Chapter 2-20 Pension Plan for General Employees

There is hereby established a pension plan for general employees employed by the city on or before May 30, 2000 (“plan”). This plan covers all full-time employees as defined in section 2-14-020, B.M.C., except any employee who signed an irrevocable waiver transferring the greater of (1) the vested actuarial equivalent of his or her accrued benefit or (2) his or her accumulated contributions to the money purchase plan for general employees and any employee covered under the police pension plan for

“old hire” police officers, the money purchase plan for “new hire” peace officers, the State of Colorado Fire and Police Pension Plan, or under any other firemen's or policemen's pension plans. The plan supersedes all previous defined benefit plans for general employees, whether such plans were established by ordinance, resolution, or otherwise. (Ord. 1121 §1, 1995; Ord. 1450 §1, 2000; Ord. 1666 §2, 2002)

(A) The purpose of this plan is to provide retirement and incidental benefits for regular, full-time employees of the employer who meet eligibility requirements. The benefits provided by this plan will be paid from a trust established by the employer and will be in addition to the benefits employees are entitled to receive under any other programs of the employer and from the Federal Social Security Act.

(B) The plan is established and shall be maintained for the exclusive benefit of the eligible employees of the employer and their beneficiaries. No part of the plan assets shall revert to the employer, except as provided in this chapter, or be used for or diverted to purposes other than the exclusive benefit of the employees of the employer and their beneficiaries. (Ord. 1121 §1, 1995; Ord. 1450 §1, 2000)

(B) Actuarial (or actuarially) equivalent means equality in value of the aggregate amounts expected to be received under different forms of payment based on interest rate and mortality assumptions as defined below unless otherwise specifically provided in the plan:

(3) Mortality assumption. The mortality assumption for calculations based upon the mortality of an employee or beneficiary will be a unisex rate that is 50% male, 50% female, taken from the 1983 Group Annuity Table. Said mortality assumption will be used until change by plan amendment.

a. Notwithstanding any other Plan provisions to the contrary, the applicable mortality table used for purposes of adjusting any benefit or limitation under Code section 415(b)(2)(B), (C), or (D) and the applicable mortality table used for purposes of satisfying the requirements of Code section 417(e) is the table described in Revenue Ruling 2001-62.

b. For any distribution with an annuity starting date on or after the effective date of this section and before the adoption of this section, if application of the amendment as of the annuity starting date would have caused a reduction in the amount of any distribution, such reduction is not reflected in any payment made before the adoption date of this section. However, the amount of any such reduction that is required under Code section 415(b)(2) must be reflected actuarially over any remaining payments to the Participant.

(D) Average monthly compensation for participants eligible to receive Level II benefits means the result obtained by dividing the total compensation paid to an employee during a considered period by sixty months. The considered period shall be the five consecutive calendar years within the last ten calendar years of employment which yield the highest average compensation.

(E) Average monthly compensation for participants eligible to receive Level I benefits means the result obtained by dividing the total compensation paid to an employee during a considered period by thirty-six months. The considered period shall be the three consecutive calendar years within the last ten calendar years of employment which yield the highest average compensation.

(F) Beneficiary means the person designated by the employee who shall receive any benefits payable hereunder in the event of the employee's death. The designation of such beneficiary will be in writing to the employer, who will notify the trustee.

(I) Compensation means the base salary or wages, including employee contributions that are picked up by the employer pursuant to Code section 414(h), but not including overtime, on-call, holiday, paid-out leave or other extra pay or bonuses, paid or made available by the employer to an employee for personal services rendered in the course of employment with the employer. Compensation shall be determined before applying any salary reduction agreed to by the employee pursuant to a plan described in sections 457, 403(b), 125, 132(f)(4) or 414(h) of the Code or any pre-tax contributions made by an employee to an employee welfare benefit plan providing benefits under a health reimbursement arrangement. Effective January 1, 2005, the amount of an employee's compensation for purposes of the plan during any plan year shall not exceed $210,000.00, as adjusted for cost-of-living increases in accordance with section 401(a)(17)(B) of the Code.

(J) Disability means a physical or mental condition which, in the judgment of the committee, totally and presumably permanently prevents the employee from engaging in any substantial gainful employment. A determination of disability shall be based upon competent medical evidence satisfactory to the committee. The committee shall apply the rules with respect to disability uniformly and consistently to all employees in similar circumstances.

(K) Employee means any full-time employee as defined in section 2-14-020, B.M.C., except any general employee hired on or after May 31, 2000, any employee who signed an irrecoverable waiver transferring the greater of (1) the vested actuarial equivalent of his or her accrued benefit or (2) his or her accumulated contributions to the money purchase plan for general employees, and any employee covered under the Police Pension Plan for “old hire” police officers, the money purchase plan for “new hire” police officers, the State of Colorado Fire and Police Pension Plan, or under any other firemen's or policemen's pension plans.

