[Derived from Adm. Code § A405;
last amended 12-17-2007 by Ord. No. 1835]
The City of Kalamazoo Employees Retirement System
established by authority of § 197 of the Charter and Ordinance
No. 378, as amended, is hereby continued, as amended and restated
effective January 1, 2006. This article may be cited as the "City
of Kalamazoo Employee Retirement System Ordinance." The Retirement
System Ordinance shall be maintained for the exclusive benefit of
members and is intended to qualify as a governmental plan under Sections
401(a) and 414(d) of the Internal Revenue Code of 1986, as amended
from time to time (the "Code"), and with the requirements of any other
applicable law.
The following words and phrases, as used in
this article, unless a different meaning is clearly required by the
context, shall have the following meanings. Words used in the masculine
gender shall be construed as though they were also used in the feminine
or neuter gender where applicable, and words used in the singular
will be construed as though they were also used in the plural, where
applicable.
The sum of all amounts deducted from the compensation of a member, or "picked up" by the City pursuant to § 2-248F, and credited to his or her individual account in the annuity savings fund, together with interest credited to January 1, 1952, and regular interest credited after December 31, 1951.
An annual amount, derived from a member's accumulated contributions,
payable in equal monthly installments throughout the future life of
a person.
The present value of all future payment to be made on account
of any annuity. An annuity reserve shall be computed upon the basis
of such mortality table, and regular interest, as the Board shall
from time to time adopt.
Any person, except a retirant, who is in receipt of, or who
is designated to receive, a pension, retirement allowance or other
benefit payable by the retirement system. Notwithstanding the foregoing,
a member may designate a trust as his or her secondary beneficiary
under the retirement system, and the beneficiaries of the trust with
respect to the trust's interest in the member's benefit under the
retirement system shall be treated as the member's designated beneficiary
for purposes of Code Section 401(a)(9) and Treasury Regulation Section
1.401(a)(9)-4, provided that the terms of Q&A-5 and Q&A-6
of such Treasury Regulation are satisfied.
The Board of Trustees provided in § 2-225.
The City of Kalamazoo.
A member's salary or wages paid him or her by the City for
services rendered by him as an employee of the City. Compensation
shall include any amounts that are contributed by the City pursuant
to a salary reduction agreement and that are not includable in the
member's gross income under Code Section 125, 132(f), 401(k), 403(b)
or 457(b). In case a member's compensation is not all paid in money,
the City Manager shall fix the value of the portion of his or her
compensation that is not paid in money.
Compensation shall not include any sums paid
to a member as worker's compensation or contractual supplements thereto,
unless the following requirements are both fulfilled:
Notwithstanding the above, the following are
to be considered part of compensation, both for purposes of an employee
paying a percentage contribution to the system, and for purposes of
determining final average compensation: overtime (except for Public
Safety members), holiday pay, sick time pay, vacation pay, retroactive
pay, certification bonus, education bonus, standby pay, emergency
leave pay, critical leave pay, funeral leave pay, transit annual leave,
transit annual leave payout (up to 160 hours), night shift premium,
and longevity.
Notwithstanding the above, the following are
not to be considered part of compensation, both for purposes of an
employee paying a percentage contribution to the system, and for purposes
of determining final average compensation: deferred compensation match
by the City, Public Safety overtime, compensation ("comp") time, lump
sum sick time payout, lump sum vacation payout, car stipend, mileage
payment, discretionary bonus, incentive bonus, performance bonus,
food allowance, tool allowance, parking allowance, clothes cleaning
allowance, clothing allowance, insurance waiver, equipment overtime.
[Amended 5-20-2019 by Ord. No. 1986]
Notwithstanding any other provision of the retirement
system to the contrary, for plan years beginning on or after January
1, 1994, but before plan year 2002, the annual compensation of each
member taken into account under the retirement system shall not exceed
the OBRA '93 annual compensation limit. The OBRA '93 annual compensation
limit is $150,000, as adjusted by the Commissioner for increases in
the cost of living in accordance with Code Section 401(a)(17)(B).
If compensation for any prior determination period is taken into account
in determining an employee's benefits accruing in the current plan
year, the compensation for that prior determination period is subject
to the OBRA '93 annual compensation limit in effect for that prior
determination period. For this purpose, for determination periods
beginning before the first day of the first plan year beginning on
or after January 1, 1994, the OBRA '93 annual compensation limit is
$150,000.
The annual compensation of the member taken
into account in determining benefit accruals under the retirement
system in any plan year beginning after December 31, 2001, or such
other consecutive twelve-month period over which Compensation is otherwise
determined under the retirement system (the "determination period")
shall not exceed $200,000, as adjusted by the Commissioner for increases
in the cost of living in accordance with Code Section 401(a)(17)(B).
The cost-of-living adjustment in effect for
a calendar year applies to any period, not exceeding 12 months, over
which compensation is determined (determination period) beginning
in such calendar year. If a determination period consists of fewer
than 12 months, the annual compensation limit will be multiplied by
a fraction, the numerator of which is the number of months in the
determination period, and the denominator of which is 12.
The number of years and fraction thereof standing to a member's
credit, as provided in this article. Effective January 1, 1999, as
to Public Safety members, and effective March 13, 2000, as to KMEA
members, the amount of service time that will be credited to such
a member who is classified and worked as a part-time employee of the
City will be calculated by pro-rating the number of hours worked in
a year against the number of hours regularly scheduled in that year
for a full-time employee in that classification. For example, an employee
who works 30 hours per week in a position where full-time employees
regularly work 40 hours per week will be credited with 00.75 year
of service for that year. For Public Safety members, credited service
as of January 1, 1999, shall be the amount of time which has elapsed
between that date and each individual's seniority date, in addition
to any time purchased pursuant to the split-service provisions set
forth below. When a Public Safety member is absent from work and receiving
sick pay benefits (either the member's or from donated sick leave
time) from which pension contributions are deducted, the period of
time the employee is absent and receiving sick leave benefits will
be counted towards the member's credited service. Public Safety members
on medical leave of absence who are receiving worker's compensation
benefits may have period of such leave counted towards credited service
by electing at the commencement of the leave to make regular pension
contributions while on the leave.
A payment by the retirement system to the eligible retirement
plan specified by the distributee.
An employee or former employee. In addition, the employee's
or former employee's surviving spouse and the employee's or former
employee's spouse or former spouse who is the alternate payee under
a qualified domestic relations order, as defined in Code Section 414(p),
are distributees with regard to the interest of the spouse or former
spouse. Effective January 1, 2007, a distributee further includes
a nonspouse beneficiary who is a designated beneficiary as defined
by Section 401(a)(9)(E) of the Internal Revenue Code. However, a
nonspouse beneficiary may only make a direct rollover to an individual
retirement account or individual retirement annuity established for
the purpose of receiving the distribution, and the account or annuity
will be treated as an "inherited" individual retirement account or
annuity.
[Amended 11-19-2012 by Ord. No. 1905]
Means:
An individual retirement account described in
Code Section 408(a);
An individual retirement annuity described in
Code Section 408(b);
A qualified retirement plan described in Code
Section 401(a) or 403(a);
For distributions made after December 31, 2001,
a tax-sheltered annuity plan described in Code Section 403(b) or an
eligible plan under Code Section 457(b) 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, which agrees to accept
and separately account for amounts transferred into such plan from
this Retirement System; and
For distributions made after December 31, 2007,
a Roth individual retirement account, subject to applicable code requirements.
This definition shall also apply in the case
of a distribution made after December 31, 2001, to a surviving spouse,
or to a spouse or former spouse who is the alternate payee under an
EDRO. Subsection A(1) and (2) contained herein shall apply in the
case of a distribution made after December 31, 2006, to a beneficiary.
Any distribution of all or any portion of the refund of accumulated
contributions paid to a member, a surviving spouse, a spouse or former
spouse who is the alternate payee under an EDRO, or, effective January
1, 2007, a beneficiary, under the retirement system, 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 member or for the joint
lives (or joint life expectancies) of the member and the member's
beneficiary, or for a specified period of 10 years or more;
Any distribution to the extent such distribution
is required under Code Section 401(a)(9);
The portion of any distribution that is not
includible in gross income; and
The portion of any distribution made on or after
January 1, 2002, which is attributable to a hardship distribution
described in Code Section 401(k)(2)(B)(i)(IV).
Any person in the employ of the City whose services are compensated
by the City, including officers of the City.
Any general member who is not a member of a bargaining unit.
The average of the highest annual compensation received by
a member during any period of three consecutive years of his or her
credited service contained within his or her 10 years of credited
service immediately preceding the date his or her employment with
the City last terminated. If the member has fewer than three years
of credited service, his or her final average compensation shall be
the average of the annual rates of compensation for his or her total
period of credited service.
A member's annual rate of compensation at the time his or
her employment with the City last terminated.
Any member except a public safety member.
Any general member who is a City Commission appointee (City
Manager, City Attorney, City Clerk and City Internal Auditor), the
Chief Operating Officer, Deputy City Manager or Assistant City Manager
who is an exempt employee. For purposes of this article, said administrator
will be treated as if a general member except as otherwise noted.
[Added 9-8-2020 by Ord.
No. 2015; amended 1-3-2023 by Ord. No. 2060]
The Investment Committee established in § 2-252.1 et seq.
Any employee who is included in the membership of the retirement
system.
An annual amount, derived from money provided by the City,
payable in equal monthly installments throughout the future life of
a person, or for a temporary period, as provided in this article.
The present value of all future payments to be made on account
of any pension. A pension reserve shall be computed upon the basis
of such mortality and other experience tables, and regular interest,
as the Board shall from time to time adopt.
The calendar year.
Any member who works within the Public Safety Administration
and who is both sworn and exempt. For purposes of this article, said
Administrator will be treated as if a Public Safety member except
as otherwise noted.
Any employee in the Public Safety Department of the City
holding the rank of patrol officer, including probationary patrol
officer, or higher rank; and, in the case of a fire fighter, any employee
in the Fire Department of the City holding the rank of fire fighter,
including probationary fire fighter, or higher rank; and including
any Public Safety officer employed in the Public Safety Department.
The term "Public Safety member" shall mean any person employed by
Public Safety, including probationary members, holding the rank of
sworn officer, but shall not include:
Such rate or rates of interest per annum, compounded annually,
as the City Commission shall from time to time adopt.
Any member who retires with a retirement allowance payable
by the retirement system.
A member's severance from the employ of the City with a retirement
allowance payable by the retirement system.
The sum or the annuity and pension payable to a retirant
or beneficiary. In determining a retirant's or beneficiary's retirement
allowance, the retirement system shall apply the actuarial assumptions
that are set forth in Appendix A,[1] which is attached hereto.
The City of Kalamazoo Employees Retirement System.
Personal service rendered to the City by an employee of the City. Service shall include time off work due to a disability which, if permanent, would qualify the individual for a duty disability retirement allowance under § 2-243B.
All assets possessed by the retirement system, including those attributed to the pension reserve fund, the retirement reserve fund, the annuity savings fund and the income fund, all property and rights purchased with such amounts, and all income attributable to such amounts, property or rights. Any forfeitures shall be included in the trust fund and shall not be applied to increase the benefits any member would otherwise receive under the retirement system. The trust fund shall be held and invested in accordance with § 2-252.1.
The Uniformed Services Employment and Reemployment Rights
Act of 1994, as amended from time to time.
[Amended 6-29-2009 by Ord. No. 1855; 10-4-2010 by Ord. No. 1874; 5-7-2018 by Ord. No. 1963]
For a general member, shall be age 55 years, provided he or she has 15 or more years of credited service. For each year past age 55, the required number of years of credited service shall be reduced by one year. This shall be considered a reduced benefit as outlined in § 2-237B until:
[Amended 5-20-2019 by Ord. No. 1986; 9-8-2020 by Ord. No. 2015]
For NBU members, the employee reaches the age of 62 and has
five years of credited service;
For KMEA members hired prior to January 1, 2009, the employee
reaches the age of 62 and has eight years of credited service;
For KMEA members hired on or after January 1, 2009, the employee
reaches the age of 62 and has 10 years of credited service;
For AFSCME members hired prior to October 3, 2016, the employee
reaches the age of 62 and has nine years of credited service;
For AFSCME members hired after October 2, 2016, the employee
reaches the age of 62 and has 10 years of credited service;
Beginning January 1, 1984, "voluntary retirement age" for a
Public Safety member shall be after 25 years of credited service,
or age 50 with 10 years of credited service, whichever occurs first.
Subject to the maximum benefits provisions set forth below,
any member who continues in the employ of the City beyond his or her
voluntary retirement age shall continue to accrue benefits under the
retirement system; provided, however, that in the event that the City
reemploys any member who has retired after reaching his or her voluntary
retirement age and has commenced receiving a retirement allowance,
such reemployment shall not cause said retirement allowance to be
increased or altered in any way, nor shall such reemployment create
for such member any accrual of any additional benefits under the retirement
system.
