Chapter 3.05
Spokane Employees’ Retirement System

Sections:

3.05.010 Purpose.

3.05.020 Definitions.

3.05.030 Membership.

3.05.040 Contributions.

3.05.050 Allowance for Service.

3.05.060 Administration.

3.05.070 Employees’ Retirement Fund.

3.05.080 City’s Contribution.

3.05.090 Released Matching Funds.

3.05.110 Administration of Social Security Act.

3.05.120 Refund of Contributions.

3.05.130 Service Retirement.

3.05.140 Local 270, AFSCME Employees’ Retirement.

3.05.150 Other Employees’ Retirement.

3.05.160 Allowance on Service Retirement.

3.05.170 Payment upon Death of Member.

3.05.180 Disability Retirement.

3.05.190 Allowance on Disability Retirement.

3.05.200 Safeguards of Disability Retirement.

3.05.210 Optional Allowance on Retirement.

3.05.230 Monthly Installment Payments.

3.05.240 Pension Not Subject to Execution.

3.05.250 Estimate Permitted.

3.05.260 Suspension of Allowance During Employment.

3.05.270 Preliminary Cost.

3.05.275 Portability of Benefits.

3.05.280 Severability.

3.05.290 Compliance with Internal Revenue Code.

3.05.010 Purpose.

The purpose of this chapter and SMC chapter 4.14 is to establish a retirement and pension system for superannuated or totally and permanently disabled officers and employees of the City as authorized by state law.

[Ord. C7540 § 1]

3.05.020 Definitions.

A.  “Accumulated additional contributions” means the sum of all the additional contributions, deducted from the compensation of a member, standing to the credit of the member’s individual account, together with interest at the actuarial assumption rate as established pursuant to SMC 4.14.070(D)(1) compounded quarterly.

B.  “Accumulated contributions” means accumulated normal contributions plus accumulated additional contributions.

C.  “Accumulated normal contribution” means the sum of all normal contributions deducted from the compensation of a member, and in-lieu payments of employees’ contributions by the City, standing to the credit of the member’s individual account, together with interest at the actuarial assumption rate as established pursuant to SMC 4.14.070(D)(1) compounded quarterly.

D.  “Additional contributions” means the contributions provided for in SMC 3.05.040(D).

E.  “Annuity” means payments derived from contributions made by a member as provided in SMC 3.05.190.

F.  “Beneficiary” means any person in receipt of a pension, annuity, retirement allowance, disability allowance, or any other benefit provided in this chapter and SMC chapter 4.14.

G.  “Board” means “board of administration” as provided in SMC chapter 4.14.

H.  “City” means the City of Spokane.

I.  “City service” means service rendered to the City for compensation and, for the purpose of this chapter and SMC chapter 4.14, a member shall be considered as being in City service only while the member is receiving compensation for such service.

J.  “Compensation” means the compensation including base pay, shift differential, overtime, holiday pay, hazardous duty pay and out-of-classification pay, payable in cash, plus the monetary value, as determined by the board of administration, of any allowance in lieu thereof. It shall not be reduced by salary reduction contributions to the City’s cafeteria plan or Section 457 plan, or effective January 1, 2001, any qualified transportation fringe benefit plan under Internal Revenue Code section 132(f)(4). Compensation in excess of the limitations set forth in Internal Revenue Code section 401(a)(17) shall not be included in determining benefits, but this restriction does not apply to any individual who was a member prior to January 1, 1996.

K.  “Compensation earnable by a member” means the average compensation as determined by the board of administration upon the basis of the average period of employment of members in the same group or class of employment and at the same rate of pay.

L.  “Continuous service” means uninterrupted employment by the City, except that discontinuance of City service of a member caused by layoff, disability retirement, leave of absence, suspension, or dismissal, followed by re-entrance into City service within one year, does not count as a break in the continuity of service; provided, that for the purpose of establishing membership in the retirement system, “continuous service” means six months’ service in any one year.

M.  “Creditable service” means such service as is evidenced by the record of normal contributions received from the employee plus prior service if credit for same is still intact or not lost through withdrawal of accumulated normal contributions as provided in SMC 3.05.120. The maximum creditable service from all sources including military service is thirty years.

N.  “Employee” means any regularly appointed officer or regularly appointed employee of the City or of the Spokane public library.

O.  “Final compensation” means the annual average of the greatest compensation earnable by a member during any consecutive two-year period of service for which service credit is allowed. It shall not be reduced by salary reduction contributions to the City’s cafeteria plan or Section 457 plan, or effective January 1, 2001, any qualified transportation fringe benefit plan under Internal Revenue Code section 132(f)(4). Compensation in excess of the limitations set forth in Internal Revenue Code section 401(a)(17) shall not be included in determining benefits, but this restriction does not apply to any individual who was a member prior to January 1, 1996.

