[Adopted 8-10-1981 by Ord. No. 81-010]
This article shall be known and may be cited
as the "Retirement System Ordinance."
A City retirement system is hereby established
for the purpose of providing retirement income to certain employees
and former employees and survivor income to certain of their beneficiaries.
The City Employees' Retirement System existing
pursuant to §§ C-346 through C-388 of the City Charter
is hereby replaced by the retirement system established by this article,
as provided in § C-346.
A.
All assets of the City Employees' Retirement System
existing pursuant to §§ C-346 through C-388 of the
City Charter shall, on the effective date of this article, be transferred
to and become assets of the retirement system established by this
article.
B.
All obligations of the City Employees' Retirement
System existing pursuant to §§ C-346 through C-388
of the City Charter, on the effective date of this article, including
continuation of payments of benefits, are hereby assumed by and made
obligations of the retirement system established by this article.
C.
The assets and obligations so transferred and assumed
shall be charged to or credited to the various accounts of the retirement
system established by this article according to the purposes for which
they existed under the City Employees' Retirement System established
by the City Charter.
The Board of Trustees of the City Employees'
Retirement System provided for in the City Charter is hereby designated
and continued as the initial Board of Trustees of the retirement system
established by this article. The terms of office of the Trustees holding
office on the effective date of this article shall expire on the same
dates as they would have expired had the City Employees' Retirement
System been continued.
[Amended 2-16-1999 by Ord. No. 99-002; 12-17-2001 by Ord. No.
01-026; 3-18-2002 by Ord. No. 02-003; 1-6-2003 by Ord. No.
02-011; 7-25-2011 by Ord. No. 11-008]
The following words and phrases, as used in
this article, shall have the meanings set forth in this section unless
a different meaning is clearly required by the context:
The sum of all amounts credited to a member's individual
account in the reserve for employee contributions, including regular
interest.
Amounts which have the same actuarial present value. For
purposes of adjusting any benefit or limitation under Internal Revenue
Code § 415, the mortality table used shall be the table
prescribed by the United States Secretary of the Treasury in accordance
with § 767 of the Retirement Protection Act of 1994.
An individual who is being paid or who has entitlement to
future payment of a retirement allowance or other benefit by the retirement
system for a reason other than the individual's membership in the
retirement system.
The Board of Trustees provided in § 127-30 et seq. for the administration and management of the retirement system.
The City of Monroe, Michigan, including its offices, boards,
departments and instrumentalities.
The salary or wages paid a member for personal service rendered the City while a member of the retirement system. Compensation shall include base salary or wages; longevity pay; workers' compensation payments (except for medical expenses) during periods the City supplements workers' compensation payments; salary or wages while absent from work on account of vacation, holiday or illness; overtime pay; cost-of-living payments; and member contributions picked up and paid by the City in lieu of being paid by the member under § 127-47. Compensation shall not include the value of any fringe benefit not specifically included; uniform allowances; equipment allowances; the value of work equipment furnished by the City; termination or severance allowances; reimbursement of expenses; redemptions or payments in consideration of unused sick leave and vacation time; and any other item not specifically included. The annual compensation of each member taken into account in determining benefit accruals in any retirement system year beginning after December 31, 2001, shall not exceed $200,000. "Annual compensation" means compensation during the calendar year or such other consecutive twelve-month period over which compensation is otherwise determined under this article (the "determination period"). In determining benefit accruals in years beginning after December 31, 2001, the annual compensation limit for determination periods beginning before January 1, 2002, shall be $150,000 for any determination period beginning in 1996 or earlier; $160,000 for any determination period beginning in 1997, 1998, or 1999; and $170,000 for any determination period beginning in 2000 or 2001. The limit of $200,000 on annual compensation shall be adjusted for cost-of-living increases in accordance with § 401(a)(17)(B) of the Internal Revenue Code. The cost-of-living adjustment in effect for a calendar year applies to annual compensation for the determination period that begins with or within such calendar year.
Compensation for purposes of IRC § 415(c)(3) shall
also include: 1) regular pay after severance from employment; 2) leave
cashouts and deferred compensation including cash out of accrued sick,
vacation or other leave time if the employee would have been able
to use the leave if employment had continued or the payment of nonqualified
deferred compensation that would have been paid to the employee at
the same time if the employee had remained employed and only to the
extent that the payment is includable in the employee's gross income.
The compensation items listed in this subsection must be paid by the
later of 2 1/2 months of severance from employment or the end
of the limitation year that includes the date of severance with the
City.
The City Council of the City of Monroe.
An individual whose application has been accepted by the Board of Trustees to participate in the Deferred Retirement Option Program under § 127-54.
[Added 10-3-2011 by Ord. No. 11-009]
The number of years selected by a DROP member to participate
in the DROP; provided, however, that such period must be no less than
two years and no more than five years beginning as of the effective
date of the DROP election for such member. Each member shall designate
his/her DROP participation period on the DROP election form that is
accepted by the Board of Trustees.
[Added 10-3-2011 by Ord. No. 11-009]
The monthly average of the aggregate amount of compensation
paid a member during the stipulated period of credited service in
which the aggregate amount of compensation paid is the greatest. The
stipulated period of credited service shall be contained within the
member's last 10 years of credited service. If a member has less than
the stipulated period of credited service, "final average compensation"
means the aggregate amount of compensation paid the member divided
by the member's credit service expressed in months. The stipulated
period of credited service is three years for benefit group police
and fire, five years for all other benefit groups, or as established
otherwise through collective bargaining contract or by ordinance.
Any individual who is a member of the retirement system (§ 127-7).
Such rate or rates of interest per annum, compounded annually, as the Board shall from time to time adopt. However, solely for the purpose of crediting regular interest at the end of each fiscal year on the individual balances in the reserve for employee contributions at the beginning of the fiscal year pursuant to § 127-36, where a member is covered under § 127-48, the term "regular interest" shall mean 1% less than the annual rate of return for that fiscal year on the market value of the assets of the retirement system as certified by the Board of Trustees.
An individual who is being paid a retirement allowance on
account of credited service acquired by the individual as a member
of the retirement system.
A series of monthly payments by the retirement system throughout
the future life of a retirant or beneficiary, or for a temporary period,
as provided in this article.
The City retirement system maintained pursuant to this article.
Personal service rendered the City while a member of the retirement system, military service qualifying under § 127-9 and governmental service qualifying under § 127-48B(8).
The member’s legal spouse who has met all requirements
of a valid marriage contract in the state of marriage of such parties.
[Added 12-15-2014 by Ord.
No. 14-007]
The periodic workers' compensation paid a member, retirant
or beneficiary on account of disability or death arising out of and
in the course of a member's or retirant's employment by the City,
as determined by the Board. In the event that a settlement is made
of a workers' compensation claim, the Board shall determine the applicable
periodic payment. Payments in consideration of medical expenses shall
be disregarded in the determination of a workers' compensation benefit.
The period for which workers' compensation is paid a retirant
or beneficiary on account of disability or death arising out of and
in the course of employment by the City as determined by the Board.
In the event that periodic workers' compensation benefits are redeemed
or a settlement of a workers' compensation claim is made, "workers'
compensation period" means the period, if any, during which periodic
workers' compensation benefits are paid plus the period obtained by
dividing the redemption or settlement by the applicable workers' compensation
periodic benefit, as determined by the Board. Payments in consideration
of medical expenses shall be disregarded in the determination of the
workers' compensation period.
[Amended 6-24-1996 by Ord. No. 96-012]
A.
An individual who is employed by the City in a membership position shall be a member of the retirement system. A membership position is a City position normally entailing $600 or more compensation in a calendar year, except as provided in Subsection B hereof.
B.
The following types of employment are not membership
positions:
(1)
Employment compensated on a contractual or a fee basis.
(2)
Employment while being paid a retirement allowance
as a retirant.
(3)
Elected officials who file a written notice with the
City Clerk electing not to be a member, such notice to be filed within
60 days of taking office or within a longer period approved by the
Board.
(4)
An appointed official who elects to be excluded from
membership in the retirement system. The election shall be made in
writing, filed with the City Clerk, and shall be made within 60 days
from the effective date of this amendment or within 60 days of an
appointed official's first appointment to office. Those officials
electing exclusion from membership shall participate in a defined
contribution plan to be established by Council.
C.
A member who ceases to be employed by the City in
a membership position shall thereupon cease to be a member.
D.
The Board shall decide all questions concerning the
membership status of any individual.
E.
As of the effective date of a DROP election, a DROP member shall cease to be an active member of the retirement system with respect to accruing additional years of credited service or taking into account final average compensation earned after such date for purposes of calculating his/her retirement allowance; and making additional member contributions, pursuant to § 127-54; (i.e., a DROP member's years of credited service and final average compensation are frozen and no further member contributions shall be required as of the effective date of his/her DROP election).
[Added 10-3-2011 by Ord. No. 11-009]
F.
Notwithstanding anything to the contrary in this § 127-7 or other sections of this article, the City has closed the retirement system to new participation as follows:
[Added 3-7-2022 by Ord. No. 22-001]
(1)
With
respect to an individual who is employed or reemployed by the employer
on or after January 1, 2022, for benefit group general nonunion or
as of the CBA ratification date as set forth in a collective bargaining
agreement for one or more union benefit groups, he or she shall not
be eligible to participate in, become a member under or otherwise
accrue or become entitled to benefits under the retirement system.
(2)
With
respect to an employee who is not a member of the retirement system
as of January 1, 2022, for benefit group general nonunion or as of
the CBA ratification date as set forth in a collective bargaining
agreement for one or more union benefit groups, he or she shall not,
thereafter, be eligible to participate in, become a member under or
otherwise accrue or become entitled to benefits under the retirement
system.
[Amended 7-28-1986 by Ord. No. 86-016; 2-16-1999 by Ord. No.
99-002]
A.
Service rendered by a member shall be credited to
the member's individual credited service account in accordance with
rules that the Board shall from time to time prescribe. In no case
shall more than one year of credited service be credited on account
of all service rendered by a member in any one calendar year, nor
shall less than 60 hours of service in a calendar month be credited
as 1/12 of a year of credited service. Service shall be credited to
the nearest 1/12 of a year. The Board may credit a member with a full
year of credited service if the member has rendered at least 10/12
of a year of service during a calendar year.
B.
An individual's credited service shall be forfeited and no longer in force in the event the individual's accumulated contributions are withdrawn from the reserve for employee contributions and paid to the individual or a beneficiary (including an estate), except as provided in § 127-24.
