[Adopted 3-4-2002 by Ord.
No. 2-02]
As used in this article, the following terms shall have the
meanings indicated:
The Internal Revenue Code, as amended periodically.
Plan members' wages, as defined in Code Section 3401(a),
for a plan year for which the municipality is required to provide
the plan member a written statement under Code Sections 6041(d), 6051(a)(3)
and 6052. Such 415 compensation shall include any elective deferrals
defined in Code Section 402(g)(3) and all amounts contributed or deferred
at the election of the plan members which are not includible in the
gross income of the plan member by reason of either Code Sections
125, 402(e)(3), 402(h)(1)(B), 403(b), 414(h)(2) or 457.
The political subdivision named at the top of this page.[1]
The pension plan specified at the top of this page.[2]
The calendar year.
The income tax regulations, as amended periodically.
A.
Unless the plan member otherwise elects, the payment of benefits
under the plan to the plan member will begin not later than the 60th
day after the latest of the close of the plan year in which:
B.
In the case of a plan which provides for the payment of an early
retirement benefit, a plan member who satisfied the service requirements
for such early retirement benefit, but separated from the service
(with any nonforfeitable right to an accrued benefit) before satisfying
the age requirement for such early retirement benefit, is entitled
upon satisfaction of such age requirement to receive a benefit not
less than the benefit to which he would be entitled at the normal
retirement age, actuarially reduced under regulations prescribed by
the Secretary.
C.
A plan member's benefits must commence to be paid not later than
April 1st of the calendar year following the later of the calendar
year in which the member attains age 70 1/2 or the calendar year
in which the member retires. Such distributions must equal or exceed
the required minimum distribution, and otherwise be made in a manner
consistent with the requirements of Code Section 401(a)(9) and the
regulations thereunder.
D.
Required distributions must be made over the lifetime or the life
expectancy of the plan member or the joint life times or joint life
expectancy of the plan member and the plan member's designated beneficiary.
The life expectancy of the plan member and the plan member's spouse
may be redetermined at the election of the plan member or the plan
member's spouse. Such an election is irrevocable, once made. If no
such election is made by the date benefit distributions must commence,
then the life expectancy of the plan member and the plan member's
spouse shall not be recalculated. Tables V and VI of Regulation 1.72-9
shall be used for computing life expectancy or joint and survivor
life expectancy.
E.
All benefit distributions to a plan member or the plan member's beneficiary
shall be in accordance with the incidental death benefit requirements
of Code Section 401(a)(9)(G) and the related regulations.
The limitations and other requirements outlined below are intended
to comply with Code Section 415 and the regulations thereunder, the
terms of which are specifically incorporated herein by reference.
The maximum compensation limit and benefits limitations under the
Code are as follows:
A.
The compensation used in calculating a plan member's benefit cannot
exceed the limits of Code Section 401(a)(17), as adjusted for cost-of-living
increases, per Code Section 415(d).
B.
General rule. In no event shall the annual retirement benefit payable
to a plan member under this plan, together with retirement benefits
provided under all qualified benefit plans maintained or previously
maintained by the municipality, for any limitation year, which shall
be the calendar year, exceed the maximum benefit permitted, as adjusted
annually per Code Section 415(d), under Code Section 415(b) (including
any applicable grandfathering rules). This plan section shall be applied
in accordance with Code Section 415 and the regulations thereunder.
C.
Adjustments of limits.
(1)
Where a retirement benefit commences before age 62, the Code Section
415(b)(1)(A) dollar limit shall be reduced in accordance with Code
Section 415(b)(2)(F). This reduction shall not result in a limit that
is less than $75,000 if the benefit begins at or after age 55, or
the actuarial equivalent of $75,000 at age 55 (determined in accordance
with Code Section 415) if the benefit begins before age 55.
(2)
Where a retirement benefit commences after age 65, the Code Section
415(b)(1)(A) dollar limit shall be increased as described in Code
Section 415(b)(2)(F).
(3)
The maximum benefit limit of Code Section 415(b)(1) shall be applied
to benefits in the form of a straight life annuity (with no ancillary
benefits) without regard to benefits attributed to plan member contributions
and rollover contributions. If the form payable to a plan member is
other than a single life annuity or a Code Section 417(b) qualified
joint and survivor annuity, the plan member's benefit shall not exceed
the actuarial equivalent of the Code Section 415(b)(1) maximum payable
in the form of a single life annuity unless no such adjustment is
required under Code Section 415 and related regulations.
