to the normal retirement date, becomes disabled while employed in the public safety department as a firefighter or police officer. Eligibility and the amount of the pension are dependent on whether or not the disability occurred in the line of duty. The disability must arise from a mental or physical illness, disease or injury which totally and permanently prevents the member from performing useful and efficient North Palm Beach May 2012 Fire and Police Pension Fund Page 4 of 15 service as a firefighter or police officer in the Village of North Palm Beach Public Safety department. No firefighter or police officer shall be permitted to retire under a disability retirement until examined by a duly qualified physician or surgeon to be selected by the Board of Trustees and the physician or surgeon finds the member to be disabled from performing the functions of a firefighter or police officer. The final determination of disability is made by the Board. No disability pension can be awarded if the disability results from 1. Excessive and habitual use of drugs, intoxicants or narcotics; 2. Willful and illegal participation in fights, riots or civil insurrection, or while committing a crime; 3. Injury or disease sustained while serving in any nation's armed forces; 4. Injury or disease sustained after employment has been terminated; or 5. While working for someone other than the Village and arising from that employment. A member who is retired for disability may be required to undergo periodic medical examination under the direction of the Board of Trustees to determine if the retired member is capable of performing the duties of a firefighter or police officer in the Department. (a) Non -Duty Disability Retirement The amount of pension is calculated the same as a normal retirement pension based on average monthly earnings and credited service at the time of disability. The minimum pension is 25% of average monthly earnings. There is no non -duty disability pension if a police officer's credited service is less than 10 years. In that event, accumulated contributions are refunded. (b) Duty Disability Retirement If the Board finds the disability to have arisen out of and in the course of the member's performance of duty as a Village of North Palm Beach firefighter or police officer, the amount of pension is equal to the normal retirement benefit or 42% of the member's average monthly earnings, whichever is greater. ENDING EMPLOYMENT BEFORE NORMAL RETIREMENT A member not eligible for normal retirement who leaves the employment of the Village with 10 or more years of service may elect to receive early retirement benefits at any time after reaching age 50 or normal retirement benefits at age 55. North Palm Beach May 2012 Fire and Police Pension Fund Page 5 of 15 The member's early retirement benefit would be calculated in the same manner as normal retirement benefit, reduced three percent (3 %) for each year retirement precedes normal retirement age. Such a member may also take a refund of contributions instead of any other benefits from the Fund. A member terminating before completing 10 years of service will receive a full refund of employee contributions. No further benefit will be payable from the Fund. ROLLOVER TRANSFERS To minimize the tax consequences of lump sum distributions, including refunds of contributions, roll overs to an IRA or another qualified plan are available. Please see your administrator for the appropriate forms. COST OF LIVING ADJUSTMENT Retired members and beneficiaries will have their pension benefit increased in accordance with the changes in the Consumer Price Index (CPI -W U.S.), as of October 1. The maximum increase in the member's pension benefit for any one (1) year is three percent (3 %). If there is a decrease in the Consumer Price Index, then the amount of the pension benefit will not increase again until there is an increase in that index beyond the prior high level of the Consumer Price Index. FILING FOR RETIREMENT In order to ensure that you receive your pension on time, you should file your application with the Fund Administrator at least 30 days before retirement. All forms can be obtained from the Fund Administrator at the address on the Introduction page. Penalties will be imposed for making a false or misleading statement to obtain a pension benefit. It can take up to 60 days after your date of retirement to receive your first pension check. FORFEITURE OF PENSION Any Member who is convicted of any of the below offenses committed prior to retirement shall forfeit all rights and benefits under this Fund, except for a refund of accumulated contributions. The specified offenses are: (a) Committing, aiding or abetting of an embezzlement of public funds; (b) Committing, aiding or abetting of any theft by a public officer or employee from employer; North Palm Beach May 2012 Fire and Police Pension Fund Page 6 of 15 (c) Bribery in connection with the employment of a public officer or employee; (d) Any felony specified in Chapter 838, Florida Statutes; (e) The committing of impeachable offense; (f) The committing of any felony by a public officer or employee who, willfully and with intent to defraud the public or the public agency for which the public officer or employee acts or in which he or she is employed of the right to receive the faithful performance of his or her duty as a public officer or employee, realizes or obtains, or attempts to realize or obtain, a profit, gain, or advantage for himself or herself or for some other person through the use or attempted use of the power, rights, privileges, duties, or position of his or her public office or employment position; (g) The committing on or after October 1, 2008, of any felony defined in §800.04, Florida Statutes, against a