Part 9.5

OPTIONAL SETTLEMENTS

Sections:

• 3.36.1461 Manner and time of election.

• 3.36.1462 Optional settlements.

• 3.36.1463 Limitations on optional settlements.

• 3.36.1464 Automatic revocation of election of optional settlement.

• 3.36.1465 Special provisions.

• 3.36.1466 Actuarial equivalent.

• 3.36.1467 Additional window period for election of optional settlement.

• 3.36.1468 Marriage or domestic partnership after commencement of monthly allowance.

Subject to the provisions of this chapter, and subject particularly to the provisions of Section 3.36.1463 of this part, a member of this plan may elect, in the manner and within the time specified in Section 3.36.1461, to have the actuarial equivalent

of any retirement allowance and survivorship allowance to which such member (the term "member" in Part 9.5 includes tier 2 member, unless specifically stated otherwise) and such member's eligible spouse or domestic partner are entitled under this plan applied in accordance with any of the optional settlements specified in this part. (Ords. 24170, 27712, 29266, 29879.)

• A. A member of this plan may elect an optional settlement described in this part by filing a written election with the retirement board on a form provided by the secretary to the board.

• B. An election of an optional settlement must be filed no earlier than the time the application for retirement is filed and no later than thirty (30) days after the effective date of retirement.

• C. Any election made pursuant to the provisions of this part may be amended or revoked by the member who made the election provided that the amendment or revocation is made in writing and is filed with the retirement board on or before the effective date of the member's retirement. If an election is revoked, a new one (1) may be made in the manner and time specified in subsections A. and B. of this section.

• D. Except as provided in subsection E. of this section and in Section 3.36.1464, any election made pursuant to this part that is not amended or revoked on or before the thirtieth day after the effective date of the member's retirement shall be irrevocable, and benefits shall be paid in accordance with such election and the provisions of this part.

• E. In the event the member is reinstated from retirement and becomes a member of this plan, any election made pursuant to this part prior to such reinstatement shall be automatically revoked, and no benefits shall be paid pursuant to such election.

• (Ords. 24170, 27712.)

• A. Optional settlement one consists of an election to have the actuarial equivalent of any

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• retirement allowance and survivorship allowance to which the member and the member's eligible spouse or eligible domestic partner are entitled under this plan applied to provide a lesser retirement allowance to the member until the member's death and, thereafter, subject to the provisions of Section 3.36.1463, to have such percentage of the member's reduced retirement allowance as the member may select paid to the member's surviving spouse or surviving domestic partner for the life of the surviving spouse or surviving domestic partner. In the event the member's spouse or domestic partner predeceases the member, the reduced retirement allowance shall continue to be paid to the member until the member's death.

• B. Optional settlement two consists of an election to have the actuarial equivalent of any retirement allowance and survivorship allowance to which the member and the member's eligible spouse or eligible domestic partner are entitled under this plan applied to provide a lesser retirement allowance to the member until the member's death and, thereafter, subject to the provisions of Section 3.36.1463, to have such percentage of the member's reduced allowance as the member may select paid to the member's surviving spouse or surviving domestic partner for the life of the surviving spouse or surviving domestic partner. In the event the member's spouse or domestic partner predeceases the member, the member shall be paid thereafter, until the member's death, a retirement allowance in an amount equal to the retirement allowance that would have been paid to the member had no optional settlement been elected.

(Ords. 24170, 27712, 29266, 29879.)

• B. The percentage paid to the surviving spouse or surviving domestic partner of a member shall be a multiple of five percent (e.g., fifty percent, fifty-five percent, sixty percent, sixty-five percent).

• C. In no case shall an optional settlement be selected that would result in the payment of an allowance to a surviving spouse or surviving domestic partner that is less than the allowance that would be payable to the surviving spouse or surviving domestic partner if no optional settlement had been selected.

• D. In no case shall any allowance be paid to a retired member that is greater than the allowance that would have been paid had no optional settlement been selected.

• E. The optional settlements provided in this part shall be paid only to the person who was married to the member both at the time of the member's retirement and at the time of the member's death or to the person who was the member's domestic partner both at the time of the member's retirement and at the time of the member's death, whichever is applicable.

• F. In no case shall the total of the monthly allowance payable to a surviving spouse or surviving domestic partner under an optional settlement plus the monthly allowances payable to any surviving children under the provisions of this chapter exceed a maximum of seventyfive percent of the deceased member's final compensation. In the event the total of such monthly allowances would exceed said maximum, the amounts payable to the children shall be reduced to such amounts as, when added to the amount payable to the surviving spouse or surviving domestic partner, will not exceed said maximum.

(Ords. 24170, 27712, 29266, 29879.)

• A. In no case shall the percentage paid to the surviving spouse or surviving domestic partner be greater than one hundred percent or be less than fifty percent of the reduced retirement allowance paid to the member.

• A. In the event a member elects an optional settlement and the member's spouse or domestic partner predeceases the member prior to the

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effective date of the member's retirement, the election shall be automatically revoked, and benefits shall be paid to the member as though no optional settlement had been elected.

• B. In the event a member elects an optional settlement and the member dies leaving an eligible surviving spouse who is not the person named in the election or leaving an eligible surviving domestic partner who is not the person named in the election, the election shall be automatically revoked, and no benefits shall be paid pursuant to the election.

• C. In the event the application for retirement is withdrawn before being acted upon by the board, the election shall be automatically revoked, and no benefits shall be paid pursuant to the election.

• D. In the event the application for retirement is denied by the board, the election shall be automatically revoked, and no benefits shall be paid pursuant to the election in any case where:

  1. No timely appeal of the board's decision is filed; or

  2. The board's decision is upheld by a final decision of a court of competent jurisdiction.

(Ords. 24170, 27712, 29266, 29879.)

• A. Notwithstanding the time limitations for filing an election set forth in Section 3.36.1461.B., a person who was employed in city service and was a member of this plan on June 1, 1991, may file a written election for an optional settlement on or before January 31, 1993, and such election shall be deemed filed in accordance with Section 3.36.1461.B. for the purposes of this part.

• B. Notwithstanding the other provisions of this part, the surviving spouse or surviving domestic partner of a deceased member may elect an optional settlement and receive benefits as though the optional settlement had been elected

by the deceased member in accordance with this part if all of the following conditions are satisfied:

1. On or after June 1, 1991, the deceased member either:

   • a. Retired pursuant to the provisions of this chapter; or

   • b. Began receiving an allowance pursuant to Section 3.36.1640; and

2. The deceased member died prior to February 1, 1993, without having made an election for an optional settlement; and

3. The surviving spouse or surviving domestic partner files a written election for the optional settlement on or before January 31, 1993.

• C. For the purposes of this part, "retirement allowance" includes:

  1. The retirement allowance that would have been paid to a member who retired but died before receipt of retirement pay.

  2. The monthly allowance paid to a former member of this plan pursuant to Section 3.36.1640.

• D. For the purposes of this part, "member" includes a person who has elected to allow accumulated contributions to remain in the retirement fund pursuant to Section 3.36.1640. With respect to such person, "effective date of retirement" means the date such person begins receiving payments pursuant to Section 3.36.1640.

(Ords. 24170, 27712, 27768.)

For the purposes of this part, "actuarial equivalent" means a benefit of equal value when computed upon the basis of the interest rate, inflation rate and annuity tables and other relevant assumptions on the most recent actuarial valuation and adopted by resolution of the board upon the advice of the board's actuary provided that such interest rate, inflation rate, and annuity tables and other relevant assumptions comport with reasonable standards applicable to governmental retirement plans.

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For purposes of this section, the most recent actuarial valuation shall be the valuation performed as of June 30th in the calendar year prior to the effective date of the actuarial equivalence calculation. (Ords. 24170, 27712, 29879.)

• A. Notwithstanding the time limitations for filing an election set forth in Section 3.36.1461.B. or in Section 3.36.1465, a person who was employed in city service and was a member of this plan on June 1, 1991, and who retired pursuant to the provisions of this chapter or began receiving a monthly benefit pursuant to Section 3.36.1640 prior to October 23, 1992, may file a written election for an optional settlement on or before December 31, 1997, and such election shall be deemed filed in accordance with Section 3.36.1461.B. for the purposes of this part. Such election shall be subject to the requirements of subsection C. below.

• B. Notwithstanding the other provisions of this part, and subject to the requirements of subsection C. below, the surviving spouse or surviving domestic partner of a deceased member or deceased former member may elect an optional settlement and receive benefits as though the optional settlement had been elected by the deceased member or former member in accordance with this part if all of the following conditions are satisfied:

  1. On or after June 1, 1991, but prior to October 23, 1992, the deceased member or former member either:

     • a. Retired pursuant to the provisions of this chapter; or

     • b. Began receiving an allowance pursuant to Section 3.36.1640; and

  2. The deceased member or former member died prior to October 2, 1997, without having made an election for an optional settlement; and

  3. The surviving spouse or surviving domestic partner files a written election for the optional settlement on or before December 31, 1997.

• C. Any election for an optional settlement made pursuant to the provisions of this section shall be subject to the following requirements:

  1. The actuarial equivalent of the retirement allowance and the surviving spouse allowance shall be calculated as of the date of the member's retirement or as of the date the former member first began receiving monthly benefits, whichever is applicable.

  2. If the total amount of the benefits paid from the plan (including both monthly benefits paid to the retired member or former member plus any benefits paid to a surviving spouse or surviving domestic partner) as of the date of the election made under subsection A. or B. exceeds the amount of the benefits that would have been paid under the selected optional settlement, then the retired member, former member, surviving spouse, or surviving domestic partner as applicable, shall repay the excess benefits, plus any cost-of-living adjustments attributable to such excess payments, to the retirement fund in such manner and at such times as approved by the board in order that the additional time in which persons may elect an optional settlement under this Section 3.36.1467 shall be cost-neutral to the retirement fund.

spouse, or surviving domestic partner as applicable, shall repay the excess benefits, plus any cost-of-living adjustments attributable to such excess payments, to the retirement fund in such manner and at such times as approved by the board in order that the additional time in which persons may elect an optional settlement under this Section 3.36.1467 shall be cost-neutral to the retirement fund.

3. In the event the retired member or former member dies before all overpayments have been repaid to the retirement fund as required by paragraph 2. Above, any remaining overpayment shall be deducted from any survivorship or death benefits which otherwise would become payable upon the death of the retired member or former member.

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• D. For the purposes of this section, "retirement allowance" includes:

  1. The retirement allowance that would have been paid to a member who retired but died before receipt of retirement pay; and

  2. The monthly benefit paid to a former member of this plan pursuant to Section 3.36.1640.

• (Ords. 25439, 27712.)

  - c. Has been in a domestic partnership with that domestic partner for at least thirty days. 
  

  3. The election must be filed within ninety days after the date of the marriage or the establishment of the domestic partnership, in the case of any person not described in paragraph 1. or paragraph 2. above.

• C. The optional settlement consists of either:

• A. Notwithstanding any provision in this Part 9.5 to the contrary, a person who is receiving a monthly retirement allowance or is receiving a monthly allowance from the retirement fund pursuant to Section 3.36.1640 and who marries or establishes a domestic partnership after beginning to receive such monthly allowance may elect an optional settlement under this section by filing a written election with the retirement board on a form provided by the secretary to the board.

• B. The election for an optional settlement must be filed within the time specified in this Subsection B.

  1. The election must be filed on or before January 15, 2003, in the case of a person who, as of July 12, 2002:

     • a. Is receiving a monthly allowance; and

     • b. Has married after first receiving the monthly allowance; and

     • c. Has been married to that spouse for at least thirty days.

  2. The election must be filed on or before January 31, 2007, in the case of a person who, as of July 1, 2006:

     • a. Is receiving a monthly allowance; and

     • b. Entered into a domestic partnership on or after January 1, 2005, and after first receiving the monthly allowance; and

1. An election to have the actuarial equivalent of any monthly allowance to which the former member (including a tier 2 member) is entitled under this plan applied to provide a lesser monthly allowance to the former member until the former member's death and, thereafter, subject to the provisions of Subsection D. below, to have such percentage of the former member's reduced retirement allowance as the former member may select paid to the former member's spouse or domestic partner named in the election for the optional settlement for the life of that spouse or domestic partner. The reduction in the former member's monthly allowance shall begin with the first monthly allowance payable after the effective date of the optional settlement. In the event the former member's spouse or domestic partner predeceases the former member, the reduced retirement allowance shall continue to be paid to the former member until the former member's death.

2. An election to have the actuarial equivalent of any monthly allowance to which the former member (including a former tier 2 member) is entitled under this plan applied to provide a lesser monthly allowance to the former member until the former member's death and, thereafter, subject to the provisions of Subsection D. below, to have such percentage of the former member's reduced allowance as

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• the former member may select paid to the former member's spouse or domestic partner named in the election for the optional settlement for the life of that spouse or domestic partner. The reduction in the former member's monthly allowance shall begin with the first monthly allowance payable after the effective date of the optional settlement. In the event the former member's spouse or domestic partner predeceases the former member, the former member shall be paid thereafter, until the former member's death, a monthly allowance in an amount equal to the monthly allowance that would have been paid to the former member had no optional settlement been elected.

• D. For the purposes of this Section 3.36.1468:

  1. In no case shall the percentage paid to the named spouse or domestic partner be greater than one hundred percent or be less than fifty percent of the reduced retirement allowance paid to the member (including a tier 2 member).

  2. The percentage paid to the named spouse or domestic partner shall be a multiple of five percent (e.g., fifty percent, fifty-five percent, sixty percent, sixty-five percent).

  3. In no case shall any monthly allowance be paid to a former member (including a tier 2 member) that is greater than the monthly allowance that would have been paid had no optional settlement been elected.

  4. The optional settlements provided in this section shall be paid only to the person who was married to the former member (including a tier 2 member) both at the time of the former member's election of the optional settlement and at the time of the former member's death or to the person who was the member's domestic partner both at the time of the member's retirement and at the time of the member's death, whichever is applicable.

  5. In no case shall the total of the monthly allowance payable to a named spouse or domestic partner under an optional settlement plus the monthly allowances payable to any surviving children under the provisions of this chapter exceed a maximum of seventy-five percent of the deceased former member's final compensation. In the event the total of such monthly allowances would exceed said maximum, the amounts payable to the children shall be reduced to such amounts as, when added to the amount payable to the named spouse or domestic partner, will not exceed said maximum.

  6. "Actuarial equivalent" shall have the meaning set out in Section 3.36.1466. In determining the actuarial equivalent, a former member who is receiving a benefit pursuant to Section 3.36.1640 shall be treated as though retired for service.

• E. Unless revoked within the time specified in Subsection F. or unless automatically revoked as provided in Subsection G., any optional settlement elected pursuant to this section shall become effective:

  1. In the case of a person described in paragraph 1. of Subsection B., the later of six months from the date the election is made or one year from the date of the marriage or the establishment of the domestic partnership; or

2. In the case of a person described in paragraph 2. or paragraph 3. of Subsection B., one year from the date of the marriage or the establishment of the domestic partnership.

• F. Any election made pursuant to this section may be amended or revoked by the former member (including a tier 2 member) who made the election provided that the amendment or revocation is made in writing and is filed with the retirement board within the time specified in Subsection B. If an election is revoked, a

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new one may be made in the manner and time specified in Subsections A. and B. of this section.

• G. Any election made pursuant to this section that is not amended or revoked within the time specified in Subsection B. shall be irrevocable and benefits shall be paid in accordance with such election and the provisions of this section except under the following circumstances:

  1. In the event the former member (including a tier 2 member) is reemployed by the city and becomes a member of this plan, any election made pursuant to this section prior to such reemployment shall be automatically revoked, and no benefits shall be paid pursuant to such election.

  2. In the event a former member (including a tier 2 member) elects an optional settlement and the former member's spouse or domestic partner predeceases the member prior to the effective date of the optional settlement, the election shall be automatically revoked, and benefits shall be paid to the member as though no optional settlement had been elected.

  3. In the event a former member (including a tier 2 member) elects an optional settlement and the former member dies leaving an eligible surviving spouse who is not the person named in the election or leaving an eligible surviving domestic partner who is not the person named in the election, the election shall be automatically revoked, and no benefits shall be paid pursuant to the election.

• (Ords. 26643, 27712, 29266, 29879, 30942.)

• 3.36.1525 Additional employee contributions and employer contribution offset.

• 3.36.1530 Crediting of city contributions to city.

• 3.36.1540 Crediting of members' contributions to individual accounts - Discharge of claims.

• 3.36.1550 Contributions for prior service benefits.

• 3.36.1555 Special member prior service contribution provision.

• 3.36.1560 Other contributions.

• 3.36.1565 No credit to city upon the withdrawal of member's accumulated contributions.

• 3.36.1570 Administrative Expenses.

• 3.36.1580 City pickup of member contributions.

• 3.36.1590 Time of payment of city contributions.

Any and all members of this retirement system, and any and all other persons authorized or required by the provisions of this chapter to contribute to this system, and the City of San José, shall contribute to this retirement system, and to the retirement fund, all moneys or sums required of them in this chapter in the manner and at the times provided in this chapter.

(Prior code § 2903.275.)

Part 10

CONTRIBUTIONS

Sections:

• A. Service purchases under Section 415(n). Effective for permissive service credit contributions made in limitation years beginning after December 31, 1997, if a member makes one or more contributions to purchase permissive ser-

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vice credit under the retirement plan, then the requirements of Section 415(n) of the Internal Revenue Code shall be treated as met only if:

1. The requirements of Section 415(b) of the Internal Revenue Code are met, determined by treating the accrued benefit derived from all such contributions as an annual benefit for purposes of Section 415(b) of the Internal Revenue Code; or

2. The requirements of Section 415(c) of the Internal Revenue Code are met, determined by treating all such contributions as annual additions for purposes of Section 415(c) of the Internal Revenue Code.

3. For purposes of applying this section, the retirement plan shall not fail to meet the reduced limit under Section 415(b)(2)(C) of the Internal Revenue Code solely by reason of this paragraph and shall not fail to meet the percentage limitation under Section 415(c)(1)(B) of the Internal Revenue Code solely by reason of this section.

4. For purposes of this section the term "permissive service credit" means service credit:

   • a. Recognized by the retirement plan for purposes of calculating a member's benefit under the retirement plan;

   • b. Which such member has not received under the retirement plan; and

   • c. Which such member may receive only by making a voluntary additional contribution, in an amount determined under the retirement plan, which does not exceed the amount necessary to fund the benefit attributable to such service credit.

Effective for permissive service credit contributions made in limitation years beginning after December 31, 1997, such term

may include service credit for periods for which there is no performance of service, and, notwithstanding subparagraph b., may include service credited in order to provide an increased benefit for service credit which a member is receiving under the retirement plan.

5. The retirement plan shall fail to meet the requirements of this section if:

   • a. More than five years of nonqualified service credit are taken into account for purposes of this Subsection A.; or

   • b. Any nonqualified service credit is taken into account under this Subsection A. before the member has at least five years of participation under the retirement plan.

6. For purposes of paragraph 5., effective for permissive service credit contributions made in limitation years beginning after December 31, 1997, the term "nonqualified service credit" means permissive service credit other than that allowed with respect to:

• a. Service (including parental, medical, sabbatical, and similar leave) as an employee of the government of the United States, any state or political subdivision thereof, or any agency or instrumentality of any of the foregoing (other than military service or service for credit which was obtained as a result of a repayment described in Section 415(k)(3) of the Internal Revenue Code);

  • b. Service (including parental, medical, sabbatical, and similar leave) as an employee (other than as an employee described in subparagraph a. of an education organization described in Section 170(b)(1)(A)(ii) of the Internal Revenue Code which is a public, private, or sectarian school which provides elementary

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or secondary education (through grade twelve), or a comparable level of education, as determined under the applicable law of the jurisdiction in which the service was performed;

• c. Service as an employee of an association of employees who are described in subparagraph a.; or

• d. Military service (other than qualified military service under Section 414(u) of the Internal Revenue Code) recognized by the retirement plan.

In the case of service described in subparagraph a., b., or c., such service shall be nonqualified service if recognition of such service would cause a member to receive a retirement benefit for the same service under more than one plan.

