Chapter 3.44

COST-OF-LIVING ADJUSTMENTS

Sections:

• 3.44.010 Definitions.

• 3.44.020 Initial cost-of-living increase in survivorship allowance payable to survivor of recipient of retirement allowance who dies after April 1, 1970.

• 3.44.030 Cost-of-living increases or decreases - Amount - Exceptions.

• 3.44.040 Determination of percentage of increase or decrease in cost of living.

• 3.44.045 Offset of accumulated increases or decreases.

• 3.44.050 Cost-of-living increases - Members by reason of certain contract with county.

• 3.44.060 Determination of time of retirement.

• 3.44.070 Limitations and exceptions. 3.44.080 Limitation on decreases in amounts of allowances.

• 3.44.090 Funding of increases in allowances - Police and fire plans.

• 3.44.095 Additional employee contributions - Police and fire plans.

• 3.44.100 Funding of increases in allowances - Federated employee plans.

• 3.44.105 Additional employee contributions.

• 3.44.110 Payroll deductions.

• 3.44.120 Crediting of contributions and interest thereon to individual accounts.

• 3.44.130 Return of contributions and interest.

• 3.44.140 Investment of funds.

• 3.44.150 Chapter 3.36 police and fire plan - Effective February 1, 2002 and for tier 2 members effective March 31, 2017.

• 3.44.160 Federated city employees retirement system - Effective April 1, 2006, and for tier 2, effective September 30, 2012.

As used in and for purposes of this Chapter

3.44:

• A. "Index-year" means each calendar year, respectively, next preceding each "subject year."

• B. Subject to the exceptions hereinafter specified in this Chapter 3.44, the term "retirement allowance" means and includes any of the biweekly or monthly serviceretirement or disability-retirement allowances, or any of the biweekly or monthly installments of any monthly or annual service-retirement or disability-retirement allowances, specified in the following subdivisions:

  1. Those specified in Chapter 3.16, Chapter 3.20, Chapter 3.32, Parts 6

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  - and 7 and Sections 3.36.1630 and 3.36.1790 of Chapter 3.36 of the San José Municipal Code, to any of the following persons: 

2. Those specified in Section 3.24.510, Part 15 or 16 and Part 17 or 18 of Chapter 3.24 of the San José Municipal Code; and

3. Those specified in Parts 9, 10 and 13 of Chapter 3.28 of the San José Municipal Code; which are or may become payable on or after April 1, 1970, under and pursuant to any of the provisions of Chapters 3.16, 3.20, 3.24, 3.28, 3.32 or 3.36 of the San José Municipal Code, to any member or former member of any of the city retirement plans established by said Chapters 3.16, 3.20, 3.24, 3.28, 3.32 or 3.36, including any increases therein, if any, authorized by the provisions of Chapter 3.40 of this code.

• C. "Subject year" means each consecutive twelve- month period, from April 1st of one calendar year to March 31st of the following calendar year, respectively, commencing with the twelve- month period from April 1, 1970, to March 31, 1971, for which retirement allowances and survivorship allowances are to be increased or decreased as hereinafter provided in this Chapter 3.44.

• D. Subject to the exceptions hereinafter specified in this Chapter 3.44, the term "survivorship allowance" means and includes any of the biweekly or monthly allowances, and any of the biweekly or monthly installments of any monthly or annual allowance, which are or may become payable on or after April 1, 1970, under and pursuant to the provisions of Section 3.24.2040 and Part 19 of Chapter 3.24; Sections 3.28.1480 and 3.28.1490 of Part 11 and Sections 3.28.1500,

  • 3.28.1590, 3.28.1600 of Part 12, or Parts 13 or 14 of Chapter 3.28; and Sections 3.36.1630, 3.36.1790 and Parts 8, 9 and 9.5 of Chapter 3.36 of the San José Municipal Code, to any of the following persons:

  1. To any "surviving spouse," "surviving domestic partner" or "surviving child" as such terms are defined in Part 8 of Chapter 3.36; or

  2. To any "eligible surviving child" as such term is defined in Part 9 of Chapter 3.36; or

  3. To any beneficiary under Part 19 of Chapter 3.24; or

  4. To a "surviving wife," "surviving husband" or "surviving child" under Section 3.24.2040 of Chapter 3.24; or

  5. To any "surviving spouse," "surviving child" or "surviving children" as such are defined in Part 11 of Chapter 3.28; or

  6. To any "surviving spouse," "surviving child" or "surviving children" as defined in Part 12 of Chapter 3.28; or

7. To any "beneficiary" under Part 13 of Chapter 3.28; or

   8. To any "eligible surviving child" as defined in Part 14 of Chapter 3.28; including any increases, if any, authorized by the provisions of Chapter 3.40 of the San José Municipal Code.

   9. To any "spouse" or "domestic partner" receiving benefits pursuant to an election made under Part 9.5 of Chapter 3.36.

• E. "Tier 2 member" means any person who is hired, rehired, or reinstated by the city on or after September 30, 2012, under the terms of the federated city employees' retirement system, established by Chapters 3.24 and 3.28 of the San José

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Municipal Code. Effective on or after August 4, 2013, "tier 2 member" also means a person who meets the requirements of Section 3.36.020.15 under the police and fire retirement plan. Any amendments to the definition of "tier 2 member" in Section 3.28.030.28 and Section 3.36.020.15 also apply for purposes of this Section and Chapter 3.44.

