(A) This section is enacted pursuant to federal law that imposes certain legal requirements on qualified governmental plans. The city intends that the retirement system be a qualified pension plan under § 401 of the United States Internal Revenue Code, as amended, and that the trust be an exempt organization under § 501 of the United States Internal Revenue Code, as amended. The Board of Trustees shall administer the retirement system to fulfill this intent.
(B) The retirement system and trust have been created for the exclusive benefit of members and beneficiaries as set forth herein. No part of the principal and income of any funds of the retirement system and trust shall revert to or be returned to the city prior to the satisfaction of all liabilities hereunder to all members, beneficiaries, and persons claiming by or through them.
(C) In the event of termination of, or complete discontinuance of contributions to, the retirement system, the rights of all the members, vested former members, retirants, beneficiaries, or any other person having an interest in the retirement system, to benefits accrued to the date of such termination or discontinuance, shall be nonforfeitable to the extent funded as prescribed by § 411(e)(2) of the United States Internal Revenue Code, as amended, and related Internal Revenue Service regulations applicable to governmental plans.
(D) The retirement system shall not pay any benefit that would exceed the benefit limitations for governmental plans as set forth in § 415 of the United States Internal Revenue Code, as amended, and related Internal Revenue Service regulations applicable to governmental plans which is hereby incorporated by reference.
(1) For purposes of Section 415 of the Internal Revenue Code, compensation shall mean compensation actually paid during the limitation year and the limitation year shall be the plan year or such other consecutive 12-month period over which compensation is otherwise determined under the plan.
(2) For purposes of adjusting any benefit or limitation under Section 415 of the Internal Revenue Code, the mortality table used shall be the table prescribed by the United States Secretary of the Treasury in accordance with Section 415(b)(2)(E)(v) of the Internal Revenue Code.
(3) For limitation years beginning on and after January 1, 2001, for purposes of applying the limitations described herein, compensation paid or made available during such limitation years shall include elective amounts that are not includible in the gross income of the member by reason of Section 132(f)(4) of the Internal Revenue Code.
(4) For limitation years beginning after December 31, 1997, for purposes of applying the limitations of Section 415 of the Internal Revenue Code, compensation paid or made available during such limitation years shall include any elective deferral (as defined in Section 402(g)(3) of the Internal Revenue Code), and any amount which is contributed or deferred by the employer at the election of the employee and which is not includable in the gross income of the employee by reason of Section 125 or 457 of the Code.
(E) (1) If the annual benfit under this chapter to a member is in a form other than a straight life annuity, the maximum permissible amount shall be adjusted to the actuarial equivalent of a straight life annuity beginning at the same age. The interest rate assumption used for determining the actuarial equivalent of such other forms of benefits will be the greater of:
(a) 5%; or
(2) For distributions with an annuity starting date between July 1, 1989 and June 30, 1995, the applicable mortality table shall be the mortality table set forth in § 32.02 definition of ACTUARIAL EQUIVALENT of this chapter. For distributions with an annuity starting date between July 1, 1995 and June 30, 2003, the applicable mortality table shall be the mortality table set forth in Internal Revenue Service Revenue Ruling 95-6. For distribution with an annuity starting date on or aafter July 1, 2003, the applicable mortality table shall be the mortality table set forth in IRS Revenue Ruling 2001-62.
(Ord. 02-01, passed 6-27-2002; Am. Ord. 02-02, passed 6-30-2002; Am. Ord. 09-01, passed 2-5-2009)