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Legislation #: 981444 Introduction Date: 12/17/1998
Type: Ordinance Effective Date: 1/8/1999
Sponsor: None
Title: Amending Chapter 2, Code of Ordinances, by repealing Sections 2-1176, Retirement benefits, 2-1185, Death benefits, and 2-1332, Eligibility; retirement benefits, and enacting in lieu thereof new sections of like number and subject matter.

Legislation History
DateMinutesDescription
12/17/1998

Prepare to Introduce

12/17/1998

Referred Finance & Administration Committee

12/21/1998

Do Pass

12/21/1998

Assigned to Third Read Calendar

12/29/1998

Passed


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ORDINANCE NO. 981444

 

Amending Chapter 2, Code of Ordinances, by repealing Sections 2-1176, Retirement benefits, 2-1185, Death benefits, and 2-1332, Eligibility; retirement benefits, and enacting in lieu thereof new sections of like number and subject matter.

 

BE IT ORDAINED BY THE COUNCIL OF KANSAS CITY:

 

Section 1. That Chapter 2, Code of Ordinances of the City of Kansas City, Missouri, is hereby amended by repealing Sections 2-1176, Retirement benefits, 2-1185, Death benefits, and 2-1332, Eligibility; retirement benefits, and enacting in lieu thereof new sections of like number and subject matter, to read as follows:

 

Sec. 2-1176. Retirement benefits.

 

(a) Annuity. Upon retirement on or after May 1, 1999 as provided in section 2-1174, an annuity calculated as follows shall be payable:

 

(1) If married at date of retirement, the annuity shall be 1.9 percent of the member's final average compensation multiplied by years and full months of creditable service not to exceed 65 percent.

 

(2) At date of retirement, a member may elect to receive an actuarial equivalent annuity providing that, upon death following retirement, the same actuarial equivalent annuity shall be payable to the surviving spouse provided the marriage occurred on or before the date of retirement. This election shall not be effective if the member dies within 30 days after filing application for retirement or before the date of the first payment of the retirement annuity.

 

(3) If unmarried at date of retirement, the annuity shall be 2.11 percent of the member's final average compensation multiplied by years and full months of creditable service not to exceed 65 percent.

 

(4) With signed consent by the spouse, a married member may elect calculation as if unmarried, forfeiting a surviving spouse's annuity as provided in section 2-1185.

 

(b) Withdrawal of contributions. A member retiring under provisions of section 2-1174, except disability retirements, may elect, with signed consent of spouse, to withdraw all or a portion of his accumulated contributions and interest, and receive a reduced annuity. The annuity calculated in subsection (a) of this section shall be reduced an actuarially equal amount by applying factors adopted by the board of trustees upon recommendation of the retirement system's consulting actuary.

 

(c) Cost-of-living adjustment. An annual cost-of-living adjustment in retirement, disability and death benefits shall be paid under these conditions:


(1) As of calendar year-end the change in the Consumer Price Index‑‑All Urban Consumers, U.S. city average, or its recognized successor, shall be determined from the previous year-end.

 

(2) The change will be rounded to the nearest full percent, and limited to not more than three percent.

 

(3) The change shall be applied to the annuity as calculated upon retirement date under the provisions of subsection (a) of this section, without reduction for withdrawal provided in subsection (b) of this section. Such adjustment is not to be compounded. No annuity shall be reduced below the original amount.

 

(4) The adjustment shall be paid on all annuities effective on or before the preceding January 1.

 

(5) The adjustment shall be made on annuity checks dated August 1, and the adjusted amount shall remain unchanged until the next August 1.

 

(d) Health insurance subsidy. A $100.00 monthly retiree health insurance subsidy shall be payable to all retired members effective May 1, 1999, provided that the retired member is enrolled in the current retiree health insurance program sponsored by the City. If a member dies before retirement as the direct and proximate result of an accident sustained in the performance of assigned duties, the members surviving spouse shall become eligible for the health insurance subsidy described in this subsection as long as the spouse receives an annuity. No other survivors will be eligible for this health insurance subsidy following the line-of-duty death of a qualifying member.

