§ 2-534. Deferred retirement option program.

(a)

A deferred retirement option program is hereby created for eligible members whose most recent appointment to employment with the city as a permanent or regular employee occurred on or before October 1, 2012.

(b)

A member who is performing eligible service is eligible for participation in the DROP on the first day of the month coincident with or next following the completion of 27 years credited service, including limited participant service, and, if applicable, vesting service for former Gainesville Gas employees, and continuing up to the point in time at which the member has 35 years of regular employment, except as provided in subsection (g) below. Except as otherwise expressly provided for herein, upon entering into the DROP, employees may elect to apply unused sick leave hours (see subsection (p) for special provisions related to "GPD employees") or personal critical leave bank (PCLB) hours to attain the requisite years of credited service for eligibility to enter and for determining their accrued benefit, or may retain some or all of their unused sick leave or personal critical leave, for use during their employment while participating in the DROP. For service earned on or after October 1, 2012, no additional months of service shall be credited for unused sick leave or PCLB hours earned on or after October 1, 2012. In calculating service on or after October 1, 2012, the lesser number of months between the additional months of service credited for unused sick leave or PCLB hours earned on or before September 30, 2012 and months of unused sick leave or PCLB hours available to a member at the time of his or her entry into DROP shall be used. Sick leave and PCLB balances retained upon entry into the DROP and accrued while participating in the DROP shall not count as days or months of credited service when determining the maximum period of participation in the DROP in accordance with subsections (f) and (g) below. Any unused sick leave or PCLB remaining at the expiration of the DROP participation or period will be forfeited.

(c)

On the date of a member's entry into the DROP, the member's credited service, accrued benefit, and final average earnings shall be calculated as if the member had actually separated from service on that date and retired. There shall be no further member contributions after entry into the DROP, except as a re-employed retiree, if applicable. No additional credited service shall be earned while participating in the DROP. Changes in the plan shall not apply to members in the DROP, except as expressly provided.

(d)

Beginning with general (COLA) salary increases effective after October 2, 2000, a member must, in order to enter and continue to participate in the DROP, forego receipt of all general (COLA) salary increases effective after the member's entry into the DROP. Beginning with merit or progression through training increases effective after October 2, 2000, a member must, in order to enter and continue to participate in the DROP, forego receipt of all such increases effective after the member's entry into the DROP to the extent such increases would result in the members' base salary exceeding the top of the salary range of the classification the member was in, as it existed when the member entered the DROP, or after the October 2, 2000 general increase, whichever is higher.

In the case where the members' pay plan does not provide separately for (combines) general and merit increases, beginning with such salary increases effective after October 2, 2000, a member must, in order to enter and continue to participate in the DROP, forego receipt of all such salary increases effective after the member's entry into the DROP to the following extent: First, the amount of any general increase applied to the professional pay plan for the same fiscal year shall be deducted from such DROP participant's otherwise applicable increase. The remaining increase shall be provided, but only to the extent that such increase does not result in the member's base salary exceeding the top of the salary range of the classification the member was in, as it existed when the member entered the DROP, or after the October 2, 2000 increase, whichever is higher.

Members participating in the DROP remain eligible to receive a promotional increase but subsequent merit and progression through training or combined increases would be limited as described above.

(e)

The member shall select the retirement options as provided for in subsections 2-526(j) and (k) and shall designate any beneficiary in accordance with plan provisions and practices applicable to normal and delayed retirements.

(f)

The maximum period of participation in the DROP is 60 months from date of entry. Except as provided in subsection (g), participation in the DROP must cease and employment terminate at the conclusion of a total of 35 years of regular employment with the City of Gainesville and, if applicable, predecessor employers (RTS, Gainesville Gas), or a successor employer (sheriff) under F.S. § 112.0515 (1997).

(g)

Members who have more than 32 years of credited service, including limited participant service and, if applicable, vesting service for former Gainesville Gas employees, as of October 1, 2000, may participate in the DROP for up to 36 months. In order to take advantage of this "grandfathering" provision, a member otherwise eligible to enter the DROP must enter the DROP between October 1, 2000 and December 29, 2000. Such members (with over 32 years on October 1, 2000) electing to enter the DROP on or after December 30, 2000, shall be governed by the normal eligibility and duration requirements described herein.

(h)

A member may cease participating in the DROP prior to the expiration of the agreed upon (not to exceed the maximum allowed) DROP period only by terminating regular employment with the city. In the event that a member participating in the DROP fails to terminate regular employment on or before the conclusion of the DROP period, then the member's monthly retirement benefit shall cease to be paid at the conclusion of the DROP period, and any such amount(s) shall be forfeited to the plan until such time as the member terminates regular employment.

