§ 2.52.092. [Public Employees' Pension Reform Act.]

A.

Application and Interpretation. Effective January 1, 2013, this Section 2.52.092 of Chapter 2.52 takes precedence over any conflicting provision of Chapter 2.52. To the extent unchanged by this section, the remaining provisions of the Plan remain in full force and effect. This Section 2.52.092 will be interpreted and administered in accordance with the applicable provisions of PEPRA, as amended from time to time.

B.

Provisions Applicable to All Participants. This Section 2.52.092 applies to every Participant, regardless of when his or her participation in the Plan begins.

1.

No Retroactive Benefit Enhancements . Any enhancement to a Participant's retirement benefit under the Plan that is adopted on or after January 1, 2013, will apply only to service performed on or after the operative date (as defined in Section 7522.44 of the Government Code) of the enhancement, and will not be applied to any service performed before that date. This preceding sentence will not apply to any increase to a Participant's annual cost-of-living adjustment under the Plan within existing statutory limits.

2.

Purchases of Nonqualified Service Credit Prohibited. The purchase of nonqualified service credit, as defined by Section 415(n)(3)(C) of the Internal Revenue Code, is not permitted.

3.

Reinstatement of Retired Participants. Except as provided under Subsection 2.52.092.B if a Participant who is receiving a retirement benefit under the Plan is employed by, or provides services to, the employer, then the Participant will be subject to reinstatement. For this purpose, "reinstatement" means that the Participant's benefit payments under the Plan will cease, and the Participant will resume participation in the Plan in accordance with Chapter 2.04.

4.

Exception to Reinstatement. A retired Participant will not be subject to reinstatement under Subsection 2.52.092.B.3 if the following conditions are satisfied:

a.

The Employer's appointing authority appoints the Participant either during an emergency to prevent stoppage of public business or because he or she has skills needed to perform work of a limited duration.

b.

The appointment does not exceed a total of nine hundred sixty hours or other equivalent limit in a plan year.

c.

The rate of pay for the appointment is neither less than the minimum nor more than the maximum paid by the Employer to other employees performing comparable duties, divided by 173.333 to equal an hourly rate.

d.

The Participant does not earn any benefit under the Plan during the appointment.

e.

Upon accepting the appointment, the Participant certifies in writing that he or she did not, during the twelve months preceding the appointment, receive any unemployment-insurance compensation arising the Participant's prior employment with the Employer. If the Participant accepts the appointment after receiving that type of compensation, the Employer must terminate the Participant's employment or service on the last day of the current pay period; and, this Subsection 2.52.092.B.4 will not apply to the Participant for twelve months after the termination date.

f.

The appointment may not begin within the one hundred eighty-day period after the Participant's retirement under the Plan, unless one of the following exceptions applies: (i) the Employer certifies the nature of the employment or service and that the appointment is necessary to fill a critically needed position before one hundred eighty days has passed, and the City Council of the City of Delano approves the appointment at a public meeting (the appointment may not be placed on a consent calendar), or (ii) the Participant is a public safety officer or firefighter. Neither exception, however, will apply if the Participant accepted a retirement incentive upon retirement.

C.

Provisions Applicable to Post-2012 Participants. This Subsection 2.52.092.C applies only to persons who become Participants on or after January 1, 2013.

1.

Definition of Compensation. "Compensation" means the normal monthly rate of pay or base pay of the Participant paid by the Employer in cash to similarly situated employees of the same group or class of employment for services rendered on a full-time basis during normal working hours, pursuant to publicly available pay schedules. Deferred amounts will be included in "compensation" when earned rather than when paid. The following amounts are excluded from compensation:

a.

Any amount that the Committee determines has been paid to increase the Participant's retirement benefits under the Plan.

b.

Any amount that (i) is paid in-kind to the Participant, or was paid directly to a third-party (other than the Plan) for the Participant's benefit, and (ii) is subsequently converted to and received by the employee in cash.

c.

Any one-time or ad hoc payments to the Participant.

d.

Severance or any other payment that is granted or awarded to the Participant in connection with, or in anticipation of, a separation from employment, but is received by the Participant while employed.

e.

Any payments for unused vacation, annual leave, personal leave, sick leave, or compensatory time off, however denominated.

f.

Any payments for additional services rendered outside of normal working hours.

g.

Any Employer-provided allowance, reimbursement, or payment, including, but not limited to, one made for housing, vehicle, or uniforms.

h.

Compensation for overtime work, other than as defined in Section 207(k) of Title 29 of the United States Code.

i.

Employer contributions to deferred compensation or defined contribution plans.

j.

Any bonus paid in addition to the amounts described in Subsection 2.52.092.C.

k.

Any other form of compensation that the Committee determines is inconsistent with the requirements of Subsection 2.52.092.C.1.

l.

Any other form of compensation that the Committee determines should not be included in compensation.

m.

