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Sec. 22-41(a). Member's request for refund. A member may request a refund of the member's accumulated contribution account following the member's termination date by filing the appropriate refund application with the system administrator. If the member was dismissed from city service, the member's application for a refund shall not be approved and disbursed until the member's separation from employment with the city becomes final and is no longer subject to any administrative or judicial review.
Sec. 22-41(b). Refund to Non-Vested Member. Any Member who terminates from City service prior to becoming a Vested Member shall cease to be a Member and shall be eligible to request a refund of his Accumulated Contributions Account as set forth in Section 22-33(c). The System Administrator shall contact the former Member as soon as reasonably possible following the Termination Date and shall provide information regarding the available refund. In the event that the former Member's termination is subject to administrative or judicial review, no refund shall be processed until such termination is final and binding. In the event the former Member does not consent to receipt of the refund of the Member's Accumulated Contributions Account within a reasonable period following notification by the System Administrator and the Member's Accumulated Contributions Account balance is more than one thousand dollars ($1,000.00), but does not exceed five thousand dollars ($5,000.00), the System Administrator may transfer the Accumulated Contributions Account balance to an individual retirement account established for the benefit of the Member in accordance with Code Section 401(a)(31)(B). If the Member's Accumulated Contributions Account balance equals one thousand dollars ($1,000.00) or less and the Member fails to consent to receipt of the refund, the System Administrator may, in its discretion, issue a refund check to the Member without the Member's consent. If the Member's Accumulated Contributions Account balance equals five thousand dollars ($5,000.00) or more and the former Member fails to consent to receipt of the refund, the System Administrator shall hold the Accumulated Contributions Account in the System for a period of three (3) years from the Termination Date, at which time the System Administrator shall escheat the Accumulated Contributions Account to the State of Arizona. The amount escheated to the State of Arizona shall not include Interest credited to the Accumulated Contributions Account after the Termination Date.
Sec. 22-41(c). Beneficiary's request for refund. Upon the death of a member, a beneficiary may request a refund of the member's accumulated contributions account or a death benefit. The beneficiary's right to receive a refund or a death benefit shall be determined in accordance with the provisions of this chapter and such determination shall take into account any retirement benefit payments made to the member prior to death, if any.
Sec. 22-41(d). Transfer to other Arizona Systems. Following a member's termination date and prior to the member's retirement or request for a refund of the member's accumulated contribution account, the member may request a transfer of the member's vested accrued benefit and/or the member's accumulated contributions account to a public retirement system maintained by the State of Arizona or any municipality of the State of Arizona, to be processed in accordance with Arizona Revised Statute Sections 38-730, 38-923 and 38-924, as amended. A transfer from the system shall not cause the system to incur any unfunded accrued liability, except in the case of a transfer to the Arizona State Retirement System in accordance with the reciprocity rules in effect with regard to transfers between the system and ASRS and which shall not cause any significant detriment to the funded status of the system.
Sec. 22-41(e). Forfeiture of credited service and tier I status. Any refund or transfer of a member's accumulated contributions account or a transfer of member's accrued benefit shall trigger an immediate forfeiture of all credited service earned by the member. In the case of a vested member, a refund or transfer under this section 22-41 and the related forfeiture of credited service will result in the loss of the member's (or beneficiary's) retirement pension rights under the system. If a former member requests a refund of the member's accumulated contributions account or a transfer of the member's accrued benefit, the former member shall forfeit any and all rights to tier I member status and, if the former member is rehired by the city, may reenter the system only as a tier II member, subject to all applicable participation requirements.
(Ord. No. 10657, § 2, 4-28-09, eff. 7-1-09; Ord. No. 10915, § 7, 6-21-11, eff. 7-1-11; Ord. No. 11020, § 3, 9-11-12, eff. 7-1-09)
Sec. 22-42(a). Explanation of benefit options. A member who is eligible to receive a retirement benefit may request from the system administrator information regarding the retirement benefit payment options available. No pension is automatically payable hereunder, except as provided in section 22-40, death benefits, and all eligible members must make appropriate retirement elections under the system. The member and spouse, if any, shall sign a statement acknowledging that the retirement benefit payment options have been satisfactorily explained and shall make a written election of one (1) of the retirement benefit payment options. All elections shall be made in accordance with the policies and procedures of the system administrator, and any spousal consent shall be provided in accordance with section 22-33(f)(1). The benefit election can be revoked or changed by the member by filing a written notice of revocation or change with the system administrator, subject to any applicable spousal acknowledgement requirements, any time prior to ratification of the retirement benefit by the board. The benefit election is irrevocable upon board ratification of the member's application for retirement benefits.
