HomeMy WebLinkAbout06969ORDINANCE NO. 6969
AN ORDINANCE AMENDING CHAPTER 3 OF TITLE II OF THE PUEBLO MUNICIPAL CODE
RELATING TO POLICE PENSIONS AND TO TAX QUALIFICATION THEREOF
BE IT ORDAINED BY THE CITY COUNCIL OF PUEBLO, that (Brackets indicate matter being
deleted; underscoring indicates new matter being added).
SECTION 1
Subsection (9) of Section 2 -3 -2 of Chapter 3 of Title II of the Pueblo Municipal
Code, as amended, is hereby amended to read as follows:
Sec. 2-3 -2. Definitions.
(9) Compensation means the salary paid by the City to a member for
service rendered by him or her to the City as a policeman, including contributions
picked up and paid by the City under Subsection 2- 3- 25(b)(2). [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 ($200,000.00), subject to
cost -of- living adjustments in accordance with Code Section 415(d) of the Intemal
Revenue Code.] The compensation of each member taken into account for
determining all contributions under the plan for any year shall not exce any
applicable limit imposed by the Intemal Revenue Code ( "Code "), including bu not
limited to those set forth in Code Section 401(a)(17) to the extent such limit a to
the plan or a particular member.
SECTION 2
Section 2 -3 -39 of Chapter 3 of Title II of the Pueblo Municipal Code, as
amended, is hereby amended to read as follows:
Sec. 2 -3-39. Benefits and distributions limitations.
(a) Effective January 1, 1987, in any event, notwithstanding any provision of this
plan to the contrary, pursuant to Section 401(a)(9) of the Internal Revenue Code, payment of
benefit to any member shall commence not later than the later date of April 1 of the calendar
year following the calendar year in which the member attains age seventy and one -half (70'/),
or terminates employment. Benefit payments will be determined and made in accordance with
Intemal Revenue Code Section 401(a)(9) and the regulations thereunder, in the
minimum distribution incidental death benefit requirement. [Further, payments to a ny
beneficiary shall be subject to the limitations of Section 401(a)(9) of the Intemal Revenue
Code.
(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 Section 415
of the Intemal Revenue Code in accordance with Paragraphs (1) and (2) below:
(1) Defined benefit plan only. Any annual pension payable to a member
hereunder shall not exceed the lesser of:
a. Ninety thousand dollars ($90,000.00), adjusted for increases in
the cost of living, as prescribed by the Secretary of the Treasury or his or her
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. One hundred percent (100 %) of the member's average earnings
for the three (3) consecutive calendar years, while a member in the plan, in
which his or her 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 employment with the City
(including, but not limited to, commissions paid salesmen, compensation for
services on the basis of percentage of profits, commissions on insurance
premiums, tips and bonuses), provided that such amounts are actually paid or
includable in gross income during such year. Earnings shall exclude the
following:
1. 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 contributions under a simplified
employee pension plan to the extent such contributions are deductible
by the member, or any distributions from a plan of deferred
compensation; and
2. 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 Internal Revenue Code (whether or not the amounts are
actually excludable from the gross income of the member).
C. Except as provided in Subparagraph a below, the foregoing
limitations shall not be applicable with respect to any member whose annual
pension under this plan is less than ten thousand dollars ($10,000.00) if such
member has not at any time participated in any defined contribution plan
maintained by the City.
d. In the event that a member has been credited with less than two
(2) 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 (1), and the denominator of which is
ten (10). 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 limitation
otherwise applicable under Subparagraph c above shall be reduced by
multiplying each by a fraction, the numerator of which is the number of such
member's years of credited service (or part thereof), but never less than one
(1), and the denominator of which is ten (10).
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 that payment begins between ages sixty -two (62)
and sixty-five (65). If payment commences before age sixty -two (62), the
foregoing limitations shall be reduced so that they are actuarially equivalent to
such a benefit commencing at age sixty -two (62). However, the reduction of
this paragraph shall not reduce the limitation below seventy -five thousand
dollars ($75,000.00), if payment commences after age fifty -five (55), or below
fifty thousand dollars ($50,000.00), if payment commences before age fifty -five
(55). If payment commences after age sixty -five (65), the limitation shall be the
actuarial equivalent of a ninety- thousand - dollar annual benefit commencing at
age sixty-five (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 five percent (5 %) annually if benefits
commence before age sixty-two (62) and shall not exceed five percent (5 %)
annually if benefits commence after age sixty-five (65).
