BENEFITS GENERALLY

SJ-MC tit. 3, div. II, ch. 3.28, pt. 8

in effect

San José Municipal Code § 3.28.990 Compensation limitation.

3.28.990 - Compensation limitation. A. Notwithstanding any other law, except as provided in Subsection A.3 and B. below, for any person who becomes a member of this plan on or after January 1, 1996, the annual compensation taken into account under this plan shall be subject to the limitation set forth in Section 401(a)(17) of the Internal Revenue Code of 1986, as amended. 1. Effective with respect to plan years beginning on and after January 1, 1996, and before January 1, 2002, the annual compensation of a plan member which exceeds one hundred fifty thousand dollars (as adjusted for cost-of-living increases under Section 401(a)(17)(B) of the Internal Revenue Code) shall be disregarded for purposes of computing employee contributions to or benefits due from the retirement plan. Effective only for the 1996 plan year, in determining the compensation of an employee eligible for consideration under this provision, the rules of Section 414(g)(6) of the Internal Revenue Code shall apply, except that in applying such rules, the term "family" shall include only the spouse of the member and any lineal descendants of the employee who have not attained age nineteen before the close of the year. 2. Effective with respect to plan years beginning on and after January 1, 2002, the annual compensation of a plan member which exceeds two hundred thousand dollars (as adjusted for cost-of-living increases in accordance with Section 401(a)(17)(B) of the Internal Revenue Code) may not be taken into account in determining benefits or employee contributions due for any plan year. "Annual compensation" means compensation during the plan year or such other consecutive twelve-month period over which compensation is otherwise determined under the plan (the determination period). The cost-of-living adjustment in effect for a calendar year applies to annual compensation for the determination period that begins with or within such calendar year. If the determination period consists of fewer than twelve months, the annual compensation limit is an amount equal to the otherwise applicable annual compensation limit multiplied by a fraction, the numerator of which is the number of months in the short determination period, and the denominator of which is twelve. If the compensation for any prior determination period is taken into account in determining a plan member's contributions or benefits for the current plan year, the compensation for such prior determination period is subject to the applicable annual compensation limit in effect for that prior period. 3. As used in this Subsection A.3., the term "eligible member" means a person who first became a member of the retirement plan prior to January 1, 1996. Pursuant to Section 13212(d)(3)(A) of OBRA '93, and the regulations issued under that Section, eligible members are not subject to the limits of Section 401(a)(17) of the Internal Revenue Code and this section. B. In the event Section 401(a)(17) of the Internal Revenue Code is repealed, amended or qualified, by statute or otherwise, to relieve all or any members of this plan described in Subsection A. from the limitation set forth in Section 401(a)(17) of the Internal Revenue Code, then for those members no longer subject to the limitation, the annual compensation taken into account under the plan shall be calculated without such limitation. (Ords. 25001, 28885.)

San José Municipal Code § 3.28.995 Benefit limitations.

