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Legislation #: 140976 Introduction Date: 11/6/2014
Type: Ordinance Effective Date: none
Sponsor: None
Title: Amending Article IX of the Administrative Code of Kansas City, Missouri, relating to the pensions and other benefits, by repealing Sections 2-1171, 2-1173, 2-1174, 2-1176, 2-1183, 2-1184, 2-1189, 2-1190, 2-1191, 2-1194, 2-1201, 2-1251, 2-1255, 2-1258, 2-1265, 2-1266, 2-1267, 2-1268, 2-1269, 2-1270, 2-1271, 2-1276, 2-1277, 2-1303, 2-1304, 2-1332, 2-1334, 2-1335, 2-1338, 2-1339, 2-1341, 2-1363, 2-1364, 2-1365, 2-1366, 2-1390, 2-1391, 2-1392, 2-1395.4, 2-1395.5, 2-1395.11, 2-1396.4, 2-1396.10, and 2-1396.11, and enacting in lieu thereof sections of like number and subject matter that define spouse and surviving spouse to include a husband or wife of a pension member lawfully married in any jurisdiction, and to update language in certain employee retirement system provisions.

Legislation History
DateMinutesDescription
11/6/2014 Filed by the Clerk's office
11/6/2014 Referred to Finance, Governance & Ethics Committee
11/12/2014 Hold On Agenda (11/19/2014)
12/10/2014 Advance and Do Pass as a Committee Substitute, Debate
12/11/2014 Passed as Substituted

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140976 Fact Sheet.pdf Fact Sheet 77K Fact Sheet

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COMMITTEE SUBSTITUTE FOR ORDINANCE NO. 140976

 

Amending Article IX of the Administrative Code of Kansas City, Missouri, relating to the pensions and other benefits, by repealing Sections 2-1171, 2-1173, 2-1174, 2-1176, 2-1183, 2-1184, 2-1189, 2-1190, 2-1191, 2-1194, 2-1201, 2-1251, 2-1255, 2-1258, 2-1265, 2-1266, 2-1267, 2-1268, 2-1269, 2-1270, 2-1271, 2-1276, 2-1277, 2-1303, 2-1304, 2-1332, 2-1334, 2-1335, 2-1338, 2-1339, 2-1341, 2-1363, 2-1364, 2-1365, 2-1366, 2-1390, 2-1391, 2-1392, 2-1395.4, 2-1395.5, 2-1395.11, 2-1396.4, 2-1396.10, and 2-1396.11, and enacting in lieu thereof sections of like number and subject matter that define spouse and surviving spouse to include a husband or wife of a pension member lawfully married in any jurisdiction, and to update language in certain employee retirement system provisions.

 

BE IT ORDAINED BY THE COUNCIL OF KANSAS CITY:

 

Section 1. That Article IX, Division 2 of the Administrative Code is hereby amended by repealing Sections 2-1171, 2-1173, 2-1174, 2-1176, 2-1183, 2-1184, 2-1189, 2-1190, 2-1191, 2-1194, and 2-1201, and by enacting in lieu thereof sections of like number and subject matter to read as follows:

 

Sec. 2-1171. Definitions.

 

The following words and phrases as used in this division shall have the following meanings, unless a different meaning is plainly required by the context. The masculine pronoun shall include the pronoun of feminine gender, unless otherwise indicated by the context.

 

Actuarial equivalent means a benefit of equal value to another benefit when computed upon the basis of such mortality tables and interest rate as shall be adopted by the board of trustees upon recommendation of the actuarial consultant.

 

Adjustment for prior retirement benefit means 82 months of service with MAST or if the MAST employee has worked less than 82 months with MAST then the adjustment will be the entire amount of the employee's service with MAST.

 

Annuity means a monthly payment for life as established herein. 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 annuities 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.

 

Beneficiary means the person designated by a member to receive any benefits payable upon the member’s death.

 

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.

 

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.

 

Employer means the city or participating boards of control as defined in RSMo 95.540.

 

Employment and service means service for the employer as an employee.

 

Final average compensation – Tier 1. means the monthly average of the two highest years of compensation with the city of the member in the last ten years whether or not such years are consecutive. For former MAST employees, only compensation with the city will be used for this calculation.

 

Final average compensation – Tier 2. means the monthly average of the three highest years of compensation with the city of the member in the last ten years whether or not such years are consecutive.

 

Interest means the rate declared by the board of trustees compounded annually.

 

Last continuous employment means the most recent period of uninterrupted employment excluding all service previous to last reemployment date. For former MAST employees the most recent period of uninterrupted employment including service with MAST prior to April 25, 2010. In determining this number, part-time service with MAST will be used only to determine whether the MAST service was continuous.

 

Retirement system means the retirement system established herein to be known as "The Employees' Retirement System."

 

Spouse means the wife or husband, lawfully married in any jurisdiction, of a member

 

Surviving spouse means the spouse of a member surviving the member's death.

 

Termination means resignation or discharge from service of the employer.

 

Tier 1 Member means a member of the retirement system whose membership began prior to April 20, 2014, including, for the entire period of their employment by the city, employees who terminated covered employment before said date, were vested as of the date of such termination under the rules then in effect or who have not withdrawn their contributions from such prior employment and are re-employed by the city on or after April 20, 2014.

 

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

 

Sec. 2-1173. Creditable service.

 

(a)                Computation of total mount. Total creditable service of a member of the retirement system shall be the sum of membership service from date of employment to last day on pay status and prior service as computed under this section.

 

(b)               Membership service. Membership service shall be the years and full calendar months of employment while a contributing member of this system.

 

(1)               Solely for the purpose of determining whether a member has incurred a break in service, any leave of absence granted by an employer, up to 12 weeks, that qualifies under the Family and Medical Leave Act (FMLA) shall not be counted as a break in service for purposes of determining eligibility and vesting.

 

(2)               Purchase of service.

 

(A) Qualified employee. A current member who previously served as an employee of the City but not eligible for membership in this system and who had no break in service between non-qualifying and qualifying service may purchase months of service not greater than the number of months working in a non-qualifying position.

 

(B) Term for purchase. Purchase of prior months may be done in a lump sum payment or over time as permitted by the Board.

 

(C) Amount. The Board shall establish the purchase price, which shall be the full cost of the service, calculated based upon the same assumptions employed in the last actuarial valuation of the system and using accepted actuarial methods.

 

(D) Future service required. To be entitled to credit a member must remain in City employment for six months from the last date of purchase. The failure to render this future service will result in no credit being given for the time that is not beyond the six month period and a refund of the principal amount deposited towards service not allowed to be credited.

 

(c)                Prior service. Prior service shall be the years and full calendar months of employment preceding December 1, 1962, if continuous with membership service.

 

(d)               Service after retirement date. No creditable service shall accrue to any member beyond the member’s retirement date.

 

(e)                Reemployment generally.

 

(1)               Except for military leave and military creditable service, as set forth in subsection (g) of this section, provided an election is made within three years after reemployment, members who terminate and later return to membership may receive credit for such prior service and membership service, after they have been reemployed for at least two consecutive years, and have repaid withdrawn contributions plus interest at the rate then assumed for actuarial calculation.

 

(2)               This election shall not be available if employer contributions have been refunded to the federal government or any other granting agency or instrumentality.

 

(f)                Reemployment within 30 days of termination. A member rehired within 30 days of termination, and who does not withdraw or who re-deposits member contributions and interest, shall immediately begin membership.

 

(g)               Military leave and reemployment after military service.

 

(1)               To the extent by the Uniformed Services Employment and Reemployment Rights Act of 1994, a member shall be entitled to creditable service considering each month of military service as a month of employment with the city.

 

(2)               A termination refund of contributions and interest shall not be made to a member on military leave.