(L) Employee contribution account (or accumulated contributions) means the bookkeeping account maintained for each employee reflecting the cumulative amount of the employee's mandatory contributions. The employee contribution account will earn interest at the rate of 5%. Interest will be calculated as of the last day of each calendar quarter based on the prior quarter ending balance, minus any withdrawals during the quarter, plus 50% of the current quarter mandatory employee contributions.

(R) Retirement means termination of employment after an employee has fulfilled all requirements for an immediate or deferred payment of a pension. Retirement shall be considered as commencing on the day immediately following an employee's last day of employment, or authorized leave of absence, if later. This date shall be considered the employee's retirement date.

(2) Effective September 1, 2003, an employee may purchase service credit for purposes of determining the participant's accrued benefit under this plan. The only service for which credit may be purchased under this plan is service with the employer on a part-time basis, as defined in subsection 2-14-020(Y), B.M.C. Service as a temporary employee or independent contractor, as determined by the employer, may not be used to purchase service credit. An employee may purchase up to fifty percent of the length of time served in part-time service with the employer. Service credit may be purchased as permitted under Code section 415(n)(3), and its price will be determined by the plan's actuary, but will not exceed the amount necessary to fund the benefit attributable to the service credit. Service credit may be purchased through a trustee-to-trustee transfer from a Code section 403(b) or 457 plan permitting such transfers, a rollover from an IRA

or qualified plan of vested benefits, after-tax payments, or by a voluntary transfer of vested accrued benefits from the money purchase plan for general employees. If installment payments are made, service will be credited only after all installment payments have been made.

(3) Any reference in this plan to the number of years of service of an employee will be deemed to include fractional portions of a year rounded to the nearest thousandth; for example, if an employee works nine years and six months, the employee will be credited for nine and one-half years of service.

(4) Effective as of August 5, 1993, a leave of absence pursuant to the Family and Medical Leave Act of 1993 will not constitute a break in service. In accordance with the Family and Medical Leave Act and the Uniformed Services Employment and Reemployment Rights Act, the plan will grant vesting and participation credit to participants so entitled.

(5) Service for vesting purposes will not include any period of employment for which an employee will receive or has received a payment under any other city plan for the benefit of employees of the employer, including but not limited to, the police pension plan for “old hire” police officers, the State of Colorado Fire and Police Pension Plan, any other firemen's or policemen's pension plan or the money purchase pension plan for “new hire” peace officers.

(T) Trust means the trust created under this plan, and consists of all assets of the plan derived from employer and employee contributions, plus any income and gain thereto, less any losses, expenses, and distributions to employees and beneficiaries.

Each employee, as defined in section 2-20-030, B.M.C., shall automatically become a participant on the date of hire. A participant or employee who has terminated plan participation may elect to transfer the greater of (1) the vested actuarial equivalent of his or her accrued benefit or (2) his or her accumulated contributions to the money purchase plan for general employees or the money purchase plan for “new hire” peace officers. In order to make such a transfer, the participant or employee must execute an irrevocable waiver form and submit such form to the pension committee not less than thirty days prior to an effective date of the transfer. For a transfer to the money purchase plan for general employees, the effective date of the transfer will be the first pay period in July or the first pay period in January of any year. For a transfer to the money purchase plan for “new hire” peace officers, the effective date of the transfer will be no sooner than the first pay period of the month following the employee's appointment to a peace officer position. (Ord. 1121 §1, 1995; Ord. 1450 §1, 2000; Ord. 1666 §6, 2002)

The employer, acting under the advice of the qualified enrolled actuary for the plan, intends to make contributions to the plan in such amounts and at such times as are required to maintain plan benefits at Level II for its employees on a sound actuarial basis. Plan benefit Level I will be funded by employer contributions equal to the amount recommended by the enrolled actuary to fund Level II benefits plus mandatory employee contributions. Upon a complete or partial termination of this plan by the employer, the rights of each affected employee of the employer to benefits accrued hereunder to the date of such discontinuance, to the extent then funded, shall be nonforfeitable. All contributions made by the employer to the plan shall be used to pay benefits under the plan or to pay expenses of the plan and shall be irrevocable, except for any residual amounts after satisfying all liabilities of the plan. Forfeitures arising because of severance of employment before the employee becomes eligible for a pension or for any other reason, shall be applied to reduce the costs of the plan, not to increase the benefits otherwise payable to employees. (Ord. 1121 §1, 1995; Ord. 1450 §1, 2000)

(A) As a condition of employment, each employee hired after March 29, 1995, is enrolled in the Level I benefit and as of May 31, 2000, contributes 7.5% of compensation. Active employees as of March 29, 1995, were given an opportunity to waive the Level I benefit by signing an irrevocable waiver. The employees who waived the Level I benefit were enrolled in the Level II benefit, which does not require employee contributions. Employee contributions will be accounted for separately in an employee contribution account, which account will be at all times nonforfeitable by the employee. The employer shall pick up such contributions in lieu of mandatory employee contributions as provided in section 414(h) of the Internal Revenue Code. Employee contributions that are picked up by the employer are treated as employee contributions except for federal income tax purposes. Such contributions are fully vested, but for tax reporting they are treated as employer contributions.

