The funding of the plan and payment of benefits hereunder shall be provided for through the medium of the trust. The trust shall accept transfer of funds from the Maryland State Retirement Systems, consistent with the elections made by participants pursuant to § 38-17. The City, from time to time, shall make contributions to the trust in amounts determined, in accordance with generally accepted actuarial principles, to be sufficient to support the contributions required under § 38-26, and the contributions and transfers made pursuant to § 38-27 and to fund the benefits provided by the plan.
Any forfeiture arising under the provisions
of the plan shall be used to reduce the then current or future costs
of funding the benefits provided in the plan.
The City shall, at least once every other plan year, cause the liabilities of the plan to be evaluated by an enrolled actuary who shall report to the City as to the soundness and solvency of the trust in relation to the said liabilities and the amount of the City's contributions sufficient to meet the requirements of § 38-23.
Under limited circumstances described below,
participant contributions and moneys from other government employers
may be accepted by the plan.
A.
Types of contributions/transfers.
(1)
City pickup contributions. Effective for the pay periods beginning on or after July 1, 2018, and in accordance with rules established by the City, each participant shall make contributions to the plan equal to 8.0% of his or her compensation. The participant contributions referred to in this § 38-26 shall be picked up by the City, as described in Section 414(h)(2) of the Internal Revenue Code, deducted from the pay of the contributing participants as salary reduction contributions, and paid by the City to the Trustees with reasonable promptness after the total of such contributions during any month has been determined, and in any event by the end of the succeeding month. The contributions made pursuant to this § 38-26 shall be made a part of the participant's employee contributions benefit, that is, a part of his or her accrued benefit.
[Amended 5-22-2018 by Ord. No. O-18-12]
(2)
Transfer of pickup contributions from other government employers. Pursuant to the provisions of § 38-17, the trust may accept a transfer of moneys directly from another government employer retirement plan. Such transfer shall consist of contributions made by the participant, but characterized by such other government employer as employer pickup contributions, plus earnings previously credited upon such contributions. Such amounts shall be made a part of the participant's employee contributions benefit, that is, a part of the participant's accrued benefit.
(3)
Purchase of service pickup contributions. Pursuant to the provisions of § 38-18, a participant may enter into a payroll deduction authorization with the City pursuant to which the participant may purchase credit for service. The participant contributions referred to in this § 38-26A(3) shall be:
(a)
Picked up by the City, as described in Section
414(h)(2) of the Internal Revenue Code;
(b)
Deducted from the pay of the contributing participant
as salary reduction contributions; and
(c)
Paid by the City to the Trustees with reasonable
promptness after the total of such contributions during any month
has been determined, and in any event by the end of the succeeding
month.
B.
Suspension of contributions. A participant's
salary reduction contributions shall be automatically suspended for
any payroll period during which the participant is not a covered employee
or during which he or she is on an unpaid leave of absence.
[Amended 12-20-2011 by Ord. No. O-11-24]
C.
Withdrawals of pickup contributions. A participant
who has reached his or her termination date may elect, at any time,
to receive a cash-out of the employee contributions benefit, by filing
a written notice of such election with the City. Such cash-out shall
constitute full payment of all benefits due to such participant under
the plan.
D.
Forfeiture of remaining accrued benefit. In the event of a cash-out to a participant pursuant to this section, then, subject to restoration provided in § 38-8, the participant shall forfeit the entire remaining portion of his or her accrued benefit.
E.
Vesting of pickup contributions. Notwithstanding any
provisions of this plan to the contrary, participant contributions,
picked up either by the City or by other government employers and
made or transferred to the plan, shall be fully vested at all times.
F.
Payment of benefits. Subject to the right of withdrawal
described above, the benefits purchased from the participant's contributions
shall be payable at the same time, in the same manner, and, in the
event of the participant's death, to the same beneficiary or beneficiaries,
as is the remainder of his or her accrued benefit.
G.
Plan termination. In the event of a termination of the plan, distribution to each participant of the portion of the participant's accrued benefit attributable to his or her contributions picked up by the City shall, notwithstanding any other provisions of § 38-69, be treated as a priority distribution ahead of any other distribution to participants based upon the remainder of the trust, other than those attributable to contributions made pursuant to § 38-27.
Under limited circumstances, as described below,
other participant contributions may be accepted by the plan.
A.
Characterization. The contributions made pursuant to this section shall be distinct from those made pursuant to § 38-26 as to the character of such contributions. Whereas § 38-26 contributions shall be classified as City, or other government employer, contributions picked up from the pay of participants, contributions made pursuant to this section shall be after-tax contributions either made directly by the participant or, in some cases, transferred from another government employer retirement plan.
B.
Limitations. A participant may elect to make contributions
pursuant to this section, or to have contributions previously made
to another government employer retirement plan transferred to this
plan, within the following limitations:
(1)
A participant who elects to restore credit for service and benefits, as described in § 38-8D, shall pay over to the plan the amount of any cash-out previously made to the participant, with interest thereon.
(2)
The Trustees shall accept a direct transfer of after-tax participant contributions, together with interest thereon, from another government employer, provided such contributions were made by a covered employee who elects to transfer service from another government employer retirement plan, as described in § 38-17.
C.
Procedures. All participant contributions or transfers
made pursuant to this section shall be paid to the trust or, in the
case of payroll deductions required under this section, withheld by
the City and remitted to the Trustees.
D.
Separate accounting. participant contributions, whether
made directly or transferred from another retirement plan, as aforesaid,
shall be made a part of the participant's employee contributions benefit,
which shall be a part of the accrued benefits of each participant.
E.
Withdrawals of participant contributions. A participant
who has reached his or her termination date may elect, at any time,
to receive a cash-out of the participant's employee contributions
benefit, by filing a written notice of such election with the City.
Such cash-out shall constitute full payment of all benefits due to
such participant under the plan.
F.
Forfeiture of remaining accrued benefit. In the event of a cash-out to a participant pursuant to this section, then, subject to restoration provided in § 38-8D, the participant shall forfeit the entire remaining portion of his or her accrued benefit.
G.
Vesting of participant contributions. Notwithstanding
any provisions of this plan to the contrary, participant contributions
made to the plan shall be fully vested at all times.
H.
Payment of benefits. Subject to the right of withdrawal
described above, the benefits purchased from the participant's contributions
shall be payable at the same time, in the same manner, and, in the
event of his or her death, to the same beneficiary or beneficiaries,
as is the remainder of his or her accrued benefit.
I.
Plan termination. In the event of a termination of the plan, distribution to each participant of the portion of the accrued benefit attributable to his or her participant contributions shall, notwithstanding any other provision of § 38-69, be treated as a priority distribution ahead of any other distribution to participants based upon the remainder of the trust.