3.28.995 - Benefit limitations. A. Notwithstanding any other law, except as provided in Subsections B. and E. below, the benefits payable to any person who becomes a member of this system on or after January 1, 1990, shall be subject to the limitations set forth in Section 415 of the Internal Revenue Code as applied (other than paragraph (b)(2)(G)) without regard to paragraph (b)(2)(F) of said Section 415. B. Effective January 1, 1990, this paragraph shall apply only to persons who became a member of this system prior to January 1, 1990. For purposes of this paragraph, these members are referred to as "qualified participants." For a qualified participant, the 415(b) limit shall not be less than the accrued benefit of the member under this system determined without regard to any amendment of the plan made after October 14, 1987. C. For purposes of the application of Section 415(b) of the Internal Revenue Code, actuarial equivalences shall be based on the applicable interest rate and annuity tables as provided in Subsection E. below. D. The limitation year or period shall be the calendar year. E. Basic 415(b) limitation. 1. Before January 1, 1995, a member may not receive an annual benefit that exceeds the limits specified in Section 415(b) of the Internal Revenue Code, subject to the applicable adjustments in that section. On and after January 1, 1995, a member may not receive an annual benefit that exceeds the dollar amount specified in Section 415(b)(1)(A) of the Internal Revenue Code, subject to the applicable adjustments in Section 415(b) of the Internal Revenue Code and subject to any additional limits that may be specified in the retirement plan. In no event shall a member's benefit payable under the plan in any limitation year be greater than the limit applicable at the annuity starting date, as increased in subsequent years pursuant to Section 415(d) of the Internal Revenue Code and the regulations thereunder. 2. For purposes of Section 415(b) of the Internal Revenue Code, the "annual benefit" means a benefit payable annually in the form of a straight life annuity (with no ancillary benefits) without regard to the benefit attributable to after-tax employee contributions (except pursuant to Section 415(n) of the Internal Revenue Code) and to rollover contributions (as defined in Section 415(b)(2)(A) of the Internal Revenue Code). The "benefit attributable" shall be determined in accordance with treasury regulations. F. Adjustments to Basic 415(b) limitation for form of benefit. 1. If the benefit under the plan is other than the form specified in Subsection E.2., then the benefit shall be adjusted so that it is the equivalent of the annual benefit, using factors prescribed by treasury regulations. 2. If the form of benefit without regard to the automatic benefit increase feature is not a straight life annuity or a qualified joint and survivor annuity, then the preceding sentence is applied by either reducing the Section 415(b) of the Internal Revenue Code limit applicable at the annuity starting date or adjusting the form of benefit to an actuarially equivalent amount (determined using the assumptions specified in Treasury Regulation Section 1.415(b)-1(c)(2)(ii) that takes into account the additional benefits under the form of benefit as follows: a. For a benefit paid in a form to which Section 417(e)(3) of the Internal Revenue Code does not apply (a monthly benefit), the actuarially equivalent straight life annuity benefit that is the greater of: i. The annual amount of the straight life annuity (if any) payable to the member under the plan commencing at the same annuity starting date as the form of benefit to the member; or ii. The annual amount of the straight life annuity commencing at the same annuity starting date that has the same actuarial present value as the form of benefit payable to the member, computed using a five percent interest assumption (or the applicable statutory interest assumption) and (i) for years prior to January 1, 2008, the applicable mortality tables described in Treasury Regulation Section 1.417(e)-1(d)(2) (Revenue Ruling 2001-62 or any subsequent Revenue Ruling modifying the applicable provisions of Revenue Rulings 2001-62), and (ii) for years after December 31, 2007, the applicable mortality tables described in Section 417(e)(3)(B) of the Internal Revenue Code (Notice 2008-85 or any subsequent Internal Revenue Service guidance implementing Section 417(e)(3)(B) of the Internal Revenue Code); or b. For a benefit paid in a form to which Section 417(e)(3) of the Internal Revenue Code applies (such as a lump sum benefit), the actuarially equivalent straight life annuity benefit that is the greatest of: i. The annual amount of the straight life annuity commencing at the annuity starting date that has the same actuarial present value as the particular form of benefit payable, computed using the interest rate and mortality table, or tabular factor, specified in the plan for actuarial equivalence; ii. The annual amount of the straight life annuity commencing at the annuity starting date that has the same actuarial present value as the particular form of benefit payable, computed using a five and one- half percent interest assumption (or the applicable statutory interest assumption) and (i) for years prior to January 1, 2008, the applicable mortality table for the distribution under Treasury Regulation Section 1.417(e)-1(d)(2) (the mortality table specified in Revenue Ruling 2001-62 or any subsequent Revenue Ruling modifying the applicable provisions of Revenue Ruling 2001-62), and (ii) for years after December 31, 2007, the applicable mortality tables described in Section 417(e)(3)(B) of the Internal Revenue Code (Notice 2008-85 or any subsequent Internal Revenue Service guidance implementing Section 417(e)(3)(B) of the Internal Revenue Code); or iii. The annual amount of the straight life annuity commencing at the annuity starting date that has the same actuarial present value as the particular form of benefit payable (computed using the applicable interest rate for the distribution under Treasury Regulation Section 1.417(e)-1(d)(3) (the thirty-year Treasury rate (prior to January 1, 2007, using the rate in effect for the month prior to retirement, and on and after January 1, 2007, using the rate the in