Sec. 11-244. - Accounting generally.

(a)

The assets of the system shall be held for the express purposes set forth in the provisions of this article subject to the conditions prescribed in this section. An adequate system of accounts and records shall be established and maintained that will give effect to the requirements of this article. All assets of the system shall be credited to designated reserve accounts according to the purposes for which they are held, as follows:

(1)

Members' contribution reserve.

a.

That portion of the amounts contributed by members to this system on or after the effective date, representing seven percent of salary, shall be credited to this reserve. An individual account shall be maintained for each member to which shall be credited the amount of such contributions.

b.

Upon retirement for service or disability, the accumulated contributions to the credit of the member shall be transferred from this reserve to the retirement reserve. Refunds of member contributions paid upon separation or death of a member shall be charged to this reserve.

c.

Member contributions picked up by the city shall be paid from the same source of funds used for the payment of compensation to a member. A deduction shall be made from a member's compensation equal to the amount of his contributions picked up by the city. This deduction, however, shall not reduce his compensation for purposes of computing benefits under the system pursuant to this section. Picked up contributions shall be transmitted to the system in accordance with the provisions of subsection 11-243(4).

(2)

City contribution reserve. All amounts contributed by the city in accordance with the provisions hereof, except contributions for administrative expense, shall be credited to this reserve.

a.

All income from investments, including gains from investment transactions, shall be credited to this reserve. All losses on investments and amounts required for interest on the other reserves shall be charged hereto.

b.

Upon the granting of any annuity for service, disability or death, an amount representing the excess of the actuarial value of the annuity over the accumulated contributions of the member shall be transferred from this reserve to the retirement reserve.

c.

If at the close of any year it shall be determined by actuarial valuation that the balance in the retirement reserve is insufficient to meet the liability for the annuities chargeable thereto, an amount equal to such deficiency shall be transferred from this reserve to the retirement reserve.

(3)

Retirement reserve. Upon the granting of any annuity for service, disability or death, the accumulated contributions of the member in his individual account and an amount representing the actuarial value of the member over such accumulated contributions shall be transferred from the members' contribution reserve and city contribution reserve, respectively. Hereafter, all payments by the system on account of any annuity shall be charged to this reserve.

(4)

Administrative expense reserve. Amounts contributed by the system for administrative expense shall be credited to this reserve. All expenses of administration of the system shall be charged to this reserve. The board shall certify to the city annually the amount of its requirements for administrative expenses. To provide for the initial expenses incident to the organization and establishment of the system, the city shall contribute, upon the adoption of this article, a sum estimated by the board as being necessary for that purpose.

(5)

Actuarial studies. An actuarial survey of the operating experience of the system, as a check of the mortality, turnover, disability, interest and other actuarial factors assumed in calculations of liabilities and costs shall be made at least once every five years by an actuary engaged by the board. An annual actuarial valuation shall be completed as of the close of each fiscal year for the purpose of establishing the financial condition of the system and as a check on the adequacy of the reserves of the system.

(b)

Any excess balance in the retirement reserve as determined by actuarial valuation shall be applied to reduce the city's contributions in the succeeding year, and deficiency in the retirement reserve, which shall be charged to the city contribution reserve, shall be removed by an increase in the city's contribution rate for the succeeding fiscal year. Such adjustments as may be required in this or any other reserve shall be made upon recommendation of the actuary.

(Rev. Ords. 1987, § 11-245)