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(a) The board shall appoint an actuary for the purpose of providing annual valuations of the retirement fund. The actuary shall also serve as a technical advisor to the board and the executive director regarding the operations authorized by this chapter. The actuarial assumptions and tables used by the actuary shall assume such costs, liabilities, rates of interest, mortality, turnover and other factors as are reasonable, taking into account the experience of the fund and reasonable expectations, and shall be subject to board approval. At least 30 days before the date the board adopts actuarial assumptions to be used by the fund, the board shall submit to the city council a detailed report regarding the proposed actuarial assumptions. The report must include the fiscal impact of the proposed actuarial assumptions on the fund.
(b) The city shall engage an independent actuary every five years to perform an audit of the actuarial valuations, studies and reports of the fund in accordance with the provisions of Tex. Government Code § 802.1012, as amended.
(Ord. 20471-10-2012, § 2, passed 10-23-2012)
(a) Definition of disabled member. A member is disabled (or continues to be disabled) if, because of bodily injury, disease or mental illness, the member is incapacitated for life, in spite of reasonable accommodations by the city, from performing the essential functions of:
(1) The trade, profession or occupation in which the member was employed by the city when the member suffered the bodily injury, disease or mental illness; and
(2) Any other position which the board determines to be reasonably comparable to the position held by the member, taking into account the member’s education, qualifications, experience, salary and other factors which the board deems appropriate; provided, however, that no physical condition existing at the time of entry into the fund shall be a basis for a disability pension prior to vesting.
(b) General provisions.
(1) Such disability must exist for at least 90 consecutive days prior to application for a disability pension.
(2) Such disability must not have been contracted, suffered or incurred while the member was engaged in, or did not result from the member having engaged in, a criminal enterprise, or from habitual drunkenness, addiction to narcotics, self-inflicted injury, or from voluntary or involuntary service in the Armed Forces of the United States (including the United States Merchant Marine), any of its allies or any other foreign country.
(4) To assist the board in making disability determinations, the city shall provide the executive director with city job descriptions and qualifications, related salary ranges and other appropriate information as requested.
(5) Continuation of a disability pension, whether granted before or after the enactment of this article, shall be subject to all the provisions of this section, including review and determination of the member’s eligibility for a disability pension.
(c) Qualification for disability pension.
(1) A member shall not qualify for a disability pension as hereinafter provided unless one or more duly licensed and practicing physician(s) appointed by the executive director has determined that the member is not capable of performing the essential functions of the positions identified under this section. Determination of the existence of disability shall not be made until 90 days after the date such disability is alleged to have commenced, and benefits shall not commence before the first day of the month following the month in which such 90-day period ends.
(2) The executive director shall have the appointed physician(s) conduct an annual medical examination after a disability pension has been granted (unless deemed not necessary by the executive director due to the member’s medical condition) and at any other time deemed necessary by the board in order to determine whether the disability is continuing. The fund will pay the expenses for medical examinations directed by the executive director or board. To continue to receive a disability pension, the member shall submit to any medical examination required by the executive director or board.
(3) If at any time the board is in reasonable doubt as to whether the member is disabled as above defined, it may suspend the disability pension until the doubt is resolved, which shall occur within a reasonable time. Any disability pension shall be terminated upon the board’s determination that the member is not disabled as defined in this section.
(4) No disability pension coverage shall be provided during a service break in excess of 90 consecutive days unless the service break was caused by sickness or accident leading to total disability.
(5) The disability pension specified herein shall not be payable during any period for which wages are received from the city, the State of Texas or any other branch of government while performing the duties of a firefighter or peace officer.
(6) Falsification or omission on any part of the employment application of prior conditions or injuries for which a disability pension is or has been sought, falsification or omission on any part of the disability pension application, or falsification or omission in connection with the continuation of a disability pension shall constitute grounds for denial of a disability pension or for revocation of any disability pension previously granted.
(7) The board’s determination on all matters concerning the granting, refusing or revoking of a disability pension shall be final and conclusive on all parties, and no appeal can be made therefrom. A member is entitled to a reasonable hearing (at which the member may appear in person, with or by a representative, or in writing) before the board makes its determination.
(8) No disability pension shall be granted (or continued) while the member is working for the city; provided however, a member may be granted a disability pension if the executive director or the board has been informed by the city that the member’s employment is about to be terminated by the city because of the member’s inability to perform the essential functions of the member’s position. Any such disability pension granted under this subsection (c)(8) shall not become effective until the month after the member has stopped working for the city.
