§ 62-161. Benefits.

(a)

Benefit payments on benefit commencement date.

(1)

Unless the participant elects a deferred benefit commencement date under subsection (b) of this section or an optional form of payment under subsection (c) of this section, a participant shall receive his account in a single lump sum payment as soon as administratively possible following his benefit commencement date.

(2)

Participants who become disabled while on active duty military service shall be treated as though re-employed as an employee the day before the participant became disabled, and then became disabled from a non-duty disability. Additionally, participants who die while on active duty military service shall be treated as though re-employed as an employee the day before the participant died, and then died a non-duty death while employed.

(b)

Benefit commencement date. Except as otherwise provided in subsection (f) of this section, payment of a participant's account shall not be made prior to the earlier of the participant's separation from employment or the calendar year in which the participant attains age 70½. Upon a participant's separation from employment, payment of a participant's account shall commence as soon as administratively possible following his separation from service. However, the participant may elect, in a time and manner determined by the plan administrator, to defer the date payment of his account commences to any date after the participant's separation from employment and prior to the calendar year the participant attains age 70½. Notwithstanding the foregoing provisions of this subsection (b), a participant's election to defer the commencement of his benefits after a separation from employment shall not defer the distribution of any amount in the participant's loan account in the event of a default of the participant's loan.

(1)

Distributions from qualified Roth accounts. A qualified distribution from a Roth account is one that is made both after the participant attains age 59½ and after the participant has had a designated Roth account in the plan for a period of at least five years. The five-year period begins on January 1 of the year that the first contribution was made to the designated Roth plan. Payments that are not qualified distributions are subject to a ten percent additional tax on early distributions. This provision does not change the benefit commencement dates as set forth in section 62-161(b).

(c)

Payment options. A participant may elect, in a time and manner determined by the plan administrator, to have the value of the participant's account distributed in accordance with one of the following payment options, provided that such option is consistent with the limitations set forth in subsection (d) of this section:

(1)

Equal monthly, quarterly, semiannual or annual payments in an amount chosen by the participant, continuing until his account is exhausted;

(2)

Approximately equal monthly, quarterly, semiannual or annual payments, calculated to continue for a period certain chosen by the participant;

(3)

Annual payments equal to the minimum distributions required under section 401(a)(9) of the code, including the incidental death benefit requirements of section 401(a)(9)(G), over the life expectancy of the participant or over the life expectancies of the participant and his beneficiary;

(4)

Payments equal to payments made by the issuer of a retirement annuity policy acquired by the city;

(5)

A split distribution under which a partial lump sum payment and payments under subsections (c)(1)—(3) of this section, as elected by the participant, commence or are made at the same time; or

(6)

A plan to plan transfer pursuant to subsection (h) of this section.

Any election of a distribution option under subsection (c)(1), (2), (3) or (5) of this section may be made or changed after the participant has commenced receiving distributions from his account under subsection (a) of this section. Notwithstanding anything to the contrary in this division, a participant who, prior to January 1, 2002, made an irrevocable election of the time his benefits are to commence or the form in which his benefits are to be paid may change any such election in a time and manner determined by the plan administrator. In no event will the amount paid to the participant exceed the value of the participant's account.

(d)

Limitation on options. No payment option may be selected by a participant under subsections (c)(1) or (2) of this section unless the amount of any monthly installment is at least $100.00; however, any installment of less than $250.00 monthly will be paid quarterly. No payment option may be selected by a participant under subsection (c) of this section unless it satisfies the requirements of sections 401(a)(9) and 457(d)(2) of the code and the incidental death benefit requirements of section 401(a)(9)(G) of the code.

(e)

Death benefits. If the participant dies before he has begun to receive the benefits provided by subsection (a) of this section, the value of the participant's account shall be payable to the beneficiary commencing not later than December 31 of the year following the year of the participant's death. If the participant dies after he has begun to receive benefits, the remaining payments, if any, under the payment option elected by the participant, shall continue until the service provider receives notice of the participant's death. Upon notification of the participant's death, benefits shall be payable to the participant's beneficiary commencing not later than December 31 of the year following the year of the participant's death. In either event, the beneficiary may elect, in a time and manner determined by the plan administrator, to begin receiving benefits at any earlier date following the participant's death.

(1)

If the beneficiary has not attained age 80 at the time payments commence, he may elect to receive payments in a single lump sum payment or in equal or approximately equal monthly, quarterly, semiannual or annual payments continuing over a period not to exceed five years from the participant's death. The beneficiary also may elect to receive a partial lump sum payment followed by monthly, quarterly, semiannual or annual installments, provided that all payments are made within a period of five years from the participant's death. If the beneficiary is age 80 or over or has not attained age 80 and has not elected a form of payment, the remaining balance in the participant's account will be paid to the beneficiary in a single lump sum.

