12-06-05 Item 15Robert A. Sugarman*
Howard S. Susskind
Kenneth R. Harrison, Sr.
David E. Robinson
D. Marcus Braswell, Jr.
Pedro A. Herrera
*Board Certified Labor
& Employment Lawyer
SUGARMAN & SUSSKIND
PROFESSIONAL ASSOCIATION
ATTORNEYS AT LAW
August 24, 2005
11 r-A
2801 Ponce De Leon Boulevard
Suite 750
Coral Gables, Florida 33134
(305) 529 -2801
Broward 327 -2878
Toll Free 1- 800 - 329 -2122
Facsimile (305) 447 -8115
City Commission
City of South Miami
c/o Maria Davis, City Manager
6130 Sunset Drive
South Miami, Florida 33143
Re: Summary of Proposed Ordinance Amendment —
City of South Miami Pension Plan
Dear Commission Members:
This firm represents the City of South Miami Pension Plan. Our client has directed that
we provide an overview of the enclosed proposed ordinance amendment to be considered by the
City Commission.
The Board of Trustees of the Pension Plan recommends adoption of this proposed
ordinance amendment to the existing code in order to comply with Chapter 185 of the Florida
Statutes.
Florida Law 2004 -21 specifically amended Section 185.05 of the Florida Statutes
allowing municipalities that receive state contributions under Chapter 185 of the Florida Statutes
to authorize trustees of the city's pension plan, when authorized by a participant, to make
deductions from monthly retirement payments and make direct payments to certain third parties.
The City of South Miami receives such state contribution under Chapter 185. The following
summarizes the necessary amendment to the existing code in order to provide such authority to
the Board of Trustees for the City of South Miami Pension Plan.
Section 16 -24. Limitations generally.
(e) Alienation of proceeds, levy, etc; prohibited. This section of
the code prohibits participants from assigning or alienating any
payments of pension benefits.
The proposed amendment would allow a participant to authorize the board of trustees,
withhold amounts from any monthly benefit payment and to pay directly to certain third parties
necessary amounts to pay for benefits being received through the city or the certified bargaining
agent and to make payments for child support or alimony.
This amendment allows for direct payment of continued group insurance provided by the
city that the city is required under Section 112.0801 to offer to all retirees.
112.0801 Group insurance; participation by retired employees. -Any state
agency, county, municipality, special district, community college, or district
school board which provides life, health, accident, hospitalization, or annuity
insurance, or all of any kinds of such insurance, for its officers and employees
and their dependents upon a group insurance plan or self- insurance plan shall
allow all former personnel who have retired prior to October 1, 1987, as well as
those who retire on or after such date, and their eligible dependents, the option of
continuing to participate in such group insurance plan or self - insurance plan.
Retirees and their eligible dependents shall be offered the same health and
hospitalization insurance coverage as is offered to active employees at a premium
cost of no more than the premium cost applicable to active employees. For the
retired employees and their eligible dependents, the cost of any such continued
participation in any type of plan or any of the cost thereof may be paid by the
employer or by the retired employees. To determine health and hospitalization
plan costs, the employer shall commingle the claims experience of the retiree
group with the claims experience of the active employees; and, for other types of
coverage, the employer may commingle the claims experience of the retiree group
with the claims experience of active employees. Retirees covered under Medicare
may be experience -rated separately fi°om the retirees not covered by Medicare
and from active employees, provided that the total premium does not exceed that
of the active group and coverage is basically the same as for the active group.
This amendment also allows for direct payment for child support of alimony, as required
by an appropriate court order, under the Alvarez case, 580 So.2d 1st DCA (Fla. 1991), which
makes the Retirement System subject to income deduction orders and provides the only
exception to the non - alienation provisions as set forth in Board of Trustees of the City General
Employees Pension Plan, City of Jacksonville v. Vizcaino, 653 So.2d 1012 (Fla. 1 st DCA 1994),
in which the Court held:
However, the QDRO exception to the prohibition against
assignment or alienation of pension benefits is of no assistance to
Anna because, as the parties correctly recognize, "governmental
plans" (defined as including plans established or maintained by a
political subdivision of a state) are expressly excluded from ERISA
coverage. 29 U.S.C. Secs. 1003(b)(1) & 1002(32).
