(A) Notwithstanding any other provisions of this plan, the retirement benefit of a member shall be reduced to the extent that it exceeds amounts specified in Section 415 of the Internal Revenue Code (IRC).
(B) The city shall solely for the purpose of compliance with Sections 125, 457, and 414(h) of the Internal Revenue Code, pick up the members’ contributions required to be made by employees on earnings paid with respect to payroll periods upon this section becoming effective. The member contributions so picked up shall be designated as employer contributions in determining tax treatment under the Internal Revenue Code. Member contributions picked up by the city pursuant to this subsection shall be treated for all other purposes of this and other laws of the city in the same manner and to the same extent as member contributions made prior to the effective date of this division (B). No employee shall have the option of choosing to receive the contributed amounts directly instead of having them paid by the city to the System.
(C) This section applies to distributions made on or after January 1, 1993. Notwithstanding any provision of the plan to the contrary that would otherwise limit a distributee’s election under this section, a distributee may elect, at any time and in any manner prescribed by the plan administrator, to have any portion of an eligible rollover distribution paid directly to an eligible retirement plan specified by the distributee in a direct rollover. For the purposes of this section the following definitions shall apply:
DIRECT ROLLOVER. A payment by the plan to the eligible retirement plan specified by the distributee. Effective as of January 1, 2008, a non-spouse beneficiary may make a direct rollover only to an “inherited” individual retirement account as described in IRC § 408(b). If a non-spouse beneficiary receives a distribution from the plan, the distribution is not eligible for a 60-day (non-direct) rollover.
DISTRIBUTEE. An employee or former employee. In addition, the employee's or former employee's surviving spouse is a distributee with regard to the interest of the spouse. Effective as of January 1, 2008, an employee's or former employee's non-spouse beneficiary is a distributee with regard to the interest of the employee or former employee.
ELIGIBLE RETIREMENT PLAN. An individual retirement account described in § 408(a) of the IRC, an individual retirement annuity account described in § 403(a) of the IRC, or a qualified trust described in § 401(a) of the IRC, that accepts the distributee's eligible rollover distribution.
Effective for distributions made after December 31, 2001, an eligible retirement plan shall also mean an annuity contract described in IRC § 403(b) and an eligible plan under IRC § 457(b) 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 Plan.
ELIGIBLE ROLLOVER DISTRIBU- TION. 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 any distribution that is one of a series of substantially equal periodic payments (not less frequently than annually) of the distributee and the distributee’s designated beneficiary, for a specified period of ten years or more; any distribution to the extent such distribution is required under § 401(a)(9) of the Internal Revenue Code of 1986 as amended (IRC); and, the portion of any distribution that is not includable in gross income.
(D) In addition to other applicable limitations set forth in the plan, and notwithstanding any other provisions of the plan to the contrary, for the plan years beginning on or after October 1, 1996, the annual compensation of each employee (who first became a plan participant in a plan year beginning after September 30, 1996) taken into account under the plan shall not exceed the Omnibus Budget Reconciliation Act of 1993 (OBRA ‘93) annual compensation limit. The OBRA ‘93 annual compensation limit is $150,000, as adjusted by the Commissioner for increases in the cost-of-living in accordance with § 401(a)(17)(B) of the IRC. The cost-of-living adjustment in effect for a calendar year applies for any period, not exceeding 12 months, over which compensation is determined (determination period), beginning in such calendar year. If a determination period consists of fewer than 12 months, the OBRA ‘93 annual compensation limit will be prorated. For plan years beginning on or after October 1, 1996, any reference in this plan to the limitation under § 401(a)(17) of the IRC shall mean OBRA ‘93 annual compensation limit set forth in this provision. The OBRA ‘93 annual compensation limit shall not apply to employees who were participants in the plan before the first plan year beginning after September 30, 1996.