(9) Except as otherwise provided by law, to be eligible to continue receiving a disability pension, a member must have complied with the medical recommendations (including rehabilitation therapy and treatment) as prescribed by the member’s treating physician(s), the physician(s) appointed by the executive director and/or the Texas Rehabilitation Commission.
(d) Calculation of disability pension. The calculation for disability pension can be found in the following sections:
(1) Section 2.5-26 for a group III member;
(2) Section 2.5-36 for a group IV member;
(3) Section 2.5-46 for a group I member;
(4) Section 2.5-56 for a group II member;
(5) Section 2.5-66 for a group V firefighter; and
(6) Section 2.5-76 for a group VI firefighter.
(e) Recovery from disability. If the board determines that a disabled member receiving a disability pension hereunder is no longer disabled as above defined, the member’s disability pension shall immediately cease. If such member is re-employed by the city immediately following such determination by the board, the member’s fund membership shall be reinstated as of the date of such re-employment, with full credited service to the date of disability. The member shall receive no additional credited service for the period of disability, provided however, that such period of disability shall be used to determine attainment of normal retirement date and special retirement date. If such member is not re-employed by the city immediately following certification of recovery, the member shall be considered as a terminated fund member and shall have no further interest in the fund other than a refund of any excess of the member’s total contributions, plus regular interest, less the amount already received from the member’s cash balance account, if applicable, over the total of disability payments made to the member; provided, however, that if such member had a vested interest in pension credits as of the date of which the member was certified disabled, the member shall receive a vested termination pension from the later of the date of certification of recovery or attainment of the vested retirement date under § 2.5-24, 2.5-34, 2.5-44, 2.5-54, 2.5-64 or 2.5-74, whichever is applicable, equal to the amount which would have been payable under the provisions of this section had the member terminated employment on the date the disability pension began. Any death benefits thereafter shall be determined in accordance with the applicable provisions of this article.
(f) Report of earned income or net earnings from self employment.
(1) Any disabled member who has not attained normal retirement date or special retirement date and who is receiving a disability pension shall submit to the executive director prior to May 1 of each year following disability retirement a copy of the member’s signed income tax return filed for the preceding year, with all attachments thereto, along with all tax returns and attachments for all of the member’s affiliated entities, including, but not limited to, partnerships, corporations or other entities in which the member, or any relative, owns any interest, including community or separate property, and for which the member performs any services, whether compensated or not, as proof of the member’s earned income and net earnings from self-employment for that year obtained from any occupation or employment. At the end of the first year of disability retirement and by May 1 of each subsequent year, a disabled member shall also submit to the executive director an affidavit on the executive director’s approved form swearing that the member’s earned income and net earnings from self-employment are fully disclosed on the tax returns provided to the executive director and that the disabled member has not received any other compensation, directly or indirectly, for services rendered by the disabled member, nor performed any services for which the member received no compensation except as disclosed in the affidavit, including amounts paid to other affiliated entities for the benefit of the disabled member or to any relative of the disabled member. If the Internal Revenue Service has approved an extension to file a tax return and the tax return has not been filed by May 1, the member shall provide the executive director with a copy of the extension by May 1, and a copy of the tax return with all attachments and the related affidavit, within two weeks after the tax return has been filed.
(2) If the disabled member’s total receipt of earned income, net earnings from self-employment, and city disability pension exceed the annualized base hourly rate of pay the member would have made during that same tax year had he or she remained employed by the city in the same position then, as soon as practicable, the board shall reduce the amount of disability benefits to be paid to the member. In reducing a member’s disability pension due to such excess earnings, the board shall consider the member’s then current earnings, and attempt to recover the cumulative excess earnings and preclude excess earnings in the future. In the event that a member’s disability pension is reduced in excess of the amount required, the board shall pay such excess to the member. For purposes of this subsection (f), base hourly rate of pay shall not include overtime, acting, assignment, holiday, longevity, educational incentive, safety award, incentive, shift differential or any other special or premium pay.