C.
A member may have credited service that is forfeited
restored to his or her individual service account upon satisfaction
of each of the following conditions:
(1)
Membership recommences within five years from and
after the last date of termination of membership;
(2)
The retirement system is paid the total amount of
accumulated contributions previously withdrawn plus regular interest
from the date(s) of withdrawal to the date(s) of repayment. Repayment
shall be made in accordance with such rules as the Board shall from
time to time prescribe. A repayment must be completed within five
years of recommencement of membership.
D.
Restoration of forfeited credited service.
[Amended 2-6-2012 by Ord. No. 11-010]
(1)
A member who does not qualify for restoration of forfeited credited service under Subsection C hereof, either because membership did not recommence within five years after the last date of termination or because repayment under Subsection C(2) hereof was not completed within five years of recommencement of membership, may have forfeited credited service restored upon payment of an amount of money to the retirement system. The amount of money is the greater of the amounts described in Subsection D(1)(a) and (b) below.
(a)
This amount is a percentage of the member's pay times the number of years and fractions of a year of forfeited credited service involved. The percentage is the greater of 5% or the member's current contribution rate per § 127-26B. The member's "pay," as used in this subsection, means the amount of wages paid to the member by the City as shown on the most recent W-2 form that reflects a full 12 months of employment.
(b)
This amount is the amount of contributions the member withdrew
at the last termination of membership.
(2)
Prior to August 1, 1986, the amount described in Subsection D(1) hereof shall be the amount the member withdrew plus 3% interest compounded annually. Member contributions and interest paid into the retirement system pursuant to this subsection after August 15, 1986, are not subject to annuity withdrawal.
[Amended 12-17-2001 by Ord. No. 01-026]
A.
Notwithstanding any provision of this article to the
contrary, contributions, benefits and service credit with respect
to qualified military service will be provided in accordance with
§ 414(u) of the Internal Revenue Code. An individual who
leaves or left City employment to enter any armed service of the United
States shall have periods of active duty credited as City service,
subject to the following conditions:
(1)
The individual is reemployed by the City within 90
days from and after the date of termination of active duty or within
one year from hospitalization continuing after such termination;
(2)
The individual becomes a member;
(3)
In no case shall more than six years of service be
credited on account of all military service unless service is extended
by the government for military necessity.
B.
The Board shall determine the amount of service to
be credited a member under the provisions of this section.
C.
Effective January 1, 2007, the beneficiary of a member on leave of
absence to perform military service with reemployment rights described
in Code Section 414(u) where the member cannot return to employment
on account of his or her death, shall be entitled to any additional
benefits (other than benefits accruals relating to the period of qualified
military service) that would be provided under the plan had the member
died as an active employee, in accordance with Code Section 401(a)
37.
[Added 2-6-2012 by Ord. No. 11-010]
A.
The following benefit groups are designated for the
purpose of determining the benefit conditions and amounts applicable
to a member:
(1)
Benefit group "General: Non-Teamsters," consisting
of all members not included in one of the benefit groups which follow;
(2)
Benefit group "General: Teamsters," consisting of
all members who are represented by the Teamsters Union; and
(3)
Benefit group "Police and Fire," consisting of all
members who are sworn officers in the Police Department, including
probationary police officers, and firefighters.
B.
Retirement eligibility conditions shall be those conditions
applicable to the member's benefit group at the time of termination
of membership.
C.
Retirement allowance amounts shall be separately determined
for each benefit group for which the individual has credited service
in force, based on retirement system provisions in effect at the time
of termination of membership.
D.
Credited service acquired prior to October 1, 1980,
shall be considered to have been acquired in the benefit group to
which the member belonged on October 1, 1980.
A.
An individual may retire upon satisfaction of each
of the following requirements:
(1)
The individual has filed a written application for
retirement with the Board setting forth the date that the retirement
is to be effective. Said date shall be not less than 30 days nor more
than 90 days subsequent to the execution and filing of the application.
(2)
The individual terminates all City employment prior
to the date that retirement is to be effective.
(3)
The individual has met an applicable age and service
conditions for retirement.
B.
The age and service conditions for voluntary retirement
are as follows:
(1)
Benefit groups General: Non-Teamsters and General:
Teamsters: The individual has attained age 60 or older and has 10
or more years of credited service, or has attained age 65 or older
and has five or more years of credited service.
(2)
Benefit group Police and Fire: The individual has
attained age 50 or older and has 25 or more years of credited service;
or has attained age 55 or older and has 10 or more years of credited
service; or has attained age 60 or older and has five or more years
of credited service.
C.
Appointed and elected officials participating in the
City of Monroe Pension System are eligible to retire at 55 years with
a minimum of 15 years of service. These requirements are in addition
to previous eligibility requirements, i.e., 60 years of age with 10
years of service, and 65 years of age with five years of service,
as presently outlined in this article. There is no change in the present
contribution rate for these officials; the rate shall be 2%. Effective
July 2001, nonunion confidential employees participating in the City
of Monroe Pension System are eligible to retire at 55 years with a
minimum of 15 years of service.
[Amended 6-24-1996 by Ord. No. 96-011; 3-21-2016 by Ord. No. 16-002]
D.
Upon retirement, as provided in this section, an individual shall be paid a retirement allowance computed according to § 127-14.
E.
If at any time the City enters into a collective bargaining
agreement pursuant to the Public Employment Relations Act, Act No.
336 of the Public Acts of 1947, as amended, being MCLA §§ 423.201
to 423.217 of the Michigan Compiled Laws, that provides for retirement
benefits that are in excess of the retirement benefits otherwise authorized
to be provided under the provisions of the retirement system, the
City Council may amend the provisions of the retirement system, to
provide similar or dissimilar benefits to nonunion employee members,
including but not limited to the adjustment of the salary deduction
rates and the attachment of other conditions to the receipt thereof.
[Added 7-7-2008 by Ord. No. 08-009]
F.
All nonunion members retiring during the month of
June 2008, who did not receive a cost-of-living increase during calendar
year 2005, shall receive said increase in 2008 as a lump sum, and,
furthermore, said amount shall be added to their compensation for
2005 for purposes of calculating retirement benefits under this article.
[Added 7-7-2008 by Ord. No. 08-009]
A.
An individual, except an elected or appointed officer, shall be separated from City employment the first day of the calendar month next following attainment of the applicable age specified in Subsection B hereof.
A.
An individual who ceases to be a member, for a reason other than retirement or death, on or after satisfaction of the applicable age and credited service condition specified in Subsection B hereof, shall be entitled to retire upon attaining age 60 years. Upon retirement, the individual shall be paid a retirement allowance, computed according to § 127-14, as the section provided at the time of last termination of membership.
B.
The age and credited service conditions for vested
termination of membership are as follows. All benefit groups: The
member has 10 or more years of credited service.
C.
Withdrawal of an individual's accumulated contributions
and loss of credited service shall constitute a forfeiture of all
rights in and to retirement and the retirement allowance otherwise
provided in this section.
D.
The provisions of this Retirement System notwithstanding, the accrued
benefit for plan participants shall be nonforfeitable upon the attainment
of normal retirement age.
[Added 5-5-2014 by Ord. No. 14-002]
[Amended 2-16-1999 by Ord. No. 99-002; 3-21-2016 by Ord. No. 16-002]
A.
The amount of an individual's retirement allowance under optional form of payment A, as provided in § 127-16, shall be equal to the sum of separately determined amounts based on credited service, final average compensation and benefit formula applicable to each benefit group for which the individual has credited service in the force. Unless established otherwise through collective bargaining contract or by ordinance, the benefit formulas are:
(1)
For benefit group General: Teamsters: the individual's credited service
multiplied by the sum of 1.2% of the individual's final average compensation,
to a maximum of $350, plus 1.7% of the portion, if any, of the individual's
final average compensation that is in excess of $350.
(2)
For benefit group General: Non-Teamsters: the individual's credited
service multiplied by either 2% of the individual's final average
compensation if the retirement occurs on or after July 1, 1981, or
1.9% of the individual's final average compensation if the retirement
occurs on or after July 1, 1980, but prior to July 1, 1981. For appointed
officials who retire on or after January 1, 1991, the individual's
credited service shall be multiplied by the sum of 2.2% of the individual's
final average compensation. For confidential secretaries who retire
on or after July 1, 2001, the individual's credited service shall
be multiplied by the sum of 2.2% of the individual's final average
compensation.
(3)
For benefit group Police and Fire: The individual's credited service
multiplied by 2% of the individual's final average compensation.
C.
The minimum monthly retirement allowance for full-time employees of the City, except the Mayor, members of Council and members covered under § 127-48, shall be $75. This minimum shall apply prospectively to retirants and beneficiaries on rolls on the effective date of this article, as well as to retirants and beneficiaries who go on the rolls on or after the effective date.
D.
If a retirant or beneficiary is paid a workers' compensation benefit
which is more than the difference between the retirant's or deceased
member's final average compensation and the amount of retirement allowance
computed according to this section, the amount of retirement allowance
shall be reduced to the amount which is the difference between the
final average compensation and the workers' compensation benefit.
The reduction shall continue for the workers' compensation period.
E.
Appointed officials participating in the City of Monroe Pension System
who retire on or after July 1, 1998, shall have a two-percent cost-of-living
adjustment (COLA) applied to their monthly benefit beginning on the
annual anniversary of retirement. Confidential secretaries participating
in the City of Monroe Pension System who retire on or after July 1,
2001, shall have a two-percent cost-of-living adjustment (COLA), noncompounded,
applied to their monthly benefit beginning on the annual anniversary
of retirement.
[Amended 1-18-1994 by Ord. No. 94-001]
A.
All retirants and beneficiaries being paid a retirement
allowance on the effective date of this section shall have their retirement
allowances permanently recomputed. Such recomputed retirement allowances
shall be contractual obligations of the City and an accrued financial
benefit of retirants and beneficiaries that shall not be diminished
or impaired. Each retirant and beneficiary shall, beginning with the
effective date of this section, be paid a recomputed annual retirement
allowance as provided herein which shall be the greater of his or
her current annual retirement allowance, 75% of his or her inflation
adjusted benefit, or the sum of his or her current annual retirement
allowance and the amount disbursed to him or her in 1993 pursuant
to Section 27.1 of Ordinance No. 84-006, which amended Ordinance No.
