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
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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
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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
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ATTEST:
Ci Clerk
APPROVED:
Preside t of the City Council
TJ 71.2 -7-