CHAPTER XXIV. PHOENIX CITY EMPLOYEES’ RETIREMENT LAW OF 1953

ARTICLE I. REPEAL OF PHOENIX CITY EMPLOYEES’ RETIREMENT SYSTEM LAW OF 19451

1 System repealed; conditions.

Chapter XXIV of the Charter of the City of Phoenix, being the Phoenix City Employees’ Retirement System Law of 1945, is repealed as of December 29, 1953,2 [14] subject to the following conditions.

1.1.    Any person who retired for age or service or age and service under the said Chapter XXIV and who is in receipt of or is entitled to receive benefits thereunder prior to its repeal shall continue to receive the said benefits or shall continue to be entitled to receive the said benefits to the same extent and in the same manner in all aspects as if the said Chapter XXIV has not been repealed. If such retirant shall have elected one of the actuarially equated options provided for in the said Chapter XXIV his duly designated beneficiary shall, upon the retirant’s death, receive the same benefit to which the said beneficiary was entitled under the said Chapter XXIV.

1.2.    Any person who retired for disability under the said Chapter XXIV and who is in receipt of or is entitled to receive benefits thereunder prior to its repeal shall, subject to the conditions set forth in the said Chapter XXIV, continue to receive the same benefits or shall continue to be entitled to receive the said benefits to the same extent and in the same manner in all respects as if the said Chapter XXIV had not been repealed. At such time as he shall cease to meet such conditions his benefits shall cease and as to him the said Chapter XXIV shall have no further application. If any such person shall have elected one of the actuarially equated options provided for in the said Chapter XXIV, his duly designated beneficiary shall, upon the retirant’s death, receive the same benefit to which the said beneficiary was entitled under the said Chapter XXIV.

1.3.    Any beneficiary of a deceased retirant or member who is in receipt of or is entitled to receive benefits under the said Chapter XXIV prior to its repeal shall continue to receive the said benefits or shall continue to be entitled to receive the said benefits to the same extent and in the same manner in all respects as if the said Chapter XXIV had not been repealed.

1.4.    Any person who, as of the date the said Chapter XXIV is repealed, meets the requirements for retirement under the said Chapter XXIV, but has not applied for retirement, may make such application and retire on or before June 30, 1954, in the same manner in all respects as if the said Chapter XXIV had not been repealed. He, or his duly designated beneficiary, if any, shall thereafter receive benefits to the same extent and in the same manner in all respects as if the said Chapter XXIV had not been repealed, provided any such benefits shall be based upon accumulated contributions, average final compensation and service credit as of the date of the repeal of Chapter XXIV.

1.5.    If any member dies after the repeal of the said Chapter XXIV but on or before June 30, 1954, and leaves beneficiaries entitled to receive benefits under the said Chapter XXIV, his said beneficiaries shall receive benefits to the same extent and in the same manner in all respects as if the said Chapter XXIV had not been repealed, provided said benefits shall be based upon his final compensation as of the date of the repeal of Chapter XXIV.

1.6.    If any member becomes disabled after the repeal of the said Chapter XXIV but prior to July 1, 1954, he shall be entitled to receive disability benefits provided for in the said Chapter XXIV, subject to all conditions pertaining to disability beneficiaries and disability benefits contained in the said Chapter XXIV, to the same extent and in the same manner in all respects as if the said Chapter XXIV had not been repealed, provided said disability benefits shall be based upon his accumulated contributions, average final compensation and service credit as of the date of repeal of Chapter XXIV.

1.7.    Interest on members’ accumulated contributions credited to their Chapter XXIV annuity savings fund accounts shall cease as of December 1, 1953. The said accumulated contributions shall be set aside and held in a trust fund, called Chapter XXIV employees trust fund, which is hereby created for the purpose of refunding the said accumulated contributions to the respective members or their beneficiaries entitled to same. The rights of any person to such refund, or the trust fund itself, shall not be subject to attachment, garnishment, the operation of bankruptcy or insolvency law, or any other process except as is provided in this Chapter. The accumulated contributions of any member entitled to benefits under sections 1.4 and 1.6 of this Article shall be transferred to the Chapter XXIV retirement fund provided for in section 1.9 of this Article.

1.8.    Prior to July 1, 1954 the accumulated contributions held in the Chapter XXIV employees trust fund shall be returned to the respective persons entitled to same, less one and one-half per cent of the total amount of his salary not to exceed $3600.00 per annum earned since January 1, 1951 to be paid for retroactive coverage for coverage under the Federal Old Age and Survivor’s Insurance Program, unless the member shall, in writing, direct the Chapter XXIV retirement board to otherwise dispose of same. In the event a member dies before his accumulated contributions have been disposed of, his said accumulated contributions shall be treated in the same manner in all respects as if the said Chapter XXIV had not been repealed, except that there shall be deducted for payment to the State contribution fund one and one-half per cent of the total amount of his salary not to exceed $3600.00 per annum earned since January 1, 1951.

1.9.    The balance of the assets of the said Phoenix City Employees Retirement System, after providing for the Chapter XXIV employees trust fund, shall be set aside and held in a trust fund, called Chapter XXIV retirement trust fund, which is hereby created for the purpose of disbursing the said assets for the purposes for which they were accumulated under the said Chapter XXIV.

1.10.    The assets credited to the Chapter XXIV employees trust fund and the Chapter XXIV retirement trust fund shall be held in one account.

1.11.    Until their successors have been elected or appointed and have qualified, the retirement board of the Phoenix City Employees’ Retirement System, and the responsibilities of officers and employees of the City of Phoenix engaged in the administration of said Retirement System, are continued to administer and carry into effect the provisions of this Article.

2 Effective date.

This Article I shall be in force and effect December 29, 1953.

Editor’s note—Ordinance states December 22, 1953. Official ballot and authentication of amendment printed as December 29, 1953.

ARTICLE II. CITY OF PHOENIX EMPLOYEES’ RETIREMENT PLAN

1 Short title.

1.1. This Article II may be cited as the City of Phoenix Employees’ Retirement Law of 1953.

2 Definitions.

2.1. The following words and phrases as used in this Article, unless a different meaning is clearly required by the context, shall have the following meanings:

2.2. "City" means the City of Phoenix, Arizona.

2.3. "Retirement Plan" or "plan" means the City of Phoenix Employees’ Retirement Plan continued in this Article.

2.4. "Retirement Board" or "board" means the Retirement Board provided in this Article.

2.5. "Employee" means any person, in the employ of the City on a full time basis, who is under the classified civil service, except as hereinafter excluded, and shall include appointive officials whose employment with the City is on a full time basis. For the purposes of this Article, "full time basis" means employment on a work schedule which consists of the number of full time hours per week designated for the class of employment for the employee’s classification, and which work schedule is intended to be continuous over a period of 12 months at the aforementioned full time hours per week. The term "employee" shall not include (1) policemen and firemen who are covered by another retirement system or pension plan to which the City makes contributions; nor (2) any person who furnishes personal services to the City on a contractual or fee basis. The definition of "employee" shall not exclude from membership in the Retirement Plan any person in the employ of the City who was a member of the former system.

2.6. "Member" means any person who is included in the membership of the Retirement Plan.

2.7. "Service" means personal service rendered to the City by an employee of the City and shall include service rendered in any function or enterprise the City may engage in as a municipal corporation or may have heretofore acquired through purchase or eminent domain, provided, however, that in the event a function or enterprise is hereafter acquired by the City through purchase or eminent domain the rights acquired by the employees thereof under this Retirement Plan shall be set forth and determined in a written agreement between the City, the Retirement Board, and a duly elected or appointed committee, recognized by the Board. authorized to represent said employees.

2.8. "Credited Service" means the number of years and months of service credited a member by the Retirement Board pursuant to the provisions of this Article.

2.9. "Retirant" means a member who retires with a pension payable by the Retirement Plan.

2.10. "Beneficiary" means any person, except a retirant, who is in receipt of, or who is designated to receive, a pension or other benefit payable by the Retirement Plan.

2.11. "Regular interest" means such rate or rates of interest per annum, compounded annually, as the Retirement Board shall from time to time adopt.

2.12. "Accumulated contributions" means the sum of all amounts deducted from the compensation of a member and credited to his individual account in the employees’ savings fund, together with regular interest therein. It shall include such other amounts as the member may deposit or have transferred to his employees’ savings fund account, including regular interest thereon, as provided in this Article.

2.13. "Compensation" means a member’s salary or wages paid him by the City for personal services rendered by him to the City. In case a member’s compensation is not all paid in money the City Council shall, upon recommendation of the City Manager, fix the value of the portion of his compensation which is not paid in money.

2.14. "Final average compensation" means:

(a)    for a Tier 1 Member and Tier 2 Member, the average of the highest annual compensations paid a member for a period of 3 consecutive, but not necessarily continuous, years of his credited service contained within his 10 years of credited service immediately preceding the date of his City employment last terminates. If he has less than 3 years of credited service, his final average compensation shall be the average of his compensations for his total period of service.

(b)    for a Tier 3 Member, the average of the highest annual compensations paid a member for a period of 5 consecutive, but not necessarily continuous, years of his credited service contained within his 10 years of credited service immediately preceding the date his City employment last terminates. If he has less than 5 years of credited service, his final average compensation shall be the average of his compensations for his total period of service.

