HomeMy WebLinkAbout1990-080-06/05/1990-AMENDED JANUARY 1, 1990 EMPLOYEES RETIREMENT PLAN RESTATED RESOLUTION 90- 8o
OF THE COUNCIL OF THE CITY OF FORT COLLINS
ADOPTING THE CITY OF FORT COLLINS GENERAL
EMPLOYEES RETIREMENT PLAN (AS AMENDED
AND RESTATED EFFECTIVE JANUARY 1, 1990)
WHEREAS, the terms of the City of Fort Collins General Employees
Retirement Plan (as restated effective January 1, 1985) , hereinafter the
"Plan, " have been reviewed by its Retirement Committee with the assistance
of William M. Mercer, Incorporated, the City's consultant for the Plan; and
WHEREAS, amendments to the federal tax laws have been adopted since
the Plan was last restated effective January 1, 1985, and certain of those
changes must be incorporated into the Plan to maintain its qualified
status; and
WHEREAS, the Retirement Committee is also recommending certain changes
to clarify administration of the Plan and to improve benefits for active
members, retired members and beneficiaries effective July 1, 1990; and
WHEREAS, the Council wishes to adopt those changes as recommended; and
WHEREAS, the amendments are generally described as follows:
1 . The effective date of the restatement shall be changed
from January 1, 1985, to January 1, 1990.
2. Article I, Purpose, now reflects the new restatement date,
and the references to the Internal Revenue Code have been changed
from the Code of 1954 to the Code of 1986.
3. Article II, Definitions, Section 2:
A. Subsection (b) (C) , Mortality Assumption, has updated
the reference to the Group Annuity Table from 1975 to
1983.
B. Subsection (c) expands the definition of "Beneficiary"
from named relatives, living spouse, children, parents
and siblings, to include persons other than these
relatives. However, in the case of a married member,
a living spouse must consent to the designation of
anyone other than the spouse.
C. New subsection (f) adds the term "Code" as a defined
term referring to the Internal Revenue Code of 1986,
as amended.
D. A sentence has been added to the end of Subsection
(h) , which defines "Compensation". It incorporates a
provision from the tax code which sets $200,000 as the
maximum annual amount of compensation which may be
considered when calculating benefits under the Plan.
This maximum is further subject to certain
cost-of-living adjustments allowed by the tax code.
E. Subsection (i ) adds another defined term, "Covered
Employment, " to the Plan. One reason for this
addition is that certain former employees of the City
who were covered under the Plan became employees of
the Poudre Fire Authority when the Authority was
created. As an administrative matter, they continued
to be considered members of this Plan. But the Plan,
by its terms, is limited to City employees. The
change enables these Poudre Fire Authority employees
to continue their participation in the Plan .
Secondly, since all police and fire dispatchers, as
well as all police officers and firefighters, are now
covered under certain money purchase plans, those
positions are being specifically exempted from this
Plan to avoid any future confusion.
F. Subsection (m) amends the definition of "employee" to
include those certain employees of the Poudre Fire
Authority.
G. Subsection (s) adds a defined term, "Plan, " to clarify
that references within the document itself refer to
this January 1, 1990 restatement.
4. Article III, Membership, Sections 2 and 3, and Article IV,
Credited Service, Section 4, have been amended or added to effect
the purpose of the new definitions in Article II, to incorporate
those employees who were switched from the City to the Poudre
Fire Authority.
5. Article VI, Retirement Benefits.
A. In Section 5, the minimum periodic payment has been
raised from $50.00 to $100.00. The Plan provides that
whenever the monthly payment owed to a retired member
is less than this minimum amount, the Retirement
Committee may opt instead to pay "Actuarially
Equivalent Retirement Benefit Payments " on a
quarterly, semi -annual or annual basis or in a single
SUM.
B. In Section 6, references to the payment of benefits
accrued as of December 31 , 1984, have been updated to
reflect the new restatement date of January 1, 1990.
C. Section 7 has been added to effect an increase for
those persons who have retired or will retire prior to
July 1, 1990. The increase will be three percent (3%)
for each full year the retiree has been receiving
benefits under the Plan up to a maximum possible
increase of twenty percent (20%) .
6. Article VII, Optional Forms of Benefits, Section 5,
concerns the designation of beneficiaries. As a companion piece
to the expanded definition of the term "Beneficiary" in Article
II, Section 2(c) , this Section has been expanded to allow members
to designate anyone as a beneficiary while requiring that married
members who wish to designate someone other than their spouse
obtain the spouse's consent to the designation. It also
authorizes the Retirement Committee to designate a beneficiary
under certain circumstances when a deceased retiree has failed to
do so. The order of Committee designation shall begin with the
spouse (if living) , followed by children, parents, brothers and
sisters and, finally, the deceased member's estate.
7. Article VIII, Death Benefits. Under the old version of
the Plan, the surviving spouses, if any, of members who completed
the necessary minimum requirements for receiving retirement
benefits but died prior to the time benefits were to commence,
were eligible to begin receiving an amount equal to fifty percent
(50%) of the benefit when the member died. The proposed change
would add provisions so that if the spouse died before receiving
a total of 60 monthly payments, the remaining amount would be
paid to the spouse's beneficiary. If the spouse's beneficiary
dies before all 60 monthly payments have been made, the remaining
amount goes to the beneficiary's estate. In the alternative, if
there was no surviving spouse when the member died, this optional
60 month benefit could be paid to any other designated
beneficiary.
8. Article IX, Severance Benefits. This change from a
minimum amount of $50.00 to $100.00 is a companion piece to the
change at Article VI, Retirement Benefits, Section 5.
9. Article XIII, Retirement Benefits and Rights Inalienable.
Formerly, in the case of bankruptcy or an attempt to assign
anticipated benefits under this Plan by any member or
beneficiary, the Retirement Committee would make a discretionary
decision whether to continue or discontinue benefits under the
Plan. The change removes discretion from the Retirement
Committee and requires that the benefits be discontinued. The
Committee retains the authority to hold the benefits or cause
them to be otherwise paid out for the benefit of the member, his
or her spouse, children or other dependents.
10. Article XVI, Limitations, Section 3(1) . Language has
been incorporated here as a technical correction to the specific
method of calculation for benefits under this Plan as required by
the Internal Revenue Service in situations when a member's
pension benefit is less than $10,000 per year, the member has
accrued less than 10 years of service and the member has not
participated in any defined contribution plan maintained by the
City; and
WHEREAS, Article XIV, Modification or Termination of Plan, Section 2,
of the Plan authorizes the City Council to amend its terms.
NOW, THEREFORE, BE IT RESOLVED BY THE COUNCIL OF THE CITY OF FORT
COLLINS that the City of Fort Collins General Employees Retirement Plan, as
amended and restated effective January 1, 1990, which is attached hereto
and made a part hereof, be and the same hereby is adopted.
