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Sec. 22-34(a). Fixed contribution rate. Each member hired prior to July 1, 2006, shall make mandatory member contributions to the system for every pay period during which the member receives compensation in an amount equal to five (5) percent of the member’s compensation. The finance director shall deduct this amount and credit it to the member’s accumulated contributions account.
Sec. 22-34(b). Variable Contribution Rates. Each member hired on or after July 1, 2006 shall make mandatory member contributions to the system for every pay period during which the member receives compensation in an amount equal to the applicable percentage of the Employee Segment Normal Cost. For purposes of this Section 22-34(b), the applicable percentage shall equal the percentage determined by the City on an annual basis prior to the beginning of each fiscal year, and which shall equal no less than fifty (50) percent and no more than one hundred (100) percent; provided that the member's annual contribution rate (1) shall in no event be less than five (5) percent of compensation and (2) shall be subject to an annual fiscal year adjustment (increase or decrease) equal to no more than two and one-half (2 1/2) percent of member compensation. The finance director shall deduct the applicable member contributions from each member's compensation and credit it to the member's accumulated contributions account. Notwithstanding the foregoing, effective for the period beginning on July 1, 2020 and ending on June 30, 2023, the variable contribution rate calculation provisions of this Section 22-34(b) are suspended and the Member Contribution Rates approved by the City for Tier I Members and Tier II Members for the period beginning on July 1, 2019 and ending on June 30, 2020 shall continue through June 30, 2023. The variable contribution rate calculation provisions of this Section are suspended temporarily in light of the coronavirus pandemic and the continuing economic consequences of the pandemic.
Sec. 22-34(c). Contribution rates for rehired members. If a member separates from employment with the city and is later re-hired, the rate of mandatory member contributions applicable to the rehired member shall be determined in accordance with this section. Any member who was originally hired by the city prior to July 1, 2006, who was a vested member at the time of separation from employment with the city and who does not request a refund of member contributions in accordance with section 22-41 prior to his date of reemployment with the city shall make mandatory member contributions to the system in accordance with section 22-34(a) above. All other rehired members shall make mandatory member contributions in accordance with section 22-34(b) above.
Sec. 22-34(d). Employer pick-up/member contributions. All member contributions to the system are mandatory and are picked up by the city in accordance with Code Section 414(h). As a result of the city’s pick-up arrangement, the member contributions are contributed to the system on a pre-tax basis and shall not be included in the member’s gross income until the member requests a refund of contributions or receives retirement benefit payments. All member contributions are deposited into the individual accumulated contributions account maintained by the system administrator on behalf of each contributing member.
Sec. 22-34(e). Qualified military service. A member who leaves employment for qualified military service and is timely reinstated by the city and meets all other applicable requirements for benefits following qualified military service including, without limitation, the requirements set forth in the city's Administrative Directive 2.01-7G regarding military leave, as amended, shall be permitted (but not required) to make up missed member contributions to the system. Any reinstated member who wishes to make up missed member contributions shall contribute all or a portion of the member contributions that would have been made by the member but for the qualified military service, calculated at the compensation rate in effect for the member immediately preceding the commencement of the qualified military service and the member contribution rate in effect during the qualified military service, and without interest or any other adjustment. The missed member contributions shall be contributed to the system during a period that begins on the date of reinstatement and ends on the earliest of (1) the date that is five (5) years from the date of reinstatement; (2) the date that marks the end of a period which is three (3) times the length of the member's most recent period of qualified military service; or (3) the member's termination date. Any and all member contributions made up pursuant to this section shall be treated as regular member contributions made in accordance with section 22-34(d). Following the contribution of missed member contributions to the system, the system administrator shall take all steps necessary to increase the member's accrued benefit to include the portion of the member's qualified military service covered by the missed member contributions. Notwithstanding the foregoing, to the extent the member is paid his full city salary during military leave in accordance with Section IV of the city's Administrative Directive 2.01-7G, as amended (Paid Military Leave Not to Exceed 30 Calendar Days in any Two (2) Consecutive Federal Fiscal Years), member contributions shall be deducted from the member's military leave pay on the same basis as member contributions would be made by the member under section 22-34 if the member was actively employed.
Sec. 22-34(f). Accrued vacation cash out. Except as set forth below, all hours of accumulated vacation earned by a tier I member and cashed out by the city as of the member’s termination date shall be included in a member’s compensation for member contribution purposes, provided that member contributions are made in accordance with this section. The member contributions applicable to accumulated vacation shall be calculated using the tier I member’s compensation and member contribution rate as in effect immediately preceding the tier I member’s termination date. The calculation and collection of member contributions under this section shall trigger the city’s obligation to make corresponding employer contributions under section 22-35(a) for the accumulated vacation hours. Vacation leave earned by a tier I member pursuant to the city's vacation leave carryover program ("VLCP") is not subject to the compensation and member contribution rules set forth in the first sentence of this section. Vacation leave earned pursuant to the VLCP and cashed out by the city shall not be included in a member's compensation under any circumstances.
