Deduction of member contributions from salaries; pickup of member contributions by employer.
Kansas City Code § 2-1335
in effectSec. 2-1335. - Deduction of member contributions from salaries; pickup of member contributions by employer.
(a) Compensation means the basic monthly wage or salary paid an elected official excluding bonuses, overtime, expense allowance and other extraordinary compensation. Compensation shall include amounts contributed to any plan maintained by the employer pursuant to a salary reduction agreement where the member could have elected to receive such amount as case compensation.
Annual compensation means compensation defined in section 415(c)(3) of the Internal Revenue Code and section 1.415-2(d) of the Treasury Regulations, but in no event more than $200,000.00 per calendar year (as adjusted annually under section 401(a)(17) of the Internal Revenue Code). Annual compensation also includes amounts contributed by the employer pursuant to a salary reduction agreement which are excludable from a member's gross income under sections 125, 401(a)(8), 402(h), or 403(b) of the Internal Revenue Code.
Effective on and after January 1, 1996, in addition to other applicable limitations set forth in the plan, and notwithstanding any other provision of the plan to the contrary, for plan years beginning on or after January 1, 1996, and only for elected officials who were not members before January 1, 1996, the annual compensation of each member taken into account under the plan shall not exceed to OBRA '93 annual compensation limit. The OBRA '93 annual compensation limit is $150,000.00, as adjusted by the commissioner for increases in the cost of living in accordance with section 401(a)(17) of the Internal Revenue Code. The cost-of-living adjustment in effect for a calendar year applies to any period, not exceeding 12 months, over which compensation is determined (determination period) beginning in such calendar year. If a determination period consists of fewer than 12 months, the OBRA '93 annual compensation limit will be multiplied by a fraction, the numerator of which is the number of months in the determination period, and the denominator of which is 12.
For plan years beginning on or after January 1, 1996, and only for elected officials who were not members before January 1, 1996, any reference in this pension system plan to the limitation under section 401(a)(17) of the Internal Revenue Code shall mean the OBRA '93 annual compensation limit set forth in this provision.
If compensation for any prior determination period is taken into account in determining a member's benefits accruing in the current plan year, the compensation for that prior determination period is subject to the OBRA '93 annual compensation limit in effect for that prior determination period. For this purpose, for determination periods beginning before the first day of the plan year beginning on or after January 1, 1996, or OBRA '93 annual compensation limit is $150,000.00.
(b) Member contributions. Each elected official shall contribute, by means of payroll deductions, five percent of the member's base rate of compensation until the first pay period following June 6, 1998, when the contribution rate thereafter shall be four percent of compensation. For the pay period beginning April 20, 2014, and thereafter, each member of the plan shall contribute, by means of payroll deductions, five percent of compensation.
(c) The employer, pursuant to the provisions of section 414(h)(2) of the United States Internal Revenue Code, shall pick up and pay the contributions which would otherwise be payable by members as prescribed in this division, commencing with the pay period ending May 11, 1986. The contributions so picked up shall be treated as employer contributions for purposes of determining the amounts of federal and state income taxes to withhold from the member's compensation.
(d) Member contributions picked up by the employer shall be paid from the same source of funds used for the payment of compensation to a member. A deduction shall be made from each member's compensation equal to the amount of the member's contributions picked up by the employer, provided that such deduction shall not reduce the member's compensation for purposes of computing benefits under sections 2-1333, 2-1334 and 2-1339, including amendments thereto. Member contributions picked up by the employer shall be paid to the retirement system administrators as provided in section 2-1337. Such contributions shall be credited to a separate account within the member's individual account so that amounts contributed by the member before the pay period ending May 11, 1986, may be distinguished from the member contributions picked up by the employer. Interest shall be added annually to members' individual accounts.
(e) Member contributions picked up by the employer shall be deemed earnings subject to the city earnings tax.
(f) The official shall not have the option of choosing to receive the contributed amounts directly instead of having them paid by the employer to the retirement system.
(g) Trust. The assets of the retirement system shall be held in trust by the board of trustees. The trust is intended to be tax-exempt under section 501(a) of the Internal Revenue Code and the pension system plan is intended to be qualified under section 401(a) of the Internal Revenue Code.
All payments made by elected officials to the retirement system fund and such other payments that are made to the fund on behalf of employers and members, and all other money or property that lawfully becomes part of the trust, together with the income, gains and all other increments shall be held, managed and administered in trust. The trust shall be known as the Employees' Retirement System of the City of Kansas City, Missouri Trust. The trustees shall perform the duties, responsibilities and obligations and in accordance with section 2-1137.
It shall be impossible by operation of the trust or by its natural termination, by power of revocation or amendment, by the happening of any contingency, by collateral arrangement or by any other means, for any part of the corpus or income of the trust or any funds contributed to the trust to be used for, or diverted to purposes other than the exclusive benefit of members, for members, their beneficiaries or dependents prior to all obligations having been satisfied or provided for. No part of net earnings of the trust shall inure (other than benefit payments) to the benefit of any employer or individual; provided, however, a contribution made by an employer under a mistake of fact may be returned to the employer if the trustees so direct provided the repayment is not prohibited under applicable law and will not adversely affect the tax-exempt status of the trust.
(Admin. Code 1967, § A9.134; Ord. No. 36147, 11-27-68; Ord. No. 59203, 4-4-86; Ord. No. 951643, § A, 12-21-95; Ord. No. 980525, § 1, 5-21-98; Ord. No. 140035, § 1, 2-20-14; Ord. No. 140976, § 4, 12-11-14)
Source: City of Kansas City, Missouri, Code of Ordinances, Charter and Zoning and Development Code (Municode Library, library.municode.com)URL: https://library.municode.com/mo/kansas_city/codes/code_of_ordinances?nodeId=PTIICOOR_CH2AD_ARTIXPEOTBE_DIV6RESYELOF_S2-1335DEMECOSAPIMECOEMFetched: 10/28/2026