Passed and adopted at a regular meeting of the Council of the City of
Fort Collins held this 5th day of June A� .
412114A
Mayor
ATTEST:
L� '"
City Clerk Z�
C I T Y O F F 0 R T C 0 L L I N S
G E N E R A L E M P L O Y E E S
R E T I R E M E N T P L A N
As Amended and Restated Effective January 1, 1990
March 1, 1990
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(�T l (A L D5
City of Fort Collins General Employees Retirement Plan
TABLE OF CONTENTS
Page No.
ARTICLE I Purpose. . . . . . . . . . . . . . . . . . . . . I-1
ARTICLE II Definitions. . . . . . . . . . . . . . . . . . . II-1
1. Name . . . . . . . . . . . . . . . . . . . .
2. Definitions. . . . . . . . . . . . . . . . . II-1
3. Construction . . . . . . . . . . . . . . . . 1I-4
ARTICLE III Membership . . . . . . . . . . . . . . . . . . . III-1
1. Employees on January 1, 1971 . . . . . . . . III-1
2. Employees Hired After December 31, 1970. . . III-1
3. Termination. . . . . . . . . . . . . . . . . III-1
4. Withdrawal . . . . . . . . . . . . . . . . . III-1
5. Exceptions . . . . . . . . . . . . . . . . . IZI-1
Article IV Credited Service . . . . . . . . . . . . . . . . IV-1
1. Credited Service . . . . . . . . . . . . . . IV-1
2. Breaks in Service. . . . . . . . . . . . . . IV-1
3. Effect of Other Plans. . . . . . . . . . . . IV-2
4. Miscellaneous. . . . . . . . . . . . . . . . IV-2
ARTICLE V Retirement Dates . . . . . . . . . . . . . . . . V-1
1. Normal Retirement. . . . . . . . . . . . . . V-1
2. Early Retirement . . . . . . . . . . . . . . V-1
3. Delayed Retirement . . . . . . . . . . . . . V-1
4. Disability Retirement. . . . . . . . . . . . V-1
5. Retirement Date. . . . . . . . . . . . . . . V-2
ARTICLE VI Retirement Benefits. . . . . . . . . . . . . . . VI-1
1. Normal or Delayed Retirement . . . . . . . . VI-1
2. Early Retirement . . . . . . . . . . . . . . VI-1
3. Disability Retirement. . . . . . . . . . . . VI-1
4. Payment of Benefits. . . . . . . . . . . . . VI-1
5. Minimum Periodic Payment . . . . . . . . . . VI-2
6. Accrued Credits and Vested Benefits
Under the Previous Plan Preserved. . . . . . VI-2
7. Increased Benefits for Retired Members
and Beneficiaries as of July 1, 1990 . . . . VI-3
ARTICLE VII Optional Forms of Benefits . . . . . . . . . . VII-1
1. General . . . . . . . . . . . . . . . . . VII-1
2. 100% Joint and Survivor Benefit . . . . . VII-1
3. 50% Joint and Survivor Benefit . . . . . . VII-1
4. 120 Months Certain and Life Benefit . . . VII-2
5. Beneficiary . . . . . . . . . . . . . . . VII-2
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Paee No.
ARTICLE VIII Death Benefits . . . . . . . . . . VIII-1
1. Death of an Active Member, a Disabled
Member, or a Vested Member Prior to Normal
Retirement Date. . . . . . . . . . . . . . . VIII-1
2. Death of an Active Member Between
Normal and Delayed Retirement Dates. . . . . VIII-1
3. Death of a Retired Member. . . . . . . . . . VIII-2
4. Uniform Simultaneous Death Act . . . . . . . VIII-2
ARTICLE IX Severance Benefits . . . . . . . . . . . . . . . IX-1
1. Coverage . . . . . . . . . . . . . . . . . . IX-1
2. Six or More Years of Service . . . . . . . . IX-1
ARTICLE X Contributions. . . . . . . . . . . . . . . . . . X-1
1. Member Contributions . . . . . . . . . . . . X-1
2. City Contributions . . . . . . . . . . . . . X-1
3. Application of Forfeitures . . . . . . . . . X-1
ARTICLE XI Administration of the Plan . . . . . . . . . . . XI-1
1. Retirement Committee . . . . . . . . . . . . XI-1
2. Management of the Plan . . . . . . . . . . . XI-1
3. Miscellaneous. . . . . . . . . . . . . . XI-2
ARTICLE XII Method of Funding. . . . . . . . . . . . . . . . XII-1
1. Funding. . . . . . . . . . . . . . . . . . . XII-1
2. Assets . . . . . . . . . . . . . . . . . . . XII-1
3. Duties of the Funding Agent. . . . . . . . . XII-1
4. Investment Powers. . . . . . . . . . . . . . XII-2
ARTICLE XIII Retirement Benefits and Rights Inalienable . . . XIII-1
1. Inalienability . . . . . . . . . . . . . . . XIII-1
2. Bankruptcy . . . . . . . . . . . . . . . . . XIII-1
ARTICLE XIV Modification or Termination of Plan. . . . . . . XIV-1
1. Expectation. . . . . . . . . . . . . . . . . XIV-1
2. Amendment. . . . . . . . . . . . . . . . . . XIV-1
3. Approval Under the Internal Revenue Code . . XIV-1
4. Discontinuance . . . . . . . . . . . . . . . XIV-2
5. Termination. . . . . . . . . . . . . . . . . XIV-2
6. Distribution . . . . . . . . . . . . . . . . XIV-2
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ARTICLE XV Benefit Restrictions on Early Termination. . . . XV-1
1. Restrictions . . . . . . . . . . . . . . . . XV-1
2. Members Affected by Section 1. . . . . . . . XV-2
3. Amendment of the Plan. . . . . . . . . . . . XV-2
ARTICLE XVI Limitations. . . . . . . . . . . . . . . . . . . XVI-1
1. Reemployment of Former Members . . . . . . . XVI-1
2. Reemployment of Retired Members . . . . . XVI-1
3. Limitation of Benefits . . . . . . . . . . . XVI-1
4. Consolidation or Merger. . . . . . . . . . . XVI-4
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ARTICLE I
Purpose
Effective as of January 1, 1990, the City Council of the City of Fort
Collins adopted the amended and restated Plan (as defined in Section 2(s) of
Article II) , as set forth herein, to continue and replace the Plan previously
in effect. The Plan and Retirement Fund are intended to meet the requirements
of Sections 401(a) and 501(a) of the Internal Revenue Code of 1986.
The Plan and the separate related Retirement Fund forming a part hereof
were established and shall be maintained for the exclusive benefit of the
eligible employees of the City of Fort Collins and their beneficiaries. No part
of the Retirement Fund can ever revert to the City except as hereinafter
provided, or be used for or diverted to purposes other than the exclusive benefit
of the employees of the City and their beneficiaries.
