(A) Interpretation. The masculine gender shall include the feminine gender and words of the singular number with respect to persons shall include the plural number, and vice versa.
(B) Definitions. The following words and phrases used in this chapter, unless a different meaning is clearly indicated by the context, shall have the following meanings:
ACCUMULATED CONTRIBUTIONS. The sum of all amounts deducted from the compensation of a member and credited to his or her individual account in the Member’s Deposit Fund, together with regular interest thereon.
ACTUARIAL AGE. The chronological whole number age nearest the actual chronological age of the individual, e.g., a person who is in the age range of 49 years, six months and one day to 50 years and six months has an actuarial age of 50 years.
BENEFICIARY. Any person except a retiree who is in receipt of or who has entitlement to a pension or other benefit payable or to be paid by the retirement system.
BOARD OF TRUSTEES or BOARD. The Board of Trustees provided for in this chapter.
CITY. The City of Saginaw.
COMPENSATION. The salary paid a member by the city for services rendered by him or her as a police officer or firefighter.
COUNCIL. The Council of the City of Saginaw.
CREDITED SERVICE. The service credited to a member by the Board of Trustees to the extent provided in this chapter.
FINAL AVERAGE SALARY.
(a) The average of the annual compensations paid a member during any three years he or she may select within the period of ten consecutive years of his or her credited service immediately preceding the date of termination of his or her last employment with the city as a police officer or firefighter; provided, however, that effective (July 1, 1979, in the case of a firefighter member) (January 1, 1982, in the case of a member who is a police sergeant, police lieutenant, police captain, or police chief); or (July 1, 1982, in the case of a member who is a police patrol officer) there shall be included in the computation of final average salary the value of accumulated vacation only and not the value of accumulated sick leave; and further provided that effective January 1, 1985, through March 31, 1985, in the case of a member who is a police sergeant, police lieutenant, or police captain there shall be included in the computation of final average salary the value of accumulated sick leave up to 90 days and accumulated vacation. In the case of a Police Chief who is employed on January 1, 1996 and retires on January 2, 1996, there shall be included in the computation of final average salary, the value of accumulated sick leave up to 60 days and accumulated vacation. In the case of a Deputy Police Chief who is employed September 14, 1997 and retires September 15, 1997, there shall be included in the computation of final average salary, the value of one-half of the accumulated sick leave up to 90 days and accumulated vacation. If he or she has less than three years of credited service, his or her final average salary shall be the average of his or her annual rates of compensation for his or her total period of credited service. If a member is forced to retire because of an injury arising out of the performance of his or her duties, and if he or she has received less than his or her full salary at any time during his or her final three years of employment due to said injury, his or her full annual compensation rate shall be used in computing his or her final average salary if this is to his or her advantage.
(b) If a firefighter member retires on or after July 1, 1983, or a police sergeant, lieutenant, or police captain member retires on or after September 19, 1984, or a police patrol officer member retires on or after July 1, 1990, and if he or she has received less than his or her full salary at any time during the three years chosen for computation of his or her final average salary due to an on-the-job injury, his or her full annual compensation rate shall be used in computing his or her final average salary if this is to his or her advantage.
FINAL COMPENSATION. A member’s annual rate of compensation at the time his or her employment with the city as a police officer or firefighter last terminates.
FIREFIGHTER.
(a) Any employee in the Fire Department of the city who holds the rank of firefighter or higher rank.
(b) The term
FIREFIGHTER shall not include:
1. Any person who is privately employed as a firefighter;
2. Any person who is temporarily employed as a firefighter for an emergency;
3. Any civilian employee in the Fire Department, provided however that on or after July 1, 1988, civilians in the position of Fire Mechanic and Fire Apparatus Supervision shall be included in the term
FIREFIGHTER; and
4. Any member of the fire auxiliary corps or its equivalent.
MEMBER. Any person who is included in the membership of the retirement system.
NEW MEMBER. Any member who first entered or enters the employ of the city as a police officer or firefighter after June 30, 1947.
ORIGINAL MEMBER. Any member who first entered the employ of the city as a police officer or firefighter prior to July 1, 1947.
PENSION. An annual amount payable by the retirement system throughout the future natural life of a person or for a temporary period as provided in this chapter. All PENSIONS shall be payable in equal installments as the Board of Trustees shall from time to time determine.
PENSION RESERVE. The present value of all payments to be made on account of any pension. Such PENSION RESERVE shall be computed upon the basis of such mortality and other tables of experience and regular interest as the Board of Trustees shall from time to time adopt.