(B) Employees making mandatory contributions who terminate participation in the plan before they are vested (seven years) may elect to receive a distribution of their accumulated contributions at any time. Employees making mandatory contributions who terminate participation in the plan after becoming vested but before being eligible for a defined benefit may receive a distribution at any time, but only if their accumulated contributions exceed the actuarial equivalent of the employee's vested accrued benefit. The accumulated contribution may be taken as a lump sum distribution, or it may be rolled over into an eligible retirement plan as an eligible rollover distribution, as defined in section 2-20-170. Any other employee making mandatory contributions must meet the requirements of section 2-20-075 before being eligible to receive a distribution. The value of the employee contribution account will be the quarter end balance preceding distribution, as calculated in section 2-20-030, plus current quarter employee contributions. (Ord. 1121 §1, 1995; Ord. 1450 §1, 2000; Ord. 1666 §7, 2002)

An employee shall be eligible for a normal pension if his or her employment with the employer is terminated on or after the employee's sixty-fifth birthday and after the employee has completed seven or more years of service, which date shall be deemed the employee's “normal retirement date.” The normal form of benefit under the plan is a life annuity commencing on the first day of the month after retirement. Employees are eligible for unreduced benefits beginning as early as age fifty-five if the employee qualifies for the “Rule of 80” retirement. The last payment shall be made as of the first day of the month in which the death of the retired employee occurs. (Ord. 1121 §1, 1995; Ord. 1450 §1, 2000)

(A) Level I benefits: An employee who meets the requirements for a normal retirement and makes employee contributions will receive a monthly benefit amount equal to 2.0% of the employee's average monthly compensation multiplied by his or her years of service.

(B) Level II benefits: An employee who meets the requirements for a normal retirement and does not make employee contributions to the plan will receive a monthly benefit amount equal to 1.25% of the employee's average monthly compensation multiplied by his or her years of service.

An employee who makes mandatory employee contributions to the plan, who terminates employment, attains age fifty-five, and whose age and years of service under the plan equals eighty or more is eligible for a “Rule of 80” pension. The “Rule of 80” pension provides benefits commencing on the first day of the month following termination of employment. There is no reduction in benefit for payment prior to normal retirement age. If an employee otherwise meets the requirements of the “Rule of 80” pension but terminates employment before age fifty-five, he or she will not receive any benefits before age fifty-five, but will be eligible for a “Rule of 80” pension when he or she reaches age fifty-five. (Ord. 1121 §1, 1995; Ord. 1450 §1, 2000)

An employee shall be eligible for an early pension if his or her employment with the employer is terminated on or after his or her fifty-fifth birthday but before his or her sixty-fifth birthday, and after he or she has completed seven or more years of service. If the employee requests the commencement of his or her early pension as of the first day of the month coinciding with or next following his or her retirement, or as of the first day of any subsequent month which precedes his or her sixty-fifth birthday, his or her pension shall commence on the first of the following month, but the amount thereof shall be reduced as provided for in section 2-20-105, B.M.C. The last payment shall be made as of the first day of the month in which the death of the retired employee occurs. (Ord. 1121 §1, 1995; Ord. 1450 §1, 2000)

(A) An employee who meets the requirements for an early retirement shall receive a monthly amount which shall be determined in accordance with the provisions of a normal pension, based on the employee's average monthly compensation and service to date of early retirement and whether the employee is eligible for Level I or Level II benefits:

(1) Level I benefits: An employee who is making mandatory employee contributions and meets the requirements for an early retirement will receive a monthly benefit amount equal to 2.0% of the employee's average monthly compensation multiplied by his or her years of service.

(2) Level II benefits: An employee who is not making mandatory employee contributions and meets the requirements for an early retirement will receive a monthly benefit amount equal to 1.25% of the employee's average monthly compensation multiplied by his or her years of service.

(B) If payment of an early pension commences before age sixty-five, the monthly amount shall be reduced by 1/180 for each of the first sixty months from age sixty to age sixty-five and by 1/360 for each of the next sixty months from age fifty-five to age sixty in the period between the date as of which the pension begins and the first day of the month next following the employee's sixty-fifth birthday.