This amendment and restatement of the Plan shall not, in any way, affect
the rights of former Employees who participated in said Plan and who either
retired or otherwise terminated their employment prior to January 1, 1990. The
rights, if any, of such former Employees and of their beneficiaries and the
amounts of their benefits, if any, shall continue to be governed by the
provisions of the Plan as it was in effect on December 31, 1989, or the date,
if earlier, of their retirement or termination of employment, unless specifically
provided for otherwise herein, or as the result of future amendments to this
restated Plan.
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ARTICLE II
Definitions
Section 1. Name. The retirement income plan as set forth in this
Ordinance shall be known as the City of Fort Collins General Employees Retirement
Plan (As Amended and Restated Effective January 1, 1990) and is hereinafter
referred to as the Plan.
Section 2. Definitions. Unless the context otherwise requires, the
definitions and general provisions contained in this Section govern the
construction of this restated Plan.
(a) "Accrued Benefit" means the benefit determined under the Plan
expressed in the form of a monthly single life annuity, commencing at
Normal Retirement Date.
(b) "Actuarial (or Actuarially) Equivalent" means equality in value
of the aggregate amounts expected to be received under different forms of
payment based on interest rate and mortality assumptions as defined below
unless otherwise specifically provided in the plan:
A. Interest rate assumption for alternative periodic benefits.
The Interest rate used for purposes of computing alternative periodic
forms of benefits shall be 7.5%.
B. Interest rate assumption for single-sum payments. The
interest rate used for purposes of computing single-sum payments shall
be the immediate annuity rate (subject to adjustment as required for
deferred annuities) used by the Pension Benefit Guaranty Corporation
as of the January 1 coincident with or preceding the date as of which
the amount of the alternative form of benefit is being determined
hereunder.
C. Mortality assumption. The mortality assumption for
calculations based upon the mortality of an Member or Beneficiary
shall be a unisex rate that is 50% male, 50% female, taken from the
1983 Group Annuity Table. Said mortality assumption shall be used
until changed by Plan amendment.
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(c) "Beneficiary" means the person or persons entitled to receive
benefits hereunder upon the death of a Member or former Member, pursuant
to Section 5 of Article VII hereof.
(d) "City" shall mean the City of Fort Collins, State of Colorado.
(a) "City Council" shall mean the City Council of the City.
(f) "Code" means the Internal Revenue Code of 1986, as amended.
(g) "Committee" or "Retirement Committee" means the Committee
appointed by the City Council and charged with the general administration
of the Plan.
(h) "Compensation" means the total cash remuneration paid to an
employee for a calendar year by the City for personal services including
performance pay as reported on the Employee's income tax withholding
statement or statements (Form W-2, or its subsequent equivalent) , excluding
bonuses, compensatory time, overtime pay, lump-sum payments for accrued
vacation time, worker's compensation and any contribution by the City under
this Plan, or the like, but including any compensation that is deferred
under Code Section 457. The amount of Compensation for purposes of the
Plan during any Plan Year shall not exceed $200,000, subject to the cost-
of-living adjustments in accordance with Code Section 415(d) , as amended
and then in effect.
(i) "Covered Employment" means the employment category for which the
Plan is maintained, which includes all nonfirefighters who perform clerical
and technical duties for Poudre Fire Authority and any employment with the
City in a classified position as defined by the City Personnel Rules and
Regulations, excluding Police Officers, Paid Firefighters, Emergency
Services Dispatchers (Police and Fire) , and leased employees within the
meaning of Code Section 414(n)(2) .
(j) "Credited Service" means the period of service rendered by an
Employee as a Member, for which credit is allowed. Credited Service will
cease when a Member's service as an Employee terminates.
(k) "Disability" means a physical or mental condition which, in the
judgment of the Insurance Company entitles the Member to receive a
disability income under the Long Term Disability Insurance Contract.
(1) "Effective Date of this Plan" means January 1, 1971. The first
restatement was effective January 1, 1985. This amended and restated Plan
is effective as of January 1, 1990.
II-2
r06po0e4."p+:10
(m) "Employee" means any person who is hired to fill a classified
position as defined by the City Personnel Rules and Regulations, including
all nonfirefighter personnel who perform clerical and technical duties for
Poudre Fire Authority. Also included are leased employees within the
meaning of Code Section 414(n)(2) . Notwithstanding the foregoing, if such
leased employees constitute less than twenty percent of the Employer's
nonhighly compensated workforce within the meaning of Code Section
414(n) (5)(C)(ii) , the term "Employee" shall not include those leased
employees covered by a plan described in Code Section 414(n)(5) .
(n) "Final Average Monthly Compensation" means 1/60th of a Member's
total Compensation during the 60 consecutive full calendar months of
Credited Service out of his last 120 calendar months of Credited Service,
which will produce the highest average monthly compensation. If a Member
has less than 60 consecutive full calendar months of Credited Service, his
Final Average Monthly Compensation shall be 1/60th of his total
Compensation during 60 successive full calendar months during the last 120
calendar months of Credited Service that would yield the highest average,
or the average of his total Compensation during all full calendar months
of Credited Service, if less than 60 months.
(o) "Funding Agent" means any insurance company or trustee appointed
by the Retirement Committee as provided in Article XII, or the Retirement
Committee, if no designation has been made.
(p) "Funding Agreement" means the insurance contract with the
insurance company or the trust agreement with the trustee as approved by
the Retirement Committee for the purpose of the investment and management
of Retirement Fund assets.
(q) "Insurance Company" means any insurance company or companies
appointed by the City Council as provided in Article XII.
(r) "Member" means any person included in the membership of this Plan
as provided in Article III hereof.
(s) "Plan" means the City of Fort Collins General Employees
Retirement Plan (As Restated Effective January 1, 1990) as it may be
amended.
(t) "Plan Year" means the calendar year.
(u) "Retired Member" means a former member whose employment
terminated by reason of retirement or Disability and who is receiving or
is entitled to receive, or whose Beneficiary or estate is entitled to
receive, benefits under this Plan.
(v) "Retirement Benefit" or "Pension" means any retirement benefit
provided for in Article VI hereof.
II-3
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(w) "Retirement Fund" or "Fund" means the "City of Fort Collins
General Employees Retirement Fund," maintained by the Retirement Committee
or in accordance with the terms of any Funding Agreement, as amended from
time to time, which constitutes a part of this Plan.
(x) "Service" shall mean service rendered as a Covered Employee of
the City.
(y) "Trustee" shall mean any qualified and acting Trustee appointed
by the City Council as a Named Fiduciary for the investment and management
of Plan assets.
(z) "Vested Member" means a former Member whose Credited Service has
terminated by reason other than retirement or Disability and who is
entitled to receive, or whose Beneficiary or estate is entitled to receive,
benefits under this Plan. A Vested Member shall become a Retired Member
upon actual retirement.
