BenefitsSummary Plan Description 2010
The following Summary of Plan Provisions sets forth the Plan benefits in detail. For a copy of the full GESE Retirement Trust City of Miami Ordinance, click here.
Changes In Beneficiary After Retirement
Reemployment of Retirees
Disability Retirement Benefit
Return of Accumulated Contributions
Restoration of Service Credits
Cost-of-Living Allowance Benefit
Deferred Retirement Option Program ("DROP")
Transfer of Accumulated Leave
Excess Benefit Plan
Summary Plan Description 2010
SUMMARY OF PLAN PROVISIONS
Participation in the GESE Trust is a mandatory condition of employment for all employees except persons eligible to decline membership. Pursuant to Section 40-249 and Section 40-250 any regular and permanent employee of the City of Miami (the ďCityĒ) other than a fire fighter or police officer becomes a member upon employment unless he or she is a member of any other pension or retirement system supported wholly or in part by the City. An employee will cease to be a member if he or she is absent from service for more than three years of any five consecutive year period, withdraws his or her contributions, becomes a member of any other City-sponsored retirement plan or system, or becomes a beneficiary or dies. Membership Service is the service as an employee for which contributions to the GESE Trust are made as required.
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contribute ten percent of compensation to the GESE Trust. The City contributes
the actuarially determined amount necessary to fund the normal cost plus the
amortization of the unfunded accrued liability and non-investment expenses of
the GESE Trust.
Payback is a memberís contribution to the GESE Trust for creditable service for which other than regular contribution have been made. Contributions required for paybacks shall not be picked up by the City, but may be deducted from a memberís contribution. A member may receive credit for qualified military service or medical leave. Any member who takes an unpaid leave of absence for maternity or medical purposes may apply to the Board for membership credit up to a maximum of 180 days, or 240 days if the City denies light duty employment. The payback is available for 30 days after notification to the member and must be fully completed within one year. Contributions made by a member for maternity or medical membership credit may be a single lump-sum payment or equal installment payments which may be deducted from the memberís compensation.
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Average final compensation is the average annual earnable compensation during the greater of the last two years or highest two years of membership service for any member than began employment after May 24, 1984. For any member who became an employee before May 24, 1984, average final compensation is the annual earnable compensation during the greater of the last one year or the highest one year of membership service. However, the highest one year of annual earnable compensation cannot exceed the second highest year of annual earnable compensation by more than 15 percent, excluding any difference due to longevity, anniversary and/or negotiated cost-of-living increases.
Earnable compensation is an employee's base salary including pick-up contributions, for all straight time hours worked, plus assignment pay and payments received for vacation and sick leave taken, jury duty, and death-in-family leave taken. Earnable compensation does not include overtime pay, payments for accrued sick leave, accrued vacation leave, or accrued compensatory leave; holiday pay, premium pay for holidays worked, the value of any employment benefits or non-monetary entitlement; or any other form of remuneration.
Retirement is the memberís withdrawal from service with a benefit granted to the member pursuant to the provisions of this Plan.
Service is the active employment as an employee of the City. Creditable service is the membership credit upon which a member's eligibility to receive benefits under the retirement plan is based or upon which the amount of such benefits is determined.
Spouse is the lawful husband or wife of a member or retiree at the time benefits commence, unless a new designation has been made in writing to the Board.
(A) Service Retirement:
The minimum normal service retirement age is 55. Any member in service who has ten or more years of creditable service may elect to retire upon the attainment of normal retirement age. The basic retirement benefit equals three percent of the member's average final compensation multiplied by years of creditable service.
(B) Rule of 70 Retirement:
A member in service who has ten or more years of creditable service may elect a rule of 70 retirement on the basis of his or her combined age and creditable service equaling 70 or more points.
(C) Early Service Retirement Benefit:
A member in service who has 20 or more years of creditable service may elect to retire early with an immediate benefit. The early retirement benefit equals the actuarial equivalent of the basic service retirement benefit that otherwise would have commenced upon the attainment of age 55.
(D) Deferred Vested Retirement Benefit:
A member who ceases to be an employee for reasons other than death or willful misconduct, is not entitled to an immediate benefit, has completed at least ten years of creditable service, and has left his/her accumulated contributions on deposit with the Plan, would be eligible for a deferred vested retirement benefit commencing at age 55.