P.  “Fiscal year” means any year commencing with January 1st and ending with December 31st next following.

Q.  “Member” means any person included in the membership of the retirement system as provided in SMC 3.05.030.

R.  “Normal contributions” means the contributions at the rate provided for in SMC 3.05.040(A) and (B).

S.  “Pension” means payments derived from contributions made by the City as provided for in SMC 3.05.190.

T.  “Prior service” means the service of a member for compensation rendered to the City prior to July 1, 1942, and also includes military or naval service of a member to the extent specified in SMC 3.05.050.

U.  “Regular interest,” unless changed by the board of administration as provided in SMC 4.14.070, means such rate of interest which compounded annually shall place the retirement fund on a sound actuarial basis.

V.  “Retirement allowance” means any payments made to a member or successor upon retirement for service or disability.

W.  “Retirement fund” means “employees’ retirement fund” as created and established in SMC 3.05.070 and 7.08.601.

X.  “Retirement system” means “Spokane employees’ retirement system,” provided for in this chapter.

[Ord. C33229 § 1; Passed: 5/12/2003]

3.05.030 Membership.

A.  Any new employee must become a member of the retirement system and make contributions required by SMC 3.05.040 on the date of hire, except:

1.   temporary, seasonal or new hire provisionals, as defined by the City Charter and the city civil service commission;

2.   members of the police and fire departments who are entitled to benefits under state-enacted retirement programs;

3.   participating employees hired under the Comprehensive Employment and Training Act (CETA) and United States Department of Labor. This proscription does not apply to permanent nonparticipant staff members of the city and Spokane city-county employment and training consortium or its successor. Furthermore, CETA participants whose membership was previously terminated and who received a refund of contributions may at such time as they become regular city employees redeposit refunded contributions in accordance with SMC 3.05.120;

4.   other non-City-funded employees in temporary employment programs as determined by the board.

B.  Any employee previously denied membership and service credit because of any prior ordinance excluding membership, which was amended, superseded or repealed as to the exclusion, is entitled, at the employee’s option, to join the system and recover service credit from the time of first employment by the city. Such employee must deposit an amount equal to that which would have been paid in had the employee been allowed membership six months after first being employed, with appropriate interest as determined by the board. This provision includes the corporate officers of the city named above. The city matches said funds and deposits the same in the retirement fund in a manner similar to that provided for the matching of the normal contributions under the provisions of this chapter.

C.  Any other elective officer may, at any time prior to the completion of five years of continuous service, elect to deposit with the system an amount equal to what would be or would have been the officer’s normal contributions if a member of the system during this period of service, with appropriate interest as determined by the board. The city matches said funds and deposits the same in the retirement fund in a manner similar to that provided for the matching of the normal contributions under the provisions of this chapter; provided, that no such officer shall obtain any benefits of the provisions of the system except interest accruing at the rate provided for interest on employees’ normal contributions. The return of any such funds so deposited shall be governed by the provisions as to the return of normal contributions. If and when any such officer becomes a member of the system, the sums so deposited by this member shall be transferred to the credit of such member. Any elective officer entering the retirement system under this provision shall become a member as of the date of such election and shall not be considered a member until the date of such election.

D.  The head of each office or department of the city has the duty to give immediate notice in writing to the board of administration of the change in status of any member within the office or department resulting from transfer, promotion, leave of absence, resignation, reinstatement, dismissal or death. The head of each office or department shall furnish other information concerning any member as the board may require.

E.  Each member is subject to all the provisions of this chapter and to all the rules and regulations adopted by the board of administration. Should the city service of any member, in any period of ten consecutive years, amount to less than five years, or should a member withdraw accumulated contributions, die or be retired, that member shall thereupon cease to be a member.

F.  An employee having elected to forego membership under former subsection (A) of this section providing an exemption for nonclassified employees may thereafter acquire membership in, and become entitled to the benefits of, the retirement system as provided in SMC 3.05.031. An employee who opted out of the system must upon becoming employed in a position which is not exempt become a member without credit for prior service.

G.  Notwithstanding any provision of this chapter to the contrary, members who are laid off by the city and immediately rehired by the public facilities district during the period when the city is transferring physical assets to the PFD, may retain membership in the plan on such terms and conditions as may be established by the retirement board in consultation with the PFD. In no event may any other current or future PFD employee become a member of the city employees’ retirement system.

[Ord. C33300; Passed: 9/2/2003]

3.05.040 Contributions.

A.  The normal rates of contributions of members are those adopted by the board of administration, subject to the approval of the city council. The rates so adopted remain in full force and effect until revised or changed by the board of administration in the manner provided in SMC chapter 4.14.

1.   Contributions by Members. Each member of the retirement plan shall contribute six and seventy-two one-hundredths percent of the member’s compensation. It is contemplated that said contribution by members will, when added to the City’s contribution, be enough to properly fund the retirement benefits. It is the intent of this section that the City government, as the employer, shall make contributions to the plan in lieu of the employees’ contributions. The employee will not have an option of choosing to receive the contributed amounts directly instead of having them paid by the City government to the plan. The employee contributions as employer-paid will be included as Social Security wages up to the Social Security wage base, and will also be included as gross wages by the retirement system in calculating annual compensation for retirement.

