Sec. 102-142. Amount and payment of pension benefits.
(a) Normal or delayed retirement pension. A participant shall become fully vested in the accrued benefit on the normal retirement date and, upon retirement on or after such date, may elect to receive a monthly pension equal to 1.75 percent of the final average monthly compensation, multiplied by years of credited service, including a fractional computation for each day of service less than a full year. In lieu of a monthly pension, the participant may elect to receive a lump sum equal to the participant's contribution accumulation and vested city contributions.
Payment of a normal or delayed retirement pension shall commence as of the first day of the month following the participant's termination of employment.
Every participant, upon reaching the normal retirement date, may, pursuant to the provisions of the personnel rules and regulations of the City, remain as an employee and may retire on the first day of any subsequent month.
(b) Early retirement pension. A participant who meets the requirements for an early retirement pension may request the commencement of the early retirement pensions as of the first day of any month following termination of employment and prior to the participant's normal retirement date or alternatively wait until normal retirement age and receive an unreduced pension benefit.
For Tier 1 participants, the following rules shall apply: If a participant between the age of 55 and 65 requests the commencement of such early retirement pension prior to the participant's normal retirement date, the pension shall be permanently reduced by two percent for each year (including a fractional computation for each day less than a full year) that the pension commencement date precedes the earlier of (1) the date at which the participant's combined age and years of credited service total at least 80, or (2) the participant's 65th birthday. If a participant under age 55 with less than 25 years of credited service requests the commencement of such early retirement pension, the pension shall be permanently reduced by two percent for each year (including a fractional computation for each day less than a full year) that the participant's years of credited service are less than 25, not to exceed a total reduction of 20 percent, and the pension shall be further reduced six percent for each year (including a fractional computation for each day less than a full year) that the commencement precedes the participant's 55th birthday. If a participant under age 55 with 25 or more years of credited service requests the commencement of an early retirement pension, the pension shall be permanently reduced by six percent for each year (including a fractional computation for each day less than a full year) that the pension commencement date precedes the date at which the participant's combined age and years of credited service total at least 80.
For Tier 2 participants, the following rules shall apply: If a participant between the age of 50 and 67 requests the commencement of such early retirement pension prior to the participant's normal retirement date, the pension shall be permanently reduced by six percent for each year (including a fractional computation for each day less than a full year) that the pension commencement date precedes the earlier of (1) the date at which the participant's combined age and years of credited service total at least 80, or (2) the participant's 67th birthday.
(c) Special early retirement pension. A participant who meets the requirements for a special early retirement pension shall receive a monthly amount equal to the participant's accrued benefit. Payment of a special early retirement pension shall commence as of the first day of the month following the participant's termination of employment.
(d) Deferred vested pension. A participant who meets the requirements for a deferred vested pension may elect to (i) leave the contribution accumulation in the trust or (ii) receive, in lieu of all other benefits under this section, a refund of the participant's contribution accumulation and vested city contributions subject to limitations in subsection 102-140(d). If the participant fails to elect either (i) or (ii) within 90 days after the date of termination, it shall be determined that the participant's contribution accumulation shall remain in the trust. Any participant electing or deemed to have elected to leave the contribution accumulation in the trust after termination of employment with the city may, subsequently, elect a refund of the participant's contribution accumulation and vested city contributions in lieu of all other benefits hereunder at any time prior to the participant's commencement of a pension pursuant to section 102-141(a), (b), (c), (d), or (e).
A deferred vested participant shall be entitled to receive a deferred vested pension equal to the accrued benefit payable as of the first day of the month following the participant's normal retirement date.
A deferred vested participant whose employment terminates after having completed ten years of credited service may request the commencement of the deferred vested pension at any time after attainment of age 50 and prior to the participant's normal retirement date, in which event the pension will be reduced as for early retirement.
(e) Money purchase pension. A participant who meets the requirements for a money purchase pension, shall receive a monthly amount which is the actuarial equivalent of the participant's contribution accumulation and vested city contributions as of the date the pension commences.
(f) Disability retirement pension. A participant who meets the requirements for a disability retirement pension shall receive a monthly pension payable as of the first day of the month following the participant's normal retirement date, or as of the first day of the month following termination of long-term disability insurance benefits, if later. A disabled participant shall receive credited service for the period of disability and the final average monthly compensation used to calculate the benefit shall be the higher of the final average monthly compensation or the monthly rate of compensation on the date of disablement.
(g) Reemployment of retired participants. Upon the subsequent termination of employment by a retired participant who was reemployed by the City as a plan participant, the plan shall resume paying the participant's previous benefit that was suspended and an additional amount based on the period of reemployment as a plan participant. The additional benefit shall be equal to 1.75 percent of the final average monthly compensation earned during the period of reemployment, multiplied by the years of credited service earned during the period of reemployment, including a fractional computation for each day of service less than a full year, subject to reduction for early retirement in section 102-142(b). The participant may not change the form of annuity benefit that was originally selected.
(h) Cost-of-living adjustment. For Tier 1 participants, monthly pension benefits payable to a participant or beneficiary pursuant to the terms of this article, excluding the supplemental benefit described in subsection (j) of this section, shall be subject to a cost-of-living adjustment. Such cost-of-living adjustment shall be an amount equal to the monthly pension benefit such participant or beneficiary was scheduled to receive on January 1, for the year in which the cost of living adjustment takes effect, excluding the supplemental benefit described in this section, times the percentage change, if any, rounded to the nearest one-half of one percent determined by the ratio that the U.S. Consumer Price Index for Urban Wage Earners and Clerical Workers (CPI-W) for the averages of the third quarter (July, August, September numbers) of the calculation year bears to such index for the third quarter of the base year; provided, however, that, such yearly increase or decrease shall be limited to a maximum percentage change of five percent, and provided further that any decrease shall not reduce the amount of pension below the initial level established at the time payments commenced. The "calculation year" is the year before the year in which the adjustment takes effect and the "base year" is the year preceding the "calculation year."
