ARTICLE III. - MUNICIPAL EMPLOYEES' PENSION FUND
Part of the Code of Ordinances of Warwick, RI.
The text
DIVISION 1. - GENERALLY#
Sec. 60-311. - Definitions.#
This fund is divided into two tiers, Tier I and Tier II. Tier I means the pension fund covering any employee hired after July 1, 1992 and before July 1, 2012. Tier II means the pension fund covering any employee hired after June 30, 2012. The following words, terms and phrases, when used in this article, shall have the meanings ascribed to them in this section, except where the context clearly indicates a different meaning:
Accumulated contributions means the sum of all contributions paid by members under section 60-441 and credited with interest in accordance with section 60-397.
Actuarial equivalent means an amount having equal value when computed on the basis of an 8.5 percent interest rate compounded annually and the UP-1984 Mortality Table with ages set back three years for beneficiaries, unless otherwise specified.
Actuary means an individual who has attained Fellowship in the Society of Actuaries, or a firm employing such an individual.
Administrator means the retirement board as described below.
Base pay means the base wages paid to the employee, excluding bonuses, overtime pay, longevity pay, expense allowances, or any other extraordinary compensation.
Beneficiary means the person designated by the member to receive benefits after the member's death.
Creditable service is used to determine the amount of benefits under the plan and is defined in division 3 of this article.
Early retirement age means, for a member other than an elected official, the member's age upon attainment of age 55 and the completion of at least ten years of vesting service, or for a member who retires before July 1, 2000, upon the attainment of the point of 85 or for a member who retires on or after July 1, 2000 upon the attainment of the point of 80, or upon completion of 30 years of vesting service. For an elected official, early retirement age means the member's age upon attainment of age 55 and the completion of six years of vesting service. An elected official retiring prior to the attainment of age 60 shall not be eligible for retiree medical insurance provided by the city until reaching age 60.
Earned income means compensation for employment which is taxable as wages under United States income tax law, or compensation for services rendered by the member on behalf of a corporation or partnership.
Effective date means July 1, 1992, for Tier I members and July 1, 2012 for Tier II members.
Elected official means any eligible employee serving in an elective office of the city, including the mayor and members of the city council.
Eligible employee means any regular or permanent employee working more than 20 hours per week, except uniformed employees of the city's police and fire departments and school departments and employees of any agency of the city (for example, Warwick Community Action or the Warwick Housing Authority). In addition, no employee who is receiving a pension, disability pension, or any other form of pension or annuity from any other city-sponsored pension plan shall be an eligible employee.
Employee means any employee of the city.
Final average salary means the annual rate of pay equal to the average of the salaries received by the member for the period of three consecutive years of creditable service which provides the highest such average for Tier I members and the last three years of creditable service for Tier II members.
Fund means the trust fund established to hold and invest assets to pay benefits under this article, as further described in section 60-443.
Internal Revenue Code means the Internal Revenue Code of 1986, as amended from time to time. Reference to a specific provision of the Internal Revenue Code shall include such provision, any valid regulation or ruling promulgated thereunder, and any provision of future law that amends, supplements, or supersedes such provision.
Longevity pay means compensation paid to the employee on account of longevity in accordance with the collective bargaining agreement between the city and the union.
Member means any employee or retiree who participates in the plan with benefits defined under this article in accordance with the provisions of division 2 of this article.
Normal retirement age means, for a Tier I member other than an elected official, the member's age upon attainment of age 65 and the fifth anniversary of the date he or she became a member and for a Tier II member the member's age upon attainment of age 65 and five years of creditable service or age 59 at least with 25 years of creditable service. For an elected official, normal retirement age means the member's age upon his or her attainment of age 60 and six years of vesting service.
Plan means this article.
Point of 80 means the date when the sum of the member's age (in completed calendar months) and years of vesting service (in completed calendar months) equal or exceeds 80.
Point of 85 means the date when the sum of the member's age (in completed calendar months) and years of vesting service (in completed calendar months) equals or exceeds 85.
Retiree means a member who is receiving periodic pension benefits under division 4 of this article.
Retirement board means the board established pursuant to section 6-311.
Salary means the member's annual rate of base pay and longevity pay, excluding compensation paid for any other reason (such as bonuses, overtime pay, expense allowances, or any other extraordinary compensation), and including contributions made by the member to the fund in accordance with section 60-441.
Spouse means the person, if any, to whom the member is lawfully married at the time of his or her retirement or death.
Trustee means the trustee or trustees appointed by the administrator to administer the assets of the fund in accordance with section 6-312.
Union means the appropriate bargaining unit representing eligible employees as designated by the state labor relations board for collective bargaining purposes with the city.
Vesting service is used to determine eligibility for benefits under the plan and is defined in division 3 of this article.
(Ord. No. O-93-31, § I(1.1—1.29), 12-13-93; Ord. No. O-94-26, § I, 11-14-94; Ord. No. O-94-28, § I, 11-21-94; Ord. No. O-00-28, § I, II, 9-12-00; Ord. No. O-11-8, § I(Exh. A), 5-17-11)
Cross reference— Definitions generally, § 1-2.
