Chapter 3.24

RETIREMENT SYSTEM SUBSEQUENT TO JULY 1, 1951

Parts:

If any employee becomes separated from the service, either voluntarily or involuntarily, then and in that event all moneys paid into the fund by such employee shall be returned to him; and in the event that he shall thereafter reenter the service as such employee in any capacity he shall repay into much fund, upon such reentry, an amount equal to the sum returned to him at the time of his separation from the service, and he shall not be entitled to any benefits hereunder until said amount has been repaid into said fund. (Prior code § 2901.51.)

If any such employee shall die under circumstances not covered by this chapter, then and in that event all moneys, including interest earned not exceeding two percent, paid into said fund by such employee shall be returned to his estate. (Prior code § 2901.52.)

In the event of the death of a member drawing retirement compensation, if at the time of the death of said member he has received less than twelve monthly retirement payments, then the difference between the number of payments said member received up to the time of his death and twelve payments shall be paid in monthly payments into said member's estate or to his widow. For example, if a member dies after he has retired and has received three monthly retirement payments at the time of his death, there shall be paid to his estate, or to his widow, nine additional monthly payments. (Prior code § 2901.53.)

• 1 General Provisions and Definitions 2 Administration

• 3 Employee Status and Contributions 4 Retirement Fund 5 Records and Reports

• 6 Membership 7 Member Contributions

• 8 Member Contributions after Effective Date

• 9 Procedure on Contributions 10 City Contributions 11 Service

• 12 Absences 13 Retirement 14 Benefits

• 15 Service Retirement Generally

• 16 Service Retirement for Certain Members on and after Effective Date

• 17 Disability Retirement Generally 18 Disability Retirement for Certain Members after Effective Date

• 19 Optional Settlements 20 Death

• 21 Special Benefits for Certain Former Health Department Employees

• 22 Special Benefits for Certain Former Communications Department Employees

• 23 Medical Benefits for Certain Retirees and Survivors

• 24 Dental Benefits for Retired Members and Survivors

Part 1

GENERAL PROVISIONS AND DEFINITIONS

Sections:

• 3.24.030 Prior retirement system superseded.

• 3.24.040 Purpose of chapter provisions.

• 3.24.050 Definitions.

• 3.24.060 Limited applicability of Chapter 3.24 on and after July 1, 1975.

This Chapter 3.24 may be cited as the "San José retirement code." (Prior code § 2904.1.)

The San José federated employees' retirement system created by Ordinance 2774, as amended, presently codified as Chapter 3.20 of the San José Municipal Code, is continued in existence under this chapter.

(Prior code § 2904.3.)

On and after July 1, 1951, and subject to the provisions of Section 3.24.450 and Section 3.24.1210 of this chapter, this Chapter 3.24 shall supersede the provisions of Chapter 3.20 as to the employees who become members of the retirement system which is the subject of this chapter. (Prior code § 2904.)

The purpose of this chapter is to effect economy and efficiency in the public service by providing a means whereby employees who become superannuated or otherwise incapacitated, without hardship or prejudice, may be replaced by more capable employees, and to that end provide a retirement system consisting of retirement allowances and death benefits. It is the intent of the city council that the retirement provisions in this chapter be amended from time to time to include provisions that will improve the system. To this end it is in-

tended that the reports of the board will be considered, along with other available data, as to the desirability of changes in the retirement system. (Prior code § 2904.2.)

Unless the context otherwise requires, the definitions set forth in Part 4 of Chapter 2.08 and this part of the code govern the construction of this chapter.

1. "Accumulated additional contributions" means the sum of all additional contributions standing to the credit of a member's individual account, and interest thereon.

2. "Accumulated normal contributions" means the sum of all normal contributions standing to the credit of a members individual account, and interest thereon.

3. "Accumulated prior service contributions" means the sum of all prior service contributions standing to the credit of a members individual account and interest thereon.

4. "Accumulated contributions" means accumulated normal contributions plus any accumulated additional contributions and plus accumulated prior service contributions standing to the credit of a member's account.

5. "Actuarial equivalent" means a benefit of equal value when computed upon the basis of the mortality tables adopted and the interest rate fixed by the board.

6. "Actuary" means the actuary retained on a consulting basis by the board.

7. "Additional contributions" means contributions made by members in addition to their normal contributions.

8. "Annuity" means payments for life derived from contributions made by a member.

9. "Beneficiary" means any person, including a corporation, designated by a member to receive, or who qualifies for receipt of, a benefit payable under this chapter.