For the purposes of determining benefits based on final average compensation, any compensation in excess of the limitations established by Section 401(a)(17) of the Internal Revenue Code (including applicable adjustments), shall be disregarded; further, for any Tier 3 Member, any annual compensation in excess of $125,000 in any one year shall be disregarded, provided that such $125,000 limitation shall be adjusted annually each January 1, commencing on January 1, 2017, by the annual unadjusted percentage increase or decrease in The Consumer Price Index for All Urban Consumers (CPI-U); U.S. City Average; All items, not seasonably adjusted, 1982-1984=100 reference base, published by the Bureau of Labor Statistics of the United States Department of Labor (such adjustments to be cumulative and compounded) for the twelve month period ending on the immediately preceding September 30. For an individual who was a member of the retirement plan before the first plan year beginning after December 31, 1995, the limitation on compensation for eligible employees under Section 401(a)(17) of the Internal Revenue Code shall not be less than the amount which was allowed to be taken into account under the plan as in effect on July 1, 1993.

2.15. "Final compensation" means a member’s annual rate of compensation at the time his City employment last terminates.

2.16. "Retirement" means a member’s withdrawal from City employment with a pension payable by the Retirement Plan.

2.17. "Pension" means an annual amount payable by the Retirement Plan, in equal monthly installments, throughout the future life of a person, or for a temporary period, as provided in this Article.

2.18. "Pension reserve" means the present value of all payments to be made on account of any pension, and shall be computed upon the basis of such tables of experience, and regular interest, as the Retirement Board shall from time to time adopt.

2.19. "Former system" means the Phoenix City Employees’ Retirement System, created and established under Chapter XXIV of the Charter of the City of Phoenix, and repealed December 29, 1953.

2.20. "Workmen’s compensation period" means the period a person is in receipt of monthly payments of workmen’s compensation on account of a member’s disability or death arising out of and in the course of his City employment. If he is paid a single sum in lieu of future workmen’s compensation his "workmen’s compensation period" shall be the sum of (1) the period, if any, he was paid monthly payments of workmen’s compensation, plus (2) the period arrived at by dividing the said single sum by such monthly payment award.

2.21. "Nominee" means a partnership selected and authorized by a resolution of the Retirement Board to perform certain duties in connection with the buying, selling, holding and registration of securities on behalf of the board.

2.22. "Tier 1 Member" means: (A) any member hired into a position of employment with the City before July 1, 2013; and (B) any member hired into a position of employment with the City between July 1, 2013 and December 31, 2015 who prior to July 1, 2011 participated in the Arizona State Retirement System established pursuant to Title 38, Chapter 5, Articles 1, 2 and 2.1 of the Arizona Revised Statutes ("ASRS"), and is either an active member or an inactive member of the ASRS as defined by Title 38, Chapter 5, Article 2, Section 38-711 of the Arizona Revised Statutes at the time of hire by the City. Additionally, if a member is hired into a position of employment with the City on or after July 1, 2013, but was previously employed with the City prior to July 1, 2013, and the member is not eligible to be a Tier 1 Member under the terms of the preceding sentence, the member shall be a Tier 1 Member only if the member did not withdraw his or her accumulated contributions from the retirement plan as provided for in Section 26 prior to his or her most recent date of hire with the City.

2.23. "Tier 2 Member" means any member hired into a position of employment with the City between July 1, 2013 and December 31, 2015 who is not a Tier 1 Member. Additionally, if a member is hired into a position of employment with the City on or after January 1, 2016, but was previously employed with the City prior to January 1, 2016, and the member is not eligible to be a Tier 1 Member or Tier 2 Member under the terms of the preceding sentence, the member shall be a Tier 2 Member only if the member did not withdraw his or her accumulated contributions from the Retirement Plan as provided for in Section 26 prior to his or her most recent date of hire with the City.

2.24. "Tier 3 Member" means any member hired into a position of employment with the City on or after January 1, 2016 who is not a Tier 1 Member or a Tier 2 Member.

(Election of 11-13-1973; election of 10-3-1995; election of 3-12-2013, eff. 6-17-2013; election of 8-25-2015, eff. 10-22-2015)

3 Retirement plan continued.

3.1. The City of Phoenix Employees’ Retirement Plan, heretofore created and established effective December 31, 1953, is hereby continued to provide for the retirement of employees of the City who become superannuated on account of age or total and permanent disability; to provide pensions to members and their eligible dependents; to provide that contributions be made to the Plan by the members and the City; and to provide for the administration of the Plan.

4 Retirement Board.

4.1. The authority and responsibility for the administration, management and operation of the Retirement Plan and for construing and carrying into effect the provisions of this Article, except as otherwise provided in this Article, are vested in a Retirement Board.

4.2. The Retirement Board shall consist of (9) Board Members as follows:

(a)    Three employee board members, who all members of the Retirement Plan, each of whom shall have at least 10 years of credited service, to be elected by the members of the Plan for 3 year terms expiring after December 31, 1945. The elections shall be held under such rules and regulations as the Retirement Board shall from time to time adopt.

(b)    Four ex-officio Board members consisting of the City Manager, City Treasurer, the Finance Director and Urban Manager or Department head to be selected by the City Manager. The City Manager shall have the right to delegate his responsibilities and powers as ex-officio Board Member to an employee who is a member of the Plan.

(c)    A citizen Board Member, who is a resident of but not employed by the City, or receiving benefits from the Retirement Plan, who shall have at least five years experience in a responsible position with a private or public pension plan, to be elected by the other Board Members to a three-year term that is concurrent with the term of the elected employee members of the Retirement Board.

(d)    One member who shall be a retired member to be elected by the employee Board members for a three-year term that is concurrent with the term of the elected employee members of the Retirement Board.

4.3. Upon the expiration of any term of employee Board member or citizen Board member a successor shall be elected for a term of three years. The office of Board member shall be deemed to be vacated by a Board member if prior to the expiration of his term he resigns from the Board, or dies, or leaves the employ of the City. In the event a vacancy occurs in the office of employee Board member, the vacancy shall be filled within 90 days after the date of the vacancy, for the unexpired portion of the term, by a member selected by the two remaining employee Board members and the citizen Board member. If a vacancy occurs in the office of a citizen Board member the vacancy shall be filled within 90 days after the date of the vacancy, for the unexpired portion of the term, in the same manner as the office was previously filled. If a vacancy occurs in the office of retired Board member the vacancy shall be filled within 90 days after date of vacancy, for the unexpired portion of the term, in the same manner as the office was previously filled.

4.4. Each Board member shall serve without remuneration or compensation whatsoever.

4.5. Within 10 days after his election or appointment a Board member shall take the oath prescribed for City officials and shall subscribe to and file same with the City Clerk.

(Election of 11-1-1983)

5 Retirement plan officers.

5.1. The Retirement Board shall elect from its own number a chairman and a vice-chairman.

5.2. The Retirement Board shall appoint an executive secretary who shall not be a Board member. His appointment shall be made in accordance with civil service rules and he shall have a civil service status of a full time classified employee. He shall perform such duties as are required of him in this Article and such other duties as the Board may from time to time prescribe.

5.3. The City Attorney shall be the legal advisor to the Retirement Board.

5.4. The City Treasurer shall be Treasurer of the Retirement Plan. The Treasurer shall be custodian of the assets of the Retirement Plan except as to such assets as the Retirement Board may from time to time place in the custody of an investment fiduciary.

5.5. Disability Assessment Committee. The Disability Assessment Committee shall consist of five members as follows:

(a)    Two ex-officio members consisting of the personnel Safety Administrator and the Executive secretary to the Retirement Board.

(b)    Two employee members, who are members of the Retirement Plan, each of whom shall have at least 5 years of credited service, to be nominated by the Disability Assessment Committee and approved by the Retirement Board.

(c)    A citizen member who is a resident of Maricopa County and not employed by the City or receiving benefits from the Retirement Plan, who shall have at least 5 years experience in a responsible position in the health care field, to be nominated by the Disability Assessment Committee and approved by the Retirement Board.

The implementation of this Section 5.5, the length of the employee and citizen member terms, the effective date of said terms, and the establishment of policy and procedure of the Disability Assessment Committee shall be vested in the Retirement Board.

5.6. The Retirement Board shall appoint an actuary who shall be its technical advisor on matters regarding the operation of the Retirement Plan. He shall perform such other duties as are required of him in this Article.

5.7. The Retirement Board may employ investment counsel and such other services as it shall from time to time deem necessary in the proper operation of the Retirement Plan.

(Election of 10-6-1987)

6 Surety bonds.

6.1. The Retirement Board may require that a surety bond for the faithful performance of duty be furnished by any Board member and any officer of the Retirement Plan. The surety bonds shall be in such amounts as the Board shall from time to time determine and shall be subject to the approval of the City Manager and the City Attorney.

7 Records.

7.1. The executive secretary shall keep such data as shall be necessary for an actuarial valuation of the assets and liabilities of the Retirement Plan; and for determining benefits to which retirants, and beneficiaries are entitled.