 

(3)               A member who terminates employment, receives a refund of contributions and interest, serves in the military service and then returns to city employment, not later than three years after reemployment, may receive credit for military service. He shall repay withdrawn contributions plus interest at the rate then assumed for actuarial calculation plus member contributions for the military creditable service years.

 

(h)               Leave of absence.

 

(1)               Upon determination by the director of human resources and the director’s certification to the board of trustees that a member of this pension system has been granted, in the interest of the city, a leave of absence from city employment for a period of not less than one year and not to exceed two years, such person remains a member of this system and shall receive creditable service provided contributions are made as required for all members. Determinations by the human resources director will be made in an even-handed manner, treating all persons in the same circumstances, equally.

 

(2)               Persons on leave, who are not certified by the director of human resources, are deemed inactive members of this pension system.

 

(3)               No refund of contributions and interest shall be made to members on leave of absence.

 

(i)                 Creditable service accrued under other city retirement plans.

 

(1)               An employee, including those of the police department, transferring to employment covered by this plan may elect to claim creditable service for creditable service in another retirement plan in which the employer contribution is wholly paid by the city. The member must deposit with the board of trustees any contributions and interest withdrawn from another plan. These shall be credited to the member’s account as member's contributions.

 

(2)               Anything to the contrary herein notwithstanding, municipal judges having vested employment or service, as defined in this division, are entitled to have such creditable service accrued in the formulation of their retirement pay under section 395.9, article XIII of the city charter (1925) if receiving benefits under that provision.

 

(3)               If the employee has vested rights under another plan, no creditable service shall be allowed.

 

(4)               This election must be made within six months following date of employment. Membership service shall begin on the first day of the month following such election.

 

Sec. 2-1174. Conditions for retirement.

 

(a)    Application for retirement. Any member of the retirement system may retire as provided in this division, terminating employment upon written application to the board of trustees, who shall establish the member’s retirement date as of the first day of the month.

 

(b)   Normal retirement.

 

(1) Tier 1. A member may elect normal retirement on or after attaining age 65 and five years of creditable service without reduction of benefit as calculated in section 2-1176.

 

(2) Tier 2. A member may elect normal retirement on or after attaining age 67 and ten years of creditable service without reduction of benefit as calculated in section 2-1176.

 

(c) Optional retirement.

 

(1) Tier 1 – age 60 or age plus service equals or exceeds 80. A member may elect to retire when the total of age and years of creditable service equal or exceed 80 or the later of age 60 and ten years' creditable service, without reductions of benefit as calculated in section 2-1176.

 

(2) Tier 2 – age 62 or age plus service equals or exceeds 85. A member may elect to retire when the total of age and years of creditable service equal or exceed 85 or the later of age 62 and ten years' creditable service, without reductions of benefit as calculated in section 2-1176.

 

(d) Early retirement. Members may elect early retirement:

 

(1)               Tier 1- age 55. Beginning at the later of age 55 or completion of ten years' creditable service. The benefit as computed in section 2-1176(a) 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)               Tier 1 – age 60. Beginning at age 60, if the member has more than five but less than ten years of creditable service. The benefit as computed in section 2-1176(a) 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 65.

 

(3)               Tier 2 – age 57. Beginning at the later of age 57 or completion of ten years' creditable service. The benefit as computed in section 2-1176(a) 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 62.

 

(e) 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 70½ or the calendar year in which the member retires under the plan.

 

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

 

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

 

b.                  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.

 

(2)               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 1.72-9 as of the date the payments commence, and benefits shall be actuarially increased for the delay.

 


Sec. 2-1176. Retirement benefits.

 

(a)    Annuity. Upon retirement on or after November 1, 2000, as provided in section 2-1174, an annuity calculated as follows shall be payable:

 

(1)               If married in any jurisdiction at date of retirement, the annuity shall be two percent of the Tier 1 member's final average compensation and for a Tier 2 member shall be 1.75 percent of the member’s final average compensation multiplied by years and full months of creditable service not to exceed 70 percent, except as set forth in section 2-1196, Code of Ordinances.

 

(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 2.22 percent of the Tier 1 member's final average compensation and for a Tier 2 member shall be 1.75 percent of the member’s final average compensation multiplied by years and full months of creditable service not to exceed 70 percent, except as set forth in section 2-1196, Code of Ordinances.

 

(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 the member’s 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 – Tier 1. An annual cost-of-living adjustment in retirement, disability and death benefits shall be paid 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.

 

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

 

(d) 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 Tier 2 member’s 62nd birthday, 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.

 

(2) Amount of adjustment. The adjustment for a Tier 2 member shall be paid if the funding ratio of the pension fund, as shown by the system’s most recent actuarial report, 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 noncompounded.

 

(e) Health insurance subsidy. A $200.00 monthly retiree health insurance subsidy shall be payable to all retired members effective November 1, 2000. If a member dies before retirement as the direct and proximate result of an accident sustained in the performance of assigned duties, the member's 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.

 

(d)   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.

 

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. 2-1183. Disability retirement prior to May 1, 1996.

 

A member who, prior to May 1, 1996, became totally and permanently disabled, as defined in this section, shall be entitled to retire on the first day of the month following termination by the board of such disability, provided that, within at least six months prior to May 1, 1996, the member receives medical treatment which is, or becomes, supporting evidence that the member is entitled to disability pension payments.

 

(1)               Amount. Members who are eligible and totally and permanently disabled, as defined in this section, shall receive a disability annuity computed as follows:

 

a.                   Duty disability: 50 percent of final average compensation, but in no event less than the amount the member would be entitled to as an annuity if member retired on the same date with equivalent age and creditable service.

 

b.                  Nonduty disability: 30 percent of final average compensation, but in no event less than the amount the member would be entitled to as an annuity if the member retired on the same date with equivalent age and creditable service.

 

The annuity shall cease upon the first day of the month following death, except that a surviving spouse or heir shall be entitled to death benefits, as computed under section 2-1185.

 

(2) Eligibility.

 

a.                   Duty disability shall mean total and permanent disability directly due to and caused by actual performance of employment with the city. Members eligible for optional retirement as provided in section 2-1174 may elect either option.

 

b. Nonduty disability shall mean total and permanent disability arising from any other cause than line-of-duty disability. At least ten years' creditable service is required. Members eligible for optional retirement as provided in section 2-1174 may elect either option.

 

(3)               Definition and determination of disability.

 

a.                   Total and permanent disability shall mean a state or condition which presumably prevents for the rest of a member's life the member engaging in any occupation or performing any work for remuneration or profit.

 

b.                  Such disability, whether duty or nonduty, must not have been contracted, suffered or incurred while the employee was engaged in or result from having been engaged in a criminal act or enterprise, or result from habitual drunkenness or addiction to narcotics or from self-inflicted injury, or from disability incurred while in the service of the armed forces of the United States or any foreign country.

 

c.                   No benefit shall be payable if the disability results from or is incurred while the member is engaged in self-employment or in any occupation or performing any work for remuneration or profit not in the service of an employer, as defined in this division.

 

d.                  The board of trustees shall make the determination as to disability, basing its findings on the evidence presented, including at least two written opinions by qualified physicians. The board shall appoint the physicians and the examination expenses shall be paid from this retirement system fund.

 

e.                   From time to time, the board of trustees shall have the right to require proof of continuing disability, which may include further examination.

 

(4)               Recovery from disability.

 

a.                   Should the board of trustees determine that disability no longer exists, it shall terminate the disability annuity.

 

b.                  If the member immediately returns to work with the city, the member shall again earn creditable service beginning on the first day of the month following such return. Creditable service prior to disability retirement shall be reinstated. No creditable service shall accrue while receiving a disability annuity and all such annuity payments made shall be charged to the extent possible against the member's accumulated contributions and interest at date of return to work.