81-010, the Retirement System Ordinance, as it existed before the
effective date of this section.
B.
For the purposes of Subsection A hereof, beneficiaries being paid retirement allowances shall have their recomputed annual retirement allowances calculated as if they were eligible to participate and actually received disbursements in 1993 pursuant to Section 27.1 of Ordinance No. 84-006, which amended Ordinance No. 810-10, the Retirement System Ordinance, as it existed before the effective date of this section, to the same extent as retirants.
C.
As used in this section, the term "inflation adjusted
benefit" shall be determined with reference to the Consumer Price
Index, All Items, Urban Consumers, as published by the United States
Department of Commerce. The inflation adjusted benefit shall be calculated
by multiplying the change in the average consumer price index from
the calendar year a retirement allowance first became payable due
to the member's separation from service to 1992, expressed as a percentage,
by the original annual retirement allowance of the retirant or beneficiary,
as the case may be. In the case of the beneficiary of a deceased retirant,
the original annual retirement allowance shall be the annual retirement
allowance that would have been payable to the beneficiary had the
retirant died immediately after retirement.
D.
The effective date of this section shall be January
1, 1994.
[Amended 12-9-1991 by Ord. No. 91-036]
A.
Optional forms of payment of a retirement allowance.
A retiring individual may elect to be paid under any one of the following
optional forms of payment. The election shall be in writing and filed
with the Board prior to the date the individual's retirement is effective.
Payment will be made under optional form of payment A if a timely
election of an optional form of payment is not made. The amount of
retirement allowance under optional forms of payment B, C and D shall
be the actuarial equivalent of the amount of retirement allowance
under optional form of payment A. If optional form of payment B or
optional form of payment C is elected, the beneficiary named in connection
with the optional form of payment shall not be changed once benefit
payments have commenced, except upon the death of the beneficiary,
in conjunction with the option election as provided herein.
(1)
Optional form of payment A: straight life retirement
allowance. Under optional form of payment A, the retirant is paid
an unreduced retirement allowance for life.
(2)
Optional form of payment B: 100% survivor allowance.
Under optional form of payment B, a retirant is paid a reduced retirement
allowance for life with the provision that upon the retirant's death
the reduced retirement allowance shall be continued throughout the
future lifetime of and paid to such individual having an insurable
interest in the retirant's life, as the retirant shall have designated
in writing and filed with the Board at the time of election of the
optional form of payment.
(3)
Optional form of payment C: 50% survivor allowance.
Under optional form of payment C, a retirant shall be paid a reduced
retirement allowance for life with the provision that upon the retirant's
death 1/2 of the reduced retirement allowance shall be continued through
the future lifetime of and paid to such individual having an insurable
interest in the retirant's life, as the retirant shall have designated
in writing and filed with the Board at the time of election of the
optional form of payment.
(4)
Optional form of payment D120: 120 months certain
and life retirement allowance. Under optional form of payment D120,
the retirant shall be paid a reduced retirement allowance for life
with the provision that if the retirant's death occurs before 120
monthly payments have been made, the full reduced retirement allowance
shall continue to be paid for the remainder of the 120 months to such
person or persons and in such shares as the retirant shall have designated
in writing and filed with the Board. If there is no such designated
person surviving, the remaining monthly payments shall be commuted
and paid to the estate of the last survivor among the retirant and
the designated person or persons.
(5)
Optional form of payment D180: 180 months certain
and life retirement allowance. Under optional form of payment D180,
the retirant shall be paid a reduced retirement allowance for life
with the provision that if the retirant's death occurs before 180
monthly payments have been made, the full reduced retirement allowance
shall continue to be paid for the remainder of the 180 months to such
person or persons and in such shares as the retirant shall have designated
in writing and filed with the Board. If there is no such designated
person surviving, the remaining monthly payments shall be commuted
and paid to the estate of the last survivor among the retirant and
the designated person or persons.
B.
Change of beneficiary: recomputation of monthly allowance.
(1)
This section applies to retired members who, at the
time of retirement, elected optional form of payment B or optional
form of payment C. A retired member who elects one of such optional
forms of payment may petition the Board for a change of beneficiary
after the death of the original beneficiary. Such a change of beneficiary
designation can be made only once by a retired member. The new beneficiary
named by the member in connection with this paragraph must be the
spouse of the member, and the member and the new beneficiary must
have been married to each other for at least 90 days at the time the
petition is filed with the Board.
(2)
Upon approval of the member's petition, the monthly
amount payable to the member shall be recomputed, as described below,
and the new beneficiary shall become the beneficiary under the optional
form of payment that was elected by the member at the time of retirement.
The effective date of the new beneficiary's status shall be determined
by the Board of Trustees and shall not be earlier than the later of
two dates. The first date is the date the Board approves the retired
member's petition. The second date is the date the recomputed monthly
amount becomes effective.
(3)
In the case of a retired member who changes his or
her beneficiary in accordance with the procedure described above,
the monthly amount payable to the retired member and the potential
amount payable to the beneficiary after death of the retired member
shall be recomputed. The recomputed monthly amount payable just after
the change is effective shall be the actuarial equivalent of the amount
that was payable to the member immediately before the change of beneficiary
becomes effective.
[Amended 2-16-1999 by Ord. No. 99-002]
An individual retiring pursuant to § 127-11 or 127-13, who has attained age 55 years or older but not age 65 years or older, may elect to coordinate his or her benefit group General: Non-Teamsters and benefit group General: Teamsters retirement allowance with his or her estimated primary social security benefit. The election shall be in writing and filed with the Board prior to the date the individual's retirement is effective. In the event a timely election is made, the retirant shall be paid an increased retirement allowance to the attainment of age 65 years and a reduced retirement allowance thereafter. The increased retirement allowance paid to the attainment of age 65 years shall approximate the sum of the reduced retirement allowance payable thereafter and the retirant's estimated social security primary insurance amount.
In the event all retirement allowance payments
terminate before there has been paid an aggregate amount equal to
the retirant's accumulated contributions on the date that retirement
was effective, the difference between the retirant's accumulated contributions
and the aggregate amount of retirement allowance payments made shall
be paid to such person or persons as the retirant shall have designated
in writing and filed with the Board. If there is no such individual
surviving the retirant, the difference shall be paid to the estate
of the last survivor among the retirant and the designated person
or persons.
A.
Upon the application of a member or the member's department head, a member in the employ of the City who becomes totally and permanently incapacitated for employment by the City by reason of personal injury or disease and who has in force the applicable period of credited service specified in Subsection B hereof, may be retired by the Board, subject to the following conditions:
(1)
The member is medically examined by or under the direction
of the medical authority;
(2)
The medical authority certifies to the Board that
the person is, mentally or physically, totally incapacitated for continued
employment by the City, that such incapacity will probably be permanent
and that the member should be retired; and
(3)
The Board concurs with the certification of the medical
authority.
B.
The credited service requirements for disability retirement
are as follows. All benefit groups: 10 years.
C.
Upon disability retirement, a member shall be paid a retirement allowance computed according to § 127-14. If a disability retirant is paid a workers' compensation benefit which is more than the difference between the retirant's final average compensation and the amount of retirement allowance computed according to § 127-14, the amount of retirement allowance shall be reduced to the amount which is the difference between the final average compensation and the workers' compensation benefit. The reduction shall continue for the workers' compensation period. The disability retirement and the amount of disability retirement allowance shall be subject to §§ 127-20 and 127-21.
In the event a member or a disability retirant
is paid workers' compensation on account of City employment and the
Board finds the disability to be the natural and proximate result
of a personal injury or disease arising out of and in the course of
actual performance of duty with the City, the following provisions
shall apply:
A.
The applicable service requirement specified in § 127-19 shall be waived and the amount of retirement allowance payable prior to attainment of age 65 years shall not be less than the amount computed as if the member had exactly 10 years of credited service.
B.
Upon attaining age 65 years or the prior termination of the disability retirant's workers' compensation period, the disability retirant shall be credited with service for his or her workers' compensation period and the disability retirement allowance provided in § 127-19 shall be recomputed using the adjusted credited service. Service credited, as provided in this section, shall be considered applicable to the member's benefit group at the time of disability retirement. In no case shall service be credited for any period beyond a retirant's attainment of age 65 years.
A.
The Board may require a disability retirant to undergo
periodic medical examinations by or under the direction of the medical
authority if the disability retirant has not attained the age of 55
years. If a disability retirant refuses to submit to a medical examination,
payment of the disability retirement allowance may be suspended by
the Board until withdrawal of the refusal. Should refusal continue
for one year, all the disability retirant's rights in and to a disability
retirement allowance may be revoked by the Board. A disability retirant
shall be restored to active employment with the City and the disability
retirement allowance discontinued if, following a medical examination,
the medical authority certifies that the disability retirant is mentally
and physically able and capable of resuming employment with the City,
and the Board concurs in the certification of the medical authority.
The City shall be allowed reasonable latitude in placing the returned
disability retirant in a position commensurate with the position held
at the time of disability retirement.
B.
A disability retirant who has been restored to employment with the City, as provided in Subsection A hereof, shall again become a member of the retirement system. The disability retirant's credited service at the time of retirement shall be restored in full force. Service shall be credited for the period the disability retirant was being paid a disability retirement allowance if, within said period, the disability retirant was paid workers' compensation on account of the same disability which caused retirement; otherwise, credited service shall not be given for the period of disability retirement.
C.
If a disability retirant is or becomes engaged in a gainful occupation, business or employment, paying more than the difference between the retirant's final average compensation and the amount of disability retirement allowance, the disability retirement allowance shall be reduced to the amount which is the difference between the final average compensation and the amount so earned. Should the retirant's earnings be later changed, the disability retirement allowance shall be correspondingly adjusted. If the gainful employment is with the City, the disability retirant's final average compensation shall be adjusted annually to reflect the lesser of across-the-board compensation increases granted to members of the applicable benefit group since the time of disability retirement and changes in the consumer price index since the date of retirement. A gainful occupation with an employer other than the City, which existed at the time of disability retirement, shall not be considered for the purposes of this section to the extent of earnings in the twelve-month period preceding disability retirement. The limitation of this subsection shall apply until the retirant would have met all applicable age and service requirements for retirement, as provided in § 127-11, had employment with the City continued without interruption.[1]
[1]
Editor's Note: See also § 127-48B(4)(b).
[Amended 7-28-1986 by Ord. No. 86-016; 2-16-1999 by Ord. No.