(C) However, if an employee is eligible for unreduced benefits as stated in “Rule of 80” retirement (an employee currently employed whose age plus service totals eighty), then payment of an early pension will not be reduced, and the employee will receive a monthly amount which shall be determined in accordance with the provisions of a normal pension. (Ord. 1121 §1, 1995; Ord. 1450 §1, 2000)

(A) An employee shall be eligible for a deferred vested pension if his or her employment with the employer is terminated, for reasons other than death or retirement, on or after the completion of seven or more years of service. Payment of a deferred vested pension shall commence as of the employee's normal retirement date if he or she is then living. If the employee requests the commencement of his or her deferred vested pension as of the first day of any month subsequent to his or her fifty-fifth birthday but preceding his or her sixty-fifth birthday, his or her pension shall commence as of the beginning of the month so requested, but the amount thereof shall be reduced as provided for in early pension. The last payment shall be made as of the first day of the month in which the death of the retired employee occurs.

(B) If the employee requests the commencement of his or her deferred vested pension at any time after termination of employment but before the attainment of age fifty-five, he or she will receive a lump sum distribution of the greater of (1) the vested actuarial equivalent of his or her accrued benefit or (2) his or her accumulated contributions. (Ord. 1121 §1, 1995; Ord. 1450 §1, 2000)

An employee who meets the requirements for a deferred vested retirement will receive a monthly amount which will be determined in accordance with the provisions of a normal pension, based on the employee's average monthly compensation, service to date of termination, and eligibility for Level I or Level II benefits:

(B) Level II benefits: An employee who is not making mandatory employee contributions and meets the requirements for a deferred vested retirement will receive a monthly benefit amount equal to 1.25% of the employee's average monthly compensation multiplied by his or her years of service.

(A) An employee shall be eligible for a disability pension if his or her employment with the employer is terminated by reason of total and permanent disability, provided that he or she has completed three or more years of service. Payment of disability pension shall commence on the employee's normal retirement date if he or she is then living. The last payment shall be made as of the first day of the month in which the death of the retired employee occurs.

(2) Has sufficiently recovered, in the opinion of the committee based on a medical examination by a doctor or clinic appointed by the committee, to be able to engage in regular employment with an employer and refuses an offer of employment by such employer; or

(C) If disability ceases before an employee attains his or her normal retirement date, his or her payable pension, if any, will be determined on the basis of his or her service and compensation prior to the date of his or her recovery from disability. (Ord. 1121 §1, 1995; Ord. 1450 §1, 2000)

An employee who meets the requirements for a disability retirement will receive a monthly amount which will be determined in accordance with the provisions of a normal pension, based on the employee's average monthly compensation determined as of his or her disability retirement date and whether the employee is eligible for Level I or Level II benefits. However, notwithstanding any provision to the contrary, and for the sole purpose of computing the amount payable as a disability pension, an employee's service will include the period between the commencement of his or her disability and the first day of the month following the retired employee's sixty-fifth birthday, as well as the employee's service prior to the date of disability.

(A) Level I benefits: An employee who is making mandatory employee contributions and meets the requirements for a disability pension will receive a monthly benefit amount equal to 2.0% of the employee's average monthly compensation multiplied by his or her years of service.

(B) Level II benefits: An employee who is not making mandatory employee contributions and meets the requirements for a disability pension will receive a monthly benefit amount equal to 1.25% of the employee's average monthly compensation multiplied by his or her years of service.

(A) Eligibility requirements. The surviving beneficiary of an active participant not receiving pension benefits will be eligible for an in-service death benefit if the employee on the date of his or her death had made mandatory employee contributions during his or her employment with the city or in the case of a Level II participant met the vesting requirements.

(1) Death of Level I participant prior to vesting (seven years): The beneficiary will receive a benefit equal to the accumulated contributions during the first seven years. The value of the employee contribution account will be the quarter end balance preceding distribution, as calculated in section 2-20-030, plus current quarter employee contributions.

(2) Death of participant after vesting (seven years): The beneficiary will receive the greater of (a) the vested actuarial equivalent of the deceased participant's accrued benefit or (b) the deceased participant's accumulated contributions as of his or her date of death. Payment will commence on the first day of the month following the employee's date of death. The beneficiary may elect any of the optional forms of benefit pay provided for under section 2-20-160, B.M.C. (Ord. 1121 §1, 1995; Ord. 1450 §1, 2000)

(A) Eligibility requirements. The surviving beneficiary of a deferred vested participant not receiving pension benefits will be eligible for a deferred vested death benefit if the deferred vested participant on the date of his or her death had made mandatory employee contributions during his or her employment with the city or in the case of a Level II participant met the vesting requirements. The surviving beneficiary of a nonvested inactive participant will be eligible for a death benefit if the employee on the date of his or her death had made mandatory employee contributions during his or her employment with the city.