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 retirement benefits and qualified joint and survivor annuity
amounts) duly accrued by such member under Section 415, Internal Revenue
Code, 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 plans. If, in any limitation year,
a member also participates in one (1) 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 (1). 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 one hundred twenty -five percent (125 %) of the
dollar limitation under Section 415(b)(1)(A) of the Internal Revenue Code or one
hundred forty percent (140%) of the percentage limitation under Section 415(b)(1)(B) of
the Internal Revenue Code for the year of determination (taking into account the effect
of Section 235(8)(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 Internal Revenue 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(g)(3) of the Tax Equity
and Fiscal Responsibility Act of 1982); and (b) the denominator of which is the sum of
the lesser of one hundred twenty-five percent (125 %) of the dollar limitation under
Section 415(c)(1)(A) of the Internal Revenue Code or one hundred forty percent
(140 %) of the percentage limitation under Section 415(c)(1)(B) of the Internal Revenue
Code, for such limitation year and for all prior limitation years during which the member
was employed by the City; provided, however, that 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 provided in Section 415(e)(6)(B) of the
Internal Revenue Code.
If, in any limitation year, the sum of the defined benefit plan fraction and defined contribution
plan fraction for a member would exceed one (1) without adjustment of the amount of the
maximum annual pension that can be paid to such member under Subsection (1) of this
Section, then the amount of the maximum annual pension that can be paid to such member
under Subsection (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 (1), or the Board may take such other actions as will cause the sum to equal one (1) or
less.]
(b) This plan is subject to the limitations on benefits imposed by Internal Revenue
Code Section 415(b) for government police pension plans which are incorporated herein by
this reference. The limitation year is the calendar Year. (c)[For purposes of this Section,
the limitation year shall be the calendar year.] Notwithstanding any provisions of this plan to the
contrary , contributions benefits and service credit with respect to qualified military service will
be provided in accordance with Section 414(u) of the Internal Revenue Code.
(c) [For purposes of the Section, the limitation year shall be the calendar year.]
Notwithstanding any provisions of this plan to the contrary , contributions benefits and service
credit with respect to qualified military service will be provided in accordance with Section
414(u) of the Internal Reve Code.
SECTION 3.
Paragraphs (3) and (4) of Subsection (b) of Section 2 -3 -40 of Chapter 3 of Title
II of the Pueblo Municipal Code, as amended, are hereby amended to read as follows:
Sec. 2 -3-40. Eligible rollover distributions.
(b) For purposes of this Section, the following terms shall have the following
meanings:
(3) Eligible retirement plan means an individual retirement account
described in Code Section 408(a), an individual retirement annuity described in Section
408(b), an annuity described in Section 403(a), or a qualified trust described in Section
401(a) of the Internal Revenue 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).
(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 ten (10) years or more;
b. Any distribution to the extent such distribution is required under
Section 401(a)(9) of the Internal Revenue Code; and
C. The portion of any distribution that is not includible in gross
income.
For distributions on or after January 1 2002 a portion of distribution shall not fail to be
an eligible rollover distribution merely because the portion consists of after -tax
employee contributions which are not includible in gross income. However. such
portion may be paid only to an individual retirement account or annuity described in
Section 408(a) or (b) of the Code or to a qualified defined contribution plan described
in Section 401(a) or 403(a) of the Code that agrees to separately account for amounts
so transferred including separately accounting for the portion of such distribution which
is includible in gross income and the portion of such distribution is not so includible.
SECTION 4
This Ordinance shall become effective thirty (30) days after final passage and
approval; provided, however, that notwithstanding the foregoing, this Ordinance shall
not become effective (a) unless approved by sixty -five percent of the active members
of the Pueblo Policemen Retirement Plan (the "Plan ") and (b) unless the Board of
Directors of the Fire and Police Pension Association (the "FPPA ") established pursuant
to section 31 -31- 201(1), C.R.S. (Vol. 9, 2002) shall decide to permit said modifications
pursuant to Section 31- 30.5 - 210(2), C.R.S. (Vol. 9, 2002); and upon its effectiveness,
the modifications made by Section 1 of this Ordinance are intended to apply as of
January 1, 1996 and the changes made by Sections 2 and 3 of this Ordinance are
intended to apply as of January 1, 2002. For such purpose, on its effective date, this
Ordinance shall constitute and be construed to be a request by the City to FPPA to so
permit the said modifications to the Plan.
INTRODUCED March 24, 2003
BY All Gurule
Councilperson
APPROVED:
President of City Council
ATTEST:
Cdy rk
PASSED AND APPROVED: AD61 14. 2003