(E) Notwithstanding anything herein to the contrary, a member’s benefits shall commence no later than April 1 of the calendar year following the later of (I) the calendar year in which he or she attains age 70 ½ or (ii) the calendar year in which he or she retires (the “Required Beginning Date”). All distributions from the plan (including the DROP) shall conform to the regulations issued under Section 401(a)(9) of the IRC, including the incidental death benefit provision of Section 401(A)(9)(G) of the IRC. Further, such regulation shall override any plan or DROP provision that is inconsistent with Section 401(a)(9) of the IRC.
Notwithstanding any other provision of this plan to the contrary, the form of retirement income payable from this plan shall satisfy the following conditions:
(1) If the retirement income is payable before the member's death:
(a) It shall either be distributed or commence to the member not later than April 1 of the calendar year following the later of the calendar year in which the member attains age 70½, or the calendar year in which member retires;
(b) The distribution shall commence not later than the calendar year defined above; and
1. Shall be paid over the life of the member or over the lifetimes of the member and spouse, descendant or dependent; or
2. Shall be paid over the period extending not beyond the life expectancy of the member and spouse, descendant or dependent.
Where the form of retirement income payment has commenced in accordance with the preceding paragraphs and the member dies before his entire interest in the plan has been distributed, the remaining portion of such interest in the plan shall be distributed no less rapidly than under the form of distribution in effect at the time of the member's death.
(2) If the member's death occurs before the distribution of his interest in the plan has commenced, member's entire interest in the plan shall be distributed within five years of member's death, unless it is to be distributed in accordance with the following rules:
(a) The member's remaining interest in the plan is payable to his spouse, descendant or dependent;
(b) The remaining interest is to be distributed over the life of the spouse, descendant or dependent or over a period not extending beyond the life expectancy of the spouse, descendant or dependent; and
(c) Such distribution begins within one year of the member's death unless the member's spouse, is the sole designated beneficiary, in which case the distribution need not begin before the date on which the member would have attained age 70½ and if the member's spouse dies before the distribution to the spouse begins, this section shall be applied as if the spouse were the member.
(F) Any provision of this plan that would cause it to fail to comply with the applicable requirements for qualified plans under the IRC shall, to the extent be necessary to maintain the qualified status of the Plan, be null and void ab initio, and of no force and effect, and the plan shall be construed as if such provision had never been inserted in the plan.
(G) Notwithstanding any other provision of this plan to the contrary, the form of retirement income payable from this plan shall satisfy the following conditions:
(1) If the retirement income is payable before the member's death:
(a) It shall either be distributed or commence to the member not later than April 1 of the calendar year following the later of the calendar year in which the member attains age 70-1/2, or the calendar year in which member retires;
(b) The distribution shall commence not later than the calendar year defined above; and (a) shall be paid over the life of the member or over the lifetimes of the member and spouse, issue or dependent, or (b) shall be paid over the period extending not beyond the life expectancy of the member and spouse, issue or dependent.
Where the form of retirement income payment has commenced in accordance with the preceding paragraphs and the member dies before his entire interest in the plan has been distributed, the remaining portion of such interest in the plan shall be distributed no less rapidly than under the form of distribution in effect at the time of the member's death.
(2) If the member's death occurs before the distribution of his interest in the plan has commenced, member's entire interest in the plan shall be distributed within five years of member's death, unless it is to be distributed in accordance with the following rules:
(a) The member's remaining interest in the plan is payable to his spouse, issue or dependent;
(b) The remaining interest is to be distributed over the life of the spouse, issue or dependent or over a period not extending beyond the life expectancy of the spouse, issue or dependent; and
(c) Such distribution begins within one year of the member's death unless the member's spouse is the sole designated beneficiary, in which case the distribution need not begin before the date on which the member would have attained age 70-1/2 and if the member's spouse dies before the distribution to the spouse begins, this section shall be applied as if the spouse were the member.
(Ord. 967, passed 9-19-91; Am. Ord. 1067, passed 3-16-94; Am. Ord. 1091, passed 9-8-94; Am. Ord. 1353, passed 9-20-00; Am. Ord. 1480, passed 3-17-04; Am. Ord. 1669, passed 8-4-10; Am. Ord. 1767, passed 1-15-14; Am. Ord. 1819, passed 5-6-15)