Sec. 22-34(g). Non-forfeiture and refund of contributions. It is the right of each member to request a refund of the member’s accumulated contributions, plus interest, upon separation from city service and the right of each beneficiary to be paid the member’s accumulated contributions, plus interest, upon the member’s death before retirement or unused contributions, plus interest, upon the member’s death after retirement, whichever is applicable. All refunds, and the related forfeiture of credited service, shall be administered in accordance with section 22-41.
Sec. 22-34(h). Employment status changes. Effective July 1, 2011 and notwithstanding any provision of the Code to the contrary, the mandatory member contribution rate for an employee who first becomes a member in the system after the employee's date of hire or rehire with the city will be determined pursuant to this section. If an employee is hired or rehired by the city in an employment position that does not qualify for membership in the system and later becomes a member, the applicable member contribution rate shall be determined as of the date on which the employee first satisfies the requirements for membership under section 22-33, as opposed to the employee's date of hire or rehire. The member contribution rate for a reemployed member shall be determined in accordance with section 22-34(c).
(Ord. No. 10657, § 2, 4-28-09, eff. 7-1-09; Ord. No. 10915, § 3, 6-21-11, eff. 7-1-11; Ord. No. 11062, § 3, 3-27-13, eff. 7-1-13; Ord. No. 11243, § 1, 2-18-15, eff. 7-1-15; Ord. No. 11327, §§ 4, 5, 12-8-15, eff. 1-1-16; Ord. No. 11349, § 1, 4-5-16, eff. 7-1-16; Ord. No. 11430, § 1, 1-24-17, eff. 7-1-17; Ord. No. 11529, 2-21-18, eff. 7-1-18; Ord. No. 11752, § 1, 5-19-20, eff. 7-1-20; Ord. No. 11795, § 1, 10-20-20; Ord. No. 11837, § 1, 6-8-21, eff. 7-1-21; Ord. No. 11927, § 1, 5-3-22, eff. 7-1-22)
Sec. 22-35(a). Contribution by the city. At the end of each payroll period, the finance director shall cause the city to contribute to the trust fund an amount equal to the employer contribution for the particular payroll period, plus any and all member contributions picked up by the city in accordance with section 22-34(d) and section 22-36(g)(2).
Sec. 22-35(b). Certification of rates and charges. The board shall certify to the city manager, on a fiscal year basis, the annual required contribution, the member contribution rate and the employer contribution for the system.
Sec. 22-35(c). City's funding requirement for system. The city council shall appropriate no less than one hundred (100) percent of the employer contribution for a particular fiscal year.
Sec. 22-35(d). Determination and deposit of employer contributions. The finance director at the end of each pay period shall apply the appropriate employer contribution and member contribution rates to the total compensation of members for such period and shall transfer this amount to the trust fund.
(Ord. No. 10657, § 2, 4-28-09, eff. 7-1-09)
Sec. 22-36(a). Credited service generally. A member will receive credited service for purposes of determining the benefits to which the member or the member's beneficiary(ies) will be entitled. Credited service is the total of the member's accrued service and additional service. Accrued service shall be used to determine whether a member is vested, as well as to determine the member's accrued benefit. Additional service shall be considered for benefit accrual purposes only.
Sec. 22-36(b). Accrued service for city employment.
(1) Employment periods. A member shall earn 1/2080 of one (1) year of accrued service credit for each hour of regular time compensation, including authorized periods of absence for which the member receives compensation. A member who is compensated for two thousand eighty (2,080) or more hours of regular time during twelve (12) consecutive calendar months shall receive one (1) year of accrued service. A member who is compensated on less than a full-time basis shall receive credit for a proportionate part of a full year of accrued service.
(2) Periods of leave. With regard to tier I members, all periods of leave with pay, accrued and unused vacation and sick leave at the date of retirement, workers compensation and qualified military service shall be used in calculating a member's total accrued service. The accrued service of a tier I member also shall include accumulated vacation cashed out by the city; provided, however, that the member makes member contributions on the value of the vacation leave that is cashed out by the city as set forth in section 22-34(f). Notwithstanding the foregoing, vacation leave earned by a tier I member pursuant to the city's vacation leave carryover program and cashed out by the city shall not be included in the calculation of a member's accrued service under any circumstances. With regard to tier II members, all periods of leave with pay, workers compensation and qualified military service shall be used in calculating a member's total accrued service, but all accrued and unused vacation and sick leave at the date of retirement and all accumulated vacation that is cashed out by the city shall be excluded. Special rules regarding qualified military service are set forth in subparagraph three (3) below.
