Benefits under this chapter shall be subject to the Michigan Public Employee Retirement Benefit Protection Act (the "Benefit Protection Act"), M.C.L.A. §§ 38.1681 - 38.1689.
(A) Neither the principal of the Trust Fund nor any of the income therefrom, nor interest in the Trust whatever, shall be subject to any conveyance, transfer or assignment by any member or beneficiary, nor shall the same be pledged as collateral by any member or beneficiary, nor shall the same be subject to any claim of any creditor of any member or beneficiary through legal process or otherwise. The preceding sentence shall also apply to the creation, assignment, or recognition of a right to any benefit payable with respect to a member pursuant to a domestic relations order, except as specifically provided for eligible domestic relations orders ("EDROs") pursuant to the M.C.L.A. §§ 38.1701 - 38.1711 and except as provided for domestic relations orders described in the Benefit Protection Act which comply with the requirements set forth in division (C) below. It is the intention to place the absolute title to all property which shall constitute the assets of the trust in the trustee, with power to pay out the same and distribute the trust assets as provided in this chapter. Any attempted sale, conveyance, assignment or pledge of any of the funds or properties held in trust, or any part thereof, or of any income from the trust, by any member or beneficiary shall be null and void, and shall not be recognized by the Board of Trustees.
(B) Notwithstanding division (A) above, a member who is convicted of or enters a plea of nolo contendere accepted by the court for a felony as defined in P.A. No. 350 of 1994, as amended, and which arises out of his or her service as a public employee may, by order of the court, have all or part of his or her pension forfeited. If a court orders such a forfeiture, the order shall comply with the legal requirements of P.A. No. 350 of 1994, as amended, which are incorporated by reference.
(C) (C) Benefits under the retirement system may be assigned pursuant to an EDRO under the Eligible Domestic Relations Order Act of 1991, M.C.L.A. §§38.1701 et seq., or pursuant to a domestic relations order which meets the requirements of the Public Employee Retirement Benefit Protection Act of 2002, M.C.L.A. §§ 38.161 et seq.
(1) If a member has already started to receive his or her benefits, the form of payment may not be changed and, if the form of payment is a joint and survivor annuity, the joint annuitant may not be changed. However, the domestic relations order may order that all or any portion of the annuity payments be paid to the alternate payee, and may specify that any amounts not paid to the alternate payee may be paid to the member or the member's subsequent spouse after the member's death, but only over the life of the joint annuitant named at the commencement of the member's benefits, for a joint and survivor annuity.
(2) An order shall not be acceptable unless it includes directions with respect to the member's accumulated contributions. An order shall:
(a) Direct that all, any, or no portion of the accumulated contributions be awarded to the alternate payee; and
(b) Direct the form of payment of the alternate payee's share of the accumulated contributions, which may only be as an annuity if the order is an EDRO, but which may be an annuity or a lump sum otherwise permitted under this chapter, if the order is submitted under the Benefit Protection Act.
(3) The retirement system may, in the Board’s sole discretion, charge for the cost to review the order by the retirement system's actuary or attorney. An order shall not be acceptable unless it includes directions on who will pay such charges. In the event a portion of a member's benefit is assigned to an alternate payee pursuant to an EDRO or an order meeting the requirements of the Benefit Protection Act, the alternate payee's choice of a form of payment shall not affect the right of the member to independently elect a form of payment of the remainder of benefits, unless the alternate payee is designated as the member's surviving spouse in an EDRO or unless the member's benefits are already in pay status (in which case the form of payment is already fixed).
(D) If a member is covered by a group insurance or prepayment plan participated in by the city, and should he or she be permitted to, and elect to, continue such coverage as a retirant, he or she may authorize the Board to have deducted from his or her pension the payments required of him or her to continue coverage under such group insurance or prepayment plan. The city shall have the right of setoff for any claim arising from embezzlement by or fraud of a member, retirant, or beneficiary.
(Ord. passed 11-20-1980; Am. Ord. 02-01, passed 6-27-2002; Am. Ord. 02-02, passed 6-30-2002; Am. Ord. 09-01, passed 2-5-2009)