Subject to the terms of § 2-237, the amount of the retirement allowance to which a member may be entitled upon his or her voluntary retirement may be reduced.
The period a member is in receipt of weekly worker's compensation
on account of a member's disability or death arising out of and in
the course of the member's employment. If a member is paid a single
sum in lieu of future worker's compensation, the worker's compensation
period shall be the period, if any, the member was in receipt of weekly
worker's compensation, plus the period arrived at by dividing the
single sum by the member's weekly worker's compensation award.
[1]
Editor's Note: Appendix A is included at the end of this chapter.
A.
The power to administer, manage and operate the retirement system, and to construe and make effective the provisions of this article, the plan, applicable state and federal statutes, provisions of the City Commission-approved collective bargaining agreements and employment agreements, and provisions of employment agreements authorized by the City Manager that expressly relate to the retirement system, is vested in a Board of Trustees, subject to such powers as are retained by the City Commission, or placed in the Investment Committee pursuant to § 2-252.1 et seq. Employment agreements authorized by the City Manager, as that phrase is used in this subsection, shall apply only to employment agreements for the positions of Deputy and Assistant City Manager, shall be limited to provisions regarding eligibility for an unreduced pension, and shall be available only to an employee in those positions whose years of service as a City employee, when combined with the employee's age, total at least 70 at the time the employment agreement is executed. The City Manager shall have the authority granted by this subsection until June 1, 2009.
B.
The Board of Trustees shall consist of five trustees,
as follows:
(1)
A City Commissioner to be selected by the Commission
to serve at the pleasure of the Commission.
(2)
The City Manager.
(3)
A citizen who is not a member, retiree, or beneficiary
of the retirement system, and holds no other City position, to be
appointed by the City Commission.
(4)
A Public Safety member to be elected by the Public
Safety members.
(5)
A general member to be elected by the general members.
C.
The elections of the Public Safety member trustee
and the general member trustee shall be held under such rules and
regulations as the Board shall from time to time adopt.
D.
The term of office of the appointed citizen trustee,
the Public Safety member trustee and the general member trustee shall
be three years, one such term to expire annually.
E.
Each trustee shall, before assuming the duties of
trustee, qualify by taking an oath of office to be administered by
the City Clerk. The trustee shall serve without additional compensation
for his or her services as trustee.
F.
In the event a trustee, except the appointed citizen
trustee, ceases to be employed by the City, or if any trustee fails
to attend three consecutive regularly scheduled meetings of the Board,
unless in each case excused for cause by the remaining trustees, his
or her office of trustee shall be deemed to be vacated. If a vacancy
occurs in the office of trustee, the vacancy shall be filled, within
60 days from and after the date the vacancy occurred, for the unexpired
portion of the term in the same manner as the office was previously
filled. The City Commission from time to time may appoint a person
to temporarily replace a trustee on an interim basis for reasons such
as medical emergency or other need, and the person filling such a
position on an interim basis shall serve on the Board of Trustees
until the person who is on leave of absence is able to return to duties
as a member of the Board of Trustees. The term of office of the interim
trustee shall coincide with the term of office of the trustee temporarily
replaced, and in no event shall the interim trustee serve in excess
of 90 days from and after the date the City Commission appoints such
interim trustee, unless the City Commission extends the term of such
interim trustee beyond 90 days.
G.
The Board shall hold meetings regularly, at least
quarterly, and shall designate the time and place thereof. Three trustees
shall constitute a quorum at any meeting of the Board. Each trustee
shall be entitled to one vote on each question before the Board, and
at least three concurring votes shall be necessary for a decision
by the Board at any of its meetings. The Board shall adopt its own
rules of procedure and shall keep a record of its proceedings. All
meetings of the Board shall be public.
A.
The Board of Trustees shall elect from its own number
a chairperson and chairperson pro tem.
B.
The Finance Director shall serve as secretary to the
Board and shall be the administrative officer of the retirement system.
C.
The City Treasurer, or his or her designee, shall
be treasurer of the retirement system and the custodian of its assets.
D.
The City Attorney shall be the legal advisor to the
Board.
E.
The Board shall appoint as medical director a physician
who is not eligible to membership in the retirement system. He or
she shall be directly responsible to and shall hold office at the
pleasure of the Board. He or she shall arrange for and pass upon all
medical examinations required under this article; he or she shall
investigate all essential statements and certificates of a medical
nature furnished by or on behalf of a member, retirant or beneficiary
in connection with a claim for disability or death in line of duty
benefits; and he or she shall report in writing to the Board his or
her conclusions on medical matters referred to him or her by the Board.
F.
The compensation for services required for the proper
operation of the retirement system shall be fixed by the Board subject
to the approval of the City Commission.
G.
The Board shall recommend, jointly with the Investment
Committee, the actuary for the system to the City Commission for its
approval.
A.
The membership of the retirement system shall include all persons who are in the employ of the City and all persons who become employed by the City except as provided in Subsection B of this section.
B.
The membership of the retirement system shall not
include:
(1)
Any person whose services to the City are compensated
on a fee or contractual basis; nor
(2)
Any person employed to direct traffic at schools;
nor
(3)
Any person, other than a person who is a member of
the KMEA, who becomes employed by the City after June 30, 1967, in
a position normally requiring less than 1,040 hours of work in a calendar
year; nor
(4)
The medical director and the actuary; nor
(6)
The City Manager or other City Commission appointee,
if he or she exempts himself or herself from membership in the system.
His or her past contributions, together with accrued interest, would
then be paid into the program established by the International City
Management Association Retirement Corporation instead of being paid
to or held by the City of Kalamazoo Employees Retirement System. No
contribution on behalf of the City Manager or other appointee who
makes such choice shall thereafter be made to the retirement system.
Neither he nor she nor any person claiming on his or her behalf or
account shall have any right, title, benefit or interest in said system
or the funds thereof. The system shall owe no duty to such person
or persons; nor
(7)
Effective on and after January 1, 1999, the district
court staff and judges of the 9th District Court, unless such person,
prior to that date elected to have his or her contributions remain
in the system.
C.
In any case of doubt as to the membership status of
any person, the Board shall decide the question.
A.
Except as otherwise provided in this article, members
who leave the employ of the City for any reason except retirement
or death shall thereupon cease to be members and their credited service
at that time shall be forfeited. In the event of reemployment by the
City, such individuals shall again become members. Such employees
shall have the option of having their credited service restored in
full, provided they return to the annuity savings fund the amount,
if any, withdrawn therefrom, together with regular interest from the
date of withdrawal to the date of repayment.
B.
In the event any member, or part-time employee who,
full-time, would be a member, leaves the employment of the City to
provide data processing services to the City, and said member or employee
returns to City employment immediately upon leaving the employment
of said private entity, and he or she has again become a member pursuant
to the subsection above, he or she may also receive credited service
for the time spent with said private entity as long as his or her
employment with said private entity has been full-time and continuous
since leaving the employment of the City, and he or she pays to the
retirement system the contributions he or she would have made had
he or she remained or been a member of the system, based on the actual
salary received from the private entity during this time period.
C.
Said payments shall commence within one year of reemployment
and shall be completed within a five-year period from the date of
rehiring. If repayment is not completed within the five-year period,
any amounts paid are to be refunded, and credit for pension benefits
will be computed from the most current date of employment. Current
employees shall have one year from the effective date of this section,
as amended, to start repayment, and completion shall be within the
five-year time limit. Upon a member's retirement or death, he shall
thereupon cease to be a member.
D.
However, a person retired from the system may "buy
back" prior service credits to increase his or her pension:
(1)
When the retirant would have been eligible to buy
back prior service time credit(s), if the retirant were an active
(contributing, nonretired) member of the system; and
(2)
When such credit(s) was(were) not available for buy
back prior to the date of his or her retirement; and
(3)
When election, payment and completion shall be as
follows:
(a)
Said retirant shall elect to buy back such prior
service credit(s) within one year of the date the retirant is or becomes
eligible to buy back such time credit(s);
(4)
Applications for repurchase of prior City service
credit(s) shall be made within one year from the date on which the
retirant first becomes eligible to exercise the option to "buy back"
prior City service credit(s);
(5)
From the date on which the retirant's application
to repurchase prior City service is approved by the Board, the retirant
will have one additional year to actually repurchase such prior service
by lump sum repayment, unless an extended period is approved by the
Board;
(6)
An increased pension will not be put into effect for
any retirant until the repayment of previously refunded employee pension
contributions, and regular interest, is complete.
A.
The service rendered by a member shall be credited
him or her by the Board in accordance with such rules and regulations
as the Board shall from time to time adopt, consistent with the provisions
of this article. In no case shall fewer than 10 days of service rendered
by a member in any calendar month be credited him or her as a month
of service, nor shall fewer than nine months of service rendered by
him or her in any calendar year be credited as a year of service,
nor shall more than one year of service be credited any member for
all service rendered by him or her in any calendar year.
B.
In the event a member withdrew his or her contributions from the retirement annuity and pension fund of the retirement system established by Ordinance No. 188, or his or her accumulated contributions from the annuity savings fund of the retirement system provided for in this article, and has not returned same to the applicable fund, he or she shall not be credited with service rendered prior to the date he or she last withdrew his or her contributions or accumulated contributions until he or she returns to the annuity savings fund, together with regular interest from the date of withdrawal to the date of repayment, as provided in § 2-228 of this article.
A.
In the event a member has rendered service both as
a general member and as a Public Safety member, the age and service
requirements applicable to that member at the time of retirement shall
be determined by the age and service requirements of the unit from
which the member is retiring. The member's total service shall be
used to determine whether or not the member meets the age and service
requirements of the unit from which he is retiring.
B.
For purposes of computing the retirement allowance of a member who has rendered service in both of the above units, § 2-236 shall apply only to the member's actual service as a Public Safety member; and § 2-237 shall apply only to the member's actual service as a general member. The retirement allowance shall be the sum of the two separate computations. The computations for each unit shall be based on the member's actual final average compensation.
C.
Notwithstanding the above, a member employed by Public
Safety who is a member of the Kalamazoo Police Officers' Association
prior to 1999 may elect to convert his or her prior non-Public Safety
time into Public Safety time (for purposes of credited service) so
long as he or she first pays the difference between the contribution
rate that was paid and the contribution rate that would have been
paid had the non-Public Safety time actually been for Public Safety.
A.
In the event any member, while employed by the City,
was called to or entered any armed service of the United States and
has been or shall be on active duty in such armed service, said member
shall have such armed service actually required credited as City service;
provided that:
(1)
He or she is reemployed by the City within one year
from and after the date of termination of such armed service actually
required of him or her.
(2)
He or she returns to the annuity savings fund the
amount he or she might have withdrawn therefrom at the time he or
she entered or while in such armed service together with regular interest
from the date of withdrawal to the date of repayment. Said payments
shall commence within one year of reemployment and shall be completed
within five years from the date of rehiring. If repayment is not completed
within the five-year period, any amounts paid are to be refunded,
and credit for pension benefits will be computed from the most current
date of employment.
(3)
In no case shall more than six years of City service
be credited for all such armed service rendered by said member. In
any case of doubt as to the period to be so credited any member, the
Board shall have the final power to determine such period. During
the period of such armed service and until reemployment by the City,
said member's contributions to the retirement system shall be suspended;
and any balance standing to his or her credit in the annuity savings
fund shall be accumulated at regular interest.
B.
In the event any member, prior to being employed by
the City, was called to or entered any armed service of the United
States and who has been on active duty in such armed service, said
member may have his or her service credit increased for not more than
three years' active military service; provided that:
(1)
The member pays to the retirement system a percent of the member's annual rate of pay in effect at the time the member applies for this option, multiplied by the years, or fraction thereof, of service that the member elects to purchase pursuant to this section. The percent to be used in said calculation shall be the same as the percent in effect used to determine that member's contribution to the annuity fund, as described in § 2-248 and elsewhere.
(2)
Time of payment. Said payment shall commence within
one year from the date of hire and shall be completed within five
years. If payment is not completed within the five-year period, any
amounts paid are to be refunded, and no credit for military service
pension benefits will be given.
(3)
The fact that payment is made into the retirement system during a given year for the purposes of Subsection B(1) above shall have no effect in determining final average compensation.
(4)
In the event any member making payments under Subsection B(1) above should retire or die prior to making the full payments required, the member or member's beneficiary under the pension ordinance shall have the option of either making a lump-sum payment in full prior to receiving any pension benefits in order to obtain the additional benefits under this section, or receiving military service credit prorated based upon the amount of payments made until death or retirement.
(5)
At any time prior to retirement, a member may withdraw
all or part of his or her military service credit payments from the
retirement system. If a member makes such a withdrawal, the military
service credit will be reduced pro rata, based upon the amount of
payments withdrawn.
