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HomeMy WebLinkAbout2008-007-01/15/2008-ADOPTING THE SIXTH AMENDMENT TO THE CITY OF FORT COLLINS GENERAL EMPLOYEES RETIREMENT PLAN AS AMENDE RESOLUTION 2008-007 OF THE COUNCIL OF THE CITY OF FORT COLLINS ADOPTING THE SIXTH AMENDMENT TO THE CITY OF FORT COLLINS GENERAL EMPLOYEES' RETIREMENT PLAN AS AMENDED AND RESTATED DECEMBER 31, 2001 WHEREAS,the City of Fort Collins adopted,effective January 1, 1971, a qualified defined benefit pension plan known as the City of Fort Collins Employees'Retirement Plan(the"Plan"),for the purpose of providing retirement benefits for certain of its employees; and WHEREAS, the City of Fort Collins has amended the Plan from time to time and restated the Plan to incorporate all prior amendments and other changes required by law effective December 31, 2001; and WHEREAS, the City Council adopted the first amendment to the 2001 Restated Plan effective January 1, 2002, via the adoption of Section 2 of Resolution 2001-157, the second amendment to the 2001 Restated Plan effective January 1, 2002, via the adoption of Resolution 2002-103, the third amendment to the 2001 Restated Plan effective July 1, 2003, via the adoption of Resolution 2003-078, the fourth amendment to the 2001 Restated Plan effective April 10,2006, via the adoption of Resolution 2006-029, and the fifth amendment to the 2001 Restated Plan effective March 20, 2007, via the adoption of Resolution 2007-029; and WHEREAS, the Retirement Committee ("the Committee") has recommended to City Council a sixth amendment to the 2001 Restated Plan to incorporate technical tax law changes from the federal Pension Protection Act of 2006,as well as other changes required by applicable laws and regulations; and WHEREAS, the City Council wishes to adopt the recommendation of the Committee; and WHEREAS, Article XV, Modification or Termination of Plan, Section 2 of the 2001 Restated Plan, authorizes the City Council to amend the terms of the 2001 Restated Plan. NOW, THEREFORE, BE IT RESOLVED BY THE COUNCIL OF THE CITY OF FORT COLLINS as follows: Section 1. That effective January 1, 2008, Section 3 of Article VII of the City of Fort Collins General Employees' Retirement Plan is amended to read as follows: Section 3. Delayed Retirement. A Member may continue in the employment of the City after their Normal Retirement Date. If the retirement of a Member is delayed under this Section, their"Delayed Retirement Date"shall be the first of the month coincident with or following the Member's retirement. Notwithstanding the foregoing paragraph,after a Member reaches his orher Required Beginning Date, required minimum distributions must be made to the Member in RESOLUTION 2008-007 OF THE COUNCIL OF THE CITY OF FORT COLLINS ADOPTING THE SIXTH AMENDMENT TO THE CITY OF FORT COLLINS GENERAL EMPLOYEES' RETIREMENT PLAN AS AMENDED AND RESTATED DECEMBER 31, 2001 WHEREAS,the City of Fort Collins adopted, effective January 1, 1971,a qualified defined benefit pension plan known as the City of Fort Collins Employees'Retirement Plan(the"Plan"),for the purpose of providing retirement benefits for certain of its employees; and WHEREAS, the City of Fort Collins has amended the Plan from time to time and restated the Plan to incorporate all prior amendments and other changes required by law effective December 31, 2001; and WHEREAS, the City Council adopted the first amendment to the 2001 Restated Plan effective January 1, 2002, via the adoption of Section 2 of Resolution 2001-157, the second amendment to the 2001 Restated Plan effective January 1, 2002, via the adoption of Resolution 2002-103, the third amendment to the 2001 Restated Plan effective July 1, 2003,via the adoption of Resolution 2003-078, the fourth amendment to the 2001 Restated Plan effective April 10, 2006, via the adoption of Resolution 2006-029, and the fifth amendment to the 2001 Restated Plan effective March 20, 2007, via the adoption of Resolution 2007-029; and WHEREAS, the Retirement Committee ("the Committee") has recommended to City Council a sixth amendment to the 2001 Restated Plan to incorporate technical tax law changes from the federal Pension Protection Act of 2006,as well as other changes required by applicable laws and regulations; and WHEREAS, the City Council wishes to adopt the recommendation of the Committee; and WHEREAS, Article XV, Modification or Termination of Plan, Section 2 of the 2001 Restated Plan, authorizes the City Council to amend the terms of the 2001 Restated Plan. NOW, THEREFORE, BE IT RESOLVED BY THE COUNCIL OF THE CITY OF FORT COLLINS as follows: Section 1. That effective January 1, 2008, Section 3 of Article VII of the City of Fort Collins General Employees' Retirement Plan is amended to read as follows: Section 3. Delayed Retirement. A Member may continue in the employment of the City after their Normal Retirement Date. If the retirement of a Member is delayed under this Section,their"Delayed Retirement Date" shall be the first of the month coincident with or following the Member's retirement. Notwithstanding the foregoing paragraph,after a Member reaches his or her Required Beginning Date, required minimum distributions must be made to the Member in accordance with IRS Code Section 401(a)(9), as further set forth