COMMITTEE SUBSTITUTE FOR ORDINANCE NO. 140034

 

Amending Chapter 2, Article IX, Division 4, Code of Ordinances establishing the firefighters pension system by repealing sections 2-1251, 2-1255, 2-1259, 2-1264, 2-1265, 2-1268, 2-1271 and 2-1272 and enacting new sections 2-1251, 2-1255, 2-1259, 2-1264, 2-1265, 2-1268, 2-1271, 2-1272 and 1282 to establish new Tier 2 retirement benefits for persons employed on or after April 20, 2014.

 

BE IT ORDAINED BY THE COUNCIL OF KANSAS CITY:

 

Section 1. That Chapter 2, Article IX, Division 4, Code of Ordinances is amended by repealing sections 2-1251, 2-1255, 2-1259, 2-1264, 2-1265, 2-1268, 2-1271 and 2-1272 and enacting new sections 2-1251, 2-1255, 2-1259, 2-1264, 2-1265, 2-1268, 2-1271, 2-1272 and 1282 to read as follows:

 

Sec. 2-1251. Definitions.

 

The following words and phrases as used in this division, unless a different meaning is plainly required by the context, shall have the following meanings:

 

Accumulated contributions means the sum of all amounts deducted from the compensation of the member and credited to his individual account in the pension fund, together with regular interest thereon, excluding, however, the initiation fee and service charges required by this division.

 

Annual compensation means compensation defined in section 415(c)(3) of the Internal Revenue Code and section 1.415-2(d) of the Treasury Regulations, but in no event more than $200,000.00 per calendar year (as adjusted annually under section 401(a)(17) of the Internal Revenue Code). Annual compensation also includes amounts contributed by the employer pursuant to a salary reduction agreement which are excludable from a member's gross income under sections 125, 401(a)(8), 402(h), or 403(b) of the Internal Revenue Code.

 

Effective on and after January 1, 1996, in addition to other applicable limitations set forth in the plan, and notwithstanding any other provision of the plan to the contrary, for plan years beginning on or after January 1, 1996, and only for employees who were not members before January 1, 1996, the annual compensation of each member taken into account under the plan shall not exceed to OBRA '93 annual compensation limit. The OBRA '93 annual compensation limit is $150,000.00, as adjusted by the commissioner for increases in the cost of living in accordance with section 401(a)(17) of the Internal Revenue Code. The cost-of-living adjustment in effect for a calendar year applies to any period, not exceeding 12 months, over which compensation is determined (determination period) beginning in such calendar year. If a determination period consists of fewer than 12 months, the OBRA '93 annual compensation limit will be multiplied by a fraction, the numerator of which is the number of months in the determination period, and the denominator of which is 12.

 

For plan years beginning on or after January 1, 1996, and only for employees who were not members before January 1, 1996, any reference in this pension system plan to the limitation under section 401(a)(17) of the Internal Revenue Code shall mean the OBRA '93 annual compensation limit set forth in this provision.

 

If compensation for any prior determination period is taken into account in determining a member's benefits accruing in the current plan year, the compensation for that prior determination period is subject to the OBRA '93 annual compensation limit in effect for that prior determination period. For this purpose, for determination periods beginning before the first day of the plan year beginning on or after January 1, 1996, or OBRA '93 annual compensation limit is $150,000.00.

 

Average final compensation means the monthly average of the two highest years of compensation of the member in the last ten years, whether or not such years are consecutive. Such average final compensation shall include any sick leave or vacation leave credited at retirement date.

 

Beneficiary means any person in receipt of a pension, retirement allowance or other benefit, or designated by any member to receive benefits upon his death.

 

Board of trustees means the board provided for in section 2-1255 to administer the pension system.

 

Compensation means the basic monthly wage or salary paid an employee excluding bonuses, overtime, expense allowance and other extraordinary compensation. Compensation shall include amounts contributed to any plan maintained by the employer pursuant to a salary reduction agreement where the member could have elected to receive such amount as case compensation.