 

(e) Minimum benefit. A minimum benefit of $400.00 per month is established for retirees with ten or more years of creditable service. Such minimum shall apply to current as well as future retirees, effective with pension checks dated July 1, 1999, calculated prior to any reductions applied due to sections 2-1176(a)(2) and 2-1176(b). Any annual cost-of-living adjustment shall be based on the original amount without reference to this minimum.

 

(f) Limitations. Benefits with respect to a member may not exceed the maximum benefits specified under section 415 of the Federal Internal Revenue Code for governmental plans.

 

Sec. 2-1185. Death benefits.

 

(a) Death before retirement. Upon death of a member of the retirement system for any cause prior to retirement, these amounts shall be payable as full and final settlement of any and all claims for benefits under this retirement system:

 

(1) If the member had less than five years of creditable service, the member's surviving spouse shall be paid in a lump sum the amount of accumulated contributions and interest. If there be no surviving spouse, payment shall be made to the member's designated beneficiary, or, if none, to the executor or administrator of the member's estate.

 

(2) If the member had five but less than 20 years of creditable service, the member's surviving spouse may elect, in lieu of the lump sum settlement provided for in subsection (a)(1) of this section, an annuity. Such annuity shall be one-half of the member's accrued annuity at date of death as computed in sections 2-1174 and 2-1176. The effective date shall be the latter of the first day of the month after the member's death or attainment of what would have been the member's early retirement date as provided in section 2-1174.

 

(3) If the member had 20 or more years of creditable service, the member's surviving spouse may elect, in lieu of the lump sum settlement provided for in subsection (a)(1) of this section, the larger of the annuity as computed in subsection (a)(2) of this section or an annuity determined on a joint and survivor's basis from the actuarial value of the member's accrued annuity at date of death.

 

(4) Any death of a retired member occurring before the date of first payment of the retirement annuity shall be deemed to be a death before retirement.

 

(b) Death after retirement. Upon death of a member for any cause after retirement, these amounts shall be payable:

 

(1) The member's surviving spouse, providing the marriage occurred on or before date of retirement, shall receive an annuity equal to one-half the member's accrued annuity as computed under section 2-1174 or section 2-1176 as of the member's actual retirement date.

 

(2) If the member elected the actuarial equivalent annuity provided in section 2-1176(b), the same annuity shall be continued to the surviving spouse, provided the marriage occurred on or before date of retirement.

 

(3) The current life insurance carrier for the city has established a single premium group term life program based upon the premium stabilization reserve at May 1, 1993. During the program's existence only, the carrier will issue paid term insurance to members who retire on or after May 1, 1993. Upon verification of death, the carrier will issue a $2,000.00 benefit to the member's designated beneficiary or estate.

 

(c) Remarriage by surviving spouse. Should a surviving spouse remarry, benefits from this retirement system shall cease as of the last day of the month following such remarriage.

 

(d) Recovery of member contributions.

(1) Should the total amount paid to a member and surviving spouse be less than the member's accumulated contributions and interest, the remaining balance shall be paid to the member's beneficiary, constituting full and final settlement of any and all claims for benefits under this retirement system.

 

(2) If no beneficiary is designated or survives, payment shall be made to the executor or administrator of the member's estate; provided, however, if any benefit is payable to the estate of a member, or to a person who is not competent to give a valid release, the board of trustees is authorized to pay such benefit, not exceeding $2,000.00, to any relative by blood or affinity of the member, or a person managing the member's affairs, who is deemed by the board to be equitably entitled thereto.

 

(e) Minimum surviving spouse pension. A minimum benefit of $200.00 per month is established for surviving spouses of members with ten or more years of creditable service. Such minimum shall apply to current as well as future surviving spouses, effective with pension checks dated July 1, 1999. Any annual cost-of-living adjustment shall be based on the original amount without reference to this minimum.

 

Sec. 2-1332. Eligibility; retirement benefits.

 

(a) Generally. Each elected official who serves one or more elective terms as those terms are now constituted shall receive an annuity beginning the first day of the month following attainment of age 60 or the expiration of his last term of office, whichever occurs later, and payable until the first day of the month following death.

 

(b) Application for retirement. Written application to the board of trustees shall be made at least 30 days prior to retirement date.

