HomeMy WebLinkAboutO-2011-008 IRS Compliance Amendment Police Fire Pension ORDINANCE NO. 2011-008
AN ORDINANCE OF THE CITY OF DANIA BEACH, FLORIDA,
AMENDING THE CODE OF ORDINANCES RELATING TO THE POLICE
AND FIREFIGHTERS' RETIREMENT SYSTEM TO PROVIDE FOR
COMPLIANCE WITH THE INTERNAL REVENUE CODE; PROVIDING FOR
SEVERABILITY; PROVIDING FOR CONFLICTS; FURTHER, PROVIDING
FOR AN EFFECTIVE DATE.
WHEREAS, recent changes to federal laws and regulations require that various
amendments be made to the Police and Firefighters' Retirement System Plan in order to maintain
its status as a qualified plan under Section 401(a) of the Internal Revenue Code; and
WHEREAS, an amendment to the City Code of Ordinances is necessary to permit such
new obligations and conditions; and
WHEREAS, the trustees of the City of Dania Beach Police & Firefighters' Retirement
System have requested and approved such an amendment as being in the best interests of the
participants and beneficiaries as well as improving the administration of the plan; and
WHEREAS, the City Commission has received, reviewed and considered an actuarial
impact statement describing the actual impact of the amendments provided for in this Ordinance;
NOW THEREFORE, BE IT ORDAINED BY THE CITY COMMISSION OF THE
CITY OF DANIA BEACH,FLORIDA:
Section 1. The foregoing WHEREAS clauses are ratified and confirmed as being true
and correct and they are made a specific part of this Ordinance upon its adoption.
Section 2. Sec. 18-40(9) of the Dania Beach Code is amended to read as follows:
Sec. 18-40. Definitions.
i
(9) EARNINGS means total cash compensation paid to a member for salary
(including incentive pay) and longevity in accordance with state law as follows:
Firefighter compensation or salary means the fixed monthly remuneration paid a
firefighter, where remuneration is based on actual services rendered, and includes
annual payment for unused leave, any salary reduction, deferred compensation, or
tax sheltered annuity authorized by the city and the Internal Revenue Code.
Police officer compensation or salary means the fixed monthly total remuneration
paid a police officer, including overtime up to three hundred (300) hours per
police officer per calendar year, where remuneration is based on actual services
rendered, and includes any salary reduction, deferred compensation, or tax
sheltered annuity authorized by the city and the Internal Revenue Code, excluding
any payments for extra duty or special detail work performed on behalf of a
second-party employer.
For the purpose of applying the limitations set forth in Sections 401(a)(17and
415 of the Internal Revenue Code, Earnings shall include any elective deferral (as
defined in Section 402(g)(3) of the Internal Revenue Code), and any amount
which is contributed or deferred by the employer at the election of the Member
and which is not includible in the gross income of the Member by reason of
Section 125 or 457 of the Internal Revenue Code. For limitation years beginning
on and after January 1, 2001, for the purposes of applying the limitations
described in Subsection (7)(a) of Section 18-42 below, compensation paid or
made available during such limitation years shall include elective amounts that
are not includible in the gross income of the Member by reason of Section
132(f)(4) of the Internal Revenue Code.
Section 3. Sec. 18-42(7) of the Dania Beach Code is amended to read as follows.
Sec. 18-42. Benefits amount and eligibility.
(7) Internal Revenue Code Compliance. meniber-'s annual
benefit
exeeed the lesser-_=-,r-
(a) Ninety thousand dollars ($90 000 00) (adjusted for neat of living i„
the year
in w i ne Tua adj ustme„G77T2'.sTTeffeeeti P, or
(b)One hundred 0) pereer+�the aver—age annual
eempensatie fithe r
1
years;
however-, benefits
of up to tee-thousand 1-0, eatean be paid wit-he
2 ORDINANCE#2011-008
i
benefits payabl ta, to a member-under all defined benefi. defined In
empleyer- has net M a" time maintained a defined eentribution plan (as
defined RG See n 4 14(;)) in wh eh the employee was n member,
If the fnember-has less than ten (10) years'of ser-viee with the employer- (as
numerator-of sueh fruetion shall be the number-of years, or-paft thereof-, of s
with rthe em {iZr-;the deneminaCer-- Cttl be tors (1 n) yeaf .
