§ 2-77.1. Pension payments; generally.

(a)

Statutory maximum. The statutory maximum amount of annual pension payments made during any limitation year shall be determined in accordance with subsection (d)(1) of this section. The term "limitation year" shall mean a calendar year.

(b)

Basic limitation. Regardless of other provisions of this division, other than the paragraphs below, the amount of yearly retirement income payable hereunder for any limitation year shall not exceed one hundred forty thousand dollars ($140,000.00) (effective July 1, 2001, one hundred sixty thousand dollars ($160,000.00)), as adjusted under Section 415(d) of the code.

(c)

Secondary limitations. The basic limitation in subsection (b) shall be reduced or increased, as applicable, for the following situations if they are applicable:

(1)

The basic limitation in subsection (b) shall be adjusted to its actuarial equivalent based upon the age at which such pension payments commence and an interest rate assumption of the greater of the rate of interest used to develop the adjustment factor in this division or five (5) percent.

(2)

Commencement of pension payments prior to age sixty-two (62). If an employee's pension payments commence prior to age sixty-two (62), the dollar limitation in paragraph (b) shall be reduced to its actuarial equivalent based upon the age at which such pension payments commence and an interest rate assumption of the greater of the rate of interest used to develop the adjustment factors or five (5) percent, provided, however that if such pension payments commence on or after age fifty-five (55), the dollar limitations in paragraph (b) shall not be reduced to less than seventy-five thousand dollars ($75,000.00). If the pension payments commence before age fifty-five (55), the dollar limitation shall not be reduced to less than the amount which is the equivalent of seventy-five thousand dollars ($75,000.00) at age fifty-five (55). This subsection shall not be applicable to any employee if benefits are payable as a result of disability or death.

(3)

Commencement of pension payments after age sixty-five (65). If an employee's pension payments commence after age sixty-five (65), the dollar limitation in paragraph (b) shall not exceed its actuarial equivalent based upon the age at which such pension payments commence and an interest rate which is the lesser of the rate of interest used to develop the adjustment factors or five (5) percent.

(4)

Protection of prior accrued pension payments. The dollar limit described in paragraph (b) will not reduce any employee's accrued pension payments as of October 14, 1987, subject to the provisions of Section 415 of the code as then in effect.

(d)

Minimum pension payments. If the employee's annual pension payments are not more than ten thousand dollars ($10,000.00), as adjusted in accordance with paragraph (b) above, the employee may receive such ten thousand dollars ($10,000.00) without regard to the other secondary limitations, provided the employee did not at any time participate in a defined contribution plan maintained by the city. If employee has less than ten (10) full years of participation in the plan, this limitation shall be reduced by multiplying such limitation by a fraction, the numerator of which is the employee's years of participation (computed to the nearest full month) and the denominator of which is ten (10).

(e)

Cost of living adjustment. Each July 1 thereafter, the one hundred forty-thousand-dollar ($140,000.00) limitation (effective July 1, 2001, one hundred sixty thousand dollars ($160,000.00)) of paragraph (b) above will be automatically adjusted to the new dollar limitation determined by the Commissioner of Internal Revenue for that calendar year. The new limitation will apply to limitation years in which the dollar limitation is changed.

(f)

Participation in more than one (1) defined benefit plan. If the employee participated in more than one (1) defined benefit plan maintained by the city regardless of whether any such plans are terminated, the statutory maximum pension payments shall be determined as if there were just one (1) defined benefit plan, but the pension payments so determined will apply on a pro rata basis between, or among, such plans. No employee may concurrently accrue benefits in more than one (1) defined benefit plan.

(g)

Benefits less than five thousand dollars ($5,000.00). Effective January 1, 1998, if, at the time of an employee's retirement, death, or other termination of employment, the present value of the employee's benefit is less than five thousand dollars ($5,000.00), a lump sum payment of the employee's entire nonforfeitable benefit will be made in lieu of benefit payments, provided that if the present value of such benefit is in excess of five thousand dollars ($5,000.00), a lump sum payment will be made only with the consent of the employee or other payee.

(Ord. of 1-14-03; Ord. of 10-10-17)