(3) Military leave during active employment. An active city employee who leaves employment to complete qualified military service, makes a timely return to the city following an honorable discharge (as defined below), and who makes up missed member contributions in accordance with section 22-43(e) may receive accrued service for periods of qualified military service. Accrued service credited to a member who satisfies the conditions of this section and section 22-43(e) shall not exceed sixty (60) months of accrued service for qualified military service, plus accrued service for reasonable periods of absence from employment which are necessitated by the qualified military service, except as provided by applicable federal law. The member's return to city service shall be deemed to be timely if the member is reinstated or requests reinstatement in accordance with the following time frames: (A) The first full regularly scheduled work period on the first full calendar day following completion of the qualified military service for periods of qualified military service of less than thirty-one (31) days; (B) not later than fourteen (14) days after completing qualified military service for periods of qualified military service of at least thirty (30) days and not more than one hundred eighty (180) days; or (C) not later than ninety (90) days after completing qualified military service for periods of qualified military service of more than one hundred eighty (180) days. If the member is hospitalized for, or convalescing from, an illness or injury incurred in, or aggravated during, the performance of qualified military service, the member's return to city service shall be deemed to be timely if the member returns as of the earlier of the end of the period of recovery or the date which is two (2) years after the completion of qualified military service. Notwithstanding the foregoing, an active city employee who leaves employment for military leave in accordance with Section IV of the city's Administrative Directive 2.01-7G, as amended (Paid Military Leave Not to Exceed 30 Calendar Days in any Two (2) Consecutive Federal Fiscal Years) shall be credited with accrued service for the period of military leave during which member contributions are made, regardless of the employee's subsequent return or failure to return to employment.
(4) Furlough. An active city employee who is subject to a city mandated furlough during the period beginning on July 1, 2009, and ending on June 30, 2010, shall be credited with accrued service for the furlough period(s), up to a maximum of seventy-two (72) hours of accrued service credit. This shall include reductions in pay which correlate with furlough hours.
Sec. 22-36(c). Transfers from other Arizona Systems.
(1) ASRS. A contributing member who has service credits in the Arizona State Retirement System may have such retirement service credits transferred to the system in accordance with Arizona Revised Statute Sections 38-730, as amended. In no event shall any transfer of service credit processed in accordance with this section create a significant detriment to the funded status of the system. Any service credit transferred pursuant to this section shall be accrued service hereunder.
(2) Other systems. A contributing member who has service credits in a public retirement system maintained by the State of Arizona (other than ASRS) or any municipality of the State of Arizona may have such retirement service credits transferred to the system in accordance with Arizona Revised Statute Sections 38-923 and 38-924, as amended. In no event shall any transfer of service credit processed in accordance with this section cause the system to incur any unfunded accrued liabilities as a result of the transfer. Any service credit transferred pursuant to this section shall be additional service hereunder.
Sec. 22-36(d). Additional service--Unpaid authorized leave from city employment. A member who has not requested a refund from the system in accordance with section 22-41 may purchase up to one (1) year of additional service for any period of unpaid authorized leave from city employment (excluding furloughs). To purchase such additional service, a member shall pay to the system the contribution cost associated with the leave period, determined based on the compensation imputed in accordance with section 22-43(c) and the member and employer contribution rates in effect during the leave period. Any election to purchase additional service pursuant to this section must be completed within six (6) months of the termination of the leave period. A member may pay the costs associated with a purchase of additional service under this section by any method described in section 22-36(g) below.
Sec. 22-36(e). Additional service – Prior government or military service. Subject to the provisions of section 22-36(g), a member who has not requested a refund of the member's accumulated contribution account or filed a retirement application may elect to purchase additional service in the system for periods of prior government or military service. Additional service will be used for benefit accrual purposes only, and will not be considered in the determination of whether a member is vested. Any member wishing to purchase additional service shall furnish all documentation required by the system administrator, in its discretion, to substantiate the prior service at the time of making an application to purchase the additional service. This provision shall govern the repurchase of prior city service credit forfeited upon receipt of a refund pursuant to section 22-41, subject to the special redeposit rules of section 22-36(h). It is the stated and declared purpose of this section to allow for the purchase of all prior government or military service for which a member is not entitled to receive, presently or in the future, a benefit from another retirement system. To this end, the provisions of this section shall be liberally construed.