(Prior code §§ 2904.500 - 2904.503; Ords. 26417, 26902, 27521, 27712, 29120, 29266.)

Upon the death, after April 1, 1970, of the recipient of a "retirement allowance," any "survivorship allowance" (including the increase therein, if any, authorized by the provisions of Chapter 3.40 of this Code) which may become payable to a survivor of said deceased person upon his death, shall be increased, as of the date said survivorship allowance first becomes payable, by a percentage equal to the percentage of increase, if any, in the amount of retirement allowance which the deceased had become entitled to, under the provisions of this Chapter 3.44 from April 1, 1970, to the date of his death. Such survivorship allowances as so increased shall thereafter be subject to further increase, or to decrease as hereinafter provided in this Chapter 3.44. (Prior code § 2904.504.)

Subject to and except as otherwise provided by the provisions of this section or of other sections of this Chapter 3.44, each retirement allowance and each survivorship allowance which is or may become payable, under and pursuant to those provisions of Chapters 3.16, 3.20, 3.24, 3.28, 3.32 and 3.36 of this Code which are hereinabove specified in subsections B. and D. of Section 3.44.010, for any month or two-week period in any subject year subsequent to March 31, 1970, together with such

increases, if any, in the amount of any such allowance as have been authorized by the provisions of Chapter 3.40 of this Code, plus such increase, if any, as may have been given pursuant to the provisions of Section 3.44.020 of this chapter, plus or minus such increases or decreases, if any, in the amounts of such allowances as shall have been theretofore made pursuant to the provisions of this Chapter 3.44 in preceding subject years, shall be increased or decreased by a percentage which equals, to the nearest one-tenth of one percent, the percentage by which the cost of living for the month of December of the index-year immediately preceding said subject year shall have increased over or decreased below the cost of living for the month of December of the calendar year immediately preceding such index-year, determined in the manner hereinafter specified in this Chapter 3.44, provided and excepting however, that:

• A. No allowances shall be increased or decreased, pursuant to the provisions of this section or any of the following sections of this chapter, for any month or two-week period in a subject year by a percentage in excess of three percent over, or below, the amount of such allowance payable in any month or two-week period of the immediately preceding subject year.

• B. No retirement allowance payable to a particular person shall be increased or decreased, pursuant to the provisions of this section or any of the following sections of this chapter, for any month or two-week period in a particular subject year unless the person to whom such allowance is payable retired and became entitled to receive a retirement allowance on or prior to March 31st of the indexyear immediately preceding said particular subject year.

• C. No survivorship allowance, including any increase therein provided for by Section 3.44.020, payable to a particular person shall be increased or decreased, pursuant

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to the provisions of this section or any of the following sections of this chapter, for any month or two-week period in a particular subject year unless the deceased person on account of whose death such survivorship allowance is payable died on or prior to March 31st of the indexyear immediately preceding said particular subject year.

• D. Notwithstanding subsection B. above, with respect to persons who retire on or after April 1, 1980, the retirement allowance payable to such persons for the period beginning on the first anniversary of the first day of the month immediately following the month in which such retirement occurs and ending at the end of the subject year in which such anniversary occurs shall be increased or decreased, but such increase or decrease for such period shall be on pro rata basis calculated on the percentage (not exceeding three percent) of increase or decrease in the cost of living for the index-year next preceding the subject year in which such period occurs over or below the cost of living for the calendar year immediately preceding such index-year and determined by multiplying such percentage by a fraction, the denominator of which is twelve and the numerator of which is the number of months in such period. Thereafter, such retirement allowances as so increased or decreased shall be increased or decreased in succeeding subject years in accordance with the other provisions of this section and chapter.

• E. Notwithstanding subsection C. above, with respect to persons whose survivorship allowance is payable pursuant to Chapter 3.32 or Chapter 3.36 of this Code on account of the death of a person who dies on or after April 1, 1980, the survivorship allowance payable to such persons for the period beginning on the first an-

niversary of the first day of the month immediately following the month in which such death occurs and ending at the end of the subject year in which such anniversary occurs shall be increased or decreased, but such increase or decrease for such period shall be on a pro rata basis calculated on the percentage (not exceeding three percent) of increase or decrease in the cost of living for the index-year next preceding the subject year in which such period occurs over or below the cost of living for the calendar year immediately preceding such index-year and determined by multiplying such percentage by a fraction, the denominator of which is twelve and the numerator of which is the number of months in such period. Thereafter, such survivorship allowances as so increased or decreased shall be increased or decreased in succeeding subject years in accordance with the other provisions of this section and chapter.

• F. Notwithstanding subsection C. above, with respect to persons whose survivorship allowance is payable pursuant to Chapter 3.24 or Chapter 3.28 of this Code on account of the death of a person who dies on or after June 26, 1988, the survivorship allowance payable to such persons shall be increased or decreased as follows:

  1. Death of Member Prior to Retirement. In the case of the death of a member of the federated city employees retirement system which occurs before such member's retirement, the increase or decrease in the survivorship allowance shall occur at the time the member's retirement allowance would have increased or decreased in accordance with subsection D. above had the member not died but instead had retired effective on the date of death.

