(A) In the event all level straight life or Option C pension payments terminate before there has been paid an aggregate amount equal to the retirant's accumulated contributions at the time retirement was effective reduced by any amounts paid under division (C) of this section, the difference, if any, between the retirant's accumulated contributions reduced by any amounts paid under division (C) of this section and the aggregate amount of pension payments made shall be paid to such person or persons as the retirant shall have designated in writing and filed with the Board of Trustees. If there be no such person surviving the retirant, the difference, if any, shall be paid to the legal representative of the retirant.
(B) Purchase of annuities. In the event the city determines that the purchase of annuity contracts to fund retirees benefits is advantageous, the city may purchase said annuities. The annuities shall be purchased from a legal reserve life insurance company licensed to conduct business in the State of Michigan and with an A.M. Best rating of "A" or better.
(C) (1) Annuity withdrawal.
(a) A member retiring after age 55 with 25 or more years of service or after age 60 with 10 or more years of service may, at the member's option, elect to receive a refund of a percentage, up to 100%, of the member's accumulated contributions excluding interest on the effective date of his or her retirement.
(b) The member's lifetime pension otherwise payable, as calculated under § 32.13, shall be reduced by an amount which is the actuarial equivalent of the refunded accumulated contributions excluding interest. The actuarial equivalent amount shall be computed on the basis of the mortality and interest rates used by the Pension Benefit Guaranty Corporation for valuing benefits of non-multi-employer pension plans terminating during the month of the member's retirement, using a unisex factor based on an 85% male/15% female mix, as provided by the Actuary for the retirement system.
(2) Except as otherwise provided, the following provisions concerning direct rollovers shall apply to distributions made on or after January 1, 1993:
(a) Application. Notwithstanding any provision of this chapter to the contrary that would otherwise limit a distributee's election under this section, a distributee may elect, at any time and in the manner prescribed by the Board of Trustees, to have any portion of an eligible rollover distribution paid directly to an Eligible Retirement Plan specified by the distributee in a direct rollover.
(b) Definitions. For purposes of this section, the following definitions shall apply.
DIRECT ROLLOVER. A payment by the retirement system to the Eligible Retirement Plan specified by the distributee.
DISTRIBUTEE. Includes an employee or former employee. In addition, the employee's or former employee's surviving spouse are distributees with regard to the interest of the spouse or former spouse.
ELIGIBLE RETIREMENT PLAN. Means as follows:
1. An individual retirement account described in § 408(a) of the United States Internal Revenue Code;
2. An individual retirement annuity (other than an endowment contract) described in §408(b) of the United States Internal Revenue Code;
3. A qualified plan described in § 401(a) of the United States Internal Revenue Code if it is a defined contribution plan which permits the acceptance of rollover distributions;
4. An annuity plan described in § 403(a) of the United States Internal Revenue Code;
5. Effective January 1, 2002, an annuity contract described in § 403(b) of the United States Internal Revenue Code; or
6. Effective January 1, 2002, an eligible plan under § 457(b) of the United States Internal Revenue Code 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 retirement system.
7. Effective January 1, 2002, the definition of an Eligible Retirement Plan shall also apply in the case of a distribution to a surviving spouse.
ELIGIBLE ROLLOVER DISTRIBUTION.
1. Any distribution of all or any portion of the balance to the credit of the distributee, except that an ELIGIBLE ROLLOVER DISTRIBUTION does not include:
a. Any distribution that is one of a series of substantially equal periodic payments (paid not less frequently than annually) paid over any 1 of the following periods: the life of the member (or the joint lives of the member and the member's designated beneficiary), the life expectancy of the member (or the joint life and last survivor expectancy of the member and the member's designated beneficiary), or a specified period of 10 years or more;
b. Any distribution to the extent the distribution is required under § 401(a)(9) of the United States Internal Revenue Code relating to the minimum distribution requirements;
c. Except as provided below, the portion of any distribution that is not includable in gross income (the part of a member's distribution which is related to after-tax contributions made prior to April 1, 1979); and
d. Similar items designated in revenue rulings, notices, and other guidance from the Treasury Department of general applicability.
2. Effective January 1, 2002, a portion of a distribution shall not fail to be an eligible rollover distribution merely because the portion consists of after-tax employee contributions which are not includable in gross income. However, such portion may be paid only to an individual retirement account or annuity described in § 408(a) or (b) of the United States Internal Revenue Code, or to a qualified defined contribution plan described in § 401(a) or 403(a) of the United States Internal Revenue 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.
(Ord. passed 11-20-1980; Am. Ord. 91-9, passed 9-19-1991; Am. Ord. 02-01, passed 6-27-2002; Am. Ord. 02-02, passed 6-30-2002; Am. Ord. 09-01, passed 2-5-2009)