2.   Contribution by the City Government. The City government will match the in-lieu payment of the employees’ contribution.

B.  Subject to the provisions of this chapter and SMC chapter 4.14, the board of administration certifies to the head of each office or department the normal rate of contribution for each member provided for in subsection (A) of this section. The head of the department applies such rate of contribution to the compensation of each and every payroll; and each of said in-lieu amounts are paid by the director of accounting into the retirement fund, hereinafter provided for, and are credited by the board, together with regular interest, to an individual account of the member for whom the contribution was made. Regular interest is credited to each individual account at such periods as the board may determine. The City government’s in-lieu payment vests for the benefit of the employee immediately upon payment into the fund.

1.   All employees entering the employees’ retirement system after December 11, 1967, are required to enter such retirement system under the terms in force at the time of such entrance. Any employee having previously notified the director of accounting of an election not to come under this chapter as aforesaid* may, by written notice at a later date, withdraw such election and thereafter make increased contributions under this chapter.

C.  The director of accounting transfers to the retirement fund an amount equal to the aggregate normal contributions following each payroll period.

D.  Any member may elect to contribute the member’s own funds for the purpose of providing additional benefits, but the exercise of this privilege by a member does not place on the City any additional financial obligation. The board of administration, upon application, furnishes to such member information concerning the nature and amount of additional benefits to be provided by such contribution.

[Ord. C30416; Passed: 4/20/1992]

* A portion of SMC 3.05.040(C)(2), dealing with an election available to members during a particular period of time, has been deleted because it is no longer applicable. The deleted language, at the beginning of subsection (C)(2), read:

         Any member of the Spokane employee’s retirement system whose salary is in excess of five hundred dollars per month on December 11, 1967, shall have the right, on or before January 10, 1968, to notify the city auditor in writing of such employee’s election not to come under or partake of the increased pension rights and increased contributions required therefor, as provided in Ordinance No. C19417, passed December 11, 1967, and by such election such employee’s pension rights and rate of contribution shall thereby be frozen at the rates and amounts existing prior to such amendment.

3.05.050 Allowance for Service.

A.  Determination.

1.   Subject to the following and all other provisions of this chapter, including such rules and regulations as the board may adopt in pursuance thereof, the board, subject to the approval of the city council, determines and may modify allowance for service.

2.   Time during which a member is absent on leave without pay may not be allowed in computing service.

3.   Each member must file with the board such information affecting his or her status as a member of the retirement system as the board may require.

B.  Military Service. Any member is given credit for any period served by him or her in the military service of the United States, in time of war or upon the call of the President, if at the time of such service such member was a regular employee under leave of absence. Certificate of honorable discharge from and/or documentary evidence of such service must be submitted to the board in order to obtain credit for such service.

C.  Deleted.

D.  Preservation of Credits Under Contract. The board is authorized from time to time to enter into agreements with other public retirement systems in the state relative to the mutual acceptance of members and preservation of service credits under such rules and regulations as may be necessary to carry into effect the provisions of this chapter or for its proper operation.

E.  Notwithstanding anything in this chapter to the contrary, effective 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. The board may promulgate regulations implementing this section.

[Ord. C33229 § 2; Passed: 5/12/2003]

3.05.060 Administration.

The administration of the retirement system is vested in the board of administration as provided for in SMC chapter 4.14.

In addition to other records and accounts, the board keeps such detailed reports and accounts as are necessary to show the financial condition of the retirement fund at all times.

3.05.070 Employees’ Retirement Fund.

A.  The City treasurer shall be the custodian of the retirement fund as provided in SMC 7.08.601. The fund created hereby shall be a trust fund held for the exclusive benefit of the members of the Spokane employees’ retirement system and their beneficiaries. No part of the corpus or income of the retirement fund shall be used for, or diverted to, purposes other than for the exclusive benefit of the members or their beneficiaries and the payment of fees and expenses of maintaining and administering the retirement system.

B.  This section shall be interpreted to allow the following:

1.   a return of the contribution to the City or its application as a credit on future contributions, after the board determines that the City has paid or overpaid the contribution under a mistake of fact;

2.   the making of refunds required by law; and

3.   termination of the retirement system and distribution of its assets to the City after all liabilities with respect to the members and their beneficiaries have been satisfied.

[Ord. C33229 § 3; Passed: 5/12/2003]

3.05.080 City’s Contribution.

There shall be paid into the retirement fund by contributions of the City the amounts necessary to pay all pensions and other benefits allowable under this chapter to members on account of prior service and minimum allowances provided for in SMC 3.05.160. There shall also be paid into the retirement fund by contributions of the City the amounts necessary to pay its share of disability pensions allowable under this chapter. Until the amount accumulated in the retirement fund becomes at least as large as the present value of all amounts thereafter payable from said fund, the amount annually due to the said fund under this section shall be the amount payable from said fund in the ensuing fiscal year on account of prior service, disability and minimum allowances above referred to.