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4. OPTIONAL ALLOWANCES:
A member may receive
payment of retirement benefits under the plan in accordance with several
choices, or options, set forth below.
Option 2 Equal payment survivor annuity - A member may receive a reduced retirement allowance throughout his or her life with an equal sum being paid to the memberís designated beneficiary at the death of the member. If this option is chosen for a surviving spouse, the reduction shall be ten percent of the memberís benefit. If any person other than a surviving spouse is chosen as the beneficiary, the reduction shall be based on the actuarially equivalent sum.
Option 3 One-half payment survivor annuity - A member may receive a reduced retirement allowance payable for the life of the member with one-half of the memberís benefit being paid to a designated beneficiary at the death of the member. If this option is chosen for a surviving spouse, the reduction shall be two percent of the memberís benefit. If any person other than a surviving spouse is chosen as the beneficiary, the reduction shall be based on the actuarially equivalent sum.
Option 6(a) One-half payment retiree refund - A member may elect to withdraw the sum of his or her accumulated contributions credited as of the member's date of retirement, excluding all amounts picked up from the member's earnable compensation and credited to the COLA fund, between June 23, 1985, and September 30, 1993. Under this option, the member shall also receive a monthly service retirement allowance of one-half of the amount to which the member would have been entitled under this plan. This option has no survivorship benefit.
Option 6(b) Life annuity - A member may elect to receive his or her normal monthly service retirement allowance plus an additional five percent of such service retirement allowance for the life of the member, with no survivorship benefit.
Option 6(c) Surviving spouse annuity - A member may elect to receive an unreduced normal monthly service retirement allowance and direct the payment of a benefit of 40 percent of the member's monthly normal retirement allowance to be paid at the member's death to his or her spouse nominated and designated by him or her at the time of retirement, such benefit to be payable during the lifetime of such spouse.
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5. CHANGES IN BENEFICIARY AFTER RETIREMENT:
Any member who elects Option 6(c) pursuant to Section 40-255(j), may designate a new spousal beneficiary in accordance with procedures established by the Board; provided, that an actuarial valuation will be made following such election, and the benefit for the retiree will be recalculated so that it is the actuarial equivalent of the benefit payable to the original spouse; provided, further, that the original spouse must be alive at the time of the change in designated beneficiary, and he or she must not be entitled to any survivor benefit under the retirement plan by operation of law. It is intended that the City will pay only one survivor benefit for any member of the retirement plan and will not incur an increase in benefit costs by reason of change in designated beneficiary.
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6. REEMPLOYMENT OF RETIREES:
Should any retiree be reemployed by the City into a regular permanent full-time position, the benefits payable under the GESE Trust will be suspended during the period of re-employment. Upon termination of the period of re-employment with the City, benefits will be automatically restored on the first day of the month following the termination of re-employment. However, City Commission, Mayoral assistants and secretarial staff positions, as described in Civil Service Rule 1, Sec. 1.2 (a) may opt to continue collecting their pensions during their re-employment, but they may not accrue any further pension service credit.
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7. DISABILITY RETIREMENT BENEFIT:
A disability is the permanent and total incapacity to
perform useful and efficient service as an employee of the City as determined by
the board pursuant to the terms of the plan.
(A) Ordinary Disability Retirement Benefit:
Any member in service who has ten or more years of creditable service, may be retired by the Board on an ordinary disability retirement allowance; provided, that the physician retained by the Board after a medical examination of such member, shall certify that such a member is mentally or physically totally incapacitated for the further performance of duty not as a result of an accident in the actual performance of duty and is likely to be permanent, and that such member should be retired.
Upon retirement, for an ordinary disability, a member is entitled to receive a retirement allowance equal to three percent of 90 percent of the member's average final compensation multiplied by years of creditable service, paid in monthly installments. If the retirement allowance does not exceed 30 percent of the member's average final compensation, the calculation is performed based on the number of years which would be creditable to the member were the member's service to continue until the attainment of the normal retirement age. However, this resulting retirement allowance cannot exceed 30% percent of the average final compensation. The ordinary disability is not eligible for a return of accumulated contributions, optional allowances or survivorship benefits.