"annualFor- puTeses of this subseetion, the benefit"
l
payable annually in the fefm of a straight life annuity with no aneillary of
means a benefit
the limits set fefth in paragraphs (a) and (b)
above A411 be r-edueed aewar-ially, M ifAer-est rate assumption equal to
greater- of five (5) pefeent or the interest Fa4e used in the most r-eeen4 ammal
aetuar- ��alu to roflont mink r�neil ar-y benefits.
LG r,�
if distribtAien of r-etir-emefA benefits begins before age sixty two (62),
an,interest r-a4e assumptien equal te the greater- of five (5) per-eent or- the ifite
rate used in the fnest r-eeefit apA+ual aetuar-ial valuation; however-, retirement
benefits sha4l net be r-edueed belew seventy five theusand dollars ($75,000.00)-W
pay-mefA of benefits begins at -er- after- age fifty five (55) and not below t
aetuaFial equivaletA of seventy five thousand dollars ($75,000.00) if payment e
benefits begins befer-e age fifty five (55). if r-etir-emefA benefits begin after- age
. *..; m in4er-est assumption equal to the lesser- of five (5) per-eei# er- the inter-
fate used in most r-eeent nmma aetu r;nl valu t;en-.
ti
average annual eempensatien fer-
t years"
l shall mean the mem
t
3 ORDINANCE#2011-008
in w-hieh the individual was an aefive membef of the plan.
thereunder-, and eembined plan limits of 1RC Seetion 415(e) and regulations
thereunder-, are hereby A ted by r-efer-enee to the eyaen4 that sueh provisions
may apply to this plan.
if-
lt
> >
estimating a -a reasonable effe.L JL.L.L
"limitationregulation 1.415 6(b)(6) shall be applieable, the ann" additions under- this plan
weuld eause the maximum annUal additions to be exeeeded for- any member-, the
n
the r nemeess amount"
any employee eent-r-ibuti rr r►•
rt ►r
in the neya limitation year- (and sueeeedifig
limitation years if neeessar-y) to reduee employer- eontribtAiens for tha4 member i
that membef * j by the plan as of the end of the limita4ion year-, or (4�
r-eEluee employer- eefAr-ibtAiens to the plan fer- sueh limitation year- by the ameiffin.t.
of the n r►
nliAita -year-."
For pufpeses of this seetion, ►rexeess n
for- any member- for- a-
limitation year shall mean the If any, of (1) the annual additions whie
m4theut regard to
For- purposes of this seetion, n n
shall mean
an una4leeated aeeetHA equal to the sum of neyceess n
for- all fnember-s
the plan dufing the lifnitatieft yean The n n
shal
share n �anrr ings or losses of the fund
(a) Maximum Pension
4 ORDINANCE#2011-008
Notwithstanding any provision of this Plan to the contrary, the Annual Pension that
is accrued by or paid to a participant shall not exceed the Dollar Limitation set forth
below. If the benefit the participant would otherwise accrue in a Limitation Year
would produce an Annual Pension in excess of the Dollar Limitation, the benefit
shall be limited to a benefit that does not exceed the Dollar Limitation.
(1) Definitions Used in this Section
(A) "Annual Pension" means the benefits received by a
participant under this Plan expressed in the form of a straight life
annuity. In determining whether benefits payable exceed the
Dollar Limitation set forth below, benefits payable in any form
other than a straight life annuity shall be adjusted to the larger
(i) The annual amount of the straight life annuity (if any)
payable to the participant under the plan commencingat t the
same annuity starting date as the form of benefit payable to
the participant; or
(ii) The annual amount of the straight life annuity
commencing at the same annuity starting date that has the
same actuarial present value as the form of benefit payable
to the participant, computed using a 5 percent interest
assumption and the applicable mortality table described in
§1.417(e)-I(d)(2) of the Income Tax Regulations for that
annuity starting date.
No actuarial adjustment to the benefit shall be made for benefits
that are not directly related to retirement benefits (such as a
qualified disability benefit,preretirement incidental death benefits,
and postretirement medical benefits; or the inclusion in the form
of benefit of an automatic benefit increase feature, provided the
form of benefit is not subject to §417(e)(3) of the Internal Revenue
Code and would otherwise satisfy the limitations of this Subsection
(a), and the amount payable under the form of benefit in any
Limitation Year shall not exceed the limits of this Subsection (a)
5 ORDINANCE#2011-008
I
applicable at the annuity starting date, as increased in subsequent
years pursuant to § 415(d) of the Internal Revenue Code. For this
purpose, an automatic benefit increase feature is included in a form
of benefit if the form of benefit provides for automatic, periodic
increases to the benefits paid in that form.