(3) The board shall withhold a disabled member’s disability pension upon the member’s failure to submit on a timely basis the required income tax returns with all attachments thereto and related documents. If the disabled member subsequently provides the required documentation by the end of the calendar year in which the return was due, the board shall cause the member’s disability pension to be reinstated, subject to the other provisions of this section, and including the payment of any previously withheld amounts, without interest. If the disabled member fails to provide the required documentation by the end of the calendar year in which the return was due, the disabled member’s disability pension shall be terminated and the member shall not be entitled to any payment for the period during which the documentation was not provided.
(4) For purposes of this section, any amounts paid to a disabled member’s affiliated entity in connection with the performance of services by the disabled member shall constitute “earned income,” and any attempt to circumvent the limitations under this article on earned income and net earnings from self-employment through the use of affiliated entities shall be grounds for the board to terminate the disabled member’s disability pension.
(Ord. 20471-10-2012, § 2, passed 10-23-2012; Ord. 21459-09-2014, § 1, passed 9-16-2014; Ord. 21510-10-2014, § 1, passed 10-21-2014; Ord. 22977-10-2017, § 1, passed 10-24-2017)
(a) History. In 1999, city council adopted Ord. 13842, which established a simple 2% cost-of- living adjustment for all members. In 2007, city council adopted Ord. 17839-10-2007, which established an ad hoc cost-of-living adjustment for all city employees hired on or after December 31, 2007, and all members who were not vested as of December 31, 2007. All members who were vested as of December 31, 2007, all retired members, and all beneficiaries were allowed to make a selection to either stay with the 2% simple cost-of-living adjustment or to receive the ad hoc cost-of-living adjustment. The members who did not make a selection were automatically defaulted into the 2% cost-of-living adjustment. In 2011, city council adopted Ord. 19599-03-2011, which eliminated the cost-of-living adjustment for group II general members. In 2012, city council adopted Ord. 20471-10-2012, which eliminated the cost-of-living adjustment for group IV police members, implemented the 2% cost-of-living adjustment for all service earned or purchased after October 1, 2013, for group I and group III police members, allowed group I general members and group III police members who were subject to the ad hoc cost-of-living adjustment to select the 2% cost-of-living adjustment for past years of service, and allowed beneficiaries who were subject to the ad hoc cost-of-living adjustment to select the 2% cost-of-living adjustment for future COLA adjustments. Active firefighters, and those firefighters who retired or separated from employment during the term of the April 13, 2010, collective bargaining agreement between the city and the Fort Worth Professional Firefighters Association IAFF Local 440, were not eligible to participate in the 2012 selection. On September 16, 2014, the city council adopted Ord. 21459-09-2014, which eliminated the cost-of-living adjustment for group VI firefighters. On October 21, 2014, city council adopted Ord. No. 21510-10-2014, which implemented the 2% cost-of-living adjustment for all service earned or purchased on or after January 10, 2015 for group V firefighters. Group V firefighters who were subject to the ad-hoc cost-of-living-adjustment were also allowed to select the 2% cost-of living adjustment for past years of service.
(b) Group II general members, group IV police officers, and group VI firefighters. Group II general members, group IV police officers and group VI firefighters (and their beneficiaries) are not eligible to receive a cost-of-living adjustment on their pension amount.
(c) Group I general members, group III police officers, and group V firefighters. Group I general members, group III police officers, and group V firefighters (and their beneficiaries) are not entitled to a cost-of living adjustment for any credited service earned or purchased on or after July 20, 2019.
(d) Group I general members, group III police officers, and group V firefighters who have not retired or entered the DROP by January 1, 2021. The following provisions apply to group I general members, group III police officers and group V firefighters who have not retired or entered the drop effective January 1, 2021:
(1) The ad-hoc cost-of-living adjustment and the 2% simple cost-of-living adjustments are eliminated for all past years of service.
(2) The ad-hoc cost-of-living adjustment and the 2% simple cost-of-living adjustment are eliminated for all future years of service.
(3) Group I general members, group III police members and group V firefighters who have not retired or entered the DROP by January 1, 2021 may receive a variable cost-of-living adjustment to be calculated as follows:
a. Upon retirement, on or after the first day of each January a cost-of-living adjustment or 13th paycheck may be made in accordance with subsection (d)(3)c. based on that portion of the base pension of a member for all credited service earned or purchased prior to July 20, 2019 (hereinafter called pro-rata base pension), with the amount of such cost-of-living adjustment or 13th paycheck to be in an amount not to exceed 4% of the member's pro-rata base pension, provided, however, that such cost-of-living adjustment or 13th paycheck may be made only if both of the following conditions are met:
1. The actuarially determined contribution (ADC), based on a closed 30-year funding of the unfunded liabilities, has been equal to or less than the fixed contribution (the contribution in place before any automatic increases under § 2.5-3(c)) for the last two consecutive calendar years based on both actuarial and market values of assets; and
2. The fund's actuary determines that funding the full cost of the 13th paycheck or cost-of-living adjustment is not anticipated to cause the ADC to exceed the fixed contribution (the contribution in place before any automatic increases under § 2.5-3(c)) for the calendar year in which the 13th paycheck or cost-of-living adjustment will apply.