Sec. 22-36(f). Additional service – Nonqualified permissive service credit. Subject to the provisions of section 22-36(g), any vested member who is actively contributing to the system may purchase additional service for nonqualified service in accordance with Code Section 415(n)(3). Effective January 1, 2011, the purchase of nonqualified permissive service shall be limited to a total of five (5) years, regardless of the member's payment method and notwithstanding the special rules set forth in Code Section 415(n) regarding direct rollovers and transfers from Code Section 403(b) and 457 plans. For purposes of the foregoing five (5) year limitation on permissive service purchases, additional service purchased by a member prior to January 1, 2011, shall be taken into account.
(1) Cost to purchase. Purchases of additional service are designed and administered in a manner intended to prevent the system from incurring any unfunded accrued liability as a result of the purchase. The cost for each year of additional service purchased shall equal a percentage of the member's highest annual salary, as determined in accordance with a purchase of service credit table designed by the system's actuary and approved by the board. An administrative fee as determined by the board shall be imposed for the processing of purchase of service requests. The date of purchase shall be the day the member delivers to the system administrator an executed irrevocable purchase of service agreement.
(2) Payment for time purchased. A member may fund the purchase of additional service with one or a combination of the following payment methods: (A) payment of after-tax cash lump sum; (B) tax-deferred rollover contribution from a tax-qualified retirement plan or individual retirement account(s) as authorized by the Code; (C) after-tax payroll deduction agreement; or (D) irrevocable pre-tax payroll deduction agreement designed to comply with the employer pick-up arrangement requirements of Code Section 414(h)
Sec. 22-36(h). Reentry into service. A former member who reenters service shall become a member of the system in accordance with section 22-33(e). If the member's accumulated contributions account has not been refunded and his accrued benefit has not been transferred in accordance with section 22-41, credited service shall be given for all prior accrued and additional service. A former member who reenters service within twenty-four (24) months and who received a refund of his accumulated contributions account pursuant to section 22-41 shall, upon redeposit of the amount withdrawn plus applicable interest, as determined by the system administrator, be credited with all prior credited service. Any redeposit made in accordance with this provision must be completed within six (6) months of the former member's reentry into service.
(Ord. No. 10657, § 2, 4-28-09, eff. 7-1-09; Ord. No. 10696, § 2, 8-5-09, eff. 7-1-09; Ord. No. 10775, § 1, 4-6-10; Ord. No. 10915, § 4, 6-21-11, eff. 7-1-11; Ord. No. 11327, §§ 6, 7, 12-8-15, eff. 1-1-16; Ord. No. 11795, § 2, 10-20-20)
Editor's note – Section 8 of Ord. No. 10915, adopted June 21, 2011, provides that the amendments made to Sec. 22-36(f) are effective retroactively to July 1, 2009.
Sec. 22-37(a). Retirements generally.
(1) Types of service retirements. Subject to the minimum requirements set forth in paragraph (a)(2) below, there are three (3) types of service retirements available under the system:
(A) Normal retirement. Members are eligible to receive a normal retirement benefit upon attainment of the applicable (A) retirement points rule or (B) normal retirement age.
(B) Early retirement. Tier I members are eligible to receive an early retirement benefit after completing twenty (20) years of credited service and attaining age fifty-five (55). Tier II members are eligible to receive an early retirement benefit after completing twenty (20) years of credited service and attaining age sixty (60).
(C) Deferred retirement. Vested members who experience a termination date before reaching normal or early retirement eligibility are eligible for deferred retirement and the member's accrued benefit is paid when the member later becomes eligible for normal or early retirement.
(2) Minimum requirements. In addition to the standard eligibility conditions set forth above, all members hired on or after July 1, 2009, must complete at least five (5) years of accrued service before reaching normal or early retirement eligibility under section 22-37(a)(1)(A) or (1)(B) above.
Sec. 22-37(b). Early retirement. The early retirement pension shall be calculated in the same manner as the normal retirement benefit and shall be reduced in accordance with this paragraph to reflect the earlier and longer benefit payment period. The early retirement reduction shall equal one-half of one (0.5) percent for each month prior to the date the member would have attained the applicable retirement points rule (rule of 80 or rule of 85). For purposes of this section, the date the member would have attained the applicable retirement points rule shall be determined based on the assumption that the member will earn additional age related points but will not earn additional points for years of credited service.
Sec. 22-37(c). Deferred retirement. As of a termination date, a vested member shall be deemed to have elected a deferred retirement calculated in the same manner as the normal retirement benefit or the early retirement benefit and payable upon the member's satisfaction of the conditions for normal or early retirement, as set forth in paragraph (a) above. A member who is in deferred retirement status and who has not reentered city service may request a refund of his accumulated contributions account any time before the payment of retirement benefits commence.