(B) "Dollar Limitation" means $160,000.00 (subject to the
annual adjustments provided under Section 415(d) of the Internal
Revenue Code). Such amount shall be adjusted based on the age of
the participant when benefits begin,as follows:
(i) Except with respect to a participant who is a
"Qualified Participant" as defined in Section 415(b)(2)(H)
of the Internal Revenue Code, for benefits (except survivor
and disability benefits as defined in Section 415(b)(2)(I) of
the Internal Revenue Code) beginning before age 62 the
Age-Adjusted Dollar Limitation is equal to the lesser of:
(I) the actuarial equivalent of the annual amount of
a straight life annuity commencing at the annuity
starting date that has the same actuarial present
value as a deferred straight life annuity
commencing at age 62, where annual payments
under the straight life annuity commencing_ at age
62 are equal to the Dollar Limitation (as adjusted
pursuant to section 415(d) for the limitation year),
and where the actuarially equivalent straight life
annuity is computed usingpercent interest rate
and the applicable mortality table under §1.417(e)-
(d)(2) of the Income Tax Regulations that is
effective for that annuity starting date (and
expressing the participant's age based on completed
calendar months as of the annuity starting date); and
6 ORDINANCE#2011-008
(II) the Dollar Limitation (as adjusted pursuant to
section 415(d)) multiplied by the ratio of the annual
amount of the straight life annuity under the Plan to
the annual amount of the straight life annuity under
the Plan commencing at age 62, with both annual
amounts determined without applying the rules of
section 415 of the Internal Revenue Code.
(ii) For benefits beginning after the age of 65, the age-
adjusted Dollar Limitation is equal to the lesser of:
(I) the actuarial equivalent of the annual
amount of a straight life annuity commencingat the
annuity starting date that has the same actuarial
present value as a straight life annuity commencing
at age 65, where annual payments under the straight
life annuity commencing at age 65 are equal to the
dollar limitation of section 415(b)(1)(A) (as
adjusted pursuant to section 415(d) for the
limitation year), and where the actuarially
equivalent straight life annuily is computed using a
5 percent interest rate and the applicable mortality
table under §1.417(e)-l(d)(2) of the Income Tax
Regulations that is effective for that annuity starting
date (and expressing the participant's age based on
completed calendar months as of the annuity
starting date); and
(II) the Section 415(b)((1)(A) Dollar limitation
(as adjusted pursuant to Section 415(d) of the
Internal Revenue Code and §1.415(d)-1 of the
Income Tax Regulations for the limitation year)
multiplied by the ratio of the annual amount of the
adjusted immediately commencing straight life
7 ORDINANCE#2011-008
III
annuity under the Plan to the adjusted age 65
straight life annuity. The adjusted immediately
commencing straight life annuity means the annual
amount of the immediately commencing straight
life annuity payable to the participant, computed
disregarding the participant's accruals after age 65
but including actuarial adjustments even if those
actuarial adjustments are applied to offset accruals.
For this purpose, the annual amount of the
immediately commencing straight life annuity is
determined without ap 1p ying the rules of section
415 of the Internal Revenue Code. The adjusted
age 65 straight life annuity means the annual
amount of the straight life annuity that would be
payable under the plan to a hypothetical participant
who is 65 years old and has the same accrued
benefit (with no actuarial increases for
commencement after age 65) as the participant
receiving the distribution (determined disregarding
the participant's accruals after age 65 and without
applying the rules of section 415) of the Internal
Revenue Code.
(iii) There shall be no age adjustment of the Dollar
�I
Limitation with respect to benefits beginning between the
ages of 62 and 65.
(2) The limitations set forth in this Subsection (a) shall not apply if the
Annual Pension does not exceed $10,000.00 provided the participant has
never participated in a Defined Contribution Plan maintained by the City.
(3) Cost-of-living adjustments in the Dollar Limitation for benefits shall
be limited to scheduled annual increases determined by the Secretary of the
Treasury under Section Subsection 415(d)of the Internal Revenue Code.