7. In the case of a trustee-to-trustee transfer after December 31, 2001, to which Section 403(b)(13)(A) of the Internal Revenue Code or Section 457(e)(17)(A) of the Internal Revenue Code applies (without regard to whether the transfer is made between plans maintained by the same employer):

   • a. The limitations of paragraph 5. shall not apply in determining whether the transfer is for the purchase of permissive service credit; and

   • b. The distribution rules applicable under federal law to the retirement plan shall apply to such amounts and any benefits attributable to such amounts.

8. For an eligible member, the limitation of Section 415(c)(1) of the Internal Revenue Code shall not be applied to reduce the amount of permissive service credit which may be purchased to an amount less than the amount which was allowed to be purchased under the retirement plan as in effect on August 5, 1997. For pur-

poses of this paragraph, an eligible member is an individual who first became a member in the retirement plan before January 1, 1998.

9. Tier 2 members shall be permitted to purchase service credit, except with respect to the purchase of credit associated with disciplinary suspension time.

• B. Modification of contributions for 415(c) and 415(n) purposes. Notwithstanding any other provision of law to the contrary, the retirement plan may modify a request by a member to make a contribution to the retirement plan if the amount of the contribution would exceed the limits provided in Section 415 of the Internal Revenue Code by using the following methods:

1. If the law requires a lump sum payment for the purchase of service credit, the retirement plan may establish a periodic payment plan for the member to avoid a contribution in excess of the limits under Section 415(c) or 415(n) of the Internal Revenue Code.

   2. If payment pursuant to paragraph 1. shall not avoid a contribution in excess of the limits imposed by Section 415(c) or 415(n) of the Internal Revenue Code, the retirement plan may either reduce the member's contribution to an amount within the limits of those sections or refuse the member's contribution.

• C. Repayments of cashouts. Any repayment of contributions (including interest thereon) to the retirement plan with respect to an amount previously refunded upon a forfeiture of service credit under the retirement plan or another governmental plan maintained by the city shall not be taken into account for purposes of Section 415 of the Internal Revenue Code, in accordance with applicable treasury regulations.

• D. Participation in other qualified plans; aggregation of limits.

  1. The 415(b) limit with respect to any member who at any time has been a member

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in any other defined benefit plan as defined in Section 414(j) of the Internal Revenue Code maintained by the city shall apply as if the total benefits payable under all such defined benefit plans in which the member has been a member were payable from one plan.

2. The 415(c) limit with respect to any member who at any time has been a member in any other defined contribution plan as defined in Section 414(i) of the Internal Revenue Code maintained by the city shall apply as if the total annual additions under all such defined contribution plans in which the member has been a member were payable from one plan.

(Ords. 28886, 29266, 29879.)

The retirement board shall furnish to the director of finance the rates of contributions for, and the amounts of any other contributions payable by each member or other person. The director of finance shall apply such rates of contribution to the compensation of each member, and deduct from such compensation the contributions so determined and payable by each member. All other contributions authorized to be made or required of members or other persons shall be paid by such members or persons to the director of finance. The director of finance shall furnish to the board, upon request therefor, a statement of such contributions so deducted or credited with respect to each member or other person, together with such other information as the board may require. All contributions shall be placed in the retirement fund. (Prior code § 2903.276; Ord. 27768.)

• A. The retirement board shall determine and fix, and from time to time it may change, the amount of monthly or biweekly contributions for current service which must be required of the City of San José and of members of this

  • plan to make and keep this plan and the retirement system at all times actuarially sound as provided under Section 3.36.540B. For the purpose of this section, "contributions for current service" for members employed in the fire department shall mean the sum of the normal costs for each actively employed member in the fire department as determined under the entry age normal actuarial cost method, divided by the aggregate current compensation of such members, and "contributions for current service" for members employed in the police department shall mean the sum of the normal costs for each actively employed member in the police department as determined under the entry age normal actuarial cost method, divided by the aggregate current compensation of such members. Rates for current service shall not include any amount required to make up any deficit resulting from the fact that previous rates of contribution made by the city and members were inadequate to fund benefits attributable to service rendered by such members prior to the date of any change of rates, and shall not include any amount required for payment of medical or dental insurance benefits. Notwithstanding the foregoing, members subject to this Subsection A. shall be responsible for any additional contributions described in Section 3.36.410, to the extent applicable to such member.

• B. For the purposes of this section, the "entry age normal actuarial cost method" means the actuarial calculation which divides the actuarial present value of a member's future benefits, determined as of the date of the member's employment by the actuarial present value of the member's future salaries, determined as of the date of the member's employment in order to determine the member's normal cost rate. The "current year normal cost" for a member is the member's normal cost rate multiplied by the member's current compensation.

• C. The City of San José and the members of this plan shall make and pay all such monthly or

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biweekly contributions as are found necessary and as are fixed by the retirement board. Except as provided under Section 3.36.410, for members other than tier 2 members, the monthly or biweekly contributions required of members, as compared to the monthly or biweekly contributions required of the city, shall at all times be in the ratio of three to eight (3:8). Except as provided under Section 3.36.410, for tier 2 members, the monthly or biweekly contributions required of tier 2 members and the city shall at all times be in the ratio of one for the city to one for the members (1:1) (sharing equally).

required of members, as compared to the monthly or biweekly contributions required of the city, shall at all times be in the ratio of three to eight (3:8). Except as provided under Section 3.36.410, for tier 2 members, the monthly or biweekly contributions required of tier 2 members and the city shall at all times be in the ratio of one for the city to one for the members (1:1) (sharing equally).

D. With respect to monthly or biweekly contributions required of members, the retirement board shall determine and fix, and from time to time change, the rate of contribution as a percentage of a member's monthly or biweekly compensation. The rate of contribution may be different for members employed in the fire department and members employed in the police department, depending on the benefits provided to such members, but it shall be the same percentage for all members in the fire department and shall be the same percentage for all members in the police department, except as otherwise provided under Section 3.36.410 or another provision of this Chapter 3.36. For tier 2 members, the rate of contribution may be different than for other non-tier 2 members, but it shall be the same percentage for all tier 2 members in any department, except as otherwise provided under Section 3.36.410 or another provision of this Chapter 3.36. The retirement board shall furnish such information to the director of finance so that payroll deductions may be made as provided in Section 3.36.1510.

E. There shall be no offset to normal cost contribution rates in the event plan funding exceeds one hundred percent. Both the city and employees shall always make the full annual required plan contributions as calculated by the retirement board actuaries which will be in

compliance with applicable laws and will ensure the qualified status under the Internal Revenue Code.

(Prior code § 2903.280; Ords. 19690, 23432, 27721, 29266, 29879, 30007.)

The city and tier 2 members shall share in all costs of tier 2 of the retirement plan, including but not limited to administrative expenses, normal cost, and unfunded actuarial liability in the manner described in Section 3.36.410. The employee contributions for tier 2 members for each month (or for each two weeks, if compensation is paid biweekly by the city) shall represent the member's portion of the shared cost for such period. (Ords. 28753, 29266, 29879.)

The city shall be credited with any and all contributions made by it to the retirement system or fund pursuant to this chapter. (Prior code § 2903.278.)

Each member's or other person's contribution deducted or otherwise paid to the director of finance shall be credited by the director of finance to an individual account of the member or other person for whom the contribution was made. Payment of salaries or wages less such contributions is in full discharge of all claims and demands whatsoever for the service rendered by the members during the period covered by such payment, except the benefits afforded by this chapter.

(Prior code § 2903.277; Ord. 25084.)

• A. If any person who is a member of or a recipient of or entitled to any benefits under the police and fire department retirement plan established by Chapter 3.32, or who has made

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• any contributions thereto, elects, pursuant to and as may be authorized by the provisions of this chapter, to become a member of this system or to receive any benefits provided by this system, in lieu of being a member of or receiving any benefits pursuant to the provisions of the police and fire department retirement plan established by Chapter 3.32, any and all contributions theretofore made by said member or person to the police and fire department plan established by Chapter 3.32 and therein credited to him or her shall be paid or transferred to this system and credited to such member or person as a contribution made by him or her to this system for or on account of all service rendered by said member or person prior to the time he or she becomes a member of or elects to receive any benefits under this system for which service such member or person is given credit under this system, and for payment of benefits required by this system to be paid because of service rendered by such member or person prior to the time he or she becomes a member of or elects to receive any benefits under this system. Anything elsewhere in this chapter to the contrary notwithstanding, no person who has been or is a member of, or is entitled to receive or is receiving any benefits under the police and fire department retirement plan established by Chapter 3.32 may become a member of this system or be entitled to any benefits hereunder unless he or she agrees to the above, and such transfers or contributions are made or paid as above provided. Any such member or person shall be deemed to have agreed to the above upon electing to become a member of this system or upon electing to receive any benefits thereunder.

• B. In addition, all contributions heretofore or hereafter made by the City of San José to the police and fire department retirement plan established by Chapter 3.32 for or on account of service rendered by any of the abovementioned members or persons prior to the

  • time they became members of this system or elected to receive any benefits hereunder for which service such members or persons are given credit under this system, shall be transferred to this system and credited to the City of San José as part of its contributions to this system for or on account of said prior service rendered by said members or persons prior to the time they became members of or elected to receive any benefits under this system and for the payment of benefits required to be paid by this system because of such prior service of said members or persons.

nsferred to this system and credited to the City of San José as part of its contributions to this system for or on account of said prior service rendered by said members or persons prior to the time they became members of or elected to receive any benefits under this system and for the payment of benefits required to be paid by this system because of such prior service of said members or persons.

• C. In addition, the City of San José shall contribute to the retirement fund, monthly, all such amounts as the retirement board shall find must be contributed to the fund, on account of service rendered by members or other persons prior to the effective date of this chapter and on account of benefits payable because of such prior service to make this plan actuarially sound as provided under Section 3.36.540B., to the extent that such amounts are not provided by such members' or persons' accumulated prior service contributions and said city's prior contributions for such prior service.

• D. In addition, except as provided in Subsection E. below and Section 3.36.1555, the City of San José shall contribute to the retirement fund, monthly, all such amounts as the retirement board shall find must be contributed to the fund, to make this plan actuarially sound as provided under Section 3.36.540B., to the extent that such amounts are not provided by member and city's current service contributions as provided for in Section 3.36.1520.

• E. To the extent this Section 3.36.1550 implicates the benefits of a tier 2 member or a member who, prior to August 4, 2013 for police and prior to January 1, 2015 for fire were non-tier 2 members of this plan and then became tier 2 members prior to March 31, 2017 but on and after March 31, 2017 remain in the plan but are no longer considered tier 2 members under the definition of tier 2 member under Section

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3.36.020.15, the rates of contribution for such members and the city shall be determined in accordance with Section 3.36.410, including any amount designed to recover the difference between the amount of normal contributions theretofore actually required to be paid by members and the city and any greater amount which, because of amendments hereafter made to this system or as a result of experience under this system, said members or the city should have theretofore been required to pay in order to make the abovementioned pensions, allowances and other benefits which are or will become payable to such members. (Prior code § 2903.279; Ords. 19690, 25614, 29266, 29879.)

• A. The members of this plan shall contribute to the retirement fund that portion of the contributions for prior service which is attributable to the contributions that would have been made as contributions for current service by members of this plan because of the increased benefits provided by Section 3.36.805 and Section 3.36.1020.B.3 had the members made such contributions from February 4, 1996, to the effective date of the contribution rates adjustments to implement such benefits. The rate of contribution for such prior service, expressed as a percentage of payroll, shall be the same percentage for all members.

• B. The members of this plan who are employed in the police department shall contribute to the retirement fund that portion of the contributions for prior service which is attributable to the contributions that would have been made as contributions for current service by such members because of the increased benefits provided by Ordinance No. 27721 had the members made such contributions from July 1, 2006, to the effective date of the contribution rates adjustments to implement such benefits. The rate of contribution for such prior

service, expressed as a percentage of payroll, shall be the same percentage for all members who are employed in the police department.

• C. The prior service costs payable by members of this plan pursuant to subsections A. and B. shall be amortized over the same period of time as the city's contributions for prior service costs for the benefits referenced in subsections A. and B., respectively, are amortized.

• (Ord. 25614, 27992.)

If any other contributions are required of a person or persons under provisions of other parts of this chapter, either as a condition to becoming a member of this system; or as a condition to receiving any benefit hereunder, or for any other reason the same shall be paid by such person or persons as provided by said other provisions. (Prior code § 2903.281.)

Except as provided in Section 3.36.190, if the membership of a member of this system terminates for any reason other than death or retirement, or in the case of a tier 2 member with ten years of service, and his accumulated contributions are returned to him or withdrawn by him, the city shall not receive a refund of its contributions made for such member nor receive a credit for such contributions against other contributions required to be made by the city. (Ords. 20276, 29266.)

From and after July 12, 1987, all administrative expenses of this retirement plan, as determined and approved by the board, including staff salaries and indirect labor costs, shall be paid from the retirement fund. The payment of said expenses shall be subject to such limitations on said expenses as may be agreed upon by the city and the employee organizations representing members of this plan

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and set forth in the appropriate memoranda of agreement. Expenses in excess of said limitations, if any, shall be paid by the city.

All administrative costs related to providing benefits for tier 2 members of the system, as determined and approved by the board, shall be reflected in contribution rates so that such costs are shared equally by the tier 2 members and the city in accordance with Section 3.36.410.

All administrative costs related to tier transition of members who prior to August 4, 2013 for Police and prior to January 1, 2015 for Fire were non-Tier 2 members of this Plan and then became Tier 2 members prior to March 31, 2017 but on and after March 31, 2017 remain in the Plan but are no longer considered Tier 2 members as defined under Section 3.36.020.15, shall be reflected in contribution rates so that such costs are shared equally by the impacted Tier 1 members and the city in accordance with Section 3.36.410.

(Prior code § 2903.282; Ords. 20065, 20849, 21164, 21243, 22678, 22704, 29266, 29879, 30007.)

• A. For the purposes of this section, contributions "picked up" by the city means contributions to this plan which are designated as employee contributions but are treated as employer contributions for income tax purposes as authorized by Section 414(h)(2) of the Internal Revenue Code (26 U.S.C.A. 414(h)(2)).

• B. Notwithstanding any other provisions of law, the city may pick up, for the sole and limited purpose of deferring taxes as authorized by Section 414(h)(2) of the Internal Revenue Code (26 U.S.C.A. 414 (h)(2)) and Section 17501 of the California Revenue and Taxation Code, all or a portion of the contributions required to be paid by a member of this plan.

• C. Nothing herein shall be construed to mean that any contributions so picked up by the city are to be treated as city contributions for any purpose other than the sole and limited purpose specified herein. Any contributions so picked up by the city shall be paid into the

retirement fund and shall be treated in the retirement fund in the same manner as such contributions would be treated if they had not been picked up by the city. The member shall have no right to receive such picked up contributions directly but instead they must be paid to the retirement fund.

• D. Subject to applicable laws relating to meet and confer requirements, the city shall retain the authority periodically to increase, reduce or eliminate the pickup by the city of all or a portion of the contributions required to be paid by a member of this plan.

(Ords. 22458, 26005, 28030, 28886.)

• A. Such monthly or biweekly contributions as are required of the city by the provisions of this Part 10 shall be paid by the city within ten (10) days from and after the end of the month or two-week period for which they are made.

• B. In lieu of making the monthly or biweekly contributions specified in this Part 10 for the pay periods commencing with the third pay period in fiscal year 2008-09, the city shall have the option to make, on or before August 1, 2008, an advance lump sum payment of the city's contributions to the medical benefits account and the retirement fund. The amount of such advance lump sum payment for fiscal year 2008-09 shall be as determined by the board to be actuarially equivalent to the monthly or biweekly payments that would otherwise have been the city's required contributions to the medical benefits account and the retirement fund for the pay periods commencing with the third pay period in fiscal year 2008-09.

• C. Commencing with fiscal year 2009-10, the city shall have an annual option to select the advance periodic basis on which city contributions to the medical benefits account and to the retirement fund for that fiscal year will be paid; provided that such payment schedule shall be no less frequent than quarterly. Ex-

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cept as may otherwise be agreed to by the board, the notice of intent to exercise the option, including the advance periodic basis selected and the payment date(s) (the "notice of intent"), shall be provided by the city manager to the board on or before April 30th of the fiscal year prior to the fiscal year in which city may wish to exercise the option. The amount of the advance periodic payment(s) contained in city's notice of intent shall be as determined by the board to be actuarially equivalent to the monthly or biweekly payment that would otherwise have been required.

• D. In the event that written notice of intent to exercise the option to select an alternative periodic payment schedule, has not been given by the city manager to the board on or before April 30th, or such other date as may be approved by the board, of each fiscal year, or if subsequent to the giving of such notice and prior to the commencement of the fiscal year, city elects not to exercise the option to select an alternative periodic payment schedule, city's payment of the city's contributions to the medical benefits account and to the retirement fund shall be made monthly or biweekly as otherwise specified in this Part 10.

• E. Such alternative periodic payments as are made by the city pursuant to the provisions of this Part 10 shall be paid by the city within ten (10) days of the payment date(s) specified in city's notice of intent.

• F. No later than the end of the second pay period in the fiscal year immediately following a fiscal year in which city has made a lump sum payment as specified in paragraph B. and C., city shall provide to the board a statement showing the actual amount of the city's payroll for members of the plan for the prior fiscal year. The board shall then determine whether the lump sum advance payment(s) and the payment(s) that would otherwise have been required in the absence of the lump sum advance payment(s) are actuarially equivalent. The city shall pay any underpayment by the earlier of

ten (10) days following receipt of the board's notice of determination or city's next contribution due date. The city shall receive credit for any overpayment in the form of an offset against the next payment(s) due by the city.

• G. In the event that a city elected lump sum payment is made later than the payment date specified in the city's notice of intent, city's contribution to the medical benefits account and to the retirement fund will be recalculated by the board's actuary, at the city's expense, to reflect the timing difference. The city will pay the difference within ten (10) days of the date that the board's notice of the amount due is received.

• H. Any late payment to be made later than ten (10) days after the payment date specified in the city's notice of intent is subject to approval by the board.

• (Ord. 28332.)

Part 11

SUSPENSION OR TERMINATION

Sections:

• 3.36.1600 Suspension of membership - Conditions - Award of benefits prohibited.

• 3.36.1610 Termination of membership.

• 3.36.1620 Return of contributions upon resignation, discharge or permanent discontinuance of service - Less than twenty years' service (less than five years' service for tier 2 members).

• 3.36.1630 Reserved.

• 3.36.1640 Monthly allowance or return of contributions to certain persons with ten or more years of service whose membership terminates before retirement.

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• 3.36.1660 Survivorship benefits payable where person eligible for monthly allowance under Section 3.36.1640 dies before receiving same.

• 3.36.1670 Survivorship benefits payable where person eligible for monthly allowance under Section 3.36.1640 dies after receiving same.

• 3.36.1680 Return of contributions to certain survivors of person who dies before reaching fifty-five and before twenty years have elapsed from the time such person first became a member.

• 3.36.1690 Cost of living increases.

• 3.36.1700 Transfer of contributions to federated city employees' retirement system in time and manner specified in Sections 3.24.1080 or 3.28.650.

• 3.36.1710 Transfer of contributions to federated city employees' retirement system, in the manner and time specified in Sections 3.24.1090 or 3.28.660.

• A. A person's membership in this retirement system shall be deemed automatically suspended for and during any and each of the following periods of time:

  1. Any period of time for or during which such person is temporarily suspended from city service, unless such person is entitled to credit for such time as service pursuant to the provisions of Section 3.36.640;

  2. Any period of time for or during which such person is temporarily laid off from city service because of lack of sufficient work requiring his or her services;

  3. Any period of time for or during which such person has received or is on a leave

of absence without full monthly compensation, regardless of whether or not such person may be entitled to credit for such time as service under and by virtue of other provisions of this chapter, excepting those leaves of absence to perform other city service which are specified in Subsections G. and H. of Section 3.36.610; and excepting those leaves of absence for the performance of military or naval duty for the United States of America in time of war or national emergency pursuant to Section 3.36.620 or as qualified military service as defined under Internal Revenue Code Section 414(u)(5);

4. Any other period of time for or during which such person is not receiving or entitled to receive such full monthly compensation as is otherwise provided for such person's class of position, regardless of whether or not such person may be entitled to credit for such time, as service, under and by virtue of other provisions of this chapter, excepting those leaves of absence to perform other city service which are specified in Subsections G. and H. of Section 3.36.610; and excepting those leaves of absence for the performance of military or naval duty for the United States of America in time of war or national emergency pursuant to Section 3.36.620 or as qualified military service as defined under Internal Revenue Code Section 414(u)(5);

5. Any other period of time for which such person is not entitled to credit as service under and by virtue of other provisions of this chapter.