C.
Active duty shall include all service and training
while on active duty but shall not include National Guard or Reserve
monthly or annual training.
D.
Current employees must commence payment no later than
January 2, 1987, to obtain credit for military service under this
section of the Kalamazoo City Code. However, the preceding sentence
shall not apply to any military service covered by USERRA. Payment
shall be completed within five years of commencement of payment.
E.
In no event shall credit be given for a period of
active duty if the member otherwise receives credit for that period
as City service.
F.
Effective December 12, 1994, the provisions herein
shall be interpreted and applied as required by USERRA in accordance
with Code Section 414(u) and the regulations and other guidance thereunder.
G.
Effective with respect to deaths occurring on or after January 1, 2007, while a member is performing qualified military service (as defined in Chapter 43 of Title 38, United States Code), to the extent required by Section 401(a)(37) of the Internal Revenue Code, survivors of a member in a state or local retirement or pension system are entitled to any additional benefits that the system would provide if the member had resumed employment and then died, such as accelerated vesting or survivor benefits that are contingent on the member's death while employed. In any event, a deceased member's period of qualified military service must be counted for vesting purposes. Beginning January 1, 2009, to the extent required by Section 414(u)(12) of the Internal Revenue Code, an individual receiving differential wage payments (as defined under Section 3401(h)(2) of the Internal Revenue Code) from an employer shall be treated as employed by that employer, and the differential wage payment shall be treated as compensation for purposes of applying the limits on annual additions under Section 415(c) of the Internal Revenue Code. This provision shall be applied to all similarly situated individuals in a reasonably equivalent manner.
[Added 11-19-2012 by Ord.
No. 1905]
[Amended 9-8-2020 by Ord. No. 2015]
A.
A public safety member who, on or after January 1, 1999, is absent
from work for an entire pay period during which no pay from the City
is paid from which pension contributions are deducted may buy back
all or a portion of said time so that it becomes credited service.
In the absence of said buyback, said time shall not become credited
service. If the member elects to buy back such time, the amount to
be paid by the member shall be equal to that which the member would
have had deducted from his or her pay had he or she been receiving
pay. Said payment shall commence within one year of the member's return
and shall be completed within five years of said return. If repayment
for the amount of time sought to be credited is not fully paid within
said five years, the amount paid shall be refunded, and no credited
service shall be given.
B.
Members with a reduction of hours in 2020 due to the City's participation
in the State of Michigan work share program have the option of making
up their contribution based on regular wages of 80 hours per pay period
if the period of the City's participation in the State of Michigan
work share program occurred within the last three years of the member's
employment with the City. This contribution will be calculated based
on the member's normal contribution percentage multiplied by 80 then
reduced by contributions made for the period. Final average compensation
for members electing this option will include this time period to
be calculated using full normal wages based on 80 hours per pay period.
This election and related payment must be made prior to retirement
effective date.
The Board shall credit each member's service
account with the number of years and months of service to which he
or she is entitled.
A.
Any member who has attained or attains his or her
voluntary retirement age may retire upon his or her written application
filed with the Board setting at what time, not less than 30 days nor
more than 90 days subsequent to the execution and filing thereof,
he or she desires to be retired.
A.
Effective January 1, 2003, upon the retirement of a Public Safety member who has 25 years or more of credited service or who is at least 50 years of age with 10 years of credited service, a voluntary retirement benefit shall be provided which shall consist of a straight life retirement allowance (or the comparable option as provided in § 2-240 in lieu of said straight life retirement allowance) consisting of an annuity which shall be the actuarial equivalent of the member's accumulated contributions and a pension which, when added to the annuity, will provide a straight life retirement allowance equal to the sum of 2.7% times final average compensation times years and fraction thereof of credited service with a maximum benefit equal to 70.2% of final average compensation. For those Public Safety members who are less than 50 years old with at least 20 years but fewer than 25 years of credited service, the retirement allowance shall be based upon 2% of final average compensation times years of service. Those Public Safety members whose employment ends after they are vested but prior to achieving 20 years of credited service may receive a retirement allowance based upon a two-percent multiplier; such allowance shall be deferred and shall not be payable until such time as the member qualifies for a voluntary retirement benefit had he or she remained employed as a Public Safety member.
B.
Effective January 1, 1995, a post-retirement adjustment
of 2% in January of each year, compounded annually, shall be provided
for those Public Safety members who retire on or after January 1,
1995. Said adjustment shall be implemented the first January following
actual retirement date but will be available only to those Public
Safety members who retire with at least 25 years of credited service.
C.
Upon the death of a Public Safety retirant who retired
after June 30, 1972, and elected to receive his or her retirement
allowance as a straight life retirement allowance, his or her surviving
spouse, to whom he or she was married at both the date of his or her
retirement and the date of his or her death, shall receive a retirement
allowance equal to one-half of the retirant's straight life retirement
allowance. A spouse's retirement allowance shall terminate upon the
spouse's remarriage or death.
[Amended 12-18-2017 by Ord. No. 1952; 9-8-2020 by Ord. No. 2015]
A.
Upon his or her retirement as provided in this article, a general member shall receive a straight life retirement allowance, and he or she shall have the right to elect to receive his or her retirement allowance under an option provided in § 2-240 in lieu of a straight life retirement allowance. His or her straight life retirement allowance shall consist of the following benefits:
[Amended 1-2-2024 by Ord.
No. 2080]
(1)
An annuity which shall be the actuarial equivalent of his or her
accumulated contributions standing to his or her credit in the annuity
savings fund at the time of his or her retirement; and
(2)
A pension that, when added to his or her annuity, will provide a
straight life retirement allowance equal to the number of years and
fraction of a year of his or her credited service multiplied by the
percents set forth below of his or her final average compensation:
(a)
For a general member represented by the Kalamazoo Municipal Employees
Association who retires in 2006, the multiplier shall be 1.9% of his
or her final average compensation, but on or after January 1, 2007,
the multiplier shall be 2% of his or her final average compensation;
on or after January 1, 2008, the multiplier shall be 2.1% of his or
her final average compensation; further, a post-retirement adjustment
of 1.5%, compounded annually, shall be provided to those KMEA members
who retire on or after March 13, 2000, so long as said retirant has
been retired for one year (if he or she retires at or after age 63)
or upon the retirant's 64th birthday (if he or she retires prior to
age 63); said post-retirement adjustment shall not apply to deferred
retirements. Effective January 1, 2002, the PRA described above shall
increase from 1.5% to 2.0% when the retiree reaches the age of 75.
(b)
For an exempt employee who retires on or after January 1, 1999, the
multiplier shall be 2.3% of his or her final average compensation.
Retirements on or after January 15, 2024, shall receive a post-retirement
adjustment of 2% in January of each year, which is compounded annually;
an exempt employee shall not be eligible for a post-retirement adjustment
of 2% if he or she takes a deferred retirement. A general member administrator
who retires on or after October 1, 2020, shall be entitled to a 2.7%
multiplier of their final average compensation and shall receive a
post-retirement adjustment of 2% in January of each year, which is
compounded annually; a general member administrator shall not be eligible
for a post-retirement adjustment of 2% if he or she takes a deferred
retirement. For both exempt and general member administrators, said
adjustment will be implemented for the first January following the
actual retirement date.
(c)
For a member represented by AFSCME who retires on or after October
2, 2005, the multiplier shall be 1.9% of his or her final average
compensation, but if on or after October 2, 2006, the multiplier shall
be 2% of his or her final average compensation, but if on or after
October 2, 2007, the multiplier shall be 2.1% of his or her final
average compensation; further, a post-retirement allowance of 1%,
commencing one year after the member's date of retirement and compounded
annually thereafter, shall be provided to those AFSCME members who
retire on or after March 1, 2000; after the retirant reaches age 75,
said annual adjustment shall be 2%, compounded annually. The retirement
adjustment shall not, however, apply to those who retire pursuant
to a deferred and/or a reduced retirement;
(d)
For a member represented by the ATU, the multiplier shall be 2.1%
of his or her final average compensation; further, a post-retirement
allowance of 1%, commencing one year after the member's date of retirement
and compounded annually thereafter, shall be provided to those ATU
members who retire on or after March 1, 2000; after the retirant reaches
age 75, said annual adjustment shall be 2%, compounded annually. The
retirement adjustment shall not, however, apply to those who retire
pursuant to a deferred retirement; and
(e)
For a member employed in a civilian, nonsworn capacity at the Kalamazoo
Department of Public Safety, and who is in a bargaining unit represented
by the Kalamazoo Police Officers Association, who retires in 2006,
the multiplier shall be 1.7%, but on and after January 1, 2007, the
multiplier shall be 2.1%. For retirements after January 1, 2022, they
shall receive a post-retirement adjustment of 1.5% in January of each
year, which is compounded annually. The post-retirement adjustment
shall increase from 1.5% to 2.0% when the retiree reaches the age
of 75; an exempt employee shall not be eligible for a post-retirement
adjustment of 2% if he or she takes a deferred or reduced retirement.
Said adjustment will be implemented for the first January following
the actual retirement date.
B.
Except as provided in Subsection C below, in the event a general member who has fewer than 25 years of credited service retires before his or her attainment of the age of 62, the pension portion of his or her retirement allowance provided in Subsection A of this section shall be reduced 0.4% multiplied by the number of months and fraction of a month contained in the period from the date of his or her retirement to the date he or she would attain the age of 62. In the event a general member who has 25 or more years of credited service retires on or after January 1, 1974, and before his or her attainment of the age of 57, the pension portion of his or her retirement allowance provided in Subsection A of this section shall be reduced 0.4% multiplied by the number of months and fraction of a month contained in the period from the date of his or her retirement to the date he or she would have attained the age of 57.
C.
The pension of a general member represented by AFSCME who retires on or after October 1, 1990, shall not be subject to reduction under Subsection B if the member at the time of retirement is at least 60 years of age and has at least 20 years of credited service in a position or positions represented by AFSCME.
E.
The retirement allowance received by an exempt member who retires on or after June 1, 2006, shall be increased by 1.5% post-retirement allowance, compounded annually, commencing January 1 after the member has been retired for one full year, and on every January 1 thereafter; this increase shall be available, however, only to those members whose retirement allowance has not been, nor will be, deferred and who execute and submit, no later than May 30, 2006, the required form in which the member agrees to have his or her contribution to the annuity fund increased, for the balance of the member's employment with the City, by 2%, above and beyond that otherwise required by § 2-248, including as it may be amended from time to time.
[Added 10-31-2011 by Ord. No. 1886]
A.
For the purpose of this section, "eligible members" is defined as
being those members:
(1)
Who by December 31, 2015, would either:
(2)
Who, before 5:00 p.m. January 3, 2012, declare an irrevocable
intent to retire no later than January 2, 2014, pursuant to this section
by signing the enhanced retirement election form and waiver of claims
form to be created hereafter by the Human Resources Department.
B.
Eligible members shall receive the following:
(1)
A retirement allowance, the calculation for which shall assume
credited service through December 31, 2015; if, however, the City
determines that the last day of work for an eligible member who elects
to participate is to be after December 31, 2012, the calculation shall
assume credited service three years after that member's last day of
work;
(2)
A one-time retirement system lump sum payment equal to 1% of the member's final average compensation times his or her credited service (as such is determined by Subsection B(1) immediately above); and
(3)
Payment, at the time of retirement, of any sums due to the member
by virtue of existing collective bargaining agreements and/or existing
City policy for accrued vacation and/or sick time, accrued as of the
last day of work; in the case of Amalgamated Transit Union members,
any sums due to a member by virtue of existing collective bargaining
agreements for accrued leave time accrued as of the last day of work.
C.
The City shall determine the last day of work for each eligible member
who elects to participate, which shall be no later than January 2,
2014.
According to such rules and regulations as the Board shall from time to time adopt, a general member who retires prior to his or her attainment of age 62 years may elect to have his or her straight life retirement allowance actuarially equated to provide an increased retirement allowance payable to his or her attainment of age 62 years and a reduced retirement allowance payable thereafter. His or her increased retirement allowance payable to his or her attainment of age 62 years shall approximate the sum of his or her estimated social security primary insurance amount. This section shall not apply to a member who elects Option A, B or C provided in § 2-240, or who retires under § 2-242.
A.
