The City of Gainesville has established and maintains two Pension Plans for its employees. The Consolidated Police Officers’ and Firefighters’ Retirement Plan covers all Firefighters and Police Officers. The General Employees Pension Plan covers all other regular employees. Participation in either Pension Plan requires a mandatory contribution from both the Employee and the City of Gainesville.
The City of Gainesville’s Pension Plans are defined benefit pension plans providing retirement, termination, disability and death benefits. The Consolidated Police Officers’ and Firefighters’ Plan is established under the City of Gainesville Code of Ordinances, Chapter 2, Article VII, Division 8. The Employees’ Pension Plan is established under City of Gainesville Code of Ordinances, Chapter 2, Article VII, Division 5. Because the plans are defined benefit plans, the ultimate benefit depends upon factors such as compensation level, years of service, plan multiplier and the form in which the benefits are paid at retirement.
Summary Plan descriptions are available for both the Consolidated Police Officers’ and Firefighters’ Plan and the Employees’ Pension Plan. These summary plans are only intended to introduce employees to the Plans and answer the most frequently asked questions.
Deferred Retirement Option Program (DROP)
The City of Gainesville allows certain of its employees, meeting specific criteria, to participate in our deferred retirement option program (DROP) if they so choose. This allows these employees to retire and received benefits under their respective pension plans while delaying termination for a period of up to 60 months. As DROP participants, employees continue to work and earn salaries while their monthly retirement benefits are placed in a separate account which they receive at the end of their DROP participation.
Retiree Health Savings (RHS) Plan
The City of Gainesville provides the Retiree Health Savings (RHS) Plan which serves as a tool to help employees save money for post-employment medical expenses. Mandatory contributions are governed by union contract or City policy and deposited to RHS accounts on a biweekly basis. The money goes in tax-free, and when withdrawn for qualified medical, dental, vision or long-term care expenses after retirement, the reimbursements from the account are tax-free. Presently these monies can only be accessed upon exit of employment.
Supplemental Retirement Plans
In addition to the City’s mandatory pension plan, employees can also contribute to the ICMA 457 Deferred Compensation Plan. Employees can save tax-deferred money for retirement with the convenience of pretax payroll deductions. Contributions are taxed only upon withdrawal from your account and there is no penalty associated with the withdrawal of your 457 money after leaving employment. Withdrawals may not be made while you are still employed except under an extreme hardship condition as defined by the IRS.
Employees are also able to contribute to a ROTH IRA through payroll deduction. Contributions in a ROTH are made after taxes, however, the growth is tax deferred and if the account is held for five years and the participant is age 59 ½ there will be no taxes on any amounts withdrawn.