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2. Death of Member After Retirement. In the case of the death of a person who had retired from the federated city employees retirement system, the increase or decrease in the survivorship allowance shall occur at the time the decedent's retirement allowance would have increased or decreased pursuant to this section had the decedent not died but instead had continued to receive a retirement allowance.

(Prior code § 2904.505; Ords. 20479, 20653, 22808.)

Within the three calendar months immediately preceding the commencement of each subject year, respectively, beginning with the first three months of the calendar year 1970, the retirement board of each of the retirement plans or systems pursuant to which the retirement allowances and survivorship allowances specified in the preceding sections of this chapter are payable, shall determine the percentage of increase or decrease in the cost of living during the index-year next preceding the commencement of the immediately following subject year, over or below the cost of living in the calendar year immediately preceding such index-year. Such shall be done by reference to the most current consumer price index for all urban consumers (CPI-U), San José-San Francisco-Oakland metropolitan area, all items (1967 = 100), as published by the United States Department of Labor's bureau of labor statistics, showing the cost-of-living increase or decrease during the month of December of such indexyear over or below the cost of living during the month of December of the calendar year immediately preceding such index-year.

The percentage by which the cost of living for the month of December of such index-year, as shown by said index, shall have increased or decreased over or below the cost of living for the month of December of the calendar year immediately preceding such index-year, as shown by said

index, shall be the percentage used, subject to the three percent limitation hereinabove contained in Section 3.44.030 of this chapter, to determine the amount of increases or decreases in retirement allowances and in survivorship allowances which are to be made in the following subject year as above provided for in Section 3.44.030 of this chapter.

If the percentage by which the cost of living for the month of December of any index-year shall have increased or decreased over or below the cost of living for the month of December of the calendar year immediately preceding such index-year is in excess of three percent, the excess shall be accumulated from year to year and included in the determination of the increases or decreases in cost of living in succeeding index-years the same as if they occurred in such succeeding index-years; provided and excepting, however, that:

• A. No retirement allowance shall be increased or decreased because of such accumulated increases or decreases in cost of living unless and except to the extent that such accumulated increases or decreases occurred either:

  1. During or after the index-year within which the recipient of such allowance retired from city service if he retired from such service within the first three months of a calendar year; or

  2. During or after the index-year following the index-year within which the recipient of such allowance retired from city service if he retired from such service within the last nine months of a calendar year, but in no event shall such accumulated increases or decreases include any increases or decreases occurring in any index-year prior to the 1969 index-year.

• B. No survivorship allowance shall be increased or decreased because of such accumulated increases or decreases in cost

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of living unless and except to the extent that such accumulated increases or decreases occurred either:

1. During or after the index-year within which the member or former member of an above-mentioned retirement plan or system, because of whose death the survivorship allowance is payable, either retired from city service or died (whichever occurred earlier) if he died or retired within the first three months of a calendar year; or

2. During or after the index-year following the index-year within which he retired from city service or died (whichever occurred earlier) if he died or retired within the last nine months of a calendar year, but in no event shall such accumulated increases or decreases include any increases or decreases occurring in any index-year prior to the 1969 indexyear.

• C. No accumulated increases or decreases shall include any increases or decreases which occurred in any index-year prior to the 1969 index-year.

• D. Increases and decreases in the amounts of allowances for each subject year, respectively, shall still be subject to the three percent limitation set forth in Section 3.44.030.

(Prior code § 2904.506; Ords. 20064, 29120.)

The accumulated percentage increases or decreases in cost of living set forth in Section 3.44.040 shall be offset by the increase in monthly allowance payable pursuant to Chapter 3.42 of this Code as follows:

• A. The increase in monthly allowance set forth in Section 3.42.020 or Section 3.42.110 shall be expressed as a percent-

age increase and the percentage shall be subtracted from the accumulated percentage increases or decreases set forth in Section 3.44.040.

• B. The remaining accumulated percentage increases or decreases shall be included in the determination of increases or decreases of retirement allowances and survivorship allowances as provided in Section 3.44.040.

• C. If the increase in monthly allowance percentage calculated pursuant to subsection A. above is greater than the accumulated increases or decreases, the accumulated increases or decreases shall be set at zero for the index-year in which the offset occurs.

(Ords. 22279, 24095.)

All monthly allowances and monthly survivorship allowances payable under Sections 3.36.760, 3.36.1350 and 3.36.1360 shall be eligible for and entitled to the cost of living increases or decreases set forth in this chapter. 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 § 2904.516.)

For purposes of this Chapter 3.44, a member or former member of any retirement plan or system of the city whose employment by the city was terminated by his retiring therefrom pursuant to such plan or system shall be deemed to have retired from service of the city as of the day immediately following the last day of his employment by the city; and a member or former member of any such retirement plan or system whose employment by the city was terminated by resignation, layoff, discharge or other means excepting retirement, but who subsequently becomes eligible under said plan or system to receive a monthly, biweekly or annual allowance

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pursuant to the provisions of Section 3.24.510, 3.24.590, 3.36.1630 or 3.36.1790 of this Code, shall be deemed to have retired on account of his service to the City of San José as of the first day of the first period for which he receives such allowance pursuant to the above specified sections or provisions, and in such case his said allowance shall be deemed to be a retirement allowance. (Prior code § 2904.507.)