Section 3. Construction. The masculine gender, where appearing in the
Plan, shall be deemed to include the feminine gender and words used in the
singular shall include the plural unless the context clearly indicates the
contrary. Words such as "hereof," "herein," and "hereunder," shall refer to the
entire Plan, not to any particular provision or Section. The Plan and funding
agreement shall each form a part of the other by reference and terms used therein
shall be interchangeable.
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ARTICLE III
Membership
Section 1. Employees on January 1. 1971. Every person who was an Employee
of the City of Fort Collins on January 1, 1971 became a Member in the Plan on
such date.
Section 2. Employees Hired After December 31, 1970. Each Employee of the
City hired after December 31, 1970, shall become a Member in the Plan on his date
of employment. Effective January 1, 1990, an Employee must also be in Covered
Employment to become a Member.
Section 3. Termination. Membership of any Member shall terminate (except
as a Vested Member) if and when he shall cease to be in Covered Employment for
any reason, except as provided in Article IV, Section 2.
Section 4. Withdrawal. Unless otherwise provided herein, once an Employee
has become a Member of the Plan, he may not withdraw from membership in the Plan
unless he ceases to be an Employee.
Section 5. Exceptions. Any Employee who is covered by an employment
contract, a Department Head, an Assistant City Manager or an Assistant City
Attorney may, if designated by the City Manager, elect to participate in the ICMA
Retirement Program in lieu of participation in this Plan.
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ARTICLE IV
Credited Service
Section 1. Credited Service. A Member's Credited Service shall be used
to determine his Accrued Benefit and eligibility for benefits under the Plan.
A Member's Credited Service is the elapsed time period from his date of
employment with the City, as an Employee, to his date of termination of such
employment, except as limited within this Section. A Member will accrue Credited
Service under the Plan for periods of Disability as long as he is not receiving
any payment from this Plan during such period.
Section 2. Breaks in Service. A Member shall incur a Break in Service
if his service as an Employee terminates and he does not return to service as
an Employee within twelve (12) months of the date such service terminated. The
Retirement Committee shall have the power to determine when a Break in Service
shall have occurred, and such determination shall be made in a nondiscriminatory
manner. However, the following shall not be considered as a Break in Service:
(a) A temporary lay-off because of an illness or for purposes of
economy, suspension, or dismissal, followed by reinstatement, reemployment
or reappointment within one year.
(b) A formal leave of absence followed by reinstatement, reemployment
or reappointment within 30 days after termination of the leave of absence.
(c) A leave of absence on account of entering into the military
service of the United States, followed by a return to employment as an
Employee of the City within 90 days after the time when a discharge from
such military service was first available to such Member.
Credited Service shall not include the time during which a Member is not
in active service of the City for any of the reasons stated in this Section 2.
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Upon incurring a Break in Service, a Member shall lose all his prior
Credited Service. If a Member returns to service as an Employee prior to
incurring a Break in Service and repays the Fund, within twelve (12) months of
rehire, any amounts received because of his prior termination, with interest (at
the rate used to determine an Actuarial Equivalent) from the date received to
the date of repayment, the prior Credited Service for which such amounts were
received shall be restored.
Section 3. Effect of Other Plans. Credited Service shall not include any
period on the basis of which a retirement benefit is payable under any other
defined benefit retirement or pension plan to which the City made contributions,
other than benefits payable under the Federal Social Security Act. Credited
Service shall not include any period of time during which an Employee
participates in the ICMA Retirement Plan in lieu of this Plan as provided in
Section S of Article III.
Section 4. Miscellaneous. No period of Credited Service shall be deemed
to be increased or extended by overtime. In determining all Credited Service,
service for fractional years shall be allowed on the basis of 1/12th year for
each full month of employment as an Employee.
All phrases such as "employment with the City" (or "employment with the
City of Fort Collins") and "Employees of the City" (or "Employees of the City
of Fort Collins") are hereby deemed to include "employment with Poudre Fire
Authority" and "nonfirefighter, clerical and technical Employees of Poudre Fire
Authority."
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ARTICLE V
Retirement Dates
Section 1. Normal Retirement. The Normal Retirement Date of a Member
shall be his 65th birthday upon which date he shall become fully vested in his
Accrued Benefit. For purposes of the commencement of payment of a Retirement
Benefit, Normal Retirement Date shall mean the first of the month coincident with
or following a Member's 65th birthday.
Section 2. Early Retirement. A Member or Vested Member who has attained
the age of 55 years and has completed at least six years of Credited Service may
elect to retire as of the first day of any calendar month, which shall not be
less than 30 nor more than 90 days after the filing of written notification with
the Retirement Committee.
Section 3. Delayed Retirement. A Member may continue in the employment
of the City after his Normal Retirement Date. If the retirement of a Member is
delayed under this Article V, Section 3, his "Delayed Retirement Date" shall be
the first day of the month, coincident with or next following the date of his
actual retirement. As a condition precedent to continuance in employment beyond
the Normal Retirement Date, the Member shall file with the Retirement Committee
a written designation of a Beneficiary, whether or not the Member elects one of
the optional forms of benefits in accordance with Article VII.
Section 4. Disability Retirement. If a Member's employment by the City
terminates by reason of his Disability before his 65th birthday and he receives
long-term disability insurance benefits until such 65th birthday, he shall be
eligible for a Disability Benefit commencing on the first day of the month,
coincident with or next following his 65th birthday, or upon termination of his
long-term disability insurance benefits, if later.
V-1
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Disability shall be considered to have ended if, prior to his 65th
birthday, the Member loses his qualification for long-term disability insurance
payments. If Disability ceases prior to the Member's 65th birthday, no
Disability Benefits shall be paid to or for him. If the Member's Disability
ceases prior to his 65th birthday (and if he is not reemployed by the City as
an Employee) and if he has met the requirements for an Early or Deferred Vested
Benefit pursuant to Articles V or IX on the date of his recovery from Disability,
he shall be entitled to receive a benefit equal in amount to the Early or
Deferred Vested Benefit to which he would have been entitled as of the date of
his recovery, considering his Final Average Monthly Compensation at his
Disability Retirement Date and his Credited Service on the date of his recovery
from Disability.
Section 5. Retirement Date. A Member's "Retirement Date" shall be on his
Normal Retirement Date, his Early Retirement Date, his Delayed Retirement Date,
or his Disability Retirement Date, whichever is applicable.
V-2
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ARTICLE VI
Retirement Benefits
Section 1. Normal or Delayed Retirement. Upon retirement at or after his
Normal Retirement Date, each Retired Member shall receive a monthly Retirement
Benefit equal to lh% of the Member's Final Average Monthly Compensation
multiplied by the total number of years of the Member's Credited Service.