effect for the first day of the plan year with a one-year stabilization period)) and (i) for years prior to January 1, 2008, the applicable mortality rate for the distribution under Treasury Regulation Section 1.417(e)-1(d)(2) (the mortality table specified in Revenue Ruling 2001-62 or any subsequent Revenue Ruling modifying the applicable provisions of Revenue Ruling 2001-62), and (ii) for years after December 31, 2007, the applicable mortality tables described in Section 417(e)(3)(B) of the Internal Revenue Code (Notice 2008-85 or any subsequent Internal Revenue Service guidance implementing Section 417(e)(3)(B) of the Internal Revenue Code), divided by 1.05. G. Benefits for which no adjustment of 415(b) limit is required. For purposes of this section, the following benefits shall not be taken into account in adjusting these limits: 1. Any ancillary benefit which is not directly related to retirement income benefits; 2. That portion of any joint and survivor annuity that constitutes a qualified joint and survivor annuity; 3. Any other benefit not required under Section 415(b)(2) of the Internal Revenue Code and treasury regulations thereunder to be taken into account for purposes of the limitation of Section 415(b)(1) of the Internal Revenue Code. H. Other adjustments in 415(b) limitation. 1. In the event the member's retirement benefits become payable before age sixty-two, the limit prescribed by this section shall be reduced in accordance with treasury regulations pursuant to the provisions of Section 415(b) of the Internal Revenue Code, so that such limit (as so reduced) equals an annual straight life benefit (when such retirement income benefit begins) which is equivalent to a one hundred sixty thousand dollar (as adjusted) annual benefit beginning at age sixty-two, using assumptions described under the treasury regulations. 2. In the event the member's benefit is based on at least fifteen years of service as a full-time employee of any police or fire department or on fifteen years of military service, the adjustments provided for in Subsection H.1. above shall not apply. 3. The reductions provided for in Subsection H.1. above shall not be applicable to income received from a governmental plan (i) as a result of the recipient becoming disabled by reason of personal injuries or sickness or (ii) by the beneficiaries, survivors, or the estate of an employee as the result of the death of the employee. I. Less than ten years of participation adjustment for 415(b) limitations. The maximum retirement benefits payable to any member who has completed less than ten years of participation shall be the amount determined under Subsection E. multiplied by a fraction, the numerator of which is the number of the member's years of participation and the denominator of which is ten. The reduction provided by this subsection cannot reduce the maximum benefit below ten percent. The reduction provided for in this subsection shall not be applicable to pre-retirement disability benefits or pre-retirement death benefits. J. Ten thousand dollar limit. Notwithstanding the foregoing, the retirement benefit payable with respect to a member shall be deemed not to exceed the 415 limit if the benefits payable, with respect to such member under this plan and under all other qualified defined benefit pension plans to which the member's employer contributes, do not exceed ten thousand dollars for the applicable limitation year and for any prior limitation year and the employer has not any time maintained a qualified defined contribution plan in which the member participated. K. Effect of COLA without a lump sum component on 415(b) testing. 1. Effective on and after January 1, 2008, for purposes of applying the limits under Section 415(b) of the Internal Revenue Code (the "limit") to a member with no lump sum benefit, the following shall apply: a. A member's applicable limit shall be applied to the member's annual benefit in the member's first limitation year without regard to any cost of living adjustments under the provisions of Chapter 3.44; b. To the extent that the member's annual benefit equals or exceeds the limit, the member shall no longer be eligible for cost of living increases until such time as the benefit plus the accumulated increases are less than the limit; and c. Thereafter, in any subsequent limitation year, a member's annual benefit, including any cost of living increases under Chapter 3.44, shall be tested under the then applicable benefit limit including any adjustment to the Section 415(b)(1)(A) of the Internal Revenue Code dollar limit under Section 415(d) of the Internal Revenue Code, and the regulations thereunder. 2. Effect of COLA with a lump sum component on 415(b) testing. On and after January 1, 2008, with respect to a member who receives a portion of the member's annual benefit in a lump sum, a member's applicable limit shall be applied taking into consideration cost of living increases as required by Section 415(b) of the Internal Revenue Code and applicable treasury regulations. L. Section 415(c) limitations on contributions and other additions. After-tax member contributions or other annual additions with respect to a member may not exceed the lesser of forty thousand dollars (as adjusted pursuant to Section 415(d) of the Internal Revenue Code) or one hundred percent of the member's compensation. 1. Annual additions are defined to mean the sum (for any year) of employer contributions to a defined contribution plan, member contributions, and forfeitures credited to a member's individual account. Member contributions are determined without regard to rollover contributions and to picked-up employee contributions that are paid to a defined benefit plan. 2. For purposes of applying Section 415(c) of the Internal Revenue Code and for no other purpose, the definition of compensation where applicable shall be compensation actually paid or made available during a limitation year, except as noted below and as permitted by Treasury Regulation Section 1.415(c)-2, or successor regulation; provided, however, that member contributions picked up under Section 414(h) of the Internal Revenue Code shall not be treated as compensation. 