§ 16-41. Definitions and rules of construction.

(a) As used herein, unless otherwise defined or required by the context, the following words and phrases shall have the meaning indicated:

Accrued benefit means the benefit accrued by a member under the terms of the plan.

Accumulated contributions means a member's own contributions without interest. For those members who purchase credited service with interest and at no cost to the system, any payment representing the amount attributable to member contributions based on the applicable member contribution rate, interest and any required actuarially calculated payments for the purchase of such credited service, shall be included in accumulated contributions.

Act means the Employee Retirement income Security Act of 1974 (P.L. 93-406) and any regulations issued thereunder by the Department of Labor and the Internal Revenue Service, as that statute and these regulations shall be amended.

Actuarial equivalent means a benefit or amount of equal value, based upon the 1983 Group Annuity Mortality Table and an interest rate of eight (8) percent per annum.

Average annual compensation shall mean the average compensation received by a general employee during the period of five (5) consecutive calendar years which produces the highest average annual compensation. For an employee who does not receive compensation during five (5) consecutive calendar years, "average annual compensation" shall mean the average of the actual annual compensation received by the general employee.

Beneficiary means the person or persons entitled to receive benefits hereunder at the death of a member as provided in section 16-49 of the plan.

Board means the board of trustees, which shall administer and manage the system herein provided and serve as trustees of the fund.

City means City of Lake Wales, Florida.

Code means the Internal Revenue Code of 1986, as amended from time to time.

Compensation shall mean the total amount of all payments made by the city to an employee for services rendered to the city, including overtime pay and an employee's contributions to this plan. Compensation shall not include employee expense reimbursements, director's fees, contributions made by the city under the plan, nor contributions made by the city for group insurance, hospitalization and like benefits nor, except as otherwise provided in the preceding sentence, contributions made by the city under any other employee benefit plan it maintains. Notwithstanding the preceding, for computation periods ending prior to the effective date of Ordinance 88-19, "compensation" shall mean amounts paid to the employee by the city which were considered to be "earnings" pursuant to the city general employees' pension plan as the plan existed immediately prior to the effective date of Ordinance 88-19.

Compensation shall exclude the following: (1) overtime in excess of 300 hours and (2) accrued unused annual or sick leave ("accumulated leave") in excess of the hours accrued as of June 30, 2011 (hereinafter the "effective date"). The number of hours of accumulated leave used to calculate pension benefits shall be the lesser of the number of hours of accumulated leave on the effective date and the member's retirement date. For purposes of valuing accumulated leave earned prior to July 1, 2011: (i) compensation shall exclude accumulated leave hours in excess of the balance on June 30, 2011; (ii) accumulated leave balances shall be calculated using the future value of accumulated leave upon retirement; and (iii) the member's final accumulated leave balance accrued as of June 30, 2011 upon retirement shall be pensionable, notwithstanding the fluctuation of intervening accumulated leave balances after June 30, 2011. The intent of this amendment is to protect accrued benefits, consistent with Article I, Section 10 of the Florida Constitution.

Amounts which are paid to reimburse an employee for unused vacation and sick time shall be considered to be compensation which is earned during the calendar year in which such payment is made. Amounts which are paid to a former member as severance pay shall be considered to be compensation, but such amounts shall be considered to have been earned and paid in equal weekly increments over the period of time following the member's termination of service for which the severance pay was based, and shall be compensation in a particular calendar year only to the extent that it is considered to have been paid in that calendar year.

Compensation in excess of limitations set forth in Code section 401(a)(17) shall be disregarded. The limitation on compensation for an "eligible employee" shall not be less than the amount which was allowed to be taken into account hereunder as in effect on July 1, 1993.

Credited service means the total number of years and fractional parts of years of service as a general employee with member contributions, when required, omitting intervening years or fractional parts of years when such member was not employed by the city as a general employee. A member may voluntarily leave their contribution in the fund for a period of five (5) years after leaving the employ of the city pending the possibility of being rehired without losing credit for the time that he or she was a member of the system. If the member is not reemployed within five (5) years, then the accumulated contributions will be returned upon written request of the member. Upon return of a member's accumulated contributions, all of their rights and benefits under the system are forfeited and terminated. Returned contributions will be credited with interest as provided in section 16-46.