In the event a Public Safety member who has 10 or more years of credited service leaves the employ of the City prior to his or her voluntary retirement age, for any reason except his or her retirement or death, he or she shall be entitled to a retirement allowance provided for in § 2-236A. In the event a general member has acquired the minimum number of years of credited service to satisfy the voluntary retirement age requirement and leaves the employ of the City prior to his or her voluntary retirement age, for any reason except his or her retirement or death, he or she shall be entitled to a retirement allowance provided for in § 2-237. In either case, his or her retirement allowance shall be computed according to § 2-236 or 2-237, as applicable, as the section was in effect at the time the member left City employment. The member's retirement allowance shall begin the first day of the calendar month next following the date his or her application for same is filed with the Board on or after his or her attainment of age 60 years if a general member, 55 years if a general member with 15 years of service, or 50 years if a Public Safety member; provided, however, effective January 1, 1984, any Public Safety member shall be eligible after 25 years of credited service or age 50 with 10 years of credited service, whichever occurs first. If he or she withdraws his or her accumulated contributions, he or she shall thereupon forfeit his or her right to a deferred retirement allowance. A member shall also forfeit his or her right to a deferred retirement allowance if said member dies before filing said application or, if such an application is filed, before the date designated as his or her retirement date. In the event of such a death, the member's accumulated contributions shall be paid to his or her beneficiary or estate. Except as otherwise provided in this article, the member shall not be given service credit for the period or his or her absence from City employment.
[Amended 10-4-2010 by Ord. No. 1874]
B.
Should any member, with five or more years of credited service, who has not qualified for a deferred retirement allowance provided in Subsection A of this section, be transferred by the City to the payroll of the State of Michigan or any of its political subdivisions, service rendered by him or her in the employ of the state or any of its political subdivisions subsequent to his or her transfer shall be regarded as City service for the sole and exclusive purpose only of qualifying for a deferred retirement allowance provided in Subsection A of this section and in determining final average compensation. The member's retirement allowance shall be computed according to § 2-236 or 2-237, as applicable at the time of his or her last termination of membership, based upon his or her credited service rendered in the employ of the City. The member's retirement allowance shall begin 30 days after the date his or her application for same is filed with the Board on or after the date he or she leaves the employ of the state or any of its political subdivisions to whose payroll he or she was transferred, or attains age 60 years, whichever is later. In the event the member withdraws his or her accumulated contributions, he or she shall thereupon forfeit his or her entitlement to a retirement allowance provided in this subsection. If the member withdrew his or her accumulated contributions prior to February 1, 1958, he or she shall have the right to repay the amount withdrawn, together with regular interest from the date of withdrawal to the date of repayment, subject to the approval of the Board.
C.
Any deferred retirement allowance payable hereunder shall satisfy the minimum distribution requirements set forth in § 2-240C.
D.
Election to enter DROP.
[Added 4-2-2018 by Ord.
No. 1959]
(1)
Effective April 12, 2018, a Public Safety Administrator who meets the relevant provisions for an unreduced retirement allowance under Subsection A or B of this section, and who is authorized by the City Manager, with the approval of the City Commission, to participate in this deferred retirement option plan ("DROP"), may elect to enter the DROP.
(2)
A member who elects to enter the DROP must irrevocably agree to the
following:
(a)
The member will remain in active service with the City until
his or her specified DROP retirement date.
(b)
While in DROP, the member will not make the required member
contributions to the plan.
(c)
The member must elect a DROP retirement date not less than 12
months and not more than 96 months after the member's DROP entry date.
(d)
The member may make an election to enter DROP only once in the
member's lifetime.
(e)
The member may not remain in DROP after the date the member
reaches any mandatory retirement age that may apply to the member.
E.
Termination of employment; determination of benefit.
[Added 4-2-2018 by Ord.
No. 1959]
(2)
Upon termination of employment, including, but not limited to, early
DROP termination with cause, early DROP termination without cause,
or disability, a member will receive the following retirement benefit:
(a)
The member's DROP account benefit, which is the member's DROP
account balance composed of a) an amount equal to 100% of the monthly
retirement allowance the member would have received if he or she had
retired as of the date of entry into the DROP and any applicable post-retirement
allowance, and b) an annual two-percent interest credit; plus
(b)
The member's monthly retirement benefit, based on the basic
monthly retirement benefit, computed as of the date of entry into
the DROP.
(3)
A member who enters DROP shall be fully vested at all times in the
member's DROP account balance.
F.
Exit from plan.
[Added 4-2-2018 by Ord.
No. 1959]
(1)
A member who enters the DROP established by this § 2-239 shall exit the DROP at the earliest of:
(2)
Upon the member's DROP exit for any reason, the member shall not
be entitled to receive additional compensation for any unused holiday
pay, sick time pay, or vacation pay accrued while in the DROP.
G.
If a member dies prior to the member's DROP exit, the member's beneficiary shall be entitled to the member's DROP account benefit as of the date of the member's death. This lump sum benefit shall be in addition to any benefit provided under §§ 2-241 and 2-244 of the Kalamazoo City Code.
[Added 4-2-2018 by Ord.
No. 1959]
[Added 1-3-2023 by Ord.
No. 2059]
A.
KPSOA and KPSA Public Safety members who obtain 25 years or more of credited service under § 2-236 on or after May 1, 2022, through December 31, 2026, may elect to participate in a deferred retirement option plan (DROP). Once the employee elects to participate in the DROP program, the employee's participation in the DROP program is irrevocable if they are accepted by the City to be a DROP participant. The employee is solely responsible for any federal, state, or local tax due because of their participation in the DROP. Participation in the DROP is not guaranteed. A participant must be in good standing with the City and the City may consider staffing level needs and the employee's disciplinary and performance review histories in determining whether to accept the employee into the DROP program. A participant must indicate on the application for participation in the DROP program the number of whole years that the employee wants to participate in the DROP, up to a maximum of three years. As a condition of participation, the employee agrees to retire at the conclusion of their participation in the DROP program. A participant who has elected to participate for one or two years may request, which is not required to be granted by the City, an extension in whole years at least 90 days' prior to the employee's anticipated DROP end date. Example: A participant who completes their first year on February 28, 2023, must request an extension by November 30, 2022. Participation in the DROP does not guarantee the employee continued employment with the City. Except as otherwise provided in this section, an employee who is accepted to participate in the DROP will remain an active City employee but is only eligible to receive any applicable wage changes and benefits provided in the collective bargaining agreement for the employee in effect at the time the employee becomes a DROP participant and will be subject to the policies and procedures of the City of Kalamazoo and the Department of Public Safety in the same manner as if they had not elected to participate in the DROP program. The amount of credited service, multiplier, and final average compensation of a DROP participant will be determined and fixed at the date of the employee's entry into the DROP program. Any increase in benefits and the additional years of employment service with the City due to DROP participation will not be factored into the employee's pension benefit once the employee begins to receive DROP program benefits.
B.
A DROP account will be created for each DROP program participant and maintained in the pension fund. The participant's account will accrue a guaranteed 2% annual rate of return. Any additional return from interest above 2% or investment growth from the participant's DROP account will remain in the pension fund. Participants will receive a monthly retirement benefit as if they had retired on the day prior to becoming a DROP participant that will deposited in the participant's DROP account. The monthly retirement benefit will include any applicable post-retirement annual adjustment as defined in § 2-237 of this article. A DROP participant will not receive a monthly retirement benefit outside of the DROP account, as calculated pursuant to this retirement system article, until termination of their DROP participation and commencement of retirement. A DROP participant shall not have any claim to any funds in their DROP account until separation from City employment.
C.
If the participant decides to voluntarily leave the DROP program
or is terminated from employment with the City while a DROP participant,
the employee will receive a pro rata payout of the accumulated DROP
account based on the date of separation. Example: A participant who
in the ninth month of a one-year DROP commitment chooses to leave
would be eligible for 75% of the accumulated DROP funds on the date
of separation. If a DROP participant, due to an injury or illness,
is unable to perform their duties for more than six weeks in any three-month
period while in the DROP, the participant will be removed from the
DROP and will receive the amount of their accumulated DROP benefit
as determined on the date of their separation from City employment.
D.
Within the 30 days' prior to separation from employment with the
City due to the conclusion of the employee's participation in the
DROP program, the participant must elect one of the following options
for the disbursement of the DROP account:
E.
If a DROP participant or former DROP participant dies before removing
all funds from their DROP account, the former DROP participant's designated
beneficiary will receive any remaining balances. If the former DROP
participant has not named a beneficiary for their DROP account, the
amount in the DROP account shall be paid to the beneficiary of the
former DROP participant's retirement allowance. If the former DROP
participant has not named a beneficiary to their retirement allowance,
the balance in the former DROP participant's account shall be paid
to the former DROP participant's estate.
F.
Special provisions. Notwithstanding any other contractual provision,
the following special provisions apply to a DROP participant:
(1)
Sick leave.
(a)
Upon entry into the DROP, a participant's sick leave balance
will be converted to 50% of the total sick leave balance. Example:
A participant's sick leave balance of 1,000 hours will be converted
to 500 hours of sick leave.
(b)
A participant may elect to carry over up to 252 hours (forty-two-hour
employee) of converted sick leave for use during the DROP. Any converted
sick leave not carried over will be cashed out. A participant will
continue to accrue sick leave as provided in the collective bargaining
agreement for the employee in effect at the time the employee becomes
a DROP participant. Upon separation from City employment, a participant
may cash out unused sick leave up to the amount originally carried
over at the participants current pay rate. Example: A participant
with 500 hours of converted sick leave elects to carry over 200 hours
of converted sick leave. The participant will be paid out the remaining
300 hours of converted sick leave at the participant's then-current
pay rate. At separation, the participant has 240 hours of sick leave
(200 hours carry over plus 40 hours of accrued sick leave). The participant
will be paid out 200 hours of converted sick leave at the participant's
then-current pay rate upon entering the DROP.
(2)
Vacation time. A participant may carry into the DROP up to 180
hours (forty-two-hour employee) of vacation time. A participant's
remaining vacation time will be cashed out upon date of entry into
the DROP. A participant will continue to accrue vacation time as provided
in the collective bargaining agreement for the employee in effect
at the time the employee becomes a DROP participant. The participant
will be limited to a maximum of 84 hours of vacation usage immediately
preceding the date of separation from City employment. Any unused
vacation time up to 180 hours (forty-two-hour employee) will be cashed
out at the participant's then-current pay rate upon exiting the DROP
and separating from City employment.
(3)
Pension contribution. DROP participants will not make any pension
contributions during their participation in the DROP program.
(4)
Special pays. A participant will continue to receive all special
pays (longevity pay, educational bonus, assignment bonus, food allowance,
clothing allowance, and holiday pay) pursuant to the provisions of
the collective bargaining agreement for the employee in effect at
the time the employee becomes a DROP participant.
(5)
Compensation time/COVID pandemic emergency leave time. A participant
will be cashed out of all compensation time upon entry into the DROP.
A participant may accrue a maximum 48 hours of compensatory time while
a DROP participant. A participant will be paid for up to 48 hours
of unused compensatory time upon separation at the participant's then-current
pay rate upon entering the DROP. Any emergency leave time (ELT) accrued
during the COVID-19 Level I operations (March through May 2020) will
be carried over into the DROP; however this COVID-related ELT must
be used by the employee before May 4, 2023, to avoid the ELT being
waived and forfeited.
(6)
Insurance. All insurance, benefits and contributions by the
participants will remain in place as outlined by the collective bargaining
agreement for the employee in effect at the time the employee becomes
a DROP participant during the term of the DROP. All retirement benefits
and premiums will correspond with the rate set forth by the collective
bargaining agreement for the employee in effect at the time the employee
becomes a DROP participant.
(7)
Promotion. A participant is not eligible for promotion while
in the DROP.
G.
All monthly payments following participation in the DROP are in lieu
of and offset any wage loss claims under the Michigan Workers' Disability
Compensation Act.[1] Any DROP lump sum payments will be an election of benefits disqualifying the participant from claims for workers' compensation wage loss benefits. It is the intention of this section that benefits under the DROP are controlled by the operation of § 2-245 of this chapter.
[1]
Editor's Note: See MCLA § 418.101 et seq.
A.
Prior to the date of his or her retirement, but not
thereafter, a member may elect to receive his or her retirement allowance
as a straight life retirement allowance payable throughout his or
her life, or may elect to receive the actuarial equivalent, determined
as of the date of his or her retirement, of his or her straight life
retirement allowance in a reduced retirement allowance payable throughout
his or her life, and nominate a beneficiary, in accordance with the
provisions of the options set forth below. If a member does not elect
an option prior to the date of his or her retirement, the member will
be presumed to have elected to receive his or her retirement allowance
as a straight life retirement allowance. A member electing or retirant
receiving a straight life retirement allowance may designate a beneficiary.