Sec. 60-312. - Benefits not assignable or subject to attachment.#
No member or beneficiary shall have any power to assign, transfer, pledge, encumber or anticipate any payment to be made under the plan, nor shall the right to receive any such payment be in any manner subject to levy, attachment or other legal process to enforce payment of any claim against any member or any beneficiary.
(Ord. No. O-93-31, § I(8.1), 12-13-93)
Sec. 60-313. - Maximum benefit.#
The maximum benefit payable to a member under the plan shall not exceed the amount permitted under section 415 of the Internal Revenue Code, as now in effect or hereafter amended.
(Ord. No. O-93-31, § I(8.2), 12-13-93)
Sec. 60-314. - Maximum salary for purposes of benefit determination.#
The salary considered for purposes of benefit determination under the plan shall not exceed the amount permitted under section 401(a)(17) of the Internal Revenue Code, as now in effect or hereafter amended.
(Ord. No. O-93-31, § I(8.3), 12-13-93)
Sec. 60-315. - Pensions under article not part of any other pension.#
Pension benefits provided by this article shall not be part of or computed with any other pension or social security program.
(Ord. No. O-93-31, § I(8.4), 12-13-93)
Sec. 60-316. - Special benefits for employees retiring in June 1992.#
Effective June 1, 1992, notwithstanding any other provision of the plan, a member retiring under section 60-391 or 60-392 during the month of June 1992 shall have his or her longevity pay included in salary and final average salary for purposes of determining benefits under such sections.
(Ord. No. O-93-31, § I(8.5), 12-13-93)
Sec. 60-317. - Correction of errors; falsification of records to defraud plan.#
The retirement board may cancel or reduce the benefits of any person who shall knowingly make any false statement or shall falsify or permit to be falsified any record or records in any attempt to defraud this plan. Should any change or error in records result in any member or beneficiary receiving from the plan more or less than he/she would have been entitled to receive had the records been correct, the retirement board shall correct such error, and, as far as practicable, shall adjust the payments in such a manner that the actuarial equivalent of the benefit to which such member or beneficiary was correctly entitled shall be paid.
(Ord. No. O-93-31, § I(8.6), 12-13-93)
Sec. 60-318. - Deferred compensation plans.#
Any employee may participate in any eligible deferred compensation plan adopted and established by the city in accordance with the provisions of section 457 of the Internal Revenue Code of 1986.
(Ord. No. O-93-31, § I(8.7), 12-13-93)
Sec. 60-319. - Fiduciary role of members and employees of plan with regard to fund.#
Except as herein provided, no member of and no employee of the plan shall have any direct interest in the gains or profits of any investment made by the retirement board, nor as such receive any pay or emolument for his services. No member of the retirement board or employee of the plan shall directly or indirectly for himself or as an agent in any manner use the assets of the plan except to make such current and necessary payments as are authorized by the retirement board, nor shall any member or employee of the plan become an endorser or surety or become in any manner an obligor for moneys loaned by or borrowed from the retirement board.
(Ord. No. O-93-31, § I(8.8), 12-13-93)
Secs. 60-320—60-340. - Reserved.#
DIVISION 2. - ELIGIBILITY#
Sec. 60-341. - Generally.#
(a)
Any individual who was a member on the effective date shall remain a member until death or distribution of benefits under section 60-395(a).
(b)
Any eligible employee who was not a member on the effective date shall join the plan in accordance with the following:
(1)
Any eligible employee who is an elected official shall become a member on the date he or she assumes office.
(2)
Any eligible employee other than an elected official shall become a member on the first day of the month following the completion of six months of continuous employment.
(3)
Eligible employees becoming members under this subsection (b) shall remain members until death or distribution of benefits under section 60-395(a).
(c)
Any employee otherwise eligible for membership and who is a member of any pension or plan sponsored, in whole or in part, by the city (or any agency thereof, i.e. police, fire, school, etc.) or who is a member of a pension or plan sponsored by the state by virtue of his or her employment with the city's school department shall become a member of this plan only if such employee waives and renounces all accrued rights and benefits to which such employee is entitled from such other pension or plan. Any such employee who does not waive or renounce such accrued rights and benefits shall not become a member of this plan, shall renounce by waiver any entitlements under this plan, and shall not be entitled to any pension and other benefits provided by the city under this plan.
(Ord. No. O-93-31, § I(2.1), 12-13-93; Ord. No. O-98-43, § II, 12-14-98)
Sec. 60-342. - Rejoining plan upon reemployment.#
If an eligible employee who was a member terminates employment and subsequently becomes an eligible employee again, he or she shall become a member again on his or her date of rehire, with creditable service determined in accordance with section 60-362.
(Ord. No. O-93-31, § I(2.2), 12-13-93)
Secs. 60-343—60-360. - Reserved.#
DIVISION 3. - SERVICE#
Sec. 60-361. - Service credited on account of employment.#
(a)
Creditable service includes the sum of the periods of continuous employment with the city commencing on the date the member became an eligible employee and ending on the date the member terminates employment. For purposes of calculating benefits, creditable service is measured in full years and completed months of service. For example, a member hired on July 1, 1985, who terminates on April 15, 1996, has ten years and nine months of creditable service.