• B. Upon expiration of any such period of time, and upon return of such person to active fulltime duty in the service of the city, such person's membership in this system shall be automatically reinstated as of the day he or she returns to such city service; provided, how-

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ever, that if any member is hired or rehired or reinstated to employment with the city on or after August 4, 2013, and meets the definition of a tier 2 member under Section 3.36.020.15, such member shall became a tier 2 member.

• C. Anything elsewhere to the contrary notwithstanding, no person shall be entitled to any disability retirement or to any disability retirement allowance because of any disability which occurs or arises during any period of time for or during which his or her membership is suspended by virtue of the provisions of this section, nor to the return of any contributions or interest thereon because of the suspension of his or her membership or while his or her membership is suspended. Also, except as may be otherwise specifically provided by the provisions of Subsection A.2. of Section 3.36.1200 and Subsection A.2. of Section 3.36.12, no surviving spouse, surviving domestic partner, surviving child or children, nor any estate, nor any other person, shall be entitled to any survivorship, death or other allowance or benefit under or by virtue of any provisions of this chapter because of any person's death if such death occurs during any time for or during which such deceased person's membership was suspended.

• D. In the event survivorship benefits are paid pursuant to Subsection A.2. of Section 3.36.1200 or Subsection A.2. of Section 3.36.1250, because of the death of a member while on leave of absence to perform military or naval duty in time of war or national emergency, the monthly survivorship allowance shall be reduced by the amounts received by the survivor to whom the allowance is paid pursuant to the United States Social Security Act or other federal benefits program where such amounts are received by the survivor because the death of the member incurred while on such leave of absence.

(Prior code § 2903.300; Ords. 23807, 24081, 27712, 29266, 29332, 29879.)

A person's membership in this retirement system shall be deemed automatically terminated upon the occurrence of any of the following events:

• A. Retirement of such person, under the provisions of this plan, for service or disability;

• B. Death of such person, where his membership has not already been terminated for some other reason;

• C. Resignation or discharge of such person from, or transfer of such person from, any position specified in Sections 3.36.170 or 3.36.200 which is held by him, unless he resigns or is transferred from such position to accept appointment to, or to be appointed to, and is immediately upon such resignation or transfer appointed to another position specified in said Sections 3.36.170 or 3.36.200, or discontinuance of such person's service in any such position so held by him because of abolition or discontinuance of such position, unless such person is immediately transferred upon discontinuance or abolition of such position to a position specified in Sections 3.36.170 or 3.36.200;

• D. Resignation or discharge of such person from, or transfer of such person from, any position specified in Sections 3.36.180, 3.36.210 or 3.36.260 which is held by him, unless he resigns or is transferred from such position to accept appointment to, or to be appointed to, and is immediately upon such resignation or transfer appointed to, a position specified in Sections 3.36.170 or 3.36.200, or discontinuance of such person's service in any such position, unless such person is immediately transferred upon discontinuance or abolition of such position to a position specified in Sections 3.36.170 or 3.36.200;

• E. Any discontinuance of such person's service in any position specified in Sections

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3.36.170, 3.36.180, 3.36.200, 3.36.210 or

3.36.260 which is held by him, by reason of any suspension, layoff or leave of absence which is found by the retirement board to have resulted in permanent discontinuance of such service, as of the date of such finding by said retirement board, unless such permanent discontinuance of service is to accept appointment or transfer to, and such person is immediately upon such discontinuance transferred or appointed to, another position specified in Sections 3.36.170 or 3.36.200. (Prior code § 2903.301.)

• A. Any person entitled to credit for less than twenty years aggregate service (five years aggregate service in the case of a tier 2 member) whose membership is terminated for any of the reasons set forth in Subsections C. or D. of Section 3.36.1610 shall receive from the retirement fund all contributions made by him to the fund which have not theretofore been withdrawn by him, plus interest thereon as earned by said fund during the period of his aggregate service, but in no event shall any member receive interest on his accumulated contributions in excess of two percent per year. Neither said person or any survivor or estate of such person shall thereafter be entitled to any other allowance or benefit under this system. In any case, under the terms of this plan where a person is entitled to a return of employee contributions, such return of contributions shall include an amount equal to the amount of the employee contributions to the medical benefits account, plus interest accrued thereon at the rate of two percent per annum; provided, however, that no such return of contributions shall be paid from the medical benefits account.

• B. If, on or after March 28, 2005, the member is to receive a distribution of an eligible rollover distribution, with a present value greater than one thousand dollars, and if a member does not elect to have such distribution paid directly to an eligible retirement plan specified by member in a direct rollover or to receive the distribution directly, then the system shall pay the distribution in a direct rollover to an individual retirement plan designated by the board in accordance with Section 401(a)(31)(B) of the Internal Revenue Code and IRS Notice 2005-5.

(Prior code § 2903.302; Ords. 28886, 29266, 29879.)

Editor’s note— Ord. 27768, § 32, adopted June 20, 2006, repealed § 3.36.1630, which pertained to right of member under fifty-five years of age with more than twenty years' service to withdraw contributions or to continue contributions upon resignation, discharge or permanent discontinuance of service.

• A. Any person credited with ten or more years of service on or after July 1, 1976, in this retirement plan whose membership is terminated after July 1, 1976, before such person retires, by reason of resignation or discharge, layoff or leave of absence deemed by the board to have resulted in permanent discontinuance (unless such permanent discontinuance is to accept transfer to or appointment to another position covered by the plan) shall have the right to elect in writing, on a form to be furnished by this plan, not later than ninety days after the date upon which notice of said right is mailed by this plan to the person's latest address on file in the office of this plan, whether to allow his or her accumulated contributions

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to remain in the retirement fund or to withdraw such contributions. Failure to make such election in writing shall be deemed an irrevocable election to withdraw his or her accumulated contributions. In the event of an election to withdraw, such person shall receive from the retirement fund the amount of such person's accumulated contributions to the fund, plus interest thereon as earned by the fund during the period of such person's service, but in no case shall the interest exceed two percent per annum. Thereafter, neither such person nor the surviving spouse, domestic partner, child or children, or estate of such person shall be entitled to any allowance or benefit whatsoever under the provisions of this chapter.

• B. If on or after March 28, 2005, the member is to receive a distribution of an eligible rollover distribution, with a present value greater than one thousand dollars, and if a member does not elect to have such distribution paid directly to an eligible retirement plan specified by member in a direct rollover or to receive the distribution directly, then the system shall pay the distribution in a direct rollover to an individual retirement plan designated by the board in accordance with Section 401(a)(31)(B) of the Internal Revenue Code and IRS Notice 2005-5.

• C. When both of the following conditions have been satisfied, a person (other than a tier 2 member) who has elected to allow his or her accumulated contributions to remain in the retirement fund may apply for a monthly allowance to be paid from the retirement fund:

  1. Such person attains fifty-five years of age; and

  2. Twenty years have elapsed from the time such person first became a member.

• D. A person who separates from city service on or after July 5, 1992, and is not a tier 2 member may apply for a monthly allowance to be paid from the retirement fund if the conditions of Subsection B. are satisfied or if both of the following conditions are satisfied:

  1. The person has attained fifty years of age; and

  2. At the time the person separated from city service, the person was entitled to not less than twenty-five years of service credit in this plan.

• E. The monthly allowance payable pursuant to this section shall be calculated as follows:

  1. For a person who separated from city service prior to February 4, 1996, the monthly allowance shall be equal to two and one-half percent of the person's final compensation for each full year of service. In no event shall the person's monthly allowance exceed a maximum of seventyfive percent of his or her final compensation.

  2. For a person who separated from city service on or after February 4, 1996, but prior to February 4, 2000, the monthly allowance shall be equal to two and onehalf percent of the person's final compensation for each of the first twenty years of service plus three percent of the person's final compensation for each full year of service in excess of twenty years of service. In no event shall the person's monthly allowance exceed a maximum of eighty percent of his or her final compensation.

  3. For a person who separated from city service on or after February 4, 2000, the monthly allowance shall be equal to two and one-half percent of his or her final compensation for each of the first twenty years of service plus three percent of his or her final compensation for each of the next five full years of service plus four percent of the person's final compensation for each full year of service in excess of the first twenty-five years of service; provided, however that in no event shall the monthly allowance exceed a maximum of eighty-five percent of the member's final compensation.

  4. For a person who was employed in the police department and who separated from city service on or after July 1, 2006,

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the monthly allowance shall be equal to two and one-half percent of his or her final compensation for each of the first twenty years of service plus four percent of the person's final compensation for each full year of service in excess of twenty years of service; provided, however that in no event shall the monthly allowance exceed a maximum of ninety percent of the member's final compensation.

5. For a person who was employed in the fire department and who separated from city service on or after July 1, 2008:

   • a. If the person was credited with less than twenty years of service credit at the time of separation from service, he or she shall be paid from the retirement fund a monthly allowance equal to two and one-half percent of his or her final compensation for each year of service credit.

   • b. If the person was credited with twenty or more years of service credit at the time of separation from service, he or she shall be paid from the retirement fund a monthly allowance equal to three percent of his or her final compensation for each year of service credit; provided, however, that in no event shall the monthly service retirement allowance exceed a maximum of ninety percent of the member's final compensation.

ted with twenty or more years of service credit at the time of separation from service, he or she shall be paid from the retirement fund a monthly allowance equal to three percent of his or her final compensation for each year of service credit; provided, however, that in no event shall the monthly service retirement allowance exceed a maximum of ninety percent of the member's final compensation.

• F. For the purposes of this Section 3.36.1640, "service" means service performed for the city and for which the member is entitled to credit under the provisions of this chapter. "Service" shall not include service as an officer or employee of a reciprocal agency which is used to qualify for benefits pursuant to Section 3.36.3020.

• G. In computing the amount of allowance payable, pro rata credit shall be given for a portion of a full year.

• H. At any time after electing to allow his or her accumulated contributions to remain in the retirement fund, the person may submit a written request for a return of such contributions, in which event such contributions shall be returned to such person plus interest thereon as earned by the fund to the date such contributions are returned, but in no case shall interest exceed two percent per annum. Thereafter, neither such person nor the surviving spouse, domestic partner, child or children, or estate of such person shall be entitled to any allowance or benefit whatsoever under the provisions of this chapter.

• I. For a person who is a tier 2 member and at the time the person separated from city service was entitled to not less than five years of service credit in this plan: Upon attaining a minimum age of fifty, he or she may apply for a retirement benefit from this retirement plan. The tier 2 member shall be paid from the retirement fund a monthly allowance determined, as applicable, under Section 3.36.808 or Section 3.36.809; provided, however, that in no event shall the annual amount of the service retirement allowance exceed a maximum of eighty percent of the member's final compensation. If the former tier 2 member applies for a benefit prior to attaining age fifty-seven, such retirement allowance shall be reduced by a factor seven percent for each year the tier 2 member retires before age fifty-seven, prorated to the closest month. The reduced benefit shall be determined by the actuary for the police and fire retirement plan. The early retirement reduction factors used are shown below:

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§ 3.36.1640 SAN JOSÉ CODE

Retirement Age Early Retirement Factor 50 0.51

At any time prior to commencing a benefit, in lieu of receiving a retirement benefit from the retirement plan, a tier 2 member may submit a written request for a return of his or her contributions, in which event such contributions shall be returned to such person plus interest thereon as earned by the fund to the date such contributions are returned, but in no case shall interest exceed two percent per annum. Thereafter, neither such person nor the surviving spouse, domestic partner, child or children, or estate of such person shall be entitled to any allowance or benefit whatsoever under the provisions of this chapter.

(Prior code § 2903.303a; Ords. 23807, 24200, 25614, 26229, 26836, 27712, 27721, 28300, 28886, 29266, 29879.)

Editor’s note— Ord. 27768, § 33, adopted June 20, 2006, repealed § 3.36.1650, which pertained to required election under Section 3.36.1630 or Section 3.36.1640.

• A. If after a person becomes entitled to the monthly allowance provided for in Section 3.36.1640, he or she should die before receiving any such allowance:

  1. Such deceased person's surviving spouse, surviving domestic partner, eligible surviving child or children (as said terms are defined in Section 3.36.1200), shall be entitled:

     • a. Under the conditions described in Subsections C. and D. of Section 3.36.1200, to a sum of money equal to all contributions of the deceased

person to the retirement fund plus interest thereon as earned by the fund to the deceased person's death, but in no case shall the interest exceed two percent per annum; and

  - b. Under the conditions described in Subsections F. and G. of Section 3.36.1200, and subject to the withholding provided for in Subsection H. of Section 3.36.1200, if a lump sum return of contributions and interest is chosen, a monthly allowance in the amount specified in Subsection B. of this section. 

2. Such deceased person's estate shall be entitled, under the conditions described in Subsection E. of Section 3.36.1200, to a return of the deceased person's contributions together with interest thereon to the date of death, but in no case shall the interest exceed two percent per annum.

• B. The amount of a monthly allowance payable under this section shall be:

  1. To a surviving spouse or surviving domestic partner, one and eight hundred seventyfive thousandths percent of the deceased person's final compensation for each full year of service; provided, however, that in no event shall the monthly allowance exceed a maximum of thirty-seven and five-tenths percent of such final compensation. Pro rata credit shall be given for a portion of a full year. The monthly allowance shall be paid for the life of the surviving spouse or surviving domestic partner.

  2. To one eligible surviving child, one and twenty-five hundredths percent of the deceased person's final compensation for each full year of service; provided, however, that in no event shall the monthly allowance exceed a maximum of twentyfive percent of such final compensation. Pro rata credit shall be given for a portion of a full year.

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§ 3.36.1670

3. To each of two eligible surviving children, one-half of the amount specified in the following paragraph a., below, or onehalf of the amount specified in the following paragraph b., below, whichever is the lesser amount:

   • a. One and eight hundred seventy-five thousandths percent of such deceased person's final compensation for each full year of service; provided, however, that in no event shall the combined monthly allowance payable to the children exceed a maximum of fifty percent of such final compensation. Pro rata credit shall be given for a portion of a full year.

• b. That percentage of the deceased person's final compensation which, when added to the percentage of such final compensation which is paid or payable to a surviving spouse or surviving domestic partner of such deceased person will not exceed a total of seventy-five percent of such final compensation.

4. To each of three or more eligible surviving children, the amount specified in the following paragraph a. or the amount specified in the following paragraph b., whichever is the lesser amount:

   • a. Two and five-tenths percent of such deceased person's final compensation for each full year of service, divided by the number of children entitled to receive an allowance; provided, however, that in no event shall the combined monthly allowance paid to the children exceed a maximum of seventy-five percent of such final compensation. Pro rata credit shall be given for a portion of a full year.

   • b. That percentage of the deceased person's final compensation which, when added to the percentage of

such final compensation which is paid or payable to a surviving spouse or surviving domestic partner of such deceased person will not exceed a total of seventy-five percent of such final compensation, divided by the number of children entitled to receive an allowance.

• C. Each child who, if he or she were under the age of eighteen years, would be a surviving child as defined in Section 3.36.1200, and entitled to payment of contributions and monthly allowance hereunder, shall, if he or she otherwise meets the eligibility requirements of Part 9, it being assumed for purposes of such part that such child would be entitled to a surviving child's monthly survivorship allowance under Part 8 if he or she were under eighteen years of age, be entitled to a child's school allowance for the time set forth in Section 3.36.1440 in the same amount, including return of contributions and monthly survivorship allowance as set forth above for surviving child and children.

• D. The aggregate benefit amount paid to the surviving spouse and surviving children of a tier 2 member under this Section 3.36.1660 shall not exceed eighty percent of the tier 2 member's final compensation.

(Prior code § 2903.303b; Ords. 19478, 23807, 26836, 27712, 29266, 29879.)

• A. If after a person becomes entitled to the monthly allowance provided for in Section 3.36.1640, he or she should die after receiving any such allowance, such person's surviving spouse, surviving domestic partner, surviving child or children (as said terms are defined in Section 3.36.1230) shall be entitled to a monthly allowance under the conditions described in Subsections C. and D. of Section 3.36.1320,

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the amount of such monthly allowance to be as set forth in Subsection B. of this section, and such deceased person's estate shall be entitled to a payment of one thousand dollars under the conditions described in Section 3.36.1230.E.

• B. The amount of such monthly allowance payable under this section shall be:

  1. To a surviving spouse or surviving domestic partner, one and eight hundred seventyfive thousandths percent of the deceased person's final compensation for each full year of service; provided, however, that in no event shall the monthly allowance exceed a maximum of thirty-seven and one-half percent of such final compensation. Pro rata credit shall be given for a portion of a full year. The monthly allowance shall be paid for the life of the surviving spouse or surviving domestic partner.

  2. To one eligible surviving child, one and twenty-five hundredths percent of the deceased person's final compensation for each full year of service; provided, however, that in no event shall the monthly allowance exceed a maximum of twentyfive percent of such final compensation. Pro rata credit shall be given for a portion of a full year;

  3. To each of two eligible surviving children, one-half of the amount specified in the following paragraph a., or one-half of the amount specified in the following paragraph b., whichever is the lesser amount:

     • a. One and eight hundred seventy-five thousandths percent of the deceased person's final compensation for each full year of service; provided, however, that in no event shall the combined monthly allowance payable to the children exceed a maximum

     • of fifty percent of such final compensation. Pro rata credit shall be given for a portion of a full year;

     • b. That percentage of the deceased person's final compensation which, when added to the percentage of such final compensation which is paid or payable to a surviving spouse or surviving domestic partner of the deceased person, will not exceed a total of seventy-five percent of such final compensation;

  4. To each of three or more eligible surviving children, the amount specified in the following paragraph a., or the amount specified in the following paragraph b., whichever is the lesser amount:

• a. Two and one-half percent of the deceased person's final compensation for each full year of service, divided by the number of children entitled to receive an allowance; provided, however, that in no event shall the combined monthly allowance paid to the children exceed a maximum of seventy-five percent of such final compensation. Pro rata credit shall be given for a portion of a full year.

  - b. That percentage of the deceased person's final compensation which, when added to the percentage of such final compensation which is paid or payable to a surviving spouse or surviving domestic partner of such deceased person, will not exceed a total of seventy-five percent of such final compensation, divided by the number of children entitled to receive an allowance. 
  

• C. Each child who, if he or she were under the age of eighteen years, would be a surviving child as defined in Section 3.36.1230 and entitled to payment of a monthly survivorship allowance hereunder shall, if he or she otherwise meets

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the eligibility requirements of this Part 9, it being assumed for purposes of such part that such child would be entitled to a surviving child's monthly survivorship allowance under Part 8 if he or she were under eighteen years of age, be entitled to a child's school allowance for the time set forth in Section 3.36.1440 in the same amount, including return of contributions and monthly survivorship allowance, as set forth above for surviving child and children.

• D. Such deceased person shall, for the purpose of the definition of spouse, domestic partner, child or children contained in this section, be deemed to have retired as of the date such deceased person first receives a monthly allowance hereunder.

• E. If a tier 2 member becomes entitled to the monthly allowance provided for in Section 3.36.1640 and he or she should die after receiving any such allowance, such person's surviving spouse, surviving domestic partner, surviving child or children (as said terms are defined in Section 3.36.1230) shall be entitled to benefits under this Section 3.36.1670 provided; however, such benefits shall not exceed an amount equal to eighty percent of the tier 2 member's final compensation.