(1) Death of deferred vested participant after vesting (seven years): The beneficiary will receive the greater of (a) the vested actuarial equivalent of the deceased participant's accrued benefit or (b) the deceased participant's accumulated contributions as of his or her date of death. Payment will commence on the first day of the month following the employee's date of death. The beneficiary may elect any of the optional forms of benefit pay provided for under section 2-20-160, B.M.C.

(2) Death of Level I inactive participant prior to vesting (seven years): The beneficiary will receive a benefit equal to the accumulated contributions during the first seven years. The value of the employee contribution account will be the quarter end balance preceding distribution, as calculated in section 2-20-030. (Ord. 1121 §1, 1995; Ord. 1450 §1, 2000)

If retirement benefit payments cease to a retired participant and beneficiary before they receive the total of the participant's accumulated contributions, his or her beneficiary shall receive the difference between his or her accumulated contributions and the amount of retirement benefits received to date. The difference shall be paid in a single sum to the beneficiary, if living, or to the estate of the last survivor of the retired participant or his or her beneficiary. (Ord. 1121 §1, 1995; Ord. 1450 §1, 2000)

(A) Each active or retired employee may designate a primary beneficiary or beneficiaries and a contingent beneficiary or beneficiaries to receive any benefit that may become payable under this plan by reason of his or her death. Such designation shall be made upon forms furnished by the committee, and may at any time be changed or revoked without notice to the beneficiary or beneficiaries, and shall not be effective until filed with the committee.

(C) For the purpose of this plan, the production of a certified copy of the death certificate of the employee or other person shall be sufficient evidence of death, and the committee shall be fully protected in relying thereon. (Ord. 1121 §1, 1995; Ord. 1450 §1, 2000)

If a participant dies leaving no beneficiary, the plan will pay any benefit to the participant's estate and let the estate determine the participant's heirs. The plan will follow the provisions of the Colorado Unclaimed Property Act in accordance with sections 38-13-108 through 134, C.R.S. (Ord. 1121 §1, 1995; Ord. 1450 §1, 2000)

An employee or beneficiary must notify the employer in writing of a claim for benefits under the plan. The employer will take such steps as may be necessary to facilitate the payment of benefits to the employee or beneficiary. (Ord. 1121 §1, 1995; Ord. 1450 §1, 2000)

(B) 50% joint and survivor option (a monthly amount actuarially reduced which provides the employee with a reduced pension payable for life and payments in the amount of 50% of such reduced pension will, after the retired employee's death, be continued to the employee's beneficiary during the beneficiary's lifetime);

(C) 100% joint and survivor option (a monthly amount, actuarially reduced which provides the employee with a reduced pension payable for life and payments in the amount of 100% of such reduced pension will, after the retired employee's death, be continued to the employee's beneficiary during the beneficiary's lifetime);

Notwithstanding any other provision of this plan, if the employee terminates employment for any reason and the employee's vested defined benefit does not exceed $5,000.00, the employee or beneficiary will receive a distribution of the entire vested benefit in a lump sum within sixty days after termination of employment and the nonvested portion of the defined benefit will be forfeited immediately upon such distribution.

Effective January 1, 2006, in the event of a mandatory distribution greater than $1,000.00 as described in Code section 401(a)(31)(B), if the employee does not elect to have such distribution paid directly to an eligible retirement plan specified by the participant in a direct rollover or to receive the distribution directly in accordance with section 2-20-160 and 2-20-175, B.M.C., then the committee will pay the distribution in a direct rollover to an individual retirement plan designated by the committee. (Ord. 1450 §1, 2000; Ord. 1818 §2, 2005)

(A) Notwithstanding any provision of the plan to the contrary that otherwise would limit an employee's distribution election under the plan, an employee may elect, at any time and in the manner prescribed by the committee, to have any portion of an eligible rollover distribution paid directly to an eligible retirement plan specified by the participant in a direct rollover.

(B) Eligible rollover distribution. An eligible rollover distribution is any distribution of all or any portion of the balance to the credit of the participant, except that an eligible rollover distribution does not include (i) any distribution that is one in a series of substantially equal periodic payments (not less frequently than annually), the joint lives (or joint life expectancies) of the distributee and the distributee's designated beneficiary, or for a specified period of 10 years or more; (ii) any distribution to the extent the distribution is required under Code section 401(a)(9); (iii) the portion of any distribution that is not includable in gross income (this exclusion does not apply to distributions that are after-tax employee contributions on and after January 1, 2002, to an individual retirement account or annuity described in Code section 408(a) or (b), or to a qualified defined contribution plan described in Code sections 401(a) or 403(a) that agrees to account separately for the transferred amounts); (iv) any distribution made upon the hardship of the employee; and (v) any distribution that is expected to total less than $200.00 during a year.