If the retirant dies before the aggregate amount of payments to him
or her equals his or her accumulated contributions, the remainder
produced by subtracting said payments from said contributions shall
be paid to said beneficiary. If the beneficiary survives the retirant
but dies before receiving payment, that payment shall be made to the
beneficiary's estate. If the beneficiary does not so survive or if
there is none designated, the above remainder shall be paid to the
retirant's estate:
(1)
Option A: Cash Refund Annuity. Under Option A, formerly
Option 2, if a retirant dies before he or she has received, in the
annuity portions of his or her reduced retirement allowance, an aggregate
amount equal to his or her accumulated contributions standing to his
or her credit at the time of his or her retirement, the difference
between his or her accumulated contributions and the aggregate amount
of annuity payments received by him or her shall be paid to such person
or persons as he or she shall have nominated by written designation
duly executed and filed with the Board. If there is no such designated
person surviving the retirant, such difference, if any, shall be paid
to the retirant's estate; or
(2)
Option B: 100% Survivor Allowance. Under Option B,
formerly Option 3, upon the death of a retirant, his or her reduced
allowance shall be continued throughout the life of and paid to such
person or persons having an insurable interest in his or her life,
as he or she shall have nominated by written designation duly executed
and filed with the Board prior to the date of his or her retirement.
Notwithstanding the foregoing, effective January 1, 2002, if the retirant's
beneficiary is not his or her spouse, the survivor allowance percentage
shall be adjusted as required to satisfy the limit under Treasury
Regulation Section 1.401(a)(9)-6, Q&A-2(c), based on the age differential
between the retirant and the beneficiary.
(3)
Option C: 50% Survivor Allowance.
(a)
Under Option C, formerly Option 4, upon the
death of a retirant, one-half of his or her reduced retirement allowance
shall be continued throughout the life of and paid to such person,
having an insurable interest in his or her life, as he or she shall
have nominated by written designation duly executed and filed with
the Board prior to the date of his or her retirement.
(b)
If a retirant who has elected Option B or Option C and his or her beneficiary under this § 2-240 die before the aggregate amount of payments under said option equals the retirant's accumulated contributions, the remainder, produced by subtracting said payments from said contributions, shall be paid as follows: If the beneficiary survived the retirant, the remainder shall be paid to the beneficiary's estate. If the beneficiary did not survive the retirant, the above remainder shall be paid to the retirant's estate.
(4)
Option D: ten-year (120 months) Certain and Life Retirement
Allowance. Under Option D, 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 having an insurable interest
in his or her life, and in such shares as the retirant shall have
designated in writing and filed with the Board. Notwithstanding the
foregoing provisions of Option D, effective January 1, 2002, Option
D will not be available if the retirant is older than 92 when the
benefit commences.
(5)
Option E. Fifteen-year (180 months) Certain and Life
Retirement Allowance.
(a)
Under Option E, 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 180 months to such person or persons having an insurable
interest in his or her life, and in such shares as the retirant shall
have designated in writing and filed with the Board. Notwithstanding
the foregoing provisions of Option E, effective January 1, 2002, Option
E will not be available if the retirant is older than 84 when the
benefit commences.
(b)
Under Option D or Option E, if there is no designated
person surviving the retirant, the then-present value of the remaining
unpaid monthly payments shall be computed and paid to the estate of
the retirant. If a designated person survives the retirant and dies
before receiving all the installments payable under the option plan,
there shall be paid to the estate of such person the then-present
value of the remaining unpaid installments which would otherwise have
been paid to such person.
(6)
Option F. Under Option F, the retirement allowance
shall be the same as under Option B for both the retirant and the
beneficiary, except that:
(a)
The retirement allowance shall be reduced by
an additional amount, as required by actuarial considerations, so
that in the event the retirant were to survive the beneficiary, the
retirant would then be able to receive a straight life retirement
allowance at no added cost to the system, based upon actuarial equivalence;
and
(b)
In the event that the beneficiary predeceases
the retirant, the retirant's retirement allowance becomes a straight
life retirement allowance.
(7)
Option G. Under Option G, the retirement allowance
shall be the same as under Option C for both the retirant and the
beneficiary, except that:
(a)
The retirement allowance shall be reduced by
an additional amount, as required by actuarial considerations, so
that in the event the retirant were to survive the beneficiary the
retirant would then be able to receive a straight life retirement
allowance at no added cost to the system, based upon actuarial equivalence;
and
(b)
In the event that the beneficiary predeceases
the retirant, the retirant's retirement allowance becomes a straight
life retirement allowance.
B.
For the purposes of § 2-240 of the Kalamazoo City Code, the term "upon the death of the retirant" shall mean the first day of the month immediately following the month in which the retirant died.
C.
Minimum distribution requirements. General rules.
Notwithstanding any provision of the retirement system to the contrary,
effective January 1, 2002, any distribution under the retirement system
shall be made in accordance with Code Section 401(a)(9) and the regulations
established thereunder as they are amended and shall comply with the
following rules:
(1)
Time and manner of distribution. To the extent required
by Code Section 401(a)(9) and the regulations promulgated thereunder,
payment of the benefits of a member shall begin not later than the
required beginning date, which, for purposes of this section, means
April 1 of the calendar year following the later of (i) the calendar
year in which the member reaches age 70 1/2, or (ii) the calendar
year in which the member retires.
(a)
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, then 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 the member would have
attained age 70 1/2, if later.
[b]
If the member's surviving spouse
is not the member's sole designated beneficiary, then 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.
[d]
If the member's surviving spouse is the member's sole designated beneficiary and the surviving spouse dies after the member but before distributions to the surviving spouse begin, this Subsection C(1)(a), other than Subsection C(1)(a)[1], will apply as if the surviving spouse were the member.
[2]
For purposes of this Subsection C(1)(a) and Subsection C(5), distributions are considered to begin on the member's required beginning date {or, if Subsection C(1)(a)[1][d] applies, the date distributions are required to begin to the surviving spouse under Subsection C(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 C(1)(a)[1][a]}, the date distributions are considered to begin is the date distributions actually commence.
(b)
Form of distribution. No payment option may
be selected by a member unless the amounts payable to the member are
expected to be at least equal to the minimum distribution required
under Code Section 401(a)(9). The amounts payable must satisfy the
minimum distribution incidental benefit requirements of Code Section
401(a)(9)(G).
(2)
Determination of amount to be distributed each year.
(a)
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:
(b)
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 C(1)(a)[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., bi-monthly, monthly, semi-annually, 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.
(c)
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.
(3)
Requirements for annuity distributions. If the member
had begun receiving periodic payments from the plan that were not
annuitized, the balance shall be paid to the beneficiary at least
as rapidly as under the payment option selected by the member. If
the member had begun receiving payments in the form of a pension or
annuity, the beneficiary shall be bound by all restrictions applicable
to the pension or annuity, and the form of payment selected thereunder,
and remaining payments, if any, shall be paid to the beneficiary in
the same manner.
(4)
Requirements for minimum distributions where member
dies before date distributions begin.
(a)
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 C(1)(a)[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.
(b)
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.
(c)
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 Subsection C(4) 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 C(1).
(5)
DESIGNATED BENEFICIARY
DISTRIBUTION CALENDAR YEAR
LIFE EXPECTANCY
Definitions. The following definitions shall apply for purposes of this Subsection C:
The individual who is designated as the beneficiary under
the retirement system and is the designated beneficiary under Code
Section 401(a)(9) and Treasury Regulation Section 1-401(a)(9)-4.
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 C(1)(a).
Life expectancy as computed by use of the Single Life Table
in Treasury Regulation Section 1.401(a)(9)-9. This definition of "life
expectancy" shall apply only for purposes of calculating minimum required
distributions under Code Section 401(a)(9) and the Treasury Regulations
thereunder and shall not apply for purposes of calculating any pension
or any benefit assigned under an EDRO otherwise payable under the
retirement system.
A.
Any member who has acquired the minimum number of years of credited service to satisfy the voluntary retirement age requirement, may, at any time prior to the date of his or her retirement, elect Option B provided in § 2-240, and nominate a beneficiary whom the Board finds to be dependent upon the member for at least 50% of his or her financial support. Prior to the date of his or her retirement, a member may revoke his or her election of Option B and nomination of beneficiary and, prior to the date of his or her retirement, he or she may again elect Option B and nominate a beneficiary as provided in this subsection. Upon the death of a member who has an Option B election in force, his or her beneficiary, if living, shall immediately receive a retirement allowance, which is the actuarial equivalent of a straight life retirement allowance computed according to § 2-236, in the case of a Public Safety member, or according to § 2-237, exclusive of Subsection B, in the case of a general member, computed in the same manner in all respects as if the member had retired the day preceding the date of his or her death, notwithstanding that he or she might not have attained his or her voluntary retirement age. If a member has an Option B election in force at the time of his or her retirement, his or her election of Option B and nomination of beneficiary shall thereafter continue in force unless, prior to the date of his or her retirement, he or she elects a straight life retirement allowance or another option provided in § 2-240. No retirement allowance shall be paid under this subsection on account of the death of a member if any benefits are paid or are to be payable under § 2-241B or 2-244 on account of his or her death.
[Amended 10-4-2010 by Ord. No. 1874]
B.
Any member who has acquired the minimum number of years of credited service to satisfy the voluntary age requirement, but does not have an Option B election provided in Subsection A of this section in force, and dies while in the employ of the City and leaves a spouse, the spouse shall immediately receive a retirement allowance computed according to § 2-237, exclusive of Subsection B, in the same manner and all respects as if the member had retired the day preceding the date of his or her death, notwithstanding that he or she might not have attained his or her voluntary retirement age, elected Option B provided in § 2-240 and nominated his or her spouse as beneficiary. No retirement allowance shall be paid under this subsection on account of the death of a member, if any benefits are paid or are to be payable under §§ 2-241A and 2-244 on account of his or her death.
[Amended 10-4-2010 by Ord. No. 1874]
C.
If any Public Safety member continues in the employ of the City on or after the date he or she acquires 10 years of credited service, and does not have an Option B election provided in Subsection A of this section in force, and dies while in the employ of the City, the applicable benefits provided in Subsection C(1), (2) and (3) shall be paid:
(1)
The accumulated contributions standing to the member's credit in the annuity savings fund at the time of his or her death shall be paid in accordance with the provisions of § 2-247.
(3)
If the deceased person leaves an unmarried child or children under age 18 years, 15% of the final compensation shall be paid for one child or 25% of the final compensation for two or more children. Upon a child's adoption, marriage, death or attainment of age 18 years, whichever occurs first, his or her pension shall terminate and the Board shall recalculate and make payment of the deceased person's final compensation to his remaining eligible children under 18 years of age, if any, in the percentages set forth in this section. Any pension payable under this subsection shall be subject to § 2-245.
A.
A member who has acquired the minimum number of years of credited service to satisfy the voluntary retirement age requirement and becomes totally and permanently incapacitated for duty in the employ of the City may be retired by the Board upon application of the member or his/her department head, provided that, after medical examination of the member made or by under the direction of the medical director, the medical director certifies to the Board that the member is mentally or physically totally incapacitated for duty in the employ of the City, will probably be permanently incapacitated and should be retired. Upon his retirement, the member shall receive a disability retirement allowance provided in § 2-243.
[Amended 10-4-2010 by Ord. No. 1874]
(1)
A decision by the Board to grant either a duty or
non-duty disability retirement to any employee, including Public Safety
officers, shall be a final decision on that employee's fitness to
work. A decision by the Board to retire any employee, including a
Public Safety officer, for reasons of disability shall completely
terminate that individual's right to continue to work for the City,
and shall be effective immediately, regardless of whether that individual
subsequently remains on the payroll or is otherwise compensated by
the City after the date of the Board's decision by virtue of accumulated
sick pay, vacation pay, worker's compensation, or any other type of
payment of wages, salary or any other type of compensation.
B.
A member need not have acquired the minimum number
of years of credited service to satisfy the voluntary retirement age
requirement if the Board finds the member to be totally and permanently
disabled for duty in the employ of the City as the natural and proximate
result of the personal injury or disease arising out of and in the
course of his/her City employment.
[Amended 10-4-2010 by Ord. No. 1874]
C.
Beginning January 1, 1984, if a Public Safety member
is totally incapacitated for duty as a police officer, fire fighter
or Public Safety officer and the Board finds that his or her disability
is the natural and proximate result of causes arising out of and in
the course of his or her employment as a police officer or fire fighter
with the City and that the employee will likely be permanently so
incapacitated, the member shall be entitled to a duty disability retirement
allowance calculated in the same manner as a voluntary retirement
benefit, except that, during the member's worker's compensation period,
his or her duty disability retirement allowance under this subsection
shall not exceed the difference between his or her final compensation
and his or her weekly worker's compensation award converted to an
annual basis.
(1)
If the member disagrees with the finding of the medical
director, he or she shall have the right to submit reports from his
or her medical doctor. In the event a dispute continues to exist,
the medical director and the member's doctor shall select a third
doctor who shall provide the Board with an opinion concerning the
disputed matters before the Board renders its decision.
(2)
If a dispute continues to exist concerning the meaning
or application of the retirement system after a decision by the Board,
such dispute shall not be grievable under labor agreements, but subject
to review, as provided by applicable law, in the Kalamazoo County
Circuit Court or other court as may be appropriate.