(Prior code § 2903.303c; Ords. 23807, 26836, 27712, 29266, 29879.)

or E. of Section 3.36.1250, whichever is applicable, either (i) to the return from the retirement fund of a sum of money equal to such deceased person's contributions to the retirement fund, plus interest thereon to the date of death, as earned by such fund, but in no case shall the interest exceed two percent per year, or (ii) to the sum of one thousand dollars, whichever is greater. A surviving spouse or surviving domestic partner shall be paid benefits under this section regardless of whether the spouse or domestic partner is married or has established a domestic partnership at the time the benefits become payable.

f death, as earned by such fund, but in no case shall the interest exceed two percent per year, or (ii) to the sum of one thousand dollars, whichever is greater. A surviving spouse or surviving domestic partner shall be paid benefits under this section regardless of whether the spouse or domestic partner is married or has established a domestic partnership at the time the benefits become payable.

If the survivor benefit paid under this Section 3.36.1680 with respect to a tier 2 member is the sum of one thousand dollars, such amount shall be reduced to the extent it exceeds eighty percent of the tier 2 member's final compensation.

(Prior code § 2903.303d; Ords. 23807, 27712, 29266, 29879.)

All monthly allowances and monthly survivorship allowances payable under Sections 3.36.1640, 3.36.1660 and 3.36.1670 shall be eligible for and entitled to the cost of living increases or decreases set forth in Chapter 3.44 of this Code. For purposes of Section 3.44.040, such person shall be deemed to have retired as of the first day of the first period for which he receives a monthly allowance. (Prior code § 2903.303e; Ord. 18378.)

survivors of person who dies before reaching fifty-five and before twenty years have elapsed from the time such person first became a member.

If such person mentioned in Section 3.36.1640 should die before he or she reaches fifty-five years of age and before twenty years have elapsed from the time such person first became a member of this system, such deceased person's surviving spouse, surviving domestic partner, surviving child or children (as such terms are defined in Section 3.36.1250), or such deceased person's estate shall be entitled under the condition described in Subsections C., D.

• A. Subject to the provisions of Subsection B., in the event a person's membership in this plan is terminated because of the abolition or discontinuance of the office or position held by him or her in the police or fire department, but such person is transferred, without a break in service and without being requested to take any civil service examination therefor, to a new office or position in a department other than

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the police or fire department, and the functions and duties of his or her new office or position are substantially the same as those performed by him or her in the former office or position in the police or fire department, and if in addition he or she thereby becomes a member of the retirement plan established by Chapter 3.24 or Chapter 3.28 of this Code and elects and becomes entitled to receive credit under such plan for service to which he or she was entitled to credit under this plan, then in such event:

1. The person may elect, in lieu of receiving or being entitled to any other rights, benefits or moneys under this plan, to have all of his or her accumulated contributions in this retirement fund, with interest thereon, transferred and paid to the retirement fund established pursuant to Chapters 3.24 and 3.28. Such election shall be made in the manner and time specified in Section 3.24.1080 or 3.28.650.

2. Upon such election being made, said accumulated contributions and interest earned thereon, plus all contributions made by the city to this plan because of such person's membership herein, shall be transferred and paid to the retirement fund established pursuant to Chapters 3.24 and 3.28 of this Code, and thereafter, neither the person making such election nor any survivor or estate of such person shall be entitled to any rights, benefits, allowance or moneys under this plan.

• B. In the event the accumulated contributions in this retirement fund of a person who makes the election described in Subsection A. exceed the contributions required for the purchase of service credit in the Chapter 3.24 or 3.28 retirement plan and there is no provision in the Chapter 3.24 or 3.28 retirement plan for a credit against future contributions, then that portion of the accumulated contributions in this retirement fund that is in excess of the

contributions required for such purchase of service credit shall remain in this retirement fund and shall be refunded, plus accrued interest at the rate of two percent (2%) per annum, to the person at the time the person separates from city service,

(Prior code § 2903.304; Ord. 27768.)

• A. Subject to the provisions of Subsection B., in the event a person's membership in this plan is terminated, and if in addition he or she thereafter becomes a member of the retirement plan established by Chapter 3.24 or Chapter 3.28 of the San José Municipal Code and elects and becomes entitled under Section 3.24.1090, 3.28.650 or 3.28.660 to receive credit under such plan for service to which he or she was entitled to credit under this plan, then in such event:

  1. The person must elect to have all of his or her accumulated contributions in this Plan, with interest thereon, transferred and paid to the retirement fund established pursuant to Chapters 3.24 and 3.28 of this Code. Such election shall be made in the manner and time specified in Section 3.24.1090 or 3.28.660 of this Code.

  2. Upon such election being made, said accumulated contributions, and interest earned thereon, in accordance with said election, shall be transferred and paid to the retirement fund established pursuant to Chapters 3.24 and 3.28 of this Code, and thereafter, neither the person making such election nor any survivor or estate of such person, shall be entitled to any rights, benefits, allowance or moneys under this plan.

  3. Also, upon said election being made, all contributions made by the city to this retirement fund because of said person's

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• membership herein shall be transferred and paid to the retirement fund established pursuant to Chapters 3.24 and 3.28 of this Code.

• B. In the event the accumulated contributions in this retirement fund of a person who makes the election described in Subsection A. exceed the contributions required for the purchase of service credit in the Chapter 3.24 or 3.28 retirement plan and there is no provision in the Chapter 3.24 or 3.28 retirement plan for a credit against future contributions, then that portion of the accumulated contributions in this retirement fund that is in excess of the contributions required for such purchase of service credit shall remain in this retirement fund and shall be refunded, plus accrued interest at the rate of two percent (2%) per annum, to the person at the time the person separates from city service.

(Prior code § 2903.305; Ord. 27768.)

Part 12

INCREASED BENEFITS FOR CERTAIN PERSONS

Sections:

• 3.36.1750 Increased benefits to persons retired for service on or after April 12, 1960, to effective date of this chapter.

• 3.36.1760 Increased benefits for survivors of certain persons who died after April 12, 1960, but before effective date for this system, while members of plan established by Chapter 3.32.

• 3.36.1770 Increased benefits to persons retired for disability from April 12, 1960, to effective date.

• 3.36.1780 Persons with more than twenty years' service, under fifty-five years of age, who resigned or were discharged on or after April 12, 1960, and prior to the effective date of this chapter.

• A. Each person who, on or after April 12, 1960 but prior to the effective date of this chapter held any position in the police department or fire department in one of the classes of positions designated in Sections 3.36.170 or 3.36.200 of this chapter, and who, in addition, on or after April 12, 1960, and prior to the effective date of this chapter was retired for service from such position under the provisions of the police and fire department retirement plan established by Chapter 3.32 of this Code, shall have the option of hereafter receiving the benefits provided by this chapter, subject to all the provisions of this chapter, including survivorship and death benefits, the same as though he were retired for service pursuant to the provisions of this chapter in lieu of receiving or being entitled to any benefits or rights under the provisions of the police and fire department retirement plan established by Chapter 3.32 of this Code.

• B. Each of said persons in order to exercise his option, shall file with the secretary of the retirement board a written statement, on a form to be furnished to him on his request by said board, declaring that he elects to hereafter receive the benefits provided by this chapter in lieu of such benefits or rights as he may have under the provisions of the police and fire department retirement plan established by Chapter 3.32. Said statement shall be filed as aforesaid on or before and no later than the ninetieth day immediately following the effective date of this chapter. Upon filing said statement in the manner and time hereinabove specified, such person shall hereafter be entitled to benefits provided by this chapter, and shall be subject to all the provisions and conditions of

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this chapter, the same as if he had retired for service hereunder. Each such person so electing to receive the benefits provided by this chapter shall cease being a member of the retirement system established by Chapter 3.32 of this Code as of the date he exercises such option, and shall thereafter not be entitled to any of the benefits provided by the system established by said Chapter 3.32. (Prior code § 2903.325.)

• A. The surviving widow and surviving child or children of any person who on or after April 12, 1960, but prior to the effective date of this chapter held any position in the police department or fire department in one of the classes of positions designated in Sections 3.36.170 or 3.36.200 of this chapter and who, in addition, on or after April 12, 1960, and prior to the effective date of this chapter died while holding such a position, shall have the option of receiving the survivorship and death benefits, if any, provided by this chapter, subject to all the provisions of this chapter, the same as if the deceased person were a member of this retirement system at the time of his death, in lieu of receiving or being entitled to any benefit or rights under the provisions of the police or fire department retirement plan established by Chapter 3.32 of this Code; provided, that if such surviving widow has already received the deceased person's contributions to the retirement system established by Chapter 3.32, plus interest on said contributions, pursuant to Section 3.32.350, the monthly allowances payable to such widow and or child or children shall be withheld and not paid to the persons entitled to the same until such time as the total amount of allowances so withheld should equal the total amount paid to such surviving widow

pursuant to said Section 3.32.350 in the same manner and to the same extent as provided for in subsection A.6.i. of Section 3.36.1200 of this chapter. If said contributions and interest thereon have not been paid to such widow, then all of the provisions of this chapter shall be applicable thereto.

• B. Said option shall be exercised by such surviving widow on her own behalf and on behalf of all such children; and if there be no surviving widow, such option shall be exercised by the duly appointed guardian or guardians of all such surviving children.

• C. In order to exercise said option, such person shall file with the secretary of the retirement board a written statement on a form to be furnished by said board to such person on his request, declaring that he elects to receive the benefits provided by this chapter in lieu of any benefit or right as he may have under the provisions of the police and fire department retirement plan established by Chapter 3.32. Said statement shall be filed as aforesaid within sixty days from and after the effective date of the ordinance codified herein, and no later. Upon filing said statement in the manner and time hereinabove specified such person shall thereafter be entitled to make application for and receive the benefits, if any, provided by this chapter, and subject to all the provisions and conditions of this chapter. Each such person so electing to receive the benefits provided by this chapter shall thereafter have no right to any of the benefits provided by the retirement system established by Chapter 3.32 of this Code.

(Prior code § 2903.325a.)

• A. Each person who, on or after April 12, 1960 but prior to the effective date of this chapter held any position in the police department or fire departments in one of the classes of posi-

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• tions designated in Section 3.36.170 or 3.36.200 of this chapter, and who, in addition, on or after April 12, 1960 and prior to the effective date of this chapter was retired for serviceconnected or nonservice-connected disability from such position under the provisions of the police and fire department retirement plan established by Chapter 3.32 of this Code, shall have the option of hereafter receiving the benefits provided by this chapter, including survivorship and death benefits, subject to all the provisions of this chapter, for such serviceconnected or nonservice-connected disability, as the case may be, in lieu of receiving or being entitled to any benefits or rights under the provisions of the police and fire department plan established by Chapter 3.32 of this Code. In no event, however, shall any disability retirement allowance paid to him under the provisions of this chapter cover or be for any period of time preceding the effective date of this chapter.

• B. Each of said persons, in order to exercise his option, shall file with the secretary of the retirement board a written statement, on a form to be furnished to him on his request by said board, declaring that he elects to hereafter receive the benefits provided by this chapter in lieu of such benefits or rights as he may have under the provisions of the police and fire department plan established by Chapter 3.32 of this Code. Said statement shall be filed as aforesaid on or before and no later than the ninetieth day immediately following the effective date of this plan. Upon filing said statement in the manner and time hereinabove specified, such person shall hereafter be entitled to the benefits provided by this chapter, and shall be subject to all the provisions and conditions of this chapter, the same as if he had been retired for said disability hereunder. Each such person so electing to receive the benefits provided by this chapter shall cease being a member of the retirement system established by Chapter 3.32 as of the date he exercises such

option, and shall thereafter not be entitled to any of the benefits provided by said system established by Chapter 3.32.

(Prior cede § 2903.326.)

• A. Each person who held on or after April 12, 1960 but prior to the effective date of this chapter any position in the police department or fire department of the city which is included in the list of positions specified in Sections 3.36.170 or 3.36.200 of this chapter and who, in addition, on or after April 12, 1960 but prior to the effective date of this chapter resigned or was discharged from such position and who in addition at the time of such resignation or discharge had not yet attained fiftyfive years of age but was entitled to credit for not less then twenty years of service under the police and fire department retirement plan established by Chapter 3.32 of this Code, and who in addition at or prior to the time he or she exercises the option hereinafter given to him or her has not yet withdrawn from the retirement fund any contributions theretofore made by him or her under the provisions of the police and fire department retirement plan established by Chapter 3.32, shall have the right, if he or she so elects within the time and in the manner hereinafter specified, to have all his or her said contributions transferred to an account maintained under the provisions of this chapter and left in the retirement fund as contributions made by him or her under this chapter.

• B. Each of said persons, in order to exercise the option to have his or her contributions transferred to an account maintained under the provisions of this chapter as provided for in this section, shall file with the secretary of the retirement board a written statement, on a

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form to be furnished by said board upon his or her request, declaring that he or she elects to have all contributions theretofore made by him or her under the police and fire department retirement plan established by Chapter 3.32 transferred to an account maintained under this chapter and left in the retirement fund as contributions made by him or her under this chapter. Said statement shall be filed as aforesaid on or before and no later than the ninetieth day immediately following the effective date of this plan. In no event may said statement be filed, and in no event may any such person elect to continue contributions under this section and have any rights under this section if the person has already withdrawn from the retirement fund all contributions theretofore made by him or her to said fund.

(Prior code § 2903.327; Ord. 27768.)

Any and all allowances or benefits payable under and by virtue of the provisions of this Part 12 may be cancelled and terminated by the retirement board, in its discretion, if the recipient thereof should commit treason or be convicted of a felony. (Prior code § 2903.328.)

Part 13

DEATH WHILE ON MILITARY LEAVE OF ABSENCE

Sections:

• 3.36.1820 Times for and during which survivor's benefit is payable.

• 3.36.1830 Benefits or allowances - Conditions.

As used in this Part 13:

• A. "Armed forces of the United States" means the United States Air Forces, Army, Navy, Marine Corps, Coast Guard, and the Army and Navy Nurse Corps, and no other forces or service.

• B. "Social Security Act" means those provisions of the Federal Social Security Act which are set forth in Subchapter II of Chapter 7 of Title 42 of the United States Code Annotated.

• C. "State Militia" and "Militia of the state of California" mean the California National Guard or California National Guard Reserve, and no other forces, or service.

• D. "Survivor of suspended member who dies in military service" means the widow, widower, surviving divorced wife, child, mother or parent, specified in Section 402 of the Social Security Act, if any, of the "suspended member who dies in military service," surviving after the death of the "suspended member who dies in military service," who:

  1. Is or will be entitled, upon or at any time after and because of the death of the "suspended member who dies in military service," to collect from the Federal Social Security Program, under and by virtue of the provisions of Section 402 of the Federal Social Security Act, and subject to the provisions of said Social Security Act, the widow's, widower's, surviving divorced wife's, child's, mother's or parents' survivors monthly insurance benefits (other than hospital insurance benefits, annuities, Medicare benefits or other nonmonthly survivors insurance benefits) specified in Section 402 of said Social Security Act; or

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2. Would be entitled, upon or at any time after and because of the death of the "suspended member who dies in military service," to collect from the Federal Social Security Program, under and by virtue of the provisions of the above specified Section 402 of the Federal Social Security Act and subject to the provisions of said Social Security Act, the widow's, widower's, survivor's, surviving divorced wife's, child's, mother's or parents' survivors monthly insurance benefits (other than hospital insurance benefits, annuities, Medicare benefits or other nonmonthly survivors insurance benefits) specified in Section 402 of said Social Security Act if the "suspended member who dies in military service" has been entitled to credit, under the provisions of said Federal Social Security Act, for period of city service rendered on or after July 1, 1958 only, for which such "suspended member who dies in military service" was entitled to credit under the provisions of the retirement system established by the provisions of this Chapter 3.36.

ty Act if the "suspended member who dies in military service" has been entitled to credit, under the provisions of said Federal Social Security Act, for period of city service rendered on or after July 1, 1958 only, for which such "suspended member who dies in military service" was entitled to credit under the provisions of the retirement system established by the provisions of this Chapter 3.36.

• E. "Suspended member who dies in military service" means a person whose membership in this retirement system is suspended in time of tar involving the United States as a belligerent under and by virtue of the provisions of Section 3.36.1600, because of the grant to him of a leave of absence without pay, from city employment for monthly compensation, for the purpose of joining the armed forces of the United States or for the purpose of serving with any reserve force or corps of the armed forces of the United States or with the Militia of the state of California, if, being a member of such reserve

force or corps or of such State Militia he is ordered by competent military authority to active duty with such reserve force or corps or State Militia, and who does in fact without unreasonable and unnecessary delay join such armed forces of the United States during the existence of said war or does in fact serve in active duty during the existence of said war with said reserve forces, corps or State Militia, and who in addition dies between the first day of October, 1967 and the thirtieth day of January, 1970, inclusive, during said suspension and leave of absence and while in active service in such armed forces of the United States, reserve forces or corps or State Militia and while said war still exists. Said term does not mean or include any such person who died or dies prior to October 1, 1967 or after January 30, 1970.

• F. "War involving the United States as a belligerent" shall be deemed to exist:

  1. Whenever Congress has declared war until peace has been formally restored or until Congress or the President proclaims or declares that such war or hostilities therein have ceased or terminated, whichever is earlier:

  2. Whenever the United States is engaged in active military operations against any foreign power, whether or not war has been formally declared; or

  3. Whenever the United States is assisting the United Nations, in actions involving the use of armed force, to maintain or restore international peace and security.

• (Prior code §§ 2903.350 - 2903.355.)

Subject to the conditions, limitations and restrictions set forth in this section and those set forth

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in other sections of this Part 13, each survivor of a suspended member who dies in military service, defined in Section 3.36.1800D, shall be entitled to receive, and shall be paid, from the retirement fund established and maintained pursuant to the other parts of this Chapter 3.36, for and during the time or times only which are hereinafter specified in Section 3.36.1820, a monthly survivorship allowance equal to the difference between:

• A. The amount of monthly survivors insurance benefit (other than hospital insurance benefits, annuities, Medicare benefits or other nonmonthly survivor's insurance benefits), if any, which such survivor is or will be entitled to collect from the social security program, for and during the time or times specified in Section 3.36.1820, because of death of the suspended member who dies in military service, under and pursuant to the provisions of Section 402 of and subject to the provisions of the Federal Social Security Act; and

• B. The amount of monthly survivors insurance benefit (other than hospital, insurance benefits, annuities, Medicare benefits or other nonmonthly survivor's insurance benefits) which survivor would be entitled to collect from the social security program, for and during the time or times hereinafter specified in Section 3.36.1820, because of the death of the suspended member who dies in military service, under and pursuant to the provisions of Section 402 of and subject to the provisions of the Federal Social Security Act, if the suspended member who dies in military service had been entitled to credit, under the provisions of the Federal Social Security Act, for the periods of city service rendered on or after July 1, 1958 only, for which the suspended member who dies in military service was enti-

tled to credit as city service under the provisions of the retirement system established by this Chapter 3.36. (Prior code § 2903.356.)

Any monthly allowance which is payable to a survivor of a suspended member who dies in military service under and pursuant to the preceding Section 3.36.1810 is and shall be payable only for and during the month or months for and during which such survivor would be entitled to a monthly survivor's insurance benefit (other than hospital insurance benefits, annuities, Medicare benefits or other nonmonthly survivor's insurance benefits) under and by virtue of the provisions of Section 402 of and subject to the provisions of the Federal Social Security Act, because of the death of the suspended member who dies in military service, if the suspended member who dies in military service had been entitled to credit, under the provisions of the Federal Social Security Act, for the periods of city service rendered on or after July 1, 1958 only, for which the suspended member who dies in military service was entitled to credit as city service under the provisions of the retirement system established by this Chapter 3.36. (Prior code § 2903.357.)