 

Creditable service means prior service plus membership service, if continuous. If member who terminates and withdraws accumulated contributions and interest is subsequently employed as firefighter, the member must repay total withdrawal plus interest as described in section 2-1253(d) before years prior to termination are considered creditable service.

 

Division means this division, as amended, and as this division may hereafter be amended.

 

Firefighter means any officer or employee of the fire department of the city employed for the duty of fighting fires, but not anyone employed in a clerical or any other capacity not involving firefighting duties. It shall, however, include all persons originally employed for firefighting duties, and who actually performed such duties, but for various reasons were transferred to other divisions of the fire department. In case of doubt as to whether any person is a firefighter within the meaning of this division, the decision of the board of trustees shall be final.

 

Fiscal year means the fiscal year of the city.

 

Medical board means the board of physicians provided for in this division.

 

Member means a member of the pension system as defined in section 2-1252.

 

Membership service means service as a firefighter rendered since last becoming a member after July 1, 1953.

 

Pension means a monthly payment for life. The first payment shall be made at the end of the month after the effective date of the benefit as established by the board of trustees. The final payment of all pensions and any child's allowance shall be made at the end of the month in which the event causing cessation of the payment occurs and shall be made for the full monthly amount without reduction.

 

Pension fund means the fund resulting from contributions made thereto by the city, by members of the pension system and from other sources, together with the earnings thereon.

 

Pension system means the firefighter's pension system as set out in this division.

 

Prior service means all service as a firefighter prior to the date the pension became effective.

 

Regular interest means interest at such rate as may be set by the board of trustees, not to exceed three percent per annum, compounded annually.

 

Tier 1 Member means a member of the pension system whose membership began prior to April 20, 2014.

 

Tier 2 Member means a member of the pension system whose membership began on or after April 20, 2014.

 

Sec. 2-1255. Membership and organization of board of trustees.

 

(a)    Membership. The general administration and the responsibility for the proper operation of the pension system shall be vested in a board of trustees of nine persons, which board shall be constituted as follows:

 

(1)               The fire chief, ex officio;

 

(2)               The director of finance, ex officio;

 

(3)               The director of human resources, ex officio;

 

(4)               The city treasurer, ex officio;

 

(5)               Three members who are current members of Local 41 and one member who is a current member of Local 3808 to be elected by the members of the pension system with nominations and vote by secret written ballot, at an election supervised by the ex officio members of the board of trustees, for terms of three years each, respectively; provided however, one of the first three members so elected shall serve for one year, one member for two years, and the third member for three years from the date such pension system becomes operative, and thereafter all members so elected shall serve for terms of three years each, respectively; and

 

(6)               One retiree member to be jointly appointed by Local 42 and Local 3808 of the International Association for Fire Fighters; provided however, the retiree member shall have all the rights and responsibilities of the trustees on the board, but non-voting, and therefore shall not be counted towards a quorum.

 

(b)   Vacancies. If a vacancy occurs in the office of an elected trustee, the vacancy shall be filled for the unexpired term by the remaining trustees from the membership of the pension system.

 

(c)    Compensation. Trustees shall serve without compensation, but they shall be reimbursed from the pension fund for all necessary expenses which they may incur through service on the board.

 

(d)   Oath of office. Each trustee shall, within ten days after his appointment or election, take an oath of office before the director of records that, so far as it devolves upon him, he will diligently and honestly administer the affairs of the board and that he will not knowingly violate or willingly permit to be violated any of the provisions of this division as it is now written or as it may hereafter be amended. Such oath shall be subscribed to by the member making it, certified by the director of records, and filed in the office of the director of records.

 

(e)    Vote. Each trustee shall be entitled to one vote on the board. The majority vote of the quorum present shall be necessary for a decision by the trustees at any meeting of the board. A quorum of the board shall be six trustees; because the non-voting member will not be counted towards determining a quorum.

 

Sec. 2-1259. Records and reports of board of trustees.