Anything elsewhere in this Chapter 3.44 to the contrary notwithstanding, none of the provisions of this Chapter 3.44 shall be deemed to authorize or provide for:

• A. Any increase or decrease in the amount of any retirement allowance or survivorship allowance, or portion thereof, purchased by additional contributions of an employee pursuant to the provisions of Sections 3.20.400, 3.20.410, 3.24.590, 3.24.740, or other similar sections of the San José Municipal Code; or

• B. Any increase or decrease in the amount of any allowance or payment paid, payable or made pursuant to the Workers' Compensation Act of the state, or other similar law, ordinance or regulation; or

• C. Any increase or decrease in the amount of any retirement allowance or survivorship allowance paid, payable or made pursuant to the provisions of Section 3.24.510, 3.28.580 or 3.28.590 of the San José Municipal Code unless the member or former member because of whose service such an allowance is payable has or had to his credit in the retirement system of which said section is a part, at the time of commencement of retirement, at least five years of such service.

• (Prior code § 2904.508; Ords. 21371, 23485.)

Anything elsewhere to the contrary notwithstanding, no retirement allowance and no survivor-

ship allowance shall ever be decreased pursuant to the provisions of this Chapter 3.44 below the amount which the recipient is entitled to under applicable provisions of Chapters 3.16, 3.20, 3.24, 3.28, 3.32 or 3.36 of this Code, plus such increases, if any, as he may be entitled to under the provisions of Chapter 3.40 of the San José Municipal Code. (Prior code § 2904.509.)

Such increases in retirement allowances and in survivorship allowances as shall become payable under and pursuant to the provisions of this Chapter 3.44 to city retirees who are members or former members of the 1961 police and fire department retirement plan established by Chapter 3.36 of the San José Municipal Code; city retirees who are members or former members of the police and fire department retirement plan established by Chapter 3.32 of this Code; and survivors of members or former members of the above specified police and fire department retirement plans, together with all other payments required to be made to said city retirees and survivors under the provisions of this Chapter 3.44, shall be funded as follows:

• A. Special fund. The special fund heretofore created and now existing in the city treasury as the "police and fire cost-of-living fund" shall continue in existence. All moneys in said fund, and all moneys hereafter transferred, paid into, earned by and credited to said fund shall be used to pay such increases in the above-mentioned allowances as shall become payable under and pursuant to the provisions of this chapter.

• B. Members' contributions.

  1. For each calendar month or twoweek period from and after the first day of April, 1970, each person who is required by the provisions of either of the two above-mentioned police and fire department retirement plans to make contributions

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• to the above-mentioned police and fire cost-of-living fund. Until changed by the board of administration for police and fire department retirement plan referred to in Section 3.36.300 of this Code, hereinafter referred to in this Chapter 3.44 as the police and fire retirement board, the cost-of-living contribution required to be made each month or biweekly by each contributor, other than the city, shall be an amount equal to that percentage of the contribution required to be made by such person to either or both of the police and fire department retirement plans or systems established by Chapters 3.32 and 3.36 of this Code, which was in effect on June 30, 1975, under the provisions of this Chapter 3.44 as they read on said date; provided, however, that cost-of-living contributions shall be made by tier 2 members equal to that amount of such tier 2 member's earned monthly (or biweekly if contributions are made biweekly) compensation as shall be required to provide for the equal sharing of the cost of any cost-of-living increases for tier 2 members between the city and the tier 2 members.

2. From time to time and as often as may be reasonably necessary to keep the plan established by this Chapter 3.44 actuarially sound, but not less frequently than once each five years, the above specified police and fire retirement board shall review the percentage rate of monthly or biweekly cost-of-living contribution required of contributors other than the city to determine whether it should be reestablished or changed and, subject to the requirements set

y to keep the plan established by this Chapter 3.44 actuarially sound, but not less frequently than once each five years, the above specified police and fire retirement board shall review the percentage rate of monthly or biweekly cost-of-living contribution required of contributors other than the city to determine whether it should be reestablished or changed and, subject to the requirements set

forth in this section, shall reestablish such rate or make such change therein as may be reasonably necessary to comply with the provisions of this section. The percentage rate of the cost-of-living contributions so established from time to time by said retirement board for contributors other than the city shall be such as will be sufficient, on the average with moneys, if any, already then in the above-mentioned special fund and with cost-of-living contributions required of the city and with anticipated earnings of said fund:

• a. To make up any deficits then existing in the above-mentioned special fund;

• b. To pay all increases in retirement allowances and in survivorship allowances which, on the basis of actuarial and other relevant information can reasonably be expected to become payable under and pursuant to the provisions of this chapter; and

• c. To make such other payments as may be required by the provisions of this chapter and to provide a reasonable reserve for contingencies.

3. The rate of monthly cost-of-living contribution required of each contributor other than the city shall always be a percentage of the monthly contribution which such contributor is required by the provisions of Chapter 3.32 or 3.36 of this Code to make to either or both of the said police and fire department retirement plans established by said Chapters 3.32 and 3.36; and said percentage rate shall always be the same for all such contributors

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other than tier 2 members. With respect to tier 2 members, the rate of monthly or biweekly cost-ofliving contributions required of each tier 2 contributor shall always be an amount of each tier 2 member's earned monthly (or biweekly, if contributions are made biweekly) compensation that shall be required to produce an equal sharing of the cost of any cost-of-living increases between the city and the tier 2 members, and the rate of such contributions shall always be the same for all such tier 2 contributors.

