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Starting on July 1, 1997, the Retirement Board shall establish in the Retirement Fund a Reserve Account. Funds in this Reserve Account shall be used to provide supplemental cost of living benefit adjustments to retirement allowances in addition to cost of living adjustments now provided for in the Charter. Funds placed in this Reserve Account shall consist of all earnings of the Retirement Fund in the previous fiscal year which are in excess of the expected earnings on the actuarial value of the assets. The expected earnings are the earnings projected by the actuarial assumption for return on assets that was in place for that fiscal year. The maximum amount of funds to be placed in this Reserve Account shall not exceed the amount of funds projected to be necessary to fund benefits provided pursuant to this section for that fiscal year and the following two fiscal years.
The funds in this Reserve Account shall be used solely to provide supplemental cost of living benefit adjustments as follows:
(a) On July 1, 1997 and July 1 of each succeeding year, if there are sufficient funds in this Reserve Account, each retirement allowance or death allowance payable on account of a member who died, including retirement allowances subject to change when the salary rate of a member is changed, shall be increased by an amount equal to three percent (3%) of the allowance, less the amount of any cost of living adjustment provided pursuant to Section 8.526 and less the amount of any cost of living adjustment, payable in that fiscal year, which is the result of a change in the salary of the member.
(b) On July 1, 1997, if there are sufficient funds in this Reserve Account, each retirement allowance payable to or account of a member who was retired on or before December 31, 1979 as a member under Sections 8.507 or 8.509 or 8.584 shall be increased by a monthly amount equal to $3 for each complete year of retirement. In computing years of retirement, the Retirement System shall count completed fiscal years between the member's effective date of retirement and June 30, 1997.
(c) On and after June 30, 2003, any supplemental cost of living benefit adjustment, once paid to a member, shall not be reduced thereafter.
(d) On and after June 30, 2003, the Reserve Account set forth in this section shall be used to finance only the increase in the supplemental cost of living benefit adjustments for the next ensuing fiscal year as set forth in section (a). If there are insufficient funds in the Reserve Account to pay the increase in the supplemental cost of living benefit adjustments for the next ensuing fiscal year, then the increase in the supplemental cost of living benefit adjustments for that fiscal year shall not be paid. However, any excess earnings as defined in this section shall be accumulated until an amount sufficient to make one fiscal year's increase in the supplemental cost of living benefit adjustments is reached.
(Added November 1996; amended March 2002)
(a) Notwithstanding the provisions of Section A8.526 or any other provision of the Charter to the contrary, effective January 10, 2009, each retirement allowance payable which is not subject to change when the salary rate of any member is changed shall be adjusted according to the provisions of this Section A8.526-2 and not Section A8.526.
(b) (1) Funds necessary for the payment of any increase in allowances pursuant to this Section A8.526-2 that are payable to, or on account of, members who retired or died, shall be provided from the City's accumulated contributions held by the system on account of such members. The City's contributions shall be determined on the basis of a normal contribution rate which shall be computed as a level percentage of compensation which, when applied to the future compensation of the average new member entering the system, together with the required member contribution, will be sufficient to provide for the payment of all prospective benefits of such member.
(b) (2) Any increase in allowances payable which are not funded by the City's accumulated contributions held by the system shall be funded by contributions of members entitled to said allowances, which shall be at rates which are in addition to the rates of contribution otherwise provided by Charter or ordinance, provided that a member's rate of contribution shall not exceed one-half of one percent of his or her monthly compensation. The contributions made under this section by any member shall be credited together with regular interest thereon to his or her individual account and shall be subject to the same Charter and ordinance provisions relating to accumulated contributions of the member, including withdrawal and death benefits other than death allowances, provided, however, that upon his or her retirement or death, such accumulated contributions and interest shall not be applied to provide a part of the retirement benefits payable to him or her on the death allowance benefits payable on account of his or her death otherwise provided by Charter or ordinance, but instead shall be held, together with the accumulated contributions made by the City pursuant to this Subsection (b)(3), with interest thereon, to provide the benefits under this Section A8.526-2.
(b) (3) The rates of contribution of members and the City, as provided herein, shall be fixed by the retirement board from time to time as it determines necessary.
