As used in this article, the following terms shall have the
meanings indicated:
CODE
The Internal Revenue Code, as amended periodically.
COMPENSATION
Plan members' wages, as defined in Code Section 3401(a),
for a plan year for which the municipality is required to provide
the plan member a written statement under Code Sections 6041(d), 6051(a)(3)
and 6052. Such 415 compensation shall include any elective deferrals
defined in Code Section 402(g)(3) and all amounts contributed or deferred
at the election of the plan members which are not includible in the
gross income of the plan member by reason of either Code Sections
125, 402(e)(3), 402(h)(1)(B), 403(b), 414(h)(2) or 457.
MUNICIPALITY
The political subdivision named at the top of this page.
PLAN
The pension plan specified at the top of this page.
REGULATION(S)
The income tax regulations, as amended periodically.
The limitations and other requirements outlined below are intended
to comply with Code Section 415 and the regulations thereunder, the
terms of which are specifically incorporated herein by reference.
The maximum compensation limit and benefits limitations under the
Code are as follows:
A. The compensation used in calculating a plan member's benefit cannot
exceed the limits of Code Section 401(a)(17), as adjusted for cost-of-living
increases, per Code Section 415(d).
B. General rule. In no event shall the annual retirement benefit payable
to a plan member under this plan, together with retirement benefits
provided under all qualified benefit plans maintained or previously
maintained by the municipality, for any limitation year, which shall
be the calendar year, exceed the maximum benefit permitted, as adjusted
annually per Code Section 415(d), under Code Section 415(b) (including
any applicable grandfathering rules). This plan section shall be applied
in accordance with Code Section 415 and the regulations thereunder.
C. Adjustments of limits.
(1) Where a retirement benefit commences before age 62, the Code Section
415(b)(1)(A) dollar limit shall be reduced in accordance with Code
Section 415(b)(2)(F). This reduction shall not result in a limit that
is less than $75,000 if the benefit begins at or after age 55, or
the actuarial equivalent of $75,000 at age 55 (determined in accordance
with Code Section 415) if the benefit begins before age 55.
(2) Where a retirement benefit commences after age 65, the Code Section
415(b)(1)(A) dollar limit shall be increased as described in Code
Section 415(b)(2)(F).
(3) The maximum benefit limit of Code Section 415(b)(1) shall be applied
to benefits in the form of a straight life annuity (with no ancillary
benefits) without regard to benefits attributed to plan member contributions
and rollover contributions. If the form payable to a plan member is
other than a single life annuity or a Code Section 417(b) qualified
joint and survivor annuity, the plan member's benefit shall not exceed
the actuarial equivalent of the Code Section 415(b)(1) maximum payable
in the form of a single life annuity unless no such adjustment is
required under Code Section 415 and related regulations.
(4) Notwithstanding the other rules of the plan and Code Section 415,
if the plan member has not participated in a defined contribution
plan of the municipality, the plan member's annual retirement benefit
shall not be deemed to exceed the maximum benefit limit if it does
not exceed the Code Section 415(b)(4) limit of $10,000, as adjusted
for plan participation or service of less than 10 years in accordance
with Code Section 415(b)(5).
D. Special limitation for qualified police or firefighters. For any
plan member who is a qualified participant, as defined under Code
Section 415(b)(2)(H), the limitation under Code Section 415(b)(2)(C)
shall not be reduced to an amount less than $50,000 [as adjusted per
Code Section 415(d)] as required by Code Section 415(b)(2)(G).
E. Order of defined benefit plan reductions. If the plan member participates
or participated in any other defined benefit plan of the municipality,
and the plan member's aggregate annual retirement benefit under this
plan and such other plan exceeds the limits permitted under Code Section
415, such plan member's benefit shall be first reduced under this
plan.
Notwithstanding §
33-14, the plan shall recognize any qualified domestic relations order (QDRO) set forth under Code Section 414(p). Any plan member's benefits, rights or elections shall be subject to any rights afforded to the alternate payee by a QDRO. Further, a distribution to an alternate payee is permitted if authorized by a QDRO, even if the plan member involved has not separated from service and has not reached the earliest retirement age under the plan.
No plan member or beneficiary shall have any benefit subject to any type of alienation, anticipation, assignment, charge, encumbrance, pledge, sale or transfer. Further, no benefits shall be subject to or liable for any debts, contracts, engagements, liabilities or torts. The only exceptions to this section are those in §
33-15 above and those referenced in Code Sections 401(a)(13)(C) and (D).
If any portion of a plan benefit is payable to a plan member
or beneficiary at the later of the plan member's 62nd birthday or
his normal retirement age and such benefit remains unpaid solely by
reason that the municipality, after sending a registered letter, to
the last known address, return receipt requested, and after diligent
effort fails to locate the plan member or beneficiary, the actuarial
value of the benefit shall be forfeited and applied towards reducing
plan costs. If, subsequent to the forfeiture, a plan member or beneficiary
is located, the actuarial value of the forfeiture at the time it was
forfeited (no adjustments for gains or losses) shall be restored.
Forfeitures must not be applied to increase the benefits any
municipal employee would otherwise receive under the plan.
In the case of any merger or consolidation with, or transfer
of plan assets or liabilities to any other plan, each plan member
would (if the plan then terminated) receive a benefit immediately
after the merger, consolidation, or transfer which is equal to or
greater than the benefit he would have been entitled to receive immediately
before the merger, consolidation, or transfer (if the plan had then
terminated).
As required by Code Section 401(a)(25), the actuarial assumptions
used to calculate plan benefits shall not be subject to the municipality's
discretion.