Sec. 22-37(d). Payment of benefits; deferred commencement. Retirement benefits are paid monthly in arrears. Generally, a member may delay the date payments begin as permitted by law provided; however, that no actuarial adjustment or retroactive adjustment shall be made to the retirement benefit as a result of the delayed commencement. Notwithstanding the foregoing, if a member delays commencement of retirement benefits beyond normal retirement age, by affirmative election or failure to file a retirement application, an actuarial adjustment to the retirement benefit shall be made to reflect only the delayed commencement after the normal retirement age.
Sec. 22-37(e). Retirement application; withdrawal of retirement application. A member may submit an application for retirement benefits within ninety (90) days of the member's proposed termination date or, if applicable, the member's proposed end of service participation date, subject to the system administrator's discretion to make nondiscriminatory timing exceptions as necessary. Except as required by law, no retirement benefits shall commence under the system until a member files a retirement application with the system administrator and the retirement application is ratified by the board. The board's ratification of any retirement benefit application may be based on a reasonable estimate of the member's retirement benefit, as prepared by the system administrator. In the event that a member's actual retirement benefit varies significantly from an estimate presented to the board for ratification, the system administrator shall present the actual retirement benefit calculation to the board for its reconsideration as soon as administratively feasible. Any application for an early, normal, deferred or disability retirement may be withdrawn at any time prior to ratification by the board.
Sec. 22-37(f). Post retirement benefit payments. The board shall determine, pursuant to its formal policy and in its discretion, whether the system shall fund an annual supplemental post retirement benefit payment to retired members and beneficiaries. The board's formal policy shall include the methods and procedures to be followed by the board in making its annual determination. The policy shall include the requirements that allocations to a post retirement benefits reserve shall not occur in years where any of the following conditions occur: the actuarial target funded ratio for that year is not achieved, there are no excess returns (based on the rolling average), or the allocation to a post retirement benefits reserve would directly cause an increase in the annual required contribution for that year.
Sec. 22-37(g) Suspension of pension benefits upon reemployment. Retirement benefits payable to a retired member shall be suspended during the retired member's period of reemployment with the city unless (1) at least twelve (12) months have elapsed between the member's retirement from the city and the retired member's reemployment date; and (2) the retired member is engaged to work in a non-permanent employment classification. The retired member shall be permitted to work in consecutive or successive non-permanent employment classifications without triggering a suspension of retirement benefits provided that (A) the member satisfied the twelve (12) month break rule set forth above; (B) the non-permanent employment classifications are separate and distinct employment positions; and (C) the retired member's period of continuous reemployment does not exceed eighteen (18) months. In no event shall any re-employed retired member acquire credited service or credited compensation or contribute to the system.
(Ord. No. 10657, § 2, 4-28-09, eff. 7-1-09; Ord. No. 10915, § 5, 6-21-11, eff. 7-1-11; Ord. No. 11327, §§ 8, 9, 12-8-15, eff. 1-1-16; Ord. No. 11515, § 1, 12-19-17; Ord. No. 11595, §§ 3, 4, 10-23-18)
Sec. 22-38(a). Purpose. The end of service program allows retirement eligible members to earn lump sum benefits in addition to the members' retirement benefit, in exchange for a waiver of up to twelve (12) months of additional benefit accruals under the system. The end of service program is entirely voluntary.
Sec. 22-38(b). Eligibility for end of service program. Any member eligible for normal retirement may elect to participate in the end of service program by entering into a participation agreement in accordance with section 22-38(c) and accepting the terms and conditions of the end of service program. Participation in the end of service program shall remain open only until December 31, 2010, and no members shall be permitted to enroll in the end of service program after that date.
Sec. 22-38(c). Irrevocable agreement to participate. A member's agreement to participate in the end of service program is (1) a voluntary agreement to forego benefit accruals under the retirement provisions of the system, (2) a voluntary election to terminate from employment with the city before or upon completion of the end of service program participation period and (3) a retirement application for purposes of section 22-37(e). The member's participation election shall be evidenced by the member's execution of the board's end of service program agreement and shall include the member's proposed effective date of participation. The member's effective date of participation in the end of service program shall be the later of the first day of the month following the board's ratification of the member's end of service participation agreement or the participation date selected by the member and approved by the system administrator. The system administrator may, in its discretion, adopt reasonable and uniform procedures governing the deadlines for submission of end of service participation agreements and the acceleration of end of service participation dates. A member's agreement to participate in the end of service program shall be irrevocable upon ratification by the board.
Sec. 22-38(d). Cessation of benefit accrual. On the date the member begins to participate in the end of service program, mandatory member contributions to the system cease and all benefit accruals under the system terminate. A member's final average monthly compensation and credited service are determined as of the member's end of service participation date and shall not increase or decrease thereafter. The member also is not entitled to receive any retirement benefit increases implemented during the end of service participation period.
