HomeMy WebLinkAbout08549ORDINANCE NO. 8549
AN ORDINANCE AMENDING CHAPTER 2 OF TITLE II OF
THE PUEBLO MUNICIPAL CODE RELATING TO THE
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; and
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
(a) Internal Revenue
changes in compliance with federal law, including but not limited to:
Code Section 414(u), and (b) the death benefit provisions of the Heroes Earnings
Assistance and Relief Tax Act of 2008.
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(c) 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).
. . .
(c) Notwithstanding any provisions of this plan to the contrary,
contributions, benefits and service credit with respect to qualified military service
s 401(a)(37) and
will be provided in accordance with Section 414(u) of the
A member who returns to employment with the City
Internal Revenue Code.
from qualified military service during the period within which
reemployment rights are guaranteed by law will receive service with
respect to the member’s period of qualified military service in accordance
with Section 414(u) of the Code and applicable regulations, and as set forth
in subsections (1) and (2) below:
(1) Service Necessary To Be Eligible for a Pension. A member's
qualified military service counts toward the twenty (20) years of active
service required to be eligible for a pension; and
(2) Service for Purposes of Calculating Pension Amount. For
purposes other than determining eligibility for a pension, a member's
qualified military service counts as active service only to the extent the
member elects to make contributions to the Plan for all or part of the
period of qualified military service, as described below:
a. A member who returns to employment with the City from
qualified military service during the period within which
reemployment rights are guaranteed by law may elect to contribute
to the Plan all or a part of the contributions the member would have
made to the Plan according to Subsection 2-2-7(3) if the member
had remained continuously employed by the City throughout the
period of the member's qualified military service. The amount of
contributions the member may make according to this subection
shall be determined on the basis of the member's compensation in
effect immediately before the qualified military service and the terms
of the Plan during the member's period of qualified military service.
b. A member may make such contributions during a period
beginning on the member's reemployment with the City and lasting
for the shorter of five (5) years or three (3) times the member's
period of qualified military service. To the extent the member makes
contributions permitted by this Subsection, the member will receive
active service credit for the period of qualified military service to
which the contributions relate.
Effective January 1, 2007, if a member dies while performing qualified
military service (within the meaning of Section 414(u)(1) of the Code), the
member shall be treated as having terminated employment with the City
due to his death for purposes of any additional benefits (other than benefit
accruals relating to the period of qualified military service) provided under
the Plan.
Effective January 1, 2009, for purposes of applying Code section 415(c)
to member contributions to the DROP account, compensation includes any
differential wage payments to a member. A differential wage payment is a
payment which (1) is made by the City with respect to a period during
which the member is on active military duty for a period of more than thirty
(30) days and (2) represents all or a portion of the wages the member would
have received from the City if the member were performing service for the
City, all as defined by Section 3401(h)(2) 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 retroactively as of
the dates required by Internal Revenue Code Sections 401(a)(37) and 414(u). 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: November 26, 2012
BY: Leroy Garcia
COUNCIL PERSON
PASSED AND APPROVED: December 10, 2012
Background Paper for Proposed
ORDINANCE
DATE:November 26, 2012 AGENDA ITEM # R-8
DEPARTMENT:
Law Department
Robert P. Jagger, Interim 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 THE 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 federal law?
RECOMMENDATION:
Approval of the Ordinance.
BACKGROUND:
The enclosed Ordinance amends the so-called "old-hire" Firemen’s Pension Fund for
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, 2012. Failure to adopt the Ordinance by December 31, 2012 could
subject the Plan to IRS penalties.
Pursuant to Section 31-30.5-210(2), C.R.S., 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.