• C. City contributions. For each month, respectively, from and after the first day of April, 1970, the city shall contribute to the above-mentioned police and fire costof-living fund the sum of eight dollars for each three dollars contributed to said fund for each such month, respectively, by persons other than the city who are not tier 2 members pursuant to the provisions of the immediately preceding Subsection B. of this section. With respect to the police and fire cost-of-living for tier 2 members, for each month (or for each two-week period if biweekly contributions are required of members), respectively, the city shall contribute an amount intended to provide equal sharing of the costs of any cost-of-living increases with tier 2 members.

uant to the provisions of the immediately preceding Subsection B. of this section. With respect to the police and fire cost-of-living for tier 2 members, for each month (or for each two-week period if biweekly contributions are required of members), respectively, the city shall contribute an amount intended to provide equal sharing of the costs of any cost-of-living increases with tier 2 members.

• D. Except as provided in Section 3.36.1520.E. of Chapter 3.36, in determining any costof-living contributions that may be due under this Chapter 3.44, there shall be no offset to cost-of-living 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 § 2904.510; Ords. 20276, 29266, 29879.)

Notwithstanding any other provisions of this Chapter 3.44, the city shall be entitled to an offset of a percentage, as is determined to be appropriate, by the actuary for the police and fire department retirement plan, of the additional employee retirement fund contributions that are made under subsections A. and B. of Section 3.36.1525, against the COLA fund contributions that the city would otherwise be required to make under this Chapter 3.44. (Ord. 28753.)

Such increases in monthly retirement allowances and in monthly survivorship allowances as shall become payable under and pursuant to the provisions of this Chapter 3.44 to City retirees who are members or former members of the Federated City Employees' Retirement System, established by Chapters 3.24 and 3.28 of the San José Municipal Code; and survivors of members or former members of said Federated City Employees' Retirement System, together with all other payments required to be made to said City retirees and survivors under the provisions of this Chapter 3.44, shall be funded as follows:

• A. Special Fund. The special fund heretofore created and now existing in the City treasury, known and designated as the "Federated Employees' Cost-of-Living Fund," shall continue in existence. All moneys in such fund on the effective date of this Section, as amended, and all moneys thereafter paid into, earned by and credited to said fund, shall be used to pay such increases in the above-mentioned allowances as shall become payable under and pursuant to the provisions of this Chapter 3.44.

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• B. Members' Contributions.

  1. Each person who is required by the provisions of the above-mentioned 1975 Federated Employees' Retirement System, established by Chapter 3.28 of this Code, to make contributions to such Retirement System shall make cost-of-living contributions to the above-mentioned Federated Employees' Costof-Living Fund. Such cost-of-living contributions shall be made monthly if other contributions required of members by said 1975 Federated Employees' Retirement System are made monthly or biweekly if other contributions required of said members by said Retirement System are made biweekly. Until changed by the Federated Retirement Board on the basis of subsequent actuarial valuation, the cost-of-living contributions required to be made in each month or biweekly period by each contributor, other than the City, shall be an amount equal to that percentage of such member's earned monthly (or biweekly if contributions are made biweekly) compensation which was in effect on June 30, 1975, under the provisions of this Chapter 3.44 as they read on said date; provided, however, that cost-of-living contributions shall be made by Tier 2 members equal to that amount of such Tier 2 member's earned monthly (or biweekly if contributions are made biweekly) compensation as shall be required to provide for the equal sharing of the cost of any cost-of-living increases for Tier 2 members between the City and the Tier 2 members.

  2. From time to time and as often as may be reasonably necessary to keep

the Plan established by this Chapter 3.44 actuarially sound, but not less frequently than once each five (5) years, the above-specified Federated Retirement Board shall review the percentage rate of the cost-ofliving contribution required of contributors, other than the City, to determine whether it should be reestablished or changed and, subject to the requirements set forth in this Section, shall reestablish such rate or make such change therein as may be reasonably necessary to comply with the provisions of this Section. The percentage rate of the cost-ofliving contribution so established from time to time by said Retirement Board for contributors other than the City shall be such as will be sufficient, with moneys already in the above-mentioned special fund and with cost-of-living contributions required of the City and with anticipated earnings of said fund:

• a. To make up any deficits then existing in the above-mentioned special fund;

• b. To pay all increases in retirement allowances and in survivorship allowances which, on the basis of actuarial and other relevant information, can reasonably be expected to become payable under and pursuant to the provisions of this Chapter; and

• c. To make such other payments to said City retirees and survivors as may be required by the provisions of said Chapter 3.44 and to provide a reasonable reserve for contingencies.

3. The rate of monthly or biweekly cost-of-living contribution required

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of each contributor other than the City shall always be a percentage of each member's earned monthly (or biweekly, if contributions are made biweekly) compensation, and said percentage rate shall always be the same for all such contributors other than Tier 2 members. With respect to Tier 2 members, the rate of monthly or biweekly cost-of-living contributions required of each Tier 2 contributor shall always be an amount of each Tier 2 member's earned monthly (or biweekly, if contributions are made biweekly) compensation that shall be required to produce an equal sharing of the cost of any cost-of-living increases between the City and the Tier 2 members; and the rate of such contributions shall always be the same for all such Tier 2 contributors.