 

c.                   Should the member not return to work with the city, the member shall be treated as a terminated employee. All annuity received shall be charged against the member's accumulated contributions and interest.

 

Sec. 2-1184. Termination benefits.

 

(a)    Generally. Upon termination of employment, a member of the retirement system shall be paid all the member’s accumulated contributions and interest. The member shall thereby forfeit for the member and for any possible beneficiaries all rights to any and all benefits under this retirement system.

 

(b)   Deferred annuity. A terminated Tier 1 member with at least five years or more of total employment and a Tier 2 member with at least ten years or more of total employment who does not withdraw employee contributions may elect to receive a deferred annuity computed as provided in section 2-1176. Should the member later choose to withdraw the member’s contributions and interest before annuity payments begin, the member shall forfeit all right to any and all benefits under this retirement system. The member may elect to withdraw employee contributions within the thirty-day period prior to the deferred annuity effective date, as outlined in section 2-1176(a)(4), (b).

 

Sec. 2-1189. Board of Trustees.

 

(a) Function. The board of trustees shall manage and direct the affairs of this division. It shall have the exclusive right to interpret this division and its provisions including but not limited to any benefit or claim for benefit hereunder, determination of creditable service, final average compensation, eligibility and termination of membership.

 

(b) Investments.

 

(1) The board of trustees shall be trustee of all funds created by this division and shall have full power to invest and reinvest them. Investments may include, but are not limited to, bonds of the United States government, State of Missouri, municipal corporations including school districts, corporate bonds, real estate mortgages, common and preferred stocks.

 

(2) No trustee nor any member of the system shall have any direct interest in the gains or profits of any investment made by the board of trustees.

 

(c) Membership. The board of trustees shall consist of nine members, including the director of human resources and director of finance. Seven shall be appointed by the mayor as follows:

 

(1) One shall be a retired member of the system.

 

(2) Four, other than the foregoing, shall be recognized business and/or civic leaders with financial backgrounds, such as investments, management of employees benefit plans, who are not employees of the city. At the mayor’s option, one of this group may be a city council person with a financial background who shall serve as an ex-officio member of the board with a right to vote.

 

(3) Two shall be active employees and members of the retirement system as recommended by the union.

 

(4) In the event that Local 42, IAFF, has two hundred (200) or more members, including retirees, participating in the Employees’ Retirement System, Local 42 will have one designated member who will be vested with the same voting rights as the other trustees.

 

The appointed members shall serve for a term of one to five years each for each initial appointment, at the expiration of which their appointed successors shall each serve a term of four years.

 

(d) Compensation. The trustees shall be reimbursed by the retirement system for all necessary expenses incurred for service on the board.

 

(e) Organization. The board of trustees shall adopt rules and regulations for administration. Each member shall be entitled to one vote. A majority of five trustees shall constitute a quorum and a majority of the quorum shall be required for any decision. The board of trustees shall elect a chairman and such other officers as it deems necessary from its membership by majority vote.

 

(f) Professional services.

 

(1) The board may engage in investment, safekeeping and other services as deemed necessary. The city attorney of Kansas City, or the city attorney’s designated assistant, may be the legal advisor.

 

(2) At least every five years an actuarial investigation of the system shall be conducted. Results shall be reported to the city council, together with recommendations to maintain the system on a sound actuarial basis.

 

(g) Records and reports. The retirement systems administrator shall maintain records of all proceedings open to public inspection. He shall annually publish a report approved by the board showing the financial transactions for the preceding year, and the financial condition of the system.

 

(h) Regulations. The board of trustees shall prescribe such rules, regulations, forms and procedures as are necessary to administer the system.

 

(i) Portability agreements. The board of trustees may enter into cooperative agreements as set forth in RSMo 105.985, providing for the transfer of funds to other public entity retirement plans and to receive transfer of funds into this plan.

 

(j) Administration. The retirement systems administrator shall be appointed by the director of human resources. The administrator shall attend all meetings of the board of trustees, but shall not have a vote. The administrator shall conduct the operations of the system in accordance with this division and the rules and regulations, directives and resolutions of the board of trustees.

 


Sec. 2-1190. Accounts.

 

(a)    Generally. The accounting and financial records of the retirement system shall be maintained in accordance with generally accepted accounting principles.

 

(b)   Maintenance. The director of finance and the director’s designated assistants shall maintain the accounting records and establish such ledger accounts as are necessary and appropriate.

 

(c)    Payments. Payments shall be made by the director of finance only upon approval of the board of trustees or in accordance with procedures specified by the board.

 

(d)   Commingling of funds. All cash and investments arising from all sources may be commingled.

 

(e)    Depositories. The board of trustees may establish such depositories for cash and investments as it deems necessary and appropriate.

 

Sec. 2-1191. Assignment of rights.

 

No member, pensioner, or beneficiary entitled to any benefit payment under the retirement system plan shall have the right to assign, alienate, transfer, encumber, pledge, mortgage, hypothecate, anticipate, or impair in any manner the member’s legal or beneficial interest, or any interest in assets of the fund, or benefits of the retirement system plan. Neither the fund nor any assets thereof shall be liable for the debts of any member, pensioner, or beneficiary entitled to any benefits under the retirement system plan, nor be subject to attachment or execution or process of any court action or proceeding. Notwithstanding any of the foregoing, benefits shall be paid in accordance with any applicable requirements of any state domestic relations order; provided that such state domestic relations orders comply with written procedures adopted by the board of trustees.

 

Sec. 2-1194. Crediting of workers' compensation benefit payments.

 

If any member of the retirement system or the member’s surviving spouse, children or dependents shall receive compensation under the Missouri Workers' Compensation Act, or similar legislation, on account of duty disability or death, benefit payments under this division for duty disability or death shall be reduced in the proportionate amount that the city's contribution rate, then being paid, bears to the total of the member and city contributions to this retirement system.

 

Sec. 2-1201. Former MAST Employees.

 

(a)    Generally. Former MAST employees who became city employees as of April 25, 2010, and who did not become members’ of the firefighters’ pension system are eligible to participate in the employee’s retirement system set forth in this division in lieu of participation in the defined contribution plan set out in Division 10. All of the provisions of Division 2 will apply to former MAST employees with the exception of Sections 2-1173 and 2-1186. For these employees, creditable service and contribution rates will be calculated differently than what is set forth in Sections 2-1173 and 2-1186.

 

(1)  Creditable service. Total creditable service for former MAST employees shall be the sum of membership service from date of employment with the City as of April 25, 2010, to last day on pay status and prior full time service with MAST as computed under this section. For these employees if membership service equals or exceeds eighteen (18) months, their prior service shall be the years and full calendar months of employment with MAST preceding April 25, 2010, exclusive of part-time service, based upon the following table:

 

Sum of Age and

Prior Service as of 4/25/10 Less

Adjustment for

Prior Retirement

Benefit

Percent of

Prior Service Credit

Over 80

100%

74 to 79

90

68 to 73

80

62 to 67

70

56 to 61

60

50 to 55

50

44 to 49

40

38 to 43

30

32 to 37

20

26 to 31

10

20 to 25

5

 

The percentage of prior service credit will not be less than 5% in any circumstance.

