Notwithstanding any other provision of this plan to the contrary, the plan shall pay all benefits in accordance with a good faith interpretation of the requirements of Section 401(a)(9) of the Internal Revenue Code and the regulations in effect under that section, as applicable to a governmental plan within the meaning of Section 414(d) of the Internal Revenue Code. The plan is subject to the following conditions:
(A) If any retirement income is payable before the member’s death:
(1) 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 seventy and one-half (70 1/2) years or the calendar year in which he retires.
(2) The distribution shall commence not later than the calendar year defined in subsection (A) above and (i) shall be paid over the life of the member or over the lifetimes of the member and his designated beneficiary, or (ii) shall be paid over the period extending not beyond the life expectancy of the member or the life expectancies of the member and his designated beneficiary.
Where a 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.
(B) If the member’s death occurs before the distribution of his interest in the plan has commenced, his entire interest in the plan shall be distributed within five years of his death, unless it is to be distributed in accordance with the following rules:
(1) If the member’s surviving spouse is the sole designated beneficiary, the member’s remaining interest in the plan is distributed or begins to be distributed by December 31 of the calendar year immediately following the calendar year in which the member died or by December 31 of the calendar year in which the participant would have attained age 70 1/2, if later, and if the surviving spouse dies before the distribution to the surviving spouse begins, this section shall be applied as if the surviving spouse were the plan member; or
(2) If the member’s surviving spouse is not the sole designated beneficiary, the member’s remaining interest is to be distributed over the life of the designated beneficiary or over a period not extending beyond the life expectancy of the designated beneficiary: and such distribution begins no later than December 31 of the calendar year immediately following the calendar year of the member’s death.
(C) The amount of an annuity paid to a member’s beneficiary may not exceed the maximum determined under the incidental death benefit requirement of Section 401(a)(9)(G) of the Internal Revenue Code, and the minimum distribution incidental benefit rule under Treasury Regulation Section 1.401(a)(9)-6, Q&A-2.
(D) The death and disability benefits provided by the plan are limited by the incidental benefit rule set forth in Section 401(a)(9)(G) of the Internal Revenue Code and Treasury Regulation Section 1.401-1(b)(1)(i) or any successor regulation thereto. As a result, the total death or disability benefits payable may not exceed 25% of the cost for all of the members’ benefits received from the plan.
(E) Notwithstanding the other provisions of the plan or the provisions of the Treasury Regulations, benefit options may continue so long as the option satisfies Section 401(a)(9) of the Internal Revenue Code based on a reasonable and good faith interpretation of that section.
(Ord. 93-73, passed 9-21-93; Am. Ord. 2010-35, passed 6-22-10)