 

(c) Amount of annuity. The annuity shall be two percent of the average monthly compensation received by then serving elected officials of the same office during the 24 months next preceding the beginning of the annuity, multiplied by the number of years' and months' creditable service, limited to 60 percent of the existing salary for then serving elected officials of the same office.

 

(d) Cost-of-living adjustment. An annual cost-of-living adjustment in annuities shall be payable under these conditions, only to members who retire after January 1, 1988:

 

(1) The adjustment shall be made on the annuity checks dated May 1, and the adjusted amount shall remain unchanged until the next May 1.

 

(2) As of year-end, the change in the Kansas City Urban Wage Earners and Clerical Workers Index, or its recognized successor, shall be determined from the previous year-end.

(3) If the change is an increase, the change is to be rounded to the nearest full percent not exceeding three percent, and the annuity as calculated at retirement shall be increased by that percent and is not to be compounded.

 

(4) The cost-of-living adjustment shall be payable only to members or beneficiaries who have received an annuity for at least one year prior to the adjustment date.

 

(e) Early retirement; rule of 80.

 

(1) Elected officials may elect early retirement beginning at the later of age 55 or completion of ten years' creditable service. The benefit as computed in this subsection shall be reduced by 0.5 percent for each month the effective date is prior to the first day of the month following attainment of age 60.

 

(2) A member may elect to retire when the total of his age and years of creditable service equal or exceed 80, without reduction of benefits as calculated in this subsection.

 

(f) Membership. Elected officials shall become members upon assuming office. A municipal judge who is not receiving retirement payments under article XIII, section 395.9, of the city Charter may elect not later than April 15, 1985, and subsequently appointed judges within 60 days after taking office, to either become a member of this retirement system, or not so doing will accept retirement benefits under section 395.9 of the Charter. Such election, once made, is irrevocable.

 

(g) Required distributions. Distribution of a member's interest in the retirement 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 70 1/2 or the calendar year in which the member retires under the plan.

 

(h) Creditable service. The term "creditable service," as used in this section, shall mean service as a city employee and elected official continuously. If a member of the employees' retirement system becomes a member of this elected officials' retirement system maintaining a continuous service, his employees' retirement system member contributions and interest shall not be refunded, but shall be transferred to his account in the elected officials' retirement system.

 

(i) Withdrawal of contributions. A member retiring under the provisions of subsection (a) of this section, except disability retirements, may elect, with signed consent of his spouse, to withdraw all or a portion of his accumulated contributions and interest, and receive a reduced annuity. The annuity calculated in this subsection (i) shall be reduced an actuarially equal amount by applying factors adapted by the board of trustees upon recommendation of the retirement system's consulting actuary.

 

(1) Rollovers. The provision applies to distributions made on or after January 1, 1993. Notwithstanding any provision of the retirement system plan 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.

 

a. 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).

 

b. 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.

 

c. 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.

 

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

 

(j) Health insurance subsidy. A $50.00 monthly retiree health insurance subsidy shall be payable to eligible members who retire on or after June 1, 1991, under the following conditions, until they reach age 65. The annuitant must:

 

(1) Be enrolled in the current retiree health insurance program sponsored by the city; and

 

(2) Meet the rule of 80 requirements or have at least 25 years of creditable service; or

 

(3) Meet eligibility requirements for a duty disability retirement prior to May 1, 1996, as defined in section 2-1339.

 

(k) Health insurance subsidy adjustment. Effective May 1, 1993, an annual adjustment of the health insurance subsidy shall be paid to eligible members under the following conditions:

 

(1) As of fiscal year-end the percentage change in average health care premiums for the city shall be determined from the previous fiscal year-end.

 

(2) If the change in average health care premiums is an increase, the health insurance subsidy shall be increased to the nearest full percent and be limited to five percent.

 

(3) The percentage increase shall be added on the previous year's health insurance subsidy. The percentage change will be calculated on the base subsidy as described in subsection (j) of this section.

 

(4) The adjustment shall be paid on annuity checks dated August 1, and the adjusted amount shall remain unchanged until the next August 1.

 

(l) Limitations. Benefits with respect to a member may not exceed the maximum benefits specified under Section 415 of the Federal Internal Revenue Code for governmental plans.

 

___________________________________________

 

Approved as to form and legality:

 

 

______________________________

Assistant City Attorney