(c) (1) The retirement board shall determine, prior to April 1 of each year, the percentage of increase or decrease in the cost of living during the preceding calendar year, as shown by the then current Consumer Price Index. All Items, San Francisco (1957-59=100), issued by the U.S. Bureau of Labor Statistics and published in the Monthly Labor Review or a successor publication. The cost of living adjustments as hereinafter provided shall be based on the percentage of such increase or decrease.
(c) (2) Notwithstanding any other Charter or ordinance provision governing the Retirement System, effective January 10, 2009, every retirement or death allowance payable to, or on account of any member who retires or dies as a member of the system or who has retired or died as such a member, except allowances subject to change when the salary rate of any member is changed, shall be increased or decreased as of July 1, 2009, and on July 1, of each succeeding year by an amount equal to the percentage, as determined in Subsection (c)(1) multiplied by the monthly allowance payable on June 30 of that calendar year.
(c) (3) The percentage of increase or decrease in each such allowance shall be the percentage which is determined by the retirement board to approximate to the nearest one percent increase or decrease in the cost of living during the preceding calendar year.
(c) (4) No such adjustment in any year shall exceed two percent of said allowance: provided, however, that no allowance shall be reduced below the amount being received by the member or the member's beneficiary on July 1, 1968, or on the effective date the member began to receive the allowance, whichever is later.
(d) (1) Commencing with the effective date of this Section A8.526-2, if the percentage of increase or decrease in the cost of living in any calendar year, as determined to the nearest one percent by the retirement board, were to exceed two percent as compared with the cost of living in the next preceding calendar year, the percentage of increase or decrease in the cost of living in excess of two percent, shall be accumulated to provide increases or decreases in the cost of living in each succeeding calendar year.
(Added by Proposition B, 6/3/2008)
(a) Notwithstanding the provisions of Section A8.526-1 or any other provision of this Charter to the contrary, effective January 10, 2009, all supplemental cost of living benefits adjustments payable, including retirement allowances subject to change when the salary rate of a member is changed, shall be determined pursuant to the provisions of this Section A8.526-3 and not Section A8.526-1.
(b) (1) On July 1, 2009 and July 1 of each succeeding year, the retirement board shall determine whether, in the previous fiscal year, there were earnings in excess of the expected earnings on the actuarial value of the assets. In those years when the previous year's earnings exceeded the expected earnings on the actuarial value of the assets, then on July 1 each retirement allowance or death allowance payable on account of a member who died, including retirement allowances subject to change when the salary rate of a member is changed, shall be increased by an amount equal to three and one-half percent (3.5%) of the allowance as of June 30, less the amount of any cost of living adjustment provided pursuant to Section A8.526-2 and less the amount of any cost of living adjustment, payable in that fiscal year, which is the result of a change in the salary of the member.
(b) (2) If on July 1, 2009 and July 1 of each succeeding year, the previous fiscal year’s earnings exceeded the expected earnings on the actuarial value of the assets, but they were insufficient to increase said allowances by three and one-half percent (3.5%) as provided in Subsection (b)(1), then to the extent of excess earning, said allowances shall be increased in increments of one-half percent (0.5%) up to the maximum three and one-half percent (3.5%) of the allowance as of June 30, less the amount of any cost of living adjustment provided pursuant to Section A8.526-2 and less the amount of any cost of living adjustment, payable in that fiscal year, which is the result of a change in the salary of the member.
(c) When the previous fiscal year's earnings exceeded the expected earnings on the actuarial value of the assets but were not sufficient to fund any supplemental cost of living benefit adjustment pursuant to either Subsection (b)(1) or (b)(2), the Retirement Board shall reserve the excess earnings for that year. Said reserved earnings shall accumulate only until such time that said reserved earnings, plus the next year's earnings in excess of the expected earnings on the actuarial value of the assets, are sufficient to fund one fiscal year's increase in the supplemental cost of living benefit adjustment, at which time the earnings in reserve shall be withdrawn and used to fund a supplemental cost of living benefit adjustment as provided in either Subsection (b)(1) or (b)(2).
(d) Beginning on July 1, 2012 and July 1 of each succeeding year, no supplemental cost of living benefit adjustment shall be payable unless the Retirement System was also fully funded based on the market value of the assets for the previous year. Except as qualified in subsection (g), this subsection (d) shall apply only to employees and retirees hired on or after January 7, 2012.
