Other Operating Funds—Traditional Retirement Plan.
Ann Arbor City Code § 1:566
in effect1:566. - Other Operating Funds—Traditional Retirement Plan.
(1) The Retirement Reserve Fund is the accounting Fund from which shall be paid all Annuities and Pensions payable as provided in this chapter. Should a disability Retirant return to active Service in the employ of the City, the Retirant's Annuity Reserve at that time shall be transferred from the Retirement Reserve Fund to the Annuity Savings Fund and shall be credited to the Retirant's individual account therein and the Retirant's Pension Reserve at that time shall be transferred from the Retirement Reserve Fund to the Pension Reserve Fund.
(2) Effective June 30, 1975, the Board shall establish a pension adjustment account within the Retirement Reserve Fund. The initial account balance shall be $1,078,288.00. Each June 30 thereafter continuing through June 30, 2011, the account shall be increased by the positive difference or decreased by the negative difference, as the case may be, between the balance in the Retirement Reserve Fund after credited interest at the Funding Interest Rate set forth in section 1:552.1(22) and additional interest, if any, as provided by subsection 1:567(1) and the sum of (1) the balance in the pension adjustment account; (2) the Annuity and Pension Reserve for Annuities and Pensions being paid Retirants and Beneficiaries; and (3) the Pension Contingency Reserve. Each July 1 thereafter continuing through June 30, 2011, the account shall be reduced by the Pension Reserve for the pension adjustment, if any, which became effective as of July 1, pursuant to subsections (1) and (2) of section 1:574.
(3) Effective July 1, 2011 and each July 1 thereafter, the Pension Adjustment Account shall be the account to which a percentage of excess earnings shall be credited and interest accrued, both as provided herein, and to which distributions under section 1:574 shall be charged. "Excess earnings," as used herein, shall mean the excess, if any, of (1) the recognized rate of return on the actuarial value of Retirement System Assets, greater than (2) ¾ of 1 percent (.75%) over the actuarial assumed rate of return, multiplied by (3) the actuarial present value of benefits being paid retired Members and survivor beneficiaries, as reported in the annual actuarial valuation. Commencing with the actuarial report dated June 30, 2011, upon receipt of the annual actuarial valuation for each fiscal year (July 1—June 30), the Board shall credit the Pension Adjustment Account at the end of the then current fiscal year, with the excess earnings, if any, earned in the prior fiscal year. Notwithstanding the foregoing, the Board shall credit no excess earnings to the pension adjustment account in any fiscal year in which the City funded status of the Retirement System is below 100% based upon the Actuarial funded status.
(a) Prior to crediting of the prior year's excess earnings, the balance in the Pension Adjustment Account as of the last day of the fiscal year shall be credited with the interest based upon the recognized rate of return on the Actuarial Value of Retirement System Assets for the prior fiscal year; however, said recognized rate of return shall not be greater than the actuarially assumed rate of investment return.
(b) The balance in the Pension Adjustment Account after crediting of the prior year's excess earnings shall not exceed an amount equal to the total amount of the pension benefits paid by the Retirement System to retirees and beneficiaries in the prior fiscal year as reflected in the annual actuarial report.
(c) The aggregate cost of pension benefit adjustments and supplemental benefit distributions pursuant to subsection 1:574(2) shall be charged to the Pension Adjustment Account.
(4) The Pension Reserve Fund shall be the Fund in which shall be accumulated reserves for the payment of all pensions payable from Funds provided by the City. Upon the basis of such mortality and other experience tables and interest at the Funding Interest Rate set forth in section 1:552.1(22), the actuary shall annually compute the pension reserve (1) for pensions being paid Retirants and Beneficiaries, and (2) covering Service rendered and to be rendered by Members. The said pension reserves shall be financed by annual appropriations to be made by the City Council, determined according to subparagraphs (a), (b) and (c) of this subsection.
(a) The appropriation for Members' current Service shall be a percent of their annual Compensations which will produce an amount which, if paid annually by the City during their future Service, and taking into account actuarial gains and funding credits as determined by the actuary, will be sufficient to provide the reserves, at the time of their Retirements for the portions of the pensions to be paid them based upon their future Service; and
(b) The appropriation for Members' accrued Service shall be a percent of their annual Compensations which will produce an amount which, if paid annually by the City over a period of years to be determined by the Board, and taking into account actuarial gains and funding credits as determined by the actuary, will amortize, at the Funding Interest Rate set forth in section 1:552.1(22), the unfunded pension reserves for the accrued Service portions of the pensions to which they may be entitled; and
(c) The appropriation for pensions being paid Retirants and Beneficiaries shall be a percent of the annual Compensations of Members which will produce an amount which, if paid annually by the City over a period of years to be determined by the Board, and taking into account actuarial gains and funding credits as determined by the actuary, will amortize, at the Funding Interest Rate set forth in section 1:552.1(22), the unfunded pension reserves for pensions being paid Retirants and Beneficiaries.
(d) All Pensions shall be paid from the Retirement Reserve Fund. Upon the Retirement of a Member or at the time a pension becomes payable to a Beneficiary on account of the death of a Member, the reserve for such pension shall be transferred from the Pension Reserve Fund to the Retirement Reserve Fund. The Board may from time to time transfer from the Pension Reserve Fund to the Retirement Reserve Fund such additional amounts as it determines to be necessary for the proper maintenance of the Retirement Reserve Fund.
(e) In the event the amounts appropriated in the budget in any year are insufficient to pay in full the amounts due in said year to all Retirants and Beneficiaries of the Retirement System, the amount of such insufficiency shall thereupon be provided by the appropriating authorities of the City.
(f) The maintenance of the various Funds of the Retirement System set forth and required in this chapter shall be interpreted to refer to the accounting Fund of the Retirement System and shall not require the actual segregation of assets in the various accounting Funds of the Retirement System.
(5) The Board shall annually certify to the City Council, according to the established City budget procedure, the amount of the City's annual contribution, as determined by the annual valuation by the Retirement System's actuary, to Fund the Retirement System during the ensuing fiscal year and the City shall appropriate and pay such amount to the Retirement System. The City shall remit such payment no later than June 30 of the Plan Year to which the annual contribution applies.
(6) The Board shall annually prepare a budget and a budget statement which shall explain the budget and shall contain an outline and explanation of the proposed financial policies of the Board relating to its current and future investment operations. The budget as approved by the Board shall be submitted to City Council for reporting purposes in accordance with applicable law. Payment for all expenses necessary in connection with the administration and operation of the Retirement System shall be paid from the earnings of the Retirement System in accordance with applicable law. The Board shall have the sole authority to enter into contracts and make expenditures for the Retirement System.
(7) The Retirement System shall publish and make available a summary annual report available to the Members, Retirants and Beneficiaries, and the general public. The financial records of the Retirement System shall be subject to the annual audit of the City. The Board shall fully comply with all applicable statutory and municipal budgetary and accounting procedures and provide access to and/or documentation of all revenues from all sources, the amount of expenditures for each purpose, the amount of indebtedness, the Fund balances at the close of each fiscal year, and any other information as may be required by law as part of the City's annual financial report to the state treasurer.
(Ord. No. 16-28, § 1, 1-3-17)
Source: City of Ann Arbor, Michigan, Code (Municode Library, library.municode.com)URL: https://library.municode.com/mi/ann_arbor/codes/code_of_ordinances?nodeId=TITIAD_CH18EMRESY_1_566OTOPFURAREPLFetched: 11/8/2026