(B) Accidental or Service-Incurred Disability Retirement Benefit:
A member in service who has become totally and permanently incapacitated for duty as a result of an accident occurring while in the performance of his/her duty would be eligible for an immediate benefit payable for his/her lifetime. Upon death, 40 percent of that benefit would continue to be paid to the surviving spouse for the lifetime of such spouse.
Upon retirement for accidental disability, a member is entitled to receive a pension which is equal to 66 2/3 percent of the member's average final compensation. This disability is not eligible for a return of accumulated contributions or optional allowances.
(C) Service-Incurred Disability Benefit:
Any member who becomes totally and permanently incapacitated for duty as a result of tuberculosis, hypertension, or heart disease (which was not an existing condition at the time of employment) would be eligible for an immediate benefit payable for his/her lifetime.
Upon retirement, for a service-incurred disability, a member shall be entitled to receive a retirement allowance equal to three percent of 90 percent of the member's average final compensation, multiplied by years of creditable service. If the retirement allowance does not exceed 40 percent of the member's average final compensation, the calculation is performed based on the number of years which would be creditable to the member were the member's service to continue until the attainment of the normal retirement age. However, this resulting retirement allowance cannot exceed 40 percent of the average final compensation. This disability is not eligible for a return of accumulated contributions, optional allowances or survivorship benefits.
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8. DEATH BENEFITS:
(A) Ordinary Death Benefit:
Upon receipt by the Board of proper proofs of the death of a member in service who has three or more years of creditable service, there shall be paid to such person, if any, as the member shall have nominated by written designation duly executed and filed with the Board, otherwise to the member's estate, a benefit equal to a lump-sum payment of 50 percent of the earnable compensation received by the member during the year immediately preceding the member's death.
In the event a member who has become eligible for Service, Early Service, or Rule of 70 Retirement benefits dies before retirement, the member will be considered to have been retired on the date of death. In such event, the member's spouse will have the option of receiving the sum of the member's accumulated contributions together with interest to the date of payment or, if not exercising such option, the spouse will receive:
(1) Payment of 40 percent of the member's monthly retirement allowance which would have been payable to the member if he or she had attained normal retirement age;
(2) Payment of a retirement allowance equal to one percent of average final compensation for each year of service or fraction thereof if the member served in a certain executive position for a minimum of three years prior to May 23, 1985 and a maximum of ten years' of service.
(B) Service-Incurred Death Benefit:
If it can be determined that a memberís death was the result of an accident in the performance of duty and not caused by willful negligence on the part of the member based on proof that the death was the natural and proximate result of an accident occurring at some definite time and place while the member was in the actual performance of duty, the member is eligible for a service-incurred death benefit. The amount paid is equal to one-half of the member's average final compensation paid in monthly installments to the member's spouse. If there is no spouse, or if the spouse dies before the youngest child of the deceased member has attained the age of 18, then the benefit is paid to the children under such age divided in equal shares until they reach 18 years of age or die. If there are no children under the age of 18, then the benefit is paid to the dependent father or dependent mother to continue for life. If there are no such beneficiaries, the amount which otherwise would have been paid as an ordinary death benefit will be paid to the member's estate.
(C) Minimum Retiree Death Benefit:
If a retired member dies prior to having received 12 monthly retirement payments and prior to having an optional allowance become effective, the designated beneficiary will be paid a lump sum benefit equal to the remaining 12 monthly retirement allowance payments.
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9. RETURN OF ACCUMULATED CONTRIBUTIONS:
A member who terminates employment other than for retirement or death will be paid his/her accumulated contributions less any mandatory tax withholding upon demand, plus interest at the rate prescribed by the Board which will not be less than one percent per quarter of the contribution balance as of the end of the previous calendar year, including interest. Contributions may be rolled over directly to a qualified individual retirement account or another employer's plan.
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10. RESTORATION OF SERVICE CREDITS:
Under certain circumstances, a former member may restore service credits earned under a prior period of service by repaying the amount of the accumulated contributions previously returned to him/her.