Sec. 22-42(b). Single life annuity. A member eligible for retirement may elect to receive his retirement benefit payable in a single life annuity, ending with the monthly payment made in the month of the member’s death. The single life annuity shall be the normal form of benefit for purposes of calculating the retirement benefits under the system. Any election of an alternative annuity option under the system shall result in the payment of an annuity which is the actuarial equivalent of the single life annuity payable to the member.
Sec. 22-42(c). Joint and survivor annuity. A member eligible for retirement may elect to receive his retirement benefit payable in a joint and survivor annuity which provides payments to the member for the remainder of the member's life and then provides payments to the surviving beneficiary for the remainder of the beneficiary's life. In making this election, the monthly benefit to be paid to the surviving beneficiary following the death of the member may be one hundred percent (100%), seventy-five percent (75%) or fifty percent (50%) of the monthly benefit the member had been receiving. All payments will cease upon the death of the member or the beneficiary, whichever shall occur last. The member's designation of a beneficiary to receive any survivor benefit payable under a joint and survivor annuity shall be subject to the requirements of section 22-43(f) and Code section 401(a)(9), including the limitations on non-spouse beneficiaries, any joint and survivor annuity election shall be adjusted as necessary for compliance with the Code.
Sec. 22-42(d). Annuity certain and for life. A member eligible for retirement may elect to receive his retirement benefit payable in an annuity for a term certain and for life. This benefit allows a member to ensure payment of a benefit over the member’s lifetime, and in the event of the member’s death before the end of a “period certain,” continuing payment of the benefit until the end of the “period certain” to a surviving beneficiary or contingent beneficiary. A member may elect to receive a term certain annuity with a guaranteed payment period of sixty (60) months, one hundred twenty (120) months or one hundred eighty (180) months. For purposes of the annuity for a term certain and for life, the guaranteed payment period shall begin with the earlier of the first monthly benefit payment made to the member or the first monthly end of service program accrual, if applicable. Should the member live beyond the period certain elected, no survivor benefits shall be paid to the member’s beneficiary(ies). Should the member, the beneficiary and any contingent beneficiary die before the expiration of the term certain, the board shall make a one-time lump sum payment equal to the present value of remaining period certain payments to the estate of the person last receiving a benefit under the annuity.
Sec. 22-42(e). Failure to elect benefit option or commencement date. Failure to elect a benefit option will result in the member receiving a single life annuity, assuming the member survives until the pension commencement date. Failure to elect a date on which payment begins will result in payments made in accordance with the minimum required distribution provisions of section 22-43(e) and Code Section 401(a)(9). Notwithstanding the foregoing, the provisions of section 22-40 apply when a vested member dies while eligible for retirement and prior to the board’s ratification of the member’s application for retirement benefits.
(Ord. No. 10657, § 2, 4-28-09, eff. 7-1-09; Ord. No. 10711, § 4, 9-9-09, eff. 7-1-09; Ord. No. 10712, § 4, 9-9-09, eff. 7-1-09; Ord. No. 11327, §§ 13, 14, 12-8-15, eff. 1-1-16; Ord. No. 11595, § 6, 10-23-18)
Sec. 22-43(a). Payment of small accounts. If the accrued benefit of a member, including any refund of an accumulated contributions account, has a present value of five thousand dollars ($5,000.00) or less at the time the benefit becomes payable, a lump sum distribution shall be paid to the member within thirty (30) days following their benefit election and the satisfaction of any applicable spousal consent requirements.