 

(2)  Former MAST employee member contributions. All former MAST employees shall contribute the following percentages of compensation beginning with the first pay period following April 25, 2010, and shall cease on the member’s retirement date, termination of employment or death:

 


 

Sum of Age and

Prior Service as of

4/25/10 Less

Adjustment for

Prior Retirement

Benefit

Employee

Contribution

Over 80

6.0%

74 to 79

5.0%

68 to 73

4.8%

62 to 67

4.6%

56 to 61

4.4%

50 to 55

4.2%

44 to 49

4.1%

38 to 43

4.0%

32 to 37

4.0%

26 to 31

4.0%

20 to 25

4.0%

 

  Effective April 20, 2014, all former MAST employees shall contribute the following percentages of compensation and shall cease on the member’s retirement date, termination of employment or death:

 

Sum of Age and

Prior Service as of

4/25/10 Less

Adjustment for

Prior Retirement

Benefit

Employee

Contribution

Over 80

7.0%

74 to 79

6,0%

68 to 73

5.8%

62 to 67

5.6%

56 to 61

5.4%

50 to 55

5.2%

44 to 49

5.1%

38 to 43

5.0%

32 to 37

5.0%

26 to 31

5.0%

20 to 25

5.0%

 

Section 2. That Article IX, Division 4 of the Administrative Code of Kansas City, Missouri, is hereby amended by repealing Sections 2-1251, 2-1255, 2-1258, 2-1265, 2-1266, 2-1267, 2-1268, 2-1269, 2-1270, 2-1271, 2-1276, and 2-1277, and by enacting in lieu thereof sections of like number and subject matter 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 the member’s 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 the member’s 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.

 

Spouse means the wife or husband, lawfully married in any jurisdiction, of a member

 

Surviving spouse means the spouse of a member surviving the member's death.

 

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 operations 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 42 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; except that for the first election following April 1, 2014, the initial term of the newly‑elected third member trustee from Local 42 shall be two years; and provided however, one of the original 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 the trustee’s 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 five trustees; because the non-voting member will not be counted towards determining a quorum. 

 

Sec. 2-1258. Bond for secretary of board of trustees.

 

The secretary of the board of trustees shall, before assuming the duties of that office, give a good and sufficient surety bond in an amount not less than $1,000,000.00, conditioned upon the faithful performance of the respective duties as secretary and to account for all moneys, securities and property which may come into the secretary’s hands or under the secretary’s control by virtue of such office. Such surety company shall be duly licensed to transact business in the state. The premium for such bond shall be paid out of funds of the pension system. Such bonds shall be subject to the approval of the director of finance.

 


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 the member’s 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. 2-1266. Pension benefits for certain members on retirement after 20 years of

service.

 

(a)    Monthly benefit. Any member in service prior to July 1, 1953, may, at the member’s election, retire after 20 years of creditable service. Upon such retirement, the member shall receive a monthly pension of $50.00 so long as the member may live, and upon the member’s death, the member’s spouse, if any, shall receive a pension of $25.00 per month until the spouse’s death or remarriage; provided, however, that, if there be no spouse surviving such member, and if such member leaves surviving the member any child or children under the age of 16 years at the time of the member’s decease, such child or children shall receive monthly pensions of $6.00 each until they die or attain the age of 16 years.

 

(b)   Funeral benefits. A funeral benefit of $200.00 shall be payable to the spouse of the member or to the undertaker furnishing such service, at the election of the board of trustees.

Sec. 2-1267.  Disability retirement. 

(a) Duty disability. 

(1) A member, regardless of age or years of creditable service, who becomes totally and permanently disabled, as defined in this division, prior to the time he is otherwise entitled to pension under this division, and substantially caused by actual performance of duty as a firefighter, as determined by the board of trustees in accordance with its fact finding procedures, shall be retired on the first day of the month following determination by the board of such disability. Such fact finding procedures may require review of the facts regarding the line of duty incident by a subcommittee of the board; or by an independent fact finder appointed by the board; and in consultation with a legal advisor retained by the board. The city, and any employee or official of the city, shall cooperate with the fact finding procedures, and shall divulge information as requested by the board in determining the duty disability of a member. 

(2) After five years' service, any disability caused by disease of the lungs or respiratory tract, hypertension or disease of the heart shall be presumed to have been suffered in line of duty, if the member successfully passed a physical examination within five years prior to date of application, unless the contrary be shown by competent evidence. 

(b) Nonduty disability. 

(1) A member under the age of 65 years with ten or more years of creditable service, who becomes totally and permanently disabled, as defined in this division, prior to the time he is otherwise entitled to a pension under this division, shall be retired on the first day of the month following determination by the board of such disability. 

(2) No benefit shall be payable if the disability is caused while engaging in any occupation or performing any work for remuneration or profit while in service of another employer or in self-employment. 

(3) Should a member be disabled while serving another employer, or in self-employment, he shall be treated as a terminated member. 

(c) Determination of disability status.  A member shall be deemed to have become totally and permanently disabled when the member is in a state or condition of disability which presumably prevents for the member from performing the duties of a firefighter for the rest of the member’s life. Such disability, whether duty or nonduty, must not have been contracted, suffered or incurred while the member was engaged in or result from having been engaged in a criminal act or enterprise, or result from habitual drunkenness or addiction to narcotics or from self-inflicted injury, or from disability incurred while in the service in the armed forces of the United States or any foreign country.   

(d) Authority of board of trustees.  The board of trustees in its sole judgment shall determine whether the status of total and permanent disability exists, and its determination shall be binding and conclusive, subject to any right of review provided by this division. In making such determination, the board of trustees shall rely upon the findings of a medical board, as defined in this division, of three physicians. The written opinion of any two of such physicians shall be required. The medical board shall be appointed by the board of trustees, and the expenses of an examination by the medical board shall be paid from the funds of the retirement system.   

(e) Recovery from disability.  From time to time, the board of trustees shall have the right to require proof of continuing disability, which may include: 

(1) Further examination by the medical board; or 

(2) Submission of additional information by the member regarding employment and other personal activities.  

The board may follow its fact finding procedures in developing proof of continued disability. If a member fails to respond to board requests for evidence of a continuing disability, or fails to submit to further medical examination, the board may terminate payment of disability retirement payments. If the board of trustees determines that disability no longer exists, it shall promptly terminate payment of the disability retirement payments. In that event, the member shall be considered terminated from the retirement system unless the member promptly returns to full-time service as a firefighter. If the member promptly returns to service as a firefighter following termination of disability, the period of disability retirement will not be counted as creditable service for determining further benefits under this division, but such period of disability shall not be construed as interrupting continuous creditable service. All disability retirement payments received shall be charged against the member's accumulated contributions as defined in this division for the purpose of determining the accumulated contributions under this plan.   

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, the member’s surviving spouse shall receive a pension calculated as if the member retired on the date of the member’s 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 the member’s 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. 2-1269. Payments when member is discharged or resigns.

 

Should a member cease to be a firefighter by being discharged or by resignation, or in any other manner except death or retirement, the member shall be paid on demand the amount of the member’s accumulated contributions; and such payments shall be in lieu of any and all other benefits to which the member might otherwise become entitled under this article; provided, however, that if such discharge, resignation or other termination occurs within the first year of employment a service charge of ten percent of the amount withdrawn shall be withheld, if such termination occurs within the second year of employment eight percent of the amount withdrawn shall be withheld, if within the third year six percent shall be withheld, if within the fourth year four percent shall be withheld, and if within the fifth year two percent shall be withheld, and if such termination occurs after the fifth year of employment no service charge shall be made. All such sums so withheld shall be credited to and remain the property of the pension fund.

 

Sec. 2-1270. Deferred pension after ten years of service.

 

A member with not less than ten years of creditable service, who may be discharged or who may voluntarily resign, may waive the return of the member’s contributions and elect in lieu thereof to receive an annual pension beginning at the age of 50 years equal to two and one-half percent of the member’s average final compensation, as defined in section 2-1251, multiplied by the number of years of creditable service; provided that in no case shall such pension be more than 62.5 percent of the average final compensation of such member.

 

The city has the right to discontinue or terminate the pension system plan in whole or in part. The rights of all affected members to benefits accrued to the date of termination, partial termination, or discontinuance, or cessation of contributions by an employer shall be 100 percent vested and nonforfeitable to the extent funded.