in Section 1 of Article X of the Plan. Section 2. That effective March 28, 2005, Section 4 of Article VIII of the City of Fort Collins General Employees' Retirement Plan is amended to read as follows: 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 last day of the month of their Retirement Date, and continuing at monthly intervals for the Retired Member's lifetime thereafter. If a Retired Member or Beneficiary should die during a monthly interval,a partial monthly payment shall be paid. Notwithstanding the above, if the value of a terminated Member's vested Accrued Benefit derived does not exceed$1,000,the entire vested benefit shall be paid to such Member in a single lump sum, regardless of when the Member terminated Covered Employment. Section 3. That effective January 1, 2008, Section 1 of Article X of the City of Fort Collins General Employees' Retirement Plan is amended to read as follows: Section 1. General. Subject to such uniform rules and regulations as the Retirement Committee may prescribe and the spousal consent as required in this Article X, Section 6, a Member or Vested Member may, in lieu of the basic Retirement Benefits provided in Article VIII, elect one of the following forms of Retirement Benefits which shall be the Actuarial Equivalent of the benefit to which they 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 their 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. Notwithstanding any provision of this Plan to the contrary, any payment under the Plan pursuant to an optional form of benefit shall be made in accordance with IRS Code Section 401(a)(9) and the regulations established thereunder, as they are amended, including the following rules: a. To the extent required by IRS Code Section 401(a)(9) and the regulations promulgated thereunder,payment of the benefits of a Member shall begin not later than the Required Beginning Date. b. No payment option may be selected by a Member unless the amounts payable to the Member are expected to be at least equal to the minimum distribution required under IRS Code Section 401(a)(9). -2- accordance with IRS Code Section 401(a)(9), as further set forth in Section I of Article X of the Plan. Section 2. That effective March 28, 2005, Section 4 of Article VIII of the City of Fort Collins General Employees' Retirement Plan is amended to read as follows: 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 last day of the month of their Retirement Date, and continuing at monthly intervals for the Retired Member's lifetime thereafter. If a Retired Member or Beneficiary should die during a monthly interval,a partial monthly payment shall be paid. Notwithstanding the above, if the value of a terminated Member's vested Accrued Benefit derived does not exceed$1,000,the entire vested benefit shall be paid to such Member in a single lump sum, regardless of when the Member terminated Covered Employment. Section 3. That effective January 1, 2008, Section 1 of Article X of the City of Fort Collins General Employees' Retirement Plan is amended to read as follows: Section 1. General. Subject to such uniform rules and regulations as the Retirement Committee may prescribe and the spousal consent as required in this Article X, Section 6, a Member or Vested Member may, in lieu of the basic Retirement Benefits provided in Article VIII, elect one of the following forms of Retirement Benefits which shall be the Actuarial Equivalent of the benefit to which they 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 their Retirement Benefits under this Plan. The election of an optional form of benefit maybe changed at any time prior to 30 days preceding the due date of the first payment of Retirement Benefits under the Plan. Notwithstanding any provision of this Plan to the contrary, any payment under the Plan pursuant to an optional form of benefit shall be made in accordance with IRS Code Section 401(a)(9) and the regulations established thereunder, as they are amended, including the following rules: a. To the extent required by IRS Code Section 401(a)(9) and the regulations promulgated thereunder,payment of the benefits of a Member shall begin not later than the Required Beginning Date. b. No payment option may be selected by a Member unless the amounts payable to the Member are expected to be at least equal to the minimum distribution required under IRS Code Section 401(a)(9). -2- C. The amounts payable must satisfy the minimum distribution incidental benefit requirements of IRS Code Section 401(a)(9)(G). d. Distributions in the event of a Member's death are subject to the minimum distribution rules of IRS Code Section 401(a)(9) and the regulations thereunder. Section 4. That effective March 28, 2005, Section 3 of Article XII of the City of Fort Collins General Employees' Retirement Plan is amended to read as follows: Section 3. Single Lump Sum Benefit. Following termination of employment with the City of Fort Collins and in lieu of receiving a monthly Retirement Benefit upon their Normal or Early Retirement Date, a Vested Member has the option of receiving a single lump sum benefit equal to the Actuarial Equivalent of the Member's deferred Retirement Benefit as defined by Article II, Section 2, Subsections b(2)(b) and b(3) of this Plan. To receive this