2014-25 ORDINANCE NO. 2014-25
AN ORDINANCE AMENDING CERTAIN SECTIONS OF ARTICLE III, CHAPTER
66 OF THE CODE OF THE CITY OF FAIRFAX, VIRGINIA, PERTAINING TO THE
RETIREMENT PLAN FOR PUBLIC SAFETY EMPLOYEES
BE IT ORDAINED, by the City Council of the City of Fairfax, that the following
specified Sections and Subsections of Article III, Chapter 66, of the Code of the City of
Fairfax, Virginia, are hereby amended to read in their entirety as follows:
Sec. 66-281. Definitions.
For the purposes of this article, the following words and phrases shall have the meanings
respectively ascribed to them by this section, unless otherwise required by the context:
Accumulated contributions means, for any participant as of any date, the total obtained by
accumulating each individual contribution of the participant, with interest from the July 1 next
following the date such contribution was made to the first day of the month of the date as of
which the computation is made. The interest to be credited to each participant's contributions
for each 12-month period commencing on July 1 and ending on the following June 30 shall be
determined by the committee each year on the basis of the actual net yield of the fund for such
period, provided, however, that in no event shall the rate of interest credited for any such 12-
month period be less than four percent per annum. Notwithstanding the fore. •in. -ff-ctiv-
1 1 2014 h- intere s be cr-dited to -. •artici.an ' on ri lions for each 12-month
eriod commencine on July 1 and endin• on the foll•win! June 30 shall be equal to three
percent per annum.
Actuarial equivalent means a benefit with a reserve equal to the reserve of another benefit.
Average final compensation means for any participant, whose initial date of employment for
the city is prior to July 1, 2014, as of any date, the average annual compensation of the
participant during the three consecutive years of his credited service during which his
compensation was highest or during the entire period of his credited service if less than three
years. In the case of an_.artici.an who - initial 1.t- .f -m.l. m-nt for h- ci i on or
after July 1, 2014, as of any date, the average annual compensation of the participant during
he five c•nsec ive ear of his credite. ervic- d rin• whi h hi c•m.-n ation was hi h-st
or during the entire period of his credited service if les than five years.
Beneficiary means any person who is receiving or designated to receive a plan benefit by
reason of the plan participation of another person.
City means the City of Fairfax, Virginia, or any municipal corporation successor thereto, or
the authority of the city having the power to appoint an employee to office or employment.
Committee means the administrative committee provided for in division 9 of this article.
Compensation means, for any eligible employee, the full base compensation paid to him by
the city excluding overtime or other compensation not a part of the set scale for an established
normal working period and excluding contributions by the city to any employee benefit plan
other than this plan. Compensation shall include, without duplication, contributions picked up
under subsection 66-432(c) on behalf of the eligible employee and shall include any salary
deferrals made to plans maintained by the city pursuant to sections 125 or 132(f) of the IRS
Code, but shall not include contributions by the city pursuant to section 66-433. In cases
where compensation includes maintenance or other perquisites, the committee shall fix the
value of that part of the compensation not paid in money. Notwithstanding the foregoing,
"compensation" shall not include (1) any item not specified in section 1.415-2(d)(2) of the
treasury regulations or (2) any item which is listed in section 1.415-2(d)(3) of the Treasury
regulations. Furthermore, "compensation" shall include "differential pay" within the
meaning of section 414(u)(12) of the IRS Code paid to a participant performing "qualified
military service" within the meaning of section 414(u)(5) of the IRS Code.
In addition to other applicable limitations set forth in the plan and notwithstanding any other
provision of the plan to the contrary, for plan years beginning on or after January 1, 1994, the
annual compensation for each employee taken into account under the plan shall not exceed
the OBRA '93 annual compensation limit. The OBRA '93 annual compensation limit is
$150,000.00, as adjusted by the secretary of the treasury for increases in the cost of living in
accordance with section 401(a)(17)(b) of the IRS Code. The cost-of-living adjustment in
effect for a calendar year applies to any period, not exceeding 12 months, over which
compensation is determined (the determination period) beginning in such calendar year. If a
determination period consists of fewer than 12 months, the OBRA '93 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.