(C) Eligible retirement plan. An eligible retirement plan is an individual retirement account described in Code section 408(a), an individual retirement annuity described in Code section 408(b), a qualified trust described in Code section 401(a), an annuity plan described in Code section 403(a), and, effective for distributions on and after January 1, 2002, an eligible deferred compensation plan described in Code section 457(b) which is maintained by an eligible employer described in Code section 457(e)(1)(A) and an annuity contract described in Code section 403(b). Effective for distributions on and after January 1, 2002, this definition of eligible retirement plan also will apply to a distribution made to a surviving spouse or to an alternate payee.

(D) Distributee. A distributee includes an employee or former employee. In addition, the employee's spouse or former spouse who is the alternate payee under a qualified domestic relations order are distributees with regard to the interest of the spouse or former spouse.

(F) Procedures. The committee may establish procedures for the distribution of eligible rollover distributions, including any limitations on the amount eligible for a rollover distribution, to the extent permitted by law. (Ord. 1121 §1, 1995; Ord. 1450 §1, 2000; Ord. 1666 §8, 2002)

(A) The annual benefit in the form of a single life annuity, with no ancillary benefits, provided by employer contributions, including employer pick-up contributions, for an employee with ten or more years of service at age sixty-five will not exceed the limit under Code section 415(b)(1)(A), as adjusted for cost-of-living increases as of each year. Effective January 1, 2005, the annual benefit above shall not exceed $170,000.00, as adjusted, effective January 1 of each year, under Code section 415(d) in such manner as the secretary of the treasury may prescribe, and payable in the form of a straight life annuity. A limitation as adjusted under Code section 415(d) will apply to limitation years ending with or within the calendar year for which the adjustment applies.

(B) Except as provided in subsection (C) below, which imposes additional limitations on the amounts payable to employees with less than ten years of participation, the foregoing limitation is not applicable with respect to any employee whose annual benefit under this plan, and any other defined benefit plan maintained by the employer, is less than $10,000.00, and such employee has not at any time participated in any defined contribution plan, within the meaning of section 415(k) of the Code, maintained by the employer. If an employee has less than ten years of participation with the employer, the $10,000.00 annual benefit limitation shall be multiplied by a fraction (i) the numerator of which is the number of years (or part thereof) of participation with the employer, and (ii) the denominator of which is ten.

(C) In the event an employee has less than ten years of participation in this plan and predecessor plans hereto, the dollar limitation otherwise applicable under subsection (A) above will be reduced by multiplying such limitation by a fraction, the numerator of which is the number of such employee's years of plan participation or part thereof, but never less than one, and the denominator of which is ten. The limitation will not be reduced so that it is less than the employee's accrued benefit under the plan. This subsection will, to the

extent required by the secretary of the treasury, be applied separately to each change in benefit structure hereunder. This subsection (C) will not apply to income received from the plan as a pension, annuity, or similar allowance as a result of the employee becoming disabled or benefits received by the beneficiaries, survivors, or the estate of an employee as a result of the death of the employee.

(D) In the event subsections (B) and (C) do not apply, if the benefit under the plan begins before the participant attains age sixty-two, the dollar limitation in subsection (A) will be reduced so that the limitation equals an annual benefit which is equivalent to the maximum annual benefit in subsection (A) beginning at age sixty-two. The reduction in this subsection (D) will not apply to an employee with respect to whom the period of service taken into account in determining the amount of the benefit under this plan includes at least fifteen years of service of an employee as a full-time employee of any police or fire department which is organized and operated by the employer or as a member of the Armed Forces of the United States. This subsection (D) will not apply to income received from the plan as a pension, annuity, or similar allowance as a result of the employee becoming disabled or amounts received from the plan by beneficiary survivors or the estate of the employee as a result of the death of the employee.

(E) In the event that subsections (B) and (C) do not apply, if the benefit under the plan begins after age sixty-five, the determination as to whether the dollar limitation in subsection (A) has been satisfied shall be made by increasing the dollar limitation so that the limitation equals an annual benefit (beginning when such retirement income begins) which is equivalent to the maximum annual benefit in subsection (A) beginning at age sixty-five. (Ord. 1121 §1, 1995; Ord. 1450 §1, 2000; Ord. 1666 §9, 2002; Ord. 1818 §3, 2005)

2-20-200 Restrictions on the twenty-five highest paid employees effective after December 31, 2000.

(B) Restriction on distributions. The annual payments to any high-25 employee as defined below are restricted to an amount equal to the payments that would be made on behalf of the employee under a single life annuity that is the actuarial equivalent of the sum of the employee's accrued benefit and the employee's other benefits under the plan. The restrictions do not apply, however, if:

(C) Employees whose benefits are restricted - high-25 employees. The employees for any given plan year whose benefits are restricted under subsection (B) above (high-25 employees) include the twenty-five highest paid, for such plan year, of all highly compensated employees and highly compensated former employees as defined under Code section 414(q).