lump sum benefit, the Vested Member must make a written request for this benefit at or after the time of termination of employment but not less than 30 days prior to the due date of the first payment of the Normal or Early Retirement Benefit. If so requested, this lump sum benefit shall be paid within 90 days of the receipt of the written request. If the value of a terminated Vested Member's derived Accrued Benefit does not exceed $1,000, the entire vested benefit shall be paid to such Member in a single lump sum, regardless of when the Member terminated employment with the Cityof Fort Collins. If the deferred Retirement Benefit to which a Vested Member will be entitled at their Normal Retirement Date is less than $100.00 per month, the Vested Member shall not have the election set forth in the previous paragraph and they shall be paid,within 90 days of termination of employment with the City of Fort Collins, 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. For Vested Members who commenced Covered Employment prior to June 1, 1998, said Actuarial Equivalent specified in this paragraph shall be as defined by Article II, Section 2, Subsections b(2)(a) and b(3) of this Plan. For Vested Members who commenced Covered Employment on or after June 1, 1998, said Actuarial Equivalent specified in this paragraph shall be as defined by Article II,Section 2, Subsections b(2)(b)and b(3) of this Plan. Section 5. That effective January 1,2008, Section 2.b. of Article XIII of the City of Fort Collins General Employees' Retirement Plan is amended to read as follows: b. "Distributee"means a Member or Retired Member. In addition a Member's or Retired Member's surviving spouse and the Member's or Retired Member's spouse or former spouse who is the alternate payee under a Qualified Domestic Relations Order as defined in Article II, Section 2.v, are -3- C. The amounts payable must satisfy the minimum distribution incidental benefit requirements of IRS Code Section 401(a)(9)(G). d. Distributions in the event of a Member's death are subject to the minimum distribution rules of IRS Code Section 401(a)(9) and the regulations thereunder. Section 4. That effective March 28, 2005, Section 3 of Article XII of the City of Fort Collins General Employees' Retirement Plan is amended to read as follows: Section 3. Single Lump Sum Benefit. Following termination of employment with the City of Fort Collins and in lieu of receiving a monthly Retirement Benefit upon their Normal or Early Retirement Date, a Vested Member has the option of receiving a single lump sum benefit equal to the Actuarial Equivalent of the Member's deferred Retirement Benefit as defined by Article II, Section 2, Subsections b(2)(b) and b(3) of this Plan. To receive this lump sum benefit, the Vested Member must make a written request for this benefit at or after the time of termination of employment but not less than 30 days prior to the due date of the first payment of the Normal or Early Retirement Benefit. If so requested, this lump sum benefit shall be paid within 90 days of the receipt of the written request. If the value of a terminated Vested Member's derived Accrued Benefit does not exceed $1,000, the entire vested benefit shall be paid to such Member in a single lump sum, regardless of when the Member terminated employment with the City of Fort Collins. If the deferred Retirement Benefit to which a Vested Member will be entitled at their Normal Retirement Date is less than$100.00 per month, the Vested Member shall not have the election set forth in the previous paragraph and they shall be paid,within 90 days of termination of employment with the City of Fort Collins, 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. For Vested Members who commenced Covered Employment prior to June 1, 1998, said Actuarial Equivalent specified in this paragraph shall be as defined by Article II, Section 2, Subsections b(2)(a) and b(3) of this Plan. For Vested Members who commenced Covered Employment on or after June 1, 1998, said Actuarial Equivalent specified in this paragraph shall be as defined by Article II, Section 2, Subsections b(2)(b)and b(3) of this Plan. Section 5. That effective January 1,2008,Section 2.b.of Article XIII of the City of Fort Collins General Employees' Retirement Plan is amended to read as follows: b. "Distributee"means a Member or Retired Member. In addition a Member's or Retired Member's surviving spouse and the Member's or Retired Member's spouse or former spouse who is the alternate payee under a Qualified Domestic Relations Order as defined in Article 11, Section 2.v, are -3- Distributees with regard to the interest of the spouse or former spouse. Further,a Member's or Retired Member's Beneficiary that is a person other than a spouse or former spouse is a Distributee with respect to the Beneficiary's interest in the Plan. Section 6. That effective January 1,2008, Section 2.c.of Article XIII of the City of Fort Collins General Employees' Retirement Plan is amended to read as follows: C. "Ehizible Retirement Plan"means an individual retirement account described in IRS Code Section 408(a), an individual retirement annuity described in IRS Code Section 408(b), a Roth IRA described in IRS Code Section 408A (subject to applicable income tax requirements),an