(i)

Effective with the date of DROP participation, the member's initial monthly benefit, including creditable service, final average earnings and the effective date of retirement shall be fixed. A DROP participant's deferred monthly benefit shall accrue in the plan pension fund on behalf of the participant, plus interest. Such interest for members whose DROP participation begins on or before October 1, 2012 shall accrue at an effective annual rate of six percent compounded monthly, on the prior month's accumulated ending balance, up to the month of termination or death. For members whose DROP participation begins on or after October 2, 2012, such interest shall accrue at an effective annual rate of 2.25 percent compounded monthly, on the prior month's accumulated ending balance, up to the month of termination or death. For members whose DROP participation begins on or after May 1, 2016, members shall have a one-time, irrevocable option for such interest to accrue at either (1) an effective annual rate of 2.25 percent compounded monthly, on the prior month's accumulated ending balance, up to the month of termination or death, or (2) a variable annual rate of not less than 0 and not more than 4.5 percent based on the plan's actual return rate for the previous plan year compounded monthly, on the prior month's accumulated ending balance, up to the month of termination or death. Retirement benefits and interest thereon shall continue to accrue in the DROP until the established termination date of the DROP, or until the participant terminates employment or dies prior to such date. Although individual DROP accounts shall not be established, a separate accounting of each participant's accrued benefits under the DROP shall be calculated and provided to participants annually.

(j)

The terminated DROP participant or, if deceased, such participant's named beneficiary, shall elect to receive payment of the DROP benefits in accordance with one of the options listed in subsection 2-526(n). For a participant or beneficiary who fails to elect a method of payment within 60 days of termination of the DROP, the plan will pay a lump sum, less any required withholding.

(k)

The decision to participate in the DROP is irrevocable once DROP payments begin. Upon deciding to participate in the DROP, the member shall submit, on forms required by the plan administrator:

(1)

A written election to participate in the DROP;

(2)

Selection of the DROP participation and termination dates, which satisfy the limitations stated herein. Such termination date shall be in a binding letter of resignation with the city, establishing a deferred termination date. The member may change the termination date within the limitations stated in subsections (f) and (g) of this section, but only with the written approval of the city;

(3)

A properly completed DROP application for service retirement as provided in this section; and

(4)

Any other information required by the plan administrator.

Once the employee has completed participation in the DROP, his/her regular employment will end and he/she shall be separated from employment; this separation shall be processed as a voluntary resignation.

(l)

Upon entry into the DROP, a member shall no longer be eligible for disability benefits under the city police officers and firefighters consolidated pension plan or the city employees' disability plan. In the event of death during the DROP period, the member shall be presumed to have retired on a normal or delayed retirement for the purposes of subsection 2-526(e), (g) or (h).

(m)

Except as provided in subsection (p) below, upon the termination of a member's (who has entered a DROP) regular city employment (for any reason, whether by retirement, resignation, discharge or death), the retirement benefits payable to the member or to the member's beneficiary (if the member selected an optional form of retirement benefit which provides for payments to the beneficiary) shall be paid to the member or beneficiary. Following the termination of a member's regular employment, the balance in the member's DROP account shall be payable in accordance with an option selected by the member. Regardless of the option selected by the member, the board of trustees has the right to accelerate payments in order to comply with Section 401(A)(9) of the Internal Revenue Code and the right to defer payments to comply with Section 415 of the Internal Revenue Code.

(n)

Nothing herein shall be construed to remove members who have entered the DROP from the scope of Section 8(d), Art. II, of the State Constitution, and F.S. § 112.3173(5)(f) (1999). Members who commit a specified offense while employed will be subject to forfeiture of all retirement benefits, including DROP benefits, pursuant to those provisions of law.

(o)

During DROP participation, a member shall be considered a retiree with deferred receipt of benefits for all plan purposes. For other purposes, except as described in subsection (p) below, the employee shall be considered an active employee of the city entitled to all rights of employment, except as otherwise provided.

(p)

Members who are employees of the Gainesville Police Department Communications Center at the time the combined communications center is activated, who are hired by the Alachua County Sheriff on or about said date (GPD employees) are eligible to enter and participate in the DROP, described herein, with the following provisos: Upon conclusion of the DROP period or termination of employment with the sheriff, whichever earlier occurs, subsection (j) and (m) of this section and subsection (b) of section 2-535 shall then apply. Only "city" sick leave designated at the time of hire by the sheriff (see Section 4.G of the Interlocal Agreement between the City of Gainesville, the Alachua County Sheriff, and Alachua County for a combined communications center, recorded in Official Record Book 2261, page 1682, of the Public Records of Alachua County) may be utilized for years of service under subsection (b) of this section. Only the equivalent of a maximum of 416 hours of any lump sum payment of vacation leave that the sheriff might allow to be made to the employee while employed by the sheriff and prior to entering the DROP may be included in earnings for purposes of calculating the accrued benefit.

(q)

Administration of program. The plan administrator shall make such rules and forms as are necessary for the effective and efficient administration of this subsection. The plan administrator shall not be required to advise members of the federal tax consequences of an election related to the DROP but may advise members to seek independent advice.

(Ord. No. 000051, § 11, 9-11-00; Ord. No. 120218, § 5, 9-10-12; Ord. No. 150213 , § 3, 4-21-16)