[Adopted 6-5-2018[1]]
[1]
Editor's Note: This ordinance also repealed former Art. IV,
Money Purchase Pension Plan, adopted 9-19-2006.
A.
This article is a restatement of the Town of Manchester Money Purchase Pension Ordinances in effect prior to July 1, 2017. Effective July 1, 2017, this Article IV shall be known as the "Defined Contribution Plan." This article supersedes former Article IV, Money Purchase Pension Plan, adopted June 6, 2000.
For purposes of this article, words, terms, and phrases shall have the meaning ascribed to them in Article III, § 70-15, unless otherwise provided in this section:
An employee's base salary, including overtime payments and
any amounts included in Sections 125 and 414(h) of the Internal Revenue
Code, as it may be amended from time to time. Compensation does not
include maintenance payments, lump sum sick leave, special services
pay, accrued vacation/annual leave paid at the time of separation
of employment, sick time pay, or other special payments.
The Defined Contribution Plan as it may be amended and restated
from time to time. Under the Defined Contribution Plan, each participating
employee will have an account established in his or her name, and
contributions to such employee's account will be made by both the
employee and the Town.
The full and partial years of service during which a member contributes to the plan in accordance with § 70-56, or during which such member is employed by the Town but is exempt from making contributions for specific reasons such as a leave of absence. If a member is absent due to qualified military service, such service will be included if a member makes any required contributions within the time period required by applicable law.
A.
Participation.
(1)
An unaffiliated employee hired on or after July 1, 2000, and an employee who is a member of a collective bargaining unit that has an approved agreement to participate in the Defined Contribution Plan, shall, if elected pursuant to § 70-16, participate in the Defined Contribution Plan.
(2)
Unaffiliated members of the Pension Plan hired before July 1, 2000,
(with respect to unaffiliated Board of Education members, the later
of July 1, 2000, or the date the Board of Education approves the participation
of its unaffiliated members in the Defined Contribution Plan), and
employees who are members of the Pension Plan and a member of a collective
bargaining unit that on or before November 1, 2000, have an approved
agreement with the Town to participant in the Defined Contribution
Plan shall have until December 31, 2000, to make a one-time election
to participate in the Defined Contribution Plan by transferring their
Pension Plan balances to the Defined Contribution Plan.
(3)
Other employees hired before July 1, 2000, who are unaffiliated and/or
members of employee groups who enter into an agreement with the Town
to receive benefits under the Defined Contribution Plan after November
1, 2000, but prior to July 1, 2002, shall have two months following
the effective date of such agreement to make a one-time election to
participate in the Defined Contribution Plan by transferring their
Pension Plan balances to the Defined Contribution Plan. Other employees
hired prior to July 1, 2000, who are members of employee groups who
enter into an agreement with the Town to receive benefits under the
Defined Contribution Plan after July 1, 2002, shall have two months
following the effective date of such agreement to make a one-time
election to participate but shall not be eligible to transfer their
Pension Plan balances to the Defined Contribution Plan.
(4)
Each employee hired on or after July 1, 2004, who is an unaffiliated
employee of the Town or a member of a collective bargaining unit that
has an approved agreement with the Town, other than a public works
employee, and each public works employee hired on or after July 1,
2007, shall participate in the Defined Contribution Plan.
(5)
Each employee who is a police member who was hired on or after March
7, 2017, and who made an irrevocable election not to participate in
Subpart C of the plan, shall participate in the Defined Contribution
Plan.
(6)
Each employee who is a Board of Education unaffiliated employee who
is not eligible to participate in Subpart D of the plan or who is
a Board of Education unaffiliated employee and who is not a grandfathered
unaffiliated employee of the Board of Education, shall participate
in the Defined Contribution Plan.
(7)
Each employee who is a Board of Education custodial/maintenance employee
and who made an irrevocable election not to participate in Subpart
D of the plan, shall participate in the Defined Contribution Plan.
(8)
Each employee who is a Board of Education paraeducator or a Board
of Education tutor who was hired on or after July 1, 2010, shall participate
in the Defined Contribution Plan.
(9)
Each employee who is a Board of Education Building and Grounds Supervisor
hired on or after July 1, 2011, shall participate in the Defined Contribution
Plan.
(10)
Each employee who is a Board of Education secretary or IT employee
who was hired on or after July 1, 2014, and who made an irrevocable
election not to participate in Subpart D of the plan, shall participate
in the Defined Contribution Plan.
(11)
Each employee who is a Board of Education hall monitor who was
hired on or after July 1, 2015, shall participate in the Defined Contribution
Plan.
(12)
Each employee who is a Board of Education school nurse who was
hired on or after July 1, 2016, shall participate in the Defined Contribution
Plan.
(13)
Each employee who is a Board of Education food service employee,
hired on or after September 1, 2016, shall participate in the Defined
Contribution Plan.
B.
Entry date.
(1)
The entry date for unaffiliated members hired on or after July 1,
2000, and new employees who are members of a collective bargaining
unit that have an approved agreement to participate in the Defined
Contribution Plan, shall be the first day of the month coinciding
with or next following the employee's date of hire.