For plan years beginning on or after January 1, 1994, any reference in this plan to the
limitation under section 401(a)(17) of the IRS Code shall mean the OBRA '93 annual
compensation limit set forth in this provision.
If compensation for any prior determination period is taken into account in determining a
participant'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 $150,000.00.
The annual compensation of each participant taken into account in determining benefit
accruals for any plan year beginning after December 31, 2001, shall not exceed $200,000.00,
as adjusted for cost-of-living increases in accordance with section 401(a)(17)(b) of the IRS
Code. Annual compensation means compensation during the plan year or the determination
period. The cost-of-living adjustment in effect for a calendar year applies to annual
compensation for the determination period that begins with or within such calendar year.
Contingent annuitant means the person designated by a participant to receive retirement
benefits, after the death of the participant, under the joint and last survivor option of division
5 of this article.
Contributions means the payments to the fund by the city and/or the participants as provided
for in this article.
Credited service means, for any participant as of any date, the period or periods prior thereto
during which he shall have been in the full-time employ of the city as an eligible employee,
exclusive of:
(a) Any period of employment prior to his date of becoming a participant if he did not
become a participant within 90 days after his earliest opportunity to do so; and
(b) Subject to subsection (f) below, any period of employment prior to the date of any
withdrawal of the participant's accumulated contributions in accordance with the provisions of
division 7 of this article.
In addition to his period or periods of full-time employment, the credited service of a
participant shall include any period of his:
(c) Vacation, or any other absence from employment for which the participant shall
receive full compensation;
(d) Leave of absence without pay specifically authorized by the city under general rules
uniformly applicable to all employees similarly situated; and
(e) Service in the armed forces of the United States, provided the participant entered such
service directly from the employ of the city, was honorably discharged from such service, and
was reemployed by the city during a period when his right to reemployment with the city was
protected by law, to the extent credit for service is required to be given pursuant to section
414(u) of the IRS Code and the Uniformed Services Employment and Reemployment Rights
Act.
(f) Service that was previously cancelled in accordance with section 66-407, or not
credited during a period of time classified by the city as "leave without pay," and reinstated
effective as of the earlier of the date of the participant's cessation of the receipt of
compensation following termination of employment or completion of repayment of
withdrawn contributions, under the following conditions:
1. The participant has at least one month of"qualified 2004 service" within the meaning
of this section or section 66-41.
2. The participant has repaid all or a portion of the contributions withdrawn plus interest
on such contributions as determined in subparagraph 3.
3. Interest has been charged on the participant's previously withdrawn contributions at an
annual rate of 5.0 percent or such other rate as the committee may subsequently establish for
these purposes, compounded biweekly. The interest has been charged from the date of
withdrawal to the earlier of the participant's termination of employment or completion of the
repayment.
4. Redeposit of the withdrawn contributions, plus interest, has been made on or before
the later of the following two dates:
(A) Five years after the participant has been reemployed by the city, and
(B) December 31, 2009.
5. The service to be reinstated is not eligible for and has not been credited under another
retirement system (with the exception of the Virginia Retirement System).
6. The participant has completed and executed in a timely manner any and all forms the
committee deems necessary for the reasonable operation and administration of these service
reinstatement provisions.
7. The participant has elected to repay the withdrawn contributions in one of the
following forms:
(A) A direct rollover from another employer's qualified retirement plan or tax deferred
annuity plan of the total amount of the withdrawn contributions, plus interest;
(B) A direct rollover or direct transfer from an eligible deferred compensation plan
established pursuant to section 457(b) of the IRS Code of the total amount of the withdrawn
contributions, plus interest; or
(C) Pretax payments pursuant to one or more binding, irrevocable payroll deduction
authorizations between the city and the participant. If the participant enters into such an
authorization, the participant contributions will be picked up by the city, as described in
section 414(h)(2) of the IRS Code and deducted from the pay of the contributing participant
as a salary reduction contribution and paid by the city to the trustee with reasonable
promptness.