Sec. 22-43(b). Special rules for members with part-time employment. When a member has earned accrued service during part-time employment or both full-time and part-time employment, the monthly retirement benefit, in the form of benefit elected, will be computed using the following special rules.
(1) Special rules for computing average final monthly compensation for a member who had part-time or both full-time and part-time employment. Average final monthly compensation shall be determined by:
(A) For periods of full-time hours worked, the average of the highest thirty-six (36) consecutive months of compensation of the last one hundred twenty (120) consecutive months of compensation divided by thirty-six (36), or if the member has less than thirty-six (36) consecutive months of compensation divided by the actual number of months of compensation.
(B) For periods of part-time hours worked, the average of the highest annualized thirty-six (36) consecutive months of compensation of the last one hundred twenty (120) consecutive months of compensation divided by thirty-six (36), or if the member has less than thirty-six (36) consecutive months of compensation divided by the actual number of months of compensation.
(2) Special rules for computing annualized months of compensation for a member who had a part-time or both full-time and part-time employment.
(A) Determine the actual compensation paid to an employee during a two thousand eighty-hour (2,080) period in any consecutive twelve-month calendar period.
(B) Divide the actual number of hours for which an employee was compensated by two thousand eighty (2,080).
(C) Divide the result obtained in "A" by the result obtained in "B."
Annualized monthly compensation shall be the result obtained under "C" divided by twelve (12).
Sec. 22-43(c). Special rule for members with authorized leave without pay. When a member has taken authorized leave without pay, including periods of qualified military service, the member's average final monthly compensation shall be computed by imputing compensation for the authorized leave period, at the compensation rate in effect for the member immediately preceding the commencement of the leave period. For the period beginning on July 1, 2009, and ending on June 30, 2010, furlough periods shall be considered periods of authorized leave without pay for purposes of this section 22-43(c).
Sec. 22-43(d). Limitation on compensation. In no event may the compensation of a member considered under this system exceed the limit set forth in Section 401(a)(17) of the Code, as adjusted for cost-of-living increases in accordance with Code Section 401(a)(17)(B). The cost-of-living adjustment in effect for a calendar year applies to any fiscal year period, not exceeding twelve (12) months, over which compensation is determined beginning in such calendar year.
Sec. 22-43(e). Maximum benefit allowable. Notwithstanding anything hereunder to the contrary, the annual benefit payable to a member in the form of a straight life annuity shall not exceed the annual dollar limitation in effect under Code Section 415(b), as adjusted in accordance with paragraph (1) below (the "annual dollar limitation"). For the 2009 Limitation Year, the annual dollar limitation is $195,000.00. If the benefit the member would otherwise accrue in a limitation year would produce an accrued benefit in excess of the annual dollar limitation, the benefit shall be limited (or the rate of accrual reduced) to a benefit that does not exceed the annual dollar limitation. For purposes of this section, the annual benefit shall not include the annual benefit attributable to either mandatory member contributions or rollover contributions.
(1) Cost of living adjustments. The annual dollar limitation shall be adjusted for each calendar year to take into account any cost-of-living increase adjustments for that calendar year allowable pursuant to applicable regulations or rulings of the United States Treasury Department under Section 415(d) of the Code. Any such adjustment shall be effective only as of the first day of the calendar year for which such adjustment is announced. Cost-of-living adjustments to the annual dollar limitation made after a member retires shall apply to that member, provided that in no event shall such cost-of-living adjusted amounts exceed the Code Section 401(a)(17) limitation on compensation for that member determined as of the member's termination of employment.
(2) Minimum benefits. Notwithstanding anything else in this section to the contrary, the benefit otherwise accrued or payable to a member under the system shall be deemed not to exceed the annual dollar limitation if:
(A) The benefits payable for a limitation year under any form of benefit with respect to such member do not exceed ten thousand dollars ($10,000.00) multiplied by a fraction: (i) the numerator of which is the member's number of years (or part thereof, but not less than one (1) year) of credited service (not to exceed ten (10)), and (ii) the denominator of which is ten (10); and
(B) The city has not at any time maintained a defined contribution system in which the member participated (for this purpose, mandatory employee contributions under a defined benefit system are not considered a separate defined contribution system).