• C. City Contributions. For each month (or for each two-week period if biweekly contributions are required of members), respectively, the City of San José shall contribute to the above-mentioned Federated City Employees' Cost-of-Living Fund the sum of eight dollars ($8.00) per three dollars ($3.00) contributed to said fund for each such month or two-week period, respectively, by persons other than the City who are not Tier 2 members, pursuant to the immediately preceding subsection B. of this Section. Notwithstanding the foregoing, for each month (or for each two-week period if biweekly contributions are required of members), respectively, the City shall contribute an amount intended to provide equal sharing of the costs of any cost-of-living increases with Tier 2 members.

• D. Except as provided in Section 3.28.710.C and Section 3.28.860.C, in determining any cost-of-living contributions that may

be due under this Chapter 3.44, any excess of assets over the actuarial accrued liability shall not be taken into account in determining such cost-of-living contributions to the Plan.

(Prior code § 2904.511; Ords. 20276, 20596, 29120, 29904.)

Notwithstanding any other provisions of this Chapter 3.44, the city shall be entitled to an offset of a percentage, as is determined appropriate by the actuary for the federated city employees retirement system, of the additional employee retirement contributions that are made under Section 3.28.755 against the COLA fund contributions that the city would otherwise be required to make under this Chapter 3.44. (Ord. 28752.)

Any and all cost-of-living contributions required of persons other than the city by the provisions of this Chapter 3.44 shall be paid to and collected by the city's director of finance, and deposited by him in the city treasury to the credit of the special cost-of-living fund entitled thereto. Said director of finance shall, to the fullest extent possible, collect all cost-of-living contributions required of such persons by deducting the amount of such contributions from the monthly or biweekly compensation payable by the city to such persons for services rendered by them to the city. (Prior code § 2904.512.)

Each cost-of-living contribution made by each contributor other than the city pursuant to this Chapter 3.44 shall be credited by the director of finance to an individual account established for such person for such purpose; and accumulated cost-of-living contributions of each such person shall be credited with interest earned thereon at a reasonable rate fixed by the police and fire retire-

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ment board with respect to contributions who are members of the above-mentioned police and fire department plans, and fixed by the federated retirement board with respect to members of the federated retirement systems established by Chapter 3.24 and Chapter 3.28 of the San José Municipal Code. (Prior code § 2904.513.)

• A. In each of the following situations, and none other, cost-of-living contributions, and interest thereon, credited to the individual account of a contributor shall be returned as follows:

  1. If the contributor is a member of the police and fire department retirement plan established by Chapter 3.32 of the San José Municipal Code, the cost-of-living contributions, and interest thereon, credited to such contributor shall be returned to him if and when he becomes entitled to the return of and is paid, under and pursuant to the provisions of Sections 3.32.340, 3.32.350 or 3.32.360 of this Code, those accumulated contributions contributed by him to the police and fire department plan established by said Chapter 3.32.

  2. If the contributor is a member of the police and fire department retirement plan established by Chapter 3.32 of the San José Municipal Code, the cost-of-living contributions, and interest thereon, credited to such contributor shall be returned to his widow or estate, as the case may be, if and when such widow or estate becomes entitled to the return of and is paid, under and pursuant to the provisions of Sections 3.32.340, 3.32.350 or 3.32.360 of this Code, those accumulated contributions contributed by him to the police and fire department plan established by said Chapter 3.32.

  3. If the contributor is a member of the police and fire department plan established by Chapter 3.36 of the San José

Municipal Code, the cost-of-living contributions, and interest thereon, credited to such contributor shall be returned to him if and when he becomes entitled to receive and elects to receive and is paid, under and pursuant to the provisions of Sections 3.36.1620 or 3.36.1630 of this Code, those accumulated contributions contributed by him to the police and fire department plan established by said Chapter 3.36.

4. If the contributor is a member of the police and fire department retirement plan established by Chapter 3.36 of the San José Municipal Code, the cost-of-living contributions, and interest thereon, credited to such contributor shall be returned to the survivor or survivors or estate of such contributor if and when such survivor or survivors or estate becomes entitled to receive and is paid, under and pursuant to the provisions of said Chapter 3.36, those accumulated contributions contributed by said contributor to the police and fire department retirement plan established by Chapter 3.36; provided and excepting, however, that said cost-of-living contributions and interest shall not be so returned and paid to said survivor, survivors or estate if any of said survivors or said estate is or becomes or may become entitled to receive any monthly or biweekly allowance under and pursuant to the provisions of said Chapter 3.36.

fire department retirement plan established by Chapter 3.36; provided and excepting, however, that said cost-of-living contributions and interest shall not be so returned and paid to said survivor, survivors or estate if any of said survivors or said estate is or becomes or may become entitled to receive any monthly or biweekly allowance under and pursuant to the provisions of said Chapter 3.36.

5. If the contributor is a member of the federated city employees retirement plan established by Chapter 3.24 or Chapter 3.28 of the San José Municipal Code, the cost-of-living contributions, and interest thereon, credited to him shall be returned to him if and when he becomes entitled to receive and does receive, under and pursuant to the provisions of said Chapter 3.24 or Chapter 3.28 the

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return of all accumulated contributions contributed by him to the federated city employees retirement plan established by said Chapter 3.24 or Chapter 3.28.