8. If the participant elects to repay the withdrawn contributions by pre-tax payments
pursuant to subsection (f)7.(C), the minimum payment per pay period shall be $20.00.
Furthermore, if the participant ceases to receive compensation from the city following
termination of employment prior to completing the payment of the withdrawn contributions,
the service credit awarded shall be prorated based on the payments made as of the date the
participant ceases to receive compensation following termination of employment.
Solely for purposes of calculating a benefit (other than a disability retirement allowance)
becoming effective April 1, 1983,or later, the credited service of a participant shall also
include his completed months of unused sick leave at time of termination of employment,
based on 173 hours of unused sick leave constituting one completed month; provided, in no
event shall the inclusion of unused sick leave as credited service affect the calculation of the
participant's compensation or average final compensation.
Eligible employee means any person regularly employed by the city on a full-time basis as a
member of the police department with police powers (except an animal control officer with
police powers) or as a salaried member of the fire department (fire service uniform
personnel), other than a temporary employee, within the meaning of section 66-2 of the City
Code. Eligible employee also means any former eligible employee who, as a result of a
disability incurred while an eligible employee, is no longer able to continue in employment
described in the preceding sentence and is now regularly employed by the city on a full-time
basis, other than as a temporary employee in other employment.
Fund means the trust fund created under the terms of the trust agreement, consisting of the
cash, securities and other assets held by the trustee pursuant to the terms of the plan.
Inflation index means the Consumer Price Index for All Urban Consumers, All Items, U.S.
City Average, as published by the Bureau of Labor Statistics of the United States Department
of Labor.
IRS Code means the Internal Revenue Code of 1986, as amended from time to time.
Participant means an eligible employee or a former eligible employee who has become
eligible to participate in the plan as provided in division 2 of this article, and is prospectively
entitled to future benefits under the terms of the plan.
Plan means the retirement plan for police and fire employees of the city as now contained in
this article or as duly amended.
Plan year means the 12-month period ending on the last day of June.
Qualified 2004 service (for the purposes of the January 1, 2004, amendments) means credited
service earned on or after December 1, 2003, in direct connection with employment as an
eligible employee of the city.
Reserve means the present value of all payments to be made on account of any plan benefit,
based upon such reasonable tables of experience and interest as the committee shall adopt,
from time to time, after consulting with its actuary.
Social Security full retirement age means the age at which there is no reduction in Social
Security benefits based upon the following table:
Year Born Age for Full Benefits
1937 or earlier 65 yrs.
1938 65 yrs., 2 mos.
1939 65 yrs., 4 mos.
1940 65 yrs., 6 mos.
1941 65 yrs., 8 mos.
1942 65 yrs., 10 mos.
1943-1954 66 yrs.
1955 66 yrs., 2 mos.
1956 66 yrs., 4 mos.
1957 66 yrs., 6 mos.
1958 66 yrs., 8 mos.
1959 66 yrs., 10 mos.
1960 or later 67 yrs.
Totally and permanently disabled means as set forth in subsection 66-323(b).
Trust agreement means the agreement entered into between the city and the trustee pertaining
to the administration of the fund.
Trustee means the financial institution appointed by council to hold in trust and invest the
fund, as provided for in division 8, which may, from time to time, be acting in that capacity
under the terms of the trust agreement.
Year of credited service means a plan year during which an eligible employee is employed on
a substantially full-time basis and makes the contributions required to be made pursuant to
section 66-432 for the entire year or otherwise receives credit for credited service pursuant to
this section 66-281. Notwithstanding the foregoing, for purposes of determining the amount
of a participant's retirement benefit pursuant to sections 66-321 and 66-323, a participant shall
receive credit for one-twelfth of a year of credited service for each month during which the
participant was an eligible employee for the entire month, was employed on a substantially
full time basis and made the contributions required to be made pursuant to section 66-432 for
the entire month or otherwise receives credit for credited service pursuant to this section 66-
281.
(Code 1978, § 17-151; Ord. No. 2002-11, 6-11-2002; Ord. No. 2003-26, 12-9-2003; Ord. No.