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10. "Benefit" means the retirement allowance, death benefit, or refund of accumulated contributions.

11. "Board" means the retirement board created in Part 10 of Chapter 2.08 of this Code.

12. "City" means the City of San José.

13. "Compensation" means the remuneration paid in cash out of funds controlled by the city, plus the monetary value, as determined by the board, of living quarters, board, lodging, fuel, laundry and other advantages of any nature furnished a member by the city in payment for his services. Overtime excluded in computing compensation. When the compensation of a member is a factor in any computation to be made under this chapter, there shall be excluded from such computations any compensation based on overtime put in by a member.

14. "Compensation earnable" by a member means the average monthly compensation, as determined by the board, upon the basis of the average time put in by members in the same group or class of employment and at the same rate of pay. The computation for any absence of a member shall be based on the compensation earnable by him at the beginning of the absence and that for time prior to entering city service shall be based on the compensation earnable by him in the position first held by him in such service.

15. "Employee" means any person in the employ of the city whose compensation, or at least that portion of his compensation which is provided by the city, is paid out of funds directly controlled by the city. "Funds directly controlled by the city" includes funds deposited in and disbursed from the city treasury in payment of compensation, regardless of their source.

16. "Final compensation" means the highest average annual compensation earnable

by a member during any period of three consecutive years during his membership in the system. For the purposes of this chapter, periods of service separated by breaks in service may be aggregated to constitute a period of three consecutive years, if the periods of service are consecutive except for such breaks. If a break in service did not exceed six months in duration, time included in the break, and compensation earnable during such time shall be included in computation of final compensation. If a break in service exceeded six months in duration, the first six months thereof and the compensation earnable during those six months shall be included in computation of final compensation, but time included in the break which is in excess of six months and the compensation earnable during such excess time shall be excluded in computation of final compensation.

17. On and after September 1, 1953, to August 31, 1956, the "fiscal year," for the purpose of this chapter, is any year commencing on September 1st and ending on August 31st next following; provided, that the fiscal year commencing July 1, 1952 shall end on August 31, 1953. On and after July 1, 1957, the "fiscal year," for the purpose of this chapter, is any year commencing on July 1st and ending on June 30th next following; provided, however, that the fiscal year commencing September 1, 1956, shall be a ten-month fiscal year ending on June 30, 1957.

18. "Member" means any person included in the membership of this system.

19. "Normal contributions" means contributions made by a member at the normal rates of contribution fixed by the board, but does not include additional contributions by members.

20. "Pension" means payments for life derived from contributions made from employer controlled funds.

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21. "Prior service contributions" means contributions made by members on account of service rendered prior to July 1, 1951.

22. "Regular interest" means interest at the annual rate fixed by the board, compounded annually, plus such additional interest as the board may credit from year to year.

23. "Retirement" means withdrawal from active service with a retirement allowance granted under this chapter.

24. "Retirement allowance" means the service retirement allowance or the disability allowance.

25. "Retirement fund" means the San José federated employees retirement fund created by Ordinance 2774, as amended, presently codified in Chapter 3.20 of the San José Municipal Code, and continued in existency by this chapter.

26. "Retirement system" or "this system" means the federated city employees retirement system.

(Prior code §§ 2904.4 - 2904.31.)

Anything elsewhere in this Chapter 3.24 to the contrary notwithstanding, no person shall become, on or after July 1, 1975, a member of the retirement plan established by the provisions of this chapter, and, except as may be otherwise provided by the provisions of Chapter 3.28 of this Code, no member or former member of the retirement plan established by the provisions of this Chapter 3.24, and no survivor, beneficiary or estate of any such member or former member shall have any rights or be entitled to any benefits under the provisions of this Chapter 3.24 if and after said member or former member becomes a member of the 1975 federated employees retirement plan established by the provisions of Chapter 3.28 of this Code. (Prior code § 2904.31a.)

Part 2

ADMINISTRATION

Sections:

• 3.24.100 Creation.

• 3.24.110 Powers and duties.

• 3.24.120 Determination of employee membership conditions.

• 3.24.130 Benefit determination authority.

• 3.24.140 Authority to secure medical service and advice.

• 3.24.150 Actuarial investigation requirements.

• 3.24.160 Adoption of tables and interest rates.

• 3.24.170 Interest credited on contributions - Generally.

• 3.24.180 Interest credited on contributions - Additional earnings.

• 3.24.190 Hearings.

• 3.24.200 Prohibited financial transactions.