99-002]
A.
A member who has satisfied an applicable age and credited service condition specified in Subsection B hereof may nominate a beneficiary whom the Board finds to be dependent upon the member for at least 50% of his or her support due to the lack of financial means. A member may revoke a nomination of a beneficiary at any time and again nominate a beneficiary whom the Board finds to be dependent upon the member for at least 50% of his or her support due to a lack of financial means. The nomination of beneficiary shall be in writing and filed with the Board. The nomination of a beneficiary shall be null and void upon the member's retirement or prior termination of City employment. Upon the death of a member who has a valid nomination of a beneficiary in force, the beneficiary, if living, shall be paid a retirement allowance computed according to § 127-14 in the same manner and in all respects as if the member had elected optional form of payment B provided in § 127-16 and retired the day preceding his or her death, notwithstanding that the member may not have satisfied the conditions for retirement. No retirement allowance shall be paid under this section on account of the death of a member if any retirement allowance is paid or will become payable under § 127-24 on account of the death.
B.
The age and credited service conditions for the payment
of an automatic survivor pension to a spouse are as follows: All benefit
groups: age 55 years or older and 10 or more years of credited service;
or 15 years of credited service without regard to attained age.
C.
The amount of an automatic survivor retirement allowance is as follows: all benefit groups: The individual to whom the deceased member was married at the time of death shall be paid a retirement allowance computed according to § 127-14 in the same manner in all respects as if the deceased person had elected optional form of payment B provided in § 127-16 and retired the day preceding his or her death, notwithstanding that the deceased member may not have satisfied the conditions for retirement. No retirement allowance shall be paid under this section if any retirement allowance is paid or will become payable under § 127-22 or 127-24 on account of the death.
[Amended 2-16-1999 by Ord. No. 99-02]
A.
In the event a member dies as the result of a personal injury or disease arising solely and exclusively out of and in the course of employment by the City, or in the event a disability retirant, who was paid a workers' compensation benefit on account of the same disability for which he or she was retired and who has not elected an optional form of payment provided in § 127-22, dies while being paid workers' compensation as a result of the same injury or disease for which he or she was retired, the applicable benefits provided in Subsection B hereof shall be paid subject to the following conditions:
(1)
The injury or disease resulting in death is found
by the Board to have occurred as the natural and proximate result
of causes arising out of and in the course of the member's or disability
retirant's actual performance of duties in the employ of the City;
and
(2)
Eligible beneficiaries apply for and are paid a workers'
compensation benefit on account of the death of the member or disability
retirant.
B.
Subject to Subsection C hereof, the potential benefits payable in accordance with this section are:
(1)
Accumulated contribution. The amount of accumulated contributions standing to the deceased member's credit in the reserve for employee contributions at the time of death shall be paid in accordance with the provisions of § 127-25.
(2)
To the spouse. The person, if any, to whom the deceased
member was married at both the date of employment by the City last
terminated and the date of death shall be paid a retirement allowance
equal to his or her workers' compensation benefit converted to a monthly
amount. Payment of the retirement allowance shall begin upon termination
of the spouse's workers' compensation period and shall terminate upon
remarriage or death.
(3)
To the minor children. Each unmarried child of the
deceased member who is under the age of 18 years shall be paid a retirement
allowance equal to his or her workers' compensation benefit converted
to a monthly amount. A child's retirement allowance shall begin upon
termination of the child's workers' compensation period and shall
terminate upon marriage, attainment of age 18 years or death, whichever
occurs first.
|
If a spouse's retirement allowance is terminated,
each eligible child's retirement allowance shall be increased by an
equal share of the spouse's terminated retirement allowance.
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(4)
To dependent parents. The dependent father and the
dependent mother, if any, of the deceased member shall each be paid
a retirement allowance equal to his or her workers' compensation benefit
converted to a monthly amount. A parent's retirement shall begin upon
termination of the parent's workers' compensation period and shall
terminate upon death or remarriage.
C.
In no case shall the monthly amount of all retirement
allowances paid under this section exceed the deceased individual's
final average compensation. Retirement allowances shall be reduced
proportionately to satisfy this subsection.
A.
An individual who ceases to be a member for any reason except retirement or death, prior to satisfying any of the applicable age and service requirements for retirement provided in § 127-11, shall be paid his or her accumulated contributions upon written request filed with the Board.
B.
If an individual dies and no retirement allowance becomes or will become payable by the retirement system on account of the death, then, except as provided in § 127-23, the deceased individual's accumulated contributions shall be paid to such individual or individuals as the deceased individual shall have nominated by written designation, duly executed and filed with the Board. If there is no such designated individual surviving the deceased individual, the accumulated contributions shall be paid to the deceased individual's estate.
C.
In the event an individual dies intestate, with heirs and without having nominated an individual as provided in Subsection B hereof, his or her accumulated contributions may be used to pay his or her burial expense, not to exceed a reasonable sum to be determined by the Board, if the deceased individual leaves no other estate sufficient for such purpose.
D.
Payment of accumulated contributions, as provided
in this section, may be made in installments according to such rules
as the Board may from time to time adopt.
[Amended 2-16-1999 by Ord. No. 99-002]
A.
The reserve for employee contributions shall be the
account in which shall be accumulated, at regular interest, the contributions
deducted from the compensation of members, or otherwise paid to the
retirement system, and from which shall be made refunds and transfers
of accumulated contributions as provided in this article.
B.
A member's contributions to the retirement system
shall be as determined by collective bargaining contract or by ordinance.
(1)
Notwithstanding any other provisions of this retirement system and as applicable to any member covered under § 127-48, such member's contributions to the retirement system shall be 4% of such member's compensation for a given fiscal year, or as established otherwise through collective bargaining contract or by ordinance.
C.
The individual or individuals responsible for preparing the City payroll shall cause the contributions provided for in Subsection B hereof to be deducted from the compensation of each member on each and every payroll. The deducted contributions shall be paid to the retirement system and shall be credited to the member's individual accounts in the reserve for employee contributions. Members' contributions shall be made notwithstanding that the minimum compensation provided by law for any member shall be changed thereby. Every member shall be deemed to consent and agree to the deductions made and provided herein. Payment of compensation, less the deduction, shall be a full and complete discharge and acquittance of all claims and demands whatsoever for services rendered by the member during the period covered by such payment, except as to the benefits provided by the retirement system. The individual or individuals responsible for preparing the City payroll shall certify to the City Clerk/Treasurer and the Board the amount of contribution deducted from the compensation of each member on each and every payroll.
D.
In addition to the contributions deducted from the
compensation of a member, as hereinbefore provided, a member may deposit
in the reserve for employee contributions the amount of any repayment
pursuant to § 127-08. The deposits may be made in a single
sum or by an increased rate of contribution approved by the Board.
E.
The accumulated contributions of a member shall be transferred from the reserve for employee contributions to the reserve for retired benefit payments upon retirement. At the expiration of a period of three years from the date an individual without entitlement to a vested termination retirement allowance provided in § 127-13 ceases to be a member, any balance in the reserve for employee contributions unclaimed by the individual or the individual's legal representative shall be transferred to the reserve for undistributed investment income.
[Amended 1-18-1994 by Ord. No. 94-001]
A.
The reserve for retired benefit payments shall be
the account from which shall be paid all retirement allowances and
residual accumulated contribution refunds as provided in this article.
Should a disability retirement be terminated and the retirant be returned
to the employ of the City, the retirement allowance reserve at the
date of termination shall be transferred, from the reserve for retired
benefit payments to the reserve for employee contributions and the
reserve for employer contributions, in the proportion transfers were
made from such accounts because of the retirement.
B.
Whenever the balance in the reserve for retired benefit
payments exceeds the reported value of retirement allowances being
paid and likely to be paid retirants and beneficiaries, including
specifically established reserves (as reported in the annual actuarial
valuation), the excess shall be transferred to the reserve employer
contributions, provided, however, that whenever the balance in the
reserve for retirement benefit payments is less than the value of
retirement allowances being paid and likely to be paid retirants and
beneficiaries, including specifically established reserves (as reported
in the annual actuarial valuation), the amount of such shortage shall
be transferred from the reserve for employer contributions to the
reserve for retirement benefit payments.
A.
The reserve for employer contributions shall be the
account to which shall be credited contributions made by the City
to the retirement system and from which shall be made transfers as
provided in this section.
B.
Each year, following receipt of the report of the
annual actuarial valuation, the excess, if any, of the reported value
of retirement allowances being paid and likely to be paid retirants
and beneficiaries over the balance in the reserve for retired benefit
payments shall be transferred from the reserve for employer contributions
to the reserve for retired benefit payments.
C.
The financial objective of this section is to require City contributions
to the retirement system each fiscal year which, together with the
contributions made by members during the fiscal year, shall be sufficient
to fully fund the cost of benefits likely to be paid on account of
service rendered by members during the year and to finance unfunded
costs of benefits likely to be paid on account of service rendered
by members prior to the current year over a period of not more than
30 years. Such contributions shall be computed by the actuary as level
percents of member payroll, in accordance with generally accepted
actuarial principles, on the basis of such rates of interest and tables
of experience as the Board shall from time to time adopt. The City
shall also contribute the anticipated cost of any insurance coverage
provided retirants and beneficiaries through the retirement system.
The Board shall annually certify to the Council the contributions
determined according to this section, and the Council shall appropriate
and pay to the retirement system the contributions so certified.
[Amended 2-6-2012 by Ord. No. 11-010]
The reserve for undistributed investment income
shall be the account to which shall be credited all interest, dividends
and other income from the investment of retirement system assets,
all gifts and bequests received by the retirement system, all unclaimed
accumulated contributions and pensions, all appropriations for administrative
expenses and all other moneys received by the retirement system, the
disposition of which is not specifically provided. There shall be
transferred from the reserve for undistributed investment income all
amounts required to credit regular interest to the reserve for employee
contributions, the reserve for employer contributions and the reserve
for retired benefit payments, and to pay administrative expenses of
the retirement system. Whenever the Board determines that the balance
in the reserve for undistributed investment income is more than sufficient
to cover current charges to the account, the excess or any part thereof
may be used to provide contingency reserves or to meet special requirements
of the other reserve accounts of the retirement system. Whenever the
balance in the reserve for undistributed investment income is insufficient
to meet the current charges to the account, the amount of the insufficiency
shall be transferred from the reserve for employer contributions.