(D) Benefit defined. For purposes of subsection (B) above, benefit includes loans in excess of the amounts set forth in Code section 72(p)(2)(A), any periodic income, any withdrawal values payable to a living employee, and any death benefits not provided for by insurance on the employee's life. (Ord. 1121 §1, 1995; Ord. 1450 §1, 2000)

If the plan is amended to increase benefits which would substantially increase the extent of possible discrimination as to contributions or as to benefits upon termination of the plan, the restrictions set forth in section 2-20-200, B.M.C., when each section is effective, will be applied to the plan as if it were a new plan established on the date of such change. (Ord. 1121 §1, 1995; Ord. 1450 §1, 2000)

(A) Trust. A trust is hereby created to hold all of the assets of the plan for the exclusive benefit of employees and beneficiaries, except that expenses and taxes may be paid from the trust as provided in subsection (C) below. The employer or such other person or firm as may be designated by the committee will be the trustee.

(C) Taxes and expenses. All taxes, commissions on acquisitions or dispositions of securities, and similar expenses of investment and reinvestment of the trust, will be paid from the trust. Such reasonable charges of the trustee and reimbursement for reasonable expenses incurred by the committee or employer in performance of their duties hereunder, including but not limited to fees for legal, accounting, actuarial, investment, and custodial services, will also be paid from the trust.

(D) Payment of benefits. The payment of benefits from the trust in accordance with the terms of the plan may be made by the trustee, or by any custodian or other person so authorized by the committee to make such disbursement. The trustee, custodian, or other person is not liable with respect to any distribution of trust assets made at the direction of the committee. (Ord. 1121 §1, 1995; Ord. 1450 §1, 2000)

(6) To obtain cash flow projections and other required data from the enrolled actuary, in order to establish general investment objectives and supply such data so that an appropriate investment policy consistent with these objectives can be maintained;

(B) Powers and duties of the trustee. The trustee will perform administrative functions in connection with the plan, including maintenance of the trust fund, the provision of periodic reports of the state of the trust fund, and the disbursement of benefits on behalf of the pension committee in accordance with the provisions of this plan.

(C) Protection of the pension committee and the employer. Neither the employer nor the pension committee is liable for the acts or omissions of the trustee. The city will indemnify the committee and other city employees from any personal liability arising from the performance of their duties under the plan, except for acts of gross negligence and willful misconduct.

(E) Resignation or removal of trustee. The trustee may resign at any time effective upon sixty days' prior written notice to the employer and pension committee. The trustee may be removed by the pension committee or employer at any time upon written notice to the trustee. Upon the resignation or removal of the trustee, the employer or pension committee may, if it so elects, appoint a successor trustee having such powers and duties as may be agreed upon by the committee or employer and any such trustee; otherwise, the employer will assume the powers and duties of the former trustee, and any trust assets held by the trustee shall be returned to the employer. (Ord. 1121 §1, 1995; Ord. 1450 §1, 2000)

(C) Powers and duties. The pension committee has the authority to make all discretionary decisions affecting the rights or benefits of employees that may be required in the administration of the plan; to arrange for administration and investment of the plan; to adopt necessary rules and regulations for managing and discharging its duties not inconsistent with applicable state statutes and this chapter; and to take such other action as may be necessary or convenient to administer the terms of this chapter. (Ord. 1121 §1, 1995; Ord. 1450 §1, 2000; Ord. 1666 §10, 2002)

(A) General rules. All amounts payable by the committee will be paid only to the person entitled to them, and all such payments shall be paid directly to such person and not to any other person or corporation. Such payments shall not be subject to the claim of any creditor of a participant, nor are such payments to be taken in execution by attachment or garnishment or by any other legal or equitable proceedings. No person has any right to alienate, anticipate, commute, pledge, encumber, or assign any payments or benefits which he or she may expect to receive, contingently or otherwise, under this plan, except the right to designate a beneficiary or beneficiaries; provided, however, that this section shall not affect, restrict, or abridge any right of setoff or lien which the trust may have by law.

(B) Qualified domestic relations orders. Subsection (A) above shall also apply to the creation, assignment, or recognition of a right to any benefit payable with respect to a participant pursuant to a domestic relations order, unless such order is determined to be a qualified domestic relations order, as defined in section 14-10-113(6), C.R.S. The pension committee may adopt rules or procedures governing the implementation of a domestic relations order. Such rules or procedures may include the requirement that the parties and court may use a standardized domestic relations order form provided by the pension committee. Compliance with the provisions of section 14-10-113(6), C.R.S., by a public employee retirement plan shall not subject the plan to any portion of the Employees Retirement Security Act of 1974. No payments will commence prior to the date payments are permitted to commence under this plan.

