(a) Tier 1 Formula and Enhanced Tier 1 Formula for Airport Peace Officer Members and Airport Peace Officer Former Members. A Member who retires pursuant to the provisions of Section 4.1006 or Section 4.1007 shall receive a service retirement allowance calculated pursuant to the following Tier 1 Formula (formerly the Beta Formula): 2.16 percent (.0216) of the Member’s Final Compensation, calculated as of the date of retirement, multiplied by the number of years and parts thereof of the Member’s Service Credit, subject to applicable adjustments as provided below. An Airport Peace Officer Member or Airport Peace Officer Former Member who retires on or after January 7, 2018, shall receive a service retirement allowance calculated pursuant to the following Enhanced Tier 1 Formula: 2.30 percent (.023) of the Member’s Final Compensation, calculated as of the date of retirement, multiplied by the number of years and parts thereof of the Member’s Service Credit, subject to applicable adjustments as provided below. Each retirement allowance as so calculated shall be allocated between the following two components: (1) an annuity which shall be the actuarial equivalent of the Member’s accumulated contributions at the time of retirement (excluding any additional contributions paid to provide a larger annuity at the time of retirement), calculated in accordance with approved actuarial methods as of the date of retirement; and (2) a pension, in the amount of the remaining balance, payable to the retiree on account of the retiree’s service.
The retirement allowance as so calculated shall be subject to the following adjustments, if applicable:
(1) Where the retiree’s allowance is subject to an age-based reduction, the adjustment provided in Subsection (b) of this section.
(2) If the retiree had been on disability retirement, the retiree’s service retirement allowance shall be reduced by an amount equal to the annuity which the total of the disability annuity payments made to the retiree would have provided had they still been part of the retiree’s accumulated contributions at the time of retirement.
(3) If the retiree received any minimum distribution required by the Internal Revenue Code, the retiree’s service retirement allowance shall be subject to adjustment as provided in rules to be adopted by the Board of Administration.
(4) The retiree may be entitled to a minimum pension of fifty percent (50%) of the amount determined pursuant to the aforesaid Tier 1 Formula. (The annuity portion of the retirement allowance shall not be changed as a result of the testing required in this provision.) This testing uses the retiree’s Tier 1 Formula entitlement and the pension and annuity entitlement amounts, as calculated above, provided that such shall be adjusted, if applicable, to: (i) exclude Service Credit purchased under Sections 4.1019 and 4.1020, and the annuity calculation shall likewise exclude accumulated contributions attributable to these purchases; and (ii) the annuity calculation, for members who made back contributions under either Section 4.1017(b) or Section 4.1017(c), shall exclude accumulated contributions in the person’s account which are attributable to matching contributions paid by the City in the prior plan. The purpose of this testing is to determine if, absent such purchases or matching City contributions, the pension would have required an increase to provide a minimum pension of fifty percent (50%) of the amount of the retiree’s Tier 1 Formula entitlement. If such test determines that an adjustment is in order, the pension portion of the retiree’s retirement allowance shall be increased by the same amount as the increase that the test determined would be necessary to provide a minimum pension of fifty percent (50%), and the total retirement allowance payable shall be increased accordingly (with the annuity portion remaining unchanged).
(b) Age-Based Reduction Factors. An age-based reduction shall be made by multiplying the retirement allowance by the factor set forth in the table below corresponding to the retiree’s age, taken to the completed quarter year.
EARLY RETIREMENT REDUCTION FACTORS
FOR 2.16 PERCENT FORMULA
FOR 2.16 PERCENT FORMULA
45 | 0.6250 |
45 1/4 | 0.6325 |
45 1/2 | 0.6400 |
45 3/4 | 0.6475 |
46 | 0.6550 |
46 1/4 | 0.6625 |
46 1/2 | 0.6700 |
46 3/4 | 0.6775 |
47 | 0.6850 |
47 1/4 | 0.6925 |
47 1/2 | 0.7000 |
47 3/4 | 0.7075 |
48 | 0.7150 |
48 1/4 | 0.7225 |
48 1/2 | 0.7300 |
48 3/4 | 0.7375 |
49 | 0.7450 |
49 1/4 | 0.7525 |
49 1/2 | 0.7600 |
49 3/4 | 0.7675 |
50 | 0.7750 |
50 1/4 | 0.7825 |
50 1/2 | 0.7900 |
50 3/4 | 0.7975 |
51 | 0.8050 |
51 1/4 | 0.8125 |
51 1/2 | 0.8200 |
51 3/4 | 0.8275 |
52 | 0.8350 |
52 1/4 | 0.8425 |
52 1/2 | 0.8500 |
52 3/4 | 0.8575 |
53 | 0.8650 |
53 1/4 | 0.8725 |
53 1/2 | 0.8800 |
53 3/4 | 0.8875 |
54 | 0.8950 |
54 1/4 | 0.9025 |
54 1/2 | 0.9100 |
54 3/4 | 0.9175 |
55 | 0.9250 |
55 1/4 | 0.92875 |
55 1/2 | 0.93250 |
55 3/4 | 0.93625 |
56 | 0.94000 |
56 1/4 | 0.94375 |
56 1/2 | 0.94750 |
56 3/4 | 0.95125 |
57 | 0.95500 |
57 1/4 | 0.95875 |
57 1/2 | 0.96250 |
57 3/4 | 0.96625 |
58 | 0.97000 |
58 1/4 | 0.97375 |
58 1/2 | 0.97750 |
58 3/4 | 0.98125 |
59 | 0.98500 |
59 1/4 | 0.98875 |
59 1/2 | 0.99250 |
59 3/4 | 0.99625 |
60 and over | 1.00 |
(c) Cap on Allowances. Service retirement allowances granted pursuant to Subsection (a) of this section may never exceed a member’s “Final Compensation.”
(d) WPERP Service Credit. Service credit with the Water and Power Employees’ Retirement Plan (WPERP) shall not be included in the calculation of the member’s retirement allowance pursuant to Subsection (a) of this section unless the member has purchased credit for this WPERP service with the Retirement System or unless such service credit was transferred to the Retirement System pursuant to reciprocity under current Section 4.1095 or prior Section 4.1060.
SECTION HISTORY
Added by Ord. No. 182,629, Eff. 7-25-13.
Amended by: Subsec. (d) added, Ord. No. 182,824, Eff. 12-19-13; Subsec. (a), Ord. No. 184,853, Eff. 4-6-17.