2004-21, 10-12-2004; Ord. No. 2009-26, 10-13-2009; Ord. No. 2012-17, 10-9-2012; Ord.
No. , )
Cross reference—Definitions generally, § 1-2.
Sec. 66-321. Normal retirement.
The normal retirement date of a participant who became an eligible employee on or before
March 31, 1983, shall be the first day of the month coinciding with or next following the
earlier of the date on which the participant attains the age of 50, provided he has completed
five years of credited service, or the date on which the participant completes 20 years of
credited service. The normal retirement date of a participant who became an eligible
employee on or after April 1, 1983, shall be the first day of the month coinciding with or next
following the earlier of the date on which the participant attains the age of 55, provided he has
completed five years of credited service, or the date on which the participant completes 25
years of credited service. The normal retirement date of a participant who became an eli•ible
emplo ee on or after J 1 1 2014. shall be the first d•v of the month coincidin• with or next
following,the earlier of the date on which the participant attains the aae of 57. .rovided he has
completed seven ears of credited service or the date on which the participant completes 25
years of credited service.
(Code 1978, § 17-171)
Sec. 66-323. Disability retirement.
(a) (1) A participant whose ini i.l . .t- of e o s-nt or h- • • slier o 1 1
2014 and who becomes totally and permanently disabled after the completion of five or more
years of credited service, may retire from the employment of the city on the first day of any
month thereafter prior to:
(1A) In the case of a participant who became an eligible employee on or before
March 31, 1983, the earlier of the date on which he attains the age of 60, or completes 30
years of credited service; or
(213) In the case of a participant who became an eligible employee on or after April
1, 1983, his retirement date.
2 A .a ici..nt who - ini i.1 • . - of -mils -n for h- i i as-r ne I
2014 and who becomes totally an• .erman-ntl disabled after the completion of seven or
more years of credited service. m.v retire from the emnl•vment of the city on the first da of
any month thereafter prior to his normal retirement date.
(b) The committee shall determine whether a participant is totally and permanently
disabled, which, for purposes of this section, shall mean that the participant is unable to work
in the position occupied by him, by reason of personal disease or injury.
(c) Upon receiving a participant's written application for disability benefits, the committee
shall require the participant to submit, from a physician of the participant's choice, a written
report of findings and recommendations. The committee shall then select a physician of its
choice and require the participant to submit to a medical examination. In the event that there
is no clear preponderance of medical evidence from the above two physicians, a third
physician will be selected by the original two physicians, who will also examine the
participant and submit a written report of findings and recommendations. The committee may
waive any examination required by this section for justifiable causes, but in no event shall any
participant be granted disability benefits without submitting to at least one medical
examination. Failure of any participant to submit to medical examination as required by this
section will result in the denial of the participant's disability benefit.
(d) In making a determination under this section, the committee may consider whether a
participant qualifies for disability retirement benefits under the provisions of the Virginia
Retirement System, but such qualification shall not, by itself, be proof of a participant's
eligibility under this section.
(e) Benefits shall not be payable under this section for any disability resulting from a pre-
existing condition which was discovered during a participant's employment physical
examination, and for which the participant executed a waiver of eligibility for benefits.
(f) For purposes of this section 66-323, a participant who becomes disabled while
performing "qualified military service," within the meaning of section 414(u)(5) of the IRS
Code, will be deemed to have incurred the disability before retirement from city employment
and such a disability will be deemed to be not duty-related for purposes of section 66-343.
(Code 1978, § 17-173; Ord. No. , )
Sec. 66-347. Benefit redetermination after retirement.
(a) Effective July 1, 1983, and beginning with the July 1 which is at least four full months
after the effective date of a monthly benefit, the amount of the benefit shall be redetermined
effective each July 1, and such redetermined amount shall be payable for the ensuing year.
The term "the amount of the benefit otherwise payable" means the monthly amount of benefit
which would be payable disregarding these provisions redetermining benefit amounts after
retirement; provided, for a retirement effective before April 1, 1983, such monthly amount
shall not be less than the monthly amount in effect as of July 1, 1983. In no event shall a
redetermined benefit amount ever be less than the amount of the benefit otherwise payable.