For years after 2011, the cost of living adjustment shall be determined as described above for Tier 1 participants, except that no negative cost-of-living adjustment shall be applied, and the base year is the year preceding the most recent year in which a positive cost-of-living adjustment took effect for Tier 1 participants.
For Tier 2 participants, cost-of-living adjustments shall not be automatic but may be granted on an annual basis as determined by the board. Such yearly increase shall not exceed the lesser of five percent or the increase which applies to Tier 1 participants.
(i) General conditions. It shall be the sole duty and responsibility of every participant entitled to a pension or the designated beneficiaries or heirs to make claim for such benefits upon the board, in writing, and there shall be no duty upon the board to disburse any benefits without written notice of such claim. A participant shall be required to notify the board of the intended retirement at least 60 days prior to the date on which the pension is to commence. Except as required by the last two sentences of this subsection, pension payments shall commence within 90 days after a participant's retirement date or after receipt by the board of a claim for benefits, if later.
A participant whose employment terminates and who is eligible for a pension under this plan, including deferred vested participants who leave their contribution accumulations in the trust, shall file with the board, in writing, a mailing address and each change of address. Any notice sent to a participant at the last filed mailing address will be binding upon the participant for all purposes of the plan.
Effective January 1, 1989, pension payments shall commence not later than April 1 of the calendar year following the later of: (i) the calendar year in which the participant attains 70½ years of age; or (ii) the calendar year in which the participant retires. effective January 1, 2002 distributions shall be made in accordance with the requirements of code section 401(a)(9) as applicable to a government plan, including the incidental death benefit requirement of code section 401(a)(9)(G) and final treasury regulations sections 1.401(a)(9)-1 through 1.401(a)(9)-9, all as applicable to a governmental plan. The foregoing sentence overrides any distribution options that are inconsistent with code section 401(a)(9) as applicable to a governmental plan.
(j) Supplemental benefit. A participant or beneficiary shall receive, in addition to the pension, a monthly supplemental benefit. The full monthly supplemental benefit shall be calculated as follows:
(1) The full monthly supplemental benefit shall be $120.00.
(2) For each calendar year after 1992, the full monthly supplemental benefit shall be increased or decreased annually by an amount equal to the full monthly supplemental benefit payable during the previous calendar year, times a cost-of-living adjustment determined by the board.
The level of the cost-of-living adjustment, referenced in this section, shall be established at the discretion of the board, but in no event shall the cost of living adjustment for any one year exceed plus or minus five percent.
The full supplemental benefit shall be paid to participants with at least 20 years of credited service. Employees with at least five years of credited service up to a maximum of 20 years shall receive a pro rata share of the full monthly supplemental benefit. Employees with less than five years of service are ineligible to receive this benefit. Other provisions of this plan notwithstanding, the city council reserves the right to change this benefit at any time. The city council's determination to provide this supplemental benefit is not based upon a corresponding change to the plan of a detrimental nature.
(k) One-time early retirement option pension. A participant who is eligible and meets the requirements for the one-time early retirement option pension under subsection 102-141(h) shall, upon retirement, receive a monthly pension equal to 1.6 percent of the average monthly compensation, multiplied by the participant's years of credited service including fractional years, plus two additional years of credited service. An eligible participant or beneficiary shall receive, in addition to the pension, a monthly supplemental benefit of $250.00 up to the date the participant reaches or would have reached age 62.
Payment of the one-time early retirement pension shall commence as of the first day of the month following the participant's termination of employment. A participant who is eligible and meets the requirements for the one-time early retirement option shall be credited with an additional two years of service for the purpose of calculating the supplemental benefit to which the participant is entitled pursuant to subsection (j) of this section.
(l) Direct rollover. For eligible rollover distributions, a distributee may elect, at the time and in the manner prescribed by the board, to have any portion of the distribution paid directly to an eligible retirement plan specified by the distributee in a direct rollover. For purposes of applying this subsection, the following definitions shall apply:
(1) Eligible retirement plan. An eligible retirement plan is an individual retirement account described in section 408(A) of the code, an individual retirement annuity described in section 408(B) of the code, an annuity plan described in section 403(A) of the code, or a qualified trust described in section 401(A) of the code, that accepts the distributee's eligible rollover distribution. 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 any 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 relations order, as defined in code section 414(p). Effective January 1, 2008, an eligible retirement plan shall also mean a ROTH IRA described in section 408a(b) of the code, subject to any applicable limits described in section 408a(c) of the code.
(2) Distributee. A distributee is a participant of the plan. In addition, the participant's surviving spouse and the participant's or former participant's spouse who is the alternate payee under a qualified domestic relations order, as defined in section 414(P) of the code, are distributees with regard to the interest of the spouse or former spouse.
(3) Direct rollover. A direct rollover is a payment by the plan to the eligible retirement plan specified by the distributee.
(4) Eligible rollover distribution. Any distribution of all or any portion of the balance to the credit of the distributee, except that an eligible rollover distribution does not include: 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 years or more; any distribution to the extent such distribution is required under section 401(A)(9) of the code; and 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 which is not so includible. (Code 1979, § 15-48; Ord. No. 2014-17, §§ 4, 5, 6-2-2014; Ord. No. 2011-29, § 6, 9-12-2011; Ord. No. 2002-84, § 2, 1-6-2003; Ord. No. 99-82, § 2, 11-29-1999; Ord. No. 97-77, § 6, 1-5-1998; Ord. No. 96-38, § 6, 10-7-1996)