3. Compensation shall be defined as wages within the meaning of Section 3401(a) of the Internal Revenue Code and all other payments of compensation to an employee by an employer for which the employer is required to furnish the employee a written statement under Sections 6041(d), 6051(a)(3) and 6052 of the Internal Revenue Code and shall be determined without regard to any rules under Section 3401(a) of the Internal Revenue Code that limit the remuneration included in wages based on the nature or location of the employment or the services performed (such as the exception for agricultural labor in Section 3401(a)(2) of the Internal Revenue Code). a. However, for limitation years beginning after December 31, 1997, compensation shall also include amounts that would otherwise be included in compensation but for an election under Section 125(a), 402(e)(3), 402(h)(1)(B), 402(k), or 457(b) of the Internal Revenue Code. For limitation years beginning after December 31, 2000, compensation shall also include any elective amounts that are not includible in the gross income of the member by reason of Section 132(f)(4) of the Internal Revenue Code. b. For limitation years beginning on and after January 1, 2008, compensation for the limitation year shall also include compensation paid by the later of two and one-half months after a member's severance from employment or the end of the limitation year that includes the date of the member's severance from employment if: i. The payment is regular compensation for services during the member's regular working hours, or compensation for services outside the member's regular working hours (such as overtime or shift differential), commissions, bonuses or other similar payments, and, absent a severance from employment, the payments would have been paid to the member while the member continued in employment with the employer; or ii. The payment is for unused accrued bona fide sick, vacation or other leave that the member would have been able to use if employment had continued; or iii. Payments pursuant to a nonqualified unfunded deferred compensation plan, but only if the payments would have been paid to the member at the same time if the member had continued employment with the employer and only to the extent that the payment is includible in the member's gross income. Any payments not described in Subparagraph b. above are not considered compensation if paid after severance from employment, even if they are paid within two and one-half months following severance from employment, except for payments to the individual who does not currently perform services for the employer by reason of qualified military service (within the meaning of Section 414(u)(1) of the Internal Revenue Code) to the extent these payments do not exceed the amounts the individual would have received if the individual had continued to perform services for the employer rather than entering qualified military service. An employee who is in qualified military service (within the meaning of Section 414(u)(1) of the Internal Revenue Code), shall be treated as receiving compensation from the employer during such period of qualified military service equal to (i) the compensation the employee would have received during such period if the employee were not in qualified military service, determined based on the rate of pay the employee would have received from the employer but for the absence during the period of qualified military service, or (ii) if the compensation the employee would have received during such period was not reasonably certain, the employee's average compensation from the employer during the twelve-month period immediately preceding the qualified military service (or, if shorter, the period of employment immediately preceding the qualified military service). c. Back pay, within the meaning of Treasury Regulation Section 1.415(c)-2(g)(8), shall be treated as compensation for the limitation year to which the back pay relates to the extent the back pay represents wages and compensation that would otherwise be included under this definition. 4. If the annual additions for any member for a plan year exceed the limitation under Section 415(c) of the Internal Revenue Code, the excess annual addition shall be corrected as permitted under the employee plans compliance resolution system (or similar IRS correction program). 5. For limitation years beginning on or after January 1, 2008, a member's compensation for purposes of this Subsection L. shall not exceed the annual limit under Section 401(a)(17) of the Internal Revenue Code. M. Service purchases under Section 415(n). Effective for permissive service credit contributions made in limitation years beginning after December 31, 1997, if a member makes one or more contributions to purchase permissive service credit under the retirement plan, then the requirements of Section 415(n) of the Internal Revenue Code shall be treated as met only if: 1. The requirements of Section 415(b) of the Internal Revenue Code are met, determined by treating the accrued benefit derived from all such contributions as an annual benefit for purposes of Section 415(b) of the Internal Revenue Code, or 2. The requirements of Section 415(c) of the Internal Revenue Code are met, determined by treating all such contributions as annual additions for purposes of Section 415(c) of the Internal Revenue Code. 3. For purposes of applying this section, the retirement plan shall not fail to meet the reduced limit under Section 415(b)(2)(C) of the Internal Revenue Code solely by reason of this paragraph and shall not fail to meet the percentage limitation under Section 415(c)(1)(B) of the Internal Revenue Code solely by reason of this Section. 