(3) Service and participation reductions. If the member has less than ten (10) years of participation in the system, the annual dollar limitation shall be multiplied by a fraction: (1) the numerator of which is the number of years (or part thereof, but not less than one (1) year) of participation in the system, and (2) the denominator of which is ten (10).
(4) Early payment adjustments. The annual dollar limitation shall be adjusted if the member's benefit commencement date is before age sixty-two (62).
(A) Limitation Years Beginning on or after July 1, 2007. With regard to annuities commencing in Limitation Years beginning on or after July 1, 2007 and when the Member's benefit commencement date is before age 62, the Annual Dollar Limitation for the Member's benefit commencement date shall be the annual amount of a benefit payable in the form of a straight life annuity commencing at the Member's benefit commencement date that is the actuarial equivalent of the lesser of (i) the Annual Dollar Limitation (adjusted under Section 22-43(d)(3), if required) computed using a 5% interest rate and the applicable mortality table under Code Section 417(e)(3) and expressing the Member's age based on completed calendar months as of the benefit commencement date and (ii) the Annual Dollar Limitation (adjusted under Section 22-43(d)(3), if required) multiplied by the ratio of the annual amount of the immediately commencing straight life annuity under the System at the Member's benefit commencement date to the annual amount of the immediately commencing straight life annuity under the System at age 62.
(B) Limitation Years Beginning Before July 1, 2007. With regard to annuities commencing in Limitation Years beginning before July 1, 2007 and when the Member's benefit commencement date is before age 62, the annual amount of a benefit payable in the form of a straight life annuity commencing at the Member's benefit commencement date that is the actuarial equivalent of the Annual Dollar Limitation (adjusted under Section 22-43(d)(3), if required) computed using a 5% interest rate and the mortality table described in Rev. Rul. 2001-62.
(C) Notwithstanding the other requirements of this Section, no adjustment shall be made to the Annual Dollar Limitation to reflect the probability of a Member's death between the Member's benefit commencement date and age 62 if benefits are not forfeited upon the death of the Member prior to the benefit commencement date. To the extent benefits are forfeited upon death before the benefit commencement date, such an adjustment shall be made.
(5) Alternative benefit payment options. Except as provided below, if a benefit is payable in a form other than a straight life annuity, the benefit shall be adjusted to an actuarially equivalent straight life annuity that begins at the same time as such other form of benefit and is payable on the first day of each month, before applying the limitations of this section.
(A) (i) Limitation Years Beginning on or After July 1, 2007. With regard to annuities commencing in Limitation Years beginning on or after July 1, 2007, the actuarially equivalent straight life annuity is equal to the greater of:
(a) the annual amount of the straight life annuity (if any) payable to the Member under the System commencing at the same benefit commencement date as the Member's form of benefit; and
(b) the annual amount of the straight life annuity commencing at the same benefit commencement date that has the same actuarial present value as the Member's form of benefit, computed using a 5% interest rate assumption and the applicable mortality table under Code Section 417(e)(3).
(ii) Limitation Years Beginning Prior to July 1, 2007. With regard to annuities commencing in Limitation Years beginning prior to July 1, 2007, the actuarial equivalent straight life annuity is equal to the greater of:
(a) the annual amount of a straight life annuity (if any) payable to the Member under the System commencing at the same benefit commencement date as the Member's form of benefit; and
(b) the annual amount of the straight life annuity commencing at the same benefit commencement date that has the same actuarial present value as the Member's form of benefit, computed using a 5% interest rate assumption and the mortality table described in Rev. Rul. 2001-62.
(6) Definitions. For purposes of this section, the term "limitation year" shall mean the calendar year beginning on January 1 and ending on December 31. The term "applicable mortality table" shall mean the mortality table prescribed by the Internal Revenue Service based on the actual experience of pension plans and projected trends in such experience.
(7) Incorporation by reference. The additional requirements of Code Section 415(b) and the treasury regulations promulgated there under, as applicable to governmental plans maintained in accordance with Code Section 414(d), are hereby incorporated by reference.
