§ 2-88.11. Compliance with the Internal Revenue Code.

(a)

It is the intention of the city and of the board that the plan remain at all times a qualified plan within the meaning of Section 401(a) of the Internal Revenue Code.

(b)

No member's annual benefit shall exceed the amounts permitted in section 415 of the Internal Revenue Code.

(c)

In no event may a member's retirement benefit be delayed beyond the later of April 1 following the calendar year in which the member attains age seventy and one-half (70½), or April 1 of the year following the calendar year in which the member retires. All distributions from the plan (including the DROP) shall conform to the regulations issued under Section 401(a)(9) of the Internal Revenue Code, including the incidental death benefit provision of Section 401(a)(9)(G) of the Internal Revenue Code. Further, such regulation shall override any plan or DROP provision that is inconsistent with Section 401(a)(9) of the Internal Revenue Code.

When a distribution of the participant's entire interest is not made in a lump sum, the distribution will be made in one (1) or more of the following ways; over the life of the participant; over the life of the participant and designated beneficiary; over a period certain not extending beyond the life expectancy of the participant; or over a period certain not extending beyond the joint life and last survivor expectancy of the participant and a designated beneficiary.

(d)

If the distribution has commenced before the participant's death, the remaining interest will be distributed at least as rapidly as under the method of distribution being used as of the date of the participant's death.

The method of distribution, if the participant dies before distribution is commenced, must satisfy the following requirements:

(1)

Any remaining portion of the participant's interest that is not payable to a beneficiary designated by the participant will be distributed within five (5) years after the participant's death;

(2)

Any portion of the participant's interest that is payable to a beneficiary designated by the participant will be distributed either: (i) within five (5) years after the participant's death; or (ii) over the life of the beneficiary, or over a period certain not extending beyond the life expectancy of the beneficiary, commencing not later than the end of the calendar year following the calendar year in which the participant died (or, if a designated beneficiary is the participant's surviving spouse, commencing not later than the end of the calendar year following the calendar year in which the participant would have attained age seventy and one-half (70½).

(e)

Direct transfers of eligible distributions shall be made as follows:

(1)

General. This subsection 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 subsection, a distributee may elect, at the time and in the manner prescribed by the board, to have any portion of an eligible rollover distribution made directly to an eligible retirement plan specified by the distributee in a direct rollover.

(2)

Definitions.

a.

Eligible rollover distribution. An eligible rollover distribution is any distribution of all or any portion of the balance to the credit of a distributee, except that an eligible rollover distribution does not include: any distribution that is one of a series of a substantially equal 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 (10) years or more; any distribution to the extent such distribution is required under Section 401(a)(9) of the Internal Revenue Code; and the portion of any distribution that is not includable in gross income. Effective for distributions made after December 31, 2001, a distribution shall not fail to be an eligible rollover distribution because the portion consists of after-tax employee contributions which are not includable in gross income. However, such portion may be paid only to an individual retirement account or annuity under section 408(a) or (b) or a defined contribution plan described in section 401(a) or 403(a) that agrees to separately account for amounts so transferred, including separately accounting for amounts so transferred, including separately accounting for the portion of such distribution which is includible in gross income and the portion of such distribution which is not so includible.

b.

Eligible retirement plan. An eligible retirement plan is an individual retirement account described in Section 408(a) of the Internal Revenue Code, an individual retirement annuity described in Section 408(b) of the Internal Revenue Code, an annuity plan described in Section 403(a) of the Internal Revenue Code, or a qualified trust described in Section 401(a) of the Internal Revenue Code that accepts a distributee's eligible rollover distribution. However, in the case of an eligible rollover distribution to a surviving spouse, an eligible retirement plan is an individual retirement account or individual retirement annuity. Effective for distributions made after December 31, 2001, for purposes of the direct rollover provisions in this plan, an eligible retirement plan shall also mean an annuity contract described in section 403(b) of the IRS Code and an eligible plan described in section 457(b) of the IRS Code which is maintained by a state, a political subdivision of a state or any agency or instrumentality of a state or political subdivision of a state and which agrees to separately account for amounts transferred to such plan from this plan. The definition of eligible Retirement plan shall also apply in the case of a surviving spouse.

c.

Distributee. A distributee includes an employee or former employee. In addition, the employee's or former employee's surviving spouse is a distributee with regard to the interest of the spouse. Effective as of January 1, 2008, an employee's or former employee's non-spouse beneficiary is a distributee with regard to the interest of the employee or former employee.

d.

Direct rollover. A direct rollover is a payment by the plan to the eligible Retirement plan specified by the distributee. Effective as of January 1, 2008, a non-spouse beneficiary may make a direct rollover only to an "inherited" individual retirement account as described in Section 408(b) of the Internal Revenue Code. If a non-spouse beneficiary receives a distribution from the plan, the distribution is not eligible for a 60-day (non-direct) rollover.

e.

In addition to other applicable limitations set forth in the plan, and notwithstanding any other provisions of the plan to the contrary, for the plan years beginning on or after January 1, 1996, the annual compensation of each employee taken into account under the plan shall not exceed the Omnibus Budget Reconciliation Act of 1993 (OBRA '93) annual compensation limit. The OBRA '93 annual compensation limit is $150,000, as adjusted by the Commissioner for increases in the cost-of-living in accordance with § 401(a)(17)(B) of the Internal Revenue Code.

Notwithstanding the foregoing, the annual compensation limit under Internal Revenue Code Section 401(a)(17), as amended by OBRA '93, shall not apply to any eligible participant, in any future year, to the extent that the application of the annual compensation limit in Internal Revenue Code Section 401(a)(17), as amended by OBRA '93, would reduce the amount of annual compensation that is allowed to be taken into account under the fund below the amount that was allowed to be taken into account under the fund as in effect on July 1, 1993. As used in this subdivision, "eligible participants" includes all members who participated in the fund prior to July 1, 1996.

f.

Notwithstanding any provision in this plan to the contrary, effective as of December 12, 1994, contributions, benefits and service credit with respect to Qualified Military Service will be provided in accordance with Section 414(u) of the Internal Revenue Code of 1986, as amended, USERRA Chapters 175 and 185, Florida Statutes.

(Ord. No. 02O-09-165, § 1, 12-9-02; Ord. No. 18O-01-102, § 1, 1-29-2018)