4. For purposes of this section the term "permissive service credit" means service credit: a. Recognized by the retirement plan for purposes of calculating a member's benefit under the retirement plan; b. Which such member has not received under the retirement plan; and c. Which such member may receive only by making a voluntary additional contribution, in an amount determined under the retirement plan, which does not exceed the amount necessary to fund the benefit attributable to such service credit. Effective for permissive service credit contributions made in limitation years beginning after December 31, 1997, such term may include service credit for periods for which there is no performance of service, and, notwithstanding Subparagraph b., may include service credited in order to provide an increased benefit for service credit which a member is receiving under the retirement plan. 5. The retirement plan shall fail to meet the requirements of this section if: a. More than five years of nonqualified service credit are taken into account for purposes of this Subsection M.; or b. Any nonqualified service credit is taken into account under this Subsection M. before the member has at least five years of participation under the retirement plan. 6. For purposes of Paragraph 5., effective for permissive service credit contributions made in limitation years beginning after December 31, 1997, the term "nonqualified service credit" means permissive service credit other than that allowed with respect to: a. Service (including parental, medical, sabbatical, and similar leave) as an employee of the government of the United States, any state or political subdivision thereof, or any agency or instrumentality of any of the foregoing (other than military service or service for credit which was obtained as a result of a repayment described in Section 415(k)(3) of the Internal Revenue Code); b. Service (including parental, medical, sabbatical, and similar leave) as an employee (other than as an employee described in Subparagraph a. of an education organization described in Section 170(b)(1)(A)(ii) of the Internal Revenue Code which is a public, private, or sectarian school which provides elementary or secondary education (through grade twelve), or a comparable level of education, as determined under the applicable law of the jurisdiction in which the service was performed; c. Service as an employee of an association of employees who are described in Subparagraph a.; or d. Military service (other than qualified military service under Section 414(u) of the Internal Revenue Code) recognized by the retirement plan. In the case of service described in Subparagraph a., b., or c., such service shall be nonqualified service if recognition of such service would cause a member to receive a retirement benefit for the same service under more than one plan. 7. In the case of a trustee-to-trustee transfer after December 31, 2001, to which Section 403(b)(13)(A) of the Internal Revenue Code or Section 457(e)(17)(A) of the Internal Revenue Code applies (without regard to whether the transfer is made between plans maintained by the same employer): a. The limitations of Paragraph 5. shall not apply in determining whether the transfer is for the purchase of permissive service credit; and b. The distribution rules applicable under federal law to the retirement plan shall apply to such amounts and any benefits attributable to such amounts. 8. For an eligible member, the limitation of Section 415(c)(1) of the Internal Revenue Code shall not be applied to reduce the amount of permissive service credit which may be purchased to an amount less than the amount which was allowed to be purchased under the retirement plan as in effect on August 5, 1997. For purposes of this paragraph, an eligible member is an individual who first became a member in the retirement plan before January 1, 1998. N. Modification of contributions for 415(c) and 415(n) purposes. Notwithstanding any other provision of law to the contrary, the retirement plan may modify a request by a member to make a contribution to the retirement plan if the amount of the contribution would exceed the limits provided in Section 415 of the Internal Revenue Code by using the following methods: 1. If the law requires a lump sum payment for the purchase of service credit, the retirement plan may establish a periodic payment plan for the member to avoid a contribution in excess of the limits under Section 415(c) or 415(n) of the Internal Revenue Code. 2. If payment pursuant to Paragraph 1. shall not avoid a contribution in excess of the limits imposed by Section 415(c) or 415(n) of the Internal Revenue Code, the retirement plan may either reduce the member's contribution to an amount within the limits of those sections or refuse the member's contribution. O. Repayments of cashouts. Any repayment of contributions (including interest thereon) to the retirement plan with respect to an amount previously refunded upon a forfeiture of service credit under the retirement plan or another governmental plan maintained by the city shall not be taken into account for purposes of Section 415 of the Internal Revenue Code, in accordance with applicable treasury regulations. P. Participation in other qualified plans; aggregation of limits. 1. The 415(b) limit with respect to any member who at any time has been a member in any other defined benefit plan as defined in Section 414(j) of the Internal Revenue Code maintained by the city shall apply as if the total benefits payable under all such defined benefit plans in which the member has been a member were payable from one plan. 2. The 415(c) limit with respect to any member who at any time has been a member in any other defined contribution plan as defined in Section 414(i) of the Internal Revenue Code maintained by the city shall apply as if the total annual additions under all such defined contribution plans in which the member has been a member were payable from one plan. Q. Reduction of benefits priority. Reduction of benefits and/or contributions to all plans, where required, shall be accomplished by first reducing the member's benefit under any defined benefit plans in which the member participated, such reduction to be made first with respect to the plan in which the member most recently accrued benefits and thereafter in such priority as shall be determined by the plan and the plan administrator of such other plans, and next, by reducing or allocating excess forfeitures for defined contribution plans in which the member participated, such reduction to be made first with respect to the plan in which the member most recently accrued benefits and thereafter in such priority as shall be established by the plan and the plan administrator for such other plans provided, however, that necessary reductions may be made in a different manner and priority pursuant to the agreement of the plan and the plan administrator of all other plans covering such member. (Ords. 23283, 27838, 28885.)