(b)
A member shall receive no creditable service for any unpaid leave of absence longer than 30 days, except as provided in subsection (d) of this section. For example, a member hired on July 1, 1985, who has an unpaid leave of absence from April 1, 1996, until July 1, 1996, and who terminates employment on April 15, 1998, would receive creditable service as follows:
July 1, 1985—April 1, 1996 10 years, 9 months
July 1, 1996—April 15, 1998 1 year, 9 months
Total 12 years, 6 months
Creditable service 12 years, 6 months
(c)
A member shall earn one-fourth of a month of creditable service for each month during which he or she does all of the following:
(1)
Receives benefits under the provisions of any worker's compensation law and is paid a portion of sick time for the difference between regular pay and worker's compensation benefits;
(2)
Makes contributions to the fund from the portion of sick time paid; and
(3)
Would receive no creditable service except that provided under this subsection (c).
Creditable service received under this subsection (c) shall be expressed in whole months; any fractional months shall be rounded up to the next whole month. For example, a member who received worker's compensation and made pension contributions from the portion of sick leave paid for nine months would receive three months of creditable service (2¼ months rounded up to three months).
(d)
Creditable service shall be granted for an unpaid leave of absence due to compulsory military service or military service in time of war, provided the member returns to active employment within 90 days after separation from military service, and further provided that the member has not received a refund of his or her contributions under section 60-395(a).
(Ord. No. O-93-31, § I(3.1), 12-13-93)
Sec. 60-362. - Restoration of creditable service after reemployment.#
If a member who has received a refund of his or her accumulated contributions resumes employment with the city within 12 months after his or her employment was terminated, the member's creditable service as of the date of termination shall be restored provided that he or she repays to the fund upon reemployment an amount equal to the distribution the member received under section 60-395(a), plus interest, at a rate and in accordance with regulations determined by the retirement board. The member shall be solely responsible for repaying the amount specified above immediately, but not later than 30 calendar days, upon reemployment.
If a member who terminates employment does not receive a distribution of his or her accumulated contributions at termination, and resumes employment with the city within 26 months after his or her employment was terminated, his or her creditable service as of the date of termination will be restored.
(Ord. No. O-93-31, § I(3.2), 12-13-93; Ord. No. O-98-43, § IV, 12-14-98)
Sec. 60-363. - Vesting service.#
A member's vesting service shall be equal to his or her creditable service, except as provided in section 60-364.
(Ord. No. O-93-31, § I(3.3), 12-13-93)
Sec. 60-364. - Buyback of military service.#
(a)
Effective March 1, 2009, if a member has, prior to his or her termination of employment or earlier death:
(1)
Been honorably discharged from service with the armed forces of the United States;
(2)
Completed at least eight years of creditable service; and
(3)
Attained age 55 or met the eligibility requirements for benefits under section 60-391, 60-392, 60-394(b) or 60-395(b);
then the member (or the surviving spouse of the deceased member based upon the military service of the member) will be eligible to buy back up to four years of additional creditable service by contributing to the fund at the time of termination (or commencement of death benefits under section 60-394(b)) eight percent of the member's final year's annual salary, which shall include longevity, for each year of creditable service purchased. In order to preclude duplication of service credit, the member's military service must have been completed prior to the member's employment with the city to be eligible for buyback.
(b)
A member or surviving spouse eligible to purchase benefits under subsection (a) above has the option to buy up to four years of creditable service in monthly increments, but no more than the number of the member's full years of military service (i.e., time actually spent on active duty, as verified by form DD214 or its equivalent).
(c)
A member or surviving spouse will receive credit for one year of vesting service for each year or creditable service purchased, up to two years of vesting service.
(d)
In no case will a member (or surviving spouse of a deceased member) who has received service credit for a period of military service of the member under any other retirement plan qualified under Internal Revenue Code section 401(a) be permitted to purchase benefits under this section for the same period of military service.
(Ord. No. O-93-31, § I(3.4), 12-13-93; Ord. No. O-05-23, § II, 8-23-05; Ord. No. O-09-21, § I, 8-18-09)
Note— Ordinance No. O-09-21, § II, adopted August 18, 2009, states the ordinance amendment shall not take effect for elected officials or be applicable to elected officials, who are members of the pension fund, until January 15, 2011.
Sec. 60-365. - Special service purchase option for certain employees.#
Effective June 30, 1989, any employee who became a member on February 1, 1988, as a result of the plan amendment which removed the restriction on membership for employees hired after age 60 shall have the option to purchase retirement eligibility at any time. This purchase shall be effected by the member's contributing to the fund six percent of his or her current salary, multiplied by the number of years (with fractional years measured as completed months divided by 12) remaining until February 1, 1993. On the first of the month following the member's additional contribution described in this section, the member shall be eligible to retire in accordance with section 60-391, and shall be considered to have attained his or her normal retirement age. The member's years of creditable service shall include the additional years purchased in accordance with this section, but in no event will the total creditable service for a member purchasing service under this section exceed five years.