 

(a)    Data. The board of trustees shall keep in convenient form such data as shall be necessary for actuarial valuation of the funds and securities of the Pension System and for checking the experience of the system.

 

(b)   Proceedings; annual report. The board of trustees shall keep a record of all of its proceedings, which shall be open to public inspection. The board shall publish annually in pamphlet form a report prepared by independent certified public accountants showing the fiscal transactions of the pension system for the preceding fiscal year, the status of assets and liabilities and the amount of securities and cash on hand. One copy of such annual report shall be delivered to each member of the board of trustees and to each member and current beneficiary of the Pension System, three copies shall be filed with the director of records, and 25 copies shall be delivered to the city manager for the members of the city council.

 

(c)    Certification of amount to be paid by city. The board shall, before October 1 of each year, certify to the city manager the amount of the ARC, as defined in section 2-1282, to be paid by the city under the Pension System for the succeeding fiscal year as required by this division.

 

Sec. 2-1264. Conditions for retirement.

 

(a)    Voluntary retirement – Tier 1. Any Tier 1 member in service as a firefighter for compensation or on authorized sick leave not exceeding one year, or who shall hereafter enter service as a firefighter, may retire when he has completed 25 or more years of creditable service or, if he first enters the pension system as fire chief and retires as fire chief, when he has completed 10 or more years of creditable service.

 

(b) Voluntary retirement – Tier 2. Any Tier 2 Member in service as a firefighter for compensation or on authorized sick leave not exceeding one year, or who shall hereafter enter service as a firefighter, may retire when he has completed 27 or more years of creditable service or, if he first enters the pension system as fire chief and retires as fire chief, when he has completed 10 or more years of creditable service.

 

(c) Disability retirement. If a member, while a participant in this plan, contracts an illness or suffers an accident rendering him permanently and totally disabled, he shall be entitled to pension benefits in accordance with the terms and provisions of section 2-1267

 

(d) Application for retirement. Any member eligible for retirement as provided in this division may retire upon written application to the board of trustees, which shall establish the retirement date, but not later than the first day of the month following the happening of the event set out in this division as a condition for the type of retirement.

 

Sec. 2-1265. Pension benefits generally.

 

(a)    Amount of retirement pension. Effective for retirement on or after December 31, 1999, upon retirement, a member shall receive a monthly pension equal to two and one-half percent of the member's average final compensation times the number of years and months of creditable service, not to exceed 80 percent of the member's average final monthly compensation.

 

(b)   Optional forms of payment.

 

(1)               Withdrawal of contributions.

 

a.                   A Tier 1 member retiring with 25 or more years of creditable service, or a Tier 2 Member retiring with 27 years of creditable service, or a member who first enters the pension system as fire chief and retires as fire chief with ten or more years of creditable service may elect to withdraw all or a portion of his accumulated contributions and receive a reduced lifetime pension. This election will not affect the amount of the surviving spouse's pension or the cost-of-living adjustment.

 

b.                  The pension calculated in subsection (a) will be reduced by applying factors to the amount withdrawn as adopted by the board of trustees upon the recommendation of the pension system's consulting actuary.

 

c.                   The member's spouse, if any, must sign appropriate forms attesting consent.

 

(2)               Joint options.

 

a.                   A Tier 1 member retiring with 25 or more years of creditable service, or a Tier 2 Member retiring with 27 years of creditable service, or a member who both first enters the pension system as fire chief and retires as fire chief with ten or more years of creditable service may elect a reduced lifetime pension. A percentage (100 percent, 75 percent, or 66 2/3 percent), as specified in the election, shall be paid to the surviving spouse instead of the amount specified in subsection 2-1268(a)(1) of this section.

 

b.                  This shall be calculated by multiplying the amount otherwise payable by the appropriate factor adopted by the board of trustees upon the recommendation of the pension system's consulting actuary.

 

c.                   This option is irrevocable after the effective date of the member's pension. It shall be effective only if the spouse was married to the member on the effective date of the member's pension and shall become ineffective if either the spouse or the member dies prior to the effective date of the pension.