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11. COST-OF-LIVING ALLOWANCE BENEFIT:
Every October 1st, each retiree will receive an annual COLA benefit increase
between $54 minimum and $400 maximum payable monthly after the retiree's first
anniversary of retirement has been reached.
For retirees exercising Option 6(a), each retiree will receive an annual COLA increase between $27 minimum and $200 maximum payable monthly.
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12. DEFERRED RETIREMENT OPTION PROGRAM ("DROP"):
Any employee who is eligible for a service or Rule of 70
retirement is eligible to participate in the DROP. Upon election of
participation, a member's creditable service, accrued benefits, and compensation
calculation are frozen and the DROP payment is based on the member's average
final compensation. The member's contribution and the City contribution to the
retirement plan for that member ceases as no further service credit is earned.
The member does not acquire additional pension credit for the purposes of the
pension plan but may continue City employment for up to a maximum of 36 months.
Once the maximum participation has been achieved, the participant must terminate
There are two DROP programs, the Forward Drop and the BACDROP. A member can participate in both programs simultaneously. The Forward DROP is a DROP benefit equal to the regular retirement benefit the member would have received had the member separated from service and commenced the receipt of benefits from the plan. The BACDROP is a DROP benefit actuarially calculated. A member may elect to BACDROP to a date, no further back than the date of the member's retirement eligibility date. The BACDROP period must be in 12 month increments, beginning at the start of a pay period, not to exceed 36 months. The benefits for the BACDROP will then be actuarially calculated to be the equivalent to the benefit earned at the date of retirement.
An individual account is created for each participant. The Board of Trustees of the retirement plan has established, by administrative rule, a series of investment vehicles which may be chosen by the participant. Any losses incurred on account of the option selected by the participant will not be made up by the City or the GESE Trust, and will be borne by the participant only. All interest will be credited to the member's account.
Upon termination of employment, a participant may receive payment from the DROP account in a lump sum distribution; or periodic payments. A participant may elect to rollover the balance to another qualified retirement plan, individual retirement account, an Internal Revenue Code Section 457 Plan, or an annuity. A participant may defer payment until the latest date authorized by Section 401(a)(9) of the Internal Revenue Code. DROP participation will not affect any other death or disability benefit provided under law or applicable collective bargaining agreement. If a participant dies before the account balances are paid out in full, the beneficiary will receive the remaining balance.
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13. TRANSFER OF ACCUMULATED LEAVE:
Members eligible to receive accumulated sick leave, accumulated vacation leave
or any other accumulated leave payable upon separation may elect, not later than
the year prior to the year of retirement, to have the leave transferred to the
GESE Trust. Members who fail to elect a transfer in the year prior to retirement
or other separation will receive payment in a lump sum at time of separation
with all attendant tax consequences.
Members may elect one of the following options within 30 days of separation. Members failing to elect a distribution option within 30 days of separation will be deemed to have elected Option 1 below:
Option 1 - Receive a lump sum equal to the transferred leave balance, or
Option 2 - Transfer the entire amount of the transferred leave balance directly to any eligible retirement plan, or
Option 3 - Purchase additional service credit as permitted by the Code. If the leave balance exceeds the cost of the service credit purchased, the balance shall be paid to the member in a lump sum.
If a member dies after retirement or other separation, but before any distribution is made, the election option is void. In such an event, any person who would have received a death benefit had the member died in service immediately prior to the date of retirement or other separation, will be entitled to receive an amount equal to the transferred leave balance in a lump sum. In the case of a surviving spouse or former spouse, an election may be made to transfer the leave balance to an eligible retirement plan in lieu of the lump sum payment. Failure to make such an election by the surviving spouse or former spouse within 60 days of the memberís death will be deemed an election to receive a lump sum payment.
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14. EXCESS BENEFIT PLAN:
The original plan effective date is October 1, 2000. The plan was established to fund the excess, if any, of the benefit earned under the GESE Trust without taking into account the Internal Revenue Code (IRC) Section 415 limits over the maximum benefit as limited under IRC Section 415. Membership consists of all members of the GESE Trust. There are no member contributions. The City contributes the actuarially determined amount necessary to fund normal cost.
Click here to download a full copy of the GESE Retirement Trust City of Miami Ordinance.