b. A cost-of-living adjustment or 13th check cannot be granted under subsection (d)(3)a. if either of the following circumstances exist:
2. The assumed rate of return as determined by the board is higher than the average of the assumed rates of return as reported by two independent sources that have been agreed to by the city and the board.
c. No later than April 30 of each year, the board shall, based on fund performance for the two immediately preceding years, advise the city council of the board's decision regarding whether to grant a variable cost-of-living adjustment or a 13th paycheck for the following calendar year, and the city council shall ratify such decision if the decision is fully in compliance with subsections (d)(3)a. and (d)(3)b..
(4) To be eligible for a cost-of-living adjustment for a particular year, either the member or any survivor must have been receiving benefits by September 30th of the prior year.
(e) Retirees and beneficiaries eligible to receive a cost-of-living adjustment who are receiving payments or who have retired on or before July 19, 2019; group I general members, group III police members, and group V firefighters who retire or enter the DROP on or before January 1, 2021; and members who receive an in the line of duty disability retirement or in the line of duty death retirement.
The following provisions apply to:
Retirees and beneficiaries eligible to receive a cost-of-living adjustment, who are receiving payments or who have retired on or before July 19, 2019;
Group I general members, group III police members, and group V firefighters who retire or enter the DROP on or before January 1, 2021; and
Members who receive an in the line of duty disability retirement or in the line of duty death retirement.
(1) The 2% simple cost-of-living adjustment.
a. The 2% simple cost-of-living is applicable to the following:
1. Retirees and beneficiaries who are eligible to receive a cost-of-living adjustment, who are already receiving payments on January 1, 2021, and who selected or defaulted to the 2% cost-of-living adjustment following the 2007, 2012, and 2014 selection processes;
2. Credited service through July 19, 2019 for group I general members, group III police members, group V firefighters, and vested terminated members in any of those groups who retire or enter the DROP on or before January 1, 2021 and who selected or defaulted to the 2% cost-of-living adjustment following the 2007, 2012, and 2014 selection processes;
3. Credited service through July 19, 2019 for group I general members, group III police members, and group V firefighters who retire on disability retirement due to an in the line of duty disability, and who selected or defaulted to the 2% cost-of-living adjustment following the 2007, 2012, and 2014 selection processes;
4. Credited service through July 19, 2019 for beneficiaries of group I general members, group III police members, and group V firefighters who selected or defaulted to the 2% cost-of-living-adjustment following the 2007, 2012, and 2014 selection processes;
5. Credited service earned or purchased from October 1, 2013 through July 19, 2019 for group I general members and group III police members who retire or enter the DROP on or before January 1, 2021, and have the ad hoc cost-of-living adjustment for service prior to October 1, 2013;
6. Credited service earned or purchased from January 10, 2015 through July 19, 2019 for group V firefighters who retire or enter the DROP on or before January 1, 2021, and have the ad hoc cost-of-living adjustment for credited service prior to January 10, 2015;
7. Credited service earned or purchased from October 1, 2013 through July 19, 2019 for group I general members and group III police members who retire on disability retirement due to an in the line of duty disability and who have the ad hoc cost-of-living adjustment for credited service prior to October 1, 2013;
8. Credited service earned or purchased from January 10, 2015 through July 19, 2019 for group V firefighters who retire on disability retirement due to an in the line of duty disability and who have the ad hoc cost-of-living adjustment for credited service prior to January 10, 2015;
9. Credited service earned or purchased from October 1, 2013 through July 19, 2019 for beneficiaries of group I general members and group III police members who had the ad hoc cost-of-living adjustment for credited service prior to October 1, 2013, if the member is killed in the line of duty; and
10. Credited service earned or purchased from January 9, 2015 through July 29, 2019 for beneficiaries of group V firefighters who had the ad hoc cost-of-living adjustment for credited service prior to January 10, 2015, if the member is killed in the line of duty.
b. Calculation of the 2% simple cost-of-living adjustment. Upon retirement, on the first day of each January a cost-of-living adjustment shall be made on that portion of the base pension of the member that is subject to the 2% cost-of-living adjustment, as described in subsection (e)(1)a., by increasing the amount of the actual pension by 2% of that portion of the base pension, unless otherwise provided herein. To be eligible for a cost-of-living adjustment for a particular year, either the member or any survivor must have been receiving benefits by September 30 of the prior year.