[Ord. C7540 § 10]

3.05.090 Released Matching Funds.

Contributions by the City shall match contributions made by the employee or in-lieu payments. The City is not entitled to a repayment of the matching contributions made when an employee ceases to be employed by the City.

All such contributions are identified as released matching funds to provide for future retirements. The City’s liability for prior service credits, disability pensions, minimum pensions, and military service is offset by the released matching funds.

[Ord. C29757; Passed: 7/2/1990]

3.05.110 Administration of Social Security Act.

A.  The director of accounting is designated as the officer to administer such accounting, reporting and other functions as are required for the effective operation of the plan for extending the Federal Old Age and Survivors Insurance program to members of the Spokane employees’ retirement system approved by said employees on June 5, 1956. The director shall make such reports in such form and containing such information as the Governor from time to time may require, and shall comply with such provisions as the Governor or the Secretary of Health, Education and Welfare of the United States may from time to time find necessary to assure the correctness and verification of such reports. The Governor is authorized to terminate said plan if it is found that there has been failure to comply substantially with its provisions, such termination to take effect at the expiration of such notice and on such conditions as may be provided by regulations of the Governor consistent with the provisions of the Social Security Act.

B.  The director of accounting deducts from the salary of each officer and employee the amount of tax imposed by the Federal Insurance Contributions Act, and the amount so deducted from such salaries shall be paid into the contributions fund as provided in chapter 4, Laws of Washington, ex. sess., 1955, section 4(1). Failure to make such deductions does not relieve the officers or employees from liability for such deductions.

[Ord. C7540 §§ 10-1, 11-1]

3.05.120 Refund of Contributions.

A.  Withdrawal. Should the service of a member be discontinued, except by death or retirement, the member shall be paid, not later than six months after the day of discontinuance, such part of the member’s accumulated contributions as requested; provided, however, that a member may appeal to the board and by majority vote the board may grant a request for immediate withdrawal of contributions. If in the opinion of the board said member is permanently separated from City service by reason of such discontinuance, the board shall pay forthwith all of the member’s accumulated contributions with interest. The board may, in its discretion, withhold, for not more than one year after a member last rendered City service, all or part of the member’s accumulated normal contributions if, after a previous discontinuance of City service, the member withdrew all or part of the member’s accumulated normal contributions and failed to redeposit such withdrawn amount in the retirement fund as provided in this section. The City shall receive credit for the full amount deposited by the City in the retirement fund for such member’s benefit plus interest.

B.  Redeposit. Any member may redeposit in the retirement fund an amount equal to that which the member previously withdrew therefrom at the last termination of membership, such redeposit with appropriate interest as determined by the board to be paid into the retirement fund in accordance with rules established by the board. In the event such redeposit is made by a member, an amount equal to the accumulated normal contributions so redeposited shall again be held for the benefit of said member, and shall no longer be included in the amounts available to meet the obligations of the City on account of benefits that have been granted or liabilities that have been assumed on account of prior service of members, and the City shall reinstate the prior service credit for such member.

[Ord. C29757; Passed: 7/2/1990]

3.05.130 Service Retirement.

Retirement of members for service is made by the board as follows:

A.  Any member in the City service may voluntarily retire by filing with the board a written application, stating a desire to be retired, such application to be made at least thirty days prior to date of retirement.

B.  Normal Retirement Date. A member’s normal retirement date is the first day of the month coinciding with or next following the day on which the member has:

1.   attained the age of sixty-two, and

2.   completed five years of creditable service.

[Ord. C28702; Passed: 3/30/1987]

3.05.140 Local 270, AFSCME Employees’ Retirement.

A.  Employees of the City who are represented by Local 270, AFSCME, AFL-CIO, are subject to the following additional provisions with respect to their retirement benefits:

1.   The administrative procedures of the City employees’ retirement plan are nonnegotiable and will be in accordance with Ordinance No. C7540, enacted September 22, 1941, as amended or hereafter amended.

2.   Upon retirement, a member who contributed in accordance with Ordinance No. C7540, enacted September 22, 1941, as amended prior to November 12, 1974, and Ordinance No. C22660 enacted November 12, 1974, must elect to retire under the benefits of either Ordinance No. C22660 or C7540 as amended prior to November 12, 1974. A member who, in lieu of electing retirement benefits in accordance with Ordinance No. C22660, elects retirement benefits in accordance with Ordinance No. C7540, as amended prior to November 12, 1974, by such election waives all rights and benefits under Ordinance No. C22660.

3.   A member who elects to retire in accordance with Ordinance No. C22660 must accept all provisions of said ordinance which shall have precedence wherever there is a conflict between Ordinance Nos. C22660 and C7540 as amended prior to November 12, 1974. Contributions in accordance with Ordinance No. C22660 by the City and members are deposited in the employees’ retirement fund, as defined in SMC 3.05.070. All benefits are paid from the employees’ retirement fund.