[Amended 7-9-1984 by Ord. No. 84-006; 2-16-1999 by Ord. No.
99-002; 12-20-2004 by Ord. No. 04-015]
A.
The general administration, management and responsibility
for the proper operation of the retirement system, and for construing
and making effective the provisions of the retirement system, are
hereby vested in a Board of Trustees.
B.
The Board shall consist of the following nine individuals:
(1)
The Mayor, by virtue of his or her office. The Mayor
may appoint one member of the City Council to serve as his or her
designee and to serve for such person's elective term.
(2)
One member of the City Council to be selected by the
City Council to serve at the pleasure of the City Council.
(3)
The City Manager, by virtue of his or her office.
(4)
One retirant who is an elector, resident and taxpayer
of the City, to be appointed by the City Council.
(5)
One citizen who is an elector, resident and taxpayer
of the City, to be appointed by the City Council.
(6)
A member who is included in benefit group Police and
Fire, to be elected by police officer members included in the benefit
group.
(7)
A member who is included in benefit group Police and
Fire, to be elected by the firefighter members included in the benefit
group.
(8)
A member who is included in benefit group General:
Teamsters, to be elected by the Teamster members included in the benefit
group.
(9)
A member who is included in benefit group General:
Non-Teamsters, to be elected by the non-Teamster members included
in the benefit group.
C.
Elections of member trustees shall be held in accordance
with rules adopted by the Board.
[Amended 12-20-2004 by Ord. No. 04-015]
The regular term of office of a member-elected
trustee, retirant trustee and the citizen trustee shall be four years,
one such term to expire every year. Each trustee shall, before assuming
the duties of trustee, qualify by taking an oath of office to be administered
by the City Clerk/Treasurer.
[Amended 12-20-2004 by Ord. No. 04-015]
A.
A vacancy shall occur on the Board if:
(1)
Any member-elected trustee ceases to be a member or
ceases to be included in an appropriate benefit group;
(2)
The Mayor or the Council-elected trustee ceases to
be the Mayor or a Council member, or the citizen trustee ceases to
be a citizen-elector, taxpayer or resident, or the retirant trustee
ceases to be a retirant-elector, taxpayer or resident; or
(3)
Any member-elected trustee fails to attend three consecutive
meetings of the Board, unless in each case he or she was excused for
cause by the trustees attending the meetings; and
(4)
Any trustee resigns or is removed from office.
B.
In the event a vacancy occurs on the Board, the vacancy
shall be filled within 60 days, for the unexpired term, by Council
appointment.
[Amended 2-16-1999 by Ord. No. 99-002]
The Board shall hold meetings regularly, at
least one in each calendar quarter, and shall designate the time and
place of each meeting. All meetings of the Board shall be open to
the public. The Board shall adopt its own rules of procedure and shall
keep a record of its proceedings. Five trustees shall constitute a
quorum at any meeting of the Board, and at least five concurring votes
shall be necessary for a decision of the Board. Trustees shall serve
without compensation for their services as trustees but shall be entitled
to their expenses actually and necessarily incurred in attending meetings
of the Board and in performing required duties as trustees.
The officers and employed services of the retirement
system shall be as follows:
A.
Chairperson and Vice Chairperson. The Board shall
annually elect a Chairperson and a Vice Chairperson from its members.
B.
Secretary. The City Clerk/Treasurer shall be Secretary
and administrative officer of the retirement system.
C.
Treasurer. The City Clerk/Treasurer shall be Treasurer
of the retirement system. The Treasurer shall be custodian of the
assets of the retirement system, except as to such assets as the Board
may from time to time place in the custody of a nationally chartered
bank.
D.
Legal advisor. The City Attorney shall be legal advisor
to the Board.
E.
Actuary. The Board shall appoint an actuary who shall
be the technical advisor to the Board regarding the operation of the
retirement system on an actuarial basis and who shall perform such
services as are required in that connection. The term "actuary," as
used in this article, shall mean a member of the American Academy
of Actuaries or a person who has demonstrated an educational background
necessary for the practice of actuarial science and who has at least
five years of relevant pension actuarial experience. A partnership
or corporation may be appointed actuary if the duties of actuary are
performed by or under the direct supervision of an individual who
meets the preceding qualifications.
F.
Medical authority. The Board shall appoint as medical
authority a physician who is not a member, retirant or beneficiary
of the retirement system. The medical authority shall arrange for
and pass upon all medical examinations required in the administration
of the retirement system and shall investigate all statements and
certificates of a medical nature which are presented in connection
with the operation of the retirement system. The medical authority
shall report his or her conclusions and recommendations in writing.
G.
Other services. The Board is authorized and empowered
to employ such professional and other services as are required for
the proper administration of the retirement system. Compensation for
such services shall be fixed by the Board, subject to approval of
the Council.
The Board shall keep or cause to be kept, in
convenient form, such data as shall be recommended by the actuary
as necessary for the operation of the retirement system on an actuarial
basis. The Board shall keep or cause to be kept, in convenient form,
such additional data as are required to properly report the operations
of the system. The Board shall render a report to the City Council
on or before December 31 of each year, showing the fiscal transactions
of the retirement system for the year that ended the preceding June
30 and a copy of the most recent actuarial report.
The Board shall, at the end of each fiscal year,
credit regular interest on the individual balances in the reserve
for employee contributions at the beginning of the year, and on the
mean balances in the reserve for employer contributions and the reserve
for retired benefit payments. The amounts so credited shall be charged
to the reserve for undistributed investment income.
The Board shall be the trustees of the moneys
and assets of the retirement system. The Board shall have full power
and authority to invest and reinvest such monies and assets subject
to all terms, conditions, limitations and restrictions imposed by
the State of Michigan on the investments of public employee retirement
systems. The Board may employ outside investment counsel to advise
the Board in the making and disposition of investments. All monies
and assets of the retirement system shall be held for the sole purpose
of meeting the disbursements authorized in accordance with the provisions
of this article and shall be used for no other purposes. In exercising
its discretionary authority with respect to the management of the
assets of the retirement system, the Board shall exercise the care,
skill, prudence and diligence, under the circumstances then prevailing,
that a person of prudence, acting in a like capacity and familiar
with such matters, would use in the conduct of an enterprise of like
character and with like aims.
All payments from moneys of the retirement system
shall be made according to Charter and ordinance provisions governing
the disbursement of general fund moneys. No payment shall be made
unless it shall have been previously authorized by a specific or continuing
resolution of the Board. No authorization of the Council shall be
required for the making of such payments.
The descriptions of the various reserves of
the retirement system shall be interpreted to refer to the accounting
records of the system and not to the segregation of monies or assets
in the reserve accounts of the system.
The right of an individual to a retirement allowance,
the return of accumulated contributions, the retirement allowance
itself, any optional benefit or any other right accrued or accruing
to any individual under the provisions of the retirement system, and
any moneys belonging to the retirement system, shall not be subject
to execution, garnishment, attachment, the operation of bankruptcy
or insolvency law or any other process of law whatsoever, and shall
be unassignable, except as is otherwise specifically provided for
herein. If a member is covered by a group insurance or prepayment
plan participated in by the City, and should he or she be permitted
to and elect to continue such coverage as a retirant, he or she may
authorize the Board to have deducted from his or her retirement allowance
the payments, if any, required of him or her to continue coverage
under such group insurance or prepayment plan. The City shall have
the right of set-off for any claim arising from embezzlement by fraud
by a member, retirant or beneficiary.
Should any change in the records result in any
member, retirant or beneficiary being paid more or less than he or
she would have been entitled to be paid had the records been correct,
the Board shall correct such error and, as far as practicable, shall
adjust the payment in such manner that the actuarial equivalent of
the benefit to which the said member, retirant or beneficiary was
correctly entitled shall be paid.
In the event an individual becomes entitled
to a retirement allowance or other benefit payable by the retirement
system as a result of an accident or injury caused by the act of a
third party, the City shall be subrogated to the rights of the individual
against such third party to the extent of the City-financed benefits
to which the retirement system pays or becomes liable to pay.
[Amended 2-16-1999 by Ord. No. 99-002]
The accrued financial benefits of the retirement
system shall be a contractual obligation of the City and shall not
be diminished or impaired by the City. The terms of this article shall
constitute the only basis upon which each such contractual obligation
shall arise and accrue, and no benefits shall arise or accrue to any
member or retirant, except those specifically provided for in this
article and in accordance with the terms thereof.
The City expects to continue the retirement
system and payment of contributions, but the right to amend or terminate
the system is necessarily reserved to the City, together with the
right to discontinue, suspend or change the rate and amount of its
contributions at any time. However, no such action shall cause any
part of the corpus or income of the assets to be used for or diverted
to purposes other than the exclusive benefit of participants or their
beneficiaries and other persons entitled to be paid benefits by the
system, nor shall any such action adversely affect benefits already
provided by the system or retroactively decrease the accrued benefits
of any participant, except that the City may make any amendment it
determines necessary or desirable, with or without retroactive effect,
to comply with the requirements of the Internal Revenue Service.
A.
Upon termination of the retirement system, each participant's
accrued benefits to the date of termination shall become 100% nonforfeitable
to the extent funded.
(1)
The assets of the retirement system shall be allocated
(after provision is made for all expenses of the plan, including the
expenses of liquidation) by the payment or provision for the payment
of benefits in the following order of preference:
(a)
To provide for the payment to each participant
and nonretired former participant of an amount equal to his or her
accumulated contributions; and
(b)
If any assets remain after complete allocations for the purpose of Subsection A(1)(a) hereof, to provide for the continuance of retirement allowances to retirants and beneficiaries, if any; and
(c)
If any assets remain after complete allocations for the purposes of Subsection A(1)(a) and (b) hereof, to provide for the potential rights of participants and former participants entitled to a vested termination retirement allowance on an equitable and nondiscriminatory basis according to generally accepted actuarial principles.
B.
The allocations provided for in Subsection A hereof may be implemented through the continuance of the existing trust or through a new trust instrument for that purpose, through the purchase by the Board of insurance company contracts or by a combination of these media. No participant or other employee shall have any rights or claims on the system or the City beyond the capacity of the assets held by the Board to provide benefits in accordance with the above provisions.
C.
If the allocations produce a retirement allowance
of less than $25 a month for any person, the Board may pay, in lieu
of such retirement allowance, a lump sum of actuarial equivalent value.