(2) Ad hoc cost-of-living adjustment.
a. The ad hoc cost-of-living adjustment is applicable to the following:
1. Credited service through September 30, 2013, for group I general members and group III police members who retire or enter the DROP on or before January 1, 2021, who had the ad hoc cost-of-living adjustment, and who did not select to receive the 2% cost-of-living adjustment during the 2012 selection process;
2. Credited service through January 9, 2015, for group V firefighters who retire or enter the DROP on or before January 1, 2021, who had the ad hoc cost-of-living adjustment, and who did not select to receive the 2% cost-of-living adjustment during the 2014 selection process;
3. Credited service through September 30, 2013, for group I general members and group III police members who retire on disability retirement due to an in the line of duty disability, who had the ad hoc cost-of-living adjustment, and who did not select to receive the 2% cost-of-living adjustment during the 2012 selection process;
4. Credited service through September 30, 2013 for beneficiaries of group I general members and group III police members if the member is killed in the line of duty and the member had the ad hoc cost-of-living adjustment and did not select to receive the 2% cost-of-living adjustment during the 2012 selection process;
5. Credited service through January 9, 2015 for group V firefighters who retire on disability retirement due to an in the line of duty disability, who had the ad hoc cost-of-living adjustment, and who did not select to receive the 2% cost-of-living adjustment during the 2014 selection process;
6. Credited service through January 9, 2015 for beneficiaries of group V firefighters if the group V firefighter is killed in the line of duty, and the group V firefighter had the ad hoc cost-of-living adjustment and did not select the 2% cost-of-living adjustment during the 2014 selection process; and
7. Members and beneficiaries who are eligible to receive a cost-of-living adjustment, who are already receiving payments on January 1, 2021, who had the ad hoc cost-of-living adjustment, and who did not select the 2% cost-of-living adjustment during the 2012 or 2014 selection process.
b. Calculation of the ad hoc cost-of-living adjustment. Upon retirement, on the first day of each January, an ad hoc cost-of-living adjustment may be made on that portion of the base pension of the member that is subject to the ad hoc cost-of-living adjustment, as described in subsection (e)(2)a., pursuant to this subsection as follows:
1. Prior to December 31 of each year, the fund's actuary shall make a written report to the board certifying the amortization period required to pay off the unfunded actuarial accrued liability of the fund.
2. Based on the information provided by the actuary, the board shall:
i. Grant a compounded ad hoc cost-of-living adjustment of 4%, if the actuary certifies that the amortization period required to pay off the unfunded actuarial accrued liability of the fund, after granting the 4% cost-of-living adjustment, would be 18.0 years or less;
ii. Grant a compounded ad hoc cost-of-living adjustment of 3%, if the actuary certifies that the amortization period required to pay off the unfunded actuarial accrued liability of the fund, after granting the 3% cost-of-living adjustment, would be between 18.1 and 24.0 years;
iii. Grant a compounded ad hoc cost-of-living adjustment of 2%, if the actuary certifies that the amortization period required to pay off the unfunded actuarial accrued liability of the fund, after granting a 2% cost-of-living adjustment, would be between 24.1 and 28.0 years;
iv. Grant no ad hoc cost of living adjustment if the actuary certifies that the amortization period required to pay off the unfunded actuarial accrued liability of the fund is 28.1 years or more.
c. Increased contributions made in conjunction with the automatic risk-sharing provision of § 2.5-3(c) cannot be used in determining the amortization period for granting an ad hoc cost-living adjustment.
d. To be eligible for a cost-of-living adjustment for a particular year, either the member or any beneficiary must have been receiving benefits by September 30th of the prior year.
(f) DROP participants.