 

d.                  Notwithstanding (b)(2)c, above, effective for deaths on or after the last day of the next fiscal year after enactment of this ordinance, for which the funding ratio is determined to be equal to or greater than 80%, if a member’s spouse predeceases the spouse, after the joint option has commenced, the joint option shall cease to be effective after the date of the spouse’s death. The member shall then have the member’s pension increased to the full pension the member would have received, had the member not elected the joint option. The increase in the amount of the monthly pension shall commence following the month in which proof of the spouse’s death has been filed with the Firefighters Pension System.

 

e.                   This election will not affect the amount of the cost-of-living adjustment.

 

f.                   The member's spouse, if any, must sign appropriate forms attesting consent; however, in no event shall a member be required to obtain the consent of an approved domestic partner in choosing pension options contained in this section.

 

(3)               Required distribution. Distribution of a member's interest in the pension system shall commence not later than April 1 of the calendar year following the later of the calendar year in which the member attains age 70½ or the calendar year in which the member retires under the plan.

 

a.                   If a death benefit is being paid to a designated beneficiary other than the member's spouse, payments shall either:

 

1.                  Be completed by December 31 of the fifth calendar year following the year of the member's death; or

 

2.                  If there is no designated beneficiary, payment of a death benefit shall commence no later than December 31 of the fifth calendar year following the year of the member's death.

 

b.                  If the designated beneficiary is the member's spouse, death benefit payments shall commence no later than December 31 of the year the member would have attained age 70½ paid over the life or life expectancy of the spouse, as determined under table V of Treasury Regulations 1.79-2 as of the date the payments commence, and benefits shall be actuarially increased for the delay.

 

(c)    Duty disability pension. Upon duty disability retirement, a member shall receive a monthly pension equal to 62.5 percent of the member's average final compensation per month, but not less than 62.5 percent of the then current maximum salary payable to the rank of a firefighter.

 

(d)   Nonduty disability pension. Upon nonduty disability retirement, a member shall receive a monthly pension equal to 25 percent of the average final compensation per month plus two and one-half percent per year of the member's average final compensation per month for the number of years and months of creditable service in excess of ten years, not to exceed to any event, a maximum monthly pension equal to 80 percent of the member's average final compensation per month.

 

(e)    Minimum benefit. A minimum benefit of $600.00 per month is established for voluntary, compulsory and disability retirees. Such minimum shall apply to current as well as future retired members, effective with pension checks dated August 1, 1986. Any annual cost-of-living adjustment related to prior calculated benefits shall be based on the original amount without reference to this minimum. The provisions of section 2-1279, when applicable to certain disability retirements, shall apply even if the net payments are less than the minimum stated herein.

 

(f)    Cost-of-living adjustment – Tier 1. A cost-of-living adjustment is authorized under these conditions:

 

(1)               Effective date of adjustment and applicability. An annual cost-of-living adjustment shall be payable on pension checks to be dated May 1 of the current year and shall remain unchanged until the next effective date of adjustment. This adjustment shall apply to all beneficiaries receiving benefits, except no pension of any member or beneficiary retiring after January 1 of any year shall be adjusted until May 1 of the succeeding year. The cost-of-living adjustment shall not apply to any funeral benefit.

 

(2)               Amount of adjustment. The adjustment shall be three percent, each year, non compounded.

 

(g) Cost-of-living adjustment – Tier 2. A cost-of-living adjustment is authorized under these conditions:

 

(1) Effective date of adjustment and applicability. An annual cost-of-living adjustment shall be payable on pension checks to be dated May 1 of the current year and shall remain unchanged until the next effective date of adjustment. This adjustment shall apply to all beneficiaries receiving benefits, but no sooner than the May 1 following the 27th anniversary of the Tier 2 Members employment, except no pension of any member or beneficiary retiring after January 1 of any year shall be adjusted until May 1 of the succeeding year. The cost-of-living adjustment shall not apply to any funeral benefit.