Anything elsewhere to the contrary notwithstanding, no person shall be entitled to or be paid any benefit or allowance whatever under and by virtue of any of the provisions of this Part 13 if:

• A. The membership of the suspended member who dies in military service in this retirement system shall have already been terminated, prior to his death, by retirement for service or disability, resignation, discharge, discontinuance of service, or by the occurrence of any other event, under and by virtue of the provisions of Section 3.36.1610 of this chapter; or

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• B. Said suspended member who dies in military service was entitled, at or prior to his death, to immediate retirement for service under the provisions of the retirement system established by this Chapter 3.36; or

• C. Said suspended member who dies in military service, at the time of commencement of the leave of absence specified in Section 3.36.1800E, was not entitled to credit, under the provisions of this retirement system, for at least two years of service under this retirement system; or

• D. Any survivor or estate of said suspended member who dies in military service is entitled to any allowance or other benefit under and by virtue of the provisions of other parts of this Chapter 3.36 as a result of the death of the suspended member who dies in military service, unless each such survivor and estate waives his or its right to receive any and all allowances or benefits payable to them or either of them under the provisions of other parts of this chapter; or

• E. Said suspended member who dies in military service after joining the armed forces of the United States, or after reporting to active duty with a reserve force or corps of such armed forces, or with the State Militia, pursuant to orders of competent military authority, and before dying, voluntarily requested or agreed to an extension of his original term of enlistment, service or tour of duty or to an additional term of enlistment, service or tour of duty, or otherwise continued his active service with said armed forces or militia beyond the first date that he could have terminated or left active service or could have caused his active service to be terminated; or

• F. Said suspended member who dies in military service had actively served in any of the armed forces of the United States, or

in any reserve force or corps of such armed forces of the United States, or in any reserve force or corps of such armed forces or with the State Militia, within two years immediately preceding the date of commencement of the leave of absence because of which his membership in this retirement system was suspended under and by virtue of the provisions of Section 3.36.1600, for any period of time in excess of thirty days' duration; or

• G. Said suspended member who dies in military service died prior to October 1, 1967 or after January 30, 1970.

(Prior code § 2903.358.)

Part 14

MEDICAL BENEFITS FOR CERTAIN PERSONS

Sections:

• 3.36.1900 Medical benefits for retired members.

3.36.1910 Medical benefits for survivors of members.

3.36.1920 Requirements for participation in medical insurance plan.

3.36.1925 Reimbursement for Medicare Part B payments.

• 3.36.1930 Allocation of costs of providing medical insurance coverage to members or survivors.

3.36.1935 Payment of family coverage premiums in the case of guardianship of minor children.

3.36.1950 Limitation on funding provided to retirement fund for medical benefits.

Subject to the provisions of this chapter, a member or former member may be entitled to med-

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§ 3.36.1900

ical insurance coverage in an eligible medical plan as specified in Section 3.36.1940 if the requirements of Subsection A., B., C., or D. of this Section 3.36.1900 are satisfied.

Effective March 31, 2017, this Part 14 shall not be applicable to tier 2 members and new employees and they shall not be eligible for medical insurance coverage under this Part 14. Notwithstanding the preceding sentence, the city manager has the authority and discretion to terminate tier 2 retiree medical benefits under this Part 14 prior to the implementation of Chapter 3.57. In the event the city manager exercises this authority, tier 2 members shall not be entitled to any benefits or make any additional contributions under this Part 14. Unless expressly stated otherwise, the term "member" or "former member" includes a tier 2 member and former tier 2 member for purposes of this Part 14. Effective March 31, 2017, tier 2 members and new employees shall be covered under the provisions of Chapter 3.57. Members who would otherwise be eligible for coverage under this Part 14 shall be provided a one-time irrevocable election to instead by covered under Chapter 3.57, in accordance with the process described in Chapter 3.57. Coverage under Chapter 3.57 shall not become effective until receipt of IRS approval to transfer member contributions previously contributed under Part 14 and Part 15 to the funding vehicle established under Chapter 3.57. The contributions to the plan by members and the city shall be as determined under Section 3.36.576.

• A. The member is retired for service under Part 6 of this chapter or for disability under Part 7 of this chapter and at the time of such retirement either:

  1. Is entitled to credit for fifteen or more years of service; or

  2. Receives a retirement allowance equal to at least thirty-seven and one-half percent of such member's final compensation.

• B. The member is retired pursuant to Section 3.36.760 of this chapter; or

• C. The former member separates from city service on or after July 5, 1992, prior to retirement, and satisfies all of the following requirements:

  1. At the time of separation from city service, the former member is entitled to credit for twenty or more years of service; and

  2. The former member elects to allow his or her accumulated contributions to remain in the retirement fund pursuant to Section 3.36.1640; and

  3. The former member receives a monthly allowance pursuant to Section 3.36.1640.

• D. The former member separated from city service prior to July 5, 1992, and prior to retirement, and satisfies all of the following requirements:

  1. At the time of separation from city service the former member was entitled to credit for twenty or more years of service; and

  2. The former member elected to allow his or her accumulated contributions to remain in the retirement fund pursuant to Section 3.36.1640; and

3. As of April 1, 2002, the former member was receiving a monthly allowance pursuant to Section 3.36.1640; and

   4. The former member is receiving a monthly allowance pursuant to Section 3.36.1640 at the time the former member applies for medical insurance coverage.

• E. Any member who meets the requirements of Subsection A., B., C. or D. of this Section 3.36.1900 and is thereby eligible for coverage but instead elects to participate in the "in lieu" premium credit option described in Section 3.36.1955, and later elects to again be covered under

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the city's medical coverage during the annual open enrollment period or upon the occurrence of another event identified by the medical plans as providing such individuals with an opportunity to elect to be covered under the city's medical coverage shall be required to pay the full cost of the member's portion of coverage under this Part 14.

F. Notwithstanding the exclusion of tier 2 members and new employees from coverage under Part 14, if a tier 2 member or new employee covered under Chapter 3.57 meets the requirements of Section 3.57.300, such person shall be entitled to receive a benefit as described under Section 3.57.310. The benefit described under Section 3.57.310 shall be paid from the assets set aside to provide benefits under this Part 14. Such benefits shall cease at the time the tier 2 member or new employee becomes eligible for coverage under Medicare.

(Ords. 21686, 23889, 24093, 25615, 26641, 29266, 29879, 30044.)

Subject to the provisions of this chapter, the surviving spouse, surviving domestic partner, child and/or children, as those terms are defined in Section 3.36.1200 of this chapter, may be entitled to medical insurance coverage in an eligible insurance plan as specified in Section 3.36.1940 if the requirements of Subsection A., B., or C. of this Section 3.36.1910 are satisfied. Effective March 31, 2017, this Part 14 shall not be applicable to the surviving spouse, surviving domestic partner, child and/or children, of new employees and they shall not be eligible for medical insurance coverage under this Part 14.

• A. The surviving spouse, surviving domestic partner, surviving child and/or chil-

dren are receiving a monthly allowance pursuant to Part 8 of this chapter because of the death of a member and:

  1. The member either died before receiving retirement pay or was retired for service under Part 6 of this chapter or for disability under Part 7 of this chapter; and 

  2. At the time of the member's death: 

     - a. The member was entitled to credit for fifteen or more years of service; or 

     - b. The member was retired pursuant to Section 3.36.760 of this chapter; or 

     - c. The surviving spouse, surviving domestic partner, surviving child and/or children were entitled to a survivorship allowance of at least thirty-seven and one-half percent of the member's final compensation. 

• B. The surviving spouse, surviving domestic partner, surviving child and/or children are receiving a monthly allowance pursuant to Part 11 of this chapter because of the death of a former member who separated from city service on or after July 5, 1992, and who was entitled to credit for twenty or more years of service at the time of such separation from service.

• C. The surviving spouse, surviving domestic partner, surviving child and/or children are receiving a monthly allowance pursuant to Part 11 of this chapter because of the death of a former member who separated from city service prior to July 5, 1992, and who met all of the requirements of Subsection D. of Section 3.36.1900.

• D. Any survivor who meets the requirements of Subsection A., B. or C. of this Section 3.36.1910 and is thereby eligible for coverage but instead elects to partici-

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• pate in the "in lieu" premium credit option described in Section 3.36.1955, and later elects to again be covered under the city's medical coverage during the annual open enrollment period or the occurrence of another event identified by the medical plans as providing such survivors with an opportunity to elect to be covered under the city's medical coverage shall be required to pay the full portion of the member's cost of coverage under this Part 14.

(Ords. 21686, 23807, 23889, 24093, 26641, 27712, 29879.)

• A. A member or former member, as specified in Section 3.36.1900, above, is eligible to participate in a medical insurance plan sponsored by the City provided that the member or former member satisfies the following requirements:

  1. The member retires for service or disability pursuant to the provisions of this Chapter and at the time of retirement the member applies for medical insurance coverage in accordance with the applicable provisions of the medical insurance plan and agrees to pay any applicable premiums; or

  2. The former member receives a monthly allowance pursuant to Section 3.36.1640 and within thirty (30) days of first receiving such monthly allowance the former member applies for medical insurance coverage in accordance with the applicable provisions of the medical insurance plan and agrees to pay any applicable premiums; or

  3. The member retires for service or disability pursuant to the provisions of this Chapter and waives coverage in the form and manner prescribed by the City indicating that he or she has medical coverage at the time of retirement other than

     • coverage under the City's medical insurance coverage and later applies for medical insurance coverage upon the occurrence of an event identified by the medical plans as providing such individuals with an opportunity to elect to be covered under the City's medical coverage, or if there is no qualifying event, applies for medical insurance coverage during the annual open enrollment period, and agrees to pay any applicable premiums within thirty (30) days of the termination of the prior coverage or the commencement of coverage following open enrollment as applicable; or

  4. The former member receives a monthly allowance pursuant to Section 3.36.1640 and executes a waiver of coverage in the form and manner prescribed by the City indicating that he or she has medical coverage at the time he or she first receives such monthly allowance other than coverage under the City's medical insurance coverage and later applies for medical insurance coverage upon the occurrence of an event identified by the medical plans as providing such individuals with an opportunity to elect to be covered under the City's medical coverage, or if there is no qualifying event, applies for medical insurance coverage during the annual open enrollment period, and agrees to pay any applicable premiums within thirty (30) days of the termination of the prior coverage or the commencement of coverage following open enrollment as applicable.

• B. A survivor, as specified in Section 3.36.1910, above, is eligible to participate in a medical insurance plan sponsored by the City provided that the following conditions are satisfied:

  1. At the time of the death of the member or former member, the member or former member and the survivor were both enrolled in one (1) of the medical insurance plans sponsored by the City; and

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2. The survivor applies to continue medical insurance coverage within sixty (60) days of the death of the member or former member; and

3. The survivor agrees to pay any applicable premiums.

   4. Notwithstanding the foregoing, if at the time of member's or former member's death, the survivor was not enrolled in a medical insurance plan sponsored by the City, but the survivor would have been eligible to have been enrolled at the time of the member or former member's death, and the survivor applies to continue medical insurance coverage within sixty (60) days of the death of the member or former member and the survivor agrees to pay any applicable premiums, such survivor shall be treated as if the survivor had been enrolled in a medical insurance plan sponsored by the City at the time of the member or former member's death for purposes of continued coverage under the City's medical insurance coverage.

• C. A member or former member may secure medical insurance coverage for a spouse under the following conditions:

  1. The spouse and member are married at the time of said member's retirement for service or disability; or

  2. The spouse and the former member are married at the time the former member first begins receiving a monthly allowance pursuant to Section 3.36.1640; or

  3. The member marries subsequent to his or her retirement and applies to add such spouse in accordance with the terms of the eligible medical plan; or

  4. The former member marries while receiving monthly allowances pursuant to Section 3.36.1640 and applies to add such spouse in accordance with the terms of the eligible medical plan.

• D. A member or former member may secure medical insurance coverage for a domestic partner under the following conditions:

  1. The domestic partner and the member are members of a domestic partnership at the time of said member's retirement for service or disability; or

  2. The domestic partner and the member are members of a domestic partnership at the time the former member first begins receiving a monthly allowance pursuant to Section 3.36.1640; or

  3. The member establishes a domestic partnership subsequent to his or her retirement and applies to add such domestic partner in accordance with the terms of the eligible medical plan; or

  4. The former member establishes a domestic partnership while receiving monthly allowances pursuant to Section 3.36.1640 and applies to add such domestic partner in accordance with the terms of the eligible medical plan.

• E. A surviving spouse or surviving domestic partner shall be eligible for single coverage only, except as follows:

  1. A surviving spouse or surviving domestic partner shall be eligible for family coverage if a surviving child or children as defined in Section 3.36.1200, or an eligible surviving child for purposes of receiving a school allowance pursuant to Part 9 of this Chapter, are surviving the death of the member.

2. A surviving spouse or surviving domestic partner shall be eligible for family coverage if the surviving spouse or the surviving domestic partner is the court-appointed guardian of the person of a minor child or children and such minor child or children are eligible for coverage under the terms of the eligible medical plan. A surviving spouse or surviving domestic partner may continue family coverage after such child reaches the age of majority

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• in any case where, if such child had been a surviving child of the member or former member, such child would be an eligible surviving child for purposes of receiving a school allowance pursuant to Part 9 of this Chapter.

• F. Notwithstanding the provisions of subsections A. and B. of Section 3.36.1920, members or their survivors who would otherwise qualify for participation in a medical insurance plan pursuant to the provisions of this Part 14, but who, at the time of retirement or death, could not enroll because the benefits provided in this Part 14 were not available at the time of the member's retirement for service or disability or death of the member, may enroll in an eligible insurance plan as provided for in this Part 14 until or on August 31, 1984, only; said members or their survivors must otherwise comply with the coverage limitations provided in subsections C. and D. of Section 3.36.1920 and with all provisions of this Part 14.

• G. Notwithstanding the provisions of Section 3.36.1920.C., a spouse who married a member subsequent to the member's retirement and would otherwise qualify for participation in a medical insurance plan pursuant to this Part 14 but who, at the time of marriage, could not enroll because the benefits provided in this Part 14 were not available for spouses married subsequent to a member's retirement, may enroll in an eligible insurance plan as provided in this Part 14 until or on December 30, 1991, only. Such spouse must otherwise comply with all other provisions of this Part 14.

• H. Notwithstanding the provisions of Section 3.36.1920.D., a domestic partner who established a domestic partnership with a member subsequent to the member's retirement and would otherwise qualify for participation in a medical insurance plan pursuant to this Part 14 but who, at the time of establishing the domestic partnership, could not enroll because the benefits provided in this Part 14 were not available for domestic partnerships where

the partnership was established subsequent to a member's retirement, may enroll in an eligible insurance plan as provided in this Part 14 until or on January 31, 2007, only. Such domestic partner must otherwise comply with all other provisions of this Part 14.

• I. Notwithstanding the provisions of subsections A. and B. of Section 3.36.1920, a member who retired pursuant to Section 3.36.760, or survivors of such member, who would otherwise qualify for participation in a medical insurance plan pursuant to the provisions of this Part 14 but who, at the time of retirement or death, could not enroll because the benefits provided in this Part 14 were not available to such member or such survivors at the time of such member's retirement or death, may enroll in an eligible insurance plan as provided for in this Part 14 until or on December 30, 1991, only. Said member or survivors must otherwise comply with the coverage limitations provided in Section 3.36.1920 and with all other provisions of this Part 14.

• J. A surviving spouse who would otherwise qualify for family coverage because the surviving spouse is the court-appointed guardian of the person of a minor child or children but who, at the time of the member's or former member's death, could not enroll because the family coverage provided in this Part 14 was not available to such surviving spouse at the time of the member's or former member's death, may enroll in family coverage in an eligible insurance plan as provided for in this Part 14 until June 30, 2002, only. Said surviving spouse must otherwise comply with the coverage limitations provided in Section 3.36.1920 and with all other provisions of this Part 14.

• K. A domestic partner who would otherwise qualify for family coverage because the domestic partner is the court-appointed guardian of the person of a minor child or children but who, at the time of the member's or former member's death, could not enroll because the family coverage provided in this Part 14 was not available

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to such surviving domestic partner at the time of the member's or former member's death, may enroll in family coverage in an eligible insurance plan as provided for in this Part 14 until January 31, 2007, only. Said surviving domestic partner must otherwise comply with the coverage limitations provided in Section 3.36.1920 and with all other provisions of this Part 14.

• L. Notwithstanding the provisions of subsection A. of Section 3.36.1920, a former member who meets the requirements of subsection D. of Section 3.36.1900 but who, within thirty (30) days of first receiving a monthly allowance, could not enroll in a medical insurance plan because the benefits provided in this Part 14 were not then available to such former member, may enroll in an eligible insurance plan as provided for in this Part 14 until or on December 31, 2002, only. Upon the death of such former member, the former member's survivors shall be eligible for continued medical insurance coverage. Such former member or survivors must otherwise comply with the coverage limitations provided in Section 3.36.1920 and with all other provisions of this Part 14.

may enroll in an eligible insurance plan as provided for in this Part 14 until or on December 31, 2002, only. Upon the death of such former member, the former member's survivors shall be eligible for continued medical insurance coverage. Such former member or survivors must otherwise comply with the coverage limitations provided in Section 3.36.1920 and with all other provisions of this Part 14.

• M. Effective March 31, 2017, a member and/or dependent and/or survivor who is eligible for retiree healthcare benefits in this Plan and who is eligible for Medicare coverage shall be required to enroll in Medicare Part A and B during the individual's "initial enrollment period" under the applicable federal rules. The initial enrollment period shall begin three (3) months before the Plan member and/or dependent and/or survivor's sixty-fifth (65th) birthday (or other event providing eligibility for enrollment in Medicare) and concludes four (4) months after the Plan member and/or dependent and/or survivor's sixty-fifth (65th) birthday (or other event providing eligibility for enrollment in Medicare). However, if a member is already retired and age sixty-five (65) or older on the date this Section of the Ordinance becomes effective for such member

and is eligible for Medicare coverage then the member shall be required to enroll in Medicare Part A and B by July 1, 2018. Additionally, the Plan member and/or dependent and/or survivor who is eligible for Medicare shall be required to enroll in a Medicare Plan provided by the City under this Part 14 and assign Medicare Parts A and B benefits to the Medicare Plan if required by the healthcare coverage provider. If any member who retires for service or disability pursuant to the provisions of this Chapter or is a former member receiving a monthly allowance pursuant to Section 3.36.1640 waives coverage, he or she will not be required to enroll in Medicare Parts A or B. However, if such member or former member later joins a City plan, he or she will be required to enroll in Medicare Parts A and B and any charges or penalties associated with enrollment outside the "initial enrollment period" shall be borne by such member or former member.

If a member is not eligible for Medicare Part A at no cost or a Plan member for any reason is not eligible for Medicare, the member shall be required to provide such verification from the U.S. Social Security Administration to the Department of Retirement Services. Unless such verification is provided, Plan members shall be required to enroll in a Medicare Plan provided by this Plan upon reaching age sixty-five (65). This provision shall not apply to those who waive coverage,

ny reason is not eligible for Medicare, the member shall be required to provide such verification from the U.S. Social Security Administration to the Department of Retirement Services. Unless such verification is provided, Plan members shall be required to enroll in a Medicare Plan provided by this Plan upon reaching age sixty-five (65). This provision shall not apply to those who waive coverage,

If a member fails to meet the requirements set forth above within the member's (or dependent or survivor's) "initial enrollment period" which begins three (3) months before the Plan member and/or dependent and/or survivor's sixty-fifth (65th) birthday (or other event providing eligibility for enrollment in Medicare) and concludes four (4) months after the Plan member and/or dependent and/or survivor's sixty-fifth (65th) birthday (or other event providing eligibility for enrollment in Medicare), the Plan shall cease to provide retiree healthcare benefits until the Plan member (or dependent or survivor) completes such requirements. This means

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that the member and any qualifying dependents shall not receive retiree healthcare benefits. The Plan member and qualifying dependents shall be re-enrolled in retiree healthcare benefits beginning the first day of the following month after such requirements have been completed.

If the member dies during the period which the Plan member failed to complete the requirements set forth above, the eligible spouse or domestic partner and any qualifying child(ren) shall be re-enrolled in a health insurance plan. When the spouse or domestic partner is age sixty-five (65), the requirements described above regarding enrollment in Medicare Parts A and B and enrollment in a Medicare Plan provided for City retirees and dependents, and assignment of Medicare Parts A and B benefits to the Medicare Plan must be fulfilled, unless verification is provided that the spouse or domestic partner is not eligible for Medicare coverage as described in this Section. If such requirements are not met, retiree healthcare coverage will cease until such requirements are completed, in the same manner set forth above with respect to members.