B.  Minimum Retirement Benefit. The normal or early retirement benefit payable for any member who is entitled to benefits under the normal or early retirement provisions of Ordinance No. C22660 and whose retirement benefit commences on or after age sixty, shall not be less than the minimum annual retirement benefit, as determined by the following table:

Years of Credited Service	Minimum Annual Retirement Benefit
7 or more	$1,200
11 or more	1,800
15 or more	2,400

[Ord. C26600; Passed: 11/12/1974]

3.05.150 Other Employees’ Retirement.

Members of the employees’ retirement system who are not subject to the provisions of SMC 3.05.140 may elect from any of the retirement provisions of this chapter except SMC 3.05.140.

3.05.160 Allowance on Service Retirement.

A.  Normal Retirement Benefit.

1.   Subject to the minimum and maximum retirement benefits described in this section, a member’s annual normal retirement benefit is determined by multiplying two and fifteen one-hundredths percent of the member’s final compensation by the member’s years of creditable service exclusive of qualified military service; and a benefit purchased by the contributions of the City equal to one and two-thirds percent of the final compensation multiplied by the number of years of qualified military service, not to exceed five years as this type of service is otherwise defined and provided for in this chapter. In no case can the normal retirement benefit exceed sixty-four and five-tenths percent of final compensation.

2.   A member shall be eligible to receive annual normal retirement benefits on or after the member’s normal retirement date, provided the member has made application at the retirement office and has terminated active employment with the City.

B.  Accrued Retirement Benefit. A member’s annual accrued retirement benefit is determined for any date by multiplying two and fifteen one-hundredths percent of the member’s final compensation by the member’s years of credited service. In no case can the annual accrued retirement benefit exceed sixty-four and five-tenths percent of final compensation.

C.  Minimum Retirement Benefit. The normal or early retirement benefit payable for any member who is entitled to benefits under the normal or early retirement provisions of Ordinance No. C22660 and whose retirement benefit commences on or after age sixty, shall not be less than the minimum annual retirement benefit, as determined by the following table:

Years of Credited Service	Minimum Annual Retirement Benefit
7 or more	$1,200
11 or more	1,800
15 or more	2,400

D.  Vesting.

1.   Any member who terminates active employment with the City will be eligible to receive a service retirement allowance at the age of fifty, provided at time of termination, the member:

a.   has at least five years of creditable service; and

b.   elects to leave retirement accumulations in the retirement system.

2.   Every member desiring to take advantage of this vesting provision must file a request with the board of administration when terminating active employment.

E.  Early Retirement. A member may retire before the member’s normal retirement date if the member has:

1.   attained the age of fifty; and

2.   applied for early retirement; and

3.   terminated active employment with the City; and

4.   completed five years of creditable service.

F.  Early Retirement Benefit. Early retirement benefits are calculated in the same manner as normal retirement benefits.

G.  Payment of Benefits. After retirement, normal or early retirement benefits will be payable throughout the remainder of the member’s lifetime. However, if a member dies before the total of the retirement benefits paid to the member equals the member’s accumulated contributions at the time of retirement, and if the member has not elected an optional form of retirement benefit in accordance with SMC 3.05.210, an amount equal to the difference between the retirement benefits paid and the member’s accumulated contributions at the time of retirement will be paid to the member’s beneficiary.

H.  One-Time Cost of Living Allowance. All retirees whose retirement became effective before January 1, 1987, shall receive a one-time catch-up cost-of-living allowance. This allowance shall be calculated by multiplying two percent per year, or fraction thereof, for each year the member has been retired, by the retiree’s original monthly retirement allowance.

I.  Ad Hoc Performance Adjustment. The board is authorized to grant ad hoc performance adjustments. The ad hoc adjustments may be made annually, on or before April 1st of each year, if, in the judgment of the board, the investment earnings of the retirement fund allow for payment of the adjustment. The board considers, among other factors, the actuarial assumption rate and uses a five-year moving average of fund earnings as a guide to aid in determining whether the ad hoc payment should be made. The rate of the performance adjustment, if any, is determined by the board in its sole discretion based upon financial, actuarial and other data considered by the board, but is limited to a maximum of three percent in any year. The adjustment allowed by this subsection is to be noncompounding and based upon a retiree’s original pension amount. The adjustment allowed by this subsection replaces any previously granted cost of living allowances, except the allowance granted by subsection (H) of this section.

[Ord. C33229 § 4; Passed: 5/12/2003]

3.05.170 Payment upon Death of Member.

A.  Eligible to Retire. If a member who had not retired but had named the spouse as beneficiary and who shall have either:

1.   completed five years of City service and attained the age of fifty years, or

2.   completed thirty years of City service dies, then the spouse may elect to receive:

a.   death benefits provided for in this section, or

b.   a retirement allowance payable only for the remainder of his or her life and equal to that which would have been received had the deceased member retired on the date of death under the provisions of Option E, or

c.   in lieu of either of the above, a lump sum cash payment not to exceed one-half of the deceased member’s accumulated contributions and accumulated additional contributions, and a retirement allowance in accordance with Option E, but reduced proportionately by the amount of cash withdrawn from this selection.