[Amended 10-9-1989 by Ord. No. 89-017; 2-17-2001 by Ord. No. 01-026; 1-6-2003 by Ord. No. 02-011]
Notwithstanding any provision of this article
to the contrary, benefits and contributions shall be limited in accordance
with § 415 of the Internal Revenue Code, which is hereby
incorporated by reference. For limitation years beginning after December
31, 1997, for purposes of applying the limitations of § 415
of the Internal Revenue Code, compensation paid or made available
during such limitation years shall include any elective deferral [as
defined in § 402(g)(3) of the Internal Revenue Code] and
any amount which is contributed or deferred by the employer at the
election of the employee and which is not includable in the gross
income of the employee by reason of §§ 125 and 457
of the Internal Revenue Code. For limitation years beginning on and
after January 1, 2001, for purposes of applying the limitations described
herein, compensation paid or made available during such limitation
years shall include elective amounts that are not includable in the
gross income of the employee by reason of § 132(f)(4) of
the Code.
[Amended 10-9-1989 by Ord. No. 89-017; 2-16-1999 by Ord. No.
99-002]
A.
The City shall pick up the member contribution required by § 127-48B(8) and any related collective bargaining agreement for all compensation earned after the effective date of this section. The contributions so picked up shall be treated as employer contributions in determining tax treatment under the United States Internal Revenue Code. The City shall pick up the member contributions from funds established and available in the salaries account, which funds would otherwise have been designated as member contributions and paid to the pension plan. Member contributions picked up by the City pursuant to this section shall be treated for all other purposes of this and other laws of the City in the same manner and to the same extent as member contributions made prior to the effective date of this section.
B.
The effective date of this section shall be January
1, 1990, or such later date as deemed necessary by the City for administrative
reasons.
[Amended 3-17-1997 by Ord. No. 97-007; 2-16-1999 by Ord. No.
99-002; 12-17-2001 by Ord. No. 01-026]
A.
Effective date for eligible employees:
(1)
New hires. The provisions of this section will become effective May
1, 1997, and will apply to all nonunion employees of the City of Monroe
hired on or after that date, with the exception of appointed officials
who have a written agreement with City Council for the City of Monroe,
which provides that they will be members of the defined benefit portion
of the retirement system. The provisions of this section will apply
to union employees of the City hired on or after a specific date,
provided that the bargaining unit representing such employees has
negotiated with the City to adopt the provisions of this section as
part of a collective bargaining agreement with the City.
[Amended 2-6-2012 by Ord. No. 11-010]
(2)
Employees hired prior to May 1, 1997; right to elect.
Any nonunion employee of the City who was hired prior to May 1, 1997,
and who continues to be employed by the City shall be given a one-time
right to make an irrevocable election to be covered under the provisions
of this section. Any such employee who was not an active employee
on May 1, 1997, but who later becomes an active employee, will be
automatically covered under the provisions of this section as of the
date he or she again becomes an active employee.
|
Any union employee hired prior to May 1, 1997,
and who continues to be employed by the City or who is rehired or
who returns to active status shall be given a one-time right to make
an irrevocable election to be covered under this section to the extent
such election is included in the collective bargaining agreement which
covers his or her employment with the City.
|
(3)
Transfer procedures. When an eligible employee elects to be covered under the provisions of this section, and has satisfied all the procedural requirements established under Subsection A(5) hereof, the employee's credited service and the employee's contributions, including regular interest credited on them as of the employee's effective date of coverage under this section, shall be recorded on the records of the City of Monroe employees' retirement system. These amounts, when combined with future years of credited service and future employee contributions and regular interest, will be included in the determination of the employee's benefits payable under this section.
(4)
Nonduplication. Any employee who elects to be covered
under the provisions of this section shall forfeit his or her right
to be covered under the corresponding provisions of the other sections
of this article, as amended.
(5)
Rules, procedures, forms and information. Rules, procedures,
forms and information. The Board of Trustees shall establish rules
and procedures governing such election, including (but not limited
to) the determination of the election period, the preparation of suitable
election forms and the presentation of relevant materials, to permit
employees to make an informed choice.
(6)
Total accrued benefit. A member's "total accrued benefit"
at any point in time means the combination of the benefit provided
by the member's own accumulated contributions with the benefit provided
by the City's contributions in accordance with the terms of this section.
(7)
Actuarial equivalence. For the purpose of benefits
under this section, two benefits are actuarially equivalent if they
have the same actuarial present value. Actuarial present values will
be determined in accordance with assumptions established by the Board
of Trustees upon the advice of the Actuary for the Board. For purposes
of adjusting any benefit or limitation under Internal Revenue Code
§ 415, the mortality table used shall be the table prescribed
by the United States Secretary of the Treasury in accordance with
§ 415(b)(2)(e)(v) of the Internal Revenue Code.
(8)
COLA payable on monthly pensions.
(a)
An eligible employee who retires or terminates under the provisions of this section and who elects to receive benefits under a monthly pension option as described in Subsection B hereof shall have a cost-of-living adjustment (COLA) applied to his or her monthly benefit beginning on the annual anniversary of retirement.
(b)
On each subsequent annual anniversary of retirement,
the retired employee will receive a COLA on the amount of monthly
benefit that was paid to him or her the previous annual anniversary
date.
(c)
The redetermined amount of retirement benefit
shall be the original monthly amount payable at retirement increased
by 2% or the percentage increase in the CPI, whichever is lower. Increases
do not compound. The term "CPI" means the consumer price index, United
States Department of Labor, Bureau of Labor Statistics, Urban Wage
Earners and Clerical Workers (CPI-W), All Cities, All Items, 1982-1984
= 100, as announced, calculated and implemented by the Social Security
Administration each December for the following year.
(9)
Optional forms of benefits.
(a)
Eligible employees who are covered under this section and who elect a monthly benefit option at retirement may elect to receive that benefit in any of the optional forms of benefits described in § 127-16.
(b)
Any optional form of benefit payable under this section shall be the actuarial equivalent of the retirement benefit payable under optional form of payment A as defined in § 127-16A(1). Actuarial equivalence shall be based on assumptions established by the Board upon the advice of the Actuary for the Board.
(10)
Coordination with workers' compensation. If
a member of this plan is eligible to receive benefits from workers'
compensation, then any benefits payable from this plan will be offset
against such workers' compensation benefits. That is, benefits from
this plan will be primary. To determine the net benefits payable from
workers' compensation, workers' compensation benefits will be converted
to a monthly benefit from which monthly benefits from this plan are
then subtracted.
B.
Benefit provisions.
(1)
Retirement benefits.
(a)
Eligibility. A member covered under this section
will be eligible to retire under this retirement plan effective the
first day of the first month coincident with or next following the
earlier of the following:
(b)
Benefits payable. An eligible member may elect
either the monthly pension option or the lump sum option, as follows:
[1]
Monthly pension option. The greater of the following:
[2]
Lump sum option. In lieu of all other benefits,
a member covered under this section may elect to receive, upon retirement,
a single sum distribution of 1.5 times his or her accumulated contributions
as of his or her date of retirement. By electing this option, a member
forfeits all rights to potential future benefits.
(2)
Early benefit option.
(a)
Eligibility. A member covered under this section
who retires on or after reaching age 55 and who has completed 15 years
of service may elect to receive the early benefit option. Subject
to the provision hereinafter provided, nonunion members covered under
this section who were in the employ of the City of Monroe and had
at least 15 years of service as of July 1, 2008, and who retire on
or before September 30, 2008, may retire under the early benefit option,
regardless of age. Nonunion members who meet the foregoing eligibility
criteria and desire to retire under the early benefit option shall
submit to the City's Human Resources Office a completed Election Form
and a completed Voluntary Retirement Agreement (Agreement) by no later
than 4:00 p.m. on September 30, 2008.
[Amended 7-7-2008 by Ord. No. 08-010; 7-21-2008 by Ord. No.
08-012; 8-25-2008 by Ord. No. 08-013]
(b)
Benefits payable. An eligible member may elect
the monthly pension option or the lump sum option as follows:
[1]
Monthly pension option. The monthly pension
that can be paid from 1.5 times the member's accumulated contributions
as of the member's date of retirement.
[2]
Lump sum option. In lieu of the monthly pension
option, a member may elect to receive, upon retirement, a lump sum
distribution of 1.5 times his or her accumulated contributions as
of his or her date of retirement. By electing this option, a member
forfeits all rights to potential future benefits.
(3)
Termination benefits.
(a)
Eligibility. A member covered under this section
is always 100% vested in his or her accumulated contributions. A member
who has completed three years of service will be 100% vested in his
or her total accrued benefit.
(b)
Benefits payable. An eligible member who terminates
employment with the City may elect either the immediate option or
the deferred option as follows:
[1]
Immediate option.
[a]
A lump sum distribution in accordance
with the following schedule:
|
Years of Credited Service
|
Immediate Lump Sum Available
| |
|---|---|---|
|
Less than 3
|
1.0 times the member's accumulated contributions
| |
|
At least 3, but less than 7
|
1.25 times the member's accumulated contributions
| |
|
7 or more
|
1.50 times the member's accumulated contributions
|
[b]
By electing this option, a member
forfeits all rights to potential future benefits.
[2]
Deferred option. A member may elect to leave his or her accumulated contributions in the fund until he or she has reached retirement age as defined in Subsection B(1)(a) or (2)(a) hereof. At that point he or she can elect to receive his or her benefits in accordance with Subsection B(1)(b) or (2)(b) hereof, as applicable.
(4)
Disability benefits.
(a)
Eligibility. Upon the application of a member
or the member's department head, a member in the employ of the City
who becomes totally and permanently incapacitated for employment by
the City by reason of a personal injury or disease may be retired
by the Board of Trustees subject to the following conditions:
[1]
The member is medically examined by or under
the direction of the medical authority;
[2]
The medical authority certifies to the Board
of Trustees that the person is mentally or physically totally incapacitated
for continued employment by the City, that such incapacity will probably
be permanent and that the member should be retired; and
[3]
The Board of Trustees concurs with the certification
of the medical authority.
(b)
Benefits payable.
[Amended 2-6-2012 by Ord. No. 11-010]
[1]
A monthly benefit shall be payable in accordance
with the following schedule:
|
Years of Credited Service
|
Monthly Benefit Payable
| |
|---|---|---|
|
Less than 3
|
1.0% times final average compensation times
credited service
| |
|
At least 3, but less than 7
|
1.25% times final average compensation times
credited service
| |
|
7 or more
|
1.50% times final average compensation times
credited service
|
[2]
Final average compensation and credited service are determined
as of the date of disability by the Board of Trustees.