 

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 the member’s surviving spouse or children or any other person except the return of the member’s accumulated contributions, with interest, to the member’s estate or to the member’s 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. 2-1276. Assignment of rights.

 

No member, pensioner, or beneficiary entitled to any benefit payable under the pension system plan shall have the right to assign, alienate, transfer, encumber, pledge, mortgage, hypothecate, or impair in any manner the member, pensioner, or beneficiary’s legal or beneficial interest, or any interest in assets of the fund, or benefits of the pension system plan. Neither the fund nor any assets thereof shall be liable for the debts of any member, pensioner, or beneficiary entitled to any benefits under the pension system plan, nor be subject to attachment or execution or process of any court action or proceeding. Notwithstanding any of the foregoing, benefits shall be paid in accordance with any applicable requirements of any state domestic relations order; provided that such state domestic relations orders comply with written procedures adopted by the board of trustees.

 

Sec. 2-1277. Correction of errors in payments.

 

Should any change or error in records result in any member or beneficiary receiving from the pension system more or less than the member or beneficiary would have been entitled to receive had the records been correct, the board of trustees shall correct such error as far as practicable, and shall adjust the payments in such manner that the benefit to which the member or beneficiary was correctly entitled shall be paid.

 

Section 3. That Article IX, Division 5 of the Administrative Code of Kansas City, Missouri, is hereby amended by repealing Sections 2-1303 and 2-1304, and by enacting in lieu thereof sections of like number and subject matter to read as follows:

 

Sec. 2-1303. Payments during temporary disability.

 

(a)    When an employee is absent from duty and unable to perform the duties of the employee’s employment with the city because of an injury sustained arising out of and in the course of employment, such employee shall be paid compensation for that period of temporary total disability, as provided under the Missouri Workers' Compensation Law, which payments shall be subject to the right of subrogation provided under RSMo 287.150, as amended, and the credit provided under RSMo 287.100.

 

(b)   A member of the firefighting force receiving compensation for temporary total disability under subsection (a) of this section may elect to enter into an agreement with the city which will permit such employee to receive supplemental payments up to the employee’s full wages during the period of temporary total disability in addition to that compensation provided by law. Such supplemental wages shall be treated by the agreement as an advance of any additional benefits the employee may be entitled to receive as a result of the injury, and the city will be entitled to take credit for the wages against such additional benefits.

 

Sec. 2-1304. Authority of city counselor to settle claims.

 

The city counselor may adjust, settle or compromise any action, cause of action, account, award, claim, claim for compensation, death or funeral benefit, demand, dispute, disability rating, request or demand for medical aid or any other matter in which the city is concerned under the Workers' Compensation Law now existing or which may hereafter arise and not involving or requiring an additional lump sum payment by the city in excess of $25,000.00, and with approval of the risk management committee may do likewise in matters not involving or requiring additional lump sum payment in excess of $50,000.00; provided that the money for such purposes generally has been appropriated and is available therefor.

 

Section 4. That Article IX, Division 6 of the Administrative Code of Kansas City, Missouri, is hereby amended by repealing Sections 2-1332, 2-1334, 2-1335, 2-1338, 2-1339, and 2-1341, and by enacting in lieu thereof sections of like number and subject matter to read as follows:

 

Sec. 2-1332. Eligibility; retirement benefits.

 

(a) Generally. Each member of the plan, as the term member is fully defined in section (f), shall receive an annuity payable until the first day of the month following death and  beginning 1) the first day of the month following attainment of age 60; or 2) the later of the expiration of the member’s last term of office or the date of attaining mandatory retirement age if that date occurs during a term of office.  Nothing herein shall be construed as preventing or limiting an elected official’s ability after serving one elective term to retire prior to the completion of a term of office and receive an annuity computed in accordance with the retirement date selected by the elected official.

 

(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. For those elected officials whose service terminates on or after November 1, 2000, the annuity shall be 2.22 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 70 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:

 

(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.

 

(2) Amount of Adjustment. The adjustment shall be three (3%) percent, each year, non compounded.

 

(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 the member’s age and years of creditable service equal or exceed 80, without reduction of benefits as calculated in this subsection.

 

(f) Membership.

 

(1) Members of the Council, including the Mayor.

 

(a) Exclusion from plan. Unless otherwise provided, no members of the Council, including the Mayor, who commence a term of office after April 30, 2011 shall participate in this plan for any service after April 30, 2011. The City will, however, for those nonmembers, provide a Kansas City Elected Officials Money Purchase Plan for their service after April 30, 2011, as set forth in Section 2, Article IX, Division 9.  

 

(b) Exception. Members of the Council, including the Mayor, elected on March 27, 2007 for a term beginning May 1, 2007 and also elected on March 22, 2011 for a term beginning May 1, 2011 are members of this plan as long as they are continuously a member of the council, including the mayor.

 

(2) Judges of the Municipal Court.

 

(a) Continuous service on and after May 1, 2011. Judges of the Municipal Court, retained on March 22, 2011 for a term beginning May 1, 2011 are members of this plan or any other plan which they previously joined. No Judges of the Municipal Court appointed to the Court by the Mayor and Council on or after May 1, 2011 shall participate in this plan for any service.

 

(b) Appointment on and after May 1, 2011. Judges of the Municipal Court appointed on or after May 1, 2011 are not members of this plan. The City will, however, for those nonmembers, provide a Kansas City Elected Officials Money Purchase Plan for their service after April 30, 2011, as set forth in Section 2, Article IX, Division 9.  

 

(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 to either the member’s retirement date or the member’s attaining mandatory retirement age, whichever occurs first. If a member of the employees' retirement system becomes a member of this elected officials' retirement system maintaining a continuous service, the member’s employees' retirement system member contributions and interest shall not be refunded, but shall be transferred to the member’s 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 the member’s spouse, to withdraw all or a portion of the member’s 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 $200.00 monthly retiree health insurance subsidy shall be payable to all retired members effective November 1, 2000.

 

(k) 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.

 

(l) Spouse. For purposes of this division, spouse is defined as a husband or wife, lawfully married in any jurisdiction, of the member. Surviving spouse is defined as the spouse of a member surviving the member’s death.

 

Sec. 2-1334. Termination benefits.

 

(a)    Generally. Upon termination of office for any lawful reason other than death, a member of the retirement system established by this division shall be paid all the member’s accumulated contributions with interest, and upon such payment all benefits and rights of the member and the member’s beneficiaries shall terminate.

 

(b)   Deferred annuity. Upon termination of office for any lawful reason other than death, a member who has completed one or more elective terms as now constituted who does not withdraw the member's contributions may elect to receive a deferred annuity as provided in section 2-1332. Should the member later choose to withdraw the member's contributions and interest before annuity payments begin, the member shall forfeit all rights to any and all benefits. The member may elect to withdraw the member's contributions within the thirty-day period prior to the deferred annuity effective date, as outlined in section 2-1332(i).

 

Sec. 2-1335. Deduction of member contributions from salaries; pickup of member

contributions by employer.

(a)    Compensation means the basic monthly wage or salary paid an elected official 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.

 

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 elected officials 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 elected officials 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.

 

(b)   Member contributions. Each elected official shall contribute, by means of payroll deductions, five percent of the member’s base rate of compensation until the first pay period following June 6, 1998, when the contribution rate thereafter shall be four percent of compensation. For the pay period beginning April 20, 2014, and thereafter, each member of the plan shall contribute, by means of payroll deductions, five percent of compensation.

 

(c)    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 division, commencing with the pay period ending May 11, 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.