8 Board meetings.

8.1. The Retirement Board shall hold meetings regularly, at least quarterly, and shall designate the time and place thereof. It shall adopt its own rules of procedure and shall keep a record of its proceedings, which shall be open to public inspection. All meetings of the Board shall be public.

8.2. Five Board members, of which at least two are not ex-officio members, shall constitute a quorum at any meeting of the Retirement Board. Each attending Board member shall be entitled to one vote on each question before the Board and at least three concurring votes shall be necessary for a decision by the Board at any of its meetings.

(Election of 11-1-1983)

9 Annual report.

9.1. The Retirement Board shall publish annually a report, certified to by a certified public accountant, showing the fiscal transactions of the Retirement Plan for the preceding fiscal year, and balance sheet of the Plan as of the preceding June 30.

10 Adoption of experience tables and regular interest.

10.1. The Retirement Board shall from time to time adopt such mortality and other tables of experience, and a rate or rates of regular interest, as are required in the operation of the Retirement Plan and for an actuarial valuation of its assets and liabilities.

11 Annual valuations.

11.1. The actuary shall annually make an actuarial valuation of the assets and liabilities of the Retirement Plan.

12 Membership.

12.1. Any person who becomes an employee as defined in this Article, shall become a member of the Retirement Plan beginning with the date of his first employment by the City.

12.2. All persons who are employees, as defined in this Article, shall become members of the Retirement Plan.

12.3. In any case of doubt as to who is a member of the Retirement Plan the Retirement Board shall decide the question.

13 Membership terminates.

13.1. Should any member leave City employment, for any reason except his retirement or death, he shall thereupon cease to be a member and his credited service in force at that time shall be forfeited by him except as otherwise provided in Section 15 or Section 20 of this Article. In the event he again becomes an employee of the City he shall again become a member. His credited service or a portion thereof last forfeited by him shall be restored to his credit; provided he returns to the employees’ savings fund the amount, he withdrew therefrom or a portion thereof equal to the service sought to be credited together with regular interest from the date of withdrawal to the date of repayment. Payment of a portion of withdrawn contributions plus interest will restore that portion of credited service to the employee’s account pursuant to policies established by the retirement board. Credited service shall not be restored to a member until he has returned to the employees’ savings fund the full amount, including interest, herein before required of him in this section. In the event a member becomes a retirant or dies he shall thereupon cease to be a member.

(Election of 11-13-1973; election of 9-7-1999; election of 9-9-2003, eff. 10-1-2003)

14 Credited service.

14.1. The Retirement Board shall fix and determine by appropriate rules and regulations, consistent with the provisions of this Article, the amount of service to be credited any member; provided, that in no case shall less than 10 days of service rendered by a member in any calendar month be credited him as a month of service, nor shall less than 6 months of service rendered in any calendar year be credited as a year of service, nor shall more than one year of service be credited any member for all service rendered him in any calendar year. Additionally, for all Tier 2 Members and Tier 3 Members, in no case shall a month of service be credited to such a member unless the member has rendered at least 20 days of service in the calendar month at issue.

14.2. Service rendered prior to December 29, 1953 shall be credited a member only if he deposits in the employees’ savings fund of this Retirement Plan, by transfer or otherwise, less his share of accrued social security taxes:

(a)    The amount of accumulated contributions standing to his credit in the annuity savings fund of the former system at December 29, 1953; said deposit to be made on or prior to July 1, 1954; and

(b)    All amounts of accumulated contributions withdrawn by him from the annuity savings fund of the former system and not returned thereto; said deposit to be made on or prior to July 1, 1955; and

(c)    The aggregate amount of contributions the said member would have made to the annuity savings fund of the former system for the period he was an employee after January 1, 1947 and prior to December 29, 1953 if he was not a member of the former system; said deposit to be made in a manner determined by the Retirement Board.

14.3. Service rendered prior to December 29, 1953 by a member who did not make a deposit as provided in Section 14.2 shall be credited a member as non-contributory service for the exclusive purpose of meeting the service requirement specified in Section 17.2 provided (1) the member remains in continuous employment by the City from December 29, 1953 to the date of his retirement, and (2) the member has attained age 55 years.

14.4. A member, other than a Tier 3 Member, shall be granted unused sick leave credited service for the period of unused sick leave standing to the member’s credit at time of retirement, death or termination of City employment. Unused sick leave credited service may be used only as credited service under the provisions of Section 17, Section 18, Section 20, Section 21 and Section 25 and further as provided in Section 19.1(a).

14.5. In the event a policeman or fireman employed by the City becomes a member of the Retirement Plan the service rendered by him in the employ of the police or fire department of the City may be credited him, pursuant to the provisions of this Article, under such conditions as the Retirement Board may from time to time determine; which shall include, but not be limited to, the following:

(a)    He transfers to the employees’ savings fund the aggregate amount of contributions made by him to the retirement system or pension plan covering the City’s policemen and/or firemen, together with interest additions, if any; and

(b)    In no case shall service credit be given by the Retirement Board for any period for which he is entitled or becomes entitled to a benefit payable by such retirement system or pension plan for the City’s policemen and/or firemen.

14.6. In any case of doubt as to the amount of service to be credited a member of the Retirement Board shall have final power to determine the amount.

(Election of 11-13-1973; election of 10-6-1987; election of 3-12-2013, eff. 6-17-2013; election of 8-25-2015, eff. 10-22-2015)

15 Military service credit.

15.1. An employee who while employed by the City entered any armed service of the United States, or a member who entered or enters any armed service of the United States, and who has been or shall be on active duty during time of war or period of compulsory military service shall have such armed service credited him as City service in the same manner as if he had served the City uninterruptedly; provided, that (1) he shall have been or shall be re-employed by the City as an employee within one year from and after termination of such armed service actually required of him, (2) he returned to the employees’ savings fund the amount, if any, he withdrew therefrom at the time he entered or while in such armed service, together with regular interest from the date of withdrawal to the date of repayment, and (3) in no case shall more than 5 years of City service be credited any member for all such armed service rendered by him. In any case of doubt as to the period of service to be so credited any member the Retirement Board shall have final power to determine such period. During the period of such armed service and until his re-employment by the City his contributions to the Retirement Plan shall be suspended and his balance in the employees’ savings fund shall be accumulated at regular interest.

16 Crediting service.

16.1. The Retirement Board shall credit each member with the service to which he is entitled pursuant to the provisions of this Article.

17 Voluntary retirement.

17.1. Any member who has attained or attains age 60 years and has 10 or more years of credited service or attains age 62 years and has 5 or more years of credited service may retire upon his written application on filed with the Retirement Board setting forth at what time, not less than 30 days nor more than 90 days subsequent to the execution and filing thereof, he desires to be retired. Upon his retirement he shall receive a pension provided in Section 19.1.

17.2. Any member of the former system who has acquired or acquires 25 or more years of credited service pursuant to the provisions of this Article, may retire prior to his attainment of age 60 years upon his written application filed with the Retirement Board setting forth at what time, not less than 30 days nor more than 90 days subsequent to the execution and filing thereof, he desires to be retired. If the member of the former system has attained age 55 years he may use both credited service and non-contributory service for the exclusive purpose of satisfying the 25 years required of the preceding service. Upon his retirement he shall receive a pension provided in Section 19.1.

17.3. Any Tier 1 Member whose age and years of service, when added, equals 80 or more may retire upon the member’s written application filed with the Retirement Board setting forth the date the member desires to be retired. Any Tier 2 Member or Tier 3 Member whose age and years of service, when added, equals 87 or more may retire upon the member’s written application filed with the Retirement Board setting forth the date the member desires to be retired. Upon retirement, the member shall be paid the pension provided in Section 19.1.

(Election of 11-13-1975; election of 11-1-1983; election of 10-6-1987; election of 10-3-1995; election of 3-12-2013, eff. 6-17-2013; election of 8-25-2015, eff. 10-22-2015)

18 Reserved.

Editor’s note—An election held September 9, 2003, repealed this Charter Section 18 in its entirety. Formerly, said section pertained to normal retirement and derived from an election of November 13, 1973. It should be noted that the repeal of this section shall take effect October 1, 2003.

19 Pension.

19.1. The amount of a member’s straight life pension, payable upon retirement as provided in this Article, shall be calculated as follows:

(a)    A Tier 1 member’s straight life pension, payable upon retirement as provided in this Article, shall be the greater of the sum of subsections (i), (ii), and (iii) below, or the amount set forth in subsection (iv)(1) or (iv)(2) below.

(i)    2.0 percent of the member’s final average compensation multiplied by the sum of the member’s credited service, subject to a maximum of 32.5 years, plus the member’s unused sick leave credited service; and

(ii)    1.0 percent of the member’s final average compensation multiplied by the portion, if any, of the member’s credited service which is in excess of 32.5 years, subject to a maximum of 3 years; and

(iii)    0.5 percent of the member’s final average compensation multiplied by the portion, if any, of the member’s credited service which is in excess of 35.5 years;

(iv)    (1) or $500.00 per month if member has 15 or more years of credited service, or

(2)    $250.00 per month if member has less than 15 years of credited service.