• N. Subject to the provisions of this Chapter, effective March 31, 2017 and upon IRS approval of the VEBA, a member of the VEBA who meets the requirements of Section 3.57.300 may be entitled to receive a benefits similar to those established under Parts 14 and 15 of Chapter 3.36. These provisions entitle a VEBA member to a benefit equal to the amount of the premium for single coverage under the lowest cost medical insurance coverage available under the City's retiree medical program. VEBA members with at least five years of service with the City may be eligible to purchase medical benefits under the City's healthcare plans, however, such medical plan purchases will be at a retiree only rate that is not a rate blended with active City employees. Such benefit shall cease at the time that such member is eligible for coverage under Medicare and subject to the provisions of Section 3.57.320. The catastrophic disability health-

e with the City may be eligible to purchase medical benefits under the City's healthcare plans, however, such medical plan purchases will be at a retiree only rate that is not a rate blended with active City employees. Such benefit shall cease at the time that such member is eligible for coverage under Medicare and subject to the provisions of Section 3.57.320. The catastrophic disability health-

care benefit provided under Chapter 3.57 shall be paid from the Police Department Healthcare Trust Fund or the Fire Department Healthcare Trust Fund, as applicable. (Ords. 21686, 23807, 23889, 24093, 25615, 26566, 26641, 27712, 29879, 30007.)

• A. The plan will reimburse members, former members and survivors for the amounts paid by them for Medicare Part B coverage, subject to the following limitations:

  1. The member, former member or survivor must be eligible for medical insurance coverage under the provisions of the plan and must be enrolled in an eligible medical plan.

  2. The total amount paid by from the medical benefits account or the trusts established by Chapters 3.54 and 3.56 for medical benefits pursuant to Section 3.36.1930 plus the Medicare Part B reimbursement shall not exceed the premium for the lowest cost medical plan, as defined in Section 3.36.1930D., available to the member, former member or survivor.

  3. The reimbursement shall be only for Medicare Part B payments made after February 4, 2000.

  4. The member, former member, or survivor must submit proof of payment for Medicare Part B. Except for Medicare Part B payments made during calendar year 2000, proof of payment must be submitted no later than the April 1 immediately following the calendar year for which reimbursement is sought. For Medicare Part B payments made during calendar year 2000, proof of payment must be submitted no later than November 30, 2001.

  5. The reimbursement shall not exceed the amount of the Medicare Part B payments for which proof of payment is submitted.

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6. The reimbursement may be reduced or eliminated pursuant to Section 3.36.1950.

• B. All reimbursements for Medicare Part B payments shall be made from the medical benefits account established by Section 3.36.575 or the trusts established by Chapters 3.54 and 3.56.

• (Ords. 27768, 29065.)

• A. The costs of premiums for medical insurance coverage in an eligible medical plan shall be paid from the medical benefits account established by Section 3.36.575 or from the trust funds established by Chapters 3.54 and 3.56 and by deductions from monthly allowances paid by the Plan in accordance with this Section 3.36.1930. Unless otherwise determined by the Trustees, payment shall be made out of the medical benefits account until the account is exhausted and thereafter out of the Trust Funds established by Chapters 3.54 and 3.56.

• B. For members who retired prior to February 4, 1996, for former members described in subsection C. of Section 3.36.1900 who separated from City service prior to February 4, 1996, and for survivors of said members and former members who satisfy the requirements of Section 3.36.1910:

  1. For coverage through July 1998, the member, former member or survivor shall be required to pay a premium for medical insurance coverage under this Part in the same amount as is currently paid by an employee of the City in the classification from which the member retired, which the member held at the time of death, or which the former member held at the time of separation from City service. The remaining portion of the premium shall be paid from the medical benefits account.

  2. Effective for coverage beginning in the month of August 1998, the portion of

     • the premium to be paid from the medical benefits account shall be that portion which is equivalent to the premium for the "lowest cost medical plan," but shall not exceed the actual premium for the eligible medical plan in which the member, former member or survivor enrolls. The portion to be paid by deductions from monthly allowances paid to the member, former member, or survivor shall be that portion of the premium for the selected medical plan that exceeds the portion payable from the medical benefits account.

• C. For members who retired on or after February 4, 1996, for former members described in subsection C. of Section 3.36.1900 who separated from City service on or after February 4, 1996, and for survivors of said members and former members who satisfy the requirements of Section 3.36.1910:

  1. For coverage through November 1997, the member, former member or survivor shall be required to pay a premium for medical insurance coverage under this Part in the same amount as was then paid by an employee of the City in the classification from which the member retired, which the member held at the time of death, or which the former member held at the time of separation from City service. The remaining portion of the premium shall be paid from the medical benefits account.

be required to pay a premium for medical insurance coverage under this Part in the same amount as was then paid by an employee of the City in the classification from which the member retired, which the member held at the time of death, or which the former member held at the time of separation from City service. The remaining portion of the premium shall be paid from the medical benefits account.

2. Effective for coverage beginning in the month of December 1997, the portion of the premium to be paid from the medical benefits account shall be the lesser of (a) an amount which is equivalent to the premium for the "lowest cost medical plan" or (b) the actual premium for the eligible medical plan in which the member, former member or survivor enrolls. The portion to be paid by deductions from monthly allowances paid to the

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member, former member, or survivor shall be that portion of the premium for the selected medical plan that exceeds the portion payable from the medical benefits account.

• D. For the purposes of this Section, "lowest cost medical plan" means that medical plan (single or family coverage as applicable to the coverage selected by the member, former member or survivor):

  1. Which is an eligible medical plan as defined in Section 3.36.1940(A); and

  2. Which has the lowest monthly premium of all eligible medical plans as defined in Section 3.36.1940(A) then in effect, determined as of the time the premium is due and owing. The "lowest cost plan" for any current or future retiree in the defined benefit retirement healthcare plan shall be permanently set such that it would qualify for "silver" level as specified by the Affordable Healthcare Act (ACA) in effect in July 2015. This specifically includes the provision that the healthcare plan must be estimated to provide at least 70% (the "floor") but no more than 79% (the "ceiling") of healthcare expenses (actuarial valuation) as per the current ACA "silver" definition.

• (Ords. 21686, 25615, 26566, 26641, 27768, 29065, 29879, 30087.)

• A. A surviving spouse who is otherwise eligible only for single coverage, but who elects family coverage pursuant to paragraph 2. of Subsection D. of Section 3.36.1920, shall be required to pay that portion of the medical premium which exceeds the amounts payable for single coverage by the surviving spouse and the Medical Benefits Account as provided in Section 3.36.1930.

• B. The portion of the premium required to be paid by the surviving spouse shall be deducted from the monthly allowances otherwise payable to the surviving spouse.

• (Ord. 26566.)

For purposes of this Part 14, members or their survivors may only be entitled to secure medical insurance coverage from:

• A. Medical Plans Offered to Active City Employees - an eligible medical plan which is a plan in which the City has entered into a contract for the provision of hospital, medical, surgical and related benefits as part of the City's benefits to City employees; or

• B. Medicare Medical Plans - an eligible medical plan which is a plan in which the City has entered into a contract for a Medicare coverage medical plan for the provision of hospital, medical, surgical and related benefits for Medicare recipients; or

• C. Medical Plans Not Offered to Active City Employees - an eligible medical plan which is a plan in which the City has entered into a contract for the provision of hospital, medical, surgical and related benefits which are not part of the City's benefits to City employees.

• (Ords. 21686, 30087.)

• A. It is intended that the funding provided to the retirement fund for medical benefits provided by this system meet the requirements of Internal Revenue Code Section 401(h). Subject to the requirements of the Meyers-Milias-Brown Act (California Government Code Section 3500 et seq.), the city reserves the right to amend this part to limit the funding provided to the retirement fund for the medical benefits as necessary to satisfy the requirements of said Section 401(h).

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• B. In the event the contributions required to be paid into the retirement fund to fund the benefits provided by this Part 14 and the dental benefits provided by Part 16, as determined by the board's actuary, would exceed the contribution limit permitted by Internal Revenue Code Section 401(h) and the applicable regulations, the allocation of costs set forth in Section 3.36.1930 shall be adjusted as needed so that the contributions made to fund the portion paid from the medical benefits account comply with Section 401(h). The board, in consultation with its actuary, shall determine the adjustment to be implemented until this part is amended pursuant to Subsection A. above.

• (Ords. 26416, 29065.)

• A. Effective March 31, 2017, members and their surviving spouses, surviving domestic partners, and/or children who are eligible for medical insurance coverage under Section 3.36.1900 or 3.36.1910 may instead of receiving such coverage choose to receive a credit for an amount equal to twenty-five percent (25.0%) of the monthly premium of the lowest cost medical plan as defined under Section 3.36.1930.D and the lowest cost dental plan under the coverage provided under Part 15. Such credited amounts must be used only for application toward the cost of such person's healthcare premiums actually incurred in future years under Part 14 and Part 15 of this Plan.

• B. Each year during the annual open enrollment period during which qualifying individuals covered under this Part 14 and Part 15 are provided the opportunity to elect healthcare coverage under this Part 14, or upon the occurrence of another event identified by the medical plans as providing qualifying individuals with an opportunity to elect coverage under this Part 14, such individuals may again elect such coverage and pay the full cost of the member's

portion of coverage or instead elect to have the credit described in Section 3.36.1955.A again credited to be used only for application toward the cost of such person's healthcare premiums actually incurred in future years under Part 14 and Part 15 of this Plan.

• C. Individuals receiving credits in lieu of premiums for greater than the cost of single coverage must annually submit substantiation that they continue to be eligible for coverage at greater than the cost of single coverage. Further, eligible retirees who receive retiree healthcare coverage as a dependent of another City employee or retiree are not eligible for the family in lieu premium credit and must elect, if any in lieu election is made, the single in lieu premium credit.

• D. To the extent a member and/or the member's eligible dependents selects to receive the credits under Section 3.36.1955.A or 3.36.1955.B and the member and his surviving dependents do not use the accumulated credits while eligible for healthcare coverage under this Part 14, any remaining credits will be forfeited. In no event can a member, surviving spouse, surviving domestic partner, and/or eligible dependent receive the credits in lieu of coverage under this Part 14 as cash and such credits may only be applied to the cost of future premiums for coverage provided under this Part 14 and Part 15.

• E. Any member who retires for service or disability pursuant to the provisions of this Chapter or is a former member receiving a monthly allowance pursuant to Section 3.36.1640 waives coverage, he or she will not be required to enroll in Medicare Parts A or B. However, if such member or former member later joins a City plan, he or she will be required to enroll in Medicare Parts A and B and any charges or penalties associated with enrollment outside the "initial enrollment period" shall be borne by such member or former member.

• (Ords. 29879, 30007.)

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Part 15

DENTAL BENEFITS FOR RETIRED MEMBERS AND SURVIVORS

Sections:

• 3.36.2000 Dental benefits for retired members.

• 3.36.2010 Dental benefits for survivors of members.

• 3.36.2020 Requirements for participation in dental insurance plan.

• 3.36.2030 Costs of dental insurance.

• 3.36.2040 Eligible dental plan.

• 3.36.2050 Limitation on funding for dental benefits.

Subject to the provisions of this chapter, a member or former member of this plan may be entitled to dental insurance coverage in an eligible dental plan as specified in Section 3.36.2040 if the requirements of Subsection A., B., C., or D. of this Section 3.36.2000 are satisfied. Effective March 31, 2017, this Part 15 shall not be applicable to new employees and they shall not be eligible for dental insurance coverage under this Part 15. Notwithstanding the preceding sentence, for tier 2 members who were or are eligible for benefits under this Part 15, the city manager has the authority and discretion to terminate dental benefits under this Part 15 with respect to those tier 2 members prior to the implementation of Chapter 3.57. In the event the city manager exercises this authority, affected tier 2 members shall not be entitled to any benefits or make any additional contributions under this Part 15.

• A. The member became a member of this plan prior to July 1, 1998, and is retired for service or disability under the provisions of this chapter; or

• B. The member became a member of this plan on or after July 1, 1998, and is retired for service under Part 6 of this chap-

ter or for disability under Part 7 of this chapter and at the time of such retirement either:

1. Is entitled to credit for fifteen or more years of service; or

2. Receives a retirement allowance equal to at least thirty-seven and one-half percent of such member's final compensation; or

• C. The former member separates from city service on or after July 5, 1992, prior to retirement, and satisfies all of the following requirements:

  1. At the time of separation from city service, the former member is entitled to credit for twenty or more years of service; and

  2. The former member elects to allow his or her accumulated contributions to remain in the retirement fund pursuant to Section 3.36.1640; and

  3. The former member receives a monthly allowance pursuant to Section 3.36.1640.

• D. The former member separated from city service prior to July 5, 1992, and prior to retirement, and satisfies all of the following requirements:

  1. At the time of separation from city service the former member was entitled to credit for twenty or more years of service; and

  2. The former member elected to allow his or her accumulated contributions to remain in the retirement fund pursuant to Section 3.36.1640; and

  3. As of April 1, 2002, the former member was receiving a monthly allowance pursuant to Section 3.36.1640; and

  4. The former member is receiving a monthly allowance pursuant to Sec-

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tion 3.36.1640 at the time the former member applies for dental insurance coverage.

Any member who is eligible for dental coverage but instead elects to participate in the "in lieu" premium credit option described in Section 3.36.1955, and later elects to again be covered under the city's medical and dental coverage during the annual open enrollment period or the occurrence of another event identified by the dental plans as providing such individuals with an opportunity to elect to be covered under the city's dental coverage shall be required to pay the full portion of the member cost of coverage under this Part 15. (Ords. 22279, 24093, 25617, 26641, 29879.)

Subject to the provisions of this chapter, the surviving spouse, surviving domestic partner, surviving child and/or children, as those terms are defined in Section 3.36.1200 of this chapter, may be entitled to dental insurance coverage in an eligible dental plan as specified in Section 3.36.2040 if the requirements of Subsection A., B., C. or D. are satisfied. Effective March 31, 2017, this Part 15 shall not be applicable to the surviving spouse, surviving domestic partner, surviving child and/or children of new employees and they shall not be eligible for dental insurance coverage under this Part 15.

• A. The surviving spouse, surviving domestic partner, surviving child and/or children are receiving a monthly survivorship allowance pursuant to Part 8 of this chapter because of the death of a member who became a member of this plan prior to July 1, 1998, and:

  1. Was retired for service or disability; or

  2. Died before receiving retirement pay.

• B. The surviving spouse, surviving domestic partner, surviving child and/or children are receiving a monthly survivorship allowance pursuant to Part 8 of this

chapter because of the death of a member who became a member of this plan on or after July 1, 1998, and:

1. The member either died before receiving retirement pay or was retired for service under Part 6 of this chapter or for disability under Part 7 of this chapter; and

2. At the time of the member's death:

   • a. The member was entitled to credit for fifteen or more years of service; or

   • b. The surviving spouse, surviving domestic partner, surviving child and/or children were entitled to a survivorship allowance of at least thirty-seven and one-half percent of the member's final compensation.

• C. The surviving spouse, surviving domestic partner, surviving child and/or children are receiving a monthly allowance pursuant to Part 11 of this chapter because of the death of a former member who separated from city service on or after July 5, 1992, and who was entitled to credit for twenty or more years of service at the time of such separation from service.

• D. The surviving spouse, surviving domestic partner, surviving child and/or children are receiving a monthly allowance pursuant to Part 11 of this chapter because of the death of a former member who separated from city service prior to July 5, 1992, and who met all of the requirements of Subsection D. of Section 3.36.2000.

Any survivor who is eligible for dental coverage but instead elects to participate in the "in lieu" premium credit option described in Section 3.36.1955, and later elects to again be covered under the city's medical and dental coverage during the annual open enrollment period or the occurrence of another event identified by the dental plans

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as providing such individuals with an opportunity to elect to be covered under the city's dental coverage shall be required to pay the full portion of the member's cost of coverage under this Part 15. (Ords. 22279, 23807, 24093, 25617, 26641, 27712, 29879.)

• A. A member or former member, as specified in Section 3.36.2000 above, is eligible to participate in a dental insurance plan sponsored by the city provided that the member or former member satisfies the following requirements:

  1. The member retires for service or disability pursuant to the provisions of this chapter and at the time of retirement the member applies for dental insurance coverage in one of the dental insurance plans sponsored by the city; or

  2. The former member receives a monthly allowance pursuant to Section 3.36.1630 or Section 3.36.1640 and within thirty days of first receiving such monthly allowance the former member applies for dental insurance coverage in one of the dental insurance plans sponsored by the city; or

  3. The member retires for service or disability pursuant to the provisions of this chapter and executes a waiver of coverage in the form and manner prescribed by the city indicating that he or she has dental coverage at the time of retirement other than coverage under the city's dental insurance coverage and later applies for dental insurance coverage due to the occurrence of another event identified by the dental plans as providing such individuals with an opportunity to elect to be covered under the city's dental coverage, or if there is no qualifying event, applies for dental insurance coverage during the annual open enrollment period, and agrees to pay any applicable premiums

within thirty days of the termination of the prior coverage or the commencement of coverage following open enrollment as applicable; or

4. The former member receives a monthly allowance pursuant to Section 3.36.1640 and executes a waiver of coverage in the form and manner prescribed by the city indicating that he or she has dental coverage at the time he or she first receives such monthly allowance other than coverage under the city's dental insurance coverage and later applies for dental insurance coverage due to the occurrence of another event identified by the dental plans as providing such individuals with an opportunity to elect to be covered under the city's dental coverage, or if there is no qualifying event, applies for dental insurance coverage during the annual open enrollment period, and agrees to pay any applicable premiums within thirty days of the termination of the prior coverage or the commencement of coverage following open enrollment as applicable.

• B. A survivor, as specified in Section 3.36.2010 above, is eligible to participate in a dental insurance plan sponsored by the city provided that the survivor satisfies the following requirements:

  1. At the time of the death of the member or former member, the member or former member and the survivor were enrolled in one of the dental insurance plans sponsored by the city; and

  2. The survivor applies to continue dental insurance coverage within thirty days of the death of the member or former member.

3. Notwithstanding the foregoing, if, at the time of the death of the member or former member, the survivor was not enrolled in a dental insurance plan sponsored by the city, but the survivor would have been eligible to have been enrolled

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at the time of the member or former member's death, and the survivor applies to continue dental insurance coverage within sixty days of the death of the member or former member and the survivor agrees to pay any applicable premiums, such survivor shall be treated as if the survivor had been enrolled in a dental insurance plan sponsored by the city at the time of the member or former member's death for purposes of continued coverage under the city's dental insurance coverage.

• C. Notwithstanding the provisions of Subsections A. and B. of this section, all retired members and survivors who receive a retirement or survivorship allowance for the month of July 1986 shall automatically be enrolled in an eligible dental insurance plan as specified in this part.

• D. If a member marries subsequent to his or her retirement or if a former member marries while receiving monthly allowances pursuant to Section 3.36.1630 or Section 3.36.1640, the member or former member may secure dental insurance coverage for his or her spouse only if the member or former member applies to add such spouse in accordance with the terms of the eligible dental insurance plan.

• E. If a member establishes a domestic partnership subsequent to his or her retirement or if a former member establishes a domestic partnership while receiving monthly allowances pursuant to Section 3.36.1630 or Section 3.36.1640, the member or former member may secure dental insurance coverage for his or her domestic partner only if the member or former member applies to add such domestic partner in accordance with the terms of the eligible dental insurance plan.

• F. Notwithstanding the provisions of Subsection A. of this section, a former member who meets the requirements of Subsection D. of Section 3.36.2000 but who, within thirty days of first receiving a monthly allowance, could not en-

roll in a dental insurance plan because the benefits provided in this Part 15 were not then available to such former member, may enroll in an eligible insurance plan as provided for in this Part 15 until or on December 31, 2002, only. Upon the death of such former member, the former member's survivors shall be eligible for continued dental insurance coverage. Such former member or survivors must otherwise comply with all other provisions of this Part 15.

ed in this Part 15 were not then available to such former member, may enroll in an eligible insurance plan as provided for in this Part 15 until or on December 31, 2002, only. Upon the death of such former member, the former member's survivors shall be eligible for continued dental insurance coverage. Such former member or survivors must otherwise comply with all other provisions of this Part 15.