 

(d)   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 2-1333, 2-1334 and 2-1339, including amendments thereto. Member contributions picked up by the employer shall be paid to the retirement system administrators as provided in section 2-1337. Such contributions shall be credited to a separate account within the member's individual account so that amounts contributed by the member before the pay period ending May 11, 1986, may be distinguished from the member contributions picked up by the employer. Interest shall be added annually to members' individual accounts.

 

(e)    Member contributions picked up by the employer shall be deemed earnings subject to the city earnings tax.

 

(f)    The official shall not have the option of choosing to receive the contributed amounts directly instead of having them paid by the employer to the retirement system.

 

(g)   Trust. The assets of the retirement system shall be held in trust by the board of trustees. The trust is intended to be tax-exempt under section 501(a) of the Internal Revenue Code and the pension system plan is intended to be qualified under section 401(a) of the Internal Revenue Code.

 

All payments made by elected officials to the retirement system fund and such other payments that are made to the fund on behalf of employers and members, and all other money or property that lawfully becomes part of the trust, together with the income, gains and all other increments shall be held, managed and administered in trust. The trust shall be known as the Employees' Retirement System of the City of Kansas City, Missouri Trust. The trustees shall perform the duties, responsibilities and obligations and in accordance with section 2-1137.

 

It shall be impossible by operation of the trust or by its natural termination, by power of revocation or amendment, by the happening of any contingency, by collateral arrangement or by any other means, for any part of the corpus or income of the trust or any funds contributed to the trust to be used for, or diverted to purposes other than the exclusive benefit of members, for members, their beneficiaries or dependents prior to all obligations having been satisfied or provided for. No part of net earnings of the trust shall inure (other than benefit payments) to the benefit of any employer or individual; provided, however, a contribution made by an employer under a mistake of fact may be returned to the employer if the trustees so direct provided the repayment is not prohibited under applicable law and will not adversely affect the tax-exempt status of the trust.

 

Sec. 2-1338. Removal or resignation of elected official from office.

 

Any elected official who vacates office, as defined in section 6 of the Charter, or is expelled from office pursuant to the provisions of section 9 of the Charter, or is recalled pursuant to the recall provisions of article XVII of the Charter, or resigns office pursuant to the provisions of section 440 of the Charter, shall receive no retirement benefits whatsoever under the provisions of this division but shall receive only the refund of the member's accumulated contribution with interest.

 

Sec. 2-1339. Disability retirement prior to May 1, 1996.

 

A member who, prior to May 1, 1996, became totally and permanently disabled, as defined in this section, shall be entitled to retire on the first day of the month following termination by the board of such disability, provided that, within at least six months prior to May 1, 1996, the member receives medical treatment which is, or becomes, supporting evidence that the member is entitled to disability pension payments.

 

(1)               Amount. Elected officials who are eligible and totally and permanently disabled, as defined in this section, shall receive a disability annuity computed as follows:

 

a.                   Duty disability: 50 percent of final average compensation, but in no event less than the amount the elected official would be entitled to as an annuity if the member retired on the same date with equivalent age and creditable service.

 

b.                  Nonduty disability: 30 percent of final average compensation, but in no event less than the amount the elected official would be entitled to as an annuity if the member retired on the same date with equivalent age and creditable service.

 

The annuity shall cease upon the first day of the month following death, except that a surviving spouse or heir shall be entitled to death benefits as computed under section 2-1333.

 

(2)               Eligibility.

 

a.                   Duty disability shall mean total and permanent disability directly due to and caused by actual performance of employment with the city. Elected officials eligible for retirement as provided in section 2-1332(a) shall be ineligible for duty disability retirement.

 

b.                  Nonduty disability shall mean total and permanent disability arising from any other cause than duty disability. At least ten years' creditable service is required. Elected officials eligible for retirement as provided in section 2-1332(a) shall be ineligible for nonduty disability retirement.

 

(3)               Definition and determination of disability.

 

a.                   Total and permanent disability shall mean a state or condition which presumably prevents for the rest of a member's life the member engaging in any occupation or performing any work for remuneration or profit.

b.                  Such disability, whether duty or nonduty, must not have been contracted, suffered or incurred while the employee was engaged in or result from having been engaged in a criminal act or enterprise, or result from habitual drunkenness or addiction to narcotics or from self-inflicted injury, or from disability incurred while in the service of the armed forces of the United States or any foreign country.

 

c.                   No benefit shall be payable if the disability results from or is incurred while the member is engaged in self-employment or in any occupation or performing any work for remuneration or profit not in the service of an employer, as defined in this division.

 

d.                  The board of trustees shall make the determination as to disability, basing its findings on the evidence presented, including at least two written opinions by qualified physicians. The board shall appoint the physicians and the examination expenses shall be paid from this retirement system fund.

 

e.                   From time to time, the board of trustees shall have the right to require proof of continuing disability, which may include further examination.

 

(4)               Recovery from disability.

 

a.                   Should the board of trustees determine that disability no longer exists, it shall terminate the disability annuity.

 

b.                  If the member immediately returns to work with the city, the member shall again earn creditable service beginning on the first day of the month following such return. Creditable service prior to disability retirement shall be reinstated. No creditable service shall accrue while receiving a disability annuity and all such annuity payments made shall be charged to the extent possible against the member's accumulated contributions and interest at date of return to work.

 

c.                   Should the member not return to work with the city, the member shall be treated as a terminated employee. All annuity received shall be charged against the member's accumulated contributions and interest.

 

Sec. 2-1341. Assignment of rights.

 

No member, pensioner, or beneficiary entitled to any benefit payable under the retirement system plan shall have the right to assign, alienate, transfer, encumber, pledge, mortgage, hypothecate, anticipate or impair in any manner the member, pensioner or beneficiary’s legal or beneficial interest, or any interest in assets of the fund, or benefits of the pension system plan. Neither the fund nor any assets thereof shall be liable for the debts of any member, pensioner, or beneficiary entitled to any benefits under the retirement system plan, nor be subject to attachment or execution or process of any court action or proceeding. Notwithstanding any of the foregoing, benefits shall be paid in accordance with any applicable requirements of any state domestic relations order; provided that such state domestic relations orders comply with written procedures adopted by the board of trustees.

 

Section 5. That Article IX, Division 7 of the Administrative Code of Kansas City, Missouri, is hereby amended by repealing Sections 2-1363, 2-1364, 2-1365 and 2-1366, and by enacting in lieu thereof sections of like number and subject matter to read as follows:

 

Sec. 2-1363. Adoption of plans.

 

(a)    Authorization to adopt plans. The board, on behalf of the city and pursuant to the program is authorized to adopt, continue, cancel or allow to lapse a plan or plans, including the plans that the city has contracted for as of the date of the current amendments to sections 2-1361 through 2-1365, subject to the following restrictions:

 

(1)               No city funds are to be contributed pursuant to the program.

 

(2)               The city shall not be responsible for any loss due to the investment or failure of the investment of funds and assets held pursuant to the program, nor shall the city be required to replace any loss whatsoever which may result from such investments, or failure to make investments.

 

(3)               All contributions pursuant to this program, together with interest, accumulations and increments thereon, shall be contributed to and held under the trust for the exclusive benefit of the participants until such time as such funds or assets are distributed to participants and beneficiaries in accordance with the provisions of a plan.

 

(b)   Salary reduction agreements. The director of finance of the city, or the director’s duly authorized representative, is hereby authorized to enter into salary reduction agreements with an employee, whereby an employee designates a portion of the employee’s failure compensation to be deducted by the city and transferred to the trust to provide tax sheltered retirement benefits to the employee upon the employee’s retirement pursuant to a plan.

 

Sec. 2-1364. Administration of program.

 

(a)    The board shall administer the program. The responsibilities and authority of the board shall be to:

 

(1)               Maintain a plan or plans whereby participants may direct and control the investment of their contributions, together with accumulated earnings, among various investment options and select and make available such investment options.