(2)

If the beneficiary is an eligible payee as defined in subsection (h) of this section, the beneficiary may make a plan to plan transfer as provided under subsection (h) of this section.

(3)

If the beneficiary dies before the payment of death benefits has commenced or been completed, the remaining value of the participant's account shall be paid to the estate of the beneficiary in a lump sum. If the participant's estate is the beneficiary, payment shall be made to the estate in a lump sum.

(4)

Notwithstanding subsections (e)(1)—(3) of this section, if pursuant to the participant's election, the participant has elected to receive payments pursuant to an annuity contract that has been acquired by the plan, then distribution to the beneficiary shall be made in accordance with the terms of that annuity contract.

(5)

Notwithstanding subsections (e)(1)—(4) of this section, no payment option may be selected by the beneficiary, or distribution otherwise made, under this subsection (e) unless it satisfies the requirements of section 401(a)(9) of the code.

(f)

Unforeseeable emergencies. If an unforeseeable emergency occurs, a participant may apply to the plan administrator to receive that part of the value of his account that is reasonably needed to satisfy the emergency need based on supporting documentation. If such an application is approved by the plan administrator, the participant shall be paid only such amount as the plan administrator deems necessary to meet the emergency need, but payment shall not be made to the extent that the financial hardship may be relieved through cessation of deferral under the plan, insurance or other reimbursement, or liquidation of other assets to the extent such liquidation would not itself cause severe financial hardship. An unforeseeable emergency shall be deemed to involve only circumstances of severe financial hardship to the participant resulting from a sudden unexpected illness, accident, or disability of the participant, the participant's spouse or a dependent (as defined in section 152(a) of the code) of the participant, loss of the participant's property due to casualty or other similar and extraordinary unforeseeable circumstances arising as a result of events beyond the control of the participant. The need to send a participant's child to college or to purchase a new home shall not be considered unforeseeable emergencies. The determination as to whether such an unforeseeable emergency exists shall be based on the merits of each individual case.

(g)

Small benefits. Notwithstanding any provision of this division plan to the contrary, if the value of a participant's accounts is $1,000.00 or less upon his separation from employment, the value of the participant's accounts shall be paid to him in a single lump sum as soon as administratively practicable following the participant's separation from employment.

(h)

Direct rollover of certain distributions. Notwithstanding any provision of this division to the contrary that would otherwise limit an eligible payee's election under this subsection (h), an eligible payee may elect, at the time and in the manner prescribed by the plan administrator, to have any portion of an eligible rollover distribution paid directly to an eligible retirement plan specified by the eligible payee in a direct rollover. The following definitions apply to the terms used in this subsection (h):

(1)

Eligible rollover distribution means any distribution of all or any portion of the balance to the credit of the eligible payee, except that an eligible rollover distribution does not include any distribution that is one of a series of substantially equal periodic payments, not less frequently than annually, made for the life, or life expectancy, of the eligible payee or the joint lives, or joint life expectancies, of the eligible payee and the eligible payee's designated beneficiary, or for a specified period of ten years or more and any distribution to the extent such distribution is required under section 401(a)(9) of the code.

(2)

Eligible retirement plan means a plan described in subsection (i) of this section that accepts the eligible payee's eligible rollover distribution.

(3)

Eligible payee means an employee or former employee. In addition, the employee's or former employee's surviving spouse and the employee's or former employee's spouse or former spouse who is the alternate payee under a qualified domestic relations order as defined in section 414(p) of the code are eligible payees with regard to the interest of the spouse or former spouse.

(4)

Direct rollover means a payment by the plan to the eligible retirement plan specified by the eligible payee.

(i)

Trustee-to-trustee transfers to purchase permissive service credit. All or a portion of a participant's account may be transferred directly to the trustee of any qualified defined benefit plan maintained by the city if such transfer is:

(1)

For the purchase of permissive service credit (as defined in section 415(n)(3)(A) of the code) under such plan, or

(2)

A repayment to which section 415 of the code does not apply by reason of subsection (k)(3) of such code, within the meaning of section 457(e)(17) of the code.

(j)

Should the participant be subject to an involuntary mandatory distribution of a non-forfeitable account balance that is under $5,001.00 but is more than $1,000.00, then the assets shall be rolled over to an individual retirement plan of a designated trustee or issuer. If the present value of a vested benefit exceeds $5,000.00, then the benefit may only be paid out with the participant's consent.

(Ord. No. 4319-11, § 1, 2-22-2011; Ord. No. 4544-15, § 4, 4-27-2015)