(v)    Unused sick leave shall not be included as credited service for computation of years of service under foregoing subsections 19.1(a)(ii), 19.1(a)(iii), 19.1(a)(iv), and Tier 2 Members shall have the portion of their straight life pension attributable to unused sick leave credited service calculated in accordance with subsection 19.1(a)(i) above.

(b)    A Tier 2 Member’s straight life pension, payable upon retirement as provided in this Article, shall be calculated as provided in subsections (i), (ii), (iii) and (iv) below, but without including unused sick leave credited service in the calculation:

(i)    if the member has less than 20 years of credited service, 2.1 percent of the member’s final average compensation multiplied by the sum of the member’s credited service; or

(ii)    if the member has 20 or more years of credited service, but less than 25 years of credited service, 2.15 percent of the member’s final average compensation multiplied by the sum of the member’s credited service; or

(iii)    if the member has 25 or more years of credited service, but less than 30 years of credited service, 2.20 percent of the member’s final average compensation multiplied by the sum of the member’s credited service; or

(iv)    if the member has 30 or more years of credited service, 2.30 percent of the member’s final average compensation multiplied by the sum of the member’s credited service.

(c)    In addition to the amount specified in subsections (b)(i), (b)(ii), (b)(iii) and (b)(iv) above, an amount will be added to each Tier 2 Member’s straight life pension, payable upon retirement as provided in this Article, as specified in subsection 19.1(a)(v) above.

(d)    A Tier 3 Member’s straight life pension, payable upon retirement as provided in this Article, shall be calculated as provided in subsections (i), (ii), (iii) and (iv) below:

(i)    if the member has less than 10 years of credited service, 1.85 percent of the member’s final average compensation multiplied by the sum of the member’s credited service; or

(ii)    if the member has 10 or more years of credited service, but less than 20 years of credited service, 1.9 percent of the member’s final average compensation multiplied by the sum of the member’s credited service; or

(iii)    if the member has 20 or more years of credited service, but less than 30 years of credited service, 2.0 percent of the member’s final average compensation multiplied by the sum of the member’s credited service; or

(iv)    if the member has 30 or more years of credited service, 2.1 percent of the member’s final average compensation multiplied by the sum of the member’s credited service.

A member may elect, at any time prior to the date of the first payment of the member’s pension is made, to be paid the pension under an optional form of payment provided in Section 24.1 in lieu of the straight life form of payment.

19.2. In the event a retirant dies before the aggregate amount of straight life pension payments received by him equals the accumulated contributions standing to his credit in the employee’s savings fund at the time of his retirement, the difference between his said accumulated contributions and the said aggregate amount of pension payments received by him shall be paid from the pension reserve fund to such person or persons as he shall have nominated by written designation duly executed and filed with the Retirement Board. In the event there be no such designated person surviving the retirant such difference, if any, shall be paid to his legal representative. No benefits shall be paid under this section on account of death of a retirant if he was receiving a pension under Options A Standard, A Pop-up, B Standard, B Pop-up, or C provided in Section 24.1.

19.3. The amount of each pension having an effective date prior to January 2, 1988 shall be redetermined and the redetermined amount shall be the basis of pension payments from and after June 1, 1988. The amount of the redetermined pension provided in this section, shall be equal to the base amount of the pension multiplied by 80 percent of the average of the monthly consumer price indexes for calendar year 1987 and divided by the average of the monthly consumer price indexes for the calendar year containing the effective date of the pension. The base amount of a pension is the amount of pension that would have been paid for the month of June 1988 in the absence of all prior redeterminations. The effective date of a survival pension being paid the beneficiary of a deceased retirant who elected an optional form of payment provided in Section 24.1 shall be the effective date of the retirant’s pension. Consumer Price Index means the Consumer Price for Urban Wage Earners as published by the United States Department of Labor. The minimum amount of redetermined pension shall be the greater of 101 percent of the amount of pension that would be payable for the month of June 1988 in the absence of the redetermination provided by this section and $1,200 annually. Additional pension amounts payable pursuant to the redetermination provided by this section shall be financed in part by the positive difference between the Pension Reserve Fund and retired life liabilities which were effective prior to the redetermination.

19.4. A normal, voluntary or disability pension shall commence the first day of the month following retirement. A survivor pension shall commence the first day of the month following the date of the death resulting in the pension.

19.5. Termination of payment of a pension shall occur at the end of the month in which the event causing termination occurs. Payment shall be made for the full month of termination.

19.6. Tax equity adjustment. Any member of the City of Phoenix Employees’ Retirement Plan who has retired prior to January 1, 1989, shall receive a 3% increase in benefits as a tax equity adjustment effective as of January 1, 1989. Any member retiring between January 1, 1989 and January 1, 1990, shall receive a 3% increase in benefits as a tax equity adjustment effective upon their date of retirement.

19.7.(a)     Effective January 2, 2000, notwithstanding any other provision of the Charter, all retirees and surviving option beneficiaries pursuant to Sections 24 and 25.2(a), with 15 or more years of credited service shall receive a pension of at least $500.00 per month.

(b)    Effective January 2, 2000, notwithstanding any other provision of the Charter, all retirees and surviving option beneficiaries pursuant to Sections 24 and 25.2(a), with less than 15 years of credited service shall receive a pension of at least $250.00 per month.

(c)    Effective for retirements on or after July 1, 2013, this Section 19.7 shall apply only to Tier 1 Members and their beneficiaries.

(Election of 11-13-1973; election of 10-6-1987; election of 10-3-1989; election of 9-7-1999; election of 3-12-2013, eff. 6-17-2013; election of 8-25-2015, eff. 10-22-2015)

20 Deferred pension.

20.1. Should any member who has five or more years of credited service leave City employment for any reason except his retirement or death he shall be entitled to a pension as provided in Section 19.1 as that section was in effect at the time he left City employment. His pension shall begin the first day of the calendar month next following the month in which his written application for same is filed with the Retirement Board on or after his attainment of age 62 years. In the event he withdraws his accumulated contributions from the Employees’ Savings Fund, he shall thereupon forfeit his rights to a deferred pension as provided in this section. Except as otherwise provided in this Article, he shall not receive service credit for the period of his absence from City employment and his balance in the Employees’ Savings Fund shall accumulate at regular interest, not to exceed 3.75 percent per annum beginning January 1, 2016.

(Election of 11-1-1983; election of 8-25-2015, eff. 10-22-2015)

21 Disability retirement.

21.1. Entitlement to Benefits. Any member with ten (10) or more years of credited service who experiences total and permanent disability resulting in the inability to perform in the service of the City and/or in a termination of employment by the City shall be entitled to a benefit commencing at Disability Retirement Date computed in the manner set forth in Section 19.1 of this Plan.

21.2. Waiver of Service Requirement. The ten (10) or more years of service requirement contained in Section 21.1 shall be waived in the case of a member whose total and permanent disability is found by the Disability Assessment Committee to be the natural and proximate result of a personal injury or disease arising out of and in the course of his actual performance of duty in the employ of the City.

21.3 Disability Retirement Date. Shall mean the date upon the member’s written application or the date upon which the application is approved by the disability assessment committee or the retirement board or upon the application of his department head, filed with the Executive Secretary or, if later, the date upon which a member has exhausted any sick leave, vacation time and compensation time standing to the member’s credit.

21.4. Minimum Benefit. In the event that a member has less than seven (7) years and six (6) months of credited service in determining his benefit in the manner set forth in Section 19.1 of this Plan, his credited service shall be increased to seven (7) years and six (6) months.

21.5. Benefit Limitation. The monthly benefit payable to a disability retiree during his workmen’s compensation period shall not exceed the difference between his final monthly compensation as determined at the date of his disability and his monthly workmen’s compensation award, if any.

21.6. Termination of Workmen’s Compensation. Upon termination of a disability retiree’s workmen’s compensation period, if any, he shall be given credited service for the said period and his disability benefit shall be recomputed in the manner set forth in Section 19.1 of this Plan to include such additional credited service.

(Election of 10-6-1987; election of 9-9-2003, eff. 10-1-2003)

22 Form and duration of disability benefit payments.

22.1. Alternative modes of benefit payments are available pursuant to Section 24.1. Unless the member files a timely election in writing to receive benefits by an alternative mode, the following shall prevail with respect to benefits payable pursuant to Section 21:

(a)    Members who are unmarried as of the date on which benefits first become payable pursuant to Section 21 shall receive payments in the form of a straight life pension.

(b)    Participants who are married as of the date as of which benefits first become payable pursuant to Section 21 shall receive benefits in the form of Option A.

(c)    Except to the extent that continued benefits may be payable by reason of the provisions of Option A or any alternative mode of benefit payment in force, benefits payable pursuant to this Section 22 shall be:

(1)    Suspended in the event of the member’s recovery from total and permanent disability with benefits to resume as retirement benefits at the later of

(i)    Voluntary or Normal Retirement, or

(ii)    The date of the actual retirement unless the member again suffers total and permanent disability prior to Voluntary or Normal Retirement (in which case benefits shall resume upon recurrence of total and permanent disability);

(2)    Terminated in the event of the member’s death.

