§ 18-35. Limitation on benefits.

(a)

In no event may a member's annual benefit exceed the lesser of:

(1)

One hundred sixty thousand dollars ($160,000.00) adjusted for cost of living in accordance with Internal Revenue Code (IRC) section 415(d), but only for the year in which such adjustment is effective, or

(2)

One hundred (100) percent of the average annual compensation for the member's three (3) highest paid consecutive years; however, benefits of up to ten thousand dollars ($10,000.00) a year can be paid without regard to the limitation of one hundred (100) percent if the total retirement benefits payable to a member under all defined benefit plans, as defined in IRC section 414(j), maintained by the city for the present and any prior year do not exceed ten thousand dollars ($10,000.00) and the city has not at any time maintained a defined contribution plan, as defined in IRC section 414(i), in which the employee was a member.

(b)

If the member has less than ten (10) years of service with the city, as defined in IRC section 415(b)(5) and as modified by IRC section 415(b)(6)(D), the applicable limitations in subsections (a)(1) and (2) of this section shall be reduced by multiplying such limitation by a fraction, not to exceed one (1). The numerator of such fraction shall be the number of years, or parts thereof, of service with the city; the denominator shall be ten (10) years.

(c)

For purposes of this section, the annual benefit means a benefit payable annually in the form of a straight life annuity with no ancillary or incidental benefits and with no member or rollover contributions. To the extent that ancillary benefits are provided, the limits set forth in subsections (a)(1) and (2) of this section will be reduced actuarially, using an interest rate assumption equal to the greater of five (5) percent or the interest rate used in the most recent annual actuarial valuation, to reflect such ancillary benefits.

(d)

If distribution of retirement benefits begins before age sixty-two (62) years, the dollar limitation as described in subsection (a)(1) of this section shall be reduced actuarially using an interest rate assumption equal to the greater of five (5) percent or the interest rate used in the most recent annual actuarial valuation; however, retirement benefits shall not be reduced below seventy-five thousand dollars ($75,000.00) if payment of benefits begins at or after age fifty-five (55) years and not below the actuarial equivalent of seventy-five thousand dollars ($75,000.00) if payment of benefits begins before age fifty-five (55) years. If retirement benefits begin after age sixty-five (65) years, the dollar limitation of subsection (a)(1) of this section shall be increased actuarially using an interest assumption equal to the lesser of five (5) percent or the interest rate used in the most recent annual actuarial valuation. For purposes of this section, the average annual compensation for a member's three (3) highest paid consecutive years shall mean the member's greatest aggregate compensation during the period of three (3) consecutive years in which the individual was an active member of the system.

(Ord. No. 1386, § 4, 2-19-86; Ord. No. 1416, § 6(n), 8-27-86; Ord. No. 2308, § 2, 10-29-2003)