Therefore, the board believes that enactment of this amendment should reduce
administrative activities in relation to third party payments and improve efficiency in delivering
pension benefits to retirees of the pension plan.
The Pension Plan actuary has provided a statement of no impact for your consideration
prior to final reading and enactment of this ordinance amendment.
We remain available to respond to any questions you may have on this matter.
Yours truly,
KENNETH R. HARRISON, SR.
KRH /'
cc: Board of Trustees, c/o Benefits USA
Larry Wilson, Actuary, Gabriel, Roeder, Smith & Co.
ORDINANCE NO.
AN ORDINANCE OF THE MAYOR AND CITY
COMMISSION OF THE CITY OF SOUTH MIAMI,
FLORIDA AMENDING THE CITY OF SOUTH MIAMI
PENSION PLAN, PROVIDING FOR COMPLIANCE WITH
CHAPTER 2004 -21, LAWS OF FLORIDA AND AMENDED
SECTION 185.05(6) OF THE FLORIDA STATUTES, TO
PROVIDE THAT PARTICIPANTS MAY AUTHORIZE
DIRECT THIRD PARTY PAYMENTS AS A DEDUCTION
FROM NET BENEFITS FOR SPECIFIC PURPOSES;
PROVIDING FOR SEVERABILITY; ` ORDINANCES IN
CONFLICT, AND AN EFFECTIVE DATE.
WHEREAS, the 2004 Florida Legislature enacted Chapter 2004 -21, Law of Florida,
which amended Section 185.05 of the Florida Statutes, creating new sub - section (6) to authorize
the trustees of the city's pension plan, when authorized by a participant or participant's
dependent, to make certain deductions from monthly retirement payments; and
WHEREAS, an amendment to the city code is necessary to permit such deductions; and
WHEREAS, the trustees of the City of South Miami Pension Plan have requested and
approved such an amendment as being in the best interests of the participants and beneficiaries
and improves the administration of the plan; and
WHEREAS, an actuarial impact statement is not necessary since this amendment is not a
change in plan benefits,
NOW, THEREFORE, BE IT ORDAINED BY THE MAYOR AND CITY
COMMISSION OF THE CITY OF SOUTH MIAMI, FLORIDA:
Section 1: Section 16 -24(e) of the South Miami Code of Ordinances is hereby
amended to read as follows:
Sec. 16 -24. Limitations generally.
(e) Alienation of proceeds, levy, etc; prohibited. No participant shall have
any right to assign, alienate, anticipate or commute any payments
hereunder; and, except as otherwise prescribed by law, no payment shall
be subject to the debts, contracts or engagements of any payee, nor to a
judicial process to levy upon or attach the same for the payment thereof2
except the recipient of any monthly benefit may authorize the board of
trustees to withhold from the monthly benefit those funds necessary to pay
for the benefits being received through the city, to pay the certified
bargaining agent of the city, and to make any payments for child support
or alimony.
I Section 2: If any section, clause, sentence or phrase of this ordinance is for
2 any reason held invalid or unconstitutional by a court of competent jurisdiction,
3 the holding shall not affect the validity of the remaining portions of this
4 ordinance.
5
6 Section 3. All ordinances or parts of ordinances in conflict with the provisions of
7 this ordinance are repealed.
8
9 Section 4: This Ordinance shall take effect immediately upon approval.
10
11 PASSED AND ADOPTED this day of , 2005
12
13 ATTEST: APPROVED:
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15
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17 CITY CLERK MAYOR
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19
20 1 St Reading —
21 2nd Reading —
22
23
24 READ AND APPROVED AS TO FORM COMMISSION VOTE:
25 Mayor Russell:
26 Vice Mayor Palmer:
27 Commissioner Wiscombe:
28 Commissioner Birts- Cooper:
29 CITY ATTORNEY Commissioner Sherar:
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34 G: \ \SMPF\ PLAN\ ORDN \HB25ICityPlan- OrdnAmendment