(Title amended by Ord. No. 174,803, Eff. 6-25-00, Oper. 9-16-02.)
Section
4.1900 Statement of Purpose.
4.1901 Fire and Police Plan – Trust Funds and Vesting Upon Plan Termination.
4.1902 Minimum Distribution Rule.
4.1903 Direct Rollovers.
4.1904 Reemployment After Military Service.
4.1905 Compensation Limits.
4.1906 Compliance with Internal Revenue Code Section 415.
It is the purpose of this chapter to enact changes to the Fire and Police Pension Plan to incorporate provisions of federal tax laws and regulations required to maintain the tax qualified status of the Fire and Police Pension Plan by enacting from time to time the necessary ordinances as may legally be adopted under the authority of Section 1240 of the City Charter.
SECTION HISTORY
Chapter and Section Added by Ord. No. 171,697, Eff. 8-27-97, Oper. 7-1-97.
Amended by: Ord. No. 173,272, Eff. 6-25-00, Oper. 7-1-00; In Entirety, Ord. No. 174,803, Eff. 9-16-02; Ord. No. 182,628, Eff. 7-16-13.
The Funds established under the various Tiers of the Fire and Police Pension Plan shall be considered trust funds in accordance with Article XVI, Section 17 of the Constitution of the State of California and to the extent required by Section 401(a) of the Internal Revenue Code and the regulations thereunder. In the event of the termination of the Fire and Police Pension Plan, or the complete discontinuance of employer contributions, the rights of all plan members to benefits accrued to the date of termination or discontinuance shall be nonforfeitable.
SECTION HISTORY
Added by Ord. No. 171,697, Eff. 8-27-97, Oper. 7-1-97.
Amended by: Ord. No. 173,272, Eff. 6-25-00, Oper. 7-1-00; In Entirety, Ord. No. 174,803, Eff. 9-16-02.
Notwithstanding any provision to the contrary, the Board shall pay all benefits in accordance with a good faith interpretation of the requirements of Section 401(a)(9) of the Internal Revenue Code and the Treasury Regulations in effect under that section, as applicable to a governmental plan within the meaning of Section 414(d) of the Internal Revenue Code. The Fire and Police Pension Plan is subject to the following provisions:
(a) Distribution of a member’s benefit must begin by the required beginning date, which is the later of the April 1 following the calendar year in which the member attains age 70 1/2, or April 1 of the year following the calendar year in which the member terminates.
(b) The member’s entire interest must be distributed over the member’s life or the lives of the member and a qualified survivor, or over a period not extending beyond the life expectancy of the member or of the member and a qualified survivor.
(c) The Board, pursuant to a court order, may pay a portion of the member’s benefit to a non- member.
(d) If a member dies after the required distribution of benefits has begun, the remaining portion of the member’s interest must be distributed at least as rapidly as under the method of distribution before the member’s death.
(e) If a member dies before required distribution of the member’s benefits has begun, the member’s entire interest must be either:
(1) distributed (in accordance with federal regulations) over the life or life expectancy of the qualified survivor, with the distributions beginning no later than December 31 of the calendar year following the calendar year of the member’s death, or
(2) distributed within five (5) years of the member’s death.
(f) The amount of an annuity paid to a member’s qualified survivor may not exceed the maximum determined under the incidental death benefit requirement of Section 401(a)(9)(G) of the Internal Revenue Code, and the minimum distribution incidental benefit rule under Treasury Regulation Section 1.401(a)(9)-6, Q&A-2.
(g) The death and disability benefits provided by the Plan are limited by the incidental benefit rule set forth in Section 401(a)(9)(G) of the Internal Revenue Code and Treasury Regulation Section 1.401-1(b)(1)(i), or any successor regulation thereto. As a result, the total death or disability benefits payable may not exceed 25% of the cost for all of the members’ benefits received from the Plan.
(h) Notwithstanding the other provisions of this rule or the provisions of the Treasury Regulations, benefit options may continue so long as the option satisfies Section 401(a)(9) of the Internal Revenue Code, based on a reasonable and good faith interpretation of that section.
SECTION HISTORY
Added by Ord. No. 171,697, Eff. 8-27-97, Oper. 7-1-97.
Amended by: Ord. No. 173,272, Eff. 6-25-00, Oper. 7-1-00; In Entirety, Ord. No. 174,803, Eff. 9-16-02; In Entirety, Ord. No. 182,628, Eff. 7-16-13.
On or after January 1, 1993, the “distributee” of an “eligible rollover distribution” from the Fire and Police Pension Plan may elect to have any portion of such distribution that is equal to at least $200.00 paid directly to an “eligible retirement plan” specified by the distributee in a “direct rollover”.
Definitions.
