Loading...
HomeMy WebLinkAbout05847ORDINANCE NO. 5847 AN ORDINANCE AMENDING CHAPTER 3 OF TITLE II OF THE 1971 CODE OF ORDINANCES RELATING TO THE PUEBLO POLICEMEN RETIREMENT PLAN AND PROVIDING FOR AMENDMENTS REQUESTED BY THE INTERNAL REVENUE SERVICE BE IT ORDAINED BY THE CITY COUNCIL OF PUEBLO, that: (Brackets indicate material being deleted; underscoring indicates new material being added.) SECTION 1. Section 1 of Chapter 3 of Title II of the 1971 Code of Ordinances is hereby amended by the addition of the following paragraph: Notwithstanding any other provisions hereof or any amendment hereto to the contrary, at no time shall any assets of the pension accumulation fund revert to, or be recoverable by, the City or be used for, or diverted to, purposes other than for the exclusive benefit of members, retirants, or their beneficiaries under the plan and the payment of plan expenses except such funds which upon termination of the plan are in excess of the amount required to fully fund the plan and are due to erroneous actuarial calculations. SECTION 2. Paragraph (i) of Section 2, Chapter 3 of Title II of the 1971 Code of Ordinances is hereby amended to read as follows: (i) Compensation means the salary paid by the City to a member for service rendered by him to the City as a policeman including contributions picked up and paid by the City under the second paragraph of Section 25(b). Effective January 1, 1989, the amount of a member's compensation for purposes of the plan during any plan year shall not exceed two hundred thousand dollars ($200,000), subject to cost -of- living adjustments in accordance with Code Section 415(d). SECTION 3. A new Section 39 is hereby added to Chapter 3 of Title II of the 1971 Code of Ordinances to read as follows: 2 -3 -39: BENEFITS AND DISTRIBUTIONS LIMITATIONS (a) Effective January 1, 1987, in any event, notwith- standing any provision of this Plan to the contrary, pursuant to Code Section 401(a)(9) payment of benefit to any member shall commence not later than the later of April 1 of the calendar year following the calendar year in which the member attains age seventy and one -half (70 -1/2), or terminates employment. Further, payments to any beneficiary shall be subject to the limitations of Code Section 401(a)(9). (b) Effective January 1, 1987, notwithstanding any other provision contained herein to the contrary, the benefits payable to a member from this Plan provided by City contributions (including contributions picked up by the City), shall be subject to the limitations of Code 415 in accordance with (1) and (2) below: (1) Defined Benefit Plan Only: Any annual pension avable to a member hereunder shall not exceed the esser or: (A) $90,000, adjusted for increases in the cost of living, as prescribed by the Secretary of the Treasury or his delegate, effective January 1 of each calendar year and applicable to the Limitation Year ending with or within such calendar year, or, if greater, the amount of straight life, or qualified joint and survivor, annuity accrued by the member as of December 31, 1982. (B) 100% of the member's average earnings for the three consecutive calendar years, while a m ember in the Plan, in which his earnings were the highest. For purposes of this subsection, earnings for any calendar year shall be the member's earned income, wages, salaries, and fees for professional services, and other amounts received for personal services actually rendered in the course of e mployment with the City (including, but not limited to, commissions paid salesmen, compensation for services on the basis of a percentage of profits, commissions on insurance premiums, tips and bonuses), provided such amounts are actually paid or includible in gross income during such vear. Earninas shall exclude the followina: (i) City contributions to a plan of deferred compensation which are not included in the member's gross income for the taxable year in which contributed or City contribu- tions under a simplified employee pension plan -2- to the extent such contributions are deducti- ble by the member, or any distributions from a plan of deferred compensation; and (ii) Other amounts which received special tax benefits, or contributions made by the City (whether or not under a salary reduction agreement) towards the purchase of an annuity described in Section 403(b) of the Code (whether or not the amounts are actually excludable from the gross income of the member). (C) Except as rovided in (E) below, the foregoing limitations shall not be applicable with respect to any member whose annual Pension under this Plan is less than $10,000 if such member has not at any time participated in any defined contribution plan maintained by the Citv. (D) In the event that a member has been credited with less than two years of Credited Service, the maximum annual Pension allowable under this Section shall be reduced by multiplying such maximum annual Pension by a fraction, the numerator of which is the number of such member's years of Credited Service, but never less than one, and the denominator of which is ten. The paragraph shall, to the extent required by the Secretary of the Treasury, be applied separately to each change in benefit accrual rate hereunder. (E) In the event that a member has been credited with less than ten (10) years of Credited Service, the percentage -of- average- earnings limita- tion otherwise applicable under (C) above shall be reduced by multiplying each by a fraction, the numerator of which is the number of such member's vears of Credited Service (or part thereof), but (F) The limitations of this Section apply to a straight life annuity with no ancillary benefits and to an annuity that constitutes a qualified joint and survivor annuity, provided payment begins between ages 62 and 65. If payment commences before age 62, the foregoing limitations shall be reduced so that they are actuarially equivalent to such a benefit commending at age 62. However, the reduction of this paragraph shall not reduce the limitation below $75,000, if payment commences after age 55, or below $50,000, if payment commences before age 55. If payment commences Wn after age 65, the limitation shall be the Actuarial Equivalent of a $90,000 annual benefit commendin at age 65. The interest assumption for purposes of determining actuarial equivalency under this paragraph shall be the interest rate otherwise used for purposes of computing option forms of income payable under the Plan, but the rate shall not be less than 5% annually if benefits commence before age 62 and shall not exceed 5% annually if benefits commence after ape 65. Plan (G) In no event shall a member's maximum annual Pension allowable under this Section be less than the annual amount of Pension (including early survivor annuity amounts) duly accrued by such member under Code Section 415 limitations then in effect as of December 31, 1982, or as of December 31, 1986, whichever is greater (disregarding any plan changes or cost -of- living adjustments occurring after July 1, 1982, as to the 1982 accrued amount, and May 5, 1986, as to the 1986 accrued amount). 