§ 2-54. Deferred retirement option plan (DROP).

1.

There is hereby created a DROP Plan.

2.

Eligibility. Effective October 1, 2003, any firefighter who is a Tier One member of the City of Lauderhill Firefighters' Retirement Trust Fund is eligible to enter the DROP on the first day of the month following the participant's completion of twenty (20) years of credited service or upon earning a pension benefit equal to eighty (80) percent. If a Tier One member enters the DROP more than ninety (90) days after attaining the eighty (80) percent accrued benefit, the amount of time after the accrual of the eighty (80) percent benefit until the entry into the DROP will result in a commensurate reduction in the maximum time allowed for DROP participation. All those persons who are eligible to enter the DROP may enter into a five-year DROP at any time during the ninety (90) days window following the effective date of this section. Tier Two members may enter into the DROP on the first day of the month following the Tier Two member's completion of twenty-five (25) years of credited service. A Tier Two member may participate in the DROP for a maximum of sixty (60) months. The number of months a Tier Two member may participate in the DROP shall be reduced by one (1) month for each month of eligibility following the completion of twenty-five (25) years of credited service during which the member does not participate in the DROP.

3.

The maximum participation in DROP shall be sixty (60) months, except as provided in subsection 4, below. All those persons who are DROP participants on the effective date of the adoption of this section may extend their DROP participation for an additional number of months so that their total number of months does not exceed sixty (60).

4.

Retroactive entry into the DROP. If a firefighter has completed twenty (20) years of credited services as of October 1, 2000, and elects within a ninety-day period after the enactment of this section to enter the DROP, the firefighter may elect to enter the DROP retroactively to October 1, 2000. In such event, the firefighter's pension benefit will be calculated in accordance with that firefighter's credited service and average final compensation as of October 1, 2000. All contributions paid by the firefighter will be deposited into the firefighter's DROP account. The maximum participation in the DROP will be thirty-six (36) months.

5.

Calculation of retirement benefits upon entering the DROP. Upon entering the DROP, the employee shall not receive any additional creditable service for pension purposes. Additionally, the amount of average final compensation for calculation of pension benefits shall be determined as of the date of entering the DROP. No payment shall be made for accrued unused leave upon entering the DROP, nor shall the amount of accrued unpaid leave be used in the calculation in the amount of pension benefits.

6.

Election of optional forms of payment. Upon entering the DROP, the firefighter must elect an optional form of payment. The initial election of an optional form of benefit payment, may be changed in accordance with section 2-47.

7.

Contributions. Upon the effective date of the firefighter's commencement of participation in the DROP, the firefighter's contribution shall be discontinued.

8.

Irrevocable resignation. The City of Lauderhill Firefighters' Retirement System shall promulgate the appropriate administrative forms for administering the DROP, which forms must include, at a minimum, an irrevocable resignation from employment of the city, which is effective no more than three (3) years from the date of entry into the DROP. The resignation is irrevocable. A DROP member may actually separate from service prior to the expiration of the three-year period, but may not continue in the employ of the city as a firefighter after the three (3) year period. A DROP member may participate in the DROP only once.

9.

Limitation or disqualification for other benefits. Upon commencement of participation in the DROP, the employee shall not be eligible for disability or pre-retirement death benefits.

10.

Payments to DROP account. The monthly retirement benefits, including any variable benefits paid pursuant to section 2-43 that would have been payable had the member elected to cease employment and not join the DROP, shall be deposited in the participant's DROP account. The money in all participants' DROP accounts will be commingled with all other assets of the fund, but separate accountings shall be made. On each October 1, January 1, April 1, and July 1, the participant's DROP account shall be credited at a rate of interest equal to the actual rate of return achieved by the trust fund net of administrative expenses, as determined by the board of trustees. Alternatively, at the option of any Tier One member, the Tier One member's DROP account will be paid a fixed amount as determined by the board of trustees. In no event will this fixed amount be greater than the actuarially assumed investment earnings. Following resignation and prior to distribution, a rate of interest, as determined by the board of the trustees, shall be credited to the participant's DROP account. Tier Two members shall not have the option of receiving a fixed amount in their DROP account. The DROP variable interest rate for Tier Two members shall have a floor of zero (0) percent.

11.

Distribution.

a.

Upon termination of a DROP participant's employment with the city as a firefighter, for any reason, the retirement benefits payable to the participant or to the participant's beneficiary (if the participant selected an optional form or retirement benefit which provides for payments to the beneficiary) shall be paid to the member, or, if the member is deceased, to the member's designated beneficiary or, if there is no surviving designated beneficiary, then to the member's estate and shall no longer be credited to the participant's DROP account.

b.

Within thirty (30) days following the end of any calendar quarter after the termination of the participant's employment as a firefighter, for any reason, the balance credited to the participant's DROP account shall be payable at the participant's option in either of the following fashions:

(i)

All accrued DROP benefits, less withholding taxes remitted to the Internal Revenue Service, will be paid in a single lump sum payment to the DROP participant; or if the firefighter is deceased, to the surviving designated beneficiary; or if there is no surviving designated beneficiary, to the estate; or

(ii)

The benefit may be paid as a direct rollover into any qualified plan that accepts rollovers, as defined in Section 402(c)(8)(B). If the benefit is to be paid to a designated beneficiary's qualified plan, the transfer shall be to an individual retirement account or annuity as described in Section 402(c)(9).

12.

Death of a DROP participant. If a DROP participant dies before his or her account balance is paid in full, the participant's surviving designated beneficiary, or if there is no surviving designated beneficiary, the participant's estate, shall have the same rights as the participant to elect and receive the same benefit options as available to retired firefighters. DROP payments to the beneficiaries or estates shall be in addition to any retirement benefits payable to the designated beneficiary.

13.

Administrative rules and regulations. The board of trustees shall have authority to promulgate administrative rules and regulations for the carrying out of the DROP, including the withholding of monies from the DROP payments for a period of time as sufficient to insure that the trust fund will not absorb any loss as a result of a negative rate of return in the DROP account.

(Ord. No. 01O-09-58, § 2, 9-24-01; Ord. No. 04O-07-152, § 3, 9-13-04; Ord. No. 11O-05-123, § 4, 6-13-11)