For each calendar year, any amount in excess of the following applicable percentage of the contribution and benefit base specified in section 430(b) of Title 42 of the United States Code on January 1, 2013: (i) one hundred percent, for a Participant whose service is included under the old age, survivors, disability and health insurance provisions of the federal Social Security Act; or (ii) one hundred twenty percent, for a Participant whose service is not included under the old age, survivors, disability and health insurance provisions of the federal Social Security Act. The Committee will adjust the annual Compensation limit described in this paragraph after each actuarial valuation of the Plan based on changes to the Consumer Price Index for All Urban Consumers. The adjustment shall be effective annually on the January 1 following the annual valuation.

2.

Participant Contributions.

a.

Each Participant must contribute at least fifty percent of the normal cost of the Plan. The initial contribution rate will equal at least the greater of (i) fifty percent of the normal cost rate of the Plan, rounded to the nearest quarter of one percent, or (ii) the current contribution rate of similarly situated employees. The Employer may not pay any portion of this contribution for any Participant.

b.

Once established, the Participant contribution rate will be adjusted to reflect a change in the normal cost rate, but only if the normal cost rate increases by more than one percent of payroll above or below the normal cost rate in effect on the later of: (i) the date the Participant contribution rate is first established, or (ii) the date of the last adjustment to the Participant contribution rate under this paragraph. For purposes of this paragraph, the term "normal cost rate" means the annual actuarially determined normal cost for the Plan expressed as a percentage of payroll.

c.

The Participant contribution rate may be more than fifty percent of the normal cost rate, but only if the requirements of Section 7522.30(e) of the Government Code are satisfied.

d.

To the extent the preceding provisions of this Subsection 2.52.092(C) would impair the terms of any contract or memorandum of understanding (MOU) in effect on January 1, 2013, between the Employer and its employees, those provisions will not apply to the employees covered by that contract or MOU until the earlier of (i) the contract's or MOU's expiration, or (ii) the renewal, amendment, or other extension of the contract or MOU.

3.

Service Retirement Benefit.

a.

Each Participant who has (i) completed at least five years of service, (ii) reached age fifty-two (i.e., "Early Retirement Age" for persons who become Participants on or after January 1, 2013), and (iii) filed a written application with the Committee stating when he or she desires to retire, may retire for service and receive a "service retirement benefit."

b.

The service retirement benefit payable to a Participant upon retirement will equal the percentage of the Participant's Final Average Compensation, as determined in accordance with the following schedule based on the Participant's age at retirement, taken to the preceding quarter year, multiplied by the Participant's Years of Service.

Age at Retirement	Percentage
52	1.000%
52¼	1.025%
52½	1.050%
52¾	1.075%
53	1.100%
53¼	1.125%
53½	1.150%
53¾	1.175%
54	1.200%
54¼	1.225%
54½	1.250%
54¾	1.275%
55	1.300%
55¼	1.325%
55½	1.350%
55¾	1.375%
56	1.400%
56¼	1.425%
56½	1.450%
56¾	1.475%
57	1.500%
57¼	1.525%
57½	1.550%
57¾	1.575%
58	1.600%
58¼	1.625%
58½	1.650%
58¾	1.675%
59	1.700%
59¼	1.725%
59½	1.750%
59¾	1.775%
60	1.800%
60¼	1.825%
60½	1.850%
60¾	1.875%
61	1.900%
61¼	1.925%
61½	1.950%
61¾	1.975%
62	2.000%
62¼	2.025%
62½	2.050%
62¾	2.075%
63	2.100%
63¼	2.125%
63½	2.150%
63¾	2.175%
64	2.200%
64¼	2.225%
64½	2.250%
64¾	2.275%
65	2.300%
65¼	2.325%
65½	2.350%
65¾	2.375%
66	2.400%
66¼	2.425%
66½	2.450%
66¾	2.475%
67	2.500%

 

D.

Funding.

1.

In any plan year, the Employer's contribution to the Plan, in combination with Participant contributions to the Plan, may not be less than the normal cost rate, as defined in Subsection 2.52.092.C.2.b.

2.

The Committee may suspend contributions only when all of the following occur:

a.

The Plan is funded by more than one hundred twenty percent, based on the computation by the Plan's actuary in accordance with the Governmental Accounting Standards Board requirements that is included in the annual valuation.

b.

The Plan's actuary determines, based on the annual valuation, that continuing to accrue excess earnings could result in disqualification of the Plan's tax-exempt status under the Internal Revenue Code.

c.

The Committee determines that the receipt of any additional contributions required by this subsection would conflict with its fiduciary responsibility set forth in Section 17 of Article XVI of the California Constitution.

E.

Felony Convictions. If a Participant who is subject to Sections 7522.70, 7522.72 or 7522.74 of the California Government Code is convicted of a felony described in the applicable section or sections, he or she shall forfeit his or her accrued rights and benefits, and will not accrue further benefits, in the Plan to the extent provided in the applicable section or sections. This paragraph will be interpreted and administered in accordance with the requirements of Sections 7522.70, 7522.72 and 7522.74 of the California Government Code, including, but not limited to, any applicable rules governing return of Participant contributions, notice, and reversal of conviction, which requirements are herein incorporated by this reference.

(Ord. No. 2012-1249, § 1, 11-19-2012; Ord. No. 2012-1250, § 1, 12-3-2012)