(a) “Eligible rollover distribution” means any distribution of all, or any portion of, contributions made, or the Basic Death Benefit to, a distributee. An eligible distribution does not include pension payments made to a retired Plan member, Qualified Surviving Spouse or other eligible surviving dependents, any portion of a distribution that is not includable in gross income, any distribution that is reasonably expected to total less than $200.00 during a year, or any other distribution required under Section 401(a)(9) of the Internal Revenue Code. On or after January 1, 2002, a portion of a distribution that is not includable in gross income, but that otherwise qualifies as an eligible rollover distribution, is an eligible rollover distribution, provided that the eligible retirement plan designated to receive such portion of a distribution is (i) an individual retirement account described in Section 408(a) of the Internal Revenue Code, an individual retirement annuity described in Section 408(b) of the Code or a qualified defined contribution plan described in Section 401(a) or 403(a) of the Code that agrees to separately account for amounts so transferred, including separately accounting for the portion of such distribution which is includable in gross income and the portion of such distribution which is not so includable; (ii) on or after January 1, 2007, a qualified defined benefit plan described in Section 401(a) of the Internal Revenue Code, or is an annuity contract described in Section 403(b) of the Internal Revenue Code, that agrees to separately account for amounts so transferred (and earnings thereon), including separately accounting for the portion of the distribution that is includable in gross income and the portion of the distribution that is not so includable; (iii) on or after January 1, 2008, a Roth IRA described in Section 408A of the Internal Revenue Code.
(b) “Eligible retirement plan” means an individual retirement account described in Section 408(a) of the Internal Revenue Code, an individual retirement annuity described in Section 408(b) of the Code, an annuity plan described in Section 403(a) of the Code, or a qualified plan described in Section 401(a) of the Code that accepts a distributee’s eligible rollover distribution. On or after January 1, 2002, an eligible deferred compensation plan described in Section 457(b) of the Code, maintained by an employer described in Section 457(e)(1)(A) of the Code, and an annuity contract described in Section 403(b) of the Code, are also eligible retirement plans. However, prior to January 1, 2002, in the case of an eligible rollover distribution to the surviving spouse or other designated beneficiary, an eligible retirement plan is an individual retirement account or individual retirement annuity only. On or after January 1, 2008, a Roth IRA described in Section 408A of the Internal Revenue Code is an eligible retirement plan.
(c) “Distributee” means a Plan member or former Plan member or spouse or former spouse of a Plan member or former Plan member, eligible for a rollover distribution. On or after January 1, 2007, a distributee further includes a nonspouse beneficiary who is a designated beneficiary as defined by Section 401(a)(9)(E) of the Internal Revenue Code. However, a nonspouse beneficiary may rollover the distribution only to an individual retirement account or individual retirement annuity established for the purpose of receiving the distribution, and the account or annuity will be treated as an “inherited” individual retirement account or annuity.
(d) “Direct rollover” means a payment by the Fire and Police Pension Plan to the eligible retirement plan specified by the distributee.
SECTION HISTORY
Added by Ord. No. 171,697, Eff. 8-27-97, Oper. 7-1-97.
Amended by: First Para and Subsec. (d), Ord. No. 173,272, Eff. 6-25-00, Oper. 7-1-00; In Entirety, Ord. No. 174,803, Eff. 9-16-02; In Entirety, Ord. No. 182,628, Eff. 7-16-13.
(a) Notwithstanding any provision of the Fire and Police Pension Plan to the contrary, contributions, benefits and service credit with respect to qualified military service while a member of the Harbor Department, Fire Department or the Police Department will be provided in accordance with Section 414(u) of the Internal Revenue Code.
(b) Effective with respect to deaths occurring on or after January 1, 2007, while a member is performing qualified military service (as defined in chapter 43 of Title 38, United States Code), to the extent required by Section 401(a)(37) of the Internal Revenue Code, qualified survivors of a member in the Plan are entitled to any additional benefits that the Plan would provide if the member had resumed employment and then died, such as survivor benefits that are contingent on the member’s death while employed.
(c) Effective with respect to deaths and disabilities occurring on or after January 1, 2007, while a member is performing qualified military service (as defined in Chapter 43 of Title 38, United States Code), to the extent permitted by Section 414(u)(8) of the Internal Revenue Code, for vesting and accrual purposes, the member will be treated as having earned years of service for the period of qualified military service, having returned to employment on the day before the death or disability, and then having terminated on the date of death or disability. This provision shall be applied to all similarly situated individuals in a reasonably equivalent manner.
(d) Beginning January 1, 2009, to the extent required by Section 414(u)(12) of the Internal Revenue Code, an individual receiving differential wage payments (as defined under Section 3401(h)(2) of the Internal Revenue Code) from an employer shall be treated as employed by that employer, and the differential wage payment shall be treated as compensation for purposes of applying the limits on annual additions under Section 415(c) of the Internal Revenue Code. This provision shall be applied to all similarly situated individuals in a reasonably equivalent manner.
SECTION HISTORY
Added by Ord. No. 174,803, Eff. 9-16-02.
Amended by: In Entirety, Ord. No. 182,628, Eff. 7-16-13.
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