 

(2) Amount of adjustment. The adjustment for a Tier 2 Member shall be paid if the prior year funding ratio of the pension fund is equal to or greater than 80%, and will be equal to the percentage increase in the prior 12 months of the final national consumer price index for all urban consumers published prior to December 31 in advance of the next year’s adjustment, but shall not exceed 2.5% and shall be non compounded.

 

(h) Health insurance subsidy. There is hereby established a plan to provide health insurance subsidy payments to retired members of the firefighters' pension system as provided herein:

 

(1)               Funding. A separate fund will be established within the firefighters' pension system for the purpose of providing a health insurance subsidy to eligible annuitants pursuant to subsection (g)(4) of this section. Members will contribute one percent beginning May 20, 1991, toward the establishment of this fund. Beginning May 1, 1992, the city will contribute one percent toward funding. Effective July 25, 1994, the city and members will each contribute one-half percent toward funding. Effective June 23, 1996, the city and active members will each again contribute one percent toward funding. Effective January 1, 2000, the city shall contribute an additional one percent toward funding. Contributions funding this subsidy shall be in addition to contributions required in section 2-1272. The dollar value of these percentage contributions will be calculated and collected by the methods used in section 2-1272

 

(2)               Effective date. The board of trustees before April 1 of each year shall determine the dollar value of the annual health insurance subsidy. In addition to the amount determined by the board each year, the city shall pay:

 

a.                   Effective November 1, 2010, a $100.00 monthly retiree health subsidy to all retired members; and

b.                  Effective November 1, 2011 and continuing thereafter, a $200.00 monthly retiree health insurance subsidy to all retired members.

 

The subsidy shall be payable on pension checks of eligible annuitants pursuant to subsection (g)(4) of this section, to be dated May 1 of the current year, beginning 1992, and shall remain unchanged until the next effective date of adjustment. This benefit shall be provided so long as funds are available in the health insurance subsidy fund.

 

(3) Method of determination.

 

a. Contributions to the fund for the current fiscal year will be estimated based upon members' payroll.

 

b. This estimated amount plus earnings, forecasted at the rate assumed in the then most current actuarial valuation performed for the firefighters' pension system, as of January 1 of the current year will serve as the basis for distributions. The fund's balance after distribution must equal one percent of member's annual payroll or $270,000.00, whichever is greater. If the fund's balance is reported by the custodian to be below $270,000.00 at the end of any month, then all distributions from the fund shall cease until the next succeeding May 1.

 

c. The basis as determined in subsection (g)(3) of this section will be equally divided by all members eligible on January 1 of the current year. In no event will subsidy be greater than carrier premiums.

 

(4) Eligibility requirements. The health insurance subsidy shall be payable under the following conditions.

 

a. Tier 1 Members must have retired with at least 25 years of creditable service and Tier 2 Members must have retired with at least 27 years of creditable service; or

 

b. Meet eligibility requirements for a duty disability retirement as detailed in section 2-1267(a), (c), (d) and (e).

 

The surviving spouse of a member who dies in the performance of duty as a firefighter becomes eligible for the health insurance subsidy described above. If there is no surviving spouse, a minor child, or children, eligible for pension benefits under section 2-1268(a)(2) will receive the health insurance subsidy payment following the death of a qualified member as long as the child qualifies for pension benefit payments. Only one subsidy is payable per member. If more than one child qualifies as a surviving minor, the subsidy shall be paid in equal shares to all of the qualifying children.

 

(g)   Direct rollover. This provision applies to distributions made on or after January 1, 1993. Notwithstanding any provision of the pension system to the contrary that would otherwise limit a distributee's election under this provision, a distributee may elect, at the time and in the manner prescribed by the board of trustees, to have any portion of an eligible rollover distribution paid directly to an eligible retirement plan specified by the distributee in a direct rollover.

 

(1)               Eligible rollover distributions. 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: 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 years or more; any distribution to the extent such distribution is required under section 401(a)(9) of the Internal Revenue Code; and the portion of any distribution that is not includable in gross income (determined without regard to the exclusion for net realized appreciation with respect to employer securities).