(Election of 10-6-1987)

23 Determination of disability.

23.1. Determination of Total and Permanent Disability. The existence or continuance of a condition of total and permanent disability shall be determined by the Disability Assessment Committee on the basis of such medical evidence as the Disability Assessment Committee deems necessary by applying such criteria in making medical determinations in a uniform, consistent and non-discriminatory manner to all members in similar circumstances. Each person alleging a condition of total and permanent disability or the continuance of such condition shall be required to undergo any medical examinations required by the Disability Assessment Committee. Each person alleging the continuance of total and permanent disability shall not be required to undergo medical examinations more frequently than twice annually, and further provided that all such examinations shall be at the expense of the Plan. Any person claiming total and permanent disability or the continuance of such condition, and refusing to submit to any medical examination required by the Disability Assessment Committee, or refusing to authorize the release to the Disability Assessment Committee, of any medical information with respect to such condition, shall be presumed not to suffer total and permanent disability, for the purposes of this Plan.

Failure to qualify for disability benefits under this Plan shall not adversely affect any right the member may otherwise have to benefits under any other provision of this Plan.

23.2. Appeals of Denied Claims for Disability Benefits. In the event that any claim for benefits is denied in whole or in part, the member whose claim has been so denied shall be notified of such denial in writing by the Executive Secretary. The notice advising of the denial shall specify the reason or reasons for denial, make specific reference to pertinent Plan provisions, describe any additional material or information necessary for the claimant to perfect the claim (explaining why such material or information is needed), and shall advise the member of the procedure for the appeal of such denial. All appeals shall be made by the following procedure:

(a)    The member whose claim has been denied shall file with the Executive Secretary a notice of desire to appeal the denial. Such notice shall be filed within sixty (60) days of notification by the Executive Secretary of claim denial, shall be made in writing, and shall set forth all of the facts upon which the appeal is based. Appeals not timely filed shall be barred.

(b)    The Executive Secretary shall, within thirty (30) days, of receipt of the member’s notice of appeal, establish a hearing date on which the member may make an oral presentation to the Retirement Board in support of his appeal. The member shall be given not less than ten (10) days notice of the date set forth for the hearing.

(c)    The Retirement Board shall consider the merits of the claimant’s written and oral presentations, the merits of any facts or evidence in support of the denial of benefits, and such other facts and circumstances as the Retirement board shall deem relevant. If the claimant elects not to make an oral presentation, such election shall not be deemed adverse to his interest, and the Retirement Board shall proceed as set forth below as though an oral presentation of the contents of the claimant’s written presentations had been made.

(d)    The Retirement Board shall render a determination upon the appealed claim which determination shall be accompanied by a written statement as to the reasons therefore.

(Election of 10-6-1978; election of 10-6-1987)

24 Pension options.

24.1. (a) Prior to the date the first payment of his pension is made, but not thereafter, a member may elect to receive his pension as a straight life pension payable throughout his life and terminating at his death, or he may elect to receive the actuarial equivalent, computed as of the date of his retirement, of his straight life pension in a reduced pension payable throughout his life, and nominate a beneficiary, in accordance with the provisions of Option A Standard, A Pop-up, B Standard, B Pop-up, or C set forth below:

(b)    The normal option for members legally married at the time of retirement shall be Option A Standard (100% survivor). The normal option for members unmarried at the time of retirement shall be Straight Life.

(c)    If a member, legally married at the time of retirement, selects an option other than Option A Standard (100% survivor), the spouse shall consent to the change at the same time. Such consent shall be in writing on the forms supplied by the Retirement Systems Office.

(d)    Option A Standard—100 Percent Survivor Pension: Under Option A Standard upon the death of the retirant his reduced pension shall be continued throughout the life of and paid to such person, having an insurable interest in his life, as he shall have nominated by written designation duly executed and filed with the Retirement Board prior to the date the first payment of his pension is made.

(e)    Option A Pop-up—100 Percent Survivor Pension: Under Option A Pop-up upon the death of the retirant his reduced pension shall be continued throughout the life of and paid to such person, having an insurable interest in his life, as he shall have nominated by written designation duly executed and filed with the Retirement Board prior to the date the first payment of his pension is made. Should the person nominated die before the retirant, the pension paid to the retirant shall be increased to equal a straight life pension for the remainder of his life.

(f)    Option B Standard—50 Percent Survivor Pension: Under Option B Standard upon the death of the retirant, one-half of his reduced pension shall be continued throughout the life of and paid to such person, having an insurable interest in his life, as he shall have nominated by written designation duly executed and filed with the Retirement Board prior to the date the first payment of his pension is made.

(g)    Option B Pop-up—50 Percent Survivor Pension: Under Option B Pop-up upon the death of the retirant, one-half of his reduced pension shall be continued throughout the life of and paid to such person, having an insurable interest in his life, as he shall have nominated by written designation duly executed and filed with the Retirement Board prior to the date the first payment of his pension is made. Should the person nominated die before the retirant, the pension paid the retirant shall be increased to equal a straight life pension for the remainder of his life.

(h)    Option C—Pension 10 Years Certain and Life Thereafter: Under Option C the retirant shall receive a reduced pension payable throughout his life with the provision that if he dies before he has received 120 monthly pension payments the payments shall be continued for the remainder of the period of 120 months to such person or persons, in equal shares, as the retirant shall have nominated by written designation duly executed and filed with the Retirement Board. If there be no such designated person surviving the retirant such payments shall be continued for the remainder of the period of 120 months and paid to the estate of the survivor of the retirant and his last surviving designated beneficiary.

24.2. Optional Cost of Living Adjustment. Any Tier 3 Member who is eligible to retire with a pension benefit under the Retirement Plan shall have the option of receiving a pension in the form of an annuity for the life of the member, or for any optional form otherwise permitted under Section 24.1, but reduced by a percentage determined by the Retirement Board’s actuary to allow for the member to receive an annual cost of living adjustment in the future, funded by the reduction in the initial amount of the member’s annuity benefit. A Tier 3 Member who elects to participate in this Optional Cost of Living Adjustment will be eligible to receive a cost of living adjustment to the member’s pension benefit equal to the percentage increase, not less than zero, in the Phoenix area Consumer Price Index as determined by the Center for Business Research at Arizona State University, or if this index is not available, the Consumer Price Index of the Department of Labor. A Tier 3 Member who elects to participate in this Optional Cost of Living Adjustment will not be eligible to receive a cost of living adjustment hereunder unless the Member has received 36 monthly pension payments as of the January 1 of the year in which such adjustment is to be provided. The final percentage adjustment, if any, shall be applied to each Eligible Person’s annual benefit and paid on a monthly basis, commencing in March of each year for which applicable, retroactive to January 1 of that year, and shall constitute a permanent adjustment to such pension benefit.

(Election of 10-3-1989; election of 8-25-2015, eff. 10-22-2015)

25 Survivor pensions.

25.1. In the event a member with less than 10 years of credited service dies while in the employ of the City his credited service shall be increased to 10 years if the Retirement Board finds his death (1) is the result of causes arising out of and in the course of his employment by the City, and (2) is compensable under the Workmen’s Compensation Act of the State of Arizona.

25.2. In the event a member with 10 or more years of credited service dies while in the employ of the City the applicable benefits provided in paragraphs (a), (b) and (c) of this Section shall be paid, subject to Sections 25.3 and 25.4.

(a)    If the deceased member leaves a widow or a widower, the widow or widower shall be paid a pension computed in the same manner in all respects as if the member had (1) retired the day preceding the date of his death, notwithstanding that he might not have attained age 60 years, (2) elected the normal option in Section 24.1 that provides a widow or widower pension, and (3) nominated his widow or widower as beneficiary. Upon the death of the widow or widower his pension shall terminate.

(b)    If the deceased member leaves an unmarried child or children under age 18 years, each such child shall receive a pension of $200 per month. Upon a child’s adoption, marriage, death, or attainment of age 18 years his pension shall terminate. It is also provided that any child pension in effect as of January 1, 2000 shall be increased to $200 per month.

(c)    If the deceased member leaves neither a widow or widower, nor children, eligible to pensions under paragraphs (a) or (b) of this Section, but he leaves a parent or parents whom the Retirement Board finds to be dependent upon him for at least 50 percent of their support due to absence of earning power because of physical or mental disability, each such parent shall receive a pension of an equal share of $720 per annum. Upon a parent’s remarriage or death his pension shall terminate.

25.3 During the workmen’s compensation period arising on account of the death of a member the total of the pensions provided in Section 25.2 payable in a year shall not exceed the difference between the member’s final compensation and the workmen’s compensation, if any, converted to an annual basis. *See editor’s note at the end of this section.

25.4 In the event the pensions, provided in Section 25.2, payable on account of the death of a member are terminated before there has been paid to the survivor beneficiary or beneficiaries an aggregate amount equal to the member’s accumulated contributions standing to his credit in the employees’ saving fund at the time of his death the difference between his said accumulated contributions and the said aggregate amount of pensions paid shall be paid in accordance with such rules and regulations as the Retirement Board shall from time to time adopt. *See editor’s note at the end of this section.

(Election of 10-3-1989; election of 9-7-1999)

Editor’s note—At the request of The Office of the City Attorney, Subsections 25.3 and 25.4 were added to Section 25. These Subsections had been inadvertently omitted from codification after the Election of November 13, 1973.