Section 2. Early Retirement. A Member or Vested Member, eligible for
early retirement and retiring prior to his Normal Retirement Date, shall be
entitled to a reduced Retirement Benefit which shall be his Vested Accrued
Benefit on his Early Retirement Date, reduced by 1/180 for each of the first 60
months and 1/360 for each additional month by which the payments commence prior
to the first of the month following his Normal Retirement Date.
Section 3. Disability Retirement. The Disability Retirement benefit of
a Member eligible therefor shall be his Accrued Benefit on the date his Benefit
commences, based on his Annual Rate of Compensation at his date of disablement,
and the Credited Service he would have accumulated if his employment had
continued uninterrupted until the commencement date of his Disability Benefit.
Section 4. Payment of Benefits. The basic monthly Retirement Benefit,
computed as set forth above, shall be paid in equal monthly payments commencing
on the first day of the month on or after the Retirement Date, and continuing
at monthly intervals for the Retired Member's lifetime thereafter.
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Retirement Benefits shall not be paid to any Retired Member during any
period of employment subsequent to his actual retirement date during which he
is receiving Compensation and is considered an Employee of the City. Monthly
payments shall commence on the first day of the month, coincident with or next
following such Retired Member's subsequent termination of service with the City
as an Employee and shall be determined pursuant to Section 2 of Article XVI.
Section 5. Minimum Periodic Payment. If the amount of the monthly
Retirement Benefit payable to a Retired Member is less than $100, the Retirement
Committee shall make Actuarially Equivalent Retirement Benefit payments in a
single sum.
Section 6. Accrued Credits and Vested Benefits Under the Previous Plan
Preserved. The restatement of the previous Plan by this Plan shall not operate
to exclude, diminish, limit or restrict the payment or continuation of the
payment of benefits accrued prior to the Effective Date of this Plan. The amount
and payment of any such previous Plan benefits, shall be continued by the Funding
Agent under the Funding Agreement forming a part of this Plan, in the same
manner, undiminished, preserved, and fully vested under this Plan, except as
provided in Section 7 of this Article VI.
The eligibility for, and amount of, any benefit of any kind, payable under
this Plan to or for any person who was a Member of the previous Plan and who
became a Member of this restated Plan as of January 1, 1990, shall be determined
under the provisions of this Plan.
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Section 7. Increased Benefits for Retired Members and Beneficiaries as
of July 1. 1990. Effective July 1, 1990, the monthly benefit of Retired Members
and Beneficiaries whose payments commenced prior to July 1, 1989, shall be
increased. Such increase shall be as follows:
Commencement Date Percentage Amount
Payment of First Benefit of Increase in
to Retired Members or Beneficiaries Monthly Benefits
June 30, 1989 - July 1, 1990 0%
June 30, 1988 - July 1, 1989 3%
June 30, 1987 - July 1, 1988 6%
June 30, 1986 - July 1, 1987 9%
June 30, 1985 - July 1, 1986 12%
June 30, 1984 - July 1, 1985 15%
November 1, 1983 - July 1, 1984 18%
Prior to November 1, 1983 20%
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ARTICLE VII
Qptional Forms of Benefits
Section 1. Cenral. Subject to such uniform rules and regulations as the
Retirement Committee may prescribe, a Member or Vested Member may, in lieu of
the basic Retirement Benefits provided in Article VI, elect one of the following
forms of Retirement Benefits which shall be the Actuarial Equivalent of the
benefit to which he would otherwise be entitled. The Member or Vested Member
must make any election of an optional form of benefit in writing, and such
election must be filed with the Retirement Committee at least 30 days prior to
the due date of the first payment of his Retirement Benefits under this Plan.
The election of an optional form of benefit may be changed at any time prior to
30 days preceding the due date of the first payment of Retirement Benefits under
the Plan. However, an optional form of benefit may not be elected unless the
value of the payments expected to be paid to the Member exceeds 50% of the value
of the total benefits to be paid under such optional form of benefit.
Section 2. 100% Joint and Survivor Benefit. The Member may elect a 100%
Joint and Survivor Benefit which provides reduced monthly Retirement Benefit
payments during the Retired Member's life, and, upon his death after retirement,
continues payments in the same reduced amount to a designated Beneficiary during
the life of such Beneficiary.
Section 3. 50% Joint and Survivor Benefit. The Member may elect a 50%
Joint and Survivor Benefit which provides reduced monthly Retirement Benefit
payments during the Retired Member's life, and, upon his death after retirement,
continues payments in an amount equal to one-half of the amount of such reduced
payment to a designated Beneficiary during the life of such Beneficiary.
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Section 4. 120 Months Certain and Life Benefit. The Member may elect a
120 Months Certain and Life Benefit which provides reduced monthly Retirement
Benefit payments during the Retired Member's life, and in the event he dies prior
to receiving 120 monthly payments, the same reduced amount shall be continued
to his Beneficiary until a total of 120 monthly payments have been made.
Section 5. Beneficiary. Each active, Vested or Retired Member may
designate a Beneficiary to receive any benefit that may become payable under this
Plan by reason of his death. However, if a married Member wishes to designate
someone other than his spouse to be his Beneficiary, such designation will not
become effective unless his spouse (if his spouse can be located) consents in
writing to such designation, acknowledges the effect of such designation and has
such consent and acknowledgement witnessed by a Plan representative or a notary
public. Such designation shall not become effective until filed with the
Retirement Committee.
If any Member shall fail to designate a Beneficiary, or if the one
designated by him predeceases him, then the Retirement Committee is hereby
empowered to designate a Beneficiary (or Beneficiaries) on his behalf, but only
from among the following with priority in the order named below, which shall
include persons legally adopted:
(a) his spouse, or if none;
(b) his children and children of deceased children, by right of
representation, or if none;
(c) his parents, or if none;
(d) his brothers and sisters and nephews and nieces who are children of
deceased brothers and sisters, by right of representation, or if none;
(e) his estate.
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ARTICLE VIII
Death Benefits
Section 1. Death of an Active Member, a Disabled Member or a Vested
Member Prior to Normal Retirement Date. In the event that a Member, who has
attained age 55 and has completed at least six years of Credited Service, and
who is actively employed by the City or whose employment terminated after having
completed such age and service requirements, dies prior to his Normal Retirement
Date and prior to the commencement of his Retirement Benefit, a death benefit
will be paid. If the Member was married on his date of death, a life benefit
shall be paid to his surviving spouse in an amount equal to 50% of the Member's
Accrued Benefit on his date of death. In the event such spouse dies prior to
receiving 60 monthly payments, the same amount shall be continued to the spouse's
Beneficiary until a total of 60 monthly payments have been made. If the
Beneficiary dies before the 60 monthly payments have been made, the remaining
payments or the Actuarial Equivalent of the remaining payments, shall be paid
in a single sum to the estate of such Beneficiary. If the Member was not married
on his date of death, a benefit shall be paid to the Member's designated
Beneficiary (or if none, his estate) , in an amount equal to 50% of the Member's
Accrued Benefit on his date of death. Such benefit may be paid over a 60-month
period or in an Actuarially Equivalent single sum payment.