(C) Required distributions. With respect to distributions under the plan made for calendar years beginning on or after January 1, 2001, the plan will apply the minimum distribution requirements of Code section 401(a)(9) in accordance with the regulations under Code section 401(a)(9) that were proposed on January 17, 2001, notwithstanding any provision of the plan to the contrary. This amendment shall continue in effect until the end of the last calendar year beginning before the effective date of final regulations under Code section 401(a)(9), or such other date as may be specified in guidance by the Internal Revenue Service. An employee's entire vested accrued benefit must be distributed or begin to be distributed no later than the employee's required beginning date. In general, the employee's required beginning date is the first day of April of the calendar year following the calendar

year in which the later of retirement or attainment of age seventy and one-half occurs. If the employee dies after distribution of his or her benefit has begun, the remaining portion of such benefit, if any, will be distributed at least as rapidly as under the method of distribution being used prior to the employee's death. If the employee dies before distribution of his or her interest begins, distribution of the employee's entire benefit will be completed by December 31 of the calendar year containing the fifth anniversary of the employee's death except to the extent that an election is made to receive distributions in accordance with subparagraphs (1) or (2) below:

(1) If any portion of the employee's interest is payable to a designated beneficiary, distributions may be made in the form of an immediate annuity for the life of the designated beneficiary (or over a period not extending beyond the life expectancy of the beneficiary), and distributions begin not later than December 31 of the calendar year immediately following the calendar year in which the employee died;

(2) If the designated beneficiary is the employee's surviving spouse, the date distributions are required to begin in accordance with subparagraph (1) above shall not be earlier than December 31 of the calendar year in which the employee would have attained age seventy and one-half;

(3) If the employee has not made an election pursuant to this subsection by the time of his or her death, the employee's designated beneficiary must elect the method of distribution no later than the earlier of (a) December 31 of the calendar year in which distributions would be required to begin under this subsection, or (b) December 31 of the calendar year that contains the fifth anniversary of the date of death of the employee. If the employee has no designated beneficiary, or if the designated beneficiary does not elect a method of distribution, distribution of the employee's entire interest must be completed by December 31 of the calendar year containing the fifth anniversary of the employee's death. If the surviving spouse dies after the employee, but before payments to the surviving spouse begin, the provisions of this subsection, with the exception of subparagraph (2) above, shall be applied as if the surviving spouse were the employee. Any amount paid to a child of the employee will be treated as if it had been paid to the surviving spouse if the amount becomes payable to the surviving spouse when the child reaches the age of majority. (Ord. 1121 §1, 1995; Ord. 1450 §1, 2000; Ord. 1666 §11, 2002)

The employer may merge or consolidate this plan with any other plan and may transfer the assets or liabilities of the plan to any other plan if each participant in the plan, if the plan then terminated, would receive a benefit immediately after the merger, consolidation, or transfer which is equal to the greater of (1) the actuarial equivalent of his or her accrued benefit or (2) the participant's accumulated contributions. (Ord. 1121 §1, 1995; Ord. 1450 §1, 2000)

(A) Termination of plan. Upon termination or partial termination of the plan, all participants affected, as of the date such termination or partial termination occurred, will be fully vested in their respective accrued benefits. The interests of the employees and beneficiaries affected, as determined by the enrolled actuary, will be liquidated after provision is made for the expenses of liquidation, by the payment, or provision for payment, of benefits accrued to the date of termination or partial termination, in the following order of precedence:

(3) With respect to each employee who has reached his or her normal retirement date before the date of termination of the plan, payment of a normal pension, based on his or her service and compensation before the date of termination of the plan;

(B) If the plan assets applicable to any one of the above groups are insufficient to provide full benefits for all persons in such group, the benefits otherwise payable to such persons shall be reduced proportionately, and no benefits shall be paid to any person in a succeeding group.

(C) If the plan is terminated, the expenses of the committee, enrolled actuary of the plan, legal counsel, accountant, and any agent appointed by the employer to carry out the termination, will be a first and prior claim and lien on the plan assets.

(D) Amendments to plan. The city may amend this plan at any time; provided, however, that such amendment does not revert any part of the trust to the employer, except as provided in section 2-20-290, B.M.C., and which does not cause any part of the trust to be used for or diverted to any purpose other than the exclusive benefit of employees and beneficiaries under the plan. (Ord. 1121 §1, 1995; Ord. 1450 §1, 2000)

(A) Upon termination of the plan, the employer will receive such amount, if any, as may remain after the satisfaction of all liabilities of the plan to employees and beneficiaries, and arising out of any variations between actual requirements and expected actuarial requirements.