HomeMy WebLinkAbout2002-6-6537313
ORDINANCE 2002-6-6537
AN ORDINANCE PROVIDING FOR AN
ADDENDUM TO PENSION FUND FOR
EMPLOYEES UNDER KRS 90.400
WHEREAS, it has been recommended that the City of Paducah adopt an
addendum to this plan so as to conform the plan with the various requirements
required of a qualified plan under Internal Revenue Code Section 401(a); and
WHEREAS, having the plan comply and conform with this code
requirement is crucial to permitting the plan to extend tax benefits of a qualified
plan to the members and beneficiaries that are receiving benefits from the plan.
NOW, THEREFORE, the City of Paducah, Kentucky, hereby adds the
following terms to be known as Addendum I to the Pension Fund under KRS
90.400, and that such terms apply to and be deemed a part of such Fund:
Section 1 --Intention. It is the intention of the City that the Plan will comply
with all of the requirements of Internal Revenue Code Section 401(a) that are
applicable to plans that are sponsored by state or local governments or political
- subdivisions. Furthermore, it is the intention of The City that this plan be
maintained and operated in the form of a tax -qualified plan and that the retirees
and beneficiaries receiving benefits from this plan enjoy the tax -benefits of the plans
qualified status
Section 2—Definitions. The terms below shall maintain the following
definitions for the purposes of this Addendum I.
(a) "City" means the City of Paducah, Kentucky.
(b) "Code" means the Internal Revenue Code of 1986, and the rulings
and regulations promulgated thereunder, all as amended and in effect
from time to time.
(c) "Plan" means the Pension Fund Plan under KRS 90.400 and as
amended by this Addendum I.
(d) "Trust" means the separate fund established by KRS 90.400. This
language is intended to establish a Trust under Kentucky State law
and satisfies Code section 401(a).
(a) The Plan is subject to the limitations on benefits and contributions
imposed by Code Section 415 as amended from time to time. Code
section 415 is hereby incorporated into this Plan by this reference.
The limitation year shall be the Plan Year.
(b) To the extent that a member participates in multiple plans, benefits
under this Plan shall be restricted to the extent necessary to comply
with the requirements of Code Section 415(e) prior to the restriction
of contribution or benefits under any other plan. This Section 1.02
shall cease to apply effective January 1, 2000.
Section 4 — Limit on Compensation. For purposes of computing any benefit
under the Plan or any contribution made to the Plan, there shall be a limit on the
amount of compensation that may be considered in any plan year for any member.
This limit on compensation shall be based upon the dollar limitation provided for
under Code section 401(a)(17) as in effect at the time the compensation is earned.
Section 5 — Forfeitures. Pursuant to Code section 401(a)(8) forfeitures under
the Plan may not be applied to increase the benefits of any member or beneficiary
that would otherwise receive a benefit under terms of this Plan.
Section 6 — Minimum Distributions. Effective July 1, 1989, notwithstanding
any provisions of the plan to the contrary, the following provisions shall apply.
(a) A member shall begin to receive his plan benefits no later than April l
of the calendar year following the later of (i) the year in which he
attains age 70-%2; or (ii) the year in which he retires. However, in no
case shall the member's benefit commence later than the date
required by section 401(a)(9) of the Code, and in no case shall the..
distribution violate the minimum distribution incidental death benefit
requirements of the regulations under section 401(a)(9) of the Code.
(b) Upon the death of a member after distribution of his benefit has
commenced, the remaining portion of his interest in the plan will be
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distributed at least as rapidly as under the method of distribution in
effect prior to the member's death.
(c) Upon the death of a member before distribution of his benefit has
commenced, the member's entire interest will be distributed no later
than 5 years after the member's death, except to the extent that an
election, otherwise permitted by the plan, is made in accordance with
(1) or (2) below.