(8) Late Payment Adjustments. The Annual Dollar Limitation shall be adjusted if the Member's benefit commencement date is after age 65.
(A) Limitation Years Beginning on or after July 1, 2007. With regard to annuities commencing in Limitation Years beginning on or after July 1, 2007 and when the Member's benefit commencement date is after age 65, the Annual Dollar Limitation for the Member's benefit commencement date shall be the annual amount of a benefit payable in the form of a straight life annuity commencing at the Member's benefit commencement date that is the actuarial equivalent of the Annual Dollar Limitation (adjusted under Section 22-43(e)(3), if required), computed with a 5% interest rate and the applicable mortality table under Code Section 417(e)(3) (and expressing the Member's age based on completed calendar months as of the benefit commencement date).
(B) Limitation Years Beginning Before July 1, 2007. With regard to annuities commencing in Limitation Years beginning before July 1, 2007 and when the Member's benefit commencement date is after age 65, the Annual Dollar Limitation shall be the amount calculated in accordance with (A) above, but without adjusting the Member's age based on completed calendar months as of the benefit commencement date.
(C) Notwithstanding the other requirements of this Section, no adjustment shall be made to the Annual Dollar Limitation to reflect the probability of a Member's death between age 65 and the Member's benefit commencement date if benefits are not forfeited upon the death of the Member prior to the benefit commencement date. To the extent benefits are forfeited upon death before the benefit commencement date, such an adjustment shall be made.
Sec. 22-43(f). Minimum required distributions. The board and the system administrator shall make reasonable and good faith efforts to comply with the requirements of the treasury regulations promulgated pursuant to Code Section 401(a)(9), notwithstanding any provision herein to the contrary. The obligations of the board and the system administrator shall be interpreted and construed in a manner consistent with the relief afforded to governmental plans under Section 823 of the Pension Protection Act of 2006 and the Treasury Department's proposed regulations promulgated pursuant thereto, at Treas. Reg. Sec. 1.401(a)(9)-1, Q&A-2(d). When processing distributions required by Code Section 401(a)(9), the system administrator shall make reasonable and good faith efforts to begin the payment of such distributions no later than the April 1 of the calendar year following the later of the calendar year in which the member attains the age of 70½ or the calendar year containing the member's termination date. Death benefit distributions also shall be processed in accordance with a reasonable and good faith interpretation of the requirements of Code Section 401(a)(9).
Sec. 22-43(g). Eligible rollover distributions. Notwithstanding anything herein to the contrary, the member or distributee may elect to have any portion of an eligible rollover distribution received from the system paid directly to an eligible retirement plan. An eligible rollover distribution shall be made pursuant to the requirements of Code Section 401(a)(31) and Code Section 402, and the applicable regulations promulgated there under, and in the manner prescribed by the board.
(1) Distributee. A "distributee" includes a member or former member. In addition, the member's or former member's surviving spouse and any alternate payee under a domestic relations order, are distributees with regard to the interest of the spouse or former spouse. A distributee also includes the member's non-spouse designated beneficiary. In the case of a non- spouse beneficiary, the direct rollover may be made only to an individual retirement account or annuity described in Section 409(a) or Section 408(b) of the Code that is established on behalf of the designated beneficiary and that will be treated as an inherited IRA pursuant to the provisions of Section 402(c)(11) of the Code. Section 402(c)(11) of the Code provides that a direct rollover of a distribution to a non-spouse beneficiary is a rollover of an eligible rollover distribution only for purposes of Section 402(c) of the Code. Accordingly, the distribution to a non-spouse beneficiary is not subject to the direct rollover requirements of Section 401(a)(31) of the Code, the notice requirements of Section 402(f) of the Code, or the mandatory withholding requirements of Section 3405(c) of the Code.
(2) Eligible retirement plan. An "eligible retirement plan" is an eligible plan under Section 457(b) of the Code which is maintained by a state, political subdivision of a state, or an 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 the system, an individual retirement account described in Section 408(a) of the Code, an individual retirement annuity described in Section 408(b) of the Code, an annuity plan described in Section 403(a) of the Code, an annuity contract described in Section 403(b) of the Code, or a qualified plan described in Section 401(a) of the Code, that accepts the distributee's eligible rollover distribution. The definition of eligible retirement plan shall also apply in the case of a distribution to a surviving spouse, or to an alternate payee under a domestic relations order. An "eligible retirement plan" also is a Roth IRA described in Section 408A(b) of the Code, provided that any distribution to such Roth IRA is made in accordance with the provisions of Section 408A of the Code.