San José Municipal Code § 3.28.1000 Benefits for portions of years.

3.28.1000 - Benefits for portions of years. Whenever any person becomes entitled under the provisions of this system to any annual allowance, the annual allowance shall be deemed payable for each calendar year in which he is entitled to such allowance throughout the entire calendar year; provided and excepting, however, that if he is entitled to such allowance for only a portion of a calendar year, he shall be deemed entitled only to such portion of the annual allowance for such calendar year as the number of days during which he was entitled to such allowance in such year bears to the total number of days in such year. (Prior code § 2904.1350.)

San José Municipal Code § 3.28.1010 Annual allowances payable in installments.

3.28.1010 - Annual allowances payable in installments. Each annual allowance or portion thereof to which any person may become entitled under the provisions of this system during a calendar year shall be payable in equal monthly installments (or in equal biweekly installments if the city should ever elect to pay in biweekly installments); provided and excepting, however, that if the person entitled to any such allowance for any such installment period is entitled to it only for a portion of such installment period, he shall be entitled only to that portion of the allowance for such installment period as the number of days for which he is entitled to an allowance in such period bears to the number of days in such period. (Prior code § 2904.1351.)

San José Municipal Code § 3.28.1015 Minimum distribution requirements.

3.28.1015 - Minimum distribution requirements. A. Notwithstanding any other provision of this chapter, the distribution of a retirement benefit shall be subject to a good faith interpretation of the minimum distribution rules of Section 401(a)(9) of the Internal Revenue Code and the regulations promulgated thereunder, as applicable to a governmental plan within the meaning of section 414(d) of the Internal Revenue Code. In compliance with these provisions, payment of a member's retirement allowance shall commence no later than the later of the following: 1. The April 1 following the end of the calendar year in which the member attains age seventy and one-half; or 2. The April 1 following the end of the calendar year in which the member retires. If a member fails to apply for retirement benefits by the later of either of those dates, the board shall begin distribution of the monthly benefit in the form provided under the applicable provision of Section 3.28.1110. B. The member's entire interest must be distributed over the member's life or the lives of the member and a designated beneficiary, or over a period not extending beyond the life expectancy of the member, or of the member and a designated beneficiary. C. For purposes of this section, the retirement plan pursuant to a qualified domestic relations order, may establish separate benefits for a member and nonmember. D. If a member dies after the required distribution of benefits has begun, the remaining portion of the member's interest must be distributed at least as rapidly as under the method of distribution before the member's death. E. If a member dies before required distribution of the member's benefits has begun, the member's entire interest must be distributed within five years of his death, unless it is to be distributed in accordance with the following rules: 1. If the member's surviving spouse is the sole designated beneficiary, the member's remaining interest in the plan is distributed or begins to be distributed by December 31 of the calendar year immediately following the calendar year in which the member died or by December 31 of the calendar year in which the participant would have attained age seventy and one-half, if later, and if the surviving spouse dies before the distribution to the surviving spouse begins, this section shall be applied as if the surviving spouse were the plan member; or 2. If the member's surviving spouse is not the sole designated beneficiary, the member's remaining interest is to be distributed over the life of the designated beneficiary or over a period not extending beyond the life expectancy of the designated beneficiary; and such distribution begins no later than December 31 of the calendar year immediately following the calendar year of the member's death. F. The amount of an annuity paid to a member's beneficiary may not exceed the maximum determined under the incidental death benefit requirement of Section 401(a)(9)(G) of the Internal Revenue Code, and the minimum distribution incidental benefit rule under Treasury Regulation Section 1.401(a)(9)-6, Q&A-2. G. The death and disability benefits provided by the retirement system are limited by the incidental benefit requirement set forth in Section 401(a)(9)(G) of the Internal Revenue Code and Treasury Regulation Section 1.401-1(b)(1)(i) or any successor regulation thereto. These incidental death and disability benefits include any lump sum death benefits and any disability benefits. As a result, the total death or disability benefits payable may not exceed twenty-five percent of the cost for all of the members' benefits received from the retirement plan. H. Notwithstanding the other provisions of this rule or the provisions of the treasury regulations, benefit options may continue so long as the option satisfies Section 401(a)(9) of the Internal Revenue Code based on a reasonable and good faith interpretation of that section. I. Notwithstanding any other provision of this chapter, if a member has elected an optional settlement under Part 13 of this chapter and the designated beneficiary is not the spouse of the member, the periodic amounts payable to the member and the designated beneficiary shall be adjusted only to the extent necessary to ensure that the minimum distribution requirements of Internal Revenue Code Section 401(a)(9) are satisfied. (Ords. 27838, 28885.)

San José Municipal Code § 3.28.1020 Determining years of service in which member is entitled to credit in determining amount of benefits payable.

3.28.1020 - Determining years of service in which member is entitled to credit in determining amount of benefits payable. Whenever, in determining the amount of an allowance or other benefit payable under this system, consideration must be given to the years of federated city service to which a member is entitled to credit under this system, no consideration shall be given to number of years to which he is entitled to credit under this system for the purpose of qualification for benefits only and not for the purpose of determining the amount of benefits to which a person may become entitled hereunder. (Prior code § 2904.1352.)

San José Municipal Code § 3.28.1025 Forfeitures.

3.28.1025 - Forfeitures. A. In the event of a forfeiture of benefits arising from separation from employment, death, or any other reason, the amount of such forfeiture shall remain in the retirement fund and shall not be applied to increase the benefits any member, former member or beneficiary of the plan would otherwise be entitled to receive prior to the termination of the plan. B. The amounts forfeited shall be used to reduce the city's contributions to the plan; provided, however, that the effect of forfeitures may be anticipated in the determination of the liabilities of the plan. (Ord. 27838.)