(e) Any supplemental cost of living benefit adjustment, once paid to a member, shall not be reduced thereafter.
(f) Any Section or part of any Section in this Charter, insofar as it should conflict with the provisions of Section A8.526-3 or with any part thereof shall be superseded by the contents of Section A8.526-3. Section A8.526-3 shall be interpreted to be consistent with all federal and state laws, rules, and regulations. If any words, phrases, clauses, sentences, subsections, provisions or portions of Section A8.526-3 are held to be invalid or unconstitutional by a final judgment of a court, such decision shall not affect the validity of the remaining words, phrases, clauses, sentences, subsections, provisions or portions of Section A8.526-3. If any words, phrases, clauses, sentences, subsections, provisions or portions of Section A8.526-3 are held invalid as applied to any person, circumstance, employee or category of employee, such invalidity shall not affect any application of Section A8.526-3 which can be given effect. Section A8.526-3 shall be broadly construed to achieve its stated purposes.
(g) Effective January 1, 2023, subsection (d) shall not apply to any members who retired before November 6, 1996, or their qualified survivors and beneficiaries. But in any year that the Retirement System is not fully funded based on the market value of the assets for the previous year, the supplemental cost of living adjustment for these retirees, their qualified survivors, and beneficiaries shall be limited to $200 per month if their monthly gross pension allowance exceeds $4,167.
The Retirement System shall adjust the base retirement allowance of members who retired before November 6, 1996, or their qualified survivors and beneficiaries, to account for supplemental cost of living adjustments not received in 2013, 2014, 2017, 2018 and 2019, due to the full funding requirement in subsection (d). This aggregate base allowance adjustment shall not exceed $200 per month for those receiving a monthly gross pension allowance over $4,167. This subsection (g) does not entitle these retirees, their qualified survivors, or beneficiaries to any retroactive supplemental cost of living adjustment payments.
(Added by Proposition B, Approved 6/3/2008; amended by Proposition C, Approved 11/8/2011; Proposition A, Approved 11/8/2022)
(b) (1) On July 1, 2012 and July 1 of each succeeding year, the Retirement Board shall determine whether, in the previous fiscal year, there were earnings in excess of the expected earnings on the actuarial value of the assets. In those years when the previous year's earnings exceeded the expected earnings on the actuarial value of the assets, and the Retirement System was fully funded based on the market value of the assets, then on July 1, each retirement allowance payable or death allowance payable on account of a member who died, shall be increased by an amount equal to three and one-half percent (3.5%) of the allowance as of June 30, less the amount of any cost of living adjustment provided pursuant to Section A8.526-2, provided there were sufficient excess earnings to provide the benefits in this Section A8.526-4.
(b) (2) If on July 1, 2012 and July 1 of each succeeding year, the previous fiscal year's earnings exceeded the expected earnings on the actuarial value of the assets, but they were insufficient to increase said allowances by three and one-half percent (3.5%) as provided in Subsection (b)(1), then to the extent of excess earnings, said allowances shall be increased in increments of one-half percent (.5%) up to the maximum three and one-half percent (3.5%) of the allowance as of June 30, less the amount of any cost of living adjustment provided pursuant to Section A8.526-2.
(c) The supplemental cost of living benefit adjustment described above will not be paid in any fiscal year when there were insufficient earnings in excess of the expected earnings on the actuarial value of the assets. In that event, retirement allowances will revert to the level they would have been if supplemental cost of living benefit adjustments had never been made.
(Added by Proposition C, Approved 11/8/2011)
Subject to the vested rights rule, the Board of Supervisors is empowered to enact, by a vote of three- fourths of its members, ordinances to amend the provisions of the Retirement System to conform with the community property provisions of Civil Code Sections 4800 and 4800.8, provided that the Board of Supervisors shall first secure, through the retirement board, an actuarial report of the cost and effect of any such change and provided further that any such ordinances shall not increase overall Retirement System benefits costs.