(Ord. No. O-93-31, § I(3.5), 12-13-93)
Sec. 60-366. - Service purchase option for accumulated sick leave.#
At the time a member terminates his or her employment, the member may, if allowed by personnel rules or by union contract, apply unused sick leave to purchase additional months of creditable service equal to 100 percent of the member's months of unused sick leave, provided the member is vested.
(Ord. No. O-94-28, § I, 11-21-94)
Sec. 60-367. - Retirement board rules.#
The retirement board shall fix and determine by proper rules and regulations how much service in one year is equivalent to one year of creditable service, but in no case shall more than one year be creditable for all service in one calendar year, nor shall the retirement board allow credit as service for any period of more than one month's duration during which the member was absent without pay, except as provided in section 60-361(d).
(Ord. No. O-93-31, § I(3.6), 12-13-93)
Secs. 60-368—60-390. - Reserved.#
DIVISION 4. - BENEFITS#
Sec. 60-391. - Normal retirement benefits.#
A member who has reached his or her normal retirement age may apply to the retirement board for retirement and payment of pension benefits. Such member shall receive, payable in accordance with section 60-421, an annual benefit as follows: (1)
Members who have never been elected officials. For Tier I members who retire on or after September 1, 1991 and before July 01, 2000, 2.35 percent of the member's final average, salary multiplied by his or her years of creditable service. For Tier I members who retire on or after July 1, 2000, 2.5 percent of the member's final average salary multiplied by his or her years of creditable service. For Tier II members who retire, 2.0 percent of the member's final average salary multiplied by his or her years of creditable service.
(2)
Current or former elected officials. The greater of:
a.
The benefit determined under subsection (1) of this section; or
b.
The sum of:
1.
One thousand five hundred dollars; and
2.
Two hundred dollars multiplied by his or her years of creditable service as an elected official or a nonelected official;
but not more than $5,500.00.
(Ord. No. O-93-31, § I(4.1), 12-13-93; Ord. No. O-00-28, § III, 9-12-00; Ord. No. O-11-8, § I(Exh. A), 5-17-11)
Sec. 60-392. - Early retirement benefits.#
A member who has reached his or her early retirement age may apply to the retirement board for retirement and payment of pension benefits. Such member shall receive, payable at any time after retirement in accordance with section 60-421, an annual benefit equal to the benefit determined in section 60-391 based on his or her final average salary and creditable service at early retirement age, but reduced by one half percent for each of the first 60 months, and by one-third percent for each month in excess of 60, by which the commencement of benefits precedes the member's normal retirement age. Effective with respect to those members who retire on or after September 1, 1991 and before July 1, 2000, such reductions shall not apply to any Tier I member who has completed 30 years of creditable service or who has achieved the point of 85. Effective with respect to those Tier I members only who retire on or after July 1, 2000, such reduction shall not apply to any Tier I member who has completed 30 years of creditable service or who has achieved the point of 80. The point of 80 (or 85) and the 30 years of creditable service provisions shall not be available to Tier II members.
(Ord. No. O-93-31, § I(4.2), 12-13-93; Ord. No. O-00-28, § IV, 9-12-00; Ord. No. O-11-8, § I(Exh. A), 5-17-11)
Sec. 60-393. - Disability retirement benefits.#
(a)
General eligibility. A member who has completed ten years of vesting service (six years of vesting service for an elected official), and is totally disabled as defined in subsection (b) of this section prior to normal retirement age, will be retired upon application to the retirement board and will receive a disability retirement pension payable for life, except as specified elsewhere in this section.
(b)
Total disability defined. A member will be considered totally disabled if the retirement board certifies that he or she is in receipt of social security disability benefits.
(c)
Amount of benefit. Upon retirement for disability a member will be entitled to receive a disability pension determined in accordance with section 60-391 based on his or her final average salary and years of creditable service as of the date he or she became disabled, without reduction for commencement of benefits prior to normal retirement age.
(d)
Commencement of disability payments. The retirement board, in approving the application for disability retirement, shall determine the date from which benefits are payable, which date shall be the first of the month following the later of the last day on which the member receives salary from the city and the date his or her social security disability benefits are first payable. No disability benefits shall be payable during any period the member is receiving a salary from the city.
(e)
Disabled member eligible for early retirement.
(1)
If a member who is eligible for early retirement as defined in section 60-392 has a disability application pending with the retirement board, he or she may elect to receive an early retirement pension until his or her application for disability is acted upon. In order to exercise this option, the member must submit to the retirement board proof that he or she has a disability application pending before the Social Security Administration and the retirement board, along with supporting evidence from a licensed medical doctor which describes the medical condition which constitutes the disability. The retirement board will grant the member six months from commencement of early retirement benefits to prove his or her disability. The six-month period may be extended by the retirement board based upon the facts and circumstances of the application.