San José Municipal Code § 3.28.1030 Assignment of rights and benefits.

3.28.1030 - Assignment of rights and benefits. A. All rights or benefits which any person may have or may become entitled to in or under this system, or in or to any moneys in the system, are not assignable except as specifically provided in this chapter or as specified in Subsection B. B. Voluntary deductions which are permitted by rules and regulations approved by the board of administration of the federated city employees retirement system may be made from pension benefits payments where authorized in writing by the benefit payee. (Prior code § 2904.1353; Ord. 29035.)

San José Municipal Code § 3.28.1040 Integration of worker's compensation benefits.

3.28.1040 - Integration of worker's compensation benefits. A. No allowances or benefits payable under this system shall be modified because of any worker's compensation benefits which may become payable under the laws of the State of California to any member or to any recipient of any allowance or benefit payable under this system except as provided in subsection B. of this section. B. In the event a member is retired for a service-connected disability pursuant to Part 10 of this chapter and receives both a service-connected disability retirement allowance and a workers' compensation benefit for temporary disability, permanent disability or vocational rehabilitation temporary disability pursuant to Division 1 or Division 4 of the California Labor Code, then the service-connected disability retirement allowance shall be offset by the sum of all such workers' compensation benefits as follows: 1. The offset shall apply only to the following persons: a. Those persons whose application for a service-connected disability retirement was filed, by any person authorized in Section 3.28.1230 to file such application, on or after July 13, 1986; and b. Those persons retired on the retirement board's own motion, pursuant to Section 3.28.1220, on or after July 13, 1986. 2. The applicable amount of the workers' compensation benefits shall be converted to a monthly equivalent. The monthly service-connected disability retirement allowance shall be reduced by the workers' compensation benefit monthly equivalent. 3. The offset shall be in effect only during such time as concurrent retirement allowances and workers' compensation benefits are paid. In the case of the payment of a lump sum workers' compensation benefit (excluding payments for medical treatment), the offset shall apply only for such period of time as concurrent payments would have been made had the workers' compensation benefit been paid in installments. 4. In no case shall the offset reduce the service-connected disability retirement allowance to an amount less than the sum of the maximum retired member contributions for medical, dental, life, and accidental death insurance premiums, as determined by the city, plus one dollar. This limitation shall apply regardless of whether the retired member actually contributes toward the payment of such premiums. 5. No offset shall be made for permanent disability benefits paid to any retired member of this system who has received a workers' compensation permanent disability rating of one hundred percent. 6. The offset shall not apply with respect to workers' compensation benefits paid for any injury or illness which did not cause or contribute to the disability for which the service-connected disability retirement was granted. (Prior code § 2904.1354; Ord. 22245.)

San José Municipal Code § 3.28.1050 Release or relinquishment of rights and benefits - Assignments to city.

3.28.1050 - Release or relinquishment of rights and benefits - Assignments to city. A. Anything elsewhere in this Chapter 3.28 or in any other part of the San José Municipal Code to the contrary notwithstanding, any right, title or interest which any member of this retirement system, or any other person or persons, may have or may claim to have in or to any retirement or other allowance or in or to any benefit or benefits whatsoever, or in or to any moneys whatsoever, or any other right, title or interest which any person or persons may have or claim to have, under or by virtue of the provisions of this retirement system, whether such right, title or interest is vested, contingent or otherwise, may be released, relinquished and given up by such member or by such other person or persons, or may be assigned to the City of San José or to the retirement system or retirement board by such member or other person or persons; and upon such being done, the right, title or interest which is so released, relinquished, given up or assigned is and shall be deemed extinguished, the same as if such right, title or interest had never existed, and neither the city nor this retirement system or retirement board shall thereafter have any liability whatsoever with respect to the right, title or interest so released, extinguished or given up or assigned. B. However, if and to the extent that the city pays or gives any consideration, other than funds of this retirement system, for any abovementioned release, relinquishment, giving up or assignment, the amount or value of the consideration paid or given by the city for said release, relinquishment, giving up or assignment, or the actuarial value of the right, title or interest which is so released, relinquished, given up or assigned as of the date of such release, relinquishment, giving up or assignment, whichever is the lesser amount, shall be credited against and deducted from the amount of current service contributions which the city is required to pay into the retirement fund during the following calendar months until full credit therefor is thus received by the city. (Prior code § 2904.1355.)

San José Municipal Code § 3.28.1060 Options for certain former employees of city health department and city communications department.