8 ORDINANCE#2011-008
(4) In the case of a participant who has fewer than ten (10) years of
participation in the Plan, the Dollar Limitation set forth in Paragraph
(1)(B) of this Subsection (a) shall be multiplied by a fraction (i) the
numerator of which is the number of years or part of a year
participation in the Plan, and(ii) the denominator of which is 10.
(5) Any portion of a participant's benefit that is attributable to
mandatory employee contributions (unless picked-up by the City) or
rollover contributions, shall be taken into account in the manner
prescribed in the regulations under Section 415 of the Internal Revenue
Code.
(6) Should any participant participate in more than one defined benefit
plan maintained by the City, in M case in which the participant's benefits
under all such defined benefit plans determined as of the same age) would
exceed the Dollar Limitation applicable at that age, the accrual of the
participant's benefit under this Plan shall be reduced so that the
participant's combined benefits will equal the Dollar Limitation.
(7) For a participant who has or will have distributions commencing at
more than one annuity starting date, the Annual Benefit shall be
determined as of each such annuity starting date and shall satisfy the
limitations of this Section as of each such date), actuarially adjusting
past and future distributions of benefits commencing_at the other annuity
starting dates. For this purpose, the determination of whether a new
starting date has occurred shall be made without regard to § 1.401(a)-20,
Q&A 10(d), and with regard to § 1.415(b)l(b)(I)(iii)(B) and (C of the
Income Tax Regulations.
(8) The determination of the Annual Pension under Paragraph a)(1) of
this Subsection(a) shall take into account (in the manner prescribed by the
regulations under Section 415 of the Internal Revenue Code) social
security supplements described in § 411(a)(9) of the Internal Revenue
Code and benefits transferred from another defined benefit plan, other
9 ORDINANCE#2011-008
than transfers of distributable benefits pursuant § 1.411(d)-4, Q&A-3(c) of
the Income Tax Regulations.
(9) The above limitations are intended to comply with the provisions
of Section 415 of the Internal Revenue Code, as amended, so that the
maximum benefits provided by plans of the City shall be exactly equal to
the maximum amounts allowed under Section 415 of the Code and
regulations under it. If there is any discrepancy between the provisions of
this Subsection (a) and the provisions of Section 415 of the Internal
Revenue Code and regulations under it, such discrepancy shall be resolved
in such a way as to give full effect to the provisions of Section 415 of the
Internal Revenue Code. The value of any benefits forfeited as a result of
the application of this Subsection (a) shall be used to decrease future
employer contributions.
(b) Required Beginning Date:
Notwithstanding any other provision of the Plan, payment of a
participant's retirement benefits under the Plan shall commence not later than the
participant's Required Beginning Date, which is defined as the later of-
-A 1 of the calendar,year that next follows the calendar year in which the
participant attains or will attain the age of 70V2 years; or
-April 1 of the calendar year that next follows the calendar year in which the
participant retires.
,(c) Required Minimum Distributions.
(1) Required Beginning Date. The participant's entire interest will be
distributed, or begin to be distributed, to the participant no later than the
participant's Required Beginning Date as defined in Subsection (b) of this
Section 18-42(7).
(2) Death of Participant Before Distributions Begin.
(A) If the Participant dies before distributions begin,,the
Participant's entire interest will be distributed, or begin to be
distributed, no later than as follows:
10 ORDINANCE#2011-008
(i) If the participant's surviving spouse is the
participant's sole designated beneficiary, then distributions
to the surviving spouse will begin by December 31 of the
calendar year immediately following the calendar year
which the participant died, or by December 31 of the
calendar ,year in which the participant would have attained
age 70V2, if later.
(ii) If the participant's surviving spouse is not the
participant's sole designated beneficiary, then distributions
to the designated beneficiary will begin by December 31 of
the calendar year immediately following the calendar year
in which the participant died.
(iii) If there is no designated beneficiary as of
September 30 of the year following the year of the
participant's death, the participant's entire interest will be
distributed by December 31 of the calendar year containing
the fifth anniversary of the participant's death.