26 Return of accumulated contributions.

26.1. Any member who leaves the employ of the City before he has satisfied the age and service requirements for retirement provided in Section 17.1, for any reason except his death or retirement, he shall be paid his accumulated contributions standing to his credit in the employees’ savings fund upon his request in writing filed with the Retirement Board.

26.2. Should any member die and leave no beneficiary entitled to a pension provided for in this Article, his accumulated contributions standing to his credit in the employees savings fund at the time of his death shall be paid to such person or persons as he shall have nominated by written designation duly executed and filed with the Retirement Board. If there be no such designated person or persons surviving the said member, then his said accumulated contributions shall be paid to his legal representative.

26.3. Refunds of accumulated contributions as provided in this Article, may be made in installments according to such rules and regulations as the Retirement Board may from time to time adopt.

27 Employees’ savings fund.

27.1. (a) The employees’ savings fund is hereby continued. It shall be the fund in which shall be accumulated, at regular interest (not to exceed 3.75 percent per annum beginning January 1, 2016), the contributions deducted from the compensations of members and from which shall be made transfers and refunds of accumulated contributions as provided in this Article.

(b)    The contributions of a Tier 1 Member to the Retirement Plan shall be 5 percent of his annual compensation as reflected in Section 28.1(b). The contributions of a Tier 2 or Tier 3 Member to the Retirement Plan shall be a percentage of his annual compensation determined pursuant to Section 28.1(b). The officer or officers responsible for preparing the payroll shall cause the contributions provided herein to be deducted from the compensation of each member on each and every payroll, for each and every payroll period so long as he remains a member of the Retirement Plan. When deducted each of said amounts shall be paid to the Plan and shall be credited to the individual account in the employees’ savings fund of the member from whose compensations said deductions were made.

(c)    The contributions provided in Subsection (b) above shall be made notwithstanding that the minimum compensation provided by law for any member shall be thereby changed. Every member shall be deemed to consent and agree to the deductions made and provided for herein. Payment of his compensation less said deduction shall be a full and complete discharge and acquittance of all claims and demands whatsoever for services rendered by him during the period covered by such payment, except as to benefits provided in this Article.

(d)    In addition to the contributions hereinbefore provided in this Section, the repayment of any amounts pursuant to the provisions of Section 13.1 shall be deposited in the employees’ savings fund and credited to the member’s individual account. Repayments pursuant to the provisions of Section 13.1 may be made by a single contribution or by an increased rate of contribution as approved by the Retirement Board.

(e)    The accumulated contributions transferred from the former system to the Retirement Plan and such other amounts as may be deposited by a member, as provided in Sections 14.2 and 14.3, shall be credited to his individual account in the employees’ savings fund.

(f)    The accumulated contributions of a member standing to his credit in the employees’ savings fund shall be transferred to the pension reserve fund upon his retirement, or upon his death if a pension becomes payable by the Retirement Plan on account of his death. At the expiration of a period of 2 years from and after the date an employee ceases to be a member any balance of accumulated contributions standing to his credit in the employees’ savings fund, unclaimed by the member or his legal representative, shall be transferred to the income fund, except as otherwise provided in this Article.

(Election of 11-13-1973; election of 3-12-2013, eff. 6-17-2013; election of 8-25-2015, eff. 10-22-2015)

28 Pension accumulation fund.

28.1. (a) The pension accumulation fund is hereby continued. It shall be the fund in which shall be accumulated the contributions made by the City to the Retirement Plan, and from which shall be made transfers to the pension fund, as provided in this Section.

(b)    Upon the basis of such mortality and other tables of experience, and regular interest, as the Retirement Board shall from time to time adopt the actuary shall annually compute (1) the actuarially-required pension reserves for pensions being paid retirants and beneficiaries, and (2) the actuarially-required pension reserves for service rendered and to be rendered by members. The pension reserves so computed shall include the reserves already held in (and to be deposited in) the employees’ savings fund and the pension accumulation fund for purposes of the calculation of the annual contributions determined under this Section. The actuarially-required pension reserves shall be financed jointly by the City and members by annual contributions determined by the Retirement Board in accordance with the provisions of paragraphs (1) and (2) below:

(1)    The total required annual contribution to the Retirement Plan for members’ current and accrued service, as well as for pensions being paid retirants and beneficiaries, shall be calculated as follows:

(i)    an amount which if paid annually during the members’ future service is expected to be sufficient to provide the actuarially-required pension reserves at the time of their retirements for the portions of the pensions to be paid them based upon their future service; plus

(ii)    an amount which if paid annually over a period of years, to be determined by the Retirement Board, will amortize at regular interest the actuarially-required pension reserves (to the extent not funded by current assets), if any, for the accrued service portions of the pension to be paid members upon their retirements and pensions being paid retirants and beneficiaries.

(2)    Once calculated, the total required annual contribution to the Retirement Plan described in subparagraph (b)(1) above will be stated in the form of a percentage of members’ projected annual compensations for the applicable fiscal year (the "Projected Percentage"). The total required annual contribution will then be paid to the Retirement Plan by both the City and members as follows:

(i)    Each Tier 1 Member will pay to the Retirement Plan 5 percent of his annual compensation.

(ii)    Each Tier 2 Member and Tier 3 Member will pay to the Retirement Plan a percentage of his annual compensation equal to one-half of the Projected Percentage, but, as of the start of the first full pay period after January 1, 2016, such percentage shall not exceed 11 percent of the member’s annual compensation (i.e., if one-half of the Projected Percentage is 11 percent or less of the member’s annual compensation then the member pays one-half of the Projected Percentage, but if one-half of the Projected Percentage is more than 11 percent of the member’s annual compensation then the member pays only 11 percent of his annual compensation).

(iii)    The City will pay to the Retirement Plan (A) one-half of the Projected Percentage of the aggregate compensation of all Tier 2 Members and Tier 3 Members, plus (B) as of the first full pay period after January 1, 2016, if one-half of the Projected Percentage is in excess of 11 percent of members’ projected annual compensations for the applicable fiscal year, the difference between 11 percent of the aggregate compensation of all Tier 2 Members and Tier 3 Members for that fiscal year and one-half of the Projected Percentage of the aggregate compensation of all Tier 2 Members and Tier 3 Members, plus (C) the Projected Percentage less 5 percent (but not less than zero) of the aggregate compensation of all Tier 1 Members.

(iv)    If the Projected Percentage is less than 5 percent, each Tier 1 Member will still pay to the Retirement Plan 5 percent of his annual compensation as specified in subparagraph (b)(2)(i) above, however, the Projected Percentage shall be adjusted (but shall not be less than zero) so that 5 percent of the projected aggregate compensation of all Tier 1 Members plus the Projected Percentage times the projected aggregate compensation of all Tier 2 Members and Tier 3 Members equals the total required annual contribution.

(c)    The Retirement Board shall, in each fiscal year, certify to the City Council the contributions determined in Subsection (b) of this Section and the City Council shall appropriate and the City and members shall pay, within the next fiscal year, the contributions so certified. When paid the contributions from the City shall be credited to the pension accumulation fund. When paid the contributions from members shall be credited to the individual account in the employees’ savings fund of the member from whose compensation said deductions were made in accordance with Section 27.

(d)    Should the balance in the pension reserve fund be insufficient to cover the pension reserve fund liabilities the amount of such insufficiency shall be transferred from the pension accumulation fund to the pension reserve fund.

(e)    Upon the retirement of a member, or upon the death of a member if a pension becomes payable on account of his death, the pension reserve for the pension payable, less his balance in the employees’ savings fund at the time of his retirement or death, shall be transferred from the pension accumulation fund to the pension reserve fund.

(f)    In any fiscal year the City may elect to contribute amounts to the Retirement Plan in excess of the contributions to the pension accumulation fund required pursuant to Section 28.1(b). If the City exercises its right to make additional contributions to the pension accumulation fund pursuant to this subparagraph (f), then the amounts of such additional contributions will not offset or be used to reduce the amount of required contributions from members during the fiscal year in which they are made.

(Election of 3-12-2013, eff. 6-17-2013; election of 8-25-2015, eff. 10-22-2015)

29 Pension reserve fund.

29.1. The pension reserve fund is hereby continued. It shall be the fund from which shall be paid all pensions payable pursuant to the provisions of this Article. In the case of a disability retirant who is returned to the employ of the City his pension reserve, computed as of the date of his return, shall be transferred from the pension reserve fund to the employees’ savings fund and pension accumulation fund in the same proportion that his pension reserve, as of the date of his retirement, was transferred from the employees’ savings fund and pension accumulation fund to the pension reserve fund. The amount transferred to the employees’ savings fund shall be credited to his individual account therein.

30 Mortality reserve fund.

30.1. The mortality reserve fund is hereby discontinued. All pensions being paid from the mortality reserve fund of the City of Phoenix Employees’ Retirement Law of 1953 shall hereafter be paid from the pension reserve fund. The pension reserves for pensions being paid from the mortality reserve fund shall be transferred to the pension reserve fund. Any excess balance in the mortality reserve fund shall be transferred to the pension accumulation fund.