3.28.1060 - Options for certain former employees of city health department and city communications department. The provisions of this section apply only to former employees of the city health department and former employees of the city communications department who heretofore exercised the options given to them by the provisions of Part 21 or 22 of the Chapter 3.24 retirement system and who thereby became entitled to such rights as are given to them under said Part 21 or 22. Each of said persons who should become a member of this system shall have the right to elect, before or at the time he first applies for any benefits under this system, to become entitled to and to receive in lieu of any and all benefits which he or his survivors or any other person or estate may become entitled to under other sections of this Chapter 3.28, such benefits as he would be entitled to under the Chapter 3.24 retirement system, as it read on June 30, 1975, if he were still a member of the Chapter 3.24 system and service rendered and contributions paid by him while a member of this system were deemed to be service rendered and contributions paid by him under the Chapter 3.24 retirement system. (Prior code § 2904.1356.)

San José Municipal Code § 3.28.1070 Payment to member's estate of balance of accumulated contributions where benefits paid and payable under other provisions are less than such contributions.

3.28.1070 - Payment to member's estate of balance of accumulated contributions where benefits paid and payable under other provisions are less than such contributions. If in the event of the death before retirement of a member the sum of any and all moneys thereupon and thereafter paid or payable under other provisions of this system to any and all of his survivors and/or estate should be less than the amount of accumulated contributions and interest standing to his credit; or if in the event of his death after retirement the sum of any and all moneys theretofore paid or payable under other provisions of this system to such member because of his retirement plus the sum of any and all moneys thereupon and thereafter paid or payable under other provisions of this system to any and all of his survivors and/or estate should be less than the amount of accumulated contributions and interest standing to such member's credit, then in either of said events the difference between the total of said sums paid or payable under other provisions of this system and the amount of said accumulated contributions and interest shall be paid to said member's estate. (Prior code § 2904.1357.)

San José Municipal Code § 3.28.1080 Vesting.

3.28.1080 - Vesting. A. A member shall be one hundred percent (100%) vested in his or her service retirement benefit upon attaining eligibility for a service retirement benefit under the applicable provisions of the Retirement System. Notwithstanding the foregoing, a Tier 2 member shall be vested in his or her service retirement benefit upon completion of five (5) years of service unless a subsequent withdrawal or payment of his or her member contributions occurs or another forfeiture event under the terms of the Plan occurs. B. A Plan member shall be one hundred percent (100%) vested in his or her accumulated contributions at all times. C. An affected Plan member shall be one hundred percent (100%) vested in his or her accrued benefit, to the extent then funded, in the event the Retirement System is terminated in whole or in part or contributions are completely discontinued. D. For purposes of this Section 3.28.1080, "vested" shall mean the nonforfeitable right to the benefit that the member has accrued. E. Nothing contained in this Section 3.28.1080 shall be construed or interpreted to limit modification of benefits, to the extent that such modification is otherwise allowed under federal and state law. F. Any changes to Tier 2 retirement or post-employment benefits enacted after those adopted on June 16, 2017 that result in benefit increases or decreases shall only be applied prospectively and except for the changes adopted on June 16, 2017 shall not have retroactive effect. All such changes shall be subject to applicable California pension and other laws. Without limitation of any type, the City shall have the right to make any modifications, alterations or amendments necessary or appropriate to maintain the tax qualification of the benefits provided under this Retirement System to Tier 2 members. (Ords. 28885, 29120, 29904.)

San José Municipal Code § 3.28.1090 Compliance with USERRA and the HEART Act.

3.28.1090 - Compliance with USERRA and the HEART Act. A. Effective December 12, 1994, notwithstanding any other provision of the retirement system law, contributions, benefits and service credit with respect to qualified military service are governed by Section 414(u) of the Internal Revenue Code and the Uniformed Services Employment and Reemployment Rights Act of 1994. B. Effective with respect to deaths occurring on or after January 1, 2007, while a member is performing qualified military service (as defined in 38 U.S.C. 43, to the extent required by Section 401(a)(37) of the Internal Revenue Code, survivors of a member in the retirement plan, are entitled to any additional benefits that the retirement plan would provide if the member had resumed employment and then died (as a non-service connected death) that are contingent on the member's death while employed. In any event, a deceased member's period of qualified military service must be counted for vesting purposes, but such period of service shall not be counted for benefit accrual purposes. C. Beginning January 1, 2009, to the extent required Section 414(u)(12) of the Internal Revenue Code, an individual receiving a differential wage payment (as defined under Section 3401(h)(2) of the Internal Revenue Code) from an employer shall be treated as employed by that employer, and the differential wage payment shall be treated as compensation for purposes of applying the limits on annual additions under Section 415(c) of the Internal Revenue Code. This provision shall be applied to all similarly situated individuals in a reasonably equivalent manner. (Ord. 28885.)

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_PT8BEGEFetched: 11/1/2026