(3)
The Public Safety member may elect to waive the provisions
of the duty disability retirement he or she is entitled to and accept
such retraining, rehabilitation and/or other employment as the City
may choose to offer. The Public Safety member shall retain any benefits
he or she has earned in the police/fire portion of the retirement
system.
D.
The Board of Trustees shall have the right and opportunity
to have a medical examination conducted of the person whose injury
or sickness is the basis of a disability benefit during the pendency
of a claim or period of payment, subject to the following:
(1)
Examination may be made no more often than once during
every twelve-month period, except that the Board may require examination
at any time there is specific reason to believe that the disability
or condition giving rise thereto no longer exists;
(2)
The examination shall be limited to the condition
upon which the disability is based.
(3)
The expense of the examination and all other reasonable incidental costs, such as travel, meals and lodging at standard rates for City employee travel, will be borne by the retirement system under § 2-251 of the Kalamazoo City Code.
(4)
If the Board at any time believes that the facts of
the case do not require further examination, the Board may waive examination
for any time the Board deems appropriate based upon the facts of the
case, but such waiver may be rescinded by the Board at any time.
(5)
Notification of the time, date and place of the examination
shall be mailed to the retirant at the address to which his or her
benefits are mailed, and said notice shall be mailed at least 30 days
prior to the date of the examination.
E.
If the retirant fails or refuses examination, or if
upon reviewing the medical information received, the Board is not
satisfied that the disability still exists, the Board shall so inform
the retirant. If, within 30 days of such notice being sent, the retirant
has not requested a hearing on the mailer, the Board may terminate
the disability benefits. The termination of benefits under this section
shall not affect eligibility for nondisability benefits. If a hearing
is timely requested, the retirant shall be permitted to present evidence,
question witnesses, and make argument for nontermination. The Board
may obtain and consider any relevant evidence. If it finds that the
disability no longer exists, benefits shall be terminated. The time,
date, and place of the hearing shall be set by the Board. Notices
shall be to the retirant at the address to which his or her benefits
are sent.
A.
If a member retires on account of his or her total and permanent disability, as provided in § 2-242, and the Board finds that his or her disability did not occur as the result of causes arising out of and in the course of his or her actual performance of duty in the employ of the City, he or she shall receive a disability retirement allowance computed according to § 2-236, if he or she is a Public Safety member, or according to § 2-237, exclusive of Subsection B, if he or she is a general member. His or her disability retirement allowance shall be subject to §§ 2-245 and 2-246. Prior to the date of his or her retirement, he or she shall have the right to elect to receive his or her retirement allowance under an option provided in § 2-240 in lieu of a straight life retirement allowance.
B.
If a member retires before his or her voluntary retirement age on account of his or her total and permanent disability, as provided in § 2-242, and the Board finds that his or her disability is the natural and proximate result of cause arising out of and in the course of his or her actual performance of duty in the employ of the City, he or she shall receive a disability retirement allowance computed according to § 2-236, if he or she is a Public Safety member, or according to § 2-237, exclusive of Subsection B, if he or she is a general member. In computing his or her disability retirement allowance, the credited service to be used shall be the sum of his or her credited service in force at the time of his or her retirement and the number of years, and fraction of a year, in the period from the date of his or her retirement to the date he or she would attain his or her voluntary retirement age had he or she continued in City employment. For public safety members, receipt of benefits from the retirement system is an election of like benefits in lieu of workers' compensation wage loss benefits under the Michigan Workers Disability Compensation Act of 1969, as amended, 1975 PA 279; MCLA § 418.101 et seq. His or her disability retirement allowance shall be subject to § 2-246. Prior to the date of his or her retirement, he or she shall have the right to elect to receive his or her retirement allowance under an option provided in § 2-240 in lieu of a straight life retirement allowance.
[Amended 10-5-2020 by Ord. No. 2016]
C.
Total and permanent disability provisions for injuries occurring on or after the effective date of June 1, 2022. If after completing 15 or more years of credited service, a public safety member becomes totally and permanently disabled from all occupations as the result of accident or injury while traveling to the duty station, the member shall qualify for benefits under the duty disability provisions (§ 2-242). Total and permanent disability means:
[Added 6-3-2024 by Ord. No. 2083]
(1)
Total
and permanent loss of sight of both eyes;
(2)
Loss
of both legs or feet at or above the ankle;
(3)
Loss
of both arms or both hands at or above the wrist;
(5)
Permanent
and complete paralysis of both legs or both arms or of one leg and
one arm;
(6)
Permanent
and total loss of use of both legs or both hands or both arms or one
leg and one arm.
A.
In the event a member dies as the result of a personal injury or disease arising solely out of and in the course of his or her employment by the City, or a disability retirant dies within a period of five years from and after the effective date of his or her retirement, and prior to attainment of age 60 years, as the result of the same injury or disease for which he or she was retired, and in either case such death, injury or disease resulting in death is found by the Board to have been the result of his or her actual performance of duty in the employ of the City, the applicable benefits provided in Subsection A(1), (2), (3), (4) and (5) of this subsection shall be paid.
(1)
The accumulated contributions standing to the member's credit in the annuity savings fund at the time of his or her death shall be paid in accordance with the provisions of § 2-247; or
(2)
The surviving spouse of the deceased person shall receive a pension of 33 1/3% of his or her final compensation, provided that, in the case of a disability retirant, he or she was the spouse of the member at the time of the member's retirement. A surviving spouse's pension shall terminate upon his or her remarriage or death, and shall be subject to § 2-245 and to Subsection B of this section; and
(3)
If, in addition to a surviving spouse, the deceased person leaves an unmarried child or children under age 18 years, each such child shall receive a pension of an equal share of 25% of his or her final compensation. Upon a child's adoption, marriage, death or attainment of age 18 years, whichever occurs first, his or her pension shall terminate and the Board shall redistribute the shares of 25% of the deceased person's final compensation to his or her remaining eligible children under age 18 years. Any pension payable under this subsection shall be subject to § 2-245 and to Subsection B of this section; but
(4)
If there is no spouse surviving the deceased person, or if his or her surviving spouse dies or remarries before his or her youngest unmarried child attains age 18 years, his or her unmarried child or children under age 18 years shall each receive a pension of 25% of his or her final compensation; provided that, if there are more than two such surviving children, each such child shall receive a pension of an equal share of 50% of his or her final compensation. Upon a child's adoption, marriage, death or attainment of age 18 years, whichever occurs first, his or her pension shall terminate and the Board shall redistribute the shares of 50% of the deceased person's final compensation to his or her remaining eligible children under age 18 years. In no case shall any such child's pension exceed 25% of the deceased person's final compensation. Any pension payable under this subsection shall be subject to § 2-245 and to Subsection B of this section; or
(5)
If there is neither a surviving spouse nor children eligible to receive a pension provided in this section surviving the deceased person, there shall be paid to each his or her dependent father and dependent mother, whom the Board, after investigation, finds to have been actually dependent upon the deceased person for financial support, a pension of 16 2/3% of his or her final compensation. Any pension payable under this subsection shall be subject to § 2-245 and to Subsection B of this section, and shall in no case exceed $720 a year.
B.
If a beneficiary becomes entitled to a retirement allowance provided in § 2-240 or 2-241 on account of the death of a retirant or member, and he or she elects to take under § 2-240 or 2-241, then no benefits shall be paid under this section on account of his or her death. Any pension due any child under Subsection A of this section may, in the discretion of the Board, be paid to the parent or person who stands in loco parentis to such child; provided that, if the Board finds that such child is not being properly cared for, the Board may require the appointment of a guardian for the purpose of receiving such pension.
[Amended 9-8-2020 by Ord. No. 2015]
A general member receiving pension or retirement benefits shall
be presumed not to have a loss of earnings or earning capacity as
the result of an injury or disease under the Michigan Workers Disability
Act. Net benefits paid to a general member shall be reduced by 100%
of the amount of workers' compensation benefits paid or payable under
the Michigan Workers Disability Compensation Act, 1969 PA 279; MCLA
§ 418.101 et seq., for identical periods of time except
there will be no credit or reduction for specific loss benefits paid
or received under the workers' disability compensation. In the event
a person becomes entitled to a pension or other benefits, payable
by the retirement system, as the result of an accident or injury caused
by the act of a third party, the City shall be subrogated to the rights
of such person against such third party to the extent of the benefits
which the City pays or becomes liable to pay.
A disability retirant who has been or who shall
be returned to the employ of the City shall again become a member
of the retirement system. His or her credited service in force at
the time of his or her retirement shall be restored to his or her
credit. He or she shall be given service credit for the period he
or she was receiving a disability retirement allowance if, within
such period, he or she was in receipt of worker's compensation on
account of his or her total and permanent disability arising out of
and in the course of his or her City employment; otherwise, he or
she shall not be given the service credit for the period he or she
was in receipt of a disability retirement allowance.
A.
Commencing in the year 2001, and thereafter occurring
every third year, subject to the limitations set forth below, a nonguaranteed
payment shall be paid from the system assets to certain retirees;
for each such person, the amount to be paid shall be the product of
$43.67 (subject to the increases allowed below) times the sum of the
retiree's years and fraction thereof of credited service plus the
number of years and fraction thereof which have elapsed between the
retirant's date of retirement and December 31 of the year preceding
the payment to be made.
B.
Eligibility.
[Amended 4-21-2008 by Ord. No. 1838]
(1)
The retirees eligible to receive said periodic payment
shall be those who:
(a)
Retired prior to January 1, 2000; and
(b)
Have been retired at least five years prior
to December 31 of the year preceding the periodic payment to be made;
and
(c)
Have attained the age of 70 years prior to June
1 of the year preceding the periodic payment to be made; and
(d)
Had at least 25 years of service with the City
of Kalamazoo; and
(e)
Whose annual retirement allowance is less than
$20,000, but who are not eligible for a post-retirement adjustment.
(2)
In those instances where a retirement allowance is
divided by an EDRO, the "retired prior to" language above applies
to the actual retiree, not the alternate payee; the "less than $20,000"
requirement shall apply to the combined amounts being received by
the retiree and the alternate payee.
C.
If the periodic payment provided for above, when added
to the existing retirement allowance, exceeds $20,000, the periodic
payment shall be reduced by the amount said sum exceeds $20,000. In
those instances where a retirement allowance is divided by an EDRO,
if the periodic payment(s), when added to the existing retirement
allowances, exceed $20,000, the periodic payment(s) shall be reduced
by the amount said sum exceeds $20,000.
[Amended 4-21-2008 by Ord. No. 1838]
D.
A beneficiary currently receiving a retirement allowance,
or an individual who in the future becomes a beneficiary and who thereafter
receives such an allowance, shall be entitled to receive the periodic
payment based upon the same calculations (that is, the beneficiary's
retirant's years of credited service and years since retirement) and
subject to the same limitations, as described herein.
E.
In computing future retirement allowance payments,
or any other payment due to a retirant or beneficiary, the payments
provided herein shall not be considered.
F.
The periodic payment described herein shall be made
in June every third year, commencing 2001; however, no payment shall
be made in any year in which the fund's actuary projects (based upon
a valuation of the fund as of December 31 of the prior year) the need
for City contributions to the fund (for one or more actuarial grouping)
within 10 years of the projection nor if the actuary recommends a
contribution by the City (for one or more actuarial grouping) for
that year. In the event a periodic payment is not made in a year in
which it would otherwise occur (because of the actuary's projection
or recommendation), then the payment shall be made in the next year
in which no such actuarial projection or recommendation is made. In
the event that a periodic payment is so delayed, future periodic payments
shall be made every third year thereafter (so long as not prohibited
by an actuarial projection or recommendation).
G.
When calculating the amount of the periodic payment
for each individual after 2001, the $43.67 amount referenced above
shall increase by the lesser of 2% per year or the C.P.I. (i.e., the
Consumer Price Index, U.S. City Average, all urban consumers) which
exists for the period of time between December 31 of the year preceding
the last payment and December 31 of the year preceding the payment
to be made.
H.
In no event, however, shall the total of all of the
periodic payments in one year exceed the amount of $750,000; in the
event the total payments are in excess of that amount, each individual's
payment shall be reduced proportionately to reduce the total payment
to said $750,000. Any periodic payment due to a retiree who is alive
on December 31 of the year prior to the payment, but who dies before
the payment is made, shall be made (one time only) to that retiree's
estate or beneficiary, as the case may be.
I.
Notwithstanding any of the above, the City administration
shall be entitled to recommend to the City Commission at any time
that the periodic payments be reduced or eliminated, and the City
Commission shall, at any time, be entitled, with or without such a
recommendation, to reduce or eliminate said periodic payments.
A.
Should any member cease to be employed by the City
before he or she attains his voluntary retirement age, for any reason
except his or her retirement or death, he shall be paid his accumulated
contributions standing to his or her credit in the annuity savings
funds, as he or she shall demand in writing on forms furnished by
the Board.