Section 2. Death of an Active Member Between Normal and Delayed
Retirement Dates. In the event a Member continues in City employment after his
Normal Retirement Date, and dies before actually retiring, then he shall be
deemed to have retired on the first day of the calendar month in which he dies.
If no other form of payment has been elected, the Member shall be deemed to have
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elected the 100% Joint and Survivor Optional Form of Benefit provided for in
Article VII, Section 2, and payments shall be made in accordance with this option
to the Beneficiary designated by the Member.
Section 3. Death of a Retired Member. In the event a Retired Member dies
while receiving Retirement Benefit payments, his death benefit, if any, will be
determined by the form of Retirement Benefit being paid.
Section 4. Uniform Simultaneous Death Act. The provisions of any State
law providing for the distribution of estates under the Uniform Simultaneous
Death Act shall govern the distribution of money payable under this Plan when
applicable.
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ARTICLE IX
Severance Benefits
Section 1. Coverage. Benefits shall be paid to a Member under this
Article if his employment terminates for reasons other than retirement,
disability or death.
Section 2. Six or More Years of Service. In the event a Member's
employment terminates prior to his Normal Retirement Date, and he has six or more
years of Credited Service, he shall become a Vested Member. A Vested Member
shall be entitled to a deferred Retirement Benefit which shall be the vested
portion (as shown in the table below) of his Accrued Benefit on the date of the
termination of his Credited Service.
Completed Years Percent of Vested
Of Credited Service Accrued Benefit
Less than 6 0%
6 20%
7 40%
8 60%
9 80%
10 or more 100%
Such deferred Retirement Benefit shall be payable at the Vested Member's Normal
Retirement Date.
If the deferred Retirement Benefit to which a Vested Member will be
entitled at his Normal Retirement Date is less than $100.00 per month, the Vested
Member shall be paid, as of the date his employment terminates, a single sum
equal to the Actuarial Equivalent of such deferred Retirement benefit, in lieu
of all other benefits due to such Vested Member under this Plan.
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In lieu of receiving a deferred Retirement Benefit upon his Normal
Retirement Date, the Vested Member may elect to receive a reduced Retirement
Benefit beginning upon the first of any month subsequent to his attainment of
age 55. The reduction shall be 1/180 for each of the first 60 months and 1/360
for each additional month beyond the first 60 months by which payments commence
prior to the first of the month following his Normal Retirement Date.
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ARTICLE X
Contributions
Section 1. Member Contributions. Members are not required or permitted
to make contributions under this Plan.
Section 2. City Contributions. The City shall make contributions to the
Fund adequate to finance the benefits which the Plan provides on a sound
actuarial basis. The required contributions to the Plan shall be determined by
a competent actuary. The City expects to continue such contributions to the
Plan, but assumes no responsibility to do so and reserves the right to suspend
or to reduce contributions at any time upon appropriate action by an amendment
to the Plan by the City Council.
Notwithstanding any other provisions hereof or any amendment hereto to the
contrary, at no time shall any assets of the 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, Retired Members, Vested Members, or their
Beneficiaries under the Plan except such funds which upon termination of the Plan
are in excess of the amount required to fully fund the Plan and which are due
to erroneous actuarial assumptions.
Section 3. Application of Forfeitures. Any amount forfeited because of
termination of employment of a Member prior to his having become 100% vested in
his Retirement Benefits (because of his death or for any other reason) , shall
not be applied to increase the benefits provided by the Plan unless such benefits
are increased by appropriate amendment, as provided in Article XIV.
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Amg_U XI
Administration of the Plan
Section 1. Retirement Committee. A Retirement Committee composed of five
members shall administer the Plan. One of said members shall be the Director
of Finance, who shall keep all records and minutes of meetings. Three of said
members, other than the Director of Finance, shall be Employees who are covered
by the Plan. All members of the Committee, other than the Director of Finance,
shall be appointed by the City Council to serve at its pleasure and for
overlapping terms designated by the City Council. All members of the Committee
who are not Employees of the City shall be tax-paying electors of the City.
A majority of the five members of the Committee shall constitute a quorum.
All actions taken by the Committee shall be approved by a majority vote of all
of the members of the Committee present.
No member of the Committee shall receive compensation for his service on
the Committee but a member may be reimbursed for reasonable expenses incurred
in connection with his duties as a member of the Committee.
Section 2. Management of the Plan. The Retirement Committee shall have
all powers necessary to effect the management and administration of the Plan in
accordance with its terms, including, but not limited to, the following:
(a) To designate a Funding Agent, which may be the Retirement
Committee, to manage the Retirement Fund.
(b) To establish rules and regulations for the administration of the
Plan, for managing and discharging the duties of the Committee, for the
Committee's own government and procedure in so doing, and for the
preservation and the protection of the Funds.
(c) To interpret the provisions of the Plan and to determine any and
all questions arising under the Plan or in connection with the
administration thereof. A record of such actions and all other matters
properly coming before the Committee shall be kept and preserved.
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(d) To determine all considerations affecting the eligibility of any
Employee to be or become a Member of the Plan.
(a) To determine the Credited Service of any Member and to compute
the amount of Retirement Benefit, or other sum, payable under the Plan to
any person.
(f) To authorize and direct all disbursements of Retirement Benefits
and other sums under the Plan.
(g) With the advice of its actuary, to adopt, such mortality and
other tables as it may deem necessary or appropriate for the operation of
the Plan from time to time.
(h) To make or arrange for valuations and appraisals of Fund assets
held under the Plan, and, with the advice of the actuary, to determine the
liabilities of the Plan.
(i) To hold assets of the Plan in a special account entitled
"Retirement Plan Fund," and invest and reinvest the same and to make such
withdrawals therefrom as are authorized by the Plan for the payment of
Retirement Benefits and the expenses of the Committee and the members
thereof.
(j) To maintain such records and accounts and to render such
financial statements and reports as may be required by the City Council.
(k) To authorize one or more members of the Retirement Committee to
sign all legal.documents and reports on behalf of the Retirement Committee.
Section 3. Miscellaneous. All proper expenses incurred by the Retirement
Committee in the administration of the Plan, if not paid by the City, shall be
paid from the Fund when authorized by the Retirement Committee.
The Retirement Committee shall have no power to add to, subtract from or
modify any of the terms of the Plan, nor to change or add to any benefits
provided by the Plan, nor to waive or fail to apply any requirements of
eligibility for Retirement Benefits under the Plan.