 

(2)               The members of the board may be insured against fiduciary and liability claims relating to program administration by insurance coverage on their behalf. The premium expense of such coverage shall be paid, at the election of the city, either by the city or from funds of the trust.

 

(3)               Establish a budget for the costs of the administration of the program. Such expenses shall be paid from the trust and charged to the accounts of participants.

 

(4)               Pay benefits pursuant to the plans and related taxes from the trust consistent with the provisions of the plans.

 

(5)               Obtain, by employment or contract, the services necessary to administer the program, including actuarial, custodial, investment and legal services.

 

(6)               Procure and dispose of goods and property of the trust necessary to administer the program.

 

(b)   The director of human resources of the city shall appoint a program administrator/secretary. The program administrator/secretary shall attend all meetings of the board and shall conduct the program in accordance with the board's directives. The program administrator/secretary shall take and retain all meeting records.

 

(c)    The director of finance of the city, or the director’s duly authorized representative, shall maintain accounting and financial records of the program and shall establish such ledger accounts as are necessary and appropriate to the efficient operation of the program. The accounting and financial records of the program shall be maintained in accordance with generally accepted accounting principles, consistently applied.

 

(d)   The judgments of the board made in administration of the program shall be even handed, treating all persons in similar circumstances alike.

 

(e)    The board shall have sole discretionary responsibility for the operation, interpretation, and administration of the program and for determining eligibility for program benefits. Any action taken on any matter within the discretion of the board shall be final, conclusive and binding on all parties. In order to discharge its duties hereunder, the board shall have the power and authority to adopt, interpret, alter, amend or revoke rules and regulations necessary to administer the program, to delegate ministerial duties and to employ such outside professionals as may be required for prudent administration of the program. A member of the board who is otherwise eligible may participate in the program, but shall not be entitled to make decisions solely with respect to the member’s own participation and benefits under the program.

 

(f)    Notwithstanding any other provision of the program to the contrary, all or any part of the benefits of a former participant shall, instead of being distributed in accordance with the terms of the plans, be transferred to another eligible deferred compensation plan in which the former participant has become a participant, if (i) the plan receiving such benefits provides acceptance of such transfers; and (ii) the participant provides written direction to the board to make such transfer. The program shall also accept the transfer of amounts previously deferred by a participant under ether eligible deferred compensation plan.

 

(g)   The board shall establish and maintain accounts on behalf of each participant pursuant a plan. Such participant accounts shall be valued at fair market value as of the last day of the program year and such other dates as are necessary for the proper administration of the program, and each participant under the plan shall receive a written accounting of the participant’s account balance following such valuation each participant's account balance shall reflect the participant’s aggregate salary deferrals (and/or transfer) amounts and any earnings or losses attributable to such amounts, and shall be reduced by administrative, investment and other fees necessary for the administration which are not paid by the city.

 

(h)   A participant may request that the participant’s salary deferrals be allocated among the available investment options established by the board. The initial allocation request may be made at the time of enrollment. Once made, an investment allocation request shall remain in effect for all subsequent deferrals until changed by the participant. A participant may change the participant’s investment allocation by submitting a written request to the board on such form as may be required by the board. Such changes shall become effective as soon as administratively feasible after the board receives such written request. Although the board intends to invest deferrals according to the participant's requests, it reserves the right to invest deferrals without regard to such requests.

 

Sec. 2-1365. Establishment of trust and board of trustees.

 

(a) Trustee. The board shall be the trustee of all funds created pursuant to the program and shall, subject to the provisions of section 2-1364(a)(1) set forth above, have full power to invest and reinvest them. Investments may include, but are not limited to, bonds of the United States Government, State of Missouri, municipal corporations including school districts, corporate bonds, real estate mortgages and common and preferred stocks.

 

(b) Membership. The board of trustees shall consist of nine members, including the director of human resources of the city or authorized representative and the director of finance of the city or authorized representative. The city manager shall appoint, for one year terms each, two trustees recommended by Local 42, International Association of Fire Fighters, two trustees recommended by Local 500, American Federation of State and Municipal Employees, one trustee recommended by Local 3808, International Association of Fire Fighters, and two trustees from the general employee population. Each trustee other than the director of human resources of the city and the director of finance of the city must be a participant.

 

(c) Compensation. The board members shall not receive compensation for their services but shall be reimbursed by the general funds of the trust for all necessary expenses incurred on behalf of the program and the trust.

 

(d) Organization. The board shall prescribe such rules, regulations, forms and procedures as are necessary to administer the trust. Each member shall be entitled to one vote. A majority of four trustees shall constitute a quorum and a majority of a quorum shall be required for any decision. The board shall elect a chairman and such other officers as it deems necessary from its membership by majority vote.

 

(e) Asset transfer. On or before December 31, 1998, the city shall cause to be transferred to the trust all assets held by the city which fund all plans.

 


Sec. 2-1366. Assignment of rights.

 

Neither the participant, nor the participant’s beneficiary, nor any other designee, shall have any right to commute, sell, assign, transfer, encumber or otherwise convey the right to receive any payments under the Program, which payments and rights thereto are expressly declared to be nonassignable and nontransferable. In the event of any attempted assignment or transfer, the City shall have no further liability under the Program. Payments shall not be subject to attachment, garnishment or execution, or be transferable by operation of law in the event of bankruptcy or insolvency, except to the extent otherwise provided by law. Notwithstanding any of the foregoing benefits shall be paid in accordance with the applicable requirements of any legal domestic relations order.

 

Section 6. That Article IX, Division 8 of the Administrative Code of Kansas City, Missouri, is hereby amended by repealing Sections 2-1390, 2-1391 and 2-1392, and by enacting in lieu thereof sections of like number and subject matter to read as follows:

 

 Sec. 2-1390.  Board of Trustees.

(a) Established; membership.  There is hereby established a board of trustees which shall manage and direct the affairs of the healthcare system. The board of trustees shall consist of at least 11 members appointed by the Mayor as follows:

(1) Two members of the City Council, to serve during their term of office.

(2) The City Manager or designee.

(3) Two members of Local 500 of the American Federation of State, County and Municipal Employees, one of whom shall be an active employee and one of whom shall be a retiree designated by Local 500 for appointment.

(4) Two members from each of the unions representing employees of the fire department. Local 42 of the International Association for Fire Fighters shall designate two members for appointment, one of whom shall be an active employee and one of whom shall be a retiree; Local 3808 of the International Association for Fire Fighters shall designate two members for appointment, one of whom shall be an active employee and one of whom shall be a retiree.

(5) Two non-unionized City employees, one of whom shall be an active employee and one of whom shall be a retiree selected from a group of at least three active and a group of at least three retired employees recommended by the City Manager to the Mayor for appointment.

In the event that the Mayor determines that one or more of the members designated by the employee groups are unable or unfit to serve, then the affected employee group shall provide another name or names as provided for above

The board of trustees shall elect from among its members a chair and a vice-chair.

In the event that other entities become part of this health care trust, the board may make recommendations to the City Council to amend the composition of the board of trustees to provide for comparable board representation from such joining entities.

One-half of the active employee members and one-half of the retired employee members shall serve an initial term of two years. All other employee members shall serve initial terms of four years. Each successor member shall serve for a term of four years. Any member whose term of service has expired is permitted to continue the member’s service until such time as a successor has been appointed to fill the vacancy. Notwithstanding the foregoing, any person who ceases to meet the eligibility criteria for the seat to which the member was appointed shall immediately forfeit membership status.

(b) Ex-officio membership. The Director of Human Resources and Director of Finance shall serve as ex-officio members of the board of trustees. They shall be entitled to attend and participate in any meeting of the board but shall not be authorized to vote on any matter unless the members present and casting votes are equally divided. Ex-officio members shall not be included within the total membership for purposes of determining the existence of a quorum.