(3) Eligible rollover distribution. An "eligible rollover distribution" is 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: (i) any distribution that is one of a series of substantially equal periodic payments (not less frequently than annually) made for the life (or life expectancy) of the distributee or the joint lives (or joint life expectancies) of the distributee and the distributee's designated beneficiary, or for a specified period of ten (10) years or more; (ii) any distribution to the extent such distribution is required under Section 401(a)(9) of the Code; (iii) the portion of any distribution that is not includible in gross income; and (iv) any other distribution that is reasonably expected to total less than two hundred dollars ($200.00) during a year. A portion of a distribution shall not fail to be an eligible rollover distribution merely because the portion consists of after-tax member contributions which are not includible in gross income. However, such portion may be transferred only to (1) an individual retirement account or annuity described in Section 408(a) or (b) of the Code, (2) to a qualified defined contribution plan described in Section 401(a) of 403(a) of the Code that agrees to separately account for amounts so transferred, including separately accounting for the portion of such distribution which is includible in gross income and the portion of such distribution which is not so includible, or (3) for taxable years beginning after December 31, 2006, to a qualified trust or to an annuity contract described in Section 403(b), if such trust or contract provides for separate accounting for amounts so transferred (including interest thereon), including separately accounting for the portion of such distribution which is includible in gross income and the portion of such distribution which is not so includible.
Sec. 22-43(h). Assignments prohibited. Except as set forth in section 22-43.1, none of the money, pensions or other benefits payable by the system shall be assignable either in law or in equity or be subject to execution, levy, attachment, garnishment or other legal process.
(Ord. No. 10657, § 2, 4-28-09, eff. 7-1-09; Ord. No. 11020, § 4, 9-11-12, eff. 7-1-09)
Sec. 22-43.1.(a). Benefits subject to domestic relations orders. The right of a member to a retirement benefit, to the refund of a member's accumulated contributions account, or any other benefit under the provisions of the system shall be subject to award pursuant to a system approved domestic relations order.
Sec. 22-43.1(b). System administrator review and approval. The system administrator is responsible for the review and approval of any domestic relations order impacting benefits or rights of a member under this system and which is presented to the system administrator in a timely fashion. The system administrator shall determine whether the domestic relations order can be administered and benefits paid in accordance with the applicable requirements of the order, the system and the Code. Any domestic relations order accepted by the system administrator shall be referred to as a system approved domestic relations order. To the extent permitted by law, the system administrator's decision regarding a domestic relations order shall be final and binding. The city, the board, and the system administrator shall not be responsible for the payment of any system benefits in contravention of a domestic relations order when the domestic relations order is not timely presented to the system administrator for review. Additionally, upon ratification of a member's retirement application by the board, all benefit payment elections (including those filed by the member, ordered pursuant to a system approved domestic relations order or filed by an alternate payee) shall become irrevocable and no change in benefit options shall be permitted, regardless of any changes in the marital status of the member or the alternate payee.
Sec. 22-43.1(c). System approved domestic relations order. No domestic relations order shall be accepted by the system administrator if the order requires the system to provide any type, form or time of payment that is not provided under this Code, as determined by the system administrator in its discretion. Additionally, any system approved domestic relations order must reasonably identify the Tucson Supplemental Retirement System and specify all of the following: (1) the name and last known mailing address of the member; (2) the name and last known mailing address of each alternate payee covered by the order; (3) the method of determining the amount of the member's system benefits to be paid to each alternate payee covered by the order; (4) the number of payments or period to which the order applies; and (5) whether survivor benefits are payable to the alternate payee upon the death of the member.
(Ord. No. 10657, § 3, 4-28-09, eff. 7-1-09; Ord. No. 11327, § 15, 12-8-15, eff. 1-1-16)
DIVISION 2.