A member of the Retirement Committee shall not vote on any matter relating
solely to himself or to his rights or benefits under the Plan. If a Committee
member is so disqualified to act and the remaining members cannot agree, the City
Council shall appoint a temporary substitute member to exercise all of the powers
of the disqualified member concerning the matter in which he is disqualified.
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The decision of the Retirement Committee and any action taken by it in
respect to the management of the Plan shall be conclusive and binding upon any
and all Employees, officers, former Employees and officers, Members, Retired
Members, Vested Members, their Beneficiaries, heirs, distributees, executors,
and administrators and upon all other persons whomsoever, but the Committee at
all times shall act in a uniform and nondiscriminatory manner. Neither the
establishment of this Plan nor any modifications thereof or any action taken
thereunder or any omission to act, by the Retirement Committee, the City Council
or any of their members shall be construed as giving to any Member or other
person any legal or equitable right against the City or any officer or employee
thereof or against the Retirement Committee, the City Council, or any of their
members.
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ARTICLE XII
Method of Funding
Section 1. Fundine. The Retirement Committee shall decide whether it
shall handle the Fund or shall appoint an insurance company, a trustee, or
another funding vehicle, to hold and invest the Retirement Fund. The Retirement
Committee shall have the power to change such funding at any time upon notice
required by the terms of the Funding Agreement.
Section 2. Assets. All of the assets of the Plan shall be held by the
Funding Agent acting under a Funding Agreement for use in providing the benefits
under the Plan. No part of the said corpus or income shall be used for or
diverted to purposes other than for the exclusive benefit of the Members, Retired
Members, Vested Members, their Beneficiaries or estates under the Plan, prior
to the satisfaction of all liabilities hereunder with respect to them, except
such funds which, upon termination of the Plan, are in excess of the amount
required to fully fund the Plan and are due solely to erroneous actuarial
assumptions. No person shall have any interest in or right to any part of the
assets of the fund except as and to the extent expressly provided in the Plan.
Section 3. Duties of the Funding Agent. The duties of the Funding Agent
shall include but shall not be limited to the following:
(a) It shall receive from the City, all contributions to the Fund
herein established.
(b) It shall receive all of the income from the Fund.
(c) It shall pay out of the Fund, upon written instructions from the
Retirement Committee, the funds required for payments under the Plan.
(d) It shall invest and reinvest the corpus and income of the Fund,
subject to the requirements of the Plan, as directed by the Retirement
Committee and as set forth in the funding agreement.
(e) It shall maintain such records and accounts of the Fund, and
shall render such financial statements and reports thereof, as may be
required from time to time by the City Council or the Retirement Committee.
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Section 4. Investment Powers. The investment of the corpus of the Fund
shall be made according to the powers and limitations set forth in the Funding
Agreement.
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ARTICLE XIII
Retirement Benefits and Rights Inalienable
Section 1. Inalienability. Members, Retired Members, Vested Members and
their Beneficiaries under the Plan are hereby restrained from selling,
transferring, anticipating, assigning, hypothecating, or otherwise disposing of
their Retirement Benefit, prospective Retirement Benefit, or any other rights
or interest under the Plan, and any attempt to anticipate, assign, pledge, or
otherwise dispose of the same shall be void. Said Retirement Benefit,
prospective Retirement Benefit and rights and interests of said Members, Retired
Members, Vested Members or Beneficiaries shall not at any time be subject to the
claims of creditors or liabilities or torts of said Members, Retired Members,
Vested Members or Beneficiaries, nor be liable to attachment, execution, or other
legal process. Notwithstanding the foregoing, the Retirement Committee may
approve payment to an alternate payee based upon any "qualified domestic
relations order" as defined in Code Section 414(p) , and such payment shall not
be deemed to be a prohibited alienation of benefits.
Section 2. Bankruptcy. If any Member, Retired Member, Vested Member or
Beneficiary shall become bankrupt or attempt to anticipate, assign or pledge any
benefits under this Plan, then such benefits shall cease, and in that event the
Retirement Committee shall have the authority to cause the same, or any part
thereof, to be held or applied to or for the benefit of such Member, his spouse,
his children, or other dependents, or any of them, in such manner and in such
proportions as the Retirement Committee shall decide.
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ARTICLE XIV
Modification or Termination of Plan
Section 1. Expectation. It is the expectation of the City Council that
it will continue this Plan and the payment of its contributions hereunder
indefinitely, but continuance of the Plan is not assumed as a contractual
obligation of the City.
Section 2. Amendment. The City Council reserves the right to alter,
amend, or terminate the Plan or any part thereof in such manner as it may
determine, and such alterations, amendment or termination shall take effect upon
notice thereof from the City Council to the Retirement Committee; provided that
no such alteration or amendment shall permit any part of the Fund to revert to
or be recoverable by the City or to be used for or diverted to purposes other
than for the exclusive benefit of Members, Retired Members, Vested Members or
Beneficiaries under the Plan, except such monies, if any, that may remain after
termination of the Plan and the funding agreement (and after satisfaction of all
liabilities with respect to Members, Retired Members, Vested Members and
Beneficiaries under the Plan) and which are due solely to erroneous actuarial
assumptions.
Section 3. Approval Under the Internal Revenue Code. The Plan is
intended to comply with the requirements of the applicable provisions of Code
Section 401(a) as now in effect or as hereafter amended, and any modification
or amendment of the Plan may be made retroactive, as necessary or appropriate,
to establish and maintain such compliance.
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Section 4. Discontinuance. The City Council reserves the right at any
time and for any reason satisfactory to it to discontinue permanently all
contributions under this Plan. Such discontinuance shall be deemed to be a
complete termination of the Plan.
Section 5. Termination. In the event of a partial or complete
termination of the Plan, all affected monies covered by the Plan and the funding
agreement shall be allocated to Members, Retired Members, Vested Members and
Beneficiaries in proportion to the actuarial reserves for each Member's (or
Beneficiary's) Accrued Benefit at the date of termination of the Plan.
Section 6. Distribution. When the monies covered by the Plan and the
funding agreement have been allocated as indicated above, the distribution may
be made in the form of cash or nontransferable annuity contracts as determined
by the Retirement Committee, provided that any monies remaining after the
satisfaction of all liabilities to Members, Retired Members, Vested Members and
Beneficiaries under the Plan may be withdrawn by the Retirement Committee from
the Fund and refunded to the City.