• 3.24.210 Direct transfers of eligible rollover distributions.

For creation of the retirement board, see Chapter 2.08, Part 4 of this Code. (Prior code § 2904.34.)

The board may make such rules not inconsistent with this chapter as it deems proper, and each member and each person retired is subject to this chapter and such rules. (Prior code § 2904.40.)

The board shall determine, within the scope of this chapter, the employees who are entitled to membership in the retirement system described in this chapter, and the board is the sole judge of the

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conditions under which persons may be admitted to and may continue to receive benefits under this system.

(Prior code § 2904.42.)

Subject to this chapter and its rules, the board shall determine and may modify benefits for service and disability and death. (Prior code § 2904.41.)

The board shall secure and pay reasonable compensation for such medical service and advice as is necessary to discharge its duties respecting matters involving disability or death or both. (Prior code § 2904.43.)

The board shall keep in convenient form such data as are necessary for the actuarial valuation of this system. The board shall cause an actuarial investigation to be made from time to time and as often as may be reasonably necessary to keep the plan actuarially sound, but not less frequently than once each five years commencing from and after January 1, 1971. The actuarial investigation shall consist of a report as to the mortality, service and compensation experience of members and persons receiving benefits, an actuarial valuation of the assets and liabilities of this system, and such other actuarial investigations as may be relevant to and for the benefit of the system.

From time to time the board shall determine the rate of interest being earned on the retirement fund.

(Prior code § 2904.44.)

Upon the basis of any or all of such investigation, valuation and determination, the board shall adopt such mortality, service and other tables and interest rates as it deems necessary and, subject to Sections 3.24.570, 3.24.580, 3.24.720 and 3.24.730

make revision in rates of contributions of members as it deems necessary to provide the benefits for which the rates for normal contributions are required to be calculated. No adjustment shall be included in the new rates for time prior to the effective date of such revision. (Prior code § 2904.45.)

The board shall credit all contributions of members, retired members and the city, in the retirement fund, with interest at the current rate, compounded at each June 30th and December 31st. (Prior code § 2904.46.)

As of June 30th, the board may credit to all contributions held in the retirement fund such interest in excess of the current rate as it deems proper in the light of the earnings on the retirement fund during the fiscal year, but not more than the difference between such earnings and the interest credited at the current rate to contributions during the fiscal year. In the calculation of benefits under any mortality table adopted by the board, only the current rate of interest is allowed on contributions under this chapter.

(Prior code § 2904.47.)

• A. The board may, in its discretion, hold a hearing for the purpose of determining any question presented to it involving any right, benefit or obligation of a person under this chapter. Any applicant may file an application for rehearing of any application, within thirty days after written notice of the determination by the retirement board has been sent by registered mail to the applicant or his attorney of record, upon any of the following grounds:

  1. That the retirement board acted without and in excess of its powers;

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2. That the order, decision or award was procured by fraud;

3. That the evidence does not justify the determination of the retirement board;

4. That the applicant has discovered new evidence material to him which he could not, with reasonable diligence, have discovered or procured at the hearing.

• B. The determination of the retirement board on any application for rehearing shall be made within sixty days after the filing thereof.

• (Prior code § 2904.48.)

A board member or employee of the board shall not, directly or indirectly:

• A. Have any interest in the making or any investment, or in the gains or profits accruing therefrom;

• B. For himself, or as an agent or partner of others, borrow any funds or deposits of this system, nor use such funds or deposits in any manner except to make such current and necessary payments as are authorized by the board;

• C. Become an endorser, surety or obligor on investments by the board.

(Prior code § 2904.33.)

• A. If, under the provisions of this chapter, a person becomes entitled to an eligible rollover distribution, the person may elect to have the distribution or any portion thereof paid directly to an eligible retirement plan specified by the person.

• B. The election made pursuant to this section shall be in accordance with terms and conditions established by the board.

• C. Upon the exercise of the election by a person pursuant to this section, the distribution from the retirement fund of the amount designated by the person, once distributable under the

provisions of this chapter, shall be made in the form of a direct transfer to the eligible retirement plan so specified.

• D. For the purposes of this section, "eligible rollover distribution" means a distribution from the retirement fund which constitutes an eligible rollover distribution within the meaning of Section 401(a)(31)(C) of the Internal Revenue Code.

• E. For purposes of this section, "eligible retirement plan" means a plan which constitutes an eligible retirement plan within the meaning of Section 401(a)(31)(D) of the Internal Revenue Code.

• (Ord. 24814.)