[3]
Continuation of disability benefits under this section will be subject to the provisions of § 127-21, except that, for the purposes of this section, the last sentence of § 127-21C shall read: "The limitation of this subsection shall apply until the retirant would have met all applicable age and service requirements for retirement, as provided in § 127-48B(1), had employment with the City continued without interruption."
(5)
Death benefits: death in service.
(a)
Eligibility.
[1]
A member may nominate a beneficiary whom the
Board of Trustees finds to be dependent upon the member for at least
50% of his or her support due to lack of financial means. The member's
spouse, child, stepchild, parent or stepparent is deemed to satisfy
this financial dependency requirement automatically. A member may
revoke a nomination of beneficiary at any time and again nominate
a beneficiary whom the Board finds to be dependent upon the member
for at least 50% of his or her support due to lack of financial means.
[2]
The nomination of beneficiary shall be in writing and filed with the Board of Trustees. No beneficiary may be added or changed after system benefits have begun. The nomination of the beneficiary shall be null and void upon the member's retirement or prior termination of City employment. Upon the death of a member covered by this section while in City employment, which member has a valid nomination of beneficiary in force, the beneficiary, if living, shall be paid a retirement allowance computed according to Subsection B(5)(b) hereof. No retirement allowance shall be paid under this section on account of the death of a member if any retirement allowance is paid or will become payable under any other section on account of death.
(b)
Benefits payable. Benefits shall be the sum
of:
[1]
One and zero-tenths times the deceased member's
accumulated contributions as of the date of death; plus
[2]
If the deceased member had at least three years
of credited service at the time of his or her death, the greater of
the following:
[a]
A monthly amount equal to the monthly
benefit payable under workers' compensation if it was payable to the
member while living; or
[b]
One and five-tenths percent times
credited service at the date of death times final average compensation
payable monthly as a life annuity to the surviving beneficiary of
the deceased member.
[3]
If a member were to die with no surviving designated
beneficiary, the member's accumulated contributions shall be paid
to the deceased member's estate.
(6)
Retiree's burial benefit.
(a)
Eligibility. A retiree's burial benefit shall
be paid upon death of a member covered under this section who is receiving
monthly retirement benefits at the time of his or her death.
(b)
Benefits payable. A one-time cash payment of
$2,500 shall be made to such deceased member's spouse, child, stepchild,
parent or stepparent, as the deceased member shall have nominated
by written designation duly executed and filed with the City. If there
be no such designated spouse, child, stepchild, parent or stepparent
surviving the deceased member, the one-time cash payment of $2,500
shall be made to the deceased member's estate.
(7)
Death benefits after termination and prior to benefit
commencement.
(a)
Eligibility. If a member terminates employment with the City and leaves his or her accumulated contributions in the fund and then dies prior to receiving any benefits, a death benefit will be paid on his or her behalf to the member's designated beneficiary [if such a beneficiary has been designated in accordance with the provisions of Subsection B(5) hereof].
(b)
Benefits payable. Upon the death of an eligible
member who dies with a Board-approved beneficiary on record, such
beneficiary may elect either of the following options:
[1]
Lump sum option. A lump sum distribution payable
immediately, in accordance with the following schedule:
|
Years of Credited Service
|
Lump Sum Death Benefit Payable
| |
|---|---|---|
|
Less than 3
|
1.0 times the member's accumulated contributions
| |
|
At least 3, but less than 7
|
1.25 times the member's accumulated contributions
| |
|
7 or more
|
1.50 times the member's accumulated contributions
|
[2]
Deferred option. The benefit that would have been payable to the member under Subsection B(1) hereof [or Subsection B(2) hereof, if it would have been applicable], assuming the member had lived, had continued to be employed by the City until the appropriate age and service requirements had been satisfied and had then retired. The benefits payable under this paragraph are not payable to the eligible beneficiary until the earliest date on which the member would have satisfied the age and service requirements under Subsection B(1) hereof [or Subsection B(2) hereof, if applicable] had he or she lived.
(8)
Other governmental service. Upon the commencement of participation thereunder, a member covered under § 127-48 shall be entitled to credit for his or her full-time service previously rendered as an employee of a Michigan state or local government or governmental entity upon the payment of member contributions into the reserve for employee contributions in an amount equal to 4% of his or her annual compensation multiplied by the years of service being purchased. Such payment shall be accomplished ratably over the member's period of employment equal to the governmental service being purchased and shall be remitted to the reserve for employee contributions. Should membership cease prior to completion of the purchase of all governmental service as provided herein, only that portion of governmental service theretofore purchased shall be creditable. Governmental service is not creditable if it is or would be creditable under any other governmental plan and until the member has been employed by the City in a membership position for a continuous period of three years immediately prior to being credited. In no case shall that portion of a member's accumulated contributions consisting of the purchase amount hereunder together with regular interest thereon be multiplied by more than one when calculating benefits under § 127-48. For the purposes of this paragraph, the term "governmental plan" shall have the meaning set forth in § 414(d) of the Federal Internal Revenue Code of 1986, as amended.
[Amended 12-17-2001 by Ord. No. 01-026; 3-18-2002 by Ord. No. 02-002]
A.
This section applies to distributions made on or after January 1,
1993. Notwithstanding any provision of this article to the contrary
that would otherwise limit a distributee's election under this section,
a distributee may elect, at the time and in the manner prescribed
by the Board, to have any portion of an eligible rollover distribution
paid directly to an eligible retirement plan specified by the distributee
in a direct rollover.
[Amended 10-15-2012 by Ord. No. 12-007]
(1)
DIRECT ROLLOVER
DISTRIBUTEE
ELIGIBLE RETIREMENT PLAN
ELIGIBLE ROLLOVER DISTRIBUTION
Definitions. As used in this section, the following terms shall have
the meanings indicated:
A payment by the plan to the eligible retirement plan specified
by the distributee.
Includes a member or former member. In addition, the member's
or former member's surviving spouse and the member's or former member's
spouse or former spouse who is the alternate payee under a qualified
domestic relations order, as defined in § 414(p) of the
Internal Revenue Code, or an eligible domestic relations order, are
distributees with regard to the interest of the spouse or former spouse.
A distributee also includes an eligible designated nonspouse beneficiary.
An individual retirement account described in § 408(a)
of the Internal Revenue Code, an individual retirement annuity described
in § 408(b) of the Internal Revenue Code, an annuity plan
described in § 403(a) of the Internal Revenue Code, or a
qualified trust described in § 401(a) of the Internal Revenue
Code, that accepts the distributee's eligible rollover distribution.
However, in the case of an eligible rollover distribution to the surviving
spouse, an eligible retirement plan is an individual retirement account
or individual retirement annuity.
Any distribution of all or any portion of the balance to
the credit of the distributee, except that an eligible rollover distribution
does not include any distribution that is one of a series of substantially
equal periodic payments (not less frequently than annually) made for
the life (or life expectancy) of the distributee or the joint lives
(or joint life expectancies) of the distributee and the distributee's
designated beneficiary, or for a specified period of 10 years or more;
any distribution to the extent such distribution is required under
§ 401(a)(9) of the Internal Revenue Code; and the portion
of any distribution that is not includible in gross income (determined
without regard to the exclusion for net unrealized appreciation with
respect to employer securities).
(2)
If a distribution is one to which §§ 401(a)(11) and
417 of the Internal Revenue Code do not apply, such distribution may
commence less than 30 days after the notice required under § 1.411(a)-11(c)
of the income tax regulations is given, provided that:
(a)
The Board clearly informs the member that the member has a right
to a period of at least 30 days after receiving the notice to consider
the decision of whether or not to elect a distribution (and, if applicable,
a particular distribution option); and
(b)
The member, after receiving the notice, affirmatively elects
a distribution.
B.
This subsection shall apply to distributions made
after December 31, 2001.
(1)
For purposes of the direct rollover provisions in
this section, an eligible retirement plan shall also mean an annuity
contract described in § 403(b) of the Internal Revenue Code
and an eligible plan under § 457(b) of the Internal Revenue
Code which is maintained by a state, political subdivision of a state,
or any agency or instrumentality of a state or political subdivision
of a state and which agrees to account separately for amounts transferred
into such plan from this retirement system. The definition of eligible
retirement plan shall also apply in the case of a distribution to
a surviving spouse, or to a spouse or former spouse who is the alternate
payee under a qualified domestic relations order, as defined in § 414(p)
of the Internal Revenue Code, or an eligible domestic relations order
under the Eligible Domestic Relations Order Act.
(2)
For purposes of the direct rollover provisions in
this section, a portion of a distribution shall not fail to be an
eligible rollover distribution merely because the portion consists
of after-tax employee contributions which are not includible in gross
income. However, such portion may be paid only to an individual retirement
account or annuity described in § 408(a) or (b) of the Internal
Revenue Code or to a qualified defined contribution plan described
in § 401(a) or 403(b) of the Internal Revenue Code that
agrees to account separately for amounts so transferred, including
separately accounting for the portion of such distribution which is
includible in gross income and the portion of such distribution which
is not so includible.
[Amended 12-17-2001 by Ord. No. 01-026; 3-15-2021 by Ord. No. 21-001]
A.
Distribution.
(1)
For those who turn 70 1/2 on or before December 31, 2019 (i.e.,
whose birthdate is on or before June 30, 1949): In accordance with
§ 401(a)(9) of the Internal Revenue Code and the regulations
thereunder, which are incorporated herein by reference, a member's
pension shall be distributed to him or her not later than April 1
of the calendar year following the later of:
(2)
For those who turn 70 1/2 after December 31, 2019 (i.e., whose
birthdate is on or after July 1, 1949): In accordance with § 401(a)(9)
of the Internal Revenue Code and the regulations thereunder, which
are incorporated herein by reference, a member's pension shall be
distributed to him or her not later than April 1 of the calendar year
following the later of:
B.
With respect to distributions under this article made for calendar
years beginning on or after January 1, 2001, the minimum distribution
requirements of § 401(a)(9) of the Internal Revenue Code
will be applied in accordance with the regulations under § 401(a)(9)
that were proposed on January 17, 2001, notwithstanding any provision
of this article to the contrary. This amendment shall continue in
effect until the end of the last calendar year beginning before the
effective date of final regulations under § 401(a)(9) or
such other date as may be specified in guidance published by the Internal
Revenue Service.