Such redetermined amount shall be the amount of the benefit otherwise payable increased by
the lesser of the percents in subsections (1), (2), (3),(4) or (5) as applicable as follows:
(1) Five percent annually, compounded annually, for the number of years, and
fraction of a year measured in completed months, from the effective date of the benefit, or
April 1, 1983, if later, to the April 1 before the current July; or
(2) For a participant who became an eligible employee on or before March 31,
1983, the percentage increase in the inflation index for the period from the month next
preceding the effective date of the benefit, or March 1983 if later, to the March next preceding
the current July; or
(3) For a participant who became an eligible employee on or after April 1, 1983,
and for benefit redeterminations effective before January 1, 2004, one-half of the percentage
increase in the inflation index for the period from the month next preceding the effective date
of the benefit to the March next preceding the current July.
(4) For a participant who became an eligible employee on or after April 1, 1983,
and who retired prior to April 1, 2003 and for benefit redeterminations effective on or after
January 1, 2004, one-half the percentage increase in the inflation index for the period from the
month next preceding the effective date of the benefit to March 2003; plus the percentage
increase in the inflation index for the period March 2003 to the March next preceding the
current July.
(5) For a participant who became an eligible employee on or after April 1, 1983,
and who retired on or after April 1, 2003, the percentage increase in the inflation index for the
period from the month next preceding the effective date of the benefit to the March next
preceding the current July.
(• For a pa ici•ant whose initial date of em•l•vment for the city as an eligible emalo ee
is on or after July 1, 2014, such redetermined amount shall be the amount of the benefit
• herwis- •a .b1- in re.s-• • he 1- ser If he .-r -nt.'- i r-. - in th- In . ion In•-x f.r
the period from the month next •recedin. the effective date of the benefit to the March next
preceding the current July, or three percent.
(Code 1978, § 17-187; Ord. No. 2003-26. 12-9-2003)
Sec. 66-387. Death before retirement.
(a)
(1) If a participant whose initial d. - • - • .lo m-n fir h- i - _ -li'i•le em..i -- i
prior to July 1, 2014 with five or more years of credited service, including credited service for
the year immediately preceding his death, dies before retirement and while in city
employment, the applicable benefits provided in subsections (b), (c), (d) and (f) in this section
shall be paid, subject to section 66-345. For purposes of this section 66-387, a participant
who dies while performing "qualified military service," within the meaning of section
414(u)(5) of the IRS Code, will be deemed to have died while in city employment.
2 If a sarti i•an wh•s- initial •.t- of-m.l• m-n for h- it .s . -li'i•l- -mile -- is
.ft-r June 30 2114 with sev-n or mere -.r of cr-dited -rvi - inclu•in' cr-dited ervi -
for the wear immediatel prec-din' his death dies before retirement and while in cit
-mslo ment he as•li . 91- •-n-fit •rovi•e• in ub - tie • • . d in his - lion
shall be paid, subject to section 66-345. For .0 •oses of this section 66-387. a nartici•ant
who die whi - •erformin. ". lifi-• iii . -rvi - " within h- m-. ink of - ion
4 4 u of the IR od- will be •e-m-• • h.v- •i-• whil- in i -mole m-nt
(b) A participant's surviving spouse, if married to the participant at least the one year
immediately preceding his death, shall receive a monthly allowance computed in the same
manner in all respects as if such participant had (i) retired on the date of his death with
entitlement to an allowance provided for in section 66-321 or section 66-322, whichever is
applicable, (ii) elected option 1 with 100 percent continuation to the contingent annuitant
provided for in section 66-366 and (iii) nominated such spouse as contingent annuitant. Such
spouse allowance shall not be less than 15 percent of the deceased participant's average final
compensation at time of death. If such spouse had not attained age 40 at the time of the
participant's death, such spouse allowance shall be payable for the remaining life of such
spouse, but in no event for more than 120 months.