ADMINISTRATION OF THE SYSTEM
ADMINISTRATION OF THE SYSTEM
Sec. 22-44(a). Administration. The board of trustees shall be responsible for, and shall have the power and authority necessary to effectuate the administration, management and operation of the system. The board shall construe, interpret and implement the provisions of this article, in its discretion and pursuant to uniform and non-discriminatory rules, policies and procedures.
Sec. 22-44(b). Membership. The membership of the board shall be exempt from all provisions of section 10A-134 of the Tucson Code. The board shall consist of the following seven (7) members:
(1) A chairman, to be appointed by the mayor, subject to the approval of the city council;
(2) The city's human resources director or his/her designee;
(3) The city's finance director or his/her designee;
(4) Two (2) contributing members nominated and elected by the contributing members of the system in a manner that the board shall prescribe by regulation;
(5) One (1) retired member nominated and elected by the retired members of the system in a manner that the board shall prescribe by regulation;
(6) One (1) member appointed by the city manager.
Sec. 22-44(c). Qualifications. The individuals appointed to the board by the mayor, as chairman of the board, and by the city manager shall be appointed based on the individual's business experience with emphasis on a discipline such as law, retirement administration, accounting or investments.
Sec. 22-44(d). Compensation. The members of the board shall serve without compensation but shall be reimbursed for expenses incurred by them in the performance of their board duties.
Sec. 22-44(e). Term of office. The term of office of board members nominated and elected by members in accordance with section 22-44(b)(4) and (5) above shall be four (4) years. The chairman of the board shall serve a term of four (4) years. The city manager's appointee shall serve at the discretion of the city manager or until the appointee resigns by providing advance notice to the board and the city manager. The directors of human resources and finance shall be standing members of the board and not subject to annual terms. Any employee or retiree representative board member who is elected to two (2) consecutive terms shall not be eligible to succeed themselves.
Sec. 22-44(f). System budget. The board shall annually prepare and maintain a budget setting forth the administrative costs of the system. The system budget shall include separate line items for the primary administrative expenses of the system, including, but not limited to, recordkeeping, accounting fees, actuarial expenses, investment fees and expenses, audit expenses, staffing costs, other independent professional expenses, and professional development fees and expenses for board members and the system administrator. The system budget shall be presented to mayor and council in connection with the board's annual report on the system.
Sec. 22-44(g). Employment of professionals. The board may employ managers, consultants, actuaries, technical advisors and professionals, including legal counsel and medical practitioners, and staff personnel as may be necessary for the proper administration of the system. Professionals employed by the board shall discharge their duties in accordance with and be subject to the highest prevailing industry standard of care for their respective disciplines.
Sec. 22-44(h). Establishing interest rates and actuarial assumptions; actuarial studies. The board shall establish, from time to time, the interest rate(s) applicable to member accumulated contributions accounts and the assumed earnings rate applicable to end of service program benefits, as well as the applicable crediting methodologies. The board also shall adopt from time to time such mortality, service and other tables, as well as the assumed interest rate, as are necessary and proper for the administration and funding of the system. Additionally, the board shall cause an actuarial study to be completed with regard to all of the experience of the system no less frequently than every five (5) years. Upon receipt and review of the results of the actuarial study(ies), the board shall if necessary revise the actuarial assumptions used in the calculation of contributions and/or the preparation of the annual valuations.
Sec. 22-44(i). Retirement incentives. The board may, pursuant to duly adopted board policies, recommend retirement incentive programs and/or an extension of the scheduled termination date of incentive programs such as the end of service program; provided that the recommended action shall have no significant detrimental effect on the annual required contribution or the funded status of the system and is consistent with the employment and retention goals and objectives of the city, as determined by the board in consultation with the system's actuary and the city manager's office.
Sec. 22-44(j). Prohibited interest and fiduciary responsibility. No member of the board shall have any interest, direct or indirect, in the gains or profits of an investment made by the board, except as a member or beneficiary of the system. No member of the board shall, directly or indirectly, for himself or as an agent, in any manner use the moneys or other assets of the system, except to make such payments from the system as are authorized by the board; nor shall any member of the board become an endorser or surety or in any manner an obligor for moneys loaned by or borrowed from the board. The board shall discharge its duties with respect to the system solely in the interest of, and for the exclusive purpose of providing benefits to, members and beneficiaries.