(1) If a member enters the DROP and remains in the DROP for two or more years, they will be entitled to receive a cost of living adjustment for their years in the DROP as if the member retired on the date they entered in the DROP. Members who do not remain in the DROP for at least two years are not entitled to a cost of living adjustment for their time in the DROP. If the cost of living adjustment takes the form of a 13th paycheck, the amount of the paycheck shall be based on the member's DROP pension amount (excluding impact of any potential qualified leave under § 2.5-4(c)), and the cumulative balance of all such 13th paychecks shall be payable to the member in a lump sum following the date of actual retirement.
(2) A group I member, group III police member, or group V firefighter who enters the DROP on or before January 1, 2021 , but does not remain in the DROP for two years is still eligible to receive a cost-of-living on their pension, although they would not be eligible to receive a cost-of-living adjustment for their years in the DROP. If a member does not remain in the DROP for two years, then the member must be receiving pension benefits by September 30th to be eligible to receive a cost-of-living adjustment on their pension the next year.
(Ord. 20471-10-2012, § 2, passed 10-23-2012; Ord. 21459-09-2014, § 1, passed 9-16-2014; Ord. 21510-10-2014, § 1, passed 10-21-2014; Ord. 23516-12-2018, § 3, passed 12-11-2018)
(a) General. In lieu of the standard pension benefit or the alternative pension benefit, a member who has attained his or her normal retirement date may elect to remain in active service with the city and to participate in the DROP. By making an election to participate in DROP, the member’s commencement of retirement pension benefits will be deferred until the member’s actual retirement and the member will receive a lump sum payment (unless such person elects installment payments pursuant to subsection (j) below) of his or her DROP account at the time the member’s actual retirement pension benefits commence. No interest on earnings shall be paid on the lump sum payment. Once a member makes a DROP election and the DROP election is approved by the board, the DROP election is irrevocable and is effective as long as the member remains in active service with the city. Distribution of a member’s DROP account will not be made, and commencement of the member’s retirement pension benefits will not begin, until the member retires from the city. DROP shall be administered in accordance with the rules, procedures and forms as may be adopted and amended by the board in its complete discretion, which shall be uniform and nondiscriminatory and which shall be interpreted in a manner that is consistent with the provisions of this Article and applicable law.
(b) Procedure for DROP election. A DROP election shall be made in accordance with the rules, procedures and forms (including spousal consent, where applicable) as may be adopted by the board. The election form adopted by the board may be amended by the board, and, except as otherwise provided by the board, the election form in effect at the time of the member’s DROP election is effective shall control all DROP benefits the member may become entitled to receive upon retirement. A member shall not be subject to any fees, charges or any other similar expenses in connection with a DROP election.
(c) Timing and irrevocability of a DROP election. A member may make a DROP election at any time on or after the date that is 60 days prior to the date that the member will attain his or her normal retirement date or special retirement date. Once effective, a DROP election is irrevocable, provided, however, that a member’s DROP election shall not be effective until the member attains his or her normal retirement date.
(d) The DROP account. A member’s DROP account is an individual account established on behalf of the member into which a monthly amount will be credited once the DROP election is effective. The monthly amount credited to the member’s DROP account will be equal to the monthly pension benefit that the member would have initially received if the member had retired from the city and commenced his or her pension. Credits to a member’s DROP account will continue to be made until the member’s actual retirement, provided, however, that amounts will be credited to a member’s DROP account for a maximum of six years. No withdrawals may be made from the DROP account. A member will receive his or her DROP account in a lump sum distribution at the time the member’s pension benefits commences upon retirement, or, if elected by the member, the DROP account will be distributed in installments, as provided in subsection (j) below.
(e) Continued contributions to the fund. Once a DROP election is effective, both the member and the city shall continue to make the same contributions to the fund that would have been made if the member had not made a DROP election. Neither the member’s nor the city’s contributions to the fund will be credited to the member’s DROP account and the additional contributions will not affect the member’s monthly pension upon actual retirement.
(f) Monthly pension and ad hoc cost of living adjustment. Upon retirement following an effective DROP election, the member’s base pension will be the monthly pension benefits that the member had earned at the time the DROP election became effective. The member’s earnings and credited service following the DROP election will not be included in calculating the member’s base pension and monthly pension benefits. If (and only if) a member completes at least two years of service with the city after his or her DROP election is effective, then the monthly pension benefits that the member initially receives upon retirement will be adjusted for intervening cost of living adjustments, if applicable, as if the member’s monthly pension had commenced at the time the DROP election became effective. Further, such a member shall receive a cost of living adjustment on the following January 1, regardless of whether the member’s pension benefits had commenced by September 30. Notwithstanding the preceding provisions of this subsection (f), when a member’s monthly pension is initially scheduled to commence at retirement or death, the member’s base pension shall be recalculated by adjusting the member’s credited service for the member’s then accumulated sick leave and major medical leave (if any) pursuant to § 2.5-4(b).
