§ 2.28.070. Composition; expenditures.  


Latest version.
  • (a)

    The fund shall consist of all moneys received from contributions made by employees, refunds made by employees on re-employment, investments, earnings and moneys paid into such fund by the city.

    (b)

    All benefits paid from the retirement plan shall be distributed in accordance with the requirements of Section 401(a)(9) of the Internal Revenue Code and the regulations under that section, as applicable to a governmental plan within the meaning of Section 414(d) of the Internal Revenue Code. This is being adopted in accordance with Section 823 of the Pension Protection Act of 2006. In order to meet these requirements, the retirement plan shall be administered in accordance with the following provisions:

    (1)

    Distribution of a member's benefit must begin by the required beginning date, which is the later of the April 1st following the calendar year in which a participant attains age 70 ½ or the April 1st of the year following the calendar year in which the member retires. If a member fails to apply for retirement benefits by the later of either of those dates, the Board shall begin distribution of the monthly benefit as required by this rule in the form provided in Sections 2.28.120 or 2.28.210;

    (2)

    The member's entire interest must be distributed over the member's life or the lives of the member and a designated beneficiary, or over a period not extending beyond the life expectancy of the member or of the member and a designated beneficiary. The life expectancy of a member or the member's spouse may not be recalculated after the benefits commence;

    (3)

    The retirement system, pursuant to a qualified domestic relations order, may establish separate benefits for a member and nonmember;

    (4)

    If a member dies before the required distribution of the member's benefits has begun, the member's entire interest must be either:

    (A)

    distributed (in accordance with federal regulations) over the life or life expectancy of the designated beneficiary, with the distributions beginning no later than December 31st of the calendar year immediately following the calendar year in which the member died; or

    (B)

    distributed within five years of the member's death;

    (5)

    If a member dies after the required distribution of benefits has begun, the remaining portion of the member's interest must be distributed at least as rapidly as under the method of distribution before the member's death;

    (6)

    The amount of an annuity paid to a member's beneficiary may not exceed the maximum determined under the incidental death benefit requirement of Section 401(a)(9)(G) of the Internal Revenue Code, and the minimum distribution incidental benefit rule under Treasury Regulation Section 1.401(a)(9)-6, Q&A-2;

    (7)

    The death and disability benefits provided by the retirement system are limited by the incidental benefit rule set forth in Section 401(a)(9)(G) of the Internal Revenue Code and Treasury Regulation Section 1.401-1(b)(1)(i) or any successor regulation thereto. As a result, the total death or disability benefits payable may not exceed 25% of the cost of all of the members' benefits received from the retirement system; and

    (8)

    Notwithstanding the other provisions of this rule or the provisions of the Treasury Regulations, benefit options may continue so long as the option satisfies Section 401(a)(9) of the Internal Revenue Code based on a reasonable and good faith interpretation of that section.

    (c)

    The board is authorized to expend funds for the following purposes: clerical and secretarial work, stationery, supplies and printing; and professional services of actuaries, accountants, physicians and attorneys, the foregoing list not being intended to limit or exclude expenditures for other proper purposes.

    (d)

    The board may not engage in a transaction prohibited by Section 503(b) of the Internal Revenue Code.

    (e)

    Effective as of July 1, 1989, the Board will determine the amount of any benefit that is determined on the basis of actuarial assumptions using assumptions adopted by the Board by rule; such benefits will not be subject to employer discretion. The Board rules adopted for this purpose are incorporated into this section as part of the plan document.

(Ord. No. 44-812 § 7; Ord. No. 48-344, § 1, 6-16-09)