3.28.740 - Prior service rate of contribution - Determination.
The members' prior service rate of contribution shall be such that, based on interest and mortality tables and other relevant actuarial data, the total amount of prior service contributions which will be required of members will be sufficient to pay, when due, forty-two percent (42%) of the difference between:
A. The amount of all pensions, allowances and other benefits which are and will become payable under this System on account of or because of prior service of members; and
B. The amount of all pensions, allowances and benefits which would be and become payable to members on account of prior service (that is, on account of service rendered prior to July 1, 1975) under the provisions of the Chapter 3.24 Retirement System as it existed on June 30, 1975, if all members of this System were members of said Chapter 3.24 Retirement System instead of being members of this System; provided, however, that if and when, from time to time, the members' prior service rate of contribution is hereafter amended or changed, the new rate shall not include any amount designed to thereafter recover from members or return to members the difference between the amount of members' prior service contributions theretofore actually required to be paid by members and any greater or lesser amount which, because of amendments hereafter made to this System or as a result of experience under this System, said members should have theretofore been required to pay in order to make their prior service contributions equal forty-two percent (42%) of the difference specified above.
C. Notwithstanding the foregoing, to the extent that prior service contributions are applicable to a Tier 2 member, the amount of prior service contributions required of a Tier 2 member for each month (or for each two (2) weeks, if compensation is paid biweekly by the City) shall be a percentage of "compensation earnable," as defined for Tier 2 members in Section 3.28.030.06, required in order to make their prior service contributions sufficient to provide for half of the cost to provide pensions, allowances and other benefits which are or will become payable to Tier 2 members on or after September 30, 2012, based on such prior service, including any amount designed to recover from members the difference between the amount of prior service contributions theretofore actually required to be paid by Tier 2 members and any greater amount which, as a result of experience under this System, said members should have theretofore been required to pay in order to make their prior service contributions provide for half of the cost of the abovementioned pensions, allowances and other benefits which are or will become payable to such Tier 2 members on or after September 30, 2012 with respect to any prior service. Notwithstanding the foregoing, the following shall apply to the manner of sharing contributions between the City and members who became Tier 2 members prior to June 16, 2017 but on and after June 16, 2017 are no longer considered Tier 2 members under Section 3.28.030.28 but remain members of the Plan and those members who are Tier 2 members effective on and after June 16, 2017:
1. The costs, including any unfunded actuarial accrued liability, associated with implementing changes to benefits for Tier 2 employees effective as of June 16, 2017 for members who were Tier 2 members prior to June 16, 2017, including the cost associated with returning prior members of this Plan who had become Tier 2 members back to the benefit provisions applicable to non-Tier 2 members, will be amortized as a separate liability over twenty (20) years or other period determined by the Board and will be reflected as soon as practicable in contribution rates to be shared equally among the City and the former Tier 2 members who will return to non-Tier 2 status and equally among those Tier 2 members whose Tier 2 benefits will be increased as of June 16, 2017, and such increased rates shall not be subject to the incremental increases in amounts associated with unfunded actuarial accrued liability described in Section 3.28.740.C.2.
2. Other than as provided in Section 3.28.200.A., in determining member contribution rates, to the extent an unfunded actuarial accrued liability is determined to exist with respect to the Plan, Tier 2 members will contribute toward the amount of such amortized unfunded actuarial accrued liability by increasing the Tier 2 member contribution rate by one-third of one percent (0.33%) of compensation each year until such time as the cost of the unfunded actuarial accrued liability is being shared equally by the Tier 2 members and the City. Until such time as the Tier 2 members and the City are sharing such cost equally, the City will include in its contribution rate the amount of the amortized unfunded actuarial accrued liability that would otherwise have been paid by the Tier 2 member in such year.
D. Notwithstanding any other provisions of this Plan to the contrary, in determining the amount of contributions to be made to the Plan as provided in this Section 3.28.740, except as provided in subsection 3.28.740.C, any excess of assets over the actuarial accrued liability shall not be used to reduce the contributions to the Plan.
(Prior code § 2904.1254; Ords. 29120, 29904.)