(2)
If the retirement board denies the member's application for a disability pension, the member will be deemed to have elected early retirement as of the date his or her early retirement pension commenced, and there will be no adjustment to the early retirement benefits being paid. If the member's application for disability is approved, he or she will begin receiving a disability pension in lieu of his or her early retirement pension with the change in monthly benefit effective as soon as possible (the "benefit increase date"). His or her benefits will also be adjusted by the difference between:
a.
The early retirement benefits paid as of the benefit increase date; and
b.
The retroactive disability benefits which would otherwise have been payable.
Any such adjustment shall be made by increasing or decreasing the monthly benefits over a period no greater than 12 months.
(f)
Effect of worker's compensation payments or personal injury recovery payments on disability payments.
(1)
Any pension payments from the plan under this section shall be reduced and offset (but not below zero) by the amount of any periodic payments to the member under the provisions of any worker's compensation law or on account of recovery of damages for personal injury to the member from the city, on account of death or disability of a member occurring while in the performance of duty.
(2)
For purposes of this subsection (f), the value of any lump sum payments to the member on account of worker's compensation or personal injury recovery shall be converted to monthly payments which are the actuarial equivalent of such lump sum.
(g)
Proof of receipt of social security disability benefits. As a condition for receiving a disability pension, each retiree who is younger than age 65 and is in receipt of a disability pension in accordance with this section shall furnish annually to the retirement board evidence satisfactory to the board of his or her continued receipt of social security disability payments.
(h)
Effect of restoration to health on disability pension. Should the retirement board find that a retiree receiving a disability pension at any time before attainment of age 65 is no longer in receipt of social security disability payments or is engaged in any gainful occupation, the retirement board shall direct that the disability retirement pension be discontinued and the member's pension benefits determined in accordance with section 60-392 or 60-395, as applicable.
(i)
Effect of reemployment on disability pension. Should a retiree receiving a disability pension again become an employee, his or her disability retirement pension shall cease and he or she shall immediately become an active member of the plan upon reemployment. For purposes of determining subsequent pension benefits, his or her creditable service at the time of disability retirement shall be restored in full force and effect. If the total of the disability benefits paid from the plan was less than his or her accumulated contributions at retirement, then the excess of the member's accumulated contributions at retirement over the total amount of pension benefits paid will be restored and shall become the member's accumulated contributions.
(Ord. No. O-93-31, § I(4.3), 12-13-93)
Sec. 60-394. - Death benefits prior to retirement.#
(a)
Refund of contributions. Upon the death of a member prior to commencement of benefits under section 60-391, 60-392, 60-393 or 60-395, the member's accumulated contributions shall be paid to his or her beneficiary in one lump sum.
(b)
Annuity to surviving spouse. If the member was an employee, has attained age 50 and completed ten years of vesting service at death (six years of vesting service for elected officials), or had 30 years of creditable service at death, or, with respect to a member who died prior to July 1, 2000, had reached the point of 85 at death, or, with respect to a member who died on or after July 1, 2000, has reached the point of 80 at death, and if the member's designated beneficiary is the member's spouse, the spouse may elect, in lieu of benefits under subsection (a) of this section, to receive a lifetime pension, payable on any date between the member's early retirement age and normal retirement age. Such pension shall be computed as if the member had terminated employment on the date he or she died and had commenced receipt of payment on or after early retirement age, with payments reduced for early retirement in accordance with section 60-392, in the joint and 100-percent survivor annuity form of payment described in section 60-421.
(c)
Effect of worker's compensation payments or personal injury recovery payments.
(1)
Any pension payments from the plan under subsection (b) of this section shall be reduced and offset (but not below zero) by the amount of any periodic payments to the spouse under the provisions of any worker's compensation law or on account of recovery of damages for personal injury to the member from the city.
(2)
For purposes of this subsection (c), the value of any lump sum payments to the spouse on account of worker's compensation or personal injury recovery shall be converted to monthly payments which are the actuarial equivalent of such lump sum.
(Ord. No. O-93-31, § I(4.4), 12-13-93; Ord. No. O-98-43, § III, 12-14-98; Ord. No. O-00-28, § V, 9-11-00)
Sec. 60-395. - Termination of employment.#
(a)
Lump sum refund. Any member who terminates employment or ceases to be an eligible employee because such employee is scheduled to work less than 20 hours per week prior to becoming eligible for benefits under 60-391, 60-392 or 60-393 shall be paid his or her accumulated contributions in one lump sum within one year after such employee terminates employment or ceases to be an eligible employee, as the case may be, unless such employee is rehired or becomes an eligible employee (and scheduled to work more than 20 hours per week) prior to the expiration of the one year period unless the member requests in writing that the accumulated contributions be retained for a 26-month period. In the event of death of such a former member after termination of employment or ceasing to be an eligible employee and prior to receiving his or her accumulated contributions, his or her accumulated contributions shall be paid to his or her beneficiary.