Sec. 22-38(e). Accumulation of end of service benefits. End of service program benefits will be credited to an end of service program account established under the system and shall be paid to the member following the member's termination date at the same time and in the same manner as otherwise prescribed in this article. A member's end of service program participation account shall be credited with the following:
(1) An amount, credited monthly, that is computed in the same manner as a normal retirement benefit using the member's credited service, average final monthly compensation and retirement benefit payment elections as of the member's effective date of end of service program participation.
(2) An amount, credited monthly, that represents assumed earnings at a rate determined by the board, annually at the beginning of the plan year. As of the effective date of the end of service program, the earnings rate credited pursuant to this section is the ninety-day treasury bill rate.
Sec. 22-38(f). Termination of end of service program participation. Participation in the end of service program terminates on the first occurrence of either of the following: (1) twelve (12) months from the date of entry; or (2) the member's termination date. If a member's participation in the end of service program is terminated as a result of the city's just cause termination of the member's employment and such just cause is later reversed, a member's participation in the end of service program, minus any benefits previously distributed pursuant to this article, shall be reinstated for the duration of the original end of service program participation period designated by the member on the appropriate end of service program participation form. Upon termination of the member's end of service program participation, the retirement benefit payable to any member who fails to terminate in connection with the end of service program shall commence in accordance with the retirement provisions of this article. Notwithstanding the foregoing, if a member fails to terminate from employment with the city at the end of the member's end of service program participation period, the member shall forfeit all rights to any end of service benefits and assumed earnings and shall not accrue any additional credited service during the end of service participation period.
Sec. 22-38(g) Payment of end of service program benefits. Following termination of the member's participation, a member is entitled to receive a lump sum distribution of all amounts credited to the member's end of service program participation account. The end of service program distribution shall be processed in accordance with section 22-43(g). The member also shall commence receipt of retirement benefits, calculated and paid in accordance with the retirement provisions of the system. If a member dies during the end of service program participation period, all amounts in the member's end of service program participation account shall be paid to the member's beneficiary. If the beneficiary(ies) predecease the member, all distributions pursuant to the end of service program shall be paid to the member's spouse, if the member was married at death, or to the legal representative of the member's estate, if the member is not married at death.
(Ord. No. 10657, § 2, 4-28-09, eff. 7-1-09)
Sec. 22-39(a). Qualification. If a member is not yet eligible for normal retirement, the member may apply for disability retirement benefits. To be eligible to receive disability retirement benefits, the member must (1) apply for disability retirement benefits within twelve (12) months of the date of termination from employment; (2) be credited with ten (10) or more years of accrued service, inclusive of accrued vacation and sick leave; (3) establish that he or she terminated from employment with the city as a result of disabling mental or physical impairment; and (4) be determined, in accordance with applicable rules, to have a total and permanent disability.
Sec. 22-39(b). Application process. An application for disability retirement benefits may be filed by the member in accordance with the policies and procedures of the system administrator. Unless waived by the board in light of a Social Security Administration determination of total and permanent disability, the board's physician shall examine the member and certify in a written report to the board whether the member suffers from a total and permanent disability. The report shall also state when the member should be reexamined. If the board determines that the member should receive disability retirement benefits, the disability retirement benefits shall commence as of the date determined by the board in its discretion. Disability retirement benefits shall not be paid for periods the member elects to receive sick and vacation leave pay.
Sec. 22-39(c). Disability benefit. Disability retirement benefits are calculated in the same manner as normal retirement benefits, with no reduction for early commencement.
Sec. 22-39(d). Termination of disability benefit. A disability retirement benefit shall be terminated by the board upon a determination that the member no longer suffers from a total and permanent disability or upon the member’s reemployment with the city. If the member reenters city service, any credited service included in the calculation of the disability retirement benefit shall be restored to the member’s credit; but the member’s accrued benefit shall be subject to an actuarial reduction at the time of retirement based on the number of months that the member received disability retirement benefits. The excess, if any, of the member’s accumulated contributions as of the date of total and permanent disability over the aggregate of the disability retirement benefits received by the member shall be credited to the member’s accumulated contributions account.
Sec. 22-39(e). Requirements to maintain disability benefit. The member shall provide to the system administrator no later than May 31 of each calendar year all information requested by the system administrator regarding the member’s total and permanent disability. The board may suspend disability retirement benefits if the member fails to provide any of the required information. Following the retirement of a member as the result of a total and permanent disability, the board may require the member, prior to the member’s eligibility for normal retirement and no more frequently than annually, to undergo a medical examination by a licensed physician, as directed by the system administrator. Should the member refuse, the member’s disability retirement benefit shall be discontinued until such time as they submit to the required examination. Should the refusal continue for one (1) year, all rights to any further disability retirement benefits shall cease. Upon the member attaining the age required for a normal retirement, no further medical exams will be required.