victim younger than 16 years of age, or any felony defined in Chapter 794, Florida Statutes against a victim younger than 18 years of age, by a public officer or employee through the use or attempted use of power, rights, privileges, duties, or position of his or her public office or employment position. Any Memberwho has received benefits from the Plan in excess of his accumulated contributions shall be required to repay the Fund. The Board may implement legal action necessary to recover such funds. Additionally, a Member who makes a false or misleading statement to obtain retirement benefits shall commit a misdemeanor of the first degree and if convicted, the Member shall forfeit his /her benefit. CLAIMS PROCEDURES Any member, former member, or beneficiary who has been denied a benefit by a decision of the Board shall be entitled to request in writing that the Board give further consideration to the claim. This request, together with a written statement of the reasons why the claimant believes his claim should be allowed, shall be filed with the Board no later than 20 days after receipt of the written notification of the denial. The board of trustees shall hold a hearing within forty -five (45) days of the receipt of the appeal. Written notice of said hearing shall be sent by certified mail to the applicant at the address listed on his application ten (10) days prior to the hearing. The procedures at the hearing shall be as follows: (a) All parties shall have an opportunity to respond, to present physical and North Palm Beach May 2012 Fire and Police Pension Fund Page 7 of 15 testimonial evidence and argument on all issues involved, to conduct cross - examination, submit rebuttal evidence, and to be represented by counsel. Medical reports and depositions may be accepted in lieu of live testimony, at the board's discretion. (b) All witnesses shall be sworn. (c) The applicant and the board shall have an opportunity to question all witnesses. (d) Formal rules of evidence and formal rules of civil procedure shall not apply. The proceedings shall complywith the essential requirements of due process and law. (e) The record in a case governed by this subsection shall consist only of: (1) A tape recording of the hearing, to be taped and maintained as part of the official files of the board of trustees, by the pension's secretary. (2) Evidence received or considered. (3) All notices, pleadings, motions and intermediate rulings. (4) Any decisions, opinions, proposed or recommended orders or reports by the board of trustees. Within five (5) days after the hearing, the board shall take one of the following actions: (a) Grant the pension benefits by overturning the proposed order by majority vote. (b) Deny the benefits and approve the proposed order as a final order, after making any changes in the order that the board feels is necessary. (1) Findings of fact by the board shall be based on competent, substantial evidence on the record. (2) Within twenty (20) calendar days after rendering its order, the board of trustees shall send by certified mail a copy of said order to the applicant. North Palm Beach May 2012 Fire and Police Pension Fund Page 8 of 15 (3) The applicant may seek review of the order of the board of trustees by filing a petition for writ of certiorari with the circuit court within thirty (30) days. COST OF THE PENSION FUND (a) Member contributions. Your contribution rate is two percent (2 %) of your covered salary. (See "Definitions" for covered salary). (b) State contributions. Monies are paid to the Fund each year by the State pursuant to Chapters 175 and 185, Florida Statutes to be used exclusively for the benefit of firefighters and police officers. (c) Employer contributions. The Employer must contribute an amount determined by the Plan's actuary to be sufficient, along with your contributions and the State contribution, to sufficiently fund the Plan. The Employer's contribution will vary depending upon the experience of the Plan. ADMINISTRATION OF THE PENSION FUND The Pension Fund is administered by a Board of Trustees which is responsible for overseeing the investment of Pension Fund assets and application of the provisions of the Pension Ordinance. The Board has authority over distribution of all pensions and makes final decisions on claims and appeals. Five trustees comprise the Board: two full -time, certified firefighters of the Village elected by Pension Fund members, two full -time, certified police officers of the Village elected by Pension Fund members and a fifth member who must be a legal resident of the Village and who shall be appointed by the Village Council. Pension Fund assets are maintained and invested entirely separate from Village assets and cannot be used for any purpose other than those specified in the Pension Plan Ordinance. INVESTMENTS The assets of the Plan are presently invested by Investment Counsel Company under investment guidelines adopted by the Board of Trustees in consultation with their investment advisors. North Palm Beach May 2012 Fire and Police Pension Fund Page 9 of 15 ACTUARIAL SOUNDNESS The actuary for the Plan has determined that the Plan is actuarially sound and can adequately fund the benefits based upon projected contributions to the Plan and investment earnings. AGENT FOR LEGAL PROCESS Board of Trustees % Resource Centers, LLC 4360 Northlake Boulevard, Suite 206 Palm Beach Gardens, FL 33410 PLAN YEAR The plan year is the twelve month period beginning each October 1. Records are kept on a fiscal year basis. North Palm Beach May 2012 Fire and Police Pension Fund Page 10 of 15 DEFINITIONS Average Monthly Earnings - the monthly average of salary of the highest 5 years of the last 10 years of credited service prior to retirement. Beneficiary - an individual