annuity described in IRS Code Section 403(a), an annuity described in IRS Code Section 403(b), an eligible plan under IRS 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, or a qualified trust described in IRS Code Section 401(a),that accepts the Distributee's Eligible Rollover Distribution. The definition of Eligible Retirement Plan shall also apply to the case of a distribution to a surviving spouse of a Member or Retired Member, or to a spouse or former spouse of a Member or Retired Member who is the alternate payee under a Qualified Domestic Relations Order as defined in Article II, Section 2.v. In the case of a distribution to a Beneficiary other than a spouse or former spouse of a Member or Retired Member, an Eligible Retirement Plan shall only be an individual retirement account described in IRS Code Section 408(a) or an individual retirement annuity described in IRS Code Section 408(b) that is treated as an inherited IRA in accordance with the provisions of IRS Code Section 402(c)(11). Section 7. That effective January 1, 2008, Section 1 of Article XVI of the City of Fort Collins General Employees' Retirement Plan is amended to read as follows: Section 1. Limitation of Benefits. Notwithstanding any other provision contained herein to the contrary, the benefits payable to a Member from this Plan provided by City contributions shall be subject to the limitations of IRS Code Section 415 in accordance with a. and b. below: a. Any annual Pension payable to a Member hereunder shall not exceed the "defined benefit dollar limitation"under IRS Code Section 415(b),which is $160,000, as adjusted under IRS Code Section 415(d) in such manner as the Treasury Secretary shall prescribe, and payable in the form of a straight life annuity. The maximum annual Pension shall be adjusted when required, as provided in paragraph 1. below, and if applicable, 2. or 3. below. -4- Distributees with regard to the interest of the spouse or former spouse. Further,a Member's or Retired Member's Beneficiary that is a person other than a spouse or former spouse is a Distributee with respect to the Beneficiary's interest in the Plan. Section 6. That effective January 1,2008, Section 2.c. of Article XIII of the City of Fort Collins General Employees'Retirement Plan is amended to read as follows: C. `Eligible Retirement Plan"means an individual retirement account described in IRS Code Section 408(a), an individual retirement annuity described in IRS Code Section 408(b), a Roth IRA described in IRS Code Section 408A (subject to applicable income tax requirements), an annuity described in IRS Code Section 403(a), an annuity described in IRS Code Section 403(b), an eligible plan under IRS 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, or a qualified trust described in IRS Code Section 401(a),that accepts the Distributee's Eligible Rollover Distribution. The definition of Eligible Retirement Plan shall also apply to the case of a distribution to a surviving spouse of a Member or Retired Member, or to a spouse or former spouse of a Member or Retired Member who is the alternate payee under a Qualified Domestic Relations Order as defined in Article II, Section 2.v. In the case of a distribution to a Beneficiary other than a spouse or former spouse of a Member or Retired Member, an Eligible Retirement Plan shall only be an individual retirement account described in IRS Code Section 408(a) or an individual retirement annuity described in IRS Code Section 408(b) that is treated as an inherited IRA in accordance with the provisions of IRS Code Section 402(c)(11). Section 7. That effective January 1, 2008, Section 1 of Article XVI of the City of Fort Collins General Employees' Retirement Plan is amended to read as follows: Section 1. Limitation of Benefits. Notwithstanding any other provision contained herein to the contrary, the benefits payable to a Member from this Plan provided by City contributions shall be subject to the limitations of IRS Code Section 415 in accordance with a. and b. below: a. Any annual Pension payable to a Member hereunder shall not exceed the "defined benefit dollar limitation"under IRS Code Section 415(b), which is $160,000, as adjusted under IRS Code Section 415(d) in such manner as the Treasury Secretary shall prescribe, and payable in the form of a straight life annuity. The maximum annual Pension shall be adjusted when required, as provided in paragraph 1. below, and if applicable, 2. or 3. below. -4- I. Fewer Than Ten(10)Years of Participation. If the Member has fewer than ten (10) years of participation in the Plan, the defined benefit dollar limitation shall be multiplied by a fraction, the numerator of which is the number of years (or part thereof) of participation in the Plan and the denominator of which is ten (10). 2. Payment Beginning before Age 62. If payment to a Member commences before the Member attains age sixty-two(62),the defined benefit dollar limitation applicable to the Member at such earlier age is an annual benefit payable in the form of a straight life annuity beginning at the earlier age that is the Actuarial Equivalent of the defined benefit dollar limitation applicable to the Member at age sixty-two(62)(adjusted under paragraph 1. above,if required).The defined benefit dollar limitation applicable at an age before age sixty-two (62) is determined as the lesser of(i) the Actuarial Equivalent (at such age) of the defined benefit dollar limitation computed using the interest rate and mortality table specified in Section b. of Article II of the Plan, and (ii) the Actuarial Equivalent (at such age) of the defined benefit dollar limitation computed using a 5%interest rate and the mortality table specified in Section b.(3)of Article II of the Plan. 3. Payment Beginning After Age 65. If payment to a Member commences after the Member attains age sixty-five(65), the defined benefit dollar limitation applicable to the Member at the later age is the annual benefit payable in the form of a straight life annuity beginning at the later age that is the Actuarial Equivalent of the defined benefit dollar limitation applicable to the Member at age sixty-five(65)(adjusted under paragraph 1. above, if required). The Actuarial Equivalent of the defined benefit dollar limitation applicable at an age after age sixty-five (65) is determined as the lesser of(i) the Actuarial Equivalent (at such age) of the defined benefit dollar limitation computed using the interest rate and mortality table specified in Section b. of Article II of the Plan, and (ii) the Actuarial Equivalent (at such age) of the defined benefit dollar limitation computed using a 5% interest rate and the mortality table specified in Section b.(3) of Article II of the Plan. 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 IRS 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). -5- 1. Fewer Than Ten(10)Years of Participation. If the Member has fewer than ten (10) years of participation in the Plan, the defined benefit dollar limitation shall be multiplied by a fraction, the numerator of which is the number of years (or part thereof) of participation in the Plan and the denominator of which is ten (10). 2. Payment Beginning before Age 62. If payment to a Member commences before the Member attains age sixty-two(62),the defined benefit dollar limitation applicable to the Member at such earlier age is an annual benefit payable in the form of a straight life annuity beginning at the earlier age that is the Actuarial Equivalent of the defined benefit dollar limitation applicable to the Member at age sixty-two(62)(adjusted under paragraph 1. above,if required).The defined benefit dollar limitation applicable at an age before age sixty-two (62) is determined as the lesser of(i) the Actuarial Equivalent (at such age) of the defined benefit dollar limitation computed using the interest rate and mortality table specified in Section b. of Article II of the Plan, and (ii) the Actuarial Equivalent (at such age) of the defined benefit dollar limitation computed using a 5%interest rate and the mortality table specified in Section b.(3) of Article II of the Plan. 3. Payment Beginning After Age 65. If payment to a Member commences after the Member attains age sixty-five(65),the defined benefit dollar limitation applicable to the Member at the later age is the annual benefit payable in the form of a straight life annuity beginning at the later age that is the Actuarial Equivalent of the defined benefit dollar limitation applicable to the Member at age sixty-five(65)(adjusted under paragraph 1, above, if required). The Actuarial Equivalent of the defined benefit dollar limitation applicable at an age after age sixty-five (65) is determined as the lesser of(i) the Actuarial Equivalent (at such age) of the defined benefit dollar limitation computed using the interest rate and mortality table specified in Section b. of Article II of the Plan, and (ii) the Actuarial Equivalent (at such age) of the defined benefit dollar limitation computed using a 5% interest rate and the mortality table specified in Section b.(3) of Article II of the Plan. 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 IRS 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). -5- b. Aggregation of Employer Plans. In applying the limits of this Article XVI, Section 1,all defined benefit plans sponsored by the Employer are treated as a single plan. Benefits payable under any other plan with respect to a Member shall be reduced to the extent possible before any reduction will be made in such Member's benefits under this Plan,if necessary to observe these limits. Section 8. That all other terms and provisions of the Plan, as amended, shall remain unchanged and in full force and effect. Passed and adopted at a regular meeting of the Cou f the City of Fort Colli this 15th day of January A.D. 2008. Mayor ATTEST: �a" SM4-� City Clerk 113 -6- b. Aggregation of Employer Plans. In applying the limits of this Article XVI, Section 1,all defined benefit plans sponsored by the Employer are treated as a single plan. Benefits payable under any other plan with respect to a Member shall be reduced to the extent possible before any reduction will be made in such Memb&s benefits under this Plan,if necessary to observe these limits. Section 8. That all other terms and provisions of the Plan, as amended, shall remain unchanged and in full force and effect. Passed and adopted at a regular meeting of the Cou f the City of Fort Colli this 15th day of January A.D. 2008. Mayor ATTEST: �a" swk-� City Clerk -6-