(b)
Vested termination. If the member has completed ten years of vesting service (six years of vesting service for elected officialsif their first term in office commenced prior to January, 2013 or ten years of vesting service if their first term in office commenced on or after January, 2013) at termination, he or she may elect to receive, in lieu of benefits under subsection (a) of this section, a deferred pension payable at normal retirement age in accordance with section 60-421 equal to the benefit determined in section 60-391 based on his or her final average salary and creditable service at termination. Such member may elect to receive benefits at his or her early retirement age reduced for early commencement in accordance with section 60-392.
(Ord. No. O-93-31, § I(4.5), 12-13-93; Ord. No. O-00-29, § I, 9-12-00; Ord. No. O-12-2, § I, 1-10-12)
Sec. 60-396. - Lump sum death benefit.#
Effective July 1, 2000, in addition to any other benefit payable under this article, a benefit of $8,000.00 shall be made payable in a lump sum to a member's beneficiary upon the death of the member while an employee or retiree.
(Ord. No. O-93-31, § I(4.6), 12-13-93; Ord. No. O-00-30, § I, 9-12-00)
Sec. 60-397. - Accumulated contributions.#
The member's contributions under section 60-441 shall be credited with interest once per year, on each December 31, based upon the member's balance as of the preceding December 31, at a rate determined annually by the retirement board. No interest as provided in this article shall be credited to contributions of an elected official after 26 months shall have elapsed since the member ceased to be an elected official, and, further, the withdrawal of contributions shall indicate waiving of all rights and benefits as an elected official under this article.
(Ord. No. O-93-31, § I(4.7), 12-13-93)
Sec. 60-398. - Indexation of benefits for terminated vested members.#
Effective July 1, 1990, a Tier I member other than an elected official eligible for a benefit in accordance with section 60-395(b) shall have the amount of his or her deferred pension payable at normal retirement age increased annually by three percent, on each July 1 prior to the commencement of benefits, following the first anniversary of his or her termination of employment.
A Tier II member other than an elected official eligible for a benefit in accordance with section 60-395(b) shall have the amount of his or her deferred pension payable at normal retirement age increased annually by one percent, on each July 1 prior to the commencement of benefits, following the first anniversary of his or her termination of employment.
(Ord. No. O-93-31, § I(4.8), 12-13-93; Ord. No. O-11-8, § I(Exh. A), 5-17-11)
Sec. 60-399. - Indexation of benefits for retirees and beneficiaries.#
(a)
Annual cost-of-living increases. The monthly benefits of retirees and beneficiaries who have been in pay status for at least 12 months under sections 60-391, 60-392, 60-393, 60-394 and 60-395 shall be indexed in accordance with this section, subject to the approval of the retirement board. Such adjustment shall be made as of a determination date if the assets on the previous June 30 were sufficient to warrant an increase in accordance with subsection (b) of this section.
(b)
Determination of asset value before adjustment and market value of assets; establishing adjustment ratio. On the June 30 one year prior to the determination date, the asset value before adjustment and the market value of assets shall be determined. If the market value of assets exceeds the asset value before adjustment by an amount equal to six percent or more of the actuarial accrued liability of the benefits of all retirees and beneficiaries as determined by the actuary, then an adjustment to the monthly benefit is warranted as of the determination date. An increase in monthly benefits may be granted, such that the resulting increase in actuarial accrued liability (measured as if the change were effective on the June 30 prior to the determination date) does not exceed one-third of the amount by which the market value of assets exceeded the asset value before adjustment and such that the percentage increase in monthly benefits does not exceed the sum of the negotiated percentage increases in base pay covered under the collective bargaining agreement effective for eligible employees during the 12-month period ending on the June 30 one year prior to the determination date. If an increase in the monthly benefits is granted, then the adjustment referred to in the definition of asset value after adjustment shall equal two times the actuarial accrued liability attributable to the increase in monthly benefits.
(c)
"Asset value after adjustment" defined. On June 30, 1988, and on each subsequent June 30, the asset value after adjustment shall mean the asset value before adjustment plus the adjustment determined according to subsection (b) of this section.
(d)
"Asset value before adjustment" defined. On June 30, 1989, and on each subsequent June 30, the asset value before adjustment shall mean the asset value after adjustment on the previous June 30, adjusted for contributions, benefit payments and administrative expenses, and credited with interest at the interest rate in effect for the year.
(e)
"Interest rate in effect for the year" defined. The interest rate in effect for the year means the sum of the negotiated percentage increases in base pay under the collective bargaining agreement covering eligible employees during the 12-month period ending on the June 30 one year prior to the determination date, plus three percent.
(f)
"Market value of assets" defined. The market value of assets shall be the current value of fund assets as reported by the trustee.
(g)
"Determination date" defined. The determination date shall be June 30 of each year.
(Ord. No. O-93-31, § I(4.9), 12-13-93)
Sec. 60-400. - Forfeiture of benefits upon termination for certain causes.#
If a member's employment is terminated by the city for reasons of the member's misconduct, fraud, or dishonesty, as determined by the board, while employed by the city, and if criminal proceedings are initiated by the city in connection with such act, payment of such member's benefits shall be in suspense until criminal proceedings are resolved. If the member is subsequently convicted of a crime in connection with the aforementioned criminal proceedings, the member shall forfeit all rights to benefits from the plan, except that he or she shall receive a refund of accumulated contributions in accordance with section 60-395(a).
