§ 46-44. Minimum distribution of benefits.

(a)

General rules.

(1)

Effective date. Effective as of January 1, 1989, the plan will pay all benefits in accordance with a good faith interpretation of the requirements of Code Section 401(a)(9) and the regulations in effect under that section, as applicable to a governmental plan within the meaning of Code Section 414(d). Effective on and after January 1, 2003, the plan is also subject to the specific provisions contained in this section. The provisions of this section will apply for purposes of determining required minimum distributions for calendar years beginning with the 2003 calendar year.

(2)

Precedence. The requirements of this section will take precedence over any inconsistent provisions of the plan.

(3)

TEFRA Section 242(b)(2) Elections. Notwithstanding the other provisions of this Section other than this subsection (a)(3), distributions may be made under a designation made before January 1, 1984, in accordance with Section 242(b)(2) of the Tax Equity and Fiscal Responsibility Act (TEFRA) and the provisions of the plan that related to Section 242(b)(2) of TEFRA.

(b)

Time and manner of distribution.

(1)

Required beginning date. The participant's entire interest will be distributed, or begin to be distributed, to the participant no later than the participant's required beginning date which shall not be later than April 1 of the calendar year following the later of the calendar year in which the participant attains age 70½ or the calendar year in which the participant terminates employment with the city.

(2)

Death of participant before distributions begin. If the participant dies before distributions begin, the participant's entire interest will be distributed, or begin to be distributed no later than as follows:

a.

If the participant's surviving spouse is the participant's sole designated beneficiary, then distributions to the surviving spouse will begin by December 31 of the calendar year immediately following the calendar year in which the participant died, or by a date on or before December 31 of the calendar year in which the participant would have attained age 70 ½, if later.

b.

If the participant's surviving spouse is not the participant's sole designated beneficiary, then, distributions to the designated beneficiary will begin by December 31 of the calendar year immediately following the calendar year in which the participant died.

c.

If there is no designated beneficiary as of September 30 of the year following the year of the participant's death, the Participant's entire interest will be distributed by December 31 of the calendar year containing the fifth anniversary of the participant's death.

d.

If the participant's surviving spouse is the participant's sole designated beneficiary and the surviving spouse dies after the participant but before distributions to the surviving spouse begin, this subsection (b)(2), other than subsection (b)(2)a., will apply as if the surviving spouse were the participant.

For purposes of this subsection (b)(2), distributions are considered to begin on the participant's required beginning date or, if subsection (b)(2)d. applies, the date of distributions are required to begin to the surviving spouse under subsection (b)(2)a. If annuity payments irrevocably commence to the participant before the participant's required beginning date (or to the participant's surviving spouse before the date distributions are required to begin to the surviving spouse under subsection (b)(2)a.) the date distributions are considered to begin is the date distributions actually commence.

(3)

Death after distributions begin. If the participant dies after the required distribution of benefits has begun, the remaining portion of the participant's interest must be distributed at least as rapidly as under the method of distribution before the participant's death.

(4)

Form of distribution. Unless the participant's interest is distributed in the form of an annuity purchased from an insurance company or in a single sum on or before the required beginning date, as of the first distribution calendar year distributions will be made in accordance with this section. If the participant's interest is distributed in the form of an annuity purchased from an insurance company, distributions there under will be made in accordance with the requirements of Section 401(a)(9) of the Code and Treasury regulations. Any part of the participant's interest which is in the form of an individual account described in Section 414(k) of the Code will be distributed in a manner satisfying the requirements of Section 401(a)(9) of the Code and Treasury regulations that apply to individual accounts.

(c)

Determination of amount to be distributed each year.

(1)

General requirements. If the participant's interest is paid in the form of annuity distributions under the Plan, payments under the annuity will satisfy the following requirements:

a.

The annuity distributions will be paid in periodic payments made at intervals not longer than one year.

b.

The participant's entire interest must be distributed pursuant to section 46-33, section 46-34, section 46-36, or section 46-37 (as applicable) and in any event over a period equal to or less than the participant's life or the lives of the participant and a designated beneficiary, or over a period not extending beyond the life expectancy of the participant or of the participant and a designated beneficiary. The life expectancy of the participant, the participant's spouse, or the participant's beneficiary may not be recalculated after the initial determination for purposes of determining benefits.

(2)

Amount required to be distributed by required beginning date. The amount that must be distributed on or before the participant's required beginning date (or, if the participant dies before distributions begin, the date distributions are required to begin under section 46-34) is the payment that is required for one payment interval. The second payment need not be made until the end of the next payment interval even if that payment interval ends in the next calendar year. Payment intervals are the periods for which payments are received, e.g., monthly, . All of the participant's benefit accruals as of the last day of the first distribution calendar year will be included in the calculation of the amount of the annuity payments for payment intervals ending on or after the participant's required beginning date.

(3)

Additional accruals after first distribution calendar year. Any additional benefits accruing to the participant in a calendar year after the first distribution calendar year will be distributed beginning with the first payment interval ending in the calendar year immediately following the calendar year in which such amount accrues.

(d)

General distribution rules.

(1)

The amount of an annuity paid to a participant's beneficiary may not exceed the maximum determined under the incidental death benefit requirement of Code Section 401(a)(9)(G), and effective for any annuity commencing on or after January 1, 2008, the minimum distribution incidental benefit rule under Treasury Regulation Section 1.401(a)(9)-6, Q&A-2.

(2)

The death and disability benefits provided by the plan are limited by the incidental benefit rule set forth in Code Section 401(a)(9)(G) and Treasury Regulation Section 1.401-1(b)(1)(I) or any successor regulation thereto. As a result, the total death or disability benefits payable may not exceed 25 percent of the cost for all of the participants' benefits received from the retirement system.

(e)

Definitions.

(1)

Designated beneficiary. The individual who is designated as the beneficiary under the Plan and is the designated beneficiary under Section 40l(a)(9) of the Code and Section 1.401(a)(9)-1, Q&A-4, of the Treasury regulations.

(2)

Distribution calendar year. A calendar year for which a minimum distribution is required. For distributions beginning before the participant's death, the first distribution calendar year is the calendar year immediately preceding the calendar year which contains the participant's required beginning date. For distributions beginning after the participant's death, the first distribution calendar year is the calendar year in which distributions are required to begin pursuant to section 46-34.

(Ord. No. 02-2005, § 1, 2-7-2005; Ord. No. 34-2007, § 3, 1-22-2008; Ord. No. 20-2010, § 13, 10-18-2010; Ord. No. 17-2016, § 7, 5-16-2016)