(c) While a spouse allowance is payable as a result of a participant's death while in city
employment, his dependent child or dependent children shall each receive a monthly
allowance of ten percent of such participant's average final compensation at time of death;
provided, while there are three or more such dependent children, each dependent child shall
receive an allowance of an equal share of 25 percent of such average final compensation.
Upon a child ceasing to be a dependent child, his allowance shall terminate, and there shall be
a redetermination of the amounts payable to any remaining dependent children.
(d) While a spouse allowance is not payable as a result of a participant's death while in
city employment, his dependent child or dependent children shall each receive a monthly
allowance of 20 percent of such participant's average final compensation at time of death;
provided, while there are three or more such dependent children, each dependent child shall
receive an allowance of an equal share of 50 percent of such average final compensation.
Upon a child ceasing to be a dependent child, his allowance shall terminate, and there shall be
a redetermination of the amounts payable to any remaining dependent children.
(e) The term "dependent child" means a child until his death or his marriage or his
attainment of age 23 years, whichever occurs first; provided however, that the age 23
maximum shall be extended for any child who has been deemed physically or mentally
incompetent by a state court of competent jurisdiction (or by the plan), for as long as such
incompetency exists.
(f) If, at the time of such participant's death while in city employment, there is neither a
spouse to whom the participant has been married for at least one year preceding his death nor
a dependent child, each dependent parent shall receive a monthly allowance of 20 percent of
such average final compensation; provided, the plan finds that such parent was dependent
upon such participant for at least 30 percent of his financial support at time of death.
(g) In the event no allowance is payable under subsections (a) through (f) of this section
on account of the death of a participant or that all the allowances provided for in subsections
(a) through (f) of this section, payable on account of the death of a participant, terminate
before there has been paid an aggregate amount equal to his accumulated contributions
standing to his credit in the plan at the time of his death, the excess of such accumulated
contributions over such aggregate amount of allowance payments, if any, shall be paid to such
beneficiary as he shall have nominated by written designation duly executed and filed with
the plan. If there be no such designated beneficiary surviving at termination, such excess shall
be paid to the participant's estate.
(Code 1978, § 17-202; Ord. No. 2002-11, 6-11-2002; Ord. No. , )
Sec. 66-407. Refund of accumulated contributions.
In the event of the termination of a participant's employment with the city, other than by
retirement or death, or, in the case of a participant who has completed fewer than five years of
credited service,is not eligible to receive a deferred retirement allowance pursuant to section
66-408, in the event of the termination of his status as an eligible employee, he may elect to
receive in a lump sum a payment of his accumulated contributions at date of such termination
of employment. Any such payment shall cancel any rights of the participant to receive a
deferred monthly retirement allowance under the provisions of section 66-408, and shall
cancel any period of credited service previously credited to the participant.
(Code 1978, § 17-212)
Sec. 66-408. Deferred retirement allowance.
(a) Subject to the provisions of section 66-411, in the event of the termination of a
participant's employment with the city, by a participant whose initial date of em.lo ment for
he ci as an eligible employee is prior to July 1, 2014, other than by death, prior to his
retirement hereunder but after he has completed five or more years of credited service, there
shall be paid to such participant, a monthly retirement allowance determined as hereinbelow
provided. Subject to the provisions of section 66-411, in the event of the termination of
em.l• men with the ci • a ici..n wh• - ini i•1 • •t- •f -m. • en or th- i .
eli'i.le em•lo ee i after ne 0 2014 • h-r h.n • d-. h_.ri•r • i r-tir- 1- her- .n•er
but .fter he ha •m.let-• even ar mor -•r •f r-•i -• -rvi - ther h.11 •- ••i• • . h
participant, a monthly retirement allowance determined as hereinbelow provided. The
monthly allowance shall commence at the election of the participant, on the first day of any
month coincident with or following the later of his date of termination of employment or his
attainment of his normal retirement date. Payment of the retirement allowance shall continue
on the first day of each month thereafter during his lifetime; provided, however, that any
participant shall have the right, at any time after termination of employment and prior to the
commencement of payment of a deferred retirement allowance, to receive in a lump sum his
accumulated contributions as of the date such payment is requested, but such payment shall
terminate the participant's rights to a deferred retirement allowance hereunder, and shall
cancel any period of credited service previously credited to him. In the case of a participant
who elected to reinstate service credit as provided for in subsection (f) of the definition of
"credited service" in section 66-281, the requirement of five or seven years of credited service
stated above shall be waived.
