(a) Direct transfers of eligible rollover distributions.
(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 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.
a. Eligible rollover distribution. Any distribution of all or any portion of the balance to the credit of the distributee, except that an eligible rollover 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 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 Internal Revenue Code; and the portion of any distribution that is not includable in gross income.
b. Eligible retirement plan. 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 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.
c. Direct rollover. A payment by the plan to the eligible retirement plan specified by the distributee.
d. Distributee. Includes 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 entitled to payment for alimony and child support under an income deduction order, are distributees with regard to the interest of the spouse or former spouse.
(b) Rollovers from qualified plans.
(1) A member may roll over all or a part of his or her interest in another qualified plan to the fund, provided all of the following requirements are met:
a. Some or all of the amount distributed from the other plan is rolled over to this plan no later than the sixtieth day after distribution was made from the plan or, if distributions are made in installments, no later than the sixtieth day after the last distribution was made.
b. The amount rolled over to this fund does not include any amount contributed by the member to the plan on a post-tax basis. Effective October 1, 2002, a member may rollover amounts contributed on a post-tax basis.
c. The rollover is made in cash.
d. The member certifies that the distribution is eligible for a rollover.
e. Any amount which the trustees accept as a rollover to this fund shall, along with any earnings allocated to them, be fully vested at all times.
(2) A rollover may also be made to this plan from an individual retirement account qualified under section408 of the Internal Revenue Code when the individual retirement account was merely used as a conduit for funds from another qualified plan and the rollover is made in accordance with the rules provided in paragraphs a. through e. Amounts rolled over may be segregated from other fund assets. The trustees shall separately account for gains, losses, and administrative expenses of these rollovers. In addition, the fund may accept the direct transfer of a member’s benefits from another qualified retirement plan or to a deferred compensation plan pursuant to section 457 of the Internal Revenue Code. The fund shall account for direct transfers in the same manner as a rollover and shall obtain certification from the member that the amounts are eligible for a rollover or direct transfer to this fund.
(c) Transfer of accumulated leave.
(1) Members eligible to receive accumulated sick leave, accumulated vacation leave or any other accumulated leave payable upon retirement, including entry into the DROP, shall have the leave transferred to the plan.
For purposes of this section, the term “separation” shall mean termination of service as a police officer with the city. Members on whose behalf leave has been transferred may elect one of the following distribution options within 30 days of separation. Members failing to elect a distribution option within 30 days of separation will be deemed to have elected option (a) below:
a. Receive a lump sum equal to the transferred leave balance; or
b. Transfer the entire amount of the transferred leave balance directly to any eligible retirement plan; or
c. Purchase additional service credit as may be permitted by the Code. If the leave balance exceeds the cost of the service credit purchased, the balance shall be paid to the member in a lump sum; or
d. Transfer the entire amount of the transferred leave balance into the member’s DROP account; or
e. Maintain the entire leave balance within the plan. Earnings shall be paid as follows:
1. Gains or losses at the same interest rate earned by the Pension Plan; or
2. A guaranteed rate of 7%; or
3. A percentage of the leave balance account will be credited with interest gains or losses at the same rate earned by the pension plan and the remaining percentage will be credited with earnings at a guaranteed rate of 7%. The actual percentage shall be selected by the member on a form provided by the Board of Trustees. The total of the two percentages must equal 100%.
These accounts will be assessed an administrative fee that is based upon the ratio that the employee's DROP account bears to the fund as a whole.
(2) If a member on whose behalf the city makes a transferred leave balance to the plan dies after retirement or other separation, but before making an election, as provided, or after making an election but before any distribution is made, the election option shall be void. In such an event, any person who would have received a death benefit had the member died in service immediately prior to the date of retirement or other separation, shall be entitled to receive an amount equal to the transferred leave balance in a lump sum. In the case of a surviving spouse or former spouse, an election may be made to transfer the leave balance to an eligible retirement plan in lieu of the lump sum payment. Failure to make such an election by the surviving spouse or former spouse within 60 days of the member’s death will be deemed an election to receive a lump sum payment.
(3) The Board, by rule, shall have the authority to enact administrative rules for purposes of administering the provisions of this section, consistent with the federal tax laws in effect on the date of transfer. No such rule shall conflict with the provisions of this section.
(4) The value of the leave transferred shall be determined in accordance with applicable city personnel policies or collective bargaining agreements.
(Ord. No. 10-005, § 2, 2-2-10)