31 Income fund.

31.1. The income fund is hereby continued. It shall be the fund to which shall be credited all interest, dividends and other income from investments of the Retirement Plan, all gifts and bequests, all unclaimed accumulated contributions as provided in this Article, and all other moneys the disposition of which is not specifically provided for in this Article. There shall be paid or transferred from the income fund all amounts required to credit regular interest to the various funds of the Plan as provided in this Article. Whenever the Retirement Board determines that the balance in the income fund is more than sufficient to cover current charges to the fund such excess may be transferred to the other funds of the plan to cover special needs of the funds, or such excess may be used to provide contingency reserves, as the Board shall determine. Whenever the balance in the income fund is found to be insufficient to cover the charges to the fund the amount of such insufficiency shall be transferred from the pension accumulation fund to the income fund.

31.2. A member’s accumulated contributions which have been transferred to the income fund, as provided in this Article, shall be paid from the income fund to such person or persons making valid claim for same approved by the Retirement Board.

32 Allowance of regular interest.

32.1. At the end of each fiscal year the Retirement Board shall allow and credit regular interest, not to exceed 3.75 percent per annum beginning January 1, 2016, to each member’s account in the employees’ savings fund; said interest for a member shall be computed on the mean balance in his account during the year. At the end of each fiscal year the Board shall allow and credit regular interest on the mean balances in the pension accumulation fund and the pension reserve fund. The interest so allowed and credited shall be transferred from the income fund.

(Election of 8-25-2015, eff. 10-22-2015)

33 Expense fund.

33.1. The expense fund shall consist of all moneys provided by the City to pay the administration expenses of the Retirement Plan.

34 Fiscal management.

34.1. General duties and powers. The Retirement Board shall be the trustees of the assets of the Retirement Plan. The Retirement Board shall have the power to contract for (1) investment advice, (2) safekeeping of securities, (3) handling of investments, (4) clearing of transactions, and (5) such other services it deems necessary for the proper and efficient handling of the monies and investments of the Retirement Plan. It shall have the power to register or re-register the investments of the Retirement Plan in the name of the Retirement Board as trustees of the Retirement Plan or in the name of its nominee.

34.2. Prudent investor rule. The Retirement Board has a duty to invest and manage the assets of the Retirement Plan solely in the interests of the members and beneficiaries of the Retirement Plan, in the manner set forth in this Section 34.2.

(a)    The Retirement Board shall invest and manage trust assets as a prudent investor would, by considering the purposes, terms, distribution requirements, and other circumstances of the Retirement Plan. In satisfying this standard, the Retirement Board shall exercise reasonable care, skill, and caution.

(b)    The Retirement Board’s investment and management decisions respecting individual assets should not be evaluated in isolation, but rather must be evaluated in the context of the Retirement Plan asset portfolio as a whole and as a part of an overall investment strategy having risk and return objectives reasonably suited to the Retirement Plan. The prudent investor rule is a measure of the anticipated effect of the Retirement Board’s investment decisions on the investment portfolio as a whole, given the facts and circumstances prevailing at the time of the investment decision or action. The prudent investor rule shall be interpreted and applied as a test of investment related conduct and not of resulting investment performance.

(c)    Among circumstances that the Retirement Board shall consider in investing and managing trust assets are such of the following as are relevant to the Retirement Plan or its members and beneficiaries:

(1)    General economic conditions;

(2)    The possible effect of inflation or deflation;

(3)    The expected tax consequences of investment decisions or strategies;

(4)    The role that each investment or course of action plays within the overall Retirement Plan portfolio;

(5)    The expected total return from income and the appreciation of capital;

(6)    The Retirement Plan’s need for liquidity, regularity of income, and preservation or appreciation of capital; and

(7)    The fiduciary duty to incur only reasonable and appropriate costs in relation to the assets and the purpose of the Retirement Plan.

(d)    The Retirement Board shall make a reasonable effort to verify facts relevant to the investment and management of Retirement Plan assets.

(e)    The Retirement Board may invest in any kind of property or type of investment consistent with the standards of this Section 34.2. If the Retirement Board wishes to invest in an investment category not previously utilized by the Retirement Board for the investment of Retirement Plan assets, it may do so provided that such investment is consistent with the standards of this Section 34.2 and two-thirds of the Retirement Board authorizes the utilization of the new investment category.

34.3. Diversification. The Retirement Board shall diversify the investments of the Retirement Plan unless, after taking into account all relevant circumstances, the Retirement Board reasonably determines that the interests of the members and beneficiaries, as well as the goals and purposes of the Retirement Plan, are better served without diversifying.

34.4. Application to Retirement Plan. Sections 34.2 through 34.4 govern only Retirement Plan investment decisions or actions occurring after July 1, 2013. The Retirement Board has a duty, within a reasonable and appropriate time after July 1, 2013, to review the Retirement Plan investments and to conform the existing Retirement Plan investments to the prudent investor rule. The Retirement Board’s decision to retain or dispose of an investment may be influenced properly by the investment’s special relationship or value to the Retirement Plan.

34.5. Delegations. The Retirement Board may delegate its power to purchase or sell any of the securities and investments of the Retirement Plan to a member or committee of members of the Board.

(Election of 11-13-1973; election of 11-1-1983; election of 9-7-1999; election of 3-12-2013, eff. 6-17-2013)

35 False statements.

35.1. Any person who knowingly makes any false statement or who falsifies or permits to be falsified any record of the Retirement Plan, in any attempt to defraud the Plan, shall be guilty of a misdemeanor and subject to a fine not exceeding $300 or 90 days imprisonment in the City Jail, or both.

36 Errors.

36.1. In the event any change or error in the records of the Retirement Plan results in any person receiving from the Plan more or less than he would have been entitled to receive had the records been correct, the Retirement Board shall correct such error and, as far as practicable, shall adjust subsequent payments in such manner that the actuarial equivalent of the benefits to which the said person was correctly entitled shall be paid. In the event of overpayment to any person the Board may take legal action, if necessary, to recover such overpayment.

37 Exemption from taxation and execution.

37.1. The right of a person to a pension, to the return of accumulated contributions, and any other right accrued or accruing to any person under the provisions of this Article shall be unassignable and shall not be subject to execution, garnishment, attachment, the operation of bankruptcy or insolvency law, or any other process of law whatsoever, except as is specifically provided in this Article. All benefits payable by the Retirement Plan and the cash and other assets of the Plan shall be exempt from all municipal taxes.

37.2. If a member or a beneficiary, excluding minors, is covered under a group insurance or prepayment plan participated in by the City, and should he or she be permitted to and elect to continue such coverage as a retirant or beneficiary, he or she may authorize the Retirement Board to have deducted from his or her pension the payments required to continue coverage under such insurance or pre-payment plan. The City shall have the right to set-off for any claim arising from theft or embezzlement by any member, retirant or beneficiary.

(Election of 11-1-1983)

38 Applicability of amendments.

38.1. The provisions of this Article in effect at the time a member retires, or at the time a pension becomes payable on account of his death before retirement, shall be applicable as to the payment of the pension arising on account of his retirement or death, except as is otherwise specifically provided in this Article.

39 Pension guarantee.

39.1. The pension payable to a retirant whose credited service includes service rendered prior to December 29, 1953 shall be not less than the pension portion of the retirement allowance to which he would have been entitled under the former system had the former system been in effect at the time of his retirement plus an annuity which is the actuarial equivalent of his accumulated contributions standing to his credit in the employees’ savings fund of this Retirement Plan at the time of his retirement without offset or deduction of social security benefits he might receive.

40 Adjustment of pensions.

40.1. All members, spouses of deceased members, beneficiaries of deceased members named pursuant to Section 24 herein, who are receiving pensions at the time this section becomes effective shall receive an increase in benefits and pensions effective January 1, 1982 in accordance with the following:

(a)    5% per year for each year that benefits or pensions were paid prior to December 31, 1960;

(b)    4% per year for each year that benefits or pensions were paid from January 1, 1961 through December 31, 1964;

(c)    2% per year for each year that benefits or pensions were paid from January 1, 1965 through December 31, 1969;

(d)    1% per year for each year that benefits or pensions were paid from January 1, 1970 through December 31, 1981.

40.2. All retirees and surviving option beneficiaries pursuant to Sections 24 and 25.2(a) of deceased retirees named pursuant to Section 24 herein, who are receiving pensions at the time this subsection becomes effective shall receive a pension increase effective January 1, 2000 in accordance with the following:

(a)    17.4% of pension amount as it existed on December 31, 1991, if retired prior to January 1, 1988.

(b)    13.9% of pension amount as it existed on December 31, 1991, if retired during calendar year 1988.

(Election of 11-3-1981; election of 9-7-1999)

41 Post-retirement distribution benefit for City employees.

41.1. After the end of each fiscal year, the Retirement Board shall determine the rate of investment return earned on Retirement Plan assets during the fiscal year, based upon methods established by the Retirement Board.

41.2. At the end of each fiscal year, the Retirement Plan actuary shall determine the present value of pensions to be paid after the end of the fiscal year to retirants and pension beneficiaries, excluding minors, in receipt of pensions at the end of the fiscal year. The assumed interest rate used in the determination shall be the rate adopted by the Retirement Board for purposes of the annual actuarial valuation.

