Disposition of earnings.

San José Municipal Code § 3.28.340

in effect

3.28.340 - Disposition of earnings. A. Definitions. For the purpose of this Section 3.28.340, the terms listed herein shall have the following meanings: 1. "Income account" means the account established in the general reserve pursuant to Subsection B. below. 2. "Interest crediting rate" means the interest rate determined by the board for crediting the employee contribution reserve. B. Retirement fund reserves. There shall be established in the retirement fund the following reserves: 1. The employee contribution reserve. a. The board shall credit to the employee contribution reserve all contributions made by members of the retirement system and all interest payable pursuant to Subsection C. below. b. Moneys in the employee contribution reserve shall be available for the payment of benefits and for the return of contributions pursuant to Section 3.28.780. 2. The general reserve. a. The board shall establish an income account and shall credit the income account with all rents, interest, dividends, realized gains and losses, unrealized gains and losses, and all other income other than employer contributions, received during the fiscal year. The board shall pay from the income account all expenses and administrative costs as they are incurred. b. The board shall credit to the general reserve all contributions made by the city, all interest payable pursuant to Subsection C. below, and that portion of the excess earnings determined pursuant to Subsection D. below. c. Moneys in the general reserve shall be available for the payment of benefits and for the payment of the expenses and administrative costs of the retirement system. 3. Such other reserves as the board may determine from time to time. C. Credit to contributions and reserves. All interest credited pursuant to this Subsection C. shall be deducted from the income account. 1. Interest shall be credited to the employee contribution reserve on a semi-annual basis, or more frequently if authorized by the board, at the interest crediting rate. 2. Interest shall be credited to the general reserve as follows: a. Interest at the actuarially assumed annual rate of return adopted by the board pursuant to Section 3.28.200 or at the actual rate of return earned by the retirement fund during the applicable fiscal year, whichever is lower; plus b. Interest calculated as the difference between (i) the interest that would have been credited to the employee contribution reserve had the employee contribution reserve been credited at the actuarially assumed annual rate of return adopted by the board pursuant to Section 3.28.200 or at the actual rate of return earned by the retirement fund during the applicable fiscal year, whichever is lower, and (ii) the interest actually credited to the employee contribution reserve pursuant to Subsection C.1. above; provided, however, that there shall be no offset to the general reserve in any case where this difference is a negative number. D. Excess earnings. 1. Within ninety days from and after receipt of audit reports for each fiscal year, the board shall determine the balance remaining in the income account after crediting of interest as provided in Subsection C. above, and after payment of administrative costs and expenses of the retirement system for the applicable fiscal year. 2. If the balance remaining in the income account is greater than zero, the board shall, by written resolution, declare that balance to be the excess earnings for the applicable fiscal year, shall transfer the excess earnings to the general reserve. If the balance remaining in the income account is less than or equal to zero, the board by written resolution shall declare that there are no excess earnings and shall adjust the general reserve to reflect any negative balance in the income account so that the balance in the income account is zero as of the beginning of each fiscal year. (Prior code § 2904.1103; Ords. 20596, 22263, 22486, 23087, 25092, 27436, 29174.)

Source: City of San José, Municipal Code (Municode Library, library.municode.com)URL: https://library.municode.com/ca/san_jose/codes/code_of_ordinances?nodeId=TIT3PE_IIREPL_CH3.281975FEEMREPL_PT3REFU_3.28.340DIEAFetched: 11/1/2026