(Ord. No. O-93-31, § I(4.10), 12-13-93)
Secs. 60-401—60-420. - Reserved.#
DIVISION 5. - PAYMENT OF BENEFITS#
Sec. 60-421. - Payment of benefits on account of normal retirement, early retirement or vested termination.#
(a)
Application. In order to retire, a member shall file written application to the retirement board no less than 30 days and not more than 90 days prior to the first day of the month following his or her normal retirement age, or the member's earlier commencement date under section 60-392 or 60-395, if applicable. Such application shall include the member's designated beneficiary and the optional payment form elected under subsection (b) or subsection (c) of this section and shall be signed by the member's spouse, if any.
(b)
Optional payment forms. Optional payment forms are as follows:
(1)
Life annuity: A monthly annuity payable until the member's death. This is the normal form of payment under the plan. Benefits payable in the form of a life annuity are equal to 1/12 of the annual amount determined in section 60-391, 60-392 or 60-395.
(2)
Joint and survivor annuity: A monthly annuity, payable for the member's lifetime, with 50 percent, 75 percent, or 100 percent (as elected) of the member's benefit payable for the lifetime of the member's surviving spouse, which is the actuarial equivalent of the life annuity determined under subsection (b)(1) of this section.
(3)
Ten-year certain and continuous annuity: A monthly annuity payable for the member's lifetime, with 120 payments guaranteed, equal to the actuarial equivalent of the life annuity determined under subsection (b)(1) of this section. If the member dies before 120 payments are made, the remaining guaranteed payments will be made to the beneficiary, or the beneficiary's estate if fewer than 120 payments have been made at the beneficiary's death.
(c)
Social security level income annuity.
(1)
A member who retires prior to age 62 and who elects the life annuity option under subsection (b)(1) of this section may elect to receive such life annuity in a modified form.
(2)
This modified option shall provide for the payment of a larger benefit before the attainment of age 62 and a reduced benefit thereafter. The reduced amount shall be equal to the benefit before age 62, including cost-of-living increases, reduced (but not below $0.00) by the member's estimated primary social security benefit payable at age 62. Benefits payable under this option shall be the actuarial equivalent of the life annuity determined under subsection (b)(1) of this section. The social security benefit used in computing this option shall be estimated as of the date of the member's retirement.
(3)
Election of this social security level income annuity shall not be available to members electing the optional payment forms under subsection (b)(2) or subsection (b)(3) of this section.
(Ord. No. O-93-31, § I(5.1), 12-13-93; Ord. No. O-94-28, § I, 11-21-94)
Sec. 60-422. - Payment of benefits on account of disability.#
Benefits payable to a member under section 60-393 shall be paid on a monthly basis commencing in accordance with section 60-393(d) for the lifetime of a member, or until the member's earlier recovery under section 60-393(h) or reemployment under section 60-393(i).
(Ord. No. O-93-31, § I(5.2), 12-13-93)
Sec. 60-423. - Payment of benefits on account of preretirement death.#
Benefits payable to a surviving spouse under section 60-394(b) shall be paid on a monthly basis for the lifetime of the spouse commencing at the election of the spouse as described in section 60-394(b).
(Ord. No. O-93-31, § I(5.3), 12-13-93)
Sec. 60-424. - Payment of lump sums.#
(a)
Preretirement death. Lump sum refunds of accumulated contributions to a beneficiary under section 60-394(a) shall be paid as soon as practicable after the member's death unless the beneficiary is eligible for and elects to receive annuity benefits under section 60-394(b).
(b)
Termination of employment. Lump sum refunds to a member of accumulated contributions under section 60-395(a) shall be paid as soon as practicable after the member's termination of employment unless the member is eligible for and elects to receive annuity benefits under section 60-395(b).
(c)
Lump sum death benefit. Payment to a beneficiary under section 60-396 shall be made as soon as practicable after the death of the member.
(Ord. No. O-93-31, § I(5.4), 12-13-93)
Sec. 60-425. - Payment of remainder of accumulated contributions on death after commencement of benefits.#
If after the death of all persons eligible to receive benefits under sections 60-421, 60-422 and 60-423 the total amount of annuity benefits paid to the member and to his or her beneficiary is less than the member's accumulated contributions at retirement or earlier death, the excess of the accumulated contributions over the total annuity payments shall be paid to the member's beneficiary, or, if none survives, to the estate of the last person receiving benefits on the member's account.
(Ord. No. O-93-31, § I(5.5), 12-13-93)
Sec. 60-426. - Latest commencement date for benefit payments.#
Benefit payments shall commence in accordance with the following: (1)
Unless the member elects otherwise, in writing, distribution of benefits will begin no later than the 60th day after the latest of the date on which:
a.
The member attains the age at which he or she becomes eligible to retire in accordance with section 60-391;
b.
Occurs the tenth anniversary of the year in which the member commenced participation in the plan; or
c.
The member terminates employment with the city.