[Amended 11-21-2005 by Ord. No. 05-012; 7-25-2011 by Ord. No. 11-008; 5-5-2014 by Ord. No. 14-002; 10-15-2012 by Ord. No.
12-007; 3-15-2021 by Ord. No. 21-001]
A.
Effective date. The provisions of this section will apply for purposes
of determining required minimum distributions for calendar years beginning
with the 2003 calendar year.
B.
Precedence. The requirements of this section will take precedence
over any inconsistent provisions of the Retirement System Ordinance.
C.
Requirements of treasury regulations incorporated. All distributions
required under this section will be determined and made in accordance
with the final treasury regulations under § 401(a)(9) of
the Internal Revenue Code.
D.
TEFRA § 242(b)(2) Elections. Notwithstanding the other provisions of this section, other than Subsection C, distributions may be made under a designation made before January 1, 1984, in accordance with § 242(b)(2) of the Tax Equity and Fiscal Responsibility Act (TEFRA) and the provisions of the plan that relate to § 242(b)(2) of TEFRA.
E.
Required beginning date. The member's entire interest will be distributed,
or begin to be distributed, to the member no later than the member's
required beginning date. If distributions have commenced before the
member's death, the remaining interest shall be distributed at least
as rapidly as under the method being used at the date of the member's
death in accordance with IRC § 401(a)(9)(B)(i).
F.
Death of member before distributions begin.
(1)
If the member dies before distributions begin, the member's entire
interest will be distributed, or begin to be distributed, no later
than as follows:
(a)
If the member's surviving spouse is the member's sole designated
beneficiary, distributions to the surviving spouse will begin by December
31 of the calendar year immediately following the calendar year in
which the member died, or by December 31 of the calendar year in which:
[1]
For members who turn (or would have turned) 70 1/2 on or
before December 31, 2019 (i.e., whose birthday is on or before June
30, 1949), the member would have attained age 70 1/2, if later;
or
[2]
For members who turn 70 1/2 after December 31, 2019 (i.e.,
whose birthdate is on or after July 1, 1949): the member would have
attained age 72.
(b)
If the member's surviving spouse is not the member's sole designated
beneficiary, distributions to the designated beneficiary will begin
by December 31 of the calendar year immediately following the calendar
year in which the member died.
(c)
If there is no designated beneficiary as of September 30 of
the year following the year of the member's death, the member's entire
interest will be distributed by December 31 of the calendar year containing
the fifth anniversary of the member's death.
(2)
For purposes of this Subsection F and Subsections M, N, and O, distributions are considered to begin on the member's required beginning date (or, if Subsection F(1)(d) applies, the date distributions are required to begin to the surviving spouse under Subsection F(1)(a). If annuity payments irrevocably commence to the member before the member's required beginning date (or to the member's surviving spouse before the date distributions are required to begin to the surviving spouse under Subsection F(1)(a), the date distributions are considered to begin is the date distributions actually commence.
G.
Form of distribution. Unless the member's interest is distributed in the form of an annuity purchased from an insurance company or in a single sum on or before the required beginning date, as of the first distribution calendar year distributions will be made in accordance with Subsections H through M of this section. If the member's interest is distributed in the form of an annuity purchased from an insurance company, distributions thereunder will be made in accordance with the requirements of § 401(a)(9) of the Code and the treasury regulations. Any part of the member's interest which is in the form of an individual account described in § 414(k) of the Code will be distributed in a manner satisfying the requirements of § 401(a)(9) of the Code and the treasury regulations that apply to individual accounts.
H.
General annuity requirements. If the member's interest is paid in
the form of annuity distributions under the retirement system, payments
under the annuity will satisfy the following requirements:
(1)
The annuity distributions will be paid in periodic payments made
at intervals not longer than one year;
(3)
Once payments have begun over a period certain, the period certain
will not be changed even if the period certain is shorter than the
maximum permitted;
(4)
Payments will either be nonincreasing or increase only as follows:
(a)
By an annual percentage increase that does not exceed the annual
percentage increase in a cost-of-living index that is based on prices
of all items and issued by the Bureau of Labor Statistics;
(b)
To the extent of the reduction in the amount of the member's payments to provide for a survivor benefit upon death, but only if the beneficiary whose life was being used to determine the distribution period described in Subsections K or L dies or is no longer the member's beneficiary pursuant to a qualified domestic relations order within the meaning of § 414(p); to provide cash refunds of employee contributions upon the member's death;
(c)
To pay increased benefits that result from a plan amendment;
(d)
By the increase in compensation for a position held by the employee
at the time of retirement; or
(e)
By the amount of a variable or fixed rate paid directly from
the trust. A fixed rate increase may be provided if the rate of increase
is less than 5%. A variable rate increase, based solely on better
than assumed investment performance, is permitted but only if the
assumed interest rate for calculating the initial level of payments
is at least 3%.
I.
Amount required to be distributed by required beginning date. The amount that must be distributed on or before the member's required beginning date [or, if the member dies before distributions begin, the date distributions are required to begin under Subsection F(1)(a) or (b)] is the payment that is required for one payment interval. The second payment need not be made until the end of the next payment interval even if that payment interval ends in the next calendar year. Payment intervals are the periods for which payments are received, e.g., bimonthly, monthly, semiannually, or annually. All of the member's benefit accruals as of the last day of the first distribution calendar year will be included in the calculation of the amount of the annuity payments for payment intervals ending on or after the member's required beginning date.
J.
Additional accruals after first distribution calendar year. Any additional
benefits accruing to the member in a calendar year after the first
distribution calendar year will be distributed beginning with the
first payment interval ending in the calendar year immediately following
the calendar year in which such amount accrues.
K.
Joint life annuities where the beneficiary is not the member's spouse.
If the member's interest is being distributed in the form of a joint
and survivor annuity for the joint lives of the member and a nonspouse
beneficiary, annuity payments to be made on or after the member's
required beginning date to the designated beneficiary after the member's
death must not at any time exceed the applicable percentage of the
annuity payment for such period that would have been payable to the
member using the table set forth in Q&A-2 of § 1.401(a)(9)-6
of the Treasury regulations. If the form of distribution combines
a joint and survivor annuity for the joint lives of the member and
a nonspouse beneficiary and a period certain annuity, the requirement
in the preceding sentence will apply to annuity payments to be made
to the designated beneficiary after the expiration of the period certain.
L.
Period certain annuities. Unless the member's spouse is the sole designated beneficiary and the form of distribution is a period certain and no life annuity, the period certain for an annuity distribution commencing during the member's lifetime may not exceed the applicable distribution period for the member under the Uniform Lifetime Table set forth in § 1.401(a)(9)-9 of the Treasury regulations for the calendar year that contains the annuity starting date. If the annuity starting date precedes the year in which the member reaches age 70, the applicable distribution period for the member is the distribution period for age 70 under the Uniform Lifetime Table set forth in § 1.401(a)(9)-9 of the Treasury regulations plus the excess of 70 over the age of the member as of the member's birthday in the year that contains the annuity starting date. If the member's spouse is the member's sole designated beneficiary and the form of distribution is a period certain and no life annuity, the period certain may not exceed the longer of the member's applicable distribution period, as determined under this Subsection L, or the joint life and last survivor expectancy of the member and the member's spouse as determined under the Joint and Last Survivor Table set forth in § 1.401(a)(9)-9 of the Treasury regulations, using the member's and spouse's attained ages as of the member's and spouse's birthdays in the calendar year that contains the annuity starting date.
M.
Member survived by designated beneficiary. If the member dies before the date distribution of his or her interest begins and there is a designated beneficiary, the member's entire interest will be distributed, beginning no later than the time described in Subsection F(1)(a) or (b), over the life of the designated beneficiary or over a period certain not exceeding.
(1)
Unless the annuity starting date is before the first distribution
calendar year, the life expectancy of the designated beneficiary determined
using the beneficiary's age as of the beneficiary's birthday in the
calendar year immediately following the calendar year of the member's
death; or
(2)
If the annuity starting date is before the first distribution calendar
year, the life expectancy of the designated beneficiary determined
using the beneficiary's age as of the beneficiary's birthday in the
calendar year that contains the annuity starting date.
N.
No designated beneficiary. If the member dies before the date distributions
begin and there is no designated beneficiary as of September 30 of
the year following the year of the member's death, distribution of
the member's entire interest will be completed by December 31 of the
calendar year containing the fifth anniversary of the member's death.
O.
Death of surviving spouse before distributions to surviving spouse begin. If the member dies before the date distribution of his or her interest begins, the member's surviving spouse is the member's sole designated beneficiary, and the surviving spouse dies before distributions to the surviving spouse begin, this section will apply as if the surviving spouse were the member, except that the time by which distributions must begin will be determined without regard to Subsection F(1)(a).
P.
Payments to children. Payments made to a member's child are treated
as payments to the surviving spouse if they cease after the child
reached the age of majority (or upon the death of the child) and are
payable to the surviving spouse thereafter.
Q.
Designated beneficiary. The individual who is designated as the beneficiary under § 127-6 of the retirement system ordinance and is the designated beneficiary under § 401(a)(9) of the Internal Revenue Code and § 1.401(a)(9)-1, Q&A-4, of the treasury regulations.
R.
Distribution calendar year. A calendar year for which a minimum distribution is required. For distributions beginning before the member's death, the first distribution calendar year is the calendar year immediately preceding the calendar year which contains the member's required beginning date. For distributions beginning after the member's death, the first distribution calendar year is the calendar year in which distributions are required to begin pursuant to Subsection F.
S.
Life expectancy. Life expectancy as computed by use of the single
life table in § 1.401(a)(9)-9 of the Treasury regulations.
U.
2009 waiver of required minimum distribution rules. Notwithstanding the above, a participant or beneficiary who would have been required to receive required minimum distributions for 2009 but for the enactment of Section 401(a)(9)(H) of the Code ("2009 RMDs"), and who would have satisfied that requirement by receiving distributions that are equal to the 2009 RMDs or one or more payments in a series of substantially equal distributions (that include the 2009 RMDs) made at least annually and expected to last for the life (or life expectancy) of the participant, the joint lives (or joint life expectancy) of the participant and the participant's designated beneficiary, or for a period of at least 10 years, will receive those distributions for 2009 unless a participant or beneficiary chooses not to receive such distributions. Such distributions may be treated as an eligible rollover distribution if it otherwise satisfies the requirements of § 127-49.