POLICE OFFICER.
(1) Any employee of the Police Department of the city who holds the rank of patrol officer or higher rank.
(2) The term
POLICE OFFICER shall not include:
(a) Any person who is privately employed as a police officer;
(b) Any person who is temporarily employed as a police officer or firefighter for an emergency;
(c) Any civilian employee in the Police Department; or
(d) Any member of the police auxiliary corps or its equivalent.
REGULAR INTEREST. Such rate or rates of interest per annum, compounded annually as the Board of Trustees shall from time to time adopt.
RETIREMENT. Any member who retires with a pension payable by the retirement system.
RETIREMENT SYSTEM or SYSTEM. The City of Saginaw Police Officers and Firefighters Retirement System, established in this chapter.
SERVICE. Service rendered to the city as a police officer or firefighter.
SPOUSE. The person to whom the retiree was legally married on both the effective date of his or her retirement and the date of his or her death.
TOTAL ACTUARIAL COST. Defined and calculated as follows.
(a) Section 16.08(A)(3) of the Saginaw Code of Ordinances states that, “Effective July 1, 1996, any police officer who was a member on or after this date shall be allowed to purchase prior law enforcement service time up to five years with such member paying the total actuarial cost.” The following procedure shall be used to calculate the total actuarial cost of service purchased under this section.
1. The present value of the expected benefits to be paid to the member from the system shall be calculated as of the member’s service credit purchase date, without regard to the purchase of service.
2. The present value of the expected benefits to be paid to the member from the system shall be calculated as of the member’s service credit purchase date, including the effect of the purchase of service. The additional service credit will be used in both calculating the amount of benefit and in determining the earliest date benefits will commence.
3. The cost of the service credit purchase to the member, as of the service credit purchase date, shall be the difference between divisions (a)2. and (a)1. above.
(b) The calculation of the above amounts shall be based on the benefit formula in effect as of the service credit purchase date, and the following assumptions:
1. Interest discount factor: the investment return (net of expenses) used in the most recently published annual actuarial valuation of the system;
2. Mortality table: a blend of 50% of the male rates and 50% of the female rates of the mortality table used in the most recently published annual actuarial valuation of the system;
3. Benefit commencement date: the date of earliest retirement, assuming continuous accrual of eligibility service from the service credit purchase date;
4. Amount of expected benefit: calculated as of the earliest retirement date. If the member is not eligible to retire at the service purchase date the expected benefit will be based on service and final average salary (FAS) projected to the earliest retirement date. FAS for this purpose will be projected from FAS as of the service purchase date using the base (economic) annual rate of pay increase from the most recently published annual actuarial valuation of the system. If the member is eligible to retire as of the service purchase date, actual service and FAS as of the service purchase date shall be used; and
5. Form of payment: 60% joint and survivor. Actual spousal birth date will be used if available. If unavailable, or the participant is unmarried at the time of service purchase, the female spouse is assumed to be three years younger than the male spouse.
(c) Two examples of the service credit purchase calculation are shown in the following divisions:
1. Example 1. In this example, the benefit formula is 2.6% times final average salary (FAS) times the first 25 years of service, plus 2.75% times FAS service in excess of 25 years. A member can retire after 20 years of service, regardless of age.
Data as of Service Credit Purchase Date | |
Member’s date of birth | 12-1-1963 |
Spouse’s date of birth | 2-1-1964 |
Service purchase date (SPD) | 2-1-2007 |
Member’s age at SPD | 43.13 |
Service at SPD | 16.00 |
Final average salary at SPD: | $62,000 |
a. The member wishes to purchase five years of prior law enforcement time.
Step 1: Calculate Expected Benefit at Earliest Retirement Age Before Service Purchase | |
Assuming continuous employment, the earliest date the member can retire is 2-1-2011. | |
Earliest retirement date (ERD) | 2-1-2011 |
Age at ERD | 47.13 |
Service at ERD | 20.00 |
FAS at ERD | $74,646.22 |
Bi-weekly benefit at ERD | $1,492.92 |
Present value as of SPD | $402,754 |
Step 2: Calculate Expected Benefit at Earliest Retirement Age After Service Purchase | |
By purchasing five years, the member is eligible to retire on the service purchase date. | |
Earliest retirement date (ERD) | 2-1-2007 |
Age at ERD | 43.13 |
Service at ERD | 21.00 |
FAS at ERD | $62,000 |
Bi-weekly benefit at ERD | $1,302 |
Present value as of SPD | $468,251 |
Step 3: Calculate the Cost of the Service Purchase |
$468,251 minus $402,754 = $65,497 |
b. Comment: in this example, the benefit calculated at ERD before the service purchase is larger than the bi-weekly benefit calculated after the service purchase (due to the projected increase in the FAS). However, the present value in Step 2 is larger than in Step 1 because benefits are expected to be paid out four years longer than in Step 1.