(1) If any portion of the member's interest is payable to a
designated beneficiary, the distributions may be made in
substantially equal installments over the life or life expectancy
of the designated beneficiary commencing no later than one
year after the member's death.
(2) If the designated beneficiary is the member's surviving spouse,
the date distributions are required to commence in accordance
with (1) above shall not be earlier than the date on which the
member would have attained age 70-%Z, and if the spouse dies
before payments begin, subsequent distributions shall be made
as if the spouse had been the member.
Section 7 -- Right to Direct Rollover.
(a) This section applies to distributions made on or after January 1, 1993.
Notwithstanding any provision of the plan to the contrary that would
otherwise limit a distributee's election under this section, a distributee
may elect, at the time and in the manner prescribed by the board of
trustees, to have any portion of an eligible rollover distribution paid
directly to an eligible retirement plan specified by the distributee in a
direct rollover.
(b) Definitions
(1) Eligible rollover distribution: Shall be any distribution of all
or any portion of the balance to the credit of the distributee,
except that an eligible rollover distribution does not include:
any distribution that is one of a series of substantially equal
316
periodic payments (not less frequently than annually) made for
the life (or life expectancy) of the distributee or the joint lives
(or joint life expectancies) of the distributee and the
distributee's designated beneficiary, or for a specified period of
ten years or more; any distribution to the extent such
distribution is required under section 401(a)(9) of the Code;
and the portion of any distribution that is not includible in
gross income.
(2) Eligible retirement plan: Shall mean an individual retirement
account described in section 408(a) of the Code, an individual
retirement annuity described in section 408(b) of the Code, an
annuity plan described in section 403(a) of the Code, or a
qualified trust described in section 401(a) of the Code, that
accepts the distributee's eligible rollover distribution.
However, in the case of an eligible rollover distribution to the
surviving spouse, an eligible retirement plan is an individual'
retirement account or individual retirement annuity.
(3) Distributee: Shall mean a member or former member, or the
spouse or former spouse (who is the alternate payee under a
qualified domestic relations order, as defined in section 414(p)
of the Code) of the member of former member, provided such
person is entitled to receive a benefit under the plan.
(4) Direct rollover: Shall mean a payment by the plan to the
eligible retirement plan specified by the distributee.
Section 8 - Oualified Military Service.
(a) A member whose service under the plan is interrupted by qualified
military service shall accrue benefits, as described in subsection (b)
below. For purposes of this section, qualified military service means
any service in the uniformed services (as defined in chapter 43 of title
38, United States Code) by an individual if such individual is entitled
to reemployment rights under such chapter with respect to such
317
service, and if the individual is actually reemployed under such
chapter.
(b) Upon reemployment following qualified military service, the member
shall be credited with months or years of employment, and years of
participation, (collectively referred to as "service") for purposes of
computing benefits and eligibility for benefits The member's service
shall include all periods for which he was credited on the last day
before such qualified military service, subject to the repayment
requirement below. In addition, the member's service shall include
the period of qualified military service. If the member has been paid
any benefit with respect to service before the qualified military leave,
then his service following reemployment shall not include any such
service unless the member repays such benefit (without interest) to the
plan within the period beginning with the date of reemployment and
continuing for the lesser of (1) rive years; or (2) an amount of time
which is the period of qualified military service multiplied by three.
Section 9 - Definitely Determinable Benefits. In compliance with Code
section 4O1(a)(25) the Board shall adopt a table of factors or specify all actuarial
assumptions that are to be used to compute benefits to be paid by the Plan to a
member or a beneficiary.
Section 10. This ordinance shall be read on two separate days and will
become effective upon summary publicath
ATTEST:
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Tammara S. Brock, Asst. City Clerk
Introduced by the Board of Commissioners June 18, 2002
Adopted by the Board of Commissioners June 25, 2002
Recorded by Tammara S. Brock, Asst. City Clerk, June 25, 2002
Published by The Paducah Sun July 3, 2002
ORD\31524
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