In the event that a member of this system has also accumulated credited service in another pension system maintained by the city, or has a period or periods of previous employment as a general employee, but is not eligible to receive credited service for this period or periods of previous employment for benefit calculation purposes, then such other credited service shall be used in determining eligibility for early or normal retirement. Such other credited service will not, however, be considered in determining benefits under this system. Unless otherwise provided herein only the member's credited service and compensation under this system on or after the member's latest date of membership in this system will be considered for benefit calculation. In addition, any benefit calculation for a member of this system who is or becomes eligible for a benefit from this system after he or she has become a member of another pension system maintained by the city, shall be based upon the member's average final compensation, credited service and benefit accrual rate as of the date the member ceases to be a general employee.

The years or fractional parts of years that a general employee previously served as a general employee with the city during a period of previous employment and for which period accumulated contributions were withdrawn from the fund, or for a period of previous employment for which credited service has not been otherwise received for benefit calculation purposes, shall be added to the member's years of credited service provided that:

(1) The general employee contributes to the fund the sum that he or she would have contributed had he or she been a member of the system for the years or fractional parts of years for which he or she is requesting credit, plus amounts actuarially determined such that the crediting of service does not result in any cost to the fund, plus payment of costs for all professional services and administrative costs rendered to the board in connection with the purchase of years of credited service.

(2) The request shall be made only once and made by the general employee on or before the later of twelve (12) months from the effective date of this ordinance or six (6) months from the date of the member's reemployment with the city as a general employee, whichever is later.

(3) Payment by the general employee of the required amount shall be made within six (6) months of the member's request for credit and shall be made in one (1) lump sum payment upon receipt of which credited service shall be given.

(4) There shall be no maximum credit under this definition and all years of credited service added pursuant to this definition shall count for all purposes.

Years and completed months of employment with the city during which time the member is participating in the deferred retirement option plan (DROP) described in section 16-46(j), shall not be counted as credited services for benefit purposes unless the member elects to continue employment with the city following the completion of the two (2) year DROP period. In the event of continued employment following participation in the DROP program, the member will receive credit for the DROP period in accordance with the required repurchase procedure set forth above.

Effective date means October 1, 1999, except as otherwise provided in the plan and except where an earlier effective date is required by reason of the application of the Tax Reform Act of 1986 and subsequent legislation, in which case the latest effective date required to comply with such act and subsequent legislation shall be substituted with respect only to the specific portions of the plan effected by such act and subsequent legislation.

Eligible employee is an individual who was a member before the first plan year beginning after December 31, 1995.

Employee means general employee unless such term is used in a general sense.

Fund means the trust fund established herein as part of the system.

General employee means any actively employed person in the regular full-time service of the city, including those in their initial probationary employment period, but not including police officers and firefighters, but shall include civilian, clerical and other employees of the police and fire departments. A full time employee shall be deemed to be one whose customary employment is for twenty (20) or more hours per week and five (5) or more months per year.

General counsel means the attorney retained by the board to represent it with respect to the plan.

Member means an actively employed general employee who fulfills the prescribed membership requirements and does not elect to opt-out. Benefit improvements which, in the past, have been provided for by amendments to the system adopted by city ordinance, and any benefit improvements which might be made in the future shall apply prospectively and shall not apply to members who terminate employment or who retire prior to the effective date of any ordinance adopting such benefit improvements, unless such ordinance specifically provides to the contrary. Member shall also include any opt-out employee under section 16-42(c)(2) who elects to join the Plan and is determined by the board of trustees to have fulfilled the requirements set forth in section 16-42(d).

Opt-out employee means an actively employed general employee employed in a position defined as pay grades 202—300, who elects to establish a qualified tax deferred pension plan in accordance with the Internal Revenue Code and rules as promulgated by the Secretary of the Treasury, and receive benefits in accordance with section 16-42(c).

Plan means the City of Lake Wales General Employees' Pension Plan and Trust.

Plan year means the twelve (12) month period beginning October 1 and ending September 30, of the following year. The plan year shall be the computation period for the purposes of the plan. The change in plan year shall be effective January 1, 1998.

Retiree means a member who has entered retirement status.

Retirement means a member's separation from city employment with eligibility for immediate receipt of retirement benefits under the system.

Spouse means the lawful wife or husband of a member or retiree at the time benefits become payable.

System means the City of Lake Wales General Employees' Pension Plan and Trust as contained herein and all amendments thereto.

(b) Words used in the masculine shall apply to the feminine where applicable, and wherever the context of the plan dictates, the plural shall be read as the singular and the singular as the plural.

(Ord. No. 99-02, § 2, 5-4-99; Ord. No. 99-11, § 2, 9-21-99; Ord. No. 2006-50, § 1, 12-5-06; Ord. No. 2012-06, § 1, 4-2-12; Ord. No. 2015-01, § 1, 01-20-15)