(g) DROP election and death pension. If a member dies while his or her DROP election is in effect, the member’s DROP account shall be paid to the member’s spouse, or if there is no spouse, to the member’s estate. The spouse or estate eligible to receive the DROP account shall receive the DROP account in a lump sum distribution, unless an election is made to receive installment payments pursuant to this section. The remaining portion of the member’s pension shall be paid pursuant to the death pension provisions of this article, with the amount determined as if the member had died at the time of the DROP election.
(h) DROP election and disability pension. If a member makes a DROP election, the member will not be eligible to receive a disability pension under this article. If a member does become disabled following an effective DROP election, the member may retire from the city and receive the amount that has been credited to the member’s DROP account in a lump sum or in installment payments pursuant to subsection (j) below, and commence receipt of a monthly pension, with the amount of the pension calculated as if the member had retired at the time the DROP election became effective.
(i) Alternative pension benefit. A member who has made a DROP election shall not be eligible to elect an alternative pension benefit.
(j) Installment payments. Notwithstanding the preceding provisions of this section, a member who is entitled to receive a lump sum payment of his or her DROP account may elect (on a form adopted by the board) to receive the DROP account in five substantially equal annual installment payments, rather than a lump sum. The first installment payment shall be made at the time the member’s monthly pension commences, and the other installments shall be made on or about the anniversary of the initial installment. No interest on earnings shall be paid on the installment payments.
(Ord. 20471-10-2012, § 2, passed 10-23-2012; Ord. 23516-12-2018, § 4, passed 12-11-2018)
(a) When benefits are payable to a minor, an individual who has legally been determined to lack capacity, or an individual whom the board determines to be unable to handle money, the board shall make payments, without any duty to see to the application thereof, to the guardian of such person’s estate or, if there is none, as the board determines to be in the best interest of such person.
(b) If a retired city employee who is receiving pension benefits from the fund is re-employed by the city as a regular employee, that person’s pension benefits shall cease upon the date of re-employment. credited service earned during the term of any member’s subsequent re-employment in which the employee’s pension benefits have been suspended shall be added to the credited service of the prior periods of employment, and upon final separation from the city, a new pension shall be calculated taking into account the member’s total years of credited service and recalculated compensation base. In no event shall the member’s monthly pension be reduced due to periods of re-employment.
(c) If the distributee of an eligible rollover distribution (as defined in the code § 402(f)(2)(A) (i) elects to have such distribution paid directly to another eligible retirement plan and (ii) specifies in writing (before the distribution is made) the eligible retirement plan to which such distribution is to be made, the distribution will be made in the form of a direct trustee-to-trustee transfer to the eligible retirement plan so specified.
(Ord. 20471-10-2012, § 2, passed 10-23-2012)
(a) The city shall never be held liable or responsible for any claim or asserted claim for benefits under the provisions of this article, but all claims shall be paid from the fund for which provision has been specifically made in this division. Notwithstanding the preceding sentence, the city, pursuant to its policies, programs and applicable law, shall indemnify and hold harmless the board and its individual members against any and all loss, damage and expense, including court costs and attorney’s fees, resulting from or arising out of the actions and inactions of the board and its members in connection with the performance of their duties under the retirement ordinance, provided, however, that such obligation of the city to indemnify and hold harmless shall not apply to any member of the board to the extent that the loss, damage or expense is attributable to such member’s gross negligence or willful misconduct.
(b) No portion of this fund shall, at any time before or after its disbursement, be held, seized, taken, subjected to or detained or levied upon by virtue of any execution, attachment, garnishment, assignment, injunction or other writ, order or decree, or any processor proceedings whatsoever issued out of or by any court for the payment or satisfaction, in whole or in part, of any debt, damage, claim, demand or judgment against any person entitled to a benefit from this fund, nor shall the fund, or any claim thereto, be directly or indirectly, assigned or transferred, and any attempt to transfer or assign same shall be void; provided that:
(1) Nothing in this section shall prevent the deduction of the spouse’s insurance premiums from the fund for the purpose of paying same, on behalf of the spouse, to the health and life insurance carrier for the city only; and
(2) Nothing shall prevent the fund from dividing a member’s pension benefit between the member and a former spouse and/or children or other dependents of the member according to the terms of a valid court order from a court of competent jurisdiction as set forth in subsection (c) below.