(b) The amount of the monthly retirement allowance payable to an eligible participant
under the provisions of this section shall be determined in the same manner as provided in
section 66-341, except that credited service and average final compensation shall be
determined as of the date of the participant's termination of employment.
(c) Any participant becoming entitled to an allowance under the provisions of this section
shall be entitled to elect, at the time of commencement of such allowance, to have his
allowance paid under option 1 or option 2 (if applicable) of section 66-366.
(Code 1978, § 17-213; Ord. No. 2004-21, 10-12-2004)
Sec. 66-472. Termination of plan.
(a) The city expects to continue the plan indefinitely. However, the city reserves the right
to terminate the plan at any time by action of council. For the purposes of this section, a
complete discontinuation of the city's contributions shall constitute termination of the plan. If
the city terminates the plan, or it is otherwise terminated, the rights of the then participants to
benefits then accrued shall be nonforfeitable to the extent such benefits are then funded and
the trustee shall continue to administer the fund as instructed by the committee in accordance
with the provisions of this article, and the expenses of the trustee shall be paid out of the
assets then remaining in the fund.
(b) In the event of termination of the plan as provided in this section, the fund shall be
administered for the sole benefit of the then participants, any contingent annuitants then
receiving benefits in accordance with division 5 or division 6 of this article, and any
beneficiaries or contingent annuitants entitled to receive future benefits in accordance with
division 5 or division 6 of this article.
(c) Subject to the provisions of subsection (d) of this section, in the event of the
termination of the plan the fund shall be allocated by the committee in an equitable manner,
subject to the approval of the Internal Revenue Service, to provide benefits for persons
described in subsection (b) of this section in accordance with the provisions of the plan but
based upon reserves as of the date of termination of the plan and in the following order:
(1) First, for the benefit of all participants, to the extent of their accumulated contributions
less any retirement allowance payments already received, other than payments of a disability
retirement allowance prior to the participant's attainment of his normal retirement age. If the
fund is insufficient to make this allocation in full, the city shall make an additional
contribution to increase the fund to the necessary amount;
(2) If any balance of the fund remains after the allocations provided for in subsection
(c)(1) of this section, then for the benefit of any participants or contingent annuitants who are
in receipt of retirement allowances under the plan and any participants who have not yet
retired but either have attained the age of 50 provided they have completed five years of
credited service or completed 25 years of credited service,have met the requirements for a
normal retirement allowance pursuant to section 66-321, to the extent of any excess of the
then reserves for their respective retirement allowances, or the retirement allowances to which
they would have been entitled if they had retired on the date of termination of the plan, over
their respective allocations under subsection (c)(1) of this section. If the balance remaining in
the fund after the allocations under subsection (c)(1) of this section is insufficient to permit
the allocation in full of the amounts provided for under this subsection, the allocation of the
fund under this subsection among the distributees entitled thereto shall be in proportion to the
respective individual allocations to which they would otherwise have been entitled;
(3) If any balance of the fund remains after the allocations provided for in subsections
(c)(1) and (2) of this section, then for the benefit of all participants other than those referred to
in subsection (c)(2) of this section, to the extent of any excess of the then reserves for their
respective accrued retirement allowances over their respective allocations under subsection
(c)(1) of this section. If the balance remaining in the fund after the allocations under
subsections (c)(1) and (c)(2) of this section is insufficient to permit the allocation in full of the
amounts provided for under this subsection, the allocation of the fund under this subsection
among the distributees entitled thereto shall be in proportion to the respective individual
allocations to which they would otherwise have been entitled;
(4) If any balance of the fund remains after the allocations provided for in subsections
(c)(1), (2) and (3) of this section, as certified by a professionally qualified actuary selected by
council, then and not otherwise the trustee shall return such balance to the city.