Every retirement allowance payable by the San Francisco City and County Employees' Retirement System, for time commencing on January 1, 1950, to or on account of any person who was retired prior to July 1, 1947, as a member of said system under Section 8.507, is hereby increased by the amount of $25 per month, provided such member was entitled to be credited under the Retirement System with at least 20 years of service upon which the retirement allowance was determined at retirement. If the member was entitled to be credited with less than 20 years of such service, then said monthly increase shall be an amount which shall bear the same ratio to $25 that the service with which the member was entitled to be credited at effective date of retirement, bears to 20 years. This section does not give any member retired prior to January 1, 1950 or his successors in interest, any claim against the City and County for any increase in any retirement allowance paid or payable for any time prior to January 1, 1950. If a member elected at retirement to have his retirement allowance modified under Options 2 or 3, provided by ordinance, and if his beneficiary is living on January 1, 1950, the increase in his allowance shall be modified under the option elected at retirement, and on the basis of current ages, mortality tables and interest rate. If the beneficiary of such a person who elected at retirement to have his allowance modified under one of said options, is not living on January 1, 1950, or if the retired member is not living on January 1, 1950, and the beneficiary is receiving the modified retirement allowance, then the allowance shall be increased as provided herein for persons who did not elect an option.
The increase in the retirement allowance shall be apportioned between service rendered prior to the entry of the member into the Retirement System and service rendered as a member, in the same proportion that such prior and current service respectively, bears to the total service credited at retirement. Contributions to the Retirement System, necessary for the payment of the increases in the retirement allowances provided in this section, shall be provided, with respect to the portion of the benefit based on service rendered as members, from the reserves held by the Retirement System on account of miscellaneous members, the necessary amount being transferred upon January 1, 1950, from said reserves to the reserves held by the Retirement System to meet the obligations, on account of benefits that have been granted and on account of prior service of members. The contribution being required of the City currently, as percentages of salaries of persons who are members under Section 8.509, shall be increased to percentages determined by the actuary as necessary to replace the reserves so transferred. Contributions to the Retirement System, necessary for the payment of said increases with reference to prior service, shall be paid to the system by the City and County by annual appropriations, provided that such appropriation for any year shall not be less than the amount disbursed during that year on account of said increases.
Every retirement allowance payable by the San Francisco City and County Employees' Retirement System, for time commencing on February 1, 1953, to or on account of any person who was retired prior to July 1, 1947, as a member of said system under Section 165 of the Charter of 1932, as amended, is hereby increased by the amount of $25 per month, provided such member was entitled to be credited under the Retirement System with at least 20 years of service upon which the retirement allowance was determined at retirement. If the member was entitled to be credited with less than 20 years of such service, then said monthly increase shall be an amount which shall bear the same ratio to $25 that the service with which the member was entitled to be credited at effective date of retirement, bears to 20 years. This section does not give any member retired prior to February 1, 1953, or his successors in interest, any claim against the City and County for any increase in any retirement allowance paid or payable for time prior to February 1, 1953. If a member elected at retirement to have his retirement allowance modified under Options 2 or 3, provided by ordinance, and if his beneficiary is living on February 1, 1953, the increase in his allowance shall be modified under the option elected at retirement, and on the basis of current ages, mortality tables and interest rate. If the beneficiary of such a person who elected at retirement to have his allowance modified under one of said options is not living on February 1, 1953, or if the retired member is not living on February 1, 1953, and the beneficiary is receiving the modified retirement allowance, then the allowance shall be increased as provided herein for persons who did not elect an option.
The increase in the retirement allowance shall be apportioned between service rendered prior to the entry of the member into the Retirement System and service rendered as a member, in the same proportion that such prior and current service respectively, bears to the total service credited at retirement. Contributions to the Retirement System necessary for the payment of the increase in the retirement allowances provided in this section, shall be provided, with respect to the portion of the benefit based on service rendered as members, from the reserves held by the Retirement System on account of miscellaneous members, the necessary amount being transferred upon February 1, 1953, from said reserves to the reserves held by the Retirement System to meet the obligations on account of benefits that have been granted and on account of prior service of members. The contribution being required of the City currently, as percentages of salaries of persons who are members under Section 8.509, shall be increased to percentages determined by the actuary as necessary to replace the reserves so transferred. Contributions to the Retirement System necessary for the payment of said increases with reference to prior service, shall be paid to the system by the City and County by annual appropriations, provided that such appropriation for any year shall not be less than the amount disbursed during that year on account of said increases.
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