2. Example 2: In this example, the benefit formula is 2.6% times final average salary (FAS) times the first 25 years of service, plus 2.75% times FAS service in excess of 25 years. A member can retire after 20 years of service, regardless of age.
Data as of Service Credit Purchase Date | |
Member’s date of birth | 1-1-1961 |
Spouse’s date of birth | 8-1-1960 |
Service purchase date (SPD) | 5-1-2004 |
Member’s age at SPD | 43.33 |
Service at SPD | 20.00 |
Final average salary at SPD | $68,000 |
a. The member wishes to purchase five years of prior law enforcement time.
Step 1: Calculate Expected Benefit at Earliest Retirement Age Before Service Purchase |
Step 1: Calculate Expected Benefit at Earliest Retirement Age Before Service Purchase | |
The member is eligible to retire on the SPD, so this is the ERD for this calculation. | |
Earliest retirement date (ERD) | 5-1-2004 |
Age at ERD | 43.33 |
Service at ERD | 20.00 |
FAS at ERD | $68,000 |
Bi-weekly benefit at ERD | $1,360 |
Present value as of SPD | $444,815 |
Step 2: Calculate Expected Benefit at Earliest Retirement Age After Service Purchase | |
Since SPD = ERD the purchased service increases the annuity but does not change the retirement date. | |
Earliest retirement date (ERD) | 5-1-2004 |
Age at ERD | 43.33 |
Service at ERD | 25.00 |
FAS at ERD | $68,000 |
Bi-weekly benefit at ERD | $1,700 |
Present value as of SPD | $556,019 |
Step 3: Calculate the Cost of the Service Purchase |
$556,019 minus $444,815.00 = $111,204 |
b. Comment: in this example, the member was eligible to retire on the service purchase date before the purchase of service.
VOLUNTARY RETIREMENT AGE.
(1) Age 52 years for firefighters and age 52 years for police officers; provided, that in the case of an original member,
VOLUNTARY RETIREMENT AGE means age 52 years for firefighters and age 52 years for police officers or the age at which he or she acquires 25 years of credited service, whichever occurs first.
(a) 1. The above-stated
VOLUNTARY RETIREMENT AGE notwithstanding, from July 1, 1985, through June 30, 1990, firefighter members may elect “voluntary retirement” at age 50 years and receive a pension calculated in all respects as if they had retired at age 52 years.
2. “In all respects” does not include anticipated salary increases after date of retirement to age 52. Provided, however, that from July 1, 1990, onward
VOLUNTARY RETIREMENT AGE for firefighters shall again become age 52 years as hereinbefore defined.
(b) This stated
VOLUNTARY RETIREMENT AGE notwithstanding, from July 1, 1988, a firefighter may elect voluntary retirement at actuarial age 50 and the acquirement of 20 years of credited service.
(c) The above-stated
VOLUNTARY RETIREMENT AGE notwithstanding, from July 1, 1985, a member who is a police patrol officer may elect “voluntary retirement” at the age at which he or she acquires 20 years of credited service.
(d) The above-stated
VOLUNTARY RETIREMENT AGE notwithstanding, from December 12, 1984, a member who is a police sergeant, police lieutenant, or police captain on December 12, 1984, but not a member who becomes a member of the police command officers bargaining group after December 12, 1984, may elect “voluntary retirement” at the age at which her or she acquires 20 years of credited service.
(e) The above-stated
VOLUNTARY RETIREMENT AGE notwithstanding, a member who is a Deputy Police Chief on October 10, 2002 and who retires on October 11, 2002 shall be allowed to retire with 16 years and 11 months of service, and a member who is a Deputy Police Chief on January 20, 2005 and who retires on January 21, 2005 shall be allowed to retire with 19 years and one month of service.
(Prior Code, § 16.02) (Ord. D-678, passed 1-18-1965, effective 2-1-1965; Ord. D-1592, passed 6-19-1989, effective 6-29-1989; Ord. D-1737, passed 3-20-1995, effective 3-30-1995; Ord. D-1856, passed 7-24-2000, effective 8-3-2000; Ord. O-51, passed 8-7-2006, effective 8-17-2006; Ord. O-77, passed 3-9-2009, effective 3-19-2009)