| | | | | | | |  | Ordinances - R5 E
COMMISSION MEMORANDUM |
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| | | | | | | | | TO: | Honorable Mayor and Members of the City Commission | | | FROM: | Jimmy L. Morales, City Manager | | | DATE: | May 16, 2018 | | | | 1:30 p.m. Second Reading Public Hearing
| | SUBJECT: | AN ORDINANCE OF THE MAYOR AND CITY COMMISSION OF THE
CITY OF MIAMI BEACH, FLORIDA, AMENDING THE FIREFIGHTERS'
RELIEF AND PENSION FUND TO COMPLY WITH APPLICABLE
PROVISIONS OF THE INTERNAL REVENUE CODE AND
REGULATIONS THEREUNDER; AMENDING THE RELATED
SPECIAL ACTS OF THE CITY BY AMENDING ARTICLE VII,
ENTITLED "FIREFIGHTERS' RELIEF AND PENSION FUND," BY
AMENDING SECTIONS 36, 37, 42, AND 43; PROVIDING FOR
SEVERABILITY; REPEALER CODIFICATION; AND AN EFFECTIVE
DATE. |
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| | | | | | | | RECOMMENDATION
| | The Miami Beach Firefighter’s Relief and Pension Fund Ordinance was approved on first reading on April 11, 2018. It is further recommended that the second reading be scheduled for the May 16, 2018 meeting. |
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| | | | | | | | ANALYSIS
| The proposed amendments to the Miami Beach Firefighter’s Relief and Pension Fund have been prepared by the law firm of Holland and Knight and are required for compliance with the Internal Revenue Code. Attached is the Internal Revenue Service (IRS) determination letter dated January 25th, 2017. An Internal Revenue Service “determination letter” is issued in response to a request as to the qualified status of a retirement plan, and applies only to the employer and the plan participants on whose behalf it was issued.
The proposed amendments satisfy the IRS requirements for plan qualification. There are several legal and practical advantages to obtaining a determination letter. One legal advantage is that an IRS determination letter provides a definitive analysis of whether a plan is qualified. It also provides the basis for retroactive relief if the Service later changes its position. One practical advantage of obtaining a determination letter is that the City’s auditors will be less likely to question the qualified status of the Plan.
While public employers that sponsor retirement plans are not required to apply for a determination letter, receiving a favorable determination letter provides documentation that the Plan satisfies the applicable qualification standards. The proposed amendments satisfy the IRS requirements for plan qualification. There are several legal and practical advantages to obtaining a determination letter. One legal advantage is that an IRS determination letter provides a definitive analysis of whether a plan is qualified. It also provides the basis for retroactive relief if the Service later changes its position. One practical advantage of obtaining a determination letter is that the City’s auditors will be less likely to question the qualified status of the Plan.
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| | | | | | | | CONCLUSION
| | We have prepared an ordinance incorporating the IRC compliance amendments. The amendments will not result in additional cost to the City since all funding comes from state premium taxes in Ch. 185, Florida Statutes. Because of the nature of the 185 plan benefits, these changes will not have any actuarial impact. The Miami Beach Firefighter’s Relief and Pension Fund should be amended as set forth herein. |
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| | | | | | | | FINANCIAL INFORMATION
| | Because of the nature of the 185 plan benefits, these changes will not have any actuarial impact. |
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| | | | | | | | Legislative Tracking
Human Resources |
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| | | | | | | | Sponsor
Commissioner John Elizabeth Aleman |
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