(B) The participant's entire interest shall be distributed as
follows:
(i) participant Survived by Designated Beneficiary. If
the participant dies before the date distribution of his or her
interest begins and there is a designated beneficiary, the
participant's entire interest will be distributed, beginning, no
later than the time described in Subparagraph(2)(A) above,
over the life of the designated beneficiary or over a period
certain not exceeding:
(I) unless the annuity starting date is before the
first distribution calendar year, the life expectancy
of the designated beneficiary determined using
beneficiary's age as of the beneficiary's birthday in
11 ORDINANCE#2011-008
the calendar year immediately following
calendar year of the participant's death; or
(II) if the annuity starting date is before the first
distribution calendar year, the life expectancy, of the
designated beneficiary determined using_the
beneficiary's as of the beneficiary's birthday in
the calendar year that contains the annuity starting
date.
(ii) No Designated Beneficiary. If the participant dies
before the date distributions begin and there is no
designated beneficiary as of September 30 of the year
following the year of the participant's death, distribution of
the participant's entire interest will be completed by
December 31 of the calendar year containing the fifth
anniversary of the participant's death.
(C) Death of Surviving Spouse Before Distributions to
Surviving_Spouse Begin. In any case in which (i) the participant
dies before the date distribution of his or her interest begins, (ii)
the participant's surviving spouse is the participant's sole
designated beneficiary, and (iii) the surviving spouse dies before
distributions to the surviving spouse begin, Subparagraphs (2)(A)
and 2(B) above shall apply as though the surviving spouse were
the participant.
(3) Requirements For Annuity Distributions That Commence During
i
Participant's Lifetime.
(A) Joint Life Annuities Where the Beneficiary Is Not the
Participant's Spouse. If the participant's interest is being
distributed in the form of a joint and survivor annuity for the joint
lives of the participant and a nonspousal beneficiary, annuity
payments to be made on or after the participant's Required
Beginning Date to the designated beneficiary after the participant's
12 ORDINANCE#2011-008
death must not at any time exceed the applicable percentage of the
annuity payment for such period that would have been payable to
the participant using the table set forth in Q&A-2 of Section
1.401(a)(9)-6T of the United States Treasury regulations. If the
form of distribution combines a joint and survivor annuity for the
joint lives of the participant and a nonspousal beneficiary and a
period certain annuity, the requirement in the preceding sentence
will apply to annuity payments to be made to the designated
beneficiary after the expiration of the period certain.
(B) Period Certain Annuities. Unless the participant's spouse
is the sole designated beneficiary and the form of distribution is a
period certain and no life annuity, the period certain for an annuity
distribution commencing during the participant's lifetime may not
exceed the applicable distribution period for the participant under
the Uniform Lifetime Table set forth in Section 1.401(a)(9)-9 of
the United States Treasury regulations for the calendar year that
contains the annuity starting date. If the annuity starting
precedes the year in which the participant reaches age 70, the
applicable distribution period for the participant is the distribution
period for age 70 under the Uniform Lifetime Table set forth in
Section 1.401(a)(9)-9 of the United States Treasury regulations
plus the excess of 70 over the age of the participant as of the
participant's birthday in the year that contains the annuity starting
date. If the participant's spouse is the participant's sole designated
beneficiary and the form of distribution is a period certain and no
life annuity, the period certain may not exceed the longer of the
participant's applicable distribution period, as determined under
this Subparagraph(3)(B), or the joint life and last survivor
expectancy of the participant and the participant's spouse as
determined under the Joint and Last Survivor Table set forth in
Section 1.401(a)(9)-9 of the United States Treasury regulations,
13 ORDINANCE#2011-008
usingparticipant's and spouse's attained ages as of the
participant's and spouse's birthdays in the calendar year that
contains the annuity starting
(4) Form of Distribution. Unless the participant's interest is
distributed in the form of an annuity purchased from an insurance
company or in a single sum on or before the Required Beginning Date, as
of the first distribution calendar year distributions will be made in
accordance with Subparagraphs (4)(A), (4)(B) and (4)(C) below. If the
Participant's interest is distributed in the form of an annuity purchased
from an insurance company, distributions under it will be made in
accordance with the requirements of Section 401(a)(9) of the Internal
Revenue Code and the United States Treasury regulations. Any part of the
participant's interest which is in the form of an individual account
described in Section 414(k) of the Internal Revenue Code will be
distributed in a manner satisfyingthe he requirements of Section 401(a)(9) of
the Internal Revenue Code and the United States Treasury regulations that
apply to individual accounts.