2) Defined Benefit and Defined Contribution participates in one or more defined contribution plans maintained by the City, then for such Limitation Year, the sum of the Defined Benefit Plan Fraction and Defined Contribution Plan Fraction (as described below) for such Limitation Year shall not exceed one. The Defined Benefit Fraction for any Limitation Year shall mean a fraction (A) the numerator of which is the projected annual benefit of the member under the Plan (determined as of the close of the Limitation Year), and (B) the denominator of which is the lesser of 125% of the dollar limitation under Code Section 415(b)(1)(A) or 140% of the percentage limitation under Code Section 415(b)(1) (B) for the year of determination (taking into account the effect of Section 235(g)(4) of the Tax Equity and Fiscal Responsibility Act of 1982.) The Defined Contribution Fraction for any Limitation Year shall mean a fraction (A) the numerator of which is the sum of the annual additions (as defined in Section 415(c)(2) of the Code) to the member's accounts under all defined contribution plans maintained by the City as of the close of the Limitation Year (subject to reduction to the extent permitted under the transition rule in Section 235(8)(3) of the Tax Equity and Fiscal Responsibility Act of 1982), and (B) the denominator of which is the sum of the lesser of 125% of the dollar limitation under Code Section 415(c)(1)(A) or 140% of the percentage Limitation under Code Section 415(c)(1) (B), for such Limitation Year and for all prior Limita- 1XIM tion Years durina which the member was emDloved by the City (provided, however, at the election of the Board, the denominator shall be increased by using for Limitation Years ending prior to January 1, 1983, an amount equal to the denominator in effect for the Limitation Year ending in 1982, multiplied by the transition fraction Drovided in Code Section 415(e)(6)(B)). If, in any Limitation Year, the sum of the Defined Benefit Plan Fraction and Defined Contribution Plan Fraction for a member would exceed one without adjust- ment of the amount of the maximum annual Pension that can be paid to such member under paragraph (1) of this Section, then the amount of the maximum annual Pension that can be paid to such member under paragraph (1) of this Section, shall be reduced to the extent necessary to reduce the sum of the Defined Benefit Plan Fraction and Defined Contribution Plan Fraction for such member to one, or the Board may take such other actions as will cause the sum to eaual one or less. (c) For purposes of this section, the Limitation Year shall be the calendar year. SECTION 4. A new Section 40 is hereby added to Chapter 3 of Title II of the 1971 Code of Ordinances to read as follows: 2 -3 -40: ELIGIBLE ROLLOVER DISTRIBUTIONS (a) This section applies to distributions made on or after January 1, 1993. Notwithstanding any provision of the Plan to the contrary that would otherwise limit a Distribu- tee's election under this section, a Distributee may elect, at the time and in the manner prescribed by the Board, to have any portion of an Eligible Rollover Distribution paid directly to an Eligible Retirement Plan specified by the Distributee in a direct rollover. (b) For purposes of this section the following terms shall have the following meaning: (1) "Direct Rollover" means a payment by the Plan to the Eligible Retirement Plan specified by a Distributee. (2) "Distributee" means an Employee or former Employee. In addition, the Employee's or former Employee's surviving spouse and the Employee's or former Employee's spouse or former spouse who is the alternate payee under a -5- qualified domestic relations order, as defined in Code Section 414(p), are Distributees with regard to the interest of the soouse or former soouse. (3) "Eligible Retirement Plan" means an individual retirement account described in Code Section 408(a), an individual retirement annuity described in Code Section 408(b), an annuity described in Code Section 403(a), or a qualified trust described in Code Section 401(a), 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. (4) "Eligible Rollover Distribution" means a distribution of all or any portion of the balance to the credit of the Distributee, except that an Eligible Rollover Distribution does not include: (A) any distribution that is one of a series of substantially equal periodic payments (not less frequently than annually) made for the life (or life expectancy) of the Distributee or the joint lives (or joint life expectancies) of the Distributee and the Distributee's designated Beneficiary; or for a specified period of 10 years or more; (B) any distribution to the extent such distribution is required under Code Section 401(a)(9); and (C) the portion of any distribution that is not includible in gross income. SFCTTnm S_ This Ordinance shall become effective upon final passage by the City Council and approval of the amendments and modifications to the Pueblo Policemen Retirement Plan contained in this Ordinance by (i) sixty -five percent of the active members of the Pueblo Policemen Retirement Plan, and (ii) the Board of Directors of the Fire and Police Pension Association. INTRODUCED: December 13, 1993 By JOHN CALIFANO Councilperson -6- ATTEST: Ci Clerk APPROVED: Preside t of the City Council TJ 71.2 -7-