B.  Not Eligible to Retire.

1.   Repayment of Contributions. Upon the death of any member not eligible to retire, there shall be paid to the member’s estate, or to such persons as the member shall have nominated by written designation duly executed and filed with the board, the member’s accumulated contribution with interest, less payments made therefrom to the member, if any.

2.   Death of Active Married Member. Alternatively, upon the death of any active member who is eligible to vest in the system, who is married at the time of death, and whose spouse has been properly nominated as sole beneficiary, the surviving spouse may elect to leave the accumulated contributions in the system and, on such date as the member would have turned fifty years old, or later, apply for and receive such retirement allowance as is allowed under retirement option “E” as established in this chapter. Such retirement will be calculated as if the member had been fifty years old at the time of death, and will be based upon the age of the surviving spouse at the time when the member would have reached age fifty. Any retirement allowance calculated under this section will be based on the accumulations and earnings of the member as of the date of death.

[Ord. C33331 § 1; Passed: 11/24/2003]

3.05.180 Disability Retirement.

A.  Any member while in City service may be retired by the board of administration for permanent and total disability, either ordinary or accidental, upon examination, if the member has not attained the age of sixty-five years but has at least five years of City service; provided, that the required five years of City service must have been credited to the member over a period of not to exceed ten years immediately preceding retirement.

B.  Such member, within three months after the discontinuance of City service, or while physically or mentally incapacitated for the performance of duty, if such incapacity has been continuous from discontinuance of City service, but not later than one year after discontinuance of City service, shall be examined by a physician or surgeon appointed by the board of administration upon the application of the head of the office or department in which said member is employed, or upon application of said member or a person acting in the member’s behalf, stating that the member is permanently and totally incapacitated, either physically or mentally, for the performance of duty and ought to be retired. If such medical examination shows, to the satisfaction of the board, that the member is permanently and totally incapacitated either physically or mentally for the performance of duty and ought to be retired, the board shall retire the member for disability forthwith.

C.  Any member who shall suffer accidental permanent and total disability while engaged in the City service shall be retired forthwith and shall not be required to have at least five years of City service as required for ordinary disability.

D.  The board shall secure such medical services and advice as it may deem necessary to carry out the purpose of this section and of SMC 3.05.200, and shall pay for such medical services and advice such compensation as the board shall deem reasonable.

[Ord. C7540 § 15]

3.05.190 Allowance on Disability Retirement.

A.  Upon retirement for disability as hereinabove provided, so long as the disability is not due to intemperance, willful misconduct or violation of law (of which the board shall be the judge), a member shall receive a retirement allowance consisting of:

1.   an annuity which shall be the actuarial equivalent of the member’s accumulated contributions at the time of retirement; and

2.   a pension purchased by the contributions of the city which, together with the annuity provided by the member’s accumulated normal contributions, shall make the retirement allowance, exclusive of any annuity provided by the member’s additional contributions, equal to one and one-fourth percent of the member’s final compensation, multiplied by the number of years of service which would be creditable to the member were the member’s services to continue until the member attains the age of sixty-two; provided, however, the minimum disability retirement allowance shall be two thousand four hundred dollars per year for duty-related causes, and one thousand two hundred dollars per year for non-duty-related causes.

B.  If disability is due to intemperance, willful misconduct or violation of law on the part of the member, the board of administration in its discretion may pay to said member in one lump sum the member’s accumulated contributions in lieu of a retirement allowance, and such payment shall constitute full satisfaction of all obligations of the city to such member and, upon receipt of such payment, membership in the retirement system shall cease.

C.  Upon the death of a member while in receipt of a disability retirement allowance, the member’s accumulated contributions, as they were at the date of retirement, less any annuity payments, shall be paid to the member’s estate, or to such persons as the member shall have nominated by written designation duly executed and filed with the board.

[Ord. C33331 § 2; Passed: 11/24/2003]

3.05.200 Safeguards of Disability Retirement.

A.  The board of administration may at its pleasure require any disability beneficiary under the age of sixty-two years to undergo medical examination to be made by a physician or surgeon appointed by the board, at a place to be designated by the board. Upon the basis of such examination, the board determines whether such disability beneficiary is still totally and permanently incapacitated either mentally or physically for service in the office or department of the City where previously employed or in any other City service for which the disability beneficiary is qualified. If the board of administration determines that said beneficiary is not so incapacitated, the retirement allowance is canceled and the beneficiary is reinstated forthwith in the City service.

B.  Should a disability beneficiary re-enter the City service and be eligible for membership in the retirement system in accordance with SMC 3.05.030, any retirement allowance is canceled and the beneficiary immediately becomes a member of the retirement system. The member’s individual account is credited with the member’s accumulated contributions less the annuity payments paid as disability. An amount equal to the accumulated normal contributions so credited is again held for the benefit of said member and is no longer included in the amounts available to meet the obligations of the City on account of benefits that have been granted and on account of prior service of members. Such member receives credit for prior service in the same manner as if the member had never been retired for disability.

