San Jose Municipal Code Part 9.5 Optional Settlements

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 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.)

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.

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 seventy-five 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 the event a member elects an optional settlement and the member's spouse or domestic partner predeceases the member prior to the 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. 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.

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.

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.)

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

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:

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 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 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.)