Sec. 22-39(f). Prior requirements to maintain disability benefit. Any member who qualified for a disability retirement prior to July 1, 2009, is subject to the benefit limitations and disability verification requirements of this subsection, as well as the nondiscriminatory policies and procedures of the system administrator.
(1) Disability verification requirements. Not later than May 31 of each calendar year, the member shall provide to the system administrator all information requested by the system administrator regarding the member’s earned income (wages and self-employment income) for the previous calendar year. The board may suspend disability retirement benefits if the member fails to provide any of the required information. Following the disability retirement of a member, the board may require the member to undergo a medical examination by a licensed physician. Should the member refuse, the disability retirement benefit shall be discontinued until such time as the member submits to the required examination. Should the refusal continue for one (1) year, all rights to any further disability retirement benefits shall cease. Upon the member’s attainment of the age required for receipt of a normal retirement benefit, no further medical exams or information relating to earned income will be required.
(2) Disability benefit adjustments.
(A) Earned income based adjustment. Based on the verification procedures described above, the disability retirement benefit may be subject to annual adjustment in accordance with this section. If the member’s earned income for the preceding calendar year exceeded fifty (50) percent of the member’s adjusted income base for that calendar year, then the member’s disability retirement benefit will be reduced during the twelve-month period commencing on the effective date of the system administrator’s adjustment (the “adjustment period”) as follows. The monthly disability retirement benefit payable in the adjustment period will be reduced by one-twelfth (1/12) of the excess of the member’s earned income for the preceding calendar year over fifty (50) percent of the member’s adjusted income base. If the adjustment required by the preceding sentence would reduce the monthly disability retirement benefit to a negative amount, the disability retirement benefit shall be suspended for the adjustment period and any excess amount not offset by the disability retirement benefit suspension shall be taken into account in the next annual adjustment procedure. From time to time, the board also may increase or decrease the member’s disability retirement benefit to recapture overpayments or to restore any deficiencies in payments to the member which may have accrued prior to the board’s receipt of information under the disability verification procedures. When a member becomes eligible for a normal retirement benefit, no further adjustments shall be made.
(B) Earned income and/or worker’s compensation benefits. In the event a disabled member receives earned income and/or worker’s compensation benefits during the calendar year, that member’s disability retirement benefit may be adjusted so that the member’s total income received from employer provided benefits does not exceed 100% of the members’ adjusted income base. Any adjustment made shall only be up to the amount of the full disability retirement benefit paid by TSRS. For purposes of this paragraph, employer provided benefits means social security benefits, worker’s compensation payments, TSRS pension benefits or long term disability payments.
(Ord. No. 10657, § 2, 4-28-09, eff. 7-1-09; Ord. No. 10696, § 3, 8-5-09, eff. 7-1-09; Ord. No. 10775, § 2, 4-6-10, eff. 7-1-10; Ord. No. 11327, §§ 10, 11, 12-8-15, eff. 1-1-16)
Sec. 22-40(a). Generally.
(1) If the member dies prior to the board's ratification of the member's application for retirement benefits, if any, the death benefit or survivor annuity payable as the result of the member's death shall be determined in accordance with this section. If the member dies after the board has ratified the member's application for retirement benefits, including an end of service participation agreement, any survivor benefits payable as a result of the death of the member shall be determined in accordance with the member's retirement benefit payment election. Notwithstanding any other provision herein to the contrary, a member who satisfied the conditions for normal or early retirement and filed the appropriate paperwork with the system administrator to pre-select retirement benefits prior to July 1, 2009, shall be treated as a member whose application for retirement benefits has been ratified by the board for purposes of this paragraph.
(2) If a member dies while performing qualified military service on or after January 1, 2007, the member shall be treated as if he returned to employment with the city on the day before the date of death.
Sec. 22-40(b). Spouse as beneficiary. If the spouse is the member's beneficiary and the spouse dies before the death benefit is paid, the available death benefit shall be paid to the beneficiary of the spouse, and if none, then to the legal representative of the spouse's estate.
Sec. 22-40(c). Death before vested interest. Should a member with less than five (5) years of accrued service die, the member's accumulated contributions account balance, determined as of the member's date of death, shall be paid in a lump sum to the member's beneficiary. If the beneficiary(ies) predeceases the member, the member's accumulated contributions account balance shall be paid to the member's spouse, if the member was married at death, or to the legal representative of the member's estate, if the member is not married at death.