• G. Subject to the provisions of this chapter, effective March 31, 2017 and upon IRS approval of the VEBA, a member of the VEBA who meets the requirements of Section 3.57.300 may be entitled to receive a benefits similar to those established under Parts 14 and 15 of Chapter 3.36. These provisions entitle a VEBA member to a benefit equal to the amount of the premium for single coverage under the lowest cost medical insurance coverage available under the city's retiree medical program. Such benefit shall cease at the time that such member is eligible for coverage under Medicare and subject to the provisions of 3.57.320. The catastrophic disability healthcare benefit provided under Chapter 3.57 shall be paid from the police department healthcare trust fund or the fire department healthcare trust fund, as applicable.

(Ords. 22279, 23889, 24093, 26641, 27712, 29879.)

The cost of providing dental insurance coverage as provided in this part shall be borne by and paid from the medical benefits account established by Section 3.36.575 or from the trusts established by Chapters 3.54 and 3.56. Unless otherwise determined by the trustees, payment shall be made out of the medical benefits account until the account is exhausted and thereafter out of the trusts established by Chapters 3.54 and 3.56. (Ords. 22279, 27768, 29065.)

For the purposes of this part, members or their survivors may secure dental insurance cover-

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age only from an eligible dental plan with which the city has entered into a contract for the provision of dental benefits as part of the city's benefits to city employees. (Ord. 22279.)

• A. It is intended that the funding provided to the retirement fund for dental benefits provided by this system meet the requirements of Internal Revenue Code Section 401(h). Subject to the requirements of the Meyers-Milias-Brown Act (California Government Code Section 3500 et seq.), the city reserves the right to amend this part to allocate costs of providing dental medical benefits as necessary to satisfy the requirements of said Section 401(h).

• B. In the event the contributions required to be paid into the retirement fund to fund the benefits provided by this Part 15 and the medical benefits provided by Part 14, as determined by the board's actuary, would exceed the contribution limit permitted by Internal Revenue Code Section 401(h) and the applicable regulations, then Section 3.36.2030 notwithstanding, all or a portion of the costs set forth in Section 3.36.2030 may be allocated to the retiree, former member or survivor covered by the dental plan as needed so that the contributions made to fund the portion paid from the medical benefits account comply with Section 401(h). The board, in consultation with its actuary, shall determine the allocation to be implemented until this system is amended pursuant to Subsection A. above.

(Ords. 26416, 29065.)

Part 16

RECIPROCITY

Sections:

The purpose of this Part 16 is to extend to the members of other public agency retirement systems which adopt similar reciprocal provisions into their retirement ordinances or plans pursuant to Sections 20042, 20043, 31840.2, or 45310.5 of the California Government Code or pursuant to the charter of a city or a city and county or pursuant to the authority vested in any other public agency of the state of California (hereafter "reciprocal systems"), and which have entered into an agreement to establish a reciprocal retirement system with the California Public Employees' Retirement System, the rights in this retirement plan set forth in this Part 16. (Ord. 24681.)

• A. Subject to Section 3.36.3060, the provisions of this Part 16 shall only apply to a person who satisfies the requirements of paragraph 1. or paragraph 2. of this subsection A.:

  1. The person is a member of this retirement plan, terminates his or her employment with the city, and:

     • a. In the case where such termination of employment occurs prior to January 1, 1976, becomes a member of a reciprocal system within ninety days of such termination of employment; or

     • b. In the case where such termination of employment occurs on or after January 1, 1976, becomes a member of a reciprocal system within six months of such termination of employment.

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2. The person is a member of a reciprocal system, terminates his or her employment pursuant to which he or she was a member of such reciprocal system, and:

   • a. In the case where such termination of employment occurs prior to January 1, 1976, becomes a member of this retirement plan within ninety days of such termination of employment; or

   • b. In the case where such termination of employment occurs on or after January 1, 1976, becomes a member of this retirement plan within six months of such termination of employment.

• B. Except as provided in subsection C. below, the provisions of this Part 16 shall apply only to a member whose termination and entry into employment resulting in a change in membership from this retirement plan to a reciprocal system, or from a reciprocal system to this retirement plan, as provided in subsection A. above, occurred after the effective date of September 30, 1994, specified in the agreement for reciprocal benefits between the board of administration of the public employees retirement system and the city council of the City of San José.

• C. The provisions of this Part 16 relating to computation of final compensation shall apply to a member if such provisions would have applied had the member's termination and entry into employment occurred after the effective date of the agreement for reciprocal benefits.

• (Ord. 24681.)

The following provisions shall apply to a member who meets the requirements of Section 3.36.3010:

• A. Notwithstanding Sections 3.36.1630 and 3.36.1640, the member shall have the right to elect to leave his or her accumulated contributions on deposit in the police and fire department retirement fund irre-

spective of the amount of such contributions or the length of service credited to the member under this retirement plan. Such election shall be irrevocable while membership in the reciprocal system continues.

• B. For the purpose of the calculation of contribution rates of the city and the members, the age of entry for a person entering this retirement plan from a reciprocal system shall be such person's age at entry into the reciprocal system.

• C. The average monthly salary during any period of service as a member of a reciprocal system shall be considered compensation to a member of this retirement plan for the purpose of computing final compensation for such member if all of the following conditions are satisfied:

  1. The member has attained the age of fifty years; and

  2. The member retires concurrently under both this retirement plan and the reciprocal system; and

  3. At the time of retirement, the member is credited with such period of service under the reciprocal system.

• D. Solely for the purpose of meeting the minimum service requirements for qualification for benefits and retirement allowances under this retirement plan, service shall also include service as an officer or employee of a reciprocal system, if all of the following conditions are satisfied:

  1. The member has attained the age of fifty years; and

  2. The member retires concurrently under both this retirement plan and the reciprocal system; and

  3. The salary for service in the reciprocal system constitutes compensation of a member of this retirement plan for purposes of calculating final compensation.

     • However, under no circumstances shall such service in a reciprocal

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system be included in the determination of service credit for qualification for medical benefits provided under Part 14 of this chapter or for qualification for dental benefits provided under Part 15 of this chapter.

• E. A member shall be retired for disability and receive a retirement allowance based on the service credited to the member at the time of retirement during any period in which the member receives a disability retirement allowance under a reciprocal system, subject to the following limitations:

  1. Such allowance shall not exceed an amount which when added to the allowance paid under the reciprocal system equals the allowance which would be paid for a nonserviceconnected (nonindustrial) disability if all the member's service had been credited under the reciprocal system; and

2. Such allowance shall in no event be less than an annuity which is the actuarial equivalent of the member's contributions plus interest accumulated thereon at the rate of two percent per annum calculated as of the retirement date, whether or not the disability is for serviceconnected (industrial) reasons.

• F. The survivorship benefits or death benefits for a member who dies from nonservice-connected (nonindustrial) causes as a member of a reciprocal system shall not exceed an amount which when added to the survivorship and death benefits paid for such member under the reciprocal system equals the maximum death benefit payable under that system, subject to the following limitations:

  1. Such survivorship and death benefits shall be at least the amount of the member's accumulated contri-

butions plus the interest accrued thereon at the rate of two percent per annum calculated as of the date of death; and

  2. If death is caused by service-connected (industrial) injury or disease in the reciprocal system, the survivorship and death benefits shall be the amount of the member's accumulated contributions plus interest accrued thereon at the rate of two percent per annum calculated as of the date of death. 

• G. Tier 2 members shall be eligible for benefits under the reciprocal agreement with CalPERS; provided, however, that in no event shall service with a reciprocal agency be used to qualify for an unreduced retirement benefit under the police and fire retirement plan.

• (Ords. 24681, 29266.)

• A. A former member of this retirement plan who terminated city employment, other than for retirement or death, and who withdrew his or her accumulated contributions and the accrued interest may redeposit such withdrawn contributions and accrued interest and become eligible for the benefits under this Part 16 if the following requirements are satisfied:

  1. The former member meets the requirements of Section 3.36.3010.

  2. The former member redeposits all contributions and accrued interest previously withdrawn plus the interest that would have been earned by such contributions and interest, at the retirement fund's actual earnings rate, had they remained on deposit in the retirement fund.

  3. Such redeposit is made within the time and in the manner prescribed by the board, such time not to extend beyond the date of such former member's retire-

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  - ment from this retirement plan or from a reciprocal system, whichever first occurs. 

• B. In the event the former member begins redeposit under this section but before all the amounts specified in paragraph 2. of Subsection A. above have been redeposited, the former member dies or retires from this retirement plan or a reciprocal system:

  1. Such amounts as have been redeposited shall be paid to the former member's estate in the event of the member's death; or

  2. Such amounts as have been redeposited shall be paid to the former member in the event of the member's retirement.

• (Ords. 24681, 29266, 29879.)

On the request of a reciprocal system, the board shall supply information and data necessary for administration of the reciprocal system as it is affected by membership in and service credited under this retirement plan. (Ord. 24681.)

Interpretations of the provisions of this Part 16 shall be made with reference to interpretations that have been made relative to the California Public Employees' Retirement System - 1937 Act County Employees' Retirement reciprocal provisions upon which these provisions are based. (Ord. 24681.)

All rights under this Part 16 are subject to modification as may be necessary to conform to amendments to the Public Employees' Retirement Law or the County Employees' Retirement Law of 1937 as provided in California Government Code Section 20042.

(Ord. 24681.)

• A. For other than tier 2 members, the city shall contribute to the retirement fund such amounts

as are actuarially determined to be necessary to provide funding for all additional costs incurred by this retirement plan because of the payment of benefits provided by this Part 16 to any members which would not have been provided absent the adoption of this part. For tier 2 members, such costs shall be shared equally between the city and tier 2 members.

• B. The contributions required of the city, if any, and of tier 2 members (as applicable) shall be determined beginning with the actuarial valuation performed as of July 1, 1997, or, if no valuation is performed as of that date, the first valuation performed thereafter, except that an earlier actuarial valuation date may be used if the retirement board determines that earlier contributions are required to maintain the actuarial soundness of this retirement plan.

• C. Except as provided in Section 3.36.410, in determining the contributions required under this Section 3.36.3070, there shall be no offset to normal cost contribution rates in the event plan funding exceeds one hundred percent. Both the city and employees shall always make the full annual required plan contributions as calculated by the retirement board actuaries which will be in compliance with applicable laws and will ensure the qualified status under the Internal Revenue Code.

(Ords. 24681, 29266, 29879.)

Part 17

PLAN-APPROVED DOMESTIC RELATIONS ORDERS*

Sections:

*Editor’s note— Ord. 27712, § 16, adopted May 16, 2006 amended Part 17, in its entirety, to read as herein set out. Prior to inclusion of said ordinance, Part 17 pertained to similar subject matter. See also the Code Comparative Table.

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§ 3.36.3500

• 3.36.3530 "Participant" defined.

• 3.36.3540 "Alternate payee" defined.

• 3.36.3550 "Plan-approved domestic relations order" defined.

• 3.36.3560 Dissolution, termination or legal separation before the participant has separated from city service.

• 3.36.3570 Dissolution, termination or legal separation after the participant has separated from city service.

• 3.36.3580 Combined account option.

• 3.36.3590 Alternate distribution option for alternate payee.

• 3.36.3600 Separate account option.

• 3.36.3610 Distribution of accumulated contributions in separate account.

• 3.36.3620 Participant's redeposit of contributions refunded to alternate payee.

• 3.36.3630 Monthly allowance for alternate payee.

• 3.36.3640 Monthly allowance for participant.

• 3.36.3650 Designation of beneficiary by alternate payee.

• 3.36.3655 No payments resulting in increased benefits.

• 3.36.3660 Disability retirement of participant.

• A. The purpose of this Part 17 is to set forth the requirements for plan-approved domestic relations orders that may be awarded by a court in a dissolution of marriage, termination of domestic partnership, or legal separation action with respect to community property rights in benefits provided by this plan.

• B. This part shall apply only in those dissolution of marriage, termination of domestic partnership, or legal separation proceedings which

are pending on January 14, 2000, in which the court has reserved jurisdiction over the retirement benefits or has not yet awarded the benefits, or in which the court issues a supplemental order with respect to the division of the community property rights in benefits provided by this plan.

• C. If benefits are payable pursuant to a qualified domestic relations order that meets the requirements of a domestic relations order as defined in Section 414(p) of the Internal Revenue Code, then the applicable requirements of Section 414(p) of the Internal Revenue Code shall be followed by the retirement plan.

• (Ords. 27712, 28886.)

The board of administration shall comply only with domestic relations orders that are plan-approved domestic relations orders pursuant to this Part. The board shall not authorize payments to an alternate payee pursuant to any order that does not meet the requirements of a plan-approved domestic relations order.

(Ord. 27712.)

"Domestic relations order" or "DRO" means any judgment, decree or order (including court approval of a property settlement agreement) which relates to community property rights in the case of a marital dissolution, termination of domestic partnership, or legal separation and which is made pursuant to a state domestic relations law. (Ord. 27712.)

"Participant" means a member of this plan, a retired member of this plan, or a former member of this plan who separated from city service but left his or her accumulated contributions on deposit with the plan.

(Ord. 27712.)

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• A. "Alternate payee" means the spouse, domestic partner, former spouse or former domestic partner of a participant of this plan who, as a result of petitioning a court of competent jurisdiction for the division of community property, has been awarded an interest in the benefits payable to a participant in this plan.

• B. A spouse, domestic partner, former spouse or former domestic partner who is awarded an interest in such benefits shall not be or become a participant of this plan by virtue of such award or the payment of such benefits.

• (Ord. 27712.)

• A. "Plan-approved domestic relations order" means a domestic relations order which:

  1. Sets forth an alternate payee's right to receive a portion of the benefits payable to a participant of this plan;

  2. Pursuant to Section 2610 of the California Family Code, orders the division of the community interest in the benefits payable to a participant; and

  3. Meets the requirements of this part.

• B. A DRO is a plan-approved domestic relations order only if the plan has been joined in the dissolution of marriage, termination of domestic partnership, or legal separation action pursuant to Chapter 6 (commencing with Section 2060) of Part 1 of Division 6 of the California Family Code.

• C. A DRO is a plan-approved domestic relations order only if the order clearly specifies that it:

  1. Does not require the plan to provide any type or form of benefit, or any option, not otherwise provided under the plan; and

  2. Does not require the plan to provide benefits (determined on the basis of actuarial value) in excess of those provided by the plan.

• D. A DRO is not a plan-approved domestic relations order if it provides for any of the following:

  1. Payment from this plan to an alternate payee at any time prior to the date the participant has both separated from city service and begun to receive payments from this plan, except as provided in Section 3.36.3600, Section 3.36.3620, or Section 3.36.3630.

  2. Payment from this plan because of the disability of the alternate payee, except as provided in Section 3.36.3580 or Section 3.36.3660.

  3. Payment from this plan of any premium, or portion thereof, for medical or dental insurance coverage for the alternate payee.

  4. Designation of the alternate payee as a surviving spouse or surviving domestic partner for the purpose of receiving any surviving spouse benefit, surviving domestic partner benefit, or death benefit provided under this plan on account of the death of the participant.

5. The alternate payee to make any contributions to the plan or the retirement fund or to purchase service credit in the plan.

(Ord. 27712.)

If the marital dissolution, termination of domestic partnership or legal separation occurs before the participant has separated from city service, and the court orders the division of the community interest in this plan pursuant to Section 2610 of the Family Code, then the DRO will be a plan-approved domestic relations order if it meets the requirements of Section 3.36.3580 or Section 3.36.3600.

(Ord. 27712.)

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§ 3.36.3570

If the marital dissolution, termination of domestic partnership, or legal separation occurs after the participant has separated from city service, whether for retirement, resignation or any other reason, and the court orders the division of the community interest in this plan pursuant to Section 2610 of the Family Code, then:

• A. In order to be a plan-approved domestic relations order the DRO must satisfy the requirements of Section 3.36.3580.

• B. The separate account option set forth in Section 3.36.3600 shall not be available, and the DRO shall not order the establishment of a separate account for the alternate payee.

• C. The DRO shall not in any way change any election made by the participant at the time of retirement or other separation from city service.

• (Ord. 27712.)

• A. If the court orders the division of the community interest in this plan pursuant to Section 2610 of the Family Code, the board will comply with a DRO which divides the community property interests of a participant and the participant's alternate payee, provided that the DRO meets all of the following requirements:

  1. Is a plan-approved domestic relations order under Section 3.36.3550.

  2. Includes the date of the marriage or the date of establishing the domestic partnership and the date on which the parties separated.

  3. Includes the last known mailing address of the alternate payee covered by the order.

  4. Specifies the amount or percentage of the participant's monthly benefit, or the participant's accumulated contributions in the event the participant elects a with-

drawal of accumulated contributions, which is to be paid to the alternate payee or specifies the manner in which such amount or percentage is to be determined.

5. Subject to Sections 3.36.3650 and 3.36.3660, specifies the portion of the participant's monthly disability benefits which is to be paid to the alternate payee and the time when such payment to the alternate payee is to commence:

   • a. In the event the participant retires for disability after the date of the dissolution of marriage or legal separation but prior to the time the participant is eligible to retire for service; or

   • b. In the event the participant has already retired for disability as of the date of the dissolution of marriage or legal separation.

6. Specifies that the plan shall pay the alternate payee's portion of the benefits to the alternate payee only at such time or times as the plan makes payments to the participant.

7. Specifies that, unless the alternate payee has elected a life annuity option pursuant to Section 3.36.3590, payments by the plan to the alternate payee shall terminate when payments to the participant (or the participant's eligible surviving spouse or eligible surviving domestic partner) terminate.

8. Specifies that the alternate payee shall not be entitled to payment from the plan of any premium, or portion thereof, for medical or dental insurance coverage.

9. Specifies that the alternate payee shall not be deemed an eligible surviving spouse or eligible surviving domestic partner under the terms of the plan.

10. Specifies that the plan may offset any payments made by the plan to either party for any amounts to which the other party

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§ 3.36.3600

was entitled, but which were erroneously paid to the party against whom the offset is made.

• B. In addition to the requirements of subsection A., the DRO may address the rights of the alternate payee with respect to the following:

  1. In accordance with Section 3.36.3640, the right to designate a beneficiary.

2. The right to elect an alternate distribution option pursuant to Section 3.36.3590.

(Ord. 27712.)

• A. In the event the alternate payee is awarded a combined account, the alternate payee may elect an alternate distribution option as provided in this section by filing a written election with the retirement board on a form provided by the secretary to the board. The election must be filed no earlier than the time the participant files an application for retirement and no later than thirty (30) days after the effective date of the participant's retirement.

• B. Any election made pursuant to the provisions of this section may be revoked by the alternate payee provided that the revocation is made in writing and is filed with the retirement board no later than thirty (30) days after the effective date of the participant's retirement. If the election is not revoked within thirty (30) days of the effective date of the participant's retirement, the election shall be irrevocable and benefits shall be paid in accordance with the election and the provisions of this plan.

• C. The alternate distribution option consists of an election to have the actuarial equivalent of any allowance payable to the alternate payee from the combined account applied to provide a lesser monthly allowance to the alternate payee until the participant's death and, thereafter, to continue such lesser monthly allowance to the alternate payee for the life of the alternate payee.

• D. Any age factor used in the calculation of benefits payable under the alternate distribution option shall be based on the ages of the participant and the alternate payee as of the date benefits first become payable to the participant.

• (Ord. 27712.)

• A. If the court orders the division of the community interest in this plan pursuant to Section 2610 of the Family Code, and the participant has not separated from city service at the time of the entry of the DRO, the court may order that the accumulated employee contributions and service credit attributable to periods of the participant's service during the marriage shall be divided into two (2) separate and distinct accounts in the name of the participant and alternate payee, respectively.

• B. Any accumulated contributions or service credit that are not explicitly awarded by the DRO shall be deemed to be the exclusive property of the participant.