6. If the contributor at the time he retired or died was a member of the retirement plan established by Chapter 3.24 or Chapter 3.28 of the San José Municipal Code, the cost-of-living contributions and interest thereon which are credited to him shall be paid to such survivor, beneficiary or estate of such contributor as may become entitled to receive, under the provisions of said Chapter 3.24 or Chapter 3.28 plan, all or any of the accumulated contributions contributed by said contributor to such plan, but only if and when such survivor, beneficiary or estate becomes entitled to receive and is paid such contributions under said plan; provided and excepting, however, that if said contributor at the time of his death or retirement was a member of the plan established by Chapter 3.24, such cost-ofliving contributions and interest shall not be so returned or paid to said survivor, beneficiary or estate if said survivor, beneficiary or estate is or becomes or may become entitled to receive any allowance under and pursuant to the provisions of said Chapter 3.24; and provided and excepting, further, that, if said contributor at the time of his death or retirement was a member of the plan established by Chapter 3.28, said cost-of-living contributions and interest shall not be so returned or paid to said survivor, beneficiary or estate if any cost-of-living benefit has theretofore been paid or has theretofore become payable under the provisions of this Chapter 3.44.

• B. In the event that any contributor, after return to him of his accumulated contributions in any of the retirement plans established by Chapters 3.24, 3.28, 3.32 or 3.36 of this Code,

should be required because of reinstatement or otherwise, to return and repay such contributions to any of said plans, he shall, at the same time that he returns such contributions to such plans, return and repay to the city's director of finance, for credit to his account under this Chapter 3.44, all cost-of-living contributions and interest theretofore returned to him under or pursuant to the provisions of this Chapter 3.44.

einstatement or otherwise, to return and repay such contributions to any of said plans, he shall, at the same time that he returns such contributions to such plans, return and repay to the city's director of finance, for credit to his account under this Chapter 3.44, all cost-of-living contributions and interest theretofore returned to him under or pursuant to the provisions of this Chapter 3.44.

• C. Upon payment, pursuant to the provisions of this Chapter 3.44, of a contributor's accumulated cost-of-living contributions to such contributor or to any beneficiary, estate or survivor of such contributor, neither said contributor nor any of his survivors shall thereafter have any right to any allowance or other benefit under the provisions of this Chapter 3.44.

(Prior code § 2904.514.)

• A. The police and fire retirement board is hereby authorized to invest any or all moneys in the police and fire cost-of-living fund, subject to the same restrictions and limitations as are applicable to its investment of moneys in the retirement fund established by Chapter 3.36 of the San José Municipal Code.

• B. The retirement board of the federated city employees retirement plan established by Chapters 3.24 and 3.28 of the San José Municipal Code is hereby authorized to invest any or all moneys in the federated cost-of-living fund, subject to the same restrictions and limitations as are applicable to its investment of moneys in the retirement fund established by Chapter 3.28 of the San José Municipal Code.

• C. Earnings or losses from said investments shall be credited or debited to the respective costof-living fund from which such investments were made.

(Prior code § 2904.515.)

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§ 3.44.160

• A. Notwithstanding the other provisions of this chapter to the contrary, effective February 1, 2002, the following provisions shall apply to those persons who receive monthly allowances pursuant to the provisions of the police and fire department retirement plan set forth in Chapter 3.32 or Chapter 3.36 of the San José Municipal Code:

  1. "Subject year" shall mean the consecutive twelve months from February 1 of one calendar year to January 31 of the following calendar year, respectively, commencing with the twelve-month period from February 1, 2002, to January 31, 2003.

  2. Each retirement allowance and each survivorship allowance which is payable under Chapter 3.32 or Chapter 3.36 in any subject year which begins on or after February 1, 2002, together with any increases or decreases in the amount of any such allowance which were previously made pursuant to this Chapter 3.44, shall be increased by three percent per annum in lieu of the increase otherwise provided in this chapter. The first such three percent increase shall be made on February 1, 2002. With respect to tier 2 members, effective March 31, 2017, the retirement board of the retirement plan pursuant to which the retirement allowances and survivorship allowances under Chapter 3.32 or 3.36 specified in the preceding sections of this chapter are payable, shall within the first three calendar months of each subject year, beginning with the first three months of the calendar year 2014, determine the percentage of increase or decrease in the cost of living during the index-year next preceding the subject year. Such shall be done by reference to the most current consumer price index for all

urban consumers (CPI-U), San José-San Francisco-Oakland metropolitan area, all items (1967 = 100), as published by the United States Department of Labor's Bureau of Labor Statistics, showing the costof-living increase or decrease during the month of December of such index-year over or below the cost of living during the month of December of the calendar year immediately preceding such indexyear. Each retirement allowance and each survivorship allowance which is payable to a tier 2 member (or survivor of such tier 2 member) shall be increased by the lower of (i) the percentage of such increase in the CPI-U, or (ii) two percent. A tier 2 member's first COLA after retirement shall be prorated based on the number of months retired.

3. Each increase (if any for tier 2 members) shall become effective beginning with the allowance payable for the month of February in each subject year.

4. The accumulation of the excess of costof-living percentages as provided in Section 3.44.040 shall not apply.

• B. The provisions of this Chapter 3.44 which are not inconsistent with the provisions of Subsection A. shall continue to apply with respect to the persons described in Subsection A.