(4)
Notwithstanding the other rules of the plan and Code Section 415,
if the plan member has not participated in a defined contribution
plan of the municipality, the plan member's annual retirement benefit
shall not be deemed to exceed the maximum benefit limit if it does
not exceed the Code Section 415(b)(4) limit of $10,000, as adjusted
for plan participation or service of less than 10 years in accordance
with Code Section 415(b)(5).
D.
Special limitation for qualified police or firefighters. For any
plan member who is a qualified participant, as defined under Code
Section 415(b)(2)(H), the limitation under Code Section 415(b)(2)(C)
shall not be reduced to an amount less than $50,000 [as adjusted per
Code Section 415(d)] as required by Code Section 415(b)(2)(G).
E.
Order of defined benefit plan reductions. If the plan member participates
or participated in any other defined benefit plan of the municipality,
and the plan member's aggregate annual retirement benefit under this
plan and such other plan exceeds the limits permitted under Code Section
415, such plan member's benefit shall be first reduced under this
plan.
A.
Notwithstanding the plan's vesting schedule, upon any amendment or
restatement of the plan, a plan member's vested accrued benefit shall
not be less than the vested accrued benefit immediately preceding
such amendment or restatement.
B.
Notwithstanding the plan's vesting schedule, a plan member shall
be 100% vested when the plan member completes the age and service
requirements for normal retirement at his normal retirement date under
the plan.
C.
Notwithstanding the plan's vesting schedule, a plan member shall
be 100% vested in his accrued benefit (to the extent funded) as of
the date of partial or complete plan termination.
Notwithstanding § 33-14, the plan shall recognize any qualified domestic relations order (QDRO) set forth under Code Section 414(p). Any plan member's benefits, rights or elections shall be subject to any rights afforded to the alternate payee by a QDRO. Further, a distribution to an alternate payee is permitted if authorized by a QDRO, even if the plan member involved has not separated from service and has not reached the earliest retirement age under the plan.
No plan member or beneficiary shall have any benefit subject to any type of alienation, anticipation, assignment, charge, encumbrance, pledge, sale or transfer. Further, no benefits shall be subject to or liable for any debts, contracts, engagements, liabilities or torts. The only exceptions to this section are those in § 33-15 above and those referenced in Code Sections 401(a)(13)(C) and (D).
If any portion of a plan benefit is payable to a plan member
or beneficiary at the later of the plan member's 62nd birthday or
his normal retirement age and such benefit remains unpaid solely by
reason that the municipality, after sending a registered letter, to
the last known address, return receipt requested, and after diligent
effort fails to locate the plan member or beneficiary, the actuarial
value of the benefit shall be forfeited and applied towards reducing
plan costs. If, subsequent to the forfeiture, a plan member or beneficiary
is located, the actuarial value of the forfeiture at the time it was
forfeited (no adjustments for gains or losses) shall be restored.
Forfeitures must not be applied to increase the benefits any
municipal employee would otherwise receive under the plan.
In the case of any merger or consolidation with, or transfer
of plan assets or liabilities to any other plan, each plan member
would (if the plan then terminated) receive a benefit immediately
after the merger, consolidation, or transfer which is equal to or
greater than the benefit he would have been entitled to receive immediately
before the merger, consolidation, or transfer (if the plan had then
terminated).
As required by Code Section 401(a)(25), the actuarial assumptions
used to calculate plan benefits shall not be subject to the municipality's
discretion.
A.
Distribution shall be made in the form of a direct trustee-to-trustee
transfer to the eligible retirement plan so specified if any distributee
of any eligible rollover distribution:
C.
Eligible rollover distribution. For purposes of this subsection,
the term "eligible rollover distribution" has the meaning given such
term by Code Section 402(f)(2)(A).
D.
Eligible retirement plan. For purposes of this subsection, the term
"eligible retirement plan" has the meaning given such term by Code
Section 402(c)(8)(B), except that a qualified trust shall be considered
an eligible retirement plan only if it is a defined contribution plan,
the terms of which permit the acceptance of rollover distributions.