• C. The board will comply with a DRO which orders the establishment of separate accounts provided that the DRO meets all of the following requirements:

  1. Is a plan-approved domestic relations order under Section 3.36.3550.

  2. Includes the date of the marriage or date of establishing the domestic partnership and the date on which the parties separated.

  3. Includes the last known mailing address of the alternate payee covered by the order.

  4. Specifies the amount or percentage of the accumulated contributions and service credit to be credited to the alternate payee's separate account or specifies the manner in which such amount or percentage is to be determined.

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5. Specifies the rights of the alternate payee with respect to the following:

   • a. In accordance with Section 3.36.3610, the right to a refund of accumulated employee contributions and interest.

   • b. In accordance with Section 3.36.3630, the right to receive a monthly allowance.

   • c. In accordance with Section 3.36.3640, the right to designate a beneficiary.

6. Specifies that, in the capacity of alternate payee, the alternate payee shall not be entitled to any of the following:

   • a. Payment from the plan because of the disability of the alternate payee.

   • b. Payment from the plan of any death benefit or survivor's benefit payable because of the death of the participant.

   • c. Payment from the plan of any premium, or portion thereof, for medical or dental insurance coverage.

(Ord. 27712.)

contributions in separate account.

• A. If the court orders the establishment of separate accounts pursuant to Section 3.36.3600 and, as of the date of entry of the DRO with the court, the participant is entitled to less than ten (10) years of service credit in this plan, the alternate payee shall receive a distribution of the accumulated contributions and credited interest placed in the alternate payee's account.

• B. If, as of the date of entry of the DRO with the court, the participant is entitled to ten (10) or more years of service credit in this plan, the alternate payee may elect to receive a distribution of the accumulated contributions and credited interest placed in the alternate payee's account.

  1. The alternate payee may make such election at any time after the establishment of the alternate payee's separate account.

  2. The alternate payee shall make such election by filing an application for distribution with the secretary to the board on a form provided by the secretary.

• C. Any distribution of accumulated contributions made to an alternate payee shall be effective when the plan deposits in the United States mail a warrant drawn in favor of the alternate payee and addressed to the latest address for the alternate payee on file with the plan, or to such other address as is specified in writing by the alternate payee.

• D. Once a distribution made pursuant to this section becomes effective:

  1. The alternate payee may not cancel the refund or revoke the election for distribution.

  2. The alternate payee shall be deemed to have permanently waived all rights in this Plan and all rights to the payment of any other benefits pertaining to the service credit or accumulated contributions, or both, in the alternate payee's separate account; and

  3. The alternate payee shall have no right to redeposit the distributed accumulated contributions.

• (Ord. 27712.)

If an alternate payee receives a refund under Section 3.36.3610, the participant may elect to redeposit the accumulated contributions and interest refunded to the alternate payee and to receive credit for the service that had been allocated to the alternate payee.

• A. Such election shall be made within five years after notice to the participant from the secretary to the board of the participant's option to redeposit the contributions.

• B. The participant shall make such election by filing, a written statement of election with the secretary to the board on a form provided by the secretary.

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• C. Except as provided in paragraph 1. of Subsection F. below, the participant shall not be entitled to receive credit for the service that had been allocated to the alternate payee unless, prior to the date the participant retires the participant redeposits:

  1. All contributions and interest distributed to the alternate payee; plus

  2. All additional interest which would have been earned on the distributed contributions and interest at the actual rate earned by the retirement fund, as of the date the participant elects to redeposit, if the contributions and interest had not been distributed to the alternate payee; plus

  3. Interest on the unpaid balance of all such moneys, at the interest rate in effect on the date the participant files the election, from the date the participant elects the redeposit to the date all such moneys and interest are fully redeposited into the retirement fund.

• D. Such redeposit shall be made within the time and in the manner provided by the board.

• E. If the participant does not make the election within the time provided herein, the participant shall be deemed to have elected not to have such service credited to the participant.

• F. If the participant elects to redeposit contributions and interest refunded to the alternate payee but does not redeposit all required amounts plus interest within the time and in the manner provided by the board, then:

  1. If the failure to complete the redeposit is because of the death of the participant, while a member of this plan but prior to retirement, the participant shall be credited with the amount of service which is de-

termined by the board to be attributable to the amount of payments made as of the date of the participant's death.

2. If the failure to complete the redeposit is for any reason other than the death of the participant prior to retirement, any payments made pursuant to the election shall be credited to the participant's accumulated contributions account, but the participant shall receive no service credit that had been allocated to the alternate payee.

(Ords. 27712, 29266, 29879.)

• A. An alternate payee who has been awarded a separate account shall be paid a monthly allowance from the retirement fund, for the life of the alternate payee, if all of the following conditions are satisfied:

  1. The alternate payee has not received a refund of accumulated contributions.

  2. Notwithstanding any service credit awarded to the alternate payee as of the date the alternate payee files an application for monthly benefits:

     • a. The participant is eligible to retire for service under provisions of this plan; or

     • b. In the case where the participant retired for disability or died prior to becoming eligible for service retirement, the participant would have been eligible to retire for service had the participant continued working; or

     • c. In the case of a participant who left city service without retiring, the participant is eligible to receive a monthly allowance under Section 3.36.1640, or would have been eligi-

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ble had the participant not elected a refund of his or her accumulated contributions.

3. The alternate payee has attained at least fifty years of age.

4. The alternate payee files a written application for monthly benefits with the secretary to the board on a form provided by the secretary.

5. The board approves the payment of such monthly allowance.

• B. The monthly allowance to the alternate payee shall begin to accrue on the later of the date designated in the alternate payee's application or the day following the date of the court order dividing the community property of the participant and the alternate payee. In no event shall the monthly allowance begin to accrue earlier than the first day of the month in which the alternate payee's application is received by the secretary to the board.

• C. Subject to the provisions of Section 3.36.3650 and 3.36.3660 and Subsection D., unless a different calculation is expressly provided in the domestic relations order:

  1. In the case where the participant separated from service prior to February 4, 2000, and subject to a maximum of forty percent of the participant's final compensation, the amount of the monthly allowance payable to the alternate payee shall be:

     • a. Two and one-half percent of the participant's final compensation for each of the first ten years of service credit credited to the alternate payee's separate account; plus

     • b. Three percent of the participant's final compensation for each year of service credit credited to the alternate payee's separate account that is in excess of ten years.

  2. Except as provided in paragraph 3. or paragraph 4. below, in the case where the participant is not a tier 2 member and

separates from service on or after February 4, 2000, and subject to a maximum of forty-two and one-half percent of the participant's final compensation, the amount of the monthly allowance payable to the alternate payee shall be:

• a. Two and one-half percent of the participant's final compensation for each of the first ten years of service credit credited to the alternate payee's separate account; plus

  • b. Three percent of the participant's final compensation for each of the next two and one-half years of service credit credited to the alternate payee's separate account; plus

  • c. Four percent of the participant's final compensation for each year of service credit credited to the alternate payee's separate account that is in excess of twelve and one-half years.

3. In the case where the participant is not a tier 2 member and was employed in the police department and separates from service on or after July 1, 2006, and subject to a maximum of forty-five percent of the participant's final compensation, the amount of the monthly allowance payable to the alternate payee shall be:

   • a. Two and one-half percent of the participant's final compensation for each of the first ten years of service credit credited to the alternate payee's separate account; plus

   • b. Four percent of the participant's final compensation for each year of service credit credited to the alternate payee's separate account that is in excess of ten years.

4. In the case where the participant is not a tier 2 member and was employed in the fire department and separates from service on or after July 1, 2008, and subject to a maximum of forty-five percent of

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the participant's final compensation, the amount of the monthly allowance payable to the alternate payee shall be:

  - a. In the case where the alternate payee's account is credited with less than ten years of service credit, two and one-half percent of the participant's final compensation for each year of service credit credited to the alternate payee's separate account. 

  - b. In the case where the alternate payee's account is credited with ten or more years of service credit, three percent of the participant's final compensation for each year of service credit credited to the alternate payee's separate account. 

5. In the case where a tier 2 member separates from service and is subject to a maximum of eighty percent of the tier 2 participant's final compensation, the amount of the monthly allowance payable to the alternate payee shall be determined based on an annual allowance equal to two and two-fifths percent of his or her final compensation for each of the first twenty full years of service, plus three percent of his or her final compensation for each of the next five full years of service, plus three and two-fifths percent of his or her final compensation for each full year of service in excess of the first twenty-five years of service for each year of service credit credited to the alternate payee's separate account.

compensation for each of the first twenty full years of service, plus three percent of his or her final compensation for each of the next five full years of service, plus three and two-fifths percent of his or her final compensation for each full year of service in excess of the first twenty-five years of service for each year of service credit credited to the alternate payee's separate account.

• D. In the event the alternate payee of participant other than a tier 2 member elects to receive a monthly benefit before the nonmember spouse reaches age fifty-five, the alternate payee's monthly benefit shall be reduced by an amount calculated in the same manner as the reduced monthly service retirement allowance of a member under Subsection B. of Section 3.36.810. In the event the alternate payee of a tier 2 member elects to receive a monthly ben-

efit before the nonmember spouse reaches age fifty-seven, the alternate payee's monthly benefit shall be reduced by an amount calculated in the same manner as the reduced monthly service retirement allowance of a member under Subsection F. of Section 3.36.810.

• E. For the purposes of this section:

  1. If the alternate payee elects to receive a monthly allowance prior to the date the participant retires, "final compensation" means the monthly final compensation of the participant as of the effective date of the first payment of the alternate payee's allowance.

  2. If the participant retired either for service or disability prior to the effective date of the payment of the alternate payee's allowance, "final compensation" means the monthly final compensation used in calculating the participant's retirement allowance.

• F. Monthly allowances payable to the alternate payee shall be increased by cost-of-living adjustments in accordance with Chapter 3.44.

• (Ords. 27712, 27721, 28300, 29266, 29879.)

• A. If the court orders the establishment of separate accounts pursuant to Section 3.36.3600 and, as of the date the participant separates from service, the alternate payee has not received a distribution pursuant to Section 3.36.3610, then the monthly allowance payable to the participant upon the participant's eligibility for a monthly allowance shall be:

  1. The monthly allowance that would be payable to the participant if no separate account had been established, less

  2. The monthly allowance payable to the alternate payee pursuant to subsection C. of Section 3.36.3630.

• B. If the court orders the establishment of separate accounts pursuant to Section 3.36.3600 and, as of the date the participant separates from service, the alternate payee has received a

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distribution pursuant to Section 3.36.3610 but the participant has received credit pursuant to Section 3.36.3620 for the service that had been allocated to the alternate payee, then the monthly allowance payable to the participant upon the participant's eligibility for a monthly allowance shall be the monthly allowance that would be payable to the participant if no separate account had been established.

• C. If the court orders the establishment of separate accounts pursuant to Section 3.36.3600 and, as of the date the participant separates from service, the alternate payee has received a distribution pursuant to Section 3.36.3610 and the participant has not made a redeposit pursuant to Section 3.36.3620, then the monthly allowance payable to the participant upon the participant's eligibility for a monthly allowance shall be:

  1. The monthly allowance that would be payable to the participant if no separate account had been established, less

  2. The monthly allowance that would have been payable to the alternate payee pursuant to Subsection C. of Section 3.36.3630 if the alternate payee had not received a distribution.

• (Ord. 27712.)

• A. The alternate payee who has been awarded a combined account may designate a beneficiary to receive amounts which would be payable to the alternate payee but for the death of the alternate payee.

• B. The alternate payee who has been awarded a separate account may designate a beneficiary:

  1. To receive the accumulated contributions in the alternate payee's account in the case where the alternate payee dies prior to receipt of payment.

  2. To receive any accumulated contributions remaining in the alternate payee's

separate account or to receive any unpaid allowance payable at the time of the alternate payee's death.

• C. The beneficiary shall be a natural person or persons. The designation may be by class, in which case the members of the class living at the time of the alternate payee's death shall be entitled as beneficiaries and shall take in equal shares unless otherwise specified by the alternate payee.

• D. A designation of a beneficiary shall be filed with the secretary to the board on a form provided by the secretary.

• E. The alternate payee may revoke or change the designation of a beneficiary at any time prior to the nonmember spouse's death. Any revocation or change of a designation of a beneficiary shall be in writing on a form provided by the secretary to the board, shall be notarized by a notary public, and shall be filed with the secretary.

• F. If the alternate payee does not designate a beneficiary or if all designated beneficiaries predecease the alternate payee:

  1. In the case of a alternate payee who has been awarded a combined account, any payments which would have been made to the alternate payee but for the death of the alternate payee shall be paid to the alternate payee's estate.

  2. In the case of an alternate payee who has been awarded a separate account, any accumulated contributions remaining in alternate payee's separate account and any unpaid monthly allowance payable at the time of the alternate payee's death shall be paid to the alternate payee's estate.

• G. Nothing in this section shall be deemed to mean that any alternate distribution option elected by an alternate payee shall continue beyond the death of the alternate payee. Payments of any amounts under an alternate distribution option cease upon the death of the alternate payee. Payment of any such amount

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to the alternate payee's beneficiary or estate is expressly limited to the monthly allowance, or portion thereof due but unpaid for the month in which the death of the alternate payee occurs.

(Ord. 27712.)

• A. Under no circumstances shall the board or this plan be required to make payments in any manner that would result in an increase in the amount of benefits provided under this plan.

• B. All benefits payable from this plan shall be determined on the basis of the actuarial assumptions and interest rates that are specifically set forth in this plan, or the economic and demographic actuarial assumptions and interest rates adopted by the board in those instances where the board has such authority under the provisions of this plan.

• C. Any age factor used in calculation of benefits to the alternate payee shall be based on the age of the alternate payee at the time benefits commence or, in the case where the alternate payee elects an alternate distribution option pursuant to Section 3.36.3590, as of the date benefits first become payable to the participant.

(Ord. 27712.)

• A. If the participant retires for disability, the combined benefit payments to both the participant and the alternate payee shall not exceed the amount that would otherwise have been paid to the participant alone.

• B. In the case where the alternate payee has been awarded a separate account, no payment shall be made to the alternate payee until such time as the participant would have been eligible for a service retirement had the participant continued working. Disability benefits shall be allocated between the participant and the alternate payee as follows:

  1. Until the date the participant would have been eligible for a service retirement or

the date the alternate payee applies to receive a monthly allowance, whichever date is later, disability retirement benefits shall be paid to the participant without regard to the service credit awarded to the alternate payee.

2. Once the participant would have been eligible for a service retirement had the participant continued working and the alternate payee applies to receive a monthly allowance from the retirement fund, the amount of the monthly allowance payable to each party shall be determined as though the participant had retired for service.

• (Ord. 27712.)

Part 18

PURCHASE OF ELIGIBLE PRIOR MILITARY SERVICE

Sections:

3.36.3720 Cost of additional benefit for military service.

3.36.3730 Method of payment.

3.36.3740 Service credit.

• A. Subject to the conditions, limitations and requirements of this Part 18, a member of this plan may purchase service credit in this plan for eligible prior military service.

• B. For the purpose of this part, "eligible prior military service" means active service with the Armed Forces or the Merchant Marines of the United States, including time during any period of rehabilitation afforded by the United States government other than a period of re-

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habilitation purely for educational purposes, where all of the following conditions are satisfied:

1. The military service was performed prior to the member's first employment by the City of San José.

2. The military service is not eligible for service credit in this plan under any provisions other than this Part 18.

3. The member does not receive any service credit toward a military pension for the same period of time.

4. The member does not receive any service credit in a reciprocal system (as described in Part 16 of this chapter) for the same period of time.

5. The military service is continuous; provided, however, that a member may select which of two or more periods of continuous military service for which the member elects to purchase service credit in this plan.

6. The military service for which the member elects to purchase service credit does not exceed four years.

• C. In the event there is any dispute regarding a member's eligibility to purchase prior military service, the amount of eligible prior military service, the contributions required or the actuarial reduction in the monthly retirement benefit required for the purchase, or the amount of service to be credited to a member, the board shall determine the issue based on the relevant information presented to the board.

• (Ords. 26464, 29266, 29879.)

In order to purchase service credit for eligible prior military service, the member must satisfy all of the following conditions:

• A. The member must separate from city service by reason of retirement on or after August 21, 2001. A person who separates from city service for any reason other than retirement shall not be eligible to

purchase service credit for eligible prior military service, regardless of whether the person elects to leave his or her contributions on deposit with the retirement fund.

• B. The member must file with the secretary to the retirement board a written notice of election to purchase service credit for eligible prior military service.

• C. Within thirty days after filing the notice of election, the member must retire for service or disability under the provisions of this chapter.

• D. The member must make an irrevocable election to pay the full cost of the additional benefit to the member as determined pursuant to Section 3.36.3720.

• (Ord. 26464.)

• A. The member shall pay the full cost of any and all additional benefits that accrue to the member or the member's survivors as a result of the purchase of service credit for eligible prior military service.

• B. The cost of the additional benefits shall be actuarially determined as the difference between (a) the value of the benefits calculated including service credit for the eligible prior military service and (b) the value of the benefits calculated without service credit for the eligible prior military service.

• C. The cost of the additional benefits shall be determined using the interest rate and life expectancy tables used in determining the actuarial equivalents of the optional settlements provided under Part 9.5 of this chapter.

• D. The cost of the additional benefits shall include cost-of-living-adjustments provided under Chapter 3.44.

• E. For any member who, at the time the notice of election is filed, would not be eligible for a service retirement pursuant to this chapter unless the member received service credit for the

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eligible prior military service, the cost of the additional benefits shall be determined assuming that the member's final compensation would remain unchanged from the date of the member's retirement to the date the member would have first been eligible for a service retirement had the member not elected to purchase service credit for eligible prior military service.

• F. If the member elects the installment payment option under Section 3.36.3730.A.2, the calculation of the cost of the additional benefits shall include an interest factor on the outstanding balance. The interest factor shall be at the interest rate used in determining the actuarial equivalents of the optional settlements provided under Part 9.5 of this chapter.

• (Ord. 26464.)

• A. The member must pay the full cost of the additional benefit:

  1. By making a lump sum payment to the retirement fund prior to the member's retirement; provided, however, that this option shall not be permitted if such payment would exceed the limitations of Section 415 of the Internal Revenue Code; or

  2. By making installment payments by executing an irrevocable written election to have the member's monthly retirement benefit actuarially reduced for a period of time selected by the member; provided that such period shall not exceed eight years from the effective date of the member's retirement, and provided that the payments do not exceed the limitations of Section 415 of the Internal Revenue Code; or

  3. By making a combination of a lump sum payment and installment payments as described in paragraphs 1. and 2. above.

• B. No person shall be permitted to purchase service credit for eligible prior military service by making installment payments if:

  1. The required actuarial reduction would exceed the monthly retirement benefit otherwise payable to the member; or

  2. The required deduction from a surviving spouse's benefit under Section 3.36.3740.B. would exceed the monthly benefit otherwise payable to the surviving spouse.

• (Ord. 26464.)

• A. Upon the member's retirement, the member shall be given service credit for the eligible prior military service the member has elected to purchase.

• B. If a member elects to purchase service credit for eligible prior military service and pay the contributions and interest specified in this part by making installment payments but fails to complete the required payments because of death before the end of the installment payment period, the unpaid contributions and interest shall be deducted from any benefits paid to an eligible surviving spouse. Such deductions shall be in the same dollar amount as the amount of the actuarial reduction in the member's benefit and shall be made for the time remaining in the installment payment period elected by the member.

• (Ord. 26464.)

Under no circumstances shall the service credit for eligible prior military service be included in the determination of service credit for qualification for medical benefits provided under Part 14 of this chapter or for the qualification for dental benefits provided under Part 15 of this chapter. (Ord. 26464.)

The retirement plan shall bear the cost of one calculation of the full cost of the additional bene-

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§ 3.36.3760

fits. In the event the member fails to retire within thirty days of filing the notice of election described in Section 3.36.3710, cost of the additional benefits shall be recalculated so that it is determined within not more than thirty days prior to the effective date of the member's retirement and the member shall bear the cost of such calculation. (Ord. 26464.)