(c) Organization.  The board of trustees shall adopt rules and regulations for its administration. Each member shall be entitled to one vote. A super majority of sixty percent of the total appointed and serving membership shall constitute a quorum and a simple majority of the quorum shall be required for any decision.

(d) Determination of Benefits. The board of trustees shall have the exclusive right, subject to the availability of sufficient funds within the healthcare trust fund, to prescribe the healthcare benefits to be included within any healthcare plan offered to City employees and retirees and consistent with any approved labor agreements.

  (e) Investments.   

(1) The board of trustees shall be trustee of all funds created by this division and shall have full power to invest and reinvest them. Investments may include, but are not limited to, bonds of the United States government, State of Missouri, municipal corporations including school districts, corporate bonds, real estate mortgages, common and preferred stocks.

(2) No trustee shall have any direct interest in the gains or profits of any investment made by the board of trustees.

(f) Professional services.   

(1)   The board of trustees may engage investment, safekeeping, advisory, legal and other professional services as it deems necessary.

(2)   At least every five years an actuarial analysis of the healthcare system shall be conducted. Results shall be reported to the city council, together with recommendations to maintain the system on a sound actuarial basis.

(g)  Regulations.  The board of trustees shall have the exclusive right to prescribe such rules, regulations, forms and procedures as are necessary to administer the healthcare system. 

(h) Day-to-day Administration. The board of trustees shall appoint an administrator of the healthcare system. The administrator may be an active City employee. The administrator shall attend all meetings of the board of trustees, but shall not have a vote. The administrator shall conduct the operations of the healthcare system in accordance with this division and the rules and regulations, directives and resolutions of the board of trustees. 

 (i)     Records and reports.  The healthcare system administrator shall maintain records of all proceedings. The administrator shall annually publish a report approved by the board of trustees showing the financial transactions for the preceding year, and the financial condition of the healthcare system. 

 (j)     Compensation.  The trustees shall be reimbursed by the healthcare system for all necessary expenses incurred for service on the board. 

 (k)     Transition from current system. The board of trustees shall confer with the City’s Benefits and Insurance Committee as established by Ordinance No. 080822 in order to complete the transition to a self-funded healthcare plan by May 1, 2010, to insure consistent benefit level and plan options and shall have the power to procure any goods and services necessary to complete the transition, provided the availability of funds.

Sec. 2-1391.  Accounts.

  (a)    Generally.  The accounting and financial records of the healthcare system shall be maintained in accordance with generally accepted accounting principles. 

(b)   Maintenance.  The director of finance or the director’s designee shall maintain the accounting records and establish such ledger accounts as are necessary and appropriate. 

(c)    Payments.  Payments shall be made by the director of finance only upon approval of the board of trustees or in accordance with procedures specified by the board and as authorized by the administrator. 

(d)   Commingling of funds.  All cash and investments arising from all sources may be commingled among the board’s funds. 

(e)    Depositories.  The board of trustees may establish such depositories for cash and investments as it deems necessary and appropriate. 

Sec. 2-1392.  Assignment of rights.

No City employee or retiree entitled to any benefit payment under the healthcare trust fund shall have the right to assign, alienate, transfer, encumber, pledge, mortgage, hypothecate, anticipate, or impair in any manner the employee or retiree’s legal or beneficial interest, or any interest in assets of the trust, or benefits of the healthcare system. Neither the fund nor any assets thereof shall be liable for the debts of any City employee or retiree entitled to any benefits under the retirement system plan, nor be subject to attachment or execution or process of any court action or proceeding.

Section 7. That Article IX, Division 9 of the Administrative Code of Kansas City, Missouri, is hereby amended by repealing Section 2-1395.4, 2-1395.5, and 2-1395.11, and by enacting in lieu thereof sections of like number and subject matter to read as follows:

 

Sec. 2-1395.4. Assignment of rights.

 

Neither the Participant, nor the participant’s beneficiary, nor any other designee, shall have any right to transfer, sell, assign, pledge transfer, encumber, mortgage or otherwise convey the right to receive any payments under the Program, which payments and rights thereto are expressly declared to be nonassignable and nontransferable. In the event of any attempted assignment or transfer, the City shall have no further liability under the Program. Payments shall not be subject to attachment, garnishment or execution, or be transferable by operation of law in the event of bankruptcy or insolvency, except to the extent otherwise provided by law. Notwithstanding any of the foregoing benefits shall be paid in accordance with any applicable requirements of any state domestic relations order; provided that such state domestic relations orders comply with written procedures adopted by the Board of Trustees.

 

Sec. 2-1395.5. Miscellaneous.

 

(a) Limitation of Rights; Employment Relationship. Neither the establishment of this Program nor any modification thereof, nor the creation of any fund or account, nor the payment of any benefits under the Plan, shall be construed as giving a Participant or any other person legal or equitable rights against the City. In no event shall the terms of employment or independent contractor relationship of any participant be modified or any way be affected by the Program.

 

(b) Representations. The City does not represent or guarantee that any particular federal or state income, payroll, personal property or other tax consequences will result from participation in this Program.

 

(c) Severability. If a court of competent jurisdiction holds any provision of this Program to be invalid or unenforceable, the remaining provisions of the Plan shall continue to be fully effective.

 

(d) Amendment and Termination. The City may amend the provisions of this Program at any time; provided, however, that no amendment, including current amendments to these Ordinances, shall affect the rights of Participants or their Beneficiaries to the receipt of payment of Benefits, to the extent of any Compensation deferred at the time of the amendment, as adjusted for investment experience under this Program prior to and subsequent to the amendment. The City may terminate or discontinue the Program at any time without liability for such termination or discontinuance.

 

Sec. 2-1395.11. Death benefits.

 

Death before retirement.  If death of a Participant occurs before termination of employment, the entire amount of the Participant’s account in the Plan shall be distributed to the beneficiary. If lawfully married in any jurisdiction at the time of death, the spouse shall be beneficiary unless the spouse consents to the designation of an alternative beneficiary.

 

Section 8. That Article IX, Division 10 of the Administrative Code of Kansas City, Missouri, is hereby amended by repealing Section 2-1396.4, 2-1396.10, and 2-1396.11, and by enacting in lieu thereof sections of like number and subject matter to read as follows:

 

Sec. 2-1396.4. Assignment of rights.

 

Neither the Participant, nor the participant’s beneficiary, nor any other designee, shall have any right to transfer, sell, assign, pledge transfer, encumber, mortgage or otherwise convey the right to receive any payments under the Program, which payments and rights thereto are expressly declared to be nonassignable and nontransferable. In the event of any attempted assignment or transfer, the City shall have no further liability under the Program. Payments shall not be subject to attachment, garnishment or execution, or be transferable by operation of law in the event of bankruptcy or insolvency, except to the extent otherwise provided by law. Notwithstanding any of the foregoing benefits shall be paid in accordance with any applicable requirements of any state domestic relations order; provided that such state domestic relations orders comply with written procedures adopted by the Board of Trustees.

 

Sec. 2-1396.10. Termination benefits.

 

Generally.  Upon termination of employment, a Participant in the Plan shall be paid the participant’s account in the Plan in a form of distribution permitted under the Plan.

 


 

Sec. 2-1396.11. Death benefits.

 

Death before retirement.  If death of a Participant occurs before termination of employment, the entire amount of the Participant’s account in the Plan shall be distributed to the beneficiary. If lawfully married in any jurisdiction at the time of death, the spouse shall be beneficiary unless the spouse consents to the designation of an alternative beneficiary.

 

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Approved as to form and legality:

 

 

___________________________

Saskia C.M. Jacobse

Associate City Attorney