(2)
The commencement of benefits to any member under the plan will not begin later than April 1 of the calendar year following the later of:
a.
The calendar year in which the member attains age 70½; or
b.
The calendar year in which the member retires.
(3)
The provisions of subsection (2) of this section shall not apply to any distribution of benefits under the plan pursuant to a valid written election of a method of distribution made prior to January 1, 1984, which would have been permitted under section 401(a)(9) of the Internal Revenue Code for any fiscal year of the city beginning prior to December 31, 1983.
(4)
If a member dies prior to the commencement of benefits and benefits are payable to a designated beneficiary other than the member's spouse, the payment of such benefits shall begin no later than one year after the date of the member's death and shall be paid over a period which does not extend beyond the life expectancy of such beneficiary.
(Ord. No. O-93-31, § I(5.6), 12-13-93)
Secs. 60-427—60-440. - Reserved.#
DIVISION 6. - FUNDING#
Sec. 60-441. - Member contributions.#
(a)
Generally. Each member who is an eligible employee will contribute six percent of his or her salary to the fund at the time of each payroll period. Each member who is an active elected official shall contribute an additional $20.00 per month. Such contributions shall begin on the date the employee becomes a member in accordance with division 2 of this article and shall cease when the member is no longer an eligible employee. Effective September 1, 1994, the member contributions described above shall increase to seven percent of salary.
(b)
Pickup of employee contributions by city. The city shall pick up the employee contributions required by this section, and the contributions so picked up shall be treated as employer contributions in determining tax treatment under the Internal Revenue Code. These contributions, although designated as employee contributions, will be paid by the city in lieu of contributions by the employee. Employees shall have no option to choose to receive the contributed amounts directly instead of having them paid by the city to the fund. The city shall pay these employee contributions from the same source of funds which is used in paying earnings to the employee. The city may pick up these contributions by a reduction in the cash salary of the employee or by an offset against a future salary increase or by a combination of a reduction in salary and offset against a future salary increase. The employee contributions which are picked up shall be treated for all purposes of this plan in the same manner and to the same extent as employee contributions made prior to the date picked up and shall be included in salary for purposes of determining final average earnings.
(Ord. No. O-93-31, § I(6.1), 12-13-93; Ord. No. O-94-26, § I, 11-14-94)
Sec. 60-442. - Employer contributions.#
(a)
The amount of the city's annual contribution to the fund shall be the annual contribution amount determined by the actuary as provided in subsections (b) and (c) of this section.
(b)
Effective with the June 30, 2014 actuarial valuation, and annually thereafter, the actuary shall perform an actuarial valuation of the fund. The actuarial valuation shall be received by the board by the February 1 following the valuation date. Upon the request of the city council, the actuary shall appear and present the results of the annual actuarial valuation at a regular meeting of the city council. In the valuation, the actuary will determine an annual contribution amount equal to the sum of the following three components:
(1)
Normal cost, net of employee contributions;
(2)
An amount determined by the actuary which, with annual increases equal to the actuary's assumed rate of increase in base pay, will amortize the unfunded actuarial accrued liability.
(3)
An amount determined by the actuary which, with annual increases equal to the actuary's assumed rate of increase in base pay, will amortize over a period no longer than 25 years the increase or decrease in the actuarial accrued liability attributable to plan amendments, changes in actuarial assumptions and actuarial experience gains and losses affecting members.
(c)
The normal cost and actuarial accrued liability shall be determined using the entry age normal actuarial cost method and such actuarial assumptions as recommended by the actuary. Assets used by the actuary for valuation purposes shall be the lesser of the market value of assets and the asset value before adjustment (as these terms are defined in section 60-399). Actuarial valuations will be performed by the actuary in accordance with generally accepted actuarial principles on an annual basis. The annual contribution amount for the fiscal year following the year of the annual valuation will be indexed at the actuary's assumed rate of increase in base pay.
(d)
City contributions will be paid by June 30 of the following fiscal year on a semi-monthly basis.
(Ord. No. O-93-31, § I(6.2), 12-13-93; Ord. No. O-11-8, § I(Exh. A), 5-17-11; Ord. No. O-13-16, § I, 10-18-13)
Sec. 60-443. - Pension fund.#
All contributions under sections 60-441 and 60-442 shall be deposited to the fund. The retirement board shall be the administrator of the fund, with the duties outlined in sections 6-311 and 6-312. No amendment to the plan which will increase the benefits to retirees or beneficiaries shall take effect unless the unfunded actuarial accrued liability of each fund established pursuant to chapter 20, article III, chapter 20, article IV, chapter 52, article II, chapter 52, article III, and this article is ten percent or less of the actuarial value of the fund, or unless the amendment to the plan is completely funded through a change in employee contributions which reflects the full actuarial accrued liability cost of the amendment as determined by the city's actuary. Contributions under sections 60-441 and 60-442 shall be increased so that any such increase in benefits shall be funded at 100 percent.
(Ord. No. O-93-31, § I(6.3), 12-13-93; Ord. No. O-09-8, § I, 3-10-09)