C.  Should any disability beneficiary under the age of sixty-two years refuse to submit to medical examination, any pension may be discontinued until the disability beneficiary withdraws such refusal, and should such refusal continue for one year, any retirement allowance may be canceled. Should said disability beneficiary, prior to attaining the age of sixty-two years, engage in a gainful occupation not in City service, or should the beneficiary re-enter the City service and be ineligible for membership in the retirement system in accordance with SMC 3.05.030, the board of administration shall reduce the amount of retirement allowance to an amount which, when added to the compensation earned by the beneficiary, shall not exceed the amount of the final compensation adjusted for cost of living as determined by the board of administration. Should the earning capacity of such beneficiary be further altered, the board may further alter any retirement allowance as hereinbefore provided. When said disability beneficiary reaches the age of sixty-two years, the retirement allowance shall be made equal to the amount upon which the beneficiary was originally retired, and shall not again be modified for any cause except as provided in SMC 3.05.260.

D.  Should the retirement allowance of any disability beneficiary be canceled for any cause other than re-entrance into the City service, the beneficiary shall be paid his or her accumulated contributions, less annuity payments made.

[Ord. C7540 § 17]

3.05.210 Optional Allowance on Retirement.

A member may elect to receive, in lieu of the retirement allowance provided for in SMC 3.05.160, its actuarial equivalent in the form of a lesser retirement allowance, payable in accordance with the terms and conditions of one of the options set forth below. Election of any option must be made by written application filed with the board of administration at least thirty days in advance of retirement as provided in SMC 3.05.130, and does not become effective unless approved by the board prior to retirement of the member.

Option A. The lesser retirement allowance will be payable to the member throughout the member’s life; provided, that if the member dies before the member receives in annuity payments referred to in SMC 3.05.160(A)(1) a total amount equal to the amount of accumulated contributions as it was at the date of retirement, the balance of such accumulated contributions will be paid in one sum to the member’s estate or to such person as the member shall nominate by written designation duly executed and filed with the board.

Option B. The lesser retirement allowance will be payable to the member throughout the member’s life; provided, that if the member dies before the member receives in annuity payments referred to in SMC 3.05.160(A)(1) a total amount equal to the amount of accumulated contributions as it was at the date of retirement, the said annuity payments resulting from accumulated contributions will be continued and paid to the member’s estate or such person as the member shall nominate by written designation duly executed and filed with the board, until the total amount of annuity payments shall equal the amount of accumulated contributions as it was at the date of retirement.

Option C. The member elects a “guaranteed period” of any number of years. If the member dies before the lesser retirement allowance has been paid for the number of years elected as the “guaranteed period,” the lesser retirement allowance will be continued to the end of the “guaranteed period,” and during such continuation be paid to the member’s estate or to such person as the member shall nominate by written designation duly executed and filed with the board.

Option D. The lesser retirement allowance will be payable to the member throughout life and, after the death of the member, one-half of the lesser retirement allowance shall be continued throughout the life of, and paid to, the spouse of the member.

Option E. The lesser retirement allowance will be payable to the member throughout life, and after death of the member, it shall be continued throughout the life of, and paid to, the spouse of the member.

[Ord. C33331 § 3; Passed: 11/24/2003]

3.05.230 Monthly Installment Payments.

A pension annuity or a retirement allowance granted under the provisions of this chapter, unless otherwise specified herein, is payable in monthly installments, and each installment shall cover for the current calendar month.

[Ord. C7540 § 20]

3.05.240 Pension Not Subject to Execution.

The right of a person to a pension, as annuity or a retirement allowance, the return of contributions, the pension annuity or retirement allowance itself, any optional benefit, any other right accrued or accruing to any person under the provisions of this chapter or any prior ordinance, and the moneys in the retirement fund, shall not be subject to execution, garnishment, attachment, or any other process whatsoever and shall be unassignable except as specifically provided in this chapter.

[Ord. C7540 § 21]

3.05.250 Estimate Permitted.

If it be impracticable for the board of administration to determine from the records the length of service, the compensation, or the age of any member, the board may estimate, for the purpose of this chapter, such length of service, compensation, or age.

[Ord. C7540 § 22]

3.05.260 Suspension of Allowance During Employment.

The payment of any retirement allowance to a member who has been retired will be suspended during the time the beneficiary is for any reason an employee of the City; provided, that payment for vacation or sick leave earned in the City service prior to retirement may be made without suspension of allowance; and, provided further, that this provision does not apply to retirees who:

A.  become elective employees of the City, or

B.  enter into personal services contracts with the City, or

C.  employees who, subsequent to retirement, are rehired pursuant to the following criteria:

1.   The position filled is not covered by a collective bargaining agreement with the City, and

2.   The position is filled only with the approval of the director of personnel or the mayor’s office, and

3.   Employment is limited to nine hundred sixty hours per calendar year, and

4.   The mayor’s office prepares an annual report to the board on the usage of retirees.

[Ord. C32755; Passed: 12/4/2000]

3.05.270 Preliminary Cost.

The city council appropriates annually from the retirement fund the amount it deems necessary for the purpose of paying the expenses of administering the retirement system and the purchase of fiduciary responsibility insurance. The board of administration annually submits to the city council its estimate of the amount necessary to pay such expenses.