A.
Election before July 1, 2000.
(1)
Members of the Pension Plan electing to participate in the Defined
Contribution Plan will have the value of their accrued benefit under
the Pension Plan actuarially adjusted to a lump sum benefit. The lump
sum benefit will be transferred to the employee's account in the Defined
Contribution Plan. The lump sum will be determined based upon the
employee's accrued benefit in the Pension Plan, the employee's normal
retirement date, and the Internal Revenue Service lump sum interest
rates in effect at the time of the conversion. If the employee later
becomes eligible for unreduced benefits under the Rule of 80 Retirement
or subsidized early retirement benefits, the actuarial equivalent
of any residual benefits will be paid as a lump sum from the Pension
Plan upon retirement based upon the Internal Revenue Service lump
sum interest rates at the time of retirement.
(2)
If a member who was a former member of the Pension Plan who elected
to participate in the Defined Contribution Plan elects to retire under
the special early retirement incentive program described in Section
5.5 of the Town of Manchester Defined Contribution Plan, and the sum
of such member's age and service at retirement is equal to 77 or greater,
such member shall be entitled to have the actuarial equivalent of
any residual benefits under the Pension Plan paid to the Defined Contribution
Plan in a lump sum, the amount of which shall be determined based
on the Internal Revenue Service lump sum interest rates as of the
member's date of retirement.
B.
Election After December 31, 2001. The conversion method set forth in Subsection A will be used only for employees participating in the Pension Plan who elect to participate in the Defined Contribution Plan prior to July 1, 2002, and have their benefits from the Pension Plan transferred to the plan. If an employee does not meet such requirements by July 1, 2002, his or her accrued benefit under the Pension Plan will be frozen as of the date on which the employee elects to commence participation in the plan, calculated based on service and average salary as of such date. When such employee either terminates employment or retires, he or she will have the option to receive the frozen benefit either in the form of a lump sum distribution or such other method of distribution as permitted by the Pension Plan. Such employee shall not be eligible for the disability benefits set forth in § 70-21 of the Pension Plan Ordinance.
[Amended 3-2-2021]
A.
Mandatory contributions. Each employee participating in the Defined
Contribution Plan shall be required to authorize the Town to deduct
from and allocate wages to the employee's Defined Contribution
Plan account each payroll deferral period an amount equal to 6% of
wages. Pursuant to the provisions of Section 414(h)(2) of the Federal
Internal Revenue Code, the Town shall pick up and pay the contributions
payable by the Town. The contributions so picked up shall be treated
as Town contributions for purposes of determining the amounts of federal
income taxes to withhold from each employee's salary. For each
employee participating in the Defined Contribution Plan, the Town
shall be required to contribute 6% of the employee's compensation
each payroll deferral period to the employee's Defined Contribution
Plan account.
B.
Voluntary after-tax contribution. Each employee participating in
the Defined Contribution Plan that is also subject to the collective
bargaining agreement between the Town of Manchester and Teamsters
Local 671 shall be permitted to authorize the Town to deduct from
and allocate wages to the employee's Defined Contribution Plan
account each payroll deferral period an amount up to 3% of wages.
Contributions made pursuant to this section shall be made on an after-tax
basis. Such authorization shall be made in the form and manner prescribed
by the Town, which is subject to change at any time and from time
to time.
A.
Vesting schedule.
(1)
The vesting schedule for Town contributions to the Defined Contribution
Plan shall be as follows:
|
Years of Service
|
Vesting Percentage
|
|---|---|
|
Less than 1
|
0%
|
|
1 or more but less than 2
|
20%
|
|
2 or more but less than 3
|
40%
|
|
3 or more but less than 4
|
60%
|
|
4 or more but less than 5
|
80%
|
|
5 or more
|
100%
|
(2)
Notwithstanding the foregoing, no employee shall be vested in any
percentage of the Town contributions and earnings attributable thereto
if his or her record of service with the Town includes any malfeasance
or misfeasance.
(3)
Employees shall be one-hundred-percent vested in all employee contributions
at all times.
B.
Distributions. Distributions from the vested portion of an employee's
accounts in the Defined Contribution Plan shall be made as provided
in the Defined Contribution Plan in the form of a lump sum payment
or in the form of an annuity purchased with the participating employee's
account balance under the Defined Contribution Plan.
A.
Authority of the Pension Board. Authority of the Pension Board. The
Pension Board shall be the administrator and shall have the authority
to adopt a plan document that meets and carries out the provisions
of these ordinances.
B.
Right to amend. The right of the Town to amend or repeal the provisions
of these Defined Contribution Plan Ordinances at any time and from
time to time, and to alter or vary the rate or amount of contributions
required to the Defined Contribution Plan, or the benefits payable,
or the method of computation of any Defined Contribution Plan payments
at any time, is expressly reserved and the right of any employee or
former employee of the Town against the Town in any way arising out
of the provisions of these Defined Contribution Plan Ordinances shall
be limited to the employee's vested account balance in the Defined
Contribution Plan.
