HomeMy WebLinkAbout08428ORDINANCE NO. 8428
AN ORDINANCE AMENDING CHAPTER 2 OF TITLE II OF
THE PUEBLO MUNICIPAL CODE RELATING TO OLD-
HIRE FIREMEN’S PENSION FUND AND CONFORMING
SAME TO REQUIREMENTS OF FEDERAL LAW
WHEREAS, the City of Pueblo, Colorado (“City”) maintains the Pueblo Firemen’s
Pension Fund (“Plan”) for employees of the City Fire Department hired prior to April 8,
1978;
WHEREAS, the City has amended the Plan various times to make technical
amendments to the Plan as necessary to maintain the tax qualified status of the Plan;
and
WHEREAS, the City wishes to amend the Plan to accommodate technical
changes in compliance with federal law, including but not limited to: (a) Internal
Revenue Code Section 408, and (b) Section 824 of the Pension Protection Act of 2006.
NOW, THEREFORE, BE IT ORDAINED BY THE CITY COUNCIL OF PUEBLO,
that: (brackets indicate matter being deleted, underscoring indicates new matter being
added)
SECTION 1.
Subsection 2-2-20(d)(3) of Chapter 2, Title II of the Pueblo Municipal Code, as
amended, is hereby amended to read as follows:
Sec. 2-2-20. Additional provisions applicable to plan (tax qualification).
. . .
. . .
(d) For purposes of applying this Subsection, the following
definitions shall apply:
. . .
(3) Eligible retirement plan: An eligible retirement plan is an
individual retirement account described in Section 408(a) of the Code, an
individual retirement annuity described in Section 408(b) of the Code, an
annuity plan described in Section 403(a) of the Code or a qualified trust
described in Section 401(a) of the Code that accepts the distributee's
eligible rollover distribution. However, in the case of an eligible rollover
distribution to the surviving spouse, an eligible retirement plan is an
individual retirement account or individual retirement annuity.
Effective January 1, 2002, an eligible retirement plan shall also mean an
annuity contract described in Code Section 403(b) and an eligible plan
under Code Section 457(b) which is maintained by a state, political
subdivision of a state, or agency or instrumentality of a state or political
subdivision of a state and which agrees to separately account for amounts
transferred into such plan from this Plan. The definition of eligible
retirement plan shall also apply in the case of a distribution to a surviving
spouse, or to a spouse or former spouse who is the alternate payee under
a qualified domestic relation order, as defined in Code Section 414(p).
Effective January 1, 2008, an shall also mean
eligible retirement plan
a Roth IRA described in section 408A(b) of the Code, subject to any
applicable limitations described in section 408A(c) of the Code.
SECTION 2.
This Ordinance shall become effective upon final passage and approval;
provided, however, that notwithstanding the foregoing, this Ordinance shall not become
effective until the Board of Directors of the Fire and Police Pension Association
established pursuant to Section 31-31-201(1), C.R.S. ("FPPA") shall decide to permit
said modifications pursuant to Section 31-30.5-210(2), C.R.S.; and upon its becoming
effective, this Ordinance is intended to apply to and modify the Plan nunc pro tunc, as of
January 1, 2008. For such purpose, on its effective date, this Ordinance shall constitute
and be construed to be a request by the City to FPPA to permit said modifications to the
Plan.
INTRODUCED December 12, 2011
BY: Leroy Garcia
COUNCILPERSON
PASSED AND APPROVED: December 27, 2011
Background Paper for Proposed
ORDINANCE
DATE: AGENDA ITEM # R-6
December 12, 2011
DEPARTMENT:
Law Department
Thomas J. Florczak, City Attorney
Board of Trustees of the Pueblo Firemen’s Pension Fund
TITLE:
AN ORDINANCE AMENDING CHAPTER 2 OF TITLE II OF THE PUEBLO MUNICIPAL
CODE RELATING TO OLD-HIRE FIREMEN’S PENSION FUND AND CONFORMING
SAME TO REQUIREMENTS OF FEDERAL LAW
ISSUE:
Should Council adopt an amendment to the old-hire Firemen’s Pension Fund (“Plan”) to
conform the Plan to Internal Revenue Service (“IRS”) regulations?
RECOMMENDATION:
Council should adopt the Ordinance.
BACKGROUND:
The enclosed Ordinance amends the so-called "old-hire" Firemen’s Pension Fund for
City Fire Department employees hired before April 8, 1978. The amendment does little
to substantially modify the Plan terms and requirements, but is necessary to comply
with federal law. IRS guidelines require that this amendment be adopted no later than
December 31, 2011. The enclosed Ordinance should satisfy that requirement. Failure
to adopt the Ordinance by December 31, 2011 could subject the Plan to IRS penalties.
Pursuant to C.R.S. section 31-30.5-210(2), these modifications to the Plan do not
require approval by the active and retired old hire members.
FINANCIAL IMPACT:
None anticipated. However, failure to comply with instruction from the IRS can result in
revocation of the tax-deferred status of the Plan which would result in immediate tax
consequences for employees covered under the Plan.