B.
Should a member die and no retirement allowance or pension will become payable by the retirement system on account of his or her death, except as provided in § 2-244, his or her accumulated contributions standing to his or her credit in the annuity savings fund at the time of his or her death shall be paid to such person or persons as he or she shall have nominated by written designation duly executed and filed with the Board. If there is no such designated person surviving the member, his or her accumulated contributions shall be paid to his or her legal representative.
C.
If a member dies without heirs, and without a designated
beneficiary surviving him or her, accumulated contributions standing
to his or her credit in the annuity savings fund at the time of his
or her death may be used to pay his or her burial expenses, not to
exceed a reasonable sum to be determined by the Board, provided he
or she leaves no other estate sufficient for such purpose.
D.
Payments of accumulated contributions, as provided
in this section, may be made in installments according to such rules
and regulations as the Board may from time to time adopt.
E.
Code Section 401(a)(31), Direct rollovers. Notwithstanding
any provision of the plan to the contrary, for distributions made
on or after January 1, 1993, a distributee may elect, at the time
and in the manner prescribed by the Board of Trustees, to have any
portion of an eligible rollover distribution paid directly to an eligible
retirement plan specified by the distributee in a direct rollover.
A.
The annuity savings fund is hereby created. It shall be the fund in which shall be accumulated at regular interest, the contributions deducted from the compensation of members (or "picked up" by the City pursuant to Subsection F to provide for their annuities, and from which shall be made refunds and transfers of accumulated contributions as provided in this article.
B.
Each member shall contribute a percentage of his or
her annual compensation to the annuity fund, which percentage shall
be as follows:
(1)
For Public Safety members, 8% throughout 1998, 7 1/4%
throughout 1999, and 6 1/2% on and after January 1, 2000, except
that on and after January 1, 1999, those Public Safety members who
are members of the Kalamazoo Police Supervisors' Association with
at least 26 years but fewer than 29 years of credited service need
make no contributions.
(2)
For members represented by the Kalamazoo Municipal
Employees Association, 3%, except that on and after March 13, 2000,
the percentage shall be 2%, and except that on and after January 1,
2001, the percentage shall be 1%, unless increased as provided by
the collective bargaining agreement.
(3)
For members represented by the ATU, 2%, except that
commencing March 1, 2000, the amount shall be 1%.
(4)
For civilian, non-sworn employees of Public Safety
represented by the Kalamazoo Police Officers Association, 4% except
that on and after January 12, 2007, it shall be 1%.
(5)
For a member who is represented by the AFSCME effective
October 2, 2006, 1%, but that will increase to 2% if the funding level
of the pension fund drops below 120%.
C.
The officer or officers responsible for making the payroll shall cause the applicable contribution provided for in Subsection B of this section to be deducted from the compensation of each member (or "picked up" by the City pursuant to Subsection F with respect to each and every payroll, for each and every payroll period, so long as he or she remains a member in the employ of the City. Such contribution, when thus deducted or "picked up," shall be paid to the retirement system and shall be credited to his or her individual account in the annuity savings fund. Every member shall be deemed to consent and agree to the deductions or salary reductions made and provided for herein. Payment of his or her compensation, less such deductions or reductions, shall be a full and complete discharge and acquittance of all claims and demands whatsoever for services rendered by him or her during the period covered by such payment, except as to benefits provided under this article. The member's contributions provided for herein shall be made notwithstanding that the minimum compensation provided by law for any member shall be thereby changed.
D.
In addition to the contributions deducted from the
compensation of a member, as hereinbefore provided, he or she shall
deposit in the annuity savings fund, by a single contribution or by
an increased rate of contribution, as approved by the Board, the amount,
if any, he or she withdrew from the annuity savings fund, together
with regular interest from the date of withdrawal to the date of repayment.
In no case shall any member be given credit for service rendered prior
to the date he or she withdrew his or her accumulated contributions
until he or she repays the annuity savings fund all amounts due the
fund by him or her.
E.
Upon the retirement of a member, his or her accumulated
contributions shall be transferred from the annuity savings fund to
the retirement reserve fund. At the expiration of a period of three
years from the date an employee ceases to be a member, any balance
standing to his or her credit in the annuity savings fund, unclaimed
by the member or his or her legal representative, shall remain a part
of the monies of the retirement system, provided he or she does not
have entitlement to a retirement allowance payable by the retirement
system.
F.
The City Commission may, from time to time by resolution,
designate one or more classes, groups or categories of City employees
who shall have their employee contributions "picked up" as hereinafter
described, provided that:
(1)
The City Commission may, by appropriate resolution,
likewise withdraw such designation from one or more classes, groups
or categories of City employees.
(2)
All designations or withdrawals of designations shall
be done so as not to discriminate in favor of employees who are officers
or highly compensated individuals, within the meaning of Section 401(a)(4)
of the Internal Revenue Code.
(a)
Effective as provided in the following subsection, the contributions, required by Subsection B in respect of those employees who are included within a class, group or category so designated by the City Commission, shall be "picked up" by the City in lieu of their employee contributions, as permitted by Section 414(h) of the Internal Revenue Code, and shall be treated as employer contributions in determining tax treatment under said Code. The City shall "pick up" these employee contributions from funds made available as a result of each such employee's authorization to reduce his or her salary or wages in an amount corresponding to the contribution required by Subsection B. Employee contributions "picked up" by the City pursuant to this subsection shall be treated for all other purposes in the same manner and to the same extent as employee contributions made prior to the effective date of this subsection. No employee in any such class, category or group shall have the option of choosing to receive contributed amounts directly, instead of having them paid by the City to the retirement system.
The retirement reserve fund is hereby created.
It shall be the fund from which shall be paid all annuities and pensions
payable as provided in this article. Should a disability retirant
return to the employ of the City, his annuity reserve at the date
of his or her return shall be transferred from the retirement reserve
fund to the annuity savings fund and shall be credited to his or her
individual account therein; and his or her pension reserve shall be
transferred to the pension reserve fund.
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 allowance 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 (i) fully fund the cost of benefits likely
to be paid on account of service rendered by members during the year,
and (ii) 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 40 years. Such contributions shall be computed by
the actuary as level percentages of member payroll in accordance with
generally accepted actuarial principles on the basis of such rates
of interest and tables of experience as the Investment Committee recommends
and the City Commission shall from time to time adopt. The City may
also contribute the anticipated cost of any insurance coverage provided
retirants and beneficiaries through the retirement system. The Investment
Committee shall annually certify to the Commission the contributions
determined according to this section.
D.
Forfeited amounts, if any, resulting from the operation
of the retirement system shall be applied to reduce the next succeeding
contribution or contributions required to be made to the reserve by
the City under this section and shall not be applied to increase any
pensions and/or annuities payable to any member under the retirement
system.
Expenses for the administration of the retirement
system shall be paid from investment income.
There is hereby created an Investment Committee
which shall manage the assets of the system and have full power to
invest and reinvest such assets, subject to the provisions of Act
314 of the Public Acts of 1965 (MCLA § 38.1132 et seq.),
as amended, and any other applicable law or regulation. The Committee
shall have the power to purchase notes, bonds, or other obligations
of the City before or after the same are offered to the public and
with or without advertising for bids. The Committee shall have power
to hold, purchase, sell, assign, transfer, and dispose of any securities
and investments in which any of the funds of the retirement system
have been invested, as well as the proceeds of such investments and
any monies belonging to the system. The provisions of this section
shall be subject to such conditions and restrictions as the City Commission
may from time to time impose by resolution.
A.
Membership, appointment.
(1)
The Investment Committee shall be composed of
no fewer than three members nor more than seven members, all of whom
shall have a financial background and none of whom shall be participants
in the system. Additionally, to avoid a conflict of interest, or the
appearance thereof, no member shall be employed by or associated with
(except in the capacity of outside director) any organization that
provides services similar to those retained or used by the Committee.
One member may be a member of the Board of Trustees of the system.
(2)
The Investment Committee members shall serve
without compensation, and if any member fails to attend three consecutive
regularly scheduled meetings of the Committee, unless in each case
excused for cause by the remaining members, his or her office will
be deemed vacated. Within 60 days of any time that the number of Committee
members becomes fewer than three, the Mayor, with the consent of the
City Commission, shall appoint enough new members so that the Committee
consists of three members. At any time the Committee consists of fewer
than seven members but more than two members, and a majority of the
Committee desires the addition of one or more new members, the Mayor,
with the consent of the City Commission, shall appoint new members
in such number as requested by the then-existing Committee. All members
shall serve three-year terms, with the exception of those who are
appointed to replace those with unexpired portions of their terms;
said replacement members shall serve the unexpired portion of the
term, in the same manner as the office was previously filled.
(3)
The Committee shall hold meetings regularly,
at least quarterly, and shall designate the time and place thereof.
A majority of the Committee's membership shall constitute a quorum
at any meeting of the Committee. Each member shall be entitled to
one vote on each question before the Committee; at any meeting with
a quorum, decisions shall be made by affirmative vote of a majority
of those present; except that should the Committee's membership become
three, the entire membership shall constitute a quorum and all decisions
shall be made by a unanimous vote of the entire membership. The Committee
shall adopt its own rules of procedure and shall keep a record of
its proceedings. All meetings of the Committee shall be open to the
public. The City Commission may appoint a Commissioner as liaison
to the Committee.
C.
Duties. The duties of the Investment Committee shall
be as follows:
(1)
To formulate and recommend to the City Commission
investment policies, strategies, and guidelines for approval by the
City Commission.
(2)
To carry out such investment policies, strategies,
and guidelines as approved by the City Commission.
(3)
To establish investment performance monitoring
systems and report the results of said system quarterly to the City
Commission.
(4)
To investigate and recommend investment managers,
advisors, actuaries, and other necessary services to the City Commission
for its approval.
(5)
To recommend to the City Commission for approval
the allocation of annual contributions and redistribution of funds,
including investment income, to investment managers, reserves and
accounts.
(6)
To ensure that investment records are properly
maintained.
(7)
To serve as the primary contact with investment
managers, actuaries and advisors.
(8)
To ensure that the plan is properly audited.
(9)
To provide the actuary with data to make the
annual valuation, which shall show the financial condition of the
system by means of an actuarial valuation of its assets and liabilities
and be rendered annually to the City Commission.
(10)
To recommend actuarial assumptions to the City
Commission.
(11)
To perform such other duties as the City Commission
may from time to time direct.
There shall be kept on deposit available cash
not to exceed 5% of the total assets of the retirement system. The
trust fund shall be held for the sole purpose of meeting disbursements
for pensions, annuities and other payments authorized by this article
and shall be used for no other purpose. It shall not be possible,
at any time prior to satisfaction of all liabilities to members and
their beneficiaries under the retirement system, for any part of said
assets to be used for, or diverted to, purposes other than for the
exclusive benefit of members and their beneficiaries and for paying
reasonable expenses of the retirement system and the trust fund. The
description of the various funds of the retirement system, as contained
in this article, shall be interpreted to refer to the accounting records
of the system.
All payments from monies of the retirement system
shall be made according to Charter and ordinance provisions. No check
shall be issued unless it shall have been previously authorized by
a specific or continuing resolution adopted by the Board or Investment
Committee.
A.
The income fund is hereby created. It shall be the
fund to which shall be credited all interest, dividends and other
income from investments of the retirement system; all gifts and bequests
received by the system; all unclaimed accumulated contributions as
provided in this article; and all other monies received by the system,
the disposition of which is not specifically provided in this article.
There shall be paid or transferred from the income fund all amounts
required to credit regular interest to the annuity savings fund, retirement
reserve fund and the pension reserve fund, as provided in this article.
Wherever the Investment Committee determines the balance in the income
fund is more than sufficient to cover current charges to the fund,
such excess amount, or any part thereof, may be used to provide contingency
reserves or to meet special requirements of the other funds of the
system, except the expense fund, as the Investment Committee shall
determine. However, any amounts left in the income fund after meeting
the requirements contained herein shall at the end of each year be
automatically credited to the employer's reserve. Whenever the balance
in the income fund is insufficient to meet the charges to the fund,
the amount of such insufficiency shall be transferred from the pension
reserve fund to the income fund.
B.
The Investment Committee shall, at the end of each
fiscal year, allow regular interest on the members' individual balances
in the annuity savings fund at the beginning of the fiscal year, and
on the mean balances in the retirement reserve fund and the pension
reserve fund. The amounts of interest so allowed and credited shall
be charged to the income fund.
C.