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ARTICLE XV
Benefit Restrictions on Early Termination
Section 1. Restrictions. Notwithstanding any other provision hereof, the
benefits provided by City contributions for Members described in Section 2 herein
shall be subject to the following conditions:
(a) Payment in full shall be made of such benefits which have been
provided by City contributions not exceeding the larger of the following
amounts: (1) $20,000; or (ii) an amount equal to 20% of the first $50,000
of the Member's average regular annual Compensation multiplied by the
number of years between the date of the establishment of this Plan and (1)
the date that the Plan terminates or (2) if benefits become payable to a
Member described in Section 2 herein within ten years after the date of the
establishment of this Plan, the date the benefits of such Member first
become payable (if before the date of termination of this Plan) or (3) if
benefits become payable to a Member described in Section 2 herein after the
Plan has been in effect for ten years and if the full current costs of the
Plan for the first ten years have not been met or if the full current costs
have not been met on the dates referred to in (1) or (2) above, the date
of the failure to meet the full current costs;
(b) If (1) this Plan is terminated within ten years after its
establishment or (2) the benefits of any of the Members described in
Section 2 herein become payable within ten years after the establishment
of this Plan or (3) the benefits of any of such Members become payable
after this Plan has been in effect for ten years and at the time such
benefits become payable the full current costs for the first ten years have
not been met, the benefits which any of such Members may receive from City
contributions shall not exceed the benefits set forth in paragraph (a) of
this Section. This limitation shall cease to be effective at such time,
at or after the expiration of ten years from the date of the establishment
of this Plan, if the full current costs of the Plan have first been met;
(c) If a Member described in Section 2 herein leaves the employ of
the City, the benefits which he may receive from City contributions shall
not at any time, within the first ten years after the establishment of this
Plan, exceed the benefits set forth in (a) herein, if, at the end of ten
years after the date of the establishment of this Plan the full current
costs of the first ten years have not been met, the benefits such Member
may receive from City contributions shall not exceed the benefits set forth
in (a) herein until the first time that the full current costs of this Plan
have been met;
(d) These conditions shall not restrict the full payment of any
benefits on behalf of a Member who dies while this Plan is in full effect
and its full current costs have been met;
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(e) These conditions shall not restrict the current payment of full
Retirement Benefits called for by this Plan for any Retired Member while
this Plan is in full effect and its full current costs have been met;
(f) This Section is intended to conform to the requirements of
Treasury Regulation, Section 1.401-4(c) and shall cease to be effective at
such time as the provisions of Treasury Regulation 1.401-4(c) or any
substitute therefor are no longer effective or applicable.
Section 2. Members Affected by Section 1. The Members referred to in
Section 1 herein shall be limited to those whose anticipated annual benefit
hereunder shall exceed $1,500 and who at the Effective Date hereof are among the
twenty-five highest paid employees of the City, whether or not initially eligible
for membership.
Section 3. Amendment of the Plan. If the Plan is amended to increase
benefits which would substantially increase the extent of possible discrimination
as to contributions or as to benefits upon termination of the Plan, the
restrictions set forth in Section 1 of this Article XV shall be applied to the
Plan as if it were a new plan established on the date of such change.
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ARTICLE XVI
Limitations
Section 1. Reemployment of Former Members. If a Member's employment
terminates prior to becoming eligible for a Retirement Benefit and the Member
is subsequently reemployed as an Employee, such Member shall not be entitled to
receive credit for his previous Credited Service under the Plan, except as
provided in Article IV.
Section 2. Reemployment of Retired Members. If a Retired Member is
reemployed as an Employee of the City, no Retirement Benefit payments shall be
made during the period of such reemployment. Upon the subsequent termination
of employment by such a Member, the Member shall be entitled to receive a
Retirement Benefit based on his total Credited Service prior to the date of his
previous Retirement, during the period of his reemployment and in the case of
a disabled Member, his Credited Service while disabled. In the case of
reemployment of a Retired Member who received any Pension payments prior to his
reemployment, the Retirement Benefit payable upon his subsequent retirement shall
be reduced by the Actuarial Equivalent of the Pension payments, other than
Disability Pension payments, he received prior to his Normal Retirement Date.
Section 3. Limitation of Benefits. Notwithstanding any other provision
contained herein to the contrary, the benefits payable to an Employee from this
Plan provided by City contributions shall be subject to the limitations of Code
Section 415 in accordance with (1) and (2) below:
(1) Defined Benefit Plan Only: Any annual Pension payable to an Employee
hereunder shall not exceed the lesser of:
(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, or, if greater, the amount of straight
life or qualified joint and survivor annuity accrued by the Member as of
December 31, 1982.
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(b) 100% of the Employee's average earnings for the three consecutive
calendar years, while a Member in the Plan, in which his earnings were the
highest. For purposes of this subsection, earnings for the calendar year
shall be the Employee'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, commission 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 year. Earnings shall exclude the following:
(i) City contributions to a plan of deferred compensation which
are not included in the Employee'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
Employee, 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 Employee) .
Except as provided 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 City. In the event that a Member has been
credited with less than ten years of participation 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 participation service and the denominator of which is ten.
The preceding sentence shall, to the extent required by the Secretary of the
Treasury, be applied separately to each change in benefit accrual rate hereunder.
In the even that a Member has been credited with less than ten (10) years of
participation service, the percentage-of-average-earnings limitation otherwise
applicable under (b) above and the dollar amount otherwise applicable under the
first sentence of this paragraph shall be reduced by multiplying each by a
fraction, the numerator of which is the number of such Member's years of
participation service (or part thereof) , but never less than one (1) , and the
denominator of which is ten (10) .
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 commencing 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 the Actuarial Equivalent of $75,000
commencing at age 55, if payment commences before age 55. If payment commences
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after age 65, the limitation shall be the Actuarial Equivalent of a $90,000
annual benefit commencing 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 optional 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 age 65.
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 survivor annuity amounts) duly accrued by such
Member under Code Section 415 limitations then in effect as of December 31, 1982
(disregarding any plan changes or cost-of-living adjustments occurring after
July 1, 1982, as to the 1982 accrued amount) .
(2) Defined Benefit and Defined Contribution Plans: If, in any Limitation
Year, a Member also 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 Code Section 415(c)(2)) 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 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 Limitation Years during which the Employee was
employed by the City (provided, however, at the election of the Committee, 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 Code
Section 415(e)(6)(B)) .
If, in any Limitation Year, the sum of the Defined Benefit Plan Fraction
and the Defined Contribution Plan Fraction for a Member would exceed one without
adjustment 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 for such Member to one, or the Committee may take such other
actions as will cause the sum to equal one or less.
For purposes of this Section, the Limitation Year shall be the calendar year.
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Section 4. Consolidation or Meraer. This Plan shall not be merged or
consolidated with, nor shall any assets or liabilities be transferred to any
other Plan, unless the benefits payable to each Member (if the Plan were
terminated immediately after such action) would be equal to or greater than the
benefits to which such Member would have been entitled if this Plan had been
terminated immediately before such action.
RECOMMENDED AND APPROVED in Fort Collins, Colorado this C: th day of
IJLC.✓1C-- 1990.
CITY OF FORT COLLINS, COLORADO
BY: J6 40 lu fisy+''
M yo
ATTEST:
IL &
City Clerk
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