 

(2)               Eligible retirement plan. An eligible retirement plan is an individual retirement account described in section 408(a) of the Internal Revenue Code, an individual retirement annuity described in section 408(b) of the Internal Revenue Code, an annuity plan described in section 403(b) of the Internal Revenue Code, or a qualified trust described in section 401(a) of the Internal Revenue Code, that accepts the distributee's eligible rollover distribution. However, in the case of an eligible rollover to the surviving spouse, an eligible retirement plan is an individual retirement account or individual retirement annuity.

 

(3)               Distributee. A distributee includes a member or former member. In addition, the member's or former member's surviving spouse and the member's former spouse who is the alternative payee under a state domestic relations order determined by the board of trustees, based on written procedures, to be a qualified domestic relations order, are distributees with regard to the interest of the spouse or former spouse.

 

(4)               Direct rollover. A direct rollover is a payment by the fund to the eligible retirement plan specified by the distributee.

 

(h)   Pension adjustment for previous beneficiaries. Effective for each payment made on or after March 1, 2000, the pension payment for each beneficiary shall be increased one percent for each year such beneficiary was receiving benefits prior to January 1, 1990.

 

(i)     Rights of domestic partner. Except as provided in (b)(2) above, a member's approved domestic partner, as recognized by the city, shall have all the rights and responsibilities of a member's spouse as provided in this section 2-1265

 

(j)     Children of domestic partnership. For the purposes of this section 2-1265, children and step children of domestic partnerships shall have the same rights as children and step children of marital relationships.

 

Sec. 2-1268. Death benefits generally.

 

(a)    Amount. Upon receipt of the proper proofs of death of a member, there shall be paid the following amounts:

 

(1)               Surviving spouse's pension.

 

a.                   There shall be paid to the eligible surviving spouse, if any, beginning the month following a member's death, one-half of the member's accrued pension at date of death as provided in section 2-1265(a), but not less than 25 percent of the member's average final compensation per month unless the deceased member had elected the joint option provided in section 2-1265(b)(2).

 

b.                  However, if the member dies before retirement as the natural and proximate result of an accident sustained in the performance of duty as a firefighter, the member's surviving spouse shall receive 100 percent of the member's accrued pension, but not less than 62.5 percent of the member's average final compensation per month, for a period of ten years.

 

c.                   If a Tier 1 Member having 25 years or more of creditable service, or a Tier 2 Member having 27 years or more of creditable service, dies before retirement, his surviving spouse shall receive a pension calculated as if the member retired on the date of his death, electing a 100 percent joint option without lump sum withdrawal, as calculated in section 2-1265(b)(2).

 

d.                  A minimum of $275.00 per month is established for current and future spouse's pension payments, effective with pension checks dated August 1, 1986. Any annual cost-of-living adjustment related to prior calculated benefits shall be based on the original amount without reference to this minimum. The provisions of section 2-1279, when applicable to certain disability benefits, shall apply even if the net payments are less than the minimum stated in this subsection.

 

e.                   If there be no surviving spouse, or if such surviving spouse dies, the surviving spouse's pension shall be divided equally among any children eligible, as provided in subsection (a)(2) of this section for a child's allowance.

 

(2)               Child's allowance.

 

a.                   There shall be paid to a member's child or children under the age of 18 years at the time of the member's death, $100.00 a month each until such child shall attain the age of 18 years, unless the child is a full-time student at an accredited institution of higher learning, in which case the payments shall continue until the child shall attain the age of 21 years.

 

b.                  Any child 18 years of age or older, who is physically or mentally incapacitated from earning a livelihood, shall, so long as such incapacity exists as certified by a member of the medical board, be entitled to the same benefits as a child under the age of 18. If any so incapacitated child shall marry, such child shall not thereafter be entitled to any benefits under this division.

 

(3)               Funeral benefit. Effective May 3, 1993, there shall be paid a funeral benefit of $2,000.00, whether death occurred in service or after retirement.