The Investment
Committee may, unless restricted by law, transfer assets of the income
fund to a collective or common group trust, as permitted under Revenue
Ruling 81-100 and Revenue Ruling 2011-1 (or subsequent guidance),
that is operated or maintained exclusively for the commingling and
collective investment of monies, provided that the funds in the group
trust consist exclusively of trust assets held under plans qualified
under Section 401(a) of the Internal Revenue Code, individual retirement
accounts that are exempt under Section 408(e) of the Internal Revenue
Code, eligible governmental plans that meet the requirements of Section
457(b) of the Internal Revenue Code, and government plans under Section
401(a)(24) of the Internal Revenue Code. For this purpose, a trust
includes a custodial account that is treated as a trust under Section
401(f) or under Section 457(g)(3) of the Internal Revenue Code. For
purposes of valuation, the value of the interest maintained by the
system in such group trust shall be the fair market value of the portion
of the group trust held for the system, determined in accordance with
generally recognized valuation procedures. The Investment Committee
may adopt one or more group trust(s) as part of the system, by executing
appropriate participation and/or adoption agreements with the group
trust's trustee.
[Added 11-3-2014 by Ord.
No. 1927]
All assets held as of the effective date of
Ordinance No. 378 for the purpose of financing the retirement system
established by Ordinance No. 188 shall be credited to the retirement
system as amended by Ordinance No. 378. Such credits shall be made
as follows:
A.
Assets credited to the prior service pension fund
and all other assets held for the purpose of financing prior service
pensions shall be credited to the pension reserve fund.
B.
Assets credited to the retirement annuity and pension
fund arising from City contributions shall be credited to the pension
reserve fund.
C.
Assets credited to the individual accounts of members
in the retirement annuity and pension fund arising from their contributions,
together with regular interest credited thereon, shall be credited
to their individual accounts in the annuity savings fund.
D.
Assets credited to the retirement annuity and pension
fund held for the purpose of paying annuities and pensions to individuals
who have retired shall be credited to the retirement reserve fund.
E.
All other assets held for the purpose of financing
the retirement system established by Ordinance No. 188, not accounted
for above, shall be credited to the pension reserve fund.
The retirement benefits allowed under Ordinance
No. 188 prior to the effective date of Ordinance No. 378 shall be
continued without adjustment of amounts. The 1966 amendments of Ordinance
No. 378, as amended, shall not apply to pensions and retirement allowances
being paid as of the day preceding the effective date of the 1966
amendments.
Should any change in the records result in any
person receiving from the retirement system more or less than he or
she would have been entitled to receive had the records been correct,
the Board shall correct such error and, as far as is practicable,
shall adjust the payment in such manner that the actuarial equivalent
of the benefit to which such person was correctly entitled shall be
paid.
A.
The right of a person to an annuity, a pension, a
retirement allowance, to the return of accumulated contributions,
the annuity, the pension, or the retirement allowance itself, any
optional benefits, any other right accrued or accruing to any person
under the provisions of this article, 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 specifically provided in this article. If a member is covered
by a group insurance or prepayment plan participated in by the City,
and should he 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 required of him
or her to continue coverage under such group insurance or prepayment
plan. The City shall have the right of setoff for any claim arising
from embezzlement by or fraud of a member, retirant or beneficiary.
B.
The City shall comply with a court order directing
that all or a portion of a member's pension rights be forfeited, pursuant
to the Public Employee Retirement Benefits Forfeiture Act, MCLA § 38.2701
et seq.
Whoever, with intent to deceive, shall make any statement or report required under this article which is untrue, or shall falsify or permit to be falsified any record or records of the retirement system, or who shall otherwise violate, with intent to deceive, any provision of this article shall be guilty of a misdemeanor and punishable as provided in § 1-7 of this Code.
[Amended 1-3-2023 by Ord. No. 2060]
Upon the death of any retirant, excepting members taking a deferred retirement benefit under § 2-239A, the retirement system shall pay to the beneficiary previously designated by the retirant, or if none to the estate of the deceased, the sum of $5,000.
[Amended 9-8-2020 by Ord. No. 2015]
A.
This City, being a "municipal unit" which covers its employees under
a retirement system, does hereby, by a majority vote of its governing
body, elect to adopt the provisions of the Reciprocal Retirement Act,
No. 88 of 1961 (MSA § 4.1601; MCLA § 38.1101),
for its employees covered under such retirement system. The City Clerk
shall file written certification of this action with the Secretary
of State for the State of Michigan.
B.
An employee who has 30 months or more of credited service acquired
as a member of the City's retirement system and who has attained the
age but has not met the service requirements for age and service retirement
shall be entitled to use his or her credited service in force previously
acquired as a member of another Michigan governmental or municipal
unit retirement system, including credited service in force previously
acquired as a member of a retirement system of any public university
and tax-supported community or junior college in the State of Michigan,
in meeting the service requirements of the City's retirement system.
As used in this section, "governmental unit" and "retirement system"
mean those terms as defined at MCLA § 38.1102.
[Amended 1-3-2023 by Ord. No. 2060]
C.
As of December 31, 2019, a member can use his or her credited service in force previously acquired as a member of a reciprocal unit to meet eligibility service requirements to qualify for 1) increased multipliers found in §§ 2-236 and 2-237; 2) any post-retirement adjustment in for his or her respective employee group; and 3) achieving 25 years of credited service to avoid the reduction in retirement allowance as otherwise required by § 2-237B. Public Safety members who retired before December 31, 2019, can use credited service in force previously acquired as a member of a reciprocal unit for vesting purposes only. As used in this section, "reciprocal unit" means that term as defined at MCLA § 38.1102.
[Amended 1-3-2023 by Ord. No. 2060]
D.
A general member that retired between July 26, 2017, and December 30, 2019, with credited service with a Michigan governmental or municipal unit that has elected to adopt the provisions of the Reciprocal Retirement Act, being Public Act 88 of 1961, as amended, is permitted to apply previous credited service with a reciprocal unit so as to permit the member to achieve 25 years of credited service to avoid the reduction in retirement allowance as otherwise required by § 2-237B.
E.
Members who retire between August 1, 2020, and December 31, 2020,
may use up to one year of concurrent service from another Michigan
governmental or municipal unit if that member was also a member of
that Michigan governmental or municipal unit's retirement system,
as defined by MCL § 38.1102, in meeting the service requirements
of the City's retirement system. "Concurrent service" shall mean for
this subsection simultaneous service with the City of Kalamazoo and
another Michigan municipal or governmental unit.
The description of various funds of the retirement
system shall be interpreted to refer to the accounting records of
the retirement system and not to the segregation of monies in the
various funds of the system.
Maximum retirement allowances. Notwithstanding
any other provision of the retirement system to the contrary, the
maximum annual retirement allowance derived from City contributions
to the system, payable on a straight life basis in respect to a member,
at the time of retirement shall not exceed the lesser of:
A.
Effective January 1, 2002, the dollar amount established
in Code Section 415(b)(1)(A), which is adjusted for inflation based
on Section 215(i)(2)(A) of the Social Security Act; or
B.
One hundred percent of the member's average compensation
from the City during the three consecutive calendar years during which
he or she was an active member and had the greatest aggregate compensation
from the City, except that for those persons who are members on or
before March 1, 1999, and who are then, or thereafter become, exempt
members and who retire on or after January 1, 1999, the percentage
shall be 92%; and further except that for those persons who first
become members after March 1, 1999, and who then or thereafter become
exempt employees, the percentage shall be 70%; provided, however,
that:
(1)
If retirement allowances are payable in any form other
than on a straight life basis, the determinations as to whether the
foregoing limitation has been satisfied shall be made in accordance
with applicable treasury regulations by adjusting such retirement
allowances so they are equivalent to retirement allowances payable
on a straight life basis.
(2)
If the member has less than 10 years of credited service,
the maximum annual retirement allowance payable on a straight life
basis in respect of a member shall be the applicable maximum annual
amount described above multiplied by a fraction, the numerator of
which is the number of years of his or her credited service and the
denominator of which is 10.
(3)
For purposes of this section, there shall not be taken
into account any ancillary benefit which is not directly related to
retirement income benefits, nor any other benefit not required by
Section 415(b)(2) of the Internal Revenue Code, as amended, to be
taken into account for purposes of the limitation on retirement allowances
described in this section.
(4)
If a member should become a member in, or become entitled
to benefits under, another tax-qualified pension, profit-sharing or
savings plan of the City, the Board of Trustees may reduce the retirement
allowance payable in respect of such member under this retirement
system to the extent necessary to prevent disqualification of this
retirement system. In such event, the Board of Trustees shall notify
the member of such reduction and furnish him or her with an explanation
of the same.
(5)
For limitation years beginning on or after July 1,
2007, a member's average compensation shall take into account the
annual limit on compensation under Code Section 401(a)(17) for each
of the member's three calendar years of compensation used in determining
such average compensation.
An eligible domestic relations order ("EDRO")
is a signed domestic relations order issued by a state court which
assigns to an alternate payee(s) the right to receive all or part
of a member's retirement system benefit that is or will become payable
to the member. An alternate payee is a spouse, former spouse, child
or other dependent of a member who is treated as a beneficiary under
the retirement system as a result of the EDRO. The Board of Trustees
may establish EDRO procedures, but in the absence of such procedures,
the Board will determine if a domestic relations order is an EDRO
in accordance with the following:
A.
Board of Trustees' determination. Promptly upon the
receipt of a domestic relations order, the Board will notify the member
and any alternate payee named in the order of such receipt and will
include a copy of this section. Within a reasonable time after receipt
of the order, the Board will make a determination as to whether the
order is an EDRO as defined in MCLA § 38.1701 et seq. and
will notify the member and the alternate payee(s) in writing of the
determination. Notwithstanding any other provision of the retirement
system, the retirement system may make a distribution to an alternate
payee pursuant to an order that the Board of Trustees has determined
to be an EDRO prior to the date the member attains his or her earliest
retirement age, as defined in Code Section 414(p)(4)(B), only if the
EDRO specifically requires the retirement system to make a distribution
prior to such date.
B.
Specific requirements of an EDRO. In order for a domestic
relations order to be an EDRO, it must specifically state all of the
following: (1) the name, last known mailing address (if any) and the
social security number of the member and each alternate payee(s) covered
by the order; (2) the dollar amount or percentage of the benefit to
be paid to each alternate payee, or the manner in which the amount
or percentage is to be determined; (3) the number of payments or period
to which such order applies; and (4) the name of the plan to which
the order applies. The domestic relations order will not be deemed
an EDRO if it requires the retirement system to provide any type or
form of benefit, or any option not already provided for in the system,
or increased benefits determined on the basis of the actuarial value,
or benefits in excess of the member's retirement system benefit, or
payment of benefits to an alternate payee(s) required to be paid to
another alternate payee under another EDRO.
C.
Disputed orders. If there is a question as to whether
or not a domestic relations order is an EDRO, there will be a delay
in any payout to any payee(s), including the member, until the status
is resolved. If the retirement system determines that the order is
not an EDRO, the retirement system shall notify the employee and the
alternate payee(s) of this determination. The notification shall specify
the reasons the order was not determined to be an EDRO. This determination
does not prohibit the employee or the alternate payee(s) or the court
from filing an amended order with the retirement system for redetermination.
D.
Death of alternate payee(s). If an alternate payee(s)
dies before receiving any payment of a benefit pursuant to an EDRO,
that interest reverts to the member.
The City, at any time, can terminate the retirement
system and trust fund in whole or in part in accordance with, and
subject to, state and federal law, this plan, applicable collective
bargaining agreements, consideration of concerns submitted in writing
by a designated representative of a non-bargaining unit of employees,
and the following provisions:
A.
Termination of retirement system. The City can terminate
the retirement system and trust fund by filing written notice of any
such termination with the Board of Trustees and members. If required
by law, such written notice will be provided at least 60 days (or
any other period as may be required by law or regulation) prior to
the date of termination.
B.
Vesting requirement. Upon termination of the retirement
system, or upon termination of the system with respect to a group
of members which constitutes a partial termination of the system,
the accrued benefits of all members with respect to whom the system
is terminated shall, as of the date of termination or partial termination,
as the case may be, become fully vested and nonforfeitable to the
extent then funded.
C.
Continued administration of retirement system pending
distribution. Upon complete termination of the retirement system,
the Board of Trustees will continue to administer the retirement system
until distribution has been made to the members (which distribution
must occur within a reasonable time after the termination of the system)
with full settlement of all such benefits made by lump sum payments
of the actuarial equivalent of benefits and/or through the purchase
of a group annuity contract or individual annuity contracts to the
extent of trust fund assets.
D.
Allocation of trust fund assets to members, spouses
and beneficiaries. If the retirement system is terminated, the trust
fund will be first used to fund the costs of benefits due members.
E.
Retirement system merger or consolidation. The retirement
system and trust fund may not be merged or consolidated with, nor
may any of its assets or liabilities be transferred to, any other
plan, unless the benefits payable to each member if the retirement
system was terminated immediately after such merger, consolidation
or transfer would be equal to or greater than the benefits to which
such member would have been entitled if this retirement system had
been terminated immediately before such merger, consolidation or transfer.
