ORDINANCE NO. 120189
Amending Chapter 2, Code of
Ordinances, by repealing Section 2-1264, “Conditions for Retirement” and
Section 2-1265, “Pension benefits generally”, and enacting in lieu thereof, new
sections of like number and subject matter.
WHEREAS, what is
commonly referred to as "The Firefighters’ Pension System" is
codified as Division 4, entitled " Pensions for Firefighters", of
Article IX of Chapter 2, Code of Ordinances; and
WHEREAS, the
Firefighter’s Pension System currently only allows a member who has 25 or more
years of service to elect to take voluntary retirement and, upon voluntary
retirement, to elect to withdraw all or a portion of his accumulated
contributions and receive a reduced pension; and
WHEREAS, under
the Firefighter’s Pension System, a surviving spouse of a member receives a
pension only if the member first satisfies the conditions of retirement; and
WHEREAS, the
Council recognizes that this requirement of 25 or more years of service to be
eligible for voluntary retirement is not in the best interests of the City
because it limits those willing to serve as Fire Chief; NOW, THEREFORE,
BE IT ORDAINED
BY THE COUNCIL OF KANSAS CITY:
Section 1. That
Chapter 2, Article IX, Division 4, Code of Ordinances of the City of Kansas
City, Missouri, is hereby amended by repealing Section 2-1264, “Conditions for
retirement” and Section 2-1265, “Pension benefits generally” and enacting in
lieu thereof, new sections of like number and subject matter, to read as
follows:
Sec. 2-1264. Conditions for retirement.
(a) Voluntary
retirement. Any member in service as a firefighter for compensation or on
authorized sick leave not exceeding one year, or who shall hereafter enter
service as a firefighter, may retire when he has completed 25 or more years of
creditable service or, if he first enters the pension system as Fire Chief and
retires as Fire Chief, when he has completed 10 or more years of creditable
service.
(b) Disability
retirement. If a member, while a participant in this plan, contracts an
illness or suffers an accident rendering him permanently and totally disabled,
he shall be entitled to pension benefits in accordance with the terms and
provisions of section 2-1267.
(c) Application
for retirement. Any member eligible for retirement as provided in this
division may retire upon written application to the board of trustees, which
shall establish the retirement date, but not later than the first day of the
month following the happening of the event set out in this division as a
condition for the type of retirement.
Sec. 2-1265. Pension
benefits generally.
(a) Amount
of retirement pension. Effective for retirement on or after December
31, 1999, upon retirement, a member shall receive a monthly pension equal to
two and one-half percent of the member's average final compensation times the
number of years and months of creditable service, not to exceed 80 percent of
the member's average final monthly compensation.
(b) Optional
forms of payment.
(1) Withdrawal
of contributions.
a. A member retiring with 25 or more years of creditable service
or a member who first enters the pension system as Fire Chief and retires as
Fire Chief with 10 or more years of creditable service may elect to withdraw
all or a portion of his accumulated contributions and receive a reduced
lifetime pension. This election will not affect the amount of the surviving spouse's
pension or the cost-of-living adjustment.
b. The pension calculated in subsection (a) will be reduced by
applying factors to the amount withdrawn as adopted by the board of trustees
upon the recommendation of the pension system's consulting actuary.
c. The member's spouse, if any, must sign appropriate forms
attesting consent.
(2) Joint
options.
a. A member with 25 or more years of creditable service or a
member who both first enters the pension system as Fire Chief and retires as
Fire Chief with 10 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. This election will not affect the amount of the
cost-of-living adjustment.
e. 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 70 1/2 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 70 1/2 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. 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) 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. The annuitant
must:
a.
Have retired with at least 25 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.
(h) 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.
(i) 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.
(j) 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.
(k) 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.
_____________________________________________
Approved
as to form and legality:
_________________________________
Galen P. Beaufort
Senior Associate City
Attorney