3.05.275 Portability of Benefits.

A.  The board of administration of the City employees’ retirement system is authorized to contract with the board of administration of the Tacoma employees’ retirement system and/or board of administration of the Seattle employees’ retirement system (each called a “participating system”) for the portability of retirement benefits of employees who are also members of the retirement systems of the cities of Tacoma and Seattle, respectively. The following terms and conditions shall apply in addition to such other requirements as may be established by rule of the board or the agreement with participating systems:

1.   The member must be in the active service of a participating system on or after the effective date of the board’s agreement for portability; a member retired from any of the three systems on the effective date of the ordinance codified in this chapter is not eligible.

2.   Creditable service may accrue in only one participating system at a time. A member who leaves city employment to enter military service may only receive creditable service for his or her military service in one of the participating systems according to its rules.

3.   A member may combine service credit in two or more participating systems for the sole purpose of determining the member’s eligibility to receive a service retirement allowance, but the member may not aggregate service credit in two or more retirement systems for the purpose of determining the percentage factor to be used in calculating a service retirement allowance.

4.   A member of two or more participating systems who is eligible to retire under any system may elect to retire from all the member’s systems and to receive a service retirement allowance. Each participating system shall calculate the allowance using its own criteria except that the member shall be allowed to use the member’s base salary from any participating system as the compensation used in calculating the allowance. “Base salary” means the salary or wages used by the participating system during a payroll period for making contributions to the system by its members generally. It includes salary or wages paid for personal services and wages and salary deferred under the provisions of the United States Internal Revenue Code. It excludes overtime payments (except as to service for the City of Spokane), non-money maintenance compensation and lump-sum payments for deferred annual leave, unused accumulated vacation, unused accumulated annual leave, any form of severance pay, any bonus for voluntary retirement, any other form of leave, or any similar lump-sum payment.

5.   The retirement allowances shall be paid separately by each participating system. Post-retirement adjustments, if any, shall be based upon the payments made by each participating system to the member.

6.   The total retirement allowances provided through portability of benefits shall not be less than the benefits payable by each participating system were there no portability.

7.   A participating system may pay a member of two or more systems a lump sum in lieu of a monthly benefit if the initial monthly benefit would be less than fifty dollars.

8.   If a member of two or more participating systems dies in service in any system, the surviving spouse shall receive the same benefit from each system that would have been received if the member were active in the system at the time of his or her death based upon service actually established in that system.

9.   The terms and conditions of the board’s agreement with the board of a participating system both establishes and limits the portability of benefits provided. The board’s agreements may be amended from time to time or supplemented by an agreement with the State of Washington for portability with state retirement systems. If the board amends its agreement with the board of a participating system or makes modifications to provide portability with state systems, the rights, terms and conditions for portability are subject to amendment or abolition at any time before a member retires.

10.  A member who:

a.   earned retirement credit for service in a participating system;

b.   withdrew his or her contributions from that system;

c.   lost service credit by making the withdrawal; and

d.   is now an active member of another participating system,

      may restore his or her prior service credit in the participating system of his or her former municipal employer by redepositing an amount determined by the system board within one year after January 1, 1991. Any individual hired after January 1, 1992, shall be provided with a one-year period under portability to repay contributions. This does not extend the time period for those individuals in the system who have not taken advantage of the one-year “windowed” period from January 1, 1991, to December 31, 1991. The amount shall be measured by the accumulated contributions withdrawn, plus compound interest which would have accumulated on the withdrawn contributions from the date of withdrawal until the date of his or her redeposit.

B.  As authorized by RCW 41.54.061 the City irrevocably elects to participate in the portability of public retirement systems as contemplated by RCW chapter 41.54, and to pay for the additional cost it may incur as a result of the benefits provided. The eligibility of members for the portability of public retirement systems, the benefits available thereunder, the limitations (including RCW 41.54.080), and the procedures shall be as set out in RCW chapter 41.54.

[Ord. C30973; Passed: 12/13/1993]

3.05.280 Severability.

If any one or more sections, subsections, subdivision, sentences, clauses, or phrases of this chapter are for any reason held to be unconstitutional or invalid, such decision shall not affect the validity of the remaining portions of this chapter, but the same shall remain in full force and effect.

3.05.290 Compliance with Internal Revenue Code.

This chapter shall be administered in a manner to comply with Internal Revenue Code requirements for government qualified plans, including but not limited to Internal Revenue Code sections 401(a)(2), (a)(7), (a)(8), (a)(9), (a)(16), (a)(17), (a)(25), and (a)(31), 414(u), and 415. The board shall promulgate regulations designed to assure compliance with such requirements which will become part of the retirement system subject to change by amendment of said regulations by the board.

[Ord. C33229 § 5; Passed: 5/12/2003]