such as a spouse, child or dependent parent, who is receiving a survivor benefit from the Pension Fund following the death of a member. Credited Service - a member's years of service as a firefighter or police officer with the Village of North Palm Beach Public Safety Department. Also includes those years which a member has purchased by making a contribution to the plan. Years of service can be purchased for years or fractional parts of years that a member served in the United States Military service, or service with another municipal, county, state, orfederal law enforcement agency. Early Retirement Date - the first day of the month coincident with or next following the date on which the member reaches age 50. Firefighter - any person employed in the fire department who is certified as a firefighter as a condition of employment in accordance with the provisions of §633.35, Florida Statutes. Normal Retirement Date - the earliest date when unreduced retirement benefits may be paid. A members Normal Retirement Date is the date the member reaches age 55, or reaches age 52 with 25 years of credited service. Member - a full -time, certified Village of North Palm Beach Firefighter or Police Officer. Plan or System - the Village of North Palm Beach Fire and Police Retirement Fund and all amendments thereto. Police Officer - any person employed in the police department who is certified as a law enforcement officer as a condition of employment. A police officer is an employee who is certified as a law enforcement officer as a condition of employment in accordance with the provisions of §934.14, Florida Statutes. North Palm Beach May 2012 Fire and Police Pension Fund Page 11 of 15 Salary - the total salary paid by the Village to a police officer or firefighter for services rendered, including overtime, public safety pay increment and special pay, but excluding bonuses such as longevity, safety and attendance awards and any other non - regular payments such as unused sick leave and vacation pay. Spouse - the lawful wife or husband of a member at time or pre- retirement death or retirement. Village - The Village of North Palm Beach, Florida. North Palm Beach May 2012 Fire and Police Pension Fund Page 12 of 15 ACTUARIAL DATA Comparative Summary of Principal Valuation Results Annual Rate of Payments to: Service Retirees 212,356 172,126 Beneficiaries 0 0 Terminated Vested 129,541 162,008 Disability Retirees 43,476 38,585 B. Assets Actuarial Value 11,656,106 11,240,540 Market Value 10,372,780 10,651,237 C. Liabilities Present Value of Benefits 1011/2011 '10/1 /2010 A. Participant Data Number Included 12,563,079 11,922,240 Actives 53 52 Service Retirees 10 8 Beneficiaries 0 0 Terminated Vested 8 10 Disability Retirees 1 1 Total 72 71 Total Annual Payroll 3,852,019 3,922,596 Payroll Under Assumed Ret. Age 3,656,462 3,690,332 Annual Rate of Payments to: Service Retirees 212,356 172,126 Beneficiaries 0 0 Terminated Vested 129,541 162,008 Disability Retirees 43,476 38,585 B. Assets Actuarial Value 11,656,106 11,240,540 Market Value 10,372,780 10,651,237 C. Liabilities Present Value of Benefits Active Members Retirement Benefits 12,563,079 11,922,240 Disability Benefits 1,111,291 1,120,646 Death Benefits 120,589 119,435 Vested Benefits 812,263 779,252 Refund of Contributions 47,156 39,477 Service Retirees 3,220,543 3,307,814 Beneficiaries 0 0 Terminated Vested 1,364,868 1,886,941 Disability Retirees 605,789 548,291 Excess State Monies Reserve 57,770 23,894 Total 19,903,348 19,747,990 North Palm Beach May 2012 Fire and Police Pension Fund Page 13 of 15 C. Liabilities - (Continued) Present Value of Future Salaries Present Value of Future Normal Costs (Aggregate Basis) Present Value of Future Normal Costs (Entry Age Basis) Normal Cost (Aggregate, Level Percent) Present Value of Future Member Contributions Actuarial Accrued Liability (Aggregate Basis) Actuarial Accrued Liability (Entry Age Basis) Unfunded Actuarial Accrued Liability (UAAL) D. Actuarial Present Value of Accrued Benefits Vested Accrued Benefits Inactives Actives Member Contributions Total Non - vested Accrued Benefits Total Present Value Accrued Benefits Increase (Decrease) in Present Value of Accrued Benefits Attributable to: Plan Amendments Assumption Changes New Accrued Benefits Benefits Paid Interest Other Total: 10/112011 10/1/2010 32,177,418 33,473,103 8,247,242 8,507,450 5,268,472 5,602,138 937,171 937,927 643,548 669,462 11,656,106 11,240,540 14,634, 876 14,121,958 0 0 5,191,200 5,441,879 489,994 11,123, 073 1,027,815 12,150, 888 0 501,811 (966,475) 898,690 0 434,026 5,743,046 4,588,773 395,049 10,726,868 989,994 11,71 6,862 North Palm Beach May 2012 Fire and Police Pension Fund Page 14 of 15 Valuation Date 10/1/2011 10/112010 Applicable to the Fiscal Year Ending 9/30/2013 9/30/2012 E. Pension Cost Normal Cost (with interest) % of Total Annual Payroll* 26.66 26.43 Administrative Expense (with interest) % of Total Annual Payroll* 1.87 1.85 Payment Required to Amortize Unfunded Actuarial Accrued Liability over 0 years (as of 10/1 /11) % of Total Annual Payroll* 0.00 0.00 Total Required Contribution % of Total Annual Payroll` 28.53 28.28 Expected Member Contributions % of Total Annual Payroll* 2.00 2.00 Expected Village & State Contrib. % of Total Annual Payroll* 26.53 26.28 F. Past Contributions Plan Years Ending: Total Required Contribution Village and State Requirement Actual Contributions Made: Members Village State Total G. Actuarial Gain (Loss) N/A 9/30/2011 941,229 869,407 98,656 641,371 230,695 ** 970,722 * Contributions developed as of 10/1/11 are expressed as a percentage of Payroll Under Assumed Retirement Age at 10/1/11 of $3,656,462 ** "Frozen" pursuant to Chapters 175 and 185, Florida Statutes. 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