• C. Except as provided in Section 3.36.1520.E. of Chapter 3.36, in determining any cost-ofliving contributions that may be due under this Chapter 3.44, any amount of unfunded actuarial accrued liability shall not be used to offset the normal cost rate.

• (Ords. 26417, 29266, 29879.)

• A. Notwithstanding the other provisions of this Chapter to the contrary, effective April 1, 2006, the following provisions shall apply to those persons who receive monthly allowances pur-

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suant to the provisions of the Federated City Employees Retirement System as set forth in Chapter 3.24 or Chapter 3.28 of the San José Municipal Code:

1. Each retirement allowance and each survivorship allowance which is payable under Chapter 3.24 or Chapter 3.28 any subject year which begins on or after April 1, 2006, together with any increases or decreases in the amount of any such allowance which were previously made pursuant to this Chapter 3.44, shall be increased by three percent (3%) per annum in lieu of the increase otherwise provided in this Chapter. The first such three percent (3%) increase shall be made on April 1, 2006. With respect to Tier 2 members, the Retirement Board of the retirement plan pursuant to which the retirement allowances and survivorship allowances under Chapter 3.24 or 3.28 specified in the preceding sections of this Chapter are payable, shall within the first three (3) calendar months of each subject year, beginning with the first three (3) months of the calendar year 2013, determine the percentage of increase or decrease in the cost of living during the index-year next preceding the subject year. Such shall be done by reference to the most current consumer price index for all urban consumers (CPI-U), San José-San Francisco-Oakland metropolitan area, all items (1967 = 100), as published by the United States Department of Labor's Bureau of Labor Statistics, showing the costof-living increase or decrease during the month of December of such index-year over or below the cost of living during the month of December of the calendar year immediately preceding such indexyear. Effective June 16, 2017, each retirement allowance and each survivorship allowance which is payable to a Tier 2

member (or survivor of such Tier 2 member) shall be increased in the following manner:

• a. For Tier 2 members hired on or after the effective date of the implementing ordinance, such allowance shall be increased by the lower of: (i) the percentage of such increase in the CPI-U, or (ii) the applicable percentage determined by the number of years of Federated City Service at retirement as follows: if at the time of retirement the Tier 2 member had at least one (1) but less than eleven (11) years of Federated City Service, one and one-quarter percent (1.25%); if at the time of retirement the Tier 2 member had at least eleven (11) but less than twenty-one (21) years of Federated City Service, one and one-half percent (1.5%); if at the time of retirement the Tier 2 member had at least twenty-one (21) but less than twentysix (26) years of Federated City Service, one and three-quarters percent (1.75%); or, if at the time of retirement the Tier 2 member had at least twenty-six (26) years of Federated City Service, two percent (2%); or

than twenty-one (21) years of Federated City Service, one and one-half percent (1.5%); if at the time of retirement the Tier 2 member had at least twenty-one (21) but less than twentysix (26) years of Federated City Service, one and three-quarters percent (1.75%); or, if at the time of retirement the Tier 2 member had at least twenty-six (26) years of Federated City Service, two percent (2%); or

b. For Tier 2 members employed before the effective date of the implementing ordinance such allowance shall be increased by the lower of: (i) the percentage of such increase in the CPI-U or (ii) the applicable percentage determined by the number of years of Federated City Service at retirement as follows: if at the time of retirement the Tier 2 member had at least one (1) but less than eleven (11) years of Federated City Service, one and one-half percent (1.5%); if at the time of retire-

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ment the Tier 2 member had at least eleven (11) but less than twenty-one (21) years of Federated City Service, one and one-half percent (1.5%); if at the time of retirement the Tier 2 member had at least twenty-one (21) but less than twenty-six (26) years of Federated City Service, one and three-quarters percent (1.75%), or, if at the time of retirement the Tier 2 member had at least twenty-six (26) years of Federated City Service, two percent (2%). A Tier 2 member's first COLA after retirement shall be prorated based on the number of months retired.

2. Each increase (if any for Tier 2 members) shall become effective beginning with the allowance payable for the month of April in each subject year.

3. The accumulation of the excess of costof-living percentages as provided in Section 3.44.040 shall not apply.

• B. In the event the Board's actuary determines that there is an increased cost to implement the change to a flat-rate three percent (3%) cost-of-living adjustment, or to implement the cost-of-living adjustment maximum in subsection 3.44.160.A for Tier 2 members, such increased cost shall be calculated as a percentage of each member's earned compensation and that percentage rate shall be added to the contributions made by members pursuant to Section 3.44.100. The additional percentage rate imposed pursuant to this paragraph shall be the same for all members other than Tier 2 members. For Tier 2 members that amount shall be an amount which is the same for all Tier 2 members and which is intended to produce an equal sharing of the cost of any costof-living adjustment between the City and Tier 2 members.

• C. The provisions of this Chapter 3.44 which are not inconsistent with the provisions of subsec-

tions A. and B. shall continue to apply with respect to the persons described in subsection A.

• D. Notwithstanding any other provisions of the Federated Employees Retirement Plan to the contrary including Section 3.28.710.C and Section 3.28.860.C, in determining any cost-ofliving contributions that may be due under this Chapter 3.44, any excess of assets over the actuarial accrued liability shall not be taken into account in determining such cost-ofliving contributions to the Plan.

• (Ords. 27652, 29120, 29904.)