(d) The allocation of the fund provided for in this section may be carried out, as
determined by the committee, through the continuance of the fund or the fund may be
liquidated at any time and insurance company contracts purchased to provide the benefits
determined in accordance with this section, or the fund may be distributed in lump sum
payments to the persons entitled to such benefits, or a combination of such methods may be
employed.
(e) Restrictions.
(1) The foregoing provisions to the contrary notwithstanding, upon the occurrence of the
conditions described in subsection (e)(2) of this section, the city's contributions which are
used for the benefit of any employee who is among the 25 highest paid employees of the city
at the time the plan was established and whose anticipated annual retirement allowance at his
normal retirement date would exceed $1,500.00 shall be restricted in accordance with
subsection (e)(3) of this section.
(2) The restrictions described in subsection(e)(3) of this section become applicable if:
a. The benefits of an employee described in subsection (e)(1) of this section become
payable within ten years after the establishment of the plan; or
b. The benefits of an employee described in subsection (e)(1) of this section become
payable after the plan has been in effect for ten years, and the full current costs of the plan for
the first ten years have not been funded.
In the case of an employee described in subsection (e)(2)a. of this section, the restrictions will
remain applicable until the plan has been in effect for ten years, but if at that time the full
current costs have been funded the restrictions will no longer apply to the benefits payable to
such an employee. In the case of an employee described in subsections (e)(2)a. or b. of this
section, if at the end of the first ten years the full current costs are not met, the restrictions will
continue to apply until the full current costs are funded for the first time.
(3) The city's contributions which may be used for the benefit of an employee described in
subsection (e)(1) of this section shall not exceed the greater of$20,000.00 or 20 percent of the
first $50,000.00 of the average annual compensation of such employee over the last five years
multiplied by the number of years between the date of the establishment of the plan and:
a. The date of the termination of the plan;
b. In the case of an employee described in subsection (e)(2)b. of this section, the date the
benefit of the employee becomes payable, if before the date of the termination of the plan; or
c. In the case of an employee described in subsection (e)(2)b. of this section, the date of
the failure to meet the full current costs of the plan. However, if the full current costs of the
plan have not been met on the date described in subsection (e)(3)a. or b. of this section,
whichever is applicable, then the date of the failure to meet such full current costs shall be
substituted for the date referred to in subsection (e)(3)a. or b. of this section. For purposes of
determining the contributions which may be used for the benefit of an employee when b. of
this subsection (3) applies, the number of years taken into account may be recomputed for
each year if the full current costs of the plan are met for such year.
(4) If this plan is amended so as to increase substantially the extent of possible
discrimination as to contributions and as to benefits actually payable in the event of the
subsequent termination of the plan or the subsequent discontinuance of contributions
thereunder, then the provisions of subsection (e) of this section shall be applied to the plan as
if it were a new plan established on the date of such change. However, the provision in
subsection (e)(3) of this section that the unrestricted amount of employer contributions on
behalf of any employee is at least $20,000.00 is applicable to the aggregate amount
contributed by the city on behalf of such employee from the date of establishment of the
original plan, and, for purposes of determining if the employee's anticipated annual pension
exceeds $1,500.00, both the city's contributions on the employee's behalf prior to the date of
the change in the plan and those expected to be made on his behalf subsequent to the date of
the change (based on the employee's rate of compensation on the date of the change) are to be
taken into account.
(5) In the event that it shall be determined by statute, ruling by the commissioner of
internal revenue, or otherwise, that the provisions of this subsection are not then necessary to
qualify the plan under the Internal Revenue Code, this subsection shall be ineffective without
the necessity of further amendment of the plan.
(Code 1978, sr 17-247)
This ordinance shall become effective as provided by law.
Introduced: May 27, 2014
City Council hearing: June 10, 2014
Adopted: June 10, 2014
Mayor
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ATTEST:
AtlY12./ ' "AL
City Clerk
Votes
Mayor Silverthorne Aye
Councilman DeMarco Aye
Councilman Drummond Nay
Councilman Greenfield Aye
Councilman Meyer Nay
Councilmember Schmidt Nay
Councilman Stombres Aye