Sec. 22-40(d). Death after vested interest. If a member who is credited with five (5) or more years of accrued service dies before reaching normal or early retirement, a death benefit will be paid to the member's beneficiary(ies). If the beneficiary(ies) predeceases the member, the death benefit shall be paid to the member's spouse, if the member was married at death, or to the legal representative of the member's estate, if the member is not married at death.
Sec. 22-40(e). Death while eligible for retirement. If a vested member dies after attaining normal or early retirement eligibility (determined in accordance with sections 22-37(a)(1)(A) or (B), as applicable) but prior to the board's ratification of the member's application for retirement benefits, a death benefit or survivor annuity will be paid as follows:
(1) Default for spouse. If the member's spouse is the beneficiary (and except as set forth in paragraph (3) below), a survivor annuity will be paid to the spouse and will equal the benefit the spouse would have received if the member had retired on the day before death and had elected to receive a joint and 100% survivor annuity. In determining the amount of the survivor annuity, the retirement benefit payable on account of the member's presumed retirement shall be calculated in accordance with the early retirement reduction provisions of section 22-37(b), if applicable. The survivor annuity described in this paragraph is payable only to a spouse of a deceased member.
(2) Default for single non-spouse beneficiary. If the member has designated a single individual person other than a spouse as the beneficiary, a survivor annuity will be paid to the beneficiary and will equal the benefit the beneficiary would have received if the member had retired on the day before death and had elected to receive an annuity certain and for life with a period certain of one hundred eighty (180) months, commencing in the month following the date of the member's death and paid until the end of the period certain. If the beneficiary dies prior to the completion of the period certain, a one-time lump sum payment equal to the present value of the remaining period certain payments to the estate of the beneficiary. In determining the amount of the survivor annuity, the retirement benefit payable on account of the member's presumed retirement shall be calculated in accordance with the early retirement reduction provisions of section 22-37(b), if applicable.
(3) Default for multiple beneficiaries, trusts and estates. The survivor annuities described in paragraphs (1) and (2) above are payable only to a spouse or single person designated as a beneficiary. If the member has designated multiple beneficiaries, a death benefit will be paid to the multiple beneficiaries in accordance with the member's designation, regardless of whether the spouse is named as one of the multiple beneficiaries. If the member has designated a trust or an estate as a beneficiary, or an estate is the default beneficiary under the terms of section 22-33(f), the trust or estate shall be entitled to receive a death benefit only, and shall not receive a survivor annuity, regardless of whether the member's spouse is a beneficiary of the trust and regardless of whether the trust or estate has only one beneficiary.
(4) Death benefit election. A spouse or single beneficiary entitled to receive a survivor annuity under paragraph (1) and (2) above may elect, in his or her discretion, to waive the survivor annuity and receive a death benefit. To make the death benefit election, the spouse or beneficiary shall sign a statement acknowledging that the survivor annuity and death benefit options have been satisfactorily explained and shall make a written election to receive the death benefit, all in accordance with the policies and procedures of the system administrator.
Sec. 22-40(f). Refund guarantee. A member who elects a single life annuity pursuant to section 22-42(b) or a joint and survivor annuity pursuant to section 22-42(c) shall be guaranteed a refund if the named recipients on the selected annuity die before the monthly retirement benefits paid equal or exceed two (2) times the value of the member's accumulated contributions with interest at time of retirement. The amount of the refund shall equal two (2) times the value of the member's accumulated contributions account at the time of retirement, reduced by the retirement benefits paid to date (the "refund amount"). If the member elected a single life annuity and the member dies, or the member elected a joint and survivor annuity and both the member and the named survivor die, the member's beneficiary (or the member's estate, if the beneficiary is not then living) will receive the refund amount.
Sec. 22-40(g). Payment following death. Following the death of a member, the system administrator will notify the beneficiary(ies) or the surviving spouse, as applicable, regarding the right to receive a refund of member contributions, a death benefit or a survivor annuity. Any lump sum benefit available to a spouse or beneficiary(ies) under this article shall be paid in accordance with sections 22-43(f) and (g).
(Ord. No. 10657, § 2, 4-28-09, eff. 7-1-09; Ord. No. 10696, § 4, 8-5-09, eff. 7-1-09; Ord. No. 10711, § 3, 9-9-09, eff. 7-1-09; Ord. No. 10712, § 3, 9-9-09, eff. 7-1-09; Ord. No. 10915, § 6, 6-21-11, eff. 7-1-11; Ord. No. 11327, § 12, 12-8-15, eff. 1-1-16; Ord. No. 11595, § 5, 10-23-18)
Editor's note – Section 8 of Ord. No. 10915, adopted June 21, 2011, provides that the amendments made to Sec. 22-40(f) are effective retroactively to July 1, 2009.
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