 

(b)   Qualification of surviving spouse. No surviving spouse shall be entitled to receive any benefits or payment of any pension under this division unless the spouse is married to the member as of the effective date of the member's benefit and as of the date of the member's death.

 

(c)    Other payments. If there be no surviving spouse, or child qualifying for child's allowance, surviving such deceased member, the member's accumulated contributions shall be paid to his or her estate or named beneficiary. If the payments received by such member, or the member's surviving spouse or children, did not equal the amount of the accumulated contributions, then the remaining balance of the accumulated contributions shall be paid to the member's named beneficiary or estate.

 

(d)   Rights of domestic partner. A member's approved domestic partner, as recognized by the city, shall have all the rights and responsibilities of a member's spouse as provided in this section 2-1268

 

(1)               Qualification of domestic partner. No domestic partner shall be entitled to receive any benefits or payment of any pension under this division unless the domestic partner's status as such had been approved prior to effective date of the member's benefit and continues in such status as of the date of the member's death.

 

(e)    Children of domestic partnership. For the purposes of this section 2-1268, children and step children of domestic partnerships shall have the same rights as children and step children of marital relationships.

 

Sec. 2-1271. Death benefits after election of deferred pension.

 

Should any former Tier 1 Member of the fire department having less than 25 years of creditable service or any Tier 2 Member of the fire department having less than 27 years of creditable service, or after having elected to receive a deferred pension under provisions of section 2-1270, die before becoming 50 years of age, no funeral or other benefits of any kind shall accrue or become payable to his widow or children or any other person except the return of his accumulated contributions, with interest, to his estate or to his named beneficiary. Should such member die after becoming 50 years of age, the benefits payable provided by section 2-1268 shall become payable as provided therein in a sum or sums bearing the same ratio to the sum therein provided as the number of creditable years bears for a Tier 1 Member to 25 or a Tier 2 Member to 27.

 

Sec. 2-1272. Deduction of member contributions from salaries; pickup of member contributions by employer.

 

(a)    A pension contribution shall be deducted as a condition and consideration of employment by the city from the stated compensation of each member until retirement, or as otherwise provided in this division, in an amount equal to 9.55 percent of the member's compensation, effective with the pay period beginning July 20, 1986. Effective with the pay period beginning April 20, 2014, each member will pay an amount equal to 10.55 percent of the member’s compensation. The deductions provided for in this subsection shall be made even though the minimum compensation payable to each member as provided by ordinance shall be reduced thereby, and each member shall be deemed to consent to the deductions so made and provided for in this subsection, and payment of salary or compensation less such deduction shall be a full and complete discharge of all claims and demands whatsoever for services rendered by such member during the period covered by such payment, except as to benefits provided by this division.

 

(b)   The employer, pursuant to the provisions of section 414(h)(2) of the United States Internal Revenue Code, shall pick up and pay the contributions which would otherwise be payable by members as prescribed in this section, commencing with the pay period ending May 10, 1986. The contributions so picked up shall be treated as employer contributions for purposes of determining the amounts of federal and state income taxes to withhold from the member's compensation.

 

(c)    Member contributions picked up by the employer shall be paid from the same source of funds used for the payment of compensation to a member. A deduction shall be made from each member's compensation equal to the amount of the member's contributions picked up by the employer, provided that such deduction shall not reduce the member's compensation for purposes of computing benefits under sections 2-1265, 2-1266, 2-1268, 2-1270 and 2-1271, including amendments thereto.

 

Sec. 2-1282. Payment of ARC.

 

The City shall annually budget and pay the actuarially required contribution (ARC) to the Pension Fund. The ARC is defined as the actuarially required contribution, as determined by the Fund’s independent actuary, calculated on the basis of a thirty-year closed amortization. The dollar amount used when calculating the ARC shall include all unfunded liability.

 

Secs. 2-1283—2-1300. Reserved.

 

________________________________________________

 

Approved as to form and legality:

 

 

______________________________

William Geary

City Attorney