(A) General Annuity Requirements. If the participant's interest
is paid in the form of annuity distributions under the Plan,
payments under the annuity will satisfy the following
requirements:
(i) the annuity distributions will be paid in periodic
payments made at intervals not longer than one year;
(ii) the distribution period will be over a life (or lives)
or over a period certain, not longer than the distribution
period described in Paragraphs 2 or 3 above, whichever is
applicable, of this Subsection(c);
(iii) once payments have begun over a period certain,
the period certain will not be changed even if the period
certain is shorter than the maximum permitted;
14 ORDINANCE#2011-008
(iv) payments will either be non-increasing or increase
only as follows:
(I) by an annual percentage increase that does
not exceed the annual percentage increase in a cost-
of-living index that is based on prices of all items
and issued by the Bureau of Labor Statistics;
(II) to the extent of the reduction in the amount
of the participant's payments to provide for a
survivor benefit upon death, but only if the
beneficiary whose life was being used to determine
the distribution period dies or is no longer the
participant's beneficiary pursuant to a qualified
domestic relations order within the meaning of
Section 414(p) of the Internal Revenue Code;
(III) to provide cash refunds of employee
contributions upon the participant's death; or
(IV) to pay increased benefits that result from a
Plan amendment.
(B) Amount Required to be Distributed by Required Beginning
Date. The amount that must be distributed on or before the
Participant's Required Beginning Date (or, if the participant dies
before distributions begin, the date distributions are required to
begin under Subparagraph (2)(A)(i) or 2)(A)(ii), whichever is
applicable) is the payment that is required for one payment
interval. The second payment need not be made until the end of
the next payment interval even if that payment interval ends in the
next calendar year. Payment intervals are the periods for which
payments are received, e.g., bi-monthly, monthly, semi-annually,
or annually. All of the participant's benefit accruals as of the last
day of the first distribution calendar year will be included in the
calculation of the amount of the annuity payments for payment
15 ORDINANCE#2011-008
intervals ending on or after the participant's Required Beginning
Date.
(C) Additional Accruals After First Distribution Calendar Year.
Any additional benefits accruing to the participant in a calendar
year after the first distribution calendar year will be distributed
beginning with the first payment interval ending in the calendar
year immediately following the calendar year in which such
amount accrues.
(5) For purposes of this Subsection (c), distributions are considered to
begin on the participant's Required Beginning Date. If annuity payments
irrevocably commence to the participant (or to the participant's Surviving
Spouse) before the participant's Required Beginning ate (,or, if to the
participant's Surviving Spouse, before the date distributions are required
to begin in accordance with Subparagraph (2)(A) above), the date
distributions are considered to begin is the date distributions actually
commence.
(6) Definitions.
(A) Designated beneficiary. The individual who is designated
as the beneficiary under the Plan and is the designated beneficiary
under Section 401(a)(9) of the Internal Revenue Code and Section
1.401(a)(9)-1, Q&A-4, of the United States Treasury regulations.
(B) Distribution calendar year. A calendar year for which a
minimum distribution is required. For distributions beginning
before the participant's death, the first distribution calendar year is
the calendar year immediately preceding the calendar year which
contains the participant's Required Beginning` Date. For
distributions beginning after the participant's death, the first
distribution calendar year is the calendar ,year in which
distributions are required to begin pursuant to Paragraph (2) of this
Subsection(c).
16 ORDINANCE#2011-008
(C) Life expectancy. Life expectancy as computed by use of
the Single Life Table in Section 1.401(a)(9)-9 of the United States
Treasury regulations.
(d) (1) Notwithstanding any provision of the Plan to the contrary
would otherwise limit a distributee's election under this Section, a distributee may
elect, at the time and in the manner prescribed by the Administrator, to have any
portion of an eligible rollover distribution paid directly to an eligible retirement
plan specified by the distributee in a direct rollover.
