CASH BALANCE PLAN CONTRIBUTIONS

Memphis Code of Ordinances tit. 4, ch. 4-34, art. 3

in effect

Memphis Code of Ordinances § 4-34-11 Participant employee cash balance plan contributions.

Sec. 4-34-11. - Participant employee cash balance plan contributions. A. Effective July 1, 2016, each 2016 plan participant who is not a police officer or a firefighter shall make a mandatory cash balance plan contribution to the trust fund in an amount equal to two percent of his/her compensation. Such contribution shall be paid by the participant while an employee until his/her retirement or termination as an employee. Such contribution shall be in addition to any defined contribution plan contribution of the employee. B. Effective July 1, 2016, each 2016 plan participant who is a police officer or a firefighter shall make a mandatory cash balance plan contribution to the trust fund in an amount equal to two percent of his/her compensation. Such contribution shall be paid by the participant while an employee until his/her retirement or termination as an employee. Such contribution shall be in addition to any defined contribution plan contribution of the employee. C. The contributions made by each participant to the trust fund shall be designated as city contributions pursuant to IRC section 414(h). Such designation is contingent upon the contributions being excluded from the participant's gross income for federal income tax purposes. D. Subject to the provisions of this 2016 plan, the board shall adopt rules and regulations governing the making of employee contributions by payroll deduction. The head of each city department shall apply the rate of contribution to the compensation of each participant, and shall certify to the comptroller on each payroll the amount to be contributed, and shall promptly furnish to the board a copy of each payroll; and such amounts shall be deducted by the comptroller and shall be paid into the trust fund and credited by the board as employee cash balance plan contributions of the participants for whom the contributions were made. Every participant shall be deemed to have consented and agreed to the employee cash balance contributions provided and made hereunder. Payment of salary, less such cash balance plan contributions and any defined contribution plan contributions provided herein, shall be a full and complete discharge of all claims and demands whatsoever for the service rendered by such person to the city during the period covered by such payment, except his or her claim to the benefits to which he or she may be entitled under the provisions of this 2016 plan. E. At the end of each pay period, the comptroller shall determine the aggregate amount of the participant employee cash balance plan contributions of the participants who are employees of the general city government for such period, including police officers and firefighters, and shall be supplied with the aggregate amount of the participant employee cash balance plan contributions of the participants of the various other city agencies, in the proper amount, and shall then contribute to the trust fund an amount equal to the aggregate employee cash balance contributions for all participants for such pay period; provided, however, the first determination and transfer of funds as provided for above after the original effective date of this 2016 plan shall be made at the end of the July 15, 2016 pay period. (Ord. No. 5573, § III, 12-16-2014)

Memphis Code of Ordinances § 4-34-12 City cash balance plan allocations.

Sec. 4-34-12. - City cash balance plan allocations. A. As of the end of each plan year, the comptroller shall determine the aggregate amount of the compensation of each 2016 plan participant who is not a police officer or a firefighter on which the employee cash balance plan contributions for such period are calculated. The city shall allocate to the cash balance accounts of such participants the following: 1. For those participants with less than five years of service at the date of such contribution three percent of such compensation. 2. For those participants with five or more years of service but less than ten years of service at the date of such contribution five percent of such compensation. 3. For those participants with ten or more years of service but less than 15 years of service at the date of such contribution seven percent of such compensation. 4. For those participants with 15 or more years of service but less than 20 years of service at the date of such contribution ten percent of such compensation. 5. For those participants with 20 or more years of service at the date of such contribution 13 percent of such compensation. B. As of the end of each plan year, the comptroller shall determine the aggregate amount of the compensation of each 2016 plan participant who is a police officer or a firefighter on which the employee cash balance plan contributions for such period are calculated. The city shall allocate to the participant cash balance accounts of such participants the following: 1. For those participants with less than five years of service at the date of such contribution six percent of such compensation. 2. For those participants with five or more years of service but less than ten years of service at the date of such contribution eight percent of such compensation. 3. For those participants with ten or more years of service but less than 15 years of service at the date of such contribution ten percent of such compensation. 4. For those participants with 15 or more years of service but less than 20 years of service at the date of such contribution 13 percent of such compensation. 5. For those participants with 20 or more years of service at the date of such contribution 16 percent of such compensation. (Ord. No. 5573, § III, 12-16-2014)

Memphis Code of Ordinances § 4-34-13 Reserved.

Memphis Code of Ordinances § 4-34-14 Interest credits on participant cash balance accounts.

Sec. 4-34-14. - Interest credits on participant cash balance accounts. For each 2016 plan participant, the "interest crediting rate" applied to the participant's cash balance account shall be based on the plan's return on assets for the applicable plan year less one percent. For periods of less than 12 months the interest crediting rate applied to the participant's cash balance account shall be based on the year to date (YTD) return on assets for the applicable plan year through the second month preceding the month in which the annuity commencement date occurs less one percent. Such interest credit shall be allocated in the following manner: 1. Effective as of the last of each plan year, the dollar amount credited to each participant's cash balance account is calculated as the sum (a) and (b) below: a. The interest crediting rate multiplied by the cash balance account on the last day of the prior plan year. b. The interest crediting rate multiplied by the sum of participant cash balance plan contributions and city cash balance plan allocations for the current plan year times one-half. For any plan participant who ends employment in accordance with section 4-34-31, 4-34-32, 4-34-33, 4-34-42, or 4-34-43, the cash balance account at the annuity commencement date shall not be less than the accumulated participant cash balance contributions and city cash balance plan allocations. For any plan participant who ends employment in accordance with section 4-34-34, the cash balance account shall at no point be less than the accumulated participant cash balance contributions. This provision may be referred to as the "preservation of principal." (Ord. No. 5573, § III, 12-16-2014)

Memphis Code of Ordinances § 4-34-15 Forfeitures.

Sec. 4-34-15. - Forfeitures. All forfeitures arising under this 2016 plan will be applied to reduce the contributions of the city to the plan and shall not be used to increase the 2016 plan benefits of any participant at any time prior to the termination of the 2016 plan. (Ord. No. 5573, § III, 12-16-2014)

Memphis Code of Ordinances § 4-34-16 Prohibition against interest.

Sec. 4-34-16. - Prohibition against interest. The city shall not have any right, claim or interest in the trust fund or in any contributions made to the trust fund, and this 2016 plan may not be amended to use the trust fund for any purpose other than the exclusive benefit of the participants and, where applicable, their spouses or children; provided the comptroller shall return any portion of a contribution which was made under a mistake of fact, provided such return is made within one year after such contribution is made. (Ord. No. 5573, § III, 12-16-2014)

Source: City of Memphis, Code of Ordinances and Charter and Related Laws (Municode Library, library.municode.com)URL: https://library.municode.com/tn/memphis/codes/code_of_ordinances?nodeId=TIT4PERESY_CH4-342016CABAPLDECOPL_ART3CABAPLCOFetched: 10/28/2026