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City of Lake Wales, Florida Human Resources Department
General Employee Pension

To: All General Employee Pension Members:

This is designed to acquaint employees with the major provisions of the General Employee Defined Benefit (DB) Retirement Plan. This does not attempt to cover in detail all of the technical information contained in the Ordinance, but is intended to offer a concise description of the benefits provided under the Plan.

The most frequently asked questions and respective responses related to the DB Plan are covered in this document. The complete DB Plan Ordinance is available through the (1) Human Resources Office (2) General Employees Pension Board Members; and (3) City Intranet.

The DB Plan provides a retirement replacement income equal to 2.5% per year of service of pensionable earnings. When combined with other retirement assets, e.g., social security and personal savings, etc., you could enjoy a considerable life long income.

The City's DB Plan is a major benefit in connection with your City employment. This is but one way of recognizing the dedicated valuable service rendered by our City employees in maintaining the quality of life we enjoy in this community.


Sandra D. Davis
Sandra D. Davis
Human Resources Director


This summary explains how the City of Lake Wales General Employees Defined Benefit Retirement Plan works and the benefits it provides. Intended only as a guide, this Summary Plan Description neither modifies nor replaces the full test of the Ordinance under which the Plan operates. (See the General Employee Defined Benefit Retirement Plan Ordinance 99-02, located on City Intranet, in Human Resources Department and from the General Employees Pension Board Members.

How do I know if I am eligible to participate in the General Employee Defined (DB) Retirement Plan?

If you are an active general employee in regular full-time position in the City, including those in their initial probationary employment period, but not including police officers and firefighters, but shall include civilian, clerical and other employees of the police and fire departments. A full time employee shall be deemed to be one whose customary employment is for twenty (20) or more hours per week. Employees in pay grades 200-300 can elect to participate in the Defined Contribution Retirement Plan (401a).

When do I become eligible for normal retirement Benefits?

You may retire at any time after you have reached the age sixty (60) with ten (10) years of credited service.

How is the amount of my normal retirement benefits computed?

The amount of normal retirement annual pension is 2.5% for each year of credited service times your Final Average Earnings.
Final Average Earnings is the average compensation received by a general employee during the period of five consecutive calendar years which produces the highest average annual compensation.
For example, if your Final Average Earnings are $30,000 and you retire with 25 years of credited service, the annual pension would be $18,750 (25 x 2.5% x $30,000).

When you calculate my pension, what is included in my earnings?

Earnings means that base salary paid to you for personal services rendered to the City. Earnings include regular pay and amounts paid for shift differential, overtime, longevity pay, sick, vacation, personal leave, holiday pay, compensatory time, etc.

Can I retire before I am eligible for normal retirement benefits?

You can retire with an early retirement pension if you reach age 55 with 10 years of credited service.

How is my early retirement pension computed?

An early retirement pension is computed the same way as a normal retirement pension; based on your Final Average Earnings and credited service at the time of retirement. However, the amount is reduce by one fifteenth (1/15) for each of the first two and one-half (2.5) years, and one-thirtieth (1/30) for each of the next two and one-half (2.5) years.

For example, if retiring at age 55 and 15.4778 years of service with Final Average Earnings of $23,646.89, your pension would be reduced :

(YOS) 15.4778 X .025 X $23,646.89 X .5417 = $4,956.58 (annual benefit)

How long are pension Payments made?

Upon your retirement, pension benefits will be paid monthly only for as long as you live unless another option is selected. This form of payment is called Life Annuity.

Can I provide for payments to continue to a beneficiary upon my death?

Yes, instead of the Life Annuity option, you can provide protection for a survivor pension beneficiary by selection other optional forms of payment. These optional forms of payment are computed to be the actuarial equivalent of the Life Annuity option pension. This means all of the optional forms of payment have the same cost to the Retirement Plan at the time you retire. They are made available as a convenience to you in planning your personal retirement program.

Once pension payments start, you cannot change the optional form of payment or your survivor pension beneficiary.

What happens if I leave City Employment Before I can retire?

If you terminate City employment (other than by death or disability) after you have completed 10 or more years of credited service, but have not reached the required age, and you leave your accumulated contributions in the Plan, you will be eligible for a deferred pension. Your pension would be based on your final average earnings, credited service and benefit provisions in effect at the time you leave City employment. In order to begin receiving a pension, you must submit a written application the Plan Administrator upon reaching your early or normal retirement date.

If you elect a refund of accumulated member contributions (including interest) after termination of employment or if your assets are transferred to the Defined Contribution Plan, you will forfeit your right to any pension from the Defined Benefit Plan.

What if I leave City employment before I have the required 10 years of credited service?

You will be refunded the total amount of your contributions together with credited interest.

Are benefits paid if I die before I retire?

No, the beneficiary of a member who dies before receiving monthly benefits shall receive a refund of one hundred (100) percent of the total contributions made by the member, with simple interest.

What happens if I am disabled?

Each member with ten (10) years of credited service who is determined by the Social Security Administration to qualify for social security disability benefits, shall, after such determination, be entitled to a monthly disability pension equal to the actuarial equivalent of the member's accrued retirement pension as of the date benefits commence.

Who pays for retirement benefits?

Both you and the City of Lake Wales contribute toward the cost of pension benefits. Your current contribution is 5% of your salary. The City contributes actuarially determined amounts required to maintain the pension plan in sound condition as required by state law.

Can I ever lose the contributions I made to the Plan?

No. Either you, your designated beneficiary, or your estate will get a payment from the Plan equal to your contributions plus interest.

What happens to the pension contributions?

All of the pension contributions are placed with professional investment management companies under the supervision of the Pension Board. In addition, an actuarial valuation and independent audit of the Plan is conducted annually. Funds are committed to a variety of investment options, with the objective of providing security and growth of money invested.

Who administers the Defined Benefit Plan?

The General Employees Pension Board. The Pension Board is the trustee of the Plan and designates a Plan Administrator to administer its provisions; currently, the Finance Director is the Plan Administrator.

What are my medical benefits under the DB Retirement Plan?

Medical benefits established by City policy are not part of or included in the DB Retirement Plan (see current PAP for specific information).

What is A DROP Deferred Retirement Option Plan?

Any employee who has satisfied the requirements for normal retirement may elect to withdraw from the retirement system while continuing to be an employee of the City for a period of up to five (5) years. During the DROP period, the employee will no longer make contributions to the pension fund and benefits accruals would cease at the date of withdrawal.

Can I purchase prior Military Service?

Yes, the years that an employee served on active duty in the military service of the Armed Forces of the United States or the United States Merchant Marine, voluntarily or involuntarily, honorably or under honorable conditions, prior to employment with the City can be added to the member's years of credited service. The employee has to contribute to the fund the sum that the employee would have contributed, based on the employee's salary and the contribution rate in effect at the time that the credited service is requested, had the employee been a member of the retirement system. All costs associated with the purchase of prior military service is paid solely by the employee.

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