(2) Definitions
The following definitions apply to this Section:
(A) Eligible rollover distribution: An eligible rollover
distribution is any distribution of all or any portion of the balance
to the credit of the distributee, except that an eligible rollover
distribution does not include:
(i) any distribution that is one of a series of
substantially equal periodic payments (not less frequently
than annually) made for the life (or life expectancy) of the
distributee or the joint lives (or joint life expectancies) of
the distributee and the distributee's designated beneficiary,
or for a specified period of ten(10) years or more;
(ii) any distribution to the extent such distribution is
required under Section 401(a)(9) of the Internal Revenue
Code;
(iii) the portion of any distribution that is a hardship
distribution described in Section 401(k)(2)(B)(i)(IV) of the
Internal Revenue Code; and
(iv) the portion of any distribution that is not includible
in gross income (determined without regard to the
exclusion for net unrealized appreciation with respect to
employer securities), provided that a portion of a
distribution shall not fail to be an eligible rollover
17 ORDINANCE#2011-008
distribution merely because the portion consists of after-tax
Employee contributions which are not includible in gross
income. However, such portion may be transferred only to
an individual retirement account or annuity described in
Section 408(a) or b of the Internal Revenue Code, or to a
qualified defined contribution plan described in Section
401(a) or 403(a) of the Internal Revenue Code that agrees
to separately account for amounts so transferred, including
separately accounting for the portion of such distribution
which is includible in gross income and the portion of such
distribution which is not so includible.
(3) 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(a) of the Internal Revenue Code, an annuity contract described in
Section 403(b of the Internal Revenue Code, a qualified trust described in
Section 401 (a) of the Internal Revenue Code, an eligible plan under
Section 457(b) of the Internal Revenue Code which is maintained by a
state, political subdivision of a state, or any agency or instrumentality of a
state or political subdivision of a state and which agrees to separately
account for amounts transferred into such plan from this Plan, or, with
respect to distributions on or after January 1, 2008, a Roth IRA (subject to
the limitations of Internal Revenue Code Section 408A(c)(3) that accepts
the distributee's eligible rollover distribution.
(4) Distributee: A distributee includes an Employee or former
Employee. In addition, the Employee's or former Employee's surviving
spouse and the Employee's or former Employee's spouse or former spouse
who is the alternate payee under a qualified domestic relations order, as
defined in Section 414(y) of the Internal Revenue Code, are distributees
with regard to the interest of the spouse or former spouse. Furthermore,
18 ORDINANCE#2011-008
I
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effective January 1, 2007, a surviving designated beneficiary as defined in
Section 401(a)(9)(E) of the Internal Revenue Code who is not the
surviving spouse and who elects a direct rollover to an individual
retirement account described in Section 408(a) of the Internal Revenua
Code or an individual retirement annuity described in Section 408(b) of
the Internal Revenue Code shall be considered a distributee.
(5) Direct rollover: A direct rollover is a payment by the Plan to the
eligible retirement plan specified by the distributee.
(e) Notwithstanding any other provision of this Plan, the maximum amount of
M mandatory distribution, as defined in Section 401(a)(31) of the Code, payable
under the Plan shall be $1000.00.
(f) Compensation Limitations Under 401(a)(17) of the Internal Revenue
Code:
In addition to other applicable limitations set forth in the Plan, and
notwithstanding any other provision of the Plan to the contrary, the annual
compensation of each participant taken into account under the Plan shall not
exceed the Economic Growth and Tax Relief Reconciliation Act of 2001
("EGTRRA") annual compensation limit for limitation years beginning after
December 31, 2001. The EGTRRA annual compensation limit is $200,000.00, as
adjusted by the Internal Revenue Commissioner for increases in the cost of living
in accordance with Section 401(a)(17)(B) 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 EGTRRA 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.
Any reference in the Plan to the limitation under Section 401 (a)(17) of the
Internal Revenue Code shall mean the EGTRRA annual compensation limit set
forth in this provision.
19 ORDINANCE#2011-008
(g) At no time prior to the satisfaction of all liabilities under the plan with
respect to members and their spouses or beneficiaries, shall any part of the corpus
or income of the fund be used for or diverted to any purpose other than for their
exclusive benefit.
Section 4. That all ordinances or parts of ordinances and all resolutions or parts of
resolutions in conflict with this Ordinance, are repealed to the extent of such conflict.
Section 5. That if any section, clause, or provision of this Ordinance is for any reason
held invalid or unconstitutional by a court of competent jurisdiction, the holding shall not affect
the validity of the remaining portions of this Ordinance.
Section 6. That this Ordinance shall take effect immediately upon its passage and
adoption.
PASSED on first reading on February 22, 2011.
PASSED AND ADOPTED on second and final reading on March 9, 2011.
C. K. McELY A
MAYOR-COMMISSIONER
ATTEST:
LOUISE STILSON, CMC
CITY CLERK
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APPROVED AS T FO AND CORRECTNESS:
THOM S J./A14SEWd
CITY ATTORNEY
20 ORDINANCE#2011-008