41.3. The distribution income at the end of each fiscal year shall be equal to the product of the present value of pensions determined in subsection 2 at the end of the previous fiscal year times the positive excess, if any, of the rate of investment return determined in subsection 1 exceeding the assumed rate defined in subsection 2.

41.4. The distribution amount for an individual retirant or pension beneficiary, excluding minors, shall be determined in accordance with a formula adopted by the Retirement Board. In no case shall the ratio of the distribution amount to the annual pension amount for an individual retirant or pension beneficiary, excluding minors, exceed one-half of the increase in the Consumer Price Index during the preceding calendar year, or 3% of the retirant’s or beneficiary’s pension, whichever is less.

41.5. The distribution amount for each retirant or beneficiary shall be payable in the form of a supplemental payment prior to the seventh month after the end of the fiscal year. If a retirant dies before receipt of the retirant’s distribution amount the payment shall be made to the retirant’s pension beneficiary, if any. If a pension beneficiary dies before receipt of the pension beneficiary’s distribution amount, no payment shall be made.

41.6. Notwithstanding Sections 41.3 and 41.4, the ratio of distribution amount under Section 41 shall not be less than one percent, to the extent that funds are available in the Pension Equalization Reserve Fund.

41.7. The terms of this Section 41 will not apply to Tier 3 Members.

(Election of 11-1-1983; election of 10-3-1995; election of 8-25-2015, eff. 10-22-2015)

42 Post-retirement pension benefits equalization program.

42.1. There is hereby established the City of Phoenix Post-Retirement Pension Benefits Equalization Program (the "Program") which shall provide, but only to the extent that there are available earnings as computed pursuant to the provisions of Subsection 42.3 and 42.4 hereunder; for additional pension benefits to be paid to Eligible Persons, as provided in this Section.

42.2. For the purposes of this Section, the following definitions shall apply:

    Eligible Pension shall mean the annual benefit, if any, payable under this Section to Eligible Persons;

    Eligible Persons shall mean persons who, on January 1, 1992 and on any January 1 thereafter, have been receiving benefits as a retirant and/or a beneficiary, where benefit payments based on such retirant’s service have been made for the thirty-six (36) consecutive months immediately prior thereto.

    Excess Earnings mean investment earnings in excess of the amount that would have been earned had the Retirement Plan earned eight percent (8%) on assets allocated to the Pension Reserve Fund.

    Pension Equalization Reserve Fund ("Equalization Fund") shall mean the fund created pursuant to this Section to provide the source of payments to be made to Eligible Persons under the Program.

42.3. The Equalization Fund shall be established on January 1, 1992. The Equalization Fund shall be increased each calendar year by the Excess Earnings computed for the immediately preceding calendar year. The rate of actual investment earnings used to determine Excess Earnings is the annual average of the time weighted rates of return, reported by the Plan’s investment performance monitoring service, for the immediately preceding five calendar years. The Equalization Fund shall be decreased each calendar year by the actuarial present value of the increase, if any, in pensions paid during the calendar year as the result of any adjustment made under the provisions of this Section; with such amounts being transferred to the Pension Reserve Fund; and further decreased as the result of any adjustments under Section 41 of this Article.

42.4. The Final Percentage Adjustment to each Eligible Pension payment shall be computed as follows. The Basic Percentage Adjustment shall be determined; which adjustment shall be the percentage increase, not less than zero, in the Phoenix area Consumer Price Index as determined by the Center for Business Research at Arizona State University, or if this index is not available, the Consumer Price Index of the Department of Labor. The Board shall then determine that percentage adjustment which increases the actuarial present value of pensions being paid (as reported in the last annual actuarial valuation of the Plan) by the balance in the Equalization Fund. The Final Percentage Adjustment shall be lower of the two percentages.

42.5. The final percentage adjustment, if any, as determined under Subsection 42.4, shall then be applied to each Eligible Person’s annual benefit and paid on a monthly basis, commencing in March of each year for which applicable, retroactive to January 1 of that year, and shall constitute a permanent adjustment to such pension benefit.

42.6. This Section shall be effective from and after January 1, 1992.

42.7. The terms of this Section 42 will not apply to Tier 3 Members.

(Election of 10-1-1991; election of 8-25-2015, eff. 10-22-2015)

43 Tax qualified governmental pension plan.

43.1. The Retirement Plan is a public pension plan, intended to constitute a tax-qualified governmental retirement plan under Sections 401(A) and 414(D) of the Internal Revenue Code of 1954, as amended (the "Code"). The assets of the Retirement Plan are held in a separate trust, exempt from taxation under Section 501(A) of the Code, for exclusive benefit of the members and beneficiaries of the Retirement Plan. The Retirement Plan Trust also is intended to constitute an independent public trust pursuant to Article XXIX of the Constitution of the State of Arizona. The City of Phoenix Employees’ Retirement Law of 1953 shall be construed in a manner consistent with the tax-qualified governmental status of the Retirement Plan whenever possible.

43.2. In accordance with the obligations and requirements imposed on tax-qualified governmental pension plans under the Code, the Retirement Plan is, and shall continue to be, administered and operated in accordance with the compensation limitations set forth in Section 401(A)(17) of the Code, the contribution and benefit limitations set forth in Section 401(A)(16) and Section 415 of the Code, and the eligible rollover distribution requirements of Section 401(A)(31) of the Code. The Retirement Plan is, and shall continue to be, operated and maintained in reasonable and good faith compliance with the required minimum distribution requirements set forth in Section 401(A)(9) of the Code. To the extent required, the provisions of Code Sections 401(A)(9), 401(A)(16), 401(A)(17) and 401(A)(31) (and the applicable treasury regulations promulgated thereunder) are incorporated herein by this reference and the Retirement Board is authorized to adopt any and all policies necessary for proper implementation of the aforementioned code requirements.

43.3. Section 10.1 of the Retirement Plan authorizes the Retirement Board to adopt actuarial assumptions appropriate and necessary for the administration of the Retirement Plan. For purposes of compliance with Section 401(A)(25) of the Code, the actuarial assumptions adopted by the Retirement Board shall be set forth in an "Addendum to Section 10.1 of the City of Phoenix Employees’ Retirement Law of 1953" which shall be updated by the Board from time to time as necessary and maintained in the offices of the Executive Secretary to the Retirement Board.

43.4. Section 27 of the Retirement Plan requires mandatory contributions to the Retirement Plan from each member. The mandatory member contributions are deducted from the eligible compensation of each member on a pre-tax basis and deposited into the Retirement Plan Trust through an employer pick-up arrangement structured and operated in accordance with Section 414(H) of the Code and the terms of the private letter ruling issued to the Retirement Plan by the Internal Revenue Service on April 18, 1986.

(Election of 3-12-2013, eff. 6-17-2013)

ARTICLE III. TRANSFER OF ASSETS AND LIABILITIES3

[Sec. 1.] Transfer of assets.

1.1. The assets credited to the Chapter XXIV employees trust fund, created in Article I of this Chapter, shall be transferred to the employees savings fund, created in Article II of this Chapter.

1.2. The assets credited to the Chapter XXIV retirement trust fund, created in Article I of this Chapter, equal to the pension reserve liabilities of the mortality reserve fund, created in Article II of this Chapter, shall be transferred to the said mortality reserve fund. The remainder of the assets credited to the Chapter XXIV retirement trust fund shall be transferred to the pension accumulation fund, created in Article II of this Chapter.

2 Transfer of liabilities.

The City of Phoenix employees retirement plan, created and established in Article II of this Chapter, shall assume liability for all benefits payable and to be payable under the repealed Chapter XXIV system as provided for in Article I of this Chapter.

3 Transfer or records, equipment and other property.

All records, books and papers, office equipment, supplies and other property belonging to the repealed Chapter XXIV system shall be transferred to and become the property of the City of Phoenix employees retirement plan.

4 Securities.

All securities belonging to the Phoenix City employees retirement system registered in the name of the Phoenix City employees retirement system may continue to be so registered until disposed of.

5 Effective date.

This Article III shall be in force and effect after December 31, 1953.

Editor’s note—Ordinance states December 24, 1953. Official ballot and authentication of amendment printed as December 31, 1953.

ARTICLE IV. RETROACTIVE EMPLOYER SOCIAL SECURITY TAXES4

1 Payment authorized.

The City Council is hereby authorized to pay to the Treasurer of the State of Arizona such portion of the funds appropriated in the City of Phoenix budget for the fiscal year beginning July 1, 1953 as are required to pay the employer social security taxes accrued on and after January 1, 1951 and to July 1, 1954, in accordance with the agreement entered into between the Federal Security Administrator and the State of Arizona.

2 Effective date.

This Article IV shall be in force and effect December 30, 1953.


1

Editor’s note—The section catchlines in art. I were added by the editor.


2

Editor’s note—Ordinance states December 22, 1953. Official ballot and authentication of amendment printed as December 29, 1953.


3

Editor’s note—The section catchlines in art. III were added by the editor.


4

Editor’s note—The section catchlines in art. IV were added by the editor.