Sec. 22-44(k). Additional powers and duties. In addition to all other powers and duties, the board shall:
(1) Keep a record of all of its proceedings, and such record shall be open to inspection by members and the public;
(2) Determine the credited service, the compensation, the average final monthly compensation, and the age of all members; and when the same cannot be determined from the records, it may make the best available estimates thereof;
(3) Make annually a report to the mayor and city council covering the operations of the system for the preceding fiscal year, including its financial conditions as of fiscal closing;
(4) Review and provide written recommendations to the mayor and city council on all proposed ordinances and resolutions not originating from the board that amend, modify or delete provisions of the system. The board shall be given forty-five (45) days advance notice prior to any such mayor and council action regarding the system;
(5) Invest the assets of the system;
(6) Adopt necessary rules and regulations governing the administration of the system;
(7) Hear and resolve employee, member and beneficiary claims relating to the system; and
(8) Do all other things necessary for the proper administration of the provisions of the system.
Sec. 22-44(l). Advisory committees and subcommittees. The board may establish advisory committees and subcommittees consistent with the needs of administering the system. Advisory committees and subcommittees shall report directly to the board and have no authority to make decisions on behalf of the board.
(Ord. No. 10657, § 4, 4-28-09, eff. 7-1-09; Ord. No. 11327, § 16, 12-8-15, eff. 1-1-16; Ord. No. 11743, § 1, 4-14-20, eff. 7-1-20)
Sec. 22-45(a). Investments. The board shall have full power to invest and reinvest all moneys belonging to the system's trust fund and to hold, purchase, sell, assign, transfer or dispose of the securities or investment in which such moneys have been invested. The board or any agents employed by the board may:
(1) Invest and reinvest the principal and income of the trust fund without distinction between principal and income;
(2) Sell, exchange, convey, transfer or otherwise dispose of any investments of the trust fund held in the name of the system by private contract or at public auction;
(3) And with regard to trust fund investments:
(A) Vote upon any stocks, bonds or other securities;
(B) Give general or special proxies or powers of attorney with or without power of substitution;
(C) Exercise any conversion privileges, subscription rights or other options and make any payments incidental thereto;
(D) Consent to, or otherwise participate in, corporate reorganizations or other changes affecting corporate securities and delegate discretionary powers and pay any assessments or charges in connection therewith;
(E) Generally exercise any of the powers of any owner with respect to securities or other investments held in the trust fund;
(4) Make, execute, acknowledge and deliver any and all other instructions that may be necessary or appropriate to carry out the powers herein granted;
(5) Register any investment held in the trust fund in the name of the system or in the name of the nominee;
(6) At the expense of the system, enter into agreement with a trustee or manager for the acquisition and safekeeping and handling of securities and other investments coming into the possession of the board; the agreement shall be entered into under such terms and conditions as shall secure the proper safeguarding, inventory, withdrawal and handling of the securities and other investments; no access to, and no deposit or withdrawal of, the securities from any place of deposit selected by the board shall be permitted or made except as the terms of the agreement may provide; and
(7) Do all other acts and engage in other transactions whether or not expressly authorized which may be deemed necessary or proper for the growth and protection of the investment held in the trust fund.
Sec. 22-45(b). Due diligence. In making each and all such investments, the board shall exercise the judgment and care under the circumstances then prevailing which persons of ordinary prudence, discretion and intelligence exercise in management of their own affairs, not in regard to speculation, but in regard to the permanent disposition of their funds, considering the probable income therefrom as well as the probable safety of the capital. The board shall not be held liable for the exercise of more than ordinary care and prudence in the selection of investments and shall not be limited to so-called "legal investments for trustees"; but all assets of the system shall be invested subject to all conditions, limitations and restrictions imposed by law.
(Ord. No. 10657, § 4, 4-28-09, eff. 7-1-09)
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