§ 28. BACKDROP Retirement Option Plan.

(1)

BACKDROP Retirement Option Plan. The BACKDROP Retirement Option Plan, hereinafter referred to as the "BACKDROP," allows any eligible member who has elected to participate in the BACKDROP, hereinafter referred to as a "BACKDROP participant," to receive a lump-sum payment, or other payment, in addition to a monthly pension, upon termination of employment. No benefits shall be paid under this section unless the BACKDROP participant has terminated employment.

(2)

BACKDROP Eligibility. Any member who is an employee of the police department on July 1, 2003, or initially becomes employed after July 1, 2003, may elect to participate in the BACKDROP following the date upon which the member completes 21 years of credited service as a full-time police officer with the City of Orlando and is eligible for a service retirement pension. A member may participate in the BACKDROP only once.

(3)

BACKDROP Participation.

(a)

A member may apply to participate in the BACKDROP by submitting an application to the Board of Trustees, which shall include the following:

1.

A written election to participate in the BACKDROP. Once submitted to the Board of Trustees, this election will be irrevocable.

2.

Selection of the BACKDROP participation and termination dates that satisfy the limitation stated in subsections (2) and (5). Such termination date shall be included in a binding letter of resignation.

3.

A properly completed BACKDROP application for a service retirement pension.

4.

A properly completed designation of named beneficiaries in the event the member dies while having funds remaining in a BACKDROP account.

5.

Any other relevant information as may be required by the Board of Trustees.

(b)

The effective date of BACKDROP participation for a participant who has elected to receive benefits under the pension plan shall be the first day of the month selected by the member to begin participation in the BACKDROP.

(c)

A BACKDROP participant shall not accrue additional credited service under the pension plan after the effective date of BACKDROP participation.

(4)

Benefits Payable Under the BACKDROP. Under a BACKDROP, an eligible member may retire with a retroactive date of retirement. A member may not select a retroactive retirement date earlier than the date upon which the member first became eligible for a service retirement pension, and in no event shall the retroactive date of retirement be more than 36 months prior to the date of BACKDROP election. The monthly service retirement pension shall be determined as of the retroactive retirement date. The member shall then be credited with an account balance in a BACKDROP account that is equal to the amount the member would have received during the BACKDROP period had the member received a regular service retirement pension on the retroactive retirement date. Upon termination of employment, the BACKDROP participant shall receive or transfer the balance of this BACKDROP account, pursuant to subsection (9), and shall begin to receive the monthly service retirement pension adjusted to reflect the retroactive retirement date.

(5)

BACKDROP Participation Duration.

(a)

An eligible member may participate in the BACKDROP for a period not to exceed 36 months. Notwithstanding, BACKDROP participation may not commence or continue beyond the date when the member's combined years of credited service and time in the BACKDROP equal 360 months.

(b)

Notwithstanding the provisions of paragraph (a), for 60 days after this act becomes law, a member with more than 324 months of credited service may elect the BACKDROP option and shall not be subject to combined years of credited service and BACKDROP participation limitation of 360 months. Said member is subject to the maximum BACKDROP participation period of 36 months. A member with more than 324 months of credited service as of the effective date of BACKDROP who does not elect to participate in the BACKDROP, as set forth herein, during this one-time window period shall forfeit the right to deviate from the conditions for participation in the BACKDROP set forth in paragraph (a).

(6)

BACKDROP Accounts. Individual BACKDROP accounts shall be established to account for each BACKDROP participant's accrued BACKDROP benefits, but there shall be no requirement that funds be segregated for any BACKDROP participant. In the case of a member who selects the BACKDROP option, the amount of that member's pension contributions made during the BACKDROP period shall not be refunded or credited to the member.

(7)

BACKDROP Benefits Earnings. Any BACKDROP participant's BACKDROP account shall accrue earnings at 8 percent simple interest compounded annually, unless the parties otherwise agree.

(8)

Cost-of-Living Increase. A BACKDROP participant will not be eligible to participate in cost-of-living increases during the BACKDROP period. Cost-of-living increases will be made pursuant to section 18, after the BACKDROP participant's termination of employment.

(9)

Payment Options and Conditions.

(a)

Following the termination of employment, the BACKDROP participant, or if deceased such BACKDROP participant's beneficiaries, shall elect on forms provided by the Board of Trustees to receive payment of the balance of the BACKDROP account in accordance with one of the options listed below. For a BACKDROP participant or beneficiaries who fail to elect a method of payment within 60 days of termination of employment, the Board of Trustees shall pay the balance of the DROP account in one lump sum as provided in subparagraph 1.

1.

The balance of the BACKDROP account, less any taxes remitted to the Internal Revenue Service, shall be paid to the BACKDROP participant or beneficiaries.

2.

The balance of the BACKDROP account shall be paid directly to the custodian of an eligible retirement plan as defined in applicable provisions of the Internal Revenue Code. However, in the case of an eligible rollover distribution to the widow or widower as a beneficiary, an eligible retirement plan is an individual retirement account or an individual retirement annuity as described in applicable provisions of the Internal Revenue Code.

3.

The balance of the BACKDROP account shall be paid by a method that is in compliance with the Internal Revenue Code and as adopted by the Board of Trustees.

(b)

All payments and benefits shall be made in accordance with applicable provisions of the Internal Revenue Code.

(10)

Death of a BACKDROP Participant. Upon the death of a BACKDROP participant, the named BACKDROP beneficiaries shall be paid the balance of the BACKDROP account in accordance with subsection (9). Other pension benefits due to the participant's survivors shall be paid in accordance with applicable provision of this pension plan.

(11)

Cost of Benefits. Any actuarially determined additional cost resulting from the benefits in sections 2 and 4 of this bill shall be borne by the members of the pension plan.

(Laws of Fla. 2003-339, §4)