(c) (1) The court order must be a “qualified domestic relations order” within the meaning of § 414(p) of the code and must also satisfy the provisions of this section. The maximum pension benefit that can be paid to a former spouse is 50% of the member’s pension benefit. The order must state a specific amount payable monthly or a percentage of the member’s pension benefit to be divided between the member and the former spouse. Except as otherwise provided below with respect to the return of the member’s contributions, no single sum payment shall be made to a former spouse.
(2) a. Upon the member’s death, no further monthly pension benefit shall be paid to the former spouse. If, however, at the time of the member’s death, the member and the former spouse had not yet received pension benefits from the fund in excess of the member’s total contributions to the fund (plus regular interest), the member’s remaining contributions (plus regular interest) shall be divided between the member and the former spouse according to:
1. The ratio of the pension benefit payable to the former spouse divided by the pension benefit payable to the member but for the divorce; or
2. The percentage used to calculate the pension benefit payable to the member and the former spouse.
b. The former spouse shall receive his or her portion of the remaining contributions (plus regular interest) in a single sum distribution.
(3) If such deceased member died with no dependent child, dependent parent or surviving spouse to whom the member had been married for at least the one year immediately prior to the member’s retirement, the member’s portion of the remaining contributions (plus regular interest) shall be paid in a single sum to the member’s estate. If the deceased member died with a dependent child (or children), dependent parent (or parents), or a surviving spouse to whom the member had been married for at least the one year immediately prior to the member’s retirement, such person(s) shall be entitled to a monthly benefit under the terms of this division, but adjusted as provided below. Upon a single sum payment to the former spouse, such monthly pension benefit shall be reduced according to the following methodology:
a. Create a fraction, the numerator of which is the single sum amount paid to the former spouse and the denominator of which is the sum of the member’s contributions (plus regular interest) and the city’s contributions on behalf of the member;
b. Multiply that fraction by the monthly pension benefit which would otherwise be payable to the dependent child, parent or surviving spouse; and
c. The difference between the result of the second step and the monthly pension benefit which would otherwise be payable to the dependent child, dependent parent or surviving spouse is the monthly pension benefit which should be paid to the dependent child, dependent parent or surviving spouse.
(4) Since any pension benefit payable to a former spouse is derived from the member’s pension, a former spouse’s pension benefit shall not commence until the member’s pension benefit commences.
(5) If a member with respect to whom a former spouse has obtained a domestic relations order purporting to be a qualified domestic relations order terminates employment with the city and receives a return of contributions (plus regular interest) rather than a pension benefit, the former spouse shall not receive a pension benefit, but shall instead receive a percentage (or fixed dollar amount) of the returned contributions (plus regular interest).
(6) No court order shall be honored if it:
a. Provides for any form of benefit or option not otherwise provided by this division;
b. Requires the fund to provide increased benefits determined on the basis of actuarial value; or
c. Requires the payment of benefits to a former spouse that are required to be paid to another former spouse.
(d) Unless otherwise expressly provided for in this division, the board shall not reduce an individual pension.
(e) No part of the corpus or income of the fund shall ever revert to the city or be used for, or diverted to, any purpose other than for the exclusive purpose of providing benefits to members and their beneficiaries in accordance with the terms of this division.
(Ord. 20471-10-2012, § 2, passed 10-23-2012)
The governing body, consistent with the Constitution, the laws of the State of Texas, and the Charter of the City of Fort Worth, shall have the power and authority to amend any or all of the terms and provisions of this article, except where an amendment in the city’s contribution rate would require the issuance of tax-supported bonds approved at an election of the qualified voters of the City of Fort Worth.
(Ord. 20471-10-2012, § 2, passed 10-23-2012)
The provisions of this division shall be cumulative of and in addition to all other ordinances of the City of Fort Worth relating to pensions, which ordinances are hereby preserved and continued in force and effect; provided, however, that